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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-B
FOR REGISTRATION OF SECURITIES OF CERTAIN SUCCESSOR ISSUERS
Filed Pursuant to Section 12(b) or (g) of the
Securities and Exchange Act of 1934
N-T Holdings, Inc.
(Exact name of registrant as
specified in its charter)
Delaware
(State of incorporation or organization)
95-4591529
(I.R.S. Employer Identification No.)
5995 Plaza Drive, Cypress, CA 90630-5028
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to Name of each exchange on which
be so registered each class is to be registered
None
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Securities to be registered pursuant to Section 12(g) of the Act:
Class A Common Stock, $.01 par value
(Title of class)
Class B Common Stock, $.01 par value
(Title of class)
Series A Cumulative Convertible Preferred Stock, $.01 par value
(Title of class)
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ITEM 1. GENERAL INFORMATION.
(a) Date, Form and State of Organization
Reference is made to the section entitled "The Companies --
PacifiCare Holding" of the Registrant's Prospectus filed on November 26,
1996 pursuant to Rule 424(b)(3) promulgated under the Securities Act of
1933, as amended (the "Prospectus"), which is incorporated herein by
reference, in respect of the Registration Statement on Form S-4 (File No.
333-16271) filed on November 18, 1996 under the Securities Act of 1933, as
amended ("Registrant's S-4").
(b) Date on Which Registrant's Fiscal Year Ends
The Registrant's Fiscal Year will end on September 30.
ITEM 2. TRANSACTION OF SUCCESSION.
(a) Predecessors with Securities Registered Pursuant to Section 12(b) or
(g) of the Act at the Time of Succession
Reference is made to the section entitled "The Companies" of the
Prospectus, which is incorporated herein by reference.
(b) Transaction of Succession, Basis of Exchange of Securities
Reference is made to the sections entitled "The Mergers and Related
Transactions" and "The Reorganization Agreement" of the Prospectus, which are
incorporated herein by reference.
ITEM 3. SECURITIES TO BE REGISTERED.
The Registrant presently has authorized 1,000 shares of Common Stock, of
which 200 shares are currently issued and outstanding. Such shares of
currently issued and outstanding Common Stock will be cancelled upon
consummation of the Mergers contemplated by the Reorganization Agreement
referred to in the Prospectus. Shortly before consummation of the
Mergers, the Registrant will file an Amended and Restated Certificate of
Incorporation which will authorize 100,000,000 shares of Class A Common
Stock, 100,000,000 shares of Class B Common Stock, and 40,000,000 shares of
Series A Cumulative Convertible Preferred Stock. The number of shares of
each such class to be issued and outstanding after the Mergers will be
determined as described in the section entitled "The Mergers and Related
Transactions" of the Prospectus, which is incorporated herein by reference.
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ITEM 4. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
Reference is made to the section entitled "Description of PacifiCare
Holding Capital Stock" of the Prospectus, which is hereby incorporated herein by
reference.
ITEM 5. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Reference is made to pages F-1 through F-3 of the Prospectus, which
are hereby incorporated herein by reference.
(b) Exhibits.
EXHIBIT
NUMBER DESCRIPTION
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2.01+ Amended and Restated Agreement and Plan of Merger and Reorganization
("Reorganization Agreement"), dated as of November 11, 1996, among
PacifiCare Health Systems, Inc. ("PacifiCare"), Registrant, Neptune
Merger Corp., Tree Acquisition Corp. and FHP International Corporation
("FHP"). See Appendix A to the Registrant's S-4.
3.01 Certificate of Incorporation of Registrant.
3.02+ Form of Certificate of Incorporation of Registrant to be filed
pursuant to the Reorganization Agreement. See Exhibit 1.4 to Appendix
A of the Registrant's S-4.
3.03+ Bylaws of Registrant.
4.01+ Form of Specimen Certificate for Registrant's Class A Common Stock.
4.02+ Form of Specimen Certificate for Registrant's Class B Common Stock.
4.03+ Form of Specimen Certificate for Registrant's Series A Cumulative
Convertible Preferred Stock.
4.04* Indenture, dated as of September 22, 1993, between FHP and the Chase
Manhattan Bank, N.A. in regard to $100,000,000 7% Senior Notes due
2003.
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+ Incorporated herein by reference from Registrant's S-4.
* Incorporated herein by reference from FHP's Form 10-K for the Fiscal Year
Ended June 30, 1993.
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10.01+ Credit Agreement, dated as of October 31, 1996, among the Registrant,
the several financial institutions from time to time party to the
Credit Agreement, The Bank of New York, The Bank of Nova Scotia,
Banque Nationale de Paris, Dai-Ichi Kangyo Bank, Ltd., The Industrial
Bank of Japan Limited, Rabobank Nederland, Sanwa Bank California, The
Sumitomo Bank, Limited, and Wells Fargo Bank, N.A., as co-agents, The
Chase Manhattan Bank and Citicorp. USA, Inc., as managing agents, and
Bank of America National Trust and Savings Association, as agent for
the Banks.
10.02++ Form of contract for the period January 1, 1993, through December 31,
1993 between PacifiCare of California and the Department of Health and
Human Services.
10.03** Health Insurance Benefits for the Aged and Disabled Contracts dated
January 1, 1992 between FHP, Inc. and the Secretary of Health and
Human Services.
10.04*** Group Health Benefits Contract dated January 1, 1986 between FHP,
Inc. and the Federal Office of Personnel Management.
10.05 1996 Stock Option Plan for Officers and Key Employees of the
Registrant.
10.06 1996 Non-Officer Directors Stock Option Plan of the Registrant.
10.07 1996 Management Incentive Compensation Plan of the Registrant.
10.08 1996 Long-Term Performance Incentive Plan of the Registrant.
11.01+++ Statement re: Computation of Earnings Per Share.
12.01**** Statement re: Computation of Ratios.
21.01+ Subsidiaries of the Registrant.
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** Incorporated herein by reference from FHP's Form 10-K for the Fiscal Year
Ended June 30, 1992.
*** Incorporated herein by reference from FHP's Registration Statement on
Form S-1 (No. 33-5596).
**** Incorporated herein by reference from FHP's Form 10-K for the Fiscal Year
Ended June 30, 1996 ("FHP 1996 10-K") and the Registrant's S-4.
++ Incorporated herein by reference from PacifiCare's Registration
Statement on Form S-3 (No. 33-72012).
+++ Incorporated herein by reference from FHP 1996 10-K and PacifiCare's Form
10-K for the Fiscal Year Ended September 30, 1996.
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27.01 Financial Data Schedule of Registrant.
99.01++++ Joint Proxy Statement of PacifiCare and FHP and Prospectus of
Registrant dated November 21, 1996.
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++++ Incorporated herein by reference from the Prospectus.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
N-T HOLDINGS, INC.
Date: January 9, 1997 By: /s/ Joseph S. Konowiecki
----------------------------------
Joseph S. Konowiecki
Secretary
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBITS
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2.01+ Amended and Restated Agreement and Plan of Merger and Reorganization
("Reorganization Agreement"), dated as of November 11, 1996, among
PacifiCare Health Systems, Inc. ("PacifiCare"), Registrant, Neptune
Merger Corp., Tree Acquisition Corp. and FHP International Corporation
("FHP"). See Appendix A to the Registrant's S-4.
3.01 Certificate of Incorporation of Registrant.
3.02+ Form of Certificate of Incorporation of Registrant to be filed
pursuant to the Reorganization Agreement. See Exhibit 1.4 to Appendix
A of the Registrant's S-4.
3.03+ Bylaws of Registrant.
4.01+ Form of Specimen Certificate for Registrant's Class A Common Stock.
4.02+ Form of Specimen Certificate for Registrant's Class B Common Stock.
4.03+ Form of Specimen Certificate for Registrant's Series A Cumulative
Convertible Preferred Stock.
4.04* Indenture, dated as of September 22, 1993, between FHP and the Chase
Manhattan Bank, N.A. in regard to $100,000,000 7% Senior Notes due
2003.
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+ Incorporated herein by reference from Registrant's Registration Statement
on Form S-4 (File No. 333-16271) filed on November 18, 1996 ("Registrant's
S-4".)
* Incorporated herein by reference from FHP's Form 10-K for the Fiscal Year
Ended June 30, 1993.
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10.01+ Credit Agreement, dated as of October 31, 1996, among the Registrant,
the several financial institutions from time to time party to the
Credit Agreement, The Bank of New York, The Bank of Nova Scotia,
Banque Nationale de Paris, Dai-Ichi Kangyo Bank, Ltd., The Industrial
Bank of Japan Limited, Rabobank Nederland, Sanwa Bank California, The
Sumitomo Bank, Limited, and Wells Fargo Bank, N.A., as co-agents, The
Chase Manhattan Bank and Citicorp. USA, Inc., as managing agents, and
Bank of America National Trust and Savings Association, as agent for
the Banks.
10.02++ Form of contract for the period January 1, 1993, through December 31,
1993 between PacifiCare of California and the Department of Health and
Human Services.
10.03** Health Insurance Benefits for the Aged and Disabled Contracts dated
January 1, 1992 between FHP, Inc. and the Secretary of Health and
Human Services.
10.04*** Group Health Benefits Contract dated January 1, 1986 between FHP,
Inc. and the Federal Office of Personnel Management.
10.05 1996 Stock Option Plan for Officers and Key Employees of the
Registrant.
10.06 1996 Non-Officer Directors Stock Option Plan of the Registrant.
10.07 1996 Management Incentive Compensation Plan of the Registrant.
10.08 1996 Long-Term Performance Incentive Plan of the Registrant.
11.01+++ Statement re: Computation of Earnings Per Share.
12.01**** Statement re: Computation of Ratios.
21.01+ Subsidiaries of the Registrant.
27.01 Financial Data Schedule of Registrant.
99.01++++ Joint Proxy Statement of PacifiCare and FHP and Prospectus of
Registrant dated November 21, 1996.
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** Incorporated herein by reference from FHP's Form 10-K for the Fiscal Year
Ended June 30, 1992.
*** Incorporated herein by reference from FHP's Registration Statement on
Form S-1 (No. 33-5596).
**** Incorporated herein by reference from FHP's Form 10-K for the Fiscal Year
Ended June 30, 1996 ("FHP 1996 10-K") and the Registrant's S-4.
++ Incorporated herein by reference from PacifiCare's Registration
Statement on Form S-3 (No. 33-72012).
+++ Incorporated herein by reference from FHP 1996 10-K and PacifiCare's Form
10-K for the Fiscal Year Ended September 30, 1996.
++++ Incorporated herein by reference from Registrant's Prospectus filed
pursuant to Rule 424(b)(3) promulgated under the Securities Act of
1933, as amended, filed on November 26, 1996 ("Prospectus").
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CERTIFICATE OF INCORPORATION
OF
N-T HOLDINGS, INC.
I.
The name of this corporation is N-T HOLDINGS, INC.
II.
The address, including street, number, city, and county, of the registered
office of the corporation in the State of Delaware is 1013 Centre Road, City of
Wilmington, 19805, County of New Castle; and the name of the registered agent of
the corporation in the State of Delaware at such address is The Prentice-Hall
Corporation System, Inc.
III.
The purpose of this corporation is to engage in any lawful act or activity
for which a corporation may be organized under the Delaware General Corporation
Law.
IV.
This corporation is authorized to issue one class of stock to be designated
"Common Stock." The total number of shares which the corporation is authorized
to issue is one thousand (1,000) shares of Common Stock, each having a par value
of one tenth of one cent ($0.001).
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V.
For the management of the business and for the conduct of the affairs of
the corporation, and in further definition, limitation and regulation of the
powers of the corporation, of its directors and of its stockholders or any class
thereof, as the case may be, it is further provided that:
1. The management of the business and the conduct of the affairs of the
corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be fixed by the Board
of Directors in the manner provided in the Bylaws.
2. The Board of Directors may from time to time make, amend, supplement
or repeal the Bylaws; provided, however, that the stockholders may change or
repeal any Bylaw adopted by the Board of Directors by the affirmative vote of
the holders of a majority of the voting power of all of the then outstanding
shares of the capital stock of the corporation (considered for this purpose as
one class); and, provided further, that no amendment or supplement to the Bylaws
adopted by the Board of Directors shall vary or conflict with any amendment or
supplement thus adopted by the stockholders.
3. The directors of the corporation need not be elected by written ballot
unless the Bylaws so provide.
VI.
A director of the corporation shall, to the full extent not prohibited by
the Delaware General Corporation Law, as the same exists or may hereafter be
amended, not be liable to the
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corporation or its stockholders for monetary damages for breach of his fiduciary
duty as a director.
VII.
The name and mailing address of the incorporator is as follows:
Laurie A. Webb
Cooley Godward Castro Huddleson & Tatum
Five Palo Alto Square
300 El Camino Real
Palo Alto, CA 94306-0663
VIII.
The corporation is to have perpetual existence.
IX.
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon the stockholders
herein are granted subject to this right.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the Delaware General Corporation
Law, do make this Certificate, hereby declaring and certifying that this is my
act and deed and that the facts herein stated are true and accordingly have
hereunto set my hand this 1st day of August, 1996.
---------------------------------------
LAURIE A. WEBB
SOLE INCORPORATOR
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Exhibit 10.05
1996 STOCK OPTION PLAN
FOR OFFICERS AND KEY EMPLOYEES
The Company hereby adopts this 1996 Stock Option Plan for Officers and Key
Employees of N-T Holdings, Inc. (the "Plan"), subject to shareholder approval.
The purposes of this Plan are as follows:
(1) To further the growth, development and financial success of the
Company by providing additional incentives to certain of its officers and
other key employees who have been or will be given responsibility for the
management or administration of the Company's business affairs.
(2) To enable the Company to obtain and retain the services of the
type of professional, technical and managerial personnel considered
essential to the long-range success of the Company by providing and
offering them an opportunity to become owners of capital stock.
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
Section 1.1 - Act
"Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.2 - Award
"Award" shall mean an Incentive Stock Option, Non-Qualified Stock Option, a
Stock Appreciation Right, a Stock Payment, or any combination thereof, granted
under the Plan.
Section 1.3 - Board
"Board" shall mean the Board of Directors of the Company.
Section 1.4 - Chief Financial Officer
"Chief Financial Officer" shall mean the Chief Financial Officer of the
Company.
Section 1.5 - Class A Common Stock
"Class A Common Stock" shall mean the Class A Common Stock of the Company,
par value
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$.01 per share.
Section 1.6 - Class B Common Stock
"Class B Common Stock" shall mean the Class B Common Stock of the Company,
par value $.01 per share.
Section 1.7 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
Section 1.8 - Committee
"Committee" shall mean the Committee of the Board of Directors of the
Company as defined in Section 7.1 hereof.
Section 1.9 - Common Stock
"Common Stock" shall mean either or both, as the context requires, the
Class A Common Stock and the Class B Common Stock.
Section 1.10 - Company
"Company" shall mean N-T Holdings, Inc. or such other name which N-T
Holdings, Inc. may adopt.
Section 1.11 - Director
"Director" shall mean a member of the Board.
Section 1.12 - Employee
"Employee" shall mean any employee (as defined in accordance with the
Treasury Regulations and Revenue Rulings then applicable under Section 3401(c)
of the Code) of the Company, or of any corporation which is then a Subsidiary or
a consultant who is providing bona fide services to the Company, whether such
employee is so employed, or such consultant is retained, at the time this Plan
is adopted or becomes so employed or retained subsequent to the adoption of this
Plan.
Section 1.13 - Fair Market Value
The "Fair Market Value" of a share of the Company's Common Stock on the
date such determination is made shall mean: (i) the closing price of such share
on the principal exchange on which the shares of Common Stock are then trading,
if any, on such date, or, if shares of such stock were not traded on such date,
then on the next preceding trading day during which a sale occurred; or (ii) if
such stock is not traded on an exchange but is quoted on Nasdaq or a successor
quotation system, (1) the last sales price (if the stock is then listed as a
National Market Issue under the NASD National Market System), or (2) the mean
between the closing representative bid and asked prices
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(in all other cases) for the stock on such date as reported by Nasdaq or such
successor quotation system; or (iii) if such stock is not publicly traded on an
exchange and not quoted on Nasdaq or a successor quotation system, the mean
between the closing bid and asked prices for the stock on such date as
determined in good faith by the Committee; or (iv) if the Company's Common Stock
is not publicly traded, the fair market value established by the Committee
acting in good faith.
Section 1.14 - Incentive Stock Option
"Incentive Stock Option" shall mean an Option which qualifies under Section
422 of the Code and which is designated as an Incentive Stock Option by the
Committee.
Section 1.15 - Nasdaq
"Nasdaq" shall mean the National Association of Securities Dealers Inc.
Automated Quotation System.
Section 1.16 - Non-Qualified Stock Option
"Non-Qualified Stock Option" shall mean an Option which is not an Incentive
Stock Option and which is designated as a Non-Qualified Stock Option by the
Committee.
Section 1.17 - Officer
"Officer" shall mean an officer of the Company (including, without
limitation, the Chairman and Vice Chairman of the Board) or any corporation
which is then a Subsidiary, whether such Officer becomes an Officer at the time
this Plan is adopted or subsequent to the adoption of the Plan.
Section 1.18 - Option
"Option" shall mean an option to purchase shares of the Class A Common
Stock or Class B Common Stock of the Company, granted under the Plan. "Options"
includes both Incentive Stock Options and Non-Qualified Stock Options.
Section 1.19 - Parent Corporation
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
Company then owns stock possessing 50 percent or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
Section 1.20 - Participant
"Participant" shall mean an Officer or Employee who is selected by the
Committee to receive an award.
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Section 1.21 - Plan
"Plan" shall mean this 1996 Stock Option Plan for Officers and Key
Employees of the Company.
Section 1.22 - Pronouns
The masculine pronoun shall include the feminine and neuter and the
singular shall include the plural, where the context so indicates.
Section 1.23 - Regulations
"Regulations" shall mean final, temporary or proposed regulations
promulgated under the Code.
Section 1.24 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.25 - Stock Appreciation Right
"Stock Appreciation Right" or "Right" shall mean a right granted pursuant
to Article VI of the Plan to receive an amount of cash or, in the discretion of
the Committee, a number of shares of Class A Common Stock or Class B Common
Stock of the Company or a combination of shares of Class A Common Stock or
Class B Common Stock and cash, based on the increase in the Fair Market Value of
the shares of Class A Common Stock or Class B Common Stock subject to the right.
Section 1.26 - Stock Payment
"Stock Payment" shall mean a payment in shares of Class B Common Stock
valued at the Fair Market Value at the time of the payment: (i) to replace all
or any portion of the compensation, other than base salary, that would otherwise
become payable to a Participant in cash; or (ii) to encourage employment with
the Company for employees.
Section 1.27 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
Section 1.28 - Termination of Employment
"Termination of Employment" shall mean: (i) the time when the Participant
ceases to be an Employee or Officer of the Company or a Subsidiary for any
reason, including, but not limited to, a termination by resignation, discharge,
death or retirement, and with respect to a Participant who is
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a consultant, the time when such consultant is no longer retained by the Company
or any Subsidiary of the Company, but excluding terminations where there is a
simultaneous reemployment or reappointment of the Participant as an Employee or
Officer by the Company or a Subsidiary; or (ii) with respect to a Participant
who is an Employee or Officer of a Subsidiary, the time when such Subsidiary
ceases to be a Subsidiary of the Company. The Committee, in its absolute
discretion, shall determine the effect of all other matters and questions
relating to Termination of Employment, including, but not limited to, the
question of whether a Termination of Employment resulted from a discharge for
good cause, and all questions of whether particular leaves of absence constitute
Terminations of Employment; provided, however, that, with respect to Incentive
Stock Options, a leave of absence shall constitute a Termination of Employment
if, and to the extent that, such leave of absence interrupts employment for the
purposes of Section 422(a)(2) of the Code.
ARTICLE II
SHARES SUBJECT TO PLAN
Section 2.1 - Shares Subject to Plan
The shares of stock subject to Awards shall be shares of the Company's
Class A Common Stock and shares of the Company's Class B Common Stock. The
aggregate number of such shares which may be subject to Options and Rights
granted under the Plan, shall be 4,300,000 shares of Common Stock, subject to
adjustment as provided herein including, but not limited to, adjustments for
dividends consisting of one share of Class B Common Stock for one share of
Class A Common Stock. With respect to each fiscal year, on and after October
1, 1997, the aggregate number of shares of Common Stock which may be subject
to Awards granted during such year shall not exceed two percent (2%) of the
aggregate outstanding shares of Class A and Class B Common Stock of the
Company as of the last day of the previous fiscal year, subject to adjustment
as provided herein. To the extent permissible under Rule 16b-3 of the Act,
any shares of Common Stock available to be subject to Awards granted during a
fiscal year and not made subject to Awards shall be added to the aggregate
number of shares of Common Stock available for Awards in succeeding fiscal
years. The maximum number of Incentive Stock Options available for grant
under the Plan shall be 1,800,000, subject to adjustment as provided herein.
The maximum number of Incentive Stock Options, Non-Qualified Stock Options
and Stock Appreciation Rights available for grant to any Participant during any
fiscal year shall not exceed 200,000, subject to adjustment as provided herein.
If any Award, expires or is terminated or cancelled without having been fully
exercised, the number of shares subject to such Award but as to which such Award
was not exercised prior to its expiration or cancellation may again be granted
hereunder, subject to the limitations contained herein, provided, however, that,
in the case of the cancellation or termination of an Incentive Stock Option, a
Non-Qualified Stock Option or Stock Appreciation Right in the same fiscal year
that such Incentive Stock Option, Non-Qualified Stock Option or Stock
Appreciation Right was granted, both the cancelled or terminated Incentive Stock
Option, Non-Qualified Stock Option or Stock Appreciation Right and the newly
granted Incentive Stock Option, Non-Qualified Stock Option or Stock Appreciation
Right shall be counted in
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determining whether the recipient has received the maximum number of such Awards
permitted under the Plan.
Section 2.2 - Limitation on Incentive Stock Option Exercise
The aggregate Fair Market Value (determined as of the time the Option is
granted) of the shares subject to Incentive Stock Options which may first become
exercisable by any Officer or key Employee in any calendar year (under the Plan
and all other incentive stock option plans of the Company, any Subsidiary and
any Parent Corporation) shall not exceed $100,000.
Section 2.3 - Changes in Company's Shares
In the event that the outstanding shares of Class A Common Stock or Class B
Common Stock of the Company are hereafter changed into or exchanged for a
different number or kind of shares or other securities of the Company, or
(subject to Section 8.2 hereof) of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split, stock dividend or combination of shares, or in the event of extraordinary
cash or non-cash dividends being declared with respect to outstanding shares of
Class A Common Stock or Class B Common Stock or similar transactions,
proportionate adjustments shall be made by the Committee in the number and kind
of shares which are subject to Awards, including adjustments of the limitations
contained herein on the maximum number and kind of shares which may be subject
to Awards under the Plan.
ARTICLE III
GRANTING OF AWARDS
Section 3.1 - Eligibility
Any Officer or key Employee of the Company or of any corporation which is
then a Subsidiary shall be eligible to be granted Awards, except as otherwise
provided herein.
Section 3.2 - Qualifications of Incentive Stock Options
No Incentive Stock Option shall be granted unless such Option, when
granted, qualifies as an "incentive stock option" under Section 422 of the Code.
Section 3.3 - Stock Payments
The Committee may approve Stock Payments of Class B Common Stock valued at
the Fair Market Value at the time of payment to an Employee or Officer: (i) for
all or any portion of the compensation, other than base salary, that would
otherwise become payable to an Employee or Officer in cash; or (ii) as an
incentive to employment with the Company. Each Stock Payment will be evidenced
by a written instrument signed by the Participant or granted pursuant to a
written performance plan adopted by the Committee and may include any other
terms and conditions consistent with the Plan as the Committee may in its
discretion determine.
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Section 3.4 - Granting of Awards
(a) The Committee shall from time to time, in its absolute discretion:
(i) Determine which Employees are key Employees and select from
among the Officers or key Employees (including those to whom Awards have
been previously granted under the Plan) such of them as in its opinion
should be granted Awards;
(ii) Determine the number of shares to be subject to such Awards
granted to such selected Officer or key Employees, and determine whether
such Awards are to be Incentive Stock Options, Non-Qualified Stock Options,
Stock Payments, Stock Appreciation Rights or any combination thereof; and
(iii) Determine the terms and conditions of such Awards,
consistent with the Plan.
(b) Upon the selection of an Officer or key Employee to be granted an
Award, the Committee shall, by resolution, set forth the terms and conditions of
the Award, instruct the Secretary or Chief Financial Officer to issue such Award
and, in the case of a grant of an Option, specify in the resolution whether such
Option is intended to be an Incentive Stock Option or a Non-Qualified Stock
Option; provided, however, that in the event no such specification is made in
such resolutions, the Committee will be deemed to have specified that such
Option is intended to be a Non-Qualified Stock Option; provided further,
however, that in the event such specification, whether explicit or implicit, is
inconsistent with terms set forth in such resolutions for such Option, then such
specification shall be deemed of no force or effect, and the Committee will be
deemed to have made a specification which is consistent with such terms. The
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of a Non-Qualified Stock Option to a
Participant that the Participant surrender for cancellation some or all of the
unexercised Non-Qualified Stock Options which have been previously granted to
him. A Non-Qualified Stock Option, the grant of which is conditioned upon such
surrender, may have an option price lower (or higher) than the option price of
the surrendered Non-Qualified Stock Option, may cover the same (or a lesser or
greater) number of shares as the surrendered Non-Qualified Stock Option, may
contain such other terms as the Committee deems appropriate and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, option period or any other term or condition of the surrendered
Non-Qualified Stock Option.
(c) Awards may not be granted by the Committee to Directors who are not
Officers or key Employees of the Company.
ARTICLE IV
TERMS OF OPTIONS
Section 4.1 - Option Price
The exercise price per share of the shares subject to each Option shall be
set by the Committee; provided, however, that the exercise price per share shall
be not less than 100 percent
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of the Fair Market Value of such shares on the date such Option is granted;
provided further, that, in the case of an Incentive Stock Option, the exercise
price per share shall be not less than 110 percent of the Fair Market Value of
such shares on the date such Option is granted in the case of an individual then
owning (within the meaning of Section 425(d) of the Code) more than 10 percent
of the total combined voting power of all classes of stock of the Company, any
Subsidiary or any Parent Corporation.
Section 4.2 - Commencement of Exercisability
(a) Except as the Committee may otherwise provide, no Option may be
exercised in whole or in part during the first year after such Award is granted.
(b) Subject to the provisions of Section 2.2, 4.2(a) , 4.2(c) and 8.2,
Options shall become exercisable at such times and in such installments (which
may be cumulative) as the Committee shall provide in the terms of each
individual Option; provided, however, that by a resolution adopted after an
Option is granted the Committee may in its absolute discretion, on such terms
and conditions as it may determine to be appropriate and subject to Sections
4.2(a) and 4.2(c) accelerate the time at which such Option or any portion
thereof may be exercised
(c) No portion of an Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
Section 4.3 - Expiration of Options
(a) No Incentive Stock Option may be exercised to any extent by anyone
after the first to occur of the following events:
(i) The expiration of ten years from the date the Incentive
Stock Option was granted; or
(ii) In the case of a Participant owning (within the meaning of
Section 425(d) of the Code), at the time the Incentive Stock Option was
granted, more than 10 percent of the total combined voting power of all
classes of stock of the Company, any Subsidiary or any Parent Corporation,
the expiration of five years from the date the Incentive Stock Option was
granted; or
(iii) Except in the case of any Participant who is disabled, the
expiration of three months from the date of the Participant's Termination
of Employment for any reason other than such participant's death, unless
the Participant dies within said three-month period; or
(iv) In the case of a Participant who is disabled, the expiration
of one year from the date of the Participant's Termination of Employment
for any reason other than such Participant's death, unless the Participant
dies within said one-year period; or
(v) The expiration of one year from the date of the
Participant's death.
For purposes of this Section 4.3, "disabled" shall mean a medically
determinable physical or
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mental impairment which has lasted or can be expected to last for a continuous
period of not less than 12 months (and in the case of an Incentive Stock Option,
or which can be expected to result in death) and which renders the Participant
substantially unable to function as an Officer or Employee of the Company or a
Subsidiary.
(b) Subject to the provisions of Section 4.3(a), the Committee shall
provide, in the terms of each individual Option, when such Option expires and
becomes unexercisable; and (without limiting the generality of the foregoing)
the Committee may provide in the terms of individual Options that said Options
expire immediately upon a Termination of Employment for any reason.
Section 4.4 - Employment of Participant
Nothing in this Plan or in any Stock Option Agreement, Stock Appreciation
Right Agreement or in any written instrument or written performance plan related
to Stock Payments hereunder shall confer upon any Participant any right to
continue in the employ of, or be retained by the Company or any Subsidiary or
shall interfere with or restrict in any way the rights of the Company and
Subsidiaries, which are hereby expressly reserved, to discharge any Participant,
or to terminate the services of any consultant, at any time for any reason
whatsoever, with or without good cause.
ARTICLE V
EXERCISE OF AWARDS
Section 5.1 - Person Eligible to Exercise
During the lifetime of the Participant, only he, his guardian, legal
representative or other person approved by the Committee in its sole discretion
and described in the terms of the agreements documenting such Award may exercise
an Award granted to him, or any portion thereof (unless, in the case of an Award
which is an Incentive Stock Option, such exercise would disqualify such Option
as an Incentive Stock Option). After the death of the Participant, any
exercisable portion of an Award may, prior to the time when such portion becomes
unexercisable under Article IV or Section 8.2, be exercised by his personal
representative or by any person empowered to do so under the deceased
Participant's will or under the then applicable laws of descent and
distribution.
Section 5.2 - Partial Exercise
At any time and from time to time prior to the time when any exercisable
Award or exercisable portion thereof becomes unexercisable under Article IV or
Section 8.2, such Award or portion thereof may be exercised in whole or in part;
provided, however, that the Company shall not be required to issue fractional
shares and the Committee may, by the terms of the Award, require any partial
exercise to be with respect to a specified minimum number of shares.
Section 5.3 - Manner of Exercise
An exercisable Award, or any exercisable portion thereof, may be exercised
solely by delivery
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to the Secretary or Chief Financial Officer or their respective offices of all
of the following prior to the time when such Award or such portion becomes
unexercisable under Section 4.3 or Section 8.2:
(a) Notice in writing by the Participant or other person then entitled to
exercise such Award or portion, stating that such Award or portion is exercised,
such notice complying with all applicable rules established by the Committee;
(b) (i) With respect to the exercise of Options, full payment (in
cash or by check) for the shares with respect to which such Option or
portion is thereby exercised;
(ii) With the consent of the Committee, shares of any Class of
the Company's Common Stock owned by the Participant either duly endorsed
for transfer to the Company or duly attested as to ownership with a Fair
Market Value (as determinable under Section 1.13) on the date of delivery
equal to the aggregate Option price of the shares with respect to which
such Option or portion is thereby exercised (which shares shall be owned by
the Participant for more than six months at the time they are delivered);
(iii) With the consent of the Committee (and provided the use of
the following procedure by a Participant would not violate Rule 16(b) under
the Act), delivery to the Company of (x) irrevocable instructions to
deliver the stock certificates representing the shares for which the Option
is being exercised directly to a broker, and (y) instructions to the broker
to sell such shares and promptly deliver to the Company the portion of the
sole proceeds equal to the aggregate Option exercise price;
(iv) With the consent of the Committee, any other form of
cashless exercise permitted under Section 5.4 hereof; or
(v) Any combination of the consideration provided in the
foregoing subsections (i), (ii), (iii) and (iv).
(c) Such representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee may, in its
absolute discretion, also take whatever additional actions it deems appropriate
to effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer orders to transfer agents and
registrars; and
(d) In the event that the Award or portion thereof shall be exercised
pursuant to Section 5.1 by any person or persons other than the Participant,
appropriate proof of the right of such person or persons to exercise the Award
or portion thereof.
Section 5.4 - Cashless Exercise Procedures
The Company, in its sole discretion, may establish procedures whereby a
Participant, subject to the requirements of Rule 16b-3 under the Act, Regulation
T issued by the Board of Governors of the Federal Reserve System pursuant to the
Act, federal income tax laws, and other federal, state and local tax and
securities laws, can exercise an Option or a portion thereof without making a
direct payment of the Option price to the Company. If the Company so elects to
establish a cashless
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exercise program, the Company shall determine, in its sole discretion and from
time to time, such administrative procedures and policies as its deems
appropriate and such procedures and policies shall be binding on any participant
wishing to utilize the cashless exercise program.
Section 5.5 - Conditions to Issuance of Stock Certificates
The shares of stock issuable and deliverable upon the exercise of an Award,
or any portion thereof, may be either previously authorized but unissued shares
or issued shares which have then been reacquired by the Company. The Company
shall not be required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Award or portion thereof or
upon a Stock Payment prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such Class of stock is then listed;
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body,
which the Committee shall, in its absolute discretion, deem necessary and
advisable;
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable;
(d) The payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the exercise of
the Award or grant of a Stock Payment; and
(e) The lapse of such reasonable period of time following the exercise of
the Award as the Committee may establish from time to time for reasons of
administrative convenience.
Section 5.6 - Rights as Stockholders
The holders of Awards shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect of any shares receivable
upon the exercise of any part of an Award unless and until certificates
representing such shares have been issued by the Company to such holders.
Section 5.7 - Transfer Restrictions
The Committee, in its absolute discretion, may impose such restrictions on
the transferability of the shares receivable upon the exercise of an Award or
upon the grant of a Stock Payment, as it deems appropriate. Any such
restriction shall be set forth in the respective Stock Option Agreement or Stock
Appreciation Right Agreement and may be, and in the case of a Stock Payment will
be, referred to on the certificates evidencing such shares. The Committee may
require the Participant to give the Company prompt notice of any disposition of
shares of stock, acquired by exercise of an Incentive Stock Option, within two
years from the date of granting such Option or one year after the transfer of
such shares to such Participant. The Committee may direct that the certificates
evidencing
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shares acquired by exercise of an Award refer to such requirement to give prompt
notice of disposition.
ARTICLE VI
STOCK APPRECIATION RIGHTS
Section 6.1 - Conditions to Grant of Rights
The Committee may approve the grant of Rights related or unrelated to
Options to Participants, subject to the following terms and conditions:
A Stock Appreciation Right may be granted: (i) at any time
if unrelated to an Option; (ii) either at the time of
grant, or at any time thereafter during the option term if
related to a Non-Qualified Stock Option; or (iii) only at
the time of grant if related to an Incentive Stock Option.
Section 6.2 - Rights Granted in Connection with Options
(a) A Stock Appreciation Right granted in connection with an Option will
require the holder of the related Option, upon exercise of the Stock
Appreciation Right, to surrender such Option, or any portion thereof to the
extent unexercised, with respect to the number of shares as to which such Stock
Appreciation Right is exercised, and will entitle the holder to receive payment
of an amount computed pursuant to Section 6.2(c). Upon the exercise of a Stock
Appreciation Right, the number of shares subject to exercise under the related
Option shall be automatically reduced by the number of shares represented by the
Option or portion thereof surrendered. Upon the exercise of an Option, the
number of shares subject to the related Stock Appreciation Right shall be
automatically reduced by the number of shares with respect to which the Option
was exercised.
(b) Subject to Section 6.4(b) and (c), a Stock Appreciation Right granted
in connection with an Option hereunder will be exercisable at such time or
times, and only to the extent that a related Option is exercisable, and will not
be transferable except to the extent that such related Option may be
transferable. A Stock Appreciation Right granted in connection with an
Incentive Stock Option shall be exercisable only if the Fair Market Value of a
share of Common Stock of the Company on the date of exercise exceeds the
purchase price per share of Common Stock specified in the related Option.
(c) Upon the exercise of a Stock Appreciation Right related to an Option,
the Option holder will be entitled to receive payment of an amount determined by
multiplying:
(i) The difference obtained by subtracting the purchase price of
a share of the Class A Common Stock or a share of the Class B Common Stock
specified in the related Option from the Fair Market Value of a share of
the Class A Common Stock or Class B Common Stock, as the case may be, on
the date of exercise of such Stock Appreciation Right,
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by
(ii) The number of shares of Class A Common Stock or the number
of shares of Class B Common Stock as to which such Stock Appreciation Right
has been exercised.
Section 6.3 - Rights Granted Unrelated to Options
The Committee may grant Stock Appreciation Rights unrelated to Options to
Participants. The amount payable upon exercise of such a Stock Appreciation
Right shall be determined in accordance with Section 6.2(c), except that "Fair
Market Value of a share of Class A Common Stock or a share of the Class B Common
Stock, as the case may be on the date of the grant of the Stock Appreciation
Right" shall be substituted for "purchase price of a share of the Class A Common
Stock or a share of Class B Common Stock specified in the related Option."
Section 6.4 - Form of Payment; Conditions
(a) Payment of the amount determined under Sections 6.2(c) or 6.3 shall be
made solely in cash or alternatively, at the sole discretion of the Committee,
may be made solely in whole shares of Class A Common Stock or Class B Common
Stock in a number determined at their Fair Market Value on the date of exercise
of the Stock Appreciation Right, or in a combination of cash and shares as the
Committee deems advisable. If the Committee decides to make full payment in
shares of Class A Common Stock or Class B Common Stock, and the amount payable
results in a fractional share, payment for the fractional share will be made in
cash.
(b) The Committee may, at the time a Stock Appreciation Right is granted,
impose such conditions on the exercise of the Stock Appreciation Right as may be
required to satisfy the requirements of Rule 16b-3 under the Act (or any other
comparable provisions in effect at the time or times in question).
ARTICLE VII
ADMINISTRATION
Section 7.1 - Duties and Powers of Committee
(a) The Plan shall be administered by a committee of the Board consisting
of two or more members of the Board, selected by the Board, all of which members
may be both a "Non-Employee Director" as defined in Rule 16b-3(b)(3) (or any
successor provision) promulgated under the Act, and an "Outside Director" as
defined for purposes of Section 162(m) (or any successor provision) of the Code
and the Regulations promulgated thereunder. It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and
the Awards and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. The Committee shall in its absolute discretion determine
whether to grant Non-Qualified Stock Options, Incentive Stock Options, Stock
Payments and/or Stock Appreciation Rights; provided that in the case of the
granting of Incentive Stock Options, any such interpretations
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and rules in regard to Incentive Stock Options shall be consistent with the
purposes of the Plan to grant "incentive stock options" within the meaning of
Section 422 of the Code.
(b) No Award granted hereunder shall be exercisable unless and until
evidenced by a written Stock Option Agreement, Stock Appreciation Right
Agreement or a written instrument related to a Stock Payment, if applicable,
which shall be executed by the participant and an authorized Officer of the
Company and which shall contain such terms and conditions as the Committee shall
determine, consistent with the Plan. Each such agreement shall expressly
incorporate by reference the provisions of this Plan (a copy of which shall be
made available for inspection by the Participant during normal business hours at
the principal office of the Company) and shall state that in the event of any
inconsistency between the provisions hereof and the provisions of such
agreement, the provisions of this Plan shall govern. Stock Option Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as
may be necessary to qualify such Options as "incentive stock options" under
Section 422 of the Code.
Section 7.2 - Majority Rule
The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a meeting or by a memorandum or other
written instruments signed by a majority of the Committee.
Section 7.3 - Compensation; Professional Assistance; Good Faith Actions
Members of the Committee shall not receive compensation for their services
as members but all expenses and liabilities they incur in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company and its
Officers and Directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all Participants, the Company and all other interested persons. No member
of the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options and
all members of the Committee shall be fully protected by the Company in respect
to any such action, determination or interpretation.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 - Adjustments in Outstanding Awards
In the event that the outstanding shares of the stock subject to Rights or
Options are changed into or exchanged for a different number or kind of shares
of the Company or other securities of the Company or (subject to Section 8.2
hereof) of another corporation by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split, stock dividend
or combination of shares, or in the event of extraordinary cash or non-cash
dividends being declared with respect to
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outstanding shares of Common Stock or similar transactions, the Committee shall
make an appropriate and equitable adjustment in the number and kind of shares as
to which all outstanding Rights or Options, or portions thereof then
unexercised, shall be exercisable, to the end that after such event the
Participant's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in an outstanding Right or Option or
the unexercised portion of the Right or Option (except for any change in the
aggregate price resulting from rounding-off of share quantities or prices) and
with any necessary corresponding adjustment in the exercise price per share (or,
with respect to Rights granted without Options, the Fair Market Value per share
on the date the Right was granted); provided, however, that, in the case of
Incentive Stock Options, each such adjustment shall be made in such manner as
not to constitute a "modification" within the meaning of Section 424(h)(3) of
the Code; provided, further, that each such adjustment shall be made in such
manner as not to constitute: (i) a "material modification" to any Award
intended to qualify for treatment as an "existing binding contract" in each case
within the meaning of Section 162(m)(4)(D) of the Code; or (ii) a cancellation
and reissuance of an Incentive Stock Option, Non-Qualified Stock Option or Stock
Appreciation Right for purposes of 162(m) of the Code, or the Regulations
promulgated thereunder to the extent that such reissuance would result in the
grant of such Awards in excess of the maximum permitted to be granted to any
Participant in any fiscal year. Any such adjustment made by the Committee shall
be final and binding upon all Participants, the Company and all other interested
persons.
Section 8.2 - Merger, Consolidation, Acquisition, Liquidation or Dissolution
a. Notwithstanding anything to the contrary in Section 4.2(a), Section
4.2(b) or any vesting provisions of any Award, any Award outstanding under the
Plan which has been held for at least six months shall become exercisable
immediately upon the effective date of a "Change of Control." As used in this
Section 8.2, the term "Change of Control" shall mean the occurrence of any of
the following: (i) a business combination effectuated through the merger or
consolidation of the Company with or into another entity where the Company is
not the Surviving Organization; (ii) any business combination effectuated
through the merger or consolidation of the Company with or into another entity
where the Company is the Surviving Organization and such business combination
occurred with an entity whose market capitalization prior to the transaction was
greater than 50 percent of the Company's market capitalization prior to the
transaction; (iii) the sale in a transaction or series of transactions of all or
substantially all of the Company's assets; (iv) any "person" or "group" (within
the meaning of Sections 13(d)and 14(d) of the Act) other than UniHealth, a
California non-profit public benefit corporation ("UniHealth"), acquires
beneficial ownership (within the meaning of Rule 13d-3 of the Act), directly or
indirectly, of 20 percent or more of the voting common stock of the Company and
the beneficial ownership of the voting common stock of the Company owned by
UniHealth at that date is less than or equal to the beneficial ownership
interest of voting securities attributable to such other person or group; (v) a
dissolution or liquidation of the Company; or (vi) the Company ceases to be
subject to the reporting requirements of the Act as a result of a "going private
transaction" (within the meaning of the Act). For purposes hereof, "Surviving
Organization" shall mean any entity where the majority of the members of such
entity's board of directors are persons who were members of the Company's board
of directors prior to the merger, consolidation or other business combination
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and the senior management of the surviving entity includes all of the
individuals who were the Company's executive management (the Company's chief
executive officer and those individuals who report directly to the Company's
chief executive officer) prior to the merger, consolidation or other business
combination and such individuals are in at least comparable positions with such
entity
b. The Committee may make such determinations and interpretations and
adopt such rules and conditions as it, in its absolute discretion, deems
appropriate in connection with a Change in Control and acceleration of
exercisability. All such determinations and interpretations by the Committee
shall be conclusive.
c. Each Participant shall receive at least 10 days' notice prior to the
effective date of the Change of Control that their Awards will be exercisable
upon the effective date of the Change of Control and the officers of the Company
shall make adequate provisions to permit all Participants to exercise their
Awards as of the effective date of the Change of Control.
Section 8.3 - Awards Not Transferable
No Award or interest or right therein or part thereof, excluding Stock
Payments, shall be liable for the debts, contracts or engagements of the
Participant or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy) and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that nothing in this
Section 8.3 shall prevent transfers by will or by the applicable laws of descent
and distribution or by other methods to any approved person pursuant to Section
5.1.
Section 8.4 - Withholding Tax Liability
(a) A holder of an Award granted hereunder may elect to deliver shares to
the Company or have the Company withhold shares otherwise issuable upon the
exercise of an Award in order to satisfy federal and state withholding tax
liability (a "share withholding election"), provided: (i) the Board or, if so
designated, the Committee, shall not have revoked its advance approval of the
holder's share withholding election; and (ii) the share withholding election is
made on or prior to the date on which the amount of withholding tax liability is
determined (the "Tax Date"). Notwithstanding the foregoing, a holder whose
transactions in Common Stock are subject to Section 16(b) of the Act may make a
share withholding election only if the following additional conditions are met:
(i) the withholding is made at least six months after the date of the grant of
the Award; and (ii) either (x) the share withholding election is irrevocably
made at least six months in advance of the withholding, or (y) the share
withholding election and the share withholding take place during the period
beginning on the third business day following the date of release of the
Company's quarterly or annual financial results and ending on the twelfth
business day following such date.
(b) A share withholding election shall be deemed made when written notice
of such election, signed by the holder of the Award, has been delivered or
transmitted by registered or
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certified mail to the Secretary or Chief Financial Officer of the Company at its
then principal office. Delivery of said notice shall constitute an irrevocable
election to have shares withheld.
(c) Upon exercise of an Award by a holder, the Company shall transfer the
total number of shares of Class A Common Stock or Class B Common Stock of the
Company subject to the Award to the holder on the date of exercise, less any
shares the holder elects to withhold.
(d) If a Participant disposes of shares acquired pursuant to an Incentive
Stock Option in any transaction considered to be a disqualifying transaction
under Sections 421 and 422 of the Code, the Participant must give the Company
written notice of such transfer and the Company shall have the right to deduct
any taxes required by law to be withheld from any amounts otherwise payable to
the Participant.
Section 8.5 - Amendment, Suspension or Termination of the Plan
The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board, but no
amendment may be awarded that is not subject to the approval of the stockholders
of the Company if stockholder approval would be required under Section 162(m) of
the Code, Section 422 of the Code or any other law or rule of any governmental
authority, stock exchange or other self-regulatory organization to which the
Company is subject. Neither the amendment, suspension nor termination of the
Plan shall, without the consent of the holder of the Award, impair any rights or
obligations under any Award heretofore granted. No Award may be granted during
any period of suspension nor after termination of the Plan, and in no event may
any Award be granted under this Plan after the expiration of ten years from the
date the Plan is approved by the Company's stockholders under Section 8.6. The
Committee may amend or otherwise modify any Award (either individually or as a
group) from time to time, but no amendment or modification shall, without the
consent of the holder of such Award, impair any rights or obligations of such
award.
Section 8.6 - Approval of Plan by Stockholders
The Plan will be submitted for the approval of the Company's stockholders
within 12 months after the date of the Board's initial adoption of the Plan and
as determined necessary or desirable for actions taken pursuant to Section 8.5.
Awards may be granted prior to such stockholder approval; provided, however,
that such Awards shall not be exercisable prior to the time when the Plan is
approved by the stockholders; provided further, that if such approval has not
been obtained at the end of said 12 month period, all Awards previously granted
under the Plan shall thereupon be cancelled and become null and void.
Section 8.7 - Effect of Plan Upon Other Incentive and Compensation Plans
The adoption of this Plan shall not affect any other compensation or
incentive plan in effect for the Company or any Subsidiary. Nothing in this
Plan shall be construed to limit the right of the Company or any Subsidiary:
(i) to establish any other forms of incentives or compensation
for Officers or
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Employees of the Company or any Subsidiary; or
(ii) to grant or assume Awards otherwise than under this Plan in
connection with any proper corporate purpose, including, but not limited
to, the grant or assumption of options or stock appreciation rights in
connection with the acquisition by purchase, lease, merger, consolidation
or otherwise, of the business, stock or assets of any corporation, firm or
association.
Section 8.8 - Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
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Exhibit 10.06
1996 NON-OFFICER DIRECTORS
STOCK OPTION PLAN
1. PURPOSE.
This 1996 Non-Officer Directors Stock Option Plan (the "Plan") of N-T
Holdings, Inc. or such other name as N-T Holdings, Inc. may adopt, a Delaware
corporation (the "Company"), is intended to promote the best interests of the
Company and its stockholders by strengthening the Company's ability to attract
and retain the services of experienced and knowledgeable non-officer directors
and to provide additional incentive for such directors to continue to work for
the best interests of the Company and its stockholders. The options granted
hereunder are not intended to qualify under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), as incentive stock options.
2. AMOUNT AND SOURCE OF STOCK.
The shares of stock subject to options shall be shares of the Company's
Class B Common Stock, par value $0.01 per share (the "Class B Common Stock").
The total number of shares of Class B Common Stock which may be the subject of
options granted pursuant to this Plan shall be limited so that the total number
of shares of Class B Common Stock issued upon the exercise of options granted
under this Plan shall not exceed 390,000, subject to adjustment as provided in
Section 10 of this Plan. In the event that any option granted hereunder expires
or is terminated or canceled prior to its exercise in full for any reason, the
shares subject to such option shall be added to the shares of Class B Common
Stock otherwise available for issuance pursuant to the exercise of options under
this Plan.
3. ADMINISTRATION OF THE PLAN.
(a) DUTIES AND POWERS OF THE COMMITTEE. This Plan shall be administered
by a committee of the Board of Directors of the Company (the "Board") comprised
of two or more members of the Board, selected by the Board (the "Committee").
Such members of the Committee may, but need not be, "Non-Employee Directors" as
defined in Rule 16b-3(b)(3) (or any successor provision) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). It shall be
the duty of the Committee to conduct the general administration of this Plan in
accordance with its provisions. The Committee shall have the power to interpret
this Plan and the respective option agreements and to adopt such rules for the
administration, interpretation and application of this Plan as are consistent
therewith and to interpret, amend or revoke any such rules. The Committee shall
have no authority with respect to the selection from among the eligible
individuals to whom options are to be granted (any such individual being
hereinafter referred to as the "optionee" or the "holder") or the number or
maximum number of shares of Class B Common Stock subject to any option that is
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granted to an eligible individual. The selection of optionees and the number of
shares subject to each option shall be determined in accordance with Section 4
of this Plan.
(b) MAJORITY RULE. The Committee shall act by a majority of its members
in office. The Committee may act either by vote at a meeting or by a memorandum
or other written instrument signed by a majority of the Committee.
(c) COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS. Members of
the Committee shall not receive compensation for their services as members but
all expenses and liabilities they incur in connection with the administration of
this Plan shall be borne by the Company. The Committee may, with the approval
of the Board, employ attorneys, consultants, accountants, appraisers, brokers or
other persons. The Committee, the Company and its officers and directors shall
be entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all optionees, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to this Plan or the options and all members of the Committee
shall be fully protected by the Company in respect to any such action,
determination or interpretation.
4. GRANT OF STOCK OPTIONS.
(a) ELIGIBILITY. All non-officer directors of the Company, who are not
eligible to receive options under the 1996 Stock Option Plan for Officers and
Key Employees of the Company, (the "1996 Plan"), shall be eligible to receive
options hereunder (the "Eligible Directors").
(b) STOCK OPTION GRANTS.
(i) The Committee shall, subject to the applicable limits of this
Plan, automatically grant each Eligible Director, upon being elected to the
Board, options to purchase 10,000 shares of Class B Common Stock.
(ii) The Committee shall, subject to the applicable limits of this
Plan, automatically grant each Eligible Director annually options to
purchase 5,000 shares of Class B Common Stock on the 31st day of December
in each calendar year commencing December 31, 1996; provided that the
optionee shall not have been eligible to receive options under the 1996
Plan for all or any part of the preceding 12-month period and shall have
served on the Board the entire preceding 12-month period. If additional
Eligible Directors are hereafter appointed to the Board, the Committee
shall, subject to the applicable limits of this Plan, automatically grant
annually each such person options to purchase 5,000 shares of Class B
Common Stock on the 31st day of December in each calendar year commencing
with the first
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December 31st following the date on which such director was appointed; so
long as the director is then eligible for the granting of options pursuant
to this Plan and has not been eligible to receive options under the 1996
Plan for all of the preceding 12-month period, and, such director shall
have served on the Board the entire preceding 12-month period. If the
number of shares of Class B Common Stock which may be the subject of
options under this Plan is not sufficient to make all automatic grants
required to be made pursuant to this Plan on the applicable date, the
number of shares of Class B Common Stock subject to the options granted to
each director shall be reduced on a pro rata basis.
(c) OPTION PRICE. The exercise price for the shares of Class B Common
Stock purchasable under any option granted hereunder shall be an amount equal to
100 percent of the Fair Market Value of the Class B Common Stock on the date of
grant. For purposes of this Plan, the "Fair Market Value" of the Class B Common
Stock on a given date shall be based upon: (i) the closing price per share of
the Class B Common Stock on the principal exchange on which the Class B Common
Stock is then trading, if any, on such date, or, if the Class B Common Stock was
not traded on such date, then on the next preceding trading day during which a
sale occurred; or (ii) if the Class B Common Stock was not traded on an exchange
but is quoted on the National Association of Securities Dealers Automatic
Quotation System ("Nasdaq") or a successor quotation system, (1) the last sales
price (if the Class B Common Stock is then listed as a National Market Issue
under the NASD National Market System), or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the Class B Common
Stock on such date as reported by Nasdaq or such successor quotation system; or
(iii) if the Class B Common Stock is not publicly traded on an exchange and not
quoted on Nasdaq or a successor quotation system, the mean between the closing
bid and asked prices for the Class B Common Stock on such date as determined in
good faith by the Committee; or (iv) if the Class B Common Stock is not publicly
traded, the fair market value established by the Committee acting in good faith.
5. TERMS AND CONDITIONS OF OPTIONS; VESTING.
(a) COMMENCEMENT OF EXERCISABILITY. Subject to Sections 5(b) and (c), and
Sections 7, 8 and 14, each option granted under this Plan shall become
exercisable in four cumulative installments as follows:
(i) The first installment shall consist of 25 percent of the shares
of Class B Common Stock covered by the option and shall become exercisable
on the first anniversary of the date of grant;
(ii) The second installment shall consist of 25 percent of the
shares of Class B Common Stock covered by the option and shall become
exercisable on the second anniversary of the date of grant;
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(iii) The third installment shall consist of 25 percent of the shares
of Class B Common Stock covered by the option and shall become exercisable
on the third anniversary of the date of grant; and
(iv) The fourth installment shall consist of all remaining shares of
Class B Common Stock covered by the option and shall become exercisable on
the fourth anniversary of the date of grant.
(b) VESTING CUMULATIVE. The installments provided for in this Section 5
are cumulative. Each such installment which becomes exercisable pursuant to
Section 5(a) shall remain exercisable until such installment becomes
unexercisable under Section 7. No portion of an option which is unexercisable
at Termination of Directorship (as defined in Section 7) shall thereafter be
exercisable.
(c) STOCK OPTION AGREEMENT. Subject to Section 14, the grant of options
by the Committee shall be effective as of the date of grant; provided, however,
that no option granted hereunder shall be exercisable unless and until the
holder shall enter into an individual option agreement with the Company that
shall set forth the terms and conditions of such option. Each such agreement
shall expressly incorporate by reference the provisions of this Plan (a copy of
which shall be made available for inspection by the optionee during normal
business hours at the principal office of the Company) and shall state that in
the event of any inconsistency between the provisions hereof and the provisions
of such agreement, the provisions of this Plan shall govern.
6. EXERCISE OF OPTIONS.
(a) PERSON ELIGIBLE TO EXERCISE. During the lifetime of the optionee,
only he, his guardian, legal representative or other person approved by the
Committee in its sole discretion and described in the terms of the agreement
documenting the option may exercise an option granted to him, or any portion
thereof. After the death of the optionee, any exercisable portion of an option
may, prior to the time when such option becomes unexercisable under Section 7,
be exercised by his personal representative or by any person empowered to do so
under the deceased optionee's will or under the applicable laws of descent and
distribution.
(b) PARTIAL EXERCISE. At any time and from time to time prior to when any
exercisable option or exercisable portion thereof becomes unexercisable under
Section 7, such option or portion thereof may be exercised in whole or in part;
provided, however, that the Company shall not be required to issue fractional
shares and the number of shares for which an option may be partially exercised
shall be not less than 100 shares.
(c) MANNER OF EXERCISE. An exercisable option, or any exercisable portion
thereof, may be exercised solely by delivery to the Secretary or Chief Financial
Officer of the
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Company or their respective offices of all of the following prior to the time
when such option or such portion becomes unexercisable under this Plan:
(i) Notice in writing signed by the optionee or other person then
entitled to exercise such option or portion, stating that such option or
portion is exercised, such notice complying with all applicable rules
established by the Committee;
(ii) (A) Full payment (in cash or by check) for the shares with
respect to which such option or portion is hereby exercised;
(B) With the consent of the Committee, shares of any class of
the Company's stock owned by the optionee either duly endorsed for
transfer to the Company or duly attested as to ownership with a Fair
Market Value (as determinable under Section 4(c)) on the date of
delivery equal to the aggregate option price of the shares of Class B
Common Stock with respect to which such option or portion is thereby
exercised (which shares shall be owned by the optionee for more than
six months at the time they are delivered);
(C) With the consent of the Committee, any other form of
cashless exercise permitted under Section 6(d) hereof; or
(D) Any combination of the consideration provided in the
foregoing subsections (A), (B) and (C);
(iii) Such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act of 1933, as amended, and
any other federal or state securities laws or regulations. The Committee
may, in its absolute discretion, also take whatever additional actions it
deems appropriate to effect such compliance including, without limitation,
placing legends on share certificates and issuing stop transfer orders to
transfer agents and registrars; and
(iv) In the event that the option, or portion thereof, shall be
exercised by any person or persons other than the optionee, appropriate
proof of the right of such person or persons to exercise the option or
portion thereof.
(d) CASHLESS EXERCISE. The Company, in its sole discretion, may establish
procedures whereby an optionee, to the extent permitted by and subject to the
requirements of Rule 16b-3 under the Exchange Act, Regulation T issued by the
Board of Governors of the Federal Reserve System pursuant to the Exchange Act,
federal income tax laws, and other federal, state and local tax and securities
laws, can exercise an option or a portion thereof without making a direct
payment of the option price to the Company. If the Company so elects to
establish a cashless exercise program, the Company shall determine, in its sole
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discretion and from time to time, such administrative procedures and policies as
it deems appropriate provided such procedures and policies are consistent with
those of any cashless exercise program established pursuant to the 1996 Plan.
Such procedures and policies shall be binding on any optionee wishing to utilize
the cashless exercise program.
7. EXPIRATION OF OPTIONS.
No option may be exercised to any extent by anyone after the first to occur
of the following events:
(i) The expiration of 10 years and one day from the date the option
was granted; or
(ii) The expiration of eight months from the time the optionee shall
voluntarily or involuntarily cease to continue to serve as a director of
the Company (a "Termination of Directorship"), unless such Termination of
Directorship results from his death or disability; or
(iii) The expiration of one year from the date of the optionee's
Termination of Directorship by reason of his disability; or
(iv) The expiration of one year from the date of optionee's death.
For purposes of this Section 7, "disability" shall mean a medically
determinable physical or mental impairment which has lasted or can be expected
to last for a continuous period of not less than 12 months and which renders a
director substantially unable to function as a director of the Company. Nothing
contained herein or in any option agreement shall be construed to confer on any
optionee any right to continue as a director of the Company.
8. ACCELERATION OF VESTING UPON A CHANGE OF CONTROL.
Notwithstanding anything to the contrary in Section 7 and/or any vesting
provisions of any option, any option which has been held for at least six months
shall become exercisable immediately upon the effective date of a "Change of
Control." As used in this Section 8, the term "Change of Control" shall mean
the occurrence of any of the following: (i) a business combination effectuated
through the merger or consolidation of the Company with or into another entity
where the Company is not the Surviving Organization; (ii) any business
combination effectuated through the merger or consolidation of the Company with
or into another entity where the Company is the Surviving Organization and such
business combination occurred with an entity whose market capitalization prior
to the transaction was greater than 50 percent of the Company's market
capitalization prior to the transaction; (iii) the sale in a transaction or
series of transactions of all or substantially all of the Company's assets; (iv)
any "person" or "group" (within the meaning of Sections 13(d) and 14(d) of the
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Exchange Act) other than UniHealth, a California nonprofit public benefit
corporation ("UniHealth"), acquires beneficial ownership (within the meaning of
Rule 13d-3 of the Exchange Act), directly or indirectly, of 20 percent or more
of the voting common stock of the Company and the beneficial ownership of the
voting common stock of the Company owned by UniHealth at that date is less than
or equal to the beneficial ownership interest of voting securities attributable
to such other person or group; (v) a dissolution or liquidation of the Company;
or (vi) the Company ceases to be subject to the reporting requirements of the
Exchange Act as a result of a "going private transaction" (within the meaning of
the Exchange Act). For purposes hereof, "Surviving Organization" shall mean any
entity where the majority of the members of such entity's board of directors are
persons who were members of the Company's board of directors prior to the
merger, consolidation or other business combination and the senior management of
the surviving entity includes all of the individuals who were the Company's
executive management (the Company's chief executive officer and those
individuals who report directly to the Company's chief executive officer) prior
to the merger, consolidation or other business combination and such individuals
are in at least comparable positions with such entity. The Committee may make
such determinations and interpretations and adopt such rules and conditions as
it, in its absolute discretion, deems appropriate in connection with a Change in
Control and acceleration of exercisability. All such determinations and
interpretations by the Committee shall be conclusive. Each optionee shall
receive at least 10 days' notice prior to the effective date of the Change of
Control that their options will be exercisable upon the effective date of the
Change of Control and the officers of the Company shall make adequate provisions
to permit all optionees to exercise their options as of the effective date of
the Change of Control.
9. NON-TRANSFERABILITY OF OPTIONS.
No option or interest or right therein or part thereof shall be liable for
the debts, contracts or engagements of the optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law or judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy) and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that nothing in this Section 9 shall
prevent transfers by will or by the applicable laws of descent and distribution
or by other methods to any approved person pursuant to Section 6(a).
10. ADJUSTMENTS UPON CERTAIN EVENTS.
(a) CHANGES IN COMPANY'S SHARES. In the event that the outstanding shares
of Class B Common Stock of the Company are hereafter changed into or exchanged
for a different number or kind of shares or other securities of the Company, or
of another corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split, stock dividend or combination
of shares, or in the event of extraordinary cash or non-cash
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dividends being declared with respect to the outstanding shares of Class B
Common Stock or other similar transactions, proportionate adjustments shall be
made by the Committee in the number and kind of shares for the purchase of which
options may be granted (including adjustments of the limitation on the maximum
number and kind of shares which may be issued on exercise of options), which
adjustments shall be consistent with comparable adjustments made pursuant to the
corresponding provision in the 1996 Plan.
(b) ADJUSTMENTS IN OUTSTANDING AWARDS. In the event that the outstanding
shares of Class B Common Stock of the Company are hereafter changed into or
exchanged for a different number or kind of shares or other securities of the
Company, or of another corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split, stock dividend
or combination of shares, or in the event of extraordinary cash or non-cash
dividends being declared with respect to the outstanding shares of Class B
Common Stock or other similar transactions, the Committee shall make
proportionate adjustments in the number and kind of shares as to which all
outstanding options, or portions thereof then unexercised, shall be exercisable,
to the end that after such event the optionee's proportionate interest shall be
maintained as before the occurrence of such event. Such adjustments shall be
consistent with comparable adjustments made pursuant to the corresponding
provision in the 1996 Plan. Such adjustment in an outstanding option shall be
made without change in the total price applicable to the option or the
unexercised portion of the option (except for any change in the aggregate price
resulting from rounding-off of share quantities or prices) and with any
necessary corresponding adjustment in option price per share. Any such
adjustment made by the Committee shall be final and binding upon all optionees,
the Company and all other interested persons.
11. GENERAL RESTRICTIONS.
(a) CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The shares of Class B
Common Stock issuable and deliverable upon the exercise of any option, or any
portion thereof, may be either previously authorized but unissued shares of
Class B Common Stock or issued shares of Class B Common Stock which have then
been reacquired by the Company. The Company shall not be required to issue or
deliver any certificate or certificates for shares of Class B Common Stock
purchased upon the exercise of any option or portion thereof prior to
fulfillment of all of the following conditions:
(i) The admission of such shares of Class B Common Stock to listing
on all stock exchanges on which such class of stock is then listed;
(ii) The completion of any registration or other qualification of
such shares of Class B Common Stock under any state or federal law or under
the rulings or regulations of the Securities and Exchange Commission or any
other governmental regulatory body, which the Committee shall, in its
absolute discretion, deem necessary or advisable;
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(iii) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable;
(iv) The payment to the Company of all amounts which it is required
to withhold under federal, state or local law in connection with the
exercise of the option; and
(v) The lapse of such reasonable period of time following the
exercise of the option as the Committee may establish from time to time for
reasons of administrative convenience.
(b) RIGHTS AS STOCKHOLDERS. The holders of options shall not be, nor have
any of the rights or privileges of, stockholders of the Company in respect of
any shares of Class B Common Stock receivable upon the exercise of any part of
an option unless and until certificates representing the shares of Class B
Common Stock have been issued by the Company to such holders.
12. WITHHOLDING TAX LIABILITY.
(a) A holder of an option granted hereunder may elect to deliver shares of
Class B Common Stock to the Company or have the Company withhold shares
otherwise issuable upon the exercise of an option in order to satisfy federal,
state and local withholding tax liability (a "share withholding election"),
provided: (i) the Board or, if so designated, the Committee, shall not have
revoked its advance approval of the holder's share withholding election; and
(ii) the share withholding election is made on or prior to the date on which the
amount of withholding tax liability is determined (the "Tax Date").
Notwithstanding the foregoing, a holder whose transactions in the Company's
equity securities are subject to Section 16(b) of the Exchange Act may make a
share withholding election only if the following additional conditions are met:
(i) the withholding is made at least six months after the date of the grant of
the option; and (ii) either (x) the share withholding election is irrevocably
made at least six months in advance of the withholding, or (y) the share
withholding election and the share withholding take place during the period
beginning on the third business day following the date of release of the
Company's quarterly or annual financial results and ending on the twelfth
business day following such date.
(b) A share withholding election shall be deemed made when written notice
of such election, signed by the holder, has been delivered or transmitted by
registered or certified mail to the Secretary or Chief Financial Officer of the
Company at its then principal office. Delivery of said notice shall constitute
an irrevocable election to have shares withheld.
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(c) Upon exercise of an option by a holder, the Company shall transfer the
total number of shares of Class B Common Stock subject to the option to the
holder on the date of exercise, less any shares of Class B Common Stock the
holder elects to withhold.
13. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
This Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board; provided
that the Board may not amend or modify this Plan without the approval of the
stockholders of the Company if stockholder approval would be required under
Section 422 of the Code or any law or rule of any governmental authority, stock
exchange or other self-regulatory organization to which the Company is subject.
Neither the amendment, suspension nor termination of this Plan shall, without
the consent of the holder of the option, impair any rights or obligations under
any option theretofore granted. The Committee may amend or otherwise modify the
terms of an option granted hereunder, from time to time, but no amendment or
modification shall, without the consent of the holder of such option impair any
rights or obligations of such option. No option may be granted during any
period of suspension nor after termination of this Plan, and in no event may any
option be granted under this Plan after exhaustion of the shares reserved for
shares subject to options granted pursuant to this Plan.
14. APPROVAL OF PLAN BY STOCKHOLDERS.
This Plan will be submitted for the approval of the Company's stockholders
within 12 months after the date of the Board's initial adoption of this Plan and
as determined necessary or desirable for actions taken pursuant to Section 13.
Options may be granted prior to such stockholder approval; provided, however,
that such options shall not be exercisable prior to the time when this Plan is
approved by the stockholders; provided, further, that if such approval has not
been obtained at the end of said 12-month period, all options previously granted
under this Plan shall thereupon be canceled and become null and void.
15. EFFECTIVE DATE OF PLAN.
Subject to Section 14, the effective date of this Plan shall be December 1,
1996.
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Exhibit 10.07
1996 MANAGEMENT INCENTIVE COMPENSATION PLAN
Section 1. PURPOSE
The purpose of the Management Incentive Compensation Plan is to
promote the interests of the Company by attracting and retaining
an outstanding management and key employee staff Under the Plan,
incumbents in stipulated key positions may receive Awards that
vary with the success of the Company, the Subsidiary Operating
Units as appropriate, and individual performance.
Section 2. DEFINITIONS
(a) "Award" refers to a contingent right to receive cash at the
end of a Plan Year.
(b) "Base Salary" refers to a Participant's September monthly
salary times twelve.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(d) "Committee" means a committee of the Board of Directors
consisting of two or more members of the Board of Directors,
selected by the Board, each of which members shall be an
"Outside Director" for purposes of Section 162(m) (or any
successor provision) of the Code and the Regulations
promulgated thereunder.
(e) "Company" refers to N-T Holdings, Inc. or such other name
which N-T Holdings, Inc. may adopt.
(f) "Key Manager" means any Executive Officer, as defined under
Rule 3b-7 of the rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended, of the Company
or any subsidiary of the Company. "Key Manager" also means
any Officer or full-time employee of the Company or any
subsidiary of the Company as are determined by the Committee
to have a direct, significant, and measurable impact on the
attainment of the Company's or subsidiary's long term growth
and profitability objectives.
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(g) "Officer" refers to an officer of the Company (including,
without limitation, the Chairman and Vice Chairman of the
Board of Directors) or any corporation which is then a
subsidiary, whether such Officer becomes an Officer at the
time this Plan is adopted or subsequent to the adoption of
this Plan.
(h) "Participant" refers to a Key Manager.
(i) "Plan" refers to this 1996 Management Incentive Compensation
Plan of the Company.
(j) "Plan Year" refers to each annual fiscal year of the
Company.
(k) "Regulations" means final, temporary or proposed regulations
promulgated under the Code.
(l) "Section 162 (m)" means Section 162 (m) or any successor
provision promulgated under the Code.
(m) "Subsidiary Operating Units" refers to any profit center so
designated by the Committee.
Section 3. ADMINISTRATION
The Plan will be administered by the Committee. The Committee
will: (i) approve the Participants eligible to receive Awards
under the Plan with respect to each Plan Year; (ii) determine the
performance measures; and (iii) determine the amount of Awards
subject to the terms and conditions set forth in the Plan and to
other terms and conditions consistent with the purpose and
provisions of the Plan.
The Committee may prescribe, amend, or rescind such rules,
regulations, policies, interpretations, and guides as deemed
appropriate for proper and effective Plan administration. In
addition, only the Board of Directors may suspend or terminate
the Plan. Any of the foregoing actions will affect future Plan
Years only.
No member of the Committee or employee of the Company will be
personally liable for any action, failure to act, determination,
or interpretation made in good faith with respect to the Plan or
any transaction under the Plan.
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All decisions, determinations, and interpretations of the
Committee will be final and binding.
Section 4. ELIGIBILITY AND PARTICIPATION
The persons eligible to participate in the Plan shall be Key
Managers.
The Committee will designate Participants who are to be granted
Awards for an Award year and, in its discretion, may designate
additional Participants during any Award year as deemed
appropriate; provided, however, that adjustments shall be made to
the minimum performance measures applicable to new Participants
to ensure that any Award payable to such new Participant is based
solely on the attainment of future performance objectives. The
Committee, through its designee, will notify Participants of
their eligibility in writing. The Committee will not be bound by
selections made for prior Award years.
Section 5. DETERMINATION AND ALLOCATION OF AWARDS
(a) ESTABLISHMENT OF ANNUAL OBJECTIVES AND FORMULAS. No later
than 90 days after the commencement of each Plan Year (or no
later than such earlier or later date as may be the
applicable deadline for compensation payable hereunder for
such Plan Year to qualify as "performance-based"
compensation under Section 162(m)), the Committee will
establish, in writing, specific financial and/or strategic
performance objectives for such Plan Year. At such time,
the Committee will establish minimum performance objectives
below which no Awards will be earned, maximum performance
objectives above which Awards will not be affected, and the
formula for computing each Participant's Award.
Notwithstanding anything to the contrary herein, the
performance objectives for any portion of this Plan that is
intended by the Committee to satisfy the requirements for
"performance based" compensation under Section 162(m) shall
be a measure based on one or more Qualifying Performance
Criteria (as defined in Section 10(b)).
Upon establishment of the performance objective(s) for a
specific Plan Year, the
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appointed designee of the Committee will notify each
participant in writing of the established objective(s).
If the Committee determines the established performance
measures are no longer suitable due to a change in the
Company's business, operations, corporate structure, capital
structure, or other conditions deemed by the Committee to be
material, the Committee will have sole discretion during the
Plan Year to modify the performance objectives as considered
appropriate and equitable; provided, however, that no such
adjustment will decrease the minimum performance goal
applicable to an Executive Officer, or otherwise have the
potential effect of increasing the amount of compensation
that would be payable to an Executive Officer upon the
attainment of the original performance goals; provided
further that no adjustment will be inconsistent with Section
10.
(b) STOCKHOLDER APPROVAL. Establishment of Awards for Executive
Officers shall be subject to, and contingent upon, the
disclosure to the stockholders of the Company of the
material terms of the Qualifying Performance Criteria and
stockholder approval of such terms. Such stockholder
approval shall be required each time the Committee changes
the material terms of the Qualifying Performance Criteria (a
change in the minimum performance objectives applicable to a
new Plan Year shall not be considered a change of a material
term of the Qualifying Performance Criteria). Absent a
change in the material terms of the Qualifying Performance
Criteria, such terms need not be reapproved by the
stockholders until the fifth year following the year in
which stockholders previously approved the Qualifying
Performance Criteria.
Section 6. PAYMENT OF AWARDS EARNED
The basis of Awards for a given Plan Year will be the achievement
of the performance objectives and, except in the case of
Executive Officers, individual contributions as determined by the
Committee. If minimum financial performance is not attained for
a Plan Year, no payment will be made and all contingent rights
will cease.
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Further, no additional payments will be made for financial
performance above he maximum objective.
If performance measures are achieved, the Committee shall certify
in writing, prior to the payment of any Award, that such
performance goals (and any other material terms) were satisfied.
The Award, if any, earned by each Participant will be paid as
soon as administratively possible following the close of the
applicable Plan year and the certification by the Committee,
described in the preceding sentence.
A Participant may elect in writing one year in advance of a Plan
Year, upon approval by the Committee, to defer receipt of all or
a portion of an Award earned for a specified time as approved by
the Committee. Payment of deferred amounts may be in a lump sum
on the designated payment date or in installments as approved by
the Committee. A Participant's right to any deferred Award will
be that of a general creditor of the Company; no trust will be
deemed to be created by virtue of such deferral.
Section 7. TERMINATION OF EMPLOYMENT
In the event of a Participant's death, disability, or retirement
during a Plan Year, payment of the Award earned will be prorated
unless otherwise determined by the Committee. Such Awards will
then be paid to the Participant, the Participant's estate or
legal representative as determined by the Committee.
In the event of a Participant's death, disability, or retirement,
after the end of the Plan Year but before payment of an Award to
which the Participant is entitled, such Award will be paid to the
Participant, the Participant's estate or legal representative.
In the event of termination of employment of a Participant or a
Participant ceases to be an Officer, voluntarily or by the
actions of the Company, with or without cause, for reasons other
than those specified above, at any time before payment of the
incentive award, the Participant will forfeit all rights to any
Award subject to the sole discretion of the Committee.
- 5 -
<PAGE>
Section 8. DISCRETIONARY INCENTIVE AWARD.
The Committee may, in its sole discretion, make an additional
award to any Participant determined by the Committee to have
positively impacted directly on the attainment of the performance
objectives established by the Committee.
Section 9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of a reorganization, merger, or consolidation of
which the Company is not the surviving corporation, or upon the
sale of substantially all the assets of the Company to another
corporation, or upon the dissolution or liquidation of the
Company, the Plan will terminate on the effective date of such
transaction. Provision will be made for determining the amount
of cash payable for all Awards for a Plan Year which will end
after such event unless provisions are made for the continuance
of the Plan and the assumption or substitution for such Awards of
an equivalent value by the successor corporation.
Adjustments under this section will be made by the Committee
whose determination as to what adjustments will be made and the
extent will be final, binding, and conclusive.
Section 10. GENERAL PROVISIONS
(a) No right to Participate: Nothing in the Plan will be deemed
to give a Participant or a Participant's legal
representative or any other person or entity claiming under
or through a Participant any contract or right to
participate in the benefits of the Plan.
(b) Qualifying Performance Criteria: For purposes of this Plan,
"Qualifying Performance Criteria" shall mean any of the
following criteria, either alone or in any combination, and
on either a consolidated or Subsidiary Operating Unit level,
and measured either on an absolute basis, relative basis
against a pre-established target, and/or peer group, or
prior year's performance as the Committee determine: (i)
revenue(sales); (ii) cash flow; (iii) earnings per share
(including earnings before interest, taxes
- 6 -
<PAGE>
and amortization); (iv) return on equity; (v) total
shareholder return, (vi) return on capital; (vii) return on
assets or net assets; (viii) income or net income; (ix)
operating income or net operating income; (x) operating
profit or net operating profit; (xi) operating margin; (xii)
market share; (xiii) member satisfaction; or (xiv) employee
satisfaction. The foregoing criteria shall have any
reasonable definitions that the Committee may specify, which
may include or exclude any or all of the following items as
the Committee may specify: extraordinary, unusual or non-
recurring items; effects of accounting changes; effects of
financing activities; expenses for restructuring or
productivity initiatives; other non-operating items;
spending for acquisitions; and effects of divestitures.
Any such Qualifying Performance Criteria or combination of
such criteria may apply to a Participant's Award opportunity
in its entirety or to any designated portion or portions of
the Award opportunity, as the Committee may specify.
(c) No Employment Right: Participation in the Plan will not be
construed as constituting a commitment, guarantee,
agreement, or understanding of any kind that the Company
will continue to employ any individual.
(d) Nontransferability: A Participant or any designed
beneficiary has no right to assign, transfer, attach, or
hypothecate any benefits or payments of the Plan.
(e) Withholding: The Company has the right to deduct any sums
federal, state, or local tax requires to be withheld with
respect to the payment of any Award.
(f) Restricted Liability: Payments held by the Company before
distribution will not be liable for the debts, contracts, or
obligations of any Participant or beneficiary, or be taken
in execution by attachment or garnishment, or by any other
legal or equitable proceeding.
- 7 -
<PAGE>
Section 11. AMENDMENT, SUSPENSION, OR TERMINATION OF PLAN
The Company may amend, suspend, or terminate the Plan at any
time. Such amendment, suspension, or termination will not
adversely alter or affect any right or obligation to any Award
made before this action. The Committee will determine the effect
on Performance Awards that may be effected by such event and make
adjustments and/or payments as it, in its sole discretion,
determines appropriate.
Section 12. EFFECTIVE DATE
This Plan will be effective upon its adoption by the Company and
may be applied retroactively to the beginning of the Company's
fiscal year at the sole discretion of the Committee.
- 8 -
<PAGE>
Exhibit 10.08
1996 LONG-TERM PERFORMANCE INCENTIVE PLAN
Section 1. PURPOSE
The Long-Term Performance Incentive Plan is designed to encourage
the successful growth and profitability of the Company by
strengthening the ability of the Company to: (i) stimulate and
reinforce outstanding performance of key managers who contribute
substantially to the achievement of long-term financial and
strategic objectives; (ii) reinforce a "team" orientation; (iii)
attract and retain personnel of superior capability; and (iv)
provide competitive management compensation.
Section 2. DEFINITIONS
(a) "Committee" means a committee of the Board of Directors
consisting of two or more members of the Board of Directors,
selected by the Board, each of which members shall be an
"Outside Director" for purposes of Section 162(m) and the
Regulations promulgated thereunder.
(b) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(c) "Company" means N-T Holdings, Inc. or such other name which
N-T Holdings, Inc. may adopt.
(d) "Key Manager" means any Executive Officer, as defined under
Rule 3b-7 of the rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended, of the Company
or any subsidiary of the Company. "Key Manager" also means
any Officer or full-time employee of the Company or any
subsidiary of the Company as are determined by the Committee
to have a direct, significant, and measurable impact on the
attainment of the Company's or a subsidiary's long-term
growth and profitability objectives.
(e) "Officer" means an officer of the Company (including,
without limitation, the Chairman and Vice Chairman of the
Board of Directors) or any corporation which is then a
subsidiary, whether such Officer becomes an
- 1 -
<PAGE>
Officer at the time this Plan is adopted or subsequent to
the adoption of this Plan.
(f) "Participant" means a Key Manager determined by the
Committee as eligible to receive an Award.
(g) "Performance Award" or "Award" means a contingent right to
receive cash or stock at the end of a Performance Period.
(h) "Performance Period" or "Cycle" means a period of three
consecutive fiscal years of the Company, beginning with the
fiscal year in which a Performance Award is granted and over
which the performance of the Company is measured for the
purpose of determining the Award earned, if any.
(i) "Plan" means this 1996 Long-Term Performance Incentive Plan
of the Company.
(j) "Regulations" means final, temporary or proposed regulations
promulgated under the Code.
(k) "Section 162 (m)" means Section 162 (m) or any successor
provision promulgated under the Code.
(l) "Subsidiary Operating Unit" means any profit center so
designated by the Committee.
Section 3. ADMINISTRATION
The Plan will be administered by the Committee. The Committee
will: (i) approve the Participants eligible to receive Awards
under the Plan with respect to each Performance Period; (ii)
determine the performance measures; and (iii) determine the
amount of Awards subject to the terms and conditions set forth in
this Plan and to other terms and conditions consistent with the
purpose and provision of this Plan. Such Awards may be made so
that more than one Performance Period is in progress
simultaneously.
The Committee may prescribe, amend, or rescind such rules,
regulations, policies, interpretations, and guides as deemed
appropriate for proper and effective administration of this Plan.
- 2 -
<PAGE>
No member of the Committee or employee of the Company will be
personally liable for any action, failure to act, determination,
or interpretation made in good faith with respect to the Plan or
any transaction under the Plan.
All decisions, determinations, and interpretations of the
Committee will be final and binding.
Section 4. ELIGIBILITY AND PARTICIPATION
The persons eligible to participate in the Plan shall be Key
Managers.
The Committee approves Participants who are to be granted
Performance Awards before the beginning of each Performance
Period and, at its discretion, may designate additional
Participants during any Performance Period as deemed appropriate;
provided, however, that adjustments shall be made to the minimum
performance measures applicable to new Participants to ensure
that any Award payable to such new Participant is based solely on
the attainment of future performance objectives. The Committee,
through its designee, will notify Participants in writing of
their eligibility. The Committee will not be bound by selections
made for prior Performance Periods.
Section 5. PERFORMANCE OBJECTIVES
(a) ESTABLISHMENT OF PERFORMANCE OBJECTIVES AND FORMULAS. No
later than 90 days after the commencement of each
Performance Period (or no later than such earlier or later
date as may be the applicable deadline for compensation
payable hereunder for such performance period to qualify as
"performance-based" compensation under Section 162(m)), the
Committee will establish, in writing, specific financial
and/or strategic performance objectives for such Performance
Period. At such time, the Committee will establish minimum
performance objectives below which no Awards will be earned,
maximum performance objectives above which Awards will not
be affected and the formula for computing each Participant's
Award. Notwithstanding anything to the contrary herein, the
performance objectives for any portion of this Plan that is
intended by the Committee to satisfy the requirements
- 3 -
<PAGE>
for "performance based" compensation under Section 162(m)
shall be a measure based on one or more Qualifying
Performance Criteria (as defined in Section 10(b)).
Upon establishment of the performance objective(s) for a
specific Performance Period, the appointed designee of the
Committee will notify each participant in writing of the
established objective(s).
If the Committee determines the established performance
measures are no longer suitable due to a change in the
Company's business, operations, corporate structure, capital
structure, or other conditions deemed by the Committee to be
material, the Committee will have sole discretion during the
Performance Period to modify the performance objectives as
considered appropriate and equitable; provided, however,
that no such adjustment will decrease the minimum
performance goal applicable to an Executive Officer, or
otherwise have the potential effect of increasing the amount
of compensation that would be payable to an Executive
Officer upon the attainment of the original performance
goals; provided further that no adjustment will be
inconsistent with Section 10.
(b) STOCKHOLDER APPROVAL. Establishment of Awards for Executive
Officers shall be subject to, and contingent upon, the
disclosure to the stockholders of the Company of the
material terms of the Qualifying Performance Criteria and
stockholder approval of such terms. Such stockholder
approval shall be required each time the Committee changes
the material terms of the Qualifying Performance Criteria (a
change in the minimum performance objectives applicable to a
new Performance Period shall not be considered a change of a
material term of the performance goal). Absent a change in
the material terms of the Qualifying Performance Criteria,
such terms need not be reprieved by the stockholders until
the fifth year following the year in which stockholders
previously approved the performance goal.
- 4 -
<PAGE>
Section 6. PAYMENTS OF AWARDS EARNED
The basis of Awards for a given Performance Period will be the
achievement of the financial and/or strategic performance
objectives and, except in the case of Executive Officers, overall
assessment of individual contributions as determined by the
Committee. If minimum performance is not attained for a
Performance Period, no payment will be made and all contingent
rights will cease. Further, no additional payments will be made
above the maximum objective.
If performance measures are achieved, the Committee shall certify
in writing, prior to the payment of any Performance Award, that
such performance goals (and any other material terms) were
satisfied. The Performance Award, if any, earned by each
Participant will be paid in cash and/or stock as soon as
administratively possible following the close of the applicable
Performance Period and the certification by the Committee,
described in the preceding sentence.
One year in advance of the end of the Performance Period, a
Participant may elect in writing, upon approval of the Committee,
to defer receipt of all or a portion of an Award earned for a
specified time as approved by the Committee. Payment of deferred
amounts may be in a lump sum on the designated payment date or in
installments as approved by the Committee. A Participant's right
to any deferred Award will be that of a general creditor of the
Company; no trust will be deemed to be created by virtue of such
deferral.
The Committee will set a reasonable interest rate, to be paid on
deferred funds, and the applicable terms and conditions of such
rate.
Section 7. TERMINATION OF EMPLOYMENT
In the event of a Participant's death, disability, or retirement
during a Performance Period, payment of the Award earned will be
prorated unless otherwise determined by the Committee. Such
Awards will then be paid to the Participant, the Participant's
estate, or legal representative as determined by the Committee.
In the event of a Participant's death, disability or retirement
after the end of a Performance
- 5 -
<PAGE>
Period, such Award will be paid to the Participant, the
Participant's estate, or legal representative as determined by
the Committee.
In the event of termination of employment of a Participant or a
Participant ceases to be an Officer, voluntarily or by the
actions of the Company with or without cause, for reasons other
than specified above, at any time before the end of the
Performance Period, the Participant will forfeit all rights to
any Award for such Performance period, subject to the provisions
of Section 8 or at the sole discretion of the Committee.
Section 8. DISCRETIONARY INCENTIVE AWARD.
The Committee may, in its sole discretion, make an additional
award to any participant otherwise eligible to participate in the
Plan who are determined by the Committee to have positively
impacted directly on the attainment of the performance objectives
established by the Committee.
Section 9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of a reorganization, merger, or consolidation of
which the Company is not the surviving corporation, or upon the
sale of substantially all the assets of the Company to another
corporation, or upon the dissolution or liquidation of the
Company, the Plan will terminate on the effective date of such
transaction. Provision will be made for determining the amount
of cash payable for all Performance Awards for all Performance
Periods that will end after such event unless provisions are made
for the continuance of the Plan and the assumption or
substitution for such Awards of an equivalent value by the
successor corporation. Deferred funds will become due within 60
days of such event unless provisions are made for the continuance
of the Plan and the assumption of deferred funds liability.
Adjustments under this section will be made by the Committee
whose determination as to what adjustments will be made and the
extent will be final, binding, and conclusive.
- 6 -
<PAGE>
Section 10. GENERAL PROVISIONS
(a) No Right to Participate: Nothing in the Plan will be deemed
to give a Participant or a Participant's legal
representative or any other person or entity claiming under
or through a Participant any contract or right to
participate in the benefits of the Plan.
(b) No Employment Right: Participation in the Plan does not
constitute a commitment, guarantee, contract, or
understanding of any kind that the Company will continue to
employ any individual.
(c) Qualifying Performance Criteria: For purposes of this Plan,
"Qualifying Performance Criteria" shall mean earnings per
share. The foregoing criteria shall have any reasonable
definitions that the Committee may specify, which may
include or exclude any or all of the following items as the
Committee may specify: extraordinary, unusual or
non-recurring items; effects of accounting changes; effects
of financing activities; expenses for restructuring or
productivity initiatives; other non-operating items;
spending for acquisitions; and effects of divestitures.
(d) Nontransferability: A Participant or any designed
beneficiary has no right to assign, transfer, attach, or
hypothecate any benefits or payments of the Plan.
(e) Withholding: The Company has the right to deduct any sums
federal, state or local tax law requires to be withheld with
respect to the payment of a Performance Award.
(f) Restricted Liability: Payments held by the Company before
distribution are not liable for the debts, contracts, or
obligations of any Participant or beneficiary, and are not
to be taken in execution by attachment or garnishment, or by
any other legal or equitable proceeding.
Section 11. AMENDMENT, SUSPENSION, OR TERMINATION OF PLAN
The Company may amend, suspend, or terminate the Plan at any
time. Such amendment, suspension, or
- 7 -
<PAGE>
termination will not adversely alter or affect any right or
obligation to any award made before this action. The Committee
will determine the effect on Performance Awards that may be
effected by such event and make adjustments and/or payments as
it, in its sole discretion, determines appropriate.
Section 12. EFFECTIVE DATE
This Plan will be effective upon its adoption by the Company and
may be applied retroactively to the beginning of the Company's
fiscal year at the sole discretion of the Committee.
- 8 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-31-1995
<PERIOD-END> AUG-31-1996
<CASH> 1
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
