Exhibit 10.44
IDX SYSTEMS CORPORATION
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STOCK OPTION AGREEMENT
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1. Grant of Option. IDX Systems Corporation, a Vermont corporation (the
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"Company"), hereby grants to [NAME], (the "Optionee"), an option (the "Option"),
pursuant to the Company's 1995 Stock Option Plan (the "Plan"), to purchase an
aggregate of [AMOUNT] shares of Common Stock ("Common Stock") of the Company at
a price of $[PRICE] per share, purchasable as set forth in and subject to the
terms and conditions of this Option and the Plan. Except where the context
otherwise requires, the term "Company" shall include the parent and all present
and future subsidiaries of the Company as defined in Sections 424 (e) and 424
(f) of the Internal revenue Code of 1986, as amended or replaced from time to
time (the "Code").
2. Incentive Stock Option. This Option is not intended to qualify as an
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incentive stock option within the meaning of Section 422 of the Code.
3. Exercise of Option and Provisions for Termination.
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(a) Vesting Schedule. Except as otherwise provided in this Agreement,
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certain portions of the Option shall become exercisable prior to the tenth
anniversary of the date of grant (hereinafter the "Expiration Date") in four
annual installments as set forth in the table below:
Number of Shares as Cumulative Number of Shares
to which Option to which Option
Exercise Period becomes Exercisable becomes Exercisable
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Prior to [DATE], ▇▇▇▇ -▇- -▇-
▇▇ and after [DATE], 2000 [NUMBER] [NUMBER]
On and after [DATE], 2001 [NUMBER] [NUMBER]
On or about [DATE], 2002 [NUMBER] [NUMBER]
On and after [DATE], 2003 [NUMBER] [NUMBER]
The right of exercise shall be cumulative so that if the Option is not exercised
to the maximum extent permissible during any exercise period, it shall be
exercisable, in whole or in part, with respect to all shares not so purchased at
any time prior to the Expiration Date or the earlier termination of this Option.
This Option may not be exercised at any time on or after the Expiration Date.
(b) Exercise Procedure. Subject to the conditions set forth in this
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Agreement, this Option shall be exercised by the Optionee's delivery of written
notice of exercise to the Secretary of the Company, specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 4. Such exercise
shall be effective upon receipt by the Secretary of the Company of such written
notice together with the required payment. The Optionee may purchase less than
the number of shares covered hereby, provided that no partial exercise of this
Option may be for any fractional share or for fewer than ten whole shares.
(c) Continuous Employment Required. Except as otherwise provided in
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this Section 3, this Option may not be exercised unless the Optionee, at the
time he or she exercises this Option, is, and has been at all times since the
date of grant of this Option, an employee of the Company.
(d) Exercise Period Upon Termination of Employment. If the Optionee
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ceases to be employed by the Company for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this Option shall terminate
30 days after such cessation (but in no event after the Expiration Date),
provided that this Option shall be exercisable only to the extent that the
Optionee was entitled to exercise this Option on the date of such cessation.
The Company's obligation to deliver shares upon the exercise of this Option
shall be subject to the satisfaction of all applicable federal, state and local
income and employment tax withholding requirements, arising by reason of this
Option being treated as a non-statutory option or otherwise. Notwithstanding
the foregoing, if the Optionee, prior to the Expiration Date, materially
violates the non-competition or confidentiality provisions of any employment
contract, confidentiality and nondisclosure agreement or other agreement between
the Optionee and the Company, the right to exercise this Option shall terminate
immediately upon written notice to the Optionee from the Company describing such
violation.
(e) Exercise Period Upon Death or Disability. If the Optionee dies or
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becomes disabled prior to the Expiration Date while he or she is an employee of
the Company, or if the Optionee dies within three months after the Optionee
ceases to be an employee of the Company (other than as the result of a discharge
for "cause" as specified in paragraph (f) below), this Option shall be
exercisable, within the period of one year following the date of death or
disability of the Optionee (but in no event after the Expiration Date), by the
Optionee or by the person to whom this Option is transferred by will or the laws
of descent and distribution, provided that this Option shall be exercisable by
the Optionee on the date of his or her death or disability. Except as otherwise
indicated by the context, the term "Optionee", as used in this Option, shall be
deemed to include the estate of the Optionee or any person who acquires the
right to exercise this Option by bequest or inheritance or otherwise by reason
of the death of the Optionee.
(f) Resignation of Employment. If the Optionee, prior to the Expiration
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Date, voluntarily resigns from employment with the Company, the right to
exercise this Option shall terminate immediately upon such resignation.
4. Payment of Purchase Price.
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(a) Method of Payment. Payment of the purchase price for shares
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purchased upon exercise of this Option shall be made (i) by delivery to the
Company of cash or a check to the order of the Company in an amount equal to the
purchase price of such shares, (ii) subject to the consent of the Company, by
delivery to the Company of shares of Common Stock of the Company then owned by
the Optionee having a fair market value equal in amount to the purchase price of
such shares, (iii) by any other means which the Board of Directors determines
are consistent with the purpose of the Plan and with applicable laws and
regulations (including, without limitation, the provisions of Rule 16b-3 under
the Securities Exchange Act of 1934 and Regulations T promulgated by the Federal
Reserve Board), or (iv) by any combination of such methods of payment.
(b) Valuation of Shares or Other Non-Cash Consideration Tendered in
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Payment of Purchase Price. For the purposes hereof, the fair market value of
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any share of the Company's Common Stock or other non-cash consideration which
may be delivered to the Company in exercise of this Option shall be determined
in good faith by the Board of Directors of the Company.
(c) Delivery of Shares Tendered in Payment of Purchase Price. If the
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Optionee exercises Options by delivery of shares of Common Stock of the Company,
the certificate or certificates representing the shares of Common Stock of the
Company to be delivered shall be duly executed in blank by the Optionee or shall
be accompanied by a stock power duly executed in blank suitable for purposes of
transferring such shares to the Company. Fractional shares of Common Stock of
the Company will not be accepted in payment of the purchase price of shares
acquired upon exercise of this Option.
(d) Restrictions on Use of Option Stock. Notwithstanding the foregoing,
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no shares of Common Stock of the Company may be tendered in payment of the
purchase price of shares to be so tendered were acquired within twelve (12)
months before the date of such tender, through the exercise of an Option granted
under the Plan or any other stock option or restricted stock plan of the
Company.
5. Delivery of Shares; Compliance with Securities Laws, Etc.
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(a) General. The Company shall, upon payment of the Option price for
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the number of shares purchased and paid for, make prompt delivery of such shares
to the Optionee, provided that if any law or regulation requires
the Company to take any action with respect to such shares before the issuance
thereof, then the date of delivery of such shares shall be extended for the
period necessary to complete such action.
(b) Listing, Qualification, Etc. This Option shall be subject to the
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requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of non-
public information or the satisfaction of any other condition is necessary as a
condition of, or in connection with, the issuance or purchase of shares
hereunder, this Option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure, or to satisfy such other condition.
6. Nontransferability of Option. Except as provided in paragraph (e) of
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Section 3, this Option is personal and no rights granted hereunder may be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) nor shall any such rights be subject to execution,
attachment or similar process. Upon any unauthorized attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of this Option or of such
rights contrary to the provisions hereof, or upon the levy of any attachment or
similar process upon this Option or such rights, this Option and such rights
shall, at the election of the Company, become null and void. Notwithstanding
the foregoing, Optionee may transfer by gift all or any portion of the Option to
any lineal descendent (including any legally adopted child), spouse or parent,
or to any trust or similar entity of which such a person is the beneficiary.
7. No Special Employment Rights. Nothing contained in the Plan or this
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Option shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment of the Optionee for the period
within which this Option may be exercised.
8. Covenant not to Compete.
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(a) Nature of Business. The Optionee and the Company recognize that
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Optionee will acquire knowledge as a result of working for the Company, and that
such knowledge will include not only general knowledge of the medical
information systems business, but specific knowledge of the Company's business,
secrets, products and customers, including confidential information. Optionee
and the Company recognize that upon termination of employment by the Company,
Optionee could use such specific knowledge and information to the detriment of
the Company by disclosing it to competitors, customers and prospects, and using
it to obtain or win business. Optionee and the Company recognize that proof of
such disclosure would be difficult, yet the harm caused thereby could be
significant to the Company. Therefore, Optionee and the Company are willing to
agree that confidential information will be disclosed to Optionee, and, to
protect the Company, its relationship with its customers, its competitive
position, and its goodwill, Optionee will not engage in a competitive venture
for a reasonable time after employment by the Company, as set forth below.
(b) Competitive Ventures. The Company is engaged throughout the
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United States in the development and marketing of information systems, including
computer software and related services, for hospitals, physician groups,
laboratories, and clinics, and also for providers of information services to
such groups (such activities, products and services being referred to herein as
the ("Medical Information Systems Business"). Optionee recognizes that the
Company's medical information systems work together and are designed to share
common files, architectures, a "look and feel," and other elements. In the
event of the termination of Optionee's employment hereunder for any reason, the
Optionee agrees that for a period of twelve (12) months from the date of such
termination (the "Prohibition Period"), he/she will not:
(i) Engage directly for himself/herself, or jointly with or on
behalf of any person, entity or venture involved in the Medical Information
Systems Business, or any other business in which the Company was engaged at the
time of such termination of employment, and
(ii) Work for or become employed by or associated with any person,
entity or venture engaged in the Medical Information Systems Business, where
either (i) the Optionee's duties will be substantially similar to those he/she
has performed for the Company hereunder, or (ii) the Optionee's duties would be
likely to involve, or require, or would involve or require, disclosure or use of
proprietary information
(c) Geographical Limitations. The Optionee's obligations under this
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Section 8 shall extend to all
geographical areas in which the Company, or any of its related companies, is
offering its products' services, either directly or indirectly through licenses
or otherwise, during the Prohibition Period.
(d) Non-Solicitation. The Optionee further agrees that for a period
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of twelve (12) months from the date of termination of his/her employment, he/she
will not, on behalf of himself/herself or any person or entity of the Company,
(i) compete for, or engage in competitive solicitation of, any customer of the
Company, or any person or entity that he/she has, during the twelve (12) months
immediately preceding such termination, solicited or serviced on behalf of the
Company or that has been so solicited or serviced, during such period, by any
person under the Optionee's supervision, or (ii) hire or engage or attempt to
hire or engage any individual who was an employee of the Company at any time
during the twelve (12) months immediately prior to such termination.
9. Rights as a Shareholder. The Optionee shall have no rights as a
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shareholder with respect to any shares which may be purchased by exercise of
this Option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
10 Adjustment Provisions.
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(a) General. If, through, or as a result of, any merger,
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consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different number
or kind of shares or other securities of the Company, or (ii) additional shares
or new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Common Stock or other
securities, the Optionee shall, with respect to this Option or any unexercised
portion hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Section 15(a) of the Plan.
(b) Board Authority to Make Adjustments. Any adjustments under this
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Section 10 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued pursuant to this
Option on account of any such adjustments.
(c) Limits on Adjustments. No adjustment shall be made under this
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Section 9 which would, within the meaning of any applicable provision of the
Code, constitute a modification, extension or renewal of this Option or a grant
of additional benefits to the Optionee.
11. Mergers, Consolidation, Distributions, Liquidations Etc. In the
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event of (i) a consolidation or merger, (ii) sale of all or substantially all
of the assets of the Company in which outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity, or (iii) a liquidation of the Company, prior to the Expiration
Date or termination of this Option, the Optionee shall, with respect to this
Option or any unexercised portion hereof, be entitled to the rights and
benefits, and be subject to the limitations, set forth in Section 16(a) of the
Plan.
12. Withholding Taxes. The Company's obligation to deliver shares
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upon the exercise of this Option shall be subject to the Optionee's satisfaction
of all applicable federal, state and local income and employment tax withholding
requirements.
13. Investment Representations; Legends.
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(a) Representations. The Optionee represents, warrants and
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covenants that:
(i) Any shares purchased upon exercise of this Option shall be
acquired for the Optionee's account for investment only and not with a view to,
or for sale in connection with, any distribution of the share in violation of
the Securities Act of 1933 (the "Securities Act") or any rule or regulation
under the Securities Act.
(ii) The Optionee has had such opportunity as he or she has
deemed adequate to obtain from representatives of the Company such information
as is necessary to permit the Optionee to evaluate the merits and risks of his
or her investment in the Company.
(iii) The Optionee is able to bear the economic risk of holding
shares acquired pursuant to the exercise of this Option for an indefinite
period.
(iv) The Optionee understands that (A) the shares acquired
pursuant to the exercise of this Option may not be registered under the
Securities Act and may be "restricted securities" within the meaning of Rule 144
under the Securities Act; (B) such shares cannot be sold, transferred or
otherwise disposed of unless they are subsequently registered under the
Securities Act or an exemption from registration is then available; (C) in any
event, an exemption from registration under Rule 144 or otherwise under the
Securities Act may not be available for at least two years and even then will
not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public and
other terms and conditions of Rule 144 are complied with; and (D) there is
currently a registration statement on file with the Securities and Exchange
Commission with respect to certain shares of Common Stock of the Company, and a
registration statement with respect to shares exercisable under the Plan, but
the Company has no obligation to register any shares acquired pursuant to the
exercise of this Option under the Securities Act or to keep current any existing
registration or prospectus.
By making payment upon exercise of this Option, the Optionee shall be deemed to
have reaffirmed, as of the date of such payment, the representations made in
this Section 13.
(b) Legends on Stock Certificates. If required by the Company, all
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stock certificates representing shares of Common Stock issued to the Optionee or
any other person upon exercise of this Option shall have affixed thereto legends
substantially in the following forms, in addition to any other legends required
by applicable state law:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
transferred, sold or otherwise disposed of in the absence of an
effective registration statement with respect to the shares evidenced
by this certificate, filed and made effective under the Securities Act
of 1933, or an opinion of counsel satisfactory to the Company to the
effect that registration under such Act is not required. The shares of
stock represented by this certificate are subject to certain
restrictions on transfer contained in an Option Agreement, a copy of
which will be furnished upon request by the issuer."
14. Miscellaneous.
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(a) Except as provided herein, this Option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Optionee.
(b) All notices under this Option shall be mailed or delivered by hand
to the parties at their respective addresses set forth beneath their names below
or at such other address as may be designated in writing by either of the
parties to on another.
(c) This Option shall be governed by the construed in accordance with
the laws of the State of Vermont.
Date of Grant: IDX Systems Corporation,
a Vermont Corporation
[DATE], 1999
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chief Executive Officer
OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing Option and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy
of the Company's current Prospectus for the Plan.
OPTIONEE
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[NAME]
Address:
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IDX SYSTEMS CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the date of grant set forth below,
and is by and between the Company and [NAME] (the "Optionee").
1. Grant of Option. The Company hereby grants to the Optionee the Option,
pursuant to the Plan, to purchase an aggregate of [AMOUNT IN WORDS] [NUMBER]
shares of Common Stock at a price of $[PRICE] per share, purchasable as set
forth in, and subject to the terms and conditions of, this Option and the Plan.
The capitalized terms used in this Agreement shall have the meanings set forth
on Schedule A - Definitions, attached hereto. This Option is not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code.
2. Exercise of Option and Provisions for Termination.
2.1 Vesting.
2.1.1 Ordinary Vesting. Except as otherwise provided in this
Agreement, this Option may be exercised as to any and all Option Shares at any
time during the period commencing with the Eighth Anniversary Date and ending on
the Expiration Date. This Option may not be exercised at any time after the
Expiration Date.
2.1.2 Accelerated Vesting. Subject to all of the conditions set
forth in this Agreement, Optionee may become entitled to exercise the Option
prior to the Eighth Anniversary Date, with respect to all of the Option Shares,
in accordance with the following provisions:
2.1.2.1 Provided the conditions set forth in Section
2.1.2.3 are satisfied, the Option shall become exercisable, on and after the
Determination Date, with respect to all of the Option Shares.
2.1.2.2 On or before the Determination Date, the Company
shall determine if the Goal has been successfully achieved, and the Company
shall give Optionee notice of such determination and calculation.
2.1.2.3 The Option shall not become exercisable as set
forth in Section 2.1.2.1 unless the Goal has been successfully achieved.
2.2 Exercise Procedure. Subject to the conditions set forth in this
Agreement, this Option shall be exercised by the Optionee's delivery of written
notice of exercise to the Secretary of the Company, specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 3 hereof. Such
exercise shall be effective upon receipt by the Secretary of the Company of such
written notice together with the required payment. The Optionee may purchase
less than the number of shares covered hereby, provided that no partial exercise
of this Option may be for any fractional share or for fewer than ten whole
shares.
2.3 Continuous Employment Required. Except as otherwise provided in
this Section 2, this Option may not be exercised unless the Optionee, at the
time he or she exercises this Option, is, and has been at all times since the
date of grant of this Option, an employee of the Company. For all purposes of
this Option, (i) "employment" shall be defined in accordance with the provisions
of section 1.421-7(h) of the regulations under the Code or any successor
regulations, and (ii) if this Option shall be assumed or a new Option
substituted therefor in a transaction to which Section 424(a) of the Code
applies, employment by such assuming or substituting corporation, hereinafter
called the "Successor Corporation") shall be considered for all purposes of this
Option to be employment by the Company.
2.4 Exercise Period Upon Termination of Employment. If the Optionee
ceases to be employed by the Company for any reason, then, except as provided in
Sections 2.5 and 2.6 below, the right to exercise this Option shall terminate 30
days after such cessation (but in no event after the Expiration Date), provided
that, except as set forth in Section 2.5, this Option shall be exercisable only
to the extent that the Optionee was entitled to exercise this Option on the date
of such cessation. Notwithstanding the foregoing, if the Optionee, prior to the
Expiration Date, materially violates the non-competition or confidentiality
provisions of any employment contract, confidentiality or nondisclosure
agreement, the right to exercise this Option shall terminate immediately upon
written notice of such violation given to Optionee by the Company.
2.5 Exercise Period Upon Death or Disability. If the Optionee dies
or becomes disabled prior to the Expiration Date while he or she is an employee
of the Company, or if the Optionee dies within three months after the Optionee
ceases to be an employee of the Company, the Option shall immediately become
exercisable in full as to all Option Shares, at any time or times within the
period of one year following the date of death or disability of the Optionee
(but in no event after the Expiration Date). Except as otherwise indicated by
the context, the term "Optionee," as used in this Option, shall be deemed to
include the estate of the Optionee or any person who acquires the right to
exercise this Option by bequest or inheritance or otherwise by reason of the
death of the Optionee or by legal guardianship, custodianship or similar reason.
2.6 Resignation of Employment. If the Optionee, prior to the
Expiration Date, voluntarily resigns from employment with the Company, the right
to exercise this Option shall terminate immediately upon such resignation.
3. Payment of Purchase Price.
3.1 Method of Payment. Payment of the purchase price for shares
purchased upon exercise of this Option shall be made (i) by delivery to the
Company of cash or a check to the order of the Company in an amount equal to the
purchase price of such shares, (ii) subject to the consent of the Company, by
delivery to the Company of shares of Common Stock of the Company then owned by
the Optionee having a fair market value equal in amount to the purchase price of
such shares, (iii) by any other means which the Board of Directors determines
are consistent with the purpose of the Plan and with applicable laws and
regulations (including, without limitation, the provisions of Rule 16b-3 under
the Securities Exchange Act of 1934 and Regulations T promulgated by the Federal
Reserve Board), or (iv) by any combination of such methods of payment.
3.2 Valuation of Shares or Other Non-Cash Consideration Tendered in
Payment of Purchase Price. For the purposes hereof, the fair market value of
any share of the Company's Common Stock or other non-cash consideration which
may be delivered to the Company in exercise of this Option shall be determined
in good faith by the Board of Directors of the Company.
3.3 Delivery of Shares Tendered in Payment of Purchase Price. If the
Optionee exercises Options by delivery of shares of Common Stock of the Company,
the certificate or certificates representing the shares of Common Stock of the
Company to be delivered shall be duly executed in blank by the Optionee or shall
be accompanied by a stock power duly executed in blank suitable for purposes of
transferring such shares to the Company. Fractional shares of Common Stock of
the Company will not be accepted in payment of the purchase price of shares
acquired upon exercise of this Option.
3.4 Restrictions on Use of Option Stock. Notwithstanding the
foregoing, no shares of Common Stock of the Company may be tendered in payment
of the purchase price if shares to be so tendered were acquired within twelve
(12) months before the date of such tender, through the exercise of an Option
granted under the Plan or any other stock Option or restricted stock plan of the
Company.
4. Delivery of Shares; Compliance with Securities Laws, Etc.
4.1 General. The Company shall, upon payment of the Option price for
the number of shares purchased and paid for, make prompt delivery of such shares
to the Optionee, provided that if any law or regulation requires the Company to
take any action with respect to such shares before the issuance thereof, then
the date of delivery of such shares shall be extended for the period necessary
to complete such action.
4.2 Listing, Qualification, Etc. This Option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of non-
public information or the satisfaction of any other condition is necessary as a
condition of, or in connection with, the issuance or purchase of shares
hereunder, this Option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure, or to satisfy such other condition.
5. Nontransferability of Option. Except as provided below in this Section
5 and also in Section 2.5 hereof, this Option is personal and no rights granted
hereunder may be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) nor shall any such rights be subject
to execution, attachment or similar process. Upon any unauthorized attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this Option or of
such rights contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon this Option or such rights, this Option and
such rights shall, at the election of the Company, become null and void.
Notwithstanding the foregoing, Optionee may transfer by gift all or any portion
of the Option to any lineal descendent (including any legally adopted child),
spouse or parent, or to any trust or similar entity of which such a person is
the beneficiary.
6. No Special Employment Rights. Nothing contained in the Plan or this
Agreement shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment of the Optionee for any period.
7. No Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this Option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
8. Covenant not to Compete.
(a) Nature of Business. The Optionee and the Company recognize that
Optionee will acquire knowledge as a result of working for the Company, and that
such knowledge will include not only general knowledge of the medical
information systems business, but specific knowledge of the Company's business,
secrets, products and customers, including confidential information. Optionee
and the Company recognize that upon termination of employment by the Company,
Optionee could use such specific knowledge and information to the detriment of
the Company by disclosing it to competitors, customers and prospects, and using
it to obtain or win business. Optionee and the Company recognize that proof of
such disclosure would be difficult, yet the harm caused thereby could be
significant to the Company. Therefore, Optionee and the Company are willing to
agree that confidential information will be disclosed to Optionee, and, to
protect the Company, its relationship with its customers, its competitive
position, and its goodwill, Optionee will not engage in a competitive venture
for a reasonable time after employment by the Company, as set forth below.
(b) Competitive Ventures. The Company is engaged throughout the
United States in the development and marketing of information systems, including
computer software and related services, for hospitals, physician groups,
laboratories, and clinics, and also for providers of information services to
such groups (such activities, products and services being referred to herein as
the ("Medical Information Systems Business"). Optionee recognizes that the
Company's medical information systems work together and are designed to share
common files, architectures, a "look and feel," and other elements. In the
event of the termination of Optionee's employment hereunder for any reason, the
Optionee agrees that for a period of twelve (12) months from the date of such
termination (the "Prohibition Period"), he/she will not:
(i) Engage directly for himself/herself, or jointly with or on
behalf of any person, entity or venture involved in the Medical Information
Systems Business, or any other business in which the Company was engaged at
the time of such termination of employment, and
(ii) Work for or become employed by or associated with any person,
entity or venture engaged in the Medical Information Systems Business, where
either (i) the Optionee's duties will be substantially similar to those he/she
has performed for the Company hereunder, or (ii) the Optionee's duties would be
likely to involve, or require, or would involve or require, disclosure or use of
proprietary information
(c) Geographical Limitations. The Optionee's obligations under this
Section 8 shall extend to all geographical areas in which the Company, or any
of its related companies, is offering its products' services, either directly or
indirectly through licenses or otherwise, during the Prohibition Period.
(d) Non-Solicitation. The Optionee further agrees that for a period
of twelve (12) months from the date of termination of his/her employment, he/she
will not, on behalf of himself/herself or any person or entity of the Company,
(i) compete for, or engage in competitive solicitation of, any customer of the
Company, or any person or entity that he/she has, during the twelve (12) months
immediately preceding such termination, solicited or serviced on behalf of
the Company or that has been so solicited or serviced, during such period, by
any person under the Optionee's supervision, or (ii) hire or engage or attempt
to hire or engage any individual who was an employee of the Company at any time
during the twelve (12) months immediately prior to such termination.
9. Adjustment Provisions.
9.1 General. If, through, or as a result of, any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different number
or kind of shares or other securities of the Company, or (ii) additional shares
or new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Common Stock or other
securities, the Optionee shall, with respect to this Option or any unexercised
portion hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Section 15(a) of the Plan.
9.2 Board Authority to Make Adjustments. Any adjustments under this
Section 8 will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued pursuant to this Option on
account of any such adjustments.
9.3 Limits on Adjustments. No adjustment shall be made under this
Section 8 which would, within the meaning of any applicable provision of the
Code, constitute a modification, extension or renewal of this Option or a grant
of additional benefits to the Optionee.
10. Mergers, Consolidation, Distributions, Liquidations, etc. In the
event of (i) a consolidation or merger, (ii) sale of all or substantially all
of the assets of the Company in which outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity, or (iii) a liquidation of the Company, prior to the Expiration
Date or termination of this Option, the Optionee shall, with respect to this
Option or any unexercised portion hereof, be entitled to the rights and
benefits, and be subject to the limitations, set forth in the Plan.
11. Withholding Taxes. The Company's obligation to deliver shares upon
the exercise of this Option shall be subject to the Optionee's satisfaction of
all applicable federal, state and local income and employment tax withholding
requirements, and the Company shall have the right to withhold for such taxes as
from proceeds of the sale of any shares as a result of the exercise of the
Option.
12. Investment Representations; Legends.
12.1 Representations. The Optionee represents, warrants and
covenants that:
12.1.1 Any shares purchased upon exercise of this Option shall be
acquired for the Optionee's account for investment only and not with a view to,
or for sale in connection with, any distribution of the share in violation of
the Securities Act of 1933 (the "Securities Act") or any rule or regulation
under the Securities Act.
12.1.2 The Optionee has had such opportunity as he or she has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Optionee to evaluate the merits and risks of his or her
investment in the Company.
12.1.3 The Optionee is able to bear the economic risk of holding
shares acquired pursuant to the exercise of this Option for an indefinite
period.
12.1.4 The Optionee understands that (A) the shares acquired
pursuant to the exercise of this Option may not be registered under the
Securities Act and may be "restricted securities" within the meaning of Rule 144
under the Securities Act; (B) such shares cannot be sold, transferred or
otherwise disposed of unless they are subsequently registered under the
Securities Act or an exemption from registration is then available; (C) an
exemption from registration under Rule 144, or otherwise under the Securities
Act may not be available for at least one year and even then will not be
available unless a public market then exists for the Common Stock, adequate
information concerning the Company is then available to the public, and other
terms and conditions of Rule 144 are complied with; and (D) there is currently a
registration statement on file with the Securities and Exchange Commission with
respect to certain shares of Common Stock of the Company, and a registration
statement with respect to shares exercisable under the Plan by Optionee only,
but the
Company has no obligation to register any shares acquired pursuant to the
exercise of this Option to keep current any existing registration or prospectus.
Optionee acknowledges receipt of the current Prospectus for the Plan. By making
payment upon exercise of this Option, the Optionee shall be deemed to have
reaffirmed, as of the date of such payment, the representations made in this
Section 11.
12.2 Legends on Stock Certificates. If required by the Company, all
stock certificates representing shares of Common Stock issued to the Optionee or
any other person upon exercise of this Option shall have affixed thereto legends
substantially in the following form, in addition to any other legends required
by applicable state law:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
transferred, sold or otherwise disposed of in the absence of an
effective registration statement with respect to the shares evidenced
by this certificate, filed and made effective under the Securities Act
of 1933, or an opinion of counsel satisfactory to the Company to the
effect that registration under such Act is not required. The shares of
stock represented by this certificate are subject to certain
restrictions on transfer contained in an Option Agreement, a copy of
which will be furnished upon request by the issuer."
13. Miscellaneous.
13.1 Except as provided herein, this Option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Optionee.
13.2 All notices under this Option shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their names
below or at such other address as may be designated in writing by either of the
parties to the other.
13.3 This Option shall be governed by and construed in accordance
with the laws of the State of Vermont.
Date of Grant: IDX SYSTEMS CORPORATION,
a Vermont Corporation
[DATE], 1999
By:__________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chief Executive Officer
OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing Option and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy
of the Company's current Prospectus for the Plan.
OPTIONEE
____________________________
[NAME]
Address:_____________________
____________________________
____________________________
Schedule A - Definitions
"Accounting Policies" means (i) Generally Accepted Accounting Principles, (ii)
accounting policies and procedures described from time to time in the Company's
audited financial statements, (iii) accounting policies of the Securities and
Exchange Commission applicable to the Company, and (iv) accounting methods and
principles customarily employed by the Company in preparing its budgets. In the
event of any conflict between or among such items, the Company in its discretion
may resolve such conflicts in its favor.
"Cause" means any of the following: (i) violation by Optionee of any of the
Company's policies, rules or regulations, after written notice of previous
violation or (ii) unprofessional, insubordinate, or illegal conduct by Optionee.
The Optionee shall be considered to have been discharged for "Cause" if the
Company determines, within 30 days after the Optionee's resignation, that
discharge for Cause would have been warranted at the time of such resignation.
"Code" means the Internal Revenue Code of 1986, as amended or replaced from time
to time.
"Common Stock" means the Company's Common Stock, $0.01 par value per share.
"Company" means IDX Systems Corporation, a Vermont corporation, and shall
include the parent and all present and future subsidiaries of the Company as
defined in Sections 424 (e) and 424 (f) of the Code.
"Determination Date" means that date on which the Company determines the Goal
has been successfully achieved, but not later than [DATE].
"Eighth Anniversary Date" means [DATE].
"Expiration Date" means [DATE].
"Goal" means that [INSERT GOAL].
"Option" means the Option granted under this Agreement.
"Option Shares" means shares of Common Stock issuable pursuant to the exercise
of the Option herein granted.
"Plan" means the Company's 1995 Stock Option Plan.