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:
| | Preliminary Information Statement |_| Confidential, for
Use of the
Commission Only (as
permitted
by Rule
14c-5(d)(2))
|X| 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
2
<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.
3
<PAGE>
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.
4
<PAGE>
(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
5
<PAGE>
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.
6
<PAGE>
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.
7
<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.
8
<PAGE>
(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
9
<PAGE>
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
10
<PAGE>
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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<PAGE>
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.
13
<PAGE>
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
14
<PAGE>
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
15
<PAGE>
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.
16
<PAGE>
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
17
<PAGE>
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
18
<PAGE>
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
19
<PAGE>
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
20
<PAGE>
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
21
<PAGE>
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.
22
<PAGE>
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
23
<PAGE>
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.
24
<PAGE>
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
<PAGE>
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
<PAGE>
IN WITNESS WHEREOF, the Company has executed this
Agreement as of the
day and year first above written.
CAREADVANTAGE, INC.
By: _________________________________
28
<PAGE>
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:
29
<PAGE>
(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.
30
<PAGE>
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
<PAGE>
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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<PAGE>
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.
36
<PAGE>
(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.
37
<PAGE>
(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.
38
<PAGE>
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.
39
<PAGE>
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
40
<PAGE>
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.
41
<PAGE>
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.
42
<PAGE>
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
43
<PAGE>
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
44
<PAGE>
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
45
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