As filed with the Securities and Exchange Commission on August 26, 1998
Registration No. 333-___
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
PRIME MEDICAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 74-2652727
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
1301 Capital of Texas Highway, Suite C-300
Austin, Texas 78746-6550
(Address of registrant's principal executive offices)
PRIME MEDICAL SERVICES, INC. AMENDED AND RESTATED
1993 STOCK OPTION PLAN
(Full title of the plan)
KENNETH S. SHIFRIN
Prime Medical Services, Inc.
1301 Capital of Texas Highway, Suite C-300
Austin, Texas 78746-6550
(512) 328-2892
(Name, address and telephone number
of registrant's agent for service)
Copies to:
TIMOTHY L. LA FREY
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1900 Frost Bank Plaza
816 Congress Avenue
Austin, Texas 78701
(512) 499-6200
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of the registered securities
will thereafter be effected upon option exercises under the Plan.
CALCULATION OF REGISTRATION FEE
<TABLE>
====================================================================================================================================
<S> <C> <C> <C> <C>
Title of securities Proposed maximum Offering Proposed maximum Amount of
to be registered amount to be price aggregate registration fee
registered(1) per share offering price
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value(1)...... 750,000 $7.875(2) $5,906,250(2) $1,742.35(2)
===================================================================================================================================
</TABLE>
(1) Pursuant to Rule 416, there are also being registered such additional
shares of common stock as may become issuable pursuant to the
antidilution provisions of the Plan. This Registration Statement also
pertains to rights to purchase shares of Common Stock of the
Registrant. One right is attached to and trades with each share of
Common Stock of the Registrant. Until the occurrence of certain
events, the rights are not exercisable and will not be evidenced or
transferred apart from the Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457(c) and Rule 457(h), using the average of
the high and low sales prices reported on The Nasdaq National Market
for the Registrant's Common Stock on August 24, 1998.
<PAGE>
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
Prime Medical Services, Inc., formerly known as New PMSI, Inc. (the
"Company") has previously filed a Registration Statement on Form S-8,
Registration No. 333-33743 with the Securities and Exchange Commission (the
"Commission") with respect to the registration of securities of the same class,
relative to the same employment benefit plan, as the securities being registered
pursuant to this Registration Statement.
The Company hereby incorporates by reference into this Registration
Statement the following documents previously filed with the Commission:
(a) The Form S-8 Registration Statement filed by the
Company on August 15, 1997 with the Commission as Registration No.
333-33743;
(b) The Company's Annual Report on Form 10-K/A (as amended
April, 30, 1998);
(c) The Company's Quarterly Report on Form 10-Q for the period
ended March 31, 1998;
(d) The Company's Quarterly Report on Form 10-Q for the period
ended June 30, 1998;
(e) The description of the Company's outstanding Common Stock
contained in the Company's Form 8-A, dated September 14, 1993; and
(f) The description of the rights issued to stockholders of
the Company contained in the Company's Form 8-A, dated March 10, 1994.
All reports and other 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, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in any document incorporated or deemed to be incorporated by reference herein
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 to constitute a part of this
Registration Statement, except as so modified or superseded.
Item 8. Exhibits
Exhibit Number Exhibit
5.1 Opinion of Akin, Gump, Strauss, Hauer & Feld,
L.L.P.
23.1 Consent of Akin, Gump, Strauss, Hauer &
Feld, L.L.P. (included in the Opinion filed
as Exhibit 5.1 to this Registration Statement)
23.2 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney (reference is made to the
Signature Page of this Registration
Statement)
99.1 Prime Medical Services, Inc. Amended and
Restated 1993 Stock Option Plan of Prime
Medical Services, Inc.
<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 Austin, State of Texas, on this 26th day of August,
1998.
PRIME MEDICAL SERVICES, INC.
By /s/: Cheryl Williams
--------------------
Cheryl Williams
Vice President-Finance
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Prime Medical Services,
Inc., a Delaware corporation, do hereby constitute and appoint Kenneth S.
Shifrin and Cheryl Williams, and each of them, the lawful attorneys-in-fact and
agents with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and either one
of them, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Signature Title Date
/s/: Kenneth S. Shifrin Chairman of the Board and August 26, 1998
- --------------------------- Director
KENNETH S. SHIFRIN
/s/: Joseph Jenkins, M.D. President, Chief Executive August 26, 1998
- --------------------------- Officer and Director
JOSEPH JENKINS, M.D.
/s/: Cheryl Williams Chief Financial Officer, August 26, 1998
- --------------------------- Vice President-Finance and
CHERYL WILLIAMS Secretary (Chief Accounting
Officer)
/s/: Paul R. Butrus Director August 26, 1998
- ---------------------------
PAUL R. BUTRUS
/s/: William E. Foree, M.D. Director August 26, 1998
- ---------------------------
WILLIAM E. FOREE, M.D.
/s/: Irwin Katz Director August 26, 1998
- ---------------------------
IRWIN KATZ
/s/: John A. McEntire Director August 26, 1998
- ---------------------------
JOHN A. MCENTIRE IV
/s/: William A. Searles Director August 26, 1998
- ---------------------------
WILLIAM A. SEARLES
/s/: Michael J. Spalding, M.D. Director August 26, 1998
- ------------------------------
MICHAEL J. SPALDING, M.D.
<PAGE>
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit Number Exhibit Page
5.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, i
L.L.P.
23.1 Consent of Akin, Gump, Strauss, Hauer & Feld,
L.L.P. (included in the Opinion filed as
Exhibit 5.1 to this Registration Statement)
23.2 Consent of KPMG Peat Marwick LLP ii
24.1 Power of Attorney (reference is made to the
Signature Page of this Registration Statement)
99.1 Prime Medical Services, Inc. Amended and iii
Restated 1993 Stock Option Plan
EXHIBIT 5.1
<PAGE>
August 26, 1998
Prime Medical Services, Inc.
1301 Capital of Texas Highway
Suite C-300
Austin, Texas 78746
Gentlemen:
We have acted as counsel to Prime Medical Services, Inc., a Delaware
corporation (the "Company"), in connection with the registration, on the
Company's Registration Statement on Form S-8 (the "Registration Statement") to
be filed under the Securities Act of 1933, as amended (the "Securities Act"), of
the offer and sale of an aggregate of 750,000 shares of common stock, par value
$.01 per share, of the Company (the "Common Stock"), as that number may be
adjusted from time to time pursuant to the provisions of the Company's Amended
and Restated 1993 Stock Option Plan, as amended (the "Plan"), that may be issued
pursuant to stock options (the "Options") granted under the Plan.
In reaching the opinion set forth herein, this firm has reviewed such
agreements, certificates of public officials and officers of the Company,
records, documents, and matters of law that this firm deemed relevant, including
(a) the Registration Statement, (b) the Certificate of Incorporation of the
Company, (c) the Bylaws of the Company, and (d) the Plan.
Based upon and subject to the foregoing and subject further to the
assumptions, exceptions, and qualifications hereinafter stated, this firm
expresses the opinion that each share of Common Stock, when issued in accordance
with the terms of the Plan and related option agreement, will be legally issued,
fully paid, and non-assessable.
The opinion expressed above is subject to the following assumptions,
exceptions, and qualifications:
1. This firm has assumed that (i) all information contained in all
documents reviewed by this firm is true and correct, (ii) all signatures on all
documents reviewed by this firm are genuine, (iii) all documents submitted to
this firm as originals are true and complete, (iv) all documents submitted as
copies are true and complete copies of the originals thereof, (v) each natural
person signing any document reviewed by this firm had the legal capacity to do
so and (vi) each person signing in a representative capacity any document
reviewed by this firm had authority to sign in such capacity.
2. This firm has also assumed that the Company has received or will
receive the full amount and type of consideration (as specified in the Plan and
each applicable option agreement) for each of the shares of Common Stock or will
have received that consideration upon the issuance of Common Stock pursuant to
the applicable Option, that such consideration will be either cash or personal
property, that such consideration will equal or exceed the par value per share
of Common Stock, that appropriate certificates evidencing such shares will be
properly executed upon such issuance, and that each grant of an Option pursuant
to the Plan will be duly authorized.
The opinions expressed above are limited to the laws of the State of
Texas and the General Corporation Law of the State of Delaware. You should be
aware that this firm is not admitted to the practice of law in the State of
Delaware and the opinion herein as to the General Corporation law of the State
of Delaware is based solely upon the latest unofficial compilation thereof
available to this firm.
This opinion may be filed as an exhibit to the Registration Statement.
In giving this consent, we do not thereby admit that we come into 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 promulgated
thereunder.
Very truly yours,
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
By: /s/ Timothy L. LaFrey
-----------------------------
Timothy L. LaFrey, Partner
EXHIBIT 23.2
<PAGE>
INDEPENDENT AUDITORS' CONSENT
----------------------------------------------------------
The Board of Directors
Prime Medical Services, Inc.:
We consent to the use of our report incorporated herein by reference.
/s/ KPMG PEAT MARWICK LLP
- -------------------------
KPMG PEAT MARWICK LLP
Austin, Texas
August 26, 1998
EXHIBIT 99.1
<PAGE>
PRIME MEDICAL SERVICES, INC.
AMENDED AND RESTATED
1993 STOCK OPTION PLAN
Scope and Purpose of Plan
Prime Medical Services, Inc., a Delaware corporation (the
"Corporation"), has adopted this Stock Option Plan (the "Plan") to provide for
the granting of:
Incentive Options (hereinafter defined) to certain key employees of the
Corporation, or of its Affiliates (hereinafter defined), and
Non-Incentive Options (hereinafter defined) to certain key employees
and nonemployee directors of the Corporation or of its Affiliates.
The purpose of the Plan is to provide an incentive for Eligible Individuals
(hereinafter defined) to remain in the service of the Corporation or its
Affiliates, to extend to them the opportunity to acquire a proprietary interest
in the Corporation so that they will apply their best efforts for the benefit of
the Corporation, and to aid the Corporation in attracting able persons to enter
the service of the Corporation and its Affiliates. On June 10, 1998, the
shareholders of the Corporation approved an amendment increasing the number of
shares of Common Stock (as defined below) which may be issued pursuant to
Options (as defined below) granted under the Plan from 2,500,000 to 3,250,000.
The Plan was originally executed on October 12, 1993 and incorporates all
amendments through June 10,1998.
SECTION 1. Definitions
- ---------- -----------
1.1. "Act" shall mean the Securities Exchange Act of 1934, as amended.
1.2. "Affiliates" shall mean (a) any corporation, other than the
Corporation, in an unbroken chain of corporations ending with the Corporation if
each of the corporations, other than the Corporation, owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain and (b) any corporation,
other than the Corporation, in an unbroken chain of corporations beginning with
the Corporation if each of the corporations, other than the last corporation in
the unbroken chain, owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
1.3. "Agreement" shall mean the written agreement between the Corporation
and a Holder evidencing the Option granted by the Corporation and the
understanding of the parties with respect thereto.
1.4. "Board of Directors" shall mean the board of directors of the
Corporation.
1.5. "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.6. "Administrator" shall mean the Administrator appointed pursuant to
Section 3.1 to administer the Plan.
1.7. "Non-Employee Directors" shall mean directors who meet the definition
of "Non-Employee Directors" under Rule 16b-3 under the Act.
1.8. "Effective Date" shall mean the date that PMSI Acquisition Corporation
is merged with and into Prime Medical Services, Inc.
1.9. "Eligible Individuals" shall mean (a) key employees, including
officers and directors who are also employees of the Corporation or of any of
its Affiliates, (b) nonemployee directors and officers of the Corporation or of
any of its Affiliates and (c) consultants and advisors of the Corporation or of
any of its Affiliates who render bona fide services to the Corporation or of any
of its Affiliates; provided such services must not be in connection with the
offer or sale of securities in a capital-raising transaction.
1.10. "Fair Market Value" shall mean:
(a) If shares of Stock of the same class are listed or admitted to unlisted
trading privileges on any national or regional securities exchange at the date
of determining the Fair Market Value, the last reported sale price on such
exchange on the last business day prior to the date in question; or
(b) If shares of Stock of the same class shall not be listed or admitted to
unlisted trading privileges as provided in Subparagraph 1.10(a) and sales prices
therefor in the over-the-counter market shall be reported by the National
Association of Securities Dealers, Inc. Automated Quotations, Inc. ("NASDAQ")
National Market System at the date of determining the Fair Market Value, the
last reported sale price so reported on the last business day prior to the date
in question; or
(c) If shares of Stock of the same class shall not be listed or admitted to
unlisted trading privileges as provided in Subparagraph 1.10(a) and sales prices
therefor shall not be reported by the NASDAQ National Market System as provided
in Subparagraph 1.10(b), and bid and asked prices therefor in the
over-the-counter market shall be reported by NASDAQ (or, if not so reported, by
the National Quotation Bureau Incorporated) at the date of determining the Fair
Market Value, the average of the closing bid and asked prices on the last
business day prior to the date in question; and
(d) If shares of Stock of the same class shall not be listed or admitted to
unlisted trading privileges as provided in Subparagraph 1.10(a) and sales prices
or bid and asked prices therefor shall not be reported by NASDAQ (or the
National Quotation Bureau Incorporated) as provided in Subparagraph 1.10(b) or
Subparagraph 1.10(c) at the date of determining the Fair Market Value, the value
determined in good faith by the Administrator. For purposes of valuing Incentive
Options, the Fair Market Value of Stock shall be determined without regard to
any restriction other than one which, by its terms, will never lapse.
1.11. "Holder" shall mean an Eligible Individual to whom an Option has been
granted.
1.12. "Incentive Options" shall mean stock options that are intended to
satisfy the requirements of section 422A of the Code.
1.13. "Non-Incentive Options" shall mean stock options that do not satisfy
the requirements of section 422A of the Code.
1.14. "Options" shall mean either Incentive Options or Non-Incentive
Options, or both.
1.15. "Stock" shall mean the Corporation's authorized common stock, $.01
par value, together with any other securities with respect to which Options
granted hereunder may become exercisable.
SECTION 2. Stock and Maximum Number of Shares Subject to the Plan.
- ---------- -------------------------------------------------------
2.1. Description of Stock and Maximum Shares Allocated. The Stock which
Options granted hereunder give a Holder the right to purchase may be unissued or
reacquired shares of Stock, as the Corporation may, in its sole and absolute
discretion, from time to time determine.
Subject to the adjustments provided for in Paragraph 6.7 hereof, the
aggregate number of shares of Stock to be issued pursuant to the exercise of all
Options granted hereunder may equal but shall not exceed 3,250,000 shares of
Stock.
2.2. Restoration of Unpurchased Shares. If an Option granted hereunder
expires or terminates for any reason during the term of this Plan and prior to
the exercise of the Option in full, the shares of Stock subject to but not
issued under such Option shall again be available for Options granted hereunder
subsequent thereto.
SECTION 3. Administration of the Plan.
- ---------- ---------------------------
3.1. Administrator. An administrative body designated by the Board of
Directors shall administer the Plan (the "Administrator"). The Board of
Directors may designate itself as the Administrator or appoint two or more
Non-Employee Directors to a committee which shall serve as the Administrator.
3.2. Meetings and Actions of Administrator. The Administrator shall hold
its meetings at such times and places as it may determine. All decisions and
determinations of the Administrator shall be made by the majority vote or
decision of all of its members present at a meeting; provided, however, that any
decision or determination reduced to writing and signed by all of the members of
the Administrator shall be as fully effective as if it had been made at a
meeting duly called and held. The Administrator may make any rules and
regulations for the conduct of its business that are not inconsistent with the
provisions hereof and with the bylaws of the Corporation as it may deem
advisable.
3.3. Administrator's Powers. Subject to the express provisions hereof, the
Administrator shall have the authority, in its sole and absolute discretion, (a)
to adopt, amend, and rescind administrative and interpretive rules and
regulations relating to the Plan; (b) to determine the terms and provisions of
the respective Agreements (which need not be identical), including provisions
defining or otherwise relating to (i) subject to Section 6 of the Plan, the term
and the period or periods and extent of exercisability of the Options, (ii) the
extent to which the transferability of shares of Stock issued upon exercise of
Options is restricted, and (iii) the effect of approved leaves of absence
(consistent with any applicable regulations of the Internal Revenue Service);
(c) to accelerate the time of exercisability of any Option that has been
granted; (d) to construe the respective Agreements and the Plan; and (e) to make
all other determinations and perform all other acts necessary or advisable for
administering the Plan, including the delegation of such ministerial acts and
responsibilities as the Administrator deems appropriate. The Administrator may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any Agreement in the manner and to the extent it shall deem expedient
to carry it into effect, and it shall be the sole and final judge of such
expediency. The Administrator shall have full discretion to make all
determinations on the matters referred to in this Paragraph 3.3; such
determinations shall be final, binding and conclusive.
SECTION 4. Eligibility and Participation.
- ---------- ------------------------------
4.1. Eligible Individuals. Options may be granted hereunder only to persons
who are Eligible Individuals at the time of the grant thereof. Notwithstanding
any provision contained herein to the contrary, a person shall not be eligible
to receive an Incentive Option hereunder unless he is an employee of the
Corporation or an Affiliate, nor shall a person be eligible to receive an
Incentive Option hereunder if he, at the time such Option is granted, would own
(within the meaning of sections 422A and 425 of the Code) stock possessing more
than ten percent (10%) of the total combined voting power or value of all
classes of stock of the Corporation or of an Affiliate unless at the time such
Incentive Option is granted the exercise price per share of Stock is at least
one hundred and ten percent (110%) of the Fair Market Value of each share of
Stock to which the Incentive Option relates and the Incentive Option is not
exercisable after the expiration of five years from the date it is granted.
4.2 No Right to Option. The adoption of the Plan shall not be deemed to
give any person a right to be granted an Option.
SECTION 5. Grant of Options and Certain Terms of the Agreements.
- ---------- -----------------------------------------------------
Subject to the express provisions hereof, the Administrator shall determine
which Eligible Individuals shall be granted Options hereunder from time to time.
In making grants, the Administrator shall take into consideration the
contribution the potential Holder has made or may make to the success of the
Corporation or its Affiliates and such other considerations as the Administrator
may from time to time specify. The Administrator shall also determine the number
of shares subject to each of such Options, and shall authorize and cause the
Corporation to grant Options in accordance with such determinations.
The date on which the Administrator completes all action constituting an
offer of an Option to an individual, including the specification of the number
of shares of Stock to be subject to the Option, shall be the date on which the
Option covered by an Agreement is granted, even though certain terms of the
Agreement may not be at such time determined and even though the Agreement may
not be executed until a later time. In no event, however, shall an Optionee gain
any rights in addition to those specified by the Administrator in its grant,
regardless of the time that may pass between the grant of the Option and the
actual execution of the Agreement by the Corporation and the Optionee.
Each Option granted hereunder shall be evidenced by an Agreement, executed
by the Corporation and the Eligible Individual to whom the Option is granted,
incorporating such terms as the Administrator shall deem necessary or desirable.
More than one Option may be granted hereunder to the same Eligible Individual
and be outstanding concurrently hereunder. In the event an Eligible Individual
is granted both one or more Incentive Options and one or more Non-Incentive
Options, such grants shall be evidenced by separate Agreements, one for each of
the Incentive Option grants and one for each of the Non-Incentive Option grants.
Each Agreement may contain or otherwise provide for conditions giving
rise to the forfeiture of the Stock acquired pursuant to an Option granted
hereunder or otherwise and such restrictions on the transferability of shares of
the Stock acquired pursuant to an Option granted hereunder or otherwise as the
Administrator in its sole and absolute discretion shall deem proper or
advisable. Such conditions giving rise to forfeiture may include, but need not
be limited to, the requirement that the Holder render substantial services to
the Corporation or its Affiliates for a specified period of time. Such
restrictions on transferability may include, but need not be limited to, options
and rights of first refusal in favor of the Corporation and shareholders of the
Corporation other than the Holder of such shares of Stock who is a party to the
particular Agreement or a subsequent holder of the shares of Stock who is bound
by such Agreement. In addition, no Option may be exercisable for a period of
more than ten years from the date the Option is granted.
SECTION 6. Terms and Conditions of Options.
- ---------- --------------------------------
All Options granted hereunder shall comply with, be deemed to include,
and shall be subject to the following terms and conditions:
6.1. Number of Shares. Each Agreement shall state the number of shares of
Stock to which it relates.
6.2. Exercise Price. Each Agreement shall state the exercise price per
share of Stock. The exercise price per share of Stock subject to an Incentive
Option shall not be less than the greater of (a) the par value per share of the
Stock or (b) 100% of the Fair Market Value per share of the Stock on the date of
the grant of the Option. The exercise price per share of Stock subject to a
Non-Incentive Option shall be determined by the Administrator upon the granting
of the Non-Incentive Option.
6.3. Automatic Options. Notwithstanding Paragraph 6.2, on the Effective
Date the persons then holding unexercised options granted pursuant to the 1990
Stock Option Plan and Second Amended and Restated Stock Option Plan of Prime
Medical Services, Inc. ("Prime Plans"), shall automatically be granted
Non-Incentive Options under the Plan covering the same number of shares of
Stock, at the same exercise price and for the same term as set forth in the
options granted to such persons under the Prime Plans. The grant of such
Non-Incentive Options shall be in cancellation of such options granted to such
persons under the Prime Plans.
6.4. Medium and Time of Payment, Method of Exercise, and Withholding Taxes.
The exercise price of an Option shall be payable upon the exercise of the Option
in cash or by certified or cashier's check payable to the order of the
Corporation (or by personal check if agreed to by the Corporation), or, with the
consent of the Administrator, with shares of Stock of the Corporation owned by
the Holder, including a multiple series of exchanges of such Stock, or with the
consent of the Administrator, by a combination of cash and such shares. Exercise
of an Option shall not be effective until the Corporation has received written
notice of exercise. Such notice must specify the number of whole shares to be
purchased and be accompanied by payment in full of the aggregate exercise price
of the number of shares purchased. The Corporation shall not in any case be
required to sell, issue, or deliver a fractional share of Stock with respect to
any Option.
The Administrator may, in its discretion, require a Holder to pay to
the Corporation at the time of exercise of an Option or portion thereof the
amount that the Corporation deems necessary to satisfy its obligation to
withhold Federal, state or local income or other taxes incurred by reason of the
exercise. Where the exercise of an Option does not give rise to an obligation to
withhold Federal income or other taxes on the date of exercise, the Corporation
may, in its discretion, require a Holder to place shares of Stock purchased
under the Option in escrow for the benefit of the Corporation until such time as
Federal income or other tax withholding is no longer required with respect to
such shares or until such withholding is required on amounts included in the
gross income of the Holder as a result of the exercise of an Option or the
disposition of shares of Stock acquired pursuant thereto. At such later time,
the Corporation, in its discretion, may require a Holder to pay to the
Corporation the amount that the Corporation deems necessary to satisfy its
obligation to withhold Federal, state or local income or other taxes incurred by
reason of the exercise of the Option or the disposition of shares of Stock. Upon
receipt of such payment by the Corporation, such shares of Stock shall be
released from escrow to the Holder.
6.5. Term, Time of Exercise, and Transferability of Options. In
addition to such other terms and conditions as may be included in a particular
Agreement granting an Option, an Option shall be exercisable during a Holder's
lifetime only by the Holder or by the Holder's guardian or legal representative.
Incentive Options shall not be transferable other than by will or the laws of
descent and distribution. Non-Incentive Options shall not be transferable other
than by will or the laws of descent and distribution, or upon the express prior
written consent of the Administrator in each instance. The provisions of the
remainder of this paragraph shall apply to the extent a Holder's Agreement does
not expressly provide otherwise. If a Holder ceases to be an Eligible
Individual, the Option shall terminate ninety days after such Holder ceases to
be an Eligible Individual. Notwithstanding the foregoing, if a Holder ceases to
be an Eligible Individual by reason of (a) disability (as defined in section
105(d)(4)), or (b) death, then the Holder shall have the right for twelve months
after the date of disability or death to exercise an Option to the extent such
Option is exercisable on the date of his disability.
That portion of the Option which is not exercisable on the date the
Holder ceases to be an Eligible Individual shall terminate and be forfeited to
the Corporation on the date of such cessation.
Notwithstanding any other provision of this Plan, no Incentive Option
shall be exercisable after the expiration of ten years from the date it is
granted, or the period specified in Paragraph 4.1, if applicable. The
Administrator shall have authority to prescribe in any Agreement that the Option
evidenced thereby may be exercised in full or in part as to any number of shares
subject thereto at any time or from time to time during the term of the Option,
or in such installments at such times during said term as the Administrator may
prescribe. Except as provided above and unless otherwise provided in any
Agreement, an Option may be exercised at any time or from time to time during
the term of the Option. Such exercise may be as to any or all whole (but no
fractional) shares which have become purchasable under the Option.
Within a reasonable time or such time as may be permitted by law after
the Corporation receives written notice that the Holder has elected to exercise
all or a portion of an Option, such notice to be accompanied by payment in full
of the aggregate Option exercise price of the number of shares of Stock
purchased, the Corporation shall issue and deliver a certificate representing
the shares acquired in consequence of the exercise and any other amounts payable
in consequence of such exercise. In the event that a Holder exercises both an
Incentive Option, or portion thereof, and a Non-Incentive Stock Option, or a
portion thereof, separate Stock certificates shall be issued, one for the Stock
subject to the Incentive Option and one for the Stock subject to the
Non-Incentive Stock Option. The number of the shares of Stock transferable due
to an exercise of an Option under this Plan shall not be increased due to the
passage of time, except as may be provided in an Agreement. However, this number
of such shares of Stock which are transferable may increase due to the
occurrence of certain events which are fully described in Paragraph 6.7.
Nothing herein or in any Option granted hereunder shall require the
Corporation to issue any shares upon exercise of any Option if such issuance
would, in the opinion of counsel for the Corporation, constitute a violation of
the Securities Act of 1933, as amended, or any similar or superseding statute or
statutes, or any other applicable statue or regulation, as then in effect. At
the time of any exercise of an Option, the Corporation may, as a condition
precedent to the exercise of such Option, require from the Holder of the Option
(or in the event of his death, his legal representatives, heirs, legatees, or
distributees) such written representations, if any, concerning his intentions
with regard to the retention or disposition of the shares being acquired by
exercise of such Option and such written covenants and agreements, if any, as to
the manner of disposal of such shares as, in the opinion of counsel to the
Corporation, may be necessary to ensure that any disposition by such Holder (or
in the event of his death, his legal representatives, heirs, legatees, or
distributees), will not involve a violation of the Securities Act of 1933, as
amended, or any similar or superseding statute or statutes, or any other
applicable state or federal statute or regulation, as then in effect.
Certificates for shares of Stock, when issued, may have the following or similar
legend, or statements of other applicable restrictions, endorsed thereon, and
may not be immediately transferable:
The shares of Stock evidenced by this certificate have been issued to
the registered owner in reliance upon written representations
that these shares have been purchased for investment. These
shares have not been registered under the Securities Act of 1933,
as amended, or any applicable state securities laws, in reliance
upon an exception from registration. Without such registration,
these shares may not be sold, transferred, assigned or otherwise
disposed of unless, in the opinion of the Corporation and its
legal counsel, such sale, transfer, assignment or disposition
will not be in violation of the Securities Act of 1933, as
amended, applicable rules and regulations of the Securities and
Exchange Commission, and any applicable state securities laws.
6.6. Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option. Except as is
otherwise provided in the second paragraph of Paragraph 6.7 hereof, with respect
to any Incentive Option granted under this Plan, the sum of:
(a) the aggregate Fair Market Value of shares of Stock subject to such
Incentive Option that first become purchasable in a calendar year
under such Incentive Option, and
(b) the aggregate Fair Market Value of shares of Stock or stock of any
Affiliate (or a predecessor of the Corporation or an Affiliate)
subject to any other incentive stock option (within the meaning of
section 422A of the Code) of the Corporation or its Affiliates (or a
predecessor corporation of any such corporation), that first become
purchasable in a calendar year under such incentive stock option may
not (with respect to any Holder) exceed $100,000, with such Fair
Market Value to be determined as of the date the Incentive Option or
such other incentive stock option is granted.
For purposes of this Paragraph 6.6, "predecessor corporation" means (i) a
corporation that was a party to a transaction described in section 425(a) of the
Code (or which would be so described if a substitution or assumption under such
section had been effected) with the Corporation, (ii) a corporation which, at
the time the new incentive stock option (within the meaning of section 422A of
the Code) is granted, is an Affiliate of the Corporation or a predecessor
corporation of any such corporations, or (iii) a predecessor corporation of any
such corporations.
6.7. Adjustments Upon Changes in Capitalization. Notwithstanding any other
provision hereof, in the event of any change in the number of outstanding shares
of Stock effected without receipt of consideration therefor by the Corporation,
by reason of a stock dividend, or split, combination, exchange of shares or
other recapitalization, merger, or otherwise, in which the Corporation is the
surviving corporation (1) the aggregate number and class of the reserved shares,
(2) the number and class of shares subject to each outstanding Option and (3)
the exercise price of each outstanding Option shall be automatically adjusted to
equitably reflect the effect thereon of such change (provided, however, that any
fractional share resulting from such adjustment may be eliminated). In the event
of a dispute concerning such adjustment, the Administrator has full discretion
to determine the resolution of the dispute. Such determination shall be final,
binding and conclusive. The number of reserved shares or the number of shares
subject to any outstanding Option shall be automatically reduced by any fraction
included therein which results from any adjustment made pursuant to this
Paragraph 6.7.
The following provisions of this Paragraph 6.7 shall apply unless a
Holder's Agreement provides otherwise. In the event of:
(a) a dissolution or liquidation of the Corporation,
(b) a merger or consolidation (other than a merger effecting
a re-incorporation of the Corporation in another state or any
other merger or a consolidation in which the shareholders of
the surviving corporation and their proportionate interests
therein immediately after the merger or consolidation are
substantially identical to the shareholders of the Corporation
and their proportionate interests therein immediately prior to
the merger or consolidation) in which the Corporation is not
the surviving corporation (or survives only as a subsidiary of
another corporation in a transaction in which the shareholders
of the parent of the Corporation and their proportionate
interests therein immediately after the transaction are not
substantially identical to the shareholders of the Corporation
and their proportionate interests therein immediately prior to
the transaction; provided, however, that the Administrator may
at any time prior to such a merger or consolidation provide by
resolution that the foregoing provisions of this parenthetical
shall not apply if a majority of the board of directors of
such parent immediately after the transaction consists of
individuals who constituted a majority of the Board of
Directors immediately prior to the transaction), or
(c) a transaction in which any person (other than a
shareholder of the Corporation that already is the owner of
50% or more of the total combined voting power of all classes
of the Corporation on the date of the Holder's Agreement)
becomes the owner of 50% or more of the total combined voting
power of all classes of stock of the Corporation (provided,
however, that the Administrator may at any time prior to such
transaction provide by resolution that this subparagraph (c)
shall not apply if such acquiring person is a corporation and
a majority of the board of directors of the acquiring
corporation immediately after the transaction consists of
individuals who constituted a majority of the Board of
Directors immediately prior to the acquisition of such 50% or
more total combined voting power)
the Administrator may, at its election, as of the effective time of such
transaction, either (1) change the number and kind of shares of stock (including
substitution of shares of another corporation) and exercise price in the manner
it deems appropriate, provided, however, that in no event may any change be made
under this Paragraph 6.7 which would constitute a "modification" within the
meaning of section 425(h)(3) of the Code; or (2) purchase the Options from each
Holder by tendering cash equal to the Fair Market Value of the Stock represented
by the Options less the exercise price of the Options specified in each
Agreement, without regard to the determination as to the periods and
installments of exercisability made pursuant to a Holder's Agreement if (and
only if) such Options have not at that time expired or been terminated.
6.8. Rights as a Shareholder. A Holder shall have no right as a shareholder
with respect to any shares covered by his Option until a certificate
representing such shares is issued to him. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash or other property) or
distributions or other rights for which the record date is prior to the date
such certificate is issued, except as provided in Paragraph 6.7 hereof.
6.9. Modification, Extension and Renewal of Options. Subject to the terms
and conditions of and within the limitations of the Plan, the Administrator may
modify, extend or renew outstanding Options granted under the Plan, or accept
the surrender of Options outstanding hereunder (to the extent not theretofore
exercised) and authorize the granting of new Options hereunder in substitution
therefor (to the extent not theretofore exercised). The Administrator may not,
however, without the consent of the Holder, modify any outstanding Options so as
to specify a higher or lower exercise price or base amount or accept the
surrender of outstanding Incentive Options and authorize the granting of new
Options in substitution therefor specifying a higher or lower exercise price. In
addition, no modification of an Option granted hereunder shall, without the
consent of the Holder, alter or impair any rights or obligations under any
Option theretofore granted hereunder to such Holder under the Plan, except as
may be necessary, with respect to Incentive Options, to satisfy the requirements
of section 422A of the Code.
6.10. Furnish Information. Each Holder shall furnish to the Corporation all
information requested by the Corporation to enable it to comply with any
reporting or other requirement imposed upon the Corporation by or under any
applicable statute or regulation.
6.11. Obligation to Exercise; Termination of Employment. The granting of an
Option hereunder shall impose no obligation upon the Holder to exercise the same
or any part thereof. In the event of a Holder's termination of employment with
the Corporation or an Affiliate, the unexercised portion of an Option granted
hereunder shall terminate in accordance with Paragraph 6.5 hereof.
6.12. Agreement Provisions. The Agreements authorized under the Plan
shall contain such provisions in addition to those required by the Plan
(including, without limitation, restrictions or the removal of restrictions upon
the exercise of the Option and the retention or transfer of shares thereby
acquired) as the Administrator shall deem advisable. Each Agreement shall
identify the Option evidenced thereby as an Incentive Option or a Non-Incentive
Option, as the case may be, and no Agreement shall cover both an Incentive
Option and a Non-Incentive Option. Each Agreement relating to an Incentive
Option granted hereunder shall contain such limitations and restrictions upon
the exercise of the Incentive Option to which it relates as shall be necessary
for the Incentive Option to which such Agreement relates to constitute an
incentive stock option, as defined in section 422A of the Code.
SECTION 7. Remedies.
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7.1. Attorneys Fees. The Corporation shall be entitled to recover from a
Holder reasonable attorneys' fees incurred in connection with the enforcement of
the terms and provisions of the Plan and any Agreement whether by an action to
enforce specific performance or for damages for its breach or otherwise.
7.2. Specific Performance. The Corporation shall be entitled to enforce the
terms and provisions of this Paragraph 7, including the remedy of specific
performance, in Travis County, Texas.
SECTION 8. Duration of Plan.
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No Options will be granted herein after the date that is ten years from
the earlier of (a) the date the Plan is accepted by the Board of Directors or
(b) the date the Plan is approved by the stockholders of the Corporation.
SECTION 9. Amendment of Plan.
- ---------- ------------------
The Board of Directors may at any time terminate or from time to time
amend or suspend the Plan; provided, however, that no such amendment shall,
without approval of the shareholders of the Corporation, except as provided in
Section 7 hereof, (a) increase the aggregate number of shares of Stock as to
which Options may be granted under the Plan; (b) change the minimum Option
exercise price; (c) increase the maximum period during which Options may be
exercised; or (d) extend the effective period of the Plan. No Option may be
granted during any suspension of the Plan or after the Plan has been terminated
and no amendment, suspension or termination shall, without a Holder's consent,
adversely alter or impair any of the rights or obligations under any Option
theretofore granted to such Holder under the Plan.
SECTION 10. General.
- ----------- --------
10.1. Application of Funds. The proceeds received by the Corporation from
the sale of shares pursuant to Options shall be used for general corporate
purposes.
10.2. Right of the Corporation and Affiliates to Terminate Employment.
Nothing contained in the Plan, or in any Agreement, shall confer upon any Holder
the right to continue in the employ of the Corporation or any Affiliate, or
interfere in any way with the rights of the Corporation or any Affiliate to
terminate his employment any time.
10.3. No Liability for Good Faith Determinations. Neither the members of
the Board of Directors nor any member of the Administrator shall be liable for
any act, omission, or determination taken or made in good faith with respect to
the Plan or any Option granted under it, and members of the Board of Directors
and the Administrator shall be entitled to indemnification and reimbursement by
the Corporation in respect of any claim, loss, damage, or expense (including
attorneys' fees, the costs of settling any suit, provided such settlement is
approved by independent legal counsel selected by the Corporation, and amounts
paid in satisfaction of a judgment, except a judgment based on a finding of bad
faith) arising therefrom to the full extent permitted by law and under any
directors and officers liability or similar insurance coverage that may from
time to time be in effect.
10.4. Information Confidential. As partial consideration for the granting
of each Option hereunder, the Agreement may, in the Administrator's sole and
absolute discretion, provide that the Holder shall agree with the Corporation
that he will keep confidential all information and knowledge that he has
relating to the manner and amount of his participation in the Plan; provided,
however, that such information may be disclosed as required by law and may be
given in confidence to the Holder's spouse, tax and financial advisors, or to a
financial institution to the extent that such information is necessary to secure
a loan. In the event any breach of this promise comes to the attention of the
Administrator, it shall take into consideration such breach, in determining
whether to recommend the grant of any future Option to such Holder, as a factor
militating against the advisability of granting any such future Option to such
individual.
10.5. Other Benefits. Participation in the Plan shall not preclude the
Holder from eligibility in any other stock option plan of the Corporation or any
Affiliate or any old age benefit, insurance, pension, profit sharing,
retirement, bonus, or other extra compensation plans which the Corporation or
any Affiliate has adopted, or may, at any time, adopt for the benefit of its
employees.
10.6. Execution of Receipts and Releases. Any payment of cash or any
issuance or transfer of shares of Stock to the Holder, or to his legal
representative, heir, legatee, or distributee, in accordance with the provisions
hereof, shall, to the extent thereof, be in full satisfaction of all claims of
such persons hereunder. The Administrator may require any Holder, legal
representative, heir, legatee, or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
10.7. No Guarantee of Interests. Neither the Administrator nor the
Corporation gurarantees the Stock of the Corporation from loss or depreciation.
10.8. Payment of Expenses. All expenses incident to the administration,
termination, or protection of the Plan, including, but not limited to, legal and
accounting fees, shall be paid by the Corporation or its Affiliates; provided,
however, the Corporation or an Affiliate may recover any and all damages, fees,
expenses, and/or costs arising out of any actions taken by the Corporation to
enforce its rights hereunder.
10.9. Corporation Records. Records of the Corporation or its Affiliates
regarding the Holder's period of employment, termination of employment and the
reason therefor, leaves of absence, re-employment, and other matters shall be
conclusive for all purposes hereunder, unless determined by the Administrator to
be incorrect.
10.10. Information. The Corporation and its Affiliates shall, upon request
or as may be specifically required hereunder, furnish or cause to be furnished,
all of the information or documentation which is necessary or required by the
Administrator to perform its duties and functions under the Plan.
10.11. No Liability of Corporation. The Corporation assumes no obligation
or responsibility to the Holder or his legal representatives, heirs, legatees,
or distributees for any act of, or failure to act on the part of, the
Administrator.
10.12. Corporation Action. Any action required of the Corporation shall be
by resolution of its Board of Directors or by a person authorized to act by
resolution of the Board of Directors.
10.13. Severability. If any provision of this Plan is held to be illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions hereof, but such provision shall be fully severable and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included herein.
10.14. Notices. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail or by a
nationally recognized courier service. Any notice required or permitted to be
delivered hereunder shall be deemed to be delivered on the date on which it is
personally delivered, or, if mailed, whether actually received or not, on the
third business day after it is deposited in the United States mail, certified or
registered, postage prepaid, addressed to the person who is to receive it at the
address which such person has previously specified by written notice delivered
in accordance herewith or, if by courier, twenty-four hours after it is sent,
addressed as described in this Section. The Corporation or a Holder may change,
at any time and from time to time, by written notice to the other, the address
which it or he had previously specified for receiving notices. Until changed in
accordance herewith, the Corporation and each Holder shall specify as its and
his address for receiving notices the address set forth in the Agreement
pertaining to the shares to which such notice relates.
10.15. Waiver of Notice. Any person entitled to notice hereunder may waive
such notice.
10.16. Successors. The Plan shall be binding upon the Holder, his legal
representatives, heirs, legatees and distributees upon the Corporation, its
successors, and assigns, and upon the Administrator, and its successors.
10.17. Headings. The titles and headings of Sections and Paragraphs are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
10.18. Governing Law. All questions arising with respect to the provisions
of the Plan shall be determined by application of the laws of the State of Texas
except to the extent Texas law is preempted by federal law. Questions arising
with respect to the provisions of an Agreement that are matters of contract law
shall be governed by the laws of the state specified in the Agreement, except to
the extent preempted by federal law and except to the extent that Texas
corporate law conflicts with the contract law of such state, in which event
Texas corporate law shall govern. The obligation of the Corporation to sell and
deliver Stock hereunder is subject to applicable laws and to the approval of any
governmental authority required in connection with the authorization, issuance,
sale, or delivery of such Stock.
10.19. Word Usage. Words used in the masculine shall apply to the feminine
where applicable, and wherever the context of this Plan dictates, the plural
shall be read as the singular and the singular as the plural.
IN WITNESS WHEREOF, Prime Medical Services, Inc., acting by and through
its officer hereunto duly authorized, has executed this Plan on this the 12th
day of October, 1993.
PRIME MEDICAL SERVICES, INC.
By:/s/ Kenneth S. Shifrin
-------------------------
Kenneth S. Shifrin
Chairman of the Board and Director
