<PAGE> 1
As filed with the Securities and Exchange Commission on October 15, 1996
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
MEDPARTNERS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 63-1151076
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
3000 GALLERIA TOWER, SUITE 1000
BIRMINGHAM, ALABAMA 35244
(Address of Principal Executive Offices)
(Zip Code)
CAREMARK INTERNATIONAL INC. 1992 STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS
AND
CAREMARK INTERNATIONAL INC. QUALIFIED AND EMPLOYEE
STOCK PURCHASE PLAN
(Full Title of the Plans)
LARRY R. HOUSE
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
MEDPARTNERS, INC.
3000 GALLERIA TOWER, SUITE 1000
BIRMINGHAM, ALABAMA 35244
(Name and Address of Agent for Service)
(205) 733-8996
(Telephone Number, including Area Code, of Agent for Service)
The Commission is requested to send copies of all notices and
other communications to:
ROBERT E. LEE GARNER, ESQ. J. BROOKE JOHNSON, JR., ESQ.
JAMES HOWARD SINNOTT, ESQ. SR. VICE PRESIDENT AND GENERAL COUNSEL
HASKELL SLAUGHTER & YOUNG, L.L.C. MEDPARTNERS, INC.
1200 AMSOUTH/HARBERT PLAZA 300 GALLERIA TOWER, SUITE 1000
1901 SIXTH AVENUE NORTH BIRMINGHAM, ALABAMA 35244
BIRMINGHAM, ALABAMA 35203 TEL: (205) 733-8996
TEL: (205) 251-1000 FAX: (205) 982-7709
FAX: (205) 324-1133
---------------------------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share Price Registration Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 457,864 11.55 (3) $ 5,288,329.20(3) $1,823.56
$.001 per share (including shares(2)
Common Stock Purchase
Rights)(1)
Common Stock, par value 368,000 24.125 (5) $ 8,878,000.00(5) $3,061.38
$.001 per share (including shares(4)
Common Stock Purchase
Rights)(1)
Total 825,864 -- $14,166,329.20 $4,884.94
shares
</TABLE>
================================================================================
(1) The Common Stock Purchase Rights (the"Rights") are attached to and trade
with the common stock of MedPartners. The value, if any, attributable
to the Rights is reflected in the market price of the Common Stock of
MedPartners.
(2) Maximum number of shares which may be issued by MedPartners, Inc.,
formerly MedPartners/Mullikin, Inc. ("MedPartners") pursuant to
outstanding stock options under the Caremark International Inc. 1992
Stock Option Plan for Non-Employee Directors, which will be assumed by
MedPartners under the terms of the Plan and Agreement of Merger in
connection with the merger of PPM Merger Corporation with and into
Caremark International Inc.
<PAGE> 2
(3) Determined pursuant to Rule 457(h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee and
represents the average weighted exercise price of the options
heretofore granted under the Caremark International Inc 1992 Stock
Option Plan for Non-Employee Directors.
(4) Maximum number of shares which may be issued by MedPartners pursuant to
the exercise of subscription rights by participants in the Caremark
International Inc. Qualified Employee Stock Purchase Plan which plan
will be assumed by MedPartners under the terms of the Plan and
Agreement of Merger in connection with the merger of PPM Merger
Corporation with and into Caremark International Inc.
(5) Determined pursuant to Rule 457(h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee and
represents the last sale price of the Common Stock of MedPartners as
reported on the New York Stock Exchange Composite Transaction Tape on
October 10, 1996.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
MedPartners, Inc., a Delaware corporation (from November 28, 1995 to
September, 1996, known as MedPartners/Mullikin, Inc.) (the "Company"), hereby
incorporates by reference into this registration statement on Form S-8 (the
"Registration Statement") the following documents which have heretofore been
filed by the Company with the Securities and Exchange Commission (the
"Commission"):
(a) The Company's Prospectus filed as part of the Company's
Registration Statement on Form S-1 (Reg. No. 333-12465),
as filed with the Commission on October 3, 1996.
(b) The description of securities to be registered contained in
the Registration Statement filed with the Commission on Form
8-B under the Exchange Act and declared effective on November
29, 1995, including any amendment or reports filed for the
purpose of updating such description.
(c) All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since November 29, 1995.
(d) All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act prior
to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference into this Registration
Statement and to be a part hereof from the date of filing of
such documents.
Any statements contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes hereof to the
extent that a statement contained herein (or in any other subsequently filed
document which is also incorporated by reference herein) modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus except as so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
II-1
<PAGE> 4
ITEM 5. INTERESTS OF NAMED EXPERTS & COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the DGCL grants corporations the right to limit
or eliminate the personal liability of their directors in certain circumstances
in accordance with provisions therein set forth. The Company's Restated
Certificate of Incorporation contains a provision eliminating or limiting
director liability to the Company and its stockholders for monetary damages
arising from acts or omissions in the director's capacity as a director. The
provision does not, however, eliminate or limit the personal liability of a
director (i) for any breach of such director's duty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under the Delaware
statutory provision making directors personally liable, under a negligence
standard, for unlawful dividends or unlawful stock purchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit. This provision offers persons who serve on the Board of Directors of
the Company protection against awards of monetary damages resulting from
breaches of their duty of care (except as indicated above). As a result of
this provision, the ability of the Company or a stockholder thereof to
successfully prosecute an action against a director for a breach of his duty of
care is limited. However, the provision does not affect the availability of
equitable remedies such as an injunction or rescission based upon a director's
breach of his duty of care. The SEC has taken the position that the provision
will have no effect on claims arising under the federal securities laws.
Section 145 of the DGCL grants corporations the right to indemnify
their directors, officers, employees and agents in accordance with the
provision therein set forth. The Company's Amended and Restated By-laws
provide for mandatory indemnification rights, subject to limited exceptions, to
any director, officer, employee, or agent of the Company who, by reason of the
fact that he or she is a director, officer, employee, or agent of the Company
is involved in a legal proceeding of any nature. Such indemnification rights
include reimbursement for expenses incurred by such director, officer,
employee, or agent in advance of the final disposition of such proceeding in
accordance with the applicable provisions of the DGCL.
The Company has entered into agreements with all of its directors and
executive officers pursuant to which the Company has agreed to indemnify such
directors and executive officers against liability incurred by them by reason
of their services of a director to the fullest extent allowable under
applicable law. In addition, the Company has purchased insurance containing
customary terms and conditions as permitted by Delaware law on behalf of its
directors and officers, which may cover liabilities under the Securities Act of
1933.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
II-2
<PAGE> 5
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
- -------------- ----------------------
<S> <C>
(4)-1 MedPartners/Mullikin, Inc. Stockholders' Rights Plan, filed as Exhibit (4)-1 to the
Company's Registration Statement on Form S-4 (Registration No. 333-00774) is hereby
incorporated by reference.
(4)-2 Caremark International Inc. 1992 Stock Option Plan for Non-Employee Directors as assumed and adopted by
MedPartners, Inc. pursuant to the Plan and Agreement of Merger, dated as of May 13, 1996, between Med
Partners/Mullikin, Inc., PPM Merger Corporation and Caremark International, Inc.
(4)-3 Caremark International Inc. Qualified Employee Stock Purchase Plan, as assumed and adopted by
MedPartners, Inc. pursuant to the plan and Agreement of Merger, dated as of May 13, 1996, between
MedPartners/Mullikin, Inc., PPM Merger Corporation and Caremark International Inc.
(5) Opinion of Haskell Slaughter & Young, L.L.C. as to legality of the shares of MedPartners,
Inc. Common Stock being registered.
(23)-1 Consent of Ernst & Young LLP, Independent Auditors
(23)-2 Consent of Price Waterhouse LLP, Independent Accountants.
(23)-3 Consent of Haskell Slaughter & Young, L.L.C. (contained in the opinion of counsel filed as
Exhibit 5 to this Registration Statement).
24 Powers of Attorney (set forth on the signature page of this Registration Statement).
</TABLE>
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. Notwithstanding the foregoing, any increase or
decrease in the amount of securities offered (if the total
dollar value of securities offered would not exceed that
II-3
<PAGE> 6
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to
Rule 424(b) under the Securities Act if, in the aggregate, the
changes in amount and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
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 (a)(1)(i) and (ii) do not
apply if the registration statement is on Form S-3, S-8, or F-3,
and the information required to be included in a post-effective
amendment by those paragraphs is contained in period reports
filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Act, 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) 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.
Insofar as indemnification for liabilities arising under the Act 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 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
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-4
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 the City of Birmingham, State of Alabama, on October 15,
1996.
MEDPARTNERS, INC.
By Larry R. House
--------------------------------------
Larry R. House
Chairman of the Board, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Larry R. House and Harold O. Knight,
Jr., and each or either of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and any subsequent registration statements relating to the offering to which
this Registration Statement relates, 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 requisite and necessary to be done in and about the premises, as fully
and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or either
of them, or their or his substitutes or substitute, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Larry R. House Chairman of the Board, President October 15, 1996
- ------------------------------------------- and Chief Executive Officer
Larry R. House (Principal Executive Officer)
Harold O. Knight, Jr. Executive Vice President and October 15, 1996
- ------------------------------------------- Chief Financial Officer
Harold O. Knight, Jr. (Principal Financing and
Accounting Officer) October 15, 1996
Richard M. Scrushy
- ------------------------------------------- Director October 15, 1996
Richard M. Scrushy
</TABLE>
II-5
<PAGE> 8
<TABLE>
<S> <C> <C>
Larry D. Striplin, Jr. Director October 15, 1996
- -------------------------------------------
Larry D. Striplin, Jr.
Charles W. Newhall III Director October 15, 1996
- -------------------------------------------
Charles W. Newhall III
Ted H. McCourtney, Jr. Director October 15, 1996
- -------------------------------------------
Ted H. McCourtney, Jr.
Walter T. Mullikin, M.D. Director October 15, 1996
- -------------------------------------------
Walter T. Mullikin, M.D.
John S. McDonald, J.D. Director October 15, 1996
- -------------------------------------------
John S. McDonald, J.D.
Richard J. Kramer Director October 15, 1996
- -------------------------------------------
Richard J. Kramer
Rosalio J. Lopez, M.D. Director October 15, 1996
- -------------------------------------------
Rosalio J. Lopez, M.D.
C.A. Lance Piccolo Director October 15, 1996
- -------------------------------------------
C.A. Lance Piccolo
Thomas W. Hodson Director October 15, 1996
- -------------------------------------------
Thomas W. Hodson
Roger L. Headrick Director October 15, 1996
- -------------------------------------------
Roger L. Headrick
Harry M. Jansen Kraemer, Jr. Director October 15, 1996
- -------------------------------------------
Harry M. Jansen Kraemer, Jr.
</TABLE>
II-6
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page Number
- ---------- ---------------------- -----------
<S> <C> <C>
(4)-1 MedPartners/Mullikin, Inc. Stockholders' Rights Plan, filed as
Exhibit (4)-1 to the Company's Registration Statement on Form S-
4 (Registration No. 333-00774) is hereby incorporated by
reference.
(4)-2 Caremark International Inc. 1992 Stock Option Plan for Non-Employee
Directors as assumed and adopted by MedPartners, Inc. pursuant to the
Plan and Agreement of Merger, dated as of May 13, 1996, between Med
Partners/Mullikin, Inc., PPM Merger Corporation and Caremark
International, Inc.
(4)-3 Caremark International Inc. Qualified Employee Stock Purchase Plan, as
assumed and adopted by MedPartners, Inc. pursuant to the plan and
Agreement of Merger, dated as of May 13, 1996, between MedPartners/
Mullikin, Inc., PPM Merger Corporation and Caremark International Inc.
(5) Opinion of Haskell Slaughter & Young, L.L.C. as to legality of
the shares of MedPartners, Inc. Common Stock being registered.
(23)-1 Consent of Ernst & Young LLP, Independent Auditors.
(23)-2 Consent of Price Waterhouse LLP, Independent Accountants.
(23)-3 Consent of Haskell Slaughter & Young, L.L.C. (contained in the
opinion of counsel filed as Exhibit 5 to this Registration
Statement).
24 Powers of Attorney (set forth on the signature page of this
Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT (4)-2
CAREMARK INTERNATIONAL INC.
1992 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. Purpose and Effective Date. The purpose of this Caremark
International Inc. 1992 Stock Option Plan for Non-Employee Directors (the
"Plan") is to increase stockholder value and to advance the interests of
Caremark International Inc. ("Caremark") by strengthening its ability to
attract and retain the services of experienced and knowledgeable directors and
by causing each non-employee director to acquire an equity interest in Caremark
by substituting stock options for all or a portion of the cash retainer
otherwise payable to the director. The Plan shall be effective as of November
30, 1992, the date on which Baxter International Inc. distributes the
outstanding shares of Caremark common stock ("Common Stock") to its
shareholders (the "Distribution Date").
2. Administration. The Plan shall be administered by the Compensation
Committee of the Caremark Board of Directors (the "Committee"). Subject to the
provisions of the Plan, the Committee shall have the authority to manage and
control the operation of the Plan, interpret the provisions of the Plan, and
prescribe, amend, and rescind rules and regulations relating to the Plan. The
determination of the Committee on matters within its authority shall be
conclusive and binding on Caremark and all other persons.
3. Participation. Each director of Caremark who is not an employee of
Caremark or any of its subsidiaries (an "Eligible Director") shall participate
in the Plan.
4. Shares Subject to the Plan. The number of shares of Common Stock
subject to the options granted under the Plan in any year shall be determined in
accordance with the formulae set forth in paragraphs 5 and 6 below. To the
extent provided by resolution of the Board of Directors, shares of Common Stock
issued pursuant to the exercise of any such stock option shall be
uncertificated. In the event of any merger, consolidation, reorganization,
recapitalization, spinoff, stock dividend, stock split, reverse stock split,
exchange or other distribution with respect to shares of Common Stock or other
change in the corporate structure or capitalization affecting the Common Stock,
the type and number of shares of Common Stock which are or may be subject to
options under the Plan and the terms of any outstanding options (including the
price at which shares of Common Stock may be issued pursuant to an outstanding
option) shall be adjusted by the Committee.
5. Automatic Stock Options. In lieu of one-third of the retainer
otherwise payable in cash by Caremark to an Eligible Director, such director
shall receive stock options in accordance with the provisions of this paragraph
5. A stock option shall be granted to an Eligible Director on the director's
"Initial Grant
<PAGE> 2
Date" which shall be the first date on which the director becomes an Eligible
Director or, if later, the tenth trading day after the distribution of Common
Stock. Additional stock options shall be granted to Eligible Directors on
"Subsequent Grant Dates" of May 1, 1998 and every five years thereafter. The
number of shares subject to each stock option granted under this paragraph 5
shall be determined as follows:
(a) The amount of the cash retainer that would be foregone by an Eligible
Director for the period beginning on the grant date and ending on the
next Subsequent Grant Date. Such amount shall be determined by
multiplying (i) one-third of the director's annual cash retainer
(including committee fees but not meeting fees) on the date of grant
by (ii) a fraction, the numerator of which is the number of months
between such grant date and the next Subsequent Grant Date, and the
denominator of which is 12. An Eligible Director's annual cash
retainer shall be determined for purposes of this paragraph (a) prior
to giving effect to the terms of this Plan or any deferred
compensation plan or agreement applicable to the director.
(b) The amount determined under paragraph (a) above shall be multiplied by
three to determine the aggregate exercise price of the stock option.
(c) The amount determined under paragraph (b) above shall be divided by
the exercise price per share (determined under paragraph 7(a) below)
and rounded to the next highest multiple of 100 to determine the
number of shares of Common Stock which are subject to the stock
option.
Eligible Directors shall receive the foregoing stock options regardless of the
length of their terms of office on the dates on which the options are granted.
Except as provided in paragraph 7 below with respect to the exercisability of an
option, no adjustment shall be made to an option to reflect either a termination
of service as a director or a change in the Eligible Director's annual retainer
after the date as of which the option is granted. If an Eligible Director
becomes entitled to an increased annual retainer during the term of an option,
such additional amount shall be paid in cash without reduction under this
paragraph 5 until the next date on which the director is granted a stock option
under this paragraph.
6. Elective Stock Options. In addition to the stock options granted in
lieu of one-third of an Eligible Director's retainer under paragraph 5 above, an
Eligible Director may elect to receive stock options under this paragraph 6 (on
the same dates as the options granted under paragraph 5) in lieu of all or
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<PAGE> 3
a portion of the balance of the director's cash retainer. Each election under
this paragraph 6 shall be in writing filed with the Secretary of Caremark; shall
designate a portion, not in excess of two-thirds, of the Eligible Director's
cash retainer to which the election shall apply; shall be irrevocable; and,
except for the election made with respect to an Eligible Director's Initial
Grant Date (which may be made at any time on or before the tenth trading day
after the distribution of Common Stock), shall be made at least six months prior
to the date as of which it is to become effective. An Eligible Director who
makes an election under this paragraph 6 shall be granted a stock option on the
date as of which the corresponding option is granted under paragraph 5 above.
No option shall be granted if the director ceases to be an Eligible director
after the date of the director's election but prior to the date as of which the
option is granted. The number of shares subject to each option under this
paragraph 6 shall be determined in accordance with paragraphs 5(a) through 5(c)
above, except that the portion of the Eligible Director's cash retainer
designated in the applicable election under this paragraph 6 shall be
substituted for the one-third portion set forth in clause 5(a)(i).
7. Option Terms. Each option granted under the Plan shall be subject to
the following terms and conditions:
(a) In the case of a stock option granted as of the tenth trading day
after the distribution of Common Stock, the exercise price per share
of Common Stock shall be equal to the greater of par value or the
average of the Fair Market Value (as defined in paragraph 9 below) of
a share of Common Stock for each of the first ten trading days after
the distribution of Common Stock. In the case of a stock option
granted thereafter, the exercise price per share of Common Stock shall
be equal to the greater of par value or the Fair Market Value of a
share of Common Stock on the date as of which the option is granted.
(b) Except as otherwise provided by the provisions of paragraph 7(c), 7(d)
or 8 below, the option shall become exercisable on a cumulative basis
in annual 20% increments, commencing on the May 1 following the date
of grant.
(c) If the director to whom the option is granted ceases to be a director
for any reason other than death or disability prior to the date on
which the option becomes fully exercisable in accordance with
paragraph (b) above, the number of shares with respect to which the
option shall be exercisable on a cumulative basis shall be the greater
of the number, rounded to the
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<PAGE> 4
nearest integer, determined under paragraph (b) above, or the product,
rounded to the nearest integer, obtained by multiplying the number of
shares originally subject to the option by a fraction, the numerator
of which is the number of months elapsed since the date of grant and
the denominator of which is the number of months between the date of
grant and the next Subsequent Grant Date. The balance of the stock
option shall immediately terminate and cease to be outstanding.
(d) If the director to whom the option is granted ceases to be a director
by reason of death or disability, the stock option shall become
immediately exercisable in full.
(e) An option shall terminate and cease to be outstanding as of the
earlier of ten years and one day after the date as of which it is
granted or one year after the date on which the director ceases to be
a director of Caremark for any reason.
(f) An option may be exercised, in whole or in part, by giving written
notice to the Secretary of Caremark prior to the date on which the
option terminates. Such notice shall specify the number of whole
shares of Common Stock to be purchased and shall be accompanied by
payment in full of the option price for such shares by cash, check or
bank draft. An option shall not be exercisable with respect to
fractional shares.
8. Immediate Acceleration of Options. Notwithstanding any provision in
this Plan to the contrary, all outstanding stock options granted under the Plan
will become exercisable immediately if a Change in Control occurs. For purposes
of this Plan, a "Change in Control" shall have occurred if:
(a) any "Person", as such term is used in Section 13(d) and 14(d) of the
Exchange Act (other than Caremark, any corporation owned, directly or
indirectly, by the stockholders of Caremark in substantially the same
proportions as their ownership of stock of Caremark, and any trustee
or other fiduciary holding securities under an employee benefit plan
of Caremark or such proportionately owned corporation), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of Caremark
representing 15% or more of the combined voting power of Caremark's
then outstanding securities having the right to vote for the election
of directors;
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<PAGE> 5
(b) during any 24 month period, individuals who at the beginning of such
period constitute the board of directors of Caremark, and any new
director (other than a director designated by a Person who has entered
into an agreement with Caremark to effect a transaction described in
paragraph (a), (c) or (d) of this paragraph 8) whose election by the
board or nomination for election by Caremark's stockholders was
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;
(c) the stockholders of Caremark approve a merger or consolidation of
Caremark with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of Caremark
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities
of the surviving entity) more than 60% of the combined voting power of
the voting securities of Caremark or such surviving entity outstanding
immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of Caremark (or
similar transaction) in which no Person acquires more than 15% of
Caremark's then outstanding securities having the right to vote for
the election of directors; or
(d) the stockholders of Caremark approve a plan of complete liquidation of
Caremark or an agreement for the sale or disposition by Caremark of
all or substantially all of Caremark's assets (or any transaction
having a similar effect).
9. Definition of Fair Market Value. The "Fair Market Value" of a share
of Common Stock, as of any date, shall be equal to the closing sale price of a
share of Common Stock as reported on the National Association of Securities
Dealers' New York Stock Exchange Composite Reporting Tape (or if the Common
Stock is not traded on the New York Stock Exchange, the closing sale price on
the exchange on which it is traded or as reported by an applicable automated
quotation system) (the "Composite Tape") on the applicable date or, if no sales
of Common Stock are reported on such date, the closing sale price of a share of
Common Stock on the date the Common Stock was last reported on the Composite
Tape (or such other exchange or automated quotation system, if applicable).
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<PAGE> 6
10. Non-transferability of Options. No option granted under the Plan
may be transferred, pledged or assigned by the holder thereof (except, in the
event of a director's death, by will or the laws of descent and distribution),
and Caremark shall not be required to recognize any attempted assignment of such
rights by any person. During a director's lifetime, options may be exercised
only by him or by his guardian or legal representative.
11. Compliance with Applicable Law.
(a) Notwithstanding any other provision of the Plan, Caremark shall have
no obligation to issue any shares of Common Stock under the Plan if
such issuance would violate an applicable law or the applicable
regulations or requirements of any securities exchanges or similar
entities.
(b) Prior to the issuance of any shares of Common Stock under the Plan,
Caremark may require a written statement that the recipient is
acquiring the shares for investment and not for the purpose or with
the intention of distributing the shares and will not dispose of
them in violation of the registration requirements of Securities Act
of 1933.
(c) The Committee may, at any time, add such conditions and limitations
to any grant that it deems necessary or desirable to comply with the
requirements of Rule 16b-3.
(d) If at any time, Caremark, in its sole discretion, determines that
the listing, registration or qualification (or any updating of any
such document) of any option grant, or the shares of Common Stock
issuable pursuant thereto, is necessary on any securities exchange
or under any federal or state securities or blue sky law, or that
the consent or approval or any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, any
option grant, the issuance of shares of Common Stock pursuant to any
grant, such option shall not be granted and the shares of Common
Stock shall not be issued, as the case may be, in whole or in part,
unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions
not acceptable to Caremark.
12. Treatment as a Stockholder. Any option grant to an Eligible
Director under the Plan shall not create any rights in
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<PAGE> 7
such director as a stockholder of Caremark until shares of Common Stock are
registered in the name of the director.
13. Amendment and Termination. The Plan may be amended or
terminated at any time by the Caremark Board of Directors; provided, however,
that the provisions of the Plan relating to the timing and amount of options,
the option price and the exercise terms shall not be amended more than once
every six months and, provided further, that no amendment shall be adopted
without shareholder approval which would cause the Plan to cease to meet the
requirements of Rule 16b-3 promulgated under the Securities Exchange Act of
1934.
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<PAGE> 1
EXHIBIT (4)-3
CAREMARK INTERNATIONAL INC.
QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. Caremark International Inc., a Delaware corporation
("Caremark"), has established the Caremark International Inc. Qualified Employee
Stock Purchase Plan (the "Plan") to offer its employees and the employees of its
designated subsidiaries the right to purchase shares of common stock, $1.00 par
value, of Caremark ("Common Stock") on the terms and conditions set forth
herein. For purposes of the Plan, the term "subsidiary" means any corporation
in which Caremark has, either directly or indirectly, at least a 50 percent
ownership interest. It is intended that this Plan, and all rights granted
hereunder will meet the requirements of an "employee stock purchase plan"
within the meaning of section 423 of the Internal Revenue Code of 1986, as
amended (the "Code), as such provisions may be amended from time to time.
The Plan, in all respects, shall be interpreted and construed so as to be
consistent with such purpose.
2. Administration. The plan shall be administered by the Compensation
Committee of the Caremark Board of Directors (the "Committee"), which Committee
shall consist of two or more disinterested persons within the meaning of Rule
16b-3 ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); provided, however, that, with respect any matter
that does not relate to the participation of or the price, amount or timing of
Subscriptions (as defined in subsection 5.1) relating to persons who are subject
to section 16(a) of the Exchange Act, the Committee may delegate to the Chairman
of the Board or, except as to the issuance of stock, to any other officer of the
Company any or all authority otherwise delegated to the Committee under the
terms of the Plan. The Committee shall have the authority to (a) manage and
control the operation of the Plan; (b) interpret and construe the provisions of
the Plan, and prescribe, amend and rescind rules and regulations and relating to
the Plan; (c) correct any defect or omission and reconcile any inconsistency
in the Plan; and (d) make all other determinations necessary or desirable for
the implementation and administration of the Plan. The determination of the
Committee on matters within its authority shall be conclusive and binding on
Caremark and its subsidiaries and all other persons.
3. Employees Entitled to Participate. Subject to the terms and
conditions of the Plan, all employees of Caremark and such subsidiaries as the
Committee may designate shall be eligible to participate in the Plan; provided,
however, that the Committee may exclude from participation: (a) employees who
have been employed less than any designated period (not to exceed two years);
(b) employees whose customary employment is less than any designated number of
hours (not to exceed 20) per week; or (c)
<PAGE> 2
employees whose customary employment is less than any designated period (not
exceeding five months) in any calendar year.
4. Shares Subject to Plan.
4.1 Number of Shares Reserved. The total number of shares of
Common Stock authorized to be issued hereunder is 6,000,000, which may be either
newly issued or Treasury shares. To the extent provided by resolution of the
Caremark Board of Directors, such shares may be uncertificated.
4.2 Reusage of Shares. In the event of the exercise,
expiration, withdrawal or other cancellation of a Subscription (as described
in subsection 5.1) under the Plan, the number of shares of Common Stock that
were subject to the Subscription but not delivered shall again be available
for Subscriptions under the Plan.
4.3 Adjustment to Shares Reserved. In the event of any merger,
consolidation, reorganization, recapitalization, spinoff, stock dividend, stock
split, reverse stock split, exchange or other distribution with respect to
shares of Common Stock or other change in the corporate structure or
capitalization affecting the Common Stock, the type and number of shares of
stock which are or may be subject to Subscriptions under the Plan and the terms
of any outstanding Subscriptions (including the Subscription Price) shall be
equitably adjusted by the Committee, in its sole discretion, to preserve the
value of benefits under the Plan.
5. Subscriptions.
5.1 Method of Subscription. Subject to the terms and
conditions of the Plan, an eligible employee may elect to participate in the
Plan by delivering an executed "Subscription" to the Committee, which
Subscription shall specify the number of shares of Common Stock that are subject
to the Subscription. The Subscription shall be effective on the date that it is
received by the Secretary of Caremark. Notwithstanding the foregoing provisions
of this subsection 5.1:
(a) An employee's Subscription will not become effective to the
extent that the Subscription would permit the employee's right to
purchase stock under the Plan (and all other employee stock purchase
plans of Caremark and its subsidiaries) to accrue at a rate that exceeds
$25,000 in Fair Market Value (as defined in subsection 9.9) of the Common
Stock (determined as of the date the Subscription is made) for each
calendar year during which the Subscription would be outstanding at any
time.
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<PAGE> 3
(b) An employee's Subscription shall not become effective to
the extent that, immediately after the Subscription, the employee owns or
constructively owns (within the meaning of sections 423(b) (3) and 424(d)
of the Code) stock (including stock subject to the Subscription)
possessing 5% or more of the total combined voting power or value of all
classes of stock or Caremark or its subsidiaries.
(c) An employee's Subscription shall not become effective to
the extent that, immediately after the Subscription, the aggregate
Subscription Prices for the shares of Common Stock subject to all of that
employee's outstanding Subscriptions would exceed 25 percent of the
employee's then annual rate of basic compensation. For purposes of the
Plan, an employee's "basic compensation" shall not include prizes,
bonuses, reimbursed relocation expenses and similar nonrecurring items.
The Committee may, from time to time, limit the number of Subscriptions that an
employee may have outstanding under the Plan at any time or the frequency with
which Subscriptions may be made, specify a minimum number of shares or multiple
of a number of shares that may be subject to a Subscription under the Plan,
and impose restrictions on an employee's ability to subscribe following any
withdrawal of a Subscription; provided, however, that any such limitations or
restrictions shall apply uniformly to all eligible employees. Subject to the
terms and conditions of the Plan, a Subscription shall remain outstanding
until it is exercised, withdrawn, expires or is otherwise terminated in
accordance with the terms of the Plan.
5.2 Subscription Price. The Subscription Price per share of
Common Stock subject to a Subscription shall be the lesser of (a) 85% of the
Fair Market Value of a share of Common Stock on the effective date of the
Subscription; or (b) 85% of the Fair Market Value of a share of Common Stock on
the day the Subscription is exercised, as provided in Section 7 below.
5.3 Expiration of Subscriptions. To the extent not previously
exercised, withdrawn or otherwise cancelled, each Subscription shall expire and
may not be exercised, in whole or in part, after the earliest of;
(a) the date which is 27 months after the effective date of the
Subscription (or such shorter period as the Committee may from time to
time prescribe);
(b) the date which is three months after an employee's
employment with Caremark and its subsidiaries terminates by reason of
permanent disability, retirement at or after age 55 or, to the extent
provided by the Committee, the
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<PAGE> 4
divestiture by Caremark of a division or a subsidiary by which he is
employed;
(c) the date which is twelve months after an employee's death;
or
(d) subject to the provisions of subsection 7.3, the date the
employee's employment with Caremark and its subsidiaries terminates for
any reason other than those described in paragraphs (b) or (c) next
above.
5.4 Withdrawal of Subscriptions. An employee may withdraw any
of his outstanding Subscriptions by filing a written notice of such withdrawal
with the Committee (or its designee) on a form approved by it, which form shall
specify the Subscriptions to be withdrawn. Upon receipt by the Secretary of
Caremark of a notice of withdrawal, the Subscriptions designated in the notice
shall be cancelled as to all unexercised shares and the employee's payroll
deductions (as described in subsection 6.1) shall be adjusted to reflect such
cancellation.
6. Payroll Deductions; Subscription Account.
6.1 Payroll Deductions. For any period during which an
employee has a Subscription outstanding, payroll deductions shall be made from
the employee's basic compensation for each payroll period during which the
Subscription is outstanding, (or, if such deductions are not permitted under
applicable law, by any alternative method approved by the Committee).
Deductions shall begin as soon as practicable after the Subscription becomes
effective, at such rates as determined by the Committee to ensure that the
Subscription Price for all of the shares subject to the Subscription shall be
paid at least ratably over a period not exceeding 27 months.
6.2 Subscription Account. The Committee shall cause a separate
bookkeeping account (a "Subscription Account") to be maintained for each
employee for whom payroll deductions have been made (or who makes payments
pursuant to subsection 7.3), which account will reflect the accumulated payroll
deductions (or other payments) made on behalf of the employee, reduced for any
charges made against such account pursuant to Section 7 or any distributions
from such account pursuant to the provisions of the Plan.
6.3 Distribution of Balance of Subscription Account. To the
extent that any balance remains in an employee's Subscription Account at the
time all of the employee's Subscriptions cease to be outstanding (whether by
exercise, withdrawal, expiration or otherwise), the balance in the Subscription
Account shall be distributed to the employee (or, in
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<PAGE> 5
the event of his death, his estate) as soon as practicable after the last
Subscription ceases to be outstanding.
7. Exercise of Subscriptions.
7.1 Exercise While Employed. When an employee's Subscription Account
balance equals or exceeds the Subscription Price for at least twenty shares
(determined in the order that the Subscriptions were made), he shall be deemed
to have exercised his Subscriptions with respect to that number of shares. Upon
exercise, the employee's Subscription Account will be charged with the aggregate
Subscription Price for the shares with respect to which the Subscriptions are
exercised and payment of the Subscription Price for such shares will be made to
Caremark. Within a reasonable time after exercise, Caremark shall issue such
shares and may cause a certificate to be transferred to the employee or to a
custodian approved by the Committee on behalf of the employee. In no event
shall fractional shares be issued pursuant to the Plan.
7.2 Exercise Upon Death, Permanent Disability, Retirement and
Designation. If an employee's employment with Caremark and its subsidiaries
terminates by reason of death, permanent disability, retirement at or after age
55 or, to the extent provided by the Committee, the divestiture by Caremark of a
division or a subsidiary by which he is employed, the employee (or, in the case
of his death, his estate) may exercise his outstanding Subscriptions, in whole
or in part, by filing a written notice of exercise with the Committee prior to
the date on which such Subscriptions expire. Upon exercise, the employee's
Subscription Account will be charged with the aggregate Subscription Price for
the shares with respect to which the Subscriptions are exercised and the amount
so charged shall be paid to Caremark. To the extent that the balance in the
Subscription Account is not sufficient to satisfy the Subscription Price, the
employee (or his estate, if applicable) shall make payment to Caremark of the
difference. Within a reasonable time after exercise, Caremark shall issue such
shares or cause such shares to be transferred to the employee or to a custodian
approved by the Committee on behalf of the employee.
7.3 Temporary Absence. If an employee ceases to be an employee of
Caremark or its subsidiaries by reason of leave of absence, temporary layoff, or
temporary disability, the employee may, for a period of 180 days, make regular
payments to the Treasurer of Caremark in an amount equal to the payroll
deductions that would have otherwise been required pursuant to subsection 6.1
had he continued as an employee and such payments shall be credited to his
Subscription Account in the same manner as payroll deductions. If the employee
has not resumed regular employment with Caremark or its subsidiaries when such
180 day period has ended, or if the employee does not make periodic
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<PAGE> 6
payments during the period of his absence, he shall be treated as having
terminated employment for a reason other than those described in subsection 7.2
as of the expiration of the 180 day period (or, if earlier, the date on which
his periodic payments cease).
8. Former Participants in Baxter Plan.
8.1 Application. This Section 8 shall apply to employees who have
subscriptions ("Baxter Subscriptions") outstanding under the Qualified Employee
Stock Purchase Plan (the "Baxter Plan") maintained by Baxter International Inc.
("Baxter") immediately prior to the date on which Baxter distributes the
outstanding shares of Common Stock to Baxter shareholders (the "Distribution
Date").
8.2 Issuance of Subscriptions. Subject to the following provisions
of this Section 8, each employee who, immediately prior to the Distribution
Date, has any outstanding Baxter Subscriptions shall be deemed to have submitted
Subscriptions under the Plan in accordance with the provisions of subsection 5.1
and, as of the Distribution Date, the Subscriptions under the Plan shall be
substituted for the Baxter Subscriptions.
8.3 Subscription Price. With respect to each Subscription described
in subsection 8.2, the Subscription Price per share of Common Stock subject
thereto shall be equal to the lesser of (i) the amount which bears the same
ratio to the Average Value (as defined below) of a share of Common Stock as the
subscription price per share of Baxter common stock ("Baxter Stock") subject to
the corresponding Baxter Subscription bears to the Average Value of a share of
Baxter Stock or (ii) 85 percent of the Fair Market Value of a share of Common
Stock on the day the Subscription is exercised. The term "Average Value" means,
with respect to Common Stock or Baxter Stock, the average closing price of such
stock as reported, in the case of Common Stock, on the Composite Tape (as
defined in subsection 9.9) for the first ten trading days after the
distribution of Common Stock and, in the case of Baxter Stock, as reported on
the Composite Tape for the last five trading days prior to the distribution.
8.4 Shares Subject to Subscription. The number of shares of Common
Stock subject to each Subscription described in subsection 8.2 shall bear the
same ratio to the number of shares of Baxter Stock subject to the Baxter
Subscription as the Average Value of a share of Baxter Stock bears to the
Average Value of a share of Common Stock.
8.5 Subscription Account. As to the Distribution Date, the
Subscription Account balance of each employee who is deemed to have submitted
Subscriptions pursuant to subsection
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<PAGE> 7
8.2, shall be equal to the balance in his subscription account under the Baxter
Plan immediately prior to the Distribution Date.
8.6 Effect of Other Plan Provisions. Except as otherwise
specifically provided in this Section 8, all terms and conditions of the Plan
shall apply to Subscriptions described in this Section as if such Subscriptions
were made pursuant to subsection 5.1 of the Plan; provided, however, that in no
event shall the terms of the Plan be construed so as to provide any employee
more favorable terms under any Subscription described in subsection 8.2 than
such employee had immediately prior to the Distribution Date under the Baxter
Subscription for which it is substituted.
9. General
9.1 Term of Plan. This Plan will become effective upon its written
approval by the sole shareholder of the Company, Baxter International Inc.;
provided, however, that if such approval is not received prior to the first
anniversary of the Plan's adoption by the Board, Subscriptions shall be of no
effect.
9.2 Duration. The Plan shall remain in effect until outstanding
Subscriptions hereunder have been satisfied either by the issuance of shares of
Common Stock or by the distribution of Subscription Account balances.
9.3 Rights Not Transferable. Neither the right of an employee to
purchase shares of Common Stock hereunder, nor his Subscription Account balance,
may be transferred, pledged or assigned by the employee (except, in the event of
the employee's death, by will or the laws of descent and distribution) and his
rights hereunder may be exercised during his lifetime only by him. If the
employee takes any action to so transfer, pledge or assign such right or
balance, such action shall be deemed to constitute a withdrawal of all of his
Subscriptions.
9.4 Compliance with Applicable Law and Withholding.
(a) Notwithstanding any other provision of the Plan, Caremark shall
have no obligation to issue any shares of Common Stock under the Plan
unless such issuance would comply with all applicable laws and the
applicable regulations or requirements of any securities exchanges or
similar entities.
(b) Prior to the issuance of any shares of Common Stock under the
Plan, the Company may require a written statement that the recipient is
acquiring the shares for investment and not for the purpose or with the
intention of distributing the shares and will not dispose of them in
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<PAGE> 8
violation of the registration requirements of the Securities Act of 1933.
(c) With respect to any person who is subject to section 16(a) of the
Exchange Act, the Committee may, at any time, add such conditions and
limitations to any Subscription under the Plan that it deems necessary or
desirable to comply with the requirements of Rule 16b-3; provided, however,
that any rights or privileges that are extended to such persons shall be
extended uniformly to all eligible employees.
(d) If, at any time, Caremark, in its sole discretion, determines
that the listing, registration or qualification (or any updating of any
such document) of any Subscription or the shares of Common Stock issuable
pursuant thereto is necessary on any securities exchange or under any
federal or state securities or blue sky law, or that the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, any Subscription or the issuance of
shares of Common Stock pursuant to any Subscription, shares shall not be
issued pursuant to such Subscription, in whole or in part, unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to Caremark.
(e) All amounts withheld pursuant to the Plan, shares issued pursuant
to any Subscription and any payments pursuant to the Plan are subject to
withholding of all applicable taxes and Caremark and its subsidiaries shall
have the right to withhold from any payment or distribution of shares or to
collect as a condition of any payment or distribution under the Plan, as
applicable, any taxes required by law to be withheld. To the extent
provided by the Committee, an employee may elect to have any distribution
of shares otherwise required to be made pursuant to the Plan to be withheld
or to surrender to Caremark or its subsidiaries shares of Common Stock
already owned by the employee to fulfill any tax withholding obligation.
9.5 No Continued Employment. The Plan does not constitute a contract
of employment or continued service and participation in the Plan will not give
any employee the right to be retained in the employ of the Company or any right
or claim to any benefit under the Plan unless such right or claim has
specifically accrued under the terms of the Plan.
9.6 Treatment as Shareholder. Any Subscription made by an employee
under the Plan shall not create any rights in such
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<PAGE> 9
employee as a shareholder of Caremark until shares of Common Stock are
registered in the name of the employee.
9.7 Amendment and Termination. The Board may, at any time and in any
manner, amend, suspend or terminate the Plan or any Subscription outstanding
under the Plan; provided, however, that no such amendment or discontinuance
shall:
(a) increase the number of shares reserved under subsection 4.1
without stockholder approval;
(b) be made without stockholder approval to the extent such approval
is required by law, agreement or the rules of any exchange or automated
quotation system upon which the Common Stock is listed or quoted; or
(c) alter or impair the rights of any employee with respect to
Subscriptions outstanding under the Plan without the consent of that
employee.
Upon termination of the Plan, participating employees shall, in the discretion
of the Board, either be permitted to exercise outstanding Subscriptions in a
manner determined by the Board or shall be entitled to a distribution of the
balance in their Subscription Account in satisfaction of all rights under the
Plan.
9.8 Prepayment of Purchase Price. Subject to the limitations of
subsection 5.1 of the Plan, any or all outstanding Subscriptions may be paid in
full immediately if a Change in Control occurs. For purposes of this Plan, a
"Change in Control" shall have occurred if:
(a) any "Person", as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than Caremark, any corporation owned, directly or
indirectly, by the stockholders of Caremark in substantially the same
proportions as their ownership of stock of Caremark, and any trustee or
other fiduciary holding securities under an employee benefit plan of
Caremark or such proportionately owned corporation), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Caremark representing 15% of
Caremark's then outstanding securities having the right to vote for the
election of directors;
(b) during any 24 month period, individuals who at the beginning of
such period constitute the Board, and any new director (other than a
director designated by a Person who has entered into an agreement with
Caremark to effect a transaction described in clause (a), (c) or (d) of
this Section) whose election by the Board or nomination for
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<PAGE> 10
election by Caremark's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at least a
majority thereof;
(c) the stockholders of Caremark approve a merger or consolidation of
Caremark with any other corporation, other than (i) a merger or
consolidation which would result in the voting securities of Caremark
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 60% of the combined voting power of the voting
securities of Caremark or such surviving entity outstanding immediately
after such merger or consolidation, or (ii) a merger or consolidation
effected to implement a recapitalization of Caremark (or similar
transaction) in which no Person acquires more than 15% of Caremark's then
outstanding securities having the right to vote for the election of
directors; or
(d) the stockholders of Caremark approve a plan of complete
liquidation of Caremark or an agreement for the sale or disposition by
Caremark of all or substantially all of Caremark's assets (or any
transaction having a similar effect).
9.9 Definition of Fair Market Value. Except as otherwise determined
by the Committee, the "Fair Market Value" of a share of Common Stock as of any
date shall be equal to the closing sale price of a share of Common Stock as
reported on The National Association of Securities Dealers' New York Stock
Exchange Composite Reporting Tape (or if the Common Stock is not traded on the
New York Stock Exchange, the closing sale price on the exchange on which it is
traded or as reported by an applicable automated quotation system) (the
"Composite Tape") on the applicable date or, if no sales of Common Stock are
reported on such date, the closing sale price of a share of Common Stock on the
date the Common Stock was last reported on the Composite Tape (or such other
exchange or automated quotation system, if applicable).
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<PAGE> 1
EXHIBIT (5)
[HASKELL SLAUGHTER & YOUNG L.L.C.
LETTERHEAD]
October 15, 1996
MedPartners, Inc.
3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244-2331
Re: Registration Statement on Form S-8 - Caremark International Inc. 1992
Stock Option Plan for Non-Employee
Directors and Caremark
International Inc. Qualified
Employee Stock Purchase Plan
Our File No. 48367-012
Gentlemen:
We have served as counsel for MedPartners, Inc., formerly
MedPartners/Mullikin, Inc., a Delaware corporation, (the "Company"), in
connection with the registration under the Securities Act of 1933, as amended,
of an aggregate of 825,864 shares (the "Shares") of the Company's authorized
Common Stock, par value $.001 per share, to be issued to participants in the
Caremark International Inc. 1992 Stock Option Plan for Non-Employee Directors
and Caremark International Inc. Qualified Employee Stock Purchase Plan (the
"Plans") pursuant to the Company's Registration Statement on Form S-8 (the
"Registration Statement"). This opinion is furnished to you pursuant to the
requirements of Form S-8.
In connection with this opinion, we have examined and are familiar with
originals or copies (certified or otherwise identified to our satisfaction) of
such documents, corporate records and other instruments relating to the
incorporation of the Company and to the authorization and issuance of the
Shares and the authorization and adoption of the Plans as we have deemed
necessary and appropriate.
Based upon the foregoing, and having regard for such legal
considerations as we have
<PAGE> 2
MedPartners, Inc.
October 15, 1996
Page 2
deemed relevant, it is our opinion that:
1. The Shares have been duly authorized.
2. Upon issuance, sale and delivery of the Shares as contemplated
in the Registration Statement and the Plans, the Shares will be
legally issued, fully paid and nonassessable.
We do hereby consent to the reference to our firm under the heading
"Legal Matters" in the Registration Statement and to the filing of this Opinion
as an Exhibit thereto.
Very truly yours,
HASKELL SLAUGHTER & YOUNG, L.L.C.
By /s/ Robert E. Lee Garner
------------------------------
Robert E. Lee Garner
RELG/jhs/nld
<PAGE> 1
EXHIBIT (23)-1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Caremark International Inc. 1992 Stock
Option Plan for Non-Employee Directors and Caremark International Inc.
Qualified Employee Stock Purchase Plan of our report dated February 22, 1996,
with respect to the consolidated financial statements of MedPartners/Mullikin,
Inc. included in its Annual Report (Form 10-K) for the year ended December 31,
1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Birmingham, Alabama
October 15, 1996
<PAGE> 1
EXHIBIT (23)-2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 pertaining to the Caremark International
Inc. 1992 Stock Option Plan for Non-Employee Directors and Caremark
International Inc. Qualified Employee Stock Purchase Plan of our report dated
January 24, 1996, except as to the third paragraph of Note 14, which is dated
as of March 19, 1996, which appears on page F-29 of Amendment No. 1 to Form
S-4, Registration Statement (Registration No. 333-09767).
PRICE WATERHOUSE LLP
Chicago, Illinois
October 15, 1996
