<PAGE> 1
As filed with the Securities and Exchange Commission on October 27, 1997
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, Inc. 1997 Long Term Incentive Compensation Plan
(Full Title of the Plan)
LARRY R. HOUSE
Chairman of the Board
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:
Donald T. Locke, Esq.
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
----------------------
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 $.001 per 6,725,000 shares (2) $26.719(3) $179,685,275(3) $54,450.08
share (including Common Stock
Purchase Rights)(1)
===================================================================================================================================
</TABLE>
(1) The Common Stock Purchase Rights (the "Rights") are attached to and trade
with the common stock of MedPartners, Inc. ("MedPartners" or the
"Company"). The value, if any, attributable to the Rights is reflected in
the market price of the Common Stock of MedPartners.
(2) Maximum number of shares which may be issued by MedPartners pursuant to
its 1997 Long Term Incentive Compensation Plan (the "1997 Plan").
(3) Determined pursuant to Rule 457(h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee and represents
the average of the high and low prices of the Common Stock of the Company
as reported on The New York Stock Exchange Composite Transaction Tape on
October 24, 1997.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
MedPartners, Inc., a Delaware corporation ("MedPartners" or 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/A for the fiscal year ended
December 31, 1996.
(b) The Company's Quarterly Reports on Form 10-Q filed for the fiscal quarters
ended March 31, 1997 and June 30, 1997.
(c) The Company's Current Report on Form 8-K dated as of August 27, 1997.
(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.
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 Registration Statement 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 Delaware General Corporate Law ("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 for 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 Commission 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, Inc. Stockholder's Rights Plan, filed as of Exhibit (4)-1 to
the Company's Registration Statement on Form S-4 (Registration No.
333-00774) is hereby incorporated by reference.
(4)-2 Amendment No. 1 to the Stockholders' Rights Plan of MedPartners, Inc., filed
as Exhibit (4)-2 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, is hereby incorporated herein by reference.
(4)-3 Amendment No. 2 to the Stockholders' Rights Plan of MedPartners, Inc., filed
as Exhibit (4)-2 to the Company's Registration Statement on Form S-3
(Registration No. 333-17339), is hereby incorporated herein by reference.
(4)-4 1997 Long Term 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 Haskell Slaughter & Young, L.L.C. (contained in the opinion of
counsel filed as Exhibit 5 to this Registration Statement).
24 Powers of Attorney (set forth on the signature page of this Registration Statement).
</TABLE>
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in the
amount of securities offered (if the total dollar value of the
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%
II-3
<PAGE> 5
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, 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.
<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 October 24,
1997.
MEDPARTNERS, INC.
By/s/ LARRY R. HOUSE
----------------------------
Larry R. House
Chairman of the Board
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>
/s/ LARRY R. HOUSE Chairman of the Board October 24, 1997
- ---------------------------- and Chief Executive Officer
Larry R. House (Principal Executive Officer)
/s/ HAROLD O. KNIGHT, JR. Executive Vice President and October 24, 1997
- ---------------------------- Chief Financial Officer
Harold O. Knight, Jr. (Principal Financial and
Accounting Officer)
/s/ RICHARD M. SCRUSHY Director October 24, 1997
- ----------------------------
Richard M. Scrushy
/s/ LARRY D. STRIPLIN, JR. Director October 24, 1997
- ----------------------------
Larry D. Striplin, Jr.
</TABLE>
II-5
<PAGE> 7
/s/ CHARLES W. NEWHALL, III Director October 24, 1997
- -------------------------------------
Charles W. Newhall, III
/s/ TED H. McCOURTNEY Director October 24, 1997
- -------------------------------------
Ted H. McCourtney
/s/ WALTER T. MULLIKIN, M.D. Director October 24, 1997
- -------------------------------------
Walter T. Mullikin, M.D.
/s/ JOHN S. McDONALD, J.D. Director October 24, 1997
- -------------------------------------
John S. McDonald, J.D.
/s/ ROSALIO J. LOPEZ, M.D. Director October 24, 1997
- -------------------------------------
Rosalio J. Lopez, M.D.
/s/ C.A. LANCE PICCOLO Director October 24, 1997
- -------------------------------------
C.A. Lance Piccolo
/s/ RODGER L. HEADRICK Director October 24, 1997
- -------------------------------------
Roger L. Headrick
/s/ HARRY M. JANSEN KRAEMER, JR. Director October 24, 1997
- -------------------------------------
Harry M. Jansen Kraemer, Jr.
II-6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page Number
- ------ ---------------------- -----------
<S> <C> <C>
(4)-1 Medpartners/Mullikin, Inc. Stockholders' Rights Plan,
filed Exhibit (4)-1 to the Company's Registration
Statement on Form S-4 (Registration No. 333-00774) is
hereby incorporated by reference.
(4)-2 Amendment No. 1 to the Stockholders' Rights Plan of
MedPartners, Inc., filed as Exhibit (4)-2 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, is hereby incorporated
herein by reference.
(4)-3 Amendment No. 2 to the Stockholders' Rights Plan of
MedPartners, Inc. filed as Exhibit (4)-2 to the
Company's Registration Statement on Form S-3
(Registration No. 333-17339), is hereby incorporated
herein by reference.
(4)-4 1997 Long Term 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 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)-4
MEDPARTNERS, INC.
1997 LONG TERM INCENTIVE COMPENSATION PLAN
<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Article 1. Establishment, Objectives and Duration........................................................ 5
1.1 Establishment of the Plan..................................................................... 5
1.2 Objectives of the Plan........................................................................ 5
1.3 Duration of the Plan.......................................................................... 5
Article 2. Definitions................................................................................... 5
2.1 "Affiliate"................................................................................... 5
2.2 "Award"....................................................................................... 6
2.3 "Award Agreement"............................................................................. 6
2.4 "Beneficial Owner" or "Beneficial Ownership".................................................. 6
2.5 "Board" or "Board of Directors"............................................................... 6
2.6 "Cause"....................................................................................... 6
2.7 "Change in Control"........................................................................... 6
2.8 "Code"........................................................................................ 7
2.9 "Committee"................................................................................... 7
2.10 "Company"..................................................................................... 8
2.11 "Director".................................................................................... 8
2.12 "Disability".................................................................................. 8
2.13 "Effective Date".............................................................................. 8
2.14 "Eligible Person"............................................................................. 8
2.15 "Employee".................................................................................... 8
2.16 "Exchange Act"................................................................................ 8
2.17 "Fair Market Value"........................................................................... 8
2.18 "Immediate Family Members".................................................................... 8
2.19 "Incentive Stock Option" or "ISO"............................................................. 9
2.20 "Insider"..................................................................................... 9
2.21 "Nonemployee Director"........................................................................ 9
2.22 "Nonqualified Stock Option" or "NQSO"......................................................... 9
2.23 "Option"...................................................................................... 9
2.24 "Option Price"................................................................................ 9
2.25 "Participant"................................................................................. 9
2.26 "Period of Restriction"....................................................................... 9
2.27 "Person"...................................................................................... 9
2.28 "Plan"........................................................................................ 9
2.29 "Restricted Stock"............................................................................ 9
2.30 "Retirement".................................................................................. 9
2.31 "Shares"..................................................................................... 10
2.32 "Subsidiary"................................................................................. 10
Article 3. Administration................................................................................ 10
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
3.1 The Committee................................................................................. 10
3.2 Authority of the Committee.................................................................... 10
3.3 Decisions Binding............................................................................. 10
3.4 Costs of Plan................................................................................. 10
Article 4. Shares Subject to the Plan and Maximum Awards................................................. 11
4.1 Number of Shares Available for Grants......................................................... 11
4.2 Adjustments in Authorized Shares.............................................................. 11
Article 5. Eligibility and Participation................................................................. 12
5.1 Eligibility................................................................................... 12
5.2 Actual Participation.......................................................................... 12
Article 6. Stock Options................................................................................. 12
6.1 Grant of Options.............................................................................. 12
6.2 Award Agreement............................................................................... 12
6.3 Option Price.................................................................................. 12
6.4 Duration of Options........................................................................... 12
6.5 Exercise of Options........................................................................... 12
6.6 Payment....................................................................................... 13
6.7 Restrictions on Share Transferability......................................................... 13
6.8 Termination of Employment..................................................................... 13
6.9 Nontransferability of Options................................................................. 13
(a) Incentive Stock Options.............................................................. 13
(b) Nonqualified Stock Options........................................................... 14
Article 7. Restricted Stock.............................................................................. 14
7.1 Grant of Restricted Stock..................................................................... 14
7.2 Restricted Stock Agreement.................................................................... 14
7.3 Transferability............................................................................... 14
7.4 Other Restrictions............................................................................ 15
7.5 Voting Rights................................................................................. 15
7.6 Dividends and Other Distributions............................................................. 15
7.7 Termination of Employment..................................................................... 15
Article 8. Beneficiary Designation....................................................................... 16
Article 9. Deferrals..................................................................................... 16
Article 10. Rights of Employees........................................................................... 16
10.1 Employment.................................................................................... 16
10.2 Participation................................................................................. 16
Article 11. Change in Control............................................................................. 16
11.1 Treatment of Outstanding Awards............................................................... 16
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
11.2 Termination, Amendment, and Modifications of Change-in-Control
Provisions.................................................................................... 17
Article 12. Amendment, Modification, and Termination...................................................... 17
12.1 Amendment, Modification, and Termination...................................................... 17
12.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events........................................................................... 17
12.3 Awards Previously Granted..................................................................... 17
Article 13. Withholding................................................................................... 17
13.1 Tax Withholding............................................................................... 17
13.2 Share Withholding............................................................................. 18
Article 14. Indemnification............................................................................... 18
Article 15. Successors.................................................................................... 18
Article 16. Legal Construction............................................................................ 18
16.1 Gender and Number............................................................................. 18
16.2 Severability.................................................................................. 18
16.3 Requirements of Law........................................................................... 19
16.4 Securities Law Compliance..................................................................... 19
16.5 Governing Law................................................................................. 19
</TABLE>
<PAGE> 5
MEDPARTNERS, INC.
1997 LONG TERM INCENTIVE COMPENSATION PLAN
ARTICLE 1. ESTABLISHMENT, OBJECTIVES AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. MedPartners, Inc., a Delaware corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive
compensation plan to be known as the "MedPartners, Inc. 1997 Long Term
Incentive Compensation Plan" (hereinafter referred to as the "Plan"), as set
forth in this document. The Plan permits the grant of Incentive Stock Options,
Nonqualified Stock Options and Restricted Stock.
The Plan shall become effective as of February 25, 1997 (the "Effective Date")
and shall remain in effect as provided in Section 1.3 hereof.
1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the
profitability and growth of the Company through the use of incentives which are
consistent with the Company's objectives and which link the interests of
Participants to those of the Company's stockholders; to provide Participants
with an incentive for excellence in individual performance; and to promote
teamwork among Participants.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date, as
described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors or the Committee to amend or terminate the Plan
at any time pursuant to Article 12 hereof, until all Shares subject to it shall
have been purchased or acquired according to the Plan's provisions. However, in
no event may an Incentive Stock Option be granted under the Plan on or after
February 25, 2007.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
2.1 "AFFILIATE" means a "parent corporation" or "subsidiary corporation" as
defined in Section 424 of the Code.
5
<PAGE> 6
2.2 "AWARD" means, individually or collectively, a grant under this Plan of
Incentive Stock Options, Nonqualified Stock Options or Restricted Stock.
2.3 "AWARD AGREEMENT" means an agreement entered into by the Company and each
Participant setting forth the terms and provisions applicable to Awards
granted under this Plan.
2.4 "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
2.5 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.6 "CAUSE" shall be determined by the Committee, exercising good faith and
reasonable judgment, and shall mean the occurrence of any one or more of the
following:
(a) The willful and continued failure by the Participant to substantially
perform his duties (other than any such failure resulting from the
Participant's Disability) after a written demand for substantial performance is
delivered by the Committee to the Participant that specifically identifies the
manner in which the Committee believes that the Participant has not
substantially performed his duties, and the Participant has failed to remedy
the situation within 30 calendar days of receiving such notice; or
(b) The Participant's conviction for committing an act of fraud,
embezzlement, theft or another act constituting a felony; or
(c) The willful engaging by the Participant in gross misconduct
materially and demonstrably injurious to the Company, as determined by the
Committee. However, no act or failure to act on the Participant's part shall be
considered "willful" unless done, or omitted to be done, by the Participant not
in good faith and without reasonable belief that his action or omission was in
the best interest of the Company.
2.7 "CHANGE IN CONTROL" of the Company shall be deemed to have occurred
as of the first day that any one or more of the following conditions shall have
been satisfied:
(a) The acquisition by any Person of Beneficial Ownership of 20% or
more of either (i) the then outstanding shares of Common Stock of the Company,
or (ii) the combined voting power of the outstanding voting securities of the
Company entitled to vote generally in the selection of Directors; provided,
however, that for purposes of this subsection, the following transactions shall
not constitute a Change of Control: (A) any acquisition directly from the
Company through a public offering of shares of Common Stock of the Company, (B)
any acquisition by the Company, (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (D) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (C) below;
6
<PAGE> 7
(b) The cessation, for any reason, of the individuals who constitute
the Company's Board of Directors as of the date hereof ("Incumbent Board") to
constitute at least a majority of the Company's Board of Directors; provided,
however, that any individual becoming a Director following the date hereof
whose election, or nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the Directors then comprising the
Incumbent Board shall be considered as though such individual was a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs because of an actual or threatened election
contest with respect to the election or removal of Directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Company's Board of Directors;
(c) The consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company ("Business Combination") unless, following such Business Combination,
(i) all or substantially all of the individuals and entities who were the
Beneficial Owners, respectively, of the outstanding shares of Common Stock of
the Company and the outstanding voting securities of the Company immediately
before such Business Combination beneficially own, directly or indirectly, more
than 50% of, respectively, the then outstanding shares of Common Stock and the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of Directors, as the case may be, of the Company
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership
immediately before such Business Combination of the outstanding shares of
Common Stock and the outstanding voting securities of the Company, as the case
may be; (ii) no party (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
before the Business Combination; and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Company's Board of Directors at the time of the
execution of the initial agreement, or of the action of the Company's Board of
Directors, providing for such Business Combination; or
(d) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
2.8 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
2.9 "COMMITTEE" means the Compensation Committee of the Board, as specified in
Article 3 herein, or such other Committee appointed by the Board to administer
the Plan with respect to grants of Awards.
7
<PAGE> 8
2.10 "COMPANY" means MedPartners, Inc., and also means any corporation of which
a majority of the voting capital stock is owned directly or indirectly by
MedPartners, Inc. or by any of its Subsidiaries, and any other corporation
designated by the Committee as being a Company hereunder (but only during the
period of such ownership or designation).
2.11 "DIRECTOR" means any individual who is a member of the Board of Directors
of the Company.
2.12 "DISABILITY", as applied to a Participant, means that the Participant (a)
has established to the satisfaction of the Committee that the Participant is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to last for a
continuous period of not less than 12 months (all within the meaning of Section
22(e)(3) of the Code), and (b) has satisfied any requirement imposed by the
Committee in regard to evidence of such disability.
2.13 "EFFECTIVE DATE" shall have the meaning ascribed to such term in Section
1.1 hereof.
2.14 "ELIGIBLE PERSON" shall mean all Employees, Directors or consultants of
the Company or any Affiliate; provided, however, that no Award may be granted
to anyone who is not an "employee" as that term is defined in General
Instruction A.(1)(a) of Form S-8, as such definition may be amended from time
to time, without first receiving advice and guidance from the Company's outside
counsel as to the effect of such grant.
2.15 "EMPLOYEE" means any officer or employee of the Company.
2.16 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
2.17 "FAIR MARKET VALUE" Except as otherwise determined by the Committee, the
"Fair Market Value" of a share of Common Stock as of any date shall be equal to
the closing sale price of a share of Common Stock as reported on The National
Association of Securities Dealers' New York Stock Exchange Composite Reporting
Tape (or if the Common Stock is not traded on The New York Stock Exchange, the
closing sale price on the exchange on which it is traded or as reported by an
applicable automated quotation system) (the "Composite Tape"), on the
applicable date or, if no sales of Common Stock are reported on such date, the
closing sale price of a share of Common Stock on the date the Common Stock was
last reported on the Composite Tape (or such other exchange or automated
quotation system, if applicable).
2.18 "IMMEDIATE FAMILY MEMBERS" means the spouse, children and grandchildren of
a Participant.
8
<PAGE> 9
2.19 "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.
2.20 "INSIDER" shall mean an individual who is, on the relevant date, a
Director, a 10% Beneficial Owner of any class of the Company's equity
securities that is registered pursuant to Section 12 of the Exchange Act or an
officer of the Company, as defined under Section 16 of the Exchange Act and as
determined by the Board of Directors from time to time.
2.21 "NONEMPLOYEE DIRECTOR" means an individual who is a member of the Board of
Directors of the Company but who is not an Employee of the Company.
2.22 "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase Shares
granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
2.23 "OPTION" means an Incentive Stock Option or a Nonqualified Stock Option,
as described in Article 6 herein.
2.24 "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
2.25 "PARTICIPANT" means an Eligible Person who has outstanding an Award
granted under the Plan.
2.26 "PERIOD OF RESTRICTION" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of
time, the achievement of performance objectives, or upon the occurrence of
other events as determined by the Committee, at its discretion), and the Shares
of Restricted Stock are subject to a substantial risk of forfeiture, as
provided in Article 7 herein.
2.27 "PERSON" shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) thereof.
2.28 "PLAN" means the MedPartners, Inc. 1997 Long Term Incentive Compensation
Plan.
2.29 "RESTRICTED STOCK" means an Award granted to a Participant pursuant to
Article 7 herein.
2.30 "RETIREMENT" as applied to a Participant, means the Participant's
termination of employment in a manner which qualifies the Participant to
receive immediately payable retirement benefits under the applicable retirement
plan maintained by the Company (the "Retirement Plan"), under the successor or
replacement of such Retirement Plan if it is then no longer in effect, or under
any other retirement plan maintained or adopted by the Company which is
determined by
9
<PAGE> 10
the Committee to be the functional equivalent of such Retirement Plan; or, with
respect to a Participant who may not or has not participated in a retirement
plan maintained by the Company or an Affiliate, "Retirement" shall have the
meaning determined by the Committee from time to time.
2.31 "SHARES" means Common Stock of MedPartners, Inc., par value $.001 per
share.
2.32 "SUBSIDIARY" means any corporation, partnership, joint venture or other
entity in which the Company has a majority voting interest.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Committee, or by any
other committee appointed by the Board, which Committee shall consist solely of
two or more "Nonemployee Directors" within the meaning of Rule 16b-3 under the
Exchange Act, or any successor provision. The members of the Committee shall be
appointed from time to time by, and shall serve at the discretion of, the Board
of Directors.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the Certificate
of Incorporation or Bylaws of the Company, and subject to the provisions
herein, the Committee shall have full power to select Employees who shall
participate in the Plan; determine the sizes and types of Awards; determine the
terms and conditions of Awards in a manner consistent with the Plan; construe
and interpret the Plan and any agreement or instrument entered into under the
Plan as they apply to Employees; establish, amend, or waive rules and
regulations for the Plan's administration as they apply to Employees; alter,
amend, suspend or terminate the Plan in whole or in part; and (subject to the
provisions of Article 12 herein) amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan, as the Plan applies to Employees. As permitted by
law, the Committee may delegate its authority as identified herein.
3.3 DECISIONS BINDING. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders and resolutions
of the Board shall be final, conclusive and binding on all persons, including
the Company, its stockholders, Employees, Participants and their estates and
beneficiaries.
3.4 COSTS OF PLAN. The costs and expenses incurred in the operation and
administration of the Plan shall be borne by the Company.
10
<PAGE> 11
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as provided
in Section 4.2 herein, the number of Shares hereby reserved for issuance to
Participants under the Plan shall be 6,725,000.
The number of Shares reserved for issuance under the Plan shall automatically
increase on the first day of each calendar year during the term of this Plan,
beginning with the 1998 calendar year, by an amount equal to 1% of the Shares
outstanding on December 31 of the immediately preceding year. However, such
additional Shares shall not be available for grants of Incentive Stock Options,
unless and until the increase in the number of Shares provided for herein is
subsequently approved by the stockholders of the Company in accordance with
Section 422 of the Code.
Shares issued upon exercise of Options or Awards of Restricted Stock under the
Plan may be either authorized but unissued Shares or Shares re-acquired by the
Company. If, on or prior to the termination of the Plan, an Award granted
thereunder expires or is terminated for any reason without having been
exercised or vested in full, the unpurchased or unvested Shares covered thereby
will again become available for the grant of Awards under the Plan. Shares of
Common Stock covered by Options surrendered in connection with the exercise of
other Options shall not be deemed to have been exercised and shall again become
available for the grant of awards under the Plan.
Notwithstanding the foregoing, the maximum number of Shares of Restricted Stock
granted pursuant to Article 7 herein shall be an amount equal to one-fifth of
the total number of Shares reserved for issuance under the Plan.
4.2 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in corporate
capitalization, such as a stock split, or a corporate transaction, such as any
merger, consolidation, separation, including a spin-off, or other distribution
of stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, such adjustment shall be
made in the number and class of Shares which may be delivered under Section
4.1, in the number and class of and/or price of Shares subject to outstanding
Awards granted under the Plan, and in the Award limits set forth in Section
4.1, as may be determined to be appropriate and equitable by the Committee, in
its sole discretion, to prevent dilution or enlargement of rights; provided,
however, that the number of Shares subject to any Award shall always be a whole
number.
11
<PAGE> 12
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. All Eligible Persons are eligible to participate in this
Plan.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee
may, from time to time, select from all Eligible Persons, those to whom Awards
shall be granted and shall determine the nature and amount of each Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan, Options
may be granted to Participants in such number, and upon such terms, and at any
time and from time to time as shall be determined by the Committee.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Code Section 422, or an
NQSO whose grant is intended not to fall under the provisions of Code Section
422.
6.3 OPTION PRICE. The Option Price for each grant of an Option under this Plan
shall be at least equal to 100% of the Fair Market Value of a Share on the date
the Option is granted; 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 10% of the total combined
voting power of the Company's outstanding stock, or the stock of any of its
corporate subsidiaries, shall in no event be less than 110% of the Fair Market
Value of such shares.
6.4 DURATION OF OPTIONS. Each Option granted to an Employee shall expire at
such time as the Committee shall determine at the time of grant; provided,
however, that no Incentive Stock Option shall be exercisable later than the
tenth anniversary date of its grant. Furthermore, each Stock Option granted to
any person who owns, directly or indirectly (or is treated as owning by reason
of attribution rules, currently set forth in Internal Revenue Code Section
424), stock of the Company constituting more than 10% of the total combined
voting power of the Company's outstanding stock, or the stock of any of its
corporate subsidiaries, is not exerciseable after the expiration of five years
from the date such option is granted.
6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant. Notwithstanding any contrary provisions
contained in this Plan, the aggregate Fair Market Value (determined as of the
12
<PAGE> 13
time each ISO is granted) of the shares of Common Stock with respect to which
ISO's issued to any one person thereunder are exercisable for the first time
during any calendar year shall not exceed $100,000.
6.6 PAYMENT. Options granted under this Article 6 shall be exercised by the
delivery of a proper notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised.
No shares of Common Stock shall be issued on the exercise of an Option unless
the Option Price is paid for in full at the time of exercise. Payment shall be
made in cash, which may be paid by check or other instrument acceptable to the
Company. In addition, subject to compliance with applicable laws and
regulations and such conditions as the Committee may impose, the Committee may
elect to accept payment in shares of Common Stock of the Company which are
already owned by the Participant, valued at the Fair Market Value thereof on
the date of exercise. The Committee may also allow a Participant to exercise an
Option by use of proceeds to be received from the sale of Common Stock issuable
pursuant to the Option being exercised.
As soon as practicable after receipt of proper notification of exercise and
full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws
applicable to such Shares.
6.8 TERMINATION OF EMPLOYMENT. Each Option, to the extent it has not been
previously exercised, shall terminate upon the earliest to occur of: (a) the
expiration of the Option period set forth in the Option Award Agreement; (b)
for ISOs, the expiration of three months following the Participant's Retirement
(following the Participant's Retirement, NQSOs shall terminate upon the
expiration of the Option period set forth in the Option Award Agreement); (c)
the expiration of 12 months following the Participant's death or Disability;
(d) immediately upon termination for Cause; or (e) the expiration of 90 days
following the Participant's termination of employment for any reason other than
Cause, Change in Control, death, Disability, or Retirement. Upon a termination
of employment related to a Change in Control, Options shall be treated in the
manner set forth in Article 11.
6.9 NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of
13
<PAGE> 14
descent and distribution. Further, all ISOs granted to a Participant under the
Plan shall be exercisable during his or her lifetime only by such Participant.
(b) NONQUALIFIED STOCK OPTIONS. The Committee may, in its discretion,
authorize all or a portion of NQSOs granted to a Participant to be on terms
which permit transfer by such Participant to (i) Immediate Family Members, (ii)
a trust or trusts for the exclusive benefit of such Immediate Family Members,
or (iii) a partnership in which such Immediate Family Members are the only
partners, provided that (A) there may be no consideration for any such
transfer, (B) the Award Agreement pursuant to which such Options are granted
must be approved by the Committee, and must expressly provide for
transferability in a manner consistent with this Section, and (C) subsequent
transfers of transferred Options shall be prohibited except those by will or
the laws of descent and distribution. Following transfer, any such Options
shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, provided that for purposes of this
Plan, the term "Participant" shall be deemed to refer to the transferee. The
events of termination of employment shall continue to be applied with respect
to the original Participant, following which the Options shall be exercisable
by the transferee only to the extent, and for the periods specified in this
Section 6.9. Notwithstanding the foregoing, should the Committee provide that
Options granted be transferable, the Company by such action incurs no
obligation to notify or otherwise provide notice to a transferee of early
termination of the Option. In the event of a transfer, as set forth above, the
original Participant is and will remain subject to and responsible for any
applicable withholding taxes upon the exercise of such Options.
ARTICLE 7. RESTRICTED STOCK
7.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Partici pants in such amounts as the Committee shall
determine. Without limiting the generality of the foregoing, Restricted Shares
may be granted in connection with payouts under other compensation programs of
the Company.
7.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be evidenced
by a Restricted Stock Award Agreement that shall specify the Period(s) of
Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.
7.3 TRANSFERABILITY. Except as provided in this Article 7, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated until the end of the applicable Period
of Restriction established by the Committee and specified in the Restricted
Stock Award Agreement, or upon earlier satisfaction of any other conditions, as
specified by the Committee in its sole discretion and set forth in the
Restricted Stock Award Agreement. All rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be available during his or
her lifetime only to such Participant.
14
<PAGE> 15
7.4 OTHER RESTRICTIONS. Subject to Article 8 herein, the Committee shall
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock, restrictions based upon the achievement of
specific performance objectives (Company-wide, business unit, and/or
individual), time-based restrictions on vesting following the attainment of the
performance objectives, and/or restrictions under applicable federal or state
securities laws.
At the discretion of the Committee, the Company may retain the certificates
representing Shares of Restricted Stock in the Company's possession until such
time as all conditions and/or restrictions applicable to such Shares have been
satisfied.
Except as otherwise provided in this Article 7, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.
7.5 VOTING RIGHTS. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.
7.6 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular cash dividends paid with respect to the underlying Shares
while they are so held. Such dividends may be paid currently, accrued as
contingent cash obligations, or converted into additional shares of Restricted
Stock, upon such terms as the Committee establishes.
The Committee may apply any restrictions to the dividends that the Committee
deems appropriate.
In the event that any dividend constitutes a "derivative security" or an
"equity security" pursuant to Rule 16(a) under the Exchange Act, such dividend
shall be subject to a vesting period equal to the remaining vesting period of
the Shares of Restricted Stock with respect to which the dividend is paid.
7.7 TERMINATION OF EMPLOYMENT. Upon a Participant's death, Disability, or
Retirement, all Restricted Shares shall vest immediately. Each Restricted Stock
Award Agreement shall set forth the extent to which the Participant shall have
the right to retain unvested Restricted Shares following termination of the
Participant's employment with the Company in all other circumstances. Such
provisions shall be determined in the sole discretion of the Committee, shall
be included in the Award Agreement entered into with each Participant, need not
be uniform among all Shares of Restricted Stock issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of
employment.
15
<PAGE> 16
ARTICLE 8. BENEFICIARY DESIGNATION
A Participant under the Plan may make written designation of a beneficiary on
forms prescribed by and filed with the Corporate Secretary of the Company. Such
beneficiary, or if no such designation of any beneficiary has been made, the
legal representative of such Participant or such other person entitled thereto
as determined by a court of competent jurisdiction, may exercise, in accordance
with and subject to the provisions of Article 6, any unterminated and unexpired
Option granted to such Participant to the same extent that the Participant
himself could have exercised such Option were he alive or able; provided,
however, that no Option granted under the Plan shall be exercisable for more
Shares than the Participant could have purchased thereunder on the date his
employment by, or other relationship with, the Company and its Subsidiaries was
terminated.
ARTICLE 9. DEFERRALS
The Committee may permit or require a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise
be due to such Participant by virtue of the exercise of an Option, the lapse or
waiver of restrictions with respect to Restricted Stock, or the satisfaction of
any requirements or objectives with respect to performance measures, if any. If
any such deferral election is required or permitted, the Committee shall, in
its sole discretion, establish rules and procedures for such payment deferrals.
ARTICLE 10. RIGHTS OF EMPLOYEES
10.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any time,
nor confer upon any Participant any right to continue in the employ of the
Company.
10.2 PARTICIPATION. No Employee shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
ARTICLE 11. CHANGE IN CONTROL
11.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges:
(a) Any and all Options granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout their entire term; and
16
<PAGE> 17
(b) Any restriction periods and restrictions imposed on Shares of
Restricted Stock shall lapse; provided, however, that the degree of vesting
associated with Restricted Stock which has been conditioned upon the
achievement of performance conditions pursuant to Section 7.4 herein shall be
determined in the manner set forth in Section 7.7 herein.
11.2 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL PROVISIONS.
Notwithstanding any other provision of this Plan or any Award Agreement
provision, the provisions of this Article 11 may not be terminated, amended, or
modified on or after the date of a Change in Control to affect adversely any
Award theretofore granted under the Plan without the prior written consent of
the Participant with respect to said Participant's outstanding Awards.
ARTICLE 12. AMENDMENT, MODIFICATION, AND TERMINATION
12.1 AMENDMENT, MODIFICATION, AND TERMINATION. Subject to Section 11.2 herein,
the Board or the Committee may at any time and from time to time, alter, amend,
suspend or terminate the Plan in whole or in part, except that, without
approval of the stockholders of the Company, no such revision or amendment
shall increase the number of shares available for grants of ISOs under the Plan
or alter the class of participants in the Plan.
Notwithstanding the foregoing, neither the Company nor the Board or Committee
on its behalf may cancel outstanding Awards and issue substitute Awards in
replacement thereof or reduce the exercise price of any outstanding Options
without stockholder approval.
12.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual
or nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
12.3 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification of
the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.
ARTICLE 13. WITHHOLDING
13.1 TAX WITHHOLDING. The Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and
17
<PAGE> 18
local taxes, domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of this Plan.
13.2 SHARE WITHHOLDING. To the extent provided by the Committee, a Participant
may elect to have any distribution to be made under this 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.
ARTICLE 14. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and defend it on his
or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Certificate of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
ARTICLE 15. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase, of
all or substantially all of the business and/or assets of the Company, or a
merger, consolidation or otherwise.
ARTICLE 16. LEGAL CONSTRUCTION
16.1 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular; and, the singular shall include the plural.
16.2 SEVERABILITY. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.
18
<PAGE> 19
16.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
16.4 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the Exchange Act. To the extent any provision of the
Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.
16.5 GOVERNING LAW. To the extent not preempted by federal law, the Plan, and
all agreements hereunder, shall be construed in accordance with and governed by
the laws of the state of Delaware.
19
<PAGE> 1
EXHIBIT 5
[HASKELL SLAUGHTER & YOUNG, L.L.C. LETTERHEAD]
October 24, 1997
MedPartners, Inc.
3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244-2331
RE: REGISTRATION STATEMENT ON FORM S-8
MEDPARTNERS, INC. 1997 LONG TERM INCENTIVE CORPORATION PLAN
Gentlemen:
We have served as counsel for MedPartners, Inc., a corporation organized
and existing under the laws of the State of Delaware (the "Company"), in
connection with the registration under the Securities Act of 1933, as amended,
of an aggregate of 6,725,000 shares of the Company's authorized Common Stock,
par value $0.001 per share (the "Shares") to be issued to participants in the
Company's 1997 Long Term 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 for 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
<PAGE> 2
MedPartners, Inc.
June 27, 1997
Page 2
issuance of the Shares and the authorization and adoption of the Agreement as
we have deemed necessary and appropriate.
Based upon the foregoing, and having regard for such legal
consideration 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 Agreement, the Shares will be legally
issued, fully paid and nonassessable.
We do hereby consent to any references to our firm 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/ Donald T. Locke
--------------------------
Donald T. Locke
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the MedPartners, Inc. 1997 Long Term Incentive
Compensation Plan of our reports dated February 3, 1997, with respect to the
consolidated financial statements of MedPartners, Inc., for the year ended
December 31, 1996, included in its Annual Report on Form 10-K/A for the year
ended December 31, 1996, and our report dated August 25, 1997 with respect to
the consolidated financial statement of MedPartners, Inc. for the year ended
December 31, 1996, included in its Current Report on Form 8-K dated August 27,
1997, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Birmingham, Alabama
October 27, 1997
