<PAGE> 1
As filed with the Securities and Exchange Commission on June 5, 1996.
---------------------------------------------------------------------
REGISTRATION STATEMENT NO. 33 - 58907
********************************************************************************
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST - EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
MANOR CARE, INC.
----------------
(Exact name of issuer as specified in its charter)
Delaware 52-1200376
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10750 Columbia Pike
Silver Spring, Maryland 20901
----------------------- -----
(Address of Principal (Zip Code)
Executive Offices)
MANOR CARE, INC.
1995 LONG-TERM INCENTIVE PLAN
-----------------------------
(Full title of the plan)
James H. Rempe, Esq.
Senior Vice President, General Counsel and Secretary
10750 Columbia Pike
Silver Spring, MD 20901
-----------------------
(Name and address of agent for service)
(301) 905-4265
--------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
****************************************************************************************************
Proposed Proposed
Title of Maximum Maximum Amount
Each Class of Amount Offering Aggregate Of
Securities Previously Price Per Offering Registration
To Be Registered Registered Share* Price* Fee
- ---------------- ---------- ------ ------ ---
<S> <C> <C> <C> <C>
Common Stock, 2,000,000 Shs. * - 0 -
par value of $.10
per share
****************************************************************************************************
</TABLE>
(*) Registration Fee was paid on April 28, 1995.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Except as set forth below with respect to Items 4, 7, 8 and 9 of Form
S-8, the contents of the registration statements on Registrant's Annual Report
and Form 10-K for fiscal year ended May 31, 1995 containing audited financial
statements for the fiscal year ended May 31, 1995, Form 10-Q for the fiscal
quarters ended August 31, 1995, November 30, 1995 and February 29, 1996,
Current Report on Form 8-K dated May 7, 1996 and June 4, 1996 and the
description of the Registrant's common stock appearing in the Registrant's
registration statement on Form 8-A filed pursuant to Section 12(b) of the
Exchange Act of 1934 on July 30, 1981, are incorporated by reference into this
registration statement.
Item 4. Description of Securities. Not Applicable.
Item 6. Indemnification of Officers and Directors.
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in summary, that directors and officers of Delaware
corporations such as the Registrant are entitled, under certain circumstances,
to be indemnified against all expenses and liabilities (including attorneys'
fees) incurred by them as a result of suits brought against them in their
capacity as a director or officer, if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful; provided, that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which such action
or suit was brought shall determine upon application that despite the
adjudication of liability but in view of all the circumstances of the case, they
are fairly and reasonably entitled to indemnity for such expenses which such
court shall deem proper. Any such indemnification may be made by the corporation
only as authorized in each specific case upon a determination by the
stockholders or disinterested directors that indemnification is proper because
the indemnitee has met the applicable standard of conduct. Article VII of the
Registrant's By-Laws entitles officers, directors and controlling persons of the
Registrant to indemnification to the full extent permitted by Section 145 of
DGCL, as the same may be supplemented or amended from time to time.
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<PAGE> 3
Article VII of the Bylaws of Manor Care, Inc. provides:
INDEMNIFICATION OF
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
Section 1. Action, Other Than by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding or investigation, whether civil, criminal or administrative,
and whether external or internal to the Corporation (other than a judicial
action or suit brought by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or trustee of the
Corporation, or that, being or having been such a director, officer, employee or
trustee, he is or was serving at the request of the Corporation as a director,
officer, employee, trustee or agent of another corporation, partnership, joint
venture, trust or other enterprise (all such persons being referred to hereafter
as an "Agent"), against expenses (including attorneys' fees), judgements, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, or any appeal therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding -- whether by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent -- shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Section 2. Action, by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed judicial action or suit
brought by or in the right of the Corporation to procure a judgement in its
favor by reason of the fact that he is or was an Agent (as defined above)
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense, settlement or appeal of such action or suit
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for gross negligence or misconduct in the
performance of the duty of the Corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon
3
<PAGE> 4
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or other such court
shall deem proper.
Section 3. Determination of Right of Indemnification. Any
indemnification under Section 1 or 2 (unless ordered by a court) shall be made
by the Corporation unless a determination is reasonably and promptly made (i) by
the Board by a majority vote or a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders, that such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without admission of liability, in defense of any proceeding or in
defense of any claim, issue or matter therein, or on appeal from any such
proceeding, action, claim or matter, such Agent shall be indemnified against all
expenses incurred in connection therewith.
Section 5. Advances of Expenses. Except as limited by Section 6 of this
Article, expenses incurred in any action, suit, proceeding or investigation or
any appeal therein shall be paid by the Corporation in advance of the final
disposition of such matter, if the Agent shall undertake to repay such amount in
the event that it is ultimately determined, as provided herein, that such person
is not entitled to indemnification. Notwithstanding the foregoing, no advance
shall be made by the Corporation if a determination is reasonably and promptly
made by the Board of Directors by a majority vote of a quorum of disinterested
directors, or (if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs) by independent legal counsel in a
written opinion, that, based upon the facts known to the Board or counsel at the
time such determination is made, such person acted in bad faith and in a manner
that such person did not believe to be in or not opposed to the best interests
of the Corporation, or, with respect to any criminal proceeding, that such
person believed or had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the Board or independent
legal counsel reasonably determines that such person deliberately breached his
duty to the Corporation or its shareholders.
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<PAGE> 5
Section 6. Right of Agent to Indemnification Upon Application;
Procedure Upon Application. Any indemnification under Sections 1, 2, and 4, or
advance under Section 5 of this Article, shall be made promptly, and in any
event within ninety days, upon the written request of the Agent, unless with
respect to applications under Sections 1, 2, and 5, a determination is
reasonably and promptly made by the Board of Directors by a majority vote of a
quorum of disinterested directors that such Agent acted in a manner set forth in
such Sections as to justify the Corporation's not indemnifying or making an
advance to the Agent. In the event no quorum of disinterested directors is
obtainable,
the Board of Directors shall promptly direct that independent legal counsel
shall decide whether the Agent acted in the manner set forth in such Sections as
to justify the Corporation's not indemnifying or making an advance to the Agent.
The right to indemnification or advances as granted by this Article shall be
enforceable by the Agent in any court of competent jurisdiction, if the Board or
independent legal counsel denies the claim, in whole or in part, or if no
disposition of such claim is made within ninety days. The Agent's expenses
incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such proceeding shall also be
indemnified by the Corporation.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in this
Article is held by a court of competent jurisdiction to be unavailable to an
indemnitee in whole or in part, the Corporation shall, in such an event, after
taking into account, among other things, contributions by other directors and
officers of the Corporation pursuant to indemnification agreements or otherwise,
and in the absence of personal enrichment, acts of intentional fraud or
dishonesty or criminal conduct on the part of the agent, contribute to the
payment of Agent's losses to the extent that, after other contributions are
taken into account, such losses exceed: (i) in the case of a director of the
Corporation or any of its subsidiaries who is not an officer of the Corporation
or any of such subsidiaries, the amount of fees paid to him for serving as a
director during the 12 months preceding the commencement of the suit, proceeding
or investigation; or (ii) in the case of a director of the Corporation or any of
its subsidiaries who is also an officer of the Corporation or any of such
subsidiaries, the amount set forth in clause (i) plus 5% of the aggregate cash
compensation paid to said director for service in such office(s) during the 12
months preceding the commencement of the suit, proceeding or investigation; or
(iii) in the case of an officer of the Corporation or any of the subsidiaries,
5% of the aggregate cash compensation paid to such officer for service in such
office(s) during the 12 months preceding the commencement of such suit,
proceeding or investigation.
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<PAGE> 6
Section 8. Other Rights and Remedies. The indemnification provided by
this Article shall not be deemed exclusive of, and shall not affect, any other
rights to which an Agent seeking indemnification may be entitled under any
Bylaws, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be an Agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. All rights to indemnification under this
Article shall be deemed to be provided by a contract between the Corporation and
the Agent who serves in such capacity at any time while these bylaws and other
relevant provisions of the general corporation law and other modification
thereof shall not affect any rights or obligations then existing.
Section 9. Insurance. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was an Agent against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article. The Corporation may create a trust fund, grant a
security interest or use other means (including, without limitation, a letter of
credit) to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
Section 10. Constituent Corporations. For the purposes of this Article,
references to "the Corporation" include all constituent corporations absorbed in
a consolidation or merger as well as the resulting or surviving corporation, so
that any person who is or was a director, officer, employees, or trustee of such
a constituent corporation or who, being or having been such a director, officer
employee or trustee, is or was serving at the request of such constituent
corporation as a director, officer, employee, trustee of another corporation,
partnership, joint venture, trust or other enterprise shall stand in the same
position under the provisions of this Article with respect to the resulting or
surviving corporation as he would if he had served the resulting or surviving
corporation in the same capacity.
Section 11. Other Enterprises, Fines, and Serving at Corporation's
Request. For purposes of this Article, references to "other enterprises" in
Sections 1 and 7 shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service by Agent as director, officer, employee, trustee or
agent of the Corporation which imposes duties on, or involves services by, such
Agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interests of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
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<PAGE> 7
Section 12. Savings Clause. If this Article or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Agent as to expenses (including
attorneys' fees), judgements, fines and amounts paid in settlement with respect
to any action, suit, appeal, proceeding or investigation, whether civil,
criminal or administrative, and whether internal or external, including a grand
jury proceeding and an action or suit brought by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article that shall not have been invalidated, or by any other applicable law.
The Registrant has entered into separate indemnification agreements
with directors and officers of the Registrant, pursuant to which the Registrant
will indemnify such directors and officers to the fullest extent permitted by
Delaware law, as the same may be amended from time to time.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
Item 7. Exemptions from Registration Claimed. None.
Item 8. Exhibits.
4 Manor Care, Inc. 1995 Long-Term Incentive Plan (Authorizing
issuance of a maximum 1,110,122 shares remaining for issuance
under the 1993 Key Executive Stock Option Plan which was
terminated by the Registrant's Board of Directors).
5 Opinion regarding legality of shares to be offered.
23(i) Consent of Arthur Andersen LLP.
23(ii) Consent of James H. Rempe, Esq. (included in Exhibit 5)
24 Powers of Attorney authorizing execution of registration
statement of Form S-8 on behalf of certain directors of
Registrant. (Incorporated by Reference to Exhibit 24 to the
Registrant's Form S-8 Registration Statement No. 33-58907
filed April 28, 1995).
7
<PAGE> 8
Item 9. Undertaking.
(a) Rule 415 Offering.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement;
(i) To include any prospectus required by Section 10 (a)
(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
provided, however, that paragraphs (a) (1) (i) and (a) (1) (ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) Filings incorporating subsequent Exchange Act documents by
reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13 (a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities at that time shall be deemed to be the initial bona
fide offering thereof.
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(c) Request for acceleration of effectiveness or filing of registration
statement on Form S-8.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it meets all of the requirements for filing
on Form S-8, and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Silver
Spring, State of Maryland, on this 5th day of June, 1996.
MANOR CARE, INC.
By: /s/ James H. Rempe
------------------
James H. Rempe
Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
* Chairman, President, June 5, 1996
- -------------------------------- Chief Executive Officer
Stewart Bainum, Jr. and Director
* Vice Chairman and June 5, 1996
- -------------------------------- Director
Stewart Bainum
Director
- --------------------------------
Kennett L. Simmons
* Director June 5, 1996
- --------------------------------
Regina E. Herzlinger
</TABLE>
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<TABLE>
<S> <C> <C>
* Director June 5, 1996
- --------------------------------
William H. Longfield
* Director June 5, 1996
- --------------------------------
Frederick V. Malek
* Director June 5, 1996
- --------------------------------
Jerry E. Robertson
/s/ James A. MaCutcheon Senior Vice President, June 5, 1996
- -------------------------------- Chief Financial Officer,
James A. MacCutcheon and Treasurer (Principal
Financial Officer)
/s/ Margarita A. Schoendorfer Vice President and Controller June 5, 1996
- -------------------------------- (Principal Accounting Officer)
Margarita A. Schoendorfer
* By: /s/ James H. Rempe
------------------
James H. Rempe
Attorney-in-fact
</TABLE>
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EXHIBITS INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- --------
<S> <C> <C>
4 Manor Care, Inc. 1995 Long-Term 13
Incentive Plan (Authorizing issuance of
a maximum 1,110,122 shares remaining
for issuance under the 1993 Key
Executive Stock Option Plan which was
terminated by the Registrant's Board
of Directors).
5 Opinion regarding legality of shares 28
to be offered.
23(i) Consent of Arthur Andersen LLP. 29
23(ii) Consent of James H. Rempe, Esq. (included in Exhibit 5)
24 Powers of Attorney authorizing execution of
registration statement of Form S-8 on behalf
of certain directors of Registrant. (Incorporated
by Reference to Exhibit 24 to the Registrant's
Form S-8 Registration Statement No. 33-58907
filed April 28, 1995).
</TABLE>
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EXHIBIT 4
MANOR CARE, INC.
1995 LONG-TERM INCENTIVE PLAN
SECTION ONE. DESIGNATION AND PURPOSE OF PLAN
The purpose of the Manor Care, Inc. 1995 Long-Term Incentive Plan (the
"Plan") is to increase the ownership of Company Stock by those officers,
professional staff and other key employees who are mainly responsible for the
continued growth and development and financial success of the Company and its
subsidiaries. Such stock ownership gives such employees a proprietary interest
in the Company which induces them to continue in its employ. The Plan also
enables the Company to attract and retain such employees and reward them for the
continued profitable performance of Manor Care, Inc.
SECTION TWO. DEFINITIONS
The following definitions are applicable herein:
A. "Award" - Individually or collectively, Options, Stock Appreciation
Rights, Performance Shares or Restricted Stock granted hereunder.
B. "Award Period" - the period of time during which a Stock
Appreciation Right which has not been granted pursuant to an Option may be
exercised. The Award Period shall be set forth in the document issuing the Stock
Appreciation Right to the selected Eligible Employee.
C. "Board" - the Board of Directors of the Company.
D. "Book Value" - the book value of a share of Stock determined in
accordance with the Company's regular accounting practices as of the last
business day of the month immediately preceding the month in which a Stock
Appreciation Right is exercised as provided in Section Nine D.
E. "Code" - the Internal Revenue Code of 1986, as amended. Reference in
the Plan to any section of the Code shall be deemed to include any amendments or
successor provisions to such section and any regulations promulgated thereunder.
F. "Committee" - the Key Executive Stock Option Plan Committee
appointed to administer the Plan pursuant to Section Four.
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G. "Company" - Manor Care, Inc., including any present or future
"subsidiary corporation" as such term is defined in Section 424(f) of the 1986
Internal Revenue Code, as amended.
H. "Covered Employee" - an individual described in Section 162(m)(3) of
the Code.
I. "Date of Grant" - the date on which the granting of an Award is
authorized by the Committee or such later date as may be specified by the
Committee in such authorization.
J. "Eligible Employee" - any person employed by the Company or a
Subsidiary on a regularly scheduled basis who satisfies all of the requirements
of Section Six.
K. "Exercise Period" - the period or periods during which a Stock
Appreciation Right is exercisable as described in Section Nine B.
L. "Fair Market Value" - the fair market value of the Stock as
determined in accordance with Section Eight D.
M. "Incentive Stock Option" - an incentive stock option within the
meaning of Section 422 of the Code.
N. "Option" or "Stock Option" - either a nonqualified stock option or
an Incentive Stock Option granted under Section Eight. It also means any Option
which remains after a Participant has exercised his Option with respect to part
of the shares covered by a Stock Option Agreement as described in Section Eight
B.
O. "Option Period" or "Option Periods" - the period or periods during
which an Option is exercisable as described in Section Eight E.
P. "Option Price" - the price, expressed on a per share basis, for
which the Company Stock can be acquired by the holder of an Option pursuant to
the exercise of such Option.
Q. "Participant" - an Eligible Employee of the Company or a Subsidiary
who has been granted an Option, a Stock Appreciation Right, a Performance Share
Award or a Restricted Stock Award under this Plan.
R. "Performance Share" - an Award granted under Section Ten.
S. "Restricted Stock" - an Award granted under Section Seven.
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<PAGE> 3
T. "Stock" and "Company Stock" - the common stock of the Company.
U. "Stock Appreciation Right" - an Award granted under Section Nine.
V. "Subsidiary" - any corporation of which fifty percent (50%) or more
of its outstanding voting stock or voting power is beneficially owned, directly
or indirectly, by the Company.
W. "Ten Percent Shareholder" - a Participant who, at the Date of Grant,
owns directly or indirectly (within the meaning of Section 424(d) of the
Internal Revenue Code) stock possessing more then ten percent (10%) of the total
combined voting power of all classes of stock of the Company or a subsidiary
thereof.
X. Wherever appropriate, words used in this Plan in the singular may
mean the plural, the plural may mean the singular and the masculine may mean the
feminine.
SECTION THREE. EFFECTIVE DATE, DURATION AND STOCKHOLDER APPROVAL
A. Effective Date and Stockholder Approval. Subject to the approval of
the Plan by a majority of the outstanding shares of Stock voted at the 1995
Annual Meeting of Stockholders, the Plan shall be effective as of June 21, 1995.
B. Period for Grant of Awards. Awards may be made as provided herein
for a period of ten (10) years after June 21, 1995.
SECTION FOUR. ADMINISTRATION
A. Appointment of Committee. The Board of Directors shall appoint one
or more Key Executive Stock Option Plan Committees which shall consist of not
less than two (2) members of such Board of Directors and which members shall be
disinterested persons as defined in Rule 16b-3 under the Securities Exchange Act
of 1934, as amended (or such greater number of members which may be required by
said Rule 16b-3). In addition, such Board of Directors shall designate a member
of the Committee to act as Chairman of the Committee, and such Board of
Directors may remove any member of the Committee at any time and appoint any
director to fill any vacancy on the Committee.
B. Committee Meetings. The Committee shall hold its meetings at such
times and places as specified by the Committee Chairman. A majority of the
Committee shall constitute a quorum. All actions of the Committee shall be taken
by all
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of the members of the meeting duly called by its Chairman; provided, however,
any action taken by a written document signed by a majority of the members of
the Committee shall be as effective as action taken by the Committee at a
meeting duly called and held.
C. Committee Powers. Subject to the provisions of this Plan, the
Committee shall have full authority in its discretion to (i) designate the
Participants to whom Awards shall be granted, (ii) determine the number of
shares to be made available under each such Award, (iii) determine the period or
periods in which the Participant may exercise such Award (iv) determine the date
when such Award expires, (v) determine the price for Stock under such Award, and
(vi) determine the grounds of forfeiture of an Award. The Committee shall have
all powers necessary to administer the Plan in accordance with its terms,
including the power to interpret this Plan and resolve all questions arising
thereunder. The Committee may prescribe such rules and regulations for
administering this Plan as the Committee deems appropriate.
SECTION FIVE. GRANT OF AWARDS AND LIMITATION OF NUMBER OF SHARES SUBJECT TO
AWARD
The Committee may, from time to time, grant Awards to one or more
Eligible Employees, provided that (i) subject to any adjustment pursuant to
Section Eleven, the aggregate number of shares of Stock subject to Stock
Options, Stock Appreciation Rights, Performance Share Awards or Restricted Stock
Awards under this Plan may not exceed 1,110,122 shares; (ii) to the extent that
a Stock Option, Stock Appreciation Right, Performance Share Award or Restricted
Stock Award lapses or the rights of the Participant to whom it was granted
terminate, expire or are cancelled for any other reason, in whole or in part,
shares of Stock (or remaining shares) subject to such Award shall again be
available for the grant of an Award under the Plan (provided that the forfeiting
Participant received no benefits of ownership from the Stock, such as
dividends); and (iii) Shares delivered by the Company under the Plan may be
authorized and unissued Stock, Stock held in the treasury of the Company or
Stock purchased on the open market (including private purchases) in accordance
with applicable securities laws. In determining the size of Awards, the
Committee shall take into account the responsibility level, performance,
potential, and cash compensation level of a Participant, and the Fair Market
Value of the Stock at the time of Awards, as well as such other considerations
it deems appropriate.
SECTION SIX. ELIGIBILITY
Key employees of the Company and its Subsidiaries (including employees
who are members of the Board, but excluding directors who are not employees)
who, in the opinion of the Committee, are mainly responsible for the continued
growth and development and financial success of the business of the Company or
one or more of
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<PAGE> 5
its Subsidiaries shall be eligible to be granted Awards under the Plan. Subject
to the provisions of the Plan, the Committee may from time to time select from
such eligible persons those to whom Awards shall be granted and determine the
nature and amount of each Award. No employee of the Company or its Subsidiaries
shall have any right to be granted an Award under this Plan. A member of the
Committee shall not be eligible for any Award hereunder.
SECTION SEVEN. RESTRICTED STOCK AWARDS
A. Grants of Shares of Restricted Stock. An Award made pursuant to this
Section Seven shall be granted in the form of shares of Stock, restricted as
provided in this Section Seven. Shares of the Restricted Stock shall be issued
to the Participant without the payment of consideration by the Participant. The
shares of Restricted Stock shall be issued in the name of the Participant and
shall bear a restrictive legend prohibiting sale, transfer, pledge or
hypothecation of the shares of Restricted Stock until the expiration of the
restriction period.
The Committee may also impose such other restrictions and conditions on
the shares of Restricted Stock as it deems appropriate.
B. Restriction Period. At the time a Restricted Stock Award is made,
the Committee may establish a restriction period applicable to such Award which
shall not be more than ten (10) years. Each Restricted Stock Award may have a
different restriction period, at the discretion of the Committee. In addition to
or in lieu of a restriction period, the Committee may establish a performance
goal which must be achieved as a condition to the retention of the Restricted
Stock. The performance goal may be based on the attainment of specified types of
performance measurement criteria, which may differ as to various Participants or
classes or categories of Participants. Such criteria may include, without
limitation, the attainment of certain performance levels by the individual
Participant, the Company, a department or division of the Company and/or a group
or class of participants. Any such performance goals, together with the ranges
of Restricted Stock Awards for which the Participants may be eligible shall be
set from time to time by the Committee and shall be timely communicated to the
Eligible Employees in advance of the commencement of the performance of services
to which such performance goals relate. The total number of shares of Restricted
Stock which may be granted to any single Covered Employee under this Plan during
any calendar year shall be limited to 100,000.
C. Forfeiture or Payout of Award. In the event a Participant ceases
employment during a restriction period, or in the event performance goals
attributable to a Restricted Stock Award are not achieved, subject to the terms
of each particular Restricted Stock Award, and subject to discretionary action
by the Committee as set
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forth below in Section Thirteen, a Restricted Stock Award is subject to
forfeiture of the shares of stock which had not previously been removed from
restriction under the terms of the Award.
Any shares of Restricted Stock which are forfeited will be transferred
to the Company.
Upon completion of the restriction period and satisfaction of any
performance-goal criteria, all restrictions upon the Award will expire and new
certificates representing the Award will be issued without the restrictive
legend described in Section Seven A. As a condition precedent to receipt of the
new certificates, the Participant (or the designated beneficiary or personal
representative of the Participant) will agree to make payment to the Company in
the amount of any taxes, payable by the Participant, which are required to be
withheld with respect to such shares of Stock.
SECTION EIGHT. STOCK OPTIONS
A. Grant of Option. One or more Options may be granted to any Eligible
Employee. Upon the grant of an Option to an Employee, the Committee shall
specify whether the Option is intended to constitute a non-qualified stock
option or an Incentive Stock Option. The total number of shares of Stock subject
to Options which may be granted to any single Covered Employee under this Plan
during any calendar year shall be limited to 100,000.
B. Stock Option Agreement. Each Option granted under the Plan shall be
evidenced by a written "Stock Option Agreement" between the Company and the
Participant containing such terms and conditions as the Committee determines,
including, without limitation, provisions to qualify Incentive Stock Options as
such under Section 422 of the Code. Such agreements shall incorporate the
provisions of this Plan by reference. The date of granting an Option is the date
specified in the written Stock Option Agreement which is signed by the
Participant and the Company.
C. Determination of Option Price. The Option price for Stock shall be
not less than 100% of the fair market value of the Stock on the date of grant.
Notwithstanding the foregoing, in the case of an Option which is designed to
qualify as an Incentive Stock Option (as defined in Section 422 of the Code)
which is granted to a Ten Percent Shareholder, the Option Price shall not be
less than 110% of such fair market value.
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<PAGE> 7
D. Determination of Fair Market Value. The fair market value of the
Stock on the date of granting an Option shall be the mean of the high and low
prices at which the Stock was sold on the market on such date. In the event no
such sales of Stock occurred on such date, the fair market value of the Stock
shall be determined by the Committee in accordance with applicable Regulations
of the Internal Revenue Service.
E. Term of Option. The term of an Option may vary within the
Committee's discretion; provided, however, that the term of an Option shall not
exceed ten (10) years from the date of granting the Option to the Participant,
and, to this end, all Options granted pursuant to this Plan must provide that
each such Option cannot be exercised after the expiration of ten (10) years from
the date each such Option is granted. Notwithstanding the foregoing, in the case
of any Option which is designed to qualify as an Incentive Stock Option (as
defined in Section 422 of the Code) which is granted to a Ten Percent
Shareholder, the term of such Option may not exceed five (5) years from the date
of grant of such Option.
F. Limitation on Exercise of Option. The Committee may limit an Option
by restricting its exercise in whole or in part for specified periods.
G. Method of Exercising an Option. Subject to the terms of a particular
Option, a Participant may exercise it in whole or in part by written notice to
the Secretary of the Company stating in such written notice the number of shares
of Stock such Participant elects to purchase under his Option.
H. No Obligation to Exercise Option. A Participant is under no
obligation to exercise an Option or any part thereof.
I. Payment for Option Stock. Stock purchased pursuant to an Option
shall be paid in full at the time of purchase. Payment may be made (a) in cash,
(b) with the approval of the Committee, by delivery to the Company of shares of
Stock having an aggregate fair market value equal to the exercise price, or (c)
a combination of (a) and (b). Payment may also be made, in the discretion of the
Committee, by delivery (including by facsimile transmission) to the Company or
its designated agent of an executed irrevocable Option exercise form together
with irrevocable instructions to a broker-dealer to sell (or margin) a
sufficient portion of the shares and deliver the sale (or margin loan) proceeds
directly to the Company to pay for the exercise price. Upon receipt of payment
and subject to paragraph J of this Section Eight, the Company shall, without
transfer or issue tax to the Participant or other person entitled to exercise
the Option, deliver to the Participant (or other person entitled to exercise the
Option) a certificate or certificates for such shares.
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<PAGE> 8
J. Delivery of Stock to Participant. The Company shall undertake and
follow all necessary procedures to make prompt delivery of the number of shares
of Stock which the Participant elects to purchase upon exercise of an Option
granted under this Plan. Such delivery, however, may be postponed, at the sole
discretion of the Company, to enable the Company to comply with any applicable
procedures, regulations or listing requirements of any government agency, stock
exchange or regulatory authority.
K. Failure to Accept Delivery of Stock. If a Participant refuses to pay
for Stock which he has elected to purchase under his Option, in accordance with
the terms of payment, which had previously been agreed upon, his Option shall
thereupon, at the sole discretion of the Committee, terminate, and such funds
previously paid for unissued Stock shall be refunded. Stock which has been
previously issued to the Participant and been fully paid for shall remain the
property of the Participant and shall be unaffected by such termination.
L. Non-Transferability of Options. During the lifetime of a
Participant, an Option granted to him may be exercised only by him. It may not
be sold, assigned, pledged or otherwise transferred except by will or by the
laws of descent and distribution. No Option or any right thereunder shall be
subject to execution, attachment or similar process. Upon any attempt by a
Participant to so sell, assign, pledge or otherwise transfer any Option, or any
right thereunder, contrary to the provisions hereof, the Option and all rights
thereunder shall immediately become null and void.
M. Stock Restriction. Stock that a Participant receives upon exercise
of an Option, if such exercise occurs before six (6) months have elapsed from
the Date of Grant of a Option, shall bear a restrictive legend prohibiting sale,
transfer, pledge, or hypothecation of such stock for a period of six (6) months
from the Date of Grant of the Option.
N. Purchase for Investment
(a) Written Agreement by Participants. Unless a registration
statement under the Securities Act of 1933 is then in effect with respect to the
Stock a Participant receives upon exercise of his Option, a Participant shall
acquire the Stock he receives upon exercise of his Option for investment and not
for resale or distribution and he shall furnish the Company with a written
statement to that effect when he exercises his Option and a reference to such
investment warranty shall be inscribed on the Stock certificate(s).
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<PAGE> 9
(b) Registration Requirement. Each Option shall be subject to the
requirement that, if at any time the Board determines that the listing,
registration or qualification of the shares subject to the 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 issuance of shares thereunder, the
Option may not be exercised in whole or in part unless such listing,
registration or qualification shall have been effected or obtained (and the same
shall have been free of any conditions not acceptable to the Board).
O. Special Limitations on Exercise of Incentive Stock Options. The
aggregate fair market value (determined at the time the Incentive Stock Option
is granted) of the Stock with respect to which any Incentive Stock Option is
first exercisable during any calendar year shall not exceed $100,000.
SECTION NINE. STOCK APPRECIATION RIGHTS
A. Grant of Stock Appreciation Rights. Stock Appreciation Rights may be
granted under the Plan in conjunction with an Option either at the time of grant
or by amendment or may be separately awarded. Stock Appreciation Rights shall be
subject to such terms and conditions not inconsistent with the Plan as the
Committee shall impose. However, the total number of Stock Appreciation Rights
which may be granted to a single Covered Employee under this Plan during any
calendar year shall be limited to 100,000.
B. Right to Exercise; Exercise Period. A Stock Appreciation Right
issued pursuant to an Option shall be exercisable to the extent the Option is
exercisable. Both such Stock Appreciation Right and the Option to which it
relates shall not be exercisable during the six (6) months following their
respective Dates of Grant except, in the discretion of the Committee, in the
event of the disability of the Participant. A Stock Appreciation Right issued
independent of an Option shall be exercisable pursuant to such terms and
conditions established in the grant.
C. Automatic Redemption of Unexercised Stock Appreciation Rights. If on
the last day of the Option Period, in the case of a Stock Appreciation Right
granted pursuant to an Option, or the specified Award Period, in the case of a
Stock Appreciation Right issued independent of an Option, the Participant has
not exercised such Stock Appreciation Right, then such Stock Appreciation Right
shall be automatically redeemed by the Company for an amount equal to the
payment that would otherwise have been made to the Participant if the
Participant had chosen to exercise the Stock Appreciation Right on the last day
of the Option Period or the specified Award Period, as the case may be.
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<PAGE> 10
D. Rights Upon Exercise. An exercisable Stock Appreciation Right
granted pursuant to an Option shall entitle the Participant to surrender
unexercised the Option or any portion thereof to which the Stock Appreciation
Right is attached, and to receive in exchange for the Stock Appreciation Right a
payment (in cash or Stock or a combination thereof as described below) equal to
the Fair Market Value of one share of Stock at the date of exercise minus the
Option Price times the number of shares called for by the Stock Appreciation
Right (or portion thereof) which is so exercised. With respect to the issuance
of Stock Appreciation Rights which are not granted pursuant to an Option, the
Committee shall specify upon the Date of the Grant of the Stock Appreciation
Right whether the Stock Appreciation Right is a "regular" Stock Appreciation
Right or a "book value" Stock Appreciation Right. Upon the exercise of a regular
Stock Appreciation Right, the Participant will receive a payment equal to the
Fair Market Value of one share of Stock at the date of exercise minus the Fair
Market Value of one share of Stock as of the Date of Grant of the Stock
Appreciation Right times the number of shares called for by the Stock
Appreciation Right (or portion thereof) which is so exercised. Upon the exercise
of a book value Stock Appreciation Right, the Participant will receive a payment
equal to the Book Value of one share of Stock at the date of exercise minus the
Book Value of one share of Stock as of the Date of the Grant of the Stock
Appreciation Right times the number of shares called for by the Stock
Appreciation Right (or portion thereof) which is so exercised.
If the Participant elects to receive cash in full or partial settlement
of the Stock Appreciation Right (i) the Committee must consent to or disapprove
such election and (ii) the election and the exercise must be made during the
period beginning on the 3rd business day following the date of public release of
quarterly or year-end earnings and ending on the 12th business day following the
date of public release of quarterly or year-end earnings. The value of any Stock
to be received upon exercise of a Stock Appreciation Right shall be the Fair
Market Value of the Stock on the trading day preceding the date on which the
Stock Appreciation Right is exercised. To the extent that a Stock Appreciation
Right issued pursuant to an Option is exercised, such Option shall be deemed to
have been exercised, and shall not be deemed to have lapsed.
E. Nontransferable. A Stock Appreciation Right shall not be
transferable by the Participant except by will or the laws of descent and
distribution and shall be exercisable during the lifetime of the Participant
only by the Participant or by the guardian or legal representative of the
Participant.
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<PAGE> 11
SECTION TEN. PERFORMANCE SHARES
A. Grant of Performance Share Units. Awards made pursuant to this
Section Ten shall be granted in the form of Performance Shares, subject to such
terms and conditions not inconsistent with the Plan as the Committee shall
impose. Performance Shares shall be issued to the Participant without the
payment of consideration by the Participant. Awards shall be based on the
attainment of specified types and combination of performance measurement
criteria, which may differ as to various Participants or classes or categories
of Participants. Such criteria may include, with limitation, the attainment of
certain performance levels by the individual Participant, the Company, a
department or division of the Company and/or a group or class of Participants.
Such criteria, together with the ranges of Performance Shares from which
employees may be eligible shall be set from time to time by the Committee and
shall be timely communicated to the Eligible Employees in advance of the
performance of services to which the performance criteria relate. The total
number of Performance Shares which may be granted to any single Covered Employee
under this Plan during any calendar year shall be limited to 100,000.
B. Performance Period. The measuring period to establish the
performance criteria set forth in a Performance Share Award shall be determined
by the Committee. Notwithstanding the other provisions of this Section, a
Performance Share Award may initially provide, or the Committee may at any time
thereafter, but no more frequently than once in any six (6) month period, amend
it to provide, for waiver or reduction of the measuring period and, if
appropriate, for adjustment of the performance criteria set forth in the
Performance Share Award, upon the occurrence of events determined by the
Committee in its sole discretion to justify such waiver, reduction or
adjustment.
C. Form of Payment. Upon the completion of the applicable measuring
period, a determination shall be made by the Committee in accordance with the
Award as to the number of shares of Stock to be awarded to the Participant. The
appropriate number of shares of Stock shall thereupon be issued to the
Participant in accordance with the Award in satisfaction of such Performance
Share Award.
SECTION ELEVEN. CHANGES IN CAPITAL STRUCTURE
In the event of a change in the capital structure of the Company, the
number of shares specified in Section Five of this Plan, the number of shares
covered by each outstanding Award and the price per share shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from the splitting or consolidation of shares, or the
payment of a stock dividend, or effected in any other manner without receipt of
additional or further consideration by the Company.
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<PAGE> 12
SECTION TWELVE. CORPORATE REORGANIZATION OR DISSOLUTION
A. Discontinuation of the Plan. The Plan shall be discontinued in the
event of the dissolution or liquidation of the Company or in the event of a
Reorganization (as hereinafter defined) in which the Company is not the
surviving or acquiring company, or in which the Company is or becomes a
wholly-owned subsidiary of another company after the effective date of the
Reorganization and no plan or agreement respecting the Reorganization is
established which specifically provides for the continuation of the Plan and the
change, conversion, or exchange of the stock relating to existing Awards under
this Plan for securities of another corporation. Upon the dissolution of the
Plan in connection with an event described in this Paragraph A, all Awards shall
become fully vested and all outstanding Options and Stock Appreciation Rights
shall become immediately exercisable by the holder thereof. Any Options or Stock
Appreciation Rights granted under the Plan may be terminated as of a date fixed
by the Committee, provided that no less than fifteen (15) days written notice of
the date so fixed shall be given to each Participant and each such Participant
shall have the right during such period to exercise all or any portion of such
Options or Stock Appreciation Rights. Any Stock Appreciation Rights not so
exercised shall be redeemed.
B. Continuation of the Plan Upon a Reorganization. In the event of a
Reorganization (as hereinafter defined) (i) in which the Company is not the
surviving or acquiring company, or in which the Company is or becomes a
wholly-owned subsidiary of another company after the effective date of the
Reorganization, and (ii) with respect to which there is a reorganization
agreement which undertakes to continue the Plan and to provide for the change,
conversion or exchange of the Stock attributable to outstanding Awards for
securities of another corporation, then the Plan shall continue and the
Committee shall adjust the shares under such outstanding Awards (and shall
adjust the shares remaining under the Plan which are then to be available for
the grant of additional Awards under the Plan, if the reorganization agreement
makes specific provisions therefor), in a manner not inconsistent with the
provisions of the reorganization agreement and this Plan for the adjustment,
change, conversion or exchange of such Awards.
The term "Reorganization" as used in this Section Twelve shall mean any
statutory merger, statutory consolidation, sale of all or substantially all of
the assets of the Company, or sale, pursuant to an agreement with the Company,
of securities of the Company pursuant to which the Company is or becomes a
wholly-owned subsidiary of another company after the effective date of the
Reorganization.
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<PAGE> 13
C. Adjustments and determinations. Adjustments and determinations under
this Section Twelve shall be made by the Committee, whose decisions as to what
adjustments or determinations shall be made, and the extent thereof, shall be
final, binding, and conclusive.
SECTION THIRTEEN. RETIREMENT AND DISABILITY
The Committee may, in its discretion, waive the forfeiture,
termination, or lapse of an Award in the event of retirement or disability of a
Participant (each as determined by the Committee, in its discretion). Exercise
of such discretion by the Committee in any individual case, however, shall not
be deemed to require, or to establish a precedent suggesting such exercise in
any other case.
SECTION FOURTEEN. MISCELLANEOUS PROVISIONS.
A. Nontransferability. No benefit provided under this Plan shall be
subject to alienation or assignment by a Participant (or by any person entitled
to such benefit pursuant to the terms of this Plan), nor shall it be subject to
attachment or other legal process of whatever nature. Any attempted alienation,
assignment or attachment shall be void and of no effect whatsoever. Payment
shall be made only to the Participant entitled to receive the same or said
Participant's authorized legal representative. Deposit of any sum in any
financial institution to the credit of any Participant (or a person entitled to
such sum pursuant to the terms of this Plan) shall constitute payment to that
Participant (or such person).
B. No Employment Right. Neither this Plan nor any action taken
hereunder shall be construed as giving any right to be retained as an officer or
employee of the Company or any of its Subsidiaries.
C. Tax Withholding. Either the Company or a Subsidiary, as appropriate,
shall have the right to deduct from all Awards paid in cash any federal, state
or local taxes as it deems to be required by law to be withheld with respect to
such cash payments. In the case of Awards paid in Stock, the employee or other
person receiving such Stock may be required to pay to the Company or a
Subsidiary, as appropriate, the amount of any such taxes which the Company or
Subsidiary is required to withhold with respect to such Stock. At the request of
a Participant, or as required by law, such sums as may be required for the
payment of any estimated or accrued income tax liability may be withheld and
paid over to the governmental entity entitled to receive the same.
D. Fractional Shares. Any fractional shares concerning Awards shall be
eliminated at the time of payment by rounding down for fractions of less than
one-half and rounding up for fractions of equal to or more than one-half. No
cash settlements shall be made with respect to fractional shares eliminated by
rounding.
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<PAGE> 14
E. Government and Other Regulations. The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any government agencies
as may be required. The Company shall be under no obligation to register under
the Securities Act of 1933, as amended ("Act"), any of the shares of Stock
issued, delivered or paid in settlement under the Plan. If Stock awarded under
the Plan may in certain circumstances be exempt from registration under the Act,
the Company may restrict its transfer in such manner as it deems advisable to
ensure such exempt status.
F. Severance. Subject to the provision of Paragraph B of this Section
Fourteen, in the event a Participant's employment with the Company terminates,
his rights under any Award which constitutes an Option or a Stock Appreciation
Right terminates one (1) month from the date of such termination of employment.
Such rights shall be exercisable only to the extent the Participant was entitled
to exercise such rights under the Award on the date of such termination of
employment.
G. Death. If a Participant dies prior to the full exercise of his
Option and/or Stock Appreciation Right, his Option to purchase Stock under such
Option and/or Stock Appreciation Right may be exercised to the extent, if any,
that Participant would be entitled to exercise it at the date of the death of
the Participant by the person to whom the Option and/or Stock Appreciation Right
shall pass by will or by the laws of descent and distribution within twelve (12)
months of the death of the Participant or the expiration of the term of the
Option and/or Stock Appreciation Right whichever date is sooner.
H. Limitation. In no event may an Option be exercised by anyone after
the expiration date provided for in Section Eight of the Plan.
I. Governing Law. All matters relating to the Plan or to Awards granted
hereunder shall be governed by the laws of the State of Maryland, without regard
to its principles of conflict of laws.
J. Titles and Headings. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles and headings, shall control.
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<PAGE> 15
SECTION FIFTEEN. AMENDMENT OF PLAN.
A. Discretion of the Board. The Board may at any time and from time to
time alter, amend, suspend or terminate the Plan in whole or in part, except (i)
no action may be taken without stockholder approval which materially increases
the benefits accruing to Participants pursuant to the Plan, materially increases
the number of securities which may be issued pursuant to the Plan (except as
provided in Section Eleven), extends the period for granting Options under the
Plan or materially modifies the requirements as to eligibility for participation
in the Plan and (ii) no such action may be taken without the consent of the
Participant to whom any Award shall theretofore have been granted, which
adversely affects the rights of such Participant concerning such Award, except
as such termination or amendment of the Plan is required by statute, or rules
and regulations promulgated thereunder.
B. Automatic Termination. This Plan shall terminate on June 21, 2005.
Awards may be granted under this Plan at any time and from time to time prior to
the termination of the Plan. Any Award outstanding at the time the Plan is
terminated shall remain in effect until said Award is exercised or expires.
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EXHIBIT 5
June 5, 1996
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
RE: Manor Care, Inc.
Post-Effective Amendment No. 1 to
Registration Statement on Form S-8
Gentlemen:
I am General Counsel of Manor Care, Inc. (the "Company") and have acted
for the Company in connection with the preparation of the Company's
Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, covering shares of the Company's Common
Stock, $.10 par value, offered under the Company's 1995 Long-Term Incentive Plan
( the "Plan"). The Registration Statement was filed on April 28, 1995.
In connection with the rendering of the opinion set forth below, I have
reviewed the records of the Company, the minutes of the meetings of the
stockholders and directors of the Company and such other records and documents
as was necessary in my judgment to so render the following opinion.
Based on the foregoing, I am of the opinion that:
1. The Company is a corporation duly incorporated and existing under
the laws of the State of Delaware; and
2. The shares of Common Stock of the Company offered to the holders
under the exercise of options under the Plan, have been or will be legally
issued, fully paid and nonassessable.
I hereby consent to the filing of a copy of this opinion with the
Commission as an exhibit to the above-mentioned Post-Effective Amendment No. 1
to the Registration Statement.
Very truly yours,
James H. Rempe
Senior Vice President
and General Counsel
<PAGE> 1
EXHIBIT 23(i)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated May 7 1996,
included in Manor Care, Inc.'s Form 8-K for the year ended May 31, 1995 and to
all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Washington, DC
June 5, 1996
