THIS OPTION AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND NO INTEREST
THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED, EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT.
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement"), dated
January 16, 1996, between Quantum Health Resources, Inc., a
Delaware corporation (the "Company"), and ____________________
("____________________");
Recitals
________
A. ____________________ is and has been a key
management employee of Commonwealth Care, Inc., a Massachusetts
corporation ("Commonwealth").
B. Effective as of the date hereof, the Company has
acquired all of the issued and outstanding capital stock of
Commonwealth pursuant to a Stock Purchase Agreement, dated as of
January 16, 1996 (the "Stock Agreement").
C. In connection with such acquisition, the Stock
Agreement provides for the payment to ____________________ of
certain Contingent Consideration (as defined in the Stock
Agreement). The option evidenced by this Agreement represents a
portion of such Contingent Consideration.
Agreement
_________
In consideration of the premises and the mutual
promises herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Grant of Option. Upon and subject to the terms
and conditions set forth herein, the Company hereby grants to
____________________ an option (the "Option") to purchase up to
___________________ (__________) shares (the "Shares") of the
common stock of the Company (the "Common Stock"), at a per share
exercise price (the "Exercise Price") equal to $_______ such
price being the closing bid price for one share of Common Stock
on the date of this Agreement.
2. Time of Exercise of Option.
(a) The Option shall become exercisable only to the
extent the Contingent Consideration becomes payable pursuant
to terms of the Stock Agreement. To the extent all or a
portion of the Contingent Consideration becomes payable (the
"Earned Percentage"), the Earned Percentage of the Option
may be exercised by ____________________ on any date or
dates after ________________ through and including the close
of business on the later of: (i) _________________ (if such
day is a business day, otherwise on the next succeeding
business day), or (ii) the date which is ninety (90) days
after the first date on which, in the written opinion of the
Company's counsel provided to the holder of this option, all
of the shares of Common Stock purchasable hereunder
(assuming payment of the exercise price is made pursuant to
Section 3(b)(ii) or 3(b)(iv) hereof) may be sold without
restriction under Rule 144 of the Securities Act of 1933
(other than a restriction resulting from
____________________'s status as an "affiliate").
3. Method of Exercise; Restrictions.
(a) The Earned Percentage of the Option may be
exercised in whole or in part (subject to item (c) below),
from time to time, by presentation and surrender of this
Agreement to the Company at its principal office, together
with an Option Exercise Form in the form attached hereto as
Exhibit A, duly completed and executed for purchase of the
designated number of shares of Common Stock accompanied by
payment of the Exercise Price due in connection with such
exercise.
(b) The Exercise Price shall be paid in (i) cash
(including certified or cashier's check), (ii) by delivering
shares of common stock of the Company already owned by
____________________ and having a fair market value on the
date of exercise equal to the applicable Exercise Price,
(iii) a combination of cash and such shares, (iv) by
delivering for surrender a portion of the Option such that
the aggregate spread between the Exercise Price of the
shares represented thereby and the fair market value of such
shares at the date of exercise is equal to the Exercise
Price of the portion of the Option being exercised, or
(v) such other form of so-called "cashless" exercise then
being used by the Company for other stock options and
reasonably satisfactory to the Company.
(c) If the Option shall have been exercised in part,
the Company shall, at the time of delivery of the
certificates representing the Shares issuable pursuant to
such partial exercise, make appropriate notation of the
partial exercise of the Option on the face of this Agreement
and return this Agreement to ____________________.
(d) The Company shall make prompt delivery of the
certificate(s) representing the Shares purchased pursuant to
the Option; provided, however, that if any law or regulation
requires the Company to take any action with respect to such
Shares before the issuance thereof, then the date of
delivery of such certificate shall be extended for the
period necessary to take such action.
4. Restrictions on Transfer. The Option is not
transferable by ____________________, and during his lifetime is
exercisable only by him, and ____________________ shall have no
rights in any of the Shares or otherwise as a shareholder of the
Company by virtue hereof until payment of the Exercise Price and
delivery to him of such Shares as herein provided. The Option
and the rights granted hereunder shall not be pledged or
hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment, or
similar process. Upon any attempt to transfer, assign, pledge,
hypothecate, or otherwise dispose of the Option or any right
granted hereunder or such rights contrary to the provisions
hereof, or upon the levy of any attachment or similar process
upon the Option or any such rights, this Agreement, the Option
and such rights shall immediately and automatically become null
and void and of no further force or effect.
5. Adjustments. In order to prevent dilution of the
rights granted under the Option, the Exercise Price will be
subject to adjustment from time to time as provided in this
Section 5 (such price or such price as last adjusted pursuant to
the terms hereof, as the case may be, thereafter constituting the
"Exercise Price" for all purposes), and the number of shares of
Common Stock obtainable upon exercise of the Option (or part
thereof), will be subject to adjustment from time to time as
provided in this Section 5.
5.1 Subdivision or Combination of Common Stock.
If the Company, at any time prior to the last date on which
the Option may be exercised, declares any stock dividend or
subdivides (by any stock split, recapitalization or
otherwise) its outstanding shares of Common Stock into a
greater number of shares, the number of shares of Common
Stock obtainable upon exercise of the Option will be
proportionately increased and the per share Exercise Price
shall be proportionately decreased. If the Company at any
time prior to the exercise of the Option combines (by
reverse stock split or otherwise) its outstanding shares of
Common Stock into a smaller number of shares, the number of
shares of Common Stock obtainable upon exercise of the
Option will be proportionately decreased and the per share
Exercise Price shall be proportionately increased.
5.2 Reorganization, Reclassification, Consolidation,
Merger or Sale. Any capital reorganization,
reclassification, consolidation, merger, share exchange,
sale of all or substantially all of the Company's assets to
another person or similar transaction which is effected in
such a way that holders of Common Stock are entitled to
receive (either directly or upon subsequent liquidation)
stock, securities or assets, including cash, with respect to
or in exchange for Common Stock is referred to herein as an
"Organic Change." Prior to the consummation of any Organic
Change, the Company will make appropriate provision to
ensure that ____________________ will thereafter have the
right to acquire and receive in lieu of the shares of Common
Stock immediately theretofore acquirable and receivable upon
the exercise of the Option, such shares of stock, securities
or assets, including cash, as may be issued or payable
pursuant to the terms of the transaction constituting the
Organic Change with respect to or in exchange for the number
of shares of Common Stock immediately theretofore acquirable
and receivable upon exercise of the Option had such Organic
Change not taken place. In any such case, the Company will
make appropriate provision with respect to
____________________'s rights and interests to ensure that
the provisions of this Section 5 will thereafter be
applicable to the Option, and the Option shall cease to be
exercisable for shares of Common Stock.
6. Notice of Adjustment. On the happening of an
event requiring an adjustment of the Exercise Price or the number
or kind of securities or other property purchasable hereunder,
the Company shall forthwith give written notice to
____________________ stating the adjusted Exercise Price and the
adjusted number and kind of securities or other property
purchasable hereunder resulting from the event and setting forth
in reasonable detail the method of calculation and the facts upon
which the calculation is based. The Board of Directors of the
Company, acting in good faith, shall determine the calculation.
7. Endorsement on Share Certificates. Any
certificate representing Shares issued pursuant to
____________________'s exercise of the Option shall if so
required bear an appropriate legend in substantially the
following form:
The shares represented by this certificate have
not been registered under the federal Securities
Act of 1933 or the securities laws of any state
and have been issued and sold in reliance upon
certain exemptive provisions of such laws. Such
shares may not be sold or transferred except if,
in the opinion of counsel reasonably acceptable to
the Company, any such sale or transfer would be
pursuant to an effective registration statement
under the applicable state and federal securities
laws or pursuant to an exemption from such
registration.
8. Registration Rights. If at any time after the
date hereof and prior to the exercise of the Option the Company
shall file a registration statement on which the shares issuable
upon exercise of options granted by the Company or the resale of
such stock may be registered, the Company shall use reasonable
efforts to include the shares underlying this Option in such
registration statement.
9. Binding Effect. This Agreement shall be binding
upon and shall inure to the benefit of the Company and
____________________ and their respective heirs, personal
representatives, successors and assigns; provided that the
assignment of this Agreement by ____________________ is expressly
prohibited pursuant to Section 4 above.
10. Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of
Indiana.
11. Information as to Exercise Price. At any time
prior to expiration of the Option, the Company will provide to
____________________, following ____________________'s reasonable
prior written request therefor, complete information with respect
to the Exercise Price and the calculation thereof, and the number
and kind of securities or other property purchasable upon
exercise of the Option.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed effective as of the day and year first
above written.
"COMPANY"
QUANTUM HEALTH RESOURCES, INC.
By: ___________________________
Its:_______________________
____________________ AFFIRMS THAT HE HAS READ AND
UNDERSTANDS THE CONTENTS OF THIS AGREEMENT AND THAT HE ACCEPTS
THE OPTION ON THE TERMS AND CONDITIONS SET FORTH HEREIN.
_______________________________
_______________________________
Social Security Number
Address: ________________________
________________________
EXHIBIT A
_________
OPTION EXERCISE FORM
_____________________
Quantum Health Resources, Inc.
9100 Keystone Crossing
Suite 500
Indianapolis, IN 46250
Reference is hereby made to that certain Stock Option
Agreement dated January ___, 1996, between Quantum Health
Resources, Inc. and ____________________ (the "Agreement").
Capitalized terms used herein shall have the meanings ascribed in
the Agreement.
The undersigned hereby:
1. Irrevocably subscribes for ______ Shares of Common
Stock of the Company at the Exercise Price (as defined in the
Agreement) and encloses payment herewith, in the manner
prescribed by the Agreement, in the amount of $____________ or
______ shares of common stock of the Company.
2. Acknowledges that such shares shall be issued by
the Company pursuant to, and subject to the terms of the
Agreement and the Stock Agreement.
3. Acknowledges and agrees that such Shares shall
bear a legend substantially similar to that described in the
Agreement.
4. Represents and warrants that he is the sole holder
of the Option, that the Option is outstanding, unexpired and
unexercised to the extent necessary for this exercise, and that
the exercise of the Option hereby is in full compliance with the
terms of the Agreement.
5. [IF A PARTIAL EXERCISE] herewith surrenders to the
Company the Agreement for notation of the partial exercise of the
Option, subject to return to the undersigned upon such notation.
6. Requests that a certificate for such Shares of
Common Stock be issued in the name of the undersigned and
delivered to the undersigned at the address set forth below.
Date: ____________________
_____________________________
_____________________________
Social Security Number
Address:
_____________________________
_____________________________