<PAGE> 1
As filed with the Securities and Exchange Commission on July 23, 1997
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________
HEALTHCARE COMPARE CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3307583
(State of Incorporation) (IRS Employer Identification No.)
3200 HIGHLAND AVENUE, DOWNERS GROVE, ILLINOIS 60515
(Address of principal executive offices) (Zip Code)
HEALTHCARE COMPARE CORP. STOCK OPTION AGREEMENTS
WITH JAMES C. SMITH
(Full title of the plan)
WILLIAM M. HOLZMAN, ESQ.
NEAL, GERBER & EISENBERG
2 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602
(Name and address of agent for service)
(312) 269-8000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed
Maximum Amount of
Title of Securities Aggregate Registration
To be Registered Offering Price Fee
- ------------------- --------- ------------
Common Stock,
par value $.01
per share $18,220,000(1) $5,522
================================================================================
(1) Calculated pursuant to Rule 457(h)(1) under the Securities Act of 1933,
as amended.
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PART I
NOT APPLICABLE TO DOCUMENT
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated in this Registration Statement
by reference:
1. The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1997.
3. The description of the Registrant's Common Stock set forth under
the caption "Description of Registrant's Securities to be
Registered" in the Company's Registration Statement on Form 8-A (No.
0-15846) filed pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and any reports or amendments to the
foregoing filed with the Commission for the purpose of updating such
description.
4. All documents filed by the Registrant pursuant to Sections 13, 14
or 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and before the Registrant files a
post-effective amendment which indicates that all shares of Common
Stock being offered hereby have been sold or which deregisters all
shares of Common Stock then remaining unsold.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Burton W. Kanter, a director of the Company and the Chairman of the
Company's Audit Committee, is of counsel to the law firm of Neal, Gerber &
Eisenberg, Chicago, Illinois, which firm performs legal services for the
Company on a regular basis and is passing on certain legal matters relating to
the Common Stock being registered hereby. In addition, William M. Holzman, a
partner of Neal, Gerber
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& Eisenberg, is an Assistant Secretary of the Company. Certain partners of and
other attorneys associated with Neal, Gerber & Eisenberg own shares of Common
Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law empowers the Company
to indemnify officers and directors in certain instances. Article Seventh,
Section 2 of the Restated Certificate of Incorporation of the Company provides
as follows: "The directors, as well as the officers, employees and agents of
the Company shall be indemnified by the Company to the fullest extent permitted
by the Delaware General Corporation Law as the same exists or may hereafter be
amended." As a consequence, directors of the Company will be insulated for
liability for monetary damages for breach of fiduciary duty as a director,
including monetary liabilities for negligent or grossly negligent business
decisions, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for the payment of unlawful dividends or unlawful stock repurchases
or redemptions, or (iv) for transactions in which the director received an
improper personal benefit. The exculpation provided with respect to liability
by the foregoing is effective for actions taken after April 16, 1987.
The By-Laws of the Company contain provisions whereby the Company will
indemnify its directors, officers, employees and agents against liabilities
incurred in connection with, and related expenses resulting from, any claim,
action or suit brought against such persons as a result of their relationship
with the Company, provided that it is determined that such persons acted in
accordance with a stated standard of conduct in connection with the acts or
events upon which such claim, action or suit is based. Such determination will
be made either by a quorum of disinterested directors, if available, or by
independent legal counsel in a written opinion, or by the vote of the Company's
stockholders. The finding of either criminal or civil liability on the part of
such persons in connection with such acts or events is not necessarily
determinative of the question of whether such persons have met the required
standard of conduct and are, accordingly, entitled to be indemnified.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
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The Registrant has purchased for the benefit of its officers and directors
an insurance policy, whereby the insurance company agrees, among other things,
to make payment to the Company in the event any such officer or director
becomes legally obligated to make a payment in connection with an alleged
wrongful act. Wrongful acts means any breach of duty, neglect, error,
misstatement, misleading statement, omission or other act done or wrongfully
attempted by an officer or director of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
Exhibit
Number Description of Document Page No.
- ------ ----------------------- --------
4.1 HealthCare COMPARE Corp. Stock
Option Agreement dated as of
January 1, 1997 by and between
the Company and James C. Smith........
4.2 HealthCare COMPARE Corp. Stock
Option Agreement, dated as of
January 1, 1997 by and between
the Company and James C. Smith........
5 Opinion of Neal, Gerber &
Eisenberg.............................
23.1 Consent of Deloitte & Touche LLP......
23.2 Consent of Neal, Gerber &
Eisenberg (included in Exhibit 5
to this Registration Statement)
24 Powers of Attorney (on signature
page of Registration Statement)
ITEM 9. UNDERTAKINGS
The undersigned hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any
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<PAGE> 5
material change to such information in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each post-effective amendment to
this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
4. That, for purposes of determining any liability under the Securities
Act of 1933, as amended, each filing of the Registrant's annual
report pursuant to Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, that is incorporated by reference
in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Downers Grove, State of Illinois, on the 22nd
day of July, 1997.
HEALTHCARE COMPARE CORP.
(REGISTRANT)
By: /s/ Joseph E. Whitters
----------------------------
Joseph E. Whitters,
Chief Financial Officer
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Each person whose signature appears below hereby constitutes and appoints
Joseph E. Whitters, Ronald H. Galowich and William M. Holzman, and each of
them, the true and lawful attorneys-in-fact and agents of the undersigned, with
full power of substitution and resubstitution, for and in the name, place and
stead of the undersigned and to file the same, with all exhibits thereto, in
any and all capabilities, to sign any and all amendments and any registration
statement filed pursuant to Rule 462(b) of the Securities Act of 1933, as
amended (including post-effective amendments thereto and other documents in
connection therewith), with the Securities and Exchange Commission, and hereby
grants to such attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 22nd day of July, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Thomas J. Pritzker Chairman of the Board and Director
- ------------------------
Thomas J. Pritzker
/s/ James C. Smith President, Chief Executive Officer
- ------------------------ and Director (Principal Executive
James C. Smith Officer)
/s/ Joseph E. Whitters Vice President, Finance, Chief
- ------------------------ Financial Officer and Treasurer
Joseph E. Whitters (Principal Accounting and Principal
Financial Officer)
Director
- ------------------------
Robert J. Becker, M.D.
/s/ Michael J. Boskin Director
- ------------------------
Michael J. Boskin, Ph.D.
/s/ Daniel Brunner Director
- ------------------------
Daniel Brunner
/s/ Ronald H. Galowich Director
- ------------------------
Ronald H. Galowich
</TABLE>
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<TABLE>
<S> <C>
/s/ Harold S. Handelsman Director
- ------------------------
Harold S. Handelsman
/s/ Burton W. Kanter Director
- ------------------------
Burton W. Kanter
/s/ Don Logan Director
- ------------------------
Don Logan
/s/ Robert S. Colman Director
- ------------------------
Robert S. Colman
/s/ David Simon Director
- ------------------------
David Simon
</TABLE>
By: /s/ Joseph E. Whitters
----------------------
Joseph E. Whitters,
Attorney-in-fact
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<PAGE> 1
Exhibit 4.1
HEALTHCARE COMPARE CORP.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of January,
1997, by and between HEALTHCARE COMPARE CORP., a Delaware corporation (the
"Company"), and JAMES C. SMITH (the "Employee").
WHEREAS, the Employee is a valued employee of the Company and the Company
wishes to induce him to enter into an employment agreement dated as of January
1, 1997 (the "Employment Agreement") and to encourage him in the performance of
his duties thereunder by granting him an option to purchase shares of common
stock, $.01 par value, of the Company (the "Common Stock"); and
WHEREAS, the Employee wishes to acquire the right to purchase shares of
Common Stock.
NOW, THEREFORE, for good and valuable consideration, the parties hereto,
intending to be legally bound, hereby agrees as follows:
1. Grant of Option; Exercise Price. Subject to the provisions of Section
2 hereof, the Company hereby grants to the Employee effective as of the date
hereof the right, privilege and option to purchase on the terms and conditions
hereinafter set forth up to 200,000 shares of Common Stock at a purchase price
of $44.49 per share (the "Option"). The Option is intended to be an "Incentive
Stock Option" as defined in and subject to the provisions of Section 422A of
the Internal Revenue Code of 1986, as amended (the "Code"), to the extent
permitted by the Code, and a nonstatutory option with respect to the balance.
2. Time for Exercise of Option. Subject to the provisions of paragraphs 3
and 8 hereof, the Option may be exercised by the Employee from time to time, in
whole or in part, beginning on December 31, 1998 and ending on March 31, 1999
or within such shorter period as is provided in paragraph 3 hereof.
3. Termination of Employment.
(a) If the Employee's employment by the Company is terminated by the
Company without cause, then, notwithstanding the provisions of paragraph 2 of
this Agreement, upon such termination of employment, the Option shall become
exercisable in full and the Employee may, for a period of 90 days following
such termination (but before expiration of the original exercise period),
exercise the Option in whole or in part.
(b) If (i) the Employee's employment by the Company is terminated due to
the death or Incapacity (as defined in the Employment Agreement) of the
Employee and (ii) pursuant to paragraph 2 hereof the Option has theretofore
vested or is scheduled to vest within 90 days
<PAGE> 2
following the date of such termination of employment, the Employee or his
legal representative may, for a period of 90 days following such termination
(but before expiration of the original exercise period), exercise the Option,
in whole or in part.
(c) If (i) the Employee's employment by the Company is terminated
voluntarily by the Employee and (ii) pursuant to paragraph 2 hereof the Option
has theretofore vested, the Employee may, for a period of 30 days after the
date of termination (but before expiration of the original exercise period),
exercise the Option, in whole or in part.
(d) If the Employee's employment by the Company is terminated by the
Company for cause (as such term is defined in the Employment Agreement), the
Option shall terminate on the date on which the Employee's employment is
terminated, and the Employee shall have no further rights hereunder.
(e) The Employee acknowledges and understands that certain exercises of
the Option pursuant to this paragraph 3 may cause disqualification of the
Option as an Incentive Stock Option.
4. Method of Exercise. The Option may be exercised by written notice (the
"Notice"), addressed and delivered to the Company (Attention: Chief Financial
Officer), specifying the number of shares of Common Stock to be purchased and
accompanied by (i) a check, or (ii) that number of shares of Common Stock which
have an aggregate fair market value as of the date of exercise equal to the
exercise price, or (iii) any combination thereof. For purposes of this
Agreement, "fair market value" of a share of Common Stock shall mean: (i) if
the Common Stock is traded on a national stock exchange on the date of exercise
of the Option, fair market value shall be the closing price reported by the
applicable composite transactions report on such day, or if the Common Stock is
not traded on such date, the mean between the closing bid-and-asked prices
thereof on that date on such exchange; (ii) if the Common Stock is traded
over-the-counter and is classified as a national market issue on the date of
exercise of the Option, fair market value shall be the last reported
transaction price quoted by the NASDAQ on that day; (iii) if the Common Stock
is traded over-the-counter and is not classified as a national market issue on
the date of exercise of the Option, fair market value shall be the mean between
the last representative bid-and-asked prices quoted by the NASDAQ on that day;
or (iv) if none of the foregoing provisions is applicable, fair market value as
of the date of exercise of the Option shall be determined by the Board of
Directors in good faith on such basis as it deems appropriate. In all cases,
the determination of fair market value shall be binding and conclusive on all
persons.
5. Delivery of Stock Certificates. The Option shall be deemed to have
been exercised upon receipt by the Company of the Notice accompanied by the
exercise price (the "Exercise Date"). The certificate representing the shares
of Common Stock purchased upon exercise of the Option shall be issued as of the
Exercise Date and delivered by the Company to the Employee free and clear of
all claims, liens and encumbrances, within five days following the Exercise
Date or as soon thereafter as practicable. As a condition to the exercise of
the
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<PAGE> 3
Option, the Company may require the Employee to represent and warrant at the
time of any such exercise that the shares of Common Stock are being purchased
for investment purposes only, for the account of the Employee and without any
intention to distribute such shares. If the shares of Common Stock issuable
upon exercise of the Option have not previously been registered under the
Securities Act of 1933, as amended, each certificate evidencing shares of
Common Stock acquired upon exercise of the Option shall contain on its face, or
on the reverse side thereof, the following legend:
"These shares have not been registered under the Securities Act of
1933 or under any applicable state law. They may not be offered
for sale, sold, transferred, or pledged without (1) registration
under the Securities Act of 1933 and any applicable state law, or
(2) an opinion (satisfactory to the corporation) that registration
is not required."
6. Registration of Shares Subject to the Option. On or before December
31, 1998, the Company will use its best efforts to:
(i) prepare and file with the Securities and Exchange
Commission ("SEC") a registration statement with respect to the
shares of Common Stock issuable upon exercise of the Option and
use its best efforts to cause such registration statement to
become effective under the Securities Act;
(ii) prepare and file with the SEC 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 until the earlier to occur of (A)
the expiration of the Option or (B) the exercise of the Option in
whole.
7. Adjustment Provisions. If, during the term of this Agreement, there
shall be any stock dividend, stock rights distribution, stock split,
recapitalization, merger, consolidation, sale of assets, reorganization or
other similar change or transaction of or by the Company, an appropriate
adjustment shall be made to the number and kind of shares remaining to be
acquired upon exercise of the Option and to the exercise price of the Option so
that the value to be received by the Employee upon exercise of the Option
shall, in the aggregate, be the same as if none of the foregoing transactions
had occurred.
8. Merger, Consolidation or Sale of Assets. In the event the Company
enters into an agreement providing for (i) the sale of all or substantially all
of the assets of the Company or (ii) a merger, consolidation or reorganization
which would result in the stockholders of the Company immediately prior to such
transaction owning less than 50% of the surviving corporation, the Option shall
become exercisable in full without regard to any vesting limitations, and the
Employee shall be entitled, commencing at least ten days prior to the effective
date of such transaction, to exercise the Option in whole or in part, to the
extent not previously exercised.
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<PAGE> 4
9. Withholding Obligations. In the event that the Company is required to
satisfy withholding obligations under the Code as a result of the exercise of
the Option, the Employee may request that, in lieu of withholding amounts from
the Employee's paycheck or requiring that the Employee deliver a check in the
amount of the withholding obligation, the Company withhold that number of
shares of Common Stock which have a fair market value (determined in accordance
with the provisions of paragraph 5 hereof) on the Exercise Date equal to the
amount required to be withheld.
10. Non-Transferability. The Option is not transferable or assignable by
the Employee other than by will or by the laws of descent and distribution and
are exercisable during the lifetime of the Employee only by the Employee.
11. Compliance with Law. By accepting the Option, the Employee agrees for
himself and his legal representative that the Company shall not be required to
deliver any shares of Common Stock upon the exercise of the Option until such
shares have been qualified for delivery under applicable securities laws and
regulations as determined by the Company or its legal counsel.
12. Rights as a Stockholder; Not an Employment Agreement. The Employee
shall have no rights as a stockholder of the Company with respect to shares of
Common Stock subject to the Option until the Option has been exercised and
payment made as herein provided and certificates representing the shares as to
which the Option has been exercised have been delivered to the Employee.
Nothing contained in this Agreement shall be construed to be a contract of
employment between the Company and the Employee.
13. Construction.
(a) Successors. This Agreement and all the terms and provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs and successors, except as
expressly herein otherwise provided.
(b) Entire Agreement; Modification. This Agreement contains the entire
understanding between the parties with respect to the matters referred to
herein and such agreement shall not be modified, except by written instrument
signed by the parties hereto.
(c) Headings; Pronouns; Governing Law. The descriptive headings of the
respective sections and subsections of this Agreement are inserted for
convenience of reference only and shall not be deemed to modify or construe the
provisions which follow them. Any use of any masculine pronoun shall include
the feminine and vice-versa and any use of a singular, the plural and
vice-versa, as the context and facts may require. The construction and
interpretation of this Agreement shall be governed in all respects by the laws
of the State of Delaware.
(d) Notices. All communications between the parties shall be in writing
and shall be deemed to have been duly given as of the date and time of hand
delivery or three days after
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<PAGE> 5
mailing via certified or registered mail, return receipt requested, proper
postage prepaid to the following or such other addresses of which the parties
shall from time to time notify one another:
If to the Company: HealthCare COMPARE Corp.
3200 Highland Avenue
Downers Grove, Illinois 60515
If to the Employee: James C. Smith
HealthCare COMPARE Corp.
3200 Highland Avenue
Downers Grove, Illinois 60515
(e) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the minimal extent of
such provision or the remaining provisions of this Agreement or the application
of such provision to other parties or circumstances.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as of the date first above written.
HEALTHCARE COMPARE CORP.
By: /s/ Thomas J. Pritzker
-------------------------------
Chairman of the Board
EMPLOYEE:
/s/ James C. Smith
----------------------------------
JAMES C. SMITH
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<PAGE> 1
Exhibit 4.2
HEALTHCARE COMPARE CORP.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of January,
1997, by and between HEALTHCARE COMPARE CORP., a Delaware corporation (the
"Company"), and JAMES C. SMITH (the "Employee").
WHEREAS, the Employee is a valued employee of the Company and the Company
wishes to induce him to enter into an employment agreement dated as of January
1, 1997 (the "Employment Agreement") and to encourage him in the performance of
his duties thereunder by granting him an option to purchase shares of common
stock, $.01 par value, of the Company (the "Common Stock"); and
WHEREAS, the Employee wishes to acquire the right to purchase shares of
Common Stock.
NOW, THEREFORE, for good and valuable consideration, the parties hereto,
intending to be legally bound, hereby agrees as follows:
1. Grant of Option. Subject to the provisions of Section 2 hereof, the
Company hereby grants to the Employee effective as of the date hereof the
right, privilege and option to purchase on the terms and conditions hereinafter
set forth up to 200,000 shares of Common Stock at an exercise price of $46.61
per share (the "Option"). The Option is intended to be an "Incentive Stock
Option" as defined in and subject to the provisions of Section 422A of the
Internal Revenue Code of 1986, as amended (the "Code"), to the extent permitted
by the Code, and a nonstatutory option with respect to the balance.
2. Time for Exercise of Option. Subject to the provisions of paragraphs 3
and 8 hereof, the Option may be exercised by the Employee from time to time, in
whole or in part, beginning on December 31, 1999 and ending on March 31, 2000,
or within such shorter period as is provided in paragraph 3 hereof.
3. Termination of Employment.
(a) If the Employee's employment by the Company is terminated by the
Company without cause, then, notwithstanding the provisions of paragraph 2 of
this Agreement, upon such termination of employment, the Option shall become
exercisable in full and the Employee may, for a period of 90 days following
such termination (but before expiration of the original exercise period),
exercise the Option in whole or in part.
(b) If (i) the Employee's employment by the Company is terminated due to
the death or Incapacity (as defined in the Employment Agreement) of the
Employee and (ii) pursuant to paragraph 2 hereof the Option has theretofore
vested or is scheduled to vest within 90 days following the date of such
termination of employment, the Employee or his legal representative may, for a
period of 90 days
<PAGE> 2
following such termination (but before expiration of the original exercise
period), exercise the Option, in whole or in part.
(c) If (i) the Employee's employment by the Company is terminated
voluntarily by the Employee and (ii) pursuant to paragraph 2 hereof the Option
has theretofore vested, the Employee may, for a period of 30 days after the
date of termination (but before expiration of the original exercise period),
exercise the Option, in whole or in part.
(d) If the Employee's employment by the Company is terminated by the
Company for cause (as such term is defined in the Employment Agreement), the
Option shall terminate on the date on which the Employee's employment is
terminated, and the Employee shall have no further rights hereunder.
(e) The Employee acknowledges and understands that certain exercises of
the Option pursuant to this paragraph 3 may cause disqualification of the
Option as an Incentive Stock Option.
4. Method of Exercise. The Option may be exercised by written notice (the
"Notice"), addressed and delivered to the Company (Attention: Chief Financial
Officer), specifying the number of shares of Common Stock to be purchased and
accompanied by (i) a check, or (ii) that number of shares of Common Stock which
have an aggregate fair market value as of the date of exercise equal to the
exercise price, or (iii) any combination thereof. For purposes of this
Agreement, "fair market value" of a share of Common Stock shall mean: (i) if
the Common Stock is traded on a national stock exchange on the date of exercise
of the Option, fair market value shall be the closing price reported by the
applicable composite transactions report on such day, or if the Common Stock is
not traded on such date, the mean between the closing bid-and-asked prices
thereof on that date on such exchange; (ii) if the Common Stock is traded
over-the-counter and is classified as a national market issue on the date of
exercise of the Option, fair market value shall be the last reported
transaction price quoted by the NASDAQ on that day; (iii) if the Common Stock
is traded over-the-counter and is not classified as a national market issue on
the date of exercise of the Option, fair market value shall be the mean between
the last representative bid-and-asked prices quoted by the NASDAQ on that day;
or (iv) if none of the foregoing provisions is applicable, fair market value as
of the date of exercise of the Option shall be determined by the Board of
Directors in good faith on such basis as it deems appropriate. In all cases,
the determination of fair market value shall be binding and conclusive on all
persons.
5. Delivery of Stock Certificates. The Option shall be deemed to have
been exercised upon receipt by the Company of the Notice accompanied by the
exercise price (the "Exercise Date"). The certificate representing the shares
of Common Stock purchased upon exercise of the Option shall be issued as of the
Exercise Date and delivered by the Company to the Employee free and clear of
all claims, liens and encumbrances, within five days following the Exercise
Date or as soon thereafter as practicable. As a condition to the exercise of
the
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<PAGE> 3
Option, the Company may require the Employee to represent and warrant at the
time of any such exercise that the shares of Common Stock are being purchased
for investment purposes only, for the account of the Employee and without any
intention to distribute such shares. If the shares of Common Stock issuable
upon exercise of the Option have not previously been registered under the
Securities Act of 1933, as amended (the "Securities Act") as contemplated by
this Agreement, each certificate evidencing shares of Common Stock acquired
upon exercise of the Option shall contain on its face, or on the reverse side
thereof, the following legend:
"These shares have not been registered under the Securities Act of
1933 or under any applicable state law. They may not be offered
for sale, sold, transferred, or pledged without (1) registration
under the Securities Act of 1933 and any applicable state law, or
(2) an opinion (satisfactory to the corporation) that registration
is not required."
6. Registration of Shares Subject to the Option. On or before December
31, 1999, the Company will use its best efforts to:
(i) prepare and file with the Securities and Exchange
Commission ("SEC") a registration statement with respect to the
shares of Common Stock issuable upon exercise of the Option and
use its best efforts to cause such registration statement to
become effective under the Securities Act;
(ii) prepare and file with the SEC 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 until the earlier to occur of (A)
the expiration of the Option or (B) the exercise of the Option in
whole.
7. Adjustment Provisions. If, during the term of this Agreement, there
shall be any stock dividend, stock rights distribution, stock split,
recapitalization, merger, consolidation, sale of assets, reorganization or
other similar change or transaction of or by the Company, an appropriate
adjustment shall be made to the number and kind of shares remaining to be
acquired upon exercise of the Option and to the exercise price of the Option so
that the value to be received by the Employee upon exercise of the Option
shall, in the aggregate, be the same as if none of the foregoing transactions
had occurred.
8. Merger, Consolidation or Sale of Assets. In the event the Company
enters into an agreement providing for (i) the sale of all or substantially all
of the assets of the Company or (ii) a merger, consolidation or reorganization
which would result in the stockholders of the Company immediately prior to such
transaction owning less than 50% of the surviving corporation, the Option shall
become exercisable in full without regard to any vesting limitations, and the
Employee shall be entitled, commencing at least ten days prior to the effective
date of such transaction, to exercise the Option in whole or in part, to the
extent not previously exercised.
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<PAGE> 4
9. Withholding Obligations. In the event that the Company is required
to satisfy certain withholding obligations under the Code as a result of the
exercise of the Option, the Employee may request that, in lieu of withholding
amounts from the Employee's paycheck or requiring that the Employee deliver a
check in the amount of the withholding obligation, the Company withhold that
number of shares of Common Stock which have a fair market value (determined in
accordance with the provisions of paragraph 5 hereof) on the Exercise Date
equal to the amount required to be withheld.
10. Non-Transferability. The Option is not transferable or assignable by
the Employee other than by will or by the laws of descent and distribution and
are exercisable during the lifetime of the Employee only by the Employee.
11. Compliance with Law. By accepting the Option, the Employee agrees
for himself and his legal representative that the Company shall not be required
to deliver any shares of Common Stock upon the exercise of the Option until such
shares have been qualified for delivery under applicable securities laws and
regulations as determined by the Company or its legal counsel.
12. Rights as a Stockholder; Not an Employment Agreement. The Employee
shall have no rights as a stockholder of the Company with respect to shares of
Common Stock subject to the Option until the Option has been exercised and
payment made as herein provided and certificates representing the shares as to
which the Option has been exercised have been delivered to the Employee.
Nothing contained in this Agreement shall be construed to be a contract of
employment between the Company and the Employee.
13. Construction.
(a) Successors. This Agreement and all the terms and provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs and successors, except as
expressly herein otherwise provided.
(b) Entire Agreement; Modification. This Agreement contains the entire
understanding between the parties with respect to the matters referred to
herein and such agreement shall not be modified, except by written instrument
signed by the parties hereto.
(c) Headings; Pronouns; Governing Law. The descriptive headings of the
respective sections and subsections of this Agreement are inserted for
convenience of reference only and shall not be deemed to modify or construe the
provisions which follow them. Any use of any masculine pronoun shall include
the feminine and vice-versa and any use of a singular, the plural and
vice-versa, as the context and facts may require. The construction and
interpretation of this Agreement shall be governed in all respects by the laws
of the State of Delaware.
(d) Notices. All communications between the parties shall be in writing
and shall be deemed to have been duly given as of the date and time of hand
delivery or three days after
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<PAGE> 5
mailing via certified or registered mail, return receipt requested, proper
postage prepaid to the following or such other addresses of which the parties
shall from time to time notify one another:
If to the Company: HealthCare COMPARE Corp.
3200 Highland Avenue
Downers Grove, Illinois 60515
If to the Employee: James C. Smith
HealthCare COMPARE Corp.
3200 Highland Avenue
Downers Grove, Illinois 60515
(e) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the minimal extent of
such provision or the remaining provisions of this Agreement or the application
of such provision to other parties or circumstances.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as of the date first above written.
HEALTHCARE COMPARE CORP.
/s/ Thomas J. Pritzker
By:
---------------------------------
Chairman of the Board
EMPLOYEE:
/s/ James C. Smith
---------------------------------
JAMES C. SMITH
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<PAGE> 1
Exhibit 5
July 22, 1997
HealthCare COMPARE Corp.
3200 Highland Avenue
Downers Grove, Illinois 60515
Re: HealthCare COMPARE Corp.
Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
We are counsel to HealthCare COMPARE Corp., a Delaware corporation (the
"Company"), and in such capacity we have assisted in the preparation and filing
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended (the "Act"), of the Company's Registration Statement on Form S-8
(the "Registration Statement") relating to the issuance pursuant to two
separate stock option agreements by and between the Company and James C. Smith
(collectively, the "Agreements") of up to an aggregate of 400,000 shares of
Common Stock, $.01 par value (the "Common Stock"), of the Company.
As such counsel, we have examined the Agreements, the Company's Restated
Certificate of Incorporation, as amended, and Amended and Restated By-Laws, the
minute books of the Company, and such other documents as we deemed relevant and
necessary as the basis for the opinions hereafter expressed. In such
examinations, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as conformed or
photostatic copies.
Based upon the foregoing, we are of the opinion that (i) the issuance by
the Company of up to an aggregate of 400,000 shares of Common Stock upon the
exercise of options granted under the Agreements has been duly and validly
authorized by all necessary corporate action on the part of the Company and
(ii) when issued and paid for as described in the Agreements, such shares will
be duly and validly issued and outstanding, fully paid and non-assessable
shares of Common Stock.
<PAGE> 2
HealthCare COMPARE Corp.
Page 2
July 22, 1997
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Interests of Named Experts and Counsel" in Item 5 of the Registration
Statement.
Please be advised that Burton W. Kanter, of counsel to our firm, is a
director of the Company and holds options to purchase shares of Common Stock.
William M. Holzman, a partner of our firm, is an Assistant Secretary of the
Company, and certain partners of our firm and attorneys associated with our
firm own shares of Common Stock.
Very truly yours,
/s/ Neal, Gerber & Eisenberg
-----------------------------
NEAL, GERBER & EISENBERG
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
HealthCare COMPARE Corp.
We consent to the incorporation by reference in this Registration
Statement of HealthCare COMPARE Corp. and subsidiaries on Form S-8 of our
reports dated February 17, 1997, appearing in and incorporated by reference in
the Annual Report on Form 10-K of HealthCare COMPARE Corp. and subsidiaries for
the year ended December 31, 1996.
DELOITTE & TOUCHE LLP
Chicago, Illinois
July 23, 1997
