EXHIBIT 10.12
STOCK OPTION AGREEMENT (the "Agreement") dated as of January 7, 1998
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between SYNETIC, INC., a Delaware corporation (the "Company"), and the other
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party signatory hereto (the "Participant").
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WHEREAS, the Participant was previously granted options (the "Original
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Options") to purchase the Company's common stock, par value $.01 per share (the
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"Common Shares"), pursuant to an option agreement dated as of January 23, 1997
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(the "Original Option Agreement") under the Company's 1997 Class D Stock Option
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Plan (the "Plan").
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WHEREAS, the Company desires to cancel the Original Options and to grant
the Participant, upon the terms and subject to the conditions hereinafter set
forth, the number of nonqualified stock options (the "Options") specified at
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the foot of the signature page hereof;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Definitions; Incorporation of Plan Terms. Capitalized terms
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used herein without definition shall have the meanings assigned to them in the
Plan, a copy of which is attached hereto. This Agreement, the Options and the
Common Shares issued pursuant to the exercise of Options shall be subject to the
Plan, the terms of which are hereby incorporated herein by reference, and in the
event of any conflict or inconsistency between the Plan and this Agreement, the
Plan shall govern. The Date of Grant with respect to the Options shall be the
date specified at the foot of the signature page hereof.
2. Certain Restrictions. None of the Options may be sold,
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transferred, assigned, pledged, or otherwise encumbered or disposed of, except
by will or the laws of descent and distribution. During the Participant's
lifetime, an Option shall be exercisable only by the Participant or by the
Participant's guardian of legal representative. Each Transferee of an Option by
will or the laws of descent and distribution shall, as a condition to the
transfer thereof, execute an agreement pursuant to which it shall become a
party to this Agreement.
3. Grant of Options; Effectiveness. Subject to the terms and
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conditions contained herein and in the Plan, the Company hereby grants to the
Participant, effective as of the Date of Grant, the number of 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, one Common Share. The Options shall be exercisable
as hereinafter provided.
4. Terms and conditions of Options. The Options evidenced hereby
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are subject to the following terms and conditions:
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(a) Vesting. The Participant's Options shall vest and become exercisable
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in accordance with the following schedule:
Anniversary of
Date of Grant (a % of Option
"Scheduled Vesting Exercisable (on a
Date") Cumulative Basis)
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1st 0%
2nd 40%
3rd 60%
4th 80%
5th 100%
(b) Option Period. The Options shall not be exercisable following the
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tenth anniversary of the Date of Grant, and shall be subject to earlier
termination as provided herein and in the plan.
(c) Notice of Exercise. Subject to Sections 4(d), 4(f) and 6(b) hereof,
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the Participant may exercise any or all of the Vested Options by giving written
notice to the Vice President of Finance of the Company at its principal business
office. The date of exercise of an Option shall be the later of (i) the date on
which the Committee receives such written notice or (ii) the date on which the
conditions provided in Sections 4(d), 4(f) and 6(b) hereof are satisfied.
(d) Payment. Prior to the issuance of certificate pursuant to Section
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4(g) hereof evidencing Common Shares, (i) the Participant shall have paid to the
Company the Option Price of all Option Shares purchased pursuant to exercise of
such Options, in cash or by certified or official bank check and (ii) the
Participant shall have satisfied all outstanding indebtedness and liabilities of
the Participant to the Company, CareAgents, Inc. ("CareAgents") or any of their
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respective Affiliates, unless otherwise determined by the Committee in its sole
discretion.
(e) Shareholder Rights. The Participant shall have no rights as a
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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 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.
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(f) Limitation on Exercise. An Option shall be not exercisable
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unless and until (i) a registration statement under the Securities Act has been
duly filed and declared effective pertaining to the Common Shares subject to
such Option and such Common Shares shall have been qualified under applicable
state "blue sky" laws, or (ii) the Committee in its sole discretion determines
that such registration and qualification is not required as a result of the
availability of an exemption from such registration and qualification under such
laws. The Company shall use all reasonable efforts to file a registration
statement with the Securities and Exchange Commission on Form S-8 with respect
to the Common Shares subject to an Option on or prior to the date on which such
Option becomes exercisable. The Company shall have no obligation to issue any
Common Shares pursuant to the exercise of an Option if the Company reasonably
determines at the time of such exercise that the issuance of Common Shares at
such time would violate applicable law with respect to xxxxxxx xxxxxxx or
otherwise, or then existing policies of the Company applicable to employees of
the Company or its Affiliates holding options to purchase Common Shares.
(g) Issuance of Certificate. As soon as practicable following the
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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.
(h) Termination of Employment. Upon termination of the Participant's
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employment with the Company and its Affiliates, the Participant (or the
Participant's estate) may exercise any Vested Option in accordance with, and
subject to the terms and conditions of, Section 8 of the Plan. In the event
that a Participant's employment with the Company or any of its Affiliates
terminates for any 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.
5. Representations and Warranties. The Participant is aware of and
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familiar with the restrictions imposed on the transfer of any Options. The
Participant represents that this Agreement has been duly executed and delivered
by the Participant and constitutes a legal, valid and binding agreement of the
Participant, enforceable against the Participant 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. It shall be a further condition to the Company's
obligation to issue and deliver to the Participant certificates for Common
Shares upon exercise of an Option that the Participant deliver to the Company in
writing a representation that the Participant is exercising such Option for his
own account and, unless the Common Shares are then registered under the
Securities Act, for investment only and not with a view to distribution and that
the Participant will not make any sale, transfer or other disposition of any
Common Shares purchased except (i) pursuant to the registration thereof under
the Securities Act, (ii) pursuant to an opinion of counsel satisfactory in form
and substance to the Company that the sale,
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transfer or other disposition may be made without registration, or (iii)
pursuant to a "no-action" letter from the Securities and Exchange Commission.
The Participant has been advised and understands that the Common Shares must be
held indefinitely unless they are registered for resale under the Securities Act
or an exemption from registration is available.
6. Miscellaneous.
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(a) No Rights to Grants or Continued Employment. The Participant
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shall not have any claim or right to receive grants of Options under the Plan.
Neither the Plan nor this Agreement nor any action taken or omitted to be taken
hereunder or thereunder shall be deemed to create or confer on the Participant
any right to be retained in the employ of the Company, CareAgents or any of
their respective Affiliates, or to interfere with or to limit in any way the
right of the Company, CareAgents or any of their respective Affiliates to
terminate the employment of the Participant at any time. The Participant shall
have no rights in the benefits conferred by the Option or in any Common Shares
except to the extent the Option is exercised while vested and exercisable and
otherwise in accordance with the terms of this Agreement. Termination of the
Option by reason of cessation of employment shall not give rise to any claim for
damages by the Participant under this Agreement and shall be without prejudice
to any rights or remedies which the Company, CareAgents or any of their
respective Affiliates may have against the Participant.
(b) Tax Withholding. The Company, CareAgents and their respective
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Affiliates 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
federal, state or local tax withholding requirements. With the consent of the
Committee in its sole discretion, prior to the Company's determination of such
withholding liability, the Participant may 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. Such election may be denied by the Committee in its sole
discretion, or may be made subject to certain conditions specified by the
Committee, including, without limitation, conditions intended to avoid the
imposition of liability against the Participant under Section 16(b) of the
Exchange Act.
(c) No Restriction on Right of Company to Effect Corporate Changes.
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Neither the Plan nor this Agreement shall 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
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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.
(d) Notice of Exercise. Notwithstanding any other provision of this
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Agreement, the Company may, from time to time, require reasonable notice of the
Participant's intent to exercise all or a portion of the Option in order for the
Company to comply with any applicable securities laws, including, without
limitation, Regulation M under the Exchange Act. The Company shall not be liable
for any adverse change in the market value of the Common Shares during any such
notice period.
7. Survival.
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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 by will or the laws of descent and
distribution. 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
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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, 000
Xxxxx Xxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx 00000-0000, Telecopier No.: (201)
703-3401, Attention: Vice President of Finance. 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
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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. Acknowledgment of Cancellation. The Participant hereby
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acknowledges that (i) the Original Options are hereby cancelled without any
payment made therefor, (ii) this Agreement supersedes the Original Option
Agreement in its entirety, and (iii) this Agreement
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shall be the "Option Agreement" referred to in the Employment Agreement dated as
of January 23, 1997 between the Company and the Participant (the "Employment
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Agreement"). Without limiting the generality of the foregoing, the Participant
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hereby acknowledges that the proviso in Section 4(h) of the Original Option
Agreement relating to the consequence of certain terminations of the
Participant's employment is deleted and of no further force and effect.
11. Entire Agreement: Governing Law. This Agreement and the other
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related agreements expressly referred to herein set forth the entire agreement
and understanding between the parties hereto and supersede all prior agreements
and understandings relating to the subject matter hereof (including, without
limitation, the Original Option Agreement and Section 5.1 of the Employment
Agreement). 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.
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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.
SYNETIC, INC.
By: /s/ Xxxxxxx Xxxxx
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Name:
Title:
PARTICIPANT
/s/ Xxxxx X. Xxxxxxxxx
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Name: Xx. Xxxxx X. Xxxxxxxxx
Number of Options: 272,728
Option Price: $36.875
Date of Grant: January 7, 1998
