EXHIBIT 4.1
ACCESS HEALTH, INC.
STOCK OPTION AGREEMENT
I. NOTICE OF STOCK OPTION GRANT
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Thomas E. Gardner
You have been granted an option to purchase Common Stock of Access Health,
Inc., a Delaware corporation (the "Company"), subject to the terms and
conditions of this Option Agreement, as follows:
Date of Grant May 30, 1996
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Vesting Commencement Date May 8, 1997
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Exercise Price per Share $50.625
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Total Number of Shares Granted 230,000
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Total Exercise Price $11,643,750
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Type of Option: Incentive Stock Option
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X Nonstatutory Stock Option
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Term/Expiration Date May 30, 2006
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Vesting Schedule:
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This Option shall be exercisable cumulatively to the extent of one-fifth of
the total number of shares subject to the Option on the Vesting Commencement
Date set forth above and an additional one-fifth of the total shares subject to
the Option at the end of each 12-month period thereafter.
Notwithstanding the foregoing, in the event of (i) a reorganization or
merger of the Company with or into any other corporation which will result in
the Company's shareholders immediately prior to such transaction not holding, as
a result of such transaction, at least 50% of the voting power of the surviving
or continuing entity; (ii) a sale of all or substantially all of the assets of
the corporation which will result in the Company's shareholders immediately
prior to such sale not holding, as a result
of such sale, at least 5% of the voting power of the purchasing entity; or (iii)
a transaction or series of related transactions which result in more than 50% of
the voting power of the Company being controlled by a single holder, the Option
shall become fully exercisable on the business day immediately preceding such
reorganization, merger sale or transaction.
Termination Period:
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This Option may be exercised to the extent exercisable on the date of
termination for one (1) year after the date of termination of employment or
consulting relationship, or such longer period as may be applicable upon death
or Disability of Optionee as provided in Sections 8 and 9 of this Agreement, but
in no event later than the Term/Expiration Date as provided above.
II. AGREEMENT
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1. Definitions. As used herein, the following definitions shall apply:
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(a) "Administrator" means the Board or any of its Committees, which
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Committees shall be constituted to satisfy Applicable Laws.
(b) "Applicable Laws" means the legal requirements relating to the
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administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code and the applicable laws of any
foreign country or jurisdiction where Options are, or will be, granted under the
Plan.
(c) "Board" means the Board of Directors of the Company.
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(d) "Code" means the Internal Revenue Code of 1986, as amended.
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(e) "Committee" means a Committee appointed by the Board.
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(f) "Common Stock" means the Common Stock of the Company.
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(g) "Consultant" means any person, including an advisor, engaged by
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the Company to render services and who is compensated for such services.
(h) "Director" means a member of the Board.
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(i) "Disability" means total and permanent disability as defined in
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Section 22(e)(3) of the Code.
(j) "Employee" means any person employed by the Company.
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(k) "Fair Market Value" means, as of any date, the closing sales price
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(or the closing bid, if no sales were reported) as quoted on such exchange or
system for the last market trading day prior to the time of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable.
(l) "Nonstatutory Stock Option" means an Option not intended to
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qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(m) "Officer" means a person who is an officer of the Company within
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the meaning of Section 16 of the Securities Exchange Act of 1934, as amended.
(n) "Share" means a share of the Common Stock, as adjusted in
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accordance with Section 11 of this Agreement.
2. Grant of Option. The Administrator hereby grants to the Optionee
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named in the Notice of Grant attached as Part I of this Agreement (the
"Optionee"), an option (the "Option") to purchase a number of Shares, as set
forth in the Notice of Grant, at the exercise price per share set forth in the
Notice of Grant (the "Exercise Price").
This Option is not intended to qualify as an Incentive Stock Option under
Section 422 of the Code.
3. Exercise of Option.
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(a) Right to Exercise. This Option is exercisable during its term in
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accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of this Option Agreement. In the event of Optionee's
death, disability or other termination of Optionee's employment or consulting
relationship, the exercisability of the Option is governed by the applicable
provisions of this Option Agreement and any employment agreement between
Optionee and the Company.
(b) Method of Exercise. This Option is exercisable (in whole or in
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part) by delivery of an exercise notice, in the form attached as Exhibit A (the
"Exercise Notice"), which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
"Exercised Shares"), and such other representations and agreements as may
reasonably be required by the Company pursuant to the provisions of the Plan.
The Exercise Notice shall be signed by the Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The Exercise Notice
shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option shall be deemed to be exercised upon receipt by
the Company of such fully executed Exercise Notice accompanied by such aggregate
Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with all relevant provisions of law and the
requirements of any stock exchange or quotation service upon which the Shares
are then listed. Assuming such compliance, for income tax
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purposes the Exercised Shares shall be considered transferred to the Optionee on
the date the Option is exercised with respect to such Exercised Shares. To the
extent that Exercise Shares are not promptly issued to the Optionee upon any
exercise of the Option, the Company shall make the Optionee whole for any
resulting expense or loss of benefit.
4. Method of Payment. Payment of the aggregate Exercise Price shall be
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by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash; or
(b) check; or
(c) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable, may
reasonably require to effect an exercise of the Option and delivery to the
Company of the sale or loan proceeds required to pay the exercise price; or
(d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option and to the extent reasonably required by the
Administrator, have been owned by the Optionee for more than six (6) months on
the date of surrender, and (ii) have a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Exercised Shares.
5. Non-Transferability of Option. This Option may not be transferred in
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any manner otherwise than by will or by the laws of descent or distribution or
by gratuitous transfers to immediate family members or to trusts for their
benefit (collectively, "Permitted Transferees") and may be exercised during the
lifetime of Optionee only by the Optionee or by his Permitted Transferees. The
terms of this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of Optionee.
6. Term of Option. This Option may be exercised only within the term set
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out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Option Agreement.
7. Termination of Employment. Upon termination of an Optionee's status
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as an Employee or Consultant (other than as a result of the Optionee's death or
Disability), the Optionee may exercise his or her Option, but (except as
otherwise provided in any written employment agreement between the Company and
the Optionee) only within one (1) year of such date and only to the extent that
the Optionee was entitled to exercise it at the date of such termination (and in
no event later than the expiration of the term of such Option as set forth in
this Agreement). Except as otherwise provided in any written employment
agreement between the Company and the Optionee, to the extent that Optionee was
not entitled to exercise an Option at the date of such termination, and to the
extent that the Optionee does not exercise such Option (to the extent otherwise
so entitled) within the time specified herein, the Option shall terminate. For
purposes of this Section 7, an Optionee's change in status from: (i) Employee to
Consultant, (ii) Consultant to Employee, or (iii)
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Employee or Consultant to Officer shall not, unless otherwise reasonably
determined by the Administrator, be considered a termination of status as an
Employee or Consultant.
8. Disability of Optionee. Upon termination of an Optionee's status as
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an Employee or Consultant as a result of the Optionee's Disability, the Optionee
may exercise his or her Option, but only within one (1) year of such date and
only to the extent that the Optionee was entitled to exercise it at the date of
such termination (and in no event later than the expiration of the term of such
Option as set forth in this Agreement). To the extent that Optionee was not
entitled to exercise an Option at the date of such termination, and to the
extent that the Optionee does not exercise such Option (to the extent otherwise
so entitled) within the time specified herein, the Option shall terminate.
9. Death of Optionee. In the event of an Optionee's death, the
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Optionee's estate or a person who acquired the right to exercise the deceased
Optionee's Option by bequest or inheritance may exercise the Option, but only
within one (1) year of such date and only to the extent that the Optionee was
entitled to exercise it at the date of death (and in no event later than the
expiration of the term of such Option as set forth in this Agreement). To the
extent that Optionee was not entitled to exercise an Option at the date of
death, and to the extent that the Optionee's estate or a person who acquired the
right to exercise such Option does not exercise such Option (to the extent
otherwise so entitled) within the time specified herein, the Option shall
terminate.
10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
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Asset Sale.
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(a) Changes in Capitalization. Subject to any required action by the
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stockholders of the Company, the number of shares of Common Stock covered by the
Option, as well as the price per share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to the Option.
(b) Dissolution or Liquidation. In the event of the proposed
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dissolution or liquidation of the Company, the Administrator shall notify the
Optionee at least fifteen (15) days prior to the effective date of such proposed
transaction. The Administrator may declare that the Option shall terminate as of
a date determined by the Administrator and give the Optionee the right to
exercise his or her Option as to all or any part of the optioned stock,
including Shares which would not otherwise be exercisable. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.
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(c) Merger or Asset Sale. In the event of a merger of the Company
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with or into another corporation, or the sale of substantially all of the assets
of the Company, the Option will be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation.
11. Tax Consequences. Some of the federal and state tax consequences
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relating to this Option, as of the date of this Option, are set forth below.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Nonqualified Stock Option ("NSO"). This Option
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does not qualify as an ISO. As a consequence, the optionee may incur regular
federal income tax and state income tax liability upon exercise. The Optionee
will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value of the
Exercised Shares on the date of exercise over their aggregate Exercise Price. If
the Optionee is an employee, the Company will be required to withhold from his
or her compensation or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the
time of exercise.
(b) Disposition of Shares. If the Optionee holds NSO Shares for at
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least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.
12. In the event of any inconsistency between the provisions of this
Agreement and the provisions of any written employment agreement that the
Company and Optionee may enter into, the provisions of the written employment
agreement (to the extent more favorable to the Optionee) shall control.
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By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted and governed by the terms
and conditions of this Option Agreement. Optionee has reviewed this Option
Agreement in its entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option Agreement and understands the Option
Agreement.
OPTIONEE: ACCESS HEALTH, INC.
/s/ Thomas E. Gardner By: /s/ Kenneth B. Plumlee
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Signature
Thomas E. Gardner Title: Chairman
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Print Name
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EXHIBIT A
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EXERCISE NOTICE
Access Health, Inc.
11020 White Rock Road, Suite 100
Rancho Cordova, CA 95670
Attention:
1. Exercise of Option. Effective as of today, __________, 199__, the
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undersigned ("Purchaser") hereby elects to purchase __________ shares (the
"Shares") of the Common Stock of Access Health, Inc. (the "Company") under and
pursuant to the Stock Option Agreement dated as of October 30, 1996 (the "Option
Agreement"). The purchase price for the Shares shall be $32.25, as required by
the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company
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the full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that
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Purchaser has received, read and understood the Option Agreement and agrees to
abide by and be bound by its terms and conditions.
4. Rights as Shareholder. Subject to the terms and conditions of
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this Agreement, Purchaser shall have all of the rights of a shareholder of the
Company with respect to the Shares from and after the date that Purchaser
delivers full payment of the Exercise Price until such time as Purchaser
disposes of the Shares.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
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adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Option Agreement is
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incorporated herein by reference. This Agreement and the Option Agreement
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Purchaser with respect
to the subject matter hereof, and such agreement is governed by California law
except for that body of law pertaining to conflict of laws.
Submitted by: Accepted by:
PURCHASER: ACCESS HEALTH, INC.
By:
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Signature
Its:
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Print Name
Address: Address:
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11020 White Rock Road, Suite 100
- -------------------------- Rancho Cordova, CA 95670
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