Document:

exv10w5

 

Exhibit 10.5

STOCK OPTION AGREEMENT

     THIS
STOCK OPTION AGREEMENT (this “Agreement”) is made as of the       day
of      , 200     , between ENCORE MEDICAL CORPORATION, a Delaware corporation
(the “Company”), and      (“Optionee”).

     WHEREAS, Optionee will be serving Encore Medical, L.P., (“Encore”), an
affiliate of the Company, as a sales representative and it is expected that he
will provide valuable assistance to Encore and the Company with respect to
Encore’s and the Company’s business and operations;

     WHEREAS, Optionee, as a condition to entering into a Sales Representative
Agreement dated of even date herewith, has agreed to certain restrictions on
his ability to compete with the Company upon the termination of the Sales
Representative Agreement;

     WHEREAS, the Company has established the 1997 Distributor Stock Option
Plan (the “Plan”); and

     WHEREAS, in view of the foregoing, and in part as consideration for the
non-compete obligation, Company desires to grant to Optionee from the Plan an
option to purchase shares of Company’s Common Stock, par value $0.001, (the
“Stock”).

     NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants
hereinafter set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Company and Optionee,
intending to be legally bound, hereby agree as follows:

     1. Grant of Option and Vesting. Company hereby grants to Optionee an
option to purchase an aggregate total of
      (     ) shares of
Stock upon the terms and conditions hereinafter set forth, which options shall
vest as follows:    

     2. Term of Option.

          (a) Optionee may exercise any vested option and purchase shares of Stock
under the Agreement at any time on or after the date hereof. The option to
purchase shares of Stock under this Agreement shall terminate on      ,
20     .

          (b) In the event of the failure of Optionee timely to exercise his
option(s) on or prior to      , 20     , or in the event of the failure of
Optionee to exercise his option(s) with respect to all of the shares of Stock
subject to the option within such time period, such part or parts, or the
whole, as the case may be, of Optionee’s option shall, ipso facto, become null
and void and shall no longer be of or have any further force or effect.

     3. Purchase Price. The purchase price per share of Stock subject to the
option specified herein shall be equal to      .

 

 

     4. Procedure for Exercise of Option. Subject to the provisions of Article
2 hereof, Optionee may exercise the option specified herein at each time
specified herein by complying with the provisions of paragraph 10 of the Plan.

     5. No Rights as Stockholder. The option specified in this Agreement shall
not, in and of itself, entitle Optionee to any rights as a stockholder of
Company including, without limitation, the right to receive dividends or other
distributions of any kind, the right to vote or otherwise act at any annual or
special meeting of Stockholders of Company, the right to receive notice of any
corporate action and the right to exercise any preemptive rights.

     6. Expenses. All expenses incurred by or on behalf of either party hereto
in connection with the authorization, preparation, execution and consummation
of this Agreement, the option specified herein and the possible purchase of the
shares of Stock subject to the option, including, without limitation of the
generality of the foregoing, all fees and expenses of representatives, counsel
and accountants employed by either such party, shall be borne solely and
entirely by the party who or which has incurred the same.

     7. Warranties of Company. Company hereby represents and warrants as
follows:

          (a) The Board of Directors of Company has authorized the execution and
delivery of this Agreement by the officers of Company executing same;

          (b) The Board of Directors of Company has reserved for issuance, during
the period the option specified herein is exercisable, such number of shares of
Stock of Company as shall be necessary for full exercise of the option
specified in this Agreement and shall take such steps as are necessary to cause
there to be authorized shares available for the issuance of the Stock in the
event that the option is exercised; and

          (c) Any shares of Stock of Company issued and delivered pursuant to the
exercise of the option specified herein shall be validly issued, fully paid and
non-assessable.

     8. Miscellaneous.

          (a) All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given, if delivered
or sent by registered or certified mail, return receipt requested, first class
postage prepaid, as follows:

	 	 	 
	(1)

	 	If to Company, to:
	 
	 	 
	

	 	Encore Medical Corporation
	

	 	Attn.: Harry L. Zimmerman,
	

	 	Executive Vice President – General Counsel
	

	 	9800 Metric Blvd.
	

	 	Austin, Texas 78758

-2-

 

	 	 	 
	(2)

	 	If to Optionee, to:
	 
	 	 
	

	 	
 
	

	 	
 
	

	 	
 

or to such other address as either such party may designate in accordance with
this Section 8(a).

          (b) This Agreement shall be binding upon the parties hereto and their
respective successors and assigns, heirs, legatees and legal and personal
representatives.

          (c) The provisions of this Agreement are not intended to be (and shall not
serve) for the benefit of any creditor (other than a party hereto in its or his
capacity as such) of, or any other person (other than a party hereto in its or
his capacity as such) to whom any debts, liabilities obligations are owed by
(or who otherwise has a claim against), either party hereto, and no such
creditor or other person shall obtain any right under any provision hereof or
shall by reason of any such provision make claims in respect of the aforesaid
debts, liabilities or obligations (or otherwise) against Company or the other
party hereto.

          (d) The Article and other headings in this Agreement are inserted solely
as a matter of convenience and for reference and are not a part of this
Agreement.

          (e) This Agreement supersedes all prior agreements and understandings,
oral or written, between the parties hereto with respect to the subject matter
hereof. Neither this Agreement, nor any provision hereof, may be changed,
waived, discharged or terminated orally, but only by a statement in writing
signed by the party against which or whom the enforcement of such change,
waiver, discharge or termination is sought.

          (f) This Agreement shall be construed and enforced in accordance with the
laws of the State of Texas.

          (g) The Company does not guarantee the Stock from loss or depreciation.

          (h) All claims, disputes and other matters in question between the parties
to this Agreement, arising out of or relating to this Agreement or the breach
thereof, shall be decided by arbitration in accordance with the Arbitration
Rules of the American Arbitration Association then obtaining unless the parties
mutually agree otherwise. Notice of the demand for arbitration shall be filed
in writing with the other party to this Agreement and with the American
Arbitration Association. The demand shall be made within a reasonable time
after the claim, dispute or other matter in question has arisen. In no event
shall the demand for arbitration be made after the date when institution of
legal or equitable proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statute of limitations. The award
rendered by the arbitrators shall be final, and judgment may be entered upon it
in accordance with applicable law in any court having jurisdiction thereof.

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          (i) If any action is asserted or brought to enforce this Agreement, the
party or parties prevailing in any such action are entitled to reimbursement,
and shall be reimbursed by the non-prevailing party or parties for all costs
and expenses (including, without limitation, attorneys’ and accounting fees and
expenses) reasonably incurred by the prevailing party or parties in asserting
or bringing such action; provided, however, if such action is asserted for
monetary damages and if the party or parties asserting same are only partially
successful in asserting or bringing any such action, they shall be entitled to
reimbursement hereunder for their costs and expenses only in the proportion
that the amount awarded to such prevailing party bears to the total amount for
which any such action is brought or asserted.

          (j) The terms of this Agreement are also subject to the terms and
conditions of the Plan. Any conflict between the terms of this Agreement and
the Plan shall be resolved in favor of the specific terms of this Agreement,
but in the event that there is no specific language in this Agreement
concerning any specific provision, the terms and conditions of the Plan shall
govern.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	ENCORE MEDICAL CORPORATION,
	 	 	a Delaware corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:	 	 
	

	 	 	 	
 
	

	 	Title:	 	 
	

	 	 	 	
 
	 
	 	 	 	 
	 	 	OPTIONEE:
	 
	 	 	 	 
	 	 	
 
	 	 	NAME OF OPTIONEE

-4-exv10w6

 

Exhibit 10.6

STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT (this “Agreement”) is made as of
     , 20
     
between ENCORE MEDICAL CORPORATION, a Delaware corporation (the “Company”), and     (“Optionee”).

     WHEREAS, Optionee has agreed to serve as a Director of the Company;

     WHEREAS, the Company has established the 2000 Non-Employee Directors Stock
Option Plan (the “Plan”); and

     WHEREAS, in view of the foregoing, Company desires to grant to Optionee an
option to purchase shares of Company’s Common Stock, par value $0.001, (the
“Stock”).

     NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants
hereinafter set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Company and Optionee,
intending legally to be bound, hereby agree as follows:

     1. Grant of Option and Vesting. Company hereby grants to Optionee an
option to purchase an aggregate total of
      (     ) shares of Stock
upon the terms and conditions hereinafter set forth. Such option shall vest on     , 200
     , provided that Optionee is still a Director of the Company as
of such date.

     2. Term of Option.

          (a) The Optionee may exercise any vested option and purchase shares of
Stock under the Agreement at any time on or after the date hereof. The option
to purchase shares of Stock under this Agreement shall terminate on      ,
20      .

          (b) In the event of the failure of Optionee timely to exercise his option
on or prior to      , 20     , or in the event of the failure of Optionee
to exercise his option with respect to all of the shares of Stock subject to
the option within such time period, such part or parts, or the whole, as the
case may be, of Optionee’s option shall, ipso facto, become null and void and
shall no longer be of or have any further force or effect.

     3. Purchase Price. The purchase price per share of Stock subject to the
option specified herein shall be    .

     4. Procedure for Exercise of Option. Subject to the provisions of Article
2, Optionee may exercise the option specified herein by complying with the
provisions of Article 5 of the Plan.

     5. Changes in the Company’s Capital Structure.

          (a) After a merger of one or more corporations into the Company, Optionee
shall, at no additional cost, be entitled upon exercise of such options to
receive (subject to any required action by stockholders) in lieu of the number
of shares as to which such option shall then be so exercisable, the number and
class of shares of stock or other securities to which such holder would have
been

 

 

entitled pursuant to the terms of the agreement of merger if, immediately
prior to such merger, such holder had been the holder of record of a number of
shares of Stock equal to the number of shares as to which such option shall be
so exercised.

          (b) If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation or where
the Company will be a wholly owned subsidiary of another corporation, or if the
Company sells or otherwise disposes of all or substantially all of its property
or assets to another corporation while unexercised, vested or unvested options
remain outstanding under the Agreement, then:

               (i) subject to the provisions of clause (ii) below, after the effective
date of such merger, consolidation, or sale, as the case may be, Optionee shall
be entitled, upon exercise of any vested option, to receive, in lieu of shares
of Stock, the number and class of shares of such stock, other securities, cash,
and other property or rights as the holders of shares of Common Stock received
pursuant to the terms of the merger, consolidation, or sale and to which he
would have been entitled if, immediately prior to such merger, consolidation,
or sale, he had been the holder of record of a number of shares of Stock equal
to the number of shares as to which such vested option shall be so exercised;
and

               (ii) all outstanding vested options may be canceled by the Board of
Directors of the Company as of the effective date of any such merger,
consolidation, or sale, provided that (x) written notice of such cancellation
is given to the Optionee not later than thirty (30) days prior to such
effective date and (y) the Optionee shall have the right to exercise any vested
option in full (without regard to any limitations set forth in or imposed
pursuant to Article 2 hereof) during the said thirty (30)-day period preceding
the effective date of such merger, consolidation, or sale.

          (c) Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, for cash or property, or for labor or services, either upon
direct sale or upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Stock
then subject to outstanding options.

     6. Investment Warranty. Optionee acknowledges and understands that, in
connection with the issuance of any shares of Stock to it pursuant to the
exercise of the option specified in this Agreement (such shares hereinafter in
this Article 6 referred to as the “Shares”):

          (a) He has been fully informed as to the circumstances under which he is
permitted to take and required to hold the Shares pursuant to the requirements
of the Securities Act of 1933, as amended (the “Act”), and any applicable state
securities or Blue Sky law;

          (b) Rule 144 under the Act may not be available and, even if it is
available, Company will not be required to supply him with any information
necessary to enable him to make sales of the Shares pursuant to Rule 144 under
the Act (assuming such Rule is applicable and is otherwise available to him
with respect to the Shares), but Company may make publicly available such
adequate current public information with respect to Company as is required by
Rule 144 under the Act.

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     7. No Rights as Stockholder. The option specified in this Agreement shall
not, in and of itself, entitle Optionee to any rights as a stockholder of
Company including, without limitation, the right to receive dividends or other
distributions of any kind, the right to vote or otherwise act at any annual or
special meeting of Stockholders of Company, the right to receive notice of any
corporate action (except as otherwise specified in Article 5 hereof) and the
right to exercise any preemptive rights.

     8. Expenses. All expenses incurred by or on behalf of either party hereto
in connection with the authorization, preparation, execution and consummation
of this Agreement, the option specified herein and the possible purchase of the
shares of Stock subject to the option, including, without limitation of the
generality of the foregoing, all fees and expenses of representatives, counsel
and accountants employed by either such party, shall be borne solely and
entirely by the party who or which has incurred the same.

     9. Warranties of Company. Company hereby represents and warrants as
follows:

          (a) The Board of Directors of Company has authorized the execution and
delivery of this Agreement by the officers of Company executing same;

          (b) The Board of Directors of Company has reserved for issuance, during
the period the option specified herein is exercisable, such number of shares of
Stock of Company as shall be necessary for full exercise of the option
specified in this Agreement and shall take such steps as are necessary to cause
there to be authorized shares available for the issuance of the Stock in the
event that the option is exercised; and

          (c) Any shares of Stock of Company issued and delivered pursuant to the
exercise of the option specified herein shall be validly issued, fully paid and
non assessable.

     10. Miscellaneous.

          (a) All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given, if delivered
or sent by registered or certified mail, return receipt requested, first class
postage prepaid, as follows:

	 	 	 	 	 	 	 
	

	 	 	(1	)	 	If to Company, to:
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	Encore Medical Corporation
	

	 	 	 	 	 	Attn.: Harry L. Zimmerman, Executive Vice President –
	

	 	 	 	 	 	General Counsel
	

	 	 	 	 	 	9800 Metric Boulevard
	

	 	 	 	 	 	Austin, Texas 78758
	 
	 	 	 	 	 	 
	

	 	 	(2	)	 	If to Optionee, to:
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	
 

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or to such other address as either such party may designate in accordance with
this Section 10(a).

          (b) This Agreement shall be binding upon the parties hereto and their
respective successors and assigns.

          (c) The provisions of this Agreement are not intended to be (and shall not
serve) for the benefit of any creditor (other than a party hereto in its or his
capacity as such) of, or any other person (other than a party hereto in its or
his capacity as such) to whom any debts, liabilities obligations are owed by
(or who otherwise has a claim against), either party hereto, and no such
creditor or other person shall obtain any right under any provision hereof or
shall by reason of any such provision make claims in respect of the aforesaid
debts, liabilities or obligations (or otherwise) against Company or the other
party hereto.

          (d) The Article and other headings in this Agreement are inserted solely
as a matter of convenience and for reference and are not a part of this
Agreement.

          (e) This Agreement supersedes all prior agreements and understandings,
oral or written, between the parties hereto with respect to the subject matter
hereof. Neither this Agreement, nor any provision hereof, may be changed,
waived, discharged or terminated orally, but only by a statement in writing
signed by the party against which or whom the enforcement of such change,
waiver, discharge or termination is sought.

          (f) This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware.

          (g) The Company does not guarantee the Stock from loss or depreciation.

          (h) All claims, disputes and other matters in question between the parties
to this Agreement, arising out of or relating to this Agreement or the breach
thereof, shall be decided by arbitration in accordance with the Arbitration
Rules of the American Arbitration Association then obtaining unless the parties
mutually agree otherwise. Notice of the demand for arbitration shall be filed
in writing with the other party to this Agreement and with the American
Arbitration Association. The demand shall be made within a reasonable time
after the claim, dispute or other matter in question has arisen. In no event
shall the demand for arbitration be made after the date when institution of
legal or equitable proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statute of limitations. The award
rendered by the arbitrators shall be final, and judgment may be entered upon it
in accordance with applicable law in any court having jurisdiction thereof.

          (i) If any action is asserted or brought to enforce this Agreement, the
party or parties prevailing in any such action are entitled to reimbursement,
and shall be reimbursed by the non-prevailing party or parties for all costs
and expenses (including, without limitation, attorneys’ and accounting fees and
expenses) reasonably incurred by the prevailing party or parties in asserting
or bringing such action; provided, however, if such action is asserted for
monetary damages and if the party or parties asserting same are only partially
successful in asserting or bringing any such action, they shall be entitled to
reimbursement hereunder for their costs and expenses only in the proportion

 - 4 -

 

that the amount awarded to such prevailing party bears to the total amount for
which any such action is brought or asserted.

          (j) The terms of this Agreement are also subject to the terms and
conditions of the Plan. Any conflict between the terms of this Agreement and
the Plan shall be resolved in favor of the specific terms of this Agreement,
but in the event that there is no specific language in this Agreement
concerning any specific provision, the terms and conditions of the Plan shall
govern.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	ENCORE MEDICAL CORPORATION,
	 	 	a Delaware corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Kenneth W. Davidson,
	

	 	 	 	Chief Executive Officer
	 
	 	 	 	 
	 	 	OPTIONEE:
	 
	 	 	 	 
	 	 	
 
	 	 	NAME

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