Exhibit 10.57
IDX SYSTEMS CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the date of the Grant Date, and is
by and between the Company and Xxxxx X. Xxxxx, Xx. (the "Optionee").
1. Grant of Option. The Company hereby grants to the Optionee the Option,
pursuant to the Plan, to purchase an aggregate of One Hundred Forty Seven
Thousand (147,000) shares of Common Stock at a price of $17.75 per share,
purchasable as set forth in, and subject to the terms and conditions of, this
Option and the Plan. The capitalized terms used in this Agreement shall have the
meanings set forth on Schedule A - Definitions, attached hereto. This Option is
not intended to qualify as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code.
2. Exercise of Option and Provisions for Termination.
2.1 Vesting.
2.1.1 Ordinary Vesting. Except as otherwise provided in this
Agreement, this Option may be exercised as to any and all Option Shares at any
time during the period commencing with the Fifth Anniversary Date and ending on
the Expiration Date. This Option may not be exercised at any time after the
Expiration Date.
2.1.2 Accelerated Vesting. Subject to all of the conditions set
forth in this Agreement, Optionee may become entitled to exercise the Option
with respect to a number of the Option Shares prior to the Fifth Anniversary
Date, in accordance with the following provisions:
2.1.2.1 If at any time after the expiration of one year after the
Grant Date the Average Price Per Share is $22.00 or higher, the Option shall
become exercisable with respect to twenty-five percent (25%) of the Option
Shares.
2.1.2.2 If at any time after the expiration of two years after
the Grant Date the Average Price Per Share is $27.00 or higher, the Option shall
become exercisable with respect to that number of Option shares, which when
added to the number of Option Shares with respect to which the Option has
previously become exercisable, will equal fifty percent (50%) of the Option
Shares.
2.1.2.3 If at any time after the expiration of three years after
the Grant Date the Average Price Per Share is $32.00 or higher, the Option shall
become exercisable with respect to that number of Option shares, which when
added to the number of Option Shares with respect to which the Option has
previously become exercisable, will equal seventy-five percent (75%) of the
Option Shares.
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2.1.2.4 If at any time after the expiration of four years after
the Grant Date the Average Price Per Share is $37.00 or higher, the Option shall
become exercisable with respect to that number of Option Shares, which when
added to the number of Option Shares with respect to which the Option has
previously become exercisable, will equal one hundred percent (100%) of the
Option Shares.
2.2 Exercise Procedure. Subject to the conditions set forth in this
Agreement, this Option shall be exercised by the Optionee's delivery of written
notice of exercise to the Secretary of the Company, specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 3 hereof. Such
exercise shall be effective upon receipt by the Secretary of the Company of such
written notice together with the required payment. The Optionee may purchase
less than the number of shares covered hereby, provided that no partial exercise
of this Option may be for any fractional share or for fewer than ten whole
shares.
2.3 Continuous Employment Required. Except as otherwise provided in
this Section 2, this Option may not be exercised unless the Optionee, at the
time he or she exercises this Option, is, and has been at all times since the
date of grant of this Option, an employee of the Company. For all purposes of
this Option, (i) "employment" shall be defined in accordance with the provisions
of section 1.421-7(h) of the regulations under the Code or any successor
regulations, and (ii) if this Option shall be assumed or a new Option
substituted therefor in a transaction to which Section 424(a) of the Code
applies, employment by such assuming or substituting corporation, hereinafter
called the "Successor Corporation") shall be considered for all purposes of this
Option to be employment by the Company.
2.4 Exercise Period Upon Termination of Employment. If the Optionee
ceases to be employed by the Company for any reason, then, except as provided in
Sections 2.5 and 2.6 below, the right to exercise this Option shall terminate 30
days after such cessation (but in no event after the Expiration Date), provided
that, except as set forth in Section 2.5, this Option shall be exercisable only
to the extent that the Optionee was entitled to exercise this Option on the date
of such cessation. Notwithstanding the foregoing, if the Optionee, prior to the
Expiration Date, materially violates the non-competition or confidentiality
provisions of any employment contract, confidentiality or nondisclosure
agreement, the right to exercise this Option shall terminate immediately upon
written notice of such violation given to Optionee by the Company.
2.5 Exercise Period Upon Involuntary Termination, Death or Disability.
If the Optionee dies or becomes disabled prior to the Expiration Date while he
or she is an employee of the Company, or if the Optionee dies within three
months after the Optionee ceases to be an employee of the Company, or if the
Optionee's employment shall terminate involuntarily for any reason, the Option
shall immediately become exercisable in full as to all Option Shares, at any
time or times within the period of one year following the date of death or
disability of the Optionee (but in no event after the Expiration Date). Except
as otherwise indicated by the context, the term "Optionee," as used in this
Option, shall be deemed to include the estate of the Optionee or any
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person who acquires the right to exercise this Option by bequest or inheritance
or otherwise by reason of the death of the Optionee or by legal guardianship,
custodianship or similar reason.
2.6 Resignation of Employment. If the Optionee, prior to the Expiration
Date, voluntarily resigns from employment with the Company, the right to
exercise this Option shall terminate immediately upon such resignation.
3. Payment of Purchase Price.
3.1 Method of Payment. Payment of the purchase price for shares purchased
upon exercise of this Option shall be made (i) by delivery to the Company of
cash or a check to the order of the Company in an amount equal to the purchase
price of such shares, (ii) subject to the consent of the Company, by delivery to
the Company of shares of Common Stock of the Company then owned by the Optionee
having a fair market value equal in amount to the purchase price of such shares,
(iii) by any other means which the Board of Directors determines are consistent
with the purpose of the Plan and with applicable laws and regulations
(including, without limitation, the provisions of Rule 16b-3 under the
Securities Exchange Act of 1934 and Regulations T promulgated by the Federal
Reserve Board), or (iv) by any combination of such methods of payment.
3.2 Valuation of Shares or Other Non-Cash Consideration Tendered in Payment
of Purchase Price. For the purposes hereof, the fair market value of any share
of the Company's Common Stock or other non-cash consideration which may be
delivered to the Company in exercise of this Option shall be determined in good
faith by the Board of Directors of the Company.
3.3 Delivery of Shares Tendered in Payment of Purchase Price. If the
Optionee exercises Options by delivery of shares of Common Stock of the Company,
the certificate or certificates representing the shares of Common Stock of the
Company to be delivered shall be duly executed in blank by the Optionee or shall
be accompanied by a stock power duly executed in blank suitable for purposes of
transferring such shares to the Company. Fractional shares of Common Stock of
the Company will not be accepted in payment of the purchase price of shares
acquired upon exercise of this Option.
3.4 Restrictions on Use of Option Stock. Notwithstanding the foregoing, no
shares of Common Stock of the Company may be tendered in payment of the purchase
price if shares to be so tendered were acquired within twelve (12) months before
the date of such tender, through the exercise of an Option granted under the
Plan or any other stock Option or restricted stock plan of the Company.
4. Delivery of Shares; Compliance with Securities Laws, Etc.
4.1 General. The Company shall, upon payment of the Option price for the
number of shares purchased and paid for, make prompt delivery of such shares to
the Optionee, provided that if any law or regulation requires the Company to
take any action with respect to such shares
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before the issuance thereof, then the date of delivery of such shares shall be
extended for the period necessary to complete such action.
4.2 Listing, Qualification, Etc. This Option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of non-
public information or the satisfaction of any other condition is necessary as a
condition of, or in connection with, the issuance or purchase of shares
hereunder, this Option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure, or to satisfy such other condition.
5. Nontransferability of Option. Except as provided below in this Section 5
and also in Section 2.5 hereof, this Option is personal and no rights granted
hereunder may be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) nor shall any such rights be subject
to execution, attachment or similar process. Upon any unauthorized attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this Option or of
such rights contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon this Option or such rights, this Option and
such rights shall, at the election of the Company, become null and void.
Notwithstanding the foregoing, Optionee may transfer by gift all or any portion
of the Option to any lineal descendent (including any legally adopted child),
spouse or parent, or to any trust or similar entity of which such a person is
the beneficiary.
6. No Special Employment Rights. Nothing contained in the Plan or this
Agreement shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment of the Optionee for any period.
7. No Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this Option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
8. Adjustment Provisions.
8.1 General. If, through, or as a result of, any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different number
or kind of shares or other securities of the Company, or (ii) additional shares
or new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to
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such shares of Common Stock or other securities, the Optionee shall, with
respect to this Option or any unexercised portion hereof, be entitled to the
rights and benefits, and be subject to the limitations, set forth in Section
15(a) of the Plan.
8.2 Board Authority to Make Adjustments. Any adjustments under this
Section 8 will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued pursuant to this Option on
account of any such adjustments
8.3 Limits on Adjustments. No adjustment shall be made under this
Section 8 which would, within the meaning of any applicable provision of the
Code, constitute a modification, extension or renewal of this Option or a grant
of additional benefits to the Optionee.
9. Mergers, Consolidation, Distributions, Liquidations, etc. In the event
of (i) a consolidation or merger, (ii) sale of all or substantially all of the
assets of the Company in which outstanding shares of Common Stock are exchanged
for securities, cash or other property of any other corporation or business
entity, or (iii) a liquidation of the Company, prior to the Expiration Date or
termination of this Option, the Optionee shall, with respect to this Option or
any unexercised portion hereof, be entitled to the rights and benefits, and be
subject to the limitations, set forth in the Plan.
10. Withholding Taxes. The Company's obligation to deliver shares upon the
exercise of this Option shall be subject to the Optionee's satisfaction of all
applicable federal, state and local income and employment tax withholding
requirements, and the Company shall have the right to withhold for such taxes as
from proceeds of the sale of any shares as a result of the exercise of the
Option.
11. Investment Representations; Legends.
11.1 Representations. The Optionee represents, warrants and covenants
that:
11.1.1 Any shares purchased upon exercise of this Option shall be
acquired for the Optionee's account for investment only and not with a view to,
or for sale in connection with, any distribution of the share in violation of
the Securities Act of 1933 (the "Securities Act") or any rule or regulation
under the Securities Act.
11.1.2 The Optionee has had such opportunity as he or she has
deemed adequate to obtain from representatives of the Company such information
as is necessary to permit the Optionee to evaluate the merits and risks of his
or her investment in the Company.
11.1.3 The Optionee is able to bear the economic risk of holding
shares acquired pursuant to the exercise of this Option for an indefinite
period.
11.1.4 The Optionee understands that (A) the shares acquired
pursuant to the exercise of this Option may not be registered under the
Securities Act and may be "restricted
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securities" within the meaning of Rule 144 under the Securities Act; (B) such
shares cannot be sold, transferred or otherwise disposed of unless they are
subsequently registered under the Securities Act or an exemption from
registration is then available; (C) an exemption from registration under Rule
144, or otherwise under the Securities Act may not be available for at least one
year and even then will not be available unless a public market then exists for
the Common Stock, adequate information concerning the Company is then available
to the public, and other terms and conditions of Rule 144 are complied with; and
(D) there is currently a registration statement on file with the Securities and
Exchange Commission with respect to certain shares of Common Stock of the
Company, and a registration statement with respect to shares exercisable under
the Plan by Optionee only, but the Company has no obligation to register any
shares acquired pursuant to the exercise of this Option to keep current any
existing registration or prospectus.
Optionee acknowledges receipt of the current Prospectus for the Plan. By making
payment upon exercise of this Option, the Optionee shall be deemed to have
reaffirmed, as of the date of such payment, the representations made in this
Section 11.
11.2 Legends on Stock Certificates. If required by the Company, all stock
certificates representing shares of Common Stock issued to the Optionee or any
other person upon exercise of this Option shall have affixed thereto legends
substantially in the following form, in addition to any other legends required
by applicable state law:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
transferred, sold or otherwise disposed of in the absence of an
effective registration statement with respect to the shares evidenced
by this certificate, filed and made effective under the Securities Act
of 1933, or an opinion of counsel satisfactory to the Company to the
effect that registration under such Act is not required. The shares of
stock represented by this certificate are subject to certain
restrictions on transfer contained in an Option Agreement, a copy of
which will be furnished upon request by the issuer."
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12. Miscellaneous.
12.1 Except as provided herein, this Option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Optionee.
12.2 All notices under this Option shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their names
below or at such other address as may be designated in writing by either of the
parties to the other.
12.3 This Option shall be governed by and construed in accordance with
the laws of the State of Vermont.
Grant Date: October 16, 2000 IDX SYSTEMS CORPORATION,
a Vermont Corporation
By:/s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx,
Chief Executive Officer
OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing Option and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy
of the Company's current Prospectus for the Plan.
OPTIONEE
/S/ XXXXX X. XXXXX, XX.
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Xxxxx X. Xxxxx, Xx.
Address:_____________________
_____________________________
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