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EXHIBIT 10.2
UNIVERSAL STANDARD HEALTHCARE, INC.
AGREEMENT FOR INCENTIVE STOCK OPTION AWARD PROGRAM
February 25, 1998
The Board of Directors (the "Board") of Universal Standard Healthcare,
Inc. (the "Company"), or the committee (the "Committee") designated by the Board
for the purpose of administering the Universal Standard Healthcare, Inc. 1992
Stock Option Plan (the "Plan"), hereby grants to Xxxxxx Xxxxxxxx (the
"Grantee"), the Vice President of the Company, a stock option (the "Option"),
pursuant to the Plan. The Option is subject in all respects to the Plan. Certain
capitalized terms used in this agreement (the "Agreement") which are not defined
herein have the meanings indicated for such terms in Section 10.1 of the Plan.
1. Stock Option. The Option entitles the Grantee to purchase up to
160,000 shares (the "Option Shares") of the Company's Common Stock, no par value
(the "Common Stock"), at an option price per share of $1.91 (the "Option
Price"), subject to the terms and conditions of this Agreement. The Option is
intended to be an Incentive Stock Option.
2. (a) Exercisability. The Option may be exercised and Option Shares
may be purchased at any time and from time to time after the execution of this
Agreement, subject to the vesting limitations imposed by Section 2(b). The
Option Price for Option Shares shall be paid in full in cash or by check by the
Grantee at the time of the delivery of Option Shares, or, at the written
election of the Grantee, payment may be made by (i), to the extent permitted by
the Committee, delivery to the Company of outstanding shares of Common Stock,
(ii), to the extent permitted by the Committee, retention by the Company of one
or more of such Option Shares or (iii) any combination of cash, check, and, to
the extent permitted by the Committee, the Grantee's delivery of outstanding
Shares and retention by the Company of one or more of such Option Shares.
(b) Vesting/Exercisability. The Grantee may only exercise his
Option to purchase Option Shares to the extent that the Option has vested and
become exercisable with respect to such Option Shares.
(i) Time Vesting. The Option will vest and become
exercisable as follows:
20,000 . .. . . . . . . . . . . . . . . . 1 Year after date of this Option
20,000 . . . . . . . . . . . . . . . . . 2 Years after date of this Option
20,000 . . . . . . . . . . . . . . . . . .3 Years after date of this Option
20,000 . . . . . . . . . . . . . . . . . .4 Years after date of this Option
10,000 . . . . . . . . . . . . . . . . . .Upon Release of 1998 Earnings
20,000 . . . . . . . . . . . . . . . . . .Upon Release of Each of 1999, 2000, and 2001 Earnings
10,000 . . . . . . . . . . . . . . . . . .Upon Release of 2002 Earnings
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subject to the Grantee's continued employment with the Company or any Subsidiary
in the position held as of the date of this Agreement or a higher position. In
the event the Grantee no longer continues to be employed by the Company or any
Subsidiary in the position held as of the date of this Agreement or a higher
position, all Options which have not become exercisable at the date of such
event shall immediately terminate. Whether the Grantee has continued to be
employed by the Company or any Subsidiary in the position held as of the date of
this Agreement or a higher position shall be determined by the Committee in its
sole discretion. To the extent not exercised, installments shall accumulate and
the Grantee may exercise them thereafter in whole or in part.
(ii) Death, Disability, Change in Control or Termination. The
Option shall vest and become exercisable with respect to all of the Option
Shares automatically upon the death or permanent disability (as determined by
the Board or the Committee) of the Grantee. Subject to the limitations under
Sections 2806 and 4999 of the Internal Revenue Code, if there should be a Change
of Control of the Company while the Grantee is employed by the Company, or the
Grantee's employment is terminated by the Company, other than for Cause
("Without Cause Termination")("For Cause" shall mean (i) the Grantee's
(hereinafter "Employee's") personal dishonesty or willful misconduct which
directly and materially adversely affects the Company or its affiliates or
repeated acts of personal dishonesty or willful misconduct by Employee which
directly affects the Company; (ii) Employee's performance of the specific and
lawful resolutions of the Board of Directors in a grossly incompetent manner
inconsistent with the standards of other employees with similar responsibilities
in the industry or Employee's willful failure to follow the specific and lawful
resolutions of the Board of Directors and his failure to initiate actions to
cure such performance or failure to perform within ten (10) days after his
receipt of written notice from the Company specifically identifying the manner
in which Employee has not performed such lawful directives and to cure such
performance or failure to perform within a reasonable period thereafter; (iii)
breach of fiduciary duty by Employee to the Company resulting in Employee's
personal profit in any material respect; (iv) criminal conviction of Employee
for violation of any law, rule or regulation (other than traffic violations or
other misdemeanor offenses); or (v) the issuance against Employee by any
regulatory authority to which the business of the Company or one of its
subsidiaries is subject, of a final and non-appealable order against Employee
imposing sanctions against Employee for actions or failures to take action
occurring after the start of the Employee's employment which Employee knew or
should have known violated applicable law and which materially and adversely
affect the business and operations of the Company) and the Grantee executes a
full release of the Company of any claims the Grantee may have against the
Company, (a) if the Change of Control or Without Cause Termination occurs prior
to the release of the Company's 1998 annual earnings, options to purchase 80,000
shares of Company common stock shall become immediately exercisable; (b) if the
Change of Control or Without Cause Termination occurs after the release of the
Company's 1998 annual earnings but before the release of its 1999 annual
earnings, options to purchase 120,000 shares (less the number of option shares
which are then exercisable, so that a total of 120,000 option shares will then
be exercisable) of Company common stock shall become immediately exercisable;
and (c) if the Change in Control or
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Without Cause Termination occurs after the release of the Company's 1999 annual
earnings, options to purchase 160,000 shares (less the number of option shares
which are then exercisable, so that a total of 160,000 option shares will then
be exercisable) of Company common stock shall become immediately exercisable.
For purposes hereof, a "Change of Control" shall mean the (x) sale of all of the
assets of the Company to an unaffiliated third-party, (y) the merger or
consolidation of the Company with an unaffiliated third-party in which the
Company is not the surviving corporation or (z) any person or group of persons
(as defined in Section 13(d) of the Securities Exchange Act of 1934) (other than
WestSphere Capital Associates, L.P. and its affiliates) shall acquire or control
in excess of 51% of the Company's Common Stock on a fully-diluted basis.
(iii) Termination of Employment. The Grantee shall have the
right to exercise all unexercised Options which have vested as of the Grantee's
Termination Date (as defined in the Plan) for a period of three (3) months
following such Termination Date or such longer period as may be provided in the
Plan or as the Committee may approve in its sole discretion in connection with
such termination; provided, that the Option shall not be exercisable after its
expiration pursuant to Section 7.
3. Transferability of this Option.
(a) Except in the case of death or permanent disability of the
Grantee, this Option shall not be transferable.
(b) The Company may assign its rights and delegate its duties
under this Agreement.
4. Conformity with Plan. The Grantee's Option is intended to conform in
all respects with, and is subject to all applicable provisions of, the Plan,
which is incorporated herein by reference. Inconsistencies between this
Agreement and the Plan shall be resolved in accordance with the terms of the
Plan. By executing and returning the enclosed copy of this Agreement, the
Grantee acknowledges his receipt of the Plan and agrees to be bound by all of
other terms of the Plan.
5. Employment. Notwithstanding any contrary oral representations or
promises made to Grantee prior to or after the date hereof, Grantee and the
Company acknowledge Grantee's employment with the Company and its subsidiaries
is and will continue to be subject to the willingness of each to continue such
employment and nothing herein confers any right or obligation on Grantee to
continue in the employ of the Company or its subsidiaries or shall affect in any
way Grantee's right or the right of the Company or its subsidiaries to terminate
Grantee's employment at any time, for any reason, with or without cause.
6. Share Legends. At the sole discretion of the Committee, all
certificates representing any Option Shares subject to the provisions of this
Agreement shall have endorsed
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thereon the following legend:
"THE SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES LAW."
7. Expiration. The Option shall expire at 5:00 p.m., New York time, on
the tenth anniversary of the date hereof. In the event that the Grantee shall
cease to be employed by the Company or its subsidiaries for any reason, all
Option Shares which shall not have vested pursuant to Section 2 shall
automatically terminate.
8. Further Actions. The parties agree to execute such further
instruments and to take such further actions as may reasonably be required to
carry out the intent of this Agreement.
9. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company and, subject
to the restrictions on transfer herein set forth, be binding upon Grantee's
heirs, executors, administrators, successors and assigns.
10. Governing Law. This Agreement and all documents contemplated
hereby, and all remedies in connection therewith and all questions or
transactions relating thereto, shall be construed in accordance with and
governed by the laws of the State of Michigan.
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Please execute the extra copy of this Agreement in the space below and
return it to the Secretary of the Company to confirm your understanding and
acceptance of the agreements contained in this letter.
Very truly yours,
UNIVERSAL STANDARD HEALTHCARE, INC.
By: /s/ Xxxx X. Xxx
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Its: Chief Financial Officer
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The undersigned hereby acknowledges having read this Agreement, the
Plan, and the other enclosures to this Agreement, and hereby agrees to be bound
by all provisions set forth herein and in the Plan.
GRANTEE:
/s/ Xxxxxx Xxxxxxxx
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(Signature)
Xxxxxx Xxxxxxxx
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(Please print name)
