<PAGE>
As filed with the Securities and Exchange Commission on December 12, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
TRI-POINT MEDICAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 56-1959623
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5265 Capital Boulevard
Raleigh, North Carolina 27616
(Address of principal executive offices) (Zip Code)
TRI-POINT MEDICAL CORPORATION
AMENDED AND RESTATED 1996 EQUITY COMPENSATION PLAN
(Full title of the plan)
ROBERT V. TONI
President and Chief Executive Officer
Tri-Point Medical Corporation
5265 Capital Boulevard
Raleigh, NC 27616
(Name and address of agent for service)
(919) 876-7800
(Telephone number, including area code, of agent for service)
-----------------------
Copy of all communications to:
DEBRA J. POUL
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(215) 963-5000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered per share (1) offering price (1) registration fee
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 1,000,000(2) $14.5625 $14,562,500.00 $5,022.00
par value
===============================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(h) solely for the purpose of calculating the
registration fee, based upon the average of the high and low sales prices
of shares of Common Stock on December 10, 1996, as reported on the Nasdaq
National Market.
(2) Pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement also covers such additional shares as may hereinafter be offered
or issued to prevent dilution resulting from stock splits, stock dividends,
recapitalizations or certain other capital adjustments.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents, as filed by Tri-Point Medical
Corporation (the "Registrant") with the Securities and Exchange Commission
(the "Commission"), are incorporated by reference in this Registration
Statement:
(a) The final prospectus dated September 25, 1996 filed by
the Registrant on September 26, 1996 pursuant to Rule 424(b)
under the Securities Act of 1933, as amended.
(b) The Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1996.
(c) The description of the Common Stock of the Registrant
set forth in the Registrant's Registration Statement on Form 8-A
filed by the Registrant on August 15, 1996 to register such
securities under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, after the date of this
Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement that indicates that all securities
offered hereby have been sold or that 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.
Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes hereof to
the extent that a statement contained herein (or in any other subsequently
filed document that is also incorporated by reference herein) modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part hereof.
The financial statements of the Registrant as of December 31,
1994 and 1995 and for each of the three years in the period ended December
31, 1995 incorporated in this Registration Statement on Form S-8 by
reference to the final prospectus dated September 25, 1996 constituting
part of the Registrant's Registration Statement on Form S-1 (File No. 333-
5425), as amended, have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
A. Section 145 of the Delaware General Corporation Law ("Section
145") permits indemnification of directors, officers, agents and
controlling persons of a corporation under certain conditions and subject
to certain limitations. Section 145 empowers a corporation to indemnify 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, by reason of the fact that such
person is or was a director, officer or agent of the corporation or another
enterprise if serving at the request of the corporation. Depending on the
character of the proceeding, a corporation may indemnify against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action,
suit or proceeding if the person indemnified acted in good faith and in a
manner the person reasonably
II-1
<PAGE>
believed to be in or not opposed to, the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe such person's conduct was unlawful. In the case of an
action by or in the right of the corporation, no indemnification may be
made with respect to any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to
the extent that the court of chancery or the court in which such action or
suit was brought shall determine that despite the adjudication of liability
such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Section 145 further provides
that to the extent a director or officer of a corporation has been
successful in the defense of any action, suit or proceeding referred to
above or in defense of any claim, issue or matter therein, such person
shall be indemnified against expenses (including attorneys' fees) actually
or reasonably incurred by such person in connection therewith.
B. As permitted by the Delaware General Corporation Law, the
Company has included a provision in its Restated Certificate of
Incorporation that, subject to certain limitations, eliminates the ability
of the Company and its stockholders to recover monetary damages from a
director of the Company for breach of fiduciary duty as a director.
Article VI of the Company's By-Laws provides for indemnification of the
Company's directors and officers and advancement of expenses to the extent
otherwise permitted by Section 145. In addition, the Company has agreed to
indemnify certain executive officers of the Company pursuant to the terms
of their employment agreements to the maximum extent permitted by
applicable law against all costs, charges and expenses incurred by each in
connection with any action, suit or proceeding to which he may be a party
or in which he may be a witness by reason of his being an officer, director
or employee of the Company or any subsidiary or affiliate of the Company.
C. Reference is made to Section 10 of the Underwriting Agreement
(Exhibit 1 to the Registrant's Registration Statement on Form S-1 (File No.
333-5425)) which provides for indemnification among the Company, the
selling stockholder and the underwriters.
D. As authorized by Section 145 of the Delaware General
Corporation Law and Article VI of the Company's By-Laws, the Company
maintains, on behalf of its directors and officers, insurance protection
against certain liabilities arising out of the discharge of their duties,
as well as insurance covering the Company for indemnification payments made
to its directors and officers for certain liabilities. The premiums for
such insurance are paid by the Company.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
The following exhibits are filed as part of this Registration
Statement.
Exhibit
Number Exhibit
------ -------
5.1 Opinion of Morgan, Lewis & Bockius LLP
10.1 Tri-Point Medical Corporation Amended and Restated
1996 Equity Compensation Plan
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (included in
its opinion filed as Exhibit 5.1 hereto)
24.1 Power of Attorney (included on signature page of this
Registration Statement)
II-2
<PAGE>
Item 9. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
-------- -------
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
the Securities and Exchange Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, 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 that remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein 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 of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
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 Raleigh, North Carolina, on December 12,
1996.
TRI-POINT MEDICAL CORPORATION
By: /s/ Robert V. Toni
-------------------------------
Robert V. Toni
President and Chief Executive
Officer
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 the date indicated.
EACH PERSON IN SO SIGNING ALSO MAKES, CONSTITUTES AND APPOINTS
ROBERT V. TONI AND J. BLOUNT SWAIN, AND EACH OF THEM ACTING ALONE, HIS TRUE
AND LAWFUL ATTORNEY-IN-FACT, WITH FULL POWER OF SUBSTITUTION, TO EXECUTE
AND CAUSE TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, ANY AND ALL
AMENDMENTS AND POST-EFFECTIVE AMENDMENTS TO THIS REGISTRATION STATEMENT,
WITH EXHIBITS THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH, AND
HEREBY RATIFIES AND CONFIRMS ALL THAT SAID ATTORNEY-IN-FACT OR HIS
SUBSTITUTE OR SUBSTITUTES MAY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
<TABLE>
<CAPTION>
Name Capacity Date
---- -------- ----
<S> <C> <C>
/s/ Robert V. Toni President and Chief Executive December 12, 1996
- --------------------------- Officer (principal executive
Robert V. Toni officer) and Director
/s/ J. Blount Swain Vice President and Chief December 12, 1996
- --------------------------- Financial Officer (principal
J. Blount Swain financial and accounting
officer)
/s/ Rolf D. Schmidt Chairman of the Board and December 12, 1996
- --------------------------- Director
Rolf D. Schmidt
/s/ F. William Schmidt Director December 12, 1996
- ---------------------------
F. William Schmidt
/s/ Dennis C. Carey Director December 12, 1996
- ---------------------------
Dennis C. Carey
/s/ Michael K. Lorelli Director December 12, 1996
- ---------------------------
Michael K. Lorelli
/s/ Randy H. Thurman Director December 12, 1996
- ---------------------------
Randy H. Thurman
</TABLE>
<PAGE>
TRI-POINT MEDICAL CORPORATION
REGISTRATION STATEMENT ON FORM S-8
EXHIBIT INDEX
-------------
Exhibit
Number Exhibit
------ -------
5.1 Opinion of Morgan, Lewis & Bockius LLP
10.1 Tri-Point Medical Corporation Amended and Restated 1996
Equity Compensation Plan
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5.1 hereto)
24.1 Power of Attorney (included on signature page of this
Registration Statement)
<PAGE>
Exh 5.1
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
December 12, 1996
Tri-Point Medical Corporation
5265 Capital Boulevard
Raleigh, North Carolina 27616
Re: Tri-Point Medical Corporation - Registration Statement on Form S-8 Relating
to the Tri-Point Medical Corporation Amended and Restated 1996 Equity
--------------------------------------------------------------
Compensation Plan
-----------------
Ladies and Gentlemen:
We have acted as counsel to Tri-Point Medical Corporation, a Delaware
corporation (the "Company"), in connection with the preparation of the subject
Registration Statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), relating to 1,000,000 shares of
the Company's common stock, par value $.01 per share (the "Common Stock"),
issuable under the Tri-Point Medical Corporation Amended and Restated 1996
Equity Compensation Plan (the "Plan").
In rendering the opinion set forth below, we have examined the Registration
Statement and the exhibits thereto, including the Plan, certain records of the
Company's corporate proceedings as reflected in its minute books and such
statutes, records and other documents as we have deemed relevant. In our
examination, we have assumed the genuineness of documents submitted to us as
originals and the conformity with the originals of all documents submitted to us
as copies thereof.
Based on the foregoing, it is our opinion that the shares of Common Stock
issuable under the Plan will be, when issued in accordance with the terms of the
Plan, validly issued, fully paid and nonassessable.
The opinion set forth above is limited to the General Corporation Law of the
State of Delaware, as amended.
<PAGE>
Tri-Point Medical Corporation
December 12, 1996
Page 2
We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act and the rules or regulations of the Commission thereunder.
The opinion expressed herein is solely for your benefit and may be relied upon
only by you.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
Exhibit 10.1
12/11/96
TRI-POINT MEDICAL CORPORATION
AMENDED AND RESTATED 1996 EQUITY COMPENSATION PLAN
As Amended Effective as of November 1, 1996
-------------------------------------------
The purpose of the Tri-Point Medical Corporation 1996 Equity Compensation
Plan (the "Plan") is to provide (i) designated officers (including officers who
are also directors) and other employees of Tri-Point Medical Corporation (the
"Company") and its subsidiaries, (ii) non-employee members of the board of
directors of the Company (the "Board"), and (iii) independent contractors and
consultants who perform valuable services for the Company or its subsidiaries,
with the opportunity to receive grants of incentive stock options, nonqualified
stock options, stock appreciation rights and restricted stock. The Company
believes that the Plan will cause the participants to contribute materially to
the growth of the Company, thereby benefitting the Company's stockholders, and
will align the economic interests of the participants with those of the
stockholders.
1. Administration
--------------
The Plan shall be administered and interpreted by a committee (the
"Committee"), which shall consist of two or more persons appointed by the Board,
all of whom shall be "outside directors" as defined under section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code") and related Treasury
regulations, and may be "non-employee directors" as defined under Rule 16b-3
under the Securities Exchange Act of 1934 (the "Exchange Act").
The Committee shall have the sole authority to (i) determine the
individuals to whom grants shall be made under the Plan, (ii) determine the
type, size and terms of the grants to be made to each such individual, (iii)
determine the time when the grants will be made and the duration of any
applicable exercise or restriction period, including the criteria for vesting
and the acceleration of vesting and (iv) deal with any other matters arising
under the Plan.
The Committee shall have full power and authority to administer and
interpret the Plan, to make factual determinations and to adopt or amend such
rules, regulations, agreements and instruments for implementing the Plan and for
the conduct of its business as it deems necessary or advisable, in its sole
discretion. The Committee's interpretations of the Plan and all determinations
made by the Committee pursuant to the powers vested in it hereunder shall be
conclusive and binding on all persons having any interests in the Plan or in any
awards granted hereunder. All powers of the Committee shall be executed in its
sole discretion, in the best interest of the Company and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals.
<PAGE>
2. Grants
------
Incentives under the Plan shall consist of grants of incentive stock
options, nonqualified stock options, stock appreciation rights and restricted
stock (hereinafter collectively referred to as "Grants"). All Grants shall be
subject to the terms and conditions set forth herein and to those other terms
and conditions consistent with this Plan as the Committee deems appropriate and
as are specified in writing by the Committee to the individual (the "Grant
Letter"). The Committee shall approve the form and provisions of each Grant
Letter to an individual. Grants under a particular Section of the Plan need not
be uniform as among the grantees.
3. Shares Subject to the Plan
--------------------------
(a) Subject to the adjustment specified below, the aggregate number of
shares of common stock of the Company (the "Company Stock") that may be issued
or transferred under the Plan is 1,000,000 shares in the aggregate.
Notwithstanding anything in the Plan to the contrary, the maximum aggregate
number of shares of Company Stock that shall be subject to Grants made under the
Plan to any individual during any calendar year shall be 75,000 shares. The
shares may be authorized but unissued shares of Company Stock or reacquired
shares of Company Stock, including shares purchased by the Company on the open
market for purposes of the Plan. If and to the extent options or stock
appreciation rights granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised or if any
shares of restricted stock are forfeited, the shares subject to such Grants
shall again be available for purposes of the Plan.
(b) If there is any change in the number or kind of shares of Company Stock
outstanding by reason of a stock dividend, recapitalization, stock split, or
combination or exchange of shares, or a merger, reorganization or consolidation
in which the Company is the surviving corporation, reclassification or change in
par value or by reason of any other extraordinary or unusual events affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced due to the Company's payment of an extraordinary dividend
or distribution, then (i) the maximum number of shares of Company Stock
available for Grants, (ii) the maximum number of shares of Company Stock which
any one individual participating in the Plan may be granted during the term of
the Plan, (iii) the number of shares covered by outstanding Grants, and (iv) the
price per share or the applicable market value of such Grants shall be
proportionately adjusted by the Committee to reflect any increase or decrease in
the number or kind of issued shares of Company Stock to preclude the enlargement
or dilution of rights and benefits under such Grants; provided, however, that
any fractional shares resulting from such adjustment shall be eliminated. The
adjustments determined by the Committee shall be final, binding and conclusive.
Notwithstanding the foregoing, no adjustment shall be authorized or made
pursuant to this Section to the extent that such authority or adjustment would
cause any incentive stock option to fail to comply with section 422 of the Code.
-2-
<PAGE>
4. Eligibility for Participation
-----------------------------
All employees of the Company and its subsidiaries ("Employees"), including
Employees who are officers or members of the Board, shall be eligible to
participate in the Plan. All members of the Board who are not employees of the
Company or any of its subsidiaries ("Non-Employee Directors") shall be eligible
only to receive nonqualified stock options pursuant to Section 6. Any
independent contractors or consultants who perform valuable services to the
Company or any of its subsidiaries ("Consultants") shall be eligible to
participate in the Plan, but shall not be eligible to receive incentive stock
options.
The Committee shall select the Employees and Consultants to receive Grants
and determine the number of shares of Company Stock subject to a particular
Grant in such manner as the Committee determines. Employees, Consultants, and
Non-Employee Directors who receive Grants under this Plan shall hereinafter be
referred to as "Grantees". Non-Employee Directors shall receive Grants only in
accordance with the terms of Section 6.
Nothing contained in this Plan shall be construed to (i) limit the right of
the Committee to make Grants under this Plan in connection with the acquisition,
by purchase, lease, merger, consolidation or otherwise, of the business or
assets of any corporation, firm or association, including options granted to
employees thereof who become Employees of the Company, or for other proper
corporate purpose, or (ii) limit the right of the Company to grant stock options
or make other awards outside of this Plan.
5. Granting of Options
-------------------
(a) Number of Shares. The Committee, in its sole discretion, shall
----------------
determine the number of shares of Company Stock that will be subject to each
Grant of stock options to any Employee or Consultant.
(b) Type of Option and Price. The Committee may grant options intended to
------------------------
qualify as "incentive stock options" within the meaning of section 422 of the
Code ("Incentive Stock Options") or options which are not intended to so qualify
("Nonqualified Stock Options") or any combination of Incentive Stock Options and
Nonqualified Stock Options (hereinafter collectively the "Stock Options"), all
in accordance with the terms and conditions set forth herein.
The purchase price of Company Stock subject to a Stock Option shall be
determined by the Committee and may be equal to, greater than, or less than the
Fair Market Value (as defined below) of a share of such Stock on the date such
Stock Option is granted; provided, however, that (i) the purchase price of
Company Stock subject to an Incentive Stock Option shall be equal to, or greater
than, the Fair Market Value of a share of such Stock on the date such Stock
Option is granted and (ii) an Incentive Stock Option may not be granted to an
Employee who, at the time of grant, owns stock possessing more than 10 percent
of the total combined voting power of all
-3-
<PAGE>
classes of stock of the Company or any parent or subsidiary of the Company,
unless the option price per share is not less than 110% of the Fair Market Value
of Company Stock on the date of grant.
If the Company Stock is traded in a public market, then the Fair Market
Value per share shall be (i) if the principal trading market for the Company
Stock is a national securities exchange or the National Market segment of the
Nasdaq Stock Market, the last reported sale price thereof on the relevant date
or (if there were no trades on that date) the latest preceding date upon which a
sale was reported, or (ii) if the Company Stock is not principally traded on
such exchange or market, the mean between the last reported "bid" and "asked"
prices thereof on the relevant date, as reported on Nasdaq, or, if not so
reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Committee determines. If the Company Stock is not traded in a public market or
subject to reported transactions or "bid" or "ask" quotations as set forth
above, the Fair Market Value per share shall be as determined by the Committee.
(c) Option Term. The Committee shall determine the term of each Stock
-----------
Option. The term of any Stock Option shall not exceed ten years from the date
of grant. Notwithstanding the foregoing, an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all classes of stock of
the Company or any parent or subsidiary of the Company, unless the option term
does not exceed five years from the date of grant.
(d) Exercisability of Options. Subject to Section 6, Stock Options shall
-------------------------
become exercisable in accordance with the terms and conditions determined by the
Committee, in its sole discretion, and specified in the Grant Letter. The
Committee, in its sole discretion, may accelerate the exercisability of any or
all outstanding Stock Options at any time for any reason. In addition, all
outstanding Stock Options automatically shall become fully and immediately
exercisable upon a Change of Control (as defined herein) in accordance with the
provisions of Section 11, unless in cases not covered by Section 11(f), the
Committee in its sole discretion determines not to accelerate such Stock Options
upon a Change of Control. The Committee may make such determination prior to
the Change of Control or, if the Committee making such determination following a
Change of Control is comprised of the same members as served on the Committee
immediately prior to such Change of Control, within five days following such
Change of Control.
(e) Manner of Exercise. A Grantee may exercise a Stock Option which has
------------------
become exercisable, in whole or in part, by delivering a notice of exercise to
the Committee with accompanying payment of the option price in accordance with
Subsection (g) below. Such notice may instruct the Company to deliver shares of
Company Stock due upon the exercise of the Stock Option to any registered broker
or dealer designated by the Committee in lieu of delivery to the Grantee. Such
instructions must designate the account into which the shares are to be
deposited.
-4-
<PAGE>
(f) Termination of Employment, Disability or Death.
----------------------------------------------
(i) Except as provided below, a Stock Option may only be exercised
while the Grantee is employed by the Company as an Employee, Consultant or
member of the Board. In the event that a Grantee ceases to be employed by the
Company for any reason other than a "disability", death, or "termination for
cause", any Stock Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within 90 days of the date on which the Grantee
ceases to be employed by the Company (or within such other period of time as may
be specified in the Grant Letter), but in any event no later than the date of
expiration of the option term. Any of the Grantee's Stock Options which are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by the Company shall terminate as of such date.
(ii) In the event the Grantee ceases to be employed by the Company
on account of a "termination for cause" by the Company, any Stock Option held by
the Grantee shall terminate as of the date the Grantee ceases to be employed by
the Company.
(iii) In the event the Grantee ceases to be employed by the Company
because the Grantee is "disabled", any Stock Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within one year of
the date on which the Grantee ceases to be employed by the Company (or within
such other period of time as may be specified in the Grant Letter), but in any
event no later than the date of expiration of the option term. Any of the
Grantee's Stock Options which are not otherwise exercisable as of the date on
which the Grantee ceases to be employed by the Company shall terminate as of
such date.
(iv) If the Grantee dies while employed by the Company or within 90
days after the date on which the Grantee ceases to be employed by the Company on
account of a termination of employment specified in Section 5(f)(i) above (or
within such other period of time as may be specified in the Grant Letter), any
Stock Option which is otherwise exercisable by the Grantee shall terminate
unless exercised within one year of the date on which the Grantee ceases to be
employed by the Company (or within such other period of time as may be specified
in the Grant Letter), but in any event no later than the date of expiration of
the option term. Any of the Grantee's Stock Options which are not otherwise
exercisable as of the date on which the Grantee ceases to be employed by the
Company shall terminate as of such date.
(v) For purposes of this Section 5(f), the term "Company" shall
include the Company's subsidiaries, and the following terms shall be defined as
follows: (A) "disability" shall mean a Grantee's becoming disabled within the
meaning of section 22(e)(3) of the Code and (B) "termination for cause" shall
mean, except to the extent otherwise provided in a Grantee's Grant Letter, a
finding by the Committee, after full consideration of the facts presented on
behalf of both the Company and the Grantee, that the Grantee has breached his or
her employment or service contract with the Company, or has been engaged in
disloyalty to the Company, including, without limitation, fraud, embezzlement,
theft, commission of a felony or proven dishonesty in the course of his or her
employment or service, or has disclosed trade secrets or confidential
information of
-5-
<PAGE>
the Company to persons not entitled to receive such information. In such event,
in addition to the immediate termination of the Stock Option, the Grantee shall
automatically forfeit all option shares for any exercised portion of a Stock
Option for which the Company has not yet delivered the share certificates upon
refund by the Company of the option price paid by the Grantee for such shares.
(g) Satisfaction of Option Price. The Grantee shall pay the option price
----------------------------
specified in the Grant Letter in (i) cash, (ii) with the approval of the
Committee, by delivering shares of Company Stock owned by the Grantee (including
Company Stock acquired in connection with the exercise of a Stock Option,
subject to such restrictions as the Committee deems appropriate) and having a
Fair Market Value on the date of exercise equal to the option price or (iii)
through any combination of (i) and (ii). The Grantee shall pay the option price
and the amount of withholding tax due, if any, at the time of exercise. Shares
of Company Stock shall not be issued or transferred upon exercise of a Stock
Option until the option price is fully paid and any required withholding is
made.
(h) Limits on Incentive Stock Options. Each Incentive Stock Option shall
---------------------------------
provide that, to the extent that the aggregate Fair Market Value of the stock on
the date of the grant with respect to which Incentive Stock Options are
exercisable for the first time by a Grantee during any calendar year under the
Plan or any other stock option plan of the Company or a parent or subsidiary
exceeds $100,000, then such option as to the excess shall be treated as a
Nonqualified Stock Option. An Incentive Stock Option shall not be granted to
any participant who is not an Employee of the Company or any parent or
subsidiary (within the meaning of section 424(f) of the Code).
6. Formula Option Grants to Non-Employee Directors
-----------------------------------------------
A Non-Employee Director shall be entitled to receive Nonqualified Stock
Options in accordance with this Section 6.
(a) Initial Grant. Each Non-Employee Director who first becomes a member
-------------
of the Board on or after the effective date of this Plan (as specified in
Section 19) will receive a grant of a Nonqualified Stock Option to purchase
25,000 shares of Company Stock immediately upon the date he or she becomes a
member of the Board; provided, however, that an initial grant pursuant to this
Section 6 to a Non-Employee Director who first becomes a member of the Board on
or after the effective date of this Plan and before the consummation of the
Company's initial public offering of Common Stock (a "Pre-IPO Initial Grant")
shall be made as of the date the Non-Employee Director first becomes a member of
the Board on or after the effective date of this Plan (which is the date of
grant) and shall become effective as of the Effective Time as defined in the
Contribution and Exchange Agreement dated as of May 30, 1996 by and among (1)
Sharpoint Development Corporation, (2) Robert V. Toni, J. Blount Swain, Jeffrey
G. Clark, Joe B. Barefoot, Jeffery C. Basham, Jeffrey C. Leung and Anthony V.
Seaber, (3) Caratec, L.L.C., (4) Cacoosing Partners, L.P., OMI Partners, L.P.,
Triangle Partners, L.P., F. W. Schmidt and Rolf D.
-6-
<PAGE>
Schmidt, and (5) the Company; and provided, further, that if such Effective Time
has not occurred on or prior to September 30, 1996, any Pre-IPO Initial Grants
shall be null, void and of no further effect without any additional action
required pursuant to the terms of this Plan.
(b) Annual Grants. On each date that the Company holds its annual meeting
-------------
of stockholders, commencing with the 1997 calendar year, each Non-Employee
Director in office immediately after the annual election of directors (other
than directors first elected at such meeting) will receive a grant of a
Nonqualified Stock Option to purchase 5,000 shares of Company Stock. The date
of grant of such annual Grants shall be the date of such annual meeting of
stockholders.
(c) Purchase Price. The purchase price per share of Company Stock subject
--------------
to a Stock Option granted under this Section 6 shall be equal to the Fair Market
Value of a share of Company Stock on the date of grant, provided that the
purchase price per share of Company Stock subject to a Stock Option granted by a
Pre-IPO Initial Grant shall be $1 less than the offering price to the public in
the Company's initial public offering.
(d) Option Term. The term of each Stock Option granted pursuant to this
-----------
Section 6 shall be ten years.
(e) Exercisability. Options granted under this Section 6 shall be
--------------
exercisable with respect to 50% of the shares on the date of grant, and an
additional 25% on each anniversary of the date of grant until such Option is
fully exercisable.
(f) Administration. The provisions of this Section 6 are intended to
--------------
operate automatically and not require administration. However, to the extent
that administrative determinations are required, the provisions of this Section
6 shall be made by the members of the Board who are not eligible to receive
grants under this Section 6, but in no event shall such determinations affect
the eligibility of Grantees, the determination of the purchase price, the timing
of the grants or the number of shares subject to Stock Options granted
hereunder.
(g) Applicability of Plan Provisions. Except as otherwise provided in this
--------------------------------
Section 6, the Nonqualified Stock Options granted to Non-Employee Directors
shall be subject to the provisions of this Plan applicable to Nonqualified Stock
Options granted to other persons, provided however that (i) with respect to the
termination of Stock Options pursuant to the provisions of Section 5(f), the
Committee shall not have discretion to modify the terms of such provisions in
the Grant Letter and (ii) in the event of a Change of Control (as defined in
Section 10), the provisions of Section 11 shall apply to Stock Options granted
pursuant to this Section 6, except that the Committee shall not have discretion
to modify the automatic acceleration provisions.
7. Restricted Stock Grants
-----------------------
-7-
<PAGE>
The Committee may issue or transfer shares of Company Stock to an Employee
or Consultant under a Grant of restricted stock (a "Restricted Stock Grant"),
upon such terms as the Committee deems appropriate. The following provisions
are applicable to Restricted Stock Grants:
(a) General Requirements. Shares of Company Stock issued pursuant to
--------------------
Restricted Stock Grants may be issued for consideration or for no consideration,
at the sole discretion of the Committee. The Committee shall establish
conditions under which restrictions on the transfer of shares of Company Stock
shall lapse over a period of time or according to such other criteria as the
Committee deems appropriate. The period of years during which the Restricted
Stock Grant will remain subject to restrictions will be designated in the Grant
Letter as the "Restriction Period."
(b) Number of Shares. The Committee shall grant to each Grantee a number
----------------
of shares of Company Stock pursuant to a Restricted Stock Grant in such manner
as the Committee determines.
(c) Requirement of Employment. If the Grantee ceases to be employed by the
-------------------------
Company (as an Employee or Consultant) during a period designated in the Grant
Letter as the Restriction Period, or if other specified conditions are not met,
the Restricted Stock Grant shall terminate as to all shares covered by the Grant
as to which restrictions on transfer have not lapsed and those shares of Company
Stock must be immediately returned to the Company. The Committee may, however,
provide for complete or partial exceptions to this requirement as it deems
equitable.
(d) Restrictions on Transfer and Legend on Stock Certificate. During the
--------------------------------------------------------
Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of Company Stock to which such Restriction
Period applies except to a Successor Grantee (as defined below) under Section 9.
Each certificate for a share issued or transferred under a Restricted Stock
Grant shall contain a legend giving appropriate notice of the restrictions in
the Grant. The Grantee shall be entitled to have the legend removed from the
stock certificate covering any of the shares subject to restrictions when all
restrictions on such shares have lapsed.
(e) Right to Vote and to Receive Dividends. During the Restriction Period,
--------------------------------------
unless the Committee determines otherwise, the Grantee shall have the right to
vote shares subject to the Restricted Stock Grant and to receive any dividends
or other distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee.
(f) Lapse of Restrictions. All restrictions imposed under the Restricted
---------------------
Stock Grant shall lapse upon the expiration of the applicable Restriction Period
and the satisfaction of any conditions imposed by the Committee. The Committee
may determine, as to any or all Restricted Stock Grants, that all the
restrictions shall lapse without regard to any Restriction Period. All
restrictions under all outstanding Restricted Stock Grants shall automatically
and immediately
-8-
<PAGE>
lapse upon a Change of Control, unless, in cases not covered by Section 10(f),
the Committee in its sole discretion determines that the restrictions shall not
lapse upon a Change of Control. The Committee may make such determination prior
to the Change of Control or, if the Committee making such determination
following a Change of Control is comprised of the same members as served on the
Committee immediately prior to such Change of Control, within five days
following such Change of Control.
8. Stock Appreciation Rights
-------------------------
(a) General Requirements. The Committee may grant stock appreciation
--------------------
rights ("SARs") to any Grantee in tandem with any Stock Option, for all or a
portion of the applicable Stock Option, either at the time the Stock Option is
granted or at any time thereafter while the Stock Option remains outstanding;
provided, however, that in the case of an Incentive Stock Option, such rights
may be granted only at the time of the Grant of such Stock Option. Unless the
Committee determines otherwise, the base price of each SAR shall be equal to the
greater of (i) the exercise price of the related Stock Option or (ii) the Fair
Market Value of a share of Company Stock as of the date of Grant of such SAR.
(b) Number of SARs. The number of SARs granted to a Grantee which shall be
--------------
exercisable during any given period of time shall not exceed the number of
shares of Company Stock which the Grantee may purchase upon the exercise of the
related Stock Option during such period of time. Upon the exercise of a Stock
Option, the SARs relating to the Company Stock covered by such Stock Option
shall terminate. Upon the exercise of the SAR's, the related Stock Option shall
terminate to the extent of an equal number of shares of Company Stock.
(c) Value of SARs. Upon a Grantee's exercise of some or all of the
-------------
Grantee's SARs, the Grantee shall receive in settlement of such SARs an amount
equal to the value of the stock appreciation for the number of SARs exercised,
payable in cash, Company Stock or a combination thereof. The stock appreciation
for an SAR is the amount by which the Fair Market Value of the underlying
Company Stock on the date of exercise of the SAR exceeds the base price of the
SAR as described in subsection (a).
(d) Form of Payment. At the time of such exercise, the Grantee shall have
---------------
the right to elect the portion of the amount to be received that shall consist
of cash and the portion that shall consist of shares of Company Stock, which for
purposes of calculating the number of shares of Company stock to be received,
shall be valued at their Fair Market Value on the date of exercise of such SARs.
The Committee shall have the right to disapprove a Grantee's election to receive
cash in full or partial settlement of the SARs exercised and to require that
shares of Company Stock be delivered in lieu of cash. If shares of Company
Stock are to be received upon exercise of an SAR, cash shall be delivered in
lieu of any fractional share.
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<PAGE>
(e) Certain Restrictions. An SAR is exercisable only during the period
--------------------
when the Stock Option to which it is related is also exercisable.
9. Transferability of Grants
-------------------------
Only the Grantee or his or her authorized representative may exercise
rights under a Grant. Such persons may not transfer those rights except by will
or by the laws of descent and distribution or, with respect to Grants other than
Incentive Stock Options, if permitted in any specific case by the Committee in
its sole discretion pursuant to a qualified domestic relations order (as defined
under the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the regulations thereunder). When a Grantee dies, the
representative or other person entitled to succeed to the rights of the Grantee
("Successor Grantee") may exercise such rights. A Successor Grantee must
furnish proof satisfactory to the Company of his or her right to receive the
Grant under the Grantee's will or under the applicable laws of descent and
distribution.
Notwithstanding the foregoing, the Committee may provide, in a Grant
Letter, that a Grantee may transfer Nonqualified Stock Options to his or her
children, grandchildren or spouse or to one or more trusts for the benefit of
such family members or to partnerships in which such family members are the only
partners (a "Family Transfer"), provided that the Grantee receives no
consideration for a Family Transfer and the Grant Letters relating to
Nonqualified Stock Options transferred in a Family Transfer continue to be
subject to the same terms and conditions that were applicable to such
Nonqualified Stock Options immediately prior to the Family Transfer.
10. Change of Control of the Company
--------------------------------
As used herein, a "Change of Control" shall be deemed to have occurred if:
(a) As a result of a tender offer, stock purchase, other stock
acquisition, merger, consolidation, recapitalization, reverse split, or sale or
transfer of assets, any person or group (as such terms are used in and under
Section 13(d) of the Exchange Act), but excluding Rolf D. Schmidt and F. William
Schmidt or any entity controlled by either or both of them, becomes the
beneficial owner (as defined in Rule 13-d under the Exchange Act), directly or
indirectly, of securities of the Company representing more than 50.1% of the
common stock of the Company or the combined voting power of the Company's then
outstanding securities;
(b) A liquidation or dissolution of the Company, or a sale (excluding
transfers to subsidiaries) of all or substantially all of the Company's assets
occurs; or
(c) During any period of two consecutive years, individuals who, at
the beginning of such period, constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the Company's
-10-
<PAGE>
stockholders, of at least two-thirds of the directors who were not directors at
the beginning of such period was approved by a vote of at least two-thirds of
the directors then still in office who were either directors at the beginning of
the period or who, in connection with their election or nomination, received the
foregoing two-thirds approval.
11. Consequences of a Change of Control
-----------------------------------
(a) Notice. Unless the Committee determines otherwise:
------
(i) If a Change of Control described in Section 10(a) or (b) will
occur, then, not later than 10 days after the approval by the stockholders of
the Company (or approval by the Board, if stockholder action is not required) of
such Change of Control, the Company shall give each Optionee with any
outstanding Stock Options written notice of such proposed Change of Control.
(ii) If a Change of Control described in Section 10(a) may occur
without approval by the stockholders (or approval by the Board) and does so
occur, or if a Change of Control described in Section 10(c) occurs, then, not
later than 10 days after such Change of Control, the Company shall give each
Optionee with any outstanding Stock Options written notice of the Change of
Control.
(b) Election Period. In connection with the Change of Control and
---------------
effective only upon such Change of Control, unless the Committee determines
otherwise, each Grantee shall thereupon have the right, within 20 days after
such written notice is sent by the Company (the "Election Period"), to make an
election as described in Subsection (c) with respect to all of his or her
outstanding Stock Options (whether the right to exercise such Stock Options has
then accrued or the right to exercise such Stock Options will occur or has
occurred upon the Change of Control).
(c) Election Right. The Committee shall determine, in its sole discretion,
--------------
whether Grantees will have either or both of the rights described below. During
the Election Period, unless the Committee determines otherwise, each Grantee
shall have the right to elect:
(i) To exercise in full any installments of such Stock Options not
previously exercised, or
(ii) To surrender all or part of such outstanding Stock Options, in
exchange for a payment by the Company, in cash or Company Stock as determined by
the Committee, in an amount equal to the excess over the purchase price of the
then Fair Market Value of the shares of Company Stock subject to the Grantee's
outstanding Stock Options.
(d) Termination of Stock Options. If a Grantee does not make a timely
----------------------------
election in accordance with Subsection (c) in connection with a Change of
Control where the Company is
-11-
<PAGE>
not the surviving corporation (or survives only as a subsidiary of another
corporation), the Grantee's Stock Options shall terminate as of the Change of
Control. Notwithstanding the foregoing, a Stock Option will not terminate if
assumed by the surviving or acquiring corporation, or its parent, upon a merger
or consolidation and, with respect to an Incentive Stock Option, the assumption
of the Option occurs under circumstances which are not deemed a modification of
the Option within the meaning of sections 424(a) and 424(h)(3)(A) of the Code.
(e) Accounting and Tax Limitations. Notwithstanding the foregoing:
------------------------------
(i) If the right described in Subsection (c)(ii) would make the
applicable Change of Control ineligible for pooling of interest accounting
treatment under APB No. 16 or make such Change of Control ineligible for desired
tax treatment with respect to such Change of Control and, but for those
provisions, the Change of Control would otherwise qualify for such treatment,
the Grantee shall receive shares of Company Stock with a Fair Market Value equal
to the cash that would otherwise be payable pursuant to Subsection (c)(ii) in
substitution for such cash, and
(ii) If the termination of the Stock Options described in Subsection
(d) would make the applicable Change of Control ineligible for pooling of
interest accounting treatment under APB No. 16 and, but for such provision, the
Change of Control would otherwise qualify for such treatment, each affected
Grantee shall receive a replacement or substitute stock option issued by the
surviving or acquiring corporation.
(f) Other Limitations. Notwithstanding any other provision of this Section
-----------------
11, if a Change of Control described in Section 10(a) will occur, or if a Change
of Control described in Section 10(b) will occur and the Company will not be the
surviving corporation, then (i) all outstanding Stock Options shall be
exercisable, (ii) the restrictions on all outstanding Restricted Stock shall
lapse, (iii) the Committee notice required by Subsection (a) shall be mandatory
and (iv) the Grantee shall have the right to make the election called for in
Subsection (c), subject to the provisions of Subsections (d) and (e) and further
subject to the Committee's right to permit only the election under Subsection
(c)(i).
12. Amendment and Termination of the Plan
-------------------------------------
(a) Amendment. The Board may amend or terminate the Plan at any time;
---------
provided, however, that any amendment that increases the aggregate number (or
individual limit for any single Grantee) of shares of Company Stock that may be
issued or transferred under the Plan (other than by operation of Section 3(b)),
or modifies the requirements as to eligibility for participation in the Plan,
shall be subject to approval by the stockholders of the Company and provided,
further, that the Board shall not amend the Plan without stockholder approval if
such approval is required by section 162(m) of the Code.
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<PAGE>
(b) Termination of Plan. The Plan shall terminate on the day immediately
-------------------
preceding the tenth anniversary of its effective date unless terminated earlier
by the Board or unless extended by the Board with the approval of the
stockholders.
(c) Termination and Amendment of Outstanding Grants. A termination or
-----------------------------------------------
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the
Committee acts under Section 20(b). The termination of the Plan shall not
impair the power and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an outstanding Grant may be
terminated or amended under Section 20(b) or may be amended by agreement of the
Company and the Grantee consistent with the Plan.
(d) Governing Document. The Plan shall be the controlling document. No
------------------
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
13. Funding of the Plan
-------------------
This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants.
14. Rights of Participants
----------------------
Nothing in this Plan shall entitle any Employee, Consultant or other person
to any claim or right to be granted a Grant under this Plan. Neither this Plan
nor any action taken hereunder shall be construed as giving any individual any
rights to be retained by or in the employ of the Company or any other employment
rights.
15. No Fractional Shares
--------------------
No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Grant. The Committee shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.
-13-
<PAGE>
16. Withholding of Taxes
--------------------
(a) Required Withholding. The Company shall have the right to deduct from
--------------------
all Grants paid in cash, or from other wages paid to the Grantee, any federal,
state or local taxes required by law to be withheld with respect to such cash
awards and, in the case of Grants paid in Company Stock, the Grantee or other
person receiving such shares shall be required to pay to the Company the amount
of any such taxes which the Company is required to withhold with respect to such
Grants or the Company shall have the right to deduct from other wages paid by
the Company the amount of any withholding due with respect to such Grants.
(b) Election to Withhold Shares. A Grantee may make an election to satisfy
---------------------------
the Company income tax withholding obligation with respect to a Stock Option,
SAR or Restricted Stock by having shares withheld up to an amount that does not
exceed the Grantee's maximum marginal tax rate for federal (including FICA),
state and local tax liabilities. Such election must be in the form and manner
prescribed by the Committee and is subject to the prior approval of the
Committee.
17. Requirements for Issuance of Shares
-----------------------------------
No Company Stock shall be issued or transferred in connection with any
Grant hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Grant made to any Grantee hereunder on such Grantee's undertaking in writing
to comply with such restrictions on his or her subsequent disposition of such
shares of Company Stock as the Committee shall deem necessary or advisable as a
result of any applicable law, regulation or official interpretation thereof and
certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be applicable under such laws, regulations and other obligations of the
Company, including any requirement that a legend or legends be placed thereon.
18. Headings
--------
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
19. Effective Date of the Plan.
--------------------------
This Plan shall be effective on May 28, 1996. The amendment and
restatement shall be effective as of November 1, 1996.
20. Miscellaneous
-------------
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<PAGE>
(a) Substitute Grants. The Committee may make a Grant to an employee of
-----------------
another corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option or restricted stock grant made by such corporation ("Substituted Stock
Incentives"). The terms and conditions of the substitute grant may vary from
the terms and conditions required by the Plan and from those of the Substituted
Stock Incentives. The Committee shall prescribe the provisions of the substitute
grants.
(b) Compliance with Law. The Plan, the exercise of Stock Options and the
-------------------
obligations of the Company to issue or transfer shares of Company Stock under
Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. The
Committee may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation.
The Committee may also adopt rules regarding the withholding of taxes on
payments to Grantees. The Committee may, in its sole discretion, agree to limit
its authority under this Section.
(c) Ownership of Stock. A Grantee or Successor Grantee shall have no
------------------
rights as a stockholder with respect to any shares of Company Stock covered by a
Grant until the shares are issued or transferred to the Grantee or Successor
Grantee on the stock transfer records of the Company.
(d) Governing Law. The validity, construction, interpretation and effect
-------------
of the Plan and Grant Letters issued under the Plan shall exclusively be
governed by and determined in accordance with the law of the State of Delaware.
-15-
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated June 3, 1996 relating to the financial
statements of Tri-Point Medical Corporation, which report appears on page F-2 of
the Prospectus constituting part of the Registration Statement on Form S-1 (File
No. 333-5425), as amended.
PRICE WATERHOUSE LLP
Raleigh, North Carolina
December 11, 1996
