Filed by Bowne Pure Compliance



 




Exhibit 10.1




NationsHealth, Inc.

2004 Stock Option Plan




Stock Option Agreement




NATIONSHEALTH, INC., a Delaware corporation (the “Company”), hereby grants an Option to
purchase shares of its common stock (the “Shares”) to the participant named below (“Participant”).
The terms and conditions of the Option are set forth in this Stock Option Agreement (the
“Agreement”), and in the NationsHealth, Inc. 2004 Stock Option Plan (the “Plan”).



	 	 	 	 	 
	Date of Option Grant	 	Expiration Date

	 
	 	 	 	 
	Participant’s Name

	 	 	 	          SSN                     
	 
	 	 	 	 
	Type of Option 

     (Check applicable 

     box(es))

	 	The Option is

o an Incentive Stock Option

o a Non-qualified Stock Option	 	 
	 
	 	 	 	 
	Number of Shares	 	                    
Shares, with an Exercise Price of
$             per Share.
	 
	 	 	 	 
	Vesting	 	The Option to purchase                      Shares will vest according to the vesting schedule below.






	 	 	 	 	 	 	 	 	 
	Vesting Schedule	 	 	 	Percent	 	 	 	Percent
	 	 	Date	 	Vested*	 	Date	 	Vested*
	 

	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 








			
	*	 	“Percent Vested” refers to the percentage of Shares with respect to which the Option may be exercised.





	 	 	 
	Termination of Service

Prior to Expiration

Date

	 	If the Participant has a Termination
of Service (not for Cause) prior to
the Expiration Date, the time to
exercise the Option shall be
limited, as follows:
	 

	 	•     Unless the Termination of
Service is the result of the
Participant’s death or Disability,
the Participant may exercise the
Option up to three (3) months after
the Termination of Service.

	 
	 	 
	 

	 	•     If the Termination of
Service is the result of the
Participant’s Disability, the
Participant may exercise the Option
up to twelve (12) months after the
Termination of Service.

	 
	 	 
	 

	 	•     If the Termination of
Service is the result of the
Participant’s death, the
Participant’s Beneficiary may
exercise the Option up to twelve
(12) months after the Termination of
Service.







My signature at the end of this Agreement indicates that I understand and agree to the terms
and conditions set forth in this Agreement and the Plan.
Initials: ___ Date:                     


 


 









 





NationsHealth, Inc.

2004 Stock Option Plan

Stock Option Agreement




Stock Option Agreement




This Agreement evidences the grant of an Option under the NationsHealth, Inc. 2004 Stock
Option Plan. The name of the recipient, the number of Shares covered by the Option, and other
variable terms are set forth in the cover page, which is part of this Agreement. The words “you,”
“your,” and similar terms refer to the Participant to whom this Option is granted.




The Option is subject to the following terms and conditions:



	 	 	 
	Definitions and the

Plan

	 	All capitalized terms that are not otherwise defined in this Agreement have
the meanings set forth in the Plan, the text of which is incorporated into
this Agreement by reference. In case of any conflict between this
Agreement and the Plan, the terms of the Plan shall control. For purposes
of this Agreement, the following definitions apply:
	 
	 	 
	 

	 	“Affiliate” means an entity that is a “parent corporation” (as defined in
Section 424(e) of the Code) or a “subsidiary corporation” (as defined in
Section 424(f) of the Internal Revenue Code (the “Code”)) with respect to
the Company, whether now or hereafter existing.
	 
	 	 
	 

	 	“Applicable Laws” means the requirements relating to, connected with, or
otherwise implicated by the administration of this Plan under applicable
state corporation laws, United States federal and state securities laws,
the Code, any stock exchange or quotation system on which the Shares are
listed or quoted, and the applicable laws of any foreign country or
jurisdiction where Options are, or will be, granted under the Plan.
	 
	 	 
	 

	 	“Beneficiary” means the personal representative of the Participant’s estate
or the person(s) to whom an Option is transferred pursuant to the
Participant’s will or in accordance with the laws of descent or
distribution.
	 
	 	 
	 

	 	“Disability” means total and permanent disability (as defined in Section
22(e)(3) of the Code).
	 
	 	 
	 

	 	“Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.
	 
	 	 
	 

	 	“Termination of Service” means the date an individual ceases to be an
employee, director or consultant of the Company. Unless the Committee or a
Company policy provides otherwise, a leave of absence authorized by the
Company or the Committee (including sick leave or military leave) from
which return to service is not guaranteed by statute or contract shall be
characterized as a Termination of Service if the individual does not return
to service within three months; such Termination of Service shall be
effective as of the first day that is more than three months after the
beginning of the period of leave. If the ability to return to service upon
the expiration of such leave is guaranteed by statute or contract, but the
individual does not return, the leave shall be characterized as a
Termination of Service as of a date established by the Committee or Company
policy.
	 
	 	 
	 

	 	“Stockholder” means any individual who owns or is treated as owning any
stock of the Company.
	 
	 	 
	Term

	 	Subject to the Termination of Service provisions set forth in the cover
page and the provisions that apply in case of Termination of Service for
Cause, this Option shall expire at 5:00 p.m. Eastern Time on the Expiration
Date set forth in the cover page.





 


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NationsHealth, Inc.

2004 Stock Option Plan

Stock Option Agreement




	 	 	 
	Number of Shares

and Exercise Price

	 	To the extent vested (and prior to the end of the Term described above),
this Option gives you the right to purchase the number of Shares set forth
in the cover page, at the Exercise Price set forth in the cover page.
	 
	 	 
	 

	 	The Exercise Price is subject to Section 6 of the Plan and to Section 422
of the Internal Revenue Code, which provides that the Exercise Price may
not be less than the Fair Market Value (or, if this Option is an Incentive
Stock Option and you are a 10% Stockholder, 110% of the Fair Market Value)
of the Shares on the Date of Option Grant.
	 
	 	 
	 

	 	The number of Shares and/or Exercise Price may be adjusted to reflect a
stock split or other corporate transaction or event, in the sole discretion
of the Committee.
	 
	 	 
	Vesting

	 	The cover page indicates the criteria for vesting.

	 
	 	 
	

	 	With respect to any portion of this Option that vests according to the
Vesting Schedule set forth in the cover page, a leave of absence shall not
count as service, except as required by law.
	 
	 	 
	 

	 	In addition, this Option shall vest upon the occurrence of any vesting
event (for example, onset of Disability or a change in control of the
Company) set forth in a separate written agreement between you and the
Company.
	 
	 	 
	Special Provisions

for Incentive Stock

Options

	 	If this Option is an Incentive Stock Option, the following provisions apply:


•     Although the Option is intended to be an Incentive Stock Option,
the Company does not warrant that the Option will be treated as an
Incentive Stock Option for tax purposes. To the extent that the Option
fails for any reason to satisfy the requirements applicable to Incentive
Stock Options, the Option shall be a Non-qualified Stock Option.

	 
	 	 
	 

	 	•     The Option will not be treated as an Incentive Stock Option for tax
purposes if you sell or otherwise dispose of Shares issued upon exercise
before the later of: (i) the first anniversary of the date the Shares are
delivered to you, or (ii) the second anniversary of the Date of Option
Grant. Any earlier sale or disposition of the Shares will be a
“disqualifying disposition.” You must notify the Company of any
disqualifying disposition within 30 days after a disqualifying disposition
occurs.

	 
	 	 
	 

	 	•     Any portion of the Option that is exercised more than three months
after your Termination of Service for any reason other than Disability or
death (to the extent the Option has not expired) shall be treated as a
Nonstatutory Stock Option. In case of Termination of Service due to
Disability, the three-month period shall be extended to 12 months. If you
die before exercising the Option, it may be treated as an Incentive Stock
Option only to the extent that the Option would have been treated as an
Incentive Stock Option if you had exercised it on the date of your death.

	 
	 	 
	Exercise

	 	To exercise this Option, you (or your Beneficiary, in the case of exercise
after your death) must complete a Notice of Exercise, which may be written
or electronic, and file it at the address shown on the form. Your Notice
of Exercise must indicate the number of Shares you wish to purchase and
will not be accepted if it is incomplete. You may not purchase fractional
Shares: any request for fractional Shares will be rounded down to the next
lowest whole number of Shares.
	 
	 	 
	 

	 	A sample Notice of Exercise appears as Appendix A to this Agreement.
	 
	 	 
	 

	 	You will not have any of the rights of a Stockholder with respect to the
Shares under this Agreement until (1) you exercise the Option, (2) the
Company receives full payment for the Shares, and (3) the Shares are
transferred to you.





 


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NationsHealth, Inc.

2004 Stock Option Plan

Stock Option Agreement




	 	 	 
	Payment Upon

Exercise

	 	When you (or your Beneficiary) submit your Notice of Exercise, you must
include payment of the Exercise Price for the Shares you are purchasing.
(You might also have to include payment for tax withholding, as described
below.) Unless otherwise approved by the Committee, payment for the Shares
must be made by cash or check. With approval from the Committee, however,
payment may be made in either of the following additional forms:
	 
	 	 
	 

	 	•     Tender or Attestation of Shares: You may tender whole Shares to the
Company with a Fair Market Value equal to the Exercise Price. Instead of
actually tendering Shares to the Company, you may attest that you own
Shares with a Fair Market Value equal to the Exercise Price, and the
Company will reduce the number of Shares issuable upon exercise by the
number of Shares required to cover the Exercise Price. Shares attested to
or tendered in order to pay the Exercise Price may not be Restricted Stock,
and you must have owned the Shares for at least six months.

	 
	 	 
	 

	 	•     Broker-Assisted Cashless Exercise: You may instruct the Company to
deliver the Shares issuable upon exercise to a broker (acceptable to the
Company); you must give the broker irrevocable instructions to sell enough
Shares to pay the Exercise Price and to deliver the Exercise Price to the
Company. For purposes of a broker-assisted cashless exercise, the Shares
are deemed to have a Fair Market Value on the Option exercise date equal to
the price at which the broker sold the Shares to pay the Exercise Price.
(Because of the rules prohibiting them from receiving loans or other
extensions of credit from the Company, directors and executive officers of
the Company are not eligible to use the cashless exercise method.)

	 
	 

	 	All or part of the Option is deemed exercised when the Committee receives
(i) your (or your Beneficiary’s) Notice of Exercise and (ii) full payment
for the Shares with respect to which the Option is exercised.
	 
	 

	 	The Committee or the Company may for any reason decline to accept payment
by exchange of Shares, or may impose such limitations or restrictions on
the form of payment as it deems advisable.
	 
	 	 
	Withholding

	 	If you received the Option as an employee of the Company, the Company must
withhold income and employment taxes when you (or your Beneficiary)
exercise the Option. The Company may either (i) require you (or your
Beneficiary) to remit to the Company cash and/or Shares in an amount
sufficient to satisfy all federal, state, and local withholding
obligations, or (ii) upon your request and with approval from the
Committee, withhold Shares that would otherwise be delivered.

	 
	 	 
	

	 	As set forth in Section 15 of the Plan, you remain responsible at all times
for paying any federal, state, and local income and employment taxes with
respect to this Option. NationsHealth is not responsible for any liability
or penalty that you incur by failing to make timely payments of tax.
	 
	 	 
	Nontransferability

	 	Unless the Committee determines otherwise, you may not transfer the Option,
except pursuant to a will or in accordance with the laws of descent or
distribution. However, if approved by the Committee (subject to terms and
conditions that the Committee may establish), and provided that this Option
is a Nonstatutory Stock Option, you may transfer all or part of the Option
to a member of your immediate family (i.e., spouse, child, stepchild,
grandchild, parent, grandparent, or sibling).
	 
	 	 




 


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NationsHealth, Inc.

2004 Stock Option Plan

Stock Option Agreement




	 	 	 
	Restrictions on

Exercise, Delivery,

and Resale

	 	You may not exercise this Option or sell any Shares acquired under this
Option at a time when the exercise or sale would be prohibited under
Applicable Laws.


You may not exercise this Option after an event constituting “Cause” (as
defined in the following section) occurs, unless you are notified by the
Committee your right to exercise has been reinstated.
	 
	 	 
	 

	 	Shares shall not be delivered until (i) all conditions of this Agreement
have been met to the satisfaction of the Committee, (ii) all other legal
matters in connection with the issuance and delivery of the Shares have
been satisfied, and (iii) you have executed and delivered all
representations and agreements as are necessary and appropriate to satisfy
the requirements of any Applicable Laws.
	 
	 	 
	 

	 	If you are terminated for Cause, the Company has the right and option to
repurchase all or any portion of the Issued Shares received by the exercise
of the Option. The per share purchase price of the Issued Shares subject
to the repurchase shall be equal to the Exercise Price.
	 
	 	 
	Forfeiture Upon

Termination of

Service for Cause

	 	If you experience a Termination of Service that is initiated by the Company
for “Cause” (as defined below), this Option (whether vested or not vested)
shall immediately expire and shall be null and void.
	 

	 	If you are covered by an employment agreement or consulting agreement at
the time of your Termination of Service, and if the employment agreement or
consulting agreement includes provisions relating to termination for cause,
your termination for cause within the meaning of the employment agreement
or consulting agreement shall constitute a Termination of Service for
“Cause” within the meaning of this Agreement.
	 
	 	 
	 

	 	If you are not covered by an employment agreement or consulting agreement
that includes provisions relating to termination for cause, “Cause” shall
mean (i) any breach or violation by you of any agreement between you and
the Company or an Affiliate; (ii) any act or omission to act by you that
would be reasonably likely to have the effect of injuring the reputation,
business, or business relationships of the Company, or of impairing your
ability to perform services for the Company or an Affiliate; (iii) your
conviction (including without limitation a plea of guilty or nolo
contendere) of any crime other than an ordinary traffic violation; (iv) any
material misconduct or willful and deliberate non-performance of duties by
you in connection with the Company’s or an Affiliate’s business or affairs;
(v) your theft, dishonesty, misrepresentation, or falsification of the
Company’s or an Affiliate’s documents or records; (vi) your improper use or
disclosure of the Company’s or an Affiliate’s confidential or proprietary
information; or (vii) your use of the Company’s or an Affiliate’s
facilities, premises, or property to conduct unlawful or unauthorized
activities or transactions.
	 
	 	 
	Lock-up Provision

	 	If the Company proposes to make a public offering of Shares, the Company or
an underwriter might request that you do not sell or otherwise directly or
indirectly dispose of Shares delivered under this Agreement for a
reasonable period after the offering, not to exceed 90 days. Your right to
any Shares received under this Agreement is contingent on your agreeing to
comply with such a request.
	 
	 	 
	Notices

	 	Any notice from you to the Company must be in writing and shall be deemed
effective when it is received by the Secretary of the Company at the
Company’s principal office.
	 
	 	 
	 

	 	Any notice from the Company to you must be in writing and shall be deemed
effective when it is personally delivered to you or when it is deposited in
the U.S. Mail, with postage and fees prepaid.





 


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NationsHealth, Inc.

2004 Stock Option Plan

Stock Option Agreement




	 	 	 
	Not an Employment

Contract

	 	This Agreement is not an employment agreement and does not give you any
right to continued employment (or other service relationship) with the
Company or an Affiliate. Unless provided otherwise in a written agreement
between you and the Company or an Affiliate, your employment (or other
service relationship) is “at-will” and may be terminated at any time and
for any reason.
	 
	 	 
	Amendment and

Termination

	 	This Agreement may be amended or terminated by mutual agreement, in
writing, signed by you and the Company. To the extent required to comply
with an Applicable Law or accounting principle, this Agreement may be
amended by the Company without your consent.
	 
	 	 
	Governing Law

	 	As set forth in Section 19 of the Plan, this Agreement shall be governed by
and interpreted in accordance with Delaware law (without regard to any
principles of Delaware law that might direct resolution to the laws of a
different jurisdiction).





 


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NationsHealth, Inc.

2004 Stock Option Plan

Stock Option Agreement




	 	 	 
	Interpretation and
Construction

	 	This Agreement shall be construed
and interpreted by the Committee in
its sole discretion. Any
interpretation or other
determination by the Committee shall
be binding and conclusive
(including, without limitation,
correction of any defect or omission
and reconciliation of any
inconsistency in the Agreement or
the Plan).
	 
	 	 
	Entire Understanding

	 	This Agreement and the Plan
constitute the entire understanding
between you and the Company
regarding this Option. Any prior
agreements, commitments, or
negotiations concerning this Option
are superseded.






	 	 	 	 	 	 	 	 	 
	 	 	NationsHealth, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 






I have read this Agreement and the Plan, and I understand and agree to their terms and conditions.



	 	 	 	 	 
	 
	 

	 	 

Participant’s Signature
	 	 
	 
	 	 	 	 
	 
	 

	 	 

Participant’s Name (please print)
	 	 





 


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Exhibit 10.1




Nationshealth, Inc.


2004 Stock Option Plan




Appendix A:

Sample Notice of Exercise




	 	 	 	 	 
	 


	 	Name	 	 
	 


	 	 	 	 
	 
	 	 	 	 
	 


	 	Address:	 	 
	 


	 	 	 	 
	 
	 	 	 	 
	 


	 	 	 	 
	 
	 	 	 	 
	 



	 	 	 	 
	 
	 	 	 	 
	 


	 	Date:
	 	_______________, 20___






NationsHealth, Inc.

13650 NW 8th Street

Sunrise, FL 33325

Attention: Chief Financial Officer




By a Stock Option Agreement dated                     , 20___(the “Option Agreement”), I am
the holder of an Option granted under the NationsHealth, Inc. 2004 Stock Option Plan (the “Plan”)
to purchase up to                      shares of NationsHealth common stock (the “Shares”) at an exercise
price of $                     per Share. My Option is (circle one) [an Incentive] [a Nonstatutory] Stock
Option.



I hereby exercise my Option to purchase                      Shares, for which the total exercise price
is $                    . I have arranged to pay the exercise price as follows:



	 	 	 
	 


	 	I am enclosing with this notice a check for $                    .
	 

	 	 
	

 


	 	With approval from the Compensation Committee of NationsHealth’s
Board of Directors (the “Committee”), I have arranged to tender
                     Shares, with a Fair Market Value of $                    . I
certify that I have owned the Shares that I am tendering for more
than six months and that the Shares are not restricted.
	 

	 	 
	
 


	 	With approval from the Committee, I hereby attest that I have owned Shares,
with a current Fair Market Value of $ ,
for more than six months, and that I continue to own such Shares. I
acquired these Shares on [insert date] for a purchase
price of $ . I authorize NationsHealth to reduce the
number of Shares deliverable upon exercise by the number of Shares
whose ownership I have attested.
	 

	 	 
	
 


	 	With approval from the Committee, I hereby instruct NationsHealth to deliver the Option Shares
to                                          (the “Broker”) to be credited to my account number                     . The
Broker’s address and telephone number are:                                                                                 . I certify that I have
instructed the Broker to sell Shares with a Fair Market Value of at
least $                     (after any commissions or other expenses of the sale), and to deliver
$                     to NationsHealth from the proceeds of the sale.
	 

	 	 






 


 









 





NationsHealth, Inc.

Page 2



I understand that my Option may be exercised only to the extent that it is vested, and that it will
not be deemed exercised with respect to any Shares until the exercise price has been received by
the Chief Financial Officer of NationsHealth (or by a person designated by the Chief Financial
Office).




I understand that if I received my Option as an employee of NationsHealth, exercise of my
Option might trigger certain federal, state, and local tax withholding obligations (although
withholding will not be required with respect to exercise of an Incentive Stock Option). I have
arranged to satisfy the withholding obligations in the following manner:



	 	 	 
	
 


	 	I am enclosing with this notice a check for $                    , which
NationsHealth has determined to be sufficient to satisfy all
withholding obligations.
	 
	
 


	 	With approval from the Committee, I authorize NationsHealth to
withhold Shares with a Fair Market Value equal to the amount that
must be withheld. I understand that only whole Shares will be
withheld and that any fractional Shares required to be withheld will
be rounded up to the next whole Share.





Notwithstanding the provisions for withholding, I understand that I remain responsible at all times
for paying any federal, state, and local income and employment taxes with respect to my Option and
that NationsHealth is not responsible for any liability or penalty that I incur by failing to make
timely payments of tax.




Please register my stock certificate as follows:



	 	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 

	 	 

	 	 
	Tax I.D. #:
	 	 	 	 
	 

	 	 

	 	 






If my Option is an Incentive Stock Option, I will notify NationsHealth’s Chief Financial
Officer within 30 days after any transfer of Shares acquired pursuant to my exercise of the Option
that occurs within one (1) year after the date of exercise or within two (2) years after the date
the Option was granted.


 


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NationsHealth, Inc.

Page 3




I further understand and acknowledge that my exercise of this Option and receipt of the Shares
are subject to the terms and conditions of the Plan and the Option Agreement, which I have received
and carefully reviewed. I understand the terms and conditions and agree to be bound by them.



	 	 	 
	 

	 	Sincerely,
	 
	 
	 	 
	 

	 	 
	 

	 	Signature





Received by NationsHealth, Inc.:                     , 20___




	 	 	 	 	 
	Approved	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 







 


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