Document:

f10k2009ex10viii_amersurgicl.htm

Exhibit 10.8

 

EMPLOYMENT AGREEMENT

 

This employment agreement (this "Agreement"), dated as of December 31. 2008 (the "Effective Date"), is made by and between American Surgical Assistants, Inc., a Delaware corporation (the "Company"), and James Longaker (the "Executive") (each, a "Party" and together, the "Parties").

 

   WHEREAS, the Executive is to be employed as Chief Financial Officer of the Company,

and

 

    WHEREAS, the Parties wish to establish the terms of the Executive's employment by the Company;

 

    NOW, THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

1.   POSITION/DUTIES.

 

(a)          During the Employment Term (as defined in Section 2 below), the Executive shall serve as a Chief Executive Officer of the Company. In this capacity the Executive shall have such duties, authorities and responsibilities commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies and such other reasonable duties and responsibilities as the Board of Directors of the Company (the "Board") shall designate. The Executive shall report directly to the Chief Executive Officer. The Executive shall obey the lawful directions of the Board, the Company's Chief Executive Officer and any other senior executive of the Company to whom the Executive reports and shall use his diligent efforts to promote the interests of the Company and to maintain and promote the reputation thereof.

 

(b)           During the Employment Term, the Executive shall use his best efforts to perform his duties under this Agreement and shall devote all of his business time, energy and skill in the performance of his duties with the Company. The Executive shall not during the Employment Term (except as a representative of the Company or with consent in writing of the Board) be directly or indirectly engaged or concerned in any other business activity. Notwithstanding the foregoing provisions, the Executive is not prohibited from (1) participating in charitable, civic, educational, professional or community affairs or serving on the board of directors or advisory committees of non-profit entities, and (2) managing his and his family's personal investments, in each case, provided that such activities in the aggregate do not materially interfere with his duties hereunder.

 

2.   EMPLOYMENT TERM. Except for earlier termination as provided in Section 6, the Executive's employment under this Agreement shall be for a one-year term. commencing on the Effective Date and ending on December 31, 2009 (the "Initial Term"). Subject to Section 6, the Initial Term shall be automatically extended for additional terms of successive one-year periods (the "Additional Term") unless the Company or the Executive gives written notice to the other of the termination of the Executive's employment hereunder at least 60 days prior to the expiration of the Initial Term or Additional Term. The Initial Team and any Additional Term shall be referred to herein as the "Employment Term"

 

 

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3.   BASE SALARY. The Company agrees to pay to the Executive a base salary at an annual rate of not less than $132,000, payable in accordance with the regular payroll practices of the Company. The Executive's Base Salary shall be subject to annual review by the Board (or a committee thereof). The base salary as determined herein from time to time shall constitute "Base Salary" for purposes of this Agreement.

 

4.   BONUS. With respect to each full fiscal year during the Employment Term, the Executive shall be eligible to earn an annual bonus (the "Annual Bonus") in such amount, if any, as determined in the sole discretion of the Board of up to 100% of the Executive's Base Salary. In addition, the Executive shall be eligible to participate in the Company's bonus and other incentive compensation plans and programs (if any) for the Company's senior executives at a level commensurate with his position and may be entitled to bonus payments in addition to the amount set forth herein above.1

 

5.   EMPLOYEE BENEFITS.

 

(a)   Benefit Plans. The Executive shall be eligible to participate in any employee benefit plan of the Company, including, but not limited to, equity, pension, thrift, profit sharing, medical coverage, education, or other retirement or welfare benefits that the Company has adopted or may adopt, maintain or contribute to for the benefit of its senior executives, at a level commensurate with his positions, subject to satisfying the applicable eligibility requirements. The Company may at any time or from time to time amend, modify, suspend or terminate any employee benefit plan, program or arrangement for any reason in its sole discretion.

 

(b)   Vacation. The Executive shall be entitled to an annual paid vacation in accordance with the Company's policy applicable to senior executives from time to time in effect but in no event less than two weeks per calendar year (as prorated for partial years), which vacation may be taken at such times as the Executive elects with due regard to the needs of the Company. The carry-over of vacation days shall be in accordance with the Company's policy applicable to senior executives from time to time in effect.

 

(c)   Business and Entertainment Expenses. Upon presentation of appropriate documentation, the Executive shall be reimbursed for all reasonable and necessary business and entertainment expenses incurred in connection with the performance of his duties hereunder, all in accordance with the Company's expense reimbursement policy applicable to senior executives from time to time in effect.

 

1 NOTE: publicly held companies are subject to $1,000,000 compensation deduction limitation imposed by Internal Revenue Code Section 162(m).

 

 

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6.           TERMINATION. The Executive's employment and the Employment Term shall terminate on the first of the following to occur:

 

(a)   Disability. On the thirtieth (30th) day following written notice by the Company to the Executive of termination due to Disability. For purposes of this Agreement, "Disability" shall mean a determination by the Company in accordance with applicable law that due to a physical or mental injury, infirmity or incapacity, the Executive is unable to perform the essential functions of his job with or without accommodation for 180 days (whether or not consecutive) during any 12-month period.

 

(b)   Death. Automatically on the date of death of the Executive.

 

(c)   Cause. Immediately upon written notice by the Company to the Executive of a termination for Cause. "Cause" shall mean, as determined by the Board (or its designee) (1) conduct by the Executive in connection with his employment duties or responsibilities that is fraudulent; unlawful or grossly negligent (2) the willful misconduct of the Executive; (3) the willful and continued failure of the Executive to perform the Executive's duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness); (4) the commission by the Executive of any felony (or the equivalent under the law of the state of Texas) (other than traffic-related offenses) or any crime involving moral turpitude; (5) violation of any rnaterial policy of the Company or any material provision of the Company's code of conduct, employee handbook or similar documents; or (6) any material breach by the Executive of any provision of this Agreement or any other written agreement entered into by the Executive with the Company.

 

(d)   Without Cause. On the thirtieth (30th) day following written notice by the Company to the Executive of an involuntary termination without Cause, other than for death or Disability.

 

(e)   Good Reason. On the sixtieth (60th) day following written notice by the Executive to the Company of a termination for Good Reason. "Good Reason" shall mean, without the express written consent of the Executive, the occurrence of any the following events unless such events are cured (if curable) by the Company within fifteen days following receipt of written notification by the Executive to the Company that he intends to terminate his employment hereunder for one of the reasons set forth below: any material  reduction or diminution (except temporarily during any period of incapacity due to physical or mental illness) in the Executive's title, authorities, duties or responsibilities or reporting requirements with the Company.

 

7.   CONSEQUENCES OF TERMINATION.

 

(a)   Disability. Upon termination of the Employment Term because of the Executive's Disability, the Company shall pay or provide to the Executive (1) any unpaid Base Salary and any accrued vacation through the date of termination; (2) any unpaid Annual Bonus accrued with respect to the fiscal year ending on or preceding the date of termination; (3) reimbursement for any unreimbursed expenses properly incurred through the date of termination; and (4) all other payments or benefits  to which the Executive may be entitled under the terms of any applicable employee benefit plan, program or arrangement (collectively, "Accrued Benefits").

 

 

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(b)   Death. Upon the termination of the Employment Term because of the Executive's death, the Executive's estate shall be entitled to any Accrued Benefits.

 

(c)   Termination for Cause. Upon the termination of the Employment Term by the Company for. Cause or by either party in connection with a failure to renew this Agreement, the Company shall pay to the Executive any Accrued Benefits.

 

(d)   Termination without Cause or for Good Reason. Upon the termination of the Employment Term by the Company without Cause or by the Executive with Good Reason, the Company shall pay or provide to the Executive (1) the Accrued Benefits, and (2) subject to the Executive's execution (and non-revocation) of a general release of claims against the Company and its affiliates in a form reasonably requested by the Company, (A) continued payment of his Base Salary for two (2) months after termination, payable in accordance with the regular payroll practices of the Company, but off the payroll; and (B) payment of the Executive's cost of continued medical coverage for two (2) months after termination (subject to the Executive's co-payment of the costs in the same proportion as such costs were shared immediately prior to the date of termination. 2 Payments provided under this Section 7(d) shall be olieu of any termination or severance payments or benefits for which the Executive may be eligible under any of the plans, policies or programs of the Company.

 

8.   NO ASSIGNMENT. This Agreement is personal to each of the Parties. Except as provided below, no Party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other Party hereto; provided, however, that the Company may assign this Agreement to any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company.

 

9.    NOTICES. For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (1) on the date of delivery if delivered by hand, (2) on the date of transmission, if delivered by confirmed facsimile, (3) on the first business day following the date of deposit if delivered by guaranteed overnight delivery service, or (4) on the fourth business day following the date delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Executive.

 

At the address (or to the facsimile number) shown on the records of the Company 

 

If to the Company:

 

o NOTE: typically the period for severance payments corresponds to the length of the non-compete and non-solicitation period.

 

 

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10039 Bissonnet Street; Suite #250 Houston, Texas

Telephone:                    (713) 779-9800

Facsimile:                       (713) 779-9862

Attention:                      Principal Executive Officer

 

With a copy to:

Anslow & Jaclin, LLP

195 Route 9 South, Suite 204 

Manalapan, New Jersey, 07726 

Attention: Gregg Jaclin, Esq. 

Facsimile: (732) 577-1188

 

or to such other address as either Party may have furnished to the other in waiting in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 

10. PROTECTION OF THE COMPANY'S BUSINESS.

 

(a)    Confidentiality. The Executive acknowledges that during the course of his employment by the Company (prior to and during the Employment Term) he has and will occupy a position of trust and confidence. The Executive shall hold in a fiduciary capacity for the benefit of the Company and shall not disclose to others or use, whether directly or indirectly, any Confidential Information regarding the Company, except (i) as in good faith deemed necessary by the Executive to perform his duties hereunder, (ii) to enforce any rights or defend any claims hereunder or under any other agreement to which the Executive is a party, provided that such disclosure is relevant to the enforcement of such rights or defense of such claims and is only disclosed in the formal proceedings related thereto, (ii) when required to do so by a court of law, by any governmental agency having supervisory authority over the business of the Company or by any administrative or legislative body (including a committee thereof) with jurisdiction to order him to divulge, disclose or make accessible such information, provided that the Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment, (iv) as to such Confidential Information that shall have become public or known in the Company's industry other than by the Executive's unauthorized disclosure, or (v) to the Executive's spouse, attorney and/or his personal tax and financial advisors as reasonably necessary or appropriate to advance the Executive's tax, financial and other personal planning (each an "Exempt Person"), provided, however, that any disclosure or use of Confidential Information by an Exempt Person shall be deemed to be a breach of this Section 10(a) by the Executive. The Executive shall take all reasonable steps to safeguard the Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. The Executive understands and agrees that the Executive shall acquire no rights to any such Confidential Information. "Confidential Information" shall mean information about the Company, its subsidiaries and affiliates, and their respective clients and customers that is not disclosed by the Company and that was learned by the Executive in the course of his employment by the Company, including, but not limited to, any proprietary knowledge, trade secrets, data and databases, formulae, sales, financial, marketing, training and technical information, client, customer, supplier and vendor lists, competitive strategies, computer programs and all papers, resumes, and records (including computer records) of the documents containing such Confidential Information.

 

 

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(b)   Non-Competition. During the Employment Term and for the one-year period following the termination of the Executive's employment for any reason (the "Restricted Period"), the Executive shall not, directly or indirectly, without the prior written consent of the Company, provide employment (including self-employment), directorship, consultative or other services to any business, individual, partner, firm, corporation, or other entity that competes with any business conducted by the Company or any of its subsidiaries or affiliates on the date of the Executive's termination of employment or within one year of the Executive's termination of employment in the geographic locations where the Company and its subsidiaries or affiliates engage or propose to engage in such business (the "Business"). Nothing herein shall prevent the Executive from having a passive ownership interest of not more than 2% of the outstanding securities of any entity engaged in the Business whose securities ate traded on a national securities exchange.

 

(c)   Non-Solicitation of Employees. The Executive recognizes that he possesses and will possess confidential information about other employees of the Company and its subsidiaries and affiliates relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with customers of the Company and its subsidiaries and affiliates. The Executive recognizes that the information he possesses and will possess about these other employees is not generally known, is of substantial value to the Company and its subsidiaries and affiliates in developing their business and in securing and retaining customers, and has been and will be acquired by him because of his business position with the Company. The Executive agrees that, during the Restricted Period, he will not, directly or indirectly, (i) solicit or recruit any employee of the Company or any of its subsidiaries or affiliates (a "Current Employee") or any person who was an employee of the Company or any of its subsidiaries or affiliates during the twelve (12) month period immediately prior to the date the Executive's employment terminates (a "Former Employee") for the purpose of being employed by him or any other entity, or (ii) hire any Current Employee or Former Employee.

 

(d)   Non-Solicitation of Customers. The Executive agrees that, during the Restricted Period, he will not, directly or indirectly, solicit or attempt to solicit (i) any party who is a customer or client of the Company or its subsidiaries, who was a customer or client of the Company or its subsidiaries at any time during the twelve (12) month period immediately prior to the date the Executive's employment terminates or who is a prospective customer or client that has been identified and targeted by the Company or its subsidiaries for the purpose of marketing, selling or providing to any such party any services or products offered by or available from the Company or its subsidiaries, or (ii) any supplier or vendor to the Company or any subsidiary to terminate, reduce or alter negatively its relationship with the Company or any subsidiary or in any manner interfere with any agreement or contract between the Company or any subsidiary and such supplier or vendor.

 

 

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(e)   Property. The Executive acknowledges that all originals and copies of materials, records and documents generated by him or coming into his possession during his employment by the Company or its subsidiaries are the sole property of the Company and its subsidiaries ("Company Property"). During the Employment Term, and at all times thereafter, the Executive shall not remove, or cause to be removed, from the premises of the Company or its subsidiaries, copies of any record, file, memorandum, document, computer related information of equipment; or any other item relating to the business of the Company or its subsidiaries, except in furtherance of his duties under this Agreement. When the Executive's employment with the Company terminates, or upon request of the Company at any time, the Executive shall promptly deliver to the Company all copies of Company Property in his possession or control

 

(f)   Non-Disparagement. Executive shall not, and shall not induce others to, Disparage the Company or its subsidiaries or affiliates or their past and present officers, directors, employees or products. "Disparage" shall mean making comments or statements to the press, the Company's or its subsidiaries' or affiliates' employees or any individual or entity with whom the Company or its subsidiaries or affiliates has a business relationship which would adversely affect in any manner (1) the business of the Company or its subsidiaries or affiliates (including any products or business plans or prospects), or (2) the business reputation of the Company or its subsidiaries or affiliates, or any of their products, or their past or present officers, directors or employees.

 

(g)   Cooperation. Subject to the Executive's other reasonable business commitments, following the Employment Term, the Executive shall be available to cooperate with the Company and its outside counsel and provide information with regard to any past, present, or future legal matters which relate to or arise out of the business the Executive conducted on behalf of the Company and its subsidiaries and affiliates, and, upon presentation of appropriate documentation, the Company shall compensate the Executive for any out-of-pocket expenses reasonably incurred by the Executive in connection therewith.

 

(h)   Equitable Relief and Other Remedies. The Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of this Section 10 would be inadequate and, in recognition of this fact, the Executive agrees that, in the event of such a breach or threatened or attempted breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available. In addition, without limiting the Company's remedies for any breach of any restriction on the Executive set forth in this Section 10, except as required by law, the Executive shall not be entitled to any payments set forth in Section 7(d) hereof if the Executive has breached the covenants applicable to the Executive contained in this Section 10, the Executive will immediately return to the Company any such payments previously received under Section 7(d) upon such a breach, and, in the event of such breach, the Company will have no obligation to pay any of the amounts that remain payable by the Company under Section 7(d).

 

 

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(i)   Reformation. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 10 is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state. The Executive acknowledges that the restrictive covenants contained in this Section 10 are a condition of this Agreement and are reasonable and valid in temporal scope and in all other respects.

 

(j)           Survival of Provisions. The obligations contained in this Section 10 shall survive in accordance with their terms the termination or expiration of the Executive's employment with the Company and shall be fully enforceable thereafter.

 

11.   INDEMNIFICATION. The Executive shall be indemnified to the extent permitted by the Company's organizational documents and to the extent required by law.

 

12.   SECTION HEADINGS AND INTERPRETATION. The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement. Expressions of inclusion used in this agreement are to be understood as being without limitation.

 

13.   SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity of unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

 

14.   COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same Agreement.

 

15.   GOVERNING LAW AND VENUE. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without regard to its conflicts of law principles. The Parties agree irrevocably to submit to the exclusive jurisdiction of the federal courts or, if no federal jurisdiction exists, the state courts, located in the City of New York, Borough of Manhattan, for the purposes of any suit, action or other proceeding brought by any Party arising out of any breach of any of the provisions of this Agreement and hereby waive, and agree not to assert by way of motion, as a defense or otherwise, in any such suit, action, or proceeding, any claim that it is not personally subject to the jurisdiction of the above-named courts, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper, or that the provisions of this Agreement may not be enforced in or by such courts. IN ADDITION, THE PARTIES AGREE TO WAIVE A TRIAL BY JURY.

 

16.   ENTIRE AGREEMENT. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

 

 

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17.   WAIVER AND AMENDMENT. No provision of this Agreement may be modified, amended, waived or discharged unless such waiver, modification, amendment or discharge is agreed to in writing and signed by the Executive and such officer or director as may be designated by the Board. No waiver by either Party at any time of any breach by the other Party hereto of or compliance with, any condition or provision of this Agreement to be performed by such other Party shall be deemed a waiver or similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

18.   WITHHOLDING. The Company may withhold from any and all amounts payable under this Agreement such federal, state, local and foreign taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

19.   AUTHORITY AND NON-CONTRAVENTION. The Executive represents and warrants to the Company that he has the legal right to enter into this Agreement and to perform all of the obligations on his part to be performed hereunder in accordance with its terms and that he is not a party to any agreement or understanding, written or oral, which could prevent him from entering into this Agreement or performing all of his obligations hereunder.

 

20.   COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

 

AMERICAN SURGICAL HOLDINGS, INC.

 

 

 

/s/ Zak Elgamal

By Zak Elgamal

Title: President and Executive Officer

 

    EXECUTIVE:

 

/s/ James Longaker

James Longaker

 

 

10f10k2009ex10ix_amersurgical.htm

Exhibit 10.9

 

 

AMERICAN SURGICAL HOLDINGS, INC.

FORM OF STOCK OPTION GRANT NOTICE AND STOCK OPTION AGREEMENT

American Surgical Holdings, Inc. (the “Company”), hereby grants to the Optionee listed below (“Optionee”), an option (the “Option”) to purchase the number of shares of the Company’s common stock, par value $0.001 per share (the “Stock”), set forth below.  This option is subject to all of the terms and conditions as set forth herein and in the Stock Option Agreement, which is incorporated herein by reference.

 

	
Optionee:

	  	
___________________________________

	
Grant Date:

	  	
___________________________________

	
Exercise Price per Share:

	  	
$___________________ per share

	
Total Number of Underlying Shares of Stock:

	  	
___________________________________

	
Total Exercise Price:

	  	
$__________________________________

	
Expiration Date:

	  	
___________________________________

	Type of Option:    	 	Non-Qualified Stock Option
	Vesting Schedule:	 	Daily in equal installments for a period of three years commencing on the Grant Date, based on a 365-day year

 

The Exercise Price per Share is based on the closing price of the Company's Stock on the Over-the-Counter Bulletin Board for the five business day immediately preceding the date of the grant. The Company believes this Exercise Price to be no less than the fair market value of a share of Stock as of the Grant Date, determined in good faith in compliance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended.  However, there is no guarantee that the Internal Revenue Service (the “IRS”) will agree with the Company’s determination.  A subsequent IRS determination that the Exercise Price per Share is less than such fair market value could result in adverse tax consequences to the Optionee.  By signing below, the Optionee agrees that the Company, its directors, officers and shareholders shall not be held liable for any tax, penalty, interest or cost incurred by the Optionee as a result of such determination by the IRS.  The Optionee is urged to consult with his or her own tax advisor regarding the tax consequences of the Option, including the application of Section 409A.

 

By his/her signature and the Company’s signature below, Optionee agrees to be bound by the terms and conditions of the Stock Option Agreement attached hereto.  Optionee has reviewed the Stock Option Agreement in its entirety, has had an opportunity to obtain the advice of counsel prior to executing this option and fully understands all provisions of this Grant Notice and the Stock Option Agreement.  Optionee agrees to notify the Company upon any change in the residence address indicated below.

 

	
AMERICAN SURGICAL HOLDINGS, INC.:

	 	
OPTIONEE:

	  	 	  
	
By:                                                                                          

	 	
By:                                                               

	  	 	  
	
Print Name:                                                               

	 	
Print Name:                                                                  

	  	 	  
	
Title:                                                                           

	 	  
	  	 	  
	
Address:

10039 Bissonet, Suite #250                                         

Houston, Texas 77036-7852                                    

	 	
Address:

                                                                    

                                                                    

 

  

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AMERICAN SURGICAL HOLDINGS, INC.

STOCK OPTION AGREEMENT

 

Pursuant to the Stock Option Grant Notice (“Grant Notice”) to which this Stock Option Agreement (this “Agreement”) is attached, American Surgical Holdings, Inc. (the “Company”) has granted to the Optionee an option (the “Option”) to purchase the number of shares of stock (the “Stock”) indicated in the Grant Notice at the exercise price indicated in the Grant Notice. By signing the Grant Notice, the Optionee: (a) acknowledges receipt of, and represents that the Optionee has read and is familiar with the terms and conditions of, the Grant Notice and this Agreement, (b) accepts the Option subject to all of the terms and conditions of the Grant Notice and this Agreement, and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors, or any committee appointed by the Board of Directors to administer this Agreement or similar agreements (together, the “Board of Directors”), upon any questions arising under the Grant Notice or this Agreement.  Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice.

 

ARTICLE 1

 

GRANT OF OPTION

 

1.1 Grant of Option.  For good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company irrevocably grants to the Optionee the Option to purchase any part or all of an aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth in this Agreement.  The Option shall be a Non-Qualified Stock Option.  “Non-Qualified Stock Option” means an option which is not an Incentive Stock Option.  For this purpose, “Incentive Stock Option” shall mean an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

1.2 Purchase Price.  The purchase price of the shares of Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge.

 

ARTICLE 2

 

PERIOD OF EXERCISABILITY

 

2.1 Commencement of Exercisability.  Subject to Section 4.1, the Option shall become exercisable in such amounts and at such times as are set forth in the Grant Notice.

 

2.2 Expiration of Option.  The Option may not be exercised to any extent by anyone after the expiration of five years from the Grant Date.

 

  

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ARTICLE 3

 

EXERCISE OF OPTION

 

3.1 Right to Exercise.  This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Grant Notice and with the applicable provisions of this Agreement.

 

3.2 Partial Exercise.  The Option may be exercised in whole or in part at any time prior to the time when the Option expires under Section 2.2.  The Company shall not be required to issue fractional shares upon the exercise of the Option.

 

3.3 Manner of Exercise.  The Option may be exercised solely by delivery to the Secretary of the Company or the Secretary’s office of all of the following prior to the time when the Option or such portion thereof expires under Section 2.2:

 

(a) An exercise notice in writing signed by the Optionee or the other person then entitled to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby exercised.  Such notice shall be substantially in the form attached as Exhibit A (the “Exercise Notice”); and

 

(b) Full payment (in cash or by check) for the shares with respect to which the Option or portion thereof is exercised (unless Optionee elects to exercise this Option as provided in Section 3.4 below); and

 

(c) Full payment to the Company (or other employer corporation) of all amounts which, under federal, state or local law, it is required to withhold upon exercise of this Option; and

 

(d) Execution by the Optionee of an Investor Rights Agreement and a Right of First Refusal and Co-Sale Agreement; and

 

(e) In the event the Option or portion thereof shall be exercised pursuant to Section 3.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option.

 

3.4 Net Issue Exercise.  In lieu of exercising this Option, Optionee may elect to receive shares equal to the value of this Option (or the portion thereof being exercised) by surrender of this Option at the principal office of the Company, together with notice of such election in the form of Exhibit A hereto, in which event the Company shall issue to Optionee a number of shares of Stock computed using the following formula:

 

	
X

	
=

	
Y(A-B)

	  	  	
A

	
Where

	
X

	
=

	
The number of shares of Stock to be issued to Optionee.

	  	
Y

	
=

	
The number of shares of Stock purchasable under this Option (as adjusted to the date of such calculation).

	  	
A

	
=

	
The “fair market value” of one share of the Company’s Stock, “fair market value” meaning the closing sales price, or if no sales price, the average of the closing bid and asked prices, of the Company’s Stock on the OTC Bulletin Board, Nasdaq or any exchange on which the Stock is traded.

	  	
B

	
=

	
Exercise price per share of this Option (as adjusted to the date of such calculation).

 

  

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3.5 Conditions to Issuance of Stock Certificates.  The shares of Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company.  Such shares shall be fully paid and nonassessable.  The Company shall not be required to issue any shares of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:

 

(a) The obtaining of any approval or other clearance from any state or federal governmental agency or any other governmental regulatory body, which the Board of Directors shall, in its absolute discretion, deem necessary or advisable;

 

(b) The receipt by the Company of full payment for such shares, including payment of all amounts which, under federal, state or local tax law, the Company (or other employer corporation) is required to withhold upon exercise of the Option;

 

(c) The admission of such shares to listing on all stock exchanges or market systems on which such Stock is then listed; and

 

(d) The lapse of such reasonable period of time following the exercise of the Option as the Board of Directors may from time to time establish for reasons of administrative convenience.

 

THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.  ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained.  As a condition to the exercise of the Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

 

3.6 Rights as Shareholder.  The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until such shares shall have been issued by the Company to such holder.

 

  

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3.7 Termination of Option.

 

(a) Unless otherwise expressly provided in this Agreement, the unexercised but vested portion of the Option shall automatically and without notice immediately terminate and become forfeited, null and void at the time of the earliest to occur of the following:

 

(i) On the date on which the Optionee’s service with the Company, in all capacities, is terminated for any reason other than as a result of (A) termination of employment without cause or voluntary separation from the Company by an employee or director for reasons other than as set forth in this Section 3.7; (B) retirement on or after attaining the age of 65; (C) early retirement with approval of the Board; (D) disability within the meaning of Section 22(e)(3) of the Internal Revenue Code;  or (E) death; or

 

(ii) Ninety days from the date on which the Optionee’s service with the Company is terminated as a result of an event described in Section 3.7(a)(i)(A); or

 

(iii) Two years from the date on which the Optionee's service with the Company is terminated as a result of (A) retirement on or after attaining the age of 65; (B) early retirement with approval of the Board; (C) disability within the meaning of Section 22(e)(3) of the Internal Revenue Code;  or (D) death.

 

(b) Upon the Optionee’s termination of service as described in this Section 3.7, or otherwise, any portion of the Option not previously vested or not yet exercisable shall be immediately canceled.

 

ARTICLE 4

 

OTHER PROVISIONS

 

4.1 Administration.  The Board of Directors shall have the power to interpret this Agreement.  All actions taken and all interpretations and determinations made by the Board of Directors in good faith shall be final and binding upon the Optionee, the Company and all other interested persons.  No member of the Board of Directors shall be personally liable for any action, determination or interpretation made in good faith with respect to this Agreement or the Option.  In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Board of Directors under this Agreement.  The Optionee hereby accepts as binding, conclusive and final all decisions or interpretations of the Board of Directors upon any questions arising under this Agreement or the Grant Notice or the Option.  To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to applicable laws, rules and regulations.

 

4.2 Option and Stock Not Transferable.

 

(a) The Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution unless and until the Option has been exercised, or the shares underlying such Option have been issued, and all restrictions applicable to such shares have lapsed.  Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of the Optionee or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

 

  

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(b) During the lifetime of the Optionee, only the Optionee may exercise the Option or any portion thereof.  After the death of the Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 2.2, be exercised by the Optionee’s beneficiary.  If no beneficiary has been designated or survives the Optionee, the Option may be exercised by the person entitled to such exercise pursuant to the Optionee’s will or the laws of descent and distribution.

 

(c) Any transfer or sale of the Stock following exercise of the Option is subject to restrictions on transfer imposed by any applicable state and federal securities laws.  Any transfer or attempted transfer of any of the Stock not in accordance with the terms of this Agreement shall be void and the Company may enforce the terms of this Agreement by stop transfer instructions or similar actions by the Company and its agents or designees.

 

4.3 Restrictive Legends and Stop-Transfer Orders.

 

(a) The Optionee understands and agrees that, the Board of Directors may require a restrictive legend or legends, to be embossed or imprinted on any certificate(s) evidencing ownership of the Stock following exercise of the Option, summarizing the restrictions set forth in Section 4.10 or that the Board of Directors may deem necessary or advisable to assure compliance with this Agreement or any law or regulation.

 

(b) The Optionee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

(c) The Company shall not be required:  (i) to transfer on its books any shares of Stock that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such shares of Stock or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred.

 

4.4 Stock to Be Reserved.  The Company shall at all times during the term of the Option reserve and keep available such number of shares of Stock as will be sufficient to satisfy the requirements of this Agreement.

 

4.5 Notices.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to the Optionee shall be addressed to the Optionee at the address given beneath the Optionee’s signature on the Grant Notice.  By a notice given pursuant to this Section 4.5, either party may hereafter designate a different address for notices to be given to that party.  Any notice which is required to be given to the Optionee shall, if the Optionee is then deceased, be given to the Optionee’s designated beneficiary if any, or the person otherwise entitled to exercise his or her Option pursuant to this Agreement by written notice under this Section 4.5.  Any notice shall be deemed duly given when sent via email or enclosed in a properly sealed envelope or wrapper addressed as aforesaid and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

 

  

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4.6 Change of Control.  Just prior to and in connection with a Change of Control (as hereinafter defined), all unvested Options granted hereby shall vest, and the Board of Directors may:

 

(a) Require the Optionee to exercise all of the Options represented hereby, and require the Optionee to sell all of the Stock issued pursuant to such exercise to the Acquiring Person;

 

(b) Require the Option be exercised within a set period of time after which the Options will be cancelled, and be null and void; or

 

(c) Require the Optionee to accept the net value of the Option (the fair market value less the exercise price) in exchange for the cancellation of this Option.

 

(d) For purposes of this Section 4.6, “Change of Control” means (i) the acquisition by any person or group (as that term is defined in the Securities Act (as hereinafter defined), and the rules promulgated pursuant to that act) in a single transaction or a series of transactions of 30% or more in voting power of the outstanding stock of the Company; (ii) a sale of all or substantially all of the assets of the Company; (iii) a merger, consolidation or reorganization involving the Company, following which the current shareholders of the Company as of the Date of Grant (the "Current Shareholders") will not have voting power with respect to at least 50% of the voting securities entitled to vote generally in the election of directors of the surviving entity; or (iv) the consummation of a sale by the Current Shareholders to a third party (an “Acquiring Party”) of some or all of the shares of Common Stock held by the Current Shareholders, which sale results in the Current Shareholders having voting power with respect to less than 50% of the voting securities entitled to vote in the election of directors of the Company.

 

4.7 Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

4.8 Governing Law.  This Agreement shall be administered, interpreted and enforced under the laws of the State of Delaware without regard to conflicts of laws thereof.

 

4.9 Amendments.  This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by the Optionee or such other person as may be permitted to exercise the Option pursuant to this Agreement and by a duly authorized representative of the Company.

 

  

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4.10 Optionee Representations.  The Optionee hereby makes the following certifications, representations and covenants with respect to the Stock and the Option:

 

(a) The Option and all Stock purchased upon the exercise hereof, unless registered at the time of purchase under the Securities Act of 1933, as amended (the “Securities Act”), will be issued in reliance on exemptions from registration under the Securities Act and cannot be sold or transferred unless such sale or transfer is registered under the Securities Act and applicable state securities laws or meets the requirements of an exemption therefrom, in the opinion of counsel to the Company.  The Company may place an appropriate restrictive legend on the certificate or certificates evidencing such Stock summarizing these restrictions

 

(b) Optionee has a preexisting personal or business relationship with the Company and has such knowledge and experience in financial and business matters so that the Optionee is capable of evaluating the merits and risks of its investment in the Company.  Optionee is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Option and the Stock.  Optionee is acquiring the Option, and will acquire the Stock upon the exercise of the Option, for investment for Optionee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof.

 

(c) Optionee acknowledges and understands that the Option and the Stock to be issued upon exercise of the Option constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Optionee’s investment intent as expressed herein.  Optionee understands that the Option and the Stock, in the event Optionee exercises the Option, must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available.  Optionee further acknowledges and understands that the Company is under no obligation to register the Option or the Stock.  Optionee understands that the certificate evidencing the Stock following the exercise of the Option will be imprinted with a legend which prohibits the transfer of the Stock unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company and any other legend required under applicable state securities laws.

 

(d) Optionee is familiar with the provisions of Rule 144, promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions.  Rule 144 requires the resale to occur not less than one year after the later of the date the securities were sold by the Company or the date the securities were sold by an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the securities by an affiliate, or by a non-affiliate who subsequently holds the securities less than two years, the satisfaction of the following:  (i) the resale must be made through a broker in an unsolicited “broker’s transaction” or in transactions directly with a market maker (as said term is defined under the Exchange Act 0f 1934, as amended); and, in the case of an affiliate, (ii) the availability of certain public information about the Company, (iii) the amount of securities being sold during any three month period not exceeding the limitations specified in Rule 144(e), and (iv) the timely filing of a Form 144, if applicable.

 

  

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(e) Optionee further understands that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.  Optionee understands that no assurances can be given that any such other registration exemption will be available in such event.

 

(f) The Company shall not be obligated to issue any shares of Stock pursuant to this Agreement if such sale or issuance, in the opinion of the Company or the Company’s counsel, might constitute a violation by the Company of any provision of law, including without limitation the provisions of the Securities Act.  The Company shall not be obligated to take any affirmative action in order to cause the grant or exercise of this Option or the issuance or sale of any shares of Stock pursuant hereto to comply with any law.

 

(g) If requested by the Company or any representative of the underwriters in connection with any registration of the offering of the Common Stock of the Company under the Securities Act, the Optionee shall not sell or otherwise transfer the Shares for a set period of time following the effective date of a registration statement filed under the Securities Act.  The Company may impose stop-transfer instructions with respect to the Stock subject to the foregoing restrictions until the end of such period.

 

4.11 Tax Consultation.  Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee’s receipt of the Option and purchase or disposition of the Stock.  OPTIONEE WILL CONSULT WITH ANY TAX CONSULTANTS OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE STOCK. OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

 

4.12 Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth herein, this Agreement shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

 

4.13 Non-Guarantee of Employment.  Nothing in this Agreement shall confer upon Optionee any right to continued employment with the Company, if applicable, or interfere in any way with the right of the Company to terminate the employment of the Optionee at any time.

 

4.14 Entire Agreement.  The Grant Notice and any Exercise Notice is incorporated herein by reference.  This Agreement, the Grant Notice and the Exercise Notice constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof.

 

  

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EXHIBIT A

 

TO GRANT NOTICE AND STOCK OPTION AGREEMENT

 

FORM OF EXERCISE NOTICE

 

Effective as of today, ___________, _____, the undersigned (“Optionee”) hereby elects to exercise Optionee’s option to purchase _________ shares of the common stock (the “Stock”) of American Surgical Holdings, Inc. (the “Company”) under and pursuant to the Grant Notice and Stock Option Agreement dated [_____________, _____], (the “Option Agreement”).  Capitalized terms used herein without definition shall have the meanings given in the Option Agreement.

 

	
Grant Date:

	  	
____________________

	
Number of Shares of  Stock as to which Option is Exercised:

	  	
____________________

	
Exercise Price per Share:

	  	
$____

	
Total Exercise Price:

	  	
$____________

	
Certificate to be issued in name of:

	  	  
	
Payment of Total Exercise Price: delivered herewith:

	  	
£ Delivery herewith of $____________ (Representing the full Exercise Price for the Stock, as well as any applicable withholding tax) in cash or by check

£ Net Issue Exercise pursuant to Section 3.4

	Type of Option:    	 	Non-Qualified Stock Option

                                                                       

 

	
OPTIONEE:

	  
	                                 
	  
	
Print Name:                          

	  
	
Address:

 

                                 

                                 

                                 

 

 

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