EXHIBIT 10.1
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (this "Agreement") is entered into
by and between HemaCare Corporation (the "Company"), located at
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ ("Darlington") as of March 10, 1999 (the "Effective
Date").
I. Employment
The Company engages Darlington and Darlington accepts such
engagement (hereinafter, the "Engagement") upon the terms and
conditions of this Agreement.
II. Duties
Darlington shall perform the duties of Executive Chairman
and such other duties consistent with such position as may be
prescribed from time to time by the Board of Directors of the
Company (the "Board"). During the Engagement, Executive shall
report to the Board. During the Engagement, Darlington shall
devote substantially all his time to the business of the Company
but shall be permitted to participate in other business
activities (whether or not such business activity is pursued for
gain, profit or other pecuniary advantage), including without
limitation the business activities in which Darlington heretofore
has participated, to the extent such activities shall not
unreasonably interfere with Darlington's duties hereunder.
III. Compensation
A. Base Pay
The Company shall pay Darlington for all services rendered a
salary of $200,000 per year which may be increased by the Board
of Directors of the Company as recommended by the Board
Compensation Committee (as adjusted, the "Base Pay"), payable in
semi-monthly installments or in such other manner as the Company
shall pay its executives. Such payments shall be deemed to have
commenced hereunder as of December 1, 1998 (it being agreed that
promptly following the execution hereof the Company shall pay all
amounts earned from such date to the Effective Date).
-1-
B. Incentive Compensation
Annually the Company shall pay to Darlington a bonus (the
"Bonus Payment") in the manner set forth on Exhibit A hereto.
In the event this Agreement terminates on the Initial Termination
Date (as hereinafter defined), Darlington shall be entitled to
receive a Bonus Payment (to the extent a Bonus Payment is earned
as set forth in Exhibit A hereto) for the year ending December
31, 1999.
C. Stock Options
Upon commencement of the Engagement, all prior options held
by Darlington shall be deemed cancelled and of no further force
and effect and Darlington is hereby granted an option to purchase
250,000 shares ("Option Shares") of HemaCare Corporation common
stock ("Common Stock") at an exercise price per share of $0.40.
Such grant is subject to the terms and conditions of the HemaCare
Corporation Incentive Stock Option Plan of 1996 and the form of
Non-Qualified Stock Option Agreement attached hereto as Exhibit
B. Such options shall vest as follows: (i) on the Effective
Date, 62,500 Option Shares shall vest immediately; (ii) on the
date on which the average closing price of Common Stock for the
thirty (30) prior trading days is $1.25 or higher, 62,500 Option
Shares shall vest, (iii) on the date on which the average closing
price of Common Stock for the thirty (30) prior trading days is
$1.50 or higher, 62,500 Option Shares shall vest, and (iii) on
the date on which the average closing price of Common Stock for
the thirty (30) prior trading days is $1.75 or higher, 62,500
Option Shares shall vest; provided, that in the event (a) Option
Shares have not vested as of December 31, 2001, and at such time
this Agreement is still in effect, or (b) Option Shares remain
unvested as of the Termination Date relating to a termination
under paragraph IV(e) or IV(f) below, all Option Shares not then
vested shall immediately vest.
D. Fringe Benefits
Darlington shall receive the following fringe benefits:
1. Health/Dental Insurance on a basis consistent with
such insurance benefits which are from time to time provided to
the Company's senior executives.
2. Long term disability insurance equal to two-thirds
(2/3) of Base Pay.
3. Term Life Insurance: Benefits equal to five (5)
times Darlington's annual Base Pay.
-2-
IV. Term and Termination
The term of this Agreement shall begin on the Effective Date
and shall continue until December 31, 1999 (the "Initial
Termination Date") and shall automatically be extended for
successive one-year terms (as so extended, the "Term") unless, at
least thirty (30) days prior to an applicable termination date
hereunder, either the Company or Darlington provides the other
party written notice of such party's intention not to extend the
term for an additional one-year period, in which event this
Agreement shall terminate upon the then scheduled termination
date. Notwithstanding the foregoing, Darlington's Engagement
under this Agreement shall terminate on the first to occur (the
"Termination Date") of:
(a) the effective date of Darlington's resignation
determined pursuant to paragraph V below;
(b) Darlington's death;
(c) the inability of Darlington to perform all of his
duties hereunder by reason of illness, physical, mental or
emotional disability or other incapacity, which inability shall
continue for more than three (3) successive months or six (6)
months in the aggregate during any period of twelve (12)
consecutive months ("Incapacity");
(d) the date Darlington's Engagement is terminated by the
Board for "Cause" (it being agreed that termination pursuant to
this subparagraph may only occur after written notice from the
Company to Darlington specifying the grounds for termination and
Darlington fails within ten (10) days after receipt of such
notice to cure such failure). Cause shall mean:
(i) the willful failure of Darlington (other than due
to Incapacity) to substantially perform his duties hereunder. No
act, or failure to act, on Darlington's part shall be considered
"willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission
was in the best interest of the Company;
(ii) conviction of a crime involving a felony,
fraud, embezzlement or the like,
(iii) the engaging by Darlington in conduct, or the
taking by Darlington of any action, which is materially injurious
to the Company,
-3-
(iv) insobriety or abuse of a controlled substance,
(v) misappropriation of the Company's funds, or
(vi) the failure of Darlington to comply with the
provisions of Paragraph VII below.
(e) the date on which the Company determines, in its sole
discretion, to terminate Darlington's Engagement with the Company
other than for any of the reasons specified in subparagraphs (a),
(b), (c) or (d) above (in which case Darlington will be entitled
to the severance benefits described in paragraph VI below and
such severance benefits shall be Darlington's sole remedy with
respect to such termination); or
(f) the date Darlington terminates the Engagement as a
result of the failure of the Company to observe or comply with
any of the material terms or provisions of this Agreement after
written notice from Darlington to the Company specifying the
grounds for termination and the Company fails within ten (10)
days after receipt of such notice to cure such failure (in which
case Darlington will be entitled to the severance benefits
described in paragraph VI below and such severance benefits shall
be Darlington's sole remedy with respect to such termination).
Upon any termination of this Agreement, Darlington shall be
deemed to have resigned from the Board without any further action
unless the Company and Darlington agree otherwise.
V. Resignation
Darlington agrees to give the Company at least thirty (30)
days prior written notice of Darlington's resignation (which
notice shall not constitute a breach of this Agreement). The
Board may, in its sole discretion, accelerate the effective date
of Darlington's resignation; provided, however, that the Board's
acceleration of the effective date of Darlington's resignation
shall not affect the fact that Darlington's Engagement was
terminated as a result of Darlington's resignation.
VI. Severance
(a) In the event Darlington's Engagement is terminated by
the Board pursuant to subparagraph IV(e) above, or by Darlington
pursuant to subparagraph IV(f) above, the Company will pay to
-▇-
▇▇▇▇▇▇▇▇▇▇ a severance payment (the "Severance Payment") equal
to:
(i) Two Hundred Thousand Dollars ($200,000.00) (the
"Salary Component"), and
(ii) the greater of (A) fifty percent (50%) of the
amount of the Bonus Payment (defined below), if any, for the most
recent fiscal year ended prior to the Termination Date (unless
the Termination Date occurs prior to December 31, 1999, in which
event this subparagraph (ii) shall not apply), and (B) fifty
percent (50%) of the average of the Bonus Payments, if any, for
the two most recent fiscal years ended prior to the Termination
Date (the "Bonus Component") unless the Termination Date occurs
on or prior to December 31, 2000 (in which event this clause (B)
shall not apply and only clause (A) shall be used in determining
the amount due Darlington under this subparagraph (ii)).
The Severance Payment shall be paid by the Company in twelve (12)
equal monthly installments as follows: (a) with respect to the
Salary Component, commencing on the last business day of the
month in which the Termination Date occurs and continuing on the
last business day of each month thereafter until paid in full,
and (b) with respect to the Bonus Component, on the last business
day of the month in which the anniversary date of the Termination
Date occurs and continuing on the last business day of each month
thereafter until paid in full. After the Termination Date,
Darlington shall be entitled to no further benefits other than as
required under the terms and conditions of the benefit plans
provided under subparagraph III(D) or to the extent mandated by
law.
(b) In the event of a Change of Control which occurs during
the Engagement and within twelve months thereafter the Engagement
is terminated by the Board pursuant to subparagraph IV(e) above,
Darlington shall be entitled to receive two (2) times the amount
of the Severance Payment determined pursuant to subparagraph
VI(a) above.
(c) The Company may, at its option and at any time,
discharge all its obligations to Darlington under this paragraph
in a single payment in an amount equal to the net present value
(at a discount rate equal to the prime rate announced from time
to time by Bank of America NT&SA) of all amounts then payable
hereunder. As of the date of payment of all amounts required to
be paid by the Company under this paragraph, the Company will
have no further obligation to Darlington with respect to the
payment of severance pay.
-5-
VII. Non-Disclosure; Nonsolicitation; Nondisparagement
A. Darlington shall not during the Term or at any time
thereafter (i) disclose to any person not employed by the Company
or any person, firm or corporation engaged to render services to
Company except during the Term for the benefit of Company, or
(ii) use for the benefit of himself, or others, any Confidential
Information (as defined below) obtained by Darlington prior to
the Effective Date, during the Term or any time thereafter,
including, without limitation, "know-how", trade secrets, details
of the Company's contracts with third parties, pricing policies,
financial data, operational methods, marketing and sales
information or strategies, product development techniques or
plans or any strategies relating thereto, technical processes,
designs and design projects, and other proprietary information of
Company ("Confidential Information"); provided, however, that
this provision shall not preclude Darlington from (x) upon advice
of counsel and after reasonable notice to Company, making any
disclosure required by any applicable law or (y) using or
disclosing information known generally to the public (other than
information known generally to the public as a result of any
violation of this paragraph VII by or on behalf of Darlington).
B. As requested by the Company from time to time and upon
the termination of the Engagement for any reason, Darlington will
promptly deliver to the Company all copies and embodiments, in
whatever form, of all Confidential Information in Darlington's
possession or within Darlington's control (including, but not
limited to, written records, notes, photographs, manuals,
notebooks, documentation, program listings, flow charts, magnetic
media, disks, diskettes, tapes and all other materials containing
any such Confidential Information) regardless of the location or
form of such material and, if requested by the Company, will
provide the Company with written confirmation that all such
materials have been delivered to the Company.
▇. ▇▇▇▇▇▇▇▇▇▇ shall not, either directly or indirectly,
call on, solicit or take away or assist to be called on,
solicited or taken away, any of the customers, other employees or
independent contractors of the Company on whom Darlington called
or with whom Darlington became acquainted during Darlington's
Engagement with or hiring by the Company, either for Darlington's
own benefit, or for the benefit of any other person, firm or
corporation. Darlington shall not disclose the name of any
employee, customer, sales representative or other employee of the
Company to any third party, unless the disclosure occurs during
Darlington's Engagement with the Company and is reasonably
required by Darlington's position with the Company. Darlington
shall not now or in the future disrupt, damage, impair or
interfere with the business of the Company in any manner,
including, without limitation, inducing an employee to leave the
employ of the Company or inducing an employee, a consultant, a
sales representative or an independent contractor to sever that
person's relationship with the Company either by interfering with
-6-
or raiding the Company's employees or sales representatives,
disrupting its relationships with customers, agents, independent
contractors, representatives or vendors, or otherwise.
In the event of a breach or threatened breach by Darlington
of the provisions of this paragraph, the Company will be entitled
to injunctive or other equitable relief restraining Darlington
from any breach or threatened breach of this paragraph VII.
Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such
breach or threatened breach, including the recovery of damages
from Darlington.
VIII. Expenses
Darlington may incur reasonable expenses, in accordance with
Company policies for such expenses, for promoting the Company's
business, including expenses for entertainment, travel and
similar items. The Company will reimburse Darlington for all
such expenses upon Darlington's presentation of an itemized
account of such expenditures and supporting documentation, in
accordance with Company policy.
IX. Waiver of Breach
The waiver by either party of a breach of any provision of
this Agreement by the other shall not operate or be construed as
a waiver of any subsequent breach.
X. Arbitration
Any dispute arising out of or relating to this Agreement or
the transactions contemplated hereby shall be finally resolved
and determined by mandatory, binding arbitration before a single
arbitrator in Los Angeles, California, in accordance with the
then-prevailing commercial arbitration rules of the American
Arbitration Association; provided, however, that no claim for
specific performance or injunctive relief shall be required to be
submitted to arbitration; provided, further, that the arbitrator
shall apply the internal laws of the State of California. Each
of the parties hereto submits to the jurisdiction of the
arbitrator appointed in accordance with such rules and (without
limiting the effect of the foregoing arbitration clause) to the
jurisdiction of any state or federal court sitting in Los Angeles
County, California, in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect
of the action or proceeding may be heard and determined in any
such court. Each of the parties hereto waives any defense of
inconvenient forum to the maintenance of any action or proceeding
so brought and waives any bond, surety, or other security that
might be required of any other party with respect thereto.
Nothing in this paragraph X, however, shall affect the right of
-7-
any party to bring any action or proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby in any other court or to serve legal process in any other
manner permitted by law or at equity, for the purposes of
compelling arbitration, enforcing any award in arbitration, or
seeking specific performance or injunctive relief. Any party
hereto may make service on any other party by sending or
delivering a copy of the process to the party to be served at the
address and in the manner provided for the giving of notices in
paragraph XIV hereof. Each party hereto agrees that a final
award in any such arbitration or final judgment in any such
action or proceeding so brought shall be conclusive and may be
enforced by entry of such award in any court of competent
jurisdiction, suit on the award or judgment, or in any other
manner provided by law or at equity. In the event of legal
action or arbitration to construe or enforce this Agreement, the
prevailing party (as determined by the court or arbitrator, as
applicable) shall be entitled to recover its reasonable
attorneys' fees and costs.
XI. Assignment
The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of the Company, but the rights and
obligations of Darlington are personal and may not be assigned or
delegated without the Company's prior written consent.
XII. Entire Agreement
This Agreement and the Exhibits attached herein, contains
the entire Agreement of the parties and may not be changed
orally, but only by an agreement in writing executed by the party
against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
XIII. Law Applicable
This Agreement shall be governed in all respects, whether as
to validity, construction, capacity, performance or otherwise, by
the laws of the State of California. In the event any provision
of this Agreement shall be held invalid by a court with
jurisdiction over the parties to this Agreement, such provision
shall be deleted from the Agreement, which shall then be
construed to give effect to the remaining provisions thereof.
-8-
XIV. Notices
Any notice to the Company required or permitted under this
Agreement shall be given in writing to Company, either by
personal service or by registered or certified mail, postage
prepaid, addressed to the Chief Executive Officer of the Company
at its then principal place of business. Any such notice to
Darlington shall be given in a like manner and, if mailed, shall
be addressed to Darlington at his home address then shown in the
Company's files. For the purpose of determining compliance with
any time limit in this Agreement, a notice shall be deemed to
have been duly given (a) on the date of service, if served
personally on the party to whom notice is to be given, or (b) on
the second business day after mailing, if mailed to the party to
whom the notice is to be given in the manner provided in this
paragraph.
IN WITNESS WHEREOF, the parties intending to be legally
bound, have executed this Agreement the day and year first above
stated.
HEMACARE CORPORATION DARLINGTON
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
__________________________ ________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Chairman, Compensation Committee
May 13, 1999 May 13, 1999
__________________________ _______________________
Date Date
-9-
EXHIBIT A
Within sixty (60) days following the filing by the Company of
Form 10-K for the year ending December 31, 1999 and for each full
calendar year thereafter in which this Agreement is in effect,
the Company shall pay to Darlington a bonus equal to the lower of
(i) the percentage growth in the Company's net income ("Net
Income Growth") for the year ending December 31, 1999 (the
"Initial Year"), and each full calendar year thereafter while
this Agreement is in effect (the "Applicable Years"), such
comparisons to be made for the Initial Year or the Applicable
Year to the next preceding fiscal year, or (ii) the percentage
growth in the Company's fully diluted earnings per share ("EPS
Growth") for the Initial Year and each Applicable Year, such
comparisons to be made for the Initial Year or the Applicable
Year to the next preceding fiscal year, based on the following
formula:
At the discretion of the Board if the Company achieves less
than 25% Net Income Growth or EPS Growth, as applicable
75% of Base Pay if the Company achieves 25% Net Income
Growth or EPS Growth, as applicable
100% of Base Pay if the Company achieves 30% Net Income
Growth or EPS Growth, as applicable
125% of Base Pay if the Company achieves 35% Net Income
Growth or EPS Growth, as applicable
150% of Base Pay if the Company achieves 40% Net Income
Growth or EPS Growth, as applicable
Proportionate incremental increases based on the foregoing
formula
Examples (and applicable guidelines) for determining bonuses
hereunder are attached hereto.
C-1
EXHIBIT B
FORM OF STOCK OPTION AGREEMENT
HEMACARE CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
[1996 STOCK INCENTIVE PLAN]
(Non-Qualified Stock Option Agreement Form 96-2)
_______________________________ Date Option Granted: ____________
Name of Optionee
_______________________________ No. of Shares: ____________
Address
_______________________________ Option No.: ____________
City, State, Zip
THIS AGREEMENT is made as of the date set forth above, between
HEMACARE CORPORATION, a California corporation (hereinafter called
the "Company"), and the optionee named above (hereinafter called
the "Optionee").
RECITAL
The Board of Directors of the Company (the "Board"), or the
Compensation Committee of the Board or such other committee of
directors as the Board of Directors of the Company shall designate
in accordance with the HemaCare Corporation 1996 Stock Incentive
Plan (the "Plan"), has determined that it is to the advantage and
interest of the Company and its shareholders to grant the option
provided for herein to the Optionee as an inducement to remain in
the service of the Company (or any corporation, partnership, joint
venture or other entity in which the Company owns, directly or
indirectly, at least a 20% beneficial ownership interest (a
"Related Company")) and as an incentive for increased effort during
such service. Such committee as shall be designated to administer
the Plan (or, if none, the Board) is referred to herein as the
Committee. In consideration of the mutual covenants herein
contained, the parties agree as follows:
1. Grant of Option. The Company hereby grants to the
Optionee the right and option (the "Option") to purchase on the
terms and conditions set forth herein and in the Plan all or any
part of an aggregate of ______ shares (the "Shares") of the Common
Stock of the Company (whether authorized and unissued or treasury
shares) at the purchase price of $______ per Share as the
Optionee may, from time to time, elect. The Option shall vest and
become exercisable on a cumulative basis as follows:
(i) On or after ___________, ______ shares;
(ii) On or after ___________, ______ shares;
(iii) On or after ___________, ______ shares;
(iv) On or after ___________, ______ shares; and
(v) On or after ___________, ______ shares.
Nothing contained herein shall be construed to limit or
restrict the right of the Company or any Related Company to
terminate the Optionee's employment or other Relationship at any
time, with or without cause, or to increase or decrease the
Optionee's compensation from the rate in existence at the time the
Option is granted. As used herein, the term "Relationship" shall
mean that the Optionee is or has agreed to become an officer,
director, employee, consultant, adviser, independent contractor or
agent of the Company or any Related Company.
The Option is not intended to meet the requirements of an
incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended.
2. Term of Option. The right to exercise the Option granted
hereunder, to the extent unexercised, shall remain in effect until
__________ unless sooner terminated in accordance with Section 5 hereof
(the "Term").
3. Method of Exercise.
(a) To the extent that the Option has become exercisable
hereunder, the Option may be exercised in whole or in part at any
time during the Term by giving written notice of exercise to the
Company specifying the number of Shares to be purchased,
accompanied by payment of the purchase price therefor. Payment of
the purchase price for such Shares shall be made (i) in cash,
(ii) by certified or cashier's check payable to the order of the
Company, (iii) other cash equivalents acceptable to the Committee
in its sole discretion, (iv) by delivery of shares of the Common
Stock of the Company already owned by the Optionee or subject to
vested stock options under the Plan, subject to such delivery being
permissible under the General Corporation Law of the State of
California, including without limitation Chapter 5 thereof, or
(v) any combination of the foregoing. If requested by the
Committee, prior to the delivery of any Shares, the Optionee, or
any other person entitled to exercise the Option, shall supply the
Committee with a representation that the Shares are not being
acquired with a view to distribution and will be sold or otherwise
disposed of only in accordance with applicable federal and state
statutes, rules and regulations. As soon after the notice of
exercise as the Company is reasonably able to comply, the Company
shall, without transfer or issue tax to the Optionee or other
person entitled to exercise the Option, deliver to the Optionee or
such other person, at the principal office of the Company or such
other place as shall be mutually acceptable, a certificate or
certificates for the Shares being purchased.
(b) If payment is made with shares of Common Stock of
the Company already owned by the Optionee, the Optionee, or other
person entitled to exercise the Option, shall deliver to the
Company with the notice of exercise certificates representing the
number of shares of Common Stock in payment for the Shares, duly
endorsed for transfer to the Company. In addition, prior to the
acceptance of such certificates in payment for the Shares, the
Optionee, or any other person entitled to exercise the Option,
shall supply the Company with a written representation and warranty
that he or she has good and marketable title to the shares
represented by the certificate(s), free and clear of liens and
encumbrances. The value of the shares of Common Stock so tendered
in payment for the Shares being purchased shall be their Fair
Market Value Per Share (as defined below) on the date of the
Optionee's notice of exercise. Any Shares purchased upon exercise
of the Option which are paid for using Restricted Stock (as defined
in the Plan) shall be restricted in accordance with the original
terms of the award of such Restricted Stock.
(c) If payment is to be made in shares of Common Stock
subject to vested stock options under the Plan, the per share value
attributable to the shares underlying the stock option(s) to be
surrendered or canceled shall be the Fair Market Value Per Share of
such shares less the exercise price per share of such option(s).
The Company and the Optionee or other person entitled to exercise
the Option shall execute and deliver such instruments or
modifications of stock options as shall be necessary to give effect
to such an exercise of the Option.
(d) If for any reason a purported exercise of the Option
providing for payment to be made in whole or in part through the
delivery of shares of Common Stock already owned or underlying
vested stock options is not permitted, such purported exercise
shall not be effective unless, following notice thereof from the
Company, the Optionee or other person entitled to exercise the
Option promptly pays the exercise price in an acceptable form.
(e) If the Optionee or other person entitled to exercise
the Option desires to exercise the Option with funds borrowed from
a broker-dealer in a margin transaction under Regulation T of the
Board of Governors of the Federal Reserve System, the Optionee's
notice of exercise may be delivered to the Company by such broker-
dealer and the Company may deliver the certificate(s) for the
Shares being purchased to such broker-dealer on behalf of the
Optionee or other person entitled to exercise the Option.
(f) For purposes hereof, the "Fair Market Value Per
Share" of the Company's Common Stock shall mean, if the Common
Stock is publicly traded, the closing per share bona fide bid price
of the Common Stock on such date. In any situation not covered by
the preceding sentence, the Fair Market Value Per Share shall be
determined by the Committee in accordance with one of the valuation
methods described in Section 20.2031-2 of the Federal Estate Tax
Regulations (or any successor provision thereto), which
determination shall be final, binding and conclusive.
(g) Notwithstanding the foregoing, the Company shall
have the right to postpone the time of exercise of the Option or
the delivery of the Shares for such period as may be required for
the Company (i) to comply with any applicable listing, registration
or qualification requirements of any national securities exchange
or over-the-counter market or under any federal or state law or
(ii) to obtain the consent or approval of any government regulatory
body. In addition, in connection with any exercise of the Option,
the Committee may require the Optionee to agree not to dispose of
any of the Shares acquired upon exercise thereof except upon the
satisfaction of specified conditions which the Committee, in its
sole discretion, then deems necessary or desirable in connection
with any then existing and effective requirement or interpretation
of any applicable federal or state securities law, rule or
regulation.
(h) The Option may be exercised for less than the total
number of Shares for which the Option is then exercisable, provided
that a partial exercise may not be for less than 100 Shares, except
in the final year of the Term, and shall not, in any event, include
any fractional Shares.
4. Tax Withholding. The Optionee shall, no later than the
date as of which any value attributed to the Option first becomes
includible in the Optionee's gross income for applicable tax
purposes, pay to the Company, or make arrangements (which may
include delivery of shares of Common Stock already owned by the
Optionee or subject to awards under the Plan subject to and in
accordance with the provisions of Section 3(b) or Section 3(c), as
applicable) regarding payment of, any federal, state, local or
other taxes of any kind required by law to be withheld with respect
thereto. The obligations of the Company hereunder shall be
conditional on such payment or arrangements, and the Company (and,
where applicable, any Related Company), shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Optionee.
5. Termination of Option.
(a) If the Optionee ceases to have a Relationship for
any reason other than his death or Permanent Disability (as defined
in Section 5(d)), the Option shall terminate 90 days from the date
on which such Relationship terminates. During such 90-day period,
the Optionee may exercise the Option but only to the extent the
Option was exercisable on the date of termination of his
Relationship and provided that the Option has not expired in
accordance with Section 2 or otherwise terminated as provided
herein. Notwithstanding the foregoing, if the Relationship is
terminated for cause (as defined in Section 5(d)), the Option shall
terminate upon the termination of the Relationship.
(b) For purposes hereof, termination of Optionee's
Relationship for reasons other than for cause, death or Permanent
Disability shall be deemed to take place upon the earliest to occur
of the following: (i) the date of the Optionee's retirement from
employment under the normal retirement policies of the Company or
any subsidiary of the Company; (ii) the date of the Optionee's
retirement from employment with the approval of the Committee
because of disability other than Permanent Disability; (iii) the
date the Optionee receives notice or advice that his employment or
other Relationship is terminated; (iv) the date the Optionee ceases
to render the services for which the Optionee was employed, engaged
or retained by the Company or any Related Company (absences for
temporary illness, emergencies and vacations or leaves of absence
approved in writing by the Committee excepted); or (v) in the case
of a director of the Company, the date on which such person ceases
to be a director of the Company unless such person has an other
Relationship at such time. The fact that the Optionee may receive
payment from the Company or any Related Company after termination
for vacation pay, for services rendered prior to termination, for
salary in lieu of notice or for other benefits shall not affect the
termination date.
(c) If the Optionee shall die at a time when the
Optionee is in a Relationship or if the Optionee shall cease to
have a Relationship by reason of Permanent Disability, the Option
shall terminate six months from the date of the Optionee's death or
termination of Relationship due to Permanent Disability unless by
its terms it shall expire before such date or otherwise terminate
as provided herein, and shall only be exercisable to the extent
that it would have been exercisable on the date of the Optionee's
death or the Optionee's termination of Relationship due to
Permanent Disability. In the case of death, the Option may be
exercised by the person or persons to whom the Optionee's rights
under the Option shall pass by will or by the laws of descent and
distribution.
(d) As used herein, the term "Permanent Disability"
shall mean termination of a Relationship with the Company or any
Related Company with the consent of the Company or such Related
Company by reason of permanent and total disability within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended. As used herein, the term "for cause" shall mean that
the Relationship is terminated by the Company due to (i) the
commission by the Optionee of a substantial violation, through
intentional conduct or through a pattern of behavior not corrected
within a reasonable period of time after written notice to the
Optionee by the Company of such behavior (in either case, whether
by action or omission), of the Optionee's duties on behalf of the
Company or a Related Company or the workplace policies or rules of
the Company or a Related Company which conduct or behavior actually
results in substantial harm to the Company or a Related Company or
could reasonably be expected to put personnel of the Company or a
Related Company in serious jeopardy of imminent harm to their
safety, health or well-being or to cause substantial harm to the
business of the Company or a Related Company or (ii) the commission
by the Optionee of any act or acts constituting dishonesty, a
felony or fraud. For purposes of the Option, whether a
Relationship is or has been terminated "for cause" shall be finally
determined by the president of the Company, or if the Optionee is
a person subject to Section 16 of the Securities Exchange Act of
1934, as amended, by the Committee.
6. Adjustments. In the event of any merger, reorganization,
consolidation, sale of substantially all assets, recapitalization,
stock dividend, stock split, spin-off, split-up, split-off,
distribution of assets or other change in corporate structure
affecting the Common Stock, a substitution or adjustment, as may be
determined to be appropriate by the Committee in its sole
discretion, shall be made in the aggregate number of Shares then
subject to this Agreement and the purchase price to be paid by the
Optionee hereunder; provided, however, that no such adjustment
shall increase the aggregate value of the Option.
7. Change of Control. This Agreement and the Option
hereunder are subject to the change of control provisions set forth
in the Plan.
8. Provisions Regarding Transferability. The Optionee may
transfer the Option solely for estate planning purposes to the
Optionee's children, grandchildren or spouse ("Immediate Family"),
to one or more trusts for the benefit of the Optionee's Immediate
Family members, or to one or more partnerships in which such
Immediate Family members are the only partners only upon the
express written consent of the Committee, and provided the Optionee
does not receive any consideration in any form whatsoever for such
transfer. Upon any such transfer of the Option, the Option shall
continue to be subject to the terms and conditions as were
applicable to the Option immediately prior to the transfer thereof.
Except as expressly provided in the first sentence of this
Section 8, the Option is not assignable or transferable by the
Optionee, either voluntarily or by operation of law, otherwise than
by will or by the laws of descent and distribution, and is
exercisable, during the Optionee's lifetime, only by the Optionee.
9. No Shareholder Rights. The Optionee or other person
entitled to exercise the Option shall have no rights to dividends
or other rights of a shareholder with respect to any Shares subject
hereto until the Optionee or such person has given written notice
of exercise of the Option with respect to such Shares and has paid
the purchase price for such Shares, and no adjustment (except such
adjustments as may be effected pursuant to the provisions of
Section 6 hereof) shall be made for dividends or distributions of
rights in respect of such Shares if the record date is prior to the
date by which the Optionee or such person has both given such
written notice and paid such purchase price.
10. Investment Representation. The Optionee hereby
represents that the Option and any Shares purchased hereunder are
being acquired for the Optionee's own account and not with a view
to or for sale in connection with any distribution thereof except
as may be permitted by the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
11. Conditions to Issuance of Shares. THE COMPANY'S
OBLIGATION TO ISSUE OR DELIVER SHARES OF ITS COMMON STOCK UPON
EXERCISE OF THE OPTION IS EXPRESSLY CONDITIONED UPON THE COMPLETION
BY THE COMPANY OF ANY REGISTRATION OR OTHER QUALIFICATION OF SUCH
SHARES UNDER ANY STATE AND/OR FEDERAL LAW OR RULINGS OR REGULATIONS
OF ANY GOVERNMENT REGULATORY BODY OR THE MAKING OF SUCH INVESTMENT
REPRESENTATIONS OR OTHER REPRESENTATIONS AND AGREEMENTS BY THE
OPTIONEE (OR ANY PERSON ENTITLED TO EXERCISE THE OPTION) IN ORDER
TO COMPLY WITH THE REQUIREMENTS OF ANY EXEMPTION FROM ANY SUCH
REGISTRATION OR OTHER QUALIFICATION OF SUCH SHARES WHICH THE
COMMITTEE SHALL, IN ITS SOLE DISCRETION, DEEM NECESSARY OR
ADVISABLE. SUCH REQUIRED REPRESENTATIONS AND AGREEMENTS MAY
INCLUDE REPRESENTATIONS AND AGREEMENTS THAT THE OPTIONEE, OR ANY
OTHER PERSON ENTITLED TO EXERCISE THE OPTION, (A) IS NOT PURCHASING
SUCH SHARES FOR DISTRIBUTION AND (B) AGREES TO HAVE PLACED UPON THE
FACE AND/OR REVERSE OF ANY CERTIFICATES FOR SUCH SHARES A LEGEND
SETTING FORTH ANY REPRESENTATIONS AND AGREEMENTS WHICH HAVE BEEN
GIVEN TO THE COMMITTEE OR A REFERENCE THERETO AND STATING THAT,
PRIOR TO MAKING ANY SALE OR OTHER DISPOSITION OF ANY SUCH SHARES,
THE OPTIONEE, OR ANY OTHER PERSON ENTITLED TO EXERCISE THE OPTION,
WILL GIVE THE COMPANY NOTICE OF INTENTION TO SELL OR DISPOSE OF THE
SHARES NOT LESS THAN FIVE DAYS PRIOR TO SUCH SALE OR DISPOSITION.
12. Method of Acceptance. This Agreement is addressed to the
Optionee in duplicate and shall not be effective until the Optionee
executes the acceptance below and returns one copy to the Company,
thereby acknowledging that he has read and agreed to all the terms
and conditions of this Agreement and the Plan.
13. Plan Terms. The Option shall be subject to and governed
by the terms and provisions of the Plan, which by this reference
are incorporated herein. In the event of any conflict between the
provisions of this Agreement and the Plan, the Plan shall govern.
All determinations and interpretations thereof made by the
Committee shall be conclusive and binding on all parties hereto and
upon their successors and assigns.
Executed as of this ______ day of _______, 1999.
HEMACARE CORPORATION
By: _____________________________
ACCEPTED:
_____________________________ _________________
Signature of Optionee Date
EXHIBIT C
As used in this Agreement, the phrase "Change in Control" shall
mean:
(a) Except as provided by subparagraph (b) hereof, the
acquisition by any person, entity or "group", within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 50% or more of the combined voting power of the then
outstanding securities entitled to vote generally in the election
of directors of the Company; or
(b) Approval by the Board of a reorganization, merger or
consolidation of the Company with any other person, entity or
corporation, other than:
(i) a merger or consolidation which would result in
the voting securities of the Company immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of another entity) more
than 50% of the combined voting power of the securities entitled
to vote generally in the election of directors of the Company or
such other entity outstanding immediately after such merger or
consolidation; or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company or similar transaction in which
no person, entity or group acquires beneficial ownership of 50%
or more of the combined voting power of the securities entitled
to vote generally in the election of directors of the Company
outstanding immediately after such merger or consolidation; or
(iii) Approval by the Board of a plan of complete
liquidation of the Company or an agreement for the sale or other
disposition by the Company of all or substantially all of the
Company's assets pursuant to which all or substantially all of
the Company's assets continue to be owned by an affiliate of the
Company.