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As filed with the Securities and Exchange Commission on January 14, 1997.
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REGISTRATION STATEMENT NO. 33-75310
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
VITALINK PHARMACY SERVICES, INC.
--------------------------------
(Exact name of issuer as specified in its charter)
Delaware 37-0903482
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1250 East Diehl Road, Suite 208
Naperville, Illinois 60563
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(Address of Principal (Zip Code)
Executive Offices)
VITALINK PHARMACY SERVICES, INC.
1996 LONG-TERM INCENTIVE PLAN
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(Full title of the plan)
James H. Rempe, Esq.
Secretary
11555 Darnestown Road
Gaithersburg, MD 20878
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(Name and address of agent for service)
(301) 979-4265
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(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Maximum Maximum Amount
Each Class of Amount Offering Aggregate Of
Securities To Be Price Per Offering Registration
To Be Registered Registered Share* Price* Fee*
- ---------------- ---------- ------ ------ ----
Common Stock, 1,000,000 Shs. -0-*
par value of $.01
per share
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(*) The registration fee was previously paid on February 14, 1994.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Except as set forth below with respect to Items 4, 7, 8 and 9 of Form
S-8, the contents of Registrant's Annual Report and Form 10-K/A for fiscal year
ended May 31, 1996 containing audited financial statements for the fiscal year
ended May 31, 1996, Form 10-Q for the fiscal quarter ended August 31, 1996, the
registration statement on Form S-4 (Registration No. 333-19097) containing the
Registrant's latest prospectus filed pursuant to Rule 424(b) under the
Securities Act of 1933, and the description of the Registrant's common stock
appearing in the Registrant's registration statement on Form 8-A (Registration
No. 0-19820) filed pursuant to section 12(b) of the Exchange Act of 1934, on
March 3, 1992 are incorporated by reference into this registration statement.
All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), prior to the filing of a post-effective
amendment which indicates that all securities offered 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 hereof
from the date of filing 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 other subsequently filed
document which also is or 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.
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Item 6. Indemnification of Officers and Directors.
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Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in summary, that directors and officers of Delaware
corporations such as the Registrant are entitled, under certain circumstances,
to be indemnified against all expenses and liabilities (including attorneys'
fees) incurred by them as a result of suits brought against them in their
capacity as a director or officer, if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful; provided, that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which such action
or suit was
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brought shall determine upon application that despite the adjudication of
liability but in view of all the circumstances of the case, they are fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper. Any such indemnification may be made by the corporation only as
authorized in each specific case upon a determination by the stockholders or
disinterested directors that indemnification is proper because the indemnitee
has met the applicable standard of conduct. Article VII of the Registrant's
By-Laws entitles officers, directors and controlling persons of the Registrant
to indemnification to the full extent permitted by Section 145 of DGCL, as the
same may be supplemented or amended from time to time.
Article VII of the Bylaws of Vitalink Pharmacy Services, Inc. provides:
INDEMNIFICATION OF
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
Section 1. Action, Other Than by or in the Right of the Corporation.
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The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding or investigation, whether civil, criminal or administrative,
and whether external or internal to the Corporation (other than a judicial
action or suit brought by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or trustee of the
Corporation, or that, being or having been such a director, officer, employee or
trustee, he is or was serving at the request of the Corporation as a director,
officer, employee, trustee or agent of another corporation, partnership, joint
venture, trust or other enterprise (all such persons being referred to hereafter
as an "Agent"), against expenses (including attorneys' fees), judgements, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, or any appeal therein, 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. The termination of any action, suit or proceeding -- whether by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
---- ----------
its equivalent -- shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which 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, that he had reasonable cause to believe that his
conduct was unlawful.
Section 2. Action, by or in the Right of the Corporation. The
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Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed judicial action or suit
brought by or in the right of the Corporation to procure a judgement in its
favor by reason of the fact that he is or was an Agent (as defined above)
against expenses (including attorneys' fees) actually and
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reasonably incurred by him in connection with the defense, settlement or appeal
of such action or suit 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 for gross
negligence or misconduct in the performance of the duty of the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or other such court shall deem proper.
Section 3. Determination of Right of Indemnification. Any
------------------------------------------
indemnification under Section 1 or 2 (unless ordered by a court) shall be made
by the Corporation unless a determination is reasonably and promptly made (i) by
the Board by a majority vote or a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders, that such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnification Against Expenses of Successful Party.
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Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without admission of liability, in defense of any proceeding or in
defense of any claim, issue or matter therein, or on appeal from any such
proceeding, action, claim or matter, such Agent shall be indemnified against all
expenses incurred in connection therewith.
Section 5. Advances of Expenses. Except as limited by Section 6 of this
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Article, expenses incurred in any action, suit, proceeding or investigation or
any appeal therein shall be paid by the Corporation in advance of the final
disposition of such matter, if the Agent shall undertake to repay such amount in
the event that it is ultimately determined, as provided herein, that such person
is not entitled to indemnification. Notwithstanding the foregoing, no advance
shall be made by the Corporation if a determination is reasonably and promptly
made by the Board of Directors by a majority vote of a quorum of disinterested
directors, or (if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs) by independent legal counsel in a
written opinion, that, based upon the facts known to the Board or counsel at the
time such determination is made, such person acted in bad faith and in a manner
that such person did not believe to be in or not opposed to the best interests
of the Corporation, or, with respect to any criminal proceeding, that such
person believed or had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the Board or independent
legal counsel
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reasonably determines that such person deliberately breached his duty to the
Corporation or its shareholders.
Section 6. Right of Agent to Indemnification Upon Application;
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Procedure Upon Application. Any indemnification under Sections 1, 2, and 4, or
- ---------------------------
advance under Section 5 of this Article, shall be made promptly, and in any
event within ninety days, upon the written request of the Agent, unless with
respect to applications under Sections 1, 2, and 5, a determination is
reasonably and promptly made by the Board of Directors by a majority vote of a
quorum of disinterested directors that such Agent acted in a manner set forth in
such Sections as to justify the Corporation's not indemnifying or making an
advance to the Agent. In the event no quorum of disinterested directors is
obtainable, the Board of Directors shall promptly direct that independent legal
counsel shall decide whether the Agent acted in the manner set forth in such
Sections as to justify the Corporation's not indemnifying or making an advance
to the Agent. The right to indemnification or advances as granted by this
Article shall be enforceable by the Agent in any court of competent
jurisdiction, if the Board or independent legal counsel denies the claim, in
whole or in part, or if no disposition of such claim is made within ninety days.
The Agent's expenses incurred in connection with successfully establishing his
right to indemnification, in whole or in part, in any such proceeding shall also
be indemnified by the Corporation.
Section 7. Contribution. In order to provide for just and equitable
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contribution in circumstances in which the indemnification provided for in this
Article is held by a court of competent jurisdiction to be unavailable to an
indemnitee in whole or in part, the Corporation shall, in such an event, after
taking into account, among other things, contributions by other directors and
officers of the Corporation pursuant to indemnification agreements or otherwise,
and in the absence of personal enrichment, acts of intentional fraud or
dishonesty or criminal conduct on the part of the agent, contribute to the
payment of Agent's losses to the extent that, after other contributions are
taken into account, such losses exceed: (i) in the case of a director of the
Corporation or any of its subsidiaries who is not an officer of the Corporation
or any of such subsidiaries, the amount of fees paid to him for serving as a
director during the 12 months preceding the commencement of the suit, proceeding
or investigation; or (ii) in the case of a director of the Corporation or any of
its subsidiaries who is also an officer of the Corporation or any of such
subsidiaries, the amount set forth in clause (i) plus 5% of the aggregate cash
compensation paid to said director for service in such office(s) during the 12
months preceding the commencement of the suit, proceeding or investigation; or
(iii) in the case of an officer of the Corporation or any of the subsidiaries,
5% of the aggregate cash compensation paid to such officer for service in such
office(s) during the 12 months preceding the commencement of such suit,
proceeding or investigation.
Section 8. Other Rights and Remedies. The indemnification provided by
--------------------------
this Article shall not be deemed exclusive of, and shall not affect, any other
rights to which
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an Agent seeking indemnification may be entitled under any Bylaws, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be an Agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person. All rights to indemnification under this Article shall be deemed to be
provided by a contract between the Corporation and the Agent who serves in such
capacity at any time while these bylaws and other relevant provisions of the
general corporation law and other modification thereof shall not affect any
rights or obligations then existing.
Section 9. Insurance. Upon resolution passed by the Board, the
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Corporation may purchase and maintain insurance on behalf of any person who is
or was an Agent against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article. The Corporation may create a trust fund, grant a
security interest or use other means (including, without limitation, a letter of
credit) to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
Section 10. Constituent Corporations. For the purposes of this Article,
-------------------------
references to "the Corporation" include all constituent corporations absorbed in
a consolidation or merger as well as the resulting or surviving corporation, so
that any person who is or was a director, officer, employees, or trustee of such
a constituent corporation or who, being or having been such a director, officer
employee or trustee, is or was serving at the request of such constituent
corporation as a director, officer, employee, trustee of another corporation,
partnership, joint venture, trust or other enterprise shall stand in the same
position under the provisions of this Article with respect to the resulting or
surviving corporation as he would if he had served the resulting or surviving
corporation in the same capacity.
Section 11. Other Enterprises, Fines, and Serving at Corporation's
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Request. For purposes of this Article, references to "other enterprises" in
- --------
Sections 1 and 7 shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service by Agent as director, officer, employee, trustee or
agent of the Corporation which imposes duties on, or involves services by, such
Agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interests of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
Section 12. Savings Clause. If this Article or any portion hereof shall
---------------
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation
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shall nevertheless indemnify each Agent as to expenses (including attorneys'
fees), judgements, fines and amounts paid in settlement with respect to any
action, suit, appeal, proceeding or investigation, whether civil, criminal or
administrative, and whether internal or external, including a grand jury
proceeding and an action or suit brought by or in the right of the Corporation,
to the full extent permitted by any applicable portion of this Article that
shall not have been invalidated, or by any other applicable law.
The Registrant has entered into separate indemnification agreements
with directors and officers of the Registrant, pursuant to which the Registrant
will indemnify such directors and officers to the fullest extent permitted by
Delaware law, as the same may be amended from time to time.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
Item 7. Exemptions from Registration Claimed. None.
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Item 8. Exhibits.
- ------- ---------
4 Vitalink Pharmacy Services, Inc. 1996 Long-Term Incentive Plan
5 Opinion regarding legality of shares to be offered.
23(i) Consent of Arthur Andersen LLP.
23(ii) Consent of James H. Rempe, Esq. (included in Exhibit 5)
24 Powers of Attorney authorizing execution of registration
statement of Form S-8 on behalf of certain directors of
Registrant.
Item 9. Undertaking.
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(a) Rule 415 Offering.
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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
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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;
(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 registration statement is on Form S-3 or Form S-8, and 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 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) Filings incorporating subsequent Exchange Act documents by
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reference.
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The undersigned Registrant hereby undertakes 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 Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Request for acceleration of effectiveness or filing of
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registration statement on Form S-8.
-----------------------------------
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
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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.
SIGNATURES
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The Registrant. Pursuant to the requirements of the Securities Act of
---------------
1933, the Registrant certifies 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
Gaithersburg, State of Maryland, on this 14th day of January, 1997.
Vitalink Pharmacy Services, Inc.
By: /s/ James H. Rempe
----------------------------
James H. Rempe
Secretary
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
Signature Title Date
* Chairman and January 14, 1997
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Donald C. Tomasso Chief Executive Officer
* Vice Chairman and January 14, 1997
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Stewart Bainum, Jr. Director
* Director January 14, 1997
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Harold Blumenkrantz
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* President, Chief January 14, 1997
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Donna L. DeNardo Operating Officer
and Director
* Director January 14, 1997
- ----------------------------
Anil Gupta
* Treasurer and January 14, 1997
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James A. MacCutcheon Director
* Secretary and January 14, 1997
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James H. Rempe Director
* Director January 14, 1997
- ----------------------------
Joseph R. Buckley
* Director January 14, 1997
- ----------------------------
Marvin Wilensky
* Vice President, Finance January 14, 1997
- ----------------------------
Scott T. Macomber (Chief Financial Officer and
Chief Accounting Officer
* By: /s/ James H. Rempe
-------------------------
James H. Rempe
Secretary
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EXHIBIT 4
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VITALINK PHARMACY SERVICES, INC.
1996 LONG-TERM INCENTIVE PLAN
SECTION ONE
DESIGNATION AND PURPOSE OF PLAN
The purpose of the Vitalink Pharmacy Services, Inc. 1996 Long-Term
Incentive Plan (the "Plan") is to increase the ownership of Company Stock by
those officers, professional staff and other key employees who are mainly
responsible for the continued growth and development and financial success of
the Company and its subsidiaries. Such stock ownership gives such employees a
proprietary interest in the Company which induces them to continue in its
employ. The Plan also enables the Company to attract and retain such employees
and reward them for the continued profitable performance of Vitalink Pharmacy
Services, Inc.
SECTION TWO
DEFINITIONS
The following definitions are applicable herein:
A. "Award" - Individually or collectively, Options, Stock
Appreciation Rights, Performance Shares or Restricted Stock granted hereunder.
B. "Award Period" - the period of time during which a Stock
Appreciation Right which has not been granted pursuant to an Option may be
exercised. The Award Period shall be set forth in the document issuing the Stock
Appreciation Right to the selected Eligible Employee.
C. "Board" - the Board of Directors of the Company.
D. "Book Value" - the book value of a share of Stock determined in
accordance with the Company's regular accounting practices as of the last
business day of the month immediately preceding the month in which a Stock
Appreciation Right is exercised as provided in Section Nine D.
E. "Code" - the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any regulations promulgated
thereunder.
F. "Committee" - the Key Executive Stock Option Plan Committee
appointed
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to administer the Plan pursuant to Section Four.
G. "Company" - Vitalink Pharmacy Services, Inc., including any
present or future "subsidiary corporation" as such term is defined in Section
424(f) of the 1986 Internal Revenue Code, as amended.
H. "Covered Employee" - an individual described in Section 162(m)(3)
of the Code.
I. "Date of Grant" - the date on which the granting of an Award is
authorized by the Committee or such later date as may be specified by the
Committee in such authorization.
J. "Eligible Employee" - any person employed by the Company or a
Subsidiary on a regularly scheduled basis who satisfies all of the requirements
of Section Six.
K. "Exercise Period" - the period or periods during which a Stock
Appreciation Right is exercisable as described in Section Nine B.
L. "Fair Market Value" - the fair market value of the Stock as
determined in accordance with Section Eight D.
M. "Incentive Stock Option" - an incentive stock option within the
meaning of Section 422 of the Code.
N. "Option" or "Stock Option" - either a nonqualified stock option or
an Incentive Stock Option granted under Section Eight. It also means any Option
which remains after a Participant has exercised his Option with respect to part
of the shares covered by a Stock Option Agreement as described in Section
Eight B.
O. "Option Period" or "Option Periods" - the period or periods during
which an Option is exercisable as described in Section Eight E.
P. "Option Price" - the price, expressed on a per share basis, for
which the Company Stock can be acquired by the holder of an Option pursuant to
the exercise of such Option.
Q. "Participant" - an Eligible Employee of the Company or a
Subsidiary who has been granted an Option, a Stock Appreciation Right, a
Performance Share Award or a Restricted Stock Award under this Plan.
R. "Performance Share" - an Award granted under Section Ten.
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S. "Restricted Stock" - an Award granted under Section Seven.
T. "Stock" and "Company Stock" - the common stock of the Company.
U. "Stock Appreciation Right" - an Award granted under Section Nine.
V. "Subsidiary" - any corporation of which fifty percent (50%) or
more of its outstanding voting stock or voting power is beneficially owned,
directly or indirectly, by the Company.
W. "Ten Percent Shareholder" - a Participant who, at the Date of
Grant, owns directly or indirectly (within the meaning of Section 424(d) of the
Internal Revenue Code) stock possessing more then ten percent (10%) of the total
combined voting power of all classes of stock of the Company or a subsidiary
thereof.
X. Wherever appropriate, words used in this Plan in the singular may
mean the plural, the plural may mean the singular and the masculine may mean the
feminine.
SECTION THREE
EFFECTIVE DATE, DURATION AND STOCKHOLDER APPROVAL
A. Effective Date and Stockholder Approval. Subject to the approval
---------------------------------------
of the Plan by a majority of the outstanding shares of Stock voted at the 1996
Annual Meeting of Stockholders, the Plan shall be effective as of July 10, 1996.
B. Period for Grant of Awards. Awards may be made as provided herein
--------------------------
for a period of ten (10) years after July 10, 1996.
SECTION FOUR
ADMINISTRATION
A. Appointment of Committee. The Board of Directors shall appoint one
------------------------
or more Key Executive Stock Option Plan Committees which shall consist of not
less than two (2) members of such Board of Directors and which members shall be
Non-Employee Directors as defined in Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (or such greater number of members which may be required
by said Rule 16b-3). In addition, such Board of Directors shall designate a
member of the Committee to act as Chairman of the Committee, and such Board of
Directors may remove any member of the Committee at any time and appoint any
director to fill any vacancy on the Committee.
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B. Committee Meetings. The Committee shall hold its meetings at such
------------------
times and places as specified by the Committee Chairman. A majority of the
Committee shall constitute a quorum. All actions of the Committee shall be taken
by all of the members of the meeting duly called by its Chairman; provided,
however, any action taken by a written document signed by a majority of the
members of the Committee shall be as effective as action taken by the Committee
at a meeting duly called and held.
C. Committee Powers. Subject to the provisions of this Plan, the
----------------
Committee shall have full authority in its discretion to (i) designate the
Participants to whom Awards shall be granted, (ii) determine the number of
shares to be made available under each such Award, (iii) determine the period or
periods in which the Participant may exercise such Award (iv) determine the date
when such Award expires, (v) determine the price for Stock under such Award, and
(vi) determine the grounds of forfeiture of an Award. The Committee shall have
all powers necessary to administer the Plan in accordance with its terms,
including the power to interpret this Plan and resolve all questions arising
thereunder. The Committee may prescribe such rules and regulations for
administering this Plan as the Committee deems appropriate.
SECTION FIVE
GRANT OF AWARDS AND
LIMITATION OF NUMBER OF SHARES SUBJECT TO AWARD
The Committee may, from time to time, grant Awards to one or more
Eligible Employees, provided that (i) subject to any adjustment pursuant to
Section Eleven, the aggregate number of shares of Stock subject to Stock
Options, Stock Appreciation Rights, Performance Share Awards or Restricted Stock
Awards under this Plan may not exceed 493,900 shares; (ii) to the extent that a
Stock Option, Stock Appreciation Right, Performance Share Award or Restricted
Stock Award lapses or the rights of the Participant to whom it was granted
terminate, expire or are cancelled for any other reason, in whole or in part,
shares of Stock (or remaining shares) subject to such Award shall again be
available for the grant of an Award under the Plan; and (iii) Shares delivered
by the Company under the Plan may be authorized and unissued Stock, Stock held
in the treasury of the Company or Stock purchased on the open market (including
private purchases) in accordance with applicable securities laws. In determining
the size of Awards, the Committee shall take into account the responsibility
level, performance, potential, and cash compensation level of a Participant, and
the Fair Market Value of the Stock at the time of Awards, as well as such other
considerations it deems appropriate.
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SECTION SIX
ELIGIBILITY
Key employees of the Company and its Subsidiaries (including employees
who are members of the Board, but excluding directors who are not employees)
who, in the opinion of the Committee, are mainly responsible for the continued
growth and development and financial success of the business of the Company or
one or more of its Subsidiaries shall be eligible to be granted Awards under the
Plan. Subject to the provisions of the Plan, the Committee may from time to time
select from such eligible persons those to whom Awards shall be granted and
determine the nature and amount of each Award. No employee of the Company or its
Subsidiaries shall have any right to be granted an Award under this Plan. A
member of the Committee shall not be eligible for any Award hereunder.
SECTION SEVEN
RESTRICTED STOCK AWARDS
A. Grants of Shares of Restricted Stock. An Award made pursuant to
------------------------------------
this Section Seven shall be granted in the form of shares of Stock, restricted
as provided in this Section Seven. Shares of the Restricted Stock shall be
issued to the Participant without the payment of consideration by the
Participant. The shares of Restricted Stock shall be issued in the name of the
Participant and shall bear a restrictive legend prohibiting sale, transfer,
pledge or hypothecation of the shares of Restricted Stock until the expiration
of the restriction period.
The Committee may also impose such other restrictions and conditions on
the shares of Restricted Stock as it deems appropriate.
B. Restriction Period. At the time a Restricted Stock Award is made,
------------------
the Committee may establish a restriction period applicable to such Award which
shall not be more than ten (10) years. Each Restricted Stock Award may have a
different restriction period, at the discretion of the Committee. In addition to
or in lieu of a restriction period, the Committee may establish a performance
goal which must be achieved as a condition to the retention of the Restricted
Stock. The performance goal may be based on the attainment of specified types of
performance measurement criteria, which may differ as to various Participants or
classes or categories of Participants. Such criteria may include, without
limitation, the attainment of certain performance levels by the individual
Participant, the Company, a department or division of the Company and/or a group
or class of participants. Any such performance goals, together with the ranges
of Restricted Stock Awards for which the Participants may be eligible shall be
set from time to time by the Committee and shall be timely communicated to the
Eligible Employees in advance of the commencement of the performance of services
to which such performance goals relate. The total number of
5
<PAGE>
shares of Restricted Stock which may be granted to any single Covered Employee
under this Plan during any calendar year shall be limited to 100,000.
C. Forfeiture or Payout of Award. In the event a Participant ceases
-----------------------------
employment during a restriction period, or in the event performance goals
attributable to a Restricted Stock Award are not achieved, subject to the terms
of each particular Restricted Stock Award, and subject to discretionary action
by the Committee as set forth below in Section Thirteen, a Restricted Stock
Award is subject to forfeiture of the shares of stock which had not previously
been removed from restriction under the terms of the Award.
Any shares of Restricted Stock which are forfeited will be transferred
to the Company.
Upon completion of the restriction period and satisfaction of any
performance-goal criteria, all restrictions upon the Award will expire and new
certificates representing the Award will be issued without the restrictive
legend described in Section Seven A. As a condition precedent to receipt of the
new certificates, the Participant (or the designated beneficiary or personal
representative of the Participant) will agree to make payment to the Company in
the amount of any taxes, payable by the Participant, which are required to be
withheld with respect to such shares of Stock.
SECTION EIGHT
STOCK OPTIONS
A. Grant of Option. One or more Options may be granted to any
---------------
Eligible Employee. Upon the grant of an Option to an Employee, the Committee
shall specify whether the Option is intended to constitute a non-qualified stock
option or an Incentive Stock Option. The total number of shares of Stock subject
to Options which may be granted to any single Covered Employee under this Plan
during any calendar year shall be limited to 100,000.
B. Stock Option Agreement. Each Option granted under the Plan shall
----------------------
be evidenced by a written "Stock Option Agreement" between the Company and the
Participant containing such terms and conditions as the Committee determines,
including, without limitation, provisions to qualify Incentive Stock Options as
such under Section 422 of the Code. Such agreements shall incorporate the
provisions of this Plan by reference. The date of granting an Option is the date
specified in the written Stock Option Agreement which is signed by the
Participant and the Company.
C. Determination of Option Price. The Option price for Stock shall be
-----------------------------
not less than 100% of the fair market value of the Stock on the date of grant.
Notwithstanding the foregoing, in the case of an Option which is designed to
qualify as an Incentive Stock Option (as defined in Section 422 of the Code)
which is granted to a
6
<PAGE>
Ten Percent Shareholder, the Option Price shall not be less than 110% of such
fair market value.
D. Determination of Fair Market Value. The fair market value of the
----------------------------------
Stock on the date of granting an Option shall be the mean of the high and low
prices at which the Stock was sold on the market on such date. In the event no
such sales of Stock occurred on such date, the fair market value of the Stock
shall be determined by the Committee in accordance with applicable Regulations
of the Internal Revenue Service.
E. Term of Option. The term of an Option may vary within the
--------------
Committee's discretion; provided, however, that the term of an Option shall not
exceed ten (10) years from the date of granting the Option to the Participant,
and, to this end, all Options granted pursuant to this Plan must provide that
each such Option cannot be exercised after the expiration of ten (10) years from
the date each such Option is granted. Notwithstanding the foregoing, in the case
of any Option which is designed to qualify as an Incentive Stock Option (as
defined in Section 422 of the Code) which is granted to a Ten Percent
Shareholder, the term of such Option may not exceed five (5) years from the date
of grant of such Option.
F. Limitation on Exercise of Option. The Committee may limit an
--------------------------------
Option by restricting its exercise in whole or in part for specified periods.
G. Method of Exercising an Option. Subject to the terms of a
------------------------------
particular Option, a Participant may exercise it in whole or in part by written
notice to the Secretary of the Company stating in such written notice the number
of shares of Stock such Participant elects to purchase under his Option.
H. No Obligation to Exercise Option. A Participant is under no
--------------------------------
obligation to exercise an Option or any part thereof.
I. Payment for Option Stock. Stock purchased pursuant to an Option
------------------------
shall be paid in full at the time of purchase. Payment may be made (a) in cash,
(b) with the approval of the Committee, by delivery to the Company of shares of
Stock having an aggregate fair market value equal to the exercise price, or (c)
a combination of (a) and (b). Payment may also be made, in the discretion of the
Committee, by delivery (including by facsimile transmission) to the Company or
its designated agent of an executed irrevocable Option exercise form together
with irrevocable instructions to a broker-dealer to sell (or margin) a
sufficient portion of the shares and deliver the sale (or margin loan) proceeds
directly to the Company to pay for the exercise price. Upon receipt of payment
and subject to paragraph J of this Section Eight, the Company shall, without
transfer or issue tax to the Participant or other person entitled to exercise
the Option, deliver to the Participant (or other person entitled to exercise the
Option) a certificate or certificates for such shares.
7
<PAGE>
J. Delivery of Stock to Participant. The Company shall undertake and
--------------------------------
follow all necessary procedures to make prompt delivery of the number of shares
of Stock which the Participant elects to purchase upon exercise of an Option
granted under this Plan. Such delivery, however, may be postponed, at the sole
discretion of the Company, to enable the Company to comply with any applicable
procedures, regulations or listing requirements of any government agency, stock
exchange or regulatory authority.
K. Failure to Accept Delivery of Stock. If a Participant refuses to
-----------------------------------
pay for Stock which he has elected to purchase under his Option, in accordance
with the terms of payment, which had previously been agreed upon, his Option
shall thereupon, at the sole discretion of the Committee, terminate, and such
funds previously paid for unissued Stock shall be refunded. Stock which has been
previously issued to the Participant and been fully paid for shall remain the
property of the Participant and shall be unaffected by such termination.
L. Non-Transferability of Options. During the lifetime of a
------------------------------
Participant, an Incentive Stock Option granted to him may be exercised only by
him. It may not be sold, assigned, pledged or otherwise transferred except by
will or by the laws of descent and distribution. In the case of Options which
are not Incentive Stock Options, the Committee may impose such restrictions on
transferability, if any, as it may in its sole discretion determine.
M. Purchase for Investment
-----------------------
(a) Written Agreement by Participants. Unless a registration
---------------------------------
statement under the Securities Act of 1933 is then in effect with respect to the
Stock a Participant receives upon exercise of his Option, a Participant shall
acquire the Stock he receives upon exercise of his Option for investment and not
for resale or distribution and he shall furnish the Company with a written
statement to that effect when he exercises his Option and a reference to such
investment warranty shall be inscribed on the Stock certificate(s).
(b) Registration Requirement. Each Option shall be subject to
------------------------
the requirement that, if at any time the Board determines that the listing,
registration or qualification of the shares subject to the Option upon any
securities exchange or under any state or Federal law is necessary or desirable
as a condition of, or in connection with, the issuance of shares thereunder, the
Option may not be exercised in whole or in part unless such listing,
registration or qualification shall have been effected or obtained (and the same
shall have been free of any conditions not acceptable to the Board).
N. Special Limitations on Exercise of Incentive Stock Options. The
----------------------------------------------------------
aggregate fair market value (determined at the time the Incentive Stock Option
is
8
<PAGE>
granted) of the Stock with respect to which any Incentive Stock Option is first
exercisable during any calendar year shall not exceed $100,000.
SECTION NINE
STOCK APPRECIATION RIGHTS
A. Grant of Stock Appreciation Rights. Stock Appreciation Rights may
----------------------------------
be granted under the Plan in conjunction with an Option either at the time of
grant or by amendment or may be separately awarded. Stock Appreciation Rights
shall be subject to such terms and conditions not inconsistent with the Plan as
the Committee shall impose. However, the total number of Stock Appreciation
Rights which may be granted to a single Covered Employee under this Plan during
any calendar year shall be limited to 100,000.
B. Right to Exercise; Exercise Period. A Stock Appreciation Right
----------------------------------
issued pursuant to an Option shall be exercisable to the extent the Option is
exercisable. A Stock Appreciation Right issued independent of an Option shall be
exercisable pursuant to such terms and conditions established in the grant.
C. Automatic Redemption of Unexercised Stock Appreciation Rights. If
-------------------------------------------------------------
on the last day of the Option Period, in the case of a Stock Appreciation Right
granted pursuant to an Option, or the specified Award Period, in the case of a
Stock Appreciation Right issued independent of an Option, the Participant has
not exercised such Stock Appreciation Right, then such Stock Appreciation Right
shall be automatically redeemed by the Company for an amount equal to the
payment that would otherwise have been made to the Participant if the
Participant had chosen to exercise the Stock Appreciation Right on the last day
of the Option Period or the specified Award Period, as the case may be.
D. Rights Upon Exercise. An exercisable Stock Appreciation Right
--------------------
granted pursuant to an Option shall entitle the Participant to surrender
unexercised the Option or any portion thereof to which the Stock Appreciation
Right is attached, and to receive in exchange for the Stock Appreciation Right a
payment (in cash or Stock or a combination thereof as described below) equal to
the Fair Market Value of one share of Stock at the date of exercise minus the
Option Price times the number of shares called for by the Stock Appreciation
Right (or portion thereof) which is so exercised. With respect to the issuance
of Stock Appreciation Rights which are not granted pursuant to an Option, the
Committee shall specify upon the Date of the Grant of the Stock Appreciation
Right whether the Stock Appreciation Right is a "regular" Stock Appreciation
Right or a "book value" Stock Appreciation Right. Upon the exercise of a regular
Stock Appreciation Right, the Participant will receive a payment equal to the
Fair Market Value of one share of Stock at the date of exercise minus the Fair
Market Value of one share of Stock as of the Date of Grant of the Stock
Appreciation Right times the number of shares called for by the Stock
Appreciation Right (or portion
9
<PAGE>
thereof) which is so exercised. Upon the exercise of a book value Stock
Appreciation Right, the Participant will receive a payment equal to the Book
Value of one share of Stock at the date of exercise minus the Book Value of one
share of Stock as of the Date of the Grant of the Stock Appreciation Right times
the number of shares called for by the Stock Appreciation Right (or portion
thereof) which is so exercised.
The value of any Stock to be received upon exercise of a Stock
Appreciation Right shall be the Fair Market Value of the Stock on such date of
exercise. To the extent that a Stock Appreciation Right issued pursuant to an
Option is exercised, such Option shall be deemed to have been exercised, and
shall not be deemed to have lapsed.
E. Transferability. The Committee may impose such restrictions on
---------------
transferability of Stock Appreciation Rights, if any, as it may in its sole
discretion determine.
SECTION TEN
PERFORMANCE SHARES
A. Grant of Performance Share Units. Awards made pursuant to this
--------------------------------
Section Ten shall be granted in the form of Performance Shares, subject to such
terms and conditions not inconsistent with the Plan as the Committee shall
impose. Performance Shares shall be issued to the Participant without the
payment of consideration by the Participant. Awards shall be based on the
attainment of specified types and combination of performance measurement
criteria, which may differ as to various Participants or classes or categories
of Participants. Such criteria may include, without limitation, the attainment
of certain performance levels by the individual Participant, the Company, a
department or division of the Company and/or a group or class of Participants.
Such criteria, together with the ranges of Performance Shares from which
employees may be eligible shall be set from time to time by the Committee and
shall be communicated to the Eligible Employees. The total number of Performance
Shares which may be granted to any single Covered Employee under this Plan
during any calendar year shall be limited to 100,000.
B. Performance Period. The measuring period to establish the
------------------
performance criteria set forth in a Performance Share Award shall be determined
by the Committee. A Performance Share Award may initially provide, or the
Committee may at any time thereafter, but no more frequently than once in any
six (6) month period, amend it to provide, for waiver or reduction of the
measuring period and, if appropriate, for adjustment of the performance criteria
set forth in the Performance Share Award, upon the occurrence of events
determined by the Committee in its sole discretion to justify such waiver,
reduction or adjustment.
C. Form of Payment. Upon the completion of the applicable measuring
---------------
10
<PAGE>
period, a determination shall be made by the Committee in accordance with the
Award as to the number of shares of Stock to be awarded to the Participant. The
appropriate number of shares of Stock shall thereupon be issued to the
Participant in accordance with the Award in satisfaction of such Performance
Share Award.
11
<PAGE>
EXHIBIT 5
---------
January 14, 1997
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
RE: Vitalink Pharmacy Services, Inc.
Registration Statement on Form S-8
Gentlemen:
I am Secretary of Vitalink Pharmacy Services, Inc. (the "Company") and
have acted for the Company in connection with the preparation of the Company's
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended. The
Registration Statement covers shares of the Company's Common Stock, $.01 par
value, offered under the Company's 1996 Long-Term Incentive Plan (the "Plan").
In connection with the rendering of the opinion set forth below, I have
reviewed the records of the Company, the minutes of the meetings of the
stockholders and directors of the Company and such other records and documents
as was necessary in my judgment to so render the following opinion.
Based on the foregoing, I am of the opinion that:
1. The Company is a corporation duly incorporated and existing under
the laws of the State of Delaware; and
2. The shares of Common Stock of the Company offered to the holders
under the exercise of options under the Plan, have been or will be legally
issued, fully paid and nonassessable.
I hereby consent to the filing of a copy of this opinion with the
Commission as an exhibit to the Registration Statement referred to above.
Very truly yours,
/s/ James H. Rempe
James H. Rempe
General Counsel
<PAGE>
EXHIBIT 23(i)
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated June 25, 1996,
included and incorporated by reference in Vitalink Pharmacy Services, Inc.'s
Form 10-K/A for the year ended May 31, 1996 and to all references to our Firm
included in this registration statement.
/s/ Arthur Andersen LLP
-------------------------------
ARTHUR ANDERSEN LLP
Washington, D.C.
January 8, 1997
<PAGE>
EXHIBIT 24
----------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.01 par value, of Vitalink Pharmacy Services, Inc. (the "Company")
delivered pursuant to the Company's 1996 Long-Term Incentive Plan and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 14th
----
day of January, 1997.
/s/ Harold Blumenkrantz
------------------------------
Harold Blumenkrantz
Director
<PAGE>
EXHIBIT 24
----------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.01 par value, of Vitalink Pharmacy Services, Inc. (the "Company")
delivered pursuant to the Company's 1996 Long-Term Incentive Plan and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 14th
----
day of January, 1997.
/s/ James A. MacCutcheon
-----------------------------
James A. MacCutcheon
Treasurer and Director
<PAGE>
EXHIBIT 24
----------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.01 par value, of Vitalink Pharmacy Services, Inc. (the "Company")
delivered pursuant to the Company's 1996 Long-Term Incentive Plan and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 14th
----
day of January, 1997.
/s/ Joseph R. Buckley
---------------------------
Joseph R. Buckley
Director
