Exhibit 10.91a
EXHIBIT A
MAXICARE HEALTH PLANS, INC.
STOCK OPTION AGREEMENT
Maxicare Health Plans, Inc., a Delaware corporation (the
"Company"), hereby grants as of this 16th day of April, 1999 (the
"Grant Date"), to Xxxxxx X. Xxxxxxx, Xx. (the "Optionee"), an option
to purchase a maximum of Fifty Thousand (50,000) shares of its common
stock (the "Common Stock"), at the per share Exercise Price set forth
below (the "Option") on the following terms and conditions:
1. Exercise Price. The "Exercise Price" shall be equal
to the Closing Price of the Common Stock on the last trading date
immediately preceding the Grant Date. The "Closing Price" for each
trading day shall mean the closing bid price (or average of bid
prices) of the Common Stock as reported by the National Association of
Securities Dealers Automated Quotation System - National Market System
("NASDAQ-NMS") or if the Common Stock is not traded on NASDAQ, on such
national or regional securities exchange or quotation system where the
Common Stock is traded. Each Option granted pursuant to the terms
hereof shall have a ten (10) year term.
2. Grant Under 1995 Stock Plan. The Option is granted
pursuant to and is governed by the Company's 1995 Stock Option Plan
(the "Plan") and, unless the context otherwise requires, terms used
and/or defined herein shall have the same meaning as in the Plan.
Determinations made in connection with this Option pursuant to the
Plan shall be governed by the Plan as it exists on this date. This
Option is not intended to be and shall not be treated as an incentive
stock option under Section 422 of the Internal Revenue Code.
3. Extent of Option. If the Optionee has continued to
serve in the capacity of either (i) a consultant and a director or
(ii) an employee of the Company (or a subsidiary thereof, as the case
may be) on the following dates, the Optionee may, subject to Section
14 hereof, exercise this Option for only such portion of the total
number of shares subject to this Option set opposite the applicable
date:
Less than one month from the Grant - 0 shares
Date
One month but less than two months - 6,000 shares
from the Grant Date
Two months but less than three months - 12,000 shares
from the Grant Date
Three months but less than four months - 18,000 shares
from the Grant Date
Four months but less than five months - 24,000 shares
from the Grant Date
Five months but less than six months - 28,000 shares
from the Grant Date
Six months but less than seven months - 32,000 shares
from the Grant Date
Seven months but less than eight months - 36,000 shares
from the Grant Date
Eight months but less than nine months - 40,000 shares
from the Grant Date
Nine months but less than ten months - 44,000 shares
from the Grant Date
Ten months but less than eleven months - 48,000 shares
from the Grant Date
Eleven months but less than twelve months - 50,000 shares
from the Grant Date
The foregoing rights are cumulative and, while the Optionee continues
to serve as either (i) a consultant and a director or (ii) an employee
of the Company (or a subsidiary thereof, as the case may be), may be
exercised up to and including the earlier of the date which is ten
(10) years from the date this Option is granted (the "Tenth
Anniversary Date"). For purposes of this Agreement, any accrued
installment shall be referred to as an "Accrued Installment". All of
the foregoing rights are subject to Sections 4 and 5 hereof, as
appropriate, if the Optionee ceases to serve as either (i) a
consultant and a director or (ii) an employee of the Company (or a
subsidiary thereof, as the case may be) or becomes disabled or dies
while serving as either (i) a consultant and a director or (ii) an
employee of the Company (or a subsidiary thereof, as the case may be).
4. Termination of Business Relationship. If the
Optionee ceases to remain either (i) a consultant and a director or
(ii) an employee of the Company (or subsidiary thereof, as the case
may be), other than by reason of death or disability as defined in
Section 5, any unexercised Accrued Installments of the Option shall
expire and become unexercisable as of the earlier of: (a) the Tenth
Anniversary Date, or (b) one (1) year following (i) the termination of
Optionee's consulting or directorship services if Optionee is then a
consultant and director of the Company and is not immediately
thereafter hired as an employee by the Company, or (ii) the
termination of Optionee's employment services if Optionee is then an
employee of the Company (the "Termination Date"). No portion of the
Option which was not exercisable on the Termination Date shall become
exercisable after the Termination Date. The Optionee's only rights
hereunder shall be those which are properly exercised before the
termination of this Option. Any portion of an Option that expires
hereunder shall remain unexercisable and be of no effect whatsoever
after such expiration notwithstanding that such Optionee may again
become a consultant, employee or director of, the Company (or a
subsidiary thereof, as the case may be). For purposes of the vesting
schedule provided in Section 3, Optionee's consulting, employment or
directorship services shall be deemed terminated on the date such
services discontinue. However, where Optionee is terminated without
cause under Section 6(d) of the Consulting Agreement entered into by
and between Consultant and the Company of even date herewith (the
"Consulting Agreement"), Optionee's consulting, employment or
directorship services are deemed terminated (y) at the end of the
Four-Month Period (as defined in the Consulting Agreement) if Optionee
is terminated before the end of the Four-Month Period or (z) thirty
(30) days after Optionee's services cease if Optionee is terminated on
or after the Four-Month Period.
5. Death or Disability. In the event of the death of
the Optionee while either (i) a consultant and a director or (ii) an
employee of the Company (or a subsidiary thereof, as the case may be),
or in the event of termination of Optionee's consulting, employment or
directorship services by reason of the Optionee's Disability (as
defined in the Plan), any unexercised Accrued Installments of the
Option granted to Optionee shall expire and become unexercisable as of
the earlier of: (i) the Tenth Anniversary Date, (ii) the first
anniversary date of the Optionee's death (if applicable) or (iii) the
first anniversary date of the termination of Optionee's consulting,
employment or directorship services by reason of Disability (if
applicable). Any such Accrued Installments of a deceased Optionee may
be exercised prior to their expiration by (and only by) the person or
persons to whom the Optionee's Option rights shall pass by will or by
the laws of descent and distribution. Any installments under a
deceased Optionee's Option that have not accrued as of the date of his
death shall expire and become unexercisable as of said date of death.
For purposes of this Agreement, the Optionee shall be deemed to be a
consultant, employee or director of the Company (or a subsidiary
thereof, as the case may be) during any period of leave of absence
from his consulting, employment or directorship services by the
Company (or a subsidiary thereof, as the case may be).
6. Partial Exercise. Exercise of this Option up to the
extent above stated may be in part at any time and from time to time
with the above limits, except that this Option may not be exercised
for a fraction of a share. Upon the exercise of the final installment
of this Option, the Optionee shall be entitled to receive cash with
respect to the value of any fraction of a share (in lieu of any said
fractional share).
7. Payment of Exercise Price. The Exercise Price is
payable in United States dollars and may be paid in cash or by
certified or cashier's check, or any combination of the foregoing,
equal in amount to the Exercise Price. In the alternative, Optionee
may satisfy the Exercise Price by providing a copy of instructions, in
a format and upon such terms as the Company shall approve, to a broker
directing such broker to sell the Common Stock for which such Option
is exercised, and to remit to the Company the aggregate Exercise Price
of such Options (a "cashless exercise").
8. Investment Representations; Restrictions on
Transfer. The Optionee represents, warrants and covenants to the
Company that:
(a) Any Common Stock acquired by the Optionee upon
exercise of the Option will be acquired for the Optionee's own account
and not with a view to resale or distribution in violation of the
Securities Act of 1933, as amended (the "1933 Act").
(b) The Optionee has such knowledge and experience
in business and financial matters as to be capable of utilizing the
information which is available to the Optionee to evaluate the merits
and risks of an investment in the Common Stock, and is able to bear
the economic risks of any Common Stock or other securities which the
Optionee may acquire upon exercise of the Option.
9. Method of Exercising Option. Subject to the terms
and conditions of this Agreement, this Option may be exercised by
written notice to the Company, at the principal executive office of
the Company, or to such transfer agent as the Company shall designate.
Such notice shall state the election to exercise this Option and the
number of shares in respect of which it is being exercised and shall
be signed by the Optionee or person or persons entitled to so exercise
this Option. Such notice shall be accompanied by payment of the full
Exercise Price of such shares or by making a cashless exercise
pursuant to Section 7 hereof, and the Company shall deliver a
certificate or certificates representing such shares as soon as
practicable after the notice is received. The certificate or
certificates for the shares as to which this Option shall have been so
exercised shall be registered in the name of the person or persons so
exercising this Option (or, if this Option shall be exercised by the
Optionee and if the Optionee shall so request in the notice exercising
this Option, shall be registered in the name of the Optionee and
another person jointly, with right of survivorship) and shall be
delivered to or upon the written order of the person or persons
exercising this Option. In the event this Option shall be exercised,
pursuant to Section 5 hereof, by any person or persons other than the
Optionee, such notice shall be accompanied by appropriate proof of the
right of such person or persons to exercise this Option. All shares
that shall be purchased upon the exercise of this Option as provided
herein shall be fully paid and non-assessable.
10. Option Not Transferable; Transfer of Stock. This
Option is not transferable or assignable except by will or by the laws
of descent and distribution. During the Optionee's lifetime, only
the Optionee may exercise this Option. Common Stock issued pursuant
to the exercise of this Option or any interest in such Common Stock,
may be sold, assigned, gifted, pledged, hypothecated, encumbered or
otherwise transferred to alienated in any manner by the holder(s)
thereof, subject, however, to the provisions of the Plan, including
any representations or warranties requested pursuant to the Plan.
11. No Obligation to Exercise Option. The grant and
acceptance of this Option imposes no obligation on the Optionee to
exercise it.
12. No Obligation to Continue as Director, Consultant or
Employee. Neither the Company nor any subsidiary thereof is by the
Plan or this Option obligated to continue to employ Optionee as a
consultant, employee or renominate Optionee as a director and neither
the Plan nor this Option shall otherwise interfere with the Company's
or any of the Company's subsidiary's right to terminate, discharge or
retire any consultant, employee or director, including Optionee, at
any time.
13. No Rights as Stockholder Until Exercise. The
Optionee shall have no rights as a stockholder with respect to shares
subject to this Agreement until a stock certificate therefore has been
issued to the Optionee and is fully paid for. Except as is expressly
provided in the Plan with respect to certain changes in the
capitalization of the Company, no adjustment shall be made for
dividends or similar rights for which the record date is prior to the
date such stock certificate is issued.
14. Reorganization of Company.
(a) Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the
Company as a result of which the Company's outstanding Common Stock is
changed into or exchanged for cash or property or securities not of
the Company's issue, or upon a sale of all or substantially all
property of the Company to, or the acquisition of all or substantially
all of the Common Stock of the Company then outstanding by, another
corporation or person, the Plan shall terminate, and the Option
granted hereunder shall terminate; provided, however, if Optionee is
entitled to exercise any unexercised installment of the Option then
outstanding, then Optionee may, at such time prior to the consummation
of the transaction causing such termination as the Company shall
designate, to exercise the unexercised installments of the Option
including all unaccrued installments thereof which would, but for this
subsection 14(a), not yet be exercisable. Notwithstanding the
foregoing, in the event that any transaction causing such termination
is not consummated, any unexercised unaccrued installments that had
become exercisable solely by reason of the provisions of this
subsection 14(a) shall again become unaccrued and unexercisable as of
said termination of such transaction, subject, however, to such
installments accruing pursuant to the normal accrual schedule provided
in the terms under which the Option was granted.
(b) In addition to and not in lieu of those rights
granted pursuant to subsection 14(a) above, if provisions shall be
made in writing in connection with such transaction for the
continuance of the Plan and/or the assumption of options theretofore
granted, or the substitution for such options of options covering the
stock of the successor corporation, or a parent or subsidiary thereof
with appropriate adjustments as to the number and kind of shares and
prices, the unexercised Option shall continue in the manner and under
the terms so provided.
(c) The Company shall have no obligation to
provide for the continuance, assumption or substitution of the Plan or
the Option by any successor corporation or parent or subsidiary
thereof.
15. Withholding Taxes. The Optionee hereby agrees that
the Company (or a subsidiary thereof, as the case may be) may withhold
from the Optionee's wages or other remuneration the appropriate amount
of federal, state and local taxes attributable to the Optionee's
exercise of any installment of this Option. The Optionee further
agrees that, if the Company (or a subsidiary thereof, as the case may
be) does not withhold an amount from the Optionee's wages or other
remuneration sufficient to satisfy the Company's (or any such
subsidiary's) withholding obligation, the Optionee will reimburse the
Company (or any such subsidiary) on demand, in cash, for the amount
underwithheld.
16. Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of California
applicable to agreements made and to be performed entirely within such
State and without regard to the conflict of law principles thereof.
17. Amendments. No amendment, modification, termination
or waiver of any provision of this Agreement shall be effective unless
the same shall be in writing signed by all parties hereto.
18. Counterparts. This Agreement may be signed in one
or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
19. Survival of Representations. All representations,
covenants and warranties of the parties hereto shall survive the
execution of this Agreement.
20. Registration of Common Stock. The Company will use
its best efforts, within a period of no more than ninety (90) days of
the Grant Date, to file an amendment to the S-8 Registration Statement
covering the offer and sale of the Common Stock issuable upon exercise
of the Option by Optionee which amendment will revise the Form S-3
Resale Prospectus contained therein to include Optionee as a selling
shareholder thereunder.
IN WITNESS WHEREOF the Company and the Optionee have
caused this instrument to be executed as of the date first written
above, and the Optionee whose signature appears below acknowledges
receipt of a copy of the Plan and acceptance of an original copy of
this Agreement.
THE COMPANY:
MAXICARE HEALTH PLANS, INC.
By:/s/ Xxxx Xxxxx
Its: Secretary
OPTIONEE:
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Address:
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
