Exhibit 10.14
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Name of Optionee
NON-STATUTORY STOCK OPTION AGREEMENT
(____ Stock Plan)
THIS AGREEMENT is entered into by and between CENTENE CORPORATION, a
Wisconsin corporation (hereinafter the "Company"), and the undersigned employee
of the Company (hereinafter the "Optionee").
WHEREAS, the Optionee renders important services to the Company, and the
Company desires to grant a non-statutory stock option to the Optionee;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
herein contained, the parties hereto hereby agree as follows:
1. Grant, Exercisability and Term of Option.
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(a) The Company hereby grants to the Optionee pursuant to the ______
Stock Plan (the "Plan") the option to purchase from the Company upon the terms
and conditions hereinafter set forth the number of shares ("Shares") of the
Series A common stock, one-third cent per share par value of the Company
("Common Stock"), set forth on the signature page below at the purchase price
per Share so set forth (the "Option Price"). The date of grant of this option is
the date set forth on the execution page of this Agreement as the "Option Date."
(b) This option is immediately exercisable in full or in part and
shall remain exercisable until it expires on the tenth anniversary of the Option
Date, unless the option is sooner terminated as hereinafter provided. Only whole
Shares may be purchased pursuant to this option.
2. Conditions and Limitations.
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(a) The option is granted on the condition that the purchase of
Shares hereunder shall be for investment purposes and not with a view to resale
or distribution, except that such condition shall be inoperative if the offering
of Shares subject to the option is registered under the Securities Act of 1933,
as amended, or if in the opinion of counsel for the Company such Shares may be
resold without registration. At the time of the exercise of the option or any
installment thereof, the Optionee will execute such further agreements as the
Company may require to implement the foregoing condition and to acknowledge the
Optionee's familiarity with restrictions on the resale of the Shares under
applicable securities laws, and the Company may stamp such legend of the
certificate representing the Shares as may be necessary or appropriate in light
of the foregoing condition.
(b) The Company will furnish upon request of the Optionee copies of
the articles of incorporation of the Company, as amended, and by-laws of the
Company, as amended, and such publicly available financial and other information
concerning the Company and its business and prospects as may be reasonably
requested by the Optionee in connection with exercise of this option.
(c) The option shall not be transferable otherwise than by will or by
the laws of descent and distribution, and except as provided in Section 4 the
option shall be exercisable during the lifetime of the Optionee by the Optionee
only. Notwithstanding the foregoing, however, if the Optionee is determined to
be mentally incompetent and a guardian or conservator (or other similar person)
is appointed by a court of competent jurisdiction to manage the Optionee's
affairs, the guardian or conservator (or other similar person) may exercise the
option on behalf of the Optionee, provided that such exercise is made within the
time limits prescribed herein.
(d) The option granted in this Agreement is subject to the terms,
conditions and definitions of the Plan, a copy of which is attached hereto. To
the extent that the terms, conditions and definitions of this Agreement are
inconsistent with those of the Plan, those of this Agreement shall govern. The
Optionee hereby accepts this option subject to all such provisions of the Plan
and agrees that all decisions under, and interpretations of, such provisions of
the Plan by the Board of Directors of the Company (the "Board") or the
Committee, as defined in the Plan, shall be final, binding and conclusive upon
the Optionee and his or her heirs.
3. Exercise of Option; Withholding Taxes.
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(a) Written notice of the exercise of the option or any installment
thereof shall be given to the Company specifying the number of Shares for which
the option is exercised and accompanied by payment in full of the Option Price.
Payment shall be made: (a) in cash; (b) by check; (c) by Immediate Sales
Proceeds, as defined below; (d) by delivery and assignment to the Company of
shares of Company stock owned by the Optionee (which shares have a fair market
value, as determined by the Board, not less than the Option Price); or (e) by
any combination of the foregoing. Notwithstanding the foregoing, this option may
not be exercised by delivery and assignment to the Company of shares of Company
stock to the extent that such delivery and assignment would constitute a
violation of the provisions of any law, or related regulation or rule, or any
agreement or Company policy, restricting the transfer or redemption of the
Company's stock. As used herein, the term "Immediate Sales Proceeds" shall mean
the assignment in form acceptable to the Company of the proceeds of a sale of
the Shares acquired on the exercise of this option pursuant to a procedure
approved by the Company. The Company reserves, the right to decline to approve
any such procedure in the Company's sole and absolute discretion.
(b) The Company's obligation to deliver Shares upon exercise of an
option shall be subject to the Optionee's satisfaction of all applicable
federal, state and local income and employment tax withholding obligations.
Without limiting the generality of the foregoing, the Company shall have the
right to deduct from payments of any kind otherwise due to the Optionee any
federal, state or local taxes of any kind required by law to be withheld with
respect to any Shares issued upon exercise of the option.
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4. Termination of Option. In the event that the Optionee ceases to serve as
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a member of the Board of Directors of the Company or any parent or subsidiary of
the Company (collectively, the "Company Group") at any time prior to the
exercise of this option in full, this option shall terminate according to the
following provisions:
(a) If the Optionee ceases to so serve as a director for any reason
other than death or disability (as defined in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended (the "Code")), the Optionee may at any time
within a period of one (1) month after the date of such cessation of service
exercise the option to the extent that the option was exercisable on the date of
such cessation;
(b) If the Optionee ceases to so serve as a director because of
disability (as defined in Section 22(e)(3) of the Code), the Optionee may at any
time within a period of three months after the date of such cessation of service
exercise the option to the extent that the option was exercisable on the date of
such cessation; and
(c) If the Optionee ceases to so serve as a director because of death,
the option, to the extent that the Optionee was entitled to exercise it on the
date of death, may be exercised within a period of three months after the
Optionee's death by the person or persons to whom the Optionee's rights under
the option shall pass by will or by the laws of descent and distribution;
provided, however, that this option may not be exercised to any extent by anyone
after the date of its expiration; and provided, further, that this option may be
exercised only as to Vested Shares (as defined in Section 5) after the Optionee
has ceased to so serve as a director of the Company Group.
5. Rights of Repurchase of Unvested Shares Upon Termination of Service as
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Director. The following rights of repurchase are hereby granted to the Company
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with respect to the Shares (and any shares issued in respect thereto, by reason
of any stock dividends, stock splits, or otherwise, as provided in Section 12):
(a) Repurchase Rights. If the Optionee for any reason or no reason,
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including without limitation voluntary or involuntary termination (whether for
cause or without cause), death or disability, ceases to serve as a member of the
Board of Directors of any member of the Company Group prior to the Expiration
Date (as defined in Section 8), the Company shall have the right, but not the
obligation, to purchase, or to designate one or more purchasers for, all or any
portion of the Shares other than that number, if any, of Shares which are
"Vested Shares" (as defined in paragraph (b) below), at the time in question, at
a price per share equal to the Option Price (all as appropriately adjusted for
stock dividends, stock splits, stock combinations, or similar
recapitalizations).
(b) Exceptions for Vested Shares. Notwithstanding any other provision
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herein contained, a number of Shares, determined on the basis of the number of
"years of service" (as hereinafter defined) in accordance with the following
schedule, shall at the time in question be "Vested Shares" for the purpose of
this Agreement:
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Percentage of Shares
Years of Service which are Vested Shares
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Prior to 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years 100%
provided, however, that in the event of a "Change in Control" of the Company or
if the Optionee is not re-elected as a member of the Board, all of the then
remaining Shares which (but for the application of this clause) are not "Vested
Shares" at the time of the occurrence of such Change in Control event shall
become "Vested Shares" upon such occurrence. The term "Change in Control" shall
mean (i) any sale of all or substantially all of the assets of the Company as a
going concern, other than a sale to a person or group of persons who,
immediately prior thereto, owned 40% or more, in the aggregate, of the Company's
outstanding capital stock on a fully-diluted basis (treating each share of
Company preferred stock as equivalent to the number of shares of common stock
into which it is convertible) (such person or group of persons is hereinafter
referred to as an "Affiliate"); or (ii) any sale (by merger or otherwise) by the
Company's shareholders of capital stock of the Company to a person or group of
persons (other than an Affiliate) which results in such person or group owning
more than 80% of the Company's outstanding capital stock on a fully-diluted
basis (treating each share of Company preferred stock as equivalent to the
number of share of common stock into which it is convertible).
As used herein: the term "Vesting Commencement Date", shall mean the date
so specified on the signature page below; and the term "year(s) of service"
shall mean each full year of service as a director with a member of the Company
Group, measured from the Vesting Commencement Date, it being intended that each
year measured from the Vesting Commencement Date shall consist of 365 days (366
days in a leap year).
(c) Repurchase Procedures. No later than ten days after notice to the
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Optionee from the Company of exercise of its repurchase rights hereunder, the
Optionee shall transfer and assign to the Company the Shares or appropriate part
thereof which the Company has the right to repurchase hereunder (hereinafter,
"Unvested Shares"), and the Company shall pay to the Optionee the purchase price
specified above within twenty days thereafter. All Shares to be sold by the
Optionee to the Company shall be tendered by delivery of the certificate or
certificates representing the Shares, duly endorsed in blank by the Optionee or
with duly endorsed stock assignments attached, all in form suitable for the
proper transfer of the Shares to the Company. If the Company shall fail to send
the Optionee its written notice of exercise of its rights under this Section 5
within one year of the receipt of information that the Optionee ceased to serve
as a director of a member of the Company Group, the repurchase rights with
respect to the Unvested Shares granted by this Section 5 shall terminate and the
Optionee or the Optionee's legal representatives may thereafter transfer the
Shares, subject, however, to such other restrictions on transfer as may then
exist thereon (including, without limitation, those imposed by Sections 6 and 7
hereof).
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(d) No Fractional Shares. The Company shall not purchase any fraction
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of a Share hereunder, and any such fraction resulting from any computation under
this Agreement shall be rounded upward to the nearest whole Share.
6. Restrictions on Transfer of Shares.
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(a) Unvested Shares. Except as provided in paragraph (d) below, the
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Optionee shall not sell, assign, pledge, or in any manner transfer (hereinafter
collectively "transfer") any Unvested Shares or any right or interest therein,
whether voluntarily or by operation of law, or by gift or otherwise.
(b) Vested Shares. Except as provided in paragraph (d) below, the
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Optionee shall not transfer any Vested Shares except after compliance with the
terms and conditions contained in that certain Amended and Restated
Shareholders' Agreement, dated as of September 23, 1998, as may from
time-to-time be amended, by and among the Company and its shareholders (the
"Shareholder Agreement").
(c) "Market Stand Off" Agreement. The Optionee, if requested by the
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Company or any managing underwriter of the Company's securities, shall agree not
to sell or otherwise transfer or dispose of any Shares of the Company held by
the Optionee during the period up to 180 days, as requested by the Company or
such underwriter, following the effective date of a registration statement of
the Company filed under the Securities Act of 1933, as amended (except for any
Company securities held by the Optionee sold pursuant to such registration
statement). Such agreement shall be in writing in form satisfactory to the
Company or such underwriter. The Company may impose stop-transfer instructions
with respect to the Shares subject to the foregoing restriction until the end of
such period.
(d) Exceptions for Transfers to Family. The transfer restrictions
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contained in this Section 6 shall not apply to any transfer of Shares: (i) to or
in trust for the sole benefit of the Optionee, or his or her family group (as
defined herein), or (ii) to another shareholder of the Company, provided that
such transferee agrees in writing to be subject to the terms of Sections 5 and 6
(which writing shall specify the manner in which the vesting provisions of this
Agreement are to apply to any transferred Shares which are not Vested Shares),
and to all other agreements (including the Shareholder Agreement) limiting,
restricting or affecting the transfer of such Optionee's Shares. An Optionee's
"family group" means his or her spouse and the Optionee's descendants (whether
natural or adopted) and any trust solely for the benefit of such persons.
(e) Inconsistence with other Restrictions. In the event of any
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inconsistency between the provisions of this Section 6 and any restriction on
transfer contained in the articles of incorporation or by-laws of the Company or
the Shareholder Agreement, the provisions of Section 6 shall first govern;
provided, however, that the articles of incorporation, or by-laws or Shareholder
Agreement shall continue to govern in circumstances not described in this
Section 6.
7. Failure of Holder to Comply. If the Optionee fails to comply with any
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provision of Sections 5 or 6 hereof or any other agreement limiting, restricting
or affecting the transfer of such Optionee's Shares or the Company's rights to
repurchase the Optionee's Shares, the Company, at its option and in addition to
its other remedies, may suspend the rights of the
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Optionee to vote or to receive dividends on the Shares or may refuse to register
on its books any transfer of the Shares or otherwise to recognize any transfer
or change in the ownership of the Shares or in the right to vote thereon or to
exercise any of the privileges of a stockholder with respect to the Shares,
until the provisions of said Sections 5 or 6 or any such other agreement are
complied with to the satisfaction of the Company. The Optionee, if a director,
shall not vote with respect to any action taken by the Company's Board in
pursuing or exercising its rights under the provisions of Sections 5 or 6
hereof. The provisions of Sections 5 or 6 hereof shall remain applicable whether
or not the Optionee is at the time a director of the Company.
8. Duration of Restrictions. The provisions of Section 5 hereof regarding
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the repurchase of Unvested Shares and Section 13 hereof regarding the escrowing
of Unvested Shares shall continue until the later to occur of (a) the expiration
of five (5) years after the Vesting Commencement Date (the "Expiration Date")
and (b) the closing of any election to purchase made pursuant to Section 5
hereof prior to the Expiration Date.
9. Legends. The restrictions upon transfer of the Shares provided herein
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shall be noted or referred to conspicuously on each certificate issued therefor
subject hereto, such notation or reference to be in addition to any legend
required to be placed thereon by applicable state securities laws, and to read
substantially as follows:
"The securities represented by this certificate are subject to certain
restrictions on transfer and to certain rights of the Company to
purchase such securities and to other limitations, all as set forth in
a Stock Option Agreement between the Corporation and the registered
holder, a copy of which is on file at the principal office of the
Corporation and may be obtained, without charge, from the clerk of the
Corporation."
"This security has not been registered under the Securities Act of
1933, as amended (the "Act"), or any state securities laws, and has
been acquired for investment and not with a view to, or for sale in
connection with, any distribution thereof within the meaning of the
Act. This security is subject to transfer restrictions contained in a
certain Amended and Restated Shareholders' Agreement, and no transfer
of the security shall be made unless the conditions specified in said
Agreement has been fulfilled. A copy of said Agreement is on file and
available for inspection at the principal offices of the Company."
10. Notices. All notices or demands given pursuant to this Agreement shall
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be in writing and shall be deemed to have been sufficiently given if delivered
by hand or sent by certified or registered mail, postage prepaid, addressed to
the Company at its principal office or to the Optionee (or the Optionee's legal
representatives) at the address stated in the Optionee's (or their) notice or at
the Optionee's address appearing on the books of the Company.
11. No Employment Commitment; Tax Enactment. Nothing herein contained
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shall be deemed to be or constitute an agreement or commitment by the Company or
any other member of the Company Group to continue the Optionee in its employ or
in service as a director. The Company makes no representation about the tax
treatment to the Optionee with respect to receipt or exercise of the option or
acquiring, holding or disposing of the Shares, and the
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Optionee represents that the Optionee has had the opportunity to discuss such
treatment (including the possible application of Section 83 of the Code) with
the Optionee's tax adviser. The Optionee shall have no rights as a stockholder
with respect to the Shares subject to the option until the exercise of the
option and the issuance of a stock certificate for the Shares with respect to
which the option shall have been exercised.
12. Adjustment in Shares, etc.
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(a) Appropriate adjustment shall be made by the Board in number, kind,
and exercise price of Shares covered by the option granted hereunder to give
effect to any stock dividends, stock splits, stock combinations,
recapitalizations and other similar changes in the capital structure of the
Company after the Option Date.
(b) In the event of a change of the Common Stock resulting from a
merger or similar reorganization as to which the Company is the surviving
corporation, the number and kind of Shares which thereafter may be purchased
pursuant to the option granted hereunder, and the number and kind of Shares then
subject to the option granted hereunder and the price per Share thereof shall be
appropriately adjusted in such manner as the Board may deem equitable to prevent
dilution or enlargement of the rights available or granted hereunder. Except as
otherwise determined by the Board, a merger or a similar reorganization which
the Company does not survive, or a sale of all or substantially all of the
assets of the Company, shall cause this option to terminate, to the extent not
then exercised, unless any surviving entity agrees to assume the obligations
hereunder.
13. Escrow of Shares. In order to facilitate the performance of the
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Optionee's obligations under this Agreement, the Optionee agrees to the
following escrow provisions:
(a) Until the provisions of this Section 13 terminate, as specified in
Section 8 hereof, all Shares purchased pursuant to this Agreement, which at the
time are Unvested Shares (the "Unreleased Shares"), shall be held in escrow by
the Company, as escrow holder ("Escrow Holder"), together with a stock
assignment executed by the Optionee. The Escrow Holder is hereby directed to
permit transfer of the Unreleased Shares only in accordance with this Agreement
or instructions signed by both the Optionee and the Company. In the event
further instructions are desired by the Escrow Holder, the Escrow Holder shall
be entitled to rely upon directions executed by a majority of the members of the
Board. The Escrow Holder Shall have no personal liability for any act or
omission hereunder while acting in good faith in the exercise of the Escrow
Holder's own judgment.
(b) If the Company exercises its repurchase rights hereunder, the
Escrow Holder, upon receipt of written notice of such exercise from the Company,
shall take all steps necessary to accomplish such repurchase.
(c) Subject to the terms hereof, the Optionee shall have all the
rights of a stockholder with respect to the Shares while they are held in
escrow, including without limitation, the right to vote the Shares and receive
any cash dividends declared thereon. If, from time to time while the Escrow
Holder is holding Unreleased Shares, there is (i) any stock dividend, stock
split or other change in the Shares, or (ii) any merger or sale of all or
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substantially all of the assets or other acquisition of the Company, any and all
new, substituted or additional securities to which the undersigned is entitled
by reason of his or her ownership of the Unreleased Shares shall be immediately
subject to this escrow, deposited with the Escrow Holder and included thereafter
purchaser as "Shares" for purposes of this Agreement and the Company's
repurchase rights under Section 5 hereof.
(d) It is understood and agreed that should any dispute arise with
respect to the delivery, ownership or right of possession of the Shares or other
securities held by the Escrow Holder hereunder, the Escrow Holder is authorized
and directed to retain in the Escrow Holder's possession without liability to
anyone all or any part of said Shares or other securities until such dispute
shall have been settled either by mutual written agreement of the parties
concerned or by a final order, decree or judgment of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but the Escrow Holder shall be under no duty whatsoever to institute
or defend any such proceedings.
(e) The Escrow Holder reserves the right, upon notice to the Company
and the Optionee, to resign from the Escrow Holder's duties as Escrow Holder and
to appoint a substitute Escrow Holder.
(f) The responsibility of the Escrow Holder hereunder is limited to
the use of good faith and reasonable care in the performance of the Escrow
Holder's obligations, and the Escrow Holder shall not be liable for the
performance of any duties except those expressly provided by this Agreement to
be performed. The Escrow Holder may rely, and shall be protected in acting or
refraining from acting, upon any written notice or request furnished to the
Escrow Holder hereunder and believed by the Escrow Holder to be genuine and to
have been signed or presented by the proper party or parties.
14. Miscellaneous. This Agreement shall be governed by, and construed and
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enforced in accordance with, the laws of the State of Wisconsin. This Agreement
shall be binding upon and inure to the benefit of the heirs and legal
representatives of the Optionee and the successors and assigns of the Company,
but shall not be assigned by the Optionee at any time without the prior written
permission of the Company, and any such attempted assignment shall be void.
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IN WITNESS WHEREOF the parties have executed this Stock Option
Agreement as of the Option Date.
___________________________________
Optionee [Sign name]
___________________________________
[Print name]
Address:
Option Date:
Vesting Commencement
Date:
No. of Shares:
Option Price:
Accepted, both as the issuer of the Shares and as Escrow Holder, in accordance
with the terms of the foregoing Option Agreement as of the foregoing Option
Date.
CENTENE CORPORATION
By:________________________________
Xxxxxxx X. Xxxxxxxx,
President and Chief
Executive Officer
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