<PAGE> 1
As filed with the Securities and Exchange Commission on October 31, 1996.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OCCUPATIONAL HEALTH + REHABILITATION INC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 13-3464527
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
175 Derby Street, Suite 36
Hingham, MA 02043
(617) 741-5175
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
Occupational Health + Rehabilitation Inc
1996 Stock Plan
(FULL TITLE OF THE PLAN)
John C. Garbarino
President and Chief Executive Officer
Occupational Health + Rehabilitation Inc
175 Derby Street, Suite 36
Hingham, MA 02043
(617) 741-5175
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
Copy to:
Donna L. Brooks, Esq.
Shipman & Goodwin LLP
One American Row
Hartford, CT 06103
(860) 251-5000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE (1) FEE
------------------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.001...................... 265,000 $4.00 $1,060,000 $321.21
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(h), the proposed maximum offering price per share
is based on the average of the high and low price per share of $4.00 on
October 28, 1996, as reported by the Nasdaq Stock Market.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The Section 10(a) prospectus being delivered by Occupational Health +
Rehabilitation Inc (the "Company") to participants in the Company's 1996 Stock
Plan, as required by Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"), has been prepared in accordance with the requirements of Form
S-8 and relates to shares of Common Stock, par value $.001 per share, issued or
reserved for issuance pursuant to awards granted under the 1996 Stock Plan. The
information with respect to awards granted under the 1996 Stock Plan required in
the Section 10(a) prospectus is included in documents being maintained and
delivered by the Company as required by Rule 428 under the Securities Act. The
Company shall provide to participants a written statement advising them of the
availability without charge, upon written or oral request, of documents
incorporated by reference herein, as is required by Item 2 of Part I of Form
S-8.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
registration statement:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 and June 30, 1996; the Company's Current Report on Form
8-K, as amended, dated June 6, 1996; the Company's Current Report on Form 8-K
dated September 11, 1996; and the Company's Current Report on Form 8-K dated
September 24, 1996;
(c) The description of the registrant's Common Stock contained in its
registration statement on Form 8-A relating to such Common Stock effective on
May 10, 1993, which registration statement was amended on Form 8-A/A filed on
May 24, 1993, and any amendment or report filed for the purpose of further
updating such description.
All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be part thereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this registration
statement shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
This Item is not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
This Item is not applicable.
II-1
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
and provisions of the registrant's Restated Certificate of Incorporation and
Restated Bylaws, as amended, permit, under certain circumstances and subject to
certain limitations, the indemnification by the registrant of any present or
former director or officer of the registrant against expenses, judgments, fines
and settlement amounts incurred by such person in connection with any threatened
or actual action, suit or proceeding against such person by reason of being or
having been a director or officer of the registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
This Item is not applicable.
ITEM 8. EXHIBITS.
Exhibit No. Description
4.1 Restated Certificate of Incorporation (Filed as Exhibit 4.1
to Form 8-K/A dated June 6, 1996, File No. 0-21428). (1)
4.2 Restated Bylaws (Filed as Exhibit 3.02 to Form 10-Q for the
quarter ended June 30, 1996, File No. 0-21428). (1)
5.1 Opinion of Shipman & Goodwin LLP as to the legality of the
securities being registered. (2)
23.1 Consent of Shipman & Goodwin LLP (included in Exhibit 5.1).
(2)
23.2 Consent of Ernst & Young LLP. (2)
24.1 Power of Attorney (contained on pages II-5 and II-6 of this
registration statement). (2)
99.1 The registrant's 1996 Stock Plan. (2)
- --------------------------
(1) Incorporated by reference.
(2) Filed herewith.
II-2
<PAGE> 5
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (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. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the 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 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.
(3) To remove from registration by means of 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
II-3
<PAGE> 6
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 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
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.
II-4
<PAGE> 7
SIGNATURES
Pursuant to 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 City of Hingham, State of Massachusetts, on October 28, 1996.
OCCUPATIONAL HEALTH + REHABILITATION INC
By: /s/ John C. Garbarino
---------------------
John C. Garbarino,
President and Chief Executive Officer
POWER OF ATTORNEY
Know All Persons by These Presents, that each person whose signature
appears below constitutes and appoints John C. Garbarino and Kathryn G.
Converse, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power 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 same, with all exhibits thereto, and other documents in connection
therewith, with full power and authority to do and perform each and every act
and thing requisite or 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 any of
them, of their or his or her substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
-------------------
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 dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/John C. Garbarino President, Chief Executive Officer, October 28, 1996
--------------------------- Treasurer, Secretary and
JOHN C. GARBARINO Director (principal executive
officer and principal financial
officer)
/s/Kathryn G. Converse Controller and Assistant Secretary October 28, 1996
-----------------------------
KATHRYN G. CONVERSE
/s/Charles L. Dimmler, III Director October 28, 1996
-----------------------------
CHARLES L. DIMMLER, III
/s/Kevin J. Dougherty Director October 28, 1996
-----------------------------
KEVIN J. DOUGHERTY
</TABLE>
II-5
<PAGE> 8
<TABLE>
<S> <C> <C>
/s/Angus M. Duthie Director October 28, 1996
-----------------------------
ANGUS M. DUTHIE
Director October __, 1996
-----------------------------
JOHN K. HERDKLOTZ, PH.D.
/s/Paul D. Paganucci Director October 28, 1996
-----------------------------
PAUL D. PAGANUCCI
/s/Craig C. Taylor Director October 28, 1996
-----------------------------
CRAIG C. TAYLOR
</TABLE>
II-6
<PAGE> 9
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
5.1 Opinion of Shipman & Goodwin LLP as to the
legality of the securities being registered.
23.1 Consent of Shipman & Goodwin LLP (included in
Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (contained on pages II-5 and
II-6 of this registration statement).
99.1 The registrant's 1996 Stock Plan.
<PAGE> 1
Exhibit 5.1
October 31, 1996
Board of Directors
Occupational Health + Rehabilitation Inc
175 Derby Street, Suite 36
Hingham, MA 02043
Re: Registration Statement on Form S-8
Relating to Shares of Common Stock of Occupational
Health + Rehabilitation Inc Issuable under Its
1996 Stock Plan
To Members of the Board:
As counsel for Occupational Health + Rehabilitation Inc, a Delaware
corporation (the "Company"), we are furnishing you with this opinion in
connection with the issuance of a maximum of 265,000 shares of Common Stock of
the Company (the "Shares") pursuant to the above-referenced Plan (the "Plan"),
to which the above-referenced Registration Statement relates.
We have examined the Registration Statement and such originals or
copies of corporate records of the Company, certificates of public officials and
of officers of the Company and other documents, have obtained such assurances
from officers and representatives of the Company, have made such other factual
inquiries, and have made such examination of law, as we have deemed proper and
necessary to enable us to render this opinion.
Based on the foregoing, it is our opinion that when the Registration
Statement shall have become effective, and the Shares shall have been issued and
delivered against payment therefor as contemplated by the Plan and said
Registration Statement, the Shares will be legally and validly issued, fully
paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission.
Very truly yours,
Shipman & Goodwin LLP
<PAGE> 1
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1996 Stock Plan of Occupational Health +
Rehabilitation Inc of our report dated January 23, 1996, with respect to the
consolidated financial statements of Occupational Health + Rehabilitation Inc
included in the Current Report on Form 8-K/A dated June 6,1996, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Boston, Massachusetts
October 29, 1996
<PAGE> 1
Exhibit 99.1
OCCUPATIONAL HEALTH + REHABILITATION INC
1996 STOCK PLAN
SECTION 1. PURPOSE
The purpose of the 1996 Stock Plan (the "Plan") is to secure for
Occupational Health + Rehabilitation Inc (the "Company"), its parent (if any)
and any subsidiaries of the Company (collectively the "Related Companies") the
benefits arising from capital stock ownership by those employees, directors,
officers and consultants of the Company and any Related Companies who will be
responsible for the Company's future growth and continued success.
The Plan will provide a means whereby (a) employees of the Company and
any Related Companies may purchase stock in the Company pursuant to options
which qualify as "incentive stock options" ("Incentive Stock Options") under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), (b)
directors, employees and consultants of the Company and any Related Companies
may purchase stock in the Company pursuant to options granted hereunder which do
not qualify as Incentive Stock Options ("Non-Qualified Option" or "Non-Qualified
Options"); (c) directors, employees and consultants of the Company and any
Related Companies may be awarded stock in the Company ("Awards"); and (d)
directors, employees and consultants of the Company and any Related Companies
may receive stock appreciation rights ("SARs"). Both Incentive Stock Options and
Non-Qualified Options are referred to hereafter individually as an "Option" and
collectively as "Options." As used herein, the terms "parent" and "subsidiary"
mean "parent corporation" and "subsidiary corporation" as those terms are
defined in Section 424 of the Code. Options, Awards and SARs are referred to
hereafter individually as a "Plan Benefit" and collectively as "Plan Benefits."
Directors, employees and consultants of the Company and any Related Companies
are referred to herein as "Participants."
SECTION 2. ADMINISTRATION
2.1 BOARD OF DIRECTORS AND THE COMMITTEE. The Plan will be administered
by the Board of Directors of the Company whose construction and interpretation
of the terms and provisions hereof shall be final and conclusive. Any director
to whom a Plan Benefit is awarded shall be ineligible to vote upon his or her
Plan Benefit, but Plan Benefits may be granted to any such director by a vote of
the remainder of the directors, except as limited below. The Board of Directors
may in its sole discretion grant Options, issue shares upon exercise of such
Options, grant Awards and grant SARs all as provided in the Plan. The Board of
Directors shall have authority, subject to the express provisions of the Plan,
to construe the Plan and its related agreements, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the terms and
provisions of the respective Option, Award and SAR agreements, which
<PAGE> 2
need not be identical, and to make all other determinations in the judgment of
the Board of Directors necessary or desirable for the administration of the
Plan. The Board of Directors may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any related agreement in the
manner and to the extent it shall deem expedient to carry the Plan into effect
and it shall be the sole and final judge of such expediency. No director shall
be liable for any action or determination made in good faith. The Board of
Directors may delegate any or all of its powers under the Plan to a Compensation
Committee or other Committee (the "Committee") appointed by the Board of
Directors consisting of at least two members of the Board of Directors. If Plan
Benefits are to be approved solely by a Committee, the members of the Committee
shall at all times be: (i) "outside directors" as that term is defined in Treas.
Reg. Section 1.162-27(e)(3) (or any successor regulation); and (ii) "non-
employee directors" within the meaning of Rule 16b-3 (or any successor rule)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
such terms are interpreted from time to time. If the Committee is so appointed,
all references to the Board of Directors herein shall mean and relate to
such Committee, unless the context otherwise requires.
2.2 COMPLIANCE WITH SECTION 162(m) OF THE CODE. Section 162(m) of the
Code generally limits the tax deductibility to publicly held companies of
compensation in excess of $1,000,000 paid to certain "covered employees"
("Covered Employees"). It is the Company's intention to preserve the
deductibility of such compensation to the extent it is reasonably practicable
and to the extent it is consistent with the Company's compensation objectives.
For purposes of this Plan, Covered Employees of the Company shall be those
employees of the Company described in Section 162(m)(3) of the Code.
SECTION 3. ELIGIBILITY
3.1 INCENTIVE STOCK OPTIONS. Participants who are employees shall be
eligible to receive Incentive Stock Options pursuant to the Plan; provided that
no person shall be granted any Incentive Stock Option under the Plan who, at the
time such Option is granted, owns, directly or indirectly, Common Stock of the
Company possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of its Related Companies, unless the
requirements of Section 6.6(b) hereof are satisfied. In determining whether this
10% threshold has been reached, the stock attribution rules of Section 424(d) of
the Code shall apply. Directors who are not regular employees are not eligible
to receive Incentive Stock Options.
3.2 NON-QUALIFIED OPTIONS, AWARDS AND SARs. Non-Qualified Options,
Awards and SARs may be granted to any Participant.
3.3 GENERALLY. The Board of Directors may take into consideration a
Participant's individual circumstances in determining whether to grant an
Incentive Stock Option, a Non-Qualified Option, an Award or an SAR. Granting of
any Option, Award or SAR for any individual shall neither entitle that
individual to, nor disqualify that individual from, participation in any other
grant of Plan Benefits.
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<PAGE> 3
SECTION 4. STOCK SUBJECT TO PLAN
Subject to adjustment as provided in Sections 9 and 10 hereof, the
stock to be offered under the Plan shall consist of shares of the Company's
Common Stock, $.001 par value, and the maximum number of shares which will be
reserved for issuance, and in respect of which Plan Benefits may be granted
pursuant to the provisions of the Plan, shall not exceed in the aggregate
265,000 shares. Such shares may be authorized and unissued shares, treasury
shares or shares purchased on the open market. If an Option or SAR granted
hereunder shall expire or terminate for any reason without having been exercised
in full, or if the Company shall reacquire any unvested shares issued pursuant
to Awards, the unpurchased shares subject thereto and any unvested shares so
reacquired shall again be available for subsequent grants of Plan Benefits under
the Plan. Stock issued pursuant to the Plan may be subject to such restrictions
on transfer, repurchase rights or other restrictions as shall be determined by
the Board of Directors.
SECTION 5. GRANTING OF OPTIONS, SARs AND AWARDS
Plan Benefits may be granted under the Plan at any time after October
22, 1996 (the date of approval of the Plan by the Board of Directors) and prior
to October 22, 2006; provided, however, that nothing in the Plan shall be
construed to obligate the Company to grant Plan Benefits to a Participant or
anyone claiming under or through a Participant. The date of grant of Plan
Benefits under the Plan will be the date specified by the Board of Directors at
the time the Board of Directors grants such Plan Benefits; provided, however,
that such date shall not be prior to the date on which the Board of Directors
takes such action. The Board of Directors shall have the right, with the consent
of a Participant, to convert an Incentive Stock Option granted under the Plan to
a Non-Qualified Option pursuant to Section 6.7. Plan Benefits may be granted
alone or in addition to other grants under the Plan.
SECTION 6. SPECIAL PROVISIONS APPLICABLE TO OPTIONS AND SARs
6.1 PURCHASE PRICE AND SHARES SUBJECT TO OPTIONS AND SARs.
(a) The purchase price per share of Common Stock deliverable
upon the exercise of an Option shall be determined by the Board of
Directors; provided, however, that (i) in the case of an Incentive
Stock Option, the exercise price shall not be less than 100% of the
fair market value of such Common Stock on the day the Option is granted
(except as modified in Section 6.6(b) hereof), and (ii) in the case of
a Non-Qualified Option, the exercise price shall not be less than 50%
of the fair market value on the day such Option is granted.
(b) Options granted under the Plan may provide for the payment
of the exercise price by delivery of (i) cash or a check payable to the
order of the Company in an amount equal to the exercise price of such
Options, (ii) shares of Common Stock of the
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<PAGE> 4
Company owned by the Participant having a fair market value equal in
amount to the exercise price of the Options being exercised, or (iii)
any combination of (i) and (ii). The fair market value of any shares of
the Company's Common Stock which may be delivered upon exercise of an
Option shall be determined by the Board of Directors. The Board of
Directors may also permit Participants, either on a selective or
aggregate basis, to simultaneously exercise Options and sell the shares
of Common Stock thereby acquired, pursuant to a brokerage or similar
arrangement, approved in advance by the Board of Directors, and to use
the proceeds from such sale as payment of the purchase price of such
shares.
(c) If, at the time an Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes
discussed in this sentence are available prior to the date such Option
is granted (the "Determination Date") and shall mean (i) the average
(on the Determination Date) of the high and low prices of the Common
Stock on the principal national securities exchange on which the Common
Stock is traded, if such Common Stock is then traded on a national
securities exchange; (ii) the last reported sale price (on the
Determination Date) of the Common Stock on The Nasdaq Stock Market if
the Common Stock is not then traded on a national securities exchange;
or (iii) the closing bid price (or average of bid prices) last quoted
(on the Determination Date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on The
Nasdaq Stock Market. However, if the Common Stock is not publicly
traded at the time an Option is granted under the Plan, "fair market
value" shall be deemed to be the fair value of the Common Stock as
determined by the Board of Directors after taking into consideration
all factors which it deems appropriate, including, without limitation,
recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
(d) The maximum number of shares with respect to which Options
or SARs may be granted to any employee, including any cancellations or
repricings which may occur, shall be limited to 200,000 shares in any
calendar year.
6.2 DURATION OF OPTIONS AND SARs. Subject to Section 6.6(b) hereof,
each Option and SAR and all rights thereunder shall be expressed to expire on
such date as the Board of Directors may determine, but in no event later than
ten years from the day on which the Option or SAR is granted and shall be
subject to earlier termination as provided herein.
6.3 EXERCISE OF OPTIONS AND SARs.
(a) Subject to Section 6.6(b) hereof, each Option and SAR
granted under the Plan shall be exercisable at such time or times and
during such period as shall be set forth in the instrument evidencing
such Option or SAR, with vesting to occur in equal annual installments
over a four-year period unless otherwise approved by the Board of
Directors. To the extent that an Option or SAR is not exercised by a
Participant when it becomes
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<PAGE> 5
initially exercisable, it shall not expire but shall be carried forward
and shall be exercisable, on a cumulative basis, until the expiration
of the exercise period. No partial exercise may be for less than ten
(10) full shares of Common Stock (or its equivalent).
(b) The Board of Directors shall have the right to accelerate
the date of exercise of any installments of any Option or SAR; provided
that the Board of Directors shall not accelerate the exercise date of
any installment of any Option granted to a Participant as an Incentive
Stock Option (and not previously converted into a Non-Qualified Option
pursuant to Section 6.7) if such acceleration would violate the annual
vesting limitation contained in Section 422(d)(1) of the Code, which
provides generally that the aggregate fair market value (determined at
the time the Option is granted) of the stock with respect to which
Incentive Stock Options granted to any Participant are exercisable for
the first time by such Participant during any calendar year (under all
plans of the Company and any Related Companies) shall not exceed
$100,000.
6.4 NONTRANSFERABILITY OF OPTIONS AND SARs. No Option or SAR granted
under the Plan shall be assignable or transferable by the Participant, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution or, with respect to Non-Qualified Options and SARs, pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act ("ERISA") or the rules promulgated
thereunder or unless the Participant's non-qualified stock option agreement
granting such options (the "Non-Qualified Stock Option Agreement") or the
Participant's SAR agreement granting such SARs (the "SAR Agreement") provides
otherwise. Unless otherwise provided by the Non-Qualified Stock Option Agreement
or the SAR Agreement, as applicable, during the life of the Participant, the
Option or SAR shall be exercisable only by him or her. If any Participant should
attempt to dispose of or encumber his or her Options or SARs, other than in
accordance with the applicable terms of a Non-Qualified Stock Option Agreement
or SAR Agreement, his or her interest in such Options or SARs shall terminate.
6.5 EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH ON OPTIONS AND SARs.
(a) If a Participant ceases to be employed by the Company or a
Related Company for any reason, including retirement but other than
death, any Option or SAR granted to such Participant under the Plan
shall immediately terminate; provided, however, that any portion of
such Option or SAR which was otherwise exercisable on the date of
termination of the Participant's employment may be exercised within the
three-month period following the date on which the Participant ceased
to be so employed, but in no event after the expiration of the exercise
period. Any such exercise may be made only to the extent of the number
of shares subject to the Option or SAR which were purchasable or
exercisable on the date of such termination of employment. If the
Participant dies during such three-month period, the Option or SAR
shall be exercisable by the Participant's personal representatives,
heirs or legatees to the same extent and during the same period that
the Participant could have exercised the Option or SAR on the date of
his or her death.
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<PAGE> 6
(b) If the Participant dies while an employee of the Company
or any Related Company, any Option or SAR granted to such Participant
under the Plan shall be exercisable by the Participant's personal
representatives, heirs or legatees, for the purchase of or exercise
relative to that number of shares and to the same extent that the
Participant could have exercised the Option or SAR on the date of his
or her death. The Option or SAR or any unexercised portion thereof
shall terminate unless so exercised prior to the earlier of the
expiration of six months from the date of such death or the expiration
of the exercise period.
6.6 DESIGNATION OF INCENTIVE STOCK OPTIONS; LIMITATIONS. Options
granted under the Plan which are intended to be Incentive Stock Options
qualifying under Section 422 of the Code shall be designated as Incentive Stock
Options and shall be subject to the following additional terms and conditions:
(a) Dollar Limitation. The aggregate fair market value
(determined at the time the option is granted) of the Common Stock for
which Incentive Stock Options are exercisable for the first time during
any calendar year by any person under the Plan (and all other incentive
stock option plans of the Company and any Related Companies) shall not
exceed $100,000. In the event that Section 422(d)(1) of the Code is
amended to alter the limitation set forth therein so that following
such amendment such limitation shall differ from the limitation set
forth in this Section 6.6(a), the limitation of this Section 6.6(a)
shall be automatically adjusted accordingly.
(b) 10% Shareholder. If any Participant to whom an Incentive
Stock Option is to granted pursuant to the provisions of the Plan is on
the date of grant the owner of stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or
any Related Companies, then the following special provisions shall be
applicable to the Incentive Stock Option granted to such individual:
(i) The option price per share of the Common Stock
subject to such Incentive Stock Option shall not be less than
110% of the fair market value of one share of Common Stock on
the date of grant; and
(ii) The option exercise period shall not exceed five
years from the date of grant.
In determining whether the 10% threshold has been reached, the stock
attribution rules of Section 424(d) of the Code shall apply.
(c) Except as modified by the preceding provisions of this
Section 6.6, all of the provisions of the Plan shall be applicable to
Incentive Stock Options granted hereunder.
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6.7 CONVERSION OF INCENTIVE STOCK OPTIONS INTO NON-QUALIFIED OPTIONS;
TERMINATION OF INCENTIVE STOCK OPTIONS. The Board of Directors, at the written
request of any Participant, may in its discretion take such actions as may be
necessary to convert such Participant's Incentive Stock Options (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such Incentive Stock Options, regardless of whether the
Participant is an employee of the Company or a Related Company at the time of
such conversion. Such actions may include, but not be limited to, extending the
exercise period or reducing the exercise price of the appropriate installments
of such Options. At the time of such conversion, the Board of Directors (with
the consent of the Participant) may impose such conditions on the exercise of
the resulting Non-Qualified Options as the Board of Directors in its discretion
may determine, provided that such conditions shall not be inconsistent with the
Plan. Nothing in the Plan shall be deemed to give any Participant the right to
have such Participant's Incentive Stock Options converted into Non-Qualified
Options, and no such conversion shall occur until and unless the Board of
Directors takes appropriate action. The Board of Directors, with the consent of
the Participant, may also terminate any portion of any Incentive Stock Option
that has not been exercised at the time of such termination.
6.8 STOCK APPRECIATION RIGHTS. An SAR is the right to receive, without
payment, an amount equal to the excess, if any, of the fair market value of a
share of Common Stock on the date of exercise over the grant price, which amount
will be multiplied by the number of shares with respect to which the SARs shall
have been exercised. The grant of SARs under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the express terms of the Plan, as the Board of
Directors shall deem desirable:
(a) Grant. SARs may be granted in tandem with, in addition to or
completely independent of any Plan Benefit.
(b) Grant Price. The grant price of an SAR may be the fair market value
of a share of Common Stock on the date of grant or such other price as the Board
of Directors may determine.
(c) Exercise. An SAR may be exercised by a Participant in accordance
with procedures established by the Board of Directors or as otherwise provided
in any agreement evidencing any SARs. The Board of Directors may provide that an
SAR shall be automatically exercised on one or more specified dates.
(d) Form of Payment. Payment upon exercise of an SAR may be made in
cash, in shares of Common Stock or any combination thereof, as the Board of
Directors shall determine, provided, however, that any SAR exercised upon or
subsequent to the occurrence of a Change in Control (as defined in Section 10(b)
hereof) shall be paid in cash.
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(e) Fair Market Value. Fair market value shall be determined in
accordance with Section 6.1(c) with the "Determination Date" being determined by
reference to the date of grant or the date of exercise of an SAR, as applicable.
6.9 RIGHTS AS A STOCKHOLDER. The holder of an Option or SAR shall have
no rights as a stockholder with respect to any shares covered by the Option or
SAR until the date of issue of a stock certificate to him or her for such
shares. Except as otherwise expressly provided in the Plan, no adjustment shall
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.
6.10 SPECIAL PROVISIONS APPLICABLE TO NON-QUALIFIED OPTIONS AND SARs
GRANTED TO COVERED EMPLOYEES. In order for the full value of Non-Qualified
Options or SARs granted to Covered Employees to be deductible by the Company for
federal income tax purposes, the Company may intend for such Non-Qualified
Options or SARs to be treated as "qualified performance-based compensation" as
described in Treas. Reg. Section 1.162-27(e) (or any successor regulation). In
such case, Non-Qualified Options or SARs granted to Covered Employees shall be
subject to the following additional requirements:
(a) such options and rights shall be granted only by the
Committee; and
(b) the exercise price of such Options and the grant price of
such SARs granted shall in no event be less than the fair market value
of the Common Stock as of the date of grant of such Options or SARs.
SECTION 7. SPECIAL PROVISIONS APPLICABLE TO AWARDS
7.1 GRANTS OF AWARDS. The Board of Directors may grant a Participant an
Award subject to such terms and conditions as the Board of Directors deems
appropriate, including, without limitation, restrictions on the pledging, sale,
assignment, transfer or other disposition of such shares and the requirement
that the Participant forfeit all or a portion of such shares back to the Company
upon termination of employment.
7.2 CONDITIONS. Approvals of Awards may be subject to the following
conditions:
(a) Each Participant receiving an Award shall enter into an
agreement (a "Stock Restriction Agreement") with the Company, if
required by the Board of Directors, in a form specified by the Board of
Directors agreeing to such terms and conditions of the Award as the
Board of Directors deems appropriate.
(b) Shares issued and transferred to a Participant pursuant to
an Award may, if required by the Board of Directors, be deposited with
the Treasurer or other officer of the Company designated by the Board
of Directors to be held until the lapse of the restrictions upon such
shares, and each Participant shall execute and deliver to the Company
stock powers enabling the Company to exercise its rights hereunder.
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(c) Certificates for shares issued pursuant to an Award shall,
if the Company shall deem it advisable, bear a legend to the effect
that they are issued subject to specified restrictions.
(d) Certificates representing the shares issued pursuant to an
Award shall be registered in the name of the Participant and shall be
owned by such Participant. Such Participant shall be the holder of
record of such shares for all purposes, including voting and receipt of
dividends paid with respect to such shares.
(e) If required by the Board of Directors, no Participant
receiving an Award shall make, in connection with such Award, the
election permitted under Section 83(b) of the Code.
7.3 NONTRANSFERABILITY. Shares issued pursuant to an Award may not be
sold, assigned, transferred, alienated, commuted, anticipated, or otherwise
disposed of (except, subject to the provisions of such Participant's Stock
Restriction Agreement, by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of ERISA or the rules promulgated thereunder), or pledged or hypothecated as
collateral for a loan or as security for the performance of any obligation, or
be otherwise encumbered, and are not subject to attachment, garnishment,
execution or other legal or equitable process, prior to the lapse of
restrictions on such shares, and any attempt at action in contravention of this
Section shall be null and void. If any Participant should attempt to dispose of
or encumber his or her shares issued pursuant to an Award prior to the lapse of
the restrictions imposed on such shares, his or her interest in such shares
shall terminate.
7.4 EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH ON AWARDS. If, prior
to the lapse of restrictions applicable to Awards, the Participant ceases to be
an employee of the Company or the Related Companies for any reason, Awards to
such Participant, as to which restrictions have not lapsed, shall be forfeited
to the Company, effective on the date of the Participant's termination of
employment. The Board of Directors shall have the sole power to decide in each
case to what extent leaves of absence shall be deemed a termination of
employment.
SECTION 8. REQUIREMENTS OF LAW
8.1 VIOLATIONS OF LAW. No shares shall be issued and delivered upon
exercise of any Option or the making of any Award or the payment of any SAR
unless and until, in the opinion of counsel for the Company, any applicable
registration requirements of the Securities Act of 1933, any applicable listing
requirements of any national securities exchange on which stock of the same
class is then listed, and any other requirements of law or of any regulatory
bodies having jurisdiction over such issuance and delivery, shall have been
fully complied with. Each Participant may, by accepting Plan Benefits, be
required to represent and agree in writing, for himself or
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herself and for his or her transferees by will or the laws of descent and
distribution, that the stock acquired by him, her or them is being acquired for
investment. The requirement for any such representation may be waived at any
time by the Board of Directors.
8.2 COMPLIANCE WITH RULE 16b-3. The intent of this Plan is to qualify
for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent
any provision of the Plan does not comply with the requirements of Rule 16b-3,
it shall be deemed inoperative to the extent permitted by law and deemed
advisable by the Board of Directors and shall not affect the validity of the
Plan. In the event Rule 16b-3 is revised or replaced, the Board of Directors may
exercise discretion to modify this Plan in any respect necessary to satisfy the
requirements of the revised exemption or its replacement.
SECTION 9. RECAPITALIZATION
In the event that dividends are payable in Common Stock of the Company
or in the event there are splits, sub-divisions or combinations of shares of
Common Stock of the Company, the number of shares available under the Plan shall
be increased or decreased proportionately, as the case may be, and the number of
shares deliverable upon the exercise thereafter of any Option previously granted
shall be increased or decreased proportionately, as the case may be, without
change in the aggregate purchase price, and the number of shares to which
granted SARs relate shall be increased or decreased proportionately, as the case
may be, and the grant price of such SARs shall be decreased or increased
proportionately, as the case may be.
SECTION 10. CHANGE IN CONTROL AND REORGANIZATION
(a) For purposes of this Plan, a "Change in Control" shall
mean (i) the acquisition by a third person, including a "person" as
defined in Section 13(d)(3) of the Exchange Act, of beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly, of securities of the Company representing twenty-five
percent (25%) or more of the total number of votes that may be cast for
the election of the directors of the Company; or (ii) as the result of,
or in connection with, any tender or exchange offer, merger,
consolidation or other business combination, sale of assets or one or
more contested elections, or any combination of the foregoing
transactions, the persons who were directors of the Company shall cease
to constitute a majority of the Board of the Company. In the event of a
Change in Control of the Company, except as the Board of Directors may
expressly provide otherwise at the time of the Change in Control or in
a Participant's agreement governing an Option, Award or SAR, (i)
vesting of Options and SARs shall accelerate such that (1) upon the
Change in Control, the Participant would be entitled to exercise his or
her Options and/or SARs to the extent of 50% of the number of shares
not otherwise exercisable at the time of the Change in Control, (2)
beginning six months after the Change in Control, the Participant would
be entitled to exercise his or her Options and/or SARs to the extent of
an additional 25% of the number of shares not
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otherwise exercisable at the time of the Change in Control, and (3)
beginning eighteen months after the Change in Control, the Participant
would be entitled to exercise his or her Options and/or SARs to the
extent of an additional 25% of the number of shares not otherwise
exercisable at the time of the Change in Control; in each case, unless
such Options and/or SARs would vest sooner pursuant to the terms of
their original grant, in which case they shall vest at such earlier
date, but in no event will Options or SARs vest prior to six months
from the date of grant; and (ii) a Participant who is an officer of the
Company (including the controller) who is terminated other than for
cause or who resigns because of a significant diminution of his or her
duties and responsibilities, in either case within 180 days before a
Change in Control or within eighteen months after a Change in Control
and in conjunction with such Change in Control, shall be entitled to
exercise his or her Options and/or SARs to the extent of 100% of the
number of shares covered thereby. For purposes of this Plan, "cause"
shall mean (x) conviction of a felony, (y) commission of an act of
fraud or embezzlement against the Company or the commission of any
other action with the intent to injure the Company, and (z) material
misconduct in the performance of the Participant's duties or any
material neglect of his or her duties to the Company.
(b) In the case of any tender or exchange offer, merger,
consolidation or other business combination or sale of all or
substantially all of the assets of the Company, which does not
constitute a Change in Control, or in the case of a reorganization or
liquidation of the Company, the Board of Directors of the Company, or
the board of directors of any corporation assuming the obligations of
the Company hereunder, shall, as to outstanding Plan Benefits, (i) make
appropriate provision for the protection of any such outstanding Plan
Benefits by the substitution on an equitable basis of appropriate stock
of the Company or of the merged, consolidated or otherwise reorganized
corporation which will be issuable in respect of the shares of Common
Stock of the Company; provided only that the excess of the aggregate
fair market value of the shares subject to the Plan Benefits
immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of the
shares subject to such Plan Benefits immediately before such
substitution over the purchase price thereof, (ii) upon written notice
to the Participants, provide that all unexercised Plan Benefits must be
exercised within a specified number of days of the date of such notice
or such Plan Benefits will be terminated, or (iii) upon written notice
to the Participants, provide that the Company or the merged,
consolidated or otherwise reorganized corporation shall have the right,
upon the effective date of any such merger, consolidation, sale of
assets or reorganization, to purchase all Plan Benefits held by each
Participant and unexercised as of that date at an amount equal to the
aggregate fair market value on such date of the shares subject to the
Plan Benefits held by such Participant over the aggregate purchase or
grant price therefor, such amount to be paid in cash or, if stock of
the merged, consolidated or otherwise reorganized corporation is
issuable in respect of the shares of the Common Stock of the Company,
then, in the discretion of the Board of Directors, in stock of such
merged, consolidated or otherwise reorganized corporation equal in fair
market value to the aforesaid amount. In any such case the Board of
Directors shall, in good faith, determine
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<PAGE> 12
fair market value and may, in its discretion, advance the lapse of any
waiting or installment periods and exercise dates.
SECTION 11. NO SPECIAL EMPLOYMENT RIGHTS
Nothing contained in the Plan or in any Plan Benefit documentation
shall confer upon any Participant receiving a grant of any Plan Benefit any
right with respect to the continuation of his or her employment by the Company
(or any Related Company) or interfere in any way with the right of the Company
(or any Related Company), subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Participant from the rate in
existence at the time of the grant of any Plan Benefit. Whether an authorized
leave of absence or absence in military or government service shall constitute
termination of employment shall be determined by the Board of Directors, in
accordance with any applicable laws.
SECTION 12. AMENDMENT OF THE PLAN
The Board of Directors may at any time and from time to time suspend or
terminate all or any portion of the Plan or modify or amend the Plan in any
respect. The termination or any modification or amendment of the Plan shall not,
without the consent of a recipient of any Plan Benefit, affect his or her rights
under any Plan Benefit previously granted. With the consent of the affected
Participant, the Board of Directors may amend outstanding agreements relating to
any Plan Benefit in a manner not inconsistent with the Plan. The Board of
Directors hereby reserves the right to amend or modify the terms and provisions
of the Plan and of any outstanding Options to the extent necessary to qualify
any or all Options under the Plan for such favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code, provided, however, that
the consent of a Participant is required if such amendment or modification would
cause unfavorable income tax treatment for such Participant.
SECTION 13. WITHHOLDING
The Company's obligation to deliver shares of stock upon the exercise
of any Option or SAR or the granting of an Award and to make payment upon
exercise of any SAR shall be subject to the satisfaction by the Participant of
all applicable federal, state and local income and employment tax withholding
requirements.
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SECTION 14. EFFECTIVE DATE AND DURATION OF THE PLAN
14.1 EFFECTIVE DATE. The Plan shall become effective as of October 22,
1996 (the date of approval of the Plan by the Board of Directors), but no
Incentive Stock Option granted under the Plan shall become exercisable unless
and until the Plan shall have been approved by the Company's stockholders. If
such stockholder approval is not obtained within 12 months after the date of the
Board's adoption of the Plan, then any Incentive Stock Options previously
granted under the Plan shall terminate, and no further Incentive Stock Options
shall be granted. Subject to such limitation, Options, SARs and Awards may be
granted under the Plan at any time after the effective date and before the date
fixed herein for termination of the Plan.
14.2 DURATION. Unless sooner terminated in accordance with Section 10
hereof, the Plan shall terminate upon the earlier of (i) the tenth anniversary
of the effective date or (ii) the date on which all shares available for
issuance under the Plan shall have been issued pursuant to any Awards or the
exercise or cancellation of Options and SARs granted hereunder. If the date of
termination is determined under (i) above, then Plan Benefits outstanding on
such date shall continue to have force and effect in accordance with the
provisions of the instruments evidencing such Plan Benefits.
SECTION 15. GOVERNING LAW
The Plan and all actions taken thereunder shall be governed by the laws
of the State of Delaware.
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