No. of Shares________
PACIFIC REHABILITATION & SPORTS MEDICINE, INC.
NONSTATUTORY STOCK OPTION
AND
NONSTATUTORY STOCK OPTION AGREEMENT
This Nonstatutory Stock Option is granted and this
Nonstatutory Stock Option Agreement (the "Agreement") is executed
by and between Pacific Rehabilitation & Sports Medicine, Inc., a
Delaware corporation (the "Company"), and __________________ (the
"Optionee"), effective __________________, 199____.
RECITALS
A. The Company has duly adopted that certain PACIFIC
REHABILITATION & SPORTS MEDICINE, INC., 1993 AMENDED AND RESTATED
COMBINATION STOCK OPTION PLAN, AS AMENDED, a copy of which is
attached hereto as Exhibit A (the "Plan").
B. The Plan authorizes the Board of Directors of the
Company to grant nonstatutory stock options to employees,
directors, general partners, officers, consultants and advisors
of the Company or an affiliate (as defined in Section 3.2 of the
Plan) of the Company (provided that bona fide services are
rendered by consultants or advisors and such services are not in
connection with the offer or sale of securities in a capital
raising transaction).
C. The Board of Directors has selected the Optionee to
receive a nonstatutory stock option under the Plan.
NOW, THEREFORE, THE COMPANY AND THE OPTIONEE COVENANT AND AGREE
AS FOLLOWS:
1. NUMBER OF SHARES SUBJECT TO OPTION AND OPTION PRICE.
The Company hereby grants to the Optionee a nonstatutory stock
option (the "Option") to purchase from the Company
___________________________________ (________) shares of the
common stock of the Company, $0.01 par value (the "Common Stock")
at an exercise price of $__________ per share. The Option is
exercisable upon the terms and conditions contained herein.
2. ADDITIONAL TERMS OF THE OPTION. Subject to the
provisions of Paragraph 3 below, the Option shall have the
following terms:
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2.1 The effective date of the grant of the Option
shall be ______________, 19_____.
2.2 The Option shall vest as follows:
Cumulative
Date Percentage Vested
---- ------------------
2.3 The Option shall expire on ________________,
19_____ (the "Expiration Date").
2.4 To the extent vested, the Option may be exercised
in whole or in part, at any time, and from time to time, prior
to the Expiration Date.
2.5 The Option must be exercised, if at all, as to a
whole number of shares.
3. INCORPORATION BY REFERENCE OF THE TERMS AND CONDITIONS
OF THE PLAN. The terms and conditions of this Option shall be
subject to all of the terms and conditions of the Plan, which
terms and conditions are expressly incorporated by reference into
this Agreement to the same extent and with the same effect as if
such terms and conditions were set forth herein. In the event of
a conflict or inconsistency between the terms and conditions set
forth in this Agreement and the terms and conditions of the Plan,
those of the Plan shall control.
4. EXERCISE OF THE OPTION; DELIVERY OF CERTIFICATES.
4.1 The Option may be exercised only in accordance
with the terms and conditions of Section 7 of the Plan and by
delivery to the Company of a Notice of Exercise substantially in
the form of Exhibit B, including all exhibits and attachments
thereto.
4.2 Within a reasonable time after exercise, the
Company shall deliver to the Optionee a certificate for the
shares of Common Stock for which exercise of the Option was made
and, unless the Option has expired or been exercised in full, a
new Nonstatutory Stock Option Agreement covering the balance of
the shares of Common Stock covered by this Option for which
exercise has not been made. Unless otherwise agreed to by the
Company and the Optionee, the new agreement shall have the same
terms and conditions of this Option and Agreement (except as to
the number of shares of Common Stock subject thereto and except
to the extent that the Plan has been modified or amended, in
which case the new Option and agreement shall reflect the
modified and amended terms and conditions of the Plan).
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5. TRANSFERABILITY OF THE OPTION. The Option is
transferable only in accordance with Section 8 of the Plan.
6. WARRANTIES AND REPRESENTATIONS OF THE OPTIONEE. By
executing this Agreement, the Optionee accepts the Option and
agrees to be bound by all of the terms of the Option, this
Agreement and the Plan.
7. INDEMNIFICATION BY THE OPTIONEE. The Optionee agrees
to indemnify and hold the Company harmless from any loss or
damage, including attorney's fees or other legal expenses,
incurred in the defense or payment of any such claim against the
Company resulting from a breach by the Optionee of the
representations, warranties or provisions contained in this
Agreement.
8. NO RIGHT TO CONTINUED RELATIONSHIP. Nothing herein
shall confer upon the Optionee the right to continue as an
employee, director, general partner, officer, consultant or
advisor of or with the Company, nor affect any right which the
Company may have to terminate its relationship with the Optionee.
9. RIGHTS AS SHAREHOLDERS. The Optionee shall have no
rights as a shareholder of the Company on account of the Option
nor on account of shares of Common Stock of the Company which
will be acquired upon exercise of the Option (but with respect to
which no certificates have been delivered to the Optionee).
10. FURTHER ASSURANCES. From time to time and upon request
by the Company, the Optionee agrees to execute such additional
documents as the Company may reasonably require in order to
effect the purposes of the Plan and this Agreement.
11. BINDING EFFECT. This Agreement shall be binding upon
the Optionee and such Optionee's heirs, successors and assigns,
including the Qualified Successor of the Optionee (as this term
is defined in Section 8.2 of the Plan).
12. WAIVERS/MODIFICATIONS. No waivers, alterations or
modifications of this Agreement shall be valid unless in writing
and duly executed by the party against whom enforcement of such
waiver, alteration or modification is sought. The failure of any
party to enforce any of its rights against the other party for
breach of any of the terms of this Agreement shall not be
construed a waiver of such rights as to any continued or
subsequent breach.
-3-
13. GOVERNING LAW. This Agreement shall be governed by the
laws of the State of Washington.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
PACIFIC REHABILITATION & SPORTS MEDICINE INC.
By__________________________________
___________________________________
Its________________________________
OPTIONEE:
____________________________________
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EXHIBIT B
FORM OF EXERCISE OF OPTION
PACIFIC REHABILITATION & SPORTS MEDICINE, INC.,
1993 COMBINATION STOCK OPTION PLAN
I, _________________, hereby exercise the option to purchase
________shares of common stock, $0.01 par value (the "Shares"),
of Pacific Rehabilitation & Sports Medicine Inc., previously
granted to me pursuant to the terms and conditions of the PACIFIC
REHABILITATION & SPORTS MEDICINE, INC., 1993 AMENDED AND RESTATED
COMBINATION STOCK OPTION PLAN (the "Plan") and the Nonstatutory
Stock Option and Nonstatutory Stock Option Agreement dated
_____________________, 199_____ (the "Option").
Cash, certified or cashier's check, or shares of the Company's
Common Stock valued at their fair market value as of this date,
in the aggregate amount of $_____________, representing the
option price of $_______ per share, plus the amount the Company
has determined must be withheld for tax purposes, accompanies
this notice. [ALTERNATIVE: I HEREBY CONSENT TO THE COMPANY
WITHHOLDING THE NUMBER OF SHARES WHOSE VALUE, CALCULATED AT THEIR
FAIR MARKET VALUE AS OF THIS DATE, EQUALS THE AGGREGATE EXERCISE
PRICE OF THE SHARES PLUS THE AMOUNT THE COMPANY HAS DETERMINED
MUST BE WITHHELD FOR TAX PURPOSES.]
______________________________Date_________
(Signature)
Optionee's Name:___________________________
Optionee's Address: _______________________
_______________________
RECEIPT OF STOCK CERTIFICATE
I hereby acknowledge receipt of Stock Certificate No._______
from the Company on _______________, 199_____, representing _____
shares of the Company's common stock acquired upon exercise of
the Option noted above.
_________________________Date___________
(Optionee's Signature)