_________________
HANGER ORTHOPEDIC
GROUP, INC.
(Exact Name of
Registrant as Specified in Charter)
| Delaware | 1-10670 | 84-0904275 |
| (State or Other Jurisdiction of | (Commission File Number) | (I.R.S. Employer |
| Incorporation) | Identification No.) |
| Two Bethesda Metro Center, Suite 1200, Bethesda, MD | 20814 |
| (Address of Principal Executive Office) | (Zip Code) |
Registrant’s telephone number, including area code: (301) 986-0701
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [__] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [__] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [__] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [__] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
The Registrant currently has an effective 2002 Stock Incentive Plan. Under this plan, the Registrant may grant restricted stock and stock options (both incentive and nonqualified) to executives and certain key non-executive employees. The Registrant has granted awards under this plan in the past and anticipates granting, from time to time, restricted stock and stock option awards in the future. The forms of stock option and restricted stock agreements to be entered into by award recipients are attached as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K.
(c) Exhibits.
The following exhibit are filed herewith:
| Exhibit 10.1 – Form of Stock Option Agreement (Non-Executive Employees). |
| Exhibit 10.2 – Form of Stock Option Agreement (Executive Employees). |
| Exhibit 10.3 – Form of Restricted Stock Agreement (Non-Executive Employees). |
| Exhibit 10.4 – Form of Restricted Stock Agreement (Executive Employees). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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HANGER ORTHOPEDIC GROUP, INC.
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| _______________________________________ | |
| Date: February ___, 2005 | Brian Wheeler |
| Vice President - Human Resources |
Exhibit 10.1
HANGER ORTHOPEDIC GROUP, INC.
Non-Qualified Stock Option Agreement
THIS AGREEMENT is made as of _________, 2005, by and between HANGER ORTHOPEDIC GROUP, INC., a Delaware corporation (the "Company"), and ______________ (the "Optionee").
W I T N E S S E T H :
WHEREAS, the Company desires to grant to Optionee a non-qualified stock option under the Company’s 2002 Stock Option Plan to purchase _______ shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), in consideration for Optionee’s service to the Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as follows:
1. Grant of Option . Subject to the terms and conditions of this Agreement, the Company hereby grants to Optionee the right and option to purchase from the Company all or part of an aggregate of _______ shares of Common Stock. This option is not intended to constitute an incentive stock option within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the “Code”).
2. Option Price and Time of Exercise . The per-share purchase price at which the shares subject to option hereunder may be purchased by Optionee pursuant to the exercise of this option shall be $____, which price equals the closing sale price per share of the Common Stock on the New York Stock Exchange on ________, 2005, the date prior to the grant date of this option. Optionee’s right to exercise this option shall vest as to 25% of the shares of Common Stock underlying the option at the end of each of the first four years following the grant date. The right to exercise the option shall be cumulative to the extent not theretofore exercised. The right to exercise the option shall in all events expire, except as provided in Paragraph 5 below, after the day preceding the tenth anniversary hereof (the “Grant Expiration Date”).
3. Method of Exercise and Payment for Shares . This option shall be exercised by written notice directed to the Company or it’s designated representative at its principal office, specifying the number of shares to be acquired upon such exercise and indicating whether the exercise is being paid for (i) in cash, (ii) in shares of Common Stock already owned by Optionee and valued at their fair market value on the date of exercise of the option, or (iii) by a combination of (i) and/or (ii) above. The grant price shall be delivered to the Company together with such written notice of exercise by the Optionee.
4. Non-transferability . This option is not transferable by Optionee except as otherwise provided in Paragraph 5 below, and during Optionee’s lifetime is exercisable only by Optionee.
5. Exercise After Death or Termination of Service to the Company . In the event Optionee dies before the expiration of this option, Optionee’s estate, or the person or persons to whom his rights under this option shall pass by will or the laws of descent and distribution, may exercise this option, to the extent exercisable at the date of death, at any time within ninety (90) days following Optionee’s death (but in any event before the Grant Expiration Date). In the event that the Optionee becomes permanently and totally disabled (as determined under the terms of the Company’s long term disability plan), the Optionee may exercise this option, to the extent exercisable on the date of such determination, at any time within ninety (90) days following this determination (but in any event before the Grant Expiration Date). In the event Optionee ceases to be employed by the Company or a subsidiary of the Company by reason of termination of employment other than for cause or other than for the voluntary termination of employment by Optionee, before the Grant Expiration Date, the Optionee may exercise this option, to the extent exercisable on the date of such termination of employment, at any time within thirty (30) days following the date of such termination of employment (but in any event before the Grant Expiration Date). If Optionee’s employment is otherwise terminated for cause or the voluntary termination of employment by Optionee, this option shall immediately terminate on the date of such termination of employment.
6. Adjustments .
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(a) Adjustments by Stock Split, Stock Dividend, Etc . If the Company shall at any time increase or decrease the number of its outstanding shares of Common Stock, or change in any way the rights and privileges of such shares, by means of the payment of a Common Stock dividend or the making of any other distribution upon such shares payable in Common Stock, or through a Common Stock split or subdivision of shares, or a consolidation or combination of shares, or through a reclassification or recapitalization involving the Common Stock, then the numbers, rights and privileges of the shares of Common Stock underlying the option granted hereunder shall be increased, decreased or changed in like manner as if they had been issued and outstanding, fully paid and nonassessable at the time of such occurrence. |
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(b) Apportionment of Price . Upon any occurrence described in the preceding subsection (a) of this Section 6, the total option price hereunder shall remain unchanged but shall be apportioned ratably over the increased or decreased number or changed kinds of securities or other property subject to this option. |
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(c) Rights to Subscribe . If the Company shall at any time grant to the holders of its Common Stock rights to subscribe pro rata for additional shares thereof or for any other securities of the Company or of any other corporation, there shall be added to the number of shares underlying this option the Common Stock or other securities which the Optionee would have been entitled to subscribe for if immediately prior to such grant the Optionee had exercised his entire option, and the option price shall be increased by the amount which would have been payable by the Optionee for such Common Stock or other securities. |
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(d) Determination by the Company . Adjustments under this Section 6 shall be made by the Company, whose determinations with regard thereto shall be final and binding. No fractional shares of Common Stock shall be issued on account of any such adjustment. |
7. Merger or Consolidation .
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(a) Effect of Transaction . Upon the occurrence of any of the following events, if the notice required by Section 7(b) hereof shall have first been given, the option granted hereunder shall automatically terminate and be of no further force and effect whatsoever, without the necessity for any additional notice or other action by the Company: (i) the merger, consolidation or liquidation of the Company or the acquisition of its assets or stock pursuant to a nontaxable reorganization, unless the surviving or acquiring corporation, as the case may be, shall assume all outstanding options of the Company or substitute new options for them pursuant to Section 425(a) of the Code; (ii) the dissolution or liquidation of the Company; (iii) the appointment of a receiver for all or substantially all of the Company’s assets or business; (iv) the appointment of a trustee for the Company after a petition has been filed for the Company’s reorganization under applicable statutes; or (v) the sale, lease or exchange of all or substantially all of the Company’s assets and business. |
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(b) Notice of Such Occurrences . At least 30 days’ prior written notice of any event described in Section 7(a) hereof, except the transactions described in subsections 7(a)(iii) and (iv) as to which no notice shall be required, shall be given by the Company to Optionee. If Optionee is so notified, he may exercise all or a portion of the vested but previously unexercised portion of this option at any time before the occurrence of the event requiring the giving of notice. Such notice shall be deemed to have been given when delivered personally to Optionee or when mailed to Optionee by registered or certified mail, postage prepaid, at Optionee’s last address known to the Company. |
8. Binding Effect, Entire Agreement . Subject to the limitations stated above, this Agreement shall be binding upon and inure to the benefit of the personal representatives of Optionee and the successors of the Company. This Agreement constitutes the entire agreement between the parties and cannot be altered, modified, or changed in any way unless made in writing and signed by the party against whom such alteration, modification, or change is asserted. This Agreement shall be governed by the laws of the State of Delaware.
All of the terms and conditions of this Agreement are hereby confirmed, ratified, approved and accepted by the Company and by the Optionee, who has set his hand hereto by his electronic submission of this Agreement.
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Exhibit 10.2
HANGER ORTHOPEDIC GROUP, INC.
Executive Non-Qualified Stock Option Agreement
THIS AGREEMENT is made as of ____________, by and between HANGER ORTHOPEDIC GROUP, INC., a Delaware corporation (the "Company"), and _____________________ (the "Optionee").
WHEREAS, the Company desires to grant to Optionee a non-qualified stock option under the Company’s 2002 Stock Option Plan to purchase _________ shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), in consideration for the Optionee’s service to the Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as follows:
1. Grant of Option . Subject to the terms and conditions of this Agreement, the Company hereby grants to Optionee the right and option to purchase from the Company all or part of an aggregate of _________ shares of Common Stock. This option is not intended to constitute an incentive stock option within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the “Code”).
2. Option Price and Time of Exercise . The per-share purchase price at which the shares subject to option hereunder may be purchased by Optionee pursuant to his exercise of this option shall be $_______, which price equals the closing sale price per share of the Common Stock on the New York Stock Exchange on _____________, the date prior to the grant date of this option. The Optionee’s right to exercise this option shall vest as to 25% of the shares of Common Stock underlying the option at the end of each of the first four years following the grant date. The right to exercise the option shall be cumulative to the extent not theretofore exercised. The right to exercise the option shall in all events expire, except as provided in Paragraph 5 below, after the day preceding the tenth anniversary hereof (the “Grant Expiration Date”).
3. Method of Exercise and Payment for Shares . This option shall be exercised by written notice directed to the Company or its designated representative at its principal office, specifying the number of shares to be acquired upon such exercise and indicating whether the exercise is being paid for: (i) in cash; (ii) in shares of Common Stock already owned by the Optionee and valued at their fair market value on the date of exercise of the option; or (iii) by a combination of (i) and/or (ii) above. The grant price shall be delivered to the Company together with such written notice of exercise by the Optionee.
4. Non-transferability . This option is not transferable by Optionee except as otherwise provided in Paragraph 5 below, and during Optionee’s lifetime is exercisable only by him.
5. Exercise After Death or Termination of Service to the Company . In the event Optionee dies before the expiration of this option, Optionee’s estate, or the person or persons to whom his rights under this option shall pass by will or the laws of descent and distribution, may exercise this option, to the extent exercisable at the date of death, at any time within twelve (12) months following Optionee’s death (but in any event before the Grant Expiration Date). In the event Optionee ceases to be employed by the Company or a subsidiary of the Company by reason of termination of employment, or by death or permanent and total disability, other than for cause (as defined by his Employment Agreement with the Company) or the voluntary termination of employment by Optionee, before the Grant Expiration Date, the shares of Common Stock underlying this option, to the extent not previously exercised, shall become fully vested and exercisable, with this option thereafter being exercisable at any time within twelve (12) months immediately following the date of such termination of employment (but in any event before the Grant Expiration Date). If Optionee’s employment is otherwise terminated for cause (as defined by his Employment Agreement with the Company) or the voluntary termination of employment by Optionee, this option shall terminate on the date of such termination of employment.
6. Adjustments .
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(a) Adjustments by Stock Split, Stock Dividend, Etc . If the Company shall at any time increase or decrease the number of its outstanding shares of Common Stock, or change in any way the rights and privileges of such shares, by means of the payment of a Common Stock dividend or the making of any other distribution upon such shares payable in Common Stock, or through a Common Stock split or subdivision of shares, or a consolidation or combination of shares, or through a reclassification or recapitalization involving the Common Stock, then the numbers, rights and privileges of the shares of Common Stock underlying the option granted hereunder shall be increased, decreased or changed in like manner as if they had been issued and outstanding, fully paid and nonassessable at the time of such occurrence. |
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(b) Apportionment of Price . Upon any occurrence described in the preceding subsection (a) of this Section 6, the total option price hereunder shall remain unchanged but shall be apportioned ratably over the increased or decreased number or changed kinds of securities or other property subject to this option. |
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(c) Rights to Subscribe . If the Company shall at any time grant to the holders of its Common Stock rights to subscribe pro rata for additional shares thereof or for any other securities of the Company or of any other corporation, there shall be added to the number of shares underlying this option the Common Stock or other securities which the Optionee would have been entitled to subscribe for if immediately prior to such grant the Optionee had exercised his entire option, and the option price shall be increased by the amount which would have been payable by the Optionee for such Common Stock or other securities. |
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(d) Determination by the Company . Adjustments under this Section 6 shall be made by the Company, whose determinations with regard thereto shall be final and binding. No fractional shares of Common Stock shall be issued on account of any such adjustment. |
7. Merger, Consolidation, Acceleration of Option Vesting .
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(a) Effect of Transaction . Upon the occurrence of any of the following events, if the notice required by Section 7(b) hereof shall have first been given, the option granted hereunder shall automatically terminate and be of no further force and effect whatsoever, without the necessity for any additional notice or other action by the Company: (i) the dissolution or liquidation of the Company; (ii) the appointment of a receiver for all or substantially all of the Company’s assets or business; (iii) the appointment of a trustee for the Company after a petition has been filed for the Company’s reorganization under applicable statutes; or (iv) the sale, lease or exchange of all or substantially all of the Company’s assets and business. |
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(b) Notice of Such Occurrences . At least 30 days’ prior written notice of any event described in Section 7(a) hereof, except the transactions described in subsections 7(a)(ii) and (iii) as to which no notice shall be required, shall be given by the Company to the Optionee. If the Optionee is so notified, he may exercise all or a portion of the entire then vested (as of the date of such notice but without any acceleration) but previously unexercised portion of this option at any time before the occurrence of the event requiring the giving of notice, regardless of whether all conditions of exercise relating to continuation of employment for specified periods of time have been satisfied. Such notice shall be deemed to have been given when delivered personally to the Optionee or when mailed to the Optionee by registered or certified mail, postage prepaid, at the Optionee’s last address known to the Company. |
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(c) Acceleration of Option Vesting . Notwithstanding anything contained in this Agreement to the contrary, all shares of Common Stock underlying this option shall become fully vested in the event of the termination of employment of the Optionee due to his death, permanent and total disability or termination of employment without cause or in the event of a Change in Control, each as defined in his Employment Agreement with the Company. |
8. Binding Effect, Entire Agreement . Subject to the limitations stated above, this Agreement shall be binding upon and inure to the benefit of the personal representatives of Optionee and the successors of the Company. This Agreement constitutes the entire agreement between the parties and cannot be altered, modified, or changed in any way unless made in writing and signed by the party against whom such alteration, modification, or change is asserted. This Agreement shall be governed by the laws of the State of Delaware.
All of the terms and conditions of this Agreement are hereby confirmed, ratified, approved and accepted by the Company and by the Optionee, who has set his hand hereto by his electronic submission of this Agreement.
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Exhibit 10.3
THIS AGREEMENT is made as of _____________, by and between HANGER ORTHOPEDIC GROUP, INC., a Delaware corporation (the “Company”), and [Employee Name] (the “Employee”).
W I T N E S S E T H :
WHEREAS, the Company desires to award to the Employee restricted shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), under the Company’s 2002 Stock Incentive Plan (the “Plan”) in consideration for the Employee’s service to the Company and its subsidiaries.
NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as follows:
1. Award of Restricted Stock . Subject to the terms and conditions of this Agreement and the Plan, the Employee is granted [Number of Shares]shares of Common Stock (hereinafter such shares are referred to as the “Restricted Stock”) as of the date hereof (the “Grant Date”).
2. Value of Restricted Stock . The value of each share of the Restricted Stock shall be equal to $________, which price equals the closing sale price per share of the Common Stock on the New York Stock Exchange on __________, the date prior to the Grant Date of the Restricted Stock.
3. Restricted Stock Non-Assignable and Non-Transferable . Each share of Restricted Stock and all rights under this Agreement shall be non-assignable and non-transferable other than by will or the laws of descent and distribution in accordance with the Plan and may not be sold, pledged, hypothecated, assigned or transferred, except only as to such shares of Restricted Stock, if any, which have vested pursuant to the terms of the Plan and this Agreement. The foregoing prohibition against transfer or assignment, together with the obligation to forfeit the Restricted Stock upon (i) termination of service with the Company and/or its subsidiaries as set forth in Section 4 of this Agreement and/or (ii) a breach by Employee of the confidentiality provisions as set forth in Section 13 of this Agreement, are herein collectively referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of the Restricted Stock.
4. Termination of Employment. In the event of termination of the employment of the Employee with the Company or its subsidiaries by reason of total and permanent disability or death, each of the then unvested shares of Restricted Stock will immediately vest in full as of the date of such total and permanent disability or death. In the event of termination of the employment of the Employee with the Company or its subsidiaries for “Cause” as defined below or in the event of the termination of employment by the Employee, any then unvested shares of Restricted Stock shall be forfeited and cancelled as of the date of such termination of employment. In the event of the termination of the employment of the Employee with the Company or its subsidiaries other than by reason of total and permanent disability or death, termination for Cause, or termination of employment by the Employee, any then unvested shares of Restricted Stock shall be forfeited and cancelled as of the date which is ninety (90) days after such date of termination of service unless such unvested shares of Restricted Stock vest on or before that date which is ninety (90) days after such termination of service. For purposes of this Agreement, the term “Cause” shall mean (i) the repeated failure or refusal of Employee to follow the lawful directives of the Company (except due to sickness, injury or disabilities), (ii) gross inattention to duty or any other willful, reckless or grossly negligent act (or omission to act) by Employee, which, in the good faith judgment of the Company, could result in a material injury to the Company, including the repeated failure to follow the policies and procedures of the Company, (iii) the commission by the Employee of a felony or other crime involving moral turpitude or the commission by the Employee of an act of financial dishonesty against the Company
5. Vesting of Restricted Stock. Subject to Section 4, the shares of Restricted Stock are subject to vesting at the rate of twenty-five percent (25%) of the shares of Restricted Stock on each one (1) year anniversary date of the Grant Date, provided that the Employee has been continuously employed by the Company and/or its subsidiaries from the Grant Date through each such anniversary of the Grant Date.
6. Certificate. A certificate evidencing the Restricted Stock shall be issued by the Company in the name of the Employee, but held in escrow by the Company pursuant to Section 8 of this Agreement, following the execution of this Agreement. In addition to any other legends placed on certificates for shares of Common Stock as determined by the Company, the certificate for the Restricted Stock shall bear the following legends:
| NOTICE IS ALSO HEREBY GIVEN THAT THE SALE, PLEDGE, ASSIGNMENT, HYPOTHECATION, TRANSFER OR DISPOSAL OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED AS SET FORTH IN A RESTRICTED STOCK AGREEMENT, DATED AS OF _____________, BY AND BETWEEN THE ISSUER AND THE REGISTERED OWNER HEREOF, A COPY OF WHICH RESTRICTED STOCK AGREEMENT IS ON FILE AT THE OFFICE OF THE ISSUER, AND ALL OF THE PROVISIONS OF THE RESTRICTED STOCK AGREEMENT ARE FULLY INCORPORATED BY REFERENCE IN THIS CERTIFICATE. APPROPRIATE STOP-TRANSFER INSTRUCTIONS HAVE BEEN GIVEN TO THE TRANSFER AGENT OF THE ISSUER WITH RESPECT TO THE SECURITIES REPRESENTED BY THIS CERTIFICATE. |
With respect to any Restricted Stock as to which the Forfeiture Restrictions have terminated, the Employee shall be entitled to have the Company issue and deliver to the Employee a new certificate for such shares, without the foregoing legend.
7. Withholding of Tax. To the extent that the receipt of the Restricted Stock or the termination of any Forfeiture Restrictions results in income to the Employee for federal or state income tax purposes, the Employee shall deliver to the Company at the time of such receipt of the Restricted Stock or termination of the Forfeiture Restrictions, as the case may be, such amount of money as the Company may require to meet its withholding obligation under applicable tax laws or regulations. If the Employee fails to deliver such funds, the Company is authorized to withhold from any cash remuneration then or thereafter payable to the Employee in an amount equal to the amount of money necessary for the Company to satisfy its tax withholding obligations in relation to the grant of Restricted Stock or termination of Forfeiture Restrictions.
8. Escrow. Upon issuance, the certificates for Restricted Stock shall be deposited in escrow with the Company to be held in accordance with the provisions of this Agreement. Restricted Stock shall be released to the Employee upon the termination of all the Forfeiture Restrictions.
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9. Adjustment . If there shall be any change in the Common Stock through a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, exchange of stock or other change in the corporate structure, appropriate adjustments shall be made in the aggregate number of shares of Restricted Stock in order to reflect such change.
10. Merger, Consolidation or Liquidation . At least thirty (30) days prior written notice of a merger, consolidation or liquidation of the Company shall be given by the Company to the Employee, in which case all unvested shares of Restricted Stock shall become fully vested contemporaneously with the closing of such merger, consolidation or liquidation of the Company.
11. Limitation of Rights .
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(a) No Right to Continue as an Employee . Neither the Plan nor the grant of the Restricted Stock shall constitute or be evidence of any agreement or understanding, express or implied, that the Employee has a right to continue as an employee of the Company or any of its subsidiaries for any period of time, or at any particular rate of compensation. |
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(b) No Stockholder’s Rights as to Restricted Stock . The Employee shall have no rights as a stockholder with respect to unvested shares of Restricted Stock granted hereunder until the date such shares become vested in the Employee, and no adjustment will be made for any dividends or other rights for which the record date is prior to the date of the vesting of such shares of Restricted Stock. |
12. Incorporation by Reference. The terms of the Plan to the extent not stated herein are expressly incorporated herein by reference and in the event of any conflict between this Agreement and the Plan, the terms of the Plan shall govern, control and supercede over the provisions of this Agreement.
13. Confidentiality. The Employee acknowledges that the information, observations, data and trade secrets (collectively, “Confidential Information”) obtained or created by him or her during the course of his or her employment with the Company or its subsidiaries concerning the business or affairs of the Company or any of its subsidiaries or affiliates are the property of the Company. For purposes of this Agreement, “trade secret” means any method, program or compilation of information which is used in the business of the Company or any of its subsidiaries or affiliates, including but not limited to: (a) techniques, plans and materials used by the Company or any of its subsidiaries or affiliates, (b) marketing methods and strategies employed by the Company or any of its subsidiaries or affiliates, and (c) all lists of past, present or prospective patients, customers, suppliers and referral sources of the Company or any of its subsidiaries or affiliates. The Employee agrees that he or she will not disclose to any unauthorized person or entity nor use for his or her own account any of such Confidential Information without the prior written consent of the Chairman or President of the Company, unless and to the extent that the aforementioned matters become generally known to and available for use by the public other than as a result of the Employee’s acts or omissions to act or become known to the Employee lawfully outside the scope of his or her employment with the Company or its subsidiaries. The Employee agrees to deliver to the Company at the termination of his or her employment, or at any other time the Company may request, all memoranda, notes, plans, records, reports and other documents (and copies thereof) relating to the business of the Company or any of its subsidiaries or affiliates which the Employee may then possess or have under his or her control.
All of the terms and conditions of this Agreement are hereby confirmed, ratified, approved and accepted by the Company and by the Optionee, who has set his hand hereto by his electronic submission of this Agreement.
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Exhibit 10.4
THIS AGREEMENT is made as of ___________, by and between HANGER ORTHOPEDIC GROUP, INC., a Delaware corporation (the "Company"), and _______________________ (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company desires to award to the Employee restricted shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), under the Company’s 2002 Stock Incentive Plan (the “Plan”) in consideration for the Employee’s service to the Company and its subsidiaries.
NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as follows:
1. Award of Restricted Stock . Subject to the terms and conditions of this Agreement and the Plan, the Employee is granted _________ shares of Common Stock (hereinafter such shares are referred to as the “Restricted Stock”) as of the date hereof (the “Grant Date”).
2. Value of Restricted Stock . The value of each share of the Restricted Stock shall be equal to $________, which price equals the closing sale price per share of the Common Stock on the New York Stock Exchange on __________, the date prior to the Grant Date of the Restricted Stock.
3. Restricted Stock Non-Assignable and Non-Transferable . Each share of Restricted Stock and all rights under this Agreement shall be non-assignable and non-transferable other than by will or the laws of descent and distribution in accordance with the Plan and may not be sold, pledged, hypothecated, assigned or transferred, except only as to such shares of Restricted Stock, if any, which have vested pursuant to the terms of the Plan and this Agreement. The foregoing prohibition against transfer or assignment, together with the obligation to forfeit the Restricted Stock upon (i) termination of service with the Company and/or its subsidiaries as set forth in Section 4 of this Agreement and/or (ii) a breach by Employee of the confidentiality provisions as set forth in Section 13 of this Agreement, are herein collectively referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of the Restricted Stock.
4. Termination of Employment. In the event of termination of the employment of the Employee with the Company or its subsidiaries by reason of total and permanent disability or death, or termination of employment without “Cause” (as defined by Employee’s Employment Agreement with the Company), each of the then unvested shares of Restricted Stock will immediately vest in full as of the date of such total and permanent disability or death or termination. In the event of termination of the employment of the Employee with the Company or its subsidiaries for “Cause”,( as defined by the Employee’s Employment Agreement with the Company), or in the event of the termination of employment by the Employee, any then unvested shares of Restricted Stock shall be forfeited and cancelled as of the date of such termination of employment.
5. Vesting of Restricted Stock. Subject to Section 4, the shares of Restricted Stock are subject to vesting at the rate of twenty-five percent (25%) of the shares of Restricted Stock on each one (1) year anniversary date of the Grant Date, provided that the Employee has been continuously employed by the Company and/or its subsidiaries from the Grant Date through each such anniversary of the Grant Date.
6. Certificate. A certificate evidencing the Restricted Stock shall be issued by the Company in the name of the Employee, but held in escrow by the Company pursuant to Section 8 of this Agreement, following the execution of this Agreement. In addition to any other legends placed on certificates for shares of Common Stock as determined by the Company, the certificate for the Restricted Stock shall bear the following legends:
| NOTICE IS ALSO HEREBY GIVEN THAT THE SALE, PLEDGE, ASSIGNMENT, HYPOTHECATION, TRANSFER OR DISPOSAL OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED AS SET FORTH IN A RESTRICTED STOCK AGREEMENT, DATED AS OF ____________, BY AND BETWEEN THE ISSUER AND THE REGISTERED OWNER HEREOF, A COPY OF WHICH RESTRICTED STOCK AGREEMENT IS ON FILE AT THE OFFICE OF THE ISSUER, AND ALL OF THE PROVISIONS OF THE RESTRICTED STOCK AGREEMENT ARE FULLY INCORPORATED BY REFERENCE IN THIS CERTIFICATE. APPROPRIATE STOP-TRANSFER INSTRUCTIONS HAVE BEEN GIVEN TO THE TRANSFER AGENT OF THE ISSUER WITH RESPECT TO THE SECURITIES REPRESENTED BY THIS CERTIFICATE. |
With respect to any Restricted Stock as to which the Forfeiture Restrictions have terminated, the Employee shall be entitled to have the Company issue and deliver to the Employee a new certificate for such shares, without the foregoing legend.
7. Withholding of Tax. To the extent that the receipt of the Restricted Stock or the termination of any Forfeiture Restrictions results in income to the Employee for federal or state income tax purposes, the Employee shall deliver to the Company at the time of such receipt of the Restricted Stock or termination of the Forfeiture Restrictions, as the case may be, such amount of money as the Company may require to meet its withholding obligation under applicable tax laws or regulations. If the Employee fails to deliver such funds, the Company is authorized to withhold from any cash remuneration then or thereafter payable to the Employee in an amount equal to the amount of money necessary for the Company to satisfy its tax withholding obligations in relation to the grant of Restricted Stock or termination of Forfeiture Restrictions.
8. Escrow. Upon issuance, the certificates for Restricted Stock shall be deposited in escrow with the Company to be held in accordance with the provisions of this Agreement. Restricted Stock shall be released to the Employee upon the termination of all the Forfeiture Restrictions.
9. Adjustment . If there shall be any change in the Common Stock through a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, exchange of stock or other change in the corporate structure, appropriate adjustments shall be made in the aggregate number of shares of Restricted Stock in order to reflect such change.
10. Merger, Consolidation or Liquidation . At least thirty (30) days prior written notice of a merger, consolidation or liquidation of the Company shall be given by the Company to the Employee, in which case all unvested shares of Restricted Stock shall become fully vested contemporaneously with the closing of such merger, consolidation or liquidation of the Company.
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11. Limitation of Rights .
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(a) No Right to Continue as an Employee . Neither the Plan nor the grant of the Restricted Stock shall constitute or be evidence of any agreement or understanding, express or implied, that the Employee has a right to continue as an employee of the Company or any of its subsidiaries for any period of time, or at any particular rate of compensation. |
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(b) No Stockholder’s Rights as to Restricted Stock . The Employee shall have no rights as a stockholder with respect to unvested shares of Restricted Stock granted hereunder until the date such shares become vested in the Employee, and no adjustment will be made for any dividends or other rights for which the record date is prior to the date of the vesting of such shares of Restricted Stock. |
12. Incorporation by Reference. The terms of the Plan to the extent not stated herein are expressly incorporated herein by reference and in the event of any conflict between this Agreement and the Plan, the terms of the Plan shall govern, control and supercede over the provisions of this Agreement.
13. Confidentiality. The Employee acknowledges that the information, observations, data and trade secrets (collectively, “Confidential Information”) obtained or created by him or her during the course of his or her employment with the Company or its subsidiaries concerning the business or affairs of the Company or any of its subsidiaries or affiliates are the property of the Company. For purposes of this Agreement, “trade secret” means any method, program or compilation of information which is used in the business of the Company or any of its subsidiaries or affiliates, including but not limited to: (a) techniques, plans and materials used by the Company or any of its subsidiaries or affiliates, (b) marketing methods and strategies employed by the Company or any of its subsidiaries or affiliates, and (c) all lists of past, present or prospective patients, customers, suppliers and referral sources of the Company or any of its subsidiaries or affiliates. The Employee agrees that he or she will not disclose to any unauthorized person or entity nor use for his or her own account any of such Confidential Information without the prior written consent of the Chairman or President of the Company, unless and to the extent that the aforementioned matters become generally known to and available for use by the public other than as a result of the Employee’s acts or omissions to act or become known to the Employee lawfully outside the scope of his or her employment with the Company or its subsidiaries. The Employee agrees to deliver to the Company at the termination of his or her employment, or at any other time the Company may request, all memoranda, notes, plans, records, reports and other documents (and copies thereof) relating to the business of the Company or any of its subsidiaries or affiliates which the Employee may then possess or have under his or her control.
All of the terms and conditions of this Agreement are hereby confirmed, ratified, approved and accepted by the Company and by the Optionee, who has set his hand hereto by his electronic submission of this Agreement.
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