<PAGE> 1
As filed with the Securities and Exchange Commission on July 11, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-------------------
U.S. HOMECARE CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 13-2853680
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
TWO HARTFORD SQUARE WEST, HARTFORD CONNECTICUT 06106
(Address of principal executive offices) (Zip code)
-------------------
1995 STOCK OPTION/STOCK ISSUANCE PLAN, AS AMENDED
(Full title of the Plan)
-------------------
JAY C. HUFFARD
PRESIDENT AND CHIEF EXECUTIVE OFFICER, CHAIRMAN AND DIRECTOR
U.S. HOMECARE CORPORATION
TWO HARTFORD SQUARE WEST, HARTFORD CONNECTICUT 06106
(Name and address of agent for service)
(860) 278-7242
(Telephone number, including area code, of agent for service)
-------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ---------- --------- ----- ---
<S> <C> <C> <C> <C>
Options to purchase 2,550,000 N/A N/A N/A
Common Stock
Common Stock,
$0.01 par value 2,550,000 shares $1.1875 $3,028,125 $917.61
===============================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1995 Stock Option/Stock
Issuance Plan, as amended by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of
the outstanding shares of Common Stock of U.S. HomeCare Corporation.
(2) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, on the basis of the average of
the bid and asked prices per share of Common Stock of U.S. HomeCare
Corporation on July 9, 1997 as reported on the OTC Bulletin Board.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
U.S. HomeCare Corporation (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, filed with the SEC on March 31,
1997;
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997, filed with the SEC on May 2, 1997; and
(c) The Registrant's Registration Statement No. 0-19240 on Form
8-A, as amended, filed with the SEC on May 29, 1991 pursuant
to Section 12 of the Securities and Exchange Act of 1934, as
amended, (the "1934 Act") in which there is described the
terms, rights and provisions applicable to the Registrant's
outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of
this Registration Statement and 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 into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Reference is made to Article IX of the Registrant's Restated
Certificate of Incorporation filed as Exhibit 3(a) to the Registrant's
Registration Statement No. 33-40288 on Form S-1, Article VI of the Registrant's
Bylaws filed as Exhibit 3(b) to the Registrant's Registration Statement No.
33-40288 on Form S-1 and Sections 720 through 726 of the New York Business
Corporation Law.
<PAGE> 3
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit Number Exhibit
4 Instruments Defining the Rights of Stockholders. Reference is
made to the Registrant's Registration Statement No. 0-19240 on
Form 8-A which is incorporated herein by reference pursuant to
Item 3(c) of this Registration Statement.
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1995 Stock Option/Stock Issuance Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Addendum to Stock Option Agreement (Limited Stock Appreciation
Right).
99.5 Addendum to Stock Option Agreement (Financial Assistance).
99.6 Addendum to Stock Option Agreement (Special Tax Elections).
99.7 Addendum to Stock Option Agreement (Involuntary Termination).
99.8 Form of Notice of Grant of Non-Employee Director Automatic
Stock Option.
99.9 Form of Automatic Stock Option Agreement.
99.10 Form of Stock Issuance Agreement.
99.11 Addendum to Stock Issuance Agreement (Special Tax Elections).
99.12 Addendum to Stock Issuance Agreement (Involuntary
Termination).
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933, as amended (the "1933 Act"),
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement,
and (iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; provided,
however, that clauses (1)(i) and (1)(ii) shall not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the 1934 Act that are incorporated by reference into the
Registration Statement; (2) that for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the Registrant's 1995 Stock Option/Stock Issuance
Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into the Registration Statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
II-2
<PAGE> 4
be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the indemnity provisions incorporated by reference in
Item 6 above, or otherwise, the Registrant has been informed that, in the
opinion of the SEC, such indemnification is against public policy as expressed
in the 1933 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 1933 Act, and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Hartford, State of Connecticut, on this 10th day
of July, 1997.
U.S. HOMECARE CORPORATION
By: /s/ Jay C. Huffard
-----------------------------------
Jay C. Huffard
President, Chief Executive Officer,
Chairman and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of U.S. HomeCare
Corporation, a New York corporation, do hereby constitute and appoint Jay C.
Huffard and Clifford G. Johnson, and each of them, the lawful attorneys and
agents, with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and any one of
them, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or any of them, shall do or cause to be done
by virtue hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
II-4
<PAGE> 6
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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Jay C. Huffard
- --------------------------- President, Chief July 10, 1997
Jay C. Huffard Executive Officer,
Chairman and Director
(Principal Executive Officer)
/s/ Clifford G. Johnson
- --------------------------- Vice President, Finance and July 10, 1997
Clifford G. Johnson Administrator, Chief Financial Officer
(Principal Financial and Accounting
Officer)
- ---------------------------- Director July 10, 1997
Hadley C. Ford
- ---------------------------- Director July 10, 1997
John R. Gunn
/s/ W. Wallace McDowell, Jr.
- ---------------------------- Director July 10, 1997
W. Wallace McDowell, Jr.
/s/ Shawkat Raslan
- ---------------------------- Director July 10, 1997
Shawkat Raslan
/s/ Susan S. Robfogel
- -------------------------- Director July 10, 1997
Susan S. Robfogel
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
Exhibit Number Exhibit
4 Instruments Defining the Rights of Stockholders. Reference
is made to the Registrant's Registration Statement No.
0-19240 on Form 8-A which is incorporated herein by
reference pursuant to Item 3(c) of this Registration
Statement.
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1995 Stock Option/Stock Issuance Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Addendum to Stock Option Agreement (Limited Stock
Appreciation Right).
99.5 Addendum to Stock Option Agreement (Financial Assistance).
99.6 Addendum to Stock Option Agreement (Special Tax
Elections).
99.7 Addendum to Stock Option Agreement (Involuntary
Termination).
99.8 Form of Notice of Grant of Non-Employee Director Automatic
Stock Option.
99.9 Form of Automatic Stock Option Agreement.
99.10 Form of Stock Issuance Agreement.
99.11 Addendum to Stock Issuance Agreement (Special Tax
Elections).
99.12 Addendum to Stock Issuance Agreement (Involuntary
Termination).
<PAGE> 1
EXHIBIT 5
Opinion and Consent of Brobeck, Phleger & Harrison LLP
July 11, 1997
U.S. HOMECARE CORPORATION
750 Main Street
Hartford, Connecticut 06103
RE: U.S. HOMECARE CORPORATION (THE "COMPANY") -- REGISTRATION
STATEMENT FOR OFFERING OF 2,550,000 SHARES OF COMMON STOCK
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of 2,550,000 shares of
the Company's Common Stock authorized for issuance under the Company's 1995
Stock Option/Stock Issuance Plan, as amended (the "Plan"). We advise you that,
in our opinion, when such shares have been issued and sold pursuant to the
applicable provisions of the Plan and in accordance with the Registration
Statement, such shares will be validly issued, fully paid and nonassessable
shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
U.S. HomeCare Corporation on Form S-8 of our report dated March 27, 1997
appearing in the Annual Report on Form 10-K of U.S. HomeCare Corporation for
the year ended December 31, 1996.
Deloitte & Touche LLP
Hartford, Connecticut
July 11, 1997
<PAGE> 1
EXHIBIT 99.1
U.S. HOMECARE CORPORATION
1995 STOCK OPTION/STOCK ISSUANCE PLAN
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 1995 Stock Option/Stock Issuance Plan is intended to
promote the interests of U.S. HomeCare Corporation, a New York corporation, by
providing eligible persons with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Corporation
as an incentive for them to remain in the service of the Corporation.
Capitalized terms shall have the meanings assigned to such
terms in the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into four separate equity
programs:
(i) the Discretionary Option Grant Program
under which eligible persons may, at the discretion of the Plan
Administrator, be granted options to purchase shares of Common Stock,
(ii) the Stock Issuance Program under which
eligible persons may, at the discretion of the Plan Administrator, be
issued shares of Common Stock directly, either through the immediate
purchase of such shares or as a bonus for services rendered the
Corporation (or any Parent or Subsidiary),
(iii) the Automatic Option Grant Program
under which Eligible Directors shall automatically receive option
grants to purchase shares of Common Stock, and
(iv) the Director Stock Fee Program under
which non- employee Board members shall automatically be issued shares
of Common Stock in lieu of their quarterly retainer fees and fees
accrued with respect to attendance at regular or special meetings of
the Board or any Committee thereof.
<PAGE> 2
B. The provisions of Articles One and Six shall apply to all
equity programs under the Plan and shall accordingly govern the interests of all
persons under the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive
authority to administer the Discretionary Option Grant and Stock Issuance
Programs with respect to Section 16 Insiders. No non-employee Board member shall
be eligible to serve on the Primary Committee if such individual has, during the
twelve (12)-month period immediately preceding the date of his or her
appointment to the Committee, received an option grant or direct stock issuance
under the Plan or any stock option, stock appreciation, stock bonus or other
stock plan of the Corporation (or any Parent or Subsidiary), other than pursuant
to the Automatic Option Grant Program or the Director Stock Fee Program.
B. Administration of the Discretionary Option Grant and Stock
Issuance Programs with respect to all other persons eligible to participate in
these programs may, at the Board's discretion, be vested in the Primary
Committee or a Secondary Committee, or the Board may retain the power to
administer these programs with respect to all such persons. The members of the
Secondary Committee may be individuals who are Employees eligible to receive
discretionary option grants or direct stock issuances under the Plan or any
stock option, stock appreciation, stock bonus or other stock plan of the
Corporation (or any Parent or Subsidiary).
C. Members of the Primary Committee or any Secondary Committee
shall serve for such period of time as the Board may determine and shall be
subject to removal by the Board at any time. The Board may also at any time
terminate the functions of any Secondary Committee and reassume all powers and
authority previously delegated to such Committee.
D. The Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Discretionary Option Grant and
Stock Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of such programs and any outstanding options
or stock issuances thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant or Stock Issuance Program under its jurisdiction or
any option or stock issuance thereunder.
E. Service on the Primary Committee or the Secondary Committee
shall constitute service as a Board member, and members of each such committee
shall accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.
2.
<PAGE> 3
F. Administration of the Automatic Option Grant Program and
the Director Stock Fee Program shall be self-executing in accordance with the
terms of such programs, and no Plan Administrator shall exercise any
discretionary functions with respect to option grants and stock issuances made
thereunder.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary
Option Grant and Stock Issuance Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board (other
than those serving as members of the Primary Committee) or the board of
directors of any Parent or Subsidiary, and
(iii) consultants and other independent
advisors who provide services to the Corporation (or any Parent or
Subsidiary).
B. The Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority to determine,
(i) with respect to the option grants under the Discretionary Option Grant
Program, which eligible persons are to receive option grants, the time or times
when such option grants are to be made, the number of shares to be covered by
each such grant, the status of the granted option as either an Incentive Option
or a Non-Statutory Option, the time or times at which each option is to become
exercisable, the vesting schedule (if any) applicable to the option shares and
the maximum term for which the option is to remain outstanding and (ii) with
respect to stock issuances under the Stock Issuance Program, which eligible
persons are to receive stock issuances, the time or times when such issuances
are to be made, the number of shares to be issued to each Participant, the
vesting schedule (if any) applicable to the issued shares and the consideration
to be paid by the Participant for such shares.
C. The Plan Administrator shall have the absolute discretion
either to grant options in accordance with the Discretionary Option Grant
Program or to effect stock issuances in accordance with the Stock Issuance
Program.
D. The individuals eligible to receive option grants under the
Automatic Option Grant Program shall be those individuals who are serving as
non-employee Board members on the Automatic Option Grant Program Effective Date
or who are first elected or appointed as non-employee Board members after such
date, whether through appointment by the Board or election by the Corporation's
shareholders.
E. The individuals eligible to participate in the Director
Stock Fee Program shall be the non-employee Board members.
3.
<PAGE> 4
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Corporation on the open market. The maximum number of shares of Common
Stock which may be issued over the term of the Plan shall initially not exceed
2,550,000 shares. Such authorized share reserve is comprised of (i) the number
of shares which remained available for issuance, as of the Plan Effective Date,
under the Predecessor Plan as last approved by the Corporation's shareholders
prior to such date, including the shares subject to the outstanding options
incorporated into the Plan and any other shares which would have been available
for future option grants under the Predecessor Plan on the basis of an
additional increase of 675,000 shares of Common Stock authorized for issuance
under the Predecessor Plan on December 21, 1994, plus (ii) an increase of
350,000 shares authorized by the Board on December 21, 1994.
B. No one person participating in the Plan may receive
options, separately exercisable stock appreciation rights and direct stock
issuances for more than 1,000,000 shares of Common Stock in the aggregate over
the term of the Plan.
C. Shares of Common Stock subject to outstanding options shall
be available for subsequent issuance under the Plan to the extent (i) the
options (including any options incorporated from the Predecessor Plan) expire or
terminate for any reason prior to exercise in full or (ii) the options are
cancelled in accordance with the cancellation-regrant provisions of Article Two.
All shares issued under the Plan (including shares issued upon exercise of
options incorporated from the Predecessor Plan), whether or not those shares are
subsequently repurchased by the Corporation pursuant to its repurchase rights
under the Plan, shall reduce on a share-for-share basis the number of shares of
Common Stock available for subsequent issuance under the Plan. In addition,
should the exercise price of an option under the Plan (including any option
incorporated from the Predecessor Plan) be paid with shares of Common Stock or
should shares of Common Stock otherwise issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding taxes incurred in connection
with the exercise of an option or the vesting of a stock issuance under the
Plan, then the number of shares of Common Stock available for issuance under the
Plan shall be reduced by the gross number of shares for which the option is
exercised or which vest under the stock issuance, and not by the net number of
shares of Common Stock issued to the holder of such option or stock issuance.
D. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or class of securities
issuable under the Plan, (ii) the number and/or class of securities for which
any one person may be granted options, separately exercisable stock appreciation
rights and direct stock issuances over the term of the Plan, (iii) the maximum
number and/or class of securities for which automatic option grants are to be
subsequently made per Eligible Director under the Automatic Option Grant Program
and (iv) the number and/or class of securities and the exercise
4.
<PAGE> 5
price per share in effect under each outstanding option (including any option
incorporated from the Predecessor Plan) in order to prevent the dilution or
enlargement of benefits thereunder. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.
5.
<PAGE> 6
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the
form approved by the Plan Administrator; provided, however, that each such
document shall comply with the terms specified below. Each document evidencing
an Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. Exercise Price.
1. The exercise price per share shall be fixed by the
Plan Administrator but shall not be less than eighty-five percent (85%) of the
Fair Market Value per share of Common Stock on the option grant date.
2. The exercise price shall become immediately due
upon exercise of the option and shall, subject to the provisions of Section I of
Article Six and the documents evidencing the option, be payable in one or more
of the forms specified below:
(i) cash or check made payable to the
Corporation,
(ii) shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date, or
(iii) to the extent the option is exercised
for vested shares, through a special sale and remittance procedure
pursuant to which the Optionee shall concurrently provide irrevocable
written instructions to (a) a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the
purchased shares plus all applicable Federal, state and local income
and employment taxes required to be withheld by the Corporation by
reason of such exercise and (b) the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm
in order to complete the sale transaction.
Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
6.
<PAGE> 7
B. Exercise and Term of Options. Each option shall be
exercisable at such time or times, during such period and for such number of
shares as shall be determined by the Plan Administrator and set forth in the
documents evidencing the option. However, no option shall have a term in excess
of ten (10) years measured from the option grant date.
C. Effect of Termination of Service.
1. The following provisions shall govern the exercise
of any options held by the Optionee at the time of cessation of Service or
death:
(i) Any option outstanding at the time of the
Optionee's cessation of Service for any reason shall remain exercisable
for such period of time thereafter as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option, but
no such option shall be exercisable after the expiration of the option
term.
(ii) Any option exercisable in whole or in
part by the Optionee at the time of death may be subsequently exercised
by the personal representative of the Optionee's estate or by the
person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and
distribution.
(iii) During the applicable post-Service
exercise period, the option may not be exercised in the aggregate for
more than the number of vested shares for which the option is
exercisable on the date of the Optionee's cessation of Service. Upon
the expiration of the applicable exercise period or (if earlier) upon
the expiration of the option term, the option shall terminate and cease
to be outstanding for any vested shares for which the option has not
been exercised. However, the option shall, immediately upon the
Optionee's cessation of Service, terminate and cease to be outstanding
to the extent it is not exercisable for vested shares on the date of
such cessation of Service.
(iv) Should the Optionee's Service be
terminated for Misconduct, then all outstanding options held by the
Optionee shall terminate immediately and cease to be outstanding.
(v) In the event of a Corporate Transaction,
the provisions of Section III of this Article Two shall govern the
period for which the outstanding options are to remain exercisable
following the Optionee's cessation of Service and shall supersede any
provisions to the contrary in this section.
2. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
7.
<PAGE> 8
(i) extend the period of time for which the
option is to remain exercisable following the Optionee's cessation of
Service from the period otherwise in effect for that option to such
greater period of time as the Plan Administrator shall deem
appropriate, but in no event beyond the expiration of the option term,
and/or
(ii) permit the option to be exercised,
during the applicable post-Service exercise period, not only with
respect to the number of vested shares of Common Stock for which such
option is exercisable at the time of the Optionee's cessation of
Service but also with respect to one or more additional installments in
which the Optionee would have vested under the option had the Optionee
continued in Service.
D. Shareholder Rights. The holder of an option shall have no
shareholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. Repurchase Rights. The Plan Administrator shall have the
discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase, at the exercise price paid per
share, any or all of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall be established
by the Plan Administrator and set forth in the document evidencing such
repurchase right.
F. Limited Transferability of Options. During the lifetime of
the Optionee, the option shall be exercisable only by the Optionee and shall not
be assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee's death. However, a Non-Statutory Option may
be assigned in accordance with the terms of a Qualified Domestic Relations
Order. The assigned option may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to such Qualified Domestic
Relations Order. The terms applicable to the assigned option (or portion
thereof) shall be the same as those in effect for the option immediately prior
to such assignment and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Five shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall not be subject to the terms of this Section II.
A. Eligibility. Incentive Options may only be granted to
Employees.
8.
<PAGE> 9
B. Exercise Price. The exercise price per share shall not be
less than one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the option grant date.
C. Dollar Limitation. The aggregate Fair Market Value of the
shares of Common Stock (determined as of the respective date or dates of grant)
for which one or more options granted to any Employee under the Plan (or any
other option plan of the Corporation or any Parent or Subsidiary) may for the
first time become exercisable as Incentive Options during any one (1) calendar
year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the
extent the Employee holds two (2) or more such options which become exercisable
for the first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
D. 10% Shareholder. If any Employee to whom an Incentive
Option is granted is a 10% Shareholder, then the exercise price per share shall
not be less than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the option grant date, and the option term shall not
exceed five (5) years measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. Subject to Section III.C below, in the event of any
Corporate Transaction, each outstanding option shall automatically accelerate so
that each such option shall, immediately prior to the effective date of the
Corporate Transaction, become fully exercisable for all of the shares of Common
Stock at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. However, an outstanding
option shall NOT so accelerate if and to the extent: (i) such option is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation (or parent thereof) or to be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation (or parent
thereof), (ii) such option is to be replaced with a cash incentive program of
the successor corporation which preserves the spread existing on the unvested
option shares at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same vesting schedule applicable to
such option or (iii) the acceleration of such option is subject to other
limitations imposed by the Plan Administrator at the time of the option grant.
The determination of option comparability under clause (i) above shall be made
by the Plan Administrator, and its determination shall be final, binding and
conclusive.
B. Subject to Section III.C below, all outstanding repurchase
rights shall also terminate automatically, and the shares of Common Stock
subject to those terminated rights shall immediately vest in full, in the event
of any Corporate Transaction, except to the extent: (i) those repurchase rights
are to be assigned to the successor corporation (or parent thereof) in
connection with such Corporate Transaction or (ii) such accelerated vesting is
precluded by other limitations imposed by the Plan Administrator at the time the
repurchase right is issued.
9.
<PAGE> 10
C. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide for the automatic acceleration of one or
more outstanding options (and the automatic termination of one or more
outstanding repurchase rights with the immediate vesting of the shares of Common
Stock subject to those rights) upon the occurrence of a Corporate Transaction,
whether or not those options are to be assumed or replaced (or those repurchase
rights are to be assigned) in the Corporate Transaction.
D. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
E. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan on both an aggregate and per
Optionee basis following the consummation of such Corporate Transaction and (ii)
the exercise price payable per share under each outstanding option, provided the
aggregate exercise price payable for such securities shall remain the same.
F. Any options which are assumed or replaced in the Corporate
Transaction and do not otherwise accelerate at that time, shall automatically
accelerate (and any of the Corporation's outstanding repurchase rights which do
not otherwise terminate at the time of the Corporate Transaction shall
automatically terminate and the shares of Common Stock subject to those
terminated rights shall immediately vest in full) in the event the Optionee's
Service should subsequently terminate by reason of an Involuntary Termination
within eighteen (18) months following the effective date of such Corporate
Transaction. Any options so accelerated shall remain exercisable for
fully-vested shares until the earlier of (i) the expiration of the option term
or (ii) the expiration of the one (1)-year period measured from the effective
date of the Involuntary Termination.
G. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to (i) provide for the automatic acceleration of one
or more outstanding options (and the automatic termination of one or more
outstanding repurchase rights with the immediate vesting of the shares of Common
Stock subject to those rights) upon the occurrence of a Change in Control or
(ii) condition any such option acceleration (and the termination of any
outstanding repurchase rights) upon the subsequent Involuntary Termination of
the Optionee's Service within a specified period following the effective date of
such Change in Control. Any options accelerated in connection with a Change in
Control shall remain fully exercisable until the expiration or sooner
termination of the option term.
10.
<PAGE> 11
H. The portion of any Incentive Option accelerated in
connection with a Corporate Transaction or Change in Control shall remain
exercisable as an Incentive Option only to the extent the applicable One Hundred
Thousand Dollar limitation is not exceeded. To the extent such dollar limitation
is exceeded, the accelerated portion of such option shall be exercisable as a
Non-Statutory Option under the Federal tax laws.
I. The grant of options under the Discretionary Option Grant
Program shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at
any time and from time to time, with the consent of the affected option holders,
the cancellation of any or all outstanding options under the Discretionary
Option Grant Program (including outstanding options incorporated from the
Predecessor Plan) and to grant in substitution new options covering the same or
different number of shares of Common Stock but with an exercise price per share
based on the Fair Market Value per share of Common Stock on the new option grant
date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority
to grant to selected Optionees tandem stock appreciation rights and/or limited
stock appreciation rights.
B. The following terms shall govern the grant and exercise of
tandem stock appreciation rights:
(i) One or more Optionees may be granted the
right, exercisable upon such terms as the Plan Administrator may
establish, to elect between the exercise of the underlying option for
shares of Common Stock and the surrender of that option in exchange for
a distribution from the Corporation in an amount equal to the excess of
(A) the Fair Market Value (on the option surrender date) of the number
of shares in which the Optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (B) the
aggregate exercise price payable for such shares.
(ii) No such option surrender shall be
effective unless it is approved by the Plan Administrator. If the
surrender is so approved, then the distribution to which the Optionee
shall be entitled may be made in shares of Common Stock valued at Fair
Market Value on the option surrender date, in cash, or partly in shares
and partly in cash, as the Plan Administrator shall in its sole
discretion deem appropriate.
11.
<PAGE> 12
(iii) If the surrender of an option is
rejected by the Plan Administrator, then the Optionee shall retain
whatever rights the Optionee had under the surrendered option (or
surrendered portion thereof) on the option surrender date and may
exercise such rights at any time prior to the later of (A) five (5)
business days after the receipt of the rejection notice or (B) the last
day on which the option is otherwise exercisable in accordance with the
terms of the documents evidencing such option, but in no event may such
rights be exercised more than ten (10) years after the option grant
date.
C. The following terms shall govern the grant and exercise of
limited stock appreciation rights:
(i) One or more Section 16 Insiders may be
granted limited stock appreciation rights with respect to their
outstanding options.
(ii) Upon the occurrence of a Hostile
Take-Over, each such individual holding one or more options with such a
limited stock appreciation right in effect for at least six (6) months
shall have the unconditional right (exercisable for a thirty (30)-day
period following such Hostile Take-Over) to surrender each such option
to the Corporation, to the extent the option is at the time exercisable
for vested shares of Common Stock. In return for the surrendered
option, the Optionee shall receive a cash distribution from the
Corporation in an amount equal to the excess of (A) the Take-Over Price
of the shares of Common Stock which are at the time vested under each
surrendered option (or surrendered portion thereof) over (B) the
aggregate exercise price payable for such shares. Such cash
distribution shall be paid within five (5) days following the option
surrender date.
(iii) Neither the approval of the Plan
Administrator nor the consent of the Board shall be required in
connection with such option surrender and cash distribution.
(iv) The balance of the option (if any) shall
continue in full force and effect in accordance with the documents
evidencing such option.
12.
<PAGE> 13
ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance
Program through direct and immediate issuances without any intervening option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below.
A. Purchase Price.
1. The purchase price per share shall be fixed by the
Plan Administrator, but shall not be less than eighty-five percent (85%) of the
Fair Market Value per share of Common Stock on the stock issuance date.
2. Subject to the provisions of Section I of Article
Six, shares of Common Stock may be issued under the Stock Issuance Program for
one or both of the following items of consideration which the Plan Administrator
may deem appropriate in each individual instance:
(i) cash or check made payable to the
Corporation, or
(ii) past services rendered to the
Corporation (or any Parent or Subsidiary).
B. Vesting Provisions.
1. Shares of Common Stock issued under the Stock
Issuance Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program, namely:
(i) the Service period to be completed by the
Participant or the performance objectives to be attained,
(ii) the number of installments in which the
shares are to vest,
13.
<PAGE> 14
(iii) the interval or intervals (if any)
which are to lapse between installments, and
(iv) the effect which death, Permanent
Disability or other event designated by the Plan Administrator is to
have upon the vesting schedule,
shall be determined by the Plan Administrator and incorporated into the Stock
Issuance Agreement.
2. Any new, substituted or additional securities or
other property (including money paid other than as a regular cash dividend)
which the Participant may have the right to receive with respect to the
Participant's unvested shares of Common Stock by reason of any stock dividend,
stock split, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration shall be issued subject to (i) the same
vesting requirements applicable to the Participant's unvested shares of Common
Stock and (ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.
3. The Participant shall have full shareholder rights
with respect to any shares of Common Stock issued to the Participant under the
Stock Issuance Program, whether or not the Participant's interest in those
shares is vested. Accordingly, the Participant shall have the right to vote such
shares and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service
while holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further shareholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to such surrendered shares.
5. The Plan Administrator may in its discretion waive
the surrender and cancellation of one or more unvested shares of Common Stock
(or other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to such shares. Such waiver
shall result in the immediate vesting of the Participant's interest in the
shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non- attainment of the applicable performance
objectives.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
14.
<PAGE> 15
A. All of the outstanding repurchase rights under the Stock
Issuance Program shall terminate automatically, and all the shares of Common
Stock subject to those terminated rights shall immediately vest in full, in the
event of any Corporate Transaction, except to the extent (i) those repurchase
rights are assigned to the successor corporation (or parent thereof) in
connection with such Corporate Transaction or (ii) such accelerated vesting is
precluded by other limitations imposed in the Stock Issuance Agreement.
B. The Plan Administrator shall have the discretion,
exercisable either at the time the unvested shares are issued or at any time
while the Corporation's repurchase right remains outstanding, to provide for the
automatic termination of one or more outstanding repurchase rights, and the
immediate vesting of the shares of Common Stock subject to those rights, upon
the occurrence of a Corporate Transaction, whether or not those repurchase
rights are assigned in connection with the Corporate Transaction.
C. Any repurchase rights that are assigned in the Corporate
Transaction shall automatically terminate, and all the shares of Common Stock
subject to those terminated rights shall immediately vest in full, in the event
the Optionee's Service should subsequently terminate by reason of an Involuntary
Termination within eighteen (18) months following the effective date of such
Corporate Transaction.
D. The Plan Administrator shall have the discretion,
exercisable either at the time the unvested shares are issued or at any time
while the Corporation's repurchase right remains outstanding, to (i) provide for
the automatic termination of one or more outstanding repurchase rights and the
immediate vesting of the shares of Common Stock subject to those rights upon the
occurrence of a Change in Control or (ii) condition any such accelerated vesting
upon the subsequent Involuntary Termination of the Participant's Service within
a specified period following the effective date of such Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion,
be held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.
15.
<PAGE> 16
ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
I. OPTION TERMS
A. Grant Dates. Each Eligible Director who is a non-employee
Board member on the Automatic Option Grant Program Effective Date and each
Eligible Director who is first elected or appointed as a non-employee Board
member after such date shall automatically be granted, on the Automatic Option
Grant Program Effective Date or on the date of such initial election or
appointment (as the case may be), a Non-Statutory Option to purchase 25,000
shares of Common Stock.
B. Exercise Price.
1. The exercise price per share shall be equal to one
hundred percent (100%) of the Fair Market Value per share of Common Stock on the
option grant date.
2. The exercise price shall be payable in one or more
of the alternative forms authorized under the Discretionary Option Grant
Program. Except to the extent the sale and remittance procedure specified
thereunder is utilized, payment of the exercise price for the purchased shares
must be made on the Exercise Date.
C. Option Term. Each option shall have a term of ten (10)
years measured from the option grant date.
D. Exercise and Vesting of Options. Each option shall be
immediately exercisable for any or all of the option shares. However, any shares
purchased under the option shall be subject to repurchase by the Corporation, at
the exercise price paid per share, upon the Optionee's cessation of Board
service prior to vesting in those shares. Each initial grant shall vest, and the
Corporation's repurchase right shall lapse, in a series of three (3) equal and
successive annual installments over the Optionee's period of continued service
as a Board member, with the first such installment to vest upon the option grant
date.
E. Effect of Termination of Board Service. The following
provisions shall govern the exercise of any options held by the Optionee at the
time the Optionee ceases to serve as a Board member:
(i) The Optionee (or, in the event of Optionee's
death, the personal representative of the Optionee's estate or the
person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and
distribution) shall have a twelve (12)-month period following
16.
<PAGE> 17
the date of such cessation of Board service in which to exercise each
such option.
(ii) During the twelve (12)-month exercise period,
the option may not be exercised in the aggregate for more than the
number of vested shares of Common Stock for which the option is
exercisable at the time of the Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve as a Board
member by reason of death or Permanent Disability, then all shares at
the time subject to the option shall immediately vest so that such
option may, during the twelve (12)-month exercise period following such
cessation of Board service, be exercised for all or any portion of such
shares as fully-vested shares of Common Stock.
(iv) In no event shall the option remain exercisable
after the expiration of the option term. Upon the expiration of the
twelve (12)-month exercise period or (if earlier) upon the expiration
of the option term, the option shall terminate and cease to be
outstanding for any vested shares for which the option has not been
exercised. However, the option shall, immediately upon the Optionee's
cessation of Board service, terminate and cease to be outstanding to
the extent it is not exercisable for vested shares on the date of such
cessation of Board service.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the shares of
Common Stock at the time subject to each outstanding option but not otherwise
vested shall automatically vest in full so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become
fully exercisable for all of the shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of such shares as
fully-vested shares of Common Stock. Immediately following the consummation of
the Corporate Transaction, each automatic option grant shall terminate and cease
to be outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
B. In connection with any Change in Control, the shares of
Common Stock at the time subject to each outstanding option but not otherwise
vested shall automatically vest in full so that each such option shall,
immediately prior to the effective date of the Change in Control, become fully
exercisable for all of the shares of Common Stock at the time subject to such
option and may be exercised for all or any portion of such shares as
fully-vested shares of Common Stock. Each such option shall remain exercisable
for such fully-vested option shares until the expiration or sooner termination
of the option term or the surrender of the option in connection with a Hostile
Take-Over.
17.
<PAGE> 18
C. Upon the occurrence of a Hostile Take-Over, the Optionee
shall have a thirty (30)-day period in which to surrender to the Corporation
each automatic option held by him or her for a period of at least six (6)
months. The Optionee shall in return be entitled to a cash distribution from the
Corporation in an amount equal to the excess of (i) the Take-Over Price of the
shares of Common Stock at the time subject to the surrendered option (whether or
not the Optionee is otherwise at the time vested in those shares) over (ii) the
aggregate exercise price payable for such shares. Such cash distribution shall
be paid within five (5) days following the surrender of the option to the
Corporation. No approval or consent of the Board shall be required in connection
with such option surrender and cash distribution.
D. The grant of options under the Automatic Option Grant
Program shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
III. AMENDMENT OF THE AUTOMATIC OPTION GRANT PROGRAM
The provisions of this Automatic Option Grant Program,
together with the option grants outstanding thereunder, may not be amended at
intervals more frequently than once every six (6) months, other than to the
extent necessary to comply with applicable Federal income tax laws and
regulations.
IV. REMAINING TERMS
The remaining terms of each option granted under the Automatic
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Option Grant Program.
18.
<PAGE> 19
ARTICLE FIVE
DIRECTOR STOCK FEE PROGRAM
I. ELIGIBILITY
Each non-employee Board member who has accrued retainer fees
and fees for attendance at regular or special meetings of the Board or any
committee of the Board shall be eligible to participate in this Director Stock
Fee Program.
II. ISSUE DATES
Subject to approval by the Corporation's shareholders at the
1996 Annual Meeting, this Director Stock Fee Program shall be effective as of
the Director Stock Fee Program Effective Date; provided, however, that no
issuances may be made under this program prior to such shareholder approval.
Assuming approval of this Director Stock Fee Program by the Corporation's
shareholders at the 1996 Annual Meeting, direct stock issuances shall be made
under this Article Five on the dates specified below:
A. Initial Issuances. Immediately after the 1996
Annual Meeting, shares of Common Stock shall be issued to each
non-employee Board member who has accrued retainer fees or fees for
attendance at regular or special meetings of the Board or any committee
of the Board with respect to one or more calendar quarters of Board
service commencing during the period from January 1, 1995 to the date
of the 1996 Annual Meeting, including, with respect to retainer fees,
the calendar quarter in which the 1996 Annual Meeting falls (the
"Initial Period"). The number of shares of Common Stock subject to each
such stock issuance shall be determined in accordance with the
following formula:
X = Y
---
Z
where the values of X, Y, Z and A are determined in accordance
with the following provisions:
X is equal to the number of shares of Common Stock (rounded
down to the nearest whole number) to be issued in lieu of the
aggregate amount of the fees accrued by the non-employee Board
member with respect to the Initial Period;
Y is equal to the aggregate amount of the fees accrued by the
non-employee Board member with respect to the Initial Period;
and
Z is equal to the Average Market Price per share of Common
Stock on the date of the 1996 Annual Meeting.
19.
<PAGE> 20
B. Quarterly Issuances. At the beginning of each
calendar quarter of Board service to be completed after the 1996 Annual
Meeting, each non-employee Board shall receive a stock issuance under
this Director Stock Fee Program with respect to (i) the retainer fee
payable for such calendar quarter and (ii) fees accrued for attendance
at regular or special meetings of the Board or any committee of the
Board held in the previous calendar quarter. The number of shares of
Common Stock subject to each such stock issuance shall be determined in
accordance with the following formula:
X = Y
---
Z
where the values of X, Y and Z are determined in accordance
with the following provisions:
X is equal to the number of shares of Common Stock (rounded
down to the nearest whole number) to be issued in lieu of the
aggregate amount of the fees accrued by the non-employee Board
member;
Y is equal to the aggregate amount of the retainer fee payable
for the current calendar quarter and the fees accrued by the
non-employee Board member with respect to attendance at
regular or special meetings of the Board or any Committee of
the Board held in the previous calendar quarter; and
Z is equal to the Average Market Price per share of Common
Stock on the last trading day of the previous calendar
quarter.
III. CONSIDERATION
The shares of Common Stock issued under this Article Five
shall be issued in lieu of the fees otherwise payable in cash to the Eligible
Director with respect to services rendered as a non-employee Board member.
IV. AMENDMENT OF THE DIRECTOR STOCK FEE PROGRAM
The provisions of this Director Stock Fee Program may not be
amended at intervals more frequently than once every six (6) months, other than
to the extent necessary to comply with applicable Federal income tax laws and
regulations.
V. REMAINING TERMS
A. The shares of Common Stock issued under this Director Stock
Fee Program shall be fully vested shares of Common Stock.
20.
<PAGE> 21
B. In the event of a Corporate Transaction, any outstanding
obligations or commitments of the Corporation to issue shares of Common Stock
under this Director Stock Fee Program shall be assumed by the successor
corporation or parent thereof.
21.
<PAGE> 22
ARTICLE SIX
MISCELLANEOUS
I. FINANCING
A. The Plan Administrator may permit any Optionee or
Participant to pay the option exercise price under the Discretionary Option
Grant Program or the purchase price for shares issued under the Stock Issuance
Program by delivering a promissory note payable in one or more installments. The
terms of any such promissory note (including the interest rate and the terms of
repayment) shall be established by the Plan Administrator in its sole
discretion. Promissory notes may be authorized with or without security or
collateral. In all events, the maximum credit available to the Optionee or
Participant may not exceed the sum of (i) the aggregate option exercise price or
purchase price payable for the purchased shares plus (ii) any Federal, state and
local income and employment tax liability incurred by the Optionee or the
Participant in connection with the option exercise or share purchase.
B. The Plan Administrator may, in its discretion, determine
that one or more such promissory notes shall be subject to forgiveness by the
Corporation in whole or in part upon such terms as the Plan Administrator may
deem appropriate.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common
Stock upon the exercise of options or stock appreciation rights or upon the
issuance or vesting of such shares under the Plan shall be subject to the
satisfaction of all applicable Federal, state and local income and employment
tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any
or all holders of Non-Statutory Options or unvested shares of Common Stock under
the Plan (other than the options granted or the shares issued under the
Automatic Option Grant Program or the Director Stock Fee Program) with the right
to use shares of Common Stock in satisfaction of all or part of the Taxes
incurred by such holders in connection with the exercise of their options or the
vesting of their shares. Such right may be provided to any such holder in either
or both of the following formats:
(i) Stock Withholding: The election to have
the Corporation withhold, from the shares of Common Stock otherwise
issuable upon the exercise of such Non-Statutory Option or the
vesting of such shares, a portion of those shares with an aggregate
Fair Market Value equal to the percentage of the Taxes (not to exceed
one hundred percent (100%)) designated by the holder.
22.
<PAGE> 23
(ii) Stock Delivery: The election to deliver
to the Corporation, at the time the Non-Statutory Option is exercised
or the shares vest, one or more shares of Common Stock previously
acquired by such holder (other than in connection with the option
exercise or share vesting triggering the Taxes) with an aggregate
Fair Market Value equal to the percentage of the Taxes (not to exceed
one hundred percent (100%)) designated by the holder.
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Discretionary Option Grant and Stock Issuance Programs
became effective on the Plan Effective Date, and options may be granted under
the Discretionary Option Grant Program from and after the Plan Effective Date.
The Automatic Option Grant Program became effective on the Automatic Option
Grant Program Effective Date and the initial option grants under the Automatic
Option Grant Program were made at that time. The Plan, including the
675,000-share increase under the Predecessor Plan and the 350,000-share increase
under the Plan, both as authorized by the Board on December 21, 1994, was
approved by the Corporation's shareholders on May 18, 1995.
B. On February 15, 1996, the Board amended the Plan, to
implement the Director Stock Fee Program. Such amendment was approved by the
shareholders at the 1996 Annual Meeting On ______________, 1997, the
Compensation Committee of the Board, as Plan Administrator, amended the
definition of Fair Market Value of the Common Stock to include a provision for
determining such Fair Market Value in the event that the Common Stock is listed
on the Nasdaq Electronic Bulletin Board.
C. The Plan shall serve as the successor to the Predecessor
Plan, and no further option grants shall be made under the Predecessor Plan
after the Plan Effective Date. All options outstanding under the Predecessor
Plan as of the Plan Effective Date shall, immediately upon approval of the Plan
by the Corporations's shareholders, be incorporated into the Plan and treated as
outstanding options under the Plan. However, each outstanding option so
incorporated shall continue to be governed solely by the terms of the documents
evidencing such option, and no provision of the Plan shall be deemed to affect
or otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of shares of Common
Stock.
D. The option/vesting acceleration provisions of Article Two
relating to Corporate Transactions and Changes in Control may, in the Plan
Administrator's discretion, be extended to one or more options incorporated from
the Predecessor Plan which do not otherwise provide for such acceleration.
E. The Plan shall terminate upon the earliest of (i) December
20, 2004, (ii) the date on which all shares available for issuance under the
Plan shall have been issued pursuant to the exercise of the options or the
issuance of shares (whether vested or unvested) under the Plan or (iii) the
termination of all outstanding options in connection with a Corporate
Transaction.
23.
<PAGE> 24
Upon such Plan termination, all options and unvested stock issuances outstanding
on such date shall thereafter continue to have force and effect in accordance
with the provisions of the documents evidencing such options or issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects. However, (i) no
such amendment or modification shall adversely affect the rights and obligations
with respect to options, stock appreciation rights or unvested stock issuances
at the time outstanding under the Plan unless the Optionee or the Participant
consents to such amendment or modification, and (ii) any amendment made to the
Automatic Option Grant Program (or any options outstanding thereunder) shall be
in compliance with the limitations of that program. In addition, the Board shall
not, without the approval of the Corporation's shareholders, (i) materially
increase the maximum number of shares issuable under the Plan, the number of
shares for which options may be granted under the Automatic Option Grant Program
or the maximum number of shares for which any one person may be granted options,
separately exercisable stock appreciation rights and direct stock issuances in
the aggregate over the term of the Plan, except for permissible adjustments in
the event of certain changes in the Corporation's capitalization, (ii)
materially modify the eligibility requirements for Plan participation or (iii)
materially increase the benefits accruing to Plan participants.
B. Options to purchase shares of Common Stock may be granted
under the Discretionary Option Grant Program and shares of Common Stock may be
issued under the Stock Issuance Program and the Director Stock Fee Program that
are in each instance in excess of the number of shares then available for
issuance under the Plan, provided any excess shares actually issued under those
programs are held in escrow until there is obtained shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan. If such shareholder approval is not obtained within
twelve (12) months after the date the first such excess issuances are made, then
(i) any unexercised options granted on the basis of such excess shares shall
terminate and cease to be outstanding and (ii) the Corporation shall promptly
refund (a) to the participants in the Director Stock Fee Program the fees in
lieu of which the excess shares of Common Stock were issued and (b) to the
Optionees and the Participants the exercise or purchase price paid for any
excess shares issued under the Plan, together with interest (at the applicable
Short Term Federal Rate) on the amount of such fees and exercise or purchase
price for the period the shares were held in escrow, and such shares shall
thereupon be automatically cancelled and cease to be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.
24.
<PAGE> 25
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option
or stock appreciation right under the Plan and the issuance of any shares of
Common Stock (i) upon the exercise of any option or stock appreciation right or
(ii) under the Stock Issuance Program or the Director Stock Fee Program shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the options and
stock appreciation rights granted under it and the shares of Common Stock issued
pursuant to it.
B. No shares of Common Stock or other assets shall be issued
or delivered under the Plan unless and until there shall have been compliance
with all applicable requirements of Federal and state securities laws, including
the filing and effectiveness of the Form S-8 registration statement for the
shares of Common Stock issuable under the Plan, and all applicable listing
requirements of any stock exchange (or the Nasdaq National Market, if
applicable) on which Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee, the
Participant or the non-employee Board members who participate in the Director
Stock Fee Program any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Parent or Subsidiary employing or retaining such person) or
of the Optionee or the Participant or the non-employee Board member, which
rights are hereby expressly reserved by each, to terminate such person's Service
at any time for any reason, with or without cause.
25.
<PAGE> 26
APPENDIX
The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option grant
program in effect under the Plan.
B. AUTOMATIC OPTION GRANT PROGRAM EFFECTIVE DATE shall mean December
21, 1994, the date on which the Board approved the Automatic Option Grant
Program.
C. AVERAGE MARKET PRICE per share of Common Stock on any relevant date
shall mean the average of the daily closing price per share of Common Stock for
the twenty (20) consecutive trading days ending on the last trading day prior to
such date provided, however, that in no event shall the Average Market Price on
any relevant date be less than eighty-five (85%) of the Fair Market Value on
such date. For purposes of determining the Average Market Price, the closing
price for each day shall be the last reported sales price regular way, or, in
case no such sales take place on such day, the average of the closing bid and
ask prices regular way, in each case on the principal national securities
exchange on which the Common Stock is listed or admitted to trading, or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
National Market or, if the Common Stock is not listed or admitted to trading on
any national securities exchange and is not quoted on the Nasdaq National
Market, the average of the closing bid and ask prices as furnished by any New
York Stock Exchange member firm selected from time to time by the Board for such
purpose.
D. BOARD shall mean the Corporation's Board of Directors.
E. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation), of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's shareholders which
the Board does not recommend such shareholders to accept, or
(ii) a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more
contested elections for Board membership, to be comprised of
individuals who either (A) have been Board members continuously since
the beginning of such period or (B) have been elected
A-1.
<PAGE> 27
or nominated for election as Board members during such period by at
least a majority of the Board members described in clause (A) who were
still in office at the time the Board approved such election or
nomination.
F. CODE shall mean the Internal Revenue Code of 1986, as amended.
G. COMMON STOCK shall mean the Corporation's common stock.
H. CORPORATE TRANSACTION shall mean any of the following
shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which the Corporation
is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is
incorporated;
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets; or
(iii) any other transaction in which substantially all
of the outstanding shares of Common Stock are exchanged for securities,
cash or other property of any other corporate or business entity.
I. CORPORATION shall mean U.S. HomeCare Corporation, a New York
corporation.
J. DIRECTOR STOCK FEE PROGRAM shall mean the non-employee Board member
stock fee program in effect under the Plan.
K. DIRECTOR STOCK FEE PROGRAM EFFECTIVE DATE shall mean February 15,
1996, the date on which the program was adopted by the Board.
L. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary
option grant program in effect under the Plan.
M. DOMESTIC RELATIONS ORDER shall mean any judgment, decree or order
(including approval of a property settlement agreement) which provides or
otherwise conveys, pursuant to applicable State domestic relations laws
(including community property laws), marital property rights to any spouse or
former spouse of the Optionee.
N. ELIGIBLE DIRECTOR shall mean a non-employee Board member eligible to
participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Article One.
A-2.
<PAGE> 28
O. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
P. EXERCISE DATE shall mean the date on which the Corporation shall
have received written notice of the option exercise.
Q. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as
such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market or any successor system. If there
is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing
selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(iii) If the Common Stock is listed on the Nasdaq
Electronic Bulletin Board, the Fair Market Value shall be the average
of the highest bid and lowest asked prices per share of Common Stock on
the date in question, as such prices are quoted by the National
Association of Securities Dealers on the Nasdaq Electronic Bulletin
Board or any successor system. If both bid and asked prices are not
available for the date in question, then the Fair Market Value shall be
the average of the highest bid and lowest asked prices for the last
preceding date for which such quotations exist.
R. HOSTILE TAKE-OVER shall mean a change in ownership of the
Corporation effected through the following transaction:
(i) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total
A-3.
<PAGE> 29
combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's shareholders which the Board does not recommend such
shareholders to accept, and
(ii) more than fifty percent (50%) of the securities so
acquired are accepted from persons other than Section 16 Insiders.
S. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
T. INVOLUNTARY TERMINATION shall mean the termination of the Service of
any individual which occurs by reason of:
(i) such individual's involuntary dismissal or
discharge by the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following
(A) a change in his or her position with the Corporation which
materially reduces his or her level of responsibility, (B) a reduction
in his or her level of compensation (including base salary, fringe
benefits and any non-discretionary and objective-standard incentive
payment or bonus award) by more than fifteen percent (15%) or (C) a
relocation of such individual's place of employment by more than fifty
(50) miles, provided and only if such change, reduction or relocation
is effected by the Corporation without the individual's consent.
U. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
V. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
W. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
X. OPTIONEE shall mean any person to whom an option is granted under
the Discretionary Option Grant or Automatic Option Grant Program.
Y. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken
A-4.
<PAGE> 30
chain (other than the Corporation) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
Z. PARTICIPANT shall mean any person who is issued shares of Common
Stock under the Stock Issuance Program.
AA. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more.
AB. PLAN shall mean the Corporation's 1995 Stock Option/Stock Issuance
Plan, as set forth in this document.
AC. PLAN ADMINISTRATOR shall mean the particular entity, whether the
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction.
AD. PLAN EFFECTIVE DATE shall mean March 15, 1995, the date on which
the Discretionary Option Grant and Stock Issuance Programs of the Plan were
adopted by the Board.
AE. PREDECESSOR PLAN shall mean the Corporation's 1990 Stock Option
Plan.
AF. PRIMARY COMMITTEE shall mean the committee of two (2) or more
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders.
AG. QUALIFIED DOMESTIC RELATIONS ORDER shall mean a Domestic Relations
Order which substantially complies with the requirements of Code Section 414(p).
The Plan Administrator shall have the sole discretion to determine whether a
Domestic Relations Order is a Qualified Domestic Relations Order.
AH. SECONDARY COMMITTEE shall mean a committee of two (2) or more Board
members appointed by the Board to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to eligible persons other than Section 16
Insiders.
AI. SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
AJ. SERVICE shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board
A-5.
<PAGE> 31
of directors or a consultant or independent advisor, except to the extent
otherwise specifically provided in the documents evidencing the option grant.
AK. STOCK EXCHANGE shall mean either the American Stock Exchange or the
New York Stock Exchange.
AL. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.
AM. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
effect under the Plan.
AN. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
AO. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market Value
per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.
AP. TAXES shall mean the Federal, state and local income and employment
tax liabilities incurred by the holder of Non-Statutory Options or unvested
shares of Common Stock in connection with the exercise of such holder's options
or the vesting of his or her shares.
AQ. 10% SHAREHOLDER shall mean the owner of stock (as determined under
Code Section 424(d)) possessing ten percent (10%) or more of the total combined
voting power of all classes of stock of the Corporation (or any Parent or
Subsidiary).
A-6.
<PAGE> 1
EXHIBIT 99.2
Grant No.
---------
U.S. HOMECARE CORPORATION
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of U.S. HomeCare Corporation
(the "Corporation"):
OPTIONEE:
-----------------------------------------
GRANT DATE:
---------------------------------------
VESTING COMMENCEMENT DATE:
------------------------
EXERCISE PRICE: $ per share
---------
NUMBER OF OPTION SHARES: shares
-----------------
EXPIRATION DATE:
----------------------------
TYPE OF OPTION: Incentive Stock Option
-----
Non-Statutory Stock Option
-----
EXERCISE SCHEDULE: The Option shall become exercisable with
respect to (i) twenty-five percent (25%) of the Option Shares
upon Optionee's completion of one (1) year of Service measured
from the Vesting Commencement Date and (ii) the balance of the
Option Shares in successive equal monthly installments upon
Optionee's completion of each of the next thirty-six (36)
months of Service measured from and after the first
anniversary of the Vesting Commencement Date. In no event
shall the Option become exercisable for any additional Option
Shares after Optionee's cessation of Service.
Optionee understands and agrees that the Option is granted
subject to and in accordance with the terms of the U.S. HomeCare Corporation
1995 Stock Option/Stock Issuance Plan (the "Plan"). Optionee further agrees to
be bound by the terms of the Plan and the terms of the Option as set forth in
the Stock Option Agreement attached hereto as Exhibit A.
Optionee hereby acknowledges receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the
Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.
<PAGE> 2
No Employment or Service Contract. Nothing in this Notice or
in the Plan shall confer upon Optionee any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Parent or Subsidiary employing or
retaining Optionee) or of Optionee, which rights are hereby expressly reserved
by each, to terminate Optionee's Service at any time for any reason, with or
without cause.
Definitions. All capitalized terms in this Notice shall have
the meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
Date: , 199
---------------------------------- --
U.S. HOMECARE CORPORATION
By:
---------------------------
Title:
-------------------------
--------------------------------
OPTIONEE
Address:
-----------------------
---------------------------
ATTACHMENTS
Exhibit A - Stock Option Agreement
Exhibit B - Plan Summary and Prospectus
2.
<PAGE> 3
EXHIBIT A
STOCK OPTION AGREEMENT
<PAGE> 4
EXHIBIT B
PLAN SUMMARY AND PROSPECTUS
<PAGE> 1
EXHIBIT 99.3
U.S. HOMECARE CORPORATION
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or the board
of directors of any Parent or Subsidiary and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee,
as of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.
4. DATES OF EXERCISE. This option shall become exercisable for
the Option Shares in one or more installments as specified in the Grant Notice.
As the option becomes exercisable for such installments, those installments
shall accumulate and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
<PAGE> 2
5. CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date should any of the following provisions become
applicable:
(i) Should Optionee cease to remain in Service
for any reason (other than death or Permanent Disability) while this
option is outstanding, then Optionee shall have a period of three (3)
months (commencing with the date of such cessation of Service) during
which to exercise this option, but in no event shall this option be
exercisable at any time after the Expiration Date.
(ii) Should Optionee die while this option is
outstanding, then the personal representative of Optionee's estate or
the person or persons to whom the option is transferred pursuant to
Optionee's will or in accordance with the laws of descent and
distribution shall have the right to exercise this option. Such right
shall lapse and this option shall cease to be outstanding upon the
earlier of (i) the expiration of the twelve (12)- month period measured
from the date of Optionee's death or (ii) the Expiration Date.
(iii) Should Optionee cease Service by reason
of Permanent Disability while this option is outstanding, then Optionee
shall have a period of twelve (12) months (commencing with the date of
such cessation of Service) during which to exercise this option. In no
event shall this option be exercisable at any time after the Expiration
Date.
(iv) Should Optionee's Service be terminated
for Misconduct, then this option shall terminate immediately and cease
to remain outstanding.
(v) During the limited period of post-Service
exercisability, this option may not be exercised in the aggregate for
more than the number of vested Option Shares for which the option is
exercisable at the time of Optionee's cessation of Service. Upon the
expiration of such limited exercise period or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be
outstanding for any vested Option Shares for which the option has not
been exercised. To the extent Optionee is not vested in the Option
Shares at the time of Optionee's cessation of Service, this option
shall immediately terminate and cease to be outstanding with respect to
those shares.
(vi) In the event of a Corporate Transaction,
the provisions of Paragraph 6 shall govern the period for which this
option is to remain exercisable following Optionee's cessation of
Service and shall supersede any provisions to the contrary in this
paragraph.
2.
<PAGE> 3
6. SPECIAL ACCELERATION OF OPTION.
(a) In the event of a Corporate Transaction, the
exercisability of this option, to the extent outstanding at such time but not
otherwise fully exercisable, shall automatically accelerate so that this option
shall, immediately prior to the effective date of the Corporate Transaction,
become exercisable for any or all of the Option Shares at the time subject to
this option as fully-vested shares of Common Stock. No such acceleration of this
option, however, shall occur if and to the extent: (i) this option is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation (or parent thereof) or to be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation (or parent
thereof) or (ii) this option is to be replaced with a cash incentive program of
the successor corporation which preserves the spread existing on the Option
Shares for which this option is not exercisable at the time of the Corporate
Transaction (the excess of the Fair Market Value of such Option Shares over the
aggregate Exercise Price payable for such shares) and provides for subsequent
pay-out in accordance with the same exercise schedule in effect for the option
pursuant to the option exercise schedule set forth in the Grant Notice. The
determination of option comparability under clause (i) shall be made by the Plan
Administrator, and such determination shall be final, binding and conclusive.
(b) Immediately following the Corporate Transaction,
this option, to the extent not previously exercised, shall terminate and cease
to be outstanding, except to the extent assumed by the successor corporation (or
parent thereof) in connection with the Corporate Transaction.
(c) If this option is assumed in connection with a
Corporate Transaction, then this option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.
(d) Upon an Involuntary Termination of Optionee's
Service within eighteen (18) months following a Corporate Transaction in which
this option is assumed or replaced, the exercisability of this option, to the
extent outstanding at such time but not otherwise fully exercisable, shall
automatically accelerate so that this option shall immediately become fully
exercisable for all the Option Shares at the time subject to this option as
fully-vested shares of Common Stock and may be exercised for any or all of those
shares at any time prior to the earlier of (i) the Expiration Date or (ii) the
expiration of the one (1)-year period measured from the effective date of the
Involuntary Termination.
(e) This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
3.
<PAGE> 4
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to
the Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. SHAREHOLDER RIGHTS. The holder of this option shall not
have any shareholder rights with respect to the Option Shares until such person
shall have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to
all or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or any other person or persons exercising the option)
must take the following actions:
(i) Execute and deliver to the Corporation a
Notice of Exercise for the Option Shares for which the option is
exercised.
(ii) Pay the aggregate Exercise Price for
the purchased shares in one or more of the following forms:
(A) cash or check made payable to
the Corporation;
(B) a promissory note payable to the
Corporation, but only to the extent approved by the Plan
Administrator in accordance with Paragraph 13;
(C) shares of Common Stock held by
Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date; or
(D) through a special sale and
remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall concurrently
provide irrevocable written instructions (a) to a
Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out
of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable
for the purchased shares plus all applicable Federal, state
and local income and employment taxes
4.
<PAGE> 5
required to be withheld by the Corporation by reason of such
exercise and (b) to the Corporation to deliver the
certificates for the purchased shares directly to such
brokerage firm in order to complete the sale transaction.
Except to the extent the sale and remittance
procedure is utilized in connection with the option exercise,
payment of the Exercise Price must accompany the Notice of
Exercise delivered to the Corporation in connection with the
option exercise.
(iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if
other than Optionee) have the right to exercise this option.
(iv) Make appropriate arrangements with the
Corporation (or Parent or Subsidiary employing or retaining Optionee)
for the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the option
exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any
fractional shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of
the Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.
(b) The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation, however, shall use its best efforts to
obtain all such approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
5.
<PAGE> 6
12. NOTICES. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
13. FINANCING. The Plan Administrator may, in its absolute
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased Option Shares by delivering a promissory note.
The terms of any such promissory note (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.(1)
14. CONSTRUCTION. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects limited
by and subject to the terms of the Plan. All decisions of the Plan Administrator
with respect to any question or issue arising under the Plan or this Agreement
shall be conclusive and binding on all persons having an interest in this
option.
15. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of New
York without resort to that State's conflict-of-laws rules.
16. EXCESS SHARES. If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares of Common Stock
which may without shareholder approval be issued under the Plan, then this
option shall be void with respect to such excess shares, unless shareholder
approval of an amendment sufficiently increasing the number of shares of Common
Stock issuable under the Plan is obtained in accordance with the provisions of
the Plan.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the
event this option is designated an Incentive Option in the Grant Notice, the
following terms and conditions shall also apply to the grant:
(i) This option shall cease to qualify for
favorable tax treatment as an Incentive Option if (and to the extent)
this option is exercised for one or more Option Shares: (i) more than
three (3) months after the date Optionee ceases to be an Employee for
any reason other than death or Permanent
- --------
(1) Authorization of payment of the Exercise Price by a promissory note under
such provisions may, under currently proposed Treasury Regulations, result in
the loss of incentive stock option treatment under the Federal tax laws.
6.
<PAGE> 7
Disability or (ii) more than twelve (12) months after the date Optionee
ceases to be an Employee by reason of Permanent Disability.
(ii) No installment under this option shall
qualify for favorable tax treatment as an Incentive Option if (and to
the extent) the aggregate Fair Market Value (determined at the Grant
Date) of the Common Stock for which such installment first becomes
exercisable hereunder would, when added to the aggregate value
(determined as of the respective date or dates of grant) of any earlier
installments of the Common Stock and any other securities for which
this option or any other Incentive Options granted to Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars
($100,000) in the aggregate. Should such One Hundred Thousand Dollar
($100,000) limitation be exceeded in any calendar year, this option
shall nevertheless become exercisable for the excess shares in such
calendar year as a Non-Statutory Option.
(iii) Should the exercisability of this
option be accelerated upon a Corporate Transaction, then this option
shall qualify for favorable tax treatment as an Incentive Option only
to the extent the aggregate Fair Market Value (determined at the Grant
Date) of the Common Stock for which this option first becomes
exercisable in the calendar year in which the Corporate Transaction
occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other
securities for which this option or one or more other Incentive Options
granted to Optionee prior to the Grant Date (whether under the Plan or
any other option plan of the Corporation or any Parent or Subsidiary)
first become exercisable during the same calendar year, exceed One
Hundred Thousand Dollars ($100,000) in the aggregate. Should the
applicable One Hundred Thousand Dollar ($100,000) limitation be
exceeded in the calendar year of such Corporate Transaction, the option
may nevertheless be exercised for the excess shares in such calendar
year as a Non-Statutory Option.
(iv) Should Optionee hold, in addition to
this option, one or more other options to purchase Common Stock which
become exercisable for the first time in the same calendar year as this
option, then the foregoing limitations on the exercisability of such
options as Incentive Options shall be applied on the basis of the order
in which such options are granted.
7.
<PAGE> 8
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify U.S. HomeCare Corporation (the "Corporation")
that I elect to purchase __________ shares of the Corporation's Common Stock
(the "Purchased Shares") at the option exercise price of $__________ per share
(the "Exercise Price") pursuant to that certain option (the "Option") granted to
me under the Corporation's 1995 Stock Option/Stock Issuance Plan on __________,
199_.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price for any Purchased Shares in which I am vested at the time of exercise of
the Option.
, 199
- ------------------------------------ --
Date
---------------------------
Optionee
Address:
-------------------
---------------------------
Print name in exact manner
it is to appear on the
stock certificate:
---------------------------
Address to which certificate
is to be sent, if different
from address above:
---------------------------
Social Security Number:
---------------------------
Employee Number:
---------------------------
<PAGE> 9
APPENDIX
The following definitions shall be in effect under the
Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean any of the following
shareholder-approved transactions to which the Corporation is a party:
(a) a merger or consolidation in which the Corporation
is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is
incorporated;
(b) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets; or
(c) any other transaction in which substantially all of
the outstanding shares of Common Stock are exchanged for securities,
cash or other property of any other corporate or business entity.
F. CORPORATION shall mean U.S. HomeCare Corporation, a New York
corporation.
G. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
A-1.
<PAGE> 10
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as the
price is reported by the National Association of Securities Dealers on
the Nasdaq National Market or any successor system. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price
for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
(iii) If the Common Stock is listed on the Nasdaq Electronic
Bulletin Board, the Fair Market Value shall be the average of the
highest bid and lowest asked prices per share of Common Stock on the
date in question, as such prices are quoted by the National Association
of Securities Dealers on the Nasdaq Electronic Bulletin Board or any
successor system. If both bid and asked prices are not available for
the date in question, then the Fair Market Value shall be the average
of the highest bid and lowest asked prices for the last preceding date
for which such quotations exist.
L. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.
M. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
N. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
O. INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service which occurs by reason of:
(i) Optionee's dismissal or discharge by the Corporation for
reasons other than Misconduct, or
(ii) Optionee's voluntary resignation following (A) a change
in Optionee's position with the Corporation (or Parent or Subsidiary
employing
A-2.
<PAGE> 11
Optionee) which materially reduces Optionee's level of responsibility,
(B) a reduction in Optionee's level of compensation (including base
salary, fringe benefits and any non-discretionary and
objective-standard incentive payment or bonus award) by more than
fifteen percent (15%) or (C) a relocation of Optionee's place of
employment by more than fifty (50) miles, provided and only if such
change, reduction or relocation is effected by the Corporation without
Optionee's consent.
P. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
Optionee or any other individual in the Service of the Corporation (or any
Parent or Subsidiary).
Q. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
R. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
S. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.
T. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.
U. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
V. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
W. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
X. PLAN shall mean the Corporation's 1995 Stock Option/Stock Issuance
Plan.
A-3.
<PAGE> 12
Y. PLAN ADMINISTRATOR shall mean either the Board or a committee of
Board members, to the extent the committee is at the time responsible for the
administration of the Plan.
Z. SERVICE shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
AA. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.
AB. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
A-4.
<PAGE> 1
EXHIBIT 99.4
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement dated ______ (the
"Option Agreement") by and between U.S. HomeCare Corporation (the
"Corporation") and ______ ("Optionee") evidencing the stock option granted on
such date to Optionee under the terms of the Corporation's 1995 Stock
Option/Stock Issuance Plan, and such provisions shall be effective immediately.
All capitalized terms in this Addendum, to the extent not otherwise defined
herein, shall have the meanings assigned to them in the Option Agreement.
LIMITED STOCK APPRECIATION RIGHT
1. Optionee is hereby granted a limited stock appreciation
right in tandem with the option, exercisable upon the terms set forth below:
(i) Should a Hostile Take-Over occur at any time after
the option has been outstanding for a period of at least six (6) months
measured from the Effective Date of this Addendum indicated below, then
Optionee shall have the unconditional right (exercisable during the
thirty (30)-day period following such Hostile Take-Over) to surrender
the option to the Corporation, to the extent the option is at the time
exercisable for vested shares of Common Stock. In return for the
surrendered option, Optionee shall receive a cash distribution from the
Corporation in an amount equal to the excess of (A) the Take-Over Price
of the shares of Common Stock which are at the time vested under the
surrendered option (or surrendered portion) over (B) the aggregate
Exercise Price payable for such shares.
(ii) To exercise this limited stock appreciation right,
Optionee must, during the applicable thirty (30)-day exercise period,
provide the Corporation with written notice of the option surrender in
which there is specified the number of Option Shares as to which the
option is being surrendered. Such notice must be accompanied by the
return of Optionee's copy of the Option Agreement, together with any
written amendments to such Agreement. The cash distribution shall be
paid to Optionee within five (5) days following such delivery date, and
neither the approval of the Plan Administrator nor the consent of the
Board shall be required in connection with such option surrender and
cash distribution. Upon receipt of such cash distribution, the option
shall be cancelled with respect to the Option Shares for which the
option has been surrendered, and Optionee shall cease to have any
further right to acquire those Option Shares under the Option
Agreement. The option shall, however, remain outstanding and
exercisable for the balance of the Option Shares (if any) in accordance
with the terms of the Option Agreement, and the Corporation shall issue
a new stock option
<PAGE> 2
agreement (substantially in the same form of the surrendered Option
Agreement) for those remaining Option Shares.
(iii) In no event may this limited stock appreciation
right be exercised when there is not a positive spread between the Fair
Market Value of the Option Shares and the aggregate Exercise Price
payable for such shares. This limited stock appreciation right shall in
all events terminate upon the expiration or sooner termination of the
option term and may not be assigned or transferred by Optionee.
2. For purposes of this Addendum, the following definitions
shall be in effect:
(i) A HOSTILE TAKE-OVER shall be deemed to occur in the
event (A) any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation)
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's shareholders which the Board does not recommend such
shareholders to accept, AND (B) more than fifty percent (50%) of the
securities so acquired in such tender or exchange offer are accepted
from holders other than the officers and directors of the Corporation
subject to the short-swing profit restrictions of Section 16 of the
Securities Exchange Act of 1934, as amended.
(ii) The TAKE-OVER PRICE per share shall be deemed to be
equal to the greater of (A) the Fair Market Value per Option Share on
the option surrender date or (B) the highest reported price per share
of Common Stock paid by the tender offeror in effecting the Hostile
Take-Over. However, if the surrendered option is designated as an
Incentive Option in the Grant Notice, then the Take-Over Price shall
not exceed the clause (A) price per share.
2.
<PAGE> 3
IN WITNESS WHEREOF, U.S. HomeCare Corporation has caused this
Addendum to be executed by its duly-authorized officer, and Optionee has
executed this Addendum, all as of the Effective Date specified below.
U.S. HOMECARE CORPORATION
By: _____________________________________
Title: __________________________________
_________________________________________
__________________, OPTIONEE
EFFECTIVE DATE: _____________________________, 199__
3.
<PAGE> 1
EXHIBIT 99.5
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement dated 2--(the
"Option Agreement'') by and between U.S. HomeCare Corporation (the
"Corporation'') and 1--("Optionee'') evidencing the option granted on such date
to Optionee under the terms of the Corporation's 1995 Stock Option/Stock
Issuance Plan, and such provisions shall be effective immediately. All
capitalized terms in this Addendum shall have the meanings assigned to them in
the Option Agreement.
FINANCIAL ASSISTANCE
The Plan Administrator may, in its absolute discretion and
without any obligation to do so, assist Optionee in the exercise of the option
by permitting Optionee to pay the Exercise Price for the purchased Option
Shares by delivering a promissory note with payment due in one or more
installments. The terms of any such promissory note (including the interest
rate, the collateral requirements and the repayment schedule) shall be
established by the Plan Administrator in its sole discretion. Such financial
assistance may, under currently proposed Treasury Regulations, result in the
loss of Incentive Option treatment under the Federal tax laws, to the extent
the option would otherwise qualify as an Incentive Option at the time of
exercise.
IN WITNESS WHEREOF, U.S. HomeCare Corporation has caused this
Addendum to be executed by its duly-authorized officer, and Optionee has
excluded this Addendum, all as of the Effective Date specified below.
U.S. HOMECARE CORPORATION
By: __________________________________
Title: _______________________________
______________________________________
1--, OPTIONEE
EFFECTIVE DATE: _________________, 199___
<PAGE> 1
EXHIBIT 99.6
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement dated ______ (the
"Option Agreement") by and between U.S. HomeCare Corporation (the
"Corporation") and ______ ("Optionee") evidencing the non-statutory stock
option granted on such date to Optionee under the terms of the Corporation's
1995 Stock Option/Stock Issuance Plan, and such provisions shall be effective
immediately. Capitalized terms in this Addendum, to the extent not otherwise
defined herein, shall have the meanings assigned to such terms in the Option
Agreement.
SPECIAL TAX ELECTIONS
1. STOCK WITHHOLDING. Optionee is hereby granted the election
to have the Corporation withhold, at the time the option is exercised, a portion
of the purchased Option Shares with an aggregate Fair Market Value not to exceed
one hundred percent (100%) of the applicable Federal, state and local income and
employment tax withholding liability (the "Taxes") Optionee incurs in connection
with the option exercise.
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
a. The election must be made on or before the date
the liability for the Taxes is determined (the "Tax Determination
Date").
b. The election shall be irrevocable.
c. The election shall be subject to the approval of
the Plan Administrator, and none of the Option Shares shall be withheld
in satisfaction of the Taxes, except to the extent the election is
approved by the Plan Administrator.
d. The Option Shares withheld pursuant to the
election shall be valued at Fair Market Value on the Tax Determination
Date.
e. In no event may the number of shares of Common
Stock requested to be withheld exceed in Fair Market Value the dollar
amount of the Taxes.
If the stock withholding election is made by Optionee
at a time when Optionee is an officer or director of the Corporation subject to
the short-swing profit restrictions of Section 16(b) of the Securities Exchange
Act of 1934, as amended, then the following limitations, in addition to the
preceding provisions, shall also be applicable:
<PAGE> 2
a. The election shall not become effective at any time prior
to the expiration of the six (6)-month period measured from the Effective Date
of this Addendum indicated below, and no Option Shares shall be withheld in
connection with any Tax Determination Date which occurs before the expiration of
such six (6)-month period.
b. The stock withholding election must be made in accordance
with the following limitations:
(i) Such election must be made at least six (6)
months before the Tax Determination Date, or
(ii) Both the exercise of such election and the
exercise of the option must occur concurrently within a quarterly "window"
period. Quarterly window periods shall begin on the third (3rd) business day
following the date of public release of each quarterly or annual statement of
the Corporation's sales and earnings and end on the earlier of the twelfth
(12th) business day following such release date or the Tax Determination Date.
c. The six (6)-month periods specified in clauses a and b
shall not be applicable in the event of Optionee's death or Permanent
Disability.
2. STOCK DELIVERY. Optionee is hereby granted the election to
deliver, at the time the option is exercised, one or more shares of Common Stock
previously acquired by Optionee (other than in connection with the acquisition
triggering the Taxes) with an aggregate Fair Market Value not to exceed one
hundred percent (100%) of the Taxes.
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
a. The election must be made on or before the Tax
Determination Date for the Taxes.
b. The election shall be irrevocable.
c. The election shall be subject to the approval of
the Plan Administrator, and none of the delivered shares of Common
Stock shall be accepted in satisfaction of the Taxes, except to the
extent the election is approved by the Plan Administrator.
d. The shares of Common Stock delivered in
satisfaction of the Taxes shall be valued at Fair Market Value on the
Tax Determination Date.
2.
<PAGE> 3
e. In no event may the number of delivered shares
exceed in Fair Market Value the dollar amount of the Taxes.
IN WITNESS WHEREOF, U.S. HomeCare Corporation has caused this
Addendum to be executed by its duly-authorized officer, and Optionee has
executed this Addendum, all as of the Effective Date specified below.
U.S. HOMECARE CORPORATION
By: ___________________________________
Title: ________________________________
_______________________________________
____________, OPTIONEE
EFFECTIVE DATE: ______________________, 199__
3.
<PAGE> 1
EXHIBIT 99.7
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement dated _________ (the
"Option Agreement") by and between U.S. HomeCare Corporation (the
"Corporation") and ______ ("Optionee") evidencing the stock option granted on
such date to Optionee under the terms of the Corporation's 1995 Stock
Option/Stock Issuance Plan, and such provisions shall be effective immediately.
All capitalized terms in this Addendum, to the extent not otherwise defined
herein, shall have the meanings assigned to them in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CHANGE IN CONTROL
1. The exercisability of the option shall not accelerate upon
the occurrence of a Change in Control, and the option shall, over Optionee's
continued period of Service after the Change in Control, continue to become
exercisable for the Option Shares in accordance with the provisions of the
Option Agreement. However, immediately upon an Involuntary Termination of
Optionee's Service within eighteen (18) months following the Change in Control,
the exercisability of this option, to the extent the option is at the time
outstanding but not otherwise fully exercisable, shall automatically accelerate
so that the option shall immediately become fully exercisable for all the Option
Shares at the time subject to the option and may be exercised for any or all of
those shares as fully vested shares of Common Stock at any time prior to the
earlier of (i) the Expiration Date or (ii) the expiration of the one (1)-year
period measured from the effective date of the Involuntary Termination.
2. For purposes of this Addendum, a CHANGE IN CONTROL shall be
deemed to occur in the event of a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made
directly to the Corporation's shareholders which the Board does not
recommend such shareholders to accept, or
<PAGE> 2
(ii) a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases by reason of one or more contested
elections for Board membership, to be comprised of individuals who
either (A) have been Board members continuously since the beginning of
such period or (B) have been elected or nominated for election as Board
members during such period by at least a majority of the Board members
described in clause (A) who were still in office at the time such
election or nomination was approved by the Board.
IN WITNESS WHEREOF, U.S. HomeCare Corporation has caused this
Addendum to be executed by its duly-authorized officer, and Optionee has
executed this Addendum, all as of the Effective Date specified below.
U.S. HOMECARE CORPORATION
By: ____________________________________
Title: _________________________________
________________________________________
_____________, OPTIONEE
EFFECTIVE DATE: __________________________, 199__
2.
<PAGE> 1
EXHIBIT 99.8
U.S. HOMECARE CORPORATION
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of U.S. HomeCare Corporation
(the "Corporation"):
OPTIONEE:_____________________________________
GRANT DATE:___________________________________
EXERCISE PRICE: $_____ per share
NUMBER OF OPTION SHARES: 25,000 shares
EXPIRATION DATE:______________________________
TYPE OF OPTION: Non-Statutory Stock Option
DATE EXERCISABLE: Immediately Exercisable
VESTING SCHEDULE: The Option Shares shall be unvested and
subject to repurchase by the Corporation at the Exercise Price
paid per share. Optionee shall acquire a vested interest in,
and the Corporation's repurchase right will accordingly lapse
with respect to, the Option Shares in three (3) equal
successive annual installments upon Optionee's completion of
each year of service as a member of the Corporation's Board of
Directors (the "Board") measured from the Grant Date, with the
first such installment to vest on the Grant Date. In no event
shall any additional Option Shares vest after Optionee's
cessation of Board service.
Optionee understands and agrees that the Option is granted
subject to and in accordance with the terms of the automatic option grant
program under the U.S. HomeCare Corporation 1995 Stock Option/Stock Issuance
Plan (the "Plan"). Optionee further agrees to be bound by the terms of the Plan
and the terms of the Option as set forth in the Automatic Stock Option Agreement
attached hereto as Exhibit A.
Optionee hereby acknowledges receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the
Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL
<PAGE> 2
OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE SUBJECT TO A
REPURCHASE RIGHT EXERCISABLE BY THE CORPORATION AND ITS ASSIGNS. THE TERMS OF
SUCH RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE AGREEMENT, IN FORM AND
SUBSTANCE SATISFACTORY TO THE CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF
THE OPTION EXERCISE.
No Employment or Service Contract. Nothing in this Notice or
in the Plan shall confer upon Optionee any right to continue in service as a
Board member for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
retaining Optionee) and the Corporation's shareholders or of Optionee, which
rights are hereby expressly reserved by each, to terminate Optionee's service as
a Board member at any time for any reason, with or without cause in accordance
with the provisions of applicable law.
Definitions. All capitalized terms in this Notice shall have
the meaning assigned to them in this Notice or in the attached Automatic Stock
Option Agreement.
Date: ______________________, 199__
U.S. HOMECARE CORPORATION
By:____________________________
Title:_________________________
OPTIONEE
Address:_______________________
_______________________________
ATTACHMENTS
Exhibit A - Automatic Stock Option Agreement
Exhibit B - Plan Summary and Prospectus
2.
<PAGE> 3
EXHIBIT A
AUTOMATIC STOCK OPTION AGREEMENT
<PAGE> 4
EXHIBIT B
PLAN SUMMARY AND PROSPECTUS
<PAGE> 1
EXHIBIT 99.9
U.S. HOMECARE CORPORATION
AUTOMATIC STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has implemented an automatic option grant program
under the Plan pursuant to which eligible non-employee members of the Board will
automatically receive a special option grant when he or she is initially elected
or appointed to the Board in order to provide such individuals with a meaningful
incentive to continue to serve as members of the Board.
B. Optionee is an eligible non-employee Board member, and this
Agreement is executed pursuant to, and is intended to carry out the purposes of,
the Plan in connection with the automatic grant of an option to purchase shares
of Common Stock under the Plan.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee,
as of the Grant Date, a Non-Statutory Option to purchase up to 25,000 Option
Shares as specified in the Grant Notice. The Option Shares shall be purchasable
from time to time during the option term specified in Paragraph 2 at the
Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5, 6 or 7.
3. LIMITED TRANSFERABILITY. This option, together with the
special stock appreciation right provided under Paragraph 7(b), shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.
4. EXERCISABILITY/VESTING.
(a) This option shall be immediately exercisable for any or
all of the Option Shares, whether or not the Option Shares are vested in
accordance with the Vesting Schedule and shall remain so exercisable until the
Expiration Date or sooner termination of the option term under Paragraph 5, 6 or
7.
<PAGE> 2
(b) Optionee shall, in accordance with the Vesting
Schedule, vest in the Option Shares in one or more installments over his or her
period of Board service. Vesting in the Option Shares may be accelerated
pursuant to the provisions of Paragraph 5, 6 or 7. In no event, however, shall
any additional Option Shares vest following Optionee's cessation of service as a
Board member.
5. CESSATION OF BOARD SERVICE. Should Optionee's service as a
Board member cease while this option remains outstanding, then the option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date in accordance with the following
provisions:
(a) Should Optionee cease to serve as a Board member for
any reason (other than death or Permanent Disability) while holding this option,
then the period for exercising this option shall be reduced to a twelve
(12)-month period (commencing with the date of such cessation of Board service),
but in no event shall this option be exercisable at any time after the
Expiration Date. During such limited period of exercisability, this option may
not be exercised in the aggregate for more than the number of Option Shares (if
any) in which the Optionee is vested on the date Optionee ceases service as a
Board member. Upon the earlier of (i) the expiration of such twelve (12)-month
period or (ii) the specified Expiration Date, the option shall terminate and
cease to be exercisable with respect to any vested Option Shares for which the
option has not been exercised.
(b) Should Optionee die during the twelve (12)-month period
following his or her cessation of Board service, then the personal
representative of Optionee's estate or the person or persons to whom the option
is transferred pursuant to Optionee's will or in accordance with the laws of
descent and distribution shall have the right to exercise this option for any or
all of the Option Shares in which the Optionee is vested at the time of
Optionee's cessation of Board service (less any Option Shares purchased by
Optionee after such cessation of Board service but prior to death). Such right
of exercise shall terminate, and this option shall accordingly cease to be
exercisable for such vested Option Shares, upon the earlier of (A) the
expiration of the twelve (12)-month period measured from the date of Optionee's
death or (B) the specified Expiration Date.
(c) Should Optionee cease service as a Board member by
reason of death or Permanent Disability, then all Option Shares at the time
subject to this option but not otherwise vested shall vest in full so that the
Optionee (or the personal representative of the Optionee's estate or the person
or persons to whom the option is transferred upon the Optionee's death) shall
have the right to exercise this option for any or all of the Option Shares as
fully- vested shares of Common Stock at any time prior to the earlier of (A) the
expiration of the twelve (12)-month period measured from the date of the
Optionee's death or Permanent Disability or (B) the specified Expiration Date.
2.
<PAGE> 3
(d) Upon Optionee's cessation of Board service for any
reason other than death or Permanent Disability, this option shall immediately
terminate and cease to be outstanding with respect to any and all Option Shares
in which the Optionee is not otherwise at that time vested in accordance with
the normal Vesting Schedule or the special vesting acceleration provisions of
Paragraph 7 or 8 below.
(e) In the event of a Corporate Transaction or Change in
Control, the provisions of Paragraph 6 or Paragraph & shall govern the period
for which this option is to remain exercisable following Optionee's cessation of
Service and shall supersede any provisions to the contrary in this paragraph.
6. CORPORATE TRANSACTION.
(a) In the event of any Corporate Transaction, all Option
Shares at the time subject to this option but not otherwise vested shall
automatically vest in full so that this option shall, immediately prior to the
effective date of such Corporate Transaction, become fully exercisable for all
of the Option Shares at the time subject to this option and may be exercised for
all or any portion of the Option Shares as fully-vested shares of Common Stock.
Immediately following the consummation of the Corporate Transaction, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof).
(b) If this option is assumed in connection with a
Corporate Transaction, then this option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.
(c) This Agreement shall not in any way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. CHANGE IN CONTROL/HOSTILE TAKE-OVER.
(a) All Option Shares subject to this option at the time of
a Change in Control but not otherwise vested shall automatically vest in full so
that this option shall, immediately prior to the effective date of such Change
in Control, become fully exercisable for all of the Option Shares at the time
subject to this option and may be exercised for all or any portion of such
shares as fully-vested shares of Common Stock. This option shall remain
exercisable for such fully-vested Option Shares until the earliest to occur of
(i) the Expiration Date, (ii) the sooner termination of this option in
accordance with Paragraph 5 or 6 or (iii) the surrender of the option in
connection with a Hostile Take-Over.
3.
<PAGE> 4
(b) Provided this option has been outstanding for at least
six (6) months prior to the occurrence of a Hostile Take-Over, Optionee shall
have the unconditional right (exercisable during the thirty (30)-day period
immediately following the consummation of such Hostile Take-Over) to surrender
this option to the Corporation in exchange for a cash distribution from the
Corporation in an amount equal to the excess of (i) the Take-Over Price of the
Option Shares at the time subject to the surrendered option (whether or not
those Option Shares are otherwise at the time vested) over (ii) the aggregate
Exercise Price payable for such shares. This Paragraph 7(b) limited stock
appreciation right shall in all events terminate upon the expiration or sooner
termination of the option term and may not be assigned or transferred by
Optionee.
(c) To exercise the Paragraph 7(b) limited stock
appreciation right, Optionee must, during the applicable thirty (30)-day
exercise period, provide the Corporation with written notice of the option
surrender in which there is specified the number of Option Shares as to which
the Option is being surrendered. Such notice must be accompanied by the return
of Optionee's copy of this Agreement, together with any written amendments to
such Agreement. The cash distribution shall be paid to Optionee within five (5)
days following such delivery date, and no approval or consent of the Board shall
be required in connection with such option surrender and cash distribution. Upon
receipt of such cash distribution, this option shall be cancelled with respect
to the Option Shares subject to the surrendered option (or the surrendered
portion) and Optionee shall cease to have any further right to acquire those
Option Shares under this Agreement. The option shall, however, remain
outstanding for the balance of the Option Shares (if any) in accordance with the
terms of this Agreement, and the Corporation shall issue a new stock option
agreement (substantially in the same form as this Agreement) for those remaining
Option Shares.
8. ADJUSTMENT IN OPTION SHARES. Should any change be made to
the Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
9. SHAREHOLDER RIGHTS. The holder of this option shall not
have any shareholder rights with respect to the Option Shares until such person
shall have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.
10. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
4.
<PAGE> 5
(i) To the extent the option is
exercised for vested Option Shares, execute and deliver to the
Corporation a Notice of Exercise for the Option Shares for which the
option is exercised. To the extent this option is exercised for
unvested Option Shares, execute and deliver to the Corporation a
Purchase Agreement.
(ii) Pay the aggregate Exercise Price
for the purchased shares in one or more of the following forms:
(A) cash or check made payable to
the Corporation,
(B) shares of Common Stock held
by Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date, or
(C) to the extent the option is
exercised for vested Option Shares, through a special sale and
remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall concurrently
provide irrevocable written instructions (a) to a
Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out
of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable
for the purchased shares plus all applicable Federal, state
and local income and employment taxes required to be withheld
by the Corporation by reason of such exercise and (b) to the
Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete
the sale.
Except to the extent the sale and remittance
procedure is utilized in connection with the option exercise,
payment of the Exercise Price must accompany the Notice of
Exercise (or the Purchase Agreement) delivered to the
Corporation in connection with the option exercise.
(iii) Furnish to the Corporation
appropriate documentation that the person or persons exercising the
option (if other than Optionee) have the right to exercise this option.
(b) As soon after the Exercise Date as practical, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto. To the extent any such Option
Shares are unvested, the certificates for those Option Shares shall be
5.
<PAGE> 6
endorsed with an appropriate legend evidencing the Corporation's repurchase
rights and may be held in escrow with the Corporation until such shares vest.
(c) In no event may this option be exercised for any
fractional shares.
11. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the
Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.
(b) The inability of the Corporation to obtain approval
from any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant to this
option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation, however, shall use its best efforts to
obtain all such approvals.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 3 or 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
13. NOTICES. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
14. CONSTRUCTION. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects limited
by and subject to the terms of the Plan.
15. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of New
York without resort to that State's conflict-of-laws rules.
6.
<PAGE> 7
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify U.S. HomeCare Corporation (the "Corporation")
that I elect to purchase shares of the Corporation's Common Stock
(the "Purchased Shares") at the option exercise price of $ per share (the
"Exercise Price") pursuant to that certain option (the "Option") granted to me
under the Corporation's 1995 Stock Option/Stock Issuance Plan on ,
199 .
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price for any Purchased Shares in which I am vested at the time of exercise of
the Option.
______________________________, 199__
Date
___________________________
Optionee
Address:___________________
____________________________
Print name in exact manner
it is to appear on the
stock certificate: ____________________________
Address to which certificate
is to be sent, if different
from address above: ____________________________
____________________________
____________________________
Social Security Number: ____________________________
APPENDIX
<PAGE> 8
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Automatic Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's shareholders which the Board
does not recommend such shareholders to accept, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in
clause (A) who were still in office at the time the Board approved such
election or nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean any of the following
shareholder-approved transactions to which the Corporation is a party:
(a) a merger or consolidation in which the Corporation
is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is
incorporated;
(b) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets; or
A-2.
<PAGE> 9
(c) any other transaction in which substantially all of
the outstanding shares of Common Stock are exchanged for securities,
cash or other property of any other corporate or business entity.
G. CORPORATION shall mean U.S. HomeCare Corporation, a New York
corporation.
H. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 10 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as the
price is reported by the National Association of Securities Dealers on
the Nasdaq National Market or any successor system. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price
for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
(iii) If the Common Stock is listed on the Nasdaq Electronic
Bulletin Board, the Fair Market Value shall be the average of the
highest bid and lowest asked prices per share of Common Stock on the
date in question, as such prices are quoted by the National Association
of Securities Dealers on the Nasdaq Electronic Bulletin Board or any
successor system. If both bid and asked prices are not available for
the date in question, then the Fair Market Value shall be the average
of the highest bid and lowest asked prices for the last preceding date
for which such quotations exist.
A-3.
<PAGE> 10
L. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.
M. GRANT NOTICE shall mean the Notice of Grant of Non-Employee Director
Automatic Stock Option accompanying the Agreement, pursuant to which Optionee
has been informed of the basic terms of the option evidenced hereby.
N. HOSTILE TAKE-OVER shall mean a change in ownership of the
Corporation effected through the following transaction:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's shareholders which the Board
does not recommend such shareholders to accept, and
(ii) more than fifty percent (50%) of the acquired securities
are accepted from holders other than the officers and directors of the
Corporation subject to the short-swing profit restrictions of Section
16 of the 1934 Act.
O. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
P. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
Q. NOTICE OF EXERCISE shall mean the notice of exercise in the form of
Exhibit I.
R. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option.
S. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
T. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
U. PLAN shall mean the Corporation's 1995 Stock Option/Stock Issuance
Plan.
A-4.
<PAGE> 11
V. PURCHASE AGREEMENT shall mean the stock purchase agreement (in form
and substance satisfactory to the Corporation) which grants the Corporation the
right to repurchase, at the Exercise Price, any and all unvested Option Shares
held by Optionee at the time of Optionee's cessation of Service and which
precludes the sale, transfer or other disposition of any purchased Option Share
while subject to such repurchase right.
W. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.
X. TAKE-OVER PRICE per share of Common Stock shall mean the greater of
(i) the Fair Market Value per share of Common Stock on the date the option is
surrendered to the Corporation in connection with a Hostile Take-Over or (ii)
the highest reported price per share of Common Stock paid by the tender offeror
in effecting the Hostile Take-Over.
A-5.
<PAGE> 1
EXHIBIT 99.10
U.S. HOMECARE CORPORATION
STOCK ISSUANCE AGREEMENT
AGREEMENT made as of this ____ day of ___________ 199_, by and
among U.S. HomeCare Corporation, a New York corporation, ______________________,
Participant in the Corporation's 1995 Stock Option/Stock Issuance Plan, and
_________________________, Participant's spouse.
All capitalized terms in this Agreement shall have the meaning
assigned to them in this Agreement or in the attached Appendix.
A. PURCHASE OF SHARES
1. PURCHASE. Participant hereby purchases ________ shares
of Common Stock (the "Purchased Shares") pursuant to the provisions of the
Stock Issuance Program at the purchase price of $_____ per share (the
"Purchase Price").
2. PAYMENT. Concurrently with the delivery of this Agreement
to the Corporation, Participant shall pay the Purchase Price for the Purchased
Shares in cash or check payable to the Corporation and shall deliver a
duly-executed blank Assignment Separate from Certificate (in the form attached
hereto as Exhibit I) with respect to the Purchased Shares.
3. DELIVERY OF CERTIFICATES. The certificates representing any
Purchased Shares which are subject to the Repurchase Right shall be held in
escrow in accordance with the provisions of this Agreement.
4. SHAREHOLDER RIGHTS. Until such time as the Corporation
exercises the Repurchase Right, Participant (or any successor in interest) shall
have all the rights of a shareholder (including voting, dividend and liquidation
rights) with respect to the Purchased Shares, including the Purchased Shares
held in escrow hereunder, subject, however, to the transfer restrictions of
Article B.
5. COMPLIANCE WITH LAW. Under no circumstances shall shares of
Common Stock or other assets be issued or delivered to Participant pursuant to
the provisions of this Agreement unless, in the opinion of counsel for the
Corporation or its successors, there shall have been compliance with all
applicable requirements of the Federal and state securities laws, all applicable
listing requirements of any stock exchange (or the Nasdaq National Market if
applicable) on which the Common Stock is at the time listed for trading and all
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery.
B. TRANSFER RESTRICTIONS
<PAGE> 2
1. RESTRICTION ON TRANSFER. Except for any Permitted Transfer,
Participant shall not transfer, assign, encumber or otherwise dispose of any of
the Purchased Shares which are subject to the Repurchase Right.
2. RESTRICTIVE LEGEND. The stock certificate for the Purchased
Shares shall be endorsed with the following restrictive legend:
"The shares represented by this certificate
are subject to certain repurchase rights granted to the Corporation and
accordingly may not be sold, assigned, transferred, encumbered, or in
any manner disposed of except in conformity with the terms of a written
agreement dated , 199 between the Corporation and the
registered holder of the shares (or the predecessor in interest to the
shares). A copy of such agreement is maintained at the Corporation's
principal corporate offices."
3. TRANSFEREE OBLIGATIONS. Each person (other than the
Corporation) to whom the Purchased Shares are transferred by means of a
Permitted Transfer must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Corporation that such person is bound by
the provisions of this Agreement and that the transferred shares are subject to
the Repurchase Right to the same extent such shares would be so subject if
retained by Participant.
C. REPURCHASE RIGHT
1. GRANT. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the ninety (90)-day period
following the date Participant ceases for any reason to remain in Service, to
repurchase at the Purchase Price all or any portion of the Purchased Shares in
which Participant is not, at the time of his or her cessation of Service, vested
in accordance with the Vesting Schedule (such shares to be hereinafter referred
to as the "Unvested Shares").
2. EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right
shall be exercisable by written notice delivered to each Owner of the Unvested
Shares prior to the expiration of the ninety (90)-day exercise period. The
notice shall indicate the number of Unvested Shares to be repurchased and the
date on which the repurchase is to be effected, such date to be not more than
thirty (30) days after the date of such notice. The certificates representing
the Unvested Shares to be repurchased shall be delivered to the Corporation
prior to the close of business on the date specified for the repurchase.
Concurrently with the receipt of such stock certificates, the Corporation shall
pay to Owner, in cash or cash equivalents (including the cancellation of any
purchase-money indebtedness), an amount equal to the Purchase Price previously
paid for the Unvested Shares which are to be repurchased from Owner.
3. TERMINATION OF THE REPURCHASE RIGHT. The Repurchase Right
shall terminate with respect to any Unvested Shares for which it is not timely
exercised under
2.
<PAGE> 3
Paragraph C.2. In addition, the Repurchase Right shall terminate and cease to be
exercisable with respect to any and all Purchased Shares in which Participant
vests in accordance with the following Vesting Schedule:
(i) Upon Participant's completion of one (1) year of
Service measured from ___________________, 199__, Participant shall
acquire a vested interest in, and the Repurchase Right shall lapse with
respect to, twenty-five percent (25%) of the Purchased Shares.
(ii) Participant shall acquire a vested interest in,
and the Repurchase Right shall lapse with respect to, the remaining
Purchased Shares in successive equal monthly installments upon
Participant's completion of each additional month of Service over the
thirty-six (36)-month period measured from the initial vesting date
under subparagraph (i) above.
4. RECAPITALIZATION. Any new, substituted or additional
securities or other property (including cash paid other than as a regular cash
dividend) which is by reason of any Recapitalization distributed with respect to
the Purchased Shares shall be immediately subject to the Repurchase Right, but
only to the extent the Purchased Shares are at the time covered by such right.
Appropriate adjustments to reflect such distribution shall be made to the number
and/or class of Purchased Shares subject to this Agreement and to the price per
share to be paid upon the exercise of the Repurchase Right in order to reflect
the effect of any such Recapitalization upon the Corporation's capital
structure; provided, however, that the aggregate purchase price shall remain the
same.
5. CORPORATE TRANSACTION.
(a) Immediately prior to the consummation of any
Corporate Transaction, the Repurchase Right shall automatically lapse in its
entirety, except to the extent the Repurchase Right is assigned to the successor
corporation (or parent thereof) in connection with the Corporate Transaction.
(b) To the extent the Repurchase Right remains in
effect following a Corporate Transaction, such right shall apply to the new
capital stock or other property (including any cash payments) received in
exchange for the Purchased Shares in consummation of the Corporate Transaction,
but only to the extent the Purchased Shares are at the time covered by such
right. Appropriate adjustments shall be made to the price per share payable upon
exercise of the Repurchase Right to reflect the effect of the Corporate
Transaction upon the Corporation's capital structure; provided, however, that
the aggregate purchase price shall remain the same.
(c) The Repurchase Right shall automatically lapse in
its entirety, and all the Purchased Shares shall immediately vest in full, upon
an Involuntary Termination of Participant's Service within eighteen (18) months
following the effective date of a Corporate Transaction in which the Repurchase
Right has been assigned.
3.
<PAGE> 4
D. ESCROW
1. DEPOSIT. Upon issuance, the certificates for the Purchased
Shares which are subject to the Repurchase Right shall be deposited in escrow
with the Corporation to be held in accordance with the provisions of this
Article D. Each deposited certificate shall be accompanied by a duly-executed
Assignment Separate from Certificate in the form of Exhibit I. The deposited
certificates, together with any other assets or securities from time to time
deposited with the Corporation pursuant to the requirements of this Agreement,
shall remain in escrow until such time or times as the certificates (or other
assets and securities) are to be released or otherwise surrendered for
cancellation in accordance with Paragraph D.3. Upon delivery of the certificates
(or other assets and securities) to the Corporation, Owner shall be issued a
receipt acknowledging the number of Purchased Shares (or other assets and
securities) delivered in escrow.
2. RECAPITALIZATION/REORGANIZATION. Any new, substituted or
additional securities or other property which is by reason of any
Recapitalization or Reorganization distributed with respect to the Purchased
Shares shall be immediately delivered to the Corporation to be held in escrow
under this Article D, but only to the extent the Purchased Shares are at the
time subject to the escrow requirements hereunder. However, all regular cash
dividends on the Purchased Shares (or other securities at the time held in
escrow) shall be paid directly to Owner and shall not be held in escrow.
3. RELEASE/SURRENDER. The Purchased Shares, together with any
other assets or securities held in escrow hereunder, shall be subject to the
following terms relating to their release from escrow or their surrender to the
Corporation for repurchase and cancellation:
(i) Should the Corporation elect to exercise the
Repurchase Right with respect to any Unvested Shares, then the escrowed
certificates for those Unvested Shares (together with any other assets
or securities attributable thereto) shall be surrendered to the
Corporation concurrently with the payment to Owner of an amount equal
to the aggregate Purchase Price for such Unvested Shares, and Owner
shall cease to have any further rights or claims with respect to such
Unvested Shares (or other assets or securities attributable thereto).
(ii) Should the Corporation elect not to exercise the
Repurchase Right with respect to any Unvested Shares held at the time
in escrow hereunder, then the escrowed certificates for those shares
(together with any other assets or securities attributable thereto)
shall be released to Owner.
(iii) As the Purchased Shares (or any other assets or
securities attributable thereto) vest in accordance with the Vesting
Schedule, the certificates for those vested shares (as well as all
other vested assets and securities) shall be released from escrow upon
Owner's request, but not more frequently than once every six (6)
months.
4.
<PAGE> 5
(iv) All Purchased Shares which vest (and any other
vested assets and securities attributable thereto) shall be released
within thirty (30) days after the Participant's cessation of Service.
(v) Upon any earlier termination of the Repurchase
Right in connection with a Corporate Transaction, any Purchased Shares
(or other assets or securities) at the time held in escrow hereunder
shall promptly be released to Owner.
E. SPECIAL TAX ELECTION
1. SECTION 83(B) ELECTION . Under Code Section 83, the excess
of the fair market value of the Purchased Shares on the date any forfeiture
restrictions applicable to such shares lapse over the Purchase Price paid for
such shares will be reportable as ordinary income on the lapse date. For this
purpose, the term "forfeiture restrictions" includes the right of the
Corporation to repurchase the Purchased Shares pursuant to the Repurchase Right.
Participant may elect under Code Section 83(b) to be taxed at the time the
Purchased Shares are acquired, rather than when and as such Purchased Shares
cease to be subject to such forfeiture restrictions. Such election must be filed
with the Internal Revenue Service within thirty (30) days after the date of this
Agreement. Even if the fair market value of the Purchased Shares on the date of
this Agreement equals the Purchase Price paid (and thus no tax is payable), the
election must be made to avoid adverse tax consequences in the future. THE FORM
FOR MAKING THIS ELECTION IS ATTACHED AS EXHIBIT II HERETO. PARTICIPANT
UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30)-
DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE FORFEITURE
RESTRICTIONS LAPSE.
2. FILING RESPONSIBILITY. PARTICIPANT ACKNOWLEDGES THAT IT IS
PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY
ELECTION UNDER CODE SECTION 83(B), EVEN IF PARTICIPANT REQUESTS THE CORPORATION
OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
F. GENERAL PROVISIONS
1. ASSIGNMENT. The Corporation may assign the Repurchase Right
to any person or entity selected by the Board, including (without limitation)
one or more shareholders of the Corporation.
2. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Participant any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Participant) or of Participant, which rights are hereby
5.
<PAGE> 6
expressly reserved by each, to terminate Participant's Service at any time for
any reason, with or without cause.
3. NOTICES. Any notice required to be given under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the U.S. mail, registered or certified, postage
prepaid and properly addressed to the party entitled to such notice at the
address indicated below such party's signature line on this Agreement or at such
other address as such party may designate by ten (10) days advance written
notice under this paragraph to all other parties to this Agreement.
4. NO WAIVER. The failure of the Corporation in any instance
to exercise the Repurchase Right shall not constitute a waiver of any other
repurchase rights that may subsequently arise under the provisions of this
Agreement or any other agreement between the Corporation and Participant or
Participant's spouse. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.
5. CANCELLATION OF SHARES. If the Corporation shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Purchased Shares to be repurchased in
accordance with the provisions of this Agreement, then from and after such time,
the person from whom such shares are to be repurchased shall no longer have any
rights as a holder of such shares (other than the right to receive payment of
such consideration in accordance with this Agreement). Such shares shall be
deemed purchased in accordance with the applicable provisions hereof, and the
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required by this Agreement.
G. MISCELLANEOUS PROVISIONS
1. PARTICIPANT UNDERTAKING. Participant hereby agrees to take
whatever additional action and execute whatever additional documents the
Corporation may deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on either Participant or the
Purchased Shares pursuant to the provisions of this Agreement.
2. AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes
the entire contract between the parties hereto with regard to the subject matter
hereof. This Agreement is made pursuant to the provisions of the Plan and shall
in all respects be construed in conformity with the terms of the Plan.
3. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without resort
to that State's conflict-of-laws rules.
6.
<PAGE> 7
4. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
5. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and upon Participant, Participant's assigns and the legal
representatives, heirs and legatees of Participant's estate, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
6. POWER OF ATTORNEY. Participant's spouse hereby appoints
Participant his or her true and lawful attorney in fact, for him or her and in
his or her name, place and stead, and for his or her use and benefit, to agree
to any amendment or modification of this Agreement and to execute such further
instruments and take such further actions as may reasonably be necessary to
carry out the intent of this Agreement. Participant's spouse further gives and
grants unto Participant as his or her attorney in fact full power and authority
to do and perform every act necessary and proper to be done in the exercise of
any of the foregoing powers as fully as he or she might or could do if
personally present, with full power of substitution and revocation, hereby
ratifying and confirming all that Participant shall lawfully do and cause to be
done by virtue of this power of attorney.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first indicated above.
U.S. HOMECARE CORPORATION
By:________________________
Title:_____________________
Address:___________________
___________________________
___________________________
PARTICIPANT
Address:___________________
___________________________
7.
<PAGE> 8
SPOUSAL ACKNOWLEDGMENT
The undersigned spouse of Participant has read and hereby
approves the foregoing Stock Issuance Agreement. In consideration of the
Corporation's granting Participant the right to acquire the Purchased Shares in
accordance with the terms of such Agreement, the undersigned hereby agrees to be
irrevocably bound by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to purchase any
Purchased Shares in which Participant is not vested.
___________________________
PARTICIPANT'S SPOUSE
Address:___________________
___________________________
8.
<PAGE> 9
EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED________________ hereby sell(s), assign(s)
and transfer(s) unto U.S. HomeCare Corporation (the "Corporation"),
___________________ (_____) shares of the Common Stock of the Corporation
standing in his or her name on the books of the Corporation represented by
Certificate No.__________________ herewith and do(es) hereby irrevocably
constitute and appoint_____________________________________ Attorney to transfer
the said stock on the books of the Corporation with full power of substitution
in the premises. Dated: _____________________, 199__
Signature________________________
INSTRUCTION: Please do not fill in any blanks other than the signature line.
Please sign exactly as you would like your name to appear on the issued stock
certificate. The purpose of this assignment is to enable the Corporation to
exercise the Repurchase Right without requiring additional signatures on the
part of Participant.
<PAGE> 10
EXHIBIT II
SECTION 83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made is
______________ shares of the common stock of U.S. HomeCare Corporation
(3) The property was issued on ________________________, 199_.
(4) The taxable year in which the election is being made is the calendar
year 199__ .
(5) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at the original purchase
price if for any reason taxpayer's employment with the issuer is
terminated. The issuer's repurchase right lapses in a series of annual
and monthly installments over a four (4)-year period ending on
________________________, 199_.
(6) The fair market value at the time of transfer (determined without
regard to any restriction other than a restriction which by its terms
will never lapse) is $________ per share.
(7) The amount paid for such property is $ _________ per share.
(8) A copy of this statement was furnished to U.S. HomeCare Corporation for
whom taxpayer rendered the services underlying the transfer of
property.
(9) This statement is executed on ________________________, 199_.
___________________________________ ____________________________________
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after the execution date of the Stock Issuance Agreement. This
filing should be made by registered or certified mail, return receipt requested.
Participant must retain two (2) copies of the completed form for filing with his
or her Federal and state tax returns for the current tax year and an additional
copy for his or her records.
<PAGE> 11
APPENDIX
The following definitions shall be in effect under the
Agreement:
A. AGREEMENT shall mean this Stock Issuance Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean any of the following
shareholder-approved transactions to which the Corporation is a party:
(a) a merger or consolidation in which the
Corporation is not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the Company
is incorporated;
(b) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets; or
(c) any other transaction in which substantially all
of the outstanding shares of Common Stock are exchanged for securities,
cash or other property of any other corporate or business entity.
F. CORPORATION shall mean U.S. HomeCare Corporation, a New York
corporation.
G. INVOLUNTARY TERMINATION shall mean the termination of Participant's
Service which occurs by reason of:
(i) Participant's involuntary dismissal or
discharge by the Corporation for reasons other than Misconduct, or
(ii) Participant's voluntary resignation
following (A) a change in Participant's position with the Corporation
which materially reduces Participant's level of responsibility, (B) a
reduction in Participant's level of compensation (including base
salary, fringe benefits and any non-discretionary and
objective-standard incentive payment or bonus award) by more than
fifteen percent (15%) or (C) a relocation of Participant's place of
employment by more than fifty (50) miles, provided and only if such
change, reduction or relocation is effected by the Corporation without
Participant's consent.
A-1.
<PAGE> 12
H. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Participant, any unauthorized use or disclosure by
Participant of confidential information or trade secrets of the Corporation (or
any Parent or Subsidiary), or any other intentional misconduct by Participant
adversely affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
Participant or any other person in the Service of the Corporation (or any Parent
or Subsidiary).
I. OWNER shall mean Participant and all subsequent holders of the
Purchased Shares who derive their chain of ownership through a Permitted
Transfer from Participant.
J. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
K. PARTICIPANT shall mean the person to whom shares are issued under
the Stock Issuance Program.
L. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the
Purchased Shares, provided and only if Participant obtains the Corporation's
prior written consent to such transfer, (ii) a transfer of title to the
Purchased Shares effected pursuant to Participant's will or the laws of
intestate succession following Participant's death or (iii) a transfer to the
Corporation in pledge as security for any purchase-money indebtedness incurred
by Participant in connection with the acquisition of the Purchased Shares.
M. PLAN shall mean the Corporation's 1995 Stock Option/Stock Issuance
Plan.
N. PLAN ADMINISTRATOR shall mean either the Board or a committee of
Board members, to the extent the committee is at the time responsible for the
administration of the Plan.
O. PURCHASE PRICE shall have the meaning assigned to such term in
Paragraph A.1.
P. PURCHASED SHARES shall have the meaning assigned to such term in
Paragraph A.1.
Q. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the Corporation's outstanding Common Stock as a class without the
Corporation's receipt of consideration.
R. REORGANIZATION shall mean any of the following transactions:
A-2.
<PAGE> 13
(i) a merger or consolidation in which the Corporation is not
the surviving entity,
(ii) a sale, transfer or other disposition of all or
substantially all of the Corporation's assets,
(iii) a reverse merger in which the Corporation is the
surviving entity but in which the Corporation's outstanding voting
securities are transferred in whole or in part to a person or persons
different from the persons holding those securities immediately prior
to the merger, or
(iv) any transaction effected primarily to change the state in
which the Corporation is incorporated or to create a holding company
structure.
S. REPURCHASE RIGHT shall mean the right granted to the Corporation in
accordance with Article C.
T. SERVICE shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by an individual in the capacity of an employee,
subject to the control and direction of the employer entity as to both the work
to be performed and the manner and method of performance, a non-employee member
of the board of directors or a consultant.
U. STOCK ISSUANCE PROGRAM shall mean the Stock Issuance Program under
the Plan.
V. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
W. VESTING SCHEDULE shall mean the vesting schedule specified in
Paragraph C.3, subject to the acceleration provisions upon an Involuntary
Termination following a Corporate Transaction.
X. UNVESTED SHARES shall have the meaning assigned to such term in
Paragraph C.1.
A-3.
<PAGE> 1
EXHIBIT 99.11
ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Issuance Agreement dated ______ (the
"Issuance Agreement") by and between U.S. HomeCare Corporation (the
"Corporation") and ______ ("Participant") evidencing the stock issuance on such
date to Participant under the terms of the Corporation's 1995 Stock Option/Stock
Issuance Plan, and such provisions shall be effective immediately. All
capitalized terms in this Addendum, to the extent not otherwise defined herein,
shall have the meanings assigned to such terms in the Issuance Agreement.
SPECIAL TAX ELECTIONS
1. STOCK WITHHOLDING. Participant is hereby granted the
election to have the Corporation withhold, as and when Participant vests in the
Purchased Shares, a portion of those Purchased Shares with an aggregate Fair
Market Value not to exceed one hundred percent (100%) of the applicable Federal,
state and local income and employment tax withholding liability (the "Taxes")
incurred by Participant in connection with the vesting of those Purchased
Shares. Such election shall only be exercisable in the event Participant does
not otherwise make an Internal Revenue Code Section 83(b) election to be taxed
on the Purchased Shares at the time of their initial issuance pursuant to the
Issuance Agreement.
Any such exercise of the election must be effected in
accordance with the following terms:
a. The election must be made on or before the date the
liability for the Taxes is determined (the "Tax Determination Date").
b. The election shall be irrevocable.
c. The election shall be subject to the approval of the Plan
Administrator, and none of the Purchased Shares shall be withheld in
satisfaction of the Taxes, except to the extent the election is
approved by the Plan Administrator.
d. The Purchased Shares withheld pursuant to the election
shall be valued at Fair Market Value (as such term is defined in the
Plan) on the Tax Determination Date.
e. In no event may the number of shares of Common Stock
requested to be withheld exceed in Fair Market Value the dollar amount
of the Taxes.
<PAGE> 2
If the stock withholding election is made by
Participant at a time when Participant is an officer or director of the
Corporation subject to the short-swing profit restrictions of Section 16(b) of
the Securities Exchange Act of 1934, as amended, then the following limitations,
in addition to the preceding provisions, shall also be applicable:
a. The election shall not become effective at any time prior
to the expiration of the six (6)-month period measured from the later
of the issue date of the Unvested Shares to which such election
pertains or the Effective Date of this Addendum indicated below, and no
Purchased Shares shall be withheld in connection with any Tax
Determination Date which occurs before the expiration of such six
(6)-month period.
b. The stock withholding election must be made in accordance
with the following limitations:
(i) Such election must be made at least six (6)
months before the Tax Determination Date, or
(ii) Such election must be exercised in the quarterly
"window" period in which or immediately prior to which the Tax
Determination Date occurs. Quarterly window periods shall
begin on the third (3rd) business day following the date of
public release of each quarterly or annual statement of the
Corporation's sales and earnings and end on the earlier of the
twelfth (12th) business day following such release date or the
Tax Determination Date.
c. The six (6)-month periods specified in clauses a and b
shall not be applicable in the event of Participant's death or
Permanent Disability (as such term is defined in the Plan).
2. STOCK DELIVERY. Participant is hereby granted the election
to deliver vested shares of Common Stock previously acquired by Participant
(other than in connection with the share issuance or share vesting triggering
the Taxes) with an aggregate Fair Market Value not to exceed one hundred percent
(100%) of the Taxes incurred by Participant either at the time the Shares are
initially issued pursuant to the Issuance Agreement (in the event Participant
elects to be taxed on the Shares at such time in accordance with Internal
Revenue Code Section 83(b)) or at the time the Purchased Shares subsequently
vest.
Any such exercise of the election must be effected in
accordance with the following terms:
a. The election must be made on or before the Tax
Determination Date.
2.
<PAGE> 3
b. The election shall be irrevocable.
c. The election shall be subject to the approval of the Plan
Administrator, and none of the delivered shares shall be accepted in
satisfaction of the Taxes, except to the extent the election is
approved by the Plan Administrator.
d. The shares of Common Stock shall be valued at Fair Market
Value on the Tax Determination Date.
e. In no event may the number of delivered shares exceed in
Fair Market Value the dollar amount of the Taxes on the Tax
Determination Date.
IN WITNESS WHEREOF, U.S. HomeCare Corporation has caused this
Addendum to be executed by its duly-authorized officer, and Participant has
executed this Addendum, all as of the Effective Date specified below.
U.S. HOMECARE CORPORATION
By:__________________________
Title:_______________________
____________________________
______, PARTICIPANT
EFFECTIVE DATE:____________________________, 199__
3.
<PAGE> 1
EXHIBIT 99.12
ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Issuance Agreement dated ______ (the
"Issuance Agreement") by and between U.S. HomeCare Corporation (the
"Corporation") and ______ ("Participant") evidencing the stock issuance on such
date to Participant under the terms of the Corporation's 1995 Stock Option/Stock
Issuance Plan, and such provisions shall be effective immediately. All
capitalized terms in this Addendum, to the extent not otherwise defined herein,
shall have the meanings assigned to such terms in the Issuance Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CHANGE IN CONTROL
1. No accelerated vesting of the Purchased Shares shall occur
upon a Change in Control, and the Repurchase Right shall continue to remain in
full force and effect in accordance with the provisions of the Issuance
Agreement. The Participant shall, over Participant's continued period of Service
after the Change in Control, continue to vest in the Purchased Shares in
accordance with the provisions of the Issuance Agreement. However, immediately
upon an Involuntary Termination of Participant's Service within eighteen (18)
months following the Change in Control, the Repurchase Right shall terminate
automatically and all the Purchased Shares shall vest in full.
2. For purposes of this Addendum, a CHANGE IN CONTROL shall be
deemed to occur in the event of a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the direct or indirect acquisition by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's shareholders which the Board does not recommend such
shareholders to accept, or
<PAGE> 2
(ii) a change in the composition of the Board over a
period of thirty-six (36) months or less such that a majority of the
Board members ceases by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election or
nomination was approved by the Board.
IN WITNESS WHEREOF, U.S. HomeCare Corporation has caused this
Addendum to be executed by its duly-authorized officer, and Participant has
executed this Addendum, all as of the Effective Date specified below.
U.S. HOMECARE CORPORATION
By:________________________
Title:_____________________
______, PARTICIPANT
EFFECTIVE DATE:_____________________________, 199__
