<PAGE> 1
As Filed with the Securities and Exchange Commission on October 28, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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OPTION CARE, INC.
(Exact name of registrant as specified in charter)
DELAWARE 36-3791193
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) Number)
100 CORPORATE NORTH, SUITE 212
BANNOCKBURN, ILLINOIS 60015
(Address of principal executive offices) (Zip Code)
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OPTION CARE, INC.
AMENDED AND RESTATED
STOCK INCENTIVE PLAN
(1997)
(Full title of the plan)
----------
------------------------------------
John N. Kapoor
Chairman
Option Care, Inc.
100 Corporate North, Suite 212
Bannockburn, Illinois 60015
(Name and address of agent for service)
Telephone: (708) 615-1690
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Copy to:
CATHY BELLEHEUMER BENJAMIN H. HULSEY
General Counsel Thompson Coburn
Option Care, Inc. One Mercantile Center
100 Corporate North, Suite 212 St. Louis, Missouri 63101
Bannockburn, Illinois 60015 (314) 552-6000
(708) 615-1690
<TABLE>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
<CAPTION>
Title of Securities to Amount to be Proposed Maximum Proposed Maximum Aggregate
be Registered Registered Offering Price Per Share<F1> Offering Price<F1> Amount of Registration Fee<F2>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,300,000 $1.34 $ 1,742,000 $484.28
shares
====================================================================================================================================
<FN>
<F1> Estimated solely for purposes of computing the Registration Fee pursuant to
the provisions of Section 457(c), based upon the average of the high and
low sale prices of common stock, $0.01 par value, of the Registrant as
reported on the Nasdaq National Market System on October 22, 1998.
<F2> The Registrant previously paid $820.31 on July 27, 1993 in connection with
the Registrant's Registration Statement on Form S-8 (File No. 33-66592) to
register 700,000 shares of Option Care, Inc. common stock to be issued
pursuant to the Option Care, Inc. 1991 Stock Incentive Plan (the "Plan").
This filing is solely to register 1,300,000 additional shares which may
be issued pursuant to that Plan, as amended.
</TABLE>
984924
<PAGE> 2
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents filed by the Company with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (the "Exchange
Act") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998 and June 30, 1998.
(c) The Company's Current Report on Form 8-K dated June 18, 1998.
(d) The description of the Company's common stock, par value $0.01 per
share (the "Common Stock") set forth in Item 1 of the Company's
Registration Statement on Form 8-A, dated February 20, 1992, and
any amendment or report filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date hereof and prior to the filing
of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities remaining unsold,
shall be deemed to be incorporated by reference herein and made a part hereof
from the date any such document is filed. The information relating to the
Company contained in this Registration Statement does not purport to be
complete and should be read together with the information in the documents
incorporated by reference herein. Any statement contained herein or in a
document incorporated herein by reference shall be deemed to be modified or
superseded for purposes hereof to the extent that a subsequent statement
contained herein or in any other subsequently filed document 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 hereof.
Where any document or part thereof is incorporated by reference in the
Registration Statement, the Company will provide without charge to each person
to whom a Prospectus with respect to the Plans is delivered, upon written or
oral request of such person, a copy of any and all of the information
incorporated by reference in the Registration Statement, excluding exhibits
unless such exhibits are specifically incorporated by reference.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
The following is a summary of Section 145 of the General Corporation
Law of the State of Delaware (the "DGCL").
Subject to restrictions contained in the DGCL, a corporation may
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 by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection therewith if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, in connection with any criminal action or
proceedings, had no reasonable cause to believe that such person's conduct was
unlawful. A person who is successful on the merits or otherwise in any suit or
matter covered by the indemnification statute, shall be indemnified and
indemnification is otherwise authorized upon a determination that the person to
be indemnified has met the applicable standard of conduct required. Such
determination shall be made by a majority vote of the board of directors who
were not parties to such action, suit or proceeding, even though less than a
quorum, or if there are no such directors, or if such directors so direct, by
special independent counsel in a written opinion, or by the stockholders.
Expenses incurred in defense may be paid in advance upon
<PAGE> 3
receipt by the corporation of a written undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that the
recipient is not entitled to indemnification under the statute. The
indemnification provided by statute is entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise, and shall inure to
the benefit of the heirs, executors and administrators of such person.
Insurance may be purchased on behalf of any person entitled to indemnification
by the corporation against any liability asserted against him or her and
incurred in an official capacity regardless of whether the person could be
indemnified under the statute. References to the corporation include all
constituent corporations absorbed in a consolidation or merger as well
as the resulting corporation, and anyone seeking indemnification by virtue of
acting in some capacity with a constituent corporation would stand in the same
position as if such person had served the resulting or surviving corporation in
the same capacity.
The By-Laws of the Company provide for indemnification of directors and
officers of the Company to the maximum extent permitted by the DGCL.
Item 8. Exhibits.
--------
See Exhibit Index located at page 6 hereof.
Item 9. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers and sales
are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof), which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with
respect to the plan of distribution 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) 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 (and, where applicable, each filing of an
employee
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<PAGE> 4
benefit plan's annual report pursuant to 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 offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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<PAGE> 5
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
--------------
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Village of Bannockburn, State of Illinois, on October
28, 1998.
OPTION CARE, INC.
By /s/ John N. Kapoor
-------------------------------------
John N. Kapoor, Chairman of the Board
POWER OF ATTORNEY
-----------------
We, the undersigned officers and directors of Option Care, Inc.,
hereby severally and individually constitute and appoint John N. Kapoor and Erik
E. Hanson, and each of them, the true and lawful attorneys and agents of each of
us to execute in the name, place and stead of each of us (individually and in
any capacity stated below) any and all amendments to this Registration Statement
on Form S-8 relating to the Option Care, Inc. Amended and Restated Stock Option
Plan (1997) and all instruments necessary or advisable in connection therewith
and to file the same with the Securities and Exchange Commission, each of said
attorneys and agents to have the power to act with or without the others and to
have full power and authority to do and perform in the name and on behalf of
each of the undersigned every act whatsoever necessary or advisable to be done
in the premises as fully and to all intents and purposes as any of the
undersigned might or could do in person, and we hereby ratify and confirm our
signatures as they may be signed by our said attorneys and agents or each of
them to any and all such amendments and instruments.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<C> <S> <C>
/s/ John N. Kapoor Chairman of the Board October 28, 1998
- ---------------------------------- and Director
John N. Kapoor
/s/ Michael A. Rusnak President and Chief Executive October 28, 1998
- ---------------------------------- Officer
Michael A. Rusnak
/s/ Michael A. Siri Chief Financial Officer and October 28, 1998
- ---------------------------------- Vice-President
Michael A. Siri
/s/ James G. Andress Director October 28, 1998
- ----------------------------------
James G. Andress
-4-
<PAGE> 6
/s/ Jerome F. Sheldon Director October 28, 1998
- ----------------------------------
Jerome F. Sheldon
/s/ Roger W. Stone Director October 28, 1998
- ----------------------------------
Roger W. Stone
</TABLE>
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<PAGE> 7
<TABLE>
EXHIBIT INDEX
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<CAPTION>
Exhibit No. Page
----------- ----
<C> <S> <C>
4.1(a) Certificate of Incorporation of the Company, together with Certificate of
Amendment thereto incorporated herein by reference to Exhibit 3(a) to the
Company's Registration Statement on Form S-1 (Registration File No.
33-45836) filed February 19, 1992.<F*>
4.1(b) Certificate of Amendment to the Certificate of Incorporation of the
Company incorporated herein by reference to Exhibit 3(c) to the Company's
Registration Statement on Form S-1 (Registration File No. 33-45836) filed
April 15, 1992.<F*>
4.2 Amended and Restated By-laws of the Company, incorporated herein by
reference to Exhibit 10.5 to the Company's Report on Form 10-K for the
year ended December 31, 1994.<F*>
5.1 Opinion of Thompson Coburn as to the legality of the securities being
registered.<F**>
23.1 Consent of KPMG Peat Marwick LLP with regard to use of its report in the
Company's financial statements.<F**>
23.2 Consent of Thompson Coburn (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page hereto).
99.1 Option Care, Inc. Amended and Restated Stock Incentive Plan (1997).<F**>
<FN>
- ----------------------
<F*> Previously filed.
<F**> Filed herewith.
</TABLE>
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<PAGE> 1
[Letterhead of Thompson Coburn] Exhibit 5.1
October 28, 1998
Option Care, Inc.
100 Corporate North, Suite 212
Bannockburn, Illinois 60015
Re: Registration Statement on Form S-8 - 1,300,000 Shares of Option Care, Inc.
Common Stock, $0.01 par value
Ladies and Gentlemen:
With reference to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by Option Care, Inc., a Delaware corporation (the
"Company"), on October 28, 1998, with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, pertaining to the proposed
issuance by the Company of up to 1,300,000 shares of the Company's common
stock, $0.01 par value (the "Shares"), as provided in the Option Care, Inc.
Amended and Restated Stock Incentive Plan (1997) (the "Plan"), we have
examined such corporate records of the Company, such laws and such other
information as we have deemed relevant, including the Company's Certificate of
Incorporation, By-Laws, resolutions adopted by the Board of Directors relating
to such issuance, certificates received from state officials and statements we
have received from officers and representatives of the Company. In delivering
this opinion, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
the originals of all documents submitted to us as certified, photostatic or
conformed copies, the authenticity of originals of all such latter documents,
and the correctness of statements submitted to us by officers and
representatives of the Company.
Based solely on the foregoing, we are of the opinion that:
1. The Company is duly incorporated and is validly existing under the laws
of the State of Delaware; and
2. The Shares to be issued by the Company pursuant to the Registration
Statement have been duly authorized and, when issued by the Company in
accordance with the Plan, will be duly and validly issued and will be fully
paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement. We further consent to the filing of copies of this opinion with
agencies of such states and other jurisdictions as you deem necessary in the
course of complying with the laws of the states and jurisdictions regarding
the sale and issuance of the Shares in accordance with the Registration
Statement.
Very truly yours,
/s/ Thompson Coburn
<PAGE> 1
Exhibit 23.1
CONSENT OF KPMG PEAT MARWICK LLP
--------------------------------
We consent to the incorporation by reference in the registration statement on
Form S-8 of Option Care, Inc. of our report dated March 26, 1998, relating to
the consolidated balance sheets of Option Care, Inc. and subsidiaries as of
December 31, 1997 and 1996, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in
the three-year period ended December 31, 1997, which report appears in the
December 31, 1997 annual report on Form 10-K of Option Care, Inc.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
October 26, 1998
<PAGE> 1
EXHIBIT 99.1
OPTION CARE, INC.
AMENDED AND RESTATED
STOCK INCENTIVE PLAN
(1997)
I. GENERAL
1. PLAN. To provide incentives to employees of OPTION CARE, Inc., a Delaware
Corporation (the "Company"), or its subsidiary corporations, members of the
Board of Directors of the Company (the "Board") and other persons who provide
services to the Company or its subsidiary corporations on a regular and
substantial basis ("vendors") through rewards based upon the ownership and
performance of the common stock of the Company, the Committee hereinafter
designated may grant incentive awards, stock options, stock appreciation rights,
or combinations thereof, to eligible officers and other employees and vendors on
the terms and subject to the conditions stated in this Plan. In addition,
members of the Board other than John N. Kapoor ("Directors") are or may be
granted options on the terms and subject to the conditions set forth in this
Plan. References hereinafter to employment by or the provision of services to
the Company shall include references to its subsidiary corporations within the
meaning of section 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code"). All employees, officers, Directors and vendors eligible to receive
grants or awards under this Plan shall be collectively referred to herein as
"Eligible Recipients."
2. ELIGIBILITY. Officers and other employees of the Company and its
subsidiaries, and vendors, shall, upon selection by the Committee, be eligible
to receive incentive awards, stock options or stock appreciation rights,
either singly or in combination, as the Committee, in its discretion, shall
determine. Directors shall receive stock options on the terms and subject to
the conditions stated in this Plan.
3. SHARES TO BE ISSUED. The maximum number of shares of common stock, par value
$.01 per share of the Company ("Common Stock"), to be issued pursuant to all
grants made under the Plan shall be 2,000,000. Shares awarded pursuant to
grants which, by reason of the expiration, cancellation or other termination of
the grants prior to issuance, are not issued, shall again be available for
future grants. Shares of Common Stock to be issued may be authorized and
unissued shares, treasury stock or a combination thereof.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a committee
designated by the Board (the "Committee"). No member of the Committee shall be
eligible to participate in, or within one year prior to appointment to the
Committee (but disregarding any participation or eligibility for participation
during any period of time before the initial registration statement under
Section 12 of the Securities Exchange Act of 1934 of the Company or any of
its affiliates becomes effective) shall have participated in or shall have
been eligible to participate in, this Plan or any other stock purchase,
incentive award, stock option, stock appreciation rights or other stock
incentive plan of the Company, except as provided in Article III, Section 1(b).
The Committee shall, subject to the terms of the Plan establish selection
guidelines, select officers and other employees, directors and vendors for
participation, and determine the form of grant, either as an incentive award,
stock option or stock appreciation rights or combination thereof, determine the
form of stock option, the number of shares subject to the grant, the fair
market value of the Common Stock when necessary, the time and conditions of
vesting or exercise, and all other terms and conditions of the grant. All
grants and awards under this Plan shall be evidenced by written agreements
("Option Agreements") between this Company and the participants and no such
grant or award shall be valid until so evidenced. The Committee may interpret
the Plan and establish rules and regulations for the administration of the
Plan, including without limitation, the imposition of conditions with respect
to competitive employment and provisions accelerating vesting or exercisability,
not inconsistent with or conflicting with the terms of the Plan. All such
rules, regulations, and interpretations relating to the Plan adopted by the
Committee shall be conclusive and binding on all parties. The foregoing
notwithstanding, neither the Board nor the Committee shall have any discretion
to alter the number of shares subject to stock options granted to directors
1
<PAGE> 2
pursuant to Article 3, Section 1(b) or the terms or conditions under which such
shares are granted except as provided in Article 1, Section 5.
5. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION. Appropriate adjustments shall
be made by the Committee in the maximum number of shares to be issued under
the Plan, the maximum number of shares to be issued pursuant to incentive
awards and in the number of shares the subject of any option grant, to give
effect to any stock splits, stock dividends and other relevant changes in
capitalization occurring after the effective date of the Plan and its amendment
and restatements, as applicable.
6. EFFECTIVE DATE AND TERM OF PLAN. The Plan as amended and restated shall be
submitted to the stockholders of the Company for approval and if approved
shall become effective on the date thereof. The Plan shall terminate ten
years thereafter, unless terminated earlier by action of the Board. No further
grants shall be made under the Plan after termination, but termination shall
not affect the rights of any participant under any grants made prior to
termination.
7. AMENDMENTS. The Plan may be amended or terminated by the Board in any
respect except that no amendment may be made without stockholder approval if
such amendment would cause the Plan to fail to comply with Rule 16b-3 under
the Securities Exchange Act of 1934 (as such Rule 16b-3 may be amended or
applicable from time to time) or any other requirement of applicable law or
regulation ("Applicable Law").
8. SECURITIES MATTERS.
(a) Compliance with Law. The exercise or vesting of any grant or award
hereunder shall be effective only at such time as counsel to the Company
shall have determined that the issuance and delivery of shares of Common
Stock of the Company pursuant thereto will not violate any state or federal
securities or other laws. The person entitled to receive shares of stock
pursuant to any grant or award hereunder may be required by the Company,
as a condition prerequisite to such delivery, to agree in writing that all
shares of Common Stock to be acquired pursuant thereto shall be held for
his or her own account without a view to any further distribution thereof,
that the certificates for such shares shall bear an appropriate legend to
that effect and that such shares will not be transferred or disposed of
except in compliance with applicable federal and state securities laws. The
Company may, in its sole discretion, defer the effectiveness of any exercise
of an option granted hereunder in order to allow the issuance of Common Stock
to be made pursuant thereto to be made pursuant to registration or an
exemption from registration or other methods for compliance available under
federal or state securities laws. The Company shall be under no obligation
to effect the registration pursuant to the Securities Act of 1933 of any
shares of Common Stock to be issued hereunder or to effect similar
compliance under any state laws. The Company shall inform the optionee in
writing of any decision to defer the effectiveness of the exercise of an
option granted hereunder. During the period that the effectiveness of the
exercise of an option has been deferred, the optionee may, by written
notice, withdraw such exercise and obtain the refund of any amount paid
with respect thereto.
(b) Blue Sky Limitations. Anything in this Plan to the contrary
notwithstanding, in the event the Company makes any public offering of its
securities and determines in its sole discretion that it is necessary to
reduce the number of granted but unexercised stock options so as to comply
with any state securities or Blue Sky law limitation with respect thereto,
the Committee shall have the right (a) to accelerate the dates on which
options granted hereunder may be exercised and (b) cancel any such
accelerated options if they are not exercised within fourteen (14) days
after notice of such acceleration has been given to the optionee.
2
<PAGE> 3
9. CHANGE OF CONTROL. Subject to the requirement of Article III, Section 2
hereof that an option must be held by an Eligible Recipient for at least one
year before becoming vested with such Eligible Recipient, upon a Change of
Control any other vesting period shall end and all otherwise unvested options
shall become immediately exercisable. For these purposes, a "Change of Control"
shall mean the occurrence of any of the following events:
(a) a merger, consolidation or reorganization of or involving the Company,
in which the Company does not survive as an entity independent of other
parties to such merger, consolidation or reorganizations;
(b) a sale of all or substantially all of the assets of the Company;
(c) the first purchase of shares of Common Stock of the Company pursuant to
a tender or exchange offer for a majority of the Company's outstanding
shares of Common Stock by any person other than John N. Kapoor;
(d) any change in control (other than as a result of a public issuance of
securities by the Company) of a nature that, in the opinion of the Board,
would be required to be reported under federal securities laws, unless after
(and taking into consideration) the occurrence of such event John N. Kapoor
owns or will own a majority of the Company's outstanding shares of Common
Stock;
(e) any change of control of a nature that, in the opinion of the Board,
would be required to be reported under federal securities laws, unless after
(and taking into consideration) the occurrence of such event John N. Kapoor
owns or will own at least forty percent (40%) of the combined voting power
of the Company's then-outstanding securities;
(f) the date on which any person, other than John N. Kapoor, becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing at least a majority of the combined voting power of the
Company's then-outstanding securities; and
(g) the date on which a majority of the individuals who constitute the
members of the Board cease to be comprised of persons who (i) were members
of the Board two years prior to such date (the "Determining Board Members")
or (ii) were approved as directors by a vote of at least seventy percent
(70%) of the Determining Board Members.
10. SALE OR OTHER DISPOSITION BY MAJORITY INTEREST. Each recipient shall
irrevocably appoint the Company and its Chief Executive Officer, or either of
them, as such recipient's agents and attorneys-in-fact, with full power of
substitution in the recipient's name, to sell, exchange, transfer or otherwise
dispose of all or a portion of such recipient's shares of Common Stock or
options, or both, and to do any and all things and to execute any and all
documents and instruments (including, without limitation, any stock transfer
powers) in connection therewith, such power of attorney not to become operable
until such time as the holder or holders of a majority of the issued and
outstanding shares of Common Stock of the Company sell, exchange, transfer or
otherwise dispose of, or contract to sell, exchange, transfer or otherwise
dispose of, all or substantially all of their shares of Common Stock of the
Company. Any sale, exchange, transfer other disposition of all or a portion
of a recipient's shares of Common Stock pursuant to the foregoing powers of
attorney shall be made upon substantially the same terms and conditions
(including sale price per share) applicable to a sale, exchange, transfer or
other dispositions of all or a portion of shares of Common Stock of the Company
owned by the holder or holders of a majority of the issued and outstanding
shares of Common Stock of the Company. For purposes of determining the sale
price per share of Common Stock under this Section 10, there shall be excluded
the consideration (if any) paid or payable to the holder or holders of a
majority of the issued and outstanding shares of Common Stock of the Company in
connection with any employment, consulting, noncompetition or similar
agreements which such holder or holders may enter into in connection with or
subsequent to such sale, transfer, exchange or other disposition. The foregoing
powers of attorney shall be irrevocable and coupled with an interest and shall
not terminate by operation of law, whether by death, bankruptcy or adjudication
of incompetency or insanity of the recipient or the occurrence of any other
event.
3
<PAGE> 4
11. ADDITIONAL PROVISIONS.
(h) Additional Option Provisions. The Board or Committee may, in its sole
discretion, include additional provisions in any option granted under the
Plan, including, without limitation, restrictions on transfer, repurchase
rights, or commitments (i) to pay cash bonuses, (ii) to make, arrange for
or guaranty loans, or (iii) to transfer other property to optionees upon
exercise of options, or such other provisions as shall be determined by
the Board of Directors or Committee; provided that such additional
provisions shall not be inconsistent with any other term or condition of
the Plan.
(i) Acceleration. The Board or Committee may, in its sole discretion, (i)
accelerate the date or dates on which all or any particular option or
options granted under the Plan may be exercised; or (ii) extend the dates
during which all or any particular option or options granted under the Plan
may be exercised; provided, however, that no such extension shall be
permitted if it would cause the Plan to fail to comply with Applicable Law
(as defined in Article I, Section 7).
II. INCENTIVE AWARDS
1. FORM OF AWARD. Incentive awards, whether Performance Awards or Fixed Awards
(as described below), may be made to Eligible Recipients in the form of (i)
cash, whether in an absolute amount or as a percentage of compensation, (ii)
stock units, without power to vote and without the entitlement to current
dividends, (iii) shares of Common Stock issued to the Eligible Recipient but
forfeitable and with restrictions on transfer in any form as hereinafter
provided or (iv) any combination of the foregoing. In addition, in the
Committee's discretion, the Company may satisfy all or any part of its
obligation under an incentive award payable in cash by delivering shares of
Common Stock with a then fair market value equal to the amount of such
obligation of such part thereof.
2. PERFORMANCE AWARDS. Performance Awards may be made in terms of a stated
potential maximum dollar amount, percentage or compensation, or number of units
or shares, with the actual such amount, percentage and number to be determined
by reference to the level of achievement of corporate, group, division,
individual or other specific objectives over a performance period of not less
than one year nor more than five years, as determined by the Committee. No
rights or interests of any kind shall be vested in an individual receiving a
Performance Award until the conclusion of the performance period and the
determination of the level of achievement specified in the award. The vesting
period, if any, for a Performance Award shall be as specified in the applicable
award or Option Agreement.
3. FIXED AWARDS. Fixed Awards may be made which are not contingent on the
performance of objectives, but are contingent on the recipient's continuing
in the Company's employ for a period to be specified in the award, which
period shall not be less than one year nor more than ten years from the date
of award.
4. RIGHTS WITH RESPECT TO RESTRICTED SHARES. If shares of restricted Common
Stock are issued pursuant to an Incentive Award, the recipient shall have the
right to vote the shares and to receive dividends thereon from the date of
issuance, unless and until forfeited.
5. RIGHTS WITH RESPECT TO STOCK UNITS. If stock units are credited to a
recipient pursuant to an Incentive Award, amounts equal to dividends otherwise
payable on a like number of shares of Common Stock after the crediting of the
units shall be credited to an account for the recipient and held until the
award is forfeited or paid out. Interest shall be credited on the account
annually at a rate equal to the return on five year U.S. Treasury obligations.
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6. VESTING AND RESULTANT EVENTS. At the time an Incentive Award vests, the
award, if in stock units, shall be paid to the recipient either in shares of
Common Stock equal to the number of units, in cash equal to the fair market
value of such shares, or in such combination thereof as the Committee shall
determine, and the recipient's account to which dividends and interest have
been credited shall be paid in cash. Shares of restricted Common Stock issued
pursuant to an award shall, at the time of vesting, be released from the
restrictions.
III. STOCK OPTIONS FOR OFFICERS,
OTHER EMPLOYEES, VENDORS AND DIRECTORS
1. GRANTS OF OPTIONS FOR ELIGIBLE RECIPIENTS. Options to purchase shares of
Common Stock of the Company may be granted to such Eligible Recipients as may
be selected by the Committee. These options may, but need not, constitute
"incentive stock options," as defined in section 422 of the Code, or any other
form of option under the Code as hereafter amended.
2. TERMS OF OPTIONS.
(a) No option shall be exercisable earlier than one year, nor more than ten
years after the date of grant. Subject to the preceding sentence, the
exercisability of an option may be conditioned upon the achievement of
performance goals established by the Committee. Options granted to
non-employee Directors shall become exercisable with respect to 25 percent
of the shares subject thereto on each of the first four anniversaries of the
date of grant.
(b) The per share option price under incentive stock options shall be not
less than 100% of, and the per share option price under options granted to
directors shall be 100% of, the fair market value of a share of Common
Stock at the time the option is granted, provided, however, that if at the
time an option designated as and intended to be an incentive stock option
is otherwise to be granted pursuant to the Plan, the optionee owns directly
or indirectly (within the meaning of section 424(d) of the Code) shares of
Common Stock of the Company possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or its
parent or subsidiary corporations, if any within the meaning of section
422(b) (63 of the Code), then the option price shall be not less than 110%
of the fair market value of the Common Stock as of the date the option is
granted, and such option by its terms shall not be exercisable after the
expiration of five (5) years from the date the option is granted.
(c) Upon exercise, the option price may be paid in cash, in shares of Common
Stock having a fair market value equal to the option price, or in a
combination thereof. Options may be exercised during the individual's
continued employment with, or in the case of a vendor, engagement by, the
Company or service on the Board, as the case may be, and for a period of
ninety days following termination of such employment, engagement or service
on the Board (or such other period of time provided in a relevant employment
or severance agreement between the optionee and the Company) and only
within the original term of that option; provided, however, that if
employment of the optionee by the Company or service on the Board, as the
case may be, shall have terminated by reason of retirement at or after age
65 or total and permanent disability, then the option may be exercised
for a period not in excess of one year following such termination of
employment or service on the Board (or such other period of time provided
in a relevant employment or severance agreement between the optionee and
the Company), but in any event not after the expiration of the term of the
option. If and to the extent the Committee may, in its discretion, determine
the change in an option holder's status from an employee to a vendor, or
the transfer of an individual from the employment or engagement or vice
versa, the Company or its subsidiaries to the employment or engagement of
any affiliate of the Company shall not be treated as a termination of
employment or engagement by the Company. The status of another entity as an
affiliate of the Company shall be determined by the Committee.
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(d) Options shall not be transferable, except that in the event of the death
of an optionee (i) during employment, engagement or service on the Board,
as the case may be, (ii) within a period not in excess of one year after
termination of employment or service on the Board, as the case may be, by
reason of retirement at or after age 65 or total and permanent disability
or (iii) within ninety days after termination of employment, engagement or
service on the Board, as the case may be, for any other reason, outstanding
options may be exercised by the executor, administrator or personal
representative at such deceased optionee during the remainder of the
period during which the optionee could have exercised the option had he
survived, but not less than ninety days after the death of such optionee.
3. WITHHOLDING TAX. An option may provide that the optionee may elect to
deliver to the Company (or authorize the Company to retain from the shares
purchased upon exercise of such option) whole shares of Common Stock to satisfy
the Company's obligation, if any, to withhold federal, state and local income
tax required to be withheld in respect of such exercise, provided, however,
that in the case of an optionee who is an executive officer or director of the
Company (within the meaning of Section 16 of the Securities Exchange Act of
1934), such election may not be made during the six-month period beginning on
the date of grant of such option and must be made either (i) at least six
months prior to the date on which the amount of such withholding tax is
determined, (ii) during the ten business day period beginning on the third
business day following each release of the Company's quarterly or annual summary
of sales and earnings, or (iii) in advance of such ten business day period to be
effective within such ten business day period. Any such election shall be
irrevocable, but subject to disapproval by the Committee.
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IV. STOCK APPRECIATION RIGHTS
1. GRANTS. Rights entitling the grantee to receive cash or shares of Common
Stock having a fair market value equal to the appreciation in market value of
a stated number of shares of Common Stock from the date of grant, or in the
case of rights granted in tandem with or by reference to a stock option granted
prior to the grant of such rights, from the date of grant of the related
stock option to the date of exercise, may be granted to such eligible officers
and other employees as may be selected by the Committee and approved by the
Board.
2. TERMS OF GRANT. Such rights may be granted in tandem with or with reference
to a related stock option, in which event the grantee may elect to exercise
either the option or the right, but not both, as to the same shares of Common
Stock subject to the option and the right, or the right may be granted
independently of a related stock option. In either event, the right shall not
be exercisable unless it shall have been outstanding for at least 6 months
nor shall such right be exercisable more than ten years after the date of grant.
Stock appreciation rights shall not be transferable, except that in the event
of the death of a grantee such right shall be exercisable by the same persons
and for the same period of time as the related option. Stock appreciation
rights may be exercised during the individual's continued employment with the
Company and for a period of ninety days following termination of employment
or engagement (or such other period of time provided in a relevant employment
or severance agreement between the optionee and the Company), as the case may
be, and only within the original term of that grant; provided, however, that
if employment of the grantee by the Company and its subsidiaries shall have
terminated by reason of the grantee's death, retirement after age 65 or total
and permanent disability, or if the grantee dies after termination of
employment on account of such retirement or disability, then such right shall
be exercisable by the same persons and for the same period of time as the
related option. If and to the extent the Committee may, in its discretion,
determine the change in an option holder's status from an employee to a vendor,
or the transfer of an individual from the employment or engagement or vice
versa, the Company or its subsidiaries to the employment or engagement of any
affiliate of the Company shall not be treated as a termination of employment or
engagement by the Company. The status of another entity as an affiliate of the
Company shall be determined by the Committee.
3. PAYMENT OF EXERCISE. Upon exercise of a right, the grantee shall be paid
the excess of the then fair market value of the number of shares to which
the right relates over the fair market value of such number of shares at the
date of grant of the right or of the related stock option, as the case may be.
Such excess shall be paid in cash or in shares of Common Stock having a fair
market value equal to such excess or in such combination thereof as the
Committee shall determine.
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