<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 17, 2000
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
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.)
531 WEST MAIN STREET, SUITE 100
DENISON, TEXAS 75020
(Address of principal executive offices, including zip code)
--------------------
HORIZON PHARMACIES, INC. 1999 STOCK OPTION PLAN
(Full title of the plan)
RICKY D. MCCORD
HORIZON PHARMACIES, INC.
531 WEST MAIN STREET, SUITE 100
DENISON, TEXAS 75020
(903) 465-2397
(Name, address and telephone number of agent for service)
copy to:
JAY H. HEBERT, ESQ.
VINSON & ELKINS L.L.P.
2001 ROSS AVENUE, SUITE 3700
DALLAS, TEXAS 75201-2975
(214) 220-7700
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================
Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered registered price per share (1) offering price (1) registration fee
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par
value per share............ 600,000 shares (2) $3.53 $2,118,000 $559
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933 and based
on the average of the high and low trading prices of the Registrant's
Common Stock on the American Stock Exchange on May 10, 2000.
(2) If, as a result of stock splits, stock dividends or similar
transactions, the number of securities purported to be registered on
this Registration Statement changes, the provisions of Rule 416 shall
apply to this Registration Statement, and this Registration Statement
shall be deemed to cover the additional securities resulting from the
split of, or dividend on the securities covered by this Registration
Statement.
================================================================================
<PAGE>
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. 1999 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 "Securities Act"). The
Registrant has not filed such document(s) with the Commission, but such
documents (along with the documents incorporated by reference into this
Registration Statement pursuant to Item 3 of Part II hereof) shall constitute
a prospectus that meets the requirements of Section 10(a) of the Securities
Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates by reference into this Registration
Statement the following documents:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999, filed with the Commission
pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act") on April 14, 2000;
(b) The Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2000, filed with the
Commission pursuant to the Exchange Act on May 15, 2000; and
(c) The description of the Registrant's Common Stock, $0.01 par
value, contained in the Registrant's Registration Statement on
Form 8-A filed with the Commission on April 21, 1997, and Form
8A/A filed with the Commission on June 10, 1997, pursuant to
the Exchange Act, including any amendments or reports filed
for the purposes of updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing
of a post-effective amendment that indicates that all securities offered have
been sold or that deregisters all securities then remaining unsold shall also
be deemed to be incorporated by reference herein and to be a part hereof from
the dates of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Registration Statement to
the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII of the Bylaws (the "Bylaws") of the Registrant provides
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
-2-
<PAGE>
unlawful. With respect to actions by or in the right of the Registrant,
however, indemnification is not permitted if the director or officer is
adjudged to be liable for negligence or misconduct in the performance of his
duty to the Registrant unless the court in which such action has been brought
determines that indemnification is fair and reasonable. Article VII of the
Bylaws expressly provides that the power to indemnify authorized thereby is
not exclusive of any rights granted under any bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise. Article VII of the
Bylaws provides the Registrant the power to purchase and maintain insurance
for its directors and officers. To the extent an officer or director is
successful on the merits or otherwise in defense of any action, suit or
proceeding the Registrant shall indemnify such officer or director for
expenses actually and reasonably incurred.
Article VII of the Bylaws does not expressly provide indemnification
to the full extent permitted by Section 145 of the Delaware General
Corporation Law (the "DGCL"), although the indemnification provisions of the
Bylaws generally parallel the indemnification allowed to officers and
directors under Section 145 of the DGCL. The Certificate of Incorporation of
the registrant has no provisions relating to the indemnification of officers
and directors.
The preceding discussion of the Company's Certificate of
Incorporation, the Bylaws and Section 145 of the DGCL is not intended to be
exhaustive and is qualified in its entirety by the Certificate of
Incorporation, the Bylaws and Section 145 of the DGCL.
Insofar as indemnification for liabilities arising under the
Securities 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 Securities Act
and is, therefore, unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
NUMBER DESCRIPTION
------- -----------
<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. 1999 Stock Option Plan
*5.1 Opinion of Vinson & Elkins L.L.P.
*23.1 Consent of Ernst & Young L.L.P.
*23.2 Consent of Vinson & Elkins L.L.P. (included in the opinion filed as Exhibit 5.1 hereto)
*24.1 Powers of Attorney (included in the signature pages hereto)
</TABLE>
----------
*Filed herewith
-3-
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of 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; and
(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 (1)(i) and (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
Company pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or 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 Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denison, State of Texas, on the
16th day of May, 2000.
HORIZON PHARMACIES, INC.
By: /s/ Ricky D. McCord
-------------------------------------
Ricky D. McCord
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below authorizes and appoints Ricky D. McCord, as his or her attorney-in-fact
to execute in the name of such person and to file any amendments to this
Registration Statement necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933 and any rules, regulations and
requirements of the registration of the securities which are the subject of
this Registration Statement, which amendments may make such changes in the
Registration Statement as such attorney-in-fact may deem appropriate.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Ricky D. McCord
- ------------------------------- Chairman of the Board, President and May 16, 2000
Ricky D. McCord Chief Operating Officer (Principal
Executive Officer)
/s/ John N. Stogner
- ------------------------------- Director, Chief Financial Officer and May 16, 2000
John N. Stogner Treasurer (Principal Financial and
Accounting Officer)
/s/ Charlie K. Herr
- ------------------------------- Director, Senior Vice President and May 16, 2000
Charlie K. Herr Secretary
/s/ Michael F. Loy
- ------------------------------- Director May 16, 2000
Michael F. Loy
/s/ Philip H. Yeilding
- ------------------------------- Director May 16, 2000
Philip H. Yeilding
/s/ Herbert J. Fleming
- ------------------------------- Director May 16, 2000
Herbert J. Fleming
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<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. 1999 Stock Option Plan
*5.1 Opinion of Vinson & Elkins L.L.P.
*23.1 Consent of Ernst & Young L.L.P.
*23.2 Consent of Vinson & Elkins L.L.P. (included in the opinion filed as Exhibit 5.1 hereto)
*24.1 Powers of Attorney (included in the signature pages hereto)
</TABLE>
- ----------
*Filed herewith
<PAGE>
HORIZON PHARMACIES, INC.
1999 STOCK OPTION PLAN
1. PURPOSE. The purposes of the Plan are to enable the Company to
attract and retain the services of employees and 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:
(i) 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;
(ii) 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;
(iii) the Company's stockholders 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 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
(iv) 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.
<PAGE>
"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., a Delaware corporation.
"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 qualified 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.
"PARTICIPANT" means any employee or 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. 1999 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.
2
<PAGE>
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 stockholders for their approval at the next annual meeting of
stockholders, or prior thereto at a special meeting of stockholders expressly
called for such purpose, or by a unanimous consent of all stockholders
executed in writing; and provided further, that the approval of the Company's
stockholders 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 stockholders, then
the Plan and all Options then outstanding 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.
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 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
3
<PAGE>
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 voting power of all classes of stock of the Company, or its parent
or any Subsidiary, or who is not an employee or director 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 Six Hundred
Thousand (600,000) 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.
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.
4
<PAGE>
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 specifics 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.
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
5
<PAGE>
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.
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 became 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 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).
6
<PAGE>
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 STOCKHOLDER. 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.
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,
7
<PAGE>
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.
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, an
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.
8
<PAGE>
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 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
stockholder 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 Delaware.
C. All expenses of the Plan, including the cost of maintaining
records, shall be borne by the Company.
Approved by the Board of Directors March 24, 1999; Adopted by the
Stockholders June 28, 1999.
9
<PAGE>
EXHIBIT 5.1
[VINSON & ELKINS L.L.P. LETTERHEAD]
May 16, 2000
HORIZON Pharmacies, Inc.
531 West Main, Suite 100
Denison, Texas 75020
Ladies and Gentlemen:
We have acted as counsel for HORIZON Pharmacies, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933 (the "Securities Act") of 600,000 shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), of
the Company pursuant to the Company's Registration Statement on Form S-8 (the
"Registration Statement") filed with the Securities and Exchange Commission
(the "Commission") on May 17, 2000.
In reaching the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of such documents and records of the Company and such statutes,
regulations and other instruments as we have deemed necessary or advisable
for purposes of this opinion, including (i) the Registration Statement, (ii)
the Certificate of Incorporation of the Company, as filed with the Secretary
of State of the State of Delaware, (iii) the Bylaws of the Company and (iv)
certain minutes of meetings of, and resolutions adopted by, the Board of
Directors of the Company.
We have assumed that (i) all information contained in all documents
reviewed by us is true, correct and complete, (ii) all signatures on all
documents reviewed by us are genuine, (iii) all documents submitted to us as
originals are true and complete, (iv) all documents submitted to us as copies
are true and complete copies of the originals thereof, and (v) all persons
executing and delivering originals or copies of documents examined by us were
competent to execute and deliver such documents. In addition, we have
assumed that (i) the Shares will be issued in accordance with the terms of
the HORIZON Pharmacies, Inc. 1999 Stock Option Plan (the "Plan"), (ii) the
full consideration for each Share shall be received by the Company and in no
event will be less than the par value for each Share, and (iii) certificates
evidencing the Shares will be properly executed and delivered by the Company
in accordance with the Delaware General Corporation Law (the "DGCL").
<PAGE>
HORIZON Pharmacies, Inc.
May __, 2000
Page 2
Based on the foregoing and having due regard for the legal
considerations we deem relevant, we are of the opinion that the Shares, when
issued by the Company pursuant to the terms and conditions of the Plan, will
be legally issued by the Company, fully paid and non-assessable.
This opinion is limited in all respects to the laws of the State of
Texas, the DGCL and the federal laws of the United States of America. You
should be aware that we are not admitted to the practice of law in the State
of Delaware.
This opinion letter may be filed as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of
the Securities Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/ VINSON & ELKINS L.L.P.
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to the HORIZON Pharmacies, Inc. 1999 Stock Option Plan
of our report dated March 31, 2000, except for the third paragraph of Note 7
(A) as to which the date is April 14, 2000, with respect to the consolidated
financial statements and schedule of HORIZON Pharmacies, Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 1999, filed with
the Securities and Exchange Commission.
/S/ ERNST & YOUNG LLP
Oklahoma City, Oklahoma
May 12, 2000
