<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to __________
Commission file number: 0-21428
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, Massachusetts 02043
(Address of principal executive offices)
(Zip code)
(617) 741-5175
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days. Yes X No .
--- ---
The number of shares outstanding of the registrant's Common Stock as of
June 30, 1996 was 1,467,417.
<PAGE> 2
OCCUPATIONAL HEALTH + REHABILITATION INC
Quarterly Report on Form 1O-Q
For the Quarter Ended June 30, 1996
TABLE OF CONTENTS
Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets ................................... 3
Consolidated Statements of Operations.......................... 5
Consolidated Statements of Cash Flows.......................... 7
Notes to Consolidated Financial Statements..................... 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation................... 11
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders........................................................ 16
Item 6. Exhibits and Reports on Form 8-K................................. 16
Signatures .............................................................. 18
-2-
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
OCCUPATIONAL HEALTH + REHABILITATION INC
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $3,502,182 $ 368,959
Accounts receivable, net 617,908 236,875
Prepaid expenses 286,559 103,406
Other accounts receivable 24,368 0
Due from related party 661,153 680,445
Other assets 139,801 166,056
---------- ----------
Total current assets 5,231,971 1,555,741
Property and equipment, net 994,034 1,058,311
Intangible assets, net 1,641,391 1,565,179
Deposits 50,958 40,864
Other assets 412,016 29,167
---------- ----------
Total assets $8,330,370 $4,249,262
========== ==========
LIABILITIES, REDEEMABLE STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $1,275,909 $1,001,768
Current portion of obligations under capital leases 83,259 99,490
Current maturities of long-term debt 436,517 91,667
Current portion of obligations under noncompetition
agreements 308,877 325,000
Due to related party 563,368 377,862
---------- ----------
Total current liabilities 2,667,930 1,895,787
Long-term debt, less current maturities 1,143,326 744,779
Other long-term liabilities 25,016 0
Obligations under capital leases 79,458 122,621
Obligations under noncompetition agreements 0 293,153
---------- ----------
Total liabilities 3,915,730 3,056,340
Minority interest 70,752 201,106
</TABLE>
-3-
<PAGE> 4
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
Redeemable stock:
Redeemable convertible preferred stock, Series 1,
$.01 par value - 1,600,000 shares authorized,
issued and outstanding in 1995; no shares
authorized, issued or outstanding in 1996 0 2,700,000
Redeemable convertible preferred stock, Series 2,
$.01 par value - 3,000,000 shares authorized,
2,537,843 issued and outstanding in 1995; no
shares authorized, issued or outstanding in 1996 0 4,479,221
----------- -----------
Total redeemable stock 0 7,179,221
Stockholders' equity (deficit)
Common stock, $.01 par value - 8,000,000 shares
authorized, issued and outstanding 671,855
shares in 1995 0 6,719
Common stock, $.001 par value - 10,000,000 shares
authorized, issued and outstanding 1,467,417
shares in 1996 1,467 0
Additional paid-in capital 9,835,336 11,022
Accumulated deficit (5,492,915) (6,205,146)
----------- -----------
Total stockholders' equity (deficit) 4,343,888 (6,187,405)
Total liabilities, redeemable stock and stockholders'
equity (deficit)
$ 8,330,370 $ 4,249,262
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-4-
<PAGE> 5
OCCUPATIONAL HEALTH + REHABILITATION INC
Consolidated Statements of Operations
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended June 30,
---------------------------
1996 1995
---- ----
<S> <C> <C>
Net patient service revenue $ 2,072,414 $ 1,489,219
Management fee income 41,528 21,722
Other (expense) income (2,323) 17,142
----------- -----------
Total revenue 2,111,619 1,528,083
Operating and administrative expenses (2,309,465) (1,786,427)
Depreciation and amortization (100,096) (72,386)
Interest expense (69,261) (15,963)
Interest income 11,958 3,443
Minority interest in net loss of subsidiary 52,553 71,056
----------- -----------
Net loss before income taxes (302,692) (272,194)
Income taxes 0 0
----------- -----------
Net loss $ (302,692) $ (272,194)
=========== ===========
Net loss per share $ (0.34) $ (0.41)
=========== ===========
Weighted average common shares and common share
equivalents outstanding 888,719 660,779
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-5-
<PAGE> 6
OCCUPATIONAL HEALTH + REHABILITATION INC
Consolidated Statements of Operations
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1996 1995
---- ----
<S> <C> <C>
Net patient service revenue $ 4,009,010 $ 2,322,837
Management fee income 80,652 38,475
Other income 266 17,142
----------- -----------
Total revenue 4,089,928 2,378,454
Operating and administrative expenses (4,563,070) (3,057,576)
Depreciation and amortization (200,124) (143,955)
Interest expense (129,267) (31,928)
Interest income 11,958 22,733
Minority interest in net loss of subsidiary 130,354 71,056
----------- -----------
Net loss before income taxes (660,221) (761,216)
Income taxes 0 0
----------- -----------
Net loss $ (660,221) $ (761,216)
=========== ===========
Net loss per share $ (0.84) $ (1.19)
=========== ===========
Weighted average common shares and common share
equivalents outstanding 785,053 641,165
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-6-
<PAGE> 7
OCCUPATIONAL HEALTH + REHABILITATION INC
Consolidated Statements of Cash Flows
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (660,221) $ (761,216)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 200,124 143,955
Amortization of discount 15,724 15,334
Minority interest in loss of subsidiary (130,354) (71,056)
Changes in operating assets and liabilities:
Accounts receivable (356,811) (25,730)
Prepaid expenses and other current assets 569 (454,628)
Due from related party, net 204,798 0
Deposits and other noncurrent assets 7,057 (2,644)
Accounts payable and accrued expenses (305,038) 344,872
Other long-term liabilities 25,016 0
----------- -----------
Net cash used in operating activities (999,136) (811,113)
INVESTING ACTIVITIES:
Property and equipment additions (11,874) (25,060)
Additions to goodwill (180,808) 0
Cash received (paid for) acquisitions 4,500,414 (200,990)
----------- -----------
Net cash provided by (used in) investing activities 4,307,732 (226,050)
FINANCING ACTIVITIES:
Proceeds from sale of preferred stock, net 0 599,999
Proceeds from exercise of stock options 688 0
Proceeds from line of credit and loans payable 500,000 0
Payments of long-term debt and other long-term obligations (616,667) (214,619)
Payments of capital lease obligations (59,394) (70,366)
----------- -----------
Net cash (used in) provided by financing activities (175,373) 315,014
----------- -----------
Net increase (decrease) in cash and cash equivalents 3,133,223 (722,149)
Cash and cash equivalents at beginning of period 368,959 1,211,285
----------- -----------
Cash and cash equivalents at end of period $ 3,502,182 $ 489,136
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-7-
<PAGE> 8
OCCUPATIONAL HEALTH + REHABILITATION INC
Notes To Consolidated Financial Statements
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited interim financial statements of Occupational
Health + Rehabilitation Inc (formerly Telor Ophthalmic Pharmaceuticals, Inc.)
(the "Company") have been prepared in accordance with instructions to Form 10-Q
and Rule 10.01 of Regulation S-X pertaining to interim financial information and
disclosures required by generally accepted accounting principles. The interim
financial statements presented herein reflect all adjustments (consisting of
normal recurring adjustments) which, in the opinion of management, are
considered necessary for a fair presentation of the Company's financial
condition as of June 30, 1996 and results of operations for the three months and
six months ended June 30, 1996 and 1995. The results of operations for the six
months ended June 30, 1996 are not necessarily indicative of the results that
may be expected for the full year.
2. Mergers and Acquisitions
Telor Ophthalmic Pharmaceuticals, Inc. Effective June 6, 1996,
Occupational Health + Rehabilitation Inc ("OH+R") merged with (the "Merger")
Telor Ophthalmic Pharmaceuticals, Inc. ("Telor"), with the Company being the
surviving corporation. Telor had historically been involved in the development
of ophthalmic pharmaceuticals. In connection with the Merger, the Company
changed its name to Occupational Health + Rehabilitation Inc and assumed the
business of OH+R. In conjunction with the Merger, the Company issued 681,415
shares of its common stock in exchange for all outstanding shares of OH+R
capital stock. Outstanding options held by employees, directors and consultants
of OH+R to purchase 832,000 shares of OH+R common stock were converted into
options to purchase approximately 117,807 shares of the Company's common stock.
Warrants to purchase 148,150 shares of OH+R common stock now entitle the holders
to acquire 20,975 shares of the Company's common stock.
Effective June 7, 1996, the Company was listed on the Nasdaq SmallCap
Market under the symbol "OHRI."
The Merger was accounted for as a "reverse acquisition" whereby OH+R
was deemed to have acquired Telor for financial reporting purposes. Consistent
with the reverse acquisition accounting treatment, historical financial
statements for the Company for periods prior to the date of the Merger will be
those of OH+R. Under the purchase method of accounting, balances and results of
operations of Telor will be included in the Company's financial statements from
the date of the Merger forward.
-8-
<PAGE> 9
OCCUPATIONAL HEALTH + REHABILITATION INC
Notes To Consolidated Financial Statements (continued)
(UNAUDITED)
The following pro forma information presents a summary of consolidated
results of operations of the Company as if the Merger had occurred at the
beginning of each of the respective periods presented. The pro forma financial
information is not necessarily indicative of the results of operations as they
would have been had the transaction been effected on the assumed dates, or of
future results of operations of the combined entities.
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1996 1995
---- ----
<S> <C> <C>
Total revenue $ 4,089,928 $ 2,378,454
=========== ===========
Net loss $(1,236,022) $(4,056,469)
=========== ===========
Net loss per share $ (.84) $ (2.86)
=========== ===========
</TABLE>
3. Certain Leased Property
In July 1994, Telor entered into a ten-year lease agreement for a
facility in Wilmington, Massachusetts. The Company is conducting no operations
in this facility but is responsible for its share of operating costs of the
facility, including taxes, insurance, maintenance and subject to certain
limitations, repairs. The Company has the right to terminate the lease after
five years and payment of a fee of approximately $60,000. In connection with the
lease, the Landlord financed $600,000 of leasehold improvements. This obligation
is payable in monthly payments of principal and interest of $7,601 through
October 31, 2004. If the Company terminates the lease at the end of five years,
the unpaid balance of the obligation is due on the lease termination date.
The Company is actively seeking to obtain one or more subleases for its
facility in Wilmington, Massachusetts or to terminate the lease by securing one
or more replacement tenants. On May 6, 1996, the Company signed one sublease
agreement. The Company cannot predict if and when a second sublease will be
concluded or that negotiations will result in favorable terms for the Company.
The Company is required to have secured letters of credit aggregating
$360,000 for a portion of the unpaid obligation. The cash which secured the
letters of credit is classified as restricted cash in the accompanying balance
sheets and is included in non-current other assets.
-9-
<PAGE> 10
OCCUPATIONAL HEALTH + REHABILITATION INC
Notes To Consolidated Financial Statements (continued)
(UNAUDITED)
4. Stockholders' Equity
1993 Stock Plan. The Company's 1993 Stock Plan (the "Plan") was
adopted by the board of directors on March 4, 1993, amended on March 5, 1993 and
approved, as amended, by the stockholders on April 8, 1993. The Plan was further
amended by the stockholders on May 10, 1995. Upon consummation of the Merger on
June 6, 1996, the Plan was further amended to increase by 105,000 shares, from
140,000 to 245,000, the aggregate number of shares of the Company's common stock
as to which stock options may be granted under the Plan.
Amended Certificate of Incorporation. In connection with the Merger,
the Company amended its certificate of incorporation to decrease the authorized
number of shares of common stock by 15,000,000 from 25,000,000 to 10,000,000. At
June 30, 1996, 5,000,000 shares of preferred stock, $.001 par value, were
authorized, none of which have been issued.
5. Net Loss per Share
Net loss per share of common stock is computed by dividing net loss by
the weighted-average number of shares of common stock outstanding during each
period presented. The weighted average number of shares outstanding for the
three and six months ended June 30, 1995 is based on the number of OH+R shares
of common stock exchanged for Telor shares (see Note 2) and assumes the
retroactive conversion of OH+R's preferred stock. The effect of options and
warrants is not considered as it would be antidilutive.
6. Subsequent Events
The Company executed a letter of intent dated May 21, 1996 to
purchase 90% of the assets (excluding accounts receivable) of The Health Center,
an ambulatory care facility owned and operated by Advanced Health Services, Inc.
(Seller) located in Lewiston, Maine. The Company and the Seller plan to form a
limited liability company (LLC). The Company plans to contribute to the LLC the
assets purchased from the Seller and the Seller plans to contribute the
remaining 10% of the assets of The Health Center to the LLC. The terms of the
purchase would consist of cash and a promissory note aggregating $140,000 and an
earn out provision to earn up to $100,000 over a period not to exceed eight
years following the closing.
-10-
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Overview
The Company was organized in 1988 to develop ophthalmic
pharmaceuticals. In June 1996, Occupational Health + Rehabilitation Inc ("OH+R")
merged with and into (the "Merger") Telor Ophthalmic Pharmaceuticals, Inc.
("Telor"), with Telor being the surviving corporation (the "Company"). In
connection with the Merger, the Company changed its name to Occupational Health
+ Rehabilitation Inc and assumed the business of OH+R, which is to develop and
operate a network of outpatient centers throughout the Northeast. The
transaction was accounted for as a "reverse acquisition" whereby OH+R was deemed
to have acquired Telor for financial reporting purposes. Consistent with the
reverse acquisition accounting treatment, historical financial statements for
the Company for periods prior to the date of the Merger are those of OH+R.
The Company derives patient service revenue primarily from the
prevention, treatment and management of work-related injuries and illnesses and
from other occupational healthcare services, such as employment-related physical
examinations, drug and alcohol testing, physical and occupational therapy and
other related programs.
The Company's operations have been funded primarily through venture
capital investments. The Company's growth has resulted predominately from
acquisitions and development of businesses principally engaged in occupational
healthcare.
The following table sets forth, for the periods indicated, the relative
percentages which certain items in the Company's consolidated statements of
operations bear to total revenue.
<TABLE>
<CAPTION>
Three Months Ended June 30,
1996 1995
---- ----
<S> <C> <C>
Total revenue.................................. 100.0% 100.0%
Operating and administrative expenses.......... (109.4) (116.9)
Depreciation and amortization.................. (4.7) (4.7)
Interest expense............................... (3.3) (1.0)
Interest income................................ 0.6 0.2
Minority interest in net loss of subsidiary.... 2.5 4.6
----- -----
Loss before income taxes....................... (14.3) (17.8)
Income taxes................................... 0.0 0.0
----- -----
Net loss....................................... (14.3)% (17.8)%
===== =====
</TABLE>
-11-
<PAGE> 12
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
---- ----
<S> <C> <C>
Total revenue.................................. 100.0% 100.0%
Operating and administrative expenses.......... (111.6) (128.6)
Depreciation and amortization.................. (4.9) (6.1)
Interest expense............................... (3.2) (1.3)
Interest income................................ 0.3 1.0
Minority interest in net loss of subsidiary.... 3.2 3.0
----- -----
Loss before income taxes....................... (16.2) (32.0)
Income taxes................................... 0.0 0.0
----- -----
Net loss....................................... (16.2)% (32.0)%
===== =====
</TABLE>
Results of Operations
Three Months Ended June 30, 1996 and 1995
Revenue
Total revenue increased 38.2% to approximately $2,112,000 in the three
months ended June 30, 1996 from approximately $1,528,000 in the same three month
period in 1995. Net patient service revenue increased 39.2% to approximately
$2,072,000 for the three months ended June 30, 1996 from approximately
$1,489,000 in the comparable period in 1995. The increases in net patient
service revenue resulted primarily from physician and physical therapy practices
acquired in 1995 and from increased business in markets where the Company
operated centers during the entire months of both periods. Of the approximately
$583,000 increase in net patient service revenue from the three month period
June 30, 1995 compared to the same period in 1996, approximately $352,000 (60%)
was attributable to new centers acquired in 1995. Approximately $231,000 (40%)
was due to growth in markets where the Company already operated.
Operating and Administrative Expenses
Operating and administrative expenses increased 29.3% to approximately
$2,309,000 in the three months ended June 30, 1996 from approximately $1,786,000
in the same three month period in 1995. This increase was principally due to the
acquisition and development of additional practices. As a percentage of total
revenue, operating and administrative expenses decreased to 109.4% in the
second quarter of 1996 from 116.9% from the second quarter in 1995. The
Company believes that as additional acquisitions are completed,
-12-
<PAGE> 13
further leveraging of existing management will occur, and, as a result,
operating and administrative expenses will further decline as a percentage of
total revenue.
Depreciation and Amortization
Depreciation and amortization expense increased 38.3% to approximately
$100,000 in the three months ended June 30, 1996 from approximately $72,000 in
the same three month period in 1995. These increases were incurred primarily as
a result of the Company's having additional growth through center development
and acquisitions. As a percentage of revenues, these expenses remained constant
at 4.7% from the second quarter of 1995 to the second quarter of 1996.
Interest Expense
Interest expense increased 333.9% to approximately $69,000 in the three
months ended June 30, 1996 from approximately $16,000 in the same three month
period in 1995. The increase from 1995 to 1996 was due to the incurrence of
certain debt as consideration for several acquisitions. Additionally, in June
1995, the Company sold certain medical receivables to provide operating cash and
to pay down certain term loans and notes payable. As a percentage of total
revenue, interest expense was 3.3% in the second quarter of 1996, and 1.0% in
the same quarter of 1995.
Interest Income
Interest income is generated primarily from cash invested in highly
liquid funds with a maturity of three months or less. Interest income increased
247.3% to approximately $12,000 in the quarter ended June 30, 1996 from $3,000
in the same quarter of 1995. The increase was related to additional funds
received by the Company as a result of the merger with Telor.
Minority Interest
Minority interest represents NEB Enterprises, Inc.'s 49% share of the
losses incurred by NEB Occupational Health. For the three months ended June 30,
1996, the minority interest in net loss of subsidiary decreased by 26.0%
compared to the same period in 1995.
Six Months Ended June 30, 1996 and 1995
Revenue
Total revenue increased 72.0% to approximately $4,090,000 in the six
months ended June 30, 1996 from approximately $2,378,000 in the same six month
period in 1995. Net patient service revenue increased 72.6% to approximately
$4,009,000 for the six months ended June 30, 1996 from approximately $2,323,000
in the comparable period in 1995. The increase in net patient service revenue
resulted primarily from physician and physical therapy practices acquired in
1995 and from increased business in markets where the Company operated centers
during the
-13-
<PAGE> 14
entire months of both periods. Of the $1,686,000 increase in net
patient service revenue from the first half of 1995 to the first half of 1996,
approximately $1,236,000 (73%) was attributable to centers acquired in 1995.
Approximately $450,000 (27%) was due to growth in markets where the Company
already operated.
Operating and Administrative Expenses
Operating and administrative expenses increased 49.2% to approximately
$4,563,000 in the six months ended June 30, 1996 from approximately $3,058,000
in the same six month period 1995. This increase was principally due to the
acquisition and development of additional practices. As a percentage of total
revenue, operating and administrative expenses decreased to 111.6% in the first
half of 1996 from 128.6% from the first half in 1995. The Company believes that
as additional acquisitions are completed, further leveraging of existing
management will occur, and, as a result, operating and administrative expenses
will further decline as a percentage of total revenue.
Depreciation and Amortization
Depreciation and amortization expense increased 39.0% to approximately
$200,000 in the six months ended June 30, 1996 from approximately $144,000 in
the same six month period in 1995. This increase was incurred primarily as a
result of the Company's growth through center development and acquisitions. As a
percentage of revenues, these expenses decreased to 4.9% in the first half of
1996 from 6.1% in the comparable period in 1995.
Interest Expense
Interest expense increased 304.9% to approximately $129,000 in the six
months ended June 30, 1996 from approximately $32,000 in the same three month
period in 1995. The increase from 1995 to 1996 was due to the incurrence of
certain debt as consideration for several acquisitions. Additionally, in June
1995, the Company sold certain medical receivables to provide operating cash and
to pay down certain term loans and notes payable. As a percentage of total
revenue, interest expense was 3.2% in the first half of 1996 and 1.3% for the
comparable period of 1995.
Interest Income
Interest income is generated primarily from cash invested in highly
liquid funds with a maturity of three months or less. Interest income decreased
47.4% to approximately $12,000 in the six months ended June 30, 1996 from
$23,000 in the same period of 1995. The decrease was related to the use of cash
to fund the Company's operating losses, debt repayment and cash required for
practice acquisitions.
-14-
<PAGE> 15
Minority Interest
Minority interest represents NEB Enterprises, Inc.'s 49% share of the
losses incurred by NEB Occupational Health. For the first half of 1996, the
minority interest in net loss of subsidiary increased by 83.5% compared to the
same period in 1995. NEB Occupational Health was formed on April 1, 1995,
therefore, the six months ended June 30, 1995 include three months of losses for
NEB Occupational Health.
Liquidity and Capital Resources
Net cash used in operating activities by the Company during the six
months ended June 30, 1996 was approximately $999,000 as compared to
approximately $811,000 for the comparable period in 1995. The principal use of
cash was to fund the Company's operating losses in its early stage of
development. These operating losses were offset by non-cash expenses, such as
depreciation and amortization and by fluctuations in working capital during
those periods. Working capital fluctuations have been primarily from increases
in accounts receivable and other current assets offset by increases in accounts
payable and accrued expenses.
The Company's investing activities for the six months ended June 30,
1996 included approximately $4.5 million of cash received in connection with the
Merger. In the previous year, the Company also invested approximately $221,000
for the purchase of a physician practice in Bangor, Maine and the purchase of an
outpatient therapy center located in Vermont. The Company incurred approximately
$12,000 for the purchase of equipment during the six months ended June 30, 1996
as compared to approximately $25,000 for the comparable period in 1995.
For the six months ended June 30, 1996, the Company used approximately
$175,000 of cash for financing purposes as compared with the generation of
approximately $315,000 for the same period in 1995. Advances of $300,000 under a
bank line of credit and $200,000 in other short-term loans were offset by
payments of existing loans payable, noncompete agreements and capital lease
obligations aggregating approximately $676,000. For the six months ended June
30, 1995, the Company generated approximately $600,000 from the sale of
preferred stock. The net uses for the same period in 1995 were primarily the pay
down of certain bank loans and capital lease obligations totalling approximately
$285,000.
The Company expects that its principal use of funds in the near future
will be in connection with acquisitions, working capital requirements, debt
repayments and purchases of property and equipment. The Company expects that the
cash received as the result of the Merger, cash generated from operations,
available lines of credit and sales of certain accounts receivable will be
adequate to satisfy the Company's cash requirements through 1996. However, the
Company believes that the level of financial resources available to it is an
important competitive factor and may seek additional financing prior to the end
of that period. The Company considers raising additional capital on an on-going
basis as market factors and its needs suggest.
-15-
<PAGE> 16
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
A Special Meeting of Stockholders of the Company was held on June 5,
1996. At the Special Meeting, the stockholders voted to approve an Agreement and
Plan of Merger dated as of February 22, 1996, as amended as of April 30, 1996
and as of May 10, 1996 (the "Merger Agreement"), by and between Telor and OH+R.
Under the Merger Agreement, OH+R merged with and into Telor, with the Company
being the surviving corporation. There were 562,322 votes for, 960 votes
against, 770 abstentions and 5,371 broker non-votes with respect to approval of
the Merger Agreement. The stockholders also approved an amendment to the
Company's 1993 Stock Plan to increase the number of shares available for option
grants thereunder from 140,000 to 245,000. There were 559,176 votes for, 3,461
votes against, 1,415 abstentions and 5,371 broker non-votes with respect to
approval of such amendment. Finally, the stockholders approved an amendment to
the Company's Restated Certificate of Incorporation to decrease the number of
authorized shares of common stock from 25,000,000 to 10,000,000. There were
566,140 votes for, 2,028 votes against and 1,253 abstentions with respect to
approval of such amendment.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
2.01(a) Agreement and Plan of Merger by and between
the Registrant and Occupational Health +
Rehabilitation Inc dated as of February 22,
1996 (Filed as Exhibit 10.50 to Form 10-K
for the year ended December 31, 1995, File
No. 0-21428 and incorporated by reference
herein).
2.01(b) Amendment No. 1 to the Agreement and Plan of
Merger, dated as of April 30, 1996 (Filed as
Exhibit 2.1(b) to Form 8-K/A dated June 6,
1996, File No. 0-21428 and incorporated by
reference herein).
2.01(c) Amendment No. 2 to the Agreement and Plan of
Merger, dated as of May 10, 1996 (Filed as
Exhibit 2.1(c) to Form 8-K/A dated June 6,
1996, File No. 0-21428 and incorporated by
reference herein).
3.01 Restated Certificate of Incorporation
(Filed as Exhibit 4.1 to Form 8-K/A dated
June 6, 1996, File No. 0-21428 and
incorporated by reference herein).
3.02 Restated Bylaws.*
4.01 Form of Common Stock Certificate.*
10.01 Registration Rights Agreement among the
Registrant and certain securityholders dated
as of June 6, 1996.*
-16-
<PAGE> 17
10.02 Employment Agreement by and between the
Registrant and John C. Garbarino dated as of
June 6, 1996.*
10.03 Voting Agreement among the Registrant and
certain securityholders dated as of June 6,
1996.*
10.04 Standstill Agreement among the Registrant
and certain securityholders dated as of June
6, 1996.*
11.01 Statement re Computation of Per Share
Earnings.*
27.01 Financial Data Schedule.*
-------------
*Filed herewith.
b. Reports on Form 8-K.
On June 21, 1996, the Company filed a Current Report on Form 8-K dated
June 6, 1996, as amended, reporting in Item 2 thereof the merger of OH+R with
and into Telor, with the Company being the surviving corporation.
-17-
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OCCUPATIONAL HEALTH + REHABILITATION INC
Date: August 13, 1996
By /s/ John C. Garbarino
------------------------------------
John C. Garbarino
President, Chief Executive
Officer and Treasurer
(principal executive officer
and principal financial officer)
By /s/ Kathryn G. Converse
------------------------------------
Kathryn G. Converse
Controller
-18-
<PAGE> 19
Exhibit Index
Exhibit No. Description
2.01(a) Agreement and Plan of Merger by and between the Registrant and
Occupational Health + Rehabilitation Inc dated as of February 22,
1996 (Filed as Exhibit 10.50 to Form 10-K for the year ended
December 31, 1995, File No. 0-21428 and incorporated by reference
herein).
2.01(b) Amendment No. 1 to the Agreement and Plan of Merger, dated as of
April 30, 1996 (Filed as Exhibit 2.1(b) to Form 8-K/A dated June
6, 1996, File No. 0-21428 and incorporated by reference herein).
2.01(c) Amendment No. 2 to the Agreement and Plan of Merger, dated as of May
10, 1996 (Filed as Exhibit 2.1(c) to Form 8-K/A dated June 6,
1996, File No. 0-21428 and incorporated by reference herein).
3.01 Restated Certificate of Incorporation (Filed as Exhibit 4.1 to
Form 8-K/A dated June 6, 1996, File No. 0-21428 and incorporated
by reference herein).
3.02 Restated Bylaws.*
4.01 Form of Common Stock Certificate.*
10.01 Registration Rights Agreement among the Registrant and certain
securityholders dated as of June 6, 1996.*
10.02 Employment Agreement by and between the Registrant and John C.
Garbarino dated as of June 6, 1996.*
10.03 Voting Agreement among the Registrant and certain securityholders
dated as of June 6, 1996.*
10.04 Standstill Agreement among the Registrant and certain
securityholders dated as of June 6, 1996.*
11.01 Statement re Computation of Per Share Earnings.*
27.01 Financial Data Schedule.*
<PAGE> 1
Exhibit 3.02
OCCUPATIONAL HEALTH + REHABILITATION INC
RESTATED BY-LAWS
ARTICLE I - STOCKHOLDERS
Section 1. Annual Meeting. An annual meeting of the stockholders, for
the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, on such date, and at such time as the Board of
Directors shall each year fix.
Section 2. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes prescribed in the notice of the meeting, may be called
by the Chairman of the Board, if any, the Chief Executive Officer, if any, the
President or the Board of Directors, by the affirmative vote of a majority of
the Whole Board. Such request shall state the purpose or purposes of the
proposed meeting. Special meetings of the stockholders shall be held at such
place, on such date, and at such time as shall be fixed by the Board of
Directors or the person calling the meeting. The term "Whole Board" shall mean
the total number of authorized directors, whether or not there exists any
vacancies in previously authorized directorships.
Section 3. Notice of Meetings. Written notice of the place, date, and
time of all meetings of the stockholders shall be given, not less than ten (10)
nor more than sixty (60) days before the date on which the meeting is to be
held, to each stockholder entitled to vote at such meeting, except as otherwise
provided herein or required by law (meaning, here and hereinafter, as required
from time to time by the Delaware General Corporation Law or the Certificate of
Incorporation of the Corporation, as amended and restated from time to time).
When a meeting is adjourned to another place, date or time, written
notice need not be given of the adjourned meeting if the place, date and time
thereof are announced at the meeting at which the adjournment is taken;
provided, however, that if the date of any adjourned meeting is more than thirty
(30) days after the date for which the meeting was originally noticed, or if a
new record date is fixed for the adjourned meeting, written notice of the place,
date, and time of the adjourned meeting shall be given in conformity herewith.
At any adjourned meeting, any business may be transacted that might have been
transacted at the original meeting.
Section 4. Quorum. At any meeting of the stockholders, the holders of a
majority of the voting power of the outstanding shares of the stock entitled to
vote at the meeting present, in person or by proxy, shall constitute a quorum
for all purposes, unless or except to the extent that the presence of a larger
number may be required by law. Where a separate vote by a class or classes, or
series thereof, is required, the holders of a majority of the voting power of
the outstanding shares of such class or classes, or series, present, in person
or by proxy, shall constitute a quorum entitled to take action with respect to
that vote on that matter.
<PAGE> 2
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the voting power of the shares of stock
entitled to vote who are present, in person or by proxy, may adjourn the meeting
to another place, date, or time.
Section 5. Organization. Such person as the Board of Directors may have
designated or, in the absence of such a person, the Chairman of the Board, if
any, or, in his absence, the Chief Executive Officer, if any, or, in his
absence, the President, or, in his absence, such person as may be chosen by the
holders of a majority of the shares entitled to vote who are present, in person
or by proxy, shall call to order any meeting of the stockholders and act as
chairman of the meeting. In the absence of the Secretary of the Corporation, the
secretary of the meeting shall be such person as the chairman of the meeting
appoints.
Section 6. Conduct of Business. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as may seem to him in order. The date and time of the opening and
closing of the polls for each matter upon which the stockholders will vote at
the meeting shall be announced at the meeting.
Section 7. Notice of Stockholder Business and Nominations.
A. Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors
and the proposal of business to be considered by the stockholders may be made at
an annual meeting of stockholders (a) pursuant to the Corporation's notice of
meeting, (b) by or at the direction of the Board of Directors or (c) by any
stockholder of the Corporation who was a stockholder of record at the time of
giving of notice provided for in this Section, who is entitled to vote at the
meeting and who complies with the notice procedures set forth in this Section.
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of
this Section, the stockholder must have given timely notice thereof in writing
to the Secretary of the Corporation and such other business must otherwise be a
proper matter for stockholder action. To be timely, a stockholder's notice shall
be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the sixtieth (60) day nor
earlier than the close of business on the ninetieth (90th) day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is more than thirty (30)
days before or more than sixty (60) days after such an anniversary date, notice
by the stockholder to be timely must be so delivered not earlier than the close
of business on the ninetieth (90) day prior to such annual meeting and not later
than the close of business on the later of the sixtieth (60th) day prior to such
annual meeting or the close of business on the tenth (10th) day following the
day on which public announcement of the date of such meeting is first made by
the Corporation. Such stockholder's notice shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or reelection as a
director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors,
-2-
<PAGE> 3
or is otherwise required, in each case, pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (including such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected); (b) as to any other business that the
stockholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (c) as to the stockholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination or proposal is made (i) the name and
address of such stockholder, as they appear on the Corporation's books, and of
such beneficial owner and (ii) the class and number of shares of the Corporation
that are owned beneficially and held of record by such stockholder and such
beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2)
of this Section to the contrary, in the event that the number of directors to be
elected to the Board of Directors of the Corporation is increased and there is
no public announcement by the Corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors at least
seventy (70) days prior to the first anniversary of the preceding year's annual
meeting (or, if the annual meeting is held more than thirty (30) days before or
sixty (60) days after such anniversary date, at least seventy (70) days prior to
such annual meeting), a stockholder's notice required by this Section shall also
be considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive office of the Corporation not later than the close of
business on the tenth (10th) day following the day on which such public
announcement is first made by the Corporation.
B. Special Meetings of Stockholders.
Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to the
Corporation's notice of meeting. Nominations of persons for election to the
Board of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting (a)
by or at the direction of the Board of Directors or (b) provided that the Board
of Directors has determined that directors shall be elected at such meeting, by
any stockholder of the Corporation who is a stockholder of record at the time of
giving of notice of the special meeting, who shall be entitled to vote at the
meeting and who complies with the notice procedures set forth in this Section.
In the event the Corporation calls a special meeting of stockholders for the
purpose of electing one or more directors to the Board of Directors, any such
stockholder may nominate a person or persons (as the case may be), for election
to such position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by paragraph (A)(2) of this Section shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the ninetieth (90th) day prior to such special meeting nor
later than the close of business on the later of the sixtieth (60th) day prior
to such special meeting, or the tenth (10th) day following the day on which
public announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting.
-3-
<PAGE> 4
C. General.
(1) Only such persons who are nominated in accordance with the
procedures set forth in this Section shall be eligible to serve as directors and
only such business shall be conducted at a meeting of stockholders as shall have
been brought before the meeting in accordance with the procedures set forth in
this Section. Except as otherwise provided by law or these by-laws, the chairman
of the meeting shall have the power and duty to determine whether a nomination
or any business proposed to be brought before the meeting was made or proposed,
as the case may be, in accordance with the procedures set forth in this Section
and, if any proposed nomination or business is not in compliance herewith to
declare that such defective proposal or nomination shall be disregarded.
(2) For purposes of this Section, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth herein. Nothing in this Section shall be deemed to affect any rights (i)
of stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders
of any series of Preferred Stock to elect directors under specified
circumstances.
Section 8. Proxies and Voting. At any meeting of the stockholders,
every stockholder entitled to vote may vote in person or by proxy authorized by
an instrument in writing or by a transmission permitted by law filed in
accordance with the procedure established for the meeting. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or transmission
created pursuant to this Section may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
All voting, including on the election of directors but excepting where
otherwise required by law, may be by voice vote. Any vote not taken by voice
shall be taken by ballots, each of which shall state the name of the stockholder
or proxy voting and such other information as may be required under the
procedure established for the meeting. The Corporation may, and to the extent
required by law, shall, in advance of any meeting of stockholders, appoint one
or more inspectors to act at the meeting and make a written report thereof. The
Corporation may designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is able to act at a
meeting of stockholders, the person presiding at the meeting may, and to the
extent required by law, shall, appoint one or more inspectors to act at the
meeting. Each inspector, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his ability.
-4-
<PAGE> 5
Except as otherwise provided in the terms of any class or series of
Preferred Stock of the Corporation, all elections shall be determined by a
plurality of the votes cast, and except as otherwise required by law, all other
matters shall be determined by a majority of the votes cast affirmatively or
negatively.
Section 9. Stock List. A complete list of stockholders entitled to vote
at any meeting of stockholders, arranged in alphabetical order for each class of
stock and showing the address of each such stockholder and the number of shares
registered in such stockholder's name, shall be open to the examination of any
such stockholder, for any purpose germane to the meeting, during ordinary
business hours for a period of at least ten (10) days prior to the meeting
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held.
The stock list shall also be kept at the place of the meeting during
the whole time thereof and shall be open to the examination of any such
stockholder who is present. This list shall presumptively determine the identity
of the stockholders entitled to vote at the meeting and the number of shares
held by each of them.
ARTICLE II - BOARD OF DIRECTORS
Section 1. General Powers, Number and Term of Office. The business and
affairs of the Corporation shall be managed by or under the direction of its
Board of Directors. The number of directors who shall constitute the Whole Board
shall be such number as the Board of Directors shall from time to time have
designated. Commencing with the Corporation's annual meeting of stockholders or
any special meeting in lieu thereof in 1993, the Board of Directors shall be
divided into three classes, as nearly equal in number as reasonably possible.
The term of office of the first class shall expire at the annual meeting of
stockholders or any special meeting in lieu thereof in 1994, the term of office
of the second class shall expire at the annual meeting of stockholders or any
special meeting in lieu thereof in 1995, the term of office of the third class
shall expire at the annual meeting of stockholders or any special meeting in
lieu thereof in 1996, and with respect to each class, until their successors are
duly elected and qualified. At each annual meeting of stockholders or special
meeting in lieu thereof following such initial classification, directors elected
to succeed those directors whose terms expire shall be elected for a term of
office to expire at the third succeeding annual meeting of stockholders or
special meeting in lieu thereof after their election and until their successors
are duly elected and qualified.
-5-
<PAGE> 6
Section 2. Vacancies and Newly Created Directorships. Subject to the
rights of the holders of any class or series of Preferred Stock, and except as
otherwise determined by the Board of Directors or required by law, newly created
directorships resulting from any increase in the authorized number of directors
or any vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause may be filled
only by a majority vote of the directors then in office, though less than a
quorum, or the sole remaining director; a director so chosen shall hold office
for a term expiring at the annual meeting of stockholders at which the term of
office of the class to which he has been elected expires, if applicable, and if
no such classes have been established, at the next annual meeting of
stockholders and until such director's successor shall have been duly elected
and qualified. In the event of any increase or decrease in the authorized number
of directors, (i) each director then serving as such shall nevertheless continue
as a director of the class of which he is a member until the expiration of his
current term or his prior death, retirement, removal or resignation and (ii) the
newly created or eliminated directorships resulting from such increase or
decrease shall if reasonably possible be apportioned by the Board of Directors
among the three classes of directors so as to ensure that no one class has more
than one director more than any other class. To the extent reasonably possible,
consistent with the foregoing rule, any newly created directorships shall be
added to those classes whose terms of office are to expire at the latest dates
following such allocation and newly eliminated directorships shall be subtracted
from those classes whose terms of office are to expire at the earliest dates
following such allocation, unless otherwise provided for from time to time by
resolution adopted by a majority of the directors then in office, although less
than a quorum. No decrease in the number of authorized directors constituting
the Board shall shorten the term of any incumbent director.
Section 3. Resignation. Any director may resign at any time upon
written notice to the Corporation at its principal place of business or to the
Chief Executive Officer or Secretary. Such resignation shall be effective upon
receipt unless it is specified to be effective at some other time or upon the
happening of some other event.
Section 4. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such place or places, on such date or dates, and at such time
or times as shall have been established by the Board of Directors and publicized
among all directors. A notice of each regular meeting shall not be required.
Section 5. Special Meetings. Special meetings of the Board of Directors
may be called by a majority of the Whole Board or by the Chairman of the Board,
if any, by the Chief Executive Officer, if a director, or by the President, if a
director, and shall be held at such place, on such date, and at such time as
they or he shall fix. Notice of the place, date, and time of each such special
meeting shall be given each director by whom it is not waived by mailing written
notice not less than five (5) days before the meeting, by sending written notice
by recognized overnight courier service not less than two (2) days before the
meeting or by telegraphing or telexing or by facsimile transmission of the same
not less than twenty-four (24) hours before the meeting. Unless otherwise
indicated in the notice thereof, any and all business may be transacted at a
special meeting.
-6-
<PAGE> 7
Section 6. Quorum. At any meeting of the Board of Directors, a majority
of the Whole Board shall constitute a quorum for all purposes. If a quorum shall
fail to attend any meeting, a majority of those present may adjourn the meeting
to another place, date, or time, without further notice or waiver thereof.
Section 7. Participation in Meetings by Conference Telephone. Members
of the Board of Directors, or of any committee thereof, may participate in a
meeting of the Board of Directors or committee by means of conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other and such participation shall constitute
presence in person at such meeting.
Section 8. Conduct of Business. At any meeting of the Board of
Directors, business shall be transacted in such order and manner as the Board of
Directors may from time to time determine, and all matters shall be determined
by the vote of a majority of the directors present, except as otherwise provided
herein or required by law. Action may be taken by the Board of Directors without
a meeting if all members of the Board of Directors who are then in office
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors.
Section 9. Powers. The Board of Directors may, except as otherwise
required by law, exercise all such powers and do all such acts and things as may
be exercised or done by the Corporation, including, without limiting the
generality of the foregoing, the unqualified power:
(1) To declare dividends from time to time in accordance with law;
(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form as
it may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, to borrow funds and guarantee obligations,
and to do all things necessary in connection therewith;
(4) To remove any officer of the Corporation with or without cause,
and from time to time to devolve the powers and duties of any officer upon any
other person for the time being;
(5) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock option, stock purchase,
bonus or other compensation plans for directors, officers, employees and agents
of the Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the Corporation
and its subsidiaries as it may determine; and
-7-
<PAGE> 8
(8) To adopt from time to time regulations not inconsistent
herewith, for the management of the Corporation's business and affairs.
Section 10. Compensation of Directors. Directors, as such, may
receive, pursuant to resolution of the Board of Directors, fixed fees and other
compensation for their services as directors, including, without limitation,
their services as members of committees of the Board of Directors.
ARTICLE III - COMMITTEES
Section 1. Committees of the Board of Directors. The Board of
Directors, by a vote of a majority of the Whole Board, may from time to time
designate committees of the Board of Directors, with such lawfully delegable
powers and duties as it thereby confers, to serve at the pleasure of the Board
of Directors and shall, for those committees and any others provided for herein,
elect a director or directors to serve as the member or members, designating, if
it desires, other directors as alternate members who may replace any absent or
disqualified member at any meeting of a committee. Any committee so designated
may exercise the power and authority of the Board of Directors to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the Delaware General Corporation
Law if the resolution that designates the committee or a supplemental resolution
of the Board of Directors shall so provide. In the absence or disqualification
of any member of any committee and any alternate member in his place, the member
or members of the committee present at the meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may by unanimous vote
appoint another member of the Board of Directors to act at the meeting in the
place of the absent or disqualified member.
Section 2. Conduct of Business. Each committee of the Board of
Directors may determine the procedural rules for meeting and conducting its
business and shall act in accordance therewith, except as otherwise provided
herein or required by law. Adequate provisions shall be made for notice to
members of all meetings of committees. One-third (1/3) of the members of any
committee shall constitute a quorum unless the committee shall consist of one
(1) or two (2) members, in which event one (1) member shall constitute a quorum;
and all matters shall be determined by a majority vote of the members present.
Action may be taken by any committee without a meeting if all members thereof
consent thereto in writing, and the writing or writings are filed with the
minutes of the proceedings of such committee.
ARTICLE IV - OFFICERS
Section 1. Generally. The officers of the Corporation shall consist of
a President, one or more Vice Presidents, a Secretary, a Treasurer and such
other officers as may from time to time be appointed by the Board of Directors,
including, without limiting the generality of the foregoing, a Chairman of the
Board, a Chief Executive Officer, a Vice Chairman of the Board and
-8-
<PAGE> 9
one or more Assistant Secretaries and Assistant Treasurers. Officers shall be
elected by the Board of Directors, which shall consider that subject at its
first meeting after every annual meeting of stockholders. The Chief Executive
Officer may be empowered to appoint from time to time Vice Presidents, Assistant
Secretaries and Assistant Treasurers. Each officer shall hold office until his
successor is elected and qualified or if earlier, until he dies, resigns, is
removed or becomes disqualified, unless a shorter term is specified by the Board
of Directors at the time of election of such officer. Any number of offices may
be held by the same person.
Section 2. Chairman of the Board. Unless otherwise provided by
resolution of the Board of Directors, the Chairman of the Board, if any, shall
preside at all meetings of the stockholders and all meeting of the Board of
Directors at which he is present and shall have such authority and perform such
duties as may be prescribed by these by-laws or from time to time determined by
the Board of Directors. The Chairman of the Board shall have power to sign all
stock certificates, contracts and other instruments of the Corporation which are
authorized.
Section 3. Vice Chairman of the Board. The Vice Chairman of the Board,
if any, shall have such powers and duties as may be delegated to him by the
Board of Directors. To the extent not otherwise provided herein, the Vice
Chairman of the Board shall perform the duties and exercise the powers of the
Chairman of the Board in the event of the Chairman's absence or disability.
Section 4. Chief Executive Officer. The Chief Executive Officer shall
be the chief executive officer of the Corporation and shall, subject to the
direction of the Board of Directors, have general supervision and control of its
business. Unless otherwise provided by resolution of the Board of Directors, in
the absence of the Chairman of the Board, if any, the Chief Executive Officer
shall preside at all meetings of the stockholders and, if a director, meetings
of the Board of Directors. The Chief Executive Officer shall have general
supervision and direction of all of the officers, employees and agents of the
Corporation.
Section 5. President. Except for meetings at which the Chief Executive
Officer or the Chairman of the Board, if any, presides, the President shall, if
present, preside at all meetings of stockholders, and if a director, at all
meetings of the Board of Directors. The President shall, subject to the control
and direction of the Chief Executive Officer and the Board of Directors, have
and perform such powers and duties as may be prescribed by these by-laws or from
time to time be determined by the Chief Executive Officer or the Board of
Directors. The President shall have power to sign all stock certificates,
contracts and other instruments of the Corporation which are authorized. In the
absence of a Chief Executive Officer, the President shall be the chief executive
officer of the Corporation and shall, subject to the direction of the Board of
Directors, have general supervision and control of its business and shall have
general supervision and direction of all of the officers, employees and agents
of the Corporation.
Section 6. Vice President. Each Vice President shall have such powers
and duties as may be delegated to him by the Board of Directors, the Chief
Executive Officer and the President. One (1) Vice President shall be designated
by the Board of Directors to perform the duties and exercise the powers of the
President in the event of the President's absence or disability.
-9-
<PAGE> 10
Section 7. Treasurer. The Treasurer shall have the responsibility for
maintaining the financial records of the Corporation. The Treasurer shall make
such disbursements of the funds of the Corporation as are authorized and shall
render from time to time an account of all such transactions and of the
financial condition of the Corporation. The Treasurer shall also perform such
other duties as the Board of Directors may from time to time prescribe.
Section 8. Secretary. The Secretary shall issue all authorized notices
for, and shall keep minutes of, all meetings of the stockholders and the Board
of Directors. The Secretary shall have charge of the corporate books and shall
perform such other duties as the Board of Directors may from time to time
prescribe.
Section 9. Delegation of Authority. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officers
or agents, notwithstanding any provisions hereof.
Section 10. Removal. Any officer of the Corporation may be removed at
any time, with or without cause, by the Board of Directors. Any officer elected
or appointed by the Chief Executive Officer may be removed at any time by the
Board of Directors or by the Chief Executive Officer.
Section 11. Resignation. Any officer may resign by giving written
notice of his resignation to the Chairman of the Board, if any, the Chief
Executive Officer, if any, the President, or the Secretary, or to the Board of
Directors at a meeting of the Board, and such resignation shall become effective
at the time specified therein.
Section 12. Bond. If required by the Board of Directors, any officer
shall give the Corporation a bond in such sum and with such surety or sureties
and upon such terms and conditions as shall be satisfactory to the Board of
Directors, including without limitation a bond for the faithful performance of
the duties of his office and for the restoration to the Corporation of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control and belonging to the Corporation.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the President or the Chief
Executive Officer or any officer of the Corporation authorized by the President
or the Chief Executive Officer shall have power to vote and otherwise act on
behalf of the Corporation, in person or by proxy, at any meeting of stockholders
of or with respect to any action of stockholders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and all
rights and powers which this Corporation may possess by reason of its ownership
of securities in such other corporation.
-10-
<PAGE> 11
ARTICLE V - INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or an officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "Indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a director, officer,
employee or agent, shall be indemnified and held harmless by the Corporation to
the fullest extent authorized by the Delaware General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than such law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by such
Indemnitee in connection therewith; provided, however, that, except as provided
in Section 3 of this Article with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such Indemnitee in
connection with a proceeding (or part thereof) initiated by such Indemnitee only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
Section 2. Right to Advancement of Expenses. The right to
indemnification conferred in Section 1 of this Article shall include the right
to be paid by the Corporation the expenses (including attorney's fees) incurred
in defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, an advancement
of expenses incurred by an Indemnitee in his capacity as a director or officer
(and not in any other capacity in which service was or is rendered by such
Indemnitee, including, without limitation, service to an employee benefit plan)
shall be made only upon delivery to the Corporation of an undertaking, by or on
behalf of such Indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such Indemnitee is not entitled to be indemnified
for such expenses under this Section 2 or otherwise. The rights to
indemnification and to the advancement of expenses conferred in Sections 1 and 2
of this Article shall be contract rights and such rights shall continue as to an
Indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the Indemnitee's heirs, executors and administrators.
Any repeal or modification of any of the provisions of this Article shall not
adversely affect any right or protection of an Indemnitee existing at the time
of such repeal or modification.
Section 3. Right of Indemnitees to Bring Suit. If a claim under Section
1 or 2 of this Article is not paid in full by the Corporation within sixty (60)
days after a written claim has been received by the Corporation, except in the
case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty (20) days, the Indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim. If
-11-
<PAGE> 12
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the Indemnitee shall also be entitled to be paid the expenses of
prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to
enforce a right to indemnification hereunder (but not in a suit brought by the
Indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) in any suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the Corporation
shall be entitled to recover such expenses upon a final adjudication that, the
Indemnitee has not met any applicable standard for indemnification set forth in
the Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall create a presumption that the Indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article or otherwise shall be on the Corporation.
Section 4. Non-Exclusivity of Rights. The rights to indemnification and
to the advancement of expenses conferred in this Article shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, the Corporation's Certificate of Incorporation as amended from time to
time, these by-laws, any agreement, any vote of stockholders or disinterested
directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
Section 6. Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article with respect to the indemnification and advancement of expenses
of directors and officers of the Corporation.
ARTICLE VI - STOCK
Section 1. Certificates of Stock. Each stockholder shall be entitled to
a certificate signed by, or in the name of the Corporation by, the Chairman or
Vice-Chairman of the Board of
-12-
<PAGE> 13
Directors, the President or a Vice President, and by the Secretary or an
Assistant Secretary, or the Treasurer or an Assistant Treasurer, certifying the
number of shares owned by him. Any or all of the signatures on the certificate
may be by facsimile.
Section 2. Transfers of Stock. Transfers of stock shall be made only
upon the transfer books of the Corporation kept at an office of the Corporation
or by transfer agents designated to transfer shares of the stock of the
Corporation. Except where a certificate is issued in accordance with Section 4
of this Article, an outstanding certificate for the number of shares involved
shall be surrendered for cancellation before a new certificate is issued
therefor.
Section 3. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders, or
to receive payment of any dividend or other distribution or allotment of any
rights or to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date on
which the resolution fixing the record date is adopted and which record date
shall not be more than sixty (60) nor less than ten (10) days before the date of
any meeting of stockholders, nor more than sixty (60) days prior to the time for
such other action as hereinbefore described; provided, however, that if no
record date is fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held, and, for determining
stockholders entitled to receive payment of any dividend or other distribution
or allotment of rights or to exercise any rights of change, conversion or
exchange of stock or for any other purpose, the record date shall be at the
close of business on the day on which the Board of Directors adopts a resolution
relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 4. Lost, Stolen or Destroyed Certificates. In the event of the
loss, theft or destruction of any certificate of stock, another may be issued in
its place pursuant to such regulations as the Board of Directors may establish
concerning proof of such loss, theft or destruction and concerning the giving of
a satisfactory bond or bonds of indemnity.
Section 5. Regulations. The issue, transfer, conversion and
registration of certificates of stock shall be governed by such other
regulations as the Board of Directors may establish.
-13-
<PAGE> 14
ARTICLE VII - NOTICES
Section 1. Notices. Except as otherwise specifically provided herein or
required by law, all notices required to be given to any stockholder, director,
officer, employee or agent shall be in writing and may in every instance be
effectively given by hand delivery to the recipient thereof, by depositing such
notice in the mails, postage paid, or by sending such notice by recognized
courier service, prepaid telegram, telex, mailgram or by facsimile transmission.
Any such notice shall be addressed to such stockholder, director, officer,
employee or agent at his last known address as the same appears on the books of
the Corporation. The time when such notice is received, if hand delivered, or
dispatched, if delivered through the mails, by courier or by telegram, telex,
facsimile transmission or mailgram, shall be the time of the giving of the
notice.
Section 2. Waivers. A written waiver of any notice, signed by a
stockholder, director, officer, employee or agent, whether before or after the
time of the event for which notice is to be given, shall be deemed equivalent to
the notice required to be given to such stockholder, director, officer, employee
or agent. Neither the business nor the purpose of any meeting need be specified
in such a waiver.
ARTICLE VIII - MISCELLANEOUS
Section 1. Facsimile Signatures. In addition to the provisions for use
of facsimile signatures elsewhere specifically authorized in these by-laws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors or a committee thereof.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation, which seal shall be in
the charge of the Secretary. If and when so directed by the Board of Directors
or a committee thereof, duplicates of the seal may be kept and used by the
Secretary or Treasurer or by an Assistant Secretary or Assistant Treasurer.
Section 3. Reliance upon Books, Reports and Records. Each director,
each member of any committee designated by the Board of Directors, and each
officer of the Corporation shall, in the performance of his duties, be fully
protected in relying in good faith upon the books of account or other records of
the Corporation and upon such information, opinions, reports or statements
presented to the Corporation by any of its officers or employees or committees
of the Board of Directors so designated, or by any other person as to matters
which such director or committee member reasonably believes are within such
other person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year. The fiscal year of the Corporation shall be as
fixed by the Board of Directors.
Section 5. Time Periods. In applying any provision of these by-laws
that requires that an act be done or not be done a specified number of days
prior to an event or that an act be done
-14-
<PAGE> 15
during a period of a specified number of days prior to an event, calendar days
shall be used, the day of the doing of the act shall be excluded, and the day of
the event shall be included.
Section 6. Pronouns. Whenever the context may require, any pronouns
used in these by-laws shall include the corresponding masculine, feminine or
neuter forms.
ARTICLE IX - AMENDMENTS
These by-laws may be amended or repealed by the affirmative vote of a
majority of the Whole Board at any meeting or by the stockholders by the
affirmative vote of eighty percent (80%) of the outstanding voting power of the
then-outstanding shares of capital stock of the Corporation, entitled to vote
generally in the election of directors, at any meeting at which a proposal to
amend or repeal these by-laws is properly presented.
-15-
<PAGE> 1
<TABLE>
<CAPTION>
Exhibit 4.01
<S> <C>
NUMBER [LOGO] OCCUPATIONAL HEALTH + REHABILITATION INC SHARES
- ------- ---------
- ------- ---------
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, MA OR NEW YORK CITY, NY
COMMON STOCK SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP 674617 10 5
This Certifies that
is the owner of
FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK, $.001 PAR VALUE OF
OCCUPATIONAL HEALTH + REHABILITATION INC
transferable only on the books of the Corporation by the holder hereof in person
or by duly authorized attorney upon surrender of this certificate properly COUNTERSIGNED AND REGISTERED:
endorsed. STATE STREET BANK AND TRUST COMPANY
This certificate and the shares of Common Stock represented hereby are
received and held subject to the laws of the State of Delaware and to the TRANSFER AGENT
Restated Certificate of Incorporation and the Restated By-Laws of the AND REGISTRAR,
Corporation, all as from time to time amended, and the owner of this certificate BY
by accepting the same expressly assents thereto. This certificate is not valid
unless countersigned by the Transfer Agent and registered by the Registrar. AUTHORIZED SIGNATURE
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by the facsimile signatures of its duly authorized officers and a
facsimile of its corporate seal to be hereunto affixed.
Dated:
TREASURER PRESIDENT
[SEAL]
</TABLE>
<PAGE> 2
OCCUPATIONAL HEALTH + REHABILITATION INC
The Corporation is authorized to issue more than one class of series of
stock. Upon written request, the Corporation will furnish without charge to each
stockholder a copy of the powers, designations preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations of such preferences and/or rights.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common UNIF GIFT ACT - _____________ CUSTODIAN ___________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as Act _____________________________________________
tenants in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, ____hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------------
- -----------------------------------------
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
_______________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
______________________________________________________________________ Shares of
the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
________________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.
Dated,________________________________________________________
____________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE
SIGNATURE(S) GUARANTEED ____________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM), PURSUANT TO B.E.C. RULE 17Ad-16.
<PAGE> 1
Exhibit 10.01
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as of June
6, 1996, is by and among Telor Ophthalmic Pharmaceuticals, Inc. (the "Company"),
the holders of Common Stock as are listed in Schedule I attached hereto (the
"Existing Holders") who currently have registration rights pursuant to that
Registration Rights Agreement dated as of November 16, 1988, as amended as of
February 5, 1990, June 22, 1990, October 31, 1990 and April 27, 1992 (the "Prior
Registration Rights Agreement") and the holders of certain equity interests in
Occupational Health + Rehabilitation Inc ("OH+R," and such holders, "OH+R
Securityholders" as are listed in Schedule II attached hereto). This Agreement
is being entered into in connection with the issuance of shares of Common Stock
to the OH+R Securityholders listed in Schedule II in connection with the merger
of Occupational Health + Rehabilitation Inc with and into Telor Ophthalmic
Pharmaceuticals, Inc. ("Telor") (the "Merger") pursuant to the Agreement and
Plan of Merger between Telor and OH+R dated as of February 22, 1996 as amended
on April 30, 1996 and May 10, 1996 (the "Merger Agreement"), pursuant to which
OH+R will merge with and into Telor, Telor will be the surviving corporation,
the separate corporate existence of OH+R will cease and the surviving
corporation will continue under the name "Occupational Health + Rehabilitation
Inc". This Agreement shall become effective upon the consummation of the Merger.
WHEREAS, as a condition to the Merger, the Company and the Holders (as
hereinafter defined) are entering into this Agreement, which is superseding any
other agreements of Telor and OH+R with the other parties hereto relating to the
registration of shares of stock, including, without limitation, the Prior
Registration Rights Agreement.
WHEREAS, Telor and the Existing Holders desire to terminate the Prior
Registration Rights Agreement in consideration of the terms set forth herein;
and
WHEREAS, OH+R and the OH+R Securityholders desire to terminate the
existing registration rights agreements among themselves in consideration for
the terms set forth herein;
NOW, THEREFORE, in consideration of the terms and conditions as set
forth herein and in the Merger Agreement, the Company covenants and agrees with
the Existing Holders and the OH+R Securityholders as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Bridge Shares" shall mean the 220,000 shares of Common Stock issued
pursuant to Purchase Agreements dated February 5, 1990 and June 22,
1990.
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
<PAGE> 2
"Common Stock" shall mean the Common Stock, $.001 par value, of the Company, as
constituted as of the date of this Agreement.
"Conversion Shares" shall mean (a) shares of Common Stock issued upon
conversion of the shares of preferred stock of Telor converted upon the
consummation of the initial public offering of Telor; (b) the 200,000 shares of
Common Stock issued pursuant to that certain Purchase Agreement dated as of
February 5, 1990 among Eygene, Inc., a former name of Telor ("Eygene"), and
certain of the Existing Holders listed in Schedule I attached hereto; and (c)
the 20,000 shares of Common Stock issued pursuant to that certain Purchase
Agreement dated as of June 22, 1990 among Eygene and certain of the Existing
Holders listed in Schedule I attached hereto.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Existing Holders" shall mean the several existing holders of Common
Stock named in Schedule I attached hereto.
"Holder" shall mean the person who is the then record owner of
Restricted Stock.
"Merger Shares" shall mean the Common Stock issued upon consummation of
the Merger and any Additional Shares (as defined in the Merger Agreement).
"OH+R Securityholders" shall mean the several holders named in Schedule
II attached hereto.
"OH+R Warrants" shall mean the warrants originally issued by OH+R to
the OH+R Securityholders named in Schedule III attached hereto to acquire shares
of Common Stock upon the exercise of such warrants in accordance with the terms
of the Merger Agreement.
"OH+R Warrant Shares" shall mean the shares of Common Stock issuable by
the Company to those OH+R Securityholders upon exercise their OH+R Warrants.
"Registrable Shares" shall mean the shares of Restricted Stock other
than the OH+R Warrant Shares.
"Registration Expenses" shall mean the expenses so described in
Section 8.
"Restricted Stock" shall mean the (i) Bridge Shares, (ii) the Merger
Shares, (iii) the OH+R Warrant Shares, and (iv) the Conversion Shares, excluding
shares which have been (a) registered under the Securities Act pursuant to an
effective registration statement filed thereunder and disposed of in accordance
with the registration statement covering them or (b) publicly sold pursuant to
Rule 144 under the Securities Act.
-2-
<PAGE> 3
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. Restrictive Legend
Each certificate representing the Restricted Stock shall bear a legend
stating in substance:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED OR ANY STATE SECURITIES LAWS AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND SUCH LAWS OR, IN THE
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION
DOES NOT VIOLATE THE PROVISIONS THEREOF OR UNLESS SOLD PURSUANT TO RULE
144 PROMULGATED UNDER SAID ACT.
A certificate shall not be required to bear such legend if in the
opinion of counsel satisfactory to the Company, the securities represented
thereby may be publicly sold without registration under the Securities Act.
3. Notice of Proposed Transfer.
Prior to any proposed transfer of any Restricted Stock (other than
under the circumstances described in Section 4, 5 or 6), the Holder thereof
shall give written notice to the Company of its intention to effect such
transfer. Each such notice shall describe the manner of the proposed transfer
and, if requested by the Company, shall be accompanied by an opinion of counsel
satisfactory to the Company to the effect that the proposed transfer may be
effected without registration under the Securities Act, whereupon the Holder of
such stock shall be entitled to transfer such stock in accordance with the terms
of its notice; provided, however, that no such opinion of counsel shall be
required for a distribution by a partnership to its partners of such stock in
respect of such interest. Each certificate for shares of Restricted Stock
transferred as above provided shall bear the legend set forth in Section 2,
except that such certificate shall not bear such legend if (i) such transfer is
in accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the opinion
of counsel referred to above is to the further effect that the transferee and
any subsequent transferee (other than an affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration under
the Securities Act. The restrictions provided for in this Section 3 shall not
apply to securities which are not required to bear the legend prescribed by
Section 2 in accordance with the provisions of that Section .
4. Required Registration.
(a) At any time prior to June 6, 2001, the Holders of Registrable
Shares constituting at least 51% of the total shares of Registrable Shares then
outstanding may request
-3-
<PAGE> 4
the Company to register under the Securities Act all or any portion of the
Registrable Shares held by such requesting Holder or Holders for sale in the
manner specified in such notice, provided that the Registrable Shares for which
registration has been requested shall constitute at least 25% of the total
Registrable Shares originally issued if such Holder or Holders shall request the
registration of less than all Registrable Shares then held by such Holder or
Holders. Notwithstanding anything to the contrary contained herein, no request
may be made under this Section 4 within 180 days after the effective date of a
registration statement filed by the Company covering a firm commitment
underwritten public offering in which the Holders of Registrable Shares shall
have been entitled to join pursuant to Section 5 or 6 and in which there shall
have been effectively registered all Registrable Shares to which registration
shall have been requested.
(b) Following receipt of any notice under this Section 4, the Company
shall immediately notify all Holders of Registrable Shares from whom notice has
not been received and shall use its reasonable best efforts to register under
the Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting Holders, the number of Registrable
Shares specified in such notice (and in all notices received by the Company from
other Holders within 30 days after the giving of such notice by the Company). If
such method of disposition shall be an underwritten public offering, the Holders
of a majority of the Registrable Shares to be sold in such offering may
designate the managing underwriter of such offering, subject to the approval of
the Company, which approval shall not be unreasonably withheld or delayed. The
Company shall be obligated to register Registrable Shares pursuant to this
Section 4 on two occasions only, provided, however, that such obligation shall
be deemed satisfied only when a registration statement, which covers all
Registrable Shares specified in notices received as aforesaid and with respect
to which the request for registration has not been withdrawn and provides for
sale of such shares in accordance with the method of disposition specified by
the requesting Holders, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting Holders, shares of Common Stock to be
sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Registrable Shares to be sold. Except for registration
statements on Form S-4, S-8 or any successor thereto, the Company will not file
with the Commission any other registration statement with respect to its Common
Stock, whether for its own account or that of other stockholders, from the date
of receipt of a notice from requesting Holders pursuant to this Section 4 until
the first to occur of (i) withdrawal of such registration statement or (ii) the
effectiveness of such registration statement unless, such registration statement
relates to a firm commitment underwritten public offering, then the completion
of the period of distribution of the registration contemplated thereby.
-4-
<PAGE> 5
5. Incidental Registration.
If the Company at any time (other than pursuant to Section 4 or
Section 6) proposes to register any of its securities under the Securities Act
for sale to the public, whether for its own account or for the account of other
securityholders or both (except with respect to registration statements on Forms
S-4, S-8 or another form not available for registering the Restricted Stock for
sale to the public), each such time the Company will give written notice to all
Holders of outstanding Restricted Stock of its intention to do so. Upon the
written request of any such Holder received by the Company within 30 days of the
giving of any such notice by the Company to register any of such Holder's
Restricted Stock (which request shall state the intended method of disposition
thereof), the Company will use its reasonable best efforts to cause the
Restricted Stock as to which registration shall have been so requested to be
included in the securities to be covered by the registration statement proposed
to be filed by the Company, all to the extent requisite to permit the sale or
other disposition by the Holder (in accordance with such Holder's written
request) of such Restricted Stock so registered. In the event that any
registration pursuant to this Section 5 shall be, in whole or in part, an
underwritten public offering of Common Stock, the number of shares of Restricted
Stock to be included in such an underwriting may be reduced if and to the extent
that the managing underwriter shall be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Company or
the requesting party therein or that such reduction is otherwise advisable,
provided, however, any such reduction shall be accomplished as follows: as among
the requesting Holders and any other holders of securities of the Company who
have exercised their contractual rights to have shares included in such
registration, pro rata based upon the number of shares of Common Stock owned by
or issuable to such requesting Holders and other requesting holders, unless such
registration is pursuant to the exercise of a demand right of another
securityholder, in which event such securityholder shall be entitled to include
all shares it desires to have so included before any shares of Restricted Stock
or shares of any other holder are included therein.
6. Registration on Form S-3.
If at any time prior to June 6, 2001 (i) a Holder or Holders of
Registrable Shares request that the Company file a registration statement on
Form S-3 or any successor thereto for a public offering of all or any portion of
the Registrable Shares held by such requesting Holder or Holders, the reasonably
anticipated aggregate price to the public of at least $500,000, and (ii) the
Company is a registrant entitled to use Form S-3 or any successor thereto to
register such shares, then the Company shall use its reasonable best efforts to
register under the Securities Act on Form S-3 or any successor thereto, for
public sale in accordance with the method of disposition specified in such
notice, the number of Registrable Shares specified in such notice. Whenever the
Company is required by this Section 6 to use its reasonable best efforts to
effect the registration of Registrable Shares, each of the procedures and
requirements of Section 4 (including but not limited to the requirement that the
Company notify all Holders of Registrable Shares from whom notice has not been
received and provide them with the opportunity to participate in the offering)
shall apply to such registration, provided, however, that there shall be up to
five (5) registrations on Form S-3 which may be requested and obtained under
this Section 6, and the Company shall not be obligated to register Registrable
Shares pursuant to this Section 6 on more than one occasion per twelve (12)
month period, and provided, further, however, that the requirements contained in
the
-5-
<PAGE> 6
first sentence of Section 4(a) shall not apply to any registration on Form S-3
which may be requested and obtained under this Section 6.
7. Registration Procedures.
If and whenever the Company is required by the provisions of Section 4,
5 or 6 to use its reasonable best efforts to effect the registration of any
shares of Restricted Stock under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 4,
shall be on Form S-1 or other form of general applicability satisfactory to the
managing underwriter selected as therein provided) with respect to such
securities and use its reasonable best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby (determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each underwriter
such number of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus) as such persons reasonably may
request in order to facilitate the public sale or other disposition of the
Restricted Stock covered by such registration statement;
(d) use its reasonable best efforts to register or qualify the
Restricted Stock covered by such registration statement under the securities or
"blue sky" laws of such jurisdictions as the sellers of Restricted Stock or, in
the case of an underwritten public offering, the managing underwriter reasonably
shall request, provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;
(e) use its reasonable best efforts to list the Restricted Stock
covered by such registration statement with any securities exchange on which the
Common Stock is then listed;
(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
-6-
<PAGE> 7
(g) if the offering is underwritten and at the request of any seller of
Restricted Stock as provided herein, use its reasonable best efforts to furnish
on the date that Restricted Stock is delivered to the underwriters for sale
pursuant to such registration: (i) an opinion dated such date of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters and to such seller, stating that such registration statement has
become effective under the Securities Act and that (A) to the knowledge of such
counsel, no stop order suspending the effectiveness thereof has been issued and
no proceedings for that purpose have been instituted or are pending or
threatened under the Securities Act, (B) the registration statement, the related
prospectus and each amendment or supplement thereof comply as to form in all
material respects with the requirements of the Securities Act (except that such
counsel need not express any opinion as to financial statements, schedules and
other financial or statistical information contained therein) and (C) to such
other effects as reasonably may be requested by counsel for the underwriters or
by such seller or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
and
(h) make available for inspection by each seller of Restricted Stock,
any underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement.
For purposes of Section 7(a) and 7(b), the period of distribution of
Restricted Stock included therein shall be deemed to extend until the first to
occur of (i) each underwriter's completion the distribution of all securities
purchased by it, and (ii) one hundred and twenty (120) days.
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Section 4, 5 or 6
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
-7-
<PAGE> 8
No Holder of shares of Restricted Stock included in a registration
statement shall (until further notice) effect sales thereof after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update a registration statement or prospectus; but the
obligations of the Company with respect to maintaining any registration
statement current and effective shall be extended by a period of days equal to
the period such suspension is in effect unless (i) such extension would result
in the Company's inability to use the financial statements in the registration
statement as initially filed and (ii) such correction or update did not result
from the Company's acts or failures to act.
At the end of the period during which the Company is obligated to keep
the registration statement current and effective as described above (and any
extensions thereof required by the preceding sentence), the Holders of shares of
Restricted Stock included in the registration statement shall discontinue sales
of shares pursuant to such registration statement upon receipt of notice from
the Company of its intention to remove from registration the shares covered by
such registration statement which remain unsold, and such Holders shall notify
the Company of the number of shares registered which remain unsold immediately
upon receipt of such notice from the Company.
8. Expenses.
All expenses incurred by the Company in complying with Sections 4, 5
and 6, including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel to the Company and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs of insurance, shall be borne by
the Company, except that the following expenses shall be borne by the Holders of
the securities registered pursuant to such registration, pro rata according to
the quantity of their securities so registered:
(a) all expenses, fees and disbursements of any counsel retained by the
Holders (to be paid pro rata according to the quantity of the securities
registered by the Holders who retained such counsel, or as shall be otherwise
agreed by such Holders) and all underwriting discounts and commissions for
securities registered for sale by them; and
(b) expenses of any registration proceeding begun pursuant to Section
4, the request of which has been subsequently withdrawn by all of the requesting
Holders of Registrable Shares, in which case, unless such expenses are less than
$25,000 and such requested registration is the first time a request has been
made for a registration pursuant to Section 4, such expenses shall be borne by
the Holders of securities requesting or causing such withdrawal unless the
holders of at least two-thirds of the Restricted Stock agree to forfeit their
right to one demand registration pursuant to Section 4; provided further,
however, that if at the time of such withdrawal, the requesting Holders have
learned of a material adverse change in the condition, business, or prospects of
the Company from that known to them at the time of their request, then the
requesting Holders of Registrable Shares shall not be required to pay any of
such expenses (except as provided in clause (a) above) and shall retain their
rights pursuant to Section 4.
-8-
<PAGE> 9
9. Indemnification and Contribution.
(a) To the extent permitted by law, in the event of a registration of
any of the Restricted Stock under the Securities Act pursuant to Section 4, 5 or
6, the Company will indemnify and hold harmless each seller of such Restricted
Stock thereunder, each underwriter of such Restricted Stock thereunder and each
other person, if any, who controls such seller or underwriter within the meaning
of the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which such seller, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Section 4, 5 or 6, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances in which they were made, or arise out of any violation by the
Company of any rule or regulation promulgated under the Securities Act
applicable to the Company and relating to action or inaction required of the
Company in connection with such registration and will reimburse each such
seller, each such underwriter and each such controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by any such seller, any such
underwriter or any such controlling person in writing specifically for use in
such registration statement or prospectus, and except that the foregoing
indemnity agreement is subject to the condition that, insofar as it relates to
any such untrue statement or alleged untrue statement or omission or alleged
omission made in the preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Commission at the time the registration
statement becomes effective or in the amended prospectus filed with the
Commission pursuant to Rule 424(b) or in the prospectus subject to completion
and term sheet under Rule 434 of the Securities Act, which together meet the
requirements of Section 10(a) of the Securities Act (the "Final Prospectus"),
such indemnity agreement shall not inure to the benefit of any such seller, any
such underwriter or any such controlling person, if a copy of the Final
Prospectus was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnishing is required
by the Securities Act; provided, further, that this indemnity shall not be
deemed to relieve any underwriter of any of its due diligence obligations.
(b) To the extent permitted by law, in the event of a registration of
any of the Restricted Stock under the Securities Act pursuant to Section 4, 5 or
6, each seller of such Restricted Stock thereunder, severally and not jointly,
will indemnify and hold harmless the Company, each person, if any, who controls
the Company within the meaning of the Securities Act, each officer of the
Company who signs the registration statement, each director of the Company, each
underwriter and each person who controls any underwriter within the meaning of
the Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such officer, director, underwriter or
controlling person may become subject under
-9-
<PAGE> 10
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Restricted Stock was registered
under the Securities Act pursuant to Section 4, 5 or 6, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances in which
they were made, and will reimburse the Company and each such officer, director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that such seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in reliance
upon and in conformity with information pertaining to such seller furnished in
writing to the Company by such seller specifically for use in such registration
statement or prospectus, and provided, further, that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any such
untrue statement or alleged untrue statement or omission or alleged omission
made in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the Commission at the time the registration statement
becomes effective or in the Final Prospectus, such indemnity agreement shall not
inure to the benefit of the Company, any controlling person or any underwriter,
if a copy of the Final Prospectus was not furnished to the person or entity
asserting the loss, liability, claim or damage at or prior to the time such
furnishing is required by the Securities Act; provided, further, that this
indemnity shall not be deemed to relieve any underwriter of any of its due
diligence obligations; and provided, further, that in no event shall any
indemnity by a seller under this Section 9(b) exceed the gross proceeds from the
offering received by such seller.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 9 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 9 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and counsel to the indemnified party shall have
reasonably concluded that there are reasonable defenses available to the
indemnified party which are different from or additional to those available to
the indemnifying party or if the interests of the indemnified party reasonably
may be deemed to conflict with the
-10-
<PAGE> 11
interests of the indemnifying party, the indemnified party shall have the right
to select a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred. No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any Holder of
Restricted Stock exercising rights under this Agreement, or any controlling
person of any such Holder, makes a claim for indemnification pursuant to this
Section 9 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 9 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling Holder or any such controlling
person in circumstances for which indemnification is provided under this Section
9; then, and in each such case, the Company and such Holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such Holder
is responsible for the portion represented by the percentage that the public
offering price of its Restricted Stock offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such Holder will be
required to contribute any amount in excess of the public offering price of all
such Restricted Stock offered by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.
10. Changes in Common Stock. If, and as often as, there is any change
in the Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Common Stock as so changed.
11. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Stock to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
-11-
<PAGE> 12
(c) furnish to each Holder of Restricted Stock forthwith upon request a
written statement by the Company as to its compliance with the reporting
requirements of such Rule 144 and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed by the Company as such Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such Holder to sell any Restricted Stock without
registration.
The Company shall not be required to effect a registration pursuant to
Section 4, 5 or 6 hereof for any Holder desiring to participate in such
registration who may then dispose of all of its shares of Restricted Stock
pursuant to Rule 144 within the three-month period following such proposed
registration.
12. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including without
limitation transferees of any of the shares of Restricted Stock), whether so
expressed or not, provided, however, that registration rights conferred herein
on the Holders of shares of Restricted Stock shall only inure to the benefit of
a transferee of shares of Restricted Stock if such transferee, in the Company's
reasonable judgment, is not a competitor of the Company, and (i) there is
transferred to such transferee at least 20% of the total shares of Restricted
Stock originally issued to the direct or indirect transferor of such transferee
by the Company or (ii) such transfer is made in connection with the distribution
by a Holder to such Holder's beneficial owners (including, without limitation,
to partners of a general or limited partnership, shareholders of a corporation
and beneficiaries of a trust) of securities of the Holder or to the partners or
employees of the Holder, provided that at the Company's request, one person
shall be designated by such transferees as their agent for purposes of their
rights hereunder and the provision of a notice by the Company to such agent in
accordance with the provisions hereof shall be deemed compliance with such
provisions for all such beneficial owners, partners and employees, and following
such request by the Company, the Company shall have no obligation under said
provisions with respect to such transferees until it shall have been notified of
the name and address of such agent.
(b) Each Holder agrees that it will provide notice to the Company of
any transfer or assignment of its rights or interests hereunder. Any failure by
the Company to fulfill a covenant or obligation hereunder which is the direct
result of a failure by a Holder to provide such notice shall not be deemed to be
a breach of any covenant or obligation hereunder.
Nothing in this Agreement shall be construed to create any rights or
obligations except among the parties hereto and their respective and permitted
successors and assigns, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
Except as provided in Section 12(a) above, all notices, requests,
consents and other communications hereunder shall be in writing, shall be
addressed to the receiving party's address set forth below or to such other
address as a party may designate by notice hereunder, and shall
-12-
<PAGE> 13
be either (i) delivered by hand, (ii) sent by overnight courier, with a receipt
obtained or (iii) sent by registered or certified mail, return receipt
requested, postage prepaid.
If to the Company: Occupational Health + Rehabilitation Inc
175 Derby Street, Suite 36
Hingham, MA 02043-5048
Attn: Chief Executive Officer
If to an Existing Holder: To Existing Holder at the address of such Existing
Holder set forth in Schedule I attached hereto
If to an OH+R Securityholder: To OH+R Securityholder at the address of such OH+R
Securityholder set forth in Schedule II attached
hereto
All notices, requests, consents and other communications hereunder
shall be deemed to have been given (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iii) if sent by registered
or certified mail, on the 5th business day following the day such mailing is
made.
(c) This Agreement shall be governed and construed in accordance with
the law of the Commonwealth of Massachusetts, without giving effect to the
conflict of laws principles thereof.
(d) This Agreement may be amended or modified, and any provision hereof
may be waived in whole or in part, but only by the written consent of the
Company and the holders of at least two-thirds of the aggregate number of
outstanding shares of Restricted Stock held of record by the Holders or their
permitted successors and assigns. This Agreement may be terminated by written
agreement of the Company and the holders of at least two-thirds of the aggregate
number of outstanding shares of Restricted Stock held of record by the Holders
or their permitted successors and assigns.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) Except as otherwise expressly provided herein, the obligations of
the Company to register shares of Restricted Stock under Section 4, 5 or 6 as
provided herein shall terminate on the fifth anniversary of the date of this
Agreement.
(g) If requested by the underwriter or underwriters for an underwritten
public offering of securities of the Company which offering is by the Company,
each Holder of Restricted Stock who is a party to this Agreement (including,
without limitation, a successor or permitted assignee of a party) shall agree
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any shares of Restricted Stock or any other shares of
Common Stock (other than shares being registered in such offering), without the
consent of such underwriter or
-13-
<PAGE> 14
underwriters, for a period of not more than 90 days following the effective date
of the registration statement relating to such offering (unless in any event
such underwriter or underwriters shall, based on then current market conditions,
agree to a shorter period), provided, however, with respect to each such
offering, that all persons entitled to registration rights in such offering who
are not parties to this Agreement, all other persons selling shares of Common
Stock in such offering and all executive officers of the Company shall also have
agreed to be bound by provisions pertaining to the sale of their shares of
Common Stock following such offering which provisions are substantially similar
to the provisions binding upon the Holders of Restricted Stock obligated under
this Agreement with respect to the sale of their shares following such offering.
(h) The Company shall be permitted to require any Holders requesting
registration under Section 4, 5 or 6 to delay any request for registration or to
cease sales under any effective registration statement if the Company is then
contemplating a transaction that could reasonably be expected to be adversely
affected or the Company would be required to make public disclosure of
information, the disclosure of which at such time could reasonably be expected
to cause a material adverse effect upon the Company's business.
In addition, if at the time of any request to register Registrable
Shares pursuant to Section 4 or Section 6 hereof, the Company is engaged or has
fixed plans to engage within ninety (90) days of the time of the request in a
registered public offering as to which such Holders may include Registrable
Shares pursuant to Section 5 hereof, then the Company may at its option direct
that such request be delayed.
(i) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
In the event that any court of competent jurisdiction shall determine
that any provision, or any portion thereof, contained in this Agreement shall be
unreasonable or unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it reasonable and
enforceable, and as so limited shall remain in full force and effect.
(j) The headings and captions of the various subdivisions of this
Agreement are for convenience of reference only and shall in no way modify, or
affect the meaning or construction of any of the terms or provisions hereof.
13. Entire Agreement; Termination of Prior Registration Rights
Agreement
This Agreement embodies the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings related to the subject
matter hereof. The Prior Registration Rights Agreement between Telor and the
Existing Holders listed in Schedule I hereto is hereby terminated.
-14-
<PAGE> 15
[Remainder of page intentionally left blank]
-15-
<PAGE> 16
IN WITNESS WHEREOF, the parties hereof have caused this Agreement to be
executed under seal as of the date first above written.
TELOR OPHTHALMIC
PHARMACEUTICALS, INC.
By:/s/ John K. Herdklotz
-----------------------------------
John K. Herdklotz, Ph.D.,
Acting President and Chief Executive
Officer
AGREED TO AND ACCEPTED as of the
date first above written.
Existing Holders named in Schedule
I to this Agreement:
Hambro International Venture Fund II, L.P.
By: /s/ Edwin A. Goodman
-------------------------------------
Hambro International Venture Fund '85
By: /s/ Edwin A. Goodman
-------------------------------------
KKI - Hambro United States International Venture Fund
By: /s/ Edwin A. Goodman
-------------------------------------
-16-
<PAGE> 17
Asset Management Associates 1989, L.P.
By: AMC Partners 89, L.P., General Partner
By: /s/ Craig C. Taylor
-------------------------------------
Venrock Associates
By: /s/ Ted H. McCourtney
-------------------------------------
Ted H. McCourtney
Venrock Associates II
By: /s/ Ted H. McCourtney
-------------------------------------
Ted H. McCourtney
Prince Venture Partners III, Limited Partnership
By: /s/ Mark J. Gabrielson
-------------------------------------
-17-
<PAGE> 18
[This page intentionally left blank.]
-18-
<PAGE> 19
OH+R Securityholders named in Schedule II
and Schedule III to this Agreement:
/s/ John C. Garbarino
-------------------------------------
John C. Garbarino
/s/ Lynne M. Rosen
-------------------------------------
Lynne M. Rosen
Family Health Care, P.A.
By: /s/ Richard J. Sagall
-------------------------------------
Dr. Richard J. Sagall
The Venture Capital Fund of New England III, L.P.
By: FH & Co. III, L.P., Its General Partner
By: /s/ Kevin J. Dougherty
-------------------------------------
BancBoston Ventures, Inc.
By: /s/ Marcia T. Bates
-------------------------------------
Prince Venture Partners III, Limited Partnership
By: /s/ Angus M. Duthie
-------------------------------------
-19-
<PAGE> 20
Boston Capital Ventures Limited Partnership
By: /s/ A. Dana Callow, Jr.
-------------------------------------
Boston Capital Ventures II Limited Partnership
By: /s/ A. Dana Callow, Jr.
-------------------------------------
/s/ Stephan D. Deutsch
-------------------------------------
Stephan D. Deutsch
/s/ Mark J. DeNino
-------------------------------------
Mark J. DeNino
/s/ Mehrdad Motamed
-------------------------------------
Mehrdad Motamed
/s/ Ira J. Singer
-------------------------------------
Ira J. Singer
/s/ Steven L. Blazar
-------------------------------------
Steven L. Blazar
/s/ Ann Marie Warren
-------------------------------------
Anne Marie Warren
/s/ Konstantine N. Tsiongas
-------------------------------------
Konstantine N. Tsiongas
-20-
<PAGE> 21
SCHEDULE I
Existing Holders
Hambro International Venture Fund II, L.P.
650 Madison Avenue
New York, New York 10022
Hambro International Venture Fund '85
650 Madison Avenue
New York, New York 10022
KKI - Hambro United States International Venture Fund
650 Madison Avenue
New York, New York 10022
Asset Management Associates 1989, L.P.
2275 East Bayshore Drive
Palo Alto, California 94303
Venrock Associates
Room 5508, 30 Rockefeller Plaza
New York, New York 10112
and
755 Page Mill Road
Suite A230
Palo Alto, California 94304
Venrock Associates II, L.P.
Room 5508
30 Rockefeller Plaza
New York, New York 10112
and
755 Page Mill Road
Suite A230
Palo Alto, California 94304
Prince Venture Partners III, Limited Partnership
One Gorham Island
Westport, Connecticut 06880
-21-
<PAGE> 22
SCHEDULE II
OH+R Securityholders
John C. Garbarino
10 Barn Swallow Lane
Duxbury, MA 02332
Lynne M. Rosen
54 Old Oaken Bucket Road
Scituate, MA 02066
Stephan D. Deutsch
82 Freeman Parkway
Providence, RI 02906
Family Health Care, P.A.
Attn: Dr. Richard Sagall
358 Broadway
Bangor, ME 04401
The Venture Capital Fund of New England III, L.P.
Attn: Kevin J. Dougherty
160 Federal Street, 23rd Floor
Boston, MA 02110
BancBoston Ventures, Inc.
Attn: Marcia T. Bates
100 Federal Street
Boston, MA 02110
Prince Venture Partners III, Limited Partnership
Attn: Angus M. Duthie
10 South Wacker Drive
Chicago, IL 60606
Boston Capital Ventures Limited Partnership
Attn: Martin J. Hernon, Esq.
45 School Street
Boston, MA 02108
-22-
<PAGE> 23
Boston Capital Ventures II Limited Partnership
Attn: Martin J. Hernon, Esq.
45 School Street
Boston, MA 02108
Mark J. DeNino
Residence: Pennsylvania
Business Address:
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Mehrdad Motamed
Residence: Rhode Island
Business Address:
Orthopedic Group
588 Pawtucket Avenue
Pawtucket, RI 02860
Ira J. Singer
Residence: Rhode Island
Business Address:
Orthopedic Group
588 Pawtucket Avenue
Pawtucket, RI 02860
Steven L. Blazar
Residence: Rhode Island
Business Address:
Orthopedic Group
588 Pawtucket Avenue
Pawtucket, RI 02860
Anne Marie Warren
3695 Tolland Road
Shaker Heights, OH 44122
Konstantine N. Tsiongas
1106 Maine Road
Tiverton, RI 02878
-23-
<PAGE> 24
SCHEDULE III
Holders of OH+R Warrants
Stephan D. Deutsch
82 Freeman Parkway
Providence, RI 02906
Mark J. DeNino
Residence: Pennsylvania
Business Address:
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Mehrdad Motamed
Residence: Rhode Island
Business Address:
Orthopedic Group
588 Pawtucket Avenue
Pawtucket, RI 02860
Ira J. Singer
Residence: Rhode Island
Business Address:
Orthopedic Group
588 Pawtucket Avenue
Pawtucket, RI 02860
Steven L. Blazar
Residence: Rhode Island
Business Address:
Orthopedic Group
588 Pawtucket Avenue
Pawtucket, RI 02860
-24-
<PAGE> 1
Exhibit 10.02
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
Employment Agreement
June 6, 1996
John C. Garbarino
10 Barn Swallow Lane
Duxbury, MA 02332
As a condition to the closing of that certain Agreement and Plan of
Merger (the "Merger Agreement") dated February 22, 1996, as amended on April 30,
1996 and May 10, 1996 between Occupational Health + Rehabilitation Inc, a
Delaware corporation ("OH+R") and Telor Ophthalmic Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), pursuant to which OH+R will merge with and
into the Company, the Company will be the surviving corporation, the separate
existence of OH+R will cease and the surviving corporation will continue under
the name of "Occupational Health + Rehabilitation Inc" (the "Merger"), the
Company has agreed to enter into an employment agreement with you. As part of
the transactions contemplated by the Merger Agreement, and as an inducement for
the Company to enter into the Merger Agreement, you have agreed to enter into
such an employment agreement containing, among other things, restrictions on
your ability to compete with the business of the Company for a period of time
following your termination of employment. This Agreement shall become effective
upon the consummation of the Merger.
Accordingly, the Company agrees with you as follows:
1. POSITION AND RESPONSIBILITIES.
1.1 You shall serve in an executive capacity as President and Chief
Executive Officer of the Company and shall perform such duties at such place or
places as the Company shall designate.
1.2 You will, to the best of your ability, devote your full time and
best efforts to the performance of your duties hereunder and to the business and
affairs of the Company. You agree to serve as a director, officer or both of the
Company, if elected by the stockholders or the Board of Directors and to perform
such executive duties as may be assigned to you by the Board of Directors from
time to time.
1.3 You will duly, punctually and faithfully perform and observe any
and all rules and regulations which the Company may now or shall hereafter
establish governing the conduct of its business.
<PAGE> 2
2. TERM.
2.1 The term of this Agreement shall be two (2) years commencing with
the date hereof, provided this Agreement and your employment shall automatically
terminate upon your death and may be terminated at any time as provided in
Section 2.2. At the end of such initial term and any subsequent terms, the term
of this Agreement shall automatically be extended for additional one year terms
until this Agreement is terminated in accordance with Section 2.2.
2.2 The Company shall have the right, on written notice to you, to
terminate this Agreement and your employment:
(a) immediately for Cause (as defined in Section 2.4), or
(b) subject to Section 2.5 hereof, at any time without Cause, or
(c) subject to Section 2.5 hereof, in the event of your total
disability which, in the reasonable opinion of the Board of Directors of the
Company, renders you unable or incompetent to carry out your duties,
responsibilities, and assignments for a period of 120 consecutive days or for a
period of 120 days in any 12 month period.
2.3 You shall have the right, on written notice to the Company, to
terminate this Agreement and your employment if you "resign for just cause"
which shall mean a resignation of your employment as a direct result of (a) a
material breach by the Company of its obligations to you, provided that, if such
breach is capable of remedy, a written notice within 60 days of such breach and
opportunity to cure such breach shall be afforded the Company and, in such
event, just cause shall exist if (i) the Company shall fail to cure such breach
within a reasonable period of time not to exceed 15 days or (ii) if such breach
is timely cured, the Company shall repeat such breach; or (b) a significant
decrease in your duties or authority (except in connection with a termination
pursuant to Section 2.2(a)), unless unanimously approved by the Board of
Directors; provided that you have given the Company notice of such decrease
within six months of its occurrence and provided further that it is understood
that the transfer to a Chief Financial Officer of relevant duties and authority
which are now undertaken by you shall not constitute a decrease hereunder.
2.4 The term "Cause" shall mean:
(a) the commission by you of an act of fraud or embezzlement against
the Company or any of its subsidiaries, affiliates or employees or the
commission by you of any other action with the intent to injure the Company;
(b) your having been convicted of a felony; or
(c) a material breach by you of this Agreement or Company rules or any
material misconduct in the performance of your duties or any material neglect of
your duties, as determined by the Board of Directors, provided that, if such
breach, misconduct or neglect is capable of remedy, a written notice and
opportunity to cure such breach, misconduct or neglect
-2-
<PAGE> 3
shall be afforded you and, in such event, Cause shall exist if (i) you shall
fail to cure such breach, misconduct or neglect within a reasonable period of
time not to exceed 15 days or (ii) if such breach, misconduct or neglect is
timely cured, you shall repeat such breach, misconduct or neglect.
2.5 In the event of the termination of this Agreement and your
employment pursuant to Section 2.2(b), Section 2.2(c) or Section 2.3 hereof, the
Company shall be obligated to pay to you as severance pay an aggregate amount
equal to six months' basic salary at the time of termination, less applicable
taxes and other withholding, payable in equal installments on the last day of
each month commencing the last day of the month next following the date of
termination and ending six (6) months thereafter.
2.6 Other than as provided in Section 2.5 or as required by applicable
law, upon termination of this Agreement, the Company shall not be required to
pay for or provide any benefits under Section 3 of this Agreement (other than
those due to the date of termination) or otherwise. On or before the date of
termination of this Agreement, you shall have returned to the Company all
records and other personal property of the Company in your possession.
3. COMPENSATION AND BENEFITS.
3.1 The Company shall pay to you for the services to be rendered
hereunder an annual base salary of $180,000, payable in conformity with the
Company's prevailing practices, subject to increase, but not decrease, in the
discretion of the Board of Directors upon the annual review.
3.2 You shall be entitled to an annual bonus pursuant to a plan to be
approved by the Compensation Committee of the Board of Directors.
3.3 You shall be entitled to paid vacation for four weeks in each
calendar year and to paid public holidays, in accordance with the Company's
policies in effect from time to time.
3.4 The Company shall reimburse you for your reasonable out-of-pocket
ordinary and necessary business expenses incurred in the performance of your
duties hereunder and for which you properly account in accordance with the
Company's procedures in effect from time to time.
3.5 The Company shall pay to you a car allowance of $800 per month.
3.6 You shall be eligible to participate in all employee benefit plans
in effect from time to time generally for employees of the Company, including
health, dental, life insurance and disability insurance plans and policies, and
the Company's 401(k) plan and Section 125 plan.
3.7 The Company may deduct and withhold from all compensation payable
to you all amounts required to be deducted or withheld pursuant to any
applicable laws or regulations, including, but not limited to, all applicable
federal, state or local income tax and FICA.
3.8 The Company will review annually the compensation and benefits
provided to you pursuant to this Agreement.
-3-
<PAGE> 4
4. CONFIDENTIALITY; INVENTIONS.
4.1 You acknowledge that you have executed and are bound by the terms
of the Confidentiality Agreement with the Company dated February 9, 1996 (the
"Confidentiality Agreement").
5. FORMER EMPLOYMENT.
5.1 You represent and warrant that your employment by the Company will
not conflict with and will not be constrained by any prior employment or
consulting agreement or relationship. Subject to Section 5.2, you represent and
warrant that you do not possess confidential information arising out of prior
employment (other than with OH+R) which, in your best judgment, would be
utilized in connection with your employment by the Company in the absence of
Section 5.2.
5.2 If, in spite of the second sentence of Section 5.l, you should find
that confidential information belonging to any former employer (other than OH+R)
might be usable in connection with the Company's business, you will not
intentionally disclose to the Company or use on its behalf any confidential
information belonging to any of your former employers (other than OH+R); but
during your employment by the Company you will use in the performance of your
duties all information which is generally known and used by persons with
training and experience comparable to your own and all information which is
common knowledge in the industry or otherwise legally in the public domain.
6. OTHER ACTIVITIES DURING EMPLOYMENT.
6.1 Except with the prior written consent of the Company, you will not
during the term of this Agreement undertake or engage in any other employment,
occupation or business enterprise other than one in which you are an inactive
investor. This provision shall not be deemed to preclude membership in
professional societies, lecturing or the acceptance of honorary positions, or
publishing newsletters or other forms of professional writings, provided such
activities (a) do not interfere with your full-time employment by the Company,
(b) are not directly or indirectly competitive with the Company, and (c) are not
adverse or antagonistic to the Company, its business or prospects, financial or
otherwise.
6.2 Except as permitted by Section 6.3, you will not acquire, assume or
participate in, directly or indirectly, any position, investment or interest
adverse or antagonistic to the Company, its business or prospects, financial or
otherwise, or take any action towards any of the foregoing.
6.3 During the term of your employment by the Company, you will not,
directly or indirectly, whether as an officer, director, stockholder, partner,
proprietor, associate, representative, or otherwise, become or be interested in
any other person, corporation, firm, partnership or other entity whatsoever
which directly competes with the Company, in any state where the Company does
business, in any line of business engaged in (or planned to be engaged in) by
the Company (or any successor to its business). This Section 6.3 shall not
prohibit your
-4-
<PAGE> 5
ownership as a passive investor of an aggregate of not more than one percent
(1%) of the total stock or other equity interest of any other company,
partnership or other entity.
7. COVENANT NOT TO COMPETE.
7.1 As a result of your position with the Company, you will have access
to significant Confidential Information (as defined in Section 4 above). In
addition, as an inducement for the Company to enter into the Merger Agreement,
you have also agreed to certain restrictions upon your ability to compete with
the business of the Company. Based on the foregoing, and in consideration
thereof and of the payments to be made to you by the Company pursuant to this
Agreement, for a period of six (6) months after the termination of your
employment with the Company, absent the Company's prior written approval, you
will not, within the states where the Company is then doing business or where
the Company proposes to do business based on current negotiations or Company
plans to which significant activities have been directed, directly or
indirectly:
(a) engage in activities for, nor render services to, nor have any
ownership interest in, any firm or business organization which competes with the
Company in any line of business engaged in (or planned to be engaged in) by the
Company, whether now existing or hereafter established, nor shall you engage in
such activities nor render such services to any other person or entity engaged
or about to become engaged in such activities to, for, or on behalf of, any such
firm or business organization;
(b) solicit directly or indirectly on your behalf or for any other
person, firm, partnership, corporation or any other entity any "Clients of the
Company" which, for the purposes of this Agreement, shall include any person,
firm, partnership, corporation or any other entity to whom or to which the
Company has provided any service whatsoever within a period of twelve months
prior to the termination of your employment or to whom or to which the Company
is actively marketing to provide any service at the time of the termination of
your employment;
(c) solicit employees of the Company to leave its employ or offer or
cause to be offered employment to any person who is employed by the Company at
any time during the six months prior to the termination of your employment with
the Company;
(d) entice, induce or encourage any of the Company's other employees to
engage in any activity which, were it done by you, would violate any provision
of Section 4 or this Section 7; or
(e) otherwise attempt to interfere with or disrupt the business or
activities of the Company.
7.2 Upon your written request to the Company specifying the activities
proposed to be conducted by you, the Company may in its discretion give you
written approval(s) to personally engage in any activity or render services
referred to in Section 7.l upon receipt of written assurances (satisfactory to
the Company and its counsel) from you and from your prospective employer(s) that
the integrity of the provisions of Section 4 and Section 7.l will not in any way
be
-5-
<PAGE> 6
employer(s) that the integrity of the provisions of Section 4 and Section 7.1
will not in any way be jeopardized or violated by such activities, provided the
burden of so establishing the foregoing to the satisfaction of the Company and
said counsel shall be upon you and your prospective employer(s).
8. REMEDIES. Notwithstanding any other provision of this Agreement,
your duties under Section 4 and Section 7 shall survive any termination of this
Agreement and your employment with the Company. You acknowledge that a remedy at
law for any breach or threatened breach by you of the provisions of Section 4 or
Section 7 would be inadequate and you therefore agree that the Company shall be
entitled to injunctive relief in case of any such breach or threatened breach.
9. MISCELLANEOUS.
9.1 This Agreement and the rights and obligations of the parties hereto
shall bind and inure to the benefit of any successor or successors of the
Company by reorganization, merger or consolidation and any assignee of all or
substantially all of its business and properties, but, except as to any such
successor or assignee of the Company, neither this Agreement nor any rights or
benefits hereunder may be assigned by the Company or you.
9.2 In case any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein. If, moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent compatible with the
applicable law as it shall then appear.
9.3 Any notice which the Company is required or may desire to give to
you or you are required or may desire to give to the Company shall be in
writing, addressed if to you at the address of record with the Company and if to
the Company at its principal office or at such other address as a party may from
time to time designate in writing and shall be (a) delivered by hand, in which
case, notice is effective upon delivery, (b) made by facsimile transmission or
other electronic means, in which case, notice is effective at the time receipt
thereof has been acknowledged by electronic confirmation or otherwise, (c) sent
by recognized overnight courier, in which case, notice is effective on the next
business day following the date such notice is delivered to the courier service,
or (d) sent by registered or certified mail, return receipt requested, postage
prepaid, in which case, notice is effective on the fifth business day following
the date such mailing is made.
9.4 If either party shall waive any breach of any provision of this
Agreement, he or it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement.
-6-
<PAGE> 7
9.5 The headings of the sections hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof nor to affect the
meaning hereof.
9.6 This Agreement shall be governed by, and construed and enforced in
accordance with, the law of the Commonwealth of Massachusetts.
9.7 The foregoing, together with the Confidentiality Agreement, is the
entire agreement of the parties with respect to the subject matter hereof and
may not be amended, supplemented, cancelled or discharged except by written
instrument executed by both parties hereto. This Agreement supersedes any and
all prior agreements between the Company and you with respect to the matters
covered hereby.
9.8 This Agreement may be executed in counterparts, each of which when
so executed and delivered shall constitute a complete and original instrument
but all of which together shall constitute one and the same agreement, and it
shall not be necessary when making proof of this Agreement or any counterpart
thereof to account for any other counterpart.
If you are in agreement with the foregoing, please so indicate by
signing and returning the enclosed copy of this letter.
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
By /s/ John K. Herdklotz
-------------------------------------------------
Name John K. Herdklotz
Title President and Acting Chief Executive Officer
Accepted and agreed:
/s/ John C. Garbarino
- -------------------------
John C. Garbarino
-7-
<PAGE> 1
Exhibit 10.03
Voting Agreement
This Voting Agreement (this "Agreement") is entered into as of June 6,
1996, by and between Telor Ophthalmic Pharmaceuticals, Inc., a Delaware
corporation ("Telor"), the individuals and entities listed on Schedule A
attached hereto (the "OH+R Securityholders"), and the individuals and entities
listed on Schedule B attached hereto (the "Telor Securityholders"). The "OH+R
Securityholders" and "Telor Securityholders" are sometimes referred to herein
collectively as the "Securityholders" and individually as a "Securityholder".
WHEREAS Telor and Occupational Health + Rehabilitation Inc, a Delaware
corporation ("OH+R"), are parties to that certain Agreement and Plan of Merger,
dated February 22, 1996, as amended on April 30, 1996 and May 10, 1996 (the
"Merger Agreement"), providing for the merger of OH+R with and into Telor, such
that Telor will be the surviving corporation, the separate corporate existence
of OH+R will cease, and the surviving corporation will continue under the name
"Occupational Health + Rehabilitation Inc" (the "Merger");
WHEREAS pursuant to the terms of the Merger Agreement, upon
consummation of the Merger, all shares of capital stock of OH+R and certain
other equity securities of OH+R will be converted into the right to receive
shares of the common stock, $.001 par value per share, of Telor ("Telor Stock");
WHEREAS as a condition to consummation of the Merger, the OH+R
Securityholders are required to enter into this Agreement; and
WHEREAS as a condition to consummation of the Merger, the Telor
Securityholders are required to enter into this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Subject to consummation of the Merger, each Securityholder agrees
that such Securityholder shall vote all shares of Telor Stock owned by such
person or entity to elect at the 1996 annual meeting of the stockholders of
Telor (the "1996 Meeting") the following persons to the Board of Directors of
Telor, each for a three (3) year term:
(a) the Chief Executive Officer of Telor upon consummation of the
Merger, who is expected to be John C. Garbarino;
(b) John K. Herdklotz, Ph.D., or, if he shall be unable or unwilling to
serve, a person designated by those persons designated as Telor
Principal Stockholders on Schedule B; and
<PAGE> 2
(c) Angus M. Duthie, or, if he shall be unable or unwilling to serve, a
person designated by those persons designated as the OH+R Principal
Stockholders on Schedule A.
2. Telor agrees to use its reasonable best efforts to cause the
nominees designated pursuant to Section 1 to be included on the slate of
directors and to be recommended to the stockholders of Telor for election at the
1996 Meeting.
3. If any Securityholder shall fail to vote such Securityholder's
shares of Telor Stock as provided in this Agreement, without further action by
such Securityholder, the President of Telor shall be, and hereby is, irrevocably
constituted the attorney-in-fact and proxy of such Securityholder for the
purpose of voting and shall vote such shares at the 1996 Meeting as provided in
this Agreement and is hereby authorized to revoke any proxy providing for any
other vote of such shares on any proposal for the election of directors at such
1996 Meeting.
4. Each Securityholder represents and warrants that such Securityholder
owns beneficially and of record the shares of capital stock of OH + R, other
equity securities of OH + R and/or shares of Telor Stock set forth opposite the
name of such Securityholder on Schedule A or Schedule B, as the case may be.
5. The terms and provisions of this Agreement may be modified or
amended only by written agreement executed by (a) Telor, (b) holders of a
majority of the shares of capital stock of OH+R (on an as converted basis) or
shares of Telor Stock held by the OH+R Principal Stockholders, and (c) holders
of a majority of the shares of Telor Stock held by Telor Principal Stockholders,
provided, that no amendment shall increase any party's obligations without such
party's consent.
6. Each Securityholder acknowledges and agrees that the rights acquired
by Telor hereunder are unique and that irreparable damage would occur in the
event that any of the provisions of this Agreement to be performed by such
Securityholder were not performed in accordance with their specific terms or
were otherwise breached. Accordingly, in addition to any other remedy to which
Telor is entitled at law or in equity, Telor shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement by each Securityholder and
to enforce specifically the terms and provisions hereof.
7. Each Securityholder represents and warrants that it is not a party
to any agreement or understanding, and the shares capital stock of OH+R, other
equity securities of OH+R and/or shares of Telor Stock owned by such
Securityholder are not subject to any restriction, lien, order, judgment or
decree, which would limit or conflict with such Securityholder's obligations
hereunder.
8. This Agreement shall terminate upon the first to occur of (a) the
termination of the Merger Agreement or (b) immediately after the conclusion of
the 1996 Meeting.
9. Each Securityholder covenants not to sell or otherwise transfer any
shares of capital stock of OH+R, other equity securities of OH+R and/or shares
of Telor Stock owned by it
-2-
<PAGE> 3
between the date hereof and through and including the date of the 1996 Meeting,
unless the transferee agrees in writing to be bound by the terms of this
Agreement.
10. This Agreement, together with the Standstill Agreement dated June
6, 1996 between Telor and certain of the Securityholders, embodies the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not expressly set
forth in this Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.
11. This Agreement may be executed in one or more counterparts, and by
different parties hereto on separate counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
12. All capitalized terms used in this Agreement and not otherwise
defined herein shall have the same meaning in this Agreement and in the Merger
Agreement.
13. This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the law of the
State of Delaware, without giving effect to the conflict of law principles
thereof.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
a sealed instrument as of the day and date first above written.
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
By:/s/ John K. Herdklotz
------------------------------------------------
PRINCE VENTURE PARTNERS III LIMITED
PARTNERSHIP
By: Prince Ventures, L.P., General Partner
By:/s/ Mark J. Gabrielson
------------------------------------------------
THE VENTURE CAPITAL FUND
OF NEW ENGLAND III, L.P.
By: FH & Co. III, L.P., Its General Partner
By:/s/ Kevin J. Dougherty
------------------------------------------------
BANCBOSTON VENTURES, INC.
By:/s/ Marcia T. Bates
------------------------------------------------
/s/ John C. Garbarino
---------------------------------------------------
John C. Garbarino
/s/ Lynne M. Rosen
---------------------------------------------------
Lynne M. Rosen
VENROCK ASSOCIATES
By:/s/ Ted H. McCourtney
------------------------------------------------
-4-
<PAGE> 5
VENROCK ASSOCIATES II, L.P.
By:/s/ Ted H. McCourtney
------------------------------------------
ASSET MANAGEMENT ASSOCIATES, 1989, L.P.
By:/s/ Craig C. Taylor
------------------------------------------
HAMBRO INTERNATIONAL VENTURE FUND II, L.P.
By:/s/ Edwin A. Goodman
------------------------------------------
HAMBRO INTERNATIONAL VENTURE FUND '85
By:/s/ Edwin A. Goodman
------------------------------------------
KKI-HAMBRO UNITED STATES INTERNATIONAL
VENTURE FUND
By:/s/ Edwin A. Goodman
------------------------------------------
HIV-GEN INCORPORATED
By:/s/ David Aarnett
------------------------------------------
/s/ John K. Herdklotz, Ph.D.
---------------------------------------------
John K. Herdklotz, Ph.D.
/s/ Craig C. Taylor
---------------------------------------------
Craig C. Taylor
/s/ Patrick F. Latterell
---------------------------------------------
Patrick F. Latterell
/s/ Charles L. Dimmler, III
---------------------------------------------
Charles L. Dimmler, III
-5-
<PAGE> 6
/s/ Mark J. Gabrielson
------------------------------------------
Mark J. Gabrielson
/s/ John F. Chappell
------------------------------------------
John F. Chappell
/s/ Jane E. Rady
------------------------------------------
Jane E. Rady
-6-
<PAGE> 7
Schedule A
OH+R Securityholders
PRINCE VENTURE PARTNERS III LIMITED PARTNERSHIP
THE VENTURE CAPITAL FUND OF NEW ENGLAND III, L.P.
BANCBOSTON VENTURES, INC.
JOHN C. GARBARINO
LYNNE M. ROSEN
OH+R Principal Stockholders
PRINCE VENTURE PARTNERS III LIMITED PARTNERSHIP
THE VENTURE CAPITAL FUND OF NEW ENGLAND III, L.P.
BANCBOSTON VENTURES, INC.
-7-
<PAGE> 8
Schedule B
Telor Securityholder
PRINCE VENTURE PARTNERS III LIMITED PARTNERSHIP
VENROCK ASSOCIATES
VENROCK ASSOCIATES II, L.P.
ASSET MANAGEMENT ASSOCIATES, 1989, L.P.
HAMBRO INTERNATIONAL VENTURE FUND II, L.P.
HAMBRO INTERNATIONAL VENTURE FUND '85
KKI-HAMBRO UNITED STATES INTERNATIONAL VENTURE FUND
HIV-GEN INCORPORATED
PATRICK F. LATTERELL
JOHN K. HERDKLOTZ, PH.D.
CRAIG C. TAYLOR
CHARLES L. DIMMLER, III
MARK J. GABRIELSON
JOHN F. CHAPPELL
JANE E. RADY
Telor Principal Stockholders
PRINCE VENTURE PARTNERS III, LIMITED PARTNERSHIP
VENROCK ASSOCIATES
VENROCK ASSOCIATES II, L.P.
ASSET MANAGEMENT ASSOCIATES, 1989, L.P.
HAMBRO INTERNATIONAL VENTURE FUND II, L.P.
HAMBRO INTERNATIONAL VENTURE FUND '85
KKI-HAMBRO UNITED STATES INTERNATIONAL VENTURE FUND
HIV-GEN INCORPORATED
-8-
<PAGE> 1
Exhibit 10.04
Standstill Agreement
This Standstill Agreement (this "Agreement") is entered into as of the
June __, 1996, by and between Telor Ophthalmic Pharmaceuticals, Inc., a Delaware
corporation ("Telor"), the individuals and entities listed on Schedule A
attached hereto (the "OH+R Securityholders"), and the individuals and entities
listed on Schedule B attached hereto (the "Telor Securityholders"). The "OH+R
Securityholders" and "Telor Securityholders" are sometimes referred to herein
collectively as the "Securityholders" and individually as a "Securityholder."
WHEREAS Telor and Occupational Health+Rehabilitation Inc, a Delaware
corporation ("OH+R"), are parties to that certain Agreement and Plan of Merger,
dated as of February 22, 1996, as amended on April 30, 1996 and May 10, 1996
(the "Merger Agreement"), providing for the merger of OH+R with and into Telor,
such that Telor will be the surviving corporation, the separate corporate
existence of OH+R will cease, and the surviving corporation will continue under
the name "Occupational Health + Rehabilitation Inc" (the "Merger");
WHEREAS pursuant to the terms of the Merger Agreement, upon
consummation of the Merger, all shares of capital stock of OH+R and certain
other equity securities of OH+R will be converted into the right to receive
shares of the common stock, $.001 par value per share, of Telor ("Telor Stock");
WHEREAS as a condition to consummation of the Merger, those holders of
shares of capital stock of OH+R and/or other equity securities of OH+R who will
receive ten percent (10%) or more of the shares of Telor Stock to be issued in
the Merger, the holders of shares of Series 1 Preferred Stock, $.01 par value
per share, and Series 2 Preferred Stock, $.01 par value per share, of OH+R, and
all persons who are directors or officers of OH+R as of immediately prior to the
consummation of the Merger are required to enter into this Agreement; and
WHEREAS as a condition to consummation of the Merger, those holders of
Telor Stock which have an affiliated person on the Board of Directors of Telor
and those persons who are directors or officers of Telor, each as of immediately
prior to the consummation of the Merger, are required to enter into this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Each Securityholder agrees that, commencing as of the date set forth
above, such Securityholder will not offer, sell, contract to sell or otherwise
dispose (or enter into any transaction which is designed to, or could be
expected to, result in the disposition by any person or entity) of any shares of
Telor Stock (including, without limitation, shares which may be deemed to be
beneficially owned by such person or entity in accordance with the Rules and
Regulations of the Securities and Exchange Commission), any security convertible
into or exercisable for Telor Stock, or any rights to purchase or acquire Telor
Stock, from the date of this Agreement until that date which is one hundred
eighty (180) days after the date of the Effective Time of the Merger.
Notwithstanding the restrictions set forth in the preceding sentence, a
Securityholder may make transfers (i) with the prior written consent of Telor,
(ii) pursuant to a bona fide gift to a person or entity that agrees in writing
to be bound by the terms of the Agreement, or (iii) as part of a distribution to
limited partners of the Securityholder that agree in writing to be bound by the
<PAGE> 2
terms of this Agreement. In order to enable Telor to enforce the foregoing
restrictions, each Securityholder consents to the placing of legends on
certificates representing, and/or stop transfer orders with Telor's transfer
agent with respect to, any shares of Telor Stock registered in the name of such
Securityholder, or beneficially owned by such Securityholder.
2. The terms and provisions of this Agreement may be modified or
amended only by written agreement executed by (a) Telor, (b) holders of a
majority of the shares of capital stock of OH+R (on an as converted basis) and
shares of Telor Stock held by those persons designated as the OH+R Principal
Stockholders on Schedule A, and (c) holders of a majority of the shares of Telor
Stock held by those persons designated as the Telor Principal Stockholders on
Schedule B, provided, that no amendment shall increase any party's obligations
without such party's consent.
3. This Agreement, together with the Voting Agreement to be executed in
connection with the Merger Agreement, embodies the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes all prior oral or written agreements and understandings relating
to the subject matter hereof. No statement, representation, warranty, covenant
or agreement of any kind not expressly set forth in this Agreement shall affect,
or be used to interpret, change or restrict, the express terms and provisions of
this Agreement.
4. Each Securityholder acknowledges and agrees that the rights acquired
by Telor hereunder are unique and that irreparable damage would occur in the
event that any of the provisions of this Agreement to be performed by such
Securityholder were not performed in accordance with their specific terms or
were otherwise breached. Accordingly, in addition to any other remedy to which
Telor is entitled at law or in equity, Telor shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement by the Securityholders and
to enforce specifically the terms and provisions hereof.
5. No failure or delay by a party hereto in exercising any right, power
or remedy under this Agreement, and no course of dealing between the parties
hereto, shall operate as a waiver of any such right, power or remedy of the
party. No single or partial exercise of any right, power or remedy under this
Agreement by a party hereto, nor any abandonment or discontinuance of steps to
enforce any such right, power or remedy, shall preclude such party from any
other or further exercise thereof or the exercise of any other right, power or
remedy hereunder. The election of any remedy by a party hereto shall not
constitute a waiver of the right of such party to pursue other available
remedies. No notice to or demand on a party not expressly required under this
Agreement shall entitle the party receiving such notice or demand to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the party giving such notice or demand to any other or
further action in any circumstances without such notice or demand.
6. Each Securityholder represents and warrants that it is not a party
to any agreement or understanding, and the shares of capital stock of OH+R,
other equity securities of OH+R and/or shares of Telor Stock owned by it are not
subject to any restriction, lien, order, judgment or decree, which would limit
or conflict with its obligations hereunder.
7. This Agreement shall terminate upon the first to occur of (a) the
termination of the Merger Agreement or (b) the date which is one hundred eighty
(180) days after the date of the Effective Time of the Merger.
8. All capitalized terms used herein and not otherwise defined herein
shall have the same meanings herein as in the Merger Agreement.
-2-
<PAGE> 3
9. This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the law of the
State of Delaware, without giving effect to the conflict of law principles
thereof.
10. This Agreement may be executed in one or more counterparts, and by
different parties hereto on separate counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
[Remainder of page intentionally left blank]
-3-
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
a sealed instrument as of the day and date first above written.
TELOR OPHTHALMIC PHARMACEUTICALS, INC.
By: /s/ John K. Herdklotz
-------------------------------------------------
PRINCE VENTURE PARTNERS III LIMITED
PARTNERSHIP
By: Prince Ventures, L.P., General Partner
By: /s/ Angus M. Duthie
-------------------------------------------------
THE VENTURE CAPITAL FUND
OF NEW ENGLAND III, L.P.
By: FH & Co. III, L.P., Its General Partner
By: /s/ Kevin J. Dougherty
-------------------------------------------------
BANCBOSTON VENTURES, INC.
By: /s/ Marcia T. Bates
-------------------------------------------------
BOSTON CAPITAL VENTURES LIMITED PARTNERSHIP
By: /s/ A. Dana Callow, Jr.
-------------------------------------------------
BOSTON CAPITAL VENTURES II LIMITED PARTNERSHIP
By: /s/ A. Dana Callow, Jr.
-------------------------------------------------
-4-
<PAGE> 5
/s/ John C. Garbarino
-----------------------------------------------------
John C. Garbarino
/s/ Lynne M. Rosen
-----------------------------------------------------
Lynne M. Rosen
VENROCK ASSOCIATES
By: /s/ Ted H. McCourtney
--------------------------------------------------
VENROCK ASSOCIATES II, L.P.
By: /s/ Ted H. McCourtney
--------------------------------------------------
ASSET MANAGEMENT ASSOCIATES, 1989, L.P.
By: AMC Partners 89, L.P., General Partner
By: /s/ Craig C. Taylor
--------------------------------------------------
HAMBRO INTERNATIONAL VENTURE FUND II, L.P.
By: /s/ Edwin A. Goodman
--------------------------------------------------
HAMBRO INTERNATIONAL VENTURE FUND '85
By: /s/ Edwin A. Goodman
--------------------------------------------------
KKI-HAMBRO UNITED STATES INTERNATIONAL VENTURE FUND
By: /s/ Edwin A. Goodman
--------------------------------------------------
-5-
<PAGE> 6
HIV-GEN INCORPORATED
By: /s/ David Barnett
--------------------------------------------------
By: /s/ John K. Herdklotz
--------------------------------------------------
John K. Herdklotz, Ph.D.
By: /s/ Craig C. Taylor
--------------------------------------------------
Craig C. Taylor
By: /s/ Patrick F. Latterell
--------------------------------------------------
Patrick F. Latterell
By: /s/ Charles L. Dimmler, III
--------------------------------------------------
Charles L. Dimmler, III
By: /s/ Mark J. Gabrielson
--------------------------------------------------
Mark J. Gabrielson
By: /s/ John F. Chappell
--------------------------------------------------
John F. Chappell
By: /s/ Jane E. Rady
--------------------------------------------------
Jane E. Rady
-6-
<PAGE> 7
SCHEDULE A
OH+R Securityholders
PRINCE VENTURE PARTNERS III LIMITED PARTNERSHIP
THE VENTURE CAPITAL FUND OF NEW ENGLAND III, L.P.
BANCBOSTON VENTURES, INC.
BOSTON CAPITAL VENTURES LIMITED PARTNERSHIP
BOSTON CAPITAL VENTURES II LIMITED PARTNERSHIP
JOHN C. GARBARINO
LYNNE M. ROSEN
OH+R Principal Stockholders
PRINCE VENTURE PARTNERS III LIMITED PARTNERSHIP
THE VENTURE CAPITAL FUND OF NEW ENGLAND III, L.P.
BANCBOSTON VENTURES, INC.
BOSTON CAPITAL VENTURES LIMITED PARTNERSHIP
BOSTON CAPITAL VENTURES II LIMITED PARTNERSHIP
JOHN C. GARBARINO
-7-
<PAGE> 8
SCHEDULE B
Telor Securityholders
PRINCE VENTURE PARTNERS III, L.P.
VENROCK ASSOCIATES
VENROCK ASSOCIATES II, L.P.
ASSET MANAGEMENT ASSOCIATES, 1989, L.P.
HAMBRO INTERNATIONAL VENTURE FUND II, L.P.
HAMBRO INTERNATIONAL VENTURE FUND '85
KKI-HAMBRO UNITED STATES INTERNATIONAL VENTURE FUND
HIV-GEN INCORPORATED
PATRICK F. LATTERELL
JOHN K. HERDKLOTZ, PH.D.
CRAIG C. TAYLOR
CHARLES L. DIMMLER, III
MARK J. GABRIELSON
JOHN F. CHAPPELL
JANE E. RADY
Telor Principal Stockholders
PRINCE VENTURE PARTNERS III, L.P.
VENROCK ASSOCIATES
VENROCK ASSOCIATES II, L.P.
ASSET MANAGEMENT ASSOCIATES, 1989, L.P.
HAMBRO INTERNATIONAL VENTURE FUND II, L.P.
HAMBRO INTERNATIONAL VENTURE FUND '85
KKI-HAMBRO UNITED STATES INTERNATIONAL VENTURE FUND
HIV-GEN INCORPORATED
-8-
<PAGE> 1
EXHIBIT 11.01
OCCUPATIONAL HEALTH + REHABILITATION INC
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
1996 1995 1996 1995
-------------------------- --------------------------
<S> <C> <C> <C> <C>
PRIMARY
Weighted average OH+R common stock
outstanding during the period, as converted 95,521 92,300 95,503 92,300
Conversion of OH+R preferred stock
into common stock 585,901 568,479 585,901 548,865
Weighted average Telor common stock from date
of merger 207,297 0 103,649 0
-------------------------- --------------------------
Total 888,719 660,779 785,053 641,165
========================== ==========================
Net loss $(302,692) $(272,194) $(660,221) $(761,216)
========================== ==========================
Loss per share $ (0.34) $ (0.41) $ (0.84) $ (1.19)
========================== ==========================
FULLY DILUTED
Weighted average OH+R common stock
outstanding during the period, as converted 95,521 92,300 95,503 92,300
Conversion of OH+R preferred stock into
common stock 585,901 568,479 585,901 548,865
Weighted average Telor common stock from
date of merger 207,297 0 103,649 0
-------------------------- --------------------------
Total 888,719 660,779 785,053 641,165
========================== ==========================
Net loss $(302,692) $(272,194) $(660,221) $(761,216)
========================== ==========================
Loss per share - fully diluted $ (0.34) $ (0.41) $ (0.84) $ (1.19)
========================== ==========================
</TABLE>
Notes:
The weighted average number of shares outstanding for the three and six months
ended June 30, 1995 are based on the number of OH+R shares of common stock
exchanged for common shares of the Company, and assume the retroactive
conversion of OH+R's preferred stock.
The effect of options and warrants is not considered as it would be
antidilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 3502182
<SECURITIES> 0
<RECEIVABLES> 617908
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5231971
<PP&E> 1754925
<DEPRECIATION> 760891
<TOTAL-ASSETS> 8330370
<CURRENT-LIABILITIES> 2667930
<BONDS> 0
0
0
<COMMON> 1467
<OTHER-SE> 9835336
<TOTAL-LIABILITY-AND-EQUITY> 8330370
<SALES> 4009010
<TOTAL-REVENUES> 4101886
<CGS> 4563070
<TOTAL-COSTS> 4763194
<OTHER-EXPENSES> (130354)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 129267
<INCOME-PRETAX> (660221)
<INCOME-TAX> 0
<INCOME-CONTINUING> (660221)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (660221)
<EPS-PRIMARY> (2.39)
<EPS-DILUTED> (2.39)
</TABLE>
