EX-10.1 2004 NON-QUALIFIED STOCK OPTION PLAN / DAK



 





Exhibit 10.1




WEBMD CORPORATION

2004 NON-QUALIFIED STOCK OPTION PLAN

FOR EMPLOYEES OF DAKOTA IMAGING, INC.




ARTICLE 1




Purpose





	1.1	 	General. The purpose of the WebMD Corporation 2004 Non-Qualified Stock
Option Plan for Employees of Dakota Imaging, Inc. (the “Plan”) is to
induce employees of Dakota Imaging, Inc. (“Dakota”) to remain employees of
Dakota following the acquisition by Envoy Corporation, a wholly-owned
subsidiary of WebMD Corporation (the “Corporation”), of Dakota pursuant to
the Agreement and Plan of Merger dated as of April 5, 2004 (the “Merger
Agreement”) and to motivate such employees to promote the success, and
enhance the value, of the Corporation, by linking the personal interests
of such employees to those of Corporation shareholders and by providing
such employees with an incentive for outstanding performance.




ARTICLE 2




Effective Date





	2.1	 	Effective Date. The Plan shall be effective as of April 19, 2004 the date
upon which it was approved by the Board (the “Effective Date”); provided,
however, that in the event the closing of the transactions contemplated by
the Merger Agreement does not occur, this Plan shall be null, void and of
no further force and effect.




ARTICLE 3




Definitions





	3.1	 	Definitions. When a word or phrase appears in this Plan with the initial
letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in
this Section or in Section 1.1 unless a clearly different meaning is
required by the context. The following words and phrases shall have the
following meanings:





	 	(a)	 	“Board” means the Board of Directors of the Corporation.
	 
	 	(b)	 	“Cause” as a reason for a Participant’s termination of employment
shall have the meaning assigned such term in the employment agreement, if
any, between such Participant and the Corporation or an affiliated
company, provided, however that if there



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	 	 	 	is no such employment agreement in which such term is defined, “Cause”
shall mean any of the following acts by the Participant, as determined by
the Corporation: gross neglect of duty, prolonged absence from duty
without the consent of the Corporation, intentionally engaging in any
activity that is in conflict with or adverse to the business or other
interests of the Corporation, willful misconduct, misfeasance or
malfeasance of duty which is reasonably determined to be detrimental to
the Corporation or breach of any restrictive covenant set forth in an
Option Agreement or any substantially similar provisions in any other
agreements with the Corporation or any of its subsidiaries.





	 	(c)	 	“Code” means the Internal Revenue Code of 1986, as amended from time
to time.
	 
	 	(d)	 	“Committee” means the committee described in Article 4.
	 
	 	(e)	 	“Corporation” has the meaning specified in Article 1.
	 
	 	(f)	 	“Dakota” has the meaning specified in Article 1.
	 
	 	(g)	 	“Effective Date” has the meaning assigned such term in Section 2.1.
	 
	 	(h)	 	“Eligible Persons” has the meaning assigned to such term in Section
6.1.
	 
	 	(i)	 	“Fair Market Value”, on any date, means (i) if the Stock is listed
on a securities exchange or is traded over the NASDAQ National Market,
the closing sales price on such exchange or over such system on such date
or, in the absence of reported sales on such date, the closing sales
price on the immediately preceding date on which sales were reported, or
(ii) if the Stock is not listed on a securities exchange or traded over
the NASDAQ National Market, the mean between the bid and offered prices
as quoted by NASDAQ for such date, provided that if it is determined that
the fair market value is not properly reflected by such NASDAQ
quotations, Fair Market Value will be determined by such other method as
the Committee determines in good faith to be reasonable.
	 
	 	(j)	 	“Merger Agreement” has the meaning specified in Article 1.
	 
	 	(k)	 	“Option” means a right granted to a Participant under Article 7 of
the Plan to purchase Stock at a specified price during specified time
periods. The Options to be granted hereunder are not intended to qualify
as “incentive stock options” within the meaning of Section 422 of the
Code or any successor provision.
	 
	 	(l)	 	“Option Agreement” means any written agreement, contract, or other
instrument or document evidencing an Option.
	 
	 	(m)	 	“Parent” means a corporation which owns or beneficially owns a
majority of the outstanding voting stock or voting power of the
Corporation.
	 
	 	(n)	 	“Participant” means a person who, as an employee of the Corporation
or any Parent or Subsidiary, has been granted an Option under the Plan.



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	 	(o)	 	“Permanent Disability” means Permanent Disability (or equivalent
definition) as defined in an employment agreement between Participant and
the Corporation or one of its Subsidiaries or in the event that the
Participant is not party to an employment agreement that defines
“Permanent Disability,” the Participant shall be deemed Permanently
Disabled if such person has been deemed “disabled” by the Corporation’s
long term disability insurance carrier.
	 
	 	(p)	 	“Plan” means the WebMD Corporation 2004 Non-Qualified Stock Option
Plan for Employees of Dakota Imaging, Inc., as amended from time to time.
	 
	 	(q)	 	“Stock” means the $.0001 par value common stock of the Corporation
and such other securities of the Corporation as may be substituted for
Stock pursuant to Article 9.1.
	 
	 	(r)	 	“Subsidiary” means any corporation, limited liability company,
partnership or other entity of which a majority of the outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Corporation.
	 
	 	(s)	 	“1933 Act” means the Securities Act of 1933, as amended from time to
time.
	 
	 	(t)	 	“1934 Act” means the Securities Exchange Act of 1934, as amended
from time to time.




ARTICLE 4




Administration





	4.1	 	Committee. The Plan shall be administered by the Compensation Committee
of the Board (the “Committee”) or, at the discretion of the Board from
time to time, the Plan may be administered by the Board. It is intended
that the directors appointed to serve on the Committee shall be
“non-employee directors” (within the meaning of Rule 16b-3 promulgated
under the 1934 Act) and “outside directors” (within the meaning of Code
Section 162(m) and the regulations thereunder) to the extent that Rule
16b-3 and, if necessary for relief from the limitation under Code Section
162(m) and such relief is sought by the Corporation, Code Section 162(m),
respectively, are applicable. However, the mere fact that a Committee
member shall fail to qualify under either of the foregoing requirements
shall not invalidate any Option made by the Committee which Option is
otherwise validly made under the Plan. The members of the Committee shall
be appointed by, and may be changed at any time and from time to time in
the discretion of, the Board. During any time that the Board is acting as
administrator of the Plan, it shall have all the powers of the Committee
hereunder, and any reference herein to the Committee (other than in this
Section 4.1) shall include the Board.
	 
	4.2	 	Action by the Committee. For purposes of administering the Plan, the
following rules of procedure shall govern the Committee. A majority of the
Committee shall constitute a quorum. The acts of a majority of the members
present at any meeting at which a quorum



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	 	 	is present, and acts approved unanimously in writing by the members of
the Committee in lieu of a meeting, shall be deemed the acts of the
Committee. Each member of the Committee is entitled to, in good faith,
rely or act upon any report or other information furnished to that member
by any officer or other employee of the Corporation or any Parent or
Subsidiary, the Corporation’s independent certified public accountants,
or any executive compensation consultant or other professional retained
by the Corporation to assist in the administration of the Plan.





	4.3	 	Authority of Committee. Except as provided below, the Committee has the
exclusive power, authority and discretion to:





	 	(a)	 	Designate Participants;
	 
	 	(b)	 	Determine the number of shares of Stock to which an Option will
relate;
	 
	 	(c)	 	Determine the terms and conditions of any Option granted under the
Plan, including but not limited to, the exercise price, the term of the
Option, any restrictions or limitations on the Option, any schedule for
lapse of restrictions on the exercisability of an Option, and
accelerations or waivers thereof, based in each case on such
considerations as the Committee in its sole discretion determines;
	 
	 	(d)	 	Accelerate the vesting of any outstanding Option, based in each case
on such considerations as the Committee in its sole discretion
determines;
	 
	 	(e)	 	Prescribe the form of each Option Agreement, which need not be
identical for each Participant;
	 
	 	(f)	 	Decide all other matters that must be determined in connection with
an Option;
	 
	 	(g)	 	Establish, adopt or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan;
	 
	 	(h)	 	Make all other decisions and determinations that may be required
under the Plan or as the Committee deems necessary or advisable to
administer the Plan; and
	 
	 	(i)	 	Amend the Plan or any Option Agreement as provided herein.





	 	 	Notwithstanding the above, the Board or the Committee may, subject to
applicable law and rules and regulations of NASDAQ, expressly delegate to
a special committee consisting of one or more officers of the Corporation
some or all of the Committee’s authority set forth above with respect to
those eligible Participants, who at the time of grant are not, and are
not anticipated to become, either (i) Covered Employees or (ii) persons
subject to Section 16 of the 1934 Act, provided that such delegation is
in accordance with Section 157 of the Delaware General Corporation Law.








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	4.4	 	Decisions Binding. The Committee’s interpretation of the Plan, any Option
granted under the Plan, any Option Agreement and all decisions and
determinations by the Committee with respect to the Plan are final,
binding, and conclusive on all parties.




ARTICLE 5




Shares Subject to the Plan





	5.1	 	Number of Shares. Subject to adjustment as provided in Section 9.1, the
aggregate number of shares of Stock reserved and available for Options
shall be 2.0 million shares.
	 
	5.2	 	Lapsed Options. To the extent that an Option is canceled, terminates,
expires, is forfeited or lapses for any reason, any shares of Stock
subject to the Option will again be available for the grant of an Option
under the Plan to an Eligible Person (as defined in Section 6.1 below).
	 
	5.3	 	Stock Distributed. Any Stock issued pursuant to an Option may consist, in
whole or in part, of authorized and unissued Stock, treasury Stock or
Stock purchased on the open market.
	 
	5.4	 	Limitation on Options. Notwithstanding any provision in the Plan to the
contrary (but subject to adjustment as provided in Section 9.1), the
maximum number of shares of Stock with respect to one or more Options that
may be granted during any one calendar year under the Plan to any one
Participant shall be 500,000.




ARTICLE 6




Eligibility





	6.1	 	General. Options may be granted only to individuals who are employees of
Dakota at the time of the closing of the transaction contemplated by the
Merger Agreement in order to induce them to remain in the employ of Dakota
following such transaction; provided, however, that no person who is
subject to Section 16(a) of the Exchange Act shall be eligible for an
Option hereunder (“Eligible Persons”).




ARTICLE 7




TERMS OF STOCK OPTION





	7.1	 	General. The Committee is authorized to grant Options to Participants on
the following terms and conditions:








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	 	(a)	 	Exercise Price. The exercise price per share of Stock under
an Option shall be determined by the Committee but shall not be
less than 100 percent of the Fair Market Value on the date of
grant.
	 
	 	(b)	 	Time and Conditions of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part, subject to Section 7.1(e). The Committee also
shall determine the performance or other conditions, if any, that
must be satisfied before all or part of an Option may be exercised.
The Committee may waive any exercise provisions at any time in
whole or in part based upon factors as the Committee may determine
in its sole discretion so that the Option becomes exercisable at an
earlier date. Unless the Option Agreement states otherwise, an
Option shall vest in the following manner: 25% per year commencing
on the first anniversary of the date of grant.
	 
	 	(c)	 	Payment. The Committee shall determine the methods by which
the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, shares of Stock, or other
property (including “cashless exercise” arrangements through a
broker), and the methods by which shares of Stock shall be
delivered or deemed to be delivered to Participants; provided,
however, that if shares of Stock are used to pay the exercise price
of an Option, such shares must have been held by the Participant
for at least six months.
	 
	 	(d)	 	Evidence of Grant. All Options shall be evidenced by a
written Option Agreement, substantially in a form attached hereto
as Exhibit A, between the Corporation and the Participant. Any such
Option Agreement may include such other provisions, not
inconsistent with the Plan, as may be specified by the Committee.
	 
	 	(e)	 	Exercise Term. In no event may any Option be exercisable
for more than ten years from the date of its grant.
	 
	 	(f)	 	Termination of Employment.





	 	(1)	 	In the event that a Participant’s employment with the
Corporation or any of its Subsidiaries or Parents terminates for any
reason (other than Cause), the Participant (or the Participant’s
estate) shall, unless otherwise provided in the applicable Option
Agreement, be entitled to exercise the Participant’s Options which
have become vested as of the date of termination for a period of 90
days (one year in the event of death or Permanent Disability)
following the date of termination.
	 
	 	(2)	 	In the event that a Participant’s employment with the
Corporation or any of its Subsidiaries or Parents terminates for any
reason, any Options which have not become vested as of the date of
termination (the “Date of Termination” ) shall, unless otherwise
provided in the applicable Option Agreement, terminate and be
cancelled without any consideration being paid therefor. In the
event that a Participant’s employment is terminated by the
Corporation, or a Subsidiary or Parent for Cause, all of such
Participant’s Options (including the vested portion)



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	 	 	 	shall, unless otherwise provided in the applicable Option Agreement,
terminate and be cancelled without any consideration being paid
therefor.




ARTICLE 8




Miscellaneous





	8.1	 	Limits on Transfer. No right or interest of a Participant in any
unexercised Option may be pledged, encumbered, or hypothecated to or in
favor of any party other than the Corporation or a Parent or Subsidiary,
or shall be subject to any lien, obligation, or liability of such
Participant to any other party other than the Corporation or a Parent or
Subsidiary. No unexercised or restricted Option shall be assignable or
transferable by a Participant other than by will or the laws of descent
and distribution or, pursuant to a domestic relations order that would
satisfy Section 414(p)(1)(A) of the Code if such Section applied to an
Option under the Plan; provided, however, that the Committee may (but need
not) permit other transfers where the Committee concludes that such
transferability (i) does not result in accelerated taxation, and (ii) is
otherwise appropriate and desirable, taking into account any factors
deemed relevant, including without limitation, state or federal tax or
securities laws applicable to transferable Options.
	 
	8.2	 	Beneficiaries. A Participant may, in the manner determined by the
Committee, designate a beneficiary to exercise the rights of the
Participant and to receive any distribution with respect to any Option
upon the Participant’s death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is
subject to all terms and conditions of the Plan and any Option Agreement
applicable to the Participant, except to the extent the Plan and Option
Agreement otherwise provide, and to any additional restrictions deemed
necessary or appropriate by the Committee. If no beneficiary has been
designated or survives the Participant, payment shall be made to the
Participant’s estate. Subject to the foregoing, a beneficiary designation
may be changed or revoked by a Participant at any time provided the change
or revocation is filed with the Committee.
	 
	8.3	 	Stock Certificates. All Stock issuable under the Plan are subject to any
stop-transfer orders and other restrictions as the Committee deems
necessary or advisable to comply with federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or
traded. The Committee may place legends on any Stock certificate or issue
instructions to the transfer agent to reference restrictions applicable to
the Stock.
	 
	8.4	 	Termination of Employment. Whether military, government or other service
or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and
any determination by the Committee shall be final and conclusive. A
termination of employment shall not occur (i) in a circumstance in which a
Participant transfers from the Corporation to one of its Parents or
Subsidiaries, transfers from a Parent or Subsidiary to the Corporation, or
transfers from one Parent or



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	 	 	Subsidiary to another Parent or Subsidiary, or (ii) in the discretion of
the Committee as specified at or prior to such occurrence, in the case of
a spin-off, sale or other disposition of the Participant’s employer from
the Corporation or any Parent or Subsidiary.




ARTICLE 9




Changes in Capital Structure





	9.1	 	General. In the event of a corporate transaction involving the
Corporation (including, without limitation, any stock dividend, stock
split, extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination or exchange of shares), the authorization limits under Section 5.1 and 5.4 shall be
adjusted proportionately, and the Committee may adjust Options to preserve
the benefits or potential benefits of the Options. Action by the Committee
may include: (i) adjustment of the number and kind of shares which may be
delivered under the Plan; (ii) adjustment of the number and kind of shares
subject to outstanding Options; (iii) adjustment of the exercise price of
outstanding Options; and (iv) any other adjustments that the Committee
determines to be equitable. Without limiting the foregoing, in the event a
stock dividend or stock split is declared upon the Stock, the
authorization limits under Section 5.1 and 5.4 shall be increased
proportionately, and the shares of Stock then subject to each Option shall
be increased proportionately without any change in the aggregate purchase
price therefor.




ARTICLE 10




Amendment, Modification and Termination





	10.1	 	Amendment, Modification and Termination. The Board or the Committee may,
at any time and from time to time, amend, modify or terminate the Plan
without shareholder approval; provided, however, that the Board or
Committee may condition any amendment or modification on the approval of
shareholders of the Corporation if such approval is necessary or deemed
advisable with respect to tax, securities or other applicable laws,
policies or regulations.
	 
	10.2	 	Options Previously Granted. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Option without
approval of the Participant; provided, however, that, subject to the terms
of the applicable Option Agreement, such amendment, modification or
termination shall not, without the Participant’s consent, reduce or
diminish the value of such Option and provided further that the original
term of any Option may not be extended. No termination, amendment, or
modification of the Plan shall adversely affect any Option previously
granted under the Plan, without the written consent of the Participant.




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ARTICLE 11




General Provisions





	11.1	 	No Rights to Options. No Participant or any Eligible Person shall have
any claim to be granted any Option under the Plan, and neither the
Corporation nor the Committee is obligated to treat Participants or
Eligible Persons uniformly.
	 
	11.2	 	No Stockholder Rights. No Option gives the Participant any of the rights
of a shareholder of the Corporation unless and until shares of Stock are
in fact issued to such person in connection with the exercise of such
Option.
	 
	11.3	 	Withholding. The Corporation or any Parent or Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to
remit to the Corporation, an amount sufficient to satisfy federal, state,
and local taxes (including the Participant’s FICA obligation) required by
law to be withheld with respect to any taxable event arising as a result
of the Plan. With respect to withholding required upon any taxable event
under the Plan, the Committee may, at the time the Option is granted or
thereafter, require or permit that any such withholding requirement be
satisfied, in whole or in part, by withholding from the Option shares of
Stock having a Fair Market Value on the date of withholding equal to the
minimum amount (and not any greater amount) required to be withheld for
tax purposes, all in accordance with such procedures as the Committee
establishes.
	 
	11.4	 	No Right to Continued Service. Nothing in the Plan or any Option
Agreement shall interfere with or limit in any way the right of the
Corporation or any Parent or Subsidiary to terminate any Participant’s
employment at any time, nor confer upon any Participant any right to
continue as an employee of the Corporation or any Parent or Subsidiary.
	 
	11.5	 	Unfunded Status of Options. The Plan is intended to be an “unfunded” plan
for incentive and deferred compensation. With respect to any payments not
yet made to a Participant pursuant to an Option, nothing contained in the
Plan or any Option Agreement shall give the Participant any rights that
are greater than those of a general creditor of the Corporation or any
Parent or Subsidiary.
	 
	11.6	 	Indemnification. To the extent allowable under applicable law, each
member of the Committee shall be indemnified and held harmless by the
Corporation from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting
from any claim, action, suit, or proceeding to which such member may be a
party or in which he may be involved by reason of any action or failure to
act under the Plan and against and from any and all amounts paid by such
member in satisfaction of judgment in such action, suit, or proceeding
against him provided he gives the Corporation an opportunity, at its own
expense, to handle and defend the same before he undertakes to handle and
defend it on his own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Corporation’s



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	 	 	Certificate of Incorporation or Bylaws, as a matter of law, or otherwise,
or any power that the Corporation may have to indemnify them or hold them
harmless.
	 
	11.7	 	Relationship to Other Benefits. No payment under the Plan shall be taken
into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the
Corporation or any Parent or Subsidiary unless provided otherwise in such
other plan.
	 
	11.8	 	Expenses. The expenses of administering the Plan shall be borne by the
Corporation and its Parents or Subsidiaries.
	 
	11.9	 	Titles and Headings. The titles and headings of the Sections in the Plan
are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
	 
	11.10	 	Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural
shall include the singular and the singular shall include the plural.
	 
	11.11	 	Fractional Shares. No fractional shares of Stock shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given
in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up.
	 
	11.12	 	Government and Other Regulations. The obligation of the Corporation to
make payment of Options in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by
government agencies as may be required. The Corporation shall be under no
obligation to register under the 1933 Act, or any state securities act,
any of the shares of Stock issued in connection with the Plan. The shares
issued in connection with the Plan may in certain circumstances be exempt
from registration under the 1933 Act, and the Corporation may restrict the
transfer of such shares in such manner as it deems advisable to ensure the
availability of any such exemption.
	 
	11.13	 	Governing Law. To the extent not governed by federal law, the Plan and
all Option Agreements shall be construed in accordance with and governed
by the laws of the State of Delaware.
	 
	11.14	 	Additional Provisions. Each Option Agreement may contain such other
terms and conditions as the Committee may determine; provided that such
other terms and conditions are not inconsistent with the provisions of
this Plan.




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Exhibit A





		
	[Note: 	Items in brackets may be omitted if substantially the same provisions are contained in an Employment Agreement.]





WebMD Corporation

Non-Qualified Stock Option Agreement




	 	 	 
	

	 	Optionee:
	[Name]

	 	Grant Date:
	[Address]

	 	Grant Number:
	

	 	Shares Granted:
	

	 	Stock Option Price:






We are pleased to inform you that the Compensation Committee (the “Committee”)
of the Board of Directors of WebMD Corporation (the “Company”) or its designee
has granted you an option to purchase that number of shares of the Company’s
common stock set forth above at the per share exercise price set forth above.
Your grant has been made under the Company’s 2004 Non-Qualified Stock Option
Plan for Employees of Dakota Imaging, Inc. (as it may be amended from time to
time, the “Plan”), which together with the terms contained in this Agreement,
sets forth the terms and conditions of your grant and is incorporated herein by
reference. In the event any terms set forth herein conflict with the terms as
set forth in the Plan, the terms of the Plan shall govern. A copy of the Plan
is available on the Company’s intranet site. Please review it carefully.
Capitalized terms used herein without definition will have the meanings
assigned to them in the Plan.




Vesting/Term:


Subject to the terms of the Plan and this Agreement, shares will vest in four
equal annual installments, commencing on the first anniversary of the Grant
Date (full vesting on the fourth anniversary of the Grant Date). Subject to
earlier expiration in the event of the termination of your employment with the
Company for any reason (as more fully described below), this Option will expire
on the tenth anniversary of the Grant Date. The date on which this Option
expires pursuant to this Agreement is referred to herein as the “Expiration
Date”.




Exercise:


You may exercise this Option, in whole or in part, to purchase a whole number
of vested shares at any time, by following the exercise procedures set up by
the Committee. All exercises must take place before the Expiration Date. The
number of shares you may purchase as of any date cannot exceed the total number
of shares vested by that date, less any shares you have previously acquired by
exercising this Option.




Restrictions on Exercise:


This Option may not be exercised if such exercise would violate any provision
of applicable federal or state securities law, or other law or regulation or
the Company’s employee trading policy.




Restrictive Covenants:


In the event that you breach any restrictive covenants to which you are bound
[(including, without limitation, those set forth on Annex A )], in addition to
any other remedy available to the Company, the Option, whether or not vested,
will immediately terminate without any notice or consideration being paid
therefore. [By signing below, you acknowledge the representations and agree to
the covenants set forth on Annex A. The covenants on Annex A do not supersede
or replace any other confidentiality, non-competition or non-solicitation
agreement entered into between you and the Company (or subsidiary thereof) to
the extent that such confidentiality, non-competition and/or non-solicitation
agreement is more protective of the business of the Company and/or its
subsidiaries.]




Termination Provisions:


In the event of the termination of your employment with the Company and its
Subsidiaries for any reason, all further vesting of shares under this Option
will stop, and this Option will be cancelled as to any unvested shares without
any consideration being paid. If your employment is terminated without Cause
or you resign, you will have 90 days to exercise this Option as to any


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shares that have vested as of the date of termination, except that in the event
of your death or Permanent Disability, you or your estate will have a period of
one year to exercise. If your employment is terminated for Cause [(including
as a result of a breach of the covenants or representations set forth on Annex
A)], this Option will expire immediately as to all vested and unvested shares
without any consideration being paid. IF YOU DO NOT EXERCISE THE VESTED
PORTION OF THIS OPTION ON OR BEFORE THE EXPIRATION DATE, THIS OPTION WILL
EXPIRE WITHOUT ANY CONSIDERATION BEING PAID.




No Rights to Grants or Continued Employment:


You shall not have any claim or right to receive grants of Options under the
Plan. Neither the Plan nor this Agreement nor any action taken or omitted to
be taken hereunder or thereunder shall be deemed to create or confer on you any
right to be retained in the employ or service of the Company or any of its
subsidiaries or affiliates, or to interfere with or to limit in any way the
right of the Company or any of its subsidiaries or affiliates to terminate your
employment at any time. You shall have no rights in the benefits conferred by
this Option or in any shares except to the extent the Option is exercised while
vested and exercisable and otherwise in accordance with the terms of this
Agreement. Termination of the Option by reason of cessation of employment
shall not give rise to any claim for damages by you under this Agreement and
shall be without prejudice to any rights or remedies which the Company or any
of its subsidiaries or affiliates may have against you.




Taxes and Withholding:


This Option is not intended to be an Incentive Stock Option, as defined under
Section 422(b) of the Internal Revenue Code of 1986, as amended. Any exercise
of this Option is generally a taxable event, and if the Company determines that
any federal, state, local or foreign tax or withholding payment is required
relating to the exercise or sale of sales arising from this grant, the Company
shall have the right to require such payments from you, or withhold such
amounts from other payments due to you from the Company.




Set-off:


If at any time you are indebted to the Company or any subsidiary, the Company
may in its discretion (a) withhold (i) shares issuable to you following your
exercise of the Option (or portion thereof) having a fair market value on the
date of exercise up to the amount of such indebtedness or (ii) amounts due to
you in connection with the sale of the shares acquired as a result of the
exercise of this Option (or portion thereof) up to the amount of such
indebtedness or (b) take any substantially similar action.




Governing Law:


This Option shall be governed by, and interpreted and enforced in accordance
with, the laws of the State of Delaware, without regard to the conflicts of law
provisions thereof.



	 	 	 	 	 
	WEBMD CORPORATION	Agreed and Accepted:
	 	 	 	 	 
	By:	 	 	Optionee:	 
	 	 	 	 	 
	Title:	 	 	Print Name:	 
	 	Address:	 
	 	 	 






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[(ANNEX A TO WEBMD CORPORATION’S

NON-QUALIFIED STOCK OPTION AGREEMENT)




TRADE SECRET AND PROPRIETARY INFORMATION COVENANTS



1.   Confidentiality.




     (a) Trade Secret and Proprietary Information. I understand and
acknowledge that, during the course of my employment with WebMD Corporation
and/or its subsidiaries (collectively, the “Company”) and as a result of my
having executed this Non-Qualified Stock Option Agreement, I will be granted
access to valuable information relating to the Company’s business that provides
the Company with a competitive advantage (or that could be used to the
Company’s disadvantage by a Competitive Business (as defined herein), which is
not generally known by, nor easily learned or determined by, persons outside
the Company (collectively “Trade Secret and Proprietary Information”). The
term Trade Secret and Proprietary Information shall include, but shall not be
limited to: (a) specifications, manuals, software in various stages of
development; (b) customer and prospect lists, and details of agreements and
communications with customers and prospects; (c) sales plans and projections,
product pricing information, acquisition, expansion, marketing, financial and
other business information and existing and future products and business plans
of the Company; (d) sales proposals, demonstrations systems, sales material;
(e) research and development; (f) computer programs; (g) sources of supply; (h)
identity of specialized consultants and contractors and Trade Secret and
Proprietary Information developed by them for the Company; (i) purchasing,
operating and other cost data; (j) special customer needs, cost and pricing
data; (k) patient information, including, without limitation, Protected Health
Information as defined in 45 C.F.R. 164.501 and (l) employee information
(including, but not limited to, personnel, payroll, compensation and benefit
data and plans), including all such information recorded in manuals, memoranda,
projections, reports, minutes, plans, drawings, sketches, designs, formula
books, data, specifications, software programs and records, whether or not
legended or otherwise identified by the Company as Trade Secret and Proprietary
Information, as well as such information that is the subject of meetings and
discussions and not recorded. Trade Secret and Proprietary Information shall
not include such information that I can demonstrate (i) is generally available
to the public (other than as a result of a disclosure by me), (ii) was
disclosed to me by a third party under no obligation to keep such information
confidential or (iii) was known by me prior to, and not as a result of, my
employment or anticipated employment with the Company.



     (b) Duty of Confidentiality. I agree at all times, both during and after
my employment with the Company, to hold all of the Company’s Trade Secret and
Proprietary Information in a fiduciary capacity for the benefit of the Company
and to safeguard all such Trade Secret and Proprietary Information. I also
agree that I will not directly or indirectly disclose or use any such Trade
Secret and Proprietary Information to any third person or entity outside the
Company, except as may be necessary in the good faith performance of my duties
for the Company. I further agree that, in addition to enforcing this
restriction, the Company may have other rights and remedies under the common
law or applicable statutory laws relating to the protection of trade secrets.
Notwithstanding anything in this Agreement to the contrary, I understand that I
may disclose the Company’s Trade Secret and Proprietary Information to the
extent required by applicable laws or governmental regulations or judicial or
regulatory process, provided that I give the Company prompt notice of any and
all such requests for disclosure so that it has ample opportunity to take all
necessary or desired action, to avoid disclosure.



     (c) Company Property. I acknowledge that: (i) all Trade Secret and
Proprietary Information of the Company, (ii) computers, and computer-related
hardware and software, cell phones, beepers and any other equipment provided to
me by the Company, and (iii) all documents I create or receive in connection
with my employment with the Company, belong to the Company, and not to me
personally (collectively, “Company Property”). Such documents include, without
limitation and by way of non-exhaustive example only: papers, files, memoranda,
notes, correspondence, lists, e-mails, reports, records, data, research,
proposals, specifications, models, flow charts, schematics, tapes, printouts,
designs, graphics, drawings, photographs, abstracts, summaries, charts, graphs,
notebooks, investor lists, customer/client lists, and all other compilations of
information, regardless of how such information may be recorded and whether in
printed form or on a computer or magnetic disk or in any other medium. I agree
to return all Company Property (including all copies) to the Company
immediately upon any



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termination of my employment, and further agree that, during and after my
employment with the Company, I will not, under any circumstances, without the
Company’s specific written authorization in each instance, directly or
indirectly disclose Company Property or any information contained in Company
Property to anyone outside the Company, or otherwise use Company Property for
any purpose other than the advancement of the Company’s interests.



     (d) Unfair Competition. I acknowledge that the Company has a compelling
business interest in preventing unfair competition stemming from the
intentional or inadvertent use or disclosure of the Company’s Trade Secret and
Proprietary Information and Company Property.



     (e) Investors, Other Third-Parties, and Goodwill. I acknowledge that all
Third-Parties I service or propose to service while employed by the Company are
doing business with the Company and not me personally, and that, in the course
of dealing with such Third-Parties, the Company establishes goodwill with
respect to each such Third-Party that is created and maintained at the
Company’s expense (“Third-Party Goodwill”). I also acknowledge that, by virtue
of my employment with the Company, I have gained or will gain knowledge of the
business needs of, and other information concerning, Third-Parties, and that I
would inevitably have to draw on such information were I to solicit or service
any of the Third-Parties on my own behalf or on behalf of a Competitive
Business (as defined herein).



     (f) Intellectual Property and Inventions. I acknowledge that all
developments, including, without limitation, the creation of new products,
conferences, training/seminars, publications, programs, methods of organizing
information, inventions, discoveries, concepts, ideas, improvements, patents,
trademarks, trade names, copyrights, trade secrets, designs, works, reports,
computer software, flow charts, diagrams, procedures, data, documentation, and
writings and applications thereof relating to the past, present, or future
business of the Company that I, alone or jointly with others, may have
discovered, conceived, created, made, developed, reduced to practice, or
acquired during my employment with the Company (collectively, “Developments”)
are works made for hire and shall remain the sole and exclusive property of the
Company, and I hereby assign to the Company all of my rights, titles, and
interest in and to all such Developments, if any. I agree to disclose to the
Company promptly and fully all future Developments and, at any time upon
request and at the expense of the Company, to execute, acknowledge, and deliver
to the Company all instruments that the Company shall prepare, to give
evidence, and to take any and all other actions that are necessary or desirable
in the reasonable opinion of the Company to enable the Company to file and
prosecute applications for, and to acquire, maintain, and enforce, all letters
patent, trademark registrations, or copyrights covering the Developments in all
countries in which the same are deemed necessary by the Company. All data,
memoranda, notes, lists, drawings, records, files, investor and client/customer
lists, supplier lists, and other documentation (and all copies thereof) made or
compiled by me or made available to me concerning the Developments or otherwise
concerning the past, present, or planned business of the Company are the
property of the Company, and will be delivered to the Company immediately upon
the termination of my employment with the Company.


2.   Covenant Not to Compete with the Company.




     (a) I acknowledge that the business of the Company is national in scope,
that its products and services are marketed throughout the entire United
States, that the Company competes in nearly all of its business activities with
other individuals or entities that are, or could be, located in nearly any part
of the United States and that the nature of my services, position, and
expertise are such that I am capable of competing with the Company from nearly
any location in the United States.



     (b) Accordingly, in order to protect the Company’s Trade Secret and
Proprietary Information and Third-Party Goodwill, I acknowledge and agree that
during the term of my employment with the Company and for a period of one year
after the date my employment with the Company is terminated for any reason (the
“Restricted Period”), I will not, without the Company’s express written
permission, directly or indirectly (including through the Internet), own,
control, manage, operate, participate in, be employed by, or act for or on
behalf of, any “Competitive Business” (as defined herein) located anywhere
within the geographic boundaries of the United States.



     (c) For purposes of this Agreement, a “Competitive Business” shall mean:
(i) any enterprise engaged in the business of Dakota Imaging, Inc. (“Dakota”)
as presently conducted and as conducted during my employment with Dakota; (ii)
any enterprise engaged in establishing electronic linkages between individual
healthcare providers,



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patients, and payors (including, without limitation, insurance companies,
HMO’s, pharmacy benefits management companies, and/or self-insured employer
groups) for the purpose of facilitating or conducting financial, administrative
and clinical communication and/or transactions; (iii) any enterprise engaged in
developing, selling or providing a consumer or physician Internet healthcare
portal; (iv) any enterprise engaged in developing, marketing or providing
healthcare information and/or management systems (including, without
limitation, electronic medical and/or dental records software; physician
practice management, dental practice management and/or other healthcare
practice management software systems; and other financial, administrative
and/or clinical systems for use in the healthcare industry) and/or services
related thereto (including, without limitation, software support and
maintenance services, hardware support and maintenance services and training
services) and (v) any enterprise engaged in any other type of business in which
the Company is also engaged, or plans to be engaged, so long as I am directly
involved in such business or planned business on behalf of the Company or one
of its affiliates.


3.   Non-Solicitation of Employees, Customers. In order to protect the
Company’s Trade Secret and Proprietary Information and Third-Party Goodwill,
during the Restricted Period, I will not, without the Company’s express written
permission, directly or indirectly:




     (a) solicit, induce, hire, engage, or attempt to hire or engage any
employee or independent contractor of the Company, or in any other way
interfere with the Company’s employment or contractual relations with any of
its employees or independent contractors, nor will I solicit, induce, hire,
engage or attempt to hire or engage any individual who was an employee of the
Company at any time during the one (1) year period immediately prior to the
termination of my employment with the Company;



     (b) contact, call upon or solicit, on behalf of a Competitive Business,
any existing or prospective client, or customer of the Company who I serviced,
or otherwise developed a relationship with, as a result of my employment with
the Company, nor will I attempt to divert or take away from the Company the
business of any such client or customer;


4.   Injunctive Remedies. I acknowledge and agree that the restrictions
contained in this Agreement are reasonably necessary to protect the legitimate
business interests of the Company, and that any violation of any of the
restrictions will result in immediate and irreparable injury to the Company for
which monetary damages will not be an adequate remedy. I further acknowledge
and agree that if any such restriction is violated, the Company will be
entitled to immediate relief enjoining such violation (including, without
limitation, temporary and permanent injunctions, a decree for specific
performance, and an equitable accounting of earnings, profits, and other
benefits arising from such violation) in any court having jurisdiction over
such claim, without the necessity of showing any actual damage or posting any
bond or furnishing any other security, and that the specific enforcement of the
provisions of this Agreement will not diminish my ability to earn a livelihood
or create or impose upon me any undue hardship. I also agree that any request
for such relief by the Company shall be in addition to, and without prejudice
to, any claim for monetary damages that the Company may elect to assert.



5.   Severability Provision. I acknowledge and agree that the restrictions
imposed upon me by the terms, conditions, and provisions of this Agreement are
fair, reasonable, and reasonably required for the protection of the Company.
In the event that any part of this Agreement is deemed invalid, illegal, or
unenforceable, all other terms, conditions, and provisions of this Agreement
shall nevertheless remain in full force and effect. In the event that the
provisions of any of Sections 1, 2, or 3 of this Agreement relating to the
geographic area of restriction, the length of restriction or the scope of
restriction shall be deemed to exceed the maximum area, length or scope that a
court of competent jurisdiction would deem enforceable, said area, length or
scope shall, for purposes of this Agreement, be deemed to be the maximum area,
length of time or scope that such court would deem valid and enforceable, and
that such court has the authority under this Agreement to rewrite (or
“blue-pencil”) the restriction(s) at-issue to achieve this intent.



6.   Non-Waiver. Any waiver by the Company of my breach of any term, condition,
or provision of this Agreement shall not operate or be construed as a waiver of
the Company’s rights upon any subsequent breach.



7.   Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, I HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
CONNECTION WITH ANY LITIGATION ARISING OUT OF, UNDER, IN CONNECTION WITH, OR IN
ANY


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WAY RELATED TO THIS AGREEMENT. THIS INCLUDES, WITHOUT LIMITATION, ANY
LITIGATION CONCERNING ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER VERBAL OR WRITTEN), OR ACTION OF THE COMPANY OR ME, OR ANY EXERCISE BY
THE COMPANY OR ME OF OUR RESPECTIVE RIGHTS UNDER THIS AGREEMENT OR IN ANY WAY
RELATING TO THIS AGREEMENT. I FURTHER ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT FOR THE COMPANY TO ISSUE AND ACCEPT THIS AGREEMENT.]





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