-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, W37WNkW+zOPyfwAaZNnskLoVY6pSGlIpVfLjbwH30PIMd07WzAT2VoKjcSRbUKlz mLK5EydzsCAkbublyhyGeQ== 0000950123-94-000857.txt : 19940505 0000950123-94-000857.hdr.sgml : 19940505 ACCESSION NUMBER: 0000950123-94-000857 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19940504 EFFECTIVENESS DATE: 19940523 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCK & CO INC CENTRAL INDEX KEY: 0000064978 STANDARD INDUSTRIAL CLASSIFICATION: 2834 IRS NUMBER: 221109110 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-53463 FILM NUMBER: 94525977 BUSINESS ADDRESS: STREET 1: ONE MERCK DR STREET 2: P O BOX 100 CITY: WHITEHOUSE STATION STATE: NJ ZIP: 08889-0100 BUSINESS PHONE: 9084231000 MAIL ADDRESS: STREET 1: ONE MERCK DR STREET 2: PO BOX 100 WS3AB-05 CITY: WHITEHOUSE STATION STATE: NJ ZIP: 08889-0100 S-8 1 MERCK & CO., INC. FORM S-8 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 1994 REGISTRATION NO. 33- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- MERCK & CO., INC. (Exact name of issuer as specified in its charter) P.O. Box 100 One Merck Drive Whitehouse Station, New Jersey 08889 (908) 423-1000 (Address of Principal Executive Offices) NEW JERSEY 22-1109110 (State of Incorporation) (I.R.S. Employer Identification No.)
MEDICAL MARKETING GROUP, INC. ("MMG") 1991 CLASS B STOCK OPTION PLAN MMG 1991 SPECIAL NON-QUALIFIED STOCK OPTION PLAN CERTAIN STOCK OPTIONS (Full title of the plans) CELIA A. COLBERT SECRETARY AND ASSISTANT GENERAL COUNSEL MERCK & CO., INC. P.O. BOX 100 ONE MERCK DRIVE WHITEHOUSE STATION, NEW JERSEY 08889 (908) 423-1000 (Name, address and telephone number of agent for service) CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed maximum offering aggregate Amount price per offering Amount Title of securities to be registered to be registered share* price* of registration fee - --------------------------------------------------------------------------------------------------------------------------- Common Stock (no par value) 1,250,000 $ 29.69 $ 37,112,500 $ 12,804 shares ===========================================================================================================================
* The prices stated above are estimated solely for the purpose of determining the registration fee and are based on the average of the high and low market prices of the stock as reported on the composite tape of New York Stock Exchange listed issues on April 28, 1994 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE The following documents filed by the registrant (Exchange Act File No. 1-3305) with the Securities and Exchange Commission are incorporated herein by reference and made a part hereof: (1) Annual Report on Form 10-K for the fiscal year ended December 31, 1993; (2) Proxy Statement for the Annual Meeting of Stockholders held April 26, 1994; (3) The description of the Common Stock of the registrant set forth in the registrant's Registration Statement pursuant to Section 12 of the Exchange Act, and any amendment or report filed for the purpose of updating any such description. All documents filed by the registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act from the date hereof and prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS The New Jersey Business Corporation Act provides that a New Jersey corporation has the power to indemnify a director or officer against his or her expenses and liabilities in connection with any proceeding involving the director or officer by reason of his or her being or having been such a director or officer, other than a proceeding by or in the right of the corporation, if such a director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation; and with respect to any criminal proceeding, such director or officer had no reasonable cause to believe his or her conduct was unlawful. The indemnification and advancement of expenses shall not exclude any other rights, including the right to be indemnified against liabilities and expenses incurred in proceedings by or in the right of the corporation, to which a director or officer may be entitled under a certificate of incorporation, bylaw, agreement, vote of shareholders, or otherwise; provided that no indemnification shall be made to or on behalf of a director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his or her acts or omissions (a) were in breach of his or her duty of loyalty to the corporation or its shareholders, (b) were not in good faith or involved a knowing violation of law or (c) resulted in receipt by the director or officer of an improper personal benefit. The Company's Restated Certificate of Incorporation provides that, to the fullest extent permitted by the laws of the State of New Jersey, directors and officers of the Corporation shall not be personally liable to the Corporation or its stockholders for damages for breach of any duty owed to the Corporation or its stockholders, except that a director or officer shall not be relieved from liability for any breach of duty based upon an act or omission (a) in breach of such person's duty of loyalty to the Corporation or its stockholders, (b) not in good faith or involving a knowing violation of law or (c) resulting in receipt by such person of an improper personal benefit. II-2 3 The By-Laws of the Company provide that a former, present or future director, officer or employee of the Company or the legal representative of any such director, officer or employee shall be indemnified by the Company: (a) against reasonable costs, disbursements and counsel fees paid or incurred where such person has been successful in the defense on the merits or otherwise of any pending, threatened or completed civil, criminal, administrative or arbitrative action, suit or proceeding, brought by reason of such person's being or having been such director, officer or employee, and (b) with respect to the defense of any such action, suit, proceeding, inquiry or investigation for which indemnification is not made under (a) above, against reasonable costs, disbursements (which shall include amounts paid in satisfaction of settlements, judgments, fines and penalties, exclusive, however, of any amount paid or payable to the Company) and counsel fees if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company, and in connection with any criminal proceedings such person also had no reasonable cause to believe the conduct was unlawful, with the determination as to whether the applicable standard of conduct was met to be made by a majority of the members of the Board of Directors (sitting as a Committee of the Board) who were not parties to such inquiry, investigation, action, suit or proceeding or by any one or more disinterested counsel to whom the question may be referred by the Board of Directors; provided, however, in connection with any proceeding by or in the right of the Company, no indemnification shall be provided as to any person adjudged by any court to be liable to the Company except as and to the extent determined by such court. The Company enters into indemnification agreements with its directors and officers and enters into insurance agreements on its own behalf. The indemnification agreements provide that the Company agrees to hold harmless and indemnify its directors and officers to the fullest extent authorized or permitted by the Business Corporation Act of the State of New Jersey, or any other applicable law, or by any amendment thereof or other statutory provisions authorizing or permitting such indemnification that is adopted after the date hereof. Without limiting the generality of the foregoing, the Company agrees to hold harmless and indemnify its directors and officers to the fullest extent permitted by applicable law against any and all expenses, judgments, fines, and amounts paid in settlement actually and reasonably incurred by its directors and officers in connection with the defense of any present or future threatened, pending, or completed claim, action, suit, or proceeding by reason of the fact that they were, are, shall be, or shall have been a director or officer of the Company, or are or were serving, shall serve, or shall have served, at the request of the Company, as director or officer of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not applicable. ITEM 8. EXHIBITS
Exhibit Number Description Method of Filing - ------ ----------- ---------------- 4.1 Restated Certificate of Incorporation of the registrant (May 6, 1992) Incorporated by reference to Form 10-K Annual Report for the fiscal year ended December 31, 1992
II-3 4 4.2 By-Laws of the registrant (as amended November 22, 1988) Incorporated by reference to Form 10-K Annual Report for the fiscal year ended December 31, 1988 4.3 Medical Marketing Group, Inc. ("MMG") 1991 Class B Stock Option Plan * 4.4 Form of MMG Class B Non-Qualified Stock Option Agreement * 4.5 MMG 1991 Special Non-Qualified Stock Option Plan * 4.6 Form of MMG 1991 Special Non-Qualified Stock Option Agreement * 4.7 Stock Option Agreement dated as of July 15, 1991 between Micki Mikula * and MMG 4.8 Stock Option Agreement dated as of April 5, 1991 between Marianne * Vignone and MMG 4.9 Stock Option Agreement dated as of April 5, 1991 between Peggy * Jablonski and MMG 4.10 Stock Option Agreement dated as of April 22, 1991 between Roger * Holstein and MMG 4.11 Stock Option Agreement dated as of May 1, 1992 between Carl Kanter and * MMG 4.12 Assumption Agreement dated April 6, 1994 between registrant and MMG * 5 Opinion of Bert I. Weinstein, Associate General Counsel of the * registrant 23 Consent of Arthur Andersen & Co. * 24 Power of Attorney of Board of Directors Included at Page II-6 of this Registration Statement - ---------------
* Filed with this Registration Statement. ITEM 9. UNDERTAKINGS The undersigned registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (i) and (ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is II-4 5 contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. 2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 4. That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 5. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-5 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Whitehouse Station, State of New Jersey, on the 29th day of April, 1994. MERCK & CO., INC. By: /s/ P. Roy Vagelos, M.D. -------------------------- P. Roy Vagelos, M.D. (Chairman of the Board, President and Chief Executive Officer) POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Celia A. Colbert or Mary M. McDonald, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and all documents relating thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or advisable to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------- ----- ---- /s/ P. Roy Vagelos, M.D. Chairman of the Board, April 29, 1994 - -------------------------- President and Chief Executive P. Roy Vagelos, M.D. Officer (Principal Executive Officer) and Director /s/ Judy C. Lewent Senior Vice President and April 29, 1994 - --------------------------- Chief Financial Officer Judy C. Lewent (Principal Financial Officer) /s/ Peter E. Nugent Vice President, Controller April 29, 1994 - --------------------------- (Principal Accounting Officer) Peter E. Nugent /s/ H. Brewster Atwater, Jr. Director April 29, 1994 - ---------------------------- H. Brewster Atwater, Jr. /s/ Sir Derek Birkin Director April 29, 1994 - ---------------------------- Sir Derek Birkin /s/ Lawrence A. Bossidy Director April 29, 1994 - ----------------------------- Lawrence A. Bossidy /s/ William G. Bowen, Ph.D. Director April 29, 1994 - ----------------------------- William G. Bowen, Ph.D.
II-6 7
SIGNATURE TITLE DATE - --------- ----- ---- /s/ Carolyne K. Davis, Ph.D. Director April 29, 1994 - ---------------------------- Carolyne K. Davis, Ph.D. /s/ Lloyd C. Elam, M.D. Director April 29, 1994 - ---------------------------- Lloyd C. Elam, M.D. /s/ Charles E. Exley, Jr. Director April 29, 1994 - ---------------------------- Charles E. Exley, Jr. /s/ William N. Kelley, M.D. Director April 29, 1994 - ---------------------------- William N. Kelley, M.D. /s/ Ruben F. Mettler, Ph.D. Director April 29, 1994 - ---------------------------- Ruben F. Mettler, Ph.D. /s/ Richard S. Ross, M.D. Director April 29, 1994 - ----------------------------- Richard S. Ross, M.D. /s/ Dennis Weatherstone Director April 29, 1994 - ----------------------------- Dennis Weatherstone /s/ Martin J. Wygod Director April 29, 1994 - ----------------------------- Martin J. Wygod
II-7 8 Exhibit Number Description Method of Filing 4.1 Restated Certificate of Incorporation of the Incorporated by registrant (May 6, 1992) reference to Form 10-K Annual Report for the fiscal year ended December 31, 1992 4.2 By-Laws of the registrant (as amended Incorporated by November 22, 1988) reference to Form 10-K Annual Report for the fiscal year ended December 31, 1988 4.3 Medical Marketing Group, Inc. ("MMG") 1991 Class B * Stock Option Plan 4.4 Form of MMG Class B Non-Qualified Stock Option * Agreement 4.5 MMG 1991 Special Non-Qualified Stock Option Plan * 4.6 Form of MMG 1991 Special Non-Qualified Stock * Option Agreement 4.7 Stock Option Agreement dated as of July 15, 1991 * between Micki Mikula and MMG 4.8 Stock Option Agreement dated as of April 5, 1991 * between Marianne Vignone and MMG 4.9 Stock Option Agreement dated as of April 5, 1991 * between Peggy Jablonski and MMG 4.10 Stock Option Agreement dated as of April 22, 1991 * between Roger Holstein and MMG 4.11 Stock Option Agreement dated as of May 1, 1992 * between Carl Kanter and MMG 4.12 Assumption Agreement dated April 6, 1994 between * registrant and MMG 5 Opinion of Bert I. Weinstein, Associate General * Counsel of the registrant 23 Consent of Arthur Andersen & Co. * 24 Power of Attorney of Board of Directors Included at Page II- 6 of this Registration Statement * Filed with this Registration Statement. EX-4.3 2 MEDICAL MKTG GROUP STOCK OPTION PLAN 1 EXHIBIT 4.3 MEDICAL MARKETING GROUP, INC. 1991 CLASS B STOCK OPTION PLAN 1. Definitions. The terms below shall be defined as indicated. 1.1 Board means the Board of Directors of the Company, as constituted at any time. 1.2 Code means the Internal Revenue Code of 1986, as amended from time to time. 1.3 Committee means the Committee of the Board described in Section 3.1. 1.4 Common Stock means the Company's Common Stock, par value $.01. 1.5 Company means Medical Marketing Group, Inc., a Delaware corporation, and any successor corporation which adopts the Plan. 1.6 Disinterested Director means a member of the Board who is a "disinterested person" within the meaning of Rule 16b-3 under the Exchange Act, as such Rule is currently in effect or as such Rule is amended from time to time. 1.7 Employee means a person (including an Employee who is also an officer or a director of the Company) employed by the Parent, the Company or a Subsidiary on a full time basis, who is compensated by a regular salary. 2 1.8 Exchange Act means the Securities Exchange Act of 1934, as amended from time to time. 1.9 Fair Market Value means, on a specified date, the last sales price of a Share traded on the over-the-counter market, as reported on the National Association of Securities Dealers Automated Quotation System or the closing price for a Share on the stock exchange, if any, on which Shares are primarily traded; provided, however, that if no Shares were traded on such date, then on the last previous date on which a Share was so traded, or, if none of the above is applicable, the value of a Share as established by the Committee for such date, using any reasonable method of valuation. 1.10 Incentive Stock Option means an Option which is intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Code. 1.11 Key Contractor means an individual (other than an Employee) who is an officer or director of the Parent, the Company or a Subsidiary or a consultant, agent, or other person engaged by the Parent, the Company or a Subsidiary to render services to, or on behalf of, the Parent, the Company or such Subsidiary. 1.12 Nonqualified Stock Option means any Option which is not an Incentive Stock Option. 1.13 Option means an option granted by the Company pursuant to the Plan to purchase Shares. -2- 3 1.14 Option Agreement means a written agreement, as described in Section 7 hereof, between the Company and an Optionee evidencing an Option. 1.15 Option Period means the period from the date of the granting of an Option to the date on which that Option can no longer be exercised, as determined by the Committee pursuant to Section 7.4 hereof. 1.16 Option Price means the price to be paid for the Shares purchased pursuant to an Option. 1.17 Optionee means any person who is granted an Option under the Plan. 1.18 Parent means a parent of the Company as defined under Section 424 of the Code. 1.19 Plan means the Company's 1991 Class B Stock Option Plan, as embodied herein and as amended from time to time. 1.20 Shares means shares of Common Stock. 1.21 Subsidiary means a subsidiary of the Company as defined under Section 424 of the Code. 2. Purpose. The Plan is intended to encourage ownership of Common Stock by certain Employees and Key Contractors in order to increase their interest in the Company's success and to encourage them to remain in the employ of the Parent, the Company and its Subsidiaries. 3. Administration 3.1 Board or Committee. The Plan shall be administered by the Board or, if the Board so elects, by a -3- 4 Committee of at least three members of the Board to be appointed by the Board, all of whom shall be Disinterested Directors. If the Board administers the Plan, it may do so only so long as a majority of directors, and a majority of directors acting on any matter, are Disinterested Directors. Notwithstanding the foregoing, the Plan may be administered, with respect to participation in the Plan by officers who are not directors of the Company, (i) by the Board or a Committee of at least three members of the Board, none of whom are required to be Disinterested Directors, or (ii) by, or in accordance with the recommendations of, a committee of at least three persons having full authority to act in the matter, all of the members of which Committee are "disinterested persons" within the meaning of Rule 16b-3 under the Exchange Act. Notwithstanding the foregoing, from and after May 1, 1991, the Plan shall be administered by (i) the Board, if each director is a Disinterested Director, or (ii) a Committee consisting of two or more directors, each of whom is a Disinterested Director. In the event that the Board does not elect to appoint a Committee then, for purposes of administering the Plan, the term "Board" shall be substituted for the term "Committee" whenever it appears in the Plan. 3.2 Interpretation and Construction. The Committee shall have the authority to interpret and construe the provisions of the Plan or of any Option Agreement and such interpretation or construction shall be final and conclusive unless otherwise determined by the Board, and in any such event the determination -4- 5 by the Board shall be final and conclusive. The Committee may establish such rules and regulations concerning the Plan and any Option Agreement as the Committee may determine to be necessary or advisable for the administration of the Plan, including, without limiting the foregoing, rules and regulations concerning non-competition provisions to be abided by any Optionee. 3.3 Determination of Option Terms. Notwithstanding the provisions of Section 7.5, subject to the provisions of Section 12, the Committee shall have authority, subject to the terms of the Plan, to determine the vesting and exercise schedule with respect to the Options, the persons to whom Options shall be granted, the number of Shares to be covered by each Option, the time or times at which Options shall be granted, and the terms and provisions of the Options, and to make all other determinations necessary or advisable for the administration of the Plan; provided, however, that in no event shall the vesting schedule permit the aggregate percentage of any Option that is exercisable at any time to average more than 20% per year for the first five years for which the Option has been outstanding. Subject to the consent of any Optionee affected, the Committee shall have the right to cancel any outstanding Options and to issue new Options on much terms and upon such conditions as the Committee may determine. 4. Eligible Persons. The Committee may grant Options to any Employee or Key Contractor other than those members of the Board designated by the Board to be ineligible; provided, -5- 6 however, that an Incentive Stock Option shall not be granted to any individual who is not an Employee as of the date of grant, and, provided further, that no Incentive Stock Option shall be granted to an individual who, at the time such Option is granted, owns (within the meaning of Section 422 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Parent, the Company or any Subsidiary, unless, at the time the Incentive Stock Option is granted, the Option Price is at least 110% of the Fair Market Value of a Share and the Incentive Stock Option, by its terms, is not exercisable after the expiration of five years from the date such Option is granted; and further provided, however, that no member of the Committee shall be eligible to receive any Options granted under the Plan during the time that such person is a member of the Committee. 5. Grant of Options. 5.1 Procedure. Subject to the provisions of Section 8.1 hereof, the Committee may grant Options, which may be either Incentive Stock Options or Nonqualified Stock Options (as determined by the Committee, in its sole discretion) provided that the person to whom the Option is granted subsequently becomes a party to an Option Agreement. An Option granted pursuant to the Plan shall be presumed to be a Nonqualified Stock Option, unless the Committee specifies otherwise at the time the Option is granted. -6- 7 5.2 Additional Grants. Nothing contained in the Plan shall be construed to preclude either the granting of an Option to an Optionee to whom one or more Options have already been granted or the simultaneous granting of more than one Option to the same Optionee. 5.3 Subject to Exchange Rules. Any and all grants of Options shall be subject to all applicable rules and regulations of any stock exchange on which the Company's Common Stock may then be listed. 6. Effective and Expiration Dates of Plan. This Plan shall be effective on March 15, 1991. No Option shall be granted under the Plan after March 14, 2001. 7. Option Agreements. Option Agreements shall be in such form as the Committee, in its sole discretion, shall approve or determine; provided, however, that all Option Agreements shall comply with and be subject to the following terms and conditions: 7.1 Manner, Time, and Medium of Payment. An Option shall be exercised in the manner set forth in the Option Agreement relating thereto and payment in full of the Option Price for all Shares shall be made at the time of exercise. Payment shall be in United States dollars in the form of cash, certified check, bank draft, or if the Committee has so determined, by delivery to the Company Shares which the Optionee has owned for at least six months, or by withholding Shares with respect to which the Optionee has exercised such Option having a Fair Market Value on the date of exercise equal to the sum of the -7- 8 Option Price for the withheld Shares and the remaining Shares with respect to which the Optionee has exercised such Option, or any combination of such methods of payment. Shares shall be valued at their Fair Market Value on the date of exercise. 7.2 Number of Shares. Subject to Section 9 hereof, the Option Agreement shall state the number of Shares to which it pertains. 7.3 Option Price. The Option Price shall be determined by the Committee, in its sole discretion; provided, however, that in the case of a Nonqualified Stock Option, the Option Price shall not be less than 85% of the Fair Market Value of a Share as of the date the Option is granted, and, subject to the provisions of Section 4 hereof, in the case of an Incentive Stock Option, shall not be less than 100% of the Fair Market Value of a Share as of the date the Option is granted. 7.4 Option Period. Each Option granted under the Plan shall expire no later than ten years (or five years as provided in Section 4 hereof) from the date the Option is granted. Option Agreements shall contain provisions for the earlier expiration of the Options in the event of the Optionee's termination of employment as provided by Section 7.8 hereof. 7.5 Date of Vesting; Exercise. Subject to the terms and conditions of the Plan and the provisions of Section 3.2, each Option shall vest with respect to the Shares from and after each anniversary of the date on which such Option was granted -8- 9 (each, an "Anniversary") in the respective percentages in accordance with the following schedule:
Anniversary of Grant Percentage -------------------- ---------- First Anniversary 15% Second Anniversary 17.5% Third Anniversary 20% Fourth Anniversary 22.5% Fifth Anniversary 25%
The foregoing vesting is on a cumulative basis. Notwithstanding the foregoing sentence, the Committee in its discretion may determine at the time of grant of any Option that such Option shall not become exercisable before a specified time but at such specified time shall become exercisable as to all Shares as to which the Option has previously vested. In no event will any Option become exercisable under the Plan unless the Shares become Publicly Traded. For purposes of the Plan, "Publicly Traded" means that shares of Common Stock are registered under Section 12(b) or Section 12(g) of the Exchange Act or issued in a transaction which causes the Company to become subject to Section 15(d) of the Exchange Act. Notwithstanding the foregoing, in the event of a "Change in Control" the Committee may, in its sole discretion, determine that any Option granted under the Plan shall become exercisable in full or in part, whether or not it is then exercisable. For purposes of the Plan, a "Change in Control" shall be deemed to have occurred: -9- 10 (i) when any "person", as defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d) of the Exchange Act (but excluding the Parent, Medco Containment Services, Inc. ("Medco") and the Company (and any successor to the Parent, Medco or the Company which became a successor to the Parent, Medco or the Company in a transaction which did not result in a Change in Control), any Subsidiary or subsidiary of the Parent or Medco and any employee benefit plan sponsored or maintained by the Parent or Medco or their subsidiaries or the Company or any Subsidiary, including any trustee of such plan acting as trustee) directly or indirectly becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, as amended from time to time) of, or makes an offer to purchase, securities of the Parent, Medco or the Company representing 50 percent or more of the combined voting power of its then outstanding securities with respect to the election of directors; (ii) when, during any period of 24 consecutive months during the existence of the Plan, the individuals who, at the beginning of such period, constitute the Board of Directors of the Parent or Medco or the Board, as the case may be (the "Incumbent Directors"), cease for any reason other than death to constitute at least a -10- 11 majority thereof; provided, however, that a director who was not a director at the beginning of such 24- month period shall be deemed to have satisfied such 24- month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds of the directors of the Parent, Medco or the Company, as the case may be, who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 24-month period) or by prior operation of this Section 7.5(ii); (iii) when the shareholders of the Parent, Medco or the Company, as the case may be, approve a merger or consolidation of the Parent, Medco or the Company without the consent or approval of a majority of its Incumbent Directors; (iv) when there is a sale or disposition of all or substan- tially all of the Parent's, Medco's or the Company's assets; or (v) when the Company, the Parent or Medco adopts a plan of liquidation. Notwithstanding the foregoing, no Option shall become exercisable in full or in part because of a Change in Control of Medco unless, immediately preceding such Change in Control, Medco was in "control" of the Company within the meaning of the Exchange Act. The Committee may also determine that an Option shall -11- 12 become exercisable in full or in part, whether or not it is then exercisable, upon such circumstances or events as the Committee determines, in its sole discretion, merits special consideration. 7.6 Reorganization. In case the Company is merged or consolidated with another corporation, or in case of a reorganization, separation, or liquidation of the Company, the Board or the board of directors of any corporation assuming the obligations of the Company hereunder shall either (i) make appropriate provisions for the protection of any outstanding Options by the substitution on an equitable basis of appropriate securities of the Company, or appropriate securities of the merged, consolidated, or otherwise reorganized corporation, or the appropriate adjustment in the Option Price, or both, or (ii) give written notice to the Optionees that their Options must be exercised, to the extent then exercisable after giving due effect to Section 7.5 hereof, within 60 days of the date of such notice or the Options will terminate. 7.7 Assignability. No Option shall be assignable or transferable except by will or by the laws of descent and distribution and no Option may be exercised other than by an Optionee or, after the death of an Optionee, by that Optionee's personal representative, heirs or legatees. 7.8 Continuation with Company. 7.8.1 No Option shall be exercisable by an Optionee later than the expiration of the Option Period or 30 days (or such longer period determined by the Committee in its -12- 13 sole discretion) after termination of such Optionee's service as an employee or a Key Contractor, unless such termination of service occurs by reason of the Optionee's retirement with the consent of the Parent, the Company or the Subsidiary, as the case may be, or his death. If the Optionee's services are terminated because of his retirement with such consent or death (or if the Optionee dies within 30 days of such termination or 90 days of such retirement), the Optionee (or the representative of the estate or the heirs or legatees of a deceased Optionee) shall have the right to exercise the unexercised portion of the Option which the Optionee could have exercised as of the date of his retirement or death provided that notice of such exercise is given pursuant to Section 7.1 hereof before the expiration of the Option Period and within 90 days of the Optionee's retirement or one year of the Optionee's death, as the case may be. If the Optionee's services with the Parent, the Company or the Subsidiary are terminated because of the Optionee's violation of his duties to the Parent, the Company or the Subsidiary as he may from time to time have, the existence of which violation shall be determined by the Committee in its sole discretion (which determination shall be conclusive), all of the Optionee's Options shall terminate immediately as of the time of termination of the Optionee's services and the Optionee shall have no right after such termination to exercise any Option he might have exercised prior to his termination of service. Nothing contained in this -13- 14 Section 7.8.1 shall cause an Option to vest other than in accordance with the provisions of Section 7.1 hereof. 7.8.2 Nothing in the Plan or in any Option granted under it shall confer (or be deemed to confer) upon an Optionee any right to continue in the employ or continue to be retained by the Parent, the Company or any Subsidiary or interfere in any way with the right of the Parent, the Company or any Subsidiary to terminate his employment or retention at any time. 7.9 Rights as a Stockholder. An Optionee shall have no rights as a shareholder with respect to such Shares covered by any Option until the date the Company has issued and delivered such Shares to the Optionee, and the Optionee's name shall have been entered as the shareholder of record on the books of the Company and then only as to such Shares as are actually issued and delivered to the Optionee. 7.10 Securities Laws. The Company may require each Optionee to represent to the Company, in writing, when an Option is exercised, that such Optionee is exercising such Option for his own account for investment only and not with a view to distribution and that the Optionee will not make any sale, transfer, or other disposition of any Shares so purchased except (i) pursuant to a registration statement filed under the Securities Act of 1933, as amended, which the Securities and Exchange Commission has declared effective, (ii) pursuant to an opinion of counsel satisfactory in form and substance to the -14- 15 Company that said sale, transfer, or other disposition may be made without registration, or (iii) pursuant to a "no action" letter issued to the Optionee by the Securities and Exchange Commission. The Company may require each certificate representing Shares purchased upon the exercise of an Option to bear a legend stating that the Shares evidenced thereby may not be sold or transferred except in compliance with the Securities Act of 1933, as amended, and the provisions of the Plan. No Option may be granted or exercised at a time when such Option, or the granting or exercise thereof, may result in the violation of any law or governmental order or regulation. 7.11 Other Provisions. Option Agreements shall contain such other terms and conditions not inconsistent with the Plan as the Committee shall deem advisable or as shall be required by Section 422 of the Code. 8. Shares Available for Option. 8.1 Maximum. Subject to Sections 7.6 and 9 hereof, no more than 1,000,000 Shares shall be subject to purchase pursuant to Options granted under the Plan. At all times during the term of the Plan, the Company shall have reserved said number of Shares less an amount equal to the number of Shares which have been issued pursuant to the exercise of Options. At all times after termination of the Plan, the Company shall have reserved for issuance a number of Shares equal to the aggregate number of Shares subject to outstanding Options. -15- 16 8.2 Expiration or Termination. If any outstanding Option under the Plan expires for any reason or is terminated prior to the expiration date of the Plan as set forth in Section 6 hereof, the Shares allocable to any unexercised portion of such Option may again be subject to Options under the Plan. 8.3 $100,000 Limitation. Notwithstanding any other provision of this Plan to the contrary, the aggregate Fair Market Value (determined as of the time of grant) of the sum of (a) the Shares for which any Optionee is granted Incentive Stock Options and (b) the securities of the Company or the Parent or any Subsidiary for which such Optionee is be granted other incentive stock options (within the meaning of Section 422 of the Code), which are exercisable for the first time by such Optionee during any calendar year shall not exceed $100,000. 9. Recapitalization or Change in Par Value of Common Stock. The aggregate number of Shares purchasable under Options pursuant to the Plan and the number of Shares and the Option Price for Shares covered by each outstanding Option shall all be proportionately adjusted, as deemed appropriate by the Committee, if the Shares are split-up, converted, exchanged, reclassified, or in any way substituted for. The Committee shall also provide for appropriate adjustments of the numbers of Shares purchasable under the Plan and of outstanding Options in the event of stock dividends or distributions of assets or securities of other companies owned by the Company to stockholders relating to Common Stock for which the record date is prior to the date the Shares -16- 17 purchased by exercise of an Option are issued, except that no such adjustment shall be made for cash dividends or stock dividends of 10% or less (in the aggregate). Any such adjustment to an outstanding Option may include an adjustment of the Option Price or the number of Shares for which an Option may be exercised, or may provide for an escrow of assets or securities so distributed to be available upon future exercise, or any combination thereof, as the Committee deems appropriate. In the event of a change in the Company's presently authorized Common Stock which is limited to a change of all of its presently authorized Shares with par value into the same number of shares without par value, or any change of the then authorized Shares with par value into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be Shares as defined in Section 1.20 hereof, and no change in the number of Shares covered by each Option or in the Option Price shall take place. 10. Indemnification and Reliance. 10.1 Indemnification. Each person who is or shall have been a member of the Board or of the Committee shall be indemnified and held harmless by the Company against and from any and all loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit, or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under - -17- 18 the Plan and against and from any and all amounts paid by such person in settlement thereof (with the Company's written approval) or paid by such person in satisfaction of a judgment in any such action, suit, or proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject, however, to the condition that upon the institution of any such claim, action, suit, or proceeding, such person shall in writing give the Company an opportunity to intervene at its own expense on his behalf. The foregoing right of indemnification shall not be exclusive of any other right to which such person may be entitled as a matter of law or otherwise, or any power that the Company may have to indemnify such person or hold him harmless. 10.2 Reliance. Each member of the Board or of the Committee and each officer and employee of the Company in performing duties under the Plan shall be entitled to rely upon information and reports furnished in connection with the administration of this Plan by any duly authorized officer or agent of the Company. 11. Income Tax Withholding. If the Parent, the Company or a Subsidiary shall be required to withhold any amounts by reason of any federal, state or local tax rules or regulations in respect of the payment of cash or the issuance of Shares pursuant to the exercise of an Option, the Parent, the Company or such Subsidiary shall be entitled to deduct and withhold such amounts from any cash payments to be made to the Optionee. The Committee or the Board may establish such rules and procedures as they deem -18- 19 necessary or advisable in connection with the withholding of taxes relating to the exercise of any Option. 12. Amendment or Termination of Plan. The Plan may be terminated and may be modified or amended by the Committee or the Board at any time and from time to time; provided, however, that (i) no modification or amendment either increasing the aggregate number of Shares which may be issued under Options, materially increasing benefits accruing to Optionees, or materially modifying requirements as to eligibility to receive Options hereunder shall be effective without shareholder approval within one year of the date such amendment is adopted, and (ii) no such termination, modification, or amendment of the Plan shall alter or affect the terms of any then outstanding Options previously granted hereunder without the consent of the Optionee. 13. Monetary Set-Off. If at any time an Optionee is indebted to the Company, the Company may in the discretion of the Committee (a) withhold from the Optionee (i) following the exercise by an Optionee of an Option, Shares issuable to the Optionee having a Fair Market Value on the date of exercise up to the amount of indebtedness to the Company or (ii) following the sale by an Optionee of Shares received pursuant to the exercise of an Option, amounts due to an Optionee in connection with the sale of such Shares up to the amount of indebtedness to the Company, or (b) take any substantially similar action. -19- 20 14. Captions. Other than the definitions in Section 1 hereof, the captions are not part of this Plan and shall not be taken into account for purposes of interpreting the Plan. 15. Severability. Should any part, term or condition hereof be declared illegal, unenforceable or not in compliance with any other law, the validity of the remaining portions or provisions of this Agreement shall not be affected thereby, and the portions or provisions declared illegal, unenforceable or not in compliance with such law shall be and hereby are redrafted to conform and be in compliance with applicable law, while leaving the remaining portions of this Agreement intact. EX-4.4 3 MMG NON QUALIFIED STOCK OPTION AGREEMENT 1 EXHIBIT 4.4 1991 CLASS B NON-QUALIFIED STOCK OPTION (Non-Assignable) For _________ Shares To Purchase Common Stock of MEDICAL MARKETING GROUP, INC. Issued Pursuant to the 1991 Class B Stock Option Plan of Medical Marketing Group, Inc. (the "Plan") THIS CERTIFIES that as of Date~ , 199 (the "Date of Grant") name~ (the "Optionee") was granted an option (the "Option") to purchase at the Option Price of $amount per share all or any part of type out shares (# of shares~) fully paid and non-assessable shares (the "Shares") of the common stock, par value $.01 per share ("Common Stock"), of MEDICAL MARKETING GROUP, INC. (the "Company"), a Delaware corporation, upon and subject to the following terms and conditions: 1. Unless other indicated herein to the contrary, capitalized terms used in this Option Certificate shall have the same meaning as used in the Plan. Optionee is an Employee as defined in the Plan. 2. The Option shall be for a period of ten years (the "Option Period") and shall terminate on the tenth (10th) anniversary of the Date of Grant unless the Option terminates sooner pursuant to the terms of the Plan or this Option Certificate. 3. Subject to the terms and conditions of the Plan and this Option Certificate, the Option shall vest with respect to the Shares from and after each anniversary of the Date of Grant (each, an "Anniversary") in the respective percentages in accordance with the following schedule: 2
Anniversary of Grant Percentage -------------------- ---------- First Anniversary 15% Second Anniversary 17.5% Third Anniversary 20% Fourth Anniversary 22.5% Fifth Anniversary 25%
The foregoing vesting is on a cumulative basis. Notwithstanding the foregoing, in the event of a Change of Control, the Committee may, in its sole discretion, determine that the Option shall become exercisable in full or in part, whether or not it is then exercisable; provided, however, that the Option shall not become exercisable in full or in part because of a Change of Control of Medco, unless, immediately preceding such Change in Control, Medco was in "control" of the Company within the meaning of the Exchange Act. The Committee may also determine that the Option shall become exercisable, in full or in part, whether or not it is then exercisable, upon such circumstances or events as the Committee determines, in its sole discretion, merits special consideration. 4. The Optionee (or the representative of his estate or his heirs or legatees) may exercise the Option by giving written notice of exercise to the Company at its principal business office, specifying the number of Shares for which the Option is exercised, accompanied by payment in full of the Option Price for such Shares (together with any amount required for payroll withholding tax). If the Company has established a form for notice of exercise, the Optionee shall use such form. The Company shall cause certificates for the Shares so purchased to be delivered to Optionee or Optionee's personal representatives, heirs or legatees at its principal business office, following receipt of the notice of exercise and payment in full of the Option Price and any required withholding taxes. Payment of the Option Price shall be made in United States dollars in the form of cash, certified check or bank draft, or if the Committee so determines, by delivery to the Company of shares of Common Stock which the Optionee has owned for at least six months or by withholding Shares with respect to which the Optionee has exercised the Option having a Fair Market Value on the date of exercise equal to the sum of the Option Price for the withheld Shares and the remaining Shares with respect to which the Optionee has exercised the Option or any combination of such methods of payment. Shares shall be valued at Fair Market Value on the date of exercise. -2- 3 5. The unexercised portion of the Option (both vested and non-vested) shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following: 5.1 The tenth anniversary of the Date of Grant; 5.2 Subject to the provisions of Section 5.3 and 5.4 below, 30 days following the date of termination of Optionee's service as an Employee or a Key Contractor; provided, however, that if following such termination as an Employee, Optionee is retained as a Key Contractor or if following such termination as a Key Contractor Optionee is retained as an Employee, the Board or the Committee, in their sole discretion, may continue the Option for the balance of the term with respect to all or any portion of the Shares covered by it (in which case the Option shall not be deemed to have terminated) or may permit the termination to stand. Any such continuation shall not be deemed the grant of a new option. 5.3 If the Optionee retires as an Employee of the Company with the consent of the Company, the Option (both vested and non-vested) shall expire on the date of retirement, except for any portion thereof which was otherwise exercisable on the date of retirement, which shall expire unless exercised within a period of 90 days after the date of retirement. 5.4 If Optionee dies while an Employee or Key Contractor of the Company or within the 30 day period following the date of termination of Optionee's status as an Employee or Key Contractor (described in Section 5.2) or the 90 day period following retirement with the consent of the Company (described in Section 5.3), any unexercised portion of the Option which was otherwise exercisable on the date of death shall be exercisable by the representative of the estate or the heirs or legatees of the Optionee at any time within the one year period from date of death. 5.5 If the Optionee's services with the Parent, the Company or any Subsidiary are terminated because of the Optionee's violation of his duties to the Parent, the Company or any Subsidiary, including but not limited to, violation of Optionee's obligations contained in any agreement with the Parent, the Company or any Subsidiary, or Optionee's violation of any other obligation written or otherwise to the Parent, Company or any Subsidiary, as he may from time to time have, the existence of which violation shall be determined by the Committee in its sole discretion (which determination shall be conclusive), the Option shall terminate immediately as of the time of termination of the Optionee's services and the Optionee shall have no right after such termination to exercise any Option the Optionee might have exercised prior to his termination of service. -3- 4 5.6 In no event, however, shall the Option be exercisable after the expiration of ten years from the Date of Grant. Nothing in this Section 5 shall cause the Option to vest other than in accordance with the provisions of Section 3. 6. The parties hereto acknowledge that any breach of the Optionee of the non-competition covenant in any agreement with the Parent, the Company or any Subsidiary, the Optionee would cause irreparable damage to the Company. Accordingly, notwithstanding anything to the contrary contained herein, any breach or threatened breach by Optionee of the foregoing non-competition clause shall entitle the Company, in addition to any other legal and equitable remedies available to it, to declare forfeited any and all stock options granted by the Company to the Optionee, whether or not such options have vested or been exercised. The parties further agree that upon forfeiture, the Company is entitled to recover, and Optionee will disgorge to the Company, any profits or proceeds acquired from the Option. The forfeiture provision shall survive the termination of any such agreement and thereafter expire concurrently with the expiration date set forth in the non-competition covenant. The parties hereto understand and intend that the foregoing provisions shall be construed as separable and divisible, and the unenforceability of any restriction will not affect the enforceability of the remaining restrictions and that one or more or all of such restrictions may be enforced in whole or in part as the circumstances warrant. Should any court find any provision of such agreement unenforceable, the parties hereby agree that it is their intent to narrow the scope of such provision, including, without limitation, the forfeiture provision, in order to enforce its intent to the broadest extent permissible. 7. In case the Company is merged or consolidated with another corporation, or in case of a reorganization, separation, or liquidation of the Company, the Board or the board of directors of any corporation assuming the obligations of the Company under the Plan shall either (i) make appropriate provisions for the protection of the Option by the substitution on an equitable basis of appropriate securities of the Company, or appropriate securities of the merged, consolidated, or otherwise reorganized corporation, or the appropriate adjustment in the Option Price, or both, or (ii) give written notice to the Optionee that the Option must be exercised, to the extent exercisable after giving due effect to Section 7.5 of the Plan, within 60 days of the date of such notice or the Option will terminate. 8. The Option shall not be assignable or transferable except by will or by the laws of descent and distribution, and the Option may not be exercised other than by the Optionee or, after the death of the Optionee, by his personal representative, heirs or legatees. -4- 5 9. The Optionee shall have no rights as a stockholder with respect to the Shares until the date the Company has issued and delivered the Shares to the Optionee, and the Optionee's name shall have been entered as the stockholder of record on the books of the Company and then only as to such Shares as are actually issued and delivered to the Optionee. 10. The Company may require the Optionee to represent to the Company, in writing, when the Option is exercised, that the Optionee is exercising the Option for the Optionee's own account for investment only and not with a view to distribution and that the Optionee will not make any sale, transfer or other disposition of any Shares purchased except (i) pursuant to a registration statement filed under the Securities Act of 1933, as amended, which the Securities and Exchange Commission has declared effective, (ii) pursuant to an opinion of counsel satisfactory in form and substance to the Company that the sale, transfer or other disposition may be made without registration, or (iii) pursuant to a "no action" letter issued to the Optionee by the Securities and Exchange Commission. The Company may require each share certificate representing Shares to bear a legend stating that the Shares evidenced thereby may not be sold or transferred except in compliance with the Securities Act of 1933, as amended, and the provisions of the Option and the Plan. Notwithstanding anything contained herein to the contrary, the Option shall not be exercisable at a time when the exercise thereof may result in the violation of any law or governmental order or regulation. 11. The aggregate number of Shares purchasable under the Option and the Option Price for the Shares shall all be proportionately adjusted, as deemed appropriate by the Committee, if the Company's shares of Common Stock are split-up, converted, exchanged, reclassified, or in any way substituted for. The Committee shall also provide for appropriate adjustments of the number of Shares purchasable under the Option in the event of stock dividends or distributions of assets or securities of other companies owned by the Company to stockholders relating to its Common Stock for which the record date is prior to the date the Shares purchased by exercise of the Option are issued, except that no such adjustment shall be made for extraordinary cash dividends of 10% or less of the Fair Market Value of the Common Stock or stock dividends of 10% or less. Any such adjustment may include an adjustment of the Option Price or the number of Shares for which the Option may be exercised, or may provide for an escrow of assets or securities so distributed to be available upon future exercise, or a combination thereof, as the Committee deems appropriate. In the event of a change in the Company's presently authorized Common Stock which is limited to a change of all of its presently authorized shares of Common Stock with par value into the same number of shares without par value, or any change of the then authorized shares of Common Stock with par value into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be -5- 6 Shares, and no change in the number of Shares covered by the Option or in the Option Price shall take place. 12. If the Parent, the Company or a Subsidiary shall be required to withhold any amounts by reason of any federal, state or local tax rules or regulations in respect of the payment of cash or the issuance of Shares pursuant to the exercise of the Option, the Parent, the Company or such Subsidiary shall be entitled to deduct and withhold such amounts from any cash payments to be made to the Optionee. In any event, the Optionee shall (i) make available to the Parent, the Company or such Subsidiary, promptly when requested by the Parent, the Company or such Subsidiary, sufficient funds to meet the requirements of such withholding, or, (ii) to the extent permitted by the Committee, irrevocably authorize the Company to withhold from the Shares otherwise issuable to the Optionee as a result of such exercise a number of Shares having a Fair Market Value, as of the date the withholding tax obligation arises (the "Tax Date") which alone, or when added to funds paid to the Parent, the Company or such Subsidiary by the Optionee equal the amount of the minimum withholding tax obligation (the "Withholding Election") and the Parent, the Company or such Subsidiary shall be entitled to take and authorize such steps as it may deem advisable in order to have such funds made available to the Parent, the Company or such Subsidiary out of any funds or property due or to become due to the Optionee. The Committee or the Board may establish such rules and procedures as they deem necessary or advisable in connection with the withholding of taxes relating to the exercise of the Option. 13. If at any time an Optionee is indebted to the Company, the Company may in the discretion of the Committee (a) withhold from the Optionee (i) following the exercise by an Optionee of an Option, Shares issuable to the Optionee having a Fair Market Value on the date of exercise up to the amount of indebtedness to the Company or (ii) following the sale by an Optionee of Shares received pursuant to the exercise of an Option, amounts due to an Optionee in connection with the sale of such Shares up to the amount of indebtedness to the Company, or (b) take any substantially similar action. 14. Nothing in the Plan or this Option Certificate shall confer (or be deemed to confer) upon the Optionee any right to continue in the employ or continue to be retained by the Parent, the Company or any Subsidiary or interfere in any way with the right of the Parent, the Company or any Subsidiary to terminate the Optionee's employment or retention at any time. 15. Each notice relating to the Option shall be in writing and delivered in person or by certified mail to the proper address, Each notice to the Company shall be addressed to it at: MEDICAL MARKETING GROUP, INC., 100 Summit Avenue, Montvale, New Jersey 07645, Attention: Vice President - Treasurer. Each notice to Optionee shall be addressed to Optionee at Optionee's address set forth below. Anyone to whom a -6- 7 notice may be given under the Option may designate a new address by notice to that effect. Each notice shall be deemed to have been given on the day it was received. The Company may require that any notice be on a specified form established by the Company. 16. The Option and this Option Certificate are issued to, and are subject to all of the terms and conditions of the Plan, the terms, conditions and definitions of which are hereby incorporated as though set forth at length, and the receipt of a copy of which the Optionee hereby acknowledges by this signature below. A determination by the Committee as to any questions which may arise with respect to the interpretation of the provisions of the Option or the Plan shall be final. The Committee may, from time to time, authorize and establish such rules, regulations and revisions thereof not inconsistent with the provisions of the Plan, as it may deem advisable. Optionee agrees to comply with all such rules, regulations and revisions. The Option shall be governed by the laws of the State of Delaware applicable to agreements made and to be fully performed therein. 17. All references to the masculine gender shall be deemed to include the feminine gender, as the context may require. WITNESS the signature of the Company's duly authorized officer and the Optionee. MEDICAL MARKETING GROUP, INC. By:_______________________ Douglas W. Wamsley Vice President - Legal ACCEPTED AND AGREED TO: By:_______________________ Optionee (Address) -7- EX-4.5 4 MMG 1991 SPECIAL NON QUALIFIED STOCK OPTION PLAN 1 EXHIBIT 4.5 MEDICAL MARKETING GROUP, INC. 1991 SPECIAL NON-QUALIFIED STOCK OPTION PLAN 1. Definitions. The terms below shall be defined as indicated. 1.1 Board means the Board of Directors of the Company. 1.2 Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. 1.3 Committee means the Stock Option Plan Committee of the Board described in Section 3 or such other committee as the Board may appoint from time to time to administer the Plan. 1.4 Common Stock means the Company's common stock, par value $.01, subject to the provisions of Section 9. 1.5 Company means Medical Marketing Group, Inc., a Delaware corporation, and any successor corporation which adopts the Plan. 1.6 Designated Officer means any officer of the Company that the Board or the Committee may designate pursuant to Section 3 to act on their behalf with respect to the Plan. 1.7 Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto. 1.8 Fair Market Value means, on a specified date, the last sales price of a Share traded on the over-the-counter market, as reported on the National Association of Securities Dealers Automated Quotation System, or the last closing price for a Share on the stock exchange, if any, on which Shares are primarily traded (or if no Shares were traded on such date, then on the last previous date on which any Shares were so traded), or if none of the above is applicable, the value of a Share for such date as established by the Committee, using any reasonable method of valuation. 1.9 Key Contractors means consultants, agents and other persons (including officers) engaged by the Company, or by a Subsidiary, to render services to or on behalf of the Company or a Subsidiary. 1.10 Employees means persons employed by the Company or a Subsidiary on a full-time basis (including officers), who are compensated for such employment by a regular salary. 2 1.11 Option means an option to purchase Shares granted by the Company pursuant to the Plan. 1.12 Option Agreement means a written agreement as described in Section 7 between the Company and the Optionee evidencing an Option. 1.13 Option Period means the period from the date of the granting of an Option to the date on which that Option can no longer be exercised. 1.14 Option Price means the price to be paid for the Shares purchased pursuant to an Option. 1.15 Optionee means any person who is granted an Option under the Plan. 1.16 Parent means a parent of the Company as defined under Section 424 of the Code, including, without limitation, Medco Containment Services, Inc. 1.17 Plan means the Company's 1991 Special Non-Qualified Stock Option Plan, as adopted by the Board in substantially the form set forth herein and as the same may be amended or otherwise modified from time to time. 1.18 Shares means shares of Common Stock. 1.19 Subsidiary means a subsidiary of the Company as defined under Section 424 of the Code. 2. Purpose. The Plan is intended to encourage ownership of Common Stock by Employees and Key Contractors, upon whose judgment and interest the Company is dependent for its successful operation and growth, in order to increase their proprietary interest in the Company's success and to encourage them to remain in the employ of the Company. 3. Administration. 3.1 Committee. The Plan shall be administered by the Board or, if the Board so determines, by a Committee appointed by the Board from among its members. The Board or the Committee may designate one or more Designated Officers, each of whom shall be authorized and empowered to exercise such functions and make such determinations with respect to the Plan and the administration thereof as the Board or the Committee shall specify in the resolution designating such officer. Any provision of the Plan to the contrary notwithstanding, (a) in the event of any inconsistency between any action taken by a Designated Officer and any action taken by the Committee concerning the Plan or any -2- 3 Options hereunder, the action taken by the Committee shall govern, (b) in the event of any inconsistency between any action taken by a Designated Officer or the Committee and any action taken by the Board concerning the Plan or any Options hereunder, the action taken by the Board shall govern and (c) no Designated Officer may take any action except to the extent authorized to do so by a resolution of the Board or the Committee. 3.2 Determination of Option Terms. Subject to the provisions of Section 12, the Board, the Committee or any Designated Officer shall have authority to determine the vesting and exercise schedule with respect to Options, the persons to whom Options shall be granted, the number of Shares to be covered by each Option, the time or times at which Options shall be granted and the terms and provisions of the Options, and to make all other determinations necessary or advisable for the administration of the Plan; provided, however, that in no event shall the vesting schedule for any Option permit the Option to become exercisable during the first five years in which the Option is outstanding at an average rate per year of more than 20% of the total number of shares issuable under the Option, except that in connection with the grant of such Option, the Board, the Committee or any Designated Officer then serving as the President or a Senior Executive Vice President of the Company may waive such limitation. Subject to the consent of any Optionee affected, the Board, the Committee or any Designated Officer may cancel any outstanding Options and issue new Options upon such terms and upon such conditions as the Board, the Committee or such Designated Officer may determine. 3.3 Interpretation and Construction. The interpretation and construction by the Board, the Committee or any Designated Officer of any provision of the Plan or of any Option Agreement shall be final and conclusive. 4. Eligible Persons. The Board, the Committee or any Designated Officer, as the case may be, may grant Options only to Employees or Key Contractors; provided, however, that no Option shall be granted to any individual who, at the time such Option is granted, is an "officer" of the Company, as such term is defined in Rule 16a-1(f) under the Exchange Act. 5. Grant of Options. 5.1 Procedure. Subject to the provisions of Section 8.1. the Board, the Committee or any Designated Officer may (but shall not be required to) grant Options, provided that the person to whom the Option is to be granted subsequently becomes a party to an Option Agreement. -3- 4 5.2 Additional Grants. Nothing contained in the Plan shall be construed to preclude the granting of an Option or Options to an Optionee in addition to an Option or Options for the purchase of Shares already held by that Optionee or the granting of more than one Option to an Optionee at the same time. 5.3 Subject to Exchange Rules. Any and all grants of Options shall be subject to all applicable rules and regulations of any exchange on which the Company's Common Stock may then be listed. 6. Effective and Expiration Dates of Plan. The Plan shall be effective on July 1, 1991. No Option shall be granted after June 30, 2001. 7. Option Agreements. Option Agreements shall be in such form as the Board, the Committee or any Designated Officer shall approve or determine; provided, however, that all Option Agreements shall comply with and be subject to the following terms and conditions: 7.1 Manner, Time, and Medium of Payment. An Option shall be exercised in the manner set forth in the Option Agreement relating thereto and payment in full of the Option Price for all Shares shall be made at the time of exercise. Payment shall be in United States dollars in the form of cash, certified check or bank draft, or with the consent of the Committee, by delivery of fully paid Shares valued at their Fair Market Value on the date of exercise, or, if the Board, the Committee or any Designated Officer so determines, by withholding Shares with respect to which the Optionee has exercised such Option having a Fair Market Value on the date of exercise equal to the sum of the Option Price for the withheld Shares and the remaining Shares with respect to which the Optionee has exercised such option, or any combination of such methods of payment. 7.2 Number of Shares. Subject to Section 9, the Option Agreement shall state the number of Shares to which it pertains. 7.3 Option Price. The Option Price shall be determined by the Board, the Committee or any Designated Officer. Notwithstanding the foregoing, subject to Section 9, except for options which are given in substitution for options of any parent, subsidiary, predecessor to or party to a merger or reorganization with or into the Company, the Option Price shall not be less than the Fair Market Value of a Share on the date the Option is granted. -4- 5 7.4 Option Period. Each Option granted under the Plan shall expire no later than fifteen years from the date the Option is granted. Any Option Agreement may contain provisions for the earlier expiration of the Option in the event of the Optionee's termination of employment, retirement or death or in the event of a violation by an Optionee of any of such Optionee's duties to the Company or any Subsidiary. 7.5 Date of Exercise. An Option may be exercised, to the extent vested, in whole or in part from time to time during the Option Period. Notwithstanding the foregoing, (i) the Board, the Committee or any Designated Officer in his, her or its sole discretion may determine at the time of grant of any Option that such Option shall not become exercisable before a specified time but at such specified time shall become exercisable as to all Shares as to which the Option has previously vested, and (ii) an Option shall become exercisable in full or in part, whether or not it is then exercisable, upon such circumstances or events as the Board, the Committee or any Designated Officer determines, in his, her or its sole discretion. 7.6 Reorganization. In case the Company is merged or consolidated with another corporation, or in case of a reorganization, separation or liquidation of the Company, the Board or the board of directors of any corporation assuming the obligations of the Company hereunder shall either (i) make appropriate provisions for the protection of any outstanding options by the substitution on an equitable basis of appropriate securities of the Company, or appropriate shares or other securities of the merged, consolidated, or otherwise reorganized corporation, or the appropriate adjustment in the Option Price, or both, or (ii) give written notice to Optionees that their Options must be exercised, to the extent then exercisable after giving due effect to Section 7.5, within 60 days of the date of such notice or they will terminate, and to the extent that such Options are not exercised within such 60-day period they shall terminate and be of no further effect. 7.7 Assignability. No Option shall be assignable or transferable except by will, by the laws of descent and distribution or pursuant to a qualified domestic relations order (as such term is defined in the Code), and no Option may be exercised other than by an Optionee or, after the death of an Optionee, by that Optionee's personal representatives, heirs, or legatees. 7.8 Violation of Agreements. The Board, the Committee or any Designated Officer, in his, her or its sole discretion may require that any Option Agreement include provisions that in the event of a violation by the Optionee of his or-her duties to the Company or any Subsidiary (whether before or -5- 6 after termination of the Optionee's services), the existence of which violation shall be determined by the Board, the Committee or any Designated Officer in his, her or its sole discretion (which determination shall be conclusive), the Optionee shall remit to the Company all income that he or she has realized during the twenty-four month period prior to such violation, or that he or she subsequently realizes, as a result of his or her exercise from time to time, in whole or in part, of the Option, before federal, state or local taxes. 7.9 No Right to Continue with Company. Nothing in the Plan or in any Option granted under the Plan shall confer (or be deemed to confer) any right on any Optionee to continue as an Officer or as an employee of the Company or any Subsidiary or shall interfere in any way with the right of the Company or any Subsidiary to terminate such status at any time, with or without cause and with or without notice. 7.10 Rights as a Stockholder. An Optionee shall have no rights as a stockholder with respect to Shares covered by any Option until the date the Company has issued or delivered such Shares to the Optionee, and then only as to such Shares as are actually issued and delivered to the Optionee. 7.11 Other provisions. Option Agreements shall contain such other terms and conditions not inconsistent with the Plan as the Board, the Committee or any Designated Officer shall deem advisable. 7.12 Compliance with Law. Notwithstanding any provision of the Plan or any Option Agreement to the contrary, no Option may be granted or exercised at any time when such Option or the granting or exercise thereof or payment therefor may result in the violation of any law or governmental order or regulation. 7.13 Securities Laws. The Company intends to register the Shares issuable pursuant to exercise of Options under the Securities Act of 1933, as amended, and to effect similar compliance under applicable state laws, but shall be under no obligation to do so. The Board, the Committee or any Designated Officer may require, as a condition of the issuance and delivery of certificates evidencing Shares issuable pursuant to exercise of Options, that the Optionee make such covenants, agreements and representations, including, without limitation, as to compliance with applicable securities laws, and that such certificates bear such legends, as the Board, the Committee or such Designated Officer in his, her or its sole discretion deems necessary or desirable. -6- 7 8. Shares Available for Option. 8.1 Maximum. Subject to Sections 7.6 and 9, no more than 400,000 Shares shall be subject to purchase pursuant to Options granted under the Plan, which Shares may be either Shares held in treasury or authorized but unissued Shares. At all times during the term of the Plan, the Company shall have reserved that number of Shares less an amount equal to the number of Shares held in treasury and the number of Shares which have been issued pursuant to the exercise of Options. At all times after termination of the Plan, the Company shall have reserved for issuance a number of Shares equal to the aggregate number of Shares subject to outstanding Options less the number of Shares held in treasury. 8.2 Expiration or Termination. If any outstanding Option under the Plan expires for any reason or is terminated prior to the expiration date of the Plan as set forth in Section 6, the Shares allocable to any unexercised portion of such Option may again be subject to an Option. 9. Recapitalization or Change in Par Value of Common Stock. The aggregate number of Shares purchasable under Options granted and which may be granted pursuant to the Plan and the Option Price for Shares covered by each outstanding Option shall all be proportionately adjusted, as deemed appropriate by the Board, the Committee or any Designated Officer if the Shares are split up, converted, exchanged, reclassified or in any way substituted for. The Board, the Committee or such Designated Officer shall provide for appropriate adjustments of the numbers of shares purchasable under the Plan and of outstanding Options in the event of stock dividends or distributions of assets or securities of other companies owned by the Company to stockholders relating to Common Stock for which the record date is prior to the date the Shares purchased by exercise of an Option are issued or transferred, except that no such adjustment shall be made for cumulative stock dividends of 10% or less (in the aggregate) or cash dividends. Any such adjustment may include an adjustment of the Option Price or the number of Shares for which an Option may be exercised, or may provide for an escrow of assets or securities so distributed to be available upon future exercise. In the event of a change in the Company's presently authorized Common Stock which is limited to a change of all of its presently authorized Shares of Common Stock with par value into the same number of shares without par value, or any change of the then authorized Shares of Common Stock with par value into the same number of shares of Common Stock with a different par value, the shares resulting from any such change shall be deemed to be Shares as defined in Section 1, and no change in the number of Shares covered by each Option or in the Option Price shall take place. -7- 8 10. Indemnification; Reliance; Exculpation. 10.1 Indemnification. Each person who is or shall have been a member of the Board or of the Committee and each Designated Officer shall be indemnified and held harmless by the Company against and from any and all loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit, or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof (with the Company's written approval) or paid by such person in satisfaction of a judgment in any such action, suit, or proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject, however, to the condition that upon the institution of any such claim, action, suit, or proceeding, such person shall in writing give the Company an opportunity to intervene at the Company's expense on his or her behalf. The foregoing right of indemnification shall not be exclusive of any other right to which such person may be entitled as a matter of law or otherwise, or any power that the Company may have to indemnify such person or hold him or her harmless. 10.2 Reliance. Each member of the Board or of the Committee, each Designated Officer and each other officer and employee of the Company in performing duties under the Plan shall be entitled to rely upon information and reports furnished in connection with the administration of this Plan by any duly authorized officer or agent of the Company. 10.3 Exculpation. No member of the Board or of the Committee and no Designated Officer shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted under the Plan. 11. Income Tax Withholding. The Board, the Committee or any Designated Officer in his, her or its sole discretion may require that any Option Agreement include provisions that if the Company or a Subsidiary shall be required to withhold any amounts by reason of any federal, state or local tax rules or regulations in respect of the issuance of Shares pursuant to the exercise of an Option, the Company or the Subsidiary shall be entitled to deduct and to withhold such amount from any cash payments to be made to the Optionee. In any event, the Optionee shall either (i) make available to the Company or Subsidiary, promptly when requested by the Company or such Subsidiary, sufficient funds or, if the Option Agreement so provides, Shares (valued at Fair Market Value as of the date the withholding tax obligation arises (the "Tax Date")), to meet the requirements of such withholding, or (ii) to the extent permitted by the Board, the Committee or any Designated Officer, irrevocably authorize the Company to withhold -8- 9 from the Shares otherwise issuable to the Optionee as a result of such exercise a number of Shares having a Fair Market Value as of the Tax Date which alone, or when added to funds paid or Shares delivered to the Company or the Subsidiary by the Optionee, equal the amount of the minimum withholding tax obligation (the "Withholding Election") and the Company or such Subsidiary shall be entitled to take and authorize such steps as it may deem advisable in order to have such funds or Shares made available to the Company or such Subsidiary out of any funds or property due or to become due to the Optionee. An Optionee's Withholding Election may only be made prior to the Tax Date and may be disapproved by the Board, the Committee or any Designated Officer. The Board, the Committee or any Designated Officer may establish such rules and procedures as he, she or it may deem necessary or advisable in connection with the withholding of taxes relating to the exercise of any Option. 12. Amendment or Termination of Plan. The Plan may be terminated and may be modified or amended by the Board or the Committee at any time and from time to time; provided, however, that no such termination, modification, or amendment of the Plan shall alter or affect the terms of any then outstanding Options previously granted hereunder without the consent of the holder thereof. 13. Set-Off. If at any time an Optionee is indebted to the Company or any Subsidiary, the Company may in the discretion of the Board, the Committee or any Designated Officer (a) withhold from the Optionee (i) following the exercise by the Optionee of an Option, Shares issuable to the Optionee having a Fair Market Value on the date of exercise up to the amount of indebtedness to the Company or (ii) following the sale by an Optionee of Shares received pursuant to the exercise of an Option, amounts due to an Optionee in connection with the sale of such Shares up to the amount of indebtedness to the Company, or (b) take any substantially similar action. The Board, the Committee or any Designated Officer may establish such rules and procedures as he, she or it may deem necessary or advisable in connection with the taking of any action contemplated by this Section 13. 14. Headings. The section headings contained herein have no substantive meaning or content and are not part of this Plan. -9- EX-4.6 5 MMG 1991 SPECIAL NON QUALIFIED STOCK OPTION AGMNT 1 EXHIBIT 4.6 1991 SPECIAL NON-QUALIFIED STOCK OPTION (Non-Assignable) For Shares~ Shares To Purchase Common Stock of MEDICAL MARKETING GROUP, INC. Issued Pursuant to the 1991 Special Non-Qualified Stock Option Plan of Medical Marketing Group, Inc. (the "Plan") THIS CERTIFIES that as of Date~, 1992 (the "Date of Grant") Name~ (the "Optionee") was granted an option (the "Option") to purchase at the Option Price of $Amount~ per share all or any part of type out shares~ (# of shares~ ) fully paid and non-assessable shares (the "Shares") of the common stock, $.01 par value ("Common Stock", of MEDICAL MARKETING GROUP, INC. (the "Company"), a Delaware corporation, upon and subject to the following terms and conditions: 1. Unless other indicated herein to the contrary, capitalized terms used in this Option Certificate shall have the same meaning as used in the Plan. The Optionee is an Employee as defined in the Plan. 2. The Option shall be for a period of fifteen years (the "Option Period") and shall terminate on the fifteenth (15th) anniversary of the Date of Grant unless the Option terminates sooner pursuant to the terms of the Plan or this Option Certificate. 3. Subject to the terms and conditions of the Plan and this Option Certificate, the Option shall vest with respect to the Shares from and after each anniversary of the Date of Grant (each, an "Anniversary") in the respective percentages in accordance with the following schedule:
Anniversary of Grant Percentage -------------------- ---------- First Anniversary 15% Second Anniversary 17.5% Third Anniversary 20% Fourth Anniversary 22.5% Fifth Anniversary 25%
2 The foregoing vesting is on a cumulative basis. Notwithstanding the foregoing, the Board, the Committee or any Designated Officer may determine that the Option shall become exercisable in full or in part, whether or not it is then exercisable; provided, however, that the Option shall not become exercisable in full or in part, whether or not it is then exercisable, upon such circumstances or events as the Board, the Committee or any Designated Officer determines, in his, her or its sole discretion, merit special consideration. 4. The Optionee (or any other person permitted to exercise the Option pursuant to the terms hereof) may exercise the Option by giving written notice of exercise to the Company at its principal business office, specifying the number of Shares for which the Option is exercised, accompanied by payment in full of the Option Price for such Shares (together with any amount required for payroll withholding tax). If the Company has established a form for notice of exercise, the Optionee shall use such form. The Company shall cause certificates for the Shares so purchased to be delivered to the Optionee or such other person permitted to exercise the Option pursuant to the terms hereof at the Company's principal business office, following receipt of the notice of exercise and payment in full of the Option Price and any required withholding taxes. Payment of the Option Price shall be made in United States dollars in the form of cash, certified check or bank draft, or, with the consent of the Committee, by delivery to the Company of fully paid Shares valued at their Fair Market Value on the date of exercise or, if the Board, the Committee or any Designated Officer so determines, by withholding Shares with respect to which the Optionee has exercised the Option having a Fair Market Value on the date of exercise equal to the sum of the Option Price for the withheld Shares and the remaining Shares with respect to which the Optionee has exercised the Option, or any combination of such methods of payment. 5. The unexercised portion of the Option (both vested and non-vested) shall automatically and without notice terminate and become null and void on the fifteenth anniversary of the Date of Grant, subject, however, to the following: 5.1 Subject to the provisions of Section 5.2 and 5.3 below, the Option shall expire 30 days following the date of -2- 3 termination of the Optionee's service as an Employee or a Key Contractor unless (i) following such termination as an Employee the Optionee is retained as a Key Contractor following such termination as a Key Contractor the Optionee is retained as a Key Employee and (ii) the Board, the Committee or any Designated Officer, in his, her or its sole discretion, elects in writing to continue the Option for the balance of the term with respect to all or any portion of the Shares covered by it (in which case the Option shall not be deemed to have terminated). Any such continuation shall not be deemed the grant of a new option. 5.2 If the Optionee retires as an Employee with the consent of the Company, the Option (both vested and non- vested) shall expire on the date of retirement, except for any portion thereof which was otherwise exercisable on the date of retirement, which shall expire unless exercised within a period of 90 days after the date of retirement. 5.3 If the Optionee dies while an Employee or Key Contractor or within the 30 day period following the date of termination of the Optionee's status as an Employee or Key Contractor (described in Section 5.1) or the 90 day period following retirement with the consent of the Company (described in Section 5.2), any unexercised portion of the Option which was otherwise exercisable on the date of death shall be exercisable by the representative of the estate or the heirs or legatees of the Optionee at any time within the one year period from date of death. 5.4 If the Optionee's services with the Parent, the Company or any Subsidiary are terminated because of the Optionee's violation of his or her duties to the Parent, the Company or any Subsidiary, including but not limited to, violation of the Optionee's obligations contained in any agreement with the Parent, the Company or any Subsidiary, or the Optionee's violation of any other obligation, written or otherwise, to the Parent, the Company or any Subsidiary, as the Optionee may from time to time have, the existence of which violation shall be determined by the Board, the Committee or any Designated Officer in his, her or its sole discretion (which determination shall be conclusive), the Option shall terminate immediately as of the time of such determination and the Optionee shall have no right after such determination to exercise any portion of the Option that the Optionee might have exercised prior to such determination. 5.5 In no event, however, shall the Option be exercisable after the expiration of fifteen years from the Date of Grant. Nothing in this Section 5 shall cause the Option to vest other than in accordance with the provisions of Section 3. -3- 4 6. The parties hereto acknowledge that any breach by the Optionee of the non-competition covenant in any agreement with the Parent, the Company or any Subsidiary would cause irreparable damage to the Company. Accordingly, notwithstanding anything to the contrary contained herein, any breach or threatened breach by the Optionee of the foregoing non- competition clause shall entitle the Company, in addition to any other legal and equitable remedies available to it, to declare forfeited any and all stock options granted by the Company to the Optionee, whether or not such options have vested or been exercised. The parties further agree that upon forfeiture, the Company Is entitled to recover, and the Optionee will disgorge to the Company, any profits or proceeds acquired from the Option within the twelve months preceding such forfeiture. The forfeiture and disgorgement provisions shall survive the termination of any such agreement and thereafter expire concurrently with the expiration date set forth in the non- competition covenant. The parties acknowledge that such forfeiture and disgorgement shall constitute liquidated damages for the Optionee's breach of such non-competition covenant. The parties hereto understand and intend that the foregoing provisions shall be construed as separable and divisible, and the unenforceability of any restriction will not affect the enforceability of the remaining restrictions and that one or more or all of such restrictions may be enforced in whole or in part as the circumstances warrant. Should any court find any provision of such agreement unenforceable, the parties hereby agree that it is their intent to narrow the scope of such provision, including, without limitation, the forfeiture provision, in order to enforce its intent to the broadest extent permissible. 7. In case the Company is merged or consolidated with another corporation, or in case of a reorganization, separation, or liquidation of the Company, the Board or the board of directors of any corporation assuming the obligations of the Company under the Plan shall either (i) make appropriate provisions for the protection of the Option by the substitution on an equitable basis of appropriate securities of the Company, or appropriate shares or other securities of the merged, consolidated, or otherwise reorganized corporation, or the appropriate adjustment in the Option Price, or both, or (ii) give written notice to the Optionee that the Option must be exercised, to the extent exercisable after giving due effect to Section 7.5 of the Plan, within 60 days of the date of such notice or the Option will terminate, and to the extent that the Option is not exercised within such 60-day period it shall terminate and be of no further effect. -4- 5 8. The Option shall not be assignable or transferable except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order (as such term is defined in the Code), and the Option may not be exercised other than by the Optionee or, after the death of the Optionee, by the Optionee's personal representative, heirs or legatees. 9. The Optionee shall have no rights as a stockholder with respect to the Shares until the date the Company has issued and delivered the Shares to the Optionee, and the Optionee's name shall have been entered as the stockholder of record on the books of the Company, and then only as to such Shares as are actually issued and delivered to the Optionee. 10. The Company may require the Optionee to represent to the Company, in writing, when the Option is exercised, that the Optionee is exercising the Option for the Optionee's own account for investment only and not with a view to distribution and that the Optionee will not make any sale, transfer or other disposition of any Shares purchased except (i) pursuant to a registration statement filed under the Securities Act of 1933, as amended, which the Securities and Exchange Commission has declared effective, (ii) pursuant to an opinion of counsel satisfactory in form and substance to the Company that the sale, transfer or other disposition may be made without registration, or (iii) pursuant to a "no action" letter issued to the Optionee by the Securities and Exchange Commission. The Company may require each share certificate representing Shares to bear a legend stating that the Shares evidenced thereby may not be sold or transferred except in compliance with the Securities Act of 1933, as amended, and the provisions of this Option Certificate and the Plan. Notwithstanding anything contained herein to the contrary, the Option shall not be exercisable at a time when the exercise thereof may result in the violation of any law or governmental order or regulation. 11. The aggregate number of Shares purchasable under the Option and the Option Price for the Shares shall be proportionately adjusted, as deemed appropriate by the Board, the Committee or any Designated Officer, if the Company's shares of Common Stock are split up, converted, exchanged, reclassified, or in any way substituted for. The Board, the Committee or any Designated Officer shall also provide for appropriate adjustments of the number of Shares purchasable under the Option in the event of stock dividends or distributions of assets or securities of other companies owned by the Company to stockholders relating to Common Stock for which the record date is prior to the date the Shares purchased by exercise of the Option are issued, except that no such adjustment shall be made for cumulative stock dividends of 10% or less (in the aggregate) or cash dividends. -5- 6 Any such adjustment may include an adjustment of the Option Price or the number of Shares for which the Option may be exercised, or may provide for an escrow of assets or securities so distributed to be available upon future exercise, or a combination thereof, as the Board, the Committee or any Designated Officer deems appropriate. In the event of a change in the Company's presently authorized Common Stock which is limited to a change of all of its presently authorized shares of Common Stock with par value into the same number of shares without par value, or any change of the then authorized shares of common Stock with par value into the same number of shares with a different par value, the shares resulting from-any such change shall be deemed to be Shares, and no change in the number of Shares covered by the Option or in the Option Price shall take place. 12. If the Parent, the Company or a Subsidiary shall be required to withhold any amounts by reason of any federal, state or local tax rules or regulations in respect of the payment of cash or the issuance of Shares pursuant to the exercise of the Option, the Parent, the Company or such Subsidiary shall be entitled to deduct and withhold such amounts from any cash payments to be made to the Optionee. In any event, the Optionee shall either (i) make available to the Parent, the Company or such Subsidiary, promptly when requested by the Parent, the Company or such Subsidiary, sufficient funds or Shares (valued at Fair Market Value as of the date the tax withholding obligation arises (the "Tax Date")) to meet the requirements of such withholding, or (ii) to the extent permitted by the Board, the Committee or any Designated Officer, irrevocably authorize the Company to withhold from the Shares otherwise issuable to the Optionee as a result of such exercise a number of Shares having a Fair Market Value as of the Tax Date which alone, or when added to funds paid to the Parent, the Company or such Subsidiary by the Optionee, equal the amount of the minimum withholding tax obligation (the "Withholding Election") and the Parent, the Company or such Subsidiary shall be entitled to take and authorize such steps as it may deem advisable in order to have such funds made available to the Parent, the Company or such Subsidiary out of any funds or property due or to become due to the Optionee. The Optionee's Withholding Election may only be made prior to the Tax Date and may be disapproved by the Board, the Committee or any Designated Officer. The Board, the Committee or any Designated Officer may establish such rules and procedures as he, she or it may deem necessary or advisable in connection with the withholding of taxes relating to the exercise of the Option. 13. If at any time the Optionee is indebted or otherwise has a repayment obligation to the Parent, the Company or any Subsidiary for any reason, the Company may in the -6- 7 discretion of the Board, the Committee or any Designated officer (a) withhold from the Optionee (i) following the exercise of the Option, Shares issuable to the Optionee having a Fair Market Value on the date of exercise up to the amount of indebtedness to the Company or (ii) following the sale by the Optionee of Shares received pursuant to the exercise of the Option, amounts due to the Optionee in connection with the sale of such Shares up to the amount of indebtedness to the Company, or (b) take any substantially similar action. The Board, the Committee or any Designated Officer may establish such rules and procedures as he, she or it may deem necessary or advisable in connection with the taking of any action contemplated by this Section 13. 14. Nothing in the Plan or this Option Certificate shall confer (or be deemed to confer) upon the Optionee any right to continue in the employ or continue to be retained by the Parent, the Company or any Subsidiary or interfere in any way with the right of the Parent, the Company or any Subsidiary to terminate the Optionee's employment or retention at any time, with or without cause and with or without notice. 15. Each notice relating to the Option shall be in writing and delivered in person or by certified mail to the proper address. Each notice to the Company shall be addressed to it at: MEDICAL MARKETING GROUP, INC., 100 Summit Avenue, Montvale, New Jersey 07645, Attention: Treasurer. Each notice to the Optionee shall be addressed to the Optionee at the Optionee's address set forth below. Anyone to whom a notice may be given relating to the Option may designate a new address by notice to that effect. Each notice shall be deemed to have been given on the day it was received. The Company may require that any notice be on a specified form established by the Company. 16. The Option and this Option Certificate are issued to, and are subject to all of the terms and conditions of the Plan, the terms, conditions and definitions of which are hereby incorporated as though set forth at length, and the receipt of a copy of which the Optionee hereby acknowledges by this signature below. A determination by the Board, the Committee or any Designated Officer as to any questions which may arise with respect to the interpretation of the provisions of the Option or the Plan shall be final and binding upon the Optionee. The Board, the Committee or any Designated Officer may, from time to time, authorize and establish such rules, regulations and revisions thereof not inconsistent with the provisions of the Plan, as it may deem advisable. The Optionee agrees to comply with all such rules, regulations and revisions. The Option shall be governed by the laws of the State of Delaware applicable to agreements made and to be fully performed therein. -7- 8 WITNESS the signature of the Company's duly authorized officer and the Optionee. MEDICAL MARKETING GROUP, INC. By:_______________________ Douglas W. Wamsley Vice President - Legal ACCEPTED AND AGREED TO: By:_______________________ Optionee (Address) -8- EX-4.7 6 STOCK OPTION AGREEMENT -- MICKI MIKULA/MMG 1 EXHIBIT 4.7 STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT (this "Agreement") made as of July 15, 1991, between MEDICAL MARKETING GROUP, INC., a Delaware corporation with offices at 100 Summit Avenue, Montvale, New Jersey 07645 (the "Company"), and MICKI MIKULA ("Optionee"). AGREEMENTS In consideration of the mutual covenants of this Agreement, the Company and Optionee agree as follows: 1. Confirmation of Grant of Option. The Company hereby confirms that Optionee has been granted on July 15, 1991 (the "Date of Grant"), subject to the terms of this Agreement, the right (the "Option") to purchase 7,500 shares of the common stock, $.01 par value, of the Company. All of the shares of the Company's common stock are hereinafter referred to as the "Common Stock," and the 7,500 shares of Common Stock that are subject to purchase hereunder are hereinafter referred to as "Shares." Said number of Shares subject to the Option may be adjusted as provided in Section 11. 2. Exercisability of Option. 2.1 Subject to the terms and conditions of this Agreement, the Option shall become exercisable (i.e., "vested"): 2.1.1 with respect to 15% of the Shares, on and after the first anniversary of the Date of Grant; 2.1.2 with respect to an additional 17.5% of the Shares, on and after the second anniversary of the Date of Grant; 2.1.3 with respect to an additional 20% of the Shares, on and after the third anniversary of the Date of Grant; 2.1.4 with respect to an additional 22.5% of the Shares, on and after the fourth anniversary of the Date of Grant; and 2.1.5 with respect to the remainder of the Shares, on and after the fifth anniversary of the Date of Grant. The foregoing vesting is on a cumulative basis. Notwithstanding the foregoing sentence, in the event of a Change of Control (as 2 defined below), the Stock Option Committee of the Board of Directors of the Company (the "Committee") may, in its sole discretion, determine that the Option shall become exercisable in full or in part, whether or not it is then exercisable; provided, however, that the Option shall not become exercisable in full or in part because of a Change of Control of Medco Containment Services, Inc. ("Medco"), unless, immediately preceding such Change in Control, Medco was in "control" of the Company within the meaning of the Exchange Act. The Committee may also determine that the Option shall become exercisable, in full or in part, whether or not it is then exercisable, upon such circumstances or events as the Committee determines, in its sole discretion, merits special consideration. For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred: (i) when any "person," as defined in Section 3(a) (9) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and as used in Sections 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d) of the Exchange Act (but excluding any parent (the "Parent") of the Company as defined under Section 424 of the Internal Revenue Code of 1986, as amended (the "Code"), Medco and the Company (and any successor to the Parent, Medco or the Company which became a successor to the Parent, Medco or the Company in a transaction which did not result in a Change in Control), any subsidiary of the Company as defined under Section 424 of the Code (a "Subsidiary") or subsidiary of the Parent or Medco and any employee benefit plan sponsored or maintained by the Parent or Medco or their subsidiaries or the Company or any Subsidiary, including any trustee of such plan acting as trustee) directly or indirectly becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, as amended from time to time) of, or makes an offer to purchase, securities of the Parent, Medco or the Company representing 50 percent or more of the combined voting power of its then outstanding securities with respect to the election of directors; (ii) when, during any period of 24 consecutive months this Agreement is in effect, the individuals who, at the beginning of such period, constitute the Board of Directors of the Parent or Medco or the Board of Directors of the Company (the "Board"), as the case may be (the "Incumbent Directors"), cease for any reason other than death to constitute at least a majority thereof; provided, however, that a director who was not a director at the beginning of such 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds of the directors of the Parent, Medco or the Company, as the case may be, -2- 3 who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 24-month period) or by prior operation of this Section 3(ii); (iii) when the shareholders of the Parent, Medco or the Company, as the case may be, approve a merger or consolidation of the Parent, Medco or the Company without the consent or approval of a majority of its Incumbent Directors; (iv) when there is a sale or disposition of all or substantially all of the Parent's, Medco's or the Company's assets; or (v) when the Company, the Parent or Medco adopts a plan of liquidation. 3. The Option shall not be assignable or transferable otherwise than by will or by the laws of descent and distribution and the option may not be exercised other than by the Optionee or, after the death of the Optionee, by his personal representatives, heirs or legatees. Without limiting the generality of the foregoing, the Option may not be assigned, transferred (except as permitted in the preceding sentence), pledged or hypothecated in any way (whether by operation of law or otherwise), and shall not be subject to levy, attachment or similar process. Any attempt to assign, transfer, pledge or hypothecate the Option contrary to the provisions of this Agreement, and any levy, attachment or similar process upon the Option shall be null and void and without effect, and the Board or the Committee may, in its sole discretion, upon the happening of any such event, terminate the Option as of the date of such event. 4. The Optionee (or the representative of his estate or his heirs or legatees) may exercise the Option by giving written notice of exercise to the Company at its principal business office, specifying the number of Shares for which the Option is exercised, accompanied by payment in full of the Option Price for such Shares (together with any amount required for payroll withholding tax). If the Company has established a form for notice of exercise, the Optionee shall use such form. The Company shall cause certificates for the Shares so purchased to be delivered to Optionee or Optionee's personal representatives, heirs or legatees at its principal business office, following receipt of the notice of exercise and payment in full of the Option Price and any required withholding taxes. Payment of the Option Price shall be made in United States dollars in the form of cash, certified check or bank draft, or by delivery to the Company of shares of Common Stock which the Optionee has owned for at least six months, or if the Committee so determines, by withholding Shares with respect to which the Optionee has exercised the Option having a Fair Market Value on the date of -3- 4 exercise equal to the sum of the Option Price for the withheld Shares and the remaining Shares with respect to which the Optionee has exercised the Option or any combination of such methods of payment. Shares shall be valued at Fair Market Value on the date of exercise. 5. The unexercised portion of the Option (both vested and non-vested) shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following: 5.1 The tenth anniversary of the Date of Grant; 5.2 Subject to the provisions of Section 5.3 and 5.4 below, 30 days following the date of termination of Optionee's service as an employee; provided, however, that if following such termination as an employee, Optionee is retained by the Company as a consultant, the Board or the Committee, in their sole discretion, may continue the Option for the balance of the term with respect to all or any portion of the Shares covered by it (in which case the Option shall not be deemed to have terminated) or may permit the termination to stand. Any such continuation shall not be deemed the grant of a new option. 5.3 If the Optionee retires as an employee of the Company with the consent of the Company, the Option (both vested and non-vested) shall expire on the date of retirement, except for any portion thereof which was otherwise exercisable on the date of retirement, which shall expire unless exercised within a period of 90 days after the date of retirement. 5.4 If Optionee dies while an employee or contractor of the Company or within the 30 day period following the date of termination of Optionee's status as an employee or consultant (described in Section 5.2) or the 90 day period following retirement with the consent of the Company (described in Section 5.3), any unexercised portion of the Option which was otherwise exercisable on the date of death shall be exercisable by the representative of the estate or the heirs or legatees of the Optionee at any time within the one year period from date of death. 5.5 If the Optionee's services with the Parent, the Company or any Subsidiary are terminated because of the Optionee's violation of his duties to the Parent, the Company or any Subsidiary, including but not limited to, violation of Optionee's obligations contained in any agreement with the Parent, the Company or any subsidiary, or Optionee's violation of any other obligation written or otherwise to the Medco, Company or any Subsidiary, as he may from time to time have, the existence of which violation shall be determined by the Committee in its sole discretion (which determination shall be conclusive), -4- 5 the Option shall terminate immediately as of the time of termination of the Optionee's services and the Optionee shall have no right after such termination to exercise any Option the Optionee might have exercised prior to his termination of service. 5.6 In no event, however, shall the Option be exercisable after the expiration of ten years from the Date of Grant. Nothing in this Section 5 shall cause the Option to vest other than in accordance with the provisions of Section 3. 6. Subject to adjustment as provided in Section 11, the purchase price (the "Option Price") of the shares covered by this Agreement shall be $24.125 per share. 7. The parties hereto acknowledge that any breach of the Optionee of the non-competition covenant in any agreement with the Parent, the Company or any Subsidiary, the Optionee would cause irreparable damage to the Company. Accordingly, notwithstanding anything to the contrary contained herein, any breach or threatened breach by Optionee of the foregoing non-competition clause shall entitle the Company, in addition to any other legal and equitable remedies available to it, to declare forfeited any and all stock options granted by the Company to the Optionee, whether or not such options have vested or been exercised. The parties further agree that upon forfeiture, the Company is entitled to recover, and Optionee will disgorge to the Company, any profits or proceeds acquired from the Option. The forfeiture provision shall survive the termination of any such agreement and thereafter expire concurrently with the expiration date set forth in the non-competition covenant. The parties acknowledge that said forfeiture and disgorgement shall constitute liquidated damages for Optionee's breach of said non-competition covenant. The parties hereto understand and intend that the foregoing provisions shall be construed as separable and divisible, and the unenforceability of any restriction will not affect the enforceability of the remaining restrictions and that one or more or all of such restrictions may be enforced in whole or in part as the circumstances warrant. Should any court find any provision of such agreement unenforceable, the parties hereby agree that it is their intent to narrow the scope of such provision, including, without limitation, the forfeiture provision, in order to enforce its intent to the broadest extent permissible. 8. In case the Company is merged or consolidated with another corporation, or in case of a reorganization, separation, or liquidation of the Company, the Board or the board of directors of any corporation assuming the obligations of the Company under this Agreement shall either (i) make appropriate provisions for the protection of the Option by the substitution on an equitable basis of appropriate securities of the Company, -5- 6 or appropriate securities of the merged, consolidated, or otherwise reorganized corporation, or the appropriate adjustment in the Option Price, or both, or (ii) give written notice to the Optionee that the Option must be exercised, to the extent exercisable after giving due effect to Section 3 above, within 60 days of the date of such notice or the Option will terminate. 9. The Optionee shall have no rights as a stockholder with respect to the Shares until the date the Company has issued and delivered the Shares to the Optionee, and the Optionee's name shall have been entered as the stockholder of record on the books of the Company and then only as to such Shares as are actually issued and delivered to the Optionee. 10.1 The Shares issued upon exercise of the Option shall be issued only to Optionee or a person permitted to exercise the Option pursuant to Section 3. Each share certificate representing Shares purchased upon exercise of the Opt ion shall bear a legend stating that the Shares evidenced thereby may not be sold or transferred except in compliance with the Securities Act of 1933, as amended (the "1933 Act"). The certificate(s) may be made subject to a stop transfer order placed with the Company's transfer agent. 10.2 Notwithstanding any other provision of this Agreement, unless the issuance of Shares upon exercise of the Option shall then be covered by an effective registration statement under the 1933 Act, the Company shall have no obligation to issue any Shares pursuant to an exercise of the Option in the absence of an opinion of counsel to the Company that said sale may be effected pursuant to an exemption from the registration requirements of the 1933 Act. If the Company's Common Stock is not then publicly traded, the Company shall have no obligation to file a registration statement or take other steps to permit the Shares to be issued in compliance with the 1933 Act. It shall be a further condition to the Company's obligation to issue and deliver to Optionee certificates for those Shares, that Optionee deliver to the Company in writing a representation that such Optionee is exercising such Option for his own account for investment only and not with a view to distribution and that the Optionee will not make any sale, transfer or other disposition of any Shares purchased except (i) pursuant to the registration thereof under the 1933 Act, (ii) pursuant to an opinion of counsel, satisfactory in form and substance to the Company, that the sale, transfer or other disposition may be made without registration, or (iii) pursuant to a "no action" letter from the Securities and Exchange Commission. Optionee has been advised and understands the Shares must be held indefinitely unless they are registered for resale under the 1933 Act or an exception from registration is available and that the Company is under no obligation to register those Shares under the 1933 Act for resale or to take any action that -6- 7 would make available to the holder any exemption from registration. 11. The aggregate number of Shares purchasable under the Option and the Option Price for the Shares shall all be proportionately adjusted, as deemed appropriate by the Committee, if the Company's shares of Common Stock are split-up, converted, exchanged, reclassified, or in any way substituted for. The Committee shall also provide for appropriate adjustments of the number of shares purchasable under the Option in the event of stock dividends or distributions of assets or securities of other companies owned by the Company to stockholders relating to its Common Stock for which the record date is prior to the date the Shares purchased by exercise of the Option are issued, except that no such adjustment shall be made for extraordinary cash dividends of 10% or less of the fair market value of the Common Stock (as established by the Board using any reasonable method of valuation) or stock dividends of 10% or less. Any such adjustment may include an adjustment of the Option Price or the number of Shares for which the Option may be exercised, or may provide for an escrow of assets or securities so distributed to be available upon future exercise, or a combination thereof, as the Committee deems appropriate. In the event of a change in the Company's presently authorized Common Stock which is limited to a change of all of its presently authorized shares of Common Stock with par value into the same number of shares without par value, or any change of the then authorized shares of Common Stock with par value into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be Shares, and no change in the number of Shares covered by the Option or in the Option Price shall take place. 12. If the Parent, the Company or a Subsidiary shall be required to withhold any amounts by reason of any federal, state or local tax rules or regulations in respect of the payment of cash or the issuance of Shares pursuant to the exercise of the Option, the Parent, the Company or such subsidiary shall be entitled to deduct and withhold such amounts from any cash payments to be made to the Optionee. In any event, the Optionee shall (i) make available to the Parent, the Company or such Subsidiary, promptly when requested by the Parent, the Company or such Subsidiary, sufficient funds to meet the requirements of such withholding, or, (ii) to the extent permitted by the Committee, irrevocably authorize the Company to withhold from the Shares otherwise issuable to the Optionee as a result of such exercise a number of Shares having a Fair Market Value, as of the date the withholding tax obligation arises (the "Tax Date") which alone, or when added to funds paid to the Parent, the Company or such Subsidiary by the Optionee equal the amount of the minimum withholding tax obligation (the "withholding Election") and the Parent, the Company or such Subsidiary shall be entitled to take and authorize such steps as it may deem advisable in order to -7- 8 have such funds made available to the Parent, the Company or such Subsidiary out of any funds or property due or to become due to the Optionee. The Committee or the Board may establish such rules and procedures as they deem necessary or advisable in connection with the withholding of taxes relating to the exercise of the Option. 13. If at any time an Optionee is indebted to the Company, the Company may in the discretion of the Committee (a) withhold from the Optionee (i) following the exercise by an Optionee of an Option, Shares issuable to the Optionee having a fair market value (as determined by the Board using any reasonable method of valuation) on the date of exercise up to the amount of indebtedness to the Company or (ii) following the sale by an Optionee of Shares received pursuant to the exercise of an Option, amounts due to an Optionee in connection with the sale of such Shares up to the amount of indebtedness to the Company, or (b) take any substantially similar action. 14. Nothing in the Plan or this Option Certificate shall confer (or be deemed to confer) upon the Optionee any right to continue in the employ or continue to be retained by the Parent, the Company or any Subsidiary or interfere in any way with the right of the Parent, the Company or any Subsidiary to terminate the Optionee's employment or retention at any time. 15. Each notice relating to the Option shall be in writing and delivered in person or by certified mail to the proper address. Each notice to the Company shall be addressed to it at: MEDICAL MARKETING GROUP, INC., 100 Summit Avenue, Montvale, New Jersey 07645, Attention: Vice President - Treasurer. Each notice to Optionee shall be addressed to Optionee at Optionee's address set forth below. Anyone to whom a notice may be given under the Option may designate a new address by notice to that effect. Each notice shall be deemed to have been given on the day it was received. The Company may require that any notice be on a specified form established by the Company. 16. All references to the masculine gender shall be deemed to include the feminine gender, as the context may require. 17. This Agreement shall inure to the benefit of and be binding upon each successor of the Company. Subject to Section 3, rights granted to the Company under this Agreement shall be binding upon Optionee's personal representatives and heirs at law. 18. This Agreement shall be the sole end exclusive source of any and all rights that Optionee and Optionee's personal representatives or heirs at law, may have in respect of the Option as granted hereunder. This Agreement is subject to the terms of the Key Employee/Special Compensation Agreement executed by Optionee. -8- 9 19. The captions contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 20. The Committee shall have the authority to interpret and construe the provisions of this Agreement and such interpretation or construction shall be final and conclusive unless otherwise determined by the Board, and in any such event the determination of the Board shall be final and conclusive. The Committee may establish such rules and regulations concerning this Agreement as the Committee may determine to be necessary or advisable for the administration of this Agreement, including without limiting the foregoing, rules and regulations concerning non-competition provisions to be abided by the Optionee. The Option shall be governed by the laws of the State of Delaware applicable to agreements made and to be fully performed therein. 21. Should any part, term or condition hereof be declared illegal, unenforceable or not in compliance with any other law, the validity of the remaining portions or provisions of this Agreement shall not be affected thereby, and the portions or provisions declared illegal, unenforceable or not in compliance with such law shall be and hereby are redrafted to conform and be in compliance with applicable law, while leaving the remaining portions of this Agreement intact. WITNESS the signature of the Company's duly authorized officer and the Optionee. MEDICAL MARKETING GROUP, INC. By: Douglas W. Wamsly ----------------- Vice President ACCEPTED AND AGREED TO: By: Micki Mikula ---------------- Optionee 1520 Lexington Drive ---------------------- (Address) Dresder, PA 19025 ---------------------- -9- EX-4.8 7 STOCK OPTION AGREEMENT -- MARIANNE VIGNONE/MMG 1 EXHIBIT 4.8 STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT (this "Agreement") made as of April 5, 1991, between MEDICAL MARKETING GROUP, INC., a Delaware corporation with offices at 100 Summit Avenue, Montvale, New Jersey 07645 (the "Company"), and MARIANNE VIGNONE ("Optionee"). AGREEMENTS In consideration of the mutual covenants of this Agreement, the Company and Optionee agree as follows: 1. Confirmation of Grant of Option. The Company hereby confirms that Optionee has been granted on April 5, 1991 (the "Date of Grant"), subject to the terms of this Agreement, the right (the "Option") to purchase 10,000 shares of the common stock, $.01 par value, of the Company. All of the shares of the Company's common stock are hereinafter referred to as the "Common Stock," and the 10,000 shares of Common Stock that are subject to purchase hereunder are hereinafter referred to as "Shares." Said number of Shares subject to the Option may be adjusted as provided in Section 11. 2. Exercisability of Option. 2.1 Subject to the terms and conditions of this Agreement, the Option shall become exercisable (i.e., "vested"): 2.1.1 with respect to 15% of the Shares, on and after the first anniversary of the Date of Grant; 2.1.2 with respect to an additional 17.5% of the Shares, on and after the second anniversary of the Date of Grant; 2.1.3 with respect to an additional 20% of the Shares, on and after the third anniversary of the Date of Grant; 2.1.4 with respect to an additional 22.5% of the Shares, on and after the fourth anniversary of the Date of Grant; and 2.1.5 with respect to the remainder of the Shares, on and after the fifth anniversary of the Date of Grant. The foregoing vesting is on a cumulative basis. Notwithstanding anything to the contrary contained herein, the Optionee agrees 2 that (i) the Optionee shall not exercise the Option, and the Option shall not be exercisable, until March 26, 1993, regardless as to whether such Option terminates prior to such date, and (ii) the Option shall terminate, without notice to the Optionee, and become null and void if the Optionee is not employed by the Company or any Affiliate of the Company at any time prior to March 26, 1993. Notwithstanding the foregoing sentence, in the event of a Change of Control (as defined below), the Stock Option Committee of the Board of Directors of the Company (the "Committee") may, in its sole discretion, determine that the Option shall become exercisable in full or in part, whether or not it is then exercisable; provided, however, that the Option shall not become exercisable in full or in part because of a Change of Control of Medco Containment Services, Inc. ("Medco"), unless, immediately preceding such Change in Control, Medco was in "control" of the Company within the meaning of the Exchange Act. The Committee may also determine that the Option shall become exercisable, in full or in part, whether or not it is then exercisable, upon such circumstances or events as the Committee determines, in its sole discretion, merits special consideration. For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred: (i) when any "person," as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and as used in Sections 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d) of the exchange Act (but excluding any parent (the "Parent") of the Company as defined under Section 424 of the Internal Revenue Code of 1986, as amended (the "Code"), Medco and the Company (and any successor to the Parent, Medco or the Company which became a successor to the Parent, Medco or the Company in a transaction which did not result in a Change in Control), any subsidiary of the Company as defined under Section 424 of the Code (a "Subsidiary") or subsidiary of the Parent or Medco and any employee benefit plan sponsored or maintained by the Parent or Medco or their subsidiaries or the Company or any Subsidiary, including any trustee of such plan acting as trustee) directly or indirectly becomes the "beneficial owner, (as defined in Rule 13d-3 under the Exchange Act, as amended from time to time) of, or makes an offer to purchase, securities of the Parent, Medco or the Company representing 50 percent or more of the combined voting power of its then outstanding securities with respect to the election of directors; (ii) when, during any period of 24 consecutive months this Agreement is in effect, the individuals who, at the - 2 - 3 beginning of such period, constitute the Board of Directors of the Parent or Medco or the Board of Directors of the Company (the "Board"), as the case may be (the "Incumbent Directors"), cease for any reason other than death to constitute at least a majority thereof; provided, however, that a director who was not a director at the beginning of such 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds of the directors of the Parent, Medco or the Company, as the case may be, who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 24-month period) or by prior operation of this Section 3(ii); (iii) when the shareholders of the Parent, Medco or the Company, as the case may be, approve a merger or consolidation of the Parent, Medco or the Company without the consent or approval of a majority of its Incumbent Directors; (iv) when there is a sale or disposition of all or substantially all of the Parent's, Medco's or the Company's assets; or (v) when the Company, the Parent or Medco adopts a plan of liquidation. 3. The Option shall not be assignable or transferable otherwise than by will or by the laws of descent and distribution and the option may not be exercised other than by the Optionee or, after the death of the Optionee, by his personal representatives, heirs or legatees. Without limiting the generality of the foregoing, the Option may not be assigned, transferred (except as permitted in the preceding sentence), pledged or hypothecated in any way (whether by operation of law or otherwise), and shall not be subject to levy, attachment or similar process. Amy attempt to assign, transfer, pledge or hypothecate the Option contrary to the provisions of this Agreement, and any levy, attachment or similar process upon the Option shall be null and void and without effect, and the Board or the Committee may, in its sole discretion, upon the happening of any such event, terminate the Option as of the date of such event. 4. The Optionee (or the representative of his estate or his heirs or legatees) may exercise the Option by giving written notice of exercise to the Company at its principal business office, specifying the number of Shares for which the Option is exercised, accompanied by payment in full of the Option Price for such Shares (together with any amount required for payroll - 3 - 4 withholding tax). If the Company has established a form for notice of exercise, the Optionee shall use such form. The Company shall cause certificates for the Shares so purchased to be delivered to Optionee or Optionee's personal representatives, heirs or legatees at its principal business office, following receipt of the notice of exercise and payment in full of the Option price and any required withholding taxes. Payment of the Option price shall be made in United States dollars in the form of cash, certified check or bank draft, or by delivery to the Company of shares of Common Stock which the Optionee has owned for at least six months, or if the Committee so determines, by withholding Shares with respect to which the Optionee has exercised the Option having a Fair Market Value on the date of exercise equal to the sum of the Option Price for the withheld Shares and the remaining Shares with respect to which the Optionee has exercised the Option or any combination of such methods of payment. Shares shall be valued at Fair Market Value on the date of exercise. 5. The unexercised portion of the Option (both vested and non-vested) shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following: 5.1 The tenth anniversary of the Date of Grant; 5.2 Subject to the provisions of Section 5.3 and 5.4 below, 30 days following the date of termination of Optionee's service as an employee; provided, however, that if following such termination as an employee, Optionee is retained by the Company as a consultant, the Board or the Committee, in their sole discretion, may continue the Option for the balance of the term with respect to all or any portion of the Shares covered by it (in which case the Option shall not be deemed to have terminated) or may permit the termination to stand. Any such continuation shall not be deemed the grant of a new option. 5.3 If the Optionee retires as an employee of the Company with the consent of the Company, the Option (both vested and non-vested) shall expire on the date of retirement, except for any portion thereof which war otherwise exercisable on the date of retirement, which shall expire unless exercised within a period of 90 days after the date of retirement. 5.4 If Optionee dies while an employee or contractor of the Company or within the 30 day period following the date of termination of Optionee's status as an employee or consultant (described in Section 5.2) or the 90 day period following retirement with the consent of the Company (described in Section 5.3), any unexercised portion of the Option which was - 4 - 5 otherwise exercisable on the date of death shall be exercisable by the representative of the estate or the heirs or legatees of the Optionee at any time within the one year period from date of death. 5.5 If the Optionee's services with the Parent, the Company or any Subsidiary are terminated because of the Optionee's violation of his duties to the Parent, the Company or any Subsidiary, including but not limited to, violation of Optionee's obligations contained in any agreement with the Parent, the Company or any subsidiary, or Optionee's violation of any other obligation written or otherwise to the Medco, Company or any Subsidiary, as he may from time to time have, the existence of which violation shall be determined by the Committee in its sole discretion (which determination shall be conclusive), the Option shall terminate immediately as of the time of termination of the Optionee's services and the Optionee shall have no right after such termination to exercise any Option the Optionee might have exercised prior to his termination of service. 5.6 In no event, however, shall the Option be exercisable after the expiration of ten years from the Date of Grant. Nothing in this Section 5 shall cause the Option to vest other than in accordance with the provisions of Section 3. 6. Subject to adjustment as provided in Section 11, the purchase price (the "Option Price") of the shares covered by this Agreement shall be $19.625 per share. 7. The parties hereto acknowledge that any breach of the Optionee of the non-competition covenant in any agreement with the Parent, the Company or any Subsidiary, the Optionee would cause irreparable damage to the Company. Accordingly, notwithstanding anything to the contrary contained herein, any breach or threatened breach by Optionee of the foregoing non-competition class shall entitle the Company, in addition to any other legal and equitable remedies available to it, to declare forfeited any and all stock options granted by the Company to the Optionee, whether or not such options have vested or been exercised. The parties further agree that upon forfeiture, the Company is entitled to recover, and Optionee will disgorge to the Company, any profits or proceeds acquired from the Option. The forfeiture provision shall survive the termination of any such agreement and thereafter expire concurrently with the expiration date set forth in the non-competition covenant. The parties acknowledge that said forfeiture and disgorgement shall constitute liquidated damages for Optionee's breach of said non-competition covenant. The parties hereto understand and intend that the foregoing provisions shall be construed as separable and divisible, and the - 5 - 6 unenforceability of any restriction will not affect the enforceability of the remaining restrictions and that one or more or all of such restrictions may be enforced in whole or in part as the circumstances warrant. Should any court find any provision of such agreement unenforceable, the parties hereby agree that it is their intent to narrow the scope of such provision, including, without limitation, the forfeiture provision, in order to enforce its intent to the broadest extent permissible. 8. In case the Company is merged or consolidated with another corporation, or in case of a reorganization, separation, or liquidation of the Company, the Board or the board of directors of any corporation assuming the obligations of the Company under this Agreement shall either (i) make appropriate provisions for the protection of the Option by the substitution on an equitable basis of appropriate securities of the Company, or appropriate securities of the merged, consolidated, or otherwise reorganized corporation, or the appropriate adjustment in the Option Price, or both, or (ii) give written notice to the Optionee that the Option must be exercised, to the extent exercisable after giving due effect to Section 3 above, within 60 days of the date of such notice or the Option will terminate. 9. The Optionee shall have no rights as a stockholder with respect to the Shares until the date the Company has issued and delivered the Shares to the Optionee, and the Optionee's name shall have been entered as the stockholder of record on the books of the Company and then only as to such Shares as are actually issued and delivered to the Optionee. 10.1 The Shares issued upon exercise of the Option shall be issued only to Optionee or a person permitted to exercise the Option pursuant to Section 3. Each share certificate representing Shares purchased upon exercise of the Option shall bear a legend stating that the Shares evidenced thereby may not be sold or transferred except in compliance with the Securities Act of 1933, as amended (the "1933 Act"). The certificate(s) may be made subject to a stop transfer order placed with the Company's transfer agent. 10.2 Notwithstanding any other provision of this Agreement, unless the issuance of Shares upon exercise of the Option shall then be covered by an effective registration statement under the 1933 Act, the Company shall have no obligation to issue any Shares pursuant to an exercise of the Option in the absence of an opinion of counsel to the Company that said sale may be effected pursuant to an exemption from the registration requirements of the 1933 Act. If the Company's Common Stock is not then publicly traded, the Company shall have -6- 7 no obligation to file a registration statement or take other steps to permit the Shares to be issued in compliance with the 1933 Act. It shall be a further condition to the Company's obligation to issue and deliver to Optionee certificates for those Shares, that Optionee deliver to the Company in writing a representation that such Optionee is exercising such Option for his own account for investment only and not with a view to distribution and that the Optionee will not make any sale, transfer or other disposition of any Shares purchased except (i) pursuant to the registration thereof under the 1933 Act, (ii) pursuant to an opinion of counsel, satisfactory in form and substance to the Company, that the sale, transfer or other disposition may be made without registration, or (iii) pursuant to a "no action" letter from the Securities and Exchange Commission. Optionee has been advised and understands the Shares must be held indefinitely unless they are registered for resale under the 1933 Act or an exemption from registration is available and that the Company is under no obligation to register those Shares under the 1933 Act for resale or to take any action that would make available to the holder any exemption from registration. 11. The aggregate number of Shares purchasable under the Option and the Option price for the Shares shall all be proportionately adjusted, as deemed appropriate by the Committee, if the Company's shares of Common Stock are split-up, converted, exchanged, reclassified, or in any way substituted for. The Committee shall also provide for appropriate adjustments of the number of Shares purchasable under the Option in the event of stock dividends or distributions of assets or securities of other companies owned by the Company to stockholders relating to its Common Stock for which the record date is prior to the date the Shares purchased by exercise of the Option are issued, except that no such adjustment shall be made for extraordinary cash dividends of 10% or less of the fair market value of the Common Stock (as established by the Board using any reasonable method of valuation) or stock dividends of 10% or less. Any such adjustment may include in adjustment of the Option price or the number of Shares for which the Option may be exercised, or may provide for an escrow of assets or securities so distributed to be available upon future exercise, or a combination thereof, as the Committee deems appropriate. In the event of a change in the Company's presently authorized Common Stock which is limited to a change of all of its presently authorized shares of Common Stock with par value into the same number of shares without par value, or any change of the then authorized shares of Common Stock with par value into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be Shares, and no change in the number of Shares covered by the Option or in the Option price shall take place. - 7 - 8 12. If the Parent, the Company or a Subsidiary shall be required to withhold any amounts by reason of any federal, state or local tax rules or regulations in respect of the payment of cash or the issuance of Shares pursuant to the exercise of the Option, the Parent, the Company or such Subsidiary shall be entitled to deduct and withhold such amounts from any cash payments to be made to the Optionee. In any event, the Optionee shall (i) make available to the Parent, the Company or such Subsidiary, promptly when requested by the Parent, the Company or such Subsidiary, sufficient funds to meet the requirements of such withholding, or, (ii) to the extent permitted by the Committee, irrevocably authorize the Company to withhold from the Shares otherwise issuable to the Optionee as a result of such exercise a number of Shares having a Fair Market Value, as of the date the withholding tax obligation arises (the "Tax Date") which alone, or when added to funds paid to the parent, the Company or such Subsidiary by the Optionee equal the amount of the minimum withholding tax obligation (the "Withholding Election") and the Parent, the Company or such Subsidiary shall be entitled to take and authorize such steps as it may deem advisable in order to have such funds made available to the Parent, the Company or such Subsidiary out of any funds or property due or to become due to the Optionee. The Committee or the Board may establish such rules and procedures as they deem necessary or advisable in connection with the withholding of taxes relating to the exercise of the Option. 13. If at any time an Optionee is indebted to the Company, the Company may in the discretion of the Committee (a) withhold from the Optionee (i) following the exercise by an Optionee of an Option, Shares issuable to the Optionee having a fair market value (as determined by the Board using any reasonable method of valuation) on the date of exercise up to the amount of indebtedness to the Company or (ii) following the sale by an Optionee of Shares received pursuant to the exercise of an Option, amounts due to an Optionee in connection with the sale of such Shares up to the amount of indebtedness to the Company, or (b) take any substantially similar action. 14. Nothing in the Plan or this Option Certificate shall confer (or be deemed to confer) upon the Optionee any right to continue in the employ or continue to be retained by the Parent, the Company or any Subsidiary or interfere in any way with the right of the Parent, the Company or any Subsidiary to terminate the Optionee's employment or retention at any time. 15. Each notice relating to the Option shall be in writing and delivered in person or by certified mail to the proper address. Each notice to the Company shall be addressed to it at: MEDICAL MARKETING GROUP, INC., 100 Summit Avenue, - 8 - 9 Montvale, New Jersey 07645, Attention: Vice President - Treasurer. Each notice to Optionee shall be addressed to Optionee at Optionee's address set forth below. Anyone to whom a notice may be given under the Option may designate a new address by notice to that effect. Each notice shall be deemed to have been given on the day it was received. The Company may require that any notice be on a specified form established by the Company. 16. All references to the masculine gender shall be deemed to include the feminine gender, as the context may require. 17. This Agreement shall inure to the benefit of and be binding upon each successor of the Company. Subject to Section 3, rights granted to the Company under this Agreement shall be binding upon Optionee's personal representatives and heirs at law. 18. This Agreement shall be the sole and exclusive source of any and all rights that Optionee, and Optionee's personal representatives or heirs at law, may have in respect of the Option as granted hereunder. This Agreement is subject to the terms of the Key Employee/Special Compensation Agreement executed by Optionee, 19. The captions contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 20. The Committee shall have the authority to interpret and construe the provisions of this Agreement and such interpretation or construction shall be final and conclusive unless otherwise determined by the Board, and in any such event the determination of the Board shall be final and conclusive. The Committee may establish such rules and regulations concerning this Agreement as the Committee may determine to be necessary or advisable for the administration of this Agreement, including without limiting the foregoing, rules and regulations concerning non-competition provisions to be abided by the Optionee. The Option shall be governed by the laws of the State of Delaware applicable to agreements made and to be fully performed therein. 21. Should any part, term or condition hereof be declared illegal, unenforceable or not in compliance with any other laws, the validity of the remaining portions or provisions of this Agreement shall not be affected thereby, and the portions or provisions declared illegal, unenforceable or not in compliance with such law shall be and hereby are redrafted to conform and be in compliance with applicable law, while leaving the remaining portions of this Agreement intact. - 9 - 10 WITNESS the signature of the Company's duly authorized officer and the Optionee. MEDICAL MARKETING GROUP, INC. By: Douglas W. Wamsly ----------------- Vice President - Legal ACCEPTED AND AGREED TO: By: Marianne Vignone ----------------------- Optionee 100 Ernst Avenue ----------------------- [Address] Bloomfield, NJ 07003 ----------------------- - 10 - EX-4.9 8 STOCK OPTION AGREEMENT -- PEGGY JABLONSKI/MMG 1 EXHIBIT 4.9 STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT (this "Agreement") made as of April 5, 1991, between MEDICAL MARKETING GROUP, INC., a Delaware corporation with offices at 100 Summit Avenue, Montvale, New Jersey 07645 (the "Company"), and PEGGY JABLONSKI ("Optionee"). AGREEMENTS In consideration of the mutual covenants of this Agreement, the Company and Optionee agree as follows: 1. Confirmation of Grant of Option. The Company hereby confirms that Optionee has been granted on April 5, 1991 (the "Date of Grant"), subject to the terms of this Agreement, the right (the "Option") to purchase 7,500 shares of the common stock, $.01 par value, of the Company. All of the shares of the Company's common stock are hereinafter referred to as the "Common Stock," and the 7,500 shares of Common Stock that are subject to purchase hereunder are hereinafter referred to as "Shares." Said number of Shares subject to the Option may be adjusted as provided in Section 11. 2. Exercisability of Option. 2.1 Subject to the terms and conditions of this Agreement, the Option shall become exercisable (i.e., "vested"): 2.1.1 with respect to 15% of the Shares, on and after the first anniversary of the Date of Grant; 2.1.2 with respect to an additional 17.5% of the Shares, on and after the second anniversary of the Date of Grant; 2.1.3 with respect to an additional 20% of the Shares, on and after the third anniversary of the Date of Grant; 2.1.4 with respect to an additional 22.5% of the Shares, on and after the fourth anniversary of the Date of Grant; and 2.1.5 with respect to the remainder of the Shares, on and after the fifth anniversary of the Date of Grant. The foregoing vesting is on a cumulative basis. Notwithstanding the foregoing sentence, in the event of a Change of Control (as 2 defined below), the Stock Option Committee of the Board of Directors of the Company (the "Committee") may, in its sole discretion, determine that the Option shall become exercisable in full or in part, whether or not it is then exercisable; provided, however, that the Option shall not become exercisable in full or in part because of a Change of Control of Medco Containment Services, Inc. ("Medco"), unless, immediately preceding such Change in Control, Medco was in "control" of the Company within the meaning of the Exchange Act. The Committee may also determine that the Option shall become exercisable, in full or in part, whether or not it is then exercisable, upon such circumstances or events as the Committee determines, in its sole discretion, merits special consideration. For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred: (i) when any "person," as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and as used in Sections 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d) of the exchange Act (but excluding any parent (the "Parent") of the Company as defined under Section 424 of the Internal Revenue Code of 1986, as amended (the "Code"), Medco and the Company (and any successor to the Parent, Medco or the Company which became a successor to the Parent, Medco or the Company in a transaction which did not result in a Change in Control), any subsidiary of the Company as defined under Section 424 of the Code (a "Subsidiary") or subsidiary of the Parent or Medco and any employee benefit plan sponsored or maintained by the parent or Medco or their subsidiaries or the Company or any Subsidiary, including any trustee of such plan acting as trustee) directly or indirectly becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, as amended from time to time) of, or makes an offer to purchase, securities of the Parent, Medco or the Company representing 50 percent or more of the combined voting power of its then outstanding securities with respect to the election of directors; (ii) when, during any period of 24 consecutive months this Agreement is in effect, the individuals who, at the beginning of such period, constitute the Board of Directors of the parent or Medco or the Board of Directors of the Company (the "Board"), as the case may be (the "Incumbent Directors"), cease for any reason other than death to constitute at least a majority thereof; provided, however, that a director who was not a director at the beginning of such 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds of the directors of the Parent, Medco or the Company, as the case may be, - 2 - 3 who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 24-month period) or by prior operation of this Section 3(ii); (iii) when the shareholders of the Parent, Medco or the Company, as the case may be, approve a merger or consolidation of the parent, Medco or the Company without the consent or approval of a majority of its Incumbent Directors; (iv) when there is a sale or disposition of all or substantially all of the Parent's, Medco's or the Company's assets; or (v) when the Company, the Parent or Medco adopts a plan of liquidation. 3. The Option shall not be assignable or transferable otherwise than by will or by the laws of descent and distribution and the option may not be exercised other than by the Optionee or, after the death of the Optionee, by his personal representatives, heirs or legatees. Without limiting the generality of the foregoing, the Option may not be assigned, transferred (except as permitted in the preceding sentence), pledged or hypothecated in any way (whether by operation of law or otherwise), and shall not be subject to levy, attachment or similar process. Any attempt to assign, transfer, pledge or hypothecate the Option contrary to the provisions of this Agreement, and any levy, attachment or similar process upon the Option shall be null and void and without effect, and the Board or the Committee may, in its sole discretion, upon the happening of any such event, terminate the Option as of the date of such event. 4. The Optionee (or the representative of his estate or his heirs or legatees) may exercise the Option by giving written notice of exercise to the Company at its principal business office, specifying the number of Shares for which the Option is exercised, accompanied by payment in full of the Option Price for such Shares (together with any amount required for payroll withholding tax). If the Company has established a form for notice of exercise, the Optionee shall use such form. The Company shall cause certificates for the Shares so purchased to be delivered to Optionee or Optionee's personal representatives, heirs or legatees at its principal business office, following receipt of the notice of exercise and payment in full of the Option Price and any required withholding taxes. Payment of the Option Price shall be made in United States dollars in the form of cash, certified check or bank draft, or by delivery to the Company of shares of Common Stock which the Optionee has owned for at least six months, or if the Committee so determines, by withholding Shares with respect to which the Optionee has exercised the Option having a Fair Market Value on the date of -3- 4 exercise equal to the sum of the Option price for the withheld Shares and the remaining Shares with respect to which the Optionee has exercised the Option or any combination of such methods of payment. Shares shall be valued at Fair Market Value on the date of exercise. 5. The unexercised portion of the Option (both vested and non-vested) shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following: 5.1 The tenth anniversary of the Date of Grant; 5.2 Subject to the provisions of Section 5.3 and 5.4 below, 30 days following the date of termination of Optionee's service as an employee; provided, however, that if following such termination as an employee, Optionee is retained by the Company as a consultant, the Board or the Committee, in their sole discretion, may continue the Option for the balance of the term with respect to all or any portion of the Shares covered by it (in which case the Option shall not be deemed to have terminated) or may permit the termination to stand. Any such continuation shall not be deemed the grant of a new option. 5.3 If the Optionee retires as an employee of the Company with the consent of the Company, the Option (both vested and non-vested) shall expire on the date of retirement, except for any portion thereof which was otherwise exercisable on the date of retirement, which shall expire unless exercised within a period of 90 days after the date of retirement. 5.4 If Optionee dies while an employee or contractor of the Company or within the 30 day period following the date of termination of Optionee's status as an employee or consultant (described in Section 5.2) or the 90 day period following retirement with the consent of the Company (described in Section 5.3), any unexercised portion of the Option which was otherwise exercisable on the date of death shall be exercisable by the representative of the estate or the heirs or legatees of the Optionee at any time within the one year period from date of death. 5.5 If the Optionee's services with the Parent, the Company or any Subsidiary are terminated because of the Optionee's violation of his duties to the parent, the Company or any Subsidiary, including but not limited to, violation of Optionee's obligations contained in any agreement with the Parent, the Company or any subsidiary, or Optionee's violation of any other obligation written or otherwise to the Medco, Company or any Subsidiary, as he may from time to time have, the existence of which violation shall be determined by the Committee in its sole discretion (which determination shall be conclusive), - 4 - 5 the Option shall terminate immediately as of the time of termination of the Optionee's services and the Optionee shall have no right after such termination to exercise any Option the Optionee might have exercised prior to his termination of service. 5.6 In no event, however, shall the Option be exercisable after the expiration of ten years from the Date of Grant. Nothing in this Section 5 shall cause the Option to vest other than in accordance with the provisions of Section 3. 6. Subject to adjustment as provided in Section 11, the purchase price (the "Option Price") of the shares covered by this Agreement shall be $19.625 per share. 7. The parties hereto acknowledge that any breach of the Optionee of the non-competition covenant in any agreement with the Parent, the Company or any Subsidiary, the Optionee would cause irreparable damage to the Company. Accordingly, notwithstanding anything to the contrary contained herein, any breach or threatened breach by Optionee of the foregoing non-competition clause shall entitle the Company, in addition to any other legal and equitable remedies available to it, to declare forfeited any and all stock options granted by the Company to the Optionee, whether or not such options have vested or been exercised. The parties further agree that upon forfeiture, the Company is entitled to recover, and Optionee will disgorge to the Company, any profits or proceeds acquired from the Option. The forfeiture provision shall survive the termination of any such agreement and thereafter expire concurrently with the expiration date set forth in the non-competition covenant. The parties acknowledge that said forfeiture and disgorgement shall constitute liquidated damages for Optionee's breach of said non-competition covenant. The parties hereto understand and intend that the foregoing provisions shall be construed as separable and divisible, and the unenforceability of any restriction will not affect the enforceability of the remaining restrictions and that one or more or all of such restrictions may be enforced in whole or in part as the circumstances warrant. Should any court find any provision of such agreement unenforceable, the parties hereby agree that it is their intent to narrow the scope of such provision, including, without limitation, the forfeiture provision, in order to enforce its intent to the broadest extent permissible. 8. In case the Company is merged or consolidated with another corporation, or in case of a reorganization, separation, or liquidation of the Company, the Board or the board of directors of any corporation assuming the obligations of the Company under this Agreement shall either (i) make appropriate provisions for the protection of the Option by the substitution on an equitable basis of appropriate securities of the Company, - 5 - 6 or appropriate securities of the merged, consolidated, or otherwise reorganized corporation, or the appropriate adjustment in the Option price, or both, or (ii) give written notice to the Optionee that the Option must be exercised, to the extent exercisable after giving due effect to Section 3 above, within 60 days of the date of such notice or the Option will terminate. 9. The Optionee shall have no rights as a stockholder with respect to the Shares until the date the Company has issued and delivered the Shares to the Optionee, and the Optionee's name shall have been entered as the stockholder of record on the books of the Company and then only as to such Shares as are actually issued and delivered to the Optionee. 10.1 The Shares issued upon exercise of the Option shall be issued only to Optionee or a person permitted to exercise the Option pursuant to Section 3. Each share certificate representing Shares purchased upon exercise of the Option shall bear a legend stating that the Shares evidenced thereby may not be sold or transferred except in compliance with the Securities Act of 1933, as amended (the "1933 Act"). The certificate(s) may be made subject to a stop transfer order placed with the Company's transfer agent. 10.2 Notwithstanding any other provision of this Agreement, unless the issuance of Shares upon exercise of the Option shall then be covered by in effective registration statement under the 1933 Act, the Company shall have no obligation to issue any Shares pursuant to an exercise of the Option in the absence of an opinion of counsel to the Company that said sale may be effected pursuant to an exemption from the registration requirements of the 1933 Act. If the Company's Common Stock is not then publicly traded, the Company shall have no obligation to file a registration statement or take other steps to permit the Shares to be issued in compliance with the 1933 Act. It shall be a further condition to the Company's obligation to issue and deliver to Optionee certificates for those Shares, that Optionee deliver to the Company in writing a representation that such Optionee is exercising such Option for his own account for investment only and not with a view to distribution and that the Optionee will not make any sale, transfer or other disposition of any Shares purchased except (i) pursuant to the registration thereof under the 1933 Act, (ii) pursuant to am opinion of counsel, satisfactory in form and substance to the Company, that the sale, transfer or other disposition may be made without registration, or (iii) pursuant to a "no action" letter from the Securities and Exchange Commission. Optionee has been advised and understands the Shares must be held indefinitely unless they are registered for resale under the 1933 Act or an exemption from registration is available and that the Company is under no obligation to register those Shares under the 1935 Act for resale or to take any action that - 6 - 7 would make available to the holder any exception from registration. 11. The aggregate number of Shares purchasable under the Option and the Option Price for the Shares shall all be proportionately adjusted, as deemed appropriate by the Committee, if the Company's shares of Common Stock are split-up, converted, exchanged, reclassified, or in any way substituted for. The Committee shall also provide for appropriate adjustments of the number of Shares purchasable under the Option in the event of stock dividends or distributions of assets or securities of other companies owned by the Company to stockholders relating to its Common Stock for which the record date is prior to the date the Shares purchased by exercise of the Option are issued, except that no such adjustment shall be made for extraordinary cash dividends of 10% or less of the fair market value of the Common Stock (as established by the Board using any reasonable method of valuation) or stock dividends of 10% or less. Any such adjustment may include an adjustment of the Option Price or the number of Shares for which the Option may be exercised, or may provide for an escrow of assets or securities so distributed to be available upon future exercise, or a combination thereof, as the Committee deems appropriate. In the event of a change in the Company's presently authorized Common Stock which is limited to a change of all of its presently authorized shares of Common Stock with par value into the same number of shares without par value, or any change of the then authorized shares of Common Stock with par value into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be Shares, and no change in the number of Shares covered by the Option or in the Option Price shall take place. 12. If the parent, the Company or a Subsidiary shall be required to withhold any amounts by reason of any federal, state or local tax rules or regulations in respect of the payment of cash or the issuance of Shares pursuant to the exercise of the Option, the parent, the Company or such subsidiary shall be entitled to deduct and withhold such amounts from any cash payments to be made to the Optionee. In any event, the Optionee shall (i) make available to the Parent, the Company or such Subsidiary, promptly when requested by the parent, the Company or such Subsidiary, sufficient funds to meet the requirements of such withholding, or, (ii) to the extent permitted by the Committee irrevocably authorize the Company to withhold from the Shares otherwise issuable to the Optionee as a result of such exercise a number of Shares having a Fair Market Value, as of the date the withholding tax obligation arises (the "Tax Date") which alone, or when added to fund a paid to the parent, the Company or such Subsidiary by the Optionee equal the amount of the minimum withholding tax obligation (the "Withholding Election") and the parent, the Company or such Subsidiary shall be entitled to take and authorize such steps as it may deem advisable in order to - 7 - 8 have such funds made available to the Parent, the Company or such Subsidiary out of any funds or property due or to become due to the Optionee. The Committee or the Board may establish such rules and procedures as they deem necessary or advisable in connection with the withholding of taxes relating to the exercise of the Option. 13. If at any time an Optionee is indebted to the Company, the Company may in the discretion of the Committee (a) withhold from the Optionee (i) following the exercise by an Optionee of an Option, Shares issuable to the Optionee having a fair market value (as determined by the Board using any reasonable method of valuation) on the date of exercise up to the amount of indebtedness to the Company or (ii) following the sale by an Optionee of Shares received pursuant to the exercise of an Option, amounts due to an Optionee in connection with the sale of such Shares up to the amount of indebtedness to the Company, or (b) take any substantially similar action. 14. Nothing in the Plan or this Option Certificate shall confer (or be deemed to confer) upon the Optionee any right to continue in tho employ or continue to be retained by the parent, the Company or any Subsidiary or interfere in any way with the right of the Parent, the Company or any Subsidiary to terminate the Optionee's employment or retention at any time. 15. Each notice relating to the Option shall be in writing and delivered in person or by certified mail to the proper address. Each notice to the Company shall be addressed to it at: MEDICAL MARKETING GROUP, INC., 100 Summit Avenue, Montvale, New Jersey 07645, Attention. Vice President - Treasurer. Each notice to Optionee shall be addressed to Optionee at Optionee's address set forth below. Anyone to whom a notice may be given under the Option may designate a new address by notice to that effect. Each notice shall be deemed to have been given on the day it was received. The Company may require that any notice be on a specified form established by the Company. 16. All references to the masculine gender shall be deemed to include the feminine gender, is the context may require. 17. This Agreement shall inure to the benefit of and be binding upon each successor of the Company. Subject to Section 3, rights granted to the Company under this Agreement shall be binding upon Optionee's personal representatives and heirs at law. 18. This Agreement shall be the sole and exclusive source of any and all rights that Optionee, and Optionee's personal representatives or heirs at law, may have in respect of the Option as granted hereunder. This Agreement is subject to the terms of the Key Employee/Special Compensation Agreement executed by Optionee. - 8 - 9 19. The captions contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 20. The Committee shall have the authority to interpret and construe the provisions of this Agreement and such interpretation or construction shall be final and conclusive unless otherwise determined by the Board, and in any such event the determination of the Board shall be final and conclusive. The Committee may establish such rules and regulations concerning this Agreement as the Committee may determine to be necessary or advisable for the administration of this Agreement, including without limiting the foregoing, rules and regulations concerning non-competition provisions to be abided by the Optionee. The Option shall be governed by the laws of the State of Delaware applicable to agreements made and to be fully performed therein. 21. Should any part, term or condition hereof be declared illegal, unenforceable or not in compliance with any other law, the validity of the remaining portions or provisions of this Agreement shall not be affected thereby, and the portions or provisions declared illegal, unenforceable or not in compliance with such law shall be and hereby are redrafted to conform and be in compliance with applicable law, while leaving the remaining portions of this Agreement intact. WITNESS the signature of the Company's duly authorized officer and the Optionee. MEDICAL MARKETING GROUP, INC. By: Douglas W. Wamsly ----------------- Vice President ACCEPTED AND AGREED TO: By: Margaret P. Jablonski ----------------------- Optionee 219 S. Central Ave. ----------------------- [Address] Ramsey, NJ 07446 ----------------------- - 9 - EX-4.10 9 STOCK OPTION AGREEMENT -- ROGER HOLSTEIN/MMG 1 EXHIBIT 4.10 STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT (this "Agreement") made as of April 22, 1991, between MEDICAL MARKETING GROUP, INC., a Delaware corporation with offices at 100 Summit Avenue, Montvale, New Jersey 07645 (the "Company"), and ROGER C. HOLSTEIN ("Optionee"). RECITAL The Optionee was granted an option to purchase 30,000 shares of the Company's Common Stock on April 22, 1991, as an in- ducement to enter into the Optionee's Employment Agreement with Medco Containment Services, Inc. ("Medco"), dated as of July 29, 1991 (the "Employment Agreement"), pursuant to which Optionee will render services to Medco and its affiliates, including the Company. All terms used herein shall have the same meanings as in the Employment Agreement, unless otherwise defined. AGREEMENTS In consideration of the Recital (which is incorporated by reference) and the mutual covenants of this Agreement, the Company and Optionee agree as follows: 1. Confirmation of Grant of Option. The Company hereby confirms that Optionee has been granted, subject to the terms of this Agreement and the Employment Agreement, the right (the "Option") to purchase 30,000 shares of the common stock, $.01 par value, of the Company. All of the shares of the Company's common stock are hereinafter referred to as the "Common Stock," and the 30,000 shares of Common Stock that are subject to purchase hereunder are hereinafter referred to as "Shares". Said number of Shares subject to the Option may be adjusted as provided in Section 10. 2. Exercisability of Option. 2.1 Subject to the terms and conditions of Agreement, the Option shall become exercisable (i.e., "vested"): 2.1.1 with respect to 15% of the Shares, on and after the first anniversary of the commencement of the Employment Period under the Employment Agreement ("Employment Commencement Date"); 2.1.2 with respect to an additional 17.5% of the Shares, on and after the second anniversary of the Employment Commencement Date; -1- 2 2.1.3 With respect to an additional 20% of the Shares, on and after the third anniversary of the Employment Commencement Date; 2.1.4 with respect to an additional 22.5% of the Shares, on and after the fourth anniversary of the Employment Commencement Date; and 2.1.5 with respect to the remainder of the Shares, on and after the fifth anniversary of the Employment Commencement Date. 2.2 The unexercised portion of the Option vested and non-vested) shall automatically and without notice terminate and become null and void upon the earlier of the follow- ing: 2.2.1 The tenth anniversary of the date of this Agreement; 2.2.2 Subject to the provisions of Sections 2.3 and 2.4 below, 30 days following the date of termination of Optionee's status as an officer of Medco. 2.3 If Optionee dies while an officer of Medco or within the 30 day period following the date of termination of Op- tionee's status as an officer (described in Section 2.2.2). any unexercised portion of the Option that was otherwise exercisable on the date of Optionee's death shall be exercisable by Option- ee's personal representatives or heirs at law, if no personal rep- resentative is required by the governing state law, at any time within the one year period from date of Optionee's death. 2.4 Notwithstanding anything to the contrary con- tained herein, in no event shall the Option be exercisable after the expiration of ten years from the date of this Agreement. 3. Method of Exercise of Option. The Option may be ex- ercised by Optionee (or by Optionee's personal representatives of heirs at law, as provided in Section 2, but by no other person) as to all or (at Optionee's election) part of the Shares as to which the Option is then exercisable (that is, vested) under Sec- tion 2 by giving written notice of exercise to the Company at its principal business office, specifying the number of Shares for which the Option is exercised, accompanied by payment in full for such Shares (as determined pursuant to Section 4) together with any amount required for payroll withholding tax under all applica- ble federal, state or local laws or regulations. The failure to exercise the Option, in whole or in part, as to any vested exer- cise rights shall not constitute a waiver of these rights. The Company shall cause certifies for the Shares so purchased to -2- 3 be delivered to Optionee or Optionee's personal representatives or heirs at law, at its principal business office, against pay- ment in full of the Option price for such Shares (as determined pursuant to Section 4) and any amount required for payroll with- holding tax under all applicable federal, state or local laws or regulations, as soon as practicable following receipt of the not- ice of exercise. The Option Price and the required payroll with- holding taxes shall be paid in cash, certified check or bank draft. 4. Option Price. Subject to adjustment as provided in Section 10, the purchase price of the Shares covered by this Agreement shall be $21.75 per share. 5. Non-Transferability of Option. The Option shall not be transferable otherwise than by will or by the laws of de- scent and distribution. Without limiting the generality of the foregoing, the Option may not be assigned, transferred (except as permitted in the preceding sentence), pledged or hypothecated in any way (whether by operation of law or otherwise), and shall not be subject to levy, attachment or similar process. Any attempt to assign, transfer, pledge or hypothecate the Option contrary to the provisions of this Agreement, and any levy, attachment or sim- ilar process upon the Option shall be null and void and without effect, and the Company's Board of Directors or the Stock Option Committee thereof may, in its sole discretion, upon the happening of any such event, terminate the Option as of the date of such event. 6. No Rights Prior to Issuance of Shares. The holder of the Option shall not have any rights to dividends nor any other rights of a shareholder as to the Shares covered by the Op- tion until the Shares have been issued (as evidenced by the appro- priate entry on the books of the transfer agent of the Company) following exercise of the Option prior to its termination. 7. Violation of Section 9 of the Employment Agreement. The parties hereto acknowledge that any breach by the Optionee of any of the provisions of Section 9 of the Employment Agreement would cause grave and irreparable damage to the Company. Accord- ingly, notwithstanding anything to the contrary contained herein, any breach by the Optionee at any time of any one or more of provisions of Section 9 of the Employment Agreement shall have the consequences set forth in Section 4.4.4 of the Employment Agreement. The parties do not intend this Section 7 to be the ex- clusive remedy for a breach by Optionee of the provisions of such Section 9, and acknowledge that the remedies provided in this Sec- tion 7 are in addition to all other remedies provided under the Employment Agreement and applicable law. The provisions of this Section 7 shall survive the termination of the Employment Agree- ment. -3- 4 8. Restrictions on Exercise and on Common Stock. 8.1 The Shares issued upon exercise of the Option shall be issued only to Optionee or a person permitted to exer- cise the Option pursuant to Section 2.3. Each share certificate representing Shares purchased upon exercise of the Option shall bear a legend stating that the Shares evidenced thereby may not be sold or transferred except in compliance with the Securities Act of 1933, as amended (the "1933 Act"), and the provisions of the Employment Agreement. The certificate(s) may be made subject to a stop transfer order placed with the Company's transfer agent. 8.2 Notwithstanding any other provision of this Agreement, unless the issuance of Shares upon exercise of the Op- tion shall then be covered by an effective registration statement under the 1933 Act (which the Company presently intends to file), the Company shall have no obligation to issue any Shares pursuant to an exercise of the Option in the absence of an opinion of coun- sel to the Company that said sale may be effected pursuant to an exemption from the registration requirements of the 1933 Act. If the Company's Common Stock is not then publicly traded, the Com- pany shall have no obligation to file a registration statement or take other steps to permit the Shares to be issued in compliance with the 1933 Act. It shall be s further condition to the Com- pany's obligation to issue and deliver to Optionee certificates for those Shares, that Optionee deliver to the Company in writing a representation that such Optionee is exercising such Option for his own account for investment only and not with a view to distri- bution and that the Optionee will not make any sale, transfer or other disposition of any Shares purchased except (i) pursuant to the registration thereof under the 1933 Act, (ii) pursuant to an opinion of counsel, satisfactory in form and substance to the Com- pany, that the sale, transfer or other disposition may be made without registration, or (iii) pursuant to a "no action" letter from the Securities and Exchange Commission. Optionee has been advised and understands the Shares must be held indefinitely un- less they are registered for resale under the 1933 Act or an ex- emption from registration is available and that the Company is under no obligation to register those Shares under the 1933 Act for resale or to take any action that would make available to the holder any exemption from registration. 9. Right to Terminate Employment. This Agreement does not constitute a contract of, or an implied promise to continue, Optionee's employment or status with Medco or any subsidiary of Medco; and nothing contained in this Agreement shall confer upon Optionee the right to continue such employment or status; nor does this Agreement affect the right of Medco or any subsidiary of Medco to terminate Optionee's employment at any time. Option- ee shall have no rights in the benefits conferred by the Option or in any Shares except to the extent the Option is exercised -4- 5 while vested and prior to termination. Termination of the Option by reason of cessation of employment shall not give rise to any claim for damages or other relief by Optionee under this Agree- ment and shall be without prejudice to any rights or remedies that Medco or any subsidiary of Medco may have against Optionee. 10. Adjustment. 10.1 The number and Option Price of Shares covered by the Option, and any other rights under the Option, shall be adjusted, as deemed appropriate by the Company's Board of Direct- ors or the Stock Option Committee, as the case may be (whose good faith determination shall be absolute and binding upon the Option- ee), to reflect any subdivision (stock split) or consolidation (reverse split) of the issued Common Stock of the Company, or any other recapitalization of the Company, or any business combina- tion or other transaction involving the Company that shall sub- stantially affect the rights of holders of Common Stock. The Stock Option Committee or the Board of Directors, as the case may be, shall provide for appropriate adjustment of the Option in the event of stock dividends or distributions of assets or securities of other companies owned by the Company to stockholders relating to Common Stock for which the record date is prior to the date the Shares purchased by exercise of the Option are issued or transferred, except that no such adjustment shall be made for cash dividends or stock dividends of 10% or less (cumulatively, in the aggregate). 10.2 In the event of a change in the presently auth- orized Common Stock of the Company that is limited to a change of all of its presently authorized shares of Common Stock with par value into the same number of shares without par value, or any change of all of the then authorized shares of Common Stock with par value into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be Shares as defined in Section 1, and no change in the number of shares covered by the Option or in the Option Price shall take place. 11. Notices. Each notice relating to this Agreement shall be in writing and delivered in person or by certified mail to the proper address. Each notice to the Company shall be ad- dressed to it at its principal office, attention of the Vice Pres- ident - Treasurer, with a copy to the Executive Vice President General Counsel. Each notice to Optionee (or other person or per- sons then entitled to exercise the Option) shall be addressed Optionee (or such other person or persons) at Optionee's most re- cent address on the books of the Company. Anyone to whom a not- ice may be given under this Agreement may designate a new address by notice to that effect. Each notice shall be deemed to have been given on the day it is received. -5- 6 12. Benefits of Agreement. This Agreement shall inure to the benefit of and be binding upon each successor of the Com- pany. Subject to Section 2.3, rights granted to the Company under this Agreement shall be binding upon Optionee's personal representatives and heirs at law. 13. Source of Rights. This Agreement and the Employ- ment Agreement shall be the sole and exclusive source of any and all rights that Optionee, and Optionee's personal representatives or heirs at law, may have in respect of the Option as granted hereunder. In the event of any conflict between the provisions of the Employment Agreement and of this Agreement, the provisions of the Employment Agreement shall prevail. 14. Captions. The captions contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 15. Interpretation and Construction. The good faith interpretation and construction by the Board of Directors or by the Stock Option Committee of any provision of this Agreement shall be final and conclusive and binding on the parties hereto. 16. Governing Law. This Agreement shall be construed in accordance with and governed in all respects by the laws of the State of New Jersey without regard to any principles of con- flict of laws. EXECUTION The parties signed this Agreement as of the day and year first above written, whereupon it became binding in accordance with its terms. MEDICAL MARKETING GROUP, INC. By: James V. Manning ------------------------ James V. Manning Executive Vice President - Finance and Administration Roger C. Holstein ----------------- ROGER C. HOLSTEIN - 6 - EX-4.11 10 STOCK OPTION AGREEMENT -- CARL KANTER/MMG 1 EXHIBIT 4.11 STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT (this "Agreement") made as of May 1, 1992, between MEDICAL MARKETING GROUP, INC. a Delaware corporation with offices at 100 Summit Avenue, Montvale, New Jersey (the "Company"), and CARL KANTER ("Optionee"). RECITAL The Optionee was granted an option to purchase shares of the Company's Common Stock as of December 11, 1991, as an inducement to enter into the Optionee's employment Agreement with Medco Containment Services, Inc. ("Medco") the parent of the Company, dated as of May 1, 1992 (the "Employment Agreement") pursuant to which the Optionee will render services to Medco and its subsidiaries including the Company. As a result, the Company has elected to issue to the Optionee an option to acquire 30,000 shares of its Common Stock. All terms used herein shall have the same meanings as in the Employment Agreement, unless otherwise defined. AGREEMENTS In consideration of the Recital (which is incorporated by reference) and the mutual covenants of this Agreement, the Company and Optionee agree as follows: 1. Confirmation of Grant of Option. The Company hereby confirms that Optionee has been granted, subject to the terms of this Agreement and the Employment Agreement, the right (the "Option") to purchase 30,000 shares of Common Stock, $.01 par value, of the Company. All of the shares of the Company's Common Stock are hereinafter referred to as the "Common Stock," and the 30,000 shares of Common Stock which are subject to purchase hereunder are hereinafter referred to as "Shares". Said number of Shares subject to the Option may be adjusted as provided in Section 10. 2. Exercisability of Option. 2.1 Subject to the terms and conditions of this Agreement (including Sections 2.3, 2.4 and 2.5), the Option shall become exercisable (i.e., "vested"): 2.1.1 with respect to 20% of the Shares, on and after the first anniversary of the commencement of the Employment Period under the employment Agreement ("Employment Commencement Date"); 2 2.1.2 with respect to an additional 20% of the Shares, on and after the second anniversary of the Employment Commencement Data; 2.1.3 with respect to an additional 20% of the Shares, on and after the third anniversary of the Employment Commencement Date; 2.1.4 with respect to an additional 20% of the Shares, on and after the fourth anniversary of the Employment Commencement Date; and 2.1.5 with respect to the remainder of the Shares, on and after the second business day before the fifth anniversary of the Employment Commencement Date. 2.2 The unexercised portion of the Option (both vested and non-vested) shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following: 2.2.1 The tenth anniversary of the date of this Agreement; 2.2.2 Subject to the provisions of Sections 2.3, 2.4 and 2.5 below, 30 days following the date of termination of Optionee's status as an employee of Medco (during which period vesting shall continue). 2.3 If Optionee dies while employed by Medco or within the 30 day period following the date of termination of Optionee's employment (described in Section 2.2.2), any unexercised portion of the Option which was otherwise exercisable on the date of death shall be exercisable by Optionee's personal representatives or heirs at law, if no personal representative in required by the governing state law, at any time within the one year period from date of death. Notwithstanding anything to the contrary contained herein, if (a) Optionee dies during the Employment Period or (b) the Optionee's employment with Medco is terminated pursuant to Section 4.7 of the Employment Agreement by reason of subclause (ii) thereof or by reason of subclause (i) thereof and the Executive has submitted within 60 days of such termination by reason of subclause (i) to an examination by a duly licensed physician selected by Medco and such physician has determined that the Executive has a Permanent Disability, then, in each such case, 80% of the Shares (inclusive of such number of Shares as to which the Option theretofore became vested) subject to the Option shall automatically and immediately become exercisable and vested on the date of death or the date of termination pursuant to Section 4.7 by reason of subclause (ii) or the determination by such physician that the Executive has a Permanent Disability, as the case may be. - 2 - 3 2.4 Notwithstanding anything to the contrary contained herein, if a Change of Control (as defined below) has occurred during the Employment Period and following such Change of Control Optionee's employment with Medco is terminated "without cause", 100% of the then unvested Shares subject to the Option shall automatically and immediately become exercisable and vested on the effective data of Optionee's termination of employment and any unexercised Shares shall remain exercisable only for the time period specified in Section 2.2. For purposes of this Agreement, "Change of Control" shall mean (1) a merger of Medco into another entity (other than an entity controlled or jointly controlled by Medco), or (2) a merger of another entity (other than an entity controlled or jointly controlled by Medco), into Medco, or (3) a sale of all or substantially all of the assets of Medco to another entity (other than an entity controlled or jointly controlled by Medco), or (4) an entity, that is not controlled or jointly controlled by Medco, becomes the beneficial owner of more than fifty percent of the outstanding common stock of Medco, or (5) a successful solicitation of shareholder proxies occurs, the purpose of which is to remove from the Board of Directors those directors which have been proposed by the incumbent management of Medco; provided that after each such occurrence there results a change in the composition of the Board of Directors of Medco (or the surviving entity, as the case may be) such that the individuals who were the directors of Medco prior to such occurrence do not constitute at least fifty percent of the Board of Directors of Medco (or the surviving entity, as the case may be) immediately after such occurrence; and provided, further, that after any such occurrence, Martin J. Wygod is not a member of senior management of Medco (or the surviving entity, as the case may be). 2.5 In the event that (i) Optionee's employment with Medco is terminated "without cause" or (ii) the Optionee's bona fide termination of his employment with Medco pursuant to Section 7.2 of the Employment Agreement (other than a termination pursuant to Section 7.3 after a Change of Control, which shall be governed by Section 2.4), the Shares subject to the Option will continue to vest, in accordance with the schedule set forth in Section 2.1, until the later to occur of (a) one year from the date of termination of Optionee's employment or (b) the second anniversary of the Employment Commencement Date. In each case, the unexercised portion of the Option shall automatically and without notice terminate and become null and void 30 days following the final vesting of Shares pursuant to this Section 2.5. - 3 - 4 2.6 Notwithstanding anything to the contrary contained herein, in no event shall the Option be exercisable after the expiration of tan years from the date of this Agreement. 3. Method of Exercise of Option. The Option may be exercised by Optionee (or by Optionee's personal representatives or heirs at law, as provided in Section 2, but by no other person) as to all or (at Optionee's election) part of the Shares as to which the Option is then exercisable (that is, vested) under Section 2 by giving written notice of exercise to the Company at its principal business office, specifying the number of Shares for which the Option is exercised, accompanied by payment in full for such Shares (as determined pursuant to Section 4) together with any amount required for payroll withholding tax under all applicable Federal, State or local laws or regulations or payment may be made by the Optionee by any other method or at any other time at which the policies of the Company's Stock Option Committee permit as to other options. The failure to exercise the Option, in whole or in part, as to any vested exercise rights shall not constitute a waiver of these rights. The Company shall cause certificates for the Shares so purchased to be delivered to Optionee or Optionee's personal representatives or heirs at law, at its principal business office, against payment in full of the Option price for such Shares (as determined pursuant to Section 4), as soon as practicable following receipt of the notice of exercise and the applicable purchase price. The purchase price shall be paid in cash or by certified or official bank check. 4. Option Price. Subject to adjustment as provided in Section 10, the purchase price of the Shares covered by this Agreement shall be $25.00 per share. 5. Non-Transferability of Option. The Option shall not be transferable otherwise than by will or by the laws of descent and distribution. Without limiting the generality of the foregoing, the Option may not be assigned, transferred (except as permitted in the preceding sentence), pledged or hypothecated in any way (whether by operation of law or otherwise), and shall not be subject to levy, attachment or similar process. Any attempt to assign, transfer, pledge or hypothecate the Option contrary the provisions of this Agreement, and any levy, attachment or similar process upon the Option shall be null and void and without effect, and the Company's Board of Directors or the Stock Option Committee thereof may, in its discretion, upon the happening of any such event, terminate the Option as of the date of such event. 6. No Rights Prior to Issuance of Shares. The holder of the Option shall not have any rights to dividends nor any other rights of a shareholder with respect to the Shares covered - 4 - 5 by the Option until the Shares have been issued (as evidenced by the appropriate entry on the books of the transfer agent of the Company) following exercise of the Option prior to its termination. 7. Section 9 of the Employment Agreement Violation. Notwithstanding anything to the contrary contained herein, in the event of a material breach by the Optionee at any time of the provisions of Section 9 of the employment Agreement and termination of employment of the Executive if not previously terminated, the unexercised portion of the Option (both vested and non vested) shall automatically and without notice terminate and become null and void. 8. Restrictions on Exercise and on Common Stock. 8.1 The Shares issued upon exercise of the Option shall be issued only to Optionee or a person permitted to exercise the Option pursuant to Section 2.3. Each share certificate representing Shares purchased upon exercise of the Option shall bear a legend stating that the Shares evidenced thereby may not be sold or transferred except in compliance with the Securities Act of 1933, as amended (the "1933 Act"), and the provisions of the employment Agreement. The certificate(s) may be made subject to a stop transfer order placed with the Company's transfer agent, 8.2 Notwithstanding any other provision of this Agreement, unless the issuance of Shares upon exercise of the Option shall then be covered by an effective registration statement under the 1933 Act (which the Company shall have no obligation to file but has the present intention to file a Registration Statement on Form S-8 covering such Shares), the Company shall have no obligation to issue any Shares pursuant to an exercise of the Option in the absence of an opinion of counsel to the Company that said sale may be effected pursuant to an exemption from the registration requirements of the 1933 Act. If the Company's Common Stock is not then publicly traded, the Company shall have no obligation to file a registration statement or take other steps to permit the Shares to be issued in compliance with the 1933 Act. It shall be a further condition to the Company obligation to issue and deliver to Optionee certificates for those Shares, that Optionee deliver to the Company in writing a representation that such Optionee is exercising such Option for has own account (and, unless the Shares are then registered under the 1933 Act,) for investment only and not with a view to distribution and that the Optionee will not make any sale, transfer or other disposition of any Shares purchased except (i) pursuant to the registration thereof under the 1933 Act, (ii) pursuant to an opinion of counsel satisfactory in form and substance to the Company that the sale, transfer or other disposition may be made without registration, - 5 - 6 or (iii) pursuant to a "no action" letter from the Securities and Exchange Commission, Optionee has been advised and understands the Shares must be held indefinitely unless they are registered for resale under the 1933 Act or an exemption from registration is available and that the Company is under no obligation to register those Shares under the 1933 Act for resale or to take any action which would make available to the holder any exemption from registration. 9. Right to Terminate Employment. This Agreement does not constitute a contract of, or an implied promise to continue, Optionee's employment or status with Medco or any subsidiary of Medco; and nothing contained in this Agreement shall confer upon Optionee the right to continue such employment or status; nor does this Agreement affect the right of Medco to terminate Optionee's employment at any time. Optionee shall have no rights in the benefits conferred by the Option or in any Shares except to the extent the Option is exercised while vested and prior to termination. Termination of the Option by reason of cessation of employment shall give no rise for any claim for damages by Optionee under this Agreement and shall be without prejudice to any rights or remedies which Medco or any subsidiary of Medco may have against Optionee. 10. Adjustment. 10.1 The number and price per Share covered by the Option, and any other rights under the Option, shall be appropriately adjusted, as deemed appropriate by the Company's Board of Directors or the Stock Option Committee, as the case may be (whose good faith determination shall be absolute and binding upon the Optionee), to reflect any subdivision (stock split) or consolidation (reverse split) of the issued Common Stock of the Company, or any other recapitalization of the Company, or any business combination or other transaction involving the Company, which shall substantially affect the rights of holders of Common Stock. The Stock Option Committee or the Board of Directors, as the case may be, shall provide for appropriate adjustment of the Option in the event of stock dividends or distributions of assets or securities of other companies owned by the Company to stockholders relating to Common Stock for which the record date is prior to the date the Shares purchased by exercise of the Option are issued or transferred, except that no such adjustment shall be made for cash dividends or stock dividends of 10% or less (cumulatively, in the aggregate). 10.2 In the event of a change in the presently authorized Common Stock of the Company which is limited to a change of all of its presently authorized shares of Common Stock with par value into the same number of shares without par value, or any change of all of the then authorized shares of Common - 6 - 7 Stock with par value into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be Shares as defined in Section 1, and no change in the number of shares covered by the Option or in the Option Price shall take place. 11. Notices. Each notice relating to this Agreement shall be in writing and delivered in person or by certified mail to the proper address. Each notice to the Company shall be addressed to it at its principal office, attention of the Vice President - Treasurer, with a copy to the Executive Vice president - General Counsel. Each notice to Optionee (or other person or persons then entitled to exercise the Option) shall be addressed to Optionee (or such other person or persons) at Optionee's most recent address on the books of the Company. Anyone to whom a notice may be given under this Agreement may designate a new address by notice to that effect. Each notice shall be deemed to have been given on the day it is received. 12. Benefits of Agreement. This Agreement shall inure to the benefit of and be binding upon each successor of the Company. Subject to Section 2.3, rights granted to the Company under this Agreement shall be binding upon Optionee's personal representatives and heirs at law. 13. Source of Rights. This Agreement and the Employment Agreement shall be the sole and exclusive source of any and all rights which Optionee, and Optionee's personal representatives or heirs at law, may have in respect of the Option as granted hereunder. In the event of any conflict between the provisions of the Employment Agreement and of this Agreement, the provisions of the Employment Agreement shall prevail. 14. Captions. The captions contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 15. Interpretation and Construction. The good faith interpretation and construction by the Board of Directors or by the Stock Option Committee of any provision of this Agreement shall be final and conclusive and binding on the parties hereto. 16. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New Jersey without regard to any principles of conflict of laws. - 7 - 8 Execution The parties signed this Agreement as of the day and year first above written, whereupon is became binding in accordance with its terms. MEDICAL MARKETING GROUP, INC. By: James V. Manning ------------------------ James V. Manning Executive Vice President - Finance Carl Kanter --------------- CARL KANTER - 8 - EX-4.12 11 ASSUMPTION AGREEMENT BETWEEN REGISTRANT AND MMG 1 EXHIBIT 4.12 ASSUMPTION AGREEMENT dated as of April 6, 1994, between MEDICAL MARKETING GROUP, INC., a Delaware corporation (the "Company"), and MERCK & CO., INC., a New Jersey corporation ("Parent"); WHEREAS, Medco Containment Services, Inc., ("Medco"), MMG Acquisition Corp. and the Company entered into an Agreement and Plan of Merger, dated as of November 15, 1993 (the "Merger Agreement"; capitalized terms not defined herein shall have the meanings set forth in the Merger Agreement); WHEREAS, pursuant to Section 2.05 of the Merger Agreement, the parties agreed that as of the Effective Time, Parent shall assume the Company's obligations with respect to each Stock Option (except for the Stock Options set forth in Section 2.05 of the Company Disclosure Schedule) granted pursuant to the Stock Option Plans or granted to certain consultants, directors and key employees outside of any of the Stock Option Plans, which are outstanding as of the date hereof (the "Assumed Options") to purchase Shares, as modified by Section 2.05 of the Merger Agreement; NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein and in the Merger Agreement, Medco, the Company and Parent agree as follows: 1. As of the date hereof, Parent assumes the Company's obligations with respect to each Assumed Option to purchase Shares, as modified pursuant to paragraph 2 below. 2. The Assumed Options shall continue to have, and be subject to, the same terms and conditions set forth in the Stock Option Plans and agreements pursuant to which the Assumed Options were issued, as in effect immediately prior to the date hereof, except that: (a) the Assumed Options shall be exercisable for that number of whole Merck Shares equal to the product of the number of Shares covered by the Assumed Option immediately prior to the date hereof multiplied by the Exchange Ratio rounded up to the nearest whole number of Merck Shares, and 2 (b) the per share exercise price for Merck Shares issuable upon the exercise of the Assumed Option shall be equal to the quotient determined by dividing the exercise price per Share specified for such Assumed Option under the applicable Stock Option Plan or agreement immediately prior to the date hereof by the Exchange Ratio, rounding the resulting exercise price down to the nearest whole cent. 3. Each Assumed Option's date of grant shall be the date on which the Assumed Option was originally granted. 4. Nothing in this Assumption Agreement or in Section 2.05 of the Merger Agreement shall affect the schedule of vesting (or the acceleration thereof) with respect to the Assumed Options. 5. Parent, to the extent legally permissible, shall administer each Assumed Option in a manner that complies with Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, to the extent such Assumed Option complied with such rule prior to the Merger. 6. The parties hereto intend that, subject to applicable Law, each Assumed Option qualify following the date hereof as "incentive stock options" (as defined in Section 422 of the Internal Revenue Code of 1986, as amended) to the extent such Assumed Option qualified as an incentive stock option prior to the date thereof. 7. The parties hereto acknowledge and agree that the holders of the Assumed Options shall be deemed to be third party beneficiaries of this Assumption Agreement. 8. The parties hereto agree that this Assumption Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which when taken together shall constitute one and the same agreement. 2 3 IN WITNESS WHEREOF, Medco, the Company and Parent have caused this Assumption Agreement to be signed by their respective officers hereunto duly authorized, all as of the date first written above. MEDICAL MARKETING GROUP, INC. By: /s/ Douglas W. Wamsley ----------------------------- Vice President MERCK & CO., INC. By: /s/ MARY M. MCDONALD ----------------------------- Senior Vice President and General Counsel MEDCO CONTAINMENT SERVICES, INC. By: /s/ Victor L. Marrero ----------------------------- Senior Vice President 3 EX-5 12 OPINION OF BERT I. WEINSTEIN 1 EXHIBIT 5 [Merck Letterhead] OPINION OF COUNSEL April 28, 1994 Merck & Co., Inc. One Merck Drive Whitehouse Station, New Jersey 08889-0100 Dear Sir or Madam: Merck & Co., Inc. (the "Company") has requested my opinion, as Associate General Counsel of the Company, in connection with the Registration Statement on Form S-8 (the "Registration Statement") to be filed by the Company with the Securities and Exchange Commission under the Securities Act of 1993 (the "Act") with respect to 1,250,000 shares of common stock, no par value, of the Company (the "Shares") to be delivered in accordance with the provisions of the plans covered by the Registration Statement (the "Plans"). I or attorneys under my supervision have examined such records and have made such examination of law as I deem appropriate in connection with rendering such opinion. I have also assumed that the registration provisions of the Act and of such securities or "Blue Sky" laws as may be applicable shall have been complied with. Based on the foregoing, it is my opinion that the Shares, when delivered in accordance with the provisions of the Plans, will be legally issued, fully paid and non-assessable. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, I do not admit that I am in the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Securities and Exchange Commission thereunder. Very truly yours, /s/ Bert I. Weinstein EX-23 13 CONSENT OF ARTHUR ANDERSEN & CO. 1 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our reports dated January 25, 1994 included in and incorporated by reference in Merck & Co., Inc.'s Form 10-K for the year ended December 31, 1993 and to all references to our Firm included in this Registration Statement. ARTHUR ANDERSEN & CO. New York, New York May 4, 1994 -----END PRIVACY-ENHANCED MESSAGE-----