<PAGE>
As filed with the Securities and Exchange Commission on August 19, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________
OCCUPATIONAL HEALTH + REHABILITATION INC
(Exact name of registrant as specified in its charter)
Delaware 13-3464527
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
______________
175 Derby Street, Suite 36, Hingham, MA 02043
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
______________
Occupational Health + Rehabilitation Inc
1998 Stock Plan
(FULL TITLE OF THE PLAN)
______________
John C. Garbarino
President and Chief Executive Officer
Occupational Health + Rehabilitation Inc
175 Derby Street, Suite 36
Hingham, MA 02043
(NAME AND ADDRESS OF AGENT FOR SERVICE)
______________
(781) 741-5175
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
______________
Copy to:
Donna L. Brooks, Esq.
Shipman & Goodwin LLP
One American Row
Hartford, Connecticut 06103
(860) 251-5000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================================
PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER UNIT (1) PRICE (1) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.001...................... 150,000 $6.875 $1,031,250 $304.22
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(h), the proposed maximum offering price per share is
based on the average of the bid and asked price per share of $6.875 on
August 14, 1998, as reported by the Nasdaq Stock Market.
- -------------------------------------------------------------------------------
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The Section 10(a) prospectus being delivered by Occupational Health +
Rehabilitation Inc (the "Company") to participants in the Company's 1998 Stock
Plan, as required by Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"), has been prepared in accordance with the requirements of Form
S-8 and relates to shares of Common Stock, par value $.001 per share, issued or
reserved for issuance pursuant to awards granted under the 1998 Stock Plan. The
information with respect to awards granted under the 1998 Stock Plan required in
the Section 10(a) prospectus is included in documents being maintained and
delivered by the Company as required by Rule 428 under the Securities Act. The
Company shall provide to participants a written statement advising them of the
availability without charge, upon written or oral request, of documents
incorporated by reference herein, as is required by Item 2 of Part I of
Form S-8.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
registration statement:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1997;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998; and
(c) The description of the Company's Common Stock contained in its
registration statement on Form 8-A effective on May 10, 1993, which description
was amended on Form 8-A/A filed on May 24, 1993, and any amendment or report
filed for the purpose of further updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all such securities then remaining unsold, shall be deemed to be incorporated by
reference in this registration statement and to be part thereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference in this registration statement shall be
deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
This Item is not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
This Item is not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Restated Certificate of Incorporation provides that the
personal liability of the directors of the Company shall be limited to the
fullest extent permitted by the provisions of Section 102(b)(7) of the Delaware
General Corporation Law, as amended (the "DGCL"). Section 102(b)(7) of the DGCL
generally provides that no director shall be liable personally to the
II-1
<PAGE>
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director; however, the Restated Certificate of Incorporation does not
eliminate the liability of a director for (i) any breach of the director's duty
of loyalty to the Company or its stockholders; (ii) acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of law;
(iii) acts or omissions in respect of certain unlawful dividend payments or
stock redemptions or repurchases; or (iv) any transaction from which such
director derives improper personal benefit. The effect of this provision is to
eliminate the rights of the Company and its stockholders (through stockholders'
derivative suits on behalf of the Company) to recover monetary damages against a
director for breach of his or her fiduciary duty of care as a director
(including breaches resulting from negligent or grossly negligent behavior)
except in the situations described in clauses (i) through (iv) above. The
limitations summarized above, however, do not affect the ability of the Company
or its stockholders to seek nonmonetary remedies, such as an injunction or
rescission, against a director for breach of his or her fiduciary duty.
In addition, the Company's Restated Certificate of Incorporation and
Restated Bylaws provide that the Company shall, to the fullest extent permitted
by Section 145 of the DGCL, indemnify all persons whom it may indemnify pursuant
to Section 145 of the DGCL. Section 145 of the DGCL permits a company to
indemnify an officer or director who was or is a party or is threatened to be
made a party to any proceeding because of his or her position, if the officer or
director acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Company and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
The Company maintains insurance for officers and directors against certain
liabilities, including liabilities under the Securities Act. The effect of this
insurance is to indemnify any officer or director of the Company against
expenses, including, without limitation, attorneys' fees, judgments, fines and
amounts paid in settlement, incurred by an officer or director upon a
determination that such person acted in good faith.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
This Item is not applicable.
ITEM 8. EXHIBITS.
Exhibit No. Description
- ---------- -----------
4.1(a) Restated Certificate of Incorporation (Exhibit 4.1 to Form 8-K/A
dated June 6, 1996, File No. 0-21428). (1)
4.1(b) Certificate of Designations (Exhibit 4.1 to Form 8-K/A dated November
6, 1996, File No. 0-21428). (1)
4.2 Restated Bylaws, as amended (Exhibit 3.02 to Form 10-K for the year
ended December 31, 1996, File No. 0-21428). (1)
II-2
<PAGE>
5.1 Opinion of Shipman & Goodwin LLP as to the legality of the securities
being registered. (2)
23.1 Consent of Shipman & Goodwin LLP (included in Exhibit 5.1). (2)
23.2 Consent of Ernst & Young LLP. (2)
24.1 Power of Attorney (included in the signature page of this
registration statement). (2)
99.1 The Company's 1998 Stock Plan. (2)
__________________________
(1) Incorporated by reference.
(2) Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13 or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the
II-3
<PAGE>
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hingham, Commonwealth of Massachusetts, on August 19,
1998.
OCCUPATIONAL HEALTH + REHABILITATION INC
By: /s/ John C. Garbarino
--------------------------------------------
John C. Garbarino,
President and Chief Executive Officer
POWER OF ATTORNEY
Know All Persons by These Presents, that each person whose signature
appears below constitutes and appoints John C. Garbarino and Richard P. Quinlan,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to file same, with all
exhibits thereto, and other documents in connection therewith, with full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, of their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
___________________
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John C. Garbarino President, Chief Executive Officer August 19, 1998
- ----------------------------------------------- (principal executive officer) and
John C. Garbarino Director
/s/ Richard P. Quinlan Chief Financial Officer and General August 19, 1998
- ----------------------------------------------- Counsel (principal financial officer)
Richard P. Quinlan
/s/ Edward L. Cahill Director August 19, 1998
- -----------------------------------------------
Edward L. Cahill
/s/ Kevin J. Dougherty Director August 19, 1998
- -----------------------------------------------
Kevin J. Dougherty
/s/ Angus M. Duthie Director August 19, 1998
- -----------------------------------------------
Angus M. Duthie
/s/ Donald W. Hughes Director August 19, 1998
- -----------------------------------------------
Donald W. Hughes
/s/ Frank H. Leone Director August 19, 1998
- -----------------------------------------------
Frank H. Leone
/s/ Steven W. Garfinkle Director August 19, 1998
- -----------------------------------------------
Steven W. Garfinkle
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
<S> <C>
4.1(a) Restated Certificate of Incorporation (Exhibit 4.1 to Form
8-K/A dated June 6, 1996, File No. 0-21428). (1)
4.1(b) Certificate of Designations (Exhibit 4.1 to Form 8-K/A
dated November 6, 1996, File No. 0-21428). (1)
4.2 Restated Bylaws, as amended (Exhibit 3.02 to Form 10-K for
the year ended December 31, 1996, File No. 0-21428). (1)
5.1 Opinion of Shipman & Goodwin LLP as to the legality of the
securities being registered. (2)
23.1 Consent of Shipman & Goodwin LLP (included in Exhibit 5.1).
(2)
23.2 Consent of Ernst & Young LLP. (2)
24.1 Power of Attorney (included in the signature page of this
registration statement). (2)
99.1 The Company's 1998 Stock Plan. (2)
- --------------------------
(1) Incorporated by reference.
(2) Filed herewith.
</TABLE>
<PAGE>
Exhibit 5.1
Shipman & Goodwin LLP One American Row
Counselors at Law Hartford, CT 06103-2819
Tel: (860) 251-5000
August 20, 1998
Occupational Health + Rehabilitation Inc
175 Derby Street, Suite 36
Hinglam, MA 02043
Re: Registration Statement on Form S-8
Relating to Shares of Common Stock of
Occupational Health + Rehabilitation Inc Issuable under its 1998
----------------------------------------------------------------
Stock Plan
----------
Ladies and Gentlemen:
As counsel for Occupational Health + Rehabilitation Inc, a Delaware
corporation (the "Company"), we are furnishing you with this opinion in
connection with the issuance of a maximum of 150,000 shares of Common Stock of
the Company (the "Shares") pursuant to the above-referenced Plan (the "Plan"),
to which the above-referenced Registration Statement relates.
We have examined such originals or copies of corporate records of the Company,
certificates of public officials and of officers of the Company and other
documents, have obtained such assurances from officers and representatives of
the Company, have made such other factual inquiries, and have made such
examination of law, as we have deemed proper and necessary to enable us to
render this opinion.
Based on the foregoing, it is our opinion that the Shares will, when issued as
contemplated by the Plan and said Registration Statement, be duly authorized and
legally issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Shipman & Goodwin LLP
<PAGE>
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the 1998 Stock Plan of Occupational Health + Rehabilitation
Inc of our report dated March 11, 1998, with respect to the consolidated
financial statements and schedule of Occupational Health + Rehabilitation Inc
included in its Annual Report on Form 10-K for the year ended December 31, 1997,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
August 20, 1998
<PAGE>
Exhibit 99.1
OCCUPATIONAL HEALTH + REHABILITATION INC
1998 STOCK PLAN
SECTION 1. PURPOSE
- --------- -------
The purpose of the 1998 Stock Plan (the "Plan") is to secure for
Occupational Health + Rehabilitation Inc (the "Company"), its parent (if any)
and any subsidiaries of the Company (collectively the "Related Companies") the
benefits arising from capital stock ownership by those employees, directors,
officers and consultants of the Company and any Related Companies who will be
responsible for the Company's future growth and continued success.
The Plan will provide a means whereby (a) employees of the Company and
any Related Companies may purchase stock in the Company pursuant to options
which qualify as "incentive stock options" ("Incentive Stock Options") under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), (b)
directors, employees and consultants of the Company and any Related Companies
may purchase stock in the Company pursuant to options granted hereunder which do
not qualify as Incentive Stock Options ("Non-Qualified Option" or "Non-Qualified
Options"); (c) directors, employees and consultants of the Company and any
Related Companies may be awarded stock in the Company ("Awards"); and (d)
directors, employees and consultants of the Company and any Related Companies
may receive stock appreciation rights ("SARs"). Both Incentive Stock Options
and Non-Qualified Options are referred to hereafter individually as an "Option"
and collectively as "Options." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation" as those
terms are defined in Section 424 of the Code. Options, Awards and SARs are
referred to hereafter individually as a "Plan Benefit" and collectively as "Plan
Benefits." Directors, employees and consultants of the Company and any Related
Companies are referred to herein as "Participants."
SECTION 2. ADMINISTRATION
- --------- --------------
2.1 BOARD OF DIRECTORS AND THE COMMITTEE. The Plan will be
------------------------------------
administered by the Board of Directors of the Company whose construction and
interpretation of the terms and provisions hereof shall be final and conclusive.
Any director to whom a Plan Benefit is awarded shall be ineligible to vote upon
his or her Plan Benefit, but Plan Benefits may be granted to any such director
by a vote of the remainder of the directors, except as limited below. The Board
of Directors may in its sole discretion grant Options, issue shares upon
exercise of such Options, grant Awards and grant SARs all as provided in the
Plan. The Board of Directors shall have authority, subject to the express
provisions of the Plan, to construe the Plan and its related agreements, to
prescribe, amend and rescind rules and
<PAGE>
regulations relating to the Plan, to determine the terms and provisions of the
respective Option, Award and SAR agreements, which need not be identical, and to
make all other determinations in the judgment of the Board of Directors
necessary or desirable for the administration of the Plan. The Board of
Directors may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any related agreement in the manner and to the
extent it shall deem expedient to carry the Plan into effect, and it shall be
the sole and final judge of such expediency. No director shall be liable for any
action or determination made in good faith. The Board of Directors may delegate
any or all of its powers under the Plan to a Compensation Committee or other
Committee (the "Committee") appointed by the Board of Directors consisting of at
least two members of the Board of Directors. If Plan Benefits are to be approved
solely by a Committee, the members of the Committee shall at all times be: (i)
"outside directors" as that term is defined in Treas. Reg. (S)1.162-27(e)(3) (or
any successor regulation); and (ii) "non-employee directors" within the meaning
of Rule 16b-3 (or any successor rule) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as such terms are interpreted from time to
time. If the Committee is so appointed, all references to the Board of Directors
herein shall mean and relate to such Committee, unless the context otherwise
requires.
2.2 COMPLIANCE WITH SECTION 162(m) OF THE CODE. Section 162(m) of
------------------------------------------
the Code generally limits the tax deductibility to publicly held companies of
compensation in excess of $1,000,000 paid to certain "covered employees"
("Covered Employees"). It is the Company's intention to preserve the
deductibility of such compensation to the extent it is reasonably practicable
and to the extent it is consistent with the Company's compensation objectives.
For purposes of this Plan, Covered Employees of the Company shall be those
employees of the Company described in Section 162(m)(3) of the Code.
SECTION 3. ELIGIBILITY
- --------- -----------
3.1 INCENTIVE STOCK OPTIONS. Participants who are employees shall be
-----------------------
eligible to receive Incentive Stock Options pursuant to the Plan; provided that
no person shall be granted any Incentive Stock Option under the Plan who, at the
time such Option is granted, owns, directly or indirectly, Common Stock of the
Company possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of its Related Companies, unless the
requirements of Section 6.6(b) hereof are satisfied. In determining whether
this 10% threshold has been reached, the stock attribution rules of Section
424(d) of the Code shall apply. Directors who are not regular employees are not
eligible to receive Incentive Stock Options.
3.2 NON-QUALIFIED OPTIONS, AWARDS AND SARs. Non-Qualified Options,
--------------------------------------
Awards and SARs may be granted to any Participant.
2
<PAGE>
3.3 GENERALLY. The Board of Directors may take into consideration a
---------
Participant's individual circumstances in determining whether to grant an
Incentive Stock Option, a Non-Qualified Option, an Award or an SAR. Granting of
any Option, Award or SAR for any individual shall neither entitle that
individual to, nor disqualify that individual from, participation in any other
grant of Plan Benefits.
SECTION 4. STOCK SUBJECT TO PLAN
- --------- ---------------------
Subject to adjustment as provided in Sections 10 and 11 hereof, the
stock to be offered under the Plan shall consist of shares of the Company's
Common Stock, $.001 par value, and the maximum number of shares which will be
reserved for issuance, and in respect of which Plan Benefits may be granted
pursuant to the provisions of the Plan, shall not exceed in the aggregate
150,000 shares. Such shares may be authorized and unissued shares, treasury
shares or shares purchased on the open market. If an Option or SAR granted
hereunder shall expire or terminate for any reason without having been exercised
in full, or if the Company shall reacquire any unvested shares issued pursuant
to Awards, the unpurchased shares subject thereto and any unvested shares so
reacquired shall again be available for subsequent grants of Plan Benefits under
the Plan. Stock issued pursuant to the Plan may be subject to such restrictions
on transfer, repurchase rights or other restrictions as shall be determined by
the Board of Directors.
SECTION 5. GRANTING OF OPTIONS, SARs AND AWARDS
- --------- ------------------------------------
Plan Benefits may be granted under the Plan at any time after January
16, 1998 (the date of approval of the Plan by the Board of Directors), subject
to approval of the Plan by the stockholders of the Company, and prior to January
16, 2008; provided, however, that nothing in the Plan shall be construed to
obligate the Company to grant Plan Benefits to a Participant or anyone claiming
under or through a Participant. The date of grant of Plan Benefits under the
Plan will be the date specified by the Board of Directors at the time the Board
of Directors grants such Plan Benefits; provided, however, that such date shall
not be prior to the date on which the Board of Directors takes such action. The
Board of Directors shall have the right, with the consent of a Participant, to
convert an Incentive Stock Option granted under the Plan to a Non-Qualified
Option pursuant to Section 6.7. Plan Benefits may be granted alone or in
addition to other grants under the Plan.
SECTION 6. SPECIAL PROVISIONS APPLICABLE TO OPTIONS AND SARs
- --------- -------------------------------------------------
6.1 PURCHASE PRICE AND SHARES SUBJECT TO OPTIONS AND SARs.
-----------------------------------------------------
(a) The purchase price per share of Common Stock deliverable upon
the exercise of an Option shall be determined by the Board of Directors;
provided,
--------
3
<PAGE>
however, that (i) in the case of an Incentive Stock Option, the
-------
exercise price shall not be less than 100% of the fair market value of such
Common Stock on the day the Option is granted (except as modified in
Section 6.6(b) hereof), and (ii) in the case of a Non-Qualified Option, the
exercise price shall not be less than 50% of the fair market value on the
day such Option is granted.
(b) Options granted under the Plan may provide for the payment of
the exercise price by delivery of (i) cash or a check payable to the order
of the Company in an amount equal to the exercise price of such Options,
(ii) shares of Common Stock of the Company owned by the Participant having
a fair market value equal in amount to the exercise price of the Options
being exercised, or (iii) any combination of (i) and (ii). The fair market
value of any shares of the Company's Common Stock which may be delivered
upon exercise of an Option shall be determined by the Board of Directors.
The Board of Directors may also permit Participants, either on a selective
or aggregate basis, to simultaneously exercise Options and sell the shares
of Common Stock thereby acquired, pursuant to a brokerage or similar
arrangement, approved in advance by the Board of Directors, and to use the
proceeds from such sale as payment of the purchase price of such shares.
(c) If, at the time an Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes
discussed in this sentence are available prior to the date such Option is
granted (the "Determination Date") and shall mean (i) the average (on the
Determination Date) of the high and low prices of the Common Stock on the
principal national securities exchange on which the Common Stock is traded,
if such Common Stock is then traded on a national securities exchange; (ii)
the last reported sale price (on the Determination Date) of the Common
Stock on The Nasdaq Stock Market if the Common Stock is not then traded on
a national securities exchange; or (iii) the closing bid price (or average
of bid prices) last quoted (on the Determination Date) by an established
quotation service for over-the-counter securities, if the Common Stock is
not reported on The Nasdaq Stock Market. However, if the Common Stock is
not publicly traded at the time an Option is granted under the Plan, "fair
market value" shall be deemed to be the fair value of the Common Stock as
determined by the Board of Directors after taking into consideration all
factors which it deems appropriate, including, without limitation, recent
sale and offer prices of the Common Stock in private transactions
negotiated at arm's length.
(d) The maximum number of shares with respect to which Options or SARs
may be granted to any employee, including any transactions contemplated by
Treas. Reg. (S)1.162-27(e)(2)(vi), shall be limited to 100,000 shares in
any calendar year.
4
<PAGE>
6.2 DURATION OF OPTIONS AND SARs. Subject to Section 6.6(b) hereof,
----------------------------
each Option and SAR and all rights thereunder shall be expressed to expire on
such date as the Board of Directors may determine, but in no event later than
ten years from the day on which the Option or SAR is granted and shall be
subject to earlier termination as provided herein.
6.3 EXERCISE OF OPTIONS AND SARs.
----------------------------
(a) Subject to Section 6.6(b) hereof, each Option and SAR granted
under the Plan shall be exercisable at such time or times and during such
period as shall be set forth in the instrument evidencing such Option or
SAR, with vesting to occur in equal annual installations over a four-year
period unless otherwise approved by the Board of Directors. To the extent
that an Option or SAR is not exercised by a Participant when it becomes
initially exercisable, it shall not expire but shall be carried forward and
shall be exercisable, on a cumulative basis, until the expiration of the
exercise period. No partial exercise may be for less than ten (10) full
shares of Common Stock (or its equivalent).
(b) The Board of Directors shall have the right to accelerate the
date of exercise of any installments of any Option or SAR; provided that
the Board of Directors shall not accelerate the exercise date of any
installment of any Option granted to a Participant as an Incentive Stock
Option (and not previously converted into a Non-Qualified Option pursuant
to Section 6.7) if such acceleration would violate the annual vesting
limitation contained in Section 422(d)(1) of the Code, which provides
generally that the aggregate fair market value (determined at the time the
Option is granted) of the stock with respect to which Incentive Stock
Options granted to any Participant are exercisable for the first time by
such Participant during any calendar year (under all plans of the Company
and any Related Companies) shall not exceed $100,000.
6.4 NONTRANSFERABILITY OF OPTIONS AND SARs. No Option or SAR granted
--------------------------------------
under the Plan shall be assignable or transferable by the Participant, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution or, with respect to Non-Qualified Options and SARs, pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act ("ERISA") or the rules promulgated
thereunder or unless the Participant's non-qualified stock option agreement
granting such options (the "Non-Qualified Stock Option Agreement") or the
Participant's SAR agreement granting such SARs (the "SAR Agreement") provides
otherwise. Unless otherwise provided by the Non-Qualified Stock Option
Agreement or the SAR Agreement, as applicable, during the life of the
Participant, the Option or SAR shall be exercisable only by him or her. If any
Participant should attempt to dispose of or encumber his or her Options or SARs,
other than in accordance with the applicable terms of a Non-Qualified Stock
Option Agreement or SAR Agreement, his or her interest in such Options or SARs
shall terminate.
5
<PAGE>
6.5 EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH ON OPTIONS AND SARs.
----------------------------------------------------------------
(a) If a Participant ceases to be employed by the Company or a
Related Company for any reason, including retirement but other than death,
any Option or SAR granted to such Participant under the Plan shall
immediately terminate; provided, however, that any portion of such Option
-------- -------
or SAR which was otherwise exercisable on the date of termination of the
Participant's employment may be exercised within the three-month period
following the date on which the Participant ceased to be so employed, but
in no event after the expiration of the exercise period. Any such exercise
may be made only to the extent of the number of shares subject to the
Option or SAR which were purchasable or exercisable on the date of such
termination of employment. If the Participant dies during such three-month
period, the Option or SAR shall be exercisable by the Participant's
personal representatives, heirs or legatees to the same extent and during
the same period that the Participant could have exercised the Option or SAR
on the date of his or her death.
(b) If the Participant dies while an employee of the Company or
any Related Company, any Option or SAR granted to such Participant under
the Plan shall be exercisable by the Participant's personal
representatives, heirs or legatees, for the purchase of or exercise
relative to that number of shares and to the same extent that the
Participant could have exercised the Option or SAR on the date of his or
her death. The Option or SAR or any unexercised portion thereof shall
terminate unless so exercised prior to the earlier of the expiration of six
months from the date of such death or the expiration of the exercise
period.
6.6 DESIGNATION OF INCENTIVE STOCK OPTIONS; LIMITATIONS. Options
---------------------------------------------------
granted under the Plan which are intended to be Incentive Stock Options
qualifying under Section 422 of the Code shall be designated as Incentive Stock
Options and shall be subject to the following additional terms and conditions:
(a) Dollar Limitation. The aggregate fair market value
-----------------
(determined at the time the option is granted) of the Common Stock for
which Incentive Stock Options are exercisable for the first time during any
calendar year by any person under the Plan (and all other incentive stock
option plans of the Company and any Related Companies) shall not exceed
$100,000. In the event that Section 422(d)(1) of the Code is amended to
alter the limitation set forth therein so that following such amendment
such limitation shall differ from the limitation set forth in this Section
6.6(a), the limitation of this Section 6.6(a) shall be automatically
adjusted accordingly.
(b) 10% Stockholder. If any Participant to whom an Incentive
---------------
Stock Option is to be granted pursuant to the provisions of the Plan is on
the date of grant the owner of stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Related
Companies, then the following
6
<PAGE>
special provisions shall be applicable to the Incentive Stock Option
granted to such individual:
(i) The option price per share of the Common Stock subject
to such Incentive Stock Option shall not be less than 110% of the fair
market value of one share of Common Stock on the date of grant; and
(ii) The option exercise period shall not exceed five years
from the date of grant.
In determining whether the 10% threshold has been reached, the stock
attribution rules of Section 424(d) of the Code shall apply.
(c) Except as modified by the preceding provisions of this
Section 6.6, all of the provisions of the Plan shall be applicable to
Incentive Stock Options granted hereunder.
6.7 CONVERSION OF INCENTIVE STOCK OPTIONS INTO NON-QUALIFIED OPTIONS;
-----------------------------------------------------------------
TERMINATION OF INCENTIVE STOCK OPTIONS. The Board of Directors, at the written
- --------------------------------------
request of any Participant, may in its discretion take such actions as may be
necessary to convert such Participant's Incentive Stock Options (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such Incentive Stock Options, regardless of whether the
Participant is an employee of the Company or a Related Company at the time of
such conversion. Such actions may include, but not be limited to, extending the
exercise period or reducing the exercise price of the appropriate installments
of such Options. At the time of such conversion, the Board of Directors (with
the consent of the Participant) may impose such conditions on the exercise of
the resulting Non-Qualified Options as the Board of Directors in its discretion
may determine, provided that such conditions shall not be inconsistent with the
Plan. Nothing in the Plan shall be deemed to give any Participant the right to
have such Participant's Incentive Stock Options converted into Non-Qualified
Options, and no such conversion shall occur until and unless the Board of
Directors takes appropriate action. The Board of Directors, with the consent of
the Participant, may also terminate any portion of any Incentive Stock Option
that has not been exercised at the time of such termination.
6.8 STOCK APPRECIATION RIGHTS. An SAR is the right to receive,
-------------------------
without payment, an amount equal to the excess, if any, of the fair market value
of a share of Common Stock on the date of exercise over the grant price, which
amount will be multiplied by the number of shares with respect to which the SARs
shall have been exercised. The grant of SARs under the Plan shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the express terms of the Plan, as the Board of
Directors shall deem desirable:
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<PAGE>
(a) Grant. SARs may be granted in tandem with, in addition to or
-----
completely independent of any Plan Benefit.
(b) Grant Price. The grant price of an SAR may be the fair market
-----------
value of a share of Common Stock on the date of grant or such other price as the
Board of Directors may determine.
(c) Exercise. An SAR may be exercised by a Participant in accordance
--------
with procedures established by the Board of Directors or as otherwise provided
in any agreement evidencing any SARs. The Board of Directors may provide that
an SAR shall be automatically exercised on one or more specified dates.
(d) Form of Payment. Payment upon exercise of an SAR may be made in
---------------
cash, in shares of Common Stock or any combination thereof, as the Board of
Directors shall determine, provided, however, that any SAR exercised upon or
subsequent to the occurrence of a Change in Control (as defined in Section 11(a)
hereof) shall be paid in cash.
(e) Fair Market Value. Fair market value shall be determined in
-----------------
accordance with Section 6.1(c) with the "Determination Date" being determined by
reference to the date of grant or the date of exercise of an SAR, as applicable.
6.9 RIGHTS AS A STOCKHOLDER. The holder of an Option or SAR shall
-----------------------
have no rights as a stockholder with respect to any shares covered by the Option
or SAR until the date of issue of a stock certificate to him or her for such
shares. Except as otherwise expressly provided in the Plan, no adjustment shall
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.
6.10 SPECIAL PROVISIONS APPLICABLE TO NON-QUALIFIED OPTIONS AND SARs
---------------------------------------------------------------
GRANTED TO COVERED EMPLOYEES. In order for the full value of Non-Qualified
- ----------------------------
Options or SARs granted to Covered Employees other than Non-Qualified Options or
SARs granted pursuant to Section 8 hereof, to be deductible by the Company for
federal income tax purposes, the Company may intend for such Non-Qualified
Options or SARs to be treated as "qualified performance-based compensation" as
described in Treas. Reg. (S)1.162-27(e) (or any successor regulation). In such
case, Non-Qualified Options or SARs granted to Covered Employees shall be
subject to the following additional requirements:
(a) such options and rights shall be granted only by the
Committee; and
(b) the exercise price of such Options and the grant price of
such SARs granted shall in no event be less than the fair market value of
the Common Stock as of the date of grant of such Options or SARs.
8
<PAGE>
SECTION 7. SPECIAL PROVISIONS APPLICABLE TO AWARDS
- --------- ---------------------------------------
7.1 GRANTS OF AWARDS. The Board of Directors may grant a Participant
----------------
an Award subject to such terms and conditions as the Board of Directors deems
appropriate, including, without limitation, restrictions on the pledging, sale,
assignment, transfer or other disposition of such shares and the requirement
that the Participant forfeit all or a portion of such shares back to the Company
upon termination of employment.
7.2 CONDITIONS. Approvals of Awards may be subject to the following
----------
conditions:
(a) Each Participant receiving an Award shall enter into an
agreement (a "Stock Restriction Agreement") with the Company, if required
by the Board of Directors, in a form specified by the Board of Directors
agreeing to such terms and conditions of the Award as the Board of
Directors deems appropriate.
(b) Shares issued and transferred to a Participant pursuant to an
Award may, if required by the Board of Directors, be deposited with the
Treasurer or other officer of the Company designated by the Board of
Directors to be held until the lapse of the restrictions upon such shares,
and each Participant shall execute and deliver to the Company stock powers
enabling the Company to exercise its rights hereunder.
(c) Certificates for shares issued pursuant to an Award shall, if
the Company shall deem it advisable, bear a legend to the effect that they
are issued subject to specified restrictions.
(d) Certificates representing the shares issued pursuant to an
Award shall be registered in the name of the Participant and shall be owned
by such Participant. Such Participant shall be the holder of record of
such shares for all purposes, including voting and receipt of dividends
paid with respect to such shares.
(e) If required by the Board of Directors, no Participant
receiving an Award shall make, in connection with such Award, the election
permitted under Section 83(b) of the Code.
7.3 NONTRANSFERABILITY. Shares issued pursuant to an Award may not
------------------
be sold, assigned, transferred, alienated, commuted, anticipated, or otherwise
disposed of (except, subject to the provisions of such Participant's Stock
Restriction Agreement, by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of ERISA or the rules promulgated thereunder), or pledged or hypothecated as
collateral for a loan or as security for the performance of any obligation, or
be otherwise encumbered, and are not subject to attachment, garnishment,
execution or other legal or equitable process, prior to the lapse of
restrictions on such shares, and any
9
<PAGE>
attempt at action in contravention of this Section shall be null and void. If
any Participant should attempt to dispose of or encumber his or her shares
issued pursuant to an Award prior to the lapse of the restrictions imposed on
such shares, his or her interest in such shares shall terminate.
7.4 EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH ON AWARDS. If,
------------------------------------------------------
prior to the lapse of restrictions applicable to Awards, the Participant ceases
to be an employee of the Company or the Related Companies for any reason, Awards
to such Participant, as to which restrictions have not lapsed, shall be
forfeited to the Company, effective on the date of the Participant's termination
of employment. The Board of Directors shall have the sole power to decide in
each case to what extent leaves of absence shall be deemed a termination of
employment.
SECTION 8. PERFORMANCE OBJECTIVES
- --------- ----------------------
The Committee may, in its discretion, designate any Plan Benefit that
is subject to the achievement of performance conditions as a performance-based
Plan Benefit subject to this Section 8, in order to qualify such Plan Benefit as
"qualified performance-based compensation" as described in Treas. Reg. (S)1.162-
27(e) (or any successor regulation). The performance objectives for a Plan
Benefit subject to this Section 8 shall consist of one or more business criteria
and a targeted level or levels of performance with respect to such criteria, as
specified by the Committee but subject to this Section 8. Such performance
objectives shall be objective and shall otherwise meet the requirements of
Section 162(m)(4)(C) of the Code and regulations thereunder. Business criteria
used by the Committee in establishing such performance objectives shall be
selected exclusively from among the following:
(1) Pre-tax income;
(2) Operating profit;
(3) Return to stockholders;
(4) Return on equity;
(5) Earnings per share;
(6) Revenues and revenue growth;
(7) Cash flow
(8) Company-created income (for example, income due to Company-
initiated cost reductions or productivity improvements)
(9) Stock price; and/or
(10) Strategic business criteria, consisting of one or more objectives
based on region or center performance compared to budget, meeting
specified revenue, market penetration, business expansion goals,
cost targets, and goals relating to affiliations, joint ventures,
acquisitions and divestitures.
10
<PAGE>
The levels of performance required with respect to such business
criteria may be expressed in absolute or relative levels. Achievement of
performance objectives with respect to such Plan Benefits shall be measured over
such periods as the Committee may specify. Performance objectives may differ
for such Plan Benefits to different Participants. The Committee shall specify
the weighing to be given to each performance objective for purposes of
determining the final amount payable with respect to any such Plan Benefit. The
Committee may, in its discretion, reduce the amount of a payout otherwise to be
made in connection with a Plan Benefit subject to this Section 8, but may not
exercise discretion to increase such amount, and the Committee may consider
other performance criteria in exercising such discretion. All determinations by
the Committee as to the achievement of performance objectives shall be in
writing. Any Plan Benefit designated as performance-based pursuant to this
Section 8 shall be granted only by the Committee, and the Committee may not
delegate any responsibility with respect to a Plan Benefit subject to this
Section 8.
SECTION 9. REQUIREMENTS OF LAW
- --------- -------------------
9.1 VIOLATIONS OF LAW. No shares shall be issued and delivered upon
-----------------
exercise of any Option or the making of any Award or the payment of any SAR
unless and until, in the opinion of counsel for the Company, any applicable
registration requirements of the Securities Act of 1933, any applicable listing
requirements of any national securities exchange on which stock of the same
class is then listed, and any other requirements of law or of any regulatory
bodies having jurisdiction over such issuance and delivery, shall have been
fully complied with. Each Participant may, by accepting Plan Benefits, be
required to represent and agree in writing, for himself or herself and for his
or her transferees by will or the laws of descent and distribution, that the
stock acquired by him, her or them is being acquired for investment. The
requirement for any such representation may be waived at any time by the Board
of Directors.
9.2 COMPLIANCE WITH RULE 16b-3. The intent of this Plan is to
---------------------------
qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the
extent any provision of the Plan does not comply with the requirements of Rule
16b-3, it shall be deemed inoperative to the extent permitted by law and deemed
advisable by the Board of Directors and shall not affect the validity of the
Plan. In the event Rule 16b-3 is revised or replaced, the Board of Directors
may exercise discretion to modify this Plan in any respect necessary to satisfy
the requirements of the revised exemption or its replacement.
SECTION 10. RECAPITALIZATION
- ---------- ----------------
In the event that dividends are payable in Common Stock of the Company
or in the event there are splits, sub-divisions or combinations of shares of
Common Stock of the Company, the number of shares available under the Plan shall
be increased or decreased proportionately, as the case may be, and the number of
shares deliverable upon the exercise thereafter of any Option previously granted
shall be increased or decreased proportionately,
11
<PAGE>
as the case may be, without change in the aggregate purchase price, and the
number of shares to which granted SARs relate shall be increased or decreased
proportionately, as the case may be, and the grant price of such SARs shall be
decreased or increased proportionately, as the case may be.
SECTION 11. CHANGE IN CONTROL AND REORGANIZATION
- ---------- ------------------------------------
(a) For purposes of this Plan, a "Change in Control" shall mean
(i) the acquisition by a third person, including a "person" as defined in
Section 13(d)(3) of the Exchange Act, of beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) directly or indirectly, of securities
of the Company representing twenty-five percent (25%) or more of the total
number of votes that may be cast for the election of the directors of the
Company; or (ii) as the result of, or in connection with, any tender or
exchange offer, merger, consolidation or other business combination, sale
of assets or one or more contested elections, or any combination of the
foregoing transactions, the persons who were directors of the Company shall
cease to constitute a majority of the Board of the Company. In the event
of a Change in Control of the Company, except as the Board of Directors may
expressly provide otherwise at the time of the Change in Control or in a
Participant's agreement governing an Option, Award or SAR, (i) vesting of
Options and SARs shall accelerate such that (1) upon the Change in Control,
the Participant would be entitled to exercise his or her Options and/or
SARs to the extent of 50% of the number of shares not otherwise exercisable
at the time of the Change in Control, (2) beginning six months after the
Change in Control, the Participant would be entitled to exercise his or her
Options and/or SARs to the extent of an additional 25% of the number of
shares not otherwise exercisable at the time of the Change in Control, and
(3) beginning eighteen months after the Change in Control, the Participant
would be entitled to exercise his or her Options and/or SARs to the extent
of an additional 25% of the number of shares not otherwise exercisable at
the time of the Change in Control; in each case, unless such Options and/or
SARs would vest sooner pursuant to the terms of their original grant, in
which case they shall vest at such earlier date, but in no event will
Options or SARs vest prior to six months from the date of grant; and (ii) a
Participant who is an officer of the Company (including the controller) who
is terminated other than for cause or who resigns because of a significant
diminution of his or her duties and responsibilities, in either case within
180 days before a Change in Control or within eighteen months after a
Change in Control and in conjunction with such Change in Control, shall be
entitled to exercise his or her Options and/or SARs to the extent of 100%
of the number of shares covered thereby. For purposes of this Plan,
"cause" shall mean (x) conviction of a felony, (y) commission of an act of
fraud or embezzlement against the Company or the commission of any other
action with the intent to injure the Company, and (z) material misconduct
in the performance of the Participant's duties or any material neglect of
his or her duties to the Company.
12
<PAGE>
(b) In the case of any tender or exchange offer, merger,
consolidation or other business combination or sale of all or substantially
all of the assets of the Company, which does not constitute a Change in
Control, or in the case of a reorganization or liquidation of the Company,
the Board of Directors of the Company, or the board of directors of any
corporation assuming the obligations of the Company hereunder, shall, as to
outstanding Plan Benefits, (i) make appropriate provision for the
protection of any such outstanding Plan Benefits by the substitution on an
equitable basis of appropriate stock of the Company or of the merged,
consolidated or otherwise reorganized corporation which will be issuable in
respect of the shares of Common Stock of the Company; provided only that
the excess of the aggregate fair market value of the shares subject to the
Plan Benefits immediately after such substitution over the purchase price
thereof is not more than the excess of the aggregate fair market value of
the shares subject to such Plan Benefits immediately before such
substitution over the purchase price thereof, (ii) upon written notice to
the Participants, provide that all unexercised Plan Benefits must be
exercised within a specified number of days of the date of such notice or
such Plan Benefits will be terminated, or (iii) upon written notice to the
Participants, provide that the Company or the merged, consolidated or
otherwise reorganized corporation shall have the right, upon the effective
date of any such merger, consolidation, sale of assets or reorganization,
to purchase all Plan Benefits held by each Participant and unexercised as
of that date at an amount equal to the aggregate fair market value on such
date of the shares subject to the Plan Benefits held by such Participant
over the aggregate purchase or grant price therefor, such amount to be paid
in cash or, if stock of the merged, consolidated or otherwise reorganized
corporation is issuable in respect of the shares of the Common Stock of the
Company, then, in the discretion of the Board of Directors, in stock of
such merged, consolidated or otherwise reorganized corporation equal in
fair market value to the aforesaid amount. In any such case the Board of
Directors shall, in good faith, determine fair market value and may, in its
discretion, advance the lapse of any waiting or installment periods and
exercise dates.
SECTION 12. NO SPECIAL EMPLOYMENT RIGHTS
- ---------- ----------------------------
Nothing contained in the Plan or in any Plan Benefit documentation
shall confer upon any Participant receiving a grant of any Plan Benefit any
right with respect to the continuation of his or her employment by the Company
(or any Related Company) or interfere in any way with the right of the Company
(or any Related Company), subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Participant from the rate in
existence at the time of the grant of any Plan Benefit. Whether an authorized
leave of absence or absence in military or government service shall constitute
termination of
13
<PAGE>
employment shall be determined by the Board of Directors, in accordance with any
applicable laws.
SECTION 13. AMENDMENT OF THE PLAN
- ---------- ---------------------
The Board of Directors may at any time and from time to time suspend
or terminate all or any portion of the Plan or modify or amend the Plan in any
respect. The termination or any modification or amendment of the Plan shall
not, without the consent of a recipient of any Plan Benefit, affect his or her
rights under any Plan Benefit previously granted. With the consent of the
affected Participant, the Board of Directors may amend outstanding agreements
relating to any Plan Benefit in a manner not inconsistent with the Plan. The
Board of Directors hereby reserves the right to amend or modify the terms and
provisions of the Plan and of any outstanding Options to the extent necessary to
qualify any or all Options under the Plan for such favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code, provided, however, that
the consent of a Participant is required if such amendment or modification would
cause unfavorable income tax treatment for such Participant.
SECTION 14. WITHHOLDING
- ---------- -----------
The Company's obligation to deliver shares of stock upon the exercise
of any Option or SAR or the granting of an Award and to make payment upon
exercise of any SAR shall be subject to the satisfaction by the Participant of
all applicable federal, state and local income and employment tax withholding
requirements.
SECTION 15. EFFECTIVE DATE AND DURATION OF THE PLAN
- ---------- ---------------------------------------
15.1 EFFECTIVE DATE. The Plan shall become effective as of January
--------------
16, 1998 (the date of approval of the Plan by the Board of Directors), subject
to approval of the Plan by the stockholders of the Company.
15.2 DURATION. Unless sooner terminated in accordance with Section
--------
13 hereof, the Plan shall terminate upon the earlier of (i) the tenth
anniversary of the effective date or (ii) the date on which all shares available
for issuance under the Plan shall have been issued pursuant to any Awards or the
exercise or cancellation of Options and SARs granted hereunder. If the date of
termination is determined under (i) above, then Plan Benefits outstanding on
such date shall continue to have force and effect in accordance with the
provisions of the instruments evidencing such Plan Benefits.
14
<PAGE>
SECTION 16. GOVERNING LAW
- ---------- -------------
The Plan and all actions taken thereunder shall be governed by the laws
of the State of Delaware.
15
