Document:

Exhibit 10.1

 

NATIONAL FINANCIAL PARTNERS CORP.

EMPLOYEE STOCK PURCHASE PLAN

 

1.            Purpose.  The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase common stock of the Company.

2.            Definitions.

a.            "Board"  shall mean the Board of Directors of the Company.

b.            "Change in Capitalization" shall mean any any dividend or other distribution (whether in the form of cash, Common Stock, or other property), recapitalization, stock split, reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event.

c.            "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder.

d.            "Committee" shall mean the Board, the Compensation Committee of the Board, or such other Committee appointed by the Board to administer the Plan and to perform the functions set forth herein.

e.            "Common Stock" shall mean shares of common stock, par value $.10 per share, of the Company.

f.            "Company" shall mean National Financial Partners Corp., a Delaware corporation.

g.            "Compensation" shall mean the pre-tax fixed salary or base wages paid by the Company to an Employee as reported by the Company to the United States government (or other applicable government) for income tax purposes, including such Employee's portion of salary deferral contributions pursuant to Section 401(k) of the Code and any amount excludable pursuant to Section 125 of the Code, but excluding any bonus, fee, overtime pay, severance pay, expenses, stock option or other equity incentive income, or other special emolument or any credit or benefit under any employee plan maintained by the Company.

h.            "Continuous Status as an Employee" shall mean the absence of any interruption or termination of service as an Employee.  Continuous Status as an Employee shall not be considered interrupted in the case of a leave of absence expressly agreed to by the Company or a Designated Subsidiary, as appropriate (including, but not limited to, military or sick leave), provided that such leave is for a period of not more than 90 days or reemployment upon the expiration of such leave is guaranteed by contract or statute.

i.            "Designated Subsidiaries" shall mean the wholly-owned subsidiaries of the Company which have been designated by the Company from time to time in its sole discretion as eligible to participate in the Plan.

 

j.             "Employee" shall mean any person, including an officer, who is regularly employed by the Company or one of its Designated Subsidiaries.

k.             "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder.

l.             "Exercise Date" shall mean the last business day of each Offering Period.

m.             "Fair Market Value" per share as of a particular date shall mean (i) the closing sales price per share of Common Stock on the national securities exchange on which the Common Stock is principally traded, on such date or on the last preceding date on which there was a sale of such Common Stock on such exchange, or (ii) if the shares of Common Stock are not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Committee, in its sole discretion, shall determine.

n.             "Offering Date" shall mean the first business day of each calendar quarter of each Plan Year during the effectiveness of the Plan, or such other date or dates determined by the Committee.

o.             "Offering Period" shall mean each calendar quarter of each Plan Year during the effectiveness of the Plan, commencing on each Offering Date, or such other period or periods determined by the Committee.

p.             "Participant" shall mean an Employee who participates in the Plan.

q.             "Plan" shall mean this National Financial Partners Corp. Employee Stock Purchase Plan, as amended from time to time.

r.             "Plan Year" shall mean the calendar year, or such other period or periods determined by the Committee.

3.            Eligibility.  Subject to the requirements of Section 4b hereof, any person who (i) is an Employee as of an Offering Date, (ii) has maintained Continuous Status as an Employee for at least one year immediately preceding the Offering Date and (iii) is regularly scheduled to work, shall be eligible to participate in the Plan and be granted an option for the Offering Period commencing on the Offering Date immediately following satisfaction of these eligibility criteria; provided, however, that Employees of firms acquired by NFP in the quarter immediately preceding the Offering Date must also (x) have been employed by the newly acquired firm for at least the one
year period immediately prior to the effective date of the acquisition and (y) such acquisition effective date or acquisition closing date, whichever is later, must be at least 60 days before the relevant Offering Date; and provided further, that the Company shall have the right to exclude from eligibility and participation any executive officer of the Company or any subsidiary. 

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4.            Grant of Option; Participation.

a.            On each Offering Date, the Company shall commence an offer by granting each eligible Employee an option to purchase shares of Common Stock, subject to the limitations set forth in Sections 3 and 10 hereof.

b.            Each eligible Employee may elect to become a Participant in the Plan with respect to an Offering Period, only by filing an agreement with the Company authorizing payroll deductions (as set forth in Section 5 hereof).  Such authorization will remain in effect for all subsequent Offering Periods during which the Participant is an Employee eligible to participate in the Plan, until modified or terminated by the Participant.

c.            The option price per share of the Common Stock subject to an offering shall be 85% (or such other percentage determined by the Committee) of the lesser of (i) the Fair Market Value of a share of Common Stock as of the Offering Date or (ii) the Fair Market Value of a share of Common Stock as of the Exercise Date.

5.            Payroll Deductions

a.            A Participant may, in accordance with rules adopted by the Committee, authorize a payroll deduction (or such other method of payment determined by the Committee) of any whole percentage from 2% to 10% of such Participant's Compensation for each pay period.  A Participant may decrease, but may not increase, such payroll deduction (including a cessation of payroll deductions) at any time but not more frequently than once per calendar quarter, by filing a new authorization form with the Committee, which authorization shall take effect as soon as administratively possible.  For purposes of this Plan, any reference to contributions by payroll deduction is deemed to also include any other method of contribution determined by the Committee from time to time.

b.            All payroll deductions made by a Participant shall be credited to such Participant's account under the Plan.  A Participant may not make any additional payments into such account.

c.            A Participant may contribute a maximum of $10,000 under the Plan per calendar year.

6.            Exercise of Option.

a.            Unless a Participant withdraws from the Plan as provided in Section 8 hereof, such Participant's option to purchase Common Stock will be exercised automatically on the Exercise Date, and the maximum number of shares subject to such option will be purchased for such Participant at the applicable option price with the accumulated payroll deductions in such Participant's account.  During a Participant's lifetime, a Participant's option to purchase shares hereunder is exercisable only by such Participant.

b.            If applicable, any cash balance remaining in a Participant's account after whole shares are purchased shall be used to purchase fractional shares of Common Stock.

c.            The shares of Common Stock purchased upon exercise of an option hereunder shall be credited to the Participant's account under the Plan and shall be deemed to be transferred to the Participant on the Exercise Date and, except as otherwise provided herein, the Participant shall have all rights of a stockholder with respect to such shares.

 

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7.            Delivery of Common Stock.  All shares of Common Stock purchased under the Plan shall be placed, in book-entry form, in to a record-keeping account in the name of the Participant.  Upon request, the Company shall arrange the delivery to a Participant of a stock certificate representing the whole shares of Common Stock which the Participant requests to withdraw.  Withdrawals and sales may not occur prior to 90 days after the Exercise Date on which such shares of Common Stock were purchased.  

8.            Withdrawal; Termination of Employment.

a.            A Participant may withdraw all, but not less than all, of the payroll deductions credited to such Participant's account (that have not been used to purchase shares of Common Stock) under the Plan at any time by giving written notice to the Company received at least 10 days prior to the immediately following Exercise Date.  All such payroll deductions credited to such Participant's account will be paid to such Participant as soon as administratively possible after receipt of such Participant's notice of withdrawal.  In addition, a Participant's option for the Offering Period in which the withdrawal occurs will be automatically terminated.  After notice of withdrawal is provided by Participant and processed by the Company,
Participant’s payroll deductions for the purchase of shares of Common Stock will cease during the in effect Offering Period and shall remain in effect for any subsequent Offering Period.

b.            Upon termination of a Participant's Continuous Status as an Employee during the Offering Period for any reason, including voluntary termination, retirement or death, the payroll deductions credited to such Participant's account that have not been used to purchase shares of Common Stock will be returned to such Participant or, in the case of such Participant's death, to the person or persons entitled thereto under Section 12 hereof, and such Participant's option will be automatically terminated.

9.            Dividends and Interest.

a.            No interest or cash dividends shall accrue on, or be payable with respect to, the payroll deductions of a Participant in the Plan.

b.            Upon receipt of shares of Common Stock, each Participant shall receive dividends on the same basis as other stockholders of such shares.

10.            Stock.

a.            The maximum number of shares of Common Stock which shall be reserved for sale under the Plan shall be 3,500,000, subject to adjustment upon Changes in Capitalization of the Company as provided in Section 16 hereof.  Such shares of Common Stock may be authorized and unissued shares, treasury shares or shares purchased in the public market.  If the total number of shares which would otherwise be subject to options granted pursuant to Section 4a hereof on an Offering Date exceeds the number of shares then available under the Plan (after deduction of all shares for which options have been exercised or are then outstanding), the Committee shall make a pro rata allocation of the shares remaining available for option grant in as uniform a manner as shall be practicable and as it shall determine to be equitab
le.  In such event, the Committee shall give written notice to each Participant of such reduction of the number of option shares affected thereby and shall similarly reduce the rate of payroll deductions, if necessary.

 

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b.            Shares of Common Stock to be delivered to a Participant under the Plan will be registered in the name of the Participant or, at the election of the Participant, in the name of the Participant and another person as joint tenants with rights of survivorship.

11.          Administration.  The Plan shall be administered by the Committee, and the Committee may select an administrator to whom its duties and responsibilities hereunder may be delegated.  The Committee shall have full power and authority, subject to the provisions of the Plan, to promulgate such rules and regulations as it deems necessary for the proper administration of the Plan, to interpret the provisions and supervise the administration of the Plan, and to take all action in connection therewith or in relation thereto as it deems necessary or advisable.  Any decision reduced to writing and signed by a majority of the members of the Committee shall be fully effective as if it had been made at a meeting duly held and shall be binding on all parties.  The Company will
pay all expenses incurred in the administration of the Plan.  No member of the Committee shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan, and all members of the Committee shall be fully indemnified by the Company with respect to any such action, determination or interpretation.

12.          Designation of Beneficiary.

a.            A Participant may file, on forms supplied by and delivered to the Company, a written designation of a beneficiary who is to receive any shares and cash remaining in such Participant's account under the Plan in the event of the Participant's death.

b.            Such designation of beneficiary may be changed by the Participant at any time by written notice.  In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant's death, the Company shall deliver shares of Common stock and/or cash to the executor or administrator of the estate of the Participant or, if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

13.          Transferability.  Neither payroll deductions credited to a Participant's account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 12 hereof) by the Participant.  Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Section 8 hereof.

 

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14.          Use of Funds.  All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.

15.          Reports.  Individual accounts will be maintained for each Participant who purchases shares of Common Stock.  Statements of account will be given to Participants as soon as practicable following each Offering Period, which statements will set forth the amounts of payroll deductions, the per share purchase price, the number of shares of Common Stock purchased, the aggregate shares in the Participant's account and the remaining cash balance, if any.

16.          Effect of Certain Changes.  In the event of a Change in Capitalization, the Committee shall make such adjustments under the Plan as it determines are necessary or desirable, including without limitation, adjustments to the number of shares of Common Stock which have been authorized for issuance under the Plan but have not yet been purchased or placed under option, as well as the price per share of Common Stock covered by each option under the Plan which has not yet been exercised.

17.          Amendment or Termination.  The Board may at any time terminate or amend the Plan at any time and for any reason or no reason.  Except as provided in Section 16 hereof, no such termination can adversely affect options previously granted and no amendment may make any change in any option theretofore granted which adversely affects the rights of any Participant.  No amendment shall be effective unless approved by the stockholders of the Company if stockholder approval of such amendment is required to comply with Section 423 of the Code, Rule 16b-3 under the Exchange Act or to comply with any other law, regulation or stock exchange rule.

18.          Notices.  All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

19.          Regulations and Other Approvals; Governing Law.

a.            This Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of Delaware without giving effect to the choice of law principles thereof, except to the extent that such law is preempted by federal law.

b.            The obligation of the Company to sell or deliver shares of Common Stock with respect to options granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.

c.            The Plan is intended to comply with Section 423 of the Code and Rule 16b-3 under the Exchange Act and the Committee shall interpret and administer the provisions of the Plan in a manner consistent therewith.  Any provisions inconsistent with such Rule shall be inoperative and shall not affect the validity of the Plan.

 

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20.          Withholding of Taxes.  If the Participant makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any share or shares issued to such Participant pursuant to such Participant's exercise of an option, and such disposition occurs within the two-year period commencing on the day after the Offering Date or within the one-year period commencing on the day after the Exercise Date, such Participant shall, within ten (10) days of such disposition, notify the Company thereof and thereafter immediately deliver to the Company any amount of Federal, state or local income taxes and other amounts which the Company informs the Participant the Company is required to withhold.

21.          Effective Date.  The Plan was adopted by the Board on March 3, 2006, and approved by the Company's stockholders on May 17, 2006.  

 

7Amendment No. 3 and Waiver, dated December 8, 2006 to the Credit Agreement

 Exhibit 4.1 
 AMENDMENT NO. 3 AND WAIVER 
 TO CREDIT AGREEMENT 
 AMENDMENT NO. 3 AND WAIVER, dated as of December 8, 2006 (this “Amendment and Waiver”) to the Credit Agreement, dated as of
January 28, 2005 (as amended, restated, modified or otherwise supplemented, from time to time, the “Credit Agreement”), by and among NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC. (the “Borrower”), JPMORGAN CHASE BANK,
N.A., as Administrative Agent and the LENDERS from time to time party thereto (each, a “Lender” and, collectively, the “Lenders”). 
 WHEREAS, the Borrower has requested, and the Required Lenders have agreed, subject to the terms and conditions of this Amendment and Waiver, to amend and waive certain provisions of the Credit Agreement as set
forth herein. 
 NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties hereto
agree as follows: 
 1. Amendments. 
 a. The first sentence of the definition of “Consolidated EBITDA” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to provide as follows: 
 “Consolidated EBITDA” means the sum of (i) net income plus (ii) interest expense plus (iii) income tax
expense plus (iv) depreciation and amortization expense, plus (v) non-cash extraordinary losses, plus (vi) non-cash charges incurred in connection with (a) accounting for stock-based compensation expense and
(b) changes to Statements of Financial Accounting Standards, minus the sum of interest income, all extraordinary or unusual gains, and any cash payments made during such period with respect to the items described in clause (vi)(b) above
subsequent to the fiscal quarter in which the relevant non-cash expense or loss was reflected as a charge on the financial statements of the Borrower.” 
 b. Section 6.04(b) of the Credit Agreement is hereby amended and restated in its entirety to provide as follows: 
 “(b) investments by the Borrower in the capital stock of its Subsidiaries and as set forth on Schedule 6.04;” 
 c. Section 6.04 of the Credit Agreement is further amended by adding a new subsection “(g)” at the end of such Section as follows: 
 “(g) without relieving the Borrower of its obligations under Sections 5.09 and 5.10 hereof, if required at such time, the formation of, and ownership
of, stock in any newly created, established or acquired Subsidiary of the Company.” 

 2. Waivers. 
 The Lenders hereby waive compliance by the Borrower with the Credit Agreement and the other Loan Documents, including, but not limited to, Sections 5.01(b), 5.01(c) and 5.07 of the Credit Agreement, and hereby waive
any Event of Default that would arise under the Credit Agreement, including, but not limited to, the Event of Default that would arise under paragraphs (c), (d) and (e) of Article VII of the Credit Agreement, each with respect to
(a) the late receipt of (i) the Borrower’s consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows required pursuant to Section 5.01(b) of the Credit Agreement and (ii) the
certificate of a Financial Officer of the Borrower required pursuant to section 5.01(c) of the Credit Agreement, each for the fiscal quarter ended September 30, 2006 and (b) the failure of the Borrower to deliver the same to the Securities
and Exchange Commission, provided that such statements and certificate, along with cash flow projections for the fiscal quarter commencing January 1, 2007 and for the three fiscal quarters ending thereafter (collectively, the
“Required Documents”), are received by the Lenders on or before February 27, 2007 and such documents and information required to be delivered to the Securities and Exchange Commission shall have been delivered on or before such date.
Notwithstanding anything to the contrary herein or in the Credit Agreement, the total Revolving Credit Exposures of the Lenders shall not exceed $20,000,000 at any time prior to receipt by the Lenders of the Required Documents. 
 3. Conditions to Effectiveness. 
 This
Amendment and Waiver shall become effective upon receipt by the Administrative Agent of (a) this Amendment and Waiver duly executed by each of the parties hereto, and (b) payment in full of an amendment/waiver fee in the amount of $20,000,
for the pro rata distribution to the Lenders. 
 4 . Miscellaneous. 
 The amendments and waivers herein contained are limited specifically to the matters set forth above and do not constitute directly or by implication a
waiver or amendment of any other provision of the Credit Agreement or a waiver of any Default or Event of Default which may occur or may have occurred. 
 The Borrower hereby agrees to pay all of the Administrative Agent’s reasonable attorneys’ fees incurred in connection with the preparation, execution and delivery of this Amendment and Waiver, including all
outstanding amounts, promptly following receipt of a statement describing such fees. 
 Capitalized terms used herein and not otherwise
defined herein shall have the same meanings as defined in the Credit Agreement. 
 Except as expressly amended hereby, or as may have been
previously amended, the Credit Agreement shall remain in full force and effect in accordance with the original terms thereof. 
 The Borrower
hereby represents and warrants that (a) after giving effect to this Amendment and Waiver, the representations and warranties in the Credit Agreement and the other Loan Documents are true and correct in all material respects as of the date
hereof with the 
  

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 same effect as though such representations and warranties have been made on and as of such date, unless such
representation is as of a specific date, in which case, as of such date, and (b) after giving effect to this Amendment and Waiver, no Default or Event of Default has occurred and is continuing. 
 This Amendment and Waiver may be executed in one or more counterparts, each of which shall constitute an original, but all of which when taken together
shall constitute but one instrument. 
 THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. 
 This Amendment and Waiver shall constitute a Loan Document.

 [the next page is the signature page] 
  

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 IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent have caused this
Amendment and Waiver to be duly executed as of the day and year first above written. 
  

			
	 NATIONAL MEDICAL HEALTH CARD
 SYSTEMS, INC.

		
	By:	 	 /s/ Stuart Diamond

	Name:	 	Stuart Diamond
	Title:	 	Chief Financial Officer
	
	 JPMORGAN CHASE BANK, N.A., as
 Administrative Agent and as a Lender

		
	By:	 	 /s/ Stephen Zajac

	Name:	 	Stephen Zajac
	Title:	 	Vice President
	
	 HSBC BANK USA, NATIONAL ASSOCIATION, as
 a Lender

		
	By:	 	 /s/ John Garside

	Name:	 	John Garside
	Title:	 	Vice President
	
	WACHOVIA BANK, N.A., as a Lender
		
	By:	 	 /s/ Daniel W. O’Donnell

	Name:	 	Daniel W. O’Donnell
	Title:	 	Senior Vice President

  

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 CONSENT 
 Each of the undersigned, not parties to the Credit Agreement but each a Guarantor under a Corporate Guaranty, hereby consents to and acknowledges the terms of the Amendment to which this consent is attached and
confirms that its Corporate Guaranty is in full force and effect and reaffirms its continuing liability under its Corporate Guaranty in respect of the Credit Agreement as amended hereby and all the documents, instruments and agreements executed
pursuant thereto or in connection therewith, without offset, defense or counterclaim (any such offset, defense or counterclaim as may exist being hereby irrevocably waived by such guarantor). 
  

			
	NMHCRX MAIL ORDER, INC.
	INTEGRAIL, INC.
	NMHC FUNDING, LLC
	NMHCRX, INC.
	INTEQ CORP.
	INTEQ TX CORP.
	INTEQ PBM, L.P.
	PORTLAND PROFESSIONAL PHARMACY
	 PORTLAND PROFESSIONAL PHARMACY ASSOCIATES

	SPECIALTY PHARMACY CARE, INC.
	CENTRUS CORPORATION
	NATIONAL MEDICAL HEALTH CARD IPA, INC.
	NMHCRX CONTRACTS, INC.
	PHARMACY ASSOCIATES, INC.
	INTERCHANGE PMP, INC.
	PCN DE CORP.
	PHARMACEUTICAL CARE NETWORK
	NMHC GROUP SOLUTIONS INSURANCE, INC.
		
	By:	 	 /s/ Stuart Diamond

		 	Stuart Diamond, the Treasurer of each of the foregoing entities

  

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