Restricted Stock Agreement
AGREEMENT made this 30th day of May, 2005, between Eclipsys Corporation, a Delaware
corporation (the “Company”), and Xxxxx X. Xxxxxx (the “Participant”).
For valuable consideration, receipt of which is acknowledged, the parties hereto agree as
1. Purchase of Shares.
The Company shall issue and sell to the Participant, and the Participant shall purchase from
the Company, subject to the terms and conditions set forth in this Agreement, 60,000 shares (the
“Shares”) of common stock, $.01 par value, of the Company (“Common Stock”), at a purchase price of
$0.01 per share. The aggregate purchase price for the Shares shall be paid by the Participant by
check payable to the order of the Company or such other method as may be acceptable to the Company.
Upon receipt by the Company of payment for the Shares, the Company shall issue the Shares to the
Participant and document the issuance by delivering to the Participant one or more certificates in
the name of the Participant for that number of Shares purchased by the Participant, or causing the
Participant’s ownership of the Shares to be reflected by book entry transfer. The Participant
agrees that the Shares shall be subject to the purchase options set forth in Section 2 of this
Agreement and the restrictions on transfer set forth in Section 4 of this Agreement.
The Shares are granted to the Participant pursuant to the Company’s Amended and Restated 2000
Stock Incentive Plan, as amended (the “Plan”). Determinations made and definitions used in
connection with the Shares by reference to the provisions of the Plan shall be governed by the Plan
as it exists on this date.
2. Purchase Option.
(a) In the event that the Participant ceases to be employed by the Company for any reason or
no reason, with or without cause, prior to May 30, 2010, the Company shall have the right and
option (the “Purchase Option”) to purchase from the Participant, for a sum of $0.01 per share (the
“Option Price”) and in the manner described below, some or all of the Shares that are Unvested
Shares (as described in Section 3) as of the date of termination of employment.
(b) For purposes of this Agreement, employment with the Company shall include employment with
a parent or subsidiary of the Company.
(c) In the event that the Participant’s employment with the Company is terminated by reason of
death or Disability (as defined in the Employment Agreement to be entered into between the Company
and the Participant (the “Employment Agreement”)), the number of the Shares for which the Purchase
Option becomes exercisable shall be fifty percent (50%) of the number of Unvested Shares for which
the Purchase Option would otherwise be exercisable on the date of termination.
(d) The Company may exercise the Purchase Option by delivering or mailing to the Participant
(or his estate), within 90 days after the termination of the employment of the Participant with the
Company, a written notice of exercise of the Purchase Option. Such notice shall specify the number
of Shares to be purchased. If and to the extent the Purchase Option is not so exercised by the
giving of such a notice within such 90-day period, the Purchase Option shall automatically expire
and terminate effective upon the expiration of such 90-day period.
(e) Within 10 days after delivery to the Participant of the Company’s notice of the exercise
of the Purchase Option pursuant to subsection (d) above, the Participant (or his estate) shall
tender to the Company at its principal offices the certificate or certificates representing the
Shares which the Company has elected to purchase in accordance with the terms of this Agreement (if
certificates for such Unvested Shares have been issued to the Participant), duly endorsed in blank
or with duly endorsed stock powers attached thereto, all in form suitable for the transfer of such
Shares to the Company. Promptly following its receipt of such certificate or certificates, or
concurrently with delivery of the notice of exercise of the Purchase Option if certificates for
Unvested Shares have not been issued to the Participant, the Company shall pay to the Participant
the aggregate Option Price for such Shares (provided that any delay in making such payment shall
not invalidate the Company’s exercise of the Purchase Option with respect to such Shares, but the
Company shall not become the owner of any Shares until the Option Price for such Shares is paid).
(f) After the time at which any Shares are required to be delivered to the Company for
transfer to the Company pursuant to subsection (e) above, the Company shall not pay any dividend to
the Participant on account of such Shares or permit the Participant to exercise any of the
privileges or rights of a stockholder with respect to such Shares, but shall, in so far as
permitted by law, treat the Company as the owner of such Shares.
(g) The Option Price may be payable, at the option of the Company, in cancellation of all or a
portion of any outstanding indebtedness of the Participant to the Company or in cash (by check) or
(h) The Company shall not purchase any fraction of a Share upon exercise of the Purchase
Option, and any fraction of a Share resulting from a computation made pursuant to Section 2 of this
Agreement shall be rounded to the nearest whole Share (with any one-half Share being rounded
(i) The Company may assign its Purchase Option to one or more persons or entities.
(a) On any given date, Shares that would be Unvested Shares (as defined below) if the Purchase
Option became exercisable on that date will be considered Unvested Shares, and Shares that would
not be Unvested Shares on that date will be considered vested Shares. Vested Shares are no longer
subject to the Purchase Option or restrictions on transfer pursuant to this Agreement.
(b) “Unvested Shares” means the total number of Shares multiplied by the Applicable Percentage
at the Measurement Date. The “Measurement Date” shall be the time the Purchase Option becomes
exercisable by the Company; provided, however, that, in the event the employment of the Participant
is terminated by the Company for any reason other than Cause, death or Disability, or by the
Participant with Good Reason, as described in Section 6(a) of the Employment Agreement, the
Measurement Date shall be the first anniversary of the time the Purchase Option becomes exercisable
by the Company. The “Applicable Percentage” shall be (i) 100% for any Measurement Date during the
period ending May 30, 2006, (ii) for Measurement Dates during the 48-month period ending May 30,
2010, a percentage equal to (x) 100% less (y) 1.667% for each month having elapsed from the date of
this Agreement until the Measurement Date, and (iii) zero for Measurement Dates on or after May 30,
2010. For purposes of this definition, a “month” shall be deemed to be the monthly period ending
on the 30th day of each consecutive calendar month (or the last day of February). Notwithstanding
the foregoing, in the event the employment of the Participant is terminated in connection with a
Change in Control as described in Section 6(d) of the Employment Agreement, the Applicable
Percentage shall immediately become zero.
4. Restrictions on Transfer.
The Participant shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of,
by operation of law or otherwise (collectively “transfer”) any Shares, or any interest therein,
that are Unvested Shares, except that the Participant may transfer such Shares (i) to or for the
benefit of any spouse, children, parents, uncles, aunts, siblings, grandchildren and any other
relatives approved by the Board of Directors (collectively, “Approved Relatives”) or to a trust
established solely for the benefit of the Participant and/or Approved Relatives, provided
that such Shares shall remain subject to this Agreement (including without limitation the
restrictions on transfer set forth in this Section 4 and the Purchase Option) and such permitted
transferee shall, as a condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and conditions of this Agreement
or (ii) as part of the sale of all or substantially all of the shares of capital stock of the
Company (including pursuant to a merger or consolidation), provided that the securities or
other property received by the Participant in connection with such transaction shall remain subject
to this Agreement.
5. Agreement in Connection with Public Offering.
The Participant agrees, in connection with an underwritten public offering of the Company’s
securities pursuant to a registration statement under the Securities Act, (i) not to sell, make
short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares of
Common Stock held by the Participant (other than those shares included in the offering) without the
prior written consent of the Company or the underwriters managing such initial underwritten public
offering of the Company’s securities for a period of 90 days from the effective date of such
registration statement, and (ii) to execute any agreement reflecting clause (i) above as may be
requested by the Company or the managing underwriters at the time of such offering to support the
marketing of the offering; provided that this section will only apply if all continuing officers
and directors of the Company are also subject to a similar lock-up; and provided further that this
section will not prevent sales pursuant to a 10b5-1 plan established by the Participant prior to
notice of a lock-up required under this section being delivered to the Participant.
6. [Intentionally deleted]
7. Restrictive Legends.
All certificates representing Unvested Shares shall have affixed thereto legends in
substantially the following form, in addition to any other legends that may be required under
federal or state securities laws:
“The shares of stock represented by this certificate are subject to
restrictions on transfer and an option to purchase set forth in a
certain Restricted Stock Agreement between the corporation and the
registered owner of these shares (or his predecessor in interest),
and such Agreement is available for inspection without charge at the
office of the Secretary of the corporation.”
The Company will, upon request by the Participant, issue certificates without
legends representing Shares that are not Unvested Shares.
8. Acquisition Event. Upon the occurrence of an Acquisition Event (as defined in the
Plan), in which holders of shares of Common Stock are entitled to receive in respect of such shares
any additional shares or new or different shares or securities, cash or other consideration
(including, without limitation, a different number of shares of Common Stock)(the “Exchange
Consideration”), then the Participant shall be entitled to receive a proportionate share of the
Exchange Consideration in exchange for any Shares then owned by the Participant, and the repurchase
and other rights of the Company hereunder shall inure to the benefit of the Company’s successor and
shall apply to the Exchange Consideration which the Shares were converted into or exchanged for
pursuant to such Acquisition Event in the same manner and to the same extent as they applied to the
Shares under this Agreement. If, in connection with an Acquisition Event, the Participant in his
discretion agrees in writing that a portion of the cash, securities and/or other property received
upon the conversion or exchange of the Shares is to be placed into escrow to secure indemnification
or similar obligations, the mix between the vested and unvested portion of such cash, securities
and/or other property that is placed into escrow shall be the same as the mix between the vested
and unvested portion of such cash, securities and/or other property that is not subject to escrow.
9. Withholding Taxes; Section 83(b) Election.
(a) The Participant acknowledges and agrees that, to the extent permitted by applicable law,
the Company has the right to deduct from payments of any kind otherwise due to the Participant any
federal, state or local taxes of any kind required by law to be withheld with respect to the
purchase of the Shares by the Participant or the lapse of the Purchase Option.
(b) The Participant has reviewed with the Participant’s own tax advisors the federal, state,
local and foreign tax consequences of this investment and the transactions contemplated by this
Agreement. The Participant is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Participant understands that the
Participant (and not the Company) shall be responsible for the Participant’s own tax liability that
may arise as a result of this investment or the transactions contemplated by this Agreement. The
Participant understands that it may be beneficial in many circumstances to elect to be taxed at the
time the Shares are purchased rather than when and as the Company’s Purchase Option expires by
filing an election under Section 83(b) of the Code with the I.R.S. within 30 days from the date of
THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT’S SOLE RESPONSIBILITY AND NOT THE
COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PARTICIPANT REQUESTS THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PARTICIPANT’S BEHALF.
(a) No Rights to Employment. The Participant acknowledges and agrees that the vesting
of the Shares pursuant to Section 3 hereof is earned only by continuing service as an employee at
the will of the Company (not through the act of being hired or purchasing shares hereunder) or
through vesting in connection with certain specified events of termination of employment. The
Participant further acknowledges and agrees that the transactions contemplated hereunder and the
vesting schedule set forth herein do not constitute an express or implied promise of continued
engagement as an employee or consultant for the vesting period, for any period, or at all.
(b) Adjustments for Stock Splits, Stock Dividends, etc. If there is any stock
split-up, stock dividend, stock distribution or other reclassification of the Common Stock of the
Company during the term of this Agreement, any and all new, substituted or additional securities to
which the Participant is entitled by reason of his ownership of the Unvested Shares shall
immediately become Unvested Shares and be subject to the restrictions on transfer and the other
provisions of this Agreement in the same manner and to the same extent as the Unvested Shares, and
the Option Price shall be appropriately adjusted.
(c) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable to the extent
permitted by law.
(d) Waiver. Any provision for the benefit of the Company contained in this Agreement
may be waived, either generally or in any particular instance, by the Board of Directors of the
(e) Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the Company and the Participant and their respective heirs, executors, administrators, legal
representatives, successors and assigns, subject to the restrictions on transfer set forth in
Section 4 of this Agreement.
(f) Notice. All notices required or permitted hereunder shall be in writing and
deemed effectively given upon personal delivery or five days after deposit in the United States
Post Office, by registered or certified mail, postage prepaid, addressed to the other party hereto
at the address shown beneath his or its respective signature to this Agreement, or at such other
address or addresses as either party shall designate to the other in accordance with this Section
(g) Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns
and pronouns shall include the plural, and vice versa.
(h) Entire Agreement. This Agreement constitutes the entire agreement between the
parties, and supersedes all prior agreements and understandings, relating to the subject matter of
(i) Amendment. This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Participant.
(j) Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the internal laws of the State of Delaware without regard to any applicable
conflicts of laws.
(k) Voting and Other Rights. Except as otherwise provided herein, the Participant
shall have all of the rights of a stockholder with respect to all of the Shares, whether or not
they are Unvested Shares, including without limitation the right to vote such Shares and the right
to receive all dividends or other distributions with respect to such Shares. Notwithstanding the
foregoing, in the event that the Participant does not file an 83(b) election with respect to the
Shares, all dividends with respect to Unvested Shares will be taxable to the Participant as
compensation income and will be subject to all applicable withholding taxes.
(l) Participant’s Acknowledgments. The Participant acknowledges that he or she: (i)
has read this Agreement; (ii) has been represented in the preparation, negotiation, and execution
of this Agreement by legal counsel of the Participant’s own choice or has voluntarily declined to
seek such counsel; (iii) understands the terms and consequences of this Agreement; (iv) is fully
aware of the legal and binding effect of this Agreement; and (v) understands that the law firm of
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, is acting as counsel to the Company in connection with
the transactions contemplated by the Agreement, and is not acting as counsel for the Participant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
Address: 0000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Xxxxx X. Xxxxxx