<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 3, 1998
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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HORIZON PHARMACIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2441557
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
275 W. PRINCETON DRIVE
PRINCETON, TEXAS 75407
(972) 736-2424
(Address, including zip code, of Principal Executive Offices)
HORIZON PHARMACIES, INC. 1998 STOCK OPTION PLAN
(Full title of the plan)
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Copies to:
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<S> <C>
HORIZON PHARMACIES, INC. DOUGLAS A. BRANCH, ESQ.
275 W. PRINCETON DRIVE PHILLIPS MCFALL MCCAFFREY MCVAY & MURRAH, P.C.
PRINCETON, TEXAS 75407 12TH FLOOR, ONE LEADERSHIP SQUARE
TELEPHONE: (972) 736-2424 211 N. ROBINSON
(Name, address, including zip code, OKLAHOMA CITY, OKLAHOMA 73102
and telephone number, including TELEPHONE: (405) 235-4100
area code, of agent for service)
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value 450,000 shares $8.25 $3,712,500 $1,096.00
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(1) Pursuant to Rule 416(c) under the Securities Act of 1933, there are
also registered hereunder such additional indeterminate number of shares as
may be issued as a result of the antidilution provisions of the Plan.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
HORIZON Pharmacies, Inc. (the "Registrant") will send or give to all
participants in the HORIZON Pharmacies, Inc. 1998 Stock Option Plan (the "Plan")
the document(s) containing information specified by Part I of this Form S-8
Registration Statement (the "Registration Statement") as specified in Rule
428(b)(1) promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933 (the "1933 Act"). The Registrant
has not filed such document(s) with the Commission, but such documents (along
with the documents incorporated by reference into the Registration Statement
pursuant to Item 3 of Part II hereof) shall constitute a prospectus that meets
the requirements of Section 10(a) of the 1933 Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by HORIZON Pharmacies, Inc. (the
"Registrant") with the Commission are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's annual report filed pursuant to section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for the
fiscal year ended December 31, 1997 dated April 15, 1998 which contains audited
financial statements for the Registrant's latest fiscal year for which such
statements have been filed;
(b) The Registrant's Quarterly Reports on Form 10-QSB for the fiscal
quarters ended March 31, 1998 and June 30, 1998, Current Reports on Forms 8-K
dated (date of earliest event reported) January 1, 1998, January 29, 1998,
February 28, 1998, May 30, 1998, June 16, 1998, July 2, 1998, July 24, 1998,
July 31, 1998 and August 6, 1998, and Current Reports on Forms 8-K/A dated (date
of earliest event reported) May 30, 1998 and July 2, 1998;
(c) The description of the Registrant's common stock, par value $.01 per
share (the "Common Stock"), contained in the Registrant's Registration Statement
on Form 8-A filed with the Commission on April 21, 1997, and Form 8-A/A filed
with the Commission on June 10, 1997, including any amendment to such
registration statement or report filed for the purpose of updating such
description; and
(d) All documents, reports and definitive proxy statements filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
which are filed subsequent to the date hereof and prior to the filing of a
post-effective amendment which indicates the termination of the offering made
hereby.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Bylaws of the Registrant provide that directors and officers of the
Registrant may be indemnified by the Registrant for acts taken by such persons
while acting in their capacities as officers or directors of the Registrant to
the extent that any such acts were taken in good faith and the officer or
director reasonably believed the acts to be in or not opposed to the best
interests of the Registrant, and, with respect to criminal action or
proceedings, the officer or director had no reasonable cause to believe his
conduct was unlawful. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted pursuant to the foregoing provisions, the
Registrant has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following are exhibits to the Form S-8 Registration Statement.
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<CAPTION>
Exhibit No. Name of Exhibit
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<S> <C>
4.1 Form of Stock Certificate, incorporated by reference to Exhibit
4.1 to the Registrant's Registration Statement on Form S-3
(No. 333-61987) as filed with the Commission on August 21, 1998.
4.2 HORIZON Pharmacies, Inc. 1998 Stock Option Plan (filed
electronically herewith);
5.1 Opinion of Phillips McFall McCaffrey McVay & Murrah, P.C. (filed
electronically herewith);
23.1 Consent of Ernst & Young LLP. (filed electronically herewith);
23.2 Consent of Phillips McFall McCaffrey McVay & Murrah, P.C.(filed
electronically herewith);
24.1 Power of Attorney (included as part of the Signature Page).
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3)
of the 1933 Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities
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<PAGE>
offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(I) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the Registration Statement;
(2) That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirement for filing on Form S-8 and has duly caused this Form S-8
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Princeton, Texas, on this 2nd day of
September, 1998.
HORIZON PHARMACIES, INC.
By: /s/ Ricky D. McCord
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Ricky D. McCord, President and Chief
Executive Officer
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Ricky D. McCord as his true and lawful
attorney-in-fact and agent, with full power of substitution, for him, and in
his name, place and stead, in any and all capacities to sign any or all
amendments or post-effective amendment to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto the
said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons, in the
capacities and on the dates indicated.
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SIGNATURE TITLE DATE
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<S> <C> <C>
/s/ Ricky D. McCord
- ------------------------------------------ Chairman of the Board of September 2, 1998
Ricky D. McCord Directors, Chief Operating
PRINCIPAL EXECUTIVE OFFICER Officer and President
/s/ John N. Stogner
- ------------------------------------------ Chief Financial Officer, September 2, 1998
John N. Stogner Treasurer
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER
/s/ Charlie K. Herr
- ------------------------------------------ Director September 2, 1998
Charlie K. Herr
/s/ Michael F. Loy
- ------------------------------------------ Director September 2, 1998
Michael F. Loy
/s/ Robert D. Mueller
- ------------------------------------------ Director September 2, 1998
Robert D. Mueller
/s/ Sy S. Shahid
- ------------------------------------------ Director September 2, 1998
Sy S. Shahid
/s/ Phillip H. Yeilding
- ------------------------------------------ Director September 2, 1998
Phillip H. Yeilding
</TABLE>
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HORIZON PHARMACIES, INC.
1998 STOCK OPTION PLAN
1. PURPOSE. The purposes of the Plan are to enable the Company to
attract and retain the services of employees and employee directors and to
provide them with increased motivation and incentive to exert their best
efforts on behalf of the Company by enlarging their personal stake in the
Company's success.
2. DEFINITIONS. As used in the Plan, the following definitions apply
to the terms indicated below:
"BOARD" means the Board of Directors of the Company.
"CHANGE IN CONTROL" means the occurrence of any of the following:
(a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
hereinafter an "Acquiring Person")) becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 promulgated under the Exchange Act,
hereinafter a "Beneficial Owner"), directly or indirectly, of
securities of the Company representing 25% or more of the combined
voting power of the Company's then outstanding securities;
(b) an Acquiring Person becomes the Beneficial Owner, directly
or indirectly of securities of the Company representing 10% or more of
the combined voting power of the Company's then outstanding securities
and, during the two-year period commencing at the time such Acquiring
Person becomes the Beneficial Owner of such securities, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof;
(c) the Company's shareholders approve an agreement to merge or
consolidate the Company with another corporation (other than a
corporation 50% or more of which is controlled by, or is under common
control with, the Company) and, during the period
<PAGE>
commencing six months before such approval and ending two years after
such approval, individuals who at the beginning of such period constitute
the Board cease for any reason to constitute at least a majority thereof;
and
(d) during any two year period, individuals who at the date on
which the period commences constitute a majority of the Board cease to
constitute a majority thereof as a result of one or more contested
elections for positions on such Board.
"COMMITTEE" means the committee appointed by the Board from time to
time to administer the Plan pursuant to Section 4 hereof.
"COMPANY" means HORIZON Pharmacies, Inc.
"FAIR MARKET VALUE" of a Share on a given day means, if Shares are
listed on an established stock exchange or exchanges, the highest closing
sales price of a Share as reported on such stock exchange or exchanges; or if
not so reported, the average of the bid and asked prices, as reported on the
National Association of Securities Dealers Automated Quotation System. If
the price of a Share shall not be so quoted, the Fair Market Value shall be
determined by the Committee taking into account all relevant facts and
circumstances.
"INCENTIVE STOCK OPTION" means an Option that qualifies as an
incentive stock option within the meaning of Section 422 of the Code and
which is identified as an Incentive Stock Option in the agreement by which it
is evidenced.
"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"OPTION" means a right to purchase Shares under the terms and
conditions of the Plan as evidenced by an option certificate in such form not
inconsistent with the Plan, as the Committee may adopt for general use or for
specific cases from time to time.
"NONQUALIFIED STOCK OPTION" means an Option that is not an
Incentive Stock Option and which is identified as a Nonqualified Stock Option
in the agreement by which it is evidenced.
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"PARTICIPANT" means a employee or employee director eligible to
participate in the Plan under Section 5 hereof, to whom an Option is granted
under the Plan.
"PLAN" means the HORIZON Pharmacies, Inc. 1998 Stock Option Plan,
including any amendments to the Plan.
"SHARES" means shares of the Company's Common Stock, $.01 par
value, now or hereafter owned by the Company as treasury stock or authorized
but unissued shares of the Company's Common Stock, subject to adjustment as
provided in the Plan.
"SUBSIDIARY" means any corporation, now or hereafter existent, in
which the Company owns, directly or indirectly, stock comprising 50% or more
of the total combined voting power of all classes of stock of such
corporation.
3. PLAN ADOPTION AND TERM.
A. The Plan shall become effective upon its adoption by the
Board, and Options may be issued upon such adoption and from time to time
thereafter; provided, however, that the Plan shall be submitted to the
Company's shareholders for their approval at the next annual meeting of
shareholders, or prior thereto at a special meeting of shareholders expressly
called for such purpose, or by a unanimous consent of all shareholders
executed in writing; and provided further, that the approval of the Company's
shareholders shall be obtained within 12 months of the date of adoption of
the Plan. If the Plan is not approved at the annual meeting or special
meeting by the affirmative vote of a majority of all shares entitled to vote
upon the matter, or by unanimous written consent of all shareholders, then
the Plan and all Options then outstanding hereunder shall forthwith
automatically terminate and be of no force and effect.
B. Subject to the provisions hereinafter contained relating to
amendment or discontinuance, the Plan shall continue in effect for 10 years
from the date of its adoption by the Board. No Option may be granted
hereunder after such 10-year period.
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4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee, consisting of not less than two persons, who shall be directors of
the Company, who shall not be employees of the Company, and who shall be
appointed by the Board to serve at the pleasure of the Board. Except as
otherwise expressly provided in the Plan, the Committee shall have sole and
final authority to interpret the provisions of the Plan and the terms of any
Option issued under it and to promulgate and interpret such rules and
regulations relating to the Plan and Options as it may deem necessary or
desirable for the administration of the Plan. Without limiting the
foregoing, the Committee shall, subject to Section 6 and to the extent and in
the manner contemplated herein, determine who shall receive Options under the
Plan and how many Shares shall be subject to each such Option. The Committee
shall report to the Board the names of those granted Options and the terms
and conditions of each Option granted by it. The Committee may correct any
defect in the Plan or any Option in the manner and to the extent it shall
deem expedient to carry the Plan into effect and shall be the sole and final
judge of such expediency.
No member of the Committee shall be liable for any action taken or
omitted or any determination made by him in good faith relating to the Plan,
and the Company shall indemnify and hold harmless each member of the
Committee and each other director or employee of the Company to whom any duty
or power relating to the administration or interpretation of the Plan has
been delegated against any cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a claim with the approval
of the Committee) arising out of any act or omission in connection with the
Plan, unless arising out of such person's own fraud or bad faith.
5. ELIGIBILITY. The employees and employee directors of the Company
and its Subsidiaries, who, in the opinion of the Committee, have a capacity
for contributing in a substantial measure to the success of the Company and
its Subsidiaries, shall be eligible to participate in the Plan. No options
intended to qualify as Incentive Stock Options shall be granted under the
Plan to any person who, before or after the grant or exercise of any Option,
owns or would own, directly or indirectly, more than 10% of the total
combined
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voting power of all classes of stock of the Company, or its parent or any
Subsidiary, or who is not an employee of the Company.
6. STOCK SUBJECT TO THE PLAN. Subject to adjustment as provided in
Section 13 hereof, Options may be granted pursuant to the Plan with respect
to a number of Shares that, in the aggregate, does not exceed Four Hundred
Fifty Thousand (450,000) Shares.
7. OPTIONS.
A. All Options granted under the Plan shall be clearly identified
either as Incentive Stock Options or as Nonqualified Stock Options. All
Options granted under the Plan shall be evidenced by agreements in such form,
not inconsistent with the Plan, as the Committee may adopt for general use or
for specific use from time to time. An Option shall be deemed "granted"
under the Plan on the date on which the Committee, by appropriate action,
awards the Option to a Participant, or on such subsequent date as the
Committee may designate.
B. (i) The aggregate Fair Market Value of Shares with respect to
which Incentive Stock Options granted under the Plan are exercisable for the
first time by a Participant during any calendar year under the Plan and any
other stock option plan of the Company (and its parent and subsidiary
corporations as those terms are used in Section 422 of the Code) shall not
exceed $100,000. Such Fair Market Value shall be determined as of the date
on which each such Incentive Stock Option is granted. To the extent that the
aggregate Fair Market Value of Shares with respect to such Incentive Stock
Options exceeds $100,000, such Incentive Stock Options shall be treated as
Nonqualified Options, but all other terms and provisions of such Incentive
Stock Options shall remain unchanged.
(ii) Subparagraph (i) of this Paragraph B shall be applied by
taking Options into account in the order in which they were granted.
8. OPTION PRICE. The price per share at which Shares may be purchased
pursuant to any Option granted under the Plan shall be not less than 100% of
the Fair Market Value of a Share on the date the Option is granted.
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9. DURATION OF OPTIONS. No Option granted hereunder shall be
exercisable after the expiration of 10 years from the date such Option was
granted. All Options shall be subject to earlier termination as provided
elsewhere in the Plan.
10. CONDITIONS RELATING TO EXERCISE OF OPTIONS.
A. The Board may, at its discretion, provide that an Option may
not be exercised in whole or in part for any period or periods of time
specified in the Option agreement. Except as provided in the Option
agreement, an Option may be exercised in whole or in part at any time during
its term. No Option may be exercised for a fractional share of stock.
B. No Option shall be transferable by a Participant otherwise
than by will or the laws of descent and distribution and Options shall be
exercisable during the lifetime of a Participant only by such Participant.
C. An Option shall be exercised by the delivery to the Company of
a written notice signed by the Participant, which specifies the number of
Shares with respect to which the Option is being exercised and the date of
the proposed exercise. Such notice shall be delivered to the Company's
principal office, to the attention of its Secretary, no less than three
business days in advance of the date of the proposed exercise and shall be
accompanied by the applicable option certificate evidencing the Option. A
Participant may withdraw such notice at any time prior to the close of
business on the proposed date of exercise, in which case the option
certificate evidencing the Option shall be returned to the Participant.
D. Payment for Shares purchased upon exercise of an Option shall
be made at the time of exercise either in cash, by certified check or bank
cashier's check or in Shares owned by the Participant and valued at their
Fair Market Value on the date of exercise, or partly in Shares with the
balance in cash or by certified check or bank cashier's check. Any payment
in Shares shall be effected by their delivery to the Secretary of the
Company, endorsed in blank or accompanied by stock powers executed in blank.
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E. Certificates for Shares purchased upon exercise of Options
shall be issued and delivered as soon as practicable following the date the
Option is exercised. Certificates for Shares purchased upon exercise of
Options shall be issued in the name of the Participant.
F. Notwithstanding any other provision in the Plan, no Option may
be exercised unless and until the Shares to be issued upon the exercise
thereof have been registered under the Securities Act of 1933 and applicable
state securities laws, or are, in the opinion of counsel to the Company,
exempt from such registration. Prior to the occurrence of a Change in
Control, the Company shall not be under any obligation to register under
applicable Federal or state securities laws any Shares to be issued upon the
exercise of an Option granted hereunder, or to comply with an appropriate
exemption from registration under such laws in order to permit the exercise
of an Option and the issuance and sale of the Shares subject to such Option.
If the Company chooses to comply with such an exemption from registration,
the Shares issued under the Plan may, at the discretion of the Committee,
bear an appropriate restrictive legend restricting the transfer or pledge of
the Shares represented thereby, and the Committee may also give appropriate
stop-transfer instructions to the transfer agent to the Company. On or after
the occurrence of a Change in Control, the Company shall be under an
obligation to register under applicable Federal or state securities law any
Shares to be issued upon the exercise of an Option granted hereunder, or to
comply with an appropriate exemption from registration under state or Federal
securities laws in order to permit the exercise of an Option and the issuance
and sale of the Shares subject to such Option.
G. Any person exercising an Option or transferring or receiving
Shares shall comply with all regulations and requirements of any governmental
authority having jurisdiction over the issuance, transfer, or sale of capital
stock of the Company, and as a condition to receiving any Shares, shall
execute all such instruments as the Company in its sole discretion may deem
necessary or advisable.
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H. Notwithstanding Paragraph A of this Section 10, the Committee
may, in its sole discretion, accelerate the date on which any Option granted
under the Plan, and outstanding at such time, shall become exercisable.
I. Notwithstanding Paragraph A of this Section 10, upon the
occurrence of a Change in Control any Option granted under the Plan and
outstanding at such time shall become fully and immediately exercisable and
shall remain exercisable until its expiration or termination as provided in
the Plan.
J. In the event of termination of a Participant's employment by
reason of such Participant's retirement in accordance with an applicable
retirement plan, any outstanding Option held by such Participant shall be or
immediately become fully exercisable as to the total number of Shares subject
thereto (whether or not exercisable to that extent prior to termination of
employment) and shall remain so exercisable but only for a period of three
months after commencement of such retirement, at the end of which time it
shall terminate (unless such Option expires earlier by its terms).
K. In the event of termination of a Participant's employment by
reason of such Participant's disability within the meaning of Section
22(e)(3) of the Code, any outstanding Option held by such Participant shall
be or immediately become fully exercisable as to the total number of Shares
subject thereto (whether or not exercisable to that extent prior to
termination of employment) and shall remain so exercisable but only for a
period of one year after termination of employment for such disability, at
the end of which time it shall terminate (unless such Option expires earlier
by its terms).
L. In the event of the death of any Participant (including death
during an approved leave of absence or following a Participant's retirement
or disability), any Option then held by him which shall not have lapsed or
terminated prior to his death shall be or immediately become fully
exercisable by the executors, administrators, legatees, or distributees of
his estate, as may be appropriate, as to the total number of Shares subject
thereto (whether or not exercisable to that extent at the time of death) and
shall remain so
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exercisable but only for a period of one year after death, at the end of
which time it shall terminate (unless such Option expires earlier by its
terms).
M. In the event of the termination of the Participant's
employment otherwise than as described in paragraphs J, K and L, any
outstanding Option held by such Participant shall be exercisable to the
extent exercisable at the time of such termination and remain so exercisable
for a period of 30 days following such termination. Whether an authorized
leave of absence, or absence in military or government service, shall
constitute termination of employment shall be determined by the Committee.
11. NO EMPLOYMENT RIGHTS. Nothing contained in the Plan or any Option
shall confer upon any Participant any right with respect to the continuation
of his employment by the Company or interfere in any way with the right of
the Company, subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such employment or to increase or decrease
the compensation of the Participant from the rate in existence at the time of
the grant of an Option.
12. RIGHTS OF A SHAREHOLDER. No person shall have any rights with
respect to any Shares covered by or relating to any grant hereunder of an
Option until the date of issuance of a certificate to him evidencing such
Shares. Except as otherwise expressly provided in the Plan, no adjustment to
any Option shall be made for dividends or other rights for which the record
date occurs prior to the date such certificate is issued.
13. ADJUSTMENT UPON CHANGES IN CAPITAL STOCK.
A. If the capital stock of the Company shall be subdivided or
combined, whether by reclassification, stock dividend, stock split, reverse
stock split or other similar transaction, then the number of Shares
authorized under the Plan, the number of Shares then subject to or relating
to unexercised Options granted hereunder and the exercise price per Share
will be adjusted proportionately. A stock dividend shall be treated as a
subdivision of the whole number of Shares equal to such whole number of
Shares so outstanding plus the number of Shares issued as a stock dividend.
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B. In the case of any capital reorganization or any
reclassification of the capital stock of the Company (except pursuant to a
transaction described in Paragraph A of this Section 13) (a
"Reorganization"), appropriate adjustment may be made by the Committee in the
number and class of shares authorized to be issued under the Plan and the
number and class of shares subject to or relating to Options awarded under
the Plan and outstanding at the time of such Reorganization.
C. Each Participant will be notified of any adjustment made
pursuant to this Section 13 and any such adjustment, or the failure to make
such adjustment, shall be binding on the Participant.
D. Except as expressly set forth herein, the number and kind of
Shares subject to Options, shall not be affected by any transaction
(including, without limitation, any merger, recapitalization, stock split,
stock dividend, issuance of stock or similar transaction) affecting the
capital stock of the Company and no Participant shall be entitled to any
additional Options on account thereof.
14. WITHHOLDING TAXES.
A. Whenever Shares are to be issued upon the exercise of an
Option, the Company shall have the right to require the Participant to remit
to the Company in cash an amount sufficient to satisfy Federal, state and
local withholding tax requirements, if any, prior to the delivery of any
certificate or certificates for such Shares.
B. Notwithstanding Paragraph A of this Section 14, at the
election of a Participant, subject to the approval of the Committee, when
Shares are to be issued upon the exercise of an Option, the Participant may
tender to the Company a number of Shares, or the Company shall withhold a
number of such shares, the Fair Market Value of which is sufficient to
satisfy the Federal, state and local tax requirements, if any, attributable
to such exercise or occurrence. The Committee hereby grants its approval to
any election made pursuant to this Paragraph B, but reserves the right, in
its absolute discretion, to withdraw such approval in case of any such
election effective upon its delivery of notice thereof to the Participant.
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<PAGE>
C. Notwithstanding Paragraph E of Section 10 hereof, if a
Participant subject to the provisions of Section 16(b) of the Exchange Act
who has not made an election pursuant to Section 83(b) of the Code, makes an
election described in Paragraph B of this Section 14 to have Shares withheld
with respect to an Option, then the Company shall hold as custodian for the
Participant certificates evidencing the total number of Shares required to be
issued pursuant to the exercise of the Option until the expiration of six
months following the date of such exercise. Upon the expiration of such
six-month period, the Company shall deliver to such Participant certificates
evidencing such Shares minus a number of such Shares, the Fair Market Value
of which on the date on which such period expires is sufficient to satisfy
the Federal, state and local tax requirements attributable to such exercise.
D. Notwithstanding any other provisions of the Plan, a individual
who is subject to Section 16(b) of the Exchange Act, may not make either of
the elections described in Paragraph B of this Section 14 prior to the
expiration of six months after the date on which the applicable Option was
granted. Such elections must be made either (i) during the 10-day window
period described in Section (e)(3)(iii) of Rule 16b-3 promulgated under such
Section 16(b) of the Exchange Act, or (ii) at least six months prior to the
date as of which the income attributable to the exercise of the related
Option is recognized under the Code. Such elections shall be irrevocable and
shall be made by the delivery to the Company's principal office, to the
attention of its Secretary, of a written notice signed by Participant.
15. AMENDMENT OF THE PLAN.
A. The Board may at any time and from time to time suspend,
discontinue, modify or amend the Plan in any respect whatsoever except that
the Board may not suspend, discontinue, modify or amend the Plan so as to
adversely affect the rights of a Participant with respect to any grants that
have theretofore been made to such Participant without such Participant's
approval.
B. No amendment to or modification of the Plan which: (i)
materially increases the benefits accruing to Participants; (ii) except as
provided in Sections 6 and 13 hereof, increases the number
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of Shares that may be issued under the Plan; or (iii) modifies the
requirements as to eligibility for participation under the Plan shall be
effective without shareholder approval.
16. MISCELLANEOUS.
A. It is expressly understood that the Plan grants powers to the
Committee but does not require their exercise; nor shall any person, by
reason of the adoption of the Plan, be deemed to be entitled to the grant of
any Option; nor shall any rights be deemed to accrue under the Plan except as
Options may be granted hereunder.
B. All rights hereunder shall be governed by and construed in
accordance with the laws of Texas.
C. All expenses of the Plan, including the cost of maintaining
records, shall be borne by the Company.
Approved by the Board of Directors February 28, 1997; Adopted by the
Shareholders June 4, 1998.
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September 2, 1998
HORIZON Pharmacies, Inc.
275 W. Princeton Drive
Princeton, Texas 75407
Re: HORIZON Pharmacies, Inc. (the "Company")
Form S-8 Registration Statement
----------------------------------------
Gentlemen:
We have acted as counsel to the Company in connection with the
preparation of the Registration Statement on Form S-8 (the "Registration
Statement"), to be filed by the Company with the Securities and Exchange
Commission (the "Commission"), relating to 450,000 shares of the Company's
common stock, $.01 par value (the "Common Stock"), issuable under the HORIZON
Pharmacies, Inc.1998 Stock Option Plan (the "Plan").
Based on the foregoing, we are of the opinion that the shares of Common
Stock to be issued under the Plan are validly authorized and, upon issuance
in accordance with the terms of the Plan, will be legally issued, fully paid
and nonassessable.
We are members of the bar of the State of Oklahoma and do not hold
ourselves out as experts on, or as generally familiar with, or qualified to
express opinions under law other than the law of the State of Oklahoma, the
general corporate law of the State of Delaware, and the law of the United
States and the opinion given herein is limited thereto.
Very truly yours,
PHILLIPS MCFALL MCCAFFREY MCVAY
& MURRAH, P.C.
/s/ Phillips McFall McCaffrey McVay &
Murrah, P.C.
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-_____) pertaining to the HORIZON Pharmacies, Inc. 1998 Stock Option
Plan of our report dated March 16, 1998, with respect to the consolidated
financial statements of HORIZON Pharmacies, Inc. included in its Annual
Report (Form 10-KSB) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Oklahoma City, Oklahoma
August 28, 1998
<PAGE>
CONSENT OF COUNSEL
Phillips McFall McCaffrey McVay & Murrah, P.C., hereby consents to the
filing of its opinion of counsel as an exhibit to the Form S-8 Registration
Statement filed by HORIZON Pharmacies, Inc.
PHILLIPS MCFALL MCCAFFREY MCVAY & MURRAH, P.C.
/s/ Phillips McFall McCaffrey McVay & Murrah, P.C.
Oklahoma City, Oklahoma
September 2, 1998
