EXHIBIT 10.4
SYMBION STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
GRANT NUMBER N <>
THIS AGREEMENT is made and entered into by and between Symbion, Inc.
(the "Company") and <> (the "Participant"), in connection with the
grant of an Option under the Symbion Stock Incentive Plan (the "Plan") on
<>.
The Participant is an employee of the Company or an Affiliate and is
eligible to receive this Option under the terms of the Plan, which was amended
and restated in an action that was approved by the stockholders of the Company
on March 28, 2002, for the purposes stated in Article II of the Plan. The
parties intend that this grant be treated as a Nonqualified Option under the
Plan, subject to the terms stated in this Agreement.
1. Grant of Option. Subject to the terms and conditions set forth
herein, the Participant is granted a Nonqualified Option to purchase from the
Company <> shares of Stock at a price of <> per share. This price
is subject to adjustment as provided in Article VIII of the Plan. This Option
expires at the close of business on <>, unless it expires
sooner pursuant to Paragraph 6. Except as otherwise provided in Paragraph 6 or
in the Plan, this Option is exercisable at any time prior to the date it expires
with respect to the number of shares of Stock shown in the schedule below.
On and After Shares Subject to Exercise
------------ --------------------------
<> <> SHARES
<> ADDITIONAL <> SHARES
<> ADDITIONAL <> SHARES
<> ADDITIONAL <> SHARES
2. Method of Exercise. The exercise of this Option is subject to the
Participant's execution of a written stockholders agreement that generally
applies to some or all of the stockholders of the Company, payment of the
exercise price stated in Paragraph 1, and making arrangement for any required
tax withholdings in a method that is acceptable to the Company or the Committee.
The Participant may exercise this Option in whole or in part, from time to time,
with respect to the number of whole shares of Stock that can be purchased at
such time in accordance with Paragraph 1, by actual delivery of written notice
to the Company at the address provided in Paragraph 10. Such notice of exercise
shall:
(a) specify the number of whole shares of Stock to be
purchased, the exercise price and, if applicable, the portion of the Option that
is being exercised;
(b) contain evidence satisfactory to the Committee that the
person exercising this Option is the Participant or has the right to exercise
this Option; and
(c) be accompanied by payment of the exercise price in
accordance with the Plan and, in a manner that is acceptable to the Company or
the Committee, payment of or
arrangement for the payment of any required federal, state, and local
withholding taxes that are due in connection with the exercise.
3. Transfer and Exercise of Option. In general, this Option is not
transferable and the Participant may not make any disposition of this Option or
any interest herein during his or her lifetime, except for transfers pursuant to
a will or the laws of descent and distribution; provided, however, that the
Option may be transferred to the extent consented to by the Committee. As used
herein, "disposition" means any sale, transfer, encumbrance, gift, donation,
assignment, pledge, hypothecation, or other disposition, whether similar or
dissimilar to those previously enumerated, whether voluntary or involuntary, and
whether during the Participant's lifetime or upon or after the Participant's
death, including, but not limited to, any disposition by operation of law, by
court order, by judicial process, or by foreclosure, levy or attachment, except
a transfer by will or by the laws of descent or distribution. Any attempted
disposition in violation of this Paragraph is void.
4. Status of Participant. The Participant shall not be deemed a
stockholder of the Company with respect to any of the shares of Stock subject to
this Option, except to the extent that such shares shall have been purchased and
transferred to him or her. The Company is not required to issue shares of Stock
purchased upon exercise of this Option until all applicable requirements of law
have been complied with and such shares shall have been duly listed on any
securities exchange on which the Stock may then be listed.
5. No Effect On Capital Structure. This Option shall not affect the
right of the Company or any Affiliate to reclassify, recapitalize or otherwise
change its capital or debt structure or to merge, consolidate, convey any or
all of its assets, dissolve, liquidate, windup, or otherwise reorganize.
6. Expiration of Option. The right to exercise this Option will expire
on the date specified in Paragraph 1, which is seven years after the date of
grant, provided that this Option will expire earlier on the soonest of any of
the following circumstances to occur:
(a) Disability. Upon termination of employment due to the
Participant's disability (as defined in section 22(e)(3) of the Code), the
Participant shall have the right for 12 months after such disability to exercise
this Option in accordance with Paragraph 1 if the Participant was otherwise
entitled to exercise any portion of this Option on the date of such termination.
Thereafter, this Option shall terminate and cease to be exercisable.
(b) Death. If the Participant dies, this Option shall be fully
exercisable by the Participant's legal representatives, heirs, legatees, or
distributees for 12 months after death if the Participant was entitled to
exercise it on the date of death, without regard to the schedule in Paragraph 1.
Thereafter, this Option shall terminate and cease to be exercisable.
(c) Other Termination of Employment. If the Participant's
employment terminates for any reason other than the circumstances described in
subparagraphs (a) or (b) above, the Participant may exercise this Option for
three months after such termination, but only to the extent the Participant was
able to do so under Paragraph 1 on the date of termination of employment.
Thereafter, this Option shall terminate and cease to be exercisable.
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7. Committee Authority. Any question concerning the interpretation of
this Agreement, any adjustments required to be made under the Plan and any
controversy that may arise under the Plan or this Agreement shall be determined
by the Committee in its sole discretion. Such decision by the Committee shall be
final and binding.
8. Change in Control. Upon the occurrence of a Change in Control, as
defined in the Plan, this Option shall be subject to the following:
(a) If this Option is outstanding immediately prior to the
Change in Control and, as a result of the Change in Control, the Company is not
the surviving entity after the transaction, or survives only as a subsidiary or
is otherwise controlled by another entity, this Option shall be assumed by the
entity which is the survivor of the transaction, or converted into options to
purchase the common stock of the surviving entity, in a transaction to which
section 424(a) of the Code applies.
(b) Notwithstanding the provisions of Section 8.3 of the Plan
regarding the acceleration of the right to exercise this Option upon a Change in
Control, a portion of the acceleration of vesting described in this Section
shall not occur with respect to this Option to the extent such acceleration of
vesting would cause the Participant or holder of such Option to realize less
income, net of taxes, after deducting the amount of excise taxes that would be
imposed pursuant to section 4999 of the Code, than if accelerated vesting of
that portion of the Option did not occur. This limitation shall not apply to the
extent that the stockholders of the Company or the acquirer approve the
acceleration of vesting hereunder in a manner that satisfies section
280G(b)(5)(B) of the Code, or to the extent that the Participant is a party to
an agreement in which the Participant is indemnified or otherwise held harmless
for the taxes that result from section 4999 of the Code.
(c) Except as modified by this Paragraph 8, the provisions of
Section 8.3 of the Plan shall otherwise apply to this Option upon the occurrence
of a Change in Control.
9. Plan Controls. The terms of this Agreement are governed by the terms
of the Plan, as it exists on the date of this Agreement and as the Plan is
amended from time to time. A copy of the Plan, and any amendments thereto, has
been delivered or made available to the Participant and shall be deemed to be a
part of this Agreement as if fully set forth herein. In the event of any
conflict between the provisions of the Agreement and the provisions of the Plan,
the terms of the Plan shall control, except as expressly stated otherwise. For
purposes of this Agreement, the defined terms in the Plan shall have the same
meaning in this Agreement, except where the context otherwise requires. The
terms "Article" or "Section" generally refer to provisions within the Plan. The
term "Paragraph" shall refer to a provision of this Agreement.
10. Restrictive Covenants. By accepting this Option, the Participant
expressly recognizes and acknowledges that all information pertaining to the
affairs, business, clients, customers or other relationships of the Company is
confidential and is a unique and valuable asset of the Company. Access to and
knowledge of this information are essential to the performance of a
Participant's duties while in the employ of the Company or an Affiliate. The
restrictive covenants contained in this Paragraph 10 will apply to the
Participant while employed by the Company and for a period of one year following
termination of employment for any
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reason and will continue to apply whether or not this Option has been exercised
or the right to exercise has expired.
(a) The Participant will not give to any person, firm,
association, corporation or governmental agency any information concerning the
affairs, business, clients, customers or other relationships of the Company,
except as required by law. The Participant will also use his or her best efforts
to prevent the disclosure of this information by others. All records, memoranda,
etc. relating to the Company whether made by the Participant or otherwise coming
into his or her possession are confidential and will remain the property of the
Company.
(b) The Participant will not directly or indirectly hire any
employee of the Company or solicit or encourage any such employee to leave the
employ of the Company.
(c) The Participant will not (i) serve as a director, officer,
partner, member, employee, manager, consultant, agent, independent contractor,
advisor or equity owner or otherwise provide any services for any business that
has any direct or indirect interest in the ownership, operation, management or
development of ambulatory surgery centers (any such business, an "ASC");
provided, however, that the Participant shall not be restricted from providing
services following termination of employment with the Company and its Affiliates
to an ASC solely in a geographic market in which the Company does not directly
or indirectly own, operate or manage an ASC, and in which the Company is not
developing or attempting to develop an ASC (each a "Company ASC"), or (ii)
interfere with, disrupt or attempt to disrupt any past, present or prospective
business relationship, contractual or otherwise of the Company, its Affiliates
or a Company ASC, including without limitation, any such relationship between a
Company ASC and the physicians located in its marketplace; provided, however,
that a prospective business relationship will only be deemed to exist with a
physician if such physician, directly or indirectly, owns an interest in a
Company ASC or has had discussions concerning or has been identified as a
prospective owner of an interest in a Company ASC.
(d) By accepting the award of an Option hereunder, the
Participant acknowledges that his or her breach or threatened or attempted
breach of any provision of this Paragraph would cause irreparable harm to the
Company not compensable in monetary damages and agrees that the Company shall be
entitled to all applicable remedies therefor at law and equity, including but
not limited to: (i) the immediate cancellation of this Option, and (ii) a
temporary and permanent injunction and a decree for specific performance of the
terms of this Paragraph without being required to prove damages or furnish any
bond or other security. The Company's rights to any remedy under this Paragraph
or otherwise at law or equity are intended to be cumulative and the enumeration
of any specific right or remedy of the Company is not intended to limit or
restrict any other right or remedy the Company may have at law or equity.
(e) In the event any covenant contained in this Paragraph 10
is held to be invalid, illegal or unenforceable because of the scope or duration
of such covenant, or otherwise, the parties agree that the court making such
determination shall have the power to reduce the scope, duration, and/or other
provision(s) of any such covenant to the maximum permissible and to include as
much of its nature and scope as will render it enforceable, and, in its reduced
form said covenant shall be valid, legal and enforceable.
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(f) The covenants and remedies specified in this Paragraph 10 are in
addition to any terms included in a written employment agreement between the
Participant and the Company or an Affiliate; provided that in the event that the
duties of the Participant hereunder are contrary to the duties specified in such
an employment agreement, the provisions of the employment agreement shall
control. The restrictive covenants contained in this Paragraph 10 will expire
upon the occurrence of an event described in Paragraph 8(a).
11. Notice. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail. Any
notice required or permitted to be delivered hereunder shall be deemed to be
delivered on the date which it is personally delivered, or, whether actually
received or not, on the third business day after it is deposited in the United
States mail, certified or registered, postage prepaid, addressed to the person
who is to receive it at the address which such person has theretofore specified
by written notice delivered in accordance herewith. The Company or Participant
may change, by written notice to the other, the address previously specified for
receiving notices. Notices delivered to the Company shall be addressed as
follows:
Symbion, Inc.
Attn: Xxxx Xxxxxxx
00 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Notices to the Participant shall be hand delivered to the Participant on the
premises of the Company or its Affiliates, or mailed to the last address shown
on the records of the Company.
12. Information Confidential. As partial consideration for granting of
this Option, the Participant agrees that he or she will keep confidential all
information and knowledge that the Participant has relating to the manner and
amount of his or her participation in the Plan; provided, however, that such
information may be disclosed as required by law and may be given in confidence
to the Participant's spouse, tax and financial advisors, or to a financial
institution to the extent that such information is necessary to secure a loan.
13. Governing Law. Except as is otherwise provided in the Plan, where
applicable, the provisions of this Agreement shall be governed by the internal
laws of the State of Tennessee, without regard to the principles of conflicts of
laws thereof.
[Execution Page Follows]
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EXECUTION PAGE
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and the Participant has set his hand hereto on this ____ day of
_______________, but to be effective as of <>.
SYMBION, INC.
---------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Chief Executive Officer
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<>
Participant
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