As filed with the Securities and Exchange Commission on November 30, 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 Employee Stock Purchase Plan
(Full title of the plan)
Robert F. Murphy
Vice President and Associate General Counsel
FHP International Corporation
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 share price fee
Common Stock, $0.05 1,000,000(1),(2) $26.0625 (3) $26,062,500(3) $8,988 (3)
par value per share shares
(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 under
the Securities Act of 1933, as amended, 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,
as amended, with American Stock Transfer and Trust 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 November 28, 1994, as
reported in the consolidated reporting system of NASDAQ and published in
the Western Edition of the Wall Street Journal.
The Exhibit Index included in this Registration Statement is at page 8.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents, which have been previously filed by FHP
International Corporation (the "Company") with the Securities and Exchange
Commission, are hereby incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1994 ("Annual Report") filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended ("the Exchange
Act");
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual
Report referred to in (a) above; 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 and 15(d) of 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 into this Registration Statement 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
Not applicable.
Item 5. Interests of Named Experts and Counsel
The validity of the original issuance of the Common Stock registered
hereby is passed on for the Company by Robert F. Murphy, Vice President and
Associate General Counsel of the Company. Mr. Murphy is compensated by the
Company as an employee and is the holder of options to acquire shares of
Common Stock.
Item 6. Indemnification of Directors and Officers
Section 102 of the Delaware General Corporation Law ("DGCL") permits
a Delaware corporation to include in its certificate of incorporation a
provision eliminating or limiting a director's liability to a corporation or
its stockholders for monetary damages for breaches of fiduciary duty.
The enabling statute provides, however, that the liability of a director may
not be eliminated or limited (i) for breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
the law, (iii) for payments of dividends or stock purchases or redemptions
in violation of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit. The Company's Certificate of
Incorporation includes a provision which eliminates, to the fullest extent
permitted under the DGCL, the personal liability of directors to the Company
or its stockholders for or with respect to any acts or omissions in the
performance of their duties as directors.
Section 145 of the DGCL 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 stockholders, 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 any 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 "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 previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the 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 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 regis-
tration 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.
(c) Insofar as indemnification for liabilities arising under the 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
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Act, 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 November 2, 1994.
FHP INTERNATIONAL CORPORATION
/s/ Westcott W. Price III
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 resubstitution, 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 attorney-in-fact and agent, 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 might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, each acting alone, or his or
her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Act, this Registration Statement has
been signed below by the following persons in the capacities and on the dates
indicated.
Signature Title Date
Director November __, 1994
Robert Gumbiner
/s/ Westcott W. Price III Chief Executive Officer, November 2, 1994
Westcott W. Price III President and Director
(Principal Executive Officer)
<PAGE>
/s/ Mark B. Hacken Chief Executive Officer, November 2, 1994
Mark B. Hacken President and Director
(Principal Executive Officer)
/s/ Burke F. Gumbiner Director November 2, 1994
Burke F. Gumbiner
/s/ Warner Heineman Director* November 2, 1994
Warner Heineman
/s/ Joseph F. Prevratil Director* November 2, 1994
Joseph F. Prevratil
Director November __, 1994
Richard M. Burdge, Sr.
/s/ Jack R. Anderson Director* November 2, 1994
Jack R. Anderson
/s/ Kenneth S. Ord Senior Vice President and November 2, 1994
Kenneth S. Ord Chief Financial Officer
(Principal Financial Officer)
/s/ Valerie A. Fletcher Controller (Principal November 2, 1994
Valeria A. Fletcher Accounting Officer)
__________________________________
* Member of Compensation Committee
<PAGE>
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
4.1 FHP International Corporation Employee Stock
Purchase Plan.
5.1 Opinion of Company Counsel (opinion re
legality).
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (included in
Exhibit 5.1).
24.1 Power of Attorney (included in this
Registration Statement under "Signatures").
FHP INTERNATIONAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. OBJECTIVES.
The FHP International Corporation Employee Stock Purchase Plan is
intended to encourage employees of FHP International Corporation and
its subsidiaries (together, as more fully defined herein, the
"Company") to remain in the employ of the Company and to acquire a
proprietary interest in the Company through the purchase of common
stock of FHP International Corporation. The Plan is intended to
constitute an "employee stock purchase plan" within the meaning of
Section 423 of the Internal Revenue Code of 1986, as amended. Pursuant
to the Plan, Eligible Employees will be able to purchase common stock
of FHP International Corporation from funds accumulated through payroll
deductions within a period of not more than 27 months from the
Effective Date of an Offering under the Plan.
2. DEFINITIONS.
(a) "Board" --- The Board of Directors of FHP.
(b) "Code" --- The Internal Revenue Code of 1986, as amended from
time to time.
(c) "Committee" --- The Compensation Committee of the Board or such
other committee or officer of FHP as may be designated by the
Board or the Compensation Committee to administer the Plan.
(d) "Company" --- FHP and its subsidiaries whose employees are
eligible to participate in the Plan. Unless otherwise specified
by the Committee in an Offering, employees of all Subsidiaries
of FHP shall be eligible to participate in this Plan.
(e) "Eligible Employee" --- Any person who is an active employee of
the Company and who meets the eligibility requirements set forth
in Section 3 hereof.
(f) "FHP" --- FHP International Corporation.
(g) "Fair Market Value" --- The average of the high and low prices
of the Stock on the principal exchange or market in which the
Stock is traded for the date in question, provided that, if no
sales of Stock were made on said exchange or market on that date,
the average of the high and low prices of Stock as reported for
the most recent preceding day on which sales of Stock were made
on said exchange or market.
(h) "Offering" --- Any offering made by FHP, in accordance with the
terms and conditions of the Plan and applicable laws and
regulations, to Eligible Employees to purchase Stock under the
Plan.
(i) "Offering Effective Date" --- The first day of each calendar year
beginning on or after January 1, 1995 or such other date
specified in each Offering.
(j) "Offering Exercise Date" --- Such date specified in each Offering
on which Options granted to Eligible Employees pursuant to this
Plan shall be exercised. Such date shall not be later than 27
months from the Offering Effective Date of any Offering.
(k) "Option" --- The right of an Eligible Employee to purchase Stock
by participating in an Offering.
(l) "Option Account" --- The bookkeeping account established for a
Participant under Section 8.
(m) "Participant" --- An Eligible Employee who elects to receive an
Option by authorizing payroll deductions pursuant to Section 6
hereof.
(n) "Plan" --- FHP International Corporation Employee Stock Purchase
Plan.
(o) "Plan Agent" --- Such person or entity as may be designated from
time to time by the Committee to fulfill the custody and record-
keeping requirements under the Plan. A Plan Agent may consist
of one or more employees of the Company or one or more third
parties.
(p) "Stock" --- Authorized and issued or unissued Common Stock, $.05
par value per share, of FHP.
(q) "Stock Account" --- The bookkeeping account, if any, established
for a Participant under Section 9.
(r) "Subsidiary" --- Any entity constituting a subsidiary corporation
of FHP within the meaning of Section 424(f) of the Code.
3. ELIGIBILITY.
All employees who are employed by the Company on an Offering Effective
Date shall be eligible to purchase Stock under the Plan pursuant to an
Offering; except that the Committee, in its discretion, may exclude the
following employees from any Offering:
(a) Employees who have been employed by the Company for less than two
years on an Offering Effective Date;
(b) Employees whose customary employment is for twenty hours or less
per week or five months or less per calendar year;
(c) All or any number of highly compensated employees (as defined in
Section 414(q) of the Code); and
(d) Employees who are described in Section 7(f) hereof.
Any determination of an Eligible Employee's status shall be made by the
Committee. The Committee's determination shall be final and binding on
all parties. Notwithstanding anything else contained herein, the
Committee shall have the right to designate from time to time the
Subsidiaries whose employees may be eligible to participate in the Plan
and such designations shall not constitute an amendment to the Plan
requiring shareholder approval in accordance with Treasury Regulation
Section 1.423-2(c)(4).
4. STOCK AVAILABLE FOR OFFERINGS.
The number of shares of Stock that may be sold pursuant to all
Offerings under the Plan is one million, subject to adjustment as
contemplated by Section 10. The Company shall take whatever actions
are necessary to file required documents with the Securities and
Exchange Commission and any other appropriate government authorities
and stock exchanges to make shares of Stock available for issuance
pursuant to the Plan. Shares of Stock related to Options that are
forfeited, terminated, expire unexercised or are settled in such manner
that all or some of the shares covered by such Options are not issued
to a Participant shall immediately become available for Offerings.
5. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee shall
have full and exclusive power and discretion to construe and interpret
the Plan, and generally to determine any and all questions arising
under the Plan. Subject to the express requirements and provisions of
the Plan, the Committee shall have the exclusive power to determine and
fix the terms of Offerings and Options, including, but not limited to,
the Subsidiaries whose employees are eligible, the employees who are
eligible, the Option price, the maximum dollar amount or percentage of
pay which an Eligible Employee may contribute to the Plan and the
maximum number of shares or the maximum Fair Market Value of Stock an
Eligible Employee may purchase. The Committee may from time to time
designate one or more Plan Agents to fulfill the custody and record
keeping requirements under the Plan.
6. OFFERINGS; OPTIONS; PAYROLL DEDUCTIONS.
Offerings may be made from time to time to all Eligible Employees.
Each Offering shall be established by the Committee and announced by
the Company. Every Eligible Employee who elects to participate in the
Plan on the Offering Effective Date shall be deemed to have been
granted an Option on such Offering Effective Date pursuant to the terms
of that Offering. All Eligible Employees granted an Option shall have
the same rights and privileges except as otherwise provided in the
Option, subject to the limitations of Section 423(b)(5) of the Code.
Each Eligible Employee shall be entitled to become a Participant and to
purchase Stock pursuant to the terms of an Offering by filing an
election to participate in that Offering with the Corporate Employee
Benefits Department of FHP. Such election shall be made on a form
prescribed by such Department, shall include a payroll deduction
authorization, and shall be filed within such times as may be specified
in such Offering.
Payroll deductions shall:
(i) commence with the first regular payroll period beginning on or
after the Offering Effective Date, or at such other time as may
be specified in such Offering; and
(ii) end with the last regular payroll period ending on or before the
Offering Exercise Date or, if earlier, upon the termination of
the employment of a Participant by the Company or the
Participant's election to stop payroll deductions.
Except as otherwise specified in an Offering and in Section 8, an
Eligible Employee may not change the rate of his payroll deductions
during the term of the Offering.
7. TERMS AND CONDITIONS OF OFFERINGS AND OPTIONS.
Except as provided in paragraphs (e) and (f) of this Section 7, all
Eligible Employees shall have the same rights and privileges.
(a) Number of Shares. Each Offering shall specify the maximum
payroll deduction by a Participant, subject to the aggregate
number of shares set aside under Section 4 of this Plan and to
the limitations of paragraphs (e) and (f) of this Section 7.
Each Participant shall receive a notice that he has been granted
an Option to purchase Stock hereunder.
(b) Option Price. Each Offering shall state the price per share at
which Stock may be purchased thereunder. Such price shall be
determined by the Committee and shall not be less than the lesser
of:
(i) 85% of the Fair Market Value on the date the Option is
granted, or
(ii) 85% of the Fair Market Value on the Offering Exercise
Date.
(c) Medium and Time of Payment. Payment for Stock purchased by any
Participant pursuant to an Offering shall be made on the Offering
Exercise Date from the funds credited to the Participant's Option
Account during the Offering. Except as otherwise determined by
the Committee and specified in an Offering, all amounts credited
to the Option Account shall be accumulated through payroll
deductions from the salary or wages (including bonuses) paid to
the Participant by the Company. Fractional shares of Stock may
not be purchased under the Plan; any amount in a Participant's
Option Account that is not applied to purchase whole shares of
Stock shall be paid to the Participant in cash as soon as
practicable after the Offering Exercise Date.
(d) Term of Offering. The Offering Effective Date and Offering
Exercise Date of each Offering shall be specified in such
Offering, but in no event shall the Offering Exercise Date be
more than 27 months after the Offering Effective Date.
(e) Accrual Limitation. Notwithstanding any other provision of the
Plan, no Eligible Employee may be granted an Option which permits
his rights to purchase Stock under this Plan (and all plans of
the Company which comply with Section 423 of the Code) to accrue
at a rate which exceeds the maximum amount permitted under
Section 423(b)(8) of the Code.
(f) Ownership Limitation. Notwithstanding any other provisions of
the Plan, no Eligible Employee shall be granted an Option if such
Eligible Employee, immediately after such Option is granted,
would own (or be deemed to own under the rules of Section
423(b)(3) of the Code, and including all Stock which the Eligible
Employee may purchase under this Plan or any other plan) stock
possessing 5% or more of the total combined voting power or value
of all classes of stock of FHP or of any Subsidiaries. If the
effect of the granting of an Option to an Eligible Employee is
such that such ownership limitation would be exceeded, such
Option shall be entirely void as if it had never been granted.
(g) Nontransferability of Options. An Option shall not be
transferable by the Participant to whom it has been granted
otherwise than by will or the laws of decent and distribution and
shall be exercisable, during such Participant's lifetime, only
by such Participant.
(h) Approval of Stockholders. The Plan and the issuance of any Stock
hereunder is conditioned upon the approval of the Plan by the
stockholders within 12 months before or 12 months after the date
the Plan is adopted by the Board. Such approval must comply with
all applicable provisions of the FHP corporate charter and bylaws
and with applicable State law prescribing the method and degree
of stockholder approval required for the issuance of stock or
options. In the event the stockholders shall not approve the
Plan in accordance with the requirements of the Code, then all
funds in all Option Accounts established hereunder shall be
returned to Participants as soon as reasonably practicable. In
no event shall the Company, any member of the Committee, any
officer of the Company, or any Plan Agent be liable for any loss
resulting from or incurred in connection with or by reason of any
delay or failure of the stockholders to approve the Plan.
(i) Other Provisions. Each Offering shall contain such other
provisions as the Committee shall deem advisable, including
restrictions, if any, on the resale of Stock purchased through
an Offering, provided that no such provision may in any way
conflict, or be inconsistent, with the terms of the Plan as
amended from time to time.
8. OPTION ACCOUNTS.
The Committee shall maintain an Option Account for each of the
Participants, to which his payroll deduction contributions shall be
credited during the term of the Offering.
A Participant may, at any time prior to two weeks before the Offering
Exercise Date, for any reason, withdraw all cash amounts in his Option
Account and thereby cancel his Option and withdraw from participation
in such Offering. Except as otherwise specified in the Offering,
partial withdrawals shall not be permitted. Withdrawal requests must
be on forms prescribed and be timely received by the Corporate Employee
Benefits Department of FHP to become effective.
Except as otherwise specified in the Offering, a Participant who has
not terminated employment and who elects to stop his payroll deductions
during the term of the Offering may elect to withdraw all amounts in
his Option Account in accordance with the preceding paragraph, or may
elect to leave all amounts in the Option Account to be applied to
purchase Stock on the Offering Exercise Date.
If a Participant's employment with the Company terminates for any
reason (including permanent disability or death) before the Offering
Exercise Date, his participation shall terminate and all amounts in his
Option Account shall be refunded to him.
No Participant shall have any rights as a stockholder of FHP with
respect to any Option and no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is
prior to the date such Participant becomes a stockholder of record.
Notwithstanding anything else contained herein, a Participant's Option
Account is a bookkeeping account established by the Company and amounts
credited to a Participant's Option Account remain the general,
unpledged, unrestricted assets of the Company.
9. STOCK ACCOUNTS.
The Committee shall determine and shall specify in each Offering
whether Stock transferred to Participants under the Offering shall be
held by a Plan Agent in a Stock Account established and maintained for
the Participant, or transferred to the Participant in certificate form,
or whether Stock will be held in a Stock Account or issued in
certificates at the election of the Participant.
Unless otherwise specified under the terms of an Offering, a
Participant will possess all of the rights and privileges of a
stockholder under the Plan with respect to Stock issued and credited to
his Stock Account, including the right to pledge, sell, transfer and
vote such Stock, and will receive all distributions and stockholder
communications with respect to such Stock. The Committee may specify
in an Offering that the Participant may not transfer his Stock
purchased under the Plan for a period of up to one year after the date
of purchase or may impose any such other restrictions or limitations as
may be required under applicable law in accordance with Section 11.
10. ADJUSTMENTS.
If FHP shall be the surviving corporation in any merger, consolidation
or reorganization, each outstanding Option shall pertain to and apply
to the securities to which a holder of the number of shares of Stock
subject to the Option would have been entitled. In the event of a
dissolution or liquidation of FHP, or any merger, consolidation or
reorganization in which FHP is not the surviving corporation, the
Committee, at its election, may cause each outstanding Option to
terminate, provided, however, that each Participant shall, in such
event, subject to such rules and limitations of uniform application as
the Committee may prescribe, be entitled to the rights of a terminating
Participant provided in Section 8.
In the event of any change in the outstanding Stock of FHP by reason of
a stock split, stock dividend, combination or reclassification of
shares, recapitalization or similar event, the Committee shall adjust
proportionally (or as may otherwise be equitable in the judgement of
the Committee):
(a) the number of shares of Stock
(i) reserved under the Plan,
(ii) offered pursuant to any Offerings, and
(iii) covered by outstanding Options.
(b) the stock prices related to outstanding Options; and
(c) the appropriate Fair Market Value and other price determinations
for such Options.
Notwithstanding the foregoing, no adjustment shall be made which would
cause any Option to fail to qualify as an Option granted under an
"employee stock purchase plan" as defined in Section 423 of the Code.
11. LEGAL REQUIREMENTS.
The Plan, the granting and exercising of Options thereunder and the
other obligations of the Company under the Plan shall be subject to all
applicable federal and state laws, rules and regulations and to such
approvals by any regulatory or governmental agency as may be required.
FHP, in its discretion, may postpone the granting and exercising of
Options, the issuance or delivery of Stock under any Options or any
other action permitted under the Plan to permit the Company, with
reasonable diligence, to complete such stock exchange listing or
registration or qualification of such Stock or other required action
under any federal or state law, rule or regulation and may require any
Participant to make such representations and furnish such information
as it may consider appropriate in connection with the issuance or
delivery of Stock in compliance with applicable laws, rules and
regulations. FHP reserves the right to deny the exercise of any
Options or to otherwise sell or issue Stock if, in the opinion of legal
counsel to FHP, it would result in violation of any rules, laws or
regulations. In such event, the Participant's accrued payroll
deductions shall be returned as soon as practicable.
12. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
The Board may amend, modify, suspend or terminate the Plan for the
purpose of meeting or addressing any changes in legal requirements or
for any other purpose permitted by law; provided that, subject to any
changes in laws or other legal requirements that would permit
otherwise, the Plan may not be amended:
(a) in any respect that would cause any Option to fail to qualify as
an option granted under an "employee stock purchase plan" as
defined in Section 423 of the Code;
(b) without shareholder approval, as specified in Section 7(h), to
change the provisions of the Plan relating to the aggregate
number of shares of Stock to be issued under the Plan or the
employees (or class of employees) eligible to receive Options
under the Plan;
(c) without the approval of the Participant holding such Option, to
change the terms of any outstanding Option in any respect that
is adverse to the interests of the Participant; and
(d) without shareholder approval, to modify the Plan in any manner
which requires shareholder approval under any applicable
provision of law or regulation, including Rule 16b-3 promulgated
under the Securities Exchange Act of 1934.
Subject to the foregoing, the Board may delegate to the Committee the
authority to amend the Plan, as necessary, solely for the purpose of
ensuring ongoing compliance with any laws, rules or regulations.
13. GOVERNING LAW.
The Plan and all determinations made and actions taken pursuant
thereto, except to the extent otherwise governed by the laws of the
United States, shall be governed by the laws of the State of California
and construed accordingly.
14. EFFECTIVE AND TERMINATION DATES.
The Plan shall become effective on January 1, 1995, subject to
stockholder approval under Section 7(h). The Plan shall terminate when
all of Stock authorized to be offered has been transferred to
Participants pursuant to the Plan, subject to the earlier termination
by the Board pursuant to Section 12, after which no Offerings may be
made under the Plan, but any such termination shall not affect Options
then outstanding or the authority of the Committee to continue to
administer the Plan; notwithstanding the foregoing, the Plan may be
amended at any time by increasing the number of Shares available for
issuance under the Plan, subject to stockholder approval under Section
7(h).
November 30, 1994
FHP International Corporation
9900 Talbert Avenue
Fountain Valley, CA 92708
Ladies and Gentlemen:
In my capacity as Associate General Counsel of FHP International
Corporation, a Delaware corporation (the "Company"), I have examined the
Registration Statement on Form S-8 to be filed by the Company with the
Securities and Exchange Commission in connection with the registration
under the Securities Act of 1933, as amended, of 1,000,000 shares of the
Company's Common Stock, $0.05 par value per share (the "Shares"), which
are to be issued pursuant to the Company's Employee Stock Purchase Plan
(the "Plan").
Based upon such examination and upon such matters of fact and law as
I have deemed relevant, I am of the opinion that the Shares have been duly
authorized and validly issued by all necessary corporate action on the
part of the Company and, are fully paid and non-assessable.
I consent to the use of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
/s/ Robert F. Murphy
Robert F. Murphy
Associate General Counsel
Independent Auditors' Consent
We consent to the incorporation by reference in this Registration
Statement of FHP International Corporation on Form S-8 pertaining to the
FHP International Corporation Employee Stock Purchase Plan of our reports
dated September 8, 1994, appearing in the Annual Report on Form 10-K of FHP
International Corporation for the year ended June 30, 1994.
/s/ Deloitte & Touche LLP
Costa Mesa, California
November 28, 1994
