<PAGE> 1
As filed with the Securities and Exchange Commission on June 28, 1996
REGISTRATION NO. 333-
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===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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MEDAPHIS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 58-1651222
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2700 CUMBERLAND PARKWAY
SUITE 300
ATLANTA, GEORGIA 30339
(Address, including zip code, of registrant's principal executive offices)
MEDAPHIS CORPORATION EMPLOYEE STOCK PURCHASE PLAN
(Full title of plan)
RANDOLPH G. BROWN
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT
2700 CUMBERLAND PARKWAY
SUITE 300
ATLANTA, GEORGIA 30339
(770) 444-5300
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
COPIES TO:
ROBERT W. MILLER, ESQ. WILLIAM R. SPALDING, ESQ.
KING & SPALDING MEDAPHIS CORPORATION
191 PEACHTREE STREET 2700 CUMBERLAND PARKWAY
ATLANTA, GEORGIA 30303-1763 SUITE 300
(404) 572-4600 ATLANTA, GEORGIA 30339
(770) 444-5300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
Proposed Maximum Proposed Maximum
Amount to Offering Price Per Aggregate Offering Amount of
Title of Securities to be Registered be Registered Share(1) Price(1) Registration Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 300,000 $36.00 $10,800,000 $3,724
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(h) on the basis of the high and low prices of Common
Stock of Medaphis Corporation on June 27, 1996.
Exhibit Index Located on Page 8
Page 1 of 31 Pages.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8
will be sent or given to participating employees as specified by Rule 428(b)(1)
of the Securities Act of 1933, as amended (the "Securities Act"). These
documents and the documents incorporated by reference into this Registration
Statement pursuant to Item 3 of Part II of this Registration Statement, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents previously filed by the Registrant with the
Securities and Exchange Commission are incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, filed on April 1, 1996;
(b) All reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since December 31, 1995; and
(c) The description of the Registrant's common stock, par value $.01
per share ("Common Stock"), contained in the Registration Statement on Form
8-A/A dated May 22, 1996.
All documents filed by the Registrant subsequent to the date of this
Registration Statement pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act and prior to the filing of a post-effective amendment which
indicates that all securities offered hereunder have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and to be a part of
this Registration Statement from the date of filing of such documents.
Item 6. Indemnification of Directors and Officers.
The following summary is qualified in its entirety by reference to the
complete text of the statute, Amended and Restated Certificate of
Incorporation, as amended, Amended and Restated By-Laws and agreement referred
to below.
The Registrant's Amended and Restated By-Laws provide that each person who
was or is made a party to, is threatened to be made a party to or is otherwise
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director, officer, employee or agent of the Registrant (or is or was serving at
the request of the Registrant as a director, officer, employee or agent of
another entity), will be indemnified and held harmless by the Registrant to the
fullest extent permitted by the Delaware General Corporation Law as it
currently exists or is later amended.
Under Section 145 of the Delaware General Corporation Law, a corporation
may indemnify a director, officer, employee or agent of the corporation (or
other entity if such person is serving in such capacity at the corporation's
request) against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. In the case of an action brought by or in the right of the
corporation, the corporation may indemnify a director,
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<PAGE> 3
officer, employee or agent of the corporation (or other entity if such person is
serving in such capacity at the corporation's request) against expenses
(including attorneys' fees) actually and reasonably incurred by him if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation, except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless a court determines
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnification
for such expenses as the court shall deem proper. Expenses (including
attorneys' fees) incurred by an officer or director in defending any civil,
criminal, administrative or investigative action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation.
The Registrant's Amended and Restated Certificate of Incorporation, as
amended, provides that a director of the Registrant shall not be personally
liable to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Registrant or its stockholders, (ii) for any
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law or (iv) for any transaction in which the director derived an
improper personal benefit.
In addition, the Registrant and Randolph G. Brown are parties to an
agreement pursuant to which the Registrant has agreed to indemnify and hold
harmless Mr. Brown to the fullest extent permitted by the Delaware General
Corporation Law as it presently exists or to such greater extent as such law
may subsequently be amended.
The Registrant maintains directors and officers liability insurance. Such
policies have a deductible of $350,000 and an annual per occurrence and
aggregate cap on coverage of $25 million.
<TABLE>
<CAPTION>
Item 8. Exhibits.
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Exhibit Description
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<S> <C>
4.1 Amended and Restated Certificate of Incorporation of Registrant
(incorporated by reference to Exhibit 3.1 of Registrant's Registration
Statement on Form S-1, File No. 33-42216).
4.2 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Registrant (incorporated by reference to Exhibit 3 of
Registrant's Quarterly Report on Form 10-Q for the Quarterly Period Ended
March 31, 1993).
4.3 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Registrant (incorporated by reference to Exhibit 3.3 of
Registrant's Registration Statement on Form 8-A/A, filed on March 28,
1995).
4.4 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Registrant (incorporated by reference to Exhibit 4.4 of
Registrant's Registration Statement on Form S-8, Registration No.
333-03213).
4.5 Amended and Restated By-Laws of Registrant (incorporated by reference to
Exhibit 3.2 of Registrant's 1992 Form 10-K, File No. 000-19480).
5 Opinion of King & Spalding regarding legality of shares being registered.
23.1 Consent of Deloitte & Touche LLP.
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of Coopers & Lybrand LLP.
23.4 Consent of Arthur Andersen LLP.
23.5 Consent of King & Spalding (contained in the opinion filed as Exhibit 5).
99 Medaphis Corporation Employee Stock Purchase Plan.
</TABLE>
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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<PAGE> 5
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<PAGE> 6
SIGNATURES
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Pursuant to the requirements of the Securities Act of 1933, Medaphis
Corporation 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 Atlanta, State of Georgia, on this 28th day of
June, 1996.
MEDAPHIS CORPORATION
By: /s/ Randolph G. Brown
--------------------------
Randolph G. Brown
Chairman, Chief Executive
Officer and President
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<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capabilities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Randolph G. Brown Chairman, Chief Executive June 28, 1996
- ----------------------------------- Officer, President
Randolph G. Brown and Director
/s/ Michael R. Cote Senior Vice June 28, 1996
- ----------------------------------- President -- Finance,
Michael R. Cote Chief Financial
Officer and Assistant
Secretary
/s/ James S. Douglass Vice President, June 28, 1996
- ----------------------------------- Corporate Controller and
James S. Douglass Chief Accounting Officer
/s/ Robert C. Bellas, Jr. Director June 28, 1996
- -----------------------------------
Robert C. Bellas, Jr.
/s/ David R. Holbrooke, M.D. Director June 28, 1996
- -----------------------------------
David R. Holbrooke, M.D.
/s/ David E. McDowell Director June 28, 1996
- -----------------------------------
David E. McDowell
/s/ Steven G. Papermaster Director June 25, 1996
- -----------------------------------
Steven G. Papermaster
/s/ Dennis A. Pryor Director June 28, 1996
- -----------------------------------
Dennis A. Pryor
</TABLE>
-7-
<PAGE> 8
EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit Description Page
- -------- ----------- ----
<S> <C> <C>
4.1 Amended and Restated Certificate of Incorporation of Registrant
(incorporated by reference to Exhibit 3.1 of Registrant's
Registration Statement on Form S-1, File No. 33-42216). --
4.2 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Registrant (incorporated by reference to Exhibit 3
of Registrant's Quarterly Report on Form 10-Q for the Quarterly
Period Ended March 31, 1993). --
4.3 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Registrant (incorporated by reference to Exhibit 3.3
of Registrant's Registration Statement on Form 8-A/A, filed on March 28, 1995). --
4.4 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Registrant (incorporated by reference to Exhibit 4.4 of
Registrant's Registration Statement on Form S-8, Registration No. 333-03213). --
4.5 Amended and Restated By-Laws of Registrant (incorporated by reference to Exhibit
3.2 of Registrant's 1992 Form 10-K, File No. 000-19480). --
5 Opinion of King & Spalding regarding legality of shares being
registered. 9
23.1 Consent of Deloitte & Touche LLP. 12
23.2 Consent of Price Waterhouse LLP. 14
23.3 Consent of Coopers & Lybrand LLP. 16
23.4 Consent of Arthur Andersen LLP. 18
23.5 Consent of King & Spalding
(contained in the opinion filed as Exhibit 5). --
99 Medaphis Corporation Employee Stock Purchase Plan. 20
</TABLE>
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<PAGE> 1
EXHIBIT 5
OPINION OF KING & SPALDING
REGARDING LEGALITY OF SHARES BEING REGISTERED
<PAGE> 2
[LETTERHEAD OF KING & SPALDING]
June 28, 1996
Medaphis Corporation
2700 Cumberland Parkway
Suite 300
Atlanta, Georgia 30339
Re: Medaphis Corporation -- Form S-8 Registration Statement
-------------------------------------------------------
Gentlemen:
We have acted as counsel to Medaphis Corporation, a Delaware corporation
(the "Company"), in connection with the preparation of a Registration Statement
on Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission relating to 300,000 shares of the Company's voting common
stock, par value $.01 per share ("Common Stock"), to be offered pursuant to the
Medaphis Corporation Employee Stock Purchase Plan (the "Plan"). In so acting,
we have examined and relied upon such records, documents, certificates and
other instruments as in our judgment are necessary or appropriate to form the
basis for the opinion set forth below. In all such examinations, we have
assumed the genuineness of signatures on original documents and the conformity
to such original documents of all copies submitted to us as certified,
conformed or photographic copies, and as to certificates of public officials,
we have assumed the same to have been properly given and to be accurate.
This opinion is limited in all respects to the federal laws of the United
States of America and the laws of the State of Delaware, and no opinion is
expressed with respect to the laws of any other jurisdiction or any effect
which such laws may have on the opinion expressed below.
Based upon the foregoing and subject to the limitations, qualifications
and assumptions set forth in this letter, we are of the opinion that the shares
of Common Stock to be issued upon the exercise of stock options ("Options")
granted under the Plan are duly authorized and, assuming (i) the shares of
Common Stock so issuable continue to be duly authorized on the dates of
exercise, (ii) on the dates of exercise, the Options will have been duly
executed, issued, and delivered, will constitute the legal, valid, and binding
obligations of the Company, and will (subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of creditors' rights
generally) be enforceable as to the Company in accordance with their terms, and
<PAGE> 3
Medaphis Corporation
June 28, 1996
Page 2
- ----------------------
(iii) no change occurs in the applicable law or the pertinent facts, then, when
the Options are exercised in accordance with their terms and the terms of the
Plan (including the payment of any consideration therefor), the shares of
Common Stock so issuable will be validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an Exhibit to the Registration
Statement.
Very truly yours,
/s/ King & Spalding
KING & SPALDING
<PAGE> 1
EXHIBIT 23.1
CONSENT OF DELOITTE & TOUCHE LLP
<PAGE> 2
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the following:
- - To the incorporation by reference in this Registration Statement of Medaphis
Corporation on Form S-8 (the "Registration Statement") of our report dated
May 6, 1996 relating to the supplemental consolidated financial statements of
Medaphis Corporation appearing in the Current Report on Form 8-K dated April
3, 1996 of Medaphis Corporation; and
- - To the incorporation by reference in the Registration Statement of our report
dated March 15, 1996 relating to the financial statement schedule of Medaphis
Corporation appearing in the Annual Report on Form 10-K of Medaphis
Corporation for the year ended December 31, 1995.
/s/ Deloitte & Touche LLP
Atlanta, Georgia
June 27, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF PRICE WATERHOUSE LLP
<PAGE> 2
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 31, 1996 relating to the
consolidated financial statements of BSG Corporation which appears on page F-2
of Exhibit 99.4 of the Current Report on Form 8-K of Medaphis Corporation dated
March 13, 1996.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Austin, Texas
June 27, 1996
<PAGE> 1
EXHIBIT 23.3
CONSENT OF COOPERS & LYBRAND LLP
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Medaphis Corporation on Form S-8 of our report, which includes an explanatory
paragraph regarding a change in the method of accounting for income taxes, dated
August 10, 1994, on our audits of the financial statements of Healthcare
Recoveries, Inc. as of June 30, 1994 and 1993 and for the three years in the
period ended June 30, 1994. We also consent to the reference to our firm under
the caption "Experts."
/s/ Coopers & Lybrand LLP
Louisville, Kentucky
June 27, 1996
<PAGE> 1
EXHIBIT 23.4
CONSENT OF ARTHUR ANDERSEN LLP
<PAGE> 2
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our report dated
December 8, 1995 on the combined financial statements of The Receivables
Management Division of MedQuist, Inc. included in Medaphis Corporation's Form
8-K filed on January 19, 1996 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
Philadelphia, Pa.,
June 27, 1996
<PAGE> 1
EXHIBIT 99
MEDAPHIS CORPORATION EMPLOYEE STOCK PURCHASE PLAN
<PAGE> 2
MEDAPHIS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
<PAGE> 3
TABLE OF CONTENTS
MEDAPHIS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
1. Purpose............................................................................ 1
2. Definitions........................................................................ 1
3. Eligibility and Participation...................................................... 2
4. Payroll Deductions................................................................. 3
5. Withdrawals and Distributions upon Termination of Participation.................... 3
6. Grant of Option and Option Exercise Price.......................................... 4
7. Stock Subject to Plan.............................................................. 5
8. Administration and Indemnification of Committee.................................... 6
9. Administrative Fees................................................................ 7
10. Transferability.................................................................... 7
11. Adjustments Upon Changes in Capitalization......................................... 7
12. General Restriction................................................................ 7
13. Amendment or Termination........................................................... 7
14. Notices............................................................................ 8
15. No Contract........................................................................ 8
16. Headings and Construction.......................................................... 8
17. Section 16 Compliance.............................................................. 8
18. Approval of Stockholders........................................................... 8
</TABLE>
<PAGE> 4
MEDAPHIS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Medaphis Corporation Employee Stock
Purchase Plan (the "Plan") is to provide employees of Medaphis Corporation, a
Delaware corporation (the "Company"), and its subsidiary companies with an
opportunity to acquire an interest in the Company through the purchase of Common
Stock of the Company ("Common Stock"). The Company intends the Plan to qualify
as an employee stock purchase plan under Section 423 of the Internal Revenue
Code. Accordingly, the provisions of the Plan shall be construed so as to extend
and limit participation in a manner consistent with the requirements of Section
423. Subject to the condition set forth in Paragraph 18, this Plan shall be
effective as of July 1, 1996.
2. DEFINITIONS.
(a) "Board of Directors" means the board of directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Compensation" means salary and wages paid to an Eligible Employee
by the Company or a Subsidiary, including commissions and bonuses, but
excluding income attributable to the exercise of stock options, and awards
and other forms of remuneration.
(d) "Contribution Account" means the bookkeeping account established
on behalf of a Participant to which shall be credited the amount of the
Participant's payroll deductions and from which shall be debited all funds
used to purchase Common Stock for the Participant under the Plan.
(e) "Eligible Employee" means any Employee of the Company or a
Subsidiary excluding:
(1) any Employee who customarily is employed for twenty (20) hours
per week or less; or
(2) any Employee who would own (immediately after the grant of an
option under the Plan and applying the rules of Code Section 424(d) in
determining stock ownership) shares, and/or hold outstanding options to
purchase shares, possessing five percent (5%) or more of the total
combined voting power or value of all classes of shares of the Company
or of any Parent or Subsidiary.
(f) "Employee" means any person who is employed by the Company or a
Subsidiary for purposes of the Federal Insurance Contributions Act.
(g) "Enrollment Period" means the period commencing on each July 1 and
ending on the next succeeding June 30.
(h) "Entry Date" means July 1st of each calendar year.
(i) "Parent" means a corporation, if any, having the relationship to
the Company described in Section 424(e) of the Code.
(j) "Participant" means an Employee who participates in the Plan
pursuant to Paragraph 3.
(k) "Purchase Period" means each six-month period ending December 31
and June 30 during an Enrollment Period.
(l) "Subsidiary" means any corporation having the relationship to the
Company described in Section 424(f) of the Code and which the Board of
Directors, or its designee, has designated as eligible to participate in
the Plan.
3. ELIGIBILITY AND PARTICIPATION.
(a) Any person who is an Eligible Employee on an Entry Date shall be
eligible to become a Participant in the Plan beginning on that Entry Date
and shall become a Participant as of that Entry Date by completing an
authorization form provided by the Company, in the form and containing such
terms and conditions as the Company from time to time may determine (the
"Authorization Form"), and filing it with the Company by the date required
by the Company.
<PAGE> 5
(b) Any person who first becomes an Eligible Employee during an
Enrollment Period shall be eligible to become a Participant in the Plan as
of the first day of the Purchase Period beginning after the date on which
that person became an Eligible Employee and shall become a Participant as
of such date by completing an Authorization Form and filing it with the
Company by the date required by the Company.
(c) A person shall cease to be a Participant upon the earliest to
occur of:
(1) the date the Participant ceases to be an Eligible Employee, for
any reason;
(2) the first day of the Purchase Period beginning after the date
on which the Participant ceases payroll deductions under the Plan
pursuant to Paragraph 4; or
(3) the date of a withdrawal from the Plan by the Participant under
Paragraph 5.
4. PAYROLL DEDUCTIONS. A Participant may contribute to the Plan through
payroll deductions as follows:
(a) A Participant shall on his Authorization Form elect to have
payroll deductions made from his Compensation at a rate which, expressed as
a whole percentage, shall be at least one percent (1%) and not exceed ten
percent (10%) of his Compensation.
(b) Payroll deductions for a Participant shall be made during the
Enrollment Period for which the Authorization Form is effective and shall
continue until the effective date of an Employee's authorization to change
the rate of his payroll deductions or discontinue payroll deductions, or as
otherwise provided in Section 5.
(c) A Participant may change the rate of his payroll deductions
effective on the first day of any Purchase Period, provided the Employee
files with the Company an Authorization Form requesting such change by the
date required by the Company before the end of the current Purchase Period.
(d) A Participant may discontinue payroll deductions any time after
the first day of the payroll period coinciding with or immediately
following the Company's processing any Authorization Form on behalf of the
Participant. If upon cessation of payroll deductions, a Participant has
cash credited to his Contribution Account which he has not elected to
withdraw pursuant to Paragraph 5, he shall remain a Participant in the Plan
until the end of the then current Purchase Period.
(e) All payroll deductions made for a Participant shall be credited to
his Contribution Account under the Plan and will be used for the purchase
of Common Stock pursuant to Section 6 hereof. All payroll deductions made
for a Participant under the Plan shall be commingled with the general
assets of the Company and no separate fund shall be established for each
such Participant. Participants' Contribution Accounts are solely for
bookkeeping purposes and the Company shall not be obligated to pay
Participants interest on Contribution Account balances.
(f) A Participant may not make any separate cash payments or other
contributions to his Contribution Account in a manner other than through
payroll deductions as set forth in this Paragraph 4.
5. WITHDRAWALS AND OTHER TERMINATIONS OF PARTICIPATION.
(a) A Participant may elect to cease participating in the Plan and to
withdraw the balance of the cash credited to his Contribution Account under
the Plan by giving written notice to the Company prior to the date
specified by the Company before the end of the current Purchase Period. A
Participant who receives a withdrawal of the cash balance of his
Contribution Account under the Plan shall not be entitled to participate in
the Plan until the next Entry Date.
(b) The Company shall pay the cash balance of a Participant's
Contribution Account to the Participant as soon as administratively
feasible following (i) the date of processing of the withdrawal request or
(ii) the date a person otherwise ceases to be a Participant pursuant to
Paragraph 3(c), clauses (1) and (2), as applicable (the events described in
this subparagraph being referred to collectively as a "Termination Event").
(c) Upon the occurrence of a Termination Event, the Participant's
outstanding options under Paragraph 6 of the Plan to purchase shares of
Common Stock shall immediately terminate.
<PAGE> 6
(d) Upon the occurrence of a Termination Event, no further payroll
deductions will be made from the Participant's Compensation.
6. GRANT OF OPTION AND OPTION EXERCISE PRICE.
(a) As of the beginning of each Purchase Period during each Enrollment
Period, a Participant is granted an option to purchase that whole number of
shares of Common Stock as does not exceed in value the result of dividing
up to 10% of the Participant's Compensation for that Purchase Period by the
lesser of (i) eighty-five (85%) of the fair market value of the Common
Stock on the first business day of the Purchase Period, or (ii) eighty-five
(85%) of the fair market value of the Common Stock on the last business day
of the Purchase Period.
(b) On the last business day of each Purchase Period during an
Enrollment Period, each Participant will be deemed to have exercised his
option to the extent of the funds then held in the Participant's
Contribution Account and such funds will be applied to the purchase of
whole shares of Common Stock; provided, however, the number of shares
purchased for a Participant shall not be less than 1 share. The price of
each share of Common Stock to be purchased with a Participant's
Contribution Account during a Purchase Period shall be the lesser of
eighty-five percent (85%) of the fair market value of one share of Common
Stock on the first business day of the Purchase Period and (ii) eighty-five
(85%) of the fair market value of one share of Common Stock on the last day
of the Purchase Period. Any funds remaining after the application of a
Participant's Contribution Account to the purchase of shares of Common
Stock shall continue to be credited to the Participant's Contribution
Account and available for purchases of shares on the last business day of
the next succeeding Purchase Period.
(c) Notwithstanding the preceding subparagraphs or any other
provisions of the Plan, no Participant shall be granted an option which
permits his rights to purchase shares under all employee stock purchase
plans of the Company and its Parent and Subsidiaries to accrue at a rate
which exceeds $25,000 of the fair market value of the shares (determined at
the time the option is granted) for each calendar year in which such stock
option is outstanding at any time.
(d) For purposes of the preceding subparagraphs, the fair market value
of a share of Common Stock shall be determined as of each relevant date as
follows:
(1) if the Common Stock is traded on a national securities
exchange, the closing sale price on that date;
(2) if the Common Stock is not traded on any such exchange, the
closing sale price as reported by the NASDAQ Stock Market;
(3) if no such closing sale price information is available, the
average of the closing bid and asked prices as reported by the NASDAQ
Stock Market; or
(4) if there are no such closing bid and asked prices, the average
of the closing bid and asked prices as reported by any other commercial
service.
(e) All options granted during an Enrollment Period shall expire on
the last day of that Enrollment Period.
7. STOCK SUBJECT TO PLAN.
(a) The shares of Common Stock (the "Shares") to be sold to
Participants under the Plan may, at the election of the Company, be either
treasury shares, shares originally issued for such purpose or shares
acquired on the open market. The maximum number of Shares made available
for sale under the Plan shall be three hundred thousand (300,000), subject
to adjustment upon changes in capitalization of the Company as provided in
Paragraph 11. If the total number of Shares elected to be purchased under
the Plan exceeds the number of Shares then available under the Plan, the
Company shall make a pro rata allocation of the Shares available in as
nearly a uniform manner as shall be practicable and as it shall determine
to be equitable.
<PAGE> 7
(b) A Participant shall not have rights as a stockholder with respect
to any Shares covered by his option until the last day of the Purchase
Period on which the Shares are purchased. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is
prior to the date the Shares are purchased, except as otherwise provided in
the Plan.
(c) Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant.
8. ADMINISTRATION AND INDEMNIFICATION OF COMMITTEE.
(a) The Plan shall be administered by the Compensation Committee of
the Board of Directors (the "Committee"). Vacancies on the Committee shall
be filled by the Board of Directors. The Committee shall hold meetings at
such times and places as it may determine. Acts approved by a majority of
the Committee in a meeting at which a quorum is present, or acts reduced to
or approved in writing by a majority of the members of the Committee, shall
be the valid acts of the Committee.
(b) The Committee acting in its absolute discretion shall exercise
such power and take such action as expressly called for under the Plan, and
further, the Committee shall have the power to interpret the Plan and
(subject to Rule 16b-3 of the Securities Exchange Act of 1934 (the
"Exchange Act"), as amended) to take such other action (except to the
extent the right to take such action is expressly and exclusively reserved
for the Board of Directors or the Company's stockholders) in the
administration and operation of the Plan as the Committee deems equitable
under the circumstances, which action shall be binding on the Company, on
each affected Participant and on each other person directly or indirectly
affected by such action. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any option granted under it.
(c) In addition to such other rights of indemnification that they may
have as directors of the Company or a member of the Committee, the members
of the Committee shall be indemnified by the Company against the reasonable
expenses, including attorneys' fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in
connection with the Plan or any option granted thereunder, and against all
amounts paid by them in settlement thereof (provided the settlement is
approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding
except in relation to matters as to which it shall be adjudged in the
action, suit or proceeding that the Committee member is liable for
negligence or misconduct in the performance of his duties; provided that
within sixty (60) days after institution of the action, suit or proceeding
a Committee member shall in writing offer the Company the opportunity, at
its own expense, to handle and defend it.
9. ADMINISTRATIVE FEES. The Committee may charge Participants'
Contribution Accounts for reasonable administrative fees to defray the
administrative costs of the Plan, which shall in no event exceed the actual
administrative costs of the Plan.
10. TRANSFERABILITY. Neither payroll deductions credited to a
Participant's Contribution Account nor any rights with regard to the exercise of
an option or to receive shares under the Plan may be assigned, transferred,
pledged, or otherwise disposed of in any way by the Participant. Any attempted
assignment, transfer, pledge, or other disposition shall be without effect.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The Committee will adjust
the total number of Shares and the purchase price, as determined under Paragraph
6, for any Shares available for sale under the Plan for any increase or decrease
in the number of outstanding shares of Common Stock resulting from a stock split
or a payment of a stock dividend on the shares of Common Stock, a subdivision or
combination of the shares of Common Stock, a reclassification of the shares of
Common Stock, a merger or consolidation of the Company or any other like changes
in the Common Stock or in its value. No fractional shares will be issued as a
result of any of these changes, and any fractional shares that result from a
change will be eliminated from the total number of Shares available for sale
under the Plan. All adjustments made by the Committee under this
<PAGE> 8
paragraph shall be final, conclusive and binding on all Participants and,
further, shall not constitute an increase in the maximum number of Shares made
available for sale pursuant to Paragraph 7 of the Plan.
12. GENERAL RESTRICTION. Notwithstanding anything contained herein to the
contrary, no purported exercise of any option granted pursuant to the Plan shall
be effective without the written approval of the Company, which may be withheld
to the extent that the exercise, either individually or in the aggregate
together with the exercise of other previously exercised stock options and/or
offers and sales pursuant to any prior or contemplated offering of securities,
would, in the sole and absolute judgment of the Company, require the filing of a
registration statement with the United States Securities and Exchange Commission
or with the securities commission of any state. The Company shall avail itself
of any exemptions from registration contained in applicable federal and state
securities laws which are reasonably available to the Company on terms which, in
its sole and absolute discretion, it deems reasonable and not unduly burdensome
or costly. If an option cannot be exercised at the time it would otherwise
expire due to the restrictions contained in this Paragraph, the exercise period
for that option shall be extended for successive one-year periods until that
option can be exercised in accordance with this Paragraph. Each Participant
shall, prior to the exercise of an option, deliver to the Company any reasonable
request in order for the Company to be able to satisfy itself that the Common
Stock will be acquired in accordance with the terms of an applicable exemption
from the securities registration requirements or applicable federal state
securities laws.
13. AMENDMENT OR TERMINATION. The Plan may be terminated or amended by the
Committee from time to time to the extent that the Committee deems necessary or
appropriate, except the Committee shall not amend the Plan, absent the approval
of the stockholders of the Company (a) to materially increase (within the
meaning of Rule 16b-3 of the Exchange Act) the benefits accruing to Participants
under the Plan, (b) to materially increase (within the meaning of Rule 16b-3 of
the Exchange Act) the number of securities which may be issued under the Plan,
or (3) to materially modify (within the meaning of Rule 16b-3 of the Exchange
Act) the requirements as to eligibility for participation in the Plan.
14. NOTICES. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the written form specified by the Company at the
location, or by the person, designated by the Company.
15. NO CONTRACT. The Plan shall not be deemed to constitute a contract
between the Company or any Subsidiary and any Employee or to be a consideration
or an inducement for the employment of any Employee. Nothing contained in the
Plan shall be deemed to give any Employee the right to be retained in the
service of the Company or any Subsidiary or to interfere with the right of the
Company or any Subsidiary to discharge any Employee at any time, regardless of
the effect which such discharge shall have upon him as a Participant.
16. HEADINGS AND CONSTRUCTION. The headings to Paragraphs in the Plan have
been included for convenience of reference only. Where appropriate, the
masculine shall be deemed to include the feminine. The Plan shall be interpreted
and construed in accordance with the laws of the State of Delaware.
17. SECTION 16 COMPLIANCE. Any person who is an officer or director of the
Company for purposes of Section 16 of the Exchange Act is required to comply
with the requirements of Rule 16b-3 of the Exchange Act relating to participant
directed plans.
18. APPROVAL OF STOCKHOLDERS. The Plan shall be submitted to the
stockholders of the Company for their approval within twelve (12) months after
the adoption of the Plan by the Board of Directors. The Plan is conditioned upon
the approval of the stockholders of the Company, and failure to receive their
approval shall render the Plan and all outstanding options issued thereunder
void and of no effect.
<PAGE> 9
IN WITNESS WHEREOF, the Company has caused this Plan to be executed as of
this 27th day of June, 1996.
MEDAPHIS CORPORATION
By: /s/ Randolph G. Brown
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Title: Chairman, CEO
--------------------------------
and President
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ATTEST:
/s/ Michael R. Cote
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Title: Senior Vice President -- Finance,
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CFO and Assistant Secretary
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[CORPORATE SEAL]
