INSIGHT HEALTH SERVICES CORP.
1996 DIRECTORS' STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
INSIGHT HEALTH SERVICES CORP.
1996 DIRECTORS' STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of ("Grant Date"), by and between
INSIGHT HEALTH SERVICES CORP., a Delaware corporation ("Corporation") and
("Optionee").
WITNESSETH
RECITALS
A. The stockholders and the Board of Directors of the Corporation ("Board")
have adopted the 1996 Directors' Stock Option Plan ("Plan") of the Corporation
for the purpose of attracting and retaining highly qualified individuals to
serve as members of the Board, who are not officers or employees of the
Corporation or any of its subsidiaries.
B. The Optionee is a director of the Corporation or its subsidiaries, and
this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the grant by the Corporation of a
nonstatutory stock option to the Optionee.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions set
forth in this Agreement and the Plan, a copy of which is attached hereto, the
Corporation hereby grants to the Optionee, as of the Grant Date, a
nonstatutory stock option to purchase up to ___ shares ("Option Shares") of
the common stock, par value $0.001 per share, of the Corporation ("Common
Stock") from time to time during the Option Period (as defined below) at the
price of $ per share ("Option Price").
2. OPTION PERIOD. This option shall be exercisable only during the Option
Period. Termination of the Optionee's services as a director for any reason
shall not cause this option to terminate; however, upon the Expiration Date or
upon its earlier termination under Paragraph 4, this option shall cease to be
exercisable and have no further force or effect whatsoever.
3. VESTING AND EARLY TERMINATION. The Option Shares shall vest each month
following the Grant Date on a pro rata basis over a three (3) year period
following the Grant Date until fully vested, so long as continuously during such
time period the Optionee remains a director, or is an employee or independent
contractor of the Corporation or any of its subsidiaries or is a director of one
of the Corporation's subsidiaries.
If the Optionee's services terminate prior to the end of such three (3)
year period, then the vested Option Shares shall be fixed at such time, and
should the calculation result in a fractional share, it shall be rounded down to
the nearest whole number of shares.
4. DEATH OR DISABILITY OF AN OPTIONEE. If the Optionee's services to the
Corporation are terminated as a result of the Optionee's death or disability,
then the Optionee, or the executors or administrators of the Optionee's estate
or the Optionee's heirs or legatees (as the case may be) shall have the right to
exercise this option with respect to all options theretofore granted to such
Optionee, unless earlier terminated in accordance with their terms. In the event
of such termination, the period for exercising this option shall be a period of
twelve (12) months commencing with the date of such termination of services,
provided that in no event shall this option be exercisable at any time after the
Expiration Date. For purposes of this section, "disability" shall mean an
Optionee's inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.
5. TIMING AND METHOD OF EXERCISE. In order to exercise this option with
respect to all or any part of the Option Shares for which this option is at the
time exercisable, the Optionee (or in the case of exercise after the Optionee's
death, the Optionee's executor, administrator, heir or legatee, as the case may
be) must comply with the provisions of Section 10 of the Plan. A form of
exercise notice is attached hereto as Exhibit A.
6. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 4, the provisions of this Agreement shall inure to the benefit of, and
be binding upon, the successors, administrators, heirs, devisees, legal
representatives and assigns of the Optionee and the successors and assigns of
the Corporation.
7. LIABILITY OF CORPORATION. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability in respect of the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained.
8. CONSTRUCTION. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the express terms and provisions of the Plan.
9. GOVERNING LAW. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the state of Delaware.
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10. WARRANTIES AND OBLIGATIONS OF THE OPTIONEE.
(a) The Optionee represents, warrants and agrees that the Optionee
will acquire and hold the Option Shares for the Optionee's own account for
investment and not with the view to the resale or distribution thereof, except
for resales or distributions in accordance with federal and state securities
laws, and that the Optionee will not, at any time or times, directly or
indirectly, offer, sell, distribute, pledge or otherwise grant a security
interest in or otherwise dispose of or transfer all, any portion of or any
interest in, any Option Shares (or solicit an offer to buy, take in pledge or
otherwise acquire or receive, allow all or any portion thereof), except pursuant
to either (i) a Registration Statement on an appropriate form under the
Securities Act of 1933, as amended ("Act"), which Registration Statement has
become effective and is current with respect to the shares being offered or
sold, or (ii) a specific exemption from the registration requirements of the
Act, the availability of which exemption shall be the subject matter of an
opinion of counsel reasonably acceptable to the Corporation that no registration
under the Act is required with respect to such offer, sale, distribution,
pledge, grant or other disposition or transfer.
(b) The Optionee acknowledges that the Optionee understands that (i)
the option has been granted and the shares to be sold to the Optionee upon
exercise of the option will be sold to the Optionee pursuant exemptions from the
registration requirements in the Act until such time as the Corporation shall
file a Registration Statement under the Act which has become effective and is
current with respect to the shares being offered or sold and in this connection
the Corporation is relying in part on the representations set forth in this
Agreement; (ii) such shares must be held indefinitely unless they are registered
or an exemption from registration becomes available under the Act and the
securities laws of any state; (iii) the Corporation is under no obligation to
register such shares or to comply with any exemption from such registration,
including those portions of Rule 144 under the Act to be complied with by the
Corporation; (iv) if Rule 144 is available for sales of such shares, and there
is no assurance that the Optionee will ever be able to sell under Rule 144, such
sales in reliance upon Rule 144 may be made only after the shares have been held
for the requisite holding period and then only in limited amounts in accordance
with the conditions of that Rule, all of which must be met; and (v) the Optionee
must, therefore, continue to bear the economic risks of the investment in such
shares for an indefinite period of time after the exercise of the option.
(c) The Optionee acknowledges that the Optionee has had the
opportunity to ask questions of, and receive answers from, the officers and
representatives of the Corporation concerning all material information
concerning the Corporation and the terms and conditions of the transactions in
which the Optionee is acquiring the option and may subsequently acquire Option
Shares. The Optionee further acknowledges that the Optionee understands that the
Corporation may use the proceeds from the exercise of the option for general
corporate purposes.
(d) Immediately prior to the exercise of all or any portion of the
option, the Optionee shall deliver to the Corporation a signed statement, in a
form satisfactory to the
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Corporation, confirming that each of the representations, warranties,
acknowledgments and agreements contained in this Paragraph is true as to the
Optionee as of the date of such exercise.
(e) The Optionee understands that all certificates representing shares
transferred pursuant to this Agreement, unless made pursuant to an appropriate
Registration Statement under the Act, will bear the following restrictive
legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be transferred or hypothecated without prior registration under said
Act or an exemption therefrom established to the satisfaction of the
issuer."
(f) If the legal counsel of the Corporation, at the request of the
Corporation, advises it that registration under the Act of the shares
deliverable upon the exercise of the option is required prior to delivery
thereof, or that listing of such shares on any exchange is required prior to
delivery thereof, the Corporation shall not be required to issue or deliver such
shares unless and until such legal counsel shall advise that such registration
and/or listing has been completed and is then effective, or is not required.
11. SEVERABILITY. In the event that any provision of this Agreement is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.
12. DEFINITIONS. Capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Plan. For purposes of interpreting this
Agreement, the following definitions shall also apply:
(a) "Exercise Date" means the date on which the Corporation receives
written notice of the exercise of this option together with payment of the
Option Price for the purchased shares.
(b) "Exercise Price" means the Option Price multiplied by the number
of purchased shares.
(c) "Expiration Date" means, unless earlier terminated pursuant to
the terms of this Agreement or the Plan, the day immediately preceding the tenth
anniversary of the Grant Date.
(d) "Option Period" means the period commencing on the Grant Date
and, unless earlier terminated in accordance with Paragraph 4, ending on the
close of business on the Expiration Date.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed in duplicate on its behalf and the Optionee has also executed this
Agreement in duplicate, all as of the date first above written.
OPTIONEE INSIGHT HEALTH SERVICES CORP.
By:
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