Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
MIM Corporation
(Exact name of registrant as specified in its charter)
Delaware 05-0489664
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
100 Clearbrook Road, Elmsford, New York 10523
(Address of Principal Executive Offices) (Zip Code)
AMENDED AND RESTATED 1996 STOCK INCENTIVE PLAN
AMENDED AND RESTATED 1996 NON-EMPLOYEE DIRECTORS STOCK INCENTIVE PLAN
(Full Title of the Plan)
Barry A. Posner, Vice President and General Counsel
MIM Corporation, 100 Clearbrook Road, Elmsford, New York 10523
(914) 460-1600
(Name, address and telephone number, including area code, of agent for service)
Approximate date of commencement of the proposed sale to the public:
From time to time after the Registration Statement becomes effective.
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount Offering Aggregate Registration
to be Registered to be Registered Price Per Share Offering Price Fee
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Common Stock,
$0.0001 par value............ 2,675,000 shares $2.52(1) $2,584,134(1) $783(1)
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(1) Estimated in accordance with Rule 457(h) and Rule 457(c) solely for the
purpose of calculating the registration fee based on the registration
hereunder of an additional 1,025,450 shares of Common Stock under the two
separate Plans at the average of the high and low sales prices of the
Common Stock reported on the Nasdaq National Market Tier on May 20, 1999, a
date within 5 business days of the filing of this Registration Statement.
Pursuant to Instruction E of Form S-8, the Company has not paid a
registration fee with respect to an aggregate of 3,496,053 (of which
1,649,550 remained subject to grant or exercise under the Plans as of May
17, 1999) shares of Common Stock for which the Company previously paid a
registration fee under a Registration Statement on Form S-8 filed and
effective on August 20, 1997 assigned a Registration No. of 333-33905. See
"Explanatory Note." Pursuant to Rule 416(b), this Registration Statement
shall also be deemed to register an indeterminate amount of additional
shares of Common Stock as may be issued under the Plans in the event of
certain events specified in the Plans.
EXPLANATORY NOTE
MIM Corporation, a Delaware corporation (the "Company"), adopted the MIM
Corporation 1996 Stock Incentive Plan (the "Employee Plan") and the MIM
Corporation 1996 Non-Employee Directors Stock Incentive Plan (the "Directors
Plan") (collectively, the "Plans") in May 1996. The shares of common stock,
$0.0001 par value per share, of the Company (the "Common Stock"), reserved for
issuance upon the exercise of options awarded pursuant to the Plans were
registered under the Securities Act of 1933, as amended (the "Act"), pursuant to
a Registration Statement on Form S-8 (Reg. No. 333-33905) filed and effective on
August 20, 1997 (the "Initial Registration Statement").
In addition, the Initial Registration Statement and the reoffer prospectus
included therein were intended to register for reoffer and/or resale shares of
Common Stock that would be acquired in the future under the Plans by persons who
may be considered affiliates of the Company as defined under Rule 405 of the
Act.
Effective December 1, 1998, the Company amended and restated the Employee
Plan (as so amended and restated, the "Amended and Restated Employee Plan") in
order to add restricted stock as securities subject to grant by the Company to
employees under the Amended and Restated Employee Plan, to make available under
the Amended and Restated Employee Plan an additional 825,450 shares of Common
Stock and to make certain other technical changes to the Employee Plan.
Effective March 1, 1999, the Company amended and restated the Directors Plan (as
so amended and restated, the "Amended and Restated Directors Plan") to make
available under the Amended and Restated Directors Plan an additional 200,000
shares of Common Stock. The addition of shares of Common Stock under each of the
Plans is subject to stockholder approval at the Company's 1999 Annual Meeting of
Stockholders.
This Registration Statement on Form S-8 (this "Registration Statement") is
intended to register the following securities for issuance by the Company:
1. 1,263,059 shares and 100,000 shares of Common Stock that may be
issued by the Company pursuant to the exercise of outstanding options
previously awarded under the Employee Plan and the Directors Plan,
respectively; and
2. 1,086,941 (of which 286,491 remained subject to grant under the
Employee Plan prior to its amendment and restatement) shares and 200,000
shares of Common Stock, respectively, that may be issued by the Company
pursuant to (a) the exercise of options and/or the grant of restricted
shares, in each case, that may be awarded by the Company under the Amended
and Restated Employee Plan and (b) the exercise of options that may be
awarded by the Company under the Amended and Restated Directors Plan.
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In accordance with Instruction C.1(a) of Form S-8, this Registration
Statement and the reoffer prospectus included herein also registers for reoffer
and/or resale shares of Common Stock that may be acquired in the future under
the Plans through exercise of options and/or grants of restricted shares by
persons who may be considered affiliates of the Company as defined under Rule
405 of the Act. In addition, in accordance with General Instruction C.1(b) to
Form S-8, this Registration Statement and the reoffer prospectus included herein
registers for reoffer and/or resale 25,000 restricted shares of Common Stock
issued under the Amended and Restated Employee Plan to two executive officers of
the Company prior to the date of this Registration Statement. See Item 7.
The materials constituting the reoffer prospectus have been prepared
pursuant to Part I of Form S-3, in accordance with General Instruction C to Form
S-8.
From the date hereof, all securities previously registered under the
Initial Registration Statement shall be deemed deregistered under the Initial
Registration Statement and instead registered under this Registration Statement,
including the reoffer prospectus included herein. The registration fee paid by
the Company in connection with the Initial Registration Statement has been
carried forward and applied against the registration fee otherwise payable under
this Registration Statement. See "Calculation of Registration Fee" on the cover
page of this Registration Statement.
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REOFFER PROSPECTUS
Up To 2,675,000 Shares
MIM CORPORATION
Common Stock
This Prospectus relates to the up to 2,675,000 shares of our Common Stock
which the people identified under "Selling Stockholders" may offer and sell from
time to time in one or more types of transactions (which may include block
transactions) on The Nasdaq Stock Market's National Market Tier, where our
Common Stock is listed for trading under the symbol "MIMS," in other markets
where our Common Stock is traded, in negotiated transactions, through put or
call options transactions, through short sales transactions, or in a combination
of such methods of sale. They will sell the Common Stock at prices which are
current when the sales take place or at other prices to which the parties agree.
The Selling Stockholders may or may not use brokers and dealers in these
transactions. The respective Selling Stockholders will pay any brokerage fees or
commissions relating to sales by them. See "Method of Sale."
We may issue these shares of Common Stock to the Selling Stockholders upon
the exercise by the Selling Stockholders of options we have previously awarded
to them or which we may award to them in the future. In addition, we have issued
and may issue in the future to the Selling Stockholders shares of our Common
Stock which are subject to restrictions on transfer and encumbrance for a
specified period of time. We have awarded and may award these options and
restricted shares to the Selling Stockholders under our Amended and Restated
1996 Stock Incentive Plan and our Amended and Restated 1996 Non-Employee
Directors Stock Incentive Plan.
We will not receive any of the proceeds from any sales by the Selling
Stockholders. We will pay all of the expenses associated with the registration
of the Common Stock and this Prospectus.
On May 26, 1999, the last reported sale price of the Common Stock on Nasdaq
was $2.75 per share.
See "Risk Factors" beginning on page 3 of this Prospectus for a discussion
of certain risks and other factors that you should consider before purchasing
our Common Stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, and they have not
determined if this Prospectus is truthful and complete. Any representation to
the contrary is a criminal offense.
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The date of this Prospectus is May 27, 1999.
We have not authorized anyone to give any information or to make any
representation which is not contained in this Prospectus or in a document
incorporated by reference into this Prospectus. If anyone gives any information
or makes any representation which is not contained in, or incorporated into this
Prospectus, you must not rely upon it as having been authorized by us or by
anyone acting on our behalf. This Prospectus is not an offer to sell, or a
solicitation of an offer to buy, our securities by any person in any
jurisdiction in which it is unlawful for that person to make such an offer or
solicitation. No matter when you receive this Prospectus or purchase securities
to which it relates, you must not assume it is correct at any time after its
date.
TABLE OF CONTENTS
Heading: Page Number
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The Company .......................................................... 3
Risk Factors ......................................................... 3
Selling Stockholders ................................................. 9
Use of Proceeds ...................................................... 9
Method of Sale ....................................................... 9
Indemnification of Directors and Officers ............................ 10
Where You Can Find More Information .................................. 11
Documents Incorporated By Reference .................................. 11
Legal Matters ........................................................ 12
Experts .............................................................. 12
Annex I - Selling Stockholders ....................................... 13
2
THE COMPANY
We are an independent pharmacy benefit management ("PBM") and prescription
mail order organization that offers a broad range of pharmaceutical services to
the health care industry. We promote the cost effective delivery of pharmacy
benefits to both public and private health plan members as well as the general
public. We target two types of plan sponsors:
o sponsors of public and private health plans, such as:
o health maintenance organizations ("HMO's")
o other managed care organizations ("MCO's") and
o long-term care facilities, such as nursing homes and assisted
living facilities and
o self-funded plans sponsored by employers.
We provide flexible program designs, pricing arrangements, formulary
management, clinical expertise, innovative technology and quality services
designed to contain pharmacy costs. We promote the clinically appropriate
substitution of generic drugs from equivalent but more expensive brand name
drugs that are often prescribed.
We were incorporated in Delaware in March 1996 and completed our initial
public offering in August 1996. Prior to our offering, we combined the
businesses and operations of Pro-Mark Holdings, Inc. and MIM Strategic
Marketing, LLC, which became 100% and 90% owned subsidiaries, respectively, of
ours in May 1996. On August 24, 1998, we acquired all of the outstanding capital
stock of Continental Managed Pharmacy Services, Inc., complementing our core PBM
business with mail order pharmacy services.
Our principal executive offices are located at 100 Clearbrook Road,
Elmsford, New York 10523, telephone number (914) 460-1600. Unless the context
otherwise requires, all references to "we", "us", "our" or "the Company" refers
to MIM Corporation and its predecessors and subsidiaries.
RISK FACTORS
Before you purchase any Common Stock, you should be aware that there are
various risks associated with an investment in the Common Stock, including those
described below. You should consider carefully these risk factors together with
the other information included in this Prospectus in evaluating whether to
purchase any Common Stock
Actual Results May Vary Materially From Results Associated With Forward-Looking
Statements
Some of the information contained in, or incorporated by reference into
this Prospectus includes certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include the information concerning our possible or assumed future
results of operations as well as statements preceded by, followed by or that
include the words "may," "will," "could," would," "believe," "expect,"
"anticipate," "estimate," "intend," "project" or the negative thereof or other
similar expressions. You are cautioned that any forward-looking statements are
not guarantees of future performance and involve risks and uncertainties. When
considering such forward-looking statements, you should keep in mind the risk
factors listed below and other cautionary statements contained in, or
incorporated by reference into this Prospectus. The risk factors noted in this
section and other factors noted throughout the Prospectus, including certain
risks and uncertainties, could cause our actual results to differ materially
from those results associated with any forward-looking statement. We do not
undertake any obligation to publicly release the results of any revisions to
these forward-looking statements that may be made to reflect any future events
and circumstances.
3
Adverse Events With Respect To TennCare Program or Our Relationship With
TennCare Plan Sponsors Could Adversely Affect Us
In January 1994, the State of Tennessee instituted its Medicaid
demonstration waiver program referred to as "TennCare." The State of Tennessee
contracted with certain MCO's to provide mandated health services to TennCare
beneficiaries on a capitated basis. In turn, certain of these MCO's contracted
with RxCare of Tennessee, Inc. ("RxCare") to provide TennCare mandated
pharmaceutical benefits to their TennCare beneficiaries through RxCare's network
of retail pharmacies, in most cases on a corresponding capitated basis.
From January 1994 through December 31, 1998, we provided a broad range of
PBM services to these TennCare beneficiaries under an agreement with RxCare (the
"RxCare Contract"). Under the RxCare Contract, we also provided PBM services to
commercial plan sponsors and their enrollees. We performed essentially all of
RxCare's obligations under its PBM contracts with plan sponsors, including
designing and marketing PBM programs and services. Under the RxCare Contract, we
paid certain amounts to RxCare and shared with RxCare the profit, if any,
derived from services performed under RxCare's contracts with the plan sponsors.
As of December 31, 1998, we serviced six TennCare plan sponsors with
approximately 1.2 million members under the RxCare Contract. The RxCare Contract
accounted for 72.2% of our revenues for the year ended December 31, 1998 and
approximately 83.6% of our revenues for the year ended December 31, 1997.
RxCare's contracts with Tennessee Managed Care Network, Inc., Tennessee
Behavioral Health, Inc., Premier Behavioral Systems of Tennessee and Phoenix
Healthcare of Tennessee accounted for approximately 16%, 11%, 16% and 12%,
respectively, of our revenues in 1998.
The Company and RxCare did not renew the RxCare Contract which expired on
December 31, 1998. The negotiated termination of our relationship with RxCare,
among other things, allowed us to directly market its services to Tennessee
customers (including those then under contract with RxCare) prior to the
expiration of the RxCare Contract. The RxCare Contract had previously prohibited
us from soliciting and/or marketing our PBM services in Tennessee other than on
behalf of, and for the benefit of RxCare. Our marketing efforts after the
negotiated termination resulted in us executing agreements effective as of
January 1, 1999 to provide PBM services directly to five of the six TennCare
MCO's representing approximately 900,000 of the 1.2 million TennCare lives
previously managed under the RxCare Contract. In addition, effective May 1,
1999, we entered into a contract to provide PBM services to the sixth TennCare
MCO we managed under the RxCare Contract and its approximately 300,000
enrollees, thereby contracting with all of the TennCare MCO's we formerly
managed through the RxCare Contract until December 31, 1998. Effective January
1, 1999, we also contracted directly to provide PBM services to substantially
all third party administrators and employer groups previously managed under the
RxCare Contract. We anticipate that approximately 45% of our revenues for fiscal
1999 will be derived from providing PBM services to these six TennCare MCO's. To
date, we have been unable to secure a contract with the two TennCare behavioral
health organizations ("BHO's") to which we previously provided PBM services
under the RxCare Contract. For the year ended December 31, 1998, amounts paid by
these BHO's represented approximately 27% of our revenues. Accordingly, our
failure to eventually obtain contracts with the two BHO's or the loss of any of
the other TennCare contracts we presently have, if not replaced by other
business, could materially adversely affect our financial condition and results
of operations.
As part of our normal review process, in April 1999 we determined that two
of our capitated TennCare contracts were not achieving profitability
projections. Accordingly, in accordance with the terms of these contracts, we
exercised our right to terminate these contracts effective on September 28,
1999. Representatives of the Company and these TennCare MCO's are presently
renegotiating these contracts. While we believe that it is reasonably likely
that the terms of these contracts will be renegotiated, no assurance can be
given that we will successfully renegotiate the contracts with either or both of
these customers. In addition, no assurance can be given that we will not incur
losses under either or both of these contracts during the interim period until
termination becomes effective.
4
Certain Legal Proceedings Could Adversely Affect Our Liquidity
In February 1999, we reached an agreement in principle with respect to a
civil settlement of a Federal and State of Tennessee investigation focusing
mainly on the conduct of two former officers (one of which is also a former
director and still a principal stockholder) prior to our initial public
offering. Based upon the agreement in principle, the investigation, as it
relates to us, would be fully resolved through the payment of a $2.2 million
civil settlement and an agreement to implement a corporate integrity program in
conjunction with the Office of the Inspector General of the U.S. Department of
Health and Human Services. This settlement is subject to several conditions,
including the execution of a definitive agreement. We anticipate that we will
have no continued involvement in the governments' joint investigation other than
continuing to cooperate with the governments in their efforts.
On March 31, 1999, Xantus Healthplan of Tennessee, Inc. ("Xantus"), one of
the TennCare MCO's to which we provide PBM services, and the State of Tennessee
entered into a consent decree whereby, among other things, the Commissioner of
Commerce and Insurance for the State of Tennessee was appointed receiver of
Xantus for purposes of rehabilitation. The receiver has begun to pay in a timely
manner all amounts due to us under our agreement with Xantus for services
rendered by the Company from and after April 1, 1999. As of the date of this
Prospectus, we continue to provide PBM services to Xantus and its members under
our agreement with them. At this time, we are unable to predict the consequences
of this action on our ability to collect monies owed to us by Xantus. As of
April 1, 1999, Xantus owed us $10.7 million relating to PBM services rendered by
us from January 1, 1999 through April 1, 1999.To date, we have withheld from our
pharmacy providers approximately $4.0 million (out of approximately $10 million)
of claims submitted by them on behalf of Xantus members as permitted by our
agreements with these pharmacy providers. If and when we are paid by Xantus with
respect to these claims, we will pay our network pharmacies for these claims.
State of Tennessee officials have publicly indicated that the State will ensure
that all TennCare providers negatively impacted by the appointment of the
receiver for Xantus will eventually receive from Xantus or the State at least
50% of all outstanding amounts owed by Xantus to such providers as of April 1,
1999. We can give no assurance that Xantus or the State will eventually pay any
or all of these amounts. Our failure to collect from Xantus or the State all or
a substantial portion of the monies owed to us by Xantus would have a material
adverse effect on our financial condition and results of operations.
Under Section 145 of the Delaware General Corporation Law ("Section 145")
and the Company's Amended and Restated By-Laws ("By-Laws"), we are obligated to
indemnify two former officers (one of which is also a former director and still
a principal stockholder) who are the subject of the indictments brought in the
United States District Court for the Western District of Tennessee (as more
fully described in our Annual Report on From 10-K for the fiscal year ended
December 31, 1998). Our obligation to provide indemnification would not apply if
it is ultimately determined by our Board of Directors that these former officers
failed to act in good faith and in a manner they reasonably believed to be in
our best interests, that they had reason to believe that their conduct was
unlawful or for any other reason under which indemnification would not be
required under Section 145 or the By-Laws. In addition, until the Board makes
such a determination, we are also obligated under Section 145 and the By-Laws to
advance the costs of defense to them. However, if the Board determines that
either or both of them are not entitled to indemnification, they would be
obligated to reimburse us for all amounts advanced to them. We are not presently
in a position to assess the likelihood that either or both of these former
officers will be entitled to indemnification and continued advancement of
defense costs or to estimate the total amount that we may have to pay in
connection with our obligations or the time period over which any amounts will
have to be advanced. We cannot assure you that our obligations to either or both
of these former officers would not have a material adverse effect on our results
of operations or financial condition.
Limited Term of Material Agreements Could Adversely Affect Us
Our contracts with plan sponsors typically have terms of one to three years
and are subject to earlier termination upon the occurrence of certain events,
including a breach of an agreement which is not cured within a reasonable time
after notice, insolvency, bankruptcy or receivership of the plan and termination
of the underlying health care program (for example, TennCare) or of the plan
sponsor's contract with the ultimate payor. In certain
5
cases, both us and the plan sponsor may also terminate the agreement without
cause, typically upon prior written notice, generally 30 to 90 days, but in some
cases as long as 150 days. We cannot guarantee that any contracts with plan
sponsors will be continued or renewed in accordance with their terms. The loss
of any particular plan sponsor contract, especially those with the TennCare
MCO's, or the loss of a significant number of them, could have a material
adverse effect on our financial condition and results of operations. As
discussed above, we are presently in the process of attempting to renegotiate
capitated contracts with two TennCare MCO's following our delivery of notices of
termination of these two contracts that will become effective on September 28,
1999, unless we successfully renegotiate these contracts.
Risk-Based Arrangements Could Adversely Affect Us
For the year ended December 31, 1998, approximately 32% of our revenues
were generated from capitated or other risk-based arrangements, compared to 53%
for the year ended December 31, 1997. Effective January 1, 1999, we began
providing PBM services directly to five of the six TennCare MCO's previously
managed under the RxCare Contract. Effective May 1, 1999, we began providing PBM
services to the sixth TennCare MCO previously managed under the Rx Care
Contract. We will be compensated on a capitated basis under four of the six
TennCare contracts, thereby increasing our financial risk in 1999 as compared to
1998. Based upon our present contracted arrangements, we anticipate that
approximately 36% of our revenues in 1999 will be derived from capitated or
other risk-based arrangements.
Under "capitated" arrangements, we receive a pre-determined fee each month
for each member enrolled in a particular health plan in return for providing
certain covered pharmacy benefits and services to plan members. From time to
time, we may also enter into cost sharing arrangements (i.e., sharing with plan
sponsors the financial benefits resulting from not exceeding established per
capita amounts), profit sharing arrangements (i.e., incentivizing the plan
sponsors to support fully our cost control efforts as well as other arrangements
under which we may share all or a portion of the risk of the drug benefit
program with the plan sponsor. We generally negotiate capitation fees and other
risk-based arrangements for a particular plan (or subset of individuals within a
plan) based upon a number of factors, including competitive conditions within a
particular market, the expected costs of providing the covered pharmacy
services, anticipated price increases for pharmaceutical products and
anticipated increases in the utilization of those products by plan members. The
cost of providing pharmacy services varies among plan participants and groups
and is affected by many factors largely beyond our control, including compliance
by physicians and patients with the drug formulary and benefit design
parameters, the acceptance rate of substitution of generic drugs for higher
priced brand name drugs, especially in light of the dramatic increase in direct
consumer marketing of brand name drugs, the effect of inflation on drug costs,
higher than expected utilization rates and the co-payment structure of the plan.
We generally base our expected costs on prior experience with similar groups and
demographic data based on the population at large. Data with respect to prior
experience may not be available and, if available, may not be a reliable
indicator of the actual results for a particular plan. In addition, under these
risk-based arrangements, we may be required to bear all or a portion of the
costs of certain newly-developed drugs the existence or cost of which may not
have been known at the time the capitation fee or other risk-based arrangement
for a particular plan was established. We cannot guarantee that the cost of
providing pharmacy services under capitated or other risk-based arrangements
will not exceed the revenues received by us with respect to those arrangements.
Any shortfall between revenues received and costs incurred under these capitated
and other risk-based arrangements could have a material adverse effect on the
Company's financial condition and results of operations. For example, on April
30, 1999, we gave notice of termination to two of the TennCare MCO's to which we
began providing services on a capitated basis as of January 1, 1999 due to
forecasted losses under those contracts. See "Adverse Events With Respect to
TennCare Program or our Relationship With TennCare Plan Sponsors Could Adversely
Affect Us."
We Have Had Historical Accounting Losses And May Experience Future Losses
We experienced losses of approximately $13.5 million, $31.8 million, $6.8
million and $2.5 million in the years ended December 31, 1997, 1996, 1995 and
1994, respectively. For the year ended December 31, 1998, we
6
reported net income of $4.3 million, after recording non-recurring charges of
$3.7 million. These historical results are not indicative of future results, but
we cannot assure you that we will not incur net losses in the future.
Rapid Growth and Integration of Acquired Businesses May Be Difficult to Manage
Efficiently
Since we went public in August 1996, we have been attempting to grow at a
rapid pace. Rapid growth may strain our financial and management resources. Our
ability to manage growth effectively will require that we continue to identify,
hire, train and effectively manage additional qualified employees. We cannot
assure you that we will be able to expand our market presence in current
locations or successfully enter other markets. If we are unable to manage our
growth effectively and efficiently, our financial condition and results of
operations could be adversely affected.
Our current strategy contemplates the continued growth of our company
through mergers and acquisitions of other companies and business entities which
engage in PBM and other related services as well as other strategic
arrangements. However, any business acquisition or other strategic arrangement
involves inherent uncertainties, such as the effect on the acquired business of
integration into a larger organization and the availability of management
resources to oversee the integration and operation of the acquired business.
Potential obstacles to the successful integration of the acquired business
include, among others, consolidating financial, accounting and managerial
functions and eliminating operational overlaps between our businesses, and
adding and integrating key personnel. Even though the acquired businesses may
have been successful as independent companies prior to the merger, acquisition
or strategic arrangement, we cannot assure you that their success will continue
afterwards.
Larger Competitors May Adversely Affect Our Ability to Compete Effectively
The PBM industry is highly competitive and has recently experienced
significant consolidation. Many of our current and potential competitors have
considerably greater financial, technical, marketing and other resources. The
PBM business includes a number of large, well capitalized companies with
nationwide operations and many smaller organizations typically operating on a
local or regional basis. Among larger companies offering PBM services are Medco
Containment Services, Inc. (a subsidiary of Merck & Co., Inc.), PCS, Inc.,
Express Scripts, Inc., Advance ParadigM, Inc. and Diversified Pharmaceutical
Services, Inc. Numerous insurance and Blue Cross and Blue Shield plans, managed
care organizations and retail drug chains also have their own PBM capabilities.
We May Not Be Able to Retain Key Management
Our success is largely dependent on the services of Richard H. Friedman,
our Chief Executive Officer, and, to a lesser extent, other key management
personnel. We have an employment agreement with Mr. Friedman which provides for
his continued employment through December 2003, subject to earlier termination
under certain circumstances. We cannot guarantee that we will be able to retain
his services or the services of any other key management personnel. The loss of
the services of one or more of our senior management could have a material
adverse effect upon our financial condition and results of operations.
Our Failure to Comply With Laws and Regulations Could Adversely Affect Us
Our present and planned businesses are subject to extensive federal and
state laws and regulations. Subject to certain exceptions, federal law (the
"Federal Anti-Kickback Statute") prohibits the payment or receipt of any
remuneration, directly or indirectly, to induce, arrange for or recommend the
purchase of health care items or services paid for in whole or in part by
Medicare or state health care programs (including Medicaid and TennCare). In
addition, certain state laws (including professional licensing laws prohibiting
fee-splitting) contain similar provisions that may extend the prohibition to
cover items or services that are paid for by private insurance and self-pay
patients. We can make no assurance that our practices will be found to be
protected by certain so-called "safe harbor" regulations, which provide
insulation from prosecution under the Federal Anti-Kickback Statute, and in some
instances it is clear that they are not so protected. We are also subject to
various false claim, drug distribution, antitrust and consumer protection laws
and may be subject to certain other laws, including
7
various state insurance laws.
While management believes that we are in substantial compliance with all
existing laws and regulations material to the operation of its business, such
laws and regulations are subject to rapid change and often are uncertain in
their application. As controversies continue to arise in the health care
industry (for example, regarding the efforts of plan sponsors and pharmacy
benefit managers to limit formularies, alter drug choice and establish limited
networks of participating pharmacies), federal and state regulation and
enforcement priorities in this area can be expected to increase, the impact of
which we cannot currently predict. It is possible that we will be subject to
scrutiny or challenge under one or more of these laws or that any such challenge
might be successful. Any such challenge, whether or not successful, could have a
material adverse effect upon our financial position and results of operations.
Violation of the Federal Anti-Kickback Statute, for example, may result in
criminal penalties, as well as exclusion from the Medicare and Medicaid
(including TennCare) programs. Further, it is possible that we will not be able
to obtain or maintain any of the regulatory approvals that may be required to
operate its business, and the failure to do so could have a material adverse
effect on our financial condition and results of operations.
The Services We Provide May Subject Us to Litigation and Liability
We believe that our insurance protection is adequate to protect us from
litigation and liability in connection with our present and contemplated
business operations. However, we cannot assure you that we will be able to
obtain and maintain insurance coverage in the future or that such insurance
coverage will be available on acceptable terms or will be adequate to cover any
or all potential professional liability, product liability or other claims. A
successful claim in excess of our insurance coverage could have a material
adverse effect on our financial condition and results of operations.
Our Dependence on Information Systems and the Year 2000 Issue Could Adversely
Affect Us
We believe our on-line claims processing (or adjudication) systems are an
integral part of our business. We own our claims processing software and have an
agreement to acquire all software upgrades to such software to ensure that we
maintain a state-of-the-art claims processing system. Any significant
interruption in service of our computer or telephone systems could adversely
affect our ability to operate our business on a timely basis, and could
adversely affect our relations with our pharmacies and health plan sponsors.
Under a contract with a third party, the third party guarantees that any
disruption in our computer or telephone systems will be rectified within 48
hours. Although we cannot guarantee it, we believe that this disaster recovery
arrangement is sufficient to prevent any disruption from having a material
adverse effect on our financial condition or results of operations.
The so-called "year 2000 problem," which is common to many companies,
concerns the inability of information systems, primarily computer hardware and
software programs, to recognize properly and process date sensitive information
following December 31, 1999. We have committed substantial resources
(approximately $2.4 million) over the past two years to improve our information
systems ("IS project"). We have used this IS project as an opportunity to
evaluate our state of readiness, estimate expected costs and identify and
quantify risks associated with any potential year 2000 issues. For a detailed
discussion of these matters, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our Annual Report on Form 10-K
for the year ended December 31, 1998.
Possible Negative Effects on Stockholders of Preferred Stock and Rights
We are authorized to issue 5,000,000 shares of preferred stock. Our Board
of Directors may from time to time fix the designation, rights and preferences
of preferred stock (including voting, dividend, redemption and liquidation
rights) without further stockholder action. Shares of preferred stock could be
issued in the future with rights and preferences that could make the possible
takeover of the Company or the removal of management more difficult or could
otherwise adversely impact the rights of stockholders.
8
On November 24, 1998, the Board adopted a stockholder rights plan. The
rights plan may have certain anti-takeover effects and may cause substantial
dilution to a person or group that attempts to acquire the Company on terms not
approved by the Board. The stockholder rights plan was adopted to help ensure
that the Board, if confronted by an unsolicited proposal from a third party to
acquire control of the Company, will have sufficient time to review the
proposal, to develop, if deemed appropriate, alternatives to the proposal and to
act in what the Board believes to be in the best interests of the Company and
its stockholders.
As originally adopted, the rights plan contains a "delayed redemption"
provision that prohibited rights under the plan from being redeemed by us during
the 180-day period after "continuing directors" (as defined in the rights plan)
cease to constitute a majority of the Board. This provision effectively
prevented newly-elected directors, in a change in control context, from
redeeming rights for six months, thereby delaying any acquisition of the
Company. In December 1998, the Delaware courts ruled in Quickturn Design
Systems, Inc. v. Mentor Graphics Corp., 721 A.2d 1281 (Del. 1998) that a similar
provision was invalid under Delaware law. As a result, the Board has amended the
rights plan to delete this "delayed redemption" provision. We may seek to take
other actions to achieve the same objectives as the rights plan and the "delayed
redemption" provision were implemented to address. Certain of these actions
could require stockholder approval. We cannot assure you that we will or will
not take or seek to take any such actions.
We Have Never Paid Dividends and Have No Current Intention to Pay Dividends
We have never paid a cash dividend on the Common Stock and presently intend
to retain all earnings, if any, to support the operation and expansion of our
business. We do not anticipate paying cash dividends in the foreseeable future.
Possible Volatility of Stock Price
The market price of the Common Stock has fluctuated substantially since our
initial public offering. The price of the Common Stock may be subject to
fluctuations in the future in response to operating results, general market
movements and other factors. In addition, the Common Stock as well as the stock
market in general has historically experienced price and volume fluctuations
that often have been unrelated or disproportionate to the operating performance
of the Company and companies in general. These fluctuations, as well as general
economic and market conditions, may adversely affect the market price of the
Common Stock.
SELLING STOCKHOLDERS
The table attached as Annex I hereto sets forth, as of the date of this
Prospectus or a subsequent date if amended or supplemented, (a) the name of each
Selling Stockholder and his or her relationship to the Company during the past
three years; (b) the number of shares of Common Stock each Selling Stockholder
beneficially owns (assuming that all options and restricted shares which they
have previously been granted are fully vested and free from restrictions on
transfer); (c) the number of shares of Common Stock offered pursuant to this
Prospectus by each Selling Stockholder; and (d) the amount and percentage of the
Common Stock outstanding to be held by such Selling Stockholder after giving
effect to the offering of the Common Stock covered by this Prospectus. The
information contained in Annex I may be amended or supplemented from time to
time.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of Common Stock by
Selling Stockholders covered by this Prospectus.
METHOD OF SALE
This Prospectus relates to the possible offer and sale from time to time by
the Selling Stockholders of their shares of Common Stock which they may receive
upon the exercise of options or which they may transfer upon the lapse of
restrictions on restricted shares. These options and restricted shares have been
or may be issued or granted
9
to the Selling Stockholders under the Employee Plan and/or the Directors Plan.
We have registered their shares for resale to provide them with freely tradeable
securities. However, registration of their shares does not necessarily mean that
they will offer or sell any of their shares. We will not receive any proceeds
from the offering or sale of their shares.
The Selling Stockholders may offer and sell the shares of Common Stock to
which this Prospectus relates from time to time in one or more types of
transactions (which may include block transactions) on The Nasdaq Stock Market's
National Market Tier, where our Common Stock is listed for trading under the
symbol "MIMS," in other markets where our Common Stock is traded, in negotiated
transactions, through put or call options transactions, through short sales
transactions, or in a combination of such methods of sale. They will sell the
Common Stock at prices which are current when the sales take place or at other
prices to which the parties agree. The respective Selling Stockholders may use
underwriters, brokers or dealers to sell the shares, and will pay any brokerage
fees or commissions relating to sales by them in amounts to be negotiated by
them prior to sale. Such brokers or dealers and any other participating brokers
or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), in connection with
such sales and any discounts and commissions received by them and any profit
realized by them on the resale of the shares may be deemed to be underwriting
discounts and commissions under the Securities Act. Some shares may also be sold
by other people or entities which receive the shares from one or more of the
Selling Stockholders by gift, by operation of law (including the laws of descent
and distribution) or by other transfers or assignments.
Because the Selling Stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act, the Selling Stockholders will be subject to
the prospectus delivery requirements of the Securities Act. We have informed the
Selling Stockholders that the anti-manipulative provisions of Regulation M
promulgated under the Exchange Act may apply to their sales in the market.
Selling Stockholders also may resell all or a portion of their shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
If we are notified by any Selling Stockholder that any material arrangement
has been entered into with an underwriter, broker or dealer for the sale of
shares through block trade, special offering, exchange distribution or secondary
distribution or purchase by an underwriter, broker or dealer, we will prepare
and file a supplement to this Prospectus, if required, under Rule 424(b) of the
Securities Act, disclosing (i) the name of the respective Selling Stockholder(s)
and of the participating broker-dealer(s), (ii) the number of shares involved,
(iii) the price at which such shares were sold, (iv) the commissions paid or
discounts or concessions allowed to such broker-dealer(s), where applicable, (v)
that such broker-dealer(s) did not conduct any investigation to verify the
information set forth or incorporated by reference in this Prospectus and (vi)
other facts material to the transaction.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Amended and Restated Certificate of Incorporation limits the liability
of our directors to us or our stockholders to the fullest extent permitted by
the Delaware General Corporation Law (the "DGCL"). Specifically, our directors
will not be personally liable for monetary damages for breach of his fiduciary
duty as a director except for liability (a) for any breach of his duty of
loyalty to us or our stockholders, (b) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (c) for
unlawful payment of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the DGCL or (d) for any transaction from which he
derived an improper personal benefit. In addition, our By-Laws require us to
indemnify any current or former director or officer to the fullest extent
permitted by the DGCL. We also maintain insurance for the benefit of our
directors and officers and the directors and officers of our subsidiaries
insuring such persons against certain civil liabilities, including liabilities
under the securities laws.
10
WHERE YOU CAN FIND MORE INFORMATION
We have filed a Registration Statement on Form S-8 (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission") under
the Securities Act covering the securities (i) covered by this Prospectus, (ii)
issuable upon the exercise of options and/or the lapse of transfer restrictions
on restricted shares, in each case previously awarded under the Plans, and (iii)
issuable upon the exercise of options and/or the lapse of transfer restrictions
on restricted shares, in each case which may be subsequently issued or awarded
under the Plans. This Prospectus omits certain information and exhibits included
in the Registration Statement, copies of which may be obtained upon payment of a
fee prescribed by the Commission or may be examined free of charge at the
principal office of the Commission in Washington, D.C.
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance with those
requirements, we file annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). You may read and copy those reports and proxy statements and any
other information we file with the Commission at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Regional Offices of the Commission
located at 7 World Trade Center, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. You may also
obtain copies of that information from the Commission's Public Reference Section
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Please
call the Commission at 1-800-SEC-0330 for further information on the public
reference rooms. The Commission maintains a web site that contains reports,
proxy and information statements and other information regarding registrants,
including MIM Corporation, that file electronically with it. You may access the
Commission's web site at "http://www.sec.gov". Our Common Stock is listed for
trading on the Nasdaq Stock Market's National Market Tier. You may also read any
such reports, proxy statements and other information filed or to be filed by us
at the offices of the National Association of Securities Dealers, Inc., Market
Listing Section, 1735 K Street, N.W., Washington, D.C. 20006.
DOCUMENTS INCORPORATED BY REFERENCE
We incorporate by reference into this Prospectus the following documents
which we previously filed with the Commission under the File Number 0-28740:
(a) Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
(b) Our Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 1999;
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, filed pursuant to
Section 12(g) of the Exchange Act on July 30, 1996, as amended by
Post-Effective Amendment No. 1 on Form 8-A/A filed on August 1, 1996,
and declared effective on August 14, 1996, as well as the description
of the Company's Series A Junior Participating Preferred Stock
Purchase Rights contained in the Company's Registration Statement on
Form 8-A filed on December 4, 1998, as amended by Post-Effective
Amendment No. 1 on Form 8-A/A filed on December 14, 1998, as amended
by Post-Effective Amendment No. 2 on Form 8-A/A filed on May 20, 1999.
When we file documents in accordance with Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act between the date of this Prospectus and the time we
file a post-effective amendment to the Registration Statement reporting that all
the securities which are the subject of the Registration Statement have been
sold or deregistering any securities which have not been sold, those documents
we file will be incorporated into this Prospectus and will be a part of it
beginning on the date those documents are filed. If any document which we file
changes anything said in this Prospectus or in an earlier document which is
incorporated into this Prospectus, the later document will modify or supersede
what is said in this Prospectus or the earlier document.
11
We will provide, without charge, at the written or oral request of anyone
to whom this Prospectus is delivered, copies of the documents incorporated by
reference in this Prospectus, other than exhibits to those documents which are
not specifically incorporated by reference. Requests should be directed to: MIM
Corporation, 100 Clearbrook Road, New York, New York 10523, Attention: Corporate
Secretary (Telephone: (914) 460-1638).
LEGAL MATTERS
Barry A. Posner, our General Counsel, will pass upon certain legal matters
for us.
EXPERTS
The financial statements incorported by reference in this registration statement
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incoporated by
reference herein in reliance upon the authority of said firm as experts in
giving said report.
----------
12
ANNEX I
SELLING STOCKHOLDERS (1)
Shares Beneficially
Shares Shares Owned After Offering: (2)
Beneficially Offered --------------------------
Name Relationships to the Company Owned Hereby Number Percentage
---- ---------------------------- ----- ------ ------ ----------
Louis A. Luzzi Director 21,800 20,000 1,800 *
Louis DiFazio Director 22,500 20,000 2,500 *
Michael Kooper Director 20,000 20,000 -0- 0%
Richard A. Cirillo Director 24,000 20,000 -0- 0%
Scott R. Yablon Director 1,222,000 (3) 220,000 1,200,000 6.3%
Barry A. Posner Vice President, Secretary 221,600 (4) 220,000 1,600 *
and General Counsel
Edward J. Sitar Chief Financial Officer 106,500 (5) 105,000 1,500 *
Recie Bomar Vice President-Sales 83,333 (6) 83,333 -0- 0%
Joseph DeMarte Vice President-Sales & Marketing 54,000 (7) 54,000 -0- 0%
Russell J. Corvese Vice President-Operations 54,950 (8) 54,950 -0- 0%
Rita Marcoux Director of Operations 58,450 (9) 58,450 -0- 0%
Robert J. Bush Assistant General Counsel 23,000 (10) 23,000 -0- 0%
Kathie Garrity Director of Finance 23,500 (11) 23,500 -0- 0%
- ----------
* Less than one percent.
(1) Assumes that all options held by the listed individuals are fully vested
and exercisable , although options typically vest over a three year period.
Also assumes that all restricted shares are freely transferable without
restriction, although such restrictions do not lapse until specified dates
in the future. Shares deemed beneficially owned by virtue of these
assumptions are treated as outstanding for purposes of determining
beneficial ownership by such individual.
(2) Assumes the sale of all securities offered hereby. Based upon 18,771,689
shares of Common Stock outstanding on May 10, 1999.
(3) Includes options to purchase 1,000,000 shares of Common Stock and 200,000
shares of Common Stock subject to restrictions on transfer and encumbrance.
(4) Includes options to purchase 200,000 shares of Common Stock, 20,000 shares
of Common Stock subject to restrictions on transfer and encumbrance and
1,600 shares of Common stock held jointly with his wife.
(5) Includes options to purchase 100,000 shares of Common Stock, 5,000 shares
of Common Stock subject to restriction or transfer and encumbrance and
1,500 shares of Common Stock held jointly with his wife.
(6) Includes options to purchase 75,000 shares of Common Stock and 8,333 shares
of Common Stock subject to restriction or transfer and encumbrance.
(7) Includes options to purchase 50,000 shares of Common Stock and 4,000 shares
of Common Stock subject to restriction or transfer and encumbrance.
(8) Includes options to purchase 50,950 shares of Common Stock and 4,000 shares
of Common Stock subject to restriction or transfer and encumbrance.
(9) Includes options to purchase 54,450 shares of Common Stock and 4,000 shares
of Common Stock subject to restriction or transfer and encumbrance.
(10) Includes options to purchase 20,000 shares of Common Stock and 3,000 shares
of Common Stock subject to restriction or transfer and encumbrance.
(11) Includes options to purchase 20,500 shares of Common Stock and 3,000 shares
of Common Stock subject to restriction or transfer and encumbrance.
13
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 heretofore filed with the Securities and
Exchange Commission (the "Commission"):
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1999; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, filed pursuant to Section
12(g) of the Exchange Act on July 30, 1996, as amended by Post-Effective
Amendment No. 1 on Form 8-A/A filed on August 1, 1996, and declared
effective on August 14, 1996 as well as the description of the Company's
Series A Junior Participating Preferred Stock Purchase Rights contained in
the Company's Registration Statement on Form 8-A filed on December 4, 1998,
as amended by Post-Effective Amendment No. 1 on Form 8-A/A filed on
December 14, 1998, as amended by Post-Effective Amendment No. 2 on Form
8-A/A filed on May 20, 1999.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act on or 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 of such reports or documents. Statements made herein as to the contents
of any contract, agreement or other document are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to this Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
II-1
Item 6. Indemnification of Directors and Officers.
The Company's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") limits the liability of the Company's directors
to the Company or its stockholders to the fullest extent permitted by the
Delaware General Corporation Law (the "DGCL"). Specifically, no director of the
Company will be personally liable for monetary damages for a breach of such
director's fiduciary duty as a director of the Company except for liability (a)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) for unlawful payment
of dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the DGCL or (d) for any transaction from which such director derived an
improper personal benefit. In addition, the Company's Amended and Restated
By-Laws (the "By-Laws") require the Company to indemnify any current or former
director or officer to the fullest extent permitted by the DGCL. The Company
also maintains insurance for the benefit of its directors and officers and the
directors and officers of its subsidiaries insuring such persons against certain
civil liabilities, including liabilities under the securities laws.
Item 7. Exemption from Registration Claimed.
On March 1, 1999, pursuant to new employment agreements between the Company
and two executive officers of the Company, the Company granted these two
executive officers a total of 25,000 shares of Common Stock, subject to
restrictions on transfer and encumbrance through December 2, 2006. The
restricted shares will automatically be forfeited to the Company upon
termination of either grantee's employment with the Company prior to December 2,
2006. The restrictions to which the restricted shares are subject may lapse
prior to December 2, 2006 in the event that the Company achieves certain
specified levels of earnings per share in fiscal 2001. Each executive officer
possesses voting rights with respect to the restricted shares, but is not
entitled to receive dividend or other distributions, if any, paid with respect
to the restricted shares.
The reoffer prospectus constituting a part of this Registration Statement
covers the reoffer and/or resale of these 25,000 restricted shares. The Company
issued these 25,000 restricted shares without registration under the Act
pursuant to the exemption from registration provided by Section 4(2) of the Act.
Item 8. Exhibits.
Exhibit
Number
------
4.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form S-1 (No. 333-05327 )).
II-2
4.2 Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3(ii) of the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 1998).
4.3 The Company's 1996 Stock Incentive Plan, as amended and restated
effective as of December 1, 1998 (incorporated by reference to
Exhibit 10.33 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998).
4.4 The Company's 1996 Non-Employee Directors Stock Incentive Plan, as
amended and restated effective as of March 1, 1999 (incorporated
by reference to Exhibit 10.60 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 1999).
4.5 Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form S-4
(No. 333-60647), as amended, which became effective on August 21,
1998).
4.6 Amended and Restated Rights Agreement, dated as of May 20, 1999,
between the Company and American Stock Transfer and Trust Company
(including the form of Rights Certificate) (incorporated by
reference to Exhibit 4.1 of the Company's Post-Effective Amendment
No. 2 to Registration Statement on Form 8-A/A dated May 21, 1999).
4.7 Certificate of Designations of Series A Junior Participating
Preferred Stock (incorporated by reference to Exhibit 4.2 of the
Company's Current Report on Form 8-K dated December 14, 1998).
4.8* Form of Incentive Stock Option Agreement
4.9* Form of Non-Qualified Stock Option Agreement
4.10* Form of Performance Share Agreement
5.1* Opinion of Barry A. Posner, Esq.
23.1* Consent of Arthur Andersen LLP.
23.2 Consent of Barry A. Posner, Esq. (contained in Exhibit 5.1
hereto).
- ----------
*Filed herewith.
II-3
Item 9. Undertakings.
A. The undersigned registrant hereby undertakes:
(1) (i) 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 of 1933
(the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. The foregoing notwithstanding, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the DGCL, the Certificate of Incorporation, the By-Laws
or otherwise, the registrant has been advised that in the
II-4
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 registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of 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-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Village of Elmsford, State of New York, on this 27th day
of May, 1999.
MIM Corporation
By: /s/ Barry A. Posner
----------------------------------
Barry A. Posner
Vice President and General Counsel
II-6
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.
Signature Capacity(ies) Date
--------- ------------- ----
/s/ Richard H. Friedman Principal Executive Officer/Director May 26, 1999
- ------------------------------------
Richard H. Friedman
/s/ Scott R. Yablon Director May 26, 1999
- ------------------------------------
Scott R. Yablon
/s/ Edward J. Sitar Principal Financial and Accounting May 26, 1999
- ------------------------------------ Officer
Edward J. Sitar
/s/ Louis DiFazio Director May 26, 1999
- ------------------------------------
Louis DiFazio, Ph.D.
/s/ Richard A. Cirillo Director May 26, 1999
- ------------------------------------
Richard A. Cirillo
/s/ Louis A. Luzzi Director May 26, 1999
- ------------------------------------
Louis A. Luzzi, Ph.D.
/s/ Michael Kooper Director May 26, 1999
- ------------------------------------
Michael Kooper
II-7
Exhibit 4.8
INCENTIVE STOCK OPTION AGREEMENT
INCENTIVE STOCK OPTION AGREEMENT (the "Agreement") made as of the ____ day
of _______________, 1999 (the "Grant Date"), between MIM Corporation, a Delaware
corporation (the "Company"), and ____________________ (the "Awardee").
WHEREAS the Company desires to afford the Awardee an opportunity to
purchase shares of common stock of the Company ("Common Stock") as hereinafter
provided, in accordance with the provisions of the MIM Corporation 1996 Stock
Incentive Plan, as amended and restated effective December 1, 1998, a copy of
which is attached (the "Plan").
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration the legal sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:
1. Grant of Option. The Company hereby grants to the Awardee the right and
option (the "Option") to purchase all or any part of an aggregate of _________
shares of the $.0001 par value per share common stock ("Common Stock") of the
Company (the "Shares"). The Option is in all respects limited and conditioned as
hereinafter provided, and is subject to the terms and conditions of the Plan now
in effect and as they may be amended from time to time, (which terms and
conditions are and automatically shall be incorporated herein by reference and
made a part hereof and shall control in the event of any conflict with any other
terms of this Option Agreement). It is intended that the Option granted
hereunder be an incentive stock option ("ISO") as such term is defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Definitions. For purposes of this Agreement, the terms used herein shall
be defined as follows:
(a) Date of Termination. The Awardee's "Date of Termination" shall be the
first day occurring on or after the Grant Date on which the Awardee's Employment
by the Company and its Subsidiaries and Affiliates is terminated, regardless of
the reason for the termination of Employment; provided that a termination of
Employment shall not be deemed to occur by reason of a transfer of the Awardee
between any of the Company and its Subsidiaries and Affiliates; and further
provided that the Awardee's employment shall not be considered terminated while
the Awardee is on a leave of absence from the Company or a Subsidiary or
Affiliate approved by the Awardee's employer.
(b) Disability. The term "Disability" shall have the meaning provided in
Section 22(e)(3) of the Code.
(c) Termination Without Cause or For Good Reason. The term "Termination
without Cause or for Good Reason" shall mean the termination of the Awardee's
Employment by the Company and its Subsidiaries and Affiliates for reasons other
than "Cause" or by the Awardee for "Good Reason," as such quoted terms are
defined in the Employment Agreement between the Company and the Awardee. [If not
defined in the Employment Agreement or there is no Employment Agreement, a
definition will need to be inserted.]
(d) Plan Definitions. Except where the context clearly implies or indicates
the contrary, a word, term, or phrase used in the Plan is similarly used in this
Agreement.
3. Purchase Price. The purchase price per share of the Shares under the
Option shall be $______________ (the "Option Price"), being equal to the Fair
Market Value of Common Stock on the Grant Date (110% of Fair Market Value in the
case of a 10% stockholder).
4. Term. Unless earlier terminated pursuant to any provision of the Plan or
of this Option Agreement, this Option shall expire on the date (the "Expiration
Date") which is the tenth anniversary of ___________________, 1999 (the
"Reference Date"). This Option shall not be exercisable on or after the
Expiration Date.
5. Exercise of Option. (a) This Option shall vest and may be exercised as
to one-third of the Shares (rounded to the nearest whole share) on each of the
first three anniversaries of the Reference Date, so that the Option shall be
exercisable as to all Shares on the third such anniversary, provided, however,
that the Option shall be exercisable (i) as to all vested Shares (that have not
been previously forfeited) as of the Awardee's Date of Termination if such
termination occurs by reason of the Awardee's death or Disability (ii) as to all
vested and unvested Shares (that have not been previously forfeited) as of the
Awardee's Date of Termination if such termination occurs by reason of the
Awardee's Termination without Cause or Termination for Good Reason or (iii) as
to all vested and unvested Shares (that have not been previously forfeited) as
of the date of a Change in Control if the Awardee's Employment is terminated
within one year following such Change in Control if such termination is without
Cause or if it is for Good Reason. Options that become exercisable in accordance
with the foregoing shall remain exercisable, subject to the provisions contained
in the Plan and in this Option Agreement, until the expiration of the term of
this Option as set forth in Paragraph 4 or until other termination of the
Option.
(b) To the extent that the aggregate Fair Market Value (determined at the
time of grant) of Common Stock with respect to which ISOs are exercisable for
the first time by the Awardee during any calendar year (under the Plan and all
other plans of the Company and its subsidiaries, if any) exceeds $100,000, the
options or portions thereof which exceed the limit (according to the order in
which they were granted) shall be treated as nonstatutory stock options.
6. Method of Exercising Option. Subject to the terms and conditions of this
Option Agreement and the Plan, the Option may be exercised upon written notice
to the Company at its principal office, which is located at One Blue Hill Plaza,
Pearl River, New York 10965. Such notice
-2-
(a suggested form of which is attached) shall state the election to exercise the
Option and the number of Shares with respect to which it is being exercised;
shall be signed by the person or persons so exercising the Option; shall, if the
Company so requests, be accompanied by the investment certificate referred to in
Paragraph 7 hereof and shall be accompanied by payment of the full Option Price
of such Shares.
The Option Price shall be paid to the Company:
(a) In cash, or in its equivalent;
(b) In Company Common Stock previously acquired by the Awardee, provided
that if such shares of Common Stock were acquired through exercise of an
ISO or NQSO or of an option under a similar plan, such shares have been
held by the Awardee for a period of more than 12 months on the date of
exercise; or
(c) In such other manner consistent with the Plan and applicable law as
from time to time may be authorized in writing by the Company with respect
to such "cashless" option exercise arrangements as the Company from time to
time may maintain with securities brokers. Any such arrangements and
written authorizations may be terminated at any time by the Company without
notice to the Awardee; or
(d) In any combination of (a), (b) and (c) above.
In the event such Option Price is paid, in whole or in part, with shares of
Common Stock, the portion of the Option price so paid shall be equal to the Fair
Market Value on the date of exercise of the Option of the Common Stock
surrendered in payment of such Option Price.
Upon receipt of such notice and payment, the Company, as promptly as
practicable, shall deliver or cause to be delivered a certificate or
certificates representing the Shares with respect to which the Option is so
exercised. The certificate or certificates for the Shares as to which the Option
shall have been so exercised shall be registered in the name of the person or
persons so exercising the Option (or, if the Option shall be exercised by the
Awardee and if the Awardee shall so request in the notice exercising the Option,
shall be registered in the name of the Awardee and the Awardee's spouse,
jointly, with right of survivorship) and shall be delivered as provided above to
or upon the written order of the person or persons exercising the Option. In the
event the Option shall be exercised by any person or persons after the legal
disability or death of the Awardee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All Shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable by the Company.
7. Shares to be Purchased for Investment. Unless the Company has
theretofore notified the Awardee that a registration statement covering the
Shares to be acquired upon the exercise of the Option has become effective under
the Securities Act of 1933 and the Company has
-3-
not thereafter notified the Awardee that such registration is no longer
effective, or unless counsel to the Company shall be otherwise satisfied that
the Awardee would be permitted under applicable law to immediately resell Shares
acquired upon the exercise of the Option, it shall be a condition to any
exercise of this Option that the Shares acquired upon such exercise be acquired
for investment and not with a view to distribution, and the person effecting
such exercise shall submit to the Company a certificate of such investment
intent, together with such other evidence supporting the same as the Company may
request. The Company shall be entitled to restrict the transferability of the
Shares issued upon any such exercise to the extent necessary to avoid a risk of
violation of the Securities Act of 1933 (or of any rules or regulations
promulgated thereunder) or of any state laws or regulations. Such restrictions
may, at the option of the Company, be noted or set forth in full on the share
certificates.
8. Non-Transferability of Option. This Option is not assignable or
transferable, in whole or in part, by the Awardee otherwise than by the laws of
descent and distribution, and during the lifetime of the Awardee the Option
shall be exercisable only by the Awardee or by his guardian or legal
representative.
9. Termination of Option. (a) The unexercised portion of the Option
(whether vested or not) shall automatically terminate and shall become null and
void and be of no further force or effect upon the first to occur of the
following:
(i) The Expiration Date;
(ii) The expiration of 30 days from the date that the Awardee ceases to be
an employee of the Company upon termination by resignation where such
resignation is not for Good Reason;
(iii) The expiration of twelve months from the date that the Optionee
ceases to be an employee of the Company or any of its Subsidiaries as
a result of the Awardee's death, Disability, Termination without Cause
or for Good Reason;
(iv) Immediately if the Awardee ceases to be an employee of the Company or
any of its Subsidiaries if such termination is for Cause.
10. Withholding of Taxes. The obligation of the Company to deliver shares
of Common Stock upon the exercise of the Option shall be subject to applicable
federal, state and local tax withholding requirements.
If the exercise of this Option is subject to the withholding requirements
of applicable federal tax laws, the Committee may permit the Awardee, subject to
the provisions of the Plan and such additional withholding rules (the
"Withholding Rules") as shall be adopted by the Committee, to satisfy the
minimum federal, state and local withholding tax, in whole or in part, by
electing to
-4-
have the Company withhold (or by returning to the Company) shares of Common
Stock, which shares shall be valued, for this purpose, at their Fair Market
Value on the date of exercise of the Option (or, if later, the date on which the
Optionee recognizes ordinary income with respect to such exercise) (the
"Determination Date"). An election to use shares of Common Stock to satisfy tax
withholding requirements must be made in compliance with and subject to the
Withholding Rules, and the Committee may not withhold shares in excess of the
number necessary to satisfy the minimum federal, state and local income tax
withholding requirements. In the event shares of Common Stock acquired under the
exercise of an ISO are used to satisfy such withholding requirement, such shares
of Common Stock must have been held by the Awardee for a period of not less than
the holding period described in Section 422(a)(1) of the Code on the
Determination Date, or if such shares of Common Stock were acquired through
exercise of a non-qualified stock option or of an option under a similar plan,
such option was granted to the Awardee at least six months prior to the
Determination Date.
11. Governing Law. This Option Agreement shall be construed in accordance
with, and its interpretation shall be governed by applicable federal law, and
otherwise by the laws of the State of Delaware.
12. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of this Agreement by the Committee and
any decision made by it with respect to this Agreement is final and binding.
13. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
contracts and other agreements to the extent of any discrepancies contained
between this document and such other document (including, without limitation,
sections 5.2(b)(iii) and 5.2(c)(iii) of the Employment Agreement).
-5-
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officers thereunto duly authorized, and the Awardee has hereunto
set his hand and seal, all on the day and year first above written.
MIM Corporation
By_______________________________________
Title ________________________________
ACCEPTED AND AGREED TO:
_________________________________________
Awardee
-6-
Notice of Exercise of Incentive Stock Option
I hereby exercise the incentive stock option granted to me on
_______________________, 199__, by MIM Corporation, with respect to the
following number of shares of the $.0001 par value per share common stock of MIM
Corporation ("Shares") covered by said option:
Number of Shares to be purchased _______________
Option price per Share $______________
Total exercise price $______________
[Check one of the following to indicate method of payment:]
___ A. Enclosed is cash or its equivalent, in the amount of
$__________________, in full payment for such Shares.
___ B. Enclosed is/are ___________________ Share(s) with a total Fair Market
Value of $_______________ on the date hereof in full payment for such
Shares.
___ C. [Describe any other payment alternatives then available.]
___ D. Enclosed is cash or its equivalent in the amount of $____________, and
__ Share(s) with a total Fair Market Value of $__________ on the date
hereof, in [partial] [full] payment for such Shares.
Please have the certificate or certificates representing the purchased
Shares registered in the following name or names(1) ________________________ and
sent to______________________________________.
DATED: _____________________, _________.
_______________________________
Awardee's Signature
- ---------------------------
(1) Certificates may be registered in the name of the Awardee alone or in the
names of the Awardee and his or her spouse, jointly, with right of survivorship.
Exhibit 4.9
NON-QUALIFIED STOCK OPTION AGREEMENT
NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") made as of the ____
day of _______________, 1999 (the "Grant Date"), between MIM Corporation, a
Delaware corporation (the "Company"), and ____________________ (the "Awardee").
WHEREAS the Company desires to afford the Awardee an opportunity to
purchase shares of common stock of the Company ("Common Stock") as hereinafter
provided, in accordance with the provisions of the MIM Corporation 1996 Stock
Incentive Plan, as amended and restated effective December 1, 1998, a copy of
which is attached (the "Plan").
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration the legal sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:
1. Grant of Option. The Company hereby grants to the Awardee the right and
option (the "Option") to purchase all or any part of an aggregate of _________
shares of the $.0001 par value per share common stock ("Common Stock") of the
Company (the "Shares"). The Option is in all respects limited and conditioned as
hereinafter provided, and is subject to the terms and conditions of the Plan now
in effect and as they may be amended from time to time (which terms and
conditions are and automatically shall be incorporated herein by reference and
made a part hereof and shall control in the event of any conflict with any other
terms of this Option Agreement). It is intended that the Option granted
hereunder be a non-qualified stock option ("NQSO") and not an incentive stock
option ("ISO") as such term is defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
2. Definitions. For purposes of this Agreement, the terms used herein shall
be defined as follows:
(a) Date of Termination. The Awardee's "Date of Termination" shall be the
first day occurring on or after the Grant Date on which the Awardee's Employment
by the Company and its Subsidiaries and Affiliates is terminated, regardless of
the reason for the termination of Employment; provided that a termination of
Employment shall not be deemed to occur by reason of a transfer of the Awardee
between any of the Company and its Subsidiaries and Affiliates; and further
provided that the Awardee's employment shall not be considered terminated while
the Awardee is on a leave of absence from the Company or a Subsidiary or
Affiliate approved by the Awardee's employer.
(b) Disability. The term "Disability" shall have the meaning provided in
Section 22(e)(3) of the Code.
(c) Termination Without Cause or For Good Reason. The term "Termination
without Cause or for Good Reason" shall mean the termination of the Awardee's
Employment by the Company and its Subsidiaries and Affiliates for reasons other
than ACause@ or by the Awardee for "Good Reason," as such quoted terms are
defined in the Employment Agreement between the Company and the Awardee. [If not
defined in the Employment Agreement or there is no Employment Agreement, a
definition will need to be inserted.]
(d) Plan Definitions. Except where the context clearly implies or indicates
the contrary, a word, term, or phrase used in the Plan shall have the same
meaning where used in this Agreement.
3. Purchase Price. The purchase price per share of the Shares under the
Option shall be $______________ (the "Option Price"), being equal to the Fair
Market Value of Common Stock on the Grant Date.
4. Term. Unless earlier terminated pursuant to any provision of the Plan or
of this Option Agreement, this Option shall expire on the date (the "Expiration
Date") which is the tenth anniversary of ___________________, 1999 (the
"Reference Date"). This Option shall not be exercisable on or after the
Expiration Date.
5. Exercise of Option. This Option shall vest and may be exercised as to
one-third of the Shares (rounded to the nearest whole share) on each of the
first three anniversaries of the Grant Date, so that the Option shall be
exercisable as to all Shares on the third such anniversary, provided, however,
that the Option shall be exercisable (i) as to all vested Shares (that have not
been previously forfeited) as of the Awardee's Date of Termination if such
termination occurs by reason of the Awardee's death or Disability (ii) as to all
vested and unvested Shares (that have not been previously forfeited) as of the
Awardee's Date of Termination if such termination occurs by reason of the
Awardee's Termination without Cause or Termination for Good Reason or (iii) as
to all vested and unvested Shares (that have not been previously forfeited) as
of the date of a Change in Control if the Awardee's Employment is terminated
within one year following such Change in Control if such termination is without
Cause or if it is for Good Reason. Options that become exercisable in accordance
with the foregoing shall remain exercisable, subject to the provisions contained
in the Plan and in this Option Agreement, until the expiration of the term of
this Option as set forth in Paragraph 4 or until other termination of the
Option.
6. Method of Exercising Option. Subject to the terms and conditions of this
Option Agreement and the Plan, the Option may be exercised upon written notice
to the Company at its principal office, which is located at 100 Clearbrook Road,
Third Floor, Elmsford, New York 10523. Such notice (a suggested form of which is
attached) shall state the election to exercise the Option and the number of
Shares with respect to which it is being exercised; shall be signed by the
person or persons so exercising the Option; shall, if the Company so requests,
be accompanied by the investment certificate referred to in Paragraph 7 hereof
and shall be accompanied by payment of the full Option Price of such Shares.
The Option Price shall be paid to the Company:
(a) In cash, or in its equivalent;
(b) In Company Common Stock previously acquired by the Awardee, provided
that if such shares of Common Stock were acquired through exercise of an ISO or
NQSO or of an option under a similar plan, such shares have been held by the
Awardee for a period of more than 12 months on the date of exercise; or
(c) In such other manner consistent with the Plan and applicable law as
from time to time may be authorized in writing by the Company with respect to
such Acashless@ option exercise arrangements as the Company from time to time
may maintain with securities brokers. Any such arrangements and written
authorizations may be terminated at any time by the Company without notice to
the Awardee.
(d) In any combination of (a), (b) and (c) above.
In the event such Option Price is paid, in whole or in part, with shares of
Common Stock, the portion of the Option Price so paid shall be equal to the Fair
Market Value on the date of exercise of the Option of the Common Stock
surrendered in payment of such Option Price.
Upon receipt of such notice and payment, the Company, as promptly as
practicable, shall deliver or cause to be delivered a certificate or
certificates representing the Shares with respect to which the Option is so
exercised. The certificate or certificates for the Shares as to which the Option
shall have been so exercised shall be registered in the name of the person or
persons so exercising the Option (or, if the Option shall be exercised by the
Awardee and if the Awardee shall so request in the notice exercising the Option,
shall be registered in the name of the Awardee and the Awardee's spouse,
jointly, with right of survivorship) and shall be delivered as provided above to
or upon the written order of the person or persons exercising the Option. In the
event the Option shall be exercised by any person or persons after the legal
disability or death of the Awardee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All Shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable by the Company.
7. Shares to be Purchased for Investment. Unless the Company has
theretofore notified the Awardee that a registration statement covering the
Shares to be acquired upon the exercise of the Option has become effective under
the Securities Act of 1933 and the Company has not thereafter notified the
Awardee that such registration is no longer effective, or unless counsel to the
Company shall be otherwise satisfied that the Awardee would be permitted under
applicable law to immediately resell Shares acquired upon the exercise of the
Option, it shall be a condition to any exercise of this Option that the Shares
acquired upon such exercise be acquired for investment and not with a view to
distribution, and the person effecting such exercise shall submit to the Company
a certificate of such investment intent, together with such other evidence
supporting the same as the
Company may request. The Company shall be entitled to restrict the
transferability of the Shares issued upon any such exercise to the extent
necessary to avoid a risk of violation of the Securities Act of 1933 (or of any
rules or regulations promulgated thereunder) or of any state laws or
regulations. Such restrictions may, at the option of the Company, be noted or
set forth in full on the share certificates.
8. Non-Transferability of Option. This Option is not assignable or
transferable, in whole or in part, by the Awardee otherwise than by the laws of
descent and distribution, and during the lifetime of the Awardee the Option
shall be exercisable only by the Awardee or by his guardian or legal
representative.
9. Termination of Option. (a) The unexercised portion of the Option
(whether vested or not) shall automatically terminate and shall become null and
void and be of no further force or effect upon the first to occur of the
following:
(i) The Expiration Date;
(ii) The expiration of 30 days from the date that the Awardee ceases to be
an employee of the Company upon termination by resignation where such
resignation is not for Good Reason;
(iii) The expiration of twelve months from the date that the Optionee
ceases to be an employee of the Company or any of its Subsidiaries as
a result of the Awardee=s death, Disability, Termination without Cause
or for Good Reason;
(iv) Immediately if the Awardee ceases to be an employee of the Company or
any of its Subsidiaries if such termination is for Cause.
10. Withholding of Taxes. The obligation of the Company to deliver shares
of Common Stock upon the exercise of the Option shall be subject to applicable
federal, state and local tax withholding requirements.
If the exercise of this Option is subject to the withholding requirements
of applicable federal tax laws, the Committee may permit the Awardee, subject to
the provisions of the Plan and such additional withholding rules (the
"Withholding Rules") as shall be adopted by the Committee, to satisfy the
minimum federal, state and local withholding tax, in whole or in part, by
electing to have the Company withhold (or by returning to the Company) shares of
Common Stock, which shares shall be valued, for this purpose, at their Fair
Market Value on the date of exercise of the Option (or, if later, the date on
which the Optionee recognizes ordinary income with respect to such exercise)
(the "Determination Date"). An election to use shares of Common Stock to satisfy
tax withholding requirements must be made in compliance with and subject to the
Withholding Rules, and the Committee may not withhold shares in excess of the
number necessary to satisfy the
minimum federal, state and local income tax withholding requirements. In the
event shares of Common Stock acquired under the exercise of an ISO are used to
satisfy such withholding requirement, such shares of Common Stock must have been
held by the Awardee for a period of not less than the holding period described
in Section 422(a)(1) of the Code on the Determination Date, or if such shares of
Common Stock were acquired through exercise of a non-qualified stock option or
of an option under a similar plan, such option was granted to the Awardee at
least six months prior to the Determination Date.
11. Governing Law. This Option Agreement shall be construed in accordance
with, and its interpretation shall be governed by applicable federal law, and
otherwise by the laws of the State of Delaware.
12. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of this Agreement by the Committee and
any decision made by it with respect to this Agreement is final and binding.
13. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
contracts and other agreements to the extent of any discrepancies contained
between this document and such other document (including, without limitation,
sections 5.2(b)(iii) and 5.2(c)(iii) of the Employment Agreement).
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officers thereunto duly authorized, and the Awardee has hereunto
set his hand and seal, all on the day and year first above written.
MIM Corporation
By_______________________________________
Title ________________________________
ACCEPTED AND AGREED TO:
_________________________________________
Awardee
Notice of Exercise of Non-Qualified Stock Option
I hereby exercise the non-qualified stock option granted to me on
_______________________, 199__, by MIM Corporation, with respect to the
following number of shares of the $.0001 par value per share common stock of MIM
Corporation ("Shares") covered by said option:
Number of Shares to be purchased _______________
Option price per Share $______________
Total exercise price $______________
[Check one of the following to indicate method of payment:]
___ A. Enclosed is cash or its equivalent, in the amount of
$__________________, in full payment for such Shares.
___ B. Enclosed is/are ___________________ Share(s) with a total Fair Market
Value of $_______________ on the date hereof in full payment for such
Shares.
___ C. [Describe any other payment alternatives then available.]
___ D. Enclosed is cash or its equivalent in the amount of $____________, and
__ Share(s) with a total Fair Market Value of $__________ on the date
hereof, in [partial] [full] payment for such Shares.
Please have the certificate or certificates representing the purchased
Shares registered in the following name or names(1) ______________________ and
sent to __________________________.
DATED: _____________________, _________.
________________________________
Awardee's Signature
- -----------------------------
(1) Certificates may be registered in the name of the Awardee alone or in the
names of the Awardee and his or her spouse, jointly, with right of survivorship.
Exhibit 4.10
PERFORMANCE SHARES AGREEMENT
PERFORMANCE SHARES AGREEMENT (the "Agreement") made as of the _____ day of
_________, 1999 (the "Grant Date"), between MIM Corporation, a Delaware
corporation (the "Company"), and ____________________ (the "Awardee").
WHEREAS, the Company desires to afford the Awardee an opportunity to own
shares of the common stock of the Company, par value $.0001 per share ("Common
Shares"), as hereinafter provided, in accordance with the provisions of the MIM
Corporation 1996 Stock Incentive Plan, as amended and restated effective
December 1, 1998, a copy of which is attached (the "Plan").
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration the legal sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:
1. Grant of Restricted Shares. The Company hereby grants to the Awardee an
aggregate of _____________ Common Shares (the "Performance Shares"), the
effectiveness of which grant is contingent in all respects upon approval of the
Plan by the shareholders of the Company on or before ___________. The grant is
in all respects limited and conditioned as hereinafter provided, and is subject
to the terms and conditions of the Plan now in effect and as they may be amended
from time to time (which terms and conditions are and automatically shall be
incorporated herein by reference and made a part hereof and shall control in the
event of any conflict with any other terms of this Performance Shares
Agreement).
2. Vesting and Forfeiture. If the Awardee's Date of Termination does not
occur during the Restricted Period, then, at the end of the Restricted Period,
the Awardee shall become vested in all of the Performance Shares. If (a) the
Company meets the target Earnings Per Share for the year 2001 (as reflected on
Exhibit 1 attached hereto) and (b) the Awardee's Date of Termination does not
occur prior to December 31, 2001, then the Awardee shall become vested in all of
the Performance Shares upon closing of the Company's financial statements for
the year 2001 (the "Accelerated Vesting Date"). If the Awardee does not meet the
requirements for vesting contained in this paragraph, the Awardee shall
immediately forfeit all of the Performance Shares, except to the extent provided
as follows:
(a) If the Awardee's Date of Termination occurs by reason of the Awardee's
death, Disability or by reason of Termination without Cause or for Good Reason,
the Awardee shall become immediately vested, as of the Date of Termination, in
(i) 1/3 of the Performance Shares if the Date of Termination occurs before the
first anniversary of the Grant Date and the Company achieves the target Earnings
Per Share (as reflected on Exhibit 1) for the fiscal year in which the Date of
Termination occurs; (ii) 2/3 of the Performance Shares if the Date of
Termination occurs on or after the first anniversary but before the second
anniversary of the Grant Date and the Company
achieves the target Earnings Per Share (as reflected on Exhibit 1) for the
fiscal year in which the Date of Termination occurs; and, (iii) all of the
Performance Shares if the Date of Termination occurs on or after the second
anniversary but before the day following the third anniversary of the Grant Date
and the Company achieves the target Earnings Per Shares (as reflected on Exhibit
1) for the fiscal year in which the Date of Termination occurs.
(b) The Awardee shall become vested in all of the Performance Shares as of
the Date of Termination if the Awardee's Employment is terminated within one
year following such Change in Control (provided such termination occurs prior to
the end of the Restricted Period and such termination is a Termination without
Cause or is a Termination for Good Reason).
If the Awardee is at any time Terminated for Cause or if the Awardee
resigns without Good Reason, the Awardee shall forfeit all Performance Shares
that have not previously vested.
3. Delivery of Restricted Stock. As soon as practicable after the first to
occur of (a) the expiration of the Restricted Period, (b) the Awardee's Date of
Termination and (c) the date of a Change in Control, the Committee shall certify
in writing as to whether or not the performance objectives have been satisfied.
If the Committee certifies that the performance objectives have been satisfied,
or determines that Performance Shares otherwise have vested, the restrictions
applicable to such Performance Shares shall lapse and a certificate for the
number of Common Shares with respect to which the restrictions have lapsed shall
be delivered to the Awardee free and clear of all such restrictions.
4. Transfers. Performance Shares may not be sold, assigned, transferred,
pledged or otherwise encumbered until the Awardee is vested in the shares and
then only to the extent the Awardee is vested in the shares.
5. Dividends and Voting Rights. The Awardee shall be entitled to receive
any regular cash dividends paid with respect to Performance Shares that become
payable during the Restricted Period; provided, however, that no such dividends
shall be payable to or for the benefit of the Awardee with respect to record
dates occurring prior to the Grant Date, or with respect to record dates
occurring on or after the date, if any, on which the Awardee has forfeited
Performance Shares; and provided further that all distributions made with
respect to the Performance Shares as a result of any split, distribution or
combination of Performance Shares or other similar transaction shall be deemed
to be Performance Shares subject to the provisions of this Agreement. The
Awardee shall be entitled to vote the Performance Shares during the Restricted
Period to the same extent as would have been applicable to the Awardee if the
Awardee was then vested in the shares; provided, however, that the Awardee shall
not be entitled to vote the shares with respect to record dates for such voting
rights arising prior to the Grant Date, or with respect to record dates
occurring on or after the date, if any, on which the Awardee has forfeited the
Performance Shares.
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6. Deposit of Performance Shares. Each certificate issued in respect of
Performance Shares granted under this Agreement shall be registered in the name
of the Awardee and shall be deposited with the Company. The grant of Performance
Shares is conditioned upon the Awardee endorsing in blank a stock power for the
Performance Shares and delivering such stock power to the depository designated
by the Committee contemporaneously with the issuance and deposit of the
Performance Shares with the Company.
7. Definitions. For purposes of this Agreement, the terms used in this
Agreement shall be defined as follows:
(a) Date of Termination. The Awardee's "Date of Termination" shall be the
first day occurring on or after the Grant Date on which the Awardee's Employment
by the Company and its Subsidiaries and Affiliates is terminated, regardless of
the reason for the termination of Employment; provided that a termination of
Employment shall not be deemed to occur by reason of a transfer of the Awardee
between any of the Company and its Subsidiaries and Affiliates; and further
provided that the Awardee's employment shall not be considered terminated while
the Awardee is on a leave of absence from the Company or a Subsidiary or
Affiliate approved by the Awardee's employer.
(b) Designated Beneficiary. The term "Designated Beneficiary" means the
beneficiary or beneficiaries designated by the Awardee in a writing filed with
the Committee in such form and at such time as the Committee shall require.
(c) Disability. The term "Disability" shall have the meaning provided in
Section 22(e)(3) of the Code.
(d) Restricted Period. The term "Restricted Period" means the period
commencing on the Grant Date and ending on December 31, 2006.
(e) Termination Without Cause or For Good Reason. The term "Termination
without Cause or for Good Reason" shall mean the termination of the Awardee's
Employment by the Company and its Subsidiaries and Affiliates for reasons other
than "Cause" or by the Awardee for "Good Reason," as such quoted terms are
defined in the Employment Agreement between the Company and the Awardee. [If not
defined in the Employment Agreement or there is no Employment Agreement, a
definition will need to be inserted.]
(f) Plan Definitions. Except where the context clearly implies or indicates
the contrary, a word, term, or phrase used in the Plan shall have the same
meaning where used in this Agreement.
8. Shares Acquired for Investment. The Awardee hereby represents that the
Performance Shares are being acquired for investment for the Awardee's own
account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof.
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The Awardee understands that the Performance Shares have not been, and will not
be, registered under the Securities Act of 1933, as amended (the "Securities
Act"), or the securities laws of any state by reason of exemptions from the
registration provisions of the Securities Act and such laws which depend upon,
among other things, the bona fide nature of the investment intent and the
accuracy of the Awardee's representations as expressed herein.
9. Withholding of Taxes. Any obligation of the Company to deliver Common
Shares pursuant to this Agreement shall be subject to applicable federal, state
and local withholding tax requirements. The Company shall have the right to
require recipients or their beneficiaries or legal representatives to remit to
the Company an amount sufficient to satisfy such withholding tax requirements,
or to deduct from all payments to be made hereunder amounts sufficient to
satisfy all such withholding tax requirements. The Committee may, in its sole
discretion, permit a recipient to satisfy his or her tax withholding obligation
either by (i) surrendering Common Shares owned by the recipient or (ii) having
the Company withhold from Common Shares otherwise deliverable to the Awardee.
Shares surrendered or withheld shall be valued at their Fair Market Value as of
the date on which income is required to be recognized for income tax purposes.
The Awardee hereby agrees that he will not make an election under Section 83(b)
of the Code with respect to any or all of the Performance Shares.
10. Heirs and Successors. This Agreement shall be binding upon, and inure
to the benefit of, the Company and its successors and assigns, and upon any
person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business. If any
rights of the Awardee or benefits distributable to the Awardee under this
Agreement have not been exercised or distributed, respectively, at the time of
the Awardee's death, such rights shall be exercisable by the Designated
Beneficiary, and such benefits shall be distributed to the Designated
Beneficiary, in accordance with the provisions of this Agreement and the Plan.
If a deceased Awardee fails to designate a beneficiary, or if the Designated
Beneficiary does not survive the Awardee, any rights that would have been
exercisable by the Awardee and any benefits distributable to the Awardee shall
be exercised by or distributed to the legal representative of the estate of the
Awardee. If a deceased Awardee designates a beneficiary but the Designated
Beneficiary dies before the Designated Beneficiary's exercise of all rights
under this Agreement or before the complete distribution of benefits to the
Designated Beneficiary under this Agreement, then any rights that would have
been exercisable by the Designated Beneficiary shall be exercised by the legal
representative of the estate of the Designated Beneficiary, and any benefits
distributable to the Designated Beneficiary shall be distributed to the legal
representative of the estate of the Designated Beneficiary.
11. Governing Law. This Agreement shall be construed in accordance with,
and its interpretation shall be governed by applicable federal law, and
otherwise by the laws of the State of Delaware.
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12. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of this Agreement by the Committee and
any decision made by it with respect to this Agreement is final and binding.
13. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
contracts and other agreements to the extent of any discrepancies contained
between this document and such other document (including, without limitation,
sections 5.2(c)(v) and 5.1(c)(iii) of the Employment Agreement).
IN WITNESS WHEREOF, the Company has caused this Performance Shares
Agreement to be duly executed by its officers thereunto duly authorized, and the
Awardee has hereunto set his hand and seal, all on the day and year first above
written.
MIM CORPORATION
By ______________________________
Name:
Title:
ACCEPTED AND AGREED TO:
_________________________________
Awardee
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MIM Corporation
100 Clearbrook Road
Elmsford, NY 10523
May 27, 1999
MIM Corporation
100 Clearbrook Road
Elmsford, NY 10523
Ladies and Gentlemen:
I am the general counsel of MIM Corporation, a Delaware corporation (the
"Company"), and have represented the Company as such in connection with the
preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), of a
Registration Statement on Form S-8 of the Company (the "Registration Statement")
covering 2,675,000 shares (the "Shares") of the Common Stock, $0.0001 par value
per share, of the Company, to be issued pursuant to the Company's Amended and
Restated 1996 Stock Incentive Plan and Amended and Restated 1996 Non-Employee
Directors Stock Incentive Plan (collectively, the "Plans").
In rendering the opinion set forth herein, I have examined executed copies or
photocopies of: (1) the Registration Statement, the Reoffer Prospectus
constituting a part of the Registration Statement and the Plans; (ii) the
Amended and Restated Certificate of Incorporation of the Company, the Amended
and Restated By-laws of the Company and excerpts from the minute books of the
Company; (iii) the current forms of Incentive Stock Option Agreement,
Non-Qualified Stock Option Agreement and Performance Share Agreement, in each
case used in connection with the Plans (collectively, the "Agreements"); and
(iv) such other records, documents, certificates and other instruments as in my
judgment is necessary or appropriate as a basis for my opinion expressed below.
I have knowledge of all proceedings heretofore taken and am familiar with the
proceedings proposed to be taken by the Company in connection with the
authorization and issuance of the Shares.
Based upon the foregoing, and in reliance thereon, and subject to the
qualifications, assumptions and exceptions set forth herein, I am of the opinion
that upon the issuance of the Shares in accordance with the Plans, and in
accordance with the terms of any Agreement entered into pursuant to the terms
and conditions of the Plans, and as contemplated by the Registration Statement,
the Shares will be validly issued, fully paid and non-assessable.
-11-
The foregoing does not express, or purport to express, any opinion with respect
to the laws of any jurisdiction other than the laws of the State of New York,
the General Corporation Law of the State of Delaware and the federal securities
laws of the United States of America.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the heading "Legal Matters" in the
Registration Statement and the Reoffer Prospectus which forms a part thereof. In
giving this consent, I do not hereby admit that I am within the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations promulgated thereunder by the Commission. This opinion is given as
of the date hereof and I assume no obligation to update or supplement this
opinion to reflect any facts or circumstances which may occur after the date of
this opinion.
Respectfully submitted,
Barry A. Posner
General Counsel
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our report dated
February 12, 1999 (except with respect to the matter described in Note 7 as to
which the date is March 31, 1999) included in MIM Corporation's Form 10-K
for the year ended December 31, 1998 and to all references to our firm,
included in or made part of this registration statement.
ARTHUR ANDERSEN LLP
Roseland, NJ
May 21, 1999