<PAGE> 1
As filed with the Securities and Exchange Commission on September 28, 1994
Registration No. 33-
================================================================================
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________
CORAM HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 33-0615337
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
</TABLE>
4675 MACARTHUR COURT, SUITE 1250, NEWPORT BEACH, CA 92660
(Address of principal executive offices) (Zip Code)
________________________
CORAM HEALTHCARE CORPORATION
1994 STOCK OPTION/STOCK ISSUANCE PLAN
EMPLOYEE STOCK PURCHASE PLAN
HEALTHINFUSION, INC.
(Full title of the plans)
_______________________
JAMES M. SWEENEY
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
CORAM HEALTHCARE CORPORATION
4675 MACARTHUR COURT, SUITE 1250, NEWPORT BEACH, CA 92660
(Name and address of agent for service)
(714) 955-8776
(Telephone number, including area code, of agent for service)
________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ------------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Options to Purchase
Common Stock :
1994 Stock Option/ 7,600,000 N/A N/A N/A
Stock Issuance Plan
HealthInfusion, Inc. 289,779 N/A N/A N/A
Amended and Restated Stock
Option Plan
Common Stock,
$0.001 par value
1994 Stock Option/ 7,600,000 $18.3125(2) $139,175,000.00(2) $47,991.38
Stock Issuance Plan
Employee Stock Purchase Plan 300,000 $18.3125(2) $5,493,750.00(2) $1,894.40
HealthInfusion, Inc. 289,779 $13.77(3) $3,990,256.83(3) $1,375.95
Amended and Restated Stock
Option Plan
Aggregate Registration Fee $51,261.73
==========
==============================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional
shares of Common Stock which become issuable under the 1994 Stock
Option/Stock Issuance Plan, the Employee Stock Purchase Plan and the
HealthInfusion, Inc. Amended and Restated Stock Option Plan by
reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the receipt of consideration
which results in an increase in the number of the Registrant's
outstanding shares of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, on the basis of the average of
the high and low selling prices per share of Common Stock of the
Registrant on September 23, 1994 as reported by the New York Stock
Exchange.
(3) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, on the basis of the weighted
average exercise price of the outstanding options.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Coram Healthcare Corporation (the "Registrant") hereby
incorporates by reference into this Registration Statement the following
documents previously filed with the Securities and Exchange Commission (the
"Commission"):
(a) The Registrant's Current Report on Form 8-K, filed September
14, 1994.
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1994.
(c) The Registrant's Current Report on Form 8-K, filed July 15,
1994.
(d) (1) The following documents previously filed with the
Commission by the Registrant's subsidiary T2 Medical,
Inc.:
(i) Annual Report on Form 10-K for the fiscal year
ended September 30, 1993;
(ii) Amendment to Annual Report on Form 10-K/A filed
with the Commission on January 28, 1994;
(iii) Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1993; and
(iv) Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1994.
(2) The following documents previously filed with the
Commission by the Registrant's subsidiary
HealthInfusion, Inc.:
(i) Annual Report on Form 10-K for the fiscal year
ended December 31, 1993; and
(ii) Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1994.
(3) The following documents previously filed with the
Commission by the Registrant's subsidiary Medisys,
Inc.:
(i) Annual Report on Form 10-K for the fiscal year
ended December 31, 1993; and
(ii) Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1994.
(4) The following documents previously filed with the
Commission by the Registrant's subsidiary Curaflex
Health Services, Inc.:
(i) Annual Report on Form 10-K for the fiscal year
ended December 31, 1993; and
(ii) Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1994.
(e) (1) The Registrant's Proxy Statement filed with the
Commission on June 3, 1994 pursuant to Section 14(a)
of the Securities and Exchange Act of 1934 (the "1934
Act") in connection with the Registrant's
Registration Statement No. 33-53957 on Form S-4, as
amended by Post-Effective Amendments Numbers 1, 2 and
3 filed with the Commission on June 7, 1994, June 17,
1994 and August 12, 1994, respectively, in which
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<PAGE> 3
there is described the terms, rights and provisions applicable to the
Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements of
Registrant filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act
after the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference into this Registration Statement and
to be a part hereof from the date of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
As permitted by the Delaware General Corporation Law, the
Registrant's Certificate of Incorporation eliminates the liability of directors
to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, except to the extent otherwise required by the
Delaware General Corporation Law.
The Registrant's Bylaws provide that the Registrant will
indemnify each person who was or is made a party to any proceeding by reason of
the fact that such person is or was a director, officer, employee or agent of
the Registrant against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith to the fullest extent
authorized by the Delaware General Corporation Law.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
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<CAPTION>
Exhibit Number Exhibit
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<S> <C>
5 Opinion and Consent of Brobeck, Phleger & Harrison.
23.1 Consent of Independent Auditors - Deloitte & Touche LLP.
23.2 Consent of Independent Auditors - KPMG Peat Marwick LLP.
23.3 Consent of Independent Auditors - Arthur Andersen LLP.
23.4 Consent of Independent Auditors - Coopers & Lybrand L.L.P.
23.5 Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this Registration Statement.
99.1 1994 Stock Option/Stock Issuance Plan.
99.2 Notice of Grant of Stock Option and Stock Option Agreement (Discretionary Option Grant Program).
99.3 Addendum to Stock Option Agreement (Special Tax Elections).
99.4 Addendum to Stock Option Agreement (Involuntary Termination following Change in Control).
99.5 Addendum to Stock Option Agreement (Limited Stock Appreciation Right).
99.6 Addendum to Stock Option Agreement (Financial Assistance).
</TABLE>
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<TABLE>
<S> <C>
99.7 Notice of Grant of Stock Option and Stock Option Agreement (Automatic Option Grant Program).
99.8 Stock Option Agreement - James M. Sweeney.
99.9 Stock Option Agreement - Charles A. Laverty.
99.10 Stock Option Agreement - Tommy H. Carter.
99.11 Stock Issuance Agreement.
99.12 Addendum to Stock Issuance Agreement (Special Tax Elections).
99.13 Addendum to Stock Issuance Agreement (Involuntary Termination following Change in Control).
99.14 Employee Stock Purchase Plan.
99.15 Stock Purchase Agreement.
99.16 Enrollment Form.
99.17 HealthInfusion, Inc. Amended and Restated Stock Option
Plan - Incorporated by reference to Exhibit 10.21 to the
Registration Statement Number 33-44020 on Form S-8 filed
with the Commission on November 21, 1991 by
HealthInfusion, Inc.
99.18 Form of Stock Option Assumption Agreement for Options
issued pursuant to the HealthInfusion, Inc. Amended
and Restated Stock Option Plan.
</TABLE>
Item 9. Undertakings.
A. The undersigned Registrant hereby undertakes: (1)
to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933, as
amended (the "1933 Act"), (ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii)
shall not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into the Registration Statement; (2) that for the
purpose of determining any liability under the 1933 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
Registrant's 1994 Stock Option/Stock Issuance Plan, Employee Stock Purchase
Plan and the HealthInfusion, Inc. Amended and Restated Stock Option Plan.
B. The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the 1933 Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the 1934 Act that is incorporated by reference into 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.
C. Insofar as indemnification for liabilities arising
under the 1933 Act may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been informed that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the 1933 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 1933
Act, and will be governed by the final adjudication of such issue.
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<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Ontario, State of California, on this
14th of September 1994.
Coram Healthcare Corporation
By /s/James M. Sweeney
----------------------------------
James M. Sweeney
Chief Executive Officer and
Chairman of the Board of
Directors
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Coram
Healthcare Corporation, a Delaware corporation, do hereby constitute and
appoint James M. Sweeney and Sam R. Leno, and each of them, the lawful
attorneys and agents, with full power and authority to do any and all acts and
things and to execute any and all instruments which said attorneys and agents,
and any one of them, determine may be necessary or advisable or required to
enable said corporation to comply with the Securities Act of 1933, as amended,
and any rules or regulations or requirements of the Commission in connection
with this Registration Statement. Without limiting the generality of the
foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
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Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/James M. Sweeney Chief Executive Officer September 14, 1994
- ---------------------------------- and Chairman of the Board
James M. Sweeney of Directors (Principal
Executive Officer)
/s/Sam R. Leno Chief Financial Officer September 14, 1994
- ---------------------------------- (Principal Financial and
Sam R. Leno Accounting Officer)
</TABLE>
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Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/Tommy H. Carter Vice Chairman of the September 14, 1994
- ---------------------------------- Board of Directors
Tommy H. Carter
/s/Miles E. Gilman Director September 14, 1994
- ----------------------------------
Miles E. Gilman
/s/Charles A. Laverty Director September 14, 1994
- ----------------------------------
Charles A. Laverty
/s/L. Peter Smith Director September 14, 1994
- ----------------------------------
L. Peter Smith
/s/Richard A. Fink Director September 14, 1994
- ----------------------------------
Richard A. Fink
/s/Stephen G. Pagliuca Director September 14, 1994
- ----------------------------------
Stephen G. Pagliuca
</TABLE>
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<PAGE> 7
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
CORAM HEALTHCARE CORPORATION
<PAGE> 8
EXHIBIT INDEX
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<CAPTION>
Exhibit Number Exhibit
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<S> <C>
5 Opinion and Consent of Brobeck, Phleger & Harrison.
23.1 Consent of Independent Auditors - Deloitte & Touche LLP.
23.2 Consent of Independent Auditors - KPMG Peat Marwick LLP.
23.3 Consent of Independent Auditors - Arthur Andersen LLP.
23.4 Consent of Independent Auditors - Coopers & Lybrand L.L.P.
23.5 Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this Registration Statement.
99.1 1994 Stock Option/Stock Issuance Plan.
99.2 Notice of Grant of Stock Option and Stock Option Agreement (Discretionary Option Grant Program).
99.3 Addendum to Stock Option Agreement (Special Tax Elections).
99.4 Addendum to Stock Option Agreement (Involuntary Termination following Change in Control).
99.5 Addendum to Stock Option Agreement (Limited Stock Appreciation Right).
99.6 Addendum to Stock Option Agreement (Financial Assistance).
99.7 Notice of Grant of Stock Option and Stock Option Agreement (Automatic Option Grant Program).
99.8 Stock Option Agreement - James M. Sweeney.
99.9 Stock Option Agreement - Charles A. Laverty.
99.10 Stock Option Agreement - Tommy H. Carter.
99.11 Stock Issuance Agreement.
99.12 Addendum to Stock Issuance Agreement (Special Tax Elections).
99.13 Addendum to Stock Issuance Agreement (Involuntary Termination following Change in Control).
99.14 Employee Stock Purchase Plan.
99.15 Stock Purchase Agreement.
99.16 Enrollment Form.
99.17 HealthInfusion, Inc. Amended and Restated Stock Option
Plan - Incorporated by reference to Exhibit 10.21 to the
Registration Statement Number 33-44020 on Form S-8 filed
with the Commission on November 21, 1991 by
HealthInfusion, Inc.
99.18 Form of Stock Option Assumption Agreement for Options
issued pursuant to the HealthInfusion, Inc. Amended
and Restated Stock Option Plan.
</TABLE>
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<PAGE> 1
EXHIBIT 5
Opinion and Consent of Brobeck, Phleger & Harrison
<PAGE> 2
BROBECK, PHLEGER & HARRISON
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94303-0913
September 27, 1994
Coram Healthcare Corporation
4675 MacArthur Court, Suite 1250
Newport Beach
CA 92660
Re: Registration Statement for Offering of 8,189,779 Shares of
Common Stock
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of (i) 7,600,000
shares of Common Stock issuable under the Company's 1994 Stock Option/Stock
Issuance Plan, (ii) 300,000 shares of Common Stock issuable under the Company's
Employee Stock Purchase Plan and (iii) 289,779 shares of Common Stock issuable
pursuant to the HealthInfusion, Inc. Amended and Restated Stock Option Plan
(the "HealthInfusion Plan").
The options issuable under the HealthInfusion Plan were assumed by the
Company in connection with the July 8, 1994 merger pursuant to which T2 Medical
Inc., Curaflex Health Services, Inc., HealthInfusion, Inc. and Medisys, Inc.
became separate wholly-owned subsidiaries of the Company.
We advise you that, in our opinion, when such shares have been issued
and sold pursuant to the applicable provisions of the 1994 Stock Option/Stock
Issuance Plan, the Employee Stock Purchase Plan or the HealthInfusion Plan and
in accordance with the Registration Statement, such shares will be validly
issued, fully paid and nonassessable shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Brobeck, Phleger & Harrison
BROBECK, PHLEGER & HARRISON
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Auditors - Deloitte & Touche LLP
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<PAGE> 2
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES
To the Board of Directors and Stockholders of
T2 Medical, Inc.
Alpharetta, Georgia
We consent to the incorporation by reference in this Registration Statement of
Coram Healthcare Corporation on Form S-8 of our report dated November 17, 1993
(December 23, 1993 as to Note 17) (which expresses an unqualified opinion and
includes an explanatory paragraph relating to material uncertainties concerning
pending claims against the Company) appearing in the Annual Report on Form 10-K
of T2 Medical, Inc. for the year ended September 30, 1993.
Our audits of the financial statements referred to in our aforementioned report
also included the financial statement schedules of T2 Medical, Inc., listed in
Item 14 of the Annual Report on Form 10-K of T2 Medical, Inc. for the year
ended September 30, 1993. These financial statement schedules are the
responsibility of T2 Medical, Inc.'s management. Our responsibility is to
express an opinion based on our audits. In our opinion, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
September 22, 1994
<PAGE> 1
EXHIBIT 23.2
Consent of Independent Auditors - KPMG Peat Marwick LLP
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<PAGE> 2
KPMG Peat Marwick
Certified Public Accountants
Inland Empire Office
One Lakeshore Centre
3281 Guasti Road, Suite 550
Ontario, CA 91761
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Coram Healthcare Corporation
We consent to the incorporation by reference in the registration statement on
Form S-8 of Coram Healthcare Corporation of our report dated February 28, 1994
relating to the consolidated balance sheets of Curaflex Health Services, Inc.
and subsidiaries as of December 31, 1993 and 1992, and the related consolidated
statements of operations, common stockholders' equity (deficit), and cash flows
for each of the years in the three-year period ended December 31, 1993, and all
related schedules, which report appears in the December 31, 1993 annual report
on Form 10-K of Curaflex Health Services, Inc. and subsidiaries.
Our report contains an explanatory paragraph that states the Company changed
its method of accounting for income taxes in 1993.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Ontario, California
September 22, 1994
<PAGE> 1
EXHIBIT 23.3
Consent of Independent Auditors - Arthur Andersen LLP
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<PAGE> 2
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Form S-8 registration statement of our
report dated March 18, 1994 included in HealthInfusion, Inc. and subsidiaries'
Form 10-K for the year ended December 31, 1993 and to all references to our
Firm included in this Form S-8 registration statement of Coram Healthcare
Corporation.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Miami, Florida
September 23, 1994
<PAGE> 1
EXHIBIT 23.4
Consent of Independent Auditors - Coopers & Lybrand L.L.P.
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<PAGE> 2
COOPERS & LYBRAND L.L.P.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of Coram Healthcare Corporation (the Company) on Form S-8 for (i) the
7,600,000 shares to be offered under the Company's 1994 Stock Option/Stock
Issuance Plan, (ii) the 300,000 shares to be offered under the Employee Stock
Purchase Plan, and (iii) the 289,779 shares of the Company's common stock
issuable pursuant to options granted by HealthInfusion, Inc. and assumed by the
Company in connection with the July 8, 1994 merger, of our report dated
February 11, 1994, on our audits of the consolidated financial statements and
financial statement schedules of Medisys, Inc. and Subsidiaries as of December
31, 1993 and 1992 and for the years ended December 31, 1993, 1992, and 1991,
which report is included in the Medisys, Inc. Annual Report on Form 10-K and
the Coram Healthcare Corporation registration statement on Form S-4.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Minneapolis, Minnesota
September 26, 1994
<PAGE> 1
EXHIBIT 99.1
1994 Stock Option/Stock Issuance Plan
<PAGE> 2
CORAM HEALTHCARE CORPORATION
1994 STOCK OPTION/STOCK ISSUANCE PLAN
AS AMENDED JULY 28, 1994
ARTICLE ONE
GENERAL
I. PURPOSE OF THE PLAN
A. This 1994 Stock Option/Stock Issuance Plan (the "Plan") is intended to
promote the interests of Coram Healthcare Corporation, a Delaware corporation
(the "Corporation"), by providing (i) key employees (including officers) of the
Corporation (or its parent or subsidiary corporations) who are responsible for
the management, growth and financial success of the Corporation (or its parent
or subsidiary corporations), (ii) the non-employee members of the Corporation's
Board of Directors or the board of directors of any parent or subsidiary
corporation and (iii) those consultants and other independent contractors who
provide valuable services to the Corporation (or its parent or subsidiary
corporations) with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the service of the Corporation (or its parent
or subsidiary corporations).
B. The Plan shall be implemented in connection with the reorganization of
the Constituent Corporations to be effected pursuant to the Agreement and Plan
of Merger dated as of February 6, 1994, as amended as of May 25, 1994.
Pursuant to such reorganization, each of the Constituent Corporations shall
merge with a wholly-owned subsidiary of the Corporation and thereby become a
separate operating subsidiary of the Corporation, and all of the outstanding
shares of the common stock of each such Constituent Corporation shall be
converted into shares of the Corporation's common stock. The Plan shall become
effective immediately with the consummation of the mergers contemplated by such
reorganization, and the effective date of those mergers shall serve as the
Effective Date of the Plan.
II. DEFINITIONS
A. For purposes of the Plan, the following definitions shall be in effect:
BOARD: the Corporation's Board of Directors.
CHANGE IN CONTROL: a change in ownership or control of the Corporation
effected through either of the following transactions:
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<PAGE> 3
- the direct or indirect acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation)
of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's stockholders which the
Board does not recommend such stockholders to accept, or
- a change in the composition of the Board over a period of thirty-six
(36) months or less such that a majority of the Board members (rounded up to
the next whole number) ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (a) have been
Board members continuously since the beginning of such period or (b) have
been elected or nominated for election as Board members during such period by
at least a majority of the Board members described in clause (a) who were
still in office at the time such election or nomination was approved by the
Board.
CODE: the Internal Revenue Code of 1986, as amended.
COMMON STOCK: shares of the Corporation's common stock, par value $0.001
per share.
CONSTITUENT CORPORATIONS: Curaflex Health Services, Inc., a Delaware
corporation; HealthInfusion, Inc., a Florida corporation; Medisys, Inc., a
Delaware corporation, and T2 Medical, Inc., a Delaware corporation. Each of
the Constituent Corporations shall become a separate wholly-owned operating
subsidiary of the Corporation pursuant to the Agreement and Plan of Merger to
be submitted to stockholder approval at a special stockholders meeting to be
held separately by each Constituent Corporation on July 8, 1994.
CORPORATE TRANSACTION: any of the following stockholder-approved
transactions to which the Corporation is a party:
- a merger or consolidation in which the Corporation is not the surviving
entity, except for a transaction the principal purpose of which is to change
the state in which the Corporation is incorporated,
- the sale, transfer or other disposition of all or substantially all of
the assets of the Corporation (including the capital stock of the
Corporation's subsidiary corporations) in complete liquidation or dissolution
of the Corporation, or
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<PAGE> 4
- any reverse merger in which the Corporation is the surviving entity but
in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such merger.
EFFECTIVE DATE: the date on which each of the Constituent Corporations will
merge into a wholly-owned subsidiary of the Corporation in accordance with the
Agreement and Plan of Merger dated as of February 6, 1994, as amended as of May
25, 1994 is consummated.
EMPLOYEE: an individual who performs services while in the employ of the
Corporation or one or more parent or subsidiary corporations, subject to the
control and direction of the employer entity not only as to the work to be
performed but also as to the manner and method of performance.
EXERCISE DATE: the date on which the Corporation shall have received
written notice of the option exercise.
FAIR MARKET VALUE: the fair market value per share of Common Stock
determined in accordance with the following provisions:
- The Fair Market Value per share of Common Stock on any relevant date
under the Plan other than the Effective Date shall be the closing selling
price per share on the date in question on the New York Stock Exchange, as
such price is reported on the composite tape of transactions on such
exchange. If there is no reported closing selling price for the Common Stock
on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
- The Fair Market Value per share of Common Stock subject to any stock
option grants made under the Plan on the Effective Date shall be deemed to be
equal to the average closing selling price per share of the Common Stock on
the New York Stock Exchange for the five (5) consecutive trading day period
commencing with the Effective Date.
HOSTILE TAKE-OVER: a change in ownership of the Corporation effected through
the following transaction:
- the direct or indirect acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation)
of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined
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voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept, and
- more than fifty percent (50%) of the acquired securities are accepted
from holders other than the officers and directors of the Corporation subject
to the short-swing profit restrictions of Section 16 of the 1934 Act.
INCENTIVE OPTION: a stock option which satisfies the requirements of Code
Section 422.
INVOLUNTARY TERMINATION: the termination of the Service of any Optionee or
Participant which occurs by reason of:
- such individual's involuntary dismissal or discharge by the Corporation
for reasons other than Misconduct, or
- such individual's voluntary resignation following (i) a change in his or
her position with the Corporation which materially reduces his or her level
of responsibility, (B) a reduction in his or her level of compensation
(including base salary, fringe benefits and any non- discretionary and
objective-standard incentive payment or bonus award) by more than five
percent (5%) or (C) a relocation of such individual's place of employment by
more than fifty (50) miles, provided and only if such change, reduction or
relocation is effected by the Corporation without the individual's consent.
MISCONDUCT: the commission of any act of fraud, embezzlement or dishonesty
by the Optionee or Participant, any unauthorized use or disclosure by such
individual of confidential information or trade secrets of the Corporation or
its parent or subsidiary corporations, or any other intentional misconduct by
such individual adversely affecting the business or affairs of the Corporation
in a material manner. The foregoing definition shall not be deemed to be
inclusive of all the acts or omissions which the Corporation or any parent or
subsidiary may consider as grounds for the dismissal or discharge of any
Optionee, Participant or other individual in the Service of the Corporation.
NEWLY ISSUED SHARES: shares of Common Stock drawn from the Corporation's
authorized but unissued shares of Common Stock.
1934 ACT: the Securities and Exchange Act of 1934, as amended.
NON-STATUTORY OPTION: a stock option not intended to meet the requirements
of Code Section 422.
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OPTIONEE: any person to whom an option is granted under the Discretionary
Option Grant or Automatic Option Grant Program in effect under the Plan.
PARTICIPANT: any person who receives a direct issuance of Common Stock
under the Stock Issuance Program in effect under the Plan.
PERMANENT DISABILITY OR PERMANENTLY DISABLED: the inability of the Optionee
or Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to result in
death or to be of continuous duration of twelve (12) months or more.
PLAN ADMINISTRATOR: the particular entity, whether the Primary Committee,
any secondary committee or the Board, which is authorized (either pursuant to
the express provisions of the Plan or by resolution of the Board) to exercise
administrative discretion under the Discretionary Option Grant and Stock
Issuance Programs with respect to one or more classes of eligible individuals,
to the extent such entity is acting within the scope of its administrative
authority under such programs with respect to those individuals over which it
has jurisdiction.
PRIMARY COMMITTEE: a committee of two (2) or more non-employee Board members
appointed by the Board.
SERVICE: the provision of services on a periodic basis to the Corporation
(or any parent or subsidiary corporation) in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant or
advisor, except to the extent otherwise specifically provided in the applicable
stock option or stock issuance agreement.
TAKE-OVER PRICE: the greater of (i) the Fair Market Value per share of
Common Stock on the date the option is surrendered to the Corporation in
connection with a Hostile Take-Over or (ii) the highest reported price per
share of Common Stock paid by the tender offeror in effecting such Hostile
Take-Over. However, if the surrendered option is an Incentive Option, the
Take-Over Price shall not exceed the clause (i) price per share.
TREASURY SHARES: shares of Common Stock reacquired by the Corporation and
held as treasury shares.
B. The following provisions shall be applicable in determining the parent
and subsidiary corporations of the Corporation:
Any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation shall be considered to be a PARENT
of the Corporation, provided each such corporation in the unbroken
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chain (other than the Corporation) owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in any other corporation in such chain.
Each corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation shall be considered to be a
SUBSIDIARY of the Corporation, provided each such corporation (other than the
last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in any other corporation in
such chain.
III. STRUCTURE OF THE PLAN
A. Stock Programs. The Plan shall be divided into four separate components:
- The Discretionary Option Grant Program, under which eligible individuals
may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock in accordance with the provisions of Article
Two.
- The Automatic Option Grant Program, under which non-employee Board
members shall automatically receive special option grants at periodic
intervals to purchase shares of Common Stock in accordance with the
provisions of Article Three.
- The Stock Issuance Program, under which eligible individuals may be
issued shares of Common Stock directly, either through the immediate purchase
of such shares at a price not less than eighty-five percent (85%) of their
Fair Market Value at the time of issuance or as a bonus tied to the
performance of services or the Corporation's attainment of financial
objectives.
B. General Provisions. Unless the context clearly indicates otherwise, the
provisions of Articles One and Six shall apply to the Discretionary Option
Grant, Automatic Option Grant and Stock Issuance Programs and shall accordingly
govern the interests of all individuals under the Plan.
IV. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered in accordance with the following
provisions:
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- The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to those individuals subject to the short-swing profit restrictions
of the Federal securities laws. No Board member shall be eligible to serve
on the Primary Committee if such individual has, within the twelve (12)-month
period immediately preceding the date such individual is to be appointed to
the Primary Committee, received an option grant or stock issuance under this
Plan or any other stock option, stock appreciation, stock bonus or other
stock plan of the Corporation (or any parent or subsidiary corporation),
other than pursuant to the Automatic Option Grant Program specified in
Article Three or any similar automatic option grant programs in effect for
the non-employee directors of the Constituent Corporations prior to the
Effective Date.
- Administration of the Discretionary Option Grant and Stock Issuance
Programs with respect to all other individuals eligible to participate in
those programs may, at the Board's discretion, be vested in the Primary
Committee or a secondary committee of two (2) or more Board members appointed
by the Board, or the Board may retain the power to administer those programs
with respect to all individuals who are not subject to the short-swing profit
restrictions of the Federal securities laws. The membership of any secondary
committee may include Board members who are Employees eligible to receive
option grants or stock issuances under this Plan or any other stock option,
stock appreciation, stock bonus or other stock plan of the Corporation (or
any parent or subsidiary corporation).
- Members of the Primary Committee or any secondary committee shall
serve for such period as the Board may determine and shall be subject to
removal by the Board at any time. The Board may also at any time reassume
all administrative powers and authority delegated under the Plan to any
secondary committee appointed by the Board.
B. The Plan Administrator shall, within the scope of its administrative
authority under the Plan, have full power and discretion (subject to the
express provisions of the Plan) to establish such rules and regulations as it
may deem appropriate for the proper administration of the Discretionary Option
Grant and Stock Issuance Programs and to make such determinations under, and
issue such interpretations of, the provisions of each such program and any
outstanding option grants or stock issuances thereunder as it may deem
necessary or advisable. Decisions of the Plan Administrator within the scope
of its administrative authority under the Plan, shall be final and binding on
all parties who have an interest in the Discretionary Option Grant or Stock
Issuance Program or any outstanding option or stock issuance thereunder.
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C. Service on the Primary Committee or the secondary committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of either committee
shall be liable for any act or omission made in good faith with respect to the
Plan or any option granted or shares issued under the Plan.
D. Administration of the Automatic Option Grant shall be self-executing in
accordance with the express terms and conditions of Article Three,
respectively, and no Plan Administrator shall exercise any discretionary
functions with respect to the option grants made pursuant to such programs.
V. OPTION GRANTS AND STOCK ISSUANCES
A. The persons eligible to participate in the Discretionary Option Grant
Program under Article Two and the Stock Issuance Program under Article Five are
as follows:
- officers and other key employees of the Corporation (or its parent or
subsidiary corporations) who render services which contribute to the
management, growth and financial success of the Corporation (or its parent or
subsidiary corporations);
- non-employee members of the board of directors of any parent or
subsidiary corporations, provided such individuals do not concurrently serve
as members of the Board; and
- those consultants or other independent contractors who provide
valuable services to the Corporation (or its parent or subsidiary
corporations).
B. Non-employee Board members shall not be eligible to participate in the
Discretionary Option Grant or Stock Issuance Program or in any other stock
option, stock purchase, stock bonus or other stock plan of the Corporation (or
its parent or subsidiary corporations). Such non- employee Board members shall
be eligible to receive automatic option grants under Article Three; however,
Mr. Carter shall on the Effective Date receive the option grant which the Board
has authorized for him under Article Four in lieu of the initial automatic
option grant provided under Article Three.
C. The Plan Administrator shall have full authority to determine, (i) with
respect to the option grants made under the Discretionary Option Grant Program,
which eligible individuals are to receive option grants, the number of shares
to be covered by each such grant, the status of the granted option as either an
Incentive Option or a Non-Statutory Option, the time or times at which each
granted option is to become exercisable and the
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maximum term for which the option may remain outstanding and (ii), with respect
to stock issuances under the Stock Issuance Program, which eligible individuals
are to be selected for participation, the number of shares to be issued to each
selected individual, the vesting schedule (if any) to be applicable to the
issued shares and the consideration to be paid for such shares.
VI. STOCK SUBJECT TO THE PLAN
A. Shares of Common Stock shall be available for issuance under the Plan
and shall be drawn from either the Corporation's authorized but unissued shares
of Common Stock or from reacquired shares of Common Stock, including shares
repurchased by the Corporation on the open market. The maximum number of
shares of Common Stock which may be issued over the term of the Plan shall not
exceed 7,600,000 shares, subject to adjustment from time to time in accordance
with the provisions of this Section VI.
B. In no event may the aggregate number of shares of Common Stock for which
any one individual participating in the Plan may be granted stock options,
separately exercisable stock appreciation rights and direct stock issuances
exceed 5,000,000 shares over the term of the Plan.
C. Should one or more outstanding options under the Plan expire or
terminate for any reason prior to exercise in full (including any option
cancelled in accordance with the cancellation-regrant provisions of Section IV
of Article Two), then the shares subject to the portion of each option not so
exercised shall be available for subsequent issuance under the Plan. Shares
subject to any option or portion thereof surrendered in accordance with the
stock appreciation right provisions of the Plan and all share issuances under
the Plan, whether or not the shares are subsequently repurchased by the
Corporation pursuant to its repurchase rights under the Plan, shall reduce on a
share-for-share basis the number of shares of Common Stock available for
subsequent issuance under the Plan. In addition, should the exercise price of
an outstanding option under the Plan be paid with shares of Common Stock or
should shares of Common Stock otherwise issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding taxes incurred in connection
with the exercise of an outstanding option under the Plan or the vesting of a
share issuance under the Plan, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the gross number of
shares for which the option is exercised or which vest under the share
issuance, and not by the net number of shares of Common Stock actually issued
to the holder of such option or share issuance.
D. Should any change be made to the Common Stock issuable under the Plan by
reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, then
appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the
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maximum number and/or class of securities for which any one individual
participating in the Plan may be granted stock options, separately exercisable
stock appreciation rights and direct stock issuances in the aggregate over the
term of the Plan, (iii) the number and/or class of securities for which
automatic option grants are to be subsequently made per newly elected or
continuing non-employee Board member under the Automatic Option Grant Program
and (iv) the number and/or class of securities and price per share in effect
under each option outstanding under the Plan. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
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ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Discretionary Option Grant Program shall be
authorized by action of the Plan Administrator and may, at the Plan
Administrator's discretion, be either Incentive Options or Non-Statutory
Options. Individuals who are not Employees may only be granted Non-Statutory
Options. Each granted option shall be evidenced by one or more instruments in
the form approved by the Plan Administrator; provided, however, that each such
instrument shall comply with the terms and conditions specified below. Each
instrument evidencing an Incentive Option shall, in addition, be subject to the
applicable provisions of Section II of this Article Two.
A. Exercise Price.
1. The exercise price per share under this Article Two shall be fixed by
the Plan Administrator in accordance with the following provisions:
The exercise price per share of Common Stock subject to an Incentive
Option shall in no event be less than one hundred percent (100%) of the Fair
Market Value of such Common Stock on the grant date.
The exercise price per share of Common Stock subject to a Non-Statutory
Option shall in no event be less than eighty-five percent (85%) of the Fair
Market Value of such Common Stock on the grant date.
2. The exercise price shall become immediately due upon exercise of the
option and, subject to the provisions of Section I of Article Six and the
instrument evidencing the grant, shall be payable in one of the alternative
forms specified below:
(i) full payment in cash or check made payable to the Corporation's order,
(ii) full payment in shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date,
(iii) full payment in a combination of shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date and cash or check made payable to the Corporation's order, or
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(iv) to the extent the option is exercised for vested shares, full payment
through a broker-dealer sale and remittance procedure pursuant to which the
Optionee shall provide concurrent irrevocable written instructions (I) to a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation in connection with such purchase and (II) to the Corporation to
deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
B. Term and Exercise of Options. Each option granted under this Article
Two shall be exercisable at such time or times, during such period and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the instrument evidencing such option. No granted option shall, however,
have a maximum term in excess of ten (10) years. During the lifetime of the
Optionee, the option, together with any stock appreciation rights pertaining to
such option, shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by transfer of the option effected by
will or by the laws of descent and distribution following the Optionee's death.
C. Termination of Service.
1. Should an Optionee cease Service for any reason (including death or
Permanent Disability) while holding one or more outstanding options under this
Article Two, then none of those options shall (except to the extent otherwise
provided pursuant to subparagraph 7 below) remain exercisable for more than a
thirty-six (36)-month period (or such shorter period determined by the Plan
Administrator and set forth in the instrument evidencing the grant) measured
from the date of such cessation of Service.
2. Any option held by the Optionee under this Article Two and exercisable
in whole or in part on the date of his or her death may be subsequently
exercised by the personal representative of the Optionee's estate or by the
person or persons to whom the option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution. However, the
right to exercise such option shall lapse upon the earlier of (i) the third
anniversary of the date of the Optionee's death (or such shorter period
determined by the Plan Administrator and set forth in the instrument evidencing
the grant) or (ii) the specified expiration date of the option term.
Accordingly, upon the occurrence of the earlier event, the option shall
terminate and cease to remain outstanding.
3. Under no circumstances shall any such option be exercisable after the
specified expiration date of the option term.
4. During the applicable post-Service exercise period, the option may not
be exercised in the aggregate for more than the number of shares (if any) in
which the
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Optionee is vested at the time of his or her cessation of Service. Upon the
expiration of the limited post-Service exercise period or (if earlier) upon the
specified expiration date of the option term, each such option shall terminate
and cease to remain outstanding with respect to any vested shares for which the
option has not otherwise been exercised. However, each outstanding option
shall immediately terminate and cease to remain outstanding, at the time of the
Optionee's cessation of Service, with respect to any shares for which the
option is not otherwise at that time exercisable or in which the Optionee is
not otherwise vested.
5. Should the Optionee's Service be terminated for Misconduct, all
outstanding options held by the Optionee under this Article Two shall terminate
immediately and cease to remain outstanding.
6. The Plan Administrator shall have complete discretion, exercisable
either at the time the option is granted or at any time while the option
remains outstanding, to permit one or more options held by the Optionee under
this Article Two to be exercised, during the limited post- Service exercise
period applicable under this Section I.C, not only with respect to the number
of vested shares of Common Stock for which each such option is exercisable at
the time of the Optionee's cessation of Service but also with respect to one or
more subsequent installments of vested shares for which the option would
otherwise have become exercisable had such cessation of Service not occurred.
7. The Plan Administrator shall have full power and authority, exercisable
either at the time the option is granted or at any time while the option
remains outstanding, to extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service or death from
the limited period in effect under subparagraphs 1 and 2 above to such greater
period of time as the Plan Administrator shall deem appropriate. In no event,
however, shall such option be exercisable after the specified expiration date
of the option term.
D. Stockholder Rights. An Optionee shall have none of the rights of a
stockholder with respect to any option shares until such individual shall have
exercised the option and paid the exercise price for the purchased shares.
E. Repurchase Rights. The shares of Common Stock acquired under this
Article Two may be subject to repurchase by the Corporation in accordance with
the following provisions:
1. The Plan Administrator shall have the discretion to grant options for
unvested shares of Common Stock under this Article Two. Should the Optionee
cease Service while holding any unvested shares purchased under such options,
then the Corporation shall have the right to repurchase any or all of those
unvested shares at the exercise price paid per share. The terms and conditions
upon which such repurchase right shall be exercisable (including the period and
procedure for exercise and the appropriate
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vesting schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the instrument evidencing such repurchase right.
2. All of the Corporation's outstanding repurchase rights under this
Article Two shall automatically terminate, and all shares subject to such
terminated rights shall immediately vest in full, upon the occurrence of a
Corporate Transaction, except to the extent: (i) any such repurchase right is
expressly assigned to the successor corporation (or parent thereof) in
connection with the Corporate Transaction or (ii) such accelerated vesting is
precluded by other limitations imposed by the Plan Administrator at the time
the repurchase right is issued. However, to the extent any of the
Corporation's repurchase rights with respect to the unvested shares held by an
Optionee are assigned in the Corporate Transaction pursuant to clause (i)
above, those repurchase rights shall subsequently terminate, and all the shares
subject to the terminated rights shall immediately vest in full, upon the
Involuntary Termination of the Optionee's Service (other than for Misconduct)
within eighteen (18) months after the effective date of the Corporate
Transaction.
3. The Plan Administrator shall have the discretionary authority,
exercisable either before or after the Optionee's cessation of Service, to
cancel the Corporation's outstanding repurchase rights with respect to one or
more shares purchased or purchasable by the Optionee under this Article Two and
thereby accelerate the vesting of such shares in whole or in part at any time.
II. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to all
Incentive Options granted under this Article Two. Incentive Options may only
be granted to individuals who are Employees. Options which are specifically
designated as Non-Statutory Options when issued under the Plan shall not be
subject to such terms and conditions.
A. Dollar Limitation. The aggregate Fair Market Value (determined as of
the respective date or dates of grant) of the Common Stock for which one or
more options granted to any Employee under this Plan (or any other option plan
of the Corporation or its parent or subsidiary corporations) may for the first
time become exercisable as incentive stock options under the Federal tax laws
during any one calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000). To the extent the Employee holds two (2) or more such
options which become exercisable for the first time in the same calendar year,
the foregoing limitation on the exercisability of such options as incentive
stock options under the Federal tax laws shall be applied on the basis of the
order in which such options are granted. Should the number of shares of Common
Stock for which any Incentive Option first becomes exercisable in any calendar
year exceed the applicable One Hundred Thousand Dollar ($100,000) limitation,
then the option may nevertheless be exercised in that calendar year for the
excess number of shares as a non- statutory option under the Federal tax laws.
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B. 10% Stockholder. If any individual to whom an Incentive Option is
granted is the owner of stock (as determined under Section 424(d) of the Code)
possessing ten percent (10%) or more of the total combined voting power of all
classes of stock of the Corporation or any one of its parent or subsidiary
corporations, then the exercise price per share shall not be less than one
hundred ten percent (110%) of the Fair Market Value per share of Common Stock
on the grant date and the option term shall not exceed five (5) years measured
from the grant date.
Except as modified by the preceding provisions of this Section II, the
provisions of Articles One, Two and Six shall apply to all Incentive Options
granted hereunder.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each option which is at the
time outstanding under this Article Two shall automatically accelerate so that
each such option shall, immediately prior to the specified effective date for
such Corporate Transaction, become fully exercisable with respect to the total
number of shares of Common Stock at the time subject to such option and may be
exercised for all or any portion of such shares. However, an outstanding
option under this Article Two shall not so accelerate if and to the extent:
(i) such option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation or parent thereof or to be replaced with a
comparable option to purchase shares of the capital stock of the successor
corporation or parent thereof, (ii) such option is to be replaced with a cash
incentive program of the successor corporation which preserves the option
spread existing at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same vesting schedule applicable to
such option or (iii) the acceleration of such option is subject to other
limitations imposed by the Plan Administrator at the time of the option grant.
However, upon an Optionee's cessation of Service by reason of an Involuntary
Termination (other than for Misconduct) within eighteen (18) months after a
Corporate Transaction in which his or her outstanding options are assumed or
replaced pursuant to clause (i) above, each such option shall automatically
accelerate and become fully exercisable with respect to the total number of
shares of Common Stock at the time subject to such option and may be exercised
for all or any portion of such shares. The option as so accelerated shall
remain exercisable until the earlier of (i) the expiration of the option term
or (ii) the expiration of the one (1)-year period measured from the date of
such Involuntary Termination. The determination of option comparability under
clause (i) above shall be made by the Plan Administrator, and its determination
shall be final, binding and conclusive.
B. Immediately following the consummation of the Corporate Transaction, all
outstanding options under this Article Two shall terminate and cease to remain
outstanding, except to the extent assumed by the successor corporation or its
parent company.
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C. Each outstanding option under this Article Two that is assumed in
connection with the Corporate Transaction or is otherwise to continue in effect
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply and pertain to the number and class of securities which would have
been issued to the option holder, in consummation of such Corporate
Transaction, had such person exercised the option immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to the
exercise price payable per share, provided the aggregate exercise price payable
for such securities shall remain the same. In addition, the class and number
of securities available for issuance under the Plan on both an aggregate and
participant basis following the consummation of the Corporate Transaction shall
be appropriately adjusted.
D. The Plan Administrator shall have the discretionary authority,
exercisable either in advance of any actually anticipated Change in Control or
at the time of an actual Change in Control, to provide for the automatic
acceleration of one or more outstanding options under this Article Two (and the
termination of one or more of the Corporation's outstanding repurchase rights
under this Article Two) upon the occurrence of the Change in Control. The Plan
Administrator shall also have full power and authority to condition any such
option acceleration (and the termination of any outstanding repurchase rights)
upon the subsequent termination of the Optionee's Service within a specified
period following the Change in Control.
E. Any options accelerated in connection with the Change in Control shall
remain fully exercisable until the expiration or sooner termination of the
option term or the surrender of such option in accordance with Section V of
this Article Two.
F. The grant of options under this Article Two shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
G. The portion of any Incentive Option accelerated under this Section III
in connection with a Corporate Transaction or Change in Control shall remain
exercisable as an incentive stock option under the Federal tax laws only to the
extent the dollar limitation of Section II of this Article Two is not exceeded.
To the extent such dollar limitation is exceeded, the accelerated portion of
such option shall be exercisable as a non-statutory option under the Federal
tax laws.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Primary Committee shall have the sole and exclusive authority to effect,
at any time and from time to time, with the consent of the affected Optionees,
the cancellation of any or all outstanding options under this Article Two and
to grant in substitution new options under the Plan covering the same or
different numbers of shares
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of Common Stock but with an exercise price per share based upon the Fair
Market Value of the Common Stock on the new grant date.
V. STOCK APPRECIATION RIGHTS
A. One or more Optionees may be granted the right, exercisable upon such
terms and conditions as the Plan Administrator may establish, to surrender all
or part of an unexercised option under this Article Two in exchange for a
distribution from the Corporation in an amount equal to the excess of (i) the
Fair Market Value (on the option surrender date) of the number of shares in
which the Optionee is at the time vested under the surrendered option (or
surrendered portion thereof) over (ii) the aggregate exercise price payable for
such vested shares.
B. No such option surrender shall be effective unless it is approved by the
Plan Administrator. If the surrender is so approved, then the distribution to
which the Optionee shall accordingly become entitled under this Section V may
be made in shares of Common Stock valued at Fair Market Value on the option
surrender date, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.
C. If the surrender of an option is rejected by the Plan Administrator,
then the Optionee shall retain whatever rights the Optionee had under the
surrendered option (or surrendered portion thereof) on the option surrender
date and may exercise such rights at any time prior to the later of (i) five
(5) business days after the receipt of the rejection notice or (ii) the last
day on which the option is otherwise exercisable in accordance with the terms
of the instrument evidencing such option, but in no event may such rights be
exercised more than ten (10) years after the date of the option grant.
D. One or more officers of the Corporation subject to the short-swing
profit restrictions of the Federal securities laws may, in the Primary
Committee's sole discretion, be granted limited stock appreciation rights in
tandem with their outstanding options under this Article Two. Upon the
occurrence of a Hostile Take-Over, each such officer holding one or more
options with such a limited stock appreciation right in effect for at least six
(6) months shall have the unconditional right (exercisable for a thirty
(30)-day period following such Hostile Take- Over) to surrender each such
option to the Corporation, to the extent the option is at the time exercisable
for fully vested shares of Common Stock. The officer shall in return be
entitled to a cash distribution from the Corporation in an amount equal to the
excess of (i) the Take- Over Price of the vested shares of Common Stock at the
time subject to each surrendered option (or surrendered portion of such option)
over (ii) the aggregate exercise price payable for such vested shares. Such
cash distribution shall be made within five (5) days following the option
surrender date. Neither the approval of the Plan Administrator nor the consent
of the Board shall be required in connection with such option surrender and
cash distribution. Any unsurrendered portion of the option shall
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continue to remain outstanding and become exercisable in accordance with the
terms of the instrument evidencing such grant.
E. The shares of Common Stock subject to any option surrendered for an
appreciation distribution pursuant to this Section V shall NOT be available for
subsequent issuance under the Plan.
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ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
I. ELIGIBILITY
A. Eligible Optionees. The individuals eligible to receive automatic
option grants pursuant to the provisions of this Article Three shall be limited
to (i) those individuals who are serving as non-employee Board members on July
28, 1994 (other than Tommy H. Carter), (ii) those individuals who are first
elected or appointed as non-employee Board members after July 28, 1994, whether
through appointment by the Board or election by the Corporation's stockholders,
and (iii) those individuals who continue to serve as non-employee Board members
at one or more Annual Stockholder Meetings beginning with the 1995 Annual
Meeting. Any non-employee Board member eligible to participate in the
Automatic Option Grant Program pursuant to the foregoing criteria shall be
designated an Eligible Director for purposes of this Article Three.
B. Limitation. Except for the option grants to be made pursuant to the
provisions of this Automatic Option Grant Program and the special option grant
to be made to Mr. Carter under Article Four, non-employee Board members shall
not be eligible to receive any additional option grants or stock issuances
under this Plan or any other stock plan of the Corporation (or its parent or
subsidiaries).
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. Grant Dates. Option grants shall be made under this Article Three on
the dates specified below:
1. Each individual serving as an Eligible Director on July 28, 1994 (other
than Tommy H. Carter) shall automatically be granted on such date a
Non-Statutory Option to purchase 75,000 shares of Common Stock upon the terms
and conditions of this Article Three.
2. Each individual who first becomes an Eligible Director after July 28,
1994, whether through election by the Corporation's stockholders or appointment
by the Board, shall automatically be granted, at the time of such initial
election or appointment, a Non-Statutory Option to purchase 75,000 shares of
Common Stock upon the terms and conditions of this Article Three.
3. On the date of each Annual Stockholders Meeting held after the Effective
Date, beginning with the 1995 Annual Meeting, each individual who is thereafter
to continue to serve as an Eligible Director, whether or not such individual is
standing for re-election as a Board member at that particular meeting, shall
automatically be granted a Non-Statutory Option to purchase an additional 2,500
shares of Common Stock upon the
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terms and conditions of this Article Three, provided such individual has
served as a Board member for at least six (6) months.
B. No Limitation. There shall be no limit on the number of such
2,500-share annual option grants any one Eligible Director may receive over his
or her period of Board service. The number of shares for which the automatic
option grants are to be made to newly elected or continuing Eligible Directors
shall be subject to periodic adjustment pursuant to the applicable provisions
of Section VI.E. of Article One.
C. Exercise Price. The exercise price per share of Common Stock of each
automatic option grant made under this Article Three shall be equal to one
hundred percent (100%) of the Fair Market Value per share of Common Stock on
the automatic grant date.
D. Payment. The exercise price shall be payable in one of the alternative
forms specified in Section I.A.2 of Article Two. To the extent the option is
exercised for any unvested shares, the Optionee must execute and deliver to the
Corporation a stock purchase agreement for those unvested shares which provides
the Corporation with the right to repurchase, at the exercise price paid per
share, any unvested shares held by the Optionee at the time of cessation of
Board service and which precludes the sale, transfer or other disposition of
any shares purchased under the option, to the extent those shares are subject
to the Corporation's repurchase right.
E. Option Term. Each automatic grant under this Article Three shall have a
maximum term of ten (10) years measured from the automatic grant date.
F. Exercisability/Vesting. Each automatic grant shall be immediately
exercisable for any or all of the option shares. However, any shares purchased
under the option shall be subject to repurchase by the Corporation, at the
exercise price paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares in accordance with the applicable schedule
below:
- Each initial 75,000-share automatic grant shall vest, and the
Corporation's repurchase right shall lapse, with respect to (i) twenty- five
percent (25%) of the option shares upon the Optionee's completion of one (1)
year of Board service measured from the automatic grant date and (ii) the
balance of the option shares in equal successive monthly installments over the
next thirty-six (36) months of continued Board service thereafter.
- Each additional 2,500-share automatic grant shall vest, and the
Corporation's repurchase right shall lapse, in a series of twelve (12) equal
and successive monthly installments over the Optionee's period of continued
service as a Board member, with the first such installment to vest upon the
Optionee's completion of one (1) month of Board service measured from the
automatic grant date.
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Vesting of the option shares shall be subject to acceleration as provided in
Section II.H.3 and Section III of this Article Three. In no event shall any
additional option shares vest after the Optionee's cessation of Board service,
except as otherwise provided pursuant to Section II.H.3 of this Article Three.
G. Non-Transferability. During the lifetime of the Optionee, the automatic
option grant, together with the limited stock appreciation right pertaining to
such option, shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by transfer of the option effected by
will or by the laws of descent and distribution following the Optionee's death.
H. Termination of Board Service.
1. Should the Optionee cease to serve as a Board member for any reason
(other than death or Permanent Disability) while holding one or more automatic
option grants under this Article Three, then such individual shall have a six
(6)-month period following the date of such cessation of Board service in which
to exercise each such option for any or all of the option shares in which the
Optionee is vested at the time of such cessation of Board service. However,
each such option shall immediately terminate and cease to remain outstanding,
at the time of such cessation of Board service, with respect to any option
shares in which the Optionee is not otherwise at that time vested under such
option.
2. Should the Optionee die within six (6) months after cessation of Board
service, then any automatic option grant held by the Optionee at the time of
death may subsequently be exercised, for any or all of the option shares in
which the Optionee is vested at the time of his or her cessation of Board
service (less any option shares subsequently purchased by the Optionee prior to
death), by the personal representative of the Optionee's estate or by the
person or persons to whom the option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution. The right to
exercise each such option shall lapse upon the expiration of the twelve
(12)-month period measured from the date of the Optionee's death.
3. Should the Optionee die or become Permanently Disabled while serving as
a Board member, then the shares of Common Stock at the time subject to each
automatic option grant held by the Optionee shall immediately vest in full (and
the Corporation's repurchase right with respect to such shares shall
terminate), and the Optionee (or the representative of the Optionee's estate or
the person or persons to whom the option is transferred upon the Optionee's
death) shall have a twelve (12)-month period following the date of the
Optionee's cessation of Board service in which to exercise such option for any
or all of those vested shares of Common Stock.
4. In no event shall any automatic grant under this Article Three remain
exercisable after the expiration date of the ten (10)-year option term. Upon
the expiration
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of the applicable post-service exercise period under subparagraphs 1 through 3
above or (if earlier) upon the expiration of the ten (10)-year option term, the
automatic grant shall terminate and cease to be outstanding for any option
shares in which the Optionee was vested at the time of his or her cessation of
Board service but for which such option was not otherwise exercised.
I. Stockholder Rights. The holder of an automatic option grant under
this Article Three shall have none of the rights of a stockholder with respect
to any shares subject to that option until such individual shall have exercised
the option and paid the exercise price for the purchased shares.
J. Remaining Terms. The remaining terms and conditions of each automatic
option grant shall be as set forth in the form Automatic Stock Option Agreement
attached as Exhibit A to the Plan.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the shares of Common Stock at
the time subject to each outstanding option under this Article Three but not
otherwise vested shall automatically vest in full and the Corporation's
repurchase right with respect to those shares shall terminate, so that each
such option shall, immediately prior to the specified effective date for the
Corporate Transaction, become fully exercisable for all of the shares of Common
Stock at the time subject to that option and may be exercised for all or any
portion of such shares as fully vested shares of Common Stock. Each such
outstanding option shall be assumed by the successor corporation and remain
fully exercisable until the expiration or sooner termination of the option
term, whether or not the Optionee continues in Board service.
B. In connection with any Change in Control of the Corporation, the shares
of Common Stock at the time subject to each outstanding option under this
Article Three but not otherwise vested shall automatically vest in full and the
Corporation's repurchase right with respect to those shares shall terminate, so
that each such option shall, immediately prior to the specified effective date
for the Change in Control, become fully exercisable for all of the shares of
Common Stock at the time subject to that option and may be exercised for all or
any portion of such shares as fully vested shares of Common Stock. Each option
shall remain so exercisable until the expiration or sooner termination of the
option term, whether or not the Optionee continues in Board service.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall have a
thirty (30)-day period in which to surrender to the Corporation each option
held by him or her under this Article Three for a period of at least six (6)
months. The Optionee shall in return be entitled to a cash distribution from
the Corporation in an amount equal to the excess of (i) the Take-Over Price of
the shares of Common Stock at the time subject to the
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surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such
shares. Such cash distribution shall be paid within five (5) days following
the surrender of the option to the Corporation. Neither the approval of the
Plan Administrator nor the consent of the Board shall be required in connection
with such option surrender and cash distribution. The shares of Common Stock
subject to each option surrendered in connection with the Hostile Take-Over
shall NOT be available for subsequent issuance under the Plan.
D. The automatic option grants outstanding under this Article Three shall
in no way affect the right of the Corporation to adjust, reclassify, reorganize
or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
IV. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS
The provisions of this Automatic Option Grant Program, together with the
automatic option grants outstanding under this Article Three, may not be
amended at intervals more frequently than once every six (6) months, other than
to the extent necessary to comply with applicable Federal income tax laws and
regulations.
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ARTICLE FOUR
INITIAL OPTION GRANTS
I. INITIAL OPTION GRANTS
The Board hereby authorizes the grant of a Non-Statutory Option to each of
the following individuals to purchase the number of shares of Common Stock
specified below for him upon the terms and conditions of this Article Four.
Each grant hereby authorized shall be made pursuant to the provisions of the
Discretionary Option Grant Program and shall become effective (i) with respect
to Tommy H. Carter, on July 28, 1994, provided that he continues in service
with the Corporation until such date, (ii) with respect to Charles A. Laverty,
on July 28, 1994, provided that he has not voluntarily terminated his
employment with the Corporation, and (iii) with respect to James M. Sweeney, on
July 28, 1994, provided that he continues in service with the Corporation until
such date.
<TABLE>
<CAPTION>
Individual Number of Option Shares
---------- -----------------------
<S> <C>
Tommy H. Carter 94,500 shares
Charles A. Laverty 100,000 shares
James M. Sweeney 3,000,000 shares
</TABLE>
II. TERMS AND CONDITIONS OF INITIAL OPTION GRANTS
A. Exercise Price. The exercise price per share of Common Stock subject to
each option grant made pursuant to this Article Four shall be equal to one
hundred percent (100%) of the Fair Market Value per share of Common Stock on
the date of grant.
B. Option Term. Each such option grant shall have a maximum term of ten
(10) years measured from the July 28, 1994 grant date.
C. Exercisability. The option grant to Tommy Carter shall become
exercisable for the shares of Common Stock subject to that grant in a series of
successive equal annual installments upon Mr. Carter's completion of each year
of Board service over the three (3)-year period measured from the July 28, 1994
grant date. The option grant to Charles A. Laverty shall be immediately
exercisable for any or all of the option shares as fully-vested shares of
Common Stock. The option grant to James M. Sweeney shall be immediately
exercisable for any or all of the option shares. However, any shares purchased
under such option shall be subject to repurchase by the Corporation, at the
exercise price paid per share, upon Mr. Sweeney's cessation of Service prior to
vesting in those shares. The option shall vest with respect to (i) twenty-
five percent (25%) of the option shares upon Mr. Sweeney's completion of one
(1) year of Service measured from the Effective Date and (ii) the balance of
the option shares in equal successive monthly installments over the next
thirty-six (36) months of continued Service thereafter.
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D. Remaining Terms. The remaining terms and conditions of the option
grants to Messrs. Carter. Laverty and Sweeney shall be substantially the same
as those in effect for all other option grants to be made under the
Discretionary Option Grant Program and shall be as set forth in the Special
Stock Option Agreements attached to the Plan as Exhibit B (for Mr. Carter),
Exhibit C (for Mr. Laverty) and Exhibit D (for Mr. Sweeney). In the event the
Plan is not approved by the stockholders of each of the Constituent
Corporations prior to the Effective Date, the option grants authorized under
this Article Four shall not become effective.
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ARTICLE FIVE
STOCK ISSUANCE PROGRAM
I. TERMS AND CONDITIONS OF STOCK ISSUANCES
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate purchases without any intervening stock option
grants. The issued shares shall be evidenced by a Stock Issuance Agreement
("Issuance Agreement") that complies with the terms and conditions of this
Article Five.
A. Consideration
1. Newly Issued Shares shall be issued under the Stock Issuance Program for
one or more of the following items of consideration that the Plan Administrator
may deem appropriate in each individual instance:
(i) full payment in cash or check made payable to the Corporation's order,
(ii) a promissory note payable to the Corporation's order in one or more
installments, which may be subject to cancellation in whole or in part upon
terms and conditions established by the Plan Administrator, or
(iii) past services rendered to the Corporation or any parent or subsidiary
corporation.
2. Newly Issued Shares may, in the absolute discretion of the Plan
Administrator, be issued for consideration with a value less than one hundred
percent (100%) of the Fair Market Value of such shares at the time of issuance,
but in no event less than eighty-five percent (85%) of such Fair Market Value.
3. Treasury Shares may be issued under the Stock Issuance Program for such
consideration (including one or more of the items of consideration specified in
subparagraph 1 above) as the Plan Administrator may deem appropriate, whether
such consideration is in an amount less than, equal to or greater than the Fair
Market Value of the Treasury Shares at the time of issuance. Treasury Shares
may, in lieu of any cash consideration, be issued subject to such vesting
requirements tied to the Participant's period of future Service or the
Corporation's attainment of specified performance objectives as the Plan
Administrator may establish at the time of issuance.
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B. Vesting Provisions
1. The shares of Common Stock issued under the Stock Issuance Program
(other than shares issued in lieu of salary) may, in the absolute discretion of
the Plan Administrator, be fully and immediately vested upon issuance or may
vest in installments over the Participant's period of Service. The elements of
the vesting schedule applicable to any unvested shares of Common Stock issued
under the Stock Issuance Program, namely:
(i) the Service period to be completed by the Participant or the performance
objectives to be achieved by the Corporation,
(ii) the number of installments in which the shares are to vest,
(iii) the interval or intervals (if any) which are to lapse between
installments, and
(iv) the effect which death, Permanent Disability or other event designated
by the Plan Administrator is to have upon the vesting schedule,
shall be determined by the Plan Administrator and incorporated into the
Issuance Agreement executed by the Corporation and the Participant at the time
such unvested shares are issued.
2. The Participant shall have full stockholder rights with respect to any
shares of Common Stock issued to him or her under the Stock Issuance Program,
whether or not his or her interest in those shares is vested. Accordingly, the
Participant shall have the right to vote such shares and to receive any regular
cash dividends paid on such shares. Any new, additional or different shares of
stock or other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive with respect to
his or her unvested shares by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued, subject to (i) the same vesting
requirements applicable to the Participant's unvested shares and (ii) such
escrow arrangements as the Plan Administrator shall deem appropriate.
3. Should the Participant cease to remain in Service while holding one or
more unvested shares of Common Stock under the Stock Issuance Program, then
those shares shall be immediately surrendered to the Corporation for
cancellation, and the Participant shall have no further stockholder rights with
respect to those shares. To the extent the surrendered shares were previously
issued to the Participant for consideration paid in cash or cash equivalent
(including the Participant's purchase-money promissory note), the Corporation
shall repay to the Participant the cash consideration paid for the surrendered
shares and shall cancel the unpaid principal balance of any outstanding
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purchase-money note of the Participant attributable to such surrendered shares.
The surrendered shares may, at the Plan Administrator's discretion, be retained
by the Corporation as Treasury Shares or may be retired to authorized but
unissued share status.
4. The Plan Administrator may in its discretion elect to waive the
surrender and cancellation of one or more unvested shares of Common Stock (or
other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to such shares. Such waiver
shall result in the immediate vesting of the Participant's interest in the
shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non- attainment of the applicable performance
objectives.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. Upon the occurrence of any Corporate Transaction, all unvested shares of
Common Stock at the time outstanding under this Stock Issuance Program shall
immediately vest in full and the Corporation's repurchase rights shall
terminate, except to the extent: (i) any such repurchase right is expressly
assigned to the successor corporation (or parent thereof) in connection with
the Corporate Transaction or (ii) such termination is precluded by other
limitations imposed in the Issuance Agreement. However, to the extent any of
the Corporation's repurchase rights with respect to the unvested shares held by
a Participant are assigned in the Corporate Transaction pursuant to clause (i)
above, those repurchase rights shall subsequently terminate, and all the shares
subject to the terminated rights shall immediately vest in full, upon the
Involuntary Termination of the Participant's Service (other than for
Misconduct) within eighteen (18) months after the effective date of the
Corporate Transaction.
B. The Plan Administrator shall have the discretionary authority,
exercisable either in advance of any actually anticipated Change in Control or
at the time of an actual Change in Control, to provide for the immediate and
automatic vesting of one or more unvested shares outstanding under the Stock
Issuance Program, and the termination of the Corporation's repurchase rights
with respect to those shares, at the time of such Change in Control. The Plan
Administrator shall also have full power and authority to condition any such
accelerated vesting upon the subsequent termination of the Participant's
Service within a specified period following the Change in Control.
III. TRANSFER RESTRICTIONS/SHARE ESCROW
A. Unvested shares may, in the Plan Administrator's discretion, be held in
escrow by the Corporation until the Participant's interest in such shares vests
or may be issued directly to the Participant with restrictive legends on the
certificates evidencing such unvested shares. To the extent an escrow
arrangement is utilized, the unvested shares and any securities or other assets
issued with respect to such shares (other than regular cash dividends) shall be
delivered in escrow to the Corporation to be held until the Participant's
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interest in such shares (or other securities or assets) vests. Alternatively,
if the unvested shares are issued directly to the Participant, the restrictive
legend on the certificates for such shares shall read substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE SUBJECT TO
(I) CERTAIN TRANSFER RESTRICTIONS AND (II) CANCELLATION OR REPURCHASE IN THE
EVENT THE REGISTERED HOLDER (OR HIS/HER PREDECESSOR IN INTEREST) CEASES TO
REMAIN IN THE CORPORATION'S SERVICE. SUCH TRANSFER RESTRICTIONS AND THE TERMS
AND CONDITIONS OF SUCH CANCELLATION OR REPURCHASE ARE SET FORTH IN A STOCK
ISSUANCE AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER (OR
HIS/HER PREDECESSOR IN INTEREST) DATED ________________, 199__, A COPY OF WHICH
IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION."
B. The Participant shall have no right to transfer any unvested shares of
Common Stock issued to him or her under the Stock Issuance Program. For
purposes of this restriction, the term "transfer" shall include (without
limitation) any sale, pledge, assignment, encumbrance, gift, or other
disposition of such shares, whether voluntary or involuntary. Upon any such
attempted transfer, the unvested shares shall immediately be cancelled in
accordance with substantially the same procedures in effect under Section I.B.3
of this Article Five, and neither the Participant nor the proposed transferee
shall have any rights with respect to such cancelled shares. However, the
Participant shall have the right to make a gift of unvested shares acquired
under the Stock Issuance Program to the Participant's spouse or issue,
including adopted children, or to a trust established for such spouse or issue,
provided the donee of such shares delivers to the Corporation a written
agreement to be bound by all the provisions of the Stock Issuance Program and
the Issuance Agreement.
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ARTICLE SIX
MISCELLANEOUS
I. LOANS OR INSTALLMENT PAYMENTS
A. The Plan Administrator may, in its discretion, assist any Optionee or
Participant, to the extent such Optionee or Participant is an Employee
(including an Optionee or Participant who is an officer of the Corporation), in
the exercise of one or more options granted to such Optionee under the
Discretionary Option Grant Program or the purchase of one or more shares issued
to such Participant under the Stock Issuance Program, including the
satisfaction of any Federal, state and local income and employment tax
obligations arising therefrom, by (i) authorizing the extension of a loan from
the Corporation to such Optionee or Participant or (ii) permitting the Optionee
or Participant to pay the exercise price or purchase price for the purchased
shares in installments over a period of years. The terms of any loan or
installment method of payment (including the interest rate and terms of
repayment) shall be upon such terms as the Plan Administrator specifies in the
applicable option or issuance agreement or otherwise deems appropriate under
the circumstances. Loans or installment payments may be authorized with or
without security or collateral. However, the maximum credit available to the
Optionee or Participant may not exceed the exercise or purchase price of the
acquired shares (less the par value of such shares) plus any Federal, state and
local income and employment tax liability incurred by the Optionee or
Participant in connection with the acquisition of such shares.
B. The Plan Administrator may, in its absolute discretion, determine that
one or more loans extended under this financial assistance program shall be
subject to forgiveness by the Corporation in whole or in part upon such terms
and conditions as the Plan Administrator may deem appropriate.
II. AMENDMENT OF THE PLAN AND AWARDS
A. The Board has complete and exclusive power and authority to amend or
modify the Plan (or any component thereof) in any or all respects whatsoever.
However, (i) no such amendment or modification shall adversely affect rights
and obligations with respect to stock options or unvested stock issuances at
the time outstanding under the Plan, unless the Optionee or Participant
consents to such amendment, and (ii) any amendment made to the Automatic Option
Grant Program (or any options outstanding thereunder) shall be in compliance
with the applicable limitations of Section IV of Article Three or Section III
of Article Four. In addition, the Board may not, without the approval of the
Corporation's stockholders, amend the Plan to (i) materially increase the
maximum number of shares issuable under the Plan, the number of shares for
which options may be granted to newly elected or continuing non-employee Board
members under Article Three or the
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maximum number of shares for which any one individual participating in the Plan
may be granted stock options, separately exercisable stock appreciation rights
and direct stock issuances in the aggregate over the term of the Plan, except
for permissible adjustments under Section VI.E. of Article One, (ii) materially
modify the eligibility requirements for plan participation or (iii) materially
increase the benefits accruing to Optionees or Participants.
B. Options to purchase shares of Common Stock may be granted under the
Discretionary Option Grant Program and shares of Common Stock may be issued
under the Stock Issuance Program, which are in excess of the number of shares
then available for issuance under the Plan, provided any excess shares actually
issued under the Discretionary Option Grant or Stock Issuance Program are held
in escrow until stockholder approval is obtained for a sufficient increase in
the number of shares available for issuance under the Plan. If such
stockholder approval is not obtained within twelve (12) months after the date
the first such excess option grants or excess share issuances are made, then
(i) any unexercised excess options shall terminate and cease to be exercisable
and (ii) the Corporation shall promptly refund the purchase price paid for any
excess shares actually issued under the Plan and held in escrow, together with
interest (at the applicable Short Term Federal Rate) for the period the shares
were held in escrow.
III. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock upon the
exercise of stock options or the direct issuance or vesting of such shares
under the Plan shall be subject to the satisfaction of all applicable Federal,
state and local income tax and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion and in accordance with the
provisions of this Section III and such supplemental rules as the Plan
Administrator may from time to time adopt (including the applicable safe-harbor
provisions of Securities and Exchange Commission Rule 16b-3), provide any or
all holders of Non-Statutory Options (other than the options granted pursuant
to Article Three or Article Four) or unvested shares under the Plan with the
right to use shares of Common Stock in satisfaction of all or part of the
Federal, state and local income and employment tax liabilities (the "Taxes")
incurred by such holders in connection with the exercise of their options or
the vesting of their shares. Such right may be provided to any such holder in
either or both of the following formats:
- Stock Withholding: The holder of the Non-Statutory Option or unvested
shares may be provided with the election to have the Corporation withhold, from
the shares of Common Stock otherwise issuable upon the exercise of such
Non-Statutory Option or the vesting of such shares, a portion of those shares
with an aggregate Fair Market Value equal to the percentage of the Taxes (up to
one hundred percent (100%)) specified by such holder.
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- Stock Delivery: The holder of the Non-Statutory Option or the unvested
shares may be provided with the election to deliver to the Corporation, at the
time the Non-Statutory Option is exercised or the shares vest, one or more
shares of Common Stock already held by such individual (other than in
connection with the option exercise or share vesting triggering the Taxes) with
an aggregate Fair Market Value equal to the percentage of the Taxes (up to one
hundred percent (100%)) specified by such holder.
IV. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan was adopted by the board of directors of each Constituent
Corporation prior to the Effective Date, subject to the approval of the
stockholders of each Constituent Corporation at the special stockholders
meeting separately held by each such corporation on July 8, 1994. The initial
automatic option grants under Article Four and the special option grants under
Article Five are to be made on the Effective Date, and the initial
discretionary option grants under Article Two and share issuances under Article
Five may also be made on the Effective Date.
B. The Plan shall terminate upon the earlier of (i) December 31, 2003 or
(ii) the date on which all shares available for issuance under the Plan shall
have been issued or cancelled pursuant to the exercise of options or stock
appreciation rights granted under the Plan or the issuance of shares (whether
vested or unvested) under the Stock Issuance Program. If the date of
termination is determined under clause (i) above, then all option grants and
unvested stock issuances outstanding on such date shall thereafter continue to
have force and effect in accordance with the provisions of the instruments
evidencing such grants or issuances.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants or stock issuances under the Plan shall be used for
general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option or stock
appreciation right under the Plan, the issuance of any shares under the Stock
Issuance Program, and the issuance of Common Stock upon the exercise or
surrender of the option grants made hereunder shall be subject to the
Corporation's procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the options granted under it and
the Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or delivered
under the Plan unless and until there shall have been compliance with all
applicable requirements of Federal and state securities laws, including the
filing and effectiveness of
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the Form S-8 registration statement for the shares of Common Stock issuable
under the Plan, and all applicable listing requirements of any securities
exchange on which the Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor any
action taken by the Plan Administrator hereunder, nor any provision of the Plan
shall be construed so as to grant any individual the right to remain in the
Service of the Corporation (or any parent or subsidiary corporation) for any
period of specific duration, and the Corporation (or any parent or subsidiary
corporation retaining the services of such individual) may terminate such
individual's Service at any time and for any reason, with or without cause.
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EXHIBIT A
AUTOMATIC STOCK OPTION AGREEMENT
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EXHIBIT B
STOCK OPTION AGREEMENT
FOR TOMMY H. CARTER
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EXHIBIT C
STOCK OPTION AGREEMENT
FOR CHARLES A. LAVERTY
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EXHIBIT D
STOCK OPTION AGREEMENT
FOR JAMES M. SWEENEY
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EXHIBIT 99.2
Notice of Grant of Stock Option and Stock Option Agreement
(Discretionary Option Grant Program)
<PAGE> 2
Grant Number: ________________
CORAM HEALTHCARE CORPORATION
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following stock option grant (the "Option") to
purchase shares of the Common Stock of Coram Healthcare Corporation (the
"Corporation"):
Optionee: 1~
Grant Date: 2~
Exercise Price: $3~ per share
Number of Option Shares: 4~ shares
Expiration Date: 5~
Type of Option: 6~
Exercise Schedule: The Option shall become exercisable for
(i) twenty-five percent (25%) of the Option Shares upon
Optionee's completion of one (1) year of Service (as defined
in the attached Stock Option Agreement) measured from the
Grant Date and (ii) the balance of the Option Shares in equal
successive monthly installments upon Optionee's completion of
each of the next thirty-six (36) months of Service measured
from and after the first anniversary of the Grant Date. In no
event shall the Option become exercisable for any additional
Option Shares following Optionee's cessation of Service.
Optionee understands and agrees that the Option is granted
subject to and in accordance with the express terms and conditions of the Coram
Healthcare Corporation 1994 Stock Option/Stock Issuance Plan (the "Plan").
Optionee further agrees to be bound by the terms and conditions of the Plan and
the terms and conditions of the Option as set forth in the Stock Option
Agreement attached hereto as Exhibit A. Optionee also acknowledges receipt of
a copy of the official prospectus for the Plan attached hereto as Exhibit B.
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<PAGE> 3
No Employment or Service Contract. Nothing in this Agreement
or in the Plan shall confer upon Optionee any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any parent or subsidiary employing
Optionee) or Optionee, which rights are hereby expressly reserved by each, to
terminate Optionee's Service at any time for any reason whatsoever, with or
without cause.
Dated: _____________________, 199__
CORAM HEALTHCARE CORPORATION
By: ___________________________________
Title: ________________________________
_______________________________________
1~, OPTIONEE
Address: ______________________________
_______________________________________
EXHIBIT A: STOCK OPTION AGREEMENT
EXHIBIT B: PLAN PROSPECTUS
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EXHIBIT A
STOCK OPTION AGREEMENT
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<PAGE> 5
CORAM HEALTHCARE CORPORATION
STOCK OPTION AGREEMENT
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board")
has adopted the Corporation's 1994 Stock Option/Stock Issuance Plan (the
"Plan") for the purpose of attracting and retaining the services of key
employees (including officers and directors), non-employee Board members and
consultants and other independent advisors.
B. Optionee is an individual who is to render valuable
services to the Corporation or one or more parent or subsidiary corporations,
and this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation's grant of a stock
option to purchase shares of the Corporation's common stock ("Common Stock").
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and
conditions set forth in this Agreement, the Corporation hereby grants to
Optionee, as of the grant date (the "Grant Date") specified in the accompanying
Notice of Grant of Stock Option (the "Grant Notice"), a stock option to
purchase up to that number of shares of the Corporation's Common Stock (the
"Option Shares") as is specified in the Grant Notice. Such Option Shares shall
be purchasable from time to time during the option term at the exercise price
(the "Exercise Price") specified in the Grant Notice.
2. OPTION TERM. This option shall expire at the close
of business on the expiration date (the "Expiration Date") specified in the
Grant Notice, unless sooner terminated in accordance with Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be
exercisable only by Optionee during Optionee's lifetime and shall not be
transferable or assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death.
4. EXERCISABILITY. This option shall become exercisable
for the Option Shares in accordance with the exercise schedule specified in the
Grant Notice. As the option becomes exercisable for one or more installments,
those installments shall accumulate, and the option shall remain exercisable
for the accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 5 or 6. In no event shall this
option become exercisable for any additional Option Shares following Optionee's
cessation of Service.
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5. CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:
a. Upon Optionee's cessation of Service for any
reason, this option shall immediately terminate and cease to remain outstanding
for any Option Shares for which it is not otherwise at that time exercisable.
b. Should Optionee cease Service for any reason
other than death or permanent disability while this option remains outstanding,
then Optionee shall have a three (3)-month period measured from the date of
such cessation of Service in which to exercise this option for any or all of
the Option Shares for which this option is exercisable at the time of such
cessation of Service. In no event, however, may this option be exercised at
any time after the specified Expiration Date. Upon the expiration of such
three (3)-month period or (if earlier) upon the specified Expiration Date, this
option shall terminate and cease to be outstanding.
c. Should Optionee die while this option is
outstanding, then the personal representative of Optionee's estate or the
person or persons to whom this option is transferred pursuant to Optionee's
will or in accordance with the laws of descent and distribution shall have the
right to exercise the option for any or all of the Option Shares for which this
option is exercisable at the time of Optionee's cessation of Service (less any
Option Shares subsequently purchased by Optionee prior to death). Such right
shall lapse, and this option shall terminate and cease to remain outstanding,
upon the earlier of (i) the first anniversary of the date of Optionee's death
or (ii) the Expiration Date.
d. Should Optionee become permanently disabled
and cease by reason thereof to remain in Service at any time during the option
term, then Optionee shall have a twelve (12)-month period commencing with the
date of such cessation of Service in which to exercise this option for any or
all of the Option Shares for which this option is exercisable at the time of
such cessation of Service. In no event, however, may this option be exercised
at any time after the specified Expiration Date. Upon the expiration of such
limited period of exercisability or (if earlier) upon the Expiration Date, this
option shall terminate and cease to be outstanding.
e. During the limited period of post-Service
exercisability applicable pursuant to Paragraphs 5.b through 5.d, this option
may not be exercised in the aggregate for more than the number of Option
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Shares (if any) for which this option is, at the time of Optionee's cessation
of Service, exercisable in accordance with either the normal exercise
provisions specified in the Grant Notice or the special acceleration provisions
of Paragraph 6.
f. Should Optionee's Service be terminated for
Misconduct, then this option shall terminate immediately and cease to remain
outstanding.
g. For purposes of this Agreement, the following
definitions shall be in effect:
(i) Optionee shall be deemed to remain
in SERVICE for so long as such individual performs services on a
periodic basis to the Corporation (or any parent or subsidiary
corporation) in the capacity of an Employee, a non-employee member of
the board of directors or an independent consultant or advisor.
(ii) Optionee shall be considered to be
an EMPLOYEE for so long as such individual performs services while in
the employ of the Corporation or one or more parent or subsidiary
corporations, subject to the control and direction of the employer
entity not only as to the work to be performed but also as to the
manner and method of performance.
(iii) Optionee shall be deemed to be
PERMANENTLY DISABLED and to have incurred a PERMANENT DISABILITY if
Optionee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve
(12) months or more.
(iv) A corporation shall be considered to
be a SUBSIDIARY of the Corporation if it is a member of an unbroken
chain of corporations which begins with the Corporation, provided each
such corporation in the unbroken chain (other than the last
corporation) owns, at the time of determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(v) A corporation shall be considered to
be a PARENT of the Corporation if it is a member of an
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unbroken chain of corporations ending with the Corporation, provided
each such corporation in the unbroken chain (other than the
Corporation) owns, at the time of determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(vi) Optionee's Service shall be deemed
to have been terminated for MISCONDUCT if such termination occurs by
reason of Optionee's commission of any act of fraud, embezzlement or
dishonesty, any unauthorized use or disclosure by Optionee of
confidential information or trade secrets of the Corporation or its
parent or subsidiary corporations, or any other intentional misconduct
by Optionee adversely affecting the business or affairs of the
Corporation in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the
Corporation or any parent or subsidiary may consider as grounds for
the dismissal or discharge of Optionee or any other individual in the
Service of the Corporation.
6. CORPORATE TRANSACTION.
a. In the event of any of the following
stockholder-approved transactions to which the Corporation is a party (a
"Corporate Transaction"):
(i) a merger or consolidation in which
the Corporation is not the surviving entity, except for a transaction
the principal purpose of which is to change the state in which the
Corporation is incorporated,
(ii) the sale, transfer or other
disposition of all or substantially all of the assets of the
Corporation (including the capital stock of the Corporation's
subsidiary corporations) in complete liquidation or dissolution of the
Corporation, or
(iii) any reverse merger in which the
Corporation is the surviving entity but in which securities possessing
more than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a person
or persons different from the persons holding those securities
immediately prior to such merger,
this option, to the extent outstanding at such time
but not otherwise fully exercisable, shall automatically accelerate so that
this option shall, immediately prior
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to the specified effective date for the Corporate Transaction, become fully
exercisable for all the Option Shares at the time subject to this option and
may be exercised for all or any portion of such shares as fully vested shares
of Common Stock. No such acceleration of this option, however, shall occur if
and to the extent: (i) this option is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation or parent
thereof or to be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation or parent thereof or (ii) such
option is to be replaced with a cash incentive program of the successor
corporation which preserves the option spread existing at the time of the
Corporate Transaction (the excess of the Fair Market Value (as such term is
defined in Paragraph 9.b) of the Option Shares at the time subject to this
option over the aggregate Exercise Price payable for such shares) and provides
for subsequent pay-out in accordance with the same exercise schedule in effect
for the option pursuant to the option exercise schedule set forth in the Grant
Notice. The determination of option comparability under clause (i) shall be
made by the Plan Administrator, and such determination shall be final, binding
and conclusive.
b. This option, to the extent not previously
exercised, shall terminate and cease to be outstanding immediately following
the consummation of such Corporate Transaction, unless it is expressly assumed
by the successor corporation or parent thereof.
c. Upon Optionee's cessation of Service by
reason of an Involuntary Termination within eighteen (18) months after a
Corporate Transaction in which this option is not otherwise accelerated in
accordance with Paragraph 6.a, the exercisability of this option, to the extent
outstanding at such time but not otherwise fully exercisable, shall
automatically accelerate so that this option shall become fully exercisable for
all the Option Shares and may be exercised for all or any portion of such
shares as fully vested shares of Common Stock. The option as so accelerated
shall remain exercisable until the earlier of (i) the Expiration Date or (ii)
the expiration of the one (1)-year period measured from the date of such
Involuntary Termination.
For purposes of this Agreement, Optionee shall be deemed to
cease Service by reason of an INVOLUNTARY TERMINATION if such cessation of
Service occurs:
(i) upon Optionee's dismissal or
discharge by the Corporation for reasons other than Misconduct (as
such term is defined in Paragraph 5.g), or
(ii) upon Optionee's voluntary
resignation following (A) a change in Optionee's position with the
Corporation which materially reduces Optionee's level of
responsibility, (B) a reduction in Optionee's level of compensation
(including base salary, fringe benefits and any non-discretionary and
objective-standard incentive payment or bonus award) by more than five
percent (5%) in the aggregate or (C) a relocation of
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Optionee's place of employment by more than fifty (50) miles from
Optionee's place of employment immediately prior to the Corporate
Transaction, provided and only if such change, reduction or relocation
is effected by the Corporation without Optionee's consent.
d. This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
make changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
7. ADJUSTMENT IN OPTION SHARES.
a. In the event any change is made to the Common
Stock issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class effected without the
Corporation's receipt of consideration, the Plan Administrator shall make
appropriate adjustments to (i) the number and/or class of securities subject to
this option and (ii) the Exercise Price payable per share in order to prevent
any dilution or enlargement of benefits hereunder. Such adjustments shall be
final, binding and conclusive.
b. If this option is assumed in connection with
any Corporate Transaction under Paragraph 6 or is otherwise to remain
outstanding, then this option shall, immediately after such Corporate
Transaction, be appropriately adjusted to apply and pertain to the number and
class of securities which would have been issued to Optionee in the
consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction. Appropriate adjustments shall
also be made to the Exercise Price payable per share, provided the aggregate
Exercise Price payable hereunder shall remain the same.
8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this
option shall not have any of the rights of a stockholder with respect to the
Option Shares until such individual shall have exercised the option and paid
the Exercise Price for the purchased Option Shares.
9. MANNER OF EXERCISING OPTION.
a. In order to exercise this option with respect
to all or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or in the case of exercise after Optionee's death,
Optionee's executor, administrator, heir or legatee, as the case may be) must
take the following actions:
(i) Deliver to the Secretary of the
Corporation an executed notice of exercise in substantially the form
of Exhibit I to this Agreement (the "Exercise Notice") in which there
is specified the number of Option Shares to be purchased under the
exercised option.
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(ii) Pay the aggregate Exercise Price for
the purchased shares through one or more of the following
alternatives:
(A) full payment in cash or by
check made payable to the Corporation's order;
(B) full payment in shares of
Common Stock held for the requisite period necessary to avoid
a charge to the Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date
(as such terms are defined below);
(C) full payment in a combination
of shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value on the Exercise Date
and cash or check payable to the Corporation's order; or
(D) full payment effected through a
broker-dealer sale and remittance procedure pursuant to which
Optionee shall concurrently provide irrevocable written
instructions (1) to a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all
applicable Federal, state and local income and employment
taxes required to be withheld in connection with such purchase
and (2) to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to
complete the sale transaction.
(iii) Furnish to the Corporation
appropriate documentation that the person or persons exercising the
option (if other than Optionee) have the right to exercise this
option.
b. For purposes of Paragraph 9.a and for all
other valuation purposes under this Agreement, the Fair Market Value per share
of Common Stock on any relevant date shall be the closing selling price per
share on the date in question on the New York Stock Exchange, as such price is
reported on the composite tape of transactions on such exchange. If there is
no reported closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
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c. The Exercise Date shall be the date on which
the executed Exercise Notice is delivered to the Secretary of the Corporation.
Except to the extent the sale and remittance procedure specified above is
utilized in connection with the option exercise, payment of the Exercise Price
for the purchased shares must accompany such notice.
d. As soon as practical after the Exercise Date,
the Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate or certificates representing the
purchased Option Shares.
e. In no event may this option be exercised for
any fractional shares.
10. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California, as such laws are applied to contracts entered into and performed in
such State, without resort to such State's conflict- of-laws rules.
11. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise
of this option and the issuance of Option Shares upon such exercise shall be
subject to compliance by the Corporation and Optionee with all applicable
requirements of law relating thereto and with all applicable regulations of any
stock exchange on which shares of Common Stock may be listed for trading at the
time of such exercise and issuance.
12. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 3 or 6, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the successors, administrators,
heirs and legal representatives of Optionee and the successors and assigns of
the Corporation.
13. NO EMPLOYMENT/SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Optionee any right to continue in
the Service of the Corporation (or any parent or subsidiary employing or
retaining Optionee) for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any such parent
or subsidiary) or Optionee, which rights are hereby expressly reserved by each
party, to terminate Optionee's Service at any time for any reason whatsoever,
with or without cause.
14. LIABILITY OF CORPORATION.
a. If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares which may without
stockholder approval be issued under the Plan, then this option shall be void
with respect to such excess shares unless stockholder approval of an amendment
sufficiently increasing the number of shares issuable
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under the Plan is obtained in accordance with the provisions of Section II of
Article Six of the Plan.
b. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation however, shall use its best efforts to
obtain all such approvals.
15. NOTICES. Any notice required to be given or
delivered to the Corporation under the terms of this Agreement shall be in
writing and addressed to the Corporation in care of the Corporate Secretary at
the Corporation's principal offices at 4675 MacArthur Court, Suite 1250,
Newport Beach, California, 92660. Any notice required to be given or delivered
to Optionee shall be in writing and addressed to Optionee at the address
indicated on the Grant Notice. All notices shall be deemed to have been given
or delivered upon personal delivery or upon deposit in the U.S. mail, by
registered or certified mail, postage prepaid and properly addressed to the
party to be notified.
16. CONSTRUCTION. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the
Plan. All decisions of the Plan Administrator with respect to any question or
issue arising under the Plan or this Agreement shall be conclusive and binding
on all persons having an interest in this option.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK
OPTION. In the event this option is designated an incentive stock option in
the Grant Notice, the following terms and conditions shall also apply to the
grant:
a. This option shall cease to qualify for
favorable tax treatment as an incentive stock option under the Federal tax laws
if (and to the extent) this option is exercised for one or more Option Shares
more than (i) three (3) months after the date Optionee ceases to be an Employee
for any reason other than death or permanent disability (as such term is
defined in Paragraph 5.g) or (ii) twelve (12) months after the date Optionee
ceases to be an Employee by reason of permanent disability.
b. If this option is to become exercisable in a
series of installments as indicated in the Grant Notice, then no such
installment shall qualify for favorable tax treatment as an incentive stock
option under the Federal tax laws if (and to the extent) the aggregate Fair
Market Value (determined at the Grant Date) of the Common Stock for which such
installment first becomes exercisable hereunder would, when added to the
aggregate value (determined as of the respective date or dates of grant) of the
Common Stock or other securities for which this option or one or more other
incentive stock options granted to Optionee prior to the Grant Date (whether
under the Plan or any other option
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plan of the Corporation or any parent or subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000)
in the aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in any calendar year, the option may nevertheless be
exercised for the excess shares in such calendar year as a non-statutory stock
option.
c. Should the exercisability of this option be
accelerated upon a Corporate Transaction in accordance with Paragraph 6, then
this option shall qualify for favorable tax treatment as an incentive stock
option under the Federal tax laws only to the extent the aggregate Fair Market
Value (determined at the Grant Date) of the number of shares of the
Corporation's Common Stock for which this option first becomes exercisable in
the calendar year in which the Corporate Transaction occurs does not, when
added to the aggregate value (determined as of the respective date or dates of
grant) of the shares of Common Stock or other securities for which this option
or one or more other incentive stock options granted to Optionee prior to the
Grant Date (whether under the Plan or any other option plan of the Corporation
or any parent or subsidiary) first become exercisable during the same calendar
year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should
the applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in
the calendar year of such Corporate Transaction, the option may nevertheless be
exercised for the excess shares in such calendar year as a non-statutory stock
option.
d. Should Optionee hold, in addition to this
option, one or more other options to purchase Common Stock which become
exercisable for the first time in the same calendar year as this option, then
the foregoing limitations on the exercisability of such options as incentive
stock options under the Federal tax laws shall be applied on the basis of the
order in which such options are granted.
e. To the extent this option should fail to
qualify for incentive stock option treatment under the Federal tax laws,
Optionee shall recognize compensation income at the time the option is
exercised in an amount equal to the Fair Market Value of the purchased Option
Shares less the aggregate Exercise Price paid for those shares, and Optionee
must make appropriate arrangements with the Corporation or any parent or
subsidiary employing Optionee for the satisfaction of all Federal, state or
local income and employment tax withholding requirements applicable to such
compensation income.
18. ADDITIONAL TERMS APPLICABLE TO A NON-STATUTORY STOCK
OPTION. In the event this option is designated a non-statutory stock option in
the Grant Notice, Optionee shall make appropriate arrangements with the
Corporation or any parent or subsidiary employing Optionee for the satisfaction
of all Federal, state or local income and employment tax withholding
requirements applicable to the exercise of this option.
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EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Coram Healthcare Corporation (the
"Corporation") that I elect to purchase __________ shares of the Corporation's
Common Stock (the "Purchased Shares") at the option exercise price of
$___________ per share (the "Exercise Price") pursuant to that certain option
(the "Option") granted to me under the Corporation's 1994 Stock Option/Stock
Issuance Plan on ____________________, 199___.
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Corporation, I shall hereby pay to the Corporation the
Exercise Price for the Purchased Shares in accordance with the provisions of my
agreement with the Corporation evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a condition for
exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect the payment of the
Exercise Price for the Purchased Shares.
__________________________________, 199__
Date
______________________________
Optionee
Address ______________________
______________________________
Print name in exact manner
it is to appear on the
stock certificate: ______________________________
Address to which certificate
is to be sent, if different
from address above: ______________________________
______________________________
Social Security Number: ______________________________
Employee Number: ______________________________
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EXHIBIT B
PLAN PROSPECTUS
<PAGE> 1
EXHIBIT 99.3
Addendum to Stock Option Agreement
(Special Tax Elections)
<PAGE> 2
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby made a
part of, that certain Stock Option Agreement dated 2~ (the "Option Agreement")
by and between Coram Healthcare Corporation (the "Corporation") and 1~
("Optionee") evidencing the non-statutory stock option granted on such date to
Optionee under the terms of the Corporation's 1994 Stock Option/Stock Issuance
Plan, and such provisions shall be effective immediately. Capitalized terms
used in this Addendum, to the extent not otherwise specifically defined herein,
shall have the meanings assigned to such terms in the Option Agreement.
SPECIAL TAX ELECTIONS
1. STOCK WITHHOLDING. Optionee is hereby granted the election to have the
Corporation withhold, at the time the option is exercised, a portion of the
purchased Option Shares with an aggregate Fair Market Value not to exceed one
hundred percent (100%) of the applicable Federal, state and local income and
employment tax withholding liability (the "Withholding Taxes") Optionee incurs
in connection with the option exercise.
Any such exercise of the election must be effected in accordance with the
following terms and conditions:
a. The election must be made on or before the date the liability for the
Withholding Taxes incurred in connection with the option exercise is determined
(the "Tax Determination Date").
b. The election shall be irrevocable.
c. The election shall be subject to the approval of the Plan Administrator,
and none of the Option Shares shall actually be withheld in satisfaction of the
Withholding Taxes incurred by Optionee in connection with the option exercise,
except to the extent the election is approved by the Plan Administrator.
d. The Option Shares withheld pursuant to the election shall be valued at
Fair Market Value on the Tax Determination Date in accordance with the
valuation procedures of Paragraph 9.b of the Option Agreement.
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e. In no event may the number of shares requested to be withheld exceed in
Fair Market Value the dollar amount of the Withholding Taxes incurred by
Optionee in connection with the option exercise.
If the stock withholding election is made by Optionee at the time when
Optionee is an officer or director of the Corporation subject to the
short-swing profit restrictions of Section 16(b) of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), then the following limitations, in
addition to the preceding provisions, shall also be applicable:
a. The election shall not become effective at any time prior to the
expiration of the six (6)-month period measured from the Effective Date of this
Addendum indicated below, and no Option Shares shall be withheld in connection
with any Tax Determination Date which occurs before the expiration of such six
(6)-month period.
b. The stock withholding election must be made in accordance with the
following limitations:
(i) Such election must be made at least six (6) months before the Tax
Determination Date, or
(ii) Both the exercise of such election and the exercise of the option
must occur concurrently within a quarterly "window" period. Quarterly window
periods shall begin on the third (3rd) business day following the date of
public release of each quarterly or annual statement of the Corporation's sales
and earnings and end on the earlier of the twelfth (12th) business day
following such release date or the Tax Determination Date.
c. The six (6)-month periods specified in clauses a and b shall not be
applicable in the event of Optionee's death or permanent disability.
2. STOCK DELIVERY. Optionee is hereby granted the election to deliver, at
the time the option is exercised, one or more shares of the Corporation's
Common Stock previously acquired by Optionee (other than in connection with the
acquisition triggering the Withholding Taxes) with an aggregate Fair Market
Value not to exceed one hundred percent (100%) of the Withholding Taxes
incurred in connection with such option exercise.
Any such exercise of the election must be effected in accordance with the
following terms and conditions:
a. The election must be made on or before the Tax Determination Date for
the Withholding Taxes.
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<PAGE> 4
b. The election shall be irrevocable.
c. The election shall be subject to the approval of the Plan Administrator,
and none of the delivered shares of Common Stock shall be accepted in
satisfaction of the Withholding Taxes incurred by Optionee in connection with
the option exercise, except to the extent the election is approved by the Plan
Administrator.
d. The shares of Common Stock delivered in satisfaction of the Withholding
Taxes shall be valued at Fair Market Value on the Tax Determination Date in
accordance with the valuation procedures of Paragraph 9.b of the Option
Agreement.
e. In no event may the number of delivered shares exceed in Fair Market
Value the dollar amount of the Withholding Taxes incurred by Optionee in
connection with the exercise of the option.
No additional restrictions or limitations shall be applicable to any stock
delivery election made by Optionee, whether or not such individual is at the
time an officer or director of the Corporation subject to the short-swing
profit restrictions of Section 16(b) of the 1934 Act.
IN WITNESS WHEREOF, Coram Healthcare Corporation has caused this Addendum to
be executed by its duly-authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
CORAM HEALTHCARE CORPORATION
By: ______________________________
Title: ___________________________
__________________________________
1~, OPTIONEE
EFFECTIVE DATE: ______________, 199__
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<PAGE> 1
EXHIBIT 99.4
Addendum to Stock Option Agreement
(Involuntary Termination following Change in Control)
<PAGE> 2
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby made a
part of, that certain Stock Option Agreement dated 2~ (the "Option Agreement")
by and between Coram Healthcare Corporation (the "Corporation") and 1~
("Optionee") evidencing the stock option granted on such date to Optionee under
the terms of the Corporation's 1994 Stock Option/Stock Issuance Plan, and such
provisions shall be effective immediately. All capitalized terms used in this
Addendum, to the extent not otherwise specifically defined herein, shall have
the meanings assigned to such terms in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CHANGE IN CONTROL
1. The exercisability of the option shall not accelerate upon the
occurrence of a Change in Control, and the option shall, over Optionee's
continued period of Service after the Change in Control, continue to become
exercisable for the Option Shares in accordance with the provisions of the
Option Agreement. However, immediately upon Optionee's cessation of Service by
reason of an Involuntary Termination within eighteen (18) months after the
Change in Control, the exercisability of this option shall, to the extent the
option is at the time outstanding but not otherwise fully exercisable,
automatically accelerate so that the option shall become fully and immediately
exercisable with respect to all the Option Shares at the time subject to the
option and may be exercised for all or any portion of those shares as fully
vested shares. The option as so accelerated shall remain exercisable until the
earlier of (i) the Expiration Date or (ii) the expiration of the one (1)-year
period measured from the date of Optionee's Involuntary Termination.
2. For purposes of this Addendum, a CHANGE IN CONTROL shall be deemed to
occur in the event of a change in ownership or control of the Corporation
effected through either of the following transactions:
(i) the direct or indirect acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation)
of beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders which the Board does not recommend such
stockholders to accept, or
(ii) a change in the composition of the Board over a period of thirty-six
(36) months or less such that a majority of the Board members
BPHPA1\DKH\0072948.01
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<PAGE> 3
(rounded up to the next whole number) ceases, by reason of one or more
contested elections for Board membership, to be comprised of individuals who
either (A) have been Board members continuously since the beginning of such
period or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election or nomination
was approved by the Board.
IN WITNESS WHEREOF, Coram Healthcare Corporation has caused this Addendum to
be executed by its duly-authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
CORAM HEALTHCARE CORPORATION
By: _________________________________
Title: ______________________________
_____________________________________
1~, OPTIONEE
EFFECTIVE DATE: _________________, 199__
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<PAGE> 1
EXHIBIT 99.5
Addendum to Stock Option Agreement
(Limited Stock Appreciation Right)
<PAGE> 2
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby made a
part of, that certain Stock Option Agreement dated 2~ (the "Option Agreement")
by and between Coram Healthcare Corporation (the "Corporation") and 1~
("Optionee") evidencing the stock option granted on such date to Optionee under
the terms of the Corporation's 1994 Stock Option/Stock Issuance Plan, and such
provisions shall be effective immediately. All capitalized terms used in this
Addendum, to the extent not otherwise specifically defined herein, shall have
the meanings assigned to such terms in the Option Agreement.
LIMITED STOCK APPRECIATION RIGHT
Optionee is hereby granted a limited stock appreciation right in tandem with
the option, exercisable upon the terms and conditions set forth below:
(i) Should a Hostile Take-Over occur at any time after the option has been
outstanding for a period of at least six (6) months measured from the
Effective Date of this Addendum indicated below, then Optionee shall have the
unconditional right (exercisable during the thirty (30)-day period
immediately following the consummation of such Hostile Take-Over) to
surrender the option to the Corporation, to the extent the option is at the
time exercisable for fully vested shares of Common Stock. In return for the
surrendered option, Optionee shall receive a cash distribution from the
Corporation in an amount equal to the excess of (A) the Take-Over Price of
the vested shares of Common Stock for which the surrendered option (or
surrendered portion) is at the time exercisable over (B) the aggregate
Exercise Price payable for such vested shares.
(ii) To exercise this limited stock appreciation right, Optionee must,
during the applicable thirty (30)-day exercise period, provide the
Corporation with written notice of the option surrender in which there is
specified the number of Option Shares as to which the Option is being
surrendered. Such notice must be accompanied by the return of Optionee's
copy of the Option Agreement, together with any written amendments to such
Agreement. The cash distribution shall be paid to Optionee within five (5)
days following such delivery date, and neither the approval of the Plan
Administrator nor the consent of the Board shall be required in connection
with such option surrender and cash distribution. Upon receipt of such
cash distribution, the option shall be cancelled with respect to the Option
Shares for which the option has been surrendered, and Optionee shall cease
to have any further right to acquire those Option Shares under the Option
Agreement. The option shall, however, remain outstanding for the balance
of the Option
BPHPA1\DKH\0070912.01
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<PAGE> 3
Shares (if any) in accordance with the terms and provisions of the Option
Agreement, and the Corporation shall accordingly issue a new stock option
agreement (substantially in the same form of the surrendered Option Agreement)
for those remaining Option Shares.
(iii) For purposes of this limited stock appreciation right, the
following definitions shall be in effect:
A HOSTILE TAKE-OVER shall be deemed to occur in the event of a change of
ownership of the Corporation effected through the following transaction:
the direct or indirect acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the
Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept, AND
more than fifty percent (50%) of the acquired securities are accepted
from holders other than the officers and directors of the Corporation
subject to the short-swing profit restrictions of Section 16 of the 1934
Act.
The TAKE-OVER PRICE per share shall be deemed to be equal to the greater
of (1) the Fair Market Value per share of Common Stock on the option
surrender date, as determined in accordance with the valuation provisions of
Paragraph 9.b of the Option Agreement, or (2) the highest reported price per
share of Common Stock paid by the tender offeror in effecting the Hostile
Take-Over. However, if the surrendered option is designated as an incentive
stock option in the Grant Notice, then the Take-Over Price shall not exceed
the clause (1) price per share.
(iv) In no event may this limited stock appreciation right be exercised
when there is not a positive spread between the Fair Market Value of the
Option Shares and the aggregate Exercise Price payable for such shares. This
limited stock appreciation right shall in all events terminate upon the
expiration or sooner termination of the option term and may not be assigned
or transferred by Optionee.
BPHPA1\DKH\0070912.01
08/14/94 2.
<PAGE> 4
IN WITNESS WHEREOF, Coram Healthcare Corporation has caused this Addendum to
be executed by its duly-authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
CORAM HEALTHCARE CORPORATION
By: __________________________________
Title: _______________________________
______________________________________
1~, OPTIONEE
EFFECTIVE DATE: ___________________, 199__
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<PAGE> 1
EXHIBIT 99.6
Addendum to Stock Option Agreement
(Financial Assistance)
<PAGE> 2
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby made a
part of, that certain Stock Option Agreement dated 2~ (the "Option Agreement")
by and between Coram Healthcare Corporation (the "Corporation") and 1~
("Optionee") evidencing the stock option granted on such date to Optionee under
the terms of the Corporation's 1994 Stock Option/Stock Issuance Plan, and such
provisions shall be effective immediately. All capitalized terms used in this
Addendum shall have the meanings assigned to such terms in the Option
Agreement.
FINANCIAL ASSISTANCE
The Plan Administrator may, in its absolute discretion and without any
obligation to do so, assist Optionee in the exercise of the option by (i)
authorizing the extension of a loan to Optionee from the Corporation or (ii)
permitting Optionee to pay the Exercise Price for the purchased Option Shares
in installments over a period of years. The terms of any such financial
assistance (including the interest rate, the collateral requirements and the
repayment schedule) shall be established by the Plan Administrator in its sole
discretion. Such financial assistance may, under currently proposed Treasury
Regulations, result in the loss of incentive stock option treatment under the
Federal tax laws, to the extent the option would otherwise qualify as an
incentive stock option at the time of exercise.
IN WITNESS WHEREOF, Coram Healthcare Corporation has caused this Addendum to
be executed by its duly-authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
CORAM HEALTHCARE CORPORATION
By: ____________________________________
Title: _________________________________
________________________________________
1~, OPTIONEE
EFFECTIVE DATE: __________________, 199__
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<PAGE> 1
EXHIBIT 99.7
Notice of Grant of Stock Option and Stock Option Agreement
(Automatic Option Grant Program)
<PAGE> 2
INITIAL GRANT
CORAM HEALTHCARE CORPORATION
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following stock option (the "Option") to
purchase shares of the common stock of Coram Healthcare Corporation (the
"Corporation") which has been granted pursuant to the automatic option grant
program in effect under the Corporation's 1994 Stock Option/Stock Issuance Plan
(the "Plan"):
OPTIONEE: _______________________________
GRANT DATE: _______________________________
TYPE OF OPTION: Non-Statutory Stock Option
EXERCISE PRICE: $_________________ per share
NUMBER OF OPTION SHARES: 75,000 shares
EXPIRATION DATE: _____________________________
EXERCISE SCHEDULE: The Option is immediately exercisable for all
the Option Shares.
VESTING SCHEDULE: The Option Shares shall be unvested and subject to
repurchase by the Corporation, at the Exercise Price paid per share, upon
Optionee's cessation of service as a member of the Corporation's Board of
Directors (the "Board"). Optionee shall acquire a vested interest in, and
the Corporation's repurchase right shall lapse, with respect to (i)
twenty-five percent (25%) of the Option Shares upon Optionee's completion of
one (1) year of Board service measured from the Grant Date and (ii) the
balance of the Option Shares in equal successive monthly installments upon
Optionee's completion of each of the next thirty-six (36) months of Board
service measured from and after the first anniversary of the Grant Date. In
no event shall any additional Option Shares vest following Optionee's
cessation of Board service.
Optionee understands and agrees that the Option is granted subject to and in
accordance with the express terms and conditions of the Plan governing
automatic option
BPHPA1\DKH\0025787.03
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<PAGE> 3
grants to Board members. Optionee further agrees to be bound by the terms and
conditions of the Plan and the terms and conditions of the Option as set forth
in the Automatic Stock Option Agreement attached hereto as Exhibit A.
Optionee hereby acknowledges receipt of a copy of the official Plan Summary
and Prospectus attached hereto as Exhibit B. A copy of the Plan is also
available upon request made to the Corporate Secretary at the Corporation's
principal offices at 4675 MacArthur Court, Suite 1250, Newport Beach,
California 92660.
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION SHARES
ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL NOT BE TRANSFERRABLE AND SHALL
BE SUBJECT TO REPURCHASE BY THE CORPORATION AND ITS ASSIGNS, AT THE EXERCISE
PRICE PAID PER SHARE, UPON OPTIONEE'S TERMINATION OF SERVICE WITH THE
CORPORATION. THE TERMS AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SET
FORTH IN A STOCK ISSUANCE AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO THE
CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION EXERCISE.
No provision of this Notice of Grant or the attached Automatic Stock Option
Agreement shall in any way be construed or interpreted so as to affect
adversely or otherwise impair the right of the Corporation or the stockholders
to remove Optionee from the Board at any time in accordance with the provisions
of applicable law.
DATED:_____________________, 199__
CORAM HEALTHCARE CORPORATION
By: _______________________________
Title: ____________________________
___________________________________
OPTIONEE
Address: _________________________
___________________________________
ATTACHMENTS:
EXHIBIT A: AUTOMATIC STOCK OPTION AGREEMENT
EXHIBIT B: PLAN SUMMARY AND PROSPECTUS FOR NON-EMPLOYEE DIRECTORS
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<PAGE> 4
ANNUAL GRANT
CORAM HEALTHCARE CORPORATION
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following stock option (the "Option") to
purchase shares of the common stock of Coram Healthcare Corporation (the
"Corporation") which has been granted pursuant to the automatic option grant
program in effect under the Corporation's 1994 Stock Option/Stock Issuance Plan
(the "Plan"):
OPTIONEE: _______________________________
GRANT DATE: _______________________________
TYPE OF OPTION: Non-Statutory Stock Option
EXERCISE PRICE: $_________________ per share
NUMBER OF OPTION SHARES: 2,500 shares
EXPIRATION DATE: _____________________________
EXERCISE SCHEDULE: The Option is immediately exercisable for all the Option
Shares.
VESTING SCHEDULE: The Option Shares shall be unvested and subject to
repurchase by the Corporation, at the Exercise Price paid per share, upon
Optionee's cessation of service as a member of the Corporation's Board of
Directors (the "Board"). Optionee shall acquire a vested interest in, and
the Corporation's repurchase right shall lapse with respect to, the Option
Shares in a series of twelve (12) equal and successive monthly installments
over Optionee's period of continued service as a Board member, with the
first such installment to vest upon Optionee's completion of one (1) month
of Board service measured from the Grant Date. In no event shall any
additional Option Shares vest following Optionee's cessation of Board
service.
Optionee understands and agrees that the Option is granted subject to and in
accordance with the express terms and conditions of the Plan governing
automatic option grants to Board members. Optionee further agrees to be bound
by the terms and conditions of the Plan and the terms and conditions of the
Option as set forth in the Automatic Stock Option Agreement attached hereto as
Exhibit A.
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<PAGE> 5
Optionee hereby acknowledges receipt of a copy of the official Plan Summary
and Prospectus attached hereto as Exhibit B. A copy of the Plan is also
available upon request made to the Corporate Secretary at the Corporation's
principal offices at 4675 MacArthur Court, Suite 1250, Newport Beach,
California 92660.
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION SHARES
ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL NOT BE TRANSFERRABLE AND SHALL
BE SUBJECT TO REPURCHASE BY THE CORPORATION AND ITS ASSIGNS, AT THE EXERCISE
PRICE PAID PER SHARE, UPON OPTIONEE'S TERMINATION OF SERVICE WITH THE
CORPORATION. THE TERMS AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SET
FORTH IN A STOCK ISSUANCE AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO THE
CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION EXERCISE.
No provision of this Notice of Grant or the attached Automatic Stock Option
Agreement shall in any way be construed or interpreted so as to affect
adversely or otherwise impair the right of the Corporation or the stockholders
to remove Optionee from the Board at any time in accordance with the provisions
of applicable law.
DATED:_____________________, 199__
CORAM HEALTHCARE CORPORATION
By: _______________________________
Title: ____________________________
___________________________________
OPTIONEE
Address: _________________________
___________________________________
ATTACHMENTS:
EXHIBIT A: AUTOMATIC STOCK OPTION AGREEMENT
EXHIBIT B: PLAN SUMMARY AND PROSPECTUS FOR NON-EMPLOYEE DIRECTORS
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<PAGE> 6
CORAM HEALTHCARE CORPORATION
AUTOMATIC STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has approved an automatic option grant program under the
1994 Stock Option/Stock Issuance Plan (the "Plan"), pursuant to which special
option grants are to be made to eligible members of the Corporation's Board of
Directors (the "Board") at periodic intervals over their period of Board
service in order to encourage such individuals to remain in the Corporation's
service.
B. Optionee is an eligible Board member and this Agreement is executed
pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the automatic grant of a stock option to purchase shares of the
Corporation's common stock ("Common Stock").
C. The granted option is intended to be a non-statutory option which does
not meet the requirements of Section 422 of the Internal Revenue Code and is
designed to provide Optionee with a meaningful incentive to continue to serve
as a member of the Board.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth
in this Agreement, the Corporation hereby grants to Optionee, as of the date of
grant (the "Grant Date") specified in the accompanying Notice of Grant of
Non-Employee Director Automatic Stock Option (the "Grant Notice"), a stock
option to purchase up to that number of shares of Common Stock (the "Option
Shares") as is specified in the Grant Notice. The Option Shares shall be
purchasable from time to time during the option term at the price per share
(the "Exercise Price") specified in the Grant Notice.
2. OPTION TERM. This option shall have a maximum term of ten (10) years
measured from the Grant Date and shall expire at the close of business on the
Expiration Date specified in the Grant Notice, unless sooner terminated under
Paragraph 5 or 8.
3. LIMITED TRANSFERABILITY. This option, together with the special stock
appreciation right provided under Paragraph 8.b, shall be neither transferable
nor assignable by Optionee, other than a transfer of this option effected by
will or by the laws of descent and distribution following Optionee's death, and
may be exercised, during Optionee's lifetime, only by Optionee.
4. EXERCISABILITY. This option shall be immediately exercisable for any or
all of the Option Shares, whether or not the Option Shares are vested in
accordance with
BPHPA1\DKH\0025819.02
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<PAGE> 7
the Vesting Schedule set forth in the Grant Notice, and shall remain so
exercisable until the expiration or sooner termination of the option term. In
no event, however, shall any additional Option Shares vest following Optionee's
cessation of service as a Board member.
5. CESSATION OF BOARD SERVICE. Should Optionee's service as a Board member
cease while this option remains outstanding, then the option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:
a. Upon Optionee's cessation of Board service for any reason other than
death or permanent disability, this option shall immediately terminate and
cease to be outstanding with respect to any and all Option Shares in which
Optionee is not otherwise at that time vested in accordance with the normal
Vesting Schedule set forth in the Grant Notice or the special vesting
acceleration provisions of Paragraph 7 or 8.
b. Should Optionee cease to serve as a Board member for any reason (other
than death or permanent disability) while holding this option, then the period
for exercising this option shall be reduced to a six (6)-month period
commencing with the date of such cessation of Board service, but in no event
shall this option be exercisable at any time after the Expiration Date. During
such limited period of exercisability, this option may not be exercised for
more than the number of Option Shares (if any) in which Optionee is vested on
the date Optionee ceases service as a Board member. Upon the earlier of (i)
the expiration of such six (6)-month period or (ii) the specified Expiration
Date, the option shall terminate and cease to be exercisable with respect to
any vested Option Shares for which the option has not been exercised.
c. Should Optionee die during the six (6)-month period following his or
her cessation of Board service, then the personal representative of Optionee's
estate or the person or persons to whom the option is transferred pursuant to
Optionee's will or in accordance with the laws of descent and distribution
shall have the right to exercise this option for any or all of the Option
Shares in which Optionee is vested at the time of Optionee's cessation of Board
service (less any Option Shares purchased by Optionee after such cessation of
Board service but prior to death). Such right of exercise shall terminate, and
this option shall accordingly cease to be exercisable for such vested Option
Shares, upon the earlier of (i) the expiration of the twelve (12)-month period
measured from the date of Optionee's death or (ii) the specified Expiration
Date.
d. Should Optionee die or become permanently disabled while serving as a
Board member, then all the Option Shares subject to this option at the time of
such cessation of Board service shall immediately vest, and Optionee (or the
personal representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution) shall have the right to exercise this option
for any or all of those vested Option Shares. Such right of exercise shall
terminate, and this option shall accordingly cease to be
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outstanding with respect to the Option Shares, upon the earlier of (i) the
expiration of the twelve (12)-month period measured from the date on which
Optionee dies or becomes permanently disabled or (ii) the specified Expiration
Date.
e. Optionee shall be deemed to be PERMANENTLY DISABLED if Optionee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
f. In the event of a Corporate Transaction (as defined in Paragraph 7) or
Change in Control (as defined in Paragraph 8), the provisions of Paragraph 7
and 8.a shall govern the period for which this option shall remain exercisable
following Optionee's cessation of Board service and shall supersede any
provisions to the contrary in this Paragraph 5.
6. ADJUSTMENT IN OPTION SHARES.
a. Should any change be made to the Common Stock issuable under the Plan
by reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the Common Stock as a
class without the Corporation's receipt of consideration, then the number and
class of securities purchasable under this option and the Exercise Price
payable per share shall be appropriately adjusted to prevent the dilution or
enlargement of Optionee's rights hereunder; provided, however, the aggregate
Exercise Price shall remain the same.
b. Upon the assumption of this option in connection with any Corporate
Transaction under Paragraph 7, this option shall be appropriately adjusted to
apply and pertain to the number and class of securities which would have been
issued to Optionee in the consummation of such Corporate Transaction had the
option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the Exercise Price payable per
share, provided the aggregate Exercise Price payable hereunder shall remain the
same.
7. CORPORATE TRANSACTION. In the event of any of the following
stockholder-approved transactions to which the Corporation is a party (a
"Corporate Transaction"):
(i) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is
to change the state in which the Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Corporation (including the capital stock
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of the Corporation's subsidiary corporations) in complete liquidation or
dissolution of the Corporation, or
(iii) any reverse merger in which the Corporation is the surviving entity
but in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such merger,
all Option Shares at the time subject to this option but not otherwise
vested shall automatically vest and the Corporation's repurchase right shall
terminate so that this option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable for all
of the Option Shares at the time subject to this option and may be exercised
for all or any portion of such shares as fully vested shares of Common Stock.
The option as so accelerated shall be assumed by the successor corporation in
the Corporate Transaction and shall remain exercisable for such fully vested
Option Shares, whether or not Optionee continues in Board service, until the
earlier of (i) the specified Expiration Date or (ii) the surrender of this
option under Paragraph 8.b.
8. CHANGE IN CONTROL/HOSTILE TAKEOVER.
a. All Option Shares subject to this option at the time of a Change in
Control (as defined below) but not otherwise vested shall automatically vest
and the Corporation's repurchase right shall terminate so that this option
shall, immediately prior to the effective date of such Change in Control,
become fully exercisable for all of the Option Shares at the time subject to
this option and may be exercised for all or any portion of such shares as fully
vested shares of Common Stock. This option shall remain exercisable for such
fully vested Option Shares, whether or not Optionee continues in Board service,
until the earlier of (i) the specified Expiration Date or (ii) the surrender of
this option under Paragraph 8.b.
b. Provided this option has been outstanding for at least six (6) months
prior to the occurrence of a Hostile Take-Over (as defined below), Optionee
shall have an unconditional right (exercisable during the thirty (30)-day
period immediately following the consummation of such Hostile Take-Over) to
surrender this option to the Corporation in exchange for a cash distribution
from the Corporation in an amount equal to the excess of (i) the Take-Over
Price (as defined below) of the Option Shares at the time subject to the
surrendered option (whether or not those Option Shares are at the time vested)
over (ii) the aggregate Exercise Price payable for such shares.
To exercise this limited stock appreciation right, Optionee must, during the
applicable thirty (30)-day exercise period, provide the Corporation with
written notice of the option surrender in which there is specified the number
of Option Shares as to which the Option is being surrendered. Such notice must
be accompanied by the return of Optionee's
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copy of this Agreement, together with any written amendments to such Agreement.
The cash distribution shall be paid to Optionee within five (5) days following
such delivery date, and neither the approval of the Plan Administrator nor the
consent of the Board shall be required in connection with such option surrender
and cash distribution. Upon receipt of such cash distribution, this option
shall be cancelled with respect to the Option Shares for which the option has
been surrendered, and Optionee shall cease to have any further right to acquire
those Option Shares under this Agreement. The option shall, however, remain
outstanding for the balance of the Option Shares (if any) in accordance with
the terms and provisions of this Agreement, and the Corporation shall
accordingly issue a new stock option agreement (substantially in the same form
of this Agreement) for those remaining Option Shares.
This limited stock appreciation right shall in all events terminate upon the
expiration or sooner termination of the option term and may not be assigned or
transferred by Optionee.
c. Definitions: For purposes of this Agreement, the following
definitions shall be in effect:
A CHANGE IN CONTROL shall be deemed to occur in the event of a change in
ownership or control of the Corporation effected through either of the
following transactions:
(i) the direct or indirect acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation)
of beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934 (the "1934 Act")) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders which the Board does not recommend such
stockholders to accept, or
(ii) a change in the composition of the Board over a period of thirty-six
(36) months or less such that a majority of the Board members (rounded up to
the next whole number) ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period by
at least a majority of the Board members described in clause (A) who were
still in office at the time such election or nomination was approved by the
Board.
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A HOSTILE TAKE-OVER shall be deemed to occur in the event of a change in
ownership of the Corporation effected through the following transaction:
(i) the direct or indirect acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation)
of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's stockholders which the
Board does not recommend such stockholders to accept, and
(ii) more than fifty percent (50%) of the acquired securities are accepted
from holders other than the officers and directors of the Corporation subject
to the short-swing profit restrictions of Section 16 of the 1934 Act.
The TAKE-OVER PRICE per share shall be deemed to be equal to the greater
of (i) the Fair Market Value per share of Common Stock on the date the option
is surrendered to the Corporation in connection with a Hostile Take-Over, as
determined in accordance with the valuation provisions of Paragraph 9.b, or
(ii) the highest reported price per share of Common Stock paid by the tender
offeror in effecting the Hostile Take-Over.
9. MANNER OF EXERCISING OPTION.
a. In order to exercise this option for all or any part of the Option
Shares for which the option is at the time exercisable, Optionee (or in the
case of exercise after Optionee's death, Optionee's executor, administrator,
heir or legatee, as the case may be) must take the following actions:
(i) To the extent the option is exercised for vested Option Shares, the
Secretary of the Corporation shall be provided with written notice of the
option exercise (the "Exercise Notice"), in substantially the form of Exhibit
I attached hereto, in which there is specified the number of vested Option
Shares which are to be purchased under the exercised option. To the extent
the option is exercised for one or more unvested Option Shares, Optionee (or
other person exercising the option) shall deliver to the Secretary of the
Corporation a stock issuance agreement (in form and substance satisfactory to
the Corporation) which grants the Corporation the right to repurchase, at the
Exercise Price, any and all unvested Option Shares held by Optionee at the
time of his or her cessation of Board service and which
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precludes the sale, transfer or other disposition of any purchased Option
Shares while subject to such repurchase right (the "Issuance Agreement").
(ii) The aggregate Exercise Price for the purchased shares shall be paid in
one of the following alternative forms:
(A) full payment in cash or check made payable to the Corporation's
order;
(B) full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date (as such terms are defined below);
(C) full payment in a combination of shares of Common Stock held for
the requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date and cash or check made payable to the Corporation's order;
or
(D) to the extent the option is exercised for vested Option Shares,
full payment effected through a broker-dealer sale and remittance procedure
pursuant to which Optionee shall provide concurrent irrevocable written
instructions to (1) a Corporation-designated brokerage firm to effect the
immediate sale of the vested shares purchased under the option and remit to
the Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable for those
shares and (2) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.
(iii) Appropriate documentation evidencing the right to exercise this option
shall be furnished the Corporation if the person or persons exercising the
option is other than Optionee.
b. For purposes of Paragraph 9.a and for all other valuation purposes
under this Agreement, the Fair Market Value per share of Common Stock on any
relevant date shall be the closing selling price per share on the date in
question on the New York Stock Exchange, as such price is reported on the
composite tape of transactions on such exchange. If there is no reported
closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.
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c. The Exercise Date shall be the date on which the Exercise Notice is
delivered to the Secretary of the Corporation, together with the appropriate
Issuance Agreement for any unvested shares acquired under the option. Except
to the extent the sale and remittance procedure specified above is utilized in
connection with the exercise of the option for vested shares, payment of the
Exercise Price for the purchased shares must accompany such notice.
d. As soon as practical after the Exercise Date, the Corporation shall
issue to or on behalf of Optionee (or other person or persons exercising this
option) a certificate or certificates representing the purchased Option Shares.
To the extent any such Option Shares are unvested, the certificates for those
Option Shares shall be endorsed with an appropriate legend evidencing the
Corporation's repurchase rights and may be held in escrow with the Corporation
until such shares vest.
e. In no event may this option be exercised for any fractional shares.
10. STOCKHOLDER RIGHTS. The holder of this option shall not have any of
the rights of a stockholder with respect to the Option Shares until such
individual shall have exercised this option and paid the Exercise Price for the
purchased shares.
11. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
make changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets. Nor shall this Agreement in any way be construed or interpreted so as
to affect adversely or otherwise impair the right of the Corporation or the
stockholders to remove Optionee from the Board at any time in accordance with
the provisions of applicable law.
12. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this option and
the issuance of the Option Shares upon such exercise shall be subject to
compliance by the Corporation and Optionee with all applicable requirements of
law relating thereto and with all applicable regulations of any stock exchange
on which shares of the Common Stock may be listed at the time of such exercise
and issuance.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 3, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the Corporation's successors and
assigns.
14. DISCHARGE OF LIABILITY. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the
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Common Stock as to which such approval shall not have been obtained. However,
the Corporation shall use its best efforts to obtain all such applicable
approvals.
15. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at the Corporate Offices
at 4675 MacArthur Court, Suite 1250, Newport Beach, California 92660. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee's signature line
on the Grant Notice. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the U.S. mail, by
registered or certified mail, postage prepaid and properly addressed to the
party to be notified.
16. CONSTRUCTION/GOVERNING LAW. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects
limited by and subject to the express terms and provisions of the Plan,
including the automatic option grant provisions of Article Three of the Plan.
The interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of California, as such laws are applied to
contracts entered into and performed in such State, without resort to that
State's conflict-of-laws rules.
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EXHIBIT I
NOTICE OF EXERCISE
OF
AUTOMATIC STOCK OPTION
I hereby notify Coram Healthcare Corporation (the "Corporation") that I
elect to purchase ____________________ shares of the Corporation's Common Stock
(the "Purchased Shares") at the option exercise price of $______ per share (the
"Exercise Price") pursuant to that certain option (the "Option") granted to me
under the Corporation's 1994 Stock Option/Stock Issuance Plan on ___________,
1994 to purchase up to ____________________ shares of the Corporation's Common
Stock.
Concurrently with the delivery of this Exercise Notice to the Secretary of
the Corporation, I shall hereby pay to the Corporation the Exercise Price for
the Purchased Shares in accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker/dealer sale and remittance
procedure specified in my agreement to effect payment of the Exercise Price for
any Purchased Shares in which I am vested at the time of exercise.
______________________________, 199__
Date
________________________________________
Optionee
Address: _______________________________
Print name in exact manner
it is to appear on the
stock certificate: _______________________________________
Address to which certificate
is to be sent, if different
from address above: _______________________________________
_______________________________________
Social Security Number: _______________________________________
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<PAGE> 1
EXHIBIT 99.8
Stock Option Agreement - James M. Sweeney
<PAGE> 2
CORAM HEALTHCARE CORPORATION
STOCK OPTION AGREEMENT
FOR JAMES M. SWEENEY
STOCK OPTION AGREEMENT made this 28th day of July 1994 by and between Coram
Healthcare Corporation, a Delaware corporation (the "Corporation"), and James
M. Sweeney ("Optionee").
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board") has adopted, and the
stockholders have approved, the Corporation's 1994 Stock Option/Stock Issuance
Plan (the "Plan") for the purpose of attracting and retaining the services of
key employees (including officers and directors), non-employee Board members
and consultants and other independent advisors.
B. Optionee is an individual who is to render valuable services to the
Corporation or one or more parent or subsidiary corporations, and this
Agreement is executed pursuant to, and is intended to carry out the purposes
of, the Plan in connection with the Corporation's grant of a stock option to
purchase shares of the Corporation's common stock ("Common Stock").
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth
in this Agreement, the Corporation hereby grants to Optionee, as of July 28,
1994 (the "Grant Date"), a Non-Statutory Stock Option to purchase up to
3,000,000 shares of Common Stock (the "Option Shares"). Such Option Shares
shall be purchasable from time to time during the option term at an exercise
price of Eleven Dollars ($11.00) per share (the "Exercise Price").
2. OPTION TERM. This option shall have a maximum term of ten (10) years
measured from the Grant Date and shall expire at the close of business on July
27, 2004 (the "Expiration Date"), unless sooner terminated under Paragraph 5 or
8.
3. LIMITED TRANSFERABILITY. This option, together with the special stock
appreciation right provided under Paragraph 8.b, shall be neither transferable
nor assignable by Optionee, other than a transfer of this option effected by
will or by the laws of descent and distribution following Optionee's death, and
may be exercised, during Optionee's lifetime, only by Optionee.
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4. EXERCISABILITY/VESTING SCHEDULE. The Option shall be immediately
exercisable for all the Option Shares. However, the Option Shares shall be
unvested and subject to repurchase by the Corporation, at the Exercise Price
paid per share, upon Optionee's cessation of Service prior to vesting in the
Option Shares. Optionee shall acquire a vested interest in, and the
Corporation's repurchase right shall lapse with respect to, (i) twenty-five
percent (25%) of the Option Shares upon Optionee's continuation in Service
through July 7, 1995 and (ii) the balance of the Option Shares in equal
successive monthly installments upon Optionee's completion of each of the next
thirty-six (36) months of Service thereafter. In no event shall any additional
Option Shares vest following Optionee's cessation of Service.
5. CESSATION OF SERVICE. Should Optionee's Service cease while this option
remains outstanding, then the option term specified in Paragraph 2 shall
terminate (and this option shall cease to be outstanding) prior to the
Expiration Date in accordance with the following provisions:
a. Upon Optionee's cessation of Service for any reason other than death
or permanent disability, this option shall immediately terminate and cease to
be outstanding with respect to any and all Option Shares in which Optionee is
not otherwise at that time vested in accordance with the normal vesting
provisions set forth in Paragraph 4 or the special vesting acceleration
provisions of Paragraph 7 or 8.
b. Should Optionee cease Service for any reason other than death or
permanent disability while holding this option, then the period for exercising
this option shall be reduced to a six (6)-month period commencing with the date
of such cessation of Service, but in no event shall this option be exercisable
at any time after the Expiration Date. During such limited period of
exercisability, this option may not be exercised for more than the number of
Option Shares (if any) in which Optionee is vested at the time of such
cessation of Service. Upon the earlier of (i) the expiration of such six
(6)-month period or (ii) the specified Expiration Date, the option shall
terminate and cease to be exercisable with respect to any vested Option Shares
for which the option has not been exercised.
c. Should Optionee die during the six (6)-month period following his
cessation of Service, then the personal representative of Optionee's estate or
the person or persons to whom the option is transferred pursuant to Optionee's
will or in accordance with the laws of descent and distribution shall have the
right to exercise this option for any or all of the Option Shares in which
Optionee is vested at the time of Optionee's cessation of Service (less any
Option Shares purchased by Optionee after such cessation of Service but prior
to death). Such right of exercise shall terminate, and this option shall
accordingly cease to be exercisable for such vested Option Shares, upon the
earlier of (i) the expiration of the twelve (12)-month period measured from the
date of Optionee's death or (ii) the specified Expiration Date.
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d. Should Optionee die or become permanently disabled at any time during
the option term, and cease by reason thereof to remain in Service, then all the
Option Shares subject to this option at the time of such cessation of Service
shall immediately vest, and Optionee (or the personal representative of
Optionee's estate or the person or persons to whom the option is transferred
pursuant to Optionee's will or in accordance with the laws of descent and
distribution) shall have the right to exercise this option for any or all of
those vested Option Shares. Such right of exercise shall terminate, and this
option shall accordingly cease to be outstanding with respect to the Option
Shares, upon the earlier of (i) the expiration of the twelve (12)-month period
measured from the date on which Optionee dies or becomes permanently disabled
or (ii) the specified Expiration Date.
e. During the limited period of post-Service exercisability applicable
pursuant to Paragraphs 5.b and 5.d, this option may not be exercised in the
aggregate for more than the number of Option Shares (if any) in which Optionee
is, at the time of Optionee's cessation of Service, vested in accordance with
either the normal vesting provisions specified in Paragraph 4 or special
vesting acceleration provisions of Paragraph 5.d, 7 or 8.
f. In the event of a Corporate Transaction (as defined in Paragraph 7) or
Change in Control (as defined in Paragraph 8), the provisions of Paragraph 7
and 8.a shall govern the period for which this option shall remain exercisable
following Optionee's subsequent cessation of Service and shall supersede any
provisions to the contrary in this Paragraph 5.
g. For purposes of this Agreement, the following definitions shall be in
effect:
- Optionee shall be deemed to remain in SERVICE for so long as such
individual performs services on a periodic basis to the Corporation (or any
parent or subsidiary corporation) in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant or
advisor.
- Optionee shall be considered to be an EMPLOYEE for so long as such
individual performs services while in the employ of the Corporation or one or
more parent or subsidiary corporations, subject to the control and direction
of the employer entity not only as to the work to be performed but also as to
the manner and method of performance.
- Optionee shall be deemed to be PERMANENTLY DISABLED and to have
incurred a PERMANENT DISABILITY if Optionee is unable to engage in any
substantial gainful activity by reason of any medically determinable
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<PAGE> 5
physical or mental impairment expected to result in death or to be of
continuous duration of twelve (12) months or more.
- A corporation shall be considered to be a SUBSIDIARY of the
Corporation if it is a member of an unbroken chain of corporations which
begins with the Corporation, provided each such corporation in the unbroken
chain (other than the last corporation) owns, at the time of determination,
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
- A corporation shall be considered to be a PARENT of the Corporation if
it is a member of an unbroken chain of corporations ending with the
Corporation, provided each such corporation in the unbroken chain (other than
the Corporation) owns, at the time of determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
6. ADJUSTMENT IN OPTION SHARES.
a. Should any change be made to the Common Stock issuable under the Plan
by reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the Common Stock as a
class without the Corporation's receipt of consideration, then the number and
class of securities purchasable under this option and the Exercise Price
payable per share shall be appropriately adjusted to prevent the dilution or
enlargement of Optionee's rights hereunder; provided, however, the aggregate
Exercise Price shall remain the same.
b. Upon the assumption of this option in connection with any Corporate
Transaction under Paragraph 7, this option shall be appropriately adjusted to
apply and pertain to the number and class of securities which would have been
issued to Optionee in the consummation of such Corporate Transaction had the
option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the Exercise Price payable per
share, provided the aggregate Exercise Price payable hereunder shall remain the
same.
7. CORPORATE TRANSACTION. In the event of any of the following
stockholder-approved transactions to which the Corporation is a party (a
"Corporate Transaction"):
(i) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is
to change the state in which the Corporation is incorporated,
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(ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Corporation (including the capital stock of the
Corporation's subsidiary corporations) in complete liquidation or dissolution
of the Corporation, or
(iii) any reverse merger in which the Corporation is the surviving entity
but in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such merger,
all Option Shares at the time subject to this option but not otherwise
vested shall automatically vest and the Corporation's repurchase right shall
terminate so that this option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable for all
of the Option Shares at the time subject to this option and may be exercised
for all or any portion of such shares as fully vested shares of Common Stock.
The option as accelerated shall be assumed by the successor corporation in the
Corporate Transaction and shall remain exercisable for such fully vested Option
Shares, whether or not Optionee continues in Service, until the earlier of (i)
the specified Expiration Date or (ii) the surrender of this option under
Paragraph 8.b.
8. CHANGE IN CONTROL/HOSTILE TAKEOVER.
a. All Option Shares subject to this option at the time of a Change in
Control (as defined below) but not otherwise vested shall automatically vest
and the Corporation's repurchase right shall terminate so that this option
shall, immediately prior to the effective date of such Change in Control,
become fully exercisable for all of the Option Shares at the time subject to
this option and may be exercised for all or any portion of such shares as fully
vested shares of Common Stock. This option shall remain exercisable for such
fully vested Option Shares, whether or not Optionee continues in Service, until
the earlier of (i) the specified Expiration Date or (ii) the surrender of this
option under Paragraph 8.b.
b. Provided this option has been outstanding for at least six (6) months
prior to the occurrence of a Hostile Take-Over (as defined below), Optionee
shall have an unconditional right (exercisable during the thirty (30)-day
period immediately following the consummation of such Hostile Take-Over) to
surrender this option to the Corporation in exchange for a cash distribution
from the Corporation in an amount equal to the excess of (i) the Take-Over
Price (as defined below) of the Option Shares at the time subject to the
surrendered option (whether or not those Option Shares are at the time vested)
over (ii) the aggregate Exercise Price payable for such shares.
To exercise this limited stock appreciation right, Optionee must, during the
applicable thirty (30)-day exercise period, provide the Corporation with
written notice of the
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<PAGE> 7
option surrender in which there is specified the number of Option Shares as to
which the Option is being surrendered. Such notice must be accompanied by the
return of Optionee's copy of this Agreement, together with any written
amendments to such Agreement. The cash distribution shall be paid to Optionee
within five (5) days following such delivery date, and neither the approval of
the Plan Administrator nor the consent of the Board shall be required in
connection with such option surrender and cash distribution. Upon receipt of
such cash distribution, this option shall be cancelled with respect to the
shares subject to the surrendered option (or the surrendered portion), and
Optionee shall cease to have any further right to acquire those Option Shares
under this Agreement. In the event this option is surrendered for only a
portion of the Option Shares at the time subject thereto, the Corporation shall
issue a new stock option agreement (substantially in the form of this
Agreement) for the balance of the Option Shares for which this option is not
surrendered.
This limited stock appreciation right shall in all events terminate upon the
expiration or sooner termination of the option term and may not be assigned or
transferred by Optionee.
c. Definitions: For purposes of this Agreement, the following
definitions shall be in effect:
A CHANGE IN CONTROL shall be deemed to occur in the event of a change in
ownership or control of the Corporation effected through either of the
following transactions:
(i) the direct or indirect acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation)
of beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934 (the "1934 Act")) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders which the Board does not recommend such
stockholders to accept, or
(ii) a change in the composition of the Board over a period of thirty-six
(36) months or less such that a majority of the Board members (rounded up to
the next whole number) ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period by
at least a majority of the Board members described in clause (A) who were
still in office at the time such election or nomination was approved by the
Board.
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A HOSTILE TAKE-OVER shall be deemed to occur in the event of a change in
ownership of the Corporation effected through the following transaction:
(i) the direct or indirect acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation)
of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept, and
(ii) more than fifty percent (50%) of the acquired securities are accepted
from holders other than the officers and directors of the Corporation subject
to the short-swing profit restrictions of Section 16 of the 1934 Act.
The TAKE-OVER PRICE per share shall be deemed to be equal to the greater
of (i) the Fair Market Value per share of Common Stock on the date the option
is surrendered to the Corporation in connection with a Hostile Take-Over, as
determined in accordance with the valuation provisions of Paragraph 9.b, or
(ii) the highest reported price per share of Common Stock paid by the tender
offeror in effecting the Hostile Take-Over.
9. MANNER OF EXERCISING OPTION.
a. In order to exercise this option for all or any part of the Option
Shares for which the option is at the time exercisable, Optionee (or in the
case of exercise after Optionee's death, Optionee's executor, administrator,
heir or legatee, as the case may be) must take the following actions:
(i) To the extent the option is exercised for vested Option Shares, the
Secretary of the Corporation shall be provided with written notice of the
option exercise (the "Exercise Notice"), in substantially the form of Exhibit
I attached hereto, in which there is specified the number of vested Option
Shares which are to be purchased under the exercised option. To the extent
the option is exercised for one or more unvested Option Shares, Optionee (or
other person exercising the option) shall deliver to the Secretary of the
Corporation a stock issuance agreement (in form and substance satisfactory to
the Corporation) which grants the Corporation the right to repurchase, at the
Exercise Price, any and all unvested Option Shares held by Optionee at the
time of his cessation of Service and which precludes the sale,
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<PAGE> 9
transfer or other disposition of any purchased Option Shares while subject to
such repurchase right (the "Issuance Agreement").
(ii) The aggregate Exercise Price for the purchased shares shall be paid in
one of the following alternative forms:
(A) full payment in cash or check made payable to the Corporation's
order;
(B) full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date (as such terms are defined below);
(C) full payment in a combination of shares of Common Stock held for
the requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date and cash or check made payable to the Corporation's order;
or
(D) to the extent the option is exercised for vested Option Shares,
full payment effected through a broker-dealer sale and remittance procedure
pursuant to which Optionee shall provide concurrent irrevocable written
instructions to (1) a Corporation-designated brokerage firm to effect the
immediate sale of the vested shares purchased under the option and remit to
the Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable for those
shares and (2) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.
(iii) Appropriate documentation evidencing the right to exercise this
option shall be furnished the Corporation if the person or persons exercising
the option is other than Optionee.
b. For purposes of Paragraph 9.a and for all other valuation purposes
under this Agreement, the Fair Market Value per share of Common Stock on any
relevant date shall be the closing selling price per share on the date in
question on the New York Stock Exchange, as such price is reported on the
composite tape of transactions on such exchange. If there is no reported
closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.
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<PAGE> 10
c. The Exercise Date shall be the date on which the Exercise Notice is
delivered to the Secretary of the Corporation, together with the appropriate
Issuance Agreement for any unvested shares acquired under the option. Except
to the extent the sale and remittance procedure specified above is utilized in
connection with the exercise of the option for vested shares, payment of the
Exercise Price for the purchased shares must accompany such notice.
d. As soon as practical after the Exercise Date, the Corporation shall
issue to or on behalf of Optionee (or other person or persons exercising this
option) a certificate or certificates representing the purchased Option Shares.
To the extent any such Option Shares are unvested, the certificates for those
Option Shares shall be endorsed with an appropriate legend evidencing the
Corporation's repurchase rights and may be held in escrow with the Corporation
until such shares vest.
e. In no event may this option be exercised for any fractional shares.
10. STOCKHOLDER RIGHTS. The holder of this option shall not have any of
the rights of a stockholder with respect to the Option Shares until such
individual shall have exercised this option and paid the Exercise Price for the
purchased shares.
11. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
make changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets. Nor shall this Agreement in any way be construed or interpreted so as
to affect adversely or otherwise impair the right of the Corporation or the
stockholders to remove Optionee from the Board at any time in accordance with
the provisions of applicable law.
12. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this option and
the issuance of the Option Shares upon such exercise shall be subject to
compliance by the Corporation and Optionee with all applicable requirements of
law relating thereto and with all applicable regulations of any stock exchange
on which shares of the Common Stock may be listed at the time of such exercise
and issuance.
13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 3, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the Corporation's successors and
assigns.
14. DISCHARGE OF LIABILITY. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the
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<PAGE> 11
Common Stock as to which such approval shall not have been obtained. However,
the Corporation shall use its best efforts to obtain all such applicable
approvals.
15. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at the Corporate Offices
at 1125 17th Street, Suite 1500, Denver, Colorado 80202. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, by registered or certified
mail, postage prepaid and properly addressed to the party to be notified.
16. CONSTRUCTION/GOVERNING LAW. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects
limited by and subject to the express terms and provisions of the Plan. The
interpretation, performance and enforcement of this Agreement shall be governed
by the laws of the State of California without resort to that State's
conflict-of-laws rules.
17. NO EMPLOYMENT/SERVICE CONTRACT. Nothing in this Agreement or in the
Plan shall confer upon Optionee any right to continue in the Service of the
Corporation (or any parent or subsidiary employing or retaining Optionee) for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any such parent or subsidiary) or
Optionee, which rights are hereby expressly reserved by each party, to
terminate Optionee's Service at any time for any reason whatsoever, with or
without cause.
18. PLAN SUMMARY AND PROSPECTUS. Optionee hereby acknowledges receipt of
a copy of the official Plan Summary and Prospectus attached hereto as Exhibit
II. A copy of the Plan is also available upon request made to the Corporate
Secretary at the Corporation's principal offices at 1125 17th Street, Suite
1500, Denver, Colorado 80202.
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<PAGE> 12
IN WITNESS WHEREOF, CORAM HEALTHCARE CORPORATION has caused this Stock
Option Agreement to be executed on its behalf by its duly-authorized officer,
and James M. Sweeney has executed this Stock Option Agreement, all as of the
date first written above.
CORAM HEALTHCARE CORPORATION
By: ___________________________________
Title: ________________________________
________________________________________
JAMES M. SWEENEY
Address: ______________________________
________________________________________
ATTACHMENTS:
Exhibit I: Notice of Exercise
Exhibit II: Plan Summary and Prospectus
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<PAGE> 13
EXHIBIT I
NOTICE OF EXERCISE OF
STOCK OPTION
I hereby notify Coram Healthcare Corporation (the "Corporation") that I
elect to purchase ____________________ shares of the Corporation's Common Stock
(the "Purchased Shares") at the option exercise price of Eleven Dollars
($11.00) per share (the "Exercise Price") pursuant to that certain option (the
"Option") granted to me under the Corporation's 1994 Stock Option/Stock
Issuance Plan on July 28, 1994 to purchase up to 3,000,000 shares of the
Corporation's Common Stock.
Concurrently with the delivery of this Exercise Notice to the Secretary of
the Corporation, I shall hereby pay to the Corporation the Exercise Price for
the Purchased Shares in accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker/dealer sale and remittance
procedure specified in my agreement to effect payment of the Exercise Price for
any Purchased Shares in which I am vested at the time of exercise.
__________________, 199__
Date
__________________________________________
Optionee
Address: ________________________________
__________________________________________
Print name in exact manner
it is to appear on the
stock certificate:
__________________________________________
Address to which certificate
is to be sent, if different
from address above:
__________________________________________
__________________________________________
Social Security Number:
__________________________________________
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<PAGE> 14
EXHIBIT II
PLAN SUMMARY AND PROSPECTUS
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<PAGE> 1
EXHIBIT 99.9
Stock Option Agreement - Charles A. Laverty
<PAGE> 2
CORAM HEALTHCARE CORPORATION
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT made this 28th day of July 1994 by and
between Coram HealthCare Corporation, a Delaware corporation (the
"Corporation"), and Charles A. Laverty ("Optionee").
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board")
has adopted, and the stockholders have approved, the Corporation's 1994 Stock
Option/Stock Issuance Plan (the "Plan") for the purpose of attracting and
retaining the services of key employees (including officers and directors),
non-employee Board members and consultants and other independent advisors.
B. Optionee is an individual who is to render valuable
services to the Corporation or one or more parent or subsidiary corporations,
and this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation's grant of a stock
option to purchase shares of the Corporation's common stock ("Common Stock").
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and
conditions set forth in this Agreement, the Corporation hereby grants to
Optionee, as of July 28, 1994 (the "Grant Date"), a Non-Statutory Stock Option
to purchase up to 100,000 shares of Common Stock (the "Option Shares"). Such
Option Shares shall be purchasable from time to time during the option term at
an exercise price of Eleven Dollars ($11.00) per share (the "Exercise Price").
2. OPTION TERM. This option shall have a maximum term
of ten (10) years measured from the Grant Date and shall expire at the close of
business on July 27, 2004 (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 5.
3. LIMITED TRANSFERABILITY. This option shall be
neither transferable nor assignable by Optionee other than a transfer effected
by will or by the laws of descent anddistribution following Optionee's death,
and may be exercised, during Optionee's lifetime, only by Optionee.
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<PAGE> 3
4. DATES OF EXERCISE. This option shall be immediately
exercisable for all the Option Shares and may be exercised for any or all of
the Option Shares as fully-vested shares at any time prior to the specified
Expiration Date or the sooner termination of the option term under Paragraph 5.
5. CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:
a. Should Optionee cease Service for any reason
other than death or permanent disability while this option remains outstanding,
then Optionee shall have a six (6)-month period measured from the date of such
cessation of Service in which to exercise this option for any or all of the
Option Shares at the time subject to this option. Upon the expiration of such
six (6)-month period or (if earlier) upon the specified Expiration Date, this
option shall terminate and cease to remain outstanding for any Option Shares
for which this option has not otherwise been exercised.
b. Should Optionee die while in Service or
within the six (6)-month period following his cessation of Service, then the
personal representative of Optionee's estate or the person or persons to whom
this option is transferred pursuant to Optionee's will or in accordance with
the laws of descent and distribution shall have the right to exercise the
option for any or all of the Option Shares at the time subject to this option.
Such right shall lapse, and this option shall terminate and cease to remain
outstanding, upon the earlier of (i) the first anniversary of the date of
Optionee's death or (ii) the Expiration Date.
c. Should Optionee become permanently disabled
and cease by reason thereof to remain in Service at any time during the option
term, then Optionee shall have a twelve (12)-month period commencing with the
date of such cessation of Service in which to exercise this option for any or
all of the Option Shares at the time subject to this option.
d. During the limited period of post-Service
exercisability applicable pursuant to Paragraphs 5.a through 5.c, this option
may not be exercised in the aggregate for more than the number of Option Shares
subject to this option at the time of Optionee's cessation of Service.
e. In the event of a Corporate Transaction (as
defined in Paragraph 6), the provisions of Paragraph 6 shall govern the period
for which this option is to remain exercisable following Optionee's cessation
of Service and shall supersede any provisions to the contrary in this Paragraph
5.
BPHPA1\DKH\0040260.03
2.
<PAGE> 4
f. For purposes of this Agreement:
- Optionee shall be deemed to remain in SERVICE
for so long as such individual performs services on a periodic basis
to the Corporation (or any parent or subsidiary corporation) in the
capacity of an Employee, a non-employee member of the board of
directors or an independent consultant or advisor.
- Optionee shall be considered to be an
EMPLOYEE for so long as such individual performs services while in the
employ of the Corporation or one or more parent or subsidiary
corporations, subject to the control and direction of the employer
entity not only as to the work to be performed but also as to the
manner and method of performance.
- Optionee shall be deemed to be PERMANENTLY
DISABLED and to have incurred a PERMANENT DISABILITY if Optionee is
unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to
result in death or to be of continuous duration of twelve (12) months
or more.
- A corporation shall be considered to be a
SUBSIDIARY of the Corporation if it is a member of an unbroken chain
of corporations which begins with the Corporation, provided each such
corporation in the unbroken chain (other than the last corporation)
owns, at the time of determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
- A corporation shall be considered to be a
PARENT of the Corporation if it is a member of an unbroken chain of
corporations ending with the Corporation, provided each such
corporation in the unbroken chain (other than the Corporation) owns,
at the time of determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
6. CORPORATE TRANSACTION.
a. In the event of any of the following
stockholder-approved transactions to which the Corporation is a party (a
"Corporate Transaction"):
(i) a merger or consolidation in which
the Corporation is not the surviving entity, except for a transaction
the principal
BPHPA1\DKH\0040260.03
3.
<PAGE> 5
purpose of which is to change the state in which the Corporation is
incorporated,
(ii) the sale, transfer or other
disposition of all or substantially all of the assets of the
Corporation (including the capital stock of the Corporation's
subsidiary corporations) in complete liquidation or dissolution of the
Corporation, or
(iii) any reverse merger in which the
Corporation is the surviving entity but in which securities possessing
more than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a person
or persons different from the persons holding those securities
immediately prior to such merger,
this option may, immediately prior to the specified
effective date for the Corporate Transaction, be exercised for all or any
portion of the Option Shares at the time subject to this option. To the extent
not so exercised, this option shall be assumed by the successor corporation in
the Corporate Transaction and shall remain exercisable for such Option Shares,
whether or not Optionee continues in Service, until the earlier of (i) the
specified Expiration Date or (ii) the surrender of this option under Paragraph
19.
b. This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
make changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
7. ADJUSTMENT IN OPTION SHARES.
a. In the event any change is made to the Common
Stock issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class effected without the
Corporation's receipt of consideration, the Plan Administrator shall make
appropriate adjustments to (i) the number and/or class of securities subject to
this option and (ii) the Exercise Price payable per share in order to prevent
any dilution or enlargement of benefits hereunder. Such adjustments shall be
final, binding and conclusive.
b. Upon the assumption of this option in
connection with any Corporate Transaction under Paragraph 6, this option shall
be appropriately adjusted to apply and pertain to the number and class of
securities which would have been issued to Optionee in the consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be
BPHPA1\DKH\0040260.03
4.
<PAGE> 6
made to the Exercise Price payable per share, provided the aggregate Exercise
Price payable hereunder shall remain the same.
8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this
option shall not have any of the rights of a stockholder with respect to the
Option Shares until such individual shall have exercised the option and paid
the Exercise Price for the purchased Option Shares.
9. MANNER OF EXERCISING OPTION.
a. In order to exercise this option with respect
to all or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or in the case of exercise after Optionee's death,
Optionee's executor, administrator, heir or legatee, as the case may be) must
take the following actions:
(i) Deliver to the Secretary of the
Corporation an executed notice of exercise in substantially the form
of Exhibit I to this Agreement (the "Exercise Notice") in which there
is specified the number of Option Shares which are to be purchased
under the exercised option.
(ii) Pay the aggregate Exercise Price for
the purchased shares through one or more of the following
alternatives:
(A) full payment in cash or by
check made payable to the Corporation's order;
(B) full payment in shares of
Common Stock held for the requisite period necessary to avoid
a charge to the Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date
(as such terms are defined below);
(C) full payment in a combination
of shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value on the Exercise Date
and cash or check payable to the Corporation's order; or
(D) full payment effected through a
broker-dealer sale and remittance procedure pursuant to which
Optionee shall concurrently provide irrevocable written
instructions to (1) a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale
BPHPA1\DKH\0040260.03
5.
<PAGE> 7
proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price
payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be
withheld in connection with such purchase and (2) the
Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete
the sale transaction.
(iii) Furnish to the Corporation
appropriate documentation that the person or persons exercising the
option (if other than Optionee) have the right to exercise this
option.
b. For purposes of Paragraph 9.a and for all
other valuation purposes under this Agreement, the Fair Market Value per share
of Common Stock on any relevant date shall be the closing selling price per
share on the date in question on the New York Stock Exchange, as such price is
reported on the composite tape of transactions on such exchange. If there is
no reported closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
c. The Exercise Date shall be the date on which
the executed Exercise Notice is delivered to the Secretary of the Corporation.
Except to the extent the sale and remittance procedure specified above is
utilized in connection with the option exercise, payment of the Exercise Price
for the purchased shares must accompany such notice.
d. As soon as practical after the Exercise Date,
the Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate or certificates representing the
purchased Option Shares.
e. In no event may this option be exercised for
any fractional shares.
10. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
11. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise
of this option and the issuance of Option Shares upon such exercise shall be
subject to compliance by the Corporation and Optionee with all applicable
requirements of law relating thereto and with all applicable regulations of any
stock exchange on which shares of Common Stock may be listed for trading at the
time of such exercise and issuance.
BPHPA1\DKH\0040260.03
6.
<PAGE> 8
12. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 3, the provisions of this Agreement shall inure
to the benefit of, and be binding upon, the successors, administrators, heirs
and legal representatives of Optionee and the successors and assigns of the
Corporation.
13. LIABILITY OF CORPORATION.
a. If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares which may without
stockholder approval be issued under the Plan, then this option shall be void
with respect to such excess shares unless stockholder approval of an amendment
sufficiently increasing the number of shares issuable under the Plan is
obtained in accordance with the provisions of Section II of Article Six of the
Plan.
b. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation however, shall use its best efforts to
obtain all such approvals.
14. NO EMPLOYMENT/SERVICE CONTRACT.
a. Nothing in this Agreement or in the Plan
shall confer upon Optionee any right to continue in the Service of the
Corporation (or any parent or subsidiary employing or retaining Optionee) for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any such parent or subsidiary) or
Optionee, which rights are hereby expressly reserved by each party, to
terminate Optionee's Service at any time for any reason whatsoever, with or
without cause.
b. This Agreement shall not in any way be
construed or interpreted so as to affect adversely or otherwise impair the
right of the Corporation or the stockholders to remove Optionee from the Board
at any time in accordance with the provisions of applicable law.
15. NOTICES. Any notice required to be given or
delivered to the Corporation under the terms of this Agreement shall be in
writing and addressed to the Corporation in care of the Corporate Secretary at
the Corporation's principal offices at 4675 MacArthur Court, Suite 1250,
Newport Beach, California, 92660. Any notice required to be given or delivered
to Optionee shall be in writing and addressed to Optionee at the address
indicated below Optionee's signature line on this Agreement. All notices shall
be deemed to have been given or delivered upon personal delivery or upon
deposit in the U.S.
BPHPA1\DKH\0040260.03
7.
<PAGE> 9
mail, by registered or certified mail, postage prepaid and properly addressed
to the party to be notified.
16. CONSTRUCTION. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the
Plan. All decisions of the Plan Administrator with respect to any question or
issue arising under the Plan or this Agreement shall be conclusive and binding
on all persons having an interest in this option.
17. WITHHOLDING. Optionee shall make appropriate
arrangements with the Corporation or any parent or subsidiary employing
Optionee for the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the exercise of this
option.
18. LIMITED STOCK APPRECIATION RIGHT.
a. Provided this option has been outstanding for
at least six (6) months prior to the occurrence of a Hostile Take-Over,
Optionee shall have an unconditional right (exercisable during the thirty
(30)-day period immediately following the consummation of such Hostile
Take-Over) to surrender this option to the Corporation in exchange for a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Take-Over Price of the Option Shares at the time subject to this option over
(ii) the aggregate Exercise Price payable for such shares.
b. To exercise such limited stock appreciation
right, Optionee must, during the applicable thirty (30)-day exercise period,
provide the Corporation with written notice of the option surrender in which
there is specified the number of Option Shares as to which the option is being
surrendered. Such notice must be accompanied by the return of Optionee's copy
of this Agreement, together with any written amendments to such Agreement. The
cash distribution shall be paid to Optionee within five (5) days following such
delivery date, and neither the approval of the Plan Administrator nor the
consent of the Board shall be required in connection with such option surrender
and cash distribution. Upon receipt of such cash distribution, this option
shall be cancelled with respect to the shares subject to the surrendered option
(or the surrendered portion thereof), and Optionee shall cease to have any
further right to acquire those Option Shares. In the event this option is
surrendered for only a portion of the Option Shares, the Corporation shall
issue a new stock option agreement (substantially in the form of this
Agreement) for the balance of the Option Shares.
c. Such limited stock appreciation right shall
in all events terminate upon the expiration or sooner termination of the option
term and may not be assigned or transferred by Optionee.
BPHPA1\DKH\0040260.03
8.
<PAGE> 10
d. For purposes of this Paragraph 19, the
following definitions shall be in effect:
A HOSTILE TAKE-OVER shall be deemed to occur in the
event of a change in ownership of the Corporation effected through the
following transaction:
(i) the direct or indirect
acquisition by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934 (the "1934 Act")) of securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's
stockholders which the Board does not recommend such stockholders to
accept,and
(ii) more than fifty percent
(50%) of the acquired securities are accepted from holders other than
the officers and directors of the Corporation subject to the
short-swing profit restrictions of Section 16 of the 1934 Act.
The TAKE-OVER PRICE per share shall be deemed to be
equal to the greater of (i) the Fair Market Value per share of Common
Stock on the date the option is surrendered to the Corporation in
connection with a Hostile Take-Over, as determined in accordance with
the valuation provisions of Paragraph 10.b, or (ii) the highest
reported price per share of Common Stock paid by the tender offeror in
effecting the Hostile Take-Over.
BPHPA1\DKH\0040260.03
9.
<PAGE> 11
19. PLAN SUMMARY AND PROSPECTUS. Optionee hereby
acknowledges receipt of a copy of the official Plan Summary and Prospectus
attached hereto as Exhibit II. A copy of the Plan is also available upon
request made to the Corporate Secretary at the Corporation's principal offices
at 4675 MacArthur Court, Suite 1250, Newport Beach, California, 92660.
IN WITNESS WHEREOF, CORAM HEALTHCARE CORPORATION has caused
this Stock Option Agreement to be executed on its behalf by its duly-authorized
officer, and Charles A. Laverty has executed this Stock Option Agreement on his
behalf, all as of the date first written above.
CORAM HEALTHCARE CORPORATION
By: ________________________________
Title: _____________________________
__________________________________
CHARLES A. LAVERTY
Address: _________________________
ATTACHMENTS:
EXHIBIT I: NOTICE OF EXERCISE
EXHIBIT II: PLAN SUMMARY AND PROSPECTUS
BPHPA1\DKH\0040260.03
10.
<PAGE> 12
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Coram Healthcare Corporation (the
"Corporation") that I elect to purchase __________ shares of the Corporation's
Common Stock (the "Purchased Shares") at the option exercise price of Eleven
Dollars ($11.00) per share (the "Exercise Price") pursuant to that certain
option (the "Option") granted to me under the Corporation's 1994 Stock
Option/Stock Issuance Plan on July 28, 1994.
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Corporation, I shall hereby pay to the Corporation the
Exercise Price for the Purchased Shares in accordance with the provisions of my
agreement with the Corporation evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a condition for
exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect the payment of the
Exercise Price for the Purchased Shares.
_________________________, 199__
Date
___________________________________
Optionee
Address: __________________________
___________________________________
Print name in exact manner
it is to appear on the
stock certificate: ___________________________________
Address to which certificate
is to be sent, if different
from address above: ___________________________________
___________________________________
Social Security Number: ___________________________________
Employee Number: ___________________________________
BPHPA1\DKH\0040260.03
<PAGE> 13
EXHIBIT II
PLAN SUMMARY AND PROSPECTUS
BPHPA1\DKH\0040260.03
<PAGE> 14
EXHIBIT 99.10
Stock Option Agreement - Tommy H. Carter
<PAGE> 15
CORAM HEALTHCARE CORPORATION
STOCK OPTION AGREEMENT
FOR TOMMY H. CARTER
STOCK OPTION AGREEMENT made this 28th day of July 1994 by and
between Coram Healthcare Corporation, a Delaware corporation (the
"Corporation"), and Tommy H. Carter (the "Optionee").
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board")
has adopted, and the stockholders have approved, the Corporation's 1994 Stock
Option/Stock Issuance Plan (the "Plan") for the purpose of attracting and
retaining the services of key employees (including officers and directors),
non-employee Board members and consultants and other independent advisors.
B. Optionee is an individual who is to render valuable
services to the Corporation or one or more parent or subsidiary corporations,
and this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation's grant of a stock
option to purchase shares of the Corporation's common stock ("Common Stock").
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION.
a. Subject to and upon the terms and conditions
set forth in this Agreement, the Corporation hereby grants to Optionee, as of
July 28, 1994 (the "Grant Date"), a Non-Statutory Stock Option to purchase up
to 94,500 shares of Common Stock (the "Option Shares"). Such Option Shares
shall be purchasable from time to time during the option term at an exercise
price of Eleven Dollars ($11.00) per share (the "Exercise Price").
b. This option is granted to Optionee in full
and complete cancellation of Optionee's pre-existing contractual right to
receive an option grant in September 1994 to purchase 150,000 shares of the
common stock of T2 Medical, Inc., the Corporation's wholly-owned subsidiary.
The option grant commitment was made to Optionee at a time when T2 Medical,
Inc. was still a publicly-owned corporation, and Optionee hereby accepts this
option in lieu of such grant and hereby relinquishes any and all rights
Optionee may otherwise have to receive the T2 Medical, Inc. stock option grant.
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<PAGE> 16
2. OPTION TERM. This option shall have a maximum term
of ten (10) years measured from the Grant Date and shall expire at the close of
business on July 27, 2004 (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 5.
3. LIMITED TRANSFERABILITY. This option shall be
neither transferable nor assignable by Optionee other than a transfer effected
by will or by the laws of descent and distribution following Optionee's death,
and may be exercised, during Optionee's lifetime, only by Optionee.
4. DATES OF EXERCISE. This option shall become
exercisable for the Option Shares in a series of three (3) equal and successive
annual installments upon Optionee's completion of each year of Service over the
three (3)-year period measured from the Grant Date. As the option becomes
exercisable for one or more installments, those installments shall accumulate,
and the option shall remain exercisable for the accumulated installments until
the Expiration Date or sooner termination of the option term under Paragraph 5.
In no event shall this option become exercisable for any additional Option
Shares following Optionee's cessation of Service.
5. CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:
a. Upon Optionee's cessation of Service for any
reason other than death or permanent disability, this option shall immediately
terminate and cease to remain outstanding for any Option Shares for which it is
not otherwise at that time exercisable.
b. Should Optionee cease to remain in Service
for any reason other than death or permanent disability while this option
remains outstanding, then Optionee shall have a six (6)-month period measured
from the date of such cessation of Service in which to exercise this option for
any or all of the Option Shares for which this option is exercisable at the
time of such cessation of Service. In no event, however, may this option be
exercised at any time after the specified Expiration Date. Upon the expiration
of such six (6)-month period or (if earlier) upon the specified Expiration
Date, this option shall terminate and cease to remain outstanding for any
exercisable Option Shares for which this option has not otherwise been
exercised.
c. Should Optionee die within the six (6)-month
period following his cessation of Service, then the personal representative of
Optionee's estate or the person or persons to whom this option is transferred
pursuant to Optionee's will or in accordance with the laws of descent and
distribution shall have the right to exercise the option for any or all of the
Option Shares for which this option is exercisable at the time of Optionee's
cessation of Service. Such right shall lapse, and this option shall terminate
and cease to remain outstanding, upon the earlier of (i) the first anniversary
of the date of Optionee's death or (ii) the Expiration Date.
BPHPA1\DKH\0025709.09
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<PAGE> 17
d. Should Optionee die or become permanently
disabled while in Service, then this option shall immediately become
exercisable for all of the Option Shares at the time subject to this option,
and Optionee shall have a twelve (12)-month period commencing with the date of
such cessation of Service in which to exercise this option for any or all of
those Option Shares as fully-vested shares. In no event, however, may this
option be exercised at any time after the specified Expiration Date. Upon the
expiration of such limited period of exercisability or (if earlier) upon the
Expiration Date, this option shall terminate and cease to remain outstanding.
e. During the limited period of post-Service
exercisability applicable pursuant to Paragraphs 5.b through 5.d, this option
may not be exercised in the aggregate for more than the number of Option Shares
(if any) for which this option is, at the time of Optionee's cessation of
Service, exercisable in accordance with the normal exercise provisions of
Paragraph 4 or the special acceleration provisions of Paragraph 5.d, 6 or 7.
f. Optionee shall be deemed to remain in SERVICE
for so long as Optionee continues to render periodic services to the
Corporation or any parent or subsidiary corporation, whether as a member of the
board of directors or an independent consultant or other non-employee advisor.
g. A corporation shall be considered to be a
SUBSIDIARY corporation of the Corporation if it is a member of an unbroken
chain of corporations beginning with the Corporation, provided each such
corporation in the chain (other than the last corporation) owns, at the time of
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
h. A corporation shall be considered to be a
PARENT corporation of the Corporation if it is a member of an unbroken chain
ending with the Corporation, provided each such corporation in the chain (other
than the Corporation) owns, at the time of determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
i. Optionee shall be deemed to be PERMANENTLY
DISABLED if Optionee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment expected to
result in death or to be of continuous duration of twelve (12) months or more.
j. In the event of a Corporate Transaction (as
defined in Paragraph 6) or Change in Control (as defined in Paragraph 7), the
provisions of Paragraphs 6 and 7.a shall govern the period for which this
option shall remain exercisable following Optionee's cessation of Service and
shall supersede any provisions to the contrary in this Paragraph 5.
BPHPA1\DKH\0025709.09
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<PAGE> 18
6. CORPORATE TRANSACTION.
a. In the event of any of the following
stockholder-approved transactions to which the Corporation is a party (a
"Corporate Transaction"):
(i) a merger or consolidation in which
the Corporation is not the surviving entity, except for a transaction
the principal purpose of which is to change the state in which the
Corporation is incorporated,
(ii) the sale, transfer or other
disposition of all or substantially all of the assets of the
Corporation (including the capital stock of the Corporation's
subsidiary corporations) in complete liquidation or dissolution of the
Corporation, or
(iii) any reverse merger in which the
Corporation is the surviving entity but in which securities possessing
more than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a person
or persons different from the persons holding those securities
immediately prior to such merger,
this option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable for all
of the Option Shares at the time subject to this option and may be exercised
for all or any portion of such shares as fully vested shares. The option as
accelerated shall be assumed by the successor corporation in the Corporate
Transaction and shall remain exercisable for such fully vested Option Shares,
whether or not Optionee continues in Service, until the earlier of (i) the
specified Expiration Date or (ii) the surrender of this option under Paragraph
19.
b. This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
make changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
7. CHANGE IN CONTROL.
a. This option shall, immediately prior to the
effective date of a Change in Control, become fully exercisable for all of the
Option Shares at the time subject to this option and may be exercised for all
or any portion of such shares as fully vested shares. This option shall remain
exercisable for such fully vested Option Shares, whether or not Optionee
continues in Service, until the earlier of (i) the specified Expiration Date or
(ii) the surrender of this option under Paragraph 19.
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<PAGE> 19
b. A CHANGE IN CONTROL shall be deemed to occur
for purposes of this Paragraph 7 in the event of a change in ownership or
control of the Corporation effected through either of the following
transactions:
- the direct or indirect acquisition by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934 (the "1934 Act")) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made
directly to the Corporation's stockholders which the Board does not
recommend such stockholders to accept, or
- a change in the composition of the Board over
a period of thirty-six (36) months or less such that a majority of the
Board members (rounded up to the next whole number) ceases, by reason
of one or more contested elections for Board membership, to be
comprised of individuals who either (A) have been Board members
continuously since the beginning of such period or (B) have been
elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A)
who were still in office at the time such election or nomination was
approved by the Board.
8. ADJUSTMENT IN OPTION SHARES.
a. In the event any change is made to the Common
Stock issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class effected without the
Corporation's receipt of consideration, the Plan Administrator shall make
appropriate adjustments to (i) the number and/or class of securities subject to
this option and (ii) the Exercise Price payable per share in order to prevent
any dilution or enlargement of benefits hereunder. Such adjustments shall be
final, binding and conclusive.
b. Upon the assumption of this option in
connection with any Corporate Transaction under Paragraph 6, this option shall
be appropriately adjusted to apply and pertain to the number and class of
securities which would have been issued to Optionee in the consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to the
Exercise Price payable per share, provided the aggregate Exercise Price payable
hereunder shall remain the same.
BPHPA1\DKH\0025709.09
09/27/94 5.
<PAGE> 20
9. PRIVILEGE OF STOCK OWNERSHIP. The holder of this
option shall not have any of the rights of a stockholder with respect to the
Option Shares until such individual shall have exercised the option and paid
the Exercise Price for the purchased Option Shares.
10. MANNER OF EXERCISING OPTION.
a. In order to exercise this option with respect
to all or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or in the case of exercise after Optionee's death,
Optionee's executor, administrator, heir or legatee, as the case may be) must
take the following actions:
(i) Deliver to the Secretary of the
Corporation an executed notice of exercise in substantially the form
of Exhibit I to this Agreement (the "Exercise Notice") in which there
is specified the number of Option Shares which are to be purchased
under the exercised option.
(ii) Pay the aggregate Exercise Price for
the purchased shares through one or more of the following
alternatives:
(A) full payment in cash or by
check made payable to the Corporation's order;
(B) full payment in shares of
Common Stock held for the requisite period necessary to avoid
a charge to the Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date
(as such terms are defined below);
(C) full payment in a combination
of shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value on the Exercise Date
and cash or check payable to the Corporation's order; or
(D) full payment effected through a
broker-dealer sale and remittance procedure pursuant to which
Optionee shall concurrently provide irrevocable written
instructions to (1) a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all
applicable Federal, state and local income and employment
taxes required to be withheld in connection with such purchase
and (2) the
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<PAGE> 21
Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete
the sale transaction.
(iii) Furnish to the Corporation
appropriate documentation that the person or persons exercising the
option (if other than Optionee) have the right to exercise this
option.
b. For purposes of Paragraph 10.a and for all
other valuation purposes under this Agreement, the Fair Market Value per share
of Common Stock on any relevant date shall be the closing selling price per
share on the date in question on the New York Stock Exchange, as such price is
reported on the composite tape of transactions on such exchange. If there is
no reported closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
c. The Exercise Date shall be the date on which
the executed Exercise Notice is delivered to the Secretary of the Corporation.
Except to the extent the sale and remittance procedure specified above is
utilized in connection with the option exercise, payment of the Exercise Price
for the purchased shares must accompany such notice.
d. As soon as practical after the Exercise Date,
the Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate or certificates representing the
purchased Option Shares.
e. In no event may this option be exercised for
any fractional shares.
11. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
12. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise
of this option and the issuance of Option Shares upon such exercise shall be
subject to compliance by the Corporation and Optionee with all applicable
requirements of law relating thereto and with all applicable regulations of any
stock exchange on which shares of Common Stock may be listed for trading at the
time of such exercise and issuance.
13. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 3, the provisions of this Agreement shall inure
to the benefit of, and be binding upon, the successors, administrators, heirs
and legal representatives of Optionee and the successors and assigns of the
Corporation.
BPHPA1\DKH\0025709.09
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<PAGE> 22
14. LIABILITY OF CORPORATION.
a. If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares which may without
stockholder approval be issued under the Plan, then this option shall be void
with respect to such excess shares unless stockholder approval of an amendment
sufficiently increasing the number of shares issuable under the Plan is
obtained in accordance with the provisions of Section II of Article Six of the
Plan.
b. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation however, shall use its best efforts to
obtain all such approvals.
15. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in
any way be construed or interpreted so as to affect adversely or otherwise
impair the right of the Corporation or the stockholders to terminate Optionee's
Service at any time in accordance with the provisions of applicable law.
16. NOTICES. Any notice required to be given or
delivered to the Corporation under the terms of this Agreement shall be in
writing and addressed to the Corporation in care of the Corporate Secretary at
the Corporation's principal offices at 1125 17th Street, Suite 1500, Denver,
Colorado 80202. Any notice required to be given or delivered to Optionee shall
be in writing and addressed to Optionee at the address indicated below
Optionee's signature line on this Agreement. All notices shall be deemed to
have been given or delivered upon personal delivery or upon deposit in the U.S.
mail, by registered or certified mail, postage prepaid and properly addressed
to the party to be notified.
17. CONSTRUCTION. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the
Plan. All decisions of the Plan Administrator with respect to any question or
issue arising under the Plan or this Agreement shall be conclusive and binding
on all persons having an interest in this option.
18. WITHHOLDING. Optionee shall make appropriate
arrangements with the Corporation or any parent or subsidiary employing
Optionee for the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the exercise of this
option.
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<PAGE> 23
19. LIMITED STOCK APPRECIATION RIGHT.
a. Provided this option has been outstanding for
at least six (6) months prior to the occurrence of a Hostile Take-Over,
Optionee shall have an unconditional right (exercisable during the thirty
(30)-day period immediately following the consummation of such Hostile
Take-Over) to surrender this option to the Corporation in exchange for a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Take-Over Price of the Option Shares at the time subject to this option
(whether or not the option is otherwise exercisable for those Option Shares)
over (ii) the aggregate Exercise Price payable for such shares.
b. To exercise such limited stock appreciation
right, Optionee must, during the applicable thirty (30)-day exercise period,
provide the Corporation with written notice of the option surrender in which
there is specified the number of Option Shares as to which the option is being
surrendered. Such notice must be accompanied by the return of Optionee's copy
of this Agreement, together with any written amendments to such Agreement. The
cash distribution shall be paid to Optionee within five (5) days following such
delivery date, and neither the approval of the Plan Administrator nor the
consent of the Board shall be required in connection with such option surrender
and cash distribution. Upon receipt of such cash distribution, this option
shall be cancelled with respect to the shares subject to the surrendered option
(or the surrendered portion thereof), and Optionee shall cease to have any
further right to acquire those Option Shares. In the event this option is
surrendered for only a portion of the Option Shares, the Corporation shall
issue a new stock option agreement (substantially in the form of this
Agreement) for the balance of the Option Shares.
c. Such limited stock appreciation right shall
in all events terminate upon the expiration or sooner termination of the option
term and may not be assigned or transferred by Optionee.
d. For purposes of this Paragraph 19, the
following definitions shall be in effect:
A HOSTILE TAKE-OVER shall be deemed to occur in the
event of a change in ownership of the Corporation effected through the
following transaction:
(i) the direct or indirect
acquisition by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the 1934
Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to
the
BPHPA1\DKH\0025709.09
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<PAGE> 24
Corporation's stockholders which the Board does not recommend such
stockholders to accept,and
(ii) more than fifty percent
(50%) of the acquired securities are accepted from holders other than
the officers and directors of the Corporation subject to the
short-swing profit restrictions of Section 16 of the 1934 Act.
The TAKE-OVER PRICE per share shall be deemed to be
equal to the greater of (i) the Fair Market Value per share of Common
Stock on the date the option is surrendered to the Corporation in
connection with a Hostile Take-Over, as determined in accordance with
the valuation provisions of Paragraph 10.b, or (ii) the highest
reported price per share of Common Stock paid by the tender offeror in
effecting the Hostile Take-Over.
20. PLAN SUMMARY AND PROSPECTUS. Optionee hereby
acknowledges receipt of a copy of the official Plan Summary and Prospectus
attached hereto as Exhibit II. A copy of the Plan is also available upon
request made to the Corporate Secretary at the Corporation's principal offices
at 1125 17th Street, Suite 1500, Denver, Colorado 80202.
IN WITNESS WHEREOF, CORAM HEALTHCARE CORPORATION has caused
this Stock Option Agreement to be executed on its behalf by its duly-authorized
officer, and Tommy H. Carter has executed this Stock Option Agreement on his
behalf, all as of the date first written above.
CORAM HEALTHCARE CORPORATION
By: ____________________________
Title: _________________________
________________________________
TOMMY H. CARTER
Address: _______________________
________________________________
ATTACHMENTS:
EXHIBIT I: NOTICE OF EXERCISE
EXHIBIT II: PLAN SUMMARY AND PROSPECTUS
BPHPA1\DKH\0025709.09
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<PAGE> 25
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Coram Healthcare Corporation (the
"Corporation") that I elect to purchase __________ shares of the Corporation's
Common Stock (the "Purchased Shares") at the option exercise price of Eleven
Dollars ($11.00) per share (the "Exercise Price") pursuant to that certain
option (the "Option") granted to me under the Corporation's 1994 Stock
Option/Stock Issuance Plan on July 28, 1994.
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Corporation, I shall hereby pay to the Corporation the
Exercise Price for the Purchased Shares in accordance with the provisions of my
agreement with the Corporation evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a condition for
exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect the payment of the
Exercise Price for the Purchased Shares.
__________________________________, 199__
Date
__________________________________
Optionee
Address: _________________________
__________________________________
Print name in exact manner
it is to appear on the
stock certificate: __________________________________
Address to which certificate
is to be sent, if different
from address above: __________________________________
__________________________________
Social Security Number: __________________________________
Employee Number: __________________________________
BPHPA1\DKH\0025709.09
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<PAGE> 26
EXHIBIT II
PLAN SUMMARY AND PROSPECTUS
BPHPA1\DKH\0025709.09
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<PAGE> 1
EXHIBIT 99.10
Stock Option Agreement - Tommy H. Carter
<PAGE> 2
CORAM HEALTHCARE CORPORATION
STOCK OPTION AGREEMENT
FOR TOMMY H. CARTER
STOCK OPTION AGREEMENT made this 28th day of July 1994 by and
between Coram Healthcare Corporation, a Delaware corporation (the
"Corporation"), and Tommy H. Carter (the "Optionee").
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board")
has adopted, and the stockholders have approved, the Corporation's 1994 Stock
Option/Stock Issuance Plan (the "Plan") for the purpose of attracting and
retaining the services of key employees (including officers and directors),
non-employee Board members and consultants and other independent advisors.
B. Optionee is an individual who is to render valuable
services to the Corporation or one or more parent or subsidiary corporations,
and this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation's grant of a stock
option to purchase shares of the Corporation's common stock ("Common Stock").
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION.
a. Subject to and upon the terms and conditions
set forth in this Agreement, the Corporation hereby grants to Optionee, as of
July 28, 1994 (the "Grant Date"), a Non-Statutory Stock Option to purchase up
to 94,500 shares of Common Stock (the "Option Shares"). Such Option Shares
shall be purchasable from time to time during the option term at an exercise
price of Eleven Dollars ($11.00) per share (the "Exercise Price").
b. This option is granted to Optionee in full
and complete cancellation of Optionee's pre-existing contractual right to
receive an option grant in September 1994 to purchase 150,000 shares of the
common stock of T2 Medical, Inc., the Corporation's wholly-owned subsidiary.
The option grant commitment was made to Optionee at a time when T2 Medical,
Inc. was still a publicly-owned corporation, and Optionee hereby accepts this
option in lieu of such grant and hereby relinquishes any and all rights
Optionee may otherwise have to receive the T2 Medical, Inc. stock option grant.
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2. OPTION TERM. This option shall have a maximum term
of ten (10) years measured from the Grant Date and shall expire at the close of
business on July 27, 2004 (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 5.
3. LIMITED TRANSFERABILITY. This option shall be
neither transferable nor assignable by Optionee other than a transfer effected
by will or by the laws of descent and distribution following Optionee's death,
and may be exercised, during Optionee's lifetime, only by Optionee.
4. DATES OF EXERCISE. This option shall become
exercisable for the Option Shares in a series of three (3) equal and successive
annual installments upon Optionee's completion of each year of Service over the
three (3)-year period measured from the Grant Date. As the option becomes
exercisable for one or more installments, those installments shall accumulate,
and the option shall remain exercisable for the accumulated installments until
the Expiration Date or sooner termination of the option term under Paragraph 5.
In no event shall this option become exercisable for any additional Option
Shares following Optionee's cessation of Service.
5. CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date in accordance with the following provisions:
a. Upon Optionee's cessation of Service for any
reason other than death or permanent disability, this option shall immediately
terminate and cease to remain outstanding for any Option Shares for which it is
not otherwise at that time exercisable.
b. Should Optionee cease to remain in Service
for any reason other than death or permanent disability while this option
remains outstanding, then Optionee shall have a six (6)-month period measured
from the date of such cessation of Service in which to exercise this option for
any or all of the Option Shares for which this option is exercisable at the
time of such cessation of Service. In no event, however, may this option be
exercised at any time after the specified Expiration Date. Upon the expiration
of such six (6)-month period or (if earlier) upon the specified Expiration
Date, this option shall terminate and cease to remain outstanding for any
exercisable Option Shares for which this option has not otherwise been
exercised.
c. Should Optionee die within the six (6)-month
period following his cessation of Service, then the personal representative of
Optionee's estate or the person or persons to whom this option is transferred
pursuant to Optionee's will or in accordance with the laws of descent and
distribution shall have the right to exercise the option for any or all of the
Option Shares for which this option is exercisable at the time of Optionee's
cessation of Service. Such right shall lapse, and this option shall terminate
and cease to remain outstanding, upon the earlier of (i) the first anniversary
of the date of Optionee's death or (ii) the Expiration Date.
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d. Should Optionee die or become permanently
disabled while in Service, then this option shall immediately become
exercisable for all of the Option Shares at the time subject to this option,
and Optionee shall have a twelve (12)-month period commencing with the date of
such cessation of Service in which to exercise this option for any or all of
those Option Shares as fully-vested shares. In no event, however, may this
option be exercised at any time after the specified Expiration Date. Upon the
expiration of such limited period of exercisability or (if earlier) upon the
Expiration Date, this option shall terminate and cease to remain outstanding.
e. During the limited period of post-Service
exercisability applicable pursuant to Paragraphs 5.b through 5.d, this option
may not be exercised in the aggregate for more than the number of Option Shares
(if any) for which this option is, at the time of Optionee's cessation of
Service, exercisable in accordance with the normal exercise provisions of
Paragraph 4 or the special acceleration provisions of Paragraph 5.d, 6 or 7.
f. Optionee shall be deemed to remain in SERVICE
for so long as Optionee continues to render periodic services to the
Corporation or any parent or subsidiary corporation, whether as a member of the
board of directors or an independent consultant or other non-employee advisor.
g. A corporation shall be considered to be a
SUBSIDIARY corporation of the Corporation if it is a member of an unbroken
chain of corporations beginning with the Corporation, provided each such
corporation in the chain (other than the last corporation) owns, at the time of
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
h. A corporation shall be considered to be a
PARENT corporation of the Corporation if it is a member of an unbroken chain
ending with the Corporation, provided each such corporation in the chain (other
than the Corporation) owns, at the time of determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
i. Optionee shall be deemed to be PERMANENTLY
DISABLED if Optionee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment expected to
result in death or to be of continuous duration of twelve (12) months or more.
j. In the event of a Corporate Transaction (as
defined in Paragraph 6) or Change in Control (as defined in Paragraph 7), the
provisions of Paragraphs 6 and 7.a shall govern the period for which this
option shall remain exercisable following Optionee's cessation of Service and
shall supersede any provisions to the contrary in this Paragraph 5.
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6. CORPORATE TRANSACTION.
a. In the event of any of the following
stockholder-approved transactions to which the Corporation is a party (a
"Corporate Transaction"):
(i) a merger or consolidation in which
the Corporation is not the surviving entity, except for a transaction
the principal purpose of which is to change the state in which the
Corporation is incorporated,
(ii) the sale, transfer or other
disposition of all or substantially all of the assets of the
Corporation (including the capital stock of the Corporation's
subsidiary corporations) in complete liquidation or dissolution of the
Corporation, or
(iii) any reverse merger in which the
Corporation is the surviving entity but in which securities possessing
more than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a person
or persons different from the persons holding those securities
immediately prior to such merger,
this option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable for all
of the Option Shares at the time subject to this option and may be exercised
for all or any portion of such shares as fully vested shares. The option as
accelerated shall be assumed by the successor corporation in the Corporate
Transaction and shall remain exercisable for such fully vested Option Shares,
whether or not Optionee continues in Service, until the earlier of (i) the
specified Expiration Date or (ii) the surrender of this option under Paragraph
19.
b. This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
make changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
7. CHANGE IN CONTROL.
a. This option shall, immediately prior to the
effective date of a Change in Control, become fully exercisable for all of the
Option Shares at the time subject to this option and may be exercised for all
or any portion of such shares as fully vested shares. This option shall remain
exercisable for such fully vested Option Shares, whether or not Optionee
continues in Service, until the earlier of (i) the specified Expiration Date or
(ii) the surrender of this option under Paragraph 19.
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b. A CHANGE IN CONTROL shall be deemed to occur
for purposes of this Paragraph 7 in the event of a change in ownership or
control of the Corporation effected through either of the following
transactions:
- the direct or indirect acquisition by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934 (the "1934 Act")) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made
directly to the Corporation's stockholders which the Board does not
recommend such stockholders to accept, or
- a change in the composition of the Board over
a period of thirty-six (36) months or less such that a majority of the
Board members (rounded up to the next whole number) ceases, by reason
of one or more contested elections for Board membership, to be
comprised of individuals who either (A) have been Board members
continuously since the beginning of such period or (B) have been
elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A)
who were still in office at the time such election or nomination was
approved by the Board.
8. ADJUSTMENT IN OPTION SHARES.
a. In the event any change is made to the Common
Stock issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class effected without the
Corporation's receipt of consideration, the Plan Administrator shall make
appropriate adjustments to (i) the number and/or class of securities subject to
this option and (ii) the Exercise Price payable per share in order to prevent
any dilution or enlargement of benefits hereunder. Such adjustments shall be
final, binding and conclusive.
b. Upon the assumption of this option in
connection with any Corporate Transaction under Paragraph 6, this option shall
be appropriately adjusted to apply and pertain to the number and class of
securities which would have been issued to Optionee in the consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to the
Exercise Price payable per share, provided the aggregate Exercise Price payable
hereunder shall remain the same.
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<PAGE> 7
9. PRIVILEGE OF STOCK OWNERSHIP. The holder of this
option shall not have any of the rights of a stockholder with respect to the
Option Shares until such individual shall have exercised the option and paid
the Exercise Price for the purchased Option Shares.
10. MANNER OF EXERCISING OPTION.
a. In order to exercise this option with respect
to all or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or in the case of exercise after Optionee's death,
Optionee's executor, administrator, heir or legatee, as the case may be) must
take the following actions:
(i) Deliver to the Secretary of the
Corporation an executed notice of exercise in substantially the form
of Exhibit I to this Agreement (the "Exercise Notice") in which there
is specified the number of Option Shares which are to be purchased
under the exercised option.
(ii) Pay the aggregate Exercise Price for
the purchased shares through one or more of the following
alternatives:
(A) full payment in cash or by
check made payable to the Corporation's order;
(B) full payment in shares of
Common Stock held for the requisite period necessary to avoid
a charge to the Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date
(as such terms are defined below);
(C) full payment in a combination
of shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value on the Exercise Date
and cash or check payable to the Corporation's order; or
(D) full payment effected through a
broker-dealer sale and remittance procedure pursuant to which
Optionee shall concurrently provide irrevocable written
instructions to (1) a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all
applicable Federal, state and local income and employment
taxes required to be withheld in connection with such purchase
and (2) the
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<PAGE> 8
Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete
the sale transaction.
(iii) Furnish to the Corporation
appropriate documentation that the person or persons exercising the
option (if other than Optionee) have the right to exercise this
option.
b. For purposes of Paragraph 10.a and for all
other valuation purposes under this Agreement, the Fair Market Value per share
of Common Stock on any relevant date shall be the closing selling price per
share on the date in question on the New York Stock Exchange, as such price is
reported on the composite tape of transactions on such exchange. If there is
no reported closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
c. The Exercise Date shall be the date on which
the executed Exercise Notice is delivered to the Secretary of the Corporation.
Except to the extent the sale and remittance procedure specified above is
utilized in connection with the option exercise, payment of the Exercise Price
for the purchased shares must accompany such notice.
d. As soon as practical after the Exercise Date,
the Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate or certificates representing the
purchased Option Shares.
e. In no event may this option be exercised for
any fractional shares.
11. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
12. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise
of this option and the issuance of Option Shares upon such exercise shall be
subject to compliance by the Corporation and Optionee with all applicable
requirements of law relating thereto and with all applicable regulations of any
stock exchange on which shares of Common Stock may be listed for trading at the
time of such exercise and issuance.
13. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 3, the provisions of this Agreement shall inure
to the benefit of, and be binding upon, the successors, administrators, heirs
and legal representatives of Optionee and the successors and assigns of the
Corporation.
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14. LIABILITY OF CORPORATION.
a. If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares which may without
stockholder approval be issued under the Plan, then this option shall be void
with respect to such excess shares unless stockholder approval of an amendment
sufficiently increasing the number of shares issuable under the Plan is
obtained in accordance with the provisions of Section II of Article Six of the
Plan.
b. The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation however, shall use its best efforts to
obtain all such approvals.
15. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in
any way be construed or interpreted so as to affect adversely or otherwise
impair the right of the Corporation or the stockholders to terminate Optionee's
Service at any time in accordance with the provisions of applicable law.
16. NOTICES. Any notice required to be given or
delivered to the Corporation under the terms of this Agreement shall be in
writing and addressed to the Corporation in care of the Corporate Secretary at
the Corporation's principal offices at 1125 17th Street, Suite 1500, Denver,
Colorado 80202. Any notice required to be given or delivered to Optionee shall
be in writing and addressed to Optionee at the address indicated below
Optionee's signature line on this Agreement. All notices shall be deemed to
have been given or delivered upon personal delivery or upon deposit in the U.S.
mail, by registered or certified mail, postage prepaid and properly addressed
to the party to be notified.
17. CONSTRUCTION. This Agreement and the option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the
Plan. All decisions of the Plan Administrator with respect to any question or
issue arising under the Plan or this Agreement shall be conclusive and binding
on all persons having an interest in this option.
18. WITHHOLDING. Optionee shall make appropriate
arrangements with the Corporation or any parent or subsidiary employing
Optionee for the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the exercise of this
option.
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19. LIMITED STOCK APPRECIATION RIGHT.
a. Provided this option has been outstanding for
at least six (6) months prior to the occurrence of a Hostile Take-Over,
Optionee shall have an unconditional right (exercisable during the thirty
(30)-day period immediately following the consummation of such Hostile
Take-Over) to surrender this option to the Corporation in exchange for a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Take-Over Price of the Option Shares at the time subject to this option
(whether or not the option is otherwise exercisable for those Option Shares)
over (ii) the aggregate Exercise Price payable for such shares.
b. To exercise such limited stock appreciation
right, Optionee must, during the applicable thirty (30)-day exercise period,
provide the Corporation with written notice of the option surrender in which
there is specified the number of Option Shares as to which the option is being
surrendered. Such notice must be accompanied by the return of Optionee's copy
of this Agreement, together with any written amendments to such Agreement. The
cash distribution shall be paid to Optionee within five (5) days following such
delivery date, and neither the approval of the Plan Administrator nor the
consent of the Board shall be required in connection with such option surrender
and cash distribution. Upon receipt of such cash distribution, this option
shall be cancelled with respect to the shares subject to the surrendered option
(or the surrendered portion thereof), and Optionee shall cease to have any
further right to acquire those Option Shares. In the event this option is
surrendered for only a portion of the Option Shares, the Corporation shall
issue a new stock option agreement (substantially in the form of this
Agreement) for the balance of the Option Shares.
c. Such limited stock appreciation right shall
in all events terminate upon the expiration or sooner termination of the option
term and may not be assigned or transferred by Optionee.
d. For purposes of this Paragraph 19, the
following definitions shall be in effect:
A HOSTILE TAKE-OVER shall be deemed to occur in the
event of a change in ownership of the Corporation effected through the
following transaction:
(i) the direct or indirect
acquisition by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the 1934
Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to
the
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<PAGE> 11
Corporation's stockholders which the Board does not recommend such
stockholders to accept,and
(ii) more than fifty percent
(50%) of the acquired securities are accepted from holders other than
the officers and directors of the Corporation subject to the
short-swing profit restrictions of Section 16 of the 1934 Act.
The TAKE-OVER PRICE per share shall be deemed to be
equal to the greater of (i) the Fair Market Value per share of Common
Stock on the date the option is surrendered to the Corporation in
connection with a Hostile Take-Over, as determined in accordance with
the valuation provisions of Paragraph 10.b, or (ii) the highest
reported price per share of Common Stock paid by the tender offeror in
effecting the Hostile Take-Over.
20. PLAN SUMMARY AND PROSPECTUS. Optionee hereby
acknowledges receipt of a copy of the official Plan Summary and Prospectus
attached hereto as Exhibit II. A copy of the Plan is also available upon
request made to the Corporate Secretary at the Corporation's principal offices
at 1125 17th Street, Suite 1500, Denver, Colorado 80202.
IN WITNESS WHEREOF, CORAM HEALTHCARE CORPORATION has caused
this Stock Option Agreement to be executed on its behalf by its duly-authorized
officer, and Tommy H. Carter has executed this Stock Option Agreement on his
behalf, all as of the date first written above.
CORAM HEALTHCARE CORPORATION
By: ____________________________
Title: _________________________
________________________________
TOMMY H. CARTER
Address: _______________________
________________________________
ATTACHMENTS:
EXHIBIT I: NOTICE OF EXERCISE
EXHIBIT II: PLAN SUMMARY AND PROSPECTUS
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EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Coram Healthcare Corporation (the
"Corporation") that I elect to purchase __________ shares of the Corporation's
Common Stock (the "Purchased Shares") at the option exercise price of Eleven
Dollars ($11.00) per share (the "Exercise Price") pursuant to that certain
option (the "Option") granted to me under the Corporation's 1994 Stock
Option/Stock Issuance Plan on July 28, 1994.
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Corporation, I shall hereby pay to the Corporation the
Exercise Price for the Purchased Shares in accordance with the provisions of my
agreement with the Corporation evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a condition for
exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect the payment of the
Exercise Price for the Purchased Shares.
__________________________________, 199__
Date
__________________________________
Optionee
Address: _________________________
__________________________________
Print name in exact manner
it is to appear on the
stock certificate: __________________________________
Address to which certificate
is to be sent, if different
from address above: __________________________________
__________________________________
Social Security Number: __________________________________
Employee Number: __________________________________
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<PAGE> 13
EXHIBIT II
PLAN SUMMARY AND PROSPECTUS
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<PAGE> 1
EXHIBIT 99.11
Stock Issuance Agreement
<PAGE> 2
CORAM HEALTHCARE CORPORATION
STOCK ISSUANCE AGREEMENT
AGREEMENT made as of this ___ day of ____________, 199__ by and between
Coram Healthcare Corporation, a Delaware corporation (the "Corporation"), and
___________________________, a participant ("Participant") in the Corporation's
1994 Stock Option/Stock Issuance Plan (the "Plan").
I. PURCHASE OF SHARES
A. PURCHASE. Participant hereby purchases, and the Corporation hereby
sells to Participant, __________ shares of the Corporation's Common Stock ( the
"Shares") at a purchase price of $_________ per share (the "Purchase Price")
pursuant to the provisions of the Plan.
B. PAYMENT. Concurrently with the execution of this Agreement, Participant
shall deliver to the Secretary of the Corporation: (i) the aggregate Purchase
Price payable for the Shares in cash or check payable to the Corporation's
order and (ii) a duly-executed Assignment Separate from Certificate (in the
form attached hereto as Exhibit I).
C. DELIVERY OF CERTIFICATES. The certificates representing the purchased
Shares shall be held in escrow by the Secretary of the Corporation as provided
in Article IV.
D. STOCKHOLDER RIGHTS. Until such time as the Corporation actually
exercises its repurchase right under this Agreement, Participant (or any
successor in interest) shall have all the rights of a stockholder (including
voting, dividend and liquidation rights) with respect to the purchased Shares,
including the Shares held in escrow under Article IV, subject, however, to the
transfer restrictions of Article III.
E. COMPLIANCE WITH LAW. Under no circumstances shall shares of the
Corporation's Common Stock or other assets be issued or delivered to
Participant pursuant to the provisions of this Agreement unless and until, in
the opinion of counsel for the Corporation or its successors, there shall have
been compliance with all applicable requirements of the Federal and state
securities laws, all applicable listing requirements of any securities exchange
on which the Common Stock is at the time listed for trading and all other
requirements of law or of any regulatory bodies having jurisdiction over such
issuance and delivery.
II. REPURCHASE RIGHT
A. GRANT. The Corporation is hereby granted the right (the "Repurchase
Right"), exercisable at any time during the sixty (60)-day period following the
date
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<PAGE> 3
Participant ceases for any reason to remain in Service, to repurchase at the
Purchase Price any or all of the Shares in which Participant has not acquired a
vested interest in accordance with the vesting provisions of paragraph C of
this Article II (such shares to be hereinafter called the "Unvested Shares").
For purposes of this Agreement, Participant shall be deemed to remain in
SERVICE for so long as Participant continues to render periodic services to the
Corporation or any parent or subsidiary corporation, whether as an employee, a
non-employee member of the board of directors or an independent consultant or
advisor. However, should Participant undertake a leave of absence for any
reason, his or her Service shall be deemed to cease as of the commencement date
of such leave, unless (i) continued vesting in the Shares during the period of
such leave is specifically authorized by the Plan Administrator in writing and
(ii) Participant returns to active Service on or before the specified
expiration date of such leave.
B. EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right shall be
exercisable by written notice delivered to the Owner of the Unvested Shares (as
determined pursuant to paragraph D of Article III) prior to the expiration of
the sixty (60)-day period specified in paragraph A of this Article II. The
notice shall indicate the number of Unvested Shares to be repurchased and the
date on which the repurchase is to be effected, such date to be not more than
thirty (30) days after the date of the notice. To the extent one or more
certificates representing Unvested Shares may have been previously delivered
out of escrow to the Owner, then the Owner shall, prior to the close of
business on the date specified for the repurchase, deliver to the Secretary of
the Corporation the certificates representing the Unvested Shares to be
repurchased, each certificate to be properly endorsed for transfer. The
Corporation shall, concurrently with the receipt of such stock certificates
(either from escrow in accordance with paragraph C of Article IV or from the
Owner as herein provided), pay to the Owner in cash or cash equivalents
(including the cancellation of any purchase-money indebtedness), an amount
equal to the Purchase Price previously paid for the Unvested Shares which are
to be repurchased.
C. TERMINATION OF THE REPURCHASE RIGHT.
1. The Repurchase Right shall terminate with respect to any Unvested
Shares for which it is not timely exercised under paragraph B of this Article
II.
2. Participant shall acquire a vested interest in the Unvested Shares,
and the Repurchase Right shall accordingly lapse with respect to those Shares,
in accordance with the following schedule:
(i) Participant shall vest in twenty-five percent (25%) of the Shares
upon completion of one (1) year of continuous Service measured from
_______________, 199__.
(ii) Participant shall vest in the balance of the Shares in a series of
thirty six (36) equal monthly installments upon the Participant's
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<PAGE> 4
completion of each successive month of Service within the thirty-six
(36)-month period measured from the initial vesting date under subparagraph
(i) above.
(iii) In no event shall any additional Unvested Shares vest following the
Participant's cessation of Service for any reason.
D. FRACTIONAL SHARES. No fractional shares shall be repurchased by the
Corporation. Accordingly, should the Repurchase Right extend to a fractional
share at the time of Participant's cessation of Service, then such fractional
share shall be added to any fractional share in which Participant is at such
time vested in order to make one whole vested share no longer subject to the
Repurchase Right.
E. ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, any new, substituted or
additional securities or other property (including money paid other than as a
regular cash dividend) which is by reason of any such transaction distributed
with respect to the Shares shall be immediately subject to the Repurchase
Right, but only to the extent the Shares are at the time covered by such right.
Appropriate adjustments to reflect the distribution of such securities or other
property shall be made to the number of Shares hereunder and to the price per
share to be paid upon the exercise of the Repurchase Right in order to reflect
the effect of any such transaction upon the Corporation's capital structure;
provided, however, that the aggregate purchase price payable under the
Repurchase Right shall remain the same.
F. CORPORATE TRANSACTION.
1. Upon the occurrence of any of the following stockholder-approved
transactions to which the Corporation is a party (a "Corporate Transaction"):
(i) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is
to change the state in which the Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or substantially all
of the assets of the Corporation (including the capital stock of any of the
Corporation's subsidiary corporations) in complete liquidation or dissolution
of the Corporation, or
(iii) any reverse merger in which the Corporation is the surviving entity
but in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding
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securities are transferred to a person or persons different from the persons
holding those securities immediately prior to such merger,
the Repurchase Right shall automatically terminate in its entirety, and
Participant shall immediately acquire a vested interest in all the Unvested
Shares, except to the extent the Repurchase Right is expressly assigned to the
successor corporation (or its parent company) in connection with the Corporate
Transaction.
2. To the extent the Repurchase Right remains in effect following such
Corporate Transaction, the Repurchase Right shall apply to the new securities
or other property (including money paid other than as a regular cash dividend)
issued in exchange for the Unvested Shares in consummation of the Corporate
Transaction. Appropriate adjustments shall be made to the price per share
payable upon exercise of the Repurchase Right to reflect the effect of the
Corporate Transaction upon the Corporation's capital structure; provided,
however, that the aggregate purchase price payable under the Repurchase Right
shall remain the same.
3. Immediately upon Participant's cessation of Service by reason of an
Involuntary Termination within eighteen (18) months after a Corporate
Transaction in which the Corporation's Repurchase Right is assigned to the
successor entity in accordance with paragraph F.1 of this Article II, all
Unvested Shares at the time outstanding under the Issuance Agreement shall
immediately vest and the Repurchase Right shall terminate in its entirety with
respect to those Unvested Shares.
For purposes of this Agreement, Participant shall be deemed to cease
Service by reason of an INVOLUNTARY TERMINATION if such cessation of Service
occurs:
(i) upon Participant's dismissal or discharge by the Corporation for
reasons other than Misconduct, or
(ii) upon Participant's voluntary resignation following (A) a change in
Participant's position with the Corporation which materially reduces
Participant's level of responsibility, (B) a reduction in Participant's level
of compensation (including base salary, fringe benefits and any
non-discretionary and objective-standard incentive payment or bonus award) by
more than five percent (5%) in the aggregate or (C) a relocation of
Participant's place of employment by more than fifty (50) miles from
Participant's place of employment immediately prior to the Corporate
Transaction, provided and only if such change, reduction or relocation is
effected by the Corporation without Participant's consent.
For purposes of this Agreement, Participant's Service shall be deemed to
have been terminated for MISCONDUCT if such termination occurs by reason of
Participant's commission of any act of fraud, embezzlement or dishonesty, any
unauthorized
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use or disclosure by Participant of confidential information or trade secrets
of the Corporation or its parent or subsidiary corporations, or any other
intentional misconduct by Participant adversely affecting the business or
affairs of the Corporation in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation or any parent or subsidiary may consider as grounds for the
dismissal or discharge of Participant or any other individual in the Service of
the Corporation.
III. TRANSFER RESTRICTIONS
A. RESTRICTION ON TRANSFER. Participant shall not transfer, assign,
encumber or otherwise dispose of any Unvested Shares subject to the
Corporation's Repurchase Right under Article II. Such restrictions on
transfer, however, shall not be applicable to (i) a gratuitous transfer of the
Unvested Shares made to Participant's spouse or issue, including adopted
children, or to a trust for the exclusive benefit of Participant or
Participant's spouse or issue, (ii) a transfer of title to the Unvested Shares
effected pursuant to Participant will or the laws of intestate succession
following Participant's death or (iii) a transfer to the Corporation in pledge
as security for any purchase-money indebtedness incurred by Participant in
connection with the acquisition of the Unvested Shares.
B. RESTRICTIVE LEGENDS. The stock certificates for the Unvested Shares
shall be endorsed with the following restrictive legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE SUBJECT TO (I)
CERTAIN TRANSFER RESTRICTIONS AND (II) CANCELLATION OR REPURCHASE IN THE EVENT
THE REGISTERED HOLDER (OR HIS/HER PREDECESSOR IN INTEREST) CEASES TO REMAIN IN
THE CORPORATION'S SERVICE. SUCH TRANSFER RESTRICTIONS AND THE TERMS AND
CONDITIONS OF SUCH CANCELLATION OR REPURCHASE ARE SET FORTH IN A STOCK ISSUANCE
AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER (OR HIS/HER
PREDECESSOR IN INTEREST) DATED ______________, 199__, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION.
C. TRANSFEREE OBLIGATIONS. Each person (other than the Corporation) to
whom the Unvested Shares are transferred by means of one of the permitted
transfers specified in paragraph A of this Article III must, as a condition
precedent to the validity of such transfer, acknowledge in writing to the
Corporation that such person is bound by the provisions of this Agreement and
that the transferred Shares are subject to the Corporation's Repurchase Right
to the same extent such Shares would be so subject if retained by Participant.
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D. DEFINITION OF OWNER. For purposes of Articles II and IV of this
Agreement, the term "Owner" shall include Participant and all subsequent
holders of the Shares who derive their chain of ownership through a permitted
transfer from Participant in accordance with paragraph A of this Article III.
IV. ESCROW
A. DEPOSIT. Upon issuance, the certificates for any Unvested Shares
purchased hereunder shall be deposited in escrow with the Secretary of the
Corporation to be held in accordance with the provisions of this Article IV.
Each deposited certificate shall be accompanied by a duly- executed Assignment
Separate from Certificate in the form of Exhibit I. The deposited
certificates, together with any other assets or securities from time to time
deposited with the Secretary of the Corporation pursuant to the requirements of
this Agreement, shall remain in escrow until such time or times as the
certificates (or other assets and securities) are to be released or otherwise
surrendered for cancellation in accordance with paragraph C of this Article IV.
Upon delivery of the certificates (or other assets and securities) to the
Secretary of the Corporation, the Owner shall be issued an instrument of
deposit acknowledging the number of Unvested Shares (or other assets and
securities) delivered in escrow.
B. RECAPITALIZATION. All regular cash dividends on the Unvested Shares (or
on any other securities at the time held in escrow) shall be paid directly to
the Owner and shall not be held in escrow. However, in the event of any stock
dividend, stock split, recapitalization, combination of shares, exchange of
shares or other change affecting the Corporation's outstanding Common Stock as
a class effected without the Corporation's receipt of consideration or in the
event of any reorganization of the Corporation (including, without limitation,
a Corporate Transaction), any new, substituted or additional securities or
other property (including money paid other than as a regular cash dividend)
which is by reason of such transaction distributed with respect to the Unvested
Shares shall be immediately delivered to the Secretary of the Corporation to be
held in escrow under this Article IV, but only to the extent the Unvested
Shares are at the time subject to the escrow requirements of paragraph A of
this Article IV.
C. RELEASE/SURRENDER. The Unvested Shares, together with any other assets
or securities held in escrow hereunder, shall be subject to the following terms
and conditions relating to their release from escrow or their surrender to the
Corporation for repurchase and cancellation:
1. Should the Corporation (or its assignees) elect to exercise the
Repurchase Right under Article II with respect to any Unvested Shares, then the
escrowed certificates for such Unvested Shares (together with any other assets
or securities attributable thereto) shall be delivered to the Corporation
concurrently with the payment to the Owner, in cash or cash equivalent
(including the cancellation of any purchase-money indebtedness),
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of an amount equal to the aggregate Purchase Price for such Unvested Shares,
and the Owner shall cease to have any further rights or claims with respect to
such Unvested Shares (or other assets or securities attributable to such
Unvested Shares).
2. As the interest of Participant in the Unvested Shares (or any other
assets or securities attributable thereto) vests in accordance with the
provisions of Article II, the certificates for such vested Shares (as well as
all other vested assets and securities) shall be released from escrow and
delivered to the Owner in accordance with the following schedule:
a. The vested Shares (or other vested assets and securities) shall be
released from escrow at semi-annual intervals, beginning one (1) year after the
vesting commencement date set forth in paragraph C.2 of Article II.
b. Upon Participant's cessation of Service, any escrowed Shares (or other
assets or securities) in which Participant is at the time vested shall be
promptly released from escrow.
c. Upon any earlier termination of the Corporation's Repurchase Right in
accordance with the applicable provisions of Article II, any Shares (or other
assets or securities) at the time held in escrow hereunder shall promptly be
released to the Owner as fully vested securities or other property.
V. SPECIAL TAX ELECTION
A. SECTION 83(B) ELECTION. Participant shall be subject to income taxation
with respect to the Unvested Shares in accordance with the applicable tax
principles of Section 83 of the Internal Revenue Code of 1986, as amended (the
"Code"). Participant accordingly understands that there will be no taxation of
the Unvested Shares at the time of their purchase under this Agreement, but as
the Corporation's Repurchase Right with respect to such Unvested Shares lapses
in increments over Participant's period of Service, the excess of the fair
market value of the Shares which vest on each such lapse date over the Purchase
Price paid for such shares will be reportable as current ordinary income and
will be subject to applicable tax withholding requirements. Participant
understands, however, that he or she may elect under Code Section 83(b) to be
taxed at the time the Unvested Shares are purchased under this Agreement,
rather than when and as the Corporation's Repurchase Right lapses with respect
to those Unvested Shares. Such election must be filed with the Internal
Revenue Service within thirty (30) days after the date of this Agreement. Even
if the fair market value of the Unvested Shares purchased under this Agreement
is at that time equal to the Purchase Price paid for such shares (and thus no
tax is payable), the election must be made to avoid adverse tax consequences in
the
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future. THE FORM FOR MAKING THIS ELECTION IS ATTACHED AS EXHIBIT II HERETO.
PARTICIPANT UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE THIRTY
(30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY
PARTICIPANT AS THE CORPORATION'S REPURCHASE RIGHT LAPSES WITH RESPECT TO THE
UNVESTED SHARES PURCHASED HEREUNDER.
B. FILING RESPONSIBILITY. PARTICIPANT ACKNOWLEDGES THAT IT IS
PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY
ELECTION UNDER CODE SECTION 83(B), EVEN IF PARTICIPANT REQUESTS THE CORPORATION
OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS/HER BEHALF.
VI. GENERAL PROVISIONS
A. ASSIGNMENT. The Corporation may assign its Repurchase Right under
Article II to any person or entity selected by the Board, including (without
limitation) one or more stockholders of the Corporation.
B. DEFINITIONS. For purposes of this Agreement, the following provisions
shall be applicable in determining the parent and subsidiary corporations of
the Corporation:
(i) Any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation shall be considered to be a PARENT
of the Corporation, provided each such corporation in the unbroken chain
(other than the Corporation) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
(ii) Each corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation shall be considered to be a
SUBSIDIARY of the Corporation, provided each such corporation in the unbroken
chain (other than the last corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
C. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement or in the
Plan shall confer upon Participant any right to continue in the Service of the
Corporation (or any parent or subsidiary corporation of the Corporation
employing or retaining Participant) for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any such parent or subsidiary) or
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Participant, which rights are hereby expressly reserved by each, to terminate
Participant's Service at any time for any reason whatsoever, with or without
cause.
D. NOTICES. Any notice required in connection with (i) the Repurchase
Right or (ii) the disposition of any Unvested Shares covered thereby shall be
given in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States mail, registered or certified, postage prepaid and
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days prior written notice under this paragraph
D to the other party to this Agreement.
E. NO WAIVER. The failure of the Corporation (or its assignees) in any
instance to exercise the Repurchase Right granted under Article II shall not
constitute a waiver of any other repurchase rights that may subsequently arise
under the provisions of this Agreement or any other agreement between the
Corporation and Participant. No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.
F. CANCELLATION OF SHARES. If the Corporation (or its assignees) shall
make available, at the time and place and in the amount and form provided in
this Agreement, the consideration for the Unvested Shares to be repurchased in
accordance with the provisions of this Agreement, then from and after such
time, the person from whom such Unvested Shares are to be repurchased shall no
longer have any rights as a holder of such Shares (other than the right to
receive payment of such consideration in accordance with this Agreement), and
such Shares shall be deemed purchased in accordance with the applicable
provisions hereof and the Corporation (or its assignees) shall be deemed the
owner and holder of such Shares, whether or not the certificates therefor have
been delivered as required by this Agreement.
VII. MISCELLANEOUS PROVISIONS
A. PARTICIPANT UNDERTAKING. Participant hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation may
in its judgment deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on either Participant or the
Shares pursuant to the express provisions of this Agreement.
B. AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and shall in all
respects be construed in conformity with the express terms and provisions of
the Plan.
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C. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and performed in such State without resort to that
State's conflict-of-laws provisions.
D. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Participant and Participant's legal representatives, heirs,
legatees, distributees, assigns and transferees by operation of law, whether or
not any such person shall have become a party to this Agreement and have agreed
in writing to join herein and be bound by the terms and conditions hereof.
E. COUNTERPARTS. This Agreement may be executed in one or more
counterparts. Each such counterpart shall be deemed to be an original and all
such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.
CORAM HEALTHCARE CORPORATION
By: ______________________________________
Title: ___________________________________
Address: 4675 MacArthur Court
Suite 1250
Newport Beach, California 92660
__________________________________________
PARTICIPANT
Address: _________________________________
__________________________________________
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EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED ______________________
hereby sell(s), assign(s) and transfer(s) unto Coram Healthcare Corporation
(the "Corporation"), ___________(_______) shares of the Common Stock of the
Corporation standing in ___________________ name on the books of the
Corporation represented by Certificate No. ___________________ herewith and do
hereby irrevocably constitute and appoint __________ ____________________
Attorney to transfer the said stock on the books of the Corporation with full
power of substitution in the premises.
Dated: ______________________
Signature ____________________________
INSTRUCTION: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Corporation to exercise its
Repurchase Right set forth in the Agreement without requiring additional
signatures on the part of Participant.
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EXHIBIT II
SECTION 83(B) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made is
____________ shares of the common stock of Coram Healthcare
Corporation.
(3) The property was issued on _____________, 199__.
(4) The taxable year in which the election is being made is the calendar
year 199__.
(5) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at the original purchase
price if for any reason taxpayer's employment with the issuer is
terminated. Such repurchase right will lapse in a series of annual
and monthly installments over a four (4)-year period beginning on
_____, 199__ and ending on ____________, 199__.
(6) The fair market value at the time of transfer (determined without
regard to any restriction other than a restriction which by its terms
will never lapse) is $____________ per share.
(7) The amount paid for such property is $___________ per share.
(8) A copy of this statement was furnished to Coram Healthcare Corporation
for whom taxpayer rendered the services underlying the transfer of
property.
(9) This statement is executed as of: _______________________.
__________________________ ______________________________
Spouse (if any) Taxpayer
This form must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns. The filing must be made
within thirty (30) days after the execution date of the Stock Issuance
Agreement and should be made by registered or certified mail, return receipt
requested. Participant must retain two (2) copies of the completed form for
filing with his or her Federal and state tax returns for the current tax year
and an additional copy for his or her records.
<PAGE> 14
EXHIBIT 99.12
Addendum to Stock Issuance Agreement (Special Tax Elections)
<PAGE> 1
EXHIBIT 99.12
Addendum to Stock Issuance Agreement (Special Tax Elections)
<PAGE> 2
ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are hereby made a
part of, that certain Stock Issuance Agreement dated 2~ (the "Issuance
Agreement") by and between Coram Healthcare Corporation (the "Corporation") and
1~ ("Participant") evidencing the stock issuance on such date to Participant
under the terms of the Corporation's 1994 Stock Option/Stock Issuance Plan, and
such provisions shall be effective immediately. All capitalized terms used in
this Addendum, to the extent not otherwise specifically defined herein, shall
have the meanings assigned to such terms in the Issuance Agreement.
SPECIAL TAX ELECTIONS
1. STOCK WITHHOLDING. Participant is hereby granted the election to have
the Corporation withhold, as and when Participant vests in the Shares, a
portion of those vested Shares with an aggregate Fair Market Value not to
exceed one hundred percent (100%) of the applicable Federal, state and local
income and employment tax withholding liability (the "Withholding Taxes")
incurred by Participant in connection with the vesting of those Shares. Such
election shall only be exercisable in the event Participant does not otherwise
make an Internal Revenue Code Section 83(b) election to be taxed on the issued
Shares at the time of their initial issuance pursuant to the Issuance
Agreement.
Any such exercise of the election must be effected in accordance with the
following terms and conditions:
a. The election must be made on or before the date the liability for the
Withholding Taxes incurred in connection with the vesting of the Shares is
determined (the "Tax Determination Date").
b. The election shall be irrevocable.
c. The election shall be subject to the approval of the Plan Administrator,
and none of the issued Shares shall be withheld in satisfaction of the
Withholding Taxes, except to the extent the election is approved by the Plan
Administrator.
d. The vested Shares withheld pursuant to the election shall be valued at
Fair Market Value in accordance with the valuation procedures set forth in
Section II of Article One of the Plan.
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e. In no event may the number of Shares requested to be withheld exceed in
Fair Market Value the dollar amount of the Withholding Taxes incurred in
connection with the vesting of the issued Shares.
If the stock withholding election is made by Participant at a time when
such individual is an officer or director of the Corporation subject to the
short-swing profit restrictions of Section 16(b) of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), then the following limitations, in
addition to the preceding provisions, shall also be applicable:
a. The election shall not become effective at any time prior
to the expiration of the six (6)-month period measured from the later of
the issue date of the Unvested Shares to which such election pertains or
the Effective Date of this Addendum indicated below, and no Shares shall
be withheld in connection with any Tax Determination Date which occurs
before the expiration of such six (6)-month period.
b. The stock withholding election must be made in accordance
with the following limitations:
(i) Such election must be made at least six (6) months before
the Tax Determination Date, or
(ii) Such election must be exercised in the quarterly "window"
period in which or immediately prior to which the Tax Determination
Date occurs. Quarterly window periods shall begin on the third (3rd)
business day following the date of public release of each quarterly
or annual statement of the Corporation's sales and earnings and end
on the earlier of the twelfth (12th) business day following such
release date or the Tax Determination Date.
c. The six (6)-month periods specified in clauses a and b
shall not b applicable in the event of Participant's death or disability.
2. STOCK DELIVERY. Participant is hereby granted the election to deliver
to the Corporation vested shares of the Corporation's Common Stock previously
acquired by such individual (other than in connection with the particular share
issuance or share vesting triggering the Withholding Taxes) with an aggregate
Fair Market Value not to exceed one hundred percent (100%) of the Withholding
Taxes incurred by Participant either at the time the Shares are initially
issued pursuant to the Issuance Agreement (in the event Participant elects to
be taxed on the Shares at such time in accordance with Internal Revenue Code
Section 83(b)) or at the time the Shares subsequently vest in one or more
installments over the term of the Issuance Agreement.
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Any such exercise of the election must be effected in accordance with the
following terms and conditions:
a. The election shall be made on or before the date the liability for the
Withholding Taxes is determined (the "Tax Determination Date").
b. The election shall be irrevocable.
c. The election shall be subject to the approval of the Plan
Administrator, and none of the delivered shares shall be accepted in
satisfaction of the Withholding Taxes, except to the extent the election is
approved by the Plan Administrator.
d. The delivered shares shall be valued at Fair Market Value in accordance
with the valuation procedures set forth in Section II of Article One of the
Plan.
e. In no event may the number of delivered Shares exceed in Fair Market
Value the dollar amount of the Withholding Taxes.
No additional restrictions or limitations shall be applicable to any stock
delivery election made by Participant, whether or not such individual is at the
time an officer or director of the Corporation subject to the short-swing
profit restrictions of Section 16(b) of the 1934 Act.
IN WITNESS WHEREOF, Coram Healthcare Corporation has caused this Addendum to
be executed by its duly-authorized officer, and Participant has executed this
Addendum, all as of the Effective Date specified below.
CORAM HEALTHCARE CORPORATION
By: _____________________________________
Title: __________________________________
_________________________________________
1~, PARTICIPANT
EFFECTIVE DATE: ____________, 199__
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<PAGE> 1
EXHIBIT 99.13
Addendum to Stock Issuance Agreement
(Involuntary Termination following Change in Control)
<PAGE> 2
ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are hereby made a
part of, that certain Stock Issuance Agreement dated 2~ (the "Issuance
Agreement") by and between Coram Healthcare Corporation (the "Corporation") and
1~ ("Participant") evidencing the stock issuance on such date to Participant
under the terms of the Corporation's 1994 Stock Option/Stock Issuance Plan, and
such provisions shall be effective immediately. All capitalized terms used in
this Addendum, to the extent not otherwise specifically defined herein, shall
have the meanings assigned to such terms in the Issuance Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CHANGE IN CONTROL
1. No accelerated vesting of the Unvested Shares shall occur upon a Change
in Control, and the Corporation's Repurchase Right shall continue to remain in
full force and effect. The Participant shall, over Optionee's continued period
of Service after the Change in Control, continue to vest in the Unvested Shares
pursuant to the vesting provisions of paragraph C of Article II of the Issuance
Agreement. However, immediately upon Participant's cessation of Service by
reason of an Involuntary Termination within eighteen (18) months after the
Change in Control, all Unvested Shares at the time outstanding under the
Issuance Agreement shall immediately vest and the Repurchase Right shall
terminate in its entirety with respect to those Unvested Shares.
2. For purposes of this Addendum, a CHANGE IN CONTROL shall be deemed to
occur in the event of a change in ownership or control of the Corporation
effected through either of the following transactions:
(i) the direct or indirect acquisition by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation)
of beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders which the Board does not recommend such
stockholders to accept, or
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(ii) a change in the composition of the Board over a period of thirty-six
(36) months or less such that a majority of the Board members (rounded up to
the next whole number) ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period by
at least a majority of the Board members described in clause (A) who were
still in office at the time such election or nomination was approved by the
Board.
IN WITNESS WHEREOF, Coram Healthcare Corporation has caused this Addendum to
be executed by its duly-authorized officer, and Participant has executed this
Addendum, all as of the Effective Date specified below.
CORAM HEALTHCARE CORPORATION
By: ___________________________________
Title: ________________________________
_______________________________________
1~, PARTICIPANT
EFFECTIVE DATE: _________________, 199__
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EXHIBIT 99.14
Employee Stock Purchase Plan
<PAGE> 2
CORAM HEALTHCARE CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE
The Coram Healthcare Corporation Employee Stock Purchase Plan (the "Plan")
is intended to provide eligible employees of the Corporation and one or more of
its Corporate Affiliates with the opportunity to acquire a proprietary interest
in the Corporation through participation in a plan designed to qualify as an
employee stock purchase plan under Section 423 of the Code.
II. DEFINITIONS
For purposes of administration of the Plan, the following terms shall have
the meanings indicated:
BASE SALARY means the regular base salary paid to a Participant by one or
more Participating Companies during such individual's period of participation
in the Plan, plus any pre-tax contributions made by the Participant to any Code
Section 401(k) salary deferral plan or any Code Section 125 cafeteria benefit
program now or hereafter established by the Corporation or any Corporate
Affiliate. The following items of compensation shall NOT be included in Base
Salary: (i) all overtime payments, bonuses, commissions (other than those
functioning as base salary equivalents), profit-sharing distributions and other
incentive-type payments and (ii) any and all contributions (other than Code
Section 401(k) or Code Section 125 contributions) made on the Participant's
behalf by the Corporation or one or more Corporate Affiliates under any
employee benefit or welfare plan now or hereafter established.
BOARD means the Board of Directors of the Corporation.
CODE means the Internal Revenue Code of 1986, as amended from time to time.
COMMON STOCK means shares of the Corporation's common stock, par value
$0.001 per share.
CORPORATE AFFILIATE means any parent or subsidiary corporation of the
Corporation (as determined in accordance with Code Section 424), including any
parent or subsidiary corporation which becomes such after the Effective Date.
CORPORATION means Coram Healthcare Corporation, a Delaware corporation, and
any corporate successor to all or substantially all of the assets or voting
stock of Coram Healthcare Corporation which shall by appropriate action adopt
the Plan.
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<PAGE> 3
EFFECTIVE DATE means the first day of the initial offering period under the
Plan, which is scheduled to commence on January 2, 1995. However, for any
Corporate Affiliate which becomes a Participating Corporation in the Plan after
the first day of the initial offering period, a subsequent Effective Date shall
be designated with respect to participation by its Eligible Employees.
ELIGIBLE EMPLOYEE means any person who is regularly scheduled to work more
than twenty (20) hours per week for more than five (5) months per calendar year
in the employ of the Corporation or any other Participating Corporation for
earnings considered wages under Code Section 3401(a). However, no officers of
the Corporation or any Corporate Affiliate shall be eligible to participate in
the Plan.
ENTRY DATE means the date an Eligible Employee first joins the offering
period in effect under the Plan. The earliest Entry Date under the Plan shall
be the Effective Date.
FAIR MARKET VALUE means the fair market value per share of Common Stock on
any date in question under the Plan and shall be equal to the closing selling
price per share of Common Stock on such date, as officially quoted on the
principal securities exchange on which the Common Stock is at the time listed
for trading. If there are no sales of Common Stock on the date in question,
then the closing selling price for the Common Stock on the next preceding day
for which such closing selling price is quoted shall be determinative of Fair
Market Value.
PARTICIPANT means any Eligible Employee who is actively participating in the
Plan.
PARTICIPATING CORPORATION means the Corporation and such Corporate Affiliate
or Affiliates as may be designated from time to time by the Board to extend the
benefits of the Plan to their Eligible Employees. The Participating
Corporations, as of the Effective Date, are listed in attached Schedule A.
PLAN ADMINISTRATOR shall have the meaning given such term in Article III.
QUARTERLY ENTRY DATE means the first business day of each calendar quarter
within an offering period in effect under the Plan.
QUARTERLY PURCHASE DATE means the last business day of each calendar quarter
on which shares of Common Stock are to be automatically purchased for
Participants under the Plan. The earliest Quarterly Purchase Date under the
Plan shall be March 31, 1995.
BPHPA1\DKH\0024042.03
09/26/94 2.
<PAGE> 4
III. ADMINISTRATION
The Plan shall be administered by a committee (the "Plan Administrator")
comprised of two (2) or more non-employee Board members appointed from time to
time by the Board. The Plan Administrator shall have full authority to
administer the Plan, including authority to interpret and construe any
provision of the Plan and to adopt such rules and regulations for administering
the Plan as it may deem necessary in order to comply with the requirements of
Code Section 423. Decisions of the Plan Administrator shall be final and
binding on all parties who have an interest in the Plan.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be made available for purchase under the
Plan through a series of successive offering periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated in
accordance with the provisions of Subsection I of Article VII, Subsection B of
Article IX or Subsection B of Article X.
B. Each offering period shall have a maximum duration of twenty-four (24)
months. The duration of each offering period shall be designated by the Plan
Administrator prior to the start date. However, the initial offering period
shall run from January 2, 1995 to the last business day in June 1996. The next
offering period shall commence on the first business day in July 1996, and
subsequent offering periods shall commence as designated by the Plan
Administrator.
C. The Participant shall be granted a separate purchase right for each
offering period in which he/she participates. The purchase right shall be
granted on the Entry Date on which such individual first joins the offering
period in effect under the Plan and shall be automatically exercised at
quarterly intervals on each Quarterly Purchase Date while that purchase right
remains outstanding.
D. The Participant's acquisition of Common Stock under the Plan on any
Quarterly Purchase Date shall neither limit nor require the Participant's
acquisition of Common Stock on any subsequent Quarterly Purchase Date, whether
within the same or a different offering period.
V. ELIGIBILITY AND PARTICIPATION
A. Each Eligible Employee shall be eligible to participate in the Plan in
accordance with the following provisions:
An individual who is an Eligible Employee on the start date of any offering
period under the Plan shall be eligible to commence participation in that
offering period on
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09/26/94 3.
<PAGE> 5
such start date. That start date shall become such individual's Entry Date for
the offering period, and on that date such individual shall be granted his/her
purchase right for the offering period. Should any such Eligible Employee not
enter the offering period on the start date, then he/she may not subsequently
join that particular offering period on any later date.
An individual who first becomes an Eligible Employee after the start date of
any offering period under the Plan may enter that offering period on the first
Quarterly Entry Date on which he/she is an Eligible Employee. Such Quarterly
Entry Date shall become such individual's Entry Date for the offering period,
and on that date such individual shall be granted his/her purchase right for
the offering period. Should such an Eligible Employee not enter the offering
period on the first Quarterly Entry Date on which he/she is eligible to join
the offering period, then he/she may not subsequently join that particular
offering period on any later date.
B. To participate in the Plan for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its
designate) on or before his/her scheduled Entry Date.
C. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock under the Plan may be any multiple of one
percent (1%) of the Base Salary paid to the Participant during each calendar
quarter within the offering period, up to a maximum of ten percent (10%). The
deduction rate so authorized shall continue in effect for the remainder of the
offering period and for subsequent offering periods, except to the extent such
rate is changed in accordance with the following guidelines:
The Participant may, at any time during a calendar quarter, reduce his/her
rate of payroll deduction. Such reduction shall become effective as soon as
possible after filing of the requisite reduction form with the Plan
Administrator (or its designate), but the Participant may not effect more than
one such reduction during a calendar quarter.
The Participant may, prior to the commencement of any calendar quarter
within the offering period, increase the rate of his/her payroll deduction by
filing the appropriate form with the Plan Administrator (or its designate).
The new rate (which may not exceed the ten percent (10%) maximum) shall become
effective as of the first day of the first calendar quarter following the
filing of such form.
Payroll deductions will automatically cease upon the termination of the
Participant's purchase right in accordance with the applicable provisions of
Article VII below.
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<PAGE> 6
VI. STOCK SUBJECT TO PLAN
A. The Common Stock purchasable under the Plan shall, solely in the
discretion of the Plan Administrator, be made available from either authorized
but unissued shares of Common Stock or from shares of Common Stock reacquired
by the Corporation, including shares of Common Stock purchased on the open
market. The total number of shares which may be issued over the term of the
Plan shall not exceed 300,000 shares (subject to adjustment under Section VI.B
below).
B. In the event any change is made to the outstanding Common Stock by
reason of any stock dividend, stock split, combination of shares or other
change affecting such outstanding Common Stock as a class without the
Corporation's receipt of consideration, appropriate adjustments shall be made
by the Plan Administrator to (i) the class and maximum number of securities
issuable over the term of the Plan, (ii) the class and maximum number of
securities purchasable per Participant on any Quarterly Purchase Date and (iii)
the class and number of securities and the price per share in effect under each
purchase right at the time outstanding under the Plan. Such adjustments shall
be designed to preclude the dilution or enlargement of the rights and benefits
of Participants under the Plan.
VII. PURCHASE RIGHTS
An Eligible Employee who participates in the Plan for a particular offering
period shall have the right to purchase shares of Common Stock, at successive
quarterly intervals during such offering period, upon the terms and conditions
set forth below and shall execute a purchase agreement embodying such terms and
conditions and such other provisions (not inconsistent with the Plan) as the
Plan Administrator may deem advisable.
A. PURCHASE PRICE. Common Stock shall be issuable on each Quarterly
Purchase Date within the offering period at a purchase price per share equal to
eighty-five percent (85%) of the lower of (i) the Fair Market Value per share
on the Participant's Entry Date or (ii) the Fair Market Value per share on the
Quarterly Purchase Date. However, for each Participant whose Entry Date is
other than the start date of the offering period, the clause (i) amount shall
in no event be less than the Fair Market Value per share on the start date of
that offering period.
B. NUMBER OF PURCHASABLE SHARES. The number of shares purchasable per
Participant on each Quarterly Purchase Date during the offering period shall be
the number of whole shares obtained by dividing the amount collected from the
Participant through payroll deductions during the calendar quarter ending with
such Quarterly Purchase Date by the purchase price in effect for that Quarterly
Purchase Date. However, the maximum number of shares of Common Stock
purchasable per Participant on any Quarterly Purchase
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<PAGE> 7
Date shall not exceed One Hundred (100) shares, subject to periodic adjustment
under Section VI.B.
Under no circumstances shall purchase rights be granted under the Plan to
any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding options or
other 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 Corporation
or any of its Corporate Affiliates.
C. PAYMENT. Payment for the Common Stock purchased under the Plan shall be
effected by means of the Participant's authorized payroll deductions. Such
deductions shall begin on the first pay day following the Participant's Entry
Date into the offering period and shall (unless sooner terminated by the
Participant) continue through the pay day ending with or immediately prior to
the last day of the offering period. The amounts so collected shall be
credited to the Participant's individual account upon the Corporation's books,
but no interest shall be paid on the outstanding balance credited to such book
account. The amounts collected from a Participant will not be held in any
segregated account or trust fund and may be commingled with the general assets
of the Corporation and used for general corporate purposes.
D. TERMINATION OF PURCHASE RIGHT. The following provisions shall govern
the termination of outstanding purchase rights:
- A Participant may, at any time prior to the next Quarterly Purchase
Date, terminate his/her outstanding purchase right under the Plan by filing the
prescribed notification form with the Plan Administrator (or its designate).
No further payroll deductions shall be collected from the Participant with
respect to the terminated purchase right, and any payroll deductions collected
for the calendar quarter in which such termination occurs shall, at the
Participant's election, be immediately refunded or held for the purchase of
shares on the Quarterly Purchase Date immediately following such termination.
If no such election is made at the time such purchase right is terminated, then
the payroll deductions collected with respect to the terminated right shall be
refunded as soon as possible.
- The termination of such purchase right shall be irrevocable, and the
Participant may not subsequently rejoin the offering period for which the
terminated purchase right was granted. In order to resume participation in any
subsequent offering period, such individual must re- enroll in the Plan (by
making a timely filing of a new purchase agreement and payroll deduction
authorization) on or before the date he/she is first eligible to join the new
offering period.
- If the Participant ceases to remain an Eligible Employee for any reason
(including death, disability or change in status) while his/her purchase right
remains
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09/26/94
<PAGE> 8
outstanding, then that purchase right shall immediately terminate, and the
payroll deductions made to date by that Participant in the calendar quarter
during which such cessation of Eligible Employee status occurs shall be
refunded as soon as possible.
E. STOCK PURCHASE. Shares of Common Stock shall automatically be purchased
on behalf of each Participant (other than Participants whose payroll deductions
have previously been refunded in accordance with the Termination of Purchase
Right provisions above) on each Quarterly Purchase Date. The purchase shall be
effected by applying each Participant's payroll deductions for the calendar
quarter ending on such Quarterly Purchase Date (together with any carryover
deductions from the preceding calendar quarter) to the purchase of whole shares
of Common Stock (subject to the limitation on the maximum number of purchasable
shares set forth above) at the purchase price in effect for that Quarterly
Purchase Date. Any payroll deductions not applied to such purchase because
they are not sufficient to purchase a whole share shall be held for the
purchase of Common Stock on the next Quarterly Purchase Date. However, any
payroll deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant on
the Quarterly Purchase Date shall be promptly refunded to the Participant.
F. PRORATION OF PURCHASE RIGHTS. Should the total number of shares of
Common Stock which are to be purchased pursuant to outstanding purchase rights
on any particular date exceed the number of shares then available for issuance
under the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded to such Participant.
G. RIGHTS AS STOCKHOLDER. A Participant shall have no stockholder rights
with respect to the shares subject to his/her outstanding purchase right until
the shares are actually purchased on the Participant's behalf in accordance
with the applicable provisions of the Plan. No adjustments shall be made for
dividends, distributions or other rights for which the record date is prior to
the date of such purchase.
A Participant shall be entitled to receive, as soon as practicable after
each Quarterly Purchase Date, a stock certificate for the number of shares
purchased on the Participant's behalf. Such certificate may, upon the
Participant's request, be issued in the names of the Participant and his/her
spouse as community property or as joint tenants with right of survivorship.
Alternatively, the Participant may request the issuance of such certificate in
"street name" for immediate deposit in a designated brokerage account.
H. ASSIGNABILITY. No purchase right granted under the Plan shall be
assignable or transferable by the Participant other than by will or by the laws
of descent and
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09/26/94
<PAGE> 9
distribution following the Participant's death, and during the Participant's
lifetime the purchase right shall be exercisable only by the Participant.
I. CORPORATE TRANSACTION. Should any of the following transactions (a
"Corporate Transaction") occur during the offering period:
- a merger or consolidation in which the Corporation is not the surviving
entity, except for a transaction the principal purpose of which is to change
the state in which the Corporation is incorporated,
- the sale, transfer or other disposition of all or substantially all of
the assets of the Corporation (including the capital stock of the
Corporation's subsidiary corporations) in complete liquidation or dissolution
of the Corporation, or
- any reverse merger in which the Corporation is the surviving entity but
in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities are
transferred to a person or persons different from those who held such
securities immediately prior to such merger.
then all outstanding purchase rights under the Plan shall automatically be
exercised immediately prior to the consummation of such Corporate Transaction
by applying the payroll deductions of each Participant for the calendar quarter
in which such Corporate Transaction occurs to the purchase of whole shares of
Common Stock at eighty-five percent (85%) of the lower of (i) the Fair Market
Value per share on the Participant's Entry Date into the offering period in
which such Corporate Transaction occurs or (ii) the Fair Market Value per share
immediately prior to the consummation of such Corporate Transaction. However,
the applicable share limitations of Articles VII and VIII shall continue to
apply to any such purchase, and the clause (i) amount above shall not, for any
Participant whose Entry Date for the offering period is other than the start
date of that offering period, be less than the Fair Market Value per share of
Common Stock on such start date. The Corporation shall use its best efforts to
provide at least ten (10)-days advance written notice of the occurrence of any
such Corporate Transaction, and the Participants shall, following the receipt
of such notice, have the right to terminate their outstanding purchase rights
in accordance with the applicable provisions of this Article VII.
A similar automatic exercise of outstanding purchase rights will occur
should the Corporation dispose of its equity holdings in one or more of its
operating subsidiaries by a merger or consolidation involving that subsidiary,
a sale of substantially all of the assets of that subsidiary or the
Corporation's sale of substantially all of the outstanding capital stock of
such subsidiary, but only the purchase rights of the Participants in the employ
of the subsidiary involved in such disposition shall be so exercised.
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<PAGE> 10
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such accrual, when aggregated with (I) rights to purchase Common Stock
accrued under any other purchase right outstanding under this Plan and (II)
similar rights accrued under other employee stock purchase plans (within the
meaning of Code Section 423) of the Corporation or its Corporate Affiliates,
would otherwise permit such Participant to purchase more than $25,000 worth of
stock of the Corporation or any Corporate Affiliate (determined on the basis of
the fair market value of such stock on the grant date or dates of such purchase
rights) for each calendar year such rights are at any time outstanding.
B. For purposes of applying such accrual limitations, the right to acquire
Common Stock pursuant to each purchase right outstanding under the Plan shall
accrue as follows:
(i) The right to acquire Common Stock under such purchase right shall
accrue in a series of successive quarterly installments as and when the
purchase right first becomes exercisable for each such installment on the last
business day of each calendar quarter for which that purchase right remains
outstanding.
(ii) No right to acquire Common Stock under any outstanding purchase right
shall accrue to the extent the Participant has already accrued in the same
calendar year the right to acquire Common Stock under one or more other
purchase rights at a rate equal to $25,000 worth of Common Stock (determined on
the basis of the Fair Market Value of the Common Stock on the date or dates of
grant) for each calendar year during which one or more of those purchase rights
were at any time outstanding.
(iii) If by reason of such limitations, any purchase right does not accrue
for a particular calendar quarter, then the payroll deductions which the
Participant made during that calendar quarter with respect to such purchase
right shall be promptly refunded.
C. In the event there is any conflict between the provisions of this
Article VIII and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article VIII shall be controlling.
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<PAGE> 11
IX. AMENDMENT AND TERMINATION
A. The Board may alter, amend, suspend or discontinue the Plan for one or
more groups of Participants following any Quarterly Purchase Date. However,
the Board may not, without the approval of the Corporation's stockholders:
- materially increase the number of shares issuable under the Plan or the
maximum number of shares purchasable per Participant on any one Quarterly
Purchase Date, except that the Plan Administrator shall have the authority,
exercisable without such stockholder approval, to effect adjustments to the
extent necessary to reflect changes in the Corporation's capital structure
pursuant to Subsection B of Article VI;
_ alter the purchase price formula so as to reduce the purchase price
payable for the shares issuable under the Plan; or
_ materially increase the benefits accruing to Participants under the Plan
or materially modify the requirements for eligibility to participate in the
Plan.
B. The Corporation shall have the right, exercisable in the sole
discretion of the Plan Administrator, to terminate all outstanding purchase
rights under the Plan immediately following any Quarterly Purchase Date.
Should the Corporation elect to exercise such right, then the Plan shall
terminate in its entirety. No further purchase rights shall thereafter be
granted or exercised, and no further payroll deductions shall thereafter be
collected, under the Plan.
X. GENERAL PROVISIONS
A. The Plan shall become effective on the designated Effective Date,
provided that no offering period shall commence, and no shares of Common Stock
shall be issued hereunder, until (i) the Plan shall have been approved by the
stockholders of Curaflex Health Services, Inc., a Delaware corporation,
HealthInfusion, Inc., a Florida corporation, Medisys, Inc., a Delaware
corporation, and T2 Medical, Inc., a Delaware corporation, at the special
stockholders meeting to be separately held by each such corporation on July 8,
1994 and (ii) the Corporation shall have complied with all applicable
requirements of the Securities Act of 1933, as amended, all applicable listing
requirements of any securities exchange on which shares of the Common Stock are
listed and all other applicable legal and regulatory requirements. In the
event such stockholder approval is not obtained or such compliance of the
Corporation is not effected within twelve (12) months after the Effective Date,
then the Plan shall not be implemented.
B. The Plan shall terminate upon the earlier of (i) the last business day
in December 2003 or (ii) the date on which all shares available for issuance
under the Plan shall have been sold pursuant to purchase rights exercised under
the Plan.
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<PAGE> 12
C. All costs and expenses incurred in the administration of the Plan shall be
paid by the Corporation.
D. Neither the action of the Corporation in establishing the Plan, nor any
action taken under the Plan by the Board or the Plan Administrator, nor any
provision of the Plan itself shall be construed so as to grant any person the
right to remain in the employ of the Corporation or any of its Corporate
Affiliates for any period of specific duration, and such person's employment
may be terminated at any time, with or without cause.
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SCHEDULE A
COMPANIES PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE DATE
Coram Healthcare Corporation
Curaflex Health Services, Inc.
HealthInfusion, Inc.
Medisys, Inc.
T2 Medical, Inc.
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<PAGE> 1
EXHIBIT 99.15
Stock Purchase Agreement
<PAGE> 2
CORAM HEALTHCARE CORPORATION
STOCK PURCHASE AGREEMENT
I hereby elect to participate in the Employee Stock Purchase Plan (the
"ESPP") during the offering period specified below, and I hereby subscribe to
purchase shares of Common Stock of Coram Healthcare Corporation (the
"Corporation") in accordance with the provisions of this Agreement and the
ESPP. I hereby authorize payroll deductions from each of my paychecks during
the offering period in the 1% multiple of my earnings (not to exceed a maximum
of 10%) specified in my attached Enrollment Form.
I understand that the offering period is divided into a series of consecutive
quarterly periods of participation. With the exception of the initial
quarterly period of participation which begins on September 1, 1994, those
quarterly periods will begin on the first business day of January, April, July
and October each year during the offering period, and my participation will
automatically remain in effect from one quarterly period to the next during the
offering period in accordance with my payroll deduction authorization, unless I
withdraw from the ESPP or change the rate of my payroll deduction or unless my
employment status changes.
I understand that my payroll deductions will be accumulated for the purchase
of shares of the Corporation's Common Stock on the last business day of each
quarterly period of participation within the offering period. The purchase
price per share will be 85% of the lower of (i) the fair market value per share
of Common Stock on my entry date into the offering period or (ii) the fair
market value per share on the quarterly purchase date. However, the clause (i)
amount will in no event be less than the fair market value per share of Common
Stock on the start day of the offering period. The first quarterly purchase
will occur on the last business day in December 1994.
I understand that I can withdraw from the ESPP at any time prior to the last
business day of a quarterly period of participation and elect either to have
the Corporation refund all my payroll deductions for that period or to have
such payroll deductions applied to the purchase of Common Stock at the end of
such period. However, I may not rejoin that particular offering period at any
later date. Upon my termination of employment or change to ineligible employee
status, my participation in the ESPP will immediately cease and all my payroll
deductions for the quarterly period in which my employment terminates or my
loss of eligibility occurs will automatically be refunded. Should I die while
an ESPP participant, payroll deductions will automatically cease on my behalf
and my estate shall receive a refund of my payroll deductions to date in the
quarterly period in which I die. I further understand that I may reduce the
rate of my payroll deductions on one occasion per quarterly period of
participation and that I may increase my rate of payroll deductions to become
effective at the beginning of any subsequent quarterly period of participation
within the offering period.
I understand that I will receive a stock certificate for the shares purchased
on my behalf after the end of each purchase period. The certificate will be
issued in the name or names I have selected on the Enrollment Form accompanying
this Agreement.
I understand that the Corporation has the right, exercisable in its sole
discretion, to amend or terminate the ESPP at any time, with such amendment or
termination to become effective immediately following the exercise of
outstanding purchase rights at the end of any current quarterly period of
participation. Should the Corporation elect to terminate the ESPP, I will have
no further rights to purchase shares of Common Stock pursuant to this
Agreement.
I understand that the ESPP sets forth restrictions (i) limiting the maximum
number of shares which I may purchase during any quarterly period of
participation to 100 shares and (ii) prohibiting me from purchasing more than
$25,000 worth of Common Stock for each calendar year my purchase right remains
outstanding.
I acknowledge that I have received a copy of the official Plan Prospectus
summarizing the major features of the ESPP. I have read this Agreement and the
Prospectus and hereby agree to be bound by the terms of both this Agreement and
the ESPP. The effectiveness of this Agreement is dependent upon my eligibility
to participate in the ESPP.
Date: ___________________________ _____________________________
Signature of Employee
Printed Name:________________
Duration of Offering Period: From January 2, 1995 to June 28, 1996
Start Date of my Quarterly Period of Participation: _____________, 199_
BPHPA1\ZP\0070332.02
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<PAGE> 1
EXHIBIT 99.16
Enrollment Form
<PAGE> 2
CORAM HEALTHCARE CORPORATION
EMPLOYEE STOCK PURCHASE PLAN ("ESPP")
ENROLLMENT/CHANGE FORM
Action Complete Sections:
SECTION 1: New Enrollment 2, 3, 6, 7 and sign attached
ACTIONS stock purchase agreement
Payroll Deduction Change 2, 4, 7
Terminate Payroll Deductions 2, 5, 7
Beneficiary Change 2, 6, 7
================================================================================
SECTION 2: Name___________________________________________________________
PERSONNEL Last First MI Dept.
DATA
Home Address___________________________________________________
Street
_______________________________________________________________
City State Zip Code
Social Security #: - -
================================================================================
SECTION 3: Effective for Initial Offering Period
Quarterly Entry Date: Payroll Deduction Amount:
_____% of base salary*
NEW January 2, 1995 October 2, 1995
ENROLLMENT April 3, 1995 January 1, 1996
July 1, 1995 April 1, 1996 * Must be a multiple of
1% up to a maximum of
10% of base salary
================================================================================
SECTION 4: Effective with the I authorize the following
PAYROLL Pay Period Beginning: new level of payroll
DEDUCTION ______________________ deduction: _______%
CHANGE Month, Day and Year of base salary*
* Must be a multiple of
1% up to a maximum of
10% of base salary
NOTE: You may reduce your rate of payroll deductions
once per quarterly period of participation to
become effective as soon as possible following
the filing of the change form. You may also
increase your rate of payroll deductions to
become effective as of the start date of the next
quarterly period of participation.
================================================================================
SECTION 5: Effective with the Your election to terminate your
TERMINATE Pay Period Beginning payroll deductions for the
PAYROLL ____________________ balance of the offering period
DEDUCTIONS Month, Day and Year cannot be changed, and you may
not rejoin the offering period
at a later date. You will not
be able to resume participation
in the ESPP prior to the
commencement of the next
offering period.
In connection with my voluntary termination of payroll
deductions, I elect the following action regarding my payroll
ESPP deductions to date in the current quarterly period of
participation:
/ / Purchase Coram Healthcare Corporation shares at end of the
period
OR
/ / Refund payroll ESPP deductions collected
NOTE: If your employment terminates or your eligibility status changes
(<20 hrs/wk or <5 months/yr), you will immediately cease to
participate in the ESPP, and your payroll ESPP deductions
collected in that quarterly period of participation will
automatically be refunded to you.
================================================================================
SECTION 6: Beneficiary(ies) Relationship of Beneficiary(ies)
BENEFICIARY
_____________________________ ________________________________
_____________________________ ________________________________
================================================================================
SECTION 7:
AUTHORIZATION
I WOULD LIKE MY CERTIFICATE TO BE ISSUED AS FOLLOWS: (PRINT NAME(S) EXACTLY AS
THEY SHOULD APPEAR.)
/ / My name only, ____________________________________________________.
/ / My name, _______________________, and my spouse, ________________________ ,
/ / AS COMMUNITY PROPERTY OR / / AS JOINT TENANTS.
/ / Issued in street name and delivered to my designated brokerage account.
___________________________________ ___________________________________
Date Signature of Employee
BPHPA1\ZP\0070315.02
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EXHIBIT 99.18
Form of Stock Option Assumption Agreement
for Options Issued Pursuant to the
HealthInfusion, Inc. Amended and Restated Stock Option Plan
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EXHIBIT 99.18
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: 1~,
NUMBER OF HEALTHINFUSION SHARES: 2~
GRANT DATE: 3~
ORIGINAL EXERCISE PRICE PER SHARE:
WHEREAS, the undersigned Optionee was previously granted the stock option
described above (the "Option") to purchase shares of the common stock of
HealthInfusion, Inc. ("HealthInfusion ") pursuant to the HealthInfusion Stock
Option Plan (the "Plan").
WHEREAS, HealthInfusion has become a wholly-owned subsidiary of Coram
Healthcare Corporation, a Delaware corporation ("Coram"), pursuant to a merger
transaction effected July ___, 1994 (the "Merger") in accordance with the terms
and provisions of that certain Agreement and Plan of Merger dated as of
February 6, 1994 and amended May 25, 1994 (the "Merger Agreement") by and among
Coram, T2 Medical, Inc., Curaflex Health Services, Inc. HealthInfusion,
Medisys, Inc., T2 Acquisition Company, CHS Acquisition Company, HII Acquisition
Company and MI Acquisition Company.
WHEREAS, the Option was outstanding at the time of the Merger and eligible
for assumption by Coram in accordance with the provisions of the Plan and the
agreement evidencing the Option (the "Option Agreement").
WHEREAS, pursuant to Section 7.8 of the Merger Agreement, all options
outstanding under the Plan at the time of the Merger, including the Option,
were to be assumed by Coram and become options to purchase shares of Coram
common stock.
WHEREAS, pursuant to the provisions of the Merger Agreement, the exchange
ratio in effect for the Merger is 0.447 share of Coram common stock for each
outstanding share of HealthInfusion common stock (the "Exchange Rate").
WHEREAS, certain adjustments to the Option are necessary to reflect the
effect of the assumption of that Option by Coram in connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. Coram hereby assumes all the duties and obligations of HealthInfusion
under the Option and hereby agrees to issue up to the number of shares of Coram
common stock indicated below upon (i) the exercise of that Option in accordance
with the provisions of the Option Agreement (as supplemented hereby) and (ii)
the payment of the adjusted exercise price per share set forth below.
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<TABLE>
<CAPTION>
HEALTHINFUSION CORAM
STOCK OPTION ASSUMED OPTION
------------ --------------
<S> <C> <C> <C>
# of Shares # of Shares Adjusted
HealthInfusion Exercise Coram Exercise
Common Stock Price/Share Common Stock Price/Share
------------ ----------- ------------ -----------
</TABLE>
2. The number of shares of Coram common stock purchasable under the Option
hereby assumed (the "Assumed Option") and the exercise price per share payable
thereunder have been adjusted to reflect the Exchange Rate at which the
outstanding shares of HealthInfusion common stock have been converted into
shares of Coram common stock on the consummation of the Merger. The intent of
such adjustments is to assure that the spread between the aggregate fair market
value of the Coram shares purchasable under the Assumed Option and the
aggregate exercise price as adjusted hereunder payable for such shares will,
immediately after the Merger, substantially equal and not exceed the spread
which existed immediately prior to the Merger between the then aggregate fair
market value of HealthInfusion common stock subject to the Option and the
aggregate exercise price in effect at such time under the Option. Such
adjustments are also designed to preserve, on a per share basis immediately
after the Merger, the same ratio of fair market value per option share to
exercise price per share which existed under the Option immediately prior to
the Merger.
3. All references to the "Company" in the Option Agreement shall be deemed
to include Coram, and all references to "Common Stock" shall be deemed to refer
to the shares of Coram common stock now subject to the Assumed Option. For
purposes of determining the holding period of any shares of Coram common stock
delivered in payment of the exercise price of the Assumed Option, the period
for which such shares were held as HealthInfusion common stock prior to the
Merger shall be taken into account.
4. The Assumed Option shall continue to have a maximum ten (10)-year term
measured from the original grant date of the Option, and all references to the
"Grant Date" in the Option Agreement shall continue to relate to that original
grant date. The Assumed Option, however, shall be subject to earlier
termination in accordance with the provisions of the Option Agreement should
the Optionee's service with HealthInfusion terminate. However, for all
purposes of the Option Agreement, the Optionee shall be deemed to continue in
service status for so long as such individual continues in the employ of
HealthInfusion, Coram or any other Coram subsidiary now or hereafter existing.
5. The Assumed Option shall be fully and immediately exercisable for all of
the shares of Coram common stock subject to the Option and may be exercised for
any or all of those shares at any time prior to the expiration date of the
option term or the
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sooner termination of the Option in accordance with the provisions of the
Option Agreement.
6. All notices to HealthInfusion required or permitted to be given to the
HealthInfusion pursuant to the provisions of the Option Agreement shall be
given to Coram at the following address:
______________________________
______________________________
______________________________
7. Except to the extent specifically modified by this Option Assumption
Agreement, all of the terms and conditions of the Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this Option
Assumption Agreement.
IN WITNESS WHEREOF, Coram Healthcare Corporation has caused this Option
Assumption Agreement to be executed on its behalf by its duly- authorized
officer as of the ___ day of July 1994.
CORAM HEALTHCARE CORPORATION
By: _______________________________
_______________________________
Title: _______________________________
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ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to the Option as assumed by Coram Healthcare Corporation are as set
forth in the Option Agreement, the Plan and such Stock Option Assumption
Agreement.
__________________________
OPTIONEE
Dated:__________, 1994
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