<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 27, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VITALCOM INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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DELAWARE 33-0538926
- ------------------------ ------------------------------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
15222 DEL AMO AVENUE
TUSTIN, CALIFORNIA 92780
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
----------------------------------------
1993 STOCK OPTION PLAN
(AS AMENDED THROUGH DECEMBER 1997)
(Full Title of the Plan)
----------------------------------------
SHELLEY B. THUNEN
CHIEF FINANCIAL OFFICER
VITALCOM INC.
15222 DEL AMO AVENUE
TUSTIN, CALIFORNIA 92780
(714) 546-0147
(NAME, ADDRESS, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------------------------
COPY TO:
BARRY E. TAYLOR, ESQ.
MARK E. BONHAM, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(650) 493-9300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE REGISTERED TO BE REGISTERED OFFERING PRICE PER SHARE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, $0.0001 par value
To be issued under 1993 stock option plan.... 750,000 shares(1) 4.56(2)
=============================================================================================
</TABLE>
<TABLE>
<CAPTION>
PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, $0.0001 par value
To be issued under 1993 stock option plan.... $3,415,358(2) $ 1,008.00
============================================================================================
</TABLE>
(1) An additional 750,000 shares reserved for issuance under the 1993 Stock
Option Plan were registered under the Registration Statement on Form
S-8, file number 333-901 with the Securities and Exchange Commission on
August 19, 1997 and an additional 839,885 shares reserved for issuance
under the 1993 Stock Option Plan were registered under the Registration
Statement on Form s-8/s-3, file number 333-03727 with the Securities
and Exchange Commission on May 14, 1996.
(2) Computed in accordance with Rule 457 under the Securities Act of 1933,
as amended. Such computation is based on an estimated exercise price of
$4.70 per share, which represents the weighted average exercise price
with respect to 1,558,633 shares issuable upon exercise of granted
options, and an estimated exercise price of $4.25 per share, which is
based on the closing price of a share of VitalCom Inc. Common Stock as
reported in the Nasdaq National Market on February 24, 1998.
THE INDEX TO EXHIBITS IS ON PAGE 7.
<PAGE> 2
VITALCOM INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference in this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission (the "Commission") by VitalCom Inc. (the
"Company"):
(1) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A/A filed January
16, 1996 pursuant to Section 12(g) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") as amended on
February 13, 1996.
(2) The Company's Annual Report on Form 10-K/A for the year ended
December 31, 1996.
(3) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997.
(3) The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997.
(4) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities registered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation limits the monetary
liability of its directors to the Company or its stockholders for breach of such
director's fiduciary duty to the fullest extent permitted by the Delaware
General Corporation Law (the "DGCL") or, if the DGCL is not applicable, to the
fullest extent permissible under applicable law. In addition, the Company's
charter authorizes the Company by bylaw, agreement or otherwise to indemnify
directors, officers, employees and agents in excess of the indemnification
permitted by applicable law.
II-1
<PAGE> 3
Under the Company's by-laws, each person who was or is a party or is
threatened to be made a party to, or is involved in, any proceeding by reason of
the fact that he or she is or was a director or officer of the Company, or is or
was serving at the request of the Company as a director, officer, employee or
agent of another corporation or other enterprise, shall be indemnified and held
harmless by the Company to the fullest extent permitted by the DGCL against all
costs, charges, expenses, liabilities and losses (including attorney's fees)
reasonably incurred or suffered by such person in connection with such
proceeding. Such right to indemnification includes the right to be paid by the
Company the expenses incurred in defending any such proceeding in advance of its
final disposition. The Board of Directors has discretion to provide
indemnification to employees and agents of the Company with the same scope and
effect as the foregoing indemnification of directors and officers. The foregoing
right to indemnification and advancement of expenses under the Company's by-laws
is not exclusive of any other right which any person may have or acquire under
the Company's charter, any statute, agreement or otherwise.
In addition, the Company has entered into indemnification agreements
with each of its directors and executive officers and has obtained a directors'
and officers' liability insurance policy that insures such persons against the
cost of defense, settlement or payment of judgments under certain circumstances.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit
Number Description
------ -----------
4.1 1993 Stock Option Plan, as amended through December 1997, and
form of agreement thereunder.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (contained in Exhibit 5.1).
23.2 Independent Auditors' Consent.
24.1 Power of Attorney (see page II-4).
- ----------
ITEM 9. UNDERTAKINGS.
A. The Company hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement.
II-2
<PAGE> 4
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to law, the Company's Certificate of Incorporation,
Bylaws or indemnification agreements, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in a successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered
hereunder, the Company will, unless in the opinion of its counsel the matter has
already been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tustin, State of California, on this 27th day of
February, 1998.
VITALCOM INC.
By: /s/ Shelley B. Thunen
-------------------------------------
Shelley B. Thunen,
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Frank T. Sample and Shelley B. Thunen,
and each of them, as his or her attorney-in-fact, with full power of
substitution in each, for him or her in any and all capacities to sign any
amendments to this Registration Statement on Form S-8, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact, or his substitutes, may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on this 27th day of February, 1998.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Frank T. Sample President, Chief Executive Officer
- ------------------------------- (Principal Executive Officer) and Director
Frank T. Sample
/s/ Shelley B. Thunen Chief Financial Officer (Principal
- ------------------------------- Financial and Accounting Officer)
Shelley B. Thunen
/s/ Patrick T. Hackett Director
- -------------------------------
Patrick T. Hackett
/s/ Jack W. Lasersohn Director
- -------------------------------
Jack W. Lasersohn
/s/ Timothy T. Weglicki Director
- -------------------------------
Timothy T. Weglicki
</TABLE>
II-4
<PAGE> 6
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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EXHIBITS
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Registration Statement on Form S-8
VITALCOM INC.
February 27, 1998
<PAGE> 7
INDEX TO EXHIBITS
Exhibit
Number Description
------ -----------
4.1 1993 Stock Option Plan, as amended through December 1997, and
form of agreement thereunder.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (contained in Exhibit 5.1).
23.2 Independent Auditors' Consent.
24.1 Power of Attorney (see page II-4).
<PAGE> 1
EXHIBIT 4.1
VITALCOM INC.
1993 STOCK OPTION PLAN
(AMENDED AND RESTATED DECEMBER 1997)
1. Purposes of the Plan.
The purposes of this 1993 Stock Option Plan (the "Plan") of VITALCOM
INC., a Delaware corporation (the "Company"), are (a) to insure the retention of
the services of existing executive personnel, key employees and directors of the
Company and its subsidiaries or its affiliates; (b) to attract and retain
competent new executive personnel and key employees; and (c) to provide
incentive to all such personnel and employees to devote their utmost effort and
skill to the advancement and betterment of the Company, by permitting them to
participate in the ownership of the Company and thereby in the success and
increased value of the Company.
2. Shares Subject to the Plan.
The shares of stock subject to the incentive options having the
terms and conditions set forth in Section 6 below (hereinafter "incentive
options") and/or nonqualified options having the terms and conditions set forth
in Section 7 below (hereinafter "nonqualified options") and other provisions of
the Plan shall be shares of the Company's authorized but unissued or reacquired
Common Stock (herein sometimes referred to as the "Common Stock"). The total
number of shares of the Common Stock of the Company which may be issued under
the Plan shall not exceed, in the aggregate, 2,339,885 shares. The limitations
established by the preceding sentence shall be subject to adjustment as provided
in Section 8 below. In the event that any outstanding incentive option or
nonqualified option granted under the Plan can no longer under any circumstances
be exercised, for any reason, the shares of Common Stock allocable to the
unexercised portion of such incentive option or nonqualified option may again be
subject to grant or issuance under the Plan.
3. Eligibility.
a. Incentive Options. Officers and other key employees of the
Company or of any subsidiary corporation (including directors if they are also
employees of the Company or a subsidiary), as may be determined by the Board or
the Committee, who qualify for incentive stock options under the applicable
provisions of the Internal Revenue Code, will be eligible for selection to
receive incentive stock options under the Plan. An employee who has been granted
an incentive option may, if otherwise eligible, be granted a nonqualified option
or options or an additional incentive option or options if the Board or
Committee shall so determine.
b. Nonqualified Options. Officers, other key employees of the
Company or of any subsidiary corporation, directors and consultants to the
Company or any subsidiary corporation will be eligible to receive nonqualified
options under the Plan. An individual who has been granted a nonqualified option
may, if otherwise eligible, be granted an incentive option or options or an
additional nonqualified option or options if the Board or Committee shall so
determine.
c. Limitations. The following limitations shall apply to grants
of options to employees of the Company:
<PAGE> 2
i. No employee of the Company shall be granted, in any
fiscal year of the Company, options to purchase more than 400,000 shares of
Common Stock of the Company.
ii. In connection with his or her initial employment, an
employee of the Company may be granted options to purchase up to an additional
400,000 shares of Common Stock of the Company which shall not count against the
limit set forth in subsection i. above.
iii. The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company=s capitalization as
described in Section 8.
iv. If an option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 8), the canceled option will be counted against the limits
set forth in subsections i. and ii. above. For this purpose, if the exercise
price of an option is reduced, the transaction will be treated as a cancellation
of the option and the grant of a new option.
4. Administration of the Plan.
a. This Plan shall be administered by a committee (the
"Committee") of "non-employee directors" within the meaning of Rule 16b-3 of the
Securities Exchange Act of 1934, as amended. Such Committee shall be appointed
by, and serve at the pleasure of, the Board of Directors.
b. The Committee shall have full and final authority to determine
the persons to whom, and the time or times at which, incentive options or
nonqualified options shall be granted, the number of shares to be represented by
each incentive option and nonqualified option and the consideration to be
received by the Company upon the exercise thereof; to interpret the Plan; to
establish, amend and rescind rules and regulations relating to the Plan; to
determine the form and content of the incentive options or nonqualified options
to be granted under the Plan; to determine the identity or capacity of any
persons who may be entitled to exercise a participant=s rights under any
incentive option or nonqualified option under the Plan; to correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any
incentive option or nonqualified option in the manner and to the extent the
Board or Committee deems desirable to carry the Plan, incentive option or
nonqualified option into effect; to accelerate the exercise date of any
incentive option or nonqualified option; to provide for an option to the Company
to repurchase any shares issued upon exercise of an option upon termination of
employment; and to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Any action, decision, interpretation or determination by
the Committee with respect to the application or administration of the Plan
shall be final and binding on all participants and prospective participants.
5. Option Price of Shares.
a. Incentive Options. The exercise price of the shares of Common
Stock covered by each incentive option granted under the Plan shall not be less
than the fair market value of such shares on the date the incentive option is
granted; provided, however, that the exercise price shall not be less than 110%
of the fair market value if the person to whom such options are granted owns 10%
or more of the total combined voting power of all classes of stock of the
Company or of its parent or subsidiary corporation.
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<PAGE> 3
b. Nonqualified Options. The exercise price of the shares of
Common Stock covered by each nonqualified option granted under the Plan shall
not be less than the fair market value of such shares on the date the
nonqualified option is granted.
c. Fair Market Value. For purposes of this Section 5, fair market
value shall, if the Common Stock is not listed or admitted to trading on a stock
exchange or The Nasdaq National Market on the over-the-counter market, be the
average of the closing bid price and asked price of the Common Stock in the
over-the-counter market on the date the incentive option or nonqualified option
is granted or, if the Common Stock is then listed or admitted to trading on any
stock exchange or The Nasdaq National Market, the closing sale price on such day
on the principal stock exchange on which the Common Stock is then listed or
admitted to trading or The Nasdaq National Market, as the case may be. If no
closing bid and asked prices are quoted on such day, or if no sale takes place
on such day on such principal exchange or on The Nasdaq National Market, then
the average of the closing bid and asked prices on the next preceding day on
which such prices were quoted, or closing sale price of the Common Stock on such
principal exchange or The Nasdaq National Market on the next preceding day on
which a sale occurred, as the case may be, shall be deemed to be the fair market
value of the Common Stock. During such times as there is not a market price
available, the fair market value of the Company=s Common Stock shall be
determined by the Committee, which shall consider, among other facts which it
considers to be relevant, the book value of such stock and the earnings of the
Company. The exercise price shall be subject to adjustment as provided in
Section 8 below.
6. Terms and Conditions of Incentive Options.
Each incentive option granted pursuant to this Plan shall be
evidenced by a written Option Agreement which shall specify that the options
subject thereto are incentive options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended. The granting of an incentive option
shall take place at the time of Committee action granting the option. The Option
Agreement shall be in such form as the Committee shall, from time to time,
recommend, but shall comply with and be subject to the following terms and
conditions:
a. Medium and Time of Payment. The exercise price of an incentive
option shall be payable (i) in United States dollars payable in cash, certified
check, or bank draft; (ii) subject to any legal restrictions on the acquisition
or purchase of its shares by the Company, by the delivery of shares of Common
Stock which (x) in the case of shares acquired upon exercise of an option have
been owned by the optionee for more than six (6) months on the date of surrender
and (y) have an aggregate fair market value on the date of surrender equal to
the aggregate exercise price of the shares as to which the option is being
exercised; (iii) in the discretion of the Committee, by the issuance of a
promissory note in a form acceptable to the Committee; (iv) delivery of a
properly executed exercise notice together with such other documentation as the
Committee and broker, if applicable, shall require to effect an exercise of the
option and delivery to the Company of the sale or loan proceeds required to pay
the exercise price; or (v) any combination of (i), (ii), (iii) or (iv) above.
b. Number of Shares. The incentive option shall state the total
number of shares to which it pertains.
c. Term of Incentive Option. Each incentive option granted under
the Plan shall expire within a period of not more than ten (10) years from the
date the incentive option is granted; provided, however, that the incentive
option shall expire within a period of not more than five (5) years if granted
to a person who
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<PAGE> 4
owns more than 10% of the combined voting power of all classes of stock of the
Company or of its parent or subsidiary corporation.
d. Date of Exercise. Each incentive stock option granted pursuant
to this Plan shall become exercisable on each successive anniversary of the
grant date of such options in increments of twenty five percent (25%); provided,
however, that in the discretion of the Committee, individual Option Agreements
may contain different exercise schedules.
e. Termination of Association Except Upon Death or Disability. In
the event of an optionee's termination of association with the Company (as
hereinafter defined) for any reason other than his death or disability, (i) all
incentive options granted to any such optionee pursuant to this Plan which are
not exercisable at the date of such termination of association shall terminate
immediately and become void and of no effect, and (ii) all incentive options
granted to any such optionee pursuant to this Plan which are exercisable at the
date of such termination of association may be exercised (but only to the extent
such options were exercisable as of the date of such termination of association)
at any time within three (3) months of the date of such termination of
association, but in any event no later than the date of expiration of the
incentive option period, and if not so exercised within such time shall become
void and of no effect at the end of such time. For purposes of this Plan, the
term "termination of association" with the Company shall mean (i) for any person
who is an employee of the Company or a subsidiary of the Company but not also a
director of the Company, the cessation of such person=s employment with the
Company or a subsidiary of the Company, or any corporation or a parent or
subsidiary of a corporation issuing and assuming an option in a transaction to
which Section 424(a) of the Internal Revenue Code applies (collectively, an
"Affiliate"), (ii) for any person who is both a director of the Company and an
employee of the Company or a subsidiary or Affiliate of the Company, the
cessation of both the employment and status as a director of such person, and
(iii) for any person who is a director of the Company but not also an employee
of the Company or a subsidiary of the Company, the cessation of such person=s
status as a director of the Company.
f. Death or Disability of Optionee. In the event of an optionee=s
termination of association with the Company by reason of his or her death or
disability, (i) all incentive options granted to such person pursuant to this
Plan which are not exercisable at the date of such termination of association
shall terminate immediately and become void and of no effect, and (ii) all
incentive options granted to such person pursuant to this Plan which are
exercisable at the date of such termination of association may be exercised (but
only to the extent they were exercisable as of the date of such termination of
association) at any time within one (1) year after the optionee=s termination of
association as a result of such death or disability, but in any event no later
than the date of expiration of the incentive option period, by such optionee, or
in the event of death, by the executors or administrators of the optionee=s
estate or by any person or persons who shall have acquired the incentive option
directly from the optionee by bequest or inheritance. At the end of such one (1)
year period, all incentive options held by such optionee, to the extent they
remain unexercised, shall terminate and become void and of no effect.
g. Rights as a Stockholder. An optionee or a transferee of an
incentive option shall have no rights as a stockholder with respect to any
shares of Common Stock covered by his or her incentive option until the date of
the issuance of a share certificate to him or her for such shares. No adjustment
shall be made for dividends or distributions or other rights for which the
record date is prior to the date such share certificate is issued.
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<PAGE> 5
h. Nonassignability of Rights. No incentive option shall be
assignable or transferable by the person receiving same except by will or the
laws of descent and distribution. During the life of such person, the incentive
option shall be exercisable only by him or her.
i. Limitation. Notwithstanding any other provisions of the Plan,
to the extent the aggregate fair market value (determined in accordance with the
provisions of Section 5 above as of the time the incentive option is granted) of
the shares of Common Stock with respect to which incentive stock options are
exercisable for the first time by the optionee during any calendar year (under
all such plans of the Company and any parent and subsidiary corporations)
exceeds $100,000, such excess shall be treated as nonqualified options.
j. Notice of Disposition. Each Option Agreement which relates to
the grant of an incentive stock option shall provide that the optionee shall
give prompt written notice to the Company in the event the optionee sells or
otherwise disposes of any shares of Common Stock issued upon the exercise of
such incentive stock options.
k. Other Provisions. Any Option Agreement may contain such other
terms, provisions and conditions as may be determined by the Committee, which
are not inconsistent with the provisions of Section 422 of the Internal Revenue
Code of 1986, as amended, including the option of the Company to repurchase any
shares issued upon the exercise of an option upon termination of employment.
Incentive options granted to different persons, or to the same person at
different times, may be subject to terms, conditions and restrictions which
differ from each other.
7. Terms and Conditions of Nonqualified Options.
Each nonqualified option granted pursuant to this Plan shall be
evidenced by a written Option Agreement which shall specify that the options
subject thereto are nonqualified options. The granting of a nonqualified option
shall take place at the time of Committee action granting such option. The
Option Agreement shall be in such form as the Committee shall, from time to
time, recommend, but shall comply with and be subject to the following terms and
conditions:
a. Medium and Time of Payment. The nonqualified option price
shall be payable (i) in United States dollars payable in cash, certified check,
or bank draft; (ii) subject to any legal restrictions on the acquisition or
purchase of its shares by the Company, by the delivery of shares of Common Stock
which (x) in the case of shares acquired upon exercise of an option have been
owned by the optionee for more than six (6) months on the date of surrender and
(y) have an aggregate fair market value on the date of surrender equal to the
aggregate exercise price of the shares as to which the option is being
exercised; (iii) in the discretion of the Committee, by the issuance of
promissory note in a form acceptable to the Committee; (iv) delivery of a
properly executed exercise notice together with such other documentation as the
Committee and broker, if applicable, shall require to effect an exercise of the
option and delivery to the Company of the sale or loan proceeds required to pay
the exercise price; or (v) any combination of (i), (ii), (iii) or (iv) above.
b. Number of Shares. The nonqualified option shall state the
total number of shares to which it pertains.
c. Term of Nonqualified Option. Each nonqualified option granted
under the Plan shall expire within a period of not more than ten (10) years from
the date the nonqualified option is granted.
-5-
<PAGE> 6
d. Date of Exercise. Each nonqualified option granted pursuant to
this Plan shall become exercisable on each successive anniversary of the grant
date of such options in increments of twenty five percent (25%); provided,
however, that in the Committee=s absolute discretion, individual Option
Agreements may contain different exercise schedules.
e. Termination of Association Except Upon Death or Disability. In
the event of an optionee's termination of association with the Company or any
subsidiary or Affiliate of the Company, for any reason other than his or her
death or disability, (i) all nonqualified options granted to any such optionee
pursuant to this Plan which are not exercisable at the date of such termination
of association shall terminate immediately and become void and of no effect, and
(ii) all nonqualified options granted to any such optionee pursuant to this Plan
which are exercisable at the date of such termination of association may be
exercised (but only to the extent they were exercisable as of the date of the
termination of association) at any time within three (3) months of the date of
such termination of association, but in any event no later than the date of
expiration of the nonqualified option period, and if not so exercised within
such time shall become void and of no effect at the end of such time.
f. Death or Disability of Optionee. In the event of an optionee=s
termination of association with the Company by reason of his or her death or
disability, (i) all nonqualified options granted to such optionee pursuant to
this Plan which are not exercisable at the date of such termination of
association shall terminate immediately and become void and of no effect, and
(ii) all nonqualified options granted to such optionee pursuant to this Plan
which are exercisable at the date of such termination of association may be
exercised (but only to the extent they were exercisable as of the date of the
termination of association) at any time within one (1) year after the optionee=s
death or disability, but in any event no later than the date of expiration of
the nonqualified option period, by such optionee, or in the event of death, by
the executors or administrators of the optionee=s estate or by any person or
persons who shall have acquired the nonqualified option directly from the
optionee by bequest or inheritance. At the end of such one (1) year period, all
nonqualified options held by such optionee, to the extent they remain
unexercised, shall terminate and become void and of no effect.
g. Rights as a Stockholder. An optionee or an offeree or a
transferee of a nonqualified option shall have no rights as a stockholder with
respect to any shares of Common Stock covered by his or her nonqualified option
until the date of the issuance of a share certificate to such optionee for such
shares. No adjustment shall be made for dividends or distributions or other
rights for which the record date is prior to the date such share certificate is
issued.
h. Nonassignability of Rights. Except as provided by the
Committee, no nonqualified option shall be assignable or transferable by the
person receiving same except by will or the laws of descent and distribution.
During the life of such person, the nonqualified option shall be exercisable
only by him or her.
i. Other Provisions. Any Option Agreement may contain such other
terms, provisions and conditions as may be determined by the Committee.
Nonqualified options granted to different persons, or to the same person at
different times, may be subject to terms, conditions and restrictions which
differ from each other.
8. Changes in Capital Structure.
In the event that the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company by reason
of merger, consolidation or reorganization in which the Company is the surviving
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<PAGE> 7
corporation or of a recapitalization, stock split, combination of shares,
reclassification, reincorporation, stock dividend (in excess of 2%), or other
change in the corporate structure of the Company, appropriate adjustments shall
be made by the Board of Directors in the aggregate number and kind of shares
subject to this Plan, and the number and kind of shares and the price per share
subject to outstanding incentive options and nonqualified options in order to
preserve, but not to increase, the benefits to persons then holding incentive
options and/or nonqualified options.
In the event that the Company at any time proposes to (i) merge
into, consolidate with or to enter into any other reorganization (including the
sale of substantially all of its assets) in which the Company is not the
surviving corporation, or (ii) enter into a merger or other reorganization as a
result of which the outstanding shares of Common Stock of the Company will be
changed into or exchanged for shares of the capital stock or other securities of
another corporation or for cash or property, then the Plan and all unexercised
incentive options and nonqualified options granted hereunder shall terminate,
unless provision is made in writing in connection with such transaction for the
assumption of incentive options and nonqualified options theretofore granted, or
the substitution for such incentive options and nonqualified options of new
options covering shares of a successor corporation, with appropriate adjustments
as to number and kind of shares and prices, in which event the Plan and the
incentive options and nonqualified options theretofore granted, or the new
incentive options and nonqualified options substituted therefor, shall continue
in the manner and under the terms so provided. If such provision is not made in
such transaction for the continuance of the Plan and the assumption of incentive
options and nonqualified options theretofore granted or the substitution for
such incentive options and nonqualified options of new incentive options and
nonqualified options covering the shares of a successor corporation, then the
Committee shall cause written notice of the proposed transaction to be given to
the persons holding incentive options or nonqualified options not less than
thirty (30) days prior to the anticipated effective date of the proposed
transaction, and all incentive options and nonqualified options shall be
accelerated and, concurrent with the effective date of the proposed transaction,
such person shall have the right to exercise incentive options and nonqualified
options in respect of any or all shares then subject thereto.
9. Amendment and Termination of the Plan.
The Board of Directors of the Company may from time to time alter,
amend, suspend or terminate the Plan in such respects as the Board of Directors
may deem advisable; provided, however, that no such alteration, amendment,
suspension or termination shall be made which shall substantially affect or
impair the rights of any person under any incentive option or nonqualified
option theretofore granted to such person without his or her consent; provided
further, however, that the approval of the Company's stockholders shall be
obtained to the extent necessary and desirable to comply with applicable law.
Unless the Plan shall theretofore have been terminated, the Plan
shall be effective on September 22, 1993, and shall terminate on September 21,
2003.
10. Application of Funds.
The proceeds received by the Company from the sale of Common Stock
pursuant to incentive options and nonqualified options will be used for general
corporate purposes.
11. No Obligation to Exercise Option.
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<PAGE> 8
The granting of an incentive option or nonqualified option shall
impose no obligation upon the optionee to exercise such incentive option or
nonqualified option.
12. Continuance of Employment or Status as Director.
The Plan or the granting of any incentive option or nonqualified
option thereunder shall not impose any obligation on the Company or its
stockholders to continue the employment of any optionee who is an employee, or
to retain as a director any optionee who is a director.
13. Tax Withholding.
Whenever shares are to be issued under the Plan, the Company or any
subsidiary of the Company employing the recipient shall have the right to deduct
from the recipient=s compensation or require the recipient to remit to the
employer corporation, prior to the issuance of the shares, an amount sufficient
to satisfy federal, state and local withholding tax requirements. The Committee
shall have the discretion to allow an optionee to satisfy tax withholding
obligations by electing to have the Company withhold from the shares to be
issued upon exercise of an Option that number of shares having a fair market
value equal to the amount required to be withheld. The fair market value of the
shares to be withheld shall be determined on the date that the amount of tax to
be withheld is determined.
14. Stockholder Approval.
This Plan must be approved by the Company=s stockholders within
twelve (12) months following its approval by the Board of Directors of the
Company. Any stock option exercised before stockholder approval is obtained must
be rescinded if stockholder approval is not obtained within twelve (12) months
following approval of the Plan by the Board of Directors.
15. General Provisions.
Notwithstanding any other provision of this Plan or agreements made pursuant
thereto, the Company shall not be required to issue or deliver any certificate
or certificates for shares of stock upon the exercise of options granted under
this Plan prior to fulfillment of all of the following conditions:
(a) Any registration or other qualification of such shares under
any state or federal law or regulation, or the maintaining in effect of any such
registration or other qualification which the Committee shall, in its absolute
discretion, deem necessary or advisable;
(b) The obtaining of any other consent, approval or permit from
any state or federal governmental agency which the Committee shall, in its
absolute discretion, determine to be necessary or advisable; and
(c) The execution and delivery to the Company by the recipient of
an investment representation letter containing such assurances and/or
representations as the Committee shall, in its absolute discretion, determine to
be necessary or advisable to satisfy the requirements for exemptions from
registration and qualification under applicable state and federal securities
laws.
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EXHIBIT 5.1
February 27, 1998
VitalCom Inc.
15222 Del Amo Avenue
Tustin, California 92780
Re: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on February 27, 1998 (as such
may thereafter be amended or supplemented, the "Registration Statement"), in
connection with the registration under the Securities Act of 1933, as amended,
of 750,000 shares of your Common Stock, $.0001 par value (the "Shares") which
are to be issued pursuant to the 1993 Stock Option Plan. As your legal counsel,
we have examined the proceedings taken, and are familiar with the proceedings
proposed to be taken, by you in connection with the sale and issuance of the
Shares.
It is our opinion that, upon completion of the proceedings being taken
or contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares, the Shares, when issued and sold in the manner described in the
Registration Statement and in accordance with the resolutions adopted by the
Board of Directors of the Company, will be legally and validly issued, fully
paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
<PAGE> 1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of VitalCom Inc. of our reports dated February 14, 1997 appearing in
the Annual Report on Form 10-K/A of VitalCom Inc. for the year ended
December 31, 1996.
Deloitte & Touche LLP
Costa Mesa, California
February 25, 1998
