NATIONAL MEDICAL HEALTH CARD SYSTEMS INC
EX-10.37 STOCK OPTION AGREEMENT DATED MAY 6, 2005
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<TYPE>EX-10.37
<SEQUENCE>16
<FILENAME>g09401exv10w37.htm
<DESCRIPTION>EX-10.37 STOCK OPTION AGREEMENT DATED MAY 6, 2005
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<DIV align="right" style="font-size: 10pt; margin-top: 18pt">EXHIBIT
10.37
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>STOCK
OPTION AGREEMENT</B> made as of <B>May&nbsp;6, 2005</B> between <B>NATIONAL MEDICAL HEALTH CARD
SYSTEMS, INC.</B>, a Delaware corporation (the &#147;Company&#148;),
and <B>Robert Kordella</B> (&#147;Optionee&#148;).
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>WHEREAS</B>, the Optionee is an employee of the Company or a subsidiary thereof;
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>WHEREAS</B>, the Company desires to provide to the Optionee an additional incentive to promote
the success of the Company;
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NOW,
THEREFORE</B>, in consideration of the foregoing, the Company hereby grants to the Optionee (the
&#147;Grant&#148;) the right and option to purchase Common Shares of the Company under and pursuant to the
terms and conditions of the 1999 Stock Option Plan (the &#147;Plan&#148;) and upon and subject to the
following terms and conditions:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<B>
GRANT OF OPTION.</B> The Company hereby grants to the
Optionee the right and option (the &#147;Option&#148;) to purchase
<B>Twenty Thousand (20,000)</B> Common
Shares of the Company (the &#147;Option Shares&#148;) during the following periods:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;All
or any part of <B>Five Thousand (5,000)</B> Common Shares may be purchased during the period
commencing one year from the date hereof and terminating at <B>5:00
P.M. on May&nbsp;2, 2015</B> (the
&#147;Expiration Date&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;All
or any part of <B>Five Thousand (5,000)</B> Common Shares may be purchased during the period
commencing two years from the date hereof and terminating at 5:00 P.M. on the Expiration Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;All
or any part of <B>Five Thousand (5,000)</B> Common Shares may be purchased during the period
commencing three years from the date hereof and terminating at 5:00 P.M. on the Expiration Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;All
or any part of <B>Five Thousand (5,000)</B> Common Shares may be purchased during the period
commencing four years from the date hereof and terminating at 5:00 P.M. on the Expiration Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.
<B>NATURE OF OPTION.</B> Such Options to purchase the Option Shares are intended to meet the
requirements of Section&nbsp;422 of the Internal Revenue Code of 1986, as amended, relating to
&#147;incentive stock options&#148;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.
<B>EXERCISE PRICE.</B> The exercise price of each of the Option Shares shall be <B>Twenty One
Dollars and 70/100 Cents ($21.70)</B> (the &#147;Option Price&#148;). The Company shall pay all original issue
or transfer taxes on the exercise of the Option.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<B>
EXERCISE OF OPTIONS.</B> The Option shall be exercised in accordance with the provisions of
the Plan. As soon as practicable after the receipt of notice of exercise (in the form annexed
hereto as Exhibit&nbsp;A) and payment of the Option Price as provided for in the Plan, the Company
shall tender to the Optionee certificates issued in the Optionee&#146;s name evidencing the
number of Option Shares covered thereby.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <B>TRANSFERABILITY. </B>The Option shall not be transferable other than by will or the
laws of descent and distribution and, during the Optionee&#146;s lifetime, shall not be exercisable
by any person other than the Optionee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <B>INCORPORATION BY REFERENCE. </B>The terms and conditions of the Plan are hereby
incorporated by reference and made a part hereof.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <B>NOTICES. </B>Any notice or other communication given hereunder shall be deemed
sufficient if in writing and hand delivered or sent by registered or certified mail, return receipt
requested, addressed to the Company, 26 Harbor Park Drive, Port Washington, New York 11050,
Attention: Secretary and to the Optionee at the address indicated below. Notices shall be deemed to
have been given on the date of hand delivery or mailing, except notices of change of address, which
shall be deemed to have been given when received.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <B>BINDING EFFECT. </B>This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective legal representatives, successors and assigns.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <B>ENTIRE AGREEMENT. </B>This Agreement, together with the Plan, contains the entire
understanding of the parties hereto with respect to the subject matter hereof and may be modified
only by an instrument executed by the party sought to be charged.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF, </B>the parties have executed this Agreement as of the day and year first
above written.
</DIV>

<DIV align="center">
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.</B></TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By: /s/ Jonathan Friedman</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jonathan Friedman, VP of Legal Affairs</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Robert J. Kordella</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature of Optionee</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Robert J. Kordella</FONT></TD>
</TR>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name of Optionee</TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">145 Stilwell Court</FONT></TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-variant: SMALL-CAPS">Pittsburgh, PA 15228</FONT></TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Address of Optionee</TD>
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT A</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><U>OPTION
EXERCISE FORM</U></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby irrevocably elects to exercise the within Option dated <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to the extent of
purchasing <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Common Shares of National Medical Health Card Systems, Inc. The undersigned hereby makes
a payment of
$<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
in payment therefor.
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name of Optionee</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature of Optionee</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Address of Holder</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
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