EXHIBIT 10.39

 

RESTRICTED STOCK AGREEMENT

 

THIS RESTRICTED STOCK AGREEMENT (the “Agreement”) is made this              day
of              by and among The TriZetto Group, Inc., a Delaware corporation
(the “Company”), and              (the “Grantee”).

 

RECITALS

 

A. WHEREAS, the Company desires to grant shares of its common stock to Grantee
to encourage the continued service of Grantee as an employee of the Company,
which service is of benefit to the Company;

 

B. WHEREAS, the Company desires to impose certain restrictions on the shares of
common stock granted hereunder for the benefit of the Company; and

 

C. WHEREAS, such grant is being made to Grantee in addition to, and not in lieu
of, any other form of compensation otherwise payable or to be paid to Grantee.

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:

 

1. Grant of Shares. The Company hereby grants and delivers to Grantee
             shares of its common stock (the “Shares”), subject to the terms and
conditions set forth herein.

 

2. Vesting of Shares.

 

2.1 The Shares granted hereunder shall vest and become “Vested Shares” in
             equal annual installments commencing on the first anniversary date
of this Agreement. Shares which have not yet become vested are herein called
“Unvested Shares.” No additional Shares shall vest after the date of termination
(“Termination Date”) of Grantee’s “Continuous Service” (as defined below).

 

2.2 Notwithstanding the foregoing, all of the Shares shall become fully vested
immediately prior to the consummation of a Change in Control (as defined in
Section 10 below), unless prior to a Change in Control the Company’s Board of
Directors determines that, upon its occurrence, the vesting of the Shares will
not accelerate or determines that only the vesting of certain Shares will be
accelerated and/or establishes a different time in respect of such Change in
Control for such acceleration.

 

2.3 As used herein, the term “Continuous Service” means so long as Grantee is an
employee of the Company. Unless otherwise determined by the Company’s Board of
Directors, a leave of absence (regardless of the reason therefor) shall be
deemed to constitute the cessation of Continuous Service as of the commencement
date of the leave.

 

2.4 In the event Grantee’s Continuous Service terminates due to death or Total
Disability (as defined herein), the Shares shall vest and become Vested Shares
on the Termination Date to the extent such Shares would have vested in the
90-day period following the Termination Date. “Total Disability” means a “total
and permanent disability” within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended (the “Code”).

 

3. Deposit of Certificates. Grantee shall deposit with the Company all
certificates evidencing the Shares together with a properly endorsed stock power
assignment. Upon written

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request from Grantee, the Company shall reissue and deliver to Grantee a new
certificate evidencing the Vested Shares, and shall reissue a certificate
evidencing the Unvested Shares as of the date thereof, which Grantee shall
deposit with the Company, together with a new properly endorsed stock power
assignment.

 

4. Cancellation of Unvested Shares upon Termination. In the event of termination
of Grantee’s Continuous Service, all Unvested Shares as of the Termination Date
shall be immediately cancelled and become null and void. The Company shall
cancel the certificates then deposited with the Company evidencing the Unvested
Shares and reissue a new certificate to Grantee evidencing only the Vested
Shares, if any, as of the Termination Date.

 

5. Restriction on Transfer. The Unvested Shares shall not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of, shall not be
assigned or transferred, directly or indirectly, and shall not be subject to
execution, attachment or similar process, and any attempted sale or other
disposition shall be null and void.

 

6. Representations and Warranties of the Company. The Company hereby represents
and warrants to Grantee as follows:

 

6.1 Authorization. All corporate action on the part of the Company, its officers
and directors necessary for the authorization, execution and delivery of this
Agreement, the performance of all obligations of the Company hereunder and the
authorization, issuance (or reservation for issuance) and delivery of the Shares
being granted hereunder has been taken or will be taken prior to the execution
of this Agreement, and this Agreement constitutes a valid and legally binding
obligation of the Company, which is enforceable in accordance with its terms.

 

6.2 Valid Issuance of Shares. The Shares which are being granted hereunder, when
issued, sold and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly and validly issued, fully paid and
nonassessable (except as set forth herein) and, based in part upon the
representations of Grantee in this Agreement, will be issued in compliance with
all applicable federal and state securities laws.

 

7. Representations and Warranties of Grantee. Grantee represents and warrants to
the Company as follows:

 

7.1 Grantee understands that the Shares will be issued by the Company without
registration under the Securities Act of 1933 (“Securities Act”) and without
qualification or registration under applicable state securities laws (“Blue Sky
Laws”) pursuant to exemptions from registration or qualification contained in
the Securities Act and in the Blue Sky Laws. Grantee understands that the Shares
must be held indefinitely unless subsequently registered or qualified under the
Securities Act and under the Blue Sky Laws or unless exemptions from the
registration or qualification requirements under the Securities Act and under
the Blue Sky Laws are available in connection with any proposed transfer of the
Shares by Grantee.

 

7.2 Grantee is acquiring the Shares solely for Grantee’s own account for
investment and not with a view to or for sale or distribution of the Shares or
any portion thereof and not with any present intention of selling, offering to
sell or otherwise disposing of or distributing the Shares or any portion
thereof. Grantee also represents that the entire legal and beneficial interest
of the Shares is being acquired for, and will be held for the account of,
Grantee only and neither in whole nor in part for any other person.

 

7.3 Grantee is sophisticated in financial matters and is able to evaluate the
risks and benefits of the investment in the Shares.

 

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7.4 Grantee has had an opportunity to ask questions and receive answers
concerning the terms and conditions of the Shares and has had full access to
such other information concerning the Company as Grantee has requested.

 

7.5 Grantee agrees that none of the Shares, nor any interest in the Shares, will
be resold or otherwise transferred by Grantee without registration or
qualification under the Securities Act and the Blue Sky Laws unless Grantee
first demonstrates to the satisfaction of the Company that specific exemptions
from such registration or qualification requirements are available with respect
to the proposed transfer and provides the Company an opinion of counsel
satisfactory to the Company that the proposed transfer may be made without
violation of the Securities Act or the Blue Sky Laws and will not affect the
exemptions relied upon by the Company in connection with the original issuance
of the Shares.

 

7.6 Grantee acknowledges that the certificates representing the Shares shall
bear the following restrictive legends:

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
1933 ACT COVERING SUCH SECURITIES OR IF TRIZETTO RECEIVES AN OPINION OF COUNSEL
FOR GRANTEE OF THESE SECURITIES REASONABLY SATISFACTORY TO TRIZETTO, STATING
THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933 ACT.

 

ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE, OR OTHER DISPOSITION OF THE SHARES OF
STOCK REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY, AND SUBJECT TO, THE
TERMS OF A RESTRICTED STOCK AGREEMENT DATED AS OF             . A COPY OF SAID
AGREEMENT IS ON FILE WITH THE SECRETARY OF THIS CORPORATION.

 

7.7 Grantee understands that the Shares are restricted securities within the
meaning of Rule 144 promulgated under the Securities Act; that the exemption
from registration under Rule 144 will not be available in any event for at least
one year from the date of grant of the Shares to Grantee, and even then will not
be available unless (i) a public trading market then exists for the Shares of
the Company, (ii) adequate current public information concerning the Company is
then available to the public, (iii) Grantee has been the beneficial owner of the
Shares at least one year prior to the sale, and (iv) other terms and conditions
of Rule 144 are complied with; and that any sale of the Shares may be made by it
only in limited amounts in accordance with such terms and conditions, as amended
from time to time.

 

7.8 Grantee understands that counsel for the Company may rely upon the foregoing
for the purposes of rendering an opinion in connection with the issuance of the
Shares. Grantee hereby agrees to indemnify the Company and its officers,
directors, agents, and counsel and hold them harmless from and against any and
all damages suffered and liabilities incurred by them (including costs of
investigation, defense, and attorneys’ fees) arising out of any breach by
Grantee of the agreements or inaccuracy in the representations and warranties
which Grantee has made herein.

 

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8. Shares Free and Clear. All Shares relinquished to the Company, or its
assignee(s), as the case may be, pursuant to this Agreement shall be delivered
by Grantee free and clear of all claims, liens and encumbrances of every nature
(except the provisions of this Agreement and any conditions concerning the
Shares relating to compliance with applicable federal or state securities laws),
and the purchaser thereof shall acquire full and complete title and right to all
of the shares, free and clear of any claims, liens and encumbrances of every
nature (again except for the provisions of this Agreement and such securities
laws).

 

9. Recapitalization. In the event that, as the result of a stock split or stock
dividend or combination of shares or any other change, or exchange for other
securities, by reclassification, or recapitalization of the Shares, Grantee
shall be entitled to new or additional or different shares of stock or
securities, such new or additional or different shares of stock or securities
shall be deemed “Shares” for the purposes of this Agreement and shall be subject
to all of the terms and conditions hereof, and the certificate or certificates
for, or other evidences of, such shares shall be imprinted with the legend
provided in Section 7.6 above.

 

10. Change in Control. For the purposes of this Agreement, “Change in Control”
means any of the following:

 

(a) Approval by the stockholders of the Company of the dissolution or
liquidation of the Company;

 

(b) Approval by the stockholders of the Company of an agreement to merge or
consolidate, or otherwise reorganize, with or into one or more entities that are
not Subsidiaries or other affiliates, as a result of which less than 50% of the
outstanding voting securities of the surviving or resulting entity immediately
after the reorganization are, or will be, owned, directly or indirectly, by
stockholders of the Company immediately before such reorganization (assuming for
purposes of such determination that there is no change in the record ownership
of the Company’s securities from the record date for such approval until such
reorganization and that such record owners hold no securities of the other
parties to such reorganization), but including in such determination any
securities of the other parties to such reorganization held by affiliates of the
Company);

 

(c) Approval by the stockholders of the Company of the sale of substantially all
of the Company’s business and/or assets to a person or entity that is not a
Subsidiary or other affiliate;

 

(d) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act but excluding any person described in and satisfying the conditions
of Rule 13d-1(b)(1) thereunder), other than a person that is a stockholder of
the Company on the date hereof, becoming the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company’s
then outstanding securities entitled to then vote generally in the election of
directors of the Company; or

 

(e) During any period not longer than two consecutive years, individuals who at
the beginning of such period constituted the Board cease to constitute at least
a majority thereof, unless the election, or the nomination for election by the
Company’s stockholders, of each new Board member was approved by a vote of at
least three-fourths of the Board members then still in office who were Board
members at the beginning of such period (including for these purposes, new
members whose election or nomination was so approved).

 

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11. No Agreement to Retain Status. Nothing in this Agreement shall be construed
to constitute or be evidence of any agreement or understanding, express or
implied, on the part of the Company to retain Grantee in his or her status as an
employee of the Company.

 

12. IRC Section 83(b) Election. Grantee acknowledges that he or she has
consulted with a tax advisor and considered the advisability of all tax
elections in connection with the grant of the Shares and the execution and
delivery of this Agreement, including the making of an election under Section
83(b) of the Code, and any similar elections under applicable federal or state
law. Grantee acknowledges that he or she is solely responsible to make any such
election and that the Company has no responsibility to make any such election.
If Grantee desires to make the election provided under Section 83(b) of the
Code, Grantee must file such election with the Internal Revenue Service within
thirty (30) days of the date of this Agreement, substantially in the form
attached as Exhibit A hereto and, if required, a comparable form of election
with applicable state taxing authorities. The parties hereto acknowledge and
agree that the total fair market value of the Shares as of the date of this
Agreement is $             per share.

 

13. Miscellaneous.

 

13.1 Notices. Any notice required or permitted to be given to a party pursuant
to the provisions of this Agreement shall be in writing and shall be effective
upon personal delivery or upon deposit in the U.S. mail, postage prepaid and
properly addressed to the party to be notified as set forth below such party’s
signature or at such other address as such party may designate by ten days’
advance written notice to the other parties hereto.

 

13.2 Stop Transfer Orders. Grantee understands and agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate “stop-transfer” instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

 

13.3 “Market Stand-Off” Agreement. Grantee agrees that, if requested by the
Company or the managing underwriter of any proposed public offering of the
Company’s securities, Grantee will not sell or otherwise transfer or dispose of
any Shares held by Grantee without the prior written consent of the Company or
such underwriter, as the case may be, during such period of time, not to exceed
180 days following the effective date of the registration statement filed by the
Company with respect to such offering, as the Company or the underwriter may
specify.

 

13.4 Successors and Assigns. This Agreement and the rights and obligations of
the parties hereunder shall inure to the benefit of, and be binding upon, their
respective permitted successors, assigns and legal representatives.

 

13.5 Severability. In the event one or more of the provisions of this Agreement
should, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.

 

13.6 Amendments and Waivers. Any amendment or modification of this Agreement
shall be effective only if evidenced by a written instrument executed by duly
authorized representatives of the parties hereto. Any party may waive its
individual rights hereunder, either prospectively or retroactively, which shall
be effective only if evidenced by a written instrument executed by a duly
authorized representative of such party. In no event shall such waiver of any
rights hereunder constitute the waiver of such rights in any future instance
unless the waiver so specifies in writing.

 

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13.7 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.

 

13.8 Attorneys’ Fees. If any party shall bring an action in law or equity
against another to enforce or interpret any of the terms, covenants and
provisions of this Agreement, the prevailing party in such action shall be
entitled to reasonable attorneys’ fees, which the other party hereby agrees to
pay.

 

13.9 Entire Agreement. This Agreement constitutes the entire agreement between
the parties pertaining to its subject matter and supersedes all prior or
contemporaneous written or oral agreements and understandings of the parties,
either express or implied.

 

13.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original but all of which together shall constitute one
instrument.

 

IN WITNESS WHEREOF, the parties have executed this Restricted Stock Agreement as
of the day and first above written.

 

   

COMPANY:

 

THE TRIZETTO GROUP, INC.

   

 

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Name:

 

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Address:

 

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HOLDER:

   

 

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Name:

 

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EXHIBIT A

 

 

Internal Revenue Service Center

5104 N. Blyth

Fresno, California 93722

 

  Re:   Election Under Section 83(b) of the Internal Revenue Code

 

Dear Sir or Madam:

 

The undersigned performed services in connection with which property was
transferred to the undersigned that, at the time of transfer, was not
transferable by the undersigned and was subject to a substantial risk of
forfeiture. The undersigned hereby makes this election pursuant to Section 83(b)
of the Internal Revenue Code.

 

In connection with this election, the undersigned hereby provides you with the
following information:

 

1. The undersigned’s name, address, social security number, and taxable year are
as follows:

 

Name and Address:

  

 

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Social Security No.:

  

 

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Taxable Year:

  

 

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2. A description of the property with respect to which the election is being
made:

 

             shares of Common Stock, $.001 par value per share, (the “Shares”),
of The TriZetto Group, Inc., a Delaware corporation (the “Company”).

 

3. The date on which the property was transferred:

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4. A description of the nature of the restrictions to which the property is
subject:

 

The Company may cancel all or a portion of the Shares from the undersigned in
accordance with the terms of a Restricted Stock Agreement between the
undersigned and the Company. In the event the undersigned should cease to be a
service provider to the Company at any time, the unvested Shares will be
cancelled by the Company. The Shares will vest in              equal annual
installments commencing on the first anniversary date of the Restricted Stock
Agreement.

 

5. The fair market value at the time of transfer (determined without regard to
any restriction other than a restriction which by its terms will never lapse) of
the property with respect to which the election is being made: $             per
share, which results in an aggregate fair market value of $            .

 

6. The amount paid for such property: $0.

 

There are enclosed herewith two copies of this written statement for filing.
Please stamp the third copy enclosed herewith as having been received and return
it to the undersigned in the enclosed, self-addressed, postage-paid envelope.

 

The undersigned has also submitted a copy of this statement to the person for
whom the services were performed.

 

Very truly yours,

 

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STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers an
aggregate of                                (            ) shares of Common
Stock of The TriZetto Group, Inc., a Delaware corporation (the “Company”),
standing in the undersigned’s name on the books of said Company represented by
Certificate No.             .

 

The undersigned further does hereby irrevocably constitute and appoint
                             as its attorney-in-fact, with full power of
substitution, to transfer said stock on the books of the Company.

 

Dated:

  

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Name:

  

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