GENESIS HEALTH VENTURES, INC.
AMENDED AND RESTATED EMPLOYEE STOCK OPTION PLAN
1. Purpose of Plan
The purpose of this Amended and Restated Employee Stock Option
Plan (the "Plan") is to provide additional incentive to officers and key
employees of Genesis Health Ventures, Inc. (the "Company") and each present or
future parent or subsidiary corporation by encouraging them to invest in shares
of the Company's common stock, par value $.02 per share ("Common Stock"), and
thereby acquire a proprietary interest in the Company and an increased personal
interest in the Company's continued success and progress, to the mutual benefit
of directors, officers, employees and stockholders.
2. Aggregate Number of Shares
4,500,000 shares of the Company's Common Stock, shall be the
aggregate number of shares which may be issued under this Plan. Notwithstanding
the foregoing, in the event of any change in the outstanding shares of the
Common Stock of the Company by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, transfer of
assets, reorganization, conversion or what the Stock Option Committee,
hereinafter referred to, deems in its sole discretion to be similar
circumstances, the aggregate number and kind of shares which may be issued under
this Plan shall be appropriately adjusted in a manner determined in the sole
discretion of the Stock Option Committee. Reacquired shares of the Company's
Common Stock, as well as unissued shares, may be used for the purpose of this
Plan. Common Stock of the Company subject to options which have terminated
unexercised, either in whole or in part, shall be available for future options
granted under this Plan.
3. Class of Persons Eligible to Receive Options
All officers and key employees of, and consultants and
advisors to, the Company and any present or future Company parent or subsidiary
corporation are eligible to receive an option or options under this Plan,
provided that Incentive Stock Options (as described below) may be issued only to
employees. The individuals who shall, in fact, receive an option or options
shall be selected by the Stock Option Committee, in its sole discretion, except
as otherwise specified in Section 4 hereof. The maximum number of options which
may be granted to any participant in any one year is options for 750,000 shares
of Common Stock subject to appropriate adjustment in the event of any change in
the outstanding shares of the Common Stock of the Company by reason of a stock
dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the Stock
Option Committee deems in its sole discretion to be similar circumstances.
4. Administration of Plan
(a) This Plan shall be administered by the Stock Option
Committee (the "Committee") appointed by the Company's Board of Directors. The
Committee shall consist of a
minimum of two and a maximum of seven members of the Board of Directors, each of
whom shall be a "Non-Employee Director" as defined in Rule 16b-3(b)(3) under the
Securities Exchange Act of 1934, as amended, of the Securities and Exchange
Commission (the "SEC") or any future corresponding rule. The Committee shall, in
addition to its other authority and subject to the provisions of this Plan,
determine which individuals are eligible to receive options under this Plan,
which individuals shall in fact be granted an option or options, whether the
option shall be an incentive stock option or a non-qualified stock option, the
number of shares to be subject to each of the options, the time or times at
which the options shall be granted, the rate of option exercisability, and,
subject to Section 5 hereof, the price at which each of the options is
exercisable and the duration of the option.
(b) The Committee shall adopt such rules for the conduct of
its business and administration of this Plan as it considers desirable. A
majority of the members of the Committee shall constitute a quorum for all
purposes. The vote or written consent of a majority of the members of the
Committee on a particular matter shall constitute the act of the Committee on
such matter. The Committee shall have the right to construe the Plan and the
options issued pursuant to it, to correct defects and omissions and to reconcile
inconsistencies to the extent necessary to effectuate the Plan and the options
issued pursuant to it, and such action shall be final, binding and conclusive
upon all parties concerned. No member of the Committee or the Board of Directors
shall be liable for any act or omission (whether or not negligent) taken or
omitted in good faith, or for the exercise of an authority or discretion granted
in connection with the Plan to a Committee or the Board of Directors, or for the
acts or omissions of any other members of a Committee or the Board of Directors.
Subject to the numerical limitations on Committee membership set forth in
Section 4(a) hereof, the Board of Directors may at any time appoint additional
members of the Committee and may at any time remove any member of the Committee
with or without cause. Vacancies in the Committee, however caused, may be filled
by the Board of Directors, if it so desires.
5. Incentive Stock Options and Non-Qualified Stock Options
(a) Options issued pursuant to this Plan may be either
Incentive Stock Options granted pursuant to Section 5(b) hereof or Non-Qualified
Stock Options granted pursuant to Section 5(c) hereof, as determined by the
Committee. An "Incentive Stock Option" is an option which satisfies all of the
requirements of Section 422A of the Code and the regulations thereunder, and a
Non-Qualified Stock Option is an option which either does not satisfy all of
those requirements or the terms of the option provide that it will not be
treated as an Incentive Stock Option. The Committee may grant both an Incentive
Stock Option and a Non-Qualified Stock Option to the same person, or more than
one of each type of option to the same person. The option price for Incentive
Stock Options issued under this Plan shall be equal at least to the fair market
value (as defined below) of the Company's Common Stock on the date of the grant
of the option. The option price for Non-Qualified Stock Options issued under
this Plan shall be at least equal to the fair market value of the Common Stock
on the date of the grant of the option except that the
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minimum option price may be equal to or greater than 85% of the fair market
value of the Company's Common Stock as of the date of the grant of the option if
the discount is expressly granted in lieu of a reasonable amount of salary or
cash bonus. If an Incentive Stock Option is granted to an individual who, at the
time the option is granted, owns shares of Common Stock equal to more than 10
percent of the total combined voting power of the Common Stock of the Company or
any subsidiary corporation of the Company (a "10% Stockholder"), the option
price shall not be less than 110 percent of the fair market value, as determined
by the Committee in accordance with its interpretation of the requirements of
Section 422A of the Code and the regulations thereunder, of the Company's Common
Stock on the date of grant of the option, and such option shall not be
exercisable after the expiration of five years from the date the option is
granted. The fair market value of the Company's Common Stock on any particular
date shall mean the last reported sale price of a share of the Company's Common
Stock on any stock exchange on which such stock is then listed or admitted to
trading, or on the NASDAQ National Market System, on such date, or if no sale
took place on such day, the last such date on which a sale took place, or if the
Common Stock is not then quoted on the NASDAQ National Market System, or listed
or admitted to trading on any stock exchange, the average of the bid and asked
prices in the over-the-counter market on such date, or if none of the foregoing,
a price determined by the Committee.
(b) Subject to the authority of the Committee set forth in
Section 4(a) hereof, Incentive Stock Options issued pursuant to this Plan shall
be issued substantially in the form set forth in Appendix I hereof, which form
is hereby incorporated by reference and made a part hereof, and shall contain
substantially the terms and conditions set forth therein. Incentive Stock
Options shall not be exercisable after the expiration of ten years (five years
in the case of 10% Stockholders) from the date such options are granted, unless
terminated earlier under the terms of the option. At the time of the grant of an
Incentive Stock Option hereunder, the Committee may, in its discretion, modify
or amend any of the option terms contained in Appendix I for any particular
optionee, provided that the option as modified or amended satisfies the
requirements of Section 422A of the Code and the regulations thereunder. Each of
the options granted pursuant to this Section 5(b) is intended, if possible, to
be an "Incentive Stock Option" as that term is defined in Section 422A of the
Code and the regulations thereunder. In the event this Plan or any option
granted pursuant to this Section 5(b) is in any way inconsistent with the
applicable legal requirements of the Code or the regulations thereunder for an
Incentive Stock Option, this Plan and such option shall be deemed automatically
amended as of the date hereof to conform to such legal requirements, if such
conformity may be achieved by amendment.
(c) Subject to the authority of the Committee set forth in
Section 4(a) hereof, Non-Qualified Stock Options issued pursuant to this Plan
shall be issued substantially in the form set forth in Appendix II hereof, which
form is hereby incorporated by reference and made a part hereof, and shall
contain substantially the terms and conditions set forth therein. Non-Qualified
Stock Options shall expire ten years after the date they are granted, unless
terminated earlier under the option terms. At the time of granting a
Non-Qualified Stock Option hereunder, the Committee may, in its discretion,
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modify or amend any of the option terms contained in Appendix II for any
particular optionee.
(d) Neither the Company nor any of its current or future
parent, subsidiaries or affiliates, nor their officers, directors, stockholders,
stock option plan committees, employees or agents shall have any liability to
any optionee in the event (i) an option granted pursuant to Section 5(b) hereof
does not qualify as an "Incentive Stock Option" as that term is used in Section
422A of the Code and the regulations thereunder; (ii) any optionee does not
obtain the tax treatment pertaining to an Incentive Stock Option; or (iii) any
option granted pursuant to Section 5(c) hereof is an "Incentive Stock Option."
6. Modification, Amendment, Suspension and Termination
Options shall not be granted pursuant to this Plan after
August 1, 2004. The Board of Directors reserves the right at any time, and from
time to time, to modify or amend this Plan in any way, or to suspend or
terminate it, effective as of such date, which date may be either before or
after the taking of such action, as may be specified by the Board of Directors;
provided, however, that such action shall not affect options granted under the
Plan prior to the actual date on which such action occurred. If a modification
or amendment of this Plan is required by the Code or the regulations thereunder
to be approved by the stockholders of the Company in order to permit the
granting of "Incentive Stock Options" (as that term is defined in Section 422A
of the Code and regulations thereunder) pursuant to the modified or amended
Plan, such modification or amendment shall also be approved by the stockholders
of the Company in such manner as is prescribed by the Code and the regulations
thereunder. If the Board of Directors voluntarily submits a proposed
modification, amendment, suspension or termination for stockholder approval,
such submission shall not require any future modifications, amendments (whether
or not relating to the same provision or subject matter), suspensions or
terminations to be similarly submitted for stockholder approval.
7. Effectiveness of Plan
This Plan shall become effective on the date of its adoption
by the Company's Board of Directors, subject however to approval by the holders
of the Company's Common Stock in the manner as prescribed in the Code and the
regulations thereunder. Options may be granted under this Plan prior to
obtaining stockholder approval, provided such options shall not be exercisable
until stockholder approval is obtained.
8. General Conditions
(a) Nothing contained in this Plan or any option granted
pursuant to this Plan shall confer upon any employee the right to continue in
the employ of the Company or any affiliated or subsidiary corporation or
interfere in any way with the rights of the Company or any affiliated or
subsidiary corporation to terminate his employment in any way.
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(b) Corporate action constituting an offer of stock for sale
to any employee under the terms of the options to be granted hereunder shall be
deemed complete as of the date when the Committee authorizes the grant of the
option to the employee, regardless of when the option is actually delivered to
the employee or acknowledged or agreed to by him.
(c) The terms "parent corporation" and "subsidiary
corporation" as used throughout this Plan, and the options granted pursuant to
this Plan, shall (except as otherwise provided in the option form) have the
meaning that is ascribed to that term when contained in Section 422A(b) of the
Code and the regulations thereunder, and the Company shall be deemed to be the
grantor corporation for purposes of applying such meaning.
(d) References in this Plan to the Code shall be deemed to
also refer to the corresponding provisions of any future United States revenue
law.
(e) The use of the masculine pronoun shall include the
feminine gender whenever appropriate.
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APPENDIX I
INCENTIVE STOCK OPTION
To:__________________________________________________________________________
Name
__________________________________________________________________________
Address
__________________________________________________________________________
Date of Grant:____________________________________
You are hereby granted an option, effective as of the date hereof, to
purchase __________ shares of common stock, par value $.02 per share ("Common
Stock"), of Genesis Health Ventures, Inc. (the "Company") at a price of $___ per
share pursuant to the Company's Amended and Restated Employee Stock Option Plan
(the "Plan").
Your option may first be exercised on and after ________, but not
before that time. [On and after _________ and prior to _________, your option
may be exercised for up to % of the total number of shares subject to the option
minus the number of shares previously purchased by exercise of the option (as
adjusted for any change in the outstanding shares of the Common Stock of the
Company by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Stock Option Committee deems in its sole discretion to be
similar circumstances). Each succeeding year thereafter, your option may be
exercised for up to an additional ___% of the total number of shares subject to
the option minus the number of shares previously purchased by exercise of the
option (as adjusted for any change in the outstanding shares of the Common Stock
of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Stock Option Committee deems in its sole
discretion to be similar circumstances).](1) No fractional shares shall be
issued or delivered.
This option shall terminate and is not exercisable after [five/ten]
years from the date of its grant (the "Scheduled Termination Date"), except if
terminated earlier as hereafter provided.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which
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(1) The bracketed portion of this paragraph should be included if the number
of shares which may be acquired upon exercise of the option will increase over
time.
may be evidenced by a check; (b) certificates representing shares of Common
Stock of the Company, which will be valued by the Secretary of the Company at
the fair market value per share of the Company's Common Stock (as determined in
accordance with the Plan) on the last trading day immediately preceding the
delivery of such certificates to the Company, accompanied by an assignment of
the stock to the Company; or (c) any combination of cash and Common Stock of the
Company valued as provided in clause (b). Any assignment of stock shall be in a
form and substance satisfactory to the Secretary of the Company, including
guarantees of signature(s) and payment of all transfer taxes if the Secretary
deems such guarantees necessary or desirable.
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by the Company or
a Company subsidiary corporation is terminated other than by reason of (i)
disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder, in which case your
option will terminate one year from the onset of disability, or death (but in no
event later than the Scheduled Termination Date), whether such termination be
voluntary or not. After the date your employment is terminated, as aforesaid,
you may exercise this option only for the number of shares which you had a right
to purchase and did not purchase on the date your employment terminated. If you
are employed by a Company subsidiary corporation, your employment shall be
deemed to have terminated on the date your employer ceases to be a Company
subsidiary corporation, unless you are on that date transferred to the Company
or another Company subsidiary corporation. Your employment shall not be deemed
to have terminated if you are transferred from the Company to a Company
subsidiary corporation, or vice versa, or from one Company subsidiary
corporation to another Company subsidiary corporation.
If you die while employed by the Company or a Company subsidiary
corporation, your legatee(s), distributee(s), executor or administrator, as the
case may be, may, at any time within one year after the date of your death (but
in no event later than the Scheduled Termination Date), exercise the option as
to any shares which you had a right to purchase and did not purchase during your
lifetime. If your employment by the Company or a Company subsidiary corporation
is terminated by reason of your becoming disabled (within the meaning of Section
22(e)(3) of the Code and the regulations thereunder), you or your legal guardian
or custodian may at any time within one year after the date of such termination
(but in no event later than the Scheduled Termination Date), exercise the option
as to any shares, which you have a right to purchase and did not purchase prior
to such termination. Your executor, administrator, guardian or custodian must
present proof of his authority satisfactory to the Company prior to being
allowed to exercise this option.
In the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Stock Option Committee deems in its sole
discretion to be similar circumstances, the number and kind of shares subject to
this option and the option price of such shares shall be
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appropriately adjustedin a manner to be determined in the sole discretion of the
Stock Option Committee.
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a stockholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the stockholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state or local regulatory bodies or
agencies and securities exchanges as the Company may deem necessary or
desirable; or
(c) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale hereof, may violate a federal, state, local or securities
exchange rule, regulation or law, or may cause the Company to be legally
obligated to issue or sell more shares than the Company is legally entitled to
issue or sell.
The following two paragraphs shall be applicable if, on the date of
exercise of this option, the Common Stock to be purchased pursuant to such
exercise has not been registered under the Securities Act of 1933, as amended,
and under applicable state securities laws, and shall continue to be applicable
for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, representations, acknowledgments and agreements as the
Company may, in its sole
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discretion, deem advisable to avoid any violation of federal, state, local or
securities exchange rule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
applicable state securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement under
the Securities Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of an opinion of counsel acceptable to the Company that
said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of the Company and you that this option shall, if
possible, be an "incentive stock option" as that term is used in Section 422A of
the Code and the regulations thereunder. In the event this option is in any way
inconsistent with the legal requirements of the Code or the regulations
thereunder for an "incentive stock option," this option shall be deemed
automatically amended as of the date hereof to conform to such legal
requirements, if such conformity may be achieved by amendment.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the subject matter
hereof and no amendment, modification or waiver of this option, in whole or in
part, shall be binding upon the Company unless in writing or signed by the
President of the Company. This option and the performances of the parties
hereunder shall be construed in accordance with and governed by the laws of the
Commonwealth of Pennsylvania.
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Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
GENESIS HEALTH VENTURES, INC.
By:_____________________________________
I hereby acknowledge receipt of a copy of the foregoing stock option
and, having read it hereby signify my understanding of, and my agreement with,
its terms and conditions.
________________________________________ ________________________________
(Signature) (Date)
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APPENDIX II
NON-QUALIFIED STOCK OPTION
To:___________________________________________________________________________
Name
___________________________________________________________________________
Address
___________________________________________________________________________
Date of Grant:______________________________________
You are hereby granted an option, effective as of the date hereof, to
purchase _________ shares of common stock, par value $.02 per share ("Common
Stock"), of Genesis Health Ventures, Inc. (the "Company") at a price of $____
per share pursuant to the Company's Amended and Restated Employee Stock Option
Plan (the "Plan").
Your option may first be exercised on and after _______, but not before
that time. [On and after _______ and prior to ______, your option may be
exercised for up to ___% of the total number of shares subject to the option
minus the number of shares previously purchased by exercise of the option (as
adjusted for any change in the outstanding shares of the Common Stock of the
Company by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Stock Option Committee deems in its sole discretion to be
similar circumstances). Each succeeding year thereafter, your option may be
exercised for up to an additional % of the total number of shares subject to the
option minus the number of shares previously purchased by exercise of the option
(as adjusted for any change in the outstanding shares of the Common Stock of the
Company by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Stock Option Committee deems in its sole discretion to be
similar circumstances).](1) No fractional shares shall be issued or delivered.
This option shall terminate and is not exercisable after ten years from
the date of its grant (the "Scheduled Termination Date"), except if terminated
earlier as hereafter provided.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office,
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The bracketed portion of this paragraph should be included if the number
of shares which may be acquired upon exercise of the option will increase over
time.
accompanied by payment of the option price for the total number of shares you
specify that you wish to purchase. The payment may be in any of the following
forms: (a) cash, which may be evidenced by a check; (b) certificates
representing Common Stock of the Company which will be valued by the Secretary
of the Company at the fair market value per share of the Company's Common Stock
(as determined in accordance with the Plan) on the last trading day immediately
preceding the delivery of such certificates to the Company, accompanied by an
assignment of the stock to the Company; or (c) any combination of cash and
Common Stock of the Company valued as provided in clause (b). Any assignment of
stock shall be in a form and substance satisfactory to the Secretary of the
Company, including guarantees of signature(s) and payment of all transfer taxes
if the Secretary deems such guarantees necessary or desirable.
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by the Company or
a Company subsidiary corporation is terminated other than by reason of (i)
disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder, in which case your
option will terminate one year from the onset of disability, or death (but in no
event later than the Scheduled Termination Date), whether such termination be
voluntary or not. After the date your service or employment is terminated, as
aforesaid, you may exercise this option only for the number of shares which you
had a right to purchase and did not purchase on the date you ceased to be a
director or your employment terminated. If you are employed by a Company
subsidiary corporation, your employment shall be deemed to have terminated on
the date your employer ceases to be a Company subsidiary corporation, unless you
are on that date transferred to the Company or another Company subsidiary
corporation. Your employment shall not be deemed to have terminated if you are
transferred from the Company to a Company subsidiary corporation, or vice versa,
or from one Company subsidiary corporation to another Company subsidiary
corporation.
If you die while employed by the Company or a Company subsidiary
corporation, your legatee(s), distributee(s), executor or administrator, as the
case may be, may, at any time within one year after the date of your death (but
in no event later than the Scheduled Termination Date), exercise the option as
to any shares which you had a right to purchase and did not purchase during your
lifetime. If your service with the Company or a Company parent or subsidiary
corporation is terminated by reason of your becoming disabled (within the
meaning of Section 22(e)(3) of the Code and the regulations thereunder), you or
your legal guardian or custodian may at any time within one year after the date
of such termination (but in no event later than the Scheduled Termination Date),
exercise the option as to any shares which you had a right to purchase and did
not purchase prior to such termination. Your executor, administrator, guardian
or custodian must present proof of his authority satisfactory to the Company
prior to being allowed to exercise this option.
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In the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Stock Option Committee deems in its sole
discretion to be similar circumstances, the number and kind of shares subject to
this option and the option price for such shares shall be appropriately adjusted
in a manner to be determined in the sole discretion of the Stock Option
Committee.
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, tour legal guardian or custodian in the event of
disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a stockholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of exercise of this
option during any period of time in which the Company deems, in its sole
discretion, that such delivery may not be consummated without violating a
federal, state, local or securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the stockholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as the Company may deem necessary or
desirable; or
(c) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale thereof, may violate a federal, state, local or
securities exchange rule, regulation or law, or may cause the Company to be
legally obligated to issue or sell more shares than the Company is legally
entitled to issue or sell.
The following two paragraphs shall be applicable if, on the date of
exercise of this option, the Common Stock to be purchased pursuant to such
exercise has not been registered under the Securities Act of 1933, as amended,
and under applicable state securities laws, and shall continue to be applicable
for so long as such registration has not occurred:
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(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, representations, acknowledgments and agreements as the
Company may, in its sole discretion, deem advisable to avoid any violation of
federal, state, local or securities exchange rule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
applicable state securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement under
the Securities Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of an opinion of counsel acceptable to the Company that
said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of the Company and you that this option shall not
be an "incentive stock option" as that term is used in Section 422A of the Code
and the regulations thereunder.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the
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subject matter hereof and no amendment, modification or waiver of this option,
in whole or in part, shall be binding upon the Company unless in writing and
signed by the President of the Company. This option and the performances of the
parties hereunder shall be construed in accordance with and governed by the laws
of the Commonwealth of Pennsylvania.
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
GENESIS HEALTH VENTURES, INC.
By:_____________________________________
I hereby acknowledge receipt of a copy of the foregoing stock option and, having
read it hereby signify my understanding of, and my agreement with, its terms
and conditions.
__________________________________________ _________________________________
(Signature) (Date)
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