ORION HEALTHCORP, INC. STOCK OPTION AGREEMENT (Incentive Stock Option)
ORION
HEALTHCORP, INC.
(Incentive
Stock Option)
THIS
OPTION AGREEMENT
(the
“Agreement”)
is
entered into as of the 17th day of June, 2005, by and between
ORION HEALTHCORP, INC.,
a
Delaware corporation (the “Company”),
and
the employee designated below (the “Optionee”).
W I T N E S S E T H:
WHEREAS,
the
Orion
HealthCorp, Inc. 2004 Incentive Plan (the “Plan”)
was
adopted by the Company on September 7, 2004, and was subsequently approved
by
the Company’s stockholders;
WHEREAS,
the
Company considers Optionee’s employment important to the growth and success of
the Company; and
WHEREAS,
the
Company desires to grant Optionee options to purchase shares of Common Stock
as
an inducement for Optionee to continue in employment with the
Company;
NOW,
THEREFORE,
the
parties agree as follows:
| Employee/Optionee: | _____________ | ||
| Total Number of Shares: | _____________ Shares | ||
| Option Exercise Price: | $ .84 Per Share | ||
| Date of Grant: | June 17, 2005 | ||
| Vesting Schedule: | % of Shares | Vesting Date | |
| 25% | June 17, 2006 | ||
| 25% | June 17, 2007 | ||
| 25% | June 17, 2008 | ||
| 25% | June 17, 2009 | ||
|
1.
|
Grant
of Option.
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|
1.1
|
Option.
An
option to purchase shares of the Company’s Class A Common Stock is hereby
granted to the Optionee (the “Option”).
|
|
1.2
|
Number
of Shares.
The number of shares that the Optionee can purchase upon exercise
of the
Option and the dates upon which the Option can first be exercised
are set
forth above.
|
1
|
1.3
|
Option
Exercise Price.
The price the Optionee must pay to exercise the Option (the “Option
Exercise Price”)
is set forth above.
|
|
1.4
|
Date
of Grant.
The date the Option is granted (the “Date
of Grant”)
is set forth above.
|
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1.5
|
Type
of Option.
The
Option is intended to qualify as an Incentive Stock Option (“ISO”) within
the meaning of Section 422 of the Internal Revenue Code of 1986,
as
amended from time to time, or any successor provision thereto (the
“Code”), and
shall be so construed; provided, however, that nothing in this
Agreement
shall be interpreted as a representation, guarantee or other undertaking
on the part of the Company that the Option is or will be determined
to be
an ISO within the meaning of Section 422 of the Code. To the extent
this
Option does not qualify and is not treated as an ISO, it will be
treated
as a nonqualified stock option.
|
|
1.6
|
Construction.
This Agreement shall be construed in accordance and consistent
with, and
subject to, the provisions of the Plan (the provisions of which
are
incorporated herein by reference) and, except as otherwise expressly
set
forth herein, the capitalized terms used in this Agreement shall
have the
same definitions as set forth in the
Plan.
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|
1.7
|
Condition.
The Option is conditioned on the Optionee’s execution of this Agreement.
If this Agreement is not executed by the Optionee, it may be canceled
by
the Company.
|
|
2.
|
Duration.
|
The
Option shall be exercisable to the extent and in the manner provided herein
for
a period of [ten (10) years] from the Grant Date (the “Exercise
Term”);
provided, however, that the Option may be earlier terminated as provided
in
Section
1.7
and
Section
5
hereof.
|
3.
|
Vesting.
|
The
Option shall fully vest, and may be exercised, with respect to the shares
of
Stock, on or after the date or dates set forth above, subject to earlier
vesting
of the Option as provided in Section
8
and
subject to earlier termination of the Option as expressly provided in this
Agreement or in the Plan.
The
right to purchase the shares as they become vested shall be cumulative and
shall
continue during the Exercise Term unless sooner terminated as provided herein.
Notwithstanding
the foregoing, if the Optionee is a non-exempt employee for purposes of the
Fair
Labor Standards Act of 1938 (“FLSA”),
the
Optionee may not exercise any Option (even if the Option is otherwise vested)
prior to the date that is six (6) months after the Date of Grant unless the
Optionee’s employment has terminated due to death, disability, or retirement or
unless a Covered Transaction has occurred after the Date of Grant.
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4.
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Manner
of Exercise and Payment.
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4.1
|
Delivery.
To exercise the Option, the Optionee must deliver a completed copy
of the
Option
Exercise Form,
attached hereto as Exhibit
A (or
such other form as designated by the Company from time to time),
to the
address indicated on such form or such other address designated
by the
Company from time to time. The Option may be exercised in whole
or in part
with respect to the vested shares; provided, however, the Company
may
establish a minimum number of shares (e.g., 100) for which an Option
may
be exercised at a particular time. Within thirty (30) days of delivery
of
the Option Exercise Form, the Company shall deliver certificates
evidencing the shares or shall enter the Optionee’s name as a stockholder
of record on the books of the Company, free and clear of all liens,
security interests, or pledges or other claims or charges, but
subject to
the any other requirements or restrictions provided in the Plan
and
provided in Section 7 of this Agreement. Contemporaneously with
the
delivery of the Option Exercise Form, Optionee shall tender the
Option
Exercise Price to the Company, by cash, check, wire transfer or
such other
method of payment (e.g., an approved cashless exercise program
or delivery
of, or attestation to, shares of Stock already owned by the Optionee
for
six months or such other period required by the Administrator)
as may be
acceptable to the Administrator pursuant to the Plan and any procedures
or
policies as adopted from time to
time.
|
2
|
4.2
|
No
Rights as Stockholder.
The Optionee shall not be deemed to be the holder of, or to have
any of
the rights of a holder with respect to any Shares subject to the
Option
until (i) the Option shall have been exercised pursuant to the
terms of
this Agreement and the Optionee shall have paid the full purchase
price
for the number of Shares in respect of which the Option was exercised,
and
(ii) the Company shall have issued the Shares to or on behalf of
the
Optionee and the Optionee’s name shall have been entered as a stockholder
of record on the books of the Company, whereupon the Optionee shall
have
full voting and other ownership rights with respect to such
Shares.
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5.
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Termination
of Employment.
|
Except
as
provided below in Section 8, if the Optionee’s Employment with the Company is
terminated by the Company or by the Optionee for any reason, all outstanding
unvested portions of the Option shall expire immediately. Any portion of
the
Option that is vested as of the date of termination of Employment shall remain
exercisable at any time prior to the end of the Exercise Term or for 120
days
after the date of termination of Employment (1 year after the termination
of
Employment if due to death), whichever period is shorter. To the extent the
Option is exercised more than 90 days after the date of termination of
Employment, the Option shall cease to be an ISO and shall be considered a
non-incentive stock opton. Notwithstanding the above, the vested portion
of the
Option will expire upon the Optionee’s termination of Employment if the
Committee in its sole discretion determines that the termination of Optionee’s
Employment has resulted from reasons which cast such discredit on the Optionee
to justify immediate termination of the Option.
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6.
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Nontransferability.
|
The
Option shall not be transferable other than by will or by the laws of descent
and distribution, and during the lifetime of the Optionee, the Option shall
be
exercisable only by the Optionee.
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7.
|
Restrictions
on the Option and the
Shares.
|
The
Option may not be exercised at any time unless, in the opinion of counsel
for
the Company, the issuance and sale of the shares issued upon such exercise
is
exempt from registration under the Securities Act of 1933, as amended, or
any
other applicable federal or state securities law, rule or regulation, or
the
shares have been duly registered under such laws. Unless the shares have
been
registered under all applicable laws, the Optionee shall represent, warrant
and
agree, as a condition to the exercise of the Option, that the shares are
being
purchased for investment only and without a view to any sale or distribution
of
such shares and that such shares shall not be transferred or disposed of
in any
manner without registration under such laws, unless it is the opinion of
counsel
for the Company that such a disposition is exempt from such registration.
The
Optionee acknowledges that an appropriate legend giving notice of the foregoing
restrictions shall appear conspicuously on all certificates evidencing the
shares issued upon the exercise of the Option.
3
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8.
|
Effect
of a Covered
Transaction.
|
Upon
the
effective date of a Covered Transaction (as defined in the Plan), the Option,
to
the extent not already vested as of such date, shall become vested and
exercisable. The Option shall be assumed, shall terminate, or shall otherwise
be
adjusted as provided by the Administrator in accordance with Section 7 of
the
Plan.
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9.
|
No
Right to Continued Employment.
|
Nothing
in this Agreement or the Plan shall be interpreted or construed to confer
upon
the Optionee any right with respect to continuance of Employment by the Company,
nor shall this Agreement or the Plan interfere in any way with the right
of the
Company to terminate the Optionee’s Employment at any time.
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10.
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Adjustments.
|
In
the
event of a change in capitalization of the Company, the Company may make
appropriate adjustments to the number and class of Shares or other stock
or
securities subject to the Option and the purchase price for such Shares or
other
stock or securities. The Company’s adjustment shall be final, binding and
conclusive for all purposes this Agreement.
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11.
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Withholding
of Taxes.
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11.1
|
The
Company shall have the right to deduct from any distribution of
cash to
the Optionee an amount equal to the federal, state and local income
taxes
and other amounts as may be required by law to be withheld (the
“Withholding
Taxes”)
with respect to the Option. If the Optionee is entitled to receive
shares
of Stock upon exercise of the Option, the Optionee shall pay the
Withholding Taxes (if any) to the Company in cash prior to the
issuance of
such shares. In satisfaction of the Withholding Taxes, the Optionee
may
make a written election to have withheld a portion of the shares
issuable
to him or her upon exercise of the Option, having an aggregate
Fair Market
Value equal to the minimum required Withholding Taxes, provided
that, if
the Optionee may be subject to liability under Section 16(b) of
the
Exchange Act, the election must comply with the requirements applicable
to
share transactions by such
Optionee.
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11.2
|
If
the Optionee makes a disposition, within the meaning of Section
424(c) of
the Code and regulations promulgated thereunder, of any share or
shares
issued to him pursuant to his exercise of the ISO within the two-year
period commencing on the day after the Grant Date or within the
one-year
period commencing on the day after the date of transfer of such
share or
shares to the Optionee pursuant to such exercise, the Optionee
shall,
within ten (10) days of such disposition, notify the Company thereof,
by
delivery of written notice to the Company at its principal executive
office.
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4
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12.
|
Modification
of Agreement.
|
Except
as
expressly provided in this Agreement and in the Plan, this Agreement may
be
modified, amended, suspended or terminated, and any terms or conditions may
be
waived, only by a written instrument executed by the parties
hereto.
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13.
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Severability.
|
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
in accordance with their terms.
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14.
|
Governing
Law.
|
The
validity, interpretation, construction and performance of this Agreement
shall
be governed by the laws of the State of Delaware without giving effect to
the
conflicts of laws principles thereof.
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15.
|
Successors
in Interest.
|
This
Agreement shall inure to the benefit of and be binding upon each successor
corporation to the Company. This Agreement shall inure to the benefit of
the
Optionee’s legal representatives. All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be final, binding
and conclusive upon the Optionee’s heirs, executors, administrators and
successors.
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16.
|
Resolution
of Disputes.
|
Any
dispute or disagreement which may arise under, or as a result of, or in any
way
relate to, the interpretation, construction or application of this Agreement
shall be determined by the Administrator.
5
IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of
the
date first above written.
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ORION
HEALTHCORP,
INC.
|
|
| By: | |
| Name: | |
| Title: | |
By
signing below, Optionee hereby accepts the Option subject to all its terms
and
provisions and agrees to be bound by the terms and provisions of this Agreement
and of the Plan. Optionee hereby agrees to accept as binding, conclusive
and
final all decisions or interpretations of the Company upon any questions
arising
under this Agreement or the Plan. Optionee authorizes the Company to withhold,
in accordance with applicable law, from any compensation payable to him or
her,
any taxes required to be withheld by federal, state or local law as a result
of
the grant, existence or exercise of the Option.
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OPTIONEE
|
||
| Signature: | ||
| Name: |
[EXHIBIT
FOLLOWS]
6
EXHIBIT
A
OPTION
EXERCISE FORM
I,
_____________________________, do hereby exercise the Option with a Date
of
Grant of ___________________, ______ granted to me pursuant to the Option
Agreement. The Shares being purchased and the Total Option Exercise Price
are
set forth below:
|
Number
of Incentive Stock Option Shares:
|
________________
Shares
|
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Total
Number of Shares
|
________________
Shares
|
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Option
Exercise Price Per Share
|
x
$
____________ per Share
|
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Total
Option Exercise Price:
|
=
$
____________.
|
The
Total
Option Exercise Price is included with this Form.
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____________________________________
Signature
|
Date:
___________________
|
Send
or
deliver this Form with an original signature to:
Orion
HealthCorp, Inc.
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Attn:
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