SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 2)
PHP HEALTHCARE CORPORATION
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
693344103
(CUSIP Number)
Mr. Charles H. Robbins
11440 Commerce Park Drive
Reston, Virginia 20191
(703) 758-3600
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
with a copy to:
Lawrence T. Yanowitch
Tucker, Flyer & Lewis
a professional corporation
1615 L Street, N.W., Suite 400
Washington, D.C. 20036-5601
(202) 452-8600
February 24, 1997
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].
(Continued on following pages)
(Page 1 of 11 Pages)
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CUSIP No. 693344103 13D Page 2 of 11
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Charles H. Robbins
2. Check the appropriate box if a member of a group (a) [ ]
(b) [x]
3. SEC USE ONLY
4. Source of Funds
N/A
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
NUMBER OF SHARES
BENEFICIALLY 1,710,076 shares (see Item 5)
OWNED BY
EACH 8. Shared Voting Power
REPORTING
PERSON 0 shares
WITH
9. Sole Dispositive Power
1,710,076 shares (see Item 5)
10. Shared Dispositive Power
0 shares
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
1,710,076 shares (see Item 5)
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13. Percent of Class Represented by Amount in Row (11)
14.8%
14. Type of Reporting Person
IN
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CUSIP No. 693344103 13D Page 3 of 11
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Ellen E. Robbins
2. Check the appropriate box if a member of a group (a) [ ]
(b) [x]
3. SEC USE ONLY
4. Source of Funds
N/A
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
NUMBER OF SHARES 7. Sole Voting Power
BENEFICIALLY
OWNED BY 300,000 shares (see Item 5)
EACH
REPORTING 8. Shared Voting Power
PERSON
WITH 0 shares
9. Sole Dispositive Power
300,000 shares (see Item 5)
10. Shared Dispositive Power
0 shares
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
300,000 shares (see Item 5)
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13. Percent of Class Represented by Amount in Row (11)
2.7%
14. Type of Reporting Person
IN
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4
This Amendment No. 2 is filed by Charles H. Robbins and
Ellen E. Robbins (collectively, the "Reporting Persons"), amends
and supplements the statement of the Reporting Persons on
Schedule 13D (the "Schedule 13D") filed by the Reporting Persons
together with Jack M. Mazur and Lynn Mazur, VACHR, Inc., a
Virginia corporation, Michael D. Starr, Shamrock Investments,
Charles P. Reilly and Michael E. Gallagher, relating to Common
Stock, par value $.01 per share (the "Common Stock"), of PHP
Healthcare Corporation, a Delaware corporation (the "Issuer").
Item 1. Security and Issuer.
This Schedule 13D relates to the Common Stock of the Issuer.
The address of the principal executive offices of the Issuer is
11440 Commerce Park Drive, Reston, Virginia 20191.
Item 2. Identity and Background.
This Schedule 13D is being jointly filed by Charles H.
Robbins and Ellen E. Robbins. The Reporting Persons are husband
and wife. Ellen E. Robbins is Trustee under Trust Indentures
dated October 1, 1985, FBO Caroline H. Robbins, Charles H.
Robbins, Grantor, and FBO Lee S. Robbins, Charles H. Robbins,
Grantor. Until January 31, 1997, Mr. Robbins served as the
Chairman of the Board of Directors and Chief Executive Officer of
the Issuer. Mr. Robbins currently serves as an employee of the
Issuer. The principal residential address of Mr. and Mrs.
Robbins is 7720 Carlton Place, McLean, Virginia 22102. Mr. and
Mrs. Robbins are citizens of the United States.
During the last five years, neither of the Reporting Persons
have been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) nor have such persons been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, United States federal or state securities laws or
finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Not Applicable.
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5
Item 4. Purpose of the Transaction.
Stock Option Agreements
On June 10, 1994, Mr. Robbins and the Issuer entered in to a
stock option agreement (the "June 10th Stock Option Agreement")
pursuant to the Issuer's 1986 Stock Option Plan granting him the
option to acquire 540,000 shares of Common Stock at an exercise
price equal to $6.075 per share. On November 18, 1994, Mr.
Robbins and the Issuer entered in to a stock option agreement
(the "November 18th Stock Option Agreement", together, with the
June 10th Stock Option Agreement the "Stock Option Agreements")
pursuant to the Issuer's 1986 Stock Option Plan granting him the
option to acquire 250,000 shares of Common Stock at an exercise
price equal to $11.875 per share. Such options granted in the
Stock Option Agreements are subject to a vesting schedule wherein
Mr. Robbins may exercise his right to purchase one-third of such
shares upon the annual anniversary of each respective agreement.
The options to purchase such shares terminate on the earlier of
(i) ten years from the grant date, or (ii) 90 days after the
later of (x) the termination of the employee-employer
relationship with the Issuer and (y) the resignation, removal or
termination as an officer or director of the Issuer.
The foregoing descriptions of the Stock Option Agreements
are qualified in their entirety by the text of the Stock Option
Agreements, which are attached hereto as Exhibits 2.2 and 2.3
respectively and are incorporated herein by reference.
Employment Agreement
On February 24, 1997, Mr. Robbins and the Issuer entered
into the Employment Agreement (the "Employment Agreement").
Pursuant to the Employment Agreement, effective as of January 31,
1997, Mr. Robbins ceased to be an executive officer or a
director, positions he held since 1976, but will be an employee
of the Issuer until January 31, 1998.
A. The Put Right
Pursuant to the Employment Agreement, at any time prior to
April 30, 1997, Mr. Robbins may require the Issuer to repurchase
up to 200,000 shares of Common Stock from Mr. Robbins (the "Put
Right"). Mr. Robbins is required to repay to the Issuer from
proceeds of the Put Right (or by April 30, 1997 by use other
funds if the Put Right is not exercised) the total principal and
interest accrued from indebtedness incurred pursuant to the
Issuer's Executive Loan Program and repayment for the cash value
of split value life insurance policies transferred to Mr.
Robbins.
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6
B. Standstill Provisions
As part of the Employment Agreement, Mr. Robbins agreed to
certain standstill provisions (the "Standstill Provisions"),
which include, among other things, that until the earlier of
January 31, 1999 or a change of control (as defined in the
Employment Agreement) of the Issuer (the "Standstill Termination
Date") the Reporting Persons will not, directly or indirectly,
(i) make any offer or proposal to acquire the securities or
assets of the Issuer (ii) make, or in any way participate, in any
solicitation of proxies or become a participant in any election
contest, (iii) initiate or propose any stockholder proposals for
submission to a vote of stockholders with respect to the Issuer
or any of its affiliates, or propose any person for election to
the Board of Directors of the Issuer or any of its affiliates, or
propose the removal of any member of the Board of Directors of
the Issuer or any of its affiliates, (iv) seek to control the
management or policies of the Issuer or any of its affiliates,
including, without limitation, taking any action to seek to
obtain representation on the Board of Directors of the Issuer or
any of its affiliates, (v) oppose (through any public means) any
duly authorized action or recommendation of the Board of
Directors of the Issuer, (vi) grant any proxy with respect to any
securities to any person not designated by the Issuer, (vii)
deposit any securities in a voting trust or similar arrangement,
(viii) form, join or participate in a "group" (as such term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934
(the "Exchange Act")) to take any actions otherwise prohibited by
the Standstill Provisions or the Voting Restrictions (defined
below) or (ix) enter into any discussions, negotiations,
arrangements or understandings with any third party with respect
to any of the Standstill Provisions.
C. Voting Restrictions
Under the Employment Agreement, until the Standstill
Termination Date, the Reporting Persons agreed that in all
matters requiring a vote by the holders of the Common Stock
during the term of the Employment Agreement, the Reporting
Persons will take such action as may be required so that all
shares of Common Stock owned by them are voted, at their option,
either (i) in accordance with the recommendation of the Board of
Directors of the Issuer or (ii) pro rata in the same manner and
proportion that votes of the stockholders of the Issuer have been
cast (the "Voting Restrictions"). Additionally, the Reporting
Persons will take all such action as is necessary during the term
of the Employment Agreement to ensure that they shall be present,
in person or by proxy, at all meetings of stockholders of the
Issuer so that all Common Stock owned by the Reporting Persons
shall be counted for purposes of determining the presence of a
quorum at such meeting.
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7
D. Transfer Restrictions
Pursuant to the Employment Agreement, the Reporting Persons
agreed not to, directly or indirectly (subject to certain
exceptions), sell, lend, transfer or otherwise dispose of more
than 200,000 shares of Common Stock (in addition to any Common
Stock sold to the Issuer pursuant to the Put Right) prior to
November 1, 1997. Furthermore, the Reporting Persons agreed
(subject to certain exceptions), until the Standstill Termination
Date not to, directly or indirectly, sell, lend, transfer or
otherwise dispose of their shares of Common Stock to any person
which, to their knowledge, would beneficially own more than one
percent of the Issuer's Common Stock after such transfer.
E. Registration Rights
In connection with the Employment Agreement, the Issuer, the
Reporting Persons, Ellen E. Robbins, Trustee Under Trust
Indenture dated October 1, 1985, FBO Caroline H. Robbins, Charles
H. Robbins, Grantor, Ellen E. Robbins, Trustee Under Trust
Indenture dated October 1, 1985, FBO Lee S. Robbins, Charles H.
Robbins, Grantor and Charles B. Robbins entered into the
Registration Rights Agreement dated February 24, 1997 (the
"Registration Rights Agreement"). Pursuant to the Registration
Rights Agreement, the Issuer has granted to the Reporting Persons
and their affiliates certain demand and piggyback registration
rights, subject to and upon the terms and conditions set forth
therein. In addition, the Issuer agrees to pay certain
registration expenses in connection with the exercise of such
registration rights. The Reporting Persons' may exercise one
demand for a shelf registration of up to 500,000 shares of Common
Stock immediately, and at any time after nine months but prior to
two years after the date of the Registration Rights Agreement are
eligible for up to two additional demand registrations.
The foregoing descriptions of the Employment Agreement and
the Registration Rights Agreement are qualified in their entirety
by the text of the Employment Agreement and the Registration
Rights Agreement, which are attached hereto as Exhibits 2.4 and
2.5 respectively and are incorporated herein by reference.
Pursuant to the provisions of the Registration Rights
Agreement, the Reporting Persons have requested that a shelf
registration statement covering 500,000 shares of Common Stock
held by the Reporting Persons and held by, or in trust for, their
children be filed by the Issuer.
The shares of Common Stock beneficially owned by the
Reporting Persons were acquired by the Reporting Persons for
investment purposes. The Reporting Persons will continue to
<PAGE>
8
evaluate their potential investment in the Issuer on the basis of
various factors, including the Issuer's business, financial
condition, results of operations and prospects; general economic
and industry conditions; the securities markets in general and
those for the Issuer's securities in particular; as well as the
Reporting Persons personal liquidity requirements and other
developments and investment opportunities. Based upon such
evaluation, the Reporting Persons will take such actions in the
future as the Reporting Persons may deem appropriate in light of
the circumstances existing from time to time. Subject to the
Standstill Provisions of the Employment Agreement, depending on
market and other factors, the Reporting Persons may determine to
dispose of some or all of their investment in the Issuer, either
in open market or privately negotiated transactions.
Item 5. Interest in Securities of the Issuer.
Charles H. Robbins beneficially owns 1,710,076 shares of
Common Stock, including 526,667 shares which Mr. Robbins can
acquire upon the exercise of options granted by the Issuer
pursuant to the Stock Option Agreements. The 1,710,076 shares do
not, however, include shares owned by Ellen E. Robbins,
individually and as trustee, described below, or 139,000 shares
beneficially owned by Charles H. Robbins' son, Charles B.
Robbins. The 1,710,076 shares beneficially owned by Mr. Robbins
represent approximately 14.8% of the outstanding Common Stock of
the Issuer. Charles H. Robbins has sole voting and dispositive
power with respect to such shares. The filing of this statement
by Charles H. Robbins shall not be construed as an admission that
he is, for the purposes of Section 13(d) or 13(g) of the Exchange
Act, the beneficial owner of any of the securities owned by Ellen
E. Robbins or Charles B. Robbins.
Ellen E. Robbins, individually and as trustee under trusts
established by Charles H. Robbins for the benefit of Caroline H.
Robbins and Lee S. Robbins, beneficially owns 300,000 shares of
Common Stock, which represent approximately 2.7% of the
outstanding Common Stock of the Issuer. Ellen E. Robbins has
sole voting and dispositive power with respect to such shares.
The filing of this Schedule 13D by Ellen E. Robbins should not be
construed as an admission that she is, for the purposes of
Section 13(d) or 13(g) of the Exchange Act, the beneficial owner
of any of the securities owned by Charles H. Robbins or Charles
B. Robbins.
In the aggregate, Charles H. Robbins and Ellen E. Robbins
(individually and as trustee) beneficially own 2,010,076 shares
of Common Stock, which represent approximately 17.4% of the
outstanding Common Stock of the Issuer.
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9
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Not Applicable
Item 7. Items to be Filed as Exhibits
Exhibit Description
2.1 Consent to Joint Filing of Schedule 13D
2.2 Stock Option Agreement dated June 10, 1994 between
Charles H. Robbins and the PHP Healthcare Corporation
2.3 Stock Option Agreement dated November 18, 1994 between
Charles H. Robbins and the PHP Healthcare Corporation
2.4 Employment Agreement dated February 24, 1997 by and
between Charles H. Robbins and the PHP Healthcare
Corporation
2.5 Registration Rights Agreement dated February 24, 1997
by and among PHP Healthcare Corporation, Charles H.
Robbins, Ellen E. Robbins, Ellen E. Robbins, Trustee
Under Trust Indenture dated October 1, 1985, FBO
Caroline H. Robbins, Charles H. Robbins, Grantor, Ellen
E. Robbins, Trustee Under Trust Indenture dated October
1, 1985, FBO Lee S. Robbins, Charles H. Robbins,
Grantor and Charles B. Robbins
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10
SIGNATURES
After reasonable inquiry and to the best knowledge and
belief of the undersigned, the undersigned hereby certifies that
the information set forth in this amendment is true, complete and
correct.
Date: February 26, 1997
/s/ Charles H. Robbins
Charles H. Robbins
Date: February 26, 1997
/s/ Ellen E. Robbins
Ellen E. Robbins
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11
EXHIBIT INDEX
Exhibit Description
2.1 Consent to Joint Filing of Schedule 13D
2.2 Stock Option Agreement dated June 10, 1994
between Charles H. Robbins and the PHP
Healthcare Corporation
2.3 Stock Option Agreement dated November 18,
1994 between Charles H. Robbins and the PHP
Healthcare Corporation
2.4 Employment Agreement dated February 24, 1997
by and between Charles H. Robbins and the PHP
Healthcare Corporation
2.5 Registration Rights Agreement dated February
24, 1997 by and among PHP Healthcare
Corporation, Charles H. Robbins, Ellen E.
Robbins, Ellen E. Robbins, Trustee Under
Trust Indenture dated October 1, 1985, FBO
Caroline H. Robbins, Charles H. Robbins,
Grantor, Ellen E. Robbins, Trustee Under
Trust Indenture dated October 1, 1985, FBO
Lee S. Robbins, Charles H. Robbins, Grantor
and Charles B. Robbins
CONSENT TO JOINT FILING OF SCHEDULE 13D
Each of the undersigned consents and agrees to the filing of
the foregoing joint statement on Schedule 13D pursuant to Rule 13d-
1(f)(2) pertaining to the shares of the Common Stock of PHP
Healthcare Corporation beneficially owned by them.
Date: February 26, 1997 /s/ Charles H. Robbins
Charles H. Robbins
Date: February 26, 1997 /s/ Ellen E. Robbins
Ellen E. Robbins
Date: February 26, 1997 /s/ Ellen E. Robbins
Ellen E. Robbins, Trustee Under
Trust Indenture dated October 1,
1985, FBO Caroline H. Robbins,
Charles H. Robbins, Grantor
Date: February 26, 1997 /s/ Ellen E. Robbins
Ellen E. Robbins, Trustee Under
Trust Indenture dated October 1,
1985, FBO Lee S. Robbins, Charles
H. Robbins, Grantor
PHP HEALTHCARE CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 10th of June, 1994 (the
"Grant Date"), between PHP Healthcare Corporation, a Delaware
corporation (the "Company"), and Charles H. Robbins (the
"Optionee") in accordance with the Amended and Restated PHP
Healthcare Corporation 1986 Stock Option Plan (the "Plan").
The parties hereto agree as follows:
1. Grant of Option.
1.1 The Company hereby grants to the Optionee the
right and option (the "Option") to purchase all or any part of an
aggregate of 270,000 whole Shares subject to, and in accordance
with, the terms and conditions set forth in this Agreement.
1.2 The Option is not intended to qualify as an
Incentive Stock Option within the meaning of Section 422A of the
Internal Revenue Code of 1990 (the "Code"), and shall be so
construed.
2. Coordination with the Plan.
This Agreement shall be construed in accordance and
consistent with, and subject to, the provisions of the Plan (the
provisions of which are incorporated herein by reference).
Except as otherwise expressly set forth herein, the capitalized
terms used in this Agreement shall have the same definitions as
set forth in the Plan.
3. Purchase Price.
3.1 The price at which the Optionee shall be entitled
to purchase Shares upon the exercise of the Option shall be
$6.075 per Share (the "Purchase Price").
3.2 Payment of the Purchase Price shall be made (i) in
cash, (ii) in the discretion of the Committee, by tender of
Shares owned by the Optionee and registered in the Optionee's
name with a fair market value equal to the cash exercise price of
the Option being exercised (in whole or in part), or (iii) in the
discretion of the Committee, by any combination of (i) and (ii)
hereof.
4. Duration of Option.
The Option shall be exercisable to the extent and in
the manner provided herein for a period of ten (10) years from
the Grant Date (the "Exercise Term"); provided, however, that the
Option may be earlier terminated as provided in Section 7 hereof
or in the Plan.
5. Exercisability of Option.
Unless otherwise provided in this Agreement or the
Plan, the Option shall entitle the Optionee to purchase, in whole
at any time or in part from time to time, one-third (1/3) of the
total number of Shares covered by the Option after the expiration
of twelve (12) months from the Grant Date and an additional one-
third (1/3) of the total number of Shares covered by the Option
after the expiration of each of the twelve month anniversaries of
the Grant Date, and each such right of purchase shall be
cumulative and shall continue, unless sooner exercised or
terminated as herein provided, during the remaining period of the
Exercise Term.
6. Manner of Exercise and Payment.
6.1 Subject to the terms and conditions of this
Agreement and the Plan, the Option may be exercised by delivery
of written notice to the Company, at its principal executive
office. Such notice shall state that the Optionee is electing to
exercise the Option and the number of Shares in respect of which
the Option is being exercised and shall be signed by the person
or persons exercising the Option. If requested by the Committee,
such person or persons shall (i) deliver this Agreement to the
Secretary of the Company who shall endorse thereon a notation of
such exercise and (ii) provide satisfactory proof as to the right
of such person or persons to exercise the Option.
6.2 The notice of exercise described in Section 6.1
shall be accompanied by the Purchase Price for the number of
Shares in respect of which the Option is being exercised.
6.3 Upon receipt of notice of exercise and full
payment for the Shares in respect of which the Option is being
exercised, the Company shall, subject to Section 17 of the Plan,
take such action as may be necessary to effect the transfer to
the Optionee of the number of Shares as to which such exercise
was effective.
6.4 The Optionee shall not be deemed to be the holder
of, or to have any of the rights of a holder with respect to any
Shares subject to the Option until (i) the Option shall have been
exercised pursuant to the terms of this Agreement and the
Optionee shall have paid the full Purchase Price for the number
of Shares in respect of which the Option was exercised, (ii) the
Company shall have issued and delivered the Shares to the
Optionee, and (iii) the Optionee's name shall have been entered
as a stockholder of record on the books of the Company, whereupon
the Optionee shall have full voting and other ownership rights
with respect to such Shares.
7. Termination of Employment.
7.1 Termination of Employment. Except as provided in
Sections 7.2 and 7.3, if the Optionee has a Termination of
Employment with the Company or a Subsidiary, any unexercised
Option held by such Optionee shall expire ninety (90) days after
the Optionee has a Termination of Employment for any reason other
than a termination for Cause or a Voluntary Termination, and such
Option may only be exercised by the Optionee or his Beneficiary
to the extent that the Option or a portion thereof was
exercisable on the date of Termination of Employment; provided,
however, no Option may be exercised after the expiration of the
Exercise Term. If the Optionee's Termination of Employment
arises as a result of a termination for Cause or a Voluntary
Termination, then, unless the Committee determines otherwise at
the time of the Termination of Employment, any unexercised
Options held by such Optionee shall terminate and expire
concurrently with the Optionee's Termination of Employment.
7.2 Death or Disability. If the employment of the
Optionee is terminated as a result of his death or Disability,
the Options shall continue to be exercisable in whole or in part
by the Optionee, his heirs or legal representatives as the case
may be, at any time within five (5) years after the date of
termination of employment. To the extent optioned shares are not
vested or exercisable pursuant to paragraph 5 herein, at the date
of such termination of employment, the Optionee shall be entitled
to the vesting of the remaining exercisable options that will
vest during said five year period. In the event of Optionee's
death, the Option shall be exercisable, as provided herein and in
this Agreement, by the Optionee's Beneficiary and such person or
persons shall be substituted for the Optionee each time the
Optionee is referred to herein.
7.3 Effect of Change in Control. Notwithstanding
anything contained to the contrary in this Agreement, in the
event of a Change in Control, the Option shall become immediately
and fully exercisable and may be surrendered for cancellation and
payment in accordance with Section 14 of the Plan.
8. No Right to Continued Employment.
Nothing in this Agreement or the Plan shall be
interpreted or construed to confer upon the Optionee any right
with respect to continuance of employment by the Company, nor
shall this Agreement or the Plan interfere in any way with the
right of the Company to terminate the Optionee's employment at
any time.
9. Adjustments.
In the event that any option under the Option Plan is
adjusted pursuant to Section 14 thereof, the Option shall be
adjusted in accordance with such provision at the same time.
10. Employee Bound by the Plan.
The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions
thereof.
11. Modification of Agreement.
This Agreement may be modified, amended, suspended or
terminated in accordance with the Plan, and any terms or
conditions may be waived, but only by a written instrument
executed by the parties hereto.
12. Notice.
All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed
to have been duly given when delivered in person, by cable,
telegram, telex or facsimile transmission or by registered or
certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
If to Optionee:
Charles H. Robbins
11440 Commerce Park Drive
Reston, VA 22091
If to the Company:
PHP Healthcare Corporation
11440 Commerce Park Drive
Reston, VA 22091
Attention: Secretary
13. Severability.
Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable or invalid
for any reason, the remaining provisions of this Agreement shall
not be affected by such holding and shall continue in full force
in accordance with their terms.
14. Headings.
The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
15. Counterparts.
This Agreement may be executed by the parties hereto in
two or more counterparts, each of which shall be deemed to be an
original instrument, but all of which together shall be deemed to
be one and the same instrument.
16. Governing Law.
The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of Delaware without giving effect to the conflicts of
laws principles thereof.
17. Parties in Interest.
This Agreement is binding upon and is solely for the
benefit of the parties hereto and the successors of the Company.
The Option shall not be transferable other than by will or the
laws of descent and distribution.
18. Resolution of Disputes.
Any disputes or disagreement which may arise under, or
as a result of, or in any way relate to, the interpretation,
construction or application of this Agreement shall be determined
by the Committee. Any determination made hereunder shall be
final, binding and conclusive on the Optionee and Company for all
purposes.
PHP HEALTHCARE CORPORATION
Attest: By: /s/ Charles H. Robbins
Title: President and Chairman
/s/ Illegible
Secretary
Name: Charles H. Robbins
OPTIONEE
/s/ Charles H. Robbins
Charles H. Robbins
PHP HEALTHCARE CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 18th day of November, 1994
(the "Grant Date"), between PHP Healthcare Corporation, a
Delaware corporation (the "Company"), and Charles H. Robbins (the
"Optionee") in accordance with the Amended and Restated PHP
Healthcare Corporation 1986 Stock Option Plan (the "Plan").
The parties hereto agree as follows:
1. Grant of Option.
1.1 The Company hereby grants to the Optionee the
right and option (the "Option") to purchase all or any part of an
aggregate of 125,000 whole Shares subject to, and in accordance
with, the terms and conditions set forth in this Agreement.
1.2 The Option is not intended to qualify as an
Incentive Stock Option within the meaning of Section 422A of the
Internal Revenue Code of 1990 (the "Code"), and shall be so
construed.
2. Coordination with the Plan.
This Agreement shall be construed in accordance and
consistent with, and subject to, the provisions of the Plan (the
provisions of which are incorporated herein by reference).
Except as otherwise expressly set forth herein, the capitalized
terms used in this Agreement shall have the same definitions as
set forth in the Plan.
3. Purchase Price.
3.1 The price at which the Optionee shall be entitled
to purchase Shares upon the exercise of the Option shall be
$11.875 per Share (the "Purchase Price").
3.2 Payment of the Purchase Price shall be made (i) in
cash, (ii) in the discretion of the Committee, by tender of
Shares owned by the Optionee and registered in the Optionee's
name with a fair market value equal to the cash exercise price of
the Option being exercised (in whole or in part), or (iii) in the
discretion of the Committee, by any combination of (i) and (ii)
hereof.
4. Duration of Option.
The Option shall be exercisable to the extent and in
the manner provided herein for a period of ten (10) years from
the Grant Date (the "Exercise Term"); provided, however, that the
Option may be earlier terminated as provided in Section 7 hereof
or in the Plan.
5. Exercisability of Option.
Unless otherwise provided in this Agreement or the
Plan, the Option shall entitle the Optionee to purchase, in whole
at any time or in part from time to time, one-third (1/3) of the
total number of Shares covered by the Option after the expiration
of twelve (12) months from the Grant Date and an additional one-
third (1/3) of the total number of Shares covered by the Option
after the expiration of each of the twelve month anniversaries of
the Grant Date, and each such right of purchase shall be
cumulative and shall continue, unless sooner exercised or
terminated as herein provided, during the remaining period of the
Exercise Term.
6. Manner of Exercise and Payment.
6.1 Subject to the terms and conditions of this
Agreement and the Plan, the Option may be exercised by delivery
of written notice to the Company, at its principal executive
office. Such notice shall state that the Optionee is electing to
exercise the Option and the number of Shares in respect of which
the Option is being exercised and shall be signed by the person
or persons exercising the Option. If requested by the Committee,
such person or persons shall (i) deliver this Agreement to the
Secretary of the Company who shall endorse thereon a notation of
such exercise and (ii) provide satisfactory proof as to the right
of such person or persons to exercise the Option.
6.2 The notice of exercise described in Section 6.1
shall be accompanied by the Purchase Price for the number of
Shares in respect of which the Option is being exercised.
6.3 Upon receipt of notice of exercise and full
payment for the Shares in respect of which the Option is being
exercised, the Company shall, subject to Section 17 of the Plan,
take such action as may be necessary to effect the transfer to
the Optionee of the number of Shares as to which such exercise
was effective.
6.4 The Optionee shall not be deemed to be the holder
of, or to have any of the rights of a holder with respect to any
Shares subject to the Option until (i) the Option shall have been
exercised pursuant to the terms of this Agreement and the
Optionee shall have paid the full Purchase Price for the number
of Shares in respect of which the Option was exercised, (ii) the
Company shall have issued and delivered the Shares to the
Optionee, and (iii) the Optionee's name shall have been entered
as a stockholder of record on the books of the Company, whereupon
the Optionee shall have full voting and other ownership rights
with respect to such Shares.
7. Termination of Employment.
7.1 Termination of Employment. Except as provided in
Sections 7.2 and 7.3, if the Optionee has a Termination of
Employment with the Company or a Subsidiary, any unexercised
Option held by such Optionee shall expire ninety (90) days after
the Optionee has a Termination of Employment for any reason other
than a termination for Cause or a Voluntary Termination, and such
Option may only be exercised by the Optionee or his Beneficiary
to the extent that the Option or a portion thereof was
exercisable on the date of Termination of Employment; provided,
however, no Option may be exercised after the expiration of the
Exercise Term. If the Optionee's Termination of Employment
arises as a result of a termination for Cause or a Voluntary
Termination, then, unless the Committee determines otherwise at
the time of the Termination of Employment, any unexercised
Options held by such Optionee shall terminate and expire
concurrently with the Optionee's Termination of Employment.
7.2 Death or Disability. If the employment of the
Optionee is terminated as a result of death or disability, the
options shall continue to be exercisable in whole or in part by
the Optionee or Optionee's heirs, beneficiaries, or legal
representatives, as the case may be (hereinafter each a
"beneficiary", at any time within five (5) years after the date
of such termination of employment. To the extent optioned shares
are not vested or exercisable pursuant to paragraph 5 herein, at
the date of such termination of employment, the Optionee shall be
entitled to the vesting and exercise of the remaining exercisable
options that will vest during said five (5) year period. In the
event of Optionee's death, the options shall be exercisable as
provided in this paragraph 5 and elsewhere in this Agreement, by
the Optionee's beneficiary and such person or persons shall be
substituted for the Optionee each time the Optionee is referred
to herein.
7.3 Effect of Change in Control. Notwithstanding
anything contained to the contrary in this Agreement, in the
event of a Change in Control, the Option shall become immediately
and fully exercisable and may be surrendered for cancellation and
payment in accordance with Section 14 of the Plan.
8. No Right to Continued Employment.
Nothing in this Agreement or the Plan shall be
interpreted or construed to confer upon the Optionee any right
with respect to continuance of employment by the Company, nor
shall this Agreement or the Plan interfere in any way with the
right of the Company to terminate the Optionee's employment at
any time.
9. Adjustments.
In the event that any option under the Option Plan is
adjusted pursuant to Section 14 thereof, the Option shall be
adjusted in accordance with such provision at the same time.
10. Employee Bound by the Plan.
The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions
thereof.
11. Modification of Agreement.
This Agreement may be modified, amended, suspended or
terminated in accordance with the Plan, and any terms or
conditions may be waived, but only by a written instrument
executed by the parties hereto.
12. Notice.
All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed
to have been duly given when delivered in person, by cable,
telegram, telex or facsimile transmission or by registered or
certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
If to Optionee:
Charles H. Robbins
11440 Commerce Park Drive
Reston, VA 22091
If to the Company:
PHP Healthcare Corporation
11440 Commerce Park Drive
Reston, VA 22091
Attention: Secretary
13. Severability.
Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable or invalid
for any reason, the remaining provisions of this Agreement shall
not be affected by such holding and shall continue in full force
in accordance with their terms.
14. Headings.
The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
15. Counterparts.
This Agreement may be executed by the parties hereto in
two or more counterparts, each of which shall be deemed to be an
original instrument, but all of which together shall be deemed to
be one and the same instrument.
16. Governing Law.
The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of Delaware without giving effect to the conflicts of
laws principles thereof.
17. Parties in Interest.
This Agreement is binding upon and is solely for the
benefit of the parties hereto and the successors of the Company.
The Option shall not be transferable other than by will or the
laws of descent and distribution.
18. Resolution of Disputes.
Any disputes or disagreement which may arise under, or
as a result of, or in any way relate to, the interpretation,
construction or application of this Agreement shall be determined
by the Committee. Any determination made hereunder shall be
final, binding and conclusive on the Optionee and Company for all
purposes.
PHP HEALTHCARE CORPORATION
Attest: By: /s/ Charles H. Robbins
/s/ Illegible Title: President and Chairman
Secretary
Name: Charles H. Robbins
OPTIONEE
/s/ Charles H. Robbins
Charles H. Robbins
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into as of
February 24, 1997, by and between PHP Healthcare Corporation, a
Delaware corporation (the "Company"), and Charles H. Robbins, an
individual residing at 7720 Carlton Place, McLean, Virginia (the
"Employee").
WHEREAS, the Company and the Employee are parties to an
Employment Agreement dated as of March 1, 1992 (the "Old
Employment Agreement");
WHEREAS, the Company and the Employee desire to set forth
the terms and conditions of a change in status of the Employee;
WHEREAS, the Company recognizes that the Employee has
special skills, knowledge and expertise essential to the Company;
WHEREAS, the Company desires to continue to utilize the
Employee's special skills, knowledge and expertise, and Employee
desires to continue to assist the Company by making such skill,
knowledge and expertise available to the Company; and
WHEREAS, the Company and the Employee wish to address
certain matters arising out of the Employee's ownership of a
significant portion of the Company's common stock (the "Common
Stock") and a significant number of options to purchase Common
Stock.
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual promises, agreements and covenants contained
herein, the parties hereto agree as follows:
Section 1. Termination of Old Employment Agreement; New
Employment.
1.01 Employment. As of January 31, 1997, the Employee
shall cease to be Chairman (and member) of the Board of Directors
and an executive officer of the Company and shall become a non-
executive employee of the Company in accordance with this Section
1. The Old Employment Agreement is hereby terminated.
1.02 Employment Term. The term for which the Employee
agrees to provide services and the Company agrees to pay for such
services under this Agreement (the "Employment Term" or the
"Term") shall be for a period beginning as of January 31, 1997
(the "Effective Date"), and ending on January 31, 1998 (the
"Termination Date"), unless earlier terminated as provided
herein.
1.03 Employment Obligations. The Employee shall
provide such advice, counseling, and other planning services to
the Company's management in respect of its government contracts
business, commercial operations, and prospects as reasonably
requested from time to time by the President of the Company (the
"Duties"); provided, however, that the Employee shall not be
required to submit any written reports. The Employee shall not
be based at the Company's executive offices in Reston, Virginia
and shall work instead at such office location as the Employee
designates to the Company.
1.04 Part Time Employment. The Employee shall be
available to perform the Duties for up to twenty (20) hours per
month, upon reasonable notice, and at mutually agreeable times
and places. Subject to the foregoing and Section 7 hereof, the
Employee may (i) serve on corporate, civic or charitable boards
or committees; (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions; (iii) manage
personal investments; and (iv) engage in any business, including,
but not limited to, a full-time employment or consulting
position.
Section 2. Payments to the Employee and to the Company
2.01 Payment to the Employee. In consideration for the
Employee's promises, agreements, and covenants contained herein,
and in lieu of any payment or claims that the Employee may have
with respect to (i) the Old Employment Agreement, (ii) any formal
and/or informal severance policy of the Company, and (iii) any
other right to receive payment from the Company related to his
former employment as Chairman, the Company agrees to the
following:
(a) One-time cash payment of Two Million Dollars
($2,000,000.00), such payment to be made on or before February
24, 1997.
(b) Assignment to Employee or his designee,
subject to the Company's retention of the cash surrender value
net of any loans, the rights under each of the life insurance
policies listed on Schedule 2.01(b).
2.02 Repurchase of Common Stock. The Company hereby
grants to the Employee the right to require the Company to
purchase up to 200,000 shares of the Employee's Common Stock (the
"Put Right"). The Put Right shall expire on April 30, 1997. In
consideration for the Employee's covenants in Section 3 and the
deliverance by Employee of up to 200,000 shares of the Company's
Common Stock to the Company, the Company agrees to purchase such
shares from the Employee, upon the exercise of the Employee of
the Put Right, at any time before April 30, 1997. The purchase
price per share for such shares shall be the average closing
price (as reported in the Wall Street Journal) of the Common
Stock of the Company on the New York Stock Exchange for 5 trading
days ending on the date preceding the date on which the Company
receives notice from the Employee that the Employee is exercising
the Put Right and the number of shares to be included in the Put
Right (the "Notice Date"). The closing of such purchase and sale
shall occur within 5 business days of the Notice Date. Employee
hereby represents and covenants that the Employee shall convey
such shares free and clear of any liens and encumbrances.
2.03 Payment for Noncompetition Agreement. In
consideration for the Employee's covenants set forth in Section 7
hereof, the Company agrees to pay the Employee $275,000, such
payment to be made upon the execution of this Agreement.
2.04 Salary and Benefits.
(a) In consideration of the performance by the
Employee of Employee's Duties during the Employment Term, the
Company will pay to the Employee during the Employment Term a
salary of $25,000 per annum (the "Salary").
(b) The Salary shall be payable in accordance
with the normal payroll practices of the Company then in effect
and subject to all applicable taxes required to be withheld by
the Company pursuant to federal, state or local law.
(c) The Employee and his wife shall be entitled
to continue during the Employment Term to participate at the
Company's expense in any Employee health and dental benefit plan
of the Company then in effect that the Company provided for the
Employee as of the date hereof.
(d) The Employee shall be entitled to receive
prompt reimbursement of all expenses reasonably incurred by him
in connection with the performance of his duties hereunder,
including, without limitation, expenses for meals, transportation
and lodging incurred by reason of Employee's travel directly
related to the performance of his duties hereunder.
(e) During the Term, the Employee shall receive,
as and when invoiced, an allowance of $75,000 to maintain an
office to perform his obligations hereunder.
2.05 Withholding. The Company shall have the right to
deduct from any amounts payable under this Agreement or otherwise
any taxes or other amounts required by law to be withheld.
Subject to the Company's rights in the preceding sentence,
Employee shall be solely responsible for income taxes imposed on
the Employee by reason of any cash or non-cash compensation and
benefits provided hereunder.
2.06 Repayment of Loans.
(a) Employee agrees to apply the appropriate
portion of the proceeds from any exercise of the Put Right
pursuant to Section 2.02 to repay in full to the Company (x)
$1,561,706.73, representing the total principal and accrued
interest as of the date hereof on Employee's indebtedness to the
Company under the Company's Senior Executive Loan Program, (y)
$744,547.00, representing the total net premiums in excess of
cash surrender value paid by the Company on split dollar life
insurance policies for the Executive (policies 2579829, 2660271,
5420954, 5421447 and 2668340 on Schedule 2.01(b) (the "Insurance
Loan")) and (z) any interest on the amounts stated in clauses (x)
and (y) above that accrues after the Effective Date until such
amounts are paid in full (the "Interest") ((x), (y) and (z)
collectively, the "Debt"). Any proceeds for the Put Right in
excess of the amount of the Debt shall be promptly paid to the
Employee.
(b) In the event that Employee does not exercise
the Put Right pursuant to Section 2.02, the Employee hereby
covenants and agrees that he will satisfy the Debt and the
Interest in full in cash no later than April 30, 1997.
(c) Upon complete satisfaction of the Debt and
the Interest, the Company shall release any and all liens that it
holds with respect to any of the Company's Common Stock owned by
Employee.
Section 3. Other Covenants with Respect to Securities.
3.01 Acquisitions, Dispositions and Other Activities.
Until the Standstill Termination Date (as hereinafter defined),
Employee and his wife, Ellen Robbins (collectively, the
"Restricted Persons") shall not, and shall not through their
Affiliates and associates, directly or indirectly, unless
specifically requested in writing in advance by the Company which
request shall be duly authorized by the Board of Directors of the
Company and which request shall be accompanied by evidence of
such authorization (it being understood that Restricted Persons
shall not, and shall not through their Affiliates and associates,
seek to have the Company or any of the Company's officers,
directors, representatives, trustees, employees, attorneys,
advisors, agents, Affiliates or associates make any such
request):
(A) acquire or seek to acquire, by purchase
or otherwise, ownership, including, Beneficial Ownership, of (i)
any Securities or (ii) any of the assets or businesses of the
Company, or direct or indirect rights or options to acquire such
ownership (other than the Common Stock underlying the options
currently owned by the Employee under the Company's 1986 stock
option plan);
(B) offer, seek or propose to enter into any
transaction of merger, consolidation, sale of substantial assets
or any other business combination involving the Company or any of
its Affiliates, whether or not any parties other than Restricted
Persons and their Affiliates and associates are involved;
(C) make, or in any way participate,
directly or indirectly, in any "solicitation" of "proxies" (as
such terms are defined or used in Regulation 14A under the
Exchange Act) or become a "participant" in any "election contest"
(as such terms are defined or used in Rule 14a-11 under the
Exchange Act) to vote, or seek to advise or influence any person
or entity with respect to the voting of, any voting Securities of
the Company or any of its Affiliates ("Voting Securities");
(D) initiate or propose any stockholder
proposals for submission to a vote of stockholders with respect
to the Company or any of its Affiliates, or propose any person
for election to the Board of Directors of the Company or any of
its Affiliates, or propose the removal of any member of the Board
of Directors of the Company or any of its Affiliates;
(E) otherwise seek to control the management
or policies of the Company or any of its Affiliates, including,
without limitation, taking any action to seek to obtain
representation on the Board of Directors of the Company or any of
its Affiliates (excluding his discussions in the ordinary course
with senior management of the Company);
(F) oppose, through any public means, any
duly authorized action or recommendation of the Board of
Directors of the Company;
(G) grant any proxy with respect to any
Voting Securities to any person not designated by the Company;
(H) deposit any Voting Securities in a
voting trust or subject any Voting Securities to any arrangement
or agreement with respect to the voting of such Voting Securities
or other agreement having similar effect;
(I) form, join or in any way intentionally
participate in a "group" (as such term is used in Section
13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange
Act")) to take any actions otherwise prohibited by this Section
3.01 or Section 3.04;
(J) enter into any discussions,
negotiations, arrangements or understandings with any third party
with respect to any provision of this Section 3.01 or Section
3.04; or
(K) make any public announcement with respect to
any prohibited act under this Section 3.01 or Section 3.04
(except as required by law).
For the purposes of this Agreement, the "Standstill
Termination Date" shall mean the earlier of (i) January 31, 1999
or (ii) the date upon which there is a Change in Control (as
hereinafter defined).
For purposes of this Section 3, a "Change in Control" shall
mean:
(A) An acquisition (other than directly from the
Company) of any voting securities of the Company by any "Person"
(as the term "Person" is used for the purposes of Section 13(d)
or Section 14(d) of the Exchange Act) immediately after which
such Person has "Beneficial Ownership" (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of fifteen percent
(15%) or more of the combined voting power of the Company's then
outstanding Voting Securities; provided, however, in determining
whether a Change in Control has occurred, Voting Securities which
are acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would cause a
Change in Control. The term "Person" for purposes of this
Section 3.01(A) shall not include the Employee or his Affiliates.
A "Non-Control Acquisition" shall mean an acquisition by (i) an
employee benefit plan (or trust forming part thereof) maintained
by (x) the Company or (y) any corporation or other Person of
which a majority of its voting power or its equity securities or
equity interest is owned directly or indirectly by the Company (a
"Subsidiary"), (ii) the Company or any Subsidiary, or (iii) any
Person in connection with (x) a "Non-Control Transaction" as
hereinafter defined) or (y) a transaction approved by the
Incumbent Board of Directors of the Company (as defined below) to
a Person which has Beneficial Ownership of less than 50% of the
Voting Securities of the Company after the consummation of such
transaction;
(B) The individuals who, as of February 1, 1997,
are members of the Boards of Directors (the "Incumbent Board"),
cease for any reason to constitute at least two-thirds of the
Board of Directors; provided, however, that if the election, or
nomination for election by the Company's stockholders, of any new
director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board;
provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or
threatened election contest or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors (a "Proxy Contest") including
by reason of any agreement intended to avoid or settle any Proxy
Contest; or
(C) Approval by stockholders of the Company
of:
(1) A merger, consolidation or
reorganization involving the Company, unless
(a) the stockholders of the Company
immediately before such merger, consolidation or reorganization
own, directly or indirectly, immediately following such merger,
consolidation or reorganization, at least two-thirds (66-2/3%) of
the combined voting power of the outstanding voting securities of
the corporation resulting from merger or consolidation or
reorganization (the "Surviving Corporation") in substantially the
same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganizations;
(b) the individuals who were members of
the Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members of
the board of directors of the Surviving Corporation; and
(c) no Person (other than the Company
or any Company Subsidiary, any employee benefit plan (or any
trust forming a part thereof) maintained by the Company, the
Surviving Corporation or any Subsidiary of the Company or the
Surviving Corporation, or any Person who, immediately prior to
such merger, consolidation or reorganization had Beneficial
Ownership of fifteen percent (15%) or more of the then
outstanding Voting Securities) has Beneficial Ownership of
fifteen percent (15%) or more of the combined voting power of the
Surviving Corporation's then outstanding Voting Securities, and
(d) a transaction described in clauses
(a) through (c) shall herein be referred to as a "Non-Control
Transaction";
(2) A complete liquidation or dissolution of
the Company; or
(3) An agreement for the sale or other
disposition of all or substantially all of the assets of the
Company to any Person (other than a transfer to a Company
Subsidiary).
3.02 Voting of Common Stock. Until the Standstill
Termination Date, the Restricted Persons agree that in all
matters requiring a vote by the holders of the Common Stock
during the Term, the Restricted Persons will take such action as
may be required so that all shares of Common Stock Beneficially
Owned by them are voted, at their option, either (i) in
accordance with the recommendation of the Board of Directors of
the Company or (ii) pro rata in the same manner and proportion
that votes of the stockholders of the Company (other than the
Restricted Persons) have been cast. The Restricted Persons will
take all such action as is necessary during the Term to ensure
that they shall be present, in person or by proxy, at all
meetings of stockholders of the Company so that all Voting
Securities Beneficially Owned by the Restricted Persons shall be
counted for purposes of determining the presence of a quorum at
such meeting.
3.03 Restrictions on Transfer. Prior to November 1,
1997, the Restricted Persons shall not, directly or indirectly,
sell, lend, transfer or otherwise dispose of, offer to sell,
lend, transfer or otherwise dispose of or agree to sell, lend,
transfer or otherwise dispose of more than 200,000 shares of
Common Stock they own (in addition to any Common Stock sold to
the Company pursuant to the Put Right); provided, however, that
Restricted Persons may sell, lend, transfer or otherwise dispose
of such Common Stock of the Company in the event of (i) a Change
in Control (as defined above), (ii) an underwriting of at least
one million five hundred thousand (1,500,000) shares of the
Common Stock in which Restricted Persons are permitted to
participate pursuant to the terms of the Registration Rights
Agreement between Restricted Persons and the Company dated as of
February 24, 1997 or (iii) pursuant to a bona fide pledge of or
the granting of a security interest or any other lien or
encumbrance in such shares of Common Stock to a recognized
institutional lender to secure a bona fide loan. Until the
Standstill Termination Date, the Restricted Persons shall not,
directly or indirectly, sell, lend, transfer or otherwise dispose
of any of their shares of Common Stock of the Company (or agree
to do so) to any person which, to their knowledge and after
taking into account such sale, would Beneficially Own more than
one percent (1%) of the Company's Common Stock. The parties
agree that the three children of Charles and Ellen Robbins (and
any trust created on their behalf prior to January 31, 1997) are
excluded from the restrictions in this Section 3.03.
3.04 Dispositions. In order to assist the Employee in
disposing of his Securities in accordance with applicable law
consistent with the undertakings set forth in Section 3.01, the
Company shall simultaneously herewith enter into a Registration
Rights Agreement with the Employee in the form attached hereto as
Exhibit 3.04.
Section 4. Employment Termination. The employment of
the Employee by the Company pursuant to this Agreement shall
terminate upon the occurrence of any of the following:
(a) Expiration of the Employment Term;
(b) At the election of the Company by action of the
Board of Directors, for Cause, immediately upon written notice by
the Company to the Employee. For the purposes of this Section
4(b), Cause for termination shall be deemed to exist only if the
Employee (i) is convicted of a felony by a court of competent
jurisdiction in a matter relating to the performance of his
Duties hereunder or (ii) is adjudged by a court of competent
jurisdiction to be liable for gross negligence or willful
misconduct in the performance of his duties to the Company and
such adjudication is no longer subject to direct appeal; or
(c) Death or disability of the Employee. As used in
this Agreement, the term "Disability" shall mean the inability of
the Employee, due to a physical or mental condition, for a period
of six (6) consecutive months, to perform the services
contemplated under this Agreement. A determination of Disability
shall be made by a physician satisfactory to both the Employee
and the Company, which physician's determination as to disability
shall be made within ten days of the request therefor and shall
be binding on all parties; provided, however, that if the
Employee and the Company do not agree on a physician, the
Employee and the Company shall each select a physician and these
two together shall select a third physician, which third
physician's determination as to Disability shall be binding on
all parties.
Section 5. Effect of Termination.
5.01 Termination for Cause. In the event the
Employee's employment is terminated for Cause pursuant to Section
4(b), the Company shall pay to the Employee the pro rata Salary
and benefits otherwise payable to him under Section 2 through the
last day of his actual employment by the Company. Termination of
the Employee for Cause shall not affect any rights granted to
Employee hereunder other than Employee's right to receive salary
and benefits under Section 2.04 hereof.
5.02 Termination for Death or Disability. If the
Employee's employment is terminated by death or because of
Disability pursuant to Section 4(c), the Company shall pay to the
estate of the Employee or to the Employee, as the case may be, a
lump-sum payment equal to the remaining compensation which would
otherwise be payable to the Employee during the remainder of the
Term.
5.03 Cooperation. In the event of termination of this
Agreement for whatever reason (other than death), for a period of
one year thereafter, and upon reasonable written notice by the
Company, for reasonable amounts of time, and at mutually agreed
times and places, the Employee agrees to cooperate with the
Company and to be reasonably available to the Company with
respect to continuing and/or future matters arising out of this
Agreement or any other relationship with the Company, whether
such matters are business-related, legal or otherwise. With
respect to each written request by the Company for the Employee's
cooperation or availability under this Section 5.03, the Company
agrees to pay the Employee for each day the Employee actually
renders services to the Company pursuant to such request, $100
per hour, but in no case less than $1,000, and to reimburse the
Employee for the Employee's reasonable expenses (including
attorney's fees) incurred in complying with the terms of this
Section 5.03.
Section 6. Confidentiality. The Employee agrees and
understands that, in the Employee's position with the Company,
the Employee has been and may be from time to time exposed to and
receive information relating to the trade secrets, proprietary
information and confidential affairs of the Company (including,
without limitation, confidential information provided to the
Company by its clients, customers and third parties), including,
without limitation, business and marketing plans, strategies,
customer information, other information concerning the Company's
services, promotions, development, financing, expansion plans,
business policies and practices, and other forms of information.
The Employee agrees that during the Employment Term and for one
year thereafter the Employee will keep such information
confidential and not disclose such information, either directly
or indirectly, to any third person or entity without the prior
written consent of the Company. This confidentiality covenant
has no geographical or territorial restriction. Upon termination
of this Agreement, the Employee will promptly supply to the
Company all property, keys, notes, memoranda, writings, lists,
files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data or any other
tangible product or document which has been produced by, received
by or otherwise submitted to the Employee during or prior to the
Employment Term in connection with his services under this
Agreement.
Section 7. Covenant Not To Compete.
7.01 Non-Competition. During the Employment Term, the
Employee shall not directly or indirectly:
(a) as an individual proprietor, partner,
stockholder, officer, employee, director, joint venturer,
investor, lender, or in any other capacity whatsoever (other than
as the holder of not more than two percent (2%) of the total
outstanding stock of a publicly held company) own, manage,
operate, join, control, be employed by, or participate in the
ownership, management, operation or control of any Competing
Enterprise (as defined in Section 7.02 of this Agreement);
(b) recruit, solicit or induce, or attempt to
induce, any employee or employees of the Company (other than his
former secretary, Judy Herbst, and his son, Charles B. Robbins)
to terminate their employment with, or otherwise cease their
relationship with, the Company;
(c) solicit, divert or take away, or attempt to
divert or to take away, the business or patronage of any of the
clients, customers or accounts, or prospective clients, customers
or accounts, of the Company which were contacted, solicited or
served by the Company while the Employee was employed by the
Company; or
(d) publish any statement or make any statement
(under circumstances reasonably likely to become public) critical
of the Company, or in any way adversely affecting or otherwise
maligning the reputation of the Company or any of its Affiliates.
7.02 Competing Enterprise. For purposes of Section
7.01 of this Agreement, the term "Competing Enterprise" shall
mean any person, corporation, partnership or other entity engaged
in any business (i) described in the Company's Annual Report to
Stockholders or in its Annual Report on Form 10-K for the
Company's most recent fiscal year, within the United States of
America or in the Republic of Vietnam and any adjacent countries,
in which the Company and its Affiliates has engaged or is then
engaged, (ii) under consideration by the Company and its
Affiliates as of the date hereof or during the Employment Term or
(iii) otherwise related, directly or indirectly, to the
healthcare field. Notwithstanding anything in this Section 7.02
to the contrary, the term "Competing Enterprise" shall not
include any person, or any corporation or other entity,
developing or operating assisted living facilities which are not
within 100 miles of any facility of the Company or a Subsidiary
on the Effective Date. The phrase "engaged in any business"
includes the conduct of business in any respect, including,
without limitation, sales presentations, entering into contracts,
and the billing or receipt of payment, services or goods, and in
regard to any person, including, without limitation, the United
States federal government, and any state government, and any
department or agency thereof.
7.03 Enforceability. If any restriction set forth in
Section 7.01 of this Agreement is found by any court of competent
jurisdiction to be unenforceable because it extends for too long
a period of time or over too great a range of activities or in
too broad a geographic area, it shall then be interpreted to
extend only over the maximum period of time, range of activities
or geographic area as to which it may be enforceable.
7.04 Essential Elements. It is understood by the
parties hereto that the covenants contained in this Section 7 are
essential elements of this Agreement and that, but for the
agreement of the Employee to comply with such covenants, the
Company would not have agreed to enter into this Agreement. The
Employee and the Company have independently consulted with their
respective counsel and have been advised concerning the
reasonableness and propriety of such covenants with specific
regard to the nature of the business conducted by the Company.
The Employee hereby agrees that all covenants contained in this
Section 7 are reasonable and valid and waives all defenses to the
strict enforcement hereof by the Company.
Section 8. Covenants of the Company Not to Disparage.
Except as required by law, the Company and the Employee shall
not, directly or indirectly, publish any statement or make any
statement critical of each other or in any way adversely
affecting or otherwise maligning the reputation of each other.
Section 9. D&O Insurance. The Company shall maintain
the Employee's coverage under the Company's then existing
directors' and officers' insurance policy to the same extent that
it maintains such insurance for the members of its Board of
Directors and Officers.
Section 10. Advancement of Expenses. The Company agrees
to advance expenses (including attorneys' fees) incurred by the
Employee in respect of any litigation or threatened litigation
involving the Employee in his capacity as a former director or
officer of the Company or its Affiliates (other than in any
matter in which the Company is the party opposed to the Employee
(other than a derivative action)). The Company's obligation
hereunder shall be to the fullest extent permitted by Delaware
law and the Company's Bylaws; provided, however, that no
advancement of expenses hereunder shall be made until the Company
has received an undertaking by the Employee to repay such amount
if it shall be ultimately determined that the Employee is not
entitled to be indemnified by the Company.
Section 11. Miscellaneous.
11.01 Section 16(a) Filing. The Employee shall
file one or more Form 4's promptly after execution of this
Agreement reflecting his termination as a director and an
executive officer, the sale of Common Stock in accordance with
Section 2.02 hereof, if any, and such information as a Form 5 may
require for the fiscal year ending April 30, 1997.
11.02 Specific Performance. The parties hereto
agree that irreparable harm would occur in the event that
Sections 3, 6 and 7 of this Agreement were not performed by the
Employee in accordance with their specific terms or conditions or
were otherwise breached and that money damages are an inadequate
remedy for breach of Sections 3, 6 and 7 hereof because of the
difficulty of ascertaining the amount of damage that will be
suffered by the Company in the event that Sections 3, 6 and 7
hereof are not performed in accordance with their terms or
conditions or are otherwise breached. Accordingly, the Employee
agrees that the Company shall be entitled to an injunction or
injunctions to prevent breaches of Sections 3, 6 and 7 hereof by
the Employee and to enforce specifically the terms and provisions
thereof in any court of the United States or in any state having
jurisdiction, this being in addition to any other remedy to which
it is entitled at law or in equity.
11.03 Legend Removal. The Company agrees that it
will, upon the presentation to its transfer agent of any
certificates representing shares of Common Stock held by the
Restricted Persons or their Affiliates which contain a legend,
replace the certificates representing such shares with new
certificates not containing any restrictive legends. Unless a
registration statement concerning such shares of Common Stock has
become effective, such presentation shall be accompanied by an
opinion of counsel reasonably acceptable to the Company that such
shares may be offered and sold without registration under the
Securities Act of 1933 and the basis therefor.
11.04 Entire Agreement. The parties acknowledge
and agree that this Agreement, together with the Registration
Rights Agreement and the stock option agreements under the
Company's 1986 stock option plan between the Company and the
Employee, constitute the complete agreement between them and that
no oral modification of this Agreement is permissible. The
parties further acknowledge and agree that this Agreement and the
terms contained herein supersede all previous contracts and
agreements between the parties other than such Registration
Rights Agreement and such stock option agreements and that all
previous contracts and agreements other than such Registration
Rights Agreement and such stock option agreements between the
parties shall become null and void upon execution of this
Agreement.
11.05 Amendment. This Agreement may not be
amended, modified, altered or supplemented, except upon the
execution and delivery of a written agreement executed by all of
the parties hereto.
11.06 Waiver. No provision of this Agreement shall
be waived except upon the execution and delivery of a written
instrument executed by the party to be charged with the waiver.
No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision
hereof. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof.
11.07 Actions by the Company. Notwithstanding any
other provision of this Agreement, any amendment, modification,
alteration, supplement, assignment or waiver of this Agreement
that requires the written agreement or consent of the Company, or
action permitted or required by the Company pursuant to this
Agreement, shall be effective only following the review and
approval thereof by the Board.
11.08 Notices. All notices, requests, demands and
other communications required or permitted shall be made in
writing by hand-delivery, registered first-class mail, telex,
telecopier or air courier guaranteeing overnight delivery:
(a) If to the Company, to:
PHP Healthcare Corporation
11440 Commerce Park Drive
Reston, VA 20191
Attention: Jack M. Mazur
With a copy to:
PHP Healthcare Corporation
11440 Commerce Park Drive
Reston, VA 20191
Attention: Ben Rosenbaum, Esq.
or to such other person or address as the Company shall furnish
to the Employee in writing;
(b) If to the Employee, to:
Charles H. Robbins
7720 Carlton Place
McLean, VA 22102
With a copy to:
Tucker, Flyer & Lewis
1615 L Street, N.W.
Suite 400
Washington, D.C. 20036
Attention: Stefan F. Tucker, Esq.
or to such other person or address as the Employee shall furnish
to the Company in writing. All such notices, requests, demands
and other communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight
delivery.
11.09 Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns;
provided, however, that neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by
the Employee or the Company (except by operation of law) without
the prior written consent of the other party.
11.10 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of
the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as
to be unenforceable, such provision shall be interpreted to be
only so broad as is enforceable, and this Agreement shall be
deemed reformed on terms as substantially similar to the terms
hereof as are enforceable.
11.11 Headings. The headings of the sections of
this Agreement are inserted for convenience only and shall not
constitute a part hereof or affect in any way the meaning or
interpretation of this Agreement.
11.12 Expenses. Each party shall pay all costs and
expenses incurred by it or on its behalf in connection with this
Agreement and the transactions contemplated hereby, including,
without limiting the generality of the foregoing, fees and
expenses of such party's own financial Employees, accountants and
counsel.
11.13 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
Commonwealth of Virginia without giving effect to conflict of law
rules.
11.14 Jurisdiction and Venue. Each of the parties
to this Agreement hereby (i) consents to personal jurisdiction in
any suit, claim, action or proceeding relating to or arising
under this Agreement which is brought in any state or federal
court in the Commonwealth of Virginia and (ii) waives any
objection such party may have to venue in any such Virginia court
or to any claim that any such Virginia court is an inconvenient
forum.
11.15 Interpretation of Agreement. This Agreement
has been negotiated at arm's length and between persons
sophisticated and knowledgeable in the matters dealt with in this
Agreement. Each party has been represented by experienced and
knowledgeable legal counsel. Accordingly, any rule of law or
legal decision that would require interpretation of any
ambiguities in this Agreement against the party that has drafted
it is not applicable and is waived.
11.16 Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall for all purposes
be deemed to be an original and all of which shall constitute one
and the same instrument.
11.17 Survival. Notwithstanding the expiration of
the Employment Term, the covenants and other agreements made
herein shall survive, unless and until such covenants and
agreements are terminated in accordance with their terms as set
forth herein.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as of the day and year first above written.
PHP HEALTHCARE CORPORATION
By: /s/ Anthony M. Picini
Name: Anthony M. Picini
Title: Executive V.P. & C.F.O.
/s/ Charles H. Robbins
CHARLES H. ROBBINS
/s/ Ellen E. Robbins
ELLEN ROBBINS
(as to Sections 3 and 11)
EXHIBIT 3.03
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
PHP HEALTHCARE CORPORATION
AND
CERTAIN STOCKHOLDERS OF
PHP HEALTHCARE CORPORATION
Dated as of February 24, 1997
TABLE OF CONTENTS
Page
1. Certain Definitions. 1
2. Registration Rights. 2
2.1. Demand Registrations. 2
2.2. Piggyback Registrations. 5
2.3. Allocation of Securities Included in
Registration Statement. 6
2.4. Registration Procedures. 7
2.5. Registration Expenses. 13
2.6. Certain Limitations on Registration
Rights. 13
2.7. Limitations on Sale or Distribution of
Other Securities. 13
2.8. No Required Sale. 14
2.9. Indemnification. 14
3. Underwritten Offerings. 18
3.1. Requested Underwritten Offerings. 18
3.2. Piggyback Underwritten Offerings. 18
4. General. 19
4.1. Recapitalizations, Exchanges, etc.,
Affecting Eligible Shares. 19
4.2. Rule 144. 19
4.3. Nominees for Beneficial Owners. 20
4.4. Amendments and Waivers. 19
4.5. Notices. 20
4.6. Miscellaneous. 21
4.7. No Inconsistent Agreements. 23
4.8. Termination. 23
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated
as of February 24, 1997, by and between PHP Healthcare
Corporation, a Delaware corporation (the "Company"), and Charles
H. Robbins, Ellen E. Robbins, Ellen E. Robbins, Trustee Under
Trust Indenture dated October 1, 1985, FBO Caroline H. Robbins,
Charles H. Robbins, Grantor, Ellen E. Robbins, Trustee Under
Trust Indenture dated October 1, 1985, FBO Lee S. Robbins,
Charles H. Robbins, Grantor and Charles B. Robbins (collectively,
the "Stockholders").
WHEREAS, the Company and Charles H. Robbins have entered
into an employment agreement, dated as of the date hereof (the
"Employment Agreement"); and
WHEREAS, in connection with the Employment Agreement, the
Company has agreed to grant certain rights with respect to
registering under the Securities Act of 1933, as amended, the
Common Stock and Common Stock equivalents of the Company held by
the Stockholders.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto, intending
to be legally bound hereby, agree as follows:
1. Certain Definitions. As used in this Agreement, the
following terms shall have the following meanings:
"Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities
Act.
"Common Stock" means the Common Stock, par value $.01 per
share, of the Company, options or warrants to acquire shares of
such Common Stock or securities convertible into such shares of
Common Stock, and any equity securities issued or issuable with
respect to the Common Stock in connection with a
reclassification, recapitalization, merger, consolidation or
other reorganization.
"Eligible Shares" means all Common Stock owned by the
Stockholders as of the date hereof. Such shares of Common Stock
shall cease to be Eligible Shares when (i) a registration
statement with respect to the sale of such shares shall have
become effective under the Securities Act and such shares shall
have been disposed of in accordance with such registration
statement or (ii) such shares shall have been otherwise
transferred pursuant to an applicable exemption under the
Securities Act, new certificates for such shares not bearing a
legend restricting further transfer shall have been delivered by
the Company and such shares shall be freely transferable to the
public without registration under the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934,
and the rules and regulations of the Commission promulgated
thereunder, all as the same shall be in effect from time to time.
"Person" means any individual, corporation, limited
liability company, limited or general partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political
subdivisions thereof.
"Rule 144" means Rule 144 promulgated under the Securities
Act or any successor rule thereto or any complementary rule
thereto.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
2. Registration Rights.
2.1. Demand Registrations.
(a) (i) Subject to Section 3.03 of the Employment
Agreement and subject to Sections 2.1(b) and 2.3 below, at any
time from the date hereof through November 1, 1997, the
Stockholders shall have the right to require the Company to file
one shelf registration statement pursuant to Rule 415 of the
Securities Act covering 500,000 shares of their respective
Eligible Shares by delivering a written request therefor to the
Company specifying the number of Eligible Shares to be included
in such shelf registration statement and the intended method of
distribution thereof (other than an underwritten public
offering).
(ii) Subject to Section 3.03 of the Employment
Agreement and subject to Sections 2.1(b) and 2.3 below, at any
time and from time to time after November 1, 1997, the
Stockholders shall have the right to require the Company to file
two registration statements under the Securities Act covering all
or any part of their respective Eligible Shares by delivering a
written request therefor on or after October 1, 1997 to the
Company specifying the number of Eligible Securities to be
included in such registration and the intended method of
distribution thereof (including an underwritten offering). All
such requests by the Stockholders pursuant to Sections 2.1(a)(i)
or 2.1(a)(ii) are referred to herein as "Demand Registration
Requests," and the registrations so requested are referred to
herein as "Demand Registrations."
(iii) The Company shall, as expeditiously as
possible following, but in no case more than 30 days after, a
Demand Registration Request, use its best efforts to (x) effect
such registration under the Securities Act (including, without
limitation, by means of a shelf registration pursuant to Rule 415
under the Securities Act if so requested and if the Company is
then eligible to use such a registration) of Eligible Shares
which the Company has been so requested to register, for
distribution in accordance with such intended method of
distribution (including an underwritten offering), and (y) if
requested by the Stockholders, obtain acceleration of the
effective date of the registration statement relating to such
registration.
(b) The Demand Registration rights granted in Section
2.1(a) are subject to the following limitations:
(i) each registration in respect of a Demand
Registration Request must include at least 500,000 Eligible
Shares;
(ii) the Company shall not be required to cause a
registration pursuant to Section 2.1(a)(i) or 2.1(a)(ii) to be
declared effective within a period of 150 days after the
effective date of any other registration effected pursuant to
Section 2.1(a)(i) or 2.1(a)(ii); provided, however, that if a
registration statement does not include the number of Eligible
Shares requested by the Stockholders to be included in such
registration statement, it shall not be counted as a registration
statement initiated pursuant to Section 2.1(a)(i) or 2.1(a)(ii);
and
(iii) if the Board of Directors of the
Company, in its good faith judgment, determines that any
registration of Eligible Shares should not be made or continued
because it would materially interfere with any material
financing, acquisition, corporate reorganization or merger or
other material transaction involving the Company or any of its
subsidiaries (a "Valid Business Reason"), (x) the Company may
postpone filing a registration statement relating to a Demand
Registration Request until such Valid Business Reason no longer
exists, but in no event for more than three months, and (y) in
case a registration statement has been filed relating to a Demand
Registration Request, the Company may cause such registration
statement to be withdrawn and its effectiveness terminated or may
postpone amending or supplementing such registration statement
until such Valid Business Reason no longer exists, but in no
event for more than three months (such period of postponement or
withdrawal under sub clause (x) or (y) of this clause (iii), the
"Postponement Period"); and the Company shall give written notice
of its determination to postpone or withdraw a registration
statement and of the fact that the Valid Business Reason for such
postponement or withdrawal no longer exists, in each case,
promptly after the occurrence thereof; provided, however, the
Company shall not be permitted to postpone or withdraw a
registration statement within 12 months after the expiration of
any Postponement Period.
If the Company shall give any notice of postponement or
withdrawal of any registration statement, the Company shall not,
during the period of postponement or withdrawal, register any
Common Stock, other than pursuant to a registration statement on
Form S-4 or S-8 (or an equivalent registration form then in
effect). The Stockholders agree that, upon receipt of any notice
from the Company that the Company has determined to withdraw any
registration statement pursuant to clause (iii) above, the
Stockholders will discontinue any disposition of Eligible Shares
pursuant to such registration statement and, if so directed by
the Company, will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in
such Stockholder's possession of the prospectus covering such
Eligible Shares that was in effect at the time of receipt of such
notice. If the Company shall have withdrawn or prematurely
terminated a registration statement filed under Section 2.1(a)(i)
or 2.1(a)(ii) (whether pursuant to clause (iii) above or as a
result of any stop order, injunction or other order or
requirement of the Commission or any other governmental agency or
court), the Company shall not be considered to have effected an
effective registration for the purposes of this Agreement until
the Company shall have filed a new registration statement
covering Eligible Shares covered by the withdrawn registration
statement and such registration statement shall have been
declared effective and shall not have been withdrawn. If the
Company shall give any notice of withdrawal or postponement of a
registration statement, the Company shall, at such time as the
Valid Business Reason that caused such withdrawal or postponement
no longer exists (but in no event later than three months after
the date of the postponement or withdrawal), use its best efforts
to effect the registration under the Securities Act of Eligible
Shares covered by the withdrawn or postponed registration
statement in accordance with this Section 2.1 (unless the
Stockholders shall have withdrawn such request, in which case the
Company shall not be considered to have effected an effective
registration for the purposes of this Agreement), and such
registration shall not be withdrawn or postponed pursuant to
clause (iii) above.
(c) The Company, subject to Sections 2.3 and 2.6, may
elect to include in any registration statement and offering made
pursuant to Section 2.1(a)(i) or 2.1(a)(ii), authorized but
unissued shares of Common Stock or shares of Common Stock held by
the Company as treasury shares; provided, however, that such
inclusion shall be permitted only to the extent that it is
pursuant to and subject to the terms of the underwriting
agreement or arrangements, if any, entered into by the
Stockholders.
(d) With respect to any Demand Registration involving
an underwritten offering, the Stockholders holding a majority of
Eligible Shares being registered in such Demand Registration
shall have the right to designate one managing underwriter. The
Company shall have the right to designate any other managing
underwriters, including a lead managing underwriter (such Person,
the "Lead Underwriter"); provided, however, that the designation
of the Lead Underwriter shall be subject to the approval of the
Stockholders holding a majority of the shares to be registered in
the Demand Registration, which approval shall not be withheld
unreasonably.
2.2. Piggyback Registrations.
(a) Subject to Section 3.03 of the Employment
Agreement, if, at any time, the Company proposes or is required
to register any of its equity securities under the Securities Act
(other than pursuant to (i) registrations on such form or similar
form(s) solely for registration of securities in connection with
an employee benefit plan or dividend reinvestment plan or a
merger or consolidation or (ii) a Demand Registration under
Section 2.1) on a registration statement on Form S-1, Form S-2 or
Form S-3 (or an equivalent general registration form then in
effect), whether or not for its own account, the Company shall
give prompt written notice of its intention to do so to the
Stockholders. Upon the written request of the Stockholders, made
within 15 days following the receipt of any such written notice
(which request shall specify the maximum number of Eligible
Shares intended to be disposed of by the Stockholders and the
intended method of distribution thereof), the Company shall,
subject to Sections 2.2(b), 2.3 and 2.6 hereof, use its best
efforts to cause all such Eligible Shares, the holders of which
have so requested the registration thereof, to be registered
under the Securities Act (with the securities which the Company
at the time proposes to register) to permit the sale or other
disposition by such holders (in accordance with the intended
method of distribution thereof) of Eligible Shares to be so
registered. There is no limitation on the number of such
piggyback registrations pursuant to the preceding sentence which
the Company is obligated to effect. No registration effected
under this Section 2.2(a) shall relieve the Company of its
obligations to effect Demand Registrations.
(b) If, at any time after giving written notice of its
intention to register any equity securities and prior to the
effective date of the registration statement filed in connection
with such registration, the Company shall determine for any
reason not to register or to delay registration of such equity
securities, the Company may, at its election, give written notice
of such determination to the Stockholders and (i) in the case of
a determination not to register, shall be relieved of its
obligation to register any Eligible Shares in connection with
such abandoned registration, without prejudice, however, to the
rights of Stockholders under Section 2.1, and (ii) in the case of
a determination to delay such registration of its equity
securities, shall be permitted to delay the registration of such
Eligible Shares requested by the Stockholders to be included
therein for the same period as the delay in registering such
other equity securities.
(c) The Stockholders shall have the right to withdraw
their request for inclusion of their Eligible Shares in any
registration statement pursuant to this Section 2.2 by giving
written notice to the Company of their request to withdraw;
provided, however, that (i) such request must be made in writing
prior to the earlier of the execution of the underwriting
agreement or the execution of the custody agreement with respect
to such registration and (ii) such withdrawal shall be
irrevocable and, after making such withdrawal, the Stockholder
shall no longer have any right to include Eligible Shares in the
registration as to which such withdrawal was made.
2.3. Allocation of Securities Included in Registration
Statement.
(a) If any Demand Registration involves an
underwritten offering, and the Lead Underwriter of such offering
shall advise the Company that, in its view, the number of
securities requested to be included in such registration by the
Stockholders or by the Company exceeds the largest number (the
"Section 2.1 Sale Number") that can be sold in an orderly manner
in such offering within a price range acceptable to the
participating Stockholders, the Company shall include in such
registration:
(i) first, all Eligible Shares requested to be
included in such registration by the Stockholders; provided,
however, that, if the number of such Eligible Shares exceeds the
Section 2.1 Sale Number, then the number of such Eligible Shares
included in such registration shall be allocated on a pro rata
basis among all Stockholders requesting that Eligible Shares be
included in such registration, based on the number of Eligible
Shares then owned by each Stockholder requesting inclusion in
relation to the number of Eligible Shares then owned by all
Stockholders requesting inclusion; and
(ii) second, to the extent that the number of
Eligible Shares to be included by all Stockholders is less than
the Section 2.1 Sale Number, securities that the Company proposes
to register.
If, as a result of the proration provisions of this Section
2.3(a), any Stockholder shall not be entitled to include all
Eligible Shares in a registration that such Stockholder has
requested be included, such Stockholder may elect to withdraw its
request to include Eligible Shares in such registration or may
reduce the number requested to be included; provided, however,
that (x) such request must be made in writing prior to the
earlier of the execution of the underwriting agreement with
respect to such registration, the execution of the custody
agreement with respect to such registration and 10 days after the
Company provides written notice to the Stockholder stating the
amount of Eligible Shares that such Stockholder shall be entitled
to include in a registration pursuant to this Section 2.3(a) and
(y) such withdrawal shall be irrevocable and, after making such
withdrawal, such Stockholder shall no longer have any right to
include Eligible Shares in the registration as to which such
withdrawal was made.
(b) If any registration pursuant to Section 2.2
involves an underwritten offering and the Lead Underwriter shall
advise the Company that, in its view, the number of securities
requested to be included in such registration exceeds the number
(the "Section 2.2 Sale Number") that can be sold in an orderly
manner in such registration within a price range acceptable to
the Company or the Stockholders owning a majority of Eligible
Shares requested to be registered in such registration, as the
case may be, the Company shall include in such registration:
(i) first, all Common Stock that the Company
proposes (the "Company Securities"); and
(ii) second, to the extent that the number of
Company Securities is less than the Section 2.2 Sale Number, the
remaining shares to be included in such registration shall be
allocated on a pro rata basis among (x) all Stockholders
requesting that Eligible Shares be included in such registration,
based on the number of Eligible Shares then owned by each
Stockholder requesting inclusion in relation to the number of
Eligible Shares then owned by all Stockholders requesting
inclusion, and (y) other persons exercising their right to
include Common Stock in such registration; provided, however, all
Stockholders shall be subject to any agreement between the
Company and any such other person as of a date prior to the date
hereof in respect of the allocation set forth in this Section
2.3(b)(ii).
2.4. Registration Procedures.
If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect or
cause the registration of any Eligible Shares under the
Securities Act as provided in this Agreement, the Company shall,
as expeditiously as possible:
(a) prepare and file with the Commission a
registration statement on an appropriate registration form of the
Commission for the disposition of such Eligible Shares in
accordance with the intended method of disposition thereof, which
form (i) shall be selected by the Company and (ii) shall be
available for the sale of Eligible Shares by the selling holders
thereof and shall comply as to form in all material respects with
the requirements of the applicable form and include all financial
statements required by the Commission to be filed therewith, and
the Company shall use its best efforts to cause such registration
statement to become and remain effective for the time periods set
forth in subsection (b) of this Section 2.4 (provided, however,
that before filing a registration statement or prospectus or any
amendments or supplements thereto, or comparable statements under
securities or blue sky laws of any jurisdiction, the Company will
furnish to one counsel for the Stockholders participating in the
planned offering (selected by the Stockholders holding a majority
of Eligible Shares included in the registration) and the
underwriters, if any, copies of all such documents proposed to be
filed (including all exhibits thereto), which documents will be
subject to the reasonable review and reasonable comment of such
counsel, and the Company shall not file any registration
statement or amendment thereto or any prospectus or supplement
thereto to which the Stockholders covered by such registration
statement or the underwriters shall reasonably object in
writing);
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to
keep such registration statement effective for a period not to
exceed two years as any seller of Eligible Shares pursuant to
such registration statement shall request and to comply with the
provisions of the Securities Act with respect to the sale or
other disposition of all Eligible Shares covered by such
registration statement in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such
registration statement;
(c) furnish, without charge, to each seller of such
Eligible Shares and each underwriter, if any, of the securities
covered by such registration statement such number of copies of
such registration statement, each amendment and supplement
thereto (in each case including all exhibits), and the prospectus
included in such registration statement (including each
preliminary prospectus) in conformity with the requirements of
the Securities Act, and other documents, as such seller and
underwriter may reasonably request in order to facilitate the
public sale or other disposition of Eligible Shares owned by such
seller (the Company hereby consenting to the use in accordance
with applicable law of each such registration statement (or
amendment or post-effective amendment thereto) and each such
prospectus (or preliminary prospectus or supplement thereto) by
each such seller of Eligible Shares and the underwriters, if any,
in connection with the offering and sale of Eligible Shares
covered by such registration statement or prospectus);
(d) use its best efforts to register or qualify
Eligible Shares covered by such registration statement under such
other securities or "blue sky" laws of such jurisdictions as any
sellers of Eligible Shares or any managing underwriter shall
reasonably request, and do any and all other acts and things
which may be reasonably necessary or advisable to enable such
sellers or underwriter, if any, to consummate the disposition of
Eligible Shares in such jurisdictions, except that in no event
shall the Company be required to qualify to do business as a
foreign corporation in any jurisdiction where it would not, but
for the requirements of this paragraph (d), be required to be so
qualified, to subject itself to taxation in any such jurisdiction
or to consent to general service of process in any such
jurisdiction;
(e) promptly notify each seller of Eligible Shares
covered by such registration statement and each managing
underwriter, if any: (i) when the registration statement, any
pre-effective amendment, the prospectus or any prospectus
supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the
registration statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission
or state securities authority for amendments or supplements to
the registration statement or the prospectus related thereto or
for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for
that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification
of any Eligible Shares for sale under the securities or blue sky
laws of any jurisdiction or the initiation of any proceeding for
such purpose; (v) of the existence of any fact of which the
Company becomes aware which results in the registration
statement, the prospectus related thereto or any document
incorporated therein by reference containing an untrue statement
of a material fact or omitting to state a material fact required
to be stated therein or necessary to make any statement therein
not misleading; and (vi) if at any time the representations and
warranties contemplated by Section 3 below cease to be true and
correct in all material respects; and, if the notification
relates to an event described in clause (v), the Company shall
promptly prepare and furnish to each such seller and each
underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Eligible Shares, such
prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein in the light
of the circumstances under which they were made not misleading;
(f) comply with all applicable rules and regulations
of the Commission, and make generally available to its security
holders, as soon as reasonably practicable after the effective
date of the registration statement, an earnings statement (which
need not be audited) covering the period of at least twelve
consecutive months beginning with the first day of the Company's
first calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder;
(g) (i) cause all such Eligible Shares covered by such
registration statement to be listed on the principal securities
exchange on which similar securities issued by the Company are
then listed (if any), if the listing of such Eligible Shares is
then permitted under the rules of such exchange, or (ii) if no
similar securities are then so listed, to either cause all such
Eligible Shares to be listed on a national securities exchange or
to secure designation of all such Eligible Shares as a National
Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") "national market system security" within the
meaning of Rule 11Aa2-1 of the Commission or, failing that,
secure NASDAQ authorization for such shares and, without limiting
the generality of the foregoing, take all actions that may be
required by the Company as the issuer of such Eligible Shares in
order to facilitate the managing underwriter's arranging for the
registration of at least two market makers as such with respect
to such shares with the National Association of Securities
Dealers, Inc. (the "NASD");
(h) provide and cause to be maintained a transfer
agent and registrar for all such Eligible Shares covered by such
registration statement not later than the effective date of such
registration statement;
(i) enter into such customary agreements (including,
if applicable, an underwriting agreement) and take such other
actions as the Stockholders holding a majority of Eligible Shares
to be registered in such offering shall reasonably request in
order to expedite or facilitate the disposition of such Eligible
Shares. The Stockholders that hold Eligible Shares which are to
be distributed by such underwriters shall be parties to such
underwriting agreement and may, at their option, require that the
Company make to and for the benefit of such Stockholders the
representations, warranties and covenants of the Company which
are being made to and for the benefit of such underwriters and
which are of the type customarily provided to institutional
investors in secondary offerings;
(j) obtain an opinion from the Company's counsel and a
"cold comfort" letter from the Company's independent public
accountants in customary form and covering such matters as are
customarily covered by such opinions and "cold comfort" letters,
which opinion and letter shall be reasonably satisfactory to the
underwriter, if any, and to the Stockholders participating in
such offering;
(k) deliver promptly to each Stockholders
participating in the offering and each underwriter, if any,
copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to the
registration statement, other than those portions of any such
memoranda which contain information subject to attorney-client
privilege with respect to the Company, and, upon receipt of such
confidentiality agreements as the Company may reasonably request,
make reasonably available for inspection by any seller of such
Eligible Shares covered by such registration statement, by any
underwriter, if any, participating in any disposition to be
effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such seller
or any such underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of the
Company, and cause all of the Company's officers, directors and
employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in
connection with such registration statement;
(l) use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration
statement;
(m) provide a CUSIP number for all Eligible Shares,
not later than the effective date of the registration statement;
(n) make reasonably available its employees and
personnel and otherwise provide reasonable assistance to the
underwriters (taking into account the needs of the Company's
businesses and the requirements of the marketing process) in the
marketing of Eligible Shares in any underwritten offering;
(o) within a reasonable time prior to the filing of
any registration statement, any related prospectus, any amendment
to such a registration statement or amendment or supplement to
such a prospectus, provide copies of such document to the
Stockholders and their counsel and to the underwriter or
underwriters, if any; invite the Stockholders and their counsel
to attend drafting sessions with respect to such documents; make
such reasonable changes in any such document prior to or after
the filing thereof as the counsel to the Stockholders or the
underwriter may reasonably request, provided that such changes
shall not (x) unreasonably delay the filing of such document or
(y) unreasonably interfere with the good faith judgment of the
Company and its counsel with respect to disclosures made in such
documents about the Company; and make available for discussion of
such document such of the representatives of the Company as shall
be reasonably requested by the Stockholders or by any
underwriter;
(p) upon request, at least one day prior to the filing
of any document which is to be incorporated by reference into the
registration statement or the prospectus (after the initial
filing of such registration statement) provide copies of such
document to the Stockholders, and make the Company's
representatives reasonably available for discussion of such
document;
(q) furnish to each Stockholder participating in the
offering, without charge, at least one copy of the registration
statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated
therein by reference and all exhibits (including those
incorporated by reference), and furnish to each managing
underwriter, without charge, as many copies of such registration
statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated
therein by reference and all exhibits (including those
incorporated by reference) as reasonably requested by such
underwriter;
(r) cooperate with the selling holders of Eligible
Shares and the managing underwriter, if any, to facilitate the
timely preparation and delivery of certificates not bearing any
restrictive legends representing Eligible Shares to be sold, and
cause such Eligible Shares to be issued in such denominations and
registered in such names in accordance with the underwriting
agreement or, if not an underwritten offering, in accordance with
the instructions of the selling holders of Eligible Shares at
least three business days prior to any sale of Eligible Shares;
and
(s) take all such other commercially reasonable
actions the Company deems necessary or advisable in order to
expedite or facilitate the disposition of such Eligible Shares.
The Company may require as a condition precedent to the
Company's obligations under this Section 2.4 that each seller of
Eligible Shares as to which any registration is being effected
furnish the Company such information regarding such seller and
the distribution of such securities as the Company may from time
to time reasonably request provided that such information shall
be used only in connection with such registration.
Each Stockholder agrees that upon receipt of any notice from
the Company of the happening of any event of the kind described
in clause (v) of paragraph (e) of this Section 2.4, such
Stockholder will discontinue its disposition of Eligible Shares
pursuant to the registration statement covering such Eligible
Shares until such Stockholder's receipt of the copies of the
supplemented or amended prospectus contemplated by paragraph (e)
of this Section 2.4 and, if so directed by the Company, will
deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such Stockholder's
possession of the prospectus covering such Eligible Shares that
was in effect at the time of receipt of such notice. In the
event the Company shall give any such notice, the applicable
period mentioned in paragraph (b) of this Section 2.4 shall be
extended by the number of days during such period from and
including the date of the giving of such notice to and including
the date when each seller of any Eligible Shares covered by such
registration statement shall have received the copies of the
supplemented or amended prospectus contemplated by paragraph (e)
of this Section 2.4.
2.5. Registration Expenses.
All expenses incident to the Company's performance of
or compliance with this Article 2, including, without limitation,
all registration and filing fees (including all expenses incident
to filing with the New York Stock Exchange, the NASDAQ or any
other exchange), fees and expenses of complying with securities
and blue sky laws, printing and copying expenses, fees and
expenses of the Company's counsel and accountants, the fees and
disbursements of all independent public accountants (including
the expenses of any audit and/or "cold comfort" letter), and any
other fees and disbursements of underwriters, if any, customarily
paid by issuers or sellers of securities shall be paid by the
Company; provided, however, that all underwriting discounts and
selling commissions applicable to Eligible Shares and fees and
disbursements of counsel for the sellers of Eligible Shares shall
be borne by the seller or sellers thereof, in proportion to the
number of Eligible Shares sold by such seller or sellers.
2.6. Certain Limitations on Registration Rights.
In the case of any registration under Section 2.1
pursuant to an underwritten offering, or in the case of a
registration under Section 2.2 if the Company has determined to
enter into an underwriting agreement in connection therewith, all
securities to be included in such registration shall be subject
to an underwriting agreement and no Person may participate in
such registration unless such Person agrees to sell such Person's
securities on the basis provided therein and completes and
executes all reasonable questionnaires and other documents
(including custody agreements and powers of attorney) which must
be executed in connection therewith, and provides such other
information to the Company or the underwriter as may be necessary
to register such Person's securities.
2.7. Limitations on Sale or Distribution of Other
Securities.
The Company agrees not to effect any public sale or
distribution (other than public sales or distributions solely by
and for the account of the Company of securities issued (x)
pursuant to any employee or director benefit or similar plan or
any dividend reinvestment plan or (y) in any acquisition by the
Company) of any shares of Common Stock, or any securities
convertible into or exchangeable or exercisable for shares of
Common Stock, during the 14-day period prior to, and during the
30-day period beginning on the later of, (i) the effective date
of the registration statement in connection with a registration
requested pursuant to Section 2.1 hereof or (ii) if applicable,
the commencement of an underwritten offering in connection with a
registration requested pursuant to Section 2.1 hereof, in each
case, if requested by the managing underwriters of such
underwritten offering, or for such shorter period as the Lead
Underwriter shall request, in any such case, unless consented to
by such underwriters.
2.8. No Required Sale.
Nothing in this Agreement shall be deemed to create an
independent obligation on the part of the Stockholders to sell
any Eligible Shares pursuant to any effective registration
statement.
2.9. Indemnification.
(a) In the event of any registration of any securities
of the Company under the Securities Act pursuant to this Article
2, the Company will, and hereby does, indemnify and hold
harmless, to the fullest extent permitted by law, each seller of
Eligible Shares, and each other Person, if any, who controls such
seller within the meaning of the Securities Act, against any and
all losses, claims, damages or liabilities, joint or several,
actions or proceedings (whether commenced or threatened) in
respect thereof ("Claims") and expenses to which each such
indemnified party may become subject under the Securities Act or
otherwise, insofar as such Claims or expenses arise out of or are
based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in any registration statement,
together with the documents incorporated by reference therein,
under which such securities were registered under the Securities
Act or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) any untrue statement
or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus or any amendment or
supplement thereto, together with the documents incorporated by
reference therein, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
or (iii) any violation by the Company of any federal, state or
common law, rule or regulation applicable to the Company and
relating to action required of or inaction by the Company in
connection with any such registration; provided, however, that
the Company shall not be liable to any such indemnified party in
any such case to the extent such Claim or expense arises out of
or is based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material
fact made in such registration statement or amendment thereof or
supplement thereto or in any such prospectus or any preliminary,
final or summary prospectus in reliance upon and in conformity
with written information furnished to the Company by or on behalf
of such indemnified party specifically for use therein.
(b) Each Stockholder that holds Eligible Shares that
are included in the securities as to which any registration under
Section 2.1 or 2.2 is being effected (and, if the Company
requires as a condition to including any Eligible Shares in any
registration statement filed in accordance with Section 2.1 or
2.2, any underwriter) shall, severally and not jointly, indemnify
and hold harmless (in the same manner and to the same extent as
set forth in paragraph (a) of this Section 2.9) to the extent
permitted by law the Company, its officers and directors, each
Person controlling the Company within the meaning of the
Securities Act and all other prospective sellers and their
directors and officers, and respective controlling Persons with
respect to any untrue statement or alleged untrue statement of
any material fact in, or omission or alleged omission of any
material fact from, such registration statement, any preliminary,
final or summary prospectus contained therein, or any amendment
or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or
its representatives by or on behalf of such Stockholder (or
underwriter with respect to information provided by such
underwriter), specifically for use therein and reimburse such
indemnified party for any legal or other expenses reasonably
incurred in connection with investigating or defending any such
Claim as such expenses are incurred; provided, however, that the
aggregate amount which any such seller of Eligible Shares shall
be required to pay pursuant to this Section 2.9(b) and Sections
2.9(c) and (e) shall in no case be greater than the amount of the
net proceeds received by such person upon the sale of Eligible
Shares pursuant to the registration statement giving rise to such
claim. Such indemnity and reimbursement of expenses shall remain
in full force and effect regardless of any investigation made by
or on behalf of such indemnified party and shall survive the
transfer of such securities by such seller of Eligible Shares.
(c) Indemnification similar to that specified in the
preceding paragraphs (a) and (b) of this Section 2.9 (with
appropriate modifications) shall be given by the Company and each
seller of Eligible Shares with respect to any required
registration or other qualification of securities under any state
securities and "blue sky" laws.
(d) Any person entitled to indemnification under this
Agreement shall notify promptly the indemnifying party in writing
of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to this
Section 2.9, but the failure of any indemnified party to provide
such notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 2.9,
except to the extent the indemnifying party is materially
prejudiced thereby and shall not relieve the indemnifying party
from any liability which it may have to any indemnified party
otherwise than under this Article 2. In case any action or
proceeding is brought against an indemnified party and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and,
unless in the reasonable opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, to
assume the defense thereof jointly with any other indemnifying
party similarly notified, to the extent that it chooses, with
counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified
party that it so chooses, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of
investigation; provided, however, that (i) if the indemnifying
party fails to take reasonable steps necessary to defend
diligently the action or proceeding within 20 days after
receiving notice from such indemnified party that the indemnified
party believes it has failed to do so; or (ii) if such
indemnified party who is a defendant in any action or proceeding
which is also brought against the indemnifying party reasonably
shall have concluded that there may be one or more legal defenses
available to such indemnified party which are not available to
the indemnifying party; or (iii) if representation of both
parties by the same counsel is otherwise inappropriate under
applicable standards of professional conduct, then, in any such
case, the indemnified party shall have the right to assume or
continue its own defense as set forth above (but with no more
than one firm of counsel for all indemnified parties in each
jurisdiction, except to the extent any indemnified party or
parties reasonably shall have concluded that there may be legal
defenses available to such party or parties which are not
available to the other indemnified parties or to the extent
representation of all indemnified parties by the same counsel is
otherwise inappropriate under applicable standards of
professional conduct) and the indemnifying party shall be liable
for any expenses therefor. No indemnifying party shall, without
the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such
settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out
of such action or claim and (B) does not include a statement as
to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is
unavailable or is insufficient to hold harmless an indemnified
party under Sections 2.9(a), (b) or (c), then each indemnifying
party shall contribute to the amount paid or payable by such
indemnified party as a result of any Claim in such proportion as
is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and the indemnified party, on the other
hand, with respect to such offering of securities. The relative
fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
untrue statement or omission. If, however, the allocation
provided in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative
faults but also the relative benefits of the indemnifying party
and the indemnified party as well as any other relevant equitable
considerations. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section
2.9(e) were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the
equitable considerations referred to in the preceding sentences
of this Section 2.9(e). The amount paid or payable in respect of
any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
Notwithstanding anything in this Section 2.9(e) to the contrary,
no indemnifying party (other than the Company) shall be required
pursuant to this Section 2.9(e) to contribute any amount in
excess of the net proceeds received by such indemnifying party
from the sale of Eligible Shares in the offering to which the
losses, claims, damages or liabilities of the indemnified parties
relate, less the amount of any indemnification payment made by
such indemnifying party pursuant to Sections 2.9(b) and (c).
(f) The indemnity agreements contained herein shall be
in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law
or contract and shall remain operative and in full force and
effect regardless of any investigation made or omitted by or on
behalf of any indemnified party and shall survive the transfer of
Eligible Shares by any such party.
(g) The indemnification and contribution required by
this Section 2.9 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is
incurred.
(h) In connection with underwritten offerings, the
Company will use its best efforts to negotiate terms of
indemnification that are reasonably favorable to the various
sellers pursuant thereto, as appropriate under the circumstances.
3. Underwritten Offerings.
3.1. Requested Underwritten Offerings.
If requested by the Stockholders or underwriters for
any underwritten offering pursuant to a Demand Registration
Request, the Company shall enter into a customary underwriting
agreement with the underwriters. Such underwriting agreement
shall be satisfactory in form and substance to the Stockholders
and shall contain such representations and warranties by, and
such other agreements on the part of, the Company and such other
terms as are generally prevailing in agreements of that type,
including, without limitation, indemnities and contribution
agreements. Any Stockholders participating in the offering shall
be a party to such underwriting agreement and may, at its option,
require that any or all of the representations and warranties to
any Stockholders with respect to written information specifically
provided by such Stockholders by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters
shall also be made to and for the benefit of such Stockholders
and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such
Stockholders; provided, however, that the Company shall not be
required to make any representations or warranties with respect
to written information specifically provided by a Stockholder for
inclusion in the registration statement. Such underwriting
agreement shall also contain such representations and warranties
by the Stockholders as are customary in agreements of that type.
3.2. Piggyback Underwritten Offerings.
In the case of a registration pursuant to Section 2.2
hereof, if the Company shall have determined to enter into an
underwriting agreement in connection therewith, all of the
Stockholders' Eligible Shares to be included in such registration
shall be subject to such underwriting agreement. Any Stockholder
participating in such registration may, at its option, require
that any or all of the representations and warranties by, and the
other agreements on the part of, the Company to and for the
benefit of such underwriters shall also be made to and for the
benefit of such Stockholder and that any or all of the conditions
precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations
of such Stockholder. Such underwriting agreement shall also
contain such representations and warranties by the participating
Stockholders as are customary in agreements of that type.
4. General.
4.1. Recapitalizations, Exchanges, etc., Affecting Eligible
Shares.
The provisions of this Agreement shall, to the extent
reasonably practicable, apply, to the full extent set forth
herein with respect to Eligible Shares, to any and all securities
or capital stock (of the Company or any successor to the Company
and/or any other issuer thereof) which may be issued in respect
of, in exchange for, or in substitution of such Eligible Shares,
by reason of, and shall be appropriately adjusted to reflect, any
stock dividend, stock split, reverse stock split, combination,
recapitalization, reclassification, merger, consolidation or
otherwise. The adjustments contemplated by this paragraph shall
be made cumulative with respect to all such transactions
contemplated by this Section that occur from time to time. Any
issuer of any such securities other than the Company shall be
required to assume in writing, to the extent relevant, the
Company's obligations with respect to the registration rights
granted hereunder or enter into a registration rights agreement
substantially similar to this Agreement and giving effect to the
allocations and adjustments contemplated by this Section, in
connection with any such transaction pursuant to which the
Stockholders shall receive securities of such issuer, as
contemplated by this Section.
4.2. Rule 144.
The Company covenants that (i) so long as it remains
subject to the reporting provisions of the Exchange Act, it will
timely file the reports required to be filed by it under the
Securities Act or the Exchange Act (including, but not limited
to, the reports under Sections 13 and 15(d) of the Exchange Act
referred to in subparagraph (c)(1) of Rule 144 under the
Securities Act), and (ii) will take such further action as any
Stockholders may reasonably request, all to the extent required
from time to time to enable such Stockholders to sell Eligible
Shares without registration under the Securities Act within the
limitation of the exemptions provided by (A) Rules 144 and 145
under the Securities Act, as such Rules may be amended from time
to time, or (B) any similar rule or regulation hereafter adopted
by the Commission. Upon the request of any Stockholders, the
Company will deliver to such Stockholders a written statement as
to whether it has complied with such requirements.
4.3. Nominees for Beneficial Owners.
If Eligible Shares are held by a nominee for the
beneficial owner thereof, the beneficial owner thereof may, at
its option, be treated as the holder of such Eligible Shares for
purposes of any request or other action by any Stockholders
pursuant to this Agreement (or any determination of any number or
percentage of shares constituting Eligible Shares held by any
Stockholders contemplated by this Agreement), provided that the
Company shall have received assurances reasonably satisfactory to
it of such beneficial ownership.
4.4. Amendments and Waivers.
This Agreement may be amended, modified, supplemented
or waived only upon the written agreement of the Company and the
Stockholders holding at least a majority of Eligible Shares then
held by all Stockholders.
4.5. Notices.
Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission and
by courier service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-
class postage prepaid), addressed as follows:
(i) if to the Company
11440 Commerce Park Drive
Reston, Virginia 22091
Attention: Jack M. Mazur
Facsimile: (703) 758-7259
with a copy (which shall not constitute notice) to:
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue, N.W.
Suite 800
Washington, D.C. 20004
Attention: Richard A. Steinwurtzel
Facsimile: (202) 639-7003
(ii) if to any of the Stockholders
Charles H. Robbins
11440 Commerce Park Drive
Reston, Virginia 20192
with a copy (which shall not constitute notice) to:
Tucker, Flyer & Lewis
1615 L Street, N.W.
Suite 400
Washington, D.C. 20036
Attention: Stefan F. Tucker
Facsimile: (202) 429-3231
or to such other address as any party shall specify by written
notice so given, and such notice shall be deemed to have been
delivered as of the date so telecommunicated, personally
delivered or mailed.
4.6. Miscellaneous.
(a) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and the respective successors,
personal representatives and assigns; provided, however, that the
Stockholders may not assign any registration rights under this
Agreement to a third party. No Person other than the
Stockholders or its affiliates shall be entitled to any benefits
under this Agreement, except as otherwise expressly provided
herein.
(b) This Agreement and any documents delivered by the
parties in connection herewith constitute the entire agreement
among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of
any provision of this Agreement shall be binding upon any party
hereto unless made in writing and signed by all parties hereto.
(c) This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without
regard to its rules of conflict of laws. Each of the parties
hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Delaware and
of the United States of America located in the State of Delaware
(the "Delaware Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating
thereto except in such courts), waives any objection to the
laying of venue of any such litigation in the Delaware Courts and
agrees not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient
forum.
(d) The headings of this Agreement are for the
convenience of the parties only, and shall be given no
substantive or interpretative effect whatsoever.
(e) This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts
shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof each signed
by less than all, but together signed by all of the parties
hereto.
(f) Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
(g) The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific
terms or was otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any Delaware Court, this being
in addition to any other remedy to which they are entitled at law
or in equity.
(h) Each party hereto shall do and perform or cause to
be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates,
instruments, and documents as any other party hereto reasonably
may request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(i) In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall
include all genders and words denoting natural persons shall
include corporations and partnerships and vice versa.
(j) Except as provided in this Agreement, no action
taken pursuant to this Agreement, including, without limitation,
any investigation by or on behalf of any party, shall be deemed
to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or
agreements contained in this Agreement. The waiver by any party
hereto of a breach of any provision hereunder shall not operate
or be construed as a waiver of any prior or subsequent breach of
the same or any other provision hereunder.
4.7. No Inconsistent Agreements.
Neither the Company nor any Stockholder will, on or
after the date of this Agreement, enter into any agreement with
respect to its securities which is inconsistent with the rights
granted in this Agreement or otherwise conflicts with the
provisions hereof, other than any lock-up agreement with the
underwriters in connection with any registered offering effected
hereunder, pursuant to which the Company shall agree not to
register for sale, and the Company shall agree not to sell or
otherwise dispose of, Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, for a
specified period following the registered offering.
Notwithstanding the foregoing, the Company may grant registration
rights to future stockholders in future registration rights
agreements.
4.8. Termination.
This Agreement shall terminate on February 28, 1999;
provided, however, that if the Company, in violation of this
Agreement, fails to effectuate a Demand Registration for which a
Demand Registration Notice was timely delivered to the Company,
the Company shall continue to be required to effectuate such
Demand Registration and maintain its effectiveness until the
earlier of (x) the Eligible Shares thereunder are sold in
accordance with the method of distribution or (y) one year from
the date of such effectiveness.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
PHP HEALTHCARE CORPORATION
By: /s/ Anthony M. Picini
Name: Anthony M. Picini
Title: Executive V.P. & C.F.O.
/s/ Charles H. Robbins
CHARLES H. ROBBINS
/s/ Ellen E. Robbins
ELLEN E. ROBBINS
/s/ Ellen E. Robbins
ELLEN E. ROBBINS,
Trustee Under Trust Indenture
dated October 1, 1985
FBO Caroline H. Robbins,
Charles H. Robbins, Grantor
/s/ Ellen E. Robbins
ELLEN E. ROBBINS,
Trustee Under Trustee Indenture
dated October 1, 1985,
FBO Lee S. Robbins,
Charles H. Robbins, Grantor
/s/ Charles B. Robbins
CHARLES B. ROBBINS
