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EXHIBIT 4.9
OXFORD HEALTH PLANS, INC. STOCK OPTION AGREEMENT
THIS AGREEMENT, made this 30th day of March, 1998 (the "Effective Date"),
by and between Oxford Health Plans, Inc., a Delaware corporation (the
"Corporation"), and Xxxxxx X. Xxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Corporation and the Executive have entered into an employment
agreement dated as of the date hereof (the "Employment Agreement") pursuant to
which the Executive will serve as the Chief Administrative Officer of the
Corporation; and
WHEREAS, the Board of Directors of the Corporation (the "Board") has
determined that it is in the best interests of the Corporation to enter into
this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. GRANT OF OPTION. The Corporation hereby grants to the Executive the
right and option (an "Option") to purchase, subject to the vesting provisions of
Section 3, all or any part of an aggregate of 800,000 shares (the "Option
Shares") of the Corporation's common stock, par value $.01 per share ("Common
Stock"), subject to adjustment as provided in the Oxford Health Plans, Inc. 1991
Stock Option Plan (the "Plan"), at a purchase price per share of $15.375 (the
"Option Price"). Except as expressly provided for herein, the Option shall be
governed by the provisions of the Plan, a copy of which is attached hereto;
provided, however, that the Option Shares shall not be granted under the Plan
and shall be separately registered with the Securities and Exchange Commission
pursuant to Section 11 below.
2. TERM OF OPTION. Subject to earlier termination as provided in Section
4, the Option shall expire and cease to be exercisable on March 30, 2003 (the
"Termination Date").
3. VESTING AND EXERCISABILITY.
(a) Regular Vesting Schedule. Except as otherwise provided herein,
the Option Shares shall vest and become exercisable in four equal installments
over the four years from the Effective Date as follows:
Number of Option Shares Vesting Date
----------------------- ------------
200,000 March 30, 1999
200,000 March 30, 2000
200,000 March 30, 2001
200,000 March 30, 2002
Any partial exercise of the Option is limited to the purchase of whole shares of
Common Stock.
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(b) Acceleration of Vesting. In event of a Change of Control (as
defined in the Plan) and as otherwise provided in the Employment Agreement, the
Options shall become immediately vested and fully exercisable.
4. TERMINATION OF EMPLOYMENT. Unless otherwise determined by the
Compensation Committee, if the Executive's employment with the Corporation or
with a subsidiary of the Corporation is terminated, the term of any then
outstanding option held by the Executive shall extend for a period ending on the
earlier of the date on which such option would otherwise expire or three months
after such termination, and such option shall be exercisable to the extent it
was exercisable as of such last date of the Executive's employment with the
Corporation.
5. METHOD OF EXERCISING OPTION. Full payment for the shares purchased
shall be made at the time of any exercise of this Agreement. The purchase price
shall be payable to the Corporation either (i) in United States dollars in cash
or by check, bank draft, or postal or express money order, or (ii) through the
delivery of shares of Stock of the Corporation owned by the Executive for at
least six months prior to the date of exercise having a Fair Market Value on the
date of exercise equal to the full purchase price, or (iii) by a combination of
(i) and (ii) above.
6. ISSUANCE OF SHARES. As promptly as practical after receipt of such
written notification of exercise and full payment of the Option Price and any
required income tax withholding, the Corporation shall issue or transfer to the
Executive the number of Option Shares with respect to which such Option has been
exercised (less shares withheld in satisfaction of tax withholding obligations,
if any), and, unless otherwise directed by the Executive, shall deliver to the
Executive a certificate or certificates therefor, registered in the Executive's
name. The Corporation may postpone such delivery until it receives satisfactory
proof that the issuance or transfer of such Option Shares will not violate any
of the provisions of the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, any rules or regulations of the Securities and
Exchange Commission promulgated thereunder, or the requirements of applicable
state law relating to authorization, issuance or sale of securities, or until
there has been compliance with the provisions of such acts or rules.
7. CORPORATION; EXECUTIVE. (a) The term "Corporation" as used in this
Agreement with reference to employment shall include the Corporation and its
subsidiaries, as appropriate.
(b) Whenever the word "Executive" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the beneficiaries, the executors, the administrators, or the person
or persons to whom the Option may be transferred by will or by the laws of
descent and distribution, the word "Executive" shall be deemed to include such
person or persons.
8. NON-TRANSFERABILITY. Except as otherwise provided herein, an option and
the rights and privileges conferred hereby may not be transferred, assigned,
pledged or hypothecated in any way, other than by will or the laws of descent
and distribution, and an option shall be exercisable during the Executive's
lifetime only by the Executive or his conservator.
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9. RIGHTS AS SHAREHOLDER. Neither the Executive nor any transferee of the
Option shall have any of the rights of a shareholder with respect to any Option
Shares except to the extent that certificate(s) for such Option Shares shall
have been issued upon the exercise of the Option as provided herein, and no
adjustment shall be made for cash distributions in respect of such Option Shares
for which the record date is prior to the date upon which such Executive or
transferee shall become the holder of record thereof.
10. COMPLIANCE WITH LAW. The Corporation will use its best efforts to
obtain all required approvals in connection with the ownership or
transferability of the Option Shares acquired upon exercise of the Option.
Notwithstanding any of the provisions hereof, the Executive hereby agrees that
such Executive shall not exercise the Options, and that the Corporation shall
not be obligated to issue or transfer any shares to the Executive hereunder, if
the exercise hereof or the issuance or transfer of such shares shall constitute
a violation by the Executive or the Corporation of any provisions of any law or
regulation of any governmental authority. Any determination in this connection
by the Corporation shall be final, binding and conclusive.
11. PURCHASE FOR PURPOSE OF INVESTMENT. The Executive hereby represents
and warrants that any Option Shares acquired pursuant to the exercise of the
Option are acquired for his own account solely for the purpose of investment and
not with a view to, or for sale in connection with, any distribution thereof in
violation of the Securities Act of 1933, as amended (the "Securities Act"). The
Executive hereby acknowledges that the Option Shares have not been registered
under the Securities Act and may be sold or disposed of in the absence of such
registration only pursuant to an exemption from the registration requirements of
the Securities Act. The Corporation agrees to cause the Option Shares to be
registered under the Securities Act as specified in the Employment Agreement. To
the extent the Executive is entitled to exercise all or any portion of the
Option prior to the date on which the Corporation has agreed to register the
securities pursuant to the Employment Agreement, the Executive agrees to the
placement on certificates representing any Option Shares acquired pursuant to
the exercise of all or any portion of such Option of the following legend (the
"Legend"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT."
Upon the registration under the Securities Act of the Option Shares acquired
pursuant to the exercise of all or any portion of the Option which has become
exercisable as described above, or the delivery by the Executive to the
Corporation of an opinion of counsel reasonably satisfactory to the Corporation
that the Legend is no longer required under the Securities Act, the Corporation
shall immediately issue, in exchange for the certificates containing the Legend,
new certificates representing the Option Shares containing only the Additional
Legend. The Corporation hereby represents and warrants that the Option Shares,
when issued pursuant to the exercise of the
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Option, will be duly and validly issued, fully paid and non-assessable, and the
Executive will have good, valid and marketable title to such Option Shares, free
and clear of all liens, security interests, pledges, charges, claims or other
encumbrances, whether consensual, statutory or otherwise.
13. NOTICES. For purposes of this Agreement, all communications provided
for in this Agreement shall be in writing and shall be deemed to be duly given
when delivered or (unless otherwise specified) mailed by United States
If, to the Executive:
Xxxxxx X. Xxxx
0000 Xxxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
If, to the Corporation:
Oxford Health Plans, Inc.
000 Xxxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000
or to such other address as any party may have furnished to the other in writing
in accordance herewith.
14. BINDING EFFECT. Subject to Section 8 hereof, this Agreement
shall be binding upon the heirs, executors, administrators and successors of the
parties hereto.
15. NO RIGHT TO PERFORM SERVICES. Neither the granting of this
Option, nor the exercise thereof, shall be construed as granting Executive any
right to perform services for the Corporation or its subsidiaries. Subject to
the terms of the Employment Agreement, the right of the Corporation and its
subsidiaries to terminate Executive's services at any time and for any reason,
is specifically reserved.
16. GOVERNING LAW. This Agreement shall be construed and interpreted
in accordance with the laws of the State of Delaware.
17. ENTIRE AGREEMENT. This Agreement, and the relevant provisions of
the Employment Agreement and the Plan, comprise the whole agreement between the
parties hereto with respect to the subject matter hereof, and may not be
modified or terminated orally.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
OXFORD HEALTH PLANS, INC.
By: /s/ XXXX XXXXX
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Name: Xxxx Xxxxx
Title: Chairman
/s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx
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