1
EXHIBIT 99(c)
OWEN HEALTHCARE, INC.
1992 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
I. PURPOSE OF THE PLAN
The OWEN HEALTHCARE, INC. 1992 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
(the "Plan") is intended to promote the interests of OWEN HEALTHCARE, INC., a
Texas corporation (the "Company"), and its shareholders by helping to award and
retain highly-qualified independent directors, and allowing them to develop a
sense of proprietorship and personal involvement in the development and
financial success of the Company. Accordingly, the Company shall grant to
directors of the Company who are not employees of the Company or any of its
subsidiaries ("Nonemployee Directors") the option ("Option") to purchase shares
of the Common Stock, no par value per share, of the Company ("Stock"), as
hereinafter set forth. Options granted under the Plan shall be options which do
not constitute incentive stock options, within the meaning of section 422(b) of
the Internal Revenue Code of 1986, as amended.
II. OPTION AGREEMENTS
Each Option shall be evidenced by a written agreement in the form
attached to the Plan.
III. ELIGIBILITY OF OPTIONEE
Options shall be granted only to individuals who are Nonemployee
Directors of the Company. Each Nonemployee Director who is elected or appointed
to the Board of Directors of the Company (the "Board") for the first time after
the effective date of the Plan shall receive, as of the date of his or her
election or appointment and without the exercise of the discretion of any person
or persons, an Option exercisable for 5,000 shares of Stock (subject to
adjustment in the same manner as provided in Paragraph VII hereof with respect
to shares of Stock subject to Options then outstanding). Thereafter and for as
long as the Plan is in effect as provided in Paragraph VI hereof, on the later
of the date of the third anniversary of (i) his or her election or appointment
to the Board, and (ii) the effective date of the Plan, and on each subsequent
third anniversary of such date, each Nonemployee Director who is serving on the
Board as of such date shall receive, without the exercise of the discretion of
any person or persons, an Option exercisable for 2,500 shares of Stock (subject
to adjustment in the same manner as provided in Paragraph VII hereof with
respect to shares of Stock subject to Options then outstanding). If, as of any
date that the Plan is in effect, there are not sufficient shares of Stock
available under the Plan to allow for the grant to each Nonemployee Director of
an Option for the number of shares provided herein on the applicable date, then
all Nonemployee
2
Directors who are entitled to a grant on such date shall share ratably in the
total number of shares of Stock then available under the Plan. A Nonemployee
Director shall be ineligible to receive a grant provided for in the Plan unless,
as of the date of such grant, the director has not been an employee of the
Company or any subsidiary of the Company for any part of the Company's preceding
fiscal year. All Options granted under the Plan shall be at the Option price set
forth in Paragraph V hereof and shall be subject to adjustment as provided in
Paragraph VII hereof.
IV. SHARES SUBJECT TO THE PLAN
The aggregate number of shares which may be issued under Options
granted under the Plan shall not exceed 120,000 shares of Stock. Such shares may
consist of authorized but unissued shares of Stock or previously issued shares
of Stock reacquired by the Company. Any of such shares which remain unissued and
which are not subject to outstanding Options at the termination of the Plan
shall cease to be subject to the Plan, but, until termination of the Plan, the
Company shall at all times make available a sufficient number of shares to meet
the requirements of the Plan. Should any Option hereunder expire or terminate
prior to its exercise in full, the shares theretofore subject to such Option may
again be subject to an Option granted under the Plan. The aggregate number of
shares which may be issued under the Plan shall be subject to adjustment in the
same manner as provided in Paragraph VII hereof with respect to shares of Stock
subject to Options then outstanding. Exercise of an Option shall result in a
decrease in the number of shares of Stock which may thereafter be available,
both for purposes of the Plan and for sale to any one individual, by the number
of shares as to which the Option is exercised.
V. OPTION PRICE
The purchase price of Stock issued under each Option shall be the fair
market value of Stock subject to the Option on the date the Option is granted.
For all purposes under the Plan, the fair market value of a share of Stock on a
particular date shall be equal to the average of the high and low sales prices
of the Stock (i) as reported by the National Market System of NASDAQ on that
date if the Stock is listed thereon, or (ii) on the stock exchange composite
tape on that date if the Stock is listed on a national exchange; or if in either
case no prices are reported on that date, on the last preceding date on which
such prices of the Stock are so reported. If the Stock is traded over the
counter at the time a determination of its fair market value is required to be
made hereunder, its fair market value shall be deemed to be equal to the average
between the reported high and low sales prices or closing bid and asked prices
of Stock on the most recent date on which Stock was publicly traded. In the
event Stock is not publicly
-2-
3
traded at the time a determination of its value is required to be made
hereunder, the determination of its fair market value shall be made by the Board
in such manner as it deems appropriate.
VI. TERM OF PLAN
The Plan shall be effective on the date the Plan is approved by the
shareholders of the Company. Except with respect to Options then outstanding, if
not sooner terminated under the provisions of Paragraph VIII, the Plan shall
terminate upon and no further Options shall be granted after the expiration of
ten years from the date of its approval by the shareholders of the Company.
VII. RECAPITALIZATION OR REORGANIZATION
(a) The existence of the Plan and the Options granted hereunder shall
not affect in any way the right or power of the Board or the shareholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.
(b) The shares with respect to which Options may be granted are shares
of Stock as presently constituted, but if, and whenever, prior to the expiration
of an Option theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on Stock
without receipt of consideration by the Company, the number of shares of Stock
with respect to which such Option may thereafter be exercised (i) in the event
of an increase in the number of outstanding shares shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.
(c) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise of an Option theretofore granted the
optionee shall be entitled to purchase under such Option, in lieu of the number
and class of shares of Stock then covered by such Option, the number and class
of shares of stock and securities to which the optionee would have been entitled
pursuant to the terms of the recapitalization if, immediately prior to such
recapitalization, the optionee had been the holder of record of the number of
shares of Stock then covered by such Option. If (i) the Company shall not be the
surviving entity in any merger, consolidation or other reorganization (or
survives only as a subsidiary of an entity other than a previously
-3-
4
wholly-owned subsidiary of the Company), (ii) the Company sells, leases or
exchanges or agrees to sell, lease or exchange all or substantially all of its
assets to any other person or entity (other than a wholly-owned subsidiary of
the Company), (iii) the Company is to be dissolved and liquidated, (iv) any
person or entity, including a "group" as contemplated by Section 13(d)(3) of the
Securities and Exchange Act of 1934, as amended (the "1934 Act"), except an
underwriter or similar entity in connection with a public offering of Stock,
acquires or gains ownership or control (including, without limitation, power to
vote) of more than 50% of the outstanding shares of Stock, or (v) as a result of
or in connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board (each such event is referred to herein as a "Corporate
Change"), then effective as of a date (selected by the Board) within (a) ten
days after the approval by the shareholders of the Company of such merger,
consolidation, reorganization, sale, lease or exchange of assets or dissolution
or such election of directors or (b) thirty days of such change of control, all
Options then outstanding will become fully vested and thereafter, upon any
exercise of an Option theretofore granted, the Optionee shall be entitled to
purchase under such Option, in lieu of the number of shares of Stock as to which
such Option shall then be exercisable, the number and class of shares of stock
or other securities or property to which the Optionee would have been entitled
pursuant to the terms of the agreement of merger, consolidation or sale of
assets and dissolution if, immediately prior to such merger, consolidation or
sale of assets and dissolution the Optionee had been the holder of record of the
number of shares of Stock as to which such Option is then exercisable.
(d) Any adjustment provided for in Subparagraphs (b) or (c)
above shall be subject to any required shareholder action.
(e) Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into shares of
stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to Options theretofore granted or the purchase
price per share.
VIII. AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Options have not theretofore been granted. The
Board shall not have the right to alter or amend the Plan or any part thereof
without the approval of the
-4-
5
shareholders of the Company, except for amendments that are necessary in order
for the Plan to meet all of the requirements of Rule 16b-3 promulgated under the
1934 Act, and as such rule may be amended from time to time.
IX. SECURITIES LAWS
(a) The Company shall not be obligated to issue any Stock pursuant to
any Option granted under the Plan at any time when the offering of the shares
covered by such Option have not been registered under the Securities Act of 1933
and such other state and federal laws, rules or regulations as the Company deems
applicable and, in the opinion of legal counsel for the Company, there is no
exemption from the registration requirements of such laws, rules or regulations
available for the offering and sale of such shares.
(b) If the Company becomes subject to Section 16 of the 1934 Act then,
from and after such time, it is intended that the Plan and any grant of an
Option made to a person subject to Section 16 of the 1934 Act, meet all of the
requirements of Rule 16b-3, as then in effect or as thereafter modified or
amended ("Rule 16b-3"), promulgated under the 1934 Act. If any provision of the
Plan or any such Option would disqualify the Plan or such Option under, or would
otherwise not comply with, Rule 16b-3, such provision or Option shall be
construed or deemed amended to conform to Rule 16b-3.
-5-