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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 21, 1998
REGISTRATION NO. 333-
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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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INSPIRE INSURANCE SOLUTIONS, INC.
(Exact name of Registrant as specified in its charter)
TEXAS 75-2595937
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
300 BURNETT STREET
FORT WORTH, TEXAS 76102-2799
(Address of Principal (Zip Code)
Executive Offices)
INSPIRE INSURANCE SOLUTIONS, INC.
SECOND AMENDED AND RESTATED 1997 STOCK OPTION PLAN
1997 DIRECTOR STOCK OPTION PLAN
(Full titles of the plans)
F. GEORGE DUNHAM, III
CHIEF EXECUTIVE OFFICER
300 BURNETT STREET
FORT WORTH, TEXAS 76102-2799
(Name and address of agent for service)
(817) 332-7761
(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED (1) PER SHARE (2) PRICE (2) FEE (3)
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<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 750,000 $32.625 $24,468,750 $7,218.28
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Series A Junior Preferred Stock
Purchase Rights 750,000 -- -- --
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</TABLE>
(1) Pursuant to Rule 416, this registration statement also includes an
indeterminable number of additional shares that may become issuable
pursuant to the antidilution adjustment provisions of the Plans.
(2) Pursuant to Rule 457(c) and (h), and solely for the purpose of calculating
the applicable registration fee, the proposed maximum offering price per
share for the remaining Common Stock to be registered hereunder has been
estimated at $32.625, which amount represents the average of the high and
low sales prices of the Common Stock of INSpire Insurance Solutions, Inc.
on May 14, 1998, as reported by the Nasdaq National Market.
(3) One Preferred Stock Purchase Right will be issued with each share of
Common Stock. As no additional consideration will be received for the
Preferred Stock Purchase Rights, no registration fee is required with
respect to them under Rule 457(i).
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
AMENDMENT TO THE PLAN
Effective February 16, 1998, the Board of Directors of the Company
approved, subject to shareholder approval, an amendment (the "Amendment") to the
Company's Amended and Restated 1997 Stock Option Plan that increased from
2,250,000 to 3,000,000 the aggregate number of shares of the Company's Common
Stock, par value $0.01 per share, authorized for issuance under the Plan. The
Second Amended and Restated 1997 Stock Option Plan which incorporates the
Amendment was approved and ratified by the shareholders of the Company on April
21, 1998.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") are incorporated by reference in this
Registration Statement:
(1) The Company's registration statement on Form S-8 (Registration No.
33-36271) filed with the Commission on September 24, 1997.
(2) The Company's latest annual report on Form 10-K (Registration No.
000-23005) filed with the Commission on March 27, 1998, which contains
audited financial statements for the fiscal year ended December 31, 1997.
(3) The description of the Company's Common Stock contained in the
Company's registration statement on Form S-1 (Registration No. 333-47413)
filed with the Commission on March 6, 1998, and Registration Statement on
Form S-1 (Registration No. 333-48747) filed with the Commission on March
27, 1998 pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Securities Act") and the Company's latest prospectus
(Registration No. 333-48747) dated March 27, 1998, filed with the
Commission pursuant to Rule 424(b) under the Securities Act.
In addition, all documents filed subsequent to December 31, 1997 by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date 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 modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock offered by this
Registration Statement will be passed upon for the Company by Akin, Gump,
Strauss, Hauer & Feld, L.L.P.
ITEM 8. EXHIBITS.
See Index to Exhibits, attached hereto.
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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
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 Fort Worth, State of Texas on May 21, 1998.
INSPIRE INSURANCE SOLUTIONS, INC.
By: /s/ F. GEORGE DUNHAM, III
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F. George Dunham, III
Chief Executive Officer,
Chairman and Director
The undersigned directors and officers of INSpire Insurance Solutions, Inc.
hereby constitute and appoint F. George Dunham, III and Terry G. Gaines, and
each of them, with full power to act without the other and with full power of
substitution and resubstitution, our true and lawful attorneys-in-fact with full
power to execute in our name and behalf in the capacities indicated below any
and all amendments (including post-effective amendments and amendments thereto)
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 and hereby ratify and confirm all that such attorneys-in-fact, or
either of them, or their substitutes shall 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 indicated on May 21, 1998.
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Signature Title
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<S> <C>
/s/ F. GEORGE DUNHAM, III
- ---------------------------------------- Chief Executive Officer (principal
F. George Dunham, III executive officer), Chairman and Director
/s/ WILLIAM J. SMITH, III
- ---------------------------------------- President, Chief Operating Officer and
William J. Smith, III Director
/s/ TERRY G. GAINES
- ---------------------------------------- Executive Vice President and Chief Financial
Terry G. Gaines Officer (Principal Financial and Accounting
Officer)
/s/ MITCH S. WYNNE
- ---------------------------------------- Director
Mitch S. Wynne
</TABLE>
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INDEX TO EXHIBITS
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Exhibit Sequentially
Number Description of Exhibits Numbered Page
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<S> <C> <C>
4.1* Second Amended and Restated 1997 Stock Option Plan of the
Company.
4.2 First Amendment to the 1997 Director Stock Option Plan of
the Company, incorporated herein by reference to Appendix
III to the Company's Proxy Statement (Registration No.
000-23005) filed with the Commission on March 27, 1998.
5.1* Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in its opinion filed as Exhibit 5.1 hereto).
24.1* Power of Attorney (included on the signature page hereto).
</TABLE>
* Filed herewith
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EXHIBIT 4.1
INSPIRE INSURANCE SOLUTIONS, INC.
SECOND AMENDED AND RESTATED 1997 STOCK OPTION PLAN
ARTICLE I.
PURPOSES
1.1 Purpose of Plan. The purposes of the INSpire Insurance Solutions,
Inc. Second Amended and Restated 1997 Stock Option Plan (the "Plan") are to
advance the interests of INSpire Insurance Solutions, Inc. (the "Company") and
its shareholders by providing significant incentives to selected officers,
directors and employees of the Company and its Subsidiaries (as defined herein)
and to enhance the interest of such officers, directors and employees in the
Company's success and progress by providing them with an opportunity to become
shareholders of the Company. Further, the Plan is designed to enhance the
Company's ability to attract and retain qualified management and other personnel
necessary for the success and progress of the Company. The Plan amends and
restates the Amended and Restated 1997 Stock Option Plan adopted by the Company
effective July 30, 1997 in order to (i) incorporate prior amendments to Section
5.4(a) to permit the Board or the Committee to include in any Stock Option
Agreement issued under the Plan initially or by amendment, additional
alternative methods of exercising options granted under the Plan; (ii)
incorporate prior amendments to Section 5.5(a) and Section 2.1(h) to clarify
certain provisions in the definitions of Change of Control and Fair Market
Value; (iii) revise Section 3.2 to increase the maximum aggregate number of
shares which may be optioned and sold under the Plan from 2,250,000 to 3,000,000
shares of Common Stock; and (iv) revise Section 7.1 to clarify by whom the Plan
shall be administered.
ARTICLE II.
DEFINITIONS
2.1 Definitions. Certain terms used herein shall have the meaning below
stated, subject to the provisions of Section 8.1 hereof.
(a) "Board" or "Board of Directors" means the Board of
Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" means the committee of directors appointed by
the Board to administer the Plan pursuant to Article VII hereof.
(d) "Common Stock" means the authorized common stock of the
Company, par value $.01 per share, as constituted on the date the Plan
becomes effective.
(e) "Company" means INSpire Insurance Solutions, Inc., a Texas
corporation.
(f) "Director" means a member of the Board of Directors of the
Company or a Subsidiary who is not an Employee.
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(g) "Employee" means an officer or other employee of the
Company or a Subsidiary, including a member of the Board who is also
such an employee.
(h) "Fair Market Value" on any date for which fair market
value is to be determined hereunder means the reported closing price on
the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading, or, if the shares of
Common Stock are not listed or admitted to trading on any national
securities exchange, on the National Association of Securities Dealers
Automated Quotation National Market (the "NASDAQ National Market"), or,
if the shares of Common Stock are not quoted on the NASDAQ National
Market, the average of the highest reported bid and the lowest reported
asked prices as furnished by the National Association of Securities
Dealers, Inc. (the "NASD") through NASDAQ, or, if not so reported
through NASDAQ as reported through the National Quotation Bureau,
Incorporated ("NQBI") or a similar organization if NASDAQ or NQBI is no
longer reporting such information. For options approved at such times
as the Common Stock is not reported or quoted by any such organization
(including options approved prior to the initial public stock offering
of the Company), the fair market value of the shares of Common Stock
shall be the fair market value thereof determined in good faith by the
Committee. In addition to the above rules, Fair Market Value shall be
determined without regard to any restriction other than a restriction
which, by its terms, will never lapse.
(i) "Incentive Option" means an Option intended to qualify as
an incentive option under Section 422 of the Code.
(j) "Nonqualified Option" means an Option that does not
qualify as an Incentive Option.
(k) "Option" means an option to purchase Common Stock granted
by the Company to an Employee or a Director pursuant to Section 5.1
hereof.
(l) "Option Agreement" means an agreement between the Company
and an Optionee evidencing the terms of an Option granted under the
Plan.
(m) "Optionee" means an Employee or a Director to whom an
Option has been granted under the Plan.
(n) "Plan" means the INSpire Insurance Solutions, Inc. Second
Amended and Restated 1997 Stock Option Plan, as set forth herein and as
from time to time amended.
(o) "Subsidiary" means a subsidiary of the Company within the
meaning of Section 424(f) of the Code.
ARTICLE III.
SHAREHOLDER APPROVAL; RESERVATION OF SHARES
3.1 Shareholder Approval. The Plan shall become effective only if,
within 12 months from the date the Plan is adopted by the Board, the Plan is
approved by the affirmative vote of the holders of a majority of the shares of
Common Stock of the Company, or by the unanimous
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written consent of such holders, in accordance with the applicable provisions of
the Articles of Incorporation and Bylaws of the Company and applicable state
law.
3.2 Shares Reserved Under Plan. The aggregate number of shares of
Common Stock which may be issued upon the exercise of Options granted under the
Plan shall not exceed 3,000,000 shares, all or any part of which may be issued
pursuant to Options; provided, however, that the maximum number of shares of
Common Stock which may be issued to an Optionee under the Plan during the term
of the Plan shall not exceed 1,200,000 (as may be adjusted pursuant to Section
9.4 of the Plan). Shares of Common Stock issued upon the exercise of Options
granted under the Plan may consist of either authorized but unissued shares or
shares which have been issued and which shall have been heretofore or shall be
hereafter reacquired by the Company. The total number of shares authorized under
the Plan shall be subject to increase or decrease in order to give effect to the
provisions of Section 9.4 hereof and to give effect to any amendment adopted
pursuant to Article VIII. If any Option granted under the Plan shall expire,
terminate or be cancelled for any reason without having been exercised in full,
the number of shares as to which such Option was not exercised shall again be
available for purposes of the Plan. The Company shall at all times while the
Plan is in effect reserve such number of shares of Common Stock as will be
sufficient to satisfy the requirements of the Plan.
ARTICLE IV.
PARTICIPATION IN PLAN
4.1 Eligibility. Options under the Plan may be granted to any Director
or Employee of the Company or a Subsidiary. The Committee shall determine those
Directors or Employees to whom Options shall be granted, and, subject to Section
3.2 hereof, the number of shares of Common Stock subject to each such Option.
Incentive Options or Nonqualified Options may be granted to an Employee. Only
Nonqualified Options may be granted to a nonemployee Director.
4.2 Participation Not Guarantee of Employment or Retention. Nothing in
this Plan or in any Option Agreement shall in any manner be construed (i) to
limit in any way the right of the Company or any Subsidiary to terminate an
Employee's employment at any time, without regard to the effect of such
termination on any rights such Employee would otherwise have under this Plan, or
give any right to an Employee to remain employed or retained by the Company or a
Subsidiary thereof in any particular position or at any particular rate of
compensation or (ii) limit in any way the right of the shareholders of the
Company or a Subsidiary or the Board to remove any Director or fail to nominate
any Director for re-election without regard to the effect of such removal or
non-election of a Director on any rights such Director would have under this
Plan, or give any right to a Director to continue to serve as a Director of the
Company or a Subsidiary.
ARTICLE V.
GRANT AND EXERCISE OF OPTIONS
5.1 Grant of Options. The Committee may from time to time in its
discretion grant Options to Employees or Directors. All Options under the Plan
shall be granted within ten years from the date the Plan is adopted by the Board
or the date the Plan is approved by holders of the Common Stock of the Company,
whichever is earlier.
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5.2 Option Agreements. Each Option granted under the Plan shall be
evidenced by an Option Agreement between the Company and the Optionee in such
form as the Committee shall approve and containing such provisions and
conditions not inconsistent with the provisions of the Plan, including the term
during which the Option may be exercised and whether in installments or
otherwise, as the Committee shall determine. Each Option Agreement issued under
the Plan shall contain an agreement of the Optionee with respect to
nondisclosure of information, noncompete provisions and nonsolicitation of
customers and employees as shall be required by the Board from each Optionee as
additional consideration for the issuance of Options under the Plan.
5.3 Option Terms. Options granted under the Plan shall be subject to
the following requirements:
(a) Option Price. The exercise price of each Incentive Option
granted under the Plan shall not be less than the higher of the par
value or 100% of the Fair Market Value of the shares of Common Stock
subject to the Option on the date the Option is granted. The exercise
price of any Nonqualified Options granted under the Plan shall be
determined by the Committee. The exercise price of an Option may be
subject to adjustment pursuant to Section 9.4 hereof.
(b) Term of Option. The term during which an Option is
exercisable shall be that period determined by the Committee as set
forth in the applicable Option Agreement, provided that no Option shall
have a term that exceeds a period of ten years from the date of its
grant.
(c) Nontransferability of Incentive Options. No Incentive
Option granted under the Plan shall be transferable by the Optionee
otherwise than by will or the laws of descent and distribution, and
each such Incentive Option shall be exercisable during the Optionee's
lifetime only by him or her. No transfer of an Incentive Option by an
Optionee by will or by the laws of descent and distribution shall be
effective to bind the Company unless the Company shall have been
furnished with written notice thereof and a copy of the will and/or
such other evidence as the Committee may determine necessary to
establish the validity of the transfer.
(d) Assignability of Nonqualified Options. Nonqualified
Options granted hereunder may be transferred by the Optionee thereof to
one or more permitted transferees; provided that (i) there may be no
consideration for such transfer, (ii) the Optionee (or such Optionee's
estate or representative) shall remain obligated to satisfy all
employment tax and other withholding tax obligations associated with
the exercise of the Options, (iii) the Optionee shall notify the
Company in writing that such transfer has occurred, the identity and
address of the permitted transferee and the relationship of the
permitted transferee to the Optionee and (iv) such transfer shall be
effected pursuant to transfer documents approved from time to time by
the Committee. To the extent a Nonqualified Option transferred pursuant
to this Section 5.3(d) is not fully exercisable as of the date of
transfer thereof, the Optionee shall specify in the transfer document
whether and to what extent the transferred Options (if less than all of
the Options subject to the applicable Nonqualified Stock Option
Agreement) are exercisable, subject to the
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limitations on exercisability contained in the applicable Nonqualified
Stock Option Agreement. Furthermore, to the extent the Optionee
transfers Options that are not exercisable as of the date of transfer
and such Options are less than all of the Options subject to the
applicable Nonqualified Stock Option Agreement, the Optionee shall
specify in the transfer documents, subject to the limitations on
exercisability contained in the applicable Nonqualified Stock Option
Agreement, when the transferred Options become exercisable as Options
under the applicable Nonqualified Stock Option Agreement subsequent to
such transfer. No permitted transferee may further assign or transfer
the transferred Option otherwise than by will or the laws of descent
and distribution. Following any permitted transfer, any such Options
shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer; provided that for purposes of
Sections 5.4(a), 5.4(b), 5.5, 5.6, Article VII, and Article IX hereof
the term "Optionee" shall be deemed to refer also to each permitted
transferee. The events of termination of relationship in Article VI
hereof shall continue to be applied with respect to the original
Optionee, following which the Options shall be exercisable by the
transferee only to the extent, and for the periods specified in Article
VI and the shares issued upon exercise of Options shall be subject to
repurchase pursuant to Section 9.3. The term "permitted transferees"
shall mean one or more of the following: (i) any member of the
optionee's immediate family; (ii) a trust established for the exclusive
benefit of one or more members of such immediate family; or (iii) a
partnership in which such immediate family members are the only
partners. The term "immediate family" is defined for such purpose as
spouses, children, stepchildren and grandchildren, including
relationships arising from adoption.
(e) Time and Amount Exercisable. Each Option shall be
exercisable in accordance with the provisions of the Option Agreement
pursuant to which it is granted in whole, or from time to time in part,
subject to any limitations with respect to the number of shares for
which the Option may be exercised at a particular time and to such
other conditions as the Committee in its discretion may specify in the
Option Agreement. Any portion of an Option which has become exercisable
shall remain exercisable until it is exercised in full or it terminates
or expires pursuant to the terms of the Plan or the applicable Option
Agreement.
(f) Options Granted to Ten Percent Stockholders. No Incentive
Option shall be granted to any Employee who owns, directly or
indirectly within the meaning of Section 424(d) of the Code, stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary, unless at the time
the Option is granted, the exercise price of the Option is at least
110% of the Fair Market Value of the Common Stock subject to such
Option and such Option, by its terms, is not exercisable after the
expiration of five years from the date such Option is granted. The
provisions of this Section 5.3(e) shall not apply to the grant of
Nonqualified Options.
5.4 Payment of Exercise Price and Delivery of Shares.
(a) Manner of Exercise. Shares of Common Stock purchased upon
exercise of Options shall at the time of purchase be paid for in full.
The Company shall satisfy its employment tax and other tax withholding
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obligations by requiring the Optionee (or such Optionee's estate or
representative) to pay the amount of employment tax and withholding
tax, if any, that must be paid under federal, state and local law due
to the exercise of the Option. To the extent that the right to purchase
shares has accrued hereunder, Options may be exercised from time to
time by written notice to the Company stating the full number of shares
with respect to which the Option is being exercised and the time of
delivery thereof, which shall be at least fifteen days after the giving
of such notice unless an earlier date shall have been mutually agreed
upon by the Optionee (or other person entitled to exercise the Option)
and the Company, accompanied by payment to the Company of the purchase
price in full and the amount of employment tax and withholding tax due,
if any, upon the exercise of the Option. Such payment shall be effected
(i) by certified or official bank check, (ii) if so permitted by the
Company, by the delivery of a number of shares of Common Stock (plus
cash if necessary) having a fair market value equal to the amount of
such purchase price and employment or withholding tax or (iii) by
delivery of the equivalent thereof acceptable to the Company. The
Company will, as soon as reasonably possible notify the Optionee (or
such Optionee's representative) of the amount of employment tax and
other withholding tax that must be paid under federal, state and local
law due to the exercise of the Option. At the time of delivery, the
Company shall, without transfer or issue tax to the Optionee (or other
person entitled to exercise the Option), deliver to the Optionee (or to
such other person) at the principal office of the Company, or such
other place as shall be mutually agreed upon, a certificate or
certificates for the shares of Common Stock, provided, however, that
the time of delivery may be postponed by the Company for such period as
may be required for it with reasonable diligence to comply with any
requirements of law. The foregoing notwithstanding, the Committee may
permit in an Option Agreement, at the time of the grant of an Option or
by later amendment to an Option Agreement, an alternative exercise of
an Option by a "cashless exercise" with a broker or by the surrender of
the Option, if the Committee so permits, in exchange for an amount,
payable in cash or shares of Common Stock (except for fractional shares
which shall be paid in cash) valued at Fair Market Value as of the date
of such surrender, that is equal to the difference between (i) the
aggregate Fair Market Value of the shares subject to the portion of the
Option being exercised, minus (ii) the total exercise price for the
portion of the Option being exercised. In the applicable Option
Agreement the Committee may require an Optionee to accept either cash
or shares in settlement of any Option so surrendered or may permit the
Optionee to request, subject to Committee approval, cash or shares to
be received in settlement. Withholding upon such an alternative
exercise shall be effected by any lawful means approved by the
Committee and agreed to with Optionee.
(b) Rights of Optionee in Stock. Neither any Optionee, any
permitted transferee nor the legal representatives, heirs, legatees or
distributees of any Optionee or permitted transferee shall be deemed to
be the holder of, or to have any of the rights of a holder with respect
to, any shares of Common Stock issuable upon exercise of an Option
granted hereunder unless and until such shares are issued to him or her
or them and such person or persons have received a certificate or
certificates therefor. Upon the issuance and receipt of such
certificate or certificates, such Optionee or the legal
representatives, heirs, legatees or distributees of such Optionee shall
have absolute ownership of the
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shares of Common Stock evidenced thereby, including the right to vote
such shares, to the same extent as any other owner of shares of Common
Stock, and to receive dividends thereon, subject, however, to the
terms, conditions and restrictions of the Plan.
5.5 Change of Control.
(a) A "Change of Control" for purposes of this Plan shall
mean: (i) the acquisition, by a single entity (or group of affiliated
entities) that is not directly or indirectly controlled by the existing
shareholders, of more than 50% of the Common Stock issued and
outstanding immediately prior to such acquisition; or (ii) the
dissolution or liquidation of the Company or the consummation of any
merger or consolidation of the Company or any sale or other disposition
of all or substantially all of its assets, if the shareholders of the
Company immediately before such transaction own directly or indirectly,
immediately after consummation of such transaction, equity securities
(other than options and other rights to acquire equity securities)
possessing less than 50% of the voting power of the surviving or
acquiring corporation. All adjustments under this Section shall be made
by the Committee, whose determination as to what adjustments shall be
made and the extent thereof shall be final, binding and conclusive for
all purposes of the Plan and of each Option Agreement.
(b) Change of Control with Provision Being Made Therefor. If
in connection with a Change of Control a written provision is made for
the assumption and continuance of any Option granted under the Plan, or
the substitution for such option of a new Option covering the shares of
the successor employer corporation, with appropriate adjustment as to
the number and kind of shares and prices, the option granted under the
Plan, or the new Option substituted therefor, as the case may be, shall
continue in the manner and under the terms provided.
(c) Change of Control Without Provision Being Made Therefor.
If no written provision is made in connection with a Change of Control
for the continuance and assumption of any Option granted under the Plan
or for the substitution of any Option covering the shares of the
successor employer corporation, then, the holder of any such Option
shall be entitled, prior to the effective date of any such Change of
Control, to purchase the full number of shares not previously exercised
under such Option, without regard to the periods and installments of
exercisability made pursuant to Section 5.3 if (and only if) such
Option has not at that time expired or been terminated, failing which
purchase, any unexercised portion shall be deemed cancelled as of the
effective date of such Change of Control.
5.6 Dissolution or Liquidation of the Company. In the event of the
proposed dissolution or liquidation of the Company, the Options granted
hereunder shall terminate as of a date to be fixed by the Committee, provided
that not less than 15 days' prior written notice of the date so fixed shall be
given to the Optionee, and the Optionee shall have the right, during the 15-day
period preceding such termination, to exercise his or her Option.
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ARTICLE VI.
TERMINATION OF EMPLOYMENT OR DIRECTORSHIP
6.1 Termination of Employment for Cause. In the event that an Optionee
is an Employee and such Optionee's employment by the Company or a Subsidiary
shall terminate for Cause (as hereinafter defined), the Options granted to the
Optionee pursuant to this Plan shall terminate immediately upon termination of
employment. For the purposes of this Plan, the term "Cause" shall mean "Cause"
as defined in any written employment agreement in effect between the applicable
Optionee and the Company or a Subsidiary, or if such Optionee is not a party to
a written employment agreement in which Cause is defined, then Cause shall mean
(i) the failure by such Optionee to substantially perform his or her duties with
the Company or a Subsidiary in a manner reasonably deemed satisfactory by the
Board of Directors, (ii) the abuse of illegal drugs or other controlled
substances or the intoxication of Optionee during working hours, (iii) the
arrest for, or conviction of, a felony, (iv) the unexcused absence by such
Optionee from Optionee's regular job location for more than five consecutive
days or for more than the aggregate number of days permitted to Optionee under
Company vacation and sick leave policies applicable to Optionee or (v) any
conduct or activity of such Optionee deemed injurious to the Company in the
reasonable discretion of the Board of Directors.
6.2 Termination of Directorship. In the event that an Optionee is a
Director and such Optionee fails to be reelected as a Director, resigns as a
Director or is removed as a Director (other than due to Optionee's disability as
defined in Section 6.3 hereof), the Options granted to such Optionee pursuant to
this Plan shall terminate on the date such Optionee ceases to be a Director.
6.3 Death or Disability.
(a) In the event that an Optionee shall die while employed by,
or serving as a Director of, the Company or a Subsidiary or if
Optionee's employment by, or service as a Director of, the Company or a
Subsidiary is terminated because Optionee has become disabled,
Optionee, his or her estate, or beneficiary shall have the right to
exercise his or her Option at any time within 60 days from the date of
death of Optionee or termination of Optionee's employment by, or
service as a Director of, the Company or a Subsidiary due to
disability, as the case may be, only to the extent the Optionee was
entitled to exercise his or her Option immediately prior to such
occurrence. To the extent that the Option is not so exercised, it shall
expire at the end of such 60 day period. For purposes of this Plan,
disability shall be as defined in any written employment agreement in
effect between the applicable Optionee and the Company or a Subsidiary,
or if such Optionee is not a party to a written employment agreement in
which disability is defined, an Optionee shall be considered disabled
if he or she is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that
can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than 6 months.
(b) If an Optionee dies during the 60-day period after the
termination of his or her position as an Employee or Director of the
Company or a Subsidiary and at the time of his or her death the
Optionee was entitled to exercise an Option theretofore granted to
8
<PAGE> 9
him or her, the Option shall, unless the applicable Option Agreement
provides otherwise, expire 60 days after the date on which his or her
position as an Employee or Director of the Company or a Subsidiary
terminated, but in no event, later than the date on which the Option
would have expired if the Optionee had lived. Until the expiration of
such 60-day period, the Option may be exercised by the Optionee's
executor or administrator or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or
inheritance, but only to the extent that the Optionee was entitled to
exercise the Option at the date of his or her death and, to the extent
the Option is not so exercised, it shall expire at the end of such
60-day period.
6.4 Other Terminations. In the event that termination of employment
with the Company occurs other than for Cause or for death or disability pursuant
to Sections 6.1 or 6.3 above, or in the event that the directorship of an
Optionee who is a Director is terminated for reasons other than the removal,
resignation, death or disability of such Director, the applicable Optionee shall
have the right to exercise his or her Option at any time within 60 days after
such termination to the extent he or she was entitled to exercise the same
immediately prior to such termination. To the extent that the Option is not so
exercised, it shall expire at the end of such 60 day period.
6.5 Subject to Repurchase. All shares of Common Stock purchased by an
Optionee or his or her estate or beneficiary shall be subject to repurchase by
the Company pursuant to Section 9.3 of this Plan.
6.6 Alternative Provisions. The provisions of this Article VI shall
apply to all Options granted under the Plan except to the extent expressly
provided otherwise in any Option Agreement.
ARTICLE VII.
ADMINISTRATION OF PLAN
7.1 Administration. The Plan shall be administered by the Board of
Directors or a Committee of the Board of Directors consisting of not less than
three directors who qualify as Non-Employee Directors (as defined in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended) and "outside
directors" for purposes of Section 162(m) of the Code as may be appointed by the
Board of the Company, all of whom are members of the Board. Any such committee
appointed by the Board, or the Board itself during such periods as no such
properly constituted and appointed committee exists, is herein referred to as
the "Committee." A majority of the Committee shall constitute a quorum thereof
and the actions of a majority of the Committee approved at a meeting at which a
quorum is present, or actions unanimously approved in writing by all members of
the Committee, shall be the actions of the Committee. Vacancies occurring on the
Committee shall be filled by the Board. The Committee shall have full and final
authority (i) to interpret the Plan and each of the Option Agreements, (ii) to
prescribe, amend and rescind rules and regulations, if any, relating to the
Plan, (iii) to make all determinations necessary or advisable for the
administration of the Plan and (iv) to correct any defect, supply any omission
and reconcile any inconsistency in the Plan and any Option Agreement. The
determination by the Committee in all matters referred to herein shall be
conclusive and binding for all purposes and upon all persons, including, without
limitation, the
9
<PAGE> 10
Company, the shareholders of the Company, the Committee, and each of the members
thereof and the Optionees and their respective successors in interest.
7.2 Liability. No member of the Board or any Committee shall be liable
for anything done or omitted to be done by him or her or by any other member of
the Board or any Committee in connection with the Plan, except for his or her
own willful misconduct or gross negligence (unless the Company's Articles of
Incorporation or Bylaws, or any indemnification agreement between the Company
and such person, in each case in accordance with applicable law, provides
otherwise). The Board and any Committee shall have power to engage outside
consultants, auditors or other professional help to assist in the fulfillment of
the duties or the Board or any Committee under the Plan at the Company's
expense.
7.3 Determinations. In making its determinations concerning the
Optionees who shall receive Options as well as the number of shares to be
covered thereby and the time or times at which they shall be granted, the
Committee shall take into account the nature of the services rendered by the
respective Optionees, their past, present and potential contribution to the
Company's success and such other factors as the Committee may deem relevant. The
Committee shall determine the form of Option Agreements under the Plan and the
terms and conditions to be included therein, provided such terms and conditions
are not inconsistent with the terms of the Plan, the Company's Articles of
Incorporation or Bylaws. The Committee may waive any provisions of any Option
Agreement, provided such waiver is not inconsistent with the terms of the Plan,
the Company's Articles of Incorporation or Bylaws. The determinations of the
Committee under the Plan need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, Options under the Plan,
whether or not such persons are similarly situated.
ARTICLE VIII.
AMENDMENT AND TERMINATION OF PLAN
8.1 Amendment of Plan. The Plan may be amended at any time and from
time to time by the Board, but no amendment which (i) increases the aggregate
number of shares of Common Stock which may be issued pursuant to Options granted
under the Plan, (ii) decreases the minimum Option exercise price provided in the
Plan, (iii) extends the period during which Options may be granted pursuant to
the Plan, (iv) changes the class of individuals eligible to be granted Options,
or (v) has the effect of any of the above shall be effective unless and until
the same is approved by the affirmative vote of the holders of a majority of the
shares of Common Stock of the Company, or the unanimous written consent of such
holders, in accordance with the applicable provisions of the Articles of
Incorporation and Bylaws of the Company and applicable state law. No amendment
to the Plan shall, without the consent of an Optionee, affect such Optionee's
rights under an Option previously granted.
8.2 Termination. The Board may, at any time, terminate the Plan as of
any date specified in a resolution adopted by the Board. If not earlier
terminated, the Plan shall terminate on February 28, 2007. No Options may be
granted after the Plan has terminated but the Committee shall continue to
supervise the administration of Options previously granted.
8.3 Tax Status of Options. To the extent applicable, the Plan is
intended to permit the issuance of Options to Employees in accordance with the
provisions of Section 422 of the Code.
10
<PAGE> 11
Subject to the provision of Section 8.1 of the Plan, the Plan and Option
Agreements may be modified or amended at any time, both prospectively and
retroactively, and in a manner that may affect Options previously granted, if
such amendment or modification is necessary for the Plan and Options granted
hereunder to qualify under said provision of the Code. All Options granted under
the Plan to Employees shall be intended to qualify as incentive stock options
under Section 422 of the Code to the extent that any portion of the Options
granted meet the requirements of Section 422 of the Code. To the extent that any
portion of the Options granted under the Plan do not meet the requirements of
Section 422 of the Code, such Options shall be deemed to be Nonqualified
Options. Nothing in the Plan shall be deemed to prohibit the issuance of
Nonqualified Options to Employees under the Plan. Any Options issued to
Directors shall be Nonqualified Options.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
9.1 Restrictions Upon Grant of Options. If the listing upon any stock
exchange or the registration or qualification under any federal or state law of
any shares of Common Stock to be issued on the exercise of Options granted under
the Plan (whether to permit the grant of Options the issuance of shares of
Common Stock to any permitted transferee or the resale or other disposition of
any such shares of Common Stock by or on behalf of the Optionees receiving such
shares) should be or become necessary or desirable, the Board in its sole
discretion may determine that delivery of the certificates for such shares of
Common Stock shall not be made until such listing, registration or qualification
shall have been completed. The Company agrees that it will use its reasonable
best efforts to effect any such listing, registration or qualification;
provided, however, that the Company shall not be required to use its reasonable
best efforts to effect such registration under the Securities Act of 1933 other
than on Form S-8 or such other forms as may be in effect from time to time
calling for information comparable to that presently required to be furnished
under Form S-8. In no event shall the Company be required to register shares of
Common Stock for issuance to a permitted transferee and any requested exercise
of Options by a permitted transferee shall be subject to any applicable prior
registration of the shares of Common Stock issuable upon such exercise.
9.2 Restrictions Upon Resale of Unregistered Stock. Each Optionee
shall, if the Company deems it advisable, represent and agree in writing (i)
that any shares of Common Stock acquired by such Optionee pursuant to this Plan
will not be sold except pursuant to an effective registration statement under
the Securities Act of 1933 or pursuant to an exemption from registration under
said Act, (ii) that such Optionee is acquiring such shares of Common Stock for
his or her own account and not with a view to the distribution thereof and (iii)
to such other customary matters as the Company may request. In such case, no
shares of Common Stock shall be issued to such Optionee unless such Optionee
provides such representations and agreements and the Company is reasonably
satisfied that such representations and agreements are correct.
9.3 Repurchase by the Company.
(a) The Company shall have the right, exercisable within 60
days after the later of (i) the date of Optionee's termination of
employment with the Company or a Subsidiary or termination of service
as a Director or (ii) the date of the exercise by any
11
<PAGE> 12
person other than Optionee of the Option pursuant to any provision of
this Plan, to purchase any shares of Common Stock (or securities into
which any Common Stock has been converted) that were acquired pursuant
to the exercise of an Option under this Plan ("Option Shares"). To the
extent that an Optionee holds exercisable Options at the time of
termination of employment or termination of service as a Director, the
Company may elect to purchase such exercisable Options in the same
manner as the Option Shares at a price equal to the Repurchase Price
(as hereinafter defined) less the exercise price of such exercisable
Options.
(b) The Repurchase Price for the purchase of the Option Shares
shall be determined as follows:
(i) if the Common Stock has been registered pursuant
to a registration statement filed under the Securities Act of
1933, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder (the "Act"),
then the Repurchase Price per share shall be equal to the
average closing price per share of the Common Stock for the 30
days preceding the date of termination of employment by the
Company or a Subsidiary as published in the Wall Street
Journal; or
(ii) if the Common Stock has not been registered
under the Act, then the price shall be the book value per
share of Common Stock as of the last day of the month during
which termination of employment with the Company or a
Subsidiary (or termination of service as a Director occurs) as
determined by the formula:
<TABLE>
<S> <C>
A-L
P = ---
S
P = the purchase price (book value) per
Option Share,
A = the total assets of the Company
and its Subsidiaries (determined
pursuant to generally accepted
accounting principles) shown on the
Company's balance sheet for the most
recent fiscal year ended,
L = the total liabilities of the
Company and its Subsidiaries
(determined pursuant to generally
accepted accounting principles)
shown on the Company's balance sheet
for the most recent fiscal year
ended,
S = the total number of shares of
capital stock of the Company
outstanding on a fully diluted basis
as shown on the Company's balance
sheet for the most recent fiscal
year ended and as adjusted for any
capital transactions, dividends, or
reclassification of stock subsequent
to such date.
</TABLE>
(c) To the extent that the Company has the right to purchase
Option Shares, the Company may exercise such right by delivery (upon or
within sixty days after the
12
<PAGE> 13
later of Optionee's termination of employment with the Company or a
Subsidiary (or termination of service as a Director) or exercise by a
person other than Optionee of the Option) of written notice to the
Optionee (or such other person exercising such Option) stating the full
number of Option Shares that the Company has elected to purchase, the
purchase price per Option Share, and the time of purchase (which time
shall not be earlier than 5 days from the date of notice). At the time
of purchase, the Optionee shall deliver the certificate or certificates
representing his Option Shares to the Company at its offices and shall
execute any stock powers or other instruments as may be necessary to
transfer full ownership of the Option Shares to the Company. At the
time of purchase, the Company shall issue its own check within 60 days
to the Optionee in an amount equal to the aggregate purchase price for
the Option Shares for which the Company has exercised its right to
purchase, less any amounts required to be withheld under applicable
laws. In the event of Optionee's death or disability, the Company's
right to purchase and the manner of purchase shall apply with regard to
the Optionee's estate, beneficiary, administrator or personal
representative.
9.4 Adjustments. The number of shares of Common Stock of the Company
authorized for issuance under the Plan, as well as the price to be paid and the
number of shares issued upon exercise of outstanding Options, shall be subject
to adjustment by the Committee, in its sole discretion, to reflect any stock
split, stock dividend, recapitalization, merger consolidation, reorganization,
combination or exchange of shares or other similar event.
9.5 Use of Proceeds. The proceeds from the sale of Common Stock
pursuant to Options granted under the Plan shall constitute general funds of the
Company and may be used for such corporate purposes as the Company may
determine.
9.6 Substitution of Options.
(a) The Committee may, with the consent of the holder of any
Option granted under the Plan, cancel such Option and grant a new
Option in substitution therefor, provided that the Option as so
substituted shall satisfy all of the requirements of the Plan as of the
date such new Option is granted.
(b) Options may be granted under the Plan in substitution for
options held by individuals who are employees or directors of another
corporation and who become Employees or Directors of the Company or any
Subsidiary of the Company eligible to receive Options pursuant to the
Plan as a result of a merger, consolidation, reorganization or similar
event. The terms and conditions of any Options so granted may vary from
those set forth in the Plan to the extent deemed appropriate by the
Committee in order to conform the provisions of Options granted
pursuant to the Plan to the provisions of the options in substitution
for which they are granted.
9.7 Restrictive Legends.
(a) Certificates representing shares of Common Stock delivered
pursuant to the exercise of Options shall bear an appropriate legend
referring to the terms, conditions and restrictions described in this
Plan. Any attempt to dispose of any such shares of Common Stock in
contravention of the terms, conditions and restrictions described in
the
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<PAGE> 14
Plan shall be ineffective, null and void, and the Company shall not
effect any such transfer on its books.
(b) Any shares of Common Stock of the Company received by an
Optionee (or his or her heirs, legatees, distributees or
representative) as a stock dividend on, or as a result of a stock
split, combination, exchange of shares, reorganization, merger,
consolidation or otherwise with respect to, shares of Common Stock
received pursuant to the exercise of Options, shall be subject to the
terms and conditions of the Plan and bear the same legend as the shares
received pursuant to the exercise of Options.
9.8 Notices. Any notice required or permitted hereunder shall be
sufficiently given only if sent by registered or certified mail, return receipt
requested, postage prepaid, addressed to the Company at its principal place of
business, and to the Optionee at the address on file with the Company at the
time of grant hereunder, or to such other address as either party may hereafter
designate in writing by notice similarly given by one party to the other.
9.9 Prior Option Agreements. Each Option Agreement entered into prior
to the effective date of this INSpire Insurance Solutions, Inc. Second Amended
and Restated 1997 Stock Option Plan is hereby amended to conform to the
provisions of the Plan.
9.10 Effective Dates. The Plan originally became effective on March 12,
1997 and was amended effective July 30, 1997. The second amendment and
restatement effected hereby is effective February 16, 1998, subject to any
required shareholder approval.
IN WITNESS WHEREOF, upon authorization of the Board of Directors and
the Shareholders of the Company, the undersigned has caused the INSpire
Insurance Solutions, Inc. Second Amended and Restated 1997 Stock Option Plan to
be executed effective as of the 16th day of February 1998.
--------------------------------------
F. George Dunham, III
President and Chief Executive Officer
14
<PAGE> 1
EXHIBIT 5.1
[AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. LETTERHEAD]
May 21, 1998
INSpire Insurance Solutions, Inc.
300 Burnett Street
Fort Worth, Texas 76102-7761
Dear Gentlemen:
We have acted as counsel to INSpire Insurance Solutions, Inc., a Texas
corporation (the "Company"), in connection with the proposed registration of
750,000 shares (the "Shares") of the Company's Common Stock, $.01 par value, and
750,000 Series A Junior Preferred Stock Purchase Rights (the "Rights"), as
described in a registration statement on Form S-8 (the "Registration Statement")
relating to the Common Stock and the Rights to be issued under the Company's
Second Amended and Restated 1997 Stock Option Plan (the "Plan") which
Registration Statement is to be filed with the Securities and Exchange
Commission.
We have, as counsel, examined such corporate records, certificates and
other documents and reviewed such questions of law as we have deemed necessary,
relevant or appropriate to enable us to render the opinions listed below. In
rendering such opinions, we have assumed the genuineness of all signatures and
the authenticity of all documents examined by us. As to various questions of
fact material to such opinions, we have relied upon representations of the
Company.
Based upon such examination and representations, we advise you that, in
our opinion:
A. The Shares have been duly and validly authorized by the Company.
B. The Shares, when issued and delivered in accordance with the
Plan, will be validly issued, fully paid and non-assessable.
<PAGE> 2
INSpire Insurance Solutions, Inc.
May 21, 1998
Page 2
C. The Rights have been duly and validly authorized by the Company.
D. The Rights to be issued in connection with the Shares to be
issued and delivered pursuant to the Plan will, when issued, be validly issued.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference therein to this firm under the
caption "Interests of Named Experts and Counsel."
Sincerely,
/s/ AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
INSpire Insurance Solutions, Inc. (formerly Millers Integrated Claims Resources,
Inc. and MilliRisk, Inc.) on Form S-8 of our report dated January 19, 1998,
appearing in the Annual Report on Form 10-K of INSpire Insurance Solutions,
Inc. for the year ended December 31, 1997.
DELOITTE & TOUCHE LLP
Fort Worth, Texas
May 21, 1998
