Exhibit 4
FRESENIUS USA, INC.
1987 STOCK OPTION PLAN
1. Purpose
The purpose of this 1987 Stock Plan (the "Plan") is to advance the
interests of Fresenius USA, Inc. (the "Company") by enhancing the ability of
the Company (a) to attract and retain employees who are in a position to make
significant contributions to the success of the Company; (b) to reward
employees for such contributions; and (c) to encourage employees to take into
account the long-term interests of the Company through ownership of shares of
the Company's Common Stock (the "Stock").
Options granted pursuant to the Plan may be incentive stock options as
defined in section 422A of the Internal Revenue Code of 1986 (as it may from
time to time be amended) (the "Code") (any option that is intended so to
qualify as an incentive stock option being referred to herein as an "incentive
option"), or options that are not incentive options, or both.
2. Administrative
The Plan shall be administered by the Board of Directors of the Company
(the "Board").
The Board may, in its discretion, delegate its powers with respect to the
Plan to a committee (the "Committee"), in which event all references herein to
the Board shall be deemed to be references to the Committee. The Committee
shall consist of at least three Directors. A majority of the members of the
Committee shall constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members. Any determination of the Committee
under the Plan may be made without notice or meeting of the Committee by a
writing signed by a majority of the Committee members. All members of the
Committee shall be disinterested persons within the meaning of Rule 16b-3 under
the Act.
The Board shall have authority, not inconsistent with the express
provisions of the Plan, (a) to grant options to such eligible employees as the
Board may select; (b) to determine the time or times when options shall be
granted and the number of shares of Stock subject to each option; (c) to
determine which options are, and which options are not, incentive options; (d)
to determine the terms and conditions of each option; (e) to prescribe the form
or forms of instruments evidencing options and any other instruments required
under the Plan and to change such forms from time to time; (f) to adopt, amend
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and rescind rules and regulations for the administration of the Plan; and (g)
to interpret the Plan and to decide any questions and settle all controversies
and disputes that may arise in connection with the Plan. Subject to Section 8
the Board shall also have the authority, both generally and in particular
instances, to waive compliance by an employee with any obligation to be
performed by him under an option and to waive any condition or provision of an
option, except that the Board may not take any action with respect to an
outstanding award that would adversly affect the rights of a participant under
such award without such participants consent. Nothing in the preceding
sentence shall be construed as limiting the power of the Board to make
adjustments required by Section 4(c) and Section 6(j).
3. Effective Date and Term of Plan
The Plan shall become effective on the date on which the Plan is approved
by the shareholders of the Company. Grants of options under the Plan may be
made prior to that date (but after adoption of the Plan by the Board of
Directors), subject to approval of the Plan by such shareholders.
No option shall be granted under the Plan after the completion of ten
years from the date on which the Plan was adopted by the Board of Directors,
but options previously granted may extend beyond that date.
4. Shares Subject to the Plan
(a) Number of Shares. Subject to adjustment as provided in Section 4(c),
the maximum aggregate number of shares of Stock that may be delivered upon the
exercise of options granted under the Plan shall be 2,000,000. If any option
granted under the Plan terminates without having been exercised in full, the
number of shares of Stock as to which such option was not exercised shall be
available for future grants within the limits set forth in this Section 4(a).
(b) Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in
treasury. No fractional shares of Stock shall be delivered under the Plan.
(c) Changes in Stock. In the event of a stock dividend, stock split or
combination of shares, recapitalization or other change in the company s
capital stock, the number and kind of shares of stock or securities of the
Company subject to options then outstanding or subsequently granted under the
Plan, the maximum number of shares or securities that may be delivered under
the Plan, the exercise price, and other relevant provisions shall be
approximately adjusted by the Board, whose determination shall be binding on
all persons.
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The Board may also adjust the number of shares subject to outstanding
options, the exercise price of outstanding options and the terms of outstanding
options, to take into consideration material changes in accounting practices or
principles, consolidations or mergers (except those described in Section 6(j)),
acquisitions or dispositions of stock or property or any other event if it is
determined by the Board that such adjustment is appropriate to avoid distortion
in the operation of the Plan, provided that no such adjustment shall be made in
the case of an incentive option, without the consent of the participant, if it
would constitute a modification, extension or renewal of the option within the
meaning of section 424(h) of the Code.
(d) Replacement Options. The Board may grant options under the Plan in
substitution for options held by employees of another corporation who
concurrently become employees of the Company or a subsidiary as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary or the acquisition by the Company or a subsidiary of property or
stock of the employing corporation. The Board may direct that the replacement
options be granted on such terms and conditions as the Board considers
appropriate in the circumstances.
5. Eligibility For Options
Employees eligible to receive options under the Plan shall be those
employees of the Company and its subsidiaries who, in the opinion of the Board,
are in a position to make a significant contribution to the success of the
Company or such subsidiaries. A subsidiary for the purpose of the Plan shall
be a corporation in which the Company owns, directly or indirectly, stock
possessing 50% or more of the total combined voting power of all classes of
stock.
Directors who are not employees shall not be eligible to participate in
the Plan. Incentive options shall be granted only to "employees" as defined in
the provisions of the code or regulations thereunder applicable to incentive
stock options. Receipt of options under the Plan or of awards under any other
employee benefit plan of the Company or any of its subsidiaries shall not
preclude an employee from receiving options or additional options under the
Plan.
6. Terms and Conditions of Options
(a) Exercise Price. The exercise price of each option shall be
determined by the Board but in the case of an incentive option shall not be
less than 100% (110%, in the case of an incentive option granted to a ten-
percent shareholder) of the fair market value per share of the Stock at the
time the incentive option is granted; nor shall the exercise price of any
option be less, in the case of an original issue of authorized stock, than par
value per share. For this purpose, Fair market value in the case of
incentive options shall have the same meaning as it does in the provisions of
the Code and the regulations thereunder applicable to incentive options: and
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"ten-percent shareholder" shall mean any employee who at the time of grant owns
directly, or is deemed to own by reason of the attribution rules set forth in
section 424(d) of the Code, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any of its
parent or subsidiary corporations.
(b) Duration of Options. In no case shall an option be exercisable more
than ten years (five years, in the case of an incentive option granted to a
"ten-percent shareholder" as defined in (b) above) from the date the option was
granted.
(c) Exercise of Options.
(1) Each option shall be made exercisable at such time or times,
whether or not in installments, as the Board shall prescribe at the time
an option is granted. In the case of an option not immediately
exercisable in full, the Board may at any time accelerate the time at
which all or any part of the option may be exercised.
(2) The award forms or other instruments evidencing incentive
options shall contain such provisions relating to exercise and other
matters as are required of incentive options under the applicable
provisions of the Code and the regulations thereunder, as from time to
time in effect.
(3) Any exercise of an option shall be in writing, signed by the
proper person and delivered or mailed to the Company, accompanied by (a)
the option certificate and any other documents required by the Board and
(b) payment in full for the number of shares for which the option is
exercised.
(4) In the case of an option that is not an incentive option, the
Board shall have the right to require that the individual exercising the
option remit to the Company an amount sufficient to satisfy any federal,
state, or local withholding tax requirements (or make other arrangements
satisfactory to the Company with regard to such taxes) prior to the
delivery of any Stock pursuant to the exercise of the option. In the case
of an incentive option, if at the time the option is exercised the Board
determines that under applicable law and regulations the company could be
liable for the withholding of any federal or state tax with respect to a
disposition of the Stock received upon exercise, the Board may require as
a condition of exercise that the individual exercising the option agree
(i) to inform the company promptly of any disposition (within the meaning
of section 424(c) of the Code and the regulations thereunder) of Stock
received upon exercise, and (ii) to give such security as the Board deems
adequate to meet the potential liability of the Company for the
withholding of tax, and to augment such security from time to time in any
amount reasonably deemed necessary by the Committee to preserve the
adequacy of such security.
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(5) If an option is exercised by the executor or administrator of a
deceased employee, or by the person or persons to whom the option has been
transferred by the employee s will or the applicable laws of descent and
distribution, the Company shall be under no obligation to deliver Stock
pursuant to such exercise until the Company is satisfied as to the
authority of the person or persons exercising the option.
(d) Payment for and Delivery of Stock. Stock purchased under the Plan
shall be paid for as follows: (i) in cash or by certified check, bank draft or
money order payable to the order of the Company or (ii) if so permitted by the
terms of the option, (A) through the delivery of shares of Stock having a fair
market value on the last business day preceding the date of exercise equal to
the purchase price or (B) by a combination of cash and Stock as provided in
clauses (i) and (ii)(A) above or (iii) if so permitted by the terms of the
option, by delivery of a promissory note of the employee containing such terms
and conditions, including without limitation interest rate and maturity, as the
Board may specify in the option (except that the option may provide that the
rate of interest on the note will be such rate as is sufficient at all times to
avoid the imputation of any interest under the applicable provisions of the
Code), or by a combination of cash (or cash and Stock) and such a promissory
note; provided, that if the Stock delivered upon exercise of the option is an
original issue of authorized Stock, at least so much of the exercise price as
represents the par value of such Stock shall be paid in cash or by a
combination of cash and Stock.
An option holder shall not have the rights of a shareholder with regard to
awards under the Plan except as to Stock actually received by him under the
Plan.
The Company shall not be obligated to deliver any shares of Stock (a)
until, in the opinion of the Company's counsel, all applicable federal and
state laws and regulations have been complied with, and (b) if the outstanding
Stock is at the time listed on any stock exchange, until the shares to be
delivered have been listed or authorized to be listed on such exchange upon
official notice of issuance, and (c) until all other legal matters in
connection with the issuance and delivery of such shares have been approved by
the Company's counsel. If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the option, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act and may require
that the certificates evidencing such Stock bear an appropriate legend
restricting transfer.
(e) Nontransferability of Options. No option may be transferred other
than by will or by the laws of descent and distribution, and during an
employee s lifetime an option may be exercised only by him.
(f) Death. If an employee's employment with the Company and its
subsidiaries terminates for any reason other than death, all options held by
the employee that are not then exercisable shall terminate. Options that are
exercisable on the date of termination shall continue to be exercisable for a
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period of three months (subject to Section 6(b)) unless the employee was
discharged for cause which in the opinion of the Board casts such discredit on
him as to justify termination of his options. After completion of that three-
month period such options shall terminate to the extent not considered
terminated (i) in the case of sick leave or other bona fide leave of absence
approved for purposes of the Plan by the Board, so long as the employee s right
to reemployment is guaranteed either by statute or by contract, or (ii) in the
case of a transfer of employment between the Company and a subsidiary or
between subsidiaries, or to the employment of a corporation (or a parent or
subsidiary corporation of such corporation) issuing or assuming an option in a
transaction to which section 424(a) of the Code applies.
(g) Other Termination of Employment. If an employee's employment with
the Company and its subsidiaries terminates for any reason other than death,
all options held by the employee that are not then exercisable shall terminate.
Options that are exercisable on the date of termination shall continue to be
exercisable for a period of three months (subject to Section 6(b) unless the
employee was discharged for cause which in the opinion of the Board casts such
discredit on him as to justify termination of his options. After completion of
that three-month period such options shall terminate to the extent not
previously exercised, expired or terminated. For purposes of this Section
6(g), employment shall not be considered terminated (i) in the case of sick
leave or other bona fide leave of absence approved for purposes of the Plan by
the Board, so long as the employee's right to reemployment is guaranteed either
by statute or by contract, or (ii) in the case of a transfer of employment
between the Company and a subsidiary or between subsidiaries, or to the
employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an option in a transaction to which Section
424(a) of the Code applies.
7. Employment Rights
Neither the adoption of the Plan nor the grant of options shall confer
upon any employee any right to continued employment with the Company or any
parent or subsidiary or affect in any way the right of the company or parent or
subsidiary to terminate the employment of an employee at any time. Except as
specifically provided by the Board in any particular case, the loss of existing
or potential profit in options granted under this Plan shall not constitute an
element of damages in the event of termination of the employment of an employee
even if the termination is in violation of an obligation of the Company to the
employee by contract or otherwise.
8. Effects of Discontinuance, Cancellation, Amendment and Termination
Neither adoption of the Plan nor the grant of options to an employee shall
affect the Company s right to grant to such employee options that are not
subject to the Plan, to issue to such employees Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
employees.
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The Board may at time discontinue granting options under the Plan. With
the consent of the employee, the Board may at any time cancel an existing
option in whole or in part and gant the employee another option for such number
of shares as the Board specifies. The Board may at any time or times amend the
Plan for the purpose of satisfying the requirements of section 422(a) of the
Code or of any changes in applicable laws or regulations and the Board of
Directors may amend the Plan for any other purpose which may at the time be
permitted bylaw or may at any time terminate the Plan as to any further
grants of options, provided that (except to the extent expressly required or
permitted herein above) no such amendment shall, without the approval of the
shareholders of the Company, (a) increase the maximum number of shares available
under the Plan, (b) change the group of employees eligible to receive options
under the Plan, (c) reduce the price at which incentive options may be
granted, (d) extend the time within which options may be granted, (e) alter the
Plan in such a way that incentive options already granted hereunder would not be
considered incentive stock options under section 422A of the Code, or (f) amend
the provisions of this Section 8, and no such amendment shall adversely affect
the rights of any employee (without his consent) under an option previously
granted.
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