<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SHARED MEDICAL SYSTEMS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 23-1704148
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(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
51 Valley Stream Parkway, Malvern, Pennsylvania 19355
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(Address of Principal Executive Offices) (Zip Code)
1999 RESTRICTED STOCK PLAN
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(Full Title of the Plan)
Bonnie L. Shuman, Esq.
Shared Medical Systems Corporation
51 Valley Stream Parkway
Malvern, Pennsylvania 19355
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(Name and address of agent for service)
(610) 219-6300
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(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Amount Proposed Proposed
Securities to to be Maximum Offering Maximum Aggregate Amount of
be Registered Registered Price Per Share** Offering Price** Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, 500,000 $ 51.96875 $25,984,375 $7,223.66
par value Shares*
$.01 per share
</TABLE>
* Pursuant to Rule 416(a) under the Securities Act, this Registration
Statement also registers such indeterminate number of additional shares as
may become issuable under the Plan in connection with share splits, share
dividends or similar transactions.
** Estimated solely for purposes of calculating the registration fee. In
accordance with Rule 457(h) under the Securities Act, the price shown is
based upon $51.96875, the average of the high and low prices of Shared
Medical Systems Corporation Common Stock reported by the New York Stock
Exchange on February 26, 1999.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
(Not required to be filed as part of this Registration Statement)
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are incorporated herein by reference the following documents:
1. The Shared Medical Systems Corporation (the "Company") Annual
Report on Form 10-K for the year ended December 31, 1997.
2. All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 since December 31,
1997.
3. The description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A filed under the
Securities Exchange Act of 1934 on August 22, 1997, including any
amendment or report filed for the purpose of updating such
description.
4. The description of the Rights attached to the Company's Common
Stock contained in the Company's registration statement on Form 8-A
filed under the Securities Exchange Act of 1934 on August 22, 1997,
including any amendment or report filed for the purpose of updating
such description.
All other reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
subsequent to the date of this Registration Statement and prior to the filing of
a post-effective amendment to this Registration Statement which indicates that
all of the Common Shares offered hereby have been sold or which deregisters all
such Common Shares then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of the filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Bonnie L. Shuman, an employee of the Registrant and the Registrant's
General Counsel, Vice President and Assistant Secretary, has given an opinion
upon the validity of the securities being registered. Mrs. Shuman is paid a
salary by the Company and participants in various employee benefit plans offered
to employees generally, as well as in plans offered to a limited number of key
employees. As of December 31, 1998, Mrs. Shuman was the beneficial owner of
1,002 shares of the Registrant's common stock, and options to purchase 22,900
additional shares of common stock.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the Delaware General Corporation Law (the "GCL")
provides that a provision in a Delaware corporation's certificate of
incorporation eliminating or limiting the personal liability of a director to a
corporation or its stockholders shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) for willful
or negligent unlawful payments of dividends or stock purchases or redemptions by
the corporation, or (iv) for any transaction from which the director derived an
improper personal benefit.
Article Twelfth of the Registrant's Restated Certificate of
Incorporation provides that a director of the Registrant shall have no personal
liability to the Registrant or to its stockholders for monetary damages for
breach of fiduciary duty as a director except to the extent that Section
102(b)(7) (or any successor provision) of the GCL, as amended from time to time,
expressly provides that the liability of a director may not be eliminated or
limited.
Section 145 of the GCL contains detailed provisions permitting a
Delaware corporation to indemnify directors and officers against expenses,
judgments, fines and settlements in connection with litigation under certain
circumstances.
Article IX of the Registrant's By-Laws provides that any person who was
or is a party or is threatened to be made a party to a proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that
such person is or was a director or officer of the Registrant, or is or was
serving while a director or officer of the Registrant at the request of the
Registrant as a director, officer, employee, agent, fiduciary or other
representative of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, shall be indemnified by the
Registrant against expenses (including attorneys' fees), judgments, fines,
excise taxes and amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding to the full
extent permissible under Delaware Law.
The Registrant maintains, on behalf of its directors and officers,
insurance protection against certain liabilities arising out of the discharge of
their duties, as well as insurance covering the Registrant for indemnification
payments made to its directors and officers for certain liabilities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
<PAGE>
ITEM 8. EXHIBITS.
The following is a list of exhibits required by Item 601 of Regulation
S-K filed as part of this Registration Statement.
Exhibit 4(a) The Company's 1999 Restricted Stock Plan.
Exhibit 4(b) Rights Agreement dated as of May 1, 1991, between the Company and
Pittsburgh National Bank, as Rights Agent (incorporated by
reference to Exhibit (4) to the Company's Form 10-K Report for
the year ended December 31, 1996).
Exhibit 5 Opinion of Counsel.
Exhibit 23(a) Consent of Arthur Andersen LLP.
Exhibit 23(b) Consent of Counsel (included in Exhibit 5).
Exhibit 24 Power of Attorney (included on signature pages).
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (i) and (ii) do not apply if the information
- -------- -------
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of
<PAGE>
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
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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 Malvern, Pennsylvania, on this 26th day of February, 1999.
SHARED MEDICAL SYSTEMS CORPORATION
By: /s/ Marvin S. Cadwell
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Marvin S. Cadwell
President and Chief Executive Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below in so signing also makes,
constitutes and appoints Marvin S. Cadwell or Terrence W. Kyle his or her true
and lawful attorney-in-fact, with full power of substitution, for him or her in
any and all capacities, to execute and cause to be filed with the Securities and
Exchange Commission any and all amendments to this registration statement, with
exhibits thereto and other documents in connection therewith, and hereby
ratifies and confirms all that said attorney-in-fact or his substitute or
substitutes may do or cause to be done by virtue hereof.
Name Title Date
- ---- ----- ----
/s/ Marvin S. Cadwell President and Chief February 26, 1999
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Marvin S. Cadwell Executive Officer; Director
(Principal Executive Officer)
/s/ Terrence W. Kyle Senior Vice President and February 26, 1999
- -----------------------------
Terrence W. Kyle Chief Financial Officer
(Principal Financial Officer)
/s/ Edward J. Grady Vice President and Controller February 26, 1999
- -----------------------------
Edward J. Grady
(Principal Accounting Officer)
/s/ R. James Macaleer Chairman of the Board of February 26, 1999
- -----------------------------
R. James Macaleer Directors
/s/ Raymond K. Denworth, Jr. Director February 26, 1999
- ----------------------------
Raymond K. Denworth, Jr.
/s/ Frederick W. DeTurk Director February 26, 1999
- ----------------------------
Frederick W. DeTurk
<PAGE>
/s/ Jeffrey S. Rubin Director February 26, 1999
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Jeffrey S. Rubin
/s/ Josh S. Weston Director February 26, 1999
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Josh S. Weston
/s/ Gail R. Wilensky Director February 26, 1999
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Gail R. Wilensky
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------- ----------------------
4(a) The Company's 1999 Restricted Stock Plan.
4(b) Rights Agreement dated as of May 1, 1991, between the Company and
Pittsburgh National Bank, as Rights Agent (incorporated by
reference to Exhibit (4) to the Company's Form 10-K Report for
the year ended December 31, 1996).
5 Opinion of Counsel
23(a) Consent of Arthur Andersen LLP
23(b) Consent of Counsel (included in Exhibit 5)
24 Power of Attorney (included on signature pages)
<PAGE>
Exhibit 4(a)
SHARED MEDICAL SYSTEMS CORPORATION
1999 RESTRICTED STOCK PLAN
1. Introduction
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(a) Purpose. The Plan is intended to provide a means whereby the Company
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may, through the grant of RSAs to Employees and Non-Employee Directors, attract
and retain such individuals and motivate them to exercise their best efforts on
behalf of the Company and of any Related Corporation.
(b) Definitions. For purposes of the Plan:
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(1) "Board" shall mean the Board of Directors of the Company.
(2) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(3) "Committee" shall mean the Stock Option Committee of the Board,
which shall consist of not less than two (2) directors of the Company who shall
be appointed by, and shall serve at the pleasure of, the Board.
(4) "Common Stock" shall mean the common stock of the Company, par
value $.01 per share.
(5) "Company" shall mean Shared Medical Systems Corporation.
(6) "Employee" shall mean officers, employee directors and other
employees of the Company and/or of a Related Corporation.
(7) "Fair Market Value" shall mean the following, arrived at by a good
faith determination of the Committee:
(A) The mean between the highest and lowest quoted selling price
on the date of grant, if there are sales of Common Stock on a national
securities exchange or in an over-the-counter market on the date of grant; or
(B) The weighted average of the means between the highest and
lowest sales on the nearest date before and the nearest date after the date of
grant, if there are no sales on the date of grant but there are sales on dates
within a reasonable period both before and after the date of grant; or
(C) The mean between the bid and asked prices, as reported by the
National Quotation Bureau on the date of grant, if actual sales are not
available during a reasonable period beginning before and ending after the date
of grant; or
(D) if (A) through (C) are not applicable, such other method of
determining fair market value as shall be authorized by the Code, or the rules
or regulations thereunder, and adopted by the Committee.
Where the fair market value of the shares of Common Stock is determined under
(B) above, the average of the means between the highest and lowest sales on the
nearest date before and the nearest date after the date of grant is to be
weighted inversely by the respective numbers of trading days between
<PAGE>
the sale dates and the date of grant, in accordance with Treas. Reg. Section
20.2031-2(b)(1), or any successor thereto.
(8) "Grantee" shall mean an Employee or Non-Employee Director who has
been granted an RSA under the Plan.
(9) "Non-Employee Director" shall mean a director of the Company who
is not an employee of the Company or a Related Corporation.
(10) "Plan" shall mean the SHARED MEDICAL SYSTEMS CORPORATION 1999
RESTRICTED STOCK PLAN as set forth herein and as amended from time to time.
(11) "Related Corporation" shall mean either a "subsidiary
corporation" of the Company, as defined in section 424(f) of the Code, or the
"parent corporation" of the Company, as defined in section 424(e) of the Code.
(12) "Restricted Stock" shall mean Common Stock awarded upon the terms
and conditions and subject to the restrictions set forth herein.
(13) "RSA" shall mean a Restricted Stock award granted under the Plan.
(14) "Restricted Stock Agreement" shall mean a written document
evidencing the grant of an RSA.
(15) "Termination of Service" shall mean (A) with respect to an RSA
granted to an Employee, the termination of the employment relationship between
the Employee and the Company and all Related Corporations; and (B) with respect
to an RSA granted to a Non-Employee Director, the cessation of the provision of
services as a director of the Company and all Related Corporations; provided,
however, that if a Grantee's status changes from Employee to Non-Employee
Director or from Non-Employee Director to Employee, the Committee may provide
that no Termination of Service occurs for purposes of the Plan until the
Grantee's new status with the Company and all Related Corporations terminates.
(16) "Unvested Shares" shall mean shares of Restricted Stock which
have not vested in the Grantee in accordance with Section 6.
(17) "Vesting Period" shall mean a period of time established by the
Committee during which shares of Restricted Stock covered by an RSA are subject
to the restrictions set forth in Section 6. The Vesting Period may refer to a
set period of time or may refer to the period prior to the achievement of other
conditions to vesting set by the Committee in accordance with Section 6.
2. Administration.
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The Plan shall be administered by the Committee. Each member of such
Committee, while serving as such, shall be deemed to be acting in his/her
capacity as a director of the Company.
The Committee shall have full authority, subject to the terms of the Plan,
to select the Employees and Non-Employee Directors to be granted RSAs under the
Plan, to grant RSAs on behalf of the Company and to set the date of grant and
the other terms of such RSAs in accordance with the Plan.
The Committee also shall have the authority to establish such rules and
regulations, not inconsistent with the provisions of the Plan, for the proper
administration of the Plan, and to amend,
<PAGE>
modify or rescind any such rules and regulations, and to make such
determinations and interpretations under, or in connection with, the Plan, as it
deems necessary or advisable. All such rules, regulations, determinations and
interpretations shall be binding and conclusive upon the Company, its
stockholders and all Grantees, and their respective legal representatives,
beneficiaries, successors and assigns and upon all other persons claiming under
or through any of them. Except as otherwise provided by the bylaws of the
Company or by applicable law, no member of the Board or the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any RSA granted under it.
3. Eligibility.
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Employees and Non-Employee Directors shall be eligible to receive RSAs
under the Plan. More than one RSA may be granted to any Grantee under the Plan.
4. Stock.
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The maximum number of shares of Common Stock with respect to which RSAs may
be made under the Plan shall be, in the aggregate, five hundred thousand
(500,000) shares of Common Stock, subject to adjustment as hereinafter provided.
Shares issuable under the Plan may be authorized but unissued shares, treasury
shares or otherwise reacquired shares, and the Company may purchase shares
required for this purpose, from time to time, if it deems such purchase to be
advisable.
If any RSA hereunder is terminated, the unvested shares covered by such RSA
shall continue to be available for the granting of RSAs under the Plan as fully
as if such shares had never been subject to an RSA.
5. Granting of Restricted Stock Awards.
-----------------------------------
From time to time until the expiration or earlier suspension or
discontinuance of the Plan, the Committee may, on behalf of the Company, grant
such RSAs to Employees or Non-Employee Directors under the Plan as it determines
are warranted. In making any determination as to whether an Employee or Non-
Employee Director shall be granted a RSA and as to the number of shares to be
covered by such RSA, the Committee may take into account the duties of the such
Employee or Non-Employee Director, his/her present and potential contributions
to the success of the Company or a Related Corporation, the tax implications to
the Company and the Grantee of any RSA granted, and such other factors as the
Committee shall deem relevant in accomplishing the purposes of the Plan.
6. Terms and Conditions of Restricted Stock Awards Granted Under Plan.
------------------------------------------------------------------
RSAs granted pursuant to the Plan shall include expressly or by reference
the following terms and conditions, as well as such other provisions and
conditions not inconsistent with the provisions of the Plan as the Committee
shall deem desirable:
(a) Number of Shares. The RSA shall state the number of shares of
----------------
Restricted Stock awarded by the RSA.
(b) Payment for Shares. The Committee, in its sole discretion, shall
------------------
determine, and the Restricted Stock Agreement shall indicate, whether the
Grantee shall be required to pay to the Company any amount in return for the
RSA, and if so, the amount and method of payment required.
(c) Vesting Period. The Committee shall establish one or more Vesting
--------------
Periods with respect to the shares covered by an RSA, and may also establish
such additional conditions to the vesting of shares covered by an RSA as it may
deem advisable in its sole discretion, such as the achievement of
<PAGE>
corporate or individual goals. The length of such Vesting Period shall be within
the discretion of the Committee. Subject to the provisions of this Section 6,
shares subject to an RSA shall vest in the Grantee upon the expiration of the
Vesting Period with respect to such shares. The Committee may, in its sole
discretion, accelerate the Vesting Period with respect to an RSA at any time.
(d) Termination of Service.
----------------------
(1) Treatment of Unvested Shares. If a Grantee's Termination of
----------------------------
Service occurs prior to the expiration of the Vesting Period with respect to
shares subject to such Grantee's RSA, then, in such case, such Unvested Shares
shall be forfeited by the Grantee, except that the Committee, if it determines
that the circumstances warrant, may direct that all or a portion of such
Unvested Shares be vested in the Grantee (or his/her beneficiary (as determined
pursuant to Subsection (d) below) in the event of the Grantee's death), subject
to such further terms and conditions, if any, as the Committee may determine.
(2) Return of Amount Paid for Unvested Shares. In the event of a
-----------------------------------------
Grantee's Termination of Service, the Grantee (or his/her beneficiary (as
determined pursuant to subsection (e) below) in the event of the Grantee's
death) shall be entitled to receive an amount equal to the amount, if any, paid
by such Grantee for each Unvested Share which does not vest in the Grantee upon
such Termination of Service.
(e) Non-Transferability. During the Vesting Period, none of the
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Restricted Stock issued in accordance with an RSA may be sold, assigned,
bequeathed, transferred, pledged, hypothecated, alienated, or otherwise disposed
of in any way by a Grantee. However, a Grantee may, with the consent of the
Committee, designate one or more beneficiaries to receive, in the event of
his/her death, any stock to which he/she would then be entitled in accordance
with subsection (d). Such designation shall be made upon forms supplied by and
delivered to the Committee and may be revoked in writing. If a Grantee fails to
designate a beneficiary, his/her estate shall be his/her beneficiary. The shares
of stock included in each RSA shall be registered on the Company's books in the
name of the Grantee as of the award date. If stock certificates representing
such shares are issued in the name of a Grantee of an RSA prior to vesting of
such RSA, such certificates shall be held by the Company, together with a stock
power which shall be executed in favor of the Company by the Grantee, until such
time as the Vesting Period shall end. The certificates may include a legend
setting forth restrictions on transfer and any legend required under Section 7.
(f) Rights As a Stockholder. Except as set forth in subsection (e), a
-----------------------
Grantee shall have all of the rights of a stockholder with respect to the
Restricted Stock, including the right to vote the shares of Restricted Stock and
to receive all dividends or other distributions of assets made with respect to
such Restricted Stock, and any such dividends or other distributions paid to or
received by the Grantee in respect of such shares shall remain the property of
the Grantee and shall not be subject to forfeiture even though such shares may
revert to the Company as otherwise permitted under the Plan; provided, however,
that any shares or other assets distributed to the Grantee as the result of a
stock dividend, stock split, recapitalization, reorganization, merger,
consolidation, spin-off, share combination, exchange of shares or other similar
event or similar change in the capitalization of the Company shall be returned
by the Grantee upon receipt, together with a stock power as provided in
subsection (e), and shall be deemed Restricted Stock and subject to the
provisions of this Section 6 unless the Committee otherwise determines at the
time of such distribution.
(g) Restricted Stock Agreement. Each Grantee shall enter into, and be
--------------------------
bound by the terms of, a Restricted Stock Agreement which shall include or
incorporate by reference the terms of the RSA and of the Plan and which shall
contain such other terms, conditions and restrictions not inconsistent with the
Plan as the Committee shall determine, including such terms, conditions, and
restrictions as may be
<PAGE>
required by applicable securities or other laws or by any securities exchange on
which the Company's common stock is listed. Such Restricted Stock Agreement
shall also contain a specific covenant by the Grantee that he/she will comply
with the terms of subsection (f) in the event of any distribution of shares or
other assets as the result of a stock dividend, stock split, recapitalization,
reorganization, merger, consolidation, spin-off, share combination, exchange of
shares, or other similar event or similar change in the capitalization of the
Company.
(h) Agreement Not To Make Section 83(b) Election. Each Grantee shall
--------------------------------------------
agree in writing at the time of any RSA, and as a condition thereof, that he/she
shall not make an election under section 83(b) of the Code to include in his/her
gross income as determined for federal income tax purposes any part of the value
of Restricted Stock issued or transferred to him/her under the RSA unless all
restrictions pertaining to that portion of the RSA with respect to which the
Grantee desires to make an election have lapsed. If a Grantee makes such an
election with respect to any RSA granted to him/her, that portion of the
Restricted Stock covered by the RSA with respect to which he/she has made such
election shall be forfeited to the Company.
(i) Delivery of Certificates. Upon the vesting of an RSA, the Company
------------------------
shall, subject to the requirements of Section 8 and any other applicable
provision of the Plan and of the Restricted Stock Agreement, either (i) promptly
cause a stock certificate representing the vested shares to be issued in the
name of the Grantee or his/her beneficiary or estate, or (ii) release the
previously issued certificates representing the vested shares to the Grantee or
to his/her beneficiary or estate. Only full shares shall be released upon
vesting, and any fractional shares which might otherwise be released pursuant to
an RSA shall be forfeited.
7. Listing and Registration of Shares.
----------------------------------
Each RSA shall be subject to the requirement that, if at any time the
Committee shall determine, in its discretion, that the listing, registration or
qualification of the shares covered thereby upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such RSA or the purchase or vesting of shares thereunder,
or that action by the Company, its stockholders, or the Grantee should be taken
in order to obtain an exemption from any such requirement or to continue any
such listing, registration or qualification, no transfer of stock pursuant to
such RSA may be made, in whole or in part, unless and until such listing,
registration, qualification, consent, approval, or action shall have been
effected, obtained, or taken under conditions acceptable to the Committee.
Without limiting the generality of the foregoing, each Grantee or the legal
representative or beneficiary of such Grantee may also be required to give
satisfactory assurance that such person is an eligible purchaser under
applicable securities laws, and that the shares received pursuant to an RSA are
being acquired for investment and not with a view to distribution, and
certificates representing such shares may be legended accordingly.
8. Withholding and Use of Shares to Satisfy Tax Obligations.
--------------------------------------------------------
The obligation of the Company to deliver shares of Common Stock pursuant to
an RSA, or to make payment of dividends or other distributions with respect to
unvested shares covered by an RSA, shall be subject to applicable federal, state
and local tax withholding requirements.
If the vesting of any RSA is subject to the withholding requirements of
applicable federal tax laws, the Committee, in its discretion, may permit the
Grantee to satisfy the federal withholding tax, in whole or in part, by electing
to have the Company withhold (or by returning to the Company) shares of Common
Stock, which shares shall be valued, for this purpose, at their Fair Market
Value on the date shares subject to the RSA vest in the grantee, (or if later,
the date on which the Grantee recognizes ordinary income with respect to such
vesting).
<PAGE>
The Committee may adopt such withholding rules as it deems necessary to
carry out the provisions of this Section.
9. Capital Adjustments; Change in Control; Forfeiture Provisions.
-------------------------------------------------------------
The number of shares which may be issued under the Plan as stated in
Section 4 hereof shall be adjusted, as may be deemed appropriate by the
Committee, to reflect any stock dividend, stock split, recapitalization,
reorganization, merger, combination, spin-off, share combination, or other
similar event or similar change in the capitalization of the Company.
The Committee shall have the authority to include in any Restricted Stock
Agreement, or in any separate agreement or statement approved by the Committee,
(i) provisions accelerating the vesting of, or modifying the benefits to be
received under any RSA upon the occurrence of specified events, including an
acquisition of a specified percentage of the voting power of the Company's
outstanding securities, a specified change in the membership of the Company's
Board of Directors, the dissolution or liquidation of the Company, the sale of
all or substantially all of the property and assets of the Company or any other
"change in control" event, and (ii) provisions cancelling or providing for the
forfeiture of benefits provided under any RSA in the event the Grantee acts in a
specified manner which is contrary to the best interests of the Company.
10. Amendment or Discontinuance of the Plan.
---------------------------------------
The Board from time to time may suspend or amend the Plan in any respect
whatsoever, and the Committee may amend any outstanding RSAs in any respect
whatsoever, provided, that no such suspension or amendment shall materially
impair the rights of any Grantee of an outstanding RSA without the consent of
such Grantee.
11. Rights.
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Neither the adoption of the Plan nor any action of the Board or the
Committee shall be deemed to give any individual any right to be granted a RSA,
or any other right hereunder, unless and until the Committee shall have granted
such individual a RSA, and then his/her rights shall be only such as are
provided by the Restricted Stock Agreement.
Notwithstanding any provisions of the Plan or any Restricted Stock
Agreement with a Grantee, the Company shall have the right, in its discretion,
to retire an Employee at any time pursuant to its retirement rules or otherwise
to terminate his/her employment at any time for any reason whatsoever, with or
without cause.
12. Indemnification of Board and Committee.
--------------------------------------
(a) Indemnification. Without limiting any other rights of indemnification
---------------
which they may have from the Company and any Related Corporation, any member of
the Board and any member of the Committee who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of any action taken or failure to act under, or in connection with, the Plan or
any RSA granted thereunder, shall be indemnified by the Company against expenses
(including attorneys' fees), judgments, fines, excise taxes and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding to the full extent permissible under Delaware
law.
<PAGE>
(b) Advances. Any person claiming indemnification within the scope of
--------
subsection (a) of this Section 12 shall be entitled to advances from the Company
for payment of the expenses of defending actions against such person in the
manner and to the full extent permissible under Delaware law.
(c) Procedure. On the request of any person requesting indemnification
---------
under Subsection (a) of this Section 12, the Board or a committee thereof shall
determine whether such indemnification is permissible, or such determination
shall be made by independent legal counsel if the Board or committee so directs
or if the Board or committee is not empowered by statute to make such
determination.
13. Application of Funds.
--------------------
Any cash received in payment for an RSA or otherwise shall be added to the
general funds of the Company.
14. Effective Date; Termination of Plan.
-----------------------------------
(a) Effective Date. The effective date of the Plan is February 11, 1999,
--------------
the date of its adoption by the Board.
(b) Termination of Plan. The Board may terminate the Plan at any time for
-------------------
any reason. Nothing contained in this Section, however, shall terminate or
affect the continued existence of rights created under RSAs issued hereunder and
outstanding on the date the Plan is terminated, which by their terms extend
beyond such date.
15. Governing Law.
-------------
The laws of the State of Delaware shall govern the operation of the Plan,
the Restricted Stock Agreements and any RSAs granted thereunder.
<PAGE>
Exhibit 5
March 3, 1999
The Board of Directors of
Shared Medical Systems Corporation
Ladies and Gentlemen:
I am the General Counsel of Shared Medical Systems Corporation (the
"Company") and have acted as such in connection with the preparation and filing
with the Securities and Exchange Commission of the Company's Registration
Statement on Form S-8 under the Securities Act of 1933 (the "Registration
Statement") relating to 500,000 shares of the Common Stock of the Company, par
value $.01 per share (the "Shares"), issuable upon the award of stock grants to
be made under the Company's 1999 Restricted Stock Plan (the "Plan").
In this connection, I have reviewed the Company's Restated Certificate
of Incorporation and its By-Laws, as amended, resolutions of its Board of
Directors and its stockholders, the Plan and such other documents and corporate
records as I have deemed appropriate in the circumstances.
Based upon the foregoing and consideration of such questions of law as
I have deemed relevant, I am of the opinion that the issuance of the Shares by
the Company upon the awarding of stock grants properly made under the Plan has
been duly and validly authorized by the necessary corporate action, and the
Shares will, upon the awarding of such stock grants and payment therefor in
accordance with the terms of the Plan, be validly issued, fully-paid and non-
assessable by the Company.
I consent to the use of this opinion as an exhibit to the Registration
Statement.
Sincerely yours,
/s/ Bonnie L. Shuman
Bonnie L. Shuman
General Counsel
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Shared Medical Systems Corporation:
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 Registration Statement of our reports dated February
9, 1998 included (or incorporated by reference) in Shared Medical Systems
Corporation's Form 10-K for the year ended December 31, 1997 and to all
references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Philadelphia, Pennsylvania
March 3, 1999
