<PAGE> 1
As filed with the Securities and Exchange Commission on September 18, 1996
Registration Statement No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
COMPDENT CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-3185995
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 MANSELL COURT EAST
SUITE 400
ROSWELL, GEORGIA 30076
(770) 998-8936
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
COMPDENT CORPORATION EMPLOYEE STOCK PURCHASE PLAN
COMPDENT CORPORATION NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT DATED SEPTEMBER 25, 1995
(Full title of the plan)
-----------------------
DAVID R. KLOCK, PH.D., C.L.U.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
COMPDENT CORPORATION
100 MANSELL COURT EAST, SUITE 400
ATLANTA, GEORGIA 30076
(770) 998-8936
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
-----------------------
Copies to:
John R. LeClaire, P.C.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109-2881
(617) 570-1000
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price Offering Registration
be Registered Registered (1) Per Share Price Fee
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 20,000 shares $29.00 $580,000 $200
- -------------------------------------------------------------------------------
Common Stock 20,000 shares $36.25 $725,000 $250
- -------------------------------------------------------------------------------
Common Stock 180,000 shares $34.50 (2) $6,210,000 $2,142
- -------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement also relates to such indeterminate number of
additional shares of CompDent Corporation Common Stock, par value $.01
per share ("Common Stock"), as may be issuable as a result of a stock
dividend, stock, stock split, split-up, recapitalization or other
similar event.
(2) This estimate is made pursuant to Rule 457(h)(1) under the Securities
Act of 1933, as amended, solely for the purpose of determining the
aggregate offering price and the registration fee and is based upon the
average of the high and low prices of the Common Stock as quoted on the
National Market of The Nasdaq Stock Market on September 11, 1996.
================================================================================
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document or documents containing the information specified in the
requirements of Part I are not required to be filed with the Securities and
Exchange Commission as part of this Registration Statement on Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
CompDent Corporation (the "Registrant") hereby incorporates by reference
into this Registration Statement the following documents:
(a) the Registrant's annual report on Form 10-K for the year ended
December 31, 1995 as filed with the Securities and Exchange Commission on March
28, 1996;
(b) all other reports filed with the Securities and Exchange
Commission by the Registrant pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since December 31, 1995; and
(c) the description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A dated May 15, 1995 as filed
with the Securities and Exchange Commission on May 16, 1995 pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended.
In addition, all documents subsequently filed with the Securities and
Exchange Commission by the Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes hereof to the extent that a statement
contained herein or in any subsequently filed document which also is
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
In accordance with Section 145 of the General Corporation Law of the
State of Delaware, Article VII of the Registrant's Amended and Restated
Certificate of Incorporation (the "Certificate") provides that no director of
the Registrant shall be personally liable to the Registrant or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Registrant or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) in
respect of certain unlawful dividend payments or stock redemptions or
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repurchases, or (iv) for any transaction from which the director derived an
improper personal benefit. In addition, the Certificate provides that if the
Delaware General Corporation Law is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of
a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law, as so amended.
Article V of the Registrant's Amended and Restated By-laws provides for
indemnification by the Registrant of its directors and officers and certain
non-officer employees (including officers and certain non-officer employees of
subsidiaries) under certain circumstances against expenses (including attorneys
fees, judgments, fines and amounts paid in settlement) reasonably incurred in
connection with the defense or settlement of any threatened, pending or
completed legal proceeding in which any such person is involved by reason of
the fact that such person is or was a director, an officer or employee of the
Registrant unless it is determined that such person did not act in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Registrant, and, with respect to criminal actions or
proceedings, such person had no reasonable cause to believe his or her conduct
was unlawful. The Registrant has also entered into an agreement with each
director of the Registrant providing for substantially similar indemnification
rights.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following is a complete list of exhibits filed or incorporated by
reference as part of this Registration Statement.
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C>
4.1 Amended and Restated Certificate of Incorporation
4.2 Amended and Restated By-laws*
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the securities being registered
23.1 Consent of Counsel (included in Exhibit 5.1 hereto)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Coopers & Lybrand L.L.P.
23.4 Consent of KPMG Peat Marwick
24.1 Powers of Attorney (included in Part II of this Registration Statement)
99.1 CompDent Corporation Employee Stock Purchase Plan, as amended
99.2 CompDent Corporation Non-Employee Directors' Stock Option Plan**
99.3 Ciffolillo Non-Qualified Stock Option Agreement dated September 25, 1995
</TABLE>
__________________________________
* Filed as an Exhibit to the Registrant's Registration Statement on Form
S-1 dated August 4, 1995 as filed with the Securities and Exchange Commission
on August 4, 1995 and incorporated herein by reference thereto.
** Filed as an Exhibit to the Registrant's annual report on Form 10-K filed
with the Securities and Exchange Commission on March 28, 1996 and incorporated
herein by reference thereto.
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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;
(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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered)
and any deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective 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 paragraphs (a)(1)(i) and (a)(1)(ii) herein do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the undersigned
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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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 Atlanta, State of Georgia, on September 4, 1996.
CompDent Corporation
By: /s/ David R. Klock
-----------------------------------
David R. Klock.
Chairman and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of CompDent Corporation hereby severally constitute David R. Klock,
Phyllis A. Klock, Sharon S. Graham and Bruce A. Mitchell and each of them
singly, our true and lawful attorneys with full power to them, and each of them
singly, to sign for us and in our names in the capacities indicated below, the
Registration Statement filed herewith and any and all amendments to said
Registration Statement (or any registration statement for the same offering
that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933), and generally to do all such things in our names and
in our capacities as officers and directors to enable CompDent Corporation to
comply with the provisions of the Securities Act of 1933, and all requirements
of the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
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 date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ David R. Klock Chairman, President, Chief September 4, 1996
- ------------------------------------- Executive Officer and Director
David R. Klock
/s/ Sharon S. Graham Executive Vice President, September 4, 1996
- ------------------------------------- Treasurer and Chief Financial
Sharon S. Graham Officer
/s/ Joseph A. Ciffolillo Director September 4, 1996
- -------------------------------------
Joseph A. Ciffolillo
/s/ Philip Hertik Director September 4, 1996
- -------------------------------------
Philip Hertik
/s/ David F. Scott, Jr. Director September 4, 1996
- -------------------------------------
David F. Scott, Jr.
/s/ Joseph E. Stephenson Director September 4, 1996
- -------------------------------------
Joseph E. Stephenson
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Amended and Restated Certificate of Incorporation
4.2 Amended and Restated By-laws*
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being registered
23.1 Consent of Counsel (included in Exhibit 5.1 hereto)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Coopers & Lybrand L.L.P.
23.4 Consent of KPMG Peat Marwick
24.1 Powers of Attorney (included in Part II of this Registration Statement)
99.1 CompDent Corporation Employee Stock Purchase Plan, as amended
99.2 CompDent Corporation Non-Employee Directors' Stock Option Plan**
99.3 Ciffolillo Non-Qualified Stock Option Agreement dated
September 25, 1995
</TABLE>
__________________________________
* Filed as an Exhibit to the Registrant's Registration Statement on Form
S-1 dated August 4, 1995 as filed with the Securities and Exchange Commission
on August 4, 1995.
** Filed as an Exhibit to the Registrant's annual report on Form 10-K filed
with the Securities and Exchange Commission on March 28, 1996.
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EXHIBIT 4.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
COMPDENT CORPORATION
CompDent Corporation, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:
1. The name of the Corporation is CompDent Corporation. The date
of the filing of its original Certificate of Incorporation with the Secretary
of State of the State of Delaware was April 2, 1993. The name under which the
Corporation filed its original Certificate of Incorporation was APPS Holdings,
Inc.
2. This Amended and Restated Certificate of Incorporation amends,
restates and integrates the provisions of the Certificate of Incorporation of
the Corporation filed with the Secretary of State of the State of Delaware on
April 2, 1993, as heretofore amended (the "Certificate of Incorporation"), and
was duly adopted by the stockholders of the Corporation at a duly called annual
meeting of the shareholders, all in accordance with the applicable provisions
of Sections 222, 242 and 245 of the General Corporation Law of the State of
Delaware (the "DGCL").
3. The text of the Certificate of Incorporation is hereby amended
and restated in its entirety to provide as herein set forth in full.
ARTICLE I
NAME
The name of the Corporation is CompDent Corporation.
ARTICLE II
REGISTERED OFFICE
The address of the registered office of the Corporation in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
<PAGE> 2
ARTICLE III
PURPOSES
The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the DGCL.
ARTICLE IV
CAPITAL STOCK
Section 1. Number of Shares.
The total number of shares of capital stock which the Corporation
shall have the authority to issue is Fifty-Two Million (52,000,000) shares, of
which (i) Two Million (2,000,000) shares shall be preferred stock, par value
$.01 per share (the "Preferred Stock"), and (ii) Fifty Million (50,000,000)
shares shall be common stock, par value $.01 per share (the "Common Stock"). As
set forth in this Article IV, the Board of Directors or any authorized
committee thereof is authorized from time to time to establish and designate
one or more series of Preferred Stock, to fix and determine the variations in
the relative rights and preferences as between the different series of
Preferred Stock in the manner hereinafter set forth in this Article IV, and to
fix or alter the number of shares comprising any such series and the
designation thereof to the extent permitted by law.
The number of authorized shares of the class of Preferred Stock may be
increased or decreased (but not below the number of shares outstanding) by the
affirmative vote of the holders of a majority of the Common Stock, without a
vote of the holders of the Preferred Stock, pursuant to the resolution or
resolutions establishing the class of Preferred Stock or this Amended and
Restated Certificate of Incorporation, as it may be amended from time to time.
Section 2. General.
The designations, powers, preferences and rights of, and the
qualifications, limitations and restrictions upon, each class or series of
stock shall be determined in accordance with, or as set forth below in,
Sections 3 and 4 of this Article IV.
Section 3. Common Stock.
Subject to all of the rights, powers and preferences of the Preferred
Stock and except as provided by law or in this Article IV (or in any
certificate of designation of any series of Preferred
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Stock) or by the Board of Directors or any authorized committee thereof
pursuant to this Article IV:
(a) the holders of the Common Stock shall have the
exclusive right to vote for the election of Directors and on all other matters
requiring stockholder action, each share being entitled to one vote;
(b) dividends may be declared and paid or set apart for
payment upon the Common Stock out of any assets or funds of the Corporation
legally available for the payment of dividends, but only when and as declared
by the Board of Directors or any authorized committee thereof; and
(c) upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the net assets of the Corporation
shall be distributed pro rata to the holders of the Common Stock in accordance
with their respective rights and interests.
Section 4. Preferred Stock.
Subject to any limitations prescribed by law, the Board of Directors
or any authorized committee thereof is expressly authorized to provide for the
issuance of the shares of Preferred Stock in one or more series of such stock,
and by filing a certificate pursuant to applicable law of the State of
Delaware, to establish or change from time to time the number of shares to be
included in each such series, and to fix the designations, powers, preferences
and the relative, participating, optional or other special rights of the shares
of each series and any qualifications, limitations and restrictions thereof.
Any action by the Board of Directors or any authorized committee thereof under
this Section 4 shall require the affirmative vote of a majority of the
Directors then in office or a majority of the members of such committee. The
Board of Directors or any authorized committee thereof shall have the right to
determine or fix one or more of the following with respect to each series of
Preferred Stock to the extent permitted by law:
(a) The distinctive serial designation and the number of
shares constituting such series;
(b) The dividend rates or the amount of dividends to be
paid on the shares of such series, whether dividends shall be cumulative and,
if so, from which date or dates, the payment date or dates for dividends, and
the participating and other rights, if any, with respect to dividends;
(c) The voting powers, full or limited, if any, of the
shares of such series;
(d) Whether the shares of such series shall be redeemable
and, if so, the price or prices at which, and the terms and conditions on
which, such shares may be redeemed;
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(e) The amount or amounts payable upon the shares of such
series and any preferences applicable thereto in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation;
(f) Whether the shares of such series shall be entitled
to the benefit of a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and if so entitled, the amount of such fund and the
manner of its application, including the price or prices at which such shares
may be redeemed or purchased through the application of such fund;
(g) Whether the shares of such series shall be
convertible into, or exchangeable for, shares of any other class or classes or
of any other series of the same or any other class or classes of stock of the
Corporation and, if so convertible or exchangeable, the conversion price or
prices, or the rate or rates of exchange, and the adjustments thereof, if any,
at which such conversion or exchange may be made, and any other terms and
conditions of such conversion or exchange;
(h) The price or other consideration for which the shares
of such series shall be issued;
(i) Whether the shares of such series which are redeemed
or converted shall have the status of authorized but unissued shares of
Preferred Stock (or series thereof) and whether such shares may be reissued as
shares of the same or any other class or series of stock; and
(j) Such other powers, preferences, rights,
qualifications, limitations and restrictions thereof as the Board of Directors
or any authorized committee thereof may deem advisable.
ARTICLE V
STOCKHOLDER ACTION
Any action required or permitted to be taken by the stockholders of
the Corporation at any annual or special meeting of stockholders of the
Corporation must be effected at a duly called annual or special meeting of
stockholders and may not be taken or effected by a written consent of
stockholders in lieu thereof.
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ARTICLE VI
DIRECTORS
Section 1. General.
The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors except as otherwise provided
herein or required by law.
Section 2. Election of Directors.
Election of Directors need not be by written ballot unless the By-laws
of the Corporation shall so provide.
Section 3. Terms of Directors.
The number of Directors of the Corporation shall be fixed by
resolution duly adopted from time to time by the Board of Directors. The
Directors, other than those who may be elected by the holders of any series of
Preferred Stock of the Corporation, shall be classified, with respect to the
term for which they severally hold office, into three classes, as nearly equal
in number as possible. At each annual meeting of stockholders, the successor or
successors of the class of Directors whose term expires at that meeting shall
be elected by a plurality of the votes cast at such meeting and shall hold
office for a term expiring at the annual meeting of stockholders held in the
third year following the year of their election. The Directors elected to each
class shall hold office until their successors are duly elected and qualified
or until their earlier resignation or removal.
Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article IV of this Amended and Restated Certificate of Incorporation, the
holders of any one or more series of Preferred Stock shall have the right,
voting separately as a series or together with holders of other such series, to
elect Directors at an annual or special meeting of stockholders, the election,
term of office, filling of vacancies and other features of such directorships
shall be governed by the terms of this Amended and Restated Certificate of
Incorporation and any certificate of designations applicable thereto, and such
Directors so elected shall not be divided into classes pursuant to this Section
3.
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During any period when the holders of any series of Preferred Stock
have the right to elect additional Directors as provided for or fixed pursuant
to the provisions of Article IV hereof, then upon commencement and for the
duration of the period during which such right continues: (i) the then
otherwise total authorized number of Directors of the Corporation shall
automatically be increased by such specified number of Directors, and the
holders of such Preferred Stock shall be entitled to elect the additional
Directors so provided for or fixed pursuant to said provisions, and (ii) each
such additional Director shall serve until such Director's successor shall have
been duly elected and qualified, or until such Director's right to hold such
office terminates pursuant to said provisions, whichever occurs earlier,
subject to such Director's earlier death, disqualification, resignation or
removal. Except as otherwise provided by the Board in the resolution or
resolutions establishing such series, whenever the holders of any series of
Preferred Stock having such right to elect additional Directors are divested of
such right pursuant to the provisions of such stock, the terms of office of all
such additional Directors elected by the holders of such stock, or elected to
fill any vacancies resulting from the death, resignation, disqualification or
removal of such additional Directors, shall forthwith terminate and the total
and authorized number of Directors of the Corporation shall be reduced
accordingly.
Section 4. Vacancies.
Subject to the rights, if any, of the holders of any series of
Preferred Stock to elect Directors and to fill vacancies in the Board of
Directors relating thereto, any and all vacancies in the Board of Directors,
however occurring, including, without limitation, by reason of an increase in
size of the Board of Directors, or the death, resignation, disqualification or
removal of a Director, shall be filled solely by the affirmative vote of a
majority of the remaining Directors then in office, even if less than a quorum
of the Board of Directors. Any Director appointed in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of Directors in which the new directorship was created or the vacancy
occurred and until such Director's successor shall have been duly elected and
qualified or until his or her earlier resignation or removal. Subject to the
rights, if any, of the holders of any series of Preferred Stock to elect
Directors, when the number of Directors is increased or decreased, the Board of
Directors shall determine the class or classes to which the increased or
decreased number of Directors shall be apportioned; provided, however, that no
decrease in the number of Directors shall shorten the term of any incumbent
Director. In the event of a vacancy in the Board of Directors, the remaining
Directors, except as otherwise provided by law, may exercise the powers of the
full Board of Directors until the vacancy is filled.
Section 5. Removal.
Subject to the rights, if any, of any series of Preferred Stock to
elect Directors and to remove any Director whom the holders of any such stock
have the right to elect, any Director (including persons elected by Directors
to fill vacancies in the Board of Directors) may be removed from office (i)
only with cause and (ii) only by the affirmative vote of at least two-thirds
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of the total votes which would be eligible to be cast by stockholders in the
election of such Director. At least 30 days prior to any meeting of
stockholders at which it is proposed that any Director be removed from office,
written notice of such proposed removal shall be sent to the Director whose
removal will be considered at the meeting. For purposes of this Amended and
Restated Certificate of Incorporation, "cause," with respect to the removal of
any Director shall mean only (i) conviction of a felony, (ii) declaration of
unsound mind by order of court, (iii) gross dereliction of duty, (iv)
commission of any action involving moral turpitude, or (v) commission of an
action which constitutes intentional misconduct or a knowing violation of law
if such action in either event results both in an improper substantial personal
benefit and a material injury to the Corporation.
ARTICLE VII
LIMITATION OF LIABILITY
A Director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any
transaction from which the Director derived an improper personal benefit. If
the DGCL is amended after the effective date of this Amended and Restated
Certificate of Incorporation to authorize corporate action further eliminating
or limiting the personal liability of Directors, then the liability of a
Director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the DGCL, as so amended.
Any repeal or modification of this Article VII by either of (i) the
stockholders of the Corporation or (ii) an amendment to the DGCL, shall not
adversely affect any right or protection existing at the time of such repeal or
modification with respect to any acts or omissions occurring before such repeal
or modification of a person serving as a Director at the time of such repeal or
modification.
ARTICLE VIII
AMENDMENT OF BY-LAWS
Section 1. Amendment by Directors
Except as otherwise provided by law, the By-laws of the Corporation
may be amended or repealed by the Board of Directors.
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Section 2. Amendment by Stockholders
The By-laws of the Corporation may be amended or repealed at any
annual meeting of stockholders, or special meeting of stockholders called for
such purpose, by the affirmative vote of at least two-thirds of the total votes
eligible to be cast on such amendment or repeal by holders of voting stock,
voting together as a single class; provided, however, that if the Board of
Directors recommends that stockholders approve such amendment or repeal at such
meeting of stockholders, such amendment or repeal shall only require the
affirmative vote of a majority of the total votes eligible to be cast on such
amendment or repeal by holders of voting stock, voting together as a single
class.
ARTICLE IX
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend or repeal this Amended and
Restated Certificate of Incorporation in the manner now or hereafter prescribed
by statute and this Amended and Restated Certificate of Incorporation, and all
rights conferred upon stockholders herein are granted subject to this
reservation. No amendment or repeal of this Amended and Restated Certificate of
Incorporation shall be made unless the same is first approved by the Board of
Directors pursuant to a resolution adopted by the Board of Directors in
accordance with Section 242 of the DGCL, and, except as otherwise provided by
law, thereafter approved by the stockholders. Whenever any vote of the holders
of voting stock is required, and in addition to any other vote of holders of
voting stock that is required by this Amended and Restated Certificate of
Incorporation or by law, the affirmative vote of a majority of the total votes
eligible to be cast by holders of voting stock with respect to such amendment
or repeal, voting together a single class, at a duly constituted meeting of
stockholders called expressly for such purpose shall be required to amend or
repeal any provisions of this Amended and Restated Certificate of
Incorporation; provided, however, that the affirmative vote of not less than
80% of the total votes eligible to be cast by holders of voting stock, voting
together a single class, shall be required to amend or repeal any of the
provisions of Article VI or Article IX of this Amended and Restated Certificate
of Incorporation.
8
<PAGE> 9
I, David R. Klock, Chairman of the Corporation, for the purpose of
amending and restating the Corporation's Certificate of Incorporation pursuant
to the General Corporation Law of the State of Delaware, do make this
certificate, hereby declaring and certifying that this is my act and deed on
behalf of the Corporation this 29th day of April, 1996.
/s/ David R. Klock
-------------------------------
David R. Klock, Chairman
9
<PAGE> 1
EXHIBIT 4.2
Filed as an Exhibit to the Registrant's
Registration Statement on Form S-1
dated August 4, 1995 as filed with
the Securities and Exchange Commission
on August 4, 1995.
<PAGE> 1
EXHIBIT 5.1
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
Telephone (617) 570-1000
September 4, 1996 Telecopier (617) 523-1231
CompDent Corporation
8800 Roswell Road, Suite 295
Atlanta, Georgia 30350
Ladies and Gentlemen:
Re: Registration Statement on Form S-8
This opinion is delivered in our capacity as counsel to CompDent
Corporation (the "Company") in connection with the preparation and filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, of a Registration Statement on Form S-8 (the "Registration Statement")
relating to 220,000 shares of Common Stock, par value $.01 per share (the
"Registered Shares"). Of the Registered Shares, the Company is authorized to
issue 100,000 shares pursuant to the CompDent Corporation Employee Stock
Purchase Plan, as amended ("ESPP"), 100,000 shares pursuant to the CompDent
Corporation Non-Employee Directors' Stock Option Plan ("Directors' Plan") and
20,000 shares under that certain Non-Qualified Stock Option Agreement by and
between the Company and Joseph A. Ciffolillo dated September 25, 1995
("Ciffolillo Agreement," together with the ESPP and Directors' Plan collectively
referred to as the "Plans").
As counsel for the Company, we have examined a copy of each of the Plans
and the Company's Amended and Restated Certificate of Incorporation and Amended
and Restated By-laws, each as presently in effect, and such records,
certificates and other documents of the Company as we have deemed necessary or
appropriate for the purposes of the opinion.
Based on the foregoing, we are of the opinion that, when the Registered
Shares are sold and paid for pursuant to the terms of the respective Plans, the
Registered Shares will be duly authorized, legally issued, fully paid and
non-assessable by the Company under the General Corporation Law of the State of
Delaware.
We hereby consent to being named as counsel to the Company in the
Registration Statement and to the inclusion of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
EXHIBIT 23.1
Included in Exhibit 5.1 hereto
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
CompDent Corporation on Form S-8 of our reports on American Prepaid
Professional Services, Inc. and on APPS Dental, Inc. dated February 4, 1994,
appearing in the Annual Report on Form 10-K of CompDent Corporation for the
year ended December 31, 1995.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
September 12, 1996
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
CompDent Corporation, on Form S-8 of our report dated January 29, 1996, on our
audits of the consolidated financial statements and financial statement
schedules of CompDent Corporation as of December 31, 1995 and 1994, and for the
years ended December 31, 1995 and 1994, which report is incorporated by
reference in the Annual Report on Form 10-K and of our report dated January
26,1996 on our audit of the combined financial statements of Texas Dental Plan,
Inc. and Affiliates as of and for the year ended December 31, 1995 which report
is included on Form 8-KA.
/s/ Coopers & Lybrand L.L.P.
Birmingham, Alabama
September 12, 1996
<PAGE> 1
EXHIBIT 23.4
[LETTERHEAD] KPMG PEAT MARKWICK LLP
The Boards of Directors
Dental Care Plus Management, Corp.
I.H.C.S., Inc.
We consent to the incorporation by reference in the registration statement (as
filed on September 13, 1996) on Form S-8 of CompDent Corporation of our reports
dated February 23, 1996, with respect to the balance sheets of Dental Care Plus
Management, Corp. and I.H.C.S., Inc. as of December 31, 1995 and 1994, and the
related statements of operations (income), shareholders' equity (deficit), and
cash flows for the years then ended, which reports appear in the Form 8-KA of
CompDent Corporation dated May 8, 1996.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
September 13, 1996
<PAGE> 1
EXHIBIT 24.1
Included in Part II of this Registration Statement
<PAGE> 1
EXHIBIT 99.1
COMPDENT CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
The purpose of the Employee Stock Purchase Plan ("the Plan") is to
provide eligible employees of CompDent Corporation (the "Company") and certain
of its subsidiaries with opportunities to purchase shares of the Company's
common stock, par value $.01 per share (the "Common Stock"). 100,000 shares of
Common Stock in the aggregate have been approved and reserved for this purpose.
The Plan is intended to constitute an "employee stock purchase plan" within the
meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), and shall be interpreted in accordance with that intent.
1. Administration. The Plan will be administered by the Company's
Board of Directors (the "Board") or by a committee appointed by the Board for
such purpose (the "Committee"). The Board or the Committee has authority to
make rules and regulations for the administration of the Plan, and its
interpretations and decisions with regard thereto shall be final and
conclusive. No member of the Board or the Committee shall be liable for any
action or determination with respect to the Plan or any option granted
hereunder.
2. Offerings. The Company will make one or more offerings to eligible
employees to purchase the Common Stock under the Plan ("Offerings"). The
initial Offering will begin on August 1, 1996, and will end on December 31,
1996 (the "Initial Offering"). Thereafter, an Offering will begin on the first
business day occurring on or after each January 1st and will end on the last
business day occurring on or before December 31st of the following year.
3. Eligibility. All employees of the Company (including employees who
are also directors of the Company) and all employees of each Designated
Subsidiary (as defined in Section 11) are eligible to participate in any one or
more of the Offerings under the Plan; provided that, as of the first day of the
applicable Offering (the "Offering Date"), they are customarily employed by the
Company or a Designated Subsidiary for more than twenty (20) hours a week and
have completed at least six (6) months of employment.
4. Participation. An employee eligible on any Offering Date may
participate in such Offering by submitting an enrollment form to such
employee's appropriate payroll location at least ten (10) business days before
the Offering Date (or by such other deadline as shall be established for the
Offering). The form will (a) state the percentage to be deducted from the
employee's Compensation (as defined in Section 11) per pay period, (b)
authorize the purchase of Common Stock for such employee in each Offering in
accordance with the terms of the Plan, and (c) specify the exact name or names
in which shares of Common Stock purchased for such employee are to be issued
pursuant to Section 10. An employee who does not enroll in accordance with
these procedures will be deemed to have waived the right to participate.
Unless an employee files a new enrollment form or withdraws from the Plan, such
employee's deductions and purchases will continue at the same percentage of
Compensation for future Offerings, provided the employee remains eligible.
Notwithstanding the foregoing, participation in the Plan will neither be
permitted nor be denied contrary to the requirements of the Code.
5. Employee Contributions. Each eligible employee may authorize
payroll deductions at a minimum of one percent (1%) up to a maximum of ten
percent (10%) of his or her Compensation for each pay period. The Company will
maintain book accounts showing the amount of payroll deductions made by each
participating employee for each Offering. No interest will accrue or be paid
on payroll deductions.
6. Deduction Changes. An employee may increase or decrease his or her
payroll deduction for each three (3) month period during any Offering by filing
an amended enrollment form at least ten (10) business days before the first
business day occurring on or after each March 31st, June 30th and September
30th, as applicable, subject to Section 7.
<PAGE> 2
7. Withdrawal. An employee may withdraw from participation in the
Plan by delivering a written notice of withdrawal to such employee's
appropriate payroll location. The employee's withdrawal will be effective as
of the next business day. Following an employee's withdrawal, the Company will
promptly refund such employee's entire account balance under the Plan (after
payment for any Common Stock purchased before the effective date of
withdrawal). Partial withdrawals are not permitted. The employee may not
begin participation again during the remainder of the Offering, but may enroll
in a subsequent Offering in accordance with Section 4.
8. Grant of Options. On each Offering Date, the Company will grant
to each eligible employee who is then a participant in the Plan an option
("Option") to purchase on the last day of such Offering (the "Exercise Date"),
at the Option Price hereinafter provided for, such number of whole shares of
Common Stock reserved for the purposes of the Plan as does not exceed the
number of shares equal in value to ten percent (10%) of such employee's
projected Compensation for the period of the Offering divided by eighty five
percent (85%) of the Fair Market Value of the Common Stock (as defined in
Section 11) on the Offering Date. The purchase price for each share purchased
under such Option (the "Option Price") will be 85% of the Fair Market Value of
the Common Stock on the Offering Date or the Exercise Date, whichever is less.
Notwithstanding the foregoing, no employee may be granted an Option
hereunder if such employee, immediately after the Option was granted, would be
treated as owning stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any
Parent or Subsidiary (as defined Section 11). For purposes of the preceding
sentence, the attribution rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any employee, and all stock which the
employee has a contractual right to purchase shall be treated as stock owned by
the employee. In addition, no employee may be granted an Option which permits
such employee's rights to purchase stock under the Plan, and any other employee
stock purchase plan of the Company and its Parents and Subsidiaries, to accrue
at a rate which exceeds $25,000 of the fair market value of such stock
(determined on the option grant date or dates) for each calendar year in which
the Option is outstanding at any time. The purpose of the limitation in the
preceding sentence is to comply with Section 423(b)(8) of the Code.
9. Exercise of Option and Purchase of Shares. Each employee who
continues to be a participant in the Plan on the Exercise Date shall be deemed
to have exercised such employee's Option on such date and shall acquire from
the Company such number of whole shares of Common Stock reserved for the
purpose of the Plan as such employee's accumulated payroll deductions on such
date will purchase at the Option Price, subject to any other limitations
contained in the Plan. Any balance remaining in an employee's account at the
end of an Offering will be refunded to the employee promptly; provided that the
Board or the Committee may determine, in advance of the Offering, that any
balance remaining in an employee's account at the end of an Offering, solely by
reason of the inability to purchase a fractional share, will be carried forward
to the next Offering.
10. Issuance of Certificates. Certificates representing shares of
Common Stock purchased under the Plan may be issued only in the name of the
employee, or in the name of the employee and another person of legal age as
joint tenants with rights of survivorship, or in the name of a broker
authorized by the employee to be such employee's nominee for such purpose.
11. Definitions. The term "Compensation" means the amount of base
pay, prior to salary reduction pursuant to either Section 125 or 401(k) of the
Code, but excluding overtime, incentive or bonus awards, allowances and
reimbursements for expenses such as relocation allowances or travel expenses,
income or gains on the exercise of Company stock options, and similar items.
The term "Designated Subsidiary" means any present or future Subsidiary
(as defined below) that is designated from time to time by the Board or the
Committee to participate in the Plan. Subsidiaries may be so designated either
before or after the Plan is approved by the stockholders.
2
<PAGE> 3
The term "Fair Market Value of the Common Stock" means the last
reported sale price of the Common Stock on the Nasdaq National Market
("Nasdaq") on a given day or, if no sales of Common Stock were made on that
day, the last reported sale price of the Common Stock on the next preceding day
on which sales were made.
The term "Parent" means a "parent corporation" with respect to the
Company, as defined in Section 424(e) of the Code.
The term "Subsidiary" means a "subsidiary corporation" with respect to
the Company, as defined in Section 424(f) of the Code.
12. Rights on Retirement, Death or Other Termination of Employment.
If a participating employee's employment terminates for any reason before the
Exercise Date for any Offering, no payroll deduction will be taken from any pay
due and owing to the employee and the balance in such employee's account will
be paid to such employee or, in the case of death, to such employee's
designated beneficiary as if such employee had withdrawn from the Plan under
Section 7. An employee will be deemed to have terminated employment, for this
purpose, if the corporation that employs such employee, having been a Desginated
Subsidiary, ceases to be a Subsidiary, or if the employee is transferred to any
corporation other than the Company or a Designated Subsidiary.
13. Optionees Not Stockholders. Neither the granting of an Option to
an employee nor the deductions from such employee's pay shall constitute such
employee a holder of the shares of Common Stock covered by an Option under the
Plan until such shares have been purchased by and issued to such employee.
14. Rights Not Transferable. Rights under the Plan are not
transferable by a participating employee other than by will or the laws of
descent and distribution, and are exercisable during the employee's lifetime
only by the employee.
15. Application of Funds. All funds received or held by the Company
under the Plan may be combined with other corporate funds and may be used for
any corporate purpose.
16. Adjustment in Case of Changes Affecting Common Stock. In the
event of a subdivision of outstanding shares of Common Stock, or the payment of
a dividend in Common Stock, the number of shares approved for the Plan, and the
share limitation set forth in Section 8, shall be increased proportionately,
and such other adjustment shall be made as may be deemed equitable by the Board
or the Committee. In the event of any other change affecting the Common Stock,
such adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.
17. Amendment of the Plan. The Board or the Committee may at any
time, and from time to time, amend the Plan in any respect, except that without
the approval, within twelve (12) months of such Board or Committee action, by
the holders of a majority of the shares of stock of the Company present or
represented and entitled to vote at a meeting of stockholders, no amendment
shall be made (a) increasing the number of shares approved for the Plan or (b)
changing the designation of corporations or class of corporations whose
employees are eligible to receive Options under the Plan.
18. Insufficient Shares. If the total number of shares of Common
Stock that would otherwise be purchased on any Exercise Date plus the number of
shares purchased under previous Offerings under the Plan exceeds the maximum
number of shares issuable under the Plan, the shares then available shall be
apportioned among participants in proportion to the amount of payroll
deductions accumulated on behalf of each participant that would otherwise be
used to purchase Common Stock on such Exercise Date.
19. Termination of the Plan. The Plan may be terminated at any time
by the Board or the Committee. Upon termination of the Plan, all amounts in
the accounts of participating employees shall be promptly refunded.
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<PAGE> 4
20. Governmental Regulations. The Company's obligation to sell
and deliver Common stock under the Plan is subject to stockholder approval. The
Plan shall be governed by Delaware law except to the extent that such law is
preempted by federal law.
21. Issuance of Shares. Shares may be issued upon exercise of an
Option from authorized but unissued Common Stock, from shares held in the
treasury of the Company, or from any other proper source.
22. Tax Withholding. Participation in the Plan is subject to any
required tax withholding on income of the participant in connection with
the Plan. Each employee agrees, by entering the Plan, that the Company and its
Subsidiaries shall have the right to deduct any such taxes from any payment of
any kind otherwise due to the employee, including shares issuable under the
Plan.
23. Notification Upon Sale of Shares. Each employee agrees, by
entering the Plan, to give the Company prompt notice of any disposition of
shares purchased under the Plan where such disposition occurs within two (2)
years after the date of grant of the Option pursuant to which such shares were
purchased.
24. Effective Date and Approval of Shareholders. The Plan shall
take effect on the later of the date it is adopted by the Board or the date it
is approved by the holders of a majority of the shares of stock of the Company
present or represented and entitled to vote at a meeting of stockholders, which
approval must occur within twelve (12) months of the adoption of the Plan by
the Board.
4
<PAGE> 1
EXHIBIT 99.2
Filed as an Exhibit to the Registrant's annual report on Form 10-K filed with
the Securities and Exchange Commission on March 8, 1996.
<PAGE> 1
EXHIBIT 99.3
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the 25th day of September, 1995 (the "Grant
Date") by and between COMPDENT CORPORATION, a Delaware corporation, with its
principal office at 8800 Roswell Road, Suite 244, Atlanta, Georgia 30350 (the
"Company"), and JOSEPH CIFFOLILLO (the "Optionee").
WHEREAS, the Company desires to provide to Optionee the opportunity to
acquire an equity interest in the Company as an additional incentive for
serving as director of the Company; and
WHEREAS, to facilitate the above the Company's Board of Directors has
authorized issuance of certain options to purchase shares of the Company's
Common Stock, the terms and conditions of which are as set forth herein.
NOW, THEREFORE, in consideration of the promises and of the covenants
and agreements herein set forth, the parties hereby mutually covenant and agree
as follows:
1. Grant of Option. The Company hereby grants to the Optionee the
option to purchase from the Company all or any part of an aggregate number of
20,000 shares of Common Stock of the Company (hereinafter such shares of Common
Stock are referred to as the "Optioned Shares" and the option to purchase the
Optioned Shares is referred to as the "Option").
2. Exercise Price. The price to be paid for the Optioned Shares
shall be Twenty-Nine Dollars ($29.00) per share.
<PAGE> 2
3. Vesting and Exercisability. Optioned Shares may be purchased
pursuant to this Option at any time and from to time during a period of six (6)
years from the date hereof, in whole or in part, subject to Sections 5 and 8 and
subject to the provisions hereof:
(a) No Optioned Shares may be purchased during the first
twelve (12) month period following the date hereof;
(b) On or after September 25, 1996, Optionee may purchase
up to twenty-five percent (25%) of the Optioned Shares;
(c) On or after September 25, 1997, Optionee may purchase
up to an additional twenty-five percent (25%) of the Optioned Shares;
(d) On or after September 25, 1998, Optionee may purchase
up to an additional twenty-five percent (25%) of the Optionee Shares;
(e) On or after September 25, 1999, Optionee may purchase
up to an additional twenty-five percent (25%) of the Optioned Shares;
(f) The option to purchase such Optioned Shares as set
forth above shall accumulate from year to year, but all options to purchase
Optioned Shares must be exercised on or before September 24, 2001 (the
"Expiration Date"), at which time all unexercised Options will expire.
(g)(1) Notwithstanding the foregoing, the Optionee may
purchase all or any portion of the entire amount of Optioned Shares in the
event of a Stipulated Transaction (as hereinafter defined). Such purchase shall
occur not later than the closing of the Stipulated Transaction.
2
<PAGE> 3
(2) A "Stipulated Transaction" shall mean the occurrence of one or
more of the following events:
(i) The dissolution, liquidation or winding up of the
Company following any sale or other disposition of all or substantially all of
the Company's properties and assets as an entirety to any other Person or
Persons (as hereinafter defined) as part of a plan for such liquidation,
dissolution or winding up; or
(ii) A transaction or a series of related transactions by or
through which a majority of the voting power of the capital stock of the
Company is acquired by a Person or Persons who, prior to such transaction or
transactions, collectively owned less than a majority of such voting power,
whether such transaction is effectuated by merger, consolidation, sale or
exchange of stock, or otherwise. For purposes of this Agreement, the term
"Person" shall mean an individual, a corporation, an association, a
partnership, an estate, a trust, and any other entity or organization.
4. Exercise of Option. The Option may be exercised only by written notice
("Notice"), which shall (i) specify the number of Optioned Shares being
purchased in cash or its equivalent, and (ii) reaffirm those acknowledgments
and representations of Optionee as set forth in Section 9 herein. Said Notice
shall be delivered or mailed by postpaid, registered or certified mail
addressed to the Company at its principal office, Attention: President. Within
five (5) business days following the date of exercise, payment shall be made
in full. Such purchased shares shall be forthwith delivered to Optionee.
5. Termination. In the event that the Optionee's position as a member of
the Board of Directors of the Company or any of its subsidiaries terminates for
any reason, this Option shall
3
<PAGE> 4
no longer vest or become exercisable with respect to any additional Optioned
Shares after the effective date of such termination, and this Option may
thereafter be exercised, to the extent it was vested and exercisable on the
date of such termination, by the Optionee until the earlier of three (3) months
from the effective date of such termination or the Expiration Date.
6. Transferability. The Option herein granted shall not be
transferable by the Optionee otherwise than by will (or trust), the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Internal Revenue Service of 1986, as amended, or Title I of the
Employment Retirement Income Security Act, or the Rules thereunder. The Option
may be exercised during the life of the Optionee solely by the Optionee, except
that in the case of death or incompetence of an Optionee, the Optionee's
personal representative shall have the power to exercise the Options within the
time period prescribed in Section 5 above.
7. Adjustments Upon Changes in Capitalization. If the outstanding
shares of the class then subject to this Option are increased or decreased, or
are changed into or exchanged for a different number or kind of shares of
securities, as a result of one or more reorganizations (not involving the
acquisition of, or merger with, another business or entity, or the acquisition
of its assets), recapitalizations, stock splits, reverse stock splits, stock
dividends or the like, appropriate adjustments shall be made in the number
and/or kind of shares or securities for which the unexercised portions of this
Option may thereafter be exercised, all without any change in the aggregate
exercise price applicable to the unexercised portions of this Option, but with
a corresponding adjustment in the exercise price per share. No fractional share
of stock shall be issued under this Option or in connection with any such
adjustment. Such adjustments shall be
4
<PAGE> 5
made by or under authority of the Board of Directors of the Company whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final binding and conclusive.
8. Effective of Certain Transactions. In the case of (a) the
dissolution or liquidation of the Company, (b) a merger, reorganization or
consolidation in which the Company is acquired by another Person or Persons
(other than a holding company formed by the Company) or in which the Company
is not the surviving corporation, (c) the sale of all or substantially all of
the assets of the Company to another Person or Persons, or (d) the sale of more
than eighty (80%) percent of the voting power of the capital stock of the
Company to an unrelated Person or Persons, this Option shall terminate on the
effective date of such transaction or event, unless provision is made in such
transaction in the sole discretion of the parties thereto for the assumption of
this Option or the substitution for this Option of a new stock option of the
successor Person or a parent or subsidiary thereof, with such adjustment as to
the number and kind of shares and the per share exercise price as such parties
shall agree to. If this Option shall terminate pursuant to the foregoing
sentence, the Optionee shall have the right, at such time prior to the
consummation of the transaction causing such termination, to exercise the
unexercised portions of this Option, including the portions thereof which would
not yet be exercisable.
9. Optionee's Acknowledgment and Representations.
(a) Optionee acknowledges and understands that the
Optioned Shares have not been registered with the Securities and Exchange
Commission under the Securities Act of 1933 (the "Act"), as amended, nor with
any state securities regulatory authority. As such, the shares purchased under
this Option Agreement, if exercised, cannot be subsequently or otherwise
5
<PAGE> 6
transferred without (1) prior registration under the Act and under applicable
state laws, or (2) prior receipt of an opinion of counsel for the issuer to the
effect that such proposed sale or other transfer is in compliance with all
applicable state and federal securities laws.
(b) That Optionee will be acquiring the stock for his own
investment and personal interest in the Company and not for the account of any
other person, with no intention on his part of affecting a redistribution of
such stock or any part thereof.
(c) That Optionee has asked questions and received all
answers to information he considers pertinent to form a knowledgeable opinion
about this investment.
(d) That the Optionee understands and acknowledges that
he shall not be deemed for any purpose to be a shareholder of the Company with
respect to any of the Optioned Shares, except to the extent that the Option
herein granted shall have been exercised with respect thereto and a stock
certificate issued therefor.
(e) That the existence of the Option herein granted shall
not effect in any way the right or power of the Company or its shareholders to
make or authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred
or prior preference stock ahead of or affecting the Common Stock of the Company
or the rights thereof, or dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business or any other
corporate act or proceeding, whether of a similar character or otherwise.
(f) That as a condition of the granting of the Option
herein granted, the Optionee agrees, for himself and his personal
representative, that any dispute or disagreements
6
<PAGE> 7
which may arise under or as a result of or pursuant to this Agreement shall be
determined by the Board of Directors in its sole discretion, and that any
interpretation by the Board of Directors of the terms of this Agreement shall
be final, binding and conclusive.
10. This Option shall not confer upon the Optionee any right with
respect to the continuance of the relationship between Optionee and the Company
or its related corporations, nor shall it interfere in any way with the right
of the Company to terminate the Optionee's relationship with the Company or any
of its subsidiaries.
11. This Agreement shall be governed and interpreted by the laws of
the State of Delaware.
12. As used in this Agreement, the masculine, feminine or neuter
gender and the singular or plural number shall be deemed to include the others
whenever the context so indicates or requires.
13. This Agreement and the exhibits thereto constitute the entire
agreement between the parties with respect to the subject matter hereof, and no
change or modification shall be valid unless made in writing and signed by the
party against whom such change or modification is sought to be enforced.
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<PAGE> 8
IN WITNESS WHEREOF, the Company has caused this Non-Qualified Stock
Option Agreement to be executed by its duly authorized officers and the
Optionee has hereunto affixed his hand the day and year first above written.
COMPDENT CORPORATION:
By: /s/ David R. Klock
----------------------------
Title: Chairman & CEO
-------------------------
OPTIONEE:
/s/ Joseph Ciffolillo
-------------------------------
JOSEPH CIFFOLILLO
8
