<PAGE>
As filed with the Securities and Exchange Commission on December 23, 1996
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
RHONE-POULENC RORER INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1699163
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 Arcola Road
Collegeville, PA 19426-0107
(Address of principal executive offices) (Zip Code)
RHONE-POULENC RORER INC.
1995 EQUITY COMPENSATION PLAN
(Full title of the plan)
RICHARD T. COLLIER, ESQ.
Rhone-Poulenc Rorer Inc.
500 Arcola Road
Collegeville, PA 19426-0107
(Name and address of agent for service)
(610) 454-8000
(Telephone number, including area code, of agent for service)
-----------------------
Copy of all communications to:
JAMES W. JENNINGS, ESQ.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(215) 963-5726
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price aggregate registration fee
per share (1) offering price (1)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 5,000,000 $74.813 $374,065,000 $113,354
without par value
- --------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated pursuant to paragraphs (c) and (h) of Rule 457 solely for the
purpose of calculating the registration fee, based upon the average of the
high and low sales prices of shares of Common Stock on December 18, 1996,
as reported on the New York Stock Exchange.
<PAGE>
This Registration Statement on Form S-8 (the "Registration Statement")
filed by Rhone-Poulenc Rorer Inc. (the "Registrant") relates to 5,000,000
shares (the "Shares") of the Company's Common Stock, without par value (the
"Common Stock"), issuable pursuant to the Rhone-Poulenc Rorer Inc. 1995
Equity Compensation Plan (the "Plan").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents, as filed by the Registrant with the
Securities and Exchange Commission (the "Commission"), are incorporated by
reference in this Registration Statement:
(a) Annual Report on Form 10-K, filed with the Commission on
March 18, 1996 for the fiscal year ended December 31, 1995;
(b) Quarterly Report on Form 10-Q filed with the Commission on
May 10, 1996 for the quarter ended March 31, 1996;
(c) Quarterly Report on Form 10-Q filed on August 13, 1996 for
the quarter ended June 30, 1996;
(d) Quarterly Report on Form 10-Q filed on November 6, 1996 for
the quarter ended September 30, 1996;
(e) Proxy Statement for the Annual Meeting of Stockholders held
on May 3, 1996; and
(f) The descriptions of the Common Stock of the Registrant set
forth in the Registrant's Registration Statements pursuant to Section
12 of the Exchange Act, and any amendment or report filed for the
purpose of updating such description.
All reports and other documents filed by the Registrant and the
Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, after the date of this registration statement and
prior to the filing of a post-effective amendment that indicates that all
securities offered hereby have been sold or that deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference
herein and to be part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes hereof to
the extent that a statement contained herein (or in any other subsequently
filed document that is also incorporated by reference herein) modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part hereof.
Item 4. Description of Securities.
-------------------------
Not applicable.
1
<PAGE>
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
The consolidated financial statements of the Registrant and its
subsidiaries included in the Registrant's Report on Form 10-K for the
fiscal year ending December 31, 1995 and incorporated by reference in this
registration statement have been audited by Coopers & Lybrand LLP,
independent accountants, as set forth in their report contained therein.
Such financial statements are, and audited annual financial statements to
be included in subsequently filed documents will be, incorporated herein in
reliance upon the reports of Coopers & Lybrand LLP pertaining to such
financial statements (to the extent covered by consents filed with the
Securities and Exchange Commission) given upon the authority of such firm
as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Section 1741 of the Pennsylvania Business Corporation Law (the
"PBCL") provides the Company the power to indemnify any officer or director
acting in his or her capacity as a representative of the Company who was or
is a party or is threatened to be made a party to any action or proceeding
against expenses, judgments, penalties, fines and amounts paid in
settlement in connection with such action or proceeding whether the action
was instituted by a third party or arose by or in the right of the Company.
Generally, the only limitation on the ability of the Company to indemnify
its officers and directors is if the act violates a criminal statute or if
the act or failure to act is finally determined by a court to have
constituted willful misconduct or recklessness.
The Bylaws of the Registrant provide that the Registrant shall
indemnify any and all directors and officers of the Registrant and any
other person designated as an "indemnified representative" by the board of
directors of the Registrant (which may, but need not, include any person
serving at the request of the Registrant, as a director, officer, fiduciary
or trustee of another corporation, partnership, joint venture, trust,
employee benefit plan or other entity or enterprise) (each, an "indemnified
representative") against any liability incurred in connection with any
threatened, pending or completed action, suit, appeal or other proceeding
of any nature, whether civil, criminal, administrative or investigative,
whether formal or informal, and whether brought by or in the right of the
Registrant, a class of its security holders or otherwise (each, a
"Proceeding") in which the indemnified representative may be involved as a
party or otherwise, by reason of the fact that such person is or was
serving in an indemnified capacity, including without limitation
liabilities resulting from any actual or alleged breach or neglect of duty,
error, misstatement or misleading statement, negligence, gross negligence
or act giving rise to strict or products liability, except where such
indemnification is expressly prohibited by applicable law or where conduct
of the indemnified representative has been determined (as provided in the
Bylaws) to constitute willful misconduct or recklessness or unlawful self-
dealing, sufficient in the circumstances to bar indemnification against
liabilities arising from the conduct. If an indemnified representative is
entitled to indemnification in respect of a portion, but not all, of any
liabilities to which such person may be subject, the Registrant shall
indemnify such indemnified representative to the maximum extent for such
portion of the liabilities. The termination of a Proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendre or its
equivalent shall not, of itself, create a presumption that the indemnified
representative is not entitled to indemnification. The Bylaws provide for
the advancement of expenses to an indemnified party upon receipt of an
undertaking by the party to repay those amounts if it is finally determined
that the indemnified party is not entitled to indemnification.
An indemnified representative shall be deemed to have discharged
such person's duty to the Registrant if he or she has relied in good faith
on information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented by
any of the following:
(1) one or more officers or employees of the Registrant whom the
indemnified representative reasonably believes to be reliable and
competent with respect to the matter presented;
(2) legal counsel, public accountants or other persons as to
matters that the indemnified representative reasonably believes are
within the person's professional or expert competence; or
2
<PAGE>
(3) a committee of the board of directors on which he or she
does not serve as to matters within its area of designated authority,
which committee he or she reasonably believes to merit confidence.
The Bylaws authorize the Company to take steps to ensure that all
persons entitled to indemnification are properly indemnified, including, if
the board of directors so determines, purchasing and maintaining insurance.
The Company currently maintains directors and officers insurance.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
The exhibits filed as part of this Registration Statement are as
follows:
Exhibit
Number Exhibit
------ -------
5 Opinion re legality
23.1 Consent of Coopers & Lybrand LLP
23.2 Consent of Richard T. Collier, Senior Vice President and
General Counsel of the Registrant (included in Exhibit 5)
24 Power of Attorney
99 Rhone-Poulenc Rorer Inc. 1995 Equity Compensation Plan
Item 9. Undertakings.
------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
3
<PAGE>
Provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) of
-------- -------
this section do not apply if the information required to be included in a
post-effective amendment by those subparagraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
4
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
--------------
Act of 1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in Collegeville, Pennsylvania,
on the 20th day of December, 1996.
RHONE-POULENC RORER INC.
By: /s/ Michel de Rosen
-----------------------------------------
MICHEL DE ROSEN
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
Director
- --------------------------------
Jean-Marc Bruel
/s/ Jean-Jacques Bertrand* Director December 20, 1996
- --------------------------------
Jean-Jacques Bertrand
/s/ Robert E. Cawthorn* Director December 20, 1996
- --------------------------------
Robert E. Cawthorn
/s/ Michel de Rosen Chairman and Chief Executive Officer December 20, 1996
- -------------------------------- Director
Michel de Rosen
/s/ Charles-Henri Filippi* Director December 20, 1996
- --------------------------------
Charles-Henri Filippi
/s/ Dale F. Frey* Director December 20, 1996
- --------------------------------
Dale F. Frey
/s/ Claude Helene* Director December 20, 1996
- --------------------------------
Claude Helene
Director
- --------------------------------
Michael H. Jordan
/s/ Manfred E. Karobath, M.D.* Director December 20, 1996
- --------------------------------
Manfred E. Karobath, M.D.
/s/ Igor Landau* Director December 20, 1996
- --------------------------------
Igor Landau
/s/ Patrick Langlois Executive Vice President and December 20, 1996
- -------------------------------- Chief Financial Officer
Patrick Langlois
/s/ Philippe Maitre Vice President and Controller December 20, 1996
- -------------------------------- (Principal Accounting Officer)
Philippe Maitre
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Peter J. Neff*
- -------------------------------- Director December 20, 1996
Peter J. Neff
/s/ James S. Riepe* Director December 20, 1996
- --------------------------------
James S. Riepe
/s/ Jean-Pierre Tirouflet* Director December 20, 1996
- --------------------------------
Jean-Pierre Tirouflet
</TABLE>
* By: /s/ Richard T. Collier
--------------------------------------
RICHARD T. COLLIER
Senior Vice President and
General Counsel
(Attorney-in-fact)
6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
------- ------- ----
<S> <C> <C>
5 Opinion re legality
23.1 Consent of Coopers & Lybrand LLP
23.2 Consent of Richard T. Collier, Senior Vice President and
General Counsel of the Registrant (included in Exhibit 5)
24 Power of Attorney
99 Rhone-Poulenc Rorer Inc. 1995 Equity Compensation Plan
</TABLE>
<PAGE>
Exhibit 5
---------
December 23, 1996
Rhone-Poulenc Rorer Inc.
500 Arcola Road
Collegeville, PA 19426-0107
Ladies/Gentlemen:
Rhone-Poulenc Rorer Inc. (the "Company") has requested my
opinion, as General Counsel of the Company, in connection with the
Registration Statement on Form S-8 to be filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the "Act"),
with respect to 5,000,000 shares of the Company's Common Stock, without par
value (the "Shares"), which are issuable pursuant to the Rhone-Poulenc
Rorer Inc. 1995 Equity Compensation Plan (the "Plan").
I or attorneys under my supervision have examined such records
and have made such examination of law as I deem appropriate in connection
with rendering such opinion. I have also assumed that the registration
provisions of the Act and of such securities or "Blue Sky" laws as may be
applicable shall have been complied with. Based thereon, it is my opinion
that, when issued and delivered in accordance with the provisions of the
Plan, the Shares will be legally issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an Exhibit to
the Registration Statement. In giving this consent I do not admit that I
am in the category of persons whose consent is required under Section 7 for
the Securities Act of 1933 or the rules and regulations for the Securities
and Exchange Commission thereunder.
/s/ Richard T. Collier
-----------------------------------
Richard T. Collier
Senior Vice President and
General Counsel
<PAGE>
Exhibit 23.1
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
of Rhone-Poulenc Rorer, Inc. on Form S-8 of our report dated January 26,
1996 on our audits of the consolidated financial statements of
Rhone-Poulenc Rorer, Inc. as of December 31, 1995 and 1994 and for the
years ended December 31, 1995, 1994, and 1993, which report is included in
the Company's Annual Report on Form 10-K for the year ended December 31,
1995. We consent to the references to our firm under the caption "Experts."
COOPERS & LYBRAND LLP
/s/ Coopers & Lybrand LLP
Philadelphia, Pennsylvania
December 23, 1996
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, does hereby
nominate, constitute and appoint Richard B. Young, Richard T. Collier and
Patrick Langlois, or any of them, as his agent and attorney-in-fact, in his
name to execute on behalf of the undersigned a Registration Statement on
Form S-8 to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, in connection with the registration
under said Act of shares of Common Stock of Rhone-Poulenc Rorer Inc. (the
"Company"), the authority herein given to include execution of amendments
to any part of such Registration Statement and generally to do and perform
all things necessary to be done in the premises as fully and effectively in
all respects as the undersigned could do if personally present.
IN WITNESS WHEREOF, this power of attorney has been executed in
counterparts by individuals listed below as of the 30th day of October
1996.
/s/ Jean-Marc Bruel /s/ Manfred E. Karobath, M.D.
- --------------------------- -----------------------------
Jean-Marc Bruel Manfred E. Karobath, M.D.
/s/ Jean-Jacques Bertrand
- --------------------------- -----------------------------
Jean-Jacques Bertrand Michael H. Jordan
/s/ Robert E. Cawthorn /s/ Igor Landau
- --------------------------- -----------------------------
Robert E. Cawthorn Igor Landau
/s/ Michel de Rosen /s/ Peter J. Neff
- --------------------------- -----------------------------
Michel de Rosen Peter J. Neff
/s/ Charles-Henri Filippi /s/ James S. Riepe
- --------------------------- -----------------------------
Charles-Henri Filippi James S. Riepe
/s/ Dale F. Frey /s/ Jean-Pierre Tirouflet
- --------------------------- -----------------------------
Dale F. Frey Jean-Pierre Tirouflet
/s/ Claude Helene
- ---------------------------
Claude Helene
<PAGE>
Exhibit 99
----------
RHONE-POULENC RORER INC.
1995 EQUITY COMPENSATION PLAN
-----------------------------
[Amended and Restated Effective November 1, 1996]
The purpose of the Rhone-Poulenc Rorer Inc. 1995 Equity
Compensation Plan (the "Plan") is (i) to authorize the Executive Personnel
and Compensation Committee (the "Committee") of the Board of Directors to
provide designated officers (including officers who are also directors),
other employees and directors who are not employees ("Non-Employee
Directors") of Rhone-Poulenc Rorer Inc. and its subsidiaries (hereinafter
collectively referred to as the "Company") and principals of organizations
involved with the Company on significant projects ("Key Advisors") with
certain rights to acquire common stock of the Company and (ii) to provide
for the grant of incentive stock options, nonqualified stock options and
stock appreciation rights. The Company believes that the Plan will cause
the participants to contribute materially to the growth of the Company,
thereby benefitting the Company's shareholders and will align the economic
interests of the participants with those of the shareholders. This Plan
shall serve as the successor equity incentive program to the Rorer Group
Inc. Equity Compensation Plan.
1. Administration
--------------
The Plan shall be administered and interpreted by a committee
(the "Committee") consisting of not less than two persons appointed by the
Board of Directors of the Company, all of whom shall be non-employee
directors as defined under Rule 16b-3 under the Securities Exchange Act of
1934 (the "Exchange Act") and "outside directors" as defined under Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and
related Treasury regulations. The Committee shall have the sole authority
to determine (i) the employees and Key Advisors to whom options and awards
shall be granted under the Plan, (ii) the type, size and terms of the
awards to be made to each such individual, (iii) the time when the awards
will be granted and the duration of the exercise period and (iv) any other
matters arising under the Plan. Non-Employee Directors shall receive
grants only pursuant to the provisions of Section 6. The Committee shall
have full power and authority to administer and interpret the Plan, to make
factual determinations and to adopt or amend such rules, regulations,
agreements and instruments for implementing the Plan and for conduct of its
business as it deems necessary or advisable, in its sole discretion. The
Committee's interpretations of the Plan and all determinations made by the
Committee pursuant to the powers vested in it hereunder shall be conclusive
and binding on all persons having any interests in the Plan or in any
awards granted hereunder. All powers of the Committee shall be executed in
its sole discretion, in the best interest of the Company and in keeping
with the objectives of the Plan and need not be uniform as to similarly
situated individuals. Notwithstanding the foregoing, administration of
Section 6 with respect to nondiscretionary
1
<PAGE>
grants to Non-Employee Directors is intended to be self-executing in
accordance with the express terms and conditions of Section 6. However, to
the extent that administrative determinations are required with respect to
Section 6, such determinations shall be made by the members of the Board
who are not eligible to receive grants under Section 6, but in no event
shall such determinations affect the eligibility of optionees, the
determination of the exercise price, the timing of the grants or the number
of shares subject to such grants.
2. Grants
------
Incentives under the Plan shall consist of incentive stock
options, nonqualified stock options, restricted stock grants and stock
appreciation rights (hereinafter collectively referred to as "Grants").
All Grants shall be subject to the terms and conditions set forth herein
and to those other terms and conditions consistent with this Plan as the
Committee deems appropriate and as are specified in writing by the
Committee to the employee (the "Grant Letter"). The Committee shall
approve the form and provisions of each Grant Letter to an employee or Key
Advisor. Grants under a particular Section of the Plan need not be uniform
as among the employees or Key Advisors and Grants under two or more
Sections of the Plan may be combined in one instrument; provided, however,
that Grants to Non-Employee Directors shall be made only in accordance with
the provisions of Section 6.
3. Shares Subject to the Plan
--------------------------
(a) Subject to the adjustment specified below, the aggregate
number of shares of common stock of the Company ("Company Stock") that have
been or may be issued or transferred under the Plan is 5,000,000 shares.
During the term of the Plan, the maximum aggregate number of shares of
Company Stock that shall be subject to options or awards under the Plan to
any single individual shall be 500,000 shares. The shares may be
authorized but unissued shares of Company Stock or reacquired shares of
Company Stock, including shares repurchased by the Company on the open
market. If and to the extent options or stock appreciation rights granted
under the Plan terminate, expire, or are canceled, forfeited, exchanged or
surrendered without having been exercised, or if any shares of restricted
stock are forfeited, the shares subject to such option or such award shall
again be available for purposes of the Plan.
(b) If there is any change in the number or kind of shares of
Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii)
by reason of a merger, reorganization or consolidation in which the Company
is the surviving corporation, (iii) by reason of a reclassification or
change in par value, or (iv) by reason of any other extraordinary or
unusual event affecting the outstanding Company Stock as a class without
the Company's receipt of consideration, or if the value of outstanding
shares of Company Stock is substantially reduced as a result of a spinoff
or the Company's payment of an extraordinary dividend or distribution, the
maximum number of shares of Company Stock available for Grants, the maximum
number of shares of Company Stock that any individual participating in the
Plan may be granted in any
2
<PAGE>
year, the number of shares covered by outstanding Grants, the kind of
shares issued under the Plan, and the price per share or the applicable
market value of such Grants may be proportionately adjusted by the
Committee to reflect any increase or decrease in the number or kind of
issued shares of Company Stock to preclude the enlargement or dilution of
rights and benefits under such Grants; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated. The
adjustments determined by the Committee shall be final, binding and
conclusive.
4. Eligibility for Participation
-----------------------------
Officers and other employees of the Company, Key Advisors
designated by the Committee and Non-Employee Directors shall be eligible to
participate in the Plan (hereinafter referred to individually as the
"Participant" and collectively as the "Participants"), provided that Key
Advisors and Non-Employee Directors shall not be eligible to receive
Incentive Stock Options (as defined in Election 5(b) below). The Committee
shall select the employees and Key Advisors to receive Grants (together
with Non-Employee Directors receiving Grants under Section 6, the
"Grantees") from among the Participants and determine the number of shares
of Company Stock subject to a particular Grant in such manner as the
Committee determines; provided, however, that Non-Employee Directors shall
only receive Grants pursuant to Section 6. Nothing contained in this Plan
shall be construed to (i) limit the right of the Company to grant options
otherwise in connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business or assets of any corporation,
firm or association, including options granted to employees thereof who
become employees of the Company, or for other proper corporate purpose, or
(ii) limit the right of the Company to grant stock options or make other
awards outside of this Plan.
5. Granting of Options
-------------------
(a) Number of Shares. The Committee shall grant to each Grantee
who is an employee or Key Advisor a number of stock options as the
Committee shall determine.
(b) Type of Option and Price.
(i) The Committee may grant options qualifying as incentive stock
options ("Incentive Stock Options") within the meaning of Section 422
of the Code and/or other stock options ("Nonqualified Stock Options")
or any combination of Incentive Stock Options and Nonqualified Stock
Options (hereinafter referred to collectively as "Stock Options"), all
in accordance with the terms and conditions set forth herein.
3
<PAGE>
(ii) The purchase price of Company Stock subject to an Incentive
Stock Option or a Nonqualified Stock Option shall be the fair market
value of a share of such Stock on the date such Stock Option is
granted. Notwithstanding the foregoing, with respect to a Stock Option
other than an Incentive Stock Option, the price at which Company Stock
may be purchased may be equal to either (i) the fair market value of
Company Stock as of a date subsequent to the date of grant as
specified by the Committee in the Grant Letter or (ii) the average of
such fair market value over a period of time as specified by the
Committee in the Grant Letter, but only when the price so established
would not result in the disallowance of the Company's expense
deduction pursuant to Section 162(m) of the Code.
(iii) The "fair market value" of Company Stock shall be the
closing price of a share of Company Stock on the New York Stock
Exchange; provided, however, that if shares of Company Stock shall not
be listed on the New York Stock Exchange, then the fair market value
will be the closing price of a share of Company Stock on the principal
stock exchange on which such shares are listed for trading, or if no
sale takes place on such day on any such exchange, the average of the
closing bid and asked prices on such day as officially quoted on any
such stock exchange or if the Company Stock is not admitted to trading
on any stock exchange the fair market price shall be the last sale
reported on the NASDAQ National Market System published in the Wall
Street Journal or, if no such sale is so reported, the average of the
reported closing bid and asked prices on such day in the over-the-
counter market, as furnished by the National Association of Security
Dealers Automated System, or, if such price at the time is not
available from such system, as furnished by any similar system then
engaged in the business of reporting such prices and selected by the
Company or, if there is no such system, as furnished by any member of
the National Association of Security Dealers, selected by the Company.
(c) Exercise Period. The Committee shall determine the option
exercise period of each Stock Option. The exercise period shall not exceed
ten years from the
4
<PAGE>
date of grant. Notwithstanding any determinations by the Committee
regarding the exercise period of any Stock Option, all outstanding Stock
Options shall become immediately exercisable upon a Change in Control of
the Company (as defined herein).
(d) Vesting of Options. The vesting period for Stock Options
shall commence on the date of grant and shall end on the third anniversary
thereof, with one-third of the shares of Company Stock subject to each
Grant becoming purchasable on each anniversary date of the grant, on a
cumulative basis (except as otherwise provided herein or in the Grant
Letter or as otherwise determined by the Committee). Notwithstanding any
determinations by the Committee regarding the vesting period of any Stock
Option, all outstanding Stock Options shall become immediately exercisable
upon a Change in Control of the Company (as defined herein).
(e) Manner of Exercise. A Grantee may exercise a Stock Option by
delivering a notice of exercise to the Committee with accompanying payment
of the option price. Such notice may instruct the Company to deliver
shares of Company Stock due upon the exercise of the Stock Option to any
registered broker or dealer designated by the Company ("Designated Broker")
in lieu of delivery to the Grantee. Such instructions must designate the
account into which the shares are to be deposited. The Grantee may tender
this notice of exercise, which has been properly executed by the Grantee,
and the aforementioned delivery instructions to any Designated Broker.
(f) Termination of Employment, Disability or Death.
(1) In the event the Grantee during his lifetime ceases to
be an employee of the Company or Key Advisor for any reason other than
death, any Stock Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within six months and one day of the date on
which he ceases to be an employee or Key Advisor (or within such other
period of time as may be specified in the Grant Letter), but in any event
no later than the date of expiration of the option exercise period;
provided, however, that in the case of a Grantee who is disabled within the
meaning of Section 22(e)(3) of the Code, such period shall be one year
rather than six months and one day (except as the Committee may otherwise
provide in the Grant Letter) and that in the case of Incentive Stock
Options, such period shall be 90 days rather than six months.
(2) In the event of the death of the Grantee while he is an
employee or Key Advisor of the Company or within not more than three months
of the date on which he ceases to be an employee or Key Advisor (or within
such other period of time as may be specified in the Grant Letter), any
Stock Option which was otherwise exercisable by the Grantee at the date of
death may be exercised by his personal representative at any time prior to
the expiration of one year from the date of death, but in any event no
later than the date of expiration of the option exercise period.
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(g) Satisfaction of Option Price. The Grantee shall pay the
option price in cash or by delivering shares of Company Stock already owned
by the Grantee for the period necessary to avoid a charge to the Company's
earnings for financial reporting purposes and having a fair market value on
the date of exercise equal to the option price or with a combination of
cash and shares. The Grantee shall pay the option price and the amount of
withholding tax due, if any, at the time of exercise. Shares of Company
Stock shall not be issued or transferred upon exercise of a Stock Option
until the option price is fully paid.
(h) Limits on Incentive Stock Options. Each Grant of an
Incentive Stock Option shall provide that the aggregate fair market value
of the Company Stock on the date of the Grant with respect to which
Incentive Stock Options are exercisable for the first time by a Grantee
during any calendar year under the Plan or any other stock option plan of
the Company shall not exceed $100,000. An Incentive Stock Option shall not
be granted to any Participant who, at the time of grant, owns stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or parent of the Company, unless the option
price per share is not less than 110% of the fair market value of Company
Stock on the date of grant and the option exercise period is not more than
five years from the date of grant.
6. Stock Option Grants to Non-Employee Directors
---------------------------------------------
(a) Number of Shares. Each individual who becomes a Non-Employee
Director after the effective date of this Plan as set forth in Section 18
shall receive a grant of a Non-qualified Stock Option to purchase 20,000
shares of Company Stock as of the date of the first meeting of shareholders
at which he or she is first elected to the Board of Directors or the first
meeting of shareholders after he or she becomes a director (whether or not
he or she is a candidate for election).
(b) Option Price and Exercise Period. The purchase price of
Company Stock subject to such grants shall be the fair market value of a
share of such stock as of the date such Stock Option is granted. "Fair
Market Value" shall be determined pursuant to Section 5(b). Each Stock
Option granted pursuant to this Section shall have an exercise period of
ten years from the date of grant.
(c) Vesting of Options. The vesting period for such Stock
Options shall commence on the date of grant and shall end on the fifth
anniversary thereof, with 20% of the shares of Company Stock subject to
each grant becoming exercisable on each anniversary date of the grant, on a
cumulative basis. Notwithstanding the foregoing, all outstanding Stock
Options granted pursuant to this Section shall become immediately
exercisable upon a Change in Control of the Company (as defined herein).
(d) Manner of Exercise and Satisfaction of Option Price. A Non-
Employee Director may exercise and satisfy the option price of Stock
Options granted pursuant to this Section in accordance with the provisions
of Section 5(e) and (g) respectively.
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(e) Termination of Relationship With the Company, Disability or
Death.
(1) In the event a Non-Employee Director during his lifetime
ceases to serve as a Non-Employee Director for any reason other than
on account of becoming an employee of the Company or death, any Stock
Option granted pursuant to this Section which is otherwise exercisable
by the Non-Employee Director shall terminate unless exercised within
six months of the date on which he ceases to serve as a Non-Employee
Director, but in any event no later than the date of expiration of the
option exercise period; provided, however, that in the case of a Non-
Employee Director who is disabled within the meaning of Section
105(d)(4) of the Code, such period shall be one year rather than six
months.
(2) In the event of the death of the Non-Employee Director while
he is serving as a Non-Employee Director or within not more than three
months of the date on which he ceases to be a Non-Employee Director,
any Stock Option granted pursuant to this Section which was otherwise
exercisable by the Non-Employee Director at the date of death may be
exercised by his personal representative at any time prior to the
expiration of one year from the date of death, but in any event no
later than the date of expiration of the option exercise period.
7. Restricted Stock Grants
The Committee may issue or transfer shares of Company Stock to a
Participant under a grant (a "Restricted Stock Grant") pursuant to an
incentive or long range compensation plan or program approved by the
Committee and adopted by the Board of Directors of the Company. Key
Advisors shall not be eligible to receive Restricted Stock Grants. The
following provisions are applicable to Restricted Stock Grants:
(a) General Requirements. Shares of Company Stock issued
pursuant to Restricted Stock Grants will be issued for no consideration.
Subject to any other restrictions by the Committee as provided pursuant to
this Section, restrictions on the transfer of shares of Company Stock set
forth in Section 7(d) shall lapse as to up to one-third of the shares
covered by a Restricted Stock Grant on each anniversary of the date of the
grant or such other date as the Committee may approve until the
restrictions have lapsed on 100% of the shares; provided, however, that
upon a Change in Control of the Company (as defined herein), all
restrictions on the transfer of the shares which have not, prior to such
date, been forfeited shall immediately lapse. The period of years during
which the Restricted Stock Grant will remain subject to restrictions will
be designated in the Grant Letter as the "Restriction Period."
(b) Number of Shares. The Committee shall grant to each Grantee
a number of shares of Company Stock pursuant to a Restricted Stock Grant in
such manner as the Committee determines.
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<PAGE>
(c) Requirement of Employment. If the Grantee's employment
terminates during a period designated in the Grant Letter as the
Restriction Period, the Restricted Stock Grant terminates as to all shares
covered by the Grant as to which restrictions on transfer have not lapsed,
and those shares of Company Stock must be immediately returned to the
Company. The Committee may, however, provide for complete or partial
exceptions to this requirement as it deems equitable.
(d) Restrictions on Transfer and Legend on Stock Certificate.
During the Restriction Period, a Grantee may not sell, assign, transfer,
pledge, or otherwise dispose of the shares of Company Stock to which such
Restriction Period applies except to a Successor Grantee under Section 9.
Each certificate for a share issued or transferred under a Restricted Stock
Grant shall contain a legend giving appropriate notice of the restrictions
in the Grant. The Grantee shall be entitled to have the legend removed from
the stock certificate or certificates covering any of the shares subject to
restrictions when all restrictions on such shares have lapsed.
(e) Unless the Committee determines otherwise, during the
Restriction Period, the Grantee shall have the right to vote shares subject
to the Restricted Stock Grant and to receive any regular cash dividends
paid on such shares.
(f) Lapse of Restrictions. All restrictions imposed under the
Restricted Stock Grant shall lapse upon the expiration of the applicable
Restriction Period; provided, however, that upon a Change in Control of the
Company (as defined herein), all restrictions on the transfer of the shares
which have not, prior to such date, been forfeited shall immediately lapse.
In addition, the Committee may determine as to any or all Restricted Stock
Grants, that all the restrictions shall lapse, without regard to any
Restriction Period, under such circumstances as it deems equitable.
8. Stock Appreciation Rights
-------------------------
(a) The Committee may grant stock appreciation rights ("SARs") to
any Grantee in tandem with any Stock Option, for all or a portion of the
applicable Stock Option, either at the time the Stock Option is granted or
at any time thereafter while the Stock Option remains outstanding;
provided, however, that in the case of an Incentive Stock Option, such
rights may be granted only at the time of the grant of such Stock Option.
The exercise price of each SAR shall be equal to (i) the exercise price or
option price of the related Stock Option or (ii) the fair market value of a
share of Company Stock as of the date of grant of such SAR, but only in
such circumstances where the SAR is granted subsequent to the date of grant
of the related Stock Option and an exercise price established in accordance
with clause (i) above would result in the disallowance of the Company's
expense deduction pursuant to Section 162(m) of the Code and related
Treasury regulations.
(b) The number of SARs granted to a Grantee which shall be
exercisable during any given period of time shall not exceed the number of
shares of Company
8
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Stock which the Grantee may purchase upon the exercise of the related Stock
Option or Stock Options during such period of time. Upon the exercise of a
Stock Option, the SARs relating to the Company Stock covered by such Stock
Option shall terminate. Upon the exercise of SARs, the related Stock
Option shall terminate to the extent of an equal number of shares of
Company Stock.
(c) Upon a Grantee's exercise of some or all of his SARs, the
Grantee shall receive in settlement of such SARs an amount equal to the
value of the stock appreciation for the number of SARs exercised, payable
in cash, Company Stock or a combination thereof. Subject to adjustments
required pursuant to Subsection (a)(ii), the stock appreciation for an SAR
is the difference between the option price specified for the related Stock
Option and the fair market value of the underlying Company Stock on the
date of exercise of such SAR.
(d) At the time of such exercise, the Grantee shall have the
right to elect the portion of the amount to be received that shall consist
of cash and the portion that shall consist of Common Stock, which for
purposes of calculating the number of shares of Company Stock to be
received, shall be valued at their fair market value on the date of
exercise of such SARs. The Committee shall have the right to disapprove a
Grantee's election to receive cash in full or partial settlement of the
SARs exercised, and to require that shares of Company Stock be delivered in
lieu of cash. If shares of Company Stock are to be received upon exercise
of an SAR, cash shall be delivered in lieu of any fractional share.
(e) An SAR is exercisable only during the period when the Stock
Option to which it is related is also exercisable.
9. Transferability of Options and Grants
-------------------------------------
(a) Only a Participant or his or her authorized legal
representative may exercise rights under a Grant. Such persons may not
transfer those rights except by will or by the laws of descent and
distribution or, if permitted in any specific case by the Committee in
their sole discretion, pursuant to a qualified domestic relations order as
defined under the Code or Title I of ERISA or the regulations thereunder.
When a Participant dies, the personal representative or other person
entitled to succeed to the rights of the Participant ("Successor Grantee")
may exercise such rights. A Successor Grantee must furnish proof
satisfactory to the Company of his or her right to receive the Grant under
the Participant's will or under the applicable laws of descent and
distribution.
(b) Notwithstanding the foregoing, the Committee may provide, in
a Grant Letter, that a Grantee may transfer Nonqualified Stock Options to
family members or other persons or entities according to such terms as the
Committee may determine; provided that the Grantee receives no
consideration for the transfer of an Option and the transferred Option
shall continue to be subject to the same terms and conditions as were
applicable to the Option immediately before the transfer.
9
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10. Change in Control of the Company
--------------------------------
As used herein, a "Change in Control" shall be deemed to have
occurred if Rhone-Poulenc S.A. and its Affiliates (as used herein, the term
"Affiliates" shall be deemed to include any corporation, joint venture, or
other business enterprise, whether incorporated or unincorporated, which
Rhone-Poulenc S.A. directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control
with) cease to be the beneficial owners (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) of
securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company's then outstanding securities.
11. Amendment and Termination of the Plan
-------------------------------------
(a) Amendment. The Board of Directors of the Company, by written
resolution, may amend or terminate the Plan at any time; provided, however,
that any amendment that materially increases the benefits accruing to
Participants under the Plan, increases the aggregate number (or individual
limit for any single Grantee) of shares of Company Stock that may be issued
or transferred under the Plan (other than by operation of Section 3(b)), or
materially modifies the requirements as to eligibility for participation in
the Plan, shall be subject to approval by the shareholders of the Company
if required by applicable law, and provided, further, that the Board of
Directors shall not amend the Plan without shareholder approval if such
approval is required by Section 162(m) of the Code, or if such amendment
would cause the Plan or the Grant or exercise of an Incentive Stock Option
under the Plan to fail to comply with the requirements of Section 422 of
the Code including, without limitation, a reduction of the option price set
forth in Section 5(b) or an extension of the period during which an
Incentive Stock Option may be exercised as set forth in Section 5(c).
(b) Termination of Plan. The Plan shall terminate on the tenth
anniversary of its effective date unless terminated earlier by the Board of
Directors of the Company or unless extended by the Board with the approval
of the shareholders.
(c) Termination and Amendment of Outstanding Grants. A
termination or amendment of the Plan that occurs after a Grant is made
shall not result in the termination or amendment of the Grant unless the
Grantee consents or unless the Committee acts under Section 19(b). The
termination of the Plan shall not impair the power and authority of the
Committee with respect to an outstanding Grant. Whether or not the Plan
has terminated, an outstanding Grant may be terminated or amended under
Section 19(b) or may be amended by agreement of the Company and the Grantee
consistent with the Plan.
12. Funding of the Plan
-------------------
This Plan shall be unfunded. The Company shall not be required
to establish any special or separate fund or to make any other segregation
of assets to assure the
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<PAGE>
payment of any Grants under this Plan. In no event shall interest be paid
or accrued on any Grant, including unpaid installments of Grants.
13. Rights of Participants
----------------------
Nothing in this Plan shall entitle any Participant or other
person to any claim or right to be granted an award under this Plan.
Neither this Plan nor any action taken hereunder shall be construed as
giving any Participant any rights to be retained by or in the employ of the
Company.
14. Withholding of Taxes
--------------------
The Company shall have the right to deduct from all Grants paid
in cash, or from other wages paid to the employee of the Company, any
federal, state or local taxes required by law to be withheld with respect
to such cash awards and, in the case of Grants paid in Company Stock, the
Participant or other person receiving such shares shall be required to pay
to the Company the amount of any such taxes which the Company is required
to withhold with respect to such Grants or the Company shall have the right
to deduct from other wages paid to the employee by the Company the amount
of any withholding due with respect to such Grants.
15. Agreements with Participants
----------------------------
Each Grant made under this Plan shall be evidenced by a Grant
Letter containing such terms and conditions as the Committee shall approve.
16. Requirements for Issuance of Shares
-----------------------------------
No Company Stock shall be issued or transferred upon payment of
any Grant hereunder unless and until all legal requirements applicable to
the issuance or transfer of such Company Stock have been complied with to
the satisfaction of the Committee. The Committee shall have the right to
condition any Restricted Stock Grant or Stock Option made to any
Participant hereunder on such Participant's undertaking in writing to
comply with such restrictions on his subsequent disposition of such shares
of Company Stock as the Committee shall deem necessary or advisable as a
result of any applicable law, regulation or official interpretation
thereof, and certificates representing such shares may be legended to
reflect any such restrictions.
17. Headings
--------
Section headings are for reference only. In the event of a
conflict between a title and the content of a Section, the content of the
Section shall control.
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18. Effective Date and Designation of the Board
-------------------------------------------
Subject to the approval of the Company's shareholders, this Plan
shall be effective as of May 1, 1995.
19. Miscellaneous
-------------
(a) Substitute Grants. The Committee may make a Grant to an
employee of another corporation who becomes a Participant by reason of a
corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or any of its
subsidiaries in substitution for a stock option or restricted stock grant
granted by such corporation ("Substituted Stock Incentives"). The terms
and conditions of the substitute Grant may vary from the terms and
conditions required by the Plan and from those of the Substituted Stock
Incentives. The Committee shall prescribe the provisions of the substitute
Grants.
(b) Compliance with Law. The Plan, the exercise of Grants and
the obligations of the Company to issue or transfer shares of Company Stock
under Grants shall be subject to all applicable laws and to approvals by an
governmental or regulatory agency as may be required. With respect to
persons subject to Section 16 of the Exchange Act, it is the intent of the
Company that the Plan and all transactions under the Plan comply with all
applicable provisions of Rule 16b-3 or its successors under the Exchange
Act. The Committee may revoke any Grant if it is contrary to law or modify
a Grant to bring it into compliance with any valid and mandatory government
regulation. The Committee may also adopt rules regarding the withholding
of taxes on payments to Grantees. The Committee may, in its sole
discretion, agree to limit its authority under this Section.
(c) Ownership of Stock. A Grantee or Successor Grantee shall
have no rights as a shareholder with respect to any shares of Company Stock
covered by a Grant until the shares are issued or transferred to the
Grantee or Successor Grantee on the stock transfer records of the Company;
provided, however, that such individuals shall have the right to vote
shares of Company Stock subject to a Restricted Stock Grant and to the
payment of cash dividends on such shares during the Restriction Period.
12
