EXHIBIT 10.8
U.S. LABORATORIES INC.
FORM OF NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT made and entered into as of the _____ day of _______
"Grant Date"), by and between U.S. LABORATORIES INC., a Delaware corporation
(the "Company"), and ________________________________, an employee of the
Company ("Participant").
R E C I T A L S
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WHEREAS, the Company has in effect the U.S. Laboratories Inc. 1998
Stock Option Plan (the "Plan"), which permits options to purchase shares of
the Company's common stock, $.01 par value ("Stock"), to be granted to
certain employees of the Company.
WHEREAS, the Company believes it to be in the best interests of the
Company and its shareholders for employees of the Company and its
subsidiaries to obtain or increase their stock ownership interest in the
Company in order that they will have a greater incentive to work for and
manage the Company's affairs.
WHEREAS, the Participant is an employee of the Company or its
subsidiaries and has been selected by the Board of Directors [and the
________________ Committee of the Board of Directors of the Company (the
"Committee")] to receive an option under the Plan.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the covenants and agreements
herein set forth, the parties hereby mutually covenant and agree as follows:
1. GRANT. Subject to the terms and conditions of the Plan, a
copy of which is attached hereto and made a part hereof, and this Agreement,
the Company hereby grants to Participant an option to purchase from the
Company all or any part of an aggregate number of ____________ shares of
Stock (hereinafter such shares of Stock are referred to as the "Optioned
Shares", and the option to purchase the Optioned Shares is referred to as the
"Option"). The Option is not intended to qualify as an "Incentive Stock
Option" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
2. PRICE. The price to be paid for the Optioned Shares shall be
_________ ($_____) per share, which represents not less than one hundred
percent (100%) of the Fair Market Value of the Optioned Shares on the Grant
Date. The term Fair Market Value shall have the meaning assigned to such
term in the Plan.
3. TERM; EXERCISE. Subject to the terms and conditions of the
Plan and this Agreement, the Option may be exercised by the Participant while
in the employ of the
Company or its subsidiaries, in whole or in part, from time to time, during
the period beginning on the date of this Agreement and ending on ___________
[Five Years] (the "Expiration Date").
4. METHOD OF EXERCISE.
(a) The Option may be exercised only by written notice, delivered or
mailed by postpaid registered or certified mail, addressed to the treasurer
of the Company at the Company's principal executive offices specifying the
number of Optioned Shares being purchased. Such notice shall be
accompanied by payment of the entire Option price of the Optioned Shares
being purchased: (i) in cash or its equivalent; (ii) with the consent of
the Committee, by tendering previously acquired shares of Stock valued at
their Fair Market Value at the time of exercise; or (iii) with the consent
of the Committee, by any combination of (i) and (ii). On and after the
effective date of an IPO (as defined below) of the Stock, the Option may be
exercised in the manner previously described or by delivery to the Company
or its designated agent of an executed irrevocable exercise form together
with instructions to a broker-dealer to sell or margin a sufficient portion
of the shares being exercised and deliver the sale or margin proceeds
directly to the Company to pay for the Option price. As used herein, "IPO"
means the event that occurs when shares of Stock are sold to the public
pursuant to an effective registration statement, other than a registration
statement on Form S-4 or Form S-8 or any other forms primarily used to
register securities to be issued pursuant to Company benefit plans, filed
by the Company under the Securities Act of 1933 (the "Securities Act").
For purposes of this paragraph, Fair Market Value shall be determined in
the same manner as the Fair Market Value of the Stock on the Grant Date was
determined pursuant to paragraph 2 hereof.
(b) Shares of Stock tendered shall be duly endorsed in blank or
accompanied by stock powers duly endorsed in blank. Upon receipt of the
payment of the entire purchase price of the Optioned Shares so purchased,
certificates for such Optioned Shares shall be issued to the Participant.
The Optioned Shares so purchased shall be fully paid and nonassessable.
5. TERMINATION OF EMPLOYMENT.
(a) Except as otherwise provided by the Committee, if the Participant
ceases to be an employee of the Company or its subsidiaries for any reason
other than death, disability or cause (as defined below), then the
Participant may exercise the Option for a period of thirty (30) days after
such termination of employment, but in no event beyond the Expiration Date.
(b) If the Participant ceases to be an employee of the Company or its
subsidiaries by reason of death or disability (as defined in Section
22(e)(3) of the Code), then the Participant (or the Participant's
beneficiary or estate in the event of the Participant's death) may exercise
the Option for a period of ninety (90) days following the date of death or
disability, but in no event beyond the Expiration Date.
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(c) If the Participant's employment with the Company or its
subsidiaries is terminated for cause (as defined below), the Option shall
be immediately forfeited and automatically cancelled. As used herein,
"cause" shall mean (i) conviction of a felony, (ii) commission by the
Participant of an act of fraud, misappropriation or embezzlement or (iii)
any other act or omission to act by the Participant if, in the judgment of
the Committee (A) the Participant knew or should have known that such an
act or omission would cause material injury to the financial condition or
reputation of the Company or its subsidiaries, and (B) such material injury
has occurred or is likely to occur, all as determined by the Committee.
6. NO RIGHTS AS A SHAREHOLDER. The Participant shall not be
deemed for any purposes to be a shareholder of the Company with respect to
any shares which may be acquired hereunder except to the extent that the
Option shall have been exercised with respect thereto and a stock certificate
issued therefor.
7. NONTRANSFERABILITY; COLLATERAL. Unless permitted by the
Committee, the Option shall not be transferable by the Participant otherwise
than by will or the laws of descent and distribution, and may be exercised
during the life of the Participant only by the Participant. The Option may
not be assigned, mortgaged or pledged as any type of security or collateral.
8. RESTRICTIONS ON TRANSFERS OF STOCK. It shall be a condition
of the obligation of the Company to issue or transfer shares of Stock upon
exercise of the Option, that the Participant (or his representatives or
legatees) (a) execute and deliver to the Company such investment
representations and warranties, and to take such other actions, as counsel
for the Company determines may be necessary or appropriate for compliance
with the Securities Act and any applicable securities laws; and (b) execute a
restrictive stock transfer agreement in the form provided by the Company if
so demanded by the Committee and agree that the shares received upon exercise
of the Option will be subject to certain restrictions on sale or transfer as
necessary to comply with applicable state and federal securities laws, as
determined by the Committee. The Participant agrees that any certificate
representing shares acquired upon exercise of the Option may bear a legend to
such effect. If the Participant (or his representatives or legatees) fails
to comply with this paragraph 8, the Company may refuse to issue or transfer
shares of Stock upon exercise of the Option.
9. ADJUSTMENTS. If the Company shall at any time change the number
of shares of its Stock without new consideration to the Company (such as by
stock dividend, stock split or similar transaction), the total number of shares
then remaining subject to purchase hereunder shall be changed in proportion to
the change in issued shares, and the Option price per share shall be adjusted so
that the total consideration payable to the Company upon the purchase of all
shares not theretofore purchased shall not be changed. In the event there shall
be any change, other than as specified above, in the number or kind of
outstanding shares of Stock or of any stock or other securities into which such
Stock shall have been changed or for which it shall have been exchanged, then if
the Committee shall in its sole discretion determine that such change equitably
requires an adjustment in the number or kind of shares subject to the Option,
such adjustment shall be made by the Committee. The Option
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price for each share of Stock or other securities substituted or adjusted as
provided in this paragraph shall be determined by dividing the Option price
for each share prior to such substitution or adjustment by the number of
shares or the fraction of a share substituted for such share or to which such
share shall have been adjusted. No adjustment or substitution provided for
in this paragraph shall require the Company to sell a fractional share.
10. TAX WITHHOLDING. It shall be a condition of the obligation of
the Company to issue or transfer shares of Stock upon exercise of the Option,
that the Participant shall pay to the Company upon its demand, or agree that
the Company may withhold from compensation due the Participant, such amount
as may be requested by the Company for the purpose of satisfying its
liability to withhold federal, state or local income or other taxes incurred
by reason of the exercise of the Option. If the Participant fails to comply
with this paragraph 10, the Company may refuse to issue or transfer shares of
Stock upon exercise of the Option.
11. POWERS OF COMPANY NOT AFFECTED. The existence of the Option
herein granted shall not affect in any way the right or power of the Company
or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issuance of bonds, debentures, preferred, or prior preference stock ahead
of or affecting the Stock or the rights thereof, or dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
12. INTERPRETATION. As a condition of the granting of the Option,
the Participant agrees for himself and his legal representatives, that any
dispute or disagreement which may arise under or as a result of or pursuant
to this Agreement shall be determined by the Committee in its sole
discretion, and any interpretation by the Committee of the terms of this
Agreement shall be final, binding and conclusive.
13. AMENDMENT OR MODIFICATION. No term or provision of this
Agreement may be amended, modified or supplemented orally, but only by an
instrument in writing signed by the party against whom or which the
enforcement of the amendment, modification or supplement is sought.
14. GOVERNING LAW. This Agreement shall be governed by the
internal laws of the State of Delaware as to all matters, including, but not
limited to, matters of validity, construction, effect, performance and
remedies.
15. TERMS OF PLAN GOVERN. All parties acknowledge that this
Option is granted under and pursuant to the Plan, which shall govern all
rights, interests, obligations and undertakings of both the Company and the
Participant. All capitalized terms not otherwise defined herein shall have
the meanings assigned to such terms in the Plan.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer and the Participant has executed this
Agreement as of the day and year first above written.
U.S. LABORATORIES INC.
(the "Company")
By:
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PARTICIPANT:
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