As filed with the Securities and Exchange Commission on March 12, 1999
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
PHC, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2601571
(State or other jurisdiction of incorporation or
organization) (I.R.S. employer
identification no.)
200 Lake Street, Suite 102, Peabody, MA 01960
(Address of principal executive offices) (Zip Code)
1993 Stock Purchase and Option Plan
1995 Employee Stock Purchase Plan
1995 Non-Employee Director Stock Option Plan
(Full title of the plans)
Bruce A. Shear, President and Chief Executive Officer
PHC, Inc.
200 Lake Street, Suite 102
Peabody, MA 01960
(Name and address of agent for service)
(978) 536-2777
(Telephone number, including area code, of agent for service)
Copy to:
Arnold R. Westerman, Esq.
Arent Fox Kintner Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, DC 20036-5339
CALCULATION OF REGISTRATION FEE
Proposed Proposed Amount of
Title of Amount maximum maximum registration
securities to to be offering aggregate fee
be registered registered price per offering
(1) share (2) price (2)
Class A Common
Stock, $.01 par
value 770,000 shares $1.1875 $914,375 $277.08
(1) Plus such additional number of shares as may be required pursuant to the
plans in the event of a stock dividend, split-up of shares,
recapitalization or other similar change in the Common Stock. This
registration statement constitutes the latest registration statement of a
combined prospectus pursuant to rule 429 of the Securities Act of 1933. Of
the total number of shares, 1,200,000, related to these stock purchase and
option plans 430,000 shares were registered in Registration #333-1458
effective February 16, 1996. The total registration fee paid with the
February 16, 1996 filing was $1,205.48.
(2) Estimated solely for the purpose of calculating the registration fee, in
accordance with Rule 457(c) and (h)(1), on the basis of the average of the
bid and asked price of the Class A Common Stock as reported on the Nasdaq
SmallCap Market on February 24, 1999.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
* Information about the Registrant required by Part I to be contained in a
Section 10(a) prospectus is omitted from the Registration Statement in
accordance with Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"), and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents previously filed by the Registrant with the
Securities and Exchange Commission (the "Commission") are incorporated by
reference in this Registration Statement:
1. The Registrant's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1998.
2. All reports filed pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") since June 30, 1998;
and
3. The description of the Registrant's Class A Common Stock incorporated by
reference into the Company's registration statement on Form 8-A filed with
the Securities and Exchange Commission (the "Commission") on March 2, 1994,
from the Company's registration statement on Form SB-2 (SEC File No.
33-71418), initially filed with the Commission on November 9, 1993.
In addition, all documents filed by the Registrant after the initial filing
date of this registration statement pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, and prior to the filing of a post-effective amendment
which indicates that all shares registered hereunder have been sold or which
deregisters all shares 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.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Officers and Directors
Section 6 of the Company's Restated Articles of Organization provides, in
part, that the Company shall indemnify its directors, trustees, officers,
employees and agents against all liabilities, costs and expenses, including but
not limited to amounts paid in satisfaction of judgments, in settlement or as
fines and penalties, and counsel fees, reasonably incurred by such person in
connection with the defense or disposition of or otherwise in connection with or
resulting from any action, suit or proceeding in which such director or officer
may be involved or with which he may be threatened, while in office or
thereafter, by reason of his actions or omissions in connection with services
rendered directly or indirectly to the Company during his term of office, such
indemnification to include prompt payment of expenses in advance of the final
disposition of any such action, suit or proceeding.
In addition, the Restated Articles of Organization of the Company, under
authority of the Business Corporation Law of The Commonwealth of Massachusetts,
contain a provision eliminating the personal liability of a director to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, or (iii) for any transaction from which the director derived an improper
personal benefit. The foregoing provision also is inapplicable to situations
where a director has voted for, or assented to the declaration of, a dividend,
repurchase of shares, distribution or the making of a loan to an officer or
director, in each case where the same occurs in violation of applicable law.
The Underwriting Agreement by and between the Company and Americorp
Securities, Inc. (the "Underwriter"), dated March 3, 1994, provides that the
Underwriter is obligated, under certain circumstances, to indemnify directors,
officers and controlling persons of the Company against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the "Act").
Item 7. Exemption from Registration Claimed. Not applicable.
Item 8. Exhibits.
4.1 The Company's 1993 Stock Purchase and Option Plan, as amended.
4.2 The Company's 1995 Employee Stock Purchase Plan, as amended.
4.3 The Company's 1995 Non-Employee Director Stock Option Plan, as
amended.
5.1 Opinion of Arent Fox Kintner Plotkin & Kahn (counsel)
23.1 Consent of BDO Siedman, LLP (independent auditors)
23.2 Consent of Richard A. Eisner, LLP (independent auditors)
23.3 Consent of Arent Fox Kintner Plotkin & Kahn (counsel) included
in exhibit 5.1
24.1 Power of Attorney: included on signature page
Item 9. Undertakings
(a) The Registrant hereby undertakes:
(1) to file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to such information in the registration statement;
(2) that, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the 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 Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the company
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 Town of Peabody, The Commonwealth of Massachusetts on the
12th day of March, 1999.
PHC, Inc.
By: /s/ Bruce A. Shear
President & Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Bruce A. Shear, his true and lawful
attorney-in-fact and agent with full power of substitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on March 12, 1999 by the following
persons in the capacities indicated.
PHC, INC.
By: /s/ Bruce A. Shear
President and Chief Executive Officer
Signature Title Date
By: /s/ Bruce A. Shear President and Chief March 12, 1999
Executive
Officer and Director
(principal
executive officer)
By: /s/ Paula C. Wurts Controller, Assistant March 12, 1999
Treasurer
and Assistant Clerk
(principal
accounting and
financial officer)
By: /s/ Gerald M. Perlow Clerk and Director March 12, 1999
By: /s/ Donald E. Robar Treasurer and Director March 12, 1999
By: /s/ Howard W. Phillips Director March 12, 1999
By: /s/ William F. Grieco Director March 12, 1999
<PAGE>
EXPLANATORY NOTE
This Registration Statement has been prepared in accordance with the
requirements of Form S-8, as amended, and relates to 770,000 shares of Class A
Common Stock, $.0l par value, of PHC, Inc. (the "Company") that have been issued
or reserved for issuance under the Company's 1993 Stock Purchase and Option
Plan, 1995 Employee Stock Purchase Plan and 1995 Non-Employee Director Stock
Option Plan.
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
4.1 The Company's 1993 Stock Purchase and Option Plan, as amended.
4.2 The Company's 1995 Employee Stock Purchase Plan, as amended.
4.3 The Company's 1995 Non-Employee Director Stock Option Plan, as amended.
5.1 Opinion of Arent Fox Kintner Plotkin & Kahn (counsel)
23.1 Consent of BDO Siedman, LLP (independent auditors)
23.2 Consent of Richard A. Eisner, LLP (independent auditors)
23.3 Consent of Arent Fox Kintner Plotkin & Kahn (counsel) included in
exhibit 5.1
24.1 Power of Attorney: included on signature page
<PAGE>
Exhibit 5.1
Arent Fox
1050 Connecticut Avenue, NW
Washington, DC 20036-5339
Arnold R. Westerman
Tel: 202/857-6243
Fax: 202/857-6395
[email protected]
http://www.arentfox.com
March 3, 1999
PHC, Inc.
200 Lake Street
Suite 102
Peabody, Massachusetts 01960
Gentlemen:
We have acted as counsel for PHC, Inc., a Massachusetts corporation
("PHC"), with respect to the Company's Registration Statement on Form S-8, filed
by the Company with the Securities and Exchange Commission (the "Commission") in
connection with the registration under the Securities Act of 1933 as amended, of
(i) 1,000,000 shares of Class A Common Stock, $.01 par value, subject to the
PHC, Inc. 1993 Stock Purchase and Option Plan (the "1993 Option Plan"), (ii)
150,000 shares of Class A Common Stock, $.01 par value, subject to the PHC, Inc.
1995 Employee Stock Purchase Plan, (the "1995 Purchase Plan") and (iii) 50,000
shares of Class A Common Stock, $.01 par value, subject to the PHC, Inc. 1995
Non-Employee Director Stock Option Plan, (the "1995 Director Plan").
On the basis of such investigation as we have deemed necessary, we are of
the opinion that the shares of PHC Class A Common Stock to be sold by the
Company under it's 1993 Option Plan, 1995 Purchase Plan and 1995 Director Plan
will be validly issued, fully paid and nonassessable when issued in accordance
with the transactions described in the Registration Statement and as specified
therein.
We hereby consent to the filing of this opinion as an exhibit to such
Registration Statement and to the reference to our firm under the heading "Legal
Matters." In giving this consent, we do not hereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended.
Very truly yours,
/s/ ARENT FOX KINTNER PLOTKIN & KAHN
Arent Fox Kintner Plotkin & Kahn
New York, NY - McLean, VA - Bethesda, MD - Budapest, Hungary -
Jeddah, Kingdom of Saudi Arabia
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of PHC, Inc. (the "Company") of our report dated September 18, 1998
on the consolidated financial statements of the Company for the year ended June
30, 1998 appearing in the Company's Annual Report on Form 10-KSB for the year
ended June 30, 1998.
BDO Siedman, LLP
Boston, Massachusetts
March 5, 1999
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of PHC, Inc. (the "Company") of our report dated September
19, 1997 on the consolidated financial statements of the Company for the year
ended June 30, 1997 appearing in the Company's Annual Report on Form 10-KSB for
the year ended June 30, 1998.
Richard A. Eisner, LLP
New York, NY
March 5, 1999
<PAGE>
Exhibit 4.1
1993 STOCK PURCHASE AND OPTION PLAN
1. Purpose
The purpose of this PHC, Inc. 1993 Stock Purchase and Option Plan (the
"Plan") is to provide for (i) the grant of incentive stock options, as defined
in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), to
certain key employees of PHC, Inc. (the "Company") and its subsidiaries, (ii)
the grant of non-qualified stock options to certain employees (including leased
employees), directors, consultants and others whose efforts are important to the
success of the Company and its subsidiaries, and (iii) direct purchases of
restricted stock in the Company ("Restricted Stock") by certain employees
(including leased employees), directors, and consultants of the Company and its
subsidiaries. As used in this Plan, the term "subsidiary" shall mean a
subsidiary corporation as defined in Section 424(f) of the Code. All incentive
stock options and non-qualified stock options which may be granted under this
Plan are hereinafter referred to as "Options."
2. Administration of Plan.
This Plan shall be administered by the Board of Directors of the Company
(the "Board"). The Board shall have the right, in its discretion, to delegate
any and all of its powers hereunder to a Compensation Committee (the
"Committee") of two or more of its members. In the event the Company registers
any class of any equity security pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), each member of the
Committee shall be a "disinterested person" as defined in Rule 16b-3 under the
Exchange Act. Subject to the terms of the Plan, the Committee, if so appointed,
shall have authority to interpret the Plan, to prescribe and rescind rules and
regulations relating to it, and to make all other determinations necessary or
advisable for its administration. In the event that the Board delegates its
powers to a Committee to administer the Plan in whole or in part, the
Committee's determinations with respect thereto shall not be subject to approval
by the Board, and to the extent of such delegation, reference in this Plan to
the Board shall be deemed to refer to the Committee.
3. Shares Covered by Plan.
The stock subject to Options and Restricted Stock shall be authorized but
unissued shares of Class A Common Stock, $.01 par value per share ("Common
Stock"), of the Company, or shares of Common Stock re-acquired by the Company in
any manner. The Options and Restricted Stock which may be issued hereunder shall
assume the effectiveness of a reverse stock split and the restatement of the
Company's Articles of Organization, which is expected to occur in the last
calendar quarter of 1993, and no further adjustment in the number of shares of
Restricted Stock or Options to be issued hereunder shall be made as the result
of such reverse stock split or restatement. The aggregate number of shares which
may be issued pursuant to the Plan is 300,000, subject to adjustment as provided
in Section 11. Any such shares may be issued as incentive stock options,
non-qualified stock options or Restricted Stock as long as the aggregate number
of shares so issued does not exceed such number, as adjusted. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, the shares subject to such expired or terminated Option shall again
be available for grants of Options or Restricted Stock under the Plan.
4. Eligibility.
All employees, directors, consultants and others whose efforts are
important to the success of the Company shall be eligible to receive Options and
Restricted Stock under this Plan; provided, that incentive stock options may be
granted only to employees of the Company or its subsidiaries.
5. Allotment of Options and Number of Shares.
The allotment of Options among the eligible grantees, the number of shares
to be covered by each Option to be granted, and the designation of Options as
either incentive stock options or non-qualified stock options shall be
determined by the Board.
6. Option Agreements; Terms of Options.
Each grantee to whom an Option is granted (an "Optionee") shall enter into
a written agreement with the Company setting forth the terms and conditions of
the Option granted to him, which agreement may contain such terms, conditions
and restrictions not inconsistent with the terms of the Plan as the Board shall
approve in each case.
7. Option Price.
The price to be paid by an Optionee who exercises an Option shall be
determined by the Board but in the case of incentive stock options, except in
the case of substituted options granted pursuant to Section 12, shall in no
event be less than the fair market value of the Common Stock on the date such
Option is granted.
8. Duration and Rate of Exercise of Options.
The option period shall be fixed by the Board but in any event each Option
shall by its terms be exercisable no later than the expiration of ten years from
the date such Option is granted.
The Board shall determine the rate at which each Option shall be
exercisable.
The Board shall determine the manner in which each Option shall be
exercisable and the timing and form of the purchase price to be paid by a
Optionee upon the exercise of an Option under the Plan. To the extent provided
in the option agreement, payment of the purchase price may be in cash, part in
cash and part by personal promissory note or in whole or in part by the
surrender of a whole number of shares of previously issued Common Stock of the
Company. Previously issued shares of Common Stock shall be accepted as payment
in an amount equal to the then fair market value of the surrendered shares.
9. Nontransferability of Options.
Each Option granted under the Plan to any person shall by its terms not be
transferable by him otherwise than by will or the laws of descent and
distribution, and shall be exercisable during his lifetime only by him.
10. Rights as a Stockholder.
An Optionee shall have no rights as a stockholder with respect to any
shares covered by his Options until he shall have become the holder of record of
such shares, and no adjustment shall be made, except adjustments pursuant to
Section 11 hereof, for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights in respect of
such shares for which the record date is prior to the date on which he shall
have become the holder of record thereof.
11. Effect of Change in Stock Subject to the Plan.
If there is any change in the shares of Common Stock of the Company through
the declaration of stock dividends or through recapitalizations resulting in
stock split-ups or combinations or exchanges of shares or otherwise, the number
of shares available for Options, the exercise price of outstanding Options, and
the number of shares subject to any Option shall be appropriately adjusted by
the Board, and in its discretion, in such cases, fractional parts of shares may
be disregarded.
If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation, or if
the Company is liquidated or sells or otherwise disposes of substantially all of
its assets to another corporation while unexercised Options remain outstanding,
(i) subject to the provisions of clauses (iii) and (iv) below, after the
effective date of such merger, consolidation or sale, as the case may be, each
holder of an outstanding Option shall be entitled, upon exercise of such Option,
to receive in lieu of shares of Common Stock, shares of such stock or other
securities as the holders of shares of Common Stock received pursuant to the
terms of the merger, consolidation or sale; or (ii) the Board may waive any
discretionary limitations imposed pursuant to Section 8 hereof so that all
Options from and after a date prior to the effective date of such merger,
consolidation, liquidation or sale, as the case may be, specified by the Board,
shall be exercisable in full; or (iii) all outstanding Options may be cancelled
by the Board as of the effective date of any such merger, consolidation,
liquidation or sale provided that notice of such cancellation shall be given to
each holder of an Option, and each holder of an Option shall have the right to
exercise such Option in full (without regard to any discretionary limitations
imposed pursuant to Section 8 hereof) during a 30-day period preceding the
effective date of such merger, consolidation or sale; or (iv) all outstanding
Options may be cancelled by the Board as of the date of any such merger,
consolidation, liquidation or sale provided that notice of such cancellation
shall be given to each holder of an Option, and each holder of an Option shall
have the right to exercise such Option but only to the extent exercisable in
accordance with any discretionary limitations imposed pursuant to Section 8
prior to the effective date of such merger, consolidation, liquidation or sale.
12. Grant of Options in Connection With Certain Acquisitions.
The Board may grant Options under the Plan in substitution for incentive
stock options or non-qualified stock options granted under plans of other
employers, if such grant occurs in connection with a corporate merger,
consolidation, separation, reorganization, or liquidation to which the Company
or any of its subsidiaries is a party, or by reason of the acquisition of
property or stock of another corporation by the Company or any of its
subsidiaries, provided that such transaction is a transaction to which Section
424(a) of the Code applies. The Board may impose such terms and conditions upon
the grant of any incentive stock option under this Section 12 as are necessary
to ensure that the substitution will qualify under Section 424(a) of the Code
and will not constitute a modification of the Option under Section 424(h) of the
Code, even though any such term or condition would otherwise be inconsistent
with the provisions of this Plan. Options granted under the provisions of this
Section 12 may be granted at a price less than the fair market value of the
Common Stock on the date such Option is granted, so long as the ratio of the
option price to the fair market value of the Common Stock is no more favorable
to the Optionee than the ratio of the option price to the fair market value of
the stock subject to the old option immediately before such substitution. Except
as otherwise specifically provided in the agreement setting forth the terms and
conditions of such an Option, the provisions of this Plan shall govern any
Options granted under this Section 12. Nothing in this Section 12 shall be
deemed to authorize the grant of Options under the Plan for a number of shares
in excess of the number set forth in Section 3, or to limit in any way the
authority of the Board to grant substituted options in connection with such
transactions other than under the Plan.
13. Restricted Stock.
Each grant of Restricted Stock under the Plan shall be evidenced by an
instrument (a "Restricted Stock Agreement") in such form as the Board shall
prescribe from time to time in accordance with the Plan and shall comply with
such other terms and conditions as the Board, in its discretion, shall
establish. The Board shall determine the number of shares of Common Stock to be
issued to an eligible grantee pursuant to the grant of Restricted Stock and the
extent to which payment of the purchase price may be made in cash, by personal
promissory note, by other consideration, or by a combination thereof. To the
extent payment of the purchase price is made by a personal promissory note,
payment of the promissory note shall be secured by and entitled to the benefits
of a first priority pledge of the shares of Restricted Stock to the extent that
payment for such Restricted Stock is evidenced by such promissory note.
14. Use of Proceeds.
The proceeds received by the Company from the sale of stock pursuant to the
Plan may be used for general corporate purposes.
15. Amendment and Discontinuance.
The Board may from time to time alter or suspend and at any time
discontinue the Plan. However, no action of the Board may, without the approval
of the stockholders, increase the maximum number of shares to be offered for
sale under the Plan in the aggregate (other than according to the terms of
Section 11 above), modify the provisions of Section 4 hereof regarding
eligibility, reduce the purchase price at which shares may be offered pursuant
to Options (other than according to the terms of Section 11), extend the
expiration date of the Plan or otherwise materially increase the benefits to
participants under the Plan; nor may any action of the Board or the stockholders
alter or impair the rights of an Optionee or purchaser of Restricted Stock under
any outstanding Option or share of Restricted Stock previously granted under the
Plan, without the consent of the holder of the Option or Restricted Stock.
16. Withholding of Additional Income Taxes.
The Company, in accordance with the Code, may, upon exercise of a
non-qualified stock option or the purchase of Common Stock for less than its
fair market value or the lapse of restrictions on Restricted Stock or the making
of a Disqualifying Disposition (as defined in Section 17 below) require the
employee to pay additional withholding taxes in respect of the amount that is
considered compensation includible in such person's gross income.
17. Notice to Company of Disqualifying Disposition.
Each employee who receives incentive stock options shall agree to notify
the Company in writing immediately after the employee makes a disqualifying
disposition of any Common Stock received pursuant to the exercise of an
incentive stock option (a "Disqualifying Disposition"). Disqualifying
Disposition means any disposition (including any sale) of such stock before the
later of (a) two years after the employee was granted the incentive stock option
under which he acquired such stock, or (b) one year after the employee acquired
such stock by exercising such incentive stock option. If the employee had died
before such stock is sold, these holding period requirements do not apply and no
Disqualifying Disposition will thereafter occur.
18. Effective Date and Termination Date.
The Plan and any amendment thereto requiring stockholder approval shall
become effective upon the date of its adoption by the Board, subject, however to
approval by the stockholders of the Company within twelve months of such date.
The Plan shall remain in effect until terminated by the Board, but not later
than ten years after the date the Plan is initially adopted by the Board, or is
approved by the shareholders, whichever first occurs.
The Plan was initially adopted by the Board of Directors of PHC, Inc. on
August 26, 1993.
The Plan was initially approved by the stockholders of PHC, Inc. on
November 30, 1993.
The amendment to increase the number of shares which may be issued pursuant
to the Plan to 400,000 shares was adopted by the Board of Directors of PHC, Inc.
on November 17, 1997 and approved by the stockholders of PHC, Inc. on December
26, 1997.
The amendment to increase the number of shares which may be issued pursuant
to the Plan to 1,000,000 was adopted by the Board of Directors of PHC, Inc. on
December 15, 1998 and approved by the stockholders of PHC, Inc. on December 23,
1998.
<PAGE>
Exhibit 4.2
PHC, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
Effective as of October 18, 1995
1. PURPOSE. The purpose of this Employee Stock Purchase Plan (the "Plan")
is to provide employees (including leased employees) of PHC, Inc., a
Massachusetts corporation (the "Company"), and its subsidiaries, who wish to
become stockholders of the Company, an opportunity to purchase Class A Common
Stock of the Company (the "Shares"). The Plan is intended to qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. ELIGIBLE EMPLOYEES. Subject to provisions of Sections 7, 8 and 9 below,
any individual who is in the full-time employment (as defined below) of the
Company, or any of its subsidiaries (as defined in Section 424(f) of the Code)
the employees of which are designated by the Board of Directors of the Company
(the "Board") as eligible to participate in the Plan, is eligible to participate
in any Offering of Shares (as defined in Section 3 below) made by the Company
hereunder. Full-time employment shall include all employees whose customary
employment is:
(a) in excess of 20 hours per week; and
(b) more than five months in the relevant calendar year.
3. OFFERING DATES. From time to time the Company, by action of the Board,
will grant rights to purchase Shares to employees eligible to participate in the
Plan pursuant to one or more offerings (each of which is an "Offering") on a
date or series of dates (each of which is an "Offering Date") designated for
this purpose by the Board.
4. PRICES. The price per Share for each grant of rights hereunder shall be
the lesser of:
(a) eighty-five percent (85%) of the fair market value of a Share on the
Offering Date on which such right was granted; or
(b) eighty-five percent (85%) of the fair market value of a Share on the
date such right is exercised.
At its discretion, the Board of Directors may determine a higher price for
a grant of rights. For purposes of this Plan, the term "fair market value" on
any date means (i) the average (on that date) of the high and low prices of the
Company's Class A Common Stock on the principal national securities exchange on
which the Class A Common Stock is traded, if the Class A Common Stock is then
traded on a national securities exchange; or (ii) the last reported sale price
(on that date) of the Class A Common Stock on the Nasdaq National Market, if the
Class A Common Stock is not then traded on a national securities exchange; or
(iii) the average of the closing bid and asked prices last quoted (on that date)
by an established quotation service for over-the-counter securities, if the
Class A Common Stock is not reported on the Nasdaq National Market. If the
Company's Class A Common Stock is not publicly traded at the time a right is
granted under this Plan, "fair market value" shall mean the fair market value of
the Class A Common Stock as determined by the Administrator (as defined below)
after taking into consideration all factors which it deems appropriate,
including, without limitation, recent sale and offer prices of the Class A
Common Stock in private transactions negotiated at arms length.
5. EXERCISE OF RIGHTS AND METHOD OF PAYMENT
(a) Rights granted under the Plan will be exercisable periodically on
specified dates as determined by the Board.
(b) The method of payment for Shares purchased upon exercise of rights
granted hereunder shall be through regular payroll deductions or by lump sum
cash payment or both, as determined by the Board. No interest shall be paid upon
payroll deductions unless specifically provided for by the Board.
(c) Any payments received by the Company from a participating employee and
not utilized for the purchase of Shares upon exercise of a right granted
hereunder shall be promptly returned to such employee by the Company after
termination of the right to which the payment relates.
6. TERM OF RIGHTS. Rights granted on any Offering Date shall be exercisable
upon the expiration of such period ("Offering Period") as shall be determined by
the Board when it authorizes the Offering, or provided that such Offering Period
shall in no event be longer than twenty-seven (27) months.
7. SHARES SUBJECT TO THE PLAN. No more than 100,000 Shares may be sold
pursuant to rights granted under the Plan; provided, however, that appropriate
adjustment shall be made to such number, to the number of Shares covered by
outstanding rights granted hereunder, to the exercise price of the rights and to
the maximum number of Shares which an employee may purchase (pursuant to Section
8 below) to give effect to any mergers, consolidations, reorganizations,
recapitalizations, stock splits, stock dividends or other relevant changes in
the capitalization of the Company occurring after the effective date of the
Plan, provided that no fractional Shares shall be subject to a right and each
right shall be adjusted downward to the nearest full Share. Any agreement of
merger or consolidation will include provisions for protection of the then
existing rights of participating employees under the Plan. Either authorized and
unissued Shares or issued Shares heretofore or hereafter reacquired by the
Company may be made subject to rights under the Plan. If for any reason any
right under the Plan terminates in whole or in part, Shares subject to such
terminated right may again be subjected to a right under the Plan.
8. LIMITATIONS ON GRANTS.
(a) No employee shall be granted a right hereunder if such employee,
immediately after the right is granted, would own stock or rights to purchase
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company, or of any subsidiary, computed in
accordance with Sections 423(b)(3) and 424(d) of the Code.
(b) No employee shall be granted a right which permits his rights to
purchase shares of capital stock of the Company under all employee stock
purchase plans of the Company and its subsidiaries to accrue at a rate which
exceeds twenty-five thousand dollars ($25,000) (or such other maximum as may be
prescribed from time to time by the Code) of fair market value of such Shares
(determined at the time such right is granted) for each calendar year in which
such right is outstanding at any time in accordance with the provisions of
Section 423(b)(8) of the Code.
(c) The number of Shares for which rights granted in any Offering can be
exercised shall be either (i) the same for each employee participating in such
Offering or (ii) shall bear a uniform relation to the total compensation or
basic or regular rate of compensation for each employee participating in such
Offering. No right granted to any participating employee under a single Offering
shall cover more shares than may be purchased at an exercise price equal to 10%
of the compensation payable to the employee during the Offering not taking into
consideration any changes in the employee's rate of compensation after the date
the employee elects to participate in the Offering, or such other percentage as
determined by the Board from time to time. This provision shall be construed to
meet the requirements set forth in Section 423(b)(5) of the Code.
9. LIMIT ON PARTICIPATION. Participation in an Offering shall be limited to
eligible employees who elect to participate in such Offering in the manner, and
within the time limitation, established by the Board when it authorizes the
Offering.
10. CANCELLATION OF ELECTION TO PARTICIPATE. An employee who has elected to
participate in an Offering may, unless the employee has waived this cancellation
right at the time of such election in a manner established by, the Board, cancel
such election as to all (but not part) of the rights granted under such Offering
by giving written notice of such cancellation to the Company before the
expiration of the Offering Period. Any amounts paid by the employee for the
Shares or withheld for the purchase of Shares from the employee's compensation
through payroll deductions shall be paid to the employee, without interest, upon
such cancellation.
11. TERMINATION OF EMPLOYMENT. Upon termination of employment for any
reason, including the death of the employee, before the date on which any rights
granted under the Plan are exercisable, all such rights shall immediately
terminate and amounts paid by the employee for the Shares or withheld for the
purchase of Shares from the employee's compensation through payroll deductions
shall be paid to the employee or to the employee's estate, without interest.
12. EMPLOYEE'S RIGHTS AS STOCKHOLDER. No participating employee shall have
any rights as a stockholder in the Shares covered by a right granted hereunder
until such right has been exercised, full payment has been made for the
corresponding Shares and the certificate for such Shares is actually issued.
13. RIGHTS NOT TRANSFERABLE. Rights under the Plan are not assignable or
transferable by a participating employee and are exercisable only by the
employee.
14. LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN. The Plan is intended
to provide shares of Class A Common Stock for investment and not for resale. The
Company does not, however, intend to restrict or influence any employee in the
conduct of such employee's own affairs. An employee may, therefore, sell stock
purchased under the Plan at any time the employee chooses, subject to compliance
with any applicable Federal or state securities laws; provided, however, that
because of certain Federal tax requirements, each employee agrees by entering
the Plan, promptly to give the Company notice of any such stock disposed of
within two years after the date of grant of the applicable right or one year
after transfer of the Shares to such employee showing the number of such Shares
disposed of. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE
PRICE OF THE STOCK.
15. AMENDMENTS TO OR DISCONTINUANCE OF THE PLAN. The Board may at any time
terminate or amend the Plan without notice and without further action on the
part of stockholders of the Company, provided:
(a) that no such termination or amendment shall adversely affect the then
existing rights of any participating employee; and
(b) that any such amendment which:
(i) increases the number of Shares subject to the Plan (subject to
the provisions of Section 7);
(ii) changes the class of persons eligible to participate under the
Plan; or
(iii)materially increases the benefits accruing to participants under
the Plan shall be subject to approval of the stockholders of the
Company.
16. EFFECTIVE DATE AND APPROVALS. The Plan was adopted by the Board on
October 18, 1995 to become effective as of said date. The Company's obligation
to offer, sell and deliver its Shares under the Plan is subject to the approval
of its stockholders not later than October 18, 1996, and of any governmental
authority required in connection with the authorized issuance or sale of such
Shares and is further subject to the Company receiving the opinion of its
counsel that all applicable securities laws have been complied with.
17. TERM OF PLAN. No rights shall be granted under the Plan after October
18, 2005.
18. ADMINISTRATION OF THE PLAN. The Board or any committee or persons to
whom it delegates its authority (the "Administrator") shall administer,
interpret and apply all provisions of the Plan. The Administrator may waive such
provisions of the Plan as it deems necessary to meet special circumstances not
anticipated or covered expressly by the Plan. Nothing contained in this Section
shall be deemed to authorize the Administrator to alter or administer the
provisions of the Plan in a manner inconsistent with the provisions of Section
423 of the Code. No member of the Administrator shall be liable for any action
or determination made in good faith with respect to the Plan or any right
granted under it.
The Plan was initially adopted by the Board of Directors of PHC, Inc. on
October 18, 1995.
The Plan was initially approved by the stockholders of PHC, Inc. on
December 15, 1995.
The amendment to increase the number of shares which may be issued pursuant
to the Plan to 150,000 shares was adopted by the Board of Directors of PHC, Inc.
on November 17, 1997 and approved by the stockholders of PHC, Inc. on December
26, 1997.
<PAGE>
Exhibit 4.3
PHC, INC.
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose. This 1995 Non-Employee Director Stock Option Plan (hereinafter,
the "Plan") is intended to promote the interests of PHC, Inc., a Massachusetts
corporation (the "Company"), by providing an inducement to obtain and retain the
services of qualified persons who are not employees of the Company to serve as
members of its Board of Directors (the "Board").
2. Available Shares. The total number of shares of Class A Common Stock,
$.01 par value, of the Company (the "Class A Common Stock") for which options
may be granted under the Plan shall not exceed 30,000 shares, subject to
adjustment in accordance with Section 10 of the Plan. Shares subject to the Plan
are authorized but unissued shares or shares that were once issued and
subsequently reacquired by the Company. If any options granted under the Plan
are surrendered before exercise or lapse without exercise, in whole or in part,
the shares reserved therefor shall continue to be available under the Plan.
3. Administration. The Plan shall be administered by the Board or by a
committee appointed by the Board (the "Committee"). In the event the Board fails
to appoint or refrains from appointing a Committee, the Board shall have all
power and authority to administer the Plan. In such event, the word "Committee"
wherever used herein shall be deemed to mean the Board. The Committee shall,
subject to the provisions of the Plan, have the power to construe the Plan, to
determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of the Plan as it may deem desirable. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it.
4. Granting of Options.
During the term of the Plan and subject to the availability of shares under
the Plan:
(a) Initial Grants. Each director who is, at the time of the initial
approval by the Board of this Plan, serving as a director of the Company and who
is not a current or former employee of the Company shall, contingent on
shareholder approval of this Plan, receive at the time of the first meeting of
the Board following approval by the Board of this Plan an option to purchase the
number of shares of Class A Common Stock which is equal to 500 multiplied by the
number of full years such director has served on the Board at that time.
(b) Subsequent Grants. At the time of each annual meeting of the Board,
beginning with the first such meeting following the meeting at which the initial
grants are made pursuant to subsection 4(a) hereof, during the term of this
Plan, there shall be granted to each director who is not a current or former
employee of the Company an option to purchase 2,000 shares of Class A Common
Stock.
Except for the specific options referred to above, no other options shall
be granted under the Plan.
5. Option Price. The purchase price of the stock covered by an option
granted pursuant to the Plan shall be 100% of the fair market value of such
shares on the day the option is granted. The option price will be subject to
adjustment in accordance with the provisions of Section 10 of the Plan. For
purposes of the Plan, if, at the time an option is granted under the Plan, the
Company's Class A Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such option is granted and
shall mean (i) the average (on that date) of the high and low prices of the
Class A Common Stock on the principal national securities exchange on which the
Class A Common Stock is traded, if the Class A Common Stock is then traded on a
national securities exchange; (ii) the last reported sale price (on that date)
of the Class A Common Stock on the Nasdaq National Market, if the Class A Common
Stock is not then traded on a national securities exchange; or (iii) the closing
bid price (or average of bid prices) last quoted (on that date) by an
established quotation service for over-the-counter securities, if the Class A
Common Stock is not reported on the Nasdaq National Market or on a national
securities exchange. If, at the time an option is granted under the Plan, the
Company's Class A Common Stock is not publicly traded, "fair market value" shall
be as determined (i) by the mutual agreement of the optionee and the Company, or
(ii) if such parties are unable to reach such agreement within 30 days after the
grant of such option, by a reputable appraiser selected by the Company (the
"Appraiser"). The Appraiser shall determine the fair market value without giving
any consideration, premium or discount to the fact that the optionee may own
more or less than a majority of the outstanding stock of the Company. The
Appraiser shall determine the fair market value not later than 60 days after the
grant of such option. The cost of the appraisal as determined by the Appraiser
shall be borne by the Company.
6. Period of Option. Unless sooner terminated in accordance with the
provisions of Section 8 of the Plan, an option granted hereunder shall expire on
the date which is ten (10) years after the date of grant of the option.
7. Vesting of Shares and Non-transferability of Options.
(a) Vesting. Options granted under the Plan shall not be exercisable until
they become vested. Options granted under the Plan shall vest in the optionee
and thus become exercisable by the optionee as follows: 25% immediately and 25%
on each of the first, second and third anniversary of the date of grant.
(b) Legend on Certificates. The certificates representing such shares shall
carry such appropriate legend and such written instructions shall be given to
the Company's transfer agent as may be deemed necessary or advisable by counsel
to the Company in order to comply with the requirements of the Securities Act of
1933 or any state securities laws.
(c) Non-transferability. Any option granted pursuant to the Plan shall not
be assignable or transferable other than by will or the laws of descent and
distribution and shall be exercisable during the optionee's lifetime only by him
or her.
8. Termination of Option Rights.
(a) In the event an optionee ceases to be a member of the Board for any
reason other than death or permanent disability, any then unexercised portion of
options granted to such optionee shall, to the extent not then vested,
immediately terminate and become void; any portion of an option which is then
vested but has not been exercised at the time the optionee so ceases to be a
member of the Board may be exercised, to the extent it is then vested, by the
optionee within 180 days of the date the optionee ceased to be a member of the
Board, and all options shall terminate after the 180-day period has expired.
(b) In the event that an optionee ceases to be a member of the Board by
reason of his or her death or permanent disability, any option granted to such
optionee shall be immediately and automatically accelerated and become fully
vested and all unexercised options shall be exercisable by the optionee (or by
the optionee's personal representative, heir or legatee, in the event of death)
until the earlier of the scheduled expiration date of the option or 180 days
after the death or disability of the optionee.
9. Exercise of Option. Subject to the terms and conditions of the Plan and
the option agreements, an option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to the
Company at its principal office address, stating the number of shares with
respect to which the option is being exercised, accompanied by payment in full
for such shares. Payment may be (a) in United States dollars in cash or by
check, (b) in whole or in part in shares of Class A Common Stock of the Company
already owned by the person or persons exercising the option or shares subject
to the option being exercised (subject to such restrictions and guidelines as
the Board may adopt from time to time), valued at fair market value determined
in accordance with the provisions of Section 5 or (c) consistent with applicable
law, through the delivery of an assignment to the Company of a sufficient amount
of the proceeds from the sale of the Class A Common Stock acquired upon exercise
of the option and an authorization to the broker or selling agent to pay that
amount to the Company, which sale shall be at the participant's direction at the
time of exercise. There shall be no such exercise at any one time as to fewer
than one hundred (100) shares or all of the remaining shares then purchasable by
the person or persons exercising the option, if fewer than one hundred (100)
shares. The Company's transfer agent shall, on behalf of the Company, prepare a
certificate or certificates representing such shares acquired pursuant to
exercise of the option, shall register the optionee as the owner of such shares
on the books of the Company and shall cause the fully executed certificates(s)
representing such shares to be delivered to the optionee as soon as practicable
after payment of the option price in full. The holder of an option shall not
have any rights of a stockholder with respect to the shares covered by the
option except to the extent that one or more certificates for such shares shall
be delivered to him or her upon the due exercise of the option.
10. Adjustments Upon Changes in Capitalization and Other Matters. Upon the
occurrence of any of the following events, an optionee's rights with respect to
options granted to him or her hereunder shall be adjusted as hereinafter
provided:
(a) Stock Dividends. In the event the Company shall issue any of its shares
as a stock dividend upon or with respect to the shares of stock of the class
which shall at the time be subject to option hereunder, each optionee upon
exercising an Option shall be entitled to receive (for the purchase price paid
upon such exercise) the shares as to which he is exercising his Option and, in
addition thereto (at no additional cost), such number of shares of the class or
classes in which such stock dividend or dividends were declared or paid, and
such amount of cash in lieu of fractional shares, as he would have received if
he had been the holder of the shares as to which he is exercising his Option at
all times between the date of grant of such Option and the date of its exercise.
(b) Merger; Consolidation; Liquidation; Sale of Assets. In the event the
Company is merged into or consolidated with another corporation under
circumstances where the Company is not the surviving corporation or if the
Company is liquidated or sells or otherwise disposes of all or substantially all
of its assets to another corporation while unexercised options remain
outstanding under the Plan, after the effective date of such merger,
consolidation or sale, as the case may be, each holder of an outstanding option
shall be entitled, upon exercise of such option, to receive in lieu of shares of
Class A Common Stock, shares of such stock or other securities as the holders of
shares of Class A Common Stock received pursuant to the terms of the merger,
consolidation or sale.
(c) Issuance of Securities. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
(d) No Fractional Shares. No fractional shares shall actually be issued
under the Plan. Any fractional shares which, but for this subsection (d), would
have been issued to an optionee pursuant to an Option, shall be deemed to have
been issued and immediately sold to the Company for their fair market value, and
the optionee shall receive from the Company cash in lieu of such fractional
shares.
(e) Adjustments. Upon the happening of any of the foregoing events, the
class and aggregate number of shares set forth in Section 2 of the Plan that are
subject to options which previously have been or subsequently may be granted
under the Plan shall also be appropriately adjusted to reflect such events. The
Board shall determine the specific adjustments to be made under this Section 10
and its determination shall be conclusive.
11. Restrictions on Issuance of Shares. Notwithstanding the provisions of
Sections 4 and 9 of the Plan, the Company shall have no obligation to deliver
any certificate or certificates upon exercise of an option until one of the
following conditions shall be satisfied:
(i) The shares with respect to which the option has been exercised are at
the time of the issue of such shares effectively registered under applicable
Federal and state securities laws as now in force or hereafter amended; or
(ii) Counsel for the Company shall have given an opinion that such shares
are exempt from registration under Federal and state securities laws as now in
force or hereafter amended; and the Company has complied with all applicable
laws and regulations with respect thereto, including without limitation all
regulations required by any stock exchange upon which the Company's outstanding
Class A Common Stock is then listed.
12. Representation of Optionee. If requested by the Company, the optionee
shall deliver to the Company written representations and warranties upon
exercise of the option that are necessary to show compliance with Federal and
state securities laws, including representations and warranties to the effect
that a purchase of shares under the option is made for investment and not with a
view to their distribution (as that term is used in the Securities Act of 1933).
13. Option Agreement. Each option granted under the provisions of the Plan
shall be evidenced by an option agreement, which agreement shall be duly
executed and delivered on behalf of the Company and by the optionee to whom such
option is granted. The option agreement shall contain such terms, provisions and
conditions not inconsistent with the Plan as may be determined by the officer
executing it.
14. Term and Amendment of Plan. The Plan was adopted by the Board effective
as of October 18, 1995, subject to approval by the stockholders of the Company.
Options may not be granted under the Plan after October 18, 2005, and the Plan
shall terminate when all options granted or to be granted hereunder are no
longer outstanding. Subject to the provisions of Section 4 above, options may be
granted under the Plan prior to the date of stockholder approval of the Plan. If
the approval of stockholders is not obtained by October 18, 1996, any grants of
options under the Plan made prior to that date will be rescinded. The Board may
at any time terminate the Plan or make such modification or amendment thereof as
it deems advisable; provided, however, that the Board may not, without approval
by the stockholders, (a) increase the maximum number of shares for which options
may be granted under the Plan (except by adjustment pursuant to Section 11), (b)
materially modify the requirements as to eligibility to participate in the Plan,
(c) materially increase benefits accruing to option holders under the Plan or
(d) amend the Plan in any manner which would cause Rule 16b-3 to become
inapplicable to the Plan; and provided further that the provisions of the Plan
specified in Rule 16b-3(c)(2)(ii)(A) (or any successor or amended provision
thereof) under the Securities Exchange Act of 1934 (including without
limitation, provisions as to eligibility, amount, price and timing of awards)
may not be amended more than once every six months, other than to comport with
changes in the Internal Revenue Code. Termination or any modification or
amendment of the Plan shall not, without consent of a participant, affect his or
her rights under an option previously granted to him or her.
15. Compliance with Regulations. It is the Company's intent that the Plan
comply in all respects with Rule 16b-3 under the Securities Exchange Act of 1934
(or any successor or amended version thereof) and any applicable Securities and
Exchange Commission interpretations thereof. If any provision of the Plan is
deemed not to be in compliance with Rule 16b-3, the provision shall be null and
void.
16. Governing Law. The validity and construction of the Plan and the
instruments evidencing options shall be governed by the laws of The Commonwealth
of Massachusetts, without giving effect to the principles of conflicts of law
thereof.
The Plan was initially adopted by the Board of Directors of PHC, Inc. on
October 18, 1995.
The Plan was initially approved by the stockholders of PHC, Inc. on
December 15, 1995.
The amendment to increase the number of shares which may be issued pursuant
to the Plan to 50,000 shares was adopted by the Board of Directors of PHC, Inc.
on November 17, 1997 and approved by the stockholders of PHC, Inc. on December
26, 1997.
