EXHIBIT 10.17
MEDIWARE INFORMATION SYSTEMS, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 11th day of November, 1996, by
and between Mediware Information Systems, Inc., a New York corporation having
its principal place of business at 0000 Xxx Xxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxx
Xxxx 00000 (hereinafter called the "Corporation"), and the individual whose name
and residence appear on the last page of this Agreement (hereinafter called
"Optionee").
W I T N E S S E T H:
WHEREAS, the Optionee is a director and member of the
executive committee of the Corporation; and
WHEREAS, the Optionee has rendered valuable services to the
Corporation of a managerial and financial advisory nature and, pursuant to this
Agreement, the Optionee has agreed to remain available to continue to render
such services in consideration of an option to purchase shares of common stock
of the Corporation.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for other good and valuable consideration, the parties
hereto hereby agree as follows:
1. Grant of Option: The Corporation hereby grants to the
Optionee, under the terms and conditions set forth in this Agreement, as of the
date hereof (the "Grant Date"), an Option ("Option") to purchase the 75,000
shares of common stock, par value $.10 per share, of the Corporation subject to
adjustment in accordance with the terms of this Agreement (which shares are
hereinafter called "Option Shares"). The Option Shares may be purchased by
exercising this Option in accordance with the terms of this Agreement, at the
price of three dollars and fifty cents ($3.50) per share, which price is not
less than the fair market value of a share of such common stock as reported for
the close of business on the last trading day before the Grant Date.
2. Number of Shares and Other Terms of Option. The
Option and exercisability of the Option shall be subject to the
following terms and conditions, and all other terms and con-
ditions set forth elsewhere in this Agreement:
The Option shall become exercisable to the extent of 331/3%,
662/3%, and 100% of the Option Shares on November 1, 1997, November 1, 1998 and
November 1, 1999, respectively, subject to acceleration as provided herein. The
Option shall remain exercisable until November 1, 2001 unless earlier terminated
as provided herein.
It is not intended that this Option shall be an incentive
stock option for purposes of the Internal Revenue Code of 1986.
3. Transferability. This Option may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in
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any manner other than by will or the laws of descent and distribution or to a
member of Optionee's immediate family or Partnership or Trust or other similar
entity all of the members or beneficiaries of which are members of the
Optionee's immediate family. The Option may be exercised during the lifetime of
the Optionee only by Optionee or by his or her guardian or permitted transferee.
The Optionee may designate a Beneficiary.
4. Agreement to Serve; Exercisability.
(a) Agreement to Serve. The Optionee hereby agrees to
render services to the Corporation of a managerial and financial advisory
nature, similar to the services heretofore rendered by Optionee. During the
effectiveness of this Agreement, Optionee shall continue to remain available to
the same degree as heretofore to render such services to the Corporation. The
Optionee's obligation to render such services shall remain effective until death
or total incapacity of Optionee or until he gives notice of termination of
obligation to the Company (which may only be given after February 28, 1997).
(b) Exercisability. An Option may be exercised by the Optionee
only during the continuance of his obligation to render services and for the
additional periods described below.
(c) Termination of Obligation. If the Optionee's obligation to
render service is terminated by notice given at the election of Optionee for any
reason other than death or total incapacity, all exercisable installments which
are exercisable on the date of such notice shall be exercisable by the Optionee
for a period of six (6) months after notice.
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(d) Death; Incapacity. If an Optionee dies or becomes totally
incapacitated, all exercisable installments of the Option which are exercisable
on the date of death or incapacity shall be exercisable by the Optionee or his
representative for a period of twelve (12) months following such death or
incapacity.
(e) Change of Control. In any event constituting a Change of
Control occurs prior to the expiration of the six month or twelve month periods
referred to in clauses (c) and (d) of this paragraph, the Optionee shall be
entitled to exercise his Option with respect to all Option Shares, and any
acceleration, modification, or other action taken pursuant to paragraph 7(b)
shall be effective for all Option Shares then unexercised.
(f) Other. Any such exercise shall be subject to the
satisfaction of all other conditions to exercise contained in this Option.
5.Solicitation of Employees; Confidential Information.
(a) To the extent enforceable under applicable law, the
Optionee hereby agrees that he or she will not, for a period of (12) twelve
months directly or indirectly, employ, or knowingly permit any company or
business organization directly or indirectly controlled by him or her to employ,
any person who is employed by the Corporation or in any manner seek to induce
any such person to leave his or her employment by the Corporation or in any
manner seek to induce any such person to leave his or her employment with the
Corporation.
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(b) The Optionee hereby agrees that he will not at any time,
whether during or after the termination of the Optionee's employment, reveal to
any person or entity any of the trade secrets or confidential information
concerning the products, services, organization, business or finances of the
Corporation or of any third party which the Corporation is under an obligation
to keep confidential (including but not limited to trade secrets or confidential
information respecting inventions, designs, methods, know-how, techniques,
systems, processes, software programs, works of authorship, customer lists,
projects, plans and proposals), except as may be required in the ordinary course
of performing the duties as an Optionee of the Corporation, and the Optionee
shall keep secret all matters entrusted to him and shall not use or attempt to
use any such information in any manner which may injure or cause loss or may be
calculated to injure or cause loss, whether directly or indirectly, to the
Corporation.
(c) Any unexercised Options shall be forfeited immediately
upon a breach of the undertakings, contained in this paragraph 5 as determined
by the Board, any such determination to be final and binding on all parties.
6. No Right to Dividends, Distributions or Voting.
The Optionee shall not have any rights as a shareholder
with respect to any Option Shares until the date of issuance of stock
certificate for such Option Shares upon due exercise of this Option. Until the
issuance of stock certificates, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to Option Shares
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notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other rights for which the record date is prior to the date the
stock certificate is issued except as provided in Section 7 hereof.
7. Adjustment in Option Shares; Change of Control.
(a) Adjustment. If all or any portion of this Option is
exercised subsequent to any stock dividend, split-up, recapitalization,
combination or exchange of shares, merger, consolidation, acquisition of
property or stock, spin-off, reorganization or liquidation, as a result of which
shares of any class shall be issued in respect of outstanding shares of common
stock or shares of common stock shall be changed into the same or a different
number of shares of the same or another class or classes, the person or persons
so exercising this Option shall receive, for the aggregate price payable upon
such exercise of this Option, the aggregate number and class of shares which, if
shares of common stock (as authorized at the Grant Date) had been purchased at
the Grant Date of this Option for the same aggregate price (on the basis of the
option price per share provided in this Option) and had not been disposed of,
such persons or persons would be holding at the time of such exercise, as a
result of such purchase and any such stock dividend, split-up, recapitalization,
combination or exchange of shares, merger, consolidation, acquisition of
property or stock, spin-off, reorganization or liquidation; provided, however,
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that no fractional share shall be issued upon any such exercise. If any such
adjustment shall result in the Optionee being entitled to exercise this Option
with respect to a fractional share, the number of shares subject to this Option
shall be reduced to the next lower number of full shares.
In the event of any such change in the outstanding common
stock of the Corporation, the aggregate number and class of shares reserved by
the Corporation for exercise of options to purchase common stock shall be that
number and class which a person, to whom an Option had been granted for all of
such reserved shares of common stock on the date preceding such change, would be
entitled to receive as provided in the first sentence of this Section 7.
(b) Change in Control. For the purposes of this Agreement, a
"Change in Control" shall mean the occurrence of any of the following events and
shall be deemed hostile unless the Board of Directors declares by resolution
adopted prior to the occurrence of such event that the Board consents to such
event:
(i) a third "person", including a "group", as those
terms are used in Section 13(d) of the Securities Exchange Act
of 1934 ("Exchange Act") is or becomes the beneficial owner
(as that term is used in said Section 13(d)) of stock having
thirty percent (30%) or more of the total number of votes that
may be cast for the election of members of the Board;
(ii) all or substantially all of the assets and
business of the Company are sold, transferred or
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assigned to, or otherwise acquired by, any other entity
or entities;
(iii) as a result of, or in connection with, any cash
tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions (a "Transaction"),
the persons who are members of the Board before the
Transaction shall cease to constitute a majority of the Board
of the Company or any successor to the Company; or
(iv) unless the Board otherwise directs by resolution
adopted prior thereto, if a third "person", including a
"group" (as those terms are used in Sections 13(d) of the
Exchange Act) is or becomes the beneficial owner (as that term
is used in Section 13(d) of the Exchange Act), directly or
indirectly, of stock having 20% or more of the total number of
votes that may be cast for the election of directors or a
proxy contest occurs, and, during the period of twenty-four
months following such event, the individuals who at the
occurrence of such event constituted the Board cease for any
reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company's
shareholders, of each new director was approved by a vote of
at least three-quarters of the directors then still in office
who were directors at the occurrence of such event.
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If, in connection with any Change of Control, any Option is
not proposed to be assumed by the surviving corporation or the purchaser in a
manner which will carry out the intention of this Agreement in view of the Board
then, (i) the date on which such Option, or any part thereof not then
exercisable shall be exercised may be accelerated to a date, to be fixed by the
Board, earlier than the Transaction constituting a Change of Control, or a
limited period of exercisability may be so established, or (ii) the terms of
such Option shall be modified so as to permit the acquisition by the Optionee
(during the same period of exercisability as provided under this Agreement) of
any cash, property or securities which would be receivable by him if he owned
the total number of Option Shares immediately prior to such event, (iii) such
other action, if any, shall be taken by the Board through amendment of this
Agreement or otherwise, including surrender for value and/or the grant of rights
to acquire cash, property or securities, as may be necessary or appropriate to
carry out the intent of this Agreement; and/or (iv), in the event of a hostile
Change of Control, if none of the foregoing action is taken, the Option shall
become exercisable as to all Option Shares upon the completion of the Change of
Control.
8. Exercise. This Option shall be exercised by written notice
to the Corporation at its principal place of business, accompanied by full
payment of the purchase price, which notice shall:
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(a) state the election to exercise the Option, the
number of shares in respect of which it is being exercised,
the person in whose name the stock certificate or certificates
for such shares of common stock is to be registered, his
address and social security number (or if more than one, the
names, addresses and social security numbers of such persons);
(b) contain such representations and agreements
as to the holder's investment intent with respect to
such shares of common stock as may be satisfactory to
the Corporation's counsel;
(c) be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by
any person or persons other than the Optionee, be accompanied
by proof, satisfactory to counsel for the Corporation, of the
right of such person or persons to exercise the Option.
Payment of the purchase price of any Option Shares shall be by
certified or bank cashier's or teller's check. The Corporation shall withhold
all income or other taxes required to be withheld by applicable law and shall
remit them to the appropriate taxing authority. To the extent that the
Corporation is required to withhold funds for the payment of income or other
withholding taxes or is legally responsible for the payment of income taxes of
any party exercising the Option or any portion thereof, the party exercising the
Option shall also pay to the Corporation the amount of any withholding tax
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associated with the exercise of the Option net of any amounts otherwise
withheld. The certificate or certificates for shares of common stock as to which
the Option shall be exercised shall be registered in the name of the person or
persons properly exercising the Option.
9. Compliance with Laws and Regulations. The grant and
exercise of this Option, and the Corporation's obligation to sell and deliver
stock hereunder, are subject to such approvals by any regulatory or governmental
agency as may be required and shall comply with all relevant provisions of
applicable Federal and state laws, rules and regulations, including, without
limitation, the Securities Act of 1933, the Securities Exchange Act of 1934,
state securities laws, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange or of any quotation association or
organization upon which the Option Shares may then be listed or quoted, and
shall be further subject to the approval of counsel for the Corporation with
respect to such compliance. The Corporation may imprint any legends on the
Options Shares restricting their subsequent sale or transfer which may be
required by state or Federal law, and the Option Shares shall be subject to
appropriate stop-transfer orders.
No shares shall be delivered upon exercise of the Option until
all laws, rules, regulations and undertakings which the Board may deem
applicable have been complied with.
The Corporation shall not be required to issue shares or
deliver any certificates for shares prior to (i) the listing of such shares on
any stock exchange or quotation system on which the shares may then be listed
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or quoted and (ii) the completion of any registration, qualification, approval
or authorization of such shares under any federal or state law, or any ruling or
regulation or approval or authorization of any governmental body, stock exchange
or organization providing market quotations for securities which the Board
shall, in its sole discretion, determine to be necessary or advisable.
By accepting this Option, the Optionee represents and warrants
for himself and any other person or persons properly exercising this Option that
any and all shares purchased hereunder shall be acquired for investment and not
with a view to distribute such shares. As a condition to the exercise of this
Option in whole or in part at any time, the Optionee or other person or persons
properly exercising the Option shall deliver to the Corporation a written
representation that the shares being purchased are being acquired for investment
and not with a view to distribution, and a consent that the certificate
representing such shares be endorsed to indicate such representation.
The Corporation shall not be liable in the event it is unable
to issue or sell shares of common stock or other securities to the Optionee if
such issuance or sale would be unlawful, nor shall the Corporation be liable if
the issuance or sale of shares of common stock or other securities to an
Optionee is subsequently invalidated.
10. Engagement Rights. Nothing contained in this
Option shall confer upon the Optionee any right to remain as a director of the
Corporation or interfere in any way with the right of the Corporation or any
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subsidiary to terminate any agreement or relationship otherwise terminable.
11. Notice of Disposition. Optionee or his estate or
legal representative shall immediately notify the Corporation in the event of
any disposition of any kind of Option Shares acquired pursuant to this Option.
12. Notices. Any notice to be given under the terms
of this Option shall be addressed to the Corporation or to the Optionee at the
addresses appearing on the first and last pages of this Agreement, or at such
other address as either party may hereafter designate in writing to the other.
13. Interpretation of this Agreement. Any dispute regarding
the interpretation of this Agreement may be submitted by the Optionee or by the
Corporation forthwith to the Board for resolution, which shall review such
dispute at the time of its next regular meeting. The decision of the Board, as
the case may be, with regard to such dispute shall be final and binding upon the
Corporation and upon the Optionee.
14. Successors and Assigns. Except as otherwise
provided herein, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors and assigns of the Corporation and the
administrators, heirs and legal representatives of the Optionee.
15. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
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16. Amendments. No provision of this Agreement shall
be modified, amended, extended or waived except in writing signed
by the parties hereto.
17. Effectiveness. This Agreement is subject to due
authorization by the shareholders of the Corporation at the next
annual meeting.
IN WITNESS WHEREOF, the Corporation has caused this Agreement
to be duly executed in duplicate by its duly authorized officer, and Optionee
has executed this Agreement in duplicate, all as of the date and year first
above written.
MEDIWARE INFORMATION SYSTEMS, INC.
By___________________________
Chairman of the Board
Optionee
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Name and Address
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