Accretive Health, Inc. Nonstatutory Stock Option Agreement Granted Under 2010 Stock Incentive Plan
Exhibit 10.25
Nonstatutory Stock Option Agreement
Granted Under 2010 Stock Incentive Plan
Granted Under 2010 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant by Accretive Health, Inc., a Delaware corporation (the
“Company”), on , 20[ ] (the “Grant Date”) to [ ], an
[employee], [consultant], [director] of the Company (the “Participant”), of an option to purchase,
in whole or in part, on the terms provided herein and in the Company’s 2010 Stock Incentive Plan
(the “Plan”), a total of [ ] shares (the “Shares”) of common stock, $0.01
par value per share, of the Company (“Common Stock”) at $[ ] per Share. Unless
earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on the tenth anniversary
of the Grant Date (the “Final Exercise Date”).
It is intended that the option evidenced by this agreement shall not be an incentive stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the
term “Participant”, as used in this option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms.
2. Vesting Schedule.
This option will become exercisable (“vest”) as to [25%] of the original number of Shares on
the first anniversary of the [commencement of the Participant’s service to the Company] (the
“Vesting Commencement Date”) and as to an additional [25%] of the original number of Shares at the
end of each successive anniversary of the Vesting Commencement Date until the [fourth] anniversary
of the Vesting Commencement Date.
The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan. The Participant may purchase
less than the number of shares covered hereby, provided that no partial exercise of this option may
be for any fractional share. No Shares will be issued until the Participant has executed any and
all agreements that the Company may require the Participant to execute in connection with such
exercise and / or in connection with any transactions involving the Shares (for example, by not by
limitation, lock-up agreements and FINRA questionnaires).
(b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Participant, at the time he or
she exercises this option, is, and has been at all times since the Grant Date, an employee or
officer of or consultant or advisor to, the Company or any other entity the employees, officers,
directors, consultants, or advisors of which are eligible to receive option grants under the Plan
(an “Eligible Participant”).
(c) Termination of Relationship with the Company. If the Participant ceases to be an
Eligible Participant for any reason, then, except as provided in paragraph (d) below, the right to
exercise this option shall terminate sixty (60) days after such cessation (but in no event after
the Final Exercise Date), provided that this option shall be exercisable only to
the extent that the Participant was entitled to exercise this option on the date of such cessation.
Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the
non-competition or confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between the Participant and the Company, including the
provisions of Section 6 of this Agreement, the right to exercise this option shall terminate
immediately upon such violation.
(d) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s
employment or other relationship with the Company is terminated by the Company for Cause (as
defined below), the right to exercise this option shall terminate immediately upon the effective
date of such termination of employment or other relationship. If the Participant is party to an
employment, consulting or severance agreement with the Company that contains a definition of
“cause” for termination of employment or other relationship, “Cause” shall have the meaning
ascribed to such term in such agreement. Otherwise, “Cause” shall mean willful misconduct by the
Participant or willful failure by the Participant to perform his or her responsibilities to the
Company (including, without limitation, breach by the Participant of any provision of any
employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between
the Participant and the Company, and including the provisions of Section 6 of this Agreement), as
determined by the Company, which determination shall be conclusive. The Participant’s employment
or other relationship shall be considered to have been terminated for “Cause” if the Company
determines, within 30 days after the Participant’s resignation, that termination for Cause was
warranted. In the event that the Participant is terminated for Cause, the Company shall be
entitled to pursue the remedies set forth in Section 6(h) of this Agreement.
4. Withholding.
No Shares will be issued pursuant to the exercise of this option unless and until the
Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any
federal, state or local withholding taxes required by law to be withheld in respect of this option.
5. Transfer Restrictions.
This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Participant, this option shall be exercisable only by
the Participant.
6. Restrictive Covenants.
(a) General. This option represents a substantial economic benefit to the
Participant.
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The Participant, by virtue of such Participant’s role with the Company, has access to, and is
involved in the formulation of, certain confidential and secret information of the Company
regarding its operations and each Participant could materially harm the business of the Company by
competing with the Company or soliciting employees or customers of the Company.
(b) Non -Solicitation. During the time in which Participant performs services for the
Company and for a period of eighteen (18) months after the Participant ceases to perform services
for the Company, regardless of the reason, Participant shall not, directly or indirectly, either
alone or in conjunction with any person, firm, association, company or corporation:
(i) Hire, recruit, solicit or otherwise attempt to employ or retain or enter into any business
relationship with, any person who is or was an employee of the Company within the twelve (12) month
period immediately preceding the cessation of Participant’s service with the Company; or
(ii) Solicit the sale of any products or services that are similar to or competitive with
products or services offered by, manufactured by, designed by, or distributed by Company, to any
person, company or entity which was or is a customer or potential customer of Company for such
products or services.
(c) Non-Disclosure.
(i) Participant will not, without the Company’s prior written permission, directly or
indirectly, utilize for any purpose other than for a legitimate business purpose solely on behalf
of the Company, or directly or indirectly, disclose to anyone outside of the Company, either during
or after Participant’s relationship with the Company ends, the Company’s Confidential Information,
as long as such matters remain Confidential Information.
(ii) This Agreement shall not prevent Participant from revealing evidence of criminal
wrongdoing to law enforcement or prohibit Participant from divulging the Company’s Confidential
Information by order of court or agency of competent jurisdiction. However, Participant shall
promptly inform the Company of any such situations and shall take such reasonable steps to prevent
disclosure of the Company’s Confidential Information until the Company has been informed of such
requested disclosure and the Company has had an opportunity to respond to the court or agency.
(d) Return of Company Property. Participant agrees that, in the event that
Participant’s service to the Company is terminated for any reason, Participant shall immediately
return all of the Company’s property, including without limitation, (i) tools, pagers, computers,
printers, key cards, documents or other tangible property of the Company, and (ii) the Company’s
Confidential Information in any media, including paper or electronic form, and Participant shall
not retain in Participant’s possession any copies of such information.
(e) Ownership of Software and Inventions. All discoveries, designs, improvements,
ideas, inventions, software, whether patentable or copyrightable or not, shall be
works-made-for-hire and Company shall be deemed the sole owner throughout the universe of any and
all rights of whatsoever nature therein, with the rights to use the same in perpetuity in any
manner the Company determines in its sole discretion without any further payment after the term of
the
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agreement to Participant whatsoever. If, for any reason, any of such results and proceeds
which relate to the business shall not legally be a work-for-hire and/or there are any rights which
do not accrue to the Company under the preceding sentence, then Participant hereby irrevocably
assigns and agrees to quitclaim any and all of Participant’s right, title and interest thereto
including, without limitation, any and all copyrights, patents, trade secrets, trademarks and/or
other rights of whatsoever nature therein, whether or not now or hereafter known, existing,
contemplated, recognized or developed to the Company, and the Company shall have the right to use
the same in perpetuity throughout the universe in any manner the Company determines without any
further payment to Participant whatsoever. Participant shall, from time to time, as may be
reasonably requested by the Company, at the Company’s expense, do any and all things which the
Company may deem useful or desirable to establish or document the Company’s exclusive ownership of
any and all rights in any such results and proceeds, including, without limitation, the execution
of appropriate copyright and/or patent applications or assignments. To the extent Participant has
any rights in the results and proceeds of Participant’s services that cannot be assigned in the
manner described above, Participant unconditionally and irrevocably waives the enforcement of such
rights. Notwithstanding anything to the contrary set forth herein, works developed by the
Participant (i) which are developed independently from the work developed for the Company
regardless of whether such work was developed before or after the Participant performed services
for the Company; or (ii) applications independently developed which are unrelated to the business
and which Participant develops during non-business hours using non-business property shall not be
deemed work for hire and shall not be the exclusive property of the Company.
(f) Non-Competition.
(i) During the time in which Participant performs services for the Company and for a period of
twelve (12) months after the cessation of Participant’s service to the Company, regardless of the
reason, Participant shall not, directly or indirectly, either alone or in conjunction with any
person, firm, association, company or corporation, within the Restricted Area, own, manage,
operate, or participate in the ownership, management, operation, or control of, or be employed by
or provide services to, any entity which is in competition with the Company.
(ii) Notwithstanding anything to the contrary, nothing in this Paragraph (f) prohibits
Participant from being a passive owner of not more than one percent (1%) of the outstanding stock
of any class of a corporation which is publicly traded, so long as Participant has no active
participation in the business of such corporation.
(g) Acknowledgments. Participant acknowledges and agrees that the restrictions
contained in this Agreement with respect to time, geographical area and scope of activity are
reasonable and do not impose a greater restraint than is necessary to protect the goodwill and
other legitimate business interests of the Company and that the Participant has had the opportunity
to review the provisions of this Agreement with his legal counsel. In particular, the Participant
agrees and acknowledges (a) that the Company is currently engaging in business and actively
marketing its services and products throughout the United States, (b) that Participant’s duties and
responsibilities for the Company are co-extensive with the entire scope of the Company’s business,
(c) that the Company has spent significant time and effort developing and protecting the
confidentiality of their methods of doing business, technology, customer lists, long term customer
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relationships and trade secrets, and (d) that such methods, technology, customer lists,
customer relationships and trade secrets have significant value.
(h) Enforcement. The Participant agrees that the restrictions contained in this
Agreement are necessary for the protection of the business, the Confidential Information, customer
relationships and goodwill of the Company and are considered by the Participant to be reasonable
for that purpose and that the scope of restricted activities, the geographic scope and the duration
of the restrictions set forth in the Agreement are considered by the Participant to be reasonable.
The Participant further agrees that any breach of any of the restrictive covenants in the Agreement
would cause the Company substantial, continuing and irrevocable harm for which money damages would
be inadequate and therefore, in the event of any such breach or any threatened breach, in addition
to such other remedies as may be available, the Company shall be entitled to specific performance
and injunctive relief. The Agreement shall not in any way limit the remedies in law or equity
otherwise available to the Company or its Affiliates. The Participant further agrees that to the
extent any provision or portion of the restricted covenants of the Agreement shall be held, found
or deemed to be unreasonable, unlawful or unenforceable by a court of competent jurisdiction, then
any such provision or portion thereof shall be deemed to be modified to the extent necessary in
order that any such provision or portion thereof shall be legally enforceable to the fullest extent
permitted by applicable law. Without limitation to any other remedies available hereunder or at
law, the Participant agrees that any Shares purchased by the Participant pursuant to this Agreement
shall be subject to repurchase by the Company, in its sole discretion, at a price equal to the
exercise price set forth in Section 1 of this Agreement. In the event that the Participant sold
the Shares purchased by the Participant pursuant to this Agreement, then the Participant shall be
required to pay to the Company in cash, within 30 days of a request by the Company for such
payment, the difference between the exercise price set forth in Section 1 of this Agreement and the
price at which the Participant sold the Shares.
(i) Severability; Modification. It is expressly agreed by Participant that:
(i) Modification. If, at the time of enforcement of this Agreement, a court holds
that the duration, geographical area or scope of activity restrictions stated herein are
unreasonable under circumstances then existing or impose a greater restraint than is necessary to
protect the goodwill and other business interests of the Company, Participant agrees that the
maximum duration, scope or area reasonable under such circumstances will be substituted for the
stated duration, scope or area and that the court will be allowed to revise the restrictions
contained herein to cover the maximum duration, scope and area permitted by law, in all cases
giving effect to the intent of the parties that the restrictions contained herein be given effect
to the broadest extent possible; and
(ii) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under
applicable law, such invalidity, illegality or unenforceability will not affect any other
provision, but this Agreement will be reformed, construed and enforced as if such invalid, illegal
or unenforceable provision had never been contained herein.
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(iii) Non-Disparagement. Participant understands and agrees that Participant will not
disparage the Company, its officers, directors, administrators, representatives, employees,
contractors, consultants or customers and will not engage in any communications or other conduct
which might interfere with the relationship between the Company and its current, former, or
prospective employees, contractors, consultants, customers, suppliers, regulatory entities, and/or
any other persons or entities.
(j) Definitions.
(i) Affiliate. “Affiliate” means any entity controlling or controlled by or under common control with the Company or another Affiliate, at the time of execution of the Agreement
and any time thereafter, where “control” is defined as the ownership of at least fifty percent
(50%) of the equity or beneficial interest of such entity, and any other entity with respect to
which the Company has significant management or operational responsibility (even though the Company
may own less than fifty percent (50%) of the equity of such entity).
(ii) Confidential Information. “Confidential Information” as used in this
Agreement shall include the Company’s trade secrets as defined under Illinois law, as well
as any other information or material which is not generally known to the public, and which:
| a) | is generated, collected by or utilized in the operations of the Company’s business and relates to the actual or anticipated business, research or development of the Company; or | ||
| b) | is suggested by or results from any task assigned to Participant by the Company or work performed by Participant for or on behalf of the Company. |
Confidential Information shall not be considered generally known to the public if Participant
or others improperly reveal such information to the public without the Company’s express
written consent and/or in violation of an obligation of confidentiality to the Company.
Examples of Confidential Information include, but are not limited to, all customer, client,
supplier and vendor lists, budget information, contents of any database, contracts, product
designs, technical know-how, engineering data, pricing and cost information, research and
development work, software, business plans, proprietary data, projections, market research,
perceptual studies, strategic plans, marketing information, financial information (including
financial statements), sales information, training manuals, employee lists and compensation of
employees, and all other competitively sensitive information with respect to the Company,
whether or not it is in tangible form, and including without limitation any of the foregoing
contained or described on paper or in computer software or other storage devices, as the same
may exist from time to time.
(iii) Restricted Area. For purposes of this Agreement, the term “Restricted Area”
shall mean the United States of America.
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7. Applicable Law.
This Agreement shall be construed, interpreted and enforced, and its validity and
enforceability determined, strictly in accordance with the laws of the State of Delaware without
applying its conflicts of laws principles.
8. Exclusive Jurisdiction/ Venue.
All disputes that arise from or relate to this Agreement shall be decided exclusively by
binding arbitration in Xxxx County, Illinois under the Commercial Arbitration Rules of the American
Arbitration Association (the “Rules”). The parties agree that the arbitrator’s award shall be
final, and may be filed with and enforced as a final judgment by any court of competent
jurisdiction. Notwithstanding the foregoing, any disputes related to the enforcement of the
restrictive covenants contained in Section 6 of this Agreement shall be subject to and determined
under Delaware law and adjudicated in Illinois courts.
9. Provisions of the Plan.
This option is subject to the provisions of the Plan (including the provisions relating to
amendments to the Plan), a copy of which is furnished to the Participant with this option.
IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.
| Accretive Health, Inc. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
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PARTICIPANT’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 2010 Stock
Incentive Plan.1
| PARTICIPANT: |
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| Address: | ||||
| 1 | If the Participant resides in a community property state, it is desirable to have the Participant’s spouse also accept the option by signature here. The following are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. Although Wisconsin is not formally a community property state, it has laws governing the division of marital property similar to community property states and it may be desirable to have a Wisconsin Participant’s spouse also accept the option. In addition, if the Company is granting an option to a California Participant, it must comply with California blue sky rules which require modification to this option. |
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