As filed with the Securities and Exchange Commission on October
19, 1999.
Registration No. 333-
____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
Apria Healthcare Group Inc.
(Exact name of registrant as specified in its charter)
___________________
Delaware 33-0488566
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3560 Hyland Avenue, Costa Mesa, California 92626
(714) 427-2000
(Address and telephone number of principal executive
offices)
___________________
Apria Healthcare Group Inc. 1998 Nonqualified Stock Incentive
Plan
(Full title of the plan)
___________________
John C. Maney
Executive Vice President and Chief Financial Officer
Apria Healthcare Group Inc.
3560 Hyland Avenue, Costa Mesa, California 92626
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent for service:
(714) 427-2000
___________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================
==========
<S> <C> <C> <C>
<C>
Proposed Proposed
Maximum maximum
Title of Amount offering aggregate
Amount of
Securities to be price offering
registration
to be registered registered per unit price
fee
- - ------------------------------------------------------------------
- - ----------
Common Stock, $2,100,000 $12.844<3> $26,972,400<3>
$7,499<3>
$0.001 par value <1> <2>
per share shares
==================================================================
==========
<FN>
<1> This Registration Statement covers, in addition to the
number of
shares of Common Stock stated above, options and other
rights to
purchase or acquire the shares of Common Stock covered by
the
Prospectus and, pursuant to Rule 416(c) under the Securities
Act of 1933, as amended (the "Securities Act"), an
additional
indeterminate number of shares, options and rights which by
reason of certain events specified in the Apria Healthcare
Group Inc. 1998 Nonqualified Stock Incentive Plan (the
"Plan")
may become subject to the Plan.
<2> Each share is accompanied by a common share purchase right
pursuant to the registrant's Rights Agreement, dated
February
8, 1995, with U.S. Stock Transfer Corporation, as Rights
Agent.
<3> Pursuant to Rule 457(h), the maximum offering price, per
share
and in the aggregate, and the registration fee were
calculated
based upon the average of the high and low prices of the
Common Stock on October 13, 1999, as reported on the New
York
Stock Exchange and published in The Western Edition of The
Wall Street Journal.
The Exhibit Index included for the Registration Statement is at
page 8.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part
I of Form S-8 (plan information and registrant information) will
be sent or given to employees as specified by Rule 428(b)(1) of
the Securities Act. Such documents need not be filed with the
Securities and Exchange Commission (the "Commission") either as
part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 of the Securities
Act. These documents, which include the statement of
availability required by Item 2 of Form S-8, and the documents
incorporated by reference in this Registration Statement
pursuant to Item 3 of Form S-8 (Part II hereof), 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 of Apria Healthcare Group Inc. (the
"Company") filed with the Commission are incorporated herein by
reference:
(a) Annual Report on Form 10-K for the Company's fiscal
year ended December 31, 1998;
(b) Quarterly Reports on Form 10-Q for the Company's
fiscal quarters ended March 31, 1999 and June 30,
1999; and
(c) The description of the Company's Common Stock
contained in its Registration Statement on Form 8-A
filed on February 11, 1992, and any amendment or
report filed for the purpose of updating such
description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), prior to
the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference into this Registration Statement
and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document, all
or a portion of which is 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 amended, to constitute a
part of this Registration Statement.
Item 4. Description of Securities
The Company's Common Stock, par value $0.001 per share (the
"Common Stock"), is registered pursuant to Section 12 of the
Exchange Act, and, therefore, the description of securities is
omitted.
Item 5. Interests of Named Experts and Counsel
The validity of the original issuance of the Common Stock
registered hereby is passed on for the Company by Robert S.
Holcombe, the Senior Vice President, General Counsel and
Secretary of the Company. Mr. Holcombe is compensated by the
Company as an employee, is the owner of shares of Common Stock,
is the holder of options to acquire shares of Common Stock, and
is eligible to participate in the Plan.
Item 6. Indemnification of Directors and Officers
The Company's Restated Certificate of Incorporation and
Bylaws provide for indemnification of the officers and directors
of the Company to the fullest extent permitted by law. Section
102(b)(7) of the Delaware General Corporation Law (the "DGCL")
provides that a Delaware corporation has the power to eliminate
or limit the personal liability of a director for violations of
the director's fiduciary duty, except (i) for any breach of the
director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the DGCL (providing for
liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions), or (iv) for any
transaction from which a director derived an improper personal
benefit. In addition, the Company has entered into separate
indemnification agreements with each of its directors and
officers and maintains insurance on behalf of any person who is
or was a director or officer of the Company for up to $30
million of covered losses.
Section 145 of the DGCL provides that a corporation may
indemnify any persons, including officers and directors, who
are, or are threatened to be made, parties to any threatened,
pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an
action by or in the right of such corporation), by reason of the
fact that such person was a director, officer, employee or agent
of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such
officer, director, employee or agent acted in good faith and in
a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, for criminal proceedings, had
no reasonable cause to believe that his conduct was unlawful. A
Delaware corporation may indemnify officers and directors in an
action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer is successful on
the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against the expenses
which such officer or director actually and reasonably incurred.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See the attached Exhibit Index at page 8.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any
facts or events arising after the effective date
of the Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the Registration Statement; and
(iii) To include any material
information with respect to the plan of
distribution not previously disclosed in the
Registration Statement or any material change to
such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration
Statement;
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(h) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors,
executive officers and controlling persons of the registrant
pursuant to the provisions described in Item 6 above, or
otherwise, the registrant has been advised that in the opinion
of the Commission such indemnification is against public policy
as expressed in the Securities 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 Securities Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
City of Costa Mesa, State of California, on the 21st day of
July, 1999.
By: /s/ Philip L. Carter
------------------------
Philip L. Carter
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Philip L. Carter and John C. Maney, or either of them
individually, his or her true and lawful attorney-in-fact and
agent, with full powers of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and
all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or either of them individually, or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/ Philip L. Carter Chief Executive July
21, 1999
- - ---------------------- Officer and Director
Philip L. Carter (Principal Executive Officer)
/s/ John C. Maney Executive Vice President July
21, 1999
- - ---------------------- and Chief Financial Officer
John C. Maney (Principal Financial Officer)
/s/ James E. Baker Vice President, July
21, 1999
- - --------------------- Controller (Principal
James E. Baker Accounting Officer)
/s/ Ralph V. Whitworth Director July
21, 1999
- - ----------------------
Ralph V. Whitworth
/s/ David L. Goldsmith Director July
21, 1999
- - ----------------------
David L. Goldsmith
- - ---------------------- Director
Richard H. Koppes
/s/ Philip R. Lochner, Jr. Director July
21, 1999
- - -------------------------
Philip R. Lochner, Jr.
/s/ Beverly Benedict Thomas Director July
21, 1999
- - ---------------------------
Beverly Benedict Thomas
/s/ David H. Batchelder Director July
21, 1999
- - -----------------------
David H. Batchelder
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- - ------ ----------------------
4. Apria Healthcare Group Inc. 1998 Nonqualified Stock
Incentive Plan.
5. Opinion of Counsel (opinion re legality).
23.1. Consent of Deloitte & Touche LLP (Consent of
Independent Auditor).
23.2 Consent of Ernst & Young LLP (Consent of
Independent Auditors).
23.3 Consent of Counsel (included in Exhibit 5).
24. Power of Attorney (included in this Registration
Statement under "Signatures").
<PAGE>
<PAGE>
EXHIBIT 4
APRIA HEALTHCARE GROUP INC.
1998 NONQUALIFIED STOCK INCENTIVE PLAN
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. THE PLAN
Section 1.1. Purpose ..........................................1
Section 1.2. Administration and Authorization; Power and
Procedure.........................................1
Section 1.3. Participation ....................................2
Section 1.4. Shares Available for Awards; Share Limits ........2
Section 1.5. Grant of Awards ..................................3
Section 1.6. Award Period .....................................3
Section 1.7. Limitations on Exercise and Vesting of Awards ....4
Section 1.8. No Transferability; Limited Exception to
Transfer Restrictions ............................4
Section 1.9. Acceptance of Notes to Finance Exercise ..........5
Section 1.10. Limitations On Grants Of Awards To Non-Employee
Directors ........................................5
ARTICLE II. OPTIONS
Section 2.1. Grants ...........................................6
Section 2.2. Option Price .....................................6
Section 2.3. Intentionally Deleted ............................6
Section 2.4. Intentionally Deleted ............................6
Section 2.5. Cancellation and Regrant/Waiver of Restrictions ..6
Section 2.6. Options and Rights in Substitution for Stock
Options Granted by Other Corporations ............7
ARTICLE III. STOCK APPRECIATION RIGHTS.
Section 3.1. Grants ...........................................7
Section 3.2. Exercise of Stock Appreciation Rights ............7
Section 3.3. Payment ..........................................7
ARTICLE IV. RESTRICTED STOCK AWARDS.
Section 4.1. Grants ...........................................8
Section 4.2. Restrictions .....................................8
Section 4.3. Return to the Corporation ........................9
ARTICLE V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES
Section 5.1. Grants of Performance Share Awards ...............9
Section 5.2. Intentionally Deleted ............................9
Section 5.3. Grants of Stock Bonuses ..........................9
Section 5.4. Deferred Payments ................................9
ARTICLE VI. OTHER PROVISIONS.
Section 6.1. Rights of Eligible Persons, Participants and
Beneficiaries....................................10
Section 6.2. Adjustments; Acceleration .......................10
Section 6.3. Effect of Termination of Employment .............11
Section 6.4. Compliance with Laws ............................12
Section 6.5. Tax Withholding .................................12
Section 6.6. Plan Amendment, Termination and Suspension ......12
Section 6.7. Privileges of Stock Ownership ...................13
Section 6.8. Effective Date of the Plan ......................13
Section 6.9. Term of the Plan ................................13
Section 6.10. Governing Law/Construction/Severability .........13
Section 6.11. Captions ........................................14
Section 6.12. Effect of Change of Subsidiary Status ...........14
Section 6.13. Non-Exclusivity of Plan .........................14
ARTICLE VII. DEFINITIONS
Section 7.1. Definitions .....................................14
Section 7.2. Changes in Applicable Law .......................18
<PAGE>
APRIA HEALTHCARE GROUP INC.
1998 NONQUALIFIED STOCK INCENTIVE PLAN
ARTICLE I. THE PLAN.
Section 1.1. Purpose.
The purpose of this Plan is to promote the success of
the Company by providing an additional means through the grant of
Awards to attract, motivate, retain and reward key employees,
including officers, whether or not directors, of the Company with
awards and incentives for high levels of individual performance
and improved financial performance of the Company and to attract,
motivate and retain experienced and knowledgeable independent
directors. "Corporation" means Apria Healthcare Group Inc., a
Delaware corporation, and "Company" means the Corporation and its
Subsidiaries, collectively. These terms and other capitalized
terms are defined in Article VII.
Section 1.2. Administration and Authorization; Power and
Procedure.
(a) Committee. This Plan shall be administered by and
all
Awards to Eligible Persons shall be authorized by the Committee.
Subject to the bylaws of this Corporation, action of the
Committee with respect to the administration of this Plan shall
be taken pursuant to a majority vote or by unanimous written
consent of its members.
(b) Plan Awards; Interpretation; Powers of Committee.
Subject to the express provisions of this Plan, the Committee
shall have the authority:
(i) to determine from among those persons eligible
the
particular Eligible Persons who will receive any Awards;
(ii) to grant Awards to Eligible Persons, determine
the
price at which securities will be offered or awarded and the
amount
of securities to be offered or awarded to any of such
persons,
determine the other specific terms and conditions of such
Awards
consistent with the express limits of this Plan, establish
the
installments (if any) in which such Awards shall become
exercisable or shall vest, or determine that no delayed
exercisability or vesting is required, and establish the
events
of termination or reversion of such Awards;
(iii) to approve the forms of Award Agreements
(which
need not be identical either as to type of award or among
Participants);
(iv) to construe and interpret this Plan and any
agreements defining the rights and obligations of the Company
and Participants, further define the terms used in this Plan,
and prescribe, amend and rescind rules and regulations
relating
to the administration of this Plan;
(v) to cancel, modify, or waive the
Corporation's
rights with respect to, or modify, discontinue, suspend, or
terminate any or all outstanding Awards held by Eligible
Persons,
subject to any required consent under Section 6.6;
(vi) to accelerate or extend the exercisability
or
extend the term of any or all such outstanding Awards within
the
maximum ten-year term of Awards under Section 1.6; and
(vii) to make all other determinations and take
such
other action as contemplated by this Plan or as may be
necessary
or advisable for the administration of this Plan and the
effectuation of its purposes.
(c) Binding Determinations. Any action taken by, or
inaction of, the Corporation, any Subsidiary, the Board or the
Committee relating or pursuant to this Plan shall be within the
absolute
discretion of that entity or body and shall be conclusive and
binding upon all persons. No member of the Board or Committee,
or officer of the Corporation or any Subsidiary, shall be liable
for any such action or inaction of the entity or body, of another
person or, except in circumstances involving bad faith, of
himself or herself. Subject only to compliance with the express
provisions hereof, the Board and Committee may act in their
absolute discretion in matters within their authority related to
this Plan.
(d) Reliance on Experts. In making any determination
or
in taking or not taking any action under this Plan, the Committee
or the Board, as the case may be, may obtain and may rely upon the
advice of experts, including professional advisors to the
Corporation. No director, officer or agent of the Company shall
be liable for any such action or determination taken or made or
omitted in good faith.
(e) Delegation. The Committee may delegate
ministerial, non-discretionary functions to a third-party
administrator or to individuals who are officers or employees of
the Company.
Section 1.3. Participation.
Awards may be granted by the Committee only to those
persons that the Committee determines to be Eligible Persons. An
Eligible Person who has been granted an Award may, if otherwise
eligible, be granted additional Awards if the Committee shall so
determine.
Section 1.4. Shares Available for Awards; Share Limits.
(a) Shares Available. Subject to the provisions of
Section 6.2, the capital stock that may be delivered under this
Plan shall be shares of the Corporation's authorized but unissued
Common Stock and any shares of its Common Stock held as treasury
shares.
The shares may be delivered for any lawful consideration.
(b) Share Limits. The aggregate maximum number of
shares of Common Stock that may be delivered pursuant to Awards
granted
under this Plan and which are required to be charged or reserved
by provisions of Section 1.4(c) (the "Maximum Aggregate Limit")
shall be 1,000,000 shares, plus in each calendar year, commencing
in 2000, occurring during the term of this Plan, 1% of the issued
and outstanding shares of the Corporation's Common Stock as of
December 31 of the preceding calendar year. The maximum number
of shares subject to Options and Stock Appreciation Rights that
are granted during any calendar year to any individual shall be
limited to 100,000 shares. Each of the foregoing numerical
limits shall be subject to adjustment as contemplated by this
Section 1.4 and Section 6.2.
(c) Share Reservation; Replenishment and Reissue of
Unvested Awards. No Award may be granted under this Plan unless,
on the
date of grant, the sum of (i) the maximum number of shares
issuable at any time pursuant to such Award, plus (ii) the number
of shares that have previously been issued pursuant to Awards
granted under this Plan, other than reacquired shares available
for reissue consistent with any applicable legal limitations,
plus (iii) the maximum number of shares that may be issued at any
time after such date of grant pursuant to Awards that are
outstanding on such date, does not exceed the Maximum Aggregate
Limit. Shares that are subject to or underlie Awards which
expire or for any reason are cancelled or terminated, are
forfeited, fail to vest, or for any other reason are not paid or
delivered under this Plan, as well as reacquired shares, shall
again, except to the extent prohibited by law, be available for
subsequent Awards under the Plan. Except as limited by law, if
an Award is or may be settled only in cash, such Award need not
be counted against any of the limits under this Section 1.4.
Section 1.5. Grant of Awards.
(a) General. Subject to the express provisions of this
Plan, the Committee shall determine the number of shares of Common
Stock subject to each Award, the price (if any) to be paid for
the shares or the Award and, in the case of Performance Share
Awards, in addition to matters addressed in Section 1.2(b), the
specific objectives, goals and performance criteria (such as an
increase in sales, market value, earnings or book value over a
base period, the years of service before vesting, the relevant
job classification or level of responsibility or other factors)
that further define the terms of the Performance Share Award.
Each Award shall be evidenced by an Award Agreement signed on
behalf of the Corporation and, if required by the Committee, by
the Participant. The Award Agreement shall set forth the
material terms and conditions of the Award established by the
Committee consistent with the specific provisions of this Plan.
The Award Agreement may be executed on behalf of the Corporation
by a duly authorized officer by manual or facsimile signature.
(b) Limitation on Grant Authority. The Committee shall
structure all Awards and the selection of Participants so as to
qualify this Plan as a "broadly-based plan" within the meaning of
Section 312.03(a)(2) of the New York Stock Exchange Listed
Company Manual.
Section 1.6. Award Period.
Each Award and all executory rights or obligations
under the related Award Agreement shall expire on such date (if
any) as shall be determined by the Committee, but in the case of
Options or other rights to acquire Common Stock not later than
ten (10) years after the Award Date.
Section 1.7. Limitations on Exercise and Vesting of Awards.
(a) Provisions for Exercise. Unless the Committee
otherwise expressly provides, no Award shall be exercisable or
shall vest
until at least six months after the initial Award Date, and once
exercisable an Award shall remain exercisable until the
expiration or earlier termination of the Award.
(b) Procedure. Any exercisable Award shall be deemed
to be exercised when the Secretary of the Corporation or his
designee
receives written notice of such exercise from the Participant,
together with any required payment made in accordance with
Section 2.2(a).
(c) Fractional Shares/Minimum Issue. Fractional share
interests shall be disregarded, but may be accumulated. The
Committee, however, may determine in the case of Eligible Persons
that
cash, other securities, or other property will be paid or
transferred
in lieu of any fractional share interests. No fewer than 100
shares may be purchased on exercise of any Award at one time
unless the number purchased is the total number at the time
available for purchase under the Award.
Section 1.8. No Transferability; Limited Exception to
Transfer
Restrictions.
(a) Limit on Exercise and Transfer. Unless otherwise
expressly provided in (or pursuant to) this Section 1.8, by
applicable law and by the Award Agreement, as the same may be
amended,
(i) all Awards are non-transferable and shall not be subject in
any
manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge; (ii) Awards shall be exercised
only by the Participant; and (iii) amounts payable or shares
issuable pursuant to an Award shall be delivered only to (or for
the account of) the Participant.
(b) Exceptions. The Committee may permit Awards to be
exercised by and paid to certain persons or entities related to
the Participant pursuant to such conditions and procedures as the
Committee may establish. Any permitted transfer shall be subject
to the condition that the Committee receive evidence satisfactory
to it that the transfer is being made for estate and/or tax
planning purposes or a gratuitous or donative basis and without
consideration (other than nominal consideration).
(c) Further Exceptions to Limits On Transfer. The
exercise and transfer restrictions in Section 1.8(a) shall not
apply to:
(i) transfers to the Corporation,
(ii) the designation of a beneficiary to receive
benefits
in the event of the Participant's death or, if the
Participant has
died, transfers to or exercise by the Participant's
beneficiary, or,
in the absence of a validly designated beneficiary,
transfers by
will or the laws of descent and distribution,
(iii) transfers pursuant to a QDRO order,
(iv) if the Participant has suffered a disability,
permitted transfers or exercises on behalf of the
Participant by his
or her legal representative, or
(v) the authorization by the Committee of
"cashless
exercise" procedures with third parties who provide
financing for
the purpose of (or who otherwise facilitate) the exercise of
Awards
consistent with applicable laws and the express
authorization of
the Committee.
Notwithstanding the foregoing, Restricted Stock Awards shall be
subject to all applicable transfer restrictions under the Code.
Section 1.9. Acceptance of Notes to Finance Exercise.
The Corporation may, with the Committee's approval,
accept one or more notes from any Eligible Person in connection
with the exercise or receipt of any outstanding Award; provided
that any such note shall be subject to the following terms and
conditions:
(a) The principal of the note shall not exceed the
amount
required to be paid to the Corporation upon the exercise or
receipt of one or more Awards under the Plan and the note shall
be delivered directly to the Corporation in consideration of such
exercise or receipt.
(b) The initial term of the note shall be determined by
the Committee; provided that the term of the note, including
extensions, shall not exceed a period of five years.
(c) The note shall provide for full recourse to the
Participant and shall bear interest at a rate determined by the
Committee but not less than the interest rate necessary to avoid
the
imputation of interest under the Code.
(d) If the employment of the Participant terminates,
the
unpaid principal balance of the note shall become due and payable
on
the 10th business day after such termination; provided, however,
that if a sale of such shares would cause such Participant to
incur
liability under Section 16(b) of the Exchange Act, the unpaid
balance shall become due and payable on the 10th business day
after the first day on which a sale of such shares could have
been made without incurring such liability assuming for these
purposes that there are no other transactions (or deemed
transactions in securities of this Corporation) by the
Participant subsequent to such termination.
(e) If required by the Committee or by applicable law,
the
note shall be secured by a pledge of any shares or rights financed
thereby in compliance with applicable law.
(f) The terms, repayment provisions, and collateral
release
provisions of the note and the pledge securing the note shall
conform with applicable rules and regulations of the Federal
Reserve Board as then in effect.
Section 1.10. LIMITATIONS ON GRANTS OF AWARDS TO NON-
EMPLOYEE
DIRECTORS.
Notwithstanding anything else contained herein to the
contrary, the maximum number of shares subject to Nonqualified
Stock Options granted to a Non-Employee Director in any calendar
year shall not exceed 30,000 shares.
ARTICLE II. OPTIONS.
Section 2.1. Grants.
One or more Options may be granted under this Article
to any Eligible Person. Each Option granted shall be designated
in the applicable Award Agreement by the Committee as a Non-
Qualified Stock Option. No Option granted under this Plan shall
be an Incentive Stock Option.
Section 2.2. Option Price.
(a) Pricing Limits. The purchase price per share of
the
Common Stock covered by each Option shall be determined by the
Committee at the time of the Award.
(b) Payment Provisions. The purchase price of any
shares
purchased on exercise of an Option granted under this Article
shall be paid in full at the time of each purchase in one or a
combination of the following methods: (i) in cash or by
electronic funds transfer; (ii) by check payable to the order of
the Corporation; (iii) if authorized by the Committee or
specified in the applicable Award Agreement, by a promissory note
of the Participant consistent with the requirements of Section
1.9; (iv) by notice and third party payment in such manner as may
be authorized by the Committee; or (iv) by the delivery of shares
of Common Stock of the Corporation already owned by the
Participant, provided, however, that the Committee may in its
absolute discretion limit the Participant's ability to exercise
an Award by delivering such shares, and provided further that any
shares delivered which were initially acquired upon exercise of
an Option must have been owned by the Participant for at least
six months as of the date of delivery. Shares of Common Stock
used to satisfy the exercise price of an Option shall be valued
at their Fair Market Value on the date of exercise.
Section 2.3. Intentionally Deleted.
Section 2.4. Intentionally Deleted.
Section 2.5. Cancellation and Regrant/Waiver of
Restrictions.
Subject to Section 1.4 and the specific limitations on
Awards contained in this Plan, the Committee from time to time
may authorize, generally or in specific cases only, for the
benefit of any Eligible Person any adjustment in the exercise or
purchase price, the vesting schedule, the number of shares
subject to, the restrictions upon or the term of, an Award
granted under this Article by cancellation of an outstanding
Award and a subsequent regranting of an Award, by amendment, by
substitution of an outstanding Award, by waiver or by other
legally valid means. Such amendment or other action may result
among other changes in an exercise or purchase price which is
higher or lower than the exercise or purchase price of the
original Award or prior Award, provide for a greater or lesser
number of shares subject to the Award, or provide for a longer or
shorter vesting or exercise period.
Section 2.6. Options and Rights in Substitution for Stock
Options Granted by Other Corporations.
Options and Stock Appreciation Rights may be granted to
Eligible Persons under this Plan in substitution for employee
stock options granted by other entities to persons who are or who
will become Eligible Persons in respect of the Company, in
connection with a distribution, merger or reorganization by or
with the granting entity or an affiliated entity, or the
acquisition by the Company, directly or indirectly, of all or a
substantial part of the stock or assets of the other entity.
ARTICLE III. STOCK APPRECIATION RIGHTS.
Section 3.1. Grants.
In its discretion, the Committee may grant a Stock
Appreciation Right to any Eligible Person either concurrently
with the grant of another Award or in respect of an outstanding
Award, in whole or in part, or independently of any other Award.
Section 3.2. Exercise of Stock Appreciation Rights.
(a) Exercisability. Unless the Award Agreement or the
Committee otherwise provides, a Stock Appreciation Right related
to
another Award shall be exercisable at such time or times, and to
the
extent, that the related Award shall be exercisable.
(b) Effect on Available Shares. To the extent that a
Stock Appreciation Right is exercised, the number of underlying
shares of Common Stock theretofore subject to a related Award
shall
be charged against the maximum amount of Common Stock that may be
delivered pursuant to Awards under this Plan. The number of
shares subject to the Stock Appreciation Right and the related
Option of the Participant shall be reduced by the number of
underlying shares as to which the exercise related, unless the
Award Agreement otherwise provides.
(c) Stand-Alone SARs. A Stock Appreciation Right
granted
independently of any other Award shall be exercisable pursuant to
the terms of the Award Agreement but in no event earlier than six
months after the Award Date, except in the case of death or Total
Disability.
Section 3.3. Payment.
(a) Amount. Unless the Committee otherwise provides,
upon exercise of a Stock Appreciation Right and the attendant
surrender of an exercisable portion of any related Award, the
Participant shall be entitled to receive payment of an amount
determined by multiplying
(i) the difference obtained by subtracting the
exercise price
per share of Common Stock under the related Award (if
applicable)
or the initial share value specified in the Award from the
Fair
Market Value of a share of Common Stock on the date of
exercise
of the Stock Appreciation Right, by
(ii) the number of shares with respect to which the
Stock
Appreciation Right shall have been exercised.
(b) Form of Payment. The Committee, in its sole
discretion,
shall determine the form in which payment shall be made of the
amount determined under Section 3.3(a) above, either solely in
cash, solely in shares of Common Stock (valued at Fair Market
Value on the date of exercise of the Stock Appreciation Right),
or partly in such shares and partly in cash, provided that the
Committee shall have determined that such exercise and payment
are consistent with applicable law. If the Committee permits the
Participant to elect to receive cash or shares (or a combination
thereof) on such exercise, any such election shall be subject to
such conditions as the Committee may impose.
ARTICLE IV. RESTRICTED STOCK AWARDS.
Section 4.1. Grants.
The Committee may, in its discretion, grant one or more
Restricted Stock Awards to any Eligible Person. Each Restricted
Stock Award Agreement shall specify the number of shares of
Common Stock to be issued to the Participant, the date of such
issuance, the consideration for such shares (but not less than
the minimum lawful consideration under applicable state law) by
the Participant, the extent to which the Participant shall be
entitled to dividends, voting and other rights in respect of the
shares prior to vesting and the restrictions imposed on such
shares and the conditions of release or lapse of such
restrictions. Such restrictions shall not lapse earlier than six
months after the Award Date, except to the extent the Committee
may otherwise provide. Stock certificates evidencing shares of
Restricted Stock pending the lapse of the restrictions
("restricted shares") shall bear a legend making appropriate
reference to the restrictions imposed hereunder and shall be held
by the Corporation or by a third party designated by the
Committee until the restrictions on such shares shall have lapsed
and the shares shall have vested in accordance with the
provisions of the Award and Section 1.7. Upon issuance of the
Restricted Stock Award, the Participant may be required to
provide such further assurance and documents as the Committee may
require to enforce the restrictions.
Section 4.2. Restrictions.
(a) Pre-Vesting Restraints. Except as provided in
Section
4.1 and 1.8, restricted shares comprising any Restricted Stock
Award
may not be sold, assigned, transferred, pledged or otherwise
disposed of or encumbered, either voluntarily or involuntarily,
until the restrictions on such shares have lapsed and the shares
have become vested.
(b) Dividend and Voting Rights. Unless otherwise
provided in
the applicable Award Agreement, a Participant receiving a
Restricted Stock Award shall be entitled to cash dividend and
voting rights for all shares issued even though they are not
vested, provided that such rights shall terminate immediately as
to any restricted shares which cease to be eligible for vesting.
(c) Cash Payments. If the Participant shall have paid
or received cash (including any dividends) in connection with the
Restricted Stock Award, the Award Agreement shall specify whether
and to what extent such cash shall be returned (with or without
an earnings factor) as to any restricted shares which cease to be
eligible for vesting.
Section 4.3. Return to the Corporation.
Unless the Committee otherwise expressly provides,
restricted shares that remain subject to restrictions at the time
of termination of employment or are subject to other conditions
to vesting that have not been satisfied by the time specified in
the applicable Award Agreement shall not vest and shall be
returned to the Corporation in such manner and on such terms as
the Committee shall therein provide.
ARTICLE V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.
Section 5.1. Grants of Performance Share Awards.
The Committee may, in its discretion, grant Performance
Share Awards to Eligible Persons based upon such factors as the
Committee shall deem relevant in light of the specific type and
terms of the award. An Award Agreement shall specify the maximum
number of shares of Common Stock (if any) subject to the
Performance Share Award, the consideration (but not less than the
minimum lawful consideration) to be paid for any such shares as
may be issuable to the Participant, the duration of the Award and
the conditions upon which delivery of any shares or cash to the
Participant shall be based. The amount of cash or shares or
other property that may be deliverable pursuant to such Award
shall be based upon the degree of attainment over a specified
period (a "performance cycle") as may be established by the
Committee of such measure(s) of the performance of the Company
(or any part thereof) or the Participant as may be established by
the Committee. The Committee may provide for full or partial
credit, prior to completion of such performance cycle or the
attainment of the performance achievement specified in the Award,
in the event of the Participant's death, or Total Disability, a
Change in Control Event or in such other circumstances as the
Committee consistent with Section 6.10(c)(2), if applicable, may
determine.
Section 5.2. Intentionally Deleted.
Section 5.3. Grants of Stock Bonuses.
The Committee may grant a Stock Bonus to any Eligible
Person to reward exceptional or special services, contributions
or achievements in the manner and on such terms and conditions
(including any restrictions on such shares) as determined from
time to time by the Committee. The number of shares so awarded
shall be determined by the Committee. The Award may be granted
independently or in lieu of a cash bonus.
Section 5.4. Deferred Payments.
The Committee may authorize for the benefit of any
Eligible Person the deferral of any payment of cash or shares
that may become due or of cash otherwise payable under this Plan,
and provide for accredited benefits thereon based upon such
deferment, at the election or at the request of such Participant,
subject to the other terms of this Plan. Such deferral shall be
subject to such further conditions, restrictions or requirements
as the Committee may impose, subject to any then vested rights of
Participants.
ARTICLE VI. OTHER PROVISIONS.
Section 6.1. Rights of Eligible Persons, Participants and
Beneficiaries.
(a) Employment Status. Status as an Eligible Person
shall not be construed as a commitment that any Award will be made
under this Plan to an Eligible Person or to Eligible Persons
generally.
(b) No Employment Contract. Nothing contained in this
Plan (or in any other documents related to this Plan or to any
Award) shall confer upon any Eligible Person or other Participant
any
right to continue in the employ or other service of the Company
or constitute any contract or agreement of employment or other
service, nor shall interfere in any way with the right of the
Company to change such person's compensation or other benefits or
to terminate the employment of such person, with or without
cause, but nothing contained in this Plan or any document related
hereto shall adversely affect any independent contractual right
of such person without his or her consent thereto.
(c) Plan Not Funded. Awards payable under this Plan
shall
be payable in shares or from the general assets of the
Corporation,
and no special or separate reserve, fund or deposit shall be made
to assure payment of such Awards. No Participant, Beneficiary or
other person shall have any right, title or interest in any fund
or in any specific asset (including shares of Common Stock,
except as expressly otherwise provided) of the Company by reason
of any Award hereunder. Neither the provisions of this Plan (or
of any related documents), nor the creation or adoption of this
Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind
or a fiduciary relationship between the Company and any
Participant, Beneficiary or other person. To the extent that a
Participant, Beneficiary or other person acquires a right to
receive payment pursuant to any Award hereunder, such right shall
be no greater than the right of any unsecured general creditor of
the Company.
Section 6.2. Adjustments; Acceleration.
(a) Adjustments. If there shall occur any
extraordinary
dividend or other extraordinary distribution in respect of the
Common Stock (whether in the form of cash, Common Stock, other
securities, or other property), or any reclassification,
recapitalization, stock split (including a stock split in the
form of a stock dividend), reverse stock split, reorganization,
merger, combination, consolidation, split-up, spin-off,
combination, or exchange of Common Stock or other securities of
the Corporation, or there shall occur any other like corporate
transaction or event in respect of the Common Stock or a sale of
substantially all the assets of the Corporation as an entirety,
then the Committee shall, in such manner and to such extent (if
any) as it deems appropriate and equitable (1) proportionately
adjust any or all of (i) the number and type of shares of Common
Stock (or other securities) which thereafter may be made the
subject of Awards (including the specific numbers of shares set
forth elsewhere in this Plan), (ii) the number, amount and type
of shares of Common Stock (or other securities or property)
subject to any or all outstanding Awards, (iii) the grant,
purchase, or exercise price of any or all outstanding Awards,
(iv) the securities, cash or other property deliverable upon
exercise of any outstanding Awards, or (v) the performance
standards appropriate to any outstanding Awards, or (2) in the
case of an extraordinary dividend or other distribution,
recapitalization, reclassification, merger, reorganization,
consolidation, combination, sale of assets, split up, exchange,
or spin off, make provision for a cash payment or for the
substitution or exchange of any or all outstanding Awards or the
cash, securities or property deliverable to the holder of any or
all outstanding Awards based upon the distribution or
consideration payable to holders of the Common Stock of the
Corporation upon or in respect of such event. In any of such
events, the Committee may take such action sufficiently prior to
such event if necessary to permit the Participant to realize the
benefits intended to be conveyed with respect to the underlying
shares in the same manner as is available to stockholders
generally.
(b) Acceleration of Awards Upon Change in Control. As
to
any Participant, unless prior to a Change in Control Event the
Committee determines that, upon its occurrence, there shall be no
acceleration of benefits under Awards or determines that only
certain or limited benefits under Awards shall be accelerated and
the extent to which they shall be accelerated, and/or establishes
a different time in respect of such Change in Control Event for
such acceleration, then upon the occurrence of a Change in
Control Event (i) each Option and Stock Appreciation Right shall
become immediately exercisable, (ii) Restricted Stock shall
immediately vest free of restrictions, and (iii) each Performance
Share Award shall become payable to the Participant; provided,
however, that in no event shall any Award be accelerated as to
any Section 16 Person to a date less than six months after the
Award Date of such Award. The Committee may override the
limitations on acceleration in this Section 6.2(b) by express
provision in the Award Agreement and may accord any Eligible
Person a right to refuse any acceleration, whether pursuant to
the Award Agreement or otherwise, in such circumstances as the
Committee may approve. Any acceleration of Awards shall comply
with applicable regulatory requirements, including without
limitation Section 422 of the Code.
(c) Possible Early Termination of Accelerated Awards.
If
any Option or other right to acquire Common Stock under this Plan
has
been fully accelerated as permitted by Section 6.2(b) but is not
exercised prior to (i) a dissolution of the Corporation, or (ii)
an event described in Section 6.2(a) that the Corporation does
not survive, or (iii) the consummation of an event described in
Section 6.2(a) that results in a Change in Control Event approved
by the Board, such Option or right shall thereupon terminate,
subject to any provision that has been expressly made by the
Committee for the survival, substitution, exchange or other
settlement of such Option or right.
Section 6.3. Effect of Termination of Employment.
The Committee shall establish in respect of each Award
granted to an Eligible Person the effect of a termination of
employment on the rights and benefits thereunder and in so doing
may make distinctions based upon the cause of termination. In
addition, in the event of, or in anticipation of, a termination
of employment with the Company for any reason, other than
discharge for cause, the Committee may, in its discretion,
increase the portion of the Participant's Award available to the
Participant, or Participant's Beneficiary or Personal
Representative, as the case may be, or, subject to the provisions
of Section 1.6, extend the exercisability period upon such terms
as the Committee shall determine and expressly set forth in or by
amendment to the Award Agreement.
Section 6.4. Compliance with Laws.
This Plan, the granting and vesting of Awards under
this Plan and the offer, issuance and delivery of shares of
Common Stock and/or the payment of money under this Plan or under
Awards granted hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law
and federal margin requirements) and to such approvals by any
listing, regulatory or governmental authority as may, in the
opinion of counsel for the Corporation, be necessary or advisable
in connection therewith. Any securities delivered under this
Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Corporation,
provide such assurances and representations to the Corporation as
the Corporation may deem necessary or desirable to assure
compliance with all applicable legal requirements.
Section 6.5. Tax Withholding.
Upon any exercise, vesting, or payment of any Award,
the Company shall have the right at its option to (i) require the
Participant (or Personal Representative or Beneficiary, as the
case may be) to pay or provide for payment of the amount of any
taxes which the Company may be required to withhold with respect
to such Award event or payment or (ii) deduct from any amount
payable in cash the amount of any taxes which the Company may be
required to withhold with respect to such cash payment. In any
case where a tax is required to be withheld in connection with
the delivery of shares of Common Stock under this Plan, the
Committee may in its sole discretion grant (either at the time of
the Award or thereafter) to the Participant the right to elect,
pursuant to such rules and subject to such conditions as the
Committee may establish, to have the Corporation reduce the
number of shares to be delivered by (or otherwise reacquire) the
appropriate number of shares valued at their then Fair Market
Value, to satisfy such withholding obligation.
Section 6.6. Plan Amendment, Termination and Suspension.
(a) Board Authorization. The Board may, at any time,
terminate or, from time to time, amend, modify or suspend this
Plan,
in whole or in part. No Awards may be granted during any
suspension
of this Plan or after termination of this Plan, but the Committee
shall retain jurisdiction as to Awards then outstanding in
accordance with the terms of this Plan.
(b) Stockholder Approval. Any amendment shall be
subject
to stockholder approval only to the extent then required by
applicable law, or deemed necessary or advisable by the Board.
(c) Amendments to Awards. Without limiting any other
express authority of the Committee under but subject to the
express
limits of this Plan, the Committee by agreement or resolution may
waive conditions of or limitations on Awards to Eligible Persons
that the Committee in the prior exercise of its discretion has
imposed, without the consent of a Participant, and may make other
changes to the terms and conditions of Awards that do not affect
in any manner materially adverse to the Participant, his or her
rights and benefits under an Award.
(d) Limitations on Amendments to Plan and Awards. No
amendment, suspension or termination of the Plan or change of or
affecting any outstanding Award shall, without written consent of
the Participant, affect in any manner materially adverse to the
Participant any rights or benefits of the Participant or
obligations of the Corporation under any Award granted under this
Plan prior to the effective date of such change. Changes
contemplated by Section 6.2 shall not be deemed to constitute
changes or amendments for purposes of this Section 6.6.
Section 6.7. Privileges of Stock Ownership.
Except as otherwise expressly authorized by the
Committee or this Plan, a Participant shall not be entitled to
any privilege of stock ownership as to any shares of Common Stock
not actually delivered to and held of record by him or her. No
adjustment will be made for dividends or other rights as a
stockholders for which a record date is prior to such date of
delivery.
Section 6.8. Effective Date of the Plan.
This Plan shall be effective as of December 15, 1998,
that being the date of approval by the Board.
Section 6.9. Term of the Plan.
No Award shall be granted after December 14, 2008 (the
"termination date"). Unless otherwise expressly provided in this
Plan or in an applicable Award Agreement, any Award granted prior
to the termination date may extend beyond such date, and all
authority of the Committee with respect to Awards hereunder,
including the authority to amend an Award, shall continue during
any suspension of this Plan and in respect of outstanding Awards
on the termination date.
Section 6.10. Governing Law/Construction/Severability.
(a) Choice of Law. This Plan, the Awards, all
documents
evidencing Awards and all other related documents shall be
governed by, and construed in accordance with the laws of the
state of incorporation of the Corporation.
(b) Severability. If any provision shall be held by a
court of competent jurisdiction to be invalid and unenforceable,
the
remaining provisions of this Plan shall continue in effect.
(c) Plan Construction. It is the intent of the
Corporation
that transactions in and affecting Awards in the case of
Participants
who are or may be subject to Section 16 of the Exchange Act
satisfy any then applicable requirements of Rule 16b-3 so that
such persons (unless they otherwise agree) will be entitled to
the benefits of Rule 16b-3 or other exemptive rules under Section
16 of the Exchange Act in respect of these transactions and will
not be subjected to avoidable liability thereunder. If any
provision of this Plan or of any Award would otherwise frustrate
or conflict with the intent expressed above, that provision to
the extent possible shall be interpreted so as to avoid such
conflict. If the conflict remains irreconcilable, the Committee
may disregard the provision if it concludes that to do so
furthers the interest of the Corporation and is consistent with
the purposes of this Plan as to such persons in the
circumstances.
Section 6.11. Captions.
Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material
or relevant to the construction or interpretation of the Plan or
any provision thereof.
Section 6.12. Effect of Change of Subsidiary Status.
For purposes of this Plan and any Award hereunder, if
an entity ceases to be a Subsidiary a termination of employment
and service shall be deemed to have occurred with respect to each
Eligible Person in respect of such Subsidiary who does not
continue as an Eligible Person in respect of another entity
within the Company.
Section 6.13. Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to limit
the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to
the Common Stock, under any other plan or authority.
ARTICLE VII. DEFINITIONS.
Section 7.1. Definitions.
"Award" shall mean an award of any Option, Stock
Appreciation Right, Restricted Stock, Stock Bonus, Performance
Share Award, dividend equivalent or deferred payment right or
other right or security that would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any
combination thereof, whether alternative or cumulative,
authorized by and granted under this Plan.
"Award Agreement" shall mean any writing setting forth
the terms of an Award that has been authorized by the Committee.
"Award Date" shall mean the date upon which the
Committee took the action granting an Award or such later date as
the Committee designates as the Award Date at the time of the
Award.
"Award Period" shall mean the period beginning on an
Award Date and ending on the expiration date of such Award.
"Beneficiary" shall mean the person, persons, trust or
trusts designated by a Participant or, in the absence of a
designation, entitled by will or the laws of descent and
distribution, to receive the benefits specified in the Award
Agreement and under this Plan in the event of a Participant's
death, and shall mean the Participant's executor or administrator
if no other Beneficiary is designated and able to act under the
circumstances.
"Board" shall mean the Board of Directors of the
Corporation.
"Change in Control Event" shall mean any of the
following:
(1) Approval by the stockholders of the Corporation of
the dissolution or liquidation of the Corporation;
(2) Approval by the stockholders of the Corporation of
an agreement to merge or consolidate, or otherwise
reorganize, with or into one or more entities that are
not Subsidiaries, as a result of which less than 50% of
the outstanding voting securities of the surviving or
resulting entity immediately after the reorganization
are, or will be, owned, directly or indirectly, by
stockholders of the Corporation immediately before such
reorganization (assuming for purposes of such
determination that there is no change in the record
ownership of the Corporation's securities from the
record date for such approval until such reorganization
and that such record owners hold no securities of the
other parties to such reorganization); provided that an
event described in this clause (2) shall not constitute
a Change in Control Event if the majority of members of
the Board of the surviving entity is comprised of
individuals who were members of the Board immediately
prior to such event;
(3) Approval by the stockholders of the Corporation of
the sale of substantially all of the Corporation's
business and/or assets to a person or entity which is
not a Subsidiary;
(4) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act but excluding any
person described in and satisfying the conditions of
Rule 13d-1(b)(1) thereunder), becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the
Corporation representing more than 50% of the combined
voting power of the Corporation's then outstanding
securities entitled to then vote generally in the
election of directors of the Corporation; or
(5) At any time during the term of this Plan, 51% or
more of the individuals elected to serve, and who are
then serving, on the Board are individuals who were not
(i) members of the Board at the time of the adoption of
this Plan by the Board, or (ii) nominated or elected to
their current term of office as a director by a
committee of the Board which is authorized to fill
vacancies on the Board (or if there is no such
committee, by a majority of the Board in office at the
time of such individual's nomination or election by the
Board to fill a vacancy), or (iii) approved by a
majority of members of the Board who were either
members of the Board at the time this Plan was adopted
by the Board, or nominated or elected as described in
clause (5) (ii) above.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commission" shall mean the Securities and Exchange
Commission.
"Committee" shall mean the Board or a committee
appointed by the Board to administer this Plan, which committee
shall be comprised only of two or more directors or such greater
number of directors as may be required under applicable law, each
of whom, in respect of any decision affecting a transaction at a
time when the Participant involved in the transaction may be
subject to Section 16 of the Exchange Act, shall be a "non-
employee director" within the meaning of Rule 16b-3(b)(3)
promulgated under the Exchange Act.
"Common Stock" shall mean the Common Stock of the
Corporation and such other securities or property as may become
the subject of Awards, or become subject to Awards, pursuant to
an adjustment made under Section 6.2 of this Plan.
"Company" shall mean, collectively, the Corporation and
its Subsidiaries.
"Corporation" shall mean Apria Healthcare Group Inc., a
Delaware corporation, and its successors.
"Eligible Employee" shall mean an officer (whether or
not a director) or key employee of the Company.
"Eligible Person" means an Eligible Employee, or any
Other Eligible Person, as determined by the Committee in its
discretion.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended from time to time.
"Fair Market Value" on any date shall mean (i) if the
stock is listed or admitted to trade on a national securities
exchange, the closing price of the stock on the principal
national securities exchange on which the stock is so listed or
admitted to trade, on such date, or, if there is no trading of
the stock on such date, then the closing price of the stock on
the next preceding date on which there was trading in such
shares; (ii) if the stock is not listed or admitted to trade on a
national securities exchange, the last price for the stock on
such date, as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the NASDAQ National Market
Reporting System or a similar organization if the NASD is no
longer reporting such information; (iii) if the stock is not
listed or admitted to trade on a national securities exchange and
is not reported on the National Market Reporting System, the mean
between the bid and asked price for the stock on such date, as
furnished by the NASD or a similar organization; or (iv) if the
stock is not listed or admitted to trade on a national securities
exchange, is not reported on the National Market Reporting System
and if bid and asked prices for the stock are not furnished by
the NASD or a similar organization, the value as established by
the Committee at such time for purposes of this Plan.
"Free Cash Flow" shall mean cash postings less cost of
sales, operating expenses (net of bad debt) and capital
expenditures.
"Incentive Stock Option" shall mean an Option which is
intended, as evidenced by its designation, as an incentive stock
option within the meaning of Section 422 of the Code, the award
of which is made under such circumstances and to such persons as
may be necessary to comply with that section.
"Nonqualified Stock Option" shall mean an Option that
is designated as a Nonqualified Stock Option and shall include
any Option intended as an Incentive Stock Option that fails to
meet the applicable legal requirements thereof. Any Option
granted hereunder that is not designated as an incentive stock
option shall be deemed to be designated a nonqualified stock
option under this Plan and not an incentive stock option under
the Code.
"Option" shall mean an option to purchase Common Stock
granted under this Plan.
"Other Eligible Person" shall mean any Non-Employee
Director or any individual consultant or advisor who renders or
has rendered bona fide services (other than services in
connection with the offering or sale of securities of the Company
in a capital raising transaction) to the Company, and who is
selected to participate in this Plan by the Committee. A non-
employee agent providing bona fide services to the Company (other
than as an eligible advisor or consultant) may also be selected
as an Other Eligible Person if such agent's participation in this
Plan would not adversely affect (i) the Corporation's eligibility
to use Form S-8 to register under the Securities Act of 1933, as
amended, the offering of shares issuable under this Plan by the
Company or (ii) the Corporation's compliance with any other
applicable laws.
"Participant" shall mean an Eligible Person who has
been granted an Award under this Plan.
"Performance Share Award" shall mean an Award of a
right to receive shares of Common Stock made in accordance with
Section 5.1, the issuance or payment of which is contingent upon,
among other conditions, the attainment of performance objectives
specified by the Committee.
"Personal Representative" shall mean the person or
persons who, upon the disability or incompetence of a
Participant, shall have acquired on behalf of the Participant, by
legal proceeding or otherwise, the power to exercise the rights
or receive benefits under this Plan and who shall have become the
legal representative of the Participant.
"Plan" shall mean this 1998 Nonqualified Stock
Incentive Plan.
"QDRO" shall mean a qualified domestic relations order
as defined in Section 414(p) of the Code or Title I, Section
206(d)(3) of ERISA (to the same extent as if this Plan were
subject thereto), or the applicable rules thereunder.
"Restricted Stock Award" shall mean an award of a fixed
number of shares of Common Stock to the Participant subject,
however, to payment of such consideration, if any, and such
forfeiture provisions, as are set forth in the Award Agreement.
"Restricted Stock" shall mean shares of Common Stock
awarded to a Participant under this Plan, subject to payment of
such consideration, if any, and such conditions on vesting and
such transfer and other restrictions as are established in or
pursuant to this Plan, for so long as such shares remain unvested
under the terms of the applicable Award Agreement.
"Rule 16b-3" shall mean Rule 16b-3 as promulgated by
the Commission pursuant to the Exchange Act, as amended from time
to time.
"Section 16 Person" shall mean a person subject to
Section 16(a) of the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933,
as amended from time to time.
"Stock Appreciation Right" shall mean a right to
receive a number of shares of Common Stock or an amount of cash,
or a combination of shares and cash, the aggregate amount or
value of which is determined by reference to a change in the Fair
Market Value of the Common Stock that is authorized under this
Plan.
"Stock Bonus" shall mean an Award of shares of Common
Stock granted under this Plan for no consideration other than
past services and without restriction other than such transfer
or other restrictions as the Committee may deem advisable to
assure compliance with law.
"Subsidiary" shall mean any corporation or other entity
a majority of whose outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation.
"Total Disability" shall mean a "permanent and total
disability" within the meaning of Section 22(e)(3) of the Code
and such other disabilities, infirmities, afflictions or
conditions as the Committee by rule may include.
Section 7.2. Changes in Applicable Law.
To the extent any terms defined or utilized in this
Plan are defined by identification to a particular statute or
regulation, and if there shall occur a change in such statutory
or regulatory definition, then the definition of such term shall
be deemed to have been amended to conform to the change in the
statutory or regulatory definition, unless the Committee shall
determine that such change would create a result which is
contrary to the intents and purposes of this Plan or work to
create a hardship for either any Eligible Person or the Company,
in which event the Committee, at its option, shall have authority
to amend this Plan in a manner so as to achieve the original
intents and purposes of this Plan or to diminish or eliminate the
hardship caused by such change in a statutory definition. Any
such amendment may be made retroactively to the date of the
change in the statutory or regulatory definition.
<PAGE>
EXHIBIT 5
October 14, 1999
Apria Healthcare Group Inc.
3560 Hyland Avenue
Costa Mesa, California 92626
Re: Registration Statement on Form S-8 of Apria
Healthcare
Group Inc. (the "Company")
Ladies and Gentlemen:
At your request, I have examined the Registration Statement
on
Form S-8 to be filed with the Securities and Exchange Commission
in
connection with the registration under the Securities Act of 1933,
as
amended, of 2,100,000 shares of Common Stock, $0.001 par value, of
the
Company (the "Common Stock"), and additional rights pursuant to
the
Company's Rights Agreement dated February 8, 1995 with U.S. Stock
Transfer Corporation, as Rights Agent (together with the Common
Stock,
the "Shares"), to be issued pursuant to the Apria Healthcare Group
Inc. 1998 Nonqualified Stock Incentive Plan (the "Plan"). I have
examined the proceedings heretofore taken and to be taken in
connection with the authorization of the Plan and the Shares to be
issued pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of fact and
law
as I have deemed relevant, I am of the opinion that the Shares
have
been duly authorized by all necessary corporate action on the part
of
the Company and, when issued in accordance with such
authorization,
the provisions of the Plan and relevant agreements duly authorized
by
and in accordance with the terms of the Plan, the Shares will be
validly issued, and the Common Stock will be fully paid and
nonassessable.
I consent to the use of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
/s/ Raoul Smyth
---------------------------
Raoul Smyth,
Associate General Counsel
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration
Statement of Apria Healthcare Group Inc., on Form S-8 of our
report dated March 29, 1999, appearing in the Company's Annual
Report on Form 10-K of Apria Healthcare Group Inc. for the year
ended December 31, 1998.
/s/ DELOITTE & TOUCHE LLP
Costa Mesa, California
October 15, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Apria Healthcare Group Inc.
1998 Nonqualified Stock Incentive Plan or our report dated March
11,
1998 (except for the second paragraph of Note 12, as to which the
date is April 9, 1998), with respect to the 1997 consolidated
financial statements and schedule of Apria Healthcare Group Inc.
included in its Annual Report (Form 10-K) for the year ended
December 31, 1998, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Orange County, California
October 15, 1999
