Exhibit 10.3
APRIA HEALTHCARE GROUP INC.
2003 PERFORMANCE INCENTIVE PLAN
EMPLOYEE STOCK OPTION AGREEMENT
THIS EMPLOYEE STOCK OPTION AGREEMENT (this “ Option
Agreement ”) dated February 16, 2007, by and between
APRIA HEALTHCARE GROUP INC ., a Delaware corporation (the
“ Corporation ”), and
___________________________ (the “ Grantee ”),
evidences the stock option (the “Option” )
granted by the Corporation to the Grantee as to the number of
shares of the Corporation’s Common Stock first set forth
below.
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Number of
Shares of Common Stock: 1 _____
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Award Date:
February 16, 2007
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Exercise Price per Share:
1 $32.12
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Expiration Date: 1,2 February 15,
2017
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Vesting:
1,2 The Option shall become vested as to
one-third of the total number of shares of Common Stock subject to
the Option on each
of the first, second, and third anniversaries of the Award
Date.
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The
Option is granted under the Apria Healthcare Group Inc. 2003
Performance Incentive Plan (the “ Plan ”) and
subject to the Terms and Conditions of Employee Stock Option (the
“ Terms ”) attached to this Option Agreement
(incorporated herein by this reference) and to the Plan. The Option
has been granted to the Grantee in addition to, and not in lieu of,
any other form of compensation otherwise payable or to be paid to
the Grantee. Capitalized terms are defined in the Plan if not
defined herein. The parties agree to the terms of the Option set
forth herein. Without limiting the generality of the foregoing, the
Grantee specifically acknowledges and agrees to Section 8 of the
Terms (affecting the change in control provisions of certain of the
Grantee’s other outstanding awards), Section 14 of the Terms
(regarding the application of the Grantee’s Noncompetition
and Nonsolicitation Agreement), and Section 15 of the Terms
(regarding the Corporation’s Stock Ownership Requirements.)
The Grantee acknowledges receipt of a copy of the Terms and the
Plan.
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“GRANTEE”
______________________________________
Signature
______________________________________
Print Name
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APRIA
HEALTHCARE GROUP INC.
a Delaware corporation
By:__________________________________
Print Name:___________________________
Title:________________________________
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CONSENT OF SPOUSE
In
consideration of the Corporation’s execution of this Option
Agreement, the undersigned spouse of the Grantee agrees to be bound
by all of the terms and provisions hereof and of the
Plan.
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__________________________________
Signature of Spouse
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______________________
Date
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_________________
1 Subject to adjustment under
Section 7.1 of the Plan.
2 Subject to early termination
under Section 4 of the Terms and Section 7.4 of the
Plan.
TERMS AND CONDITIONS OF EMPLOYEE
STOCK OPTION
1.
Vesting; Limits on Exercise; Incentive
Stock Option Status .
The
Option shall vest and become exercisable as set forth on the cover
page of this Option Agreement. The Option may be exercised only to
the extent the Option is vested and exercisable.
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Cumulative Exercisability
. To the extent that the Option is
vested and exercisable, the Grantee has the right to exercise the
Option (to the extent not previously exercised), and such right
shall continue, until the expiration or earlier termination of the
Option.
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No Fractional Shares . Fractional share interests shall be
disregarded, but may be cumulated.
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Minimum Exercise . No fewer than 100 1 shares of
Common Stock may be purchased at any one time, unless the number
purchased is the total number at the time exercisable under the
Option.
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Incentive Stock Option Status
. The Option is intended as an
"incentive stock option" ("ISO") within the meaning of, and to the
maximum extent permitted within the limits of, Section 422 of the
Code. The Plan and Section 422 of the Code limit the number of
shares of Common Stock of the Corporation which may be treated as
acquired pursuant to an ISO so that the aggregate fair market value
of shares with respect to which ISOs become exercisable during any
calendar year under the Plan or any other plan of the Corporation
is limited to $100,000. To qualify the Option as an ISO, any other
applicable provisions of Section 422 of the Code must also be
satisfied. Any shares of Common Stock acquired pursuant to the
Option in excess of the $100,000 limitation provided under the Code
shall be treated as acquired pursuant to a nonqualified stock
option. The Grantee acknowledges that the number of shares which
may be treated as acquired pursuant to an ISO may be reduced in the
event the Grantee has been or is granted other incentive stock
options to acquire Common Stock or in the event the vesting of the
Option is accelerated. The Corporation may, in the manner and to
the extent permitted by law, designate which shares are to be
treated as stock acquired pursuant to the exercise of an
ISO.
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2.
Continuance of Employment/Service
Required; No Employment/Service Commitment .
The
vesting schedule requires continued employment or service through
each applicable vesting date as a condition to the vesting of the
applicable installment of the Option and the rights and benefits
under this Option Agreement. Employment or service for only a
portion of the vesting period, even if a substantial portion, will
not entitle the Grantee to any proportionate vesting or avoid or
mitigate a termination of rights and benefits upon or following a
termination of employment or services as provided in Section
4 below or under the Plan.
Nothing
contained in this Option Agreement or the Plan constitutes a
continued employment or service commitment by the Corporation or
any of its Subsidiaries, affects the Grantee’s status, if he
or she is an employee, as an employee at will who is subject to
termination without cause, confers upon the Grantee any right to
remain employed by or in service to the Corporation or any
Subsidiary, interferes in any way with the right of the Corporation
or any Subsidiary at any time to terminate such employment or
service, or affects the right of the Corporation or any Subsidiary
to increase or decrease the Grantee’s other
compensation.
3.
Method of Exercise of Option
.
The
Option shall be exercisable by the delivery to the Secretary of the
Corporation of a written notice stating the number of shares of
Common Stock to be purchased pursuant to the Option (or completion
of such other administrative exercise procedures as the
Administrator may require from time to time) and accompanied
by:
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payment in full for the Exercise Price of the
shares to be purchased in accordance with Section 5.5 of the
Plan, subject to such further limitations and rules or procedures
as the Administrator may establish from time to time as to any
non-cash payment;
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satisfaction of the tax withholding provisions
of Section 8.5 of the Plan; and
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any
written statements or agreements required pursuant to Section
8.1 of the Plan.
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4.
Early
Termination of Option .
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4.1
Possible Termination of Option upon Change in
Control. The Option is subject to termination in connection
with a Change in Control Event or certain similar reorganization
events as provided in Section 7.4 of the Plan, provided that
the then outstanding and otherwise unvested portion of the Option
shall have become fully vested as required or contemplated by
Section 7.2 or 7.3 of the Plan.
4.2
Termination of Option upon a Termination of Grantee’s
Employment or Services. Subject to earlier termination on the
Expiration Date of the Option or pursuant to Section 4.1
above, if the Grantee ceases to be employed by or ceases to provide
services to the Corporation or a Subsidiary, the following rules
shall apply (the last day that the Grantee is employed by or
provides services to the Corporation or a Subsidiary is referred to
as the Grantee’s “ Severance Date
”):
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other than as expressly provided below in this
Section 4.2 : (a) the Grantee will have until the date that
is 90 days after his or her Severance Date to exercise the Option
(or portion thereof) to the extent that it was vested on the
Severance Date, (b) the Option, to the extent not vested on the
Severance Date, shall terminate on the Severance Date, and (c) the
Option, to the extent exercisable for the 90-day period following
the Severance Date and not exercised during such period, shall
terminate at the close of business on the last day of the 90-day
period;
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if
the termination of the Grantee's employment is the result of the
Grantee's voluntary Retirement (as defined below and other than a
termination by the Corporation or a Subsidiary for Cause as
provided below), then (a) the Grantee will have until the date that
is 3 years after his or her Severance Date to exercise the Option
(or portion thereof) to the extent that it was vested on the
Severance Date, (b) the Option, to the extent not vested on the
Severance Date, shall terminate on the Severance Date, and (c) the
Option, to the extent exercisable for the 3-year period following
the Severance Date and not exercised during such period, shall
terminate at the close of business on the last day of the 3-year
period;
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if
the termination of the Grantee's employment is the result of the
Grantee's death or Disability (as defined below), then (a) the
Gran
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