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Exhibit 10.8
NON-INCENTIVE STOCK OPTION AGREEMENT
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AGREEMENT, made as of this 1ST DAY OF FEBRUARY, 1996 by and between
Royce Laboratories, Inc., a Florida corporation having its principal place of
business at ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Grantor") and
PHYSICIAN AND PHARMACEUTICAL SERVICES, INC., at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Optionee").
W I T N E S S E T H:
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WHEREAS, the Board of Directors of the Grantor desires to grant a
non-qualified option to the Optionee; and
WHEREAS, the Optionee, an independent sales representative, has been
granted a non-qualified stock option as herein provided;
NOW, THEREFORE, in consideration of the mutual premises contained
herein, the Grantor hereby grants the Optionee options to purchase shares of the
Grantor's common stock, $.005 par value per share (the "Common Stock"), upon
the following terms and conditions:
1. OPTION.
The Grantor hereby grants to the Optionee the option (the "Option") to
purchase an aggregate of up to 40,000 shares of the Common Stock in accordance
with the terms and conditions hereinafter set forth. The Option granted
hereunder is NOT intended to qualify as an "Incentive Stock Option" within the
meaning of Section 422A of the Internal Revenue Code, as amended (the "Code").
2. OPTION PRICE.
The Option price shall be $10.50 per share, being the fair market value
of a share of Common Stock on this date. The Grantor shall pay all original
issue or transfer taxes upon the exercise of the Option and all other fees and
expenses necessarily incurred by the Grantor in connection therewith.
3. EXERCISE OF OPTION.
(a) Optionee shall have the right to exercise the option in whole
or in part, in amounts set forth below and based upon
Optionee's sales of Grantor's products meeting annual minimum
net sales targets ("Annual Minimum Net Sales Targets") as
outlined in the letter agreement between Royce Laboratories,
Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇. Net sales means the total of sales
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invoices less any and all promotional allowances, rebates, product returns,
discounts, price adjustments, chargebacks and any other allowances given to
customers as incentive for purchasing Grantor's products.
The Annual Minimum Net Sales Target and the related options which will vest in
favor of Optionee upon reaching the Annual Minimum Net Sales Targets during any
particular year of this agreement are as follows:
Options which vest
by reaching the
corresponding Annual
Annual Minimum Minimum Net
Year Net Sales Target Sales Target
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2/1/96 - 12/31/96 $ 4.6 Million 10,000
5.6 Million 11,000
6.6 Million 12,000
7.6 Million 13,000
8.6 Million 14,000
9.6 Million 15,000
10.6 Million 16,000
11.6 Million 17,000
12.6 Million 18,000
13.6 Million 19,000
14.6 Million and over 20,000
1/1/97 - 12/31/97 7.5 Million 10,000
8.5 Million 11,000
9.5 Million 12,000
10.5 Million 13,000
11.5 Million 14,000
12.5 Million 15,000
13.5 Million 16,000
14.5 Million 17,000
15.5 Million 18,000
16.5 Million 19,000
17.5 Million and over 20,000
If Optionee does not reach the Annual Minimum Net Sales Target in any year, the
options eligible to become vested during that year shall automatically be
forfeited. All options vested through December 31, 1997 shall expire December
31, 1999.
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(b) The Optionee shall notify the Grantor at its principal office as
to the number of shares of Common Stock which he desires to
purchase under the Option herein granted, which notice shall be
accompanied by payment of the price therefor as specified in
Paragraph 2 above (the "Option Price"). As soon as practicable
thereafter, the Grantor shall cause to be issued to Optionee
certificates evidencing the shares of Common Stock purchased by
the Optionee.
(c) Payment of the Option Price may be paid to the Grantor by either:
(i) cash (including check or money order); or
(ii) the delivery of shares of Common Stock owned by Optionee
and having a fair market value equal to the Option Price; or
(iii) a combination of cash and shares of Common Stock.
4. TERMINATION.
(a) If the Optionee ceases to be an independent sales representative
of the Grantor by reason of the fact that he is discharged for
cause, as determined solely and exclusively by the Grantor's
President, all unvested rights of Optionee to exercise the Option
shall terminate, lapse and be forfeited at the time of Optionee's
termination.
(b) If the Optionee ceases to be an independent sales representative by
reason other than for cause, the personal representatives, heirs,
distributees or the Optionee, as the case may be, shall have the
right up to 12 months from the date of such event to exercise the
vested Option.
(c) Notwithstanding (a) and (b) above, the Option shall not be
exercisable under any condition after the date specified in
Paragraph 3(a).
5. NON-ASSIGNABILITY OF THE OPTIONS.
The Optionee may not assign, transfer, sell, pledge or hypothecate the
Option in any way, and shall not subject the Option to levy, execution or
disposition under the Bankruptcy Code of 1978, as amended, or any other state or
federal law granting relief to creditors, otherwise than by will or the laws
of descent and distribution; and the Option, shall be exercisable during the
Optionee's lifetime only by the Optionee.
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6. STOCK AS INVESTMENT.
By accepting the Option, the Optionee agrees for himself, his heirs and
legatees that any and all shares of Common Stock purchased hereunder shall be
acquired for investment and not for distribution thereof, and upon the
issuance of any or all of the shares of Common Stock subject to the Option
granted hereunder, the Optionee, or his heirs or legatees receiving such shares
of Common Stock, shall deliver to the Grantor a representation in writing that
such shares of Common Stock are being acquired in good faith for investment and
not for distribution thereof. The Grantor may place a "stop transfer" order
with respect to such shares of Common Stock with its transfer agent and place
an appropriate restrictive legend on the stock certificate representing such
shares of Common Stock.
Unless a registration statement is filed with the Securities and
Exchange Commission covering the shares of Common Stock issuable upon exercise
of the Option, sales of restricted securities may usually be made only in
compliance with the terms of Rule 144, promulgated under the Securities Act of
1933, as amended (the "Act") Rule 144 requires, among other things, that the
shares of Common Stock be held for at least two years after acquisition, which
period commences upon exercise of the Option.
7. RESTRICTION ON ISSUANCE OF SHARES.
The Grantor shall not be required to issue or deliver any certificate
representing shares of its Common Stock purchased upon the exercise of the
Option unless (a) the issuance of such shares of Common Stock has been
registered with the Securities and Exchange Commission under the Act, or counsel
to the Grantor shall have given an opinion that such registration is not
required, (b) approval, to the extent required, shall have been obtained from
any state regulatory body having jurisdiction thereof, and (c) permission for
the listing of such shares of Common Stock shall have been given by any
national securities exchange on which the Common Stock of the Grantor is, at
the time of issuance, listed. If necessary, the certificate representing the
shares of Common Stock issued upon the exercise of the Option may bear a
restrictive legend to indicate that the Common Stock represented by such
certificate was issued in a transaction which was not registered under the Act,
and may be sold or transferred in a transaction that is registered under the
Act or is exempt from the registration requirements of the Act.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event of changes in the outstanding Common Stock of the Grantor
by reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combinations, or exchanges of shares of Common Stock,
separations, reorganizations, or liquidations, the number and class of shares
as to which the Option may be exercised shall be correspondingly adjusted by
the Grantor. No adjustment shall be made with respect to (i) stock dividends,
(ii) issuance of shares of common stock or derivative securities convertible
into or exchangeable for shares of Common Stock, or (iii)
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the issuance to shareholders of the Grantor of rights to subscribe for
additional shares of Common Stock.
9. DISSOLUTION OR LIQUIDATION.
In the event of the dissolution or liquidation of the Grantor, the
Option granted hereunder shall terminate as of a date to be fixed by the Board
of Directors, provided that not less than 30 days written notice of the date so
fixed shall be given to Optionee and Optionee shall have the right during such
period to exercise the Option granted hereunder to the extent not previously
exercised, even though the Option might not otherwise be exercisable by reason
of an insufficient lapse of time. At the end of such period, any unexercised
Option shall terminate and be of no further effect.
10. NO RIGHTS AS A SHAREHOLDER.
The Optionee shall have no rights as a shareholder with respect to
shares of Common Stock as to which the Option granted hereunder shall not have
been exercised and payment made as herein provided.
11. EFFECT UPON STATUS.
This Agreement does not give the Optionee any right to continued
service as an independent sales representative of the Grantor.
12. BINDING EFFECT.
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors,
legal representatives and assigns.
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13. GOVERNING LAW.
This Agreement shall be construed under the laws of the State of
Florida. Headings have been included herein for convenience of reference only,
and shall not be deemed a part of the Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
ROYCE LABORATORIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
ACCEPTED and AGREED TO:
Physician and Pharmaceutical Services, Inc.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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