As filed with the Securities and Exchange Commission on May 16, 2008
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
BIOSCRIP, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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05-0489664
(I.R.S. Employer Identification No.)
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100 Clearbrook Road
Elmsford, NY 10523
(Address of Principal Executive Offices)
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10523
(Zip
Code)
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Restricted Stock Grant Agreements
Stock Option Agreements
BioScrip, Inc. 2008 Equity Incentive Plan
(Full Title of the Plan)
Barry A. Posner
General Counsel
BioScrip, Inc.
100 Clearbrook Road
Elmsford, NY 10523
(Name and Address of Agent for Service)
(914) 460-1600
(Telephone Number, Including Area Code, of Agent for Service)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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CALCULATION OF REGISTRATION FEE
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Proposed
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Proposed
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Maximum
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Maximum
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Title of Securities
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Amount to be
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Offering
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Aggregate
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Amount of
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to be Registered
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Registered (1)(2)
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Price Per Share (3)
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Offering Price (3)
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Registration Fee (3)
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Common Stock, par
value $0.0001 per
share
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3,370,000
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$
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3.95
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$
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13,311,500
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$
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523.14
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Common Stock, par
value $0.0001 per
share
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210,339
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(4)
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$
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3.95
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$
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830,840
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$
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32.65
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Total
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$
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555.79
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(1)
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Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”),
this registration statement also covers an indeterminate number of additional shares of common
stock issuable with respect to the shares being registered hereunder by reason of any stock
dividend, stock split, recapitalization or other similar transaction effected without the
receipt of consideration that increases the number of the registrant’s outstanding shares of
common stock.
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(2)
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Includes the associated Series A Junior Participating Preferred Stock purchase rights.
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(3)
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Estimated pursuant to Rule 457(h) under the Securities Act for the purpose of determining
the registration fee, based upon the average of the high and low prices on May 14, 2008.
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(4)
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Represents 160,339 shares of restricted common stock issued pursuant to certain restricted
stock awards and 50,000 shares of common stock issuable upon the exercise of certain stock
options, all of which were issued as an inducement material to such persons entering into
employment with the registrant.
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TABLE OF CONTENTS
EXPLANATORY NOTE
This Registration Statement contains two parts. The first part contains a resale prospectus
prepared in accordance with General Instruction C of Form S-8 and in accordance with the
requirements of Part I of Form S-3, which covers reoffers and resales of “restricted securities”
and/or “control securities” upon the vesting of restricted stock grants and the exercise of stock
options granted by the registrant to employees outside of the registrants’ stock option plans. The
second part of this Registration Statement contains information required in the Registration
Statement pursuant to Part II of Form S-8.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
In accordance with Rule 428 under the Securities Act of 1933, as amended (the “Securities Act”),
and the instructional note to Part I of Form S-8, the information specified in Part I of Form S-8
has been omitted from the filing of this registration statement. The documents containing the
information specified in Part I of Form S-8 will be sent or given to participating employees as
specified by Rule 428(b)(1) of the Securities Act. Such documents and the documents incorporated by
reference in this registration statement pursuant to Item 3 of Part II of this registration
statement, taken together, constitute a prospectus that meets the requirements of Section 10(a) of
the Securities Act.
Item 2. Registrant Information and Employee Plan Annual Information
Upon written or oral request by a participant in the 2008 Equity Incentive Plan, the Registrant
will provide any of the documents incorporated by reference into the Section 10(a) prospectus,
which documents are incorporated by reference into the Section 10(a) prospectus, and any document
required to be delivered to the participants pursuant to Rule 428(b), in each case without charge,
by contacting:
BioScrip, Inc.
100 Clearbrook Road
Elmsford, NY 10523
Attention: General Counsel
(914) 460-1600
Resale Prospectus
210,339 shares of Common Stock
BioScrip, Inc.
This prospectus relates to the offer and sale from time to time of up to 210,339 shares (the
“Shares”) of our common stock by the selling stockholders named in this prospectus. The Shares
include 160,339 shares of our restricted common stock issued pursuant to certain restricted stock
award agreements and 50,000 shares of our common stock underlying stock options issuable pursuant
to certain stock option agreements. The selling stockholders may offer the shares from time to
time through public or private transactions at prevailing market prices, at prices related to
prevailing market prices or at other negotiated prices. A selling stockholder may sell none, some
or all of the shares offered by this prospectus. We cannot predict when or in what amounts a
selling stockholder may sell any of the shares offered by this prospectus. We will not receive any
of the proceeds from the sale of shares by the selling stockholders.
All costs, expenses and fees in connection with the registration of the Shares will be borne by us.
Brokerage commissions and other selling expenses, if any, will be borne by the selling
stockholders. See “Use of Proceeds and Plan of Distribution.”
Our common stock is traded on the Nasdaq Global Market under the symbol “BIOS.” On May 12, 2008,
the closing price for our common stock was $3.79 per share.
INVESTING IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS THAT ARE DESCRIBED IN THE “RISK FACTORS”
SECTION BEGINNING ON PAGE 2 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is May 16, 2008.
Table of Contents
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The Company
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1
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Risk Factors
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2
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Cautionary Statement Regarding Forward-Looking Statements
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The Selling Stockholders
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7
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Use of Proceeds and Plan of Distribution
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Legal Matters
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9
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Experts
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9
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Where You Can Find More Information
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Incorporation of Certain Documents By Reference
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10
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Preliminary Note
You should rely only on the information contained in this prospectus. We have not authorized anyone
to provide you with information that is different. The selling stockholders are offering to sell
and seeking offers to buy shares of our common stock only in jurisdictions where offers and sales
are permitted. The information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale of our common
stock.
The Company
We are a specialty pharmaceutical healthcare organization that partners with patients, physicians,
healthcare payors and pharmaceutical manufacturers to provide access to medications and management
solutions to optimize outcomes for chronic and other complex healthcare conditions.
Our specialty pharmaceutical services (“Specialty Services”) include the comprehensive support,
dispensing and distribution, patient care management, data reporting as well as a range of other
complex management services for certain medications. These medications include orals, injectables
and infusibles used to treat patients living with chronic health conditions and are provided in
various capacities to patients, physicians, healthcare payors and pharmaceutical manufacturers. Our
pharmacy benefit management (“PBM”) services include pharmacy network management, claims
processing, benefit design, drug utilization review, formulary management and traditional mail
order pharmacy fulfillment. These services are reported under two operating segments: (i) Specialty
Services; and (ii) PBM and Mail Services (collectively, “PBM Services”).
Specialty Services and PBM Services revenues are derived from our relationships with healthcare
payors including managed care organizations, government-funded and/or operated programs,
pharmaceutical manufacturers, patients and physicians as well as a variety of third party payors,
including third party administrators (“TPAs”) and self-funded employer groups (collectively “Plan
Sponsors”).
Our Specialty Services are marketed and/or sold primarily to healthcare payors, pharmaceutical
manufacturers, physicians, and patients, and target certain specialty medications that are used to
treat patients living with chronic health conditions. These services include the distribution of
biotech and other high cost injectable, oral and infusible prescription medications and the
provision of therapy management services.
Our PBM Services are marketed to healthcare payors including employer groups and TPAs and are
designed to promote a broad range of cost-effective, clinically appropriate pharmacy benefit
management services through our national PBM retail network and our own mail service distribution
facility. We also administer prescription discount card programs on behalf of commercial Plan
Sponsors, most typically TPAs. Under such programs we derive revenue on a per claim basis from the
dispensing network pharmacy.
Over the past several years our strategic growth has been focused on building our Specialty
Services. Consequently, Specialty Services revenues have grown to more than 80% of our total
revenue.
Our principal executive offices are located at 100 Clearbrook Road, Elmsford, NY 10523, and our
telephone number is (914) 460-1600. Our website is
www.bioscrip.com
. The information on our website
is not part of this prospectus.
1
Risk Factors
An investment in our common stock involves a high degree of risk. You should consider carefully the
risks and uncertainties described below and the other information in this prospectus, including our
financial statements and related notes, before deciding to invest in our common stock. If any of
the following risks or uncertainties actually occurs, our business, financial condition and
operating results would likely suffer. Additional risks and uncertainties not currently known to us
or those we currently view to be immaterial may also materially adversely affect our business,
financial condition or results of operations. In that event(s), the market price of the offered
securities could decline and you could lose all or part of the money you paid to buy our common
stock.
Competition in the pharmaceutical healthcare services industry could reduce profit margins.
The pharmaceutical healthcare services industry is very competitive. Our competitors include large
and well-established companies that may have greater financial, marketing and technological
resources than we do.
The specialty pharmacy industry is highly competitive. Some of our competitors are under common
control with, or ownership by, pharmaceutical wholesalers and distributors, pharmacy benefit
managers or retail pharmacy chains and may be better positioned with respect to the cost-effective
distribution of pharmaceuticals. In addition, some of our competitors may have secured long-term
supply or distribution arrangements for prescription pharmaceuticals necessary to treat certain
chronic disease states on price terms substantially more favorable than the terms currently
available to us. As a result of such advantageous pricing, we may be less price competitive than
some of these competitors with respect to certain pharmaceutical products. Our competitive position
could also be adversely affected by any inability to obtain access to new biotech pharmaceutical
products.
Over the last several years competition in the marketplace has caused many PBMs, including us, to
reduce the prices charged to clients for core services and share a larger portion of the formulary
fees and rebates received from pharmaceutical manufacturers with clients. This combination of lower
pricing and increased rebate sharing, as well as increased demand for enhanced service offerings
and higher service levels, have put pressure on operating margins. In addition, some of our larger
competitors may offer services and pricing terms that we may not be able to offer. This competition
may make it more difficult to maintain existing customers and attract new customers and may cause
us to face the risk of declining reimbursement levels without achieving corresponding reductions in
costs of revenues. Competition may also come from other sources in the future. As a result, we may
not continue to remain competitive in the PBM marketplace, and competition could have an adverse
effect on our business and financial results.
Changes in industry pricing benchmarks could adversely affect our financial performance.
Contracts in the prescription drug industry, including our contracts with our retail pharmacy
networks and our PBM and specialty pharmacy clients, generally use certain published benchmarks to
establish pricing for prescription medications. These benchmarks include Average Wholesale Price
(“AWP”), wholesale acquisition cost and average manufacturer price. Most of our commercial
contracts utilize the AWP benchmark.
In 2006, First DataBank, a leading provider of electronic drug information to the healthcare
industry, entered into a proposed settlement to address certain practices regarding the
establishment of the benchmark AWP for medications. While the court recently denied without
prejudice final approval of the proposed settlement, if the proposed settlement, or one including
similar provisions, is ultimately approved, it may have industry-wide impact on prescription
pricing. We generally utilize Medi-Span for determining AWP; in 2007, Medi-Span entered into a
proposed settlement agreement similar to that agreed to by First DataBank. We are paid by many
Health Plans and PBMs as a mail order and specialty pharmacy using AWP as reported by First
DataBank. Most of our provider and payor agreements contain provisions that allow us to manage the
impact of this proposed settlement if ratified as is or modified by the parties or the court. At
this time we are unable to determine whether changes to AWP pricing methodology or the First
DataBank and Medi-Span AWP settlements would have a material adverse effect on us or our financial
condition or prospects.
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Most of our provider and payor agreements contain provisions that allow us to manage the impact of
this proposed settlement, if ratified as is or modified by the parties or the court. However, we
can give no assurance that the short or long-term impact of changes to industry pricing benchmarks
will not have a material adverse effect on our financial performance, results of operations and
financial condition in future periods.
Client demands for enhanced service levels or possible loss or unfavorable modification of
contracts with clients or providers could pressure margins.
As our clients face the continued rapid growth in prescription drug costs, they may demand
additional services and enhanced service levels to help mitigate the increase in spending. We
operate in a very competitive environment, and we may not be able to increase our fees to
compensate for these increased services, which could put pressure on our margins.
Our contracts with clients generally do not have terms longer than three years and, in some cases,
may be terminated by the client on relatively short notice. Our clients generally seek bids from
other PBM or specialty providers in advance of the expiration of their contracts. If several of
these clients elect not to extend their relationship with us, and we are not successful in
generating sales to replace the lost business, our future business and operating results could be
materially adversely affected. In addition, we believe the managed care industry is undergoing
substantial consolidation, and another party that is not our client could acquire some of our
managed care clients. In such case, the likelihood such client would renew its contract with us
could be reduced.
More than 58,000 retail pharmacies, which represent more than 98% of all United States retail
pharmacies, participate in our PBM pharmacy network. The top ten retail pharmacy chains represent
approximately 48% of the total number of stores and over 60% of prescriptions filled in our
network. Our contracts with retail pharmacies, which are non-exclusive, are generally terminable on
relatively short notice. If one or more of the top pharmacy chains elects to terminate its
relationship with us, our members’ access to retail pharmacies and our business could be materially
adversely affected. In addition, many large pharmacy chains either own PBMs today, or could attempt
to acquire a PBM in the future. Ownership of PBMs by retail pharmacy chains could have material
adverse effects on our relationships with such pharmacy chains and on our consolidated results of
operations, consolidated financial position and/or consolidated cash flow from operations.
Pending and future litigation could subject us to significant monetary damages and/or require us to
change our business practices.
We are subject to risks relating to litigation and other proceedings in connection with our
operations, including the dispensing of pharmaceutical products by our mail service and community
pharmacies. A list of the more material proceedings pending against us is included under Part I,
Item 3, “Legal Proceedings” to the Annual Report on Form 10-K for the year ended December 31, 2007,
incorporated by reference herein. While we believe that these suits are without merit and intend
to contest them vigorously, we can give no assurance that an adverse outcome in one or more of
these suits would not have a material adverse effect on our consolidated results of operations,
consolidated financial position and/or consolidated cash flow from operations, or would not require
us to make material changes to our business practices. We are presently responding to several
subpoenas and requests for information from governmental agencies. We confirmed that BioScrip is
not a target or a potential subject of those investigations and requests. We cannot predict with
certainty what the outcome of any of the foregoing might be. In addition to potential monetary
liability arising from these suits and proceedings, we are incurring costs in the defense of the
suits and in providing documents to government agencies. Certain of the costs are covered by our
insurance, but certain other costs are not insured. Such costs have become material to our
financial performances and we can give no assurance that such costs will not increase in the
future.
We may be subject to liability claims for damages and other expenses that are not covered by
insurance.
A successful product or professional liability claim in excess of our insurance coverage could harm
our financial condition and results of operations. Various aspects of our business may subject us
to litigation and liability for damages, including the performance of PBM Services and the
operation of our pharmacies. A successful professional liability claim in excess of our insurance
coverage could harm our financial condition and results of operations. For example, a prescription
drug dispensing error could result in a patient receiving the wrong or
3
incorrect amount of medication, leading to personal injury or death. Our business, financial
condition and results of operations could suffer if we pay damages or defense costs in connection
with a claim that is outside the scope of any applicable contractual indemnity or insurance
coverage.
Existing and new government legislative and regulatory action could adversely affect our business
and financial results.
As a participant in the pharmaceutical healthcare services industry, our operations are subject to
complex and evolving Federal and state laws and regulations and enforcement by Federal and state
governmental agencies. These laws and regulations are described in detail at Part I, Item 1,
“Business — Government Regulation” of our Annual Report on Form 10-K for the year ended December
31, 2007, incorporated by reference herein. While we believe we are operating our business in
substantial compliance with all existing legal requirements material to the operation of our
business, different interpretations and enforcement policies of these laws and regulations could
subject our current practices to allegations of impropriety or illegality, or could require us to
make significant changes to our operations. In addition, if we fail to comply with existing or
future applicable laws and regulations, we could suffer civil or criminal penalties, including our
ability to participate in Federal and state healthcare programs. In addition, we cannot predict the
impact of future legislation and regulatory changes on our business or assure that we will be able
to obtain or maintain the regulatory approvals required to operate our business.
In addition, under the Deficit Reduction Act of 2006, additional Federal government matching of
state Medicaid funding was provided for states that commit resources to additional auditing of
Medicaid and Medicare fraud. This initiative has led to increased auditing activities by state
healthcare regulators. As such, we have been the subject of increased audits by these state
regulators. While we believe that we are in compliance with Medicaid and Medicare billing rules and
requirements, there can be no assurance that regulators disagree with the methodology employed by
us in billing for our products and services. While we believe that we are in material and
substantial compliance with the billing rules and requirements of Medicaid and Medicare, a material
disagreement between us and these governmental agencies on the manner in which we provide products
or services could have a material adverse effect on our business, operations, financial position
and results of operations.
Loss of relationships with one or more pharmaceutical manufacturers and changes in payments made by
pharmaceutical manufacturers could adversely affect our business and financial results.
We have contractual relationships with pharmaceutical manufacturers that provide discounts on drugs
dispensed from our mail service and community pharmacies, and pay service fees for other programs
and services that we provide. Our business and financial results could be adversely affected if:
(i) we were to lose relationships with one or more key pharmaceutical manufacturers; (ii) discounts
decline due to changes in utilization of specified pharmaceutical products by health Plan Sponsors
and other clients; (iii) legal restrictions are imposed on the ability of pharmaceutical
manufacturers to offer rebates, administrative fees or other discounts or to purchase our programs
or services; or (iv) pharmaceutical manufacturers choose not to offer rebates, administrative fees
or other discounts or to purchase our programs or services.
Failure to develop new products, services and delivery channels may adversely affect our business.
We operate in a highly competitive environment. We develop new products and services from time to
time to assist our clients in managing the pharmacy benefit. If we are unsuccessful in developing
innovative products and services, our ability to attract new clients and retain existing clients
may suffer.
Technology is also an important component of our business, as we continue to utilize new and better
channels to communicate and interact with our clients, members and business partners. If our
competitors are more successful than us in employing this technology, our ability to attract new
clients, retain existing clients and operate efficiently may suffer.
4
The success of our business depends on maintaining a well-secured business and technology
infrastructure.
We are dependent on our infrastructure, including our information systems, for many aspects of our
business operations. A fundamental requirement for our business is the secure storage and
transmission of personal health information and other confidential data. Our business and
operations may be harmed if we do not maintain our business processes and information systems, and
the integrity of our confidential information. Although we have developed systems and processes
that are designed to protect information against security breaches, failure to protect such
information or mitigate any such breaches may adversely affect our operating results. Malfunctions
in our business processes, breaches of our information systems or the failure to maintain effective
and up-to-date information systems could disrupt our business operations, result in customer and
member disputes, damage our reputation, expose us to risk of loss or litigation, result in
regulatory violations, increase administrative expenses or lead to other adverse consequences.
The use of personal health information in our business is regulated at Federal, state and local
levels. These laws and rules change frequently and developments often require adjustments or
modifications to our technology infrastructure. Noncompliance with these regulations could harm our
business, financial condition and results of operations.
Problems in the implementation and conversion of our new pharmacy system could result in additional
expense.
The Company has committed significant resources in a new pharmacy dispensing, clinical management
and accounts receivable management system designed to streamline our business processes, provide
improved data reporting, data management, scalability and cash posting and billing and collections.
Delays in the implementation of this system could result in higher operating costs, additional
charges for system design changes or delays in the execution of our strategic plan due to our
inability to scale our current operating systems.
Our failure to maintain controls and processes over billing and collecting could have a significant
negative impact on our results of operations and financial condition.
The collection of accounts receivable is a significant challenge and requires constant focus and
involvement by management and ongoing enhancements to information systems and billing center
operating procedures. If we are unable to properly bill and collect our accounts receivable, our
results could be materially and adversely affected. While management believes that controls and
processes are satisfactory there can be no assurance that accounts receivable collectibility will
remain at current levels.
Efforts to reduce healthcare costs and alter health care financing practices could adversely affect
our business.
During the past several years, the U.S. healthcare industry has been subject to an increase in
governmental regulation at both the Federal and state levels. Certain proposals have been made at
the Federal and state government levels in an effort to control healthcare costs, including
lowering reimbursement and/or proposing to lower reimbursement under Medicaid and Medicare
programs. These proposals include “single payor” government funded healthcare and price controls on
prescription drugs. If these or similar efforts are successful our business and operations could be
materially adversely affected. In addition, changing political, economic and regulatory influences
may affect healthcare financing and reimbursement practices. If the current healthcare financing
and reimbursement system changes significantly, our business could be materially adversely
affected. Congress periodically considers proposals to reform the U.S. healthcare system. These
proposals may increase government involvement in healthcare and regulation of PBM services, or
otherwise change the way our clients do business. Health Plan Sponsors may react to these proposals
and the uncertainty surrounding them by reducing or delaying purchases of cost control mechanisms
and related services that we provide. We cannot predict what effect, if any, these proposals may
have on our business. Other legislative or market-driven changes in the healthcare system that we
cannot anticipate could also materially adversely affect our consolidated results of operations,
consolidated financial position and/or consolidated cash flow from operations.
5
Prescription volumes may decline, and our net revenues and profitability may be negatively
impacted, when products are withdrawn from the market or when increased safety risk profiles of
specific drugs result in utilization decreases.
We process significant volumes of pharmacy claims for brand-name and generic drugs from our mail
service and community pharmacies and through our network of retail pharmacies. These volumes are
the basis for our net revenues and profitability. When products are withdrawn by manufacturers, or
when increased safety risk profiles of specific drugs or classes of drugs result in utilization
decreases, physicians may cease writing or reduce the numbers of prescriptions written for these
drugs. Additionally, negative media reports regarding drugs with higher safety risk profiles may
result in reduced consumer demand for such drugs. In cases where there are no acceptable
prescription drug equivalents or alternatives for these prescription drugs, our prescription
volumes, net revenues, profitability and cash flows may decline.
The loss of a relationship with one or more Plan Sponsors could negatively impact our business.
Where we do not have preferred or exclusive arrangements with Plan Sponsors, our contracts for
reimbursement with Plan Sponsors are often on a perpetual or “evergreen” basis. These evergreen
contracts are subject to termination by a Plan Sponsor upon 30, 60 or 90 days notice. Depending on
the significance of the Plan Sponsor or Plan Sponsors in the aggregate as a percentage of revenue,
one or more terminations could have a material and adverse effect on our results of operations and
financial performance. We are unaware of any intention by a Plan Sponsor to terminate or not renew
an agreement with us.
Network lock-outs by health insurers could adversely affect our financial results.
Many Plan Sponsors and PBMs continue to create exclusive specialty networks which limit a member’s
access to a mail service facility or network of preferred pharmacies. To the extent our pharmacies
are excluded from these networks, we are unable to dispense medications to those members and bill
for prescriptions to those members insurance carriers. If these specialty networks continue to
expand and we are locked out from dispensing specialty medications to members of exclusive
networks, our revenues, financial condition and results of operations could be adversely affected.
Cautionary Statement Regarding Forward-Looking Statements
This prospectus and our documents filed with the Securities and Exchange Commission (the “SEC”) and
incorporated by reference in this prospectus include or may contain certain forward-looking
statements. The words “may,” “will,” “expect,” “anticipate,” “believe,” “continue,” “estimate,”
“project,” “intend,” and similar expressions used in this prospectus are intended to identify
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). You should not place undue
reliance on these forward-looking statements, which speak only as of the date made. We undertake no
obligation to publicly release the result of any revision of these forward-looking statements to
reflect events or circumstances after the date they are made or to reflect the occurrence of
unanticipated events. You should also know that such statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions. We have included important
factors in the cautionary statements included or incorporated in this prospectus, particularly
under the caption “Risk Factors” below that we believe could cause actual results or events to
differ materially from the forward-looking statements we make. Our forward-looking statements do
not reflect the potential impact of any future acquisitions, mergers, dispositions, joint venture
or investments we may make.
All subsequent written and oral forward-looking statements concerning the matters addressed in this
prospectus attributable to us or any person acting on our behalf are expressly qualified in their
entirety by the cautionary statements contained or referred to in this prospectus. Except to the
extent required by applicable law or regulation, we undertake no obligation to update these
forward-looking statements to reflect events or circumstances after the date of this prospectus or
to reflect the occurrence of unanticipated events.
6
The Selling Stockholders
The selling stockholders may sell up to 210,339 shares of our common stock pursuant to this
prospectus consisting of 160,339 shares of our restricted common stock issued pursuant to certain
restricted stock awards and 50,000 shares of our common stock underlying stock options issuable
pursuant to certain stock options all of which were issued in reliance on NASDAQ Marketplace
Rule Section 4350(i)(iv) as issuances to persons who had not previously been an employee or
director of ours as an inducement material to such persons entering into employment with us. The
following table sets forth certain information known to us concerning each of the selling
stockholders. The shares are being registered to permit the selling stockholders to offer the
shares for resale from time to time. See “Plan of Distribution.”
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Number of
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Number of
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Shares
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Number of
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Shares
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Percentage of
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Beneficially
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Shares to be
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Beneficially
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Common Stock
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Owned Prior
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Offered by
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Owned After
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Owned After
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to the
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Selling
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Completion of
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Completion of
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Name of Seller
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Relationship to Company
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Offering(1)
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Stockholders
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the Offering (2)
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the Offering(1)
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George Breznicki
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Executive Director, Mail Operations
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16,968
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(3)
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4,093
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12,875
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(3)
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*
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James M. Daddio
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Sales Director
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23,500
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(4)
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23,500
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—
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(4)
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*
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Richard T. Goldsby
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Director of IT Operations
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33,575
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(5)
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32,000
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1,575
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(5)
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*
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Sandra M. Johnson
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Sales Director
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23,500
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(6)
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23,500
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—
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(6)
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*
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Phillip J. Keller
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Vice President, Finance
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83,545
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(7)
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34,966
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48,579
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(7)
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*
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Douglas A. Lee
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Chief Information Officer
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70,734
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(8)
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32,817
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37,917
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(8)
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*
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Thomas Ordemann
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Vice President, Community Pharmacy
Operations
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46,063
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(9)
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25,813
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20,250
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(9)
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*
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Stanley G. Rosenbaum
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Executive Vice President and Chief
Financial Officer
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270,289
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(10)
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33,650
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236,639
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(10)
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*
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*
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Less than 1%
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(1)
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Shares deemed beneficially owned by virtue of the right of an individual to acquire them
within 60 days after May 1, 2008 upon the exercise of an option to purchase shares of Common
Stock are treated as outstanding for purposes of determining beneficial ownership and the
percentage beneficially owned by such individual.
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(2)
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Assumes all the shares offered hereby are sold to persons who are not affiliates of the
selling stockholders and the selling stockholders sell no other shares they beneficially own.
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(3)
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Does not include 29,687 shares subject to the unvested portion of options held by Mr.
Breznicki.
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(4)
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Does not include 15,000 shares subject to the unvested portion of options held by Mr. Daddio.
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(5)
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Does not include 23,931 shares subject to the unvested portion of options held by Mr. Goldsby.
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(6)
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Does not include 15,000 shares subject to the unvested portion of options held by Ms. Johnson.
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(7)
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Includes 28,329 shares issuable upon exercise of the vested portion of options held by Mr.
Keller. Does not include 107,282 shares subject to the unvested portion of options held by
Mr. Keller.
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(8)
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Includes 26,667 shares issuable upon exercise of the vested portion of options held by Mr.
Lee. Does not include 78,645 shares subject to the unvested portion of options held by Mr.
Lee.
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(9)
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Does not include 130,625 shares subject to the unvested portion of options held by Mr.
Ordemann.
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(10)
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Includes 56,658 shares issuable upon exercise of the vested portion of options held by Mr.
Rosenbaum. Does not include 183,626 shares subject to the unvested portion of options held by
Mr. Rosenbaum.
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7
Use of Proceeds and Plan of Distribution
We will not receive any of the proceeds from the sale of the common stock by the selling
stockholders pursuant to this prospectus. The aggregate proceeds to the selling stockholders from
the sale of the common stock will be the purchase price of the common stock less any discounts and
commissions. A selling stockholder reserves the right to accept and, together with its agents, to
reject, any proposed purchase of common stock to be made directly or through agents.
The shares covered by this prospectus may be offered and sold from time to time by the selling
stockholders. The term “selling stockholders” includes donees, pledgees, transferees or other
successors-in-interest selling shares received after the date of this prospectus from a selling
stockholder as a gift, pledge, partnership distribution or other non-sale related transfer. The
selling stockholders will act independently of us in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made on one or more exchanges or in the
over-the-counter market or otherwise, at prices and under terms then prevailing or at prices
related to the then current market price or in negotiated transactions. The selling stockholders
may sell their shares by one or more of, or a combination of, the following methods:
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•
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purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
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•
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ordinary brokerage transactions and transactions in which the broker solicits purchasers;
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•
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block trades in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
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•
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in over-the-counter distribution in accordance with the rules of
the Nasdaq Global Select Market;
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•
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in privately negotiated transactions;
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•
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in options transactions; or
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•
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in a combination of such transactions.
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In addition, any shares that qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this prospectus.
To the extent required, this prospectus may be amended or supplemented from time to time to
describe a specific plan of distribution. In connection with distributions of the shares or
otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the course of hedging the
positions they assume with selling stockholders. The selling stockholders may also sell the common
stock short and redeliver the shares to close out such short positions. The selling stockholders
may also enter into option or other transactions with broker-dealers or other financial
institutions that require the delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The selling stockholders may also pledge shares to a broker-dealer or other financial institution,
and, upon a default, such broker-dealer or other financial institution may effect sales of the
pledged shares pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
In effecting sales, broker-dealers or agents engaged by the selling stockholders may arrange for
other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts or
concessions from the selling stockholders in amounts to be negotiated immediately prior to the
sale.
8
In offering the shares covered by this prospectus, the selling stockholders and any broker-dealers
who execute sales for the selling stockholders may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. Any profits realized by the selling
stockholders and the compensation of any broker-dealer may be deemed to be underwriting discounts
and commissions.
In order to comply with the securities laws of certain states, if applicable, the shares must be
sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in
certain states the shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification requirement is
available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the
Exchange Act may apply to sales of shares in the market and to the activities of the selling
stockholders and their affiliates. In addition, we will make copies of this prospectus available to
the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the
Securities Act. The selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities, including liabilities
arising under the Securities Act.
At the time a particular offer of shares is made, if required, a prospectus supplement will be
distributed that will set forth the number of shares being offered and the terms of the offering,
including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter,
any discount, commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling price to the
public.
Legal Matters
Barry A. Posner, the Company’s Executive Vice President and General Counsel, has passed upon
certain legal matters in connection with the registration of the common stock offered hereby,
including the validity of the common stock offered hereby. As of the date hereof, Mr. Posner owns
an aggregate of 124,177 shares of Common Stock and options to purchase 431,178 shares of Common
Stock and participates in the 2008 Equity Incentive Plan.
Experts
The consolidated financial statements of BioScrip Inc. appearing in BioScrip Inc.’s Annual Report
(Form 10-K) for the year ended December 31, 2007 (including the schedule appearing therein), and
the effectiveness of BioScrip Inc.’s internal control over financial reporting as of December 31,
2007 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set
forth in their reports thereon, included therein, and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and auditing.
Where You Can Find More Information
We are subject to the information requirements of the Exchange Act, and in accordance therewith
file reports, proxy statements and other information with the SEC. These reports, proxy statements
and other information can be inspected and copied at the SEC’s Public Reference room at 100 F
Street, N.E., Room 1580, Washington, D.C. 20549. The public may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains
an Internet site at www.sec.gov that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC. Endeavour maintains an
Internet site at www.endeavourcorp.com.
We have filed a registration statement with the SEC on Form S-8 under the Securities Act of 1933
(the “Securities Act”) with respect to the shares of common stock offered by the selling
stockholders hereby. This prospectus does not contain all of the information set forth in the
registration statement and the exhibits thereto. You may refer to the registration statement and
the exhibits thereto for more information about our common stock and us. You can obtain
9
a copy of the registration statement from the SEC at the address listed above or from the SEC’s
Internet site. Statements made in this prospectus regarding the contents of any contract or
document filed as an exhibit to the registration statement are not necessarily complete and, in
each instance, reference is herby made to the copy of such contract or document so filed. Each such
statement is qualified in its entirety by such reference.
Incorporation of Certain Documents By Reference
We are incorporating by reference in this prospectus information we file with the SEC (other than
information furnished pursuant to Item 2.02 or Item 7.01 (including any financial statements or
exhibits relating thereto furnished pursuant to item 9.01) of any Current Report on Form 8-K),
which means that we are disclosing important information to you by referring you to those
documents. The information we incorporate by reference is an important part of this prospectus, and
later information that we file with the SEC automatically will update and supersede this
information. We incorporate by reference the documents listed below and any future filings we make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, excluding any
information in those documents that is deemed by the rules of the SEC to be furnished not filed,
until we close this offering:
(a) Our Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC on
March 7, 2008.
(b) Our
Quarterly Report on Form 10-Q for the quarter ended March 31,
2008, filed with the SEC on May 6, 2008.
(c) Our Current Reports on Form 8-K filed with the SEC on January 25, 2008 and March 7, 2008;
and
(d) The description of our common stock contained in our registration statement on Form 8-A/A
dated December 4, 2002 and Form 8-A/A dated December 14, 2006.
You may request a copy of these filings, which we will provide to you at no cost, by writing
or telephoning us at the following address and telephone number:
BioScrip, Inc.
100 Clearbrook Road
Elmsford, NY 10523
(914) 460-1600
Attention: General Counsel
10
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
We are subject to the informational and reporting requirements of Sections 13(a), 14 and
15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), and in accordance therewith file
reports, proxy statements and other information with the Securities and Exchange Commission (the
“SEC”). The following documents that we heretofore filed with the SEC pursuant to the Exchange Act
are incorporated herein by reference:
(a) Our Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC on
March 7, 2008.
(b) Our
Quarterly Report on Form 10-Q for the quarter ended March 31,
2008, filed with the SEC on May 6, 2008.
(c) Our Current Reports on Form 8-K filed with the SEC on January 25, 2008 and March 7, 2008;
and
(d) The description of our common stock contained in our registration statement on Form 8-A/A
dated December 4, 2002 and Form 8-A/A dated December 14, 2006.
All documents that we subsequently file with the SEC pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, prior to the filing of a post-effective amendment that indicates that
all securities offered hereby have been sold or that deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this registration statement and to be
part hereof from the date of the filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the extent that a statement contained
herein or in any other subsequently filed document that also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any statement so modified
or superseded shall not be deemed, except as so modified or superseded, to constitute a part of
this registration statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Barry A. Posner, the Company’s Executive Vice President and General Counsel, has passed upon
certain legal matters in connection with the registration of the common stock offered hereby,
including the validity of the common stock offered hereby. As of the date hereof, Mr. Posner owns
an aggregate of 124,177 shares of Common Stock and options to purchase 431,178 shares of Common
Stock and participates in the 2008 Equity Incentive Plan.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (“DGCL”) provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding whether civil, criminal or investigative (other
than an action by or in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 145
further provides that a corporation similarly may indemnify any such person serving in any such
capacity who was or is a party or is threatened to be made a party to any threatened,
II-1
pending or completed action or suit by or in the right of the corporation to procure a judgment in
its favor, against expenses (including attorneys’ fees) actually and reasonably incurred in
connection with the defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and only to the extent
that the Delaware Court of Chancery or such other court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to indemnify for such
expenses which the Delaware Court of Chancery or such other court shall deem proper.
Section 102(b)(7) of the DGCL permits a corporation, in its certificate of incorporation, to
limit or eliminate, subject to some statutory limitations, the liability of directors to the
corporation or its stockholders for monetary damages for breaches of fiduciary duty, except for
liability (a) for any breach of the director’s duty of loyalty to the corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (c) under Section 174 of the DGCL (relating to unlawful payment of
dividends and unlawful stock purchase and redemption), or (d) for any transaction from which the
director derived an improper personal benefit. Our Second Amended and Restated Certificate of
Incorporation provides that our directors shall not be liable to the company or its stockholders
for breach of fiduciary duty as a director, except for liability arising out of clauses (a) through
(d) in the preceding paragraph. The Second Amended and Restated Certificate of Incorporation and
our Amended and Restated By-Laws further provide that we shall indemnify our directors and officers
to the fullest extent permitted by the DGCL.
In addition, we maintain director and officer liability insurance policies. under which the
directors and officers of the Company are insured, within the limits and subject to the limitations
of the policies, against certain expenses in connection with the defense of actions, suits or
proceedings, and certain liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been directors or officers,
which could include liabilities under the Securities Act or the Exchange Act.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this registration statement:
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Exhibit No.
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Exhibit
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4.1
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Second Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on
March 17, 2005, SEC Accession No. 0000950123-05-003294).
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4.2
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Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the
Company’s Current Report on Form 8-K filed on May 16, 2007, SEC Accession
no. 0000950123-07-007569).
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4.3
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Amended and Restated Rights Agreement, dated as of December 3, 2002 between
the Company and American Stock Transfer and Trust Company (incorporated by
reference to Exhibit 4.2 to the Post-Effective Amendment No. 3 to the
Company’s form 8-A/A dated December 4, 2002).
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4.6
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First Amendment, dated December 13, 2006, to the Amended and Restated Rights
Agreement, dated as of December 3, 2002 (the “Rights Agreement”), between the
Company and American Stock Transfer & Trust Company, as Rights Agent
(incorporated by reference to Exhibit 4.3 to the Company’s Current Report on
Form 8-K filed on December 14, 2006, SEC Accession No. 0000950123-06-0155184).
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5.1
|
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Opinion of Barry A. Posner
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II-2
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Exhibit No.
|
|
Exhibit
|
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|
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23.1
|
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Consent of Ernst & Young LLP
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23.2
|
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Consent of Barry A. Posner (included in Exhibit 5.1)
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24.1
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Power of Attorney (included on the signature page)
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99.1
|
|
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BioScrip, Inc. 2008 Equity Incentive Plan
|
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99.2
|
|
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Form of Stock Option Agreement under the 2008 Equity Incentive Plan
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99.3
|
|
|
Form of Restricted Stock Grant Certificate under the 2008 Equity Incentive Plan
|
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the
“Securities Act”);
(ii) to reflect in the prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum aggregate offering price set
forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) to include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such information in
the registration statement;
provided
,
however
, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the registration statement is on Form S-8 and the information required to
be included in a post-effective amendment by those paragraphs is contained in reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) that, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
(3) to remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(b) The registrant hereby undertakes that, for the purpose of determining any liability under the
Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s
annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in
the registration statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to
directors, officers and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the
II-3
Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Elmsford, New York, on the 16
th
day of May, 2008.
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BIOSCRIP, INC.
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By:
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/s/ Barry A. Posner
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Barry A. Posner,
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Executive Vice President and General Counsel
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KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints Richard H. Friedman and Barry A. Posner, and each of them acting individually, as his
true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any and all amendments
to this Registration Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and
every act and thing required or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and confirming all that
each of said attorneys-in-fact and agents, or any of them, or their or his substitute, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has
been signed below by the following persons in the capacities indicated on the 16
th
day
of May 2008.
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/s/ Richard H. Friedman
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Chairman of the Board and
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Chief
Executive Officer (Principal
Executive Officer)
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/s/ Stanley G. Rosenbaum
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(Principal Financial Officer and
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Principal
Accounting Officer)
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/s/ Patricia A. Bogusz
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Controller
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/s/ Charlotte W. Collins
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Director
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/s/ Louis T. DiFazio
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Director
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/s/ Myron Z. Holubiak
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Director
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II-5
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/s/ David R. Hubers
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Director
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/s/ Richard L. Robbins
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Director
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/s/ Stuart A. Samuels
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Director
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/s/ Steven K. Schelhammer
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Director
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Steven K. Schelhammer
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II-6
EXHIBIT INDEX
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Exhibit No.
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Exhibit
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4.1
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Second Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on
March 17, 2005, SEC Accession No. 0000950123-05-003294).
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4.2
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Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the
Company’s Current Report on Form 8-K filed on May 16, 2007, SEC Accession
no. 0000950123-07-007569).
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4.3
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Amended and Restated Rights Agreement, dated as of December 3, 2002 between
the Company and American Stock Transfer and Trust Company (incorporated by
reference to Exhibit 4.2 to the Post-Effective Amendment No. 3 to the
Company’s form 8-A/A dated December 4, 2002).
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4.6
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First Amendment, dated December 13, 2006, to the Amended and Restated Rights
Agreement, dated as of December 3, 2002 (the “Rights Agreement”), between the
Company and American Stock Transfer & Trust Company, as Rights Agent
(incorporated by reference to Exhibit 4.3 to the Company’s Current Report on
Form 8-K filed on December 14, 2006, SEC Accession No. 0000950123-06-0155184).
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5.1
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Opinion of Barry A. Posner
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23.1
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Consent of Ernst & Young LLP
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23.2
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Consent of Barry A. Posner (included in Exhibit 5.1)
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24.1
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Power of Attorney (included on the signature page)
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99.1
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BioScrip, Inc. 2008 Equity Incentive Plan
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99.2
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Form of Stock Option Agreement under the 2008 Equity Incentive Plan
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99.3
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Form of Restricted Stock Grant Certificate under the 2008 Equity Incentive Plan
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Exhibit 99.1
BIOSCRIP, INC.
2008 EQUITY INCENTIVE PLAN
AS ADOPTED
EFFECTIVE APRIL 29, 2008
TABLE OF CONTENTS
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Page
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§ 1. BACKGROUND AND PURPOSE
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1
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§ 2. DEFINITIONS
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1
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2.1 Affiliate
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1
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2.2 Award
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1
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2.3 Award Agreement
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1
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2.4 Board
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1
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2.5 Change in Control
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1
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2.6 Code
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4
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2.7 Committee
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4
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2.8 Director
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4
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2.9 Ending Value
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4
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2.10 Fair Market Value
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4
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2.11 ISO
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4
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2.12 Key Employee
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4
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2.13 1933 Act
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4
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2.14 1934 Act
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4
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2.15 Non-ISO
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4
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2.16 Option
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4
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2.17 Option Certificate
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5
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2.18 Option Price
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5
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2.19 Parent
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5
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2.20 Performance Goal
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5
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2.21 Performance Period
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5
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2.22 Performance Unit
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5
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2.23 Plan
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5
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2.24 Prior Plan
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5
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2.25 Restricted Stock Unit
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5
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2.26 Restricted Stock Unit Certificate
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5
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2.27 Rule 16b-3
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5
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2.28 SAR Value
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5
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2.29 Stock
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5
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2.30 Stock Appreciation Right
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5
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2.31 Stock Appreciation Right Certificate
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5
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2.32 Stock Grant
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5
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2.33 Stock Grant Certificate
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6
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2.34 Subsidiary
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6
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2.35 Substitute Awards
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6
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2.36 Ten Percent Shareholder
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6
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§ 3. SHARES RESERVED UNDER PLAN
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6
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3.1 Number of Shares
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6
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3.2 Charter of Shares
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8
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§ 4. EFFECTIVE DATE
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8
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Page
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§ 5. COMMITTEE
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8
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5.1 Committee Powers
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8
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5.2 Committee Decisions and Meetings
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9
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5.3 Delegation
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9
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§ 6. ELIGIBILITY AND ANNUAL GRANT CAPS
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9
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§ 7. OPTIONS
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10
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7.1 Committee Action
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10
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7.2 $100,000 Limit
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10
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7.3 Option Price
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10
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7.4 Payment
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11
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7.5 Exercise Period
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11
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7.6 Reload Option Grants Prohibited
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12
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§ 8. STOCK APPRECIATION RIGHTS
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12
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8.1 Committee Action
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12
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8.2 Terms and Conditions
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12
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8.3 Exercise
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14
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§ 9. RESTRICTED STOCK UNITS
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14
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9.1 Committee Action
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14
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9.2 No Adjustment for Cash Dividends
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15
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9.3 Payment for Restricted Stock Units
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15
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9.4 Deferrals
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15
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9.5 Performance-Based Vesting
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16
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§ 10. STOCK GRANTS
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16
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10.1 Committee Action
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16
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10.2 Conditions
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16
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10.3 Dividends and Voting Rights
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18
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10.4 Satisfaction of Forfeiture Conditions
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18
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10.5 Performance-Based Vesting
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18
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§ 11. PERFORMANCE UNITS
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18
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11.1 Committee Action
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18
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11.2 Conditions
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19
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11.3 Performance Goals
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19
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11.4 Performance Period
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20
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11.5 Payment for Performance Units
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20
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§ 12. NON-TRANSFERABILITY
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20
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§ 13. SECURITIES REGISTRATION
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21
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§ 14. LIFE OF PLAN
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22
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§ 15. ADJUSTMENT
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22
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-ii-
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Page
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15.1 Capital Structure
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22
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15.2 Mergers
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23
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15.3 Fractional Shares
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23
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§ 16. CHANGE IN CONTROL
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24
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16.1 Assumption or Substitution of Certain Awards
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24
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16.2 Non-Assumption or Substitution of Certain Awards
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|
|
25
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16.3 Impact on Certain Awards
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|
|
25
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|
16.4 Termination of Certain Awards
|
|
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25
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|
§ 17. AMENDMENT OR TERMINATION
|
|
|
26
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|
§ 18. MISCELLANEOUS
|
|
|
26
|
|
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18.1 Shareholder Rights
|
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|
26
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18.2 No Contract of Employment or Service
|
|
|
26
|
|
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18.3 Withholding
|
|
|
27
|
|
|
18.4 Construction
|
|
|
27
|
|
|
18.5 Other Conditions
|
|
|
27
|
|
|
18.6 Rule 16b-3
|
|
|
27
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|
-iii-
§ 1.
BACKGROUND AND PURPOSE
The purpose of this Plan is to promote the interest of BioScrip, Inc. (the “Company”), a
Delaware corporation, by authorizing the Committee to grant Awards to Key Employees and Directors
in order (1) to attract and retain Key Employees and Directors, (2) to provide an additional
incentive to each Key Employee and Director to work to increase the value of Stock and (3) to
provide each Key Employee and Director with a stake in the future of the Company which corresponds
to the stake of each of the Company’s stockholders.
§ 2.
DEFINITIONS
2.1
Affiliate
. — means any organization (other than a Subsidiary) that would be
treated as under common control with the Company under § 414(c) of the Code if “50 percent” were
substituted for “80 percent” in the income tax regulations under § 414(c) of the Code.
2.2
Award
. — means any Option, Stock Appreciation Right, Restricted Stock Unit, Stock
Grant or Performance Unit made pursuant to the provisions of the Plan.
2.3
Award Agreement
. — means any Option Certificate, Restricted Stock Unit
Certificate, Stock Appreciation Right Certificate, or Stock Grant Certificate.
2.4
Board
. — means the Board of Directors of the Company.
2.5
Change in Control
. — means unless otherwise provided in an Award Agreement, the
occurrence of any one of the following events:
(a) During any twenty-four (24) month period, individuals who, as of the beginning of such
period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director subsequent to the
beginning of
such period whose election or nomination for election was approved by a vote of at least a
majority of the Incumbent Directors then on the Board (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as a nominee for director,
without written
objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or as a result of
any other actual or threatened solicitation of proxies by or on behalf of any person other than
the Board shall be deemed to be an Incumbent Director;
(b) Any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”)) is or becomes a “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the Company’s then outstanding
securities eligible to vote for the election of the Board (the “Company Voting Securities”);
provided, however, that the event described in this paragraph (b) shall not be deemed to be a
Change in Control by virtue of any of the following acquisitions: (i) by the Company or any
Affiliate or Subsidiary, (ii) by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Affiliate or Subsidiary, (iii) by any underwriter temporarily
holding securities pursuant to an offering of such securities, (iv) pursuant to a
Non-Qualifying Transaction, as defined in paragraph (c), or (v) by any person of or group of
Voting Securities from the Company, if a majority of the Incumbent Board approves in advance
the acquisition of beneficial ownership of 30% or more of Company Voting Securities by such
person or group;
(c) The consummation of a merger, consolidation, statutory share exchange or similar form
of corporate transaction involving the Company or any of its subsidiaries that requires the
approval of the Company’s stockholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately following such
Business Combination: (i) more than 50% of the total voting power of (A) the corporation
resulting from such Business
Combination (the “Surviving Corporation”), or (B) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”),
is represented by Company
-2-
Voting Securities that were outstanding immediately prior to such
Business Combination (or, if applicable, is represented by shares into which such Company
Voting Securities were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as the voting power of such
Company Voting Securities among the holders thereof immediately prior to the Business
Combination, (ii) no person (other than any employee benefit plan (or related trust) sponsored
or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the
beneficial owner, directly or indirectly, of 30% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) and (iii) at least a majority of the
members of the board of directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) following the consummation of the Business Combination
were Incumbent Directors at the time of the Board’s approval of the execution of the initial
agreement providing for such Business Combination (any Business Combination which satisfies all
of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying
Transaction”);
(d) The stockholders of the Company approve a plan of complete liquidation or dissolution
of the Company or the consummation of a sale of all or substantially all of the Company’s
assets; or
(e) The occurrence of any other event that the Board determines by a duly approved
resolution constitutes a Change in Control.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because
any person acquires beneficial ownership of more than 30% of the Company Voting Securities as a
result of the acquisition of Company Voting Securities by the Company which reduces the number of
Company Voting Securities outstanding; provided, that if after such acquisition by the Company such
person
becomes the beneficial owner of additional Company Voting Securities that increases the
percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in
Control of the Company shall then occur.
-3-
2.6
Code
. – means the Internal Revenue Code of 1986, as amended.
2.7
Committee
. — means the Management Development & Compensation Committee, or such
other committee appointed by the Board, which shall have at least 2 members, each of whom shall
come within the definition of a “non-employee director” under Rule 16b-3 and an “outside director”
under § 162(m) of the Code.
2.8
Director
. – means a non-employee member of the Board.
2.9
Ending Value
. — means, a value for each Performance Unit or a formula for
determining the value of each Performance Unit at the time of payment.
2.10
Fair Market Value
. — means (1) the closing price on any date for a share of Stock
on the principal securities exchange on which the Stock is traded or listed or, if no such closing
price is available on such date, (2) such closing price as so reported in accordance with clause
(1) for the immediately preceding business day, or, if the Stock is not traded or listed on any
securities exchange, (3) the price which the Committee acting in good faith determines through any
reasonable valuation method that a share of Stock might change hands between a willing buyer and a
willing seller, neither being under any compulsion to buy or to sell and both having reasonable
knowledge of the relevant facts.
2.11
ISO
. — means an Option which is intended to satisfy the requirements of § 422 of
the Code.
2.12
Key Employee
. — means an employee of the Company or any Subsidiary or Parent or
Affiliate designated by the Committee who, in the judgment of
the Committee acting in its absolute discretion, is key directly or indirectly to the success
of the Company.
2.13
1933 Act
. — means the Securities Act of 1933, as amended.
2.14
1934 Act
. — means the Securities Exchange Act of 1934, as amended.
2.15
Non-ISO
. — means an Option which is not intended to satisfy the requirements of
§ 422 of the Code.
2.16
Option
. — means an option to purchase Stock which is granted under § 7.
-4-
2.17
Option Certificate
. — means the written certificate which sets forth the terms
and conditions of an Option granted under this Plan.
2.18
Option Price
. — means the price which shall be paid to purchase one share of
Stock upon the exercise of an Option granted under this Plan.
2.19
Parent
. — means any corporation which is a parent corporation (within the meaning
of § 424(e) of the Code) of the Company.
2.20
Performance Goal
. — means a performance goal described in § 11.3.
2.21
Performance Period
. — means a performance period as described in § 11.4.
2.22
Performance Unit
. — means an Award granted under § 11.
2.23
Plan
. — means this BioScrip, Inc. 2008 Equity Incentive Plan as adopted by the
Board and as amended from time to time thereafter.
2.24
Prior Plan
.— means the Company’s 2001 Incentive Stock Plan.
2.25
Restricted Stock Unit
. — means an Award granted under Section 9.
2.26
Restricted Stock Unit Certificate
. — means the written certificate which sets
forth the terms and conditions of a Restricted Stock Unit.
2.27
Rule 16b-3
. — means the exemption under Rule 16b-3 to Section 16(b) of the 1934
Act or any successor to such rule.
2.28
SAR Value
. — means the value assigned by the Committee to a share of Stock in
connection with the grant of a Stock Appreciation Right under § 8.
2.29
Stock
. — means the common stock, $.0001 par value per share, of the Company.
2.30
Stock Appreciation Right
. — means a right to receive the appreciation in a share
of Stock which is granted under § 8.
2.31
Stock Appreciation Right Certificate
. — means the written certificate which sets
forth the terms and conditions of a Stock Appreciation Right which is not granted to a Key Employee
as part of an Option.
2.32
Stock Grant
. — means Stock granted under § 10.
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2.33
Stock Grant Certificate
. — means the written certificate which sets forth the
terms and conditions of a Stock Grant.
2.34
Subsidiary
. — means a corporation which is a subsidiary corporation (within the
meaning of § 424(f) of the Code) of the Company.
2.35
Substitute Awards
. — Awards granted or shares of Stock issued by the Company in
assumption of, or in substitution or exchange for, awards previously granted, or the right or
obligation to make future awards, in each case by a company acquired by the Company or any
Affiliate or Subsidiary or with which the Company or any Affiliate or Subsidiary combines.
2.36
Ten Percent Shareholder
. — means a person who owns (after taking into account the
attribution rules of § 424(d) of the Code) more than ten percent of the total combined voting power
of all classes of stock of either the Company, a Subsidiary or Parent.
§ 3.
SHARES RESERVED UNDER PLAN
3.1
Number of Shares
. (a) Subject to adjustment as provided in Section 15, a total of
3,650,000 shares of Stock shall be authorized for issuance under the Plan, all of which may subject
to ISOs, less one (1) share of Stock for every one (1) share of Stock that was subject to an option
or stock appreciation right granted after December 31, 2007 under the Prior Plan and one and
one-half (1.5) shares of Stock for every one (1) share of Stock that was subject to an award other
than an option or stock appreciation right granted after December 31, 2007 under the Prior Plan.
In no event may more than 500,000 shares of Stock in the aggregate be subject to Awards granted to
Directors. Any shares of Stock that are subject to Awards of Options or Stock Appreciation Rights
shall be counted against this limit as one (1.0) share of Stock for every one (1) share of Stock
issued. Any shares of Stock that are subject to Awards other than Options or Stock Appreciation
Rights shall be counted against this limit as one and one-half (1.5) shares of Stock for every one
(1) share of Stock issued.
(b) If any shares of Stock subject to an Award, or after December 31, 2007 an award under the
Prior Plan, are forfeited or expire, or any Award, or after December 31, 2007 an award under
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the
Prior Plan, is settled for cash (in whole or in part), the shares of Stock subject to such Award or
such award under the Prior Plan shall, to the extent of such forfeiture, expiration or cash
settlement, again be available for Awards under the Plan, in accordance with Section 3.1(d) below.
Notwithstanding anything to the contrary contained herein, the following shares of Stock shall not
be added to the shares of Stock authorized for issuance under paragraph (a) of this Section: (i)
shares of Stock tendered by the Key Employee or Director or withheld by the Company in payment of
the purchase price of an Option, (ii)
shares of Stock tendered by the Key Employee or withheld by the Company to satisfy any tax
withholding obligation with respect to an Award, and (iii) shares of Stock subject to a Stock
Appreciation Right that are not issued in connection with the stock settlement of the Stock
Appreciation Right on exercise thereof.
(c) Substitute Awards shall not reduce the shares of Stock authorized for issuance under the
Plan or authorized for grant to a Participant under Section 6. Additionally, in the event that a
company acquired by the Company or any Affiliate or Subsidiary or with which the Company or any
Affiliate or Subsidiary combines has shares available under a pre-existing plan approved by
stockholders and not adopted in contemplation of such acquisition or combination, the shares
available for issuance pursuant to the terms of such pre-existing plan (as adjusted, to the extent
appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in
such acquisition or combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for Awards under the
Plan and shall not reduce the shares of Stock authorized for issuance under the Plan; provided that
Awards using such available shares shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or combination, and
shall only be made to individuals who were not employees or directors of the Company, an Affiliate
or a Subsidiary prior to such acquisition or combination.
(d) Any shares of Stock that again become available for issuance pursuant to this Article
shall be added back as one (1) share of Stock if such shares of Stock were subject to Options or
Stock Appreciation Rights granted under
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the Plan or options or stock appreciation rights granted
under the Prior Plan, and as one and one-half (1.5) shares of Stock if such shares of Stock were
subject to Awards other than Options or Stock Appreciation Rights granted under the Plan or awards
other than options or stock appreciation rights granted under the Prior Plan.
3.2.
Character of Shares
. Any Shares issued hereunder may consist, in whole or in
part, of authorized and unissued shares, treasury shares or shares purchased in the open market or
otherwise.
§ 4.
EFFECTIVE DATE
The effective date of this Plan shall be the date of its approval by the shareholders of the
Company at a duly called meeting.
§ 5.
COMMITTEE
§5.1
Committee Powers
. This Plan shall be administered by the Committee. The
Committee shall have full power and authority, subject to the provisions of the Plan and subject to
such orders or resolutions not inconsistent with the provisions of the Plan as may from time to
time be adopted by the Board, to: (i) select the Key Employees and Directors to whom Awards may
from time to time be granted hereunder; (ii) determine the type or types of Awards, not
inconsistent with the provisions of the Plan, to be granted to each Participant hereunder; (iii)
determine the number of shares of Stock to be covered by each Award granted hereunder; (iv)
determine the terms and conditions, not inconsistent with the provisions of the Plan, of any Award
granted hereunder; (v) determine whether, to what extent and under what circumstances Awards may be
settled in cash, shares of Stock or other property; (vi) determine whether, to what extent, and
under what circumstances cash, shares of Stock, other property and other amounts payable with
respect to an Award made under the Plan shall be deferred either automatically or at the election
of the Key Employee or Director; (vii) determine whether, to what extent and under what
circumstances any Award shall be canceled or suspended; (viii) interpret and administer the Plan
and any instrument or agreement entered into under or in connection with the Plan, including any
Award Agreement; (ix) correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any
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Award in the manner and to the extent that the Committee shall deem desirable to carry
it into effect; (x) establish such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; (xi) determine whether any Award, other than
an Option or Stock Appreciation Right, will have dividend equivalents;
and (xii) make any other determination and take any other action that the Committee deems
necessary or desirable for administration of the Plan.
§5.2
Committee Decisions and Meetings
. Decisions of the Committee shall be final,
conclusive and binding on all persons or entities, including the Company, any Affiliate or
Subsidiary, and any Participant employed by any of the foregoing. A majority of the members of the
Committee may determine its actions, including fixing the time and place of its meetings.
Notwithstanding the foregoing, any action or determination by the Committee specifically affecting
or relating to an Award to a Director shall require the prior approval of the Board.
§5.3.
Delegation
. To the extent not inconsistent with applicable law, including
Section 162(m) of the Code, or the rules and regulations of the principal securities exchange on
which the Stock is traded or listed), the Committee may delegate, by means of an express
resolution that sets forth the requirements and limitations relating to the delegation and the
procedures to be followed to grant any Awards, to (i) a committee of one or more directors of the
Company any of the authority of the Committee under the Plan, including the right to grant, cancel
or suspend Awards and (ii) to the extent permitted by law, to one or more executive officers or a
committee of executive officers the right to grant Awards to Key Employees who are not Directors or
executive officers of the Company and the authority to take action on behalf of the Committee
pursuant to the Plan to cancel or suspend Awards to Key Employees who are not Directors or
executive officers of the Company.
§ 6.
ELIGIBILITY AND ANNUAL GRANT CAPS
Only Key Employees who are employed by the Company or a Subsidiary or Parent shall be eligible
for the grant of ISOs under this Plan. No Key Employee in any calendar year shall be granted
(subject to adjustment under §15) (i) Options to purchase more than 500,000 shares of Stock, (ii)
more
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than 500,000 Stock Appreciation Rights based on the appreciation with respect to shares of
Stock, and
(iii) Stock Grants and Restricted Stock Units that are intended to comply with the requirements of
Section 162(m) of the Code representing more than 350,000 shares of Stock.
§ 7.
OPTIONS
7.1
Committee Action
. The Committee acting in its absolute discretion shall have the
right to grant Options to Key Employees and Directors under this Plan from time to time to purchase
shares of Stock. Each grant of an Option shall be evidenced by an Option Certificate, and each
Option Certificate shall set forth whether the Option is an ISO or a Non-ISO and shall set forth
such other terms and conditions of such grant as the Committee acting in its absolute discretion
deems consistent with the terms of this Plan; however, if the Committee grants an ISO and a Non-ISO
to a Key Employee on the same date, the right of the Key Employee to exercise the ISO shall not be
conditioned on his or her failure to exercise the Non-ISO.
7.2
$100,000 Limit
. No Option shall be treated as an ISO to the extent that the
aggregate Fair Market Value of the Stock subject to the Option which would first become exercisable
in any calendar year exceeds $100,000. Any such excess shall instead automatically be treated as a
Non-ISO. The Committee shall interpret and administer the ISO limitation set forth in this § 7.2
in accordance with § 422(d) of the Code, and the Committee shall treat this § 7.2 as in effect only
for those periods for which § 422(d) of the Code is in effect.
7.3
Option Price
. The Option Price for each share of Stock subject to an Option
(other than with respect to a Substitute Award) shall be no less than the Fair Market Value of a
share of Stock on the date the Option is granted; provided, however, if the Option is an ISO
granted to a Key Employee who is a Ten Percent Shareholder, the Option Price for each share of
Stock subject to such ISO shall be no less than 110% of the Fair Market Value of a share of Stock
on the date such ISO is granted. Except for adjustments under §15, without the approval of the
Company’s stockholders the Option Price shall not be reduced after the Option is granted, an Option
may not be cancelled in exchange for cash or another
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Award (other than in connection with a Change
in Control or a
Substitute Award), and no other action may be with respect to an Option that would be treated
as a repricing under the rules and regulations of the principal securities exchange on which the
Stock is traded.
7.4
Payment
. The Option Price shall be payable in full upon the exercise of any
Option, and at the discretion of the Committee an Option Certificate can provide for the payment of
the Option Price either in cash, by check or in Stock and which is acceptable to the Committee or
in any combination of cash, check and such Stock. The Option Price in addition may be paid (i)
through any cashless exercise procedure which is acceptable to the Committee or its delegate and
which is facilitated through a sale of Stock, (ii) with the consent of the Committee, by
withholding Stock otherwise issuable in connection with the exercise of the Option, and (iii)
through any other method specified in an Award agreement. Any payment made in Stock (including
withholding of Stock) shall be treated as equal to the Fair Market Value of such Stock on the
exercise date.
7.5
Exercise Period
. Each Option granted under this Plan shall be exercisable in
whole or in part at such time or times as set forth in the related Option Certificate, but in no
event may an Option granted to an employees of the Company or any Subsidiary be exercisable before
the expiration of one year from the date the Option is granted (but may become exercisable pro rata
over such time), except for Substitute Awards, under circumstances contemplated by Article 16, as
may be set forth in an Award Agreement with respect to the retirement, death or disability of a
Participant or special circumstances determined by the Committee. No Option Certificate shall make
an Option exercisable on or after the earlier of
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(1)
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the date which is the fifth anniversary of the
date the Option is granted, if the Option is an ISO and the Key
Employee is a Ten Percent Shareholder on the date the Option is
granted, or
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(2)
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the date which is the tenth anniversary of the
date the Option is granted, if the Option is (a) a Non-ISO or (b) an
ISO which is granted to a Key Employee who is not a Ten Percent
Shareholder on the date the Option is granted.
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An Option Certificate may provide for the exercise of an Option after the employment of a Key
Employee or service of a Director has terminated for any reason whatsoever, including death or
disability.
7.6
Reload Option Grants Prohibited
. The Committee may not, as part of the grant of
an Option, provide in the related Option Certificate for “reload” Option grants (i.e., the
automatic grant of an additional Option to pay all or a part of the Option Price or using Stock to
satisfy all or a part of any related tax withholding requirement.
§ 8.
STOCK APPRECIATION RIGHTS
8.1
Committee Action
. The Committee acting in its absolute discretion shall have the
right to grant Stock Appreciation Rights to Key Employees and Directors under this Plan from time
to time, and each Stock Appreciation Right grant shall be evidenced by a Stock Appreciation Right
Certificate or, if such Stock Appreciation Right is granted as part of an Option, shall be
evidenced by the Option Certificate for the related Option.
8.2
Terms and Conditions
.
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(a)
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Stock Appreciation Right Certificate
.
If a Stock Appreciation Right is evidenced by a Stock Appreciation
Right Certificate, such certificate shall set forth the number of
shares of Stock on which the Key Employee’s or Director’s right to
appreciation shall be based and the SAR Value of each share of Stock.
Such SAR Value shall be no less than the Fair Market Value of a share
of Stock on the date that the Stock Appreciation Right is granted.
Except for adjustments under §15, without the approval of the Company’s
stockholders the SAR Value shall not be reduced after the Stock
Appreciation Right is granted, a Stock
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Appreciation Right may not be
cancelled in exchange for cash or another Award (other than in
connection with a Change in Control or a Substitute
Award), and no other action may be taken with respect to a Stock
Appreciation Right that would be treated as a repricing under the
rules and regulations of the principal securities exchange on which
the Stock is traded. The Stock Appreciation Right Certificate shall
set forth such other terms and conditions for the exercise of the
Stock Appreciation Right as the Committee deems appropriate under the
circumstances, but in no event may a Stock Appreciation Right granted
to an employee of the Company or any Subsidiary be exercisable before
the expiration of one year from the date the Stock Appreciation Right
is granted (but may become exercisable pro rata over such time),
except for Substitute Awards, under circumstances contemplated by
Article 16 or as may be set forth in an Award Agreement with respect
to the retirement, death or disability of the Key Employee or
Director or (ii) special circumstances determined by the Committee
(such as the achievement of performance objectives). No Stock
Appreciation Right Certificate shall make a Stock Appreciation Right
exercisable on or after the date which is the tenth anniversary of
the date such Stock Appreciation Right is granted.
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(b)
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Option Certificate
. If a Stock
Appreciation Right is evidenced by an Option Certificate, the number of
shares of Stock on which the Key Employee’s or Director’s right to
appreciation shall be based shall be the same as the number of shares
of Stock subject to the related Option and the SAR Value for each such
share of Stock shall be no less than the Option Price under the related
Option. Each such Option Certificate shall provide that the exercise
of the Stock Appreciation Right with
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respect to any share of Stock
shall cancel the Key Employee’s or Director’s right to exercise his or
her Option with respect to such share
and, conversely, that the exercise of the Option with respect to any
share of Stock shall cancel the Key Employee’s or Director’s right to
exercise his or her Stock Appreciation Right with respect to such
share. A Stock Appreciation Right which is granted as part of an
Option shall be exercisable only while the related Option is
exercisable. The Option Certificate shall set forth such other terms
and conditions for the exercise of the Stock Appreciation Right as
the Committee deems appropriate under the circumstances.
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8.3
Exercise
. A Stock Appreciation Right shall be exercisable only when the Fair
Market Value of a share of Stock on which the right to appreciation is based exceeds the SAR Value
for such share, and the payment due on exercise shall be based on such excess with respect to the
number of shares of Stock to which the exercise relates. A Key Employee or Director upon the
exercise of his or her Stock Appreciation Right shall receive a payment from the Company in cash or
in Stock issued under this Plan, or in a combination of cash and Stock, and the number of shares of
Stock issued shall be based on the Fair Market Value of a share of Stock on the date the Stock
Appreciation Right is exercised. The Committee acting in its absolute discretion shall have the
right to determine the form and time of any payment under this § 8.3.
§ 9.
RESTRICTED STOCK UNITS
9.1
Committee Action
. The Committee acting in its absolute discretion shall have the
right from time to time to grant to Key Employees and Directors under this Plan Restricted Stock
Units, the value of each of which corresponds to the Fair Market Value of a share of Stock. Each
Restricted Stock Unit grant shall be evidenced by a Restricted Stock Unit Certificate that shall
set forth the number of Restricted Stock Units granted to the Key Employee or Director, the vesting
schedule applicable to such
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Restricted Stock Units and such other terms and conditions of such
grant as the Committee acting in its absolute discretion deems consistent with the
terms of this Plan. Restricted Stock Units subject solely to continued service with the
Company or a Subsidiary shall not become vested over a period of less than (i) three (3) years from
the date of grant (but permitting pro rata vesting over such period) for grants to Key Employees
and (ii) one (1) year from the date of grant (but permitting pro rata vesting over such period) for
grants to Directors; provided that such restrictions shall not be applicable to grants not in
excess of 10% of the initial number of shares available for grants of Restricted Stock Units under
Section 3.1(a). Restricted Stock Unit subject to the achievement of performance objectives shall
not become vested over a period of less than one (1) year.
9.2
No Adjustment for Cash Dividends
. Except for dividend equivalent adjustments made
by the Committee for stock dividends in accordance with § 15.1, there shall be no adjustment to
Restricted Stock Units for dividends paid by the Company.
9.3
Payment for Restricted Stock Units
. Unless a Key Employee or Director has made a
deferral election in accordance with § 9.4, a Key Employee or Director shall receive upon the
vesting of a Restricted Stock Unit payment from the Company in Stock issued under this Plan, and
the number of shares of Stock issued to the Key Employee or Director shall be equal to the number
of Restricted Stock Units that have at such time become vested. At the time a Key Employee or
Director receives shares of stock equal in number to such Key Employee’s or Director’s vested
Restricted Stock Units, such vested Restricted Stock Units shall automatically be cancelled and
shall give the Key Employee or Director no further rights to payment of any kind.
9.4
Deferrals
. The Committee, in its absolute discretion, may permit a Key Employee
or Director to elect to defer such Key Employee’s or Director’s receipt of the delivery of shares
of Stock that would otherwise be due to such Key Employee or Director by virtue of the vesting of a
Restricted Stock Unit; provided such deferral election is made in accordance with the requirements
of Section 409A of the Code. If any such deferral election is permitted by the Committee, the
Committee shall, in its absolute discretion, establish additional rules and procedures for such
payment
deferrals. However,
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notwithstanding the preceding provisions of this Section and
notwithstanding any other provision of this Plan to the contrary, the Committee shall not, (1) in
establishing the terms and provisions of any grant of Restricted Stock Units, or (2) in exercising
its powers under this § 9.4, create any arrangement which would constitute an employee pension
benefit plan as defined in § 3(2) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), unless the arrangement provides benefits solely to one or more individuals who
constitute members of a select group of management or highly compensated employees (within the
meaning of ERISA §§ 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6)).
9.5
Performance-Based Vesting
. Notwithstanding anything contained in Section 9.1
hereof, the Committee may, at the time of grant of Restricted Stock Units to Key Employees,
prescribe that vesting of all or any the Restricted Stock Units shall be subject to the achievement
of one or more performance objectives, including the Performance Goals set forth in §11.3.
§ 10.
STOCK GRANTS
10.1
Committee Action
. The Committee acting in its absolute discretion shall have the
right to make Stock Grants to Key Employees and Directors. Each Stock Grant shall be evidenced by
a Stock Grant Certificate, and each Stock Grant Certificate shall set forth the conditions, if any,
under which Stock will be issued under the Stock Grant and the conditions under which the Key
Employee’s or Director’s interest in any Stock which has been issued will become non-forfeitable.
10.2
Conditions
.
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(a)
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Conditions to Issuance of Stock
. The
Committee acting in its absolute discretion may make the issuance of
Stock under a Stock Grant subject to the satisfaction of one, or more
than one, condition which the Committee deems appropriate under the
circumstances for Key Employees or
Directors generally or for a Key Employee or Director in particular,
and the related Stock Grant Certificate shall set forth each such
condition and the deadline for satisfying each such condition. Stock
subject to a Stock
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Grant shall be issued in the name of a Key
Employee or Director only after each such condition, if any, has been
timely satisfied, and any Stock which is so issued shall be held by
the Company pending the satisfaction of the forfeiture conditions, if
any, under § 10.2(b) for the related Stock Grant.
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(b)
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Forfeiture Conditions
. The Committee
acting in its absolute discretion may make Stock issued in the name of
a Key Employee or Director subject to one, or more than one, objective
employment, performance or other forfeiture condition that the
Committee acting in its absolute discretion deems appropriate under the
circumstances for Key Employees or Directors generally or for a Key
Employee or Director in particular, and the related Stock Grant
Certificate shall set forth each such forfeiture condition, if any, and
the deadline, if any, for satisfying each such forfeiture condition. A
Stock Grant Certificate may not provide for vesting of the Stock Grant
subject solely to continued service with the Company or a Subsidiary
over a period of less than three (3) years from the date of grant
(which may be pro rata over such period) for grants to Key Employees
and (ii) one (1) year from the date of grant (but permitting pro rata
vesting over such period) for grants to Directors; provided that such
restrictions shall not be applicable to Stock Grants not in excess of
10% of the initial number of shares available for Stock Grants under
Section 3. Stock Grants subject to the achievement of performance
conditions shall not become vested over a period of less
than one (1) year. A Key Employee’s or Director’s non-forfeitable
interest in the shares of Stock underlying a Stock Grant shall depend
on the extent to which he or she timely satisfies each such
condition.
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10.3
Dividends and Voting Rights
. If a cash dividend is paid on a share of Stock
after such Stock has been issued under a Stock Grant but before the first date that a Key
Employee’s or Director’s interest in such Stock (1) is forfeited completely or (2) becomes
completely non-forfeitable, the Company shall pay such cash dividend directly to such Key Employee
or Director except as otherwise be provided in the Award agreement. If a Stock dividend is paid on
such a share of Stock during such period, such Stock dividend shall be treated as part of the
related Stock Grant, and a Key Employee’s or Director’s interest in such Stock dividend shall be
forfeited or shall become non-forfeitable at the same time as the Stock with respect to which the
Stock dividend was paid is forfeited or becomes non-forfeitable. The disposition of each other
form of dividend which is declared on such a share of Stock during such period shall be made in
accordance with such rules as the Committee shall adopt with respect to each such dividend. A Key
Employee or Director also shall have the right to vote the Stock issued under his or her Stock
Grant during such period.
10.4
Satisfaction of Forfeiture Conditions
. A share of Stock shall cease to be
subject to a Stock Grant at such time as a Key Employee’s or Director’s interest in such Stock
becomes non-forfeitable under this Plan, and the certificate representing such share shall be
transferred to the Key Employee or Director as soon as practicable thereafter.
10.5
Performance-Based Vesting
. The Committee may, at the time a Stock Grant is made,
prescribe that vesting of all or any portion of the shares subject to the Stock Grant shall be
subject to the achievement of one or more performance conditions, including the Performance Goals
set forth in §11.3.
§ 11.
PERFORMANCE UNITS
11.1
Committee Action
. The Committee (acting in its sole discretion) may from time to
time grant Performance Units to Key Employees under the Plan representing the right to receive in
cash an amount determined by reference to certain performance measurements, subject to such
restrictions, conditions and other terms as the Committee may determine.
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11.2
Conditions
. The written agreement covering Performance Units shall specify
Performance Goals (as defined in § 11.3), a Performance Period (as defined in § 11.4)) and an
Ending Value. Performance Units granted to a Key Employee shall be credited to a bookkeeping
account established and maintained for such Key Employee.
11.3
Performance Goals
. With respect to each award of Performance Units, the
Committee (acting in its sole discretion) shall specify as Performance Goals the corporate,
division, segment, business unit, and/or individual performance goals which must be satisfied in
order for the Key Employee to be entitled to payment to such Performance Units. Performance Goals
for an Award of Performance Units that is intended to satisfy the requirements of Section 162(m) of
the Code shall be based on achieving specified levels of one or any combination of the following
with respect to the Company on a consolidated basis, by division, segment, and/or business unit:
net sales; revenue; revenue growth or product revenue growth; operating income (before or after
taxes); pre- or after-tax income (before or after allocation of corporate overhead and bonus);
earnings per share; net income (before or after taxes); return on equity; total stockholder return;
return on assets or net assets; appreciation in and/or maintenance of the price of the Shares or
any other publicly-traded securities of the Company; market share; gross profits; earnings
(including earnings before taxes, earnings before interest and taxes, earnings before interest,
taxes, depreciation and amortization or earnings before interest, taxes, depreciation, amortization
and option expense); economic value-added models or equivalent metrics; comparisons with various
stock market indices; reductions in costs; cash flow or cash flow per share (before or after
dividends); return on capital (including return on total capital or return on invested
capital); cash flow return on investment; improvement in or attainment of expense levels or
working capital levels; operating margins, gross margins or cash margin; year-end cash; debt
reductions; stockholder equity; specific and objectively determinable regulatory achievements; and
implementation, completion or attainment of specific and objectively determinable objectives with
respect to research, development, products or projects, production volume levels, acquisitions and
divestitures and recruiting and maintaining personnel . The Performance Goals also may be based
solely by reference to the Company’s performance or the
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performance of a Subsidiary, division,
business segment or business unit of the Company, or based upon the relative performance of other
companies or upon comparisons of any of the indicators of performance relative to other companies.
The Committee may express any goal in alternatives, such as including or excluding (a) any
acquisitions or dispositions, restructurings, discontinued operations, extraordinary items, and
other unusual or non-recurring charges, (b) any event either not directly related to the operations
of the Company or not within the reasonable control of the Company’s management, or (c) the
cumulative effects of tax or accounting changes in accordance with U.S. generally accepted
accounting principles.
11.4
Performance Period
. The Committee (acting in its sole discretion) shall
determine the Performance Period, which shall be the period of time during which the Performance
Goals must be satisfied in order for the Key Employee to be entitled to payment of Performance
Units granted to such Key Employee. Different Performance Periods may be established for different
Performance Units. Performance Periods may run consecutively or concurrently.
11.5
Payment for Performance Units
. As soon as practicable following the end of a
Performance Period, the Committee shall determine whether the Performance Goals for the Performance
Period have been achieved. As soon as reasonably practicable after such determination, or at such
later date or in such installments as the Committee shall determine at the time of grant, the
Company shall pay to the Key Employee an amount in cash equal to the Ending Value of each
Performance Unit as to which the Performance Goals have been satisfied;
provided, however, that in no event shall a Key Employee receive an amount in excess of
$1,000,000 in respect of Performance Units for any given year.
§ 12.
NON-TRANSFERABILITY
Except as provided below, no Award shall be transferable by a Key Employee or Director other
than by will or by the laws of descent and distribution. Any Option or Stock Appreciation Right
shall (absent the Committee’s consent) be exercisable during a Key Employee’s or Director’s
lifetime only by the Key Employee or Director. To the extent and under such terms and conditions
as determined by the
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Committee, a Key Employee or Director may assign or transfer an Award (each
transferee thereof, a “Permitted Assignee”) to (i) the Key Employee’s or Director’s spouse,
children or grandchildren (including any adopted and step children or grandchildren), parents,
grandparents or siblings, (ii) to a trust for the benefit of one or more of the Key Employee or
Director or the persons referred to in clause (i), (iii) to a partnership, limited liability
company or corporation in which the Key Employee or Director or the persons referred to in clause
(i) are the only partners, members or stockholders or (iv) for charitable donations; provided that
such Permitted Assignee shall be bound by and subject to all of the terms and conditions of the
Plan and the Award Agreement relating to the transferred Award and shall execute an agreement
satisfactory to the Company evidencing such obligations; and provided further that such Key
Employee or Director shall remain bound by the terms and conditions of the Plan. The person or
persons to whom an Award is transferred by will or by the laws of descent and distribution (or with
the Committee’s consent) thereafter shall be treated as the Key Employee or Director with respect
to such Award.
§ 13.
SECURITIES REGISTRATION
As a condition to the receipt of shares of Stock under this Plan, the Key Employee or Director
shall, if so requested by the Company, agree to hold such shares of Stock for investment and not
with a view toward resale or distribution to the public and, if so requested by Company, shall
deliver to
Company a written statement satisfactory to Company to that effect. Furthermore, if so requested
by the Company, the Key Employee or Director shall make a written representation to Company that he
or she will not sell or offer for sale any of such Stock unless a registration statement shall be
in effect with respect to such Stock under the 1933 Act and any applicable federal or state
securities law or he or she shall have furnished to Company an opinion in form and substance
satisfactory to Company or its legal counsel satisfactory to Company that such registration is not
required. Certificates representing the Stock transferred upon the exercise of an Option, Stock
Appreciation Right or Restricted Stock Unit or upon the lapse of the forfeiture conditions, if any,
on any Stock Grant may at the discretion of Company bear a
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legend to the effect that such Stock
has not been registered under the 1933 Act or any applicable state securities law and that such
Stock cannot be sold or offered for sale in the absence of an effective registration statement as
to such Stock under the 1933 Act and any applicable state securities law or an opinion in form and
substance satisfactory to the Company of legal counsel satisfactory to the Company that such
registration is not required.
§ 14.
LIFE OF PLAN
No Award shall be made under this Plan on or after the earlier of
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(1)
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the tenth anniversary of the effective date of
this Plan (as determined under § 4), in which event this Plan otherwise
thereafter shall continue in effect until all outstanding Options and
Stock Appreciation Rights have been exercised in full or no longer are
exercisable, all Stock issued under any Stock Grants under this Plan
have been forfeited or have become non-forfeitable, all Restricted
Stock Units have vested and all Performance Periods have ended, or
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(2)
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the date on which all of the Stock reserved
under § 3 has (as a result of the exercise of Options or Stock
Appreciation Rights granted under this Plan the satisfaction of the
forfeiture conditions, if any, on Stock Grants,
or the payment of shares upon the vesting of Restricted Stock Units)
been issued or no longer is available for use under this Plan, in
which event this Plan also shall terminate on such date.
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§ 15.
ADJUSTMENT
15.1
Capital Structure
. The number, kind or class (or any combination thereof) of
shares of Stock reserved under § 3, the annual grant caps described in § 6, the number, kind or
class (or any combination thereof) of shares of Stock subject to Options, Restricted Stock Units or
Stock Appreciation
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Rights granted under this Plan, the Option Price of such Options, the SAR Value
of such Stock Appreciation Rights as well as the number, kind or class (or any combination thereof)
of shares of Stock subject to Stock Grants granted under this Plan shall be adjusted by the
Committee in an equitable manner to reflect any change in the capitalization of the Company,
including, but not limited to, such changes as stock dividends or stock splits.
15.2
Mergers
. The Committee as part of any corporate transaction described in
§ 424(a) of the Code shall have the right to adjust (in any manner which the Committee in its
discretion deems consistent with § 424(a) of the Code) the number, kind or class (or any
combination thereof) of shares of Stock reserved under § 3 and the annual grant caps described in §
6. Furthermore, the Committee as part of any corporate transaction described in § 424(a) of the
Code shall have the right to adjust (in any manner which the Committee in its discretion deems
consistent with § 424(a) of the Code) the number, kind or class (or any combination thereof) of
shares of Stock subject to any outstanding Stock Grants under this Plan and any related grant
conditions and forfeiture conditions, and the number, kind or class (or any combination thereof) of
shares subject to Option, Restricted Stock Unit and Stock Appreciation Right grants previously made
under this Plan and the related Option Price and SAR Value for each such Option Stock Appreciation
Right and, further, shall have the right (in any manner which the Committee in its discretion deems
consistent with § 424(a) of the Code and without regard to the annual grant caps described in § 6
of this Plan) to make any Stock Grants and Option Stock
Appreciation Right and Restricted Stock Unit grants to effect the assumption of, or the
substitution for, stock grants and option, restricted stock unit and stock appreciation right
grants previously made by any other corporation to the extent that such corporate transaction calls
for such substitution or assumption of such stock grants and stock option, restricted stock unit
and stock appreciation right grants.
15.3
Fractional Shares
. If any adjustment under this § 15 would create a fractional
share of Stock or a right to acquire a fractional share of Stock, such fractional share shall be
disregarded and the number of shares of Stock reserved under this Plan and the number subject to
any Options, Restricted Stock Unit or Stock Appreciation Right grants and Stock Grants shall be the
next lower number of shares
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of Stock, rounding all fractions downward. An adjustment made under
this § 15 by the Committee shall be conclusive and binding on all affected persons.
§ 16.
CHANGE IN CONTROL
16.1
Assumption or Substitution of Certain Awards
. Unless otherwise provided in an
Award Agreement, in the event of a Change in Control in which the successor company assumes or
substitutes for an Option, Restricted Stock Unit, Stock Appreciation Right, or Stock Grant, if a
Key Employee’s employment with such successor company (or a subsidiary thereof) terminates under
the circumstances specified in the Award Agreement within 24 months following such Change in
Control (or such other period set forth in the Award Agreement, including prior thereto if
applicable): (i) Options and Stock Appreciation Rights outstanding as of the date of such
termination of employment will immediately vest, become fully exercisable, and may thereafter be
exercised for 24 months (or the period of time set forth in the Award Agreement), and (ii)
restrictions, limitations and other conditions applicable to Restricted Stock Units and Stock
Grants shall lapse and the Restricted Stock Units and Stock Grants shall become free of all
restrictions and limitations and become fully vested. For the purposes of this Section 11.2, an
Option, Restricted Stock Unit, Stock Appreciation Right, Award or Stock Grant shall be considered
assumed or
substituted for if following the Change in Control the Award confers the right to purchase or
receive, for each share of Stock subject to the Option, Restricted Stock Unit, Stock Appreciation
Right, or Stock Grant immediately prior to the Change in Control, the consideration (whether stock,
cash or other securities or property) received in the transaction constituting a Change in Control
by holders of shares of Stock for each share of Stock held on the effective date of such
transaction (and if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares); provided, however, that if such
consideration received in the transaction constituting a Change in Control is not solely common
stock of the successor company, the Committee may, with the consent of the successor company,
provide that the consideration to be received upon the exercise or vesting of an Option, Restricted
Stock Unit, Stock Appreciation Right or
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Stock Grant, for each share of Stock subject thereto, will
be solely common stock of the successor company substantially equal in fair market value to the per
share consideration received by holders of shares of Stock in the transaction constituting a Change
in Control. The determination of such substantial equality of value of consideration shall be made
by the Committee in its sole discretion and its determination shall be conclusive and binding.
16.2
Non-Assumption or Substitution of Certain Awards
. Unless otherwise provided in
an Award Agreement in the event of a Change in Control, to the extent the successor company does
not assume or substitute for an Option, Restricted Stock Unit, Stock Appreciation Right, or Stock
Grant: (i) those Options and Stock Appreciation Rights outstanding as of the date of the Change in
Control that are not assumed or substituted for shall immediately vest and become fully
exercisable, and (ii) restrictions and deferral limitations on Restricted Stock Units and Stock
Grants that are not assumed or substituted for shall lapse and the Restricted Stock Units and Stock
Grants shall become free of all restrictions and limitations and become fully vested.
16.3
Impact on Certain Awards
. Award Agreements may provide that in the event of a
Change in Control: (i) Options and Stock Appreciation Rights outstanding as of the date of the
Change in Control shall be cancelled and terminated
without payment therefor if the Fair Market Value of one share of Stock as of the date of the
Change in Control is less than the Option Price or SAR Value, and (ii) all Performance Units shall
be considered to be earned and payable (either in full or pro rata based on the portion of
Performance Period completed as of the date of the Change in Control), and any limitations or other
restriction shall lapse and such Performance Units shall be immediately settled or distributed.
16.4
Termination of Certain Awards
. The Committee, in its discretion, may determine
that, upon the occurrence of a Change in Control, each Option and Stock Appreciation Right
outstanding shall terminate within a specified number of days after notice to the Key Employee or
Director, and/or that each Key Employee or Director shall receive, with respect to each share of
Stock subject to such Option or Stock Appreciation Right, an amount equal to the excess of the Fair
Market Value of such share immediately prior to the occurrence of such Change in Control over the
Option Price of such Option and
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the SAR Value of such Stock Appreciation Right; such amount to be
payable in cash, in one or more kinds of stock or property (including the stock or property, if
any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion,
shall determine.
§ 17.
AMENDMENT OR TERMINATION
This Plan may be amended by the Board from time to time to the extent that the Board deems
necessary or appropriate; provided, however, (1) no amendment shall be made absent the approval of
the stockholders of the Company to the extent such approval is required under applicable law or
exchange rule and (2) no amendment shall be made to § 16 on or after any date described in § 16
which might adversely affect any rights which otherwise vest on such date. The Board also may
suspend granting Awards under this Plan at any time and may terminate this Plan at any time;
provided, however, the Board shall not have the right unilaterally to modify, amend or cancel any
Award made before such suspension or termination unless (x) the Key Employee or Director consents
in writing to such
modification, amendment or cancellation or (y) there is a dissolution or liquidation of the Company
or a transaction described in § 15 or § 16.
§ 18.
MISCELLANEOUS
18.1
Stockholder Rights
. No Key Employee or Director shall have any rights as a
stockholder of the Company as a result of the grant of an Option or a Restricted Stock Unit or
Stock Appreciation Right pending the actual delivery of the Stock subject to such Option,
Restricted Stock Unit or Stock Appreciation Right to such Key Employee or Director. Subject to
§ 10.3, a Key Employee’s or Director’s rights as a stockholder in the shares of Stock underlying a
Stock Grant which is effective shall be set forth in the related Stock Grant Certificate.
18.2
No Contract of Employment or Service
. The grant of an Award to a Key Employee or
Director under this Plan shall not constitute a contract of employment or service and shall not
confer on a Key Employee or Director any rights upon his or her termination of employment or
service in addition to
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those rights, if any, expressly set forth in the related Option Certificate,
Restricted Stock Unit Certificate, Stock Appreciation Right Certificate, Stock Grant Certificate,
or Performance Unit agreement.
18.3
Withholding
. Each Option, Stock Appreciation Right, Restricted Stock Unit,
Performance Unit and Stock Grant, shall be made subject to the condition that the Key Employee
consents to whatever action the Committee directs to satisfy the statutory federal and state tax
withholding requirements, if any, which the Company determines are applicable to the exercise of
such Option or Stock Appreciation Right, the payment of shares upon the vesting of such Restricted
Stock Unit, the satisfaction of any forfeiture conditions with respect to Stock subject to a Stock
Grant issued in the name of the Key Employee, or to the payment for the Performance Units. The
Committee also shall have the right to provide in an Award agreement that a Key Employee may elect
to satisfy such statutory federal and state tax withholding requirements through a reduction in the
cash or the number of shares of Stock actually transferred to him or to her under this Plan. No
withholding through a
reduction in shares of Stock shall be effected under this Plan which exceeds the minimum
statutory federal and state withholding requirements, unless it will not trigger a negative
accounting impact).
18.4
Construction
. All references to sections (§) are to sections (§) of this Plan
unless otherwise indicated. This Plan shall be construed under the laws of the State of Delaware.
Finally, each term set forth in § 2 shall have the meaning set forth opposite such term for
purposes of this Plan and, for purposes of such definitions, the singular shall include the plural
and the plural shall include the singular.
18.5
Other Conditions
. Each Award may require that a Key Employee or Director (as a
condition to the exercise of an Option or a Stock Appreciation Right, the payment of shares upon
the vesting of a Restricted Stock Unit or the issuance of Stock subject to a Stock Grant) enter
into any agreement or make such representations prepared by the Company, including (without
limitation) any agreement which restricts the transfer of Stock acquired pursuant to the exercise
of an Award or provides for the repurchase of such Stock by the Company.
18.6
Rule 16b-3
. The Committee shall have the right to amend any Award to withhold or
otherwise restrict the transfer of any Stock or cash under this Plan to a Key Employee or Director
as the
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Committee deems appropriate in order to satisfy any condition or requirement under Rule
16b-3 to the extent Rule 16 of the 1934 Act might be applicable to such grant or transfer.
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IN WITNESS WHEREOF, BioScrip, Inc. has caused its duly authorized officer to execute this Plan
to evidence its adoption of this Plan.
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BIOSCRIP, INC.
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By:
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Date:
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Exhibit 99.2
BIOSCRIP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
2008 EQUITY INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT made as of the ___day of ___, 2008 (the “Grant
Date”), between BioScrip, Inc., a Delaware corporation (the “Company”), and ___(the
“Awardee”).
WHEREAS the Company desires to afford the Awardee an opportunity to purchase shares of common
stock, $.0001 par value per share, of the Company (“Common Stock”) as hereinafter provided, in
accordance with the provisions of the Company’s 2008 Equity Incentive Plan (the “Plan”), a copy of
which has been provided to Awardee.
WHEREAS, the Company’s Management Development and Compensation Committee (the “Committee”) has
approved the grant of this Option to Awardee on ___, 2008.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration the legal sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound hereunder, agree as follows:
1.
Grant of Option
. The Company hereby grants to the Awardee the right and option
(the “Option”) to purchase all or any part of
___
shares of Common Stock (the “Shares”). The
Option is in all respects limited and conditioned as hereinafter provided, and is subject to the
terms and conditions of the Plan now in effect and as they may be amended from time to time, in
accordance with the Plan (which terms and conditions are and automatically shall be incorporated
herein by reference and made a part hereof and shall control in the event of any conflict with any
other terms of this Option Agreement). It is intended that the Option granted hereunder be a
non-qualified stock option (“NQSO”) and
not
an incentive stock option (“ISO”) as such term
is defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
2.
Exercise Price
. The exercise price per share of the Shares under the Option shall
be
$___
.
3.
Term
. Unless earlier terminated pursuant to any provision of the Plan or of this
Option Agreement, this Option shall expire on
_______ ___, ___(the “Expiration Date”). This
Option shall not be exercisable on or after the Expiration Date.
4.
Exercise of Option
. This Option may be exercised as to one-third of the Shares
(rounded to the nearest whole share) on each of the first three yearly anniversaries of the date
hereof so that the Option shall be exercisable as to all Shares on the third such anniversary of
the date hereof. Options that become exercisable in accordance with the foregoing shall remain
exercisable, subject to the provisions contained in the Plan and in this Option Agreement
(including without limitation Paragraph 8 below), until the expiration of the term of this Option
as set forth in Paragraph 3 or until other termination of the Option.
5.
Method of Exercising Option
. Subject to the terms and conditions of this Option
Agreement and the Plan, the Option may be exercised upon written notice to the Company or the
securities
broker then designated by the Company, the form of such notice shall be provided by the Company upon request. Such notice shall state the election to exercise the Option and the
number of shares with respect to which it is being exercised; shall be signed by the person or
persons so exercising the Option; shall, if the Company so requests, be accompanied by the
investment certificate referred to in Paragraph 6 hereof and shall be accompanied by payment of the
full Option price of such shares.
The Option price shall be paid to the Company:
(a) In cash, or in its equivalent;
(b) In Company Common Stock previously acquired by the Awardee, provided that if such shares
of Common Stock were acquired through exercise of an ISO or NQSO or of an option under a similar
plan, such shares have been held by the Awardee for a period of more than 12 months on the date of
exercise;
(c) In Company Common Stock newly acquired by the Optionee upon exercise of the Option; or
(d) In any combination of (a), (b) and (c) above.
In addition, the Option price may also be paid (i) through any cashless exercise procedure
which is acceptable to the Committee; or (ii) with the consent of the Committee, by withholding
Company Common Stock otherwise issuable in connection with the exercise of this Option.
In the event such Option price is paid, in whole or in part, in Company Common Stock, the
portion of the Option price so paid with Company Common Stock shall be equal to the “fair market
value” of such shares of Company Common Stock on the date of exercise of the Option, as such “fair
market value” is determined as set forth in Section 2.10 of the Plan.
Upon receipt of such notice and payment, the Company, as promptly as practicable, shall
deliver or cause to be delivered a certificate or certificates representing the shares with respect
to which the Option is so exercised. The certificate or certificates for the shares as to which
the Option shall have been so exercised shall be registered in the name of the person or persons so
exercising the Option (or, if the Option shall be exercised by the Awardee and if the Awardee shall
so request in the notice exercising the Option, shall be registered in the name of the Awardee and
the Awardee’s spouse, jointly, with right of survivorship) and shall be delivered as provided above
to or upon the written order of the person or persons exercising the Option. In the event the
Option shall be exercised by any person or persons after the legal disability or death of the
Awardee, such notice shall be accompanied by appropriate proof of the right of such person or
persons to exercise the Option. All shares that shall be purchased upon the exercise of the Option
as provided herein shall be fully paid and non-assessable by the Company.
6.
Shares to be Purchased for Investment
. Unless the Company has theretofore
notified the Awardee that a registration statement covering the shares to be acquired upon the
exercise of the Option has become effective under the Securities Act of 1933 and the Company has
not thereafter notified the Awardee that such registration is no longer effective, or unless
counsel to the Company shall be otherwise satisfied that the Awardee would be permitted under
applicable law to immediately resell shares acquired upon the exercise of the Option, it shall be a
condition to any exercise of this Option that the shares acquired upon such exercise be acquired
for investment and not with a view to
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distribution, and the person effecting such exercise shall
submit to the Company a certificate of such investment intent, together with such other evidence supporting the same as the Company may
request. The Company shall be entitled to restrict the transferability of the shares issued upon
any such exercise to the extent necessary to avoid a risk of violation of the Securities Act of
1933 (or of any rules or regulations promulgated thereunder) or of any state laws or regulations.
Such restrictions may, at the option of the Company, be noted or set forth in full on the share
certificates.
7.
Non-Transferability of Option
. This Option is not assignable or transferable, in
whole or in part, by the Awardee otherwise than by the laws of descent and distribution or in
accordance with the procedures set forth in Section 12 of the Plan. During the lifetime of the
Awardee the Option shall be exercisable only by the Awardee or by Awardee’s guardian or legal
representative or Awardee’s permitted assignee or transferee.
8.
Termination of Employment
. If the Awardee’s Employment with the Company and all
Affiliates, as defined in the Plan, is terminated for any reason (including death or disability)
prior to the Expiration Date of this Option as set forth in Paragraph 3, this Option may be
exercised, to the extent of the number of shares with respect to which the Awardee could have
exercised it on the date of such termination of Employment, or to any greater extent permitted by
the Committee, by the Awardee (or, in case of Awardee’s disability, by the Awardee’s legal
representative or, in case of Awardee’s death, by the Awardee’s estate, personal representative or
beneficiary who acquired the right to exercise this Option by bequest or inheritance or by reason
of Awardee’s death) at any time prior to thirty days following the date of termination of
employment.
9.
Withholding of Taxes
. The obligation of the Company to deliver shares of Common
Stock upon the exercise of the Option shall be subject to applicable federal, state and local tax
withholding requirements.
If the exercise of this Option is subject to the withholding requirements of applicable
federal tax laws, the Committee may permit the Awardee, subject to the provisions of the Plan and
such additional withholding rules (the “Withholding Rules”) as shall be adopted by the Committee,
to satisfy the minimum federal, state and local withholding tax, in whole or in part, by electing
to have the Company withhold (or by returning to the Company) shares of Common Stock, which shares
shall be valued, for this purpose, at their fair market value on the date of exercise of the Option
(or, if later, the date on which the Optionee recognizes ordinary income with respect to such
exercise) (the “Determination Date”). An election to use shares of Common Stock to satisfy tax
withholding requirements must be made in compliance with and subject to the Withholding Rules, and
the Committee may not withhold shares in excess of the number necessary to satisfy the minimum
federal, state and local income tax withholding requirements. In the event shares of Common Stock
acquired under the exercise of an ISO are used to satisfy such withholding requirement, such shares
of Common Stock must have been held by the Awardee for a period of not less than the holding period
described in section 422(a)(1) of the Code on the Determination Date, or if such shares of Common
Stock were acquired through exercise of an NQSO or of an option under a similar plan, such option
was granted to the Awardee at least six months prior to the Determination Date.
10.
Governing Law
. This Option Agreement shall be construed in accordance with, and
its interpretation shall be governed by applicable federal law, and otherwise by the laws of the
State of Delaware.
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IN WITNESS WHEREOF, the Company has caused this Non-Qualified Stock Option Agreement to be
duly executed by its officers thereunto duly authorized, and the Awardee has hereunto set his hand
and seal, all on the day and year first above written.
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BIOSCRIP, INC.
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By:
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Barry A. Posner, Executive Vice President
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ACCEPTED AND AGREED TO:
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, Awardee
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4
