**EXHIBIT 10.27**

 

AMENDED 

LINCAREHOLDINGS INC. 

2001 STOCK PLAN

 

1.    Purpose.    The purpose of the Lincare Holdings Inc. 2001 Stock Plan (the “Plan”) is topromote the interests of Lincare Holdings Inc., a Delaware corporation (the “Company”), and any Subsidiary thereof and the interests of the Company’s stockholders by providing an opportunity to selected employees, officers anddirectors of the Company or any Subsidiary thereof as of the date of the adoption of the Plan or at any time thereafter to purchase Common Stock of the Company. By encouraging such stock ownership, the Company seeks to attract, retain and motivatesuch employees and persons and to encourage such employees and persons to devote their best efforts to the business and financial success of the Company. It is intended that this purpose will be effected by the granting of “non-qualified stockoptions” and/or “incentive stock options” to acquire the Common Stock of the Company. Under the Plan, the Committee shall have the authority (in its sole discretion) to grant “incentive stock options” within the meaning ofSection 422(b) of the Code and/or “non-qualified stock options” as described in Treasury Regulation Section 1.83-7 or any successor regulation thereto. 

 

2.    Definitions.    For purposes of the Plan, the following terms usedherein shall have the following meanings, unless a different meaning is clearly required by the context. 

 

2.1.    “Board of Directors” shall mean the Board of Directors of the Company. 

 

2.2.    “Code” shall mean the InternalRevenue Code of 1986, as amended. 

 

2.3.    “Committee” shall mean the committee of the Board of Directors referred to in Section 5 hereof. 

 

2.4.    “Common Stock” shall mean the Common Stock, $.01 par value, of the Company. 

 

2.5.    “Employee” shall mean (i) withrespect to an ISO, any person, including an officer or director of the Company, who, at the time an ISO is granted to such person hereunder, is employed on a full-time basis by the Company or any Subsidiary of the Company, and (ii) with respect to aNon-Qualified Option, any person employed by, or performing services for, the Company or any Subsidiary of the Company, including, without limitation, directors and officers. 

2.6.    “ISO” shall mean an Option granted to a Participant pursuantto the Plan that constitutes and shall be treated as an “incentive stock option” as defined in Section 422(b) of the Code. 

 

2.7.    “Non-Qualified Option” shall mean an Option granted to a Participant pursuant to the Plan that is intended tobe, and qualifies as, a “non-qualified stock option” as described in Treasury Regulation Section 1.83-7 or any successor regulation thereto and that shall not constitute nor be treated as an ISO. 

 

2.8.    “Option” shall mean any ISO orNon-Qualified Option granted to an Employee pursuant to the Plan. 

 

2.9.    “Participant” shall mean any Employee to whom an Option is granted under the Plan. 

 

2.10.    “Parent of the Company” shall have the meaning set forth in Section 424(e) of the Code. 

 

2.11.    “Subsidiary of the Company”shall have the meaning set forth in Section 424(f) of the Code. 

 

3.    Eligibility.    Options may be granted to any Employee. The Committee shall have the sole authority to select the persons to whom Options are to be granted hereunder, and to determinewhether a person is to be granted a Non-Qualified Option or an ISO or any combination thereof. No person shall have any right to participate in the Plan. Any person selected by the Committee for participation during any one period will not by virtueof such participation have the right to be selected as a Participant for any other period. 

 

4.    Common Stock Subject to the Plan. 

 

4.1    Number of Shares.    The total number of shares of Common Stock for which Options may be grantedunder the Plan shall not exceed in the aggregate Six Million Five Hundred Thousand (6,500,000) shares of Common Stock (subject to adjustment as provided in Section 7 hereof). The total number of shares of Common Stock for which Options may begranted under the Plan to any individual in any fiscal year shall not exceed Six Hundred Thousand (600,000) shares of Common Stock (subject to adjustment as provided in Section 7 hereof). 

 

4.2    Reissuance.    The shares of Common Stock that may be subject toOptions granted under the Plan may be either authorized and unissued shares or shares reacquired at any time and now or hereafter held as treasury stock as the Board of Directors may determine. In the event that any outstanding Option expires or isterminated for any reason, the shares allocable to the unexercised portion of such 

 

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Option may again be subject to an Option granted under the Plan. If any shares of Common Stock acquired pursuant to theexercise of an Option shall have been repurchased by the Company, then such shares shall again become available for issuance pursuant to the Plan. 

 

4.3    Special ISO Limitations. 

 

(a)    The aggregate fair market value (determined as of the date an ISO is granted) of the shares of Common Stock with respect towhich ISOs are exercisable for the first time by an Employee during any calendar year (under all Incentive Stock Option Plans of the Company or any Parent or Subsidiary of the Company) shall not exceed $100,000. 

 

(b)    No ISO shall be granted to an Employee who, at thetime the ISO is granted, owns (actually or constructively under the provisions of Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary of theCompany, unless the option price is at least 110% of the fair market value (determined as of the time the ISO is granted) of the shares of Common Stock subject to the ISO and the ISO by its terms is not exercisable more than five years from the dateit is granted. 

 

4.4    Limitations NotApplicable to Non-Qualified Options.    Notwithstanding any other provision of the Plan, the provisions of Sections 4.3(a) and (b) shall not apply, nor shall be construed to apply, to any Non-Qualified Option granted underthe Plan. 

 

5.    Administration of thePlan. 

 

5.1.    Administration.    The Plan shall be administered by a committee of the Board of Directors (the “Committee”) established by the Board of Directors and consisting of no lessthan two persons. All members of the Committee shall be “non-employee directors” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”). The Committee shall be appointed fromtime to time by, and shall serve at the pleasure of, the Board of Directors. 

 

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5.2.    Grant of Options.    The Committee shall have thesole authority and discretion under the Plan (i) to select the Employees who are to be granted Options hereunder; (ii) to designate whether any Option to be granted hereunder is to be an ISO or a Non-Qualified Option; (iii) to establish the numberof shares of Common Stock that may be issued under each Option; (iv) to determine the time and the conditions subject to which Options may be exercised in whole or in part; (v) to determine the form of the consideration that may be used to purchaseshares of Common Stock upon exercise of any Option (including the circumstances under which the Company’s issued and outstanding shares of Common Stock may be used by a Participant to exercise an Option); (vi) to impose restrictions and/orconditions with respect to shares of Common Stock acquired upon exercise of an Option; (vii) to determine the circumstances under which shares of Common Stock acquired upon exercise of any Option may be subject to repurchase by the Company; (viii)to determine the circumstances and conditions subject to which shares acquired upon exercise of an Option may be sold or otherwise transferred, including, without limitation, the circumstances and conditions subject to which a proposed sale ofshares of Common Stock acquired upon exercise of an Option may be subject to the Company’s right of first refusal (as well as the terms and conditions of any such right of first refusal); (ix) to establish a vesting provision for any Optionrelating to the time when (or the circumstances under which) the Option may be exercised by a Participant, including, without limitation, vesting provisions that may be contingent upon (A) the Company’s meeting specified financial goals, (B) achange of control of the Company or (C) the occurrence of other specified events; (x) to accelerate the time when outstanding Options may be exercised, provided, however, that any ISOs shall be “accelerated” within themeaning of Section 424(h) of the Code; and (xi) to establish any other terms, restrictions and/or conditions applicable to any Option not inconsistent with the provisions of the Plan. Notwithstanding anything in the Plan to the contrary, in no eventshall any Option granted to any director or officer of the Company who is subject to Section 16 of the Exchange Act become exercisable, in whole or in part, prior to the date that is six months after the date such Option is granted to such directoror officer. 

 

5.3.    Interpretation.    The Committee shall be authorized to interpret the Plan and may, from time to time, adopt such rules and regulations, not inconsistent with the provisions of thePlan, as it may deem advisable to carry out the purposes of the Plan. 

 

5.4.    Finality.    The interpretation and construction by the Committee of any provision of the Plan, any Option granted hereunder or any agreement evidencing any such Option shall be finaland conclusive upon all parties. 

 

5.5.    Voting.    Members of the Committee may vote on any matter affecting the administration of the Plan or the granting of Options under the Plan. 

 

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5.6.    Expenses, Etc.    All expenses and liabilitiesincurred by the Committee in the administration of the Plan shall be borne by the Company. The Committee may employ attorneys, consultants, accountants or other persons in connection with the administration of the Plan. The Company, and its officersand directors, shall be entitled to rely upon the advice, opinions or valuations of any such persons. No member of the Committee shall be liable for any action, determination or interpretation taken or made in good faith with respect to the Plan orany Option granted hereunder. 

 

6.    Terms and Conditions of Options. 

 

6.1.    ISOs.    The terms and conditions of each ISO granted under the Plan shall be specified by the Committee and shall be set forth in an ISO agreement between theCompany and the Participant in such form as the Committee shall approve. The terms and conditions of each ISO shall be such that each ISO issued hereunder shall constitute and shall be treated as an “incentive stock option” as defined inSection 422(b) of the Code. The terms and conditions of any ISO granted hereunder need not be identical to those of any other ISO granted hereunder. 

 

The terms and conditions of each ISO shall include the following: 

 

(a)    The option price shall be fixed by the Committee but shall in no event be less than 100% (or 110% in the case of an Employeereferred to in Section 4.3(b) hereof) of the fair market value of the shares of Common Stock subject to the ISO on the date the ISO is granted. For purposes of the Plan, the fair market value per share of Common Stock as of any day shall mean theaverage of the closing prices of sales of shares of Common Stock on all national securities exchanges on which the Common Stock may at the time be listed or, if there shall have been no sales on any such day, the average of the highest bid andlowest asked prices on all such exchanges at the end of such day, or, if on any day the Common Stock shall not be so listed, the average of the representative bid and asked prices quoted in the NASDAQ system as of 3:30 p.m., New York time, on suchday, or, if on any day the Common Stock shall not be quoted in the NASDAQ system, the average of the high and low bid and asked prices on such day in the over-the-counter market as reported by National Quotation Bureau Incorporated, or any similarsuccessor organization. If at any time the Common Stock is not listed on any national securities exchange or quoted in the NASDAQ system or the over-the-counter market, the fair market value of the shares of Common Stock subject to an Option on thedate the ISO is granted shall be the fair market value thereof determined in good faith by the Board of Directors. 

 

(b)    ISOs, by their terms, shall not be transferable otherwise than by will or the laws of descent and distribution, and, during anOptionee’s lifetime, an ISO shall be exercisable only by the Optionee. 

 

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(c)    The Committee shall fix the term of all ISOs granted pursuant to the Plan(including the date on which such ISO shall expire and terminate), provided, however, that such term shall in no event exceed ten years from the date on which such ISO is granted (or, in the case of an ISO granted to an Employeereferred to in Section 4.3(b) hereof, such term shall in no event exceed five years from the date on which such ISO is granted). Each ISO shall be exercisable in such amount or amounts, under such conditions and at such times or intervals or in suchinstallments as shall be determined by the Committee in its sole discretion, provided, however, that in no event shall any ISO granted to any director or officer of the Company who is subject to Section 16 of the Exchange Act becomeexercisable, in whole or in part, prior to the date that is six months after the date such ISO is granted to such director or officer. 

 

(d)    To the extent that the Company or any Parent or Subsidiary of the Company is required to withhold any Federal, state or localtaxes in respect of any compensation income realized by any Participant as a result of any “disqualifying disposition” of any shares of Common Stock acquired upon exercise of an ISO granted hereunder, the Company shall deduct from anypayments of any kind otherwise due to such Participant the aggregate amount of such Federal, state or local taxes required to be so withheld or, if such payments are insufficient to satisfy such Federal, state or local taxes, such Participant willbe required to pay to the Company, or make other arrangements satisfactory to the Company regarding payment to the Company of, the aggregate amount of any such taxes. All matters with respect to the total amount of taxes to be withheld in respect ofany such compensation income shall be determined by the Board of Directors in its sole discretion. 

 

(e)    In the sole discretion of the Committee the terms and conditions of any ISO may (but need not) include any of the followingprovisions: 

 

(i)    In theevent a Participant shall cease to be employed by the Company or any Parent or Subsidiary of the Company on a full-time basis for any reason other than as a result of his death or “disability” (within the meaning of Section 22(e)(3) of theCode), the unexercised portion of any ISO held by such Participant at that time may only be exercised within one month after the date on which the Participant ceased to be so employed, and only to the extent that the Participant could have otherwiseexercised such ISO as of the date on which he ceased to be so employed. 

 

(ii)    In the event a Participant shall cease to be employed by the Company or any Parent or Subsidiary of the Company on a full-time basis by reason of his “disability” (within themeaning of Section 22(e)(3) of the Code), the unexercised portion of any ISO held by such Participant at that time may only be exercised within one year after the date on which the Participant ceased to be so employed, and only to the extent thatthe Participant could have otherwise exercised such ISO as of the date on which he ceased to be so employed. 

 

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(iii)    In the event a Participant shall die while in the full-timeemploy of the Company or a Parent or Subsidiary of the Company (or within a period of one month after ceasing to be an Employee for any reason other than his “disability” or within a period of one year after ceasing to be an Employee byreason of such “disability”), the unexercised portion of any ISO held by such Participant at the time of his death may only be exercised within one year after the date of such Participant’s death, and only to the extent that theParticipant could have otherwise exercised such ISO at the time of his death. In such event, such ISO may be exercised by the executor or administrator of the Participant’s estate or by any person or persons who shall have acquired the ISOdirectly from the Participant by bequest or inheritance. 

 

6.2.    Non-Qualified Options.    The terms and conditions of each Non-Qualified Option granted under the Plan shall be specified by the Committee, in its sole discretion, and shall be setforth in a written option agreement between the Company and the Participant in such form as the Committee shall approve. The terms and conditions of each Non-Qualified Option will be such (and each Non-Qualified Option Agreement shall expressly sostate) that each Non-Qualified Option issued hereunder shall not constitute nor be treated as an “incentive stock option” as defined in Section 422(b) of the Code but will be a “non-qualified stock option” for Federal, state andlocal income tax purposes. The terms and conditions of any Non-Qualified Option granted hereunder need not be identical to those of any other Non-Qualified Option granted hereunder. 

 

The terms and conditions of each Non-Qualified Option Agreement shall include the following: 

 

(a)    The option (exercise) price shall be fixed by theCommittee and may be equal to or more than (but shall not be less than) 100% of the fair market value of the shares of Common Stock subject to the Non-Qualified Option on the date such Non-Qualified Option is granted. 

 

(b)    The Committee shall fix the term of allNon-Qualified Options granted pursuant to the Plan (including the date on which such Non-Qualified Option shall expire and terminate). Such term may be more than ten years from the date on which such Non-Qualified Option is granted. EachNon-Qualified Option shall be exercisable in such amount or amounts, under such conditions (including provisions governing the rights to exercise such Non-Qualified Option), and at such times or intervals or in such installments as shall bedetermined by the Committee in its sole discretion, provided, however, that in no event shall any Non-Qualified Option granted to any director or officer of the Company who is subject to Section 16 of the Exchange Act becomeexercisable, in whole or in part, prior to the date that is six months after the date such Non-Qualified Option is granted to such director or officer. 

 

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(c)    To the extent that the Company is required to withhold any Federal, state orlocal taxes in respect of any compensation income realized by any Participant in respect of a Non-Qualified Option granted hereunder or in respect of any shares of Common Stock acquired upon exercise of a Non-Qualified Option, the Company shalldeduct from any payments of any kind otherwise due to such Participant the aggregate amount of such Federal, state or local taxes required to be so withheld or, if such payments are insufficient to satisfy such Federal, state or local taxes, or ifno such payments are due or to become due to such Participant, then, such Participant will be required to pay to the Company, or make other arrangements satisfactory to the Company regarding payment to the Company of, the aggregate amount of anysuch taxes. All matters with respect to the total amount of taxes to be withheld in respect of any such compensation income shall be determined by the Board of Directors in its sole discretion. 

 

7.    Adjustments.    In theevent that, after the adoption of the Plan by the Board of Directors, the outstanding shares of the Company’s Common Stock shall be increased or decreased or changed into or exchanged for a different number or kind of shares of stock or othersecurities of the Company or of another corporation through reorganization, merger or consolidation, recapitalization, reclassification, stock split, split-up, combination or exchange of shares or declaration of any dividends payable in CommonStock, the Board of Directors shall appropriately adjust (i) the number of shares of Common Stock (and the option price per share) subject to the unexercised portion of any outstanding Option (to the nearest possible full share), provided,however, that the limitations of Section 424 of the Code shall apply with respect to adjustments made to ISOs; and (ii) the number of shares of Common Stock for which Options may be granted under the Plan, as set forth in Section 4.1 hereof,and such adjustments shall be effective and binding for all purposes of the Plan. 

 

8.    Effect of the Plan on Employment Relationship.    Neither the Plan nor any Option granted hereunder to a Participant shall be construed as conferring upon suchParticipant any right to continue in the employ of (or otherwise provide services to) the Company or any Subsidiary or Parent thereof, or limit in any respect the right of the Company or any Subsidiary or Parent thereof to terminate suchParticipant’s employment or other relationship with the Company or any Subsidiary or Parent, as the case may be, at any time. 

 

9.    Amendments of the Plan.    The Board of Directors may amend, alter or discontinue the Plan, exceptthat (i) no amendment of alteration that would impair the rights of any Optionee under any Option granted hereunder shall be made without his or her consent, and (ii) without the approval of the holders of a majority of the shares of Common Stockpresent or represented and entitled to vote thereon at a meeting of stockholders, no amendment of alteration shall be made that would: 

 

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(a)    modify the terms of ISOs in any manner that would require shareholder approvalunder Section 422 of the Code; 

 

(b)    materially increase the total number of shares of Common Stock issuable under the Plan, except in accordance with Section 7 hereof; 

 

(c)    materially modify the requirements as to eligibility for participation in the Plan; 

 

(d)    materially increase the benefits accruing toParticipants; or 

 

(e)    cause the Plan notto comply with the rules and regulations promulgated under Section 16(b) of the Securities Exchange Act of 1934, as amended; 

 

except to conform the Plan to changes in the Code or other applicable law. 

 

10.    Termination of the Plan.    The Board of Directors may terminate the Plan at any time. Unless thePlan shall theretofore have been terminated by the Board of Directors, the Plan shall terminate ten years after the date of its initial adoption by the Board of Directors. No Option may be granted hereunder after termination of the Plan. Thetermination or amendment of the Plan shall not alter or impair any rights or obligations under any Option theretofore granted under the Plan. 

 

11.    Effective Date of the Plan.    The Plan shall be effective upon shareholder approval. 

 

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