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Exhibit
10.5
ROTECH HEALTHCARE
INC.
COMMON STOCK OPTION
PLAN
FORM OF OFFICER (OTHER
THAN CEO)
STOCK OPTION
AGREEMENT
INCENTIVE STOCK
OPTION
THIS AGREEMENT made as of
, by and between Rotech Healthcare Inc., a Delaware corporation
(the “Company”), and
(the “Optionee”).
WITNESSETH:
WHEREAS, the Company has
adopted the Rotech Healthcare Inc. Common Stock Option Plan (the
“Plan”) for the benefit of a select group of employees,
nonemployee directors and consultants;
WHEREAS, due to the
Optionee’s position in the Company, the Optionee is eligible
for a grant of stock options under the Plan; and
WHEREAS, the Board has
authorized the grant to the Optionee of an Incentive Stock Option
under the Plan, on the terms and conditions set forth in the Plan
and as hereinafter provided.
NOW, THEREFORE, in
consideration of the premises contained herein, the Company and the
Optionee hereby agree as follows:
Terms used in this Agreement
which are defined in the Plan shall have the same meaning as set
forth in the Plan.
Pursuant to the Board’s
authorization, an option to purchase
Shares is hereby granted to the Optionee effective
, for an option price per Share equal to $
(the
“Option”). The Option is intended by the Board to be an
Incentive Stock Option and the provisions hereof shall be
interpreted on a basis consistent with such intent.
(a) Exercisability .
Subject to Subsection (b) below and such other applicable
conditions set forth in this Agreement and the Plan, all or part of
the Option may be exercised prior to its expiration to the extent
it has vested; provided, however, that the Option may not be
exercised for a fraction of a Share unless such exercise is with
respect to the final installment of stock subject to the Option and
a fractional share (or cash in lieu thereof) must be issued to
permit the Optionee to exercise completely such final installment.
Any fractional share with respect to which an installment of the
Option cannot be exercised because of the limitation contained in
the preceding sentence shall remain subject to the Option and shall
be available for later purchase by the Optionee in accordance with
the terms hereof.
(b) Vesting . The
Option shall vest over a period of three (3) years in twelve
(12) equal quarterly installments with vesting deemed to have
commenced on
. In the event of a termination of the Optionee’s employment
without Cause (as defined in the Optionee’s employment
agreement with the Company, or the Plan to the extent the Optionee
does not have an employment agreement with the Company) within 18
months following a Change in Control, the entire unvested portion
of the Option shall immediately vest as of the effective date of
the termination of employment. To the extent the Optionee has an
employment agreement with the Company that provides for payments
upon a termination of the Optionee’s employment for Good
Reason or upon a No Fault termination (as defined in such
employment agreement), then in the event of a termination of the
Optionee’s employment for Good Reason or for No Fault within
18 months following a Change of Control, the entire unvested
portion of the Option shall immediately vest as of the effective
date of the termination of employment.
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4. |
Method of Exercising Option. |
(a) Notice of Exercise
. The Optionee or the Optionee’s representative may exercise
the Option by giving written notice to the Company. The notice
shall specify the election to exercise the Option, the number of
Shares for which it is being exercised and the form of payment. The
notice shall be signed by the person exercising the Option. In the
event that the Option, or portion thereof, is being exercised by
the representative of the Optionee, the notice shall be accompanied
by proof (satisfactory to the Company) of the
representative’s right to exercise the Option. The Optionee
or the Optionee’s representative shall deliver to the
Company, at the time of giving the notice, payment in a form
permissible under Section 5 for the full amount of the
Purchase Price. For purposes of this Agreement, “Purchase
Price” shall mean the exercise price set forth in
Section 2 above multiplied by the number of Shares with
respect to which the Option is being exercised.
(b) Issuance of Shares
. After receiving a proper notice of exercise, the Company shall
cause to be issued a certificate or certificates for the Shares as
to which the Option has been exercised, registered in the name of
the person exercising the Option (or in the names of such person
and his or her spouse as community property or as joint tenants
with right of survivorship). The Company shall cause such
certificate or certificates to be delivered to or upon the order of
the person exercising the Option.
(c) Withholding Taxes
. In the event that the Company determines that it is required to
withhold any tax as a result of the exercise of the Option, the
Optionee, as a condition to the exercise of the Option, shall make
arrangements satisfactory to the Company to enable it to satisfy
all withholding requirements. The Optionee shall also make
arrangements satisfactory to the Company to enable it to satisfy
any withholding requirements that may arise in connection with the
vesting or disposition of Shares purchased by exercising the
Option.
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(a) Cash . All or part
of the Purchase Price may be paid in cash or cash
equivalents.
(b) Surrender of Stock
. All or any part of the Purchase Price may be paid by
surrendering, or attesting to the ownership of, Shares that are
already owned by the Optionee. Such Shares shall be surrendered to
the Company in good form for transfer and shall be valued at their
Fair Market Value on the date when the Option is exercised. The
Optionee shall not surrender, or attest to
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