PACIFIC HEALTH CARE ORGANIZATION, INC. (OTCMKTS:PFHO) Files An 8-K Unregistered Sales of Equity SecuritiesItem 3.02 – Unregistered Sales of Equity Securities
The information contained in Item 5.02 of this Current Report on Form 8-K is incorporated herein by reference.
Item 5.02—Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On August 17, 2017, the board of directors of Pacific Health Care Organization, Inc. (the (“Company”) granted nonqualified stock options under the Company’s 2002 Stock Option Plan (the “2002 Plan”) and the Company’s 2005 Stock Option Plan (the “2005 Plan”) to purchase an aggregate of 85,000 shares of the Company’s common stock to six employees, including two of the Company’s executive officers. The grants were made to; among other things, incentivize the recipients to continue providing services to the Company. Tom Kubota, the Company’s Chief Executive Officer and Chairman, was granted options to purchase 45,750 common shares under the 2002 Plan and 4,250 common shares under the 2005 Plan. Fred Odaka, the Company’s Chief Financial Officer, was granted options to purchase 11,000 common shares under the Company’s 2005 Plan. The remaining options were granted under the 2005 Plan. As a condition of accepting the option grant, each recipient will be required to execute a Nonqualified Stock Option Agreement (the “NSO Agreement”). The grant to Mr. Kubota under the 2002 Plan was made without registration to Section 4(a)(2) of the Securities Act of 1933, as amended.
Each stock option has an exercise price of $15.00 per share and is exercisable upon vesting for a period of five years from the date of grant, subject to the terms of the NSO Agreement and the respective plan under which the options were granted. The exercise price was approximately 101% of the closing price of the Company’s common stock on the OTCQB on August 17, 2017.
Vesting of the stock options is contingent upon continuous employment, or in the case of a consultant, continuous retention, with the Company or one or more of its subsidiaries until the one-year anniversary of the date of grant, except in the event of death or disability of the option holder. If the option holder's employment with the Company terminates by reason of death or disability prior to vesting, his or her options will continue to vest as provided in the NSO Agreement. There is no acceleration of the exercisability provisions of the options in the event of death or disability of the option holder.
The description of the option awards in this Item 5.02 is qualified in its entirety by reference to the form of the NSO Agreement for the grant under the 2002 Plan and the form of the NSO Agreement for the grants under the 2005 Plan, respectively. Forms of the NSO Agreements for the 2002 Plan and the 2005 Plan, which you should read, are attached to this Current Report on Form 8-K as Exhibits 99.01 and 99.02, respectively, and are incorporated herein by reference.
Item 9.01—Financial Statement and Exhibits
PACIFIC HEALTH CARE ORGANIZATION INC ExhibitEX-99.01 2 ex99-01.htm EX-99.01 Exhibit 99.01 Nonqualified Stock Option Agreement Pursuant to the Pacific Health Care Organization,…To view the full exhibit click here
About PACIFIC HEALTH CARE ORGANIZATION, INC. (OTCMKTS:PFHO)
Pacific Health Care Organization, Inc. is a specialty workers’ compensation managed care company. The Company provides a range of services for self-administered employers, insurers, third party administrators, municipalities and others in the state of California. The Company, through its subsidiaries, provides workers’ compensation cost containment services, including healthcare organizations (HCOs), medical provider networks (MPNs), HCO + MPN, workers’ compensation carve-outs, utilization review (UR), medical bill review (MBR), nurse case management (NCM), network access and claims repricing, lien representation services and Medicare Set Aside (MSA). The HCOs are networks of healthcare professionals specializing in the treatment of workplace injuries and in back-to-work rehabilitation and training. The MPN is a network of healthcare professionals. Through IRC, it seeks to create legal agreements for the implementation of workers’ compensation carve-outs for California employers.
