<PAGE>
As filed with the Securities and Exchange Commission on March 31, 2000
Registration No. 333-
================================================================================
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1993
--------------
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, Chief Executive Officer and Chief Financial Officer
Occupational Health + Rehabilitation Inc
175 Derby Street, Suite 36
Hingham, MA 02043
(Name and address of agent for service)
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(781) 741-5175
(Telephone number, including area code, of agent for service)
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Copy to:
Donna L. Brooks, Esq.
Shipman & Goodwin LLP
One American Row
Hartford, Connecticut 06103
(860) 251-5000
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
maximum maximum
offering aggregate
Title of securities Amount to be price per offering Amount of
to be registered registered unit (1) price (1) registration fee
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Common Stock, par
value
$.001............. 225,000 $3.25 $731,250 $193.05
- ------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) under the Securities Act of 1933 based on the
average of the bid and ask price per share of $3.25 on March 30, 2000 as
reported on the OTC Board Bulletin.
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus relating
to the securities registered under this Registration Statement also relates to
Registration Statement No. 333-61997, filed August 21, 1998.
- --------------------------------------------------------------------------------
================================================================================
<PAGE>
STATEMENT PURSUANT TO GENERAL
INSTRUCTION E OF FORM S-8
This registration statement relates to the registration of additional
shares of Common Stock, par value $0.001 per share, of Occupational Health +
Rehabilitation Inc, the same class of securities as registered on Form S-8 for
Occupational Health + Rehabilitation Inc 1998 Stock Plan, File No. 333-61997.
The contents of the prior Registration Statement are incorporated in this
registration statement by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hingham, Commonwealth of Massachusetts, on March 31,
2000.
OCCUPATIONAL HEALTH + REHABILITATION INC
By: /s/ John C. Garbarino
--------------------------------------------
John C. Garbarino,
President, Chief Executive Officer and
Chief Financial Officer
POWER OF ATTORNEY
Know All Persons by These Presents, that each person whose signature
appears below constitutes and appoints John C. Garbarino his true and lawful
attorney-in-fact and agent, 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 attorney-in-fact and agent or any of 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.
Signature Title Date
/s/John C. Garbarino President, Chief Executive March 31, 2000
- ---------------------------- Officer and Chief
John C. Garbarino Financial Officer
(principal executive
and financial officer)
/s/Edward L. Cahill Director March 31, 2000
- ----------------------------
Edward L. Cahill
/s/Kevin J. Dougherty Director March 31, 2000
- ----------------------------
Kevin J. Dougherty
/s/Angus M. Duthie Director March 31, 2000
- ----------------------------
Angus M. Duthie
/s/Steven W. Garfinkle Director March 31, 2000
- ----------------------------
Stevem W. Garfinkle
II-1
<PAGE>
/s/Donald W. Hughes Director March 31, 2000
- ----------------------------
Donald W. Hughes
/s/Frank H. Leone Director March 31, 2000
- ----------------------------
Frank H. Leone
II-2
<PAGE>
Exhibit Index
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Shipman & Goodwin LLP as to the legality of the
securities being registered.
23.1 Consent of Shipman & Goodwin LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included in the signature page of this
registration statement).
99.1 Occupational Health + Rehabilitation Inc 1998 Stock Plan, as
amended.
<PAGE>
Exhibit 5.1
Shipman & Goodwin LLP One American Row
Counselors at Law Hartford, CT 06103-2819
Tel: (860) 251-5000
March 31, 2000
Occupational Health + Rehabilitation Inc
175 Derby Street, Suite 36
Hingham, MA 02043
Re: Registration Statement on Form S-8
Relating to Shares of Common Stock of
Occupational Health + Rehabilitation Inc Issuable under its
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 up to an additional 225,000 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.
As counsel to the Company, we have examined the Registration Statement and
such other documents as we have deemed necessary or appropriate in order to
express the opinion set forth below. In connection with our opinion hereinafter
given, we have examined and relied upon originals, or copies, certified or
otherwise, identified to our satisfaction, of such agreements, documents,
certificates and other statements of government officials, corporate officers
and representatives, and such other documents as we have deemed relevant and
necessary as a basis for such opinion. In such examination, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity with the original documents of documents
submitted to us as copies.
Based on the foregoing, we are of the opinion that the Shares, when issued
as contemplated by the Plan and said Registration Statement, will be duly
authorized and legally issued, fully paid and non-assessable.
<PAGE>
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not hereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act or the rules and regulations of the Securities and Exchange
Commission.
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) dated March 31, 2000 pertaining to the 1998 Stock Plan of Occupational
Health + Rehabilitation Inc of our report dated March 27, 2000, with respect to
the consolidated financial statements and schedule of Occupational Health +
Rehabilitation Inc included in its Annual Report (Form 10-K) for the year ended
December 31, 1999, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
April 3, 2000
<PAGE>
EXHIBIT 99.1
OCCUPATIONAL HEALTH + REHABILITATION INC
1998 STOCK PLAN
(as amended January 21, 2000)
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
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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. ss.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.
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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 375,000 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.
3
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SECTION 6. Special Provisions Applicable to Options and SARs
6.1 Purchase Price and Shares Subject to Options and SARs.
(a) The purchase price per share of Common Stock deliverable upon
the exercise of an Option shall be determined by the Board of Directors;
provided, however, that (i) in the case of an Incentive Stock Option, the
exercise price shall not be less than 100% of the fair market value of
such Common Stock on the day the Option is granted (except as modified in
Section 6.6(b) hereof), and (ii) in the case of a Non-Qualified Option,
the exercise price shall not be less than 50% of the fair market value on
the day such Option is granted.
(b) Options granted under the Plan may provide for the payment of
the exercise price by delivery of (i) cash or a check payable to the order
of the Company in an amount equal to the exercise price of such Options,
(ii) shares of Common Stock of the 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.
4
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(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. ss.1.162-27(e)(2)(vi), shall be limited to
100,000 shares in any calendar year.
6.2 Duration of Options and SARs. Subject to Section 6.6(b) hereof, each
Option and SAR and all rights thereunder shall be expressed to expire on such
date as the Board of Directors may determine, but in no event later than ten
years from the day on which the Option or SAR is granted and shall be subject to
earlier termination as provided herein.
6.3 Exercise of Options and SARs.
(a) Subject to Section 6.6(b) hereof, each Option and SAR granted
under the Plan shall be exercisable at such time or times and during such
period as shall be set forth in the instrument evidencing such Option or
SAR, with vesting to occur in equal annual 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
5
<PAGE>
otherwise. Unless otherwise provided by the Non-Qualified Stock Option Agreement
or the SAR Agreement, as applicable, during the life of the Participant, the
Option or SAR shall be exercisable only by him or her. If any Participant should
attempt to dispose of or encumber his or her Options or SARs, other than in
accordance with the applicable terms of a Non-Qualified Stock Option Agreement
or SAR Agreement, his or her interest in such Options or SARs shall terminate.
6.5 Effect of Termination of Employment or Death on Options and SARs.
(a) If a Participant ceases to be employed by the Company or a
Related Company for any reason, including retirement but other than death,
any Option or SAR granted to such Participant under the Plan shall
immediately terminate; provided, however, that any portion of such Option
or SAR which was otherwise exercisable on the date of termination of the
Participant's employment may be exercised within the three-month period
following the date on which the Participant ceased to be so employed, but
in no event after the expiration of the exercise period. Any such exercise
may be made only to the extent of the number of shares subject to the
Option or SAR which were purchasable or exercisable on the date of such
termination of employment. If the Participant dies during such three-month
period, the Option or SAR shall be exercisable by the Participant's
personal representatives, heirs or legatees to the same extent and during
the same period that the Participant could have exercised the Option or
SAR on the date of his or her death.
(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
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<PAGE>
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 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.
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6.8 Stock Appreciation Rights. An SAR is the right to receive, without
payment, an amount equal to the excess, if any, of the fair market value of a
share of Common Stock on the date of exercise over the grant price, which amount
will be multiplied by the number of shares with respect to which the SARs shall
have been exercised. The grant of SARs under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the express terms of the Plan, as the Board of
Directors shall deem desirable:
(a) Grant. SARs may be granted in tandem with, in addition to or
completely independent of any Plan Benefit.
(b) Grant Price. The grant price of an SAR may be the fair market value of
a share of Common Stock on the date of grant or such other price as the Board of
Directors may determine.
(c) Exercise. An SAR may be exercised by a Participant in accordance with
procedures established by the Board of Directors or as otherwise provided in any
agreement evidencing any SARs. The Board of Directors may provide that an SAR
shall be automatically exercised on one or more specified dates.
(d) Form of Payment. Payment upon exercise of an SAR may be made in cash,
in shares of Common Stock or any combination thereof, as the Board of Directors
shall determine, provided, however, that any SAR exercised upon or subsequent to
the occurrence of a Change in Control (as defined in Section 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.
8
<PAGE>
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. ss.1.162-27(e) (or any successor regulation). In such
case, Non-Qualified Options or SARs granted to Covered Employees shall be
subject to the following additional requirements:
(a) such options and rights shall be granted only by the
Committee; and
(b) the exercise price of such Options and the grant price of such
SARs granted shall in no event be less than the fair market value of the
Common Stock as of the date of grant of such Options or SARs.
SECTION 7. Special Provisions Applicable to Awards
7.1 Grants of Awards. The Board of Directors may grant a Participant an
Award subject to such terms and conditions as the Board of Directors deems
appropriate, including, without limitation, restrictions on the pledging, sale,
assignment, transfer or other disposition of such shares and the requirement
that the Participant forfeit all or a portion of such shares back to the Company
upon termination of employment.
7.2 Conditions. Approvals of Awards may be subject to the following
conditions:
(a) Each Participant receiving an Award shall enter into an
agreement (a "Stock Restriction Agreement") with the Company, if required
by the Board of Directors, in a form specified by the Board of Directors
agreeing to such terms and conditions of the Award as the Board of
Directors deems appropriate.
(b) Shares issued and transferred to a Participant pursuant to an
Award may, if required by the Board of Directors, be deposited with the
Treasurer or other officer of the Company designated by the Board of
Directors to be held until the lapse of the restrictions upon such shares,
and each Participant shall execute and deliver to the Company stock powers
enabling the Company to exercise its rights hereunder.
(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.
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<PAGE>
(d) Certificates representing the shares issued pursuant to an Award
shall be registered in the name of the Participant and shall be owned by
such Participant. Such Participant shall be the holder of record of such
shares for all purposes, including voting and receipt of dividends paid
with respect to such shares.
(e) If required by the Board of Directors, no Participant receiving
an Award shall make, in connection with such Award, the election permitted
under Section 83(b) of the Code.
7.3 Nontransferability. Shares issued pursuant to an Award may not be
sold, assigned, transferred, alienated, commuted, anticipated, or otherwise
disposed of (except, subject to the provisions of such Participant's Stock
Restriction Agreement, by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of ERISA or the rules promulgated thereunder), or pledged or hypothecated as
collateral for a loan or as security for the performance of any obligation, or
be otherwise encumbered, and are not subject to attachment, garnishment,
execution or other legal or equitable process, prior to the lapse of
restrictions on such shares, and any attempt at action in contravention of this
Section shall be null and void. If any Participant should attempt to dispose of
or encumber his or her shares issued pursuant to an Award prior to the lapse of
the restrictions imposed on such shares, his or her interest in such shares
shall terminate.
7.4 Effect of Termination of Employment or Death on Awards. If, prior to
the lapse of restrictions applicable to Awards, the Participant ceases to be an
employee of the Company or the Related Companies for any reason, Awards to such
Participant, as to which restrictions have not lapsed, shall be forfeited to the
Company, effective on the date of the Participant's termination of employment.
The Board of Directors shall have the sole power to decide in each case to what
extent leaves of absence shall be deemed a termination of employment.
SECTION 8. 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.
ss.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
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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.
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
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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, 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
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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.
(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
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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
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
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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.
SECTION 16. Governing Law
The Plan and all actions taken thereunder shall be governed by the laws of
the State of Delaware.
60888 v.01
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