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Exhibit 4.1
HEALTHCARE COMPARE CORP.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of January,
1997, by and between HEALTHCARE COMPARE CORP., a Delaware corporation (the
"Company"), and XXXXX X. XXXXX (the "Employee").
WHEREAS, the Employee is a valued employee of the Company and the Company
wishes to induce him to enter into an employment agreement dated as of January
1, 1997 (the "Employment Agreement") and to encourage him in the performance of
his duties thereunder by granting him an option to purchase shares of common
stock, $.01 par value, of the Company (the "Common Stock"); and
WHEREAS, the Employee wishes to acquire the right to purchase shares of
Common Stock.
NOW, THEREFORE, for good and valuable consideration, the parties hereto,
intending to be legally bound, hereby agrees as follows:
1. Grant of Option; Exercise Price. Subject to the provisions of Section
2 hereof, the Company hereby grants to the Employee effective as of the date
hereof the right, privilege and option to purchase on the terms and conditions
hereinafter set forth up to 200,000 shares of Common Stock at a purchase price
of $44.49 per share (the "Option"). The Option is intended to be an "Incentive
Stock Option" as defined in and subject to the provisions of Section 422A of
the Internal Revenue Code of 1986, as amended (the "Code"), to the extent
permitted by the Code, and a nonstatutory option with respect to the balance.
2. Time for Exercise of Option. Subject to the provisions of paragraphs 3
and 8 hereof, the Option may be exercised by the Employee from time to time, in
whole or in part, beginning on December 31, 1998 and ending on March 31, 1999
or within such shorter period as is provided in paragraph 3 hereof.
3. Termination of Employment.
(a) If the Employee's employment by the Company is terminated by the
Company without cause, then, notwithstanding the provisions of paragraph 2 of
this Agreement, upon such termination of employment, the Option shall become
exercisable in full and the Employee may, for a period of 90 days following
such termination (but before expiration of the original exercise period),
exercise the Option in whole or in part.
(b) If (i) the Employee's employment by the Company is terminated due to
the death or Incapacity (as defined in the Employment Agreement) of the
Employee and (ii) pursuant to paragraph 2 hereof the Option has theretofore
vested or is scheduled to vest within 90 days
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following the date of such termination of employment, the Employee or his
legal representative may, for a period of 90 days following such termination
(but before expiration of the original exercise period), exercise the Option,
in whole or in part.
(c) If (i) the Employee's employment by the Company is terminated
voluntarily by the Employee and (ii) pursuant to paragraph 2 hereof the Option
has theretofore vested, the Employee may, for a period of 30 days after the
date of termination (but before expiration of the original exercise period),
exercise the Option, in whole or in part.
(d) If the Employee's employment by the Company is terminated by the
Company for cause (as such term is defined in the Employment Agreement), the
Option shall terminate on the date on which the Employee's employment is
terminated, and the Employee shall have no further rights hereunder.
(e) The Employee acknowledges and understands that certain exercises of
the Option pursuant to this paragraph 3 may cause disqualification of the
Option as an Incentive Stock Option.
4. Method of Exercise. The Option may be exercised by written notice (the
"Notice"), addressed and delivered to the Company (Attention: Chief Financial
Officer), specifying the number of shares of Common Stock to be purchased and
accompanied by (i) a check, or (ii) that number of shares of Common Stock which
have an aggregate fair market value as of the date of exercise equal to the
exercise price, or (iii) any combination thereof. For purposes of this
Agreement, "fair market value" of a share of Common Stock shall mean: (i) if
the Common Stock is traded on a national stock exchange on the date of exercise
of the Option, fair market value shall be the closing price reported by the
applicable composite transactions report on such day, or if the Common Stock is
not traded on such date, the mean between the closing bid-and-asked prices
thereof on that date on such exchange; (ii) if the Common Stock is traded
over-the-counter and is classified as a national market issue on the date of
exercise of the Option, fair market value shall be the last reported
transaction price quoted by the NASDAQ on that day; (iii) if the Common Stock
is traded over-the-counter and is not classified as a national market issue on
the date of exercise of the Option, fair market value shall be the mean between
the last representative bid-and-asked prices quoted by the NASDAQ on that day;
or (iv) if none of the foregoing provisions is applicable, fair market value as
of the date of exercise of the Option shall be determined by the Board of
Directors in good faith on such basis as it deems appropriate. In all cases,
the determination of fair market value shall be binding and conclusive on all
persons.
5. Delivery of Stock Certificates. The Option shall be deemed to have
been exercised upon receipt by the Company of the Notice accompanied by the
exercise price (the "Exercise Date"). The certificate representing the shares
of Common Stock purchased upon exercise of the Option shall be issued as of the
Exercise Date and delivered by the Company to the Employee free and clear of
all claims, liens and encumbrances, within five days following the Exercise
Date or as soon thereafter as practicable. As a condition to the exercise of
the
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Option, the Company may require the Employee to represent and warrant at the
time of any such exercise that the shares of Common Stock are being purchased
for investment purposes only, for the account of the Employee and without any
intention to distribute such shares. If the shares of Common Stock issuable
upon exercise of the Option have not previously been registered under the
Securities Act of 1933, as amended, each certificate evidencing shares of
Common Stock acquired upon exercise of the Option shall contain on its face, or
on the reverse side thereof, the following legend:
"These shares have not been registered under the Securities Act of
1933 or under any applicable state law. They may not be offered
for sale, sold, transferred, or pledged without (1) registration
under the Securities Act of 1933 and any applicable state law, or
(2) an opinion (satisfactory to the corporation) that registration
is not required."
6. Registration of Shares Subject to the Option. On or before December
31, 1998, the Company will use its best efforts to:
(i) prepare and file with the Securities and Exchange
Commission ("SEC") a registration statement with respect to the
shares of Common Stock issuable upon exercise of the Option and
use its best efforts to cause such registration statement to
become effective under the Securities Act;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such
registration statement effective until the earlier to occur of (A)
the expiration of the Option or (B) the exercise of the Option in
whole.
7. Adjustment Provisions. If, during the term of this Agreement, there
shall be any stock dividend, stock rights distribution, stock split,
recapitalization, merger, consolidation, sale of assets, reorganization or
other similar change or transaction of or by the Company, an appropriate
adjustment shall be made to the number and kind of shares remaining to be
acquired upon exercise of the Option and to the exercise price of the Option so
that the value to be received by the Employee upon exercise of the Option
shall, in the aggregate, be the same as if none of the foregoing transactions
had occurred.
8. Merger, Consolidation or Sale of Assets. In the event the Company
enters into an agreement providing for (i) the sale of all or substantially all
of the assets of the Company or (ii) a merger, consolidation or reorganization
which would result in the stockholders of the Company immediately prior to such
transaction owning less than 50% of the surviving corporation, the Option shall
become exercisable in full without regard to any vesting limitations, and the
Employee shall be entitled, commencing at least ten days prior to the effective
date of such transaction, to exercise the Option in whole or in part, to the
extent not previously exercised.
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9. Withholding Obligations. In the event that the Company is required to
satisfy withholding obligations under the Code as a result of the exercise of
the Option, the Employee may request that, in lieu of withholding amounts from
the Employee's paycheck or requiring that the Employee deliver a check in the
amount of the withholding obligation, the Company withhold that number of
shares of Common Stock which have a fair market value (determined in accordance
with the provisions of paragraph 5 hereof) on the Exercise Date equal to the
amount required to be withheld.
10. Non-Transferability. The Option is not transferable or assignable by
the Employee other than by will or by the laws of descent and distribution and
are exercisable during the lifetime of the Employee only by the Employee.
11. Compliance with Law. By accepting the Option, the Employee agrees for
himself and his legal representative that the Company shall not be required to
deliver any shares of Common Stock upon the exercise of the Option until such
shares have been qualified for delivery under applicable securities laws and
regulations as determined by the Company or its legal counsel.
12. Rights as a Stockholder; Not an Employment Agreement. The Employee
shall have no rights as a stockholder of the Company with respect to shares of
Common Stock subject to the Option until the Option has been exercised and
payment made as herein provided and certificates representing the shares as to
which the Option has been exercised have been delivered to the Employee.
Nothing contained in this Agreement shall be construed to be a contract of
employment between the Company and the Employee.
13. Construction.
(a) Successors. This Agreement and all the terms and provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs and successors, except as
expressly herein otherwise provided.
(b) Entire Agreement; Modification. This Agreement contains the entire
understanding between the parties with respect to the matters referred to
herein and such agreement shall not be modified, except by written instrument
signed by the parties hereto.
(c) Headings; Pronouns; Governing Law. The descriptive headings of the
respective sections and subsections of this Agreement are inserted for
convenience of reference only and shall not be deemed to modify or construe the
provisions which follow them. Any use of any masculine pronoun shall include
the feminine and vice-versa and any use of a singular, the plural and
vice-versa, as the context and facts may require. The construction and
interpretation of this Agreement shall be governed in all respects by the laws
of the State of Delaware.
(d) Notices. All communications between the parties shall be in writing
and shall be deemed to have been duly given as of the date and time of hand
delivery or three days after
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mailing via certified or registered mail, return receipt requested, proper
postage prepaid to the following or such other addresses of which the parties
shall from time to time notify one another:
If to the Company: HealthCare COMPARE Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
If to the Employee: Xxxxx X. Xxxxx
HealthCare COMPARE Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
(e) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the minimal extent of
such provision or the remaining provisions of this Agreement or the application
of such provision to other parties or circumstances.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as of the date first above written.
HEALTHCARE COMPARE CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
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Chairman of the Board
EMPLOYEE:
/s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
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