EXHIBIT 4.3
GOHEALTH.MD, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as
of this 27th day of August, 1999, by and between GOHEALTH.MD, INC., a Delaware
corporation (the "Company"), and Xxxxx X. Gettson ("Optionee").
Background
The Company desires to grant Optionee an option to purchase
shares of common stock of the Company.
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, and intending to be
legally bound, it is agreed as follows:
2. Non-Qualified Stock Options to Purchase Shares.
(a) Number of Option Shares and Exercise Price. The Company hereby grants
to the Optionee non-qualified stock options (the "Options"), to
purchase the following number of shares of the Company's common stock,
par value $0.001 per share (the "Option Shares"):
(i) 25,000 shares of common stock with an exercise price of $1.00 per
share.
(b) Exercise Period. The Options shall be exercisable, in whole or in
part, at any time and from time to time during the period
commencing on the date hereof, and ending on August 27, 2006 (the
"Exercise Period").
2. Manner of Exercise and Terms of Payment.
(a) The Options may be exercised in whole or in part, subject to the
limitations set forth in this Agreement, upon delivery to the Company
of timely written notice of exercise, accompanied by full payment of
the Option Price for the Option Shares with respect to which the
Options are exercised. The exercise price may be paid, in the
Optionee's discretion, (i) by delivering a certified check or wire
transfer of immediately available funds to the order of the Company
for the entire exercise price, or (ii) in accordance with provisions
of subparagraph 2(b), hereof, or (iii) by any combination thereof
determined by the Optionee. The person entitled to the shares so
purchased shall be treated for all purposes as the holder of such
shares as of the close of business on the date of exercise and
certificates for the shares of stock so purchased shall be delivered
to the person so entitled within a reasonable time, not exceeding
thirty (30) days, after such exercise. Unless this Option has expired,
a new Option of like tenor and for such number of shares as the holder
of this Option shall direct, representing in the aggregate the right
to
121
purchase a number of shares with respect to which this Option shall
not have been exercised, shall also be issued to the holder of this
Option within such time.
(b) In addition to and without limiting the right of the Optionee under
any other terms set forth herein, the Optionee shall have, upon
written request by the Optionee delivered or transmitted to the
Company together with this Option, the right (the "Conversion Right")
to require the Company to convert this Option into shares of Common
Stock as follows: upon exercise of the Conversion Right, the Company
shall deliver to the Optionee (without payment by the Optionee of any
Exercise Price) that number of shares of Common Stock that is equal to
the quotient obtained by dividing (x) the value of the Option at the
time the Conversion Right is exercised (determined by subtracting the
aggregate Exercise Price in effect immediately prior to the exercise
of the Conversion Right from the aggregate Fair Market Value of the
shares of Common Stock issuable upon exercise of the Option
immediately prior to the exercise of the Conversion Right) by (y) the
current Fair Market Value of one share of Common Stock (determined as
provided in paragraph 11(c) below) immediately prior to the exercise
of the Conversion Right. The Conversion Right may be exercised by the
Optionee by surrender of this Option at the principal office of the
Company, together with a written statement specifying that the
Optionee thereby intends to exercise the Conversion Right.
Certificates for shares of common Stock issuable upon exercise of the
Conversion Right shall be delivered to the Optionee promptly following
the Company's receipt of this Option together with the aforesaid
written statement.
3. Rights as Stockholder. Optionee or a permitted transferee of the Options
shall have no rights as a stockholder of the Company with respect to any
shares of common stock subject to such Options prior to his exercise of the
Options.
4. Adjustment of Purchase Price and Number of Shares. The number and kind of
securities purchasable upon the exercise of this Option and the exercise
price shall be subject to adjustment from time to time, as provided in
Schedule A attached hereto.
5. Investment Representation.
(a) Optionee represents and warrants to the Company that Optionee is
acquiring these Options and the Option Shares for Optionee's own
account for the purpose of investment and not with a view toward
resale or other distribution thereof in violation of the 1933 Act.
Optionee acknowledges that the effect of the representations and
warranties is that the economic risk of the investment in the Options
and Option Shares must be borne by the Optionee for an indefinite
period of time. This representation and warranty shall be deemed to be
a continuing representation and warranty and shall be in full force
and effect upon such exercise of the Options granted hereby.
(b) Prior to such time as the Option Shares have been registered under the
1933 Act, the Company shall place a legend on each certificate for the
Option Shares issued pursuant hereto, or any certificate issued in
exchange therefore, stating that such securities are not registered
under the 1933 Act and state securities laws and setting forth or
referring to the restriction on transferability and sale thereof
imposed by the 1933 Act or any applicable state securities law, and
that the holder thereof agrees to be bound by such restrictive legend.
6. Exercisability. The Options shall be exercisable only by Optionee during
his lifetime or by his assigns, heirs, executors or administrators, as the
case may be. Any assignment hereof shall be in
122
compliance with applicable securities laws. The Options granted hereunder
and the registration rights may be assigned together only, but may not be
separately assigned.
7. Piggyback Registrations.
(a) Right to Piggyback. At any time after the first to occur of the date
(i) a registration statement covering the Initial Public Offering of
the Company's securities shall become effective or (ii) upon the
Company becoming a reporting company under Section 12 of the
Securities Act of 1934, as amended whenever the Company proposes to
register any of its securities under the 1933 Act (other than a
registration on Form S-4 or S-8 or such replacement form), and the
registration form to be used may be used for the registration of
Registrable Securities (a "Piggyback Registration"), the Company will
give prompt written notice to the Optionee and will include in such
Piggyback Registration, subject to the allocation provisions below,
all Registrable Securities of Optionee with respect to which the
Company has received written requests for inclusion within fifteen
(15) days after the Company's mailing of such notice.
(b) Piggyback Expenses. In all Piggyback Registrations, the Company will
pay all of the Registration Expenses.
(c) Priority on Registrations. If a Piggyback Registration is initiated as
an underwritten primary or secondary registration on behalf of the
Company or holders of the Company's securities, and the managing
underwriters advise the Company in writing that in their reasonable
opinion the number of securities requested to be included in such
registration exceeds the number that can be sold in such offering, at
a price reasonably related to fair value, the Company may limit the
number of Registrable Securities included in such registration.
(d) Selection of Underwriters. If any Piggyback Registration is
underwritten, the selection of investment banker(s) and manager(s) and
the other decisions regarding the underwriting arrangements for the
offering will be made by the Company.
(e) Continuing Obligations. The Company's agreements with respect to the
registration of the Option Shares in this Section 8 shall continue in
effect regardless of the exercise and surrender of the Option.
8. Registration Procedures.
Whenever the Optionee has requested that any Registrable
Securities be registered pursuant to Section 7 of this Agreement, the Company
will, as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and
use its best reasonable efforts to cause such registration statement
to become effective as promptly as practical;
(b) prepare and file with the Securities and Exchange Commission 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 for a period of not less than 90
days;
123
(c) furnish to each Selling Holder such reasonable number of copies of
such registration statement, each amendment and supplement thereto and
the prospectus included in such registration statement (including each
preliminary prospectus and any term sheet associated therewith), and
such other documents as such Optionee may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by
each seller;
(d) use its best reasonable efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of
such states as the managing underwriter(s) may reasonably request, or
if the offering is not underwritten in New York, New Jersey and
Pennsylvania.
(e) notify each Selling Holder at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act within the
period that the Company is required to keep the registration statement
effective of the happening of any event as a result of which the
prospectus included in such registration statement, together with any
associated term sheet, contains an untrue statement of a material fact
or omits and fact necessary to make the statement therein not
misleading, and, at the request of any such seller, the Company will
prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statement therein
not misleading;
(f) cause all such Registrable Securities to be listed or included on each
national securities exchange, if any, or on the NASDAQ Stock Market,
on which the other outstanding shares of Common Stock of the Company
are then listed;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including an underwriting
agreement in customary form) and take such other customary actions as
may be reasonably necessary to expedite or facilitate the disposition
of such Registrable Securities;
(i) obtain a "comfort" letter addressed to the Company from its
independent public accountants in customary form and covering such
matters of the type customarily covered by "comfort" letters; and
(j) make available for inspection by the Optionee, any underwriter
participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by any
such seller, or any underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by any such seller or any such
underwriter, attorney, accountant or agent in connection with such
registration statement.
9. Indemnification.
(a) The Company hereby indemnifies, to the extent permitted by law, each
Holder and their respective officers, directors, employees and agents,
if any, and each person who controls any of them within the meaning of
the 1933 Act (each, an "indemnified Party") against all losses,
claims, damages,
124
(d) liabilities and expenses arising out of or resulting from any untrue
or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or
associated term sheet or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances in which made except insofar as the same are caused by
or contained in any information furnished in writing to the Company by
such Indemnified Party expressly for use therein or by any Indemnified
Party's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company
has furnished such Indemnified Party with a sufficient number of
copies of the same. In connection with an underwritten offering, the
Company will indemnify the underwriters, their officers and directors,
and each person who controls such underwriters (within the meaning of
the 0000 Xxx) to the same extent as provided above with respect to the
indemnification of any Indemnified Party.
(b) In connection with any registration statement in which a Selling
Holder is participating, each such Holder will furnish to the Company
in a timely manner in writing such information as is reasonably
requested by the Company for use in any such registration statement or
prospectus and will indemnify, to the extent permitted by law, the
Company, its directors and officers and each person who controls the
Company (within the meaning of the 0000 Xxx) against any losses,
claims, damages, liabilities and expenses resulting from any untrue or
alleged untrue statement of material fact or any omission or alleged
omission of a material fact required to be stated in the registration
statement or prospectus or any amendment thereof or supplement thereto
or necessary to make the statements therein not misleading, but only
to the extent that such untrue statement or omission is contained in
information so furnished in writing by such Holder specifically for
use in preparing the registration statement. Notwithstanding the
foregoing, the liability of a Selling Holder under this Section 9(b)
shall be limited to an amount equal to the net proceeds actually
received by the Selling Holder from the sale of Registrable Securities
covered by the registration statement.
(c) Any person entitled to indemnification hereunder will (i) give prompt
notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnifying party's
counsel reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the indemnified party.
Any failure to give prompt notice shall deprive a party of its right
to indemnification hereunder only to the extent that such failure
shall have adversely affected the indemnifying party. If the defense
of any claim is assumed, the indemnifying party will not be subject to
any liability for any settlement made without its consent (but such
consent will not be unreasonably withheld). An indemnifying party who
is not entitled, or elects not, to assume the defense of a claim will
not be obligated to pay the fees and expenses or more than one counsel
for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgement of any indemnified
party's counsel a conflict of interest exists between such indemnified
party and any other of such indemnifying parties with respect to such
claim.
10. Participation in Underwritten Registrations.
The Optionee may not participate in any underwritten registration
hereunder unless he (i) agrees to sell his securities on the basis provided in
any underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements under Section 7(e), and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
125
11. Definitions.
(a) The term "Additional Shares of Capital Stock" shall mean all shares of
Capital Stock issued by the Company, except those shares of Common
Stock of the Company issuable upon the exercise of this Option or any
other shares of Common Stock issued to the Optionee.
(b) The term "Capital Stock" shall mean the Company's common stock, and
any other stock of any class, whether now or hereafter authorized,
which has the right to participate in the distribution of earnings and
assets of the Company without limit as to amount or percentage.
(c) The term "Fair Market Value" per share of Common Stock as to any date
shall mean the average of the daily closing prices (as such term is
hereinafter defined) immediately prior to such date; provided,
however, that in the event the Fair Market Value of the Common Stock
is determined during a period following the announcement by the
Company of (i) a dividend or distribution on the Common stock payable
in shares of Common Stock or securities convertible into Common Stock,
or (ii) any subdivision, combination or reclassification of Common
Stock and prior to the expiration of 30 consecutive Trading days after
the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then and
in each such case, the Fair Market Value shall be appropriately
adjusted to reflect the Fair Market Value equivalent of the Common
Stock. The "closing price" for each day shall be the last quoted
price, or if not so reported by the National Association of Securities
Dealers, Inc. Automated Quotations System or such other system then in
use, or, if on any such date the security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
security selected by the Board of Directors of the Company. If the
Common Stock in not publicly held or so listed and traded, "Fair
market Value" shall mean the fair value of the Common Stock as
determined in good faith by the Board of Directors of the Company
whose determination shall be conclusive and shall be described in a
statement filed with the Optionee. The term "Trading Day" shall mean a
day on which the securities exchange or automated quotation system on
which the Common Stock is listed or admitted to listing is open for
the transaction of business or, if the Common Stock is not listed or
admitted to trading on any securities exchange or automated quotations
system, a business day.
(d) The term "Initial Public Offering" means the first public offering
under the 1933 Act of any of the Company's equity securities.
(e) The term "Registrable Securities" means (i) the Common Stock issuable
upon the exercise of the Options and (ii) any securities issued or to
be issued with respect to the securities referred to above by way of a
stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, such
securities will cease to be Registrable Securities when they have been
effectively registered under the 1933 Act and disposed of in
accordance with the registration statement covering them.
(f) The term "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with this Agreement, including
without limitation all registration and filing fees, fees and expenses
of compliance with securities or blue sky laws (in such states
reasonably determined by the Company), printing expenses, messenger
and delivery expenses, expenses and fees for listing the securities to
be registered on exchanges or electronic quotation systems on which
similar
126
securities issued by the Company are then listed, and fees and
disbursements of counsel for the Company (but not Optionee's counsel)
and of all independent certified public accountants, underwriters
(other than Underwriting Commissions) and other persons retained by
the Company.
(g) The term "Underwriting Commissions" means all underwriting discounts
or commissions relating to the sale of securities of the Company.
12. Rule 144 Reporting. With a view to making available to the Holders the
benefits of certain rules and regulations of the U.S. Securities and
Exchange Commission (the "SEC") which may permit the sale of the Options or
the shares underlying the Options to the public without registration, at
any time after the first to occur of the date (i) a registration statement
under the Securities Act covering the Initial Public Offering of the
Company's securities shall become effective, or (ii) upon the Company
becoming a reporting company under Section 12 of the Securities Exchange
Act of 1934, as amended, the Company agrees to: (a) make and keep public
information available, as those terms are understood and defined in Rule
144 under the 1933 Act; (b) file with the SEC in a timely manner all
reports and other documents required of the Company under the 1993 Act and
the Securities Exchange Act of 1934, as amended; and (c) furnish to
Optionee upon its written request a written statement by the Company as to
its compliance with the public information requirements of Rule 144 and a
copy of the most recent annual or quarterly report of the Company.
13. Miscellaneous.
(a) Termination of Other Agreements. This Agreement sets forth the entire
understanding of the parties hereto with respect to the rights to the
registration of capital stock of the Company and supercedes all prior
arrangements or understandings among the parties regarding such
matters.
(b) Notices. Any notices required hereunder shall be deemed to be given
upon the earlier of the date when received at, or (i) the third
business day after the date when sent by certified or registered mail,
(ii) the next business day after the date sent by guaranteed overnight
courier, or (iii) the date sent by telecopier or delivered by hand, in
each case, to the addresses set forth below:
If to the Company: GoHealth.MD, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: President
If to the Optionee: Xxxxx X. Gettson
0000 Xxxxxxxx
Xxxxxx, XX 00000
or to such other addresses as the parties may specify in writing.
(c) Amendments and Waivers. The provisions of this Agreement may be
amended or terminated unless in a writing signed by the Optionee and
the Company.
127
(d) Binding Effect. This Agreement will bind and inure to the benefit of
the respective successors (including any successor resulting from a
merger or similar reorganization), assigns, heirs, and personal
representatives of the parties hereto.
(e) Governing Law. This Agreement shall be governed by and construed and
enforced ------------- in accordance with the laws of the State of New
Jersey.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered to be an original
instrument and to be effective as of the date first written above.
Each such copy shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for
more than one such counterpart.
(g) Interpretation. Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the
singular the plural, the part the whole, (b) references to one gender
include all genders, (c) "or" has the inclusive meaning frequently
identified with the phrase "and/or" and (d) "including" has the
inclusive meaning frequently identified with the phrase "but not
limited to." The section and other headings contained in this
Agreement are for reference purposes only and shall not control or
affect the construction of the Agreement or the interpretation thereof
in any respect.
IN WITNESS WHEREOF, the undersigned have executed, or have caused this
Agreement to be executed, as of the day and year first above written.
GOHEALTH.MD, INC. OPTIONEE
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx X. Gettson
----------------------------- --------------------
Xxxxxxx X. Xxxxxx Xxxxx X. Gettson
Chief Executive Officer
128
SCHEDULE A
Adjustment of Purchase Price and Number of Shares
1. Adjustment. The number and kind of securities purchasable upon the exercise
of this Option and the Exercise Price shall be subject to adjustment from
time to time upon the happening of certain events as follows:
(a) Reclassification, Consolidation or Merger. At any time while this
Option remains outstanding and unexpired, in case of (i) any
reclassification or change of outstanding securities issuable
upon exercise of this Option (other than a change in par value,
or from par value to no par value per share, or from no par value
per share to par value or as a result of a subdivision or
combination of outstanding securities issuable upon the exercise
of this Option), (ii) any consolidation or merger of the Company
with or into another corporation (other than a merger with
another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or
change, other than a change in par value, or from par value to no
par value per share, or from no par value per share to par value,
or as a result of a subdivision or combination of outstanding
securities issuable upon the exercise of this Option), or (iii)
any sale or transfer to another corporation of the property of
the Company as an entirety or substantially as an entirety, the
Company, or such successor or purchasing corporation, as the case
may be, shall without payment of any additional consideration
therefor, execute a new Option providing that the holder of this
Option shall have the right to exercise such new Option (upon
terms not less favorable to the holder than those then applicable
to this Option) and to receive upon such exercise, in lieu of
each share of Common Stock theretofore issuable upon exercise of
this Option, the kind and amount of shares of stock, other
securities, money or property receivable upon such
reclassification, change, consolidation, merger, sale or
transfer. Such new Option shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 1 of Schedule A. The
provisions of this subsection 1(a) shall similarly apply to
successive reclassifications, changes, consolidations, mergers,
sales and transfers.
(b) Subdivision or Combination of Shares. If the Company at any time
while this Option remains outstanding and unexpired, shall
subdivide or combine its Capital Stock, the Exercise Price shall
be proportionately reduced, in case of subdivision of such
shares, as of the effective date of such subdivision, or, if the
Company shall take a record of holders of its Capital Stock for
the purpose of so subdividing, as of such record date, whichever
is earlier, or shall be proportionately increased, in the case of
combination of such shares, as of the effective date of such
combination, or, if the Company shall take a record of holders of
its Capital Stock for the purpose of so combining, as of such
record date, whichever is earlier.
(c) Stock Dividends. If the Company at any time while this Option is
outstanding and unexpired shall pay a dividend in shares of, or
make other distribution of shares of, its Capital Stock, then the
Exercise Price shall be adjusted, as of the date the Company
shall take a record of the holders of its Capital Stock for the
purpose of receiving such dividend or other distribution (or if
no such record is taken, as at the date of such payment or other
distribution), to that price determined by multiplying the
exercise price in effect immediately prior to such payment or
other distribution by a fraction (a) the numerator of which shall
be the total number of shares of Capital Stock outstanding
immediately prior to such dividend or distribution, and (b) the
denominator of which shall be the total number of shares of
Capital Stock outstanding immediately after such dividend or
distribution. The provisions of this
129
subsection 1(c) shall not apply under any of the circumstances
for which an adjustment is provided in subsection 1(a) or 1(b).
(d) Liquidating Dividends, Etc. If the Company at any time while this
Option is outstanding and unexpired makes a distribution of its
assets to the holders of its Capital Stock as a dividend in
liquidation or by way of return of capital or other than as a
dividend payable out of earnings or surplus legally available for
dividends under applicable law or any distribution to such
holders made in respect of the sale of all or substantially all
of the Company's assets (other than under the circumstances
provided for in the foregoing subsections (a) through (c)), the
holder of this Option shall be entitled to receive upon the
exercise hereof, in addition to the shares of Common Stock
receivable upon such exercise, and without payment of any
consideration other than the exercise price, an amount in cash
equal to the value of such distribution per share of Common Stock
multiplied by the number of shares of Common Stock which, on the
record date for such distribution, are issuable upon exercise of
this Option (with no further adjustment being made following any
event which causes a subsequent adjustment in the number of
shares of Common Stock issuable upon the exercise hereof), and an
appropriate provision therefor should be made a part of any such
distribution. The value of a distribution which is paid in other
than cash shall be determined in good faith by the Board of
Directors.
2. Notice of Adjustments. Whenever any of the exercise price or the number of
shares of Common Stock purchasable under the terms of this Option at that
exercise price shall be adjusted pursuant to Section 1 hereof, the Company
shall promptly make a certificate signed by its President or a Vice
President and by its Treasurer or Assistant Treasurer or its Secretary or
Assistant Secretary, setting forth in reasonable detail the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which
the Company's Board of Directors made any determination hereunder), and the
exercise price and number of shares of Common Stock purchasable at that
exercise price after giving effect to such adjustment, and shall promptly
cause copies of such certificate to be mailed (by first class and postage
prepaid ) to the registered holder of this Option.
130
