SXC Health Solutions Corp.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT dated
the
day of
, 20
BETWEEN:
SXC Health Solutions
Corp. ,
a corporation incorporated under the laws of the Yukon Territory,
Canada,
(hereinafter called the
“Corporation”)
- and -
(hereinafter called the
“Optionee”),
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1)
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Pursuant to the SXC Health
Solutions Corp. Long-Term Incentive Plan, as amended from time to
time (the “Plan”), the Corporation hereby grants to the
Optionee on the date hereof (the “Grant Date”) the
option (the “Option”) to purchase up to
common shares (the “Common Shares”) of the authorized
and unissued capital stock of the Corporation, as presently
constituted, for cash, at a price of US$
per Common Share, upon the terms and conditions set out herein. The
Option is not intended to qualify as an incentive stock option
within the meaning of Section 422(b) of the United States Internal
Revenue Code of 1986, as amended (the “Code”), and the
provisions hereof shall be construed consistent with that intent.
Capitalized terms not defined herein shall have the meanings
specified in the Plan.
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a)
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Date of Exercise
. On the first, second,
third and fourth anniversary of the Grant Date, the Option shall
become exercisable with respect to twenty-five percent (25%) of the
total number of Common Shares subject to the Option (computed in
each case to the nearest full share) (the “Exercisable
Portion”), and all or any part of the Common Shares as to
which the Option shall have become exercisable may be purchased at
any time, or from time to time, thereafter, until expiration or
termination of the Option.
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b)
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Expiration of Option
. The Option shall
expire with respect to each Exercisable Portion, and all rights to
purchase Common Shares comprising such Exercisable Portion
hereunder shall cease and become null and void, at 5:00
o’clock p.m. (Chicago time) on the date which is seven years
after the Grant Date (the “Expiration Date”) or upon
the happening of certain events as hereinafter provided.
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c)
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Method of Exercise
. The Option may only
be exercised by the Optionee, or by the person or persons entitled
to exercise the same pursuant to the provisions of subparagraph (f)
below, on or prior to the Expiration Date, by: (i) the
delivery to the Corporation at its head office of written notice of
election to exercise the same, specifying the number of Common
Shares with respect to which the Option is being exercised, and
accompanied by payment in full of the purchase price of the Common
Shares then purchased and any taxes required to be paid in
connection with such exercise by way of cash or certified check in
favor of the Corporation, or (ii) under the terms of the
Corporation’s cashless exercise program, which is subject to
change, specifying the number of Common Shares with respect to
which the Option is being exercised and accompanied by payment in
full of any taxes required to be paid in connection with such
cashless exercise. Concurrently with its receipt of any such notice
and payment, the Corporation shall issue the Common Shares
purchased by the Optionee. The Corporation may at its election
require that this Agreement be presented for appropriate
endorsement upon any such exercise.
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d)
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Compliance with Applicable
Law . THE
GRANTING OF THE OPTION AND THE ISSUANCE OF COMMON SHARES UPON
EXERCISE OF THE OPTION SHALL BE CARRIED OUT IN COMPLIANCE WITH
APPLICABLE STATUTES AND WITH REGULATIONS OF GOVERNMENTAL
AUTHORITIES AND APPLICABLE STOCK EXCHANGES AND SHALL BE CONDITIONAL
UPON ALL NECESSARY APPROVALS BEING OBTAINED. IF THE FOREGOING
CONDITION IS NOT SATISFIED, THIS AGREEMENT SHALL BE VOID AND OF NO
FORCE OR EFFECT AS OF THE DATE OF EXECUTION AND THE CORPORATION AND
THE OPTIONEE SHALL BE RELEASED FROM ANY AND ALL RIGHTS, BENEFITS,
OBLIGATIONS AND LIABILITIES HEREUNDER OR ARISING HEREFROM. The
Optionee hereby acknowledges and undertakes to comply, to the
satisfaction of the Corporation and its counsel, with all
applicable requirements of any stock exchange or exchanges upon
which any securities of the Corporation may from time to time be
listed and of any applicable securities regulatory authorities.
Such requirements may include the placing of legends on share
certificates restricting transfer of such Common Shares, the making
of representations by the Optionee that he or she is acquiring such
Common Shares for investment and not with a view to distribution,
the filing of any required information or statements with the
aforesaid authorities and the making of arrangements with the
Optionee’s employer to withhold income taxes which may become
payable under the Optionee’s exercise of the Option under
this Agreement.
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e)
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Options Not Assignable
. The Option shall not
be transferable or assignable other than by will or by the laws of
descent and distribution or pursuant to Section 12.5 of the
Plan on a beneficiary designation form approved by the
Corporation.
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2
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f)
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Exercise in the Event of Death or
Termination of Employment . Subject to the terms of any
written employment agreement between the Corporation or any
affiliate or subsidiary of the Corporation and the Optionee or, in
the absence of any such agreement, to the following provisions of
this subparagraph 1(f), the Option and all rights to purchase
Common Shares pursuant hereto shall expire and terminate
immediately upon the Optionee ceasing to be an employee, officer or
director of, or ceasing to provide services to, the Corporation or
an affiliate or subsidiary of the Corporation:
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i)
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Exercise Upon Death:
If the Optionee shall
die (A) while an employee, officer or director of or providing
services to the Corporation, or of an affiliate or subsidiary of
the Corporation, or (B) within thirty (30) days after
termination of the Optionee’s employment, office or
directorship with or service to the Corporation, or an affiliate or
subsidiary of the Corporation, in accordance with clause
(ii) or (iii) below, the Option may be exercised, to the
extent that the Optionee shall have been entitled to do so at the
date of death, by the person or persons to whom the
Optionee’s rights under the Option pass by will or applicable
law, or if no such person has such right, by the Optionee’s
executors or administrators at any time, or from time to time,
within twelve (12) months from the date when the Secretary of
the Corporation shall have given notice of this clause to the
executors or administrators of the Optionee following the
Optionee’s death, but in no event later than the Expiration
Date.
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ii)
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Exercise Upon Permanent
Disability: If an Optionee’s (or, if the
Optionee is a personal holding company controlled by, or a
registered retirement savings plan established by, an officer,
director, employee or service provider, then if such
person’s) employment, office or directorship with or services
to the Corporation, or an affiliate or subsidiary of the
Corporation, shall terminate because of the Optionee’s
permanent disability, the Optionee may exercise the Option, to the
extent the Optionee may be entitled to at the date of the
termination of the Optionee’s employment, office,
directorship or services, at any time, or from time to time, within
six (6) months of the effective date of the termination of the
Optionee’s employment, office, directorship or services, but
in no event later than the Expiration Date. For purposes of this
Agreement, “permanent disability” shall mean the
inability of the Optionee to substantially perform his or her
duties for a continuous period of at least six months as determined
by the Compensation Committee (the “Committee”) of the
Board of Directors of the Corporation.
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iii)
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Exercise Upon Termination for
Cause: If the
Optionee’s (or, if the Optionee is a personal holding company
controlled by, or a registered retirement savings plan established
by, an officer, director, employee or service provider, then if
such person’s) employment, office, directorship with or
services to the Corporation, or an affiliate or subsidiary of the
Corporation, shall be terminated for cause, the Optionee may
exercise the Option, to the extent that the Optionee would be
entitled to do so at the date of the termination of his or her
employment, office, directorship or services, at any time or from
time to time, within thirty (30) days of the date of
termination of the Optionee’s employment, office,
directorship or services, but in no event later than the Expiration
Date.
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For purposes of this Agreement,
“cause” shall have the meaning ascribed thereto in any
written employment agreement between the Corporation or any
affiliate or subsidiary of the Corporation and the Optionee and, in
the absence of any such agreement, shall mean the willful and
continued failure to substantially perform the duties assigned by
the Corporation (other than a failure resulting from the
Optionee’s disability), the willful engaging in conduct which
is demonstrably injurious to the Corporation or any affiliate or
subsidiary of the Corporation, monetarily or otherwise, including
conduct that, in the reasonable judgment of the Corporation, no
longer conforms to the standard of the Corporation’s
executives or employees, any act of dishonesty, commission of a
felony, or a significant violation of any statutory or common law
duty of loyalty to the Corporation.
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iv)
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Exercise Upon Other
Terminations: If the Optionee’s (or, if the
Optionee is a personal holding company controlled by, or a
registered retirement savings plan established by, an officer,
director, employee or service provider, then if such
person’s) employment, office or directorship with or services
to the Corporation, or an affiliate or subsidiary of the
Corporation, shall terminate for any reason other than for cause or
upon the Optionee’s death or permanent disability, the
Optionee may exercise the Option, to the extent that the Optionee
may be entitled to do so at the date of the termination of the
Optionee’s employment, office, directorship or
services,
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