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As filed with the Securities and Exchange Commission on June 5, 2000
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Laboratory Corporation of America Holdings
(Exact name of issuer as specified in its charter)
Delaware 13-3757370
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
358 South Main Street
Burlington, North Carolina 27215
(336) 229-1127
(Address of principal executive offices)
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Laboratory Corporation of America Holdings
2000 Stock Incentive Plan
(Full title of the plan)
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Bradford T. Smith
Executive Vice President, General Counsel, and Secretary
Laboratory Corporation of America Holdings
358 South Main Street
Burlington, North Carolina 27215
(Name and address of agent for service)
Agent for service's telephone number, including area code: (336) 229-1127
EXHIBIT 4.3
LABORATORY CORPORATION OF AMERICA HOLDINGS
2000 STOCK INCENTIVE PLAN
1. Purpose; Restrictions on Amount Available under this Plan.
This 2000 Stock Incentive Plan (this "Plan") is intended to encourage
stock ownership by employees, consultants, and non-employee directors of
Laboratory Corporation of America Holdings (the "Company") and employees and
consultants of Affiliate Corporations (as defined in Section 2(a) hereof), so
that they may acquire or increase their proprietary interest in the Company,
and to encourage such employees, consultants and non-employee directors to
remain in the employ and/or service of the Company and to put forth maximum
efforts for the success of the business of the Company. It is further intended
that options granted by the Committee pursuant to Section 6 of this Plan shall
constitute "incentive stock options" ("Incentive Stock Options") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended, and
the regulations issued thereunder (the "Code"), and options granted by the
Committee pursuant to Sections 7 and 8 of this Plan shall constitute
"nonqualified stock options" ("Nonqualified Stock Options"). Grants under this
Plan may consist of Incentive Stock Options, Nonqualified Stock Options
(collectively, "Options"), stock appreciation rights ("Rights"), which Rights
may be either granted in conjunction with Options ("Related Rights") or
unaccompanied by Options ("Free Standing Rights"), restricted stock awards
("Restricted Shares"), or performance awards ("Performance Awards"), as
hereinafter set forth.
2. Definitions.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "Affiliate Corporation" or "Affiliate" shall mean any
corporation, directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with the Company.
(b) "Award" shall mean an Option, a Right, Restricted Share, or
Performance Award granted hereunder.
(c) "Award Agreement" shall have the meaning set forth in Section 3
hereof.
(d) "Change in Control" shall mean circumstances under which Roche
Holding Ltd. or any corporation directly or indirectly, through one or
more intermediaries, controlling, controlled by, or under common control
with Roche Holding Ltd. ceases to maintain "beneficial ownership" (as
defined in Rule 13d-3 of the Exchange Act), individually or in the
aggregate, of securities of the Company representing five percent (5%) or
more of the combined voting power of the Company's then outstanding
securities.
(e) "Common Stock" shall mean shares of the Company's common stock,
par value $0.10 per share.
(f) "Covered Officer" as of a particular date shall mean (i) any
individual who, with respect to the previous taxable year of the Company,
was a "covered employee" of the Company within the meaning of Section
162(m) of the Internal Revenue Code; provided, however, that the term
"Covered Officer" shall not include any such individual who is designated
by the Committee, in its discretion, at the time of any Award or at any
subsequent time, as reasonably expected not to be such a "covered
employee" with respect to the current taxable year of the Company and (ii)
any individual who is designated by the Committee, in its discretion, at
the time of any Award or at any subsequent time, as reasonably expected to
be such a "covered employee" with respect to the current taxable year of
the Company or with respect to the taxable year of the Company in which
any applicable Award will be paid.
(g) "Disability" shall mean a Participant's inability to engage in
any substantial gainful activity by reason of medically determinable
physical or mental impairment that can be expected to result in death or
that has lasted or can be expected to last for a continuous period of not
less than twelve (12) months.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(i) "Fair Market Value" per share as of a particular date shall mean
(i) the closing sales price per share of Common Stock on a national
securities exchange for the last preceding date on which there was a sale
of such
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Common Stock on such exchange, or (ii) if the shares of Common Stock are
then traded on an over-the-counter market, the average of the closing bid
and asked prices for the shares of Common Stock in such over-the-market
for the last preceding date on which there was a sale of such Common Stock
in such market, or (iii) if the shares of Common Stock are not then listed
on a national securities exchange or traded in an over-the-counter market,
such value as the Committee in its discretion may determine.
(j) "Parent Corporation" shall mean any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if,
at the time of granting an Award, each of such corporations (other than
the Company) owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(k) "Participant" shall have the meaning set forth in Section 4
hereof.
(l) "Prior Plans" shall mean the Laboratory Corporation of America
Holdings Amended and Restated 1999 Stock Incentive Plan and the Laboratory
Corporation of America Holdings 1994 Stock Option Plan.
(m) "Retirement" shall mean a Participant's termination of employment
in accordance with the provisions of the Company's Employee Retirement
Plan at such Participant's Normal Retirement Date, as defined in such
plan.
(n) "Subsidiary Corporation" shall mean any corporation (other than
the Company) in an unbroken chain of corporations beginning with the
Company if, at the time of granting an option, each of such corporations
other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
(o) "Ten Percent Stockholder" shall mean a Participant who, at the
time an Incentive Stock Option is granted, owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of its Parent Corporation or Subsidiary
Corporations.
3. Administration.
This Plan shall be administered by a committee (the "Committee") appointed
by the Board of Directors of the Company (the "Board"), which shall be
comprised of two or more persons, each of whom shall qualify as a "Non-Employee
Director" as described in Rule 16b-3(b)(3)(i) promulgated under the Exchange
Act.
The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of this Plan, to administer this
Plan and to exercise all the powers and authorities either specifically granted
to it under this Plan or necessary or advisable in the administration of this
Plan, including, without limitation, the authority to grant Awards; to
designate Participants, other than as set forth in Section 8 hereof; to
determine the type or types of Awards to be granted to a Participant; to
determine which Options shall constitute Incentive Stock Options and which
Options shall constitute Nonqualified Stock Options; to determine which Rights
(if any) shall be granted in conjunction with Options; to determine the
purchase price of the shares of Common Stock covered by each Option (the
"Option Price"); to determine the persons to whom, and the time or times at
which, Awards shall be granted; to determine the number of shares to be covered
by each Award; to interpret this Plan; to prescribe, amend and rescind rules
and regulations relating to this Plan; to determine the terms and provisions of
the agreements (which need not be identical) entered into in connection with
Awards granted under this Plan (each an "Award Agreement"); and to make all
other determinations deemed necessary or advisable for the administration of
this Plan. The Committee may delegate to one or more of its members or to one
or more agents such administrative duties as may be deemed advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may employ
one or more persons to render advice with respect to any responsibility the
Committee or such person may have under this Plan.
No member of the Board of Directors or Committee shall be liable for any
action taken or determination made in good faith with respect to this Plan or
any Award granted hereunder.
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4. Eligibility.
Awards may be granted to key employees (including, without limitation,
officers and directors who are employees) and non-employee directors of the
Company or its present or future Affiliate Corporations. For purposes of the
foregoing, "employee" shall mean any employee, independent contractor,
consultant, advisor, or similar individual who is providing or who has agreed
to provide services to the Company or to any of its present or future Affiliate
Corporations. Notwithstanding any provision of this paragraph, Incentive Stock
Options shall be granted only to individuals who, on the date of such grant,
are employees of the Company or a Parent Corporation or a Subsidiary
Corporation. In determining the persons to whom Awards shall be granted and the
number of shares to be covered by each Award, the Committee shall take into
account the duties of the respective persons, their present and potential
contributions to the success of the Company and such other factors as the
Committee shall deem relevant in connection with accomplishing the purpose of
this Plan. A person to whom an Award has been granted hereunder is sometimes
referred to herein as a "Participant" or "Optionee."
A Participant shall be eligible to receive more than one grant of an Award
during the term of this Plan, but only on the terms and subject to the
restrictions hereinafter set forth.
5. Stock.
The stock subject to Awards hereunder shall be shares of Common Stock.
Such shares may, in whole or in part, be authorized but unissued shares or
shares that shall have been or that may be reacquired by the Company. The
aggregate number of shares of Common Stock as to which Awards may be granted
from time to time under this Plan shall not exceed 1.7 million, plus any shares
which remain available for grants of awards under the Prior Plans, of which the
number of shares of Common Stock as to which Restricted Shares and/or
Performance Awards may be granted from time to time under this Plan shall not
exceed 750,000. No person may be granted Options or Rights under this Plan
representing an aggregate of more than 150,000 shares of Common Stock in any
year. The limitations established by the preceding three sentences shall be
subject to adjustment as provided in Sections 14 and 18 hereof.
To the extent that (1) any Award granted under the Plan or the Prior Plans
expires, is terminated or forfeited without being exercised, settled or with
respect to Restricted Shares, vested, (2) any Option granted under the Plan or
the Prior Plans is surrendered on exercise of a Right for cash or the issuance
of fewer shares of Common Stock than issuable under such surrendered Option, or
(3) any Free Standing Right granted under the Plan or the Prior Plans expires
or is terminated without being exercised, the shares of Common Stock issuable
thereunder, less such shares issued, shall become available for grants of
Awards.
6. Incentive Stock Options.
Options granted pursuant to this Section 6 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in
Sections 5 and 9 hereof:
(a) Value of Shares. The aggregate Fair Market Value (determined as
of the date the Incentive Stock Option is granted) of the shares of Common
Stock with respect to which Options granted under this Plan and all other
option plans of the Company, any Parent Corporation and any Subsidiary
Corporation become exercisable for the first time by a Participant during
any calendar year shall not exceed $100,000.
(b) Ten Percent Stockholders. In the case of an Incentive Stock
Option granted to a Ten Percent Stockholder, (i) the Option Price shall
not be less than one hundred ten percent (110%) of the Fair Market Value
of a share of Common Stock of the Company on the date of grant of such
Incentive Stock Option, and (ii) the exercise period shall not exceed five
(5) years from the date of grant of such Incentive Stock Option.
7. Employee Nonqualified Stock Options.
Options granted pursuant to this Section 7 are intended to constitute
Nonqualified Stock Options and shall be subject only to the general terms and
conditions specified in Sections 5 and 9 hereof.
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8. Director Nonqualified Stock Options.
(a) Each non-employee director shall be granted an Option to purchase
that number of shares of Common Stock having a Fair Market Value
equal to $65,000 as of the date of each annual meeting of the
stockholders of the Company (the "Annual Grant Amount") following the
meeting at which the Plan is approved at which such individual is
elected or reelected to the office of director (the "Meeting Grant
Date") with each such grant effective as of each Meeting Grant Date.
In addition, notwithstanding the foregoing, (i) options will be
granted to directors elected at the meeting at which the Plan is
approved for a number of shares having a Fair Market Value equal to
$65,000 as of the Effective Date to be effective as of the Effective
Date and (ii) with respect to any director who is elected or
nominated to become director other than in connection with an annual
meeting of the stockholders of the Company, such director shall be
granted an option, to be effective as of the date of his or her
election or appointment, in an amount equal to the product of the
Annual Grant Amount and a fraction the numerator which is the number
of months from the date of such election or appointment until the
expected date of the next annual meeting and the denominator of which
is twelve. Notwithstanding the foregoing, the minimum and maximum
number of shares which may be subject to an Option in any year shall
be 1,000 and 3,500 respectively. Options granted pursuant to this
Section 8 are intended to constitute Nonqualified Stock Options and
shall be subject, to the extent applicable, to the general terms and
conditions specified in Sections 5 and 9 hereof.
(b) No fractional shares shall be issued under this provision. Any
fractional share that would otherwise be granted in connection with
the Annual Grant Amount shall be rounded down to the nearest whole
share, with the remainder being paid in cash.
(c) With respect to the Options granted pursuant to this Section 8,
neither the Board nor the Committee shall have discretion with
respect to the selection of directors to receive Options, the number
of shares subject to such Options, the purchase price thereunder or
the timing of the grant of Options under this Section 8.
(d) Unless otherwise provided in an award agreement, the Options granted
pursuant to this Section 8 shall vest in equal one-third installments
on each of the three anniversaries following the grant date.
9. Terms and Conditions of Options.
Each Option granted pursuant to this Plan shall be evidenced by a written
Award Agreement between the Company and the Participant, which agreement shall
comply with and be subject to the following terms and conditions:
(a) Number of Shares. Each Award Agreement shall state the number of
shares of Common Stock to which the Option relates.
(b) Type of Option. Each Award agreement shall specifically identify
the portion, if any, of the Option that constitutes an Incentive Stock
Option and the portion, if any, which constitutes a Nonqualified Stock
Option.
(c) Option Price. Each Award Agreement shall state the Option Price
per share of Common Stock, which shall be not less than one hundred
percent (100%) of the Fair Market Value of a share of Common Stock of the
Company on the date of grant of the Option and which, in the case of
Incentive Stock Options, shall be further subject to the limitation
described in Section 6(b) hereof. The Option Price shall be subject to
adjustment as provided in Section 14 hereof. The date on which the
Committee adopts a resolution expressly granting an Option shall be
considered the day on which such Option is granted.
(d) Medium And Time of Payment. The Option Price shall be paid or
satisfied in full, at the time of exercise, in cash or in shares of Common
Stock owned by the Participant for at least six months (which are not the
subject of any pledge or other security interest) having a Fair Market
Value equal to such Option Price or in a combination of cash and such
shares, and may be effected in whole or in part, at the discretion of the
Committee (i) with monies received from the Company at the time of
exercise as a compensatory cash payment, or (ii) with monies borrowed from
the Company pursuant to repayment terms and conditions as shall be
determined from time to time by the Committee, in its discretion
separately with respect to each exercise of Options and each Participant;
provided, however, that each such method and time for payment and each
such borrowing and terms and
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conditions of security, if any, and repayment shall be permitted by and be
in compliance with applicable law.
(e) Term and Exercise of Options. Options shall be exercisable over
the exercise period as and at the times and upon the conditions that the
Committee may determine, as reflected in the Award Agreement; provided,
however, that the Committee shall have the authority to accelerate the
exercisability of any outstanding Option at such time and under such
circumstances as it, in its sole discretion, deems appropriate. The
exercise period shall be determined by the Committee; provided, however,
that in the case of any Incentive Stock Option, such exercise period shall
not exceed ten (10) years from the date of grant of such Incentive Stock
Option and such exercise period shall be further limited in circumstances
described in Section 6(b) hereof. The exercise period shall be subject to
earlier termination as provided in Section 9(f) and 9(g) hereof. An Option
may be exercised as to any or all full shares of Common Stock as to which
the Option has become exercisable, by giving written notice of such
exercise to the Committee; provided, however, that an Option may not be
exercised at any one time as to fewer than one hundred (100) shares (or
such number of shares as to which the Option is then exercisable if such
number of shares is less than one hundred (100)).
(f) Termination of Employment. Except as provided in this Section
9(f) and in Section 9(g) hereof, an Option may not be exercised unless the
Participant is then in the employ or service of (1) the Company, (2) an
Affiliate Corporation or (3) a corporation issuing or assuming the Option
in a transaction to which Section 424 of the Code applies or a parent
corporation or subsidiary corporation of the corporation described in this
Clause 3, and unless the Participant has remained continuously so employed
since the date of grant of the Option. In the event that the employment or
service of a Participant shall terminate (other than by reason of death,
Disability or Retirement), all Options of such Participant that are
exercisable at the time of such termination may, unless earlier terminated
in accordance with their terms, be exercised within three (3) months after
such termination. Nothing in this Plan or in any Option or Right granted
pursuant hereto shall confer upon an individual any right to continue in
the employ or service of the Company or any of its Affiliate Corporations
or interfere in any way with the right of the Company or any such
Affiliate Corporation to terminate such employment or service at any time.
(g) Acceleration of Benefits upon Death, Disability or Retirement of
Participant or a Change in Control. If (i) a Participant shall die while
employed by the Company or an Affiliate Corporation thereof, (ii) a
Participant shall die within three (3) months after the termination of
such Participant's employment, (iii) the Participant's employment shall
terminate by reason of Disability or Retirement, or (iv) there is a Change
in Control, then in any such case all Options theretofore granted to such
Participant (whether or not then exercisable) may, unless earlier
terminated or expired in accordance with their terms, be exercised by the
Participant or by the Participant's estate or by a person who acquired the
right to exercise such Option by bequest or inheritance or otherwise by
reason of the death or Disability of the Participant, at any time within
one year after the date of death, Disability or Retirement of the
Participant or the Change in Control.
(h) Nontransferability of Options. Except as otherwise provided in an
Award Agreement, Options granted under this Plan shall not be transferable
otherwise than by will or by the laws of descent and distribution, and
Options may be exercised, during the lifetime of the Participant, only by
the Participant or by his guardian or legal representative.
(i) Rights as a Stockholder. A Participant who is the holder of an
Option or a transferee of an Option shall have no rights as a stockholder
with respect to any shares covered by the Option until the date of the
issuance of a stock certificate to him or her for such shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether
in cash, securities or other property) or distribution of other rights for
which the record date is prior to the date such stock certificate is
issued, except as provided in Section 14 hereof.
(j) Other Provisions. The Award Agreements authorized under this Plan
shall contain such other provisions, including, without limitation, (i)
the granting of Rights, (ii) the imposition of restrictions upon the
exercise of an Award, and (iii) in the case of an Incentive Stock Option,
the inclusion of any condition not inconsistent with such Option
qualifying as an Incentive Stock Option, as the Committee shall deem
advisable.
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10. Stock Appreciation Rights.
(a) Grant and Exercise. In the case of a Nonqualified Stock Option,
Related Rights may be granted either at or after the time of the grant of such
Option. In the case of an Incentive Stock Option, related Rights may be granted
only at the time of the grant of the Incentive Stock Option.
A Related Right or applicable portion thereof granted with respect to a
given Option shall terminate and no longer be exercisable upon the termination
or exercise of the related Option, except that, unless otherwise provided by
the Committee at the time of grant, a Related Right granted with respect to
less than the full number of shares covered by a related Option shall only be
reduced if and to the extent that the number of shares covered by the exercise
or termination of the related Option exceeds the number of shares not covered
by the Right.
A Related Right may be exercised by a Participant, in accordance with
paragraph (b) of this Section 10, by surrendering the applicable portion of the
related Option. Upon such exercise and surrender, the Participant shall be
entitled to receive an amount determined in the manner prescribed in paragraph
(b) of this Section 10. Options, which have been so surrendered, in whole or in
part, shall no longer be exercisable to the extent the Related Rights have been
exercised.
(b) Terms and Conditions. Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee and as evidenced by a written
Award Agreement between the Company and the Participant, including the
following:
(1) Related Rights shall be exercisable only at such time or times
and to the extent that the Options to which they relate shall be
exercisable in accordance with the provisions of Section 6, 7, 9 and this
Section 10 of this Plan.
(2) Upon the exercise of a Related Right, a Participant shall be
entitled to receive up to, but not more than, an amount in cash or shares
of Common Stock equal in value to the excess of the Fair Market Value of
one (1) share of Common Stock over the option price per share specified in
the related Option multiplied by the number of shares in respect of which
the Related Right shall have been exercised, with the Committee having the
right to determine the form of payment.
(3) Related Rights shall be transferable only when and to the extent
that the underlying Option would be transferable under paragraph (h) of
Section 9 of this Plan.
(4) A Related Right granted in connection with an Incentive Stock
Option may be exercised only if and when the market price of the Common
Stock subject to the Incentive Stock Option exceeds the exercise price of
such Option.
(5) Free Standing Rights shall be exercisable at such time or times
and subject to such terms and conditions as shall be determined by the
Committee at or after grant.
(6) The term of each Free Standing Right shall be fixed by the
Committee, but no Free Standing Right shall be exercisable more than ten
(10) years after the date such right is granted.
(7) Upon the exercise of a Free Standing Right, a Participant shall
be entitled to receive up to, but not more than, an amount in cash or
shares of Common Stock equal in value to the excess of the Fair Market
Value of one share of Common Stock over the price per share specified in
the Free Standing Right (which shall be no less than one hundred percent
(100%) of the Fair Market Value of the Common Stock on the date of grant)
multiplied by the number of shares in respect of which the Right is being
exercised, with the Committee having the right to determine the form of
payment.
(8) No Free Standing Right shall be transferable by the Participant
otherwise than by will or by the laws of descent and distribution, and all
such rights shall be exercisable, during the Participant's lifetime, only
by the Participant or his legal guardian or legal representative.
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(9) In the event of the termination of employment of a recipient of a
Free Standing Right, such right shall be exercisable to the same extent
that an Option would have been exercisable in the event of the termination
of employment of a Participant.
11. Restricted Shares.
(a) Grant. Subject to the provisions of this Plan, the Committee shall
have sole and complete authority to determine the Participants to whom
Restricted Shares shall be granted, the number of Restricted Shares to be
granted to each Participant, the duration of the period during which, and the
conditions under which, the Restricted Shares may be forfeited to the Company,
and the other terms and conditions of such Awards (including whether or not
such Restricted Shares shall qualify as Performance Awards).
(b) Transfer Restrictions. Restricted Shares may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as otherwise provided in
an Award Agreement. Certificates issued in respect of Restricted Shares shall
be registered in the name of the Participant and deposited by such Participant,
together with a stock power endorsed in blank, with the Company. Upon the lapse
of the restrictions applicable to such Restricted Shares, the Company shall
deliver such certificates to the Participant or the Participant's legal
representative.
(c) Dividends and Distributions. Dividends and other distributions paid on
or in respect of Restricted Shares, if any, may be paid directly to the
Participant, or may be reinvested in additional Restricted Shares, as
determined by the Committee in its sole discretion.
(d) Acceleration of Benefits upon Death, Disability or Retirement of
Participant or a Change in Control. If (i) a Participant shall die while
employed by the Company or an Affiliate Corporation thereof, (ii) the
Participant's employment shall terminate by reason of Disability or Retirement,
or (iii) there is a Change in Control, then in any such case all Restricted
Shares theretofore granted to such Participant shall become immediately vested
and nonforfeitable.
12. Performance Awards.
(a) Grant. Subject to the provisions of this Plan, the Committee shall
have sole and complete authority to determine the Participants to whom
Performance Awards shall be granted, the number of shares of Common Stock
subject to Performance Awards, the duration of the period during which, and the
conditions under which, the Performance Awards may be forfeited to the Company,
and the other terms and conditions of such Awards. Performance Awards may be
(i) denominated in cash or Shares, (ii) valued, as determined by the Committee,
in accordance with the achievement of such performance goals during such
performance periods as the Committee shall establish, and (iii) payable at such
time and in such form as the Committee shall determine.
(b) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award and the amount and kind of any
payment or transfer to be made pursuant to any Performance Award. Unless
otherwise provided in an Award Agreement, Performance Awards may not be sold,
assigned, transferred, pledged or otherwise encumbered.
(c) Payment of Performance Awards. Performance Awards may be paid in a
lump sum or in installments following the close of the performance period or,
in accordance with procedures established by the Committee, on a deferred
basis.
13. Provisions Applicable to Covered Officers.
To the extent the Committee determines, all performance-based Restricted
Shares and Performance Awards granted to Covered Officers shall be subject to
the terms and provisions of this Section 13.
(a) Performance goals shall be limited to one or more of the following
Company, subsidiary, operating unit or division financial performance measures:
(i) earnings before interest, taxes, depreciation and/or
amortization
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(ii) operating income or profit
(iii) return on equity, assets, capital, capital employed, or
investment
(iv) after tax operating income
(v) net income
(vi) earnings or book value per share
(vii) cash flow(s)
(viii) total sales or revenues or sales or revenues per employee
(ix) stock price or total shareholder return
(x) dividends
(xi) strategic business objectives, consisting of one or more
objectives based on meeting specified cost targets, business
expansion goals, and goals relating to acquisitions or
divestitures
or any combination thereof. Each goal may be expressed on an absolute and/or
relative basis, may be based on or otherwise employ comparisons based on
internal targets, the past performance of the Company and/or the past or
current performance of other companies, and in the case of earnings-based
measures, may use or employ comparisons relating to capital, shareholders'
equity and/or shares outstanding, or to assets or net assets.
(b) The maximum annual number of shares in respect of which
performance-based Restricted Shares and Performance Awards may be granted under
the Plan is 100,000 and the maximum annual amount of any such Award settled in
cash is $5 million.
(c) To the extent necessary to comply with Section 162(m), no later than
90 days following the commencement of each performance period (or such other
time as may be required or permitted by Section 162(m) of the Code), the
Committee shall, in writing, (A) select the performance goal or goals
applicable to the performance period, (B) establish the various targets and
bonus amounts which may be earned for such performance period and (C) specify
the relationship between performance goals and targets and the amounts to be
earned by each Covered Officer for such performance period. Following the
completion of each performance period, the Committee shall certify in writing
whether the applicable performance targets have been achieved and the amounts,
if any, payable to Covered Officers for such performance period. In determining
the amount earned for a given performance period, subject to any applicable
Award Agreement, the Committee shall have the right to reduce (but not
increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the performance period.
14. Effect of Certain Changes.
(a) If there is any change in the number of outstanding shares of Common
Stock by reason of any stock dividend, stock split, recapitalization,
combination, exchange of shares, merger, consolidation, liquidation, split-up,
spin-off or other similar change in capitalization, any distribution to
shareholders, including a rights offering, other than cash dividends, or any
like change, then the number of shares of Common Stock available for Awards,
the maximum number of shares of Common Stock that may be subject to Awards, the
number of such shares of Common Stock covered by outstanding Awards, and the
price per share of Options or the applicable market value of Rights, shall be
proportionately adjusted by the Committee to reflect such change or
distribution; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated.
(b) In the event of a change in the Common Stock as presently constituted,
which is limited to a change of all of its authorized shares with par value
into the same number of shares with a different par value or without par value,
the shares resulting from any such change shall be deemed to be Common Stock
within the meaning of this Plan.
(c) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive,
provided that each Incentive Stock Option granted pursuant to this Plan shall
not be adjusted in a manner that causes such option to fail to continue to
qualify as an Incentive Stock Option within the meaning of Section 422 of Code.
15
15. Agreement by Participant Regarding Withholding Taxes.
If the Committee shall so require, as a condition of grant, exercise, or
settlement or otherwise, each Participant shall agree that:
(a) no later than the date a Participant recognizes taxable income in
connection with an Award granted hereunder in connection with the exercise
or settlement of such Award or otherwise, the Participant will pay to the
Company or make arrangements satisfactory to the Committee regarding
payment of any federal, state or local taxes of any kind required by law
to be withheld upon the exercise or settlement of such Award (any such
tax, a "Withholding Tax"); and
(b) the Company shall, to the extent permitted or required by law,
have the right to deduct any Withholding Tax from any payment of any kind
otherwise due to the Participant.
16. Gross-Up for Excise Tax.
An Award Agreement may provide that in the event that a Participant
becomes entitled by reason of a Change of Control to the accelerated vesting of
an Award, if such Participant will be subject to excise tax (the "Excise Tax")
under Section 4999 of the Code, the Company shall pay to such Participant as
additional compensation an amount (the "Gross-Up Payment") which, after payment
by such Participant of all taxes (including any federal, state and local income
tax and excise tax upon the payment provided for by this Section 16) allows
Participant to retain an amount of the Gross-Up Payment equal to the Excise
Tax. For purposes of determining whether a Participant will be subject to the
Excise Tax and the amount of such Excise Tax, (i) any other payments or
benefits received or to be received by such Participant in connection with a
Change in Control of the Company or the Participant's termination of employment
(whether pursuant to the terms of the Award Agreement or any other plan,
arrangement or agreement with the Company, any entity whose actions result in a
Change in Control of the Company or any entity affiliated with the Company or
such entity) shall be treated as "parachute payments" within the meaning of
Section 280G(b)(2) of the Code, and all "excess parachute payments" within the
meaning of Section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Company's
independent auditors and reasonably acceptable to the Participant such other
payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, or such
excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered, within the meaning of Section
280G(b)(4)(B) of the Code, or are otherwise not subject to the Excise Tax, (ii)
the amount of payments or benefits treated as subject to the Excise Tax shall
be equal to the lesser of (A) the total amount of payments or benefits
conferred on such Participant by reason of the Change of Control or (B) the
amount of excess parachute payments within the meaning of Section 280G(b)(1) of
the Code (after applying clause (i), above), and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be determined by the
Company's independent auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Participant shall be deemed to pay federal income taxes
at the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rate of taxation in the state and locality of the
Participant's residence on the date on which the Excise Tax is incurred, net of
the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account
hereunder, the Participant shall repay to the Company, at the time that the
amount of such reduction in Excise Tax is finally determined, the portion of
the Gross-Up Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and local
income tax deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest, penalties or
additions payable by the Participant with respect to such excess) at the time
that the amount of such excess finally is determined. The Participant and the
Company each shall reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax.
16
17. Termination and Amendment.
Unless terminated by action of the Board of Directors or the Committee, no
Awards may be granted under this Plan after May 4, 2010. This Plan may be
amended or terminated at any time by the Committee, except that no amendment
may be made without shareholder approval if the Committee determines that such
approval is necessary to comply with any tax or regulatory requirement,
including any approval requirement which is a prerequisite for exemptive relief
from Section 16 of the Exchange Act, for which or with which the Committee
determines that it is desirable to qualify or comply. The Committee may amend
the terms of any Award Agreement and any Award granted, retroactively or
prospectively, but no amendment may adversely affect any vested Award without
the holder's consent.
18. Effectiveness; Approval of Stockholders.
This Plan shall take effect as of May 4, 2000 (the "Effective Date"),
subject to the approval of the holders of the majority of the voting shares of
the Company at the Company's 2000 annual meeting of Stockholders (the "2000
Annual Meeting"). This Plan gives effect to the amendment of the Company's
Certificate of Incorporation to effect a one-for-ten reverse stock split of the
Common Stock (the "Reverse Stock Split"). If such Reverse Stock Split is not
approved by the holders of the majority of the voting shares of the Company,
this Plan will be restated so that the number of shares of Common Stock
authorized for issuance and individual grants set forth herein, including but
not limited to Sections 5, 8, and 13 shall be adjusted so that the limitations
set forth therein shall be multiplied by ten.
19. Effect of Headings.
The section and subsection headings contained herein are for convenience
only and shall not affect the construction hereof.
20. Governing Law
The validity, construction and effect of the Plan shall be determined in
accordance with the laws of the State of Delaware.
17
EXHIBIT 5
June 5, 2000
Laboratory Corporation of America Holdings
358 South Main Street
Burlington, North Carolina 27215
Ladies and Gentlemen:
I am an Executive Vice President, the General Counsel, and the Secretary of
Laboratory Corporation of America Holdings, and I offer this opinion in
connection with the filing of a Registration Statement (the "Registration
Statement") on Form S-8 under the Securities Act of 1933, as amended, relating
to 1.7 million shares of common stock, par value $0.10 per share (the "Common
Stock"), deliverable in accordance with the Laboratory Corporation of America
Holdings 2000 Stock Incentive Plan as referred to in such Form S-8 (the
"Plan").
I have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments relating to the adoption and amendment of the
Plan as I have deemed necessary or advisable for the purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that the Common Stock
deliverable pursuant to the Plan, when delivered in accordance with the Plan
will be duly authorized, validly issued, fully paid and nonassessable.
I consent to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Very truly yours,
/s/ Bradford T. Smith, Esq.
Executive Vice President,
General Counsel and Secretary
18
EXHIBIT 23.1
[PricewaterhouseCoopers LLP]
Consent of Independent Accountants
To the Board of Directors
Laboratory Corporation of America Holdings:
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 (Laboratory Corporation of America Holdings 2000 Stock
Incentive Plan) of our report, dated February 12, 2000 relating to the financial
statements and financial statement schedule, which appears in Laboratory
Corporation of America Holdings and its subsidiaries' Annual Report on Form 10-K
for the year ended December 31, 1999.
/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina
June 5, 2000
19
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity or
capacities as an officer or director or both of Laboratory Corporation of
America Holdings does hereby constitute and appoint Bradford T. Smith, the true
and lawful attorney and agent of the undersigned, each with power of
substitution, to do any and all acts and things for and on behalf of the
undersigned and in the name of the undersigned and in the capacity or
capacities of the undersigned as aforesaid and to execute any and all
instruments for and on behalf of the undersigned and in the name of the
undersigned, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically but without limitation, power and authority
to sign for the undersigned in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and the undersigned
does hereby ratify and confirm all that the said attorneys and agents, or their
substitute or substitutes, or either of them, shall do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 30th day of May 2000.
/s/ Thomas P. Mac Mahon
-----------------------
THOMAS P. MAC MAHON
20
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity or
capacities as an officer or director or both of Laboratory Corporation of
America Holdings does hereby constitute and appoint Bradford T. Smith, the true
and lawful attorney and agent of the undersigned, each with power of
substitution, to do any and all acts and things for and on behalf of the
undersigned and in the name of the undersigned and in the capacity or
capacities of the undersigned as aforesaid and to execute any and all
instruments for and on behalf of the undersigned and in the name of the
undersigned, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically but without limitation, power and authority
to sign for the undersigned in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and the undersigned
does hereby ratify and confirm all that the said attorneys and agents, or their
substitute or substitutes, or either of them, shall do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 30th day of May 2000.
/s/ Wesley R. Elingburg
-----------------------
WESLEY R. ELINGBURG
21
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity or
capacities as an officer or director or both of Laboratory Corporation of
America Holdings does hereby constitute and appoint Bradford T. Smith, the true
and lawful attorney and agent of the undersigned, each with power of
substitution, to do any and all acts and things for and on behalf of the
undersigned and in the name of the undersigned and in the capacity or
capacities of the undersigned as aforesaid and to execute any and all
instruments for and on behalf of the undersigned and in the name of the
undersigned, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically but without limitation, power and authority
to sign for the undersigned in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and the undersigned
does hereby ratify and confirm all that the said attorneys and agents, or their
substitute or substitutes, or either of them, shall do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 30th day of May 2000.
/s/ Jean-Luc Belingard
----------------------
JEAN-LUC BELINGARD
22
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity or
capacities as an officer or director or both of Laboratory Corporation of
America Holdings does hereby constitute and appoint Bradford T. Smith, the true
and lawful attorney and agent of the undersigned, each with power of
substitution, to do any and all acts and things for and on behalf of the
undersigned and in the name of the undersigned and in the capacity or
capacities of the undersigned as aforesaid and to execute any and all
instruments for and on behalf of the undersigned and in the name of the
undersigned, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically but without limitation, power and authority
to sign for the undersigned in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and the undersigned
does hereby ratify and confirm all that the said attorneys and agents, or their
substitute or substitutes, or either of them, shall do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 30th day of May 2000.
/s/ Wendy E. Lane
-----------------
WENDY E. LANE
23
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity or
capacities as an officer or director or both of Laboratory Corporation of
America Holdings does hereby constitute and appoint Bradford T. Smith, the true
and lawful attorney and agent of the undersigned, each with power of
substitution, to do any and all acts and things for and on behalf of the
undersigned and in the name of the undersigned and in the capacity or
capacities of the undersigned as aforesaid and to execute any and all
instruments for and on behalf of the undersigned and in the name of the
undersigned, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically but without limitation, power and authority
to sign for the undersigned in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and the undersigned
does hereby ratify and confirm all that the said attorneys and agents, or their
substitute or substitutes, or either of them, shall do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 30th day of May 2000.
/s/ Robert E. Mittelstaedt, Jr.
-------------------------------
ROBERT E. MITTELSTAEDT, JR.
24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity or
capacities as an officer or director or both of Laboratory Corporation of
America Holdings does hereby constitute and appoint Bradford T. Smith, the true
and lawful attorney and agent of the undersigned, each with power of
substitution, to do any and all acts and things for and on behalf of the
undersigned and in the name of the undersigned and in the capacity or
capacities of the undersigned as aforesaid and to execute any and all
instruments for and on behalf of the undersigned and in the name of the
undersigned, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically but without limitation, power and authority
to sign for the undersigned in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and the undersigned
does hereby ratify and confirm all that the said attorneys and agents, or their
substitute or substitutes, or either of them, shall do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 30th day of May 2000.
/s/ James B. Powell, M.D.
-------------------------
JAMES B. POWELL, M.D.
25
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity or
capacities as an officer or director or both of Laboratory Corporation of
America Holdings does hereby constitute and appoint Bradford T. Smith, the true
and lawful attorney and agent of the undersigned, each with power of
substitution, to do any and all acts and things for and on behalf of the
undersigned and in the name of the undersigned and in the capacity or
capacities of the undersigned as aforesaid and to execute any and all
instruments for and on behalf of the undersigned and in the name of the
undersigned, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically but without limitation, power and authority
to sign for the undersigned in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and the undersigned
does hereby ratify and confirm all that the said attorneys and agents, or their
substitute or substitutes, or either of them, shall do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 30th day of May 2000.
/s/ David B. Skinner, M.D.
--------------------------
DAVID B. SKINNER, M.D.
26
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity or
capacities as an officer or director or both of Laboratory Corporation of
America Holdings does hereby constitute and appoint Bradford T. Smith, the true
and lawful attorney and agent of the undersigned, each with power of
substitution, to do any and all acts and things for and on behalf of the
undersigned and in the name of the undersigned and in the capacity or
capacities of the undersigned as aforesaid and to execute any and all
instruments for and on behalf of the undersigned and in the name of the
undersigned, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically but without limitation, power and authority
to sign for the undersigned in the capacities indicated below, any and all
amendments (including post-effective amendments) hereto; and the undersigned
does hereby ratify and confirm all that the said attorneys and agents, or their
substitute or substitutes, or either of them, shall do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 30th day of May 2000.
/s/ Andrew G. Wallace, M.D.
---------------------------
ANDREW G. WALLACE, M.D.
27