As filed with the Securities and Exchange Commission on March 12, 1998
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
INTEGRATED HEALTH SERVICES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 23-2428312
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
10065 RED RUN BOULEVARD 21117
OWINGS MILLS, MD (Zip Code)
(Address of Principal Executive Offices)
INTEGRATED HEALTH SERVICES, INC.
1998 STOCK COMPENSATION PLAN
(Full Title of the Plan)
MARSHALL A. ELKINS, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
INTEGRATED HEALTH SERVICES, INC.
10065 RED RUN BOULEVARD
OWINGS MILLS, MD 21117
(Name and Address of Agent for Service)
(410) 998-8400
(Telephone Number, Including Area Code, of Agent for Service)
Copies of all communications, including all communications sent to agent for
service, should be sent to:
RONALD O. MUELLER, ESQ. LESLIE A. GLEW, ESQ.
GIBSON, DUNN & CRUTCHER LLP SENIOR VICE PRESIDENT AND ASSOCIATE
1050 CONNECTICUT AVENUE, NW, SUITE 900 GENERAL COUNSEL
WASHINGTON, DC 20036 INTEGRATED HEALTH SERVICES, INC.
(202) 955-8500 10065 RED RUN BOULEVARD
OWINGS MILLS, MD 21117
(410) 998-8400
<TABLE>
<CAPTION>
================================================================================
CALCULATION OF REGISTRATION FEE
- ------------------------------ ----------------------- ------------------------ ------------------------ --------------------
PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE PRICE FEE
- ------------------------------ ----------------------- ------------------------ ------------------------ --------------------
- ------------------------------ ----------------------- ------------------------ ------------------------ --------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.001 per share (including 500,000 (2) N/A $17,812,500 (3) $5,397.73
the Preferred Stock Purchase
Rights) (1) . . . .
- ------------------------------ ----------------------- ------------------------ ------------------------ --------------------
</TABLE>
(1) The Preferred Stock Purchase Rights, which are attached to the shares of
IHS Common Stock being registered, will be issued for no additional
consideration and, therefore, no additional registration fee is required.
(2) Pursuant to Rule 416(a), also covers additional securities that may be
offered as a result of stock splits, stock dividends or similar
transactions.
(3) Calculated pursuant to Rules 457(c) and 457(h)(1) based upon the average
of the high and low prices of the Common Stock on the New York Stock
Exchange on March 6, 1998, which was $35.625.
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Not filed as part of this Registration Statement pursuant to Note to
Part 1 of Form S-8.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not filed as part of this Registration Statement pursuant to Note to
Part 1 of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents of the Registrant heretofore filed with the
Securities and Exchange Commission (the "Commission") are hereby incorporated in
this Registration Statement by reference:
(1) Annual Report on Form 10-K for the year ended December 31, 1996 filed on
March 31, 1997;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 filed on
May 15, 1997;
(3) Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 filed on
August 14, 1997;
(4) Quarterly Report on Form 10-Q for the quarter ended September 30, 1997
filed on November 13, 1997;
(5) Current Report on Form 8-K filed on October 9, 1996 reporting, among other
things, the acquisition of Signature Home Care Group, Inc., as amended by
Form 8-K/A filed on November 14, 1996 and Form 8-K/A filed on July 9, 1997;
(6) Current Report on Form 8-K filed on October 25, 1996 reporting the
acquisition of First American Health Care of Georgia, Inc., as amended by
Form 8-K/A filed on November 26, 1996 and Amendment No. 1 to Form 8-K/A
filed on July 11, 1997;
(7) Current Report on Form 8-K filed on November 13, 1996 reporting the
execution of the Agreement and Plan of Merger (the "Coram Merger
Agreement") among the Registrant, IHS Acquisition XIX, Inc. and Coram
Healthcare Corporation ("Coram"),
1
<PAGE>
as amended by Form 8-K/A filed on April 11, 1997 reporting the termination
of the Coram Merger Agreement;
(8) Current Report on Form 8-K filed on May 23, 1997 reporting the Registrant's
agreement to issue privately an aggregate of $450 million principal amount
of 9 1/2% Senior Subordinated Notes due 2007;
(9) Current Report on Form 8-K filed on June 2, 1997 reporting (i) the
Registrant's issuance of an aggregate of $450 million principal amount of 9
1/2% Senior Subordinated Notes due 2007 and (ii) the Registrant's
acceptance for payment of an aggregate of $114,975,000 principal amount of
its 9 5/8% Senior Subordinated Notes due 2002, Series A and an aggregate of
$99,893,000 principal amount of its 10 3/4% Senior Subordinated Notes due
2004 pursuant to cash tender offers;
(10) Current Report on Form 8-K filed on July 11, 1997 reporting the execution
of the Merger Agreement among the Registrant, IHS Acquisition XXIV, Inc.
and RoTech Medical Corporation ("RoTech");
(11) Current Report on Form 8-K filed on September 9, 1997 reporting the
Registrant's agreement to issue privately an aggregate of $500 million
principal amount of its 9 1/4% Senior Subordinated Notes due 2008;
(12) Current Report on Form 8-K filed on September 19, 1997 reporting the
Registrant's $1.75 billion revolving credit and term loan facility, as
amended by Form 8-K/A filed on October 8, 1997;
(13) Current Report on Form 8-K filed on October 10, 1997 reporting the
Registrant's acquisition of Community Care of America, Inc. and the
Lithotripsy Division of Coram, as amended by Form 8-K/A filed on November
25, 1997;
(14) Current Report on Form 8-K filed on November 5, 1997 reporting the
Registrant's acquisition of RoTech, as amended by Form 8-K/A filed on
November 25, 1997;
(15) Current Report on Form 8-K filed on November 12, 1997 reporting the
Registrant's agreement to purchase 139 owned, leased or managed long-term
care facilities, 12 specialty hospitals and certain other businesses from
HEALTHSOUTH Corporation ("HEALTHSOUTH");
(16) Current Report on Form 8-K filed on January 14, 1998 reporting the
acquisition of 139 owned, leased or managed long-term care facilities, 12
specialty hospitals and certain other businesses from HEALTHSOUTH; and
reporting an amendment to the Registrant's revolving credit and term loan
facility;
(17) Current Report on Form 8-K filed on March 12, 1998 reporting the
Registrant's operating results for the year ended December 31, 1997.
(18) the description of the Common Stock set forth under the caption
"Description of Capital Stock" in Item 1 of the Registrant's Registration
Statement on Form 8-A (File No. 1-12306) as filed with the Commission on
September 1, 1993, together with any
2
<PAGE>
amendment or report filed with the Commission for the purpose of updating
such description; and
(19) the description of the Preferred Stock Purchase Rights set forth under the
caption "Description of Capital Stock" in Item 1 of the Registrant's
Registration Statement on Form 8-A (File No. 1-12306) as filed with the
Commission on September 28, 1995, together with any amendment or report
filed with the Commission for the purpose of updating such description.
All reports and other documents subsequently filed by the Registrant
pursuant to Sections 13(a) and (c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all such securities then remaining unsold
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such reports and documents.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such earlier statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters with respect to the validity of the Common
Stock registered hereby have been passed upon for the Registrant by Marshall A.
Elkins, Executive Vice President and General Counsel of the Registrant. Mr.
Elkins is the brother of Robert N. Elkins, the Company's Chairman of the Board
and Chief Executive Officer. Mr. Marshall Elkins owns 17,299 shares of Common
Stock and options to purchase 336,535 shares of Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the General Corporation Law of the State of Delaware (the
"DGCL"), a corporation may include provisions in its certificate of
incorporation that will relieve its directors of monetary liability for breaches
of their fiduciary duty to the corporation, except under certain circumstances,
including a breach of the director's duty of loyalty, acts or omissions of the
director not in good faith or which involve intentional misconduct or a knowing
violation of law, the approval or an improper payment of a dividend or an
improper purchase by the corporation of stock or any transaction from which the
director derived an
3
<PAGE>
improper personal benefit. The Registrant's Third Restated Certificate of
Incorporation, as amended, provides that the Registrant's directors are not
liable to the Registrant or its stockholders for monetary damages for breach of
their fiduciary duty, subject to the described exceptions specified by the DGCL.
Section 145 of the DGCL grants to the Registrant the power to
indemnify each officer and director of the Registrant against liabilities and
expenses incurred by reason of the fact that he or she is or was an officer or
director of the Registrant if he or she acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
Registrant, with respect to any criminal action or proceeding, and had no
reasonable cause to believe his or her conduct was unlawful. The Registrant's
Third Restated Certificate of Incorporation, as amended, and By-laws, as
amended, provide for indemnification of each officer and director of the
Registrant to the fullest extent permitted by the DGCL. In addition, the
Registrant has entered into indemnity agreements with its directors and
executive officers, a form of which is included as Exhibit 10.72 to the
Registrant's Registration Statement on Form S-1 (Registration No. 33-39339),
effective March 31, 1992.
Section 145 of the DGCL also empowers the Registrant to purchase and
maintain insurance on behalf of any person who is or was an officer or director
of the Registrant against liability asserted against or incurred by him or her
in any such capacity, whether or not the Registrant would have the power to
indemnify such officer or director against such liability under the provisions
of Section 145. The Registrant has purchased and maintains a directors' and
officers' liability policy for such purposes.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Unless otherwise indicated below as being incorporated by reference
to another filing of the Registrant with the Commission, each of the following
exhibits is filed herewith:
4 Integrated Health Services, Inc. 1998 Stock Compensation Plan
5 Opinion of Marshall A. Elkins, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Marshall A. Elkins, Esq. (filed as part of Exhibit
5).
24 Power of Attorney (included on signature page)
ITEM 9. UNDERTAKINGS.
(1) The undersigned Registrant hereby undertakes:
4
<PAGE>
(a) 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, as
amended (the "Securities Act");
(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. Notwithstanding
the foregoing, any increase or decrease in
volume of securities offered (if the total
dollar value of securities offered would not
exceed that which was registered) and any
deviation from the low or high and of the
estimated maximum offering range may be
reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price
represent no more than a 20 percent change in
the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table
in the effective 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 (1)(a)(i) and (1)(a)(ii) do not apply if
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 Exchange Act that are incorporated by
reference in this registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act, 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.
(c) 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.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
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.
5
<PAGE>
(3) Insofar as indemnification for liabilities arising under the Securities
Act 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.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all 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 Owings Mills, State of Maryland, on this 12th
day of March, 1998.
INTEGRATED HEALTH SERVICES, INC.
By: /s/
------------------------
Robert N. Elkins
Chairman of the Board and
Chief Executive Officer
Each person whose signature appears below constitutes and
appoints Robert N. Elkins, Lawrence P. Cirka and W. Bradley Bennett, jointly and
severally, his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Chairman of the Board and March 12, 1998
- -------------------------------- Chief Executive Officer
Robert N. Elkins (Principal Executive Officer)
/s/
- -------------------------------- President and Director March 12, 1998
Lawrence P. Cirka
/s/
- -------------------------------- Director March 12, 1998
Edwin M. Crawford
/s/
- -------------------------------- Director March 12, 1998
Kenneth M. Mazik
<PAGE>
<CAPTION>
<S> <C> <C>
/s/
- -------------------------------- Director March 12, 1998
Robert A. Mitchell
/s/
- -------------------------------- Director March 12, 1998
Charles W. Newhall, III
/s/
- -------------------------------- Director March 12, 1998
Timothy F. Nicholson
/s/
- -------------------------------- Director March 12, 1998
John L. Silverman
/s/
- -------------------------------- Director March 12, 1998
George H. Strong
/s/ Executive Vice President- March 12, 1998
- ----------------------------------- Chief Financial Officer
C. Taylor Pickett (Principal Financial Officer)
/s/
- ----------------------------------- Executive Vice President- March 12, 1998
W. Bradley Bennett Chief Accounting Officer
(Principal Accounting Officer)
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit Description Sequentially
- ------- ----------- ------------
Number Numbered Page
- ------ -------------
4 Integrated Health Services, Inc. 1998 Stock Compensation Plan
5 Opinion of Marshall A. Elkins, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Marshall A. Elkins, Esq. (filed as part of Exhibit 5).
24 Power of Attorney (included on signature page)
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Integrated Health Services, Inc.
We consent to the use of our report dated March 24, 1997
relating to the consolidated financial statements of Integrated Health Services,
Inc. and subsidiaries, incorporated herein by reference, to the incorporation
herein by reference of our report dated October 17, 1996 relating to the
consolidated financial statements of First American Health Care of Georgia, Inc.
and subsidiaries, which report appears in Form 8-K/A of Integrated Health
Services, Inc. filed on November 26, 1996, and to the incorporation herein by
reference of our report dated April 14, 1997 relating to the consolidated
financial statements of Community Care of America, Inc. and subsidiaries, which
report appears in Form 8-K of Integrated Health Services, Inc. filed on October
10,1997.
Our report dated March 24, 1997 refers to changes in
accounting methods, in 1995, to adopt Statement of Financial Accounting
Standards No. 121 relating to impairment of long-lived assets and, in 1996, from
deferring and amortizing pre-opening costs of medical specialty units to
recording them as expenses when incurred. Our report dated October 17, 1996
contains an explanatory paragraph regarding the uncertainty with respect to
certain contingent payments which may be payable under a settlement agreement
with the Health Care Financing Administration. Our report dated April 14, 1997
refers to the change in accounting method in 1996 to adopt Statement of
Financial Accounting Standards No. 121 relating to impairment of long-lived
assets.
/s/ KPMG Peat Marwick LLP
Baltimore, Maryland
March 12, 1998
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference on Form S-8 of
Integrated Health Services, Inc. of our report dated September 18, 1997 (October
21, 1997 as to Note 1), appearing in the Annual Report on Form 10-K of RoTech
Medical Corporation for the year ended July 31, 1997, which report appears in
the Form 8-K dated October 21, 1997, as amended, of Integrated Health Services,
Inc.
Deloitte & Touche LLP
Orlando, Florida
March 9, 1998
EXHIBIT 23.3
March 12, 1998
The Board of Directors
Integrated Health Services, Inc.
10065 Red Run Boulevard
Owings Mills, Maryland 21117
Re: Registration Statement on Form S-8
Dear Sirs:
I refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), on behalf of
Integrated Health Services, Inc. (the "Company"), relating to 500,000 shares of
the Company's Common Stock, par value $.001 per share (the "Shares"), to be
issued pursuant to the Company's 1998 Stock Compensation Plan (the "Plan").
As counsel for the Company, I have examined such corporate records,
other documents and such questions of law as I have considered necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examination, advise you that in my opinion all necessary corporate proceedings
by the Company have been duly taken to authorize the issuance of the Shares
pursuant to the Plan and that the Shares being registered pursuant to the
Registration Statement, when issued and paid for in accordance with the terms of
the Plan, will be duly authorized, validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to my name under the headings "Legal
Matters" and "Interests of Named Experts and Counsel" in the Registration
Statement. This consent is not to be construed as an
<PAGE>
The Board of Directors
Integrated Health Services, Inc.
March 12, 1998
Page 2
admission that I am a person whose consent is to be filed with the Registration
Statement under the provisions of the Securities Act.
Very truly yours,
Marshall A. Elkins
Executive Vice President and
General Counsel
EXHIBIT 4
INTEGRATED HEALTH SERVICES, INC.
1998 STOCK COMPENSATION PLAN
1. PURPOSE OF THE PLAN
This 1998 Stock Compensation Plan (the "Plan") is intended as a means
whereby Integrated Health Services, Inc., a Delaware corporation
(hereinafter "IHS"), may provide for awards of stock options and stock
grants to certain employees and Consultants (as defined below) of IHS
and its subsidiaries and affiliates, thereby helping to encourage the
judgment, initiative and efforts of such employees and Consultants by
further aligning their interests with those of the stockholders of IHS.
Stock options granted pursuant to the Plan are not incentive stock
options, as defined in Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. DEFINITIONS
(a) "Award" means an award of a stock option or a stock grant.
(b) "Board of Directors" means the Board of Directors of IHS.
(c) A "Change of Control" is deemed to occur if (i) there occurs (A)
any consolidation or merger in which the Company is not the continuing
or surviving entity or pursuant to which shares of the Common Stock
would be converted into cash, securities or other property, other than
a merger of the Company in which the holders of the 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 the Company's assets; (ii) the Company's stockholders
approve any plan or proposal for the liquidation or dissolution of the
Company; (iii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), shall become the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act) of 30% or more of the Common
Stock other than pursuant to a plan or arrangement entered into by such
person and the Company; or (iv) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
entire Board of Directors shall cease for any reason to constitute a
majority of the Board of Directors unless the election, or nomination
for election by the Company's stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of the period.
(d) "Committee" shall have the meaning set forth in Section 4(a).
(e) "Common Stock" means the common stock of IHS, par value $.001 per
share, as presently constituted, subject to adjustment, and including
other securities, as provided in Section 7.
1
<PAGE>
(f) "Consultant" means any person designated by the Corporation as an
independent contractor.
(g) "Corporation" means IHS and its Subsidiaries and affiliates, unless
the context otherwise requires.
(h) "Eligible Participants" means employees of the Corporation,
directors of a Subsidiary or Consultants of the Corporation as
described in Section 5.
(i) "Fair Market Value" means, as of any date, and unless the Committee
shall specify otherwise, the mean between the high and the low market
prices for the Common Stock reported for that date on the composite
tape for securities listed on the New York Stock Exchange or, if the
Common Stock did not trade on the New York Stock Exchange on the date
in question, then for the next preceding date for which the Common
Stock traded on the New York Stock Exchange.
(j) "Subsidiary" means any corporation of which IHS owns, directly or
indirectly, fifty percent (50%) or more of the voting or capital stock,
or any partnership of which IHS owns, directly or indirectly, a fifty
percent (50%) or more participating interest or the general partner of
which is a Subsidiary.
3. COMMON STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 7, the maximum number of
shares of Common Stock which may be issued pursuant to the Plan shall
not exceed 500,000. Shares issued under the Plan may be authorized and
unissued shares of Common Stock or shares of Common Stock reacquired by
IHS. All or any shares of Common Stock subject to a stock option or
stock grant which for any reason are not issued or are reacquired under
the stock option or stock grant may again be made subject to a stock
option or stock grant under the Plan.
4. ADMINISTRATION OF THE PLAN
(a) Composition of the Committee or Subcommittee. The Plan shall be
administered by the Board of Directors and/or by a committee (a
"Committee") or a subcommittee (a "Subcommittee") of the Board of
Directors, as appointed from time to time by the Board of Directors. Any
such Subcommittee shall be composed of one or more directors of IHS (who
may but need not be members of the Committee). Any action by the
Subcommittee shall be deemed for all purposes to have been taken by the
Committee and all references in this Plan or in an Award to the
Committee shall include any Subcommittee acting within the scope of its
delegation (with any references to the Subcommittee in this Section 4
being for purposes of clarification and not so as to limit the authority
of any Subcommittee under other Sections of the Plan). The Board of
Directors shall fill vacancies on and from time to time may remove or
add members to the Committee or Subcommittee. The Committee or
Subcommittee shall have the authority to make Awards under the Plan to
Eligible Participants, to determine all terms of such Awards, and/or to
administer the Plan or any aspect of it. The Committee or Subcommittee
2
<PAGE>
shall act pursuant to a majority vote or unanimous written consent. The
Committee or Subcommittee may designate the Secretary of IHS or other
IHS employees to assist it in the administration of the Plan, and may
grant authority to such persons to execute agreements evidencing Awards
or other documents entered into under the Plan on behalf of the
Committee or Subcommittee or on behalf of the Corporation. However, the
Committee or Subcommittee may not delegate to such designee the
authority to determine which persons are Eligible Participants or which
Eligible Participants will receive Awards.
(b) Powers of the Committee or Subcommittee. Subject to the express
provisions of the Plan, the Committee or Subcommittee shall be
authorized and empowered to do all things necessary or desirable in
connection with the administration of the Plan, including, without
limitation: (a) to prescribe, amend and rescind rules relating to the
Plan and to define terms not otherwise defined herein; (b) to prescribe
the form of documentation used to evidence any stock option or stock
grant awarded hereunder, including provision for such terms as it
considers necessary or desirable; (c) to establish and verify the extent
of satisfaction of any conditions to exercisability applicable to stock
options or to receipt or vesting of stock grants; (d) to determine
whether, and the extent to which, adjustments are required pursuant to
Section 7 hereof; and (e) to interpret and construe the Plan, any rules
and regulations under the Plan and the terms and conditions of any stock
option or stock grant awarded hereunder, and to make exceptions to any
procedural provisions in good faith and for the benefit of IHS.
Notwithstanding any provision of the Plan, the Board of Directors may at
any time limit the authority of the Committee or Subcommittee to
administer the Plan.
(c) Determinations of the Committee or Subcommittee. All decisions,
determinations and interpretations by the Committee or Subcommittee
regarding the Plan, any rules and regulations under the Plan and the
terms and conditions of any stock option or stock grant awarded
hereunder, shall be final and binding on all Eligible Participants and
holders of stock options and stock grants. The Committee or Subcommittee
may consider such factors as it deems relevant, in its sole and absolute
discretion, in making such decisions, determinations and interpretations
including, without limitation, the recommendations or advice of any
officer or other employee of the Corporation and such attorneys,
consultants and accountants as it may select.
5. ELIGIBLE PARTICIPANTS
Any person who is an employee of the Corporation, a director of a
Subsidiary or a Consultant of the Corporation shall be eligible
(together, "Eligible Participants") for the award of stock options
and/or stock grants hereunder unless the grant of an Award to such
person would require the Plan to be approved by the stockholders of IHS
under Rule 312.03(a) of the rules of the New York Stock Exchange.
6. GRANT, TERMS AND CONDITIONS OF AWARDS
(a) General Terms and Conditions. Stock options and stock grants awarded
pursuant to the Plan will be evidenced by a written agreement in a form
approved by the Committee or
3
<PAGE>
Subcommittee, which need not be identical. In addition, each stock
option and stock grant shall be subject to the following general terms
and conditions:
(1) Terms and Restrictions Upon Shares. The Committee may (but need
not) provide that the shares of Common Stock issued upon exercise
of a stock option or receipt of a stock grant shall be subject to
such further conditions, restrictions or agreements as the
Committee in its discretion may specify prior to the exercise of
such stock option or receipt of such stock grant, including without
limitation, deferrals on issuance, conditions on vesting or
transferability, and forfeiture or repurchase provisions. The
Committee may establish rules for the deferred delivery of Common
Stock upon exercise of a stock option or receipt of a stock grant
with the deferral evidenced by use of "Stock Units" equal in number
to the number of shares of Common Stock whose delivery is so
deferred. A "Stock Unit" is a bookkeeping entry representing an
amount equivalent to the Fair Market Value of one share of Common
Stock. Stock Units represent an unfunded and unsecured obligation
of the Corporation except as otherwise provided by the Board of
Directors. Settlement of Stock Units upon expiration of the
deferral period shall be made in Common Stock or otherwise as
determined by the Committee. The amount of Common Stock, or other
settlement medium, to be so distributed may be increased by an
interest factor or by dividend equivalents. Until a Stock Unit is
settled, the number of shares of Common Stock represented by a
Stock Unit shall be subject to adjustment pursuant to Section 7.
(2) Adequate Consideration. To the extent prohibited by Section 152
of the Delaware General Corporation Law, stock options and stock
grants may not be awarded in consideration of future services. In
addition, the consideration for any stock grant shall not be less
than the par value of the Common Stock to be awarded.
(3) Acceleration of Vesting Upon Change of Control. If there is a
Change of Control of the Company, then (i) all outstanding options
shall become fully exercisable whether or not the vesting
conditions, if any, set forth in the related option agreements have
been satisfied, and each option holder shall have the right to
exercise his or her options prior to such Change of Control and for
as long thereafter as the option shall remain in effect in
accordance with its terms and the provisions hereof, and (ii) all
stock grants shall become fully-vested, and all restrictions on
transferability and all rights of the Company to repurchase shares
of restricted stock shall terminate at the effective time of such
Change in Control.
(4) Other Terms and Conditions. No holder of a stock option or
stock grant shall have any rights as a stockholder with respect to
any shares of Common Stock subject to a stock option or stock grant
hereunder until said shares have been issued. Stock options and
stock grants may also contain such other provisions,
4
<PAGE>
which shall not be inconsistent with any of the foregoing terms, as
the Committee shall deem appropriate.
(b) Stock Option Price. The exercise price for each stock option shall
be established by the Committee. The exercise price shall not be less
than the Fair Market Value of the stock on the date of grant. The
exercise price shall be paid in full at the time of exercise. The
exercise price shall be payable in cash, by payment under an arrangement
with a broker where payment is made pursuant to an irrevocable direction
to the broker to deliver all or part of the proceeds from the sale of
the option shares to the Corporation, by the surrender of shares of
Common Stock owned by the option holder exercising the option and having
a Fair Market Value on the date of exercise equal to the exercise price
but only if such will not result in an accounting charge to the
Corporation, or by any combination of the foregoing.
(c) Transferability of Option. Unless otherwise provided by the
Committee, each stock option shall be transferable only by will or the
laws of descent and distribution.
(d) Stock Grant Terms. Subject to Section 6(a)(2), stock grants under
the Plan may, in the sole discretion of the Committee, but need not, be
conditioned upon the Eligible Participant paying cash or cash-equivalent
consideration or agreeing to forego other compensation for the shares of
Common Stock covered by the stock grant. Stock grants under the Plan may
be subject to such conditions, restrictions or other vesting terms as
are established in the sole discretion of the Committee. The conditions,
restrictions or vesting terms may be contingent upon the passage of
time, continued service or achievement of Corporation or individual
performance goals, as specified by the Committee.
7. ADJUSTMENT OF AND CHANGES IN SECURITIES
(a) If the outstanding securities of the class(es) then subject to the
Plan are increased, decreased or exchanged for or converted into cash,
property or a different number or kind of shares or other securities, or
if cash, property or shares or other securities are distributed in
respect of such outstanding securities, in either case as a result of a
reorganization, reclassification, dividend (other than a regular,
quarterly cash dividend) or other distribution, stock split, reverse
stock split, spin-off or the like, or if substantially all of the
property and assets of the Corporation are sold, then, unless the terms
of such transaction shall provide otherwise, the maximum number and type
of shares or other securities that may be subject to Awards under the
Plan shall be appropriately adjusted. The Committee shall determine in
its sole discretion the appropriate adjustment to be effected pursuant
to the immediately preceding sentence. In addition, in connection with
any such change in the class(es) of securities then subject to the Plan,
the Committee may make appropriate and proportionate adjustments in the
number and type of shares or other securities or cash or other property
that may be acquired pursuant to stock options and stock grants
theretofore awarded under the Plan and the exercise price of such
options or price of such stock grants.
(b) No right to purchase fractional shares or fractions of other
securities shall result from any adjustment in stock options or stock
grants pursuant to this Section. In case of any such
5
<PAGE>
adjustment, the shares or other securities subject to the stock option
or stock grant shall be rounded down to the nearest whole share of
Common Stock or equivalent other security, as the case may be.
8. COMPLIANCE WITH OTHER LAWS AND REGULATIONS
The Plan, the grant and exercise of Awards thereunder, and the
obligation of IHS to sell, issue or deliver shares of Common Stock under
such Awards, shall be subject to all applicable federal, state and
foreign laws, rules and regulations and to such approvals by any
governmental or regulatory agency as may be required. IHS shall not be
required to register in the name of the holder of the Award or deliver
any shares of Common Stock if in the opinion of the Committee such
action would violate any applicable federal, state or foreign laws,
rules or regulations of requires as a condition any approvals by any
governmental or regulatory agency which have not theretofore been
obtained. IHS shall not be required to register in the name of the
holder of the Award or deliver any shares of Common Stock under the Plan
or any Award prior to the completion of any registration or
qualification of such shares under any federal, state or foreign law or
any ruling or regulation of any government body which the Committee
shall, in its sole discretion, determine to be necessary or advisable.
Without limiting the foregoing, IHS shall not be required to register in
the name of the holder of the Award or deliver any shares of Common
Stock under the Plan or any Award unless (i) the Eligible Participant or
other person in whose name such shares are to be registered or to whom
such shares are to be delivered is an "employee" or other person as to
whom offers and sales of securities can be registered under the
Securities Act of 1933 on a Form S-8, (ii) the Company at the time
qualifies for use of Form S-8, and (iii) a Form S-8 covering such offer
and/or sales has been filed and is effective. The Corporation shall be
under no obligation to file a registration statement covering offers and
sales under the Plan other than as described in the preceding sentence.
In the absence of registration on Form S-8, IHS may in its discretion
rely on the availability of an exemption from registration under the
Securities Act of 1933 and any other applicable federal, state and
foreign law for the offer, sale and delivery of shares of Common Stock
under the Plan or any Award, provided that in any such case IHS may
condition the offer, sale or delivery of shares of Common Stock upon the
Eligible Participant or other person in whose name such shares are to be
registered or to whom such shares are to be delivered upon (i) such
person providing IHS in writing representations and warranties and
requested by the Committee, including but not limited to a
representation that such person is acquiring such shares for his or her
own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof, that such person
is a sophisticated investor and that such person has had the opportunity
to review relevant financial and other information regarding the
Corporation, (ii) the certificates representing such shares bearing such
legends as the Committee may deem necessary or appropriate, and (iii)
the Company receiving a legal opinion from such person as to the
availability of any such exemption.
6
<PAGE>
9. TAX WITHHOLDING
To the extent required by applicable federal, state, local or foreign
law, an Eligible Participant or holder of an Award shall make
arrangements satisfactory to the Committee for the satisfaction of any
withholding tax obligations that arise by reason of any issuance of
shares under the Plan. The Corporation shall not be required to issue
shares of Common Stock or to recognize the disposition of such shares
until such obligations are satisfied. The Committee may permit these
obligations to be satisfied by any means permitted under Section 6(b)
for the payment of the exercise price of a stock option.
10. AWARDS BY SUBSIDIARIES
In the case of an Award to any Eligible Participant of a Subsidiary,
such Award may, if the Committee so directs, be implemented by IHS
issuing any subject shares to the Subsidiary, for such lawful
consideration as the Committee may determine, upon the condition or
understanding that the Subsidiary will transfer the shares to the holder
of the Award in accordance with the terms of the Award specified by the
Committee pursuant to the provisions of the Plan. Notwithstanding any
other provision hereof, such Award may be issued by and in the name of
the Subsidiary and shall be deemed granted on such date as the Committee
shall determine.
11. EFFECTIVE DATE, AMENDMENT AND TERMINATION OF PLAN
This Plan shall become effective upon its approval by the Board of
Directors. Unless earlier suspended or terminated by the Board of
Directors, or extended as provided below, no stock options or stock
grants may be awarded after the tenth anniversary of the effective date
of the Plan. The Board of Directors or the Committee may from time to
time extend the effective term of the Plan and otherwise amend the Plan
as determined appropriate, without action by the stockholders of IHS
except to the extent required by applicable law. References in the Plan
and in writings evidencing and setting the terms of Awards which refer
to the Code or other applicable law shall also be deemed to refer to any
applicable successor provisions thereof unless otherwise determined by
the Committee. The Plan may be earlier terminated at such earlier time
as the Board of Directors may determine.
12. APPLICABLE LAW AND FORUM
This Plan and any rights hereunder shall be interpreted and construed in
accordance with the laws of the State of Delaware and applicable federal
law. Any claim, dispute or other matter in question of any kind relating
to the Plan or any Award shall be brought only in the appropriate
federal or state court located within or with closest geographic
proximity to the principal executive offices of IHS.
7
