SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
|X| Preliminary Information Statement |_| Confidential, for Use of the
Commission Only (as permitted
by Rule 14c-5(d)(2))
|_| Definitive Information Statement
CareAdvantage, Inc.
-----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
CAREADVANTAGE, INC.
485-C Route One South
Iselin, New Jersey 08830
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 7, 1999
To the Stockholders of CareAdvantage, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of CareAdvantage, Inc. (the "Company") will be held at the offices of the
Company at 485-C Route One South, Iselin, New Jersey 08830 on July 7, 1999, at
11:00 a.m. for the following purposes:
1. To elect six directors;
2. To approve amendments to the Company's Stock Option
Plan to increase the number of shares authorized for
issuance under such Plan from 9,000,000 to 18,648,000
shares of the Company's Common Stock, to authorize
the issuance of options under the Plan at the
exercise prices, upon the terms and restrictions and
subject to such other conditions or restrictions
established by the Board, and to permit certain
amendments to the Plan;
3. To approve amendments to the Company's Directors'
Stock Option Plan to provide the Board with greater
flexibility as to the terms of options issued under
such Plan;
4. To approve amendments to the Company's Certificate of
Incorporation to increase the total number of shares
of Common Stock authorized for issuance from
90,000,000 to 103,600,000; and
5. To transact such other business as may properly come
before the meeting or any adjournments thereof.
Only the stockholders of record of the Company at the close of business
on May 25, 1999, are entitled to notice of, and to vote at, the meeting. All
stockholders are invited to attend the meeting.
By Order of the Board of Directors,
Barry Weinberg
Secretary
June 7, 1999
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<PAGE>
CAREADVANTAGE, INC.
485-C Route One South
Iselin, New Jersey 08830
INFORMATION STATEMENT
This Information Statement (the "Information Statement") is furnished
to the holders of Common Stock, $0.001 par value per share (the "Common Stock"),
of CareAdvantage, Inc. (the "Company") in connection with the Annual Meeting of
Stockholders of the Company to be held on July 7, 1999, at the offices of the
Company at 485-C Route One South, Iselin, New Jersey 08830. WE ARE NOT ASKING
YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. This Information
Statement is being provided pursuant to the requirements of Rule 14c-2
promulgated under Section 14 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), to inform holders of Common Stock entitled to vote or give
an authorization or consent of the actions proposed to be taken at the Annual
Meeting of Stockholders, as set forth in the accompanying Notice of Annual
Meeting of Stockholders.
Only stockholders of record of the Company's issued and outstanding
Common Stock at the close of business on May 25, 1999 (the "Record Date") are
entitled to vote at the Annual Meeting of Stockholders and any adjournment
thereof ("Annual Meting") and to receive this Information Statement. As of the
close of business on the Record Date, there were 82,189,883 shares of Common
Stock outstanding, with each share entitled to one vote. There are no cumulative
voting rights.
The presence, in person or by proxy, of a majority of the shares
outstanding on the Record Date will constitute a quorum at the Annual Meeting.
The election of directors requires a plurality of the votes cast with a quorum
present. Other proposals considered at the meeting will be approved if a
majority of the votes cast in person or by proxy are voted in favor of the
proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of May 1, 1999 certain information
regarding the beneficial ownership of the Company's Common Stock by (i) all
persons known to the Company who own more than 5% of the outstanding Common
Stock, (ii) each Director, (iii) each of the executive officers named in the
Summary Compensation Table, and (iv) all executive officers and Directors as a
group. Unless otherwise indicated, the persons named in the table below have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
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Beneficial Ownership of Common Stock by
Certain Stockholders, the Directors and Management
<TABLE>
<CAPTION>
Shares
Name of Beneficial Owner Beneficially Owned(1) Percent(2)
<S> <C> <C>
Blue Cross and Blue Shield of New Jersey, Inc.(3)(4)(5) 37,617,420 45.77
CW Ventures II, L.P.(5)(6)(7) 37,784,087 45.88
William J. Marino(3) 334 *
Robert J. Pures(3) 0 0
Walter Channing, Jr.(5)(6)(7)(8) 37,784,087 45.88
Charles Hartman(5)(6)(7)(8) 37,784,087 45.88
Barry Weinberg(5)(6)(7)(8) 37,784,087 45.88
David J. McDonnell(9)(13) 100,000 *
Thomas P. Riley(10)(11)(13) 100,000 *
David Noone(12)(13) 0 0
Richard Freeman, M.D.(12)(13) 250,000 *
Stephan Deutsch, M.D.(12)(13) 251,233 *
Elaine del Rossi(12)(13)(14) 0 0
All Directors and executive officers as a group (10 persons)(8)(11)(13) 38,485,654 46.34
* Less than 1%
<FN>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, which generally attribute
beneficial ownership of securities to persons who possess sole or
shared voting or investment power with respect to those securities.
Beneficial ownership includes outstanding shares and shares subject to
options exercisable within 60 days.
(2) The percent beneficially owned by any person or group who held options
exercisable within 60 days has been calculated by assuming that all
such options have been exercised in full and adding the number of
shares subject to such options to the total number of shares issued and
outstanding.
(3) The business address of such person or entity is 3 Penn Plaza East,
Newark, New Jersey 07105.
(4) In the event that the Services Agreement dated February 22, 1996, among
the Company, its subsidiaries, and Blue Cross and Blue Shield of New
Jersey (now known as "Horizon BCBS") is terminated by Horizon BCBS, CW
Ventures II, L.P. ("CW Ventures") will have the right to purchase
Horizon BCBS shares in accordance with the terms of the Stockholders'
Agreement. See below, "Certain Relationships and Related Transactions."
(5) Horizon BCBS may be deemed a member of a "group," as such term is used
in Section 13(d) of the Exchange Act, with CW Ventures, CW Partners
III, L.P., the general partner of CW Ventures ("CW Partners"), and
Walter Channing, Charles Hartman and Barry Weinberg, the general
partners of CW Partners. Horizon BCBS on the one hand, and CW Ventures,
CW Partners and Messrs. Channing, Hartman and Weinberg, on the other,
disclaim membership in a group for the purpose of Section 13(d) of the
Exchange Act or for any other purpose.
(6) The business address of such person or entity is 1041 Third Avenue, New
York, New York 10021.
(7) Includes 166,667 shares of Common Stock issuable upon exercise of the
CW Warrants. CW Ventures has sole voting and disposition power over
shares owned by it.
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(8) Includes 37,617,420 shares directly owned by CW Ventures and 166,667
shares of Common Stock issuable upon exercise of the CW Warrants.
Messrs. Channing, Hartman and Weinberg are the general partners of CW
Partners, and as such may be deemed to beneficially own such shares and
to have shared voting and disposition power over such shares. Messrs.
Channing, Hartman and Weinberg disclaim beneficial ownership of such
shares except to the extent of their respective direct and indirect
partnership interests in CW Ventures.
(9) The business address of such person is 301 Aqua Court, Naples, Florida
34102.
(10) The business address of such person is 3 Long Ridge Lane, Ipswich,
Massachusetts 01938.
(11) Effective October 30, 1998, Mr. Riley resigned as President and Chief
Executive Officer of the Company, and effective November 16, 1998, Mr.
Riley resigned as a Director.
(12) The business address of such person is 485-C Route I South, Iselin,
New Jersey 08830.
(13) 100,000 of Mr. McDonnell's shares of Common Stock, 100,000 of Mr.
Riley's shares of Common Stock, 250,000 of Dr. Freeman's shares of
Common Stock, 250,000 of Dr. Deutsch's shares of Common Stock, and
700,000 of the shares of Common Stock of all directors and executive
officers as a group are issuable upon the exercise of stock options to
purchase shares of Common Stock that are exercisable on May 1, 1999 or
that will be exercisable within 60 days of such date.
(14) Effective April 21, 1999, the Company terminated Ms. del Rossi's
employment without cause.
</FN>
</TABLE>
ELECTION OF DIRECTORS
At the Annual Meeting, six directors will be elected to the Board of
Directors of the Company. Each director to be elected will hold office until the
next annual meeting of stockholders and until his successor is duly elected and
qualified, or until his earlier death, resignation or removal. There are six
nominees, all of whom are currently directors of the Company.
Set forth below is certain background information with respect to the
nominees for election, including information furnished by them as to their
principal occupations for at least the last five years, certain other
directorships held by them, and their ages as of the Record Date.
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age Position with the Company
William J. Marino 55 Chairman of the Board of Directors
Robert J. Pures 53 Director
Barry Weinberg 60 Director
David McDonnell 56 Director
Walter Channing, Jr. 58 Director
David Noone 45 Director and Chief Executive Officer
</TABLE>
William J. Marino has been a director of the Company since February 1996,
and a director of Contemporary HealthCare Management Systems, Inc. since
December 1993. He has been President, Chief Executive Officer and a director of
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Horizon Blue Cross Blue Shield of New Jersey ("Horizon BCBS," formerly Blue
Cross and Blue Shield of New Jersey, Inc.) since January 1994, and Senior
Vice President of Horizon BCBS from January 1992 through December 1993.
Mr. Marino also currently serves as a director of Digital Solutions, Inc.
Robert J. Pures has been a director of the Company since February 1996.
He has been Senior Vice President--Administration, Chief Financial Officer and
Treasurer of Horizon BCBS since 1995, and Vice President--Finance and Treasurer
of Horizon BCBS from October 1985 through July 1995.
Barry Weinberg has been a director of the Company since May 1997. He
has been President of the CW Group, Inc., a company engaged in investing in the
health care field since 1981. Mr. Weinberg currently serves as on the boards of
director of Autoimmune Inc., and several privately owned companies, and is a
general partner of CW Partners III, L.P. ("CW Partners").
Walter Channing, Jr., has been a director of the Company since May
1997. He has been Vice President of the CW Group, Inc., a company engaged in
investing in the health care field since 1981. Mr. Channing currently serves on
the boards of directors of several privately owned companies, and is a general
partner of CW Partners.
David J. McDonnell has been a director of the Company since January
1997. He served from December 1993 to February 1997 as a director of Value
Health, Inc., a company engaged in the health care service business. Prior to
that, he was employed by Preferred Health Care Ltd., a behavioral managed care
company, where he served as that company's Chief Executive Officer from 1988 to
1993, and its President from 1988 to 1992. Mr. McDonnell also served as Chairman
of Preferred Health Care Ltd.'s board of directors from 1991 to 1993.
David Noone has been a director of the Company and CEO since January 8,
1999. Mr. Noone served from September 1995 to February 1997 as the President and
Chief Executive Officer of Value Health International, a subsidiary of Value
Health, Inc., where he was responsible for the migration of managed health care
strategies to emerging markets in Europe, Latin America and Asia, and from
December 1993 to February 1995, as President and Chief Executive Officer of
Value Health Insurance Services Group, another Value Health, Inc. subsidiary,
where he was responsible for development of a diversified managed health care
company serving the property casualty, group health and auto liability sectors.
Prior to that time, Mr. Noone served as President and Chief Operating Officer of
Preferred Health Care Ltd. from 1992 to 1993, and in a variety of capacities
with that company from 1987 to 1992.
There is no family relationship between any Director or executive
officer of the Company.
In fiscal year 1998, the Board of Directors held 11 meetings. During
that year, each Director attended, in the aggregate, at least 75% of the
meetings of the Board, except Mr. Channing who attended 73% of such meetings.
Committees of the Board
The Board of Directors has an Audit Committee and a Compensation
Committee.
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The Audit Committee consists of Messrs. Pures, McDonnell and Channing.
The Audit Committee recommends to the Board the selection of the independent
public accountants, reviews with such accountants and with management the
financial statements of the Company and other results of the audit, and monitors
internal accounting procedures and controls. The Audit Committee also reviews
and considers proposed related party transactions, if any. The Audit Committee
did not meet in fiscal 1998.
The Compensation Committee consists of Messrs. Marino, Weinberg and
McDonnell, and makes recommendations to the Board regarding compensation of
Directors, executive officers, executive compensation generally, and benefit
plans for management to be considered by the Board. The Compensation Committee
did not meet in fiscal year 1998.
Compensation of Directors
The Company executed a Consultation Agreement dated October 1, 1997,
with David McDonnell providing for compensation of $25,000 per month for the
last three months of calendar year 1997 (October 1997 to December 1997) for an
aggregate amount of $75,000. The Company paid Mr. McDonnell $50,000 during the
fiscal year ended October 31, 1998 under the terms of this agreement.
Except as stated herein, no member of the Company's Board of Directors
presently receives remuneration for acting in that capacity, except
disinterested Directors who are neither officers of nor associated with
stockholders. Disinterested Directors are paid $1,000 for each meeting of the
Board they attend and are eligible for the grant of options under the Directors'
Stock Option Plan. For a discussion of the Directors' Stock Option Plan, see
"Amendment to Directors' Stock Option Plan", below. Except for the option
granted to David McDonnell to purchase 300,000 shares of the Company's Common
Stock on January 26, 1999 (see "Directors' Stock Option Plan - Grant Contingent
upon Stockholder Approval" below), no Director has been granted options pursuant
to the Directors' Stock Option Plan. Directors are also reimbursed their
reasonable out-of-pocket expenses for each meeting of the Board or any committee
thereof that they attended.
Certain Relationships and Related Transactions
The Company, Horizon BCBS and CW Ventures are parties to an agreement
dated February 22, 1996 (the "Stockholders Agreement") pursuant to which Horizon
BCBS and CW Ventures agreed that the Board shall consist of seven members. By
unanimous written consent dated as of May 22, 1997, the Board of Directors
reduced the number of the Company's Directors to six, and by letters to the
Company dated the same date ("May 22, 1997 Letters"), Horizon BCBS and CW
Ventures consented to such reduction and modified their voting obligations under
the Stockholders Agreement. As modified by the May 22, 1997 Letters, the
Stockholders Agreement provides that Horizon BCBS and CW Ventures each shall
vote their shares in favor of two members of the Board designated by Horizon
BCBS, two members of the Board designated by CW Ventures, one member from senior
management of the Company who is acceptable to Horizon BCBS and CW Ventures, and
one member not associated with the operations of the Company who is acceptable
to Horizon BCBS and CW Ventures. Horizon BCBS has designated William J. Marino
and Robert J. Pures as its nominees for election as members of the Board; CW
Ventures has designated Barry Weinberg and Walter Channing, Jr. as its nominees
for election as members of the Board.
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<PAGE>
In addition, the Company has entered into a series of transactions with
Horizon BCBS and CW Ventures, which are described in Item 12 (p.35) of the
Company's Form 10K-SB for the fiscal year ended October 31, 1998. A copy of the
Form 10K-SB accompanies this Information Statement.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than 10%
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and NASDAQ, copies of which are required by regulation to be furnished to the
Company. Based solely on review of the copies of such forms furnished to the
Company, the Company believes that during fiscal year 1998 and through January
1999, its officers, directors and ten percent (10%) beneficial owners complied
with all Section 16(a) filing requirements, with the exceptions that Drs.
Freeman and Deutsch, Mr. Noone and Ms. del Rossi were late in filing their
respective initial statement of beneficial ownership (Form 3); Drs. Freeman and
Deutsch were late in filing their respective annual statement of beneficial
ownership (Form 5); and CW Ventures was late in filing its annual statement of
beneficial ownership (Form 5) reflecting its increased stock ownership on
account of conversion of the CW Note.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth information concerning the compensation
paid or accrued by the Company for each of the three fiscal years ended October
31, 1998, to the individual performing the function of Chief Executive Officer
and each of the most highly compensated executive officers with compensation in
excess of $100,000 during such periods.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation Compensation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Securities All Other
Name and Principal Position Year Ended Other Annual Underlying Comp-
October 31 Salary Bonus Compensation(2) Options/SARSs ensation
(#)
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas P. Riley, (3) 1998 $275,000 $ -0- $70,138 $ -0- $4,313(1)
President & 1997 230,000 300,000 -0- -0- 4,115(1)
Chief Executive Officer 1996 127,500 -0- -0- 250,000 -0-
- ------------------------------------------------------------------------------------------------------------------------------------
Richard W. Freeman, M.D., 1998 $266,698(4) $ 35,000 $ -0- $ -0- $4,917(1)
President & 1997 254,000 35,000 25,000 -0- 5,881(1)
Chief Operating Officer 1996 245,000 -0- -0- 250,000 2,498(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Stephan D. Deutsch, M.D., 1998 $294,231(5) $ 35,000 $ -0- $ -0- $ -0-
Sr. Vice President & Nat'l 1997 284,615 69,231 -0- -0- -0-
Medical Director, CAHS 1996 259,615 23,000 -0- -0- -0-
- ------------------------------------------------------------------------------------------------------------------------------------
Elaine del Rossi, 1998 $80,000(6) $ 50,000 $ -0- $ -0- -0-
Sr. Vice President,Marketing 1997 -0- -0- -0- -0- -0-
and Sales 1996 -0- -0- -0- -0- -0-
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Represents Company matching contributions to a 401(k) profit sharing/savings plan.
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(2) Other Annual Compensation includes taxable fringe benefits and payment
for certain unused accrued vacation.
(3) Effective October 30, 1998, Mr. Riley resigned his position as President
and Chief Executive of the Company.
(4) Dr. Freeman is paid an annual salary of $275,000 under the terms of his
amended and restated employment agreement dated September
29, 1998.
(5) Dr. Deutsch is paid an annual salary of $300,000 under the terms of his
employment agreement
(6) Ms. del Rossi joined the Company on March 25, 1998 and was paid an
annual salary of $160,000 under the terms of her employment agreement.
The salary and bonus set forth above represents compensation for a
partial year only. Ms. del Rossi's employment with the Company
terminated April 21, 1999.
</FN>
</TABLE>
Stock Options
The Company maintains a stock option plan pursuant to which incentive
and non-qualified stock options have been granted in the past and are expected
to be granted in the future. For a discussion of this plan, see "Amendments to
Stock Option Plan." No options were granted to or exercised by the named
executive officers during the fiscal year ended October 31, 1998.
Aggregated Fiscal Year-End Option Values
Number of Value of
Shares Underlying Unexercised
Unexercised Options at In-the-Money Options at
October 31, 1998 October 31, 1998
Name Exercisable/Unexercisable Exercisable/Unexercisable(1)
Thomas P. Riley(2) N/A N/A
Richard W. Freeman, M.D. 166,667/83,333 $0/$0
Stephan D. Deutsch 166,667/83,333 $0/$0
Elaine del Rossi(3) N/A N/A
(1) Based upon the average bid and asked prices on the OTC Bulletin Board of
the Company's Common Stock on May 25, 1999.
(2) Effective October 30, 1998, Mr. Riley resigned his position as President
and Chief Executive of the Company.
(3) Effective April 21, 1999, Ms. del Rossi's employment with the Company was
terminated without cause.
Resignations, Employment Agreements and Board Appointments
Resignation of Riley as Chief Executive Officer, President and Director
Thomas P. Riley resigned as President and Chief Executive Officer of
the Company, effective October 30, 1998, and as a Director of the Company
effective November 16, 1998. In consideration of his efforts on behalf of the
Company, the Board, as of January 26, 1999, authorized the payment to Mr. Riley
of a separation bonus consisting of $30,000 cash and, subject to stockholder
approval of the amendments to the Stock Option Plan (see "Amendments to Stock
Option Plan - Grants Contingent upon Stockholder Approval"), options to purchase
100,000 shares of the Company's Common Stock at an
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exercise price equal to that date's fair market value of the Company's Common
Stock (i.e., $.08 per share), which options are immediately exercisable.
Noone Employment Agreement and Appointment as a Director
Effective as of January 8, 1999 the Company entered into an Employment
Agreement and Confidentiality, Invention and Non-Compete Agreement with David
Noone, its current Chief Executive Officer (collectively, the "Noone
Agreements"). The Noone Agreements provide for a one-year term commencing
January 8, 1999, with annual compensation of $300,000 per annum. The Company
will pay Mr. Noone a severance payment equal to six-months salary if he is
terminated after either of the Company's two largest shareholders, Horizon BCBS
and CW Ventures, sells or transfers its shares of Common Stock to a
non-affiliated party. In addition, Mr. Noone is subject to a non-compete
restriction during the term of employment plus two years thereafter. The Noone
Agreements further provide for granting Mr. Noone stock options to purchase a
number of shares equal to 4% of the outstanding shares of Common Stock, or
3,600,000 shares. All of the options have an exercise price of $.03 per share
and a term of 10 years. The Noone Agreements provide that options for 1,800,000
shares become exercisable as follows: (a) 1/3 on December 31, 1999; and (b) the
remaining 2/3 of such shares in equal monthly amounts over the period January 1,
2000, to December 31, 2001. Options for the remaining 1,800,000 shares
("Performance Options") become exercisable over a period of three years
commencing January 8, 2000 if certain performance criteria are met.
The Board of Directors of the Company appointed David Noone a Director
as of January 8, 1999, filling a vacancy on the Board.
On February 24, 1999, the Board of Directors of the Company approved an
amendment to the Performance Options granted to David Noone on January 8, 1999.
Prior to amendment, options to purchase 1,800,000 shares became exercisable over
a period of three years commencing January 8, 2000 only if certain performance
criteria are met. Under the terms of this amendment, Mr. Noone's Performance
Options become exercisable in three equal annual installments on the fourth,
fifth and sixth anniversary of the date of grant, regardless of whether the
performance criteria are met.
Freeman Employment Agreement
The Company entered into an Amended and Restated Employment Agreement,
dated as of September 29, 1998, with Richard Freeman, M.D., the current
President and Chief Operating Officer of the Company and CAHS (the "Freeman
Employment Agreement"). The term of the Freeman Employment Agreement commenced
on October 30, 1998 and continues for a two-year period, with an additional
one-year renewal. Under the Freeman Employment Agreement, Dr. Freeman is
entitled to an annual salary of $275,000, plus other benefits set forth therein.
The Freeman Employment Agreement provides for a cash bonus in the amount of
$95,000 in the event of a "Change in Control of the Company" (as defined
therein). The Freeman Employment Agreement also contains a non-compete
restriction during the term of Dr. Freeman's employment plus two years
thereafter.
Deutsch Employment Agreement
Effective as of April 28, 1998, the Company and CAHS entered into an
Employment Agreement with Stephan D. Deutsch, M.D. (the "Deutsch Employment
Agreement"), the current Senior Vice President
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of CAHS and National Medical Director of CAHS. The term of the Deutsch
Employment Agreement commenced on April 28, 1998 and continues for a two-year
period, with a successive one-year renewal term. Dr. Deutsch is entitled to an
annual salary of $250,000, an annual supplemental salary of $50,000 for his
services as National Medical Director of CAHS, plus other benefits set forth
therein. Under the Deutsch Employment Agreement, Dr. Deutsch is entitled to
participate in any CAHS' Executive Annual Bonus Incentive Plan as may be
established by the Board. The Deutsch Employment Agreement also contains
solicitation and non-compete restrictions during the term of Dr. Deutsch's
employment plus one year thereafter.
del Rossi Employment Agreement
Effective as of March 25, 1998 the Company entered into an Employment
Agreement (the "del Rossi Employment Agreement") and Confidentiality, Invention
and Non-Compete Agreement (the "Confidentiality Agreement") with Elaine del
Rossi, the current Senior Vice President for Marketing and Sales of the Company.
The term of the del Rossi Employment Agreement commenced on March 25, 1998 and
continues for successive one-year periods unless terminated pursuant to its
terms. The del Rossi Employment Agreement renewed pursuant to its terms for a
one-year term as of March 25, 1999. Ms. del Rossi is entitled to an annual
salary of $160,000, plus other benefits set forth therein. The del Rossi
Employment Agreement provides for a cash bonus of $50,000 upon Ms. del Rossi's
commencement of employment with the Company. In addition, Ms. del Rossi is
entitled to sales commissions as additional compensation. The del Rossi
Confidentiality Agreement contains a non-compete restriction during the term of
Ms. del Rossi's employment plus one year thereafter, unless Ms. del Rossi is
terminated without cause by the Company. The Company has terminated Ms. del
Rossi's employment without cause effective April 21, 1999.
AMENDMENTS TO STOCK OPTION PLAN
The following is a discussion of the Company's 1996 Stock Option Plan
and amendments to such plan as adopted by the Board of Directors in January
1999. This discussion is a summary only and is qualified by reference to the
complete text of the plan as amended and restated which accompanies this
Information Statement as Exhibit A.
Terms of the Plan
The 1996 Stock Option Plan ("Stock Option Plan"), which was adopted by
the Company June 6, 1996, and amended July 24, 1996, is administered by a
Committee of the Board of Directors consisting of at least two members who are
"outside directors" as defined in Section 162(m) of the Internal Revenue Code
who are also "disinterested persons" as defined in regulations under the
Securities and Exchange Act of 1934. Pursuant to the terms of the Stock Option
Plan, the Committee will select persons to be granted options and will
determine: (i) whether to grant a non-qualified stock option and/or an incentive
stock option; (ii) the number of shares of the Company's Common Stock that may
be purchased upon the exercise of such option; (iii) the time or times when the
option becomes exercisable, except that no stock received pursuant to an option
shall be sold by the recipient prior to six months from the date of grant; (iv)
the exercise price, which cannot be less than 100% of the fair market value of
the Common Stock on the date of grant (110% of such fair market value for
incentive options granted to a person who owns or who is considered to own stock
possessing more than 10% of the total combined voting power of all
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classes of stock of the Company); and (v) the duration of the option, which
cannot exceed ten (10) years. Incentive stock options may only be granted to
employees (including officers) of the Company and/or any of its subsidiaries.
Non-qualified stock options may be granted to any employees (including employees
who have been granted incentive stock options) and other persons who the
Committee may select. Options, which must be granted substantially in the form
prescribed by the Stock Option Plan, are not valid unless signed by the grantee.
Under the Stock Option Plan, an aggregate of 10% of the Company's authorized
number of shares of Common Stock (equal to 9,000,000 shares of Common Stock) is
reserved for issuance.
All options granted under the Stock Option Plan are exercisable during
the option grantee's lifetime only by the option holder (or his or her legal
representative) and generally only while such option grantee is in the Company's
employ. In the event an option grantee's employment is terminated other than by
death or disability, such person shall have three months from the date of
termination to exercise such option to the extent the option was exercisable at
such date, but in no event subsequent to the option's expiration date. In the
event of termination of employment due to death or disability of the option
grantee, such person (or such person's legal representative) shall have 12
months from such date to exercise such option to the extent the option was
exercisable at the date of termination, but in no event subsequent to the
option's expiration date.
The Stock Option Plan contains anti-dilution provisions which provide
that, in the event of any change in the Company's outstanding capital stock by
reason of stock dividend, recapitalization, stock split, combination, exchange
of shares or merger or consolidation, the Committee or the Board shall
proportionately adjust the number of shares covered by each option granted and
the exercise price per share. The Committee's or Board's determinations in these
matters shall be conclusive.
The Board of Directors has the authority to terminate the Stock Option
Plan as well as to make changes in and additions to such plans. The plan will
terminate on June 6, 2006, unless previously terminated by the Board. However,
unless approved by the stockholders of the Company, the Board may not change the
aggregate number of shares subject to the Stock Option Plan, terminate, modify
or amend such plan so as to adversely affect the rights of option holders
previously granted under such plan, change the requirements of eligibility to
such plan or materially increase the benefits accruing to participants under
such plan.
January 8, 1999 Amendment
In connection with the hiring of David Noone, the Company's Chief
Executive Officer, and in accordance with the terms of Mr. Noone's Employment
Agreement with the Company, the Company agreed to amend its Stock Option Plan so
that the stock options provided Mr. Noone pursuant to the Employment Agreement
could be issued from the Stock Option Plan. Accordingly, as of January 8, 1999,
and subject to approval by the Company's stockholders, the Board amended and
restated the Company's 1996 Stock Option Plan (now known as the "Stock Option
Plan") to provide the Committee thereof with increased flexibility in the terms
and conditions of stock options it may award (the "January 8 Amendment").
The January 8 Amendment authorizes the Committee, subject to an
option's expiration date, to permit an option's exercise beyond three months
after termination of employment, and beyond 12 months after termination on
account of death or disability; it changes the form agreements used for option
grants
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and authorizes the Committee to prescribe a different form of agreement for any
grantee; it authorizes the Committee to issue non-qualified stock options with
an exercise price less than 100% of fair market value of the Common Stock; it
eliminates the requirement that the grantee of an option sign it in order for it
to be effective; and in the case of incentive stock options, it removes a
$100,000 limitation on the amount of stock that may be purchased in any calendar
year (as determined by fair market value on date of grant).
In addition, the January 8 Amendment changes the Stock Option Plan
provisions regarding the exercise of an option to permit payment of the exercise
price via any lawful method authorized by the Committee; it removes the
requirement that Common Stock received upon exercise of an option be held for
six months after grant; and it adds authority for the Board to require as a
condition to exercise that provision be made for any payroll tax liability.
Finally, the January 8 Amendment removes certain restrictions on the
authority of the Board to amend the Stock Option Plan without stockholder
approval; and it changes the name of the Stock Option Plan from 1996 Stock
Option Plan to Stock Option Plan.
January 26, 1999 Amendment
In connection with option grants made to other employees (see below,
"Grants Contingent upon Stockholder Approval") and subject to approval by the
Company's stockholders, the Board amended the Stock Option Plan to increase from
10% to 18% the portion of the Company's authorized Common Stock reserved for
issuance thereunder (the "January 26 Amendment"). Together with the Amendment to
its Certificate of Incorporation increasing the Common Stock authorized for
issuance from 90,000,000 shares to 103,6000,000 shares, the January 26 Amendment
authorizes the Stock Option Plan to issue stock options for 18,648,000 shares of
Common Stock.
Grants Contingent upon Stockholder Approval
Subject to approval of the January 8 Amendment and the January 26
Amendment by the Company's stockholders, on January 26, 1999, the Board granted
stock options under the Stock Option Plan (a) to certain employees of the
Company for the aggregate amount of 10,156,000 shares of Common Stock, and (b)
to Thomas P. Riley, a former Chief Executive Officer of the Company for 100,000
shares of Common Stock. All options have an exercise price of $.08 per share and
a term of 10 years, subject to earlier termination upon certain events. The
market price of the Common Stock on January 26, 1999, the date the options were
granted, was $.08. The options granted to employees are incentive stock options
which become exercisable over three years--one-third of the shares covered by
the options become exercisable after one year, and two-thirds of such shares
become exercisable in equal monthly amounts during the succeeding two years. The
options granted to Thomas Riley are non-qualified stock options which are
immediately exercisable.
AMENDMENT TO DIRECTORS' STOCK OPTION PLAN
The following is a discussion of the Company's 1996 Directors' Stock
Option Plan and amendment to such plan as adopted by the Board of Directors in
January 1999. This discussion is a summary only and is qualified by reference to
the complete text of the plan as amended and restated which accompanies this
Information Statement as Exhibit B.
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Terms of the Plan
The 1996 Directors' Stock Option Plan ("Directors' Stock Option Plan"),
was adopted by the Company on June 6, 1996, and amended July 24, 1996. Pursuant
to the terms of the Directors' Stock Option Plan, the Board of Directors shall
grant non-employee Directors (other than certain named persons) upon their
appointment as Directors options to purchase (i) 166,667 shares of Common Stock
(as adjusted for a one-for-six reverse stock split); (ii) at an exercise price
equal to the fair market value of the Common Stock on the date of grant; (iii)
exercisable ratably over 36 months; and (iv) having a duration of five years
from the date of grant. Option grants, which must be evidenced by written
agreements substantially in the form prescribed by the Directors' Stock Option
Plan, are not valid unless signed by the grantee. Under the Directors' Stock
Option Plan, an aggregate of 2% of the Company's authorized number of shares of
Common Stock (equal to 1,800,000 shares of Common Stock) is reserved for
issuance.
All options granted under the Directors' Stock Option Plan are
exercisable during the option grantee's lifetime only by the option grantee (or
his or her legal representative). In the event of termination of an option
grantee's directorship, such person shall have three months from such date to
exercise such option to the extent the option was exercisable as at the date of
termination, but in no event subsequent to the option's expiration date. In the
event of termination of an option grantee's directorship due to death, such
person's legal representative shall have 12 months from such date to exercise
such option to the extent the option was exercisable at the date of death, but
in no event subsequent to the option's expiration date.
The Directors' Stock Option Plan contains anti-dilution provisions
which provide that in the event of any change in the Company's outstanding
capital stock by reason of stock dividend, recapitalization, stock split,
combination, exchange of shares or merger or consolidation, the Board shall
equitably adjust the aggregate number and kind of shares reserved for issuance,
and for outstanding options, the number of shares covered by each option and the
exercise price per share.
The Board of Directors has the authority to terminate the Directors'
Stock Option Plan with respect to any shares of Common Stock not at the time
subject to an option as well as to make changes in and additions to such plan.
The plan will terminate on June 6, 2006, if not previously terminated by the
Board. However, the Board may not, unless approved by the stockholders of the
Company, change the aggregate number of shares subject to the Directors' Stock
Option Plan, terminate, modify or amend such plan so as to adversely affect the
rights of option holders previously granted under such plan, change the
requirements of eligibility to such plan or materially increase the benefits
accruing to participants under such plan.
At the time that David McDonnell joined the Board in January 1997, the
Board informally determined that the Directors' Stock Option Plan, as written,
should not become effective and accordingly, no stock options were issued to Mr.
McDonnell at that time.
January 26, 1999 Amendment
In connection with its January 26, 1999 grant to Mr. McDonnell of
options to purchase 300,000 shares of the Company's Common Stock, the Board
amended the Directors' Stock Option Plan to provide
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the Board with increased flexibility in the terms and conditions of stock
options it may award (the "Amendment").
The Amendment authorizes the Board to determine the number of shares to
be covered under an option, the term of each option and the vesting of each
option; it authorizes the Board, subject to an option's expiration date, to
permit an option's exercise beyond three months after termination of
directorship and beyond 12 months after death; it changes the form agreement
used for option grants and authorizes the Board to prescribe a different form of
agreement for any option grantee; and it eliminates the requirement that an
option grantee sign the option agreement in order for it to be effective. In
addition, the Amendment changes the Plan to permit payment of the exercise price
via any lawful method authorized by the Board.
Finally, the Amendment removes certain restrictions on the authority of
the Board to amend the Directors' Stock Option Plan without stockholder
approval.
Grant Contingent upon Stockholder Approval
Subject to approval of the amendment by the Company's Stockholders, as
of January 26, 1999, the Board granted Mr. McDonnell an option to purchase
300,000 shares of the Company's Common Stock. The option may be exercised at $
.08 per share, and becomes exercisable as follows: (a) 100,000 of such shares
shall be immediately exercisable; (b) 66,666 of such shares shall become
exercisable on January 26, 2000; and (c) the remaining 133,334 of such shares
shall become exercisable in 24 equal monthly amounts commencing on February 26,
2000, and on the 26th day of the following 23 months. The market price of the
Common Stock on January 26, 1999, the date the option was granted, was $.08 per
share.
FEDERAL INCOME TAX ASPECTS OF PLANS
Upon the grant of an incentive stock option under the Stock Option
Plan, and upon the exercise of such option, the grantee does not recognize
taxable income and the Company will not be entitled to any deduction. If the
shares acquired upon exercise are not disposed of within the one-year period
beginning on the date of the transfer of the shares to the grantee, nor within
the two-year period from the date of the grant of the option, any gain or loss
realized by the grantee upon the disposition of such shares will be taxed as
long-term capital gain or loss. In such event, the Company will not be entitled
to a deduction. If the shares are disposed of within the one year or two-year
periods referred to above, the excess of the fair market value of the shares on
the date of exercise (or, if less, the fair market value on the date of
disposition) over the exercise price will be taxable as ordinary income to the
grantee at the time of disposition, and the Company will be entitled to a
corresponding deduction.
Upon the grant of a non-qualified stock option under the Stock Option
Plan or the Directors' Stock Option Plan, no income will be realized by the
grantee and the Company will not be entitled to any deduction. Upon the exercise
of such option, the difference between the exercise price and the fair market
value of the shares on the date of exercise will be ordinary income to the
grantee and will be allowed as a deduction for federal income tax purposes to
the Company. When a grantee disposes of shares acquired by the exercise of the
option, any amount received in excess of the fair market value of the shares on
the date of exercise will be treated as long or short term capital gain,
depending upon the holding period of the shares, which commences upon exercise
of the option. If the amount received is less than the fair
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market value of the shares on the date of exercise, the loss will be treated as
long or short term capital loss, depending upon the holding period of the
shares.
To the extent that a grantee pays all or part of the exercise price by
tendering shares owned by the grantee, the normal rules described above apply
except that a number of shares received upon such exercise equal to the number
of shares surrendered as payment of the option price will have the same tax
basis and tax holding period as the shares surrendered.
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
The Board of Directors, in connection with its Amendment to the Stock
Option Plan, and subject to approval by the stockholders of the Company,
approved amending Paragraph (A) of Article FOURTH of the Company's Restated
Certificate of Incorporation as follows:
FOURTH: (A) Authorized Capital Stock. The total number of
shares of all classes of stock which the Corporation shall
have authority to issue One Hundred Thirteen Million Six
Hundred Thousand shares, consisting of One Hundred Three
Million Six Hundred Thousand shares of Common Stock, $.001 par
value per share (the "Common Stock") and Ten Million shares of
Preferred Stock, $.10 par value per share (the "Preferred
Stock").
The amendment is necessary to give effect to the Amendment to the Stock
Option Plan authorizing an increase in the number of shares authorized for
issuance under that plan from 10% to 18%. With the proposed amendment to the
Restated Certificate of Incorporation, the number of shares authorized for
issuance under the Stock Option Plan would increase from 9,000,000 to 18,648,000
shares, and the number of shares authorized for issuance under the Directors'
Stock Option Plan would increase from 1,800,000 to 2,072,000 shares.
SUBMISSION OF SHAREHOLDER PROPOSALS TO BE CONSIDERED
AT THE JULY 2000 ANNUAL MEETING
Any shareholder desiring to present a proposal to be included in the
proxy statement and voted on by the shareholders at the Annual Meeting of
Shareholders to be held in July 2000 must submit in writing proposals, including
all supporting materials, to the Company at its principal executive offices no
later than February 8, 2000.
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OTHER MATTERS
The annual report of the Company on Form 10-KSB for the fiscal year
ending October 31, 1998 accompanies this Information Statement. The Company's
auditors are Richard A. Eisner & Company, LLP. Representatives of the auditors
are not expected to be present at the meeting.
By Order of the Board of Directors,
Barry Weinberg
Secretary
Dated: June 7, 1999
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EXHIBIT A
RESTATED AND AMENDED
STOCK OPTION PLAN
OF
CAREADVANTAGE, INC.
1. Purpose of Plan
The purpose of this Stock Option Plan ("Plan") is to further the growth
and development of CareAdvantage, Inc. ("Company") and any subsidiaries thereof
by encouraging selected employees and other persons who contribute and are
expected to contribute materially to the Company's success to obtain a
proprietary interest in the Company through the ownership of stock, thereby
providing such persons with an added incentive to promote the best interests of
the Company and affording the Company a means of attracting to its service
persons of outstanding ability.
2. Adjustment
An aggregate of 18% of the Company's authorized common stock, $ .001
par value ("Common Stock") subject, however, to adjustment or change pursuant to
paragraph 12 hereof, shall be reserved for issuance upon the exercise of options
which may be granted from time to time in accordance with the Plan ("Options").
Such shares, in whole or in part, may be authorized but unissued shares or
issued shares which have been reacquired by the Company, as the Committee (as
such term is hereinafter defined) shall from time to time determine. If, for any
reason, an Option shall lapse, expire or terminate without having been exercised
in full, the unpurchased shares covered thereby shall again be available for
purposes of the Plan.
3. Administration
(a) For purposes of the Plan, the "Committee" shall be defined
as two or more Directors of the Company's Board of Directors (the "Board") who
shall be "disinterested persons" as defined by Regulation 240.16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and "outside
directors" as defined in regulations under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"). Such Committee shall have and may
exercise any and all of the powers relating to the administration of the Plan
and the grant of Options thereunder as are set forth in subparagraph 3(b) hereof
as the Board shall confer and delegate. The Board shall have power at any time
to fill vacancies in, to change the membership of, or to discharge such
Committee. The Committee shall select one of its members as its chairman and
shall hold its meetings at such times and at such places as it shall deem
advisable. A majority of such Committee shall constitute a quorum and such
majority shall determine its action. Any action may be taken without a meeting
by written consent of all the members of the Committee. The Committee shall
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keep minutes of its proceedings and shall report the same to the Board at the
meeting next succeeding.
(b) The Committee shall administer the Plan and, subject to
the provisions of the Plan, shall have authority, along with the Board, to
determine the persons to whom, and the time or times at which, Options shall be
granted, the number of shares to be subject to each such Option and whether all
or any portion of such Options shall be incentive stock options ("Incentive
Options") qualifying under Section 422 of the Code or stock options which do not
so qualify ("NonQualified Options"). Both Incentive Options and NonQualified
Options may be granted to the same person at the same time provided each type of
Option is clearly designated. In making such determinations, the Committee may
take into account the nature of the services rendered by such persons, their
present and potential contribution to the Company's success and such other
factors as the Committee in its sole discretion may deem relevant. Subject to
the express provisions of the Plan, the Committee shall also have authority to
interpret the Plan; to prescribe, amend and rescind rules and regulations
relating thereto; to determine the terms and provisions of option agreements,
which may differ among recipients, and which, unless the Committee otherwise
determines, shall be substantially in the forms attached hereto as Exhibit A for
Incentive Options and Exhibit B for Non-Qualified Options; and to make all other
determinations necessary or advisable for the administration of the Plan, all of
which determinations shall be conclusive and not subject to review. The
Committee may delegate, in its sole discretion, to any officer or manager of the
Company the authority to perform administrative functions under the Plan.
4. Eligibility for Receipt of Options
(a) Incentive Options. Incentive Options may be granted only
to employees (including officers) of the Company and/or any of its subsidiaries.
Further, Incentive Options may not be granted to any person who, at the time the
Incentive Option is granted, owns (or is considered as owning within the meaning
of Section 424 of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any subsidiary (10%
Owner), unless at the time the Incentive Option is granted to the 10% Owner, the
option price is at least 110% of the fair market value of the Common Stock
subject thereto and such Incentive Option by its terms is not exercisable
subsequent to five years from the date of grant.
(b) NonQualified Options. NonQualified Options may be granted
to any employees (including employees who have been granted Incentive Options)
and other persons whom the Board (or Committee) determines will contribute to
the Company's success.
5. Option Price
The purchase price of the shares of Common Stock under each Option
shall be determined by the Committee, which determination shall be conclusive
and not subject to review, but in no event shall the purchase price be less than
100% of the fair market value of the Common Stock on the date of grant in the
case of Incentive Options (110% of fair market value in the case of Incentive
Options granted to a 10% Owner).
In determining fair market value, the Committee shall consider the
closing price of the Common Stock on the date the Option is granted (if such
Common Stock is listed on a national
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securities exchange), the representative closing bid and ask price in the
overthecounter market as reported by NASDAQ or as quoted by the National
Quotation Bureau or a recognized dealer in the Common Stock on the date of grant
(if a public market exists for such Common Stock and such Common Stock is not
listed on such an exchange) and such other factors as the Committee shall deem
appropriate.
For purposes of the Plan, the date of grant of an Option shall be the
date on which the Board or the Committee shall by resolution duly authorize such
Option.
6. Term of Options
The term of each Incentive Option and NonQualified Option shall be such
number of years as the Committee shall determine, subject to earlier termination
as herein provided, but in no event more than ten (10) years from the date such
Incentive Option or NonQualified Option is granted.
7. Exercise of Options
(a) An Option or any part thereof may be exercised only by the
giving of written notice to the Company, on such form and in such manner as the
Committee shall prescribe, which notice shall state the election to exercise the
Option and the number of whole shares of Common Stock with respect to which the
Option is being exercised. Such notice must be accompanied by payment for the
shares purchased, which payment shall be made: (a) by certified or official bank
check for the full option exercise price payable to the Company (or the
equivalent thereof acceptable to the Company); or (b) by delivery of shares of
Common Stock having a fair market value (determined as of the date of exercise)
equal to all or part of the purchase price and, if applicable, a certified or
official bank check (or the equivalent thereof acceptable to the Company) for
any remaining portion of the full option exercise price; or (c) at the
discretion of the Committee and to the extent permitted by law, by such other
provision for payment, consistent with the terms of the Plan, as the Committee
may from time to time prescribe.
(b) The Company shall have the right to require as a condition
of exercise of the Option by the Grantee that the Grantee remit to the Company
an amount sufficient in the opinion of the Company to satisfy all federal, state
and other governmental tax withholding requirements related to such exercise. In
the alternative, the Committee may, under such rules as it may adopt, allow the
Grantee to elect to have the Company hold back Shares having a fair market value
sufficient in the opinion of the Company to enable the Company to satisfy such
withholding requirements.
(c) An Option may not be exercised for fractional shares of
the Company's Common Stock.
(d) The holder of an Option shall have none of the rights of a
stockholder with respect to the shares purchasable upon exercise of the Option
until a certificate for such shares shall have been issued to the holder upon
due exercise of the Option.
(e) Notwithstanding any other provision of the Plan, if the
Committee shall at any time determine that any Consent (as hereinafter defined)
is necessary or desirable as a condition of, or
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in connection with, the issuance or transfer of shares or the taking of any
other action in connection with the Plan, then such action shall not be taken,
in whole or in part, unless and until such Consent shall have been effected or
obtained to the full satisfaction of the Committee. For purposes of this
subsection, the term "Consent" means (a) any and all listings, registrations, or
qualifications in respect thereof upon any securities exchange or under any
federal, state or local law, rule or regulation, (b) any and all written
agreements and representations by the holder of an Option with respect to the
disposition of the shares, or with respect to any other matter, which the
Committee shall deem necessary or desirable to comply with the terms of any such
listing, registration or qualification or to obtain an exemption from the
requirement that any such listing, qualification or registration be made, and
(c) any and all consents, clearances and approvals by any governmental or other
regulatory bodies in respect of any action taken or to be taken under the Plan
or this Agreement.
8. Nontransferability of Options
No Option granted pursuant to the Plan shall be transferable otherwise
than by will or the laws of descent or distribution and an Option may be
exercised during the lifetime of the holder only by such holder.
9. Termination of Employment or Engagement
In the event the employment of the holder of an Option shall be
terminated by the Company or a subsidiary for any reason other than by reason of
death or disability, or the engagement of a nonemployee holder of a NonQualified
Option shall be terminated by the Company or a subsidiary for any reason, unless
the Committee otherwise provides, such holder may, within three (3) months from
the date of such termination, exercise such Option to the extent such Option was
exercisable by such holder at the date of such termination. Notwithstanding the
foregoing, no Option may be exercised subsequent to the date of its expiration.
Absence or leave approved by the Company shall not be considered an interruption
of employment for any purpose under the Plan.
Nothing in the Plan or in any Option Agreement granted hereunder shall
confer upon any holder of an Option any right to continue in the employ of the
Company or any subsidiary or obligate the Company or any subsidiary to continue
the engagement of any holder of an Option or interfere in any way with the right
of the Company or any such subsidiary to terminate the holder's of such Option
employment or engagement at any time.
10. Disability of Holder of Option
If the employment of the holder of an Option shall be terminated by
reason of such holder's disability as determined in accordance with Section
22(e)(3) of the Code, unless the Committee otherwise provides, such holder may,
within twelve (12) months from the date of such termination, exercise such
option to the extent such Option was exercisable by such holder at the date of
such termination. Notwithstanding the foregoing, no Option may be exercised
subsequent to the date of its expiration.
11. Death of Holder of Option
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Unless the Committee otherwise provides, if the holder of any Option
shall die while in the employ of, or while performing services for, the Company
or one or more of its subsidiaries (or within three (3) months following
termination of employment for any reason), the Option theretofore granted to
such person may be exercised, but only to the extent such Option was exercisable
by the holder at the date of death (or, with respect to employees, the date of
termination of employment) by the legatee or legatees of such person under such
person's Last Will, or by such person's personal representative or distributees,
within twelve (12) months from the date of death, but in no event subsequent to
the expiration date of the Option.
12. Adjustments Upon Changes in Capitalization
If at any time after the date of grant of an Option, the Company shall,
by stock dividend, splitup, combination, reclassification or exchange, or
through merger or consolidation or otherwise, change its shares of Common Stock
into a different number or kind or class of shares or other securities or
property, then the number of shares covered by such Option and the price per
share thereof shall be proportionately adjusted for any such change by the
Committee or the Board whose determination thereon shall be conclusive. Upon the
dissolution or liquidation of the Company, or upon a reorganization, merger or
consolidation of the Company as a result of which the outstanding securities of
the class then subject to Options hereunder are changed into or exchanged for
cash or property or securities not of the Company's issue, or upon a sale of
substantially all of the property of the Company to, or the acquisition of stock
representing more than eighty percent (80%) of the voting power of the stock of
the Company then outstanding by, another corporation or person, the Plan shall
terminate, and all Options theretofore granted hereunder shall terminate, unless
provision be made in writing in connection with such transaction for the
continuance of the Plan or for the assumption of Options theretofore granted, or
the substitution for such Options with options covering the stock of a successor
employer corporation, or a parent or a subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices, in which event the
Plan and Options theretofore granted shall continue in the manner and under the
terms so provided. The Committee or the Board shall have the discretion to
provide at the time of granting any Option hereunder that in the event the Plan
and Options then outstanding shall terminate upon the effective date of any of
the transactions described in the foregoing sentence, the vesting of the then
unexercisable portion of such holder's Option shall be accelerated, in whole or
in part as determined by the Committee or the Board, so that such holder prior
to the consummation of the transaction shall be entitled to exercise such Option
(to the extent thereby exercisable) prior to consummation of such transaction.
In the event that a fraction of a share results from an adjustment pursuant to
this paragraph 12, said fraction shall be eliminated and the price per share of
the remaining shares subject to the Option adjusted accordingly.
13. Termination and Amendment
The Plan shall terminate on June 6, 2006 and no Option shall be granted
under the Plan after such date. The Board may at any time prior to such date
terminate the Plan or make such modifications or amendments thereto as it shall
deem advisable; provided, however, that, unless otherwise approved by the
stockholders of the Company no change shall be made in the aggregate number of
shares subject to the Plan, no material modification shall be made to the
requirements of eligibility for participation in the Plan, and no material
increase shall be made in the benefits accruing to participants under the Plan.
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EXHIBIT A
CAREADVANTAGE
STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated as of _____, _____ ("Option Date") between
CareAdvantage, Inc. a Delaware corporation (the "Company"), and
___________________ (the "Grantee").
The Company's Stock Option Plan Committee (the Committee") has
determined that the objectives of the Company's Stock Option Plan will be
furthered by granting to the Grantee an option pursuant to the Plan. Pursuant to
Section 3(a) of the Plan, the term "Committee" as used herein shall be deemed to
mean the Board of Directors of the Company in any instance in which the Board of
Directors administers the Plan.
In consideration of the foregoing, the Company agrees as follows:
SECTION 1. GRANT OF OPTION
1.1 Subject to the terms and conditions hereinafter set forth, the
Committee hereby grants to the Grantee the right and option (the "Option") under
the Plan to purchase _______ shares (the "Shares") of Common Stock of the
Company, at a per Share purchase price of ______.
1.2 The Option is intended to qualify as an incentive stock option as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
SECTION 2. EXERCISABILITY
2.1 The Option shall become cumulatively exercisable as follows: (a)
options to purchase 1/3 of the amount of such Shares shall become exercisable on
<specify one year anniversary of Option Date>; and (b) options to purchase the
remaining 2/3 of the amount of such Shares shall become exercisable in 24 equal
monthly amounts commencing on <specify 13 month anniversary of Option Date>, and
on the <specify day of month of Option Date>th day of the following 23 months.
Each scheduled increase in the exercisable portion of the Option shall occur
only if the Grantee is then in the employ of the Company within the meaning of
Section 3.2.
2.2 Any number of Shares which the Grantee is entitled to purchase
during any period, as set forth in Section 2.1, but which are not then purchased
by the Grantee, may be purchased at any time thereafter prior to the termination
of the Option pursuant to Section 3.
SECTION 3. TERMINATION
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3.1 The unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the earliest to
occur of the following:
(a) 11:59 p.m. on the day preceding the tenth anniversary
of the Option Date;
(b) The expiration of three months (twelve months in the case
of an employee who is disabled within the meaning of Section 22(e)(3) of the
Code) from the date of termination of the Grantee's employment by the Company or
any of its subsidiaries (other than a termination described in clause (c) or (d)
below); provided, that if the Grantee shall die during threemonths from the date
of termination of the Grantee's employment (regardless of disability), the
provisions of clause (c) below shall apply;
(c) The expiration of twelve months from the date of the
Grantee's death, if such death occurs either during his employment by the
Company or any of its subsidiaries or during the three-month period following
the date of termination of such employment (other than a termination described
in clause (d) below);
(d) The termination of the Grantee's employment by the Company
or any of its subsidiaries if such termination is by reason of dismissal for
cause. The Committee shall have the right to determine whether the Grantee has
been dismissed for cause and the date of such dismissal, such determination of
the Committee to be final and conclusive.
3.2 References herein to an individual's "employment" shall include any
and all periods during which such individual is a common law employee of the
Company or a subsidiary. The Grantee shall be deemed to have terminated
employment when the Grantee completely ceases to be employed (within the meaning
of the preceding sentence) by the Company and all of its subsidiary
corporations. The Committee may in its discretion determine (a) whether any
leave of absence constitutes a termination of employment within the meaning of
this Agreement, and (b) the impact, if any, of any such leave of absence on the
Option granted under this Agreement.
SECTION 4. METHOD OF EXERCISE
4.1 The Option or any part thereof may be exercised only by the giving
of written notice to the Company, on such form and in such manner as the
Committee shall prescribe, which notice shall state the election to exercise the
Option and the number of whole Shares of Common Stock with respect to which the
Option is being exercised. Such notice must be accompanied by payment for the
Shares purchased, which payment shall be made: (a) by certified or official bank
check for the full option exercise price payable to the Company (or the
equivalent thereof acceptable to the Company); or (b) by delivery of shares of
Common Stock having a fair market value (determined as of the date of exercise)
equal to all or part of the purchase price and, if applicable, a certified or
official bank check (or the equivalent thereof acceptable to the Company) for
any remaining portion of the full option exercise price; or (c) at the
discretion of the Committee and to the extent permitted by law, by such other
provision for payment, consistent with the terms of the Plan, as the Committee
may from time to time prescribe.
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4.2 The date of exercise of the Option shall be the date on which
written notice of the exercise is hand delivered to the Company, as the
Committee shall prescribe, or if mailed, the date on which it is postmarked.
4.3 The Company shall have the right to require as a condition of
exercise of the Option by the Grantee that the Grantee remit to the Company an
amount sufficient in the opinion of the Company to satisfy all federal, state
and other governmental tax withholding requirements related to such exercise. In
the alternative, the Committee may, under such rules as it may adopt, allow the
Grantee to elect to have the Company hold back Shares having a fair market value
sufficient in the opinion of the Company to enable the Company to satisfy such
withholding requirements.
4.4 Subject to Section 5, the Company shall cause to be issued to the
Grantee (or to such other person as the Grantee may designate or to such other
person as may then have the right to exercise the Option) a certificate or
certificates representing the Shares purchased by exercise of the Option. Such
certificates(s) shall be dated as of the exercise date, and shall be delivered
as soon as practicable after the Company receives the full option exercise
price.
SECTION 5. RESTRICTIONS
5.1 Notwithstanding any other provision of this Agreement, if the
Committee shall at any time determine that any Consent (as hereinafter defined)
is necessary or desirable as a condition of, or in connection with, the issuance
or transfer of Shares or the taking of any other action in connection with this
Agreement or the Plan, then such action shall not be taken, in whole or in part,
unless and until such Consent shall have been effected or obtained to the full
satisfaction of the Committee.
5.2 For purposed of Section 5.1, the term "Consent" means (a) any and
all listings, registrations, or qualifications in respect thereof upon any
securities exchange or under any federal, state or local law, rule or
regulation, (b) any and all written agreements and representations by the
Grantee with respect to the disposition of the Shares, or with respect to any
other matter, which the Committee shall deem necessary or desirable to comply
with the terms of any such listing, registration or qualification or to obtain
an exemption from the requirement that any such listing, qualification or
registration be made, and (c) any and all consents, clearances and approvals by
any governmental or other regulatory bodies in respect of any action taken or to
be taken under the Plan or this Agreement.
SECTION 6. NONASSIGNABILITY
6.1 No right granted to the Grantee under the Plan or this Agreement
shall be assignable or transferable (whether by operation of law or otherwise
and whether voluntarily or involuntarily) other than by will or by the laws of
descent and distribution. During the life of the Grantee, all rights granted to
the Grantee under the Plan or under this Agreement shall be exercisable only by
the Grantee or his legal representative.
6.2 In the event of the Grantee's death during his employment by the
Company or any of its subsidiaries, or during the three-month period following
the termination of such employment except a termination described in Section 3.1
(d), the Option shall thereafter be exercisable for a period of twelve months
from the date of Grantee's death by his executor or administrator or by the
person or persons to whom his rights under the Option shall have passed by will,
but only to the extent that the
25
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Option was exercisable by the Grantee at his death (subject to acceleration by
the Committee pursuant to Section 13.2). If the Grantee's executor or
administrator or the recipient of a specific disposition under the Grantee's
will shall be entitled to exercise the Option pursuant to the preceding
sentence, such person shall be bound by all the terms and conditions of the Plan
and this Agreement which would have applied to the Grantee's exercise of the
Option (if he had lived) including, without limitation, the provisions of
Section 5.
SECTION 7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any increase or decrease, after the date of this
Agreement, in the number of issued shares of Common Stock resulting from the
subdivision or combination of shares of Common Stock or other capital
adjustment, or the payment of a stock dividend, or other increase or decrease in
such shares effected without receipt of consideration by the Company, the
Committee shall proportionately adjust the number of Shares subject to the
Option, the purchase price set forth in Section 1.1, and any and all other
matters deemed appropriate by the Committee, provided, however, that any option
to purchase fractional shares resulting from an such adjustment shall be
eliminated.
SECTION 8. RIGHT OF DISCHARGE RESERVED
Nothing in the Plan or in this Agreement shall confer upon the Grantee
the right to continue in the employment of the Company or any of its
subsidiaries or affect any right which the Company or any of its subsidiaries
may have to terminate such employment.
SECTION 9. NO RIGHTS AS A STOCKHOLDER
Neither the Grantee nor any person succeeding to the Grantee's rights
hereunder shall have any rights as a stockholder with respect to any Shares
subject to the Option until the Option shall have been exercised. Except for
adjustments made pursuant to Section 7, no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities or other property) for which the record date is
prior to the date of such exercise.
SECTION 10. NATURE OF PAYMENTS
10.1 The grant of the Option and any and all issuances of Shares
thereunder shall be in consideration of services performed by the Grantee for
the Company or for its subsidiaries.
10.2 The grant of the Option and any and all issuances of Shares
thereunder shall constitute a special incentive payment to the Grantee. Such
issuances shall not, unless otherwise determined by the Committee, be taken into
account in computing the amount of salary or compensation of the Grantee for the
purpose of determining any pension, retirement, death or other benefits under
(i) any pension, retirement, profit-sharing, bonus, or life insurance
arrangement or (ii) any agreement between the Company or any subsidiary, on the
one hand, and the Grantee, on the other hand.
SECTION 11. COMMITTEE DETERMINATIONS
The Committee's determinations under the Plan and this Agreement need
not be uniform and may be made by it selectively among persons who receive
awards under the Plan (whether or not such persons
26
<PAGE>
are similarly situated). All decisions, interpretations and determinations by
the Committee with regard to any question or matter arising hereunder or under
the Plan shall be conclusive and binding upon the Company and the Grantee.
SECTION 12. DEFINTION OF COMMON STOCK
The term "Common Stock" as used in this Agreement means the shares of
Common Stock of the Company as constituted on the date of this Agreement and any
other shares into which such Common Stock shall thereafter be changed by reason
of recapitalization, merger, consolidation, split-up, combination, exchange of
shares or the like.
SECTION 13. PLAN PROVISIONS TO PREVAIL; AMENDMENT
13.1 This Agreement shall be subject to all of the terms and provisions
of the Plan. In the event that there is any inconsistency between the provisions
of this Agreement and the Plan, the provisions of the Plan shall govern.
13.2 With the consent of the Grantee (or such other person as may have
the right to exercise the Option upon the Grantee's death), and subject to the
terms and provisions of the Plan, the Committee may amend this Agreement,
including, without limitation, amendments that accelerate the schedule of
exercisability set forth in Section 2.2 or extend the termination date set forth
in Section 3.1; provided, that no such amendment may permit the option to be
exercised after the expiration of the 10-year period beginning on the Option
Date.
SECTION 14. SECTION HEADINGS
14.1 The Section headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of the
Sections.
14.2 Any notice to be given to the Company or the Committee hereunder
shall be in writing and shall be addressed to the Company or the Committee at
485-C Route One South, Iselin, New Jersey 08830, or at such other address as the
Company may hereafter designate to the Grantee by notice as provided herein.
14.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and successors and assigns of the Company and, to the extent
set forth in Section 6, the heirs and personal representatives of the Grantee.
14.4 This Agreement shall be interpreted, construed and administered in
accordance with the laws of the State of New Jersey as they apply to contracts
made, delivered and performed in the State of New Jersey.
14.5 Nothing contained in this Agreement shall be deemed in any way to
limit or restrict the Company or any subsidiary from making any award or payment
to the Grantee under any other plan, arrangement or understanding, whether now
existing or hereafter in effect.
27
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IN WITNESS WHEREOF, the Company has executed this Agreement as of the
day and year first above written.
CAREADVANTAGE, INC.
By: _________________________________
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EXHIBIT B
CAREADVANTAGE
STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated as of _____, _____ ("Option Date") between
CareAdvantage, Inc. a Delaware corporation (the "Company"), and
___________________ (the "Grantee").
The Company's Stock Option Plan Committee (the "Committee") has
determined that the objectives of the Company's Stock Option Plan will be
furthered by granting to the Grantee an option pursuant to the Plan. Pursuant to
Section 3(a) of the Plan, the term "Committee" as used herein shall be deemed to
mean the Board of Directors of the Company in any instance in which the Board of
Directors administers the Plan.
In consideration of the foregoing, the Company agrees as follows:
SECTION 1. GRANT OF OPTION
1.1 Subject to the terms and conditions hereinafter set forth, the
Committee hereby grants to the Grantee the right and option (the "Option") under
the Plan to purchase _______ shares (the "Shares") of Common Stock of the
Company, at a per Share purchase price of ______.
1.2 The Option is intended not to qualify as an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
SECTION 2. EXERCISABILITY
2.1 The Option shall become cumulatively exercisable as follows: (a)
options to purchase 1/3 of the amount of such Shares shall become exercisable on
(specify one year anniversary of Option Date); and (b) options to purchase the
remaining 2/3 of the amount of such Shares shall become exercisable in 24 equal
monthly amounts commencing on (specify 13 month anniversary of Option Date), and
on the(specify day of month of Option Date)the day of the following 23 months.
Each scheduled increase in the exercisable portion of the Option shall occur
only if the Grantee is then in the employ of the Company within the meaning of
Section 3.2.
2.2 Any number of Shares which the Grantee is entitled to purchase
during any period, as set forth in Section 2.1, but which are not then purchased
by the Grantee, may be purchased at any time thereafter prior to the termination
of the Option pursuant to Section 3.
SECTION 3. TERMINATION
3.1 The unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the earliest to
occur of the following:
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(a) 11:59 p.m. on the day preceding the tenth anniversary of
the Option Date;
(b) The expiration of three months (twelve months in the case
of an employee who is disabled within the meaning of Section 22(e)(3) of the
Code) from the date of termination of the Grantee's employment by the Company or
any of its subsidiaries (other than a termination described in clause (c) or (d)
below); provided, that if the Grantee shall die during three months from the
date of termination of the Grantee's employment (regardless of disability), the
provisions of clause (c) below shall apply;
(c) The expiration of twelve months from the date of the
Grantee's death, if such death occurs either during his employment by the
Company or any of its subsidiaries or during the three-month period following
the date of termination of such employment (other than a termination described
in clause (d) below);
(d) The termination of the Grantee's employment by the Company
or any of its subsidiaries if such termination is by reason of dismissal for
cause. The Committee shall have the right to determine whether the Grantee has
been dismissed for cause and the date of such dismissal, such determination of
the Committee to be final and conclusive.
3.2 References herein to an individual's "employment" shall include any
and all periods during which such individual is a common law employee or an
officer or a director of, or a consultant to, the Company or a subsidiary. The
Grantee shall be deemed to have terminated employment when the Grantee
completely ceases to be employed (within the meaning of the preceding sentence)
by the Company and all of its subsidiary corporations. The Committee may in its
discretion determine (a) whether any leave of absence constitutes a termination
of employment within the meaning of this Agreement, and (b) the impact, if any,
of any such leave of absence on the Option granted under this Agreement.
SECTION 4. METHOD OF EXERCISE
4.1 The Option or any part thereof may be exercised only by the giving
of written notice to the Company, on such form and in such manner as the
Committee shall prescribe, which notice shall state the election to exercise the
Option and the number of whole Shares of Common Stock with respect to which the
Option is being exercised. Such notice must be accompanied by payment for the
Shares purchased, which payment shall be made: (a) by certified or official bank
check for the full option exercise price payable to the Company (or the
equivalent thereof acceptable to the Company); or (b) by delivery of shares of
Common Stock having a fair market value (determined as of the date of exercise)
equal to all or part of the purchase price and, if applicable, a certified or
official bank check (or the equivalent thereof acceptable to the Company) for
any remaining portion of the full option exercise price; or (c) at the
discretion of the Committee and to the extent permitted by law, by such other
provision for payment, consistent with the terms of the Plan, as the Committee
may from time to time prescribe.
4.2 The date of exercise of the Option shall be the date on which
written notice of the exercise is hand delivered to the Company, as the
Committee shall prescribe, or if mailed, the date on which it is postmarked.
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4.3 The Company shall have the right to require as a condition of
exercise of the Option by the Grantee that the Grantee remit to the Company an
amount sufficient in the opinion of the Company to satisfy all federal, state
and other governmental tax withholding requirements related to such exercise. In
the alternative, the Committee may, under such rules as it may adopt, allow the
Grantee to elect to have the Company hold back Shares having a fair market value
sufficient in the opinion of the Company to enable the Company to satisfy such
withholding requirements.
4.4 Subject to Section 5, the Company shall cause to be issued to the
Grantee (or to such other person as the Grantee may designate or to such other
person as may then have the right to exercise the Option) a certificate or
certificates representing the Shares purchased by exercise of the Option. Such
certificates(s) shall be dated as of the exercise date, and shall be delivered
as soon as practicable after the Company receives the full option exercise
price.
SECTION 5. RESTRICTIONS
5.1 Notwithstanding any other provision of this Agreement, if the
Committee shall at any time determine that any Consent (as hereinafter defined)
is necessary or desirable as a condition of, or in connection with, the issuance
or transfer of Shares or the taking of any other action in connection with this
Agreement or the Plan, then such action shall not be taken, in whole or in part,
unless and until such Consent shall have been effected or obtained to the full
satisfaction of the Committee.
5.2 For purposed of Section 5.1, the term "Consent" means (a) any and
all listings, registrations, or qualifications in respect thereof upon any
securities exchange or under any federal, state or local law, rule or
regulation, (b) any and all written agreements and representations by the
Grantee with respect to the disposition of the Shares, or with respect to any
other matter, which the Committee shall deem necessary or desirable to comply
with the terms of any such listing, registration or qualification or to obtain
an exemption from the requirement that any such listing, qualification or
registration be made, and (c) any and all consents, clearances and approvals by
any governmental or other regulatory bodies in respect of any action taken or to
be taken under the Plan or this Agreement.
SECTION 6. NONASSIGNABILITY
6.1 No right granted to the Grantee under the Plan or this Agreement
shall be assignable or transferable (whether by operation of law or otherwise
and whether voluntarily or involuntarily) other than by will or by the laws of
descent and distribution. During the life of the Grantee, all rights granted to
the Grantee under the Plan or under this Agreement shall be exercisable only by
the Grantee or his legal representative.
6.2 In the event of the Grantee's death during his employment by the
Company or any of its subsidiaries, or during the three-month period following
the termination of such employment except a termination described in Section 3.1
(d), the Option shall thereafter be exercisable for a period of twelve months
from the date of Grantee's death by his executor or administrator or by the
person or persons to whom his rights under the Option shall have passed by will,
but only to the extent that the Option was exercisable by the Grantee at his
death (subject to acceleration by the Committee pursuant to Section 13.2). If
the Grantee's executor or administrator or the recipient of a specific
disposition under the Grantee's will shall be entitled to exercise the Option
pursuant to the preceding sentence,
31
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such person shall be bound by all the terms and conditions of the Plan and this
Agreement which would have applied to the Grantee's exercise of the Option (if
he had lived) including, without limitation, the provisions of Section 5.
SECTION 7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any increase or decrease, after the date of this
Agreement, in the number of issued shares of Common Stock resulting from the
subdivision or combination of shares of Common Stock or other capital
adjustment, or the payment of a stock dividend, or other increase or decrease in
such shares effected without receipt of consideration by the Company, the
Committee shall proportionately adjust the number of Shares subject to the
Option, the purchase price set forth in Section 1.1, and any and all other
matters deemed appropriate by the Committee, provided, however, that any option
to purchase fractional shares resulting from an such adjustment shall be
eliminated.
SECTION 8. RIGHT OF DISCHARGE RESERVED
Nothing in the Plan or in this Agreement shall confer upon the Grantee
the right to continue in the employment of the Company or any of its
subsidiaries or affect any right which the Company or any of its subsidiaries
may have to terminate such employment.
SECTION 9. NO RIGHTS AS A STOCKHOLDER
Neither the Grantee nor any person succeeding to the Grantee's rights
hereunder shall have any rights as a stockholder with respect to any Shares
subject to the Option until the Option shall have been exercised. Except for
adjustments made pursuant to Section 7, no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities or other property) for which the record date is
prior to the date of such exercise.
SECTION 10. NATURE OF PAYMENTS
10.1 The grant of the Option and any and all issuances of Shares
thereunder shall be in consideration of services performed by the Grantee for
the Company or for its subsidiaries.
10.2 The grant of the Option and any and all issuances of Shares
thereunder shall constitute a special incentive payment to the Grantee. Such
issuances shall not, unless otherwise determined by the Committee, be taken into
account in computing the amount of salary or compensation of the Grantee for the
purpose of determining any pension, retirement, death or other benefits under
(i) any pension, retirement, profit-sharing, bonus, or life insurance
arrangement or (ii) any agreement between the Company or any subsidiary, on the
one hand, and the Grantee, on the other hand.
SECTION 11. COMMITTEE DETERMINATIONS
The Committee's determinations under the Plan and this Agreement need
not be uniform and may be made by it selectively among persons who receive
awards under the Plan (whether or not such
32
<PAGE>
persons are similarly situated). All decisions, interpretations and
determinations by the Committee with regard to any question or matter arising
hereunder or under the Plan shall be conclusive and binding upon the Company and
the Grantee.
SECTION 12. DEFINTION OF COMMON STOCK
The term "Common Stock" as used in this Agreement means the shares of
Common Stock of the Company as constituted on the date of this Agreement and any
other shares into which such Common Stock shall thereafter be changed by reason
of recapitalization, merger, consolidation, split-up, combination, exchange of
shares or the like.
SECTION 13. PLAN PROVISIONS TO PREVAIL; AMENDMENT
13.1 This Agreement shall be subject to all of the terms and provisions
of the Plan. In the event that there is any inconsistency between the provisions
of this Agreement and the Plan, the provisions of the Plan shall govern.
13.2 With the consent of the Grantee (or such other person as may have
the right to exercise the Option upon the Grantee's death), and subject to the
terms and provisions of the Plan, the Committee may amend this Agreement,
including, without limitation, amendments that accelerate the schedule of
exercisability set forth in Section 2.2 or extend the termination date set forth
in Section 3.1; provided, that no such amendment may permit the option to be
exercised after the expiration of the 10-year period beginning on the Option
Date.
SECTION 14. SECTION HEADINGS
14.1 The Section headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of the
Sections.
14.2 Any notice to be given to the Company or the Committee hereunder
shall be in writing and shall be addressed to the Company or the Committee at
485-C Route One South, Iselin, New Jersey 08830, or at such other address as the
Company may hereafter designate to the Grantee by notice as provided herein.
14.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and successors and assigns of the Company and, to the extent
set forth in Section 6, the heirs and personal representatives of the Grantee.
14.4 This Agreement shall be interpreted, construed and administered in
accordance with the laws of the State of New Jersey as they apply to contracts
made, delivered and performed in the State of New Jersey.
14.5 Nothing contained in this Agreement shall be deemed in any way to
limit or restrict the Company or any subsidiary from making any award or payment
to the Grantee under any other plan, arrangement or understanding, whether now
existing or hereafter in effect.
33
<PAGE>
IN WITNESS WHEREOF, the Company has executed this Agreement as of the
day and year first above written.
CAREADVANTAGE, INC.
By: _________________________________
34
<PAGE>
EXHIBIT B
RESTATED AND AMENDED
DIRECTORS' STOCK OPTION PLAN
OF
CAREADVANTAGE, INC.
1. Purpose of Plan.
The purpose of this Directors' Stock Option Plan (the "Plan") is to
provide incentives to directors of CareAdvantage, Inc. (the "Company") who are
not full-time employees of the Company ("Non-Employee Directors") to advance the
interests of the Company by giving them an opportunity to participate in an
increase in the market value of shares of the Company's Common Stock, $.001 par
value ("Common Stock"). The options to purchase Common Stock under the Plan
shall not qualify as Incentive Stock Options under Section 422 of the Internal
Revenue Code of 1986, as amended.
2. Administration.
(a) The Plan shall be administered by the Board of Directors
(the "Board") of the Company.
(b) The Board shall have the authority to (i) exercise all of
the powers granted to it under the Plan, (ii) to construe, interpret and
implement the Plan and any Stock Option Agreements, which unless the Board
otherwise provides shall be substantially in the form attached hereto as Exhibit
A, (iii) to prescribe, amend and rescind rules and regulations relating to the
Plan, (iv) to make all determinations necessary or advisable in administering
the Plan, and (v) to correct any defect, supply any omission and reconcile any
inconsistency in the Plan.
(c) The determination of the Board on all matters relating to
the Plan or any Stock Option Agreement shall be final, binding and conclusive.
(d) No member of the Board shall be liable for any action or
determination made in good faith with respect to the Plan or any award
thereunder.
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3. Eligibility
Individuals who are Non-Employee directors of the Company (other than
CW Directors and EHC Directors as those terms are defined in the Stockholders'
Agreement dated February 22, 1996, by and among Enterprise Holding Company,
Inc., CW Ventures II, L.P., and the Company) shall be eligible to participate in
the Plan. Each Non-Employee Director to whom an option is granted hereunder is
referred to as an "Optionee."
4. Shares Subject to the Plan.
Subject to adjustment as provided in Section 7 hereof, the maximum
aggregate number of shares of Common Stock as to which options may at any time
be granted to all Optionees is 2% of the Company's authorized Common Stock,
which shares may, at the discretion of the Board, be either authorized but
unissued shares or shares previously issued and reacquired by the Company.
Shares subject to options under the Plan which remain unpurchased on the
expiration or termination of an option shall again be available for options to
be granted under the Plan.
5. Granting of Options.
The Board may grant to an eligible Director an option to purchase such
number of shares of Common Stock as the Board may determine, at an exercise
price and upon such terms and conditions as the Board may provide. For purposes
of the Plan, the date of grant of an Option shall be the date on which the Board
or the Committee shall by resolution duly authorize such Option.
6. Terms and Conditions of Options
Options granted under the Plan shall be evidenced by a written Stock
Option Agreement which unless the Board otherwise determines, shall be
substantially in the form attached hereto as Exhibit A and signed by the Chief
Executive Officer of the Company. All options shall be granted subject to the
following terms and conditions:
(a) Option Price. The purchase price of the shares of Common
Stock under each Option shall be determined by the Committee.
(b) Option Term. Each Option shall be granted for a term
determined from time to time by the Board, but in no event shall an option be
granted for a term of more than ten (10) years and each option may be made
subject to earlier termination in the event of death or voluntary or involuntary
termination of the Non-Employee Director as set forth herein.
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(c) Exercise of Options.
(i) Except as provided in Section 6(e) hereof,
each option shall be exercisable only by the Optionee during his lifetime.
(ii) No option shall be exercisable after the
tenth anniversary of the date of grant.
(d) Notice of Exercise: Payment; Stockholders' Rights.
(i) An Option or any part thereof may be exercised only by
the giving of written notice to the Company, on such form and in such
manner as the Board shall prescribe, which notice shal l state the
election to exercise the Option and the number of whole shares of
Common Stock with respect to which the Option is being exercised. Such
notice must be accompanied by payment for the shares purchased, which
payment shall be made: (a) by certified or official bank check for the
full option exercise price payable to the Company (or the equivalent
thereof acceptable to the Company) ; or (b) by delivery of shares of
Common Stock having a fair market value (determined as of the date of
exercise) equal to all or part of the purchase price and, if
applicable, a certified or official bank check (or the equivalent
thereof acceptable to the Company) for any remaining portion of the
full option exercise price; or (c) at the discretion of the Board and
to the extent permitted by law, by such other provision for payment,
consistent with the terms of the Plan, as the Board may from time to
time prescribe.
(ii) The Company shall have the right to require as a
condition of exercise of the Option by the Optionee that the Optionee
remit to the Company an amount sufficient in the opinion of the
Company to satisfy all federal, state and other governmental tax
withholding requirements related to such exercise. In the alternative,
the Committee may, under such rules as it may adopt, allow the
Optionee to elect to have the Company hold back Shares having a fair
market value sufficient in the opinion of the Company to enable the
Company to satisfy such withholding requirements.
(iii) An Option may not be exercised for fractional shares
of the Company's Common Stock.
(iv) The holder of an Option shall have none of the rights
of a stockholder with respect to the shares purchasable upon exercise
of the Option until a certificate for such shares shall have been
issued to the holder upon due exercise of the Option.
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(v) Notwithstanding any other provision of the Plan, if the
Board shall at any time determine that any Consent (as hereinafter
defined) is necessary or desirable as a condition of, or in connection
with, the issuance ortransfer of shares or the taking of any other
action in connection with thePlan, then such action shall not be
taken, in whole or in part, unless and until such Consent shall have
been effected or obtained to the full satisfaction of the Board. For
purposes of this subsection, the term "Consent" means (a) any and all
listings, registrations, or qualifications in respect thereof upon any
securities exchange or under any federal, state or local law, rule or
regulation, (b) any and all written agreements and representations by
the holder of an Option with respect to the disposition of the shares,
or with respect to any other matter, which the Board shall deem
necessary or desirable to comply with the terms of any such listing,
registration or qualification or to obtain an exemption from the
requirement that any such listing, qualification or registration be
made, and (c) any and all consents, clearances and approvals by any
governmental or other regulatory bodies in respect of any action taken
or to be taken under the Plan or this Agreement.
(e) Death or Voluntary or Involuntary Termination. In the
event of death of the Optionee or voluntary or involuntary termination of
directorship with the Company of the Optionee, such option may, subject to the
provisions of the Plan and any restrictions or limitations as are determined by
the Board, be exercised as to those optioned shares in respect of which such
option has not previously been exercised, but only to the extent that such
option could be exercised by the Optionee on the date of such death or voluntary
or involuntary termination of directorship with the Company (whichever is the
applicable case):
(i)In the event of the death of the Optionee, then by his or
her executor or administrator, or by the person or persons to whom the
Option is transferred by will or the applicable laws of descent and
distribution, within twelve (12) months from the date of death, but in
no event subsequent to the expiration date of the option; and
(ii)In the event of the Optionee's voluntary or involuntary
termination of directorship with the Company, then by the Optionee
within three(3) months from the date of termination, but in no event
subsequent to the expiration date of the option.
(f) Non-transferability. The rights and interests of each
Optionee shall not be transferable or alienable by assignment or in any manner
whatsoever, otherwise than by will or the laws of descent and distribution.
7. Adjustment in Event of Changes in Capitalization.
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In the event of a recapitalization, stock split, stock dividend,
combination, exchange of shares, merger, consolidation, rights offering,
separation, reorganization, liquidation or other change in the corporate
structure of the Company, the Board shall make such equitable adjustments,
designed to protect against dilution, as it may deem appropriate in the number
and kind of shares subject to the Plan and, with respect to outstanding options,
in the number and kind of shares covered thereby and in the exercise price.
8. Termination or Amendment of Plan.
The Board may, at any time, terminate the Plan with respect to any
shares of Common Stock not at the time subject to an option, and may from time
to time alter or amend the Plan or any part thereof, provided, however, that no
change in any option theretofore granted may be made which would materially
impair the rights of the Optionee without his or her consent.
9. Issuance of Shares.
The shares of Common Stock, when issued and paid for pursuant to the
options granted hereunder, shall be issued as fully paid and non-assessable
shares.
10. Adoption of Plan; Duration of Plan.
The Plan shall terminate on June 6, 2006 and no option shall be granted
under the Plan after such date. The Board may at any time prior to such date
terminate the Plan or make such modifications or amendments thereto as it shall
deem advisable; provided, however, that, unless otherwise approved by the
shareholders of the Company:
(i) no change shall be made in the aggregate
number of shares subject to the Plan; and
(ii) no material modification shall be made to
the requirements of eligibility for participation in the Plan.
11. No Right to Continued Directorship
Nothing contained in this Plan or in any Stock Option Agreement shall
confer upon any Director any right to continue as a director of the Company.
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EXHIBIT A
CAREADVANTAGE, INC.
DIRECTORS' STOCK OPTION PLAN
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated as of _____, _____ ("Option Date") between
CareAdvantage, Inc. a Delaware corporation (the "Company"), and
___________________ (the "Grantee").
The Company's Board of Directors (the "Board") has determined that the
objectives of the Company's Directors' Stock Option Plan will be furthered by
granting to the Grantee an option pursuant to the Plan.
In consideration of the foregoing, the Company agrees as follows:
SECTION 1. GRANT OF OPTION
1.1 Subject to the terms and conditions hereinafter set forth, the
Board hereby grants to the Grantee the right and option (the "Option") under the
Plan to purchase _______ shares (the "Shares") of Common Stock of the Company,
at a per Share purchase price of
- ------.
1.2 The Option is intended not to qualify as an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
SECTION 2. EXERCISABILITY
2.1 The Option shall become cumulatively exercisable as follows:
<insert schedule> Each scheduled increase in the exercisable portion of the
Option shall occur only if the Grantee is then a director of the Company or any
of its subsidiaries.
2.2 Any number of Shares which the Grantee is entitled to purchase
during any period, as set forth in Section 2.1, but which are not then purchased
by the Grantee, may be purchased at any time thereafter prior to the termination
of the Option pursuant to Section 3.
SECTION 3. TERMINATION
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3.1 The unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the earliest to
occur of the following:
(a) 11:59 p.m. on the day preceding the tenth anniversary
of the Option Date;
(b) The expiration of three months (twelve months in the case
of an employee who is disabled within the meaning of Section 22(e)(3) of the
Code) from the date of termination of the Grantee's service as a director to the
Company or any of its subsidiaries (other than a termination described in clause
(c) or (d) below); provided, that if the Grantee shall die during three months
from the date of termination of the Grantee's service (regardless of
disability), the provisions of clause (c) below shall apply;
(c) The expiration of twelve months from the date of the
Grantee's death, if such death occurs either during his service as a director to
the Company or any of its subsidiaries or during the three-month period
following the date of termination of such service (other than a termination
described in clause (d) below);
(d) The termination of the Grantee's service as a director of
the Company or any of its subsidiaries if such termination is by reason of
dismissal for cause.
SECTION 4. METHOD OF EXERCISE
4.1 The Option or any part thereof may be exercised only by the giving
of written notice to the Company, on such form and in such manner as the Board
shall prescribe, which notice shall state the election to exercise the Option
and the number of whole Shares of Common Stock with respect to which the Option
is being exercised. Such notice must be accompanied by payment for the Shares
purchased, which payment shall be made: (a) by certified or official bank check
for the full option exercise price payable to the Company (or the equivalent
thereof acceptable to the Company); or (b) by delivery of shares of Common Stock
having a fair market value (determined as of the date of exercise) equal to all
or part of the purchase price and, if applicable, a certified or official bank
check (or the equivalent thereof acceptable to the Company) for any remaining
portion of the full option exercise price; or (c) at the discretion of the Board
and to the extent permitted by law, by such other provision for payment,
consistent with the terms of the Plan, as the Board may from time to time
prescribe.
4.2 The date of exercise of the Option shall be the date on which
written notice of the exercise is hand delivered to the Company, as the Board
shall prescribe, or if mailed, the date on which it is postmarked.
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4.3 The Company shall have the right to require as a condition of
exercise of the Option by the Grantee that the Grantee remit to the Company an
amount sufficient in the opinion of the Company to satisfy all federal, state
and other governmental tax withholding requirements related to such exercise. In
the alternative, the Board may, under such rules as it may adopt, allow the
Grantee to elect to have the Company hold back Shares having a fair market value
sufficient in the opinion of the Company to enable the Company to satisfy such
withholding requirements.
4.4 Subject to Section 5, the Company shall cause to be issued to the
Grantee (or to such other person as the Grantee may designate or to such other
person as may then have the right to exercise the Option) a certificate or
certificates representing the Shares purchased by exercise of the Option. Such
certificates(s) shall be dated as of the exercise date, and shall be delivered
as soon as practicable after the Company receives the full option exercise
price.
SECTION 5. RESTRICTIONS
5.1 Notwithstanding any other provision of this Agreement, if the Board
shall at any time determine that any Consent (as hereinafter defined) is
necessary or desirable as a condition of, or in connection with, the issuance or
transfer of Shares or the taking of any other action in connection with this
Agreement or the Plan, then such action shall not be taken, in whole or in part,
unless and until such Consent shall have been effected or obtained to the full
satisfaction of the Board.
5.2 For purposed of Section 5.1, the term "Consent" means (a) any and
all listings, registrations, or qualifications in respect thereof upon any
securities exchange or under any federal, state or local law, rule or
regulation, (b) any and all written agreements and representations by the
Grantee with respect to the disposition of the Shares, or with respect to any
other matter, which the Board shall deem necessary or desirable to comply with
the terms of any such listing, registration or qualification or to obtain an
exemption from the requirement that any such listing, qualification or
registration be made, and (c) any and all consents, clearances and approvals by
any governmental or other regulatory bodies in respect of any action taken or to
be taken under the Plan or this Agreement.
SECTION 6. NONASSIGNABILITY
6.1 No right granted to the Grantee under the Plan or this Agreement
shall be assignable or transferable (whether by operation of law or otherwise
and whether voluntarily or involuntarily) other than by will or by the laws of
descent and distribution. During the life of the Grantee, all rights granted to
the Grantee under the Plan or under this Agreement shall be exercisable only by
the Grantee or his legal representative.
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6.2 In the event of the Grantee's death during his service as a
director to the Company or any of its subsidiaries, or during the three-month
period following the termination of such service except a termination described
in Section 3.1 (d), the Option shall thereafter be exercisable for a period of
twelve months from the date of Grantee's death by his executor or administrator
or by the person or persons to whom his rights under the Option shall have
passed by will, but only to the extent that the Option was exercisable by the
Grantee at his death (subject to acceleration by the Board pursuant to Section
13.2). If the Grantee's executor or administrator or the recipient of a specific
disposition under the Grantee's will shall be entitled to exercise the Option
pursuant to the preceding sentence, such person shall be bound by all the terms
and conditions of the Plan and this Agreement which would have applied to the
Grantee's exercise of the Option (if he had lived) including, without
limitation, the provisions of Section 5.
SECTION 7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any increase or decrease, after the date of this
Agreement, in the number of issued shares of Common Stock resulting from the
subdivision or combination of shares of Common Stock or other capital
adjustment, or the payment of a stock dividend, or other increase or decrease in
such shares effected without receipt of consideration by the Company, the Board
shall proportionately adjust the number of Shares subject to the Option, the
purchase price set forth in Section 1.1, and any and all other matters deemed
appropriate by the Board, provided, however, that any option to purchase
fractional shares resulting from an such adjustment shall be eliminated.
SECTION 8. RIGHT OF DISCHARGE RESERVED
Nothing in the Plan or in this Agreement shall confer upon the Grantee
the right to continue as a director of the Company or any of its subsidiaries or
affect any right which the Company or any of its subsidiaries may have to
terminate such employment.
SECTION 9. NO RIGHTS AS A STOCKHOLDER
Neither the Grantee nor any person succeeding to the Grantee's rights
hereunder shall have any rights as a stockholder with respect to any Shares
subject to the Option until the Option shall have been exercised. Except for
adjustments made pursuant to Section 7, no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities or other property) for which the record date is
prior to the date of such exercise.
SECTION 10. NATURE OF PAYMENTS
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10.1 The grant of the Option and any and all issuances of Shares
thereunder shall be in consideration of services performed by the Grantee for
the Company or for its subsidiaries.
10.2 The grant of the Option and any and all issuances of Shares
thereunder shall constitute a special incentive payment to the Grantee. Such
issuances shall not, unless otherwise determined by the Board, be taken into
account in computing the amount of salary or compensation of the Grantee for the
purpose of determining any pension, retirement, death or other benefits under
(i) any pension, retirement, profit-sharing, bonus, or life insurance
arrangement or (ii) any agreement between the Company or any subsidiary, on the
one hand, and the Grantee, on the other hand.
SECTION 11. BOARD DETERMINATIONS
The Board's determinations under the Plan and this Agreement need not
be uniform and may be made by it selectively among persons who receive awards
under the Plan (whether or not such persons are similarly situated). All
decisions, interpretations and determinations by the Board with regard to any
question or matter arising hereunder or under the Plan shall be conclusive and
binding upon the Company and the Grantee.
SECTION 12. DEFINTION OF COMMON STOCK
The term "Common Stock" as used in this Agreement means the shares of
Common Stock of the Company as constituted on the date of this Agreement and any
other shares into which such Common Stock shall thereafter be changed by reason
of recapitalization, merger, consolidation, split-up, combination, exchange of
shares or the like.
SECTION 13. PLAN PROVISIONS TO PREVAIL; AMENDMENT
13.1 This Agreement shall be subject to all of the terms and provisions
of the Plan. In the event that there is any inconsistency between the provisions
of this Agreement and the Plan, the provisions of the Plan shall govern.
13.2 With the consent of the Grantee (or such other person as may have
the right to exercise the Option upon the Grantee's death), and subject to the
terms and provisions of the Plan, the Board may amend this Agreement, including,
without limitation, amendments that accelerate the schedule of exercisabililty
set forth in Section 2.2 or extend the termination date set forth in Section
3.1; provided, that no such amendment may permit the option to be exercised
after the expiration of the 10-year period beginning on the Option Date.
SECTION 14. SECTION HEADINGS
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14.1 The Section headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of the
Sections.
14.2 Any notice to be given to the Company or the Board hereunder shall
be in writing and shall be addressed to the Company or the Board at 485-C Route
One South, Iselin, New Jersey 08830, or at such other address as the Company may
hereafter designate to the Grantee by notice as provided herein.
14.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and successors and assigns of the Company and, to the extent
set forth in Section 6, the heirs and personal representatives of the Grantee.
14.4 This Agreement shall be interpreted, construed and administered in
accordance with the laws of the State of New Jersey as they apply to contracts
made, delivered and performed in the State of New Jersey.
14.5 Nothing contained in this Agreement shall be deemed in any way to
limit or restrict the Company or any subsidiary from making any award or payment
to the Grantee under any other plan, arrangement or understanding, whether now
existing or hereafter in effect.
IN WITNESS WHEREOF, the Company has executed this Agreement as of the
day and year first above written.
CAREADVANTAGE, INC.
By: _________________________________
c77553c.647
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