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EXHIBIT 99.6
CORVEL CORPORATION
1991 EMPLOYEE STOCK PURCHASE PLAN
AS RESTATED AND AMENDED THROUGH AUGUST 7, 1997
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CORVEL CORPORATION
1991 EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE
The CorVel Corporation 1991 Employee Stock Purchase Plan (the
"Plan"), as restated and amended through August 7, 1997, is intended to provide
eligible employees of the Company and one or more of its Corporate Affiliates
with the opportunity to acquire a proprietary interest in the Company through
participation in a plan designed to qualify as an employee stock purchase plan
under Section 423 of the Internal Revenue Code (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 earnings paid to an Eligible
Employee by one or more Participating Companies during such individual's period
of participation in the Plan, plus (i) one hundred percent (100%) of the
commissions paid to the such individual during each purchase period in which he
or she participates in the Plan and (iii) any salary deferral contributions made
by such individual to the Company's Code Section 401(k) Plan during such period.
There shall be excluded from the calculation of Base Salary (i) all overtime
payments, bonuses, profit-sharing distributions and other incentive-type
payments and (ii) all contributions (other than Code Section 401(k)
contributions) made by the Company or its Corporate Affiliates for such
individual's benefit under any employee benefit or welfare plan now or hereafter
established.
BOARD means the Board of Directors of the Company.
COMPANY means CorVel Corporation, a Delaware corporation(1), and
any corporate successor to all or substantially all of the assets or voting
stock of the Company which shall by appropriate action adopt the Plan.
CORPORATE AFFILIATE means any company which is either the parent
corporation or a subsidiary corporation of the Company (as determined in
accordance with Section 424 of
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(1) The Company was previously known as FORTIS Corporation and assumed
all of the rights and responsibilities of FORTIS Corporation, a Minnesota
corporation ("FORTIS Minnesota"), with respect to the Plan pursuant to the
Agreement and Plan of Merger by and between the Company and FORTIS Minnesota,
effective May 16, 1991, under which FORTIS Minnesota changed its state of
incorporation from Minnesota to Delaware by merging with and into the Company
which was a wholly owned subsidiary of FORTIS Minnesota.
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the Code), including any parent or subsidiary corporation which becomes such
after the Effective Date.
EFFECTIVE DATE means October 1, 1991; provided, however, that any
Corporate Affiliate which becomes a Participating Company in the Plan after
October 1, 1991 shall designate a subsequent Effective Date with respect to its
employee-Participants; provided further, that this Plan shall not be effective
until such time as the Company becomes subject to the reporting requirements of
Section 12 of the Securities Exchange Act of 1934.
ELIGIBLE EMPLOYEE means any person who is regularly engaged, for
a period of more than twenty (20) hours per week and more than five (5) months
per calendar year, in the rendition of personal services to the Company or any
other Participating Company for earnings considered wages under Section 3121(a)
of the Code. However, employees of the Company who, at the start of any purchase
period under the Plan, (i) are deemed to be Highly Compensated Employees within
the meaning of Section 414(q) of the Code and (ii) hold unvested options to
purchase more than 15,000 shares of the Company's common stock under the
Company's Restated 1988 Executive Stock Option Plan shall not be treated as
Eligible Employees for that purchase period and shall accordingly be ineligible
to participate in the Plan for such period.
PARTICIPANT means any Eligible Employee of a Participating
Company who is actively participating in the Plan.
PARTICIPATING COMPANY means the Company and such Corporate
Affiliate or Affiliates as may be authorized from time to time by the Board to
extend the benefits of the Plan to their Eligible Employees. The Participating
Companies in the Plan as of the purchase period to begin October 1, 1992 are
listed in attached Schedule A.
STOCK means shares of the common stock of the Company, par value
$.0001 per share.
III. ADMINISTRATION
A. The Plan shall be administered by a committee (the
"Committee") consisting of two (2) or more Board members appointed by the Board.
Members of the Committee shall serve for such period of time as the Board may
determine and shall be subject to removal by the Board at any time.
B. The Committee is hereby designated as the Plan Administrator
and 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 Section 423 of the Code. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in
the Plan.
IV. PURCHASE PERIODS
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(a) Stock shall be offered for purchase under the Plan through a
series of successive purchase periods until such time as (i) the maximum number
of shares of Stock available for issuance under the Plan shall have been issued
pursuant to purchase rights granted under the Plan or (ii) the Plan shall have
been sooner terminated in accordance with Article IX.
(b) Each purchase period shall have a duration of six (6) months.
The initial purchase period will begin October 1, 1991, and subsequent purchase
periods will commence at successive six (6)-month intervals from and after that
date.
(c) The Participant shall be granted a separate purchase right
for each purchase period in which he or she participates. The purchase right
shall be granted on the first day of the purchase period and shall be
automatically exercised on the last business day of the purchase period.
(d) Under no circumstances shall any purchase rights granted
under the Plan be exercised, nor shall any shares of Stock be issued hereunder,
until such time as (i) the Plan shall have been approved by the Company's
stockholders and (ii) the Company 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 the Stock is listed and all
other applicable requirements established by law or regulation.
(e) The acquisition of Stock through participation in the Plan
for any purchase period shall neither limit nor require the acquisition of Stock
by the Participant in any subsequent purchase period.
V. ELIGIBILITY AND PARTICIPATION
(a) Each Eligible Employee of a Participating Company may begin
participation in the Plan on the first day of any purchase period following the
commencement of his or her employment with the Company or any other
Participating Company.
(b) In order to participate in the Plan for a particular purchase
period, an Eligible Employee must complete the enrollment forms prescribed by
the Plan Administrator (including a stock purchase agreement and a payroll
deduction authorization) and file such forms with the Plan Administrator (or its
designee) during the specified enrollment period for that purchase period.
(c) The payroll deduction authorized by a Participant for
purposes of acquiring Stock under the Plan may be any multiple of $10.00, up to
a dollar maximum not in excess of 20% of the Base Salary paid to the Participant
during the purchase period. The deduction rate so authorized shall continue in
effect for the entire purchase period, unless the Participant shall, prior to
the end of the purchase period for which the purchase right is in effect, reduce
the rate by filing the appropriate form with the Plan Administrator (or its
designee). The reduced rate shall become effective as soon as practicable
following the filing of such form. Payroll
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deductions, however, will automatically cease upon the termination of the
Participant's purchase right in accordance with Section VII(d) or (e) below.
VI. STOCK SUBJECT TO PLAN
(a) The Stock purchasable by Participants under the Plan shall,
solely in the Board's discretion, be made available from either authorized but
unissued Stock or from reacquired Stock, including shares of Stock purchased on
the open market. The total number of shares which may be issued under the Plan
shall not exceed 200,000 shares, (subject to adjustment under subparagraph (b)
below), including the 50,000-share increase subject to stockholder approval at
the 1997 Annual Stockholders Meeting.
(b) In the event any change is made to the Stock purchasable
under the Plan by reason of any stock dividend, stock split, combination of
shares, recapitalization or other change affecting the outstanding Stock as a
class without the Company's receipt of consideration, appropriate adjustments
shall be made by the Plan Administrator to (i) the class and maximum number of
shares issuable over the term of the Plan, (ii) the class and maximum number of
shares purchasable per Participant under any one purchase right, and (iii) the
class and number of shares and the price per share in effect under each purchase
right at the time outstanding under the Plan.
VII. PURCHASE RIGHTS
Each Eligible Employee who participates in the Plan for a
particular purchase period shall have the right to purchase Stock 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. The purchase price per share shall be the
lesser of (i) 85% of the fair market value of a share of Stock on the date on
which the purchase right is granted or (ii) 85% of the fair market value of a
share of Stock on the date the purchase right is exercised. For purposes of
determining such fair market value (and for all other valuation purposes under
the Plan), the fair market value of a share of Stock on any date shall be the
closing selling price of such share on such date, as officially quoted on the
principal exchange on which the Stock is at the time traded or, if not traded on
any exchange, the closing selling price per share of the Stock on such date, as
reported on the Nasdaq National Market. If there are no sales of Stock on such
day, then the closing selling price for the Stock on the next preceding day for
which such closing selling price is quoted shall be determinative of fair market
value.
(b) Number of Purchasable Shares. The number of shares
purchasable by a Participant upon the exercise of an outstanding purchase right
shall be the number of whole shares obtained by dividing the amount collected
from the Participant through payroll deductions during the purchase period for
which such purchase right is outstanding, by the purchase price per share in
effect for that purchase period. However, the maximum number of shares
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purchasable by any Participant during any one purchase period shall not exceed
500 shares (subject to 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 5% or more of the total
combined voting power or value of all classes of stock of the Company or any
Corporate Affiliate.
(c) Payment. Payment for the Stock purchased under the Plan shall
be effected through the Participant's authorized payroll deductions. Such
deductions shall begin on the first pay day coincident with or immediately
following the commencement date of the purchase period and shall terminate with
the pay day ending with or immediately prior to the last day of such purchase
period. The amounts so collected shall be credited to the Participant's
individual account under the Plan, but no interest shall be paid on the balance
from time to time outstanding in the account. The collected amounts may be
commingled with the Company's general assets and used for general corporate
purposes.
(d) Termination of Purchase Rights.
(i) A Participant may, on or before the last day of any
purchase period, terminate his or her outstanding purchase right under the Plan
by filing the prescribed notification form with the Plan Administrator (or its
designee). No further payroll deductions shall be collected from the Participant
with respect to the terminated purchase right, and the Participant shall have
the following election with respect to any payroll deductions made by such
individual with respect to the terminated purchase right: (A) have the Company
refund those payroll deductions or (B) have such payroll deductions held for the
purchase of shares at the end of the purchase period. If no such election is
made, then such payroll deductions shall automatically be refunded at the end of
such purchase period.
(ii) The termination shall be irrevocable with respect to the
particular purchase right to which it pertains, and the Participant may not
subsequently rejoin the purchase period covered by such terminated right.
(e) Termination of Service. If a Participant ceases to remain in
Service while his or her purchase right remains outstanding, then such purchase
right shall immediately terminate, and all sums previously collected from the
Participant during the purchase period in which such termination occurs shall be
refunded promptly to the Participant. However, should the Participant die or
become permanently disabled while in Service or should the Participant cease
active employment by reason of a leave of absence, then the Participant (or the
person or persons to whom the rights of the deceased Participant under the Plan
are transferred by will or by the laws of descent and distribution) shall have
the election, exercisable up until the end of the purchase period in which the
Participant dies or becomes permanently disabled or in which the leave of
absence commences, to (i) withdraw all the funds credited to the Participant's
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account at the time of his or her cessation of Service or at the commencement of
such leave or (ii) have such funds held for the purchase of shares at the end of
such purchase period. If no such election is made, then such funds shall
automatically be held for the purchase of shares at the end of such purchase
period. In no event, however, shall any further payroll deductions be added to
the Participant's account following his or her cessation of Service or the
commencement of such leave. Should the Participant return to active Service
following a leave of absence, then his or her payroll deductions under the Plan
shall automatically resume at the rate in effect at the time the leave began,
provided such return to Service occurs prior to the expiration date of the
purchase period in which such leave began.
For purposes of the Plan: (a) the Participant shall be considered
to remain in Service for so long as such Participant remains in the active
employ of the Company or one or more other Participating Companies, and (b) the
Participant shall be deemed to be permanently disabled if he or she is unable to
engage in any substantial gainful employment, by reason of any
medically-determinable physical or mental impairment expected to result in death
or to be of continuous duration of at least twelve (12) months.
(f) Stock Purchase. The Stock subject to the purchase right of
each Participant (other than Participants whose payroll deductions have been
refunded in accordance with Section VII(d) or (e) above) shall be automatically
purchased on the Participant's behalf on the last business day of the purchase
period. The purchase shall be effected by applying the amount credited to each
Participant's account on the last date of the purchase period to the purchase of
whole shares of Stock (subject to the limitations on the maximum number of
purchasable shares set forth in Section VII(b)) at the purchase price in effect
for such purchase period. Any amount remaining in the Participant's account
after such application shall be refunded promptly.
(g) Proration of Purchase Rights. Should the total number of
shares of 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 any
amounts credited to the accounts of Participants shall, to the extent not
applied to the purchase of Stock, be refunded to the Participants.
(h) Rights as Stockholder. A Participant shall have no rights as
a stockholder of the Company with respect to shares covered by his or her
outstanding purchase right under the Plan until the shares are actually
purchased on the Participant's behalf in accordance with Section VII(f). 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 issued, as soon as practicable after the
date of each purchase, 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 or her spouse as community
property or as joint tenants with right of survivorship.
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(i) 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 distribution following the Participant's death and during
the Participant's lifetime the purchase right shall be exercisable only by the
Participant.
(j) Merger or Liquidation of Company. In the event the Company or
its stockholders enter into an agreement to dispose of all or substantially all
of the assets or outstanding capital stock of the Company by means of a sale,
merger or reorganization (other than a reorganization effected primarily to
change the State in which the Company is incorporated) or in the event the
Company is liquidated, all outstanding purchase rights under the Plan shall
automatically be exercised immediately prior to the effective date of such sale,
merger, reorganization or liquidation by applying all sums previously collected
from Participants during the purchase period of such transaction to the purchase
of whole shares of Stock, subject, however, to the applicable limitations of
Section VII(b). Any amount not applied to the purchase of Stock by reason of the
Section VII(b) limitation on the maximum number of purchasable shares shall be
refunded promptly.
VIII. ACCRUAL LIMITATIONS
(a) No Participant shall be entitled to accrue rights to acquire
Stock pursuant to any purchase right outstanding under the Plan if and to the
extent such accrual, when aggregated with (i) rights to acquire Stock accrued
under other purchase rights granted to the Participant under this Plan and (ii)
similar rights accrued by the Participant under other employee stock purchase
plans (within the meaning of Code Section 423) of the Company or its Corporate
Affiliates, would otherwise permit such Participant to purchase more than
$25,000 worth of Stock of the Company or any Corporate Affiliate (determined on
the basis of the fair market value of such stock on the date or dates such
rights are granted to the Participant) for each calendar year such rights are at
any time outstanding.
(b) For purposes of applying the accrual limitations of Section
VIII(a), the right to acquire Stock pursuant to each purchase right granted
under the Plan shall accrue as follows:
(i) The right to acquire Stock under each such purchase
right shall accrue when the purchase right first becomes exercisable on the last
business day of the purchase period for which such right is granted.
(ii) No right to acquire 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 $25,000 worth of Stock (determined on the
basis of the fair market value on the date or dates of grant) pursuant to one or
more other purchase rights granted to the Participant during such calendar year.
(iii) To the extent the Participant's purchase right does not,
by reason of the Section VIII(a) limitations, accrue on the last business day of
the particular purchase period for which such right is granted, then the payroll
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deductions which the Participant made during that purchase period with respect
to such purchase right shall be refunded promptly.
(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.
IX. AMENDMENT AND TERMINATION
The Board may from time to time alter, amend, suspend or
discontinue the Plan; provided, however, that no such action shall adversely
affect purchase rights at the time outstanding under the Plan; and provided,
further, that no such action of the Board may, without the approval of the
Company's stockholders, materially increase the number of shares issuable under
the Plan or the maximum number of shares which any one Participant may purchase
under the Plan during a single purchase period (provided, however, the Plan
Administrator shall have the authority to effect adjustments pursuant to Section
VI(b) without stockholder approval), alter the purchase price formula so as to
reduce the purchase price specified in the Plan, otherwise materially increase
the benefits accruing to Participants under the Plan, or materially modify the
requirements for eligibility to participate in the Plan.
X. GENERAL PROVISIONS
(a) The Plan became effective on the Effective Date. On June 15,
1992 the Board approved a restatement of the Plan, to be effective as of October
1, 1992. The restatement was approved by the Company's stockholders at the 1992
Annual Meeting. On May 4, 1994, the Board approved an amendment to the Plan to
increase the aggregate number of shares issuable over the term thereof from
100,000 to 150,000 shares. The amendment was approved by the Company's
stockholders at the 1994 Annual Meeting. In June 1997, the Board approved
another amendment to the Plan to increase the aggregate number of shares
issuable over the term thereof from 150,000 to 200,000 shares, subject to
stockholder approval at the 1997 Annual Meeting.
(b) The Plan shall terminate upon the earlier of (i) September
30, 2001, 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.
(c) All costs and expenses incurred in the administration of the
Plan shall be paid by the Company.
(d) Neither the action of the Company 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 Company 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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(e) The provisions of the Plan shall be governed by the laws of
the State of California.
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