Exhibit 10.20
GOHEALTH.MD, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into
as of this 20th day of June, 2000, by and between GOHEALTH.MD, INC., a Nevada
corporation (the "Company"), and Xxxx X. Xxxxxx ("Optionee").
Background
The Company desires to grant Optionee an option to purchase shares of
common stock of the Company in consideration for financial consulting services
Optionee performed (or will perform) for the Company April 1, 2000 to June 30,
2000.
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:
&WP12-183; 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 $.01 per share (the "Option Shares"):
(i) 20,000 shares of common stock, with an exercise price
of $2.00 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 June 30, 2002 (the "Exercise Period").
2. Manner of Exercise and Terms of Payment.
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 by delivering a certified check or wire
transfer of immediately available funds to the order of the Company for the
entire exercise price. 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
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.
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 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 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;
(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,
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.
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 "Initial Public Offering" means the first public
offering under the 1933 Act of any of the Company's equity securities.
(d) 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.
(e) 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 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.
(f) 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 shares
underlying the Options to the public without registration, 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 1933 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: [to the address set forth on page 1]
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.
(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/ Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx Xxxx X. Xxxxxx
Chief Executive Officer
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 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.
