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THESE OPTIONS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR STATE
SECURITIES LAWS. THESE OPTIONS CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR
OTHERWISE DISPOSED OF EXCEPT AS PERMITTED BY THIS AGREEMENT AND BY APPLICABLE
FEDERAL AND STATE SECURITIES LAWS.
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INTERWEST HOME MEDICAL
STOCK OPTION AGREEMENT
This Agreement is entered into this 13th day of December 1999, by and
between Interwest Homed Medical, Inc., a Utah corporation ("Corporation") and
James E. Robinson (" Executive").
RECITALS:
WHEREAS, the purpose of granting this option to Executive is to promote
the success of the Corporation and to advance the interests of the Corporation
by providing an additional means, through the grant of these stock options, to
motivate, retain and reward Executive with an incentive for high levels of
individual performance and improved financial performance of the Corporation;
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1. Grant of Option, Option Types and Exercise Period.
1.1 Grant of Options. Subject to the terms and conditions of this
Agreement, the Corporation hereby grants to the Executive, options ("Options")
to purchase from the Corporation up to 78,000 Shares ("Option Shares") at a
price of $3.00 per Share ("Exercise Price"). The Options granted hereby are
immediately and fully vested.
2. NSO's. Each Option granted hereunder shall be deemed to be a Non-
Statutory Stock Option ("NSO'").
3. Exercise of Option. Each Option shall become exercisable by the
Executive beginning on the date hereof and must be exercised, if at all prior to
termination of such Option.
3.1. Manner of Exercise. The Option granted hereunder may be
exercised in whole or in part by delivery to the Corporation, from time to time,
of a written notice signed by the Executive, specifying the number of Option
Shares that the Executive then desires to purchase, together with cash,
certified check, or bank draft payable to the order of the Corporation or with
some other form of payment acceptable to the Board of Directors of the
Corporation, for an amount equal to the Exercise Price of such Option Shares.
Executive may pay all or a portion of the Exercise Price, and/or the tax
withholding liability with respect to the exercise of the Option either by
surrendering shares of stock already
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owned by Executive or by withholding Option Shares, provided that the Board of
Directors of the Corporation determines that the fair market value of such
surrendered stock or withheld Option Shares is equal to the corresponding
portion of such Exercise Price and/or tax withholding liability, as the case may
be, to be paid for therewith.
3.2. Certificates. Promptly after any exercise in whole or in part
of the Option by the Executive, the Corporation shall deliver to the Executive a
certificate or certificates for the number of Option Shares with respect to
which the Option was so exercised, registered in the Executive's name.
4. Representations and Warranties of Executive. Executive hereby
represents and warrants to the Corporation that:
4.1. Legal and Tax Counsel. Executive has consulted with his own
attorney and tax advisor regarding legal matters concerning this Option and an
investment in the Corporation and the tax consequences of this Option and of
such an investment.
4.2. No Guaranties. Executive acknowledges that he is aware that there is
no assurance with respect to the profitability of the Corporation.
4.3. Knowledge. Executive is, by reason of his business or financial
experience capable of evaluating the merits and risks of an investment in the
Corporation and of protecting Executive's own interests in connection with his
acquisition of this Option and an investment in the Corporation.
4.4. Restricted Option and Shares. Executive acknowledges that this
Option and the Option Shares are restricted and will be restricted unless
registered under applicable securities laws. Executive is aware that it may not
be possible to liquidate his investment in the Corporation. Executive agrees,
that until registered, certificates evidencing the Option Shares shall bear a
legend restricting the transfer thereof consistent with the foregoing and that
stock transfer instructions may be issued to the Corporation's transfer agent
restricting the transfer of the Option Shares.
5. Duration of Option. The Option, granted hereunder shall terminate five
years from the date hereof.
6. Restriction on Transfer. Unless other wise permitted by the Board of
Directors of the Corporation, this Option is not transferable by the Executive
otherwise than by testamentary will or the laws of descent and distribution and,
during the Executive's lifetime, may be exercised only by the Executive or the
Executive's guardian or legal representative. Except as permitted by the
preceding sentence, neither this Option nor any of the rights and privileges
conferred thereby shall be transferred, assigned, pledged, or
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hypothecated in any way (whether by operation of law or otherwise), and no such
option, right, or privilege shall be subject to execution, attachment, or
similar process. Upon any attempt to transfer this Option, or of any right or
privilege conferred thereby, contrary to the provisions hereof, or upon the levy
of any attachment or similar process upon such option, right, or privilege, this
Option and any such rights and privileges shall immediately become null and
void.
7. Exercise in Event of Death or Disability. Whenever the word "Executive"
is used in any provision of this Agreement under circumstances when the
provision should logically be construed to apply to the Executive's guardian,
legal representative, executor, administrator, or the person or persons to whom
the Option may be transferred by testamentary will or by the laws of descent and
distribution, the word "Executive" shall be deemed to include such person or
persons.
8. No Rights As Shareholder Prior To Exercise. The Executive shall not, by
virtue hereof, be entitled to any rights of a shareholder in the Corporation,
either at law or equity. The rights of the Executive are limited to those
expressed in this Option and are not enforceable against the Corporation except
to the extent set forth herein.
9. Registration of Option Shares. The Option Shares have not been
registered with the Securities and Exchange Commission. The Company shall use
its best efforts to register the Options Shares on Form S-8 with the Securities
and Exchange Commission as soon as practical.
10. Anti-Dilution Provisions. The number and kind of Shares purchasable
upon the exercise of this Option and the exercise price shall be subject to
adjustment from time to time as follows:
10.1. In case the Corporation shall (i) pay a dividend or make a
distribution on the outstanding Shares payable in Shares, (ii) subdivide the
outstanding Shares into a greater number of Shares, (iii) combine the
outstanding Shares into a lesser number of Shares, or (iv) issue by
reclassification of the Shares any Shares of the Corporation, the Executive
shall thereafter be entitled, upon exercise, to receive the number and kind of
shares which, if this Option had been exercised immediately prior to the
happening of such event, the Executive would have owned upon such exercise and
been entitled to receive upon such dividend, distribution, subdivision,
combination, or reclassification.
10.2. In case the Corporation shall consolidate or merge into or
with another corporation, or in case the Corporation shall sell or convey to any
other person or persons all or substantially all the property of the
Corporation, the Executive shall thereafter be entitled, upon exercise, to
receive the kind and amount of shares, other securities, cash, and property
receivable upon such consolidation, merger, sale, or conveyance by a holder of
the number of Shares which might have been purchased upon exercise of this
Option
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immediately prior to such consolidation, merger, sale, or conveyance, and shall
have no other conversion rights. In any such event, effective provision shall be
made, in the certificate or articles of incorporation of the resulting or
surviving corporation, in any contracts of sale and conveyance, or otherwise so
that, so far as appropriate and as nearly as reasonably may be, the provisions
set forth herein for the protection of the rights of the Executive shall
thereafter be made applicable.
10.3. Whenever the number of Shares purchasable upon exercise of
this Option is adjusted pursuant to this Section, the exercise price per Share
shall be adjusted simultaneously by multiplying that exercise price per Share in
effect immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Shares purchasable upon exercise of this Option
immediately prior to such adjustment, and of which the denominator shall be the
number of Shares so purchasable immediately after such adjustment, so that the
aggregate exercise price of this Option remains the same.
10.4. The existence of the Option shall not affect in any way the
right or power of the Corporation or its shareholders to make or authorize any
adjustments, recapitalization, reorganization, or other changes in the
Corporation's capital structure or its business, or any merger or consolidation
of the Corporation, or any issue of bonds, debentures, preferred shares with
rights greater than or affecting the Shares, or the dissolution or liquidation
of the Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
11. Notices. Any notices permitted or required under this Agreement shall
be deemed given upon the date of personal delivery or 48 hours after deposit in
the United States mail, postage fully prepaid, return receipt requested,
addressed to the Corporation at its principal placement of business and to
Executive at his residence.
14. Miscellaneous
14.1. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah.
14.2. Titles and Captions. All section titles or captions contained
in this Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
14.3. Entire Agreement. This Agreement contains the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Agreement.
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14.4. Binding Agreement. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
14.5. Computation of Time. In computing any period of time pursuant
to this Agreement, the day of the act, event or default from which the
designated period of time begins to run shall be included, unless it is a
Saturday, Sunday, or a legal holiday, in which event the period shall begin to
run on the next day which is not a Saturday, Sunday, or legal holiday. In the
event that the last day of any period falls on a Saturday, Sunday or legal
holiday, such period shall run until the end of the next day thereafter which is
not a Saturday, Sunday, or legal holiday.
14.6. Arbitration. If at any time during the term of this Agreement
any dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award rendered by
the arbiter may be entered in any court having jurisdiction thereof.
14.7. Further Action. The parties hereto shall execute and deliver
all documents, provide all information and take or forbear from all such action
as may be necessary or appropriate to achieve the purposes of the Agreement.
14.8. Parties in Interest. Nothing herein shall be construed to be
to the benefit of any third party, nor is it intended that any provision shall
be for the benefit of any third party.
14.9. Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above-written.
INTERWEST HOME MEDICAL, INC.: EXECUTIVE:
By /s/ Que H. Christensen /s/ James E. Robinson
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Que H. Christensen James E. Robinson
Chief Financial Officer
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