AMENDMENT AGREEMENT TO THE
AVICENNA SYSTEMS CORP. 1995 STOCK PLAN
AND RELATED OPTION AGREEMENTS
WHEREAS, Avicenna Systems Corp., a Massachusetts corporation
("Avicenna"), has adopted the Avicenna Systems Corp. 1995 Stock Plan (the
"Plan"; all terms used herein without definition shall have the meanings
ascribed thereto in the Plan) and has granted options ("Options") to purchase
shares of the common stock of Avicenna, par value $.01 per share ("Avicenna
Common Stock"), thereunder to the employees and consultants listed on the
signature page hereof (the "Optionees") pursuant to the Incentive Stock Option
Agreements ("ISO Agreements") between Avicenna and such employees or the
Non-Qualified Stock Option Agreements between Avicenna and such consultants
("NSO Agreements", and collectively, with the ISO Agreements being,
collectively, the "Option Agreements");
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as
of December 23, 1996 (the "Merger Agreement"), among Synetic, Inc., a Delaware
corporation ("Synetic"), Synternet Acquisition Corp., a Delaware corporation and
a wholly owned subsidiary of Synetic, Avicenna and certain shareholders of
Avicenna, the Parent will purchase (the "Purchase") all of the issued and
outstanding capital stock of Avicenna and the Convertible Notes (as such term is
defined in the Merger Agreement); and
WHEREAS, in connection with the transactions contemplated by the
Merger Agreement and as an inducement to the Optionees to remain in the employ
of Avicenna or to continue to perform consulting services for Avicenna, as the
case may be, following the Closing Date, Synetic, Avicenna and the Optionees
desire to amend the terms of the Plan and the Option Agreements as set forth
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
1. References to Company; Common Stock. On and after the Closing
Date (as defined in the Merger Agreement), all references in the Plan and any
Option Agreement to the "Company" shall be deemed to be references to Synetic,
provided that any references to the employment or status as a consultant of an
Optionee shall be deemed to be a reference to the employment or status as a
consultant of such Optionee with Synetic and its subsidiaries. On and after the
Closing Date, all references in the Plan and any Option Agreement to "Common
Stock" shall be deemed to be references to Synetic common stock, $.01 par value
("Synetic Common Stock").
2. Conversion of Options. Effective as of the Closing Date, each
Option shall be deemed to represent an Option to acquire that number of shares
of Synetic Common Stock equal to the number of shares of Avicenna Common Stock
that would have been issued
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upon exercise of such Option multiplied by the Exchange Ratio (as defined in the
Merger Agreement), rounded to the nearest whole number of shares of Synetic
Common Stock, at a price per share of Synetic Common Stock equal to the
per-share exercise price specified in the Option divided by the Exchange Ratio
(rounded to the nearest whole cent).
3. Vesting. (a) Notwithstanding anything to the contrary
contained in the Plan, any Option Agreement or any other agreement between an
Optionee and Avicenna and subject to Section 3(b) below, 50% of the Options
granted to each Optionee shall be deemed to have vested as of the Closing Date,
and the remaining 50% of such Options shall vest on the second anniversary of
the Closing Date.
(b) In the event that the employment or status as a consultant of
an Optionee is terminated by Synetic or any of its subsidiaries without Cause
(as defined below), or as a result of a Permanent Disability (as defined below)
of such Optionee or such Optionee's death, any Options that have not vested as
of the date of termination shall remain outstanding and continue to vest, and
shall otherwise be treated for purposes of the terms and conditions thereof, as
if such Optionee remained in the employ of or as a consultant to Avicenna
through the earlier of (i) the second anniversary of the Closing Date or (ii)
the occurrence of any circumstance or event that would constitute Cause;
provided, however, that the Committee in its sole discretion may accelerate the
vesting of any such Option. Upon any other termination of employment or status
as a consultant (including, without limitation, by reason of the Optionee's
resignation), any Options that have not vested as of the date of termination
shall be forfeited.
(c) For purposes hereof, "Cause" shall have the meaning specified
in an employment agreement or consulting agreement applicable to the Optionee,
or in the case of an Optionee who does not have an employment agreement or
consulting agreement that defines "Cause", shall mean any of the following, each
as communicated to the Optionee by notice from Avicenna setting forth in
reasonable detail the nature of such Cause:
1. A failure of Optionee to perform his employment or
consulting-related duties in any material respect (other than any
such failure resulting from a Permanent Disability of Optionee);
2. Any willful misconduct by Optionee relating, directly or
indirectly, to Synetic, Avicenna or any of their respective
subsidiaries or affiliates, or any breach by Optionee of any
material policy of Synetic, Avicenna or any of their respective
subsidiaries or affiliates, as reasonably determined by the Board
of Directors of Synetic (the "Synetic Board");
3. Any breach by Optionee of any of the covenants set forth
in Section 10 hereof or any substantially similar provisions in
any other agreements with Synetic,
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Avicenna or any of their respective subsidiaries or affiliates,
as reasonably determined by the Synetic Board; or
4. Any willful violation by Optionee of any federal or state
law or regulation applicable to the business of Synetic, Avicenna
or any of their respective subsidiaries or affiliates, or
Optionee's commission of a common law fraud or conviction of a
felony or crime involving moral turpitude.
Notwithstanding anything to the contrary contained in the Plan or
any Option Agreement, an Optionee shall be deemed to be
"Permanently Disabled" if (i) such Optionee shall become ill,
mentally or physically disabled, or otherwise incapacitated so as
to be unable regularly to perform the duties of his position for
a period in excess of 90 consecutive days or more than 120 days
in any consecutive 12 month period, or (ii) a duly licensed
physician selected by Synetic or Avicenna with the reasonable
approval of Optionee determines that Optionee is mentally or
physically disabled so as to be unable to perform regularly the
duties of his position and such condition is expected to be of a
permanent duration.
4. Registration Restrictions. An Option shall not be exercisable
unless and until (i) a registration statement under the Securities Act of 1933,
as amended (the "Securities Act") has been duly filed and declared effective
pertaining to the Synetic Common Stock subject to such Option and such Synetic
Common Stock shall have been qualified under applicable state "blue sky" laws,
or (ii) the Committee in its sole discretion determines that such registration
and qualification is not required as a result of the availability of an
exemption from such registration and qualification under such laws. Synetic
shall file such a registration statement at the time and in the manner described
in Section 4.03 of the Merger Agreement. Synetic shall have no obligation to
issue any Synetic Common Stock pursuant to the exercise of an Option if Synetic
reasonably determines at the time of such exercise that the issuance of Synetic
Common Stock at such time would violate applicable law with respect to xxxxxxx
xxxxxxx or otherwise, or then existing policies of Synetic applicable to
employees or consultants of Synetic or its subsidiaries holding options to
purchase Synetic Common Stock.
5. Price Protection. (a) If on any Determination Date (as defined
below) the Determination Date Market Price (as defined below) is less than the
Guaranteed Price (as defined in the Merger Agreement), then Synetic will deliver
to an Optionee, as promptly as practicable following the date on which such
Optionee has exercised a Related Option (as defined below), an amount in cash
equal to (i) the number of Related Options held by such Optionee that have been
exercised on such date multiplied by (ii) the number obtained by subtracting (x)
the Determination Date Market Price from (y) the Guaranteed Price.
(b) "Determination Date" means, (i) with respect to any Options
that vest as of the Closing Date, the date on which such Options are first
covered by an effective
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registration statement filed with the Securities and Exchange Commission under
the Securities Act in accordance with the provisions of Section 4.03 of the
Merger Agreement and (ii) with respect to any Options that vest as of the second
anniversary of the Closing Date, such second anniversary or, if the Committee
exercises its discretion under Section 3(b) above to accelerate the vesting date
applicable to any Option, the date on which such Option shall vest.
(c) "Determination Date Market Price" means, on any Determination
Date, the last reported sale price of Synetic Common Stock on the NASDAQ
National Market on the trading day immediately preceding such Determination
Date.
(d) "Related Option" means, with respect to any Determination
Date, any Option that is attributed to such Determination Date under Section
5(b) above.
6. No Acceleration Event. The parties hereto hereby acknowledge
and agree that the transactions contemplated by the Merger Agreement shall not
constitute an "Acceleration Event" for purposes of the Plan. Section 13(A) of
the Plan is hereby deleted in its entirety and the subsections that follow such
section are renumbered accordingly.
7. No Adjustment for ISOs. The parties hereto hereby acknowledge
and agree that on and after the Closing Date, no Option shall be treated as an
"incentive stock option" within the meaning of Section 422 of the Code. Section
13(D) of the Plan is hereby deleted in its entirety and the subsections that
follow such section are renumbered accordingly.
8. No Further Grants. No Stock Rights may be granted under the
Plan following the Closing Date.
9. Administration. The Plan shall be administered by the Synetic
Board or the Stock Option Committee of Synetic. All contrary limitations on the
membership of the committee that administers the Plan, including, without
limitation, Section 2(C) thereof, is hereby deleted and the subsections that
follow are renumbered accordingly.
10. Restrictive Covenants. (a) Confidentiality. Each Optionee
understands and acknowledges that in the course of his employment or consulting
relationship, he will have access to and will learn information proprietary to
Synetic, Avicenna and their respective subsidiaries and affiliates
(collectively, the "Company") that concerns the operation and methodology of the
Company, including, without limitation, business plans, financial information,
protocols, proposals, manuals, clinical procedures and guidelines, scientific
data, computer source codes, programs, software, knowhow and specifications,
copyrights, trade secrets, market information, Developments (as hereinafter
defined), data and customer information (collectively, "Proprietary
Information"). Each Optionee agrees
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that, at all times (including following termination of his employment or status
as a consultant with the Company), he will keep confidential and will not
disclose directly or indirectly any such Proprietary Information to any third
party, except as required to fulfill his duties to the Company, and will not
misuse, misappropriate or exploit such Proprietary Information in any way. The
restrictions contained herein shall not apply to any information which such
Optionee can demonstrate (a) was already available to the public at the time of
disclosure, or subsequently became available to the public, otherwise than by
breach of this Section 10, or (b) was the subject of a court order to disclose.
Upon any termination of his employment or status as a consultant with the
Company, each Optionee shall immediately return to the Company all copies of any
Proprietary Information in his possession.
(b) Restrictions on Solicitation. During the period (the
"Restricted Period") beginning on the Closing Date and ending on the second
anniversary of the date of cessation of the employment or status as a consultant
of an Optionee with the Company for any reason whatsoever, such Optionee shall
not, directly or indirectly, solicit or contact any customer of the Company for
any commercial pursuit that could be reasonably construed to be in competition
with the Company, or that is contemplated from time to time by Avicenna's
business plan, or take away or interfere or attempt to interfere with any
custom, trade, business or patronage of the Company, or induce, or attempt to
induce, any employees, agents or consultants of or to the Company to do anything
from which such Optionee is restricted by reason of this Section 10 nor shall
such Optionee, directly or indirectly, offer or aid others to offer employment
to or interfere or attempt to interfere with any employees, agents or
consultants of the Company.
(c) Extension of Restricted Period. The Restricted Period with
respect to any Optionee shall be extended by the length of any period during
which such Optionee is in breach of the terms of this Section 10.
(d) Assignment of Developments. All Developments that are at any
time made, conceived or suggested by any Optionee, whether acting alone or in
conjunction with others, during or as a result of such Optionee's employment or
consulting relationship or any prior employment or consulting relationship with
the Company, shall be the sole and absolute property of the Company, free of any
reserved or other rights of any kind on such Optionee's part. During such
Optionee's employment or consulting relationship and, if such Developments were
made, conceived or suggested by such Optionee during or as a result of such
Optionee's employment or consulting relationship or any prior employment or
consulting relationship with the Company, thereafter, such Optionee shall
promptly make full disclosure of any such Developments to the Company and, at
the Company's cost and expense, do all acts and things (including, among others,
the execution and delivery under oath of patent and copyright applications and
instruments of assignment) deemed by the Company to be necessary or desirable at
any time in order to effect the full assignment to the Company of such
Optionee's right and title, if any, to such Developments. For purposes of
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this Agreement, the term "Developments" shall mean all data, discoveries,
findings, reports, designs, inventions, improvements, methods, practices,
techniques, developments, programs, concepts, and ideas, whether or not
patentable, relating to the present or planned activities, or future activities
of the Company of which such Optionee is aware, or the products and services of
the Company.
(e) Remedies. Each Optionee acknowledges and agrees that damages
for a breach or threatened breach of any of the covenants set forth in this
Section 10 will be difficult to determine and will not afford a full and
adequate remedy, and therefore agrees that the Company, in addition to seeking
actual damages in connection therewith, may seek specific enforcement of any
such covenant in any court of competent jurisdiction, including, without
limitation, by the issuance of a temporary or permanent injunction, without the
necessity of a bond. Without limiting the generality of the foregoing, in the
event of a material breach by an Optionee of any of the restrictive covenants
set forth in this Section 10, the Committee, in its sole discretion, may require
that any or all of such Optionee's Options (whether or not vested) shall
terminate and be cancelled without any consideration being paid therefor.
(f) Severability. The parties have carefully reviewed the
provisions of this Amendment Agreement and agree that they are fair and
equitable. However, in light of the possibility of differing interpretations of
law and changes in circumstances, the parties agree that if any one or more of
the provisions of this Amendment Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the provisions of this Amendment Agreement shall, to the extent permitted by
law, remain in full force and effect and shall in no way be affected, impaired
or invalidated. Moreover, if any of the provisions contained in this Amendment
Agreement is determined by a court of competent jurisdiction to be excessively
broad as to duration, activity, geographic application or subject, it shall be
construed, by limiting or reducing it to the extent legally permitted, so as to
be enforceable to the extent compatible with then applicable law.
(g) Survival. The provisions of this Section 10 shall survive the
exercise, termination or expiration of any of the Options or the termination or
expiration of the Plan.
11. Payment of Option Price. Notwithstanding anything to the
contrary contained in the Plan or any Option Agreement, the payment of the
exercise price for any Option shall be in cash or certified or official bank
check unless otherwise determined by the Committee in its sole discretion.
12. Rights of First Refusal. The rights of refusal contained in
Section 16 of each of the NSO Agreements and Section 17 of each of the ISO
Agreements are hereby deleted in their entirety.
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13. Counterparts; Option Agreements. This Amendment Agreement may
be executed in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be a
separate agreement between the Optionee, Synetic and Avicenna, but all of which
taken together shall constitute one and the same agreement. Each Optionee
represents that he has attached to the counterpart of the signature page to this
Amendment Agreement executed by him a complete and accurate copy of each Option
Agreement (and each amendment and supplement thereto) to which he is a party. In
the event that any Optionee fails to execute this Amendment Agreement, the
provisions hereof shall remain in full force and effect as to any Optionees who
have executed this Amendment Agreement and shall in no way be affected, impaired
or invalidated.
14. Effective Date; 280G Approval. This Amendment Agreement shall
be effective as of the Closing Date. In the event that the Merger is not
consummated, this Amendment Agreement shall be null and void. The Optionees
hereby agree that any payment or right that results from the Merger Agreement
and the transactions contemplated thereby (including, without limitation, any
acceleration of vesting of an Option or any payment under Section 5 above) that
would otherwise constitute "a parachute payment" (within the meaning of Section
280G of the Code) shall be subject to the approval of the stockholders of
Avicenna in a vote satisfying the requirements of Section 280G(b)(5) of the
Code.
15. Governing Law. This Amendment Agreement and, notwithstanding
any provision in the Plan or any Option Agreement to the contrary, the Plan and
the Option Agreements, shall be governed by, and construed in accordance with,
the laws of the State of New Jersey without reference to the choice of law
provisions of New Jersey law.
16. References to Plan and Option Agreements. On and after the
Closing Date, all references contained in the Plan and any Option Agreement to
either the Plan or an Option Agreement shall be deemed to be a reference to the
Plan or Option Agreement as amended by this Amendment Agreement. The second
sentence of Section 1 of each Option Agreement is hereby deleted in its
entirety.
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IN WITNESS WHEREOF, Synetic, Avicenna and the Optionees have each
duly executed this Amendment Agreement, or have caused this Amendment Agreement
to be duly executed by their respective officers, as of the Closing Date.
SYNETIC, INC.
By:_________________
Name:
Title:
AVICENNA SYSTEMS CORP.
By:_________________
Name:
Title:
OPTIONEES
