EXHIBIT 4.14
STOCK OPTION
THIS AGREEMENT, made as of the 3rd day of October, 1994 (the "Grant Date"),
between PHP Healthcare Corporation, a Delaware corporation (the "Company"), and
Xxxx X. Xxxx (the "Optionee") in accordance with Section 157 of the Delaware
General Corporation Law.
The parties hereto agree as follows:
1. DEFINITION.
The term "Shares" shall mean the shares of common stock, par
value $.01 per share, of the Company.
2. GRANT OF OPTION.
2.1 The Company hereby grants to the Optionee the right and
option (the "Option") to purchase all or any part of an aggregate of Fifty
Thousand (50,000) whole Shares subject to, and in accordance with, the terms
and conditions set forth in this Agreement. The Shares to be delivered upon
exercise of the Option shall be Shares held by the Company as treasury stock and
not newly issued Shares.
2.2 The Option is not intended to qualify as an Incentive Stock
Option within the meaning of Section 422A of the Internal Revenue Code of 1990
(the "Code") and is not granted pursuant to the Company's Amended and Restated
1986 Stock Option Plan (the "Option Plan").
3. PURCHASE PRICE.
3.1 The price at which the Optionee shall be entitled to purchase
Shares upon the exercise of the Option shall be $9.00 per Share (the "Purchase
Price").
3.2 Payment of the Purchase Price shall be made (i) in cash,
(ii) in the discretion of the Company's Board of Directors, by tender of Shares
owned by the Optionee and registered in the Optionee's name with a fair market
value equal to the cash exercise price of the Option being exercised (in whole
or in part), or (iii) in the discretion of the Company's Board of Directors, by
any combination if (i) and (ii) hereof.
4. TERM OF OPTION.
Subject to earlier termination of the Option in accordance with
Section 5 hereof, the Option shall be exercisable to the extent and in the
manner provided herein for a period of ten (10) years from the Grant Date (the
"Exercise Term").
5. EXERCISABILITY OF OPTION
5.1 The Option is granted pursuant to the Plan and Agreement of
Merger dated as of September 23, 1994, by and among PHP Family Healthcare
Corporation, a Delaware corporation ("Family"), the Company, the Optionee and
certain other parties (the "Merger Agreement"). The Option shall only be
exercisable with respect to 19,000 whole Shares, and shall be terminated and
of no force or effect with respect to the rest of the Shares covered by the
Option, unless on or before December 31, 1996, (i) Family has accrued the JPC
Minimum Target Revenues under Qualifying Contracts, as finally determined in
good faith by Family in accordance with generally accepted accounting
principles consistently applied, or (ii) a Change in Control of PHP shall have
occurred. For this purpose, "JPC Minimum Target Revenues" shall mean (i) total
revenues of at least Fifty Million Dollars ($50,000,000) during the two year
period ending December 31, 1996, and (ii) revenues of at least Fifteen Million
Dollars ($15,000,000) during each calendar year of such period; "Qualifying
Contracts" shall mean contracts entered into by Family in its sole discretion
on or after September 1, 1993, under which it provides managed care products
and services to private sector health insurers, large employers, coalitions of
employers, managed care plans or hospital systems, and which have been
performed or remain in force on December 31, 1996; and "Change in Control"
shall have the meaning set forth in Section 14.4(b) of the Option Plan.
5.2 Except as otherwise provided in Section 5.1 hereof or in this
Agreement, the Option shall entitle the Optionee to purchase, in whole at any
time or in part from time to time, one-half (1/2) of the total number of Shares
covered by the Option after the expiration of one (1) year following the Grant
Date and the remaining one-half (1/2) of the total number of Shares covered by
the Option after the expiration of two (2) years following the Grant Date, and
each such right of purchase shall be cumulative and shall continue, unless
sooner exercised in whole or in part or terminated as herein provided, during
the remaining period of the Exercise Term.
6. MANNER OF EXERCISE.
6.1 Subject to the terms and conditions of this Agreement, the
Option may be exercised by delivery of written notice to the Secretary of the
Company at the Company's principal executive office. Such notice shall state
that the Optionee is electing to exercise the Option and the number of Shares in
respect of which the Option is being exercised and shall be signed by the person
or persons exercising the Option on behalf of the Optionee. If the Company
requests, such person or persons shall (i) deliver this Agreement to the
Secretary of the Company who shall endorse thereon a notation of such exercise
and (ii) provide satisfactory proof as to the authority of such person or
persons to exercise the Option on behalf of the Optionee.
2
6.2 The notice of exercise described in Section 6.1 shall be
accompanied by the Purchase Price for the number of Shares in respect of which
the Option is being exercised.
6.3 Upon receipt of notice of exercise and the Purchase Price for
the Shares in respect of which the Option is being exercised, the Company shall
take appropriate action to effect the transfer to the Optionee of the number of
Shares as to which such exercise was effective.
6.4 The Optionee shall not be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any Shares subject to the
Option until (i) the Option shall have been exercised pursuant to the terms of
this Agreement and the Optionee shall have paid the full Purchase Price for the
number of Shares in respect of which the Option was exercised, (ii) the Company
has complied, in its discretion, with any listing, registration or qualification
requirement of any securities exchange or the National Association of Securities
Dealers, Inc., as the case may be, or under any state or federal law, (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company, and (iv) the Company shall have issued and delivered the Shares
in certificate form to the Optionee, whereupon the Optionee shall have full
voting and other ownership rights with respect to such shares.
7. NO RIGHT TO EMPLOYMENT.
Nothing in this Agreement shall be interpreted or construed to
confer upon the Optionee any right to employment or retention by the Company in
any capacity.
8. ADJUSTMENTS.
In the event that any option under the Option Plan is adjusted
pursuant to Section 14 thereof, the Option shall be adjusted in accordance with
such provision at the same time.
9. AMENDMENT.
This Agreement may be amended or terminated and any terms or
condition hereof may be waived in accordance with a written instrument executed
on behalf of each party hereto.
10. NOTICE.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by cable, telegram, telex or facsimile transmission or by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
3
If to Optionee:
Xxxx X. Xxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
If to the Company:
PHP Healthcare Corporation
00000 Xxxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
11. VALIDITY.
The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
12. HEADINGS.
The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
13. COUNTERPARTS.
This Agreement may be executed by the parties hereto in two or
more counterparts, each of which shall be deemed to be an original instrument,
but all of which together shall be deemed to be one and the same instrument.
14. GOVERNING LAW.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflicts of the laws thereof.
15. PARTIES IN INTEREST.
This Agreement is binding upon and is solely for the benefit
of the parties hereto and their respective successors (but not their assigns).
The Option shall not be transferable by the Optionee other than by will or the
laws of descent and distribution.
4
16. RESOLUTION OF DISPUTES.
Any dispute or disagreement which may arise under, or as a
result of, or in any way relate to, the interpretation, construction or
application of this Agreement shall be determined by the Board of Directors of
the Company. Any such determination shall be final, binding and conclusive on
the Optionee and Company for all purposes.
PHP HEALTHCARE CORPORATION
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Sr. Exec. Vice Pres.
OPTIONEE
/s/ Xxxx X. Xxxx
--------------------------------
Xxxx X. Xxxx
5
