-----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, URdc8r+d3eEs0vp3Nkp/8eMjz+diI26JE3PVrEp8Ym843s3TIy8d7w5NwQ1rvF+C 69MH3NVGpMSe74RiNb8f1A== 0000950135-97-002034.txt : 19970429 0000950135-97-002034.hdr.sgml : 19970429 ACCESSION NUMBER: 0000950135-97-002034 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970428 EFFECTIVENESS DATE: 19970428 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEALTHSOURCE INC CENTRAL INDEX KEY: 0000855587 STANDARD INDUSTRIAL CLASSIFICATION: HOSPITAL & MEDICAL SERVICE PLANS [6324] IRS NUMBER: 020387748 STATE OF INCORPORATION: NH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-25933 FILM NUMBER: 97587965 BUSINESS ADDRESS: STREET 1: 2 COLLEGE PARK DRIVE CITY: HOOKSETT STATE: NH ZIP: 03106 BUSINESS PHONE: 6032687000 S-8 1 HEALTHSOURCE, INC. 1 As filed with the Securities and Exchange Commission on April 25, 1997 Registration No. 333-_______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 HEALTHSOURCE, INC. (Exact name of issuer as specified in its charter) New Hampshire 02-0387748 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) Two College Park Drive Hooksett, New Hampshire 03106 (Address of principal executive offices) 1995 CONCORD AREA PHYSICIAN NON-QUALIFIED STOCK OPTION PLAN (Full title of the plan) ---------------------------------- NORMAN C. PAYSON, M.D. President and Chief Executive Officer HEALTHSOURCE, INC. Two College Park Drive Hooksett, New Hampshire 03106 (603) 268-7000 (Name, address and telephone number of agent for service) Copy to: DANIEL N. GREGOIRE, ESQ. Sheehan Phinney Bass + Green, Professional Association 1000 Elm Street Manchester, New Hampshire 03101 ================================================================================ 2 CALCULATION OF REGISTRATION FEE ================================================================================
Proposed Proposed Title of Maximum Maximum Securities Offering Aggregate Amount of to be Amount to be Price Per Offering Registration Registered Registered Share Price Fee - -------------------------------------------------------------------------------- Common Stock 49,694 $17.46(2) $867,657(2) $263 $.10 par shs (1) value - -------------------------------------------------------------------------------- (1) Represents the maximum number of shares of Healthsource, Inc. Common Stock issuable pursuant to in-the-money options previously granted under the 1995 Concord Area Physician Non-Qualified Stock Option Plan. (2) Pursuant to Rule 457(h)(i), the registration fee has been calculated on the basis of the exercise price of the 49,694 shares of Healthsource, Inc. Common Stock issuable pursuant to in-the-money options previously granted pursuant to the 1995 Concord Area Physician Non-Qualified Stock Option Plan.
3 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. There are hereby incorporated by reference in this Registration Statement the following documents and information previously filed with the Securities and Exchange Commission: (a) The Healthsource, Inc. (the "Company") Annual Report on Form 10-K for the Fiscal Year Ended December 31, 1996. (b) The Company's Current Reports on Form 8-K dated January 10, 1997 and March 4, 1997. (c) The description of the Company's Common Stock to be offered hereby contained in the Company's Form 8-A Registration Statement filed November 12, 1992. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered 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 such documents. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. The legality of the shares ("Shares") of Common Stock of the Company to be issued upon exercise of the options ("Options") granted pursuant to the 1995 Concord Area Physicians Non-Qualified Stock Option Plan is the subject of an opinion of Sheehan Phinney Bass + Green, Professional Association. Certain members and associates of Sheehan Phinney Bass + Green, Professional Association beneficially own an aggregate of 59,140 Shares as of the date hereof. Item 6. Indemnification of Directors and Officers. The By-Laws of the Company and the New Hampshire Business Corporation Act provide that the Company shall indemnify any person who is or was a party to any pending or completed action, other than an action by or in the right of the Company, by reason of the fact that he is or was a director, officer, employee or agent of the Company, against expenses, judgments, fines and amounts paid in II-2 4 settlement if he acted in good faith and he reasonably believed, (i) in the case of conduct in his official capacity that his conduct was in the best interests of the Company, or (ii) in all other cases, that his conduct was not opposed to its best interests; or, in the case of a criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. Any such director, officer, employee or agent shall be indemnified by the Company in an action by or in the right of the Company to the same extent and under the same circumstances, except that no indemnification may be made for any claim as to which the person shall have been adjudged to be liable to the Company. The Company also may not indemnify any such director, officer, employee or agent in connection with any proceeding charging improper personal benefit to him if he is adjudged liable on that basis. Prior to and as a condition of any indemnification by the Company of any such director, officer, employee or agent, the Board of Directors must make a determination that under the facts of the matter, the person seeking indemnification met the applicable standard of conduct. However, the Company must indemnify a director who is wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the Company. In the case of the advancement by the Company of expenses before the final disposition of a proceeding involving any such person, such person must affirm his good faith belief that his conduct met the applicable standard of conduct and must undertake to repay the advance if it is ultimately determined that he did not meet the applicable standard of conduct, and the Board of Directors must make a determination that the facts then known would not preclude indemnification of such person. The Company is obligated pursuant to indemnity agreements with its directors and executive officers to indemnify them to the full extent permitted by law. Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In connection with the Agreement and Plan of Merger (the "Merger Agreement") dated February 27, 1997 among the Company, CIGNA Corporation ("CIGNA") and CHC Acquisition Corp., CIGNA agreed to provide additional indemnification rights to certain officers, directors, employees and agents of the Company. The Merger Agreement provides that from and after the consummation of the tender offer contemplated therein, CIGNA will, and will cause the Company (or the surviving corporation if after the effective time of the merger contemplated therein) to indemnify, defend and hold harmless any current or former officer, director, employee and agent of the Company and its subsidiaries against all losses, claims, damages, liabilities, costs and expenses (including attorney's fees and expenses), judgments, fines, losses, and amounts paid in settlement in connection with any actual or threatened action, suit, claim, proceeding or investigation to the extent that any such claim is based on, or arises out of, (i) the fact that such person is or was a director, officer, II-3 5 employee or agent of the Company or any of its subsidiaries or is or was serving at the request of the Company or any of its subsidiaries as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (ii) the Merger Agreement, or any of the transactions contemplated thereby, in each case to the extent that any such claim pertains to any matter or fact arising, existing, or occurring prior to or at the effective time of the merger, regardless of whether such claim is asserted or claimed prior to, at or after the effective time, to the full extent permitted under New Hampshire law or the Company's Articles of Incorporation, By-Laws or existing indemnification agreements, including provisions relating to advancement of expenses incurred in the defense of any action or suit. All rights to indemnification and all limitations on liability existing in favor of the indemnified party as provided in the Company's Articles of Incorporation and By-Laws as in effect as of the Merger Agreement will survive the merger and will continue in full force and effect, without any amendment thereto, for a period of six years from the effective time. CIGNA or the surviving corporation after the merger are obligated to maintain the Company's existing officers' and directors' liability insurance policy for a period of not less than six years after the effective date of the merger. Item 7. Exemption from Registration Claimed. Not applicable. Item 8. Exhibits. Exhibit Number Document Reference - ------- -------- --------------------- 4.1 1995 Concord Area Physician Non- Filed herewith Qualified Stock Option Plan 5.1 Opinion of Sheehan Phinney Bass + Filed herewith Green, Professional Association as to legality of securities being registered 23.1 Consent of Deloitte & Touche, LLP, Filed herewith Independent Auditors 23.2 Consent of Sheehan Phinney Bass + Contained in Exhibit 5.1 Green, Professional Association 24.1 Power of Attorney See page II-7 Item 9. Undertakings. The Company hereby undertakes: II-4 6 (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to include any prospectus required by Section 10(a)(3) of the Securities Act; to reflect in the Prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment hereof) which, individually, or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement, unless the information required to be included in a post-effective amendment by the foregoing is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act and are incorporated by reference in this 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 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. (4) That, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement 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. (5) To transmit or cause to be transmitted to all participants in the 1995 Concord Area Physician Non-Qualified Stock Option Plan, at the time and in the manner such material is sent to its shareholders, copies of all reports, proxy statements and other communications distributed to its shareholders generally. (6) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the New Hampshire Business Corporation Act, the Articles of Incorporation or the Bylaws of the Company, Indemnification Agreements entered into between the Company and its officers and directors, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, II-5 7 officer or controlling person of the Company 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 hereunder, the Company 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-6 8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Healthsource, Inc. 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 Town of Hooksett, State of New Hampshire, on this 25th day of April, 1997. HEALTHSOURCE, INC. By: /s/ Norman C. Payson, M.D. --------------------------------------- Norman C. Payson, M.D. President and Chief Executive Officer (Principal Executive Officer) By: /s/ Joseph M. Zubretsky ---------------------------------------- Joseph M. Zubretsky Chief Financial Officer (Principal Financial and Accounting Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Norman C. Payson, M.D. and Joseph M. Zubretsky, jointly and severally, his attorney-in-fact, each with the power of substitution, for him and in any and all capacities, to sign any amendments to this Registration Statement on Form S-8, and to file the same, with exhibits hereto and other documents in connection herewith, 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. II-7 9
Signature Title Date --------- ----- ---- /s/ Merwyn Bagan, M.D. Chairman of the Board April 25, 1997 - ----------------------------------- of Directors Merwyn Bagan, M.D. /s/ Paul D. Baron, M.D. Director March 22, 1997 - ----------------------------------- Paul D. Baron, M.D. /s/ Robert A. Leipold, M.D. Director March 21, 1997 - ----------------------------------- Robert A. Leipold, M.D. /s/ Francis G. Middleton, M.D. Director April 25, 1997 - ----------------------------------- Francis G. Middleton, M.D. /s/ Robert H. Bilbro, M.D. Director March 21, 1997 - ----------------------------------- Robert H. Bilbro, M.D. /s/ Norman C. Payson, M.D. President, Chief April 25, 1997 - ----------------------------------- Executive Officer and Norman C. Payson, M.D. Director /s/ Daniel F. Eubank, M.D. Director March 23, 1997 - ----------------------------------- Daniel F. Eubank, M.D. /s/ David W. Schall, M.D. Director March 21, 1997 - ----------------------------------- David W. Schall, M.D. /s/ Robert S. Cathcart III, M.D. Director March 21, 1997 - ----------------------------------- Robert S. Cathcart III, M.D. /s/ J. Harold Chandler Director April 25, 1997 - ----------------------------------- J. Harold Chandler
II-8 10 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------------------- EXHIBITS -------------------------------------- Registration Statement on Form S-8 HEALTHSOURCE, INC. April 25, 1997 II-9 11 EXHIBIT INDEX
Exhibit Number Document Reference - ------- -------- --------- 4.1 1995 Concord Area Physician Non-Qualified Stock Option Plan.................................................. Filed herewith 5.1 Opinion of Sheehan Phinney Bass + Green, Professional Association as to legality of securities being registered........................... Filed herewith 23.1 Consent of Deloitte & Touche, LLP Independent Auditors ............................................. Filed herewith 23.2 Consent of Sheehan Phinney Bass + Green, Professional Association.............................. Contained in Exhibit 5.1 24.1 Power of Attorney..................................... See page II-7
EX-4.1 2 1995 CONCORD AREA PHYSICIAN STOCK OPTION PLAN 1 EXHIBIT 4.1 HEALTHSOURCE, INC. 1995 CONCORD AREA PHYSICIAN NON-QUALIFIED STOCK OPTION PLAN ----------------------------------------------------------- A. Purpose and Scope. ----------------- This Plan is created in conjunction with the acquisition of certain primary care practices in the Concord, New Hampshire area by Community Choice Physicians, Inc. ("CCP"), an affiliate of the Company, pursuant to Agreements with the following physician practices: Concord Family Physicians Family Physicians of Pembroke Penacook Family Physicians (hereafter the "Agreements"). Pursuant to a series of Agreements, 10 primary care physicians, as individuals, partners or otherwise will sell the assets of their practices (or their entire interests therein) to Concord Community Physicians, Inc. ("CCP") and become employees of CCP (such physicians being collectively called the "Concord PCPs" herein). The purpose of this Plan is to provide an incentive for the Concord PCPs to expand and improve the services and profitability of CCP, the Company and their affiliates, and to assist CCP, the Company and their affiliates in attracting and retaining key physician employees through the grant of options to purchase shares of the Company's common stock. B. Definitions. ----------- Unless otherwise required by the context: 1. "Board" shall mean the Board of Directors of the Company. 2. "Committee" shall mean the Stock Option Plan Committee, which is appointed by the Board. 3. "Company" shall mean Healthsource, Inc., a New Hampshire corporation. 4. "Code" shall mean the Internal Revenue Code of 1986, as amended. 5. "Concord PCP" shall mean the primary care physicians who have sold the assets of his/her medical practice, or stock or partnership interest therein, to CCP and is employed by CCP and listed in Exhibit A. 2 6. "Fair Market Value" shall mean: (i) if the Stock is listed on a national securities exchange or the NASDAQ National Market System, then the value per share shall be not less than the closing price on the date of determination of fair market value, or if there were no sales on said date, then the value shall be not less than the closing price on the date next preceding the date of determination of fair market value on which there were sales; or (ii) if the Stock is not so listed on a national securities exchange or the NASDAQ National Market System, then the fair market value per share shall be as determined by the Committee in good faith from time-to-time, but in no event to be less than the book value of the Stock. 7. "Option" shall mean a right to purchase Stock, granted pursuant to the Plan. 8. "Option Price" shall mean the purchase price for Stock under an Option, as determined in SECTION F below. 9. "Participant" shall mean the individuals listed in Exhibit A. 10. "Plan" shall mean this Healthsource, Inc. 1995 Concord Area Physician Non-Qualified Stock Option Plan. 11. "Stock" shall mean the common stock of the Company, par value $.10 per share. C. Stock to be Optioned. -------------------- Subject to the provisions of SECTION L of the Plan, the maximum number of shares of Stock that may be optioned or sold under the Plan is one hundred fifty thousand (150,000) shares. Such shares may be authorized but unissued shares of Stock of the Company. D. Administration. -------------- The Plan shall be administered by the Committee. Two members of the Committee shall constitute a quorum for the transaction of business. The Committee shall be responsible to the Board for the operation of the Plan. The interpretation and construction of any provision of the Plan by the Committee shall be final. The Committee shall also have the authority to provide Participants, in any Option granted under the Plan, the right to require the Company to repurchase options or to reacquire shares of Stock acquired through exercise of an Option, on terms which the Committee in its sole discretion shall deem necessary and appropriate. No member of the Board or the Committee shall be liable for any action or determination made in good faith. E. Eligibility and Issuance. ------------------------ 2 3 Within sixty (60) days after the date that the Agreements are fully executed (the "Signing Date"), the Board shall issue Options to each Concord PCP listed in Exhibit A to purchase the number of shares of Stock of the Company set forth opposite such Concord PCP's name in Exhibit A in accordance with the terms and conditions of the Plan. Thereafter, on or about each of the next four (4) anniversaries of the Signing Date, the Board shall issue Options to each Concord PCP listed in Exhibit A who is, as of such anniversary date, an employee of CCP, to purchase the number of shares of Stock of the Company set forth opposite such Concord PCP's name (adjusted, if required, pursuant to Section L) in Exhibit A pursuant to the terms and conditions of the Plan. F. Option Price. ------------ The purchase price for Stock under each Option shall be one hundred ten percent (110%) of the fair market value of the Stock at the time the Option is granted, but in no event less than the par value of the Stock. G. Terms and Conditions of Options. ------------------------------- Options granted pursuant to the Plan have been authorized by the Board and shall be evidenced by agreements in the form annexed hereto as Exhibit B. Such agreements shall comply with and be subject to the following terms and conditions: 1. EMPLOYMENT AGREEMENT. The Participant shall agree to remain in the employ of, and to render services to, the Company or any of its subsidiaries in accordance with his/her employment agreement entered into on or about August 31, 1995. No such agreement shall impose upon the Company or any of its subsidiaries, however, any obligation to employ the Participant for any period of time. 2. TIME AND METHOD OF PAYMENT. Unless the Board otherwise provides for "cashless exercise" of the Options, the Option Price shall be paid in full in cash (or in the case of an immediate sale, by Participants, a 10 day note coupled with an arrangement of the process of the sale) at the time an Option is exercised under the Plan. Otherwise, an exercise of any Option granted under the Plan shall be invalid and of no effect. Promptly after the exercise of an Option and the payment of the full Option Price (unless cashless exercise has been authorized), the Participant shall be entitled to the issuance of a stock certificate evidencing his ownership of such Stock. A Participant shall have none of the rights of a shareholder until shares are issued to him, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 3 4 3. NUMBER OF SHARES. Each Option shall state the total number of shares of Stock to which it pertains. 4. OPTION PERIOD AND GENERAL LIMITATIONS ON EXERCISE OF OPTIONS. No Option may be exercised prior to the expiration of two years from the grant thereof; as of the second anniversary date after each grant under the plan, a pro rata number of the options granted shall vest, such that the entire annual grant will be vested on the anniversary date of the grant in the year 2002; the Board may also provide that an Option may not be exercised in whole or in part for such longer periods of time specified in the individual Option agreement. Except as so provided herein or in the Option agreement, an Option may be exercised in whole or in part at any time during its term. No Option may be exercised after the expiration of ten (10) years from the date it is granted. No Option may be exercised for a fractional share of Stock. 5. CHANGE IN CONTROL OF THE COMPANY, HEALTHSOURCE NEW HAMPSHIRE, INC. OR CCP. In the event (i) of a change of control in the Company, defined as one person or entity owning a greater than 50% interest in the Company, or a transaction involving the purchase and sale of more than ten percent of the Company's shares of voting stock and pursuant to which there is a change of more than one-half of the Company's Board of Directors (including the election of new directors) (ii) the sale of a majority of the capital stock of CCP or Healthsource New Hampshire, Inc. to a third-party, or (iii) the sale of substantially all of the assets of CCP or Healthsource New Hampshire, Inc. to a third-party, then all Options then granted hereunder shall be immediately exercisable in full without regard to any vesting or delay provision contained therein. 6. CONSIDERATION. The consideration for issuance of Options by the Company shall be determined by the Board and the judgment of the Board as to the consideration and the sufficiency thereof shall be conclusive. H. Termination of Employment. ------------------------- Except as provided in SECTION I, below, if a Participant ceases to be employed by the Company or any of its subsidiaries, his/her Options shall terminate immediately; PROVIDED, HOWEVER, that if a Participant's cessation of employment with the Company and its subsidiaries is due to his/her retirement with the consent of the Company or any of its subsidiaries, the Participant may, at any time within three (3) months after such cessation of employment, exercise his/her Options to the extent that he/she was entitled to exercise them on the date of cessation of employment, but in no event shall any Option be exercisable more than ten (10) years from the date it was granted. The Board may cancel an Option during the three-month period referred to in this paragraph, if the Participant engages in employment or activities contrary, in the opinion of the Board, to the best 4 5 interests of the Company or any of its subsidiaries. The Board shall determine in each case whether a termination of employment shall be considered a retirement with the consent of the Company or a Subsidiary, and, subject to applicable law, whether a leave of absence shall constitute a termination of employment. Any such determination of the Board shall be final and conclusive. I. Rights in Event of Death/Disability. ----------------------------------- If a Participant dies or becomes permanently disabled while employed by the Company or any of its subsidiaries, or within three months after having retired with the consent of the Company or any of its subsidiaries, and without having fully exercised his Options, all Options granted to the Participant shall become immediately vested and the Participant or his/her executors or administrators, or legatees or heirs, of his estate shall have the right to exercise such Options without regarding to any future vesting requirement in such Options; PROVIDED, HOWEVER, that in no event shall the Options be exercisable more than ten (10) years from the date they were granted. J. No Obligation to Exercise Option. -------------------------------- The granting of an Option shall impose no obligation upon the Participant to exercise such Option. K. Nonassignability. ---------------- Options shall not be transferable other than by will or by the laws of descent and distribution, and during a Participant's lifetime shall be exercisable only by such Participant. L. Effect of Change in Stock Subject to the Plan. --------------------------------------------- The aggregate number of shares of Stock available for Options under the Plan, the shares subject to any Option and the price per share shall all be proportionately adjusted for any increase or decrease in the number of issued shares of Stock subsequent to the effective date of the Plan resulting from: (i) a subdivision or consolidation of shares or any other capital adjustment, (ii) the payment of a stock dividend; or, (iii) other increase or decrease in such shares effected without receipt of consideration by the Company. If the Company shall be a party to any merger or consolidation, any Option shall pertain, apply, and relate to the securities to which a holder of the number of shares of Stock subject to the Option would have been entitled under the agreements governing the merger or consolidation. Upon dissolution or liquidation of the Company, all Options outstanding under the Plan shall terminate, PROVIDED, HOWEVER, that each Participant (and each other person entitled under SECTION I to exercise an Option) shall have the right, immediately prior to such dissolution or liquidation to exercise such Participant's Options in whole or in part. M. Amendment and Termination. ------------------------- 5 6 Any Options not granted as of the sixtieth (60th) business day following the fourth (4th) anniversary of the Signing Date shall be null and void. In the event of a change in control, as defined in Section G.5, this Stock Option Plan shall, subject to applicable state and federal law, terminate automatically, provided, however that unless prohibited by applicable state and federal law, in lieu of options not yet granted under the Plan to the Concord PCPs listed in Exhibit A who are employees of CCP as of the date of the change in control, the Company shall pay to each such Concord PCP who is an employee of CCP as of the date of the change in control an amount equal to One Million Dollars ($1,000,000) multiplied by a fraction, the numerator of which is the number of Options set forth opposite such Concord PCP's name in Exhibit A and the denominator of which is 24,847. The Board, by resolution, may terminate, amend, or revise the Plan with respect to any shares as to which Options have not been granted. The Board may alter, suspend or discontinue the Plan except that no action of the Board may materially increase the benefits accruing to Participants under the Plan, increase (other than as provided in SECTION L) the maximum number of shares permitted to be optioned under the Plan, or materially modify the requirements as to eligibility for participation in the Plan, unless such action of the Board shall be subject to approval or ratification by the shareholders of the Company. Neither the Board nor the Committee may, without the consent of the holder of an Option, alter or impair any Option previously granted under the Plan, except as authorized herein. Unless sooner terminated, the Plan shall remain in effect until December 31, 2000. Termination of the Plan shall not affect any Option previously granted. N. Agreement and Representation of Employee. ---------------------------------------- As a condition to the exercise of any portion of an Option, the Company may require the person exercising such Option to represent and warrant at the time of such exercise that any shares of Stock acquired at exercise are being acquired only for investment and without any present intention to sell or distribute such stock, if, in the opinion of counsel for the Company, such a representation is required under the Securities Act of 1933 or any other applicable law, regulation, or rule or any government agency; provided, however, that under existing regulations such a representation will not be required. Inability of the Company to obtain from any regulatory body or authority the approvals deemed by the Company's counsel to be necessary to the lawful issuance and sale of any shares of Stock shall relieve the Company of any liability in respect of the non-issuance or sale of such shares of Stock unless and until said approvals are obtained. O. Reservation of Shares of Stock. ------------------------------ The Company, during the term of this Plan, will at all times reserve and keep available, and will seek or obtain from any regulatory body having jurisdiction any requisite 6 7 authority necessary to issue and to sell, the number of shares of Stock that shall be sufficient to satisfy the requirements of this Plan. P. Registration of Options and Stock. --------------------------------- Inability of the Company to obtain from any regulatory body or authority the approvals deemed by the Company's counsel to be necessary to the lawful issuance and sale of any shares of Stock shall relieve the Company of any liability in respect of the non-issuance or sale of such shares of Stock unless and until said approvals are obtained; provided the Company shall use its best efforts to obtain any such approvals and specifically shall register with the SEC all Options (and Stock issuable thereunder) on Form S-8 or other applicable SEC forms, shall list such Stock with the New York Stock Exchange and shall maintain such registration and listing in effect for the duration of the Options. Q. Withholding of Additional Income Taxes -------------------------------------- Upon the exercise of an Option, the Company, in accordance with Section 3402 of the Code, may require the optionee to pay additional withholding taxes in respect of the amount that is considered compensation includable in such person's gross income. Alternatively, the Company, at its option, may issue shares of Stock net of the number of shares sufficient to satisfy the additional withholding taxes due. The Board in its discretion may condition the exercise of an Option on the purchaser's or recipient's payment of such additional withholding taxes. R. Governing Law, Construction --------------------------- The validity and construction of the Plan and the instruments evidencing Options shall be governed by the internal, substantive laws of the State of New Hampshire. In construing this Plan, the singular shall include the plural and the masculine gender shall include the feminine and neuter, unless the context otherwise requires. S. Effective Date of Plan ---------------------- The Plan shall be effective from the date that the Plan is approved by the Board. 7 8 EXHIBIT A PARTICIPANTS IN 1995 CONCORD AREA STOCK OPTION PLAN Name Number of Options ---- ----------------- Joel C. Berman, M.D. 2,380 Elizabeth A. Clardy, M.D. 1,600 Robert D. Gabrielli, M.D. 2,815 Francis E. Hayes, M.D. 2,380 Steven H. Kaitz, M.D. 2,380 Richard S. Nelson, M.D. 1,600 Carol A. Niegisch, M.D. 2,380 Robert W. Niegisch, M.D. 3,683 Eric F. Pollack, M.D. 2,380 Gary A. Sobelson, M.D. 3,249 8 9 EXHIBIT B HEALTHSOURCE, INC. STOCK OPTION This Stock Option is hereby granted by HEALTHSOURCE, INC., a New Hampshire corporation with an office at Two College Park Drive, Hooksett, New Hampshire (the "Company") to _______________, M.D. (the "Optionee") pursuant to the HEALTHSOURCE, INC. 1995 CONCORD AREA PHYSICIAN NON-QUALIFIED STOCK OPTION PLAN (the "Plan"), approved by the Company's Board of Directors on September __, 1995 in consideration of Optionee's agreement to accept employment with a wholly owned subsidiary of the Company concurrently with the closing referenced in Section 5 of this Agreement. 1. GRANT OF OPTION. --------------- The Company hereby grants on the date hereof (the "Option Date") the Optionee an option to purchase on the terms contained herein, a total of _____________ (____) shares of the Common Stock, $.10 par value, of the Company, at a price of _______________ Dollars and Cents ($_______) per share (the "Option Price"). This option shall become vested and exercisable after the second anniversary of the Option Date in accordance with the following schedule Anniversary of Option Date Number of Shares Vested -------------------------- ----------------------- 1996 ____0____ 1997 _________ 1998 _________ 1999 _________ 2000 _________ 2001 _________ 2001 _________ and must be exercised before the tenth anniversary of the Option Date, except as set forth in Paragraph 3, below. The Option granted hereunder is subject to the limitations set forth in Paragraph 4, below. 2. EXERCISE, PAYMENT FOR AND DELIVERY OF STOCK. ------------------------------------------- Each election to exercise this Option in whole or in part shall be made in accordance with the provisions of the Plan. Payment in full shall be made in accordance with Section G(2) of the Plan and no shares shall be issued and delivered until payment therefor has been made. The Optionee shall have none of the rights of a stockholder until shares are issued or delivered to him/her. 3. CHANGE OF CONTROL OF THE COMPANY. -------------------------------- 9 10 In the event that there is a change in control of the Company, or the sale of a majority of the stock or assets of Healthsource New Hampshire, Inc. or Community Choice Physicians, Inc. to a non-Company affiliated third party, all as defined in the Plan, (each a "change-of-control"), the Options granted hereunder shall become immediately vested and exercisable. 4. TERMS OF THE OPTION. ------------------- THIS OPTION IS SUBJECT TO AND GOVERNED BY ALL OF THE TERMS AND CONDITIONS OF THE PLAN. A COPY OF THE PLAN IS ATTACHED HERETO AS APPENDIX A AND IS INCORPORATED HEREIN BY REFERENCE. In particular, Optionee acknowledges and agrees that upon termination of employment with Community Choice Physicians (or other affiliates of the Company), any options granted under this Agreement, but not exercised are null, void and forfeited as of the termination date. IN WITNESS WHEREOF, Healthsource, Inc. has caused this Option to be executed by its duly authorized officer. Dated as of ----------------, ------ HEALTHSOURCE, INC. By: ------------------------------------ Norman C. Payson, M.D. President and Chief Executive Officer Duly Authorized The undersigned Optionee hereby accepts and agrees to the terms of the foregoing Option, as of the above date. By: -------------------------------- , M.D. ----------------------------- EX-5.1 3 OPINION OF SHEEHAN, PHINNEY, BASS & GREEN 1 EXHIBIT 5.1 [SHEEHAN PHINNEY BASS + GREEN LETTERHEAD] April 25, 1997 Healthsource, Inc. Two College Park Drive Hooksett, NH 03106 RE: 1995 CONCORD AREA PHYSICIAN NON-QUALIFIED STOCK OPTION PLAN Gentlemen: We have acted as your counsel in connection with the registration under the Securities Act of 1933 (the "Act") on Form S-8 regarding the Healthsource, Inc. 1995 Concord Area Physician Non-Qualified Stock Option Plan (the "Plan"), and 49,694 shares of Common Stock, $.10 par value per share (the "Shares"), of Healthsource, Inc. (the "Company"), a New Hampshire corporation, to be issued thereunder. In connection therewith, we have examined originals, or photostatic or certified copies, of all such corporate records of the Company and of all such agreements, communications and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies. Based upon the foregoing, and having regard for such legal considerations as we have deemed relevant, we are of the opinion that the Shares, when issued in accordance with the terms of the Plan and when the consideration therefor has been received by the Company, will be legally issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as an Exhibit to the above-referenced registration statement. Very truly yours, SHEEHAN PHINNEY BASS + GREEN, PROFESSIONAL ASSOCIATION By: /s/ Michael J. Drooff ------------------------------- Michael J. Drooff EX-23.1 4 CONSENT OF DELOITTE & TOUCHE, L.L.P. 1 Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Healthsource, Inc. on Form S-8 of our report dated February 26, 1997 (February 28, 1997 as to Note 15), appearing in the Annual Report on Form 10-K of Healthsource, Inc. for the year ended December 31, 1996. /s/ Deloitte & Touche LLP Boston, Massachusetts April 25, 1997 -----END PRIVACY-ENHANCED MESSAGE-----