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EXHIBIT 10.3
THE TRIZETTO GROUP, INC.
1998 STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "OPTION Agreement")
dated as of the ___ day of ________, _____, by and between THE TRIZETTO GROUP,
INC., a Delaware corporation (the "CORPORATION"), and ________________________
(the "PARTICIPANT").
R E C I T A L S
WHEREAS, the Corporation has adopted The Trizetto Group, Inc.
1998 Stock Option Plan (the "PLAN"); and
WHEREAS, pursuant to Section 2 of the Plan, the Corporation has
granted to the Participant effective as of the ___ day of __________, _____ (the
"AWARD DATE") a stock option to purchase all or any part of ______ shares of the
Corporation's Common Stock, par value $.001 per share (the "COMMON STOCK"),
subject to and upon the terms and conditions set forth in this Option Agreement
and in the Plan; and
WHEREAS, such option has been granted by the Corporation to the
Participant in addition to, and not in lieu of, any other form of compensation
otherwise payable or to be paid to the Participant;
NOW, THEREFORE, in consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom, the
parties agree as follows:
SECTION 1. DEFINED TERMS.
Capitalized terms used herein and not otherwise defined herein shall
have the meaning assigned to such terms in the Plan.
SECTION 2. GRANT OF OPTION.
This Option Agreement evidences the Corporation's grant to the
Participant of the right and option to purchase, subject to and on the terms and
conditions set forth in this Option Agreement and in the Plan, all or any part
of ______ shares of the Common Stock (the "SHARES") at the price of $____ per
Share (the "OPTION"), exercisable from time to time, subject to the provisions
of this Option Agreement and the Plan, prior to the close of business on the day
before the tenth anniversary of the Award Date (the "EXPIRATION DATE"). Such
price equals not less than the Fair Market Value of the Shares on the Award
Date. It is the intent of the Corporation that the Option constitute a
nonqualified stock option and not be deemed to be an incentive stock option
within the meaning of Section 422 of the Code.
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SECTION 3. EXERCISABILITY OF OPTION.
Except as otherwise provided in the Plan or in any resolution of the
Committee adopted after the date hereof, the Option shall become vested and
exercisable [at the time or times set forth in Section 2.3.1 of the Plan.]
To the extent that the Option is vested and exercisable, if the
Participant does not in any year purchase all or any part of the Shares to which
the Participant is entitled, the Participant has the right cumulatively
thereafter to purchase any Shares not so purchased and such right shall continue
until the Option terminates or expires. The Option shall only be exercisable in
respect of whole shares, and fractional share interests shall be disregarded.
The Option may only be exercised as to at least 100 shares unless the number
purchased is the total number at the time available for purchase under the
Option.
SECTION 4. METHOD OF EXERCISE OF OPTION.
The Option shall be exercisable by the delivery to the Secretary of
the Corporation of a written notice stating the number of Shares to be purchased
pursuant to the Option and accompanied by (i) delivery of an executed EXERCISE
AGREEMENT in the form attached hereto as EXHIBIT I and (ii) payment made in
accordance with and in a form permitted by Section 2.2 of the Plan for the full
purchase price of the Shares to be purchased, subject to such further
limitations and rules or procedures as the Committee may from time to time
establish as to any non-cash payment and as to the tax withholding requirements
of Section 3.5 of the Plan. Subject to the consent of the Committee at the time
of exercise, the purchase price may be paid in full or in part by a note meeting
the requirements of Section 2.2.3 of the Plan or by shares of Common Stock
already owned by the Participant; provided, however, that any shares delivered
which were initially acquired upon exercise of a stock option must have been
owned by the Participant for at least six months before the date of exercise.
Shares used to satisfy the exercise price of the Option shall be valued at their
Fair Market Value on the exercise date. In addition, the Participant (or the
Participant's Beneficiary or Personal Representative) must furnish any written
statements required pursuant to Section 3.4 of the Plan.
SECTION 5. EARLY TERMINATION OF OPTION.
If the Participant terminates employment or services with the
Company, the Option, to the extent not previously exercised, and all other
rights hereunder, whether vested and exercisable or not, shall terminate and
become null and void as provided and at the times specified in Section 3.2 of
the Plan. The Option, to the extent not previously exercised, whether vested and
exercisable or not, shall terminate upon the occurrence of certain events, as
described in Section 3.3 of the Plan.
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SECTION 6. NON-TRANSFERABILITY OF AND OTHER RESTRICTIONS.
Subject to limited exceptions set forth in Section 1.5 of the Plan,
the Option and any other rights of the Participant under this Option Agreement
or the Plan are nontransferable and subject to repurchase and call rights in
favor of the Corporation. Any Shares issued on exercise of the Option are also
subject to substantial restrictions on transfer and are subject to repurchase
and call rights in favor of the Corporation. The Option is subject to and
Participant agrees to be bound by the terms and provisions of Sections 1.5 and
3.5 of the Plan and Appendix A of the Plan, incorporated herein by this
reference.
SECTION 7. SECURITIES LAW COMPLIANCE.
The Participant acknowledges that the Option and Shares are not
being registered under the Securities Act, based, in part, on reliance that the
issuance of the Shares is exempt from registration under Rule 701 promulgated
under the Securities Act and exempt from qualification under California
Corporate Securities Law Section 25102(o). The Participant acknowledges that by
executing this Option Agreement he or she makes the representations contained in
Appendix B of the Plan, incorporated herein by this reference.
SECTION 8. SHARES TO BE RESERVED.
The Corporation shall at all times during the term of the Option
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of this Option Agreement.
SECTION 9. NOTICES.
Any notice to be given under the terms of this Option Agreement
shall be in writing and addressed to the Corporation at its principal office to
the attention of the Secretary, and to the Participant at the address given
beneath the Participant's signature hereto, or at such other address as either
party may hereafter designate in writing to the other. Any such notice shall be
deemed to have been duly given when enclosed in a properly sealed envelope
addressed as aforesaid, registered or certified, and deposited (postage and
registry or certification fee prepaid) in a post office or branch post office
regularly maintained by the United States Government.
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SECTION 10. PLAN.
The Option and all rights of the Participant under this Option
Agreement are subject to, and the Participant agrees to be bound by, all of the
terms and conditions of the provisions of the Plan, incorporated herein by this
reference. In the event of a conflict or inconsistency between the terms and
conditions of this Option Agreement and of the Plan, the terms and conditions of
the Plan shall govern. The Participant acknowledges receipt of a copy of the
Plan, including all appendices thereto, and agrees to be bound by the terms
thereof. The Participant acknowledges reading and understanding the plan and all
appendices thereto. Unless otherwise expressly provided in other sections of
this Option Agreement, provisions of the Plan that confer discretionary
authority on the Board (or the Committee) do not (and shall not be deemed to)
create any rights in the Participant unless such rights are expressly set forth
herein or are otherwise in the sole discretion of the Board (or the Committee)
so conferred by appropriate action of the Board (or the Committee) under the
Plan after the date hereof.
SECTION 11. ENTIRE AGREEMENT.
This Option Agreement and the Plan together constitute the entire
agreement and supersede all prior understandings and agreements, written or
oral, of the parties hereto with respect to the subject matter hereof. The Plan
and this Option Agreement may be amended pursuant to Section 3.6 of the Plan.
Such amendment must be in writing and signed by the Corporation. The Corporation
may, however, unilaterally waive any provision hereof in writing to the extent
such waiver does not adversely affect the interests of the Participant
hereunder, but no such waiver shall operate as or be construed to be a
subsequent waiver of the same provision or a waiver of any other provision
hereof.
SECTION 12. GOVERNING LAW.
12.1. CALIFORNIA LAW. This Option Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
without regard to conflict of law principles thereunder.
12.2. ARBITRATION. Any controversy or claim arising out of or
relating to this Option Agreement or the Plan, their enforcement or
interpretation, or because of an alleged breach, default, or misrepresentation
in connection with any of their provisions, shall be submitted to arbitration,
to be held in Orange County, California in accordance with California Civil
Procedure Code Sections 1282-1284.2. In the event either party institutes
arbitration under this Section 12.2, the party prevailing in any such litigation
shall be entitled, in addition to all other relief, to reasonable attorney's
fees relating to such arbitration. The non-prevailing party shall be responsible
for all costs of the arbitration, including but not limited to, the arbitration
fees, court reporter fees, etc.
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IN WITNESS WHEREOF, the Corporation has caused this Option Agreement
to be executed on its behalf by its duly authorized officer and the Participant
has hereunto set his or her hand.
"THE CORPORATION"
THE TRIZETTO GROUP, INC.
a Delaware corporation
By: __________________________________________
Title: _______________________________________
"THE PARTICIPANT"
________________________________________________
Signature
________________________________________________
Print Name
________________________________________________
Address
________________________________________________
City, State, Zip Code
CONSENT OF SPOUSE
In consideration of the execution of the
foregoing Nonqualified Stock Option Agreement by The Trizetto Group, Inc. I,
___________________________, the spouse of the Participant therein named, do
hereby agree to be bound by all of the terms and provisions thereof and of the
Plan.
DATED: _________________, _____. __________________________
Signature of Spouse
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EXHIBIT I
THE TRIZETTO GROUP, INC.
EXERCISE AGREEMENT
THIS EXERCISE AGREEMENT (this "EXERCISE AGREEMENT") dated as of the
____ day of ________, _____, by and between THE TRIZETTO GROUP, INC., a Delaware
corporation (the "CORPORATION"), and ____________________________ (the
"PURCHASER").
R E C I T A L S
WHEREAS, pursuant to The Trizetto Group, Inc. 1998 Stock Option Plan
(the "PLAN"), the Corporation granted to the Purchaser a nonqualified stock
option (the "OPTION") to purchase all or any part of a designated number of
authorized but unissued or treasury shares of Common Stock of the Corporation
and in connection therewith, the Corporation and Purchaser entered into that
certain Nonqualified Stock Option Agreement dated as of ____________, _____ (the
"OPTION AGREEMENT"); and
WHEREAS, the Purchaser desires to exercise the Option and purchase
from the Corporation and the Corporation wishes to deliver and sell to Purchaser
_______ shares of its Common Stock, par value $.001 per share (the "SHARES"), to
be sold at a price of $___________ per share, in accordance with and subject to
the terms and conditions set forth in this Exercise Agreement;
NOW, THEREFORE, in consideration of the above premises and the
representations, warranties, covenants and agreements contained in this Exercise
Agreement, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. PURCHASE AND SALE OF COMMON STOCK.
The Corporation shall deliver to Purchaser a stock certificate
representing the Shares against delivery to the Corporation by Purchaser of the
purchase price in the sum of $__________ (which represents the product of the
$___________ price per share and the number of Shares, the "PURCHASE PRICE").
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SECTION 2. INVESTMENT REPRESENTATIONS.
Purchaser acknowledges that the Shares are not being registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"). Purchaser
hereby affirms as made as of the date hereof the representations made in Section
7 of the Option Agreement and such representations are incorporated herein by
this reference. Purchaser has no need for liquidity in this investment, has the
ability to bear the economic risk of this investment, and can afford a complete
loss of the Purchase Price. Purchaser has received the Corporation's
consolidated financial information which includes information material to the
Corporation's financial condition, operations and prospects. Purchaser also
understands and acknowledges the restrictive legend provision contained in
Section 3.2 of Appendix A of the Plan.
SECTION 3. LIMITATIONS ON DISPOSITION, REPURCHASE RIGHTS.
The Shares are subject to and Purchaser hereby agrees to be bound by
the provisions of Sections 1.5 and 3.4 of the Plan and Appendix A of the Plan,
incorporated herein by this reference, which shall continue in effect as to the
Shares.
SECTION 4. MISCELLANEOUS.
4.1 PLAN AND OPTION AGREEMENT. All rights of the Purchaser under
this Exercise Agreement are subject to, and the Purchaser agrees to be bound by,
all of the terms and conditions of the provisions of the Plan and the Option
Agreement, both of which are incorporated herein by this reference. In the event
of a conflict or inconsistency between the terms and conditions of this Exercise
Agreement and of the Plan or the Option Agreement, the terms and conditions of
the Plan or the Option Agreement shall govern. The Purchaser acknowledges
receipt of a copy of the Plan, including all appendices thereto, and agrees to
be bound by the terms thereof. The Purchaser acknowledges reading and
understanding the Plan and all appendices thereto. Unless otherwise expressly
provided in other sections of this Exercise Agreement, provisions of the Plan
that confer discretionary authority on the Board (or the Committee) do not (and
shall not be deemed to) create any rights in the Purchaser unless such rights
are expressly set forth herein or are otherwise in the sole discretion of the
Board (or the Committee) so conferred by appropriate action of the Board (or the
Committee) under the Plan after the date hereof.
4.2 ENTIRE AGREEMENT. This Exercise Agreement, the Option Agreement
and the Plan, together constitute the entire agreement and supersede all prior
understandings and agreements, written or oral, of the parties hereto with
respect to the subject matter hereof. This Exercise Agreement may be amended
pursuant to Section 3.6 of the Plan. Such amendment must be in writing and
signed by the Corporation. The Corporation may, however, unilaterally waive any
provision hereof in writing to the extent such waiver does not adversely affect
the interests of the Purchaser hereunder, but no such waiver shall operate as or
be construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
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IN WITNESS WHEREOF, the parties have duly executed this Exercise
Agreement as of the date first written above.
"THE CORPORATION"
THE TRIZETTO GROUP, INC.
a Delaware corporation
By: ____________________________________________
Title: _________________________________________
"THE PURCHASER"
________________________________________________
Signature
________________________________________________
Print Name
________________________________________________
Address
________________________________________________
City, State, Zip Code
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Exercise
Agreement by The Trizetto Group, Inc. I, _______________________, the spouse of
the Purchaser therein named, do hereby agree to be bound by all of the terms and
provisions thereof and of the Plan.
DATED: _________________, _____. __________________________________
Signature of Spouse
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