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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): NOVEMBER 9, 1995
COMPREHENSIVE CARE CORPORATION
(Exact name of registrant as specified in Charter)
DELAWARE 0-5751 95-2594724
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4350 VON KARMAN AVENUE, SUITE 280, NEWPORT BEACH, CALIFORNIA 92660
(Address of principal executive offices) (zip code)
(714) 798-0460
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On November 9, 1995, Comprehensive Care Corporation (the "Company")
held an Annual Meeting of Stockholders. Of the 2,214,500 shares of issued and
outstanding Common Stock entitled to vote as of the record date of September 15,
1995, 2,088,661 shares were represented in person or by proxy (94% of the total
shares entitled to vote). At the Meeting, the following business was transacted:
A. Election of One Class III Director.
Management's nominee, W. James Nicol, was elected as a Class
III Director to serve until the 1998 Annual Meeting of Stockholders and until
his successor is duly elected and qualified. With respect to the election of Mr.
Nicol as a Director, 2,070,569 shares were voted for the election and 18,092
shares withheld from voting.
B. Adoption of Comprehensive Care Corporation
1995 Incentive Plan.
The adoption of the Comprehensive Care Corporation 1995
Incentive Plan (the "Incentive Plan") was recommended by management in order to
provide the Board with sufficient flexibility regarding the forms of incentive
compensation which the Company will have at its disposal in rewarding executive
officers, key employees and consultants who render significant services to the
Company.
The Incentive Plan provides for four types of awards: stock
options, incentive stock rights, stock appreciation rights (including limited
stock appreciation rights) and restricted stock purchase agreements, as
described below.
Stock Options. Options granted under the Incentive Plan may be
either incentive stock options ("ISOs") or options which do not qualify as ISOs
("non-ISOs"). ISOs may be granted at an option price of not less than 100% of
the fair market value of the Common Stock on the date of grant, except that an
ISO granted to any person who owns capital stock representing more than 10% of
the total combined voting power of all classes of Common Stock of the Company
("10% stockholder") must be granted at an exercise price of at least 110% of the
fair market value of the Common Stock on the date of the grant. The exercise
price of the non-ISOs may not be less than 65% of the fair market value of the
Common Stock on the date of grant. ISOs granted to persons other than 10%
stockholders may be exercisable for a period of up to ten years from the date of
grant; ISOs granted to 10% stockholders may be exercisable for a period of up to
five years from the date of grant. No individual may be granted ISOs that become
exercisable in any calendar year for Common Stock having a fair market value at
the time of grant in excess of $100,000. Non-ISOs may be exercisable for a
period of up to 13 years from the date of grant.
Upon termination of employment or consulting services, an
optionee will be entitled to exercise the vested portion of an option for a
period of up to three months after the date of termination, except that if the
reason for termination was a discharge for cause, the option shall expire
immediately, and if the reason for termination was for death or permanent
disability of the optionee, the vested portion of the option shall remain
exercisable for a period of twelve months thereafter.
Incentive Stock Rights. Incentive stock rights consist of
incentive stock units equivalent to one share of Common Stock in consideration
for services performed for the Company. If the employment or consulting services
of the holder with the Company terminate prior to the end of the incentive
period relating to the units awarded, the rights shall thereupon be null and
void, except that if termination is caused by death or permanent disability, the
holder or his/her heirs, as the case may be, shall be entitled to receive a pro
rata portion of the shares represented by the units, based upon that portion of
the incentive period which shall have elapsed prior to the death or disability.
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Stock Appreciation Rights (SARS). SARs may be granted to
recipients of options under the Incentive Plan. SARs may be granted
simultaneously with, or subsequent to, the grant of a related option and may be
exercised to the extent that the related option is exercisable, except that no
general SAR (as hereinafter defined) may be exercised within a period of six
months of the date of grant of such SAR and no SAR granted with respect to an
ISO may be exercised unless the fair market value of the Common Stock on the
date of exercise exceeds the exercise price of the ISO. A holder may be granted
general SARs ("general SARs") or limited SARs ("limited SARs"), or both. General
SARs permit the holder thereof to receive an amount (in cash, shares of Common
Stock or a combination of both) equal to the number of SARs exercised multiplied
by the excess of the fair market value of the Common Stock on the exercise date
over the exercise price of the related option. Limited SARs are similar to
general SARs, except that, unless the Administrator determines otherwise, they
may be exercised only during a prescribed period following the occurrence of one
or more of the following "Change of Control" transactions: (i) the approval of
the Board of Directors of a consolidation or merger in which the Company is not
the surviving corporation, the sale of all or substantially all the assets of
the Company, or the liquidation or dissolution of the Company; (ii) the
commencement of a tender or exchange offer for the Company's Common Stock (or
securities convertible into Common Stock) without the prior consent of the
Board; (iii) the acquisition of beneficial ownership by any person or other
entity (other than the Company or any employee benefit plan sponsored by the
Company) of securities of the Company representing 25% or more of the voting
power of the Company's outstanding securities; or (iv) if during any period of
two years or less, individuals who at the beginning of such period constitute
the entire Board cease to constitute a majority of the Board, unless the
election, or the nomination for election, of each new director is approved by at
least a majority of the directors then still in office.
The exercise of any portion of either the related option or the
tandem SARs will cause a corresponding reduction in the number of shares
remaining subject to the option or the tandem SARs, thus maintaining a balance
between outstanding options and SARs.
Restricted Stock Purchase Agreements. Restricted stock purchase
agreements provide for the sale by the Company of shares of Common Stock at
prices to be determined by the Board, which shares shall be subject to
restrictions on disposition for a stated period during which the purchaser must
continue employment with the Company in order to retain the shares. Payment can
be made in cash,a promissory note or a combination of both. If termination of
employment occurs for any reason within six months after the date of purchase,
or for any reason other than death or by retirement with the consent of the
Company after the six-month period but prior to the time that the restrictions
on disposition lapse, the Company shall have the option to reacquire the shares
at the original purchase price.
Upon expiration of the applicable restricted period and the
satisfaction of any other applicable conditions, all or part of the restricted
shares and any dividends or other distributions not distributed to the holder
(the "retained distributions") thereon will become vested. Any restricted shares
and any retained distributions thereon which do not so vest will be forfeited to
the Company. If prior to the expiration of the restricted period a holder is
terminated without cause or because of a total disability (in each case as
defined in the Incentive Plan), or dies, then, unless otherwise determined by
the Administrator at the time of the grant, the restricted period applicable to
each award of restricted shares will thereupon be deemed to have expired. Unless
the Administrator determines otherwise, if a holder's employment terminates
prior to the expiration of the applicable restricted period for any reason other
than as set forth above, all restricted shares and any retained distributions
thereon will be forfeited.
In September 1995, and subject to the adoption of the Incentive
Plan, the Board of Directors granted and issued to its President, Mr. Chriss W.
Street, 100,000 restricted shares of its Common Stock, $.01 par value (the
"Restricted Shares"). The Restricted Shares are subject to vesting at rate of
5,000 shares per year (the "Annual Vested Shares") over a 20-year period
commencing December 31, 1995 and continuing at the rate of 5,000 Annual Vested
Shares per year on December 31 of each successive year for 19 years thereafter.
The vesting of the Restricted Shares is subject to acceleration upon the
occurrence of certain events of acceleration as described below. With respect to
all Restricted shares which may become vested, the Company is to pay to Mr.
Street, a bonus equivalent to the amount of the combined federal and applicable
state and city income taxes associated with the Restricted Shares that have
become vested. The grant of the Restricted Shares
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to Mr. Street was in furtherance of the desire of the Company to provide an
incentive to Mr. Street to maximize the business of the Company, and maximize
the value of the Company for all of it shareholders.
While the Restricted Shares have been issued and Mr. Street is
entitled to vote said shares, all Restricted Shares are held in escrow until
their vesting and said shares may not be sold, assigned, transferred or
hypothecated until the time they have become vested.
In addition to the vesting of the Annual Vested Shares, an
additional number of Restricted Shares shall vest as follows: (i) for each
fiscal year of the Company, 1,000 additional Restricted Shares shall vest for
each $1,000,000 of net pre-tax profit of the Company as reported for that year;
(ii) in the event the Company effects a merger, acquisition, corporate
combination or purchase of assets (an "Acquisition Event") 1,000 additional
Restricted Shares shall vest for each $1,000,000 of Acquisition Event value paid
for the Company; and (iii) as of December 31st of each year, for each 1% of
increase of market value of the Company's voting securities above 110% of the
market value as of December 31st of the preceding year, 1,000 additional
Restricted Shares shall vest.
Provision is made for the acceleration of the vesting of the
Restricted Shares upon the occurrence of (a) the approval by the stockholders of
the Company of an Approved Transaction, as defined; (b) a Control Purchase, as
defined; (c) a Board change; or (d) the failure by the Company to renew Mr.
Street's employment agreement on the conclusion of its term on December 31, 1998
or any subsequent or renewed term, on terms identical to those in the employment
agreement then prevailing. Upon the death or total disability of Mr. Street
prior to the complete vesting of the Restricted Shares, all Restricted Shares
not theretofore vested shall become vested.
Of the shares entitled to vote, 928,943 shares (89%) voted in
favor of the adoption of the Incentive Plan, 88,425 (8%) voted against the
adoption of the Incentive Plan and 29,638 (3%) abstained from voting.
C. Adoption of Amended and Restated Non-Employee Directors' Stock
Option Plan.
The Stockholders adopted and approved the amendment and
restatement of the Directors' Stock Option Plan (the "Director Plan"), which
Director Plan was originally adopted at the Company's 1994 Annual Meeting of
Stockholders. The principal amendments that take effect under the Director Plan
increase the number of shares of Common Stock under the Director Plan from
200,000 to 250,000 shares, increase the number of options to be awarded annually
to all non-employee directors from 2,500 shares to 5,000 shares; and provide for
an annual grant of Special Service Options to the Vice Chairman of the Board
(3,333) and to each committee chairman (8,333) and committee member (2,500). The
amended and restated Directors' Plan continues to provide that each non-employee
director will automatically be granted an option to purchase 10,000 shares upon
joining the Board of Directors (the "Initial Grant") and options to purchase
5,000 shares on each anniversary of the initial date of service or date of
approval, as the case may be (the "Annual Grant"). In addition to the Initial
Grant and the Annual Grant, the Director Plan provides that there shall be
granted and awarded one or more options (the "Special Service Option")
contemporaneous with each Annual Grant, as follows: (i) options to purchase
3,333 shares of Common Stock to the individual occupying the position of Vice
Chairman of the Board of Directors, (ii) options to purchase 8,333 shares of
Common Stock to each chairman of each committee of the Board of Directors, and
(iii) options to purchase 2,500 shares of Common Stock to each non-employee
director who serves on a committee of the Board of Directors (other than the
chairman of the committee).
As provided under the original Director {Plan, the exercise
price for options granted under the Director Plan continues to be 100% of the
fair market value of the Common Stock on the date of grant. Until otherwise
provided in the Plan, the exercise price of options granted under the Plan must
be paid at the time of exercise, either in cash, by delivery of shares of Common
Stock of the Company or by a combination of each. The term of each option is ten
years from the date of grant, unless terminated sooner as provided in the Plan.
The Plan is administered by a committee of the Board of Directors composed of
not fewer than one but not more than three directors who are not entitled to
participate in the Plan (the "Committee"). The
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Committee has no discretion to determine which non-employee director will
receive options or the number of shares subject to the option, the term of the
option or the exercisability of the option. However, the Committee will make all
administrative determinations and interpretations of the Plan. Options granted
under the Plan do not qualify for incentive stock option treatment.
Of the shares entitled to vote, 934,285 shares (89%) voted in
favor of the adoption of the Amended and Restated Directors' Plan, 89,047 (9%)
voted against the adoption of the Amended and Restated Directors' Plan and
23,574 (2%) abstained from voting.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
EXHIBIT NO. DESCRIPTION
10.68 Comprehensive Care Corporation 1995 Incentive Plan (filed
herewith).
10.69 Amended and Restated Non-Employee Directors' Stock Option Plan
(filed herewith).
10.70 Restricted Stock Grant between Chriss W. Street and the Company
dated November 9, 1995 (filed herewith).
99.6 Press Release dated November 13, 1995 (filed herewith).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMPREHENSIVE CARE CORPORATION
(Registrant)
By: /s/ Kerri Ruppert
---------------------------------
Kerri Ruppert, Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
Dated: November 21, 1995
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EXHIBIT 10.68
COMPREHENSIVE CARE CORPORATION 1995 INCENTIVE PLAN
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COMPREHENSIVE CARE CORPORATION
1995 INCENTIVE PLAN
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COMPREHENSIVE CARE CORPORATION
1995 INCENTIVE PLAN
1. PURPOSE
The purpose of the 1995 Incentive Plan (the "Plan") of Comprehensive
Care Corporation (the "Company") is to provide an incentive to key management
employees and consultants whose present and potential contributions to the
Company and its Subsidiaries (as such term is defined in Section 2 below) are or
will be important to the success of the Company by affording them an opportunity
to acquire a proprietary interest in the Company. It is intended that this
purpose will be effected through (a) the granting of incentive stock rights,
stock options, stock appreciation rights and limited stock appreciation rights
and (b) the sale of shares of Common Stock, $.01 par value per share, of the
Company ("Common Stock"), pursuant to restricted stock purchase agreements
(collectively, such rights, options and shares are referred to herein as
"Awards"). Stock options may be granted under the Plan which qualify as
"Incentive Stock Options" under Section 422A of the Internal Revenue Code of
1986, as it may be hereafter amended (the "Code"). Such options are sometimes
referred to as an "ISO" or collectively as "ISOs".
2. ELIGIBILITY
Awards may be made or granted to key Management employees and
consultants who are deemed to render significant services to the Company or its
Subsidiaries and who are deemed to have the potential to contribute to the
future success of the Company (such eligible persons being referred to herein as
"Eligible Participants"). The term "Management employees" includes executive
officers who are employees of the Company or of a Subsidiary, as well as other
employees of the Company and its Subsidiaries. A director of the Company or of
any Subsidiary who is not also an employee of the Company or of one of its
Subsidiaries will not be eligible to receive any Awards under the Plan. No ISO
shall be granted to any person who is not an employee of the Company or a
Subsidiary at the time of grant. No ISO shall be granted to an employee who, at
the time of option is granted, owns stock possessing more than 10% of the total
combined voting power of all classes of capital stock of the employer
corporation (as such term is used in the Code) or any Parent or Subsidiary of
the employer corporation, provided, however, that an ISO may be granted to such
an employee, if at the time such ISO is granted, the option price is at least
110% of the fair market value of stock subject to the ISO on the date of grant
(as determined pursuant to Subsection 8(a) hereof) and such ISO is by its terms
not exercisable after the expiration of five years from the date such option is
granted. The terms "Subsidiary" and "Parent" as used herein shall have the
meanings given them in Section 425 of the Code. Awards may be made to employees
or consultants who hold or have held options, rights or shares under this Plan
or any other plans of the Company.
3. STOCK SUBJECT TO THE PLAN
The shares that may be issued upon exercise of options and rights and
which may be sold under the Plan shall not exceed in the aggregate of 450,000
shares of Common Stock, as adjusted to give effect to the anti-dilution
provisions contained in Section 12 hereof. Such shares may be authorized and
unissued shares, or shares purchased by the Company and reserved for issuance
under the Plan. If a stock option or incentive stock right for any reason
expires or is terminated without having been exercised in full, or if shares
issued pursuant to restricted stock purchase agreements are repurchased by the
Company in accordance with the terms thereof, those shares relating to an
unexercised stock option or incentive stock rights or shares which have been
repurchased shall again become available for grant and/or sale under the Plan.
4. AWARDS UNDER THE PLAN
Awards under the Plan may be of five types. They are "incentive stock
rights", "stock options", "stock appreciation rights", "limited stock
appreciation rights", and "restricted stock purchases". "Incentive stock rights"
are composed of incentive stock units which give the holder the right to
receive, without payment of cash or property to the Company, shares of Common
Stock, subject to the terms, conditions and restrictions described in Section 7
hereof. An option, including an ISO, is a right to purchase Common Stock in
accordance with Section 8 hereof. A "stock appreciation right" is a right given
to a holder of a stock option to receive, upon surrender of all or a portion of
his stock option, without payment of cash or property to the Company, a number
of shares of Common Stock of the Company
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and/or cash, determined pursuant to a formula in accordance with Section 9
hereof. A "limited stock appreciation right" is a stock appreciation right which
is exercisable only upon the terms, conditions and restrictions set forth in
Section 10 hereof. A "restricted stock purchase" is the purchase, at a price
determined by the Board of Directors or Committee (as hereinafter defined), of
Common Stock, which is nontransferable and subject to substantial risk of
forfeiture until specific conditions based on continuing employment or
achievement of preestablished performance objectives are met. All references to
"cash" herein shall mean "cash or certified check".
5. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors or by a
committee (the "Option Committee") of not less than two directors of the Company
appointed by the Board of Directors of the Company (the "Board of Directors")
for such term as the Board of Directors may determine. The Board of Directors
may, from time to time, remove members from, or add members to, the Option
Committee. The administrator of the Plan shall hereinafter be referred to as the
"Plan Administrator". In the event that the Plan Administrator is an Option
Committee of the Board of Directors, none of the members of such Option
Committee shall be an officer or other full-time employee of the Company. It is
the intention of the Company that each member of the Option Committee shall be a
"disinterested person" as that term is defined and interpreted pursuant to Rule
16b-3(c)(2) or any successor rule thereto promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Action by the Option
Committee shall require the affirmative vote of a majority of all its members.
In the event that the Plan Administrator is the Board of Directors, and a member
of the Board of Directors may be eligible, subject to the restrictions in
Section 2, to participate in or receive or hold options under the Plan, no
member of the Board of Directors or the Option Committee shall vote with respect
to the granting of options hereunder to himself or herself, as the case may be,
and, if state corporate law does not permit a committee to grant options to
directors, then any option granted under the Plan to a director for his or her
services as such shall be approved by the full Board of Directors.
With respect to grants made under the Plan to officers and directors of
the Company who are subject to Section 16 of the Exchange Act, the Plan
Administrator shall be constituted at all times so as to meet the requirements
of Rule 16b-3 so long as any of the Company's equity securities are registered
pursuant to Section 12(b) or 12(g) of the Exchange Act.
(b) Subject to the terms and conditions of the Plan, the Plan
Administrator shall have the power:
(i) To determine from time to time the Awards to be granted to
eligible persons under the Plan and to prescribe the terms and
provisions (which need not be identical) of Awards granted under the
Plan to such persons;
(ii) To construe and interpret the Plan and grants thereunder
and in its discretion have the authority: (A) to determine, upon review
of relevant information, the fair market value of the Common Stock; (B)
to determine the exercise price per share of stock options to be
granted; (C) to determine the eligible participants to whom, and time
or times at which, options shall be granted and the number of shares to
be issuable upon exercise of each stock option; (D) to construe and
interpret the Plan; (E) to prescribe, amend and rescind rules and
regulations relating to the Plan; (F) to determine the terms and
provisions of each grant (which need not be identical); and (G) to make
all other determinations necessary to or advisable for the
administration of the Plan. Notwithstanding the foregoing, in the event
any employee of the Company or any of its Subsidiaries granted an
option under the Plan is, at the time of such grant, a member of the
Board of Directors of the Company, the grant of such grant shall, in
the event the Board of Directors at the time such option is granted is
not deemed to satisfy the requirement of Rule 16b-3(b)(2)(i) or (ii)
promulgated under the Act, be subject to the approval of an auxiliary
committee consisting of not less than two persons who qualify as
"disinterested persons" within the meaning of Rule 16b-3(d)(3)
promulgated under the Act. All decisions and determinations by the
Option Committee in the exercise of this power shall be final and
binding upon the Company and the Optionees; and
(iii) Generally, to exercise such powers and to perform such acts
as are deemed necessary or expedient to promote the best interests of
the Company with respect to the Plan.
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6. DURATION OF THE PLAN
The Plan shall become effective upon the approval of the requisite vote
of the stockholders of the Company. The Plan shall remain in effect for a term
of ten (10) years from September 1, 1995 unless sooner terminated under Section
20 hereof. Notwithstanding any of the foregoing to the contrary, the Plan
Administrator shall have the authority to amend the Plan pursuant to Section 20
hereof; provided, however, that Awards already made shall remain in full force
and effect as if the Plan had not been amended or terminated.
7. INCENTIVE STOCK RIGHTS
The Plan Administrator, in its discretion, may grant to Eligible
Participants incentive stock rights composed of incentive stock units. Incentive
stock rights shall be granted pursuant to incentive stock rights agreements in
such form, and not inconsistent with the Plan, as the Plan Administrator shall
approve from time to time and shall include substantially the following terms
and conditions as determined by the Plan Administrator:
(a) Incentive Stock Units. An incentive stock rights agreement
shall specify the number of incentive stock units to which it pertains.
Each incentive stock unit shall be equivalent to one share of Common
Stock. Each incentive stock unit shall entitle the holder thereof to
receive, without payment of cash or property to the Company, one share
of Common Stock in consideration for services performed for the Company
or any Subsidiary by the Eligible Participant, subject to the lapse of
the incentive periods (as hereinafter defined).
(b) Incentive Period. The holder of incentive stock rights shall
be entitled to receive shares of Common Stock only after the lapse of
such incentive periods, and in such manner, as shall be fixed in the
discretion of the Plan Administrator at the time of the grant of such
incentive stock rights. (Such period or periods so fixed is or are
herein referred to as an "incentive period".) To the extent the holder
of incentive stock rights receives shares of Common Stock on the lapse
of an incentive period, an equivalent number of incentive stock units
subject to such rights shall be deemed to have been discharged.
(c) Termination by Reason of Death or Disability. In the event
that the recipient of incentive stock rights ceases to be and employee
or consultant of the Company or any of its Subsidiaries during an
incentive period due to death or permanent disability (as determined by
the Plan Administrator), the holder of incentive stock rights or, in
the case of the death of the holder, the personal representatives,
heirs or legatees of such holder, shall be entitled to receive a number
of shares equal to an amount determined by multiplying the total number
of incentive stock units applicable to such incentive period by a
fraction, the numerator of which shall be the number of full calendar
months between the date of grant of the incentive stock rights and the
date of such termination and the denominator of which shall be the
number of full calendar months between the date of grant and the date
such incentive period for such units would, but for such termination,
have lapsed. For purposes of this Subsection 7(c), this shall
constitute a lapse of the incentive period with respect to the number
of incentive stock units equal to the number of shares issued. Units
upon which the incentive period do not lapse pursuant to the foregoing
sentence shall terminate and be null and void on the date on which the
recipient cases to be employed by or act as a consultant to the Company
or any of its Subsidiaries.
(d) Termination for Any Other Reason. In the event that the
employment or retention as a consultant by the Company of the recipient
to whom incentive stock rights have been issued under the Plan
terminates for any reason (including dismissal by the Company with or
without cause), other than death or permanent disability, such rights
as to which the incentive period has not lapsed shall terminate and be
null and void on termination of the relationship.
(e) Issuance of Shares. Upon the lapse of an incentive period,
the Company shall deliver to the holder of the related incentive stock
unit a certificate or certificates representing the number of shares of
Common Stock equal to the number of incentive stock units with respect
to which an incentive period has lapsed. The Company shall pay all
applicable transfer or issue taxes.
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8. OPTIONS
Options shall be evidenced by stock option agreements in such form, and
not inconsistent with the Plan, as the Plan Administrator shall approve from
time to time, which agreements shall contain in substance the following terms
and conditions:
(a) Option Price; Number of Shares. The option price, which shall
be approved by the Plan Administrator, shall in no event be less than
one hundred percent (100%), in the case of ISOs, and sixty-five percent
(65%), in the case of other options, of the fair market value of the
Common Stock at the time the option is granted. The fair market value
of the Common Stock, for the purpose of the Plan, shall mean: (i) if
the Common Stock is traded on a national securities exchange or on the
NASDAQ National Market System ("NMS"), the per share closing price of
the Common Stock on the principal securities exchange on which they are
listed or on NMS, as the case may be, on the date of grant (or if there
is no closing price for such date of grant, then the last preceding
business day on which there was a closing price); or (ii) if the Common
Stock is traded in the over-the-counter market and quotation are
published on the NASDAQ quotation system (but not on NMS), the mean
between the per share closing bid and asked prices of the Common Stock
on the date of grant as reported by NASDAQ (or if there are no closing
bid and asked prices for such date of grant, then the last preceding
business day on which there were closing bid and asked prices); or
(iii) if the Common Stock is traded in the over-the-counter market but
bid and asked quotations are not published on NASDAQ, the mean between
the closing bid and asked prices per share for the Common Stock as
furnished by a broker-dealer which regularly furnishes price quotations
for the Common Stock.
The option agreement shall specify the total number of shares to
which it pertains and whether such options are ISOs or are not ISOs.
With respect to ISOs granted under the Plan, the aggregate fair market
value (determined at the time an ISO is granted) of the shares of
Common Stock with respect to which ISOs are exercisable for the first
time by such employee during any calendar year shall not exceed
$100,000 under all plans of the employer corporation or its Parents or
Subsidiaries.
(b) Waiting Period and Exercise Dates. At the time an option is
granted, the Plan Administrator will determine the terms and conditions
to be satisfied before shares may be purchased, including the dates on
which shares subject to the option may first be purchased. (The period
from the date of grant of an option until the date on which such option
may first be exercised is referred to herein as the "waiting period")
At the time an option is granted, the Plan Administrator shall fix the
period within which it may be exercised which shall not be less than
six (6) months nor, for an ISO, more than ten (10) years from the date
of grant or for a non-ISO for more than thirteen (13) years from the
date of grant. (Any of such periods is referred to herein as the
"exercise price.")
(c) Form and Time of Payment. Stock purchased pursuant to an
option agreement shall be paid for at the time of purchase either in
cash or by certified check or, in the discretion of the Plan
Administrator, as set forth in the stock option agreement (i) in a
combination of cash and a promissory note, (ii) through the delivery of
shares of Common Stock, or (iii) in a combination of the methods
described above. Upon receipt of payment, the Company shall, without
transfer or issue tax to the option holder or other person entitled to
exercise the options, deliver to the option holder (or such other
person) a certificate or certificates for the shares so purchased.
(d) Effect of Termination or Death. In the event that an option
holder ceases to be an employee or consultant of the Company or of any
of its Subsidiaries for any reason other than permanent disability (as
determined by the Plan Administrator) and death, any option, including
any unexercised portion thereof, which was otherwise exercisable on the
date of termination, shall expire unless exercised within a period of
three months from the date on which the option holder ceased to be so
employed, but in no event after the expiration of the exercise period;
provided, however, that, if the Plan Administrator shall determine that
an option holder shall have been discharged for cause, options granted
and not yet exercised shall terminate immediately and be null and void
as of the date of discharge. In the event of the death of an option
holder during this three month period, the option shall be exercisable
by his or her personal representatives, heirs or legatees to the same
extent that the option holder could have exercised the option if he or
she had not died, for the three months from the date of death, but in
no event after the expiration of the exercise period. In the event of
the permanent disability of an option holder while an employee or
consultant of the Company or of any Subsidiary, any option granted to
such employee or consultant shall be exercisable for twelve (12) months
after the date of permanent disability, but in no event after the
expiration of the exercise period. In the event of the death of an
option holder
5
<PAGE> 7
while an employee or consultant of the Company or any of its
Subsidiaries, or during the twelve (12) month period after the date of
permanent disability of the option holder, that portion of the option
which had become exercisable on the date of death shall be exercisable
by his or her personal representatives, heirs or legatees at any time
prior to the expiration of one (1) year from the date of the death of
the option holder, but in no event after the expiration of the exercise
period. Except as the Plan Administrator shall provide otherwise, in
the event an option holder ceases to be an employee or consultant of
the Company or of any Subsidiary for any reason, including death, prior
to the lapse of the waiting period, his or her option shall terminate
and be null and void.
(e) Other Provisions. Each option granted under the Plan may
contain such other terms, provisions, and conditions not inconsistent
with the Plan as may be determined by the Plan Administrator.
9. STOCK APPRECIATION RIGHTS
The Plan Administrator may grant, in its discretion, stock appreciation
rights to Eligible Participants who are granted stock options under the Plan.
Such rights shall be granted pursuant to a stock appreciation rights agreement
in such for, and not inconsistent with the Plan, as the Plan Administrator shall
approve from time to time (and which may be incorporated in the stock option
agreement governing the terms of the related option) and shall include
substantially the following terms and conditions as the Plan Administrator shall
determine:
(a) Grant. Each right shall relate to a specific option granted
under the Plan and shall be granted to the option holder either
concurrently with the grant of such option, or at such later time as
determined by the Plan Administrator.
(b) Exercise. A stock appreciation right shall entitle an option
holder to receive, without payment of cash or property to the Company,
a number of shares of Common Stock, cash, or a combination thereof in
the amount determined pursuant to Subsection 9(c) below. The Plan
Administrator shall determine whether such payment shall be made in
Common Stock, cash, or a combination thereof. Unless otherwise
determine by the Plan Administrator, a right shall be exercisable to no
greater extent nor upon any more favorable conditions than its related
option is exercisable under Subsection 8(b) hereof. An option holder
wishing to exercise a right in accordance with this Subsection 9(b)
shall give written notice of such exercise to the Company, which notice
shall state that the holder of the right elects to exercise the right
and the number of shares in respect of which the right is being
exercised. The effective date of exercise of a right shall be the date
on which the Company shall have received such notice. Upon receipt of
such notice, the Company shall: (i) deliver to the option holder or
other person entitled to exercise the right, a certificate or
certificates representing such shares; and/or (ii) pay cash. The
Company shall pay all applicable transfer or issue taxes.
Notwithstanding the provisions of this section, no stock appreciation
right may be exercised within a period of six months of the date of
grant of such stock appreciation right and no stock appreciation right
granted with respect to an ISO may be exercised unless the fair market
value of the Common Stock on the date of exercise exceeds the exercise
price of an ISO.
(c) Number of Shares or Amount of Cash. The number of shares
which shall be issued pursuant to the exercise of a stock appreciation
right shall be determined by dividing (i) that portion, as elected by
the option holder, of the total number of shares which the option
holder is eligible to purchase pursuant to Subsection 8(b) hereof (and
as adjusted pursuant to Section 12 hereof), multiplied by the amount
(if any) by which the fair market value (as determined in accordance
with Subsection 8(a) hereof) of a share of Common Stock on the exercise
date exceeds the option exercise price of the related option; by (ii)
the fair market value of a share of Common Stock on the exercise date.
In lieu of issuing shares of Common Stock on the exercise of a right,
the Plan Administrator may elect to pay the cash equivalent of the fair
market value on the exercise date of any or all the shares which would
otherwise be issuable on exercise of the right. No fractional shares
shall be issued under this Subsection 9(c). In lieu of the fractional
shares, the option holder shall be entitled to receive a cash
adjustment equal to the same fraction of the fair market value per
share of Common Stock on the date of exercise.
(d) Effect of Exercise. Upon the exercise of stock appreciations
rights, the related option shall be considered to have been exercised
to the extent of the number of shares of Common Stock with respect to
which such stock appreciation rights are exercised, and shall be
considered to have been exercised to that extent for purposes of
determining the number of shares of Common Stock available for the
grant of options under the Plan. Upon the exercise or termination of
the related option, the stock appreciation rights with respect to such
related option shall be considered to have been exercised or terminated
to the extent of the number of shares of Common Stock with respect to
which the related option was so exercised or terminated.
6
<PAGE> 8
(e) Effect of Termination or Death. In the event that an option
holder ceases to be an employee or consultant of the Company or any of
its Subsidiaries for any reason, his stock appreciation rights shall be
exercisable only to the extent and upon the conditions that its related
option is exercisable under Subsection 8(d).
10. LIMITED STOCK APPRECIATION RIGHTS
The Plan Administrator may grant, in its discretion, limited sock
appreciation rights ("Limited Rights") to the holder of any option with respect
to all or a portion of the shares subject to such option. Such Limited Rights
shall be granted pursuant to an agreement in such form, and not inconsistent
with the Plan, as the Plan Administrator shall approve from time to time (and
which may be incorporated in the stock option agreements governing the terms of
the related option) and shall include substantially the following terms and
conditions as the Plan Administrator shall determine:
(a) Grants. A Limited Right may be granted concurrently with the
grant of the related option or at such later time as determined by the
Plan Administrator.
(b) Exercise. Unless otherwise determined by the Plan
Administrator, a Limited Right may be exercised only during the period
(a) beginning on the first day following any one of (i) the date of
approval by the stockholders of the Company of an Approved Transaction
(as defined in Subsection 10(e) below), (ii) the date of a Control
Purchase (as defined in Subsection 10(e) below), or (iii) the date of a
Board Change (as defined in Subsection 10(e) below); and (b) ending on
the thirtieth day (or such other date specified in the stock option
agreement) following such date (such period herein referred to as the
"Limited Right Exercise Period"). Each Limited Right shall be
exercisable during the Limited Right Exercise Period only to the extent
the related option is then exercisable, and in no event after the
termination of the related option. Limited Rights granted under the
Plan shall be exercisable in whole or in part by notice to the Company.
Such notice shall state that the holder of the Limited Rights elects to
exercise the Limited Rights and the number of shares in respect of
which the Limited Rights are being exercised. The effective date of
exercise of a Limited Right shall be deemed to be the date on which the
Company shall have received such notice.
(c) Amount Paid Upon Exercise. Upon the exercise of Limited
Rights, the holder shall receive in cash an amount equal to the excess
of the fair market value (as determined pursuant to Subsection 8(a)
above) on the date of exercise of such Limited Rights of each share of
Common Stock with respect to which such Limited Right shall have been
exercised over the exercise price per share of Common Stock subject to
the related option.
(d) Effect of Exercise. Upon the exercise of Limited Rights, the
related option shall be considered to have been exercised to the extent
of the number of shares of Common Stock with respect to which such
Limited Rights are exercised, and shall be considered to have been
exercised to that extent for purposes of determining the number of
shares of Common Stock available for the grant of options under the
Plan. Upon the exercise of termination of the related option, the
Limited Rights with respect to such related option shall be considered
to have been exercised or terminated to the extent of the number of
shares of Common Stock with respect to which the related option was so
exercised or terminated.
(e) Definitions. For purposes of this Section 10:
(i) An "Approved Transaction" shall mean (A) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of
Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of
Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (B) any sale, lease, exchange, or
other transfer (in one transaction or a series of related transactions)
of all, or substantially all, of the assets of the Company, or (c) the
adoption of any plan or proposal for the liquidation or dissolution of
the Company.
(ii) A "Control Purchase" shall mean circumstances in which
any person (as such term is defined in Sections 13(d)(3) and 14(d)(2)
of the Exchange Act), corporation or other entity (other than the
Company or any employee benefit plan
7
<PAGE> 9
sponsored by the Company or any Subsidiary) (A) shall purchase any
Common Stock (or securities convertible into the Company's Common
Stock) for cash, securities or any other consideration pursuant to a
tender offer or exchange offer, without the prior consent of the Board
of Directors, or (B) shall become the "beneficial owner" (as such term
is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty-five
percent (25%) or more of the combined voting power of the then
outstanding securities of the Company ordinarily (and apart from rights
occurring under special circumstances) having the right to vote in the
election of directors (calculated as provided in paragraph (d) of such
Rule 13d-3 in the case of rights to acquire the Company's securities).
(iii) A "Board Change" shall mean circumstances in which,
during any period of two consecutive years or less, individuals who at
the beginning of such period constitute the entire Board shall cease
for any reason to constitute a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least a majority of the directors
then still in office.
11. RESTRICTED STOCK PURCHASES
The Plan Administrator may authorize, in its discretion, the issuance
of restricted shares of Common Stock to Eligible Participants pursuant to
restricted share agreements in such form, and not inconsistent with the Plan, as
the Plan Administrator shall approve from time to time. Any amount of restricted
shares issued shall be subject to the following terms:
(a) Restricted Period and Price. The Plan Administrator shall
prescribe restrictions, terms and conditions, including but not limited
to the period ("restricted period") during which the holder must
continue to render services to the Company in order to retain the
restricted shares. The Plan Administrator shall determine the price, if
any, to be paid by the holder for the restricted shares. Upon
forfeiture of any restricted shares, any amount paid by the holder
shall be repaid in full by the Company.
(b) Issuance of Restricted Shares. Restricted shares, when
issued, will be represented by a stock certificate or certificates
registered in the name of the holder to whom such restricted shares
shall have been awarded. During the restricted period, certificates
representing the restricted shares and any securities constituting
retained distributions (as defined below in Subsection 10(c)) shall
bear a restrictive legend to the effect that ownership of the
restricted shares, and the enjoyment of all rights appurtenant thereto,
are subject to the restrictions, terms and conditions provided in the
Plan and the applicable shares agreement. Such certificates shall be
deposited by such holder with the Company, together with stock powers
or other instruments of assignment, each endorsed in blank, which will
permit transfer to the Company of all or any portion of the restricted
shares and any retained distributions that shall be forfeited or that
shall not become vested in accordance with the Plan and the applicable
restricted shares agreement.
(c) Rights With Respect to Restricted Shares. Restricted shares
shall constitute issued and outstanding shares of Common Stock for all
corporate purposes. The holder will have the right to vote such
restricted shares, to receive and retain all regular cash dividends,
and such other distributions as the Plan Administrator may in its sole
discretion designate, pay, or distribute on such restricted shares and
to exercise all other rights, powers and privileges of a holder of
Common Stock with respect to such restricted shares, with the exception
that (i) the holder will not be entitled to delivery of the stock
certificate or certificates representing such restricted shares until
the restricted period shall have expired and unless all other vesting
requirements with respect thereto shall have been fulfilled; (ii) the
Company will retain custody of the stock certificate or certificates
representing the restricted shares during the restricted period; (iii)
other than regular cash dividends and such other distributions as the
Board may in its sole discretion designate, the Company will retain
custody of all distributions ("retained distributions") made or
declared with respect to the restricted shares (and such retained
distributions will be subject to the same restrictions, terms and
conditions as are applicable to the restricted shares) until such time,
if ever, as the restricted shares with respect to which such retained
distributions shall have been made, paid or declared shall have become
vested, and such retained distributions shall not bear interest or be
segregated in separate accounts; (iv) the holder may not sell, assign,
transfer, pledge, exchange, encumber or dispose of the restricted
shares or any retained distributions during the restricted period; and
(v) a breach of any restrictions, terms or conditions provided in the
Plan or established by the Board with respect to any restricted shares
or retained distributions will cause a forfeiture of such restricted
shares and any retained distributions with respect thereto.
8
<PAGE> 10
(d) Completion of Restricted Period. On the last day of the
restricted period with respect to each Award of restricted shares, and
the satisfaction of any other applicable restrictions, terms and
conditions (i) all or part of such restricted shares shall become
vested and (ii) any retained distributions with respect to such
restricted shares shall become vested. Unless the Plan Administrator
determines otherwise, any such restricted shares and retained
distributions that shall not have become vested upon the termination of
employment of the holder shall be forfeited to the Company and the
holder shall not thereafter have any rights (including dividend and
voting rights) with respect to such restricted shares and retained
distributions that shall have been so forfeited, provided, however,
that if the holder shall die, become totally disabled or is terminated
by the Company without cause during a restricted period with respect to
any restricted shares, then, unless the restricted share agreement
relating to such shares provided otherwise, the restricted period
applicable to each Award of restricted shares to such holder shall be
deemed to have expired and all such restricted shares and retained
distributions shall become vested.
12. RECAPITALIZATION
In the event that dividends are payable in Common Stock or in the event
there are splits, subdivisions or combinations of shares of Common Stock, the
number of shares available under the Plan shall be increased or decreased
proportionately, as the case may be, and the number of shares delivered upon the
exercise thereafter of any stock option, stock appreciation right or limited
stock appreciation right, upon distribution pursuant to incentive stock rights
theretofore granted or upon sale pursuant to restricted stock purchase
agreements theretofore entered into, and the price per share with respect
thereto, shall be increased or decreased proportionately, as the case may be,
without change in the aggregate purchase price (where applicable).
13. ACCELERATION
Notwithstanding any contrary waiting period in any stock option
agreement, any incentive period in any incentive stock rights agreements or any
Restricted Period with respect to any shares issued pursuant to any restricted
stock purchase agreement, or in the Plan, but subject to any determination by
the Plan Administrator to provide otherwise at the time such Award is granted or
subsequent thereto, each outstanding option granted under the Plan shall become
exercisable in full for the aggregate number of shares covered thereby, and each
share issuable upon lapse of an incentive period or issued pursuant to a
restricted stock purchase agreement shall vest unconditionally on the first day
following the occurrence of any of the following: (a) the approval by the
stockholders of the Company of an Approved Transaction; (b) a Control Purchase;
or (c) a Board Change.
14. CONTINUATION OF RELATIONSHIP: LEAVE OF ABSENCE.
(a) Nothing in the Plan or any Award made hereunder shall interfere
with or limit in any way the right of the Company or of any Subsidiary to
terminate any Eligible Participant's employment at any time, nor confer upon any
Eligible Participant any right to continue any such relation with the Company or
Subsidiary.
(b) For purposes of the Plan, a transfer of an employee from the
Company to a Subsidiary or vice versa, or from one Subsidiary to another, or a
leave of absence duly authorized by the Company shall not be deemed a
termination of employment or a break in an incentive, waiting, exercise or
Restricted Period, as the case may be. In the case of any employee on an
approved leave of absence, the Plan Administrator may make such provisions with
respect to continuance of incentive stock rights, options or shares previously
granted while on leave from the employ of the Company or a Subsidiary as it may
deem equitable.
15. GENERAL RESTRICTION
Each Award made under the Plan shall be subject to the requirement
that, if at any time the Plan Administrator shall determine, in its sole and
subjective discretion, that the registration qualification or listing of the
shares subject to such Award upon a securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting or
exercise of such Award, the Company shall not be required to issue such shares
unless such registration, qualification, listing, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Plan
Administrator. Nothing in the Plan or any agreement or grant hereunder shall
obligate the Company to effect any such registration, qualification or listing.
9
<PAGE> 11
16. RIGHTS AS A STOCKHOLDER
The holder of a stock option, incentive stock right, stock appreciation
right or limited stock appreciation right shall have no rights as a stockholder
with respect to any shares covered by the stock option, incentive stock right,
stock appreciation right or limited stock appreciation right, as the case may
be, until the date of issuance of a stock certificate to him for such shares
related to the exercise or discharge thereof. No adjustment shall be made for
the dividends or other rights for which the record date is prior to the date
such stock certificate is issued.
17. NON-ASSIGNABILITY OF INCENTIVE STOCK RIGHTS, STOCK OPTIONS, STOCK
APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS
No incentive stock right, stock option, stock appreciation right or
limited stock appreciation right shall be assignable or transferable by an
Eligible Participant except by will or by the laws of descent and distribution
and during the lifetime of an Eligible Participant may only be exercised by him.
Notwithstanding the foregoing, to the extent permitted by applicable law and
Rule 16b-3, the Plan Administrator may permit a recipient of an Award to (i)
designate in writing during the Participant's lifetime a beneficiary to receive
and exercise the Award in the event of such Participant's death or (ii) transfer
an Award granted hereunder.
18. WITHHOLDING TAXES
Whenever under the Plan shares are to be issued in satisfaction of
stock options, incentive stock rights, stock appreciation rights or limited
stock appreciation rights granted thereunder, or pursuant to restricted stock
purchases, the Company shall have the right to require the Eligible Participant
to remit to the Company an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to the delivery of any certificates for such
shares or at such later time as when the Company any determine that such taxes
are due. Whenever under the Plan payments are to be made in cash, such payment
shall be net of an amount sufficient to satisfy federal, state and local
withholding tax requirements.
19. NON-EXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board of Directors nor any
provision of the Plan shall be construed as creating any limitations on the
power of the Plan Administrator to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.
20. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Plan Administrator may at any time amend, alter, suspend or
discontinue the Plan, but no amendment, alteration, suspension or discontinuance
shall be made which would impair the rights of any recipient of a stock option,
incentive stock right, stock appreciation right or limited stock appreciation
right under any agreement theretofore entered into hereunder, without his
consent, or which, without the requisite vote of the stockholders of the Company
approving such action, would:
(a) except as is provided in Section 12 of the Plan, increase the
total number of shares of Common Stock reserved for the purposes of the
Plan; or
(b) extend the duration of the Plan; or
(c) materially increase the benefits accruing to participants
under the Plan; or
(d) change the category of persons who can be Eligible
Participants under the Plan.
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<PAGE> 12
Without limiting the foregoing, the Plan Administrator may, any time or
from time to time, authorize the Company, with the consent of the respective
recipients, to issue new options or rights in exchange for the surrender and
cancellation of any or all outstanding options or rights.
21. LIMITATIONS ON EXERCISE
Notwithstanding anything to the contrary contained in the Plan, any
agreement evidencing any Award hereunder may contain such provisions as the
Board of Directors deems appropriate to ensure that the penalty provisions of
Section 4999 of the Code, or any successor thereto, will not apply to any stock
or cash received by the holder from the Company.
22. LIMITATIONS ON AWARDS
Notwithstanding anything to the contrary contained in the plan, no
Eligible Participant may be granted aggregate Awards in any calendar year that
consist of stock or the right to purchase stock that exceeds 200,000 shares.
23. GOVERNING LAW
The Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware.
COMPREHENSIVE CARE CORPORATION
By: /s/ CHRISS W. STREET
--------------------------
Title: Chairman, President and
--------------------------
Chief Executive Officer
--------------------------
Attest: /s/ KERRI RUPPERT
--------------------------
Secretary
[CORPORATE SEAL]
11
<PAGE> 1
EXHIBIT 10.69
COMPREHENSIVE CARE CORPORATION
AMENDED AND RESTATED
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
<PAGE> 2
COMPREHENSIVE CARE CORPORATION
AMENDED AND RESTATED
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2 THE STOCK OPTION PLAN . . . . . . . . . . . . . . . . . . . . . 3
2.1 The Purpose of the Plan . . . . . . . . . . . . . . . . 3
2.2 Stock Subject to the Plan . . . . . . . . . . . . . . . 3
2.3 Administration of the Plan . . . . . . . . . . . . . . . 3
2.4 Eligibility . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3 TERMS AND CONDITIONS OF OPTIONS . . . . . . . . . . . . . . . . 3
3.1 Number of Option Shares . . . . . . . . . . . . . . . . 3
3.2 Type of Option . . . . . . . . . . . . . . . . . . . . . 4
3.3 Exercise Price . . . . . . . . . . . . . . . . . . . . . 4
3.4 Option Term . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Exercisability . . . . . . . . . . . . . . . . . . . . . 4
3.6 Payment . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Nonassignability . . . . . . . . . . . . . . . . . . . . 5
3.8 Option Agreement . . . . . . . . . . . . . . . . . . . . 5
SECTION 4 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Changes in Capitalization; Merger; Liquidation . . . . . 5
4.2 Right to Remove Director . . . . . . . . . . . . . . . . 6
4.3 Restrictions on Delivery and Sale of Shares; Legends . . 6
4.4 Non-alienation of Benefits . . . . . . . . . . . . . . . 6
4.5 Termination and Amendment of the Plan . . . . . . . . . 6
4.6 Stockholder Approval . . . . . . . . . . . . . . . . . . 6
4.7 Choice of Law . . . . . . . . . . . . . . . . . . . . . 6
4.8 Effective Date of Plan . . . . . . . . . . . . . . . . . 6
</TABLE>
<PAGE> 4
COMPREHENSIVE CARE CORPORATION
AMENDED AND RESTATED
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
SECTION 1 DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun
shall be deemed to include the feminine, and the singular to include the
plural, unless the context clearly indicates otherwise, and the following
capitalized words and phrases are used herein with the meaning thereafter
ascribed:
(a) "Administrator" means the Director Plan Committee
established and provided for in Section 2.3 hereof.
(b) "Board of Directors" means the board of directors of
the Company.
(c) "Change in Control" means any event that pursuant to
the Company's Certificate of Incorporation, as amended from time to time,
requires the affirmative vote of the holders of not less than eighty percent
(80%) of the Voting Stock (as defined therein); provided, however, that no
event shall constitute a Change of Control if approved by the Board of
Directors a majority of whom are present Directors and new Directors. For
purposes of the preceding sentence, the term "present Directors" means
individuals who as of the date this Plan is adopted were members of the Board
of Directors and the term "new Directors" means any Director whose election by
the Board of Directors in the event of vacancy or whose nomination for election
was approved by a vote of at least three-fourths of the Directors then still in
office who are present Directors and new Directors; provided that any Director
initially elected to the Board of Directors solely to avoid or settle a
threatened or actual proxy contest shall in no event be deemed to be a new
Director.
(d) "Chairman" means the individual designated as
Chairman of a committee of the Board of Directors.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Committee" means any committee of the Board of
Directors established by resolution of, the Board of Directors.
(g) "Company" means Comprehensive Care Corporation, a
Delaware corporation.
(h) "Director" means any individual who is a member of
the Board.
(i) "Effective Date" means the date the Plan is approved
by the stockholders of the Company.
(j) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(k) "Fair Market Value" with regard to a date means the
closing price of the Stock on the last trading date prior to that date as
reported by the New York Stock Exchange (or, if applicable, as reported by any
other national securities exchange selected by the Plan Administrator on which
the shares of Stock are then actively traded).
(l) "Option" means a non-qualified stock option granted
under the Plan to buy shares of Stock.
(m) "Participant" means an individual who, pursuant to
Plan Section 2.4, is eligible to participate in the Plan.
(n) "Plan" means the Comprehensive Care Corporation
Non-Employee Directors' Stock Option Plan.
(o) "Stock" means the Company's common stock, $.01 par
value.
2
<PAGE> 5
(p) "Non-Employee Director" means a director who is not a
regular full-time employee of the Company or any subsidiary of the Company.
(q) "Vice-Chairman" means the individual then occupying
the position of Vice-Chairman of the Board of Directors, having been designated
as such by Resolution of the Board of Directors.
SECTION 2 THE STOCK OPTION PLAN
2.1 The Purpose of the Plan. The Plan is intended to (a) provide
incentive to non-employee Directors of the Company to stimulate their efforts
toward the continued success of the Company and to manage the business of the
Company in a manner that will provide for the long-term growth and
profitability of the Company; (b) encourage stock ownership by non-employee
Directors by providing them with a means to acquire a proprietary interest in
the Company; and (c) provide a means of obtaining and rewarding non-employee
Directors.
2.2 Stock Subject to the Plan. Subject to adjustment in
accordance with Section 7.1, 250,000 shares of Stock (the "Maximum Plan
Shares") are hereby reserved exclusively for issuance pursuant to Options. At
no time shall the aggregate of (a) shares of Stock issuable pursuant to
outstanding Options; and (b) shares of Stock issued pursuant to Options exceed
the Maximum Plan Shares; for this purpose, the outstanding Options and shares
of stock issued in respect of Options shall be computed consistent with Rule
16b-3(a)(1) as promulgated under the Exchange Act. If an Option expires or
terminates for any reason without being exercised in full, the unpurchased
shares subject to such Option shall again be available for purposes of the
Plan.
2.3 Administration of the Plan. The Director Plan shall be
administered by a committee of the Board of Directors of the Company (the
"Director Plan Committee") which shall at all times consist of not less than
one (1) but not more than three (3) directors of the Company who are not
entitled to participate in the Director Plan, to be appointed by the Board of
Directors and to serve at the pleasure of the Board of Directors. It is the
intention of the Company that each member of the Director Plan Committee shall
be a "disinterested person" as that term is defined and interpreted pursuant to
Rule 16b-3(c)(2) or any successor rule thereto promulgated under the Securities
Exchange Act of 1934, as amended (the "Act").
Grant of options under the Director Plan to non-employee Directors and
the amount and nature of the awards to be granted shall be automatic as
described in Section 3 hereof. However, all questions of interpretation of the
Director Plan or of any options issued under it shall be determined by the
Committee and such determination shall be final and binding upon all persons
having an interest in the Director Plan. A majority of the Committee's members
shall constitute a quorum, and all determinations shall be made by a majority
of such quorum. Any determination reduced to writing and signed by all of the
members of the Committee shall be fully effective as if it had been made by a
majority vote at a meeting duly called and held.
2.4 Eligibility. Any member of the Board of Directors who is a
non-employee Director of the Company shall be a Participant.
SECTION 3 TERMS AND CONDITIONS OF OPTIONS
3.1 Number of Option Shares. A Participant shall be granted
Options as follows:
(a) Each individual who is serving as a non-employee
Director as of the Plan's Effective Date, will be granted, as of the
Plan's Effective Date, an option to purchase 10,000 shares of Stock.
(b) Each individual who first becomes a non-employee
Director on or after Effective Date, whether through election at an
annual meeting of the Company's stockholders or through appointment by
the Board, will be granted, at the time of such election or
appointment, an Option to purchase 10,000 shares of Stock.
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<PAGE> 6
(c) Commencing with the 1994 annual meeting of the
Company's stockholders, each individual who at that time remains as a
non-employee Director will receive an additional grant of an Option to
purchase 5,000 shares of Stock (the "Annual Grant").
(d) In addition to the Initial Grant and Annual Grant to
non-employee Directors provided for in Paragraphs 5(a)(i) and 5(a)(ii) hereof,
there shall be granted and awarded to the Vice-Chairman of the Board of
Directors, each Chairman of each Committee of the Board of Directors, and each
non-employee Director who serves on a Committee of the Board of Directors an
option to purchase shares of Common Stock (the "Special Service Option") as
follows:
(i) Contemporaneously with each Annual Grant, there
shall be granted and awarded to the individual occupying the position of
Vice-Chairman of the Board of Directors options to purchase 3,333 shares of
Common Stock.
(ii) Contemporaneously with each Annual Grant, there
shall be granted and awarded to each Chairman of each Committee of the Board of
Directors options to purchase 8,333 shares of Common Stock.
(iii) Contemporaneously with each Annual Grant,
there shall be granted and awarded to each Non-Employee Director who serves on
a Committee of the Board of Directors (other than the Chairman of the
Committee) options to purchase 2,500 shares of Common Stock.
(iv) In the event, a non-employee director is
Chairman of more than one Committee or serves on more than one Committee, such
individual shall receive a Special Service Option in each separate capacity.
3.2 Type of Option. Options shall be non-qualified stock options.
3.3 Exercise Price. The Exercise Price for a share of Stock
subject to a Option shall be the Fair Market Value (determined as of the date
of grant) of a share of Stock.
3.4 Option Term. Each Option, once exercisable, shall remain
exercisable until the tenth anniversary of the date of grant. Notwithstanding
the foregoing:
(a) Except as provided in Subsection (b) hereof, should a
Participant cease to be a Director for any reason (other than death)
while holding an Option granted pursuant to this Plan, then such
Participant shall have a six-month period following the date of such
cessation of Board membership in which to exercise such Option for any
or all of the shares of Stock for which the Option has become
exercisable at the time the Participant ceases to be a Director.
(b) Should a Participant die while serving as a Director
or during the six-month period following the date of the Participant's
cessation of Board service (as described in Subparagraph (a) above),
then the Option may be subsequently exercised, for any or all of the
shares of Stock for which the Option is exercisable at the time of the
Optionee's death, by the personal representative of the Optionee's
estate or by the person or persons to whom the Option is transferred
pursuant to the Optionee's will or in accordance with the laws of
descent and distribution. Any such exercise, however, must occur
within 12 months after the date of the Optionee's death.
(c) In no event shall any grant of Option pursuant to the
Plan remain exercisable after the tenth anniversary of the Option's
date of grant. Upon the expiration of the applicable exercise period
in accordance with Subparagraphs (a) and (b) above or (if earlier)
upon the expiration of the ten year option term, the Option shall
terminate and cease to be exercisable.
3.5 Exercisability. Each Option may be exercised for that
percentage of shares of Stock subject to the Option as to which the Option has
become vested, reduced by that number of shares of Stock subject to the Option
which have been previously exercised.
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<PAGE> 7
(a) With respect to Options granted pursuant to Plan
Sections 3.1(a) and (b), the Option shall vest in 25% increments on
each "Vesting Date," provided the Participant is still a Director on
the Vesting Date. For purposes of this Subsection (a), the term
Vesting Date shall mean each one year anniversary of the date of
grant.
(b) With respect to Options granted pursuant to Plan
Sections 3.1(c)and (d), the Option shall become 100% vested as of the
first annual meeting of the Company's stockholders held after the date
of grant, provided the Participant is still a Director on that date.
3.6 Payment. Payment for all shares of Stock purchased pursuant
to the exercise of an Option shall be made in any form or manner authorized by
the Committee in the Stock Option Agreement, including, but not limited to, (i)
cash, (ii) by delivery to the Company of a number of shares of Stock which have
been owned by the holder for at least six months prior to the date of exercise
having an aggregate Fair Market Value of not less than the product of the
Exercise Price multiplied by the number of shares the Participant intends to
purchase upon exercise of the Option on the date of delivery; or (iii) in a
cashless exercise through a broker. The holder of an Option, as such, shall
have none of the rights of a stockholder.
3.7 Nonassignability. An option shall not be transferable except
by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the person to whom the option is granted only by such
person or by his guardian or legal representative. Notwithstanding the
foregoing, to the extent permitted by applicable law and Rule 16b-3, the
Director Plan Committee may permit a recipient of an option granted hereunder
to (i) designate in writing during the optionee's lifetime a beneficiary to
receive and exercise the optionee's options in the event of such optionee's
death or (ii) transfer an option granted hereunder. In the event of the death
of an Optionee while a Non-Employee Director, an option may be exercised by the
representative of the estate of such Optionee within twelve (12) months
following the date of death, but not later than the Expiration Date.
3.8 Option Agreement. Each Option shall be evidenced by a Stock
Option Agreement which shall incorporate the terms of the Plan.
SECTION 4 GENERAL PROVISIONS
4.1 Changes in Capitalization; Merger; Liquidation.
(a) The number of shares of Stock reserved for the grant
of Options; the number of shares of Stock reserved for issuance upon the
exercise or payment, as applicable, of each outstanding Option; and the
Exercise Price of each outstanding Option shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Stock resulting from
a subdivision or combination of shares or the payment of a stock dividend in
shares of Stock to holders of outstanding shares of Stock or any other increase
or decrease in the number of shares of Stock outstanding effected without
receipt of consideration by the Company.
(b) In the event of or anticipation of a merger,
consolidation or other reorganization of the Company or tender offer for shares
of Stock, the Plan Administrator may make such adjustments with respect to
awards and take such other action as it deems necessary or appropriate to
reflect such merger, consolidation, reorganization or tender offer, including
without limitation, the substitution of new awards, the termination or
adjustment of outstanding awards, the acceleration of awards or the removal of
restrictions on outstanding awards. Any adjustment pursuant to this Section
4.1 may provide, in the Plan Administrator's discretion, for the elimination
without payment therefor of any fractional shares that might otherwise become
subject to any Option, but shall not otherwise diminish the then value of the
Option.
(c) The existence of the Plan and the Options granted
pursuant to the Plan shall not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification, reorganization
or other change in its capital or business structure, any merger or
consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Stock or the rights thereof, the
dissolution or liquidation of the Company, any sale or transfer of all or any
part of its business or assets, or any other corporate act or proceeding.
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<PAGE> 8
4.2 Right to Remove Director, Committee Chairman or Committee
Member. Nothing in the Plan or in any Stock Option Agreement shall confer upon
any Participant the right to continue as a member of the Board of Directors,
chairman of any committee or member of any committee, or affect the right of
the Company to terminate a Participant's directorship at any time.
4.3 Restrictions on Delivery and Sale of Shares; Legends. Each
Option is subject to the condition that if at any time the Plan Administrator,
in its discretion, shall determine that the listing, registration or
qualification of the shares covered by such Option upon any securities exchange
or under any state or federal law is necessary or desirable as a condition of
or in connection with the granting of such Option or the purchase or delivery
of shares thereunder, the delivery of any or all shares pursuant to such Option
may be withheld unless and until such listing, registration or qualification
shall have been effected. If a registration statement is not in effect under
the Securities Act of 1933 or any applicable state securities laws with respect
to the shares of Stock purchasable or otherwise deliverable under Options then
outstanding, the Participant shall, as a condition of exercise of any Option or
as a condition to any other delivery of Stock pursuant to an Option, represent,
in writing, that the shares received pursuant to the Option are being acquired
for investment and not with a view to distribution and agree that the shares
will not be disposed of except pursuant to an effective registration statement,
unless the Company shall have received an opinion of counsel that such
disposition is exempt from such requirement under the Securities Act of 1933
and any applicable state securities laws. The Company may include on
certificates representing shares delivered pursuant to an Option such legends
referring to the foregoing representations or restrictions or any other
applicable restrictions on resale as the Company, in its discretion, shall deem
appropriate.
4.4 Non-alienation of Benefits. Other than as specifically
provided with regard to the death of a Participant, or otherwise provided in
Section 3.7 hereof, no benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge; and any attempt to do so shall be void. No such benefit shall, prior
to receipt by the Participant, be in any manner liable for or subject to the
debts, contracts, liabilities, engagements or torts of the Participant.
4.5 Termination and Amendment of the Plan. The Board of Directors
at any time may amend or terminate the Plan without stockholder approval;
provided, however, that the Board of Directors may condition any amendment on
the approval of stockholders of the Company if such approval is necessary or
advisable with respect to tax, securities or other applicable laws.
Notwithstanding the foregoing, in no event shall the Board of Directors amend
the provisions of the Plan that relate to Options more than once every six
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, or the rules thereunder. No termination,
modification or amendment of the Plan, without the consent of a Participant who
has been awarded an Option shall adversely affect the rights of that
Participant under such Option.
4.6 Stockholder Approval. The amended and restated Plan shall be
submitted to the stockholders of the Company for their approval at the next
annual meeting to the Company's stockholders after the adoption of the Plan by
the Board of Directors of the Company.
4.7 Choice of Law. The laws of the State of California shall
govern the Plan, to the extent not preempted by federal law.
4.8 Effective Date of Plan. The Plan shall become effective on
the Effective Date.
COMPREHENSIVE CARE CORPORATION
By: /s/ Chriss W. Street
--------------------------------------------------
Title: Chairman, President and Chief Executive Officer
-----------------------------------------------
ATTEST:
/s/ Kerri Ruppert
- -----------------
Secretary
[CORPORATE SEAL]
6
<PAGE> 1
EXHIBIT 10.70
COMPREHENSIVE CARE CORPORATION
4350 VON KARMAN AVENUE
NEWPORT BEACH, CALIFORNIA 92660
GRANT OF RESTRICTED SHARES
WHEREAS, Chriss W. Street (the "Executive"), is Chairman and President
of Comprehensive Care Corporation (the "Company"), a Delaware corporation; and
WHEREAS, Executive has and continues to render services to the Company
of a material beneficial nature to the Company and its shareholders and which
services have exceeded the services contemplated to be rendered by Executive
under Executive's Employment Agreement; and
WHEREAS, the Company has determined that it is in its present and
continuing best interests to provide a program to incentivize Executive by
principally granting to Executive restricted shares of the Company's Common
Stock, $.01 par value (the "Restricted Shares"), and which Restricted Shares are
intended to vest upon the happening of certain events as set forth herein, which
events have been determined by the Company to provide a means to adequately
continue to retain the continued services of Executive, and further incentivize
Executive to maximize his efforts for the benefit of the Company and its
shareholders and to result in the growth of the Company's business and an
enhancement of its value.
NOW, THEREFORE, there is granted to Executive Restricted Shares upon
and subject to the following terms, provisions and conditions:
Subject to the shareholders of the Company adopting the Company's 1995
Incentive Stock Option Plan on or before December 31, 1995, there is herewith
granted by the Company to Executive 100,000 shares of the Company's Common
Stock, $.01 par value. The shares herewith granted are sometimes referred to as
the "Restricted Shares". Upon Executive's countersignature of this Grant,
Executive shall pay to the Company the sum of $1,000 representing the par value
of the Restricted Shares. The Restricted Shares shall be represented by one or
more stock certificates registered in the name of Executive and shall bear a
restrictive legend that such shares are subject to the restrictions, terms and
conditions of this Grant.
1. All Restricted Shares shall be endorsed in blank by the Executive
and shall be deposited with the Company, to be released in accordance with the
terms of this Grant. Any portion of the Restricted Shares that may be forfeited
or which may not become vested shall be canceled by the Company.
<PAGE> 2
2. The Executive shall have the right to vote the Restricted Shares, to
receive and retain all regular cash dividends and such other distributions which
may be declared thereon and to exercise the rights, powers and privileges of a
holder of Common Stock, with the exception that:
(i) the Executive shall not be entitled to delivery of a stock
certificate representing the Restricted Shares until the Restricted
Period, as provided for herein, shall have expired and unless all other
vesting requirements shall have been fulfilled;
(ii) the Company's counsel shall retain custody of the stock
certificates representing the Restricted Shares during the Restricted
Period;
(iii) other than regular cash dividends or other distributions
which may be declared by the Board, the Company's counsel shall retain
custody of all distributions until such time, if ever, as the
Restricted Shares with respect to which such retained distribution
shall have been made shall have vested.
(iv) the Executive shall not sell, assign, transfer, pledge,
exchange, encumber or dispose of the Restricted Shares during the
Restricted Period.
3. On the last day of each Restricted Period, the portion of the
Restricted Shares which shall become vested and any retained distributions shall
vest and shall be released pro rata to the Executive.
4. Of the total number of One Hundred Thousand (100,000) Restricted
Shares, such Restricted Shares shall vest at the rate of Five Thousand (5,000)
Restricted Shares per year (the "Annual Vested Shares") on December 31st of each
year commencing December 31, 1995 and continuing at the rate of Five Thousand
(5,000) Annual Vested Shares per year on December 31st of each successive year
for nineteen years thereafter.
5. On or before April 15th of each year in which each 5,000 shares
shall have vested, the Company shall pay to the Executive a cash bonus
equivalent to the amount of the combined federal and applicable state and city
income tax associated with the Annual Vested Shares.
6. Anything to the contrary notwithstanding in Paragraph 4 hereof with
respect to the periodic vesting of the Restricted Shares, a number of Restricted
Shares in excess of and in addition to the number of Restricted Shares to vest
pursuant to Paragraph 4
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<PAGE> 3
hereof shall vest as follows (the "Additional Vested Restricted Shares"), and
the Company shall pay to Executive a cash bonus with respect to such Additional
Vested Restricted Shares as provided in Paragraph 5 hereof:
(i) For each fiscal year of the Company ending December 31st,
1,000 Additional Restricted Shares shall vest (or pro rata portion
thereof) for each $1,000,000 (or pro rata portion thereof) of the
Company's net pre-tax profit as reported by the Company in its Annual
Report for such fiscal year.
(ii) In the event the Company shall effect a merger,
acquisition, combination or purchase of assets, or other similar
transaction (an "Acquisition Event"), 1,000 Additional Restricted
Shares shall vest upon the completion of the Acquisition Event for each
$1,000,000 of Acquisition Event value paid by the Company. For the
purpose of determining Acquisition Event value, such value shall
include cash or the fair market value at closing of any equity or debt
security paid or issued by the Company in connection with the
Acquisition Event, options, warrants or convertible securities
delivered by the Company in connection with the Acquisition Event, and
any debt, obligation or capital leases assumed by the Company in
connection with the Acquisition Event.
(iii) As of December 31st of each year, for each 1% of increase
of market value of the Company's voting securities above 110% of the
market value of the Company's voting securities as of December 31st of
the preceding year, 1,000 Additional Restricted Shares shall vest. For
the purpose of the foregoing, aggregate market value for the Company's
Common Stock shall be computed and determined in the manner set forth
on the cover page of Form 10-K. By way of example, and not by way of
limitation, if the aggregate market value for the Company's voting
securities was $16,000,000 on December 31, 1994, and the aggregate
market value on December 31, 1995 was $19,520,000, Executive would be
entitled to have 2,000 Additional Restricted Shares vested by reason of
the aggregate market value having exceeded, by 2%, 20% of the aggregate
market value for the preceding fiscal year.
7. Anything to the contrary notwithstanding in Paragraph 4 and/or 6
hereof with respect to the vesting of the Restricted Shares, all Restricted
Shares not theretofore vested shall vest on the first day following the
occurrence of any of the following: (a) the approval by the stockholders of the
Company of an Approved Transaction; (b) a Control Purchase; or (c) a Board
Change.
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<PAGE> 4
An "Approved Transaction" is defined as (A) any consolidation
or merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of Common Stock would be converted into
cash, securities or other property other than a merger of the Company in which
the holders of Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger, or (B) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company, or (C) the adoption of any plan or proposal for
the liquidation or dissolution of the Company.
A "Control Purchase" shall be defined as circumstances in
which any person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act), corporation or other entity (other than the Company or any
employee benefit plan sponsored by the Company) (A) shall purchase any Common
Stock of the Company (or securities convertible into the Company's Common Stock)
for cash, securities or any other consideration pursuant to a tender offer or
exchange offer, or (B) shall become the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing twenty percent (20%) or more of the
combined voting power of the then outstanding securities of the Company
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors (calculated as provided in
paragraph (d) of such Rule 13d-3 in the case of rights to acquire the Company's
securities).
A "Board Change" shall be defined as circumstances in which,
during any period of two consecutive years or less, individuals who at the
beginning of such period constitute the entire Board shall cease for any reason
to constitute a majority thereof unless the election, or the nomination for
election by the Company's stockholders, of each new director was approved by a
vote of at least a majority of the directors then still in office.
In addition, and anything to the contrary notwithstanding, all
Restricted Shares not theretofore vested shall vest in the event the Company
fails to renew the Executive's Employment Agreement with the Company at the
conclusion of the term thereof on December 31, 1998 or any subsequent or renewed
term, on terms identical to those in the Executive's then prevailing Employment
Agreement.
8. In the event that the Executive shall die or become totally disabled
prior to the full vesting of the Restricted Shares, all Restricted Shares not
theretofore vested shall, upon such death or total disability, be vested in
their entirety;
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<PAGE> 5
provided, however, that the Company shall not, at such time, have any obligation
or responsibility to make any cash payment to ameliorate any taxes to the
Executive or the Executive's estate by reason of such accelerated vesting.
IN WITNESS WHEREOF, this Restricted Share Grant has been made and
executed this 9th day of November, 1995.
COMPREHENSIVE CARE CORPORATION
By /s/ KERRI RUPPERT
--------------------------
Secretary
AGREED TO AND ACCEPTED:
/s/ CHRISS W. STREET
- ------------------------------
CHRISS W. STREET
5
<PAGE> 1
EXHIBIT 99.6
COMPREHENSIVE CARE CORPORATION REVIEWS PROGRESS
AT 1995 ANNUAL MEETING OF STOCKHOLDERS
Newport Beach, CA, November 13, 1995 (CMP): At the annual meeting of
stockholders held in New York November 9, 1995, Chairman Chriss W. Street
reviewed the company's progress during the past year and told stockholders that
Comprehensive Care is positioned toward profitability in fiscal 1996.
"When we met a year ago, I told you my goal as Chairman was to support our
strengths and cure our weaknesses," Mr. Street said. "Since then, we've
addressed - and resolved - a number of major historic issues, including
problems with payroll tax audits. We've clearly defined our strategy that is
based on sound business principles and an innovative approach to health care.
The progress we've achieved to date paves the way for us to become, once again,
a profitable company delivering the best in health care," he said.
Shareholders of Comprehensive Care Corporation reelected to the Board of
Directors, W. James Nicol, senior vice president/chief financial officer of
CareLine, Inc., to serve a three year term expiring in 1998. The company's
incentive plan was also approved, and the director's stock option plan was
amended and restated.
###
