-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CMt9sQZts+RwLVmmnMi73YVdwrfi9R86UsMJn40TtbTB0qlB6rCsj3ZtAaIgPkQY OH/bTtJ80qKd3w+S3BUduQ== 0000950144-96-008641.txt : 19961125 0000950144-96-008641.hdr.sgml : 19961125 ACCESSION NUMBER: 0000950144-96-008641 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19961122 EFFECTIVENESS DATE: 19961122 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: RISCORP INC CENTRAL INDEX KEY: 0001003957 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 650335150 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-16673 FILM NUMBER: 96671338 BUSINESS ADDRESS: STREET 1: 1390 MAIN ST CITY: SARASOTA STATE: FL ZIP: 34236 BUSINESS PHONE: 9419512022 S-8 1 RISCORP, INC. FORM S-8 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 22, 1996 REGISTRATION NO. 33- ---------- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- RISCORP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Florida 65-0335150 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.) OF INCORPORATION OR ORGANIZATION) 1390 Main Street, Sarasota, Florida 34236-5642 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
RISCORP, INC. 1995 NONQUALIFIED STOCK OPTION PLAN AND 1996 NONQUALIFIED FORMULA STOCK OPTION PLAN (FULL TITLES OF THE PLANS) ---------------------- Gregory M. Marks, Esq. Senior Vice President and General Counsel RISCORP, Inc. 1390 Main Street Sarasota, Florida 34236-5642 (NAME AND ADDRESS OF AGENT FOR SERVICE) (941) 951-2022 (TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) COPIES OF ALL COMMUNICATIONS TO: Richard A. Halloy Senior Vice President and Chief Financial Officer RISCORP, Inc. 1390 Main Street Sarasota, Florida 34236-5642 IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF 1933, CHECK THE FOLLOWING BOX. [X] CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------- Proposed Proposed Title of Amount maximum maximum Amount of securities to be offering price aggregate registration to be registered Registered per unit* offering price* fee - ----------------------------------------------------------------------------------------------------------- Class A Common stock, par value $.01 per share . . . . . . . . 3,128,832 shares $3.8125 $11,928,672.00 $3,614.75 - -----------------------------------------------------------------------------------------------------------
* ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE. THE FEE IS CALCULATED UPON THE BASIS OF THE AVERAGE BETWEEN THE HIGH AND LOW SALES PRICE FOR SHARES OF COMMON STOCK OF THE REGISTRANT AS REPORTED BY THE NASDAQ NATIONAL MARKET ON NOVEMBER 21, 1996. ================================================================================ 2 PART II INFORMATION REQUIRED IN REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE The following documents previously filed by the Company with the Commission are incorporated by reference: (1) The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1996; (2) The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1996; (3) The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1996; (4) The description of the Company's common stock contained in the Company's Registration Statement on Form S-1, file number 33-99760, filed November 22, 1995, and as amended by amendments filed January 8, 1996, February 6, 1996, February 23, 1996 and February 28, 1996, relating to the offer and sale by the Company and a selling shareholder of 10,000,000 shares of Class A common stock to the public. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which 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 filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Company is a Florida corporation. The Florida Business Corporation Act, as amended (the "Florida Act"), provides that, in general, a business corporation may indemnify any person who is or was a party to any proceeding (other than an action by, or in the right of, the corporation) by reason of the fact that he is or was a director or officer of the corporation, against liability incurred in connection with such proceeding, including any appeal thereof, provided certain standards are met, including that such officer or director 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 provided further that, with respect to any criminal action or proceeding, the officer or director had no reasonable cause to believe his conduct was unlawful. In the case of proceedings by or in the right of the corporation, the Florida Act provides that, in general, a corporation may indemnify any person who was or is a party to any such proceeding by reason of the fact that he is or was a director or officer of the corporation against expenses and amounts paid in settlement actually and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof, provided that such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be made in respect of any claim as to which such person is adjudged liable unless a court of competent jurisdiction determines upon application that such person is fairly and reasonably entitled to indemnity. To the extent that any officers or directors are successful on the merits orotherwise in the defense of any of the proceedings described above, the Florida Act provides that the II-1 3 corporation is required to indemnify such officers or directors against expenses actually and reasonably incurred in connection therewith. However, the Florida Act further provides that, in general, indemnification or advancement of expenses shall not be made to or on behalf of any officer or director if a judgment or other final adjudication establishes that his actions, or omissions to act, were material to the cause of action so adjudicated and constitute: (i) a violation of the criminal law, unless the director or officer had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe it was unlawful; (ii) a transaction from which the director or officer derived an improper personal benefit; (iii) in the case of a director, a circumstance under which the director has voted for or assented to a distribution made in violation of the Florida Act or the corporation's articles of incorporation; or (iv) willful misconduct or a conscious disregard for the best interests of the corporation in a proceeding by or in the right of the corporation to procure a judgment in its favor or in a proceeding by or in the right of a shareholder. Article V of the Company's Bylaws provides that the Company shall indemnify any director, officer, employee or agent or any former director, officer, employee or agent to the full extent permitted by Florida law. The Company has purchased insurance with respect to, among other things, any liabilities that may arise under the statutory provisions referred to above. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. 4.1 RISCORP, Inc. 1995 Nonqualified Stock Option Plan. 4.2 RISCORP, Inc. 1996 Nonqualified Formula Stock Option Plan. 4.3 Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1, file number 33-99760, filed November 22, 1995, and as amended by amendments filed January 8, 1996, February 6, 1996, February 23, 1996, and February 28, 1996, relating to the offer and sale by the Company and a selling shareholder of 10,000,000 shares of Class A common stock to the public. 4.4 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-1, file number 33-996760, filed November 22, 1995, and as amended by amendments filed January 8, 1996, February 6, 1996, February 23, 1996, and February 28, 1996, relating to offer and sale by the Company and a selling shareholder of 10,000,000 shares of Class A common stock to the public). 4.5 Form of Stock Certificate for the Class A Common Stock of the Company (incorporated by reference to Exhibit 4.1 of the Company's Registration Statement on Form S-1, file number 33-99760, filed November 22, 1995, and as amended by amendments filed January 8, 1996, February 6, 1996, February 23, 1996, and February 28, 1996, relating to the offer and sale by the Company and a selling shareholder of 10,000,000 shares of Class A common stock to the public) 5.1 Opinion of Gregory M. Marks, Esq. as to the legality of the securities being registered hereunder. 23.1 Consent of Gregory M. Marks, Esq. (contained in Exhibit 5.1 hereto). 24.1 Powers of Attorney (included on signature page). 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; (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; II-2 4 (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) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, 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 undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) 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 of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions (see Item 6) or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 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 Act and will be governed by the final adjudication of such issue. II-3 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, 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 the City of Sarasota, State of Florida, on November 22, 1996. RISCORP, INC. By: /s/ William D. Griffin ------------------------------------------- William D. Griffin, Chief Executive Officer KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregory M. Marks, Richard Halloy, and Walter E. Riehemann, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any and all amendments of this registration statement and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may 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 by the following persons in the capacities and on the dates indicated.
Signatures Title Date ---------- ----- ---- /s/ William D. Griffin Chief Executive Officer and Director November 22, 1996 - -------------------- (Principal Executive Officer) William D. Griffin /s/ James A. Malone - -------------------- Chief Operating Officer and Director November 22, 1996 James A. Malone /s/ Richard Halloy Chief Financial Officer and Director November 22, 1996 - -------------------- (Principal Financial and Accounting Richard Halloy Officer) /s/ Walter L. Revell - -------------------- Director November 22, 1996 Walter L. Revell - -------------------- Director November __, 1996 George E. Greene III - -------------------- Seddon Goode, Jr. Director November __, 1996 /s/ L. Scott Merritt - -------------------- L. Scott Merritt Treasurer and Director November 22, 1996
6 INDEX TO EXHIBITS
SEQUENTIALLY EXHIBIT NUMBERED NUMBER DESCRIPTION PAGE - ------ ----------- ------------ 4.1 RISCORP, Inc. 1995 Nonqualified Stock Option Plan 4.2 RISCORP, Inc. 1996 Nonqualified Formula Stock Option Plan. 4.3 Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1, file number 33-99760, filed November 22, 1995, and as amended by amendments filed January 8, 1996, February 6, 1996, February 23, 1996, and February 28,1996, relating to the offer and sale by the Company and a selling shareholder of 10,000,000 shares of Class A common stock to the public). 4.4 Amended and Restated Bylaws of the Company (incorporated reference to Exhibit 3.2 to the Company's Registration Statement on Form S-1, filed November 22, 1995, and as amended by amendments filed January 8, 1996, February 6, 1996, February 23, 1996, and February 28, 1996, relating to the offer and sale by the Company and a selling shareholder of 10,000,000 shares of Class A common stock to the public). 4.5 Form Stock Certificate for the Class A Common Stock of the Company (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on S-1, file number 33-99760, filed November 22, 1995, and as amended by amendments filed January 8, 1996, February 6, 1996, February 23, 1996, February 28, 1996, relating to the offer and sale by the Company and a selling shareholder of 10,000,000 shares of Class A common stock to the public). 5.1 Opinion of Gregory M. Marks, Esq. 23.1 Consent of Gregory M. Marks, Esq. (contained in Exhibit 5.1 hereto). 24.1 Powers of Attorney (included on signature page).
EX-4.1 2 1995 NONQUALIFIED STOCK OPTION PLAN 1 EXHIBIT 4.1 RISCORP, INC. 1995 NONQUALIFIED STOCK OPTION PLAN 2 RISCORP, INC. 1995 NONQUALIFIED STOCK OPTION PLAN THIS INDENTURE is made this 21st day of November 1995 by RISCORP, Inc., a Florida corporation (hereinafter called the "Company"); W I T N E S S E T H: WHEREAS, the Company desires to promote in its employees and employees of its affiliates the strongest interest in the growth and success of the business of the Company and the assurance that they will share in the prosperity of the business of the Company; WHEREAS, to that end the Company desires to provide those employees who are eligible hereunder with nonqualified stock options to purchase shares of the Company and, accordingly, has formulated the stock option plan herein embodied; NOW THEREFORE, the Company does hereby establish the RISCORP, Inc. 1995 Stock Option Plan (hereinafter called the "Plan") so that it shall read in its entirety as follows: 3 RISCORP, INC. 1995 NONQUALIFIED STOCK OPTION PLAN
Page ---- SECTION 1 DEFINITIONS 1 SECTION 2 ADMINISTRATION 2 SECTION 3 ELIGIBILITY 2 SECTION 4 SHARES SUBJECT TO PLAN 3 SECTION 5 TERMS AND CONDITIONS 3 SECTION 6 TERM OF PLAN 3 SECTION 7 INDEMNIFICATION OF COMMITTEE 4 SECTION 8 AMENDMENT AND TERMINATION OF THE PLAN 4 SECTION 9 NO OBLIGATION TO EXERCISE OPTION 4 SECTION 10 ADJUSTMENT IN OPTION SHARES AND EXERCISE PRICE 4 SECTION 11 GENERAL RESTRICTION 5 SECTION 12 RIGHTS AS A STOCKHOLDER 5
4 RISCORP, INC. 1995 NONQUALIFIED STOCK OPTION PLAN SECTION 1 DEFINITIONS Wherever used herein, the masculine pronoun shall be deemed to include the feminine, and the singular to include the plural, unless the context clearly indicates otherwise, and the following words and phrases shall, when used herein, have the meanings set forth below: 1.1 "Act" means the Securities Exchange Act of 1934. 1.2 "Affiliate" means (a) an entity that directly or through one or more intermediaries is controlled by the Company, (b) any entity in which the Company has a significant equity interest, as determined by the Company and (c) each Griffin Company. 1.3 "Agreement" means a Stock Option Agreement, which is an agreement subject to the terms of the Plan. 1.4 "Board of Directors" means the Board of Directors of the Company. 1.5 "Code" means the Internal Revenue Code of 1986, as amended. 1.6 "Committee" means the committee appointed by the Board of Directors to administer the Plan. 1.7 "Employee" means any person who is employed by the Company or an Affiliate for purposes of the Federal Insurance Contributions Act and any consultant retained to provide services to the Company or an Affiliate. 1.8 "Griffin Company" means any entity in which William D. Griffin owns, directly or indirectly (after application of the attribution rules of Section 318 of the Code), 50% or more of the total outstanding equity interests, determined on a voting or value basis. 1.9 "Option" means an option to purchase Shares pursuant to and in accordance with the provisions of the Plan. 1.10 "Optionee" means an Employee who is granted an Option pursuant to and in accordance with the provisions of the Plan. 1.11 "Option Shares" means Shares subject to and issued pursuant to an exercise of an Option granted under the Plan. 5 1.12 "Share" means a share of the Class A common stock of the Company and/or any shares of stock of another corporation or corporations issued in exchange for a share of Class A common stock of the Company as a result of a merger, consolidation or other adjustment to the capital structure of the Company. SECTION 2 ADMINISTRATION 2.1 Delegation to Committee. The Plan shall be administered by the Committee. The members of the Committee shall be appointed by the Board of Directors. After the registration of an equity security of the Company under Section 12 of the Act, the Committee shall consist of at least two (2) members of the Board of Directors and no person shall be appointed as a member of the Committee who is, or within one (1) year prior to his becoming a member of the Committee was, granted or awarded equity securities pursuant to the Plan or any other plan of the Company or an "affiliate" within the meaning of Rule 16b-3 under Section 16(b) of the Act, except that participation in any plan which does not disqualify a director from being disinterested as provided in Rule 16b-3 shall not disqualify a person from being a member of the Committee. The Board of Directors may from time to time remove members from or add members to the Committee. Vacancies on the Committee shall be filled by the Board of Directors. 2.2 Committee Actions. The Committee shall select one of its members as chairman, and shall hold meetings at such times and places as it may determine. Acts approved by the majority of the Committee in a meeting at which a quorum is present or acts reduced to or approved in writing by a majority of the members of the Committee shall be the valid acts of the Committee. A quorum shall be present at any meeting of the Committee which a majority of the Committee members attend. 2.3 Finality. The Committee shall have the authority in its sole discretion to interpret the Plan, to grant Options under and in accordance with the provisions of the Plan, and to make all other determinations and to take all other actions it deems necessary or advisable for the implementation and administration of the Plan or Agreements thereunder, except to the extent such powers are herein reserved by the Board of Directors. All actions of the Board of Directors and the Committee shall be final, conclusive, and binding upon the Optionees. No member of the Board of Directors or the Committee shall be liable for any action taken or decision made in good faith relating to the Plan or any grant of an Option thereunder. SECTION 3 ELIGIBILITY Employees who are designated by the Committee upon the recommendation of the officers of the Company shall be eligible to receive Options under the Plan on the terms and subject to the restrictions hereinafter set forth. 2 6 SECTION 4 SHARES SUBJECT TO PLAN 4.1 The aggregate number of Option Shares which may be issued under the Plan shall at no time exceed 3,118,832. The number of Shares with respect to which an Option may be granted to any individual shall be determined by the Committee. The limitations established by this Section shall be subject to adjustment in accordance with the provisions of the Plan. Notwithstanding the foregoing, to the extent required under Code Section 162(m) and the regulations thereunder for compensation to be treated as qualified performance-based compensation, the maximum number of Shares with respect to which Options may be granted during any one year period to any Employee shall not exceed 500,000 Shares. 4.2 In the event that an Option expires or is terminated for any reason, the Option Shares allocable to the unexercised portion of such Option may again be subjected to an Option under the Plan. 4.3 In the event that an Optionee delivers Shares as payment of the exercise price for an Option, such Shares may be subjected to Options under the Plan. SECTION 5 TERMS AND CONDITIONS 5.1 Grant of Option. Each Option granted pursuant to the Plan shall be authorized by the Committee. 5.2 Stock Option Agreement. Each Option shall be evidenced by an Agreement, in such form and containing such terms and conditions as the Committee from time to time may determine, provided that each Agreement: (a) shall state the number of Option Shares to which it pertains; (b) shall state the exercise price and exercise period; and (c) shall provide that the Option is exercisable, with respect to the number of Shares to which it pertains, only if and to the extent that the Optionee is vested pursuant to the vesting provisions set forth in the Agreement. SECTION 6 TERM OF PLAN The Plan shall be effective on the date hereof and shall continue to be effective until ten (10) years following the earlier of the effective date of the Plan or the date the stockholders approve the Plan, unless sooner terminated by the Board of Directors 3 7 pursuant to Section 8 hereof. The Company shall submit the Plan to its stockholders for approval within twelve (12) months of the adoption of the Plan by the Board of Directors. SECTION 7 INDEMNIFICATION OF COMMITTEE In addition to such other rights of indemnification that the members of the Committee may have, each member of the Committee shall be indemnified by the Company against reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which it may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Option granted thereunder, and against all amounts paid by it in settlement thereof (provided the settlement has received the prior approval of the Company) or paid by it in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in the action, suit or proceeding that the Committee member is liable for negligence or misconduct in the performance of its duties; provided that promptly after the institution of the action, suit or proceeding the Committee member shall in writing offer the Company the opportunity, at its own expense, to handle and defend such matter. Upon the delivery to the Committee member of written notice of assumption by the Company of the defense of such matter, the Company will not be responsible to the Committee member for any further fees and disbursements relating to the defense of such matter, including fees and disbursements of counsel. SECTION 8 AMENDMENT AND TERMINATION OF THE PLAN The Board of Directors may, insofar as permitted by law, from time to time, with respect to any Shares at the time not subject to Options, suspend or terminate the Plan or revise or amend it in any respect whatsoever. SECTION 9 NO OBLIGATION TO EXERCISE OPTION The granting of an Option shall impose no obligation upon the Optionee to exercise the Option. SECTION 10 ADJUSTMENT IN OPTION SHARES AND EXERCISE PRICE If (i) the number of shares shall be increased or reduced by a change in par value, split-up, stock split, reverse stock split, reclassification, merger, consolidation, distribution of stock dividends or similar capital adjustments, or (ii) the Company engages in a transaction for which the Committee determines an adjustment is appropriate, then the Committee may make an adjustment in the number and kind of Shares available for the 4 8 granting of Options under the Plan. In addition, the Committee may, in its sole and absolute discretion, make an adjustment in the number, kind and price of Shares as to which outstanding Options, or the portions thereof then unexercised, shall be exercisable, to the end that the Optionee's proportionate interest is maintained as before the occurrence of the event. The adjustment in outstanding Options will be made without change in the total price applicable to the unexecuted portion of the Option and, if necessary, with a corresponding adjustment in the Option price per share. Any fractional Shares resulting from such adjustments shall be eliminated. All adjustments made by the Committee under this Section shall be conclusive. Notwithstanding the foregoing paragraph, the Committee shall have the right to terminate the Options granted under the Plan in consideration of the payment to the Optionees of the difference between (a) and (b) where (a) equals the then fair market value of the Option Shares to the extent vested and (b) equals the Option price for the Option Shares to the extent vested. Alternatively, upon termination of an Option granted under the Plan, the Committee may grant the Optionee a substitute option to acquire an equity interest in an Affiliate in the manner set forth in the Agreement. SECTION 11 GENERAL RESTRICTION Notwithstanding anything contained herein or in any of the Agreements to the contrary, no purported exercise of any Option shall be effective without the written approval of the Company, which may be withheld to the extent that the exercise, either individually or in the aggregate together with the exercise of other previously exercised stock Options and/or offers and sales pursuant to any prior or contemplated offering of securities, would, in the sole and absolute judgment of the Company, require the filing of a registration statement with the United States Securities Exchange Commission or with the securities commission of any state. The Company shall avail itself of any exemptions from registration contained in applicable federal and state securities laws which are reasonably available to the Company on terms which, in its sole and absolute discretion, it deems reasonable and not unduly burdensome or costly. Each Optionee shall, prior to the exercise of an Option, deliver to the Company such information, representations and warranties as the Company may reasonably request in order for the Company to be able to satisfy itself that the Shares to be acquired pursuant to the exercise of an Option are being acquired in accordance with the terms of an applicable exemption from the securities registration requirements of applicable federal and state securities laws. SECTION 12 RIGHTS AS A STOCKHOLDER An Optionee or a transferee of an Optionee shall have no rights as a stockholder with respect to any Option or Option Shares until the date of the issuance of a stock certificate to him for the Option Shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions 5 9 or other rights for which the record date is prior to the date the stock certificate is issued, except as otherwise provided in the Plan. IN WITNESS WHEREOF, the Company has caused the Plan to be executed as of the day and year first above written. RISCORP, INC. /s/ Edward J. Hammel ------------------------------ By: Edward J. Hammel Title: Vice President ATTEST: - -------------------------- Title: ------------------------ [CORPORATE SEAL] 6 EX-4.2 3 1996 NONQUALIFIED FORMULA STOCK OPTION PLAN 1 EXHIBIT 4.2 RISCORP, INC. 1996 NONQUALIFIED FORMULA STOCK OPTION PLAN 2 RISCORP, INC. 1996 NONQUALIFIED FORMULA STOCK OPTION PLAN THIS INDENTURE is made this 28 day of February 1996, by RISCORP, Inc., a Florida corporation (hereinafter called the "Company"); INTRODUCTION The Company is adopting the RISCORP, Inc. 1996 Formula Stock Option Plan (the "Plan") to provide nonemployee directors with a non-qualified stock option ("Option") when they first join the Company to purchase 1,000 shares of Company Class A Common Stock. The Board of Directors of the Company believes this Plan will promote personal interest in the welfare of the Company by, and provide incentive to, the individuals who are primarily responsible both for the regular operations of and for shaping and carrying out the long term plans of the Company, thus facilitating the continued growth and financial success of the Company. 3 RISCORP, INC. 1996 NONQUALIFIED FORMULA STOCK OPTION PLAN TABLE OF CONTENTS Page ---- SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 2 ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 3 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 4 SHARES SUBJECT TO PLAN . . . . . . . . . . . . . . . . . . 2 SECTION 5 FORMULA AND TERMS AND CONDITIONS . . . . . . . . . . . . . 2 SECTION 6 TERM OF PLAN . . . . . . . . . . . . . . . . . . . . . . . 3 SECTION 7 INDEMNIFICATION OF COMMITTEE . . . . . . . . . . . . . . . 3 SECTION 8 AMENDMENT AND TERMINATION OF THE PLAN . . . . . . . . . . 4 SECTION 9 NO OBLIGATION TO EXERCISE OPTION. . . . . . . . . . . . . 4 SECTION 10 ADJUSTMENT IN OPTION SHARES AND EXERCISE PRICE . . . . . . 4 SECTION 11 WITHHOLDING TAXES . . . . . . . . . . . . . . . . . . . . 5 SECTION 12 RIGHTS AS A STOCKHOLDER. . . . . . . . . . . . . . . . . . 5 SECTION 13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 5
-i- 4 SECTION 1 DEFINITIONS Wherever used herein, the masculine pronoun shall be deemed to include the feminine, and the singular to include the plural, unless the context clearly indicates otherwise, and the following words and phrases shall, when used herein, have the meanings set forth below: 1.1 "Act" means the Securities Exchange Act of 1934. 1.2 "Affiliate" means (a) an entity that directly or through one or more intermediaries is controlled by the Company, and (b) any entity in which the Company has a significant equity interest, as determined by the Company. 1.3 "Agreement" means a stock option agreement, which is an agreement subject to the terms of the Plan. 1.4 "Board of Directors" means the Board of Directors of the Company. 1.5 "Code" means the Internal Revenue Code of 1986, as amended. 1.6 "Committee" means the committee appointed by the Board of Directors to administer the Plan. 1.7 "Director" means a director of the Company. 1.8 "Employee" means any person who is employed by the Company or an Affiliate for purposes of the Federal Insurance Contributions Act and any consultant retained to provide services (other than in the capacity of a director) to the Company or an Affiliate. 1.9 "Option" means an option to purchase Shares of the Company granted pursuant to and in accordance with the provisions of the Plan. 1.10 "Optionee" means a Director who is granted an Option pursuant to and in accordance with the provisions of the Plan. 1.11 "Option Shares" means Shares subject to and issued pursuant to an exercise of an Option granted under the Plan. 1.12 "Share" means a share of Class A Common Stock of the Company and/or any share or shares of stock of another corporation or corporations issued in exchange for a share of Class A Common Stock of the Company as a result of a merger, consolidation or other adjustment to the capital structure of the Company. 1.13 "Valuation Date" means January 1. SECTION 2 ADMINISTRATION 2.1 Delegation to Committee. The Plan shall be administered by the Committee. The members of the Committee shall be appointed by the Board of Directors. The Committee shall -1- 5 consist of at least one or more members of the Board of Directors who have not received a grant of an Option under the Plan which remains outstanding and who are not currently eligible to receive a grant of an Option under the Plan. The Board of Directors may from time to time remove members from or add members to the Committee. Vacancies on the Committee shall be filled by the Board of Directors. 2.2 Committee Actions. The Committee shall select one of its members as chairman, and shall hold meetings at such times and places as it may determine. Acts approved by the majority of the Committee in a meeting at which a quorum is present or acts reduced to or approved in writing by a majority of the members of the Committee shall be the valid acts of the Committee. A quorum shall be present at any meeting of the Committee which a majority of the Committee members attend. 2.3 Finality. The Committee shall have the authority in its sole discretion to interpret the Plan, to grant Options under and in accordance with the provisions of the Plan, and to make all other determinations and to take all other actions it deems necessary or advisable for the implementation and administration of the Plan or Agreements thereunder, except to the extent such powers are herein reserved by the Board of Directors. All actions of the Board of Directors and the Committee shall be final, conclusive, and binding upon the Optionees. No member of the Board of Directors or the Committee shall be liable for any action taken or decision made in good faith relating to the Plan or any grant of an Option thereunder. SECTION 3 ELIGIBILITY Directors who are not Employees shall be eligible to receive Options under the Plan on the terms and subject to the restrictions hereinafter set forth. SECTION 4 SHARES SUBJECT TO PLAN 4.1 The aggregate number of Option Shares which may be issued under the Plan shall at no time exceed 10,000. The limitations established by this Section shall be subject to adjustment in accordance with the provisions of the Plan. 4.2 In the event that an Option expires or is terminated for any reason, the Option Shares allocable to the unexercised portion of such Option may again be subjected to an Option under the Plan. 4.3 In the event that an Optionee delivers Shares as payment of the exercise price for an Option, such Shares may be subjected to Options under this Plan. SECTION 5 FORMULA AND TERMS AND CONDITIONS 5.1 Each Director who is not an Employee shall be granted an Option to purchase 1,000 Shares on the date of the final prospectus in connection with the Company's initial public offering of Shares. Any person who thereafter becomes Director who is not an Employee shall be granted an Option to purchase 1,000 Shares on the date he or she first becomes a Director who is not an Employee. -2- 6 5.2 The exercise price of each Share granted pursuant to each Option granted on the date of the final prospectus in connection with the Company's initial public offering of Shares shall be the public offering price set forth on the cover of the final prospectus. Thereafter, the exercise price of each share granted pursuant to an Option shall be the Fair Market Value of a Share on the first trading day preceding the day the Option is granted. "Fair Market Value" means: (1) if the Shares are actively traded on any national securities exchange or reported by NASDAQ on a basis which reports closing sales prices, the closing sales price per Share on such day; (2) if the Shares are otherwise traded over the counter, fair market value shall be the arithmetic mean of the final bid and asked prices per Share on such day; (3) if Shares are not publicly traded, the fair market value as determined by the Committee on the Valuation Date most recently preceding the date for which the value is being determined, unless the Committee determines that the fair market value needs to be redetermined or updated to reflect substantial changes in the Company since the immediately preceding Valuation Date which it is anticipated may have a material effect upon the fair market value of the Company. For purposes of this Subsection (3), Fair Market Value shall be determined on a fully distributed basis without regard to among other things, illiquidity, the effect of the Option Shares, shareholder distributions, initial public offering market discounts, or change of control premiums, while taking into account all relevant facts and circumstances including, but not limited to, the future business plans of the Company as of that date. 5.3 Options shall be subject to the vesting schedule attached hereto as Exhibit 1 and, except as otherwise provided below, may be exercised, to the extent vested, following the date of grant and ending on the first to occur of the following dates: (1) ten (10) years following the date of grant; (2) the date the Committee exercises its right pursuant to Section 10 to terminate the Option; (3) the date the Optionee ceases, as a result of voluntary resignation, to be an Employee, Director or a director of an Affiliate; or (4) if the Optionee dies, becomes subject to a Disability, or retires after reaching age 65 while an Employee or Director or director of an Affiliate, six months following the date of termination. Each Option granted pursuant to this Plan shall be authorized by the Committee, shall be evidenced by an Agreement and shall be subject to such additional terms as set forth in the Agreement. SECTION 6 TERM OF PLAN The Plan shall be effective on the date hereof and shall continue to be effective until ten (10) years following the earlier of the effective date of the Plan or the date the stockholders approve the Plan, unless sooner terminated by the Board of Directors pursuant to Section 8 hereof. The Company shall submit the Plan to its stockholders for approval within twelve (12) months of the adoption of the Plan by the Board of Directors. -3- 7 SECTION 7 INDEMNIFICATION OF COMMITTEE In addition to such other rights of indemnification that the members of the Committee may have, each member of the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which it may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Option granted thereunder, and against all amounts paid by it in settlement thereof (provided the settlement has received the prior approval of the Company) or paid by it in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in the action, suit or proceeding that the Committee member is liable for negligence or misconduct in the performance of its duties; provided that promptly after institution of the action, suit or proceeding the Committee member shall in writing offer the Company the opportunity, at its own expense, to handle and defend such matter. Upon the delivery to the Committee member of written notice of assumption by the Company of the defense of such matter, the Company will not be responsible to the Committee member for any further fees and disbursements relating to the defense of such matter, including fees and disbursements of counsel. SECTION 8 AMENDMENT AND TERMINATION OF THE PLAN With respect to provisions of the Plan relating to eligibility and to the amount, price and timing of an Option, to the extent required under Rule 16b-3 for grants to constitute formula grants that allow Optionees to remain disinterested, the Plan may not be amended by the Board of Directors more than once every six months, other than to conform it with changes in the Code, the Employee Retirement Income Security Act of 1974, or any rules under either of the foregoing. Except as otherwise provided in this Section, the Board of Directors at any time may amend or terminate the Plan without shareholder approval; provided, however, that the Board of Directors may condition any amendment on the approval of the shareholders of the Company if such approval is necessary or advisable with respect to tax, securities (which require such approval for a material increase of the number of Shares subject to Options and for material modifications to the eligibility requirements of this Plan, among other amendments) or other applicable laws to which the Company, this Plan, optionees or eligible employees or directors are subject. No amendment or termination of the Plan shall adversely affect the rights of an optionee with regard to his Options without his consent. SECTION 9 NO OBLIGATION TO EXERCISE OPTION The granting of an Option shall impose no obligation upon the Optionee to exercise the Option. SECTION 10 ADJUSTMENT IN OPTION SHARES AND EXERCISE PRICE If (i) the number of Shares shall be increased or reduced by a change in par value, split-up, stock split, reverse stock split, reclassification, merger, consolidation, distribution of stock dividends or similar capital adjustments, or (ii) the Company engages in a transaction for which the Committee determines an adjustment is appropriate, then the Committee may make an adjustment in the number and kind of Shares available for the granting of Options under the Plan. In addition, the Committee may, in its sole and absolute discretion, make an adjustment in the number, kind and price of Shares as to which outstanding Options, or the portions thereof then unexercised, shall be exercisable, to -4- 8 the end that the Optionee's proportionate interest is maintained as before the occurrence of the event. The adjustment in outstanding Options will be made without change in the total price applicable to the unexercised portion of the Option and, if necessary, with a corresponding adjustment in the Option price per share. Any fractional Shares resulting from such adjustments shall be eliminated. All adjustments made by the Committee under this Section shall be conclusive. Notwithstanding the foregoing paragraph, the Committee shall have the right to terminate the Options granted under the Plan in consideration of the payment to the Optionees of the difference between (a) and (b) where (a) equals the then Fair Market Value of the Option Shares to the extent vested and (b) equals the Option price of the Option Shares to the extent vested. Alternatively, upon termination of an Option granted under the Plan, the Committee may grant the Optionee a substitute option to acquire an equity interest in an Affiliate in the manner set forth in an Agreement. SECTION 11 WITHHOLDING TAXES Whenever the Company proposes or is required to issue Shares to an optionee who is or was an employee of the Company or a Subsidiary, or to his legatee or legal representative under this Plan, pursuant to the exercise of an Option granted under this Plan, the Company shall have the right to require the recipient to remit to the Company an amount sufficient to satisfy any federal, state and local withholding tax requirement, if any, prior to the delivery of any certificate or certificates for such Shares. An optionee must pay the withholding tax in cash or by certified check or by the Company deducting a sufficient number of Shares from the Option Shares issued to satisfy withholding taxes, in accordance with the Agreement. SECTION 12 RIGHTS AS A STOCKHOLDER An Optionee or a transferee of an Optionee shall have no rights as a stockholder with respect to any Option or Option Shares until the date of the issuance of a stock certificate to him for the Option Shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date the stock certificate is issued, except as otherwise provided in the Plan. SECTION 13 GOVERNING LAW The laws of the State of Florida shall govern this Plan. -5- 9 IN WITNESS WHEREOF, the Company has caused the Plan to be executed as of the day and year first above written. RISCORP, INC. By: /s/ James A. Malone -------------------------- James A. Malone Title: President ATTEST: - -------------------------------- Title: -------------------------- [CORPORATE SEAL] -6- EX-5.1 4 OPINION OF GREGORY M. MARKS, ESQ. 1 [RISCORP LETTERHEAD] EXHIBIT 5.1 November 22, 1996 RISCORP, Inc. 1390 Main Street Sarasota, Florida 34236-5642 Re: Registration Statement on Form S-8 Gentlemen: I refer to the Registration Statement (the "Registration Statement") on Form S-8 filed today by RISCORP, Inc. (the "Company") with the Securities and Exchange Commission, for the purpose of registering under the securities act of 1933 an aggregate of 3,128,832 shares (the "Shares") of the authorized Class A common stock, par value $.01 per share, of the Company being offered to certain directors of the Company pursuant to the Company's 1995 Nonqualified Stock Option Plan and the 1996 Nonqualified Formula Stock Option Plan (collectively, the "Plans"). In connection with the foregoing registration, I have acted as counsel for the Company and have examined originals, or copies certified to my satisfaction, of such corporate records of the Company, certificates of public officials, and representatives of the Company, and other documents as I deemed necessary to deliver the option expressed below. Based upon the foregoing, and having regard for legal considerations that I deem relevant, it is my opinion that the Shares will be, when and if issued, in accordance with the exercise of options granted under the Plans, duly authorized, validly issued, and fully paid and non-assessable. I hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. /s/ Gregory M. Marks - ------------------------- GREGORY M. MARKS Senior Vice President and General Counsel RISCORP, Inc. sk/GMM -----END PRIVACY-ENHANCED MESSAGE-----