<PAGE> 1
As filed with the Securities and Exchange Commission on September 25, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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MEDPARTNERS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 63-1151076
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3000 GALLERIA TOWER
SUITE 1000
BIRMINGHAM, ALABAMA 35244
(Address, including zip code, of registrant's principal executive offices)
MEDPARTNERS, INC.
1998 EMPLOYEE STOCK OPTION PLAN
(Full title of plan)
E. MAC CRAWFORD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
3000 GALLERIA TOWER
SUITE 1000
BIRMINGHAM, ALABAMA 35244
(205) 733-8996
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
COPIES TO:
EDWARD L. HARDIN, ESQ. WILLIAM R. SPALDING, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL KING & SPALDING
MEDPARTNERS, INC. 191 PEACHTREE STREET
3000 GALLERIA TOWER, SUITE 1000 ATLANTA, GEORGIA 30303-1763
BIRMINGHAM, ALABAMA 35244
CALCULATION OF REGISTRATION FEE
<TABLE>
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Proposed Maximum Proposed Maximum
Amount to Offering Price Per Aggregate Offering Amount of
Title of Securities to be Registered be Registered(1) Share(2) Price(2) Registration Fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001 per share
(including Common Stock Purchase Rights) (3). 7,000,000 $2.7188 $19,031,600 $5,614
Options to acquire Common Stock (4) 7,000,000 (5) (5) (5)
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</TABLE>
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(1) Maximum number of shares which may be issued by Registrant pursuant to
stock options available for future grant under the MedPartners, Inc.
1998 Employee Stock Option Plan (the "Plan").
(2) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(h) on the basis of the average of the high and low
prices of the Registrant's Common Stock on September 17, 1998 as reported
by the New York Stock Exchange.
(3) Preference Share Purchase Rights to Purchase 1/100th of a Share of
Series C Junior Participating Preferred Stock $.001, par value
(the"Rights") are attached to and trade with the Registrant's Common
Stock. The value, if any, attributable to the Rights is reflected in the
market price of the Registrant's Common Stock.
(4) Includes options to acquire the Registrant's Common Stock, which options
will be granted under the MedPartners, Inc. 1998 Employee Stock Option
Plan and in accordance with the MedPartners, Inc. Voluntary Option
Surrender Program described in the Prospectus relating to this
Registration Statement.
(5) Pursuant to Rule 457(h)(2), no separate filing fee is required with
respect to the registration of the options to be granted under the Plan.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participating officers and employees as specified
by Rule 428(b)(1) of the Securities Act of 1933, as amended (the "Securities
Act"). These documents and the documents incorporated by reference in this
registration statement (the "Registration Statement") pursuant to Item 3 of Part
II below, taken together, constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents have been previously filed by the Registrant
with the Securities and Exchange Commission (the "Commission") and are
incorporated by reference in this Registration Statement:
(a) Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 filed with the Commission on March 31, 1998, as
amended by Form 10-K/A filed with the Commission on April 30, 1998.
(b) Registrant's Quarterly Report on Form 10-Q filed for the quarter
ended March 31, 1998.
(c) Registrant's Quarterly Report on Form 10-Q filed for the quarter
ended June 30, 1998.
(d) Registrant's Current Report on Form 8-K filed on January 9, 1998.
(e) Registrant's Current Report on Form 8-K filed on January 26, 1998.
(f) The description of securities to be registered contained in the
Registration Statement filed with the Commission on Form 8-A under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") on February 9, 1996, as amended by Form 8-A/A filed with the
Commission on September 21, 1998.
(g) The description of securities to be registered contained in the
Registration Statement filed with the Commission on Form 8-A under
the Exchange Act on July 11, 1997.
In addition, all documents filed by the Registrant subsequent to the
date of this Registration Statement pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, and prior to the filing of a post-effective
amendment to this Registration Statement that indicates that all securities
offered hereunder have been sold or that de-register all securities then
remaining unsold shall be deemed to be incorporated by reference in this
Registration Statement and to be a part of this Registration Statement from the
date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
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Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 102(b)(7) of the Delaware General Corporate Law ("DGCL")
permits a Delaware corporation in its certificate of incorporation, to limit or
eliminate, subject to certain statutory limitations, the liability of directors
to the corporation or its stockholders for monetary damages for breaches of
fiduciary duty, except for liability (i) for any breach of a director's duty of
loyalty to the corporation 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 Section 174 of the DGCL, or (iv) for any transaction from
which the director derived an improper personal benefit. Section 9.1 of
Registrant's Third Restated Certificate of Incorporation (the "Certificate")
eliminates personal liability of the Registrant's directors (the "Directors")
to Registrant and its stockholders for monetary damages arising from acts or
omissions in the Directors' capacity as directors in accordance with Section
102(b)(7) of the DGCL. This provision offers the Directors 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
Registrant or a stockholder thereof to successfully prosecute an action against
a Director for a breach of his duty of care is limited.
Under Section 145 of the DGCL, the Registrant may indemnify any of its
Directors, officers, employees, or agents against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection with a threatened, pending or
completed action, suit or proceeding brought against any such person by reason
of the fact that such person is or was a director or officer (i) if any such
person acted in good faith and in a manner reasonably believed to be in or not
apposed to the best interests of the Registrant and, (ii) in connection with
any criminal action or proceeding, if such person had no reasonable cause to
believe such conduct was unlawful. In actions brought by or in the right of
Registrant, Section 145 of the DGCL provides that no indemnification for
expenses may be made in respect of any claim, issue or matter as to which any
director or officer of the Registrant shall have been adjudged to be liable for
negligence or misconduct in the performance of such person's duty to the
Registrant unless, and only to the extent that, the Court of Chancery of the
State of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of such case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
Pursuant to the Certificate, Registrant is obligated to indemnify
Directors. Pursuant to Registrant's Second Amended and Restated By-laws as
amended by the First Amendment to the Second Amended and Restated Bylaws of
MedPartners (the "By-laws"), Registrant is obligated to indemnify Directors and
Registrant's officers, and may indemnify Registrant's employees and agents to
the fullest extent permitted by the DGCL.
Registrant has purchased insurance containing customary terms and
conditions as permitted by Delaware law on behalf of its directors and
officers, which may cover liabilities under the Securities Act of 1933.
Item 7. Exemption from Registration Claimed.
Not applicable.
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Item 8. Exhibits.
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Exhibit Description
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4.1 MedPartners, Inc. Third Restated Certificate of Incorporation, filed as Exhibit (3)-1 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996, is hereby incorporated herein
by reference
4.2 MedPartners, Inc. Stockholders' Rights Plan, filed as Exhibit (4)-1 to Registrant's Registration
Statement on Form S-4 (Registration No. 333-00774) is hereby incorporated by reference.
4.3 Amendment No. 1 to the Stockholders' Rights Plan of MedPartners, Inc., filed as Exhibit (4)-2 to
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996, is hereby
incorporated herein by reference.
4.4 Amendment No. 2 to the Stockholders' Rights Plan of MedPartners, Inc., filed as Exhibit (4)-2 to
Registrant's Registration Statement on Form S-3 (Registration No. 333-17339), is hereby incorporated
herein by reference.
4.5 MedPartners, Inc. 1998 Employee Stock Option Plan.
4.6 Form of Option Surrender and Relinquishment Agreement.
4.7 Form of Stock Option Award Certificate pursuant to the MedPartners, Inc. 1998 Employee Stock Option
Plan and the Voluntary Option Exchange Program.
5.1 Opinion of King & Spalding regarding legality of the shares and the options being registered.
23.1 Consent of Ernst & Young LLP
23.2 Consent of King & Spalding (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
</TABLE>
Item 9. Undertakings.
(a) 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;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this
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
this Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume 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 may be
reflected in the form of prospectus filed with the
Commission
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pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a
20 percent 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
this Registration Statement or any material change
to such information in the Registration Statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or
15(d) of the Exchange Act that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities 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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 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 this 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.
(c) Insofar as indemnification for liabilities arising under the
Securities 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 Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the 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 Securities Act and will be governed
by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, 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 the 10th day of
September, 1998.
MEDPARTNERS, INC.
By: /s/ E. Mac Crawford
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E. Mac Crawford
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints E. Mac Crawford and James H. Dickerson, Jr. and
each of them, as true and lawful attorneys-in-fact and agents, with full power
of substitution and re-substitution for such person and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same with all exhibits thereto and
other documents in connection therewith, with the 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 or 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, and any of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
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Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and as of
the dates indicated.
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Signature Title Date
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<S> <C> <C>
/s/ Richard M. Scrushy Director, Chairman of the Board September 10, 1998
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Richard M. Scrushy
/s/ E. Mac Crawford Director, President and Chief
- --------------------------------------- Executive Officer September 10, 1998
E. Mac Crawford
/s/ James H. Dickerson, Jr. Executive Vice President and
- --------------------------------------- Chief Financial Officer September 10, 1998
James H. Dickerson, Jr.
/s/ Howard McLure Senior Vice President and Chief
- --------------------------------------- Accounting Officer September 10, 1998
Howard McLure
/s/ Roger L. Headrick Director
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Roger L. Headrick September 10, 1998
/s/ Harry M. Jansen Kraemer, Jr. Director
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Harry M. Jansen Kraemer, Jr. September 10, 1998
/s/ Rosalio J. Lopez, M.D. Director
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Rosalio J. Lopez, M.D. September 10, 1998
/s/ Michael D. Martin Director
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Michael D. Martin September 10, 1998
/s/ Ted H. McCourtney Director
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Ted H. McCourtney September 10, 1998
/s/ Larry D. Striplin, Jr. Director
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Larry D. Striplin, Jr. September 10, 1998
/s/ Charles W. Newhall III Director
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Charles W. Newhall III September 10, 1998
/s/ John S. McDonald Director
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John S. McDonald September 10, 1998
/s/ C.A. Lance Piccolo Director
- ---------------------------------------
C.A. Lance Piccolo September 10, 1998
/s/ Walter T. Mullikin, M.D. Director
- ---------------------------------------
Walter T. Mullikin, M.D. September 10, 1998
</TABLE>
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Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed, on behalf of the Plan, by the following persons in
the capacities and as of the dates indicated.
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Signature Title Date
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<S> <C> <C>
/s/ Roger L. Headrick Director, Member of the
- --------------------------------------- Compensation Committee September 10, 1998
Roger L. Headrick
/s/ Larry D. Striplin, Jr. Director, Member of the
- --------------------------------------- Compensation Committee September 10, 1998
Larry D. Striplin, Jr.
/s/ Charles W. Newhall III Director, Member of the
- --------------------------------------- Compensation Committee September 10, 1998
Charles W. Newhall III
/s/ John S. McDonald Director, Member of the
- --------------------------------------- Compensation Committee September 10, 1998
John S. McDonald
</TABLE>
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EXHIBIT INDEX
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EXHIBIT DESCRIPTION PAGE
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4.1 MedPartners, Inc. Third Restated Certificate of Incorporation, filed as
Exhibit (3)-1 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, is hereby incorporated herein by reference
4.2 MedPartners, Inc. Stockholders' Rights Plan, filed as Exhibit (4)-1 to
Registrant's Registration Statement on Form S-4 (Registration No.
333-00774) is hereby incorporated by reference.
4.3 Amendment No. 1 to the Stockholders' Rights Plan of MedPartners, Inc.,
filed as Exhibit (4)-2 to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, is hereby incorporated herein by
reference.
4.4 Amendment No. 2 to the Stockholders' Rights Plan of MedPartners, Inc.,
filed as Exhibit (4)-2 to Registrant's Registration Statement on Form S-3
(Registration No. 333-17339), is hereby incorporated herein by reference.
4.5 MedPartners, Inc. 1998 Employee Stock Option Plan.
4.6 Form of Option Surrender and Relinquishment Agreement.
4.7 Form of Stock Option Award Certificate pursuant to the MedPartners, Inc.
1998 Employee Stock Option Plan and the Voluntary Option Exchange
Program.
5.1 Opinion of King & Spalding regarding legality of shares being registered.
23.1 Consent of Ernst & Young LLP
23.2 Consent of King & Spalding (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
</TABLE>
<PAGE> 1
EXHIBIT 4.5
MEDPARTNERS, INC.
1998 EMPLOYEE STOCK OPTION 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 a compensation
plan to be known as the "MedPartners, Inc. 1998 Employee Stock Option Plan"
(hereinafter referred to as the "Plan"), as set forth in this document. The
Plan permits the grant of Options and is intended to fit within the exception
to the New York Stock Exchange's shareholder approval requirement for
broadly-based stock option plans set forth in section 312.03(a)(2) of the New
York Stock Exchange Listed Company Manual as of the date hereof.
The Plan shall become effective as of August 6, 1998 (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 stock options,
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 inducement 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 11 hereof, until all Shares subject to it shall
have been purchased or acquired according to the Plan's provisions.
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.
2.2 "AWARD" means, individually or collectively, a grant under this Plan
of Options.
2.3 "AWARD AGREEMENT" means either (i) an agreement entered into by the
Company and each Participant setting forth the terms and provisions applicable
to Awards granted under this Plan or (ii) a certificate executed by the Company
and delivered to the Participant evidencing and 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:
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<PAGE> 2
(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;
(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;
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<PAGE> 3
(d) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company; or
(e) Any other condition or event (i) that the Committee determines to be a
"Change in Control" within the meaning of this Section 2.7 and (ii) that is set
forth as a supplement to this Section 2.7 in the Award Agreement.
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.
2.10 "COMMON STOCK" means MedPartners, Inc. common stock, $.001 par value.
2.11 "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).
2.12 "DIRECTOR" means any individual who is a member of the Board of
Directors of MedPartners, Inc.
2.13 "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.
2.14 "EFFECTIVE DATE" shall have the meaning ascribed to such term in Section
1.1 hereof.
2.15 "ELIGIBLE PERSON" shall mean all Employees, Directors or officers of the
Company or any affiliate, the majority of whom are neither officers nor
Directors of the Company.
2.16 "EMPLOYEE" means any officer or employee of the Company.
2.17 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.18 "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).
2.19 "IMMEDIATE FAMILY MEMBERS" means the spouse, children and grandchildren
of a Participant.
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.
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2.22 "OPTION" 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 PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
2.24 "PARTICIPANT" means an Eligible Person who has outstanding an Award
granted under the Plan.
2.25 "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.
2.26 "PLAN" means the MedPartners, Inc. 1998 Employee Stock Option Plan.
2.27 "SHARES" means Common Stock of MedPartners, Inc., par value $.001 per
share.
2.28 "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 Participants
who shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner not inconsistent with
the Plan; construe and interpret the Plan and any agreement or instrument
entered into under the Plan as they apply to Participants; establish, amend or
waive rules and regulations for the Plan's administration as they apply to
Participants; alter, amend, suspend or terminate the Plan in whole or in part;
and (subject to the provisions of Article 11 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. 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.
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 Seven Million (7,000,000).
Shares issued upon exercise of Options under the Plan may be either authorized
but unissued Shares or Shares reacquired 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 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.
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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 (excluding cash dividends) 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, an 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.
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 Eligible Persons 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 that the
Option is intended to be a nonqualified stock option 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.
6.4 VESTING OF OPTIONS. Unless otherwise designated by the Compensation
Committee, each Option granted pursuant to the Plan shall vest as follows:
(a) 34% of the Options granted shall vest on the Option grant date;
(b) 33% of the Options granted shall vest on each of the first
anniversary and second anniversary of the Option grant date; provided, however,
that if during the first year after the Option grant date, the stock price of
the Company's common stock closes at or above $12.00 for any twenty (20) out of
thirty (30) consecutive trading days, the 33% of the Options due to vest on the
first anniversary of the Option grant date shall vest immediately at the end of
such 20th day; and, provided further, that if during the second year after the
Option grant date, the stock price of the Company's common stock closes at or
above $18.00 for any twenty (20) out of thirty (30) consecutive trading days,
the 33% of Options due to vest on the second anniversary of the Option grant
date shall vest immediately at the end of such 20th day.
6.5 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 Option shall be exercisable later than the tenth anniversary
date of its grant.
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6.6 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.
6.7 PAYMENT. Options granted under this Article 6 shall be exercised in
accordance with rules and procedures established by the Committee or, in the
absence of such rules and procedures, (i) in accordance with the Award
Agreement or (ii) 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, check in a form acceptable to the Company 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. Moreover, the Committee,
acting in its absolute discretion, may authorize payment in any combination of
the foregoing payment options, and the Committee, acting in its absolute
discretion, may, subject to the applicable provisions of Delaware law, elect to
accept payment in the form of a note acceptable to the Committee or in the form
of any other property acceptable to the Committee.
As soon as practicable after receipt of proper notification of exercise and
full payment, the Company, if requested by the Participant, 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).
6.8 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.
6.9 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)
the expiration of 12 months following the Participant's death or Disability;
(c) immediately upon termination for Cause; or (d) the expiration of 90 days
following the Participant's termination of employment for any reason other than
Cause, Change in Control, death, Disability.
6.10 TRANSFERABILITY OF OPTIONS. To the extent not prohibited by any
statute, rule or regulation applicable to the Plan, the Options or the
registration with the Securities and Exchange Commission of the Common Stock to
be issued upon exercise of the Options, the Committee may, in its discretion,
authorize all or a portion of Options 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.
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ARTICLE 7. 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 8. RIGHTS OF EMPLOYEES
8.1 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.
8.2 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 9. CHANGE IN CONTROL
9.1 TREATMENT OF OUTSTANDING AWARDS. Except as may otherwise be provided
in the applicable Award Agreement and unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any governing
governmental agencies or national securities exchanges, upon the occurrence of
a Change in Control, any Option granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout its term.
9.2 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 9 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 10. SALE OF BUSINESS UNIT OF COMPANY
The Committee, in connection with the sale of any Subsidiary, Affiliate,
division or other business unit of the Company, may within the Committee's sole
and absolute discretion cause any or all Options granted hereunder to
Participants whose Options or rights under Options will be adversely affected
by such transaction (a) to become immediately exercisable, or (b) to remain
exercisable after such transaction for such period as the Committee deems
appropriate under the circumstances, or both (a) and (b). The provisions of
this Article 10 and the actions of the Committee taken pursuant to this Article
10 shall be effective upon action of the Committee alone without amendment to
any Award Agreement or the consent of any Participant.
ARTICLE 11. AMENDMENT, MODIFICATION, AND TERMINATION
11.1 AMENDMENT, MODIFICATION AND TERMINATION. Subject to Section 9.2 of
this Plan, 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.
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, reduce the exercise price of any outstanding Options or
alter the class of participants in the Plan without stockholder approval.
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11.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. Subject to Section 9.2 of this Plan, 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.
11.3 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 12. WITHHOLDING
12.1 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 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.
12.2 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 13. 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 14. 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 15. LEGAL CONSTRUCTION
15.1 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.
15.2 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.
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15.3 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.
15.4 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.
15.5 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.
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EXHIBIT 4.6
OPTION SURRENDER AND RELINQUISHMENT AGREEMENT
THIS OPTION SURRENDER AND RELINQUISHMENT AGREEMENT (the "Agreement")
is made and entered into as of this 21st day of September, 1998, by and between
MedPartners, Inc., a Delaware corporation ("MedPartners") and the individual
whose name appears under the caption "Optionee" on the signature page of this
Agreement ("Optionee").
RECITALS
WHEREAS, MedPartners has issued options to purchase shares of
MedPartners common stock, $.001 par value (the "Common Stock") pursuant to (i)
the Amended and Restated MedPartners, Inc. 1993 Stock Option Plan; (ii) the
MedPartners, Inc. 1994 Stock Incentive Plan; (iii) the Amended and Restated
MedPartners, Inc. 1995 Stock Option Plan; (iv) the Amended and Restated
MedPartners, Inc. Incentive Compensation Plan; (v) the MedPartners, Inc. 1997
Long Term Incentive Compensation Plan; and (vi) other option plans and
agreements (collectively the "Current Plans");
WHEREAS, Optionee is the holder of the outstanding stock options set
forth on the Personnel Option Status Report (the "Report") attached hereto as
Exhibit A which options have been granted under the Current Plans (the "Old
Options");
WHEREAS, in order to induce MedPartners to grant to Optionee the
option (the "Options") to acquire shares of Common Stock under the MedPartners,
Inc. 1998 Employee Stock Option Plan (the "1998 Plan") contemplated by the form
of Stock Option Award Certificate attached hereto as Exhibit B (the "Option
Certificate"), Optionee desires to surrender and relinquish those Old Options
noted on the Personnel Option Surrender Report attached hereto as Exhibit C as
"Surrendered and Relinquished" (the "Surrendered Options") in accordance with
the terms and conditions hereof (the "Voluntary Option Surrender Program"); and
WHEREAS, in conjunction with the grant of the Old Options, Optionee was
required to sign and deliver to MedPartners an Employee Noncompetition,
Nondisclosure and Developments Agreement (the "Noncompetition Agreement"),
attached as an exhibit to one or more of the agreements, certificates, contracts
or documents related to such Old Options (collectively the "Old Option
Agreements").
AGREEMENT
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements set forth herein, the parties agree as follows:
1. SURRENDER OF OPTIONS.
1.1. Surrender. Except as set forth in Section 3 hereof, Optionee
does hereby fully and voluntarily surrender, waive, relinquish, cancel,
terminate and hold MedPartners harmless for any and all rights with respect to
the Surrendered Options and any and all agreements, certificates, contracts or
documents related thereto (collectively the "Old Option Agreements"). Optionee
acknowledges and agrees that the execution of this Agreement shall constitute
full satisfaction and discharge of any and all rights of Optionee with respect
to the Surrendered Options and, except as set forth in Section 3 hereof, any
corresponding Old Option Agreements. Optionee does hereby acknowledge and agree
that following the execution of this Agreement, Optionee shall not assert or
facilitate the assertion of any claim against MedPartners, or any of its
subsidiaries, affiliates, officers, directors or employees, that the
Surrendered Options were not duly, fully and properly terminated and canceled
by Optionee pursuant to this Agreement. Optionee further agrees to defend,
indemnify and hold MedPartners, and all of its subsidiaries, affiliates,
officers, directors, or employees (collectively and together with MedPartners,
the "Indemnified Parties") harmless against any loss, liability, or expense any
or each of the Indemnified Parties may incur in connection with any breach of
any of the terms and conditions of this Agreement or any representation or
warranty of Optionee set forth in this Agreement.
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1.2. Tender of Documents.
(a) Optionee shall send to MedPartners (i) an executed
original of this Agreement and (ii) original executed copies of any and all
Old Option Agreements.
(b) To the extent that Optionee cannot locate or did not
receive original copies of any Old Option Agreements, Optionee shall
complete, execute, have notarized, and send to MedPartners an affidavit and
indemnity agreement (an "Affidavit") in a form and substance satisfactory
to MedPartners for each missing Old Option Agreement.
(c) If Optionee has not executed and delivered to
MedPartners a Noncompetition Agreement, Optionee shall execute and send to
MedPartners a Noncompetition Agreement in the form provided to Optionee.
1.3. Obligations of MedPartners. Upon receipt by MedPartners of
the documents required in Section 1.2 and the satisfaction of the conditions
set forth Section 1.4, MedPartners shall send to Optionee an executed Option
Certificate evidencing the Options.
1.4. Conditions. Notwithstanding any other provision of this
Agreement to the contrary, MedPartners will not be required to grant the
Options, until each of the following conditions are satisfied:
(a) the original Old Option Agreements have been delivered
by Optionee or an Affidavit has been fully executed and delivered by
Optionee for any and all missing Old Option Agreements;
(b) an executed original of this Agreement shall have been
validly tendered by Optionee; and
(c) no action or proceeding shall have been instituted or
threatened in any court or by or before any governmental agency with
respect to the Voluntary Option Surrender Program or the grant of the
Options which, in the sole judgment of MedPartners, may materially impair
the contemplated benefits to MedPartners of the Voluntary Option Surrender
Program or the granting of the Options.
2. REPRESENTATIONS AND WARRANTIES AND ACKNOWLEDGMENTS OF OPTIONEE.
2.1. Representations and Warranties. Optionee represents and
warrants to MedPartners as follows:
(a) Optionee has full right, power, authority and capacity
to enter into this Agreement, to relinquish all of Optionee's rights in
respect of the Surrendered Options in accordance with the terms and
provisions hereof. Optionee will, upon request, execute and deliver any
additional documents deemed by MedPartners to be necessary or desirable to
complete the Voluntary Option Surrender Program.
(b) This Agreement has been duly executed and delivered by
Optionee, and, upon consummation of the transactions contemplated hereby,
Optionee shall have relinquished all of Optionee's rights in respect of the
Surrendered Options and under the Old Option Agreements, and this Agreement
constitutes the valid and binding agreement of Optionee, enforceable
against Optionee in accordance with its terms, subject to applicable
bankruptcy, insolvency and other similar laws affecting the enforceability
of creditors' rights generally, general equitable principles and the
discretion of courts in granting equitable remedies.
2.2. Optionee Acknowledgments. Optionee certifies and
acknowledges that:
(a) Optionee has read this Agreement and the Personnel
Option Status Report attached hereto as Exhibit A and the Personnel Option
Surrender Report attached hereto as Exhibit C and Optionee has discovered
no errors on the Report;
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(b) Optionee has read the Prospectus for the 1998 Plan, the
1998 Plan and the Questions and Answers document, and will accept the
Options subject to the terms and conditions of the Plan and the Option
Certificate;
(c) Optionee shall accept as binding and final all
decisions or interpretations of the Board of Directors of MedPartners (the
"Board") or the Compensation Committee of the Board (the "Committee") upon
any questions arising under the Plan;
(d) Optionee has had a full and fair opportunity to receive
answers to any questions Optionee may have regarding the Voluntary Option
Surrender Program;
(e) Optionee understands the contents of all documents
received from MedPartners with respect to the Voluntary Option Surrender
Program;
(f) Optionee has signed this Agreement of Optionee's own
free will;
(g) the Old Options retained hereby will be governed by the
applicable Current Plan and/or any applicable Old Option Agreement;
(h) the Options will be governed by the terms and
conditions of the 1998 Plan and the Option Certificate which may differ
materially and adversely from the Current Plans and the Old Option
Agreements;
(i) the Voluntary Option Surrender Program may adversely
affect the vesting period for Optionee's Options and may have adverse tax
consequences for Optionee;
(j) the exercise of the Options may be subject to
additional restrictions as set forth in the 1998 Plan or the Option
Certificate;
(k) unless at the time of exercise of the Options a
registration statement under the Securities Act of 1933 (the "Act"), as
amended, is in effect covering shares of Common Stock to be issued upon
exercise of the Options, as a condition to the exercise of the Options
MedPartners may require Optionee to represent that Optionee is acquiring
the Common Stock for Optionee's own account only and not with a view to, or
for sale in connection with, any distribution of the Common Stock;
(l) the certificate or certificates representing any shares
of Common Stock acquired hereunder may bear an appropriate legend relating
to registration and resale under federal and state securities laws;
(m) Optionee shall not have any rights of a stockholder of
MedPartners with respect to the shares of Common Stock which may be
purchased upon exercise of this Option, unless and until such shares shall
have been issued and delivered and Optionee's name has been entered as a
stockholder on the stock transfer records of MedPartners;
(n) notwithstanding anything in this Agreement, the Plan,
or the Option Certificate to the contrary, nothing shall obligate or
require MedPartners to file or keep effective a registration statement
pursuant to the Act or any state's securities law covering the shares of
Common Stock to be issued upon exercise of the Options;
(o) the issuance of Common Stock is subject to limitations
imposed by federal and state law and MedPartners shall not be obligated to
issue any shares of Common Stock upon exercise of the Options that would
cause MedPartners to violate law or any rule, regulation, order or consent
decree of any regulatory authority (including, without limitation, the
Securities and Exchange Commission) having jurisdiction over the affairs of
MedPartners;
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<PAGE> 4
(p) Optionee may be required to provide MedPartners with
such information as is reasonably requested by MedPartners or its counsel
to determine whether the issuance of Common Stock complies with the
provisions described herein; and
(q) MedPartners will rely upon the representations,
warranties and acknowledgments made by Optionee in this Agreement.
3. ADDITIONAL COVENANTS.
3.1. Survival of Old Option Agreements.
(a) MedPartners and Optionee acknowledge and agree that
Optionee shall not, by this Agreement, surrender and relinquish any of
Optionee's Old Options that are not Surrendered Options (such Old Options
being the "Retained Options").
(b) Notwithstanding the provisions of Section 1.1 hereof,
MedPartners and Optionee do hereby agree that:
(i) if any grant of Old Options is comprised entirely
of Retained Options, the Old Option Agreement governing such grant
of Old Options shall not be canceled hereby but shall remain in full
force and effect; and
(ii) if any grant of Old Options contains both
Surrendered Option and Retained Options
(A) the Old Option Agreement governing such
grant of Old Options shall not be canceled and shall remain
in full force and effect and govern only such Retained
Options;
(B) such Option grant shall be reduced to
equal the Retained Options for such grant;
(C) Optionee shall promptly, upon the request of
MedPartners, enter into a replacement Old Option Agreement
reflecting the appropriate Retained Options but containing
the same terms and conditions of the applicable Old Option
Agreement (such new agreement the "Replacement Agreement");
and
(D) until the execution and delivery of any such
Replacement Agreement, this Agreement shall evidence the
grant of such Retained Options, subject to the terms and
conditions of the applicable Old Option Agreement.
3.2. Acknowledgment of Noncompetition Agreement. Optionee does
hereby acknowledge and agree that (i) Optionee has executed the Noncompetition
Agreement either in conjunction with the Old Options or in conjunction with the
execution of this Agreement; (ii) the Noncompetition Agreement restricts
Optionee's right to compete with MedPartners during or after Optionee's
employment with MedPartners and imposes on Optionee affirmative obligations to
retain and maintain MedPartners' trade and commercial secrets; and (iii)
notwithstanding anything in this Agreement to the contrary, nothing herein
shall in any way terminate, cancel, or amend any Noncompetition Agreement or in
any way relieve Optionee from his or her obligations and responsibilities
pursuant to the Noncompetition Agreement.
3.3. Limitations on Exercise of New Options and Retained Options.
Optionee acknowledges and agrees that, upon execution of this Agreement,
Optionee may not exercise any New Options or Retained Options until Optionee
shall have received from MedPartners an Option Certificate, provided that
MedPartners, within its sole, absolute, and unfettered discretion may waive
this limitation and allow Optionee or any other Optionee under the Voluntary
Option Surrender Program to exercise any or all of such New Options or Retained
Options prior to receipt by Optionee of the Option Certificate. Any exercise of
the Options shall only be in accordance with the 1998 Plan and the Option
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<PAGE> 5
Certificate and any exercise of the Retained Options shall only be in
accordance with the applicable Old Option Agreements subject to the provisions
of Section 3.1 hereof.
4. MISCELLANEOUS.
4.1. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to Delaware's conflict of law rules.
4.2. Binding Effect. This Agreement shall be binding on and inure
to the benefit of MedPartners and Optionee and their respective successors,
assigns, heirs, executors and legal and personal representatives; provided,
however, that none of the rights or obligations of Optionee hereunder may be
delegated, assigned or otherwise transferred by Optionee.
4.3. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
4.4. Entire Agreement. This Agreement is intended by the parties
hereto to be their complete agreement with respect to the subject matter
hereof, and this Agreement supersedes any prior agreements or understandings
(oral or written) with respect to the subject matter hereof between the parties
hereto.
4.5. Reservation of Rights. MedPartners reserves the absolute
right to reject any or all documents associated with the Voluntary Option
Surrender Program that are not in proper form and to deny to any Optionee,
submitting such incomplete documents, the right to participate in the Voluntary
Option Surrender Program. MedPartners also reserves the right to waive any
irregularities or conditions of such documents as to any particular Optionee.
Any waiver by MedPartners of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach of such
provision or any other provision hereof.
4.6. Severability. The parties agree that the provisions of this
Agreement and each Exhibit hereto are severable and the invalidity of any
provision in whole or part shall not affect the validity and enforceability of
any enforceable part of such provision or any other provisions hereof or
thereof.
4.7. Waiver. No waiver of any breach or default hereunder or
under any Exhibit hereto shall be considered valid unless in writing, and no
such waiver shall be deemed a waiver of any subsequent breach or default of the
same or similar nature.
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<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
MEDPARTNERS, INC.
-----------------------------------------------
By:
-----------------------------------------
Title:
--------------------------------------
OPTIONEE
Signature:
---------------------------------
Name (print name):
-------------------------
Social Security No.:
-----------------------
Home Address:
------------------------------
------------------------------
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<PAGE> 1
EXHIBIT 4.7
STOCK OPTION AWARD CERTIFICATE
THIS STOCK OPTION AWARD CERTIFICATE (this "Certificate"), is effective
as of September 21, 1998 (the "Grant Date") and executed by MedPartners,
Inc., a Delaware corporation ("MedPartners"), as evidence of a grant to:
------------------------------------------------------------------
{NAME OF OPTIONEE}
("Optionee").
to purchase
{NUMBER OF OPTION SHARES}
of MedPartners common stock, $.001 par value
at $3.00 per share.
------------------------------------------------------------------
RECITALS
WHEREAS, on August 6, 1998, the Board of Directors (the "Board") of
MedPartners adopted a stock option plan known as the "MedPartners, Inc. 1998
Employee Stock Option Plan" (the "Plan") which authorizes the Compensation
Committee of the Board (the "Committee") to grant options to purchase shares of
MedPartners' common stock, $.001 par value (the "Common Stock");
WHEREAS, the Committee has granted the Optionee an Option (as
described below) to purchase the number of shares of Common Stock as set forth
below;
WHEREAS, as a material inducement to the granting of the Option, the
Optionee has executed and delivered an Option Surrender and Relinquishment
Agreement (the "Surrender Agreement"), original Old Options Agreements (as
defined in the Surrender Agreement) and (if necessary) Affidavits and a
Noncompetition Agreement (each as defined in the Surrender Agreement) (the
"Surrender Documents").
OPTION GRANT
NOW, THEREFORE, MedPartners does hereby certify the following:
1. INCORPORATION OF PLAN. This Option is granted pursuant to the
provisions of the Plan and the terms and conditions of the Plan are
incorporated herein by reference and made a part hereof. A copy of the Plan has
been delivered to the Optionee. Except as otherwise noted, capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed
to them in the Plan. Notwithstanding anything in this Certificate to the
contrary, to the extent the terms of this Certificate conflict with or
otherwise attempt to exceed the authority of the Committee set forth under the
Plan, the Plan shall govern and control in all respects.
2. GRANT OF OPTION. Subject to the terms, restrictions,
limitations, and conditions stated herein and in the Plan, MedPartners hereby
evidences its grant to the Optionee of the right and option to purchase {NUMBER
OF OPTION SHARES} shares of Common Stock (the "Option") at a price of $3.00
per share (the "Exercise Price").
3. OPTION TERM. Unless earlier terminated pursuant to the Plan,
this Option shall terminate on the day that is the tenth anniversary of the
Grant Date (the "Term"). In the event this Option is not exercised with respect
to all or any part of the shares of Common Stock subject to this Option prior
to the expiration of the Term or the cancellation of the Option as provided in
the Plan, the shares of Common Stock with respect to which this Option was not
exercised shall no longer be subject to this Option and Optionee shall have no
further right to purchase such shares.
4. NOTICE OF EXERCISE OF OPTION.
4.1. Exercise of Option. This Option may be exercised by the
Optionee, or by the Optionee's administrators, executors, or personal
representatives (collectively and together with Optionee, the "Exercising
Parties" and each an "Exercising Party") only in accordance with the rules and
procedures established by MedPartners and delivered to Optionee. In the event
that such rules and procedures are not established by MedPartners or not
delivered to Optionee, the appropriate Exercising Party may exercise this
Option by a written notice (in substantially the form of the Notice of Exercise
attached hereto as Exhibit A) signed by the appropriate Exercising Party and
delivered or mailed to MedPartners as specified in Section 10.3 hereof to the
attention of the Corporate Secretary or such other officer as MedPartners may
designate.
4.2. Content of Notice. Any notice sent to MedPartners in
accordance with Section 4.1 (such notice a "Exercise Notice") shall:
(a) specify the number of shares of Common Stock which the
appropriate Exercising Party then elects to purchase hereunder;
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<PAGE> 2
(b) contain such information as may
be reasonably required pursuant to Section 9 hereof;
and
(c) be accompanied by (i) a certified or cashier's check
payable to MedPartners in an amount equal to the Exercise Price times
the number of shares of Common Stock to be purchased (such amount, the
"Aggregate Purchase Price"); (ii) shares of Common Stock having an
Aggregate Stock Price (as hereinafter defined) equal to the Aggregate
Purchase Price, duly endorsed for transfer, (iii) evidence acceptable
to MedPartners that Optionee has executed irrevocable instructions to
a broker to deliver promptly to MedPartners the Aggregate Purchase
Price and to sell the shares of Common Stock to be issued upon
exercise of the Option and deliver the cash proceeds, less commissions
and brokerage fees, to Optionee or to deliver the remaining shares of
Common Stock to the Optionee; or (iv) any combinations of (i), (ii) or
(iii);
4.3. Aggregate Stock Price. With respect to shares of Common
Stock, the term "Aggregate Stock Price" shall equal the (i) Fair Market Value
of the Common Stock and (ii) the number of such shares of Common Stock.
4.4. Withholding. MedPartners shall have the power and the
right to deduct or withhold or require Optionee to remit to MedPartners an
amount sufficient to satisfy all federal, state and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to the
exercise of the Option or any taxable event associated with the Option or the
Plan. MedPartners may also satisfy any withholding obligation by deducting the
necessary amount from the salary of any employee option holder.
5. VESTING AND EXERCISE. This Option shall be subject to the
vesting provisions set forth in the Plan. Any sale of the Common Stock acquired
through the exercise of all or any portion of the Option is subject to the
applicable provisions of the MedPartners, Inc. Stock Trading Policy dated May
6, 1998, as such policy may be amended or supplemented by MedPartners within
its sole discretion.
6. ADJUSTMENT IN OPTION. The number of shares of Stock subject to
this Option, the Exercise Price and other matters are subject to adjustment
during the term of this Option in accordance with the Plan.
7. DEATH OF OPTIONEE. In the event of the Optionee's death, the
appropriate Exercising Party may exercise this Option at any time within a
period ending on the earlier of (a) the last day of the one (1) year period
following the Optionee's death or (b) the expiration date of this Option to the
extent that Optionee could have exercised the Option on the date immediately
preceding Optionee's death.
8. DATE OF GRANT. This Option was granted by
the Committee on the Grant Date.
9. COMPLIANCE WITH REGULATORY MATTERS. The issuance of capital
stock of MedPartners is subject to limitations imposed by federal and state law
and MedPartners shall not be obligated to and expressly reserves the right not
to issue any shares of Common Stock upon exercise of this Option that would
cause MedPartners to violate law or any rule, regulation, order or consent
decree of any regulatory authority (including without limitation the Securities
and Exchange Commission) having jurisdiction over the affairs of MedPartners.
Prior to the issuance of Common Stock, MedPartners may require Optionee (or any
appropriate Exercising Party) to provide MedPartners with such information as
is reasonably requested by MedPartners or its counsel to determine whether the
issuance of Common Stock complies with the provisions described by this
Section.
10. MISCELLANEOUS.
10.1. Successors and Assigns. This Certificate shall be
binding upon the parties hereto and their representatives, successors and
assigns.
10.2. Choice of Law. This Certificate shall be governed by the
laws of, the State of Delaware, without regard to conflicts of laws principles.
10.3. Notice. With the exception of the Exercise Notice
required by Section 4, which must be actually received by MedPartners to be
effective, any notice, request, document or other communication given hereunder
shall be deemed to be sufficiently given upon personal delivery to the other
party or upon the expiration of three (3) days after depositing the same in the
United States mail, return receipt requested, properly addressed to MedPartners
at 3000 Galleria Tower, Suite 1000 Birmingham, Alabama 35244, Attn: Corporate
Secretary or to Optionee at the address shown on the records of MedPartners or
such other address as either party may give to the other party in writing in
the same manner
10.4. Severability. The provisions of this Certificate are
severable and the invalidity or unenforceability of any provision in whole or
part shall not affect the validity or enforceability of any enforceable part of
such provision or any other provisions hereof.
10.5. Section Headings. The paragraph and section headings
herein are included solely for convenience of reference and shall not control
the meaning or interpretation of any of the provisions of this Certificate.
IN WITNESS WHEREOF, the Committee has caused this Certificate to be executed on
behalf of MedPartners.
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<PAGE> 3
MEDPARTNERS, INC.
By: ---------------------------------------
Title:
-------------------------------------
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<PAGE> 4
Exhibit A
to
Stock Option Award Certificate
NOTICE OF EXERCISE
Dated ________________
The undersigned (being referred to herein as the "Optionee") hereby
notifies MedPartners, Inc. ("MedPartners") of this election to exercise the
Optionee's stock option to purchase ________________ shares of MedPartners'
common stock, $.001 par value (the "Common Stock"), pursuant to the Stock Option
Award Certificate (the "Certificate") dated September 10, 1998. Optionee has
either included with this Notice or caused to be delivered or transferred to
MedPartners (1) certified funds in the amount of $________________, (2)
_______________ shares of Common Stock presently owned by the undersigned with
an expected Aggregate Stock Price (as defined in Section 4.3 of the Certificate)
as of the date this notice is received by MedPartners of $__________________,
and/or (3) evidence acceptable to MedPartners that Optionee has executed
irrevocable instructions to a broker to deliver promptly to MedPartners the
Aggregate Purchase Price (as defined in Section 4.2(c) of the Certificate) and
to sell the shares of Common Stock to be issued upon exercise of the Option and
deliver the cash proceeds, less commissions and brokerage fees, to Optionee or
to deliver the remaining shares of Common Stock to the Optionee; such amounts
being equal, in the aggregate, to the Exercise Price per share set forth in
Section 2 of the Certificate multiplied by the number of shares being purchased
hereby (in each instance subject to appropriate adjustment pursuant to Section 6
of the Certificate).
Optionee acknowledges and agrees that (i) the purchase or sale of
Common Stock by Optionee is subject to the MedPartners, Inc. Stock Trading
Policy dated May 6, 1998 (as such policy may be amended or supplemented by
MedPartners within its sole discretion); (ii) Optionee has obtained the
necessary approval of MedPartners (if required) to sell the Common Stock; and
(iii) MedPartners shall have the power and the right to deduct or withhold or
require Optionee to remit to MedPartners an amount sufficient to satisfy all
federal, state and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to the exercise of the Option or any
taxable event associated with the Option or the Plan.
The undersigned is a resident of the State of __________.
IN WITNESS WHEREOF, the undersigned has set his/her hand and
seal, this ________ day of ________________, ______.
BY: SS#:
------------------------- -------- ----------------------------
OPTIONEE SIGNATURE DATE
PRINT NAME: DAYTIME PHONE:
------------------ -----------------------------
HOME ADDRESS:
------------------------------------------------------------------
STREET CITY STATE ZIP
- -------------------------------------------------------------------------------
Agreed to and acknowledged:
By: ( ) is ( ) is not a Section 16 Insider
------------------------------
Title: ( ) is ( ) is not a Rule 144 Affiliate
---------------------------
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<PAGE> 1
EXHIBIT 5.1
[KING & SPALDING LETTERHEAD]
September 25, 1998
MedPartners, Inc.
3000 Galleria Tower
Suite 1000
Birmingham, Alabama 35244
Re: Registration Statement on Form S-8 for (i) 7,000,000 shares
of the Common Stock $.001 par value, (together with
Preference Share Purchase Rights to Purchase 1/100th of a
share of Series C Junior Participating Preferred Stock, $.001
par value) (the "Common Stock") issued pursuant to the
MedPartners, Inc. 1998 Employee Stock Option Plan and (ii)
options to acquire 7,000,000 shares of Common Stock issued
pursuant to the Plan
Ladies and Gentlemen:
We have acted as counsel for MedPartners, Inc. (the "Company") in
connection with the preparation of a Registration Statement on Form S-8 (the
"Registration Statement"), filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, relating to the registration of
7,000,000 shares of the Company's common stock, $.001 par value (including
Preference Share Purchase Rights to Purchase 1/100th of a Share of Series C
Junior Participating Preferred Stock, $.001 par value) (the "Common Stock"), to
be issued by the Company from time to time pursuant to the MedPartners, Inc.
1998 Employee Stock Option Plan (the "Plan") and options to acquire Common Stock
issued pursuant to the Plan (the "Options").
In our capacity as such counsel, we have reviewed (i) the Registration
Statement and (ii) the Plan and we have considered such matters of law and
examined the originals or copies, certified or otherwise identified to our
satisfaction, of such documents and corporate and other records and have
obtained such certificates, letters, representations and information from the
officers, directors and employees of the Company and from others as we have
deemed necessary or appropriate to enable us to render the opinions expressed
herein.
Based upon and in reliance upon the foregoing, and subject to the
qualifications and assumptions set forth below, it is our opinion that, (a) the
Options have been duly authorized and (b) upon exercise of the Options in
accordance with the Plan, the shares of Common Stock to be issued thereby, when
issued in accordance with the Plan, will be validly issued, fully paid and
nonassessable.
Our opinion is limited by and subject to the following:
(a) In rendering our opinion we have assumed that, at the time of each
issuance and sale of the Common Stock, the Company will be a corporation
validly existing and in good standing under the laws of the State of Delaware.
(b) In our examination of all documents, certificates and records, we
have assumed without investigation the authenticity and completeness of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity and completeness of the
originals of all documents submitted to us as copies. We have also assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authority of all persons executing documents on behalf of the parties thereto
other than the Company, and the due authorization, execution and delivery of all
documents by the parties thereto other than the Company. As to matters of fact
material to this opinion, we have relied upon statements and representations of
representatives of the Company and of public officials and have assumed the same
to have been properly given and to be accurate.
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<PAGE> 2
(c) Our opinion is based solely on and limited to the federal laws of
the United States of America and the General Corporation Law of the State of
Delaware. We express no opinion as to the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
King & Spalding
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<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- ) pertaining to the MedPartners, Inc. 1998 Employee
Stock Option Plan of our reports dated March 13, 1998, with respect to the
consolidated financial statements of MedPartners, Inc., included in its Annual
Report on Form 10-K for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Birmingham, Alabama
September 25, 1998
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