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Exhibit 10.14
MEDVEST HOLDINGS CORPORATION
2002 STOCK OPTION PLAN
MedVest Holdings Corporation hereby adopts a stock option plan for the
benefit of certain persons and subject to the terms and provisions set forth
below.
1. DEFINITIONS. The following terms shall have the meanings set forth
below whenever used in this instrument:
(a) "Act" shall mean the Securities Exchange Act of 1934, as amended.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Change in Control" shall mean:
(i) Any "person," including a "group" [as used in Act Sections
13(d) and 14(d)(2) but excluding the Company, any of its
Subsidiaries or any "person" who immediately before the
Effective date in Section 2 is a "beneficial owner," as
defined in Rule 13(d)(3) of the Act] becomes the "beneficial
owner" [as defined in Section 13(d)(3) under the Act),
directly or indirectly, of securities of the Company
representing more than 50 percent of the combined voting power
of the Company's then outstanding securities. However, a
Change in Control under this section will be determined
without regard to:
(I) Any acquisition by or through an employee benefit plan
maintained by the Company or any Subsidiary;
(II) Any acquisition through a stock option plan (including
this Plan) maintained by the Company or any Subsidiary;
(III) Any acquisition through inheritance, gift, bequest or
by operation of law on the death of an individual or by
distribution from a trust in existence on the Effective
date in Section 2; or
(IV) The redemption of Shares by the Company or the
acquisition of Shares by any Subsidiary;
(ii) The Company's shareholders approve a definitive agreement:
(I) To merge or consolidate the Company with or into
another corporation in which the Company is not the
continuing or surviving corporation or pursuant to
which Shares would be converted into cash, securities
or other property of another corporation, other than a
merger of the Company in which holders of Shares
immediately before the merger have the same
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proportionate ownership of shares of the surviving
corporation immediately after the merger as immediately
before; or
(II) To sell or otherwise dispose of all or substantially
all of the Company's assets.
(iii) There is a change in a majority of the Board within a 12-month
period; provided, however, that any new director whose
nomination for election by the Company's shareholders was
approved, or who was appointed or elected to the Board by, the
vote of two-thirds of the directors then still in office who
were in office at the beginning of the 12-month period will
not be counted when determining if there has been a change in
the majority of the Board.
Notwithstanding the foregoing, a "Change in Control" shall not include
any transaction or shareholder approval of any transaction involving
the sale of all or substantially all of the assets of the Company to,
or the merger of or consolidation of the Company with either of
RoundTable Partners or One Equity Partners or any entity for which
RoundTable or One Equity has provided equity capital (the "V.C.
Business Opportunity") or the acquisition of all or substantially all
of the assets of the V.C. Business Opportunity in a transaction that
does not satisfy the provisions of subparagraph (i) above.
(d) "Code" shall mean the United States Internal Revenue Code of 1986, as
amended, and any lawful regulations and pronouncements issued
thereunder or provisions of successor United States revenue laws.
(e) "Committee" shall mean the Board, or, if so determined by the Board,
shall be a committee comprised of not less than three (3) directors,
one of whom shall be the Chairman of the Board, and which shall also
constitute a "compensation committee" within the meaning of Treas.
Reg. Section 1.162-27(c)(4). In the event requirements of the Act or
the Code or any rules, regulations or other rulings or directives
promulgated thereunder require non-employee directors, the Committee
shall be comprised of at least three (3) persons, none of whom (1) is
an employee of the Company or any Subsidiary as defined in Act Section
16 or (2) is receiving remuneration in any capacity other than as a
director, except as permitted under Treas. Reg. Section 1.162-27(e)(3)
and any rulings issued under that regulation.
(f) "Common Stock" shall mean common shares, without par value, of the
Company.
(g) "Company" shall mean MedVest Holdings Corporation, an Ohio
corporation, and any successor thereto which shall maintain this Plan.
(h) "Constructive Termination" shall mean a voluntary termination by an
Optionee who is an Employee following:
(i) a permanent reduction in the Employee's title, duties,
responsibilities or status, as compared to either (I) his
title, duties responsibilities or status
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before a Change in Control; or (II) any enhanced or increased
title, duties, responsibilities or status occurring after the
Change in Control;
(ii) the permanent assignment to the Employee of duties
inconsistent with (I) the Employee's office on the date of the
Change in Control; (II) any enhanced or increased duties
occurring after the Change in Control; or (III) any more
senior office to which he or she is promoted after the Change
in Control;
(iii) a 15 percent (or larger) reduction of the annualized base
salary rate or total annualized salary rate (including
bonuses, employee benefits and fringe benefits) the Employee
was receiving from the Company and Subsidiaries immediately
before the Change in Control or any increased annualized base
salary rate or total annualized salary rate he or she receives
from the Company and Subsidiaries after the Change in Control;
or
(iv) a requirement that the Employee relocate his or her principal
office or worksite (or the indefinite assignment of the
Employee) to a location more than 50 miles distant from (I)
the principal office or worksite to which he or she was
permanently assigned immediately before the Change in Control;
or (II) any location to which the Employee is permanently
assigned, with his or her consent, after the Change in
Control.
Any comparison of an Employee's duties, responsibilities or status
under this section will be based on those that are permanently
assigned to the Employee and not on temporarily assigned duties,
responsibilities or status.
(i) "Disability" shall mean the Optionee's inability to perform his or her
normal duties for a period of at least 6 months due to a physical or
mental infirmity.
(j) "Eligible Director" shall mean, on any date, a person who: (I) its an
elected member of the Board (or has been appointed to the Board to
fill an unexpired term and will continue to serve at the expiration of
that term only if elected by shareholders, and (Il) also is not an
Employee.
(k) "Employee" shall mean any individual who is:
(i) A common law employee of the Company or of any of its
Subsidiaries; or
(ii) A "leased employee" who is:
(I) treated as a common law employee of the Company or any
Subsidiary; and
(II) performs services for the Company or any Subsidiary
under the terms of an agreement between the Company or
a Subsidiary and an independent entity ("Lessor") under
which:
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(A) The Lessor is obliged to remit payroll taxes on
the compensation paid to the leased employee by
the Company or a Subsidiary;
(B) The Company has the exclusive right to grant stock
options to the leased employee with respect to the
services performed for the Company or any
Subsidiary;
(C) The Company or Subsidiary may hire, fire and
control the activities of the leased employee
(whether for not in conjunction with the Lessor);
(D) The Company or Subsidiary' has the exclusive right
to establish the economic value of the services
performed by the leased employee (including wages
and the number of Options and value of stock
compensation to be granted);
(E) The leased employee may participate, on the same
basis as other Employees, in all employee benefit
plans maintained by the Company for Employees; and
(F) The Company or Subsidiary agrees to remit to the
Lessor funds equal to the full compensation
(including applicable payroll taxes), payable to
the leased employee on or before a date specified
in the agreement.
(l) "Fair Market Value" shall mean, on any date, fair market value
determined by the Committee in good faith, in accordance with the
provisions of Section 12 hereof and applied consistently to all
Optionees. Notwithstanding the foregoing, if the Shares are listed on
the New York Stock Exchange or on another recognized market or
quotation system on which the trading prices of the Shares are quoted
("Exchange"), their Fair Market Value will be the closing price of the
Shares as reported on the Exchange on the date Fair Market Value is
being established or, if there are no Share transactions on that date,
the closing price on the most recent preceding date on which Share
transactions were reported.
(m) "Option" shall mean a right granted under, and in accordance with, the
terms of this Plan to purchase Common Stock at a stated price for a
specified period of time. For purposes of this Plan, "Options" shall
mean non-qualified stock options that are not intended to meet the
requirements of Code Section 422.
(n) "Optionee" shall mean an Employee or Eligible Director who is granted
an Option. Where the context requires, the term "Optionee" shall
include the beneficiary of an Employee or Eligible Director who has
been granted an Option.
(o) "Option Agreement" shall mean an agreement entered into between the
Company anti an Optionee through which the Optionee agrees to the
terms and conditions of and affecting Options.
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(p) "Plan" shall mean the MedVest Holdings Corporation 2002 Stock Option
Plan, as originally adopted and as it may be amended thereafter.
(q) "Shares" shall mean shares of Common Stock.
(r) "Subsidiary" shall mean any domestic or foreign corporation, if at
least 50% of the total combined voting power of all classes of stock
is owned directly or indirectly by the Company, or any partnership or
other unincorporated entity, if at least 50% of the capital or profits
interest is owned directly or indirectly by the Company.
2. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective on May 1,
2002, subject to approval by holders of a majority of the outstanding shares of
voting capital stock of the Company entitled to vote thereon represented in
person or by proxy at a meeting of shareholders. In the event that such
shareholder approval has not occurred on or before December 31, 2002, the Plan
and any Options granted hereunder shall be null and void. If, however, the Plan
is so approved, subject to the provisions of Section 8, no further shareholder
approval shall be required with respect to the granting of any Options pursuant
to the Plan.
3. ADMINISTRATION OF THE PLAN. This Plan shall be administered by the
Committee. A majority of the Committee shall constitute a quorums, and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by all Committee members, shall be acts of
the Committee. Subject to the terms and conditions of the Plan, the Committee
shall have sole and absolute discretion to:
(a) select the Employees and Eligible Directors to whom Options will be
granted;
(b) determine the number of Shares subject to any Option;
(c) determine the time or times when Options will be granted;
(d) determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Option granted hereunder including, but not limited
to, the option price of the Shares subject to an Option, the time or
times when an Option may be exercised and the duration of the exercise
period, and the form of consideration to paid in satisfaction of the
option price, based in each case on such factors as the Committee
shall determine, in it sole and absolute discretion;
(e) prescribe and approve the form of the Option Agreements governing the
Options which are granted under the Plan;
(f) adopt, amend and rescind such rules and regulations as, in the
Committee's sole and absolute discretion, may be advisable in the
administration of the Plan; and
(g) construe and interpret the Plan, the rules, regulations, Option
Agreements and other instruments evidencing and governing Options
granted under the Plan and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
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Any decision made or action taken by the Committee in connection with the
administration, interpretation, and implementation of the Plan and of its rules
and regulations shall, to the extent permitted by law, be conclusive and binding
upon all Optionees and other persons for all purposes. Neither the Committee nor
any of its members shall be liable for any act taken by the Committee or any
Committee member pursuant to the Plan. No member of the Committee shall be
liable for the act of any other member.
4. PERSONS ELIGIBLE FOR OPTIONS. Subject to the terms of this Plan,
Options may be granted from time to time in the discretion of the Committee to
such Employees and Eligible Directors as are designated by the Committee. The
Committee may grant more than one Option to the same Employee or Eligible
Director. Options granted to different Optionees need not have the same terms
and conditions. No Option will be awarded unless and until the prospective
Optionee executes an Option Agreement in such form as the Committee may require.
5. SHARES SUBJECT TO THE PLAN. Subject to the provisions this Section,
the aggregate number of Shares for which Options may be granted under the Plan
shall be two million (2,000,000). Either treasury or authorized and unissued
Shares, or both, in such amounts, within the maximum limits of the Plan, as the
Committee shall from time to time determine, may be so issued. All Shares which
are the subject of any lapsed, expired or terminated Options shall be available
for reoffering under the Plan. If an Option granted under this Plan is exercised
pursuant to the terms and conditions determined by the Committee under
Subsection 7(d), any Shares which are the subject thereof shall not thereafter
be available for reoffering under the Plan and shall count against the maximum
number of Shares that may be granted under the Plan.
In the event that subsequent to the date of effectiveness of the Plan, the
outstanding Shares are, as a result of a stock split, stock dividend,
combination or exchange of shares, exchange for other securities,
reclassification, reorganization, redesignation, merger, consolidation,
recapitalization, spin-off, split-off, split-up or other such change (including,
without limitation, any transaction described in Section 424(a) of the Code) or
a special dividend or other distribution to the Company's shareholders,
increased or decreased or changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company, then (i) there shall
automatically be substituted for each Share subject to a then-outstanding and
unexercised Option granted under the Plan and each Share available for
additional grants of Options under the Plan the number and kind of shares of
stock or other securities into which each outstanding Share shall be exchanged,
(ii) the option price per Share or unit of securities shall be increased or
decreased proportionately so that the aggregate purchase price for the
securities subject to the Option shall remain the same as immediately prior to
such event, and (iii) the Committee shall make such other adjustments to the
securities subject to Options, the provisions of the Plan, and Option Agreements
as may be appropriate or equitable, in order to prevent dilution or enlargement
of Option rights and in accordance with the provisions of Section 424(a) of the
Code to the extent applicable, and any such adjustment shall be final, binding
and conclusive as to each Optionee. Any such adjustment may, in the sole and
absolute discretion of the Committee, provide for the elimination of fractional
shares.
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6. OPTION PROVISIONS.
(a) OPTION PRICE. The option price per Share under the Plan shall be
determined by the Committee at the time of grant. The date on which
the Committee approves the granting of an Option shall be deemed, for
all purposes, to be the date on which the Option is granted.
(b) PERIOD OF OPTION. The Committee shall determine when each Option is to
expire; provided that no Option shall be exercisable after ten (10)
years have elapsed from the date upon which the Option is granted.
Each Option shall be subject to earlier termination as provided in
this Section.
(c) LIMITATION ON EXERCISE AND TRANSFER OF OPTION. Except as otherwise
provided herein with respect to an Optionee's death, only the Optionee
may exercise an Option; provided that a guardian or other legal
representative who has been duly appointed for such Optionee may
exercise an Option on behalf of the Optionee. No Option granted
hereunder shall be transferable other than by the Last Will and
Testament of the Optionee or, if the Optionee dies intestate, by
applicable laws of descent and distribution. No Option granted
hereunder may be sold, alienated, pledged or hypothecated or be
subject to execution, attachment or similar process.
(d) CONDITIONS GOVERNING EXERCISE OF OPTION. The Committee may, in its
sole and absolute discretion, either require that, prior to the
exercise of any Option granted hereunder, the Optionee shall have been
an employee of the Company or a Subsidiary for a specified period of
time after the date such Option was granted, or make any Option
granted hereunder immediately exercisable. Each Option shall be
subject to such additional restrictions or conditions with respect to
the right to exercise and the time and method of exercise as shall be
prescribed by the Committee. Upon satisfaction of any such conditions,
the Option may be exercised in whole or in part at any time during the
Option period, but this right of exercise shall be limited to whole
Shares, unless the Committee shall otherwise provide. Options shall be
deemed exercised by the Optionee when (i) written notice of the
exercise of the Option and the number of Shares with respect to which
the Option is being exercised has been given by a person entitled to
exercise the Option to the Secretary of the Company at its principal
office, (ii) full payment for the Shares with respect to which the
Option is exercised has been received by the Company, which shall
consist of any consideration and method of payment permitted by the
Committee, and (iii) appropriate arrangements with the Company with
respect to income tax withholding, as required, have been made, which
arrangements may include, in lieu of other withholding arrangements,
(I) the Company withholding from issuance to the Optionee such number
of Shares otherwise issuable upon exercise of the Option as the
Company and the Optionee may agree, or (II) with the consent of the
Committee, the Optionee's delivery to the Company of Shares having a
Fair Market Value on the date the Option is exercised equal to that
portion of the withholding obligation for which payment in cash is not
made. Such notice shall be deemed delivered when deposited in the
mail.
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(e) WAIVER BY COMMITTEE OF CONDITIONS GOVERNING EXERCISE OF OPTION. The
Committee may, in its sole and absolute discretion, waive any
restrictions or conditions set forth in an Option Agreement concerning
an Optionee's right to exercise any Option and/or the time and method
of exercise.
(f) CHANGE IN CONTROL.
(i) Notwithstanding anything in subsections (a) through (e) to the
contrary, in the event of a Change in Control, all then
outstanding and exercisable Options shall become fully vested
and each Option shall be cancelled as of the date of the
Change of Control in exchange for a payment in cash (or its
equivalent) equal to the difference between (I) the Shares'
Fair Market Value (disregarding the effect of the provisions
of Sections 7 and 8(c)); and (II) the Options' exercise price.
(ii) Subject to Section 7(b), no vesting, acceleration,
cancellation, cashout or other payment under Section 6(f)(i)
will occur with respect to any Option or class of Options if.
(I) the Committee reasonably determines in good faith
before the Change in Control that Options will be
honored or assumed by the new controlling entity or
person; and that new rights will be substituted
("Alternative Option") by the new controlling person or
entity immediately after the Change in Control; and
(II) The Alternative Option:
(A) is based on stock which is, or within 60 days
after the Change in Control will be, traded on an
established securities market;
(B) provides each affected Optionee with rights and
entitlements substantially equivalent to or better
than the rights, terms and conditions of the
affected Options, including an identical or better
exercise or vesting schedule and identical or
better timing and methods of payment;
(C) has substantially the same economic value as the
affected Options (determined at the time of the
Change in Control); and
(D) provides that, if the Optionee's relationship with
the Company and all Subsidiaries is completely
severed involuntarily (or, if the Optionee is an
employee of the Company or a Subsidiary, the
Optionee is Constructively Terminated) within 24
months after the Change in Control, any conditions
on an Optionee's rights under, or any
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restrictions on transfer or exercisability
applicable to the Alternative Option, will be
waived or lapse.
(iii) Any Option that was granted within 6 months before a Change in
Control and which is held by a person subject to the reporting
requirements of Section 16(a) of the Act may be cashed out
under subsection (f)(i) only if the Company's counsel
concludes that such cash out will not subject the Optionee to
liability under Section 16(b) of the Act.
The manner of application and interpretation of the foregoing
provisions, as well as the determination as to whether a Change in
Control has occurred, shall be determined by the Committee in its sole
and absolute discretion.
7. ADDITIONAL CONDITIONS IMPOSED UPON OPTIONS.
(a) RIGHT OF FIRST REFUSAL.
(i) Unless the Committee specifies otherwise in an Option
Agreement, all Options must reserve to the Company a right of
first refusal to repurchase any Shares acquired by an Optionee
or beneficiary through the exercise of Options.
(ii) This right of first refusal will survive the Optionee's
employment, directorship or other relationship with the
Company and its Subsidiaries.
(iii) An Optionee or beneficiary must notify the Company, in
writing, of any intent to sell Shares acquired through the
exercise of Options. To be effective, this notice must specify
the number of Shares to be sold, the intended purchaser, the
proposed date of the sale and the proposed purchase price. The
Company will then have 30 days from the date it receives the
completed notice to exercise its right to purchase from the
Optionee or beneficiary any or all of the Shares described in
the notice at the Shares' then-current Fair Market Value. If
the Company elects not to purchase the Shares (or does not
respond to the Optionee or beneficiary within such 30 day
period), the right of first refusal will lapse and the
Optionee or beneficiary may sell the Shares, but only under
the terms specified and to the person described in the notice
given to the Committee under this subsection.
(iv) If the identity of the proposed purchaser or any of the terms
in the notice described in Section 7(a)(iii) change, the
Optionee or beneficiary must give another written notice to
the Company containing the information described in such
subsection. The Company will have an additional 30 days to
decide whether to exercise its right of first refusal under
this section. This procedure must be followed with respect to
any additional changes in the identity of the proposed
purchaser or the terms of the sale.
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(b) BUY OUT OF OPTION GRANTS. At any time after an Option becomes
exercisable, the Committee may elect, in its sole discretion and
without the consent of the Optionee or beneficiary, to cancel the
Option and pay to the Optionee or beneficiary the excess of the Fair
Market Value of the stock subject to the canceled Option over the
Option exercise price on the date the Committee provides written
notice ("Buy Out Notice") of its intention to exercise the right
reserved in this subsection. The Company will complete any buy out
under this subsection as soon as administratively possible after the
date of the Buy Out Notice. At the Committee's election, payment of
the buy out amount may be made in cash, in whole Shares, or partly in
cash and partly in whole Shares. The number of Shares, if any,
included in the buy out amount will be determined by dividing the
amount of the payment to be made in Shares by the Fair Market Value of
a Share as of the date of the Buy Out Notice.
8. TERMINATION OF EMPLOYMENT AND DEATH OF OPTIONEES; REPURCHASE OPTIONS.
(a) TERMINATION OF EMPLOYMENT. If an Optionee ceases to be an Employee of
the Company or its Subsidiaries for any reason, the Optionee may
exercise any outstanding Options that are then exercisable in
accordance with Section 6 and the Option Agreement for the period
specified in the Option Agreement. Such Option shall be subject to the
Repurchase Option described in Section) 8(c).
An Optionee's employment shall not be deemed to have terminated while
he or she is on temporary military, sick or other BONA FIDE leave of
absence from the Company or a Subsidiary approved in writing by the
Company, such as a leave of absence described in Section 1.421-7(h) of
the Federal Income Tax Regulations or any lawful successor regulations
thereto; provided, however, that the Committee may impose such terms
and conditions with respect to such leaves as it deems proper and as
are consistent with such regulations.
(b) DEATH. If any Option is, by the terms of the Option Agreements
exercisable following the Optionee's death, then such Option shall be
exercisable by the Optionee's beneficiary. Such Option shall be
exercisable in accordance with Section 6 and the Option Agreement for
the period specified in the Option Agreement. Such Option shall be
subject to the Repurchase Option described in Section 8(c).
(c) REPURCHASE OPTIONS. Unless the Committee specifies otherwise in an
Option Agreement, all Options will reserve to the Company a repurchase
option exercisable when (i) an Optionee ceases to be an Employee of
the Company or its Subsidiaries; (ii) an Optionee ceases to be an
Employee of the Company or its Subsidiaries and thereafter exercises
any Option; or (iii) a beneficiary of any deceased Optionee exercises
any Option after the Optionee's death.
The price paid for Shares repurchased in accordance with this
subsection will be Fair Market Value at the time of the repurchase,
payable in cash or its equivalent. The Company will complete any
repurchase under this subsection as soon as
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administratively possible after the date it notifies the former
Optionee or beneficiary of its intention to exercise its repurchase
option under this subsection.
9. AMENDMENTS TO THE PLAN. The Committee is authorized to interpret the
Plan and, from time to time, adopt any rules and regulations for carrying out
the Plan that it, may deem advisable. The Committee may amend, modify, suspend
or terminate the Plan at any time. In no event, however, without the approval of
the Company's shareholders, shall any action of the Committee result in:
(a) increasing or decreasing, except as provided in Section 5, the maximum
number of shares for which Options may be granted; or
(b) extending either the maximum period during which an Option is
exercisable as provided in Section 6(b) or the date on which the Plan
shall terminate as provided in Section 13;
except as necessary to conform the Plan and the Option Agreements to changes in
the Code or other governing law. No Option may be granted during any suspension
of this Plan; or after this Plan has terminated and no amendment, suspension or
termination shall, without the Optionee's consent, alter or impair any of the
rights or obligations under an Option theretofore granted to such Optionee under
this Plan.
10. INVESTMENT REPRESENTATION, APPROVALS AND LISTING. The Committee may
condition its grant of any Option hereunder upon receipt of an investment
representation from the Optionee which shall be substantially similar to the
following:
"Optionee agrees that any shares of Common Stock of MedVest Holdings
Corporation that Optionee may acquire by virtue of the exercise of
this option shall be acquired for investment purposes only and not
with a view to, or in connection with, distribution or resale;
provided, however, that this restriction shall become inoperative in
the event the shares of Common Stock of MedVest Holdings Corporation
which are subject to this option shall be registered under the
Securities Act of 1933, as amended, or in the event MedVest Holdings
Corporation is otherwise satisfied that the offer or sale of the
shares of Common Stock of MedVest Holdings Corporation which are
subject to this option may lawfully be made without registration under
the Securities Act of 1933, as amended, and the Optionee or
beneficiary obtains an opinion of legal counsel for the Company to
that effect. Any shares shall be subject to the provisions of a
shareholders agreement dated as of February 3, 2001, counterparts of
which are available for inspection at MedVest Holding Corporation's
principal office in the State of Ohio, and any person acquiring any
shares hereby agrees and consents to be bound by all of the terms and
provisions of such shareholders agreement, all of the provisions of
which are incorporated herein and made a part hereof."
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A substantially similar legend (and any other legends required by state or
federal law) shall be borne by any Shares issued or awarded hereunder.
The Company shall not be required to issue any certificates for Shares upon the
exercise of an Option granted under the Plan prior to (i) obtaining any approval
from any governmental agency which the Committee shall, in its sole and absolute
discretion, determine to be necessary or advisable, (ii) completion of any
registration or other qualification of the Shares under any state or federal law
or ruling or regulations of any governmental body or any national securities
exchange or quotation system which the Committee shall, in its sole and absolute
discretion, determine to be necessary or advisable, or the determination by the
Committee, in its sole and absolute discretion, that any registration or other
qualification of the Shares is not necessary or advisable and (iii) obtaining an
investment representation from the Optionee in the form set forth above or in
such other form as the Committee, in its sole and absolute discretion, shall
determine to be adequate.
11. GENERAL PROVISIONS.
(a) BENEFICIARY DESIGNATION. Each Optionee may name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom
any benefit under the Plan is to be paid or by whom any right under
the Plan is to be exercised in the event of the Optionee's death. Each
designation will revoke all earlier designations made by the same
Optionee, must be in a form prescribed by the Committee, and will be
effective only when filed in writing with the Committee. In the
absence of an effective beneficiary designation, the Optionee's
beneficiary shall be his or her surviving spouse, if any, or otherwise
his or her estate.
(b) OPTION AGREEMENTS NEED NOT BE IDENTICAL. The form and substance of
Option Agreements, whether granted at the same or different times,
need not be identical.
(c) NO RIGHT TO BE EMPLOYED, ETC. Nothing in the Plan or in any Option
Agreement shall confer upon any Optionee any right to continue as an
employee or leased employee of the Company or a Subsidiary, or to
serve as a member of the Board, or to be entitled to receive any
remuneration or benefits not set forth in the Plan or such Option
Agreement, or to interfere with or limit either the right of the
Company or a Subsidiary to terminate the Optionee's employment at any
time or the right of the shareholders of the Company to remove him or
her as a member of the Board, with or without cause.
(d) OPTIONEE DOES NOT HAVE RIGHTS OF SHAREHOLDER. Nothing contained in the
Plan or in any Option Agreement shall be construed as entitling any
Optionee to any rights of a shareholder as a result of the grant of an
Option until such time as Shares are actually issued to such Optionee
pursuant to the exercise of an Option.
(e) SUCCESSORS IN INTEREST. The Plan shall be binding upon the successors
and assigns of the Company.
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(f) NO LIABILITY UPON DISTRIBUTION OF SHARES. The liability of the Company
under the Plan and any distribution of Shares made hereunder is
limited to the obligations set forth herein with respect to such
distribution and no term or provision of the Plan shall be construed
to impose any liability on the Company, Board or Committee in favor of
any person with respect to any loss, cost or expense which the person
may incur in connection with or arising out of any transaction in
connection with the Plan, including, but not limited to, any liability
to any Federal, state, or local tax authority and/or any securities
regulatory authority.
(g) TAXES. Appropriate provision shall be made for all taxes required to
be withheld and/or paid in connection with the Options or the exercise
thereof, and the transfer of Shares pursuant thereto, under the
applicable laws or other regulations of any governmental authority,
whether Federal, state or local and whether domestic or foreign. The
Company may defer any payments or issuance of Shares until such
obligations are satisfied.
(h) USE OF PROCEEDS. The cash proceeds received by the Company from the
issuance of Shares pursuant to the Plan will be used for general
corporate purposes, or in such other manner as the Board deems
appropriate.
(i) EXPENSES. The expenses of administering the Plan shall be borne by the
Company.
(j) CAPTIONS. The captions and section numbers appearing in the Plan are
included only as a matter of convenience. They do not define, limit,
construe or describe the scope or intent of the provisions of the
Plan.
(k) NUMBER. The use of the singular or plural herein shall not be
restrictive as to number and shall be interpreted in all cases as the
context may require.
(l) GENDER. The use of the feminine, masculine or neuter pronoun shall not
be restrictive as to gender and shall be interpreted in all cases as
the context may require.
12. DETERMINATION OF FAIR MARKET VALUE. Fair Market Value shall be such
amount, determined as of the date which shall be the last day of the month
preceding the month in which an event occurs requiring such determination of
Fair Market Value (the "Determination Date") as is derived from application of
the following formula ("Formula"):
Formula
(A x B) - C = F
-----------
D + E
(F-G) x H. = Total Consideration Payable
as used in the Formula set forth above:
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"A" means Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") as determined in accordance with generally accepted accounting
principles, for the twelve months ending on the last day of the month preceding
the month in which the Determination Date occurs, calculated on a consolidated
basis and including the consolidated EBITDA of all members of an affiliated
group of entities, including parents and subsidiaries of MedVest or any
successor Company succeeding to or controlling the business operations of
MedVest's wholly-owned subsidiary, Medex, Inc. and its subsidiaries, the
foregoing EBITDA shall exclude extraordinary and/or non-cash gains or losses but
shall be increased by net non-cash expenses for contributions to employee
benefit or stock ownership plans.
"B" means the multiplier, which shall be eight (8).
"C" means the present value of all debt except trade debt, trade payables
and intercompany payables and/or intercompany debt of all companies in the
affiliated group of entities, including parents and subsidiaries of MedVest or
any successor Company succeeding to or controlling the business operations of
Medex, Inc. and its Subsidiaries.
"D" means the actual number of shares of common stock of MedVest or any
successor Company of MedVest succeeding to or controlling the business
operations of MedVest's subsidiary, Medex, Inc., which are outstanding as at the
Determination Date.
"E" means shares of MedVest or any successor company of MedVest succeeding
to or controlling the business operations of Medex, Inc. which are not currently
outstanding but identified and reserved for issuance pursuant to stock options
or other stock ownership programs including shares into which preferred shares
of MedVest or any parent or successor Company of MedVest are convertible.
"F" means the price payable per Share (including Shares represented by
unexercised options).
"G" means the exercise price per Share of any unexercised options.
"H" means the number of Shares being redeemed or purchased.
Notwithstanding the foregoing, in the event of a sale of all or
substantially all of the stock or assets of MedVest, or any parent Company
succeeding to the business operations of Medex, Inc. and its Subsidiaries within
the twenty-four (24) months following exercise of a repurchase option or buyout
option by the Company for a price per Share which is greater than the price per
Share determined under the Formula set forth above (adjusted as necessary to an
equivalent number of shares as are subject to the application of the Formula,
the Optionee shall be entitled to and shall receive from the Company such amount
as will be equal to the difference, multiplied by the total number of Shares or
Options previously redeemed or purchased.
In the event MedVest as an entity is a shareholder in a parent or
successor Company succeeding to or controlling the business operations of Medex,
Inc. and its Subsidiaries the value of MedVest's shareholdings shall be
separately determined in accordance with the Formula and the value of each
Optionee's shares shall be separately valued.
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13. TERMINATION OF THE PLAN. The Plan shall terminate on April 30, 2012,
and thereafter no Options shall be granted under the Plan. All Options
outstanding at the time of termination of the Plan shall continue in full force
and effect according to the terms of the Option Agreements governing such
Options and the terms and conditions of the Plan.
14. GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Ohio and any applicable federal law.
15. INDEMNIFICATION. Each person who is or was a member of the Committee
or of the Board will be indemnified and held harmless by the Company against and
from any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit or proceeding to which he or she may be made a party or in which he or she
may be involved by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him or her in settlement
thereof, with the Company's approval; or paid by him or her in satisfaction of
any judgment in any such action, suit or proceeding against him or her, provided
he or she gives the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it in his or,
her own behalf. The foregoing right of indemnification is not exclusive and is
independent of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or Code of Regulations,
by contract, as a matter of law, or otherwise.
16. CHANGES IN GOVERNING RULES AND REGULATIONS. All references herein to
the Code or sections thereof, or to rules and regulations of the Department of
Treasury or of the Securities and Exchange Commission, shall mean and include
the Code sections thereof and such rules and regulations as are now in effect or
as they may be subsequently amended, modified, substituted or superseded.
IN WITNESS WHEREOF, MEDVEST HOLDINGS CORPORATION, by its appropriate
officers duly authorized, has executed this instrument effective the 1st day of
May, 2002.
MEDVEST HOLDINGS CORPORATION
By: /s/ Dominick A. Arena
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Chairman
And: /s/ Charles J. Jamison
----------------------
Secretary
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