<PAGE> 1
As filed with the Securities and Exchange Commission on June 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. 1994 STOCK INCENTIVE PLAN
AND
MEDPARTNERS, INC.
1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Full Title of the Plans)
LARRY R. HOUSE
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
MEDPARTNERS, INC.
3000 GALLERIA TOWER, SUITE 1000
BIRMINGHAM, ALABAMA 35244
(Name and Address of Agent for Service)
(205) 733-8996
(Telephone Number, including Area Code, of Agent for Service)
The Commission is requested to send copies of all notices
and other communications to:
ROBERT E. LEE GARNER, ESQ.
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 1,962,051 shares(2) $12.454 (3) $24,435,383.15 (3) $ 7,404.67
share (including Common Stock
Purchase Rights)(1)
Common Stock, par value $.001 per 47,200 shares(4) $12.672 (5) $ 598,118.40 (5) $ 181.25
share (including Common Stock
Purchase Rights)(1)
Common Stock, par value $.001
per share (including Common
Stock Purchase Rights)(1) 470,600 shares(6) $21.375 (7) $10,059,075 (7) $ 3,048.21
Common Stock, par value $.001
per share (including Common Stock
Purchase Rights) (1) 188,800 shares(8) $21.375 (7) $ 4,035,600 (7) $ 1,222.91
---------------- ------- -------------- ----------
Total 2,668,651 shares -- $39,128,176.55 $11,857.04
===================================================================================================================================
</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
outstanding stock options under the MedPartners, Inc. 1994 Stock
Incentive Plan (the "MedPartners Plan"), formerly the InPhyNet
Medical Management Inc. 1994 Stock Incentive Plan, which was assumed by
MedPartners under the terms of the Agreement and Plan of Merger in
connection with the merger of Seabird Merger Corporation with and into
InPhyNet Medical Management Inc. ("InPhyNet").
(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 weighted average exercise price of the outstanding stock
options under the MedPartners Plan.
(4) Maximum number of shares which may be issued by MedPartners pursuant to
outstanding stock options under the MedPartners, Inc. 1994 Non-Employee
Director Stock Option Plan, formerly the InPhyNet Medical Management,
Inc. 1994 Non-employee Director Stock Option Plan (the "MedPartners
Non-Employee Director Plan"), which was assumed by MedPartners under
the terms of the Agreement and Plan of Merger in connection with the
merger of Seabird Merger Corporation with and into InPhyNet.
(5) Determined pursuant to Rule 457 (h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee and represents
the weighted average exercise price of the outstanding stock options under
the MedPartners Non-Employee Director Plan.
(6) Maximum number of shares which may be issued by MedPartners pursuant to
stock options available for future grant under the MedPartners Plan.
(7) Determined pursuant to Rule 457 (h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee and represents
the last sale price of the Common Stock of MedPartners as reported on The
New York Stock Exchange Composite Transaction Tape on June 24, 1997.
(8) Maximum number of shares which may be issued by MedPartners pursuant to
stock options available for future grant under the MedPartners
Non-Employee Director Plan.
<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 year ended
December 31, 1996.
(b) The Company's Quarterly Report on Form 10-Q filed for the
quarter ended March 31, 1997.
(c) The Company's Current Report on Form 8-K filed January 27,
1997 (reporting the entering into of the Plan of Merger with
InPhyNet and setting forth certain pro forma financial
information for the combined companies).
(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.
There are also hereby incorporated by reference into this Registration
Statement and made a part hereof the following documents filed by InPhyNet
Medical Management Inc. ("InPhyNet") with the Commission (File No. 0-24336):
(a) InPhyNet's Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1996.
(b) InPhyNet's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997.
(c) InPhyNet's Current Report on Form 8-K filed on January 23,
1997 (reporting the entering into of the Plan of Merger with
MedPartners).
(d) InPhyNet's Current Report on Form 8-K filed on May 22, 1997
(relating to an adjustment of certain merger terms).
(e) InPhyNet's Registration Statement on Form 8-A dated March 6,
1996.
All documents subsequently filed by the Company or InPhyNet 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 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 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. Stockholders' Rights Plan, filed as Exhibit (4)-1 to the
Company's Registration Statement on Form S-4 (Registration No. 333-00774)
is hereby incorporated by reference.
(4)-2 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 MedPartners, Inc. 1994 Stock Incentive Plan
(4)-5 MedPartners, Inc. 1994 Non-Employee Director Stock
Option 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 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
II-3
<PAGE> 5
with the Commission pursuant to Rule 424(b) under the
Securities Act if, in the aggregate, the changes in amount and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement.
provided, however, that paragraphs (a)(1)(i) and (ii) do not apply if
the registration statement is on Form S-3, S-8, or F-3, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in period reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability
under the Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions or, otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE> 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 June 27, 1997.
MEDPARTNERS, INC.
By /s/ 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>
/s/ Larry R. House Chairman of the Board, President June 27, 1997
--------------------------------- and Chief Executive Officer
Larry R. House (Principal Executive Officer)
/s/ Harold O. Knight, Jr. Executive Vice President and June 27, 1997
--------------------------------- Chief Financial Officer
Harold O. Knight, Jr. (Principal Financing and
Accounting Officer)
/s/ Richard M. Scrushy Director June 27, 1997
---------------------------------
Richard M. Scrushy
/s/ Larry D. Striplin, Jr. Director June 27, 1997
---------------------------------
Larry D. Striplin, Jr.
</TABLE>
II-5
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ Charles W. Newhall III Director June 27, 1997
----------------------------------
/s/ Charles W. Newhall III
/s/ Ted H. McCourtney, Jr. Director June 27, 1997
----------------------------------
/s/ Ted H. McCourtney, Jr.
/s/ Walter T. Mullikin, M.D. Director June 27, 1997
----------------------------------
/s/ Walter T. Mullikin, M.D.
/s/ John S. McDonald, J.D. Director June 27, 1997
----------------------------------
/s/ John S. McDonald, J.D.
/s/ Richard J. Kramer Director June 27, 1997
----------------------------------
/s/ Richard J. Kramer
/s/ Rosalio J. Lopez, M.D. Director June 27, 1997
----------------------------------
/s/ Rosalio J. Lopez, M.D.
/s/ C.A. Lance Piccolo Director June 27, 1997
----------------------------------
/s/ C.A. Lance Piccolo
/s/ Rodger L. Headrick Director June 27, 1997
----------------------------------
/s/ Rodger L. Headrick
/s/ Harry M. Jansen Kraemer, Jr. Director June 27, 1997
----------------------------------
/s/ Harry M. Jansen Kraemer, Jr.
</TABLE>
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 as
Exhibit (4)-1 to the Company's Registration Statement on Form
S-4 (Registration No. 333-00774) is hereby incorporated by
reference.
(4)-2 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 MedPartners, Inc. 1994 Stock Incentive Plan.
(4)-5 MedPartners, Inc. 1994 Non-Employee Director
Stock Option 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.
1994 STOCK INCENTIVE PLAN
1. PURPOSE.
The purpose of the 1994 Stock Incentive Plan ("Plan") of MedPartners,
Inc. ("Company") is to provide a means through which the Company and its
Subsidiaries and Affiliates may attract able persons to enter and remain in the
employ of the Company and its Subsidiaries and Affiliates, and to provide a
means whereby those key persons upon whom the responsibilities of the successful
administration and management of the Company rest, and whose present and
potential contributions to the welfare of the Company are of importance, can
acquire and maintain stock ownership, thereby strengthening their commitment to
the welfare of the Company and promoting an identity of interest between
stockholders and these key persons.
A further purpose of the Plan is to provide such key persons with
additional incentive and reward opportunities designed to enhance the profitable
growth of the Company. So that the appropriate incentive can be provided, the
Plan provides for granting Incentive Stock Options, Nonqualified Stock Options,
Restricted Stock Awards, or any combination of the foregoing.
2. DEFINITIONS.
The following definitions shall be applicable throughout the Plan.
"Affiliate" means any affiliate of the Company within the meaning of 17
CFR ss. 230.405.
"Award" means, individually or collectively, any Incentive Stock
Option, Nonqualified Stock Option or Restricted Stock Award.
"Board" means the Board of Directors of the Company.
"Cause" means the Company, a Subsidiary or an Affiliate having cause to
terminate a Participant's employment under any existing employment agreement
between the Participant and the Company, a Subsidiary or an Affiliate or, in the
absence of such an employment agreement, upon (i) the determination by the
Committee that the Participant has ceased to perform his duties to the Company,
or a Subsidiary or an Affiliate (other than as a result of his incapacity due to
physical or mental illness or injury), which failure amounts to an intentional
and extended neglect of his duties to such party, (ii) the Committee's
determination that the Participant has engaged or is about to engage in conduct
materially injurious to the Company, or a Subsidiary or an Affiliate, or (iii)
the Participant having been convicted of a felony.
"Change in Control" shall, unless the Board otherwise directs by
resolution adopted prior thereto, be deemed to occur if (i) any "person" (as
that term is used in Sections 13 and 14(d)(2)
1
<PAGE> 2
of the Securities and Exchange Act of 1934 ("Exchange Act")) is or becomes the
beneficial owner (as that term is used in Section 13(d) of the Exchange Act"),
directly or indirectly, of 25% or more of the voting Stock or (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a majority
thereof, unless the election or the nomination for election by the Company's
stockholders of each new director was approved by a vote of at least
three-quarters of the directors then still in office who were directors at the
beginning of the period. Any merger, consolidation or corporate reorganization
in which the owners of the Company's capital stock entitled to vote in the
election of directors ("Voting Stock") prior to said combination, own 50% or
more of the resulting entity's Voting Stock shall not, by itself, be considered
a Change in Control.
"Code" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any regulations under such section.
"Committee" means the Compensation Committee of the Board or such other
committee as the Board may appoint to administer the Plan.
"Common Stock" means the common stock, par value $.001 per share, of
the Company.
"Company" means MedPartners, Inc.
"Date of Grant" means the date on which the granting of an Award is
authorized or such other date as may be specified in such authorization.
"Disability" means the complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which a
Participant was employed when such disability commenced or, if the Participant
was retired when such disability commenced, the inability to engage in any
substantial gainful activity, as determined by the Committee based upon medical
evidence acceptable to it.
"Eligible Employee" means any person regularly employed by the Company
or a Subsidiary or Affiliate on a full-time salaried basis, and any independent
contractor of the Com pany or a Subsidiary or Affiliate, who satisfies all of
the requirements of Section 6.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" on a given date means (i) the last reported sale
price for the Stock on that date (or, if there were no such sales on that date,
on the next most recent date on which there were such sales) as reported on the
Composite Tape if the Stock is listed on The New York Stock Exchange ("NYSE") or
on the National Association of Securities Dealers National Market System
("NMS"), (ii) if the Stock is not then issued on the NYSE or the NMS but sales
of the Stock are reported by the National Association of Securities Dealers
Automatic Quotation System
2
<PAGE> 3
or any success thereto ("AQS"), the average between the closing bid and asked
price quotations for the Stock on that date (or if none on that date, on the
next most recent date) as reported on the AQS, or (iii) if the Stock is not then
issued on the NYSE or the NMS, and sales of the Stock are not reported by the
AQS, the amount determined by the Board to be the fair market value based upon a
good faith attempt to value the Stock accurately and computed in accordance with
applicable regulations of the Internal Revenue Service.
"Holder" means a Participant who has been granted an Option or a
Restricted Stock Award.
"Incentive Stock Option" means an Option granted by the Committee to a
Participant under the Plan which is designated by the Committee as an Incentive
Stock Option pursuant to Section 422 of the Code.
"Non-Employee Director" means a Director of the Company who (i) is not
currently an officer or employee of the Company or any Subsidiary of the
Company; (ii) does not directly or indirectly receive any compensation from the
Company or any subsidiary for services rendered as a consultant or in any other
non-director capacity that would exceed the $60,000 threshhold for which
disclosure would be required under Item 404(a) of Regulation S-K; (iii) does not
possess an interest in any other transaction for which disclosure would be
required under Item 404(a) of Regulation S-K; and (iv) is not engaged in a
business relationship with the Company which would be disclosable under Item
404(b) of Regulation S-K.
"Nonqualified Stock Option" means an Option granted by the Committee to
a Participant under the Plan which is not designated by the Committee as an
Incentive Stock Option.
"Normal Termination" means termination:
(i) with respect to the Company or a Subsidiary, at
retirement (excluding early retirement) pursuant to the Company
retirement plan then in effect;
(ii) with respect to an Affiliate, at retirement
(excluding early retire ment) pursuant to the retirement plan of such
Affiliate then in effect or, if the Affiliate has no such plan, at
retirement upon or after the attainment of age 65;
(iii) on account of Disability;
(iv) with the written approval of the Committee; or
(v) by the Company, a Subsidiary or Affiliate without
Cause.
"Option" means an Award granted under Section 7 of the Plan.
3
<PAGE> 4
"Option Period" means the period described in Section 7(c).
"Participant" means an Eligible Employee who has been selected to
participate in the Plan and to receive an Award pursuant to Section 6.
"Plan" means the MedPartners, Inc. 1994 Stock Incentive Plan.
"Reporting Company" means the Company.
"Restricted Period" means, with respect to any share of Restricted
Stock, the period of time determined by the Committee during which such share of
Restricted Stock is subject to the restrictions set forth in Section 8.
"Restricted Stock" means shares of Common Stock issued or transferred
to a Participant subject to the restrictions set forth in Section 8 and any new,
additional or different securities a Participant may become entitled to receive
as a result of adjustments made pursuant to Section 10.
"Restricted Stock Award" means an Award granted under Section 8 of the
Plan.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock" means the Common Stock or such other authorized shares of stock
the Company as the Committee may from time to time authorize for use under the
Plan.
"Subsidiary" means any subsidiary of the Company as defined in Section
424(f) of the Code.
3. EFFECTIVE DATE, DURATION AND STOCKHOLDER APPROVAL.
The Plan became effective on May 7, 1994, and no further Awards
may be made after the expiration of 10 years therefrom.
The Plan shall continue in effect until all matters relating to the
payment of Awards and administration of the Plan have been settled.
4. ADMINISTRATION.
The Committee shall administer the Plan. Each member of the Committee
shall, at the time he takes any action with respect to an Award under the Plan,
be a Non-Employee Director.
4
<PAGE> 5
The acts of a majority of the members present at any meeting at which a
quorum is present or acts approved in writing by a majority of the Committee
shall be deemed the acts of the Committee.
Subject to the provisions of the Plan, the Committee shall have
exclusive power to:
(a) Select the Eligible Employees to participate in the Plan;
(b) Determine the nature and extent of the Awards to be made
to each Participant;
(c) Determine the time or times when Awards will be made;
(d) Determine the conditions to which the payment of Awards
may be subject;
(e) Prescribe the form or forms evidencing Awards; and
(f) Cause records to be established in which there shall be
entered, from time to time, as Awards are made to Participants, the
date of each Award, the number of Incentive Stock Options, Nonqualified
Stock Options, and shares of Restricted Stock awarded by the Committee
to each Participant, the expiration date, and the duration of any
applicable Restricted Period.
The Committee shall have the authority, subject to the provisions of
the Plan, to establish, adopt, or revise such rules and regulations and to make
all such determinations relating to the Plan as it may deem necessary or
advisable for the administration of the Plan. The Committee's inter pretation of
the Plan or any Awards granted pursuant thereto and all decisions and
determinations by the Committee with respect to the Plan shall be final,
binding, and conclusive on all parties unless otherwise determined by the Board.
5. GRANT OF OPTIONS AND RESTRICTED STOCK AWARDS; SHARES SUBJECT TO THE
PLAN.
The Committee may, from time to time, grant Awards of Options and/or
Restricted Stock to one or more Participants; provided, however, that:
(a) Subject to Section 10, the aggregate number of shares of
Stock made subject to Awards may not exceed 2,950,000;
(b) Such shares shall be deemed to have been used in payment
of Awards whether they are actually delivered or the Fair Market Value
equivalent of such shares is paid in cash. In the event any Option or
Restricted Stock shall be
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surrendered, terminate, expire, or be forfeited, the number of shares
of Stock no longer subject thereto shall thereupon be released and
shall thereafter be available for new Awards under the Plan to the
fullest extent permitted by Rule 16b-3 under the Exchange Act (if
applicable at the time);
(c) Stock delivered by the Company in settlement of Awards
under the Plan may be authorized and unissued Stock or Stock held in
the treasury of the Company or may be purchased on the open market or
by private purchase at prices no higher than the Fair Market Value at
the time of purchase; and
6. ELIGIBILITY.
Participants shall be limited to officers, key employees and
independent contractors of the Company and its Subsidiaries and Affiliates who
have received written notification from the Committee or from a person
designated by the Committee, that they have been selected to participate in the
Plan.
7. STOCK OPTIONS.
One or more Incentive Stock Options or Nonqualified Stock Options may
be granted to any Participant; provided, however, that Incentive Stock Options
may be granted only to employees of the Company or a Subsidiary. Each Option so
granted shall be subject to the following conditions:
(a) Option Price. The Option price ("Option Price") per share of Stock
shall be set by the Committee at the time of grant but shall not be less than
(i) in the case of an Incentive Stock Option, the Fair Market Value of a share
of Stock at the Date of Grant, and (ii) in the case of a Nonqualified Stock
Option, the par value per share of Stock.
(b) Manner of Exercise and Form of Payment. Options which have become
exercisable may be exercised by delivery of written notice of exercise to the
Committee accompanied by payment of the Option Price. The Option Price shall be
payable in cash and/or shares of Stock valued at the Fair Market Value at the
time the Option is exercised, or, in the discretion of the Committee, either (i)
in other property having a fair market value on the date of exercise equal to
the Option Price, or (ii) by delivering to the Committee a copy of irrevocable
instructions to a stockbroker to deliver promptly to the Company an amount of
sale or loan proceeds sufficient to pay the Option Price.
(c) Other Terms and Conditions. If the Holder has not died or
terminated, the Option shall become exercisable in such manner and within such
period or periods ("Option Period"), not to exceed 10 years from its Date of
Grant, as set forth in the Stock Option Agreement to be entered into in
connection therewith:
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<PAGE> 7
(i) Each Option shall lapse in the following situations:
-- ten years after it is granted;
-- three months after Normal Termination,
except as otherwise provided by the Committee, or
-- any earlier time set forth in the Stock
Option Agreement.
(ii) If the Holder terminates otherwise than by Normal
Termination or death, the Option shall lapse at the time of
termination.
(iii) If the Holder dies within the Option Period or within
3 months after Normal Termination (or such other period as may have
been established by the Committee), the Option shall lapse unless it is
exercised within the Option Period and in no event later than 12 months
after the date of Holder's death by the Holder's legal representative
or representatives or by the person or persons entitled to do so under
the Holder's last will and testament or, if the Holder shall fail to
make testamentary disposition of such Option or shall die intestate, by
the person entitled to receive said Option under the applicable laws of
descent and distribution.
(d) Stock Option Agreement. Each Option granted under the Plan shall be
evidenced by a "Stock Option Agreement" between the Company and the Holder of
the Option containing such provisions as may be determined by the Committee, but
shall be subject to the following terms and conditions:
(i) Each Option or portion thereof that is exercisable
shall be exercisable for the full amount or for any part thereof,
except as otherwise determined by the terms of the Stock Option
Agreement.
(ii) Each share of Stock purchased through the exercise of
an Option shall be paid for in full at the time of the exercise. Each
Option shall cease to be exercisable, as to any share of Stock, when
the Holder purchases the share or when the Option lapses.
(iii) Options shall not be transferable by the Holder
except by will or the laws of descent and distribution and shall be
exercisable during the Holder's lifetime only by him.
(iv) Each Option shall become exercisable by the Holder in
accordance with the vesting schedule established by the Committee for
the Award.
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<PAGE> 8
(v) Each Stock Option Agreement may contain an agreement
that, upon demand by the Committee for such a representation, the
Holder shall deliver to the Committee at the time of any exercise of an
Option a written representation that the shares to be acquired upon
such exercise are to be acquired for investment and not for resale or
with a view to the distribution thereof. Upon such demand, delivery of
such representation prior to the delivery of any shares issued upon
exercise of an Option shall be a condition precedent to the right of
the Holder or such other person to purchase any shares. In the event
certificates for Stock are delivered under the Plan with respect to
which such investment representation has been obtained, the Committee
may cause a legend or legends to be placed on such certificates to make
appropriate reference to such representation and to restrict transfers
in the absence of compliance with applicable federal or state
securities laws.
(e) Grants to 10% Holders of Company Voting Stock. Notwithstanding
Section 7(a), if an Incentive Stock Option is granted to a Holder who owns stock
representing more than ten percent of the voting power of all classes of stock
of the Company or of the Company and its Sub sidiaries, the period specified in
the Stock Option Agreement for which the Option thereunder is granted and at the
end of which such Option shall expire shall not exceed five years from the Date
of Grant of such Option and the Option Price shall be at least 110 percent of
the Fair Market Value (on the Date of Grant) of the Stock subject to the Option.
(f) Limitation. To the extent the aggregate Fair Market Value (as
determined as of the Date of Grant) of Stock for which Incentive Stock Options
are exercisable for the first time by any Participant during any calendar year
(under all plans of the Company and its Subsidiaries) exceeds $100,000, such
excess Incentive Stock Options shall be treated as Nonqualified Stock Options.
(g) Voluntary Surrender. The Committee may permit the voluntary
surrender of all or any portion of any Nonqualified Stock Option granted under
the Plan to be conditioned upon the granting to the Holder of a new Option for
the same or a different number of shares as the Option surrendered or require
such voluntary surrender as a condition precedent to a grant of a new Option to
such Participant. Such new Option shall be exercisable at the Option Price,
during the exercise period, and in accordance with any other terms or
conditions specified by the Committee at the time the new Option is granted,
all determined in accordance with the provisions of the Plan without regard to
the Option Price, exercise period, or any other terms and conditions of the
Nonqualified Stock Option surrendered.
(h) Order of Exercise. Options granted under the Plan may be exercised
in any order, regardless of the Date of Grant or the existence of any other
outstanding Option.
(i) Notice of Disposition. Participants shall give prompt notice to the
Company of any disposition of Stock acquired upon exercise of an Incentive Stock
Option if such disposition occurs
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<PAGE> 9
within either two years after the Date of Grant of such Option and/or one year
after the receipt of such Stock by the Holder.
8. RESTRICTED STOCK AWARDS.
(a) Award of Restricted Stock.
(i) The Committee shall have the authority (1) to grant
Restricted Stock, (2) to issue or transfer Restricted Stock to Participants, and
(3) to establish terms, conditions and restrictions applicable to such
Restricted Stock, including the Restricted Period, which may differ with respect
to each grantee, the time or times at which Restricted Stock shall be granted or
become vested and the number of shares or units to be covered by each grant.
(ii) The Holder of a Restricted Stock Award shall execute
and deliver to the Secretary of the Company an agreement with respect to
Restricted Stock and escrow agreement satisfactory to the Committee and the
appropriate blank stock powers with respect to the Restricted Stock covered by
such agreements. If a Participant shall fail to execute the agreement, escrow
agreement and stock powers within such period, the Award shall be null and void.
Subject to the restrictions set forth in Section 8(b), the Holder shall
generally have the rights and privileges of a stockholder as to such Restricted
Stock, including the right to vote such Restricted Stock. At the discretion of
the Committee, cash and stock dividends with respect to the Restricted Stock may
be either currently paid or withheld by the Company for the Holder's account,
and interest may be paid on the amount of cash dividends withheld at a rate and
subject to such terms as determined by the Committee. Cash or stock dividends so
withheld by the Committee shall not be subject to forfeiture.
(iii) In the case of a Restricted Stock Award, the
Committee shall then cause stock certificates registered in the name of the
Holder to be issued and deposited together with the stock powers with an escrow
agent to be designated by the Committee. The Committee shall cause the escrow
agent to issue to the Holder a receipt evidencing any stock certificate held by
it regis tered in the name of the Holder.
(b) Restrictions.
(i) Restricted Stock awarded to a Participant shall be
subject to the following restrictions until the expiration of the Restricted
Period: (1) the Holder shall not be entitled to delivery of the stock
certificate; (2) the shares shall be subject to the restrictions on
transferability set forth in the grant; (3) the shares shall be subject to
forfeiture to the extent provided in subpara graph (d) and, to the extent such
shares are forfeited, the stock certificates shall be returned to the Company,
and all rights of the Holder to such shares and as a stockholder shall terminate
without further obligation on the part of the Company.
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<PAGE> 10
(ii) The Committee shall have the authority to remove any or all of the
restrictions on the Restricted Stock whenever it may determine that, by reasons
of changes in applicable law or other changes in circumstances arising after
the date of the Restricted Stock Award such action is appropriate.
(c) Restricted Period. The Restricted Period of Restricted Stock shall
commence on the Date of Grant and shall expire from time to time as to that part
of the Restricted Stock indicated in a schedule established by the Committee in
the Incentive Plan Agreement.
(d) Forfeiture Provisions. In the event a Holder terminates employment
during a Restricted Period, that portion of the Award with respect to which
restrictions have not expired ("Non-Vested Portion") shall be treated as
follows:
(i) Resignation or discharge: The Non-Vested Portion of
the Award shall be completely forfeited.
(ii) Normal Termination: The Non-Vested Portion of the
Award shall be prorated for service during the Restricted Period and
shall be received as soon as practicable following termination.
(iii) Death: The Non-Vested Portion of the Award shall be
prorated for service during the Restricted Period and paid to the
Participant's beneficiary as soon as practicable following death.
(e) Delivery of Restricted Stock. Upon the expiration of the Restricted
Period with respect to any shares of Stock covered by a Restricted Stock Award,
a stock certificate evidencing the shares of Restricted Stock which have not
then been forfeited and with respect to which the Restricted Period has expired
(to the nearest full share) shall be delivered without charge to the Holder, or
his beneficiary, free of all restrictions under the Plan.
(f) SEC Restrictions. Each certificate representing Restricted Stock
awarded under the Plan shall bear the following legend:
"Transfer of this certificate and the shares represented
hereby is restricted pursuant to the terms of a Restricted Stock
Agreement, dated as of __________, between MedPartners, Inc. and
__________. A copy of such Agreement is on file at the offices of the
Company in Birmingham, Alabama."
Stop transfer orders shall be entered with the Company's transfer agent and
registrar against the transfer of legend securities except in compliance with
the Securities Act.
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<PAGE> 11
9. GENERAL.
(a) Additional Provisions of an Award. The award of any benefit under
the Plan may also be subject to such other provisions (whether or not applicable
to the benefit awarded to any other Participant) as the Committee determines
appropriate including, without limitation, provi sions to assist the Participant
in financing the purchase of Common Stock through the exercise of Options,
provisions for the forfeiture of or restrictions on resale or other disposition
of shares acquired under any form of benefit, provisions giving the Company the
right to repurchase shares acquired under any form of benefit in the event the
Participant elects to dispose of such shares, and provisions to comply with
Federal and state securities laws and Federal and state income tax withholding
requirements.
(b) Privileges of Stock Ownership. Except as otherwise specifically
provided in the Plan, no person shall be entitled to the privileges of stock
ownership in respect of shares of Stock which are subject to Options or
Restricted Stock Awards, hereunder until such shares have been issued to that
person upon exercise of an Option according to its terms or upon sale or grant
of those shares in accordance with a Restricted Stock Award.
(c) Government and Other Regulations. The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by governmental agencies as
may be required. The Company shall be under no obligation to register under the
Securities Act any of the shares of Stock paid under the Plan. If the shares
paid under the Plan may in certain circumstances be exempt from registration
under the Securities Act, the Company may restrict the transfer of such shares
in such manner as it deems advisable to ensure the availability of any such
exemption.
(d) Tax Withholding. Notwithstanding any other provision of the Plan,
the Company or a Subsidiary or Affiliate, as appropriate, shall have the right
to deduct from all Awards, to the extent paid in cash, all federal, state or
local taxes as required by law to be withheld with respect to such Awards and,
in the case of Awards paid in Stock, the Holder or other person receiving such
Stock may be required to pay to the Company or a Subsidiary or Affiliate, as
appropriate prior to delivery of such Stock, the amount of any such taxes which
the Company or Subsidiary is required to withhold, if any, with respect to such
Stock. Subject in particular cases to the disapproval of the Committee, the
Company may accept shares of Stock of equivalent Fair Market Value in payment of
such withholding tax obligations if the Holder of the Award elects to make
payment in such manner at least six months prior to the date such tax obligation
is determined.
(e) Claim to Awards and Employment Rights. No employee or other person
shall have any claim or right to be granted an Award under the Plan nor, having
been selected for the grant of an Award, to be selected for a grant of any other
Award. Neither this Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained in the employ of the Company or
a Subsidiary or Affiliate.
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<PAGE> 12
(f) Designation and Change of Beneficiary. Each Participant shall file
with the Committee a written designation of one or more persons as the
beneficiary who shall be entitled to receive the amounts payable with respect to
an Award of Restricted Stock, if any, due under the Plan upon his death. A
Participant may, from time to time, revoke or change his beneficiary designation
without the consent of any prior beneficiary by filing a new designation with
the Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Participant's death, and in no event shall it be effective as of a date prior to
such receipt.
(g) Payments to Persons Other Than Participants. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for his affairs because of illness or accident, or is a minor, or has died,
then any payment due to such person or his estate (unless a prior claim therefor
has been made by a duly appointed legal representative), may, if the Committee
so directs the Company, be paid to his spouse, child, relative, an institution
main taining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Company therefor.
(h) No Liability of Committee Members. No member of the Committee shall
be personally liable by reason of any contract or other instrument executed by
such member or on his behalf in his capacity as a member of the Committee nor
for any mistake of judgment made in good faith, and the Company shall indemnify
and hold harmless each member of the Committee and each other employee, officer
or director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated,
against any cost or expense (including counsel fees) or liability (including any
sum paid in settlement of a claim) arising out of any act or omission to act in
connection with the Plan unless arising out of such person's own fraud or bad
faith; provided, however, that approval of the Board shall be required for the
payment of any amount in settlement of a claim against any such person. 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.
(i) Governing Law. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Delaware without reference to
the principles of conflicts of law thereof.
(j) Funding. Except as provided under Section 8, no provision of the
Plan shall require the Company, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any assets, nor
shall the Company maintain separate bank accounts, books, records or other
evidence of the existence of a segregated or separately maintained or
administered fund
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for such purposes. Holders shall have no rights under the Plan other than as
unsecured general creditors of the Company, except that insofar as they may
become entitled to payment of additional compensation by performance of
services, they shall have the same rights as other employees under general law.
(k) Nontransferability. A person's rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or transferred or
otherwise disposed of, mortgaged, pledged or encumbered except, in the event of
a Holder's death, to a designated bene ficiary to the extent permitted by the
Plan, or in the absence of such designation, by will or the laws of descent and
distribution.
(l) Reliance on Reports. Each member of the Committee and each member
of the Board shall be fully justified in relying, acting or failing to act, and
shall not be liable for having so relied, acted or failed to act in good faith,
upon any report made by the independent public accountant of the Company and its
Subsidiaries or Affiliates and upon any other information furnished in
connection with the Plan by any person or persons other than himself.
(m) Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary or Affiliate except as otherwise specifically provided.
(n) Expenses. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries and Affiliates.
(o) Pronouns. Masculine pronouns and other words of masculine gender
shall refer to both men and women.
(p) Titles and Headings. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings shall control.
10. CHANGES IN CAPITAL STRUCTURE.
Options and Restricted Stock Awards and any agreements evidencing such
Awards shall be subject to adjustment or substitution, as determined by the
Committee in its sole discretion, as to the number, price or kind of a share of
Stock or other consideration subject to such Awards or as otherwise determined
by the Committee to be equitable (i) in the event of changes in the outstanding
Stock or in the capital structure of the Company by reason of stock dividends,
stock splits, recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges, or other relevant changes in capitalization occurring
after the Date of Grant of any such Award or (ii) in the event of any change in
applicable laws or
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<PAGE> 14
any change in circumstances which results in or would result in any substantial
dilution or enlargement of the rights granted to, or available for, Participants
in the Plan, or which otherwise warrants equitable adjustment because it
interferes with the intended operation of the Plan. In addition, in the event of
any such adjustments or substitution, the aggregate number of shares of Stock
available under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any adjustment in Incentive Stock Options
under this Section 10 shall be made only to the extent not constituting a
"modification" within the meaning of Section 424(h)(3) of the Code, and any
adjustments under this Section 10 shall be made in a manner which does not
adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act. The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.
11. EFFECT OF CHANGE IN CONTROL.
(a) In the event of a Change in Control, notwithstanding any vesting
schedule provided for hereunder or by the Committee with respect to an Award of
Options or Restricted Stock, such Option shall become immediately exercisable
with respect to 100 percent of the shares subject to such Option and the
Restricted Period shall expire immediately with respect to 100 percent of the
Restricted Stock subject to Restrictions; provided, however, to the extent that
so accelerating the time an Incentive Stock Option may first be exercised would
cause the limitation provided in Section 7(f) to be exceeded, such Options shall
instead first become exercisable in so many of the next following years as is
necessary to comply with such limitation.
(b) The obligations of the Company under the Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor
corporation or organization succeeding to substantially all of the assets and
business of the Company. The Company agrees that it will make appropriate
provisions for the preservation of Participant's rights under the Plan in any
agreement or plan which it may enter into or adopt to effect any such merger,
consolidation, reorganization or transfer of assets.
12. NONEXCLUSIVITY OF THE PLAN.
Neither the adoption of this Plan by the Board nor the submission of
this Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under this Plan, and such arrangements
may be either applicable generally or only in specific cases.
13. AMENDMENTS AND TERMINATION.
The Committee may at any time terminate the Plan. With the express
written consent of an individual Participant, the Board may cancel or reduce or
otherwise alter the outstanding
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Awards thereunder if, in its judgment, the tax, accounting, or other effects of
the Plan or potential payouts thereunder would not be in the best interest of
the Company. The Committee may, at any time, or from time to time, amend or
suspend and, if suspended, reinstate, the Plan in whole or in part; provided,
however, that without further stockholder approval, the Committee shall not:
(a) Increase the maximum number of shares of Stock which may
be issued on exercise of Options or pursuant to Restricted Stock
Awards, except as provided in Section 10;
(b) Change the maximum Option Price;
(c) Extend the maximum Option term;
(d) Extend the termination date of the Plan;
(e) Cancel and regrant or reprice any outstanding Option,
except as provided in Section 10; or
(f) Change the class of persons eligible to receive Awards
under the Plan.
As adopted, as amended, by the Committee
as of June 27, 1997 by
unanimous written consent.
15
<PAGE> 1
EXHIBIT(4)-5
MEDPARTNERS, INC.
1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose. The MedPartners, Inc. 1994 Non-Employee Director Stock
Option Plan (the "Plan") is intended to promote the interests of MedPartners,
Inc. (the "Company") by providing an inducement to obtain and retain the
services of qualified persons who are neither employees nor officers of the
Company or any affiliate to serve as members of the Board of Directors of the
Company (the "Board") and to provide for a portion of their annual compensation
to be tied directly to shareholder return.
2. Rights to be Granted. Under the Plan, options are granted that give
an optionee the right for a specified time period to purchase a specified number
of shares of common stock, par value $.001, of the Company (the "Common Stock").
The option price is determined in each instance in accordance with the terms of
the Plan. Options granted under the Plan are not intended to be "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
3. Available Shares. The total number of shares of Common Stock for
which options may be granted shall not exceed 236,000, subject to adjustment in
accordance with Section 13 hereof. Shares subject to the Plan are authorized but
unissued shares or shares that were once issued and subsequently reacquired by
the Company. If any options granted under the Plan are surrendered before
exercise or lapse without exercise, in whole or in part, the shares reserved
therefor revert to the option pool and continue to be available for grant under
the Plan.
4. Administration. The Plan shall be administered by the Compensation
Committee of the Board (the "Committee"). The Committee shall, subject to the
provisions of the Plan, have the power to construe the Plan, to determine all
questions thereunder, and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable.
5. Option Agreement. Each option granted under the provisions of the
Plan shall be evidenced by an Option Agreement, in such form as may be approved
by the Board or Committee, which Agreement shall be duly executed and delivered
on behalf of the Company and by the individual to whom such option is granted.
The Agreement shall contain such terms, provisions, and conditions not
inconsistent with the Plan as may be determined by the Committee.
6. Eligibility and Limitations. Options may be granted pursuant to the
Plan only to members of the Board who are not employees of the Company or an
affiliate at the time of grant ("Non-Employee Directors").
7. Option Price. The purchase price of the Common Stock under each
option shall be the "Fair Market Value" of the Common Stock on the date of
grant. For purposes of the Plan, the Fair Market Value of the Common Stock as of
any date means the closing price of the Common Stock, on the day prior to such
date, on the stock exchange (including NASDAQ
<PAGE> 2
National Market System) with the largest volume of sales of Common Stock on such
date, if sold on any exchange, or if not sold on any such exchange, the average
of the closing bid and asked prices of the Common Stock on the day prior to such
date, or, if the stock is not traded, such other price as the Committee
determines is the Fair Market Value of the Common Stock on such date. No option
may be granted at a price per share which is less than the par value of the
Common Stock.
8. Automatic Grant of Options. On the date any person first becomes a
Non-Employee Director, such person shall be automatically granted without
further action by the Board or the Committee an option to purchase 10,000 shares
of Common Stock. Thereafter, for the remainder of the term of the Plan and
provided he remains a director of the Company, on the date of each of the
Company's Annual Meeting of Stockholders, each Non-Employee Director shall be
automatically granted without further action by the Board or the Committee an
option to purchase 2,500 shares of Common Stock.
9. Term of Plan and Options. The options granted hereunder shall expire
on a date which is ten (10) years after the date of grant of the options and the
Plan shall terminate ten (10) years from the effective date hereof.
10. Exercise of Option. Options shall be exercised by the delivery to
the Company at its principal office or at such other address as may be
established by the Committee (Attention: Corporate Secretary) of written notice
of the number of shares of Common Stock with respect to which the option is
being exercised accompanied by payment in full of the purchase price of such
shares. Unless otherwise determined by the Committee at the time of grant,
payment for such shares may be made (i) in cash, (ii) by certified check or
bank cashier's check payable to the order of the Company in the amount of such
purchase price, (iii) by delivery to the Company of Common Stock having a Fair
Market Value equal to such purchase price, provided that such Common Stock has
been owned by the optionee for at least six months or such other period as the
Committee may determine as necessary to avoid adverse accounting treatment by
the Company, (iv) by irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds necessary to pay such
purchase price and to sell the Common Stock to be issued upon exercise of the
Option and deliver the cash proceeds less commissions and brokerage fees to the
optionee or to deliver the remaining shares of Common Stock to the optionee, or
(v) by any combination of the methods of payment described in (i) through (iv)
above. Except as provided in Section 12 hereof, no option may be exercised
unless the holder thereof is then a director of the Company. An option holder
shall have none of the rights of a stockholder with respect to the Common Stock
subject to the option until such Common Stock shall be transferred to the
holder upon the exercise of his option.
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<PAGE> 3
11. Vesting of Shares and Non-Transferability of Options.
(a) Vesting. Subject to Section 14 herein, options granted under the
Plan shall vest and become exercisable at the rate of one third of each grant
annually on each of the three consecutive anniversaries of the date of grant
provided the director's service as a director continues through each
anniversary.
(b) Legend on Certificates. The certificates representing shares of
Common Stock acquired under the Plan shall carry such appropriate legend, and
such written instructions shall be given to the Company's transfer agent, as may
be deemed necessary or advisable by counsel to the Company in order to comply
with the requirements of the Securities Act of 1933 or any state securities
laws.
(c) Non-Transferability. Options granted pursuant to the Plan shall not
be assignable or transferable other than by will or the laws of descent and
distribution, and shall be exercisable during an optionee's lifetime only by
him.
12. Termination of Option Rights.
(a) In the event an optionee ceases to be a member of the Board for any
reason other than retirement, death or disability, any then unexercised options
granted to such optionee which were exercisable at the time the optionee ceased
to be a member of the Board may be exercised within a period of ninety (90) days
following such time the optionee so ceased to be a member of the Board, but in
no event later than the expiration of the option.
(b) In the event that an optionee ceases to be a member of the Board by
reason of his or her retirement, disability or death, any then unexercised
options granted to such optionee which were exercisable at the time the optionee
ceased to be a member of the Board may be exercised (by the optionee's personal
representative, heir or legatee, in the event of death) during the period ending
one year after the date the optionee so ceased to be a member of the Board, but
in no event later than the expiration date of the option.
13. Adjustments Upon Changes in Capitalization and Other Matters.
Options and any agreements evidencing such options shall be subject to
adjustment or substitution, as determined by the Committee in its sole
discretion, as to the number, price or kind of a share of Common Stock or other
consideration subject to such options or as otherwise determined by the
Committee to be equitable (i) in the event of changes in the outstanding Common
Stock or in the capital structure of the Company, by reason of stock dividends,
stock splits, recapitalization, reorganizations, mergers, consolidations,
combinations, exchanges, or other relevant changes in capitalization occurring
after the date of grant of any such option or (ii) in the event of any change in
applicable laws or any change in circumstances which results in or would result
in any substantial dilution or enlargement of the rights granted to, or
available for, Non-Employee Directors, or which otherwise warrants equitable
adjustment because it interferes with the intended
3
<PAGE> 4
operation of the Plan. In addition, in the event of any such adjustments or
substitution, the aggregate number of shares of Common Stock available under the
Plan shall be appropriately adjusted by the Committee, whose determination shall
be conclusive. Any adjustment under this Section 13 shall be made in a manner
which does not adversely affect the exemption provided pursuant to Rule 16b-3
under the Exchange Act. The Company shall give each Non-Employee Director notice
of an adjustment hereunder and, upon notice, such adjustment shall be conclusive
and binding for all purposes.
14. Effect of Change in Control.
(a) In the event of a Change in Control, notwithstanding any vesting
schedule provided for hereunder or by the Committee with respect to an award of
options, such options shall become immediately exercisable with respect to 100
percent of the shares subject to such option.
(b) "Change in Control" shall, unless the Board otherwise directs by
resolution adopted prior thereto, be deemed to occur if (i) any "person" (as
that term is used in Sections 13 and 14(d)(2) of the Securities Exchange Act of
1934, as amended ("Exchange Act")), is or becomes the beneficial owner (as that
term is used in Section 13(d) of the Exchange Act), directly or indirectly, of
50% or more of the voting Stock or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Company's stockholders of each
new director was approved by a vote of at least one-half of the directors still
in office who were directors at the beginning of the period. Any merger,
consolidation or corporate reorganization in which the owners of the Company's
capital stock entitled to vote in the election of directors ("Voting Stock")
prior to said combination, own 50% or more of the resulting entity's Voting
Stock shall not, by itself, be considered a Change in Control.
(c) The obligations of the Company under the Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor
corporation or organization succeeding to substantially all of the assets and
business of the Company. The Company agrees that it will make appropriate
provisions for the preservation of Participant's rights under the Plan in any
agreement or plan which it may enter into or adopt to effect any such merger,
consolidation, reorganization or transfer of assets.
15. Restrictions on Issuance of Shares. Notwithstanding the provisions
of Section 10 hereof, the Company shall have no obligation to deliver any
certificate or certificates upon exercise of an option until the following
conditions shall be satisfied:
(i) The shares with respect to which the option has been
exercised are at the time of the issue of such shares effectively
registered under applicable federal and state securities acts as now in
force or hereafter amended; or
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<PAGE> 5
(ii) Counsel for the Company shall have given an opinion that
such shares are exempt from registration under federal and state
securities acts as now in force or hereafter amended;
and the Company has complied with all applicable laws and regulations, including
without limitation all regulations required by any stock exchange upon which the
Common Stock are then listed.
The Company shall use its best efforts to bring about compliance with
the above conditions within a reasonable time, except that the Company shall be
under no obligation to cause a registration statement or a post-effective
amendment to any registration statement to be prepared at its expense solely for
the purpose of covering the issue of shares in respect of which any option may
be exercised.
16. Representation of Optionee. The Company may require the optionee to
deliver written warranties and representations upon exercise of the option that
are necessary to show compliance with federal and state securities laws
including to the effect that a purchase of shares under the option is made for
investment and not with a view to their distribution (as that term is used in
the Securities Act of 1933).
17. Termination and Amendment of Plan. The Committee may at any time
terminate the Plan or make such modification or amendment thereof as it deems
advisable, provided, however, that (i) the Committee may not, without approval
by the affirmative vote of the holders of a majority of the shares present in
person or by proxy and entitled to vote at the meeting, (a) increase the maximum
number of shares for which options may be granted under the Plan or the number
of shares for which an option may be granted to any Non-Employee Director
hereunder; (b) change the provisions of the Plan regarding the termination of
the options or the time when they may be exercised; (c) change the period during
which any options may be granted or remain outstanding or the date on which the
Plan shall terminate; (d) change the designation of the class of persons
eligible to receive options; (e) change the price at which options are to be
granted; or (f) materially increase benefits accruing to option holders under
the Plan; and (ii) the Plan shall in no event be amended more than once every
six months other than to comport with changes in the Code. Termination or any
modification or amendment of the Plan shall not, without consent of a
Non-Employee Director, affect his rights under an option previously granted to
him.
* * *
As adopted by the Committee
by unanimous written
consent as of June 27, 1997
5
<PAGE> 1
EXHIBIT 5
[HASKELL SLAUGHTER & YOUNG, L.L.C. LETTERHEAD]
PLEASE REPLY TO: BIRMINGHAM
June 27, 1997
MedPartners, Inc.
3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244-2331
RE: REGISTRATION STATEMENT ON FORM S-8 --
MEDPARTNERS, INC. 1994 STOCK INCENTIVE PLAN
and
MEDPARTNERS, INC. 1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
OUR FILE NO. 48367-071
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 2,668,651 shares of the Company's authorized Common Stock,
par value $.001 per share (the "Shares") to be issued to participants in the
MedPartners, Inc. 1994 Stock Incentive Plan and the MedPartners, Inc. 1994
Non-Employee Director Stock Option Plan (collectively referred to as the
"Plans") pursuant to the Company's Registration Statement on Form S-8 (the
"Registration Statement"). This opinion is furnished to you pursuant to the
requirements of Form S-8.
In connection with this opinion, we have examined and are familiar with
originals or copies (certified or otherwise identified to our satisfaction) of
such documents, corporate records and other instruments relating to the
incorporation of the Company and to the authorization and issuance of the
Shares and the authorization and adoption of the Plans as we have deemed
necessary and appropriate.
<PAGE> 2
MedPartners, Inc.
June 27, 1997
Page 2
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 Plans, the Shares will be legally
issued, fully paid and nonassessable.
We do hereby consent to the reference to our firm under the heading
"Legal Matters" in the Registration Statement and to the filing of this Opinion
as an Exhibit thereto.
Very truly yours,
HASKELL SLAUGHTER & YOUNG, L.L.C.
By /s/ Robert E. Lee Garner
--------------------------------
Robert E. Lee Garner
<PAGE> 1
EXHIBIT (23)-1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8, No. 333-0000) pertaining to the MedPartners, Inc. 1994 Stock
Incentive Plan and MedPartners, Inc. 1994 Non-Employee Director Stock Option
Plan of our reports dated February 3, 1997, with respect to the consolidated
financial statements of MedPartners, Inc., and our report dated February 14,
1997 (except for the second paragraph of Note 4, as to which the date is May
20, 1997), with respect to the consolidated financial statements and schedule
of InPhyNet Medical Management Inc. and Subsidiaries included in their
respective Annual Reports (Form 10-K/A) for the year ended December 31, 1996,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Birmingham, Alabama
June 24, 1997
