<PAGE>
As filed with the Securities and Exchange Commission on December 29, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
AMERISOURCE HEALTH CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 23-2546940
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation of Organization)
P.O. Box 959
Valley Forge, PA 19482
(610) 296-4480
(Address of Principal Executive Offices)
AMERISOURCE HEALTH CORPORATION 1999 STOCK OPTION PLAN
AMERISOURCE HEALTH CORPORATION 1999 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
AMENDED AND RESTATED C.D. SMITH HEALTHCARE, INC. 1996 EQUITY COMPENSATION PLAN
(Full Title of the Plan)
WILLIAM D. SPRAGUE, ESQUIRE
AmeriSource Health Corporation
300 Chester Field Parkway
Malvern, PA 19355
(Name and Address of Agent For Service)
(610) 296-4480
(Telephone Number, Including Area Code, of Agent For Service)
-----------------------
Copy to:
JAMES W. McKENZIE, JR.
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103-2921
(215) 963-5000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================
Title Of Securities Proposed Maximum Proposed Maximum
To Be Amount To Be Offering Price Aggregate Amount Of
Registered Registered (1) Per Share (2) Offering Price (2) Registration Fee (3)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, 3,798,970 $12.90 $49,006,713.00 $13,623.87
par value $.01 per share
========================================================================================================
</TABLE>
(1) This registration statement covers shares of Class A Common Stock of
AmeriSource Health Corporation which may be offered or sold pursuant to the
Plans named above. This registration statement also relates to an
indeterminate number of shares of Common Stock that may be issued upon
stock splits, stock dividends or similar transactions in accordance with
Rule 416 under the Securities Act of 1933. 3,200,000 shares are being
registered in connection with the AmeriSource Health Corporation 1999 Stock
Option Plan. 350,000 shares are being registered in connection with the
AmeriSource Health Corporation 1999 Non-Employee-Directors Stock Option
Plan. 248,970 shares are being registered in connection with the Amended
and Restated C.D. Smith Healthcare, Inc. 1996 Equity Compensation Plan.
(2) Estimated pursuant to paragraphs (c) and (h) of Rule 457 solely for the
purpose of calculating the registration fee, based upon the average of the
reported high and low sales prices for a share of Class A Common Stock on
December 22, 1999, as reported on the New York Stock Exchange.
(3) Calculated pursuant to Section 6(b) as follows: proposed maximum aggregate
offering price multiplied by .000278.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, as filed by AmeriSource Health Corporation
(the "Registrant") with the U.S. Securities and Exchange Commission (the
"Commission"), are incorporated by reference in this Form S-8 Registration
Statement (the "Registration Statement") and made a part hereof:
(a) The Registrant's latest annual report, filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act").
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual
report referred to in (a) above.
(c) The description of the Class A Common Stock of the Registrant
contained in a registration statement filed under the Exchange Act,
including any amendment or report filed for the purpose of updating
such description.
All reports and other documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be part
hereof from the date of filing of such documents. Any statement contained in any
document, all or a portion of which is incorporated by reference herein, shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained or incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Experts
The consolidated financial statements and schedules of AmeriSource
Health Corporation included in AmeriSource Health Corporation's 1999 Annual
Report on Form 10-K which are incorporated by reference in this registration
statement have been audited by Ernst & Young LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts on giving said
reports.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation, as amended (the
"Charter") provides that directors of the Registrant shall be entitled to all
limitations on the liability of directors available under the Delaware General
Corporation Law (the "DGCL"). Further, the Charter provides that a director
shall not be liable to the Registrant or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Registrant or its stockholders,
(ii) for acts or omissions by the director not in good faith or which involve
intentional misconduct or a knowing violation of the law, (iii) acts described
under Section 174 of the DGCL relating to the declaration of dividends and
purchase or redemption of shares in violation of the DGCL or (iv) for any
transaction from which a director derived an improper personal benefit. In
addition, Section 145 of the DGCL and Article IV of the Registrant's Bylaws
under certain circumstances, provide for the indemnification of the Registrant's
officers and directors against liabilities which they may incur in such
capacities.
In general, any officer or director of the Registrant shall be
indemnified by the Registrant against expenses including attorneys' fees,
judgments, fines and settlements actually and reasonably incurred by that person
in connection
II-1
<PAGE>
with a legal proceeding as a result of such relationship, whether or not the
indemnified liability arises from an action by or in the right of the
Registrant, if the officer or director acted in good faith, and in the manner
believed to be in or not opposed to the Registrant's best interest, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
the conduct was unlawful. Such indemnity is limited to the extent that (i) such
person is not otherwise indemnified and (ii) such indemnifications not
prohibited by the DGCL or any other applicable law.
Any indemnification under the previous paragraph (unless ordered by a
court) shall be made by the Registrant only as authorized in the specific case
upon the determination that indemnification of the director or officer is proper
in the circumstances because that person has met the applicable standard of
conduct set forth above. Such determination shall be made (i) by the Board of
Directors by a majority vote of a quorum of disinterested directors who are not
parties to such action or (ii) if such quorum is not obtainable or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion. To the extent that a director or officer of the
Registrant shall be successful in prosecuting an indemnity claim, the reasonable
expenses of any such person and the fees and expenses of any special legal
counsel engaged to determine the possibility of indemnification shall be borne
by the Registrant.
Expenses incurred by a director or officer of the Registrant in
defending a civil or criminal action, suit or proceeding shall be paid by the
Registrant in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that person is
not entitled to be indemnified by the Registrant as authorized by the Bylaws.
The indemnification and advancement of expenses provided by, or
granted pursuant to Article IV of the Bylaws is not deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled, both as to action in that person's official capacity and as to
action in another capacity while holding such office.
The Board of Directors has the power to authorize the Registrant to
purchase and maintain insurance on behalf of the Registrant and others to the
extent that power to do so has not been prohibited by the DGCL, create any fund
to secure any of its indemnification obligations and give other indemnification
to the extent permitted by law. The obligations of the Registrant to indemnify
a director or officer under Article IV of the Bylaws is a contract between the
Registrant and such director or officer and no modification or repeal of the
Bylaws shall detrimentally affect such officer or director with regard to that
person's acts or omissions prior to such amendment or repeal.
The Registrant has also purchased insurance for its directors and
officers for certain losses arising from claims or charges made against them in
their capacities as directors and officers of the Registrant.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following is a list of exhibits filed as part of this Registration
Statement.
Exhibit
Number Exhibit
- ------ -------
5.1 Opinion of Morgan, Lewis & Bockius LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
99.1 AmeriSource Health Corporation 1999 Stock Option Plan.
99.2 AmeriSource Health Corporation 1999 Non-Employee Directors Stock
Option Plan.
II-2
<PAGE>
99.3 Amended and Restated C.D. Smith Healthcare, Inc. 1996 Equity
Compensation Plan.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement.
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Act of 1934) 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Malvern, Commonwealth of Pennsylvania, on this 29th
day of December, 1999.
AMERISOURCE HEALTH CORPORATION
By: /s/George L. James, III
-----------------------------
George L. James, III
Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints R. David Yost and George L. James, III
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Signature Title Date
--------- ----- ----
/s/R. David Yost President and Chief Executive December 29, 1999
- ---------------------------
R. David Yost Officer, Director
(Principal Executive Officer)
/s/Lawrence C. Karlson Chairman of the Board December 29, 1999
- ---------------------------
Lawrence C. Karlson
Director December 29, 1999
- ---------------------------
Bruce C. Bruckmann
/s/Michael A. Delaney Director December 29, 1999
- ---------------------------
Michael A. Delaney
/s/Richard C. Gozon Director October 29, 1999
- ---------------------------
Richard C. Gozon
/s/George H. Strong Director December 29, 1999
- ---------------------------
George H. Strong
/s/James A. Urry Director December 29, 1999
- ---------------------------
James A. Urry
/s/Barton J. Winokur Director December 29, 1999
- ---------------------------
Barton J. Winokur
/s/Edward E. Hagenlocker Director December 29, 1999
- ---------------------------
Edward E. Hagenlocker
/s/George L. James, III Vice President and Chief December 29, 1999
- ---------------------------
George L. James, III Financial Officer (Principal
Financial and Accounting Officer)
<PAGE>
AMERISOURCE HEALTH CORPORATION
INDEX TO EXHIBITS
Exhibit Number Document
- -------------- --------
5.1 Opinion of Morgan, Lewis & Bockius LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Morgan, Lewis & Bockius LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
99.1 AmeriSource Health Corporation 1999 Stock Option Plan.
99.2 AmeriSource Health Corporation 1999 Non-Employee
Directors Stock Option Plan.
99.3 Amended and Restated C.D. Smith Healthcare, Inc. 1996
Equity Compensation Plan.
<PAGE>
December 29, 1999
AmeriSource Health Corporation
300 Chester Field Parkway
Malvern, PA 19355
Ladies and Gentlemen:
We have acted as counsel to AmeriSource Health Corporation, a Delaware
corporation (the "Company"), in connection with the registration of up to
3,798,970 shares (the "Shares") of its Class A Common Stock, $.01 par value per
share (the "Common Stock"), on a registration statement on Form S-8 (the
"Registration Statement") filed pursuant to the Securities Act of 1933, as
amended (the "Act"). The shares will be issued pursuant to the AmeriSource
Health Corporation 1999 Stock Option Plan, the AmeriSource Health Corporation
1999 Non-Employee Directors Stock Option Plan and the Amended and Restated C.D.
Smith Healthcare, Inc. 1996 Equity Compensation Plan (the "Plans").
We have examined the Registration Statement and such corporate records,
documents, statutes and decisions as we have deemed relevant in rendering this
opinion. As to matters of fact, we have relied on representations of officers of
the Company. In our examination, we have assumed the genuineness of documents
submitted to us as originals and the conformity with originals of documents
submitted to us as copies thereof.
Based on the foregoing, it is our opinion that the Shares will be, when issued
in accordance with the terms of the Plans, validly issued, fully paid and
nonassessable.
The opinion set forth above is limited to the General Corporation Law of the
State of Delaware, as amended.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the AmeriSource Health Corporation 1999 Stock Option
Plan, the AmeriSource Health Corporation 1999 Non-Employee Directors Stock
Option Plan and the Amended and Restated C.D. Smith Healthcare, Inc. 1996 Equity
Compensation Plan of AmeriSource Health Corporation of our report dated November
3, 1999 with respect to the consolidated financial statements and schedules of
AmeriSource Health Corporation included in its Annual Report (Form 10-K) for the
fiscal year ended September 30, 1999, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
December 22, 1999
<PAGE>
EXHIBIT 99.1
Approved 12/08/98
Amended 04/28/99
AMERISOURCE HEALTH CORPORATION
1999 STOCK OPTION PLAN
----------------------
The purpose of the AmeriSource Health Corporation 1999 Stock Option Plan
(the "Plan") is to provide designated employees of AmeriSource Health
Corporation (the "Company") and its subsidiaries with the opportunity to receive
grants of nonqualified stock options. The Company believes that the Plan will
encourage the participants to contribute materially to the growth of the
Company, thereby benefiting the Company's shareholders, and will align the
economic interests of the participants with those of the shareholders.
1. Administration
--------------
(a) Committee. The Plan shall be administered and interpreted by a
---------
committee (the "Committee"), which shall consist of two or more persons
appointed by the Board of Directors of the Company (the "Board"), all of whom
shall be "outside directors", as defined under section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code") and related Treasury regulations,
and "non-employee directors", as defined under Rule 16b-3 under the Securities
Exchange Act of 1934 (the "Exchange Act").
(b) Committee Authority. The Committee shall have the sole authority to
-------------------
(i) determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv)
condition grants on the individual's execution of a non-compete, non-disclosure
or other agreement deemed appropriate by the Committee, and (v) deal with any
other matters arising under the Plan.
(c) Committee Determinations. The Committee shall have full power and
------------------------
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
<PAGE>
2. Options
-------
Awards under the Plan shall consist of grants of nonqualified stock options
that are not intended to qualify as "incentive stock options" within the meaning
of section 422 of the Code ("Options" or "Nonqualified Stock Options"), as
described in Section 5. All Options shall be subject to the terms and
conditions set forth herein and to such other terms and conditions consistent
with this Plan as the Committee deems appropriate and as are specified in
writing by the Committee to the individual in a grant instrument (the "Option
Instrument") or an amendment to the Option Instrument. The Committee shall
approve the form and provisions of each Option Instrument. Options need not be
uniform as among the grantees.
3. Shares Subject to the Plan
--------------------------
(a) Shares Authorized. Subject to the adjustment specified below, the
-----------------
aggregate number of shares of common stock of the Company ("Company Stock") that
may be issued or transferred under the Plan is 1,600,000 shares, and the maximum
aggregate number of shares of Company Stock that shall be subject to Options
granted under the Plan to any individual during any calendar year shall be
100,000 shares. The shares may be authorized but unissued shares of Company
Stock or reacquired shares of Company Stock, including shares purchased by the
Company on the open market for purposes of the Plan. If and to the extent
Options granted under the Plan terminate, expire, or are canceled, forfeited,
exchanged or surrendered without having been exercised, the shares subject to
such Options shall again be available for purposes of the Plan.
(b) Adjustments. If there is any change in the number or kind of shares of
-----------
Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Options, the maximum number of shares of Company Stock for
which any individual participating in the Plan may receive Options in any year,
the number of shares covered by outstanding Options, the kind of shares issued
under the Plan, and the price per share of Options may be appropriately adjusted
by the Committee to reflect any increase or decrease in the number of, or change
in the kind or value of, issued shares of Company Stock to preclude, to the
extent practicable, the enlargement or dilution of rights and benefits under
such Options; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding and conclusive.
2
<PAGE>
4. Eligibility for Participation
-----------------------------
(a) Eligible Persons. All employees of the Company and its subsidiaries
----------------
("Employees"), including Employees who are officers or members of the Board,
shall be eligible to participate in the Plan.
(b) Selection of Grantees. The Committee shall select the Employees to
---------------------
receive Options and shall determine the number of shares of Company Stock
subject to a particular Option in such manner as the Committee determines.
Employees who receive Options under this Plan shall hereinafter be referred to
as "Grantees".
5. Grant of Options
----------------
(a) Number of Shares. The Committee shall determine the number of shares
----------------
of Company Stock that will be subject to each grant of Options to Employees.
(b) Exercise Price.
--------------
(i) The purchase price (the "Exercise Price") of Company Stock subject
to an Option shall be determined by the Committee and shall not be less than the
Fair Market Value (as defined below) of a share of Company Stock on the date the
Option is granted or on the date the Plan is approved by the Stockholders,
whichever last occurs.
(ii) If the Company Stock is publicly traded, then the Fair Market
Value per share shall be determined as follows: (x) if the principal trading
market for the Company Stock is a national securities exchange or the Nasdaq
National Market, the last reported sale price thereof on the relevant date or
(if there were no trades on that date) the latest preceding date on which a sale
was reported, or (y) if the Company Stock is not principally traded on such
exchange or market, the mean between the last reported "bid" and "asked" prices
of Company Stock on the relevant date, as reported on Nasdaq or, if not so
reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Committee determines. If the Company Stock is not publicly traded or, if
publicly traded, is not subject to reported transactions or "bid" or "asked"
quotations as set forth above, the Fair Market Value per share shall be as
determined by the Committee.
(c) Option Term. The Committee shall determine the term of each Option,
-----------
which shall not exceed ten years from the date of grant.
(d) Exercisability of Options. Options shall become exercisable in 25%
-------------------------
increments on each of the first four anniversary dates that follow the grant,
provided the Grantee is employed by the Company as of the applicable date,
except as may otherwise be specified in the Option Instrument or an amendment to
the Option Instrument that is approved by the Committee. The
3
<PAGE>
Committee may accelerate the exercisability of any or all outstanding Options at
any time for any reason.
(e) Termination of Employment, Disability or Death.
----------------------------------------------
(i) Except as provided below, an Option may only be exercised while
the Grantee is employed by the Company as an Employee. In the event that a
Grantee ceases his or her employment with the Company for any reason other than
a "disability" (as defined below), death, or "termination for cause" (as defined
below), any Option which is otherwise exercisable by the Grantee shall terminate
unless exercised within 90 days after the date on which the Grantee ceases his
or her employment with the Company (or within such other period of time as may
be specified by the Committee), but in any event no later than the date of
expiration of the Option term. Any of the Grantee's Options that are not
exercisable as of the date on which the Grantee ceases to be employed by the
Company shall terminate as of such date, unless the Committee determines
otherwise. In addition, notwithstanding any other provisions of this Section 5,
if the Committee determines that the Grantee has engaged in conduct that
constitutes "cause" at any time while the Grantee is employed by the Company or
after the Grantee's termination of employment, any Option held by the Grantee
shall immediately terminate and the Grantee shall automatically forfeit all
shares underlying any exercised portion of an Option for which the Company has
not yet delivered the share certificates, upon refund by the Company of the
Exercise Price paid by the Grantee for such shares.
(ii) In the event the Grantee ceases his or her employment with the
Company on account of a "termination for cause" by the Company, any Option held
by the Grantee shall terminate as of the date the Grantee ceases to be employed
by the Company. In addition, notwithstanding any other provisions of this
Section 5, if the Committee determines that the Grantee has engaged in conduct
that constitutes "cause" at any time while the Grantee is employed by the
Company or after the Grantee's termination of employment, any Option held by the
Grantee shall immediately terminate and the Grantee shall automatically forfeit
all shares underlying any exercised portion of an Option for which the Company
has not yet delivered the share certificates, upon refund by the Company of the
Exercise Price paid by the Grantee for such shares.
(iii) In the event the Grantee's employment terminates because the
Grantee is "disabled", any Option which is otherwise exercisable by the Grantee
shall terminate unless exercised within one year after the date on which the
Grantee ceases to be employed by the Company (or within such other period of
time as may be specified by the Committee), but in any event no later than the
date of expiration of the Option term. Any of the Grantee's Options which are
not exercisable as of the date on which the Grantee ceases to be employed by the
Company shall terminate as of such date, unless the Committee determines
otherwise.
(iv) If the Grantee dies while employed by the Company or within 90
days after the date on which the Grantee ceases to be employed on account of a
termination specified
4
<PAGE>
in Section 5(e)(i) above (or within such other period of time as may be
specified by the Committee), any Option that is otherwise exercisable by the
Grantee shall terminate unless exercised within one year after the date on which
the Grantee ceases his or her employment with the Company (or within such other
period of time as may be specified by the Committee), but in any event no later
than the date of expiration of the Option term. Any of the Grantee's Options
that are not exercisable as of the date on which the Grantee ceases to be
employed by the Company shall terminate as of such date, unless the Committee
determines otherwise.
(v) For purposes of this Section 5(e) and Section 9(a):
(A) The term "Company" shall mean the Company and its parent and
subsidiary corporations.
(B) "Disability" shall mean a Grantee's becoming disabled within
the meaning of section 22(e)(3) of the Code.
(vi) For purposes of this Section 5(e), "termination for cause" shall
mean, except to the extent specified otherwise by the Committee, a finding by
the Committee that the Grantee has breached his or her employment or service
contract with the Company, or has been engaged in disloyalty to the Company,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his or her employment or service,
or has disclosed trade secrets or confidential information of the Company to
persons not entitled to receive such information.
(f) Exercise of Options. A Grantee may exercise an Option that has become
-------------------
exercisable, in whole or in part, by delivering a notice of exercise to the
Company with payment of the Exercise Price in cash. Subject to Committee
consent, a Grantee may pay the Exercise Price for an Option through a broker in
accordance with procedures established by the Committee consistent with
Regulation T of the Federal Reserve Board. The Grantee shall pay the Exercise
Price and the amount of any withholding tax due (pursuant to Section 6) at the
time of exercise. Shares of Company Stock shall not be issued upon exercise of
an Option until the Exercise Price is fully paid and any required tax
withholding is made.
6. Withholding of Taxes
--------------------
(a) Required Withholding. All Options under the Plan shall be subject to
--------------------
applicable federal (including FICA), state and local tax withholding
requirements. The Company may require the Grantee or other person receiving
such shares to pay to the Company the amount of any such taxes that the Company
is required to withhold with respect to such Options, or the Company may deduct
from other compensation payable by the Company the amount of any withholding
taxes due with respect to such Options.
5
<PAGE>
(b) Election to Withhold Shares. If the Committee so permits, a Grantee
---------------------------
may elect to satisfy the Company's income tax withholding obligation with
respect to an Option by having shares withheld up to an amount that does not
exceed the Grantee's maximum marginal tax rate for federal (including FICA),
state and local tax liabilities. The election must be in a form and manner
prescribed by the Committee and shall be subject to the prior approval of the
Committee.
7. Transferability of Options
--------------------------
(a) Nontransferability of Options. Except as provided below, only the
-----------------------------
Grantee or his or her authorized representative may exercise rights under an
Option. A Grantee may not transfer those rights except by will or by the laws
of descent and distribution or, if permitted under Rule 16b-3 of the Exchange
Act and if permitted by the Committee, pursuant to a domestic relations order
(as defined under the Code or Title I of the Employee Retirement Income Security
Act of 1974, as amended, or the regulations thereunder). When a Grantee dies,
the personal representative or other person entitled to succeed to the rights of
the Grantee ("Successor Grantee") may exercise such rights. A Successor Grantee
must furnish proof satisfactory to the Company of his or her right to receive
the Option under the Grantee's will or under the applicable laws of descent and
distribution.
(b) Permitted Transfer of Option. Notwithstanding the foregoing, the
----------------------------
Committee may provide, in an Option Instrument, that a Grantee may transfer
Nonqualified Stock Options to family members or other persons or entities
according to such terms as the Committee may determine; provided that the
Grantee receives no consideration for the transfer of an Option and the
transferred Option shall continue to be subject to the same terms and conditions
as were applicable to the Option immediately before the transfer.
8. Change of Control of the Company
--------------------------------
As used herein, a "Change of Control" shall be deemed to have occurred if:
(a) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) (other than 399 Venture Partners, Inc. or its affiliates) is or
becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 35%
of the voting power of the then outstanding securities of the Company, and such
person owns more aggregate voting power of the Company's then outstanding
securities entitled to vote generally in the election of directors than any
other person;
(b) The shareholders of the Company approve (or, if shareholder approval is
not required, the Board approves) an agreement providing for (i) the merger or
consolidation of the Company with another corporation where the shareholders of
the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to 50% or more of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors (without
6
<PAGE>
consideration of the rights of any class of stock to elect directors by a
separate class vote), (ii) the sale or other disposition of all or substantially
all of the assets of the Company, or (iii) a liquidation or dissolution of the
Company; or
(c) After the date this Plan is approved by the shareholders of the
Company, directors are elected such that a majority of the members of the Board
shall have been members of the Board for less than two years, unless the
election or nomination for election of each new director who was not a director
at the beginning of such two-year period was approved by a vote of at least two-
thirds of the directors then still in office who were directors at the beginning
of such period.
9. Consequences of a Change of Control
-----------------------------------
(a) Notice and Acceleration.
-----------------------
(i) Upon a Change of Control, the Company shall provide each Grantee
who holds outstanding Options written notice of the Change of Control.
(ii) Upon a Change of Control, each outstanding Option shall become
fully exercisable, provided that (i) the Grantee is employed by the Company at
the time of the Change of Control and (ii) either (A) the Grantee is employed by
the Company on the first anniversary of the Change of Control, (B) the Grantee's
employment is terminated by the Company, other than for "cause" (as defined
below), during the one year period following the Change of Control, (C) the
Grantee voluntarily terminates employment with the Company during the one year
period following the Change of Control as a result of a "constructive
termination" (as defined below), or (D) the Grantee's employment with the
Company terminates on account of death or disability (as defined in Section
5(e)) during the one year period following the Change of Control. Any portion
of an Option that would not be exercisable after a Change of Control but for the
provisions of the preceding sentence may be exercised after the conditions of
the preceding sentence have been met.
(iii)For purposes of this Section, "cause" means willful misconduct or
dishonesty, or conviction of or failure to contest prosecution for a felony, or
excessive absenteeism unrelated to illness.
(iv) For purposes of this Section, "constructive termination" will
occur if the Company (a) requires the Grantee to assume duties inconsistent
with, or the Company makes a significant diminution or reduction in the nature
or scope of the Grantee's authority or duties from, the authorities or duties
assigned to or held by the Grantee during the 30 days immediately prior to the
Change of Control, (b) materially reduces the Grantee's base salary, incentive
compensation opportunities or fringe benefits, or (c) relocates the Grantee's
site of employment to a location more than 50 miles away from the Grantee's site
of employment 30 days immediately before the Change of Control.
7
<PAGE>
(v) Notwithstanding the foregoing, a Grantee shall be eligible to
exercise Options both before and after a Change of Control to the full extent
otherwise permitted under the Plan.
(b) Assumption of Options. Upon a Change of Control described in Section
---------------------
8(b)(i) where the Company is not the surviving corporation (or survives only as
a subsidiary of another corporation), unless the Committee determines otherwise,
all outstanding Options that are not exercised shall be assumed by, or replaced
with comparable options by, the surviving corporation.
(c) Other Alternatives. Notwithstanding the foregoing, subject to
------------------
subsection (d) below, in the event of a Change of Control, the Committee may
take one or both of the following actions: the Committee may (i) require that
Grantees surrender their outstanding Options in exchange for a payment by the
Company, in cash or Company Stock as determined by the Committee, in an amount
equal to the amount by which the then Fair Market Value of the shares of Company
Stock subject to the Grantee's outstanding Options exceeds the Exercise Price of
the Options, or (ii) after giving Grantees an opportunity to exercise their
outstanding Options, terminate any or all unexercised Options at such time as
the Committee deems appropriate. Such surrender or termination shall take place
as of the date of the Change of Control or such other date as the Committee may
specify.
(d) Limitations. Notwithstanding anything in the Plan to the contrary, in
-----------
the event of a Change of Control, the Committee shall not have the right to take
any actions described in the Plan (including without limitation actions
described in Subsection (c) above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.
10. Amendment and Termination of the Plan
-------------------------------------
(a) Amendment. The Board may amend or terminate the Plan at any time;
---------
provided, however, that the Board shall not amend the Plan without shareholder
approval if such approval is required by Section 162(m) of the Code.
(b) Termination of Plan. The Plan shall terminate on the day immediately
-------------------
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or unless extended by the Board with the
approval of the shareholders.
(c) Termination and Amendment of Outstanding Options. A termination or
------------------------------------------------
amendment of the Plan that occurs after an Option is granted shall not
materially impair the rights of a Grantee unless the Grantee consents or unless
the Committee acts under Section 17(b).
8
<PAGE>
The termination of the Plan shall not impair the power and authority of the
Committee with respect to an outstanding Option. Whether or not the Plan has
terminated, the Committee shall not permit the repricing of Options by any
method, including by cancellation and reissuance, without first obtaining
shareholder approval.
(d) Governing Document. The Plan shall be the controlling document. No
------------------
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
11. Funding of the Plan
-------------------
This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of shares with respect to Options under this Plan.
12. Rights of Participants
----------------------
Nothing in this Plan shall entitle any Employee or other person to any
claim or right to be granted an Option under this Plan. Neither this Plan nor
any action taken hereunder shall be construed as giving any individual any
rights to be retained by or in the employ of the Company or any other employment
rights.
13. No Fractional Shares
--------------------
No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Option. The Committee shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.
14. Requirements for Issuance of Shares
-----------------------------------
No Company Stock shall be issued or transferred in connection with any
Option hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Option granted to any Grantee hereunder on such Grantee's undertaking in
writing to comply with such restrictions on his or her subsequent disposition of
such shares of Company Stock as the Committee shall deem necessary or advisable
as a result of any applicable law, regulation or official interpretation
thereof, and certificates representing such shares may be legended to reflect
any such restrictions. Certificates representing shares of Company Stock issued
under the Plan will be subject to such stop-transfer orders and other
restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon.
9
<PAGE>
15. Headings.
--------
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
16. Effective Date of the Plan.
--------------------------
Subject to the approval of the Company's shareholders, this Plan shall be
effective on December 8, 1998.
17. Miscellaneous
-------------
(a) Options in Connection with Corporate Transactions and Otherwise.
---------------------------------------------------------------
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to grant Options under this Plan in connection with the acquisition,
by purchase, lease, merger, consolidation or otherwise, of the business or
assets of any corporation, firm or association, including Options granted to
employees thereof who become Employees of the Company, or for other proper
corporate purposes, or (ii) limit the right of the Company to grant stock
options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may grant an Option to an employee of another
corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option grant made by such corporation ("Substituted Stock Incentives"). The
terms and conditions of the substitute grant may vary from the terms and
conditions required by the Plan and from those of the Substituted Stock
Incentives. The Committee shall prescribe the provisions of the substitute
grants.
(b) Compliance with Law. The Plan, the exercise of Options and the
-------------------
obligations of the Company to issue or transfer shares of Company Stock under
Options shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. The
Committee may revoke any Option if it is contrary to law or modify an Option to
bring it into compliance with any valid and mandatory government regulation.
The Committee may, in its sole discretion, agree to limit its authority under
this Section.
(c) Ownership of Stock. A Grantee or Successor Grantee shall have no
------------------
rights as a shareholder with respect to any shares of Company Stock covered by
an Option until the shares are issued or transferred to the Grantee or Successor
Grantee on the stock transfer records of the Company.
(d) Governing Law. The validity, construction, interpretation and effect
-------------
of the Plan and Option Instruments issued under the Plan shall exclusively be
governed by and determined
10
<PAGE>
in accordance with the law of the State of Delaware, without giving effect to
the conflicts of laws provision thereof.
As approved by the Board of Directors of AmeriSource Health Corporation on
December 8, 1998.
-----------------------------
Secretary
11
<PAGE>
Approved 12/08/98
Amended 04/28/99
Amended 10/25/99
AMERISOURCE HEALTH CORPORATION
1999 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
---------------------------------------------
The purpose of the AmeriSource Health Corporation 1999 Non-Employee
Directors Stock Option Plan (the "Plan") is to provide members of the Board of
Directors (the "Board") of AmeriSource Health Corporation (the "Company") who
are not employees of the Company or its subsidiaries with grants of nonqualified
stock options. The Company believes that the Plan will encourage the
participants to contribute materially to the growth of the Company, thereby
benefitting the Company's shareholders, and will align the economic interests of
the participants with those of the shareholders.
1. Administration
--------------
(a) Committee. The Plan shall be administered and interpreted by a
---------
committee (the "Committee"), which shall consist of two or more persons
appointed by the Board, all of whom shall be "non-employee directors", as
defined under Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act").
(b) Committee Determinations. The Committee shall have full power and
------------------------
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
2. Options
-------
Awards under the Plan shall consist of grants of nonqualified stock options
that are not intended to qualify as "incentive stock options" within the meaning
of section 422 of the Code ("Options" or "Nonqualified Stock Options"), as
described in Section 5. All Options shall be subject to the terms and conditions
set forth herein and to such other terms and conditions consistent with this
Plan as the Committee deems appropriate and as are specified in writing by the
Committee to the individual in a grant instrument (the "Option Instrument") or
an amendment to the Option Instrument. The Committee shall approve the form and
provisions of each Option Instrument.
<PAGE>
3. Shares Subject to the Plan
--------------------------
(a) Shares Authorized. Subject to the adjustment specified below, the
-----------------
aggregate number of shares of common stock of the Company ("Company Stock") that
may be issued or transferred under the Plan is 175,000 shares. The shares may be
authorized but unissued shares of Company Stock or reacquired shares of Company
Stock, including shares purchased by the Company on the open market for purposes
of the Plan. If and to the extent Options granted under the Plan terminate,
expire, or are canceled, forfeited, exchanged or surrendered without having been
exercised, the shares subject to such Options shall again be available for
purposes of the Plan.
(b) Adjustments. If there is any change in the number or kind of shares of
-----------
Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Options, the number of shares covered by outstanding
Options, the kind of shares issued under the Plan, and the price per share of
Options may be appropriately adjusted by the Committee to reflect any increase
or decrease in the number of, or change in the kind or value of, issued shares
of Company Stock to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under such Options; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated. Any
adjustments determined by the Committee shall be final, binding and conclusive.
4. Eligibility for Participation
-----------------------------
All members of the Board who are not employees of the Company or a
subsidiary ("Non-Employee Directors") shall be eligible to participate in the
Plan.
5.
(a) Grants
------
(i) Initial Grants. Within 30 days of a Non-Employee Director's initial
--------------
election to the Board, the Non-Employee Director shall receive a Nonqualified
Stock Option to purchase 15,000 shares of Company Stock.
(ii) Annual Grants. Commencing with the 2000 annual meeting of the
-------------
Company's shareholders each Non-Employee Director who is in office on the day
immediately after the
-2-
<PAGE>
annual election of directors shall receive a grant of a Nonqualified Stock
Option to purchase 8,000 shares of Company Stock.
(c) Exercise Price. The purchase price per share of Company Stock subject
--------------
to an Option (the "Exercise Price") shall be equal to the Fair Market Value of a
share of Company Stock on the date of grant or on the date the Plan is approved
by the Stockholders, whichever last occurs. If the Company Stock is publicly
traded, then the Fair Market Value per share shall be determined as follows: (x)
if the principal trading market for the Company Stock is a national securities
exchange or the Nasdaq National Market, the last reported sale price thereof on
the relevant date or (if there were no trades on that date) the latest preceding
date upon which a sale was reported, or (y) if the Company Stock is not
principally traded on such exchange or market, the mean between the last
reported "bid" and "asked" prices of Company Stock on the relevant date, as
reported on Nasdaq or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable and as the Committee determines. If the Company Stock is
not publicly traded or, if publicly traded, is not subject to reported
transactions or "bid" or "asked" quotations as set forth above, the Fair Market
Value per share shall be as determined by the Committee.
(d) Option Term. The term of each Option shall be ten years.
-----------
(e) Exercisability of Options. Options shall be fully exercisable as of
-------------------------
the date of grant.
(f) Termination of Board Membership or Death.
----------------------------------------
(i) Except as provided below, an Option may only be exercised while
the Grantee is a member of the Board. If a Grantee ceases to be a member of the
Board for any reason other than death or "cause" (as defined below), the
Grantee's Options that are vested on such date shall terminate unless exercised
within one year after the date on which the Grantee ceases to be a member of the
Board, or, if earlier, the date of expiration of the Option term.
(ii) If the Grantee ceases to be a member of the Board for "cause",
any Option held by the Grantee shall terminate as of the date the Grantee ceases
to a member of the Board.
(iii) "Cause" shall mean a finding by the Committee that the Grantee
has breached his or her service contract with the Company, or has been engaged
in disloyalty to the Company, including, without limitation, fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the course
of his or her service, or has disclosed trade secrets or confidential
information of the Company to persons not entitled to receive such information.
In the event a Grantee ceases to be a member of the Board for cause, in addition
to the immediate termination of all Options, the Grantee shall automatically
forfeit all shares underlying any exercised portion of an Option for which the
Company has not yet delivered the share certificates, upon refund by
-3-
<PAGE>
the Company of the Exercise Price paid by the Grantee for such shares.
(iv) If the Grantee dies while a member of the Board, any of the
Grantee's Options that are not exercisable as of the date on which the Grantee
ceases to be Board member on account of death shall become vested and
exercisable. Any Option that is otherwise exercisable by the Grantee, including
Options that have vested on account of death, shall terminate unless exercised
within one year of the date of the Grantee's death, but in any event no later
than the date of expiration of the Option term.
(g) Exercise of Options. A Grantee may exercise an Option, in whole or in
-------------------
part, by delivering a notice of exercise to the Company with payment of the
Exercise Price in cash. Subject to Committee consent, a Grantee may pay the
Exercise Price for an Option through a broker in accordance with procedures
established by the Committee consistent with Regulation T of the Federal Reserve
Board. The Grantee shall pay the Exercise Price and the amount of any
withholding tax due (pursuant to Section 6) at the time of exercise. Shares of
Company Stock shall not be issued upon exercise of an Option until the Exercise
Price is fully paid and any required tax withholding is made.
6. Withholding of Taxes
--------------------
(a) Required Withholding. All Options under the Plan shall be subject to
--------------------
any applicable federal (including FICA), state and local tax withholding
requirements. The Company may require the Grantee or other person receiving such
shares to pay to the Company the amount of any such taxes that the Company is
required to withhold with respect to such Options, or the Company may deduct
from other compensation payable by the Company the amount of any withholding
taxes due with respect to such Options.
(b) Election to Withhold Shares. If the Committee so permits, a Grantee
---------------------------
may elect to satisfy the Company's income tax withholding obligation with
respect to an Option by having shares withheld up to an amount that does not
exceed the Grantee's maximum marginal tax rate for federal (including FICA),
state and local tax liabilities. The election must be in a form and manner
prescribed by the Committee and shall be subject to the prior approval of the
Committee.
7. Transferability of Options
--------------------------
(a) Nontransferability of Options. Except as provided below, only the
-----------------------------
Grantee or his or her authorized representative may exercise rights under an
Option. A Grantee may not transfer those rights except by will or by the laws of
descent and distribution or, if permitted under Rule 16b-3 of the Exchange Act
and if permitted by the Committee, pursuant to a domestic relations order (as
defined under the Code or Title I of the Employee Retirement Income Act of 1974,
as amended, or the regulations thereunder). When a Grantee dies, the personal
representative or other person entitled to succeed to the rights of the Grantee
("Successor Grantee") may exercise
-4-
<PAGE>
such rights. A Successor Grantee must furnish proof satisfactory to the Company
of his or her right to receive the Option under the Grantee's will or under the
applicable laws of descent and distribution.
(b) Permitted Transfer of Options. Notwithstanding the foregoing, the
-----------------------------
Committee may provide, in an Option Instrument, that a Grantee may transfer
Nonqualified Stock Options to family members or other persons or entities
according to such terms as the Committee may determine; provided that the
Grantee receives no consideration for the transfer of an Option and the
transferred Option shall continue to be subject to the same terms and conditions
as were applicable to the Option immediately before the transfer.
8. Change of Control of the Company
--------------------------------
As used herein, a "Change of Control" shall be deemed to have occurred if:
(a) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) (other than 399 Venture Partners, Inc. or its affiliates) is or
becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 35%
of the voting power of the then outstanding securities of the Company, and such
person owns more aggregate voting power of the Company's then outstanding
securities entitled to vote generally in the election of directors than any
other person;
(b) The shareholders of the Company approve (or, if shareholder approval
is not required, the Board approves) an agreement providing for (i) the merger
or consolidation of the Company with another corporation where the shareholders
of the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to 50% or more of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (ii) the sale or other disposition of all
or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company; or
(c) After the date this Plan is approved by the shareholders of the
Company, directors are elected such that a majority of the members of the Board
shall have been members of the Board for less than two years, unless the
election or nomination for election of each new director who was not a director
at the beginning of such two-year period was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period.
-5-
<PAGE>
9. Consequences of a Change of Control
-----------------------------------
(a) Notice and Acceleration. Upon a Change of Control, the Company shall
-----------------------
provide each Grantee who holds outstanding Options written notice of the Change
of Control. Each outstanding Option shall become fully exercisable, provided
that the Grantee is a member of the Board at the time of the Change of Control.
(b) Assumption of Options. Upon a Change of Control described in Section
---------------------
8(b)(i) where the Company is not the surviving corporation (or survives only as
a subsidiary of another corporation), unless the Committee determines otherwise,
all outstanding Options that are not exercised shall be assumed by, or replaced
with comparable options by, the surviving corporation.
(c) Other Alternatives. Notwithstanding the foregoing, subject to
------------------
subsection (c) below, in the event of a Change of Control, the Committee may
take one or both of the following actions: the Committee may (i) require that
Grantees surrender their outstanding Options in exchange for a payment by the
Company, in cash or Company Stock as determined by the Committee, in an amount
equal to the amount by which the then Fair Market Value of the shares of Company
Stock subject to the Grantee's outstanding Options exceeds the Exercise Price of
the Options, or (ii) after giving Grantees an opportunity to exercise their
outstanding Options, terminate any or all unexercised Options at such time as
the Committee deems appropriate. Such surrender or termination shall take place
as of the date of the Change of Control or such other date as the Committee may
specify.
(d) Limitations. Notwithstanding anything in the Plan to the contrary, in
-----------
the event of a Change of Control, the Committee shall not have the right to take
any actions described in the Plan (including without limitation actions
described in Subsection (b) above) that would make the Change of Control
ineligible for pooling of interest accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.
10. Amendment and Termination of the Plan
-------------------------------------
(a) Amendment. The Board may amend or terminate the Plan at any time.
---------
(b) Termination of Plan. The Plan shall terminate on the day immediately
-------------------
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or unless extended by the Board with the
approval of the shareholders.
(c) Termination and Amendment of Outstanding Options. A termination or
------------------------------------------------
amendment of the Plan that occurs after an Option is granted shall not
materially impair the
-6-
<PAGE>
rights of a Grantee unless the Grantee consents or unless the Committee acts
under Section 16(a). The termination of the Plan shall not impair the power and
authority of the Committee with respect to an outstanding Option. Whether or not
the Plan has terminated, the Committee shall not permit the repricing of Options
by any method, including by cancellation and reissuance, without first obtaining
shareholder approval.
(d) Governing Document. The Plan shall be the controlling document. No
------------------
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
11. Funding of the Plan
-------------------
This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of shares with respect to any Options under this Plan.
12. No Fractional Shares
--------------------
No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Option. The Committee shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.
13. Requirements for Issuance of Shares
-----------------------------------
No Company Stock shall be issued or transferred in connection with any
Option hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Option granted to any Grantee hereunder on such Grantee's undertaking in
writing to comply with such restrictions on his or her subsequent disposition of
such shares of Company Stock as the Committee shall deem necessary or advisable
as a result of any applicable law, regulation or official interpretation
thereof, and certificates representing such shares may be legended to reflect
any such restrictions. Certificates representing shares of Company Stock issued
under the Plan will be subject to such stop-transfer orders and other
restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon.
14. Headings
--------
Section headings are for reference only. In the event of a conflict between
a title and the content of a Section, the content of the Section shall control.
-7-
<PAGE>
15. Effective Date of the Plan.
--------------------------
Subject to the approval of the Company's shareholders, this Plan shall be
effective on December 8, 1998.
16. Miscellaneous
-------------
(a) Compliance with Law. The Plan, the exercise of Options and the
-------------------
obligations of the Company to issue or transfer shares of Company Stock under
Options shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. The Committee
may revoke any Option if it is contrary to law or modify an Option to bring it
into compliance with any valid and mandatory government regulation. The
Committee may, in its sole discretion, agree to limit its authority under this
Section.
(b) Ownership of Stock. A Grantee or Successor Grantee shall have no
------------------
rights as a shareholder with respect to any shares of Company Stock covered by
an Option until the shares are issued or transferred to the Grantee or Successor
Grantee on the stock transfer records of the Company.
(c) Governing Law. The validity, construction, interpretation and effect
-------------
of the Plan and Option Instruments issued under the Plan shall exclusively be
governed by and determined in accordance with the law of State of Delaware,
without giving effect to the conflicts of laws provisions thereof.
As approved by the Board of Directors of AmeriSource Health Corporation on
December 8, 1998.
----------------------------
Secretary
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<PAGE>
EXHIBIT 99.3
AMENDED AND RESTATED
C.D. SMITH HEALTHCARE, INC.
1996 EQUITY COMPENSATION PLAN
SECTION 1
PURPOSE AND DURATION
1.1 Effective Date. This Plan permits the grant of Nonqualified Stock
--------------
Options, Incentive Stock Options, and Stock Appreciation Rights. This Plan
became effective on March 27, 1996, except for those provisions addressing
Incentive Stock Options which shall become effective upon the affirmative vote
of the holders of a majority of the Shares present in person or by proxy and
entitled to vote at a validly held meeting of the stockholders of the Company.
1.2 Purpose of this Plan. This Plan is intended to attract, motivate,
--------------------
and retain employees of the Company and its Affiliates. This Plan also is
designed to further the growth and financial success of the Company and its
Affiliates by aligning the interests of the participants, through the ownership
of Shares and through other equity based incentives, with the interests of the
Company's stockholders.
SECTION 2
DEFINITIONS
The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:
2.1 "1933 Act" means the Securities Act of 1933, as amended. Reference
--------
to a specific section of the 1933 Act or regulation thereunder shall include
such section or regulation, any valid regulation promulgated under such section,
and any comparable provision of any future legislation or regulation amending,
supplementing, or superseding such section or regulation.
2.2 "1934 Act" means the Securities Exchange Act of 1934, as amended.
--------
Reference to a specific section of the 1934 Act or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing, or superseding such section or regulation.
2.3 "Administrator" means the Board or the Committee, as the case may be,
-------------
that is appointed in accordance with Section 3.1 to administer the Plan.
2.4 "Affiliate " means any corporation or any other entity, including
---------
partnerships and joint ventures, which, directly or indirectly, controls, is
controlled by, or is under common control with, the Company, whether now or
hereafter existing.
1
<PAGE>
2.5 "Affiliated SAR" means a SAR which is granted in connection with, and
--------------
is related to, an Option, and which automatically will be deemed to be exercised
at the same time that such related Option is exercised.
2.6 "Award" means, individually or collectively, a grant under this Plan
-----
of Nonqualified Stock Options, Incentive Stock Options, or SARS.
2.7 "Award Agreement" means the written agreement setting forth the terms
---------------
and provisions applicable to each Award granted under this Plan.
2.8 "Board" or "Board of Directors" means the Board of Directors of the
----- ------------------
Company.
2.9 "Change in Control" shall have the meaning assigned to such
------------------
term in Section 10.2.
2.10 "Code" means the Internal Revenue Code of 1986, as amended.
----
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing, or superseding such section or regulation.
2.11 "Committee" means the committee, if any, appointed by the Board
---------
pursuant to Section 3.1 to administer this Plan. The Committee shall consist
of not less than two (2) Directors. The members of the Committee shall be
appointed from time to time by, and shall serve at the pleasure of, the Board of
Directors. The Committee shall be comprised solely of Directors who both are
(a) "disinterested persons" under Rule 16b-3, and (b) "outside directors" under
Section 162(m) of the Code.
2.12 "Company" means C.D. Smith Healthcare, Inc., a Missouri corporation,
-------
and any successor thereto.
2.13 "Director" means any individual who is a member of the Board of
--------
Directors of the Company.
2.14 "Disability" shall have the same meaning as given that term in the
----------
long term disability insurance policy of the Company as in effect on the date in
question.
2.15 "Employee" means any employee of the Company or of an Affiliate,
--------
whether now or hereafter employed.
2.16 "Exercise Price" means the price at which a Share may be purchased by
---------------
a Participant pursuant to the exercise of an Option.
2.17 "Fair Market Value" means the value determined in good faith by the
-----------------
Administrator in accordance with uniform and nondiscriminatory standards. For
federal, state and local income tax reporting purposes, fair market value shall
be determined by the Administrator or its delegate in accordance with uniform
and nondiscriminatory standards adopted by it from time to time.
2
<PAGE>
2.18 "Fiscal Year" means the fiscal year of the Company.
-----------
2.19 "Freestanding SAR" means a SAR that is granted independently of any
----------------
Option.
2.20 "Grant Date" means, with respect to an Award, the date on which the
----------
Award was granted.
2.21 "Incentive Stock Option" means an Option to purchase Shares which is
----------------------
designated as an Incentive Stock Option, and is intended to meet the
requirements of Section 422 of the Code.
2.22 "Nonqualified Stock Option" means an Option to purchase Shares which
-------------------------
is not an Incentive Stock Option.
2.23 "Option" means an Incentive Stock Option or a Nonqualified Stock
------
Option granted pursuant to this Plan.
2.24 "Participant" means an Employee to whom an outstanding
-----------
Award has been granted.
2.25 "Plan" means the C.D. Smith Drug Company 1996 Equity Compensation
----
Plan, asset forth in this instrument and as hereafter amended from time to time.
2.26 "Retirement" means, in the case of an Employee, a Termination of
----------
Service by reason of the Employee's retirement at or after age sixty-five (65)
or pursuant to any early retirement program instituted by the Company.
2.27 "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act, and any
----------
future regulation amending, supplementing, or superseding such regulation.
2.28 "Section 16 Person" means a person who, with respect to the Shares, is
-----------------
subject to Section 16 of the 1934 Act.
2.29 "Shares" means the shares of common stock of the Company.
------
2.30 "Stock Appreciation Right" or "SAR" means an Award, granted either
------------------------ ---
alone or in connection with a related Option, that is designated as a SAR
pursuant to Section 6.
2.31 "Subsidiary" means a "subsidiary corporation" as defined in Section
----------
424(f) of the Code, whether now or hereafter existing.
2.32 "Tandem SAR"means a SAR which is granted in connection with, or
----------
related to, an Option, and which requires forfeiture of the right to purchase an
equal number of Shares under the
3
<PAGE>
related Option upon the exercise of such SAR; or alternatively, which requires
the cancellation of an equal amount of SAR upon the purchase of the Shares
subject to the Option.
2.33 "Termination of Service" or "Terminates" or means a cessation of the
---------------------- ----------
employee-employer relationship between an Employee and the Company or an
Affiliate for any reason, including, but not limited to, a cessation by
resignation, discharge, death, Disability, Retirement or the disaffiliation of
an Affiliate, but excluding any such cessation where there is a simultaneous
reemployment by the Company or by an Affiliate.
SECTION 3
ADMINISTRATION
3.1 The Administrator. Prior to the date, if any, upon which the Company
-----------------
becomes subject to the 1934 Act, the Plan shall be administered by either the
Board or the Committee. After the date, if any, upon which the Company becomes
subject to the 1934 Act, the Plan and all Awards shall be administered by the
Committee.
3.2 Authority of the Administrator It shall be the duty of the
------------------------------
Administrator to administer this Plan in accordance with the provisions hereof.
The Administrator shall have all powers and discretion necessary or appropriate
to administer this Plan and to control its operation, including, but not limited
to, the power to (a) determine which Employees shall be granted Awards, (b)
prescribe the terms and conditions of the Awards, (c) interpret the terms and
provision of this Plan and of the Awards, (d) adopt rules for the
administration, interpretation and application of this Plan, and (e) interpret,
amend, or revoke any such rules.
3.3 The Administrator, in its sole discretion and on such terms and
conditions as it may provide, may delegate all or any part of its authority and
powers under this Plan to one or more directors or officers of the Company;
provided, however, that the Administrator may not delegate its authority and
powers (a) with respect to Section 16 Persons, or (b) in any way which would
jeopardize this Plan's qualification under Section 162(m) of the Code or Rule
16b-3.
3.4 Decisions Binding. All determinations and decisions made by the
-----------------
Administrator, the Board and any delegate of the Administrator appointed
pursuant to Section 3.3 shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.
SECTION 4
SHARES SUBJECT TO THIS PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
----------------
the total number of Shares available for grant under this Plan shall not exceed
2,000,000. Shares granted under this Plan may be either authorized but
unissued Shares or treasury Shares, or any combination thereof.
4
<PAGE>
4.2 Lapsed Awards. If an Award is canceled, terminates, expires or lapses
-------------
for any reason (with the exception of the termination of a Tandem SAR upon
exercise of the related Option, or the termination of a related Option upon
exercise of the corresponding Tandem SAR), any Shares subject to such Award
thereafter shall be available to be the subject of a subsequent Award.
4.3 Adjustments in Awards and Authorized Shares. In the event of any
-------------------------------------------
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, stock split, Share combination, or other change in
the corporate structure of the Company affecting the Shares, the Administrator
shall adjust the number and class of Shares which may be delivered under this
Plan, the number, class, and price of Shares subject to outstanding Awards, and
the numerical limits of Sections 4.1, 5.1, and 6.1.1 in such manner as the
Administrator in its sole discretion shall determine to be advisable or
appropriate to prevent the dilution or diminution of such Awards.
Notwithstanding the preceding, the number of Shares subject to any Award always
shall be a whole number.
4.4 Adjustments upon Merger or Asset Sale. In the event of a merger of
-------------------------------------
the or the sale of substantially all of the assets of the Company, the Board of
Directors, in its discretion, may require the successor corporation to either
(i) assume each outstanding Award or (ii) substitute an equivalent award by the
successor corporation or a Parent or Subsidiary of the successor corporation.
If an Award is not assumed or substituted in the event of a merger or sale of
assets, the Award shall become immediately exercisable and the Administrator
shall notify the Participant that the Award shall be fully exercisable for a
period of fifteen (15) days from the date of such notice, and the Award shall
terminate upon the expiration of such period unless exercised. For the
purposes of this Paragraph, the Award shall be considered assumed if, following
the merger or sale of assets, the Award or the merger or acquisition agreement
confers the right to purchase or receive, for each Share subject to the Award
immediately prior to the merger or sale of assets, equal consideration (whether
stock, cash, or other securities or property) as received in the merger or sale
of assets by holders of each Share of common stock held on the effective date of
the transaction (and if holders of Shares were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration always
received in the merger or sale of assets was not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon the
exercise of the Award, for each Share subject to the award, to be solely common
stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of common stock in the merger or
sale of assets.
SECTION 5
STOCK OPTIONS
5.1 Grant of Options. Subject to the terms and provisions of this Plan,
----------------
Options may be granted to Employees at any time and from time to time as
determined by the Administrator in its sole discretion. The Administrator in
its sole discretion shall determine the number of Shares subject to each Option;
provided, however, that during any Fiscal Year, no Participant shall be granted
Options
5
<PAGE>
covering more than 100,000 Shares. The Administrator may grant Incentive Stock
Options, Nonqualified Stock Options, or any combination thereof.
5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement
---------------
that shall specify the Exercise Price, the expiration date of the Option, the
number of Shares to which the Option pertains, any conditions to exercise of the
Option and such other terms and conditions as the Administrator in its sole
discretion shall determine. The Award Agreement also shall specify whether the
Option is intended to be an Incentive Stock Option or a Nonqualified Stock
Option.
5.3 Exercise Price. Subject to the provisions of this Section 5.3, the
--------------
Exercise Price per Share for each Option shall be determined by the
Administrator in its sole discretion.
5.3.1 Nonqualified Stock Options. In the case of a Nonqualified Stock
Option, the Exercise Price per Share shall be not less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant Date.
5.3.2 Incentive Stock Options. In the case of an Incentive Stock
Option, the Exercise Price per Share shall be not less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant Date;
provided, however, that if on the Grant Date, the Employee (together with
persons whose stock ownership is attributed to the Employee pursuant to
Section 424(d) of the Code) owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or any
of its Subsidiaries, the Exercise Price per Share shall be not less than
one hundred ten percent (110%) of the Fair Market Value of a Share on the
Grant Date.
5.3.3 Substitute Options. Notwithstanding the provisions of Sections
5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates
a transaction described in Section 424(a) of the Code (e.g., the
acquisition of property or stock from an unrelated corporation), persons
who become Employees on account of such transaction may be granted Options
in substitution for options granted by such former employer. If such
substitute Options are granted, the Administrator, in its sole discretion
and consistent with Section 424(a) of the Code, may determine that such
substitute Options shall have an Exercise Price per Share less than one
hundred (I 00%) of the Fair Market Value of the Shares on the Grant Date.
5.4 Expiration of Options
---------------------
5.4.1 Expiration Dates. Each Option shall terminate upon the earlier
of the first to occur of the following events:
(a) The date for termination of the Option set forth in the Award
Agreement; or
6
<PAGE>
(b) The expiration of ten (10) years from the Grant Date (except
as provided in Section 5.8 regarding Incentive Stock Options); or
(c) The expiration of one (1) year from the date of the
Optionee's Termination of Service for a reason other than the
Optionee's death, Disability or retirement (except as provided in
Section 5.8 regarding Incentive Stock Options); or
(d) The expiration of three (3) years from the date of the
Optionee's Termination of Service by reason of Disability, death, or
Retirement (except as provided in Section 5.8 regarding Incentive
Stock Options).
5.4.2 Administrator Discretion. Subject to the limits of Section
5.4.1, the Administrator in its sole discretion (a) shall provide in each
Award Agreement when each Option expires and becomes unexercisable and (b)
may, after an Option is granted, extend the maximum term of the Option
(subject to Section 5.8 regarding Incentive Stock Options), provided
however, in the case of Incentive Stock Options, that the maximum term of
the Option may not be extended if the Fair Market Value per Share is
greater than the Exercise Price per Share.
5.5 Exercisability of Options. Options granted under this Plan shall be
-------------------------
exercisable at such times and be subject to such restrictions and conditions as
the Administrator shall determine in its sole discretion; provided however, that
all Options granted under this Plan shall become immediately exercisable upon
death or Disability or (subject to the limitations set forth in Section 10.1) as
of the first date that a Change in Control shall be deemed to have occurred.
After an Option is granted, the Administrator in its sole discretion may
accelerate the exercisability of the Option. However, in no event may any
Option granted to a Section 16 Person be exercisable until at least six (6)
months following the Grant Date or such shorter period as may be permissible
while maintaining compliance with Rule 16b-3.
5.6 Payment. Options shall be exercised by the Participant's delivery of
-------
a written notice of exercise to the Secretary of the Company or its designee,
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares. Upon the exercise of
any Option, the Exercise Price shall be payable to the Company in full in cash
or by certified or cashiers check. The Administrator in its sole discretion
also may permit exercise (a) by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total Exercise
Price, (b) by delivery of an executed promissory note representing indebtedness
of the Participant to the Company, (c) by any other means which the
Administrator in its sole discretion determines (i) to provide legal
consideration for the Shares, and (ii) to be consistent with the purposes of
this Plan, or (d) any combination of the methods of payment set forth in this
Section. As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased, the Company shall deliver to
the Participant or to the Participants designated broker, Share certificates
(which may be in book entry form) representing such Shares.
7
<PAGE>
5.7 Share Transferability. The Administrator may impose transfer
---------------------
restrictions on any Shares acquired pursuant to the exercise of an Option as it
may deem advisable or appropriate in its sole discretion, including, but not
limited to, restrictions related to applicable Federal securities laws, the
requirements of any national securities exchange or system upon which Shares are
then listed or traded, and any blue sky or state securities laws.
5.8 Certain Additional Provisions for Incentive Stock Options.
----------------------------------------------------------
5.8.1 Eligible Participants. Incentive Stock Options may be granted
only to persons who are employees of the Company or a Subsidiary on the
Grant Date.
5.8.2 Exercisability. The aggregate Fair Market Value of the Shares
(as determined on the applicable Grant Date) with respect to which
Incentive Stock Options are exercisable for the first time by any Employee
during any calendar year (under all plans of the Company and its
Subsidiaries) shall not exceed $100,000.
5.8.3 Termination of Service. No Incentive Stock Option may be
exercised more than three (3) months after the Participant's Termination of
Service for any reason other than Disability or death, unless (a) the
Participant dies during such three-month period, and (b) the Award
Agreement or the Administrator permits later exercise. No Incentive Stock
Option may be exercised more than one (1) year after the Participant's
termination of employment on account of Disability or death, unless (a) the
Participant dies during such one-year period, and (b) the Award Agreement
or the Administrator permits later exercise.
5.8.4 Expiration. No Incentive Stock Option may be exercised after
the expiration of ten (10) years from the Grant Date; provided, however,
that if the Option is granted to an Employee who, together with persons
whose stock ownership is attributed to the Employee pursuant to Section
424(d) of the Code, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the Option may not be exercised after the expiration of five
(5) years from the Grant Date.
SECTION 6
STOCK APPRECIATION RIGHTS
6.1 Grant of SARS. Subject to the terms and conditions of this Plan, a
-------------
SAR may be granted to Employees at any time and from time to time as shall be
determined by the Administrator in its sole discretion. The Administrator may
grant Affiliated SARS, Freestanding SARS, Tandem SARS, or any combination
thereof.
6.1.1 Number of Shares. The Administrator shall have complete
discretion to determine the number of SARs granted to any Participant,
provided that during any Fiscal Year, no Participant shall be granted SARs
covering more than 30,000 Shares.
8
<PAGE>
6.1.2 Exercise Price and Other Terms. The Administrator, subject to
the provisions of this Plan, shall have complete discretion to determine
the terms and conditions of SARs granted under this Plan; provided,
however, that the exercise price per Share of a Freestanding SAR shall be
not less than one hundred percent (100%) of the Fair Market Value of a
Share on the Grant Date; provided further, that all SARs granted under this
Plan shall become immediately exercisable upon death or Disability or
(subject to the limitations set forth in Section 10.1) as of the first date
that a Change in Control shall be deemed to have occurred. The exercise
price per Share of Tandem or Affiliated SARs shall equal the Exercise Price
per Share of the related Option. In no event shall a SAR granted to a
Section 16 Person become exercisable until at least six (6) months after
the Grant Date or such shorter period as may be permissible while
maintaining compliance with Rule 16b-3.
6.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
-----------------------
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable. With respect to a Tandem SAR granted in connection with an
Incentive Stock Option: (a) the Tandem SAR shall expire no later than the
expiration of the underlying Incentive Stock Option; (b) the value of the payout
with respect to the Tandem SAR shall be for no more than one hundred percent
(100%) of the difference between the Exercise Price per Share of the underlying
Incentive Stock Option and the Fair Market Value per Share of the Shares subject
to the underlying Incentive Stock Option at the time the Tandem SAR is
exercised; (c) the Tandem SAR shall be exercisable only when the Fair Market
Value per Share of the Shares subject to the Incentive Stock Option exceeds the
Exercise Price per Share of the Incentive Stock Option; and (d) any transfer of
the Tandem SAR shall be ineffective unless accompanied by a transfer of the
related Incentive Stock Option.
6.3 Exercise of Affiliated SARs. An Affiliated SAR shall be deemed to be
---------------------------
exercised upon the exercise of the related Option. The deemed exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option.
6.4 Exercise of Freestanding SARS. Freestanding SARs shall be exercisable
-----------------------------
on such terms and conditions as the Administrator in its sole discretion shall
determine; provided, however, that no SAR granted to a Section 16 Person shall
be exercisable until at least six (6) months after the Grant Date or such
shorter period as may be permissible while maintaining compliance with Rule 16b-
3.
6.5 SAR Agreement. Each SAR grant shall be evidenced by an Award
-------------
Agreement that shall specify the exercise price per share, the term of the SAR,
the conditions of exercise, and such other terms and conditions as the
Administrator in its sole discretion shall determine.
6.6 Expiration of SARs. A SAR granted under this Plan shall expire on the
------------------
date set forth in the Award Agreement, which date shall be determined by the
Administrator in its sole discretion. Notwithstanding the foregoing, the terms
and provisions of Section 5.4 also shall apply to SARS.
9
<PAGE>
6.7 Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be
---------------------
entitled to receive payment from the Company in an amount determined by
multiplying (i) the positive difference between the Fair Market Value of a Share
on the date of exercise and the exercise price per Share by (ii) the number of
Shares with respect to which the SAR is exercised. At the sole discretion of
the Administrator, the payment upon SAR exercise may be in cash, in Shares of
equivalent value, or in any combination thereof.
10
<PAGE>
SECTION 7
MISCELLANEOUS
7.1 Deferrals. The Administrator in its sole discretion may permit a
---------
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be due to such Participant under an Award. Any such
deferral election shall be made at least one year prior to the due date, and
shall be subject to such rules and procedures as shall be determined by the
Administrator in its sole discretion.
7.2 No Effect on Employment or Service. Nothing in this Plan shall
----------------------------------
interfere with or limit in any way the right of the Company to terminate any
Participant's employment at any time, with or without cause. For purposes of
this Plan, transfer of employment of a Participant between the Company and any
of its Affiliates (or between Affiliates) shall not be deemed a Termination of
Service. Employment with the Company and its Affiliates is on an at-will basis
only, unless otherwise provided by an applicable employment agreement between
the Participant and the Company or its Affiliate, as the case may be.
7.3 Participation. No Employee shall have the right to be selected Award
-------------
under this Plan, or, having been so selected, to receive a future Award.
7.4 Indemnification. Each person who is or shall have been a member of
---------------
the Committee or the Board shall be indemnified and held harmless by the Company
against and from (a) any loss, cost, liability or expense (including attorneys'
fees) that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit or proceeding to which
he or she may be a party or in which he or she may be involved by reason of any
action taken or failure to act under this Plan or any Award Agreement, and (b)
from any and all amounts paid by him or her in settlement thereof, with the
Company's prior written approval, or paid by him or her in satisfaction of any
judgment in any such claim, action, suit, or proceeding against him or her;
provided, however, that he or she shall give the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Company's incorporation documents or Bylaws,
by contract, as a matter of law or otherwise. or under any power that the
Company may have to indemnify them or hold them harmless.
7.5 Successors. All obligations of the Company under this Plan, with
----------
respect to Awards granted hereunder, shall be binding on any successor of the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation or otherwise, of all or substantially
all of the business or assets of the Company.
7.6 Beneficiary Designation. If permitted by the Administrator, a
-----------------------
Participant under this Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant's death.
Each such designation shall revoke all prior designations by the
11
<PAGE>
Participant, and shall be effective only if given in a form-n and manner
acceptable to the Administrator. In the absence of any such designation, any
vested benefits remaining unpaid at the Participant's death shall be paid to the
Participant's estate and, subject to the terms of this Plan and of the
applicable Award Agreement, any unexercised vested Award may be exercised by the
administrator or executor of the Participant's estate. In each case, the named
beneficiary or beneficiaries or the executor of the Participant's estate, as the
case may be, shall have the right to exercise, pursuant to the terms hereof and
the terms of any applicable Award Agreement, the Awards made hereunder.
7.7 Nontransferability of Awards. Unless specifically provided otherwise
----------------------------
by the Administrator in the Award Agreement, no Award granted under this Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, by the laws of descent and distribution, or to
the limited extent provided in Section 7.6. Unless otherwise provided for in
the Award Agreement, all rights with respect to an Award granted to a
Participant shall be available during his or her lifetime only to the
Participant. In no event may Incentive Stock Options be transferred, except as
provided in this Section 7.7.
7.8 No Rights as Stockholder. No Participant nor any beneficiary thereof
------------------------
shall have any of the rights or privileges of a stockholder of the Company with
respect to any Shares issuable pursuant to an Award or the exercise thereof,
unless and until certificates representing such Shares shall have been issued,
recorded on the records of the Company or its transfer agents or registrars, and
delivered to the Participant or his or her beneficiary.
SECTION 8
AMENDMENT, TERMINATION, AND DURATION
8.1 Amendment, Suspension, or Termination. The Board in its sole
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discretion may amend or terminate this Plan, or any part thereof, at any time
and for any reason; provided, however, that if and to the extent required to
maintain this Plan's qualification under Rule 16b-3 or to comply with Section
422(b)(1) of the Code, any such amendment shall be subject to stockholder
approval. The amendment, suspension or termination of this Plan shall not,
without the consent of the Participant, alter or impair any rights or
obligations under any Award theretofore granted to such Participant. No Award
may be granted during any period of suspension or after termination of this
Plan.
8.2 Duration of this Plan. This Plan shall become effective on the date
---------------------
specified herein, and subject to Section 8. 1, shall remain in effect
thereafter; provided, however, that without further stockholder approval, no
Incentive Stock Option may be granted under this Plan after the tenth
anniversary of the effective date of this Plan.
SECTION 9
TAX WITHHOLDING
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9.1 Withholding Requirements. Prior to the delivery of any Shares or cash
------------------------
pursuant to an Award or the exercise thereof, the Company shall have the power
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy Federal, state, and local taxes,
including the Participant's Social Security tax obligation, required to be
withheld with respect to such Award or the exercise thereof.
9.2 Withholding Arrangements. The Administrator, in its sole discretion
------------------------
and pursuant to such procedures as it may specify from time to time, may permit
a Participant to satisfy such tax withholding obligation, in whole or in part,
by (a) electing to have the Company withhold otherwise deliverable Shares, or
(b) delivering to the Company Shares then owned by the Participant having a Fair
Market Value equal to the amount required to be withheld. The amount of the
withholding requirement shall be deemed to include any amount that the
Administrator agrees may be withheld at the time any such election is made, not
to exceed the amount determined by using the maximum federal, state, or local
marginal income tax rates applicable to the Participant with respect to the
Award on the date that the amount of tax to be withheld is to be determined.
The Fair Market Value of the Shares to be withheld or delivered shall be
determined as of the date that the taxes are required to be withheld.
SECTION 10
CHANGE IN CONTROL
10.1 Change in Control. In the event of a Change in Control of the
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Company, all Awards granted under this Plan that are then outstanding and not
then exercisable, or are then subject to restrictions, shall, unless otherwise
provided for in the Agreements applicable thereto, become immediately
exercisable as of the first date that the Change in Control shall be deemed to
have occurred, and shall remain as such for the remaining life of the Award as
provided herein and within the provisions of the related Agreements; provided
however, that the Board of Directors of the Company may limit the applicability
of this Section with respect to that portion of any Award to which Section 28OG
of the Code is applicable.
10.2 Definition. For purposes of Section 10.1 above, a Change in Control
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of the Company shall be deemed to have occurred if the conditions set forth in
any one or more of the following shall have been satisfied, unless such
condition shall have received prior approval of a majority vote of the
Continuing Directors, as defined below, indicating that Section 10.1 shall not
apply thereto:
(a) any "person" (as such term is used in Section 13(d) of the
Exchange Act, but excluding the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing thirty percent
(30%) or more of the combined voting power of the Company's then
outstanding securities;
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(b) during any period of two consecutive years (not including any
period prior to the Effective Date of this Plan), individuals
("Existing Directors") who at the beginning of such period constitute
the Board of Directors, and any new director (an "Approved Director")
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in
paragraph (a), (b) or (c) of this Section) whose election by the Board
of Directors or nomination for election by the Company's stockholders
was approved by a vote of a least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the
period or whose election or nomination for election previously was so
approved (Existing Directors together with Approved Directors
constituting "Continuing Directors"), cease for any reason to
constitute at least a majority of the Board of Directors; or
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other person, other than (i) a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities for the surviving entity) more than fifty percent
(50%) of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation, or (ii) a merger in which no "person" (as
defined in Section 10.2(a)) acquires more than thirty percent (30%) of
the combined voting power of the Company's then outstanding
securities; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets or
any transaction having a similar effect.
SECTION 11
LEGAL CONSTRUCTION
11.1 Gender and Number. Except where otherwise indicated by the context,
-----------------
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
11.2 Severability. In the event any provision of this Plan shall be held
------------
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.
11.3 Requirements of Law. The grant of Awards and the issuance of Shares
-------------------
under this Plan shall be subject to all applicable laws, rules and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required from time to time.
11.4 Securities Law Compliance. With respect to Section 16 Persons, Awards
-------------------------
under this Plan are intended to comply with all applicable conditions of Rule
16b-3. To the extent any provision
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of this Plan, Award Agreement or action by the Administrator fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable or appropriate by the Administrator in its sole discretion.
11.5 Governing Law. This Plan and all Award Agreements shall be construed
-------------
in accordance with and governed by the laws of the State of Missouri, excluding
its conflict of laws provisions.
11.6 Captions. Captions are provided herein for convenience of reference
--------
only, and shall not serve as a basis for interpretation or construction of this
Plan.
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