As filed with the Securities and Exchange Commission on February 15, 2017

Registration No. 333-205826

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-8

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

 

UNITEDHEALTH GROUP INCORPORATED

(Exact name of registrant as specified in its charter)

 

Delaware   41-1321939

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

UnitedHealth Group Center

9900 Bren Road East

Minnetonka, Minnesota

  55343
(Address of principal executive offices)   (Zip Code)

UNITEDHEALTH GROUP INCORPORATED 2011 STOCK INCENTIVE PLAN

(AS AMENDED AND RESTATED IN 2015)

AUDAX HEALTH SOLUTIONS, INC. 2010 EQUITY INCENTIVE PLAN, AS AMENDED

RALLY HEALTH, INC. 2014 EQUITY INCENTIVE PLAN

(Full title of the plans)

Marianne D. Short

Executive Vice President and Chief Legal Officer

UnitedHealth Group Center

9900 Bren Road East

Minnetonka, Minnesota 55343

(Name and address of agent for service)

(952) 936-1300

(Telephone number, including area code, of agent for service)

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ☒       Accelerated filer    ☐     Non-accelerated filer      ☐   Smaller reporting company   ☐
        

(Do not check if a smaller reporting company)

     

 

II-1

CALCULATION OF REGISTRATION FEE

 

 

Title of securities to be registered (1)

 

 

Amount to be

registered (2)

 

 

Proposed

maximum

offering

price per share (3)

 

 

Proposed
maximum
aggregate

offering price (3)

 

 

Amount of
registration

fee (3)

 

Common Stock, $0.01 par value per share

 

 

70,000,000

 

 

N/A

 

 

N/A

 

 

N/A

 

 

 

(1) Represents the aggregate number of shares of common stock, $0.01 par value per share, of UnitedHealth Group Incorporated (“UnitedHealth Group” or the “Registrant”) that (i) may be offered or issued under the UnitedHealth Group Incorporated 2011 Stock Incentive Plan, as amended and restated in 2015 (the “2011 Plan”), or (ii) are issuable upon the exercise of outstanding stock options under the Audax Health Solutions, Inc. 2010 Equity Incentive Plan, as amended (the Audax Plan”), or the Rally Health, Inc. 2014 Equity Incentive Plan (the “Rally Plan”), which stock options were assumed by the Registrant pursuant to the Agreement and Plan of Merger, dated February 14, 2017, by and among Rally Health, Inc., RH Merger Sub, Inc., Optum Digital Health Holdings, LLC and, for the limited purposes set forth therein, certain other stockholders of Rally Health, as follows: 65,196,639 shares under the 2011 Plan, 3,202,085 shares under the Audax Plan, and 1,601,276 shares under the Rally Plan.

 

(2) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement also covers additional securities that may be offered as a result of stock splits, stock dividends or similar transactions.

 

(3) The shares of UnitedHealth Group common stock that are the subject of this Post-Effective Amendment No. 1 were previously registered under the Registrant’s Registration Statement on Form S-8 (File No. 333-205826) filed under the Securities Act with the Securities and Exchange Commission on July 23, 2015. All filing fees payable in connection with the issuance of these shares of UnitedHealth Group common stock were previously paid in connection with the filing of the original Registration Statement on Form S-8.

 

 

 

 

 

 

 

 

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EXPLANATORY NOTE

UnitedHealth Group Incorporated (“UnitedHealth Group” or the “Registrant”) hereby amends its Registration Statement on Form S-8 (File No. 333-205826), filed on July 23, 2015 (the “Registration Statement”), by filing this Post-Effective Amendment No. 1 on Form S-8 (this “Amendment”) relating to UnitedHealth Group common shares that may be offered or issued under the UnitedHealth Group Incorporated 2011 Stock Incentive Plan, as amended and restated in 2015 (the “2011 Plan”) or that may be issued upon the exercise of stock options granted pursuant to terms of the Audax Health Solutions, Inc. 2010 Equity Incentive Plan, as amended (the “Audax Plan”) and the Rally Health, Inc. 2014 Equity Incentive Plan (together with the Audax Plan, the “Assumed Plans”).

Pursuant to the Agreement and Plan of Merger, dated February 14, 2017 (the “Transaction Agreement”), by and among Rally Health, Inc. (“Rally Health”), RH Merger Sub, Inc. (“Merger Sub”), Optum Digital Health Holdings, LLC, and, for the limited purposes set forth therein, certain other stockholders of Rally Health, Merger Sub merged with and into Rally Health on February 14, 2017 (the “Effective Time”), with Rally Health as the surviving corporation of such merger. As a result of the merger, Rally Health became an indirect wholly owned subsidiary of the Registrant. In accordance with the Transaction Agreement, at the Effective Time, the Registrant assumed and became the sponsor of the Assumed Plans and assumed all stock options that were awarded under the Assumed Plans that were outstanding immediately prior to the Effective Time, and such assumed stock options were converted into stock options to acquire UnitedHealth Group common shares in accordance with the Transaction Agreement.

Under the Registration Statement, the Registrant previously registered 70,000,000 shares of its common stock, $0.01 par value per share, to be offered or sold under the 2011 Plan. The Registrant is filing this Amendment to include in the previously registered amount any UnitedHealth Group common stock that may be issued under the Assumed Plans.

PART II.

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

Except to the extent furnished and not filed with the Securities and Exchange Commission (the “SEC”) pursuant to Item 2.02 or Item 7.01 of Form 8-K, or as otherwise permitted by SEC rules, the following documents previously filed by the Registrant with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are hereby incorporated by reference into this Registration Statement:

 

  (a) Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 8, 2017;

 

  (b) Current Report on Form 8-K filed on January 17, 2017;

 

  (c) The portions of the Registrant’s Proxy Statement on Schedule 14A filed with the SEC on April 22, 2016, to the extent specifically incorporated by reference into Part III of Parent’s Annual Report on Form 10-K for the year ended December 31, 2015; and

 

  (d) The description of the Registrant’s Common Stock contained in the Registrant’s Registration Statement on Form 8-A/A, filed with the SEC on July 1, 2015 (File No. 001-10864), and any other amendment or report filed for the purpose of updating such description.

All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents; provided, however, that documents or information deemed to have been furnished and not filed in accordance with SEC rules shall not be deemed incorporated by reference in this Registration Statement. Any statement contained herein or in a document incorporated by reference in this Registration Statement shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or amended, to constitute a part of this Registration Statement.

 

II-3

Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

Not applicable.

Item 6. Indemnification of Directors and Officers.

Delaware General Corporation Law. The Registrant is incorporated under the laws of Delaware. Section 145(a) of the Delaware General Corporation Law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

Section 145(b) of the Delaware General Corporation Law states that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the Delaware Court of Chancery or such other court shall deem proper.

Section 145(c) of the Delaware General Corporation Law provides that, to the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

Section 145(d) of the Delaware General Corporation Law states that any indemnification under subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of Section 145. Such determination shall be made with respect to a person who is a director or officer at the time of such determination (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (4) by the shareholders.

 

II-4

Section 145(f) of the Delaware General Corporation Law states that the indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of Section 145 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office.

Section 145(g) of the Delaware General Corporation Law provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of Section 145.

Section 145(j) of the Delaware General Corporation Law states that the indemnification and advancement of expenses provided by, or granted pursuant to, Section 145 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Certificate of Incorporation . The Registrant’s Certificate of Incorporation provides that, to the fullest extent permissible under the Delaware General Corporation Law, the Registrant’s directors shall not be personally liable to the Registrant or its shareholders for monetary damages for breach of fiduciary duty as a director, except that a director shall be liable to the extent provided by applicable law (1) for breach of the director’s duty of loyalty to the Registrant or its shareholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) pursuant to Section 174 of the Delaware General Corporation Law regarding the unlawful payment of dividends or stock redemptions or repurchases or (4) for any transaction from which the director derived an improper personal benefit.

Bylaws . The Registrant’s Bylaws provide that the Registrant shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, because he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Registrant or, while a director or officer of the Registrant, is or was serving at the request of the Registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such person.

The Registrant’s Bylaws provide that the Registrant shall advance to indemnified persons expenses incurred in defending any such proceedings, subject to an obligation to repay amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnified person is not entitled to be indemnified for such expenses under the Registrant’s Bylaws or otherwise.

Indemnification Agreements . The Registrant has entered into an indemnification agreement with each of its directors and executive officers, which provides, among other things, that the Registrant will indemnify each such person to the fullest extent permitted by law, subject to certain conditions, against all expenses and certain other amounts actually and reasonably incurred by such person in connection with proceedings in which such person is involved, or is threatened to become involved, because such person is or was a director or officer of the Registrant, by reason of any action or inaction on the part of such person, or by reason of the fact that such person is or was serving at the request of the Registrant as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other enterprise. The indemnification agreement also requires the Registrant, under certain circumstances, to advance expenses incurred by such person in connection with the investigation, defense, settlement or appeal of any such proceedings.

 

II-5

Other Insurance . The Registrant maintains directors’ and officers’ liability insurance which covers certain liabilities and expenses of the Registrant’s directors and officers and covers the Registrant for reimbursement of payments to the Registrant’s directors and officers in respect of such liabilities and expenses.

* * * * *

The above discussion of the Registrant’s Certificate of Incorporation, Bylaws, indemnification agreements and insurance arrangements, as well as the Delaware General Corporation Law, is not intended to be exhaustive and is qualified in its entirety by reference to such Certificate of Incorporation, Bylaws, indemnification agreements, insurance arrangements and statutes.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

See the exhibits listed under the Exhibit Index below which are hereby incorporated by reference.

Item 9. Undertakings.

(a)    The undersigned registrant hereby undertakes:

(1)   To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i)   To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii)    To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

provided, however , that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.

(2)   That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

II-6

(b)   The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)   Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minnetonka, State of Minnesota, on February 15, 2017.

 

  UNITEDHEALTH GROUP INCORPORATED
  By:  /s/ Stephen J. Hemsley                                      
         Stephen J. Hemsley
         Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment has been signed by the following persons in the capacities indicated on February 15, 2017.

 

Signature    Title

 

  

 

/s/ Stephen J. Hemsley

   Director and Chief Executive Officer
(principal executive officer)
Stephen J. Hemsley   

/s/ John Rex

   Executive Vice President and Chief Financial Officer
(principal financial officer)
John Rex   

/s/ Tom Roos

   Senior Vice President and Chief Accounting Officer
(principal accounting officer)
Tom Roos   

*

   Director
William C. Ballard, Jr.   

*

   Director
Richard T. Burke   

*

   Director
Robert J. Darretta   

 

   Director
Timothy P. Flynn   

*

   Director
Michele J. Hooper   

*

   Director
Rodger A. Lawson   

*

   Director
Glenn M. Renwick   

*

   Director
Kenneth I. Shine, M.D.   

*

   Director
Gail R. Wilensky, Ph.D.   

 

* The undersigned, by signing her name hereto, does hereby execute this Registration Statement on behalf of the directors of UnitedHealth Group Incorporated listed above pursuant to the Power of Attorney incorporated by reference herein as Exhibit 24.1.

By:  

 /s/ Dannette L. Smith

 
  Dannette L. Smith  
  As Attorney-in-Fact  

EXHIBIT INDEX

 

 Number 

 

 Description

4.1

 

Certificate of Incorporation of UnitedHealth Group Incorporated, as filed with the Secretary of State of the State of Delaware on July 1, 2015 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-A/A filed on July 1, 2015).

4.2

 

Bylaws of UnitedHealth Group Incorporated, effective February 9, 2016 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on February 12, 2016).

4.3

 

UnitedHealth Group Incorporated 2011 Stock Incentive Plan, as amended and restated in 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 5, 2015).

4.4*

 

Audax Health Solutions, Inc. 2010 Equity Incentive Plan, as amended.

4.5*

 

Rally Health, Inc. 2014 Equity Incentive Plan.

5.1*

 

Opinion of Hogan Lovells US LLP.

23.1*

 

Consent of Hogan Lovells US LLP (included in Exhibit 5.1).

23.2*

 

Consent of Deloitte & Touche LLP.

24.1**

 

Power of Attorney.

 

* Filed herewith.

 

** Previously filed.

Exhibit 4.4

AUDAX HEALTH SOLUTIONS, INC.

2010 Equity Incentive Plan, as amended as of October 2, 2013

This 2010 Equity Incentive Plan (the “ Plan ”) is intended to encourage ownership of Common Stock, par value $.001 per share (the “ Stock ”), of Audax Health Solutions, Inc., a Delaware corporation (the “ Company ”), by its directors, officers, employees and consultants through the grant of Incentive Stock Options and Nonstatutory Stock Options (collectively, “ Options ”) and Restricted Stock (as such terms are defined below) in order to attract, motivate and retain outstanding individuals for such positions, to align their interests with those of the Company’s shareholders, and to provide them with appropriate compensation and additional incentives to promote the success of the Company.

1.          Administration of the Plan .   The administration of the Plan shall be under the general supervision of the Board of Directors of the Company (the “ Board ”), which shall, within the limits of the Plan, determine the persons (“ Participants ”) to whom and the times at which Options or Restricted Stock shall be granted. The Board may establish such rules as it deems necessary for the proper administration of the Plan, make such determinations and interpretations with respect to the Plan and Options and Restricted Stock granted under it as may be necessary or desirable and include such further provisions or conditions with respect to which Options and Restricted Stock may be granted under the Plan as it deems advisable. To the extent permitted by law, the Board may delegate its authority under the Plan to a committee of the Board (a “ Committee ”). References to the Board herein shall include a Committee as applicable.

2.          Shares Subject to the Plan .

(a)         Number and Type of Shares .   Subject to the provisions of Section 2(b) and (c), the aggregate number of shares of Stock of the Company that may be issued pursuant to Options or Restricted Stock granted under the Plan is 42,520,790 shares of Common Stock. In addition, shares issued hereunder may consist in whole or in part of authorized but unissued shares or treasury shares.

(b)         Adjustments; Assumption of Options .   In the event (i) of any stock dividend, split-up or combination of shares effected proportionately with respect to all outstanding shares of Stock, or (ii) the Board determines that any other recapitalization or any extraordinary cash dividend, reorganization, merger, consolidation, spin-off, exchange of shares or other similar capital change affects the Stock such that adjustment is required in order to preserve the benefits or potential benefits of the Plan or any Option granted under the Plan, the Board (whose determination shall be conclusive) shall appropriately adjust (A) the number and kind of shares or securities of the Company that may be issued under the Plan, (B) the number and kind of shares subject to outstanding Options, and (C) the exercise price or the repurchase price of Restricted Stock, so that the proportionate number of shares or other securities as to which Options or Restricted Stock may be granted and the proportionate interest of holders of outstanding Options shall be maintained as before the occurrence of such event. In the event of any reorganization, merger, consolidation, spin-off or exchange of shares, the Board in its discretion may cause any Option to be cancelled, assumed by another entity party to the transaction, or new rights substituted therefor, by another entity party to the transaction.

(c)         Restoration of Shares .   Shares subject to an Option that expires, is terminated unexercised, is forfeited for any reason, or is settled in a manner that results in fewer shares outstanding than were initially awarded, shares surrendered in payment of the option price or any tax obligation with respect to an Option or Restricted Stock, and shares of Restricted Stock that are repurchased by, or forfeited to, the Company shall again be available for granting Options or Restricted Stock under the Plan to the extent of such expiration, termination, forfeiture, repurchase or decrease subject, however, in the case of Incentive Stock Options, to any requirements under the Internal Revenue Code of 1986, as amended (the “ Code ”).

 

  1    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

3.          Options .

(a)         Types of Options .   Options shall be granted under the Plan either as incentive stock options (“ Incentive Stock Options ”), as defined in Section 422 of the Code, or as Options that do not meet the requirements of Section 422 (“ Nonstatutory Stock Options ”). Options may be granted from time to time by the Board to all employees of the Company or of any parent or subsidiary company of the Company (as defined in Sections 424(e) and (f), respectively, of the Code), and Nonstatutory Stock Options may also be granted to all non-employee directors and consultants of the Company or any such other company.

(b)         Date of Grant .   The date of grant for each Option shall be the date on which it is approved by the Board, or such later date as the Board may specify. No Incentive Stock Options shall be granted hereunder after ten years from the last date on which the Plan was approved for purposes of § 422 of the Code.

(c)         Option Price .   The price at which shares may from time to time be purchased (the “ option price ”) under each Option shall be determined by the Board, provided that such price shall not be less than the fair market value of the Stock on the date of grant as determined in good faith by the Board after taking into consideration all factors which it deems appropriate and in accordance with applicable statutory and regulatory guidelines (“ Fair Market Value ”); and provided further that no Option granted to any individual who is ineligible to be granted an Incentive Stock Option because his ownership of stock of the Company or its parent or subsidiary companies exceeds the limitations set forth in Section 422(b)(6) of the Code shall be an Incentive Stock Option unless the option price thereof is at least 110% of the Fair Market Value of the Stock on the date of grant.

(d)         Payment .   No shares of Stock shall be delivered upon exercise of an Option until the Company receives full Payment for the exercise price therefore. Payment of the exercise price may be in cash or, to the extent permitted by the Board at or after the grant of the Option, pursuant to any of the following methods: (i) by delivery of a promissory note, (ii) by actual delivery or attestation of ownership of Shares of Common Stock owned by the Participant, or (iii) for such other lawful consideration as the Board may determine.

(e)         Term of Option; Exercisability .    The Board shall determine the term of all Options, the time or times that Options become exercisable and whether they become exercisable in installments; provided, however, that the term of each Incentive Stock Option shall not exceed a period of ten years from the date of its grant, and provided further that no Option granted to any individual who is ineligible to be granted such Option because his ownership of stock of the Company or its parent or subsidiary companies exceeds the limitations set forth in Section 422(b)(6) of the Code shall be an Incentive Stock Option unless the term thereof does not exceed a period of five years from the date of its grant.

(f)         Effect of Disability, Death or Termination of Employment .    The Board shall determine the effect on an Option of the disability, death, retirement or other termination of employment of a Participant and the extent to which, and the period during which, the Participant’s estate, legal representative, guardian, or beneficiary on death may exercise rights thereunder. Any beneficiary on death shall be designated by the Participant, in the manner determined by the Board, to exercise rights of the Participant in the case of the Participant’s death.

 

  2    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

(g)        Form of Options .  Options granted hereunder shall be evidenced by an instrument delivered to the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Board considers necessary or advisable to achieve the purposes of the Plan or comply with applicable tax and regulatory laws and accounting principles. The form of Options may vary among Participants; provided that, in the absence of a specific determination in any particular case, the forms of Incentive and Nonstatutory Stock Option shall be as set forth in Exhibits A and B hereto, respectively.

(h)        Amendment or Termination of Options .  The Board may amend, modify, or terminate any outstanding Option, including substituting therefor another Option of the same or a different type, changing the date of exercise or realization and converting an Incentive Stock Option to a Nonstatutory Stock Option. Other than in connection with a Company reorganization, merger, consolidation, spin-off or exchange of shares, any such action shall require the Participant’s consent unless:

(i)        in the case of a termination of, or a reduction in the number of shares issuable under, an Option, any time period relating to the exercise of such Option or the eliminated portion, as the case may be, is waived or accelerated before such termination or reduction (and in such case the Board may provide for the Participant to receive cash or other property equal to the net value that would have been received upon exercise of the terminated Option or the eliminated portion, as the case may be); or

(ii)       in any other case, the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant.

(i)         Non-transferability of Options .  An Option (i) shall not be transferable other than as designated by the Participant, by will or by the laws of descent and distribution, and (ii) may be exercised, during the Participant’s lifetime, only by the Participant or the Participant’s guardian or legal representative. The Board may waive this restriction in any particular case, provided that Incentive Stock Options may be transferable only to the extent permitted by the Code.

(j)         No Rights as a Shareholder .   No Participant or any person claiming through a Participant shall have any rights as a shareholder with respect to any shares of Stock to be distributed under the Plan until he or she becomes the holder of such Stock thereof. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to such date, except as otherwise provided in this Plan.

4.           Restricted Stock .

(a)         Terms . The Board may issue shares of Stock to Participants subject to forfeiture or to the Company’s right to repurchase such shares (“ Restricted Stock ”). Shares of Restricted Stock may be issued without cash consideration or for such consideration as may be determined by the Board. The Board shall determine the duration of the period of time (the “ Restricted Period ”) during which, the price (if any) at which, and the other conditions under which, the shares may be forfeited or repurchased by the Company and other terms and conditions of such grants.

(b)         Restrictions . Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Board, during the Restricted Period. Any certificates issued in respect of shares of Restricted Stock shall be registered in the name of the Participant, shall contain such legend as the Board may require with respect to the restrictions on transfer and, if required by the Board, shall be deposited by the Participant, together with a stock power endorsed

 

   3    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

in blank, with the Company. At the expiration of the Restricted Period with respect to any of such shares, the Company shall deliver a certificate with respect to such shares, without a legend referring to the Plan’s restrictions on transfer, to the Participant or, if the Participant has died, to the Participant’s designated beneficiary or legal representative.

(c)         Restricted Stock Purchase Agreement .   Each recipient of Restricted Stock shall enter into a Restricted Stock Purchase Agreement with the Company that shall specify the terms and conditions of such grant of Restricted Stock and shall contain such other terms and conditions not inconsistent with the provisions of this Plan as the Board considers necessary or advisable to achieve the purposes of the Plan or comply with applicable tax and regulatory laws and accounting principles. The form of such Restricted Stock Purchase Agreement may vary among Participants. The Restricted Stock Purchase Agreement may be amended by the Board in any respect, provided that the consent of the Participant shall be required for any amendment, other than an amendment made in order to conform the Restricted Stock Purchase Agreement or the Plan to restrictions imposed by securities or tax laws or regulations, that would materially and adversely affect the Participant.

5.           No Right to Employment or Other Relationship .  No person shall have any claim or right to be granted an Option or Restricted Stock, and any grant of an Option or Restricted Stock shall not be construed as giving the Participant the right to continued employment or any other relationship with the Company, The Company expressly reserves the right at any time to and any relationship it may have with a Participant free from any liability or claim under the Plan except as specifically provided in the applicable Option or Restricted Stock Purchase Agreement.

6.           Documentation: Shareholder Agreement; Other Conditions .   Each Option and share of Restricted Stock issued under this Plan shall be evidenced by a writing delivered to the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the Plan as the Board considers necessary and advisable. The Board may at the time of grant of an Option or share of Restricted Stock or at any time thereafter, require as a condition for exercise of an Option or termination of a Restricted Period that each Participant execute a Shareholder Agreement containing such provisions relating to voting, restrictions on transferability, first refusal rights and otherwise as the Board may deem necessary or desirable and may at any time impose such additional conditions with respect to the issuance and/or delivery of stock under the Plan as it considers necessary or advisable to comply with the requirements of securities, tax or other laws or regulations, including without limitation restricting the transfer of such shares and requiring appropriate representations and agreements from the Participant, and the Company shall be entitled to postpone such issuance or delivery until such conditions have been met.

7.           Withholding .   The Participant shall pay to the Company, or make provision satisfactory to the Board for payment of, any taxes required by law to be withheld in respect of any Option or Restricted Stock no later than the date of the event creating the tax liability. In the Board’s discretion, such tax obligations may be paid in whole or in part in shares of Stock, including shares retained from the exercise of the Option or from the grant of Restricted Stock creating the tax obligation, valued at the Fair Market Value of the Stock on the date of delivery to the Company. The Company and any of its affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Participant.

8.           Amendment or Termination .   The Board may amend or terminate the Plan, and any Option or Restrictive Stock award issued thereunder, at any time, subject to such approval of the shareholders as the Board shall deem necessary or advisable.

 

  4    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

9.           Change of Control .  All Options or Restricted Stock issued under the Plan that are subject to vesting shall automatically without any further action by the Board vest in their entirety immediately prior to any merger, recapitalization or other corporate transaction involving the Company, including without limitation any sale of all or substantially all of the assets or capital stock of the Company.

10.         Shareholder Approval .   The Plan shall be presented for approval by the shareholders of the Company within twelve (12) months from the date the Plan was adopted by the Board. In the event such approval is not obtained, all Incentive Stock Options granted under the Plan shall be deemed to be Nonstatutory Stock Options and no further Incentive Stock Options may be granted, but the provisions of the Plan regarding other Options and Restricted Stock shall remain in effect.

11.         Governing Law .   The provisions of the Plan and all Options made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, without regard to any applicable conflict of law principles.

12.         Effective Date and Term of Plan .  The Plan shall become effective on the date on which it is adopted by the Board. No Options shall be granted under the Plan after the completion of ten years from the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved or reapproved by the Company’s stockholders, but Options or Restricted Stock previously granted may extend beyond that date.

13.         Lock-up Agreement .   The Company may, in its discretion, require in connection with an initial public offering that a Participant agree that any Stock not be sold, offered for sale, or otherwise disposed of for a period of time as determined by the Board.

*****************

Adopted by the Board of Directors on May 10, 2010 and approved by the shareholders as of May 10, 2010.

 

  5    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

Exhibit A — Form of Incentive Stock Option

 

2010 ISO-                                  Shares

Audax Health Solutions, Inc.

2010 Equity Incentive Plan

Incentive Stock Option Certificate

Audax Health Solutions, Inc., a Delaware corporation (the “ Company ”), hereby grants to the person named below (the “ Participant ”) an option to purchase shares of common stock, par value $.001 per share, of the Company (the “ Option ”) under and subject to the Company’s 2010 Equity Incentive Plan (the “ Plan ”) exercisable on the following terms and conditions and those set forth on the reverse side of this certificate:

 

Name of Optionee:  

 

Address:  

 

 

 

 

 

 

 

Social Security No.:  

 

Number of Shares:  

 

Option Price:  
Date of Grant:  

 

Exercisability Schedule:  

After [                                          ] (being the 1 year anniversary of the grant date), as to [                                          ] shares (being 25% of the shares),

After [                                          ] (being the 2 year anniversary of the grant date), as to an additional [                                          ] shares (being 50% of the shares),

After [                                          ] (being the 3 year anniversary of the grant date), as to an additional [                                          ] shares (being 75% of the shares), and

After [                                          ] (being the 4 year anniversary of the grant date), as to an additional [                                          ] shares (being all of the shares).

 

Expiration Date:

 

 

This Option is intended to be treated as an Incentive Stock Option under section 422 of the Internal Revenue Code of 1986, as amended (the “ Code ”).

 

  1    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

By acceptance of this Option, the Optionee agrees to the terms and conditions set forth in this Agreement and in the Plan.

 

OPTIONEE

   

AUDAX HEALTH SOLUTIONS, INC.

   

By: 

   
   

Title:

 

 

  2    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

Incentive Stock Option Terms And Conditions

1.         Plan Incorporated by Reference .  This Option is issued pursuant to the terms of the Plan and may be amended as provided in the Plan. Capitalized terms used and not otherwise defined in this certificate have the meanings given to them in the Plan. This certificate does not set forth all of the terms and conditions of the Plan, which are incorporated herein by reference. The Board of Directors or a Committee thereof (the “ Administrator ”) administers the Plan and its determinations regarding the interpretation and operation of the Plan are final and binding. Copies of the Plan may be obtained upon request without charge from the Company.

2.         Option Price .  The price to be paid for each share of Stock issued upon exercise of the whole or any part of this Option is the Option Price set forth on the face of this certificate.

3.         Exercisability Schedule .  This Option may be exercised at any time and from time to time for the number of shares and in accordance with the exercisability schedule set forth on the face of this certificate, but only for the purchase of whole shares. This Option may not be exercised as to any shares after the Expiration Date.

4.         Method of Exercise .   To exercise this Option, the Optionee shall deliver (a) written notice of exercise in the form attached as Exhibit C hereto, to the Company specifying the number of shares with respect to which the Option is being exercised, and (b) payment of the Option Price for such shares in cash, by certified check or in such other form, including shares of Company Stock of the Company valued at their Fair Market Value on the date of delivery, as the Administrator may approve in its discretion. In connection with any purchase of shares pursuant to an exercise of this Option, the Optionee shall execute joinder signature pages in a form acceptable to the Company and shall become a party to such voting agreement and shareholders agreement, investor rights agreement or other similar agreement that all or substantially all holders of Company common stock are a party and as the Company shall reasonably determine,

5.         Rights as a Shareholder or Employee .  The Optionee shall not earn the right to exercise or obtain the value of any portion of this Option except as provided in the exercisability schedule and until such time as all the conditions set forth herein and in the Plan that are required to be met in order to exercise this Option have been fully satisfied. No portion of this Option shall be deemed compensation for past services before it has become exercisable in accordance with the exercisability schedule. The Optionee shall not have any rights in respect of shares as to which the Option shall not have been exercised and payment made as provided above. The Optionee shall not have any rights to continued employment by the Company or its affiliates by virtue of the grant of this Option,

6.         Recapitalization, Mergers, Etc.   As provided in and subject to the Plan, in the event of a merger, recapitalization or other corporate transaction involving the Company, the Administrator may in its discretion take certain actions affecting the Option and the Optionee’s rights hereunder, including without limitation adjusting the number and kind of securities subject to the Option and the exercise price hereunder, providing for another entity to assume the Option, making provision for a cash payment, and terminating the Option.

7.         Option Not Transferable .  This Option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution, and is exercisable, during the Optionee’s lifetime, only by the Optionee.

8.         Exercise of Option After Termination of Employment .  If the Optionee’s employment with (a) the Company, (b) an Affiliate, or (c) a corporation (or parent or subsidiary corporation of such corporation)

 

  3    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

issuing or assuming a stock option in a transaction to which section 424(a) of the Code applies, is terminated for any reason other than by disability (within the meaning of section 22(e)(3) of the Code) or death, the Optionee may exercise only the rights that were available to the Optionee at the time of such termination and only within three months from the date of termination. If the Optionee’s employment is terminated as a result of disability, such rights may be exercised only within twelve months from the date of termination. Upon the death of the Optionee, his or her designated beneficiary or legal representative shall have the right, at any time within twelve months after the date of death, to exercise in whole or in part any rights that were available to the Optionee at the time of death. Notwithstanding the foregoing, no rights under this Option may be exercised after the Expiration Date.

9.           Compliance with Securities Laws .    It shall be a condition to the Optionee’s right to purchase shares of Stock hereunder that the Company may, in its discretion, require (a) that the shares of Stock reserved for issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system on which the Company’s Stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under that Act and the Optionee shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or the Optionee, or both. The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall consider necessary to comply with any applicable law.

10.         Optionee’s Tax Treatment .   This Option is intended to be treated as an incentive stock option under section 422 of the Code. However, incentive stock option treatment requires compliance with a variety of factors, and the Company can give no assurance that the Option will, in fact, be treated as an incentive stock option.

11.         Notice of Sale of Shares Required .  The Optionee agrees to notify the Company in writing within 30 days of the disposition of any shares purchased upon exercise of this Option if such disposition occurs within two years of the date of the grant of this Option or within one year after such purchase.

Approved [                                          ]

 

  4    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

Exhibit B -- Form of Nonstatutory Stock Option

 

2010 ISO-                                  Shares

Audax Health Solutions, Inc.

2010 Equity Incentive Plan

Nonstatutory Stock Option Certificate

Audax Health Solutions, Inc., a Delaware corporation (the “ Company ”), hereby grants to the person named below (the “ Participant ”) an option to purchase shares of common stock, par value $.001 per share, of the Company (the “ Option ”) under and subject to the Company’s 2010 Equity Incentive Plan (the “ Plan ”) exercisable on the following terms and conditions and those set forth on the reverse side of this certificate:

 

Name of Optionee:

 

 

Address:

 

 

 

 

 

 

 

 

Social Security No.:

 

 

Number of Shares:

 

 

Option Price:

 

Date of Grant:

 

 

Exercisability Schedule:

 

After [                                          ] (being the 1 year anniversary of the grant date), as to [                                          ] shares (being 25% of the shares),

After [                                          ] (being the 2 year anniversary of the grant date), as to an additional [                                          ] shares (being 50% of the shares),

After [                                          ] (being the 3 year anniversary of the grant date), as to an additional [                                          ] shares (being 75% of the shares), and

After [                                          ] (being the 4 year anniversary of the grant date), as to an additional [                                          ] shares (being all of the shares).

 

Expiration Date:

 

 

This Option is intended to be treated as an Incentive Stock Option under section 422 of the Internal Revenue Code of 1986, as amended (the “ Code ”).

 

  1    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

By acceptance of this Option, the Optionee agrees to the terms and conditions set forth in this Agreement and in the Plan.

 

OPTIONEE

   

AUDAX HEALTH SOLUTIONS, INC.

   

By: 

   
   

Title:

 

 

  2    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

Nonstatutory Stock Option Terms And Conditions

1.         Plan Incorporated by Reference .  This Option is issued pursuant to the terms of the Plan and may be amended as provided in the Plan. Capitalized terms used and not otherwise defined in this certificate have the meanings given to them in the Plan. This certificate does not set forth all of the terms and conditions of the Plan, which are incorporated herein by reference. The Board of Directors or a Committee thereof (the “ Administrator ”) administers the Plan and its determinations regarding the interpretation and operation of the Plan are final and binding. Copies of the Plan may be obtained upon request without charge from the Company.

2.         Option Price .  The price to be paid for each share of Stock issued upon exercise of the whole or any part of this Option is the Option Price set forth on the face of this certificate.

3.         Exercisability Schedule .  This Option may be exercised at any time and from time to time for the number of shares and in accordance with the exercisability schedule set forth on the face of this certificate, but only for the purchase of whole shares. This Option may not be exercised as to any shares after the Expiration Date.

4.         Method of Exercise ,  To exercise this Option, the Optionee shall deliver (a) written notice of exercise in the form attached as Exhibit C hereto, to the Company specifying the number of shares with respect to which the Option is being exercised, and (b) payment of the Option Price for such shares in cash, by certified check or in such other form, including shares of Common Stock of the Company valued at their Fair Market Value on the date of delivery, as the Administrator may approve. In connection with any purchase of shares pursuant to an exercise of this Option, the Optionee shall execute joinder signature pages in a form acceptable to the Company and shall become a party to such voting agreement and shareholders agreement, investor rights agreement or other similar agreement that all or substantially all holders of Company common stock are a party and as the Company shall reasonably determine.

5.         Rights as a Shareholder or Employee .  The Optionee shall not earn the right to exercise or obtain the value of any portion of this Option except as provided in the exercisability schedule and until such time as all the conditions set forth herein and in the Plan that are required to be met in order to exercise this Option have been fully satisfied. No portion of this Option shall be deemed compensation for past services before it has become exercisable in accordance with the exercisability schedule. The Optionee shall not have any rights in respect of shares as to which the Option shall not have been exercised and payment made as provided above. The Optionee shall not have any rights to continued employment or other service by the Company or its affiliates by virtue of the grant of this Option.

6.         Recapitalization, Mergers, Etc.   As provided in and subject to the Plan, in the event of a merger, recapitalization or other corporate transaction involving the Company, the Administrator may in its discretion take certain actions affecting the Option and the Optionee’s rights hereunder, including without limitation adjusting the number and kind of securities subject to the Option and the exercise price hereunder, providing for another entity to assume the Option, making provision for a cash payment, and terminating the Option.

7.         Option Not Transferable .  Unless otherwise determined by the Administrator, this Option is not transferable by the Optionee otherwise than, if an individual, by will or the laws of descent and distribution, and is exercisable, during the Optionee’s lifetime, only by the Optionee.

[ For Employees ]    8.     Exercise of Option After Termination of Employment .    If the Optionee’s employment with (a) the Company, (b) an Affiliate, or (c) a corporation (or parent or subsidiary corporation of such corporation) issuing or assuming a stock option in a transaction to which section 424(a)

 

  3    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

of the Code applies, is terminated for any reason other than by disability (within the meaning of section 22(e)(3) of the Code) or death, the Optionee may exercise only the rights that were available to the Option at the time of such termination and only within three months from the date of termination. If the Optionee’s employment is terminated as a result of disability, such rights may be exercised only within twelve months from the date of termination. Upon the death of the Optionee, his or her designated beneficiary or legal representative shall have the right, at any time within twelve months after the date of death, to exercise in whole or in part any rights that were available to the Optionee at the time of death. Notwithstanding the foregoing, no rights under this Option may be exercised after the Expiration Date.

[ For Consultants/Directors ]   1   8.     Exercise of Option After Termination of Consulting Relationship/Services Engagement .    If the Optionee’s consulting relationship or other services engagement with the Company or any of its affiliates is terminated for any reason, the Optionee or the Optionee’s legal representative may exercise only the rights that were available to the Optionee at the time of such termination and only within three months from the date of termination. Notwithstanding the foregoing, no rights under this Option may be exercised after the Expiration Date.

9.           Compliance with Securities Laws .   It shall be a condition to the Optionee’s right to purchase shares of Stock hereunder that the Company may, in its discretion, require (a) that the shares of Stock reserved for issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system on which the Company’s Stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under that Act and the Optionee shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or the Optionee, or both. The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall consider necessary to comply with any applicable law.

10.         Payment of Taxes .   The Optionee shall pay to the Company, or make provision satisfactory to the Company for payment of, any taxes required by law to be withheld with respect to the exercise of this Option. The Administrator may, in its discretion, require any other Federal or state taxes imposed on the sale of the shares to be paid by the Optionee. In the Administrator’s discretion, such tax obligations may be paid in whole or in part in shares of Stock, including shares retained from the exercise of this Option, valued at their Fair Market Value on the date of delivery. The Company and its affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Optionee.

Approved [                                          ]

 

 

 

1   In the case of a consultant, the termination provision will need to be consistent with the respective consulting agreement.

 

  4    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

Exhibit C —Form of Exercise

Exercise #                 

Audax Health Solutions, Inc.

2010 Equity Incentive Plan

Form of Exercise

The undersigned person (the “ Participant ”), pursuant to the 2010 Equity Incentive Plan (the “ Plan ”) of Audax Health Solutions, Inc. (the “ Company ”), and pursuant to option certificate number                              dated                                                   , hereby agrees to purchase from the Company                      shares of Common Stock, par value $.001 per share, at an exercise price of                              per share for a total purchase price of $                                          .

 

Name of Optionee:  

 

Address:  

 

 

 

 

 

 

 

Social Security No.:  

 

The above Participant has delivered the following consideration to the Company in exchange for the shares of Common Stock listed above:

(1)        $                       in cash or by certified check.

(2)        [The Participant has executed and delivered to the Company two joinder signature pages to such voting agreement and shareholders agreement, investor rights agreement or other similar agreement that all or substantially all holders of Company common stock are a party and as the Company shall reasonably determine.]

IN WITNESS WHEREOF, the undersigned Participant has executed this Form of Exercise this                              day of                  , 20          .

 

 

 

   

 

Signature of Participant     Date of Exercise

 

  1    2010 Equity Incentive Plan of Audax Health Solutions, Inc.    

Exhibit 4.5

RALLY HEALTH, INC.

2014 Equity Incentive Plan

This 2014 Equity Incentive Plan (the “ Plan ”) is intended to encourage ownership of Common Stock, par value $0.001 per share (the “ Stock ”), of Rally Health, Inc. (f//k/a Audax Holdings, Inc.), a Delaware corporation (the “ Company ”), by its directors, officers, employees and consultants through the grant of Incentive Stock Options and Nonstatutory Stock Options (collectively, “ Options ”) and Restricted Stock (as such terms are defined below) in order to attract, motivate and retain outstanding individuals for such positions, to align their interests with those of the Company’s shareholders, and to provide them with appropriate compensation and additional incentives to promote the success of the Company.

1.           Administration of the Plan .  The administration of the Plan shall be under the general supervision of the Board of Directors of the Company (the “ Board ”), which shall, within the limits of the Plan, determine the persons (“ Participants ”) to whom and the times at which Options or Restricted Stock shall be granted. The Board may establish such rules as it deems necessary for the proper administration of the Plan, make such determinations and interpretations with respect to the Plan and Options and Restricted Stock granted under it as may be necessary or desirable and include such further provisions or conditions with respect to which Options and Restricted Stock may be granted under the Plan as it deems advisable. To the extent permitted by law, the Board may delegate its authority under the Plan to a committee of the Board (a “ Committee ”). References to the Board herein shall include a Committee as applicable.

2.           Shares Subject to the Plan .

(a)           Number and Type of Shares .  Subject to the provisions of Section 2(b) and (c), the aggregate number of shares of Stock of the Company that may be issued pursuant to Options or Restricted Stock granted under the Plan is 18,500,513 shares of Common Stock. In addition, shares issued hereunder may consist in whole or in part of authorized but unissued shares or treasury shares.

(b)           Adjustments; Assumption of Options .  In the event (i) of any stock dividend, split-up or combination of shares effected proportionately with respect to all outstanding shares of Stock, or (ii) the Board determines that any other recapitalization or any extraordinary cash dividend, reorganization, merger, consolidation, spin-off, exchange of shares or other similar capital change affects the Stock such that adjustment is required in order to preserve the benefits or potential benefits of the Plan or any Option granted under the Plan, the Board (whose determination shall be conclusive) shall appropriately adjust (A) the number and kind of shares or securities of the Company that may be issued under the Plan, (B) the number and kind of shares subject to outstanding Options, and (C) the exercise price or the repurchase price of Restricted Stock, so that the proportionate number of shares or other securities as to which Options or Restricted Stock may be granted and the proportionate interest of holders of outstanding Options shall be maintained as before the occurrence of such event. In the event of any reorganization, merger, consolidation, spin-off or exchange of shares, the Board in its discretion may cause any Option to be cancelled, assumed by another entity party to the transaction, or new rights substituted therefor, by another entity party to the transaction.

(c)           Restoration of Shares .  Shares subject to an Option granted under the Plan that expires, is terminated unexercised, is forfeited for any reason, or is settled in a manner that results in fewer shares outstanding than were initially awarded, shares surrendered in payment of the option price or any tax obligation with respect to an Option or Restricted Stock, and shares of Restricted Stock granted under the Plan that are repurchased by, or forfeited to, the Company shall again be available for granting Options or Restricted Stock under the Plan to the extent of such expiration, termination, forfeiture, repurchase or decrease subject, however, in the case of Incentive Stock Options, to any requirements under the Internal Revenue Code of 1986, as amended (the “ Code ”).

 

1

3.           Options .

(a)           Types of Options .  Options shall be granted under the Plan either as incentive stock options (“ Incentive Stock Options ”), as defined in Section 422 of the Code, or as Options that do not meet the requirements of Section 422 (“ Nonstatutory Stock Options ”). Options may be granted from time to time by the Board to employees of the Company or of any parent or subsidiary company of the Company (as defined in Sections 424(e) and (f), respectively, of the Code), and Nonstatutory Stock Options may also be granted to non-employee directors and consultants of the Company or any such other company.

(b)           Date of Grant .  The date of grant for each Option shall be the date on which it is approved by the Board, or such later date as the Board may specify but in no event prior to the date the Participant commences performing services for the Company or any parent or subsidiary company of the Company. No Incentive Stock Options shall be granted hereunder after ten years from the last date on which the Plan was approved for purposes of § 422 of the Code.

(c)           Option Price .  The price at which shares may from time to time be purchased (the “ Option Price ”) under each Option shall be determined by the Board, provided that such price shall not be less than the fair market value of the Stock on the date of grant as determined in good faith by the Board after taking into consideration all factors which it deems appropriate and in accordance with applicable statutory and regulatory guidelines (“ Fair Market Value ”); and provided further that no Option granted to any individual whose ownership of stock of the Company or its parent or subsidiary companies exceeds the limitations set forth in Section 422(b)(6) of the Code shall be an Incentive Stock Option unless the Option Price thereof is at least 110% of the Fair Market Value of the Stock on the date of grant.

(d)           Payment .  No shares of Stock shall be delivered upon exercise of an Option until the Company receives full payment for Option Price therefore. Payment of the Option Price may be in cash or, to the extent permitted by the Board at or after the grant of the Option, pursuant to any of the following methods: (i) by delivery of a promissory note, (ii) by actual delivery or attestation of ownership of Shares of Common Stock owned by the Participant or Shares of Common Stock that are retained from the exercise of an Option, or (iii) for such other lawful consideration as the Board may determine.

(e)           Term of Option; Exercisability .    The Board shall determine the term of all Options, the time or times that Options become exercisable and whether they become exercisable in installments; provided, however, that the term of each Option shall not exceed a period of ten years from the date of its grant, and provided further that no Option granted to any individual whose ownership of stock of the Company or its parent or subsidiary companies exceeds the limitations set forth in Section 422(b)(6) of the Code shall be an Incentive Stock Option unless the term thereof does not exceed a period of five years from the date of its grant.

(f)           Effect of Disability, Death or Termination of Employment .    The Board shall determine the effect on an Option of the disability, death, retirement or other termination of employment or service of a Participant and the extent to which, and the period during which, the Participant’s estate, legal representative, guardian, or beneficiary on death may exercise rights thereunder. Any beneficiary on death shall be designated by the Participant, in the manner determined by the Board, to exercise rights of the Participant in the case of the Participant’s death.

 

2

(g)           Form of Options .  Options granted hereunder shall be evidenced by an instrument delivered to the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Board considers necessary or advisable to achieve the purposes of the Plan or comply with applicable tax and regulatory laws and accounting principles. The form of Options may vary among Participants; provided that, in the absence of a specific determination in any particular case, the forms of Incentive and Nonstatutory Stock Option shall be as set forth in Exhibits A and B hereto, respectively.

(h)           Amendment or Termination of Options .  The Board may amend, modify, or terminate any outstanding Option, including substituting therefor another Option of the same or a different type, changing the date of exercise or realization and converting an Incentive Stock Option to a Nonstatutory Stock Option. Other than in connection with a Company reorganization, merger, stock sale, consolidation, spin-off or exchange of shares, or Change in Control any such action shall require the Participant’s consent unless:

 (i)        in the case of a termination of, or a reduction in the number of shares issuable under, an Option, any time period relating to the exercise of such Option or the eliminated portion, as the case may be, is waived or accelerated before such termination or reduction (and in such case the Board may provide for the Participant to receive cash or other property equal to the net value that would have been received upon exercise of the terminated Option or the eliminated portion, as the case may be); or

 (ii)       in any other case, the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant.

(i)           Non-transferability of Options .  An Option (i) shall not be transferable other than as designated by the Participant, by will or by the laws of descent and distribution, and (ii) may be exercised, during the Participant’s lifetime, only by the Participant or the Participant’s guardian or legal representative. The Board may waive this restriction in any particular case, provided that Incentive Stock Options may be transferable only to the extent permitted by the Code.

(j)           No Rights as a Shareholder .  No Participant or any person claiming through a Participant shall have any rights as a shareholder with respect to any shares of Stock to be distributed under the Plan until he or she becomes the holder of such Stock thereof. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to such date, except as otherwise provided in this Plan.

4.           Restricted Stock .

(a)           Terms .  The Board may issue shares of Stock to Participants subject to forfeiture or to the Company’s right to repurchase such shares (“ Restricted Stock ”). Shares of Restricted Stock may be issued without cash consideration or for such consideration as may be determined by the Board. The Board shall determine the duration of the period of time (the “ Restricted Period ”) during which, the price (if any) at which, and the other conditions under which, the shares may be forfeited or repurchased by the Company and other terms and conditions of such grants.

(b)           Restrictions .  Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Board, during the Restricted Period. Any certificates issued in respect of shares of Restricted Stock shall be registered in the name of the Participant, shall contain such legend as the Board may require with respect to the restrictions on transfer and, if required by the Board, shall be deposited by the Participant, together with a stock power endorsed

 

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in blank, with the Company. At the expiration of the Restricted Period with respect to any of such shares, the Company shall deliver a certificate with respect to such shares, without a legend referring to the Plan’s restrictions on transfer, to the Participant or, if the Participant has died, to the Participant’s designated beneficiary or legal representative.

(c)           Restricted Stock Purchase Agreement .  Each recipient of Restricted Stock shall enter into a Restricted Stock Purchase Agreement with the Company that shall specify the terms and conditions of such grant of Restricted Stock and shall contain such other terms and conditions not inconsistent with the provisions of this Plan as the Board considers necessary or advisable to achieve the purposes of the Plan or comply with applicable tax and regulatory laws and accounting principles. The form of such Restricted Stock Purchase Agreement may vary among Participants. The Restricted Stock Purchase Agreement may be amended by the Board in any respect, provided that the consent of the Participant shall be required for any amendment, other than an amendment made in order to conform the Restricted Stock Purchase Agreement or the Plan to restrictions imposed by securities or tax laws or regulations, that would materially and adversely affect the Participant.

5.           No Right to Employment or Other Relationship .  No person shall have any claim or right to be granted an Option or Restricted Stock, and any grant of an Option or Restricted Stock shall not be construed as giving the Participant the right to continued employment or any other relationship with the Company, The Company expressly reserves the right at any time to end any relationship it may have with a Participant free from any liability or claim under the Plan except as specifically provided in the applicable Option or Restricted Stock Purchase Agreement.

6.           Documentation; Shareholder Agreement; Other Conditions .  Each Option and share of Restricted Stock issued under this Plan shall be evidenced by a writing delivered to the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the Plan as the Board considers necessary and advisable. Each Option and share of Restricted Stock issued under this Plan shall also be subject to the terms and conditions of the Amended and Restated Certificate of Incorporation of the Company (as it may be amended, modified or supplemented from time to time in the sole discretion of the Board, the “ Company Charter ”), including, but not limited to, the provisions of Section 4.10 (Mandatory Exercise Rights; Put/Call Rights) therein. The Board may at the time of grant of an Option or share of Restricted Stock or at any time thereafter, require as a condition for exercise of an Option or termination of a Restricted Period that each Participant execute a Shareholder Agreement or other similar agreement containing such provisions relating to voting, restrictions on transferability, first refusal rights and otherwise as the Board may deem necessary or desirable and may at any time impose such additional conditions with respect to the issuance and/or delivery of stock under the Plan as it considers necessary or advisable to comply with the requirements of securities, tax or other laws or regulations, including without limitation restricting the transfer of such shares and requiring appropriate representations and agreements from the Participant, and the Company shall be entitled to postpone such issuance or delivery until such conditions have been met.

7.           Withholding .  The Participant shall pay to the Company, or make provision satisfactory to the Board for payment of, any taxes required by law to be withheld in respect of any Option or Restricted Stock no later than the date of the event creating the tax liability. In the Board’s discretion, such tax obligations may be paid in whole or in part in shares of Stock, including shares retained from the exercise of the Option or from the grant of Restricted Stock creating the tax obligation, valued at the Fair Market Value of the Stock on the date of delivery to the Company. The Company and any of its affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Participant.

 

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8.           Amendment or Termination .  The Board may amend or terminate the Plan, and any Option or Restrictive Stock award issued thereunder, at any time, subject to such approval of the shareholders as the Board shall deem necessary or advisable.

9.           Change in Control .  In the event that there is a Change in Control (as defined below) and/or the Company is a party to a merger or acquisition or reorganization or similar transaction, awards outstanding under the Plan shall be subject to the merger agreement or other applicable transaction agreement. Such agreement may provide, without limitation, subject to the consummation of the applicable transaction, for the assumption (or substitution) of outstanding awards by the surviving corporation or its affiliate, for their continuation by the Company (if the Company is a surviving corporation), for accelerated vesting or for their cancellation with or without consideration, in all cases without the consent of the Participant. Notwithstanding the foregoing, in the event that a Change in Control occurs and there is no assumption, substitution or continuation of awards, all awards shall vest and become exercisable as of immediately before the closing of the transactions contemplated by such Change in Control and any award that is not exercised before such Change in Control shall automatically terminate. For avoidance of doubt, “substitution” includes, without limitation, an award being replaced by a cash award that provides an equivalent value (wherein equivalent value equals the difference between the value a holder of an equivalent share underlying an award receives in the Change in Control and any exercise price). A “Change in Control” shall have the same meaning as the term “Sale” in the Company Charter provided that all references in such definition to a “Person” shall instead be references to the Company, as applicable, provided that, for the avoidance of doubt, a “Change in Control” shall not include a “Sale” (as defined in the Company Charter) of any direct or indirect parent entity of the Company.

10.         Shareholder Approval .  The Plan shall be presented for approval by the shareholders of the Company within twelve (12) months from the date the Plan was adopted by the Board. In the event such approval is not obtained, all Incentive Stock Options granted under the Plan shall be deemed to be Nonstatutory Stock Options and no further Incentive Stock Options may be granted, but the provisions of the Plan regarding other Options and Restricted Stock shall remain in effect.

11.         Governing Law .  The provisions of the Plan and all Options made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, without regard to any applicable conflict of law principles.

12.         Effective Date and Term of Plan .  The Plan shall become effective on the date on which it is adopted by the Board. As of the effective date of the Plan, no further awards shall be granted under the Audax Health Solutions, Inc. 2010 Equity Incentive Plan and no forfeitures of awards under the Audax Health Solutions, Inc. 2010 Equity Incentive Plan shall be available for grant under this Plan. No Options shall be granted under the Plan after the completion of ten years from the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved or reapproved by the Company’s stockholders, but Options or Restricted Stock previously granted may extend beyond that date.

13.         Lock-up Agreement .  The Company may, in its discretion, require in connection with an initial public offering that a Participant agree that any Stock not be sold, offered for sale, or otherwise disposed of for a period of time as determined by the Board.

14.         Book Entry .  Notwithstanding any other provision of this Plan to the contrary, the Company shall not be obligated under this Plan to issue certificates to represent shares and, instead, may elect to satisfy any requirement under this Plan for the delivery of certificates through the use of book-entry.

 

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*****************

Adopted by the Board of Directors of Rally Health, Inc. (f/k/a Audax Holdings, Inc.) on April 14, 2014 and approved by the shareholders of Rally Health, Inc. (f/k/a Audax Holdings, Inc.) as of April 14, 2014.

 

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Exhibit A

Form of Incentive Stock Option Certificate

 

7

             Shares 

Rally Health, Inc.

2014 Equity Incentive Plan

Incentive Stock Option Certificate

Rally Health, Inc. (f/k/a Audax Holdings, Inc.), a Delaware corporation (the “ Company ”), hereby grants to the person named below (the “ Optionee ”) an option to purchase shares of common stock, par value $0.001 per share, of the Company (the “ Option ”) under and subject to the Company’s 2014 Equity Incentive Plan (the “ Plan ”) and the Amended and Restated Certificate of Incorporation of the Company (as amended, modified or supplemented from time to time, in the sole discretion of the Board, the “ Company Charter ”), exercisable on the following terms and conditions set forth in this Incentive Stock Option Certificate and the attached Incentive Stock Option Terms and Conditions (together, the “ Agreement ”):

 

Name of Optionee:

  

<<Name>>

Number of Shares:

  

<<Shares>>

Option Price:

  

<<Price>> per share

Grant Date:

  

<<Grant Date>>

Vesting Commencement Date:

  

<<Vesting Date>>

Vesting Schedule:

Subject in all respects to the Company Charter:

Four year vesting with 25% of the option vesting on the one-year anniversary of the Vesting Commencement Date (rounded down to the nearest whole share); the remaining balance (75%) vests in equal monthly installments thereafter over a thirty-six month period (rounded down to the nearest whole share, except for the last vesting installment), subject to Optionee’s continuous employment with the Company on such dates.

 

Expiration Date:

  

<<Expiration Date>>

This Option is intended to be treated as an Incentive Stock Option under section 422 of the Internal Revenue Code of 1986, as amended (the “ Code ”).

By acceptance of this Option, the Optionee agrees to the terms and conditions set forth in this Agreement, the Plan and the Company Charter. The Optionee acknowledges receipt of, and understands and agrees to, this Agreement, the Plan and the Company Charter. The Optionee acknowledges and agrees that this Agreement may not be modified, amended or revised except as provided in the Plan. The Optionee further acknowledges that the Company Charter may be amended from time to time in the sole discretion of the Board and that any amendments shall be binding on the Optionee. The Optionee further acknowledges that as of the Grant Date, this Agreement, the Plan and the Company Charter sets forth the entire understanding between the Optionee and the Company regarding the Option and supersede all prior oral and written agreements, promises and representations on that subject.

 

1

OPTIONEE

   

RALLY HEALTH, INC.

 

   

By:

 

 

   

Title: Chief Executive Officer

 

2

Incentive Stock Option Terms And Conditions

1.     Plan and the Company Charter Incorporated by Reference .  This Option is issued pursuant to the terms of the Plan and the Company Charter and may be amended as provided in the Plan. Capitalized terms used and not otherwise defined in this certificate have the meanings given to them in the Plan. This certificate does not set forth all of the terms and conditions of the Plan and the Company Charter, which are incorporated herein by reference. The Board of Directors or a Committee thereof (the “ Administrator ”) administers the Plan and its determinations regarding the interpretation and operation of the Plan are final and binding. Copies of the Plan and the Company Charter may be obtained upon request without charge from the Company.

2.     Option Price .  The price to be paid per share of common stock issued upon exercise of the whole or any part of this Option is the Option Price set forth on the face of this certificate.

3.     Exercisability Schedule .  This Option may be exercised at any time and from time to time for the number of shares and in accordance with the exercisability schedule set forth on the face of this certificate, but only for the purchase of whole shares. This Option may not be exercised as to any shares after the Expiration Date.

4.     Method of Exercise .  To exercise this Option, the Optionee shall deliver (a) written notice of exercise in the form attached as Exhibit A hereto, to the Company specifying the number of shares with respect to which the Option is being exercised, and (b) payment of the Option Price for such shares in cash, by certified check or in such other form, including shares of common stock of the Company valued at their Fair Market Value on the date of delivery, as the Administrator may approve in its discretion. In lieu of such payment of the Option Price, the Optionee may elect to exercise the cashless exercise option as provided in the form attached as Exhibit A hereto. In connection with any purchase of shares pursuant to an exercise of this Option, the Optionee shall execute joinder signature pages in a form acceptable to the Company and shall become a party to such voting agreement and stockholders agreement, investor rights agreement or other similar agreement that all or substantially all holders of Company common stock are a party, as applicable, and as the Company shall reasonably determine.

5.     Rights as a Stockholder or Employee .  The Optionee shall not earn the right to exercise or obtain the value of any portion of this Option except as provided in the exercisability schedule and until such time as all the conditions set forth herein and in the Plan and the Company Charter that are required to be met in order to exercise this Option have been fully satisfied. The Optionee shall not have any rights in respect of shares as to which the Option shall not have been exercised and payment made as provided above. The Optionee shall not have any rights to continued employment by the Company or its affiliates by virtue of the grant of this Option.

6.     Recapitalization, Mergers, Etc .  As provided in and subject to the Plan and the Company Charter, in the event of a Change in Control, merger, recapitalization or other corporate transaction involving the Company, the Administrator may in its discretion take certain actions affecting the Option and the Optionee’s rights hereunder, including without limitation adjusting the number and kind of securities subject to the Option and the exercise price hereunder, providing for another entity to assume the Option, making provision for a cash payment, and terminating the Option.

7.     Option Not Transferable .  Unless otherwise determined by the Administrator, this Option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution, and is exercisable, during the Optionee’s lifetime, only by the Optionee.

 

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8.     Restrictions on Transfers of Stock .  The Optionee agrees, for the Optionee and on behalf of the Optionee’s heirs, legatees and legal representatives, with respect to all shares of Stock acquired pursuant to this Option, that the Optionee and the Optionee’s heirs, legatees and legal representatives shall not sell or otherwise dispose of such shares except strictly in accordance with the Company Charter. The Option granted hereunder and all shares of Stock acquired pursuant to this Option shall at all times be subject to the restrictions on transfer of such shares of Stock, the Put/Call rights, and other terms and conditions set forth in the Company Charter.

9.     Exercise of Option After Termination of Employment .  If the Optionee’s employment with (a) the Company, (b) an Affiliate, or (c) a corporation (or parent or subsidiary corporation of such corporation) issuing or assuming a stock option in a transaction to which section 424(a) of the Code applies, is terminated for any reason other than by disability (within the meaning of section 22(e)(3) of the Code) or death, the Optionee may exercise only the rights that were available to the Optionee at the time of such termination and only within three months from the date of termination. If the Optionee’s employment is terminated as a result of disability, such rights may be exercised only within twelve months from the date of termination. Upon the death of the Optionee, his or her designated beneficiary or legal representative shall have the right, at any time within twelve months after the date of death, to exercise in whole or in part any rights that were available to the Optionee at the time of death. Notwithstanding the foregoing, (i) no rights under this Option may be exercised after the Expiration Date, and (ii) if the Optionee’s employment is terminated for cause, all Options held by the Optionee, whether or not vested at the time of such termination, shall immediately terminate without payment and shall not be exercisable. For purposes of the Plan, “cause” shall mean (i) if the Optionee is party to an employment or service agreement with the Company or an Affiliate that provides for a definition of cause, the definition of cause provided therein, and (iii) if there is no such employment or service agreement definition, the following: (A) gross negligence or willful misconduct in connection with the performance of duties; (B) conviction of a criminal offense (other than minor traffic offenses); or (C) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-solicitation or non-competition agreement, if any, between the applicable Optionee and the Company or an Affiliate. The Board, in its sole discretion, shall determine the effect of all matters and questions relating to whether an Optionee has been discharged for cause.

10.   Rights to Repurchase Stock .  The Optionee acknowledges and agrees that the following provisions shall apply to all Stock acquired by the Optionee (or any other person who acquires Stock hereunder as a result of the death of the Optionee) pursuant to any exercise of the Option:

(i)        Subject to the terms and conditions of the Company Charter (including the Put/Call rights set forth therein), in the event the Optionee ceases to be an employee of or consultant to the Company for any reason at any time, the Company shall have the right to purchase the Stock owned or controlled by the Optionee by reason of exercise or realization of an award hereunder (whether such exercise or realization occurs before or after such termination) at a price per share payable in cash equal to the then Fair Market Value of such Stock as of the date of the Company’s exercise of such repurchase right.

(ii)       In the event the Company enters into or proposes to enter into an agreement providing for an acquisition of the Company by a third party in a transaction that includes or is proposed to include the purchase of all or substantially all of the outstanding shares of Stock (and rights to acquire Stock) of the Company, then the Optionee agrees to sell all the Stock then owned or controlled by such Optionee (or any permitted transferee or successor) by reason of the Optionee’s exercise or realization of any award granted under the Plan.

11.   Compliance with Securities Laws . It shall be a condition to the Optionee’s right to purchase shares of Stock hereunder that the Company may, in its discretion, require (a) that the shares of Stock reserved for

 

4

issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system on which the Company’s Stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under that Act and the Optionee shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or the Optionee, or both. The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall consider necessary to comply with any applicable law.

12.   Optionee’s Tax Treatment .  This Option is intended to be treated as an incentive stock option under section 422 of the Code. However, incentive stock option treatment requires compliance with a variety of factors, and the Company can give no assurance that the Option will, in fact, be treated as an incentive stock option.

13.   Notice of Sale of Shares Required .  The Optionee agrees to notify the Company in writing within 30 days of the disposition of any shares purchased upon exercise of this Option if such disposition occurs within two years of the date of the grant of this Option or within one year after such purchase.

Approved [                                          ]

 

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Exhibit A —Form of Exercise

Rally Health, Inc.

2014 Equity Incentive Plan

Form of Exercise

The undersigned person (the “ Participant ”), pursuant to the 2014 Equity Incentive Plan (the “ Plan ”) of Rally Health, Inc. (f/k/a Audax Holdings, Inc.) (the “ Company ”), and pursuant to option certificate number <<GrantNo>> dated <<GrantDate>>, hereby agrees to purchase from the Company                      shares of Common Stock, par value $0.001 per share, at an exercise price of <<Price>> per share for a total purchase price of $                              .

 

Name of Participant:  

 

Mailing Address:  

 

 

 

Personal Email Address:  

 

Telephone Number:  

 

Social Security Number:  

 

The above Participant has delivered the following consideration to the Company in exchange for the shares of Common Stock listed above:

(1)        $                       in cash or by certified check OR

(2)                                                                  I am exercising the Option pursuant to the cashless exercise provisions provided for by the Company. The Company will withhold from the shares otherwise issuable upon exercise a whole number of shares with a Fair Market Value equal to (or less than) the aggregate exercise price, and will then issue the net number of remaining shares to me. If the whole number of shares to be withheld does not exactly equal my aggregate exercise price, then I will provide the Company with a check or money order payable to the Company for the shortfall. I understand that the Company will not process my option exercise until it receives the check or money order covering the shortfall in the exercise price.

(3)        The Participant has executed and delivered to the Company joinder signature pages and related consents of spouse to such voting agreement and shareholders agreement, investor rights agreement or other similar agreement that all or substantially all holders of Company common stock are a party and as the Company shall reasonably determine.

IN WITNESS WHEREOF, the undersigned Participant has executed this Form of Exercise this                              day of                  , 20          .

 

 

Signature of Participant

 

6

Exhibit B

Form of Nonstatutory Stock Option Certificate

 

7

           Shares

Rally Health, Inc.

2014 Equity Incentive Plan

Nonstatutory Stock Option Certificate

Rally Health, Inc. (f/k/a Audax Holdings, Inc.), a Delaware corporation (the “ Company ”), hereby grants to the person named below (the “ Optionee ”) an option to purchase shares of common stock, par value $0.001 per share, of the Company (the “ Option ”) under and subject to the Company’s 2014 Equity Incentive Plan (the “ Plan ”) and the Amended and Restated Certificate of Incorporation of the Company (as amended, modified or supplemented from time to time, in the sole discretion of the Board, the “ Company Charter ”), exercisable on the following terms and conditions set forth in this Nonstatutory Stock Option Certificate and the attached Nonstatutory Stock Option Terms and Conditions (together, the “ Agreement ”):

 

Name of Optionee:  

  <<Name>>

Number of Shares:  

  <<Shares>>

Option Price:  

  <<Price>> per share

Grant Date:  

  <<Grant Date>>

Vesting Commencement Date:  

  <<Vesting Date>>

Vesting Schedule:

Subject in all respects to the Company Charter:

Four year vesting with 25% of the option vesting on the one-year anniversary of the Vesting Commencement Date (rounded down to the nearest whole share); the remaining balance (75%) vests in equal monthly installments thereafter over a thirty-six month period (rounded down to the nearest whole share, except for the last vesting installment), subject to Optionee’s continuous employment with the Company on such dates.

 

Expiration Date:  

  <<Expiration Date>>

This Option is not intended to be treated as an Incentive Stock Option under section 422 of the Internal Revenue Code of 1986, as amended (the “ Code ”).

By acceptance of this Option, the Optionee agrees to the terms and conditions set forth in this Agreement, the Plan and the Company Charter. The Optionee acknowledges receipt of, and understands and agrees to, this Agreement, the Plan and the Company Charter. The Optionee acknowledges and agrees that this Agreement may not be modified, amended or revised except as provided in the Plan. The Optionee further acknowledges that the Company Charter may be amended from time to time in the sole discretion of the Board and that any amendments shall be binding on the Optionee. The Optionee further acknowledges that as of the Grant Date, this Agreement, the Plan and the Company Charter sets forth the entire understanding between the Optionee and the Company regarding the Option and supersede all prior oral and written agreements, promises and representations on that subject.

 

1

OPTIONEE

      RALLY HEALTH, INC.

 

     

By: 

   
     

  Title:

  Chief Executive Officer

 

2

Nonstatutory Stock Option Terms And Conditions

1.     Plan and the Company Charter Incorporated by Reference .   This Option is issued pursuant to the terms of the Plan and the Company Charter and may be amended as provided in the Plan. Capitalized terms used and not otherwise defined in this certificate have the meanings given to them in the Plan. This certificate does not set forth all of the terms and conditions of the Plan and the Company Charter, which are incorporated herein by reference. The Board of Directors or a Committee thereof (the “ Administrator ”) administers the Plan and its determinations regarding the interpretation and operation of the Plan are final and binding. Copies of the Plan and the Company Charter may be obtained upon request without charge from the Company.

2.     Option Price .  The price to be paid per share of common stock issued upon exercise of the whole or any part of this Option is the Option Price set forth on the face of this certificate.

3.     Exercisability Schedule .  This Option may be exercised at any time and from time to time for the number of shares and in accordance with the exercisability schedule set forth on the face of this certificate, but only for the purchase of whole shares. This Option may not be exercised as to any shares after the Expiration Date.

4.     Method of Exercise .  To exercise this Option, the Optionee shall deliver (a) written notice of exercise in the form attached as Exhibit A hereto, to the Company specifying the number of shares with respect to which the Option is being exercised, and (b) payment of the Option Price for such shares in cash, by certified check or in such other form, including shares of common stock of the Company valued at their Fair Market Value on the date of delivery, as the Administrator may approve in its discretion. In lieu of such payment of the Option Price, the Optionee may elect to exercise the cashless exercise option as provided in the form attached as Exhibit A hereto. In connection with any purchase of shares pursuant to an exercise of this Option, the Optionee shall execute joinder signature pages in a form acceptable to the Company and shall become a party to such voting agreement and stockholders agreement, investor rights agreement or other similar agreement that all or substantially all holders of Company common stock are a party, as applicable, and as the Company shall reasonably determine.

5.     Rights as a Stockholder or Employee .  The Optionee shall not earn the right to exercise or obtain the value of any portion of this Option except as provided in the exercisability schedule and until such time as all the conditions set forth herein and in the Plan and the Company Charter that are required to be met in order to exercise this Option have been fully satisfied. The Optionee shall not have any rights in respect of shares as to which the Option shall not have been exercised and payment made as provided above. The Optionee shall not have any rights to continued employment by the Company or its affiliates by virtue of the grant of this Option.

6.     Recapitalization, Mergers, Etc.   As provided in and subject to the Plan and the Company Charter, in the event of a Change in Control, merger, recapitalization or other corporate transaction involving the Company, the Administrator may in its discretion take certain actions affecting the Option and the Optionee’s rights hereunder, including without limitation adjusting the number and kind of securities subject to the Option and the exercise price hereunder, providing for another entity to assume the Option, making provision for a cash payment, and terminating the Option.

7.     Option Not Transferable .    Unless otherwise determined by the Administrator, this Option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution, and is exercisable, during the Optionee’s lifetime, only by the Optionee.

 

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8.     Restrictions on Transfers of Stock .    The Optionee agrees, for the Optionee and on behalf of the Optionee’s heirs, legatees and legal representatives, with respect to all shares of Stock acquired pursuant to this Option, that the Optionee and the Optionee’s heirs, legatees and legal representatives shall not sell or otherwise dispose of such shares except strictly in accordance with the Company Charter. The Option granted hereunder and all shares of Stock acquired pursuant to this Option shall at all times be subject to the restrictions on transfer of such shares of Stock, the Put/Call rights, and other terms and conditions set forth in the Company Charter.

9.     Exercise of Option After Termination of Employment .   If the Optionee’s employment with (a) the Company, (b) an Affiliate, or (c) a corporation (or parent or subsidiary corporation of such corporation) issuing or assuming a stock option in a transaction to which section 424(a) of the Code applies, is terminated for any reason other than by disability (within the meaning of section 22(e)(3) of the Code) or death, the Optionee may exercise only the rights that were available to the Optionee at the time of such termination and only within three months from the date of termination. If the Optionee’s employment is terminated as a result of disability, such rights may be exercised only within twelve months from the date of termination. Upon the death of the Optionee, his or her designated beneficiary or legal representative shall have the right, at any time within twelve months after the date of death, to exercise in whole or in part any rights that were available to the Optionee at the time of death. Notwithstanding the foregoing, (i) no rights under this Option may be exercised after the Expiration Date, and (ii) if the Optionee’s employment is terminated for cause, all Options held by the Optionee, whether or not vested at the time of such termination, shall immediately terminate without payment and shall not be exercisable. For purposes of the Plan, “cause” shall mean (i) if the Optionee is party to an employment or service agreement with the Company or an Affiliate that provides for a definition of cause, the definition of cause provided therein, and (iii) if there is no such employment or service agreement definition, the following: (A) gross negligence or willful misconduct in connection with the performance of duties; (B) conviction of a criminal offense (other than minor traffic offenses); or (C) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-solicitation or non-competition agreement, if any, between the applicable Optionee and the Company or an Affiliate. The Board, in its sole discretion, shall determine the effect of all matters and questions relating to whether an Optionee has been discharged for cause.

10.   Rights to Repurchase Stock .   The Optionee acknowledges and agrees that the following provisions shall apply to all Stock acquired by the Optionee (or any other person who acquires Stock hereunder as a result of the death of the Optionee) pursuant to any exercise of the Option:

(i)         Subject to the terms and conditions of the Company Charter (including the Put/Call rights set forth therein), in the event the Optionee ceases to be an employee of or consultant to the Company for any reason at any time, the Company shall have the right to purchase the Stock owned or controlled by the Optionee by reason of exercise or realization of an award hereunder (whether such exercise or realization occurs before or after such termination) at a price per share payable in cash equal to the then Fair Market Value of such Stock as of the date of the Company’s exercise of such repurchase right.

(ii)        In the event the Company enters into or proposes to enter into an agreement providing for an acquisition of the Company by a third party in a transaction that includes or is proposed to include the purchase of all or substantially all of the outstanding shares of Stock (and rights to acquire Stock) of the Company, then the Optionee agrees to sell all the Stock then owned or controlled by such Optionee (or any permitted transferee or successor) by reason of the Optionee’s exercise or realization of any award granted under the Plan.

11.   Compliance with Securities Laws .  It shall be a condition to the Optionee’s right to purchase shares of Stock hereunder that the Company may, in its discretion, require (a) that the shares of Stock reserved for

 

4

issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system on which the Company’s Stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under that Act and the Optionee shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or the Optionee, or both. The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall consider necessary to comply with any applicable law.

12.   Optionee’s Tax Treatment .   This Option is not intended to be treated as an incentive stock option under section 422 of the Code.

13.   Notice of Sale of Shares Required .  The Optionee agrees to notify the Company in writing within 30 days of the disposition of any shares purchased upon exercise of this Option if such disposition occurs within two years of the date of the grant of this Option or within one year after such purchase.

Approved [                                          ]

 

5

Exhibit A —Form of Exercise

Rally Health, Inc.

2014 Equity Incentive Plan

Form of Exercise

The undersigned person (the “ Participant ”), pursuant to the 2014 Equity Incentive Plan (the “ Plan ”) of Rally Health, Inc. (f/k/a Audax Holdings, Inc.) (the “ Company ”), and pursuant to option certificate number <<GrantNo>> dated <<GrantDate>>, hereby agrees to purchase from the Company                      shares of Common Stock, par value $0.001 per share, at an exercise price of <<Price>> per share for a total purchase price of $                                  .

 

Name of Participant:  

 

Mailing Address:  

 

 

 

Personal Email Address:  

 

Telephone Number:  

 

Social Security Number:  

 

The above Participant has delivered the following consideration to the Company in exchange for the shares of Common Stock listed above:

(1)        $                       in cash or by certified check OR

(2)                                                                  I am exercising the Option pursuant to the cashless exercise provisions provided for by the Company. The Company will withhold from the shares otherwise issuable upon exercise a whole number of shares with a Fair Market Value equal to (or less than) the aggregate exercise price, and will then issue the net number of remaining shares to me. If the whole number of shares to be withheld does not exactly equal my aggregate exercise price, then I will provide the Company with a check or money order payable to the Company for the shortfall. I understand that the Company will not process my option exercise until it receives the check or money order covering the shortfall in the exercise price.

(3)        The Participant has executed and delivered to the Company joinder signature pages and related consents of spouse to such voting agreement and shareholders agreement, investor rights agreement or other similar agreement that all or substantially all holders of Company common stock are a party and as the Company shall reasonably determine.

IN WITNESS WHEREOF, the undersigned Participant has executed this Form of Exercise this                              day of                  , 20          .

 

 

Signature of Participant

 

6

Exhibit 5.1

 

LOGO

  

Hogan Lovells US LLP

1601 Wewatta Street, Suite 900

Denver, Colorado 80202

T  +1 303 899 7300

F  +1 303 899 7333

www.hoganlovells.com

February 15, 2017

Board of Directors

UnitedHealth Group Incorporated

9900 Bren Road East

Minnetonka, Minnesota 55343

Ladies and Gentlemen:

We are acting as counsel to UnitedHealth Group Incorporated, a Delaware corporation (the “ Company ”), in connection with its Post-Effective Amendment No. 1 to Form S-8 (the “ Registration Statement ”), filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “ Act ”), relating to the proposed offering of (i) up to 3,202,085 newly issued shares (the “ Audax Plan Shares ”) of common stock, $0.01 par value per share, of the Company (the “ Common Stock ”), all of which shares are issuable pursuant to the Audax Health Solutions, Inc. 2010 Equity Incentive Plan, as amended (the “ Audax Plan ”), (ii) up to 1,601,276 newly issued shares (the “ Rally Plan Shares ”) of Common Stock, all of which shares are issuable pursuant to the Rally Health, Inc. 2014 Equity Incentive Plan (the “ Rally Plan ”), and (iii) up to 65,196,639 newly issued shares (the “ UNH Plan Shares ”) of Common Stock, all of which shares are issuable pursuant to the UnitedHealth Group Incorporated 2011 Stock Incentive Plan, as amended and restated (the “ UNH Plan ”). This opinion letter is furnished to you at your request to enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. § 229.601(b)(5), in connection with the Registration Statement.

For purposes of this opinion letter, we have examined copies of such agreements, instruments and documents as we have deemed an appropriate basis on which to render the opinions hereinafter expressed. In our examination of the aforesaid documents, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the accuracy and completeness of all documents submitted to us, the authenticity of all original documents, and the conformity to authentic original documents of all documents submitted to us as copies (including pdfs). As to all matters of fact, we have relied on the representations and statements of fact made in the documents so reviewed, and we have not independently established the facts so relied on. This opinion letter is given, and all statements herein are made, in the context of the foregoing.

This opinion letter is based as to matters of law solely on the Delaware General Corporation Law, as amended. We express no opinion herein as to any other statutes, rules or regulations.

Based upon, subject to and limited by the foregoing, we are of the opinion that:

 

  (a)

following (i) effectiveness of the Registration Statement, (ii) issuance of the Audax Plan Shares pursuant to the terms of the Audax Plan, and (iii) receipt by the Company of the consideration for the Audax Plan Shares specified in the applicable resolutions of the Board of Directors and in the Audax Plan, the Audax Plan Shares will be validly issued, fully paid, and nonassessable;

 

  (b)

following (i) effectiveness of the Registration Statement, (ii) issuance of the Rally Plan Shares pursuant to the terms of the Rally Plan, and (iii) receipt by the Company of the consideration for the Rally Plan Shares specified in the applicable resolutions of the Board of Directors and in the Rally Plan, the Rally Plan Shares will be validly issued, fully paid, and nonassessable; and

 

  (c)

following (i) effectiveness of the Registration Statement, (ii) issuance of the UNH Plan Shares pursuant to the terms of the UNH Plan, and (iii) receipt by the Company of the consideration for the UNH Plan Shares specified in the applicable resolutions of the Board of Directors and in the UNH Plan, the UNH Plan Shares will be validly issued, fully paid, and nonassessable.

This opinion letter has been prepared for use in connection with the Registration Statement. We assume no obligation to advise of any changes in the foregoing subsequent to the effective date of the Registration Statement.

We hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement. In giving this consent, we do not thereby admit that we are an “expert” within the meaning of the Securities Act of 1933, as amended.

Very truly yours,

/s/  Hogan Lovells US LLP

HOGAN LOVELLS US LLP

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Post-Effective Amendment No. 1 to Registration Statement No. 333-205826 on Form S-8 of our reports dated February 8, 2017, relating to the consolidated financial statements and consolidated financial statement schedule of UnitedHealth Group Incorporated and subsidiaries and the effectiveness of UnitedHealth Group Incorporated and subsidiaries’ internal control over financial reporting, appearing in the Annual Report on Form 10-K of UnitedHealth Group Incorporated for the year ended December 31, 2016.

/s/ Deloitte & Touche LLP

Minneapolis, MN

February 15, 2017