<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 17, 1998
REGISTRATION NO. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
NORTHSTAR HEALTH SERVICES, INC.
-------------------------------
(Exact name of registrant as specified in its charter)
Delaware 25-1697152
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
665 Philadelphia Street
Indiana, Pennsylvania 15701
--------------------- -----
(Address of Principal Executive Offices) (Zip Code)
-------------------
NORTHSTAR HEALTH SERVICES, INC.
1997 STOCK OPTION PLAN
(Full title of plan)
--------------------
Thomas W. Zaucha, Chairman of the Board, President and CEO
Northstar Health Services, Inc.
665 Philadelphia Street
Indiana, Pennsylvania 15701
---------------------------
(Name and address of agent for service)
(724) 465-3200
--------------
(Telephone number, including area code,
of agent for service)
Copy to:
Robin M. Wilder, Esquire
Duane, Morris & Heckscher LLP
305 North Front Street, Fifth Floor
P.O. Box 1003
Harrisburg, Pennsylvania 17108-1003
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================
Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered registered(1) price per share(2) offering price(2) registration fee
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,000,000 shares $0.703 $703,000 $207.39
par value $.01
====================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the 1997 Stock Option Plan.
(2) Estimated solely for the purpose of calculating the registration fee based
on the average high and low prices of the Common Stock of the Company on
June 15, 1998.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
The documents containing the information in Part I of this Registration
Statement will be sent or given to employees as specified by Rule 428(b)(1)
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
Such documents are not required to be and are not filed with the Securities and
Exchange Commission (the "Commission") either as a part of this Registration
Statement or as prospectus supplements pursuant to Rule 424 promulgated under
the Securities Act. These documents and the documents incorporated by reference
in this Registration Statement pursuant to Item 3 of Part II of this Form S-8,
taken together, constitute a prospectus that meets the requirements of Section
10(a) of the Securities Act.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Upon written request, any documents incorporated herein by reference in
Item 3 of Part II of this Registration Statement (which documents are
incorporated by reference in this Section 10(a) Prospectus) other documents
required to be delivered to eligible employees pursuant to Rule 428(b)
promulgated under the Securities Act or additional information about Northstar
Health Services, Inc. 1997 Stock Option Plan and its administrators are
available without charge by contacting:
Investor Relations Department
Northstar Health Services, Inc.
665 Philadelphia Street, P.O. Box 1289
Indiana, PA 15701
(724) 349-7500
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<PAGE> 3
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following material is incorporated herein by reference:
(a) The Annual Report on Form 10-K of Northstar Health Services, Inc.
(the "Company") for the year ended December 31, 1997 as filed by the Company
with the Commission.
(b) The Company's Form 10-Q Report for the quarter ended March 31,
1998 as filed by the Company with the Commission.
(c) The description of the Company's Common Stock set forth in the
Company's Registration Statement on Form 8-A filed with the Commission under the
Securities Act of 1933, as amended, on June 3, 1993 and the Registration
Statement on Form S-3 filed with the Commission under the Securities Act of
1933, as amended, on December 15, 1995.
All reports or other documents filed pursuant to Sections 13, 14 and
15(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange
Act") subsequent to the date of this Registration Statement, in each case filed
by the Company prior to the termination of the offering of the securities
offered hereby, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
reports and documents. Any statement contained in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for the 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 herein by reference, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 2. DESCRIPTION OF SECURITIES.
No answer to this item is required because the class of securities to
be offered is registered under Section 12 of the Exchange Act.
ITEM 3. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The consolidated financial statements and schedules of the Company as
of December 31, 1997 and 1996 and for each of the years in the three-year period
ended December 31, 1997 incorporated by reference in this registration statement
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said
II-3
<PAGE> 4
reports. Said reports contain a modification regarding the Company's ability to
continue as a going concern.
The validity of the issuance of the shares of Common Stock registered
hereby will be passed upon for the Company by Duane, Morris & Heckscher LLP,
Harrisburg, Pennsylvania.
ITEM 4. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person 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
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
In the case of an action or suit by or in the right of the corporation
to procure a judgment in its favor, Section 145 empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by reason of the fact
that he is or was acting in any of the capacities set forth above against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that indemnification is not permitted
in respect of any claim, issue or matter as to which such person is adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
deems proper.
Section 145 further provides: That a Delaware corporation is required
to indemnify a director, officer, employee or agent against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with any
action, suit or proceeding or in defense of any claim, issue or matter therein
as to which such person has been successful on the merits or otherwise; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; that
indemnification provided for by Section 145
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<PAGE> 5
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer against any liability asserted against him and incurred by
him in any such capacity or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such liability under
Section 145. A Delaware corporation may provide indemnification only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct. Such determination is to be made (i)
by the board of directors by a majority vote of a quorum consisting of directors
who were not party to such action, suit or proceeding, or (ii) if such a quorum
is not obtainable, or, even if obtainable, a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion or (iii) by the
stockholders.
Article VII of the Company's amended By-laws provides for
indemnification of directors and officers of the Company to the fullest extent
permitted by the General Corporation Law of the State of Delaware, as presently
or hereafter in effect.
The Company maintains professional malpractice liability insurance up
to $7,000,000 in the aggregate on all of its professional employees.
ITEM 5. EXEMPTION FROM REGISTRATION CLAIMED.
No answer to this item is required because no restricted securities are
to be reoffered or resold pursuant to this Registration Statement.
ITEM 6. EXHIBITS.
(4) Northstar Health Services, Inc. 1997 Stock Option Plan
(5) Opinion of Duane, Morris & Heckscher LLP
(23)(A) Consent of Duane, Morris & Heckscher LLP (included in their opinion
filed as Exhibit 5)
(23)(B) Consent of Arthur Andersen LLP
(24) Power of Attorney (see page II-7 of this Registration Statement)
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<PAGE> 6
ITEM 7. UNDERTAKINGS.
The registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(b) that for purposes of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offer thereof; and
(c) 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 further undertakes that, for purposes
of determining any liability under the Act, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby further undertakes that, insofar as
indemnification for liabilities arising under the Act may be permitted to
directors, officers and controlling persons of the registrant, 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.
II-6
<PAGE> 7
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 Indiana, Pennsylvania on June 11, 1998.
NORTHSTAR HEALTH SERVICES, INC.
By: /s/ Thomas W. Zaucha
------------------------------------------
Thomas W. Zaucha, Chairman of the
Board, Director, President and CEO
(Principal Executive Officer)
Know all men by these presents, that each person whose signature
appears below constitutes and appoints Thomas W. Zaucha and Lisa S. Guarino, and
each or either of them, as such person's true and lawful attorneys-in-fact and
agents, with full power of substitution, for such person, and in such person's
name, place and stead, in any and all capacities to sign any or all amendments
or post-effective amendments to this Registration Statement, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them or their substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- - --------- ----- ----
<S> <C> <C>
/s/ Thomas W. Zaucha Chairman of the Board, June 11, 1998
- - ---------------------------------- Director, President, and Chief
Thomas W. Zaucha Executive Officer
(Principal Executive Officer)
/s/ Lisa S. Guarino Executive Vice President, Chief Financial June 11, 1998
- - ---------------------------------- Officer, and Treasurer
Lisa S. Guarino (Principal Accounting and
Financial Officer)
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
Signature Title Date
- - --------- ----- ----
<S> <C> <C>
/s/ Lawrence F. Jindra
- - ----------------------------------
Lawrence F. Jindra Director June 11, 1998
/s/ James H. McElwain Director June 11, 1998
- - ----------------------------------
James H. McElwain
/s/ Mark G. Mykityshyn Director June 11, 1998
- - ----------------------------------
Mark G. Mykityshyn
/s/ Roger J. Reschini Director June 11, 1998
- - ----------------------------------
Roger J. Reschini
/s/ David B. White Director June 15, 1998
- - ----------------------------------
David B. White
</TABLE>
II-8
<PAGE> 9
EXHIBIT INDEX
(PURSUANT TO ITEM 601 OF REGULATION S-K)
EXHIBIT NO. EXHIBIT
(4) Northstar Health Services, Inc. 1997 Stock Option Plan.
(5) Opinion of Duane, Morris & Heckscher LLP.
(23)(A) Consent of Duane, Morris & Heckscher LLP (included in their
opinion filed as Exhibit 5).
(23)(B) Consent of Arthur Andersen LLP.
(24) Power of Attorney (see page II-7 of this Registration Statement).
<PAGE> 1
Exhibit(4)
NORTHSTAR HEALTH SERVICES, INC.
1997 STOCK OPTION PLAN
ARTICLE I
Purpose
-------
This 1997 Stock Option Plan (the "Plan") is intended as an incentive
and to encourage stock ownership by officers, consultants, directors and certain
other key employees of Northstar Health Services, Inc. (the "Company") and its
subsidiaries in order to increase their proprietary interest in the Company's
success and to encourage them to remain in the employ or service of the Company.
The word "Company", when used in the Plan with reference to employment
or service, shall include subsidiaries of the Company. The word "subsidiary",
when used in the Plan, shall mean any subsidiary of the Company within the
meaning of Section 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code"). The term "incentive stock options" when used in the Plan shall mean
incentive stock options within the meaning of Section 422 of the Code.
ARTICLE II
Administration
--------------
The plan shall be administered by a Committee appointed by the Board of
Directors (the "Board"), each member of which shall consist of at least two or
more persons who are (i) "non-employee directors," as defined in Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
any successor rule or regulation, and (ii) an "outside directors" within the
meaning of Section 162(m) of the Code (hereinafter referred to as the
"Committee"). Subject to the provisions of the Plan, the Committee shall have
sole authority, in its absolute discretion: (a) to determine which of the
eligible employees or consultants of the Company and its subsidiaries shall be
granted options; (b) to authorize the granting of both incentive stock options
and non-qualified stock options; (c) to authorize the grant of non-qualified
stock options to directors of the Board who are not employees of the Company
pursuant to a formula award determined by the Committee; (d) to determine the
times when options shall be granted and the number of shares to be optioned; (e)
to determine the option price of the shares subject to each option, which price
shall be not less than the minimum specified in ARTICLE V; (f) to determine the
time or times when each option becomes exercisable, the duration of the exercise
period and any other restrictions on the exercise of options issued hereunder;
(g) to accelerate the exercisability of any outstanding options; (h) to
prescribe the form or forms of the option agreements under the Plan (which forms
shall be consistent with the terms of the Plan but need not be identical); (i)
to adopt, amend and rescind such rules and regulations as, in its opinion, may
be advisable in the administration of the Plan; and (j) to construe and
interpret the Plan, the
<PAGE> 2
rules and regulations and the option agreements under the Plan and to make all
other determinations deemed necessary or advisable for the administration of the
Plan. All decisions, determinations and interpretations of the Committee shall
be final and binding on all optionees.
ARTICLE III
Stock
-----
The stock to be optioned under the Plan shall be shares of authorized
but unissued Common Stock of the Company, $.01 par value, or previously issued
shares of Common Stock reacquired by the Company (the "Stock"). Under the Plan,
the total number of shares of Stock which may be purchased pursuant to options
granted hereunder shall not exceed, in the aggregate, 1,000,000 shares, except
as such number of shares shall be adjusted in accordance with the provisions of
ARTICLE X hereof. The maximum number of shares of Stock with respect to which
options may be granted to any single optionee during any calendar year shall not
exceed 100,000, except as such number of shares shall be adjusted in accordance
with the provisions of ARTICLE X.
The number of shares of Stock available for grant of options under the
Plan shall be decreased by the sum of the number of shares with respect to which
options have been issued and are then outstanding and the number of shares
issued upon exercise of options. In the event that any outstanding option under
the Plan for any reason expires, is terminated, or is canceled prior to the end
of the period during which options may be granted, the shares of Stock called
for by the unexercised portion of such option may again be subject to an option
under the Plan.
ARTICLE IV
Eligibility of Participants
---------------------------
Subject to ARTICLE VII, officers and other key employees of the Company
or of its subsidiaries shall be eligible to receive options under the Plan. In
addition, options which are not incentive stock options may be granted to
directors, consultants, or other key persons who the Committee determines shall
receive options under the Plan.
ARTICLE V
Option Price
------------
In the case of each incentive stock option granted under the Plan, the
option price shall be not less than the fair market value of the Stock at the
time the incentive stock option was granted. In the case of options other than
incentive stock options, the option price shall not be less than 85% of the fair
market value of the stock at the time the option was granted. The fair market
value shall be deemed for all purposes of the Plan to be the mean between the
highest and lowest sale prices reported as having occurred on any exchange with
which the Company's Stock may be listed and traded on the date the option is
granted, or, if there is no such sale on that date, then
<PAGE> 3
on the last preceding date on which such a sale was reported. If the Company's
Stock is not listed on any exchange but the Stock is quoted in the National
Market System of the National Association of Securities Dealers Automated
Quotation System on a last sale basis then the fair market value of the Stock
shall be deemed to be the mean between the high and low price reported on the
date the option is granted, or, if there is no such sale on that date, then on
the last preceding date on which a sale was reported. If the Stock is not quoted
in the National Market System of the National Association of Securities Dealers
Automated Quotation System on a last sale basis, then the fair market value of
the Stock shall mean the amount determined by the Committee to be the fair
market value based upon a good faith attempt to value the Stock accurately and
computed in accordance with applicable regulations of the Internal Revenue
Service. In no event shall the option price be less than the par value per share
of Stock on the date an option is granted.
ARTICLE VI
Exercise and Terms of Options
-----------------------------
The Committee shall determine the dates after which options may be
exercised, in whole or in part. If an option is exercisable in installments,
installments or portions thereof which are exercisable and not exercised shall
remain exercisable.
Any other provision of the Plan to the contrary notwithstanding and
subject to ARTICLE VII, no option shall be exercised after the date ten years
from the date of grant of such option (the "Termination Date").
Except as otherwise provided by the Committee at the time an option is
granted or by any amendment to an outstanding option:
(i) If prior to the Termination Date, an optionee shall cease to
be employed by or in the service or the Company or any
subsidiary thereof by reason of a disability within the
meaning of Section 22(e)(3) of the Code, the option may remain
exercisable for a period not extending beyond one year after
the date of cessation of employment or service to the extent
it was exercisable at the time of cessation of employment of
service.
(ii) In the event of the death of an optionee prior to the
Termination Date and while employed by or in the service of
the Company or a subsidiary thereof or while entitled to
exercise an option pursuant to the preceding paragraph, the
optionee's options may remain exercisable at any time prior to
the Termination Date but in no event later than one year from
the date of death, by the person or person to whom the
optionee's rights under the option pass by will or the
applicable laws of descent and distribution to the extent that
the optionee was entitled to exercise it on the date of death.
<PAGE> 4
(iii) If an optionee voluntarily terminates employment or service
with the Company for reasons other than death, disability, or
retirement on or after the normal retirement age set forth in
the Company's policies (a "Voluntary Termination"), or if an
optionee's employment or service with the Company is
terminated for Cause, as hereinafter defined, unless otherwise
provided by the Committee, all options previously granted to
such optionee which have not been exercised prior to such
termination shall lapse and be canceled. If at the time of a
Voluntary Termination the Company was entitled to terminate
the optionee's employment or service for Cause, as hereinafter
defined, all shares of Stock received pursuant to options
exercised after the Company was so entitled shall be purchased
by the Company for the exercise price of such shares paid by
the optionee. If the Company terminates an optionee's
employment or service without Cause, as hereinafter defined,
unless otherwise provided by the Committee, all options
previously granted to such optionee which were exercisable
immediately prior to such termination shall continue to be
exercisable for period not extending beyond three months after
the date of such termination.
For purposes of the Plan, the Company shall have "Cause" to
terminate an optionee's employment or service if the Company has cause
to terminate the optionee's employment or service under any existing
employment agreement between the optionee and the Company or, in the
absence of an employment agreement between the optionee and the
Company, upon (A) the determination by the Board that the optionee has
ceased to perform his duties to the Company (other than as a result of
his incapacity due to physical or mental illness or injury), which
failure amounts to an intentional and extended neglect of his duties to
the Company, (B) the Board's determination that the optionee has
engaged or is about to engage in conduct materially injurious to the
Company, or (C) the optionee having been convicted of a felony.
ARTICLE VII
Special Provisions Applicable to Incentive Stock Options Only
-------------------------------------------------------------
The aggregate fair market value (determined as of the time the
option is granted) of the Stock with respect to which any incentive
stock options may be exercisable for the first time by the optionee in
any calendar year (under this Plan or any other stock option plan of
the Company or any parent or subsidiary thereof) shall not exceed
$100,000. To the extent that such aggregate fair market value exceeds
$100,000 such options or portions thereof shall be non-qualified stock
options.
No incentive stock option may be granted to an individual who,
at the time the option is granted, owns directly, or indirectly within
the meaning of Section 424(d) of the Code, stock possessing more than
10 percent of the total combined voting power of all classes of stock
of the Company or of any parent or subsidiary thereof, unless such
option (i) has an option price of at least 110 percent of the fair
market value of the Stock on the date of the grant of such option; and
(ii) such option cannot be exercised more than five years after the
date it is granted.
<PAGE> 5
ARTICLE VIII
Payment for Shares
------------------
Payment for shares of Stock purchased under an option granted
hereunder shall be made in full upon exercise of the option, by cash,
by certified or bank cashier's check payable to the order of the
Company, or by any other means acceptable to the Company and designated
by the Committee. The Stock purchased shall thereupon be promptly
delivered; provided, however, that the Company may, in its discretion,
require that an optionee pay to the Company, at the time of exercise,
such amount as the Company deems necessary to satisfy its obligation to
withhold Federal, state or local income or other taxes incurred by
reason of the exercise or the transfer of shares thereupon.
ARTICLE IX
Non-Transferability of Option Rights
------------------------------------
Except as otherwise determined by the Committee with respect
to the grant of options, no option shall be transferable except by will
or the laws of descent and distribution. During the lifetime of the
optionee, the option shall be exercisable only by him or his guardian
or legal representative.
ARTICLE X
Adjustment for Recapitalization, Merger, Etc.
---------------------------------------------
The aggregate number of shares of Stock which may be issued
pursuant to options granted hereunder, the maximum number of shares of
Stock which may be granted to any single optionee during any calendar
year, the number of shares of Stock covered by each outstanding option
and the price per share thereof in each such option shall be
appropriately adjusted for any increase or decrease in the number of
outstanding shares of Stock resulting from a Stock split or other
subdivision or consolidation of shares of Stock or for other capital
adjustments or payments of Stock dividends or distributions or other
increases or decreases in the outstanding shares of Stock without
receipt of consideration by the Company.
In the event of any change in the outstanding shares of Stock
by reason of any recapitalization, merger, consolidation, spin-off,
combination or exchange of shares or other corporate change, or any
distributions to common shareholders other than cash dividends, the
Committee shall make such substitution or adjustment, if any, as it
deems to be equitable, as to the number or kind of shares of Stock or
other securities issued or reserved for issuance pursuant to the Plan,
and the number or kind of shares of Stock or
<PAGE> 6
other securities covered by outstanding options, and the option price
thereof. In instances where another corporation or other business
entity is being acquired by the Company, and the Company has assumed
outstanding employee option grants and/or the obligation to make future
or potential grants under a prior existing plan of the acquired entity,
similar adjustments are permitted at the discretion of the Committee.
The Committee shall notify optionees of any intended sale of all or
substantially all of the Company's assets within a reasonable time
prior to such sale.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to an option.
ARTICLE XI
Change in Control
-----------------
Except to the extent stated otherwise in any individual option
agreement, upon the occurrence of a Change in Control all outstanding
options shall become immediately exercisable in full. For purposes of
the foregoing, a "Change in Control" shall, unless in the case of a
particular option, the applicable option agreement states otherwise, be
deemed to occur if:
(i) the Company enters into any agreement to engage in a
transaction, the consummation of which would result in
any "person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") (other than (A) the Company, (B) any
Subsidiary or (C) any trustee or other fiduciary
holding securities under an employee benefit plan of
the Company or any Subsidiary) becoming the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the
Company representing forty percent (40%) or more of the
combined voting power of the Company's then outstanding
securities, provided that such transaction actually
does occur;
(ii) individuals who constitute the Board, and any new
director (other than a director designated by a person
who has entered into an agreement with the Company to
effect a transaction described in clause (i), (iii) or
(iv) of this Article XI) whose election by the Board or
nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were
directors at the beginning of the period or whose
election or nomination for election was previously so
approved (unless the approval of the election or
nomination for election of such new directors was in
connection with an actual or threatened election or
proxy contest), cease for any reason to constitute at
least a majority thereof;
<PAGE> 7
(iii) the Company enters into any agreement to engage in a
transaction, the consummation of which would result in,
or the stockholders of the Company approve, a merger or
consolidation of the Company with any other
corporation, and such merger or consolidation actually
does occur other than (a) a merger or consolidation
which would result in the voting securities of the
Company outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by converted into voting securities of
the surviving entity) more than fifty percent (50%) of
the combined voting power of the voting securities of
the Company or such surviving entity outstanding
immediately after such merger or consolidation or (b) a
merger or consolidation effected to implement a
recapitalization of the Company (or similar
transaction) in which no "person" (as defined above in
(i), including the exemptions thereto) acquires forty
percent (40%) or more of the combined voting power of
the Company's than outstanding securities; or
(iv) the Company enters into any agreement to engage in a
transaction, the consummation of which would result in,
or the stockholders of the Company approve, a complete
liquidation of the Company or the sale or disposition
by the Company of all or substantially all of the
Company's assets of any transaction having a similar
effect, provided that such liquidation, sale or
disposition actually does occur.
ARTICLE XII
No Obligation to Exercise Option
--------------------------------
Granting of an option shall impose no obligation on the recipient to
exercise such option.
ARTICLE XIII
Use of Proceeds
---------------
The proceeds received from the sale of Stock pursuant to the Plan shall
be used for general corporate purposes.
ARTICLE XIV
Rights as a Stockholder
-----------------------
An optionee or a transferee of an option shall have no rights as a
stockholder with respect to any share covered by his option until he shall have
become the holder of record of such share, and he shall not be entitled to any
dividends or distributions or other rights in respect of such share for which
the record date is prior to the date on which he shall have become the holder of
record thereof.
<PAGE> 8
ARTICLE XV
Employment or Service Rights
----------------------------
Nothing in the Plan or in any option granted hereunder shall confer on
any optionee any right to continue in the employ or service of the Company or
any of its subsidiaries, or to interfere in any way with the right of the
Company or any of its subsidiaries to terminate the optionee's employment or
service at any time.
ARTICLE XVI
Compliance with the Law
-----------------------
The Company is relieved from any liability for the non-issuance or
non-transfer or any delay in issuance or transfer of any shares of Stock subject
to options under the Plan which results from the inability of the Company to
obtain or in any delay in obtaining from any regulatory body having jurisdiction
all requisite authority to issue or transfer shares of Stock of the Company
either upon exercise of the options under the Plan or shares of Stock issued as
a result of such exercise if counsel for the Company deems such authority
necessary for lawful issuance or transfer of any such shares. Appropriate
legends may be placed on the Stock certificates evidencing shares issued upon
exercise of options to reflect such transfer restrictions.
ARTICLE XVII
Cancellation of Options
-----------------------
The Committee, in its discretion, may, with the consent of any
optionee, cancel any outstanding option hereunder.
ARTICLE XVIII
Expiration Date of Plan
-----------------------
No option shall be granted hereunder after September 11, 2007.
ARTICLE XIX
Amendment or Discontinuance of Plan
-----------------------------------
The Board may, without the consent of the Company's stockholders or
optionees under the Plan, at any time terminate the Plan entirely and at any
time or from time to time amend or modify the Plan, provided that no such action
shall adversely affect options theretofore granted hereunder without the
optionee's consent, and provided further that no such action by the Board,
without approval of the stockholders, may (a) increase the total number of
shares of Stock which may be purchased pursuant to options granted under the
Plan, except as contemplated in ARTICLE X or (b) decrease the minimum option
price.
<PAGE> 1
Exhibit(5)
[Letterhead of DUANE, MORRIS & HECKSCHER LLP]
June 17, 1998
Via FACSMILE and
CERTIFIED LETTER
The Board of Directors of
Northstar Health Services, Inc.
665 Philadelphia Street
Indiana, PA 15701
Gentlemen:
We have acted as counsel to Northstar Health Services, Inc. (the
"Company") in connection with the preparation and filing with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, of a
registration statement on Form S-8 (the "Registration Statement") relating to
the offer and sale by the Company of up to 1,000,000 shares (the "Shares") of
Common Stock, $.01 par value, of the Company, pursuant to the Company's 1997
Stock Option Plan (the "Plan").
As counsel to the Company, we have supervised all corporate proceedings
in connection with the preparation and filing of the Registration Statement. We
have also examined the Company's Certificate of Incorporation and By-laws, as
amended to date, the corporate minutes and other proceedings and the records
relating to the authorization, sale and issuance of the Shares, and such other
documents and matters of law as we have deemed necessary or appropriate in order
to render this opinion.
Based upon the foregoing, it is our opinion that each of the Shares,
when issued in accordance with the terms and conditions of the Plan, will be
duly authorized, legally and validly issued and outstanding, fully paid and
nonassessable.
We hereby consent to the use of this opinion in the Registration
Statement.
Sincerely,
DUANE, MORRIS & HECKSCHER, LLP
By: /s/ SCOTT C. PENWELL
------------------------------
SCP:slr A Partner
<PAGE> 1
EXHIBIT(23)(B)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated March 23, 1998,
included in Northstar Health Services, Inc.'s Form 10-K for the year ended
December 31, 1997 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
June 16, 1998
