<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly Report pursuant to Section 13 or 15 (d) of the Securities
- ----- Exchange Act of 1934 for the quarterly period ended March 31, 1998
or
Transition Report pursuant to Section 13 or 15 (d) of the Securities
- ----- Exchange Act of 1934 for the transition period from
to ------------------
---------------------------------------------
Commission file number 0-27056
Healthdyne Information Enterprises, Inc.
----------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2112366
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 Parkway Place, Suite 1100, Marietta, Georgia 30067
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 423-8450
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- ----
The number of shares outstanding of the issuer's only class of Common Stock,
$.01 par value, as of April 30, 1998 was 21,020,953.
Exhibit Index is on Page 14 herein.
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Healthdyne Information Enterprises, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
--------- ------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 4,146 $ 7,732
Trade accounts receivable, less allowance of $376 and $407 at
March 31, 1998 and December 31, 1997, respectively 6,657 5,628
Other current assets 1,442 1,338
-------- --------
Total current assets 12,245 14,698
Notes receivable 341 335
Purchased software, net of accumulated amortization of $915 and $778
at March 31, 1998 and December 31, 1997, respectively 1,942 2,397
Capitalized software, net of accumulated amortization of $158 and $122 at
March 31, 1998 and December 31, 1997, respectively 780 564
Property and equipment, net of accumulated depreciation of $1,147 and
$1,013 at March 31, 1998 and December 31, 1997, respectively 1,644 1,474
Excess of cost over net assets of businesses acquired, less
accumulated amortization of $2,113 and $1,939 at March 31, 1998
and December 31, 1997, respectively 8,329 8,503
Other assets 39 37
-------- --------
Total assets $ 25,320 $ 28,008
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of long-term debt and capital lease obligations $ 356 $ 3,501
Accounts payable, principally trade 794 536
Accrued liabilities 1,657 2,673
Deferred service revenue 3,150 2,666
-------- --------
Total current liabilities 5,957 9,376
Long-term debt and capital lease obligations, excluding current installments 406 260
Other liabilities 280 280
-------- --------
Total liabilities 6,643 9,916
-------- --------
Shareholders' equity:
Preferred stock, without par value. Authorized 20,000 shares;
designated Series A cumulative preferred stock 500 shares;
issued none 0 0
Common stock, $.01 par value. Authorized 50,000 shares; issued and
outstanding 20,902 and 20,863 shares at March 31, 1998 and
December 31, 1997, respectively 209 209
Additional paid-in capital 34,347 34,114
Accumulated deficit (15,879) (16,231)
-------- --------
Total shareholders' equity 18,677 18,092
-------- --------
Commitments
Total liabilities and shareholders' equity $ 25,320 $ 28,008
======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE> 3
Healthdyne Information Enterprises, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1998 1997
-------- --------
(Unaudited)
<S> <C> <C>
Revenue:
Software $ 1,905 $ 1,273
Services 2,796 2,087
-------- --------
Total revenue 4,701 3,360
-------- --------
Cost of revenue:
Software 222 522
Services 1,358 1,347
-------- --------
Total cost of revenue 1,580 1,869
-------- --------
Gross profit 3,121 1,491
-------- --------
Operating expenses:
Sales and marketing 1,115 762
Research and development 543 434
General and administrative 1,008 1,002
-------- --------
Total operating expenses 2,666 2,198
-------- --------
Operating earnings (loss) 455 (707)
Losses of affiliate 0 (31)
Interest income, net 41 67
-------- --------
Earnings (loss) before income taxes 496 (671)
Income tax (expense) benefit (144) 168
-------- --------
Net earnings (loss) $ 352 $ (503)
======== ========
Net earnings (loss) per share of common stock:
Basic $ 0.02 $ (0.02)
======== ========
Diluted $ 0.02 $ (0.02)
======== ========
Shares used in the calculation of net earnings (loss) per share:
Basic 20,902 20,182
======== ========
Diluted 21,689 20,182
======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 4
Healthdyne Information Enterprises, Inc. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1998 1997
-------- --------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 352 $ (503)
Adjustments to reconcile net earnings (loss) to net cash
used in operating activities:
Losses of affiliate 0 31
Provision for doubtful accounts 0 (89)
Depreciation and amortization 481 549
(Increase) decrease in trade accounts receivable (1,093) 84
Increase in other current assets (111) (297)
Increase (decrease) in accounts payable 321 (151)
Decrease in accrued liabilities (477) (464)
Increase in deferred service revenue 484 407
-------- --------
Net cash used in operating activities (43) (433)
-------- --------
Cash flows from investing activities:
Purchased software (137) (45)
Capitalized software development costs (252) (237)
Capital expenditures (34) (274)
Change in other assets (8) (319)
-------- --------
Net cash used in investing activities (431) (875)
-------- --------
Cash flows before financing activities (474) (1,308)
-------- --------
Cash flows from financing activities:
Principal payments on long-term debt, net (3,353) (20)
Proceeds from the issuance of common stock 241 51
-------- --------
Net cash (used in) provided by financing activities (3,112) 31
-------- --------
Net decrease in cash and cash equivalents (3,586) (1,277)
Cash and cash equivalents at beginning of period 7,732 10,743
-------- --------
Cash and cash equivalents at end of period $ 4,146 $ 9,466
======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
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Healthdyne Information Enterprises, Inc. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
(Unaudited)
1. General:
The consolidated condensed financial statements as of March 31, 1998 and for the
three months ended March 31, 1998 and 1997 are unaudited. In the opinion of
management, all adjustments, consisting of normal recurring accruals, necessary
for the fair presentation of the consolidated financial position and results of
operations and cash flows for the periods presented have been included. Results
for the interim periods are not necessarily indicative of results that may be
expected for the full year.
These consolidated condensed financial statements should be read in conjunction
with the consolidated financial statements and notes included in the Annual
Report on Form 10-K of Healthdyne Information Enterprises, Inc. ("HIE" or the
"Company") for the year ended December 31, 1997.
2. Major Customers:
No single customer accounted for more than 10% of the Company's revenue for the
three months ended March 31, 1998. One customer accounted for 25% of the
Company's revenue during the three months ended March 31, 1997. No single
distributor provided customers to the Company that accounted for more than 10%
of the Company's revenue for the three months ended March 31, 1998 and 1997.
3. Earnings (Loss) Per Share of Common Stock:
On December 31, 1997, the Company adopted Statement of Financial Accounting
Standards No. 128, Earnings Per Share ("SFAS 128"), which prescribes the
calculation methodology and financial reporting requirements for basic and
diluted earnings per share. Basic earnings (loss) per common share available to
common shareholders are based on the weighted average number of common shares
outstanding. Diluted earnings (loss) per common share available to common
shareholders are based on the weighted average number of common shares
outstanding and dilutive potential common shares, such as dilutive stock
options. All prior period net earnings (loss) data presented in these
consolidated condensed financial statements have been restated to conform
to the provisions of SFAS 128.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Except for the historical information contained herein, this report
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those discussed herein.
Factors that could cause or contribute to such differences include, but are not
limited to, the Company's limited operating history and lack of profitability in
1997 and 1995, competitive pressures, the mix of software and service revenue,
the mix of direct and indirect sales, sales timing, changes in pricing policies,
undetected errors or bugs in the software, delays in product development,
lower-than-expected demand for the Company's software tools or services,
business conditions in the integrated healthcare delivery network market and
other markets, the Company's ability to modify its software for use in
non-healthcare industries, risks associated with possible acquisitions, general
economic conditions and the risk factors detailed from time to time in the
Company's periodic reports and registration statements filed with the Securities
and Exchange Commission, including the Company's Annual Report on Form 10-K for
the year ended December 31, 1997.
Overview
Healthdyne Information Enterprises, Inc. ("HIE" or the "Company") was
incorporated in Georgia on June 15, 1994 and was a wholly-owned subsidiary of
Healthdyne, Inc. ("Healthdyne") until November 6, 1995, at which time Healthdyne
distributed all of the outstanding shares of HIE to Healthdyne's shareholders
(the "Spin-Off"). HIE's common stock is publicly traded on the Nasdaq National
Market under the symbol "HDIE." The Company provides software tools and services
to achieve the enterprise-wide integration of information.
The Company generates revenue from licensing integration software tools and
providing integration services, such as education, consulting, project
management, information integration, technology-driven re-design, software
maintenance, implementation and expert-sourcing.
Software licenses are generally granted on a perpetual basis for a one-time,
up-front fee. A standard per-student amount is charged for education classes.
Consulting services are generally provided for a fixed fee based on estimated
hours of service to be provided at standard hourly rates. Project management,
information integration, technology-driven re-design and implementation fees are
generally based on actual hours of service at standard hourly rates. Software
maintenance agreements are generally one-year renewable service contracts for a
prepaid standard fee. Expert-sourcing agreements are generally multiple-year
renewable service contracts for a negotiated monthly fee.
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<PAGE> 7
On December 31, 1997, the Company exercised its option to acquire the remaining
50% ownership interest of Criterion Health Strategies, Inc. ("CHS"). CHS
licenses the Criterion data integration software tool and provides project
management, information integration and technology-driven re-design services.
Since HIE did not have a majority ownership interest in CHS in 1997 and prior
years, the operating results of CHS were not consolidated with the Company's
consolidated operating results. HIE's share of CHS' operating results are
presented as Losses of Affiliate in the accompanying Consolidated Condensed
Statements of Operations. CHS's operating results were combined with the
Company's beginning on January 1, 1998.
The Company is aware of the potential issues associated with the programming
code in existing computer systems as the year 2000 approaches. The primary issue
is whether or not computer systems will properly recognize date-sensitive
information when the year changes to 2000. Systems that do not properly
recognize such information could generate erroneous data or cause the system to
fail. Management does not anticipate that the Company will incur either
significant operating expenses or significant capital expenditures to be year
2000 compliant with respect to both its internal systems and the software tools
that it markets. In fact, the Company's software tools and services could be
utilized by HIE's customers and prospects to enable their systems to become year
2000 compliant.
The Company expects the following external factors to affect the market for
integration software tools and integration services in future years: (1) the
continued consolidation of enterprises within various industries to achieve
economies of scale; (2) the growing importance of information for the survival
and prosperity of various enterprises; (3) the increasing complexity of
information technology; and (4) the year 2000 issue referred to above.
Software revenue is generally recognized upon shipment and the performance of
certain other criteria in accordance with Statement of Position ("SOP") 91-1,
"Software Revenue Recognition" in 1997 and prior years and SOP 97-2, "Software
Revenue Recognition" in 1998. Service revenue is recognized as the work is
performed or, in the case of a fixed-fee contract, on the percentage of
completion basis, even though some services are prepaid.
The Company's Consolidated Condensed Balance Sheets include assets designated as
purchased software and capitalized software development costs. Purchased
software includes the cost of purchased integration software tools and the cost
of software acquired in connection with business combinations. It also includes
the cost of licenses to use, embed and sell software tools developed by others.
Certain costs of HIE proprietary software developed internally are capitalized
in accordance with generally accepted accounting principles. The costs of
individual software tools are being amortized ratably based on the projected
revenue associated with the related software or on a
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straight-line basis over not more than five years, whichever method results in a
higher level of annual amortization.
The excess of cost over net assets of businesses acquired (goodwill) is being
amortized over a period of fifteen years. At each balance sheet date, the
Company assesses the recoverability of this intangible asset by determining
whether the amortization of the goodwill balance over its remaining life can be
recovered through undiscounted future operating cash flows of the acquired
operation. The amount of goodwill impairment, if any, is measured based on
projected discounted future operating cash flows using a discount rate
reflecting the Company's average cost of funds.
Results of Operations
The following table sets forth for the periods indicated (1) the Company's
total revenue and (2) unless otherwise indicated, the percentage of total
revenue for each component included in the Company's Consolidated Condensed
Statements of Operations:
<TABLE>
<CAPTION>
PERCENT OF REVENUE (UNLESS OTHERWISE INDICATED)
THREE MONTHS ENDED MARCH 31,
1998 1997
--------------------------- -----------------------------
<S> <C> <C>
Total HIE revenue (in 000's) $4,701 $3,360
=========================== =============================
Revenue:
Software 41% 38%
Services 59% 62%
Total revenue 100% 100%
--------------------------- -----------------------------
Cost of revenue:
Software (as a percent of software revenue) 12% 41%
Services (as a percent of services revenue) 49% 65%
Total cost of revenue 34% 56%
--------------------------- -----------------------------
Gross profit 66% 44%
--------------------------- -----------------------------
Operating expenses:
Sales and marketing 24% 22%
Research and development 11% 13%
General and administrative 21% 30%
--------------------------- -----------------------------
Total operating expenses 56% 65%
--------------------------- -----------------------------
Operating earnings (loss) 10% (21%)
Losses of affiliate 0 (1%)
Interest income, net 1% 2%
--------------------------- -----------------------------
Earnings (loss) before income taxes 11% (20%)
Income tax (expense) benefit (4%) 5%
--------------------------- -----------------------------
Net earnings (loss) 7% (15%)
=========================== =============================
</TABLE>
8
<PAGE> 9
Comparison of Three Months Ended March 31, 1998 and March 31, 1997
Revenue. Total revenue was $4.7 million for the three months ended
March 31, 1998 compared to $3.4 million for the three months ended March 31,
1997, an increase of 40%. The increase of $632,000, or 50%, in software revenue,
was primarily due to an increase in Cloverleaf integration engine software
license fee revenue, offset somewhat by a reduction in third-party software tool
revenue. The increase of $709,000, or 34%, in services revenue was due primarily
to higher service personnel productivity as well as an increase in the number of
service personnel. HIE added six new distributors in the first quarter of 1998
and more than doubled its sales force during the latter part of 1997.
Cost of revenue. Cost of revenue includes, among other things,
compensation of service personnel, travel and software royalties and
amortization. The cost of revenue was $1.6 million for the three months ended
March 31, 1998 compared to $1.9 million for the three months ended March 31,
1997, a decrease of 15%. The decrease in cost of revenue from 56% to 34% is
primarily attributable to the Company sub-licensing significantly less
third-party software tools, as well as an increase in the level of service
personnel productivity in the first quarter of 1998 compared to the first
quarter of 1997. Third-party software tools, such as imaging, workflow and COLD,
typically have a higher cost of revenue than proprietary software tools, such as
the Cloverleaf integration engine and the EMerge enterprise master person index
software tool.
Gross profit. The Company's gross profit was $3.1 million for the three
months ended March 31, 1998 compared to $1.5 million for the three months ended
March 31, 1997, an increase of 109%. The primary reasons for the increased gross
profit in the first quarter of 1998 were the higher level of highly profitable
Cloverleaf integration engine software license fee revenue discussed above, as
well as the higher level of service personnel productivity also discussed above.
Sales and marketing. Sales and marketing expense includes, among other
things, compensation of sales and marketing personnel, sales commissions, travel
and advertising. Sales and marketing expense was $1.1 million or 24% of revenue
for the three months ended March 31, 1998 compared to $762,000 or 22% of revenue
for the three months ended March 31, 1997, an increase of 46%. The increase in
sales and marketing expense between the periods was due primarily to the
increase in sales personnel costs, sales commissions and travel expenses
associated with the increased sales staffing referred to above.
Research and development. Research and development expense includes,
among other things, compensation of research and development personnel,
depreciation and lease expense of research and development equipment and travel.
Research and development expense was $543,000 or 11% of revenue for the three
months ended March 31, 1998 compared to $434,000 or 13% of revenue for the three
months ended March 31, 1997, an increase of 25%. While the level of
capitalization of internally developed software dropped to 30% in the first
quarter of 1998 from 35% in
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the first quarter of 1997, cash expenditures for research and development
increased $104,000 between the two periods due primarily to increased staffing
for various research and development projects.
General and administrative. General and administrative expense
includes, among other things, compensation of finance, accounting and
administrative personnel, goodwill amortization, office rent and insurance.
General and administrative expense was $1.0 million for both the three months
ended March 31, 1998 and 1997. There were no significant changes in the
components of general and administrative expenses between the periods.
Losses of affiliate. Losses of affiliate, which resulted from the
Company's commitment to fund CHS, totaled $31,000 in the first quarter of 1997.
The operating results of CHS are included in the Company's Consolidated
Condensed Financial Statements for the first quarter of 1998 resulting from the
December 31, 1997 exercise of the option to acquire the remaining 50% of CHS
discussed above.
Interest income, net. Net interest income was $41,000 for the three
months ended March 31, 1998 compared to $67,000 for the three months ended March
31, 1997, representing a decrease of $26,000. The decrease in net interest
income is due primarily to a decrease in interest income resulting from lower
cash balances offset by decreased interest expense related to various payments
of long-term debt and related accrued interest, including the payment of $3.3
million in long-term debt on January 2, 1998.
Income tax (expense) benefit. The Company recognized income tax expense
of $144,000, which is an effective income tax rate of 29%, for the three months
ended March 31, 1998 based on a projected utilization of available net operating
loss carryforward benefits for the year ending December 31, 1998. The Company
recorded an income tax benefit of $168,000 for the three months ended March 31,
1997 based on management's belief at the time that the Company would generate
taxable income above the level of available net operating loss carryforward
benefits for the year ended December 31, 1997.
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Liquidity and Capital Resources
The Company had working capital of $6.3 million at March 31, 1998
compared to $5.3 million at December 31, 1997. Cash decreased $3.6 million
during the three months ended March 31, 1998 compared to a $1.3 million decrease
during the three months ended March 31, 1997 for the reasons discussed below.
Net cash used in operating activities totaled $43,000 for the three
months ended March 31, 1998 compared to $433,000 for the three months ended
March 31, 1997. The $390,000 total variance between the two periods is primarily
attributable to the increased cash flow resulting from the net earnings recorded
during the three months ended March 31, 1998 compared to the net loss recorded
in the three months ended March 31, 1997, and an increase in accounts payable,
offset by an increase in accounts receivable.
Net cash used in investing activities was $431,000 for the three months
ended March 31, 1998 compared to $875,000 for the three months ended March 31,
1997. The decrease was due primarily to a $350,000 investment in CHS in February
1997.
Net cash used in financing activities was $3.1 million for the three
months ended March 31, 1998 and net cash provided by financing activities was
$31,000 for the three months ended March 31, 1997. Most of the variance between
the two periods is attributable to the payment of $3.3 million of debt financing
that matured on January 2, 1998. The proceeds from the issuance of Common Stock
relate to the exercise of stock options during both periods.
As of March 31, 1998, the Company had $356,000 of debt financing
scheduled for payment over the next twelve months. During August 1997, the
Company renewed its line of credit with a bank and also increased the credit
line from $1 million to $2 million on essentially the same terms and conditions
as the expiring line of credit. The Company plans to maintain the $2 million
line of credit for unanticipated needs and financial flexibility. No amounts
were outstanding under the line of credit at March 31, 1998 or December 31,
1997. Based on its current business plan and business model projections, the
Company believes that current available cash, anticipated cash flow from
operating activities and cash available from existing or expanded lines of
credit will be sufficient to meet the Company's capital requirements for at
least the next twelve months and for the foreseeable future.
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
3.1 By-laws of HIE.
10.1 HIE Stock Option Plan I.
10.2 HIE Restated Stock Option Plan Two.
10.3 HIE Nonqualified Stock Option Plan.
11 Statements of Computation of Per Share Earnings (Loss).
27 Financial Data Schedule (for SEC use only).
</TABLE>
(b) Reports on Form 8-K
During the quarter ended March 31, 1998, the Company filed the
following report on Form 8-K:
Current Report on Form 8-K dated December 31, 1997, reporting
information under Items 5 and 7.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Healthdyne Information Enterprises, Inc.
May 11, 1998 By: /s/ Cheryl N. Blanco
---------------------------------
Cheryl N. Blanco
Vice President - Controller,
Chief Accounting Officer,
Assistant Treasurer and
Assistant Secretary
(duly authorized and principal
accounting officer)
13
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
3.1 By-laws of Healthdyne Information Enterprises, Inc. ("HIE").
10.1 HIE Stock Option Plan I.
10.2 HIE Restated Stock Option Plan Two.
10.3 HIE Nonqualified Stock Option Plan.
11 Statements of Computation of Per Share Earnings (Loss).
27 Financial Data Schedule (for SEC use only).
</TABLE>
14
<PAGE> 1
EXHIBIT 3.1
BY-LAWS OF HEALTHDYNE INFORMATION ENTERPRISES, INC.
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting.
The annual meeting of the shareholders for the election of Directors
and for the transaction of such other business as may properly come before the
meeting shall be held at such place, either within or without the State of
Georgia, on such date and at such time as the Board of Directors may by
resolution provide. The Board of Directors may specify by resolution prior to
any special meeting of shareholders held within the year that such meeting shall
be in lieu of the annual meeting.
Section 2. Special Meeting; Call and Notice of Meetings.
Special meetings of the shareholders may be called at any time by the
Board of Directors, the Chairman of the Board of Directors or the President. The
Corporation shall call a special meeting of shareholders upon written request of
the holders of at least sixty percent (60%) of the outstanding Common Stock.
Such meetings shall be held at such place, either within or without the State of
Georgia, as is stated in the call and notice thereof. Written notice of each
meeting of shareholders, stating the time and place of the meeting, and the
purpose of any special meeting, shall be mailed to each shareholder entitled to
vote at or to notice of such meeting at his address shown on the books of the
Corporation not less than ten (l0) nor more than sixty (60) days prior to such
meeting unless such shareholder waives notice of the meeting. Any shareholder
may execute a waiver of notice, in person or by proxy, either before or after
any meeting, and shall be deemed to have waived notice if he is present at such
meeting in person or by proxy. Neither the business transacted at, nor the
purpose of, any meeting need be stated in the waiver of notice of such meeting,
except that, with respect to a waiver of notice of a meeting at which a plan of
merger or consolidation is considered, information as required by the Georgia
Business Corporation Code (the "GBCC") must be delivered to the shareholder
prior to his execution of the waiver of notice or the waiver itself must
conspicuously and specifically waive the right to such information.
Notice of any meeting may be given by the President, the Secretary or
by the person or persons calling such meeting. No notice need be given of the
time and place of reconvening of any adjourned meeting, if the time and place to
which the meeting is adjourned are announced at the adjourned meeting.
<PAGE> 2
Section 3. Quorum; Required Shareholder Vote.
A quorum for the transaction of business at any annual or special
meeting of shareholders shall exist when the holders of a majority of the
outstanding shares entitled to vote are represented either in person or by proxy
at such meeting. If a quorum is present, action on a matter (other than the
election of directors) by the shareholders is approved if the votes cast
favoring the action exceed the votes cast opposing the action, unless the GBCC,
the Corporation's Articles of Incorporation, or a provision of these By-laws
adopted by the shareholders under GBCC Section 14-2-1021 or any successor
statute requires a greater number of affirmative votes. When a quorum is once
present to organize a meeting, the shareholders present may continue to do
business at the meeting or at any adjournment thereof notwithstanding the
withdrawal of enough shareholders to leave less than a quorum. The holders of a
majority of the voting shares represented at a meeting, whether or not a quorum
is present, may adjourn such meeting from time to time.
Section 4. Proxies.
A shareholder may vote either in person or by a proxy which he has duly
executed in writing. No proxy shall be valid after eleven (11) months from the
date of its execution unless a longer period is expressly provided in the proxy.
Section 5. Action of Shareholders Without Meeting.
Any action required to be, or which may be, taken at a meeting of the
shareholders, may be taken without a meeting if written consent, setting forth
the actions so taken, shall be signed by all of the shareholders entitled to
vote with respect to the subject matter thereof, except that, with respect to
approval of a plan of merger or consolidation by written consent, information as
required by the GBCC must be delivered to the shareholders prior to their
execution of the consent or the consent must conspicuously and specifically
waive the right to such information. Such consent shall have the same force and
effect as a unanimous affirmative vote of the shareholders and shall be filed
with the minutes of the proceedings of the shareholders.
ARTICLE II
DIRECTORS
Section 1. Power of Directors.
The Board of Directors shall manage the business of the Corporation and
may exercise all powers of the Corporation, subject to any restrictions imposed
by law, by the Articles of Incorporation or by these By-Laws.
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<PAGE> 3
Section 2. Composition of the Board.
The Board of Directors of the Corporation shall consist of not less
than three (3) or more than nine (9) natural persons of the age of eighteen
years or over, the exact number to be determined from time to time by resolution
of the Board of Directors. If all of the shares of the Corporation are owned
beneficially and of record by less than three shareholders, the number of
directors may be less than three but not less than the number of shareholders.
Directors need not be residents of the State of Georgia or shareholders of the
Corporation. At each annual meeting of the shareholders, the shareholders shall
elect Directors who shall serve until their successors are elected and
qualified; provided that the shareholders may, by the affirmative vote of the
holders of a majority of the shares entitled to vote at an election of
Directors, increase or reduce the number of Directors or add or remove Directors
with or without cause at any time.
Section 3. Meetings of the Board; Notice of Meetings; Waiver of
Notice.
The annual meeting of the Board of Directors for the purpose of
electing officers and transacting such other business as may be brought before
the meeting shall be held each year immediately following the annual meeting of
shareholders. The Board of Directors may by resolution provide for the time and
place of other regular meetings and no notice of such regular meetings need be
given. Special meetings of the Board of Directors may be called by the Chairman
of the Board of Directors, by the President or by any two Directors, and written
notice of the time and place of such meetings shall be given to each Director by
first class or air mail at least two (2) days before the meeting or by
telephone, telegraph, cablegram or in person at least one (l) day before the
meeting. Any Director may execute a waiver of notice, either before or after any
meeting, and shall be deemed to have waived notice if he is present at such
meeting. Neither the business to be transacted at, nor the purpose of, any
meeting of the Board of Directors need be stated in the notice or waiver of
notice of such meeting. Any meeting may be held at any place within or without
the State of Georgia.
Section 4. Quorum; Vote Requirement.
A majority of the Directors in office at any time shall constitute a
quorum for the transaction of business at any meeting. When a quorum is present,
the vote of a majority of the Directors present shall be the act of the Board of
Directors, unless a greater vote is required by law, by the Articles of
Incorporation or by these By-Laws.
Section 5. Action of Board Without Meeting.
Any action required or permitted to be taken at a meeting of the Board
of Directors or any committee thereof may be taken without a meeting if written
consent, setting forth the action so taken, is signed by all the Directors or
committee members and filed with the minutes of the proceedings of the Board of
Directors or committee. Such consent shall have the same force and effect as a
unanimous affirmative vote of the Board of Directors or committee, as the case
may be.
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Section 6. Committees.
The Board of Directors, by resolution adopted by a majority of all of
the Directors, may designate from among its members an Executive Committee,
and/or other committees, each composed of two (2) or more Directors, which may
exercise such authority as is delegated by the Board of Directors, provided that
no committee shall have the authority of the Board of Directors in reference to
(l) an amendment to the Articles of Incorporation or By-Laws of the Corporation,
(2) the adoption of a plan of merger or consolidation, (3) the sale, lease,
exchange or other disposition of all or substantially all of the property and
assets of the Corporation, or (4) a voluntary dissolution of the Corporation or
a revocation thereof.
Section 7. Vacancies.
A vacancy occurring in the Board of Directors by reason of the removal
of a Director by the shareholders shall be filled by the shareholders, or, if
authorized by the shareholders, by the remaining Directors. Any other vacancy
occurring in the Board of Directors may be filled by the affirmative vote of a
majority of the remaining Directors though less than a quorum of the Board of
Directors, or by the sole remaining Director, as the case may be, or, if the
vacancy is not so filled, or if no director remains, by the shareholders. A
Director elected to fill a vacancy shall serve for the unexpired term of his
predecessor in office.
Section 8. Telephone Conference Meetings.
Unless the Articles of Incorporation otherwise provide, members of the
Board of Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board or committee by means of telephone
conference or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this Section 8 shall constitute presence in person at such meeting.
ARTICLE III
OFFICERS
Section 1. Executive Structure of the Corporation.
The officers of the Corporation shall consist of a President, a
Secretary, a Treasurer and such other officers or assistant officers, including
Vice Presidents, as may be elected by the Board of Directors. Each officer shall
hold office for the term for which he has been elected or appointed and until
his successor has been elected or appointed and has qualified, or until his
earlier resignation, removal from office or death. Any two or more offices may
be held by the same person, except that the same person shall not be both
Chairman of the Board of Directors and Secretary, or President and Secretary.
The Board of Directors may designate a Vice President as an Executive Vice
President and may designate the order in which other Vice Presidents may act.
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Section 2. President.
The President shall be the chief operating officer of the Corporation
and shall be in charge of the day-to-day affairs of the Corporation, subject to
the direction of the Board of Directors. He shall preside at all meetings of the
shareholders.
Section 3. Vice President.
The Vice President shall act in the case of absence or disability of
the President.
Section 4. Secretary.
The Secretary shall keep the minutes of the proceedings of the
shareholders and of the Board of Directors, and shall have custody of and attest
the seal of the Corporation.
Section 5. Treasurer.
The Treasurer shall be responsible for the maintenance of proper
financial books and records of the Corporation.
Section 6. Other Duties and Authority.
Each officer, employee and agent of the Corporation shall have such
other duties and authority as may be conferred upon him by the Board of
Directors or delegated to him by the President.
Section 7. Removal of Officers.
Any officer may be removed at any time by the Board of Directors, and
such vacancy may be filled by the Board of Directors. This provision shall not
prevent the making of a contract of employment for a definite term with any
officer and shall have no effect upon any cause of action which any officer may
have as a result of removal in breach of a contract of employment.
Section 8. Compensation.
The salaries of the officers shall be fixed from time to time by the
Board of Directors. No officer shall be prevented from receiving such salary by
reason of the fact that he is also a Director of the Corporation.
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ARTICLE IV
STOCK
Section 1. Stock Certificates.
The shares of stock of the Corporation shall be represented by
certificates in such form as may be approved by the Board of Directors, which
certificates shall be issued to the shareholders of the Corporation in numerical
order from the stock book of the Corporation, and each of which shall bear the
name of the shareholder, the number of shares represented, and the date of
issue; and which shall be signed by the Chairman of the Board of Directors or
President and the Secretary or an Assistant Secretary of the Corporation; and
which shall be sealed with the seal of the Corporation. No share certificate
shall be issued until the consideration for the shares represented thereby has
been fully paid.
Section 2. Transfer of Stock.
Shares of stock of the Corporation shall be transferred only on the
books of the Corporation upon surrender to the Corporation of the certificate or
certificates representing the shares to be transferred accompanied by an
assignment in writing of such shares properly executed by the shareholder of
record or his duly authorized attorney-in-fact and with all taxes on the
transfer having been paid. The Corporation may refuse any requested transfer
until furnished evidence satisfactory to it that such transfer is proper. Upon
the surrender of a certificate for transfer of stock, such certificate shall at
once be conspicuously marked on its face "Cancelled" and filed with the
permanent stock records of the Corporation. The Board of Directors may make such
additional rules concerning the issuance, transfer and registration of stock and
requirements regarding the establishment of lost, destroyed or wrongfully taken
stock certificates (including any requirement of an indemnity bond prior to
issuance of any replacement certificate) as it deems appropriate.
Section 3. Registered Shareholders.
The Corporation may deem and treat the holder of record of any stock as
the absolute owner for all purposes and shall not be required to take any notice
of any right or claim of right of any other person.
Section 4. Record Date.
For the purpose of determining shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other purpose, the Board of Directors of the Corporation
may fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than seventy (70) days and,
in the case of a meeting of shareholders, not less than ten (10) days prior to
the date on which the particular action, requiring such determination of
shareholders, is to be taken.
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ARTICLE V
DEPOSITORIES, SIGNATURES AND SEAL
Section 1. Depositories.
All funds of the Corporation shall be deposited in the name of the
Corporation in such bank, banks or other financial institutions as the Board of
Directors may from time to time designate and shall be drawn out on checks,
drafts or other orders signed on behalf of the Corporation by such person or
persons as the Board of Directors may from time to time designate.
Section 2. Contracts and Deeds.
All contracts, deeds and other instruments shall be signed on behalf of
the Corporation by the President or by such other officer, officers, agent or
agents as the Board of Directors may from time to time by resolution provide.
Section 3. Seal.
The seal of the Corporation shall be as follows:
If the seal is affixed to a document, the signature of the Secretary or
an Assistant Secretary shall attest the seal. The seal and its attestation may
be lithographed or otherwise printed on any document and shall have, to the
extent permitted by law, the same force and effect as if it had been affixed and
attested manually.
ARTICLE VI
INDEMNITY
Any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including any action by or in the
right of the Corporation), by reason of the fact that he is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified by the Corporation
against expenses (including reasonable attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation (and with respect to any criminal action or proceeding, if he had no
reasonable cause to believe his conduct was unlawful), to the maximum extent
permitted by, and in the manner provided by, the GBCC.
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ARTICLE VII
AMENDMENT OF BY-LAWS
The Board of Directors shall have the power to alter, amend or repeal
the By-Laws or adopt new by-laws, but any by-laws adopted by the Board of
Directors may be altered, amended or repealed and new by-laws adopted by the
shareholders. The shareholders may prescribe that any by-law or by-laws adopted
by them shall not be altered, amended or repealed by the Board of Directors.
Action by the Directors with respect to the By-Laws shall be taken by an
affirmative vote of a majority of all of the Directors then in office. If a
quorum is present, action by the shareholders with respect to the By-laws shall
be approved if the votes cast favoring the action exceed the votes cast opposing
the action, unless the GBCC, the Corporation's Articles of Incorporation, or a
provision of these By-laws adopted by the shareholders under Section 14-2-1021
or any successor statute of the GBCC requires a greater number of affirmative
votes.
ARTICLE VIII
BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS
In addition to any other provisions of law as may be applicable,
notwithstanding any other provisions of these By-laws or the Corporation's
Articles of Incorporation to the contrary, the provisions of Sections 14-2-1131
through 14-2-1133 of the GBCC, as the same may be amended or supplemented from
time to time, shall apply to and govern those transactions of the Corporation
which constitute "business combinations" (as that term is defined in Section
14-2-1131 of the GBCC). The provisions of this Article VIII of the By-laws may
not be repealed except in the manner set forth in Section 14-2-1133 of the GBCC.
ARTICLE IX
FAIR PRICE REQUIREMENTS
In addition to any other provisions of law as may be applicable,
notwithstanding any other provisions of these By-laws or the Corporation's
Articles of Incorporation to the contrary, the provisions of Sections 14-2-1110
through 14-2-1113 of the GBCC, as the same may be amended or supplemented from
time to time, shall apply to and govern those transactions of the Corporation
which constitute "business combinations" (as that term is defined in Section
14-2-1110 of the GBCC). The provisions of this Article IX of the By-laws may not
be repealed except in the manner set forth in Section 14-2-1113 of the GBCC.
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EXHIBIT 10.1
HEALTHDYNE INFORMATION ENTERPRISES, INC.
STOCK OPTION PLAN I
ARTICLE I
PURPOSE
1.1 The HEALTHDYNE INFORMATION ENTERPRISES, INC. Stock Option Plan
I is intended to advance the interests of Healthdyne Information Enterprises,
Inc., its shareholders and its subsidiaries by attracting, retaining and
stimulating the performance of officers, key employees, consultants and advisors
of the Company of high caliber and potential upon whose judgment, initiative and
effort Healthdyne Information Enterprises, Inc. is largely dependent for the
successful conduct of its business, and to encourage and enable such officers,
key employees, consultants and advisors to acquire and retain a proprietary
interest in Healthdyne Information Enterprises, Inc. by ownership of its stock.
Options granted may, if so intended by the Committee (as hereafter defined), be
designed to meet the requirements of Section 422 of the Internal Revenue Code of
1986, as amended.
ARTICLE II
DEFINITIONS
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.3 "Common Stock" means the Company's Common Stock, par value
$.01 per share.
2.4 "Committee" means the Healthdyne Stock Option Committee and
effective upon the Registration Date shall mean the Stock Option Committee
appointed by the Board in accordance with Section 4.1.
2.5 "Company" means Healthdyne Information Enterprises, Inc.
2.6 "Date of Grant" means the date on which an Option is granted
under the Plan.
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2.7 "Fair Market Value" shall be the mean between the highest and
the lowest quoted selling prices at which the Common Stock is sold in the
regular way on the National Association of Securities Dealers Automated
Quotation System (NASDAQ) or on any similar securities exchange on the day an
Option is granted hereunder or, in the absence of any reported sales on such
day, the first preceding day on which there were such sales. If the Common Stock
is not listed on NASDAQ or any similar exchange for the public trading of
securities, the Committee shall determine on a semi- annual basis the Fair
Market Value in whatever way it considers appropriate under the circumstances
taking into account the financial condition of the Company as reflected in its
financial statements and available independent third party (such as analysts)
estimates of such Fair Market Value. Any such determination of Fair Market Value
shall remain effective until the next semi-annual determination.
2.8 "Healthdyne" means Healthdyne, Inc.
2.9 "Healthdyne Stock Option Committee" means the Stock Option
Committee appointed by the Board of Directors of Healthdyne pursuant to
Healthdyne's 1993 Stock Option Plan.
2.10 "Incentive Stock Option" means a stock option granted under
the Plan which is intended to meet the requirements of Section 422 of the Code
or any similar provision thereto.
2.11 "1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.12 "Nonqualified Stock Option" means a stock option granted under
the Plan which is not an Incentive Stock Option.
2.13 "Option" means a Nonqualified Stock Option or an Incentive
Stock Option granted under the Plan.
2.14 "Optionee" means a person to whom an Option, which has not
expired, has been granted under the Plan.
2.15 "Parent" means any corporation which qualifies as a parent of
the Company under the definition of "parent corporation" in Section 424(e) of
the Code.
2.16 "Plan" means this Healthdyne Information Enterprises, Inc.
Stock Option Plan I.
2.17 "Registration Date" means the first day, if any, on which the
Common Stock is registered under Section 12 of the 1934 Act.
2.18 "Stock Option Agreement" means an agreement between the
Company and an Optionee under which the Optionee may purchase Common Stock
thereunder.
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2.19 "Subsidiary" or "Subsidiaries" means a subsidiary corporation
or corporations of the Company as defined in Section 424(f) of the Code or,
solely for purposes of granting Nonqualified Stock Options hereunder, any
partnership in which the Company is a partner with at least a 50 percent
ownership interest.
ARTICLE III
PARTICIPANTS
Options may be granted under the Plan to any person who is or who
agrees to become an officer or key employee of the Company or any of its
Subsidiaries, or a consultant, advisor or other person providing services to the
Company. An employee may be a member of the Board of Directors of the Company or
of any Subsidiary, but no member of the Board of Directors shall be considered
an employee solely by reason of his membership on such Board of Directors. The
Committee may grant options to such persons in accordance with such
determinations as the Committee from time to time in its sole discretion may
make. A member of the Committee shall not act on any determination to grant an
Option to such member and any such determination shall be made by the other
member or members of the Committee.
ARTICLE IV
ADMINISTRATION
4.1 Committee. The Plan shall be administered by the Healthdyne
Stock Option Committee, and effective upon the Registration Date, the Plan shall
be administered by a Committee comprised of three persons (or such lessor or
greater number of persons as may be required or permitted from time to time by
Rule 16b-3 under the 1934 Act) selected by the Board. Effective upon the
Registration Date, each Committee member shall be ineligible, and shall have
been ineligible for the one-year period prior to appointment thereto, for
selection as a person to whom stock of the Company may be allocated or to whom
Options, performance units, or restricted stock may be granted pursuant to this
Plan or, solely to the extent necessary to be deemed a "disinterested person"
within the meaning of Rule 16b-3 under the 1934 Act (or any successor rule of
similar import), in any other similar plan of the Company or any affiliate.
Subject to the express provisions of the Plan, the Committee shall have sole
discretion and authority to determine from among eligible officers, key
employees, advisors, consultants and other persons providing services to the
Company, those to whom and the time or times at which Options may be granted and
the number of shares of Common Stock to be subject to each Option. Subject to
the express provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to it, to determine the details and provisions of each
Stock Option Agreement, and to make all the determinations necessary or
advisable in the administration of the Plan. All such actions and determinations
by the Committee shall be conclusive and binding for all purposes and upon all
persons.
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4.2 Majority Rule. A majority of the members of the Committee (or,
if less than three, all of the members) shall constitute a quorum, and any
action taken by a majority present at a meeting at which a quorum is present or
any action taken without a meeting evidenced by a writing executed by a majority
of the whole Committee shall constitute the action of the Committee.
4.3 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible officers,
employees, consultants and advisors, their employment or engagement, death,
retirement, disability or other termination of employment or engagement, and
such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations. Subject to adjustment pursuant to the provisions
of Section 5.3 hereof, the number of shares of Common Stock which may be issued
and sold hereunder shall be One Million, Nineteen Thousand, Seven Hundred
Eighty-Three (1,019,783) shares of Common Stock. Such shares may be either
authorized but unissued shares, shares issued and reacquired by the Company or
shares bought on the market for the purposes of the Plan.
5.2 Options Granted Under the Plan. Shares of Common Stock with
respect to which an Option granted hereunder shall have been exercised shall not
again be available for the grant of an Option hereunder. If an Option granted
hereunder shall terminate for any reason (including, without limitation, the
surrender of the Option by the Optionee in connection with the grant of a new
Option on the same or different terms or the expiration of the Option for any
reason) without being wholly exercised, the number of shares to which such
Option termination relates shall again be available for grant hereunder.
5.3 Antidilution. In the event that the outstanding shares of
Common Stock hereafter are changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation by
reason of merger, consolidation, other reorganization, recapitalization,
reclassification, combination of shares, stock split-up or stock dividend, or in
the event that there should be any other stock splits, stock dividends or other
relevant changes in capitalization occurring after the effective date of this
Plan:
(a) The aggregate number and kind of shares subject to
Options which may be granted hereunder shall be adjusted appropriately;
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(b) Rights under outstanding Options granted hereunder,
both as to the number of subject shares and the Option price per share, shall be
adjusted appropriately; and
(c) Where dissolution or liquidation of the Company or
any merger or combination in which the Company is not a surviving corporation is
involved, each outstanding Option granted hereunder shall terminate, but the
Optionee shall have the right, immediately prior to such dissolution,
liquidation, merger, or combination, to exercise his Option in whole or in part,
to the extent that it shall not have been exercised, without regard to any
vesting or installment exercise provisions.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined solely by the Committee, in accordance
with Treasury Regulation Section 1.425-1(a) or its successor regulation or
ruling such that the adjustment shall not cause a reissuance of the Option, and
any such adjustment may provide for the elimination of fractional share
interests.
ARTICLE VI
OPTIONS
6.1 Option Grant and Agreement. Each Option granted hereunder
shall be evidenced by minutes of a meeting or the written consent of the
Committee and by a written Stock Option Agreement dated as of the Date of Grant
and executed by the Company and the Optionee. Each Option granted by the
Committee shall be designated by the Committee as an Incentive Stock Option or a
Nonqualified Stock Option and, once granted, may not be amended to be the other
kind of Option unless such amendment shall cause the provisions of the Option to
conform to the requirements of this Plan in respect to the other kind of Option.
The Stock Option Agreement shall set forth such terms and conditions as may be
determined by the Committee to be consistent with the Plan, but may include
additional provisions and restrictions, provided that they are not inconsistent
with the Plan. Nothing in this Plan shall preclude the Committee from issuing or
agreeing to issue new Options to any holder upon the condition that all or any
portion of such holder's then outstanding Options be surrendered for
cancellation regardless of whether the exercise price of such new Options is
higher or lower than, or the other terms different from, the surrendered
Options.
6.2 Option Price. The per share Option price of the Common Stock
subject to each Option shall be determined by the Committee, provided that the
per share price shall not be less than the Fair Market Value of the Common Stock
on the date the Option is granted.
6.3 Option Period. Each Option granted hereunder may be granted at
any time after the effective date of the Plan and prior to the termination of
the Plan, provided that no Incentive Stock Option may be granted at any time
more than ten years after the earlier of the date this
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Plan is adopted by the Board or approved by the shareholders of the Company. The
period for the exercise of each Option shall be determined by the Committee,
provided, however, that (i) except as otherwise expressly provided in this Plan,
the Committee may, in its discretion, terminate outstanding Options or
accelerate the exercise dates thereunder, upon sixty (60) days' written notice
given to the Optionee and (ii) the period during which each Nonqualified or
Incentive Stock Option may be exercised shall not be later than ten years from
the date such Nonqualified or Incentive Stock Option is granted, provided that
Incentive Stock Options granted to a "10-percent owner" (as defined in Article
VII) must be exercised within five years from the date thereof.
6.4 Option Exercise. Except as provided in Section 6.7, an
Incentive Stock Option may not be exercised at any time unless the holder
thereof is then an employee of the Company, its Parent (if any) or any
Subsidiary. Options may be exercised in whole at any time, or in part from time
to time, with respect to whole shares only, within the period permitted for the
exercise thereof, and shall be exercised by written notice of intent to exercise
the Option with respect to a specified number of shares delivered to the Company
at its principal office, and payment in full to the Company at said office of
the amount of the Option price for the number of shares of the Common Stock with
respect to which the Option is then being exercised. In addition to and at the
time of payment of the Option price, Optionee shall pay to the Company or any
Subsidiary in cash or in Common Stock of the Company, the full amount, if any,
that the Company or any Subsidiary is required to withhold or pay under federal
or state law with respect to the exercise of the Option. Alternatively, the
number of shares delivered by the Company upon exercise of the Option shall be
appropriately reduced to reimburse the Company or the Subsidiary for such
payment.
6.5 Payment. The purchase price for shares of Common Stock
purchased upon exercise of Options shall be paid in cash, in shares of Common
Stock of the Company (not subject to limitations on transfer) valued at the Fair
Market Value of such shares on the trading day immediately preceding the date of
purchase, or a combination of cash and such Common Stock; provided that any
shares of Common Stock tendered for payment shall have been owned for a period
of six (6) months or such other period as in the opinion of the Committee shall
be sufficient for such shares to be considered "mature" shares for purposes of
accounting for the transaction.
6.6 Nontransferability of Option. No Option shall be transferred
by an Optionee otherwise than by will or the laws of descent and distribution.
During the lifetime of an Optionee the Option shall be exercisable only by him,
or, in the case of an Optionee who is mentally incapacitated, the Option shall
be exercisable by his guardian or legal representative.
6.7 Effect of Death or Other Termination of Employment or
Engagement.
(a) Except as otherwise provided in this Section 6.7, if,
prior to a date thirty (30) days from the Date of Grant of an Option (or such
longer time as may be established by the
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Committee), an Optionee's employment with the Company or a Subsidiary or
engagement by the Company or a Subsidiary as a consultant or advisor shall be
terminated for any reason, or by the act of the Optionee, the Optionee's right
to exercise such Option shall terminate and all rights thereunder shall cease.
(b) If, on or after thirty (30) days from the date an
Option shall have been granted (or such longer time as may be established by the
Committee), an Optionee's employment with or engagement as a consultant or
advisor by the Company or its Subsidiaries shall be terminated for any reason
other than death, permanent and total disability, for cause, or, in the event of
a Nonqualified Stock Option, retirement, the Optionee shall have the right,
during the period ending sixty (60) days (or such longer time as may be
established by the Committee at the Date of Grant or afterwards) after such
termination, to exercise such Option to the extent that it was exercisable at
the date of such termination of employment or engagement and shall not have been
exercised.
(c) If an Optionee shall die at any time after the Date
of Grant and while in the employ or engagement of the Company or its
Subsidiaries or within 60 days (or such length of time as may be established by
the Committee after the Date of Grant or afterwards) after termination of such
employment or engagement, the executor or administrator of the estate of the
decedent or the person or persons to whom an Option granted hereunder shall have
been validly transferred by the executor or the administrator pursuant to will
or the laws of descent and distribution shall have the right, during the period
ending one year after the date of the Optionee's death, to exercise the
Optionee's Option to the extent that it was exercisable at the date of
termination of employment by death or otherwise and shall not have been
exercised; provided, however, such time period may be shortened in accordance
with the provisions of Section 6.3 if a shortened exercise period is applied to
Optionee in general.
(d) If an Optionee shall become permanently and totally
disabled or, with respect to a Nonqualified Stock Option, shall retire at any
time after the Date of Grant, the Optionee (or in the case of an Optionee who is
mentally incapacitated, his guardian or legal representative) shall have the
right, during a period ending one year after such retirement or disability, to
exercise such Option to the extent that it was exercisable at the date of
termination of employment or engagement by retirement or disability and shall
not have been exercised; provided, however, such time period may be shortened in
accordance with the provisions of Section 6.3 if a shortened exercise period is
applied to Optionee in general.
(e) If an Optionee's employment with or engagement by the
Company or its Subsidiaries shall be terminated by the Company or any Subsidiary
for serious misconduct, the Optionee's right to exercise such Option shall
immediately terminate and all rights thereunder shall cease. For purposes of
this Plan, the term "serious misconduct" shall include, but not be limited to,
embezzlement or misappropriation of corporate funds, other acts of dishonesty,
significant activities harmful to the reputation of the Company or the
Subsidiaries, a significant violation of Company or Subsidiary policy, willful
refusal to perform, or substantial disregard of,
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the duties properly assigned to the Optionee, or a significant violation of any
contractual, statutory or common law duty of loyalty to the Company or the
Subsidiaries.
(f) No transfer of an Option by the Optionee by will or
by laws or descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and an
authenticated copy of the will and/or such other evidence as the Committee may
deem necessary to establish the validity of the transfer and the acceptance by
the transferees or transferees of the terms and conditions of such Option.
6.8 Rights as Shareholder. An Optionee or a transferee of an
Option shall have no rights as a shareholder with respect to any shares subject
to such Option prior to the purchase of such shares by exercise of such Options
as provided herein. Nothing contained herein or in the Stock Option Agreement
shall create an obligation on the part of the Company to repurchase any shares
of Common Stock purchased hereunder.
6.9 Dividend or Distribution Equivalents. An Optionee, whether or
not his Options are exercisable, shall, in the sole discretion of the Committee,
if specifically approved by the Committee at the Date of Grant or at any time
thereafter, be entitled to receive a payment in cash, stock, rights, warrants,
assets or other securities from the Company, as and when cash dividends or other
distributions of stock, rights, warrants, assets or other securities are payable
or distributed to the holders of the Common Stock of the Company, in the amount
equal to the cash dividend or distribution which would be paid to said Optionee
in respect of all shares subject to such Options were such Optionee the holder
of such shares on the record date for such cash dividend or distribution.
6.10 Notice of Disqualifying Disposition. Each Incentive Stock
Option granted under the Plan shall provide that the employee receiving such
Incentive Stock Option shall notify the Company, in writing, to the attention of
the Chief Financial Officer, in the event that, prior to the later of two years
after the Date of Grant of such Incentive Stock Option or one year after the
transfer of any share to him pursuant to such Option, he shall dispose of such
share, such notice to state the date of disposition, the nature of the
disposition and the price, if any, received for the share.
ARTICLE VII
TEN PERCENT OWNERS
Notwithstanding any other provisions of this Plan, the following terms
and conditions shall apply to Incentive Stock Options granted hereunder to a
"10-percent owner." For this purpose, a "10-percent owner" shall mean an
Optionee who, at the time the Incentive Stock Option is granted, owns stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary. With respect to
a 10-percent owner:
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(a) the price at which shares of stock may be purchased
under an Incentive Stock Option granted pursuant to this Plan shall not be less
than 110 percent of the Fair Market Value thereof, said Fair Market Value being
determined in the manner described in Section 2.7, above; and
(b) the period during which any such Incentive Stock
Option may be exercised, to be fixed by the Committee in the manner described in
Section 6.3, above, shall expire not later than five (5) years from the date the
Incentive Stock Option is granted.
ARTICLE VIII
ANNUAL LIMITS
In no event shall the aggregate fair market value (determined as of the
time an Incentive Stock Option is granted) of shares with respect to which an
Incentive Stock Option is initially exercisable by the holder thereof, in any
calendar year (under all Incentive Stock Options granted under all plans of the
Company, its Parent (if any), or its Subsidiaries) exceed $100,000.
ARTICLE IX
OTHER TERMS AND CONDITIONS
Any Incentive Stock Options granted hereunder shall contain such and
additional terms, not inconsistent with the terms of this Plan, which are deemed
necessary or desirable by the Committee, which terms, together with the terms of
this Plan, shall constitute such Incentive Stock Option as an "Incentive Stock
Option" within the meaning of Section 422 of the Code and lawful regulations
thereunder.
ARTICLE X
STOCK CERTIFICATES
10.1 Conditions. The Company shall not be required to issue or
deliver any certificate for shares of Common Stock purchased upon the exercise
of any Option granted hereunder or any portion thereof prior to fulfillment of
all of the following conditions:
(a) The completion of any registration or other
qualification of such shares under any federal or state law or under the rulings
or regulations of the Securities and Exchange Commission or any other
governmental regulatory body, or the receipt of a written representation that
the shares to be acquired upon such exercise are to be acquired for investment
and not for resale or with a view to the distribution thereof, which the
Committee shall in its sole discretion deem necessary or advisable;
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(b) The obtaining of any approval or other clearance from
any federal or state governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable;
(c) The lapse of such reasonable period of time following
the exercise of the Option as the Committee from time to time may establish for
reasons of administrative convenience; and
(d) Satisfaction by the Optionee of all applicable
withholding taxes or other withholding liabilities.
10.2 Legends. The Company reserves the right to legend any
certificate for shares of Common Stock, conditioning sales of such shares upon
compliance with applicable federal and state securities laws and regulations.
ARTICLE XI
TERMINATION, AMENDMENT, AND MODIFICATION OF PLAN
The Board may at any time, upon recommendation of the Committee,
terminate, and may at any time and from time to time and in any respect, amend
or modify the Plan; provided, however, that no such action shall impair the
rights of any holder of an Option theretofore granted; and further provided,
that (unless and until such time as shareholder approval is no longer required
under the 1934 Act, applicable exchange listing requirements or NASDAQ
requirements and applicable corporate law) no such action of the Board without
approval of the shareholders of the Company may:
(a) Increase the total number of shares of Common Stock
subject to the Plan, except as contemplated in Section 5.3 hereof;
(b) Change the manner of determining the Option price; or
(c) Change the class of people who may become
participants in the Plan; provided, further, that, except to the extent
otherwise permitted in Section 6.3, no termination, amendment, or modification
of the Plan shall in any manner affect any option theretofore granted under the
Plan without the consent of the Optionee or transferee of the Option, shall
extend the maximum period during which Options may be exercised, or withdraw the
administration of the Plan from the Committee or the Board.
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ARTICLE XII
MISCELLANEOUS
12.1 Employment or Engagement. Nothing in the Plan or in any Option
granted hereunder or in any Stock Option Agreement relating thereto shall confer
upon any director, officer, employee, advisor or consultant the right to
continue as such with the Company or any Subsidiary.
12.2 Other Compensation Plans. The adoption of the Plan shall not
affect any other stock option or incentive or other compensation plans in effect
for the Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees of
the Company or any Subsidiary.
12.3 Plan Binding on Successors. The Plan shall be binding upon the
Company, its successors and assigns, and the Optionee, his executor,
administrator and permitted transferees.
12.4 Singular, Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
12.5 Headings, etc., Not Part of Plan. Headings of Articles and
Sections hereof are inserted for convenience and reference; they constitute no
part of the Plan.
12.6 Effective Date. The Plan shall become effective upon its
approval by the Board of Directors, subject to ratification of the Plan by the
holders of a majority of the outstanding shares of Common Stock of the Company
within one year preceding or following the date the Plan is approved by the
Board. If the Plan is not so approved by the shareholders, the Plan shall
terminate and any Options granted hereunder shall be void and have no force or
effect whatsoever.
12.7 Compliance With Laws. The Plan, the grant and exercise of
Options hereunder, and the obligation of the Company to sell and deliver shares
under such Options, shall be subject to all applicable laws, rules, and
regulations, including, but not limited to, those of the United States and its
states, and to such approvals by any government or regulatory agency as may be
required.
12.8 Governing Law. This Plan shall be construed and interpreted in
accordance with and governed by Georgia law, to the extent such construction and
interpretation does not adversely affect the treatment of any Option as an
Incentive Stock Option under the Code.
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EXHIBIT 10.2
HEALTHDYNE INFORMATION ENTERPRISES, INC.
RESTATED STOCK OPTION PLAN TWO
ARTICLE I
PURPOSE
1.1 The HEALTHDYNE INFORMATION ENTERPRISES, INC. Stock Option Plan II
is intended to advance the interests of Healthdyne Information Enterprises,
Inc., its shareholders and its subsidiaries by attracting, retaining and
stimulating the performance of officers, key employees, consultants and advisors
of the Company of high caliber and potential upon whose judgment, initiative and
effort Healthdyne Information Enterprises, Inc. is largely dependent for the
successful conduct of its business, and to encourage and enable such officers,
key employees, consultants and advisors to acquire and retain a proprietary
interest in Healthdyne Information Enterprises, Inc. by ownership of its stock.
Options granted may, if so intended by the Committee (as hereafter defined), be
designed to meet the requirements of Section 422 of the Internal Revenue Code of
1986, as amended.
ARTICLE II
DEFINITIONS
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.3 "Common Stock" means the Company's Common Stock, par value $.01 per
share.
2.4 "Committee" means the Healthdyne Stock Option Committee and
effective upon the Registration Date shall mean the Stock Option Committee
appointed by the Board in accordance with Section 4.1.
2.5 "Company" means Healthdyne Information Enterprises, Inc.
2.6 "Date of Grant" means the date on which an Option is granted under
the Plan.
<PAGE> 2
2.7 "Fair Market Value" shall be the mean between the highest and the
lowest quoted selling prices at which the Common Stock is sold in the regular
way on the National Association of Securities Dealers Automated Quotation System
(NASDAQ) or on any similar securities exchange on the day an Option is granted
hereunder or, in the absence of any reported sales on such day, the first
preceding day on which there were such sales. If the Common Stock is not listed
on NASDAQ or any similar exchange for the public trading of securities, the
Committee shall determine on a semi- annual basis the Fair Market Value in
whatever way it considers appropriate under the circumstances taking into
account the financial condition of the Company as reflected in its financial
statements and available independent third party (such as analysts) estimates of
such Fair Market Value. Any such determination of Fair Market Value shall remain
effective until the next semi-annual determination.
2.8 "Healthdyne" means Healthdyne, Inc.
2.9 "Healthdyne Stock Option Committee" means the Stock Option
Committee appointed by the Board of Directors of Healthdyne pursuant to
Healthdyne's 1993 Stock Option Plan.
2.10 "Incentive Stock Option" means a stock option granted under the
Plan which is intended to meet the requirements of Section 422 of the Code or
any similar provision thereto.
2.11 "1934 Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
2.12 "Nonqualified Stock Option" means a stock option granted under the
Plan which is not an Incentive Stock Option.
2.13 "Option" means a Nonqualified Stock Option or an Incentive Stock
Option granted under the Plan.
2.14 "Optionee" means a person to whom an Option, which has not
expired, has been granted under the Plan.
2.15 "Parent" means any corporation which qualifies as a parent of the
Company under the definition of "parent corporation" in Section 424(e) of the
Code.
2.16 "Plan" means this Healthdyne Information Enterprises, Inc. Stock
Option Plan II.
2.17 "Registration Date" means the first day, if any, on which the
Common Stock is registered under Section 12 of the 1934 Act.
2.18 "Stock Option Agreement" means an agreement between the Company
and an Optionee under which the Optionee may purchase Common Stock thereunder.
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2.19 "Subsidiary" or "Subsidiaries" means a subsidiary corporation or
corporations of the Company as defined in Section 424(f) of the Code or, solely
for purposes of granting Nonqualified Stock Options hereunder, any partnership
in which the Company is a partner with at least a 50 percent ownership interest.
ARTICLE III
PARTICIPANTS
Options may be granted under the Plan to any person who is or who
agrees to become an officer or key employee of the Company or any of its
Subsidiaries, or a consultant, advisor or other person providing services to the
Company. An employee may be a member of the Board of Directors of the Company or
of any Subsidiary, but no member of the Board of Directors shall be considered
an employee solely by reason of his membership on such Board of Directors. The
Committee may grant options to such persons in accordance with such
determinations as the Committee from time to time in its sole discretion may
make. A member of the Committee shall not act on any determination to grant an
Option to such member and any such determination shall be made by the other
member or members of the Committee.
ARTICLE IV
ADMINISTRATION
4.1 Committee. The Plan shall be administered by the Healthdyne Stock
Option Committee, and effective upon the Registration Date, the Plan shall be
administered by a Committee comprised of three persons (or such lessor or
greater number of persons as may be required or permitted from time to time by
Rule 16b-3 under the 1934 Act) selected by the Board. Effective upon the
Registration Date, each Committee member shall be ineligible, and shall have
been ineligible for the one-year period prior to appointment thereto, for
selection as a person to whom stock of the Company may be allocated or to whom
Options, performance units, or restricted stock may be granted pursuant to this
Plan or, solely to the extent necessary to be deemed a "disinterested person"
within the meaning of Rule 16b-3 under the 1934 Act (or any successor rule of
similar import), in any other similar plan of the Company or any affiliate.
Subject to the express provisions of the Plan, the Committee shall have sole
discretion and authority to determine from among eligible officers, key
employees, advisors, consultants and other persons providing services to the
Company, those to whom and the time or times at which Options may be granted and
the number of shares of Common Stock to be subject to each Option. Subject to
the express provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to it, to determine the details and provisions of each
Stock Option Agreement, and to make all the determinations necessary or
advisable in the administration of the Plan. All such actions and determinations
by the Committee shall be conclusive and binding for all purposes and upon all
persons.
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4.2 Majority Rule. A majority of the members of the Committee (or, if
less than three, all of the members) shall constitute a quorum, and any action
taken by a majority present at a meeting at which a quorum is present or any
action taken without a meeting evidenced by a writing executed by a majority of
the whole Committee shall constitute the action of the Committee.
4.3 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible officers,
employees, consultants and advisors, their employment or engagement, death,
retirement, disability or other termination of employment or engagement, and
such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations. Subject to adjustment pursuant to the provisions of
Section 5.3 hereof, the number of shares of Common Stock which may be issued and
sold hereunder shall One Million, Nineteen Thousand, Seven Hundred Eighty-Three
(1,019,783) shares of Common Stock. Such shares may be either authorized but
unissued shares, shares issued and reacquired by the Company or shares bought on
the market for the purposes of the Plan.
5.2 Options Granted Under the Plan. Shares of Common Stock with respect
to which an Option granted hereunder shall have been exercised shall not again
be available for the grant of an Option hereunder. If an Option granted
hereunder shall terminate for any reason (including, without limitation, the
surrender of the Option by the Optionee in connection with the grant of a new
Option on the same or different terms or the expiration of the Option for any
reason) without being wholly exercised, the number of shares to which such
Option termination relates shall again be available for grant hereunder.
5.3 Antidilution. In the event that the outstanding shares of Common
Stock hereafter are changed into or exchanged for a different number or kind of
shares or other securities of the Company or of another corporation by reason of
merger, consolidation, other reorganization, recapitalization, reclassification,
combination of shares, stock split-up or stock dividend, or in the event that
there should be any other stock splits, stock dividends or other relevant
changes in capitalization occurring after the effective date of this Plan:
(a) The aggregate number and kind of shares subject to Options
which may be granted hereunder shall be adjusted appropriately;
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<PAGE> 5
(b) Rights under outstanding Options granted hereunder, both
as to the number of subject shares and the Option price per share, shall be
adjusted appropriately; and
(c) Where dissolution or liquidation of the Company or any
merger or combination in which the Company is not a surviving corporation is
involved, each outstanding Option granted hereunder shall terminate, but the
Optionee shall have the right, immediately prior to such dissolution,
liquidation, merger, or combination, to exercise his Option in whole or in part,
to the extent that it shall not have been exercised, without regard to any
vesting or installment exercise provisions.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined solely by the Committee, in accordance
with Treasury Regulation Section 1.425-1(a) or its successor regulation or
ruling such that the adjustment shall not cause a reissuance of the Option, and
any such adjustment may provide for the elimination of fractional share
interests.
ARTICLE VI
OPTIONS
6.1 Option Grant and Agreement. Each Option granted hereunder shall be
evidenced by minutes of a meeting or the written consent of the Committee and by
a written Stock Option Agreement dated as of the Date of Grant and executed by
the Company and the Optionee. Each Option granted by the Committee shall be
designated by the Committee as an Incentive Stock Option or a Nonqualified Stock
Option and, once granted, may not be amended to be the other kind of Option
unless such amendment shall cause the provisions of the Option to conform to the
requirements of this Plan in respect to the other kind of Option. The Stock
Option Agreement shall set forth such terms and conditions as may be determined
by the Committee to be consistent with the Plan, but may include additional
provisions and restrictions, provided that they are not inconsistent with the
Plan. Nothing in this Plan shall preclude the Committee from issuing or agreeing
to issue new Options to any holder upon the condition that all or any portion of
such holder's then outstanding Options be surrendered for cancellation
regardless of whether the exercise price of such new Options is higher or lower
than, or the other terms different from, the surrendered Options.
6.2 Option Price. The per share Option price of the Common Stock
subject to each Option shall be determined by the Committee, provided that the
per share price shall not be less than the Fair Market Value of the Common Stock
on the date the Option is granted.
6.3 Option Vesting. Unless otherwise specifically approved by the
Committee and until terminated as provided in the corresponding Stock Option
Agreement, each Option granted
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hereunder shall become exercisable in full on the fifth anniversary of the
corresponding Stock Option Agreement; provided the Optionee shall have been in
the continuous full-time employ of the Company or any Subsidiary or affiliate
thereof or engaged to provide consulting services thereto since the date of such
Stock Option Agreement. Notwithstanding the foregoing, to the extent that prior
to such fifth anniversary, Healthdyne or Company completes a sale to the public
or Healthdyne completes a distribution to its shareholders of the Company's
Common Stock in an amount such that following the transaction the Company (i) no
longer qualifies for inclusion as part of Healthdyne's or its successor's
affiliated group for purposes of filing consolidated federal income tax returns
and (ii) the Common Stock is registered under Section 12 of the 1934 Act, the
Option shall become exercisable upon and after the six (6) month anniversary of
the completion of such sale or distribution as to the percentage of the shares
of Common Stock then subject to this Option indicated by the table below or such
other percentage as may be established by the Committee with respect to the
Option, based upon the number of years from the date of this Option:
<TABLE>
<CAPTION>
Number of Years from Percentage of Shares
Date of Grant
- --------------------------------------------------------------------------------
<S> <C>
Less than 1 0%
At least 1 but 33-1/3%
less than 2
At least 2 but 66-2/3%
less than 3
At least 3 100%
</TABLE>
Although the Option may remain exercisable after a termination of employment
under the limited circumstances specifically set forth in Paragraph 4 of the
corresponding Stock Option Agreement, vesting of the Option shall cease as of
the applicable date of termination or disability referred to in Paragraph 4 of
the corresponding Stock Option Agreement and the Option shall be exercisable
during such extent periods of the time only to the extend that it was
exercisable on such date of termination or disability.
6.4 Option Period. Each Option granted hereunder may be granted at any
time after the effective date of the Plan and prior to the termination of the
Plan, provided that no Incentive Stock Option may be granted at any time more
than ten years after the earlier of the date this Plan is adopted by the Board
or approved by the shareholders of the Company. The period for the exercise of
each Option shall be determined by the Committee, provided, however, that (i)
except as otherwise expressly provided in this Plan, the Committee may, in its
discretion, terminate outstanding Options or accelerate the exercise dates
thereunder, upon sixty (60) days' written notice given to the Optionee and (ii)
the period during which each Nonqualified or Incentive Stock Option may be
exercised shall not be later than ten years from the date such Nonqualified or
Incentive Stock Option is granted, provided that Incentive Stock Options granted
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<PAGE> 7
to a "10-percent owner" (as defined in Article VII) must be exercised within
five years from the date thereof.
6.5 Option Exercise. Except as provided in Section 6.7, an Incentive
Stock Option may not be exercised at any time unless the holder thereof is then
an employee of the Company, its Parent (if any) or any Subsidiary. Options may
be exercised in whole at any time, or in part from time to time, with respect to
whole shares only, within the period permitted for the exercise thereof, and
shall be exercised by written notice of intent to exercise the Option with
respect to a specified number of shares delivered to the Company at its
principal office, and payment in full to the Company at said office of the
amount of the Option price for the number of shares of the Common Stock with
respect to which the Option is then being exercised. In addition to and at the
time of payment of the Option price, Optionee shall pay to the Company or any
Subsidiary in cash or in Common Stock of the Company, the full amount, if any,
that the Company or any Subsidiary is required to withhold or pay under federal
or state law with respect to the exercise of the Option. Alternatively, the
number of shares delivered by the Company upon exercise of the Option shall be
appropriately reduced to reimburse the Company or the Subsidiary for such
payment.
6.6 Payment. The purchase price for shares of Common Stock purchased
upon exercise of Options shall be paid in cash, in shares of Common Stock of the
Company (not subject to limitations on transfer) valued at the Fair Market Value
of such shares on the trading day immediately preceding the date of purchase, or
a combination of cash and such Common Stock; provided that any shares of Common
Stock tendered for payment shall have been owned for a period of six (6) months
or such other period as in the opinion of the Committee shall be sufficient for
such shares to be considered "mature" shares for purposes of accounting for the
transaction.
6.7 Nontransferability of Option. No Option shall be transferred by an
Optionee otherwise than by will or the laws of descent and distribution. During
the lifetime of an Optionee the Option shall be exercisable only by him, or, in
the case of an Optionee who is mentally incapacitated, the Option shall be
exercisable by his guardian or legal representative.
6.8 Effect of Death or Other Termination of Employment or Engagement.
(a) Except as otherwise provided in this Section 6.7, if, prior to
a date thirty (30) days from the Date of Grant of an Option (or such longer time
as may be established by the Committee), an Optionee's employment with the
Company or a Subsidiary or engagement by the Company or a Subsidiary as a
consultant or advisor shall be terminated for any reason, or by the act of the
Optionee, the Optionee's right to exercise such Option shall terminate and all
rights thereunder shall cease.
(b) If, on or after thirty (30) days from the date an Option shall
have been granted (or such longer time as may be established by the Committee),
an Optionee's
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<PAGE> 8
employment with or engagement as a consultant or advisor by the Company or its
Subsidiaries shall be terminated for any reason other than death, permanent and
total disability, for cause, or, in the event of a Nonqualified Stock Option,
retirement, the Optionee shall have the right, during the period ending sixty
(60) days (or such longer time as may be established by the Committee at the
Date of Grant or afterwards) after such termination, to exercise such Option to
the extent that it was exercisable at the date of such termination of employment
or engagement and shall not have been exercised.
(c) If an Optionee shall die at any time after the Date of
Grant and while in the employ or engagement of the Company or its Subsidiaries
or within 60 days (or such length of time as may be established by the Committee
after the Date of Grant or afterwards) after termination of such employment or
engagement, the executor or administrator of the estate of the decedent or the
person or persons to whom an Option granted hereunder shall have been validly
transferred by the executor or the administrator pursuant to will or the laws of
descent and distribution shall have the right, during the period ending one year
after the date of the Optionee's death, to exercise the Optionee's Option to the
extent that it was exercisable at the date of termination of employment by death
or otherwise and shall not have been exercised; provided, however, such time
period may be shortened in accordance with the provisions of Section 6.3 if a
shortened exercise period is applied to Optionee in general.
(d) If an Optionee shall become permanently and totally
disabled or, with respect to a Nonqualified Stock Option, shall retire at any
time after the Date of Grant, the Optionee (or in the case of an Optionee who is
mentally incapacitated, his guardian or legal representative) shall have the
right, during a period ending one year after such retirement or disability, to
exercise such Option to the extent that it was exercisable at the date of
termination of employment or engagement by retirement or disability and shall
not have been exercised; provided, however, such time period may be shortened in
accordance with the provisions of Section 6.3 if a shortened exercise period is
applied to Optionee in general.
(e) If an Optionee's employment with or engagement by the
Company or its Subsidiaries shall be terminated by the Company or any Subsidiary
for serious misconduct, the Optionee's right to exercise such Option shall
immediately terminate and all rights thereunder shall cease. For purposes of
this Plan, the term "serious misconduct" shall include, but not be limited to,
embezzlement or misappropriation of corporate funds, other acts of dishonesty,
significant activities harmful to the reputation of the Company or the
Subsidiaries, a significant violation of Company or Subsidiary policy, willful
refusal to perform, or substantial disregard of, the duties properly assigned to
the Optionee, or a significant violation of any contractual, statutory or common
law duty of loyalty to the Company or the Subsidiaries.
(f) No transfer of an Option by the Optionee by will or by
laws or descent and distribution shall be effective to bind the Company unless
the Company shall have been furnished with written notice thereof and an
authenticated copy of the will and/or such other
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<PAGE> 9
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the transferees or transferees of the terms and
conditions of such Option.
6.9 Rights as Shareholder. An Optionee or a transferee of an Option
shall have no rights as a shareholder with respect to any shares subject to such
Option prior to the purchase of such shares by exercise of such Options as
provided herein. Nothing contained herein or in the Stock Option Agreement shall
create an obligation on the part of the Company to repurchase any shares of
Common Stock purchased hereunder.
6.10 Dividend or Distribution Equivalents. An Optionee, whether or not
his Options are exercisable, shall, in the sole discretion of the Committee, if
specifically approved by the Committee at the Date of Grant or at any time
thereafter, be entitled to receive a payment in cash, stock, rights, warrants,
assets or other securities from the Company, as and when cash dividends or other
distributions of stock, rights, warrants, assets or other securities are payable
or distributed to the holders of the Common Stock of the Company, in the amount
equal to the cash dividend or distribution which would be paid to said Optionee
in respect of all shares subject to such Options were such Optionee the holder
of such shares on the record date for such cash dividend or distribution.
6.11 Notice of Disqualifying Disposition. Each Incentive Stock Option
granted under the Plan shall provide that the employee receiving such Incentive
Stock Option shall notify the Company, in writing, to the attention of the Chief
Financial Officer, in the event that, prior to the later of two years after the
Date of Grant of such Incentive Stock Option or one year after the transfer of
any share to him pursuant to such Option, he shall dispose of such share, such
notice to state the date of disposition, the nature of the disposition and the
price, if any, received for the share.
ARTICLE VII
TEN PERCENT OWNERS
Notwithstanding any other provisions of this Plan, the following terms
and conditions shall apply to Incentive Stock Options granted hereunder to a
"10-percent owner." For this purpose, a "10-percent owner" shall mean an
Optionee who, at the time the Incentive Stock Option is granted, owns stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary. With respect to
a 10-percent owner:
(a) the price at which shares of stock may be purchased under
an Incentive Stock Option granted pursuant to this Plan shall not be less than
110 percent of the Fair Market Value thereof, said Fair Market Value being
determined in the manner described in Section 2.7, above; and
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<PAGE> 10
(b) the period during which any such Incentive Stock Option
may be exercised, to be fixed by the Committee in the manner described in
Section 6.3, above, shall expire not later than five (5) years from the date the
Incentive Stock Option is granted.
ARTICLE VIII
ANNUAL LIMITS
In no event shall the aggregate fair market value (determined as of the
time an Incentive Stock Option is granted) of shares with respect to which an
Incentive Stock Option is initially exercisable by the holder thereof, in any
calendar year (under all Incentive Stock Options granted under all plans of the
Company, its Parent (if any), or its Subsidiaries) exceed $100,000.
ARTICLE IX
OTHER TERMS AND CONDITIONS
Any Incentive Stock Options granted hereunder shall contain such and
additional terms, not inconsistent with the terms of this Plan, which are deemed
necessary or desirable by the Committee, which terms, together with the terms of
this Plan, shall constitute such Incentive Stock Option as an "Incentive Stock
Option" within the meaning of Section 422 of the Code and lawful regulations
thereunder.
ARTICLE X
STOCK CERTIFICATES
10.1 Conditions. The Company shall not be required to issue or deliver
any certificate for shares of Common Stock purchased upon the exercise of any
Option granted hereunder or any portion thereof prior to fulfillment of all of
the following conditions:
(a) The completion of any registration or other qualification
of such shares under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body, or the receipt of a written representation that the shares to
be acquired upon such exercise are to be acquired for investment and not for
resale or with a view to the distribution thereof, which the Committee shall in
its sole discretion deem necessary or advisable;
(b) The obtaining of any approval or other clearance from any
federal or state governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable;
10
<PAGE> 11
(c) The lapse of such reasonable period of time following the
exercise of the Option as the Committee from time to time may establish for
reasons of administrative convenience; and
(d) Satisfaction by the Optionee of all applicable withholding
taxes or other withholding liabilities.
10.2 Legends. The Company reserves the right to legend any
certificate for shares of Common Stock, conditioning sales of such shares upon
compliance with applicable federal and state securities laws and regulations.
ARTICLE XI
TERMINATION, AMENDMENT, AND MODIFICATION OF PLAN
The Board may at any time, upon recommendation of the Committee,
terminate, and may at any time and from time to time and in any respect, amend
or modify the Plan; provided, however, that no such action shall impair the
rights of any holder of an Option theretofore granted; and further provided,
that (unless and until such time as shareholder approval is no longer required
under the 1934 Act, applicable exchange listing requirements or NASDAQ
requirements and applicable corporate law) no such action of the Board without
approval of the shareholders of the Company may:
(a) Increase the total number of shares of Common Stock
subject to the Plan, except as contemplated in Section 5.3 hereof;
(b) Change the manner of determining the Option price; or
(c) Change the class of people who may become participants in
the Plan; provided, further, that, except to the extent otherwise permitted in
Section 6.3, no termination, amendment, or modification of the Plan shall in any
manner affect any option theretofore granted under the Plan without the consent
of the Optionee or transferee of the Option, shall extend the maximum period
during which Options may be exercised, or withdraw the administration of the
Plan from the Committee or the Board.
ARTICLE XII
MISCELLANEOUS
12.1 Employment or Engagement. Nothing in the Plan or in any Option
granted hereunder or in any Stock Option Agreement relating thereto shall confer
upon any director,
11
<PAGE> 12
officer, employee, advisor or consultant the right to continue as such with the
Company or any Subsidiary.
12.2 Other Compensation Plans. The adoption of the Plan shall not
affect any other stock option or incentive or other compensation plans in effect
for the Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees of
the Company or any Subsidiary.
12.3 Plan Binding on Successors. The Plan shall be binding upon the
Company, its successors and assigns, and the Optionee, his executor,
administrator and permitted transferees.
12.4 Singular, Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
12.5 Headings, etc., Not Part of Plan. Headings of Articles and
Sections hereof are inserted for convenience and reference; they constitute no
part of the Plan.
12.6 Effective Date. The Plan shall become effective upon its
approval by the Board of Directors, subject to ratification of the Plan by the
holders of a majority of the outstanding shares of Common Stock of the Company
within one year preceding or following the date the Plan is approved by the
Board. If the Plan is not so approved by the shareholders, the Plan shall
terminate and any Options granted hereunder shall be void and have no force or
effect whatsoever.
12.7 Compliance With Laws. The Plan, the grant and exercise of
Options hereunder, and the obligation of the Company to sell and deliver shares
under such Options, shall be subject to all applicable laws, rules, and
regulations, including, but not limited to, those of the United States and its
states, and to such approvals by any government or regulatory agency as may be
required.
12.8 Governing Law. This Plan shall be construed and interpreted in
accordance with and governed by Georgia law, to the extent such construction and
interpretation does not adversely affect the treatment of any Option as an
Incentive Stock Option under the Code.
12
<PAGE> 1
EXHIBIT 10.3
HEALTHDYNE INFORMATION ENTERPRISES, INC.
NONQUALIFIED STOCK OPTION PLAN
ARTICLE I
PURPOSE
1.1 The HEALTHDYNE INFORMATION ENTERPRISES, INC. Nonqualified
Stock Option Plan is intended to advance the interests of the Company and its
shareholders by attracting, retaining and stimulating the performance of key
employees, consultants and advisors. The Company is largely dependent upon the
judgment and initiative of such high caliber key employees, consultants and
advisors for the successful conduct of its business. The Company further intends
to encourage and enable such key employees, consultants and advisors to acquire
and retain proprietary interest in the Company and its Subsidiaries through
ownership of its stock.
ARTICLE II
DEFINITIONS
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.3 "Common Stock" means the Company's Common Stock, par value
$.01 per share.
2.4 "Committee" means the Stock Option Committee appointed by the
Board in accordance with Section 4.1.
2.5 "Company" means Healthdyne Information Enterprises, Inc., a
Georgia corporation.
2.6 "Date of Grant" means the date on which an Option is granted
under the Plan.
2.7. "Fair Market Value" shall be the mean between the highest and
the lowest selling prices of the Common Stock quoted on the Nasdaq National
Market or on any other similar securities exchange on the day an Option is
granted hereunder or, in the absence of any reported sales on such day, the
first preceding day on which there were such sales. If the Common Stock is not
listed on the Nasdaq National Market or any similar exchange for the public
trading of securities, the Committee shall determine on a semi-annual basis the
Fair Market Value in whatever way it considers appropriate under the
circumstances taking into account the financial condition of the Company as
reflected in its financial statements and, if deemed appropriate by
<PAGE> 2
the Committee, available independent third party (such as analysts) estimates of
such Fair Market Value. Any such determination of Fair Market Value shall remain
effective until the next semi-annual determination.
2.8 "1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.9 "Nonqualified Stock Option" means a stock option granted under
the Plan which is not intended to meet the requirements of Section 422 of the
Code or any similar provision thereof.
2.10 "Option" means a Nonqualified Stock Option granted under the
Plan.
2.11 "Optionee" means a person to whom an Option, which has not
expired, has been granted under the Plan.
2.12 "Parent" means any corporation which qualifies as a parent of
the Company under the definition of "parent corporation" in Section 424(e) of
the Code.
2.13 "Plan" means this Healthdyne Information Enterprises, Inc.
Nonqualifed Stock Option Plan.
2.14 "Stock Option Agreement" means an agreement between the
Company and an Optionee under which the Optionee may purchase Common Stock
thereunder.
2.15 "Subsidiary" or "Subsidiaries" means a subsidiary corporation
or corporations of the Company as defined in Section 424(f) of the Code or any
partnership or joint venture in which the Company is a partner with at least a
majority ownership interest.
2.16 "Substitute Option" means any Option granted pursuant to
Section 3.2.
ARTICLE III
PARTICIPANTS
3.1 Eligibility. Options may be granted under the Plan to any
person who is or who agrees to become a director, officer, key employee of the
Company or any of its Subsidiaries, or a consultant, advisor or other person
providing services to the Company or its Subsidiaries. However, the Committee
shall not grant Options under the Plan to any officer or director of the
Company, unless shareholder approval of the Plan is obtained or shareholder
approval of the Plan is no longer required by applicable Nasdaq rules or other
applicable laws. The Committee may grant Options to such persons in accordance
with such determinations as the Committee from time to time in its sole
discretion may make. A member of the Committee shall not act on any
determination to grant an Option to such member and any such determination shall
be made by the other member or members of the Committee.
2
<PAGE> 3
3.2 Substitute Options. Notwithstanding Section 3.1 hereof, the
Committee may grant Substitute Options under the Plan in substitution for stock
based awards held by persons who hold options to purchase the common stock of
another corporation which merges or consolidates with, or the stock or property
of which other corporation is acquired by, the Company or a Subsidiary. The
Committee may direct that the Substitute Options be granted on such terms and
conditions as the Committee considers appropriate under the circumstances.
ARTICLE IV
ADMINISTRATION
4.1 Committee. The Plan shall be administered by a Committee
designated by the Board of Directors. Subject to the express provisions of the
Plan, the Committee shall have sole discretion and authority to determine from
among eligible directors, officers, key employees, advisors, consultants, other
persons providing services to the Company and persons eligible for Substitute
Awards, those to whom and the time or times at which Options may be granted and
the number of shares of Common Stock to be subject to each Option. Subject to
the express provisions of the Plan, the Committee shall also have complete
authority to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to it, to determine the details and provisions of each
Stock Option Agreement, and to make all determinations necessary or advisable in
the administration of the Plan. All such actions and determinations by the
Committee shall be conclusive and binding for all purposes and upon all persons.
4.2 Majority Rule. A majority of the members of the Committee (or,
if less than three, all of the members) shall constitute a quorum, and any
action taken by a majority present at a meeting at which a quorum is present or
any action taken without a meeting evidenced by a writing executed by a majority
of the whole Committee shall constitute the action of the Committee.
4.3 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible directors,
officers, employees, consultants, advisors and other eligible participants,
their employment or engagement, death retirement, disability or other
termination of employment or engagement, and such other pertinent facts as the
Committee may require. The Company shall furnish the Committee with such
clerical and other assistance as is necessary in the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations. Subject to adjustment pursuant to the provisions
of Section 5.3 hereof, the number of shares of Common Stock which may be issued
and sold hereunder shall be One Million One Hundred Seventy-seven Thousand Nine
Hundred Thirty-four (1,177,934)
3
<PAGE> 4
shares of Common Stock. Such shares may be either authorized but unissued
shares, shares issued and reacquired by the Company or shares bought on the
market for the purposes of the Plan.
5.2 Options Granted Under the Plan. Options to purchase up to an
aggregate of 295,000 shares of Common Stock which were granted by the Company to
Phil Guy and James Morrison on February 15, 1996 and April 23, 1996 shall be
deemed to have been granted under this Plan. Shares of Common Stock with respect
to which an Option granted hereunder shall have been exercised shall not again
be available for the grant of an Option hereunder. If an Option granted
hereunder shall terminate for any reason (including, without limitation, the
surrender of the Option by the Optionee in connection with the grant of a new
Option on the same or different terms or the expiration of the Option for any
reason) without being wholly exercised, the number of shares to which such
Option termination relates shall again be available for grant hereunder.
5.3 Antidilution. In the event that the outstanding shares of
Common Stock hereafter are changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation by
reason of merger, consolidation, other reorganization, recapitalization,
reclassification, combination of shares, stock split-up or stock dividend, or in
the event that there should be any other stock splits, stock dividends or other
relevant changes in capitalization occurring after the effective date of this
Plan:
(a) The aggregate number and kind of shares subject to Options
which may be granted hereunder shall be adjusted appropriately;
(b) Rights under outstanding Options granted hereunder, both
as to the number of subject shares and the Option price per share, shall be
adjusted appropriately; and
(c) Where dissolution or liquidation of the Company or any
merger or combination in which the Company is not a surviving corporation is
involved, each outstanding Option granted hereunder shall terminate, but the
Optionee shall have the right, immediately prior to such dissolution,
liquidation, merger or combination, to exercise his Option in whole or in part,
to the extent that it shall not have been exercised, without regard to any
vesting or installment exercise provisions.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined solely by the Committee, in accordance
with Treasury Regulation Section 1.425-1(a) or its successor regulation or
ruling such that the adjustment shall not cause a reissuance of the Option, and
any such adjustment may provide for the elimination of fractional share
interests.
4
<PAGE> 5
ARTICLE VI
OPTIONS
6.1 Option Grant and Agreement. Each Option granted hereunder
shall be evidenced by minutes of a meeting or the written consent of the
Committee and by a written Stock Option Agreement dated as of the Date of Grant
and executed by the Company and the Optionee. The Stock Option Agreement shall
set forth such terms and conditions as may be determined by the Committee to be
consistent with the Plan, but may include additional provisions and
restrictions, provided that they are not inconsistent with the Plan. Nothing in
this Plan shall preclude the Committee from issuing or agreeing to issue new
Options to any holder upon the condition that all or any portion of such
holder's then outstanding Options be surrendered for cancellation regardless of
whether the exercise price of such new Options is higher or lower than, or the
other terms different from, the surrendered Options.
6.2 Option Price. The per share Option price of the Common Stock
subject to each Option shall be determined by the Committee, provided that the
per share price shall not be less than the Fair Market Value of the Common Stock
on the Date of Grant.
6.3 Option Period. Each Option granted hereunder may be granted at
any time after the effective date of the Plan and prior to the termination of
the Plan. The period for the exercise of each Option shall be determined by the
Committee, provided, however, that (i) except as otherwise expressly provided in
this Plan, the Committee may, in its discretion, terminate outstanding Options
or accelerate the exercise dates thereunder, upon sixty (60) days' written
notice given to the Optionee and (ii) the period during which each Option may be
exercised shall not be later than ten years from the Date of Grant.
6.4 Option Exercise. Options may be exercised in whole at any
time, or in part from time to time, with respect to whole shares only, within
the period permitted for the exercise thereof, and shall be exercised by written
notice of intent to exercise the Option with respect to a specified number of
shares delivered to the Company at its principal office, and payment in full to
the Company at said office of the amount of the Option price for the number of
shares of the Common Stock with respect to which the Option is then being
exercised. In addition to and at the time of payment of the Option price,
Optionee shall pay to the Company or any Subsidiary in cash or in Common Stock,
the full amount, if any, that the Company or any Subsidiary is required to
withhold or pay under federal or state law with respect to the exercise of the
Option. Alternatively, the number of shares delivered by the Company upon
exercise of the Option shall be appropriately reduced to reimburse the Company
or the Subsidiary for such payment.
6.5 Payment. The purchase price for shares of Common Stock
purchased upon exercise of Options shall be paid in cash, in shares of Common
Stock (not subject to limitations on transfer) valued at the Fair Market Value
of such shares on the trading day immediately preceding the date of purchase, or
a combination of cash and such Common Stock; provided that any shares of Common
Stock tendered for payment shall have been owned for a period of six (6) months
or such other period as in the opinion of the Committee shall be sufficient for
such shares to be considered "mature" shares for purposes of accounting for the
transaction.
5
<PAGE> 6
6.6 Nontransferability of Option. No Option shall be transferred
by an Optionee otherwise than by will or the laws of descent and distribution.
During the lifetime of an Optionee the Option shall be exercisable only by him,
or, in the case of an Optionee who is mentally incapacitated, the Option shall
be exercisable by his guardian or legal representative.
6.7 Effect of Death or Other Termination of Employment or
Engagement.
(a) Except as otherwise provided in this Section 6.7, if,
prior to a date thirty (30) days from the Date of Grant of an Option (or such
longer time as may be established by the Committee), an Optionee's employment
with the Company or a Subsidiary or engagement by the Company or a Subsidiary as
a director, officer, key employee, consultant or advisor shall be terminated for
any reason, or by the act of an Optionee, the Optionee's right to exercise such
Option shall terminate and all rights thereunder shall cease.
(b) If, on or after thirty (30) days from the Date of Grant
(or such longer time as may be established by the Committee), an Optionee's
employment with or engagement as a director, officer, key employee, consultant
or advisor by the Company or its Subsidiaries shall be terminated for any reason
other than death, permanent and total disability, for serious misconduct (as
hereinafter defined), or retirement, the Optionee shall have the right, during
the period ending sixty (60) days (or such longer time as may be established by
the Committee at the Date of Grant or afterwards) after such termination, to
exercise such Option to the extent that it was exercisable at the date of such
termination of employment or engagement and shall not have been exercised.
(c) If an Optionee shall die at any time after the Date of
Grant and while in the employ or engagement of the Company or its Subsidiaries
or within 60 days (or such length of time as may be established by the Committee
at the Date of Grant or afterwards) after termination of such employment or
engagement, the executor or administrator of the estate of the decedent or the
person or persons to whom an Option granted hereunder shall have been validly
transferred by the executor or the administrator pursuant to will or the laws of
descent and distribution shall have the right, during the period ending one year
after the date of the Optionee's death, to exercise the Optionee's Option to the
extent that it was exercisable at the date of termination of employment by death
or otherwise and shall not have been exercised.
(d) If an Optionee shall become permanently and totally
disabled or shall retire at any time after the Date of Grant, the Optionee (or
in the case of an Optionee who is mentally incapacitated, his guardian or legal
representative) shall have the right, during a period ending one year after such
retirement or disability, to exercise such Option to the extent that it was
exercisable at the date of termination of employment or engagement by retirement
or disability and shall not have been exercised.
(e) If an Optionee's employment with or engagement by the
Company or its Subsidiaries shall be terminated by the Company or any Subsidiary
for serious misconduct, the Optionee's right to exercise such Option shall
immediately terminate and all rights thereunder shall cease. For purposes of
this Plan, the term "serious misconduct" shall include, but not be limited to,
embezzlement or misappropriation of corporate funds, other acts of dishonesty,
6
<PAGE> 7
significant activities harmful to the reputation of the Company or the
Subsidiaries, a significant violation of Company or Subsidiary policy, willful
refusal to perform, or substantial disregard of, the duties properly assigned to
the Optionee, or a significant violation of any contractual, statutory or common
law duty of loyalty to the Company or the Subsidiaries.
(f) No transfer of an Option by the Optionee by will or by the
laws of descent and distribution shall be effective to bind the Company unless
the Company shall have been furnished with written notice thereof and an
authenticated copy of the will and/or such other evidence as the Committee may
deem necessary to establish the validity of the transfer and acceptance by the
transferees of the terms and conditions of such Option.
6.8 Rights of Shareholders. An Optionee or a transferee of an
Option shall have no rights as a shareholder with respect to any shares subject
to such Option prior to the purchase of such shares by exercise of such Options
as provided herein. Nothing contained herein or in the Stock Option Agreement
shall create an obligation on the part of the Company to repurchase any shares
of Common Stock purchased hereunder.
6.9 Dividend or Distribution Equivalents. An Optionee, whether or
not his Options are exercisable, shall, in the sole discretion of the Committee,
if specifically approved by the Committee at the Date of Grant or at any time
thereafter, be entitled to receive a payment in cash, stock, rights, warrants,
assets or other securities from the Company, as and when cash dividends or other
distributions of stock, rights, warrants, assets or other securities are payable
or distributed to the holders of the Common Stock, in the amount equal to the
cash dividend or distribution which would be paid to said Optionee in respect of
all shares subject to such Options were such Optionee the holder of such shares
on the record date for such cash dividend or distribution.
ARTICLE VII
STOCK CERTIFICATES
7.1 Conditions. The Company shall not be required to issue or
deliver any certificate for shares of Common Stock purchased upon the exercise
of any Option granted hereunder or any portion thereof prior to fulfillment of
all of the following conditions:
(a) The completion of any registration or other qualification
of such shares under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body, or the receipt of a written representation that the shares to
be acquired upon such exercise are to be acquired for investment and not for
resale or with a view to the distribution thereof, which the Committee shall in
its sole discretion deem necessary or advisable;
(b) The obtaining of any approval or other clearance from any
federal or state governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable;
7
<PAGE> 8
(c) The lapse of such reasonable period of time following the
exercise of the Option as the Committee from time to time may establish for
reasons of administrative convenience; and
(d) Satisfaction by the Optionee of all applicable withholding
taxes or other withholding liabilities.
7.2 Legends. The Company reserves the right to legend any
certificate for shares of Common Stock, conditioning sales of such shares upon
compliance with applicable federal and state securities laws and regulations.
ARTICLE VIII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time, upon recommendation of the Committee,
terminate and may at any time and from time to time and in any respect, amend or
modify the Plan; provided, however, that no such action shall impair the rights
of any holder of an Option theretofore granted; and further provided, that
(unless and until such time as shareholder approval is no longer required under
the 1934 Act, applicable exchange listing requirements or Nasdaq requirements
and applicable corporate law) no such action of the Board without approval of
the shareholders may:
(a) Increase the total number of shares of Common Stock
subject to the Plan, except as contemplated in Section 5.3 hereof;
(b) Change the manner of determining the Option price; or
(c) Change the class of people who may become participants in
the Plan; provided, further, that no termination, amendment, or modification of
the Plan shall in any manner affect any Option theretofore granted under the
Plan without the consent of the Optionee or transferee of the Option, shall
extend the maximum period during which Options may be exercised, or withdraw the
administration of the Plan from the Committee or the Board.
ARTICLE IX
MISCELLANEOUS
9.1 Employment or Engagement. Nothing in the Plan or in any Option
granted hereunder or in any Stock Option Agreement relating thereto shall confer
upon any director, officer, employee, advisor or consultant the right to
continue as such with the Company or any Subsidiary.
8
<PAGE> 9
9.2 Other Compensation Plans. The adoption of the Plan shall not
affect any other stock option or incentive or other compensation plans in effect
for the Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees of
the Company or any Subsidiary.
9.3 Plan Binding on Successors. The Plan shall be binding upon the
Company, its successors and assigns, and the Optionee, his executor,
administrator and permitted transferees.
9.4 Singular, Plural, Gender. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
9.5 Headings, etc., Not Part of Plan. Headings of Articles and
Sections hereof are inserted for convenience and reference; they constitute no
part of the Plan.
9.6 Compliance With Laws. The Plan, the grant and exercise of
Options hereunder and the obligation of the Company to sell and deliver shares
under such Options, shall be subject to all applicable laws, rules and
regulations, including, but not limited to, those of the United States and its
states, and to such approvals by any government or regulatory agency as may be
required.
9.7 Governing Law. This Plan shall be construed and interpreted in
accordance with and governed by Georgia law.
9
<PAGE> 1
EXHIBIT 11
Healthdyne Information Enterprises, Inc. and Subsidiaries
Statements of Computation of Per Share Earnings (Loss)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------------------------------
1998 1997
----------------------------- ----------------------------
(UNAUDITED)
<S> <C> <C>
Net earnings (loss) $352 $(503)
============================= ============================
Weighted average number of common shares
outstanding 20,902 20,182
============================= ============================
Basic net earnings (loss) per share $0.02 $(0.02)
============================= ============================
Shares used in the calculation of diluted net
earnings (loss) per share:
Weighted average number of common shares
outstanding 20,902 20,182
Additional shares issuable from assumed
exercise of options (see note 1) 787 0
----------------------------- ----------------------------
21,689 20,182
============================= ============================
Diluted earnings (loss) per share $0.02 $(0.02)
============================= ============================
</TABLE>
Note 1: Since stock options are anti-dilutive to the diluted loss per common
share calculation, stock options are not considered in such diluted
loss per share calculation for the three months ended March 31, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE HEALTHDYNE
INFORMATION ENTERPRISES, INC. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 4,146
<SECURITIES> 0
<RECEIVABLES> 7,033
<ALLOWANCES> 376
<INVENTORY> 0
<CURRENT-ASSETS> 12,245
<PP&E> 2,791
<DEPRECIATION> 1,147
<TOTAL-ASSETS> 25,320
<CURRENT-LIABILITIES> 5,957
<BONDS> 406
0
0
<COMMON> 209
<OTHER-SE> 18,468
<TOTAL-LIABILITY-AND-EQUITY> 25,320
<SALES> 0
<TOTAL-REVENUES> 4,701
<CGS> 0
<TOTAL-COSTS> 1,580
<OTHER-EXPENSES> 2,666
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14
<INCOME-PRETAX> 496
<INCOME-TAX> 144
<INCOME-CONTINUING> 352
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 352
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
