<PAGE> 1
As filed with the Securities and Exchange Commission on August 30, 1996
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------
MEDPARTNERS/MULLIKIN, 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/MULLIKIN, INC.
1995 STOCK OPTION PLAN
(Full Title of the Plan)
LARRY R. HOUSE
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
MEDPARTNERS/MULLIKIN, 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:
F. HAMPTON MCFADDEN, JR.
HASKELL SLAUGHTER & YOUNG, L.L.C.
1200 AMSOUTH/HARBERT PLAZA
1901 SIXTH AVENUE NORTH
BIRMINGHAM, ALABAMA 35203
TEL: (205) 251-1000
FAX: (205) 324-1133
----------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share(1) Price Registration Fee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001 2,525,000 shares $20.625 $52,078,125 $17,957.98
per share (including the Common
Stock Purchase Rights)
=========================================================================================================================
</TABLE>
(1) Computed in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. The Computation is based upon the last sale
price of the Common Stock on The New York Stock Exchange, Inc. on August 27,
1996.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
MedPartners/Mullikin, Inc., a Delaware corporation (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 Annual Report on Form 10-K for the year ended
December 31, 1995.
(b) The Company's Quarterly Report on Form 10-Q filed for the
quarter ended March 31, 1996.
(c) The Company's Quarterly Report on Form 10-Q filed for the
quarter ended June 30, 1996.
(d) 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.
(e) All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since November 29, 1995.
(f) 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> 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 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> 4
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
-------------- ----------------------
<S> <C>
(4)-1 MedPartners/Mullikin, Inc. Second Amended and Restated Certificate of Incorporation filed as
Exhibit (3)-1 to the Company's Registration Statement on Form S-4 (Registration No.
333-09767) is hereby incorporated herein by reference.
(4)-2 MedPartners/Mullikin, Inc. Amended and Restated By-laws, filed as Exhibit (3)-2 to the
Company's Registration Statement on Form S-4 (Registration No. 333-00774) is hereby
incorporated herein by reference.
(4)-3 MedPartners/Mullikin, Inc. 1995 Stock Option Plan, as amended.
(4)-5 Form of MedPartners/Mullikin Incentive Stock Option Agreement filed as Exhibit (4)-5 to the
Company's Registration Statement on Form S-8 (Registration No. 33-00234) is hereby
incorporated herein by reference.
(4)-6 Form of MedPartners/Mullikin Non-Qualified Stock Option Agreement filed as Exhibit (4)-6 to
the Company's Registration Statement on Form S-8 (Registration No. 33-00234) is hereby
incorporated herein by reference.
(5) Opinion of Haskell Slaughter & Young, L.L.C. as to legality of the shares of MedPartners/
Mullikin, Inc. Common Stock being registered.
(23)-1 Consent of Ernst & Young LLP, Independent Auditors
(23)-2 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 funda-
II-3
<PAGE> 5
mental 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 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.
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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 August 29,
1996.
MEDPARTNERS/MULLIKIN, 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 August 29, 1996
Larry R. House and Chief Executive Officer
- -------------------------------------------
Larry R. House (Principal Executive Officer)
Executive Vice President and August 29, 1996
Harold O. Knight, Jr. Chief Financial Officer
- -------------------------------------------
Harold O. Knight, Jr. (Principal Financing and
Accounting Officer)
Richard M. Scrushy Director August 29, 1996
- -------------------------------------------
Richard M. Scrushy
Larry D. Striplin, Jr. Director August 29, 1996
- -------------------------------------------
Larry D. Striplin, Jr.
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
Charles W. Newhall III Director August 29, 1996
- -------------------------------------------
Charles W. Newhall III
Scott F. Meadow Director August 29, 1996
- -------------------------------------------
Scott F. Meadow
Ted H. McCourtney, Jr. Director August 29, 1996
- -------------------------------------------
Ted H. McCourtney, Jr.
Walter T. Mullikin, M.D. Director August 29, 1996
- -------------------------------------------
Walter T. Mullikin, M.D.
John S. McDonald, J.D. Director August 29, 1996
- -------------------------------------------
John S. McDonald, J.D.
Richard J. Kramer Director August 29, 1996
- -------------------------------------------
Richard J. Kramer
Rosalio J. Lopez, M.D. Director August 29, 1996
- -------------------------------------------
Rosalio J. Lopez, M.D.
</TABLE>
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page Number
- ---------- ---------------------- -----------
<S> <C> <C>
(4)-1 MedPartners/Mullikin, Inc. Second Amended and Restated
Certificate of Incorporation filed as Exhibit (3)-1 to the
Company's Registration Statement on Form S-4 (Registration No.
333-09767) is hereby incorporated herein by reference.
(4)-2 MedPartners/Mullikin, Inc. Amended and Restated By-laws, filed
as Exhibit (3)-2 to the Company's Registration Statement on Form
S-4 (Registration No. 333-00774) is hereby incorporated herein
by reference.
(4)-3 MedPartners/Mullikin, Inc. 1995 Stock Option Plan, as amended.
(4)-5 Form of MedPartners/Mullikin Incentive Stock Option Agreement
filed as Exhibit (4)-5 to the Company's Registration Statement
on Form S-8 (Registration No. 33-00234) is hereby incorporated
herein by reference.
(4)-6 Form of MedPartners/Mullikin Non-Qualified Stock Option
Agreement filed as Exhibit (4)-6 to the Company's Registration
Statement on Form S-8 (Registration No. 33-00234) is hereby
incorporated herein by reference.
(5) Opinion of Haskell Slaughter & Young, L.L.C. as to legality of
the shares of MedPartners/Mullikin, Inc. Common Stock being
registered.
(23)-1 Consent of Ernst & Young LLP, Independent Auditors
(23)-2 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 4-3
1995 STOCK OPTION PLAN
OF
MEDPARTNERS/MULLIKIN, INC.
1. PURPOSE OF THE PLAN
The purposes of this 1995 Stock Option Plan (the "Plan") of
MedPartners/Mullikin, Inc. (the "Company") are to:
1.1 furnish incentives to individuals or entities chosen to receive
options because they are considered capable of responding by improving
operations and increasing profits;
1.2 encourage selected employees to accept or continue employment
with the Company or its Affiliates; and
1.3 increase the interest of selected employees, officers,
directors and consultants in the Company's welfare through their participation
in the growth in value of the common stock, $.001 par value, of the Company
("Common Stock").
To accomplish the foregoing objectives, this Plan provides a means
whereby individuals and entities may receive options to purchase Common Stock.
Options granted under this Plan ("Options") will be either nonqualified options
("NQOs") subject to federal income taxation upon exercise or Options intended to
be incentive stock options ("ISOs") not subject to immediate federal income
taxation upon exercise.
2. ELIGIBLE PERSONS
2.1 General. Every person who at the date on which an Option
granted to the person becomes effective (the "Grant Date") is a full-time
employee, officer, director or consultant of the Company or of any Affiliate or
any individual or entity subject to an acquisition or management agreement with
the Company is eligible to receive Options under this Plan.
2.2 Definition of Affiliate. The term "Affiliate," as used in
this Plan, means a "parent corporation" or "subsidiary corporation," as defined
in Section 424 of the Internal Revenue Code of 1986 (the "Code"). The term
"employee" shall have the meaning ascribed for purposes of Section 3401(c) of
the Code and the Treasury Regulations promulgated thereunder and shall include
an officer or a director who is also an employee.
3. STOCK SUBJECT TO THIS PLAN
3.1 The total number of shares of stock reserved for issuance
upon the exercise of Options is 4,250,000 shares of Common Stock. The shares
covered by the portion of any grant that expires unexercised under this Plan
shall become available again for grants under this Plan. The number
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<PAGE> 2
of shares reserved for issuance under this Plan is subject to adjustment in
accordance with the provisions for adjustment in this Plan.
3.2 The number of shares of Common Stock for which Options may
be granted under the Plan shall automatically increase on the first trading day
of each calander year during the term of the Plan, beginning with the 1996
calander year, by an amount equal to 1% of the shares of Common Stock
outstanding on December 31 of the immediately preceding year. However, such
additional shares shall be available only for the grant of NQOs under the Plan
and not for the grant of ISOs.
4. ADMINISTRATION
This Plan shall be administered by a committee (the "Committee") of not
less than three (3) members appointed by the Board of Directors, at least two
(2) of which must be nonemployee disinterested Directors ("Disinterested
Directors") as defined in Rule 16b-3 promulgated under the Securities Exchange
Act of 1934 (the "Exchange Act"). The Committee may delegate nondiscretionary
administrative duties to other employees of the Company as it deems proper.
Subject to the approval of the Board of Directors and the provisions of this
Plan, the Committee shall have the authority to select the persons to receive
Options under this Plan, to fix the number of shares that each optionee may
purchase, to set the terms and conditions of each Option, and to determine all
other matters relating to this Plan; provided, however, that any Options granted
to management of the Company or other insiders shall be determined solely by the
Disinterested Directors and all Options granted to members of the Board of
Directors shall comply with Rule 16b-3 of the Exchange Act. Any act approved in
writing by a majority of the members of the Committee shall be a valid act of
the Committee. All questions of interpretation, implementation and application
of this Plan shall be determined by the Committee. Such determinations shall be
final and binding on all persons. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under the Plan.
5. GRANTING OF RIGHTS
5.1 Ten Year Limitation. No Options shall be granted under this Plan
after ten years from the date the Board adopts this Plan.
5.2 Written Agreement; Effect. Each Option shall be evidenced by a
written agreement (the "Option Agreement"), in form satisfactory to the
Committee, executed by the Company and by the person to whom such Option is
granted. The Option Agreement shall specify whether each Option it evidences is
a NQO or an ISO. Failure of the grantee to execute an Option Agreement shall
not void or invalidate the grant of an Option; the Option may not be exercised,
however, until the Option Agreement is executed. Each optionee who is or is
expected to become an employee shall contemporaneously with the grant of an
option execute an Employee Noncompetition, Nondisclosure and Developments
Agreement in a form satisfactory to the Committee.
5.3 Annual $100,000 Limitation on ISOs. To the extent required by
Section 422(d) of the Code, the aggregate fair market value of shares of the
Common Stock with respect to which incentive stock options are exercisable for
the first time by any individual during any calendar year shall not exceed
$100,000. For this purpose, fair market value shall be the fair market value of
the shares covered by the ISOs when the ISOs were granted. If by their terms,
such ISOs taken together would first become exercisable at a faster rate, this
$100,000 limitation shall be applied by deferring the
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<PAGE> 3
exercisability of those ISOs or portions of ISOs which have the highest per
share exercise prices. The ISOs or portions of ISOs, the exercisability of
which are so deferred, shall become exercisable on the first day of the first
subsequent calendar year during which they may be exercised, as determined by
applying these same principles of this Section and all other provisions of this
Section and all other provisions of this Plan, including those relating to the
expiration and termination of ISOs.
5.4 Advance Approvals. The Board of Directors may approve the grant
of Options to persons who are expected to become employees, consultants or
members of the Board of Directors, of the Company, but are not employees,
consultants or members of the Board of Directors at the date of approval. In
such cases, the Option shall be deemed granted, without further approval, on the
date the grantee becomes an employee, and must satisfy all requirements of this
Plan for Options granted on that date.
6. TERMS AND CONDITIONS OF OPTIONS
Each Option shall be designated as an ISO or a NQO and shall be subject to
the terms and conditions set forth in Section 6.1. NQOs shall also be subject
to the terms and conditions set forth in Section 6.2, but not those set forth
in Section 6.3. ISOs shall also be subject to the terms and conditions set
forth in Section 6.3, but not those set forth in Section 6.2.
6.1 Terms and Conditions to Which All Options Are Subject. All Options
shall be subject to the following terms and conditions:
(a) Changes in Capital Structure. Subject to Section
6.1(b), if the stock of the Company is changed by reason of a
stock split, reverse stock split, stock dividend, or
recapitalization, or converted into or exchanged for other
securities as a result of a merger, consolidation, or
reorganization, appropriate adjustments shall be made in (A) the
number and class of shares of stock subject to this Plan and
each outstanding Option, and (B) the exercise price of each
outstanding Option; provided, however, that the Company shall
not be required to issue fractional shares as a result of any
such adjustment. Each such adjustment shall be determined by
the Committee in its sole discretion, which determination shall
be final and binding on all persons.
(b) Corporate Transactions. New option rights may be
substituted for Options granted, or the Company's obligations as
to outstanding Options may be assumed, by an employer
corporation other than the Company, or an Affiliate thereof, in
connection with any merger, consolidation, acquisition,
separation, reorganization, dissolution, liquidation, sale, or
like occurrence in which the Company is involved and which the
Committee determines, in its absolute discretion, would
materially alter the structure. Substitution shall be done in
such manner that the then outstanding Options which are ISOs
will continue to be "incentive stock options" within the meaning
of Section 422 of the Code to the full extent permitted thereby.
Notwithstanding the foregoing or the provisions of Section
6.1(a), if such an event occurs and if such employer
corporation, or an Affiliate thereof, does not substitute new
option rights for, and substantially equivalent to, the
outstanding Options granted hereunder, or assume the outstanding
Options granted hereunder, or if there is no employer
corporation, or if the Committee determines, in its sole
discretion, that outstanding Options should not then continue to
be outstanding, the Committee may upon ten days prior written
notice to optionees in its absolute discretion (A) shorten the
period during which Options are exercisable (provided they
3
<PAGE> 4
remain exercisable, to the extent otherwise exercisable, for at
least ten days after the date the notice is given), or (B)
cancel Options upon payment to the optionee in cash, with
respect to each Option to the extent then exercisable, of an
amount which, in the absolute discretion of the Committee, is
determined to be equivalent to any excess of the fair market
value (at the effective time of the dissolution, liquidation,
merger, consolidation, acquisition, separation, reorganization,
sale or other event) of the consideration that the optionee
would have received if the Option had been exercised before the
effective time, over the exercise price of the Option; provided,
however, if there is a successor corporation and replacement
options are not granted by the successor corporation, all
outstanding Options shall become exercisable prior to the
consummation of the transaction such that the optionees shall
have not less than ten days to exercise their Options and become
stockholders of record entitled to receive the consideration
paid to the other stockholders of the Company. If an optionee
fails to exercise his option within any exercise period
described in this paragraph and the dissolution, liquidation,
merger, consolidation, sale or other event is consummated, his
option shall no longer be exercisable. Any unexercised option
shall be cancelled and terminated. Notwithstanding anything
herein to the contrary, nothing shall extend an optionee's right
to exercise (1) an ISO after the expiration of ten (10) years
from the date it is granted or (2) a NQO after the expiration of
ten (10) years from the date it is granted. The actions
described in this Section may be taken without regard to any
resulting tax consequences to the optionee.
(c) Option Grant Date. Each Option Agreement shall
specify the date as of which it shall be effective, which date
shall be the Grant Date (determined pursuant to Section 5.4 in
the case of advance approvals).
(d) Fair Market Value. For purposes of this Plan, the
fair market value of the Company's Common Stock shall be
determined as follows:
(1) if the stock is listed on any established stock
exchange or a national market system, including without
limitation the National Market System of the National
Association of Securities Dealers Automated Quotation
System, its fair market value shall be the closing sales
price for the stock, or the mean between the high bid and
low asked prices if no sales were reported, as quoted on
such system or exchange (or the largest such exchange) for
the date the value is to be determined (or if there are no
sales or bids for such date, then for the last preceding
business day on which there were sales or bids), as
reported in the Wall Street Journal or similar publication;
(2) if the stock is regularly quoted by a recognized
securities dealer but selling prices are not reported,
its fair market value shall be the mean between the high
bid and low asking prices for the stock on the date the
value is to be determined (or if there are no quoted prices
for the date of grant, then for the last preceding business
day on which there were quoted prices); or
(3) in the absence of an established market for the
stock, the fair market value shall be determined in
"good faith" by the Committee, with reference to the
Company's net worth, prospective earning power,
dividend-paying capacity, and other relevant factors,
including sales for the most recent 12 month period, the
goodwill of the Company, the economic outlook in the
Company's industry, the Company's position in
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<PAGE> 5
the industry and its management and the values of stock of other
corporations in the same or a similar line of business.
(e) Time of Option Exercise. The Company shall not grant any
Options which may become exercisable at a rate in excess of 20% per
annum from the date of such grant without the written consent of a
majority of the Disinterested Directors.
(f) Nonassignability of Option Rights. No Option shall be
assignable or otherwise transferable by the optionee except by will or
by the laws of descent and distribution. During the life of the optionee,
an Option shall be exercisable only by the optionee or the optionee's
guardian or legal representative.
(g) Payment. Except as provided below, payment in full, in
cash, shall be made for all stock purchased at the time written notice
of exercise of an Option is given to the Company, and proceeds of any
payment shall constitute general funds of the Company. At the time an
Option is granted or before it is exercised, the Committee, in the
exercise of its absolute discretion, may authorize any one or more of the
following additional methods of payment:
(1) acceptance of the optionee's full recourse promissory
note for some or all of the aggregate exercise price of the
shares being acquired (except for the aggregate par value of the
shares being acquired, which must be paid in cash or other
lawful consideration under applicable law), payable on such
terms and bearing such interest rate as determined by the
Committee, and secured in such manner as the Committee shall
approve; including, without limitation, by a security interest
in Common Stock or other securities of the Company;
(2) delivery by the optionee of Common Stock or other
securities of the Company already owned by the optionee for all
or part of the aggregate exercise price of the shares being
acquired, provided the fair market value of such Common Stock or
securities is equal on the date of exercise to the aggregate
exercise price of the shares being acquired, or such portion
thereof as the optionee is authorized to pay by delivery of such
Common Stock or securities; and
(3) any other property, so long as such property is
acceptable to the Committee and constitutes valid consideration
under applicable law for the shares being acquired and is
surrendered in good form for transfer.
(h) Termination.
(1) Any Option or portion thereof which has not expired or
been exercised on or before the date on which an optionee
ceases to be an employee, officer, consultant or member of the
Board of Directors or otherwise affiliated with the Company
("Termination") for cause, shall expire upon Termination.
(2) Any Option or portion thereof which has not expired or
been exercised on or before the date of Termination without
cause, shall expire ninety (90) days after the date of
Termination. A leave of absence duly authorized by the Company,
shall not be deemed a Termination or a break in continuous
employment.
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<PAGE> 6
(3) Notwithstanding the foregoing, if Termination is due
to the permanent disability or death of the optionee, the
optionee, the optionee's personal representative or any other
person who acquires option rights from the optionee by will or
the applicable laws of descent and distribution, may, within
twelve months after the date of Termination, exercise such
option rights to the extent they were exercisable on the date of
Termination.
(i) Other Provisions. Each Option Agreement may contain such
other terms, provisions, and conditions not inconsistent with this
Plan, including rights of repurchase, as may be determined by the
Committee, and each ISO granted under this Plan shall include such
provisions and conditions as are necessary to qualify such option as an
"incentive stock option" within the meaning of Section 422 of the Code.
(j) Withholding and Employment Taxes. At the time of exercise
of an Option, the optionee shall remit to the Company in cash all
applicable federal and state withholding and employment taxes. If and to
the extent authorized and approved by the Committee in its sole
discretion, an optionee may elect, by means of a form of election to be
prescribed by the Committee, to have shares which are acquired upon
exercise of an Option withheld by the Company or tender other shares of
Common Stock or other securities of the Company owned by the optionee to
the Company at the time the amount of such taxes is determined in order to
pay the amount of such tax obligations, subject to the following
limitations:
(1) such election shall be irrevocable;
(2) such election shall be subject to the disapproval of
the Committee at any time;
(3) such election may not be made within six months of the
Grant Date of the Option the exercise of which resulted in the
tax withholding obligation (the "Related Option") (except that
this limitation shall not apply in the event death or disability
of the optionee occurs before the expiration of the six-month
period); and
(4) such election must be made either (i) six months before
the date that the amount of tax to be withheld upon exercise of
the Related Option is determined or (ii) in any ten-day period
before such tax determination date beginning on the third
business day following the date of release by the Company for
publication of quarterly or annual summary statements of sales
or earnings of the Company.
Any Common Stock or other securities so withheld or tendered will be valued by
the Company as of the date they are withheld or tendered. Unless the Committee
otherwise determines, the optionee shall pay to the Company in cash, promptly
when the amount of such obligations become determinable, all applicable federal
and state withholding taxes resulting from the lapse of restrictions imposed on
exercise of an Option, from a transfer or other disposition of shares acquired
upon exercise of an Option or otherwise related to the Option or the shares
acquired upon exercise of the Option.
6.2 Terms and Conditions to Which Only NQOs Are Subject.
Options granted under this Plan which are designated as NQOs shall be subject
to the following terms and conditions:
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(a) Exercise Price. The exercise price of an NQO shall not be
less than 85 percent of the fair market value of the stock subject to
the Option on the Grant Date; provided however, that the exercise price of
an NQO granted to any person who owns, directly or indirectly (or is
treated as owning by reason of attribution rules, currently set forth in
Code Section 424), stock of the Company constituting more than ten percent
of the total combined voting power of all classes of outstanding stock of
the Company or of any Affiliate of the Company, shall in no event be less
than 100 percent of such fair market value.
(b) Option Term. Unless an earlier expiration date is
specified by the Committee at the Grant Date in the Option Agreement,
each NQO shall expire ten years from its Grant Date.
6.3 Terms and Conditions to Which Only ISOs Are Subject. Options
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:
(a) Exercise Price. The exercise price of an ISO shall be determined
in accordance with the applicable provisions of the Code and shall in
no event be less than the fair market value of the stock covered by the
ISO at the Grant Date; provided, however, that the exercise price of an
ISO granted to any person who owns, directly or indirectly (or is treated
as owning by reason of attribution rules, currently set forth in Code
Section 424), stock of the Company constituting more than ten percent of
the total combined voting power of all classes of outstanding stock of the
Company or of any Affiliate of the Company, shall in no event be less than
110 percent of such fair market value.
(b) Option Term. Unless an earlier expiration date is specified by
the Committee at the Grant Date in the Option Agreement, each ISO shall
expire ten (10) years from its Grant Date; except that an ISO granted to
any person who owns, directly or indirectly (or is treated as owning by
reason of applicable attribution rules currently set forth in Section 424
of the Code) stock of the Company constituting more than ten percent of
the total combined voting power of the Company's outstanding stock, or the
stock of any Affiliate of the Company, shall expire five years from its
Grant Date.
(c) Disqualifying Dispositions. If stock acquired by exercise of an
ISO is disposed of within two years from the Grant Date or within one
year after the transfer of the stock to the optionee, the holder of the
stock immediately prior to the disposition shall promptly notify the
Company in writing of the date and terms of the disposition and shall
provide such other information regarding the disposition as the Company
may reasonably require. Such holder shall pay to the Company any
withholding and employment taxes which the Company in its sole discretion
deems applicable. The Company may instruct its stock transfer agent by
appropriate means, including placement of legends on stock certificates,
not to transfer stock acquired by exercise of an ISO unless it has been
advised by the Company that the requirements of this Section have been
satisfied.
7. MANNER OF EXERCISE
An optionee wishing to exercise an Option shall give written notice to
the Company at its principal executive office, to the attention of the
Secretary of the Company, accompanied by an executed stock purchase agreement
in form and substance satisfactory to the Company, by payment of the exercise
price and by such other documents as the Committee may request. The date the
Company receives written notice of an exercise hereunder accompanied by payment
of the exercise
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<PAGE> 8
price and all such other documents will be considered the date the Option was
exercised. Promptly after receipt of written notice of exercise of an Option,
the Company shall, without stock issue or transfer taxes to the optionee or any
other person entitled to exercise the Option, deliver to the optionee or such
other person a certificate or certificates for the requisite number of shares
of stock. An optionee or transferee of an Option shall not have any privileges
as stockholder with respect to any stock covered by the Option until the date
of issuance of a stock certificate.
8. RELATIONSHIP WITH THE COMPANY
Nothing in this Plan or any Option granted hereunder shall interfere
with or limit in any way the right of the Company to terminate any optionee's
employment, affiliation or other relationship with the Company at any time, nor
confer upon any optionee any right to continue in the employ of, as a
consultant to, as a director of, or otherwise affiliated in any way with, the
Company.
9. AMENDMENT, SUSPENSION OR TERMINATION OF THIS PLAN
The Board of Directors may at any time amend, alter, suspend or
discontinue this Plan. The Board of Directors may amend this Plan and the
terms of any Option outstanding hereunder if the amendment is designed to
maximize federal income tax benefits accorded to Options; provided, that with
respect to outstanding Options, the optionee consents to such amendment.
10. LIABILITY AND INDEMNIFICATION OF COMMITTEE
No member of the Committee shall be liable for any act or omission on
such member's own part, including but not limited to the exercise of any power
or discretion given to such member under this Plan, except for those acts or
omissions resulting from such member's own gross negligence or willful
misconduct. The Company shall indemnify each present and future member of the
Committee against, and each member of the Committee shall be entitled without
further act on his or her part to indemnity from the Company for, all expenses
(including attorneys' fees and the amount of judgments and the amount of
approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to the Company itself) reasonably incurred
by such person in connection with or arising out of any action, suit, or
proceeding to which the Committee or any member of the committee may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any option granted or not granted under the Plan to the full extent
permitted by law and by the Certificate of Incorporation and Bylaws of the
Company. The right of indemnity described in this Section 10 shall be in
addition to such other rights of indemnification as the members of the
Committee shall otherwise be entitled because of their serving on the Board of
Directors of the Company or as an employee of the Company.
11. EFFECTIVE DATE OF THIS PLAN
This Plan shall become effective upon adoption by the Board.
On February 1, 1995 the Board of Directors of MedPartners, Inc.
adopted the Plan which was then adopted by the stockholders of MedPartners,
Inc. that same date. On August 14, 1995 the Board of Directors of MedPartners
adopted an amendment to the Plan to increase the number of shares issued
8
<PAGE> 9
thereof to the present level which was then approved and adopted by the
stockholders of MedPartners, Inc. on November 28, 1995.
On November 28, 1995 the Board of Directors of MedPartners/Mullikin,
Inc., the successor issuer of MedPartners, Inc., adopted this Plan which was
then adopted by the stockholders of the Company on that same date.
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<PAGE> 10
AMENDMENT NUMBER 1 TO THE 1995 STOCK OPTION PLAN OF
MEDPARTNERS/MULLIKIN, INC.
The 1995 Stock Option Plan of MedPartners/Mullikin is hereby amended
to substitute a new Section 3.1 thereof so that such Section 3.1, as so
amended, shall read as follows:
3. STOCK SUBJECT TO THIS PLAN
3.1 The total number of shares of stock reserved for issuance upon
the exercise of Options is 5,575,000 shares of Common Stock. The shares
covered by the portion of any grant that expires unexercised under this Plan
shall become available again for grants under this Plan. The number of shares
reserved for issuance under this Plan is subject to adjustment in accordance
with the provisions for adjustment in this Plan.
Subject to this amendment, all other provisions of the 1995 Plan
remain in full force and effect as originally adopted by the Board of Directors
and approved by the Stockholders of the Company on February 22, 1996.
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<PAGE> 11
AMENDMENT NUMBER 2 TO THE 1995 STOCK OPTION PLAN OF
MEDPARTNERS/MULLIKIN, INC.
The 1995 Stock Option Plan of MedPartners/Mullikin is hereby amended
to substitute a new Section 3.1 thereof so that such Section 3.1, as so
amended, shall read as follows:
3. STOCK SUBJECT TO THIS PLAN
3.1 The total number of shares of stock reserved for issuance upon
the exercise of Options is 7,099,150 shares of Common Stock. The shares
covered by the portion of any grant that expires unexercised under this Plan
shall become available again for grants under this Plan. The number of shares
reserved for issuance under this Plan is subject to adjustment in accordance
with the provisions for adjustment in this Plan.
Subject to this amendment, all other provisions of the 1995 Plan
remains in full force and effect as originally adopted by the Board of
Directors on March 22, 1996 and approved by the Stockholders of the Company on
April 25, 1996.
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EXHIBIT 5
<TABLE>
<S> <C> <C>
LAW OFFICES
HASKELL SLAUGHTER & YOUNG, L.L.C.
1200 AMSOUTH/HARBERT PLAZA
1901 SIXTH AVENUE NORTH WYATT RUSHTON HASKELL CONSTANCE A. CALDWELL
BIRMINGHAM, ALABAMA 35203-2618 WILLIAM M. SLAUGHTER GWEN L. WINDLE
FRANK M. YOUNG, III MICHAEL K.K. CHOY
FACSIMILE (205) 324-1133 ROBERT E. LEE GARNER ------------
TELEPHONE (205) 251-1000 BENJAMIN B. SPRATLING III CARTER H. DUKES
THOMAS T. GALLION, III PAULA B. CARROLL
ROBERT D. SHATTUCK, JR. R. SCOTT WILLIAMS
E. ALSTON RAY JOHN W. SCOTT
JAMES C. HUCKABY, JR. F. HAMPTON McFADDEN, JR.
MARK EDWARD EZELL BARRY D. WOODHAM
STEPHEN L. POER GEORGIA S. ROBERSON
MONTGOMERY OFFICE THOMAS E. REYNOLDS SUSAN E. KENNEDY
BEVERLY POOLE BAKER REBECCA HIGGINS HUNT
305 SOUTH LAWRENCE STREET ROSS N. COHEN
MONTGOMERY, ALABAMA 36104 RICHARD H. WALSTON
POST OFFICE BOX 4660
MONTGOMERY, ALABAMA 36103-4660 PLEASE REPLY TO: BIRMINGHAM
FACSIMILE (334) 264-7945
TELEPHONE (334) 265-8573
</TABLE>
August 29, 1996
MedPartners/Mullikin, Inc.
3000 Galleria Tower, #1000
Birmingham, Alabama 35244-2331
RE: REGISTRATION STATEMENT ON FORM S-8 -- STOCK OPTION PLAN
OUR FILE NO. 48367-012
Gentlemen:
We have served as counsel for 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 2,250,000 shares (the
"Shares") of the Company's authorized Common Stock, par value $.001 per share,
to be issued to participants in the Company's 1995 Stock Option 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 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.
<PAGE> 2
MedPartners/Mullikin, Inc.
August 29, 1996
Page 2
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 Robert E. Lee Garner
------------------------------------
Robert E. Lee Garner
<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/Mullikin, Inc. 1995 Stock
Option 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
August 29, 1996
