EXHIBIT 10.54
[FORM OF STOCK OPTION AGREEMENT]
STOCK OPTION AGREEMENT dated as of August 21, 2000 (the "Agreement")
between Medical Manager Corporation, a Delaware corporation (the "Company"), and
_________________ (the "Participant").
WHEREAS, in light of the extraordinary services that will be required
of the Participant in integrating the businesses of the companies following the
merger of the Company and CareInsite, Inc., a Delaware corporation, with
Healtheon/WebMD Corporation, a Delaware corporation ("Healtheon"), the Company
has granted to the Participant nonqualified stock options to purchase _____
shares of common stock, $.01 par value, of the Company (the "Common Shares")
upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Confirmation of Grant of Options; Effectiveness. Pursuant to a
determination by the Stock Option Committee (the "Committee") of the Board of
Directors of the Company (the "Board"), the Company hereby confirms that the
Participant has been granted, effective as of the date hereof (the "Date of
Grant"), and subject to the terms and conditions of this Agreement, the number
of nonqualified stock options (the "Options") specified at the foot of the
signature page hereof. Each such Option shall entitle the Participant to
purchase, upon payment of the option price specified at the foot of the
signature page hereof (the "Option Price"), one Common Share. The Options shall
be exercisable as hereinafter provided.
2. Certain Restrictions. None of the Options may be sold,
transferred, assigned, pledged, or otherwise encumbered or disposed of, except
by will or the laws of descent and distribution; provided, however, that the
Committee shall permit the transfer of an Option to the Participant's family
members, to one or more trusts established in whole or in part for the benefit
of one or more of such family members or to any other entity that is owned by
such family members. During the Participant's lifetime, an Option shall be
exercisable only by the Participant or by the Participant's guardian, legal
representative or permitted transferee. Each transferee of an Option by will or
the laws of descent and distribution or other permitted transferee shall, as a
condition to the transfer thereof, execute an agreement pursuant to which it
shall become a party to this Agreement. Any attempt to sell, transfer, assign,
pledge or otherwise encumber or dispose of any Option contrary to the provisions
of this Agreement, and any levy, attachment or similar process upon any Option
shall be null and void and without effect.
3. Terms and Conditions of Options. The Options evidenced hereby
are subject to the following terms and conditions:
(a) Vesting. Subject to Section 3(b), the Options shall
vest and become exercisable ("Vested Options") as follows: 2.0833% of the
Options shall vest and become exercisable on the first day of each month
following the Date of Grant, commencing September 1, 2000, with 100% of the
Options being vested and exercisable on August 1, 2004.
(b) Option Period. (i) The Options shall not be
exercisable following the tenth anniversary of the Date of Grant, and shall be
subject to earlier termination as provided in Section 3(b)(iii).
(ii) In the event that the Participant's employment
with the Company and its subsidiaries is terminated (A) as a result of the
Participant's death or the Participant becoming Disabled (as defined below),
(B) by the Company without Cause (as defined below) or (C) by the Participant
for Good Reason (as defined below), the Options shall be fully vested and
exercisable as of the date on which such employment terminates.
(iii) In the event that the Participant's employment
with the Company and its subsidiaries is terminated by the Company for Cause or
by the Participant without Good Reason, any Options which have not become
Vested Options as of the date of termination shall terminate and be cancelled
without any consideration being paid therefor.
(iv) In the event that the Participant's employment
with the Company and its subsidiaries terminates for any reason, the
Participant (or the Participant's estate) shall be entitled to exercise any
Options which have become Vested Options as of the date of termination until
the tenth anniversary of the Date of Grant.
(c) Certain Definitions. (i) For purposes of this
Agreement, "Cause" has the meaning set forth in an employment agreement between
the Participant and the Company (or a subsidiary of the Company), or if there is
no such employment agreement that defines "Cause", means a final, non-appealable
court adjudication in a civil or criminal proceeding that the Participant has
during his employment committed a fraud or felony directed against the Company
relating to or adversely affecting his employment.
(ii) For purposes of this Agreement, the Participant
shall be "Disabled" if the Participant becomes incapacitated by bodily injury
or disease (including as a result of mental illness) so as to be unable to
regularly perform the duties of his position for a period in excess of 180 days
in any consecutive twelve-month period.
(iii) For purposes of this Agreement, "Good Reason" has
the meaning set forth in an employment agreement between the Participant and
the Company (or a subsidiary of the Company), or if there is no such employment
agreement that defines "Good Reason", means any of the following conditions or
events:
1. a reduction in the Participant's title or
responsibilities with the Company or the Surviving Corporation
(as defined in the Agreement and Plan of Merger dated February
13, 2000 between Healtheon and the Company, as amended by
Amendment No. 1 thereto dated as of June 18, 2000), or if he
is required to report to any person other than ▇▇▇▇▇▇ ▇. Wygod
or any person designated by ▇▇▇▇▇▇ ▇. Wygod;
2. any reduction in any compensation or fringe
benefits provided by the Company;
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3. any breach by the Company of this Agreement or any other
material agreement between the Company and the Participant;
4. the failure of the Surviving Corporation to assume the
obligations of the Company hereunder and agree to be bound
by the terms hereof; or
5. a change in the location from which the Participant performs
his services for the Company or the Surviving Corporation to
a location more than 25 miles from his current residence.
(d) Notice of Exercise. Subject to Sections 3(e) and 5(a) hereof,
the Participant may exercise any or all of the Vested Options by giving
written notice to the Chief Financial Officer of the Company at its principal
business office. The date of exercise of a Vested Option shall be the later of
(i) the date on which the Chief Financial Officer of the Company receives such
written notice or (ii) the date on which the conditions provided in Sections
3(e) and 5(a) hereof are satisfied.
(e) Payment. Prior to the issuance of a certificate pursuant to
Section 3(h) hereof evidencing Common Shares, the Participant shall have paid
to the Company the Option Price of all Common Shares purchased pursuant to
exercise of such Options, in cash or by certified or official bank check, and
all applicable tax withholding obligations as provided in Section 5(a) of this
Agreement. The Option Price may also be payable by a customary "cashless"
exercise procedure through a broker or in such other form as the Committee may
approve.
(f) Shareholder Rights. The Participant shall have no
rights as a shareholder with respect to any Common Shares issuable upon the
exercise of an Option until a certificate or certificates evidencing such shares
shall have been issued to the Participant, and, except as provided in Section 6,
no adjustment shall be made for dividends or distributions or other rights in
respect of any share for which the record date is prior to the date upon which
the Participant shall become the holder of record thereof.
(g) Compliance with Securities Laws. The Company shall, on or
prior to the date on which an Option becomes exercisable, use its best efforts
to (A) file a registration statement with the Securities and Exchange
Commission on Form S-8 with respect to the Common Shares subject to such Option
and cause such registration statement to be declared effective and remain
effective for so long as any Option remains outstanding and (B) qualify such
Common Shares under applicable state "blue sky" laws (or determine that an
exemption under such blue sky laws is available) and cause such Common Shares
to remain so qualified (or exempt) for so long as any Option remains
outstanding.
(h) Issuance of Certificate. As soon as practicable following
the exercise of any Options, a certificate evidencing the number of Common
Shares issued in connection with such exercise shall be issued in the name of
the Participant.
4. Representations and Warranties. The Company and the
Participant represent that this Agreement has been duly executed and delivered
by such party and constitutes
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a legal, valid and binding agreement of such party, enforceable against such
party in accordance with its terms, except as limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and by general principles of equity.
5. Miscellaneous.
(a) Tax Withholding. The Company and its subsidiaries shall have
the right to require the Participant to remit to the Company, prior to the
delivery of any certificates evidencing Common Shares pursuant to the exercise
of an Option, any amount sufficient to satisfy any minimum federal, state or
local tax withholding requirements. Prior to the Company's determination of such
withholding liability, the Participant shall have the right to make an
irrevocable election to satisfy, in whole or in part, such obligation to remit
taxes by directing the Company to withhold Common Shares that would otherwise be
received by the Participant.
(b) No Restriction on Right of Company to Effect Corporate
Changes. Subject to Section 6, this Agreement shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
capital structure or business of the Company, or any merger or consolidation of
the Company, or any issue of stock or of options, warrants or rights to purchase
stock or of bonds, debentures, preferred or prior preference stocks whose rights
are superior to or affect the Common Shares or the rights thereof or which are
convertible into or exchangeable for Common Shares, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of the
assets or business of the Company, or any other corporate act or proceeding,
whether of a similar character or otherwise.
6. Adjustment.
The number and price per Common Share covered by any Option, and any
other rights under any Option, shall be appropriately adjusted by the Board or
the Committee, as the case may be, to reflect any subdivision (stock split) or
consolidation (reverse split) of the issued Common Shares, or any other
recapitalization of the Company, or any business combination or other
transaction involving the Company (including, without limitation, rights
offerings and issuances of securities for consideration that is less than the
fair market value thereof), which shall affect the rights of holders of Common
Shares. The Committee or the Board, as the case may be, shall provide for
appropriate adjustment of the Options in the event of stock dividends or
distributions of assets or securities owned by the Company to its stockholders.
Without limiting the foregoing, any adjustment pursuant to this Section 6 shall
(i) be on terms that are no less favorable to the Participant than those
applicable to any other holder of stock options or convertible securities issued
by the Company and (ii) entitle the Participant to receive, upon exercise of the
Options, in addition to the Common Shares that remain subject to such Options,
such stock, securities, other property and rights that the Participant, as a
holder of Common Shares, would have received if such Options had been exercised
prior to the date of the applicable event or transaction described in this
Section 6.
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7. Survival; Assignment.
All agreements, representations and warranties made herein and in any
certificates delivered pursuant hereto shall survive the issuance to the
Participant of the Options and the Common Shares and, notwithstanding any
investigation heretofore or hereafter made by the Participant or the Company or
on the Participant's or the Company's behalf, shall continue in full force and
effect. Without the prior written consent of the Company, the Participant may
not assign any of his rights hereunder except as permitted by Section 2.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the heirs and permitted successors and
assigns of such party; and all agreements herein by or on behalf of the Company,
or by or on behalf of the Participant, shall bind and inure to the benefit of
the heirs and permitted successors and assigns of such parties hereto.
8. Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by certified
or registered mail, return receipt requested, postage prepaid, addressed, if to
the Participant, to his attention at the most recent mailing address that the
Company has on record and, if to the Company, to it at River Drive Center 2, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Telecopier No.: (201)
703-3401, Attention: Chief Financial Officer. All such notices shall be
conclusively deemed to be received and shall be effective, if sent by hand
delivery, upon receipt, or if sent by registered or certified mail, on the fifth
day after the day on which such notice is mailed.
9. Waiver. The waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.
10. Source of Rights. This Agreement shall be the sole and
exclusive source of any and all rights which the Participant, and the
Participant's personal representatives or heirs at law, may have in respect of
the Options as granted hereunder.
11. Captions. The captions contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
12. Entire Agreement; Governing Law; Jurisdiction. This Agreement
sets forth the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same agreement. The headings of sections and
subsections herein are included solely for convenience of reference and shall
not affect the meaning of any of the provisions of this Agreement. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New Jersey (without reference to the choice of law provisions of
New Jersey law) applicable to contracts executed and to be wholly performed
within such State, and the State or Federal court sitting in San Diego County,
California shall have exclusive jurisdiction of the Company and the Participant
for purposes of adjudicating any disputes under this Agreement. The Participant
and the Company hereby consent to personal jurisdiction and venue in the State
or Federal court sitting in San
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Diego County, California and hereby waive any claim or defense that the party
lacks minimum contacts with the forum, that such State or Federal court lacks
personal jurisdiction of the parties, or that such State or Federal court is an
improper or inconvenient venue.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Participant has executed this
Agreement, both as of the day and year first above written.
MEDICAL MANAGER CORPORATION
By:
------------------------
Name:
Title:
PARTICIPANT
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Number of Options: (1)
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Option Price:
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(1) Under this form of agreement, 200,000 options, with an Option Price of
$12.75, were issued to each of Messrs. Cameron, Mele and ▇▇▇▇▇ (such
number of options and Option Price give effect to the conversion of the
options to purchase Medical Manager common stock into options to
purchase WebMD common stock as a result of the merger of Medical
Manager Corporation and WebMD Corporation).
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