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EXHIBIT 10.20
AMN HOLDINGS, INC.
1999 SUPER-PERFORMANCE STOCK OPTION PLAN
Nonqualified Stock Option Agreement
STOCK OPTION AGREEMENT dated November 19, 1999, between AMN HOLDINGS,
INC., a Delaware corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ (the
"grantee").
All words and phrases not otherwise expressly defined herein shall have
the same meanings as are ascribed to such words and phrases in the Plan
document.
The Committee has determined that the objectives of the Plan will be
furthered by granting to the grantee an option pursuant to the Plan.
In consideration of the foregoing and of the mutual undertakings set
forth in this Stock Option Agreement, the Company and the grantee agree as
follows:
SECTION 1. Grant of Option.
The Company hereby grants to the grantee a nonqualified stock option to
purchase 2,624 shares of Stock at a purchase price of $163.9743 per share.
SECTION 2. Exercisability.
(a) In General. Subject to Section 4 hereof, the option shall become
vested and exercisable if, and only if, certain performance targets are met, as
follows:
Number of Shares as to which
Fiscal Year EBITDA Option Becomes Exercisable
----------- ------ --------------------------
2000 at least $21,752,000 656
2001 at least $26,088,000 656
2002 at least $31,182,000 656
2003 at least $35,872,000 656
Any portion of the option that becomes exercisable pursuant to the
above shall become exercisable as of the date of delivery of audited financial
statements by the Company's independent auditor for the applicable Fiscal Year
(in each case, the "Fiscal Year Vesting Date"), provided that the grantee was
employed on the last day of the applicable Fiscal Year.
(b) Change of Control Acceleration. Notwithstanding the foregoing, in
the event a Change of Control occurs prior to December 31, 2003, in which the
net proceeds actually received by HWH Capital Partners, L.P. and its affiliates
(collectively "HWP") in the form of cash and marketable securities equals or
exceeds three times HWP's aggregate investment in the Company (after taking into
account any prior sales
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by HWP of any portion of its investment in the Company), the portion of the
option which was eligible to become vested pursuant to Section 2(a) with respect
to the Fiscal Year in which a Change of Control occurs and, if any, later Fiscal
Years shall become exercisable effective immediately prior to such event.
(c) Expiration of Option.
(i) Generally. Subject to the provisions of this Section 2(c) and
Section 4, the option shall terminate and cease to be exercisable on the tenth
anniversary of the date of grant thereof.
(ii) Special Rule. Notwithstanding the provisions of Section
2(c)(i), if the Company does not meet the performance target established in
Section 2(a) for a Fiscal Year, that portion of the option which was eligible to
become vested with respect to such Fiscal Year shall immediately terminate.
SECTION 3. Method of Option Exercise.
The option or any part thereof may be exercised only by giving to the
Company written notice of exercise in the form prescribed by the Committee. Full
payment of the purchase price shall be made on the option exercise date by
certified or official bank check or, in the Committee's discretion (which shall
not be unreasonably withheld), by personal check (subject to collection),
payable to the Company, or delivery of shares of Stock already owned by the
grantee for at least six months prior to the option exercise date as described
in Section 5.4(b)(iii) of the Plan. The grantee shall have no right to pay the
option exercise price, or to receive shares of Stock with respect to an option
exercise, prior to the option exercise date. For purposes of this Stock Option
Agreement, the "option exercise date" shall be deemed to be the first business
day immediately following the date written notice of exercise is received by the
Company.
SECTION 4. Termination of Employment.
(a) Unvested Options.
(i) General Rule. All unvested portions of an option granted to a
grantee shall terminate and no longer be exercisable upon such grantee's
termination of employment for any reason, except to the extent that options may
become exercisable post-employment in accordance with Section 5.5 of the Plan or
may remain eligible for vesting pursuant to Section 4(a)(ii) of this Agreement.
(ii) Termination Before Performance Verified. Notwithstanding
Section 4(a)(i), if a grantee terminates employment after the end of a Fiscal
Year, but before the Fiscal Year Vesting date (if applicable), the portion of
such grantee's option that was eligible to vest upon delivery of audited
financial statements confirming that performance targets were met for such
Fiscal Year shall remain outstanding and eligible for vesting until delivery of
such audited financial statements.
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Thereafter, the unvested portion of such option shall immediately terminate and
the treatment of the vested portion of the option shall be governed by Section
4(b).
(b) Vested Options.
(i) Death and Disability. Unless otherwise provided herein, if a
grantee's employment with the Company and its subsidiaries terminates by reason
of death or Disability (as defined in a grantee's employment agreement, if
applicable, or if not applicable, as defined in section 22(e)(3) of the Code),
the portion, if any, of the option granted to such grantee which was exercisable
immediately prior to such termination of employment or which becomes exercisable
thereafter in accordance with Section 4(a)(ii) of this Agreement may be
exercised by such grantee or, as the case may be, by such grantee's
court-appointed legal representative or, in the case of the grantee's death, by
the person or persons to whom such option passes under the grantee's will (or,
if applicable, pursuant to the laws of descent and distribution) until the
earlier of (x) the later of (1) one year after the grantee's termination by
reason of death or Disability and (2) with respect to any portion of the option
that vests in accordance with Section 4(a)(ii) of this Agreement, one year after
the date of delivery of audited financial statements, and (y) the date on which
such portion of the option terminates or expires in accordance with the
provisions of the Plan and the other provisions of this Stock Option Agreement.
(ii) Regular Termination; Leaves of Absence. Unless otherwise
provided herein, if the grantee's employment terminates for reasons other than
as provided in Section 4(b)(i), the portion, if any, of the option granted to
such grantee which was exercisable immediately prior to such termination of
employment or which becomes exercisable thereafter in accordance with Section
4(a)(ii) of this Agreement may be exercised by such grantee until the earlier of
(x) the later of (1) 90 days after the grantee's date of termination and (2)
with respect to any portion of the option that vests in accordance with Section
4(a)(ii) of this Agreement, 90 days after the date of delivery of audited
financial statements, in accordance with Section 4(a)(ii) of this Agreement, if
applicable, and (y) the date on which such option terminates or expires in
accordance with the provisions of the Plan and the other provisions of this
Stock Option Agreement. The Committee may in its discretion determine (A)
whether any leave of absence (including short-term or long-term disability or
medical leave) shall constitute a termination of employment for purposes of the
Plan and (B) the impact, if any, of any such leave on outstanding options under
the Plan.
(c) Right of Discharge Reserved. Nothing in the Plan or this Stock
Option Agreement shall confer upon the grantee or any other person the right to
continue in the employment of the Company or any of its subsidiaries or affect
any right which the Company or any of its subsidiaries may have to terminate the
employment of the grantee or any other person.
SECTION 5. Withholding Tax Requirements.
Shares of Stock deliverable to the grantee upon exercise, pursuant to
the terms of the Plan and this Stock Option Agreement, shall be subject to
income tax
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withholding as provided in Section 10 of the Plan. Subject to the Committee's
consent (which shall not be unreasonably withheld), a grantee may elect to
satisfy all or part of such requirements by delivery of unrestricted shares of
Stock owned by the grantee as provided in Section 10.2 of the Plan.
SECTION 6. Agreement Provisions to Prevail.
This Stock Option Agreement shall be subject to all of the terms and
provisions of the Plan, which are incorporated hereby and made a part hereof,
including, without limitation, the provisions of Section 8 of the Plan
(generally relating to consents required by securities and other laws) and
Section 11 of the Plan (generally relating to the effects of certain
reorganizations and other extraordinary transactions and providing the Committee
with the ability to adjust performance targets). In the event there is any
inconsistency between the provisions of this Stock Option Agreement and the
Plan, the provisions of this Stock Option Agreement shall govern.
SECTION 7. Grantee's Acknowledgments.
By entering into this Stock Option Agreement, the grantee agrees and
acknowledges that (a) he has received and read a copy of the Plan, and accepts
this option upon all of the terms thereof, and (b) no member of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any award thereunder or under this Stock Option Agreement.
SECTION 8. Stockholder Restrictions.
(a) Restrictions on Transfer of Stock Acquired by Option Exercise.
(i) Limitation on Transfer. The grantee shall not sell, give,
assign, hypothecate, pledge, encumber, grant a security interest in or otherwise
dispose of (whether by operation of law or otherwise) (each a "transfer") any
Stock or any right, title or interest therein or thereto, except in accordance
with the provisions of this Agreement. Any attempt to transfer any Stock or any
rights hereunder in violation of the preceding sentence shall be null and void
ab initio.
(ii) Permitted Transfers. At any time after December 31, 2003,
the grantee may, subject to this Section 8(a)(ii), Section 8(a)(iii) and Section
8(b), transfer all, but not less than all, of the Stock owned by the grantee to
any Person other than a Person involved with the medical or employee staffing
industry other than through the Company (each a "Permitted Transferee");
provided that the consideration for such transfer shall consist solely of cash.
No such transfer to a Permitted Transferee shall be effective unless such
Permitted Transferee becomes a party to a separate agreement setting forth
substantially the same terms as this Section 8. No Permitted Transferee of Stock
pursuant to this Section 8(a)(ii) shall thereafter re-transfer such Stock except
in accordance with this Section 8(a)(ii) and Section 8(a)(iii).
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(iii) Permitted Transfer Procedures. The grantee shall give
notice to the Company and AMN Acquisition Corp., a Delaware corporation ("AMN")
of its intention to make any transfer permitted under Section 8(a)(ii) not less
than thirty (30) calendar days prior to effecting such transfer, which notice
shall state the name and address of the party to whom such transfer is proposed
and the Stock proposed to be transferred.
(b) Proposed Voluntary Transfers by the Grantee; Right of First
Refusal.
(i) Offering Notice. If after December 31, 2003 the grantee has
received a bona fide offer from a Person (the "Third Party Purchaser") to pay
for cash (a "Third Party Offer") all of its Stock (the "Offered Stock") and the
grantee desires to accept the Third Party Offer, then the grantee (the "Selling
Stockholder") shall make an offer (the "Offer") to sell the Offered Stock to AMN
and the Company by sending written notice (the "Offering Notice") to the Company
and AMN, which notice shall state (x) the number of shares of Offered Stock and
(y) all material terms and conditions of such proposed sale (including the
proposed purchase price per share of Stock).
(ii) Offer Price. Upon receipt of the Offering Notice, AMN or its
designee and the Company (to the extent that AMN or its designee does not
exercise its right of first refusal for the Offered stock) shall have the right,
but not the obligation, to purchase collectively all, but not less than all, of
the Offered Stock. If the Offer is accepted by AMN's designee, AMN shall remain
responsible for such designee's performance hereunder. The right of first
refusal shall be exercisable with respect to the Offered stock (i) by AMN or its
designee and (ii) by the Company, to the extent that AMN or its designee does
not exercise its right of first refusal for all of the Offered Stock, by written
notice to the Selling Stockholder (with a copy to the Company) within twenty
(20) calendar days (in the case of AMN) and within thirty (30) calendar days (in
the case of the Company) of receipt of the Offering Notice. Failure by AMN or
the Company to respond within the applicable Notice Period shall be regarded as
a rejection of the Offer.
(iii) Sell Option. If all of the Offered Stock has not been
acquired by AMN or its designee or the Company, the Selling Stockholder(s) shall
have the right to sell such Stock to the Third Party Offeror on the terms and
conditions of the Third Party Offer, provided, that any such sale must be
consummated within 45 calendar days of the date of the Offering Notice; provided
however, that if compliance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976 is necessary to consummate such sale, the 45-day period may be
extended to the end of the waiting period thereunder (but in no event to more
than 75 calendar days after the date of the Offering Notice). In the event that
such sale is not consummated within such 45-day period (as extended if
applicable) for any reason, then the restrictions provided for herein shall
again become effective, and no transfer of such Offered Stock may be made
thereafter by such Selling Stockholder(s) without again complying with this
Section 8(b)(iii).
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(c) Drag-Along Right.
(i) Sale of the Company. In the event AMN (the "Initiating
Seller") proposes to sell any of its Stock in one or more related transactions,
including without limitation, a merger or consolidation (a "Drag-Along Sale") to
a bona fide third party purchaser (the "Proposed Transferee") on an arm's length
basis, the Initiating Seller shall have the right (the "Drag-Along Right") to
require the grantee (the "Drag-Along Seller") to sell, and the Drag-Along Seller
hereby agrees to sell, to the Proposed Transferee:
(1) Until AMN has sold (or will have sold as a result
of such sale (assuming no tag-along rights are exercised on such sale)) Stock to
a third party in an amount equal to at least 75 percent (75%) of the Stock owned
by AMN as of the date hereof (the "Threshold Event"), that number of shares of
Stock (but not less than such number of shares of Stock) which is equal to the
product of (x) the number of Shares held by the grantee and (y) a fraction (A)
the numerator of which is the number of outstanding shares of Stock proposed to
be sold by the Initiating Seller and (B) the denominator of which is the number
of shares of Stock owned by the Initiating Seller; and
(2) from and after the Threshold Event, all, but not
less than all, of its Stock (such amount referred to in clause (1) or (2), as
the case may be, for the grantee being herein referred to as the "Drag-Along
Amount").
(ii) Sale Notice. The Initiating Seller shall notify the Company,
and the Company shall promptly notify the Drag-Along Seller in writing of such
proposed Transfer (the "Sale Notice"). The Sale Notice shall set forth (a) the
name and address of the Proposed Transferee and (b) a copy of the written
proposal pursuant to which the Drag-Along Sale will be effected, containing all
of the material terms and conditions thereof, including (1) the number of shares
of Stock (calculated on a fully diluted, as converted basis) proposed to be
transferred by the Initiating Seller, (2) the applicable Drag-Along Amount, (3)
the price per share of Stock to be paid, (4) the terms and conditions of payment
offered by the Proposed Transferee, (5) whether the Initiating Seller has
determined to exercise the Drag-Along Right, (6) in the event the Initiating
Seller has determined to exercise the Drag-Along Right, that the Proposed
Transferee has been informed of the Drag-Along Right provided for in this
Section 8(c) and has agreed to purchase the applicable Drag-Along Amount in
accordance with the terms hereof and (7) the date and location of and procedures
for selling Stock to the Proposed Transferee.
(iii) Purchase of Drag-Along Amount. The Stock purchased from the
Drag-Along Seller by the Proposed Transferee pursuant to this Section 8(c) shall
be paid for at the same price per share and upon terms and conditions no less
favorable than the terms and conditions applicable to the Stock to be sold by
the Initiating Seller.
(d) Stock Certificate Legend; Recording of Transfer. A copy of this
Agreement shall be filed with the Secretary of the Company and kept with the
records of the Company. Each certificate representing Stock now held or
hereafter acquired by the
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grantee shall, at the option of the Company, for as long as this Section 8 is
effective, bear a legend as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER HEREOF THAT SUCH REGISTRATION IS
NOT REQUIRED AS TO SUCH SALE OR OFFER. THE TRANSFER AND PLEDGE OF ANY
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY THE
TERMS OF THIS STOCK OPTION AGREEMENT. DATED AS OF NOVEMBER 19, 1999,
AMONG THE COMPANY AND THE GRANTEE, A COPY OF WHICH MAY BE INSPECTED AT
THE COMPANY'S PRINCIPAL OFFICE.
(e) All Transfers in Compliance with Law and Subject to this Agreement.
Any transfer of Stock permitted or required by this Agreement must be in
compliance with the applicable provisions of this Agreement and with federal and
state securities laws, including, without limitation, the Securities Act.
(f) Specific Performance. The parties hereto intend that each of the
parties have the right to seek damages and/or specific performance in the event
that any other party hereto fails to perform such party's obligations hereunder.
Therefore, if any party shall institute any action or proceeding to enforce the
provisions hereof, any party against whom such action or proceeding is brought
hereby waives any claim or defense therein that the plaintiff party has an
adequate remedy at law.
(g) Definitions. For purposes hereof, the following terms shall have
the meaning set forth below:
"Person" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint stock company, trust,
unincorporated organization, governmental body or other entity.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Stock" means, with respect to each Stockholder, all shares,
whether now owned or hereafter acquired, of Common Stock owned by such
Stockholder.
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(h) Term. This entire Section 8 shall terminate upon the closing of a
bona fide initial public offering of Common Stock of the Company.
SECTION 9. Nontransferability.
No option granted to the grantee under the Plan or this Stock Option
Agreement shall be assignable or transferable by the grantee (whether by
operation of law or otherwise and whether voluntarily or involuntarily), other
than by will or by the laws of descent and distribution. During the lifetime of
the grantee, all rights granted to the grantee under the Plan or under this
Stock Option Agreement shall be exercisable only by the grantee or the grantee's
court appointed legal representative. Notwithstanding the foregoing, with the
Committee's consent, the option may be transferred to one or more members of the
grantee's immediate family or trusts all of the beneficiaries (other than
contingent beneficiaries) of which are member of the grantee's immediate family.
SECTION 10. Forfeiture for Non-Compete Violation.
(a) Non-Compete. The grantee agrees that during the term of grantee's
employment and for a period of two years thereafter (the "Coverage Period"), the
grantee will not engage in, consult with, participate in hold a position as
shareholder, director, officer, consultant, employee, partner or investor, or
otherwise assist any business entity (i) in any State of the United States of
America or (ii) in any other country in which the Company has business
activities, in either case, that is engaged in any activities which are
competitive with the business of providing healthcare or other personnel on a
temporary basis to hospitals, healthcare facilities or other entities and any
and all business activities reasonably related thereto in which the Company or
any of its divisions, affiliates or subsidiaries are then engaged.
(b) Non-Solicit. The grantee agrees that during the Coverage Period, he
shall not solicit, attempt to solicit or endeavor to entice away from the
Company any person who, at any time during the Term was a traveling nurse or
other healthcare professional, employee, customer, client or supplier of the
Company.
(c) Confidential and Proprietary Information. The grantee agrees that
he will not, at any time make use of or divulge to any other person, firm or
corporation any confidential or proprietary information concerning the business
or policies of the Company or any of its divisions, affiliates or subsidiaries.
For purposes of this Agreement, any confidential information shall constitute
any information designated as confidential or proprietary by the Company or
otherwise known by the grantee to be confidential or proprietary information
including, without limitation, customer information. Grantee acknowledges and
agrees that for purposes of this Agreement, "customer information" including
without limitation, customer lists, all lists of professional personnel, names,
addresses, phone numbers, contact persons, preferences, pricing arrangements,
requirements and practices. Grantee's obligation under this Section 10(c) shall
not apply to any information which (i) is known publicly; (ii) is in the public
domain or hereafter enters the public domain without the fault of grantee; or
(iii) is
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hereafter disclosed to grantee by a third party not under an obligation of
confidence to the Company. Grantee agrees not to remove from the premises of the
Company, except as an employee of the Company in pursuit of the business of the
Company or except as specifically permitted in writing by the Company, any
document or other object containing or reflecting any such confidential or
proprietary information. Grantee recognizes that all such information, whether
developed by the grantee or by someone else, will be the sole exclusive property
of the Company. Upon termination of employment, grantee shall forthwith deliver
to the Company all such confidential or proprietary information, including
without limitation all lists of customers, pricing methods, financial
structures, correspondence, accounts, records and any other documents, computer
disks, computer programs, software, laptops, modems or property made or held by
him or under his control in relation to the business or affairs of the Company,
or any of its divisions, subsidiaries or affiliates, and no copy of any such
confidential or proprietary information shall be retained by him.
(d) Forfeiture for Violations. If the grantee shall at any time violate
the provisions of Section 10(a), (b), or (c), the grantee shall immediately
forfeit all options (whether vested or unvested) and any exercise of an option
which occurs after (or within 6 months before) any such violation shall be void
ab initio.
SECTION 11. Execution of Agreement.
Notwithstanding anything contained in this Stock Option Agreement to
the contrary, no option may be exercised until the grantee has returned an
executed copy of this Stock Option Agreement to the Company.
SECTION 12. Notices.
Any notice to be given to the Company hereunder shall be in writing and
shall be addressed to ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other address as the Company may hereafter designate to the
grantee by notice as provided herein. Any notice to be given to the grantee
hereunder shall be addressed to the grantee at the address set forth below or at
such other address as the grantee may hereafter designate to the Company by
notice as provided herein. Notices hereunder shall be deemed to have been duly
given when received by personal delivery or by registered or certified mail to
the party entitled to receive the same.
SECTION 13. Reorganization Event.
The option awarded hereunder may be subject, in the Committee's
discretion, to termination on account of a Reorganization Event affecting the
Company, as described in Section 17 of the Plan.
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SECTION 14. Successors and Assigns.
This Stock Option Agreement shall be binding upon and inure to the
benefit of the parties hereto and the successors and assigns of the Company and,
to the extent set forth in the Plan, the heirs and personal representatives of
the grantee.
SECTION 15. Governing Law.
This Agreement shall be governed by the laws of the State of Delaware
applicable to agreements made and to be performed entirely within such State.
SECTION 16. Modifications to Agreement.
This Agreement may not be altered, modified, changed or discharged,
except by a writing signed by or on behalf of both the Company and the grantee.
IN WITNESS WHEREOF, the parties hereto have executed this Stock Option
Agreement as of the date and year first above written.
AMN HOLDINGS, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Grantee
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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