EXHIBIT 10.2
NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of <> (the "Effective Date"), by
and between Xxxxxx Medical Group, Inc., a Delaware corporation formerly known as
Xxxxxx Acquisition Holdings, Inc. (the "Company"), and <> (the
"Participant").
WITNESSETH:
WHEREAS, the Participant currently serves as a member of the Company's
Board of Directors (the "Board"); and
WHEREAS, the Company desires to afford the Participant the opportunity to
acquire ownership of the Company's common stock, par value $.01 per share
("Common Stock"), so that (s)he may have a direct proprietary interest in the
Company's success.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereby agree as follows:
1. Grant of Options. Subject to the terms and conditions set forth herein
and in the Third Amended and Restated Xxxxxx Medical Group, Inc. 1999 Equity
Incentive Plan, a copy of which is attached hereto as Exhibit A (the "Plan"), on
the Effective Date the Company does hereby grant to the Participant, during the
period commencing on the Effective Date and ending on the 10th anniversary of
the Effective Date (the "Expiration Date"), the right and option (the right to
purchase any one share under this Agreement being an "Option") to purchase from
the Company <> shares of Common Stock. The Option to purchase such
Common Stock shall have an exercise price of $<> per share (the
Fair Market Value of one share of Common Stock on the date hereof). The Options
granted pursuant to this Agreement shall constitute Nonqualified Stock Options
under the Plan.
2. Limitations on Exercise of Options.
(a) Subject to the terms and conditions set forth herein and in the
Plan, the Options shall vest and become exercisable, on a cumulative basis, with
respect to 25% of the shares on the first anniversary of the Effective Date and
on each succeeding anniversary thereafter so long as the Participant is a member
of the Board (a "Director"); provided, however, upon the occurrence of a Change
of Control, as defined below, all of the then unvested Options shall
automatically vest and be fully exercisable and shall remain so exercisable in
accordance with the terms of this Agreement. The Committee or the Board may
accelerate the vesting and exercisability of any or all of the then-unvested
Options at any time.
(b) For the purposes of this Agreement, the term "Change in Control"
means the first to occur on or after the Effective Date of any of the following:
(i) the acquisition by any person or persons acting as a group
("Person") of capital stock of the Company which, when added to any
capital stock of the Company already owned by the Person,
constitutes more than fifty percent (50%) of either (i) the total
fair market value of the outstanding capital stock of the Company,
or (ii) the total voting power of the outstanding capital stock of
the Company; provided, however, that a Change in Control will not be
deemed to have occurred when any Person who owns more than fifty
percent (50%) of the total fair market value or the total voting
power of the outstanding capital stock of the Company as of the date
of this Agreement acquires any additional capital stock of the
Company; and provided further, that an increase in the percentage of
the outstanding capital stock of the Company owned by a Person as a
result of a transaction in which the Company acquires its capital
stock in exchange for property will be treated as an acquisition of
such capital stock by such Person; or
(ii) the acquisition by a Person, in a single transaction or a
series of transactions within a twelve (12) month period, of capital
stock of the Company representing not less than thirty-five percent
(35%) of the total voting power of the outstanding capital stock of
the Company; or
(iii) the acquisition by a Person, in a single transaction or a
series of transactions within a twelve (12) month period, of
consolidated assets of the Company which have a total gross fair
market value of not less than forty percent (40%) of the total gross
fair market value of all of the consolidated assets of the Company
immediately prior to such acquisition(s), in each case without
regard to any liabilities associated with such assets; provided,
however, that a Change in Control will not be deemed to have
occurred when such assets are acquired by:
(1) an entity of which the Company owns, directly or
indirectly, fifty percent (50%) or more of the total fair market
value or the total voting power of the outstanding capital stock;
(2) a Person which owns, directly or indirectly, fifty percent
(50%) or more of the total fair market value or the total voting
power of the outstanding capital stock of the Company;
(3) an entity of which a Person described in clause (ii) owns,
directly or indirectly, fifty percent (50%) or more of the total
fair market value or the total voting power of the outstanding
capital stock;
(4) an entity which is controlled by the stockholders of the
Company immediately after the transfer; or
(5) a stockholder of the Company in exchange for or with
respect to capital stock of the Company; or
(iv) a majority of the members of the Board is replaced in any
twelve (12) month period by directors whose appointment or election
is not endorsed by a
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majority of the members of the Board prior to the date of the
appointment or election.
In making a determination as to whether a Change in Control has occurred, the
foregoing definition shall be construed and applied in a manner which would
avoid the imposition of federal income tax on the Participant by operation of
Section 409A of the Code, if applicable.
3. Non-Transferable. Except as specifically authorized by the Committee,
the Participant may not transfer the Options except by will or the laws of
descent and distribution and the Options shall be exercisable during the
Participant's lifetime only by the Participant or, in the event of his
incapacity, his guardian or legal representative. Except as so authorized, no
purported assignment or transfer of the Options, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or otherwise
(except by will or the laws of descent and distribution), shall vest in the
assignee or transferee any interest or right herein whatsoever.
4. Termination of Status as a Director.
(a) Disability or Consent. If, prior to the Expiration Date, the
Participant shall cease to be a Director by reason of a Disability, as defined
in the Plan, or the Participant's status as a Director shall terminate with the
written consent of the Committee, then the Options shall remain exercisable
until the earlier of the Expiration Date or the date that is [thirty (30)] days
after the date of such termination as a Director, but only to the extent the
Options were vested and exercisable at the time of such termination.
(b) Without Cause. If the Participant's status as a Director shall be
terminated by the Company without Cause, as defined in the Plan, then the
Options shall remain exercisable until the earlier of the Expiration Date or the
date that is three (3) months after the date of such termination as a Director,
but only to the extent the Options were vested and exercisable at the time of
such termination.
(c) Voluntary; for Cause Termination. If the Participant voluntarily
terminates his services as a Director for reasons other than Disability and
without the written consent of the Committee or the Participant's status as a
Director is terminated for Cause, then all of the Options, to the extent not
exercised prior to such termination, whether exercisable or not, shall lapse and
be canceled immediately upon the Participant's ceasing to be a Director.
(d) Death. If the Participant shall cease to be a Director prior to the
Expiration Date by reason of death, or if the Participant dies within the three
(3) month period following cessation of services as a Director while entitled to
exercise any of the Options pursuant to Section 4(a) or 4(b), the executor or
administrator of the estate of the Participant or the person or persons to whom
the Options shall have been validly transferred by the executor or administrator
pursuant to a will or the laws of descent and distribution shall have the right,
until the earlier of the Expiration Date or [one (1) year] after the date of
death, to exercise the Options, but only to the extent that the Participant was
entitled to exercise them on the date of death and subject to any other
limitation contained herein on the exercise of the Options in effect on the date
of exercise.
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(e) Whether the Participant's status as a Director has been or could have
been terminated for the purposes of this Agreement, and the reasons therefor,
shall be determined by the Committee, whose determination shall be final,
binding and conclusive.
(f) Options that have not yet vested at the time of termination of the
Participant's status as a Director shall expire, and no further vesting shall
occur with respect thereto. After the expiration of any exercise period
described in this Section 4, the Options shall terminate together with all of
the Participant's rights hereunder, to the extent not previously exercised.
5. Adjustments and Corporate Reorganizations. In accordance with and
subject to the applicable terms of the Plan, the Options shall be subject to
adjustment or substitution, as determined by the Committee, as to the number,
price or kind of Stock or other consideration subject to such Options or as
otherwise determined by the Committee to be equitable (i) in the event of
changes in the outstanding Stock or in the capital structure of the Company by
reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the date
hereof or (ii) in the event of any change in applicable laws or any change in
circumstances which results in or would result in any substantial dilution or
enlargement of the rights granted to, or available for, the Participant. No such
adjustment shall be made which would result in an increase in the amount of gain
or a decrease in the amount of loss inherent in the Options. The Company shall
give the Participant written notice of an adjustment hereunder. Notwithstanding
anything herein to the contrary, in the event of any of the following:
(a) The Company is merged or consolidated with another corporation or
entity and, in connection therewith, consideration is received by shareholders
of the Company in a form other than stock or other equity interests of the
surviving entity;
(b) All or substantially all of the assets of the Company are acquired by
another person;
(c) The Company's reorganization or liquidation; or
(d) The Company shall enter into a written agreement to undergo an event
described in clauses (a), (b) or (c) above,
then the Committee may, in its discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Options and pay to the
Participant, in cash, the value of such Options based upon the price per share
of Stock received or to be received by other shareholders of the Company in such
event and the per share exercise price of the Options.
6. Exercise: Payment For and Delivery of Common Stock. The Options shall
be exercised by delivering written notice to the Committee stating the number of
shares of Common Stock to be purchased, the person or persons in whose name the
shares of Common Stock are to be registered and each such person's address and
social security number. Such notice shall not be effective unless accompanied by
the full purchase price for all shares to be purchased, and any applicable
withholding (as described below). The purchase price shall be payable in cash,
in shares of Common Stock, any combination of cash or shares of Common Stock or
any other
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method authorized by the Plan and consented to by the Committee; provided,
however, that the Participant may use Common Stock in payment of the exercise
price only if the shares so used are considered "mature" for purposes of
generally accepted accounting principles (i.e., (i) been held by the Participant
free and clear for at least six (6) months prior to the use thereof to pay part
of an Option exercise price, (ii) been purchased by the Participant in other
than a compensatory transaction, or (iii) meet any other requirements for
"mature" shares as may exist on the date of the use thereof to pay part of an
Option exercise price). In the event that all or part of the purchase price is
paid in shares of Common Stock, the shares used in payment shall be valued at
their Fair Market Value on the date of exercise of the Options. At the time of
exercise, the Participant shall pay to the Company, in cash, or by having the
Company withhold upon exercise of the Option a sufficient number of shares of
Common Stock otherwise deliverable to the Participant based on the Fair Market
Value of the Common Stock on the date of exercise, at the election of the
Participant, such minimum amount as the Company deems necessary to satisfy its
obligation to withhold Federal, state or local income or other taxes incurred by
reason of the exercise or the transfer of shares thereupon. Payment in currency
or by certified or cashier's check shall be considered payment in cash.
7. Issuance of Shares. As promptly as practical after receipt of such
written notification and full payment of such aggregate exercise price for the
Options and any required tax withholding amount has been satisfied, the Company
shall issue or transfer to the Participant the number of shares with respect to
which Options have been so exercised, and shall deliver to the Participant a
certificate or certificates therefor, registered in the Participant's name.
8. Rights as Stockholder. The Participant or a transferee of the Options
shall have no rights as a stockholder with respect to any shares covered by the
Options until he shall have become the holder of record of such shares (and the
Company shall use its reasonable best efforts to cause the Participant promptly
to become the holder of record of such shares), and, except as provided in
Section 5 hereof, no adjustment shall be made for dividends or distributions or
other rights in respect of such shares for which the record date is prior to the
date upon which he shall become the holder or record thereof.
9. Company; Participant.
(a) Except with respect to Section 2 and as otherwise indicated by the
context, the term "Company" as used in this Agreement shall include the Company
and its Related Entities.
(b) Whenever the word "Participant" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the executors, the administrators, legal representatives, the person
or persons to whom the Options may be transferred by will or by the laws of
descent and distribution or any other transferee to whom the Options may be
transferred with the consent of the Committee, the word "Participant" shall be
deemed to include such person or persons.
10. Requirements of Law.
(a) By accepting the Options, the Participant represents and agrees for
himself and his transferees (whether by will or the laws of descent and
distribution) that, unless a registration
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statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to shares purchased upon any exercise of the Options, (i) any and all shares
so purchased shall be acquired for his personal account and not with a view to
or for sale in connection with any distribution, and (ii) each notice of the
exercise of any portion of this Option shall be accompanied by a representation
and warranty in writing, signed by the person entitled to exercise the same,
that the shares are being so acquired in good faith for his personal account and
not with a view to or for sale in connection with any distribution.
(b) No certificate or certificates for shares of Common Stock may be
purchased, issued or transferred if the exercise hereof or the issuance or
transfer of such shares shall constitute a violation by the Company or the
Participant of any (i) provision of any Federal, state or other securities law,
(ii) requirement of any securities exchange listing agreement to which the
Company may be a party, or (iii) other requirement of law or of any regulatory
body having jurisdiction over the Company. Any reasonable determination in this
connection by the Board, upon notice given to the Participant, shall be final,
binding and conclusive.
(c) The certificates representing shares of Common Stock acquired pursuant
to the exercise of Options shall carry such appropriate legend, and such written
instructions shall be given to the Company's transfer agent, as may be deemed
necessary or advisable by counsel to the Company in order to comply with the
requirements of the Act or any state securities laws.
11. Notices. Any notice to be given to either party shall be in writing
and shall be given by hand delivery to such party or by registered or certified
mail, return receipt requested, postage prepaid, addressed to the Company in
care of its Secretary at its principal office, and to the Participant at the
address given beneath his signature hereto, or at such other address as either
party shall have furnished to the other in writing in accordance herewith.
Notice and communications shall be effective when actually received by the
addressee.
12. Binding Effect. This Agreement shall be binding upon the heirs,
executors, administrators, successors and permitted assigns of the parties
hereto.
13. The Plan. The terms and provisions of the Plan are incorporated herein
by reference and made a part hereof as though fully set forth herein. In the
event of any conflict or inconsistency between discretionary terms and
provisions of this Agreement, this Agreement shall govern and control. In all
other instances of conflicts or inconsistencies or omissions, the terms and
provisions of the Plan shall govern and control. All capitalized terms not
otherwise expressly defined in this Agreement shall have the meaning ascribed to
them in the Plan.
14. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Tennessee, without regard to the
principles of conflicts of law thereof.
15. Entire Agreement. This Agreement, together with the Plan, contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior agreements, written or oral, with
respect thereto.
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IN WITNESS WHEREOF, the Company has granted this Option on the date of
grant specified above. This instrument may be executed in any number of
counterparts, each of which shall be deemed to be an original, and such
counterparts together shall constitute one and the same instrument.
XXXXXX MEDICAL GROUP, INC
By: ____________________________________
Xxxxx X. Xxxx
Vice President, General Counsel, and
Secretary
ACCEPTED:
_______________________________
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