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EXHIBIT 99.20
ONHEALTH NETWORK COMPANY
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made effective as of this ______ day of
_________________, 19__, by and between ONHEALTH NETWORK COMPANY, a Washington
corporation (the "Company"), and ______________________________________
("Optionee").
W I T N E S S E T H:
WHEREAS, the Optionee on the date hereof is a key employee, officer,
director, consultant or advisor of the Company or one of its Subsidiaries; and
WHEREAS, the Company wishes to grant a nonqualified stock option to
Optionee to purchase shares of the Company's Common Stock pursuant to the
Company's Amended and Restated 1997 Stock Option Plan (the "Plan"); and
WHEREAS, the Administrator has authorized the grant of a nonqualified
stock option to Optionee and has determined that, as of the effective date of
this Agreement, the fair market value of the Company's Common Stock is $______
per share;
WHEREAS, the Administrator has authorized the grant of a nonqualified
stock option to Optionee and has determined that, as of the effective date of
this Agreement, the fair market value of the Company's Common Stock is $______
per share;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee on the
date set forth above (the "Date of Grant"), the right and option (the "Option")
to purchase all or portions of an aggregate of ____________________________
(________) shares of Common Stock at a per share price of $________ on the terms
and conditions set forth herein, subject to adjustment pursuant to Section 12 of
the Plan. This Option is a nonqualified stock option and will not be treated as
an incentive stock option, as defined under Section 422, or any successor
provision, of the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations thereunder.
2. DURATION AND EXERCISABILITY.
a. The term during which this Option may be exercised
shall terminate on ______________, _____, except as otherwise provided in
Paragraphs 2(b) through 2(e) below. This Option shall become exercisable
according to the following schedule:
Vesting Date Percentage/Number of Shares
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Once the Option becomes exercisable to the extent of one hundred percent (100%)
of the aggregate number of shares specified in Paragraph 1, Optionee may
continue to exercise this Option under the terms and conditions of this
Agreement until the termination of the Option as provided herein. If Optionee
does not purchase upon an exercise of this Option the full number of shares
which Optionee is then entitled to purchase, Optionee may purchase upon any
subsequent exercise prior to this Option's termination such previously
unpurchased shares in addition to those Optionee is otherwise entitled to
purchase.
b. TERMINATION OF RELATIONSHIP (OTHER THAN CHANGE OF
CONTROL, DISABILITY OR DEATH). If Optionee ceases to be an employee, director,
consultant or an advisor of the Company or any Subsidiary for any reason other
than because of a "change of control transaction" as described in Paragraph 2(c)
or because of disability or death, this Option shall completely terminate on the
earlier of (i) the close of business on the three-month anniversary date of the
termination of all such relationships, and (ii) the expiration date of this
Option stated in Paragraph 2(a) above. In such period following such
termination, this Option shall be exercisable only to the extent the Option was
exercisable on the vesting date immediately preceding the date on which all of
Optionee's relationships with the Company or Subsidiary have terminated, but had
not previously been exercised. To the extent this Option was not exercisable
upon the termination of such relationship, or if Optionee does not exercise the
Option within the time specified in this Paragraph 2(b), all rights of Optionee
under this Option shall be forfeited.
c. CHANGE OF CONTROL. If (i) Optionee ceases to be an
employee, director, consultant or advisor of the Company or any Subsidiary
because of a "change of control transaction" (as defined in Section 12 of the
Plan), this Option shall completely terminate on the earlier of (i) the close of
business on the three-month anniversary date of such termination of relationship
with the Company and (ii) the expiration date of this Option stated in Paragraph
2(a) above; provided, however, that if (a) such transaction is treated as a
"pooling of interests" under generally accepted accounting principles and (b)
Optionee is an "affiliate" of the Company or Subsidiary under applicable legal
and accounting principles, this Option shall completely terminate on the later
of (A) the close of business on the three-month anniversary date of the
termination of all such relationships with the Company or any Subsidiary, and
(B) the close of business on the date that is 60 days after the date on which
affiliates are no longer restricted from selling, transferring or otherwise
disposing of the shares of stock received in the change of control transaction.
In such period following termination of Optionee's
relationship with the Company upon a change of control transaction, this Option
shall be fully exercisable unless the acceleration of the exercisability of this
Option has been prevented as provided in Section 12 of the Plan, in which case,
this Option shall be exercisable only to the extent the Option was exercisable
on the vesting date immediately preceding such termination of all of Optionee's
relationships with the Company, but had not previously been exercised. To the
extent this Option was not exercisable upon such termination of such
relationships, or if Optionee does not exercise the Option within the time
period specified in this Paragraph 2(c), all rights of Optionee under this
Option shall be forfeited.
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d. DISABILITY. If Optionee ceases to be an employee,
director, consultant or advisor of the Company or any Subsidiary because of
disability (as such term is defined in Code Section 22(e)(3), or any successor
provision), this Option shall completely terminate on the earlier of (i) the
close of business on the twelve-month anniversary date of the termination of all
such relationships with the Company or any Subsidiary, and (ii) the expiration
date under this Option stated in Paragraph 2(a) above. In such period following
such termination, this Option shall be exercisable only to the extent the Option
was exercisable on the vesting date immediately preceding the termination of all
of Optionee's relationships. If Optionee does not exercise the Option within the
time specified in this Paragraph 2(d), all rights of Optionee under this Option
shall be forfeited.
e. DEATH. In the event of Optionee's death, this Option
shall terminate on the earlier of (i) the close of business on the twelve-month
anniversary date of the date of Optionee's death, and (ii) the expiration date
of this Option stated in Paragraph 2(a) above. In such period following
Optionee's death, this Option may be exercised by the person or persons to whom
Optionee's rights under this Option shall have passed by Optionee's will or by
the laws of descent and distribution only to the extent the Option was
exercisable on the vesting date immediately preceding the date of Optionee's
death. If such person or persons fail to exercise this Option within the time
specified in this Paragraph 2(e), all rights under this Option shall be
forfeited.
3. MANNER OF EXERCISE.
a. GENERAL. The Option may be exercised only by Optionee
(or other proper party in the event of death or incapacity), subject to the
conditions of the Plan and subject to such other administrative rules as the
Administrator may deem advisable, by delivering within the option period the
attached form or such other form acceptable by the Administrator ("Exercise
Notice") to the Company at its principal office. The Exercise Notice shall state
the number of shares as to which the Option is being exercised and shall be
accompanied by payment in full of the option price for all shares designated in
the notice. The exercise of the Option shall be deemed effective upon receipt of
such notice by the Company and upon payment that complies with the terms of the
Plan and this Agreement. The Option may be exercised with respect to any number
or all of the shares as to which it can then be exercised and, if partially
exercised, may be exercised as to the unexercised shares any number of times
during the option period as provided herein.
b. FORM OF PAYMENT. Payment of the option price by
Optionee shall be in the form of cash, personal check, certified check or
previously acquired shares of Common Stock of the Company, or any combination
thereof. Any stock so tendered as part of such payment shall be valued at its
Fair Market Value as provided in the Plan. For purposes of this Agreement,
"previously acquired shares of Common Stock" shall include shares of Common
Stock that are already owned by Optionee at the time of exercise.
c. STOCK TRANSFER RECORDS. As soon as practicable after
the effective exercise of all or any part of the Option, Optionee shall be
recorded on the stock transfer books of the Company as the owner of the shares
purchased, and the Company shall deliver to Optionee one or more duly issued
stock certificates evidencing such ownership. All requisite original issue or
transfer documentary stamp taxes shall be paid by the Company.
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4. MISCELLANEOUS.
a. RIGHTS AS SHAREHOLDER. This Agreement shall not
confer on Optionee any right with respect to the continuance of any relationship
with the Company or any of its Subsidiaries, nor will it interfere in any way
with the right of the Company to terminate any such relationship. Optionee shall
have no rights as a shareholder with respect to shares subject to this Option
until such shares have been issued to Optionee upon exercise of this Option. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which the
record date is prior to the date such shares are issued, except as provided in
Section 12 of the Plan.
b. SECURITIES LAW COMPLIANCE. The exercise of all or any
parts of this Option shall only be effective at such time as counsel to the
Company shall have determined that the issuance and delivery of Common Stock
pursuant to such exercise will not violate any state or federal securities or
other laws. Optionee may be required by the Company, as a condition of the
effectiveness of any exercise of this Option, to agree in writing that all
Common Stock to be acquired pursuant to such exercise shall be held, until such
time that such Common Stock is registered and freely tradable under applicable
state and federal securities laws, for Optionee's own account without a view to
any further distribution thereof and that such shares will be not transferred or
disposed of except in compliance with applicable state and federal securities
laws.
c. MERGERS, RECAPITALIZATIONS, STOCK SPLITS, ETC.
Pursuant and subject to Section 12 of the Plan, certain changes in the number or
character of the Common Stock of the Company (through sale, merger,
consolidation, exchange, reorganization, divestiture (including a spin-off),
liquidation, recapitalization, stock split, stock dividend or otherwise) shall
result in an adjustment, reduction or enlargement, as appropriate, in Optionee's
rights with respect to any unexercised portion of the Option (i.e., Optionee
shall have such "anti-dilution" rights under the Option with respect to such
events, but shall not have "preemptive" rights).
d. WITHHOLDING TAXES. In order to permit the Company to
comply with all applicable federal or state income tax laws or regulations, the
Company may take such action as it deems appropriate to insure that, if
necessary, all applicable federal or state payroll, income or other taxes are
withheld from any amounts payable by the Company to Optionee. If the Company is
unable to withhold such federal and state taxes, for whatever reason, Optionee
hereby agrees to pay to the Company an amount equal to the amount the Company
would otherwise be required to withhold under federal or state law. Optionee
may, subject to the approval and discretion of the Administrator or such
administrative rules it may deem advisable, elect to have all or a portion of
such tax withholding obligations satisfied by delivering shares of the Company's
Common Stock having a fair market value equal to such obligations.
e. NONTRANSFERABILITY. During the lifetime of Optionee,
the accrued Option shall be exercisable only by Optionee or by the Optionee's
guardian or other legal representative, and shall not be assignable or
transferable by Optionee, in whole or in part, other than by will or by the laws
of descent and distribution.
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f. AMENDED AND RESTATED 1997 STOCK OPTION PLAN. The
Option evidenced by this Agreement is granted pursuant to the Plan, a copy of
which Plan has been made available to Optionee and is hereby incorporated into
this Agreement. This Agreement is subject to and in all respects limited and
conditioned as provided in the Plan and the decisions and interpretations of the
Administrator as provided in the Plan. The Plan governs this Option and, in the
event of any questions as to the construction of this Agreement or in the event
of a conflict between the Plan and this Agreement, the Plan shall govern, except
as the Plan otherwise provides.
g. LOCKUP PERIOD LIMITATION. Optionee agrees that in the
event the Company advises Optionee that it plans an underwritten public offering
of its Common Stock in compliance with the Securities Act of 1933, as amended,
and that the underwriter(s) seek to impose restrictions under which certain
shareholders may not sell or contract to sell or grant any option to buy or
otherwise dispose of part or all of their stock purchase rights of the
underlying Common Stock, Optionee hereby agrees that for a period not to exceed
180 days from the date of prospectus, Optionee will not sell or contract to sell
or grant an option to buy or otherwise dispose of this option or any of the
underlying shares of Common Stock without the prior written consent of the
underwriter(s) or its representative(s).
h. BLUE SKY LIMITATION. Notwithstanding anything in this
Agreement to the contrary, in the event the Company makes any public offering of
its securities and determines in its sole discretion that it is necessary to
reduce the number of issued but unexercised stock purchase rights so as to
comply with any state securities or Blue Sky law limitations with respect
thereto, the Board of Directors of the Company shall have the right (i) to
accelerate the exercisability of this Option and the date on which this Option
must be exercised, provided that the Company gives Optionee 15 days' prior
written notice of such acceleration, and (ii) to cancel any portion of this
Option or any other option granted to Optionee pursuant to the Plan which is not
exercised prior to or contemporaneously with such public offering. Notice shall
be deemed given when delivered personally or when deposited in the United States
mail, first class postage prepaid and addressed to Optionee at the address of
Optionee on file with the Company.
i. ACCOUNTING COMPLIANCE. Optionee agrees that, in the
event a "change of control transaction" (as defined in Paragraph 2(c) above) is
treated as a "pooling of interests" under generally accepted accounting
principles and Optionee is an "affiliate" of the Company or any Subsidiary (as
defined in applicable legal and accounting principles) at the time of such
change of control transaction, Optionee will comply with all requirements of
Rule 145 of the Securities Act of 1933, as amended, and the requirements of such
other legal or accounting principles, and will execute any documents necessary
to ensure such compliance.
j. STOCK LEGEND. If applicable, the Company may put an
appropriate legend on the certificates for any shares of Common Stock purchased
by Optionee (or, in the case of death, Optionee's successors) to reflect the
restrictions of Paragraphs 4(b), 4(g), 4(h) and 4(i) of this Agreement.
k. SCOPE OF AGREEMENT. This Agreement shall bind and
inure to the benefit of the Company and its successors and assigns and Optionee
and any successor or successors of Optionee permitted by Paragraph 4(e) above.
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l. ARBITRATION. Any dispute arising out of or relating
to this Agreement or the alleged breach of it, or the making of this Agreement,
including claims of fraud in the inducement, shall be discussed between the
disputing parties in a good faith effort to arrive at a mutual settlement of any
such controversy. If, notwithstanding, such dispute cannot be resolved, such
dispute shall be settled by binding arbitration. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall be a retired state or federal judge or an attorney
who has practiced securities or business litigation for at least ten years. If
the parties cannot agree on an arbitrator within 20 days, any party may request
that the chief judge of the King County Superior Court, Seattle, Washington,
select an arbitrator. Arbitration will be conducted pursuant to the provisions
of this Agreement, and the commercial arbitration rules of the American
Arbitration Association, unless such rules are inconsistent with the provisions
of this Agreement. Limited civil discovery shall be permitted for the production
of documents and taking of depositions. Unresolved discovery disputes may be
brought to the attention of the arbitrator who may dispose of such dispute. The
arbitrator shall have the authority to award any remedy or relief that a court
of this state could order or grant; provided, however, that punitive or
exemplary damages shall not be awarded. The arbitrator may award to the
prevailing party, if any, as determined by the arbitrator, all of its costs and
fees, including the arbitrator's fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable attorneys' fees. Unless otherwise agreed
by the parties, the place of any arbitration proceedings shall be King County,
Washington.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
ONHEALTH NETWORK COMPANY
By:
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Its:
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COMPANY
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OPTIONEE
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OPTION EXERCISE FORM
OnHealth Network Company
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
I hereby exercise stock options granted under the OnHealth Network
Company Amended and Restated 1997 Stock Option Plan (the "Plan") to purchase
shares of Common Stock of OnHealth Network Company (the "Company") as follows:
Date of Options Exercise Number of
Grant Awarded Price Shares Exercised
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As payment for the exercise of the above listed stock options and for
the amount of federal, state and local tax which the Company is required by law
or believes appropriate to withhold and the cost of any applicable state or
federal documentary tax stamps, I am enclosing and elect the following method of
payment (check appropriate box):
[ ] Check (cashier's, certified or personal) in the amount of $____________
[ ] Shares of the Company's Common Stock which have been held by
me for at least six months and which are valued at fair market value
listed below.
Certificate No. Acquisition Date Number of Shares Fair Market Value
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NOTE: All shares of Common Stock must be properly assigned to OnHealth
Network Company.
[ ] Irrevocable instructions, a copy of which is attached hereto
and is subject to the Company's approval, to my broker who must be
acceptable to you to promptly deliver to the Company an amount
sufficient to pay such amounts from either (i) the proceeds of sale
through the broker of a sufficient number of shares purchased by me
upon exercise of the Option as set forth above or (ii) the loan
proceeds from borrowings by me from the broker, and the Company is
hereby instructed to issue and deliver the shares purchased by me upon
exercise of the option as set forth above directly to and in the name
of the broker.
Unless the third payment option above is selected, in which case the
shares will be issued and delivered as described therein, please have _____
certificates issued in blocks of ________ shares per certificate registered as
follows:
Name
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Mailing Address
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Social Security Number
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Very truly yours,
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Signature of Optionee
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Printed Name of Optionee
