Document:

exv10w2

 

EXHIBIT 10.2

LETTER OF NON-QUALIFIED OPTION GRANT

ORTHOLOGIC CORP. 2005 EQUITY INCENTIVE PLAN

Date                     

Name & address

RE:      OrthoLogic Corp. 2005 Equity Incentive Plan

Dear                     ,

In order to provide additional incentive to certain employees, directors and appropriate third
parties, OrthoLogic Corp. (the “Company”) adopted the OrthoLogic Corp. 2005 Equity Incentive Plan
(the “2005 Plan”). By means of this letter (the “Letter of Grant”), the Company is offering you a
non-qualified stock option pursuant to the 2005 Plan. The Company’s sale of its common shares
underlying the option granted to you hereby has been or will be registered with the U.S. Securities
and Exchange Commission. A copy of the prospectus, including a copy of the 2005 Plan relating to
that registration, can be obtained from the Company by request.

The option granted to you hereunder shall be subject to all of the terms and conditions of the 2005
Plan, which you should carefully review. In addition, such option is subject to the following
terms and conditions:

     1. Grant of Option. The Company hereby grants to you, pursuant to the 2005 Plan, the option
to purchase from the Company upon the terms and conditions and at the times hereinafter set forth,
an aggregate of                      shares of the Company’s $0.0005 par value common stock (the “Shares”) at a purchase
price of $                     per Share. The date of grant of this option is                                         
(hereinafter referred to as the “Option Date”).

     2. Exercise Term of Option. Unless earlier terminated as described in Section 7, the option
will vest and may be exercised for the purchase of Shares as described in the following schedule:

	 	 	 
	Number of Shares	 	Vesting Schedule
	 
	 	 

     3. Nontransferability. This option shall not be transferable otherwise than by will or by the
laws of descent and distribution, and the options shall be exercisable only by you during your
lifetime. Notwithstanding the foregoing, the Board of Directors or a committee appointed by the
Board of Directors may permit you to transfer a non-qualified stock option to a family member or a
trust or partnership for the benefit of a family member, in accordance with rules established by
the Board or a committee appointed thereby.

 

 

[Optionee]

[Date]

Page 2

     4. Other Conditions and Limitations.

	 	(a)	 	Any Shares issued upon exercise of this option shall not be
issued unless the issuance and delivery of Shares pursuant thereto shall comply
with all relevant provisions of law including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, any applicable state
securities or “Blue Sky” law or laws (or an exemption from such provision is
available), and the requirements of any stock exchange or national market
system of a national securities association upon which the Shares may then be
listed and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
	 
	 	(b)	 	No transfer of any Shares issued upon the exercise of the
option will be permitted by the Company, unless any request for transfer is
accompanied by evidence satisfactory to the Company that the proposed transfer
will not result in a violation of any applicable law, rule or regulation,
whether federal or state, including in the discretion of the Company an opinion
of counsel reasonably acceptable to the Company.
	 
	 	(c)	 	Inability of the Company to obtain approval from any regulatory
body having jurisdictional authority deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder shall relieve
the Company of any liability in respect to the nonissuance or sale of such
Shares as to which such requisite authority shall not have been obtained.
	 
	 	(d)	 	Unless the Shares are subject to a then effective registration
statement under the Securities Act of 1933, upon exercise of this option (in
whole or in part) and the issuance of the Shares, the Company shall instruct
its transfer agent to enter stop transfer orders with respect to Shares, and
all certificates representing the Shares shall bear on the face thereof
substantially the following legend:

“The shares of common stock represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold, offered for sale,
assigned, transferred or otherwise disposed of unless registered pursuant to the
provisions of that Act or an opinion of counsel to the Company is obtained stating
that such disposition is in compliance with an available exemption from such
registration.”

     5. Exercise of Option. You may exercise the option only by giving the Executive Chairman of
the Company written notice (including the number of Shares that you are intending to acquire,
accompanied by the full exercise price), by personal hand delivery, by professional overnight
delivery service, or by registered or certified mail, postage prepaid with return receipt
requested, at the following address:

 

 

[Optionee]

[Date]

Page 3

Executive Chairman

OrthoLogic Corp.

1275 West Washington

Phoenix, Arizona 85281

Payment of the option price shall be made either in (i) cash or by check, or (ii) at your request
and with the written approval of the Company, (a) by delivering shares of the Company’s common
stock which have been beneficially owned by you for a period of at least six months prior to the
time of exercise (“Delivered Stock”), or (b) a combination of cash and Delivered Stock. The Company
may arrange for or cooperate in permitting broker-assisted cashless exercise procedures. Payment in
the form of Delivered Stock shall be in the amount of the fair market value of the stock at the
date of exercise, determined pursuant to the 2005 Plan.

     6. Valuation and Withholding. If required by applicable regulations, the Company shall, at the
time of issuance of any Shares purchased pursuant to the 2005 Plan, provide you with a statement of
valuation of the Shares issued. The Company shall be entitled to withhold amounts from your
compensation or otherwise to receive an amount adequate to provide for any applicable federal,
state and local income taxes (or require you to remit such amount as a condition of issuance). The
Company may, in its discretion, satisfy any such withholding requirement, in whole or in part, by
withholding from the shares to be issued the number of shares that would satisfy the withholding
amount due.

     7. Termination of Non-Qualified Stock Options. Notwithstanding anything to the contrary, this
option can become exercisable, and shall not be exercisable after the earliest of (i) the tenth
anniversary of the Option Date; (ii) two years after the date you cease to perform services for the
Company, if such termination of services is for any reason other than death, permanent disability,
retirement or cause, (iii) three years after the date you cease to perform services for the
Company, if such termination of services is by reason of death, permanent disability or retirement,
or (iv) the date you cease to perform services for the Company, if such termination is for cause,
as determined by the Board of Directors in its sole discretion. Notwithstanding anything to the
contrary in this Section 7, if you are a non-employee director of the Company and you have served
as a director of the Company for at least five years at the time you cease to serve in such
capacity, your options will be fully exercisable until the expiration of such options.

     8. Miscellaneous. You will have no rights as a stockholder with respect to the Shares until
the exercise of the option and payment of the full purchase price therefor in accordance with the
terms of the 2005 Plan and this Letter of Grant. Nothing herein contained shall impose any
obligation on the Company or any parent or subsidiary of the Company or on you with respect to your
continued employment by the Company or any parent or subsidiary of the Company. Nothing herein
contained shall impose any obligation upon you to exercise this option.

     9. Governing Law. This Letter of Grant shall be subject to and construed in accordance with
the law of the State of Arizona, except as may be required by the Delaware General Corporation Law
or the federal securities laws. Venue for any action arising from or relating to this

 

 

[Optionee]

[Date]

Page 4

Agreement
shall lie exclusively in Superior Court, Maricopa County, Arizona or the United States
District Court for the District of Arizona, Phoenix Division.

     10. Relationship to the 2005 Plan. The option contained in this Letter of Grant is subject to
the terms, conditions and definitions of the 2005 Plan. To the extent that the terms, conditions
and definitions of this Letter of Grant are inconsistent with the terms, conditions and definitions
of the 2005 Plan, the terms, conditions and definitions of the 2005 Plan shall govern. You hereby
accept this option subject to all terms and provisions of the 2005 Plan. You agree to accept as
binding, conclusive and final all decisions or interpretations of the Board or any committee
appointed by the Board upon any questions arising under the 2005 Plan. You agree to consult your
independent tax advisors with respect to the income tax consequences to you, if any, of
participating in the 2005 Plan and authorize the Company to withhold in accordance with applicable
law from any compensation otherwise payable to you any taxes required to be withheld by federal,
state or local law as a result of your participation in the 2005 Plan.

     11. Communication. No notice or other communication under this Letter of Grant shall be
effective unless the same is in writing and is personally hand-delivered, or is sent by
professional overnight delivery service or mailed by registered or certified mail, postage prepaid
and with return receipt requested, addressed to the Company at the address set forth in Section 5
above, or such other address as the Company has designated in writing to you, in accordance with
the provisions hereof, or you at the address set forth at the beginning of this letter, or such
other address as you have designated in writing to the Company, in accordance with the provisions
hereof.

You should execute the enclosed copy of this Letter of Grant and return it to the Company as soon
as possible. The additional copy is for your records.

	 	 	 	 	 	 	 	 	 
	Very truly yours,	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	OrthoLogic Corp.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	John M. Holliman, III	 	 	 	 	 	 
	 

	 	Executive Chairman	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	ACCEPTED AND AGREED TO:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:exv10w3

 

EXHIBIT 10.3

ORTHOLOGIC CORP.

Amendment No. 1 to Les M. Taeger’s Employment Agreement

dated January 16, 2006

Effective June 5, 2006, Mr. Les M. Taeger’s base salary is increased to $227,000 per year.

Additionally, OrthoLogic may terminate Mr. Taeger’s employment at any time, immediately and without
cause, by giving written notice to Mr. Taeger. If OrthoLogic terminates Mr. Taeger without cause,
provided Mr. Taeger first executes a Severance Agreement in the form then used by OrthoLogic,
OrthoLogic shall continue to pay to Mr. Taeger his minimum base salary in effect at the time of
termination for a period of one year following the date of termination, at the time and in the
manner dictated by OrthoLogic’s standard payroll policies. Should such termination occur as a
result of a change in control, OrthoLogic shall also pay Mr. Taeger a pro-rata share of his bonus
at the time of termination.

	 	 	 	 	 
	By:

	 	/s/ John M. Holliman, III
	 	 
	 

	 	 	 	 
	 

	 	John M. Holliman, III	 	 
	 

	 	Executive Chairman	 	 
	 
	 	 	 	 
	Date: June 5, 2006

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