<PAGE> 1
As filed with the Securities and Exchange Commission on December 5, 1997
Registration No. 333-
----------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PHYSICIANS' SPECIALTY CORP.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
58-2251438
(I.R.S. employer identification no.)
1150 LAKE HEARN DRIVE, SUITE 640, ATLANTA, GEORGIA 30342
(Address of principal executive offices) (Zip code)
PHYSICIANS' SPECIALTY CORP. 1997 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
RAMIE A. TRITT, M.D.
1150 LAKE HEARN DRIVE, SUITE 640
ATLANTA, GEORGIA 30342
(Name and address of agent for service)
(404) 256-7535
(Telephone number, including area code, of agent for service)
Copy to:
Jill Cohen, Esq.
Bachner, Tally, Polevoy & Misher LLP
380 Madison Avenue
New York, New York 10017
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of each Class of Amount to Price Per Offering Registration
Securities to be Registered be Registered(1) Share(2) Price Fee
- --------------------------- ---------------- --------- --------- ------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 250,000 $10.125 $2,531,250 $746.72
</TABLE>
- -----------------------------
(1) Pursuant to Rule 416, promulgated under the Securities Act of 1933, as
amended, an additional undeterminable number of shares of Common Stock
is being registered to cover any adjustment in the number of shares of
Common Stock pursuant to the anti-dilution provisions of the 1997
Employee Stock Purchase Plan.
(2) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. The price shown is the average of
the high and low price of the Common Stock on December 3, 1997 as
reported on Nasdaq.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I
will be sent or given to employees as specified by Rule 428(b)(1). In
accordance with the instructions to Part I of Form S-8, such documents will not
be filed with the Commission either as part of this registration statement or
as prospectuses or prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The documents listed below are hereby incorporated by
reference into this Registration Statement. In addition, all documents
subsequently filed by Physicians' Specialty Corp. (the "Registrant") pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
(prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold) shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing such
documents:
(a) the Registrant's Prospectus dated March 20,
1997;
(b)(1) the Registrant's Quarterly Report on Form
10-Q for the three-month period ended March
31, 1997;
(b)(2) the Registrant's Quarterly Report on Form
10-Q for the six-month period ended June
30, 1997;
(b)(3) the Registrant's Quarterly Report on Form
10-Q for the nine month period ended
September 30, 1997; and
(c) the Registrant's Registration Statement on
Form 8-A declared effective by the
Securities and Exchange Commission on March
20, 1997, including any amendment or
supplement thereto.
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<PAGE> 3
Item 6. Indemnification of Directors and Officers
The Certificate of Incorporation and By-Laws of the
Registrant provides that the Registrant shall indemnify any person to the full
extent permitted by the Delaware General Corporation Law (the "GCL"). Section
145 of the GCL, relating to indemnification, is hereby incorporated herein by
reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to
directors, officers or controlling persons of the Registrant pursuant to the
Registrant's By-laws and the Delaware General Corporation Law, the Registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable.
The Registrant's Certificate of Incorporation includes
certain provisions permitted pursuant to Delaware law whereby officers and
directors of the Registrant are to be indemnified against certain liabilities.
The Registrant's Certificate of Incorporation also limits, to the fullest
extent permitted by Delaware law, a director's liability for monetary damages
for breach of fiduciary duty, including gross negligence, except liability for
(i) breach of the director's duty of loyalty, (ii) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
the law, (iii) the unlawful payment of a dividend or unlawful stock purchase or
redemption and (iv) any transaction from which the director derives an improper
personal benefit. Delaware law does not eliminate a director's duty of care and
this provision has no effect on the availability of equitable remedies such as
injunction or rescission based upon a director's breach of the duty of care.
In accordance with Section 102(a)(7) of the GCL, the
Certificate of Incorporation of the Registrant eliminates the personal
liability of directors to the Registrant or its stockholders for monetary
damages for breach of fiduciary duty as a director with certain limited
exceptions set forth in Section 102(a)(7).
The Registrant has entered into indemnification agreements
with each of its executive officers and directors, the form of which was filed
as Exhibit 10.15 to the Registrant's Registration Statement on Form S-1 (File
No. 333-17091).
The Registrant has obtained and maintains a policy of
insurance with a face amount of $5,000,000 (subject to certain deductible
provisions and exclusions) covering its officers and directors and indemnifying
them against loss on account of claims made against them, including, but not
limited to, damages, judgments, costs and the costs of defense of such claims,
arising from breach of duty, neglect, error, negligent misrepresentations,
omission or act, or any claim arising solely by reason of status as an officer
or director.
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<PAGE> 4
Item 8. Exhibits
4.1 Physicians' Specialty Corp. 1997 Employee
Stock Purchase Plan
5.1 Opinion of Bachner, Tally, Polevoy & Misher
LLP with respect to the legality of the
Common Stock to be registered hereunder
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Bachner, Tally, Polevoy & Misher
LLP (contained in Exhibit 5)
24 Power 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;
(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;
(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 therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof.
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<PAGE> 5
(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.
(h) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant as described above, 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.
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<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Atlanta, State of Georgia, on the 28th day
of November, 1997.
PHYSICIANS' SPECIALTY CORP.
By:/s/ Ramie A. Tritt, M.D.
----------------------------------------
Ramie A. Tritt, M.D.
Chairman of the Board and President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below under the heading "Signature" constitutes and appoints Ramie A.
Tritt, M.D. and Gerald R. Benjamin or either of them, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities to sign any
or all amendments to this registration statement, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, each acting alone, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Ramie A. Tritt, M.D. Chairman of the Board November 28, 1997
- ----------------------------- and President
Ramie A. Tritt, M.D. (principal executive officer)
/s/ Robert A. DiProva Executive Vice President and November 28, 1997
- ----------------------------- Chief Financial Officer
Robert A. DiProva (principal financial and
accounting officer)
</TABLE>
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<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ Richard D. Ballard Chief Executive Officer November 28, 1997
- ------------------------------ and Director
Richard D. Ballard
/s/ Gerald R. Benjamin Vice Chairman of the November 28, 1997
- ------------------------------ Board and Secretary
Gerald R. Benjamin
/s/ Edward R. Casas, M.D. Director November 28, 1997
- ------------------------------
Edward R. Casas, M.D.
/s/ Sidney Kirschner Director November 28, 1997
- ------------------------------
Sidney Kirschner
/s/ Steven L. Posar, M.D. Director November 28, 1997
- ------------------------------
Steven L. Posar, M.D.
</TABLE>
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
4.1 Physicians' Specialty Corp. 1997 Employee Stock Purchase
Plan
5.1 Opinion of Bachner, Tally, Polevoy & Misher LLP with
respect to the legality of the Common Stock to be
registered hereunder
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Bachner, Tally, Polevoy & Misher LLP
(contained in Exhibit 5)
24 Power of Attorney (included on signature page)
</TABLE>
<PAGE> 1
EXHIBIT 4.1
PHYSICIANS' SPECIALTY CORP.
1997 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The Physicians' Specialty Corp. 1997 Employee
Stock Purchase Plan (the "Plan") is established to provide eligible employees
of Physicians' Specialty Corp., a Delaware corporation, and any successor
corporation thereto (collectively, "PSC"), and any current or future parent
corporation or subsidiary corporations of PSC as the Board of Directors of PSC
(the "Board") shall from time to time designate (collectively referred to as
the "Company" and individually referred to as a "Participating Company"), with
an opportunity to acquire a proprietary interest in the Company by the purchase
of common stock of PSC. For purposes of the Plan, a parent corporation and a
subsidiary corporation shall be as defined in sections 424(e) and 424(f),
respectively, of the Internal Revenue Code of 1986, as amended (the "Code").
PSC intends that the Plan shall qualify as an "employee stock
purchase plan" under section 423 of the Code (including any amendments or
replacements of such section), and the Plan shall be so construed. Any term not
expressly defined in the Plan but defined for purposes of section 423 of the
Code shall have the same definition herein.
An employee participating in the Plan (a "Participant") may
withdraw such Participant's accumulated payroll deductions (if any) and
terminate participation in the Plan or any Offering (as defined below) therein
at any time during a Purchase Period (as defined below). Accordingly, each
Participant is, in effect, granted an option pursuant to the Plan (a "Purchase
Right") which may or may not be exercised at the end of a Purchase Period.
2. Administration. The Plan shall be administered by the
Board and/or by a duly appointed committee of the Board having such powers as
shall be specified by the Board. Any subsequent references to the Board shall
also mean the committee if a committee has been appointed. All questions of
interpretation of the Plan or of any Purchase Right shall be determined by the
Board and shall be final and binding upon all persons having an interest in the
Plan and/or any Purchase Right. Subject to the provisions of the Plan, the
Board shall determine all of the relevant terms and conditions of Purchase
Rights granted pursuant to the Plan; provided, however, that all Participants
granted Purchase Rights pursuant to the Plan shall have the same rights and
privileges within the meaning of section 423(b)(5) of the Code. All expenses
incurred in connection with the administration of the Plan shall be paid by the
Company.
3. Share Reserve. The maximum number of shares which may be
issued under the Plan shall be Two Hundred and Fifty Thousand (250,000) shares
of PSC's authorized but unissued common stock, $.001 par value (the "Shares").
In the event that any Purchase Right
<PAGE> 2
for any reason expires or is canceled or terminated, the Shares allocable to
the unexercised portion of such Purchase Right may again be subjected to a
Purchase Right.
4. Eligibility. Any employee of a Participating Company is
eligible to participate in the Plan except employees who:
(a) customarily work less than 20 hours per week;
(b) customarily work not more than five months in any
calendar year;
(c) have not been employed for at least 6 months;
(d) as of the start of an Offering, own stock of PSC (or
any parent or subsidiary corporations) and/or own or
hold options to purchase or who, as a result of participation in the Plan,
would own or hold options to purchase, stock of PSC (or any parent or
subsidiary corporations), possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of PSC (or any parent or
subsidiary corporations) within the meaning of section 423(b)(3) of the Code.
Notwithstanding anything herein contained to the contrary, any
individual performing services for a Participating Company solely through a
leasing agency or employment agency shall not be deemed an "employee" of such
Participating Company.
5. Offering Dates.
(a) Offering Periods. Except as otherwise set forth below,
the Plan shall be implemented by offerings (individually, an "offering") of
approximately twelve (12) months duration (an "Offering Period"). The "Initial
Offering Date" is January 1, 1998. The Initial Offering shall be of twelve (12)
months duration, shall commence on the Initial Offering Date and shall end on
December 31, 1998 (the "Initial Offering Period"). Subsequent Offerings shall
commence on January 1 of each year and end on the December 31 occurring
thereafter. Notwithstanding the foregoing, the Board may establish a different
term for one or more Offerings and/or different commencing and/or ending dates
for such Offerings. An employee who becomes eligible to participate in the Plan
after an Offering Period has commenced shall not be eligible to participate in
such Offering but may participate in any subsequent Offering provided such
employee is still eligible to participate in the Plan as of the commencement of
any such subsequent Offering. Eligible employees may not participate in more
than one Offering at a time. The first day of an Offering Period shall be the
"Offering Date" for such Offering Period. In the event the first and/or last
day of an Offering Period is not a business day, PSC shall specify the business
day that will be deemed the first or last day, as the case may be, of the
Offering Period.
(b) Purchase Periods. Each Offering Period, shall consist
of two (2) consecutive purchase periods of six (6) months duration
(individually, a "Purchase Period").
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<PAGE> 3
The last day of each Purchase Period shall be the "Purchase Date" for such
Purchase Period. The Purchase Period commencing on the Initial Offering Date of
January 1, 1998 shall end on June 30, 1998. Each Purchase Period commencing on
July 1 shall end on the next December 31 and each Purchase Period commencing on
January 1 shall end on the next June 30. Notwithstanding the foregoing, the
Board may establish a different term for one or more Purchase Periods and/or
different commencing dates and/or Purchase Dates for such Purchase Periods. In
the event the first and/or last day of a Purchase Period is not a business day,
PSC shall specify the business day that will be deemed the first or last day,
as the case may be, of the Purchase Period.
(c) Governmental Approval; Stockholder Approval.
Notwithstanding any other provision of the Plan to the contrary, any Purchase
Right granted pursuant to the Plan shall be subject to (i) obtaining all
necessary governmental approvals and/or qualifications of the sale and/or
issuance of the Purchase Rights and/or the Shares, and (ii) obtaining
stockholder approval of the Plan within twelve (12) months of the adoption of
the Plan by the Board of Directors of PSC. Notwithstanding the foregoing,
stockholder approval shall not be necessary in order to grant any Purchase
Right granted in the Plan's Initial Offering Period; provided, however, that
the exercise of any such Purchase Right shall be subject to obtaining
stockholder approval of the Plan within twelve (12) months of the adoption of
the Plan by the Board of Directors of PSC.
6. Participation in the Plan.
(a) Initial Participation. An eligible employee shall
become a Participant on the first Offering Date after satisfying the
eligibility requirements and delivering to the Company's payroll office not
later than the close of business for such payroll office on the last business
day before such Offering Date (the "Subscription Date") a subscription
agreement indicating the employee's election to participate in the Plan and
authorizing payroll deductions. An eligible employee who does not deliver a
subscription agreement to the Company's payroll office on or before the
Subscription Date shall not participate in the Plan for that Offering Period or
for any subsequent Offering Period unless such employee subsequently enrolls in
the Plan by filing a subscription agreement with the Company by the
Subscription Date for such subsequent Offering Period. The Company may, from
time to time, change the Subscription Date as deemed advisable by the Company
in its sole discretion for proper administration of the Plan.
(b) Continued Participation. A Participant shall
automatically participate in the Offering Period commencing immediately after
the final Purchase Date of each Offering Period in which the Participant
participates until such time as such Participant (i) ceases to be eligible as
provided in paragraph 4, (ii) withdraws from the Plan pursuant to paragraph
11(b) or (iii) terminates employment as provided in paragraph 12. If a
Participant is automatically withdrawn from an Offering at the end of a
Purchase Period of such Offering pursuant to paragraph 11(d), then the
Participant shall automatically participate in the next Offering Period. If a
Participant automatically may participate in a subsequent Offering Period
pursuant to this paragraph 6(b), then the Participant is not required to file
any additional
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<PAGE> 4
subscription agreement for such subsequent Offering Period in order to continue
participation in the Plan. However, a Participant may file a subscription
agreement with respect to a subsequent Offering Period if the Participant
desires to change any of the Participant's elections contained in the
Participant's then effective subscription agreement.
7. Right to Purchase Shares. Except as set forth below,
during an Offering Period each Participant in such Offering Period shall have a
Purchase Right consisting of the right to purchase the lesser of:
(a) that number of whole Shares arrived at by dividing
Twenty-Five Thousand Dollars ($25,000.00) by the fair market value of a share
of the common stock of PSC on the initial date of a Purchase Period; and
(b) 2,500 Shares.
The fair market value of Shares shall be determined in
accordance with paragraph 8 below. Shares may only be purchased through a
Participant's payroll withholding pursuant to paragraph 9 below. In no event
shall a Participant's Purchase Right permit such Participant to acquire more
shares in any calendar year than is permitted under Section 10(a) hereof.
8. Purchase Price. The purchase price at which Shares may
be acquired in a given Purchase Period pursuant to the exercise of all or any
portion of a Purchase Right granted under the Plan (the "Offering Exercise
Price") shall be set by the Board; provided, however, that the Offering
Exercise Price shall not be less than eighty-five percent (85%) of the lesser
of (i) the fair market value of the Shares on the initial date of a Purchase
Period or (ii) the fair market value of the Shares on the Purchase Date for
such Purchase Period. Unless otherwise provided by the Board prior to the
commencement of an Offering Period, the Offering Exercise Price for each
Purchase Period in that Offering Period shall be eighty-five percent (85%) of
the lesser of (i) the fair market value of the Shares on the initial date of a
Purchase Period or (ii) the fair market value of the Shares on the given
Purchase Date. The fair market value of the Shares on the applicable dates
shall be the closing sales price on the Nasdaq National Market (or the average
of the closing bid and asked prices if the Shares are so quoted instead) or as
reported on such other national or regional securities exchange or market
system if the Shares are traded on such other exchange or system instead, or as
determined by the Board if the Shares are not so reported. If the relevant date
does not fall on a day on which the common stock of PSC is quoted on the Nasdaq
National Market or such other national or regional securities exchange or
market, the date on which the fair market value per Share shall be established
shall be the last day on which the common stock of PSC was so quoted to such
relevant date.
9. Payment of Purchase Price. Shares which are acquired
pursuant to the exercise of all or any portion of a Purchase Right may be paid
for only by means of payroll deductions from the Participant's Compensation
during the Offering Period. For purposes of the Plan, a Participant's
"Compensation" with respect to an Offering (i) shall include the Participant's
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<PAGE> 5
base salary before deduction for any contributions to any plan maintained by a
Participating Company and described in section 401(k) or section 125 of the
Code, commissions, overtime and bonuses and (ii) shall not include annual
awards, other incentive payments, shift premiums, long-term disability,
worker's compensation or any other payments not specifically referenced in (i).
Except as set forth below, the amount of Compensation to be withheld from a
Participant's Compensation during each pay period shall be determined by the
Participant's subscription agreement.
(a) Election to Decrease,Increase or Stop Withholding.
During an Offering Period, a Participant may elect to decrease the amount
withheld, or stop withholding, from his or her Compensation by filing an
amended subscription agreement with the Company on or before the "Change Notice
Date." The "Change Notice Date" shall initially be the seventh (7th) day prior
to the end of the first pay period for which such election is to be effective;
however, the Company may change such Change Notice Date from time to time. A
Participant may elect to increase the amount withheld from the Participant's
Compensation once during a Purchase Period.
(b) Limitations on Payroll Withholding. The amount of
payroll withholding with respect to the Plan for any Participant during any pay
period shall be in one percent (1%) increments not to exceed ten percent (10%)
of the Participant's Compensation for such pay period. Notwithstanding the
foregoing, the Board may change the limits on payroll withholding effective as
of a future Offering Date, as determined by the Board. Amounts withheld shall
be reduced by any amounts applied to the purchase of Company stock pursuant to
any other employee stock purchase plan qualifying under section 423 of the
Code.
(c) Payroll Withholding. Payroll deductions shall commence
on the first payday following the Offering Date and shall continue to the end
of the Offering Period unless sooner altered or terminated as provided in the
Plan.
(d) Participant Accounts. Individual accounts shall be
maintained for each Participant. All payroll deductions from a Participant's
Compensation shall be credited to such account and shall be deposited with the
general funds of the Company. All payroll deductions received or held by the
Company may be used by the Company for any corporate purpose.
(e) No Interest Paid. Interest shall not be paid on sums
withheld from a Participant's Compensation, unless the Board elects to make
such payments to all Participants on a non-discriminatory basis.
(f) Exercise of Purchase Right. On each Purchase Date of
an Offering Period, each Participant who has not withdrawn from the Offering or
whose participation in the Offering has not terminated on or before such
Purchase Date shall automatically acquire pursuant to the exercise of the
Participant's Purchase Right the number of whole Shares arrived at by dividing
the total amount of the Participant's accumulated payroll deductions for the
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<PAGE> 6
Purchase Period by the Offering Exercise Price; provided, however, in no event
shall the number of Shares purchased by the Participant exceed the number of
Shares subject to the Participant's Purchase Right or the limitations imposed
by Section 10(a) hereof. No Shares shall be purchased on a Purchase Date on
behalf of a Participant whose participation in the Offering or the Plan has
terminated on or before such Purchase Date.
(g) Return of Cash Balance. Any cash balance remaining in
the Participant's account shall be refunded to the Participant as soon as
practicable after the Purchase Date. In the event the cash to be returned to a
Participant pursuant to the preceding sentence is an amount less than the
amount necessary to purchase a whole Share, the Company may establish
procedures whereby such cash is maintained in the Participant's account and
applied toward the purchase of Shares in the subsequent Purchase Period or
Offering Period.
(h) Tax Withholding. At the time the Purchase Right is
exercised, in whole or in part, or at the time some or all of the Shares are
disposed of, the Participant shall make adequate provision for the foreign,
federal and state tax withholding obligations of the Company, if any, which
arise upon exercise of the Purchase Right and/or upon disposition of Shares,
respectively. The Company may, but shall not be obligated to, withhold from the
Participant's Compensation the amount necessary to meet such withholding
obligations.
(i) Company Established Procedures. The Company may, from
time to time, establish or change (i) a minimum required withholding amount for
participation in an Offering, (ii) limitations on the frequency and/or number
of changes in the amount withheld during an Offering, (iii) an exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, (iv)
payroll withholding in excess of or less than the amount designated by a
Participant in order to adjust for delays or mistakes in the Company's
processing of subscription agreements, (v) the date(s) and manner by which the
fair market value of the Shares is determined for purposes of administration of
the Plan and/or (vi) such other limitations or procedures as deemed advisable
by the Company in the Company's sole discretion which are consistent with the
Plan and in accordance with the requirements of section 423 of the Code.
(j) Expiration of Purchase Right. Any portion of a
Participant's Purchase Right remaining unexercised after the end of the
Offering Period to which such Purchase Right relates shall expire immediately
upon the end of such Offering Period.
10. Limitations on Purchase of Shares; Rights as a Stockholder.
(a) Fair Market Value Limitation. Notwithstanding any
other provision of the Plan, no Participant shall be entitled to purchase
Shares under the Plan (and under all other employee stock purchase plans which
are intended to meet the requirements of section 423 of the Code sponsored by
the Company or a parent or subsidiary corporation of the
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<PAGE> 7
Company) at a rate which exceeds $25,000 in fair market value during a given
Offering Period (or such other limit as may be imposed by the Code), for each
calendar year in which such Participant's Purchase Right with respect to such
Offering Period remains outstanding under the Plan (and under all other
employee stock purchase plans described in this sentence). Such fair market
value shall be determined as of the initial date of each Purchase Period.
(b) Pro Rata Allocation. In the event the number of Shares
which might be purchased by all Participants in the Plan exceeds the number of
Shares available in the Plan, the Company shall make a pro rata allocation of
the remaining Shares in as uniform a manner as shall be practicable and as the
Company shall determine to be equitable.
(c) Rights as a Stockholder and Employee. A Participant
shall have no rights as a stockholder by virtue of the Participant's
participation in the Plan until the Purchase Date. No adjustment shall be made
for cash dividends or distributions or other rights for which the record date
is prior to the date such stock certificate(s) are issued. Nothing herein shall
confer upon a Participant any right to continue in the employ of the Company or
interfere in any way with any right of the Company to terminate the
Participant's employment at any time.
11. Withdrawal.
(a) Withdrawal From an Offering. A Participant may
withdraw from an Offering by signing and delivering to the Company's payroll
office, a written notice of withdrawal on forms provided by the Company for
such purpose. Such withdrawal may be elected at any time prior to the end of an
Offering Period; provided, however, if a Participant withdraws after the
Purchase Date for a Purchase Period of an Offering, the withdrawal shall not
affect Shares acquired by the Participant in such Purchase Period. Unless
otherwise indicated, withdrawal from an Offering shall not result in a
withdrawal from the Plan or any succeeding Offering therein. By withdrawing
from an Offering effective as of the close of a given Purchase Date, a
Participant may have Shares purchased on such Purchase Date and immediately
commence participation in the next Offering commencing after such Purchase
Date. A Participant is prohibited from again participating in an Offering at
any time upon withdrawal from such Offering. The Company may impose, from time
to time, a requirement that the notice of withdrawal be on file with the
Company's payroll office for a reasonable period prior to the effectiveness of
the Participant's withdrawal from an Offering.
(b) Withdrawal from the Plan. A Participant may withdraw
from the Plan by signing a written notice of withdrawal on a form provided by
the Company for such purpose and delivering such notice to the Company's
payroll office. Withdrawals made after a Purchase Date for a Purchase Period
shall not affect Shares acquired by the Participant on such Purchase Date. In
the event a Participant voluntarily elects to withdraw from the Plan, the
Participant may not resume participation in the Plan during the same Offering
Period, but may participate in any subsequent Offering under the Plan by again
satisfying the requirements of paragraphs 4 and 6(a) above. The Company may
impose, from time to time, a requirement that
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<PAGE> 8
the notice of withdrawal be on file with the Company's payroll office for a
reasonable period prior to the effectiveness of the Participant's withdrawal
from the Plan.
(c) Return of Payroll Deductions. Upon withdrawal from an
Offering or the Plan pursuant to paragraphs 11(a) or 11(b), respectively, the
withdrawn Participant's accumulated payroll deductions which have not been
applied toward the purchase of Shares shall be returned as soon as practicable
after the withdrawal, without the payment of any interest (unless the Board
decides otherwise pursuant to paragraph 9(e) above), to the Participant, and
the Participant's interest in the Offering and/or the Plan, as applicable,
shall terminate. Such accumulated payroll deductions may not be applied to any
other Offering under the Plan.
(d) Participation Following Withdrawal. An employee who is
also an officer or director of the Company subject to section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and who is
deemed to "cease participation" in the Plan within the meaning of Rule 16b-3
promulgated under the Exchange Act as amended from time to time or any
successor rule or regulation ("Rule 16b-3") as a consequence of his or her
withdrawal from an Offering pursuant to paragraph 11(a) above or withdrawal
from the Plan pursuant to paragraph 11(b) above shall not again participate in
the Plan for at least six months after the date of such withdrawal.
(e) Waiver of Withdrawal Right. The Company may, from time
to time, establish a procedure pursuant to which a Participant may elect (an
"Irrevocable Election"), at least six (6) months prior to a Purchase Date, to
have all payroll deductions accumulated in his or her Plan account as of such
Purchase Date applied to purchase Shares under the Plan, and (i) to waive his
or her right to withdraw from the Offering or the Plan and (ii) to waive his or
her right to increase, decrease, or cease payroll deductions under the Plan
from his or her Compensation during the Purchase Period ending on such Purchase
Date. Such election shall be made in writing on a form provided by the Company
for such purpose and must be delivered to the Company not later than the close
of business on the day preceding the date which is six (6) months before the
Purchase Date for which such election is to first be effective.
12. Termination of Employment. Termination of a Participant's
employment with the Company for any reason, including retirement, disability or
death or the failure of a Participant to remain an employee eligible to
participate in the Plan, shall terminate the Participant's participation in the
Plan immediately. In such event, the payroll deductions credited to the
Participant's account since the last Purchase Date shall, as soon as
practicable, be returned to the Participant or, in the case of the
Participant's death, to the Participant's legal representative, and all of the
Participant's right under the Plan shall terminate. Interest shall not be paid
on sums returned to a Participant pursuant to this paragraph 12 unless the
Board elects otherwise pursuant to paragraph 9(e) above. A Participant whose
participation has been so terminated may again become eligible to participate
in the Plan by again satisfying the requirements of paragraphs 4 and 6(a)
above.
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<PAGE> 9
13. Transfer of Control. A "Transfer of Control" shall be
deemed to have occurred in the event any of the following occurs with respect
to PSC.
(a) a merger or consolidation in which PSC is not the
surviving corporation;
(b) a merger or consolidation in which PSC is the
surviving corporation where the stockholders of PSC before such merger or
consolidation do not retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of PSC;
(c) the sale, exchange, or transfer of all or
substantially all of PSC's assets other than a sale, exchange, or transfer to
one (1) or more subsidiary corporations (as defined in section 1, above) of
PSC;
(d) the direct or indirect sale or exchange by the
stockholders of PSC of all or substantially all of the stock of PSC where the
stockholders of PSC before such sale or exchange do not retain, directly or
indirectly, at least a majority of the beneficial interest in the voting stock
of PSC after such sale or exchange; or
(e) the liquidation or dissolution of PSC;
In the event of a Transfer of Control, the Board, in its sole
discretion, may arrange with the surviving, continuing, successor, or
purchasing corporation, as the case may be (the "Acquiring Corporation"), for
the Acquiring Corporation to assume PSC's rights and obligations under the
Plan. All Purchase Rights shall terminate effective as of the date of the
Transfer of Control to the extent that the Purchase Right is neither exercised
as of the date of the Transfer of Control nor assumed by the Acquiring
Corporation.
14. Capital Changes. In the event of changes in the common
stock of PSC due to a stock split, reverse stock split, stock dividend,
recapitalization, combination, reclassification, or like change in PSC's
capitalization, or in the event of any merger (including a merger effected for
the purpose of changing PSC's domicile), sale or other reorganization,
appropriate adjustments shall be made by PSC in the securities subject to
purchase under a Purchase Right, the Plan's share reserve, the number of Shares
subject to a Purchase Right, and in the purchase price per Share.
15. Transferability. A Purchase Right may not be transferred in
any manner otherwise than by will or the laws of descent and distribution and
shall be exercisable during the lifetime of the Participant only by the
Participant. PSC, in its absolute discretion, may impose such restrictions on
the transferability of the Shares purchasable upon the exercise of a Purchase
Right as it deems appropriate, and any such restriction shall be set forth in
the respective subscription agreement and may be referred to on the
certificates evidencing such Shares.
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<PAGE> 10
16. Reports. Each Participant who exercised all or part of
his or her Purchase Right for a Purchase Period shall receive, as soon as
practicable after the Purchase Date of such Purchase Period, a report of such
Participant's account setting forth the total payroll deductions accumulated,
the number of Shares purchased, the fair market value of such Shares, the date
of purchase and the remaining cash balance to be refunded or retained in the
Participant's account pursuant to paragraph 9(g) above, if any. In addition,
each Participant shall be provided information concerning PSC equivalent to
that information generally made available to PSC's common stockholders.
17. Plan Term. This Plan shall continue until terminated by the
Board or until all of the Shares reserved for issuance under the Plan have been
issued.
18. Restriction on Issuance of Shares. The issuance of Shares
under the Plan shall be subject to compliance with all applicable requirements
of foreign, federal or state law with respect to such securities. A Purchase
Right may not be exercised if the issuance of Shares upon such exercise would
constitute a violation of any applicable foreign, federal or state securities
laws or other law or regulations. In addition, no Purchase Right may be
exercised unless (i) a registration statement under the Securities Act of 1933,
as amended, shall at the time of exercise of the Purchase Right be in effect
with respect to the Shares issuable upon exercise of the Purchase Right, or
(ii) in the opinion of legal counsel to PSC, the Shares issuable upon exercise
of the Purchase Right may be issued in accordance with the terms of an
applicable exemption from the registration requirements of said Act. As a
condition to the exercise of a Purchase Right, PSC may require the Participant
to satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation, and to make any
representation or warranty with respect thereto as may be requested by the
Company.
19. Legends. The Company may at any time place legends or other
identifying symbols referencing any applicable foreign, federal and/or state
securities restrictions or any provision convenient in the administration of
the Plan on some or all of the certificates representing Shares issued under
the Plan. The Participant shall, at the request of PSC, promptly present to PSC
any and all certificates representing Shares acquired pursuant to a Purchase
Right in the possession of the Participant in order to carry out the provisions
of this subparagraph. Unless otherwise specified by PSC, legends placed on such
certificates may include but shall not be limited to the following:
"THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE
CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER THE
EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY
SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE
REGISTERED HOLDER HEREOF MADE ON OR BEFORE ______________. THE REGISTERED
HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED
HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE."
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<PAGE> 11
20. Notification of Sale of Shares. PSC may require the
Participant to give PSC prompt notice of any disposition of Shares acquired by
exercise of a Purchase Right within two years from the date of granting such
Purchase Right or one year from the date of exercise of such Purchase Right.
PSC may require that until such time as a Participant disposes of Shares
acquired upon exercise of a Purchase Right, the Participant shall hold all such
Shares in the Participant's name (and not in the name of any nominee) until the
lapse of the time periods with respect to such Purchase Right referred to in
the preceding sentence. PSC may direct that the certificates evidencing Shares
acquired by exercise of a Purchase Right refer to such requirement to give
prompt notice of disposition.
21. Amendment or Termination of the Plan. The Board may at any
time amend or terminate the Plan, except that such termination shall not affect
Purchase Rights previously granted under the Plan, nor may any amendment make
any change in a Purchase Right previously granted under the Plan which would
adversely affect the right of any Participant (except to the extent permitted
by the Plan or as may be necessary to qualify the Plan as an employee stock
purchase plan pursuant to section 423 of the Code or to obtain qualification or
registration of the Shares under applicable foreign, federal or state
securities laws). In addition, an amendment to the Plan must be approved by the
stockholders of the Company within twelve (12) months of the adoption of such
amendment if such amendment would change the number of Shares authorized for
issuance under the Plan or would change the definition of the employees (or
class of employees) eligible to participate in the Plan, including the
corporations that may be designated by the Board as Participating Companies.
Furthermore, the approval of the Company's stockholders shall be sought for any
amendment to the Plan for which the Board deems stockholder approval necessary
in order to comply with Rule 16b-3 promulgated under section 16 of the Exchange
Act.
The foregoing Physicians' Specialty Corp. 1997 Employee Stock
Purchase Plan was duly adopted by the Board of Directors of PSC on the 5th day
of November, 1997.
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<PAGE> 1
EXHIBIT 5.1
December 3, 1997
Physicians' Specialty Corp.
1150 Lake Hearn Drive
Suite 640
Atlanta, GA 30342
Gentlemen:
You have requested our opinion with respect to the issuance by Physicians'
Specialty Corp., a Delaware corporation (the "Company"), of an aggregate of
250,000 shares (the "Shares") of Common Stock, par value $.001 per share (the
"Common Stock"), issuable under the Company's 1997 Employee Stock Purchase Plan
(the "Plan"), pursuant to a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act").
We have examined originals, or copies certified or otherwise identified to
our satisfaction, of such documents and corporate and public records as we deem
necessary as a basis for the opinion hereinafter expressed. With respect to
such, we have assumed the genuinesness of all signatures appearing on all
documents presented to us as originals, and the conformity to the originals of
all documents presented to us as conformed or reproduced copies. Where factual
matters relevant to such opinion were not independently established, we have
relied upon certificates of officers and responsible employees and agents of
the Company.
Based upon the foregoing, it is our opinion that the Shares issuable under
the Plan will be, when sold, paid for and issued as contemplated by the terms
of the Plan, duly and validly issued and fully paid and nonassessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement, and to the use of our name in the Registration
Statement. In giving this consent, we do not thereby concede that we come
within the categories of persons whose consent is required by the Act or the
General Rules and Regulations promulgated thereunder.
Very truly yours,
BACHNER, TALLY, POLEVOY & MISHER LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
January 17, 1997 included in Physicians' Specialty Corp.'s Prospectus dated
March 20, 1997 and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
November 28, 1997
