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EXHIBIT 10.3
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (the "Agreement") is made this 22nd day of
May 2000, by and among The TriZetto Group, Inc., a Delaware corporation (the
"Company"), and ______________ (the "Grantee").
RECITALS
A. WHEREAS, the Company desires to grant shares of its common stock to
Grantee to encourage the continued service of Grantee as an employee of
QualChoice of Arkansas, Inc. ("QCA"), which service is of benefit to the
Company;
B. WHEREAS, the Company desires to impose certain restrictions on the
shares of common stock granted hereunder for the benefit of the Company; and
C. WHEREAS, such grant is being made to Grantee in addition to, and not in
lieu of, any other form of compensation otherwise payable or to be paid to
Grantee.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. GRANT OF SHARES. The Company hereby grants and delivers to Grantee
________ (____) shares of its common stock (the "Shares"), subject to the terms
and conditions set forth herein.
2. VESTING OF SHARES.
2.1 The Shares granted hereunder shall vest and become "Vested Shares"
in four equal annual installments commencing on the first anniversary date of
this Agreement. Shares which have not yet become vested are herein called
"Unvested Shares." No additional Shares shall vest after the date of termination
("Termination Date") of Grantee's "Continuous Service" (as defined below).
2.2 Notwithstanding the foregoing, all of the Shares shall become fully
vested immediately prior to the consummation of a Change in Control (as defined
in Section 10 below), unless prior to a Change in Control the Company's Board of
Directors determines that, upon its occurrence, the vesting of the Shares will
not accelerate or determines that only the vesting of certain Shares will be
accelerated and/or establishes a different time in respect of such Change in
Control for such acceleration. However, in the case of a transaction intended to
be accounted for as a pooling of interests transaction, the Board of Directors
shall have no discretion with respect to the foregoing acceleration of vesting
of the Shares.
2.3 As used herein, the term "Continuous Service" means so long as
Grantee is an employee of QCA or the Company. Unless otherwise determined by the
Company's Board of Directors, a leave of absence (regardless of the reason
therefor) shall be deemed to constitute the cessation of Continuous Service as
of the commencement date of the leave.
2.4 In the event Grantee's Continuous Service terminates due to death or
Total Disability (as defined herein), the Shares shall vest and become Vested
Shares on the Termination Date to the extent such Shares would have vested in
the 90-day period following the Termination
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Date. "Total Disability" means a "total and permanent disability" within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
(the "Code").
3. DEPOSIT OF CERTIFICATES. Grantee shall deposit with the Company all
certificates evidencing the Shares together with a properly endorsed stock power
assignment. Upon written request from Grantee, the Company shall reissue and
deliver to Grantee a new certificate evidencing the Vested Shares, and shall
reissue a certificate evidencing the Unvested Shares as of the date thereof,
which Grantee shall deposit with the Company, together with a new properly
endorsed stock power assignment.
4. CANCELLATION OF UNVESTED SHARES UPON TERMINATION. In the event of
termination of Grantee's Continuous Service, all Unvested Shares as of the
Termination Date shall be immediately cancelled and become null and void. The
Company shall cancel the certificates then deposited with the Company evidencing
the Unvested Shares and reissue a new certificate to Grantee evidencing only the
Vested Shares, if any, as of the Termination Date.
5. RESTRICTION ON TRANSFER. The Unvested Shares shall not be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of, shall
not be assigned or transferred, directly or indirectly and shall not be subject
to execution, attachment or similar process, and any attempted sale or other
disposition shall be null and void.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Grantee as follows:
6.1 AUTHORIZATION. All corporate action on the part of the Company, its
officers and directors necessary for the authorization, execution and delivery
of this Agreement, the performance of all obligations of the Company hereunder
and the authorization, issuance (or reservation for issuance) and delivery of
the Shares being granted hereunder has been taken or will be taken prior to the
execution of this Agreement, and this Agreement constitutes a valid and legally
binding obligation of the Company which is enforceable in accordance with its
terms.
6.2 VALID ISSUANCE OF SHARES. The Shares which are being granted
hereunder, when issued, sold and delivered in accordance with the terms hereof
for the consideration expressed herein will be duly and validly issued, fully
paid and nonassessable (except as set forth herein) and, based in part upon the
representations of Grantee in this Agreement, will be issued in compliance with
all applicable federal and state securities laws.
7. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee represents and
warrants to the Company as follows:
7.1 Grantee understands that the Shares will be issued by the Company
without registration under the Securities Act of 1933 ("Securities Act") and
without qualification or registration under applicable state securities laws
("Blue Sky Laws") pursuant to exemptions from registration or qualification
contained in the Securities Act and in the Blue Sky Laws. Grantee understands
that the Shares must be held indefinitely unless subsequently registered or
qualified under the Securities Act and under the Blue Sky Laws or unless
exemptions from the registration or qualification requirements under the
Securities Act and under the Blue Sky Laws are available in connection with any
proposed transfer of the Shares by Grantee.
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7.2 Grantee is acquiring the Shares solely for Grantee's own account for
investment and not with a view to or for sale or distribution of the Shares or
any portion thereof and not with any present intention of selling, offering to
sell or otherwise disposing of or distributing the Shares or any portion
thereof. Grantee also represents that the entire legal and beneficial interest
of the Shares is being acquired for, and will be held for the account of,
Grantee only and neither in whole nor in part for any other person.
7.3 Grantee agrees that none of the Shares, nor any interest in the
Shares, will be resold or otherwise transferred by Grantee without registration
or qualification under the Securities Act and the Blue Sky Laws unless Grantee
first demonstrates to the satisfaction of the Company that specific exemptions
from such registration or qualification requirements are available with respect
to the proposed transfer and provides the Company an opinion of counsel
satisfactory to the Company that the proposed transfer may be made without
violation of the Securities Act or the Blue Sky Laws and will not affect the
exemptions relied upon by the Company in connection with the original issuance
of the Shares.
7.4 Grantee acknowledges that the certificates representing the Shares
shall bear the following restrictive legends:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR IF TRIZETTO
RECEIVES AN OPINION OF COUNSEL FOR GRANTEE OF THESE SECURITIES
REASONABLY SATISFACTORY TO TRIZETTO, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933 ACT.
ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE, OR OTHER DISPOSITION OF THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY, AND
SUBJECT TO, THE TERMS OF A RESTRICTED STOCK AGREEMENT DATED AS OF MAY
22, 2000. A COPY OF SAID AGREEMENT IS ON FILE WITH THE SECRETARY OF THIS
CORPORATION.
7.5 Grantee understands that the Shares are restricted securities within
the meaning of Rule 144 promulgated under the Securities Act; that the exemption
from registration under Rule 144 will not be available in any event for at least
one year from the date of grant of the Shares to Grantee, and even then will not
be available unless (i) a public trading market then exists for the Shares of
the Company, (ii) adequate current public information concerning the Company is
then available to the public, (iii) Grantee has been the beneficial owner of the
Shares at least one year prior to the sale, and (iv) other terms and conditions
of Rule 144 are complied with; and that any sale of the Shares may be made by it
only in limited amounts in accordance with such terms and conditions, as amended
from time to time.
7.6 Grantee understands that counsel for the Company may rely upon the
foregoing for the purposes of rendering an opinion in connection with the
issuance of the Shares. Grantee hereby agrees to indemnify the Company and its
officers, directors, agents,
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and counsel and hold them harmless from and against any and all damages suffered
and liabilities incurred by them (including costs of investigation, defense, and
attorneys' fees) arising out of any breach by Grantee of the agreements or
inaccuracy in the representations and warranties which Grantee has made herein.
8. SHARES FREE AND CLEAR. All Shares relinquished to the Company, or its
assignee(s), as the case may be, pursuant to this Agreement shall be delivered
by Grantee free and clear of all claims, liens and encumbrances of every nature
(except the provisions of this Agreement and any conditions concerning the
Shares relating to compliance with applicable federal or state securities laws),
and the purchaser thereof shall acquire full and complete title and right to all
of the shares, free and clear of any claims, liens and encumbrances of every
nature (again except for the provisions of this Agreement and such securities
laws).
9. RECAPITALIZATION. In the event that, as the result of a stock split or
stock dividend or combination of shares or any other change, or exchange for
other securities, by reclassification, or recapitalization of the Shares,
Grantee shall be entitled to new or additional or different shares of stock or
securities, such new or additional or different shares of stock or securities
shall be deemed "Shares" for the purposes of this Agreement and shall be subject
to all of the terms and conditions hereof, and the certificate or certificates
for, or other evidences of, such shares shall be imprinted with the legend
provided in Section 7.4 above.
10. CHANGE IN CONTROL. For the purposes of this Agreement, "Change in
Control" means any of the following:
(a) Approval by the stockholders of the Company of the dissolution or
liquidation of the Company;
(b) Approval by the stockholders of the Company of an agreement to merge
or consolidate, or otherwise reorganize, with or into one or more entities that
are not Subsidiaries or other affiliates, as a result of which less than 50% of
the outstanding voting securities of the surviving or resulting entity
immediately after the reorganization are, or will be, owned, directly or
indirectly, by stockholders of the Company immediately before such
reorganization (assuming for purposes of such determination that there is no
change in the record ownership of the Company's securities from the record date
for such approval until such reorganization and that such record owners hold no
securities of the other parties to such reorganization), but including in such
determination any securities of the other parties to such reorganization held by
affiliates of the Company);
(c) Approval by the stockholders of the Company of the sale of
substantially all of the Company's business and/or assets to a person or entity
that is not a Subsidiary or other affiliate;
(d) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act but excluding any person described in and satisfying the
conditions of Rule 13d-1(b)(1) thereunder), other than a person that is a
stockholder of the Company on the Effective Date, becoming the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than 50% of the combined voting
power of the Company's then outstanding securities entitled to then vote
generally in the election of directors of the Company; or
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(e) During any period not longer than two consecutive years, individuals
who at the beginning of such period constituted the Board cease to constitute at
least a majority thereof, unless the election, or the nomination for election by
the Company's stockholders, of each new Board member was approved by a vote of
at least three-fourths of the Board members then still in office who were Board
members at the beginning of such period (including for these purposes, new
members whose election or nomination was so approved).
11. NO AGREEMENT TO RETAIN STATUS. Nothing in this Agreement shall be
construed to constitute or be evidence of any agreement or understanding,
express or implied, on the part of the Company or QCA to retain Grantee in his
or her status as an employee of QCA or the Company.
12. IRC SECTION 83(b) ELECTION. Grantee acknowledges that he or she has
consulted with a tax advisor and considered the advisability of all tax
elections in connection with the grant of the Shares and the execution and
delivery of this Agreement, including the making of an election under Section
83(b) of the Code, and any similar elections under Arkansas or applicable state
law. Grantee acknowledges that he or she is solely responsible to make any such
election and that the Company has no responsibility to make any such election.
If Grantee desires to make the election provided under Section 83(b) of the
Code, Grantee must file such election with the Internal Revenue Service within
thirty (30) days of the date of this Agreement, substantially in the form
attached as Exhibit A hereto and, if required, a comparable form of election
with applicable state taxing authorities. The parties hereto acknowledge and
agree that the total fair market value of the Shares as of the date of this
Agreement is $11.9375 per share.
13. MISCELLANEOUS.
13.1 NOTICES. Any notice required or permitted to be given to a party
pursuant to the provisions of this Agreement shall be in writing and shall be
effective upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified as set forth below
such party's signature or at such other address as such party may designate by
ten (10) days' advance written notice to the other parties hereto.
13.2 STOP TRANSFER ORDERS. Grantee understands and agrees that, in order
to ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop-transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
13.3 "MARKET STAND-OFF" AGREEMENT. Grantee agrees that, if requested by
the Company or the managing underwriter of any proposed public offering of the
Company's securities, Grantee will not sell or otherwise transfer or dispose of
any Shares held by Grantee without the prior written consent of the Company or
such underwriter, as the case may be, during such period of time, not to exceed
180 days following the effective date of the registration statement filed by the
Company with respect to such offering, as the Company or the underwriter may
specify.
13.4 SUCCESSORS AND ASSIGNS. This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective permitted successors, assigns and legal
representatives.
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13.5 SEVERABILITY. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
13.6 AMENDMENTS AND WAIVERS. Any amendment or modification of this
Agreement shall be effective only if evidenced by a written instrument executed
by duly authorized representatives of the parties hereto. Any party may waive
its individual rights hereunder, either prospectively or retroactively, which
shall be effective only if evidenced by a written instrument executed by a duly
authorized representative of such party. In no event shall such waiver of any
rights hereunder constitute the waiver of such rights in any future instance
unless the waiver so specifies in writing.
13.7 GOVERNING LAW. Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.
13.8 ATTORNEYS' FEES. If any party shall bring an action in law or
equity against another to enforce or interpret any of the terms, covenants and
provisions of this Agreement, the prevailing party in such action shall be
entitled to reasonable attorneys' fees which the other party hereby agrees to
pay.
13.9 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties pertaining to its subject matter and supersedes all prior or
contemporaneous written or oral agreements and understandings of the parties,
either express or implied.
13.10 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original but all of which together shall constitute one
instrument.
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IN WITNESS WHEREOF, the parties have executed this Restricted Stock
Agreement as of the day and first above written.
COMPANY:
THE TRIZETTO GROUP, INC.
By:
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Name:
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Its:
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Address: 567 San Nicholas Drive, Suite 360
Newport Beach, California 92660
HOLDER:
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Name:
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Address:
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EXHIBIT A
May 22, 2000
Internal Revenue Service Center
5104 N. Blyth
Fresno, California 93722
RE: ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE
Dear Sir or Madam:
The undersigned performed services in connection with which property was
transferred to the undersigned that, at the time of transfer, was not
transferable by the undersigned and was subject to a substantial risk of
forfeiture. The undersigned hereby makes this election pursuant to Section 83(b)
of the Internal Revenue Code.
In connection with this election, the undersigned hereby provides you with
the following information:
1. The undersigned's name, address, social security number, and taxable
year are as follows:
Name and Address:
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Social Security No.:
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Taxable Year: Calendar Year 2000
2. A description of the property with respect to which the election is
being made:
_______ shares of Common Stock, $.001 par value per share, (the
"Shares"), of The TriZetto Group, Inc., a Delaware corporation
(the "Company").
3. The date on which the property was transferred: May 22, 2000.
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4. A description of the nature of the restrictions to which the property is
subject:
The Company may cancel all or a portion of the Shares from the
undersigned in accordance with the terms of a Restricted Stock
Agreement between the undersigned and the Company. In the event the
undersigned should cease to be a service provider to the Company at
any time, the unvested Shares will be cancelled by the Company. The
Shares will vest in four equal annual installments commencing on the
first anniversary date of the Restricted Stock Agreement.
5. The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction which by its terms will never lapse)
of the property with respect to which the election is being made: $____ per
share, which results in an aggregate fair market value of $______.
6. The amount paid for such property: $0.
There are enclosed herewith two copies of this written statement for
filing. Please stamp the third copy enclosed herewith as having been received
and return it to the undersigned in the enclosed, self-addressed, postage-paid
envelope.
The undersigned has also submitted a copy of this statement to the person
for whom the services were performed.
Very truly yours,
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