NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of March 16, 1998 by and between National
Quality Care, Inc., a Delaware corporation (the "Company"), and Xxxx Xxxxxx
("Optionee").
R E C I T A L
The Board of Directors of the Company (the "Board of Directors") has
authorized the granting to Optionee, for services previously rendered by
Optionee as an employee of the Company, of a non-qualified stock option to
purchase the number of shares of Common Stock of the Company specified in
Paragraph 1 hereof, at the price specified therein, such option to be for the
term and upon the terms and conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. Pursuant to said action of the Board
of Directors, the Company hereby grants to Optionee, in consideration of
employment services performed for the benefit of the Company, the option
("Option") to purchase up to 15,000 shares ("Option Shares") of Common Stock of
the Company, at the exercise price of $0.81 per share. This Option shall
constitute all securities to which Optionee shall be entitled to be issued by
the Company as of the date hereof.
2. TERM. This Option shall expire one (1) year from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. The 15,000 Options shall vest and be
immediately exercisable, and shall thereafter remain subject to exercise for the
term specified in Paragraph 2 hereof.
4. METHOD AND TIME OF EXERCISE. The Option may be exercised by written
notice delivered to the Company stating the number of shares with respect to
which the Option is being exercised, together with a check made payable to the
Company in the amount of the purchase price of such shares plus the amount of
applicable federal, state and local withholding taxes, and the written statement
provided for in Paragraph 10 hereof, if required by such Paragraph 10. Not less
than 100 shares may be purchased at any one
time unless the number purchased is the total number purchasable under such
Option at the time. Only whole shares may be purchased.
5. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require the Optionee to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the exercise of this Option. At the discretion of the Company and
upon the request of the Optionee, the minimum statutory withholding tax
requirements may be satisfied by the withholding of shares of Common Stock
otherwise issuable to the Optionee upon the exercise of this Option.
6. EXERCISE ON TERMINATION OF EMPLOYMENT. This Option shall not
terminate as a result of the termination of Optionee's services as an employee
of the Company.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except, if applicable, by will or by the laws of descent and distribution, and
may be exercised only by Optionee during Optionee's lifetime and after
Optionee's death, by Optionee's representative or by the person entitled thereto
under Optionee's will or the laws of intestate succession.
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by the
Option until the date of issuance of a stock certificate or stock certificates
to him upon exercise of the Option. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock
certificate or certificates are issued.
9. NO RIGHT TO PERFORM SERVICES. Nothing in this Option shall confer
upon the Optionee any right to perform services for the Company, or shall
interfere with or restrict in any way the rights of the Company to discharge or
terminate Optionee as an employee, independent contractor or consultant at any
time for any reason whatsoever, with or without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that,
upon Optionee's exercise of the Option in whole or part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the shares issued to him, he will acquire the shares issuable upon
exercise of this Option for the purpose of investment and not with a view to
their resale or further distribution, and that upon each exercise thereof
Optionee will furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. Optionee agrees that any
certificates issued upon exercise of this Option may bear a legend indicating
that their transferability is restricted in accordance with applicable state or
federal securities law. Any person or persons entitled to exercise this
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Option under the provisions of Paragraphs 5 and 6 hereof shall, upon each
exercise of the Option under circumstances in which Optionee would be
required to furnish such a written statement, also furnish to the Company a
written statement to the same effect, satisfactory to the Company in form and
substance.
11. REGISTRATION. On or before thirty (30) days after the date of this
Agreement, the Company shall, at the Company's expense, use its best efforts
to file with the Securities and Exchange Commission ("SEC") and maintain
effective during the term of this Option, a registration statement
("Registration Statement") on Form S-8 or other comparable form, in such form
as to comply with applicable federal and state laws for the purpose of
registering or qualifying the Option Shares for resale by Optionee, and
prepare and file with the appropriate state securities regulatory authorities
the documents reasonably necessary to register or qualify such securities,
subject to the ability of the Company to register or qualify such securities
under applicable state laws.
12. NOTICES. All notices to the Company shall be addressed to the Company
at the principal office of the Company at 0000 Xxxxx Xx Xxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Telecopier No. (000) 000-0000, and all
notices to Optionee shall be addressed to Optionee at the address and telecopier
number of Optionee on file with the Company, or to such other address and
telecopier number as either may designate to the other in writing. A notice
shall be deemed to be duly given if and when enclosed in a properly addressed
sealed envelope deposited, postage prepaid, with the United States Postal
Service and followed by telecopier to the addressee. In lieu of giving notice
by mail as aforesaid, written notices under this Agreement may be given by
personal delivery to Optionee or to the Company (as the case may be).
13. ADJUSTMENTS. If there is any change in the capitalization of the
Company affecting in any manner the number or kind of outstanding shares of
Common Stock of the Company, whether by stock dividend, stock split,
reclassification or recapitalization of such stock, or because the Company has
merged or consolidated with one or more other corporations (and provided the
Option does not thereby terminate pursuant to Section 2 hereof), then the number
and kind of shares then subject to the Option and the price to be paid therefor
shall be appropriately adjusted by the Board of Directors; PROVIDED, HOWEVER,
that in no event shall any such adjustment result in the Company's being
required to sell or issue any fractional shares. Any such adjustment shall be
made without change in the aggregate purchase price applicable to the
unexercised portion of the Option, but with an appropriate adjustment to the
price of each Share or other unit of security covered by this Option.
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14. CESSATION OF CORPORATE EXISTENCE. Notwithstanding any other
provision of this Option, upon the dissolution or liquidation of the Company,
the reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving
corporation, or the sale of substantially all the assets of the Company or of
more than 50% of the then outstanding stock of the Company to another
corporation or other entity, the Option granted hereunder shall terminate;
provided, however, that: (i) each Option for which no option has been
tendered by the surviving corporation in accordance with all of the terms of
provision (ii) immediately below shall, within five days before the effective
date of such dissolution or liquidation, merger or consolidation or sale of
assets in which the Company is not the surviving corporation or sale of
stock, become fully exercisable; or (ii) in its sole and absolute discretion,
the surviving corporation may, but shall not be so obligated to, tender to
any Optionee, an option to purchase shares of the surviving corporation, and
such new option or options shall contain such terms and provisions as shall
be required substantially to preserve the rights and benefits of this Option.
15. INVALID PROVISIONS. In the event that any provision of this Agreement
is found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision were not contained herein.
16. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
17. COUNTERPARTS. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties hereto and
delivered to the other.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
NATIONAL QUALITY CARE, INC.
("Company")
By: /s/ Xxxxxx Xxxx, M.D.
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Xxxxxx Xxxx, M.D.
Chief Executive Officer
Social Security Number
or Employer Identification
Number: ("Optionee")
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Address:
Xxxx Xxxxxx
_______________________________
_______________________________
_______________________________
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Telecopier No. ( ) -
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