<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 15, 1999
REGISTRATION NO. 333-62679
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 6
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ACCREDO HEALTH, INCORPORATED
(Exact name of registrant as specified in its charter)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 8099 62-1642871
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF INCORPORATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
1640 CENTURY CENTER PARKWAY, SUITE 101
MEMPHIS, TN 38134
(901) 385-3688
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
------------------------
DAVID D. STEVENS
CHIEF EXECUTIVE OFFICER
ACCREDO HEALTH, INCORPORATED
1640 CENTURY CENTER PARKWAY, SUITE 101
MEMPHIS, TN 38134
(901) 385-3688
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
COPIES TO:
<TABLE>
<S> <C>
STEVEN L. POTTLE, ESQ. JOHN J. EGAN III, P.C.
ALSTON & BIRD LLP GOODWIN, PROCTER & HOAR LLP
ONE ATLANTIC CENTER EXCHANGE PLACE
1201 WEST PEACHTREE STREET BOSTON, MA 02109-2881
ATLANTA, GA 30309-3424 (617) 570-1000
(404) 881-7000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable on or after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of this prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be borne by the
Company in connection with the issuance and distribution of the securities being
registered hereby, other than underwriting discounts and commissions. The
Company is paying all of these expenses in connection with the issuance and
distribution of the securities.
<TABLE>
<S> <C>
SEC Registration Fee............................................ $ 25,774
NASD Filing Fee................................................. 7,000
Nasdaq Original Listing Fee..................................... 72,875
Accountants' Fees and Costs..................................... 450,000
Legal Fees and Costs............................................ 370,000
Printing and Engraving Costs.................................... 210,000
Transfer Agent and Registrar fees............................... 10,000
Insurance Premium Associated with Registration.................. 344,400
Miscellaneous................................................... 9,951
---------
Total....................................................... $1,500,000
---------
---------
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Amended and Restated Certificate of Incorporation provides
that the Company shall, to the fullest extent permitted by Section 145 of the
DGCL, as amended from time to time, indemnify its officers and directors.
Section 145 of the DGCL permits a corporation, under specified
circumstances, to indemnify its directors, officers, employees or agents against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by them in connection with any
action, suit or proceeding brought by third parties by reason of the fact that
they were or are directors, officers, employees or agents of the corporation, if
such directors, officers, employees or agents acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reason to believe their conduct was unlawful. In a derivative action, i.e., one
by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors, officers, employees or
agents in connection with the defense or settlement of any action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
agents are fairly and reasonably entitled to indemnity for such expenses despite
such adjudication of liability.
The Company's Amended and Restated Certificate of Incorporation contains a
provision which eliminates, to the fullest extent permitted by the DGCL,
director liability for monetary damages for breaches of the fiduciary duty of
care or any other duty as a director.
The Company intends to purchase a policy of director's and officer's
insurance that would in certain instances provide the funds necessary for the
Company to meet its indemnification obligations under its Amended and Restated
Certificate of Incorporation.
Reference is hereby made to Section of the Underwriting Agreement, the form
of which is filed as Exhibit 1.1 hereto, in which the Company has agreed to
indemnify the Underwriters and certain other persons against certain
liabilities.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
In connection with the Company's original capitalization, on May 31, 1996
the Company sold to Welsh, Carson, Anderson & Stowe VII, L.P. ("WCAS VII") and
certain of its affiliates an aggregate of 4,972,534 shares of Common Stock for
$14,917,602 and an aggregate of 248,624 shares of Series A Preferred Stock for
$24,862,400. In addition, certain other investors acquired 27,466 shares of
Common Stock for $82,398 and 1,376 shares of Series A Cumulative Preferred Stock
for $137,600.
In connection with the Company's acquisition of Southern Health Systems,
Inc. ("SHS") on May 31, 1996, Messrs. Grow, Kimbrough and Stevens (in addition
to certain other holders of SHS common stock) exchanged their shares of SHS
common stock for 19,560, 12,225 and 61,125 shares of the Company's Common Stock,
respectively, and 978 shares, 611 shares and 3,056 shares of the Series A
Preferred Stock, respectively.
In order to finance the acquisition of Hemophilia Health Services, Inc.
formerly known as Horizon Health Systems, Inc. ("HHS") and to provide working
capital, the Company issued $10.0 million in Senior Subordinated Notes to WCAS
VII and certain of its affiliates on June 4, 1997. In connection with the
issuance of the Senior Subordinated Notes, the Company issued an aggregate of
400,000 shares of Common Stock to the holders of the Senior Subordinated Notes.
Furthermore, as a condition to the acquisition of HHS and the appointment of
Kyle J. Callahan to the Company's Board of Directors, Mr. Callahan acquired
41,667 shares of the Company's Common Stock for $250,002 on October 1, 1997.
In connection with the appointment of Kenneth J. Melkus to the Company's
Board of Directors, Lauren Melkus acquired 41,667 shares of Common Stock for
$250,002 on October 27, 1997.
In connection with the appointment of Kenneth R. Masterson to the Company's
Board of Directors, the Company sold 34,000 shares of Common Stock to Mr.
Masterson for $204,000 on July 24, 1998 pursuant to a subscription agreement
entered into by Mr. Masterson in April 1998.
Except as otherwise noted, all issuances of securities described above were
made in reliance on the exemption from registration provided by Section 4(2) of
the Securities Act of 1933, as amended, as transactions by an issuer not
involving a public offering.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) Exhibits
<TABLE>
<C> <S>
+1.1 Form of Underwriting Agreement
3.1 Amended and Restated Certificate of Incorporation of the Registrant
+3.2 Amended and Restated Bylaws of the Registrant
+4.1 Form of Common Stock Certificate
+5.1 Opinion of Alston & Bird LLP with respect to validity of Common Stock
+10.1 Employment Agreement dated May 31, 1996 between the Company and David D. Stevens
+10.2 Employment Agreement dated May 31, 1996 between the Company and John R. Grow
+10.3 Employment Agreement dated May 31, 1996 between the Company and Joel R.
Kimbrough
+10.4 Employment Agreement dated June 5, 1997 between the Company and Kyle J. Callahan
+10.5 Employment Agreement dated July 10, 1998 between the Company and Thomas W. Bell
Jr.
10.6 Accredo Health 1999 Long-Term Incentive Plan
10.7 Accredo Health 1999 Employee Stock Purchase Plan
+10.8 Nova Holdings, Inc. and its Subsidiaries Stock Option and Restricted Purchase
Plan, as amended and restated
+10.9 Note Purchase Agreement dated June 4, 1997 among the Company, Welsh, Carson,
Anderson & Stowe VII, L.P. and certain other investors
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
+10.10 Registration Rights Agreement dated May 31, 1996 among the Company, Welsh,
Carson, Anderson & Stowe VII, L.P. and certain other investors
+10.11 Amendment Number One to the Registration Rights Agreement dated October 27, 1997
among the Company, Welsh, Carson, Anderson & Stowe VII, L.P. and certain other
investors
+10.12 Amendment Number Two to the Registration Rights Agreement dated July 24, 1998
among the Company, Welsh, Carson, Anderson & Stowe VII, L.P. and certain other
investors
+10.13 Subscription and Exchange Agreement dated May 31, 1996 among the Company and
certain purchasers and exchanging shareholders
+10.14 Stock Purchase Agreement dated May 31, 1996 among Le Bonheur Health Systems,
Inc., Southern Health Systems, Inc., the Company and Welsh, Carson, Anderson &
Stowe VII, L.P.
+10.15 Modification Agreement dated May 31, 1996 among Le Bonheur Health Systems, Inc.,
Southern Health Systems, Inc., Nova Holdings, Inc. and Welsh, Carson Anderson &
Stowe VII, L.P.
+10.16 Non-Disclosure and Non-Competition Agreement dated May 31, 1996 by and among Le
Bonheur Health Systems, Inc., PharmaThera, Inc., Welsh, Carson, Anderson & Stowe
VII, L.P., Southern Health Systems, Inc., Nova Factor, Inc. and Nova Holdings,
Inc.
+10.17 Stock Purchase Agreement dated as of June 5, 1997 among Dianne R. Martz, A.B.
Charlton, III, the Company and Horizon Health Systems, Inc.
+10.18 Non-Disclosure and Non-Compete Agreement dated as of June 5, 1997 by and among
Horizon Health Systems, Inc., the Company and Dianne R. Martz
+10.19 Grant Agreement dated as of June 5, 1997 by and between Kyle Callahan and the
Company
+10.20 Subscription and Restriction Agreement dated as of June 5, 1997 by and between
the Company and Kyle Callahan
+10.21 Consulting and Transition Agreement dated as of June 5, 1997 by and between
Dianne Martz and Horizon Health Systems, Inc.
+10.22 Letter Agreement dated as of June 3, 1997 from Andrew M. Paul to Kyle Callahan
regarding Mr. Callahan's election to the Board of Directors of the Company
+10.23 Lease Agreement dated September 1, 1994 between Dianne Martz and Horizon Health
Systems, Inc.
+10.24 Addendum to Lease Agreement dated September 1, 1994 amending the square footage
of Premises and annual rental payments
+10.25 Escrow Agreement dated June 5, 1997 among First American National Bank, Nova
Holdings, Inc. and Dianne Martz and A. B. Charlton, III
+10.26 Refunds Payable Escrow Agreement dated June 5, 1997 among First American
National Bank, Nova Holdings, Inc. and Dianne Martz and A. B. Charlton, III
+10.27 Contract for the Sale and Distribution of Genentech Human Growth Hormone dated
March 1, 1997 by and between Genentech, Inc. and Nova Factor, Inc. (The Company
has requested confidential treatment of certain portions of this Exhibit.)
+10.28 Distribution Agreement dated September 30, 1994 by and between Nova Factor, Inc.
and Genzyme Corporation (The Company has requested confidential treatment of
certain portions of this Exhibit.)
+10.29 Amendment No. 1 to Distribution Agreement dated January 1, 1995 by and between
Nova Factor, Inc. and Genzyme Corporation (The Company has requested
confidential treatment of certain portions of this Exhibit.)
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
+10.30 Second Amended and Restated Distribution Agreement dated July 1, 1994 by and
among PharmaThera, Inc., Nova Factor, Inc. and Genzyme Corporation (The Company
has requested confidential treatment of certain portions of this Exhibit.)
+10.31 Amendment No. 1 to Second Amended and Restated Distribution Agreement dated
September 30, 1994 by and between PharmaThera, Inc., Nova Factor, Inc. and
Genzyme Corporation (The Company has requested confidential treatment of certain
portions of this Exhibit.)
+10.32 Amendment No. 2 to Second Amended and Restated Distribution Agreement dated
January 1, 1995 by and between Nova Factor, Inc. and Genzyme Corporation (The
Company has requested confidential treatment of certain portions of this
Exhibit.)
+10.33 Distribution and Services Agreement dated November 1, 1995 by and between
Biogen, Inc. and Nova Factor, Inc. (The Company has requested confidential
treatment of certain portions of this Exhibit.)
+10.34 Amendment No. 1 to Distribution and Services Agreement dated May 17, 1996 by and
between Biogen, Inc. and Nova Factor, Inc. (The Company has requested
confidential treatment of certain portions of this Exhibit.)
+10.35 Addendum and Amendment No. 2 to Distribution and Services Agreement dated May
21, 1997 by and between Biogen, Inc. and Nova Factor, Inc. (The Company has
requested confidential treatment of certain portions of this Exhibit.)
+10.36 Addendum and Amendment No. 3 to Distribution and Services Agreement dated July
1, 1997 by and between Biogen, Inc. and Nova Factor, Inc. (The Company has
requested confidential treatment of certain portions of this Exhibit.)
+10.37 Addendum and Amendment No. 4 to Distribution and Services Agreement dated
January 1, 1998 by and between Biogen, Inc. and Nova Factor, Inc. (The Company
has requested confidential treatment of certain portions of this Exhibit.)
+10.38 Loan and Security Agreement dated as of June 5, 1997 among Nova Holdings, Inc.
and its Subsidiaries and NationsBank of Tennessee, N.A. and First Tennessee Bank
National Association
+10.39 Swing Line Note dated December 1, 1997 entered into by Nova Holdings, Inc. with
NationsBank of Tennessee, N.A.
+10.40 ISDA Master Agreement dated August 7, 1997 between NationsBank of Tennessee,
N.A. and Nova Holdings, Inc.
+10.41 Texas Health Pharmaceutical Resources Partnership Agreement dated July 1, 1994
(The Company has requested confidential treatment of certain portions of this
Exhibit.)
+10.42 Distribution Business Management and Service Agreement dated July 1, 1994 by and
among Southern Health Systems, Inc. and Texas Health Pharmaceutical Resources
(The Company has requested confidential treatment of certain portions of this
Exhibit.)
+10.43 Amendment No. 1 to Distribution Business Management and Service Agreement dated
July 1, 1994 by and among Southern Health Systems, Inc. and Texas Health
Pharmaceutical Resources (The Company has requested confidential treatment of
certain portions of this Exhibit.)
+10.44 Hemophilia Therapy Pharmacy Management Agreement dated May 9, 1997 by and among
Texas Health Pharmaceutical Resources and Children's Medical Center of Dallas
(The Company has requested confidential treatment of certain portions of this
Exhibit.)
</TABLE>
II-4
<PAGE>
<TABLE>
<C> <S>
+10.45 Amendment No. 1 to Hemophilia Therapy Pharmacy Management Agreement, dated
February 28, 1998, by and among Texas Health Pharmaceutical Resources and
Children's Medical Center of Dallas (The Company has requested confidential
treatment of certain portions of this Exhibit.)
+10.46 Incentive Stock Option Agreement of David Stevens dated May 31, 1996
+10.47 Incentive Stock Option Agreement of Joel R. Kimbrough dated May 31, 1996
+10.48 Incentive Stock Option Agreement of John R. Grow dated May 31, 1996
+10.49 Incentive Stock Option Agreement of Kyle Callahan dated September 3, 1997
+10.50 Non-Qualified Stock Option Agreement of Patrick J. Welsh dated February 9, 1998
+10.51 Non-Qualified Stock Option Agreement of Ken Melkus dated February 9, 1998
+10.52 Incentive Stock Option Agreement of Kyle Callahan dated February 9, 1998
+10.53 Non-Qualified Stock Option Agreement of Andrew M. Paul dated February 9, 1998
+10.54 Non-Qualified Stock Option Agreement of Kenneth R. Masterson dated April 30,
1998
+10.55 Incentive Stock Option Agreement of Thomas W. Bell, Jr. dated July 10, 1998
+10.56 Amendment No. 1 Loan and Security Agreement dated as of August 28, 1998 among
Nova Holdings, Inc., a Delaware corporation, and its Subsidiaries and
NationsBank of Tennessee, N.A. and First Tennessee Bank National Association
+10.57 Loan Agreement dated November 24, 1998 between NationsBank, N.A. and Children's
Hemophilia Services, a California general partnership composed of Children's
Home Care, a California not-for-profit public benefit corporation and Horizon
Health Systems, Inc., a Tennessee Corporation
+10.58 Limited Guaranty dated November 24, 1998 between NationsBank, N.A. and Accredo
Health, Incorporated
+10.59 Promissory Note dated December 24, 1998 between NationsBank, N.A. and Children's
Hemophilia Services
+10.60 Amended and Restated General Partnership Agreement of Children's Home Services
+10.61 Amended and Restated General Partnership Agreement of Children's Hemophilia
Services
+10.62 Growth Hormone Drug Therapy Business Management, Service and Sales Agreement
dated November 10, 1998 between Nova Factor, Inc., a Tennessee corporation, and
Children's Home Services, a California general partnership (The Company has
requested confidential treatment of certain portions of this Exhibit.)
+10.63 Hemophilia Therapy Business Management, Services and Sales Agreement, dated
November 10, 1998 between Horizon Health Systems, Inc., a Tennessee corporation,
and Children's Hemophilia Services, a California general partnership (The
Company has requested confidential treatment of certain portions of this
Exhibit.)
+10.64 Product Supply and Service Agreement dated November 10, 1998 between Nova
Factor, Inc., a Tennessee corporation, and Children's Home Care, a California
non-profit benefit corporation (The Company has requested confidential treatment
of certain portions of this Exhibit.)
+10.65 Distribution and Services Agreement dated August 28, 1998 between Centocor, Inc.
and its affiliates and Nova Factor, Inc. (The Company has requested confidential
treatment of certain portions of this Exhibit.)
+10.66 Amendment No. 2 dated March 2, 1999 to Loan and Security Agreement as amended on
June 5, 1997 among Accredo Health, Incorporated and its Subsidiaries and
NationsBank, N.A. and First Tennessee Bank National Association and NationsBank,
N.A. as Agent
</TABLE>
II-5
<PAGE>
<TABLE>
<C> <S>
+10.67 Amendment No. 1 to Distribution and Service Agreement dated January 11, 1999 by
and between Centocor, Inc. and its Affiliates and Nova Factor, Inc.
+21.1 Subsidiaries of the Company
+23.1 Consent of Alston & Bird LLP (included in opinion filed as Exhibit 5.1)
+23.2 Consent of Ernst & Young LLP
+24.1 Power of Attorney (included on the signature page)
+27.1 Financial Data Schedule
</TABLE>
(B) Financial Statement Schedules
Accredo Health, Incorporated
Schedule II--Valuation and Qualifying Accounts
Nova Factor, Inc.
Schedule II--Valuation and Qualifying Accounts
Texas Health Pharmaceutical Resources
Schedule II--Valuation and Qualifying Accounts
Children's Memorial Home Hemophilia Services
Schedule II--Valuation and Qualifying Accounts
Schedules other than those listed above are omitted because they are not
required or are not applicable, or the required information is shown in the
respective financial statements or notes thereto.
- ------------------------
* To be filed by amendment.
+ Previously filed.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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 Securities and Exchange 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.
The undersigned registrant hereby undertakes to provide to the
Representatives of the Underwriters at the closing specified in the underwriting
agreements certificates in such denominations and registered in such names as
required by the Representatives of the Underwriters to permit prompt delivery to
each purchaser.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Memphis, State of
Tennessee, on April 15, 1999.
<TABLE>
<S> <C> <C>
ACCREDO HEALTH, INCORPORATED
By: /s/ DAVID D. STEVENS
-----------------------------------------
David D. Stevens
CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities indicated on April 15, 1999.
SIGNATURE TITLE
- ------------------------------ ---------------------------
/s/ DAVID D. STEVENS Chief Executive Officer and
- ------------------------------ Chairman of the Board of
David D. Stevens Directors
* President and Director
- ------------------------------
John R. Grow
Senior Vice President and
/s/ JOEL R. KIMBROUGH Chief Financial Officer
- ------------------------------ (principal financial and
Joel R. Kimbrough accounting officer)
* Senior Vice President and
- ------------------------------ Director
Kyle J. Callahan
* Director
- ------------------------------
Patrick J. Welsh
* Director
- ------------------------------
Andrew M. Paul
* Director
- ------------------------------
Kenneth J. Melkus
* Director
- ------------------------------
Kenneth R. Masterson
<TABLE>
<S><C> <C>
/s/ JOEL R. KIMBROUGH
------------------------------
Joel R. Kimbrough
By:ATTORNEY-IN-FACT
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. EXHIBIT INDEX NUMBERED PAGE
- --------- -------------------------------------------------------------------------------- ----------------
<C> <S> <C>
+1.1 Form of Underwriting Agreement
3.1 Amended and Restated Certificate of Incorporation of the Registrant
+3.2 Amended and Restated Bylaws of the Registrant
+4.1 Form of Common Stock Certificate
+5.1 Opinion of Alston & Bird LLP with respect to validity of Common Stock
+10.1 Employment Agreement dated May 31, 1996 between the Company and David D. Stevens
+10.2 Employment Agreement dated May 31, 1996 between the Company and John R. Grow
+10.3 Employment Agreement dated May 31, 1996 between the Company and Joel R.
Kimbrough
+10.4 Employment Agreement dated June 5, 1997 between the Company and Kyle J. Callahan
+10.5 Employment Agreement dated July 10, 1998 between the Company and Thomas W. Bell
Jr.
10.6 Accredo Health 1999 Long-Term Incentive Plan
10.7 Accredo Health 1999 Employee Stock Purchase Plan
+10.8 Nova Holdings, Inc. and its Subsidiaries Stock Option and Restricted Purchase
Plan, as amended and restated
+10.9 Note Purchase Agreement dated June 4, 1997 among the Company, Welsh, Carson,
Anderson & Stowe VII, L.P. and certain other investors
+10.10 Registration Rights Agreement dated May 31, 1996 among the Company, Welsh,
Carson, Anderson & Stowe VII, L.P. and certain other investors
+10.11 Amendment Number One to the Registration Rights Agreement dated October 27, 1997
among the Company, Welsh, Carson, Anderson & Stowe VII, L.P. and certain other
investors
+10.12 Amendment Number Two to the Registration Rights Agreement dated July 24, 1998
among the Company, Welsh, Carson, Anderson & Stowe VII, L.P. and certain other
investors
+10.13 Subscription and Exchange Agreement dated May 31, 1996 among the Company and
certain purchasers and exchanging shareholders
+10.14 Stock Purchase Agreement dated May 31, 1996 among Le Bonheur Health Systems,
Inc., Southern Health Systems, Inc., the Company and Welsh, Carson, Anderson &
Stowe VII, L.P.
+10.15 Modification Agreement dated May 31, 1996 among Le Bonheur Health Systems, Inc.,
Southern Health Systems, Inc., Nova Holdings, Inc. and Welsh, Carson Anderson &
Stowe VII, L.P.
+10.16 Non-Disclosure and Non-Competition Agreement dated May 31, 1996 by and among Le
Bonheur Health Systems, Inc., PharmaThera, Inc., Welsh, Carson, Anderson & Stowe
VII, L.P., Southern Health Systems, Inc., Nova Factor, Inc. and Nova Holdings,
Inc.
+10.17 Stock Purchase Agreement dated as of June 5, 1997 among Dianne R. Martz, A.B.
Charlton, III, the Company and Horizon Health Systems, Inc.
+10.18 Non-Disclosure and Non-Compete Agreement dated as of June 5, 1997 by and among
Horizon Health Systems, Inc., the Company and Dianne R. Martz
+10.19 Grant Agreement dated as of June 5, 1997 by and between Kyle Callahan and the
Company
+10.20 Subscription and Restriction Agreement dated as of June 5, 1997 by and between
the Company and Kyle Callahan
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. EXHIBIT INDEX NUMBERED PAGE
- --------- -------------------------------------------------------------------------------- ----------------
<C> <S> <C>
+10.21 Consulting and Transition Agreement dated as of June 5, 1997 by and between
Dianne Martz and Horizon Health Systems, Inc.
+10.22 Letter Agreement dated as of June 3, 1997 from Andrew M. Paul to Kyle Callahan
regarding Mr. Callahan's election to the Board of Directors of the Company
+10.23 Lease Agreement dated September 1, 1994 between Dianne Martz and Horizon Health
Systems, Inc.
+10.24 Addendum to Lease Agreement dated September 1, 1994 amending the square footage
of Premises and annual rental payments
+10.25 Escrow Agreement dated June 5, 1997 among First American National Bank, Nova
Holdings, Inc. and Dianne Martz and A. B. Charlton, III
+10.26 Refunds Payable Escrow Agreement dated June 5, 1997 among First American
National Bank, Nova Holdings, Inc. and Dianne Martz and A. B. Charlton, III
+10.27 Contract for the Sale and Distribution of Genentech Human Growth Hormone dated
March 1, 1997 by and between Genentech, Inc. and Nova Factor, Inc. (The Company
has requested confidential treatment of certain portions of this Exhibit.)
+10.28 Distribution Agreement dated September 30, 1994 by and between Nova Factor, Inc.
and Genzyme Corporation (The Company has requested confidential treatment of
certain portions of this Exhibit.)
+10.29 Amendment No. 1 to Distribution Agreement dated January 1, 1995 by and between
Nova Factor, Inc. and Genzyme Corporation (The Company has requested
confidential treatment of certain portions of this Exhibit.)
+10.30 Second Amended and Restated Distribution Agreement dated July 1, 1994 by and
among PharmaThera, Inc., Nova Factor, Inc. and Genzyme Corporation (The Company
has requested confidential treatment of certain portions of this Exhibit.)
+10.31 Amendment No. 1 to Second Amended and Restated Distribution Agreement dated
September 30, 1994 by and between PharmaThera, Inc., Nova Factor, Inc. and
Genzyme Corporation (The Company has requested confidential treatment of certain
portions of this Exhibit.)
+10.32 Amendment No. 2 to Second Amended and Restated Distribution Agreement dated
January 1, 1995 by and between Nova Factor, Inc. and Genzyme Corporation (The
Company has requested confidential treatment of certain portions of this
Exhibit.)
+10.33 Distribution and Services Agreement dated November 1, 1995 by and between
Biogen, Inc. and Nova Factor, Inc. (The Company has requested confidential
treatment of certain portions of this Exhibit.)
+10.34 Amendment No. 1 to Distribution and Services Agreement dated May 17, 1996 by and
between Biogen, Inc. and Nova Factor, Inc. (The Company has requested
confidential treatment of certain portions of this Exhibit.)
+10.35 Addendum and Amendment No. 2 to Distribution and Services Agreement dated May
21, 1997 by and between Biogen, Inc. and Nova Factor, Inc. (The Company has
requested confidential treatment of certain portions of this Exhibit.)
+10.36 Addendum and Amendment No. 3 to Distribution and Services Agreement dated July
1, 1997 by and between Biogen, Inc. and Nova Factor, Inc. (The Company has
requested confidential treatment of certain portions of this Exhibit.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. EXHIBIT INDEX NUMBERED PAGE
- --------- -------------------------------------------------------------------------------- ----------------
<C> <S> <C>
+10.37 Addendum and Amendment No. 4 to Distribution and Services Agreement dated
January 1, 1998 by and between Biogen, Inc. and Nova Factor, Inc. (The Company
has requested confidential treatment of certain portions of this Exhibit.)
+10.38 Loan and Security Agreement dated as of June 5, 1997 among Nova Holdings, Inc.
and its Subsidiaries and NationsBank of Tennessee, N.A. and First Tennessee Bank
National Association
+10.39 Swing Line Note dated December 1, 1997 entered into by Nova Holdings, Inc. with
NationsBank of Tennessee, N.A.
+10.40 ISDA Master Agreement dated August 7, 1997 between NationsBank of Tennessee,
N.A. and Nova Holdings, Inc.
+10.41 Texas Health Pharmaceutical Resources Partnership Agreement dated July 1, 1994
(The Company has requested confidential treatment of certain portions of this
Exhibit.)
+10.42 Distribution Business Management and Service Agreement dated July 1, 1994 by and
among Southern Health Systems, Inc. and Texas Health Pharmaceutical Resources.
(The Company has requested confidential treatment of certain portions of this
Exhibit.)
+10.43 Amendment No. 1 to Distribution Business Management and Service Agreement dated
July 1, 1994 by and among Southern Health Systems, Inc. and Texas Health
Pharmaceutical Resources (The Company has requested confidential treatment of
certain portions of this Exhibit.)
+10.44 Hemophilia Therapy Pharmacy Management Agreement dated May 9, 1997 by and among
Texas Health Pharmaceutical Resources and Children's Medical Center of Dallas
(The Company has requested confidential treatment of certain portions of this
Exhibit.)
+10.45 Amendment No. 1 to Hemophilia Therapy Pharmacy Management Agreement dated
February 28, 1998 by and among Texas Health Pharmaceutical Resources and
Children's Medical Center of Dallas (The Company has requested confidential
treatment of certain portions of this Exhibit.)
+10.46 Incentive Stock Option Agreement of David Stevens dated May 31, 1996
+10.47 Incentive Stock Option Agreement of Joel R. Kimbrough dated May 31, 1996
+10.48 Incentive Stock Option Agreement of John R. Grow dated May 31, 1996
+10.49 Incentive Stock Option Agreement of Kyle Callahan dated September 3, 1997
+10.50 Non-Qualified Stock Option Agreement of Patrick J. Welsh dated February 9, 1998
+10.51 Non-Qualified Stock Option Agreement of Ken Melkus dated February 9, 1998
+10.52 Incentive Stock Option Agreement of Kyle Callahan dated February 9, 1998
+10.53 Non-Qualified Stock Option Agreement of Andrew M. Paul dated February 9, 1998
+10.54 Non-Qualified Stock Option Agreement of Kenneth R. Masterson dated April 30,
1998
+10.55 Incentive Stock Option Agreement of Thomas W. Bell, Jr. dated July 10, 1998
+10.56 Amendment No. 1 Loan and Security Agreement dated as of August 28, 1998 among
Nova Holdings, Inc., a Delaware corporation, and its Subsidiaries and
NationsBank of Tennessee, N.A. and First Tennessee Bank National Association
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. EXHIBIT INDEX NUMBERED PAGE
- --------- -------------------------------------------------------------------------------- ----------------
<C> <S> <C>
+10.57 Loan Agreement dated November 24, 1998 between NationsBank, N.A., and Children's
Hemophilia Services, a California general partnership composed of Children's
Home Care, a California not-for-profit public benefit corporation and Horizon
Health Systems, Inc., a Tennessee Corporation
+10.58 Limited Guaranty dated November 24, 1998 between NationsBank, N.A. and Accredo
Health, Incorporated
+10.59 Promissory Note dated December 24, 1998 between NationsBank, N.A. and Children's
Hemophilia Services
+10.60 Amended and Restated General Partnership Agreement of Children's Home Services
+10.61 Amended and Restated General Partnership Agreement of Children's Hemophilia
Services
+10.62 Growth Hormone Drug Therapy Business Management, Service and Sales Agreement
dated November 10, 1998 between Nova Factor, Inc., a Tennessee corporation, and
Children's Home Services, a California general partnership (The Company has
requested confidential treatment of certain portions of this Exhibit.)
+10.63 Hemophilia Therapy Business Management, Services and Sales Agreement dated
November 10, 1998 between Horizon Health Systems, Inc., a Tennessee corporation,
and Children's Hemophilia Services, a California general partnership (The
Company has requested confidential treatment of certain portions of this
Exhibit.)
+10.64 Product Supply and Service Agreement dated November 10, 1998 between Nova
Factor, Inc., a Tennessee corporation, and Children's Home Care, a California
non-profit benefit corporation (The Company has requested confidential treatment
of certain portions of this Exhibit.)
+10.65 Distribution and Services Agreement dated August 28, 1998 between Centocor, Inc.
and its affiliates and Nova Factor, Inc. (The Company has requested confidential
treatment of certain portions of this Exhibit.)
+10.66 Amendment No. 2 dated March 2, 1999 to Loan and Security Agreement as amended on
June 5, 1997 among Accredo Health, Incorporated and its Subsidiaries and
NationsBank, N.A. and First Tennessee Bank National Association and NationsBank,
N.A. as Agent
+10.67 Amendment No. 1 to Distribution and Service Agreement dated January 11, 1999 by
and between Centocor, Inc. and its Affiliates and Nova Factor, Inc.
+21.1 Subsidiaries of the Company
+23.1 Consent of Alston & Bird LLP (included in Opinion filed as Exhibit 5.1)
+23.2 Consent of Ernst & Young LLP
+24.1 Power of Attorney (included on the signature page)
+27.1 Financial Data Schedule
</TABLE>
- ------------------------
* To be filed by amendment.
+ Previously filed.
<PAGE>
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ACCREDO HEALTH, INCORPORATED
-------------------------------
The name of the Corporation (which is hereinafter referred to as the
Corporation) is "Accredo Health, Incorporated."
The original certificate of incorporation was filed with the Secretary
of State of the State of Delaware on May 24, 1996, under the name "Nova
Holdings, Inc.," and an amendment was filed with the Secretary of State of the
State of Delaware on August 28, 1998 changing the Corporation's name to Accredo
Health, Incorporated.
This Amended and Restated Certificate of Incorporation has been duly
proposed by resolutions adopted and declared advisable by the Board of Directors
of the Corporation, duly adopted by the stockholders of the Corporation by
written consent in accordance with Section 228 of the General Corporation Law of
the State of Delaware (the "DGCL"), and duly executed and acknowledged by the
officers of the Corporation in accordance with Sections 103, 242 and 245 of the
DGCL.
The text of the Certificate of Incorporation of the Corporation is
hereby amended and restated to read in its entirety as follows:
ARTICLE I
NAME
The name of the Corporation is:
ACCREDO HEALTH, INCORPORATED
ARTICLE II
REGISTERED AGENT
The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle.
The name of the Corporation's registered agent at such address is Corporation
Service Company.
<PAGE>
ARTICLE III
PURPOSES
The purposes for which the Corporation is formed are to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "DGCL").
ARTICLE IV
CAPITAL STOCK
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 37,800,000 shares, consisting of
(a) 300,000 shares of Series A Cumulative Preferred Stock, $1.00 par value
("Series A Preferred"), (b) 5,000,000 shares of preferred stock, $1.00 par
value, which shares shall be issued from time to time in one or more series, at
the discretion of the Board of Directors (the "Undesignated Preferred Stock"),
(c) 30,000,000 shares of Common Stock, $.01 par value ("Common Stock"), and (d)
2,500,000 shares of Non-Voting Common Stock, $.01 par value (the "Non-Voting
Common Stock"). Cross references in each Subdivision A through D of this ARTICLE
IV refer to the Sections within such Subdivision unless otherwise indicated.
The following is a statement of the designations, and the powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, in respect of each class of stock of the Corporation:
A. SERIES A CUMULATIVE PREFERRED STOCK
1. DIVIDENDS.
(a) The holders of shares of Series A Preferred shall be
entitled to receive dividends at the rate of $8.00 per share per annum, and no
more, payable when and as declared by the Board of Directors of the Corporation
and out of funds legally available for the payment thereof. Such dividends shall
be cumulative and shall accrue from the date of issue whether or not declared
and whether or not there are any funds of the Corporation legally available for
the payment of dividends. Accrued but unpaid dividends shall not bear interest.
The Board of Directors of the Corporation may fix a record date for the
determination of holders of Series A Preferred entitled to receive payment of a
dividend declared thereon, which record date shall be no more than 60 days prior
to the date fixed for the payment thereof.
(b) As long as any shares of Series A Preferred shall remain
outstanding, in no event shall any dividend be declared or paid upon, nor shall
any distribution be made upon, any Junior Capital Stock, other than a dividend
or distribution payable solely in shares of Common Stock of the Corporation, nor
shall any shares of Junior Capital Stock be purchased or redeemed by the
Corporation, nor shall any moneys be paid to or made available for a sinking
fund for the purchase or redemption of shares
2
<PAGE>
of any Junior Capital Stock, unless, in each such case, (i) full cumulative
dividends on the outstanding shares of Series A Preferred shall have been
declared and paid and (ii) any arrears or defaults in any mandatory redemption
of shares of Series A Preferred shall have been cured; PROVIDED, however, that
this Section l(b) shall not apply to any repurchase by the Corporation of shares
of its Common Stock pursuant to the terms of any employment agreement, stock
rights agreement, stock purchase plan, stock option plan or similar arrangement
between the Corporation and its employees. For purposes hereof, the term "Junior
Capital Stock" means any shares of capital stock of the Corporation, including
the Corporation's Common Stock and Non-Voting Common Stock, other than shares of
the Corporation's capital stock permitted to rank on a parity with or senior to
the Series A Preferred pursuant to Section 3 hereof.
2. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series A
Preferred then outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders, before any payment
shall be made to the holders of shares of any Junior Capital Stock by reason of
their ownership thereof, an amount equal to $100 per share of Series A
Preferred, as the case may be, plus all accrued but unpaid dividends thereon
(whether or not declared), and no more. If upon any such liquidation,
dissolution or winding up of the Corporation the remaining assets of the
Corporation available for distribution to its stockholders (after making all
distributions to which holders of capital stock ranking senior to the Series A
Preferred shall be entitled) shall be insufficient to pay the holders of shares
of Series A Preferred the full amount to which they shall be entitled pursuant
to this Section 2(a), the holders of shares of Series A Preferred, and any other
shares ranking on a parity therewith, shall share ratably in any distribution or
the remaining assets and funds of the Corporation in proportion to the
respective amounts which would otherwise be payable in respect of the shares of
Series A Preferred held by them upon such distribution if all amounts payable on
or with respect to such shares were paid in full.
(b) After the payment of all amounts required to be paid
pursuant to Section 2(a) to the holders of shares of Series A Preferred, and any
other shares ranking on a parity therewith, upon the dissolution, liquidation or
winding up of the corporation, the holders of shares of Junior Capital Stock
then outstanding shall share in any distribution of the remaining assets and
funds of the Corporation in the manner provided by law, in the Certificate of
Incorporation of the Corporation, as amended, or as provided in any pertinent
Certificate of Designation of the Corporation, as the case may be.
(c) Neither the merger or consolidation of the Corporation
into or with any other corporation, nor the sale of all or substantially all the
assets of the Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the corporation for purposes of this Section 2 (unless in
connection therewith the liquidation of the corporation is specifically
approved).
3
<PAGE>
3. VOTING. Except as provided herein or by law, holders of Series A
Preferred shall not have any voting rights. So long as shares of the Series A
Preferred are outstanding, without the consent of the holders of at least the
majority of the Series A Preferred at the time outstanding given in person or by
proxy, either in writing or at a special meeting called for that purpose at
which the holders of the Series A Preferred shall vote separately as a class,
the Corporation may not (i) effect or validate the amendment, alteration or
repeal of any provision hereof which would adversely affect the dividend,
voting, redemption or liquidation rights of the Series A Preferred set forth
herein, or (ii) create or authorize any additional class or series of stock
ranking senior to or on a parity with the Series A Preferred as to dividends or
as to rights upon mandatory redemption, liquidation, dissolution or winding up;
increase the authorized number of shares of the Series A Preferred or of any
other class or series of capital stock of the Corporation ranking senior to or
on a parity with the Series A Preferred as to dividends or as to rights upon
mandatory redemption, liquidation, dissolution or winding up, whether any such
creation or authorization or increase shall be by means of amendment hereof,
merger, consolidation or otherwise; or issue additional shares of Series A
Preferred in excess of the number of shares authorized herein.
4. OPTIONAL REDEMPTION. Shares of Series A Preferred may be redeemed in
whole or from time to time in part at any time (in amounts which shall aggregate
1,000 shares or any higher integral multiple of 1,000 shares), at the option of
the Corporation, at the redemption price of $100 per share plus all accrued but
unpaid dividends thereon (whether or not declared) as of the date fixed for
redemption (the "Redemption Price"). If the Corporation redeems less than all
outstanding shares of Series A Preferred, whether pursuant to this Section 4 or
Section 5 hereof, such redemption shall be made ratably among the holders of
Series A Preferred.
5. MANDATORY REDEMPTION.
(a) On May 31, 2004, the Corporation shall redeem, at the
Redemption Price, all of the shares of Series A Preferred then outstanding.
(b) Subject to the prior rights of any holders of the
Corporation's indebtedness, upon the consummation of any underwritten public
offering of the Corporation's common stock registered pursuant to the Securities
Act of 1933, as amended, the Corporation shall apply any net cash proceeds of
such sale received by it to redeem, at the Redemption Price, shares of Series A
Preferred then outstanding.
(c) In the event of a consolidation or merger of the
Corporation with or into any other corporation (other than a merger in which the
Corporation is the surviving corporation and which will not result in more than
50% in voting power of the equity securities of the Corporation having general
voting power outstanding immediately after the effective date of such merger
being owned beneficially other than by persons who were the beneficial owners of
such equity securities immediately prior to such merger, in
4
<PAGE>
substantially the same proportions) (a "Change of Control"), or in the case of a
sale of all or substantially all of the assets of the Corporation as an entirety
to any other person (a "Sale of Assets"), the Corporation shall, at least 35
days prior to the effective date of any such change of Control or Sale of
Assets, give notice thereof to the holder or holders of Series A Preferred in
the manner described in Section 6(a) below. In the event that within 30 days
after the receipt of such notice, any holders of Series A Preferred elect, by
written notice to the Corporation, to have any or all of their Series A
Preferred redeemed, the Corporation shall redeem the same at the Redemption
Price not later than the day prior to the effective date of such Change of
Control or Sale of Assets.
6. PROCEDURE FOR REDEMPTION.
(a) For purposes of this Section 6, the term "Redemption Date"
means any date on which the corporation elects or is required to redeem shares
of Series A Preferred pursuant to Sections 4 or 5. At least 20 days (and not
more than 60 days) prior to any Redemption Date (except in the case of a notice
given in connection with a Change of Control or Sale of Assets as provided in
Section 5(c) above, which notice shall be given at least 35 days prior to such
Change of Control or Sale of Assets), written notice (a "Redemption Notice")
shall be mailed, by first class or registered mail, postage prepaid, to each
holder of record of Series A Preferred, at his or its address last shown on the
records of the transfer agent of the Series A Preferred (or the records of the
corporation, if it serves as its own transfer agent), notifying such holder of
the Redemption Date, the Redemption Price, (except in the case of a redemption
pursuant to Section 5(c) above) the total number of shares to be redeemed and
the number of shares to be redeemed from such holder, and calling upon such
holder to surrender (in the case of a redemption pursuant to Section 5(c) above,
if such holder elects to have shares redeemed pursuant thereto) to the
Corporation, in the manner and at the place designated, his or its certificate
or certificates representing the shares to be redeemed. In order to facilitate
the redemption of the Series A Preferred, the Board of Directors may fix a
record date for the determination of holders of the Series A Preferred, not more
than 60 days nor less than 10 days prior to the Redemption Date.
(b) If the Redemption Notice is being sent by the Corporation
pursuant to Section 5(c) above, then, in addition to the information required to
be included in the Redemption Notice pursuant to Section 6(a) above, the
Redemption Notice shall also state:
(i) that the Redemption Notice is being sent pursuant
to Section 5(c) hereof;
(ii) the parties to and the terms of the transaction
or transactions resulting in the Change of Control or Sale of Assets;
and
(iii) such other information as the Corporation in
its sole discretion deems appropriate.
5
<PAGE>
(c) On or prior to any Redemption Date, all holders of shares
of Series A Preferred whose shares are to be redeemed in whole or in part on
such date shall surrender their certificates representing such shares to the
Corporation, in the manner and at the place designated in the Redemption Notice,
and against such surrender the Redemption Price of such shares shall be paid to
the order of the person, whose name appears on each such certificate as the
owner thereof. Each surrendered certificate shall be canceled, provided that if
less than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares. From and after
any Redemption Date, unless there shall have been a default in payment of the
Redemption Price, all rights of the holders of the shares of Series A Preferred
designated for redemption in the Redemption Notice (or otherwise designated by
the holders thereof for redemption pursuant to Section 5(c) above) as holders of
such shares of Series A Preferred (except the right to receive the Redemption
Price without interest against surrender of their certificate or certificates)
shall cease with respect to such shares, and such shares shall not thereafter be
transferred on the books of the Corporation or be deemed to be outstanding for
any purpose whatsoever.
(d) If the funds of the Corporation legally available for
redemption of Series A Preferred on any Redemption Date are insufficient to
redeem the full number of shares of Series A Preferred required by Section 5 to
be redeemed on such date, those funds which are legally available shall be used
to redeem the maximum possible number of such shares of Series A Preferred
ratably from each holder whose shares are otherwise required to be redeemed. At
any time thereafter when additional funds of the Corporation become legally
available for the redemption of Series A Preferred, such funds will be used, at
the end of the next succeeding fiscal quarter, to redeem the balance of the
shares which the Corporation was theretofore obligated to redeem, ratably on the
basis set forth in the preceding sentence.
7. REACQUIRED SHARES. Any shares of Series A Preferred, which are
redeemed or otherwise acquired by the Corporation in any manner whatsoever shall
be retired and canceled promptly after the acquisition thereof and the number of
authorized shares of Series A Preferred shall be reduced accordingly.
B. UNDESIGNATED PREFERRED STOCK
After the Series A Preferred has been redeemed in full, the
Undesignated Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is authorized, after redemption in full of the
Series A Preferred, to provide for the issuance of shares of Undesignated
Preferred Stock in series and, by filing a certificate pursuant to the DGCL
(hereinafter referred to as a "Preferred Stock Designation"), to establish from
time to time the number of shares to be included in each such series, and to fix
the designation, powers, privileges, preferences and rights of the shares of
each such series and the qualifications, limitations and restrictions thereof.
The authority of the
6
<PAGE>
Board of Directors with respect to each series shall include, but not be limited
to, determination of the following:
(i) the designation of the series, which may be by
distinguishing number, letter or title;
(ii) the number of shares of the series, which number the
Board of Directors may thereafter (except where otherwise provided in the
Preferred Stock Designation) increase or decrease (but not below the number of
shares thereof then outstanding);
(iii) whether dividends, if any, shall be cumulative or
noncumulative, and, in the case of shares of any series having cumulative
dividend rights, the date or dates or method of determining the date or dates
from which dividends on the shares of such series shall be cumulative;
(iv) the rate of any dividends (or method of determining such
dividends) payable to the holders of the shares of such series, any conditions
upon which such dividends shall be paid and the date or dates or the method for
determining the date or dates upon which such dividends shall be payable;
(v) the price or prices (or method of determining such price
or prices) at which, the form of payment of such price or prices (which may be
cash, property or rights, including securities of the same or another
corporation or other entity) for which, the period or periods within which and
the terms and conditions upon which the shares of such series may be redeemed,
in whole or in part, at the option of the Corporation or at the option of the
holder or holders thereof or upon the happening of a specified event or events,
if any;
(vi) the obligation, if any, of the Corporation to purchase or
redeem shares of such series pursuant to a sinking fund or otherwise and the
price or prices at which, the form of payment of such price or prices (which may
be cash, property or rights, including securities of the same or another
corporation or other entity) for which, the period or periods within which and
the terms and conditions upon which the shares of such series shall be redeemed
or purchased, in whole or in part, pursuant to such obligation;
(vii) the amount payable out of the assets of the Corporation
to the holders of shares of the series in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation;
(viii) provisions, if any, for the conversion or exchange of
the shares of such series, at any time or times at the option of the holder or
holders thereof or at the option of the Corporation or upon the happening of a
specified event or events, into shares of any other class or
7
<PAGE>
classes or any other series of the same or any other class or classes of stock,
or any other security, of the Corporation, or any other corporation or other
entity, and the price or prices or rate or rates of conversion or exchange and
any adjustments applicable thereto, and all other terms and conditions upon
which such conversion or exchange may be made;
(ix) restrictions on the issuance of shares of the same series
or of any other class or series, if any; and
(x) the voting rights, if any, of the holders of shares of the
series.
C. COMMON STOCK
1. DIVIDENDS. The holders of shares of Common Stock shall be entitled
to receive such dividends as from time to time may be declared by the Board of
Directors of the Corporation, subject to the provisions of the Series A
Preferred and to the provisions of the Preferred Stock Designation of any
Undesignated Preferred Stock.
2. LIQUIDATION. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, after payment shall
have been made to holders of Series A Preferred of the full amounts to which
they shall be entitled, the holders of Common Stock shall be entitled, to the
exclusion of the holders of Series A Preferred, to share ratably according to
the number of shares of Common Stock held by them in all remaining assets of the
Corporation available for distribution to its stockholders, subject to the
provisions of the Preferred Stock Designation of any Undesignated Preferred
Stock.
3. VOTING. Each holder of Common Stock shall be entitled to one vote
per share.
D. NON-VOTING COMMON STOCK
1. VOTING RIGHTS. The holders of shares of Non-Voting Common Stock
shall not be entitled to vote on any matter to be voted on by the stockholders
of the Corporation.
2. DIVIDENDS. No payment of dividends or distributions shall be made to
the holders of shares of Non-Voting Common Stock unless and until the holders of
shares of preferred stock receive any preferential amounts to which they are
entitled under the provisions of the Series A Preferred or under the provisions
of the Preferred Stock Designation of any Undesignated Preferred Stock. Subject
to the limitation set forth in the preceding sentence of this Section 2, the
holders of shares of Non-Voting Common Stock shall be entitled to receive such
dividends and distributions as may be declared upon such shares of Non Voting
Common Stock, from time to time by a resolution or resolutions adopted by the
Board of Directors. Such dividends shall be equal in amount per share to
dividends declared on Common Stock; provided, however, that in the event that
the
8
<PAGE>
holders of Common Stock receive a dividend payable in shares of Common Stock or
other securities convertible into or exchangeable for shares of Common Stock,
then holders of Non-Voting Common Stock shall receive a number of shares of
Non-Voting Common Stock or of such other securities which is equal to the number
of shares of Non-Voting Common Stock or such other securities which they would,
but for this proviso, have received pursuant to this Section 2.
3. LIQUIDATION. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation after payment or
provision for payment of the debts and liabilities of the Corporation and
payment to holders of Series A Preferred of the full amounts to which they shall
be entitled, all remaining assets of the Corporation shall be shared pro rata
among the holders of the Common Stock and the Non-Voting Common Stock available
for distribution to its stockholders, to the exclusion of the holders of the
Series A Preferred, based upon the number of shares held by them, subject to the
provisions of the Preferred Stock Designation of any undesignated Preferred.
4. CONVERSION.
(a) RIGHT TO CONVERT. Subject to the terms and conditions of
this Section 4, the holder of any share or shares of Non-Voting Common Stock
shall have the right, at its option, at any time, to convert any such shares of
Non-Voting Common Stock (except that upon any liquidation, dissolution or
winding up of the Corporation the right of conversion shall terminate at 5:00
p.m. (New York City time) on the last business day preceding the date fixed for
payment of the amount distributable on Non-Voting Common Stock) into an equal
number of fully paid and nonassessable whole shares of Common Stock; provided,
however, that such conversion will not be permitted hereunder, and the
Corporation shall not be required to convert any shares of Non-Voting Common
Stock into Common Stock, to the extent that, at the date upon which such
conversion is deemed to take place as provided in Subsection 4(b) below, the
WCAS Group (as hereinafter defined) would, but for the limitation contained in
this proviso, hold, or otherwise have voting control over, in aggregate, more
than 49% of the voting securities of the Corporation outstanding at such time,
after taking into account the shares of Common Stock issuable upon such
conversion. Such rights of conversion shall be exercised by the holder thereof
by giving written notice to the Secretary of the Corporation that the holder
elects to convert a stated number of shares of Non-Voting Common Stock into
Common Stock and by surrender of a certificate or certificates for the shares so
to be converted to the Corporation at its principal office (or such other office
or agency of the Corporation as the Corporation may designate by notice in
writing to the holder or holders of Non-Voting Common Stock) at any time during
its usual business hours on the date set forth in such notice, together with a
statement of the name or names (with address) in which the certificate or
certificates for shares of Common Stock shall be issued.
(b) ISSUANCE OF CERTIFICATES; TIME CONVERSION EFFECTED.
Promptly after the receipt of the written notice referred to in Subsection 4(a)
and surrender of the certificate or certificates for the share or shares of
Non-Voting Common Stock eligible to
9
<PAGE>
be converted under Subsection 4(a), the Corporation shall issue and deliver, or
cause to be issued and delivered, to the holder, registered in such name or
names as such holder may direct, a certificate or certificates for the number of
whole shares of Common Stock issuable upon the conversion of such share or
shares of Non-Voting Common Stock. To the extent permitted by law, such
conversion shall be deemed to have been effected at 5:00 p.m. (New York City
time) on the date on which such written notice shall have been received by the
Corporation and the certificate or certificates for such share or shares shall
have been surrendered as aforesaid, and at such time the rights of the holder of
such share or shares of Non-Voting Common Stock shall cease, and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares represented thereby.
(c) FRACTIONAL SHARES; DIVIDENDS; PARTIAL CONVERSION.
Fractional shares may be issued upon conversion of Non-Voting Common Stock into
Common Stock. No payment or adjustment shall be made upon any conversion on
account of any cash dividends on the Common Stock issued upon such conversion.
At the time of each conversion, the Corporation shall pay in cash an amount
equal to all dividends accrued and unpaid on the shares surrendered for
conversion to the date upon which such conversion is deemed to take place as
provided in Subsection 4(b) above. In case the number of shares of Non-Voting
Common Stock represented by the certificate or certificates surrendered pursuant
to Subsection 4(a) exceeds the number of shares converted, the Corporation
shall, upon such conversion, execute and deliver to the holder thereof, at the
expense of the Corporation, a new certificate or certificates for the number of
shares of Non-Voting Common Stock represented by the certificate or certificates
surrendered which are not to be converted.
(d) SUBDIVISION OR COMBINATION OF STOCK. In case the
Corporation shall at any time subdivide its outstanding shares of Common Stock
into a greater number of shares, then the Non-Voting Common Stock shall be
proportionately subdivided, and conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller number of shares, then the number
of shares of Non-Voting Common Stock immediately prior to such combination shall
be proportionately reduced. Upon any such event, the Corporation shall give
written notice thereof, by first class mail, postage prepaid, addressed to each
holder of shares of Non-Voting Common Stock at the address of such holder as
shown on the books of the Corporation.
(e) REORGANIZATION OR RECLASSIFICATION. If any capital
reorganization or reclassification of the capital stock of the Corporation or
any consolidation or merger of the Corporation with another corporation, or the
sale of all or substantially all its assets to another corporation, shall be
effected in such a way that holders of Common Stock shall be entitled to receive
stock, securities or assets with respect to or in exchange for Common Stock,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provisions shall be made whereby each holder
of a share or shares of Non-Voting Common Stock shall thereafter have the right
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to receive, upon the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock immediately theretofore receivable
upon the conversion of such share or shares of Non-Voting Common Stock, such
shares of stock, securities or assets as may be issued or payable with respect
to or in exchange for a number of outstanding shares of Common Stock equal to
the number of shares of such stock immediately theretofore so receivable had
such reorganization, reclassification, consolidation, merger or sale not taken
place, and in any such case appropriate provision shall be made with respect to
the rights and interests of such holder to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the number of
shares of Common Stock issuable upon conversion of Non-Voting Common Stock)
shall thereafter be applicable, as nearly as may be, in relation to any shares
of stock, securities or assets thereafter deliverable upon such conversion. In
the event of a merger or consolidation of the Corporation as a result of which a
greater or lesser number of shares of common stock of the surviving corporation
are issuable to holders of Common Stock outstanding immediately prior to such
merger or consolidation, the number of shares of Common Stock issuable upon
conversion of Non-Voting Common Stock in effect immediately prior to such merger
or consolidation shall be adjusted in the same manner as though there were a
subdivision or combination of all outstanding shares of Common Stock. The
Corporation will not effect any such consolidation, merger or sale, unless prior
to the consummation thereof the successor corporation (if other than the
Corporation) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume, by written instrument executed and mailed
or delivered to each holder of Non-Voting Common Stock at the last address of
such holder appearing on the books of the Corporation, the obligation to deliver
to such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to receive.
(f) NOTICE OF ADJUSTMENT. Upon any adjustment made pursuant to
Subsection 4(e), then and in each such case the Corporation shall give written
notice thereof, by first class mail, postage prepaid, addressed to each holder
of shares of Non-Voting Common Stock at the address of such holder as shown on
the books of the Corporation, which notice shall state the stock, securities or
assets issuable upon conversion of the Non-Voting Common Stock resulting from
such adjustment, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
(g) OTHER NOTICES. In case at any time:
(i) the Corporation shall declare any dividend upon
its Common Stock payable in cash or stock or make any other
distribution to the holders of its Common Stock;
(ii) the Corporation shall offer for subscription pro
rata to the holders of its Common Stock any additional shares of stock
of any class or other rights;
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(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Corporation, or a
consolidation or merger of the Corporation with, or a sale of all or
substantially all its assets to, another corporation; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Corporation,
then, in any one or more of said cases, the Corporation shall give, by first
class mail, postage prepaid, addressed to each holder of any shares of
Non-Voting Common Stock at the address of such holder as shown on the books of
the Corporation, (A) at least 20 days' prior written notice of the date on which
the books of the Corporation shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up, and (B) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, at least 20 days' prior written notice of the date
when the same shall take place. Such notice in accordance with the foregoing
clause (A) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and such notice in accordance with the foregoing clause (B)
shall also specify the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up, as the case may be.
(h) STOCK TO BE RESERVED. The Corporation will at all times
reserve and keep available out of its authorized Common Stock or its treasury
shares, solely for the purpose of issue upon the conversion of the Non-Voting
Common Stock as herein provided such number of shares of Common Stock as shall
then be issuable upon the conversion of all outstanding shares of Non-Voting
Common Stock. The Corporation covenants that all shares of Common Stock which
shall be so issued shall be duly and validly issued and fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof. The Corporation will take all such action as may be necessary to
assure that all such shares of Common Stock may be so issued without violation
of any applicable law or regulation, or of any requirements of any national
securities exchange upon which the Common Stock of the Corporation may be
listed. The Corporation will not take any action which results in any adjustment
of the number of shares of Common Stock issuable upon conversion of the
Non-Voting Common Stock if the total number of shares of Common Stock issuable
after such action and upon conversion of the Non-Voting Common Stock would
exceed the total number of shares of Common Stock then authorized by the
Corporation's Certificate of Incorporation.
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(i) NO REISSUANCE OF NON-VOTING COMMON STOCK. Shares of
Non-Voting Common Stock which are converted into shares of Common Stock as
provided herein shall not be reissued.
(j) ISSUE TAX. The issuance of certificates for shares of
Common Stock upon conversion of the Non-Voting Common Stock shall be made
without charge to the holders thereof for any issuance tax in respect thereof,
provided that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of the Non-Voting Common
Stock which is being converted.
(k) CLOSING OF BOOKS. The Corporation will at no time close
its transfer books against the transfer of any Non-Voting Common Stock or of any
shares of Common Stock issued or issuable upon the conversion of any shares of
Non-Voting Common Stock in any manner which interferes with the timely
conversion of such Non-Voting Common Stock.
(l) TRANSFER OF NON-VOTING COMMON STOCK. Any shares of
Non-Voting Common Stock that are transferred to any Person that is not included
within the WCAS Group shall immediately and automatically convert to Common
Stock, and all conditions of such conversion shall be in accordance with this
Section 4 of this Article IV.D.
(m) DEFINITIONS. Capitalized terms not otherwise defined but
used in this Article IV.D have the meanings set forth below:
"Affiliate" means with respect to any Person, any other Person,
directly or indirectly controlling, controlled by or under common control with
such Person. For the purpose of the above definition, the term "control"
(including with correlative meaning, the terms "controlling", "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the power, directly or indirectly, of the owner to direct or cause the direction
of the management and policies of such Person, whether through the ownership of
voting securities or by contract or otherwise.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"WCAS Group" means Welsh, Carson, Anderson & Stowe VII, L.P., WCAS
Healthcare Capital Partners, L.P. and Affiliates of each of the foregoing.
ARTICLE V
STOCKHOLDER ACTION
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At any time prior to the date on which the Company's registration
statement on Form S-1 filed under the Securities Act of 1933, as amended, is
declared effective by the Securities and Exchange Commission (the "IPO Date") in
connection with an initial underwritten offering to the public of its capital
stock, any action required by law, this Certificate of Incorporation or the
Bylaws of the Company to be taken at a meeting of stockholders of the Company,
may be taken without a meeting pursuant to the terms and conditions of Section
228 of the DGCL. From and after the IPO Date, any action required by law, this
Amended and Restated Certificate of Incorporation or the Bylaws of the Company
to be taken at a meeting of stockholders of the Company, may be taken without a
meeting only if a consent in writing setting forth the action so taken shall be
signed by all stockholders entitled to vote on the action.
ARTICLE VI
BOARD OF DIRECTORS
6.1. POWERS OF THE BOARD OF DIRECTORS. The business and affairs of the
Corporation shall be managed by or under the direction of its Board of
Directors. In furtherance, and not in limitation, of the powers conferred by the
laws of the State of Delaware, the Board of Directors is expressly authorized
to:
(a) adopt, amend, alter, change or repeal the Bylaws of the
Corporation as provided in and subject to Article X of this Certificate of
Incorporation
(b) determine the rights, powers, duties, rules and procedures
that affect the power of the Board of Directors to manage and direct the
business and affairs of the Corporation, including the power to designate and
empower committees of the Board of Directors, to elect, appoint and empower the
officers and other agents of the Corporation, and to determine the time and
place of, and the notice requirements for, Board meetings, as well as quorum and
voting requirements for, and the manner of taking, Board action; and
(c) exercise all such powers and do all such acts as may be
exercised or done by the Corporation, subject to the provisions of the DGCL this
Certificate of Incorporation, and the Bylaws of the Corporation.
6.2. NUMBER OF DIRECTORS. The number of directors of the Corporation
shall be not less than five (5) or more than twelve (12). The exact number of
directors shall be determined within such minimum and maximum by resolution
adopted by an affirmative vote of at least two-thirds (2/3) of the total number
of directors then in office.
6.3. CLASSIFICATION, TERMS AND ELECTION OF DIRECTORS. The directors of
the Corporation shall be divided by the Board of Directors of the Corporation
into three classes, designated Class I, Class II and Class III. Each class shall
consist, as nearly as may be possible, of one-third of the total number of
directors constituting the entire Board of Directors. At the first annual
meeting of stockholders of the Corporation after the
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Corporation completes an initial underwritten offering to the public of capital
stock of the Corporation pursuant to a registration statement on Form S-1 filed
under the Securities Act of 1933, as amended (the "First Meeting"), the initial
term of the Class I directors will expire. At the first annual meeting of
stockholders of the Corporation after the First Meeting, the initial term of the
Class II directors will expire. At the second annual meeting of stockholders of
the Corporation after the First Meeting, the initial term of the Class III
directors will expire. At each annual meeting of stockholders of the
Corporation, successors to the class of directors whose term expires at that
annual meeting shall be elected or reelected for a three-year term. Except as
provided in Section 6.5, a director shall be elected by a plurality of the votes
cast by holders of shares of the class of stock represented at the annual
meeting of stockholders at which the director stands for election and entitled
to elect such director.
If the number of directors is changed, any increase or decrease shall
be apportioned by the Board among the classes so as to maintain the number of
directors in each class as nearly equal as possible. In no case shall a decrease
in the number of directors have the effect of shortening the term of an
incumbent director.
Each director shall serve until his or her successor is elected and
qualified or until his or her earlier resignation, retirement, disqualification,
removal from office or death.
6.4 REMOVAL. The entire Board or any individual director may be removed
from office only for cause by the affirmative vote of the holders of at least a
majority of the outstanding shares of capital stock of the Corporation then
entitled to vote at an election of directors. Removal action may be taken at any
stockholders' meeting with respect to which notice of such purpose has been
given, and a removed director's successor may be elected at the same meeting to
serve the unexpired term.
6.5 VACANCIES. A vacancy occurring on the Board, however occurring,
whether by increase in the number of directors, death, resignation, retirement,
disqualification, removal from office or otherwise, may be filled, until the
next stockholder election of the class for which the director shall have been
designated by the affirmative vote of at least two-thirds (2/3rds) of the total
number of directors then remaining in office, though they may constitute less
than a quorum of the Board.
6.6 ELECTION OF DIRECTORS BY HOLDERS OF PREFERRED STOCK.
Notwithstanding any of the foregoing provisions in this Article VI, whenever the
holders of any one or more classes of preferred stock or series thereof issued
by the Corporation shall have the right, voting separately by class or series,
to elect directors at an annual or special meeting of stockholders, the number
of such directors, and the election, term of office, filling of vacancies and
other features of each such directorship, shall be governed by the terms of this
Certificate of Incorporation and any Preferred Stock Designation applicable
thereto, except that such directors so elected shall not be divided into classes
pursuant to this Article VI.
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6.7 AMENDMENT OR REPEAL. Notwithstanding any other provisions of this
Certificate of Incorporation or the Bylaws of the Corporation or any provision
of any law which might otherwise permit a lesser vote or no vote, but in
addition to any affirmative vote of the holders of any particular class or
series of capital stock of the Corporation required by law, this Certificate of
Incorporation or any Preferred Stock Designation, the provisions set forth in
this Article VI may not be repealed or amended in any respect unless such action
is approved by the affirmative vote of the holders of not less than two-thirds
(2/3rds) of the outstanding shares of the capital stock of the Corporation then
entitled to vote at an election of directors.
ARTICLE VII
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the right at any time and from time to time to
amend, alter, change or repeal any provisions contained in this Certificate of
Incorporation. Any such amendment, alteration, change or repeal shall require
the affirmative vote of both (a) a majority of the members of the Board then in
office and (b) a majority of the voting power of all of the outstanding shares
of capital stock of the Company then entitled to vote at an election of
directors. Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of not less
than two-thirds (2/3rds) of all of the outstanding shares of capital stock of
the Company then entitled to vote at an election of directors shall be required
to alter, amend, adopt any provision inconsistent with or repeal Article V, VI,
VIII or this sentence.
ARTICLE VIII
INDEMNIFICATION
8.1 RIGHT TO INDEMNIFICATION. Each person who was or is made a party or
is threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact:
(a) that he or she is or was a director or officer of the
Corporation, or
(b) that he or she, being at the time a director or officer of
the Corporation, is or was serving at the request of the Corporation as a
director, trustee, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (collectively, "another enterprise" or
"other enterprise"), whether either in case (a) or in case (b) the basis of such
proceeding is alleged action or inaction (x) in an official capacity as a
director or officer of the Corporation, or as a director, trustee, officer,
employee or agent of such other enterprise, or (y) in any other capacity related
to the Corporation or such other enterprise while so serving as a director,
trustee, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent not prohibited by Section 145 of the DGCL
(or any successor provision or
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provisions) as the same exists or may hereafter be amended (but, in the case of
any such amendment, with respect to alleged action or inaction occurring prior
to such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than permitted prior
thereto), against all expense, liability and loss (including without limitation
attorneys' fees and expenses, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by such person
in connection therewith. The persons indemnified by this Article VIII are
hereinafter referred to as "indemnitees." Such indemnification as to such
alleged action or inaction shall continue as to an indemnitee who has after such
alleged action or inaction ceased to be a director or officer of the
Corporation, or director, officer, employee or agent of such other enterprise,
and shall inure to the benefit of the indemnitee's heirs, executors and
administrators. Notwithstanding the foregoing, except as may be provided in the
Bylaws of the Corporation or by the Board, the Corporation shall not indemnify
any such indemnitee in connection with a proceeding (or portion thereof)
initiated by such indemnitee (but this prohibition shall not apply to a
counterclaim, cross-claim or third-party claim brought by the indemnitee in any
proceeding) unless such proceeding (or portion thereof) was authorized by the
Board. The right to indemnification conferred in this Article VIII: (i) shall be
a contract right; (ii) shall not be affected adversely to any indemnitee by any
amendment of this Certificate of Incorporation with respect to any alleged
action or inaction occurring prior to such amendment; and (iii) shall, subject
to any requirements imposed by law and the Bylaws of the Corporation, include
the right to be paid by the Corporation the expenses incurred in defending any
such proceeding in advance of its final disposition.
8.2 RELATIONSHIP TO OTHER RIGHTS AND PROVISIONS CONCERNING
INDEMNIFICATION. The rights to indemnification and to the advancement of
expenses conferred in this Article VIII shall not be exclusive of any other
right which any person may have or hereafter acquire under this Certificate of
Incorporation, or any statute, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise. The Bylaws of the Corporation may contain
such other provisions concerning indemnification, including provisions
specifying reasonable procedures relating to and conditions to the receipt by
indemnitees of indemnification, provided that such provisions are not
inconsistent with the provisions of this Article VIII.
8.3 AGENTS AND EMPLOYEES. The Corporation may, to the extent authorized
from time to time by the Board, grant rights to indemnification, and to the
advancement of expenses, to any employee or agent of the Corporation (or any
person serving at the Corporation's request as a director, trustee, officer,
employee or agent of another enterprise) or to any person who is or was a
director, officer, employee or agent of any of the Corporation's affiliates,
predecessor or subsidiary corporations or a constituent corporation absorbed by
the Corporation in a consolidation or merger or who is or was serving at the
request of such affiliate, predecessor or subsidiary corporation or of such
constituent corporation as a director, officer, employee or agent of another
enterprise, in each case as determined by the Board to the fullest extent of the
provisions of this Article VIII in cases of the indemnification and advancement
of expenses of directors
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and officers of the Corporation, or to any lesser extent (or greater extent, if
permitted by law) determined by the Board.
ARTICLE IX
LIMITED LIABILITY
No person shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
PROVIDED, HOWEVER, that the foregoing shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit. If the DGCL is subsequently amended to
further eliminate or limit the liability of a director, then a director of the
Corporation, in addition to the circumstances in which a director is not
personally liable as set forth in the preceding sentence, shall not be liable to
the fullest extent permitted by the amended DGCL. For purposes of this Article
IX, "fiduciary duty as a director" shall include any fiduciary duty arising out
of serving at the Corporation's request as a director of another corporation,
partnership, joint venture or other enterprise, and "personal liability to the
Corporation or its stockholders" shall include any liability to such other
corporation, partnership, joint venture, trust or other enterprise, and any
liability to the corporation in its capacity as a security holder, joint
venturer, partner, beneficiary, creditor or investor of or in any such other
corporation, partnership, joint venture, trust or other enterprise.
ARTICLE X
BYLAWS
The Bylaws may be amended, altered, or changed or repealed and new
Bylaws may be adopted (1) at any annual or special meeting of stockholders by
the affirmative vote of the holders of a majority of the voting power of the
stock issued and outstanding and entitled to vote thereat, provided, however,
that any proposed amendment, alteration, change or repeal of, or the adoption of
any Bylaw by such vote of the stockholders that is inconsistent with, Sections
3, 4, 11 or 12 of Article II or Section 3 of Article III of the Bylaws shall
require the affirmative vote of the holders of not less than two-thirds (2/3rds)
of the voting power of all of the capital stock then outstanding, and provided,
further, however, that, in the case of any such stockholder action at a special
meeting of stockholders, notice of the proposed amendment, alteration, change,
repeal or adoption of the new Bylaw or Bylaws must be contained in the notice of
such special meeting, or (2) by the affirmative vote of a majority of the Board
of Directors; PROVIDED, HOWEVER, that the stockholders entitled to vote may
prescribe that any Bylaw adopted by the stockholders may not be amended,
altered, changed or repealed by the Board of Directors; and PROVIDED, FURTHER,
that no Bylaws hereafter adopted shall invalidate any prior act of the directors
that would have been valid if such new Bylaws had not been adopted.
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IN WITNESS WHEREOF, the undersigned does execute this Amended
and Restated Certificate, this 12 day of April, 1999 on behalf of the
Corporation.
By: /s/ Thomas W. Bell, Jr.
----------------------------------
Title: Senior Vice President and Secretary
-----------------------------------
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Exhibit 10.6
ACCREDO HEALTH, INCORPORATED
1999 LONG-TERM INCENTIVE PLAN
ARTICLE I
PURPOSE
1.1 GENERAL. The purpose of the Accredo Health, Incorporated 1999
Long-Term Incentive Plan (the "Plan") is to promote the success, and enhance the
value, of Accredo Health, Incorporated (the "Corporation"), by linking the
personal interests of its employees, officers, consultants and directors to
those of Corporation stockholders and by providing such persons with an
incentive for outstanding performance. The Plan is further intended to provide
flexibility to the Corporation in its ability to motivate, attract, and retain
the services of employees, officers, consultants and directors upon whose
judgment, interest, and special effort the successful conduct of the
Corporation's operation is largely dependent. Accordingly, the Plan permits the
grant of incentive awards from time to time to selected employees, officers,
directors, and consultants; provided, however, to the extent necessary to
preserve the employee benefits plan exemption under applicable state blue sky
laws, no non-employee director or consultant of the Corporation will be eligible
to receive Awards under the Plan until such time, if any, as the Corporation's
common stock shall be traded on a national securities exchange or on the Nasdaq
National Market.
ARTICLE 2
EFFECTIVE DATE
2.1 EFFECTIVE DATE. The Plan shall be effective as of the date upon
which it shall be approved by the Board. However, the Plan shall be submitted to
the stockholders of the Corporation for approval within 12 months of the Board's
approval thereof. No Incentive Stock Options granted under the Plan may be
exercised prior to approval of the Plan by the stockholders and if the
stockholders fail to approve the Plan within 12 months of the Board's approval
thereof, any Incentive Stock Options previously granted hereunder shall be
automatically converted to Non-Qualified Stock Options without any further act.
In the discretion of the Committee, Awards may be made to Covered Employees
which are intended to constitute qualified performance-based compensation under
Code Section 162(m). Any such Awards shall be contingent upon the stockholders
having approved the Plan.
ARTICLE 3
DEFINITIONS
3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Section
<PAGE>
1.1 unless a clearly different meaning is required by the context. The following
words and phrases shall have the following meanings:
(a) "Award" means any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Unit Award, Dividend Equivalent
Award, or Other Stock-Based Award, or any other right or interest
relating to Stock or cash, granted to a Participant under the Plan.
(b) "Award Agreement" means any written agreement, contract,
or other instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Change in Control" means and includes each of the
following:
(1) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the 1934 Act) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of 25%
or more of the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote
generally in the election of directors (the "Outstanding
Corporation Voting Securities"); provided, however, that for
purposes of this subsection (1), the following acquisitions
shall not constitute a Change of Control: (i) any acquisition
by a Person who is on the Effective Date the beneficial owner
of 25% or more of the Outstanding Corporation Voting
Securities, (ii) any acquisition directly from the
Corporation, (iii) any acquisition by the Corporation, (iv)
any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation, or (v) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of
this definition; or
(2) Individuals who, as of the Effective Date,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or nomination
for election by the Corporation's stockholders, was approved
by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
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(3) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation (a
"Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners of the
Outstanding Corporation Voting Securities immediately prior to
such Business Combination beneficially own, directly or
indirectly, more than 50% of the combined voting power of the
then outstanding voting securities entitled to vote generally
in the election of directors of the corporation resulting from
such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation's
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination of the
Outstanding Corporation Voting Securities, and (ii) no Person
(excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of
the Corporation or such corporation resulting from such
Business Combination) beneficially owns, directly or
indirectly, 25% or more of the combined voting power of the
then outstanding voting securities of such corporation except
to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the
members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business
Combination; or
(4) Approval by the stockholders of the Corporation
of a complete liquidation or dissolution of the Corporation.
(e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(f) "Committee" means the committee of the Board described in
Article 4.
(g) "Corporation" means Accredo Health, Incorporated, a
Delaware corporation.
(h) "Covered Employee" means a covered employee as defined in
Code Section 162(m)(3), provided that no employee shall be a Covered
Employee until the deduction limitation of Code Section 162(m) are
applicable to the Corporation and any reliance period under Code
Section 162(m) has expired, as described in Section 16.15 hereof.
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(i) "Disability" shall mean any illness or other physical or
mental condition of a Participant that renders the Participant
incapable of performing his customary and usual duties for the
Corporation, or any medically determinable illness or other physical or
mental condition resulting from a bodily injury, disease or mental
disorder which, in the judgment of the Committee, is permanent and
continuous in nature. The Committee may require such medical or other
evidence as it deems necessary to judge the nature and permanency of
the Participant's condition. Notwithstanding the above, with respect to
an Incentive Stock Option, Disability shall mean Permanent and Total
Disability as defined in Section 22(e)(3) of the Code.
(j) "Dividend Equivalent" means a right granted to a
Participant under Article 11.
(k) "Effective Date" has the meaning assigned such term in
Section 2.1.
(l) "Fair Market Value", on any date, means (i) if the Stock
is listed on a securities exchange or is traded over the Nasdaq
National Market, the closing sales price on such exchange or over such
system on such date or, in the absence of reported sales on such date,
the closing sales price on the immediately preceding date on which
sales were reported, or (ii) if the Stock is not listed on a securities
exchange or traded over the Nasdaq National Market, the mean between
the bid and offered prices as quoted by Nasdaq for such date, provided
that if it is determined that the fair market value is not properly
reflected by such Nasdaq quotations, Fair Market Value will be
determined by such other method as the Committee determines in good
faith to be reasonable.
(m) "Incentive Stock Option" means an Option that is intended
to meet the requirements of Section 422 of the Code or any successor
provision thereto.
(n) "Non-Qualified Stock Option" means an Option that is not
an Incentive Stock Option.
(o) "Option" means a right granted to a Participant under
Article 7 of the Plan to purchase Stock at a specified price during
specified time periods. An Option may be either an Incentive Stock
Option or a Non-Qualified Stock Option.
(p) "Other Stock-Based Award" means a right, granted to a
Participant under Article 12, that relates to or is valued by reference
to Stock or other Awards relating to Stock.
(q) "Parent" means a corporation which owns or beneficially
owns a majority of the outstanding voting stock or voting power of the
Corporation. For
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Incentive Stock Options, the term shall have the same meaning as set
forth in Code Section 424(e).
(r) "Participant" means a person who, as an employee, officer,
consultant or director of the Corporation or any Subsidiary, has been
granted an Award under the Plan.
(s) "Performance Unit" means a right granted to a Participant
under Article 9, to receive cash, Stock, or other Awards, the payment
of which is contingent upon achieving certain performance goals
established by the Committee.
(t) "Plan" means the Accredo Health, Incorporated 1999
Long-Term Incentive Plan, as amended from time to time.
(u) "Restricted Stock Award" means Stock granted to a
Participant under Article 10 that is subject to certain restrictions
and to risk of forfeiture.
(v) "Retirement" means a Participant's voluntary termination
of employment with the Corporation, Parent or Subsidiary after
attaining age 55.
(w) "Stock" means the $.01 par value common stock of the
Corporation and such other securities of the Corporation as may be
substituted for Stock pursuant to Article 14.
(x) "Stock Appreciation Right" or "SAR" means a right granted
to a Participant under Article 8 to receive a payment equal to the
difference between the Fair Market Value of a share of Stock as of the
date of exercise of the SAR over the grant price of the SAR, all as
determined pursuant to Article 8.
(y) "Subsidiary" means any corporation, limited liability
company, partnership or other entity of which a majority of the
outstanding voting stock or voting power is beneficially owned directly
or indirectly by the Corporation. For Incentive Stock Options, the term
shall have the meaning set forth in Code Section 424(f).
(z) "1933 Act" means the Securities Act of 1933, as amended
from time to time.
(z) "1934 Act" means the Securities Exchange Act of 1934, as
amended from time to time.
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ARTICLE 4
ADMINISTRATION
4.1 COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board or, at the discretion of the Board from time to time, by
the Board. The Committee shall consist of two or more members of the Board. It
is intended that the directors appointed to serve on the Committee shall be
"non-employee directors" (within the meaning of Rule 16b-3 promulgated under the
1934 Act) and "outside directors" (within the meaning of Code Section 162(m) and
the regulations thereunder) to the extent that Rule 16b-3 and, if necessary for
relief from the limitation under Code Section 162(m) and such relief is sought
by the Corporation, Code Section 162(m), respectively, are applicable. However,
the mere fact that a Committee member shall fail to qualify under either of the
foregoing requirements shall not invalidate any Award made by the Committee
which Award is otherwise validly made under the Plan. The members of the
Committee shall be appointed by, and may be changed at any time and from time to
time in the discretion of, the Board. During any time that the Board is acting
as administrator of the Plan, it shall have all the powers of the Committee
hereunder, and any reference herein to the Committee (other than in this Section
4.1) shall include the Board.
4.2 ACTION BY THE COMMITTEE. For purposes of administering the Plan,
the following rules of procedure shall govern the Committee. A majority of the
Committee shall constitute a quorum. The acts of a majority of the members
present at any meeting at which a quorum is present, and acts approved
unanimously in writing by the members of the Committee in lieu of a meeting,
shall be deemed the acts of the Committee. Each member of the Committee is
entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Corporation or
any Parent or Subsidiary, the Corporation's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Corporation to assist in the administration of the Plan.
4.3 AUTHORITY OF COMMITTEE. The Committee has the exclusive power,
authority and discretion to:
(a) Designate Participants;
(b) Determine the type or types of Awards to be granted to
each Participant;
(c) Determine the number of Awards to be granted and the
number of shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award granted
under the Plan, including but not limited to, the exercise price, grant
price, or purchase price, any restrictions or limitations on the Award,
any schedule for lapse of
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forfeiture restrictions or restrictions on the exercisability of an
Award, and accelerations or waivers thereof, based in each case on such
considerations as the Committee in its sole discretion determines;
(e) Accelerate the vesting or lapse of restrictions of any
outstanding Award, based in each case on such considerations as the
Committee in its sole discretion determines;
(f) Determine whether, to what extent, and under what
circumstances an Award may be settled in, or the exercise price of an
Award may be paid in, cash, Stock, other Awards, or other property, or
an Award may be canceled, forfeited, or surrendered;
(g) Prescribe the form of each Award Agreement, which need not
be identical for each Participant;
(h) Decide all other matters that must be determined in
connection with an Award;
(i) Establish, adopt or revise any rules and regulations as it
may deem necessary or advisable to administer the Plan;
(j) Make all other decisions and determinations that may be
required under the Plan or as the Committee deems necessary or
advisable to administer the Plan; and
(k) Amend the Plan or any Award Agreement as provided herein.
4.4. DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1. NUMBER OF SHARES. Subject to adjustment as provided in Section
14.1, the aggregate number of shares of Stock reserved and available for Awards
or which may be used to provide a basis of measurement for or to determine the
value of an Award (such as with a Stock Appreciation Right or Performance Unit
Award) shall be 500,000, of which not more than 10% may be granted as Awards of
Restricted Stock or unrestricted Stock Awards.
5.2. LAPSED AWARDS. To the extent that an Award is canceled,
terminates, expires or lapses for any reason, any shares of Stock subject to the
Award will again be
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available for the grant of an Award under the Plan and shares subject to SARs or
other Awards settled in cash will be available for the grant of an Award under
the Plan.
5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
5.4. LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to
the contrary (but subject to adjustment as provided in Section 14.1), the
maximum number of shares of Stock with respect to one or more Options and/or
SARs that may be granted during any one calendar year under the Plan to any one
Participant shall be 500,000. The maximum fair market value (measured as of the
date of grant) of any Awards other than Options and SARs that may be received by
any one Participant (less any consideration paid by the Participant for such
Award) during any one calendar year under the Plan shall be $2,000,000.
ARTICLE 6
ELIGIBILITY
6.1. GENERAL. Awards may be granted only to individuals who are
employees, officers, consultants or directors of the Corporation or a Parent or
Subsidiary; provided, however, that to the extent necessary to preserve the
employee benefits plan exemption under applicable state blue sky laws, no
non-employee director or consultant of the Corporation will be eligible to
receive Awards under the Plan until such time, if any, as the Corporation's
common stock shall be traded on a national securities exchange or on the Nasdaq
National Market.
ARTICLE 7
STOCK OPTIONS
7.1. GENERAL. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(a) EXERCISE PRICE. The exercise price per share of Stock
under an Option shall be determined by the Committee, provided that the
exercise price for any Option shall not be less than the Fair Market
Value as of the date of the grant.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part. The Committee also shall determine the performance or
other conditions, if any, that must be satisfied before all or part of
an Option may be exercised. The Committee may waive any exercise
provisions at any time in whole or in part based upon factors as the
Committee may determine in its sole discretion so that the Option
becomes exerciseable at an earlier date.
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(c) PAYMENT. The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, shares of Stock, or other property
(including "cashless exercise" arrangements), and the methods by which
shares of Stock shall be delivered or deemed to be delivered to
Participants; provided that if shares of Stock surrendered in payment
of the exercise price were themselves acquired otherwise than on the
open market, such shares shall have been held by the Participant for at
least six months.
(d) EVIDENCE OF GRANT. All Options shall be evidenced by a
written Award Agreement between the Corporation and the Participant.
The Award Agreement shall include such provisions, not inconsistent
with the Plan, as may be specified by the Committee.
(e) ADDITIONAL OPTIONS UPON EXERCISE. The Committee may, in
its sole discretion, provide in an Award Agreement, or in an amendment
thereto, for the automatic grant of a new Option to any Participant who
delivers shares of Stock as full or partial payment of the exercise
price of the original Option. Any new Option granted in such a case (i)
shall be for the same number of shares of Stock as the Participant
delivered in exercising the original Option, (ii) shall have an
exercise price of 100% of the Fair Market Value of the surrendered
shares of Stock on the date of exercise of the original Option (the
grant date for the new Option), and (iii) shall have a term equal to
the unexpired term of the original Option.
7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options
granted under the Plan must comply with the following additional rules:
(a) EXERCISE PRICE. The exercise price per share of Stock
shall be set by the Committee, provided that the exercise price for any
Incentive Stock Option shall not be less than the Fair Market Value as
of the date of the grant.
(b) EXERCISE. In no event may any Incentive Stock Option be
exercisable for more than ten years from the date of its grant.
(c) LAPSE OF OPTION. An Incentive Stock Option shall lapse
under the earliest of the following circumstances; provided, however,
that the Committee may, prior to the lapse of the Incentive Stock
Option under the circumstances described in paragraphs (3), (4) and (5)
below, provide in writing that the Option will extend until a later
date, but if the Option is exercised after the dates specified in
paragraphs (3), (4) and (5) below, it will automatically become a
Non-Qualified Stock Option:
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(1) The Incentive Stock Option shall lapse as of the
option expiration date set forth in the Award Agreement.
(2) The Incentive Stock Option shall lapse ten years
after it is granted, unless an earlier time is set in the
Award Agreement.
(3) If the Participant terminates employment for any
reason other than as provided in paragraph (4) or (5) below,
the Incentive Stock Option shall lapse, unless it is
previously exercised, three months after the Participant's
termination of employment; provided, however, that if the
Participant's employment is terminated by the Corporation for
cause or by the Participant without the consent of the
Corporation, the Incentive Stock Option shall (to the extent
not previously exercised) lapse immediately.
(4) If the Participant terminates employment by
reason of his Disability, the Incentive Stock Option shall
lapse, unless it is previously exercised, one year after the
Participant's termination of employment.
(5) If the Participant dies while employed, or during
the three-month period described in paragraph (3) or during
the one-year period described in paragraph (4) and before the
Option otherwise lapses, the Option shall lapse one year after
the Participant's death. Upon the Participant's death, any
exercisable Incentive Stock Options may be exercised by the
Participant's estate.
Unless the exercisability of the Incentive Stock Option is
accelerated as provided in Article 13, if a Participant exercises an
Option after termination of employment, the Option may be exercised
only with respect to the shares that were otherwise vested on the
Participant's termination of employment.
(d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market
Value (determined as of the time an Award is made) of all shares of
Stock with respect to which Incentive Stock Options are first
exercisable by a Participant in any calendar year may not exceed
$100,000.00.
(e) TEN PERCENT OWNERS. No Incentive Stock Option shall be
granted to any individual who, at the date of grant, owns stock
possessing more than ten percent of the total combined voting power of
all classes of stock of the Corporation or any Parent or Subsidiary
unless the exercise price per share of such Option is at least 110% of
the Fair Market Value per share of Stock at the date of grant and the
Option expires no later than five years after the date of grant.
(f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an
Incentive Stock Option may be made pursuant to the Plan after the day
immediately prior to the tenth anniversary of the Effective Date.
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(g) RIGHT TO EXERCISE. During a Participant's lifetime, an
Incentive Stock Option may be exercised only by the Participant or, in
the case of the Participant's Disability, by the Participant's guardian
or legal representative.
(h) DIRECTORS. The Committee may not grant an Incentive Stock
Option to a non-employee director. The Committee may grant an Incentive
Stock Option to a director who is also an employee of the Corporation
or Parent or Subsidiary but only in that individual's position as an
employee and not as a director.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1. GRANT OF SARS. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(a) RIGHT TO PAYMENT. Upon the exercise of a Stock
Appreciation Right, the Participant to whom it is granted has the right
to receive the excess, if any, of:
(1) The Fair Market Value of one share of Stock on
the date of exercise; over
(2) The grant price of the Stock Appreciation Right as
determined by the Committee, which shall not be less than the
Fair Market Value of one share of Stock on the date of grant.
(b) OTHER TERMS. All awards of Stock Appreciation Rights shall
be evidenced by an Award Agreement. The terms, methods of exercise,
methods of settlement, form of consideration payable in settlement, and
any other terms and conditions of any Stock Appreciation Right shall be
determined by the Committee at the time of the grant of the Award and
shall be reflected in the Award Agreement.
ARTICLE 9
PERFORMANCE UNITS
9.1. GRANT OF PERFORMANCE UNITS. The Committee is authorized to grant
Performance Units to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Units granted to each Participant. All
Awards of Performance Units shall be evidenced by an Award Agreement.
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9.2. RIGHT TO PAYMENT. A grant of Performance Units gives the
Participant rights, valued as determined by the Committee, and payable to, or
exercisable by, the Participant to whom the Performance Units are granted, in
whole or in part, as the Committee shall establish at grant or thereafter. The
Committee shall set performance goals and other terms or conditions to payment
of the Performance Units in its discretion which, depending on the extent to
which they are met, will determine the number and value of Performance Units
that will be paid to the Participant.
9.3. OTHER TERMS. Performance Units may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.
ARTICLE 10
RESTRICTED STOCK AWARDS
10.1. GRANT OF RESTRICTED STOCK. The Committee is authorized to make
Awards of Restricted Stock to Participants in such amounts and subject to such
terms and conditions as may be selected by the Committee. All Awards of
Restricted Stock shall be evidenced by a Restricted Stock Award Agreement.
10.2. ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance
goals or otherwise, as the Committee determines at the time of the grant of the
Award or thereafter.
10.3. FORFEITURE. Except as otherwise determined by the Committee at
the time of the grant of the Award or thereafter, upon termination of employment
during the applicable restriction period or upon failure to satisfy a
performance goal during the applicable restriction period, Restricted Stock that
is at that time subject to restrictions shall be forfeited and reacquired by the
Corporation; provided, however, that the Committee may provide in any Award
Agreement that restrictions or forfeiture conditions relating to Restricted
Stock will be waived in whole or in part in the event of terminations resulting
from specified causes, and the Committee may in other cases waive in whole or in
part restrictions or forfeiture conditions relating to Restricted Stock.
10.4. CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock.
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ARTICLE 11
DIVIDEND EQUIVALENTS
11.1 GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to
grant Dividend Equivalents to Participants subject to such terms and conditions
as may be selected by the Committee. Dividend Equivalents shall entitle the
Participant to receive payments equal to dividends with respect to all or a
portion of the number of shares of Stock subject to an Award, as determined by
the Committee. The Committee may provide that Dividend Equivalents be paid or
distributed when accrued or be deemed to have been reinvested in additional
shares of Stock, or otherwise reinvested.
ARTICLE 12
OTHER STOCK-BASED AWARDS
12.1. GRANT OF OTHER STOCK-BASED AWARDS. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such other
Awards that are payable in, valued in whole or in part by reference to, or
otherwise based on or related to shares of Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including without limitation shares
of Stock awarded purely as a "bonus" and not subject to any restrictions or
conditions, convertible or exchangeable debt securities, other rights
convertible or exchangeable into shares of Stock, and Awards valued by reference
to book value of shares of Stock or the value of securities of or the
performance of specified Parents or Subsidiaries. The Committee shall determine
the terms and conditions of such Awards.
ARTICLE 13
PROVISIONS APPLICABLE TO AWARDS
13.1. STAND-ALONE, TANDEM, AND SUBSTITUTE AWARDS. Awards granted under
the Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for, any other Award granted
under the Plan. If an Award is granted in substitution for another Award, the
Committee may require the surrender of such other Award in consideration of the
grant of the new Award. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.
13.2. EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Stock,
or another Award (subject to Section 14.1), based on the terms and conditions
the Committee determines and communicates to the Participant at the time the
offer is made and after taking into account the tax, securities and accounting
effects of such an exchange.
13.3. TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive
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Stock Option or a Stock Appreciation Right granted in tandem with the Incentive
Stock Option exceed a period of ten years from the date of its grant (or, if
Section 7.2(e) applies, five years from the date of its grant).
13.4. FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and
any applicable law or Award Agreement, payments or transfers to be made by the
Corporation or a Parent or Subsidiary on the grant or exercise of an Award may
be made in such form as the Committee determines at or after the time of grant,
including without limitation, cash, Stock, other Awards, or other property, or
any combination, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case determined in accordance with
rules adopted by, and at the discretion of, the Committee.
13.5. LIMITS ON TRANSFER. No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated to
or in favor of any party other than the Corporation or a Parent or Subsidiary,
or shall be subject to any lien, obligation, or liability of such Participant to
any other party other than the Corporation or a Parent or Subsidiary. No
unexercised or restricted Award shall be assignable or transferable by a
Participant other than by will or the laws of descent and distribution or,
except in the case of an Incentive Stock Option, pursuant to a domestic
relations order that would satisfy Section 414(p)(1)(A) of the Code if such
Section applied to an Award under the Plan; provided, however, that the
Committee may (but need not) permit other transfers where the Committee
concludes that such transferability (i) does not result in accelerated taxation,
(ii) does not cause any Option intended to be an incentive stock option to fail
to be described in Code Section 422(b), and (iii) is otherwise appropriate and
desirable, taking into account any factors deemed relevant, including without
limitation, any state or federal tax or securities laws or regulations
applicable to transferable Awards.
13.6. STOCK CERTIFICATES. All Stock certificates delivered under the
Plan are subject to any stop-transfer orders and other restrictions as the
Committee deems necessary or advisable to comply with federal or state
securities laws, rules and regulations and the rules of any national securities
exchange or automated quotation system on which the Stock is listed, quoted, or
traded. The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock.
13.7 ACCELERATION UPON DEATH, RETIREMENT OR DISABILITY. Notwithstanding
any other provision in the Plan or any Participant's Award Agreement to the
contrary, upon the Participant's death, Retirement or Disability during his
employment or service as a consultant or director, all outstanding Options,
Stock Appreciation Rights, and other Awards in the nature of rights that may be
exercised shall become fully exercisable and all restrictions on outstanding
Awards shall lapse. Any Option or Stock Appreciation Rights Awards shall
thereafter continue or lapse in accordance with the other provisions of the Plan
and the Award Agreement. To the extent that this provision causes Incentive
Stock Options to exceed the dollar limitation set forth in Section 7.2(d), the
excess Options shall be deemed to be Non-Qualified Stock Options.
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13.8. ACCELERATION UPON A CHANGE IN CONTROL. Except as otherwise
provided in the Award Agreement, upon the occurrence of a Change in Control, all
outstanding Options, Stock Appreciation Rights, and other Awards in the nature
of rights that may be exercised shall become fully exercisable and all
restrictions on outstanding Awards shall lapse; provided, however that such
acceleration will not occur if, in the opinion of the Corporation's accountants,
such acceleration would preclude the use of "pooling of interest" accounting
treatment for a Change in Control transaction that (a) would otherwise qualify
for such accounting treatment, and (b) is contingent upon qualifying for such
accounting treatment. To the extent that this provision causes Incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(d), the excess
Options shall be deemed to be Non-Qualified Stock Options.
13.9. ACCELERATION UPON CERTAIN EVENTS NOT CONSTITUTING A CHANGE IN
CONTROL. In the event of the occurrence of any circumstance, transaction or
event not constituting a Change in Control (as defined in Section 3.1) but which
the Board of Directors deems to be, or to be reasonably likely to lead to, an
effective change in control of the Corporation of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of the 1934
Act, the Committee may in its sole discretion declare all outstanding Options,
Stock Appreciation Rights, and other Awards in the nature of rights that may be
exercised to be fully exercisable, and/or all restrictions on all outstanding
Awards to have lapsed, in each case, as of such date as the Committee may, in
its sole discretion, declare, which may be on or before the consummation of such
transaction or event. To the extent that this provision causes Incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(d), the excess
Options shall be deemed to be Non-Qualified Stock Options.
13.10. ACCELERATION FOR ANY OTHER REASON. Regardless of whether an
event has occurred as described in Section 13.8 or 13.9 above, the Committee may
in its sole discretion at any time determine that all or a portion of a
Participant's Options, Stock Appreciation Rights, and other Awards in the nature
of rights that may be exercised shall become fully or partially exercisable,
and/or that all or a part of the restrictions on all or a portion of the
outstanding Awards shall lapse, in each case, as of such date as the Committee
may, in its sole discretion, declare. The Committee may discriminate among
Participants and among Awards granted to a Participant in exercising its
discretion pursuant to this Section 13.10.
13.11 EFFECT OF ACCELERATION. If an Award is accelerated under Section
13.8 or 13.9, the Committee may, in its sole discretion, provide (i) that the
Award will expire after a designated period of time after such acceleration to
the extent not then exercised, (ii) that the Award will be settled in cash
rather than Stock, (iii) that the Award will be assumed by another party to the
transaction giving rise to the acceleration or otherwise be equitably converted
in connection with such transaction, or (iv) any combination of the foregoing.
The Committee's determination need not be uniform and
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may be different for different Participants whether or not such Participants are
similarly situated.
13.12. PERFORMANCE GOALS. The Committee may (but need not) determine
that any Award granted pursuant to this Plan to a Participant (including, but
not limited to, Participants who are Covered Employees) shall be determined
solely on the basis of (a) the achievement by the Corporation or a Parent or
Subsidiary of a specified target return, or target growth in return, on equity
or assets, (b) the Company's total shareholder return (stock price appreciation
plus reinvested dividends) relative to a defined comparison group or target over
a specific performance period, (c) the Corporation's, Parent's or Subsidiary's
stock price, (d) the achievement by an individual or a business unit of the
Corporation, Parent or Subsidiary of a specified target, or target growth in,
revenues, net income or earnings per share, (e) the achievement of objectively
determinable goals with respect to service or product delivery, service or
product quality, customer satisfaction, meeting budgets and/or retention of
employees or (f) any combination of the goals set forth in (a) through (e)
above. If an Award is made on such basis, the Committee shall establish goals
prior to the beginning of the period for which such performance goal relates (or
such later date as may be permitted under Code Section 162(m) or the regulations
thereunder) and the Committee may for any reason reduce (but not increase) any
Award, notwithstanding the achievement of a specified goal. Any payment of an
Award granted with performance goals shall be conditioned on the written
certification of the Committee in each case that the performance goals and any
other material conditions were satisfied.
13.13. TERMINATION OF EMPLOYMENT. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A termination of
employment shall not occur in a circumstance in which a Participant transfers
from the Corporation to one of its Parents or Subsidiaries, transfers from a
Parent or Subsidiary to the Corporation, or transfers from one Parent or
Subsidiary to another Parent or Subsidiary.
ARTICLE 14
CHANGES IN CAPITAL STRUCTURE
14.1. GENERAL. In the event a stock dividend is declared upon the
Stock, the authorization limits under Section 5.1 and 5.4 shall be increased
proportionately, and the shares of Stock then subject to each Award shall be
increased proportionately without any change in the aggregate purchase price
therefor. In the event the Stock shall be changed into or exchanged for a
different number or class of shares of stock or securities of the Corporation or
of another corporation, whether through reorganization, recapitalization,
reclassification, share exchange, stock split-up, combination of shares, merger
or consolidation, the authorization limits under Section 5.1 and 5.4 shall be
increased proportionately, and there shall be substituted for each such share of
Stock then subject to each Award the number and class of shares into which each
outstanding share of Stock
-16-
<PAGE>
shall be so exchanged, all without any change in the aggregate purchase price
for the shares then subject to each Award, or, subject to Section 15.2, there
shall be made such other equitable adjustment as the Committee shall approve.
ARTICLE 15
AMENDMENT, MODIFICATION AND TERMINATION
15.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board or the
Committee may, at any time and from time to time, amend, modify or terminate the
Plan without stockholder approval; provided, however, that the Board or
Committee may condition any amendment or modification on the approval of
stockholders of the Corporation if such approval is necessary or deemed
advisable with respect to tax, securities or other applicable laws, policies or
regulations.
15.2 AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however, that, subject to the terms of the
applicable Award Agreement, such amendment, modification or termination shall
not, without the Participant's consent, reduce or diminish the value of such
Award determined as if the Award had been exercised, vested, cashed in or
otherwise settled on the date of such amendment or termination. No termination,
amendment, or modification of the Plan shall adversely affect any Award
previously granted under the Plan, without the written consent of the
Participant.
ARTICLE 16
GENERAL PROVISIONS
16.1. NO RIGHTS TO AWARDS. No Participant or any eligible participant
shall have any claim to be granted any Award under the Plan, and neither the
Corporation nor the Committee is obligated to treat Participants or eligible
participants uniformly.
16.2. NO STOCKHOLDER RIGHTS. No Award gives the Participant any of the
rights of a stockholder of the Corporation unless and until shares of Stock are
in fact issued to such person in connection with such Award.
16.3. WITHHOLDING. The Corporation or any Parent or Subsidiary shall
have the authority and the right to deduct or withhold, or require a Participant
to remit to the Corporation, an amount sufficient to satisfy federal, state, and
local taxes (including the Participant's FICA obligation) required by law to be
withheld with respect to any taxable event arising as a result of the Plan. With
respect to withholding required upon any taxable event under the Plan, the
Committee may, at the time the Award is granted or thereafter, require that any
such withholding requirement be satisfied, in whole or in part, by withholding
shares of Stock having a Fair Market Value on the date of withholding equal to
the amount required to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes.
-17-
<PAGE>
16.4. NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the right of the Corporation
or any Parent or Subsidiary to terminate any Participant's employment or status
as an officer, director or consultant at any time, nor confer upon any
Participant any right to continue as an employee, officer, director or
consultant of the Corporation or any Parent or Subsidiary.
l6.5. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award Agreement shall give the Participant any rights that
are greater than those of a general creditor of the Corporation or any Parent or
Subsidiary.
16.6. INDEMNIFICATION. To the extent allowable under applicable law,
each member of the Committee shall be indemnified and held harmless by the
Corporation from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by such member in connection with or resulting from any
claim, action, suit, or proceeding to which such member may be a party or in
which he may be involved by reason of any action or failure to act under the
Plan and against and from any and all amounts paid by such member in
satisfaction of judgment in such action, suit, or proceeding against him
provided he gives the Corporation an opportunity, at its own expense, to handle
and defend the same before he undertakes to handle and defend it on his own
behalf. The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the
Corporation's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Corporation may have to indemnify them or hold
them harmless.
16.7. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall
be taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the
Corporation or any Parent or Subsidiary unless provided otherwise in such other
plan.
16.8. EXPENSES. The expenses of administering the Plan shall be borne
by the Corporation and its Parents or Subsidiaries.
16.9. TITLES AND HEADINGS. The titles and headings of the Sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.
16.10. GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
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<PAGE>
16.11. FRACTIONAL SHARES. No fractional shares of Stock shall be issued
and the Committee shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up.
16.12. GOVERNMENT AND OTHER REGULATIONS. The obligation of the
Corporation to make payment of awards in Stock or otherwise shall be subject to
all applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Corporation shall be under no obligation to
register under the 1933 Act, or any state securities act, any of the shares of
Stock paid under the Plan. The shares paid under the Plan may in certain
circumstances be exempt from registration under the 1933 Act, and the
Corporation may restrict the transfer of such shares in such manner as it deems
advisable to ensure the availability of any such exemption.
16.13. GOVERNING LAW. To the extent not governed by federal law, the
Plan and all Award Agreements shall be construed in accordance with and governed
by the laws of the State of Tennessee.
16.14 ADDITIONAL PROVISIONS. Each Award Agreement may contain such
other terms and conditions as the Committee may determine; provided that such
other terms and conditions are not inconsistent with the provisions of this
Plan.
16.15 CODE SECTION 162(M). The deduction limits of Code Section 162(m)
and the regulation thereunder do not apply to the Corporation until such time,
if any, as any class of the Corporation's common equity securities is registered
under Section 12 of the 1934 Act or the Corporation otherwise meets the
definition of a "publicly held corporation" under Treasury Regulation
1.162-27(c) or any successor provision. Upon becoming a publicly held
corporation, the deduction limits of Code Section 162(m) and the regulations
thereunder shall not apply to compensation payable under this Plan until the
expiration of the reliance period described in Treasury Regulation 1.162-27(f)
or any successor regulation.
The foregoing is hereby acknowledged as being the Accredo Health,
Incorporated 1999 Long-Term Incentive Plan as adopted by the Board of Directors
of the Corporation on April 9, 1999 and approved by the stockholders of the
Corporation on April 12, 1999.
Accredo Health, Incorporated
By: /s/ Thomas W. Bell, Jr.
-----------------------------------
Its: Senior Vice President and Secretary
-----------------------------------
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<PAGE>
Exhibit 10.7
ACCREDO HEALTH, INCORPORATED
1999 EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
ACCREDO HEALTH, INCORPORATED
1999 EMPLOYEE STOCK PURCHASE PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I - BACKGROUND...............................................................................1
1.1 Establishment of the Plan..............................................................1
1.2 Applicability of the Plan..............................................................1
1.3 Purpose................................................................................1
ARTICLE II - DEFINITIONS.............................................................................1
2.1 Administrator.........................................................................1
2.2 Board.................................................................................1
2.3 Code..................................................................................1
2.4 Committee.............................................................................1
2.5 Common Stock..........................................................................2
2.6 Compensation..........................................................................2
2.7 Contribution Account..................................................................2
2.8 Corporation...........................................................................2
2.9 Direct Registration System............................................................2
2.10 Effective Date........................................................................2
2.11 Eligible Employee.....................................................................2
2.12 Employee..............................................................................2
2.13 Employer..............................................................................2
2.14 Fair Market Value.....................................................................2
2.15 Offering Date.........................................................................3
2.16 Offering Period.......................................................................3
2.17 Option................................................................................3
2.18 Participant...........................................................................3
2.19 Plan..................................................................................3
2.20 Purchase Date.........................................................................3
2.21 Purchase Price........................................................................3
2.22 Request Form..........................................................................3
2.23 Stock Account.........................................................................3
2.24 Subsidiary............................................................................4
2.25 Trading Date..........................................................................4
ARTICLE III - ELIGIBILITY AND PARTICIPATION..........................................................4
3.1 Eligibility............................................................................4
3.2 Initial Participation..................................................................4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
3.3 Leave of Absence.......................................................................4
ARTICLE IV - STOCK AVAILABLE.........................................................................5
4.1 In General.............................................................................5
4.2 Adjustment in Event of Changes in Capitalization.......................................5
4.3 Dissolution, Liquidation, or Merger....................................................5
ARTICLE V. - OPTION PROVISIONS.......................................................................6
5.1 Purchase Price.........................................................................6
5.2 Calendar Year $25,000 Limit............................................................6
5.3 Offering Period Limit..................................................................6
ARTICLE VI - PURCHASING COMMON STOCK.................................................................6
6.1 Participant's Contribution Account.....................................................6
6.2 Payroll Deductions, Dividends..........................................................7
6.3 Discontinuance.........................................................................7
6.4 Leave of Absence; Transfer of Ineligible Status........................................8
6.5 Automatic Exercise.....................................................................8
6.6 Listing, Registration, and Qualification of Shares.....................................8
ARTICLE VII - WITHDRAWALS, DISTRIBUTIONS..............................................................9
7.1 Discontinuance of Deductions; Leave of Absence; Transfer to Ineligible Status...........9
7.2 In-Service Withdrawals..................................................................9
7.3 Termination of Employment for Reasons Other Than Death..................................9
7.4 Death...................................................................................9
7.5 Registration...........................................................................10
ARTICLE VIII - AMENDMENT AND TERMINATION.............................................................10
8.1 Amendment..............................................................................10
8.2 Termination............................................................................10
ARTICLE IX - MISCELLANEOUS...........................................................................11
9.1 Shareholder Approval...................................................................11
9.2 Employment Rights......................................................................11
9.3 Tax Withholding........................................................................11
9.4 Rights Not Transferable................................................................11
9.5 No Repurchase of Stock by Corporation..................................................11
9.6 Governing Law..........................................................................11
9.7 Shareholder Approval; Registration.....................................................11
</TABLE>
ii
<PAGE>
ACCREDO HEALTH, INCORPORATED
1999 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
BACKGROUND
1.1 ESTABLISHMENT OF THE PLAN. Accredo Health, Incorporated (the
"Corporation") hereby establishes a stock purchase plan to be known as the
"Accredo Health, Incorporated 1999 Employee Stock Purchase Plan" (the "Plan"),
as set forth in this document. The Plan is intended to be a qualified employee
stock purchase plan within the meaning of Section 423 of the Internal Revenue
Code of 1986, as amended, and the regulations and rulings thereunder.
1.2 APPLICABILITY OF THE PLAN. The provisions of this Plan are
applicable only to certain individuals who, on or after April 1, 1999, are
employees of the Corporation and its subsidiaries participating in the Plan.
1.3 PURPOSE. The purpose of the Plan is to enhance the proprietary
interest among the employees of the Corporation and its participating
subsidiaries through ownership of Common Stock of the Corporation.
ARTICLE II
DEFINITIONS
Whenever capitalized in this document, the following terms shall have
the respective meanings set forth below.
2.1 ADMINISTRATOR. Administrator shall mean the person or persons (who
may be officers or employees of the Corporation) selected by the Committee to
operate the Plan, perform day-to-day administration of the Plan, and maintain
records of the Plan.
2.2 BOARD. Board shall mean the Board of Directors of the Corporation.
2.3 CODE. Code shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations thereunder.
2.4 COMMITTEE. Committee shall mean a committee which consists of
members of the Board and which has been designated by the Board to have the
general responsibility for the administration of the Plan. Unless otherwise
designated by the Board, the Compensation Committee of the Board of Directors of
the Corporation shall serve as the Committee administering the Plan. Subject to
the express provisions of the Plan, the Committee shall have plenary authority
in its sole and absolute discretion to interpret and construe any and all
provisions of the Plan, to adopt rules and regulations
<PAGE>
for administering the Plan, and to make all other determinations necessary or
advisable for administering the Plan. The Committee's determinations on the
foregoing matters shall be conclusive and binding upon all persons.
2.5 COMMON STOCK. Common Stock shall mean the common stock, par value
$.01, of the Corporation.
2.6 COMPENSATION. Compensation shall mean, for any Participant, for any
Offering Period, the Participant's gross wages for the respective period,
subject to appropriate adjustments that would exclude items such as non-cash
compensation and reimbursement of moving, travel, trade or business expenses.
2.7 CONTRIBUTION ACCOUNT. Contribution Account shall mean the
bookkeeping account established by the Administrator on behalf of each
Participant, which shall be credited with the amounts deducted from the
Participant's Compensation pursuant to Article VI. The Administrator shall
establish a separate Contribution Account for each Participant for each Offering
Period.
2.8 CORPORATION. Corporation shall mean Accredo Health, Incorporated, a
Delaware corporation.
2.9 DIRECT REGISTRATION SYSTEM. Direct Registration System shall mean a
direct registration system approved by the Securities and Exchange Commission
and by the National Association of Securities Dealers, Inc. or any securities
exchange on which the Common Stock is then listed, whereby shares of Common
Stock may be registered in the holder's name in book-entry form on the books of
the Corporation.
2.10 EFFECTIVE DATE. Effective Date shall mean the effective date of
the Plan, which shall be the effective date of the Corporation's registration
statement on Form S-1 filed under the Securities Act of 1933, as amended, with
respect to an initial underwritten offering to the public of capital stock of
the Corporation.
2.11 ELIGIBLE EMPLOYEE. An Employee eligible to participate in the Plan
pursuant to Section 3.1.
2.12 EMPLOYEE. Employee shall mean an individual employed by an
Employer who meets the employment relationship described in Treasury Regulation
Sections 1.423-2(b) and Section 1.421-7(h).
2.13 EMPLOYER. Employer shall mean the Corporation and any Subsidiary
designated by the Committee as an employer participating in the Plan.
2.14 FAIR MARKET VALUE. Fair Market Value of a share of Common Stock,
as of the Effective Date, shall mean the price to the public specified on the
cover page of the final prospectus filed as part of the Corporation's
registration statement on Form S-1
2
<PAGE>
under the Securities Act of 1933, as amended, with respect to an initial
underwritten offering to the public of capital stock of the Corporation. Fair
Market Value of a share of Common Stock, as of any other applicable date, shall
mean (i) if the Common Stock is listed on a securities exchange or is traded
over the Nasdaq National Market, the closing sales price on such exchange or
over such system on such date, or (ii) if the Common Stock is not listed on a
securities exchange or traded over the Nasdaq National Market, the mean between
the bid and offered prices as quoted by Nasdaq for such date, provided that if
it is determined that the fair market value is not properly reflected by such
Nasdaq quotations, Fair Market Value will be determined by such other method as
the Committee determines in good faith to be reasonable.
2.15 OFFERING DATE. Offering Date shall mean the first Trading Date of
each Offering Period.
2.16 OFFERING PERIOD. Offering Period shall mean the six (6) month
periods beginning January 1 and July 1 of each year during which offers to
purchase Common Stock are outstanding under the Plan; provided, however, that
the initial Offering Period shall be the period beginning on the Effective Date
and ending on December 31, 1999. Not withstanding the above, no payroll
deductions shall be taken until the effective date of a registration statement
on Form S-8 filed under the Securities Act of 1933, as amended, covering the
shares to be issued under the Plan.
2.17 OPTION. Option shall mean the option to purchase Common Stock
granted under the Plan on each Offering Date.
2.18 PARTICIPANT. Participant shall mean any Eligible Employee who has
elected to participate in the Plan under Section 3.2.
2.19 PLAN. Plan shall mean the Accredo Health, Incorporated 1999
Employee Stock Purchase Plan, as amended and in effect from time to time.
2.20 PURCHASE DATE. Purchase Date shall mean the last Trading Date of
each Offering Period.
2.21 PURCHASE PRICE. Purchase Price shall mean the purchase price of
Common Stock determined under Section 5.1.
2.22 REQUEST FORM. Request Form shall mean an Employee's authorization
either in writing on a form approved by the Administrator or through electronic
communication approved by the Administrator which specifies the Employee's
payroll deduction in accordance with Section 6.2, and contains such other terms
and provisions as may be required by the Administrator.
2.23 STOCK ACCOUNT. Stock Account shall mean the account established by
the Administrator on behalf of each Participant, which shall be credited with
shares of
3
<PAGE>
Common Stock purchased pursuant to the Plan and dividends thereon until
distributed in accordance with the terms of the Plan.
2.24 SUBSIDIARY. Subsidiary shall mean any present or future
corporation which is a "subsidiary corporation" of the Corporation as defined in
Code Section 424(f).
2.25 TRADING DATE. Trading Date shall mean a date on which shares of
Common Stock are traded on the Nasdaq National Market, a national securities
exchange or in the over-the-counter market.
Except when otherwise indicated by the context, the definition of any
term herein in the singular may also include the plural.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee who is an Employee regularly scheduled
to work at least 20 hours each week and at least five months each calendar year
shall be eligible to participate in the Plan as of the later of:
(a) the Offering Date immediately following the Employee's last date of
hire by an Employer; or
(b) the Effective Date.
On each Offering Date, Options will automatically be granted to all
Employees then eligible to participate in the Plan; provided, however, that no
Employee shall be granted an Option for an Offering Period if, immediately after
the grant, the Employee would own stock, and/or hold outstanding options to
purchase stock, possessing five percent or more of the total combined voting
power or value of all classes of stock of the Corporation or any Subsidiary. For
purposes of this Section, the attribution rules of Code Section 424(d) shall
apply in determining stock ownership of any Employee. If an Employee is granted
an Option for an Offering Period and such Employee does not participate in the
Plan for such Offering Period, such Option will be deemed never to have been
granted for purposes of applying the $25,000 annual limitation described in
Section 5.2.
3.2 INITIAL PARTICIPATION. An Eligible Employee having been granted an
Option under Section 3.1 may submit a Request Form to the Administrator to
participate in the Plan for an Offering Period. The Request Form shall authorize
a regular payroll deduction from the Employee's Compensation for the Offering
Period, subject to the limits and procedures described in Article VI. A
Participant's Request Form authorizing a regular payroll deduction shall remain
effective from Offering Period to Offering Period until amended or canceled
under Section 6.3.
4
<PAGE>
3.3 LEAVE OF ABSENCE. For purposes of Section 3.1, an individual on a
leave of absence from an Employer shall be deemed to be an Employee for the
first 90 days of such leave. For purposes of this Plan, such individual's
employment with the Employer shall be deemed to terminate at the close of
business on the 90th day of the leave, unless the individual has returned to
regular employment with an Employer before the close of business on such 90th
day. Termination of any individual's leave of absence by an Employer, other than
on account of a return to employment with an Employer, shall be deemed to
terminate an individual's employment with the Employer for all purposes of the
Plan.
ARTICLE IV
STOCK AVAILABLE
4.1 IN GENERAL. Subject to the adjustments in Sections 4.2 and 4.3, an
aggregate of 135,000 shares of Common Stock shall be available for purchase by
Participants pursuant to the provisions of the Plan. These shares may be
authorized and unissued shares or may be shares issued and subsequently acquired
by the Corporation. If an Option under the Plan expires or terminates for any
reason without having been exercised in whole or part, the shares subject to
such Option that are not purchased shall again be available for subsequent
Option grants under the Plan. If the total number of shares of Common Stock for
which Options are exercised on any Purchase Date exceeds the maximum number of
shares then available under the Plan, the Committee shall make a pro rata
allocation of the shares available in as nearly a uniform manner as shall be
practicable and as it shall determine to be equitable; and the balance of the
cash credited to Participants' Contribution Accounts shall be distributed to the
Participants as soon as practicable.
4.2 ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION. In the event of a
stock dividend, stock split or combination of shares, recapitalization or other
change in the Corporation's capitalization, or other distribution with respect
to holders of the Corporation's Common Stock other than normal cash dividends,
an automatic adjustment shall be made in the number and kind of shares as to
which outstanding Options or portions thereof then unexercised shall be
exercisable and in the available shares set forth in Section 4.1, so that the
proportionate interest of the Participants shall be maintained as before the
occurrence of such event. This adjustment in outstanding Options shall be made
without change in the total price applicable to the unexercised portion of such
Options and with a corresponding adjustment in the Purchase Price per share;
provided, however, that in no event shall any adjustment be made that would
cause any Option to fail to qualify as an option pursuant to an employee stock
purchase plan within the meaning of Section 423 of the Code.
4.3 DISSOLUTION, LIQUIDATION, OR MERGER. Upon the dissolution or
liquidation of the Corporation, or upon a reorganization, merger, or
consolidation of the Corporation with one or more corporations in which the
Corporation is not the surviving corporation, or upon a sale of substantially
all of the property or stock of the Corporation
5
<PAGE>
to another corporation, the holder of each Option then outstanding under the
Plan shall be entitled to receive at the next Purchase Date upon the exercise of
such Option for each share as to which such Option shall be exercised, as nearly
as reasonably may be determined, the cash, securities, or property which a
holder of one share of the Common Stock was entitled to receive upon and at the
time of such transaction. The Board shall take such steps in connection with
these transactions as the Board deems necessary or appropriate to assure that
the provisions of this Section shall thereafter be applicable, as nearly as
reasonably may be determined, in relation to the cash, securities, or property
which the holder of the Option may thereafter be entitled to receive. In lieu of
the foregoing, the Committee may terminate the Plan in accordance with Section
8.2.
ARTICLE V
OPTION PROVISIONS
5.1 PURCHASE PRICE. The Purchase Price of a share of Common Stock
purchased for a Participant pursuant to each exercise of an Option shall be the
lesser of:
(a) 85 percent of the Fair Market Value of a share of Common Stock on
the Offering Date; or
(b) 85 percent of the Fair Market Value of a share of Common Stock on
the Purchase Date.
5.2 CALENDAR YEAR $25,000 LIMIT. Notwithstanding anything else
contained herein, no Employee may be granted an Option for any Offering Period
which permits such Employee's rights to purchase Common Stock under this Plan
and any other qualified employee stock purchase plan (within the meaning of Code
Section 423) of the Corporation and its Subsidiaries to accrue at a rate which
exceeds $25,000 of Fair Market Value of such Common Stock for each calendar year
in which an Option is outstanding at any time. For purposes of this Section,
Fair Market Value shall be determined as of the Offering Date.
5.3 OFFERING PERIOD LIMIT. Notwithstanding anything else contained
herein, the maximum number of shares of Common Stock that an Eligible Employee
may purchase in any Offering Period is 2,500 shares.
ARTICLE VI
PURCHASING COMMON STOCK
6.1 PARTICIPANT'S CONTRIBUTION ACCOUNT. The Administrator shall
establish a book account in the name of each Participant for each Offering
Period. As discussed in Section 6.2 below, a Participant's payroll deductions
shall be credited to the Participant's Contribution Account, without interest,
until such cash is withdrawn, distributed, or used to purchase Common Stock as
described below.
6
<PAGE>
During such time, if any, as the Corporation participates in a Direct
Registration System, shares of Common Stock acquired upon exercise of an Option
shall be directly registered in the name of the Participant. If the Corporation
does not participate in a Direct Registration System, then until distribution is
requested by a Participant pursuant to Article VII, stock certificates
evidencing the Participant's shares of Common Stock acquired upon exercise of an
Option shall be held by the Corporation as the nominee for the Participant.
These shares shall be credited to the Participant's Stock Account. Certificates
shall be held by the Corporation as nominee for Participants solely as a matter
of convenience. A Participant shall have all ownership rights as to the shares
credited to his or her Stock Account, and the Corporation shall have no
ownership or other rights of any kind with respect to any such certificates or
the shares represented thereby.
All cash received or held by the Corporation under the Plan may be used
by the Corporation for any corporate purpose. The Corporation shall not be
obligated to segregate any assets held under the Plan.
6.2 PAYROLL DEDUCTIONS; DIVIDENDS.
(a) PAYROLL DEDUCTIONS. By submitting a Request Form at any time before
an Offering Period in accordance with rules adopted by the Committee, an
Eligible Employee may authorize a payroll deduction to purchase Common Stock
under the Plan for the Offering Period. The payroll deduction shall be effective
on the first pay period during the Offering Period commencing after receipt of
the Request Form by the Administrator. The payroll deduction shall be in any
whole percentage up to a maximum of ten percent (10%) of such Employee's
Compensation payable each pay period, and at any other time an element of
Compensation is payable. A Participant's payroll deduction shall not be less
than one percent (1%) of such Employee's Compensation payable each payroll
period.
(b) DIVIDENDS. Cash dividends paid on Common Stock which is credited to
a Participant's Stock Account as of the dividend payment date shall be credited
to the Participant's Stock Account and paid to the Participant as soon as
practicable.
6.3 DISCONTINUANCE. A Participant may discontinue his or her payroll
deductions for an Offering Period by filing a new Request Form with the
Administrator. This discontinuance shall be effective on the first pay period
commencing at least 30 days after receipt of the Request Form by the
Administrator. A Participant who discontinues his or her payroll deductions for
an Offering Period may not resume participation in the Plan until the following
Offering Period.
Any amount held in the Participant's Contribution Account for an
Offering Period after the effective date of the discontinuance of his or her
payroll deductions will either be refunded or used to purchase Common Stock in
accordance with Section 7.1.
7
<PAGE>
6.4 LEAVE OF ABSENCE; TRANSFER TO INELIGIBLE STATUS. If a Participant
either begins a leave of absence, is transferred to employment with a Subsidiary
not participating in the Plan, or remains employed with an Employer but is no
longer eligible to participate in the Plan, the Participant shall cease to be
eligible for payroll deductions to his or her Contribution Account pursuant to
Section 6.2. The cash standing to the credit of the Participant's Contribution
Account shall become subject to the provisions of Section 7.1.
If the Participant returns from the leave of absence before being
deemed to have ceased employment with the Employer under Section 3.3, or again
becomes eligible to participate in the Plan, the Request Form, if any, in effect
immediately before the leave of absence or disqualifying change in employment
status shall be deemed void and the Participant must again complete a new
Request Form to resume participation in the Plan.
6.5 AUTOMATIC EXERCISE. Unless the cash credited to a Participant's
Contribution Account is withdrawn or distributed as provided in Article VII, his
or her Option shall be deemed to have been exercised automatically on each
Purchase Date, for the purchase of the number of full shares of Common Stock
which the cash credited to his or her Contribution Account at that time will
purchase at the Purchase Price. If there is a cash balance remaining in the
Participant's Contribution Account at the end of an Offering Period representing
the exercise price for a fractional share of Common Stock, such balance shall be
retained in the Participant's Contribution Account for the next Offering Period,
unless the Participant requests that it be refunded, without interest. Any other
cash balance remaining in the Participant's Contribution Account at the end of
an Offering Period shall be refunded to the Participant, without interest. The
amount of cash that may be used to purchase shares of Common Stock may not
exceed the Compensation restrictions set forth in Section 6.2.
If the cash credited to a Participant's Contribution Account on the
Purchase Date exceeds the applicable Compensation restrictions of Section 6.2 or
exceeds the amount necessary to purchase the maximum number of shares of Common
Stock available during the Offering Period, such excess cash shall be refunded
to the Participant. The excess cash may not be used to purchase shares of Common
Stock nor retained in the Participant's Contribution Account for a future
Offering Period.
Each Participant shall receive a statement on an annual basis
indicating the number of shares credited to his or her Stock Account under the
Plan.
6.6 LISTING, REGISTRATION, AND QUALIFICATION OF SHARES. The granting of
Options for, and the sale and delivery of, Common Stock under the Plan shall be
subject to the effecting by the Corporation of any listing, registration, or
qualification of the shares subject to that Option upon any securities exchange
or under any federal or state law, or the obtaining of the consent or approval
of any governmental regulatory body deemed necessary or desirable for the
issuance or purchase of the shares covered.
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ARTICLE VII
WITHDRAWALS; DISTRIBUTIONS
7.1 DISCONTINUANCE OF DEDUCTIONS; LEAVE OF ABSENCE; TRANSFER TO
INELIGIBLE STATUS. In the event of a Participant's complete discontinuance of
payroll deductions under Section 6.3 or a Participant's leave of absence or
transfer to an ineligible status under Section 6.4, the cash balance then
standing to the credit of the Participant's Contribution Account shall be--
(a) returned to the Participant, in cash, without interest, as soon as
practicable, upon the Participant's written request received by the
Administrator at least 30 days before the next Purchase Date; or
(b) held under the Plan and used to purchase Common Stock for the
Participant under the automatic exercise provisions of Section 6.5.
7.2 IN-SERVICE WITHDRAWALS. During such time, if any, as the
Corporation participates in a Direct Registration System, shares of Common Stock
acquired upon exercise of an Option shall be directly registered in the name of
the Participant and the Participant may withdraw certificates in accordance with
the applicable terms and conditions of such Direct Registration System. If the
Corporation does not participate in a Direct Registration System, (i) a
Participant may, while an Employee of the Corporation or any Subsidiary,
withdraw certificates for some or all of the shares of Common Stock credited to
his or her Stock Account at any time, upon 30 days' written notice to the
Administrator, and (ii) each Participant shall be permitted only one withdrawal
under this Section during each Offering Period. If a Participant requests a
distribution of only a portion of the shares of Common Stock credited to his or
her Stock Account, the Administrator will distribute the oldest securities held
in the Participant's Stock Account first, using a first in-first out
methodology.
7.3 TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH. If a
Participant terminates employment with the Corporation and the Subsidiaries for
reasons other than death, the cash balance in the Participant's Contribution
Account shall be returned to the Participant in cash, without interest, as soon
as practicable. Certificates for the shares of Common Stock credited to his or
her Stock Account shall be distributed to the Participant as soon as
practicable, unless the Corporation then participates in a Direct Registration
System, in which case, the Participant shall be entitled to evidence of
ownership of such shares in such form as the terms and conditions of such Direct
Registration System permit.
7.4 DEATH. In the event a Participant dies, the cash balance in his or
her Contribution Account shall be distributed to the Participant's estate, in
cash, without interest, as soon as practicable. Certificates for the shares of
Common Stock credited to the Participant's Stock Account shall be distributed to
the estate as soon as practicable, unless the Corporation then participates in a
Direct Registration System, in which case,
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the estate shall be entitled to evidence of ownership of such shares in such
form as the terms and conditions of such Direct Registration System permit.
7.5 REGISTRATION. Whether represented in certificate form or by direct
registration pursuant to a Direct Registration System, shares of Common Stock
acquired upon exercise of an Option shall be directly registered in the name of
the Participant or, if the Participant so indicates on the Request Form, (a) in
the Participant's name jointly with a member of the Participant's family, with
the right of survivorship, (b) in the name of a custodian for the Participant
(in the event the Participant is under a legal disability to have stock issued
in the Participant's name), or (c) in a manner giving effect to the status of
such shares as community property. No other names may be included in the Common
Stock registration. The Corporation shall pay all issue or transfer taxes with
respect to the issuance or transfer of shares of such Common Stock, as well as
all fees and expenses necessarily incurred by the Corporation in connection with
such issuance or transfer.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 AMENDMENT. The Committee shall have the right to amend or modify
the Plan, in full or in part, at any time and from time to time; provided,
however, that no amendment or modification shall-
(a) affect any right or obligation with respect to any grant previously
made, unless required by law, or
(b) unless previously approved by the stockholders of the Corporation,
where such approval is necessary to satisfy federal securities laws, the Code,
or rules of any stock exchange on which the Corporation's Common Stock is
listed-
(1) in any manner materially affect the eligibility
requirements set forth in Sections 3.1 and 3.3, or change the
definition of Employer as set forth in Section 2.13,
(2) increase the number of shares of Common Stock subject to
any options issued to Participants (except as provided in Sections 4.2
and 4.3), or
(3) materially increase the benefits to Participants under the
Plan.
8.2 TERMINATION. The Committee may terminate the Plan at any time in
its sole and absolute discretion. The Plan shall be terminated by the Committee
if at any time the number of shares of Common Stock authorized for purposes of
the Plan is not sufficient to meet all purchase requirements, except as
specified in Section 4.1.
Upon termination of the Plan, the Administrator shall give notice
thereof to Participants and shall terminate all payroll deductions. Cash
balances then credited to
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Participants' Contribution Accounts shall be distributed as soon as practicable,
without interest.
ARTICLE IX
MISCELLANEOUS
9.1 SHAREHOLDER APPROVAL. The Plan shall be approved and ratified by
the stockholders of the Corporation, not later than 12 months after adoption of
the Plan by the Board of Directors of the Corporation, pursuant to Treasury
regulation Section 1.423-2(c). If for any reason such approval is not given by
such date, the Plan shall be null and void, and all payroll deductions to the
Plan shall cease. The cash balances and Common Stock credited to Participants'
accounts shall be promptly distributed to them; and any Common Stock
certificates issued and delivered to Participants prior to such date shall
remain the property of the Participants.
9.2 EMPLOYMENT RIGHTS. Neither the establishment of the Plan, nor the
grant of any Options thereunder, nor the exercise thereof shall be deemed to
give to any Employee the right to be retained in the employ of the Corporation
or any Subsidiary or to interfere with the right of the Corporation or any
Subsidiary to discharge any Employee or otherwise modify the employment
relationship at any time.
9.3 TAX WITHHOLDING. The Administrator may make appropriate provisions
for withholding of federal, state, and local income taxes, and any other taxes,
from a Participant's Compensation to the extent the Administrator deems such
withholding to be legally required.
9.4 RIGHTS NOT TRANSFERABLE. Rights and Options granted under this Plan
are not transferable by the Participant other than by will or by the laws of
descent and distribution and are exercisable only by the Participant during his
or her lifetime.
9.5 NO REPURCHASE OF STOCK BY CORPORATION. The Corporation is under no
obligation to repurchase from any Participant any shares of Common Stock
acquired under the Plan.
9.6 GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Tennessee except to the extent such
laws are preempted by the laws of the United States.
9.7 SHAREHOLDER APPROVAL; REGISTRATION. The Plan was adopted by the
Board of Directors of the Corporation on April __, 1999, to be effective as of
the Effective Date, provided that no payroll deductions may begin until a
registration statement on Form S-8 filed under the Securities Act of 1933, as
amended, covering the shares to be issued under the Plan, has become effective.
The Plan is subject to approval by the stockholders of the Corporation within 12
months of approval by the Board of Directors.
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* * * * * * * * * * * * * *
The foregoing is hereby acknowledged as being the Accredo Health,
Incorporated 1999 Employee Stock Purchase Plan as adopted by the Board of
Directors of the Corporation on April 9, 1999, and approved by the stockholders
of the Corporation on April 12, 1999.
Accredo Health, Incorporated
By: /s/ Thomas W. Bell, Jr.
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Its: Senior Vice President and Secretary
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