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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934 (Amendment No. )*
Preferred Employers Holdings, Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
739908-10-1
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(CUSIP Number)
Mr. Mel Harris Donald J. Bezahler, Esq.
Preferred Employers Holdings, Inc. Baer Marks & Upham LLP
10800 Biscayne Boulevard 805 Third Avenue
Miami, Florida 33161 New York, New York 10022
(305) 893-4040 (212) 702-5700
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
February 5, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box \ \.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Page 1 of 7 Pages)
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SCHEDULE 13D
CUSIP No. 739908-10-1 Page 2 of 7 Pages
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1. NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE
PERSONS (ENTITIES ONLY)
Mel Harris
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |X|
3. SEC USE ONLY
4. SOURCE OF FUNDS OO (See Items 3 and 5 below.)
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) \ \
6. CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH
7. SOLE VOTING POWER 2,575,294 (See Item 5)
8. SHARED VOTING POWER 0
9. SOLE DISPOSITIVE POWER 1,340,000 (See Item 5)
10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,751,764
(See Items 3 and 5)
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 58.2%
(See Item 5)
14. TYPE OF REPORTING PERSON IN (Individual)
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CUSIP No. 739908-10-1 Page 3 of 7 Pages
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Item 1. Security and Issuer.
This Statement on Schedule 13D (the "Statement") relates to common
stock, par value $.01 per share (the "Common Stock"), of Preferred Employers
Holdings, Inc., a Delaware corporation (the "Company"). The address of the
principal executive offices of the Company is 10800 Biscayne Boulevard, Miami,
Florida 33161.
Item 2. Identity and Background.
(a) This Statement is filed by Mr. Mel Harris (the "Reporting Person").
The Reporting Person, together with Mr. Howard Odzer ("Mr. Odzer"), the former
President of Preferred Employers Group, Inc., a wholly-owned subsidiary of the
Company ("PEGI"), and Mr. Ronald Rothstein ("Mr. Rothstein"), the step-brother
of Mr. Odzer (collectively, the "Other Parties"), may be deemed a "group" for
purposes of Rule 13d-5(b)(1) under the Securities and Exchange Act of 1934, as
amended (the "Act") as a result of irrevocable proxies dated as of May 15, 1995
(collectively, the "Irrevocable Proxies") granted to the Reporting Person by
each of Mr. Odzer and Mr. Rothstein. The Reporting Person is filing this
Statement on his own behalf and not on behalf of any of the Other Parties. The
Irrevocable Proxies are more fully described in Items 3 and 5 of this Statement.
(b) The Reporting Person's business address is 10800 Biscayne
Boulevard, Miami, Florida 33161.
(c) The present principal occupation or employment of the Reporting
Person is the Chairman of the Board, Chief Executive Officer and President of
the Company, which is a multi-service oriented provider engaged as a general
agent, a reinsurer and a provider of temporary professional medical personnel to
client hospitals.
(d) During the last five years, the Reporting Person has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, the Reporting Person has not been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which proceeding he was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) The Reporting Person is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
The summary of the agreements discussed in this Item are not intended
to be complete and are qualified in their entirety by reference to the full text
of such agreements, copies of which are attached hereto and are incorporated
herein by reference.
In February 1997, the Company and PEGI effected a share exchange,
pursuant to which the Reporting Person acquired 1,450,000 shares of Common Stock
of the Company in exchange for 82.16 shares of common stock of PEGI.
On May 15, 1995, the Reporting Person was granted Irrevocable Proxies
to vote all of the shares of Common Stock held of record by each of Mr. Odzer
and Mr. Rothstein in connection with all matters to be voted upon by the
shareholders of the Company during the duration thereof, whether at a meeting or
by written consent. Pursuant to the Irrevocable Proxies, the Reporting Person
beneficially owns (i) 1,111,765 shares of Common Stock held of record by Mr.
Odzer and (ii) 123,529 shares of Common Stock held of record by Mr. Rothstein.
The Irrevocable Proxies are more fully described in Item 5 of this Statement.
Pursuant to the Company's 1996 Employee Stock Option Plan, the
Reporting Person was granted options to purchase 275,000 shares of Common Stock
of the Company, subject to the terms of a Stock Option Agreement dated as of
August 20, 1997 (the "Stock Option Agreement"). The Stock Option Agreement
provides, among other things, that the options will vest over a period of five
years commencing in August 1998. The total number of shares described in this
Statement does not include such options.
Item 4. Purpose of Transaction.
The Reporting Person is the co-founder, Chairman of the Board, Chief
Executive Officer and President of the Company and all of the 1,340,000 shares
of Common Stock held of record solely by the Reporting Person were acquired for
investment purposes. The Reporting Person is in a position to influence and
control the management and policies of the Company as a result of the shares
held of record directly by the
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CUSIP No. 739908-10-1 Page 4 of 7 Pages
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Reporting Person, together with the 1,235,294 shares of Common Stock deemed
beneficially owned by the Reporting Person pursuant to the Irrevocable Proxies.
The Reporting Person reserves the right, and may in the future (i)
acquire additional shares of Common Stock from time to time in the open market,
through privately negotiated transactions or otherwise; (ii) dispose of shares
of Common Stock in the open market, through privately negotiated transactions or
otherwise; and (iii) consider recommending to the Company corporate transactions
such as those enumerated in Item 4(a) though (i) below.
The Reporting Person does not currently have any definitive plans or
proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the
Company, or the disposition of securities of the Company;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of
its subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Company or any of its subsidiaries;
(d) Any change in the present board of directors or management of
the Company other than in the ordinary course of business. The
Reporting Person intends to nominate a director to fill an
existing vacancy on the board of directors;
(e) Any material change in the present capitalization or dividend
policy of the Company;
(f) Any other material change in the Company's business or
corporate structure including, but not limited to, if the
Company is a registered closed-end investment company, any
plans or proposals to make any changes in its investment
policy for which a vote is required by Section 13 of the
Investment Company Act of 1940;
(g) Changes in the Company's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person;
(h) Causing a class of securities of the Company to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(i) A class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Act; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
The text of Item 3 is hereby incorporated herein by reference.
The summary of the agreements discussed in this Item are not intended
to be complete and are qualified in their entirety by reference to the full text
of such agreements, copies of which are attached hereto and are incorporated
herein by reference.
(a) As of May 27, 1998, the Reporting Person may be deemed to
beneficially own approximately 2,751,764 shares of Common Stock, representing
approximately 58.2% of the outstanding shares of Common Stock. Such total number
includes (i) 88,235 shares held of record by Francine Harris ("Mrs. Harris"),
the wife of the Reporting Person, (ii) 88,235 shares held of record by Mrs.
Harris, as custodian for Jamie Jo Harris, the daughter of the Reporting Person
and Mrs. Harris, (iii) 1,111,765 shares held of record by Mr. Odzer, pursuant to
which the Reporting Person has an irrevocable proxy to vote such shares, subject
to the terms thereof, and (iv) 123,529 shares held of record by Mr. Rothstein,
pursuant to which the Reporting Person has an irrevocable proxy to vote such
shares, subject to the terms thereof. The Reporting Person disclaims beneficial
ownership of (a) 88,235 shares held of record by Mrs. Harris and (b) 88,235
shares held of record by Mrs. Harris, as custodian for Jamie Jo Harris, the
daughter of the Reporting Person and Mrs. Harris. The total number of shares
does not include options granted to the Reporting Person to purchase 275,000
shares of Common Stock which vest over a period of five years commencing in
August 1998. On October 3, 1997, the Reporting Person gifted 100,000 shares of
Common Stock to Yeshiva University. On November 5, 1997, the Reporting Person
gifted 10,000 shares of Common Stock to Aventura-Turnberry Jewish Center. As of
the date of this Statement, the Reporting Person directly owns 1,340,000 shares
of Common Stock.
The Company, the Reporting Person and Mr. Odzer entered into a
Shareholders Agreement dated as of February 11, 1997 (the "Shareholders
Agreement"), which defines the rights of the shareholders. The Shareholders
Agreement provides, among other things, that the
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CUSIP No. 739908-10-1 Page 5 of 7 Pages
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Irrevocable Proxies granted to the Reporting Person in May 1995 shall continue
irrevocable until the termination of the right of first refusal set forth in the
Shareholders Agreement, which shall remain in full force and effect for so long
as Mr. Odzer owns more than fifteen percent (15%) of the outstanding Common
Stock. As of May 27, 1998, Mr. Odzer was the record owner of 1,111,765 shares of
Common Stock of the Company, representing approximately 23.5% of the outstanding
shares of Common Stock, including 300,000 shares of Common Stock placed in
escrow pursuant to the terms of the Share Escrow Agreement dated as of February
5, 1997 (the "Share Escrow Agreement").
Pursuant to the Share Escrow Agreement, 300,000 shares of Common Stock
owned of record by Mr. Odzer are held in escrow until February 5, 2001 for
issuance upon the exercise of stock options granted by him to certain directors,
executives and other officers of the Company, as designated by the Compensation
Committee of the Board of Directors of the Company. Upon termination of the
Share Escrow Agreement, the shares of Common Stock underlying any unexercised
options will revert back to Mr. Odzer, provided, however that such shares shall
be subject to the irrevocable proxy granted to the Reporting Person by Mr. Odzer
until Mr. Odzer no longer owns more than fifteen percent (15%) of the
outstanding Common Stock. As of May 27, 1998, options to purchase 221,500 shares
of Common Stock were outstanding under the Share Escrow Agreement, of which
92,750 options are exercisable within sixty (60) days of the date of this
Statement. Upon the exercise of any such options, the Reporting Person will no
longer be deemed the beneficial owner of, and will not have voting power over,
the shares underlying the options which have been exercised.
As of May 27, 1998, no options granted under the Share Escrow Agreement
had been exercised. The Reporting Person currently has sole voting power over
all of the 1,235,294 shares of Common Stock subject to the Irrevocable Proxies.
Mr. Odzer has sole investment power over 811,765 of the 1,111,765 shares of
Common Stock owned of record by him and the Compensation Committee of the Board
of Directors of the Company has sole investment power with respect to the
300,000 shares subject to the Share Escrow Agreement. Mr. Rothstein has sole
investment power over all of the 123,529 shares of Common Stock held of record
by him.
(b) As of May 27, 1998, the Reporting Person may be deemed to have an
interest in the shares of Common Stock of the Company as follows:
(i) sole power to vote or to direct the vote: 2,575,294 shares;
(ii) shared power to vote or to direct the vote: 0 shares;
(iii) sole power to dispose or to direct the disposition of:
1,340,000 shares; and
(iv) shared power to dispose or to direct the disposition of:
0 shares.
(c) The Reporting Person did not consummate any transactions in respect
of the Common Stock of the Company during the past sixty days.
(d) As described herein, (i) Mrs. Harris is the record owner of 176,470
shares of Common Stock, (ii) Mr. Odzer is the record owner of 1,111,765 shares
of Common Stock, and (iii) Mr. Rothstein is the record owner of 123,529 shares
of Common Stock. As such, Mrs. Harris, Mr. Odzer and Mr. Rothstein,
respectively, have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, such shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The text of Items 3 and 5 are hereby incorporated herein by reference.
The summary of the agreements discussed in this Item are not intended
to be complete and are qualified in their entirety by reference to the full text
of such agreements, copies of which are attached hereto and are incorporated
herein by reference.
The Shareholders Agreement includes terms regarding restrictions on the
transferability of shares owned by them or by members of their respective
families and other matters. Under the Shareholders Agreement, the Reporting
Person and Mr. Odzer have agreed to rights of first refusal under certain
circumstances with respect to the disposition of shares of Common Stock subject
to the agreement and tag-along rights, registration rights and indemnification
with respect to the Reporting Person and Mr. Odzer.
On May 15, 1995, the Reporting Person was granted Irrevocable Proxies
to vote all of the shares of Common Stock held of record by each of Mr. Odzer
and Mr. Rothstein in connection with all matters to be voted upon by the
shareholders of the Company during the duration thereof, whether at a meeting or
by written consent. The Irrevocable Proxies shall continue irrevocable until the
termination of the right of first refusal set forth in the Shareholders
Agreement, which shall remain in full force and effect for so long as Mr. Odzer
owns more than fifteen percent (15%) of the outstanding Common Stock. As of May
27, 1998, Mr. Odzer owned 1,111,765 shares of Common Stock of the Company,
representing approximately 23.5% of the outstanding shares of Common Stock.
Pursuant to the Irrevocable Proxies, the Reporting Person may
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CUSIP No. 739908-10-1 Page 6 of 7 Pages
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be deemed to beneficially own (i) 1,111,765 shares of Common Stock held of
record by Mr. Odzer and (ii) 123,529 shares of Common Stock held of record by
Mr. Rothstein.
Of the 1,111,765 shares of Common Stock of the Company owned of record
by Mr. Odzer, 300,000 of such shares are subject to the terms of the Share
Escrow Agreement until February 5, 2001. Upon termination of the Share Escrow
Agreement, the shares of Common Stock underlying any unexercised options will
revert back to Mr. Odzer, provided, however that such shares shall be subject to
the irrevocable proxy granted to the Reporting Person by Mr. Odzer until Mr.
Odzer no longer owns more than fifteen percent (15%) of the outstanding Common
Stock. As of May 27, 1998, no options granted under the Share Escrow Agreement
had been exercised. The Reporting Person currently has sole voting power, and
the Compensation Committee currently has sole investment power, with respect to
all 300,000 shares of Common Stock subject to the Share Escrow Agreement. In the
event of exercise of any options granted thereunder, the record holder of the
shares of Common Stock would have sole voting and investment power over the
shares of Common Stock underlying the exercised options.
Pursuant to the Company's 1996 Employee Stock Option Plan, the
Reporting Person may from time to time receive options to purchase shares of
Common Stock in addition to the options to purchase 275,000 shares of Common
Stock which were granted to the Reporting Person under the Stock Option
Agreement described more fully in Item 3 hereof.
Other than as described above and in Items 3 and 5 hereof, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the Reporting Person and any other person with respect to any shares of
Common Stock of the Company, including but not limited to transfer or voting of
any shares of Common Stock, finder's fees, joint ventures, loan or option
agreements, put or calls, guarantees of profits, division of profits or loss, or
the giving or withholding of proxies.
Item 7. Material to be filed as Exhibits.
The following documents are filed as exhibits:
Exhibit 1. Share Exchange Agreement dated as of February 5,
1997, among the Company and each of the stockholders
of PEGI listed therein.
Exhibit 2. Shareholders Agreement dated as of February 11, 1997,
among the Company, the Reporting Person and Howard
Odzer.
Exhibit 3. Irrevocable Proxy of Howard Odzer dated as of May 15,
1995.
Exhibit 4. Irrevocable Proxy of Ronald Rothstein dated as of May
15, 1995.
Exhibit 5. Share Escrow Agreement dated as of February 5, 1997,
by and among the Company, Howard Odzer and Baer Marks
& Upham LLP.
Exhibit 6. Stock Option Agreement dated as of August 20, 1997,
between the Company and Mel Harris.
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CUSIP No. 739908-10-1 Page 7 of 7 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
/s/ Mel Harris
--------------------------------------
Mel Harris
Dated: June 8, 1998
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EXHIBIT 1
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT dated as of February 5, 1997 among Preferred
Employers Holdings, Inc., a Delaware corporation (the "Company"), and each of
the stockholders of Preferred Employers Group, Inc., a Florida corporation
("PEGI") set forth on ANNEX A hereto (the "Stockholders"), sets forth the terms
and conditions upon which each Stockholder shall exchange, assign and transfer
to the Company, and the Company shall exchange and acquire from each
Stockholder, all of the shares of common stock, par value $.01 per share (the
"PEGI Shares"), of PEGI owned by such Stockholder.
In consideration of the mutual covenants and agreements contained herein,
and intending to be legally bound hereby, each of the Stockholders and the
Company hereby covenant and agree as follows:
1. EXCHANGE AND PURCHASE OF SHARES. Subject to the terms and
conditions of this Agreement, effective February 11, 1997, each of the
Stockholders shall exchange, assign and transfer, and the Company shall exchange
and acquire from each such Stockholder, all of such Stockholder's right, title
and interest, legal or equitable, in and to the number of PEGI Shares which such
Stockholder owns as set forth opposite his name on ANNEX A hereto.
2. PURCHASE PRICE. In exchange and as consideration for each PEGI
Share, the Company shall issue with respect thereto 17,647.06 duly authorized,
fully paid and non-assessable shares of common stock, par value $.01 per share,
of the Company (the "Company Shares") upon the execution hereof and,
concurrently therewith, each Stockholder shall deliver to the Company a
certificate or certificates representing the number of PEGI Shares held by such
Stockholder as set forth opposite his name on ANNEX A hereto, duly endorsed for
transfer.
3. REPRESENTATIONS AND WARRANTIES. Each Stockholder represents and
warrants to the Company that such Stockholder is the owner of his PEGI Shares
free and clear of any lien, claim, other encumbrance and has the right to assign
and transfer ownership in such shares to the Company free and clear of any such
lien, claim, other encumbrance or contractual restriction.
4. MISCELLANEOUS. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. This Agreement shall be governed
by and construed in accordance with the internal substantive laws of the State
of New York, without giving effect to any conflict or choice of laws. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Share Exchange
Agreement to be duly executed as of the date first above written.
STOCKHOLDERS:
/s/ Mel Harris
------------------------------
Mel Harris
/s/ Howard Odzer
------------------------------
Howard Odzer
/s/ Francine Harris
------------------------------
Francine Harris
/s/ Francine Harris
------------------------------
Francine Harris, as custodian
for Jamie Jo Harris
/s/ Alan Harris
------------------------------
Alan Harris
/s/ Ginger Harris
------------------------------
Ginger Harris
/s/ Nicole Kramer
------------------------------
Nicole Tannenbaum Kramer
/s/ Ronald Rothstein
------------------------------
Ronald Rothstein
/s/ Nancy Ryan
------------------------------
Nancy Ryan
<PAGE>
ANNEX A
STOCKHOLDER NUMBER OF SHARES
- ----------- ----------------
Mel Harris 82.16
Francine Harris 5.0
Francine Harris, as custodian for
Jamie Jo Harris 5.0
Ginger Harris 2.5
Allan Harris 1.42
Nicole Tannenbaum Kramer 2.5
Howard Odzer 63.0
Ronald Rothstein 7.0
Nancy Ryan 1.42
--------
Total Shares outstanding 170.0
<PAGE>
EXHIBIT 2
SHAREHOLDERS AGREEMENT
This shareholders agreement (this "Agreement") is made as of February 11,
1997 by and among PREFERRED EMPLOYERS HOLDINGS, INC., having an address at 10800
Biscayne Boulevard, 10th Floor, Miami, Florida 33161 (together with Preferred
Employers Group, being the predecessor and a wholly-owned subsidiary of
Preferred Employers Holdings, Inc., the "Company"), MEL HARRIS, an individual
having an address at 10800 Biscayne Boulevard, Penthouse, Miami, Florida 33161
("Harris") and HOWARD ODZER, an individual having an address at 1399 Northeast
103rd Street, Miami Shores, Florida 33138 ("Odzer" and, together with Harris,
the "Shareholders").
WITNESSETH
WHEREAS, the Company and the Shareholders were parties to that certain
Amended and Restated Shareholders Agreement dated as of May 15, 1995 (the
"Original Shareholders Agreement"; capitalized terms not otherwise defined
herein shall have the meanings assigned thereto in the Original Shareholders
Agreement);
WHEREAS, the Company completed an initial public offering of its stock under
the Securities Act of 1933, as amended, pursuant to a prospectus dated February
5, 1997 (the "Offering");
WHEREAS, pursuant to the terms of the Original Shareholders Agreement, such
Agreement terminated immediately prior to completion of the Offering;
WHEREAS, the Company and the Shareholders desire to enter into this
Shareholders Agreement pursuant to Section 17(b) of the Original Shareholders
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. INDEMNIFICATION. (a) Each Shareholder (including here and hereinafter,
the heirs, executors, administrators or estate of such Shareholder) who is or
was a director, officer, agent or employee of the Company or who is or was
serving at the request of the Company in the position of a director, officer,
trustee, partner, agent or employee of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified by the Company as of
right to the fullest extent permitted or authorized by current or future
legislation or by current or future judicial or administrative decision (but, in
the case of any future legislation or decision, only to the extent that it
permits the Company to provide broader indemnification rights than permitted
prior to the legislation or decision), against all fines, liabilities,
settlements, costs and expenses, including attorneys' fees, asserted against him
or incurred by him (whether arising out of actions or omissions occurring before
or after the date hereof) in his capacity as such director, officer, trustee,
partner, agent or employee, or arising out of his status as such director,
officer, trustee, partner, agent or employee. The foregoing right of
indemnification shall not be exclusive of other rights to which those seeking
indemnification may be entitled.
(b) Subject to the provisions of Section 1(c) hereof, costs, charges and
expenses (including reasonable attorneys' fees) incurred by a person referred to
in Section 1(a) hereof in defending a civil or criminal suit, action or
proceeding shall be paid promptly by the Company, as statements therefor are
received, in advance of the final disposition thereof, upon receipt of an
undertaking to repay all amounts advanced if it is ultimately determined that
the person is not entitled to be indemnified by the Company as authorized by
this Section 1.
(c) Promptly after a Shareholder (or his heirs, executors, administrators
and estate) (collectively, an "Indemnified Person") receives notice of the
commencement of any action or other proceeding in respect of which
indemnification or reimbursement may be sought under this Section 1, such
Indemnified Person will notify the Company thereof; but the omission so to
notify the Company shall not relieve the Company from any obligation under this
Section 1 unless, and only to the extent that, such omission results in
prejudice to the rights and interests of the Company. If any such action or
other proceeding shall be
1
<PAGE>
brought against any Indemnified Person, the Company shall, upon written notice
given reasonably promptly following the Indemnified Person's notice to the
Company of such action or proceeding, be entitled to assume the defense thereof
at the Company's expense with counsel chosen by the Company, provided, however,
that any Indemnified Person may at his own expense retain separate counsel to
participate in such defense. Notwithstanding the foregoing, such Indemnified
Person shall have the right to employ separate counsel at the Company's expense
and to control his own defense of such action or proceeding if (i) the Company
has failed promptly to assume the defense, or (ii) in the reasonable opinion of
counsel to the Company, there is a conflict of interest arising from the fact
that the same counsel is representing both the Company and the Indemnified
Person or there is a potential conflict of interest between the Company and such
Indemnified Person that would make such separate representation advisable. The
Company will not, without the prior written consent of the Indemnified Person,
settle, compromise or consent to the entry of any judgment in or otherwise seek
to terminate any pending or threatened claim, action or proceeding in respect of
which indemnification or reimbursement may be sought under this Section 1
(whether or not the Indemnified Person is a party thereto) unless such
settlement, compromise, consent or termination includes an unconditional release
of the Indemnified Person from all liability arising or that may arise out of
such claim, action or proceeding.
(d) If this Section 1 or any portion of it is invalidated on any ground by a
court of competent jurisdiction, the Company shall nevertheless indemnify each
Shareholder (and his heirs, executors, administrators and estate) to the fullest
extent permitted by all portions of this Section 1 that has not been invalidated
and to the fullest extent permitted by law.
(e) This Section 1 is intended for the benefit of, and shall be enforceable
by, the Shareholders (and the heirs, executors, administrators and estate of
such persons) and shall be binding on the Company and its respective successors
and assigns.
2. REGISTRATION RIGHTS; TAG-ALONG RIGHTS. The Company agrees that Odzer
(and/or members of Odzer's family or any entity owned by Odzer or Odzer's
family) shall be granted registration rights (including with respect to those
shares held in escrow pursuant to that certain Share Escrow Agreement dated
February 5, 1997, once such shares have been released from escrow) PARI PASSU
with those granted to Harris (and/or members of Harris' family), if any, pro
rata based on the number of shares of Stock owned by them at the time any such
rights are granted. In the event Harris (or members of Harris' family) proposes
to transfer any shares of Stock, to a bona fide third party purchaser, Harris
shall offer Odzer (and/or members of Odzer's family or any entity owned by Odzer
or Odzer's family) the right to participate in such transfer on a pro rata
basis, at the same price and upon identical terms and conditions, as such
proposed transfer by Harris.
3. RIGHT OF FIRST REFUSAL. (a) A Shareholder (the "Offering Shareholder")
who proposes to dispose of any shares of Stock shall give a notice (the
"Notice") signed by the offering Shareholder to the Company and on the same day
give Notice to the other Shareholder (the "Non-Offering Shareholder") of such
Offering Shareholder's proposed disposition; PROVIDED, HOWEVER, that no Notice
of any proposed disposition by sale of the offered Shares shall be valid unless
the Offering Shareholder shall have received prior to the date of the Notice an
offer therefor in writing from any BONA FIDE purchaser stating the price, terms,
and conditions of the proposed sale. The Notice shall specify the number of
shares (the "Offered Shares") the Offering Shareholder intends to dispose of,
identify and give the address of the person to whom the Offering Shareholder
proposes to dispose of the Offered Shares, and indicate the price, terms, and
conditions of the proposed disposition. The Company shall have the irrevocable
and exclusive first option, but not the obligation, to purchase all, but not
part, of the Offered Shares, at the price and upon any terms and conditions
equal to those offered by the prospective purchaser, provided that the Company
gives notice of its election to purchase the Offered Shares to the Offering
Shareholder within 30 days after the Company receives the Notice.
(b) If the Company does not elect to purchase all of the Offered Shares as
provided in Section 3(a) above, then the Offering Shareholders shall thereafter
provide the Non-Offering Shareholder with a notice (the "Second Notice") that
the Company has not so elected, and the Non-Offering Shareholder
2
<PAGE>
shall have the irrevocable and exclusive second option, but not the obligation,
to purchase all, but not part, of the Offered Shares, at the price and upon such
terms and conditions as those offered by the prospective purchaser. If the
Non-Offering Shareholder elects to purchase the Offered Shares he shall give
notice of such election to the Offering Shareholder within 10 days after the
receipt of the Second Notice by the Non-Offering Shareholder and the purchase
thereof shall be closed within 40 days after receipt of the Second Notice.
(c) If an Offering Shareholder gives the required Notice, and the Second
Notice, and the Company and the Non-Offering Shareholder do not elect, pursuant
to Sections 3(a) and 3(b) , to purchase the Offered Shares, the Offering
Shareholder may dispose of the Offered Shares to the person or persons, at the
price, and on the terms and conditions specified in the Notice, provided that
each such person acquiring the Offered Shares becomes a party to this Agreement
upon such acquisition, and any shares not so disposed of by such Offering
Shareholder may not thereafter be disposed of, except in compliance with the
terms and conditions of this Agreement.
(d) The provisions of Section 3 shall remain in effect for so long as Odzer
owns more than fifteen percent (15%) of the outstanding Stock of the Company.
Furthermore, the Proxy given as of May 15, 1995 shall continue irrevocable for
so long as this Section 3 remains in full force and effect.
(e) The provisions of Section 3 shall not apply to (i) any proposed
dispositions to be made pursuant to Rule 144 or any Registration Statement in
effect under the Securities Act of 1933, as amended, or (ii) any transfers by a
Shareholder of shares of Stock or beneficial interests therein to their
respective spouses, or other immediate family members, or to a trust or other
entity for the sole benefit of any of the foregoing; provided that any such
transferee agrees to be bound by the terms of this Agreement.
4. NOTICES. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or delivered against receipt to the party to whom it
is to be given at the address of such party set forth below (or to such other
address as the party shall have furnished in writing in accordance with the
provisions of this Section 4):
<TABLE>
<S> <C>
Mr. Harris: 10800 Biscayne Boulevard, Penthouse
Miami, Florida 33161
with a copy (which copy shall not constitute notice) to:
Donald J. Bezahler, Esq.
Baer Marks & Upham LLP
805 Third Avenue, 20th Floor
New York, New York 10022-7513
Mr. Odzer: 1399 Northeast 103rd Street
Miami Shores, Florida 33138
with a copy (which copy shall not constitute notice) to:
Thomas R. McGuigan, P.A.
Steel Hector & Davis
200 South Biscayne Blvd., 40th Floor
Miami, Florida 33131-2398
The Company: 10800 Biscayne Boulevard, 10th Floor
Miami, Florida 33161
with a copy (which copy shall not constitute notice) to:
Donald J. Bezahler, Esq.
Baer Marks & Upham LLP
805 Third Avenue, 20th Floor
New York, New York 10022-7513
</TABLE>
3
<PAGE>
Notice to the estate of any party shall be sufficient if addressed to the
party as provided in this Section 4. Any notice or other communication given by
certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party's address which shall be deemed given at
the time of receipt thereof.
5. MISCELLANEOUS. (a) This Agreement may be amended at any time and from
time to time by unanimous written agreement of the Shareholders.
(b) This Agreement and the rights of the parties hereunder shall be governed
by, and construed in accordance with, the laws of the state of Florida, without
giving effect to rules governing conflicts of law.
(c) This Agreement and the rights and obligations hereunder, may not be
assigned and any such assignment shall be void and null. Except as otherwise
specifically provided herein, this Agreement shall be binding upon and inure to
the benefit of the parties and their legal representatives, heirs,
administrators, executors, and successors.
(d) Captions and section headings contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit, or extend the scope
or intent of this Agreement or any provision hereof.
(e) If any provision of this Agreement or the application of any provision
to any person or circumstance shall be held invalid, the remainder of this
Agreement, or the application of that provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
(f) This Agreement may be executed in several counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
instrument.
(g) Except as otherwise set forth in this Agreement, including in Section
3(d) hereof, the provisions of this Agreement shall remain in effect for six (6)
years after Odzer last serves as a director, officer, agent or employee of the
Company, or at the request of the Company, serves as a director, officer,
trustee, partner, agent or employee of another corporation, partnership, joint
venture, trust or other enterprise.
6. ARBITRATION. (a) Any dispute or controversy arising out of or relating
to this Agreement, any document or instrument delivered pursuant to, in
connection with, or simultaneously with this Agreement, or any breach of this
Agreement or any such document or instrument shall be settled by arbitration to
be held in the County of Dade, State of Florida in accordance with the
Commercial Arbitration Rules then in effect of the American Arbitration
Association or any successor thereto, and judgment upon the award rendered by
the Arbitrator(s) may be entered in any Court having jurisdiction thereof. The
Arbitrator(s) may grant injunctions or other relief in such dispute or
controversy. The costs and expenses of such arbitration shall be assumed as
determined by the Arbitrator(s), and each party shall separately pay his own
attorneys' fees and expenses.
(b) Section 6 shall remain in effect for at least six (6) years after Odzer
last serves as a director, officer, agent or employee of the Company, or at the
request of the Company, serves as a director, officer, trustee, partner, agent
or employee of another corporation, partnership, joint venture, trust or other
enterprise.
(c) Notwithstanding anything contained herein to the contrary, any dispute
or controversy arising out of or relating to this Agreement with respect to
federal securities laws shall not be subject to arbitration as provided by this
Section 6.
4
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
11th day of February, 1997.
<TABLE>
<S> <C> <C> <C>
/s/ HOWARD ODZER
-------------------------------------------------
Howard Odzer
/s/ MEL HARRIS
-------------------------------------------------
Mel Harris
PREFERRED EMPLOYERS HOLDINGS, INC.
By: /s/ MEL HARRIS
--------------------------------------
Name: Mel Harris
Title: Chairman of the Board and
Chief Executive Officer
</TABLE>
5
<PAGE>
EXHIBIT 3
IRREVOCABLE PROXY
The undersigned, being the holder of sixty-three (63) shares of capital
stock of Preferred Employers Group, Inc. (the "Company") does hereby constitute
and appoint Mel Harris, the true and lawful attorney and proxy for the
undersigned, and in his name, place and stead, with full power of substitution,
for so long as the Amended and Restated Shareholders Agreement, dated as of May
15, 1995 by and among Mel Harris, Howard Odzer and the Company (the "Amended
Shareholders Agreement") or so long as the agreement referred to in Section
17(b)(i) thereof shall be in effect, to vote as the proxy of the undersigned all
shares owned, held by or registered in the name of the undersigned in the
Company (the "Shares") at any and all meetings, regular and special, of the
shareholders of the Company, or any adjournments thereof, which may be held
during such period, giving and granting to such attorney and proxy all the
powers that the undersigned would possess if personally present, and to execute
written consents as the attorney and proxy for the undersigned as a shareholder
of the Company, and to waive notice of and to consent to the holdings of
meetings of shareholders, and in general to exercise all rights of the
undersigned to vote or consent as a shareholder of the Company. This Proxy
shall also apply to and govern the voting of all shares and other securities of
the Company or other corporations which may hereafter be issued to the
undersigned by reason of his holding shares of capital stock of the Company.
This Proxy is issued in consideration of the execution of the Amended
Shareholders Agreement. The undersigned hereby affirms that this Proxy is given
in connection with such agreement and that the proxy provided for herein is
coupled with an interest and is irrevocable, to the fullest extent permitted by
law. The undersigned hereby ratifies and confirms all that the proxy may
lawfully do or cause to be done by virtue hereof. This Proxy revokes any other
proxy granted by the undersigned at any time with respect to such shares.
Notwithstanding anything herein set forth, this Proxy shall
automatically be revoked with respect to Shares sold by the undersigned in
compliance with the provisions of the Amended Shareholders Agreement, a copy of
which is on file with the Company.
IN WITNESS WHEREOF, the undersigned has set his hand as of this 15th
day of May 1995.
/s/ Howard Odzer
--------------------------------------
Howard Odzer
Witness:
/s/ Nancy Ryan
<PAGE>
EXHIBIT 4
IRREVOCABLE PROXY
The undersigned, being the holder of seven (7) shares of capital stock of
Preferred Employers Group, Inc. (the "Company") does hereby constitute and
appoint Mel Harris, the true and lawful attorney and proxy for the undersigned,
and in his name, place and stead, with full power of substitution, for so long
as the Amended and Restated Shareholders Agreement, dated as of May 15, 1995 by
and among Mel Harris, Howard Odzer and the Company (the "Amended Shareholders
Agreement") or so long as the agreement referred to in Section 17(b)(i) thereof
shall be in effect, to vote as the proxy of the undersigned all shares owned,
held by or registered in the name of the undersigned in the Company (the
"Shares") at any and all meetings, regular and special, of the shareholders of
the Company, or any adjournments thereof, which may be held during such period,
giving and granting to such attorney and proxy all the powers that the
undersigned would possess if personally present, and to execute written consents
as the attorney and proxy for the undersigned as a shareholder of the Company,
and to waive notice of and to consent to the holdings of meetings of
shareholders, and in general to exercise all rights of the undersigned to vote
or consent as a shareholder of the Company. This Proxy shall also apply to and
govern the voting of all shares and other securities of the Company or other
corporations which may hereafter be issued to the undersigned by reason of his
holding shares of capital stock of the Company. This Proxy is issued in
consideration of the execution of the Amended Shareholders Agreement. The
undersigned hereby affirms that this Proxy is given in connection with such
agreement and that the proxy provided for herein is coupled with an interest and
is irrevocable, to the fullest extent permitted by law. The undersigned hereby
ratifies and confirms all that the proxy may lawfully do or cause to be done by
virtue hereof. This Proxy revokes any other proxy granted by the undersigned at
any time with respect to such shares.
Notwithstanding anything herein set forth, this Proxy shall
automatically be revoked with respect to Shares sold by the undersigned in
compliance with the provisions of the Amended Shareholders Agreement, a copy of
which is on file with the Company.
IN WITNESS WHEREOF, the undersigned has set his hand as of this 15th
day of May 1995.
/s/ Ronald Rothstein
-------------------------------------
Ronald Rothstein
Witness:
/s/
- -----------------------------
<PAGE>
EXHIBIT 5
SHARE ESCROW AGREEMENT
This SHARE ESCROW AGREEMENT, dated as of February 5, 1997 (the
"Agreement"), is entered into by and among PREFERRED EMPLOYERS HOLDINGS, INC., a
Delaware corporation (the "Company"), HOWARD ODZER ("Odzer") and Baer Marks &
Upham LLP, a New York limited liability partnership, as Escrow Agent (the
"Escrow Agent").
W I T N E S S E T H:
WHEREAS, Odzer is the beneficial owner of 1,111,765 shares of Common Stock,
par value $.01 per share, of the Company ("Common Stock"); and
WHEREAS, Odzer agrees to place 300,000 shares of Common Stock (the
"Shares") in escrow with the Escrow Agent for issuance upon the exercise of
certain stock options which will be granted by him pursuant to the terms and
subject to the conditions hereof (the "Stock Options") to certain executives and
officers of the Company as designated by the Compensation Committee (the
"Committee") of the Board of Directors of the Company.
NOW, THEREFORE, in consideration of the foregoing and of the covenants and
agreements contained herein, the parties hereto, intending legally to be bound,
agree as follows:
1. ESCROW OF SHARES. (a) Concurrently with the execution and delivery
hereof, Odzer shall deliver to the Escrow Agent certificates representing the
Shares, duly endorsed for transfer (the "Certificates"), to be held for so
long as any Stock Options remain outstanding and such Certificates shall be
retained in escrow pursuant to the terms and subject to the conditions
hereof.
(b) The Escrow Agent agrees to hold the Shares in accordance with the terms
and conditions of this Agreement and for the uses and purposes stated herein.
(c) Odzer and the Company shall deliver to the Escrow Agent the Form of
Stock Option Agreement, attached hereto as ANNEX A (the "Form Option
Agreement"), to be retained in escrow in accordance with the terms and
conditions of this Agreement and for the uses and purposes stated herein.
(d) It is understood and agreed that the Escrow Agent's sole duties
hereunder are as indicated herein and that the Escrow Agent in the performance
of its duties hereunder shall incur no liability except for willful malfeasance
and shall not be liable or responsible for anything done or omitted to be done
in good faith as herein provided. The Company agrees to indemnify and
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<PAGE>
save the Escrow Agent harmless from any claims, liabilities, judgments,
attorneys' fees and other expenses of every kind and nature, which may be
incurred by the Escrow Agent by reason of its acceptance of, and its performance
under, this Agreement, except such as may arise because of the Escrow Agent's
willful misconduct in performing the specified duties as Escrow Agent. The
parties hereby agree that in no event shall any claim be made with respect to
any conflict of interest in connection with Baer Marks & Upham LLP's acting in
its capacity of Escrow Agent and counsel to the Company. All reasonable
expenses of the Escrow Agent incurred in connection with the exercise of its
duties hereunder shall be borne by the Company.
(e) The Escrow Agent may resign at any time upon giving the parties hereto
thirty (30) days' prior written notice; in such event, the successor Escrow
Agent shall be such person, firm or corporation as shall be selected by the
Company and approved by Odzer in his reasonable discretion. It is understood
and agreed that such resignation shall not be effective until a successor agrees
to act hereunder.
(f) Upon the receipt of a notice and a certified or bank cashier's check
for an amount equal to the full purchase price for the Shares from an optionee
of the exercise of any Stock Option pursuant to Section 3(b) of such optionee's
respective Option Agreement (as defined hereinafter), the Company shall promptly
give written notice thereof to the Escrow Agent and the Escrow Agent shall,
within 10 business days of its receipt of such notice, release and deliver to
the Company Certificates representing such number of Shares as shall be set
forth in such notice against payment by the Company to Odzer for the Shares.
2. TERMS OF STOCK OPTIONS. (a) Odzer hereby agrees that he shall grant
Stock Options to purchase all of the Shares upon the direction of, and to those
executives and officers of the Company designated by, the Committee in
accordance with the terms and subject to the conditions of this Agreement.
(b) In no event shall the exercise price of any Stock Option granted
pursuant to this Agreement be less than $7.25, the initial public offering price
of the Common Stock on a per share basis).
(c) The exercise of the Stock Options must occur, if at all, prior to
February 5, 2002 (the "Expiration Date"). Odzer shall receive all proceeds
received from the exercise of any Stock Options.
(d) Upon the Expiration Date, the balance of the Shares held in escrow
pursuant to the terms of this Agreement, shall revert back and be delivered by
the Escrow Agent to Odzer and such Shares shall no longer be subject to the
provisions hereof.
(e) The terms and conditions of the Stock Options shall be more fully set
forth in each of the respective option agreements which shall be executed and
delivered by Odzer and each optionee in substantially the form of the Form
Option Agreement (the "Option Agreements").
-2-
<PAGE>
3. ADMINISTRATION. (a) Odzer hereby appoints each of the Committee
and the Board of Directors as his attorney-in-fact with the power to designate
the executives and officers of the Company to whom Stock Options shall be
granted by Odzer.
(b) The administration of this Agreement and the Stock Options to be
granted pursuant to the terms hereof, shall be the sole responsibility of the
Committee, whose construction and interpretation of the terms and provisions
hereof and thereof shall be final and conclusive; PROVIDED, HOWEVER, that the
Committee shall not be entitled to make a unilateral construction or
interpretation of any term or provision of this Agreement which adversely
affects the rights and obligations to which Odzer is entitled or subject
pursuant to the terms hereof without the consent of Odzer which consent shall
not be unreasonably withheld. The Committee shall in its sole discretion
designate the executives and officers to whom the Stock Options shall be granted
by Odzer and shall oversee the issuance of the Shares upon exercise of such
Stock Options as provided herein. The Committee shall have authority, subject
to the express provisions hereof, to construe this Agreement and the respective
Option Agreements, to be executed and delivered pursuant to the terms hereof to
prescribe, amend and rescind rules and regulations relating to this Agreement
and the issuance of the Shares upon exercise of such Stock Options as provided
herein; to determine the terms and provisions of the respective Option
Agreements to be executed and delivered pursuant to the terms hereof, which need
not be identical but which in all cases shall be consistent with the terms of
this Agreement and the Form Option Agreement; and to make all other
determinations in the judgment of the Committee necessary or desirable for the
administration of the provisions hereof; PROVIDED, HOWEVER, that the Committee
shall not be entitled to make a unilateral construction or interpretation of any
term or provision of this Agreement which adversely affects the rights and
obligations to which Odzer is entitled or subject pursuant to the terms hereof
without the consent of Odzer which consent shall not be unreasonably withheld.
The Committee may correct any defect or supply any omission or reconcile any
inconsistency contained herein and in the respective Option Agreements to be
executed and delivered pursuant to the terms hereof, in the manner and to the
extent it shall deem expedient to carry out the purposes and intent of this
Agreement and it shall be the sole and final judge of such expediency; provided,
however, the Committee shall not be entitled to make any correction, change or
determination which adversely affects the rights and obligations to which Odzer
is entitled or subject, without the consent of Howard Odzer, which consent shall
be not unreasonably withheld. No director or person acting pursuant to
authority delegated by the Board of Directors or the Committee shall be liable
for any action or determination under this Agreement made in good faith and
consistent with the express terms of this Agreement.
4. FURTHER ASSURANCES. Odzer shall do, execute, acknowledge and deliver
all and every such further acts, deeds, conveyances, certificates, notices,
transfers and assurances as the Escrow Agent or the Company may reasonably
require in order to effect the purposes and intention of, or facilitate the
performance of the terms and conditions contained in, this Agreement, or to
enable the Company or any grantee of a Stock Option to comply with any
applicable federal or state law, provided, however, that any such further action
which Odzer may
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<PAGE>
be requested to undertake will be without cost or expense to Odzer and shall not
adversely affect the rights and obligations to which Odzer is entitled or
subject.
5. NOTICES. All notices, claims, certificates, requests, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given or made as of the date delivered, mailed or transmitted, and
shall be effective upon receipt, if delivered personally, mailed by registered
or certified mail (postage prepaid, return receipt requested) to the parties at
the following addresses or sent by electronic transmission to the telecopier
number specified below:
(a) If to Odzer, to:
Howard Odzer
c/o Preferred Employers Holdings, Inc.
10800 Biscayne Blvd., Penthouse
Miami, FL 33161
Telephone: (305) 893-4040
Telecopy: (305)
with copies to:
Steel Hector & Davis LLP
200 South Biscayne Blvd.
Miami, FL 33131
Attn: Thomas R. McGuigan, P.A.
Telephone: (305) 577-2850
Telecopy: (305) 577-7001
(b) If to the Company, to:
Preferred Employers Holdings, Inc.
10800 Biscayne Blvd., Penthouse
Miami, FL 33161
Attn: Mel Harris
Telephone: (305) 893-4040
Telecopy: (305)
with copies to:
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
Attn: Donald J. Bezahler, Esq.
-4-
<PAGE>
Telephone: (212) 702-5700
Telecopy: (212) 702-5941
(c) If to Escrow Agent, to:
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
Attn: Donald J. Bezahler, Esq.
Telephone: (212) 702-5700
Telecopy: (212) 702-5941
or to such other address as the person to whom the notice is to be given may
have previously furnished to the other in writing in the manner set forth above.
6. BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Except as otherwise provided herein, this Agreement shall not be
assignable by the Escrow Agent without the prior written consent of the other
parties and shall not be assignable by either the Company or Odzer without the
consent of the other.
7. ENTIRE AGREEMENT; AMENDMENT. This Agreement contains all the terms
agreed upon by the parties, and supersede any prior agreements, with respect to
the subject matter hereof. This Agreement may be amended only by a written
instrument signed by the parties against which enforcement of any waiver,
change, modification, extension or discharge is sought.
8. ATTORNEYS' FEES. If any action, suit or proceeding is brought by any
of the parties hereto arising out of or relating to this Agreement or its
breach, the successful or prevailing party in any such action, suit or
proceeding, shall be entitled to the full amount of its reasonable expenses,
including all court costs and attorneys' fees paid or incurred in connection
therewith, in addition to such other relief as such party shall be entitled to.
9. INTERPRETATION. The articles and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement.
-5-
<PAGE>
10. GOVERNING LAW. This Agreement and the legal relations of the parties
hereto shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to any conflict or choice of law.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the 5th day of February,
1997.
PREFERRED EMPLOYERS HOLDINGS, INC.
By: /s/ Mel Harris
----------------------------------
Name:
Title:
/s/ Howard Odzer
-------------------------------------
HOWARD ODZER
BAER MARKS & UPHAM LLP, AS ESCROW AGENT
/s/ Baer Marks & Upham LLP
-------------------------------------
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<PAGE>
ANNEX A
Optionee:_____________________
Address:______________________
PREFERRED EMPLOYERS HOLDINGS, INC.
FORM OF STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT, dated as of ___________, 19__ (the
"Agreement"), by and among PREFERRED EMPLOYERS HOLDINGS, INC., a Delaware
corporation (the "Company"), ________________ ("Optionee") and HOWARD ODZER
("Grantor"), is entered into pursuant to the Share Escrow Agreement, dated as of
November ___, 1996, by and among the Company, Grantor and Baer Marks & Upham
LLP, a New York limited liability partnership, as Escrow Agent (the "Escrow
Agreement").
PURSUANT TO THE ESCROW AGREEMENT, it is agreed as follows:
1. GRANT OF OPTION. Grantor hereby grants to the Optionee on the date
hereof the right and option (the "Option") to purchase an aggregate of ______
shares of Common Stock, $.01 par value per share, of the Company (the "Shares"),
which are currently held in escrow by the Company on behalf of Grantor pursuant
to the terms of the Escrow Agreement.
2. PAYMENT; TERM. (a) The exercise price of the Option is $______ per
Share which shall be paid in cash or by certified or bank cashier's check
payable to the order of the Grantor at the time of exercise. Payment in full
shall be required before the issuance of any Shares pursuant to this Option. In
addition, before or concurrently with delivery to the Optionee of a Certificate
representing such Shares, the Optionee shall pay to the Company any amount
necessary to satisfy applicable federal, state, or local tax requirements.
(b) The Option granted herein shall expire on ________ __, 2001. [the
fifth anniversary of the date of the prospectus filed with the Securities and
Exchange Commission on behalf of the Company in connection with the Company's
initial public offering].
3. EXERCISE OF OPTION. (a) Subject to Section 2(b) above, the Optionee
may exercise, on a cumulative basis, the Option granted hereby in accordance
with the following:
(i) on or after the date hereof, up to ___% (ignoring fractional
Shares) of the total number of Shares subject to this Option;
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<PAGE>
(ii) on or after the date which is one year after the date hereof,
up to ___% (ignoring fractional Shares) of the total number of Shares
subject to this Option;
(iii) on or after the date which is two years after the date of the
grant, up to ___% (ignoring fractional Shares) of the total number of
Shares subject to this Option; and
(iv) on or after the date which is three years after the date of the
grant, the remaining Shares subject to this Option.
(b) The Optionee may exercise the Option (to the extent it is then
exercisable) by delivering to the Company a written notice duly signed by the
Optionee stating the number of Shares that the Optionee has elected to purchase
and accompanied by payment (by certified check or bank cashier's check) of an
amount equal to the full purchase price for the Shares to be purchased. Within
twenty days after receipt by the Company of such notice and payment, the Company
shall (subject to Section 12 of this Agreement) issue from escrow the Shares in
the name of the Optionee or assignee and deliver the certificate therefor to the
Optionee. No Shares shall be issued until full payment therefor has been made.
4. NON-TRANSFERABILITY OF OPTION; RESTRICTIONS ON EXERCISE. (a) The
Option may be transferred only by will or the laws of descent and distribution,
and the Option may be exercised during the Optionee's lifetime only by the
Optionee or by the Optionee's legal representative.
(b) If at any time during which the Option can be exercised, exercise of
the Option will constitute a sale of any of the Shares by the Grantor which is
subject to the short-swing trading provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended, the Optionee agrees not to exercise, in whole
or in part, the Option until such time as the Grantor will not be required to
make any payment pursuant to Section 16(b) or the rules promulgated thereunder
by the Securities and Exchange Commission. To this end, the Optionee agrees
that the Grantor may, at his sole election, delay the closing of any requested
exercise under Section 3 to avoid the risk of such short-swing trading
liability, based upon any transaction, or planned transactions, by the Grantor.
5. TAX STATUS. It is not intended that this option qualify as an
incentive stock option within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended. In addition, the Optionee hereby agrees that
no representation has been made to him by the Company or the Grantor with
respect to the tax consequences of (i) the Option granted hereby, (ii) any
transfer of the Option granted hereby, (iii) the exercise of the Option granted
hereby or (iv) any transfer of the Shares.
6. RIGHTS IN THE EVENT OF THE OPTIONEE'S DISABILITY. If the Optionee's
employment with the Company or any parent or subsidiary corporation (within the
meaning of
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<PAGE>
Section 424(e) and (f) of the Internal Revenue Code of 1986, as amended (the
"CODE"), ("AFFILIATES")) is terminated on account of permanent and total
disability (as defined in Code Section 22(e)(3)), the Optionee or the Optionee's
legal representative (or the Optionee's estate if the Optionee dies after
termination of employment) may exercise the Option, to the extent exercisable on
the date of the Optionee's termination of employment, at any time within one
year after termination of employment but in no event after the expiration of the
term of the Option as provided in Sections 2(b). The Optionee's "ESTATE" means
the Optionee's legal representative or any person who acquires the right to
exercise the Option by reason of the Optionee's death.
7. RIGHTS IN THE EVENT OF THE OPTIONEE'S DEATH. If the Optionee dies
while an employee of the Company or any Affiliate (or within three months after
the Optionee ceases to be such an employee) but while he still has the right to
exercise this Option, his estate may exercise the Option, to the extent
exercisable at the date of the Optionee's death, any time within one year after
the Optionee's death, but in no event after the expiration of the term of the
Option as provided in Section 2(b).
8. RIGHTS IN THE EVENT OF TERMINATION OF EMPLOYMENT. If Optionee's
employment with the Company or any Affiliate is terminated involuntarily for
"CAUSE" the Optionee's Option shall expire as of the date of termination of
employment. "Cause" under this Agreement shall mean (i) material misconduct by
the Optionee, (ii) any act by the Optionee that is materially adverse to the
Company or any Affiliate, or (iii) breach by the Optionee of any employment or
confidentiality or nondisclosure agreement with the Company or any Affiliate.
"Cause" also shall have the meaning given to that term, or any similar term,
under any employment agreement with the Company or any Affiliate. If the
Optionee's employment is terminated for any reason other than death, disability,
or as described in the preceding sentences of this Section, the Optionee (or the
Optionee's estate, if the Optionee dies after the termination) may exercise the
Option, to the extent exercisable before the termination, within three months
after the termination, but in no event after the expiration of the term of the
Option as provided in Section 2(b).
9. ADJUSTMENT IN THE SHARES. If the Shares, as presently constituted,
shall be changed into or exchanged for a different number or kind of shares or
other securities of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, split, reverse split,
combination of shares, or otherwise) or if the number of Shares shall be
increased through the payment of a share dividend, the Optionee shall receive
upon exercise of the Option the number and kind of shares or other securities
into which each outstanding Share shall be so changed, or for which each such
Share shall be exchanged, or to which each such Share shall be entitled, as the
case may be. The exercise price and other terms of the Option shall be
appropriately amended to reflect the foregoing events. If there shall be any
other change in the number or kind of the outstanding Shares, or of any shares
or other securities into which the Shares shall have been changed, or for which
the Shares shall have been exchanged, then, if the Board of Directors (or the
Compensation Committee thereof (the "Compensation Committee")) shall, in its
sole discretion, determine that such change equitably requires an adjustment in
the Option, such adjustment shall be made in accordance with that
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determination; provided, however, that, without the consent of Odzer, which
consent will not be unreasonably withheld, no adjustment, modification or other
change made pursuant to this Section 9 shall be inconsistent with the intent of
the Escrow Agreement or have an adverse effect on Odzer. Notice of any
adjustment shall be given by the Company to the Optionee.
10. NO LIMITATION ON RIGHTS OF THE COMPANY. The grant of this Option
shall not in any way affect the right or power of the Company to make
adjustments, reclassifications, or changes in its capital or business structure
or to merge, consolidate, dissolve, liquidate, sell, or transfer all or any part
of its business or assets.
11. RIGHTS AS A SHAREHOLDER. The Optionee shall have the rights of a
shareholder with respect to the Shares covered by the Option only upon becoming
the holder of record of those Shares. Until the Optionee becomes the holder of
record of his respective Shares, Odzer shall retain all rights as a shareholder
with respect to such Shares, including, but not limited to, the right to receive
any dividends and other distributions with respect to the Shares, and to vote
such Shares for all purposes and all permissible methods, and nothing herein
shall be deemed or construed to limit such rights.
12. COMPLIANCE WITH APPLICABLE LAW. Notwithstanding anything herein to
the contrary, neither the Company nor the Grantor shall be obligated to cause to
be issued or delivered from escrow any certificates for Shares pursuant to the
exercise of the Option, unless and until the Company is advised by its counsel
that the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authority, and the requirements of
any exchange upon which Shares are traded. Neither the Company nor the Grantor
shall in any event be obligated to register any securities pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended) or to take any
other action in order to cause the issuance and delivery of such certificates to
comply with any such law, regulation or requirement. The Board of Directors (or
the Compensation Committee) may require, as a condition of the issuance and
delivery of such certificates and in order to ensure compliance with such laws,
regulations, and requirements, that the Optionee make such covenants,
agreements, and representations as the Board of Directors (or the Compensation
Committee, as the case may be), in its sole discretion, considers necessary or
desirable.
13. NO OBLIGATION TO EXERCISE OPTION. The granting of the Option shall
impose no obligation upon the Optionee to exercise the Option.
14. AGREEMENT NOT A CONTRACT OF EMPLOYMENT. This Agreement is not a
contract of employment, and the terms of employment of the Optionee or the
relationship of the Optionee with the Company or any Affiliate shall not be
affected in any way by this Agreement except as specifically provided herein.
The execution of this Agreement shall not be construed as conferring any legal
rights upon the Optionee for a continuation of employment or relationship with
the Company, the Grantor or any Affiliate, nor shall it interfere with the right
of the Company or any subsidiary thereof to discharge the Optionee and to treat
him without regard to the effect which that treatment might have upon him as a
Optionee.
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15. WITHHOLDING. Whenever Shares are to be delivered upon exercise of
this Agreement, the Company shall be entitled to require as a condition of
delivery that the Optionee remit to the Company an amount sufficient to satisfy
the Company's federal, state and local withholding tax obligations with respect
to the exercise of the Option granted hereby.
16. NOTICES. All notices, claims, certificates, requests, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given or made as of the date delivered, mailed or transmitted, and
shall be effective upon receipt, if delivered personally, mailed by registered
or certified mail (postage prepaid, return receipt requested) to the parties at
the following addresses or sent by electronic transmission to the telecopier
number specified below:
(a) If to Grantor, to:
Howard Odzer
c/o Preferred Employers Holdings, Inc.
10800 Biscayne Blvd., Penthouse
Miami, FL 33161
Telephone: (305) 893-4040
Telecopy: (305)
with copies to:
Steel Hector & Davis LLP
200 South Biscayne Blvd.
Miami, FL 33131
Attn: Thomas R. McGuigan P.A.
Telephone: (305) 577-2850
Telecopy: (305) 577-7001
(b) If to the Company, to:
Preferred Employers Holdings, Inc.
10800 Biscayne Blvd., Penthouse
Miami, FL 33161
Telephone: (305) 893-4040
Telecopy: (305)
with copies to:
Baer Marks & Upham LLP
805 Third Avenue
New York, NY 10022
Attn: Donald J. Bezahler, Esq.
Telephone: (212) 702-5700
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Telecopy: (212) 702-5941
(c) If to Optionee, to address set forth above.
17. GOVERNING LAW. Except to the extent preempted by Federal law, this
Agreement shall be construed and enforced in accordance with, and governed by,
Delaware law.
18. RECEIPT OF ESCROW AGREEMENT. Optionee acknowledges receipt of a copy
of the Escrow Agreement, and represents that he is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all the terms and
provisions of this Option and of the Escrow Agreement. Optionee hereby agrees
to accept as binding, conclusive and final all decisions or interpretations of
the Board of Directors of the Company or the Compensation Committee, upon any
questions rising under the Escrow Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
PREFERRED EMPLOYERS
HOLDINGS, INC.
__________________________ By:___________________________
Witness Its:
__________________________ _______________________________
Witness HOWARD ODZER, Grantor
__________________________ _______________________________
Witness , Optionee
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EXHIBIT 6
PREFERRED EMPLOYERS HOLDINGS, INC.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "AGREEMENT"), dated as of August 20, 1997,
between PREFERRED EMPLOYERS HOLDINGS, INC., a Delaware corporation (the
"COMPANY"), having an address at 10800 Biscayne Boulevard, Penthouse, Miami,
Florida 33161 and Mel Harris, having an address at 5980 N. Bay Road, Miami, FL
33140 (the "GRANTEE").
In accordance with the Preferred Employers Holdings, Inc. 1996 Stock Option
Plan (the "PLAN"), the Company hereby grants to the Grantee an incentive stock
option (the "OPTION") to purchase all or any part of an aggregate of 275,000
shares of the Company's common shares, $.01 par value per share (the "SHARES").
To evidence the Option and to set forth its terms, the Company and the
Grantee agree as follows:
1. CONFIRMATION OF GRANT. The Company hereby evidences and confirms its
grant of the Option to the Grantee on the date of this Agreement.
2. NUMBER OF SHARES. This Option shall be for an aggregate of 275,000
Shares.
3. EXERCISE PRICE. The exercise price shall be $7 3/4 per share for a
total of $2,131,250.
4. MEDIUM AND TIME OF PAYMENT. The exercise price of the Option shall be
paid in cash or by certified or bank cashiers check payable to the order of the
Company at the time of exercise. In addition, the Company shall accept full or
partial payment in Shares having a fair market value on the date of exercise
equal to the portion of the exercise price being so paid.
Payment in full shall be required before the issuance of any Shares
pursuant to this Option. In addition, before or concurrently with delivery to
the Grantee of a Certificate representing such Shares, the Grantee shall pay any
amount necessary to satisfy applicable federal, state, or local tax
requirements.
5. TERM AND EXERCISE OF THE OPTION. The Option shall expire seven years
from the date of this Agreement and may be exercised at the times and for the
number of Shares as follows:
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(a) on or after the date which is one year after the date hereof, up
to 20% (ignoring fractional shares) of the total number of Shares subject to
this Option;
(b) on or after the date which is two years after the date hereof, up
to 20% (ignoring fractional Shares) of the total number of Shares subject to
this Option;
(c) on or after the date which is three years after the date hereof,
up to 20% (ignoring fractional Shares) of the total number of Shares subject to
this Option;
(d) on or after the date which is four years after the date hereof,
up to 20% (ignoring fractional Shares) of the total number of Shares subject to
this Option; and
(e) on or after the date which is five years after the date hereof,
the remaining Shares subject to this Option; provided that the Option may be
exercised for such remaining Shares within 90 days after such date.
This Option may be exercised only by written notice to the Company
indicating the number of Shares which are being purchased. Such notice must be
signed by the Grantee and be accompanied by full payment of the exercise price.
6. NONTRANSFERABILITY. The Option may be transferred only by will or the
laws of descent and distribution, and the Option may be exercised during the
Grantee's lifetime only by the Grantee or by the Grantee's legal representative.
7. RIGHTS IN THE EVENT OF THE GRANTEE'S DISABILITY. If the Grantee's
employment with the Company or any parent or subsidiary corporation (within the
meaning of Section 424(e) and (f) of the Internal Revenue Code of 1986, as
amended (the "CODE"), ("AFFILIATES")) is terminated on account of permanent and
total disability (as defined in Code Section 22(e)(3)), the Grantee or the
Grantee's legal representative (or the Grantee's estate if the Grantee dies
after termination of employment) may exercise the Option, to the extent
exercisable on the date of the Grantee's termination of employment, at any time
within one year after termination of employment but in no event after the
expiration of the term of the Option. The Grantee's "ESTATE" means the
Grantee's legal representative or any person who acquires the right to exercise
the Option by reason of the Grantee's death.
8. RIGHTS IN THE EVENT OF THE GRANTEE'S DEATH. If the Grantee dies while
an employee of the Company or any Affiliate (or within three months after the
Grantee ceases to be such an employee) but while he still has the right to
exercise this Option, his estate may exercise the Option, to the extent
exercisable at the date of the Grantee's death, any time within one year after
the Grantee's death, but in no event after the expiration of the term of the
Option.
9. RIGHTS IN THE EVENT OF TERMINATION OF EMPLOYMENT. If Grantee's
employment with the Company or any Affiliate is terminated involuntarily for
"CAUSE" the Grantee's Option shall expire as of the date of termination of
employment. "Cause" under this
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Agreement shall mean (i) if Grantee has persistently and wilfully failed to
devote substantially all of his working time to the operations of the Company,
after specific notice to Grantee of such alleged failure and a 20 day
opportunity to cure, (ii) if Grantee has been convicted of (whether or not
subject to appeal) or plead "nolo contendere" or has made any similar plea to
any criminal offense involving a violation of federal or state securities laws
or regulations, embezzlement, fraud, wrongful taking or misappropriation of
property, theft, or any other crime involving dishonesty, (iii) if Grantee has
violated or materially breached any material provision of his Employment
Agreement with the Company, after specific notice to Grantee of such alleged
violation or breach and a 20 day opportunity to cure, (iv) if Grantee takes any
action which directly or indirectly causes the Company or any of its
subsidiaries to have any license, permit or other authorization necessary for
the operations of its business (a "License") to be suspended or revoked, (v) if
the Company receives any notice from any governmental or other agency which
regulates the operations of the Company or its subsidiaries which indicates that
Grantee's employment with the Company could have an adverse effect on the
ability of the Company or its subsidiaries to retain or obtain any License or to
otherwise conduct its operations in the manner then conducted, or (vi) failure
of Grantee to comply with the terms of the business plan to be annexed hereto as
Exhibit A. If the Grantee's employment is terminated for any reason other than
death, disability, or as described in the preceding sentences of this Section,
the Grantee (or the Grantee's estate, if the Grantee dies after the termination)
may exercise the Option, to the extent exercisable before the termination,
within three months after the termination, but in no event after the expiration
of the term of the Option.
10. ADJUSTMENT IN THE SHARES. If the Shares, as presently constituted,
shall be changed into or exchanged for a different number or kind of shares or
other securities of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, split, reverse split,
combination of shares, or otherwise) or if the number of Shares shall be
increased through the payment of a share dividend, the Grantee shall receive
upon exercise of the Option the number and kind of shares or other securities
into which each outstanding Share shall be so changed, or for which each such
Share shall be exchanged, or to which each such Share shall be entitled, as the
case may be. The exercise price and other terms of the Option shall be
appropriately amended to reflect the foregoing events. If there shall be any
other change in the number or kind of the outstanding Shares, or of any shares
or other securities into which the Shares shall have been changed, or for which
the Shares shall have been exchanged, then, if the Board of Directors shall, in
its sole discretion, determine that such change equitably requires an adjustment
in the Option, such adjustment shall be made in accordance with that
determination. Notice of any adjustment shall be given by the Company to the
Grantee.
11. EFFECT OF TERMINATION OR AMENDMENT OF PLAN. No suspension,
termination, modification, or amendment of the Plan may, without the express
written consent of the Grantee, adversely affect the rights of the Grantee under
this Option.
12. NO LIMITATION ON RIGHTS OF THE COMPANY. The grant of this Option
shall not in any way affect the right or power of the Company to make
adjustments, reclassifications,
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or changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate, sell, or transfer all or any part of its business or
assets.
13. RIGHTS AS A SHAREHOLDER. The Grantee shall have the rights of a
shareholder with respect to the Shares covered by the Option only upon becoming
the holder of record of those Shares.
14. COMPLIANCE WITH APPLICABLE LAW. (a) This Option has not been, and the
Shares issuable upon exercise of this Option will not be, registered under the
Securities Act of 1933, as amended, or any state securities laws, and neither
this Option nor the Shares issuable upon exercise of this Option may be offered,
sold, transferred, pledged or otherwise disposed of except pursuant to an
effective registration statement under such act and such laws, or in accordance
with an exemption from such registration.
(b) Notwithstanding anything herein to the contrary, the Company
shall not be obligated to cause to be issued or delivered any certificates for
Shares pursuant to the exercise of the Option, unless and until the Company is
advised by its counsel that the issuance and delivery of such certificates is in
compliance with all applicable laws, regulations of governmental authority, and
the requirements of any exchange upon which Shares are traded. The Company
shall in no event be obligated to register any securities pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended) or to take any
other action in order to cause the issuance and delivery of such certificates to
comply with any such law, regulation or requirement. The Board of Directors may
require, as a condition of the issuance and delivery of such certificates and in
order to ensure compliance with such laws, regulations, and requirements, that
the Grantee make such covenants, agreements, and representations as the Board of
Directors, in its sole discretion, considers necessary or desirable.
15. NO OBLIGATION TO EXERCISE OPTION. The granting of the Option shall
impose no obligation upon the Grantee to exercise the Option.
16. AGREEMENT NOT A CONTRACT OF EMPLOYMENT. This Agreement is not a
contract of employment, and the terms of employment of the Grantee or the
relationship of the Grantee with the Company or any Affiliate shall not be
affected in any way by this Agreement except as specifically provided herein.
The execution of this Agreement shall not be construed as conferring any legal
rights upon the Grantee for a continuation of employment or relationship with
the Company or any Affiliate, nor shall it interfere with the right of the
Company or any subsidiary thereof to discharge the Grantee and to treat him
without regard to the effect which that treatment might have upon him as a
Grantee.
17. NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally or sent by
certified, registered, or express mail, postage prepaid. Any such notice shall
be deemed given when so delivered personally or, if mailed, four days after the
date of deposit in the United States mails, to each
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party at its address set forth above or to such other address as may be
designated in a notice given in accordance with this Section.
18. GOVERNING LAW. Except to the extent preempted by Federal law, this
Agreement shall be construed and enforced in accordance with, and governed by,
Delaware law.
19. RECEIPT OF PLAN. Grantee acknowledges receipt of a copy of the Plan,
and represents that he is familiar with the terms and provisions thereof, and
hereby accepts this Option subject to all the terms and provisions of this
Option and of the Plan. Grantee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Board of Directors of the
Company or the Committee, as defined in the Plan, upon any questions rising
under the Plan.
IN WITNESS WHEREOF, the Company and the Grantee have duly executed this
Agreement as of the date first written above.
PREFERRED EMPLOYERS
HOLDINGS, INC.
/s/ Nancy Ryan By: /s/ Mel Harris
- ------------------------------ ---------------------------
Witness Its:
/s/ Nancy Ryan /s/ Mel Harris
- ------------------------------ ---------------------------
Witness Mel Harris
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