As filed with the Securities and Exchange Commission on June 27, 1994.
Registration No. 33-____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
FHP International Corporation
(Exact name of registrant as specified in its charter)
___________________
Delaware 33-0072502
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9900 Talbert Avenue, Fountain Valley, California 92708
(Address of principal executive offices)
FHP International Corporation/TakeCare, Inc. Stock Option Plan
(Full title of the plan)
Robert F. Murphy
Associate Vice President and Associate General Counsel
9900 Talbert Avenue, Fountain Valley, California 92708
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent for service: (714) 963-7233
___________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
Common Stock, 965,000(1),(2) $24.375(3) $23,521,875(3) $8,111(3)
par value $0.05 shares
per share
(1) This Registration Statement covers, in addition to the number of shares of
Common Stock stated above, options and other rights to purchase the shares
of Common Stock covered by the Prospectus and, pursuant to Rule 416, an
additional indeterminate number of shares which by reason of certain
events specified in the Plan may become subject to the Plan.
(2) Each share is accompanied by a common share purchase right pursuant to the
Registrant's Amended and Restated Rights Agreement, dated March 28, 1994,
with American Stock and Transfer Company, as Rights Agent.
(3) Pursuant to Rule 457(h), the maximum offering price, per share and in the
aggregate, and the registration fee were calculated based upon the
average of the high and low prices of the Common Stock on June 22, 1994,
as reported in the consolidated reporting system of NASDAQ and published
in the Western Edition of the Wall Street Journal.
The Exhibit Index for this Registration Statement is at page 9.
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form
S-8 (plan information and registrant information) will be sent or given to
employees as specified by Rule 428(b)(1) of the Securities Act of 1933,
as amended (the "Act"). Such documents need not be filed with the Securities
and Exchange Commission either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424 of the Act.
These documents, which include the statement of availability required by
Item 2 of Form S-8, and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Form S-8 (Part II hereof),
taken together, constitute a prospectus that meets the require Section 10(a)
of the Act.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents of FHP International Corporation (the"Company")
filed with the Securities and Exchange Commission are incorporated herein
by reference:
(a) Annual Report on Form 10-K for the Company's fiscal year ended
June 30, 1993;
(b) Quarterly Reports on Form 10-Q for the Company's quarterly periods
ended September 30, 1993, December 31, 1993 and March 31, 1994; and
(c) The description of the Company's Common Stock contained in its
Registration Statement on Form S-4 dated May 2, 1994 (Registration
No. 33-53431), and any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the filing of a post-effective amend-
ment indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into the prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained herein or in
a document, all or a portion of which is 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 statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or amended, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
The Company's Common Stock, par value $0.05 per share, (the "Common
Stock") is registered pursuant to Section 12 of the Exchange Act, and,
therefore, the description of securities is omitted.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of Delaware allows for
indemnification of directors, employees and agents of a corporation against
expenses (including attorneys' fees) and other amounts paid in settlement
actually and reasonably incurred by them in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, in which any such person was or is a party
or is threatened to be made a party, if such person acted in good faith and
in a manner such person reasonably believed to be in or not opposed to the
best interest of the corporation and, with respect to any criminal action or
proceeding, if such person had no reasonable cause to believe his conduct
was unlawful. In the case of an action or suit by or in the right of the
corporation, such a person may not be indemnified in respect of any claim,
issue or matter as to which he has been adjudged liable for negligence or
misconduct in the performance of his duty to the Company, unless and only
to the extent the court in which such action or suit was brought determines
that such person is fairly and reasonably entitled to indemnity for such
expenses as such court may deem proper. In each case, indemnification shall
be made only upon specific authorization of a majority of disinterested
directors, by written opinion of independent legal counsel or by the
shareholders, unless the director, officer, employee or agent has been
successful on the merits or otherwise in defense of any such action or suit,
in which case he shall be indemnified without such authorization.
The Certificate of Incorporation of the Company provides that directors,
officers and certain other persons will be indemnified to the fullest extent
permitted by Delaware law. In addition, the Company's Bylaws provide for
mandatory indemnification of directors and officers and discretionary
indemnification of employees. The Company is not required to indemnify
any person in a proceeding initiated by such person. The Company's
Certificate of Incorporation provides that the amendment or repeal of the
indemnification provisions does not apply to the liability of any director
of the Company with respect to acts or omissions of such director prior
to such amendment or repeal.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See the attached Exhibit Index.
Item 9. Undertakings
(a) 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, 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;
and
(iii) To include any material information with respect to
the plan of distribution not previous 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 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, as amended (the "Exchange Act") that are
incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
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; and
(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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to 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.
(h) 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 provisions described in Item 6 above,
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 Securities 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 indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
<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 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 Fountain Valley, State of
California, on June 24, 1994.
By:______________________________
Westcott W. Price III
Its: Chief Executive Officer and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Westcott W. Price III, Mark B. Hacken, Michael J. Weinstock, Robert F. Murphy
and Russell D. Phillips, Jr., his or her true and lawful attorneys-in-fact
and agents, each acting alone, with full powers of substitution and re-
substitution, for him or her and in his or her 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, each acting alone, full power and authority to do
and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he or
she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, each acting alone, 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 below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/Robert Gumbiner Director June 24, 1994
________________________
Robert Gumbiner
/s/Westcott W. Price III Chief Executive Officer, June 24, 1994
________________________ President and Director
Westcott W. Price III (Principal Executive Officer)
/s/Mark B. Hacken Chief Executive Officer and June 24, 1994
________________________ Director (Principal Executive
Mark B. Hacken Officer)
/s/Burke F. Gumbiner Director June 24, 1994
________________________
Burke F. Gumbiner
/s/Warner Heineman Director* June 24, 1994
________________________
Warner Heineman
/s/Joseph F. Prevratil Director* June 24, 1994
________________________
Joseph F. Prevratil
/s/Richard M. Rodnick Director* June 24, 1994
________________________
Richard M. Rodnick
________________________ Director* June __, 1994
Jack R. Anderson
/s/Kenneth S. Ord Chief Financial Officer June 24, 1994
________________________ (Principal Financial Officer)
Kenneth S. Ord
/s/Valerie A. Fletcher Controller (Principal June 24, 1994
________________________ Accounting Officer)
Valerie A. Fletcher
_________________________________
* Member of Compensation Committee<PAGE>
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
4. FHP International Corporation/TakeCare,
Inc. Stock Option Plan (successor to the
TakeCare, Inc. Amended and Restated 1990
Stock Option Plan and the TakeCare, Inc.
1993 Stock Option Plan).
5. Opinion of O'Melveny & Myers (opinion re
legality).
23.1 Consent of Independent Accountants.
23.2 Consent of O'Melveny & Myers (included in
Exhibit 5).
24. Power of Attorney (included in this
Registration Statement under "Signatures").
FHP International Corporation/TakeCare, Inc.
Stock Option Plan
This FHP International Corporation/TakeCare, Inc. Stock
Option Plan (the "Plan") is adopted pursuant to the Agreement and
Plan of Merger, dated as of March 3, 1994, by and among FHP
International Corporation (the "Company"), FHP Sub, Inc. and
TakeCare, Inc., and is effective as of June 17, 1994. This Plan
is the successor to the TakeCare, Inc. Amended and Restated 1990
Stock Option Plan (the "1990 TakeCare Plan") and the TakeCare,
Inc. 1993 Stock Option Plan (the "1993 TakeCare Plan", and,
together with the 1990 TakeCare Plan, the "TakeCare Plans"). The
purpose of this Plan is to provide for the conversion of options
granted under the TakeCare Plans that were outstanding as of June
17, 1994 into options (the "Converted Options") to acquire shares
of Common Stock of FHP International Corporation (the "Company")
in accordance with the terms of this Plan and the Converted
Option agreements. Except for the Converted Options, no other
options shall be granted by the Company pursuant to this Plan.
The documents constituting this Plan are this document
together with the TakeCare Plan documents attached hereto.
Except as otherwise provided herein, the terms, conditions and
limitations of the TakeCare Plans are incorporated herein.
This Plan consists of two parts. Part I is the portion
of the Plan which was formerly the 1990 TakeCare Plan, and,
except as otherwise provided herein, the terms, conditions and
limitations of Part I shall govern the Converted Options
previously granted pursuant to the 1990 TakeCare Plan. Part II
is the portion of the Plan which was formerly the 1993 TakeCare
Plan and, except as otherwise provided herein, the terms,
conditions and limitations of Part II shall govern the Converted
Options previously granted pursuant to the 1993 TakeCare Plan.
Unless sooner terminated by the Board of Directors of the Company
(the "Board"), Part I and Part II of this Plan shall each
terminate as of the respective dates set forth in the 1990
TakeCare Plan and the 1993 TakeCare Plan.
Notwithstanding anything else contained herein to the
contrary, the following additional provisions shall apply with
respect to this Plan:
1. Definitions. As used in this Plan, all references
to:
(a) "Common Stock" or "Stock" shall mean the
Common Stock of the Company; and
(b) "TakeCare, Inc." or "TakeCare" shall mean FHP
International Corporation.
2. Administration. This Plan shall be administered
in the same manner as the FHP International Corporation Executive
Incentive Plan (the "Incentive Plan"). Accordingly, this Plan
shall be administered by the same committee of the Board which
administers the Incentive Plan and such committee shall have all
of the same powers, rights and duties under this Plan as it has
under the Incentive Plan. In addition, the Committee shall have
full power and authority to construe and interpret the terms and
provisions of the Plan, which construction or interpretation
shall be final and binding on all parties.
3. Shares Available under this Plan. Notwithstanding
anything else contained herein, the maximum number of shares of
Common Stock which may be issued under this Plan pursuant to the
Converted Options shall not exceed 965,000 shares, subject to
adjustment as provided in Paragraph 4 below. Such shares may be
shares of original issuance or treasury shares or a combination
of the foregoing.
4. Adjustments. The Board may make or provide for
such adjustments in the maximum number of shares specified in
Paragraph 3 of this Plan, in the number of shares of Common Stock
covered by the Converted Options granted hereunder, and in the
prices per share applicable to such Converted Options, as such
Board in its sole discretion, exercised in good faith, may
determine is equitably required to prevent dilution or
enlargement of the rights of optionees that otherwise would
result from any stock dividend, stock split, combination of
shares, recapitalization or other change in capital structure of
the Company, merger, consolidation, spin-off, reorganization,
partial or complete liquidation, issuance of rights or warrants
to purchase securities, or any other corporate transaction or
event having an effect similar to any of the foregoing.
5. Fractional Shares. The Company shall not be
required to issue any fractional share of Common Stock pursuant
to this Plan. The Board of Directors may provide for the
elimination of fractions of for the settlement of fractions in
cash.
6. Amendments or Termination. This Plan may be
amended from time to time or terminated by resolution of the
Board of Directors. Any termination of this Plan shall not
adversely affect the rights of holders of Converted Options which
are outstanding as of such date of termination.
<PAGE>
TAKECARE, INC.
Amended and Restated 1990 Stock Option Plan
1. Purpose
This Amended and Restated 1990 Stock Option Plan adopted as
of February 15, 1991 and as amended and restated as of January 1,
1992 (the "Plan"), is designed to provide additional incentive to
certain officers and key employees of TakeCare, Inc. (the
"Company") or of any subsidiary corporation (the "Subsidiaries")
as that term is defined in Section 425 of the Internal Revenue
Code of 1986, as amended ("IRC"), to promote the interest of the
company, its subsidiaries and its stockholders, and, by
facilitating stock ownership on the part of such officers and
employees, to encourage them to acquire a proprietary interest in
the Company and to remain in its employ or in the employ of its
subsidiaries.
Options issued pursuant to this Plan may constitute
incentive stock options within the meaning of Section 422A of the
IRC ("Incentive Stock Options") or may be options which do not
meet said requirements ("Nonqualified Options").
2. Definitions
"Committee" means the Compensation Committee of the Board of
Directors of the Company, whose members shall be appointed from
time to time by, and shall serve at the pleasure of, the
Company's Board of Directors.
"Grantee" means a person to whom an option or options under
this Plan has or have been granted.
"Option Agreement" means the written instrument from the
Committee to the Grantee of an option describing the terms of the
option, as provided in Section 7 hereof.
"Stock" means the common stock of the Company.
"Term of the Option" means the period during which a
particular option may be exercised as provided in Section 9.1
hereof.
3. Effective Date of the Plan; Term
The Plan shall become effective on the date the shareholders
of the Company approved it. No options intended to be Incentive
Stock Options may be granted hereunder after August 20, 2000, the
tenth anniversary of the date the Board of Directors approved the
Plan.
4. Shares Subject to the Plan
The Company has the authority to grant options for the
lesser of (i) 600,000 shares or (ii) such number of shares as the
Board of Directors shall authorize of the authorized but unissued
Stock of the Company under the Plan.
5. Administration of the Plan
5.1 The Plan shall be administered by the Committee, whose
members shall be ineligible to receive options under the Plan.
5.2 The Committee shall adopt such rules or procedures as
it may deem proper; provided, however, that it may take action
upon the agreement of a majority of the whole Committee. Any
action which the Committee shall take through a written
instrument signed by a majority of its members shall be as
effective as though taken at a meeting duly called and held.
5.3 The powers of the Committee shall include plenary
authority to administer and interpret the Plan, and subject to
the provisions hereof, to determine the persons to whom options
shall be granted, the number of shares subject to each option,
the terms and provisions of each option, and the date on which
options shall be granted. Any interpretation of options intended
to be Incentive Stock Options shall be made in such a manner that
they continue to be Incentive Stock Options.
6. Persons Eligible to Receive Options
The persons who shall be eligible to receive options granted
hereunder, intended to be Incentive Stock Options, shall be those
key employees and officers (including directors who are full-time
employees of the Company) of the company or its Subsidiaries who
are selected by the Committee from time to time. Persons
designated by the Committee who are eligible to receive
Nonqualified Options hereunder need not be employees of the
company or its Subsidiaries. A Grantee may hold more than one
option, but only on the terms and subject to the restrictions
hereafter set forth.
7. Options
7.1 Options shall contain such provisions as may be
required by the terms hereof, the time and manner by which the
options may be exercised and such other provisions (including
restrictions on the option and the option stock) as the Committee
shall in its discretion impose. The Committee may vary the terms
and provisions of individual options on a case by case basis and
shall not be required to make all options uniform. Options of
the following types may be granted hereunder:
(a) Incentive Stock Options as defined in Section 422A of
the IRC; and
(b) Options which do not qualify as Incentive Stock
Options.
7.2 No option intended to be an Incentive Stock Option
shall be granted to any person owning, within the meaning of
Sections 422A and 425 of the IRC, stock of the company, or its
parent or any of the Subsidiaries, possessing more than 10% of
the total combined voting power of all classes of stock of any
such company unless the provisions of Sections 8 and 9.1 hereof
are complied with; and in any one calendar year, no individual
shall receive options to purchase stock under any plan of the
Company or the Subsidiaries, intended to be Incentive Stock
Options, to the extent that the stock subject to such options
exercisable for the first time in any year has a value
(determined at the time the options are granted) in excess of
$100,000.
7.3 The Committee shall designate appropriate officers of
the Company who are hereby authorized to prepare, execute and
deliver options in the name of the Company, with such provisions
as from time to time may be dictated by the Committee.
8. Option Price
The option price to be paid by the Grantee to the Company
upon exercise of the option shall be determined by the Committee
at the date such option is granted. No option shall have an
option price less than the fair market value of the shares on the
date of the grant. If any option intended to be an Incentive
Stock Option is granted to any person holding stock possessing
more than 10% of the total combined voting power of all classes
of stock of either the Company or any of the Subsidiaries, the
option price shall be not less than 110% of the fair market value
of the shares on the date of the grant.
9. Terms and Exercise of Options
9.1 Each option granted under the Plan shall be exercisable
only during a term commencing on the date when the option was
granted and ending (unless the option shall have terminated
earlier under other provisions of the Plan) on a date to be fixed
by the Committee, but not later than eleven years from the date
of grant, in the case of any option not intended to be an
Incentive Stock Option, or ten years from the date of grant in
the case of any option intended to be an Incentive Stock Option,
subject to the following further limitations:
(a) any option intended to be an Incentive Stock Option
which is granted to any person possessing more than 10%
of the total combined voting power of all classes of
stock of the company or any of the Subsidiaries, shall
be exercisable not later than five years from the date
of grant; and
(b) subject to the provisions of Section 10 hereof, any
option intended to be an Incentive Stock Option may not
be exercisable more than three months after the Grantee
ceases to be an employee of the Company or any of the
Subsidiaries.
9.2 The Committee shall have authority to grant options,
exercisable in whole or in part, at any time during their term,
or exercisable in cumulative or non-cumulative installments, as
may be determined by the Committee provided that any option
intended to be an Incentive Stock Option shall meet the terms of
Section 7.2 hereof.
9.3 Options shall be exercised by delivering or mailing to
the Committee:
(a) a notice, in the form prescribed by the Committee,
specifying the number of shares to be purchased.
(b) a check or money order payable to the Company for the
full option price in the case of Incentive Stock
Options, and in an amount equal to the full option
price plus any withholding tax required by law as
determined by the Committee in the case of any other
option (if provided in the Grantee's Option Agreement,
payment of the option price required by this clause (b)
may be made by delivery of stock of the Company which
will be deemed to be worth its fair market value on the
date of delivery), and
(c) if the shares are to be issued pursuant to the
exemption from registration under the Securities Act of
1933 provided by Section 4(2) or any successor section
of such Act, an "investment letter" in such form as may
be dictated by the Committee.
9.4 Upon receipt of such notice (and investment letter when
applicable) and upon payment of the option price (and taxes when
applicable), the Company shall promptly deliver to the Grantee a
certificate or certificates for the shares purchased, without
charge for issue or transfer tax. In the event that such shares
are not registered under the Securities Act of 1933, such
certificates shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 or any state
securities acts, and therefore may not be sold or otherwise
transferred unless (a) such shares are registered under such Act
and the relevant state acts or (b) an opinion of counsel
satisfactory to the company is obtained to the effect that such
registration is not necessary."
9.5 All options granted under the Plan shall be non-
transferable other than by will or by the laws of descent and
distribution, subject to Section 10 hereof, and an option may be
exercised during the lifetime of the Grantee only by him.
9.6 Upon purchase of shares under option by the Grantee,
the stock certificate or certificates may, at the request of the
Grantee, be issued in the Grantee's name and the name of another
person as joint tenants with the right of survivorship, provided
that any restrictions upon such stock shall apply with equal
force to such joint tenant.
10. Exercise of Option after Death of Grantee
In the absence of terms in the Option Agreement to the
contrary, if a Grantee should die prior to exercising his or her
option, the option may, until the expiration of one year from the
date of death of the Grantee or until the earlier termination of
the term of the option, be exercised by the estate of the
deceased Grantee up to the extent the deceased Grantee could have
exercised the option on the date of his or her death. Such
exercise shall otherwise be subject to all applicable conditions
and restrictions prescribed in Section 9 hereof and in the Option
Agreement.
11. Stockholder's Rights
No person shall have the rights of a stockholder by virtue
of a stock option except with respect to shares actually issued
to him, and issuance of shares shall confer no retroactive rights
to dividends.
12. Adjustments
In the event of the declaration of any stock dividend on the
stock or in the event of any reorganization, merger,
consolidation, acquisition, separation, recapitalization, split-
up, combination or exchange of shares of stock, or like
adjustment, the number of shares of stock and the class of shares
of stock available pursuant to the Plan, and the option prices,
shall be adjusted by appropriate changes in the Plan and in any
options outstanding pursuant to the Plan. Any such adjustment to
the Plan or to options or option prices shall be made by action
of the Committee, whose determination shall be conclusive;
provided, however, that each option granted pursuant to the Plan
intended to be an Incentive Stock Option shall be so adjusted as
to continue to qualify as an Incentive Stock Option within the
meaning of Section 422A of the IRC. Notwithstanding the
foregoing, in the event of such a reorganization, merger,
consolidation, acquisition, separation, recapitalization, split-
up, combination or exchange of shares of stock, or like
adjustment which results in substantially all the shares of the
stock of the Company being exchanged for, or converted into cash
or other property, the Company shall have the right to terminate
the Plan as of the date of the exchange or conversion in which
case the options shall become the right to receive such case or
property net of the exercise price of the options.
13. Termination, Suspension or Amendment of Plan
The Board of Directors may at any time terminate, suspend or
amend the Plan, except that the Board shall not, without the
authorization of the holders of a majority of the shares voted at
a stockholders' meeting duly called and held, change any
provisions (other than those adjustments for changes in
capitalization as herein provided) which determine (a) the
aggregate number of shares for which options may be granted under
the Plan or to any person; (b) the classes of persons eligible
for options; or (c) the duration of the Plan. No termination,
suspension or amendment of the Plan shall adversely affect any
right acquired by any Grantee, or any estate of a Grantee (as
provided in Section 10 hereof), under the terms of an option
granted before the date of such termination, suspension of
amendment, unless such Grantee or successor shall consent; but it
shall be conclusively presumed that any adjustment or change in
capitalization as provided in Section 12 does not adversely
affect any such right.
14. Application of Proceeds
The proceeds received by the Company from the sale of its
shares under the Plan shall be used for general corporate
purposes. <PAGE>
TAKECARE, INC.
1993 Stock Option Plan
This TakeCare, Inc. 1993 Stock Option Plan, formerly the
Comprecare Holdings, Inc. 1991 Stock Option Plan (the "Plan")
provides for the granting of nonstatutory stock options
("Options") to certain officers, key employees and directors of
Comprecare, Inc. ("Comprecare").
The purpose of the Plan is to provide an incentive for
officers, key employees and directors of Comprecare to remain in
the service of Comprecare, to extend to them the opportunity to
acquire a proprietary interest in Comprecare, and to aid
Comprecare in attracting able persons.
1. Definitions
1.1 "Act" means the Securities Exchange Act of 1934, as
amended.
1.2 "Board of Directors" means the board of directors of
TakeCare.
1.3 "Code" means the Internal Revenue Code of 1986, as
amended.
1.4 "Committee" means the Compensation Committee of the Board
of Directors of TakeCare, whose members shall be appointed from
time to time by, and shall serve at the pleasure of TakeCare's
Board of Directors.
1.5 "Eligible Individuals" means officers, key employees, and
directors of TakeCare.
1.6 "Holder" means an Eligible Individual to whom an Option
has been granted.
1.7 "Stock" means TakeCare's Common Stock, $.10 par value per
share.
1.8 "TakeCare" means TakeCare, Inc. or any corporation of
which 50% or more of the total combined voting power of all classes
of stock is controlled by TakeCare.
2. Stock and Maximum Number of Shares Subject to the Plan
The Stock which Options granted hereunder give a Holder the
right to purchase may be unissued or reacquired shares of Stock, as
the Board of Directors may, in its sole and absolute discretion,
from time to time determine. Subject to the adjustments provided
for in Paragraph 5.4 hereof, the aggregate number of shares of
Stock which may be issued pursuant to the exercise of Options
granted hereunder is 162,307 shares. If an Option granted
hereunder expires or terminates for any reason during the term of
this Plan and prior to the exercise thereof in full, the shares of
Stock subject to but not issued under such Option shall again be
available for Options granted hereunder subsequent thereto.
3. Eligibility
Options may be granted hereunder only to persons who are
Eligible Individuals at the time of the grant thereof.
4. Grant of Options and Option Agreements
Subject to the express provisions hereof, the Committee shall
determine which Eligible Individuals shall be granted Options
hereunder from time to time. In making grants, the Committee shall
take into consideration the contribution the potential Holder has
made or may make to the success of Comprecare and such other
considerations as the Board of Directors may from time to time
specify. The Committee shall also determine the number of shares
subject to each of such Options, and shall authorize and cause
TakeCare to grant Options in accordance with such determinations.
More than one Option may be granted hereunder to the same Eligible
Individual and be outstanding concurrently hereunder.
Each option granted hereunder shall be evidenced by an
Agreement, executed by TakeCare, incorporating such terms as the
Committee shall deem necessary or desirable. Each Agreement may
contain or otherwise provide for conditions giving rise to the
forfeiture of the Stock acquired pursuant to an Option granted
hereunder or otherwise, such restrictions on the transferability of
shares of the Stock acquired pursuant to an Option granted
hereunder or otherwise, and such other provisions as the Committee
in its sole and absolute discretion shall deem proper or advisable.
5. Terms and Conditions of Options
All Options granted hereunder shall be nonstatutory options
not incentive stock options under Section 422 of the Code and shall
be subject to the following terms and conditions:
5.1 Exercise Price. The exercise price is $3.70 per share of
Stock.
5.2 Medium and Time of Payment, Method of Exercise, and
Withholding Taxes. The exercise price on an Option shall be
payable upon the exercise of the Option in cash, by certified or
cashier's check, or, with the consent of the Committee, with shares
of Stock of TakeCare owned by the Holder. Exercise of an Option
shall not be effective until TakeCare has received written notice
of exercise. Such notice must specify the number of whole shares
to be purchased and be accompanied by payment in full of the
aggregate Option price of the number of shares purchased. The
Committee may, in its discretion, require a Holder to pay to
TakeCare at the time of exercise of an Option or portion thereof
the amount that TakeCare deems necessary to satisfy its obligation
to withhold Federal, state or local income or other taxes incurred
by reason of the exercise.
Upon receipt of notice and upon payment of the option price
(and taxes when applicable), TakeCare shall promptly deliver to the
Grantee a certificate or certificates for the shares purchased,
without charge for issue or transfer tax. In the event that such
shares are not registered under the Securities Act of 1933, as
amended, such certificates shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, or any state
securities acts, and therefore may not be sold or otherwise
transferred unless (a) such shares are registered under such Act
and the relevant state acts or (b) an opinion of counsel
satisfactory to the Company is obtained to the effect that such
registration is not necessary."
Nothing herein or in any Option granted hereunder shall
require TakeCare to issue any shares upon exercise of any Option if
such issuance would, in the opinion of counsel for TakeCare,
constitute a violation of the Securities Act of 1933, as amended,
or any similar or superseding statute of statutes, or any other
applicable statute or regulation, as then in effect.
5.3 Term, Time of Exercise, and Transferability of Options.
In addition to such other terms and conditions as may be included
in a particular Agreement granting an Option, an Option shall be
exercisable during a Holder's lifetime only by him or by his
guardian or legal representative. An Option shall not be
transferable other than by will or the laws of descent and
distribution. Each Option shall also be subject to the following
terms and conditions:
(a) Termination of Employment or Directorship. The
provisions of this Paragraph shall apply to the extent a
Holder's Agreement does not expressly provide otherwise.
If a Holder ceases to be employed by at least one of the
employers in the group of employers of TakeCare and/or
ceases to be a director of TakeCare for any reason
whatsoever, the Holder shall have the right until
5:00 p.m. Pacific Standard Time on the date of such
resignation, termination or removal, to exercise the
Option with respect to that portion thereof that has
become exercisable as of such date of termination of
employment or directorship and thereafter the Option
shall terminate and cease to be exercisable.
(b) Disability. The provisions of this Paragraph shall apply
to the extent a Holder's Agreement does not expressly
provide otherwise. If a Holder ceases to be employed by,
or a director of, at least one of the employers in the
group of employers of TakeCare by reason of disability
(as defined in Section 22(e)(3) of the Code) and does not
remain or thereupon become a director of TakeCare, or if
the Holder ceases by reason of such disability to be a
director of at least one of the corporations in the group
of corporations of TakeCare, the Holder shall have the
right for thirty (30) days after the date of termination
of employment or directorship with such group of
employers by reason of disability, to exercise an Option
to the extent such Option is exercisable on the date of
his termination of employment or directorship, and
thereafter the Option shall terminate and cease to be
exercisable.
(c) Death. The provisions of this Paragraph shall apply to
the extent a Holder's Agreement does not expressly
provide otherwise. If a Holder dies while in the employ
of, or while a director of TakeCare, an Option shall be
exercisable by the Holder's legal representatives,
legatees, or distributees for ninety (90) days following
the date of the Holder's date of death, and thereafter
the Option shall terminate and cease to be exercisable.
Notwithstanding any other provisions of this Plan, including
the provisions of items (a), (b), and (c) of this Paragraph 5.3, no
Option shall be exercisable after the expiration of ten (10) years
from the date it is granted. The Committee shall have authority to
prescribe in any Agreement that the Option evidenced thereby may be
exercised in full or in part as to any number of shares subject
thereto at any time or from time to time during the term of the
Option, or in such installments at such times during said term as
the Committee may prescribe.
5.4 Adjustments Upon Changes in Capitalization, Merger, Etc.
Notwithstanding any other provision hereof, in the event of any
change in the number of outstanding shares of Stock effected
without receipt of consideration therefor by TakeCare, by reason of
a stock dividend, or split, combination, exchange of shares or
other recapitalization, merger, or otherwise, in which TakeCare is
the surviving corporation, the aggregate number and class of the
reserved shares, the number and class of shares subject to each
outstanding Option and the exercise price of each outstanding
Option shall be automatically adjusted to accurately and equitably
reflect the effect thereon of such change, provided that any
fractional share resulting from such adjustment may be eliminated.
In the event of a dispute concerning such adjustment, the decision
of the Committee shall be conclusive. The number of reserved
shares or the number of shares subject to any outstanding Option
shall be automatically reduced by any fraction included therein
which results from any adjustment made pursuant to this
Paragraph 5.4.
5.5 Rights as a Stockholder. A Holder shall have no right as
a shareholder with respect to any shares covered by his Option
until a certificate representing such shares is issued to him. No
adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash or other property) or distributions or other rights
for which the record date is prior to the date such certificate is
issued, except as provided in Paragraph 5.4 hereof.
5.6 Furnish Information. Each Holder shall furnish to
TakeCare all information requested by TakeCare to enable it to
comply with any reporting or other requirement imposed upon
TakeCare by or under any applicable statute or regulation.
6. Remedies and Legend
6.1 Remedies. TakeCare shall be entitled to recover from a
Holder reasonable attorneys' fees incurred in connection with the
enforcement of the terms and provisions of the Plan and any
Agreement whether by an action to enforce specific performance or
for damages for its breach or otherwise.
6.2 Legend. Each certificate representing shares issued to
a Holder upon exercise of an Option granted under the Plan may, if
such share is subject to any transfer restriction, including a
right of first refusal, provided for under this Plan or an
Agreement, bear a legend that complies with applicable law with
respect to the restrictions on transferability referenced in this
Paragraph 6.2.
7. Duration of Plan
No Options may be granted hereunder after the date that is ten
(10) years from the date the Plan is adopted by the Board of
Directors.
8. Amendment of Plan
The Board of Directors may, insofar as permitted by law, with
respect to any shares which at the time are not subject to Options,
suspended or discontinue the Plan or revise or amend it in any
respect whatsoever.
9. General
9.1 Right of TakeCare to Terminate Employment. Nothing
contained in the Plan, or in any Agreement, shall confer upon any
Holder the right to continue in the employ of, or as a director of,
TakeCare or interfere in any way with the rights of TakeCare to
terminate his employment or directorship at any time.
9.2 No Liability for Good Faith Determinations. Neither the
members of the Board of Directors nor any member of the Committees
shall be liable for any act, omission, or determination taken or
made in good faith with respect to the Plan or any Option granted
under it, and members of the Board of Directors and the Committee
shall be entitled to indemnification and reimbursement by TakeCare
in respect of any claim, loss, damage or expense (including
attorneys' fees, the costs of settling any suit, provided such
settlement is approved by independent legal counsel selected by
TakeCare, and amounts paid in satisfaction of a judgment based on
a finding of bad faith) arising therefrom to the full extent
permitted by law and under any directors' and officers' liability
or similar insurance coverage from time to time be in effect.
9.3 Execution of Receipts and Releases. Any payment of cash
or any issuance or transfer of shares of stock to the Holder, or to
his legal representative, heir, legatee, or distributee, in
accordance with the provisions hereof, shall, to the extent
thereof, be in full satisfaction of all claims of such persons
hereunder. The Committee may require any Holder, legal
representative, heir, legatee, or distributee, as a condition
precedent to such payment, issuance or transfer to execute a
release and receipt therefor in such form as it shall determine.
9.4 Payment of Expenses. All expenses incident to the
administration, termination, or protection of the Plan, including,
but not limited to, legal and accounting fees, shall be paid by
TakeCare.
9.5 Corporation Records. Records of TakeCare regarding the
Holder's period of employment, termination of employment and the
reason therefor, leaves of absence, re-employment, and other
matters shall be conclusive for all purposes hereunder, unless
determined by the Committee to be incorrect.
9.6 No Liability of TakeCare. TakeCare assumes no obligation
or responsibility to the Holder or his personal representatives,
heirs, legatees, or distributees for any act of, or failure to act
on the part of, the committee.
9.7 Corporation Action. Any action required of TakeCare
shall be by resolution of its Board of Directors or by a person
authorized to act by resolution of the Board of Directors.
9.8 Severability. If any provision of this Plan is held to
be illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining provisions hereof, but such
provision shall be fully severable and the Plan shall be construed
and enforced as if the illegal or invalid provision had never been
included herein.
9.9 Notices. Whenever any notice is required or permitted
hereunder, such notice must be in writing and personally delivered
or sent by mail. Any notice required or permitted to be delivered
hereunder shall be deemed to be delivered on the date on which it
is personally delivered, or, whether actually received or not, on
the third business day after it is deposited in the Untied States
mail, certified or registered, postage prepaid, addressed to the
person who is to receive it at the address which such person has
theretofore specified by written notice delivered herewith.
TakeCare or a Holder may change, at any time and from time to time,
by written notice to the other, the address which it or he had
theretofore specified for receiving notices. Until changed in
accordance herewith, TakeCare and each Holder shall specify as its
and his address for receiving notices the address set forth in the
Agreement pertaining to the shares to which such notice relates.
9.10 Successors. The Plan shall be binding upon the Holder,
his heirs, legatees, and legal representatives, upon TakeCare, its
successors, and assigns, and upon the Committee, and its
successors.
9.11 Headings. The titles and headings of Sections and
Paragraphs are included for convenience of reference only and are
not to be considered in construction of the provisions hereof.
9.12 Governing Law. All questions arising with respect to the
provisions of the Plan shall be determined by application of the
laws of the State of Colorado except to the extent Colorado law is
preempted by federal law. Questions arising with respect to the
provisions of an Agreement that are matters of contract law shall
be governed by the laws of the state specified in the Agreement,
except to the extent Delaware corporate law conflicts with the
contract law of such state, in which event Delaware corporate law
shall govern. The obligation of TakeCare to sell and deliver Stock
hereunder is subject to applicable laws and to the approval of any
governmental authority required in connection with the
authorization, issuance, sale, or deliver of such Stock.
The foregoing Comprecare Holdings, Inc. 1991 Stock Option Plan
was adopted by the Board of Directors as of August 20, 1991, and
adopted by TakeCare as the TakeCare, Inc. 1993 Stock Option Plan on
May 3, 1993.
June
23rd
1 9 9 4
NB1-189845.V1
FHP International Corporation
9900 Talbert Avenue
Fountain Valley, California 92708
Re: Registration on Form S-8 of FHP International
Corporation (the "Company")
Ladies and Gentlemen:
You have advised us that you propose to file a
Registration Statement on Form S-8 with the Securities and
Exchange Commission in connection with the registration under the
Securities Act of 1933, as amended, of 965,000 shares (the
"Shares") of Common Stock, $.05 par value of the Company (the
"Common Stock"), to be issued pursuant to the FHP International
Corporation/TakeCare, Inc. Stock Option Plan (the "Plan"). At
your request, we have examined the proceedings heretofore taken
and to be taken in connection with the authorization of the Plan
and the Common Stock to be issued pursuant to and in accordance
with the Plan.
Based upon such examination and upon such matters of
fact and law as we have deemed relevant, we are of the opinion
that the Shares have been duly authorized by all necessary
corporate action on the part of the Company and, when issued in
accordance with such authorization and appropriate Committee
action under the Plan, the provisions of the Plan and relevant
agreements duly authorized by and in accordance with the terms of
the Plan, will be validly issued, fully paid and nonassessable
shares of Common Stock.
We consent to the use of this opinion as an exhibit to
the Registration Statement.
Respectfully submitted,
/s/O'Melveny & Myers
_____________________
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
FHP International Corporation on Form S-8 (and the related prospectus)
pertaining to the FHP International Corporation/TakeCare, Inc. Stock Option
Plan of our report dated September 2, 1993 (September 15, 1993 as to Note 13),
appearing in and incorporated by reference in the Annual Report on Form 10-K
of FHP International Corporation for the year ended June 30, 1993.
/s/Deloitte & Touche
Costa Mesa, California
June 24, 1994
