SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ECLIPSYS CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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ECLIPSYS CORPORATION
1750 CLINT MOORE ROAD
BOCA RATON, FLORIDA 33487
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 8, 2002
The Annual Meeting of Stockholders of Eclipsys Corporation (the "Company")
will be held at its corporate headquarters located at 1750 Clint Moore Road,
Boca Raton, Florida 33487, on Wednesday, May 8, 2002, at 10:00 a.m., local time,
to consider and act upon the following matters:
1. To elect two Class I directors for the ensuing three years.
2. To approve the amendment and restatement of the Company's 2000 Stock
Incentive Plan, the 1999 Stock Incentive Plan, the 1998 Stock Incentive
Plan, and the Amended and Restated 1998 Employee Stock Purchase Plan to
reflect an increase in the number of shares of Voting Common Stock
authorized for issuance under all the Company's stock plans (the 2000
Stock Incentive Plan, the 1999 Stock Incentive Plan, the Amended and
Restated 1998 Employee Stock Purchase Plan, the 1998 Stock Incentive
Plan and the 1996 Stock Plan) from 12,000,000 to 15,000,000.
3. To ratify the selection by the Board of Directors of
PricewaterhouseCoopers LLP as the Company's independent auditors for
the current fiscal year.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on March 19, 2002 will be
entitled to notice of and to vote at the meeting or any adjournment thereof. The
stock transfer books of the Company will remain open following the record date.
By Order of the Board of Directors,
/s/ T. Jack Risenhover, II
T. Jack Risenhoover, II, Secretary
Boca Raton, Florida
April 2, 2002
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO
ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE PROXY IS
MAILED IN THE UNITED STATES.
ECLIPSYS CORPORATION
1750 CLINT MOORE ROAD
BOCA RATON, FLORIDA 33487
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MAY 8, 2002
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Eclipsys Corporation (the "Company") for
use at the Annual Meeting of Stockholders to be held on Wednesday, May 8, 2002
(the "Annual Meeting") and at any adjournment of that meeting. All executed
proxies will be voted in accordance with the stockholders' instructions. If no
choice is specified, executed proxies will be voted in favor of the matters set
forth in the accompanying Notice of Meeting. Any proxy may be revoked by a
stockholder at any time before its exercise by delivery of written revocation or
a subsequently dated proxy to the Secretary of the Company or by voting in
person at the Annual Meeting.
On March 19, 2002, the record date for the determination of stockholders
entitled to vote at the Annual Meeting (the "Record Date"), there were
outstanding and entitled to vote an aggregate of 44,521,403 shares of Voting
Common Stock ("Voting Common Stock") of the Company (constituting all of the
voting stock of the Company). Holders of Voting Common Stock are entitled to one
vote per share.
The Company's Annual Report for the year ended December 31, 2001 is being
mailed to stockholders, along with these proxy materials, on or about April 8,
2002.
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
2001 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS INCLUDED IN THE
COMPANY'S ANNUAL REPORT.
VOTES REQUIRED
The holders of a majority of the shares of Voting Common Stock outstanding
and entitled to vote at the Annual Meeting will constitute a quorum for the
transaction of business at the Annual Meeting. Shares of Voting Common Stock
represented in person or by proxy (including shares which abstain or do not vote
with respect to one or more of the matters presented for stockholder approval)
will be counted for purposes of determining whether a quorum is present at the
Annual Meeting.
The affirmative vote of a plurality of the votes cast by stockholders
entitled to vote on the matter is required for the election of directors. The
affirmative vote of a majority of the shares of Voting Common Stock voting on
the matter is required (i) to approve the amendment and restatement of the 2000
Stock Incentive Plan, the 1999 Stock Incentive Plan, the Amended and Restated
1998 Employee Stock Purchase Plan, and the 1998 Stock Incentive Plan; and (ii)
to ratify the selection by the Board of Directors of PricewaterhouseCoopers LLP
as the Company's independent auditors for the current year.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that they
do not have discretionary authority to vote such shares as to a particular
matter, will not be counted as votes in favor of such matter, and will also not
be counted as shares voting on such matter. Accordingly, abstentions and "broker
non-votes" will have no effect on the voting on matters (such as the election of
directors, the amendments to the stock plans and the ratification of the
selection of the auditors) that require the affirmative vote of a plurality or a
majority of the votes cast or the shares voting on the matter.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the beneficial
ownership of the Company's Voting Common Stock as of March 19, 2002 by (i) each
person or entity who is known by the Company to beneficially own more than 5% of
the outstanding shares of Common Stock; (ii) by each director or nominee for
director; (iii) by each of the executive officers named in the Summary
Compensation Table
1
set forth under the caption "Executive Compensation" below, and (iv) by all
directors and executive officers as a group. Unless otherwise indicated, each
person or entity named in the table has sole voting power and investment power
(or shares such power with his or her spouse) with respect to all shares of
capital stock listed as owned by such person or entity. The Company has no
outstanding shares of Non-Voting Common Stock.
Except as set forth herein, the business address of the named beneficial
owner is c/o Eclipsys Corporation, 1750 Clint Moore Road, Boca Raton, Florida
33487.
<Table>
<Caption>
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OWNED(%)
------------------------------------ --------------------- ----------------
General Atlantic Partners, LLC(2)........................... 7,744,556 17.4%
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, CT 06830
FMR Corp.(3)................................................ 4,045,000 9.1
Harvey J. Wilson(4)......................................... 775,672 1.7
James E. Hall(5)............................................ 390,834 *
John T. Patton, Jr.(6)...................................... 277,631 *
Robert J. Colletti(7)....................................... 108,511 *
T. Jack Risenhoover, II(8).................................. 133,218 *
Steven A. Denning(9)........................................ 7,770,722 17.5
G. Fred DiBona, Jr.(10)..................................... 57,832 *
Eugene V. Fife(11).......................................... 57,832 *
Braden R. Kelly(12)......................................... 7,754,279 17.4
Jay B. Pieper(13)........................................... 834,456 1.9
All executive officers and directors as a group (10
persons)(14).............................................. 10,416,431 22.6
</Table>
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* Less than 1%
(1) The number of shares beneficially owned by each stockholder is determined
under rules promulgated by the Securities and Exchange Commission, and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares
as to which the individual or entity has sole or shared voting power or
investment power and any shares as to which the individual or entity has
the right to acquire beneficial ownership within 60 days after March 19,
2002 through the exercise of any stock option, warrant or other right. The
inclusion herein of such shares, however, does not constitute an admission
that the named stockholder is a direct or indirect beneficial owner of such
shares.
(2) Consists of 788,687 shares owned by General Atlantic Partners 74, L.P.
("GAP 74"), 403,883 shares owned by General Atlantic Partners 48, L.P.
("GAP 48"), 504,674 shares owned by General Atlantic Partners 47, L.P.
("GAP 47"), 3,708,594 shares owned by General Atlantic Partners 38, L.P.
("GAP 38"), 1,052,661 shares owned by General Atlantic Partners 28, L.P.
("GAP 28"), 60,000 shares owned by GapStar, LLC ("GapStar"), 1,114,744
shares owned by GAP Coinvestment Partners, L.P. ("GAPCO") and 111,313
shares owned by GAP Coinvestment Partners II, L.P. ("GAPCO II"). General
Atlantic Partners, LLC ("GAP LLC") is the general partner of GAP 74, GAP
48, GAP 47, GAP 38 and GAP 28. GAP LLC is also the managing member of
GapStar. The managing members of GAP LLC (other than Mr. Klaus Esser) are
also the general partners of GAPCO and GAPCO II. Each of Steven A. Denning
and Braden R. Kelly is a managing member of GAP LLC and a general partner
of GAPCO and GAPCO II. Messrs. Denning and Kelly disclaim beneficial
ownership of such shares and their inclusion herein shall not be deemed an
admission of beneficial ownership.
(3) Consists of (i) 3,927,300 shares owned by Fidelity Management & Research
Company; and (ii) 117,700 shares owned by Fidelity Management Trust
Company, each of which entity is a direct
2
or indirect wholly-owned subsidiary of FMR Corp. This information was
derived from FMR Corp.'s Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2002.
(4) Consists of (i) 524,998 shares issuable upon the exercise of stock options
which are exercisable within 60 days of March 19, 2002; and (ii) 250,674
shares held by an irrevocable trust for the benefit of Mr. Wilson and
members of his family (the "Trust"). The sole trustee of the Trust is an
independent individual not affiliated with Mr. Wilson.
(5) Consists of 390,834 shares issuable upon the exercise of stock options
which are exercisable within 60 days of March 19, 2002.
(6) Includes 273,005 shares issuable upon the exercise of stock options which
are exercisable within 60 days of March 19, 2002.
(7) Consists of 108,511 shares issuable upon the exercise of stock options
which are exercisable within 60 days of March 19, 2002.
(8) Consists of 133,218 shares issuable upon the exercise of stock options
which are exercisable within 60 days of March 19, 2002.
(9) Includes 26,166 shares issuable upon the exercise of stock options which
are exercisable within 60 days of March 19, 2002, plus the sum of 7,744,556
shares of common stock described in footnote (2) above, as Mr. Denning is a
principal of the entities listed in footnote (2).
(10) Includes 26,166 shares issuable upon the exercise of stock options which
are exercisable within 60 days of March 19, 2002.
(11) Includes 42,832 shares issuable upon the exercise of stock options which
are exercisable within 60 days of March 19, 2002.
(12) Includes 9,723 shares issuable upon the exercise of stock options which are
exercisable within 60 days of March 19, 2002, plus the sum of 7,744,556
shares of common stock described in footnote (2) above, as Mr. Kelly is a
principal of the entities listed in footnote (2).
(13) Includes 26,166 shares issuable upon the exercise of stock options which
are exercisable within 60 days of March 19, 2002. Also includes 808,290
shares held by Partners HealthCare System, Inc. ("Partners"). Mr. Pieper is
a Vice President of Partners. Mr. Pieper disclaims beneficial ownership of
the shares held by Partners and their inclusion herein shall not be deemed
an admission of beneficial ownership.
(14) See notes (2) and (4) through (13) above.
ELECTION OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation provides
that the Board of Directors is classified into three classes (designated Class I
directors, Class II directors and Class III directors), with members of each
class holding office for staggered three-year terms. There are currently two
Class I directors, whose terms expire at the Annual Meeting, two Class II
directors, whose terms expire at the 2003 Annual Meeting of Stockholders, and
two Class III directors, whose terms expire at the 2004 Annual Meeting of
Stockholders, in all cases subject to the election and qualification of their
successors and to their earlier death, resignation or removal.
The persons named in the enclosed proxy will vote to elect as Class I
directors the two nominees named below, both of whom are presently Class I
directors of the Company, unless authority to vote for the election of any or
all of the nominees is withheld by marking the proxy to that effect. All of the
nominees have indicated their willingness to serve, if elected, but if any
should be unable or unwilling to serve, proxies may be voted for a substitute
nominee designated by the Board of Directors. Each Class I
3
director will be elected to hold office until the 2005 Annual Meeting of
Stockholders, subject to the election and qualification of his successor and to
his earlier death, resignation or removal.
William E. Ford, a Class I director, resigned from the Board of Directors,
effective February 16, 2001. The Board of Directors unanimously appointed Braden
R. Kelly to serve as a member of the Board of Directors for the remainder of Mr.
Ford's unexpired term as a Class I director. Mr. Kelly is now seeking election
as a Class I director for a new three-year period.
Set forth below, for each incumbent and nominee, are his name and age, his
positions with the Company, his principal occupation and business experience
during the past five years and the year of the commencement of his term as a
director of the Company:
NOMINEES FOR CLASS I DIRECTORS
EUGENE V. FIFE is 61 years old and has served on the Board of Directors
since May 1997. Since September 1999, Mr. Fife has served as the founding
principal of Vawter Capital, LLC, a private investment firm based in
Charlottesville, Virginia. From September 1997 to December 1999, Mr. Fife served
as the co-chairman and chief executive officer of Illuminis, Inc. (formerly
known as Multimedia Medical Systems, Inc.), a medical information systems
company. Mr. Fife was formerly a general partner in Goldman Sachs & Co., where
he served as a member of its Management Committee and as chairman of Goldman
Sachs International. He retired from Goldman Sachs & Co. in 1995, but continues
to serve as a Senior Director of the firm.
BRADEN R. KELLY is 31 years old and has served on the Board of Directors
since February 16, 2001. Mr. Kelly is a managing member of General Atlantic
Partners, LLC, a private equity investment firm focused exclusively on
information technology and communications investments on a global basis, and has
been with General Atlantic since 1995. Mr. Kelly is a director of Predictive
Systems, Inc., a network consulting company focused on the design, performance,
management and security of complex computing networks; Tickets.com, Inc., a
provider of automated ticketing solutions for the performing arts, professional
sports, and live entertainment industries; and HEALTHvision, Inc., a private
company that provides comprehensive Internet solutions to the healthcare
industry.
INCUMBENT CLASS II DIRECTORS
JAY B. PIEPER is 58 years old and has served on the Board of Directors
since May 1996. Since May 1995, Mr. Pieper has served as Vice President of
Corporate Development and Treasury Affairs for Partners HealthCare System, Inc.,
the parent of Brigham and Women's Hospital, Inc. and Massachusetts General
Hospital.
STEVEN A. DENNING is 53 years old and has served on the Board of Directors
since March 1997. Mr. Denning is a managing member of General Atlantic Partners,
LLC, and has been with General Atlantic Partners, LLC since 1980. Mr. Denning is
also a director of EXE Technologies, Inc., a supply chain execution software
company; Manugistics Group, Inc., a supply chain management software company;
Exult, Inc., an Internet-enabled human resources outsourcing company; and
several private information technology companies.
INCUMBENT CLASS III DIRECTORS
HARVEY J. WILSON, the Company's founder, is 63 years old. He served as
President, Chief Executive Officer and Chairman of the Board of Directors from
the founding of the Company in December 1995 until February 1999, and continues
to serve as Chief Executive Officer and Chairman of the Board of Directors. From
January 1984 to December 1995, Mr. Wilson invested privately in software and
technology companies. Mr. Wilson was a co-founder of Shared Medical Systems
Corporation, a healthcare information systems provider. Mr. Wilson is
Co-Chairman of HEALTHvision, Inc.
G. FRED DIBONA is 51 years old and has served on the Board of Directors
since May 1996. Since 1990, Mr. DiBona has been the President and Chief
Executive Officer of Independence Blue Cross and its subsidiaries. Mr. DiBona is
also a director of Magellan Health Services, Inc., a specialized managed
healthcare company; Exelon Corporation, a public energy holding company;
Philadelphia Suburban Corporation, a water utility company; and Tasty Baking
Company, a packaged foods company.
4
BOARD AND COMMITTEE MEETINGS
The Board of Directors has an Executive Development and Compensation
Committee currently composed of Messrs. Denning (Chairman), DiBona and Fife.
This Committee makes recommendations concerning salaries and incentive
compensation for executive officers and administers and grants stock options and
awards pursuant to the Company's stock option plans. The Executive Development
and Compensation Committee met four times during 2001.
The Board of Directors also has an Audit Committee, currently composed of
Messrs. Pieper (Chairman), Fife and Kelly, which reviews the results and scope
of the audit and other services provided by the Company's independent public
accountants. The Audit Committee met five times during 2001.
The Board of Directors met five times during 2001. During 2001, each
director attended at least 75% of the aggregate of the number of Board meetings
and the number of meetings held by all committees on which the director then
served.
DIRECTOR COMPENSATION
Directors are reimbursed for any expenses incurred in connection with
attendance at meetings of the Board Directors or any committee of the Board of
Directors, but are not otherwise compensated for such service. On April 8, 1998,
the non-employee directors (including Messrs. Denning, DiBona, Fife, and Pieper)
were each granted a non-qualified stock option to purchase 13,333 shares of
Voting Common Stock at a purchase price of $13.50 per share under the Company's
1998 Stock Incentive Plan. These options vest annually over a four-year period.
In addition, in July 2000, Messrs. DiBona, Fife, Pieper and Denning were each
granted a non-qualified stock option to purchase 21,000 shares of Voting Common
Stock at a purchase price of $8.25 per share under the Company's 2000 Stock
Incentive Plan. These options vest annually over a three-year period. In
addition, on February 23, 2001, following his appointment to the Board of
Directors, Mr. Braden Kelly was granted a non-qualified stock option to purchase
25,000 shares of Voting Common Stock at a purchase price of $19.68 per share
under the Company's 2000 Stock Incentive Plan. This option vests annually over a
three-year period.
5
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth the total compensation paid or accrued for
the last three years for the Company's Chief Executive Officer and its four
other executive officers (together, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
-------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(1) COMPENSATION(2)
--------------------------- ---- -------- -------- ------------ ---------------
Harvey J. Wilson....................... 1999 $200,000 -- 100,000 $ 1,485
Chairman of the Board and 2000 309,615 $150,000 750,000 4,419
Chief Executive Officer 2001 368,269 150,000 -- 3,063
James E. Hall.......................... 1999 242,308 -- 110,000 3,850
President 2000 329,808 120,000 300,000 155,390(3)
2001 368,269 75,000 -- 21,713(3)
John Patton............................ 1999 272,000 -- 130,000 639
Executive Vice President and Chief 2000 254,808 85,000 275,000 2,952
Operating Officer 2001 311,538 100,000 100,000 2,039
Robert J. Colletti..................... 1999 126,500 -- 51,334 125
Senior Vice President, Chief
Financial 2000 160,981 24,000 80,000 1,710
Officer and Treasurer 2001 208,750 100,000 100,000 1,167
T. Jack Risenhoover, II................ 1999 134,616 -- 53,334 56,385(4)
Senior Vice President and Secretary 2000 147,308 39,000 140,000 1,491
2001 168,269 161,000 -- 1,005
</Table>
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(1) Represents the number of shares covered by options to purchase shares of
Voting Common Stock granted during the applicable year.
(2) Represents Company contributions to group term life insurance policies,
contributions on the Named Executive Officer's behalf to the Company's
401(k) Plan in 2000 and 2001, and with respect to Messrs. Hall and
Risenhoover, reimbursed relocation expenses as described below.
(3) Includes $150,000 and $17,552 in reimbursed relocation expenses for 2000 and
2001, respectively.
(4) Includes $56,299 in reimbursed relocation expenses.
6
STOCK OPTION GRANTS
The following table sets forth grants of stock options to each of the Named
Executive Officers during the year ended December 31, 2001.
OPTION GRANTS IN LAST FISCAL YEAR
<Table>
<Caption>
INDIVIDUAL GRANTS
------------------------------------------------------------ POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL RATES
NUMBER OF TOTAL OPTIONS OF STOCK PRICE APPRECIATION
SECURITIES GRANTED TO EXERCISE OR FOR OPTION TERM(2)
UNDERLYING EMPLOYEES IN BASE PRICE EXPIRATION ---------------------------
NAME OPTIONS GRANTED FISCAL YEAR(1) PER SHARE DATE 5% 10%
---- --------------- --------------- ----------- ---------- ----------- -------------
Harvey J. Wilson...... -- -- -- -- -- --
James E. Hall......... -- -- -- -- -- --
John T. Patton, 8.36% $15.63
Jr.(3).............. 100,000 3/14/11 $982,647 $2,490,223
Robert J. 8.36 13.20
Colletti(4)......... 100,000 9/27/11 830,141 2,103,740
T. Jack Risenhoover, -- --
II.................. -- -- -- --
</Table>
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(1) Total option grants for 2001 equaled 1,196,284.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compound rates of appreciation (5% and 10%) on
the market value of the Voting Common Stock on the date of option grant over
the term of the options. These numbers are calculated based on rules
promulgated by the Securities and Exchange Commission and do not reflect the
Company's estimate of future stock price growth. Actual gains, if any, on
stock option exercises and Voting Common Stock holdings are dependent on the
timing of such exercises and the future performance of the Voting Common
Stock. The rates of appreciation in this table are assumptions only and may
not be achieved, and the amounts reflected may not be received by the
individuals.
(3) Mr. Patton's options vest over three- and four-year periods.
(4) Mr. Colletti's options vest over a four-year period.
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth certain information concerning option
exercises by the Named Executive Officers in 2001 and the number and value of
unexercised options held by each of the Named Executive Officers on December 31,
2001.
7
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<Table>
<Caption>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR END AT FISCAL YEAR END(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
Harvey J. Wilson............ -- -- 420,831 395,835 $3,127,068 $3,364,598
James E. Hall............... 73,334 $1,112,610 258,333 155,000 1,248,673 1,403,349
John T. Patton, Jr. ........ 104,082 1,164,275 106,951 323,967 757,338 1,786,576
Robert J. Colletti.......... 16,000 296,564 73,668 170,332 322,762 783,073
T. Jack Risenhoover, II..... 40,445 709,501 54,578 105,775 180,993 777,972
</Table>
- -------------------------
(1) Represents the difference between the exercise prices and the fair market
value per share of the Voting Common Stock at the date of exercise. The fair
market value was the sale price of the Voting Common Stock at the time of
exercise as reported on the Nasdaq National Market.
(2) Represents the difference between the exercise price and the last sale price
of the Voting Common Stock as reported on the Nasdaq National Market on
December 31, 2001 ($16.75).
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company has a license agreement with Partners HealthCare System, Inc.
("Partners"). Partners was not affiliated with the Company at the time of
negotiation of the license. Jay Pieper, a director of the Company, is Vice
President of Corporate Development and Treasury Affairs for Partners. Under the
terms of this license, the Company may develop, commercialize, distribute and
support certain technology and license it, as well as sell related services, to
other healthcare providers and hospitals throughout the world (with the
exception of the Boston, Massachusetts metropolitan area). Prior to the
Company's initial public offering, no sales of products incorporating the
licensed technology were made and, consequently, no royalties were paid by the
Company pursuant to the license with Partners. The royalty arrangement under the
license terminated upon the Company's initial public offering. After the
Company's initial public offering, the Company sold products incorporating the
licensed technology. The Company is obligated to offer to Partners and certain
of its affiliates a license for internal use, granted on most favored customer
terms, to all new software applications developed by the Company, whether or not
derived from the licensed technology, and major architectural changes to the
licensed technology. Partners and certain of its affiliates are also entitled to
receive internal use licenses, also granted on most favored customer terms, for
any changes to any module or application included in the licensed technology
requiring at least one person-year of technical effort. Additionally, as part of
the agreement, the Company has provided development services to Partners related
to commercializing the intellectual property. Fees paid to the Company for these
development services totaled $976,000, $274,000 and $0 for the years ended
December 31, 1999, December 31, 2000 and December 31, 2001 respectively. In
2001, Partners entered into a contract with the Company for the license of a new
software application and related professional services. This new software
application consisted of an upgrade to an existing software application that
Partners had licensed from Transition Systems, Inc. ("Transition"), an entity
that was acquired by the Company in December 1998. Under this new contract,
Partners paid the Company $953,921 in 2001. As of December 31, 2001, Partners
owed the Company the sum of $203,515 related to this new contract. Partners was
not affiliated with the Company at the time of the negotiation of the Partners
license from Transition.
During 2001, the Company chartered an airplane for corporate purposes from
an aircraft charter company. The Company was charged $845,662 by the charter
company during 2001. One of the aircraft provided for use by the Company was
leased by the charter company from RMSC of West Palm Beach, a company that is
wholly owned by Harvey J. Wilson, the Company's Chairman and Chief Executive
Officer. In connection with these charters, RMSC invoiced the charter company a
total of $525,207 in
8
2001. Mr. Wilson has no ownership interest in the charter company. As of
December 31, 2001, the Company owed $26,799 to the charter company, for amounts
that were not yet due and payable. The Company believes that the terms of the
charters were at least as favorable as those that could have been negotiated
with unaffiliated third parties.
During July 1999, the Company invested in HEALTHvision, Inc.
("HEALTHvision"), a Dallas-based, privately held Internet healthcare company, in
conjunction with VHA, Inc. and entities affiliated with General Atlantic
Partners, LLC. The Company purchased 3,400,000 shares of HEALTHvision common
stock, $.01 par value per share, for $34,000, which represented approximately
34% of the then outstanding capital stock of HEALTHvision. In July 1999, Harvey
J. Wilson, the Company's Chairman and Chief Executive Officer, purchased 45,000
shares of HEALTHvision Series A Convertible Participating Preferred Stock, $.01
par value per share, and warrants to purchase 22,500 shares of HEALTHvision
Series B Convertible Preferred Stock, $.01 par value per share, for $450,000,
which represented approximately 0.45% of the then outstanding capital stock of
HEALTHvision. Since July 1999, Mr. Wilson has served as the Co-Chairman of the
Board of Directors of HEALTHvision. Also in July 1999, entities affiliated with
General Atlantic Partners, LLC purchased 2,000,000 shares of HEALTHvision Series
A Convertible Participating Preferred Stock and warrants to purchase 1,000,000
shares of HEALTHvision Series B Convertible Preferred Stock for $20,000,000,
which represented approximately 20% of the outstanding capital stock of
HEALTHvision. Braden R. Kelly and Steven A. Denning, each a member of the
Company's Board of Directors, are affiliated with General Atlantic Partners,
LLC. During 2001, pursuant to licensing, outsourcing and service agreements
between the Company and HEALTHvision, the Company earned revenues of $2,553,000
primarily related to remote hosting and technology related services under these
arrangements. As of December 31, 2001, the Company had accounts receivable due
of $1,049,000 from HEALTHvision under such arrangements.
During 2001, the Company loaned Mr. Hall an aggregate of $165,000 at an
annual interest rate of 5%. Mr. Hall has repaid the entire indebtedness.
Eclipsys has adopted a policy that all transactions between it and its
executive officers, directors and affiliates must (i) be on terms no less
favorable to Eclipsys than could be obtained from unaffiliated third parties;
and (ii) be approved by a majority of the members of the Board of Directors and
by a majority of the disinterested members of the Board of Directors.
9
EXECUTIVE DEVELOPMENT AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
This report addresses the compensation policies of the Company applicable
to its executive officers during 2001. The Company's executive compensation
program is administered by the Executive Development and Compensation Committee
of the Board of Directors (the "Committee"), which is composed of three
non-employee directors. The Committee is responsible for determining the
compensation package of each executive officer, including the Chief Executive
Officer.
OVERVIEW AND PHILOSOPHY
The Company's executive compensation program is designed to promote the
following objectives:
- To provide competitive compensation that will help attract, retain and
reward highly qualified executives who contribute to the long-term
success of the Company.
- To align management's interests with the success of the Company by
placing a portion of the executive's compensation at risk in relation to
the Company's performance.
- To align management's interests with stockholders by including long-term
equity incentives.
The Committee believes that the Company's executive compensation program
provides an overall level of compensation that is competitive within its
industry and among companies of comparable size and complexity. To ensure that
compensation is competitive, the Company regularly compares its compensation
practices with those of other similar companies and sets its compensation
guidelines based on this review. The Committee also seeks to achieve an
appropriate balance of the compensation paid to a particular individual and the
compensation paid to other executives and attempts to maintain an appropriate
mix of salary and incentive compensation. While compensation data are useful
guides for comparative purposes, the Committee believes that a successful
compensation program also requires the application of judgment and subjective
determinations of individual performance.
EXECUTIVE COMPENSATION PROGRAM
The Company's executive compensation program consists of base salary,
annual incentive compensation in the form of cash bonuses and long-term equity
incentives in the form of stock options. Executive officers also are eligible to
participate in certain benefit programs which are generally available to all
employees of the Company, such as life insurance benefits and the Company's
Employee Stock Purchase Plan and 401(k) savings plan.
BASE SALARY
At the beginning of each year, the Committee establishes an annual salary
plan for the Company's executive officers based on recommendations made by the
Company's Chief Executive Officer. The Committee attempts to set base salary
compensation within the range of salaries of executive officers with comparable
qualifications, experience and responsibilities at other companies in the same
or similar businesses and of comparable size and success. In setting the annual
cash compensation for the Company's executive officers, the Committee reviews
compensation for comparable positions by reviewing compensation data available
in a number of publicly available surveys and databases. All of the companies in
the Peer Group (as defined below) are included, along with other companies, in
the compensation data reviewed. In addition to external market data, salary
determinations depend both upon the Company's financial performance and upon the
individual's performance as measured by certain subjective non-financial
objectives. These non-financial objectives include the individual's contribution
to the Company as a whole, including his or her ability to motivate others,
develop the skills necessary to grow as the Company matures, recognize and
pursue new business opportunities and initiate programs to enhance the Company's
growth and success.
10
ANNUAL INCENTIVE COMPENSATION
The Company's bonus program is designed to provide its key employees with
cash incentives to achieve the Company's financial goals. At the beginning of
each year, the Committee establishes target annual bonuses for each executive
officer, which the executive will receive if the Company achieves its targeted
financial objectives for the year. Cash bonuses are then paid annually based
upon the Company's attainment of these targeted financial objectives for the
year. During 2001, annual cash bonus targets for the Named Executive Officers,
including Mr. Wilson, were between 20% and 96% of base salary.
LONG-TERM EQUITY INCENTIVES
The Company's stock option program is designed to promote the identity of
long-term interests between the Company's employees and its stockholders and to
assist in the retention of executives. The size of option grants is generally
intended by the Committee to reflect the executive's position with the Company
and his or her contributions to the Company. Stock options generally vest over a
three to five year period in order to encourage key employees to continue in the
employ of the Company. In 2001, all stock options were granted at an option
price equal to the fair market value of the Company's Voting Common Stock on the
date of the grant.
BENEFITS
The Company's executive officers are entitled to receive medical and life
insurance benefits and to participate in the Company's 401(k) retirement savings
plan on the same basis as other full-time employees of the Company. The
Company's 2001 Employee Stock Purchase Plan, which is available to virtually all
employees including executive officers, allows participants to purchase shares
at a discount of 15% from the fair market value at the beginning or end of the
applicable purchase period.
The amount of perquisites, as determined in accordance with the rules of
the Securities and Exchange Commission relating to executive compensation, did
not exceed the lesser of 10% of salary, or the sum of $50,000 and bonus, for
2001 for any of the Named Executive Officers.
SUMMARY OF COMPENSATION OF CHIEF EXECUTIVE OFFICER
In 2001, Mr. Wilson, the Company's Chief Executive Officer, received
payments in base salary of $368,269. Mr. Wilson's base compensation was set by
the Compensation Committee based on several factors, including (i) the base
compensation of persons with comparable qualifications, experience and
responsibilities at other companies in the same or similar businesses and of
comparable size and success; (ii) the financial performance of the Company, as
measured by specific objectives for the year; and (iii) Mr. Wilson's
performance, as measured by certain subjective performance criteria for the
year. Mr. Wilson's target bonus of 50% of his base salary was based on targeted
growth in earnings, revenue and market development and improvement in customer
satisfaction and the product development cycle. Based on these measurements, the
Compensation Committee awarded Mr. Wilson an actual bonus of $150,000. Mr.
Wilson did not receive any options to purchase shares of the Company's Voting
Common Stock.
11
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a tax deduction to public companies for certain compensation in excess
of $1 million paid to the company's chief executive officer and the four other
most highly compensated executive officers. Certain compensation, including
qualified performance-based compensation, will not be subject to the deduction
limit if certain requirements are met. In general, the Company structures and
administers its stock option plans in a manner intended to comply with the
performance-based exception to Section 162(m). Nevertheless, there can be no
assurance that compensation attributable to awards granted under the Company's
stock plans will be treated as qualified performance-based compensation under
Section 162(m). In addition, the Compensation Committee reserves the right to
use its judgment to authorize compensation payments that may be subject to the
limit when the Compensation Committee believes such payments are appropriate and
in the best interests of the Company and its stockholders, after taking into
consideration changing business conditions and the performance of its employees.
EXECUTIVE DEVELOPMENT AND
COMPENSATION COMMITTEE
Steven A. Denning
G. Fred DiBona
Eugene V. Fife
12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Denning, DiBona and Fife served during 2001 as members of the
Executive Development and Compensation Committee. None of Messrs. Denning,
DiBona or Fife was at any time during 2001, or at any other time, an officer or
employee of the Company. No interlocking relationships exist between the Board
of Directors or the Executive Development and Compensation Committee and the
board of directors or compensation committee of any other company; nor has any
interlocking relationship existed in the past. See "Certain Relationships and
Transactions" for a description of certain relationships and transactions
between the Company and affiliates of Mr. Wilson.
13
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The Audit Committee of the Company's Board of Directors is composed of
three members and acts under a written charter first adopted and approved on
June 14, 2000. The members of the Audit Committee are independent directors, as
defined by its charter and the rules of the Nasdaq Stock Market. The Audit
Committee reviewed the Company's audited financial statements for the fiscal
year ended December 31, 2001 and discussed these financial statements with the
Company's management. The Audit Committee also reviewed and discussed the
audited financial statements and the matters required by Statement on Auditing
Standards 61 (Communication with Audit Committees) with Pricewaterhouse-
Coopers LLP, the Company's independent auditors.
The Company's independent auditors also provided the Audit Committee with
the written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). In addition,
the Audit Committee discussed with the independent auditors their independence
from the Company. The Audit Committee also considered whether the independent
auditors' provision of certain other, non-audit related services to the Company
is compatible with maintaining such auditors' independence.
Based on its discussions with management and the independent auditors, and
its review of the representations and information provided by management and the
independent auditors, the Audit Committee recommended to the Company's Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001.
BY THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS OF ECLIPSYS CORPORATION.
Jay B. Pieper
Eugene V. Fife
Braden R. Kelly
14
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total stockholder return on the
Voting Common Stock of the Company from August 7, 1998 (the first trading date
following the Company's initial public offering) to December 31, 2001 with the
cumulative total return of (i) U.S. companies traded on the Nasdaq Stock Market
(the "Nasdaq Index"); and (ii) an index of four similar publicly traded
companies (the "Peer Group"). The Peer Group is composed of McKesson HBOC,
Cerner Corporation, Quadramed Corporation and IDX Systems Corporation. Sunquest
Information Systems, Inc. was acquired by Misys Healthcare Systems, Inc. in July
2001 and is no longer part of the Peer Group. This graph assumes the investment
of $100.00 on August 7, 1998 in the Company's Voting Common Stock, the Nasdaq
Index and the Peer Group, and assumes that any dividends are reinvested.
COMPARISON OF 41 MONTH CUMULATIVE TOTAL RETURN
AMONG ECLIPSYS CORPORATION,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND PEER GROUP
[COMPARSION CHART]
<Table>
<Caption>
NASDAQ STOCK MARKET
ECLIPSYS CORPORATION PEER GROUP (U.S.)
-------------------- ---------- -------------------
8/7/98 100.00 100.00 100.00
12/31/98 171.85 96.27 120.19
12/31/99 151.85 36.41 223.35
12/31/00 145.19 56.24 134.34
12/31/01 99.26 58.43 106.60
</Table>
<Table>
<Caption>
ECLIPSYS CORPORATION PEER GROUP NASDAQ STOCK MARKET
-------------------- ---------- --------------------------
8/7/98............................... $100.00 $100.00 $100.00
12/31/98............................... 171.85 96.27 120.19
12/31/99............................... 151.85 36.41 223.35
12/31/00............................... 145.19 56.24 134.34
12/31/01............................... 99.26 58.43 106.60
</Table>
15
APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE
2000 STOCK INCENTIVE PLAN, THE 1999 STOCK INCENTIVE PLAN,
THE 1998 STOCK INCENTIVE PLAN AND THE
AMENDED AND RESTATED 1998 EMPLOYEE STOCK PURCHASE PLAN
On March 29, 2002, the Board of Directors approved, subject to stockholder
approval, the amendment and restatement of the 2000 Stock Incentive Plan (as
amended and restated, the "Amended and Restated 2000 Plan"), 1999 Stock
Incentive Plan (as amended and restated, the "Amended and Restated 1999 Plan"),
the 1998 Stock Incentive Plan (as amended and restated, the "Amended and
Restated 1998 Plan") and the Amended and Restated 1998 Employee Stock Purchase
Plan (as amended and restated, the "Second Amended and Restated Purchase Plan")
to reflect the increase from 12,000,000 to 15,000,000 in the total number of
shares of Voting Common Stock available for issuance in the aggregate under all
of the Company's stock plans (including the Amended and Restated 2000 Plan, the
Amended and Restated 1999 Plan, the Second Amended and Restated Purchase Plan,
the Amended and Restated 1998 Plan, and the 1996 Stock Plan (the "1996 Plan")).
The Board of Directors has previously determined that no further options or
awards may be granted under the 1996 Plan, the 1998 Stock Incentive Plan or the
1999 Stock Incentive Plan. The proposed amendments of the 1998 Stock Incentive
Plan and the 1999 Stock Incentive Plan are intended to ensure that existing
options under such plans remain valid.
SUMMARY OF THE AMENDED AND RESTATED 2000 PLAN
The following is a brief summary of the material terms of the Amended and
Restated 2000 Plan. This summary is qualified in its entirety by reference to
the Amended and Restated 2000 Plan, a copy of which may be obtained from the
Company's Secretary.
DESCRIPTION OF AWARDS
The Amended and Restated 2000 Plan provides for the grant of incentive
stock options intended to qualify under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), nonstatutory stock options, restricted stock
awards and other stock-based awards, including the grant of shares based upon
certain conditions, the grant of securities convertible into Voting Common Stock
and the grant of stock appreciation rights (collectively "Awards").
INCENTIVE STOCK OPTIONS AND NONSTATUTORY STOCK OPTIONS. Optionees receive
the right to purchase a specified number of shares of Voting Common Stock at a
specified option price and subject to such other terms and conditions as are
specified in connection with the option grant. Options may be granted at an
exercise price which may be less than, equal to or greater than the fair-market
value of the Voting Common Stock on the date of grant. Under present law,
however, incentive stock options and options intended to qualify as
performance-based compensation under Section 162(m) of the Code may not be
granted at an exercise price less than the fair market value of the Voting
Common Stock on the date of grant (or less than 110% of the fair market value in
the case of incentive stock options granted to optionees holding more than 10%
of the total combined voting power of the Company and its subsidiaries). Options
may not be granted for a term in excess of ten years (five years in the case of
incentive stock options granted to optionees holding more than 10% of the total
combined voting power of the Company and its subsidiaries). The Amended and
Restated 2000 Plan permits the Board to determine the manner of payment of the
exercise price of options, including through payment by cash, check or in
connection with a "cashless exercise" through a broker, by surrender to the
Company of shares of Voting Common Stock, or by any other lawful means.
RESTRICTED STOCK AWARDS. Restricted stock awards entitle recipients to
acquire shares of Voting Common Stock, subject to the right of the Company to
repurchase all or part of such shares from the recipient in the event that the
conditions specified in the applicable Award are not satisfied prior to the end
of the applicable restriction period established for such Award.
16
OTHER STOCK-BASED AWARDS. Under the Amended and Restated 2000 Plan, the
Board has the right to grant other Awards based upon the Voting Common Stock
having such terms and conditions as the Board may determine, including the grant
of shares based upon certain conditions, the grant of securities convertible
into Voting Common Stock and the grant of stock appreciation rights.
ELIGIBILITY TO RECEIVE AWARDS
Officers, employees, directors, consultants and advisors of the Company and
its subsidiaries (and individuals who have accepted an offer of employment) are
eligible to be granted Awards under the Amended and Restated 2000 Plan. Under
present law, however, incentive stock options may only be granted to employees.
The maximum number of shares with respect to which an Award may be granted to
any participant under the Amended and Restated 2000 Plan may not exceed
2,000,000 shares per calendar year. As of March 19, 2002, approximately 1,400
persons were eligible to receive Awards under the Amended and Restated 2000
Plan, including the Company's five executive officers and five non-employee
directors. The granting of Awards under the Amended and Restated 2000 Plan is
discretionary, and the Company cannot now determine the number or type of Awards
to be granted in the future to any particular person or group.
ADMINISTRATION
The Amended and Restated 2000 Plan is administered by the Board of
Directors. The Board has the authority to adopt, amend and repeal the
administrative rules, guidelines and practices relating to the Amended and
Restated 2000 Plan and to interpret the provisions of the Amended and Restated
2000 Plan. Pursuant to the terms of the Amended and Restated 2000 Plan, the
Board of Directors may delegate authority under the Amended and Restated 2000
Plan to one or more committees of the Board. The Board has authorized the
Executive Development and Compensation Committee to administer certain aspects
of the Amended and Restated 2000 Plan, including the granting of options to
executive officers. Subject to any applicable limitations contained in the
Amended and Restated 2000 Plan, the Board of Directors, the Committee, or any
other committee to whom the Board delegates authority, as the case may be,
selects the recipients of Awards and determines (i) the number of shares of
Voting Common Stock covered by options and the dates upon which such options
become exercisable; (ii) the exercise price of options; (iii) the duration of
options; and (iv) the number of shares of Voting Common Stock subject to any
restricted stock or other stock-based Awards and the terms and conditions of
such Awards, including conditions for repurchase, issue price and repurchase
price.
The Board of Directors is required to make appropriate adjustments in
connection with the Amended and Restated 2000 Plan and any outstanding Awards to
reflect stock dividends, stock splits and certain other events. In the event of
a merger or other acquisition event, the Board of Directors shall provide that
all outstanding options or other stock-based Awards under the Amended and
Restated 2000 Plan be assumed or substituted for by the acquirer. If any of
these events constitutes a Change in Control Event (as defined in the Amended
and Restated 2000 Plan), and within one year after the Change in Control Event,
the participant's employment is terminated, then the assumed or substituted
options or other stock-based Awards will be immediately exercisable in full, or
free from restrictions, as the case may be. In the event of a liquidation or
dissolution, all outstanding options will become immediately exercisable ten
days prior to such event and will terminate upon the occurrence of such event.
If any Award expires or is terminated, surrendered, canceled or forfeited, the
unused shares of Voting Common Stock covered by such Award will again be
available for grant under the Amended and Restated 2000 Plan subject, however,
in the case of incentive stock options to any limitations under the Code.
AMENDMENT OR TERMINATION
No Award may be made under the Amended and Restated 2000 Plan after May 21,
2010, but Awards previously granted may extend beyond that date. The Board of
Directors may at any time amend, suspend or terminate the Amended and Restated
2000 Plan, except that no Award intended to comply
17
with Section 162(m) of the Code shall become exercisable, realizable or vested
after the date of such amendment unless and until such amendment shall have been
approved by the Company's stockholders.
FEDERAL INCOME TAX CONSEQUENCES
The following generally summarizes the United States federal income tax
consequences that generally will arise with respect to awards granted under the
Amended and Restated 2000 Plan. This summary is based on the tax laws in effect
as of the date of this Proxy Statement. Changes to these laws could alter the
tax consequences described below.
Incentive Stock Options. A participant will not have income upon the grant
of an incentive stock option. Also, except as described below, a participant
will not have income upon exercise of an incentive stock option if the
participant has been employed by the Company or its corporate parent or
majority-owned corporate subsidiary at all times beginning with the option grant
date and ending three months before the date the participant exercises the
option. If the participant has not been so employed during that time, then the
participant will be taxed as described below under "Nonstatutory Stock Options."
The exercise of an incentive stock option may subject the participant to the
alternative minimum tax.
A participant will have income upon the sale of the stock acquired under an
incentive stock option at a profit (if sales proceeds exceed the exercise
price). The type of income will depend on when the participant sells the stock.
If a participant sells the stock more than two years after the option was
granted and more than one year after the option was exercised, then all of the
profit will be long-term capital gain. If a participant sells the stock prior to
satisfying these waiting periods, then the participant will have engaged in a
disqualifying disposition and a portion of the profit will be ordinary income
and a portion may be capital gain. This capital gain will be long-term if the
participant has held the stock for more than one year and otherwise will be
short-term. If a participant sells the stock at a loss (sales proceeds are less
than the exercise price), then the loss will be a capital loss. This capital
loss will be long-term if the participant held the stock for more than one year
and otherwise will be short-term.
Nonstatutory Stock Options. A participant will not have income upon the
grant of a nonstatutory stock option. A participant will have compensation
income upon the exercise of a nonstatutory stock option equal to the value of
the stock on the day the participant exercises the option less the exercise
price. Upon sale of the stock, the participant will have capital gain or loss
equal to the difference between the sales proceeds and the value of the stock on
the day the option was exercised. This capital gain or loss will be long-term if
the participant has held the stock for more than one year and otherwise will be
short-term.
Restricted Stock. A participant will not have income upon the grant of
restricted stock unless an election under Section 83(b) of the Code is made
within 30 days of the date of grant. If a timely 83(b) election is made, then a
participant will have compensation income equal to the value of the stock less
the purchase price. When the stock is sold, the participant will have capital
gain or loss equal to the difference between the sales proceeds and the value of
the stock on the date of grant. If the participant does not make an 83(b)
election, then when the stock vests the participant will have compensation
income equal to the value of the stock on the vesting date less the purchase
price. When the stock is sold, the participant will have capital gain or loss
equal to the sales proceeds less the value of the stock on the vesting date. Any
capital gain or loss will be long-term if the participant held the stock for
more than one year and otherwise will be short-term.
Tax Consequences to the Company. There will be no tax consequences to the
Company except that the Company will be entitled to a deduction when a
participant has compensation income. Any such deduction will be subject to the
limitations of Section 162(m) of the Code.
SUMMARY OF THE AMENDED AND RESTATED 1999 PLAN
The terms of the Amended and Restated 1999 Plan are substantially identical
to the terms of the Amended and Restated 2000 Plan as described above, except
that under the Amended and Restated 1999 Plan, upon the occurrence of an
Acquisition Event (as defined in the Amended and Restated 1999 Plan)
18
which constitutes a Change in Control Event (as defined in the Amended and
Restated 1999 Plan), all assumed or substituted options will be immediately
exercisable in full, regardless of whether the optionee is terminated following
the Change in Control Event. The tax consequences of the Awards under the
Amended and Restated 1999 Plan are similar to those of the Amended and Restated
2000 Plan. This summary is qualified in its entirety by reference to the Amended
and Restated 1999 Plan, a copy of which may be obtained from the Secretary of
the Company.
SUMMARY OF THE AMENDED AND RESTATED 1998 PLAN
The terms of the Amended and Restated 1998 Plan are substantially identical
to the terms of the Amended and Restated 2000 Plan as described above, except
that under the Amended and Restated 1998 Plan, upon the occurrence of an
Acquisition Event (as defined in the Amended and Restated 1998 Plan) which
constitutes a Change in Control Event (as defined in the Amended and Restated
1998 Plan), all assumed or substituted options will be immediately exercisable
in full, regardless of whether the optionee is terminated following the Change
in Control Event. The tax consequences of the Awards under the Amended and
Restated 1998 Plan are similar to those of the Amended and Restated 2000 Plan.
This summary is qualified in its entirety by reference to the Amended and
Restated 1998 Plan, a copy of which may be obtained from the Secretary of the
Company.
SUMMARY OF THE SECOND AMENDED AND RESTATED PURCHASE PLAN
The following is a brief summary of the material terms of the Second
Amended and Restated Purchase Plan. This summary is qualified in its entirety by
reference to the Purchase Plan, a copy of which may be obtained from the
Secretary of the Company.
GENERAL
The Second Amended and Restated Purchase Plan provides eligible employees
with the opportunity to purchase shares of the Company's Voting Common Stock at
a discounted price.
ELIGIBILITY
Each employee of the Company and its eligible subsidiaries, including any
director who is also an employee, is eligible to participate in the Second
Amended and Restated Purchase Plan, provided he or she (i) is employed by the
Company or any eligible subsidiary on the applicable offering commencement date;
(ii) is regularly employed by the Company or any eligible subsidiary for more
than 20 hours per week; and (iii) has been employed by the Company or any
eligible subsidiary for at least three months prior to enrolling in the Second
Amended and Restated Purchase Plan.
OFFERINGS
The Second Amended and Restated Purchase Plan is implemented through a
series of offerings, each of which is three months in length. Participants in an
offering purchase shares with funds set aside through payroll withholding. An
employee may elect to have a percentage from 1% to up to 15% withheld from his
or her pay for purposes of purchasing shares under the Second Amended and
Restated Purchase Plan, subject to certain limitations on the maximum number of
shares that may be purchased.
PURCHASE PRICE
The price at which shares may be purchased during each offering is the
lower of (i) 85% of the closing price of the Voting Common Stock as reported on
the Nasdaq National Market on the date that the offering commences; or (ii) 85%
of the closing price of the Voting Common Stock as reported on the Nasdaq
National Market on the date that the offering terminates.
19
NUMBER OF SHARES; ADJUSTMENTS
Currently, an aggregate of 12,000,000 shares of Voting Common Stock may be
issued pursuant to the Second Amended and Restated Purchase Plan, less shares
issued or subject to outstanding options under the Amended and Restated 2000
Plan, the Amended and Restated 1999 Plan, the Amended and Restated 1998 Plan and
the 1996 Plan. If the proposed amendment is approved at the Annual Meeting, the
maximum number of shares issuable under the Second Amended and Restated Purchase
Plan will increase to 15,000,000 shares, less shares issued or subject to
outstanding options under the Amended and Restated 2000 Plan, the Amended and
Restated 1999 Plan, the Amended and Restated 1998 Plan and the 1996 Plan. The
Second Amended and Restated Purchase Plan contains provisions relating to
adjustments to be made under the Second Amended and Restated Purchase Plan in
the event of stock splits and other similar events and certain mergers,
acquisitions and other extraordinary corporate transactions involving the
Company.
ADMINISTRATION
The Second Amended and Restated Purchase Plan is administered by the Board
of Directors of the Company, which has the authority to make rules and
regulations for the administration of the Second Amended and Restated Purchase
Plan. Pursuant to the terms of the Second Amended and Restated Purchase Plan,
the Board of Directors may delegate authority under the Second Amended and
Restated Purchase Plan to a committee of the Board.
AMENDMENT OR TERMINATION
The Board of Directors may at any time terminate or amend the Second
Amended and Restated Purchase Plan, provided that no amendment may be made
without prior approval of the stockholders of the Company if such approval is
required by Section 423 of the Code, and in no event may any amendment be made
which would cause the Second Amended and Restated Purchase Plan to fail to
comply with Section 423 of the Code.
FEDERAL INCOME TAX CONSEQUENCES
The following generally summarizes the United States Federal income tax
consequences that will arise with respect to participation in the Second Amended
and Restated Purchase Plan and with respect to the sale of common stock acquired
under the Second Amended and Restated Purchase Plan. This summary is based on
the tax laws in effect as of the date of this proxy statement. Changes to these
laws could alter the tax consequences described below.
Tax Consequences to Participants. A participant will not have income upon
enrolling in the Second Amended and Restated Purchase Plan or upon purchasing
stock at the end of an offering.
A participant may have both compensation income and capital gain income if
the participant sells stock that was acquired under the Second Amended and
Restated Purchase Plan at a profit (if sales proceeds exceed the purchase
price). The amount of each type of income will depend on when the participant
sells the stock. If the participant sells the stock more than two years after
the commencement of the offering during which the stock was purchased and more
than one year after the date that the participant purchased the stock, then the
participant will have compensation income equal to the lesser of:
- 15% of the value of the stock on the day the offering commenced; and
- the participant's profit.
Any excess profit will be long-term capital gain.
If the participant sells the stock prior to satisfying these waiting
periods, then he or she will have engaged in a disqualifying disposition. Upon a
disqualifying disposition, the participant will have compensation income equal
to the value of the stock on the day he or she purchased the stock less the
purchase price. If the participant's profit exceeds the compensation income,
then the excess profit will be
20
capital gain. This capital gain will be long-term if the participant has held
the stock for more than one year and otherwise will be short-term.
If the participant sells the stock at a loss (if sales proceeds are less
than the purchase price), then the loss will be a capital loss. This capital
loss will be long-term if the participant has held the stock for more than one
year and otherwise will be short-term.
Tax Consequences to the Company. There will be no tax consequences to the
Company except that the Company will be entitled to a deduction when a
participant has compensation income upon a disqualifying disposition. Any such
deduction will be subject to the limitations of Section 162(m) of the Code.
BOARD RECOMMENDATION
The Board of Directors believes that the approval of the amendment and
restatement of the 2000 Stock Incentive Plan, the 1999 Stock Incentive Plan, the
1998 Stock Incentive Plan and the Amended and Restated 1998 Employee Stock
Purchase Plan is in the best interests of the Company and its stockholders and
therefore recommends that the stockholders vote FOR this proposal.
21
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP
as the Company's independent auditors for the current fiscal year.
PricewaterhouseCoopers LLP has served as the Company's independent auditors
since the Company's inception. Although stockholder approval of the Board of
Directors' selection of PricewaterhouseCoopers LLP is not required by law, the
Board of Directors believes that it is advisable to give stockholders an
opportunity to ratify this selection. If this proposal is not approved at the
Annual Meeting, the Board of Directors may reconsider its selection of
PricewaterhouseCoopers LLP.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Annual Meeting and will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from stockholders.
AUDIT FEES
PricewaterhouseCoopers LLP billed the Company an aggregate of $256,000 in
fees for professional services rendered in connection with the audit of the
Company's financial statements for the most recent fiscal year and the reviews
of the financial statements included in each of the Company's Quarterly Reports
on Form 10-Q during the year ended December 31, 2001, including reimbursed
expenses of $25,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PricewaterhouseCoopers LLP did not bill the company for any professional
services rendered to the Company and its affiliates for the fiscal year ended
December 31, 2001, in connection with financial information systems design or
implementation, the operation of the Company's information system or the
management of its local area network.
ALL OTHER FEES
PricewaterhouseCoopers LLP billed the Company an aggregate of $185,000 in
fees for other services rendered to the Company and its affiliates for the year
ended December 31, 2001.
OTHER MATTERS
The Board of Directors does not know of any other matters which may come
before the Annual Meeting. However, if any other matters are properly presented
to the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote, or otherwise act, in accordance with their judgment
on such matters.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews, and the Company reserves the right to retain
outside agencies for the purpose of soliciting proxies. Brokers, custodians and
fiduciaries will be requested to forward proxy soliciting material to the owners
of stock held in their names, and, as required by law, the Company will
reimburse them for their out-of-pocket expenses in this regard.
Pursuant to Securities Exchange Act Rule 14a-8(e), proposals of
stockholders intended to be presented at the 2003 Annual Meeting of Stockholders
must be received by the Company at its principal
22
office at 1750 Clint Moore Road, Boca Raton, Florida 33487, not later than
December 3, 2002 for inclusion in the proxy statement for that meeting. Under
the Company's By-Laws, proposals of stockholders intended to be presented at the
2003 Annual Meeting of Stockholders that do not comply with Rule 14a-8(e) must
be received by the Company at its principal office in Boca Raton, Florida no
less than 60 days nor more than 90 days prior to the date of that meeting. If
public notice of the annual meeting of stockholders of the Company is not given
at least 70 days before the meeting date, any stockholder proposal must be
received by the Company within 10 days after such public notice. A copy of the
Company's By-Laws may be obtained from the Secretary of the Company.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
GAP Coinvestment Partners II, L.P., an affiliate of Mr. Denning and Mr.
Kelly, failed to timely report its purchase of 522 shares of the Company's
Voting Common Stock in November 2001. The report was filed several days late.
The Company is not aware of any other failure by its officers, directors and
holders of 10% of the Company's Voting Common Stock to comply in a timely manner
during 2001 with Section 16(a) filing requirements.
By Order of the Board of Directors,
/s/ T. Jack Risenhover, II
T. Jack Risenhoover, II, Secretary
April 2, 2002
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. STOCKHOLDERS WHO ATTEND
THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN IF THEY HAVE SENT IN THEIR
PROXIES.
23
APPENDIX A
ECLIPSYS CORPORATION
AMENDED AND RESTATED 2000 STOCK INCENTIVE PLAN
1. Purpose
The purpose of this 2000 Stock Incentive Plan (the "Plan") of Eclipsys
Corporation, a Delaware corporation (the "Company"), is to advance the interests
of the Company's stockholders by enhancing the Company's ability to attract,
retain and motivate persons who make (or are expected to make) important
contributions to the Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the
interests of such persons with those of the Company's stockholders. Except where
the context otherwise requires, the term "Company" shall include any of the
Company's present or future subsidiary corporations as defined in Section 424(f)
of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the "Code") and any other business venture (including,
without limitation, a joint venture or limited liability company) in which the
Company has a significant interest, as determined by the Board of Directors of
the Company (the "Board").
2. Eligibility
All of the Company's employees, officers, directors, consultants and advisors (
and any individuals who have accepted an offer for employment) are eligible to
be granted options, restricted stock, or other stock-based awards (each, an
"Award") under the Plan. Any person who has been granted an Award under the Plan
shall be deemed a "Participant".
3. Administration, Delegation
(a) Administration by Board of Directors. The Plan will be
administered by the Board. The Board shall have authority to grant Awards and to
adopt, amend and repeal such administrative rules, guidelines and practices
relating to the Plan as it shall deem advisable. The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or any
Award in the manner and to the extent it shall deem expedient to carry the Plan
into effect and it shall be the sole and final judge of such expediency. All
decisions by the Board shall be made in the Board's sole discretion and shall be
final and binding on all persons having or claiming any interest in the Plan or
in any Award. No director or person acting pursuant to the authority delegated
by the Board shall be liable for any action or determination relating to or
under the Plan made in good faith.
(b) Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). All references in
the Plan to the "Board" shall mean the Board or a Committee of the Board to the
extent that the Board's powers or authority under the Plan have been delegated
to such Committee.
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 4(c),
Awards may be made under the Plan for up to an aggregate number of shares of
Common Stock equal to (i) 15,000,000 less (ii) the sum of (W) the number of
shares as to which "Awards" have previously been made or shares issued under the
Company's Amended and Restated 1999 Stock Incentive Plan (the "1999 Plan") , as
such number shall be reduced to the extent shares become reavailable for
issuance pursuant to Section 4(a) of the 1999 Plan, (X) the number of shares as
to which options are then outstanding under the Company's Second Amended and
Restated 1998 Employee Stock Purchase Plan (the "Purchase Plan") and the number
of shares previously sold under the Purchase Plan, (Y) the number of shares as
to which options are then outstanding under the Company's 1996 Stock Plan, as
amended (the "1996 Plan") and the number of shares previously issued upon the
exercise of options granted under the 1996 Plan and the number of shares of
restricted or unrestricted stock granted under the 1996 Plan then outstanding
and (Z) the number of shares as to which "Awards" have previously been made or
shares issued under the Company's Amended and Restated 1998 Stock Incentive Plan
(the "1998 Plan"), as such number shall be reduced to the extent shares become
reavailable for issuance pursuant to Section 4(a) of the 1998 Plan. If any Award
expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part or results in any Common Stock not
being issued, the unused Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan, subject, however, in the case
of Incentive Stock Options (as hereinafter defined), to any limitation required
under the Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
(b) Per-Participant Limit. Subject to adjustment under Section 4(c),
for Awards granted after the Common Stock is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the maximum number of shares of
Common Stock with respect to which an Award may be granted to any Participant
under the Plan shall be 2,000,000 per calendar year. The per-Participant limit
described in this Section 4(b) shall be construed and applied consistently with
Section 162(m) of the Code.
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock
(each, an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".
(b) Incentive Stock Options. An Option that the Board intends to be
an "incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
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(c) Exercise Price. The Board shall establish the exercise price at
the time each Option is granted and specify it in the applicable option
agreement; provided, however, that the exercise price of Incentive Stock Options
shall not be less than 100% of the fair market value of the Common Stock, as
determined by the Board, at the time the Option is granted.
(d) Duration of Options. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement; provided, however, that no Option will be granted
for a term in excess of 10 years.
(e) Exercise of Option. Options may be exercised only by delivery to
the Company of a written notice of exercise signed by the proper person or by
any other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.
(f) Payment Upon Exercise. Common Stock purchased upon the exercise
of an Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the
Company;
(2) except as the Board may, in its sole discretion, otherwise
provide in an option agreement, by (i) delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price or (ii) delivery by the
Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash or
a check sufficient to pay the exercise price;
(3) to the extent permitted by the Board and explicitly provided
in an option agreement (i) by delivery of shares of Common Stock owned by the
Participant valued at their fair market value as determined by ( or in a ,manner
approved by) the Board in good faith ("Fair Market Value"), provided (i) such
method of payment is then permitted under applicable law and (ii) such Common
Stock was owned by the Participant at least six months prior to such delivery,
or (iii) by payment of such other lawful consideration as the Board may
determine; or
(4) by any combination of the above permitted forms of payment
6. Restricted Stock
(a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a "Restricted Stock Award").
(b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board,
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deposited by the Participant, together with a stock power endorsed in blank,
with the Company (or its designee). At the expiration of the applicable
restriction periods, the Company (or such designee) shall deliver the
certificates no longer subject to such restrictions to the Participant or if the
Participant has died, to the beneficiary designated, in a manner determined by
the Board, by a Participant to receive amounts due or exercise rights of the
Participant in the event of the Participant's death (the "Designated
Beneficiary"). In the absence of an effective designation by a Participant,
Designated Beneficiary shall mean the Participant's estate.
7. Other Stock-Based Awards
The Board shall have the right to grant other Awards based upon the Common Stock
having such terms and conditions as the Board may determine, including the grant
of shares based upon certain conditions, the grant of securities convertible
into Common Stock and the grant of stock appreciation rights.
8. Adjustments for Changes in Common Stock and Certain Other Events
(a) Changes in Capitalization. In the event of any stock split,
reverse stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock, other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-participant limit set forth in Section 4(b), (iii) the number and
class of security and exercise price per share subject to each outstanding
Option, (iv) the repurchase price per security subject to each outstanding
Restricted Stock Award, and (v) the terms of each other outstanding stock-based
Award shall be appropriately adjusted by the Company (or substituted Awards may
be made, if applicable) to the extent the Board shall determine, in good faith,
that such an adjustment (or substitution) is necessary and appropriate. If this
Section 8(a) applies and Section 8(c) also applies to any event, Section 8(c)
shall be applicable to such event, and this Section 8(a) shall not be
applicable.
(b) Liquidation or Dissolution. In the event of a proposed
liquidation or dissolution of the Company, the Board shall upon written notice
to the Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award or other Award granted under the Plan
at the time of the grant of such Award.
(c) Acquisition and Change in Control Events
(1) Definitions
(a) An "Acquisition Event" shall mean:
(i) any merger or consolidation of the Company
with or into another entity as a result of
which the Common Stock is converted into or
exchanged for the right to receive cash,
securities or other property; or
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(ii) any exchange of shares of the Company for
cash, securities or other property pursuant to
a statutory share exchange transaction.
(b) A "Change in Control Event" shall mean:
(i) the acquisition by an individual, entity or
group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the
"Exchange Act")(a "Person") of beneficial
ownership of any capital stock of the
Company if, after such acquisition, such
Person beneficially owns (within the meaning
of Rule 13d-3 promulgated under the Exchange
Act) more than 30% of either (x) the
then-outstanding shares of Common Stock of
the Company (the "Outstanding Company Common
Stock") or (y) the combined voting power of
the then-outstanding securities of the
Company entitled to vote generally in the
election of directors (the "Outstanding
Company Voting Securities"); provided,
however, that for purposes of this
subsection (i), the following acquisitions
shall not constitute a Change in Control
Event: (A) any acquisition directly from the
Company (excluding an acquisition pursuant
to the exercise, conversion or exchange of
any security exercisable for, convertible
into or exchangeable for Common Stock or
voting securities of the Company, unless the
Person exercising, converting or exchanging
such security acquired such security
directly from the Company or an underwriter
or agent of the Company), (B) any
acquisition by any employee benefit plan (or
related trust) sponsored or maintained by
the Company or any corporation controlled by
the Company, (C) any acquisition by any
corporation pursuant to a Business
Combination (as defined below) which
complies with clauses (x) and (y) of
subsection (iii) of this definition or (D)
any acquisition by General Atlantic Partners
28, L.P., General Atlantic Partners 38,
L.P., General Atlantic Partners 47, L.P.,
GAP Coinvestment Partners, L.P. and any
other entities controlled by or under common
control with any of the foregoing entities,
within the meaning of the Exchange Act (each
such party is referred to herein as an
"Exempt Person");
(ii) such time as the Continuing Directors (as
defined below) do not constitute a majority
of the Board (or, if applicable, the Board
of Directors of a successor corporation to
the Company), where the term "Continuing
Director" means at any date a member of the
Board (x) who was a member of
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the Board on the date of the initial
adoption of this Plan by the Board or (y)
who was nominated or elected subsequent to
such date by at least a majority of the
directors who were Continuing Directors at
the time of such nomination or election or
whose election to the Board was recommended
or endorsed by at least a majority of the
directors who were Continuing Directors at
the time of such nomination or election;
provided, however, that there shall be
excluded from this clause (y) any individual
whose initial assumption of office occurred
as a result of an actual or threatened
election contest with respect to the
election or removal of directors or other
actual or threatened solicitation of proxies
or consents, by or on behalf of a person
other than the Board; or
(iii) the consummation of a merger, consolidation,
reorganization, recapitalization or
statutory share exchange involving the
Company or a sale or other disposition of
all or substantially all of the assets of
the Company (a "Business Combination"),
unless, immediately following such Business
Combination, each of the following two
conditions is satisfied: (x) all or
substantially all of the individuals and
entities who were the beneficial owners of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such Business
Combination beneficially own, directly or
indirectly, more than 50% of the
then-outstanding shares of common stock and
the combined voting power of the
then-outstanding securities entitled to vote
generally in the election of directors,
respectively, of the resulting or acquiring
corporation in such Business Combination
(which shall include, without limitation, a
corporation which as a result of such
transaction owns the Company or
substantially all of the Company's assets
either directly or through one or more
subsidiaries) (such resulting or acquiring
corporation is referred to herein as the
"Acquiring Corporation") in substantially
the same proportions as their ownership of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities,
respectively, immediately prior to such
Business Combination and (y) no Person
(excluding Exempt Persons, the Acquiring
Corporation or any employee benefit plan (or
related trust) maintained or sponsored by
the Company or by the Acquiring Corporation)
beneficially owns, directly or indirectly,
30% or more of the then-outstanding shares
of common stock of the Acquiring
Corporation, or of the combined voting
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power of the then-outstanding securities of
such corporation entitled to vote generally
in the election of directors (except to the
extent that such ownership existed prior to
the Business Combination).
c) "Good Reason" shall mean any significant diminution
in the Participant's title, authority, or
responsibilities from and after such Acquisition
Event or Change in Control Event, as the case may
be, or any reduction in the annual cash compensation
payable to the Participant from and after such
Acquisition Event or Change in Control Event, as the
case may be, or the relocation of the place of
business at which the Participant is principally
located to a location that is greater than 50 miles
from the current site.
(d) "Cause" shall mean any (i) willful failure by the
Participant, which failure is not cured within 30
days of written notice to the Participant from the
Company, to perform his or her material
responsibilities to the Company or (ii) willful
misconduct by the Participant which affects the
business reputation of the Company. The Participant
shall be considered to have been discharged for
"Cause" if the Company determines, within 30 days
after the Participant's resignation, that discharge
for Cause was warranted.
(2) Effect on Options
(a) Acquisition Event. Upon the occurrence of an
Acquisition Event (regardless of whether such event
also constitutes a Change in Control Event), or the
execution by the Company of any agreement with
respect to an Acquisition Event (regardless of
whether such event will result in a Change in
Control Event), the Board shall provide that all
outstanding Options shall be assumed, or equivalent
options shall be substituted for, by the acquiring
or succeeding corporation (or an affiliate thereof);
provided that if such Acquisition Event also
constitutes a Change in Control Event, except to the
extent specifically provided to the contrary in the
instrument evidencing any Option or any other
agreement between a Participant and the Company,
such assumed or substituted options shall become
immediately exercisable in full if, on or prior to
the first anniversary of the date of the
consummation of the Acquisition Event, the
Participant's employment with the Company or the
acquiring or succeeding corporation is terminated
for Good Reason by the Participant or is terminated
without Cause by the Company or the acquiring or
succeeding corporation. For purposes hereof, an
Option shall be considered to be assumed if,
following consummation of the Acquisition Event, the
Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately
prior to the consummation of the Acquisition Event,
the consideration (whether cash, securities or other
property) received as a result of the Acquisition
Event by holders of Common Stock for each share of
Common Stock held immediately prior to the
consummation of the
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Acquisition Event (and if holders were offered a
choice of consideration, the type of consideration
chosen by the holders of a majority of the
outstanding shares of Common Stock); provided,
however, that if the consideration received as a
result of the Acquisition Event is not solely common
stock of the acquiring or succeeding corporation (or
an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon
the exercise of Options to consist solely of common
stock of the acquiring or succeeding corporation (or
an affiliate thereof) equivalent in fair market
value to the per share consideration received by
holders of outstanding shares of Common Stock as a
result of the Acquisition Event.
Notwithstanding the foregoing, if the
acquiring or succeeding corporation (or an affiliate
thereof) does not agree to assume, or substitute
for, such Options, then the Board shall, upon
written notice to the Participants, provide that all
then unexercised Options will become exercisable in
full as of a specified time prior to the Acquisition
Event and will terminate immediately prior to the
consummation of such Acquisition Event, except to
the extent exercised by the Participants before the
consummation of such Acquisition Event; provided,
however, that in the event of an Acquisition Event
under the terms of which holders of Common Stock
will receive upon consummation thereof a cash
payment for each share of Common Stock surrendered
pursuant to such Acquisition Event (the "Acquisition
Price"), then the Board may instead provide that all
outstanding Options shall terminate upon
consummation of such Acquisition Event and that each
Participant shall receive, in exchange therefor, a
cash payment equal to the amount (if any) by which
(A) the Acquisition Price multiplied by the number
of shares of Common Stock subject to such
outstanding Options (whether or not then
exercisable) exceeds (B) the aggregate exercise
price of such Options.
(b) Change in Control Event that is not an Acquisition
Event. Following the occurrence of a Change in
Control Event that does not also constitute an
Acquisition Event, except to the extent specifically
provided to the contrary in the instrument
evidencing any Option or any other agreement between
a Participant and the Company, each such Option
shall be immediately exercisable in full if, on or
prior to the first anniversary of the date of the
consummation of the Change in Control Event, the
Participant's employment with the Company or the
acquiring or succeeding
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corporation is terminated for Good Reason by the
Participant or is terminated without Cause by the
Company or the acquiring or succeeding corporation.
(3) Effect on Restricted Stock Awards
(a) Acquisition Event that is not a Change in Control
Event. Upon the occurrence of an Acquisition Event
that is not a Change in Control Event, the
repurchase and other rights of the Company under
each outstanding Restricted Stock Award shall inure
to the benefit of the Company's successor and shall
apply to the cash, securities or other property
which the Common Stock was converted into or
exchanged for pursuant to such Acquisition Event in
the same manner and to the same extent as they
applied to the Common Stock subject to such
Restricted Stock Award.
(b) Change in Control Event. Following the occurrence of
a Change in Control Event (regardless of whether
such event also constitutes an Acquisition Event),
except to the extent specifically provided to the
contrary in the instrument evidencing any Restricted
Stock Award or any other agreement between a
Participant and the Company, each such Restricted
Stock Award shall immediately become free from all
conditions or restrictions if, on or prior to the
first anniversary of the date of the consummation of
the Change in Control Event, the Participant's
employment with the Company or the acquiring or
succeeding corporation is terminated for Good Reason
by the Participant or is terminated without Cause by
the Company or the acquiring or succeeding
corporation.
(4) Effect on Other Awards
(a) Acquisition Event that is not a Change in Control
Event. The Board shall specify the effect of an
Acquisition Event that is not a Change in Control
Event on any other Award granted under the Plan at
the time of the grant of such Award.
(b) Change in Control Event. Following the occurrence of
a Change in Control Event (regardless of whether
such event also constitutes an Acquisition Event),
except to the extent specifically provided to the
contrary in the instrument evidencing any Award or
any other agreement between a Participant and the
Company, each such Award shall immediately become
fully exercisable, realizable, vested or free from
conditions or restrictions if, on or prior to the
first anniversary of the date of the consummation of
the Change in Control Event, the Participant's
employment with the Company or the acquiring or
succeeding corporation is terminated for Good
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Reason by the Participant or is terminated without
Cause by the Company or the acquiring or succeeding
corporation.
(5) Limitations. Notwithstanding the foregoing provisions of
this Section 8(c), if the Change in Control Event is intended to be accounted
for as a "pooling of interests" for financial accounting purposes, and if the
acceleration to be effected by the foregoing provisions of this Section 8(c)
would preclude accounting for the Change in Control Event as a "pooling of
interests" for financial accounting purposes, then no such acceleration shall
occur upon the Change in Control Event.
9. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.
(b) Documentation. Each Award shall be evidenced by a written
instrument in such form as the Board shall determine. Each Award may contain
terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each
Award may be made alone or in addition to or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on
an Award of the disability, death, retirement, authorized leave of absence or
other change in the employment or other status of a Participant and the extent
to which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.
(e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under the Exchange Act,
Participants may, to the extent then permitted under applicable law, satisfy
such tax obligations in whole or in part by delivery of shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to a
Participant.
(f) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such
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action shall be required unless the Board determines that the action, taking
into account any related action, would not materially and adversely affect the
Participant.
(g) Conditions on Delivery of Stock. The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove restrictions from shares previously delivered under the Plan until (i)
all conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(h) Acceleration. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of restrictions in full or in part or that any other
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
9. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.
(c) Effective Date and Term of Plan. The Plan shall become effective
on the date on which it is adopted by the Board, but no Award granted to a
Participant designated by the Board as subject to Section 162(m) of the Code by
the Board shall become exercisable, vested or realizable, as applicable to such
Award, unless and until the Plan has been approved by the Company's stockholders
to the extent stockholder approval is required by Section 162(m) in the manner
required under Section 162(m) (including the vote required under Section
162(m)). No Awards shall be granted under the Plan after the completion of ten
years from the earlier of (i)
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the date on which the Plan was adopted by the Board or (ii) the date the Plan
was approved by the Company's stockholders, but Awards previously granted may
extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that to the extent required by
Section 162(m) of the Code, no Award granted to a Participant designated as
subject to Section 162(m) by the Board after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such Award (to the
extent that such amendment to the Plan was required to grant such Award to a
particular Participant), unless and until such amendment shall have been
approved by the Company's stockholders as required by Section 162(m) (including
the vote required under Section 162(m)).
(e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.
Adopted by the Board of Directors
on May 22, 2000
Approved by the Stockholders on
July 12, 2000
Amended and Restated by the Board
of Directors on March ___, 2002
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APPENDIX B
ECLIPSYS CORPORATION
AMENDED AND RESTATED 1999 STOCK INCENTIVE PLAN
1. Purpose
The purpose of this 1999 Stock Incentive Plan (the "Plan") of Eclipsys
Corporation, a Delaware corporation (the "Company"), is to advance the interests
of the Company's stockholders by enhancing the Company's ability to attract,
retain and motivate persons who make (or are expected to make) important
contributions to the Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the
interests of such persons with those of the Company's stockholders. Except where
the context otherwise requires, the term "Company" shall include any present or
future subsidiary corporations of Eclipsys Corporation as defined in Section
424(f) of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the "Code") and any other business venture (including,
without limitation, a joint venture or limited liability company) in which the
Company has a significant interest, as determined by the Board of Directors of
the Company (the "Board").
2. Eligibility
All of the Company's employees, officers, directors, consultants and
advisors are eligible to be granted options, restricted stock, or other
stock-based awards (each, an "Award") under the Plan. Any person who has been
granted an Award under the Plan shall be deemed a "Participant".
3. Administration, Delegation
(a) Administration by Board of Directors. The Plan will be
administered by the Board. The Board shall have authority to grant Awards and to
adopt, amend and repeal such administrative rules, guidelines and practices
relating to the Plan as it shall deem advisable. The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or any
Award in the manner and to the extent it shall deem expedient to carry the Plan
into effect and it shall be the sole and final judge of such expediency. All
decisions by the Board shall be made in the Board's sole discretion and shall be
final and binding on all persons having or claiming any interest in the Plan or
in any Award. No director or person acting pursuant to the
authority delegated by the Board shall be liable for any action or determination
relating to or under the Plan made in good faith.
(b) Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.
(c) Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). If and when the
common stock, $0.01 par value per share, of the Company (the "Common Stock") is
registered under the Securities Exchange Act of 1934 (the "Exchange Act"), the
Board shall appoint one such Committee of not less than two members, each member
of which shall be an "outside director" within the meaning of Section 162(m) of
the Code and a "non-employee director" as defined in Rule 16b-3 promulgated
under the Exchange Act." All references in the Plan to the "Board" shall mean
the Board or a Committee of the Board or the executive officer referred to in
Section 3(b) to the extent that the Board's powers or authority under the Plan
have been delegated to such Committee or executive officer.
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 4(c), Awards
may be made under the Plan for up to an aggregate number of shares of Common
Stock equal to (i) 15,000,000 less (ii) the sum of (W) the number of shares as
to which options are then outstanding under the Company's Second Amended and
Restated 1998 Employee Stock Purchase Plan (the "Purchase Plan") and the number
of shares previously sold under the Purchase Plan, (X) the number of shares as
to which options are then outstanding under the Company's 1996 Stock Plan, as
amended (the "1996 Plan") and the number of shares previously issued upon the
exercise of options granted under the 1996 Plan and the number of shares of
restricted or unrestricted stock granted under the 1996 Plan then outstanding,
(Y) the number of shares as to which "Awards" have previously been made or
shares issued under the Company's Amended and Restated 1998 Stock Incentive Plan
(the "1998 Plan"), as such number shall be reduced to the extent shares become
reavailable for issuance pursuant to Section 4(a) of the 1998 Plan and (Z) the
number of shares as to which "Awards" have previously been made or shares issued
under the Company's Amended and Restated 2000 Stock Incentive Plan (the "2000
Plan"), as such number shall be reduced to the extent shares become
reavailable for issuance under the 2000 Plan pursuant to Section 4(a) thereof.
If any Award expires or is terminated, surrendered or canceled without having
been fully exercised or is forfeited in whole or in part or results in any
Common Stock not being issued, the unused Common Stock covered by such Award
shall again be available for the grant of Awards under the Plan, subject,
however, in the case of Incentive Stock Options (as hereinafter defined), to
2
any limitation required under the Code. Shares issued under the Plan may consist
in whole or in part of authorized but unissued shares or treasury shares.
(b) Per-Participant Limit. Subject to adjustment under Section 4(c),
for Awards granted after the Common Stock is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the maximum number of shares of
Common Stock with respect to which an Award may be granted to any Participant
under the Plan shall be 2,000,000 per calendar year. The per-Participant limit
described in this Section 4(b) shall be construed and applied consistently with
Section 162(m) of the Code.
(c) Adjustment to Common Stock. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a normal cash dividend, (i) the number and class of securities available
under this Plan, (ii) the per-participant limit set forth in Section 4(b), (iii)
the number and class of security and exercise price per share subject to each
outstanding Option, (iv) the repurchase price per security subject to each
outstanding Restricted Stock Award, and (v) the terms of each other outstanding
stock-based Award shall be appropriately adjusted by the Company (or substituted
Awards may be made, if applicable) to the extent the Board shall determine, in
good faith, that such an adjustment (or substitution) is necessary and
appropriate. If this Section 4(c) applies and Section 8(e)(1) also applies to
any event, Section 8(e)(1) shall be applicable to such event, and this Section
4(c) shall not be applicable.
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock
(each, an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".
(b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
3
(c) Exercise Price. The Board shall establish the exercise price at
the time each Option is granted and specify it in the applicable option
agreement.
(d) Duration of Options. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement. No Option will be granted for a term in excess of
10 years.
(e) Exercise of Option. Options may be exercised only by delivery to
the Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 5(f) for the number of shares for
which the Option is exercised.
(f) Payment Upon Exercise. Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may otherwise provide in an Option
Agreement, delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price, or delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise price;
(3) to the extent permitted by the Board and explicitly
provided in an Option Agreement (i) by delivery of shares of Common Stock owned
by the Participant valued at their fair market value as determined by the Board
in good faith ("Fair Market Value"), which Common Stock was owned by the
Participant at least six months prior to such delivery, (ii) by delivery of a
promissory note of the Participant to the Company on terms determined by the
Board, or (iii) by payment of such other lawful consideration as the Board may
determine; or
(4) any combination of the above permitted forms of payment.
6. Restricted Stock
(a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, "Restricted Stock Award").
4
(b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.
7. Other Stock-Based Awards
The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.
8. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.
(b) Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine. Each Award may
contain terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each
type of Award may be made alone or in addition or in relation to any other type
of Award. The terms of each type of Award need not be identical, and the Board
need not treat Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative,
5
conservator, guardian or Designated Beneficiary may exercise rights under the
Award.
(e) Acquisition Events Acquisition and Change in Control Events
(1) Definitions
a. An "Acquisition Event" shall mean:
(i) any merger or consolidation of the Company
with or into another entity as a result of
which the Common Stock is converted into or
exchanged for the right to receive cash,
securities or other property; or
(ii) any exchange of shares of the Company for
cash, securities or other property pursuant
to a statutory share exchange transaction.
b. A "Change in Control Event" shall mean:
(i) the acquisition by an individual, entity or
group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership of any
capital stock of the Company if, after such
acquisition, such Person beneficially owns
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) 30% or more of either
(x) the then-outstanding shares of common
stock of the Company (the "Outstanding
Company Common Stock") or (y) the combined
voting power of the then-outstanding
securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Company Voting Securities");
provided, however, that for purposes of this
subsection (i), the following acquisitions
shall not constitute a Change in Control
Event: (A) any acquisition directly from the
Company (excluding an acquisition pursuant to
the exercise, conversion or exchange of any
security exercisable for, convertible into or
exchangeable for common stock or voting
securities of the Company, unless the Person
exercising, converting or exchanging such
security
6
acquired such security directly from the
Company or an underwriter or agent of the
Company), (B) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by the Company or any corporation
controlled by the Company, (C) any
acquisition by any corporation pursuant to a
Business Combination (as defined below) which
complies with clauses (x) and (y) of
subsection (iii) of this definition or (D)
any acquisition by General Atlantic Partners
28, L.P., General Atlantic Partners 38, L.P.,
General Atlantic Partners 47, L.P., GAP
Coinvestment Partners, L.P. and any other
entities controlled by or under common
control with any of the foregoing entities,
within the meaning of the Exchange Act; or
(ii) such time as the Continuing Directors (as
defined below) constitute a minority of the
Board (or, if applicable, the Board of
Directors of a successor corporation to the
Company), where the term "Continuing
Director" means at any date a member of the
Board (x) who was a member of the Board on
the date of the initial adoption of this Plan
by the Board or (y) who was nominated or
elected subsequent to such date by at least a
majority of the directors who were Continuing
Directors at the time of such nomination or
election or whose election to the Board was
recommended or endorsed by at least a
majority of the directors who were Continuing
Directors at the time of such nomination or
election; provided, however, that there shall
be excluded from this clause (y) any
individual whose initial assumption of office
occurred as a result of an actual or
threatened election contest with respect to
the election or removal of directors or other
actual or threatened solicitation of proxies
or consents, by or on behalf of a person
other than the Board; or
(iii) the consummation of a merger, consolidation,
reorganization or statutory share exchange
involving the Company or a sale or other
disposition of all or substantially all of
the assets of the Company (a "Business
Combination"), unless, immediately following
such Business Combination, each of the
7
following two conditions is satisfied: (x)
all or substantially all of the individuals
and entities who were the beneficial owners
of the Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such Business
Combination beneficially own, directly or
indirectly, more than 50% of the
then-outstanding shares of common stock and
the combined voting power of the
then-outstanding securities entitled to vote
generally in the election of directors,
respectively, of the resulting or acquiring
corporation in such Business Combination
(which shall include, without limitation, a
corporation which as a result of such
transaction owns the Company or substantially
all of the Company's assets either directly
or through one or more subsidiaries) (such
resulting or acquiring corporation is
referred to herein as the "Acquiring
Corporation") in substantially the same
proportions as their ownership of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities,
respectively, immediately prior to such
Business Combination and (y) no Person
(excluding the Acquiring Corporation, any
Exempt Person or any employee benefit plan
(or related trust) maintained or sponsored by
the Company or by the Acquiring Corporation)
beneficially owns, directly or indirectly,
30% or more of the then-outstanding shares of
common stock of the Acquiring Corporation, or
of the combined voting power of the
then-outstanding securities of such
corporation entitled to vote generally in the
election of directors (except to the extent
that such ownership existed prior to the
Business Combination).
(2) Effect on Options
a. Acquisition Event. Upon the occurrence of an
Acquisition Event (regardless of whether such event
also constitutes a Change in Control Event), or the
execution by the Company of any agreement with
respect to an Acquisition Event (regardless of
whether such event will result in a Change in
Control Event), the Board shall provide that all
outstanding Options shall be assumed, or equivalent
8
options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof);
provided that if such Acquisition Event also
constitutes a Change in Control Event, except to the
extent specifically provided to the contrary in the
instrument evidencing any Option or any other
agreement between a Participant and the Company,
such assumed or substituted options shall be
immediately exercisable in full upon the occurrence
of such Acquisition Event. For purposes hereof, an
Option shall be considered to be assumed if,
following consummation of the Acquisition Event, the
Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately
prior to the consummation of the Acquisition Event,
the consideration (whether cash, securities or other
property) received as a result of the Acquisition
Event by holders of Common Stock for each share of
Common Stock held immediately prior to the
consummation of the Acquisition Event (and if
holders were offered a choice of consideration, the
type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock);
provided, however, that if the consideration
received as a result of the Acquisition Event is not
solely common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company
may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be
received upon the exercise of Options to consist
solely of common stock of the acquiring or
succeeding corporation (or an affiliate thereof)
equivalent in fair market value to the per share
consideration received by holders of outstanding
shares of Common Stock as a result of the
Acquisition Event.
Notwithstanding the foregoing, if the
acquiring or succeeding corporation (or an affiliate
thereof) does not agree to assume, or substitute
for, such Options, then the Board shall (x) upon
written notice to the Participants, provide that all
then unexercised Options will become exercisable in
full as of a specified time (the "Acceleration
Time") prior to the Acquisition Event and will
terminate immediately prior to the consummation of
such Acquisition Event, except to the extent
exercised by the Participants before the
consummation of such Acquisition Event, and/or (y)
in the event of an Acquisition Event
9
under the terms of which holders of Common Stock
will receive upon consummation thereof a cash
payment for each share of Common Stock surrendered
pursuant to such Acquisition Event (the "Acquisition
Price"), provide that all outstanding Options shall
terminate upon consummation of such Acquisition
Event and each Participant shall receive, in
exchange therefor, a cash payment equal to the
amount (if any) by which (A) the Acquisition Price
multiplied by the number of shares of Common Stock
subject to such outstanding Options (whether or not
then exercisable), exceeds (B) the aggregate
exercise price of such Options.
b. Change in Control Event that is not an Acquisition
Event. Upon the occurrence of a Change in Control
Event that does not also constitute an Acquisition
Event, except to the extent specifically provided to
the contrary in the instrument evidencing any Option
or any other agreement between a Participant and the
Company, all Options then-outstanding shall
automatically become immediately exercisable in
full.
(3) Effect on Restricted Stock Awards
a. Acquisition Event that is not a Change in Control
Event. Upon the occurrence of an Acquisition Event
that is not a Change in Control Event, the
repurchase and other rights of the Company under
each outstanding Restricted Stock Award shall inure
to the benefit of the Company's successor and shall
apply to the cash, securities or other property
which the Common Stock was converted into or
exchanged for pursuant to such Acquisition Event in
the same manner and to the same extent as they
applied to the Common Stock subject to such
Restricted Stock Award.
b. Change in Control Event. Upon the occurrence of a
Change in Control Event (regardless of whether such
event also constitutes an Acquisition Event), except
to the extent specifically provided to the contrary
in the instrument evidencing any Restricted Stock
Award or any other agreement between a Participant
and the Company, all restrictions and conditions on
all Restricted Stock Awards then-outstanding shall
automatically be deemed terminated or satisfied.
10
(4) Effect on Other Awards
a. Acquisition Event that is not a Change in Control
Event. The Board shall specify the effect of an
Acquisition Event that is not a Change in Control
Event on any other Award granted under the Plan at
the time of the grant of such Award.
b. Change in Control Event. Upon the occurrence of a
Change in Control Event (regardless of whether such
event also constitutes an Acquisition Event), except
to the extent specifically provided to the contrary
in the instrument evidencing any other Award or any
other agreement between a Participant and the
Company, all other Awards shall become exercisable,
realizable or vested in full, or shall be free of
all conditions or restrictions, as applicable to
each such Award.
(f) Assumption of Options Upon Certain Events. The Board may grant
Awards under the Plan in substitution for stock and stock-based awards held by
employees of another corporation who become employees of the Company as a result
of a merger or consolidation of the employing corporation with the Company or
the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and conditions
as the Board considers appropriate in the circumstances.
(g) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. The Board may allow Participants to
satisfy such tax obligations in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to a
Participant.
(h) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
11
(i) Conditions on Delivery of Stock. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(j) Acceleration. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of all restrictions or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
9. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
(c) Effective Date and Term of Plan. The Plan shall become effective
on the date on which it is adopted by the Board, but no Award granted to a
Participant designated by the Board as subject to Section 162(m) of the Code by
the Board shall become exercisable, vested or realizable, as applicable to such
Award, unless and until the Plan has been approved by the Company's stockholders
to the extent stockholder approval is required by Section 162(m) in the manner
required under Section 162(m) (including the vote required under Section
162(m)). No Awards shall be granted under the Plan after the completion of ten
years from the earlier of (i) the date on which the Plan was adopted by the
Board or (ii) the date the Plan was approved by the Company's stockholders, but
Awards previously granted may extend beyond that date.
12
(d) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that to the extent required by
Section 162(m) of the Code, no Award granted to a Participant designated as
subject to Section 162(m) by the Board after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such Award (to the
extent that such amendment to the Plan was required to grant such Award to a
particular Participant), unless and until such amendment shall have been
approved by the Company's stockholders as required by Section 162(m) (including
the vote required under Section 162(m)).
(e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.
Adopted by the Board of Directors
on February 23, 1999
Approved by the Stockholders on
April 21, 1999
Amended by the Board of Directors
on May 22, 2000
Approved by the Stockholders on
July 12, 2000
Amended and Restated by the Board
of Directors on March ___, 2002
13
APPENDIX C
ECLIPSYS CORPORATION
AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN
1. Purpose
The purpose of this 1998 Stock Incentive Plan (the "Plan") of Eclipsys
Corporation, a Delaware corporation (the "Company"), is to advance the interests
of the Company's stockholders by enhancing the Company's ability to attract,
retain and motivate persons who make (or are expected to make) important
contributions to the Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the
interests of such persons with those of the Company's stockholders. Except where
the context otherwise requires, the term "Company" shall include any present or
future subsidiary corporations of Eclipsys Corporation as defined in Section
424(f) of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the "Code") and any other business venture (including,
without limitation, a joint venture or limited liability company) in which the
Company has a significant interest, as determined by the Board of Directors of
the Company (the "Board").
2. Eligibility
All of the Company's employees, officers, directors, consultants and
advisors are eligible to be granted options, restricted stock, or other
stock-based awards (each, an "Award") under the Plan. Any person who has been
granted an Award under the Plan shall be deemed a "Participant".
3. Administration, Delegation
(a) Administration by Board of Directors. The Plan will be
administered by the Board. The Board shall have authority to grant Awards and to
adopt, amend and repeal such administrative rules, guidelines and practices
relating to the Plan as it shall deem advisable. The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or any
Award in the manner and to the extent it shall deem expedient to carry the Plan
into effect and it shall be the sole and final judge of such expediency. All
decisions by the Board shall be made in the Board's sole discretion and shall be
final and binding on all persons having or claiming any interest in the Plan or
in any Award. No director or person acting pursuant to the
authority delegated by the Board shall be liable for any action or determination
relating to or under the Plan made in good faith.
(b) Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.
(c) Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). If and when the
common stock, $0.01 par value per share, of the Company (the "Common Stock") is
registered under the Securities Exchange Act of 1934 (the "Exchange Act"), the
Board shall appoint one such Committee of not less than two members, each member
of which shall be an "outside director" within the meaning of Section 162(m) of
the Code and a "non-employee director" as defined in Rule 16b-3 promulgated
under the Exchange Act." All references in the Plan to the "Board" shall mean
the Board or a Committee of the Board or the executive officer referred to in
Section 3(b) to the extent that the Board's powers or authority under the Plan
have been delegated to such Committee or executive officer.
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 4(c), Awards
may be made under the Plan for up to an aggregate number of shares of Common
Stock equal to (i) 15,000,000 less (ii) the sum of (W) the number of shares as
to which options are then outstanding under the Company's Second Amended and
Restated 1998 Employee Stock Purchase Plan (the "Purchase Plan") and the number
of shares previously sold under the Purchase Plan, (X) the number of shares as
to which options are then outstanding under the Company's 1996 Stock Plan, as
amended (the "1996 Plan") and the number of shares previously issued upon the
exercise of options granted under the 1996 Plan and the number of shares of
restricted or unrestricted stock granted under the 1996 Plan then outstanding,
(Y) the number of shares as to which "Awards" have previously been made or
shares issued under the Company's Amended and Restated 1999 Stock Incentive Plan
(the "1999 Plan"), as such number shall be reduced to the extent shares become
reavailable for issuance pursuant to Section 4(a) of the 1999 Plan and (Z) the
number of shares as to which "Awards" have previously been made or shares issued
under the Company's Amended and Restated 2000 Stock Incentive Plan (the "2000
Plan"), as such number shall be reduced to the extent shares become reavailable
for issuance under the 2000 Plan pursuant to Section 4(a) thereof. If any Award
expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part or results in any Common Stock not
being issued, the unused Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan, subject, however, in the case
of Incentive Stock Options (as hereinafter defined), to any limitation required
2
under the Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
(b) Per-Participant Limit. Subject to adjustment under Section 4(c),
for Awards granted after the Common Stock is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the maximum number of shares of
Common Stock with respect to which an Award may be granted to any Participant
under the Plan shall be 2,000,000 per calendar year. The per-Participant limit
described in this Section 4(b) shall be construed and applied consistently with
Section 162(m) of the Code.
(c) Adjustment to Common Stock. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a normal cash dividend, (i) the number and class of securities available
under this Plan, (ii) the per-participant limit set forth in Section 4(b), (iii)
the number and class of security and exercise price per share subject to each
outstanding Option, (iv) the repurchase price per security subject to each
outstanding Restricted Stock Award, and (v) the terms of each other outstanding
stock-based Award shall be appropriately adjusted by the Company (or substituted
Awards may be made, if applicable) to the extent the Board shall determine, in
good faith, that such an adjustment (or substitution) is necessary and
appropriate. If this Section 4(c) applies and Section 8(e)(1) also applies to
any event, Section 8(e)(1) shall be applicable to such event, and this Section
4(c) shall not be applicable.
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock
(each, an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".
(b) Incentive Stock Options. An Option that the Board intends to be an
incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
3
(c) Exercise Price. The Board shall establish the exercise price at
the time each Option is granted and specify it in the applicable option
agreement.
(d) Duration of Options. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement. No Option will be granted for a term in excess of
10 years.
(e) Exercise of Option. Options may be exercised only by delivery to
the Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 5(f) for the number of shares for
which the Option is exercised.
(f) Payment Upon Exercise. Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may otherwise provide in an Option
Agreement, delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price, or delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise price;
(3) to the extent permitted by the Board and explicitly
provided in an Option Agreement (i) by delivery of shares of Common Stock owned
by the Participant valued at their fair market value as determined by the Board
in good faith ("Fair Market Value"), which Common Stock was owned by the
Participant at least six months prior to such delivery, (ii) by delivery of a
promissory note of the Participant to the Company on terms determined by the
Board, or (iii) by payment of such other lawful consideration as the Board may
determine; or
(4) any combination of the above permitted forms of payment.
6. Restricted Stock
(a) Grants. The Board may grant Awards entitling recipients to
acquire shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares at their issue price or other stated or
formula price (or to require forfeiture of such shares if issued at no cost)
from the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each,
"Restricted Stock Award").
4
(b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.
7. Other Stock-Based Awards
The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.
8. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.
(b) Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine. Each Award may
contain terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each
type of Award may be made alone or in addition or in relation to any other type
of Award. The terms of each type of Award need not be identical, and the Board
need not treat Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative,
5
conservator, guardian or Designated Beneficiary may exercise rights under the
Award.
(e) Acquisition Events Acquisition and Change in Control Events
(1) Definitions
a. An "Acquisition Event" shall mean:
(i) any merger or consolidation of the Company
with or into another entity as a result of
which the Common Stock is converted into or
exchanged for the right to receive cash,
securities or other property; or
(ii) any exchange of shares of the Company for
cash, securities or other property pursuant
to a statutory share exchange transaction.
b. A "Change in Control Event" shall mean:
(i) the acquisition by an individual, entity or
group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership of any
capital stock of the Company if, after such
acquisition, such Person beneficially owns
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) 30% or more of either
(x) the then-outstanding shares of common
stock of the Company (the "Outstanding
Company Common Stock") or (y) the combined
voting power of the then-outstanding
securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Company Voting Securities");
provided, however, that for purposes of this
subsection (i), the following acquisitions
shall not constitute a Change in Control
Event: (A) any acquisition directly from the
Company (excluding an acquisition pursuant to
the exercise, conversion or exchange of any
security exercisable for, convertible into or
exchangeable for common stock or voting
securities of the Company, unless the Person
exercising, converting or exchanging such
security
6
acquired such security directly from the
Company or an underwriter or agent of the
Company), (B) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by the Company or any corporation
controlled by the Company, (C) any
acquisition by any corporation pursuant to a
Business Combination (as defined below) which
complies with clauses (x) and (y) of
subsection (iii) of this definition or (D)
any acquisition by General Atlantic Partners
28, L.P., General Atlantic Partners 38, L.P.,
General Atlantic Partners 47, L.P., GAP
Coinvestment Partners, L.P. and any other
entities controlled by or under common
control with any of the foregoing entities,
within the meaning of the Exchange Act; or
(ii) such time as the Continuing Directors (as
defined below) constitute a minority of the
Board (or, if applicable, the Board of
Directors of a successor corporation to the
Company), where the term "Continuing
Director" means at any date a member of the
Board (x) who was a member of the Board on
the date of the initial adoption of this Plan
by the Board or (y) who was nominated or
elected subsequent to such date by at least a
majority of the directors who were Continuing
Directors at the time of such nomination or
election or whose election to the Board was
recommended or endorsed by at least a
majority of the directors who were Continuing
Directors at the time of such nomination or
election; provided, however, that there shall
be excluded from this clause (y) any
individual whose initial assumption of office
occurred as a result of an actual or
threatened election contest with respect to
the election or removal of directors or other
actual or threatened solicitation of proxies
or consents, by or on behalf of a person
other than the Board; or
(iii) the consummation of a merger, consolidation,
reorganization or statutory share exchange
involving the Company or a sale or other
disposition of all or substantially all of
the assets of the Company (a "Business
Combination"), unless, immediately following
such Business Combination, each of the
7
following two conditions is satisfied: (x)
all or substantially all of the individuals
and entities who were the beneficial owners
of the Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such Business
Combination beneficially own, directly or
indirectly, more than 50% of the
then-outstanding shares of common stock and
the combined voting power of the
then-outstanding securities entitled to vote
generally in the election of directors,
respectively, of the resulting or acquiring
corporation in such Business Combination
(which shall include, without limitation, a
corporation which as a result of such
transaction owns the Company or substantially
all of the Company's assets either directly
or through one or more subsidiaries) (such
resulting or acquiring corporation is
referred to herein as the "Acquiring
Corporation") in substantially the same
proportions as their ownership of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities,
respectively, immediately prior to such
Business Combination and (y) no Person
(excluding the Acquiring Corporation, any
Exempt Person or any employee benefit plan
(or related trust) maintained or sponsored by
the Company or by the Acquiring Corporation)
beneficially owns, directly or indirectly,
30% or more of the then-outstanding shares of
common stock of the Acquiring Corporation, or
of the combined voting power of the
then-outstanding securities of such
corporation entitled to vote generally in the
election of directors (except to the extent
that such ownership existed prior to the
Business Combination).
(2) Effect on Options
a. Acquisition Event. Upon the occurrence of an
Acquisition Event (regardless of whether such event
also constitutes a Change in Control Event), or the
execution by the Company of any agreement with
respect to an Acquisition Event (regardless of
whether such event will result in a Change in
Control Event), the Board shall provide that all
outstanding Options shall be assumed, or equivalent
8
options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof);
provided that if such Acquisition Event also
constitutes a Change in Control Event, except to the
extent specifically provided to the contrary in the
instrument evidencing any Option or any other
agreement between a Participant and the Company,
such assumed or substituted options shall be
immediately exercisable in full upon the occurrence
of such Acquisition Event. For purposes hereof, an
Option shall be considered to be assumed if,
following consummation of the Acquisition Event, the
Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately
prior to the consummation of the Acquisition Event,
the consideration (whether cash, securities or other
property) received as a result of the Acquisition
Event by holders of Common Stock for each share of
Common Stock held immediately prior to the
consummation of the Acquisition Event (and if
holders were offered a choice of consideration, the
type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock);
provided, however, that if the consideration
received as a result of the Acquisition Event is not
solely common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company
may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be
received upon the exercise of Options to consist
solely of common stock of the acquiring or
succeeding corporation (or an affiliate thereof)
equivalent in fair market value to the per share
consideration received by holders of outstanding
shares of Common Stock as a result of the
Acquisition Event.
Notwithstanding the foregoing, if the
acquiring or succeeding corporation (or an affiliate
thereof) does not agree to assume, or substitute
for, such Options, then the Board shall (x) upon
written notice to the Participants, provide that all
then unexercised Options will become exercisable in
full as of a specified time (the "Acceleration
Time") prior to the Acquisition Event and will
terminate immediately prior to the consummation of
such Acquisition Event, except to the extent
exercised by the Participants before the
consummation of such Acquisition Event, and/or (y)
in the event of an Acquisition Event
9
under the terms of which holders of Common Stock
will receive upon consummation thereof a cash
payment for each share of Common Stock surrendered
pursuant to such Acquisition Event (the "Acquisition
Price"), provide that all outstanding Options shall
terminate upon consummation of such Acquisition
Event and each Participant shall receive, in
exchange therefor, a cash payment equal to the
amount (if any) by which (A) the Acquisition Price
multiplied by the number of shares of Common Stock
subject to such outstanding Options (whether or not
then exercisable), exceeds (B) the aggregate
exercise price of such Options.
b. Change in Control Event that is not an Acquisition
Event. Upon the occurrence of a Change in Control
Event that does not also constitute an Acquisition
Event, except to the extent specifically provided to
the contrary in the instrument evidencing any Option
or any other agreement between a Participant and the
Company, all Options then-outstanding shall
automatically become immediately exercisable in
full.
(3) Effect on Restricted Stock Awards
a. Acquisition Event that is not a Change in Control
Event. Upon the occurrence of an Acquisition Event
that is not a Change in Control Event, the
repurchase and other rights of the Company under
each outstanding Restricted Stock Award shall inure
to the benefit of the Company's successor and shall
apply to the cash, securities or other property
which the Common Stock was converted into or
exchanged for pursuant to such Acquisition Event in
the same manner and to the same extent as they
applied to the Common Stock subject to such
Restricted Stock Award.
b. Change in Control Event. Upon the occurrence of a
Change in Control Event (regardless of whether such
event also constitutes an Acquisition Event), except
to the extent specifically provided to the contrary
in the instrument evidencing any Restricted Stock
Award or any other agreement between a Participant
and the Company, all restrictions and conditions on
all Restricted Stock Awards then-outstanding shall
automatically be deemed terminated or satisfied.
10
(4) Effect on Other Awards
a. Acquisition Event that is not a Change in Control
Event. The Board shall specify the effect of an
Acquisition Event that is not a Change in Control
Event on any other Award granted under the Plan at
the time of the grant of such Award.
b. Change in Control Event. Upon the occurrence of a
Change in Control Event (regardless of whether such
event also constitutes an Acquisition Event), except
to the extent specifically provided to the contrary
in the instrument evidencing any other Award or any
other agreement between a Participant and the
Company, all other Awards shall become exercisable,
realizable or vested in full, or shall be free of
all conditions or restrictions, as applicable to
each such Award.
(f) Assumption of Options Upon Certain Events. The Board may grant
Awards under the Plan in substitution for stock and stock-based awards held by
employees of another corporation who become employees of the Company as a result
of a merger or consolidation of the employing corporation with the Company or
the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and conditions
as the Board considers appropriate in the circumstances.
(g) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. The Board may allow Participants to
satisfy such tax obligations in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to a
Participant.
(h) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
11
(i) Conditions on Delivery of Stock. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(j) Acceleration. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of all restrictions or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
9. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
(c) Effective Date and Term of Plan. The Plan shall become effective
on the date on which it is adopted by the Board, but no Award granted to a
Participant designated by the Board as subject to Section 162(m) of the Code by
the Board shall become exercisable, vested or realizable, as applicable to such
Award, unless and until the Plan has been approved by the Company's stockholders
to the extent stockholder approval is required by Section 162(m) in the manner
required under Section 162(m) (including the vote required under Section
162(m)). No Awards shall be granted under the Plan after the completion of ten
years from the earlier of (i) the date on which the Plan was adopted by the
Board or (ii) the date the Plan was approved by the Company's stockholders, but
Awards previously granted may extend beyond that date.
12
(d) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that to the extent required by
Section 162(m) of the Code, no Award granted to a Participant designated as
subject to Section 162(m) by the Board after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such Award (to the
extent that such amendment to the Plan was required to grant such Award to a
particular Participant), unless and until such amendment shall have been
approved by the Company's stockholders as required by Section 162(m) (including
the vote required under Section 162(m)).
(e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.
Adopted by the Board of Directors
on April 8, 1998
Approved by the Stockholders on
June 5, 1998
Amended by the Board of Directors on
February 23, 1999
Approved by the Stockholders on
April 21, 1999
Amended by the Board of Directors on
May 22, 2000
Approved by the Stockholders on
July 12, 2000
Amended and Restated by the Board
of Directors on March ___, 2002
13
APPENDIX D
ECLIPSYS CORPORATION
SECOND AMENDED AND RESTATED
1998 EMPLOYEE STOCK PURCHASE PLAN
The purpose of this Plan is to provide eligible employees of Eclipsys
Corporation (the "Company") and certain of its subsidiaries with opportunities
to purchase shares of the Company's common stock, $0.01 par value (the "Common
Stock"). Subject to adjustment pursuant to Section 15, the maximum number of
shares of Common Stock which shall be made available for purchase under this
Plan shall be that number equal to (i) 15,000,000 less (ii) the sum of (W) the
number of shares as to which "Awards" have previously been made or shares issued
under the Company's Amended and Restated 1998 Stock Incentive Plan (the "1998
Plan"), as such number shall be reduced to the extent shares become reavailable
for issuance pursuant to Section 4(a) of the 1998 Plan, (X) the number of shares
as to which "Awards" have previously been made or shares issued under the
Company's Amended and Restated 1999 Stock Incentive Plan (the "1999 Plan"), as
such number shall be reduced to the extent shares become reavailable for
issuance pursuant to Section 4(a) of the 1999 Plan, (Y) the number of shares as
to which "Awards" have previously been made or shares issued under the Company's
Amended and Restated 2000 Stock Incentive Plan (the "2000 Plan"), as such number
shall be released to the extent shares become reavailable for issuance under the
2000 Plan pursuant to Section 4(a) thereof, and (Z) the number of shares as to
which options are then outstanding under the Company's 1996 Stock Plan, as
amended (the "1996 Plan") and the number of shares previously issued upon the
exercise of options granted under the 1996 Plan and the number of shares of
restricted or unrestricted stock granted under the 1996 Plan then outstanding.
1. Administration. The Plan will be administered by the Company's
Board of Directors (the "Board") or by a Committee appointed by the Board (the
"Committee"). The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.
2. Eligibility. Participation in the Plan will neither be permitted
nor denied contrary to the requirements of Section 423 of the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations promulgated thereunder.
All employees of the Company, including Directors who are employees, and all
employees of any subsidiary of the Company (as defined in Section 424(f) of the
Code) designated by the Board or the Committee from time to time (a "Designated
Subsidiary"), are eligible to participate in any one or more of the offerings of
Options (as defined in Section 9) to purchase Common Stock under the Plan
provided that:
(a) they are regularly employed by the Company or a Designated
Subsidiary for more than 20 hours a week and have been employed by the Company
or a Designated Subsidiary for at least 90 days prior to enrolling in the Plan;
and
(b) they are employees of the Company or a Designated Subsidiary on
the first day of the applicable Plan Period (as defined below).
No employee may be granted an option hereunder if such employee,
immediately after the option is granted, owns 5% or more of the total combined
voting power or value of the stock of the Company or any subsidiary. For
purposes of the preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply in determining the stock ownership of an employee, and all
stock which the employee has a contractual right to purchase shall be treated as
stock owned by the employee.
3. Offerings. The Company will make one or more offerings
("Offerings") to employees to purchase stock under this Plan. The first Offering
will commence on the first day of the first calendar month following the closing
of a firm commitment, underwritten initial public offering by the Company (or
the first business day thereafter if such date is not a business day).
Thereafter, Offerings will begin each January 1, April 1, July 1 or October 1,
as applicable (or the first business day thereafter if such date is not a
business day). The date on which each Offering commences is referred to as an
"Offering Commencement Date." Each Offering Commencement Date will begin a
three-month period (a "Plan Period") during which payroll deductions will be
made and held for the purchase of Common Stock at the end of the Plan Period,
except that the Plan Period for the initial Offering shall end on the first
December 31, March 31, June 30 or September 30 following its commencement. The
Board or the Committee may, at its discretion, choose a different Plan Period of
twelve (12) months or less for subsequent Offerings.
4. Participation. An employee eligible on the Offering Commencement
Date of any Offering may participate in such Offering by completing and
forwarding a payroll deduction authorization form to the employee's appropriate
payroll office at least seven days prior to the applicable Offering Commencement
Date. The form will authorize a regular payroll deduction from the compensation
received by the employee during the Plan Period. Unless an employee files a new
form or withdraws from the Plan, his deductions and purchases will continue at
the same rate for future Offerings under the Plan as long as the Plan remains in
effect.
5. Deductions. The Company will maintain payroll deduction accounts
for all participating employees. With respect to any Offering made under this
Plan, an employee may authorize a payroll deduction in a monthly amount equal to
a whole percentage (up to a maximum percentage of 15%) of his or her
Compensation for the
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Plan Period. The term "Compensation" means, for each Plan Period, monthly base
salary or wages as of the Offering Commencement Date plus, in the case of
commissioned salespersons, the average monthly commissions earned during the
three months preceding the Offering Commencement Date.
No employee may be granted an Option (as defined in Section 9) which
permits his rights to purchase Common Stock under this Plan and any other stock
purchase plan of the Company and its subsidiaries to accrue at a rate which
exceeds $25,000 (based on the fair market value of such Common Stock determined
at the Offering Commencement Date of the Plan Period) for each calendar year in
which the Option is outstanding at any time.
6. Deduction Changes. An employee may decrease or discontinue his
payroll deduction once during any Plan Period, by filing a new payroll deduction
authorization form. However, an employee may not increase his payroll deduction
during a Plan Period. If an employee elects to discontinue his payroll
deductions during a Plan Period, but does not elect to withdraw his funds
pursuant to Section 8 hereof, funds deducted prior to his election to
discontinue will be applied to the purchase of Common Stock on the Exercise Date
(as defined below).
7. Interest. Interest will not be paid on any employee accounts,
except to the extent that the Board or the Committee, in its sole discretion,
elects to credit employee accounts with interest at such per annum rate as it
may from time to time determine.
8. Withdrawal of Funds. An employee may at any time prior to the
close of business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee's account and
thereby withdraw from participation in an Offering. Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Plan Period. The employee may participate in any subsequent Offering in
accordance with terms and conditions established by the Board or the Committee.
9. Purchase of Shares. On the Offering Commencement Date of each Plan
Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, such number of whole shares of Common Stock of the Company
reserved for the purposes of the Plan as does not exceed the number of shares
determined by dividing (i) the product of $1,250 multiplied by the number of
months in such Plan Period by (ii) the price determined in accordance with the
formula set forth in the following paragraph but using the closing price on the
Offering Commencement Date of such Plan Period.
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The purchase price for each share purchased will be 85% of the closing
price of the Common Stock on (i) the first business day of such Plan Period or
(ii) the Exercise Date, whichever closing price shall be less. Such closing
price shall be (a) the closing price on any national securities exchange on
which the Common Stock is listed, (b) the closing price of the Common Stock on
the Nasdaq National Market or (c) the average of the closing bid and asked
prices in the over-the-counter-market, whichever is applicable, as published in
The Wall Street Journal. If no sales of Common Stock were made on such a day,
the price of the Common Stock for purposes of clauses (a) and (b) above shall be
the reported price for the next preceding day on which sales were made.
Each employee who continues to be a participant in the Plan on the
Exercise Date shall be deemed to have exercised his Option at the Option Price
on such date and shall be deemed to have purchased from the Company the number
of full shares of Common Stock reserved for the purpose of the Plan that his
accumulated payroll deductions on such date will pay for pursuant to the formula
set forth above (but not in excess of the maximum number determined in the
manner set forth above).
Any balance remaining in an employee's payroll deduction account at the
end of a Plan Period will be automatically refunded to the employee, except that
any balance which is less than the purchase price of one share of Common Stock
will be carried forward into the employee's payroll deduction account for the
following Offering, unless the employee elects not to participate in the
following Offering under the Plan, in which case the balance in the employee's
account shall be refunded.
10. Issuance of Certificates. Certificates representing shares of
Common Stock purchased under the Plan may be issued only in the name of the
employee, in the name of the employee and another person of legal age as joint
tenants with rights of survivorship, or (in the Company's sole discretion) in
the street name of a brokerage firm, bank or other nominee holder designated by
the employee.
11. Rights on Retirement, Death or Termination of Employment. In the
event of a participating employee's termination of employment prior to the last
business day of a Plan Period, no payroll deduction shall be taken from any pay
due and owing to an employee and the balance in the employee's account shall be
paid to the employee or, in the event of the employee's death, (a) to a
beneficiary previously designated in a revocable notice signed by the employee
(with any spousal consent required under state law) or (b) in the absence of
such a designated beneficiary, to the executor or administrator of the
employee's estate or (c) if no such executor or administrator has been appointed
to the knowledge of the Company, to such other person(s) as the Company may, in
its discretion, designate. If, prior to the last business day of the Plan
Period, the Designated Subsidiary by which an employee is employed shall cease
to be a subsidiary of the Company, or if the employee is transferred to a
subsidiary of the Company that is not a Designated Subsidiary, the
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employee shall be deemed to have terminated employment for the purposes of this
Plan.
12. Optionees Not Stockholders. Neither the granting of an Option to
an employee nor the deductions from his pay shall constitute such employee a
stockholder of the shares of Common Stock covered by an Option under this Plan
until such shares have been purchased by and issued to him.
13. Rights Not Transferable. Rights under this Plan are not
transferable by a participating employee other than by will or the laws of
descent and distribution, and are exercisable during the employee's lifetime
only by the employee.
14. Application of Funds. All funds received or held by the Company
under this Plan may be combined with other corporate funds and may be used for
any corporate purpose.
15. Adjustment in Case of Changes Affecting Common Stock. In the event
of a subdivision of outstanding shares of Common Stock, or the payment of a
dividend in Common Stock, the number of shares approved for this Plan, and the
share limitation set forth in Section 9, shall be increased proportionately, and
such other adjustment shall be made as may be deemed equitable by the Board or
the Committee. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.
16. Merger. If the Company shall at any time merge or consolidate with
another corporation and the holders of the capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 80%
by voting power of the capital stock of the surviving corporation ("Continuity
of Control"), the holder of each Option then outstanding will thereafter be
entitled to receive at the next Exercise Date upon the exercise of such Option
for each share as to which such Option shall be exercised the securities or
property which a holder of one share of the Common Stock was entitled to upon
and at the time of such merger, and the Committee shall take such steps in
connection with such merger as the Committee shall deem necessary to assure that
the provisions of Paragraph 15 shall thereafter be applicable, as nearly as
reasonably may be, in relation to the said securities or property as to which
such holder of such Option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or of a sale
of all or substantially all of the assets of the Company while unexercised
Options remain outstanding under the Plan, (a) subject to the provisions of
clauses (b) and (c), after the effective date of such transaction, each holder
of an outstanding Option shall be
-5-
entitled, upon exercise of such Option, to receive in lieu of shares of Common
Stock, shares of such stock or other securities as the holders of shares of
Common Stock received pursuant to the terms of such transaction; or (b) all
outstanding Options may be cancelled by the Board or the Committee as of a date
prior to the effective date of any such transaction and all payroll deductions
shall be paid out to the participating employees; or (c) all outstanding Options
may be cancelled by the Board or the Committee as of the effective date of any
such transaction, provided that notice of such cancellation shall be given to
each holder of an Option, and each holder of an Option shall have the right to
exercise such Option in full based on payroll deductions then credited to his
account as of a date determined by the Board or the Committee, which date shall
not be less than ten (10) days preceding the effective date of such transaction.
17. Amendment of the Plan. The Board may at any time, and from time to
time, amend this Plan in any respect, except that (a) if the approval of any
such amendment by the shareholders of the Company is required by Section 423 of
the Code, such amendment shall not be effected without such approval, and (b) in
no event may any amendment be made which would cause the Plan to fail to comply
with Section 423 of the Code.
18. Insufficient Shares. In the event that the total number of shares
of Common Stock specified in elections to be purchased under any Offering plus
the number of shares purchased under previous Offerings under this Plan exceeds
the maximum number of shares issuable under this Plan, the Board or the
Committee will allot the shares then available on a pro rata basis.
19. Termination of the Plan. This Plan may be terminated at any time
by the Board. Upon termination of this Plan all amounts in the accounts of
participating employees shall be promptly refunded.
20. Governmental Regulations. The Company's obligation to sell and
deliver Common Stock under this Plan is subject to listing on a national stock
exchange or quotation on the Nasdaq National Market and the approval of all
governmental authorities required in connection with the authorization, issuance
or sale of such stock.
The Plan shall be governed by Delaware law except to the extent that such
law is preempted by federal law.
21. Issuance of Shares. Shares may be issued upon exercise of an
Option from authorized but unissued Common Stock, from shares held in the
treasury of the Company, or from any other proper source.
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22. Notification upon Sale of Shares. Each employee agrees, by
entering the Plan, to promptly give the Company notice of any disposition of
shares purchased under the Plan where such disposition occurs within two years
after the date of grant of the Option pursuant to which such shares were
purchased.
23. Effective Date and Approval of Shareholders. The Plan shall take
effect upon its approval by the Board, subject to approval by the shareholders
of the Company as required by Section 423 of the Code, which approval must occur
within twelve months of the adoption of the Plan by the Board.
Adopted by the Board of Directors
on April 8, 1998
Approved by the Stockholders on
June 5, 1998
Amended and Restated by the Board of
Directors on August 6, 1998
Amended by the Board of Directors on
February 23, 1999
Approved by the Stockholders on
April 21, 1999
Amended by the Board of Directors on
May 22, 2000
Approved by the Stockholders on
July 12, 2000
Amended and Restated by the Board of
Directors on March ___, 2002
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DETACH HERE
PROXY
ECLIPSYS CORPORATION
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
WEDNESDAY, MAY 8, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having received notice of the meeting and management's
proxy statement therefor, and revoking all prior proxies, hereby appoint(s)
Harvey J. Wilson, Robert J. Colletti and T. Jack Risenhoover, II, and each of
them, with full power of substitution, as proxies to represent and vote, as
designated herein, all shares of stock of Eclipsys Corporation (the "Company")
which the undersigned would be entitled to vote if personally present at the
Annual Meeting of Stockholders of the Company to be held at the Company's
corporate headquarters, 1750 Clint Moore Road, Boca Raton, Florida 33487 on
Wednesday, May 8, 2002, at 10:00 am., local time, and at any adjournment thereof
(the "Meeting").
In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the Meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is given, this proxy
will be voted FOR all proposals. Attendance of the undersigned at the meeting
or at any adjournment thereof will not be deemed to revoke this proxy unless
the undersigned shall revoke this proxy in writing or shall deliver a
subsequently dated proxy to the Secretary of the Company or shall vote in
person at the Meeting.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
DETACH HERE
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE.
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED POSTAGE-PAID
RETURN ENVELOPE.
FOR AGAINST ABSTAIN
2. To approve the amendment and restatement
1. To elect the following two persons of the Company's 2000 Stock Incentive Plan, the [ ] [ ] [ ]
to serve as Class I directors 1999 Stock Incentive Plan, the 1998 Stock
until the 2005 annual meeting Incentive Plan, and the Amended and Restated
of stockholders and until their 1998 Employee Stock Purchase Plan to reflect
successors are duly elected an increase in the number of shares of Voting
and qualified: Common Stock authorized for issuance under
NOMINEES: (01) Eugene V. Fife and all the Company's stock plans (the 2000 Stock
(02) Braden R. Kelly Incentive Plan, the 1999 Stock Incentive Plan,
the Amended and Restated 1998 Employee Stock Purchase
Plan, the 1998 Stock Incentive Plan and the 1996
FOR [ ] [ ] WITHELD Stock Plan) from 12,000,000 to 15,000,000.
ALL FROM ALL
NOMINEES NOMINEES FOR AGAINST ABSTAIN
3. To ratify the selection by the Board of
[ ] ________________________________________ Directors of PricewaterhouseCoopers LLP as the [ ] [ ] [ ]
For all nominees except as noted above Company's independent public accountants for the
current fiscal year.
4. To transact such other business as may properly
come before the meeting or any adjournment thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as name appears hereon. If the stock is registered in the names
of two or more persons, each should sign. Executors, administrators, trustees,
guardians, attorneys and corporate officers should add their titles.
Signature:______________________ Date:_________ Signature:____________________ Date:_____________________