<PAGE> 1
As filed with the Securities and Exchange Commission on September 12, 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)
MEDPARTNERS INCENTIVE COMPENSATION PLAN
(Full Title of the Plan)
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 JOHNSTON, JR., ESQ.
F. HAMPTON MCFADDEN, JR., ESQ. SR. VICE PRESIDENT AND GENERAL COUNSEL
HASKELL SLAUGHTER & YOUNG, L.L.C MEDPARTNERS, INC
1200 AMSOUTH/HARBERT PLAZA 3000 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 5,477,945 $19.875(3) $108,874,156.88(3) $37,542.82
$.001 per share (including shares(2)
Common Stock Purchase Rights)(1)
Common Stock, par value 8,294,019 $12.544(4) $104,040,174.34 $35,875.93
$.001 per share (including shares(4)
Common Stock Purchase Rights)(1)
Total 13,771,964 -- $212,914,331.22 $73,418,75
shares
========================================================================================================================
</TABLE>
(1) The Common Stock Purchase Rights (the"Rights") are attached to and trade
with the common stock of MedPartners, Inc. The value, if any,
attributable to the Rights is reflected in the market price of the Common
Stock of MedPartners, Inc.
(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 Incentive Compensation
Plan which have been assumed by MedPartners under the terms of the Plan and
Agreement of Merger by and among MedPartners, its wholly-owned subsidiary,
PPM Merger Corporation and Caremark International Inc.
(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 last
sale price of the Common Stock of MedPartners as reported on the New York
Stock Exchange Composite Transaction Tape on September 5, 1996.
(4) Determined pursuant to Rule 457(h) under the Securities Act of 1933 soley
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 Incentive Compensation Plan.
<PAGE> 2
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 Proxy Statement - Prospectus filed as part of
the Company's Registration Statement on Form S-4 (Reg. No.
333-09767), as filed with the Commission on August 16, 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.
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<PAGE> 3
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 agreed to indemnify its directors and executive
officers against liability incurred by them by reason of their services as 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.
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<PAGE> 4
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 MedPartners Incentive Compensation PLan
(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
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> 5
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 periodic 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.
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<PAGE> 6
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 September 12,
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>
Chairman of the Board, President September 12, 1996
Larry R. House and Chief Executive Officer
- ------------------------------------------- and Director (Principal Executive
Larry R. House Officer)
Executive Vice President and September 12, 1996
Harold O. Knight, Jr. Chief Financial Officer
- ------------------------------------------- (Principal Financial and
Harold O. Knight, Jr. Accounting Officer)
Richard M. Scrushy Director September 12, 1996
- -------------------------------------------
Richard M. Scrushy
</TABLE>
II-5
<PAGE> 7
<TABLE>
<S> <C> <C>
Larry D. Striplin, Jr. Director September 12, 1996
- -------------------------------------------
Larry D. Striplin, Jr.
Charles W. Newhall III Director September 12, 1996
- -------------------------------------------
Charles W. Newhall III
Ted H. McCourtney, Jr. Director September 12, 1996
- -------------------------------------------
Ted H. McCourtney, Jr.
Walter T. Mullikin, M.D. Director September 12, 1996
- -------------------------------------------
Walter T. Mullikin, M.D.
John S. McDonald, J.D. Director September 12, 1996
- -------------------------------------------
John S. McDonald, J.D.
Richard J. Kramer Director September 12, 1996
- -------------------------------------------
Richard J. Kramer
Rosalio J. Lopez, M.D. Director September 12, 1996
- -------------------------------------------
Rosalio J. Lopez, M.D.
C.A. Lance Piccolo Director September 12, 1996
- -------------------------------------------
C.A. Lance Piccolo
Thomas W. Hodson Director September 12, 1996
- -------------------------------------------
Thomas W. Hodson
Rodger L. Headrick Director September 12, 1996
- -------------------------------------------
Rodger L. Headrick
Harry M. Jansen Kraemer, Jr. Director September 12, 1996
- -------------------------------------------
Harry M. Jansen Kraemer, Jr.
</TABLE>
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<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page Number
- ---------- ---------------------- -----------
<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 MedPartners Incentive Compensation Plan.
(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
MEDPARTNERS, INC.
MEDPARTNERS INCENTIVE COMPENSATION PLAN
The MedPartners Incentive Compensation Plan (the "Incentive Compensation Plan")
is the result of the assumption and adoption by MedPartners, Inc., formerly
MedPartners/Mullikin, Inc., a Delaware corporation ("MedPartners"), of the
Caremark International Inc. 1992 Incentive Compensation Plan (the "Caremark
Plan"), pursuant to the provisions of that certain Plan and Agreement of
Merger, dated as of May 13, 1996, by and between MedPartners/Mullikin, Inc.,
PPM Merger Corporation and Caremark International Inc. (the "Merger").
1. PURPOSE
The purpose of this Incentive Compensation Plan is to increase stockholder
value and to advance the interests of MedPartners and its subsidiaries
(collectively, the "Company") by awarding equity and performance based
incentives designed to attract, retain and motivate employees. As used in this
Incentive Compensation Plan, the term "subsidiary" means any business, whether
or not incorporated, in which MedPartners has an ownership interest.
2. ADMINISTRATION
2.1 ADMINISTRATION BY BOARD OF DIRECTORS.
The Incentive Compensation Plan shall be administered by the Board of Directors
of MedPartners (the "Board of Directors"), or a committee thereof.
2.2 AUTHORITY.
Subject to the provisions of this Incentive Compensation Plan, the Board of
Directors shall have the authority to:
(a) manage and control the operation of this Incentive
Compensation Plan;
(b) interpret and construe the provisions of this Incentive
Compensation Plan, and prescribe, amend and rescind rules and
regulations relating to this Incentive Compensation Plan;
(c) make awards under this Incentive Compensation Plan, in such
forms and amounts and subject to such restrictions,
limitations and conditions as it deems appropriate, including,
without limitation, awards which are made in combination with
or in tandem with other awards (whether or not
<PAGE> 2
contemporaneously granted) or compensation in lieu of current
or deferred compensation;
(d) modify the terms of, cancel and reissue, or repurchase
outstanding awards;
(e) prescribe the form of agreement, certificate, or other
instrument evidencing any award under this Incentive
Compensation Plan;
(f) correct any defect or omission and reconcile any inconsistency
in this Incentive Compensation Plan or in any award hereunder;
and
(g) make all other determinations and take all other actions as it
deems necessary or desirable for the implementation and
administration of this Incentive Compensation Plan; provided,
however, that in no event shall the Board of Directors cancel
or modify any outstanding stock option for the purpose of
reissuing an additional option to the option holder at a lower
exercise price.
The determination of the Board of Directors on matters within its authority
shall be conclusive and binding on the Company and all other persons.
3. PARTICIPATION
Subject to the terms and conditions of this Incentive Compensation Plan, the
Board of Directors shall determine and designate from time to time the
employees of the Company (including employees who are directors) who shall
receive awards under this Incentive Compensation Plan ("Participants").
4. SHARES SUBJECT TO THE INCENTIVE COMPENSATION PLAN
4.1 NUMBER OF SHARES RESERVED.
Shares of common stock, $.001 par value per share, of MedPartners ("Common
Stock") shall be available for awards under this Incentive Compensation Plan.
To the extent provided by resolution of the Board of Directors, such shares may
be uncertificated. Subject to adjustment in accordance with Sections 4.2 and
4.3, the aggregate number of shares of Common Stock available for awards under
this Incentive Compensation Plan shall be equal to the sum of 13,253,789 shares.
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<PAGE> 3
4.2 REUSAGE OF SHARES.
(a) In the event of the exercise or termination (by reason of forfeiture,
expiration, cancellation, surrender or otherwise) of any award under
this Incentive Compensation Plan, that number of shares of Common
Stock that was subject to the award but not delivered to the
Participant shall again be available for awards under this Incentive
Compensation Plan.
(b) In the event that shares of Common Stock are delivered under this
Incentive Compensation Plan as Restricted Stock, as described in
Section 8 hereof, or pursuant to a stock award and are thereafter
forfeited or reacquired by the Company pursuant to rights reserved
upon the award thereof, such forfeited or reacquired shares shall
again be available for awards under this Incentive Compensation Plan.
(c) Notwithstanding the provisions of paragraphs (a) or (b), the following
shares shall not be available for reissuance under this Incentive
Compensation Plan: (i) shares with respect to which the Participant
has received the benefits of ownership (other than voting rights),
either in the form of dividends or otherwise; (ii) shares which are
withheld from any award or payment under this Incentive Compensation
Plan to satisfy tax withholding obligations (as described in Section
11.5(e)); (iii) shares which are surrendered to fulfill tax
obligations (as described in Section 11.5(e)); and (iv) shares which
are surrendered in payment of the Option Price (as defined in Section
5.1) upon the exercise of a Stock Option, as described in Section 5
hereof.
4.3 ADJUSTMENTS TO SHARES RESERVED.
In the event of any merger, consolidation, reorganization, recapitalization,
spin-off, 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 awards under this
Incentive Compensation Plan and the terms of any outstanding awards (including
the price at which shares of stock may be issued pursuant to an outstanding
award) shall be equitably adjusted by the Board of Directors, in its sole
discretion, to preserve the value of benefits awarded or to be awarded to
Participants under this Incentive Compensation Plan.
5. STOCK OPTIONS
5.1 AWARDS.
Subject to the terms and conditions of this Incentive Compensation Plan, the
Board of Directors shall designate the employees to whom options to purchase
shares of Common Stock ("Stock Options") are to be awarded under this Incentive
Compensation Plan and shall determine the number, type and terms of the Stock
Options to be awarded to each of them; provided, however,
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<PAGE> 4
that each Stock Option shall expire on the earlier of the date provided by the
option terms or the date which is ten years and one day after the date of
grant. The option price for any Stock Option awarded shall not be less than
the greater of par value or the Fair Market Value (as described in section
11.11) of a share of Common Stock on the date the Stock Option is awarded
("Option Price"). Each Stock Option awarded under this Incentive Compensation
Plan shall be a "nonqualified stock option" for tax purposes unless the Stock
Option satisfies all of the requirements of section 422 of the Internal Revenue
Code of 1986, as amended, and the Board of Directors designates such Stock
Option as an "Incentive Stock Option."
5.2 AWARD OF ADDITIONAL STOCK OPTIONS.
To the extent provided by the Board of Directors at the time a Stock Option is
awarded, a Participant who exercises a Stock Option and who pays the Option
Price by the surrender of shares of Common Stock shall, upon such exercise,
automatically receive an additional Stock Option. The number of shares of
Common Stock subject to such additional Stock Option shall be equal to the
number of shares of Common Stock so delivered. The option price shall be equal
to the Fair Market Value (as described in Section 11.11) of a share of Common
Stock on the date the Participant is automatically entitled to receive such
additional Stock Option, and all other terms of the additional Stock Option
shall be identical to the original Stock Option as if it had been granted on
the date of grant of the original Stock Option.
5.3 MANNER OF EXERCISE.
A Stock Option may be exercised, in whole or in part, by giving written notice
to the Secretary of MedPartners prior to the date on which the Stock Option
expires; provided, however, that a Stock Option may only be exercised with
respect to whole shares of Common Stock. Such notice shall specify the number
of shares of Common Stock to be purchased and shall be accompanied by payment
of the Option Price for such shares in such form and manner as the Board of
Directors may from time to time approve.
6. STOCK APPRECIATION RIGHTS
6.1 AWARDS.
Subject to the terms and conditions of this Incentive Compensation Plan, the
Board of Directors shall designate the Participants to whom stock appreciation
rights ("SARs") are to be awarded under this Incentive Compensation Plan and
shall determine the number and terms of the SARs to be awarded to each of them;
provided, however, that each SAR shall expire on the earlier of the date
provided by the terms of the SARs or the date which is ten years and one day
after the date of grant.
-4-
<PAGE> 5
6.2 PAYMENT.
Subject to the terms and conditions of this Incentive Compensation Plan, upon
exercise of SARs, a Participant shall be entitled to receive that number of
shares of Common Stock having a Fair Market Value (as defined in Section 11.11)
(as of the date of exercise) equal to the product of:
(a) the number of shares of Common Stock as to which the SARs is
exercised; and
(b) the excess of the Fair Market Value (as defined in Section
11.11) (as of the date of exercise) of a share of Common Stock
over the exercise price of the SARs; provided, however, that,
in lieu of fractional shares of Common Stock, a Participant
shall be entitled to receive an appropriate cash payment; and
provided, further, that the Board of Directors, in its sole
discretion, may elect to settle the SARs for any portion
thereof) in cash equal to the Fair Market Value (as defined in
Section 11.11) on the exercise date of any or all of the
shares of Common Stock that would otherwise be issuable upon
exercise.
6.3 MANNER OF EXERCISE.
SARs may be exercised, in whole or in part, by giving written notice to the
Secretary of MedPartners prior to the date on which the SAR expires. Such
notice shall specify the number of shares with respect to which the SARs is
exercised. As soon as practicable after receipt of such notice, the Company
shall deliver to the Participant certificates for the shares of Common Stock or
cash or both to which the Participant is entitled pursuant to Section 6.2.
7. STOCK AWARDS
Subject to the terms and conditions of this Incentive Compensation Plan, the
Board of Directors shall designate the Participants who shall be awarded shares
of Common Stock under this Incentive Compensation Plan and shall determine the
terms and conditions of each such award; provided, however, that newly issued
shares shall be awarded to a Participant only to the extent that the Board of
Directors determines that past services of the Participant constitute adequate
consideration for at least the par value thereof.
-5-
<PAGE> 6
8. RESTRICTED STOCK
8.1 AWARDS.
Subject to the terms and conditions of this Incentive Compensation Plan, the
Board of Directors shall designate the Participants to whom shares of
"Restricted Stock" shall be awarded under this Incentive Compensation Plan and
determine the number of shares and the terms and conditions of each such award;
provided, however, that newly issued shares shall be issued as Restricted Stock
only to the extent that the Board of Directors determines that past services of
the Participant constitute adequate consideration for at least the par value
thereof. Each Restricted Stock award shall entitle the Participant to receive
shares of Common Stock upon the terms and conditions specified by the Board of
Directors and subject to the following provisions of this Section 8.
8.2 RESTRICTIONS.
All shares of Restricted Stock transferred or sold hereunder shall be subject
to such restrictions as the Board of Directors may determine, including,
without limitation, any or all of the following:
(a) a required period of employment with the Company, as
determined by the Board of Directors, prior to the vesting of
the shares of Restricted Stock;
(b) a prohibition against the sale, assignment, transfer, pledge,
hypothecation or other encumbrance of the shares of Restricted
Stock for a specified period as determined by the Board of
Directors;
(c) a requirement that the holder of shares of Restricted Stock
forfeit (or in the case of shares sold to a Participant,
resell back to the Company at his cost) all or a part of such
shares in the event of termination of his employment during
any period in which such shares are subject to restrictions;
and
(d) a prohibition against employment of the holder of such
Restricted Stock by any competitor of the Company or against
such holder's dissemination of any secret or confidential
information belonging to the Company.
All restrictions on shares of Restricted Stock awarded pursuant to this
Incentive Compensation Plan shall expire at such time or times as the Board of
Directors shall specify.
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<PAGE> 7
8.3 REGISTRATION OF SHARES.
Shares of Restricted Stock awarded pursuant to this Incentive Compensation Plan
shall be registered in the name of the Participant and, if such shares are
certificated, at the discretion of the Board of Directors, may be deposited in
a bank designated by the Board of Directors or with MedPartners. The Board of
Directors may require a stock power endorsed in blank with respect to shares of
Restricted Stock whether or not certificated.
8.4 STOCKHOLDER RIGHTS.
Subject to the terms and conditions of this Incentive Compensation Plan, during
any period in which shares of Restricted Stock are subject to forfeiture or
restrictions on transfer, each Participant who has been awarded shares of
Restricted Stock shall have such rights of a stockholder with respect to such
shares as the Board of Directors may designate at the time of the award,
including the right to vote such shares and the right to receive all dividends
paid on such shares. Unless otherwise provided by the Board of Directors,
stock dividends or dividends in kind and, except as otherwise provided by
Section 11.10, any other securities distributed with respect to Restricted
Stock shall be restricted to the same extent and subject to the same terms and
conditions as the Restricted Stock to which they are attributable.
8.5 LAPSE OF RESTRICTIONS.
Subject to the terms and conditions of this Incentive Compensation Plan, at the
end of any time period during which the shares of Restricted Stock are subject
to forfeiture or restrictions on transfer, such shares will be delivered free
of all restrictions to the Participant (or to the Participant's legal
representative, beneficiary or heir).
8.6 SUBSTITUTION OF CASH.
The Board of Directors may, in its sole discretion, substitute cash equal to
the Fair Market Value (as described in Section 11.11) (determined as of the
date of the distribution) of shares of Common Stock otherwise required to be
distributed to a Participant in accordance with this Section 8.
9. PERFORMANCE SHARES
9.1 AWARDS.
Subject to the terms and conditions of this Incentive Compensation Plan, the
Board of Directors shall designate the Participants to whom "Performance
Shares" are to be awarded in accordance with this Section 9 and the number of
shares subject to the award and the terms and conditions of such awards. Each
Performance Share awarded pursuant to this Section 9 shall entitle the
Participant to a payment in the form of one share of Common Stock upon the
satisfaction of such
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<PAGE> 8
performance objectives and other terms and conditions as may be specified by
the Board of Directors.
9.2 NO ADJUSTMENTS.
Except as otherwise provided by the Board of Directors, no adjustment shall be
made in Performance Shares awarded on account of cash dividends which may be
paid or other rights which may be provided to the holders of Common Stock prior
to the end of any period for which performance objectives were established.
9.3 SUBSTITUTION OF CASH.
The Board of Directors may, at its sole discretion, substitute cash equal to
the Fair Market Value (as described in Section 11.11) (determined as of the
date of the distribution) of shares of Common Stock otherwise required to be
distributed to a Participant in accordance with this Section 9.
10. OTHER AWARDS
In addition to the awards specifically contemplated by Sections 5 through 9
above, the Board of Directors may make such other equity, incentive or
performance awards payable in cash or in kind under this Incentive Compensation
Plan as it determines to be in the best interest of the Company.
11. GENERAL
11.1 EFFECTIVE DATE.
This Incentive Compensation Plan became effective upon consummation of the
Merger.
11.2 DURATION.
This Incentive Compensation Plan shall remain in force and effect until all
awards made under this Incentive Compensation Plan have either been satisfied
by the issuance of shares of Common Stock or the payment of cash or been
terminated in accordance with the terms of this Incentive Compensation Plan or
the award and until all restrictions imposed on shares of Common Stock issued
under this Incentive Compensation Plan have lapsed. No award may be made under
this Incentive Compensation Plan after the tenth anniversary of the date this
Incentive Compensation Plan is adopted by the Board of Directors.
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<PAGE> 9
11.3 NON-TRANSFERABILITY OF INCENTIVES.
No Stock Option, SAR, share of Restricted Stock, Performance Share or other
award under this Incentive Compensation Plan may be transferred, pledged or
assigned by the holder thereof (except, in the event of the holder's death, by
will or the laws of descent and distribution), and the Company shall not be
required to recognize any attempted assignment of such rights by any
Participant. During a Participant's lifetime, awards may be exercised only by
him or by his guardian or legal representative.
11.4 EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH.
In the event that a Participant ceases to be an employee of the Company for any
reason, including death, any awards then outstanding may be exercised or shall
expire in accordance with the terms of the award.
11.5 COMPLIANCE WITH APPLICABLE LAW AND WITHHOLDING.
(a) Notwithstanding any other provision of this Incentive Compensation
Plan, MedPartners shall have no obligation to issue any shares of
Common Stock under this Incentive Compensation Plan if such issuance
would violate any applicable law or any applicable regulation or
requirement of any securities exchange or similar entity.
(b) Prior to the issuance of any shares of Common Stock under this
Incentive Compensation Plan, MedPartners or 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 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 Board of Directors may, at any time, add such
conditions and limitations to any award under this Incentive
Compensation Plan that it deems necessary or desirable to comply with
the requirements of Rule 16b-3.
(d) If, at any time, MedPartners, in its sole discretion, determines that
the listing, registration or qualification (or any updating of any
such document) of any type of award, 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 award, the
issuance of shares of Common Stock pursuant to any award, or the
removal of any restrictions imposed on shares subject to an award,
such award shall not be made and the shares of Common Stock shall not
be issued or such restrictions shall not be removed, 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 MedPartners.
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<PAGE> 10
(e) All awards and payments under this Incentive Compensation Plan are
subject to withholding of all applicable taxes and the Company shall
have the right to withhold from any award under this Incentive
Compensation Plan or to collect as a condition of any payment under
this Incentive Compensation Plan, as applicable, any taxes required by
law to be withheld. To the extent provided by the Board of Directors,
a Participant may elect to have any distribution otherwise required to
be made under this Incentive Compensation Plan to be withheld or to
surrender to the Company shares of Common Stock already owned by the
Participant to fulfill any tax withholding obligation.
11.6 NO CONTINUED EMPLOYMENT.
The Incentive Compensation Plan does not constitute a contract of employment or
continued service, and participation in this Incentive Compensation Plan will
not give any employee or Participant the right to be retained in the employ of
the Company or the right to continue as a director of the Company or any right
or claim to any benefit under this Incentive Compensation Plan unless such
right or claim has specifically accrued under the terms of this Incentive
Compensation Plan or the terms of any award under this Incentive Compensation
Plan.
11.7 TREATMENT AS A STOCKHOLDER.
Any award to a Participant under this Incentive Compensation Plan shall not
create any rights in such Participant as a stockholder of MedPartners until
shares of Common Stock are registered in the name of the Participant.
11.8 DEFERRAL PERMITTED.
Payment of cash to a Participant or distribution of any shares of Common Stock
to which a Participant is entitled under any award shall be made as provided in
the terms of the award. Payment may be deferred at the option of the
Participant to the extent provided in the award.
11.9 AMENDMENT OF THE INCENTIVE COMPENSATION PLAN.
The Board of Directors may, at any time and in any manner, amend, suspend, or
terminate this Incentive Compensation Plan or any award outstanding under this
Incentive Compensation Plan; provided, however, that no such amendment or
discontinuance shall:
(a) 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;
(b) alter or impair the rights of Participants with respect to
awards previously made under this Incentive Compensation Plan
without the consent of the holder thereof; or
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<PAGE> 11
(c) make any change that would disqualify this Incentive
Compensation Plan, intended to be so qualified, from the
exemption provided by Rule 16b-3.
11.10 IMMEDIATE ACCELERATION OF INCENTIVES.
Notwithstanding any provision in this Incentive Compensation Plan to the
contrary or the normal terms of vesting under any award:
(a) the restrictions on all shares of Restricted Stock awarded
shall lapse immediately;
(b) all outstanding Stock Options and SARs will become exercisable
immediately; and
(c) all performance objectives to which Performance Shares are
subject shall be deemed to be met and payment made immediately
if a Change in Control (as defined below) occurs. For
purposes of this Incentive Compensation Plan, a "Change in
Control" shall have occurred if:
(1) any "Person," as such term is used in Section 13(d)
and 14(d) of the Exchange Act (other than
MedPartners, any corporation owned, directly or
indirectly, by the stockholders of MedPartners in
substantially the same proportions as their ownership
of stock of MedPartners, and any trustee or other
fiduciary holding securities under an employee
benefit plan of MedPartners 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 MedPartners representing 15% or more of
the combined voting power of MedPartners's then
outstanding securities having the right to vote for
the election of directors;
(2) during any 24-month period, individuals who at the
beginning of such period constitute the Board of
Directors, and any new director (other than a
director designated by a Person who has entered into
an agreement with MedPartners to effect a transaction
described in paragraph (1), (3) or (4) of this
Section 11.10) whose election by the Board of
Directors or nomination for election by MedPartners'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
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<PAGE> 12
so approved, cease for any reason to constitute at
least a majority thereof;
(3) the stockholders of MedPartners approve a merger or
consolidation of MedPartners with any other
corporation, other than (A) a merger or consolidation
which would result in the voting securities of
MedPartners 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
MedPartners or such surviving entity outstanding
immediately after such merger or consolidation, or
(B) a merger or consolidation effected to implement a
recapitalization of MedPartners (or similar
transaction) in which no Person acquires more than
15% of MedPartners's then outstanding securities
having the right to vote for the election of
directors; or
(4) the stockholders of MedPartners approve a plan of
complete liquidation of MedPartners or an agreement
for the sale or disposition by MedPartners of all or
substantially all of MedPartners's assets (or any
transaction having a similar effect).
11.11 DEFINITION OF FAIR MARKET VALUE.
Except as otherwise determined by the Board of Directors, 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]
September 11, 1996
MedPartners, Inc.
3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244-2331
Re: Registration Statement on Form S-8 - MedPartners Incentive Compensation
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 13,771,964 shares (the "Shares") of the Company's authorized
Common Stock, par value $.001 per share, to be issued to participants in the
Company's Incentive Compensation Plan (the "Plan") 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 Plan 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.
September 11, 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 Plan, 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 MedPartners Incentive Compensation 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
September 12, 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 MedPartners Incentive
Compensation 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
September 6, 1996
