Exhibit 10.1


 


 


 


HEALTHGATE DATA CORP.


 


 


2004 STOCK OPTION & STOCK ISSUANCE PLAN


 


Initially Adopted March 24, 2004


Amended and Restated June 23, 2004


Approved by Stockholders:  November 3, 2004


 


 


 


 





















 


HEALTHGATE DATA CORP.

2004 STOCK OPTION & STOCK ISSUANCE PLAN


 


                                1.  Purpose of the Plan.  HealthGate Data Corp., a Delaware corporation
(the “Company”), wishes to advance its interests by encouraging and enabling
eligible employees of the Company and other persons affiliated with the Company
to acquire stock in the Company, and believes that the granting of stock and
stock options (including both “Incentive Stock Options” and “non-ISOs”) will
stimulate the efforts of such persons, strengthen their desire to remain with
the Company, provide them with a more direct interest in its welfare and assure
a closer identification between them and the Company.  In order to provide for the granting of stock
and stock options, the Company has adopted this 2004 Stock Option & Stock
Issuance Plan (the “Plan”) in furtherance of its objectives with respect to its
employees and other persons affiliated with the Company.  As used herein, an “Incentive Stock Option”
shall mean an option described in Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”); and, a “non-ISO” shall mean an option (i) in
which the fair market value of the stock which may be acquired upon exercise of
such option exceeds the limitation for Incentive Stock Options set forth in
Section 6 hereof, (ii) which for some other reason does not satisfy the
requirements of the Code applicable to Incentive Stock Options; or (iii) which
was granted after December 31, 1986, and contains terms that provide that it
will not be treated as an Incentive Stock Option.  As used 
herein, “Stock Options” shall include both Incentive Stock Options and
non-ISOs.


                                2.  Amount of Stock Subject to the Plan.  The total number of shares of Common Stock,
par value $0.03 per share, of the Company which may be issued pursuant to stock
issuances or sold pursuant to Stock Options granted under the Plan shall not
exceed 300,000 shares.  The shares issued
or sold under the Plan may be either authorized and unissued shares or issued
shares reacquired by the Company.  In the
event that any Stock Options granted under the Plan shall terminate or expire
for any reason without having been exercised in full, the shares not purchased
under such Stock Options shall be again available for Stock Options or stock
issuances pursuant to this Plan.  In the
event any shares of stock issued under this Plan subject to vesting shall not
vest and revert to the Company, such shares shall be again available for Stock
Options or stock issuances pursuant to this Plan.


                                3.  Administration.  The Plan shall be administered by the Board
of Directors of the Company (the “Board”). 
The Board shall have the authority, in its discretion, to issue shares
to any person, to grant an Incentive Stock Option to any eligible employee and
to grant a non-ISO to any person.  All
Stock Options shall be evidenced by written instruments (which need not be
uniform). Terms and conditions for stock issuances may be set forth in written
stock issuance agreement (which need not be uniform).


                                The
Board shall have authority in its discretion to determine the individuals to
whom Stock Options shall be granted, the times when they shall receive them,
the option price of each Stock Option, the period during which and terms and
conditions under which each Stock Option may be exercised, and the number of
shares to be subject to each Stock Option.


                                The
Board shall have authority in its discretion to determine the individuals to
whom stock issuances shall be made, the times when they shall receive them, the
consideration of such stock issuance and the terms of such stock issuance
(including, without limitation, vesting or rights of repurchase terms), and the
number of shares to be subject to each issuance.


 


 


 





















 


                                The
Board shall also have authority to construe the respective Stock Options, terms
of stock issuances, and this Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine 
the terms and provisions not specified in or incorporated with the Plan
to be included in the respective Stock Options or stock issuance agreements
(which need not be uniform) and to make all other determinations necessary or
advisable for administering the Plan. 
The Board may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Stock Option or stock issuance agreement in
the manner and to the extent that it shall deem expedient to carry into effect,
and it shall be the sole and final judge of such expediency.  All actions or determinations of the Board
shall be by majority vote of its members and the determination of the Board on
the matters referred to in this section shall be conclusive.


                                Notwithstanding
the foregoing, the Board’s authority as set forth in this Section 3 with
respect to matters involving Incentive Stock Options is subject to the express
provisions and limitations of this Plan and subject to Section 422 of the Code.


                                4.  Eligibility.  Only employees of the Company shall be
eligible to receive Incentive Stock Options hereunder.  A director of the Company who is not also an
employee of the Company shall not be eligible to receive Incentive Stock
Options hereunder.  Employees, directors,
consultants and other persons affiliated with the Company are eligible to
receive non-ISO’s and stock issuances hereunder.


                                5.  Restrictions on Incentive Stock Options.  An Incentive Stock Option shall not be
granted to any employee, who, at the time the Incentive Stock Option is
granted, owns stock possessing more than ten percent (10%) of the total
combined  voting power of all classes of
stock of the Company or of its parent or subsidiary corporation, provided,
however, that the prohibition of granting Incentive Stock Options to employees
owning more than ten percent (10%) of the voting power of the Company or its
parent or subsidiary corporation shall not apply if at the time such Incentive
Stock Option is granted the price of Incentive Stock Option is at least 110% of
the fair market value of the stock subject to the Incentive Stock Option and
such Incentive Stock Option by its terms is not exercisable after the
expiration of five (5) years from the date such Incentive Stock Option is
granted.  For the purposes of the
preceding sentence, an individual is considered to own the stock directly or
indirectly by or for his brothers, sisters, spouse, ancestors and lineal
descendants.


                                Notwithstanding
any provisions of this Plan, any Incentive Stock Option granted hereunder shall
contain all provisions required to be included in the terms of an Incentive
Stock Option under Section 422 of the Code.


                                6.  Option
Exercise Price and Payment. 
The purchase price of Common Stock provided under each Stock Option
granted pursuant to the Plan shall be set by the Board and in the case of
Incentive Stock Options shall equal or exceed the fair market value of the
stock on the date of the granting of the Incentive Stock Option, as determined
by the Board and such purchase price shall equal or exceed the par value per
share of the Common Stock.  The purchase
price (plus the amount of any applicable withholding taxes) shall be paid in
full upon each exercise of a Stock Option. 
The Board may, in its discretion, provide that the purchase price of
Common Stock provided under either an Incentive Stock Option (granted pursuant
to the Plan) or non-ISO may be payable with mature stock of the Company (i.e.
stock held by the optionee for at least six months).  The proceeds of the sale of stock subject to
the Stock Options are to be added to the general funds of the Company and used
for its corporate purposes.


 


 


 


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                                7.  Period of Incentive Stock Options and Certain
Limitations on Rights to Exercise Incentive Stock Options.  Each Incentive Stock Option shall expire no
later than ten (10) years from the date of grant of the Incentive Stock Option;
provided, however, that except as provided in Sections 9 and 10 hereof, no
holder of an Incentive Stock Option may exercise his Incentive Stock Option
unless at the time of exercise the holder has been continuously in the employ
of the Company since the grant of his Incentive Stock Option.


                                Incentive
Stock Options granted hereunder may also include provisions (which need not be
uniform) designed to prevent violations of the Securities Act of 1933, and the
rules and regulations thereunder, upon the exercise of an Incentive Stock
Option or the sale or other disposition of the shares of Common Stock purchased
on exercise of an Incentive Stock Option.


                                No holder of any
Incentive Stock Option or such holder’s legal representatives, legatees or
distributees, as the case may be, will be or will be deemed to be a holder of
any shares covered by the Incentive Stock Option unless and until the holder
has exercised the Incentive Stock Option as to such shares, paid for such
shares in full and received certificates representing such shares.


                                8.  Non-transferability of Incentive Stock Options.  No Incentive Stock Option granted under the
Plan shall be transferable otherwise than by will or by the laws of descent and
distribution, and an Incentive Stock Option may be exercised during the
lifetime of the employee to whom it is granted only by the employee.


                                9.  Termination of Employment.  If the employment of an employee to whom an
Incentive Stock Option has been granted terminates for any reason other than by
death, the Incentive Stock Option holder may exercise the Incentive Stock
Option (to the extent the employee was entitled to do so at the termination of
his employment) only at any time and from time to time within ninety (90) days
after such termination, but in no event after the expiration of his Incentive
Stock Option; provided, however, that if the employment of an employee to whom
an Incentive Stock Option has been granted terminates due to the permanent and
total disability of such employee, such employee may exercise the Incentive
Stock Option (to the extent the employee was entitled to do so at the
termination of employment) only at any time and from time to time within one
year after such termination, but in  no
event after the expiration of his Incentive Stock Option.  Incentive Stock Options granted under the
Plan shall not be affected by any change of employment so long as the holder
continues to be an employee of the Company. 
Nothing in the Plan or in any Stock Option granted under it shall confer
any right to continue in the employ of the Company or interfere in any way with
the right of the Company to terminate any employment at any time.


                                10.  Death of Holder of Incentive Stock Option.  In the event of the death of the holder of an
Incentive Stock Option under the Plan while the holder is employed by the
Company or a subsidiary of the Company, the Incentive Stock Option theretofore
granted to the holder may be exercised (to the extent the deceased was entitled
to do so at the date of death) at any time and from time to time within a
period of ninety (90) days after the holder’s death by the person or persons to
whom the holder’s rights under said Incentive Stock Option shall pass by will
or the laws of descent and distribution, but in no event may such person or
persons exercise the Incentive Stock Option after its expiration.


                                11.  Adjustments Upon Changes in
Capitalization, Stock Splits, Mergers, Etc. 
Notwithstanding any other provisions of the Plan, any Stock Option or
any stock issuance agreement, in the event of any stock dividend,


 


 


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recapitalization, merger, sale of all or
substantially all of the assets or outstanding equity, consolidation,
liquidation, dissolution, split-up, combination or exchange of shares, or
similar change in the outstanding Common Stock of the Company by reason of the
foregoing or similar transactions (in each case a “Transaction”), the Board may
make appropriate provisions, adjustments and amendments relating to the Plan
outstanding Stock Options and stock issuances, including, without limitation
adjustments and amendments to (i) adjust the aggregate number and class of
shares available under the Plan, (ii) adjust the number and class of shares
subject to each outstanding Stock Option and stock issuance, (iii) adjust the
Stock Option exercise prices, (iv) substitute the consideration payable to the
Company’s stockholders for each share of Company stock in a Transaction (or
other consideration of similar value as determined by the Board) (“Stockholder
Consideration per Share”) for each share of stock issuable upon exercise of a
Stock Option or issued pursuant to a stock issuance agreement, (v) terminate
outstanding Stock Options in exchange for a cash payment or other consideration
equal to the excess of the Stockholder Consideration per Share over the Stock
Option exercise price and (vi) terminate unvested shares subject to outstanding
stock issuance agreement in exchange for the Stockholder Consideration per
Share.  The provisions, adjustments and
amendments made by the Board pursuant to this Section 11 shall be binding and
conclusive.


12.           General Provisions concerning
Stock Issuances.


                                                (a)           Shares of Common Stock may be issued
under stock issuances through direct and immediate issuances without any
intervening option grants.  Such stock
issuances may be evidenced by a stock issuance agreement, which may include one
or more of the following terms and conditions: purchase price, consideration
(including cash or services), vesting (either fully and immediately vested upon
issuance or vesting in one or more installments over the participant’s period of
service or upon attainment of specified performance objectives), the effect
which death, Disability or other event is to have upon the vesting schedule,
and the Company’s repurchase rights (if any).


                                (b)           Unless otherwise expressly provided
in the stock issuance agreement, the participant shall have full stockholder
rights with respect to any shares of common stock issued under a stock issuance
agreement, whether or not the participant’s interest in those shares is vested.
Accordingly, the participant shall have the right to vote such shares and to
receive any regular cash dividends paid on such shares.


                                (c)           Vesting.  Should the participant cease to remain in
service while holding one or more unvested shares of common stock issued under
this Plan or should the performance objectives not be attained with respect to
one or more such unvested shares of Common Stock, then those shares shall be
immediately surrendered to the Company for cancellation, and the participant
shall have no further stockholder rights with respect to those shares. To the
extent the surrendered shares were previously issued to the participant for
consideration paid in cash or cash equivalent, the Company shall repay to the
participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money
note of the participant attributable to such surrendered shares.


                                (d)           Escrow/Stock Legends.  Unvested shares may, in the Company’s
discretion, be held in escrow by the Company until the participant’s interest
in such shares vests or may be issued directly to the participant with
restrictive legends on the certificates evidencing those unvested shares.


 


 


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13.  Amendment and Termination.  Unless the Plan shall have been terminated as
hereinafter provided, the Plan shall terminate ten years from adoption and no
Stock Option under it shall be granted thereafter nor shall any stock issuances
be granted thereafter.  The Board at any
time prior to that date may terminate the Plan, or make such changes in it and
additions or amendments to it as the Board shall deem advisable; provided,
however, that any change in or addition or amendment to the Plan which shall


(a)   increase the aggregate number of shares of Common Stock of the Company
which may be issued and sold upon the exercise of Incentive Stock Options
granted pursuant to the Plan, or


(b)   reduce the minimum purchase price per share of Common Stock purchasable
under any Incentive Stock Option granted pursuant to the Plan, shall be subject
to approval by the stockholders of the Company within one year after its
adoption or the same shall become null and void.


                                No
termination or amendment of the Plan may, without the consent of the holder of
any Stock Option then outstanding, adversely affect the rights of such holder
under the Stock Option.


                                14.  Effectiveness of the Plan.  The Plan shall become effective upon
shareholder approval (a majority vote of the shares of Common Stock of the
Company present and voting  at a duly called
stockholders meeting) and shall remain effective until terminated as provided
in Section 13 hereof.


                                Any
Incentive Stock Option granted pursuant to the Plan prior to the approval
thereof by the stockholders of the Company shall be granted subject to such
approval, and if such approval is not obtained within one (1) year after the
date of grant, such Incentive Stock Option shall become null and void.


                                Any
Incentive Stock Option granted pursuant to the Plan after the adoption by the
Board of any amendment to the Plan which is required by the provisions of
Section 13 above to be approved by the stockholders of the Company and which
could not have been granted but for such amendment shall, if granted before
such approval is obtained, be granted subject to the obtaining of such
approval, and if such approval is not obtained within one (1) year after the
adoption of such amendment by the Board, such Incentive Stock Option shall
become null and void.


                                15.  Limitations on non-ISOs.  At the discretion of the Board of Directors,
non-ISOs granted hereunder may contain some, all or none of the limitations
described in Sections 5, 7, 8, 9 and 10, or other limitations.


                                16.  Captions; Gender.


                                                (a)           The heading, titles or captions of
the sections of this Plan are inserted only to facilitate reference, and they
shall not define, limit, extend or describe the scope or  intent of the Plan or any provision hereof,
and they shall not constitute a part hereof or affect the meaning or
interpretation of this Plan or any part hereof.


                                                (b)           Use herein of any gender shall be
deemed to include all genders when appropriate, and use of the singular number
shall be deemed to include the plural when appropriate, and vice versa in each
instance.


 


	
   

  	
   

  	
  HEALTHGATE DATA CORP.

  
	
   

  	
   

  	
   

  
	
  [Corporate Seal]

  	
  By:

  	
  /s/  William S. Reece

  
	
   

  	
   

  	
  William S. Reece

  
	
   

  	
   

  	
  President and Chief Executive Officer

  



 


 


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