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Exhibit 10.2
10,000 SHARES
PACE MEDICAL, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
NON-QUALIFIED STOCK OPTION AGREEMENT dated as of May 1, 1998 by and between
PACE MEDICAL, INC., a Massachusetts corporation (hereinafter called the
"Corporation"), and DRUSILLA F. HAYS (hereinafter called the "Optionee").
WHEREAS, the Corporation desires to afford the Optionee the opportunity to
purchase shares of its Common Stock;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereby mutually
covenant and agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth herein,
the Corporation grants to the Optionee the right and option to purchase from the
Corporation at a price of $.75 per share up to but not exceeding in the
aggregate Ten Thousand (10,000) shares of the Corporation's Common Stock, par
value $.01 per share (the "Common Stock").
2. TERM. This Agreement and the option granted hereby shall terminate five
(5) years from the date hereof but shall be subject to earlier termination as
herein provided. Upon termination, the option granted hereby shall thereupon
expire and thereafter shall not be exercisable.
3. EXERCISE OF OPTION. (a) The option hereby granted may be exercised at
any time or from time to time in whole or in part during the term hereof.
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(b) Upon any one exercise of the option granted hereby, the Optionee
or her legal representative may purchase all or any part of the shares of Common
Stock as to which such option is then exercisable, provided however, that no
less than one hundred (100) shares may be purchased upon any one exercise of
such option unless the number of shares purchased at such time is the total
number of shares in respect of which such option is then exercisable.
(c) The option hereby granted shall be exercised by the Optionee
delivering to the Clerk of the Corporation, from time to time, on any business
day, written notice specifying the number of shares the Optionee then desires to
purchase, together with cash or a certified or bank cashier's check to the order
of the Corporation for an amount in United States dollars equal to the option
price of such shares.
(d) Upon each such exercise, a certificate representing the number of
shares purchased shall be issued in the name of the person or persons exercising
the option granted hereby and delivered to the Optionee.
4. RESTRICTIONS ON ISSUANCE OF SHARES. (a) Notwithstanding the
provisions of Section 2 hereof, the Corporation may delay the issuance of
shares covered by the exercise of the option granted hereby and the delivery of
a certificate for such shares until
(i) one of the following conditions shall be satisfied:
(A) the shares with respect to which the option granted
hereby has been exercised are at the time of the
issuance
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of such shares effectively registered under the
Securities Act of 1933 as now in force or hereafter
amended; or
(B) a no-action letter in respect to the issuance of such
shares shall have been obtained by the Corporation from
the Securities and Exchange Commission; or
(C) counsel for the Corporation shall have given an
opinion, which opinion shall not be unreasonably
conditioned or withheld, that such shares are exempt
from registration under the Securities Act of 1933 as
now in force or hereafter amended; and
(ii) one of the following conditions shall be satisfied:
(A) approval shall have been obtained from such federal and
state governmental agencies, other than the Securities
and Exchange Commission, as may be required under any
applicable law, rule or regulation; or
(B) counsel for the Corporation shall have given an
opinion, which opinion shall not be unreasonably
conditioned or withheld, that no such approval is
required.
(b) It is intended that all exercises of the option granted
hereby shall be effective, and the Corporation shall use its best efforts to
bring about compliance with the above conditions within a reasonable time,
except that the Corporation shall be under no obligation to cause a registration
statement or a post-effective amendment to any registration statement to be
prepared at its expense or to comply with Regulation A or any other exemption
under the Securities Act of 1933 as now in force or hereafter amended, solely
for the purpose of covering the issuance of shares in respect of which the
option granted hereby may be exercised. Therefore, the Optionee shall not be
entitled to any
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rights in any shares of Common Stock to be issued under the option granted
hereby until delivery of a certificate therefor by the Corporation.
5. PURCHASE FOR INVESTMENT. (a) Unless the shares to be issued upon
exercise of the option granted hereby have been effectively registered under the
Securities Act of 1933 as now in force or hereafter amended, the Corporation
shall be under no obligation to issue any shares covered by such option unless
the person who exercises such option, in whole or in part, shall give a written
representation to the Corporation satisfactory in form and scope to the
Corporation's counsel and upon which, in the opinion of such counsel the
Corporation may reasonably rely, that he/she is acquiring the shares issued to
him or her pursuant to such exercise of such option as an investment and not
with a view to, or for sale in connection with, the distribution of any such
shares.
(b) The certificate for each share of Common Stock issued pursuant to
such exercise of the option granted hereby may bear a reference to the
investment representation made in accordance with this Section 5 and to the fact
that no registration statement has been filed with the Securities and Exchange
Commission in respect to such shares.
(c) In the event that the Corporation shall nevertheless, deem it
necessary or desirable to register under the Securities Act of 1933 or other
applicable statutes any shares with respect to which the option granted hereby
shall have been exercised, or to qualify any such shares for exemption from the
Securities Act of 1933 or other applicable statutes, then the Corporation shall
take
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such action at its own expense and may require from the Optionee such
information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for such
purpose and may require reasonable indemnity to the Corporation and its officers
and directors from such holder against all losses, claims, damages, and
liabilities arising from such use of the information so furnished and caused by
any untrue statement of any material fact therein or caused by the omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.
6. TERMINATION OF BUSINESS RELATIONSHIP. (a) The option hereby granted
shall terminate and be of no force or effect in the event the Optionee ceases to
serve as an employee, consultant, officer or director of the Corporation or any
subsidiary of the Corporation (such service is described herein as maintaining
or being involved in a "Business Relationship with the Corporation") for any
reason, provided however, that in the event of the termination of the Optionee's
employment such option may be exercised (to the extent exercisable by the
Optionee at the date of such termination) at any time within three (3) months
after the date of such termination, but in any event not later than five (5)
years from the date hereof and provided further, however, that if the
termination of the Optionee's Business Relationship with the Corporation shall
result from the Optionee's death, such option may be exercised (to the extent
exercisable by the Optionee at the date of her death) by the Optionee's personal
representative or by the person or persons
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to whom such option shall have been transferred by will or by the laws of
descent and distribution, at any time within three (3) months after the date of
the Optionee's death but in any event not later than five (5) years from the
date hereof.
(b) As used herein, the term "subsidiary" shall mean any present or
future corporation which would be a "subsidiary corporation" of the Corporation,
as the term is defined in Section 424 of the Internal Revenue Code of 1986.
(c) Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the estate, personal representative, or beneficiary to whom this
option may be transferred by will or by the laws of descent and distribution, it
shall be deemed to include such person.
7. ASSIGNABILITY. The option granted hereby is not assignable or
transferable by the Optionee otherwise than by will or the laws of descent and
distribution and is exercisable during the Optionee's lifetime only by her. No
assignment or transfer of such option, or of the right represented thereby,
whether voluntary or involuntary, by operation of law or otherwise, except by
will or the laws of descent and distribution, shall vest in the assignee or
transferee any interest or right herein whatsoever, and immediately upon any
attempt to assign or transfer such option the same shall terminate and be of no
force or effect.
8. LIMITATION ON RIGHTS. (a) The Optionee shall not be deemed for any
purpose to be a shareholder of the Corporation with respect to any shares as to
which the option granted hereby shall not have been exercised and payment and
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issuance made as herein provided. Nothing herein shall confer on the Optionee
any right to continue in the employ of the Corporation or its subsidiaries, nor
affect the right of the Corporation or its subsidiaries to terminate the
Optionee's employment at any time without liability to the Corporation.
(b) The existence of the option granted hereby shall not affect in any
way the right or power of the Corporation or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Corporation's capital structure or its business, or any merger or
consolidation of the Corporation, or any issue of bonds, debentures, preferred
or prior preference stocks ahead of or convertible into, or otherwise affecting
the Common Stock or the rights thereof, or the dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. (a) The shares with respect
to which the option granted hereby is granted are shares of the Common Stock as
constituted on the date of this Agreement, but if and whenever, prior to the
delivery by the Corporation of all of the shares of Common Stock with respect to
which this option is granted, the Corporation shall effect a subdivision or
consolidation of shares, or other capital readjustment, or the payment of a
stock dividend, or other increase or decrease of the number of shares of Common
Stock outstanding, without receiving compensation therefor in money, services or
property, then
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(i) in the event of any increase in the number of such shares
outstanding, the number of shares of Common Stock then remaining
subject to option hereunder shall be proportionately increased
(except that any fraction of a share resulting from any such
adjustment shall be excluded from the operation of this
Agreement), and the cash consideration payable per share shall be
proportionately reduced, and
(ii) in the event of a reduction in the number of such shares
outstanding, the number of shares of Common Stock then remaining
subject to option hereunder shall be proportionately reduced
(except that any fractional shares resulting from any such
adjustment shall be excluded from the operation of this
Agreement), and the cash consideration payable per share shall be
proportionately increased.
(b) In the event of (i) any merger of one or more other corporations
with the Corporation or any consolidation of the Corporation and one or more
other corporations in which the Corporation is not the surviving or resulting
corporation or (ii) any merger of one or more other corporations with the
Corporation or any consolidation of the Corporation and one or more other
corporations in which the Corporation shall be the surviving or resulting
corporation and the then issued and outstanding shares of Common Stock shall be
converted into and/or exchanged for cash and/or any securities of any other
corporation, then, in any such case and without the need for any further action
by the Corporation or its stockholders, this Agreement and the option granted
hereby shall terminate as of the effective time of the merger or consolidation
and thereupon be of no force or effect, and the holder hereof shall, at no
additional cost, be entitled solely to receive (at such effective time and
otherwise in the form and manner provided by the terms of the agreement of
merger or consolidation) an amount of the consideration payable under the terms
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of such agreement equal to the excess of (i) the aggregate consideration (valued
in accordance with the terms thereof) to which the holder hereof would have been
entitled pursuant to the terms of such agreement if, immediately prior to such
effective time, the holder hereof had been the holder of record of a number of
shares of Common Stock equal to the aggregate number of shares of Common Stock
as to which this Agreement was exercisable immediately prior to such effective
time over (ii) the aggregate exercise price payable hereunder with respect to
such number of shares. In the event of any other merger or consolidation in
which the Corporation is the surviving or resulting corporation, this Agreement
and the option granted hereby shall remain in full force and effect in
accordance with its terms. In the event of any dissolution or liquidation of the
Corporation, this Agreement and the option granted hereby shall terminate and
thereupon be of no force or effect.
10. MISCELLANEOUS. (a) This Agreement is the sole and only agreement
between the parties hereto with respect to the subject matter hereof and may not
be modified or amended except by a subsequent written agreement duly executed by
the parties hereto.
(b) The Corporation shall at all times during the term of the option
granted hereby reserve and keep available such number of shares of Common Stock
as will be sufficient to satisfy the requirements of such option.
(c) Any notice which either party hereto may be required or permitted
to give to the other shall be in writing, and may be delivered personally or by
mail,
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postage prepaid, addressed as follows: To the Corporation (Attention to the
Clerk), at its principal office at 391 Totten Pond Road, Waltham, Massachusetts
02154, or at such other address as the Corporation, by notice to the Optionee,
may designate in writing from time to time; and to the Optionee at her address
as the Optionee, by notice to the Clerk of the Corporation, may designate in
writing from time to time.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Corporation has caused this Non-Qualified
Stock Option Agreement to be executed by its duly-authorized officer, and the
Optionee has hereunto set her hand and seal, all on the day and year first above
written.
PACE MEDICAL, INC.
By /s/ Ralph E. Hanson
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Ralph E. Hanson, President
/s/ Drusilla F. Hays
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Drusilla F. Hays - Optionee
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