EXHIBIT 4.2
HEALTH SYSTEMS DESIGN CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
1. GRANT OF OPTION. Health Systems Design Corporation (the
"Company") hereby grants to _____________ (the "Employee") under the Health
Systems Design Corporation 1996 Omnibus Equity Incentive Plan (the "Plan"), as a
separate incentive in connection with his or her employment and not in lieu of
any salary or other compensation for his or her services, a nonqualified stock
option to purchase, on the terms and conditions set forth in this Agreement and
the Plan, all or any part of an aggregate of __________ shares of authorized
shares of the Common Stock, at the purchase price set forth in paragraph 2 of
this Agreement. The option granted hereby is not intended to be an Incentive
Stock Option within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended.
2. EXERCISE PRICE. The purchase price per share (the "Option
Price") shall be $__________, which is the fair market value per share of the
Common Stock on __________, the effective date of this Agreement. The Option
Price shall be payable in the legal tender of the United States or, in the
discretion of the Committee, in shares of the Common stock of the Company or in
a combination of such legal tender and such shares.
3. NUMBER OF SHARES. The number and class of shares specified in
paragraph 1 above, and/or the Option Price, are subject to appropriate
adjustment in the event of changes in the capital stock of the Company by reason
of stock dividends, split-ups or combinations of shares, reclassifications,
mergers, consolidations, reorganizations or liquidations. Subject to any
required action of the stockholders of the Company, if the Company shall be the
surviving corporation in any merger or consolidation, the option granted
hereunder (to the extent that it is still outstanding) shall pertain to and
apply to the securities to which a holder of the same number of shares of Common
Stock that are then subject to the option would have been entitled. To the
extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Committee, whose determination in
that respect shall be final, binding and conclusive.
4. COMMENCEMENT OF EXERCISABILITY. Except as otherwise provided in
this Agreement, the right to exercise the option awarded by this Agreement shall
accrue (a) as to 25% of the shares subject to such option on the day after the
third anniversary of the date of this Agreement, (b) as to an additional 25% on
the day after the fourth anniversary of this Agreement, and (c) as to the
remaining 50% on the day after the fifth anniversary of this Agreement.
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5. TERMINATION OF OPTION. In the event of termination of the
Employee's employment with the Company or a Subsidiary for any reason, the
Employee may, within three (3) months after the date of such termination or
within six (6) years from the date of this Agreement, whichever shall first
occur, exercise the option to the extent the right to exercise the option had
accrued as of the date of such termination. In the event the Employee shall
die within such three (3) month period, the option may be exercised by the
Employee's transferee, as hereinafter provided, to the same extent that the
right to exercise the option had accrued immediately prior to the Employee's
death, for a period of three (3) months after the date of the Employee's death.
6. PERSONS ELIGIBLE TO EXERCISE. The option shall be exercisable
during the Employee's lifetime only by the Employee. The option shall be
non-transferable by the Employee other than by a beneficiary designation made in
a form and manner acceptable to the Committee, or by will or the applicable laws
of descent and distribution.
7. AFTER THE DEATH OF EMPLOYEE. To the extent exercisable after the
Employee's death, the option shall be exercised only by the Employee's
designated beneficiary or beneficiaries, or if no beneficiary survives the
Employee, by the person or persons entitled to the option under the Employee's
will, or if the Employee shall fail to make testamentary disposition of the
option, his or her legal representative. Any transferee exercising the option
must furnish the Company (a) written notice of his or her status as transferee,
(b) evidence satisfactory to the Company to establish the validity of the
transfer of the option and compliance with any laws or regulations pertaining to
said transfer, and (c) written acceptance of the terms and conditions of the
option as prescribed in this Agreement.
8. EXERCISE OF OPTION. The option may be exercised by the person
then entitled to do so as to any shares which may then be purchased (a) by
giving written notice of exercise to the Company, specifying the number of full
shares to be purchased and accompanied by full payment of the purchase price
thereof (and the amount of any income tax the Company is required by law to
withhold by reason of such exercise), and (b) by giving satisfactory assurances
in writing if requested by the Company, signed by the person exercising the
option, that the shares to be purchased upon such exercise are being purchased
for investment and not with a view to the distribution thereof.
9. SUSPENSION OF EXERCISABILITY. If at any time the Company shall
determine, in its discretion, that the listing, registration or qualification of
the shares covered by the option upon any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of the
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purchase of shares hereunder, the option may not be exercised, in whole or in
part, unless and until such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company. The Company shall make reasonable efforts to meet
the requirements of any such state or federal law or securities exchange and to
obtain any such consent or approval of any such governmental authority.
10. NO RIGHTS OF STOCKHOLDER. Neither the Employee nor any person
claiming under or through said Employee shall be or have any of the rights or
privileges of a stockholder of the Company in respect of any of the shares
issuable upon the exercise of the option, unless and until certificates
representing such shares shall have been issued, recorded on the records of the
Company or its transfer agents or registrars, and delivered to Employee.
11. OPTION HAS NO EFFECT ON EMPLOYMENT. The terms of Employee's
employment shall be determined from time to time by the Company, or the
Subsidiary employing the Employee, as the case may be, and the Company, or the
Subsidiary employing the Employee, as the case may be, shall have the right,
which is hereby expressly reserved, to terminate or change the terms of the
employment of the Employee at any time for any reason whatsoever, with or
without good cause.
12. ADDRESSES FOR NOTICES. Any notice to be given to the Company
under the terms of this Agreement shall be addressed to the Company, in care of
its Secretary, at Health Systems Design Corporation, 0000 Xxxxxxxx, Xxxxxxx, XX
00000, or at such other address as the Company may hereafter designate in
writing. Any notice to be given to the Employee shall be addressed to the
Employee at the address set forth beneath the Employee's signature hereto, or at
such other address as the Employee may hereafter designate in writing. Any such
notice shall be deemed to have been duly given if and when enclosed in a
properly sealed envelope, addressed as aforesaid, registered or certified and
deposited, postage and registry fee prepaid, in a United States post office.
13. NON-TRANSFERABILITY OF OPTION. Except as otherwise herein
provided, the option herein granted and the rights and privileges conferred
hereby shall not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to sale
under execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of said option, or of any right
or privilege conferred hereby, contrary to the provisions hereof, or upon any
attempted sale under any execution, attachment or similar process upon the
rights and privileges conferred hereby, said option and the rights and
privileges conferred hereby shall immediately become null and void.
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14. MAXIMUM TERM OF OPTION. Notwithstanding any other provision of
this Agreement, this option is not exercisable after the expiration of six (6)
years and three (3) months from the date of this Agreement.
15. BINDING AGREEMENT. Subject to the limitation on the
transferability of the option contained herein, this Agreement shall be binding
upon and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.
16. PLAN GOVERNS. This Agreement is subject to all terms and
provisions of the Plan. In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Terms used in this Agreement that are not
defined in this Agreement shall have the meaning set forth in the Plan.
17. COMMITTEE AUTHORITY. The Committee shall have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon Employee, the Company and all other interested persons.
No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
this Agreement.
18. CAPTIONS. Captions provided herein are for convenience only and
are not to serve as a basis for interpretation or construction of this
Agreement.
19. AGREEMENT SEVERABLE. In the event that any provision in this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement, in
duplicate, effective as of the day and year specified in paragraph 2 of this
Agreement.
Health Systems Design Corporation
By
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Employee Signature
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Address
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Social Security Number
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