<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 22, 1996
REGISTRATION NO. 33-
----------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------------------
RISCORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
Florida 65-0335150
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
1390 Main Street, Sarasota, Florida 34236-5642
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
</TABLE>
RISCORP, INC.
1995 NONQUALIFIED STOCK OPTION PLAN
AND
1996 NONQUALIFIED FORMULA STOCK OPTION PLAN
(FULL TITLES OF THE PLANS)
----------------------
Gregory M. Marks, Esq.
Senior Vice President and General Counsel
RISCORP, Inc.
1390 Main Street
Sarasota, Florida 34236-5642
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(941) 951-2022
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS TO:
Richard A. Halloy
Senior Vice President and Chief Financial Officer
RISCORP, Inc.
1390 Main Street
Sarasota, Florida 34236-5642
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE
OFFERED ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE
SECURITIES ACT OF 1933, CHECK THE FOLLOWING BOX. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Amount maximum maximum Amount of
securities to be offering price aggregate registration
to be registered Registered per unit* offering price* fee
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common stock,
par value $.01
per share . . . . . . . . 3,128,832 shares $3.8125 $11,928,672.00 $3,614.75
- -----------------------------------------------------------------------------------------------------------
</TABLE>
* ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE. THE
FEE IS CALCULATED UPON THE BASIS OF THE AVERAGE BETWEEN THE HIGH AND LOW
SALES PRICE FOR SHARES OF COMMON STOCK OF THE REGISTRANT AS REPORTED BY THE
NASDAQ NATIONAL MARKET ON NOVEMBER 21, 1996.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission are incorporated by reference:
(1) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1996;
(2) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1996;
(3) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1996;
(4) The description of the Company's common stock contained in the
Company's Registration Statement on Form S-1, file number 33-99760, filed
November 22, 1995, and as amended by amendments filed January 8, 1996,
February 6, 1996, February 23, 1996 and February 28, 1996, relating to the
offer and sale by the Company and a selling shareholder of 10,000,000 shares of
Class A common stock to the public.
All documents subsequently filed by the Company pursuant to Sections
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 hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Florida corporation. The Florida Business Corporation
Act, as amended (the "Florida Act"), provides that, in general, a business
corporation may indemnify any person who is or was a party to any proceeding
(other than an action by, or in the right of, the corporation) by reason of the
fact that he is or was a director or officer of the corporation, against
liability incurred in connection with such proceeding, including any appeal
thereof, provided certain standards are met, including that such officer or
director acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the corporation, and provided further
that, with respect to any criminal action or proceeding, the officer or director
had no reasonable cause to believe his conduct was unlawful. In the case of
proceedings by or in the right of the corporation, the Florida Act provides
that, in general, a corporation may indemnify any person who was or is a party
to any such proceeding by reason of the fact that he is or was a director or
officer of the corporation against expenses and amounts paid in settlement
actually and reasonably incurred in connection with the defense or settlement of
such proceeding, including any appeal thereof, provided that such person acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation, except that no indemnification shall
be made in respect of any claim as to which such person is adjudged liable
unless a court of competent jurisdiction determines upon application that such
person is fairly and reasonably entitled to indemnity. To the extent that any
officers or directors are successful on the merits orotherwise in the defense
of any of the proceedings described above, the Florida Act provides that the
II-1
<PAGE> 3
corporation is required to indemnify such officers or directors against expenses
actually and reasonably incurred in connection therewith. However, the Florida
Act further provides that, in general, indemnification or advancement of
expenses shall not be made to or on behalf of any officer or director if a
judgment or other final adjudication establishes that his actions, or omissions
to act, were material to the cause of action so adjudicated and constitute: (i)
a violation of the criminal law, unless the director or officer had reasonable
cause to believe his conduct was lawful or had no reasonable cause to believe it
was unlawful; (ii) a transaction from which the director or officer derived an
improper personal benefit; (iii) in the case of a director, a circumstance under
which the director has voted for or assented to a distribution made in violation
of the Florida Act or the corporation's articles of incorporation; or (iv)
willful misconduct or a conscious disregard for the best interests of the
corporation in a proceeding by or in the right of the corporation to procure a
judgment in its favor or in a proceeding by or in the right of a shareholder.
Article V of the Company's Bylaws provides that the Company shall indemnify any
director, officer, employee or agent or any former director, officer, employee
or agent to the full extent permitted by Florida law.
The Company has purchased insurance with respect to, among other things,
any liabilities that may arise under the statutory provisions referred to
above.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 RISCORP, Inc. 1995 Nonqualified Stock Option Plan.
4.2 RISCORP, Inc. 1996 Nonqualified Formula Stock Option Plan.
4.3 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1, file number 33-99760, filed
November 22, 1995, and as amended by amendments filed January
8, 1996, February 6, 1996, February 23, 1996, and February 28, 1996,
relating to the offer and sale by the Company and a selling
shareholder of 10,000,000 shares of Class A common stock to the
public.
4.4 Amended and Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.2 to the Company's Registration
Statement on Form S-1, file number 33-996760, filed November 22,
1995, and as amended by amendments filed January 8, 1996, February
6, 1996, February 23, 1996, and February 28, 1996, relating to offer
and sale by the Company and a selling shareholder of 10,000,000
shares of Class A common stock to the public).
4.5 Form of Stock Certificate for the Class A Common Stock of the
Company (incorporated by reference to Exhibit 4.1 of the
Company's Registration Statement on Form S-1, file number 33-99760,
filed November 22, 1995, and as amended by amendments filed January
8, 1996, February 6, 1996, February 23, 1996, and February 28, 1996,
relating to the offer and sale by the Company and a selling
shareholder of 10,000,000 shares of Class A common stock to the
public)
5.1 Opinion of Gregory M. Marks, Esq. as to the legality of the
securities being registered hereunder.
23.1 Consent of Gregory M. Marks, Esq. (contained in Exhibit 5.1 hereto).
24.1 Powers of Attorney (included on signature page).
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 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;
II-2
<PAGE> 4
(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 (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 by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered herein, 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 of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions (see
Item 6) or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange 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 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 Act and will be governed by the final adjudication of such
issue.
II-3
<PAGE> 5
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 Sarasota, State of Florida, on November 22, 1996.
RISCORP, INC.
By: /s/ William D. Griffin
-------------------------------------------
William D. Griffin, Chief Executive Officer
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gregory M. Marks, Richard Halloy, and
Walter E. Riehemann, jointly and severally, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign any and
all amendments of this registration statement and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may 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>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ William D. Griffin Chief Executive Officer and Director November 22, 1996
- -------------------- (Principal Executive Officer)
William D. Griffin
/s/ James A. Malone
- -------------------- Chief Operating Officer and Director November 22, 1996
James A. Malone
/s/ Richard Halloy Chief Financial Officer and Director November 22, 1996
- -------------------- (Principal Financial and Accounting
Richard Halloy Officer)
/s/ Walter L. Revell
- -------------------- Director November 22, 1996
Walter L. Revell
- -------------------- Director November __, 1996
George E. Greene III
- --------------------
Seddon Goode, Jr. Director November __, 1996
/s/ L. Scott Merritt
- --------------------
L. Scott Merritt Treasurer and Director November 22, 1996
</TABLE>
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ ----------- ------------
<S> <C> <C>
4.1 RISCORP, Inc. 1995 Nonqualified Stock Option Plan
4.2 RISCORP, Inc. 1996 Nonqualified Formula Stock Option
Plan.
4.3 Amended and Restated Articles of Incorporation of the
Company (incorporated by reference to Exhibit 3.1 to
the Company's Registration Statement on Form S-1, file
number 33-99760, filed November 22, 1995, and as
amended by amendments filed January 8, 1996, February
6, 1996, February 23, 1996, and February 28,1996,
relating to the offer and sale by the Company and a
selling shareholder of 10,000,000 shares of Class A
common stock to the public).
4.4 Amended and Restated Bylaws of the Company
(incorporated reference to Exhibit 3.2 to the
Company's Registration Statement on Form S-1, filed
November 22, 1995, and as amended by amendments filed
January 8, 1996, February 6, 1996, February 23, 1996,
and February 28, 1996, relating to the offer and
sale by the Company and a selling shareholder of
10,000,000 shares of Class A common stock to the
public).
4.5 Form Stock Certificate for the Class A Common Stock of
the Company (incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on S-1, file
number 33-99760, filed November 22, 1995, and as
amended by amendments filed January 8, 1996, February
6, 1996, February 23, 1996, February 28, 1996, relating
to the offer and sale by the Company and a selling
shareholder of 10,000,000 shares of Class A common stock
to the public).
5.1 Opinion of Gregory M. Marks, Esq.
23.1 Consent of Gregory M. Marks, Esq. (contained in Exhibit
5.1 hereto).
24.1 Powers of Attorney (included on signature page).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
RISCORP, INC.
1995 NONQUALIFIED STOCK OPTION PLAN
<PAGE> 2
RISCORP, INC.
1995 NONQUALIFIED STOCK OPTION PLAN
THIS INDENTURE is made this 21st day of November 1995 by RISCORP,
Inc., a Florida corporation (hereinafter called the "Company");
W I T N E S S E T H:
WHEREAS, the Company desires to promote in its employees and employees
of its affiliates the strongest interest in the growth and success of the
business of the Company and the assurance that they will share in the
prosperity of the business of the Company;
WHEREAS, to that end the Company desires to provide those employees
who are eligible hereunder with nonqualified stock options to purchase shares
of the Company and, accordingly, has formulated the stock option plan herein
embodied;
NOW THEREFORE, the Company does hereby establish the RISCORP, Inc.
1995 Stock Option Plan (hereinafter called the "Plan") so that it shall read in
its entirety as follows:
<PAGE> 3
RISCORP, INC.
1995 NONQUALIFIED STOCK OPTION PLAN
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1 DEFINITIONS 1
SECTION 2 ADMINISTRATION 2
SECTION 3 ELIGIBILITY 2
SECTION 4 SHARES SUBJECT TO PLAN 3
SECTION 5 TERMS AND CONDITIONS 3
SECTION 6 TERM OF PLAN 3
SECTION 7 INDEMNIFICATION OF COMMITTEE 4
SECTION 8 AMENDMENT AND TERMINATION OF THE PLAN 4
SECTION 9 NO OBLIGATION TO EXERCISE OPTION 4
SECTION 10 ADJUSTMENT IN OPTION SHARES AND
EXERCISE PRICE 4
SECTION 11 GENERAL RESTRICTION 5
SECTION 12 RIGHTS AS A STOCKHOLDER 5
</TABLE>
<PAGE> 4
RISCORP, INC.
1995 NONQUALIFIED STOCK OPTION PLAN
SECTION 1
DEFINITIONS
Wherever used herein, the masculine pronoun shall be deemed to include
the feminine, and the singular to include the plural, unless the context
clearly indicates otherwise, and the following words and phrases shall, when
used herein, have the meanings set forth below:
1.1 "Act" means the Securities Exchange Act of 1934.
1.2 "Affiliate" means (a) an entity that directly or through one
or more intermediaries is controlled by the Company, (b) any entity in which
the Company has a significant equity interest, as determined by the Company and
(c) each Griffin Company.
1.3 "Agreement" means a Stock Option Agreement, which is an
agreement subject to the terms of the Plan.
1.4 "Board of Directors" means the Board of Directors of the
Company.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Committee" means the committee appointed by the Board of
Directors to administer the Plan.
1.7 "Employee" means any person who is employed by the Company or
an Affiliate for purposes of the Federal Insurance Contributions Act and any
consultant retained to provide services to the Company or an Affiliate.
1.8 "Griffin Company" means any entity in which William D. Griffin
owns, directly or indirectly (after application of the attribution rules of
Section 318 of the Code), 50% or more of the total outstanding equity
interests, determined on a voting or value basis.
1.9 "Option" means an option to purchase Shares pursuant to and in
accordance with the provisions of the Plan.
1.10 "Optionee" means an Employee who is granted an Option pursuant
to and in accordance with the provisions of the Plan.
1.11 "Option Shares" means Shares subject to and issued pursuant to
an exercise of an Option granted under the Plan.
<PAGE> 5
1.12 "Share" means a share of the Class A common stock of the
Company and/or any shares of stock of another corporation or corporations
issued in exchange for a share of Class A common stock of the Company as a
result of a merger, consolidation or other adjustment to the capital structure
of the Company.
SECTION 2
ADMINISTRATION
2.1 Delegation to Committee. The Plan shall be administered by
the Committee. The members of the Committee shall be appointed by the Board of
Directors. After the registration of an equity security of the Company under
Section 12 of the Act, the Committee shall consist of at least two (2) members
of the Board of Directors and no person shall be appointed as a member of the
Committee who is, or within one (1) year prior to his becoming a member of the
Committee was, granted or awarded equity securities pursuant to the Plan or any
other plan of the Company or an "affiliate" within the meaning of Rule 16b-3
under Section 16(b) of the Act, except that participation in any plan which
does not disqualify a director from being disinterested as provided in Rule
16b-3 shall not disqualify a person from being a member of the Committee. The
Board of Directors may from time to time remove members from or add members to
the Committee. Vacancies on the Committee shall be filled by the Board of
Directors.
2.2 Committee Actions. The Committee shall select one of its
members as chairman, and shall hold meetings at such times and places as it may
determine. Acts approved by the majority of the Committee in a meeting at
which a quorum is present or acts reduced to or approved in writing by a
majority of the members of the Committee shall be the valid acts of the
Committee. A quorum shall be present at any meeting of the Committee which a
majority of the Committee members attend.
2.3 Finality. The Committee shall have the authority in its sole
discretion to interpret the Plan, to grant Options under and in accordance with
the provisions of the Plan, and to make all other determinations and to take
all other actions it deems necessary or advisable for the implementation and
administration of the Plan or Agreements thereunder, except to the extent such
powers are herein reserved by the Board of Directors. All actions of the Board
of Directors and the Committee shall be final, conclusive, and binding upon the
Optionees. No member of the Board of Directors or the Committee shall be
liable for any action taken or decision made in good faith relating to the Plan
or any grant of an Option thereunder.
SECTION 3
ELIGIBILITY
Employees who are designated by the Committee upon the recommendation
of the officers of the Company shall be eligible to receive Options under the
Plan on the terms and subject to the restrictions hereinafter set forth.
2
<PAGE> 6
SECTION 4
SHARES SUBJECT TO PLAN
4.1 The aggregate number of Option Shares which may be issued
under the Plan shall at no time exceed 3,118,832. The number of Shares with
respect to which an Option may be granted to any individual shall be determined
by the Committee. The limitations established by this Section shall be subject
to adjustment in accordance with the provisions of the Plan. Notwithstanding
the foregoing, to the extent required under Code Section 162(m) and the
regulations thereunder for compensation to be treated as qualified
performance-based compensation, the maximum number of Shares with respect to
which Options may be granted during any one year period to any Employee shall
not exceed 500,000 Shares.
4.2 In the event that an Option expires or is terminated for any
reason, the Option Shares allocable to the unexercised portion of such Option
may again be subjected to an Option under the Plan.
4.3 In the event that an Optionee delivers Shares as payment of
the exercise price for an Option, such Shares may be subjected to Options under
the Plan.
SECTION 5
TERMS AND CONDITIONS
5.1 Grant of Option. Each Option granted pursuant to the Plan
shall be authorized by the Committee.
5.2 Stock Option Agreement. Each Option shall be evidenced by an
Agreement, in such form and containing such terms and conditions as the
Committee from time to time may determine, provided that each Agreement:
(a) shall state the number of Option Shares to which it
pertains;
(b) shall state the exercise price and exercise period;
and
(c) shall provide that the Option is exercisable, with
respect to the number of Shares to which it pertains, only if and to
the extent that the Optionee is vested pursuant to the vesting
provisions set forth in the Agreement.
SECTION 6
TERM OF PLAN
The Plan shall be effective on the date hereof and shall continue to
be effective until ten (10) years following the earlier of the effective date
of the Plan or the date the stockholders approve the Plan, unless sooner
terminated by the Board of Directors
3
<PAGE> 7
pursuant to Section 8 hereof. The Company shall submit the Plan to its
stockholders for approval within twelve (12) months of the adoption of the Plan
by the Board of Directors.
SECTION 7
INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification that the members
of the Committee may have, each member of the Committee shall be indemnified by
the Company against reasonable expenses, including attorneys' fees, actually
and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which it may be a
party by reason of any action taken or failure to act under or in connection
with the Plan or any Option granted thereunder, and against all amounts paid by
it in settlement thereof (provided the settlement has received the prior
approval of the Company) or paid by it in satisfaction of a judgment in any
such action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in the action, suit or proceeding that the Committee member
is liable for negligence or misconduct in the performance of its duties;
provided that promptly after the institution of the action, suit or proceeding
the Committee member shall in writing offer the Company the opportunity, at its
own expense, to handle and defend such matter. Upon the delivery to the
Committee member of written notice of assumption by the Company of the defense
of such matter, the Company will not be responsible to the Committee member for
any further fees and disbursements relating to the defense of such matter,
including fees and disbursements of counsel.
SECTION 8
AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors may, insofar as permitted by law, from time to
time, with respect to any Shares at the time not subject to Options, suspend or
terminate the Plan or revise or amend it in any respect whatsoever.
SECTION 9
NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the Optionee
to exercise the Option.
SECTION 10
ADJUSTMENT IN OPTION SHARES AND EXERCISE PRICE
If (i) the number of shares shall be increased or reduced by a change
in par value, split-up, stock split, reverse stock split, reclassification,
merger, consolidation, distribution of stock dividends or similar capital
adjustments, or (ii) the Company engages in a transaction for which the
Committee determines an adjustment is appropriate, then the Committee may make
an adjustment in the number and kind of Shares available for the
4
<PAGE> 8
granting of Options under the Plan. In addition, the Committee may, in its
sole and absolute discretion, make an adjustment in the number, kind and price
of Shares as to which outstanding Options, or the portions thereof then
unexercised, shall be exercisable, to the end that the Optionee's proportionate
interest is maintained as before the occurrence of the event. The adjustment
in outstanding Options will be made without change in the total price
applicable to the unexecuted portion of the Option and, if necessary, with a
corresponding adjustment in the Option price per share. Any fractional Shares
resulting from such adjustments shall be eliminated. All adjustments made by
the Committee under this Section shall be conclusive.
Notwithstanding the foregoing paragraph, the Committee shall have the
right to terminate the Options granted under the Plan in consideration of the
payment to the Optionees of the difference between (a) and (b) where (a) equals
the then fair market value of the Option Shares to the extent vested and (b)
equals the Option price for the Option Shares to the extent vested.
Alternatively, upon termination of an Option granted under the Plan, the
Committee may grant the Optionee a substitute option to acquire an equity
interest in an Affiliate in the manner set forth in the Agreement.
SECTION 11
GENERAL RESTRICTION
Notwithstanding anything contained herein or in any of the Agreements
to the contrary, no purported exercise of any Option shall be effective without
the written approval of the Company, which may be withheld to the extent that
the exercise, either individually or in the aggregate together with the
exercise of other previously exercised stock Options and/or offers and sales
pursuant to any prior or contemplated offering of securities, would, in the
sole and absolute judgment of the Company, require the filing of a registration
statement with the United States Securities Exchange Commission or with the
securities commission of any state. The Company shall avail itself of any
exemptions from registration contained in applicable federal and state
securities laws which are reasonably available to the Company on terms which,
in its sole and absolute discretion, it deems reasonable and not unduly
burdensome or costly. Each Optionee shall, prior to the exercise of an Option,
deliver to the Company such information, representations and warranties as the
Company may reasonably request in order for the Company to be able to satisfy
itself that the Shares to be acquired pursuant to the exercise of an Option are
being acquired in accordance with the terms of an applicable exemption from the
securities registration requirements of applicable federal and state securities
laws.
SECTION 12
RIGHTS AS A STOCKHOLDER
An Optionee or a transferee of an Optionee shall have no rights as a
stockholder with respect to any Option or Option Shares until the date of the
issuance of a stock certificate to him for the Option Shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions
5
<PAGE> 9
or other rights for which the record date is prior to the date the stock
certificate is issued, except as otherwise provided in the Plan.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed as
of the day and year first above written.
RISCORP, INC.
/s/ Edward J. Hammel
------------------------------
By: Edward J. Hammel
Title: Vice President
ATTEST:
- --------------------------
Title:
------------------------
[CORPORATE SEAL]
6
<PAGE> 1
EXHIBIT 4.2
RISCORP, INC.
1996 NONQUALIFIED FORMULA STOCK OPTION PLAN
<PAGE> 2
RISCORP, INC.
1996 NONQUALIFIED FORMULA STOCK OPTION PLAN
THIS INDENTURE is made this 28 day of February 1996, by RISCORP, Inc.,
a Florida corporation (hereinafter called the "Company");
INTRODUCTION
The Company is adopting the RISCORP, Inc. 1996 Formula Stock Option
Plan (the "Plan") to provide nonemployee directors with a non-qualified stock
option ("Option") when they first join the Company to purchase 1,000 shares of
Company Class A Common Stock. The Board of Directors of the Company believes
this Plan will promote personal interest in the welfare of the Company by, and
provide incentive to, the individuals who are primarily responsible both for
the regular operations of and for shaping and carrying out the long term plans
of the Company, thus facilitating the continued growth and financial success of
the Company.
<PAGE> 3
RISCORP, INC.
1996 NONQUALIFIED FORMULA STOCK OPTION PLAN
TABLE OF CONTENTS
Page
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<TABLE>
<S> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2 ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 3 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4 SHARES SUBJECT TO PLAN . . . . . . . . . . . . . . . . . . 2
SECTION 5 FORMULA AND TERMS AND CONDITIONS . . . . . . . . . . . . . 2
SECTION 6 TERM OF PLAN . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 7 INDEMNIFICATION OF COMMITTEE . . . . . . . . . . . . . . . 3
SECTION 8 AMENDMENT AND TERMINATION OF THE PLAN . . . . . . . . . . 4
SECTION 9 NO OBLIGATION TO EXERCISE OPTION. . . . . . . . . . . . . 4
SECTION 10 ADJUSTMENT IN OPTION SHARES AND EXERCISE PRICE . . . . . . 4
SECTION 11 WITHHOLDING TAXES . . . . . . . . . . . . . . . . . . . . 5
SECTION 12 RIGHTS AS A STOCKHOLDER. . . . . . . . . . . . . . . . . . 5
SECTION 13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>
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<PAGE> 4
SECTION 1 DEFINITIONS
Wherever used herein, the masculine pronoun shall be deemed to include
the feminine, and the singular to include the plural, unless the context
clearly indicates otherwise, and the following words and phrases shall, when
used herein, have the meanings set forth below:
1.1 "Act" means the Securities Exchange Act of 1934.
1.2 "Affiliate" means (a) an entity that directly or through one
or more intermediaries is controlled by the Company, and (b) any entity in
which the Company has a significant equity interest, as determined by the
Company.
1.3 "Agreement" means a stock option agreement, which is an
agreement subject to the terms of the Plan.
1.4 "Board of Directors" means the Board of Directors of the
Company.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Committee" means the committee appointed by the Board of
Directors to administer the Plan.
1.7 "Director" means a director of the Company.
1.8 "Employee" means any person who is employed by the Company or
an Affiliate for purposes of the Federal Insurance Contributions Act and any
consultant retained to provide services (other than in the capacity of a
director) to the Company or an Affiliate.
1.9 "Option" means an option to purchase Shares of the Company
granted pursuant to and in accordance with the provisions of the Plan.
1.10 "Optionee" means a Director who is granted an Option pursuant
to and in accordance with the provisions of the Plan.
1.11 "Option Shares" means Shares subject to and issued pursuant to
an exercise of an Option granted under the Plan.
1.12 "Share" means a share of Class A Common Stock of the Company
and/or any share or shares of stock of another corporation or corporations
issued in exchange for a share of Class A Common Stock of the Company as a
result of a merger, consolidation or other adjustment to the capital structure
of the Company.
1.13 "Valuation Date" means January 1.
SECTION 2 ADMINISTRATION
2.1 Delegation to Committee. The Plan shall be administered by the
Committee. The members of the Committee shall be appointed by the Board of
Directors. The Committee shall
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consist of at least one or more members of the Board of Directors who have not
received a grant of an Option under the Plan which remains outstanding and who
are not currently eligible to receive a grant of an Option under the Plan. The
Board of Directors may from time to time remove members from or add members to
the Committee. Vacancies on the Committee shall be filled by the Board of
Directors.
2.2 Committee Actions. The Committee shall select one of its
members as chairman, and shall hold meetings at such times and places as it may
determine. Acts approved by the majority of the Committee in a meeting at
which a quorum is present or acts reduced to or approved in writing by a
majority of the members of the Committee shall be the valid acts of the
Committee. A quorum shall be present at any meeting of the Committee which a
majority of the Committee members attend.
2.3 Finality. The Committee shall have the authority in its sole
discretion to interpret the Plan, to grant Options under and in accordance with
the provisions of the Plan, and to make all other determinations and to take
all other actions it deems necessary or advisable for the implementation and
administration of the Plan or Agreements thereunder, except to the extent such
powers are herein reserved by the Board of Directors. All actions of the Board
of Directors and the Committee shall be final, conclusive, and binding upon the
Optionees. No member of the Board of Directors or the Committee shall be
liable for any action taken or decision made in good faith relating to the Plan
or any grant of an Option thereunder.
SECTION 3 ELIGIBILITY
Directors who are not Employees shall be eligible to receive Options
under the Plan on the terms and subject to the restrictions hereinafter set
forth.
SECTION 4 SHARES SUBJECT TO PLAN
4.1 The aggregate number of Option Shares which may be issued
under the Plan shall at no time exceed 10,000. The limitations established by
this Section shall be subject to adjustment in accordance with the provisions
of the Plan.
4.2 In the event that an Option expires or is terminated for any
reason, the Option Shares allocable to the unexercised portion of such Option
may again be subjected to an Option under the Plan.
4.3 In the event that an Optionee delivers Shares as payment of
the exercise price for an Option, such Shares may be subjected to Options under
this Plan.
SECTION 5 FORMULA AND TERMS AND CONDITIONS
5.1 Each Director who is not an Employee shall be granted an
Option to purchase 1,000 Shares on the date of the final prospectus in
connection with the Company's initial public offering of Shares. Any person
who thereafter becomes Director who is not an Employee shall be granted an
Option to purchase 1,000 Shares on the date he or she first becomes a Director
who is not an Employee.
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<PAGE> 6
5.2 The exercise price of each Share granted pursuant to each
Option granted on the date of the final prospectus in connection with the
Company's initial public offering of Shares shall be the public offering price
set forth on the cover of the final prospectus. Thereafter, the exercise price
of each share granted pursuant to an Option shall be the Fair Market Value of a
Share on the first trading day preceding the day the Option is granted. "Fair
Market Value" means:
(1) if the Shares are actively traded on any
national securities exchange or reported by NASDAQ on a basis
which reports closing sales prices, the closing sales price
per Share on such day;
(2) if the Shares are otherwise traded over the
counter, fair market value shall be the arithmetic mean of the
final bid and asked prices per Share on such day;
(3) if Shares are not publicly traded, the fair
market value as determined by the Committee on the Valuation
Date most recently preceding the date for which the value is
being determined, unless the Committee determines that the
fair market value needs to be redetermined or updated to
reflect substantial changes in the Company since the
immediately preceding Valuation Date which it is anticipated
may have a material effect upon the fair market value of the
Company. For purposes of this Subsection (3), Fair Market
Value shall be determined on a fully distributed basis without
regard to among other things, illiquidity, the effect of the
Option Shares, shareholder distributions, initial public
offering market discounts, or change of control premiums,
while taking into account all relevant facts and circumstances
including, but not limited to, the future business plans of
the Company as of that date.
5.3 Options shall be subject to the vesting schedule attached
hereto as Exhibit 1 and, except as otherwise provided below, may be exercised,
to the extent vested, following the date of grant and ending on the first to
occur of the following dates: (1) ten (10) years following the date of grant;
(2) the date the Committee exercises its right pursuant to Section 10 to
terminate the Option; (3) the date the Optionee ceases, as a result of
voluntary resignation, to be an Employee, Director or a director of an
Affiliate; or (4) if the Optionee dies, becomes subject to a Disability, or
retires after reaching age 65 while an Employee or Director or director of an
Affiliate, six months following the date of termination. Each Option granted
pursuant to this Plan shall be authorized by the Committee, shall be evidenced
by an Agreement and shall be subject to such additional terms as set forth in
the Agreement.
SECTION 6 TERM OF PLAN
The Plan shall be effective on the date hereof and shall continue to
be effective until ten (10) years following the earlier of the effective date
of the Plan or the date the stockholders approve the Plan, unless sooner
terminated by the Board of Directors pursuant to Section 8 hereof. The Company
shall submit the Plan to its stockholders for approval within twelve (12)
months of the adoption of the Plan by the Board of Directors.
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<PAGE> 7
SECTION 7 INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification that the members
of the Committee may have, each member of the Committee shall be indemnified by
the Company against the reasonable expenses, including attorneys' fees,
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to which it may
be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Option granted thereunder, and against all
amounts paid by it in settlement thereof (provided the settlement has received
the prior approval of the Company) or paid by it in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in the action, suit or proceeding that the Committee
member is liable for negligence or misconduct in the performance of its duties;
provided that promptly after institution of the action, suit or proceeding the
Committee member shall in writing offer the Company the opportunity, at its own
expense, to handle and defend such matter. Upon the delivery to the Committee
member of written notice of assumption by the Company of the defense of such
matter, the Company will not be responsible to the Committee member for any
further fees and disbursements relating to the defense of such matter,
including fees and disbursements of counsel.
SECTION 8 AMENDMENT AND TERMINATION OF THE PLAN
With respect to provisions of the Plan relating to eligibility and to
the amount, price and timing of an Option, to the extent required under Rule
16b-3 for grants to constitute formula grants that allow Optionees to remain
disinterested, the Plan may not be amended by the Board of Directors more than
once every six months, other than to conform it with changes in the Code, the
Employee Retirement Income Security Act of 1974, or any rules under either of
the foregoing. Except as otherwise provided in this Section, the Board of
Directors at any time may amend or terminate the Plan without shareholder
approval; provided, however, that the Board of Directors may condition any
amendment on the approval of the shareholders of the Company if such approval
is necessary or advisable with respect to tax, securities (which require such
approval for a material increase of the number of Shares subject to Options and
for material modifications to the eligibility requirements of this Plan, among
other amendments) or other applicable laws to which the Company, this Plan,
optionees or eligible employees or directors are subject. No amendment or
termination of the Plan shall adversely affect the rights of an optionee with
regard to his Options without his consent.
SECTION 9 NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the Optionee
to exercise the Option.
SECTION 10 ADJUSTMENT IN OPTION SHARES AND EXERCISE PRICE
If (i) the number of Shares shall be increased or reduced by a change
in par value, split-up, stock split, reverse stock split, reclassification,
merger, consolidation, distribution of stock dividends or similar capital
adjustments, or (ii) the Company engages in a transaction for which the
Committee determines an adjustment is appropriate, then the Committee may make
an adjustment in the number and kind of Shares available for the granting of
Options under the Plan. In addition, the Committee may, in its sole and
absolute discretion, make an adjustment in the number, kind and price of Shares
as to which outstanding Options, or the portions thereof then unexercised,
shall be exercisable, to
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<PAGE> 8
the end that the Optionee's proportionate interest is maintained as before the
occurrence of the event. The adjustment in outstanding Options will be made
without change in the total price applicable to the unexercised portion of the
Option and, if necessary, with a corresponding adjustment in the Option price
per share. Any fractional Shares resulting from such adjustments shall be
eliminated. All adjustments made by the Committee under this Section shall be
conclusive.
Notwithstanding the foregoing paragraph, the Committee shall have the
right to terminate the Options granted under the Plan in consideration of the
payment to the Optionees of the difference between (a) and (b) where (a) equals
the then Fair Market Value of the Option Shares to the extent vested and (b)
equals the Option price of the Option Shares to the extent vested.
Alternatively, upon termination of an Option granted under the Plan, the
Committee may grant the Optionee a substitute option to acquire an equity
interest in an Affiliate in the manner set forth in an Agreement.
SECTION 11 WITHHOLDING TAXES
Whenever the Company proposes or is required to issue Shares to an
optionee who is or was an employee of the Company or a Subsidiary, or to his
legatee or legal representative under this Plan, pursuant to the exercise of an
Option granted under this Plan, the Company shall have the right to require the
recipient to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirement, if any, prior to the delivery of
any certificate or certificates for such Shares. An optionee must pay the
withholding tax in cash or by certified check or by the Company deducting a
sufficient number of Shares from the Option Shares issued to satisfy
withholding taxes, in accordance with the Agreement.
SECTION 12 RIGHTS AS A STOCKHOLDER
An Optionee or a transferee of an Optionee shall have no rights as a
stockholder with respect to any Option or Option Shares until the date of the
issuance of a stock certificate to him for the Option Shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date the stock certificate is issued, except as
otherwise provided in the Plan.
SECTION 13 GOVERNING LAW
The laws of the State of Florida shall govern this Plan.
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IN WITNESS WHEREOF, the Company has caused the Plan to be executed as
of the day and year first above written.
RISCORP, INC.
By: /s/ James A. Malone
--------------------------
James A. Malone
Title: President
ATTEST:
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Title:
--------------------------
[CORPORATE SEAL]
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<PAGE> 1
[RISCORP LETTERHEAD] EXHIBIT 5.1
November 22, 1996
RISCORP, Inc.
1390 Main Street
Sarasota, Florida 34236-5642
Re: Registration Statement on Form S-8
Gentlemen:
I refer to the Registration Statement (the "Registration Statement") on
Form S-8 filed today by RISCORP, Inc. (the "Company") with the Securities and
Exchange Commission, for the purpose of registering under the securities act of
1933 an aggregate of 3,128,832 shares (the "Shares") of the authorized Class A
common stock, par value $.01 per share, of the Company being offered to certain
directors of the Company pursuant to the Company's 1995 Nonqualified Stock
Option Plan and the 1996 Nonqualified Formula Stock Option Plan (collectively,
the "Plans").
In connection with the foregoing registration, I have acted as counsel for
the Company and have examined originals, or copies certified to my
satisfaction, of such corporate records of the Company, certificates of public
officials, and representatives of the Company, and other documents as I deemed
necessary to deliver the option expressed below.
Based upon the foregoing, and having regard for legal considerations that
I deem relevant, it is my opinion that the Shares will be, when and if issued,
in accordance with the exercise of options granted under the Plans, duly
authorized, validly issued, and fully paid and non-assessable.
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
/s/ Gregory M. Marks
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GREGORY M. MARKS
Senior Vice President and General Counsel
RISCORP, Inc.
sk/GMM
