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Exhibit 4.3
ACCREDO HEALTH,
INCORPORATED
2002 LONG-TERM INCENTIVE
PLAN
As amended and restated
effective August 18, 2005
to reflect the merger (the
“Merger”) of Accredo Health, Incorporated with and into
a
subsidiary of Medco Health
Solutions, Inc. (“Medco”)
ARTICLE I
PURPOSE
1.1. GENERAL. The purpose of
the Accredo Health, Incorporated 2002 Long-Term Incentive Plan (the
“Plan”) is to promote the success, and enhance the
value, of Accredo Health, Incorporated (the
“Corporation”), and its parent company Medco Health
Solutions, Inc. (“Medco”) by linking the personal
interests of its employees to those of Medco’s stockholders
and by providing such persons with an incentive for outstanding
performance. The Plan is further intended to provide flexibility to
the Corporation in its ability to motivate, attract, and retain the
services of employees upon whose judgment, interest, and special
effort the successful conduct of the Corporation’s operation
is largely dependent. Accordingly, the Plan permits the grant of
incentive awards from time to time to selected
employees.
ARTICLE 2
EFFECTIVE DATE
2.1. EFFECTIVE DATE. The Plan
became effective as of the date it was first approved by both the
Corporation’s board and its stockholders. The Plan was
subsequently amended and as amended approved by the
Corporation’s stockholders on November 22, 2004. In
connection with the merger of the Corporation with and into a
subsidiary of Medco, the plan was assumed by Medco and shares of
Medco Common Stock were substituted for shares of the Corporation,
effective as of August 18, 2005.
ARTICLE 3
DEFINITIONS
3.1. DEFINITIONS. When a word
or phrase appears in this Plan with the initial letter capitalized,
and the word or phrase does not commence a sentence, the word or
phrase shall generally be given the meaning ascribed to it in this
Section or in Section 1.1 unless a clearly different meaning is
required by the context. The following words and phrases shall have
the following meanings:
(a) “Award” means
any Option, Restricted Stock Award, or any other right or interest
relating to Stock or cash, granted to a Participant under the
Plan.
(b) “Award
Agreement” means any written agreement, contract, or other
instrument or document evidencing an Award.
(c) “Board” means
the Board of Directors of Medco Health Solutions, Inc.
(d) “Cause” as a
reason for a Participant’s termination of employment shall
have the meaning assigned such term in the employment agreement, if
any, between such Participant and the Corporation or an affiliated
company, provided, however that if there is no such employment
agreement in which such term is defined, “Cause” shall
mean any of the following acts by the Participant, as determined by
the Board: gross neglect of duty, prolonged absence from duty
without the consent of the Corporation, intentionally engaging in
any activity that is in conflict with or adverse to the business or
other interests of the Corporation, or willful misconduct,
misfeasance or malfeasance of duty which is reasonably determined
to be detrimental to the Corporation.
(e) “Change in
Control” means and includes:
(1) The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the 1934 Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
1934 Act) of 25% or more of the combined voting power of the then
outstanding voting securities of Medco entitled to vote generally
in the election of directors (the “Outstanding Corporation
Voting Securities”); provided, however, that for purposes of
this subsection (1), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition by a Person who
is on the Effective Date the beneficial owner of 25% or more of the
Outstanding Corporation Voting Securities, (ii) any acquisition
directly from Medco, (iii) any acquisition by the Medco, (iv) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Medco or any corporation controlled by
Medco, or (v) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
subsection (3) of this definition; or
(2) Individuals who, as of
the Effective Time, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Time whose
election, or nomination for election by Medco’s stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(3) Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of Medco (a
“Business Combination”), in each case, unless,
following such Business Combination, (i) all or substantially all
of the individuals and entities who were
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the beneficial owners of the
Outstanding Corporation Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns Medco or all or substantially all
of Medco’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Corporation Voting Securities, and (ii) no Person
(excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of Medco or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 25% or more of the combined voting
power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(4) Approval by the
stockholders of Medco of a complete liquidation or dissolution of
Medco.
(f) “Code” means
the Internal Revenue Code of 1986, as amended from time to
time.
(g) “Committee”
means the committee of the Board described in Article 4.
(h) “Corporation”
means Accredo Health, Incorporated, a Delaware
corporation.
(i) “Covered
Employee” means a covered employee as defined in Code Section
162(m)(3).
(j) “Disability”
shall mean any illness or other physical or mental condition of a
Participant that renders the Participant incapable of performing
his customary and usual duties for the Corporation, or any
medically determinable illness or other physical or mental
condition resulting from a bodily injury, disease or mental
disorder which, in the judgment of the Committee, is permanent and
continuous in nature. The Committee may require such medical or
other evidence as it deems necessary to judge the nature and
permanency of the Participant’s condition. Notwithstanding
the above, with respect to an Incentive Stock Option, Disability
shall mean Permanent and Total Disability as defined in Section
22(e)(3) of the Code.
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(k) “Effective
Date” has the meaning assigned such term in Section
2.1.
(l) “Fair Market
Value”, with respect to grants made after the effective time
of the Merger, shall mean the average (mean) of the highest and
lowest sales prices of a share of Common Stock, as reported on the
New York Stock Exchange (or any other reporting system selected by
the Committee, in its sole discretion) on the date as of which the
determination is being made or, if no sale of shares of Common
Stock is reported on this date, on the next preceding day on which
there were sales of shares of Common Stock reported. Prior to the
effective time of the Merger, Fair Market Value means on any date,
(i) if the Stock is listed on a securities exchange or is traded
over the Nasdaq National Market, the closing sales price on such
exchange or over such system on such date or, in the absence of
reported sales on such date, the closing sales price on the
immediately preceding date on which sales were reported, or (ii) if
the Stock is not listed on a securities exchange or traded over the
Nasdaq National Market, the mean between the bid and offered prices
as quoted by Nasdaq for such date, provided that if the Stock is
not quoted on Nasdaq or it is determined that the fair market value
is not properly reflected by such Nasdaq quotations, Fair Market
Value will be determined by such other method as the Committee
determines in good faith to be reasonable.
(m) “Incentive Stock
Option” means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor provision
thereto.
(n) “Medco” means
Medco Health Solutions, Inc.
(o) “Non-Qualified
Stock Option” means an Option that is not an Incentive Stock
Option.
(p) “Option”
means a right granted to a Participant under Article 7 of the Plan
to purchase Stock at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a
Non-Qualified Stock Option.
(q) “Other Stock-Based
Award” means a right, granted to a Participant that relates
to or is valued by reference to Stock or other Awards relating to
Stock.
(r) “Parent”
means a corporation which owns or beneficially owns a majority of
the outstanding voting stock or voting power of the Corporation.
Notwithstanding the above, with respect to an Incentive Stock
Option, Parent shall have the meaning set forth in Section 424(e)
of the Code.
(s) “Participant”
means a person who, as an employee, officer, consultant or director
of the Corporation or any Subsidiary, has been granted an Award
under the Plan.
(t) “Plan” means
the Accredo Health, Incorporated 2002 Long-Term Incentive Plan, as
amended from time to time.
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(u) “Restricted Stock
Award” means Stock granted to a Participant under Article 8
that is subject to certain restrictions and to risk of
forfeiture.
(v) “Retirement”
means a Participant’s voluntary termination of employment
with the Corporation, Parent or Subsidiary after attaining age
55.
(w) “Stock” means
the $.01 par value common stock of Medco and such other securities
of Medco as may be substituted for Stock pursuant to Article
10.
(x) “Subsidiary”
means any corporation, limited liability company, partnership or
other entity of which a majority of the outstanding voting stock or
voting power is beneficially owned directly or indirectly by the
Corporation. Notwithstanding the above, with respect to an
Incentive Stock Option, Subsidiary shall have the meaning set forth
in Section 424(f) of the Code.
(y) “1933 Act”
means the Securities Act of 1933, as amended from time to
time.
(z) “1934 Act”
means the Securities Exchange Act of 1934, as amended from time to
time.
ARTICLE 4
ADMINISTRATION
4.1. COMMITTEE. The Plan
shall be administered by a committee appointed by the Board (which
Committee shall consist of two or more directors) or, at the
discretion of the Board from time to time, the Plan may be
administered by the Board. The Committee shall consist of two or
more members of the Board. It is intended that the directors
appointed to serve on the Committee shall be “non-employee
directors” (within the meaning of Rule 16b-3 promulgated
under the 1934 Act) and “outside directors” (within the
meaning of Code Section 162(m) and the regulations thereunder) to
the extent that Rule 16b-3 and, if necessary for relief from the
limitation under Code Section 162(m) and such relief is sought by
Medco, Code Section 162(m), respectively, are applicable. However,
the mere fact that a Committee member shall fail to qualify under
either of the foregoing requirements shall not invalidate any Award
made by the Committee which Award is otherwise validly made under
the Plan. The members of the Committee shall be appointed by, and
may be changed at any time and from time to time in the discretion
of, the Board. During any time that the Board is acting as
administrator of the Plan, it shall have all the powers of the
Committee hereunder, and any reference herein to the Committee
(other than in this Section 4.1) shall include the
Board.
4.2. ACTION BY THE COMMITTEE.
For purposes of administering the Plan, the following rules of
procedure shall govern the Committee. A majority of the Committee
shall constitute a quorum. The acts of a majority of the members
present at any meeting at which a quorum is present, and acts
approved unanimously in writing by
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the members of the Committee in lieu of
a meeting, shall be deemed the acts of the Committee. Each member
of the Committee is entitled to, in good faith, rely or act upon
any report or other information furnished to that member by any
officer or other employee of the Corporation or any Parent or
Subsidiary, the Corporation’s independent certified public
accountants, or any executive compensation consultant or other
professional retained by the Corporation to assist in the
administration of the Plan.
4.3. AUTHORITY OF COMMITTEE.
Except as provided below, the Committee has the exclusive power,
authority and discretion to:
(a) Designate
Participants;
(b) Determine the type or
types of Awards to be granted to each Participant;
(c) Determine the number of
Awards to be granted and the number of shares of Stock to which an
Award will relate;
(d) Determine the terms and
conditions of any Award granted under the Plan, including but not
limited to, the exercise price, grant price, or purchase price, any
restrictions or limitations on the Award, any schedule for lapse of
forfeiture restrictions or restrictions on the exercisability of an
Award, and accelerations or waivers thereof, based in each case on
such considerations as the Committee in its sole discretion
determines;
(e) Accelerate the vesting or
lapse of restrictions of any outstanding Award, based in each case
on such considerations as the Committee in its sole discretion
determines;
(f) Determine whether, to
what extent, and under what circumstances an Award may be settled
in, or the exercise price of an Award may be paid in, cash, Stock,
other Awards, or other property, or an Award may be canceled,
forfeited, or surrendered;
(g) Prescribe the form of
each Award Agreement, which need not be identical for each
Participant;
(h) Decide all other matters
that must be determined in connection with an Award;
(i) Establish, adopt or
revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;
(j) Make all other decisions
and determinations that may be required under the Plan or as the
Committee deems necessary or advisable to administer the
Plan;
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(k) Amend the Plan or any
Award Agreement as provided herein; and
(l) Adopt such modifications,
procedures, and subplans as may be necessary or desirable to comply
with provisions of the laws of non-U.S. jurisdictions in which the
Corporation or any Parent or Subsidiary may operate, in order to
assure the viability of the benefits of Awards granted to
participants located in such other jurisdictions and to meet the
objectives of the Plan.
Notwithstanding the above,
the Board or the Committee may and hereby does expressly delegate
to the Chief Executive Officer of Medco all of the
Committee’s authority under subsections (a), (b) and (c)
above; provided that such delegation shall be limited to a number
of Awards specified by the Committee; and provided further that no
officer may grant Awards to himself or to eligible Participants
who, at the time of grant, are or are anticipated to become, either
(i) Covered Employees or (ii) persons subject to the insider
trading restrictions of Section 16 of the 1934 Act.
4.4. DECISIONS BINDING. The
Committee’s interpretation of the Plan, any Awards granted
under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final,
binding, and conclusive on all parties.
ARTICLE 5
SHARES SUBJECT TO THE
PLAN
(Post-Merger)
5.1. NUMBER OF SHARES.
Subject to adjustment as provided in Section 10.1, the aggregate
number of shares of Stock reserved and available for Awards shall
be 5,711,695, of which not more than 10% may be granted as Awards
of Restricted Stock. As of the Effective Time, Awards under the
Plan were outstanding with respect to 3,775,093 shares.
5.2. LAPSED AWARDS. To the
extent that an Award is canceled, terminates, expires or lapses for
any reason, any shares of Stock subject to the Award will again be
available for the grant of an Award under the Plan.
5.3. STOCK DISTRIBUTED. Any
Stock distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Stock, treasury Stock or Stock
purchased on the open market.
5.4. LIMITATION ON AWARDS.
Notwithstanding any provision in the Plan to the contrary (but
subject to adjustment as provided in Section 10.1), the maximum
number of shares of Stock with respect to one or more Options that
may be granted during any one calendar year under the Plan to any
one Participant shall be 467,135. The maximum fair market value
(measured as of the date of grant) of any Restricted Stock Awards
that may be received
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