EXHIBIT 10.4
CONCENTRA MANAGED CARE, INC.
1999 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN
Section 1. PURPOSE. The purpose of the Concentra Managed Care, Inc. 1999
Stock Option and Restricted Stock Purchase Plan (the "Plan") is to promote the
interests of Concentra Managed Care, Inc., a Delaware corporation (the
"Company"), and any Subsidiary thereof and the interests of the Company's
stockholders by providing an opportunity to selected Employees, Consultants and
Non-Employee Directors of the Company to purchase Common Stock of the Company,
thereby enhancing the Company's ability to attract, retain, motivate and
encourage such persons to devote their best efforts to the business and
financial success of the Company. It is intended that this purpose will be
effected by awards of Non-Qualified Stock Options, Incentive Stock Options,
Restricted Stock, and/or Unrestricted Stock.
Section 2. DEFINITIONS. For purposes of the Plan, the following terms
used herein have the following meanings, unless a different meaning is clearly
required by the context:
2.1. "ADMINISTRATOR" means the Board of Directors or any Committees that
shall be administering the Plan in accordance with Section 4 hereof.
2.2. "ANNUAL OPTION" means a Non-Qualified Stock Option granted to a
Non-Employee Director on the next business day following each annual meeting of
stockholders at which such Non-Employee Director is elected as a Director, other
than the annual meeting of stockholders at which such Non-Employee Director is
initially elected a Director.
2.3. "APPLICABLE LAWS" means the legal requirements relating to the
administration of stock option plans under state corporate laws, federal and
state securities laws and the Code.
2.4. "AWARD" means any award of an Option or Stock under the Plan.
2.5. "BOARD OF DIRECTORS" means the Board of Directors of the Company.
2.6. "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
2.7. "COMMITTEE" means any committee appointed by the Board of Directors
in accordance with Section 4 of the Plan.
2.8. "COMMON STOCK" means the Common Stock, $.01 par value, of the
Company.
2.9. "CONSULTANT" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary of the Company to render services and who is
compensated for such services; PROVIDED, that the term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or who are
not compensated by the Company for their services as Directors.
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2.10. "DESIGNATED BENEFICIARY" means the beneficiary designated by a
Participant, in a manner determined by the Administrator, to receive amounts due
or exercise rights of the Participant in the event of the Participant's death.
In the absence of an effective designation by a Participant, Designated
Beneficiary shall mean the Participant's estate.
2.11. "DIRECTOR OPTION" means an Initial Option or an Annual Option.
2.12 "DIRECTOR" means any member of the Board of Directors.
2.13. "EMPLOYEE" means any person (including, without limitation, an
officer of the Company) who is employed by the Company or any Parent or
Subsidiary of the Company. Neither service as a Director nor payment of a
director's fee by the Company shall constitute "employment" by the Company.
2.14. "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in Common Stock) on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the National Market System thereof) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a share of Common Stock shall be the average between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
2.15. "INCENTIVE STOCK OPTION" means an Option granted to a Participant
pursuant to Section 6 (including Section 6.7 thereof) which is intended to meet
the requirements of Section 422 of the Code or any successor provision.
2.16. "INITIAL OPTION" means a Non-Qualified Stock Option granted
pursuant to Section 6.8 to a Non-Employee Director on the first business day
following his or her initial election to the Board of Directors.
2.17. "NON-EMPLOYEE DIRECTOR" means a Director who is not an employee of
the
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Company or any Parent, Subsidiary or affiliate of the Company.
2.18. "NON-QUALIFIED STOCK OPTION" means an Option granted to a
Participant pursuant to Section 6 that is not intended to be an Incentive Stock
Option.
2.19. "OPTION" means any Incentive Stock Option or Non-Qualified Stock
Option.
2.20. "PARENT" of the Company shall have the meaning set forth in
Section 424(e) of the Code.
2.21. "PARTICIPANT" means any Employee, Consultant or Non-Employee
Director to whom an Award is granted under the Plan.
2.22. "RESTRICTED PERIOD" means the period of time selected by the
Administrator during which shares subject to an Award of Restricted Stock may be
repurchased by or forfeited to the Company.
2.23. "REPORTING PERSON" means a Participant that is subject to Section
16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
2.24. "RESTRICTED STOCK" means shares of Common Stock awarded to a
Participant under Section 7 subject to restrictions under the Plan.
2.25. "STOCK" means shares of Restricted Stock or Unrestricted Stock.
2.26. "SUBSIDIARY" of the Company means any corporation or other entity
(i) of which a majority of the voting securities is owned, directly or
indirectly, by the Company, or (ii) with which the Company, or any corporation
or other entity of which a majority of the voting securities is owned, directly
or indirectly, by the Company, has entered into any management, operating, or
similar agreement to manage or operate any portion of such other corporation's
or entity's business, operations, or assets.
2.27. "UNRESTRICTED STOCK" means shares of Common Stock awarded to a
Participant under Section 7 free of any restrictions under the Plan.
Section 3. COMMON STOCK SUBJECT TO THE PLAN.
3.1. NUMBER OF SHARES. The total number of shares of Common Stock for
which Awards may be granted under the Plan shall not exceed in the aggregate
3,750,000 shares of Common Stock (subject to adjustment as provided in Section
3.3 hereof). The Company, during the term of this Plan, will at all times
reserve and keep available such number of shares of Common Stock as shall be
sufficient to satisfy the requirements of the Plan.
3.2. REISSUANCE. The shares of Common Stock that may be subject to
Awards under the Plan may be either authorized and unissued shares or shares
reacquired at any time and now
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or hereafter held as treasury stock as the Administrator may determine. In the
event that any outstanding Option expires, is terminated, forfeited or becomes
unexercisable for any reason without having been exercised in full, the shares
allocable to the unexercised portion of such Option may again be subject to an
Award under the Plan, subject, in the case of Incentive Stock Options, to any
limitation required by the Code. If any shares of Common Stock issued or sold
pursuant to an Award of Stock or the exercise of an Option shall have been
repurchased by the Company, then such shares shall not again be available for
future grant or award under the Plan.
3.3. STOCK DIVIDENDS, ETC. In the event that the Administrator, in its
sole discretion, determines that any stock dividend, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination or other similar transaction affects the Common Stock such
that an adjustment is required in order to preserve or prevent enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Administrator, subject, in the case of Incentive Stock Options, to any
limitation required under the Code, may equitably adjust any or all of (i) the
number and kind of shares in respect of which Awards may be made under the Plan,
(ii) the number and kind of shares subject to outstanding Awards, and (iii) the
award, exercise or conversion price with respect to any of the foregoing, and if
considered appropriate, the Administrator may cause the number of shares subject
to any Award always to be a whole number.
The Administrator may make Awards under the Plan in substitution for
stock and stock based awards held by employees of another corporation who
concurrently become employees of the Company as a result of a merger or
consolidation of the employing company with the Company or a Parent or
Subsidiary of the Company or the acquisition by the Company or a Parent or
Subsidiary of the Company of property or stock of the employing corporation. The
substitute Awards shall be granted on such terms and conditions as the
Administrator deems appropriate under the circumstances.
Section 4. ADMINISTRATION OF THE PLAN.
4.1. PROCEDURE.
(a) MULTIPLE ADMINISTRATIVE BODIES. The Plan may be
administered by different Committees with respect to different groups of
Participants.
(b) SECTION 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee consisting of two or more
Non-Employee Directors.
(c) RULE 16b-3. To the extent that the Administrator determines
it to be desirable to qualify transactions hereunder as exempt under Rule 16b-3
of the Exchange Act, the transactions contemplated hereunder shall be structured
to satisfy the requirements for exemption under Rule 16b-3.
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(d) OTHER ADMINISTRATION. Other than as provided above, the Plan
shall be administered by (i) the Board of Directors or (ii) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
4.2. POWERS OF THE ADMINISTRATOR. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific powers delegated by the
Board of Directors to such Committee, the Administrator shall have the
authority, in its discretion:
(a) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2.14 of the Plan;
(b) to select the Employees and Consultants to whom Awards may be
granted hereunder;
(c) to determine whether and to what extent awards of Options and
Stock, or any combination thereof, are granted hereunder;
(d) to determine the number of shares of Common Stock to be
covered by each Award made hereunder;
(e) to make determinations in accordance with Section 3.3;
(f) to determine the amount (not less than par value per share)
and the form of the consideration that may be used to purchase shares of Common
Stock pursuant to any Award of Stock or upon exercise of any Option (including,
without limitation, the circumstances under which issued and outstanding shares
of Common Stock owned by a Participant may be used by the Participant to
exercise an Option);
(g) to approve forms of agreements for use under the Plan;
(h) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Award granted hereunder, including without
limitation, the exercise price, the time or times when Options may be exercised
(which may be based on performance criteria), any vesting, acceleration or
waiver of forfeiture restrictions and any restriction or limitation regarding
any Award or the shares of Common Stock relating thereto, based in each case on
such factors as the Administrator, in its sole discretion, shall determine;
(i) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;
(j) to construe and interpret the terms of the Plan:
(k) to prescribe, amend and rescind rules and regulations
relating to the Plan;
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(l) to modify or amend the terms of any Award;
(m) to accelerate vesting periods with respect to outstanding
Options and the end of Restricted Periods with respect to Stock Awards;
PROVIDED, HOWEVER, that any Incentive Stock Options may only be "accelerated" in
accordance with Section 424(h) of the Code;
(n) to authorize any person to execute on behalf of the Company
any instrument required to effect any Award granted by the Administrator; and
(o) to exercise all other powers granted to the Administrator
under the Plan and make all other determinations deemed necessary or advisable
for administering the Plan.
4.3. EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's decisions,
determinations and interpretations shall be final and binding on all
Participants and any other holders of Options or Stock awarded under the Plan.
4.4. EXPENSES, ETC. All expenses and liabilities incurred by the
Administrator in the administration of the Plan shall be borne by the Company.
The Administrator may employ attorneys, consultants, accountants or other
persons in connection with the administration of the Plan. The Company, and its
officers and directors, shall be entitled to rely upon the advice, opinions or
valuations of any such persons. No member of the Administrator shall be liable
for any action, determination or interpretation taken or made in good faith with
respect to the Plan or any Award granted thereunder.
Section 5. ELIGIBILITY. Awards may be granted to any Employee,
Consultant or Non-Employee Director. The Administrator shall have the sole
authority to select the Employees and Consultants to whom discretionary Awards
are to be granted hereunder, and to determine whether a person is to be granted
a Non-Qualified Stock Option, an Incentive Stock Option, Restricted Stock or
Unrestricted Stock, or any combination thereof. Non-Employee Directors shall
only be eligible to receive grants of Non-Qualified Stock Options pursuant to
Section 6.8 of the Plan. No person other than an Employee, Consultant or
Non-Employee Director shall have any right to participate in the Plan. Any
person selected by the Administrator for participation during any one period
will not by virtue of such participation have the right to be selected as a
Participant for any other period. The maximum number of shares of Common Stock
which may be the subject of Awards granted to any one Employee or Consultant
under the Plan during any calendar year shall be 300,000 shares. For this
purpose, the grant of a new Award in substitution for outstanding Awards shall
be deemed to constitute a new grant, separate from the original grant that is to
be canceled. Incentive Stock Options may be granted only to persons eligible to
receive Incentive Stock Options under the Code.
Section 6. OPTIONS.
6.1. AWARD. Subject to the provisions of the Plan, the Administrator may
award Incentive Stock Options and Non-Qualified Stock Options, and determine the
number of shares to be covered by each Option, the option price therefor and the
conditions and limitations
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applicable to the exercise of the Option. The terms and conditions of Incentive
Stock Options shall be subject to and comply with Section 422 of the Code, or
any successor provision, and any regulations thereunder.
6.2. EXERCISE PRICE. The Administrator shall establish the exercise
price of each Option at the time such Option is awarded. Such price shall not be
less than 85% of the Fair Market Value of the Common Stock on the date of grant;
PROVIDED, that (i) in the case of an Incentive Stock Option, the exercise price
shall not be less than 100% of the Fair Market Value of the Common Stock at the
time of grant and (ii) in the case of a Non-Qualified Stock Option intended to
qualify as "performance-based compensation" within the meaning of Section 162(m)
of the Code, the exercise price shall not be less than 100% of the Fair Market
Value at the time of grant.
6.3. VESTING. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Administrator may specify in the applicable
Option agreement or thereafter. The Administrator may impose such conditions
with respect to the exercise of Options, including conditions relating to
applicable federal or state securities laws, as it considers necessary or
advisable.
6.4. PAYMENT. Options granted under the Plan may provide for the payment
of the exercise price by delivery of cash or check in an amount equal to the
exercise price of such Options or, to the extent permitted by the Administrator
at or after the award of the Option, by (a) delivery of shares of Common Stock
owned by the optionee, valued at their Fair Market Value on the date of such
option exercise, (b) delivery of a promissory note of the optionee to the
Company on terms determined by the Administrator, (c) delivery of an irrevocable
undertaking by a broker to deliver promptly to the Company sufficient funds to
pay the exercise price or delivery of irrevocable instructions to a broker to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price, (d) payment of such other lawful consideration as the Administrator may
determine, or (e) any combination of the foregoing. In the event an optionee
pays some or all of the exercise price of an Option by delivery of shares of
Common Stock pursuant to clause (a) above, the Administrator may provide for the
automatic award of an Option for up to the number of shares so delivered.
6.5. TRANSFERABILITY. Except as otherwise specifically approved by the
Administrator, each Option granted under the Plan shall provide that neither it
nor any interest therein may be transferred, assigned, pledged or hypothecated,
by the optionee or by operation of law otherwise than by will, the laws of
descent and distribution or a "qualified domestic relations order" (as defined
in the Code), and shall be exercised during the lifetime of the optionee only by
the optionee or a transferee pursuant to such a "qualified domestic relations
order". No Option or interest therein may be or be made subject to execution,
attachment or similar process.
6.6 CANCELLATION AND NEW GRANT OF OPTIONS. The Board of Directors shall
have the authority to effect, at any time and from time to time, with the
consent of the affected optionees, (i) the cancellation of any or all
outstanding options under the Plan and the grant in substitution therefor of new
Options under the Plan covering the same or different numbers of shares of
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Common Stock and having an option exercise price per share which may be lower or
higher than the exercise price per share of the canceled Options, or (ii) the
amendment of the terms of any and all outstanding Options under the Plan to
provide an option exercise price per share which is higher or lower than the
then current exercise price per share of such outstanding Options.
6.7. INCENTIVE STOCK OPTIONS. Options granted under the Plan which are
intended to be Incentive Stock Options shall be subject to the following
additional terms and conditions:
(a) All Incentive Stock Options granted under the Plan shall, at
the time of grant, be specifically designated as such in the option agreement
covering such Incentive Stock Options. The exercise period shall not exceed ten
years from the date of grant.
(b) If any Employee to whom an Incentive Stock Option is to be
granted under the Plan is, at the time of the grant of such option, the owner of
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company (after taking into account the attribution of stock
ownership rule of Section 424(d) of the Code), then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual:
(i) The purchase price per share of the Common Stock
subject to such Incentive Stock Option shall not be less than 110% of the Fair
Market Value of one share of Common Stock at the time of grant; and
(ii) The Option exercise period shall not exceed five
years from the date of grant.
(c) For so long as the Code shall so provide, options granted to
any Employee under the Plan (and any other incentive stock option plans of the
Company or its Subsidiaries) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
Options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate Fair Market Value
(determined as of the respective date or dates of grant) of more than $100,000.
(d) No Incentive Stock Option may be exercised unless, at the
time of such exercise, the Participant is, and has been continuously since the
date of grant of his or her Option, employed by the Company, except that:
(i) an Incentive Stock Option may be exercised
(to the extent exercisable on the date the Participant ceased to be an Employee
of the Company or a Parent or Subsidiary) within the period of three months
after the date the Participant ceases to be an employee of the Company or such
Parent or Subsidiary (or within such lesser period as may be specified in the
applicable option agreement); PROVIDED, that the agreement with respect to such
Option may designate a longer exercise period and that the exercise after such
three-month period shall be treated as the exercise of a Non-Qualified Stock
Option under the Plan;
(ii) if the Participant dies while in the employ of the
Company, or
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within three months after the Participant ceases to be an Employee, the
Incentive Stock Option (to the extent otherwise exercisable on the date of
death) may be exercised by the Participant's Designated Beneficiary within the
period of one year after the date of death (or within such lesser period as may
be specified in the applicable Option agreement); and
(iii) if the Participant becomes disabled (within the
meaning of Section 22(e)(3) of the Code or any successor provision thereto)
while in the employ of the Company, the Incentive Stock Option may be exercised
(to the extent otherwise exercisable on the date of death) within the period of
one year after the date of such disability (or within such lesser period as may
be specified in the Option agreement). In the event of the Participant's death
during this one-year period, the Incentive Stock Option may be exercised by the
Participant's Designated Beneficiary within the period of one year from the date
the Participant became disabled or within such lesser period as may be specified
in the applicable Option agreement.
For all purposes of the Plan and any Option granted hereunder, (i) "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Treasury Regulations under the Code (or any successor regulations) and (ii) any
Option may provide that if such Option shall be assumed or a new Option
substituted therefor in a transaction to which Section 424(a) of the Code
applies, employment by such assuming or substituting corporation shall be
considered for all purposes of such Option to be employment by the Company.
Notwithstanding the foregoing provisions, no Incentive Stock Option may be
exercised after its expiration date.
6.8. NON-EMPLOYEE DIRECTOR OPTIONS. Director Options shall be automatic
and subject to the following additional terms and conditions:
(a) All Director Options shall be Non-Qualified Stock Options.
(b) Each Non-Employee Director shall be granted an Initial Option
to purchase 1,000 shares of Common Stock on the date of his or her initial
election to the Board of Directors, and an Annual Option to purchase 1,000
shares of Common Stock on the next business day following each annual meeting of
stockholders.
(c) The exercise price of each Director Option will be 100% of
the Fair Market Value at the time of grant.
(d) Director Options shall become exercisable six months after
the time of grant. The exercise period shall not exceed ten years from the date
of grant; PROVIDED, that, subject to the provisions of Section 6.8(e), no
Director Option may be exercised more than 90 days after the optionee ceases to
serve as a director of the Company.
(e) if a Non-Employee Director dies or becomes disabled becomes
disabled (within the meaning of Section 22(e)(3) of the Code or any successor
provision thereto) while a director of the Company, the Option may be exercised
(to the extent otherwise exercisable on the date of disability or death), by
such disabled director or, in the case of death, by the director's Designated
Beneficiary, in each case within the period of one year after the date of
disability or
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death (or within such lesser period as may be specified in the applicable Option
agreement).
Section 7. RESTRICTED AND UNRESTRICTED STOCK.
7.1. GENERAL. The Board of Directors may grant Awards entitling
recipients to acquire shares of Common Stock, subject to the right of the
Company to repurchase all or part of such shares at their purchase price (or to
require forfeiture of such shares if purchased at no cost) from the recipient in
the event that conditions specified by the Administrator in the applicable Award
are not satisfied prior to the end of the applicable Restricted Period or
Restricted Periods established by the Administrator for such Award. Conditions
for repurchase (or forfeiture) may be based on continuing employment or service
and/or achievement of pre-established performance or other goals and objectives.
7.2. RESTRICTED STOCK. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as permitted by
the Administrator, during the applicable Restricted Period. Shares of Restricted
Stock shall be evidenced in such manner as the Board of Directors may determine.
Any certificates issued in respect of shares of Restricted Stock shall be
registered in the name of the Participant and, unless otherwise determined by
the Board of Directors, deposited by the Participant, together with a stock
power endorsed in blank, with the Company (or its designee). At the expiration
of the Restricted Period, the Company (or such designee) shall deliver such
certificates to the Participant or, if the Participant has died, to the
Participant's Designated Beneficiary.
7.3. UNRESTRICTED STOCK. The Administrator may, in its sole discretion,
grant (or sell at a purchase price determined by the Board of Directors, which
shall not be lower than 85% of Fair Market Value on the date of sale)
Unrestricted Stock to Participants.
7.4. PAYMENT. The purchase price for each share of Restricted Stock and
Unrestricted Stock shall be determined by the Administrator and may not be less
than the par value of the Common Stock. Such purchase price may be paid in the
form of past services or such other lawful consideration as is determined by the
Board of Directors.
7.5. CERTIFICATES. Stock certificates representing Shares of Restricted
Stock or Unrestricted Stock shall bear a legend referring to any restrictions
imposed thereon and such other matters as the Administrator may determine.
7.6. ACCELERATION. The Administrator may at any time accelerate the
expiration of the Restricted Period applicable to all, or any particular,
outstanding shares of Restricted Stock.
Section 8. GENERAL PROVISIONS APPLICABLE TO AWARDS.
8.1. APPLICABILITY OF RULE 16b-3. Those provisions of the Plan which
make an express reference to Rule 16b-3 shall apply to the Company only at such
time as the Company's Common Stock is registered under the Exchange Act, or any
successor provision, and then only with respect to Reporting Persons.
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8.2. DOCUMENTATION. Each Award under the Plan shall be evidenced by an
instrument delivered to the Participant specifying the terms and conditions
thereof and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Administrator considers necessary or advisable.
Such instruments may be in the form of agreements to be executed by both the
Company and the Participant, or certificates, letters or similar documents,
acceptance of which will evidence agreement to the terms thereof and of this
Plan.
8.3. ADMINISTRATOR DISCRETION. Each type of Award may be made alone, in
addition to or in relation to any other type of Award. The terms of each type of
Award need not be identical, and the Administrator need not treat Participants
uniformly.
8.4. TERMINATION OF STATUS. Subject to the provisions of Section 6, the
Administrator shall determine the effect on an Award of the disability, death,
retirement, authorized leave of absence or other termination of employment or
other status of a Participant and the extent to which, and the period during
which, the Participant's legal representative, guardian or Designated
Beneficiary may exercise rights under such Award.
8.5. MERGERS, ETC. In the event of a consolidation or merger or sale of
all or substantially all of the assets of the Company in which outstanding
shares of Common Stock are exchanged for securities, cash or other property of
any other corporation or business entity (an "Acquisition"), the Board of
Directors or the board of directors of any corporation assuming the obligations
of the Company, may, in its discretion, take any one or more of the following
actions as to outstanding Awards: (i) provide that such Awards shall be assumed,
or substantially equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof) on such terms as the Board of
Directors determines to be appropriate; (ii) upon written notice to
Participants, provide that all unexercised Options will terminate immediately
prior to the consummation of such transaction unless exercised by the
Participant within a specified period following the date of such notice; (iii)
in the event of an Acquisition under the terms of which holders of the Common
Stock of the Company will receive upon consummation thereof a cash payment for
each share surrendered in the Acquisition (the "Acquisition Price"), make or
provide for a cash payment to Participants equal to the difference between (A)
the Acquisition Price times the number of shares of Common Stock subject to
outstanding Options (to the extent then exercisable at prices not in excess of
the Acquisition Price) and (B) the aggregate exercise price of all such
outstanding Options in exchange for the termination of such Options; and (iv)
provide that all or any outstanding Awards shall become exercisable or
realizable in full prior to the effective date of such Acquisition.
8.6. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board of Directors may, in the
exercise of its sole discretion in such instances, declare that any Award shall
terminate as of a date fixed by the Board of Directors and give each Participant
the right to exercise his or her Option as to all or any of the shares subject
thereto, including shares as to which the Option would not otherwise be
exercisable, or may accelerate the termination of the Restricted Period of
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any Stock Award.
8.7. WITHHOLDING. The Participant shall pay to the Company, or make
provision satisfactory to the Administrator for payment of, any taxes required
by law to be withheld in respect of Awards under the Plan no later than the date
of the event creating the tax liability. In the Administrator's discretion, and
subject to such conditions as the Administrator may establish, such tax
obligations may be paid in whole or in part in shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their Fair
Market Value. The Company may, to the extent permitted by law, deduct any such
tax obligations from any payment of any kind otherwise due to the Participant.
8.8. FOREIGN NATIONALS. Awards may be made to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Administrator
considers necessary or advisable to achieve the purposes of the Plan or comply
with applicable laws.
8.9. AMENDMENT OF AWARD. The Administrator may amend, modify or
terminate any outstanding Award, including substituting therefor another Award
of the same or a different type, changing the date of exercise or realization
and converting an Incentive Stock Option to a Non-Qualified Stock Option;
PROVIDED, that the Participant's consent to such action shall be required unless
the Administrator determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
8.10. CONDITIONS ON DELIVERY OF COMMON STOCK. The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove restrictions from shares previously delivered under the Plan (i) until
all conditions of the Award have been satisfied or removed; (ii) until, in the
opinion of the Company's counsel, all applicable federal and state laws and
regulations have been complied with; (iii) if the outstanding Common Stock is at
the time listed on any stock exchange or admitted for trading on an automatic
quotation system, until the shares to be delivered have been listed or
authorized to be listed or quoted on such exchange or quotation system upon
official notice of notice of issuance; and (iv) 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 Common Stock has not been registered under
the Securities Act of 1933, as amended, the Company may require, as a condition
to exercise of the Award, such representations or agreements as the Company may
consider appropriate to avoid violation of such act and may require that the
certificates evidencing such Common Stock bear an appropriate legend restricting
transfer.
Section 9. MISCELLANEOUS
9.1. NO RIGHT TO EMPLOYMENT OR OTHER STATUS. The grant of an Award shall
not be construed as giving a Participant the right to continued employment or
service for the Company. The Company expressly reserves the right at any time to
dismiss a Participant free from any liability or claim under the Plan, except as
expressly provided in the applicable Award.
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9.2. NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
under the Plan until he or she becomes the record holder thereof.
9.3. EXCLUSION FROM BENEFIT COMPUTATIONS. No amounts payable upon
exercise of Awards granted under the Plan shall be considered salary, wages or
compensation to Participants for purposes of determining the amount or nature of
benefits that Participants are entitled to under any insurance, retirement or
other benefit plans or programs of the Company.
9.4. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained.
9.5. GRANTS EXCEEDING ALLOTTED SHARES. If the shares of Common Stock
covered by an Award exceeds, as of the date of grant, the number of Shares which
may be issued under the Plan without additional stockholder approval, such Award
shall be void with respect to such excess stock, unless such additional
stockholder approval is obtained in a timely manner.
9.6. EFFECTIVE DATE AND TERM.
(a) EFFECTIVE DATE. The Plan shall become effective on August 17,
1999, the date of its adoption by the Board of Directors, but no Incentive Stock
Option granted under the Plan shall become exercisable unless and until the Plan
shall have been approved by the Company's stockholders. If such stockholder
approval is not obtained within twelve months after the date of the Board of
Director's adoption of the Plan, no Options previously granted under the Plan
shall be deemed to be Incentive Stock Options and no Incentive Stock Options
shall be granted thereafter under the Plan. Amendments to the Plan not requiring
stockholder approval shall become effective when adopted by the Board of
Directors; amendments requiring stockholder approval shall become effective when
adopted by the Board of Directors, but no Incentive Stock Option granted after
the date of such amendment shall become exercisable (to the extent that such
amendment to the Plan was required to enable the Company to grant such Incentive
Stock Option to a particular optionee) unless and until such amendment shall
have been approved by the Company's stockholders. If such stockholder approval
is not obtained within twelve months of the Board of Director's adoption of such
amendment, any Incentive Stock Options granted on or after the date of such
amendment shall terminate to the extent that such amendment to the Plan was
required to enable the Company to grant such Option to a particular optionee.
Subject to the limitations set forth in this Section 9.6(a), Awards may be made
under the Plan at any time after the effective date and before the date fixed
for termination of the Plan.
(b) TERMINATION. The Plan shall terminate upon the earlier of (i)
the close of business on the day next preceding the tenth anniversary of the
date of its adoption by the Board of Directors, (ii) the date on which all
shares available for issuance under the Plan shall have
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been issued pursuant to Awards under the Plan, or (iii) by action of the Board
of Directors. No Award may be granted hereunder after termination of the Plan.
The termination or amendment of the Plan shall not alter or impair any rights or
obligations under theretofore granted under the Plan.
9.7. AMENDMENT OF PLAN. The Board of Directors may amend, suspend or
terminate the Plan or any portion thereof at any time; PROVIDED, that no
amendment shall be made without stockholder approval if such approval is
necessary to comply with any applicable tax or regulatory requirement (it being
understood that prior to any such approval, Awards may be made under the Plan
expressly subject to such approval); and PROVIDED FURTHER, that, in accordance
with Section 8.9, the Participant's consent to any such action with respect to
its effect on any outstanding Award shall be required unless the Administrator
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
9.8. GOVERNING LAW. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Company, acting by and through its officer
hereunto duly authorized, has executed the Plan as of this 17th day of August,
1999.
CONCENTRA MANAGED CARE, INC.
By: /s/ DANIEL J.THOMAS
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Daniel J. Thomas
President and Chief Executive Officer