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EXHIBIT 10.14
MEDIRISK, INC.
1996 NON-MANAGEMENT DIRECTORS STOCK OPTION PLAN
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MEDIRISK, INC.
NON-MANAGEMENT DIRECTORS' STOCK OPTION PLAN
THIS INDENTURE is made as of the 28th day of October, 1996, by Medirisk,
Inc., a corporation organized and doing business under the laws of the State of
Delaware (the "Company").
1. Purpose.
The Company adopts the Medirisk, Inc. Non-Management Directors Stock
Option Plan (the "Plan") to secure and retain the services of those directors
of the Company who are not employed by the Company or any of its affiliates
(the "Eligible Optionees") by giving them an opportunity to invest in the
future success of the Company.
2. Administration.
The Board of Directors of the Company (the "Board of Directors") shall
appoint at least two of its members to a committee (the "Committee") that will
administer the Plan on behalf of the Company.
Each member of the Committee shall serve at the pleasure of the Board of
Directors, which may fill any vacancy, however caused, in the Committee. The
Committee shall select one of its members as a chairman and shall hold meetings
at the times and in the places as it may deem advisable. All actions the
Committee takes shall be made by majority decision. Any action evidenced by a
written instrument signed by all of the members of the Committee shall be as
fully effective as if the Committee had taken the action by majority vote at a
meeting duly called and held.
The Committee shall have complete and conclusive authority to (1)
interpret the Plan, (2) prescribe, amend, and rescind rules and regulations
relating to it, and (3) make all other determinations necessary or advisable
for the administration of the Plan. The Committee's determinations on these
matters shall be conclusive.
In addition to any other rights of indemnification that they may have as
directors of the Company or as members of the Committee, the directors of the
Company and members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of action taken or failure to act under or in
connection with the Plan or any Option granted thereunder, and against all
amounts paid by them in settlement thereof (provided the settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any action, suit or proceeding, except in
relation to matters as to which it shall be
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adjudged in the action, suit or proceeding that the director or Committee
member is liable for negligence or misconduct in the performance of his duties.
3. Grant of Options.
(a) Initial Grants. Each Eligible Optionee serving as a member of the
Board of Directors on the Effective Date (as defined in Section 6 below) shall
be granted an option as of the Effective Date to purchase Ten Thousand (10,000)
shares of common stock, par value $0.001 per share, of the Company (the
"Stock").
(b) Initial Grants Upon Appointment to the Board of Directors. Each
Eligible Optionee who is first elected or appointed to serve as a member of the
Board of Directors following the Effective Date shall be granted an option as
of the first business day following the Eligible Optionee's first day of
service as a member of the Board of Directors to purchase Ten Thousand (10,000)
shares of Stock.
(c) Subsequent Grants During Tenure as a Director. Each Eligible Optionee
shall be granted as of the last business day of each fiscal year of the Company
following the Effective Date an option to purchase Five Thousand (5,000) shares
of Stock; provided the Eligible Optionee continues to serve as a member of the
Board of Directors as of the last business day of that fiscal year.
(d) Conditions to Grants. Each Eligible Optionee shall be granted an
option to purchase that number of shares of Stock equal to the number of
previously owned Shares tendered in payment of the exercise price for each
Share purchased pursuant to an Option granted hereunder, provided that the
Eligible Optionee is serving as a member of the Board of Directors on the date
of exercise. No options under the Plan shall be granted to an Eligible
Optionee who is otherwise precluded from receiving a grant of the Company's
equity securities. In the event the remaining number of shares of Stock
reserved for issuance under the Plan are insufficient to grant options for the
appropriate number of shares of Stock to all Eligible Optionees as of any grant
date, then no options shall be granted as of that grant date.
4. Stock Subject to Plan.
The Company has authorized and reserved for issuance upon the exercise of
options pursuant to the Plan an aggregate of One Hundred Thousand (100,000)
shares of Stock. If any option is cancelled, expires or terminates without the
respective optionee exercising it in full, options with respect to those
unpurchased shares of Stock may be granted to that same optionee or to another
eligible individual or individuals under the terms of this Plan.
The Committee shall adjust the total number of shares of Stock reserved
for issuance under the Plan and any outstanding options, both as to the number
of shares Stock and the option price, for any increase or decrease in the
number of outstanding
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shares of Stock resulting from a stock split or a payment of a stock dividend
on the Stock, a subdivision or combination of the Stock, a reclassification of
the Stock, a merger or consolidation of the Stock or any other like changes in
the Stock or in their value; provided that any such adjustment shall be made in
a manner consistent with the reason for the adjustment and shall be effected
uniformly among optionees. Outstanding options shall not be adjusted for cash
dividends or the issuance of rights to subscribe for additional stock or
securities of the Company.
Upon the consummation of a Change in Control, any unexpired Option may be
exercised whether or not vested; provided, however, that each optionee shall be
mailed notice of such Change in Control at least thirty-five (35) days prior to
the event and the optionee shall have thirty (30) days after the Change in
Control to exercise any unexpired option rights granted hereunder to the extent
they are then exercisable. For purposes of the Plan, the term Change in
Control means the first to occur of the following events:
(i) any person (as defined in Section 3(a)(9) of the Exchange Act
and as used in Sections 13(d) and 14(d) thereof), excluding the Company,
any Subsidiary and any employee benefit plan sponsored or maintained by
the Company or any Subsidiary (including any trustee of such plan acting
as trustee thereof), but including a 'group' as defined in Section
13(d)(3) of the Exchange Act (a "Person"), becomes the beneficial owner
of shares of the Company having at least thirty percent (30%) of the
total number of votes that may be cast for the election of directors of
the Company (the "Voting Shares") (such 30% or greater percentage
hereinafter referred to as the "Voting Share Percentage"); provided that
no Change of Control will occur as a result of an acquisition of stock by
the Company which increases, proportionately, the stock representing the
voting power of the Company owned by such person or group above the
Voting Share Percentage, and provided further that if such person or
group acquires stock representing more than the Voting Share Percentage
by reason of share purchases by the Company, and after such share
purchases by the Company acquires any additional shares representing
voting power of the Company, then a Change of Control shall occur;
(ii) the stockholders of the Company shall approve any merger or
other business combination of the Company, sale of the Company's assets
or combination of the foregoing transactions (a "Transaction") other than
a Transaction involving only the Company or one or more of its
Subsidiaries, or a Transaction immediately following which the
stockholders of the Company immediately prior to the Transaction continue
to have a majority of the voting power in the resulting entity excluding
for this purpose any stockholder owning directly or indirectly more than
ten percent (10%) of the shares of the other company involved in the
merger; or
(iii) within any 24-month period beginning on or after the Effective
Date, the persons who were directors of the Company immediately
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before the beginning of such period (the "Incumbent Directors") shall
cease (for any reason other than death) to constitute at least a majority
of the Board of Directors or the board of directors of any successor to
the Company, provided that any director who was not a director as of the
Effective Date shall be deemed to be an Incumbent Director if such
director was elected to the Board of Directors by, or on the
recommendation of or with the approval of, at least two-thirds of the
directors who then qualified as Incumbent Directors either actually or by
prior operation of this clause (iii); and provided further that any
director elected to the Board of Directors to avoid or settle a
threatened or actual proxy contest shall in no event be deemed to be an
Incumbent Director.
If the successor corporation under any of the events described above
agrees to assume the outstanding options and in connection with the assumption
of the outstanding options to substitute substantially equivalent options, then
the outstanding options will not terminate but will remain exercisable in
accordance with the stock option agreements granting such options
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Committee in its sole discretion. Any
adjustment may provide for the elimination of any fractional share of Stock
which might otherwise become subject to an option.
The grant of an option shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations, or changes
in its capital or business structure, or to merge, consolidate, dissolve,
liquidate, sell or transfer all or any part of its business or assets.
5. Terms and Conditions of All Options.
Each option granted pursuant to the Plan shall be evidenced by a stock
option agreement or other appropriate documentation (the "Agreement") in the
form and containing the terms and conditions as the Committee from time to time
may determine, provided that each Agreement will:
(a) state an exercise price per share which will be the fair market
value of a share of Stock on the date of the grant;
(b) state the terms and conditions for payment, except as otherwise
provided by Plan Section 7;
(c) state that the option shall expire on the earlier of the tenth
anniversary of the date of grant or the first anniversary of the date
that the optionee ceases to serve as a member of the Board of Directors;
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(d) provide that an option granted pursuant to Section 3(a) or (b)
above shall become exercisable as to the shares subject thereto in equal
one-third increments as of the first, second and third anniversaries
following the date of grant; provided, however, any such option shall
become exercisable immediately in full upon the later of: (1) six (6)
months following the date of grant; or (2) the earlier of (i) the death
of the optionee, or (ii) the disability (as defined in Section 72(m)(7)
of the Internal Revenue Code of 1986, as amended (the "Code")) of the
optionee;
(e) provide that an option granted pursuant to Section 3(c) above
shall become exercisable as to the shares subject thereto in equal
one-third increments as of the first, second and third anniversaries of
the date of grant; provided, however, any such option shall become
exercisable immediately in full upon the later of (1) six (6) months
following the date of grant; or (2) the earlier of (i) the death of the
optionee, or (ii) the disability (as defined in Section 72(m)(7) of the
Code) of the optionee;
(f) provide that the option is not transferable by the optionee
other than as provided by (1) the will of the optionee, or (2) the
applicable laws of descent and distribution, and is exercisable during
the optionee's lifetime only by the optionee except as provided in
Subsection (g) below; and
(g) provide that if an optionee dies or becomes disabled (as defined
in Code Section 72(m)(7)) during the term of the option, the option may
be exercised by the optionee or (to the extent the optionee would have
been entitled to do so) by a legatee or legatees of the optionee under
his last will, or by his guardian.
6. Term of Plan.
The effective date of the Plan is the date on which the stockholders of
the Company approve the Plan (the "Effective Date"). The Plan shall terminate
10 years after that date, subject to Plan Section 11.
7. Exercise of Option.
The optionee may purchase shares of Stock subject to an option (the
"Shares") only upon receipt by the Company of a notice in writing from the
optionee of his intent to purchase a specific number of Shares and which notice
contains such representations regarding compliance with the federal and state
securities laws as the Committee may reasonably request. The purchase price
shall be paid in full upon the exercise of an option and no Shares shall be
issued or delivered until full payment therefor has been made. Payment of the
purchase price for all Shares purchased pursuant to the exercise of an option
shall be made, at the discretion of the optionee, as follows:
(a) by payment of cash or certified check;
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(b) by delivery to the Company of a number of shares of common stock
of the Company which have been owned by the optionee for at least six
months prior to the date of the option's exercise, having a fair market
value on the date of exercise, as determined by the Committee in its sole
discretion, either equal to the purchase price or in combination with
cash to equal the purchase price; or
(c) by receipt of the purchase price in cash from a broker, dealer
or other "creditor" as defined by Regulation T issued by the Board of
Governors of the Federal Reserve System following delivery by the
optionee to the Committee of instructions in a form acceptable to the
Committee regarding delivery of such broker, dealer or other creditor of
that number of shares of common stock with respect to which the option is
exercised.
Until stock certificates reflecting the Shares accruing to the optionee
upon the exercise of the option are issued to the optionee, the optionee shall
have no rights as a stockholder with respect to the Shares. The Company shall
make no adjustment to the Shares for any dividends or distributions or other
rights for which the record date is prior to the issuance of that stock
certificate, except as the Plan otherwise provides.
8. Assignability.
Except as Plan Section 5 permits, no option or any of the rights and
privileges thereof accruing to an optionee shall be transferred, assigned,
pledged or hypothecated in any way whether by operation of law or otherwise,
and no option, right or privilege shall be subject to execution, attachment or
similar process.
9. No Right to Continued Service.
No provision in the Plan or any option shall confer upon any optionee any
right to continue performing services for or to interfere in any way with the
right of the stockholders of the Company to remove such optionee as a director
of the Board of Directors at any time for any reason.
10. Amendment and Termination.
The Board of Directors at any time may amend or terminate the Plan without
stockholder approval; provided, however, that the Board of Directors may
condition any amendment on the approval of the stockholders of the Company if
such approval is necessary or advisable with respect to tax, securities (which
require such approval for a material increase of the number of shares of Stock
subject to options, and for material modifications to the eligibility
requirements of the Plan, among others) or other applicable laws to which the
Company, the Plan, optionees or Eligible Optionees are subject.
Notwithstanding the foregoing, in no event shall the Board of Directors amend
the Plan more than once every six (6) months, other than to comport with
changes in the Code, the
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Employee Retirement Income Security Act of 1974, or the rules thereunder. No
amendment or termination of the Plan shall adversely affect the rights of an
optionee with regard to his options without his consent.
11. General Restriction.
Each option is subject to the condition that if at any time the Company,
in its discretion, shall determine that the listing, registration or
qualification of the shares of Stock covered by such option upon any securities
exchange or under any state or federal law is necessary or desirable as a
condition of or in connection with the granting of such option or the purchase
or delivery of shares of Stock thereunder, the delivery of any or all shares of
Stock pursuant to such option may be withheld unless and until such listing,
registration or qualification shall have been effected. If a registration
statement is not in effect under the Securities Act of 1933 or any applicable
state securities laws with respect to the shares of Stock purchasable or
otherwise deliverable under the option then outstanding, the Company may
require, as a condition of exercise of any option or as a condition to any
other delivery of shares of Stock pursuant thereto, that the optionee or the
optionee's representative represent, in writing, that the shares of Stock
received pursuant to the option are being acquired for investment and not with
a view to distribution and agree that the shares of Stock will not be disposed
of except pursuant to an effective registration statement, unless the Company
shall have received an opinion of counsel that such disposition is exempt from
such requirement under the Securities Act of 1933 and any applicable state
securities laws. The Company may endorse on certificates representing shares
of Stock delivered pursuant to an option such legends referring to the
foregoing representations or restrictions or any other applicable restrictions
on resale as the Company, in its discretion, shall deem appropriate.
12. Choice of Law.
The laws of the State of Georgia shall govern the Plan.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed in the
form and as of the date set forth above.
MEDIRISK, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Title: Vice President
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