As filed with the Securities and Exchange Commission on October 16, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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JOHNSON & JOHNSON
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(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of 22-1024240
incorporation or organization) (I.R.S. Employer Identification No.)
One Johnson & Johnson Plaza 08933
New Brunswick, New Jersey (Zip Code)
(Address of Principal
Executive Offices)
Johnson & Johnson/Biosense (Israel) Ltd. 1995 Stock Option Plan
Johnson & Johnson/Biosense, Inc. 1996 Stock Option Plan
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(Full title of the plan)
Philip P. Crowley, Esq.
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933
908-524-2455
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(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
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Proposed
Proposed maximum
maximum aggregate
Title of securities Amount to be offering price offering Amount of
to be registered registered[1] per share[2] price [2] registration
fee
Common Stock,
$.01 par value 819,239 $59.625 $48,847,126 $14,803
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[1] Of the 819,239 shares of Common Stock registered hereby, 550,081
shares are issuable under the Johnson & Johnson/ Biosense (Israel)
Ltd. 1995 Stock Option Plan and 269,158 shares are issuable under the
Johnson & Johnson/Biosense, Inc. 1996 Stock Option Plan.
[2] Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 and based on
the average of the highest and lowest prices at which shares of Common
Stock of Johnson & Johnson were sold on October 15, 1997 (NYSE-Composite
Transactions).
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<PAGE>
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant are incorporated herein by
reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 29,
1997;
(b) Quarterly Report of Form 10-Q for the fiscal quarter ended March 30,
1997.
(c) Quarterly Report on Form 10-Q for the fiscal quarter ended June 29,
1997; and
(d) The description of the Registrant's Common Stock set forth in the
Registrant's Registration Statements filed pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and any amendments or reports filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
after the date hereof and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a 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.
The validity of the issuance of the Common Stock being registered hereby has
been passed upon for the Registrant by Philip P. Crowley, Esq., Assistant
General Counsel and Assistant Secretary of the Registrant. Mr.
Crowley is paid a salary by the Registrant, is a participant in various
employee benefit plans offered to employees of the Registrant generally, and
owns and has options to purchase shares of Common Stock of the Registrant.
Item 6. Indemnification of Directors and Officers.
The New Jersey Business Corporation Act (the "NJBCA") provides that a New
Jersey corporation has the power to indemnify a director or officer against
his or her expenses and liabilities in connection with any proceeding
involving the director or officer by reason of his or her being or having
been a director or officer, other than a proceeding by or in the right of
the corporation, if such a director or officer acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation; and with respect to any criminal proceeding,
such director or officer had no reasonable cause to believe his or her
conduct was unlawful.
The indemnification and advancement of expenses shall not exclude any other
rights, including the right to be indemnified against liabilities and
expenses incurred in proceedings by or in the right of the corporation, to
which a director or officer may be entitled under a certificate of
incorporation, by-law, agreement, vote of shareholders, or otherwise;
provided, that no indemnification shall be made to or on behalf of a
director or officer if a judgment or other final adjudication adverse to
the director or officer establishes that his or her acts or omissions (a)
were in breach or his or her duty of loyalty to the corporation or its
shareholders, (b) were not in good faith or involved a knowing violation of
law or (c) resulted in receipt by the director or officer of an improper
personal benefit.
The Registrant's Restated Certificate of Incorporation provides that, to
the full extent that the laws of the State of New Jersey permit the
limitation or elimination of the liability of directors and officers, no
director or officer of the Registrant shall be personally liable to the
Registrant or its stockholders for damages for breach of any duty owed to
the Registrant or its stockholders.
The By-laws of the Registrant provide that, to the full extent permitted by
the laws of the State of New Jersey, the Registrant shall indemnify any
person (an "Indemnitee") who was or is involved in any manner (including,
without limitation, as a party or witness) in any threatened, pending or
completed investigation, claim, action, suit or proceeding, whether civil,
criminal, administrative, arbitrative, legislative or investigative
(including, without limitation, any action, suit or proceeding by or in the
right of the Registrant to procure a judgment in its favor) (a
"Proceeding"), or who is threatened with being so involved, by reason of
the fact that he or she is or was a director or officer of the Registrant
or, while serving as a director or officer of the Registrant, is or was at
the request of the Registrant also serving as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust
<PAGE>
or other enterprise (including, without limitation, any employee benefit
plan), against all expenses (including attorneys' fees), judgments, fines,
penalties, excise taxes and amounts paid in settlement actually and
reasonably incurred by the Indemnitee in connection with such Proceeding,
provided that, there shall be no indemnification thereunder with respect to
any settlement or other nonadjudicated disposition of any threatened or
pending Proceeding unless the Registrant has given its prior consent to
such settlement or disposition. The right of indemnification created by
By-laws shall be a contract right enforceable by an Indemnitee against the
Registrant, and it shall not be exclusive of any other rights to which an
Indemnitee may otherwise be entitled. These provisions of the By-laws shall
insure to the benefit of the heirs and legal representatives of an
Indemnitee and shall be applicable to Proceedings commenced or continuing
after the adoption of the By-laws, whether arising from acts or omissions
occurring before or after such adoption. No amendment, alternation, change,
addition or repeal of or to the By-laws shall deprive an Indemnitee of any
rights under the By-laws with respect to any act or omission of such
Indemnitee occurring prior to such amendment, alteration, change, addition
or repeal.
The Registrant enters into indemnification agreements with its directors
and officers and enters into insurance agreements on its own behalf. The
indemnification agreements provide that the Registrant agrees to hold
harmless and indemnify its directors and officers to the fullest extent
authorized or permitted by the NJBCA, or any other applicable law, or by
any amendment thereof or other statutory provisions authorizing or
permitting such indemnification that is adopted after the date hereof.
Without limiting the generality of the foregoing, the Registrant agrees to
hold harmless and indemnify its directors and officers to the fullest
extent permitted by applicable law against any and all expenses, judgments,
fines, and amounts paid in settlement actually and reasonably incurred by
its directors and officers in connection with the defense of any present or
future threatened, pending, or completed claim, action, suite, or
proceeding by reason of the fact that they were, are, shall be, or shall
have been a director or officer of the Registrant, or are or were serving,
shall serve, or shall have served, at the request of the Registrant, as a
director or officer of another corporation, partnership, joint venture,
trust, employee benefit plan, or other enterprise.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits
Exhibit Description
4.1 Johnson & Johnson/Biosense (Israel) Ltd. 1995 Stock Option Plan.
4.2 Johnson & Johnson/Biosense, Inc. 1996 Stock Option Plan.
5.1 Opinion of Philip P. Crowley, Esq.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Philip P. Crowley, Esq. (included in Exhibit 5.1)
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 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;
(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; and
(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 undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of
the Exchange Act and
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each filing of the 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.
(h) Insofar as indemnification for liabilities arising under the Securities
Act 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.
<PAGE>
SIGNATURES
The Registrant. 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 New Brunswick, State of New
Jersey, on the 14th day of October, 1997.
Signatures Title Date
---------- ----- ----
/s/ R. S. Larsen
- ----------------------- Chief Executive Officer October 14, 1997
Johnson & Johnson
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ R. S. Larsen
----------------------- Chairman, Board of Directors
R. S. Larsen Executive Officer, and
Directors (Principal October 14, 1997
Executive Officer)
/s/ R. J. Darretta
- ----------------------- Vice President Finance
R. J. Darretta (Principal Financial Officer) October 10, 1997
/s/ C. E. Lockett
- -----------------------
C. E. Lockett Controller October 13, 1997
/s/ G. N. Burrow
- -----------------------
G. N. Burrow Director October 10, 1997
/s/ J. G. Cooney
- -----------------------
J. G. Cooney Director October 10, 1997
/s/ J. G. Cullen
- -----------------------
J. G. Cullen Director October 14, 1997
/s/ P. M. Hawley
- -----------------------
P. M. Hawley Director October 15, 1997
<PAGE>
- -----------------------
A. D. Jordan Director October , 1997
- -----------------------
A. G. Langbo Director October , 1997
/s/ J. S. Mayo
- -----------------------
J. S. Mayo Director October 11, 1997
- -----------------------
T. S. Murphy Director October , 1997
/s/ P. J. Rizzo
- -----------------------
P. J. Rizzo Director October 10, 1997
/s/ H. B. Schacht
- -----------------------
H. B. Schacht Director October 10, 1997
/s/ M. F. Singer
- -----------------------
M. F. Singer Director October 10, 1997
/s/ R. B. Smith
- -----------------------
R. B. Smith Director October 10, 1997
/s/ R. N. Wilson Vice Chairman, October 10, 1997
- ----------------------- Board of Directors
R. N. Wilson and Director
<PAGE>
EXHIBIT INDEX
Exhibit Page
4.1 Johnson & Johnson/Biosense (Israel) Ltd. 1995
Stock Option Plan.
4.2 Johnson & Johnson/Biosense, Inc. 1996 Stock
Option Plan.
5.1 Opinion of Philip P. Crowley, Esq.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Philip P. Crowley, Esq. (included
in Exhibit 5.1)
Exhibit 4.1
JOHNSON & JOHNSON/BIOSENSE (ISRAEL) LTD.
1995 STOCK OPTION PLAN
I. PURPOSE
On September 4, 1997, Johnson & Johnson ("J&J"), a New Jersey
corporation, entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Biosense Inc. (the "Company"), a Delaware corporation.
Under the terms of the Merger Agreement, a wholly-owned subsidiary of
J&J was merged with and into the Company (the "Merger"). Biosense
(Israel) Ltd. ("Biosense") is a subsidiary of the Company. Under the
terms of the Merger Agreement, options (the "Original Options") on
shares of the former common stock, par value $0.01 per share, of the
Company in effect immediately prior to the Effective Time (as defined in
the Merger Agreement) under the Biosense (Israel) Ltd. 1995 Stock Option
Plan (the "Original Plan") upon the effectiveness of the Merger became
an option to receive shares of the common stock, par value 1.00 per
share, of J&J. J&J has agreed to substitute for the Original Options for
shares of the common stock, par value $1.00 per share, of J&J
("Substituted Options"). It is the intention of J&J to treat as
"employees" under this Plan those holders of Substituted Options who are
or have been employed by or provide or have provided services to
Biosense and by companies directly or indirectly through one or more
subsidiaries controlling, controlled by or under common control with
Biosense (each an "Affiliate").
Except for options issued shortly after the effectiveness of
the Merger in substitution for Original Options, no further options
shall be granted under this plan (the "Plan").
The Substituted Options granted under the Plan are intended to
be non-qualified options ("Non-Qualified Options") since each of the
Original Options was a non-qualified Option. No substituted Option is
intended to be an "incentive stock option" as described in Section 422
of the Code.
<PAGE>
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
The total number of shares of common stock, par value $1.00 per
share, of J&J which may be purchased pursuant to the exercise of
Substituted Options granted under the Plan shall not exceed, in the
aggregate, that number of shares of Company common stock for which
Original Options were granted under the Original Plan multiplied by the
Exchange Ratio (as defined in the Merger Agreement) (the "Shares"). In
the case of each Substituted Option, the number of Shares subject
thereto shall be determined by multiplying the Exchange Ratio by the
number of shares of Company common stock subject to the Original Option
and rounding such result down to the nearest whole number. The exercise
price for each Share subject to a Substituted Option shall be the
exercise price set forth in the Original Option divided by the Exchange
Ratio.
Shares acquired under the Plan may be either authorized but
unissued Shares, Shares of issued stock held in J&J's treasury, or both,
at the discretion of J&J. If and to the extent that Substituted Options
granted under the Plan expire or terminate without having been
exercised, the Shares covered by such expired or terminated options
shall not become available again for award under the Plan.
III. ADMINISTRATION
The Compensation Committee of the board of directors of J&J
(the "Compensation Committee") shall administer the Plan.
A majority of the members of the Compensation Committee shall
constitute a quorum, and the act of a majority of the members of the
Compensation Committee present and voting shall constitute an action of
such committee.
Subject to the express provisions of the Plan, the Compensation
Committee shall also have the authority to construe the Plan and the
options granted thereunder, to amend the Plan and the Substituted
Options granted thereunder, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the terms and provisions
of the respective Substituted Options (which need not be identical) and
to make all other determinations necessary or advisable for
administering the Plan, provided they do not affect the principles of
the Plan. The Compensation Committee also shall have the authority to
require as a condition of the granting of any such Substituted Option,
to the extent required as a condition to the grant of the Original
Option, that the employee, or such other person, as the case may be,
agree (i) not sell or otherwise dispose of Shares acquired pursuant to
the award of Substituted Options for a period of six months following
the date of acquisition of such Shares, and (ii) that in the event of
termination of employment of such employee, other than as a result of
dismissal without cause, such employee, or such other person, as the
case may be, will not, for a period of time fixed at the time of the
grant of the Original Option, enter into
<PAGE>
any other employment or participate directly or indirectly in any other
business or enterprise which is competitive with the business of
Biosense or any Affiliate, or enter into any employment in which such
employee will be called upon to utilize special knowledge obtained
through employment with Biosense or any Affiliate.
Without limiting the foregoing, upon granting a Substituted
Option, the Compensation Committee shall notify the person to whom the
option shall have been granted and shall deliver to such person an
Option Agreement, evidencing such Substituted Option. An award of a
Substituted Option shall immediately expire if the person to whom the
Compensation Committee has decided to grant a Substituted Option shall
not have (and no Substituted Option shall be exercisable unless and
until such person has) signed the Option Agreement and returned it to
J&J within thirty days after delivery to such individual of the Option
Agreement. Subject to the express provisions of this Plan, the
Compensation Committee may prescribe in the Option Agreement for each
holder thereof such provisions as are substantially equivalent to those
set forth in the option agreement of such holder under the Original
Plan.
Each Substituted Option and the Shares which the holder thereof
will receive when the Substituted Option is exercised must be held by a
Trustee for a period of at least two years from the date of the grant of
the Original Option to which such Substituted Option relates. The Shares
issued pursuant to a Substituted Option will be registered with the
appropriate authority indicated by J&J.
The determination of the Compensation Committee on matters
referred to in this Article III shall be conclusive.
The Compensation Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the administration
of the Plan and may rely upon any opinion received from any such counsel
or consultant and any computation received from any such consultant or
agent. Expenses incurred by the Compensation Committee in the engagement
of such counsel, consultant or agent shall be paid by J&J. No member of
the Compensation Committee shall be liable for any action or
determination made in good faith with respect to the Plan or to the
award of any Substituted Option granted hereunder.
IV. ELIGIBILITY
Substituted Options shall be granted only to holders of
Original Options to the extent that such Original Options remain
unexpired and unexercised at the Effective Time of the Merger.
Except as set forth in the prior sentence, the Plan does not
create a right in any employee to participate in the Plan nor does it
create a right in any employee to have any Substituted Options granted
to him or her.
<PAGE>
The holder of a Substituted Option shall have none of the
rights of a shareholder with respect to Shares underlying such option
until such Shares shall have been issued upon exercise of the
Substituted Option.
V. OPTION PRICE AND PAYMENT
The price for each Share purchasable under any Substituted
Option granted hereunder shall be the exercise price per share of
Biosense Inc. common stock pursuant to the Original Option divided by
the Exchange Ratio.
Upon the exercise of a Substituted Option granted hereunder,
J&J shall cause the purchased Shares to be issued only when it shall
have received the full purchase price for the Shares in cash or by
certified check; provided, however, that in lieu of cash, the holder of
an option may, if and to the extent the terms of such Substituted Option
so provide and to the extent permitted by applicable law, exercise an
option (a) in whole or in part, by delivering to J&J shares of common
stock of J&J (in proper form for transfer and accompanied by all
requisite stock transfer tax stamps or cash in lieu thereof) owned by
such holder having a fair market value equal to the exercise price
applicable to that portion of the option being exercised by the delivery
of such Shares or (b) in part, by delivering to J&J an executed
promissory note, on such terms and conditions as the Compensation
Committee shall determine, at the time of grant, in its sole discretion;
provided, however, that the principal amount of such note shall not
exceed ninety percent (90%) (or such lesser percentage as would be
permitted by applicable margin regulations) of the aggregate purchase
price of the Shares then being purchased pursuant to the exercise of
such Substituted Option. The fair market value of the stock so delivered
shall be determined as of the date immediately preceding the date on
which the option is exercised, or as otherwise may be required in order
to comply with or to conform to the requirements of any applicable laws
or regulations.
The fair value of Shares shall be, on a per share basis, the
average of the high and low price per share for such Shares as reported
by the Wall Street Journal or other financial reporting service used by
J&J as of the date prior to surrender of such stock.
VI. USE OF PROCEEDS
The proceeds of the sale of Shares pursuant to the Plan are to
be added to the general funds of J&J and used for its general corporate
purposes as the Board of Directors in its discretion shall determine.
<PAGE>
VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT
OF EXERCISE
Any Substituted Option shall be immediately exercisable and
shall have a term equal to what, but for the Merger, would have been the
remaining unexpired term of the Original Option to which it relates.
Any Substituted Option not exercised in full within the period
of exercisability specified therein shall, at the end of such period,
expire as to the unexercised part.
In no event shall a Substituted Option granted hereunder be
exercisable for a fraction of a Share.
VIII. EXERCISE OF OPTIONS
Substituted Options granted under the Plan shall be held by a
Trustee until the date (the "release date") two years following the date
of grant of the Original Options to which they relate. After the release
date with respect to a Substituted Option, such option can be exercised
by the holder as to all or part of the Shares covered thereby by the
giving of written notice of the exercise thereof to the Director, Stock
Option Administration, of J&J or such other agent of J&J designated in
the Option Agreement at One Johnson & Johnson Plaza, New Brunswick, NJ
08933 U.S.A. specifying the number of Shares to be purchased and
delivering a certified or bank cashier's check in the amount of the
exercise price for the number of Shares being purchased or such other
consideration as may be permitted under Article V. Subject to the terms
of Articles XIII, XV and XVI, J&J shall cause certificates for the
Shares so purchased to be delivered to the optionee at his or her
address appearing in the records of Biosense or as may otherwise be
requested by such holder.
In case of a transfer by the Trustee to the beneficial holder
or a sale by the Trustee, according to the employee's instructions after
the period of two years the Trustee shall take such steps as may be
required to effect such sale and shall transfer such options/shares to
the purchaser concurrently with the receipt, or after having made
suitable arrangements to secure the payment of the proceeds, of the
purchase price in such transaction. The Trustee shall withhold from such
proceeds 30% or any other percentage, in case that the employee will
present specific confirmation for that percentage issued by the tax
authorities, from the amounts received, according to the Israel tax law
and shall remit the net amount to the beneficial owner, reporting to
such beneficial owner and to J&J the amount so withheld and paid to said
tax authorities.
IX. NON-TRANSFERABILITY OF OPTIONS
An option granted hereunder shall not be transferable, whether by
operation of law or otherwise, other than by will or the laws of descent
and
<PAGE>
distribution, nor shall any option granted hereunder be subject to a
lien or mortgage, and any option granted hereunder shall be exercisable,
during the lifetime of the holder, only by such holder.
X. TERMINATION OF EMPLOYMENT
Upon termination of employment of any option holder with
Biosense and any and all Affiliates, a Substituted Option previously
granted to such holder, unless otherwise specified by the Compensation
Committee in such Non-Qualified Option, shall, to the extent not
theretofore exercised, terminate and become null and void; provided,
however, that:
(a) if the employee shall die while in the employ of such
corporation or during either the two year period specified in clause (b)
below and at such time such employee was entitled to exercise a
Substituted Option as herein provided, the legal representative of such
employee, or such person who acquired such Substituted Option by bequest
or inheritance or by reason of the death of the employee, may, not later
than one year from the date of death, exercise such Substituted Option,
to the extent not theretofore exercised, in respect of any or all of
such number of Shares as specified by the Compensation Committee in such
Option; and
(b) if the employment of any employee to whom such Substituted
Option shall have been granted shall terminate by reason as of the
employee's retirement (at such age or upon such conditions as shall be
specified by the Compensation Committee), disability or dismissal by the
employer other than for cause (as defined below), and at such time
employee is entitled to exercise such Substituted Option as herein
provided, such employee shall have the right to exercise such
Substituted Option, to the extent not theretofore exercised, in respect
of any or all of such number of Shares as specified by the Compensation
Committee in such option, at any time up to and including (i) two years
after the date of such termination of employment in the case of
termination by reason of retirement or dismissal other than for cause
and (ii) two years after the date of termination of employment in the
case of termination by reason of disability.
In no event, however, shall any person be entitled to exercise
any Substituted Option after the expiration of the period of
exercisability of such Substituted Option as specified therein.
If an employee voluntarily terminates his or her employment, or
is discharged for cause, any Substituted Option granted hereunder shall,
unless otherwise specified by the Compensation Committee in the option,
forthwith terminate with respect to any unexercised portion thereof.
If a Substituted Option granted hereunder shall be exercised by
the legal representative of a deceased employee or former employee, or
by a person who acquired a Substituted Option granted hereunder by
bequest or inheritance or by reason of the death of any employee or
former employee,
<PAGE>
written notice of such exercise shall be accompanied by a certified copy
of a letter testamentary or equivalent proof of the right of such legal
representative or other person to exercise such Substituted Option.
For the purposes of the Plan, the term termination "for cause"
shall mean (i) with respect to an employee, who is a party to a written
agreement with, or, alternatively, participates in a compensation or
benefit plan of Biosense or an Affiliate, which agreement or plan
contains a definition of "for cause" or "cause" (or words of like
import) for purposes of termination of employment thereunder by
Biosense, "for cause" or "cause" as defined in the most recent of such
agreements or plans, or (ii) in all other cases, as determined by the
Compensation Committee, in its sole discretion, including, without
limitation, (a) the willful commission by an employee of a criminal or
other act that causes or may cause substantial economic damage or
substantial injury to the business reputation of Biosense or an
Affiliate; (b) the commission by an employee of an act of fraud in the
performance of such employee's duties on behalf of Biosense or an
Affiliate; or (c) the continuing willful failure of an employee to
perform the duties of such employee to Biosense or an Affiliate (other
than such failure resulting from the employee's incapacity due to
physical or mental illness), after written notice thereof (specifying
the particulars thereof in reasonable detail) and a reasonable
opportunity to be heard and cure such failure are given to the employee
by the Compensation Committee or such employee's management. For
purposes of the Plan, no act, or failure to act on the employee's part
shall be considered "willful" unless done or omitted to be done by the
employee not in good faith and without reasonable belief that the
employee's action or omission was in the best interest of Biosense or an
Affiliate.
For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and a corporation if, at the
time of the determination, the individual was an "employee" of such
corporation. If an individual is on military, sick leave or other bona
fide leave of absence, such individual shall be considered an "employee"
for purposes of the exercise of an option and shall be entitled to
exercise such Option during such leave if the period of such leave does
not exceed ninety (90) days, the employment relationship shall be deemed
to have terminated on the ninety-first (91st) day of such leave, unless
the individuals right to re-employment is guaranteed by statute or
contract.
A termination of employment shall not be deemed to occur by
reason of (i) the transfer of an employee from employment by Biosense to
employment an Affiliate, or (ii) the transfer of an employee from
employment by one Affiliate of Biosense to another such Affiliate or to
Biosense.
In the event that a holder of a Substituted Option is employed
by an Affiliate of J&J that is liquidated or dissolved or which ceases
to be an Affiliate of J&J, the Substituted Option of such holder shall
terminate as to any unexercised portion on the date 30 days after the
occurrence of such event and without regard to any limitation set forth
or imposed pursuant to Article VII.
<PAGE>
XI. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
In the event of any change in the outstanding Shares through
merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, split-up, split-off, spin-off, combination of shares,
exchange of shares, or other like change in capital structure of J&J, an
adjustment shall be made to each outstanding Substituted Option so that
each such Substituted Option shall thereafter be exercisable for such
securities, cash and/or other property as would have been received in
respect of the Shares subject to such Substituted Option had such
Substituted Option been exercised in full immediately prior to such
change, and such an adjustment shall be made successively each time any
such change shall occur. The term "Shares" after any such change shall
refer to the securities, cash and/or property then receivable upon
exercise of a Substituted Option. In addition, in the event of any such
change, the Compensation Committee, shall make any further adjustment as
may be appropriate to the maximum number of Shares subject to the Plan,
the maximum number of Shares which may be granted to any one employee,
and the number of Shares and price per Share subject to outstanding
Substituted Options as shall be equitable to prevent dilution or
enlargement of rights under such Substituted Options, and the
determination of the Compensation Committee as to these matters shall be
conclusive.
XII. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on Biosense or on any
Affiliate to continue the employment of any holder of a Substituted
Option; and it shall not impose any obligation on the part of any holder
of a Substituted Option to remain in the employ of Biosense or of any
Affiliate thereof. Nothing in this Article is intended to supersede the
express terms of any written employment agreement entered into by
Biosense or an Affiliate and the holder of a Substituted Option or the
requirements of any applicable laws or governmental regulations.
XIII. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES
Upon any exercise of an option which may be granted hereunder
upon the payment of the purchase price, a certificate or certificates
for the Shares shall be issued by J&J in the name of the person
exercising the Substituted Option and shall be delivered to or upon the
order of such person or persons.
J&J may endorse such legend or legends upon the certificates
for Shares issued pursuant to the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such Shares
as the Board of Directors, in its discretion, determines to be necessary
or appropriate to (i) prevent a violation of, or to perfect an exemption
from, the registration
<PAGE>
requirements of the Securities Act, or (ii) implement the provisions of
the Plan and any agreement between Biosense and the optionee with
respect to such Shares.
J&J shall pay all issue or transfer taxes, if any, with respect
to the issuance or transfer of Shares upon exercise of an option, other
than taxes with respect to the transfer of Shares to any person other
than the holder of such Option, as well as all fees and expenses
necessarily incurred by J&J in connection with such issuance or
transfer, except fees and expenses which may be required for the filing
or amending of a Registration Statement under the Securities Act, which
fees and expenses shall be borne by the recipient of the Shares unless
such Registration Statement has been filed by J&J for its own corporate
purposes (and J&J so states) in which event the recipient of the Shares
shall bear only such fees and expenses as are attributable solely to the
inclusion of the Shares he or she receives in the Registration
Statement.
All Shares issued as provided herein shall be fully paid and
nonassessable to the extent permitted by law.
<PAGE>
XIV. WITHHOLDING TAXES
Biosense may require an employee exercising a Non-Qualified
Option granted hereunder to reimburse the corporation that employs such
employee for any taxes required by any government to be withheld or
otherwise deducted and paid by such corporation in respect of the
issuance, transfer or disposition of such Shares. In lieu thereof, the
corporation that employs such employee shall have the right to withhold
the amount of such taxes from any other sums due or to become due from
such corporation to the employee upon such terms and conditions as the
Compensation Committee shall prescribe. The corporation that employs
such employee may, in its discretion, hold the stock certificate to
which such employee is entitled upon exercise of an option as security
for the payment of such withholding tax liability, until cash sufficient
to pay that liability has been accumulated. In addition, at any time at
which J&J or Biosense becomes subject to a withholding obligation under
any applicable law with respect to the exercise of a Non-Qualified
Option (the "Tax Date"), except as set forth below, a holder of a
Non-Qualified Option may elect to satisfy, in whole or in part, such
holder's related personal tax liabilities (an "Election") by (i)
directing J&J or Biosense to withhold from Shares issuable in the
related exercise either a specified number of Shares or Shares having a
specified value (in each case) not in excess of the related personal tax
liabilities), (ii) tendering Shares previously issued pursuant to the
exercise of an option or other shares of J&J's common stock owned by the
holder or (iii) combining any or all of the foregoing options in any
fashion. An Election shall be irrevocable. The withheld Shares and other
shares tendered in payment should be valued at their fair market value
(determined in accordance with the principles set forth in Article V of
the Plan) on the Tax Date. The Compensation Committee may disapprove of
any Election, suspend or terminate the right to make Elections or
provide that the right to make Elections shall not apply to particular
grants, Shares or exercises. If a holder is a person subject to Section
16 of the Exchange Act then (1) any Election by such holder must be made
(i) at least six months prior to the relevant Tax Date or (ii) on or
prior to the relevant Tax Date and during a period that begins on the
third business day following the date of release of publication of J&J's
quarterly or annual summary statements of sales and earnings and that
ends on the twelfth business day following such date and (2) the
Election may not be made with respect to an exercise, or the withholding
obligation arising thereon, if the relevant Non-Qualified Option was
granted six months or less prior to the date of Election. The
Compensation Committee may impose any other conditions or restrictions
on the right to make the Election as it shall deem appropriate.
The provisions of the existing tax treaty between Israel and
the United States will apply.
XV. LISTING OF SHARES AND RELATED MATTERS
The Compensation Committee may delay any issuance or delivery
of Shares upon the exercise of any Option if it determines that listing,
registration
<PAGE>
or qualification of Shares or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition
of, or in connection with, the sale or purchase of Shares under the
Plan, until such listing, registration, qualification, consent or
approval shall have been effected or obtained, or otherwise provided
for, free of any conditions not acceptable to the Compensation
Committee.
XVI. AMENDMENT OF THE PLAN
The Compensation Committee may, from time to time, amend the
Plan, provided that, without the approval of the shareholders of J&J,
there shall not be made any amendment which will (i) increase the total
number of Shares reserved for Options under the Plan (other than an
increase resulting from an adjustment provided for in Article XI), (ii)
modify the provisions of the Plan relating to eligibility, or (iii)
materially increase the benefits accruing to participants under the
Plan. The rights and obligations under any option granted before
amendment of the Plan shall not be adversely affected by an amendment of
the Plan or option without the consent of the holder of the option.
XVII. TERMINATION OR SUSPENSION OF THE PLAN
The Compensation Committee may at any time suspend or terminate
the Plan. The Plan, unless sooner terminated under Article XX or by
action of the Compensation Committee, shall terminate at the close of
business on the Termination Date. Options may not be granted while the
Plan is suspended or after it is terminated. Rights and obligations
under any Substituted Option granted while the Plan is in effect shall
not be altered or impaired by suspension or termination of the Plan,
except upon the consent of the person to whom such options were granted.
The power of the Compensation Committee to construe and administer any
Substituted Options granted prior to the termination or suspension of
the Plan under Article III shall continue after such termination or
during such suspension.
XVIII. GOVERNING LAW
The Plan and the Options and all related matters shall be
governed by, and construed and enforced in accordance with, the laws of
Israel.
XIX. INVALIDITY; TAXABILITY
The invalidity or illegality of any provision hereof shall not
be deemed to affect the validity of any of other provision. Also, it
should be noted that
<PAGE>
in the event of failure to fulfill the conditions hereunder and/or the
provisions of Israeli tax law, Substituted Options granted hereunder
will be taxable according to Israel tax law.
XX. EFFECTIVE DATE
The Plan shall become effective at the Effective Time under the
Merger Agreement.
Exhibit 4.2
JOHNSON & JOHNSON/BIOSENSE, INC.
1996 STOCK OPTION PLAN
On September 4, 1997, Johnson & Johnson ("J&J"), a New Jersey
corporation, and an affiliated company entered into an Agreement and Plan
of Merger (the "Merger Agreement") with Biosense Inc. (the "Company"), a
Delaware corporation. Under the terms of the Merger Agreement, a
wholly-owned subsidiary of J&J was merged with and into the Company (the
"Merger"). Under the terms of the Merger Agreement, options (the "Original
Options") on shares of the former common stock, par value $0.01 per share,
of the Company in effect immediately prior to the Effective Time (as
defined in the Merger Agreement) under the 1996 Stock Option Plan of
Biosense, Inc. (the "Original Plan") upon the effectiveness of the Merger
became an option to receive shares of the common stock, par value $1.00 per
share, of J&J. J&J has agreed to substitute for the Original Options for
shares of the common stock, par value $1.00 per share, of J&J ("Substituted
Options").
Except for options issued shortly after the effectiveness of the
Merger in substitution for Original Options, no further options shall be
granted under this plan.
The Substituted Options granted under the Plan are intended to be
"NonQualified Options" since each of the Original Options was a
Non-Qualified Option. No Substituted Option is intended to be an "Incentive
Stock Option" as described in Section 422 of the Code.
ARTICLE I
DEFINITIONS
Wherever the following terms are used in this Plan they shall have the
meaning specified below, unless the context clearly indicates otherwise.
1.1 Affiliate. "Affiliate" shall mean any person, firm, corporation or
other entity that directly or indirectly through one or more subsidiaries
controls, is controlled by, or is under common control with the Company.
1.2 Board. "Board" shall mean the Board of Directors of the Company.
1.3 Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.4 Committee. "Committee" shall mean the Compensation Committee of
the board of directors of J&J, or another committee, or a subcommittee of
the board of J&J, appointed as provided in Section 6.1.
<PAGE>
1.5 Company. "Company" shall mean Biosense, Inc., a Delaware
corporation.
1.6 Company Common Stock. "Company Common Stock" shall mean the
common stock, $0.01 par value per share, of the Company.
1.7 Corporate Transaction. "Corporate Transaction" shall mean any of the
following stockholder-approved transactions to which J&J is a party:
(a) a merger or consolidation in which J&J is not the surviving
entity, except for a transaction the principal purpose of which is to
change the State in which J&J is incorporated, form a holding company or
effect a similar reorganization as to form whereupon this Plan and all
Substituted Options are assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of J&J, in complete liquidation or
dissolution of J&J in a transaction not covered by the exceptions to clause
(a) above;
(c) any reverse merger in which J&J is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total
combined voting power of J&J's outstanding securities are transferred to a
person or persons different from those who held such securities immediately
prior to such merger; or
(d) the consummation of any transaction the results of which is that
any "person" (as defined in Section 13(d)(3) under the Exchange Act) other
than any Principal becomes the "beneficial owner" (as defined in Rule 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of more than 35%
of the voting stock of J&J.
For purposes of the foregoing, "Principal" shall mean (A) Shlomo
Ben-Haim, David E. Acker, Lewis C. Pell and Katsumi Oneda, (B) any spouse,
parent, child or estate of any of the persons referred to in clause (A)
above, or (C) any trust, corporation, partnership or other entity the
beneficiaries, stockholders, owners or persons beneficially holding an 80%
or more controlling interest of which consist of any person or persons
referred to in (A) and (B) above.
1.8 Director. "Director" shall mean a member of the Board.
1.9 Employee. "Employee" shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company, or
of any Affiliate.
1.10 Exchange Act. "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
1.11 Exchange Ratio. "Exchange Ratio" shall have the meaning accorded
it in the Merger Agreement.
<PAGE>
1.12 Fair Market Value. "Fair Market Value" of a share of Common Stock
as of a given date shall be the closing price thereof on a composite index
for such date as reported in the Wall Street Journal or other source of
financial information regularly used by J&J.
1.13 Independent Director. "Independent Director" shall mean a member
of the Board who is not an Employee of the Company.
1.14 Israeli Option. "Israeli Option" means a Substituted Option that is
intended to conform to the applicable provisions of the Ordinance.
1.15 J&J Common Stock. "J&J Common Stock" shall mean the common stock,
par value $1.00 per share, of J&J.
1.16 Non-Qualified Stock Option. "Non-Qualified Stock Option" shall
mean a Substituted Option which is not designated by the Committee as and
does not meet the requirements under the Code as an Incentive Stock Option.
1.17 Substituted Option. "Substituted Option" shall mean a stock
option granted under Article III of this Plan. A Substituted Option granted
under this Plan shall be a Non-Qualified Stock Option since all Original
Options were Non-Qualified Stock Options.
1.18 Optionee. "Optionee" shall mean an Employee, consultant or
Independent Director granted an Option under this Plan.
1.19 Ordinance. "Ordinance" shall mean the Israeli Income Tax
Ordinance.
1.20 Original Option. "Original Option" shall mean an option for
Company Common Stock issued under the Biosense, Inc. 1996 Stock Option
Plan.
1.21 Plan. "Plan" shall mean The Johnson & Johnson/Biosense, Inc. 1996
Stock Option Plan.
1.22 QDRO. "QDRO" shall mean a qualified domestic relations order as
defined by the Code or Title I of the Employment Retirement Income Security
Act of 1974, as amended, or the rules thereunder.
1.23 Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3 under
the Exchange Act, as such Rule may be amended from time to time.
1.24 Subsidiary. "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then
owns stock possessing 50 percent or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
1.25 Termination of Consultancy. "Termination of Consultancy" shall
mean the time when the engagement of an Optionee as a consultant to the
Company or a Subsidiary is terminated for any reason, with or without
cause, including, but not by
<PAGE>
way of limitation, by resignation, discharge, death or retirement; but
excluding terminations where there is a simultaneous commencement of
employment with the Company or an Affiliate. The Committee, in its sole
discretion, shall determine the effect of all matters and questions
relating to Termination of Consultancy, including, but not by way of
limitation, the question of whether a Termination of Consultancy resulted
from a discharge for good cause, and all questions of whether a particular
leave of absence constitutes a Termination of Consultancy. Notwithstanding
any other provision of this Plan, the Company or any Subsidiary has an
absolute and unrestricted right to terminate a consultant's service at any
time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.
1.26 Termination of Directorship. "Termination of Directorship" shall
mean the time when an Optionee who is an Independent Director ceases to be
a Director for any reason, including, but not by way of limitation, a
termination by resignation, failure to be elected, death or retirement. The
Compensation Committee, in its sole discretion, shall determine the effect
of all matters and questions relating to Termination of Directorship with
respect to Independent Directors.
1.27 Termination of Employment. "Termination of Employment" shall mean
the time when the employee-employer relationship between an Optionee and
the Company or an Affiliate is terminated for any reason, with or without
cause, including, but not by way of limitation, a termination by
resignation, discharge, death, disability or retirement; but excluding (i)
terminations where there is a simultaneous reemployment or continuing
employment of an Optionee by the Company or an Affiliate, (ii) at the sole
discretion of the Committee, terminations which result in a temporary
severance of the employee-employer relationship, and (iii) at the sole
discretion of the Committee, terminations which are followed by the
simultaneous establishment of a consulting relationship by the Company or
an Affiliate with the former employee. The Committee, in its sole
discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of
limitation, the questions of whether a Termination of Employment resulted
from a discharge for good cause, and all questions of whether a particular
leave of absence constitutes a Termination of Employment; provided,
however, that, with respect to Incentive Stock Options, a leave of absence,
change in status from an employee to an independent contractor or other
change in the employee-employer relationship shall constitute a Termination
of Employment if, and to the extent that, such leave of absence, change in
status or other change interrupts employment for the purposes of Section
422(a)(2) of the Code and the then applicable regulations and revenue
rulings under said Section. Notwithstanding any other provision of this
Plan, the Company or any Subsidiary has an absolute and unrestricted right
to terminate an Employee's employment at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided
otherwise in writing.
<PAGE>
ARTICLE II
SHARES SUBJECT TO PLAN
2.1 Shares Subject to Plan. The shares of stock subject to Substituted
Options shall be J&J Common Stock. The aggregate number of such shares
which may be issued upon exercise of Substituted Options under the Plan
shall not exceed that number of shares of Company Common Stock subject to
Original Options multiplied by the Exchange Ratio. The shares of Common
Stock issuable upon exercise of Substituted Options may be either
previously authorized but unissued shares or treasury shares.
2.2 No Add-back of Options. If any Substituted Option under this Plan
expires or is canceled without having been fully exercised, or is exercised
in whole or in part for cash as permitted by this Plan, the number of
shares subject to such Substituted Option but as to which such option was
not exercised prior to its expiration, cancellation or exercise shall not
again be optioned hereunder. After the grant of Substituted Options shortly
after the Effective Time of the Merger to holders of Original Options, no
further Substituted Options shall be granted under this Plan.
ARTICLE III
GRANTING OF OPTIONS
3.1 Eligibility. Each holder of an Original Option shall be granted a
Substituted Option under the Plan upon surrender of his or her Original
Option.
3.2 Granting of Options.
(a) Promptly after the Effective Time, the Committee shall send a
written communication to each holder of an Original Option and shall grant
to each such holder of an Original Option upon surrender of such Original
Option a Substituted Option subject to the terms and conditions of this
Plan.
(b) The Committee shall set the terms and conditions of such
Substituted Option as close as reasonably possible to those of the Original
Option, taking into account the effect of the requirements of the Merger
Agreement, with the following exceptions:
(i) the number of shares of J&J Common Stock subject to such
Substituted Option shall be the largest whole number not
more than (A) the number of shares of Company Common
Stock subject to the Original Option multiplied by (B)
the Exchange Ratio; and
(ii) the exercise price per share of J&J Common Stock subject
to such Substituted Option shall be (A) the exercise
price per share of Company Common Stock divided by (B)
the Exchange Ratio.
<PAGE>
ARTICLE IV
TERMS OF OPTIONS
4.1 Option Agreement. Each Option shall be evidenced by a written
Option Agreement, which shall be executed by the Optionee and an authorized
officer of J&J and which shall contain such terms and conditions as the
Committee shall determine, consistent with this Plan. Option Agreements
evidencing Substituted Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall contain
such terms and conditions as may be necessary to meet the applicable
provisions of Section 162(m) of the Code.
4.2 Option Term. The term of each Substituted Option shall be set as
what would have been the then-remaining term of the corresponding Original
Option if the Merger had not occurred. The Committee may extend the term of
any outstanding Substituted Option in connection with any Termination of
Employment or Termination of Consultancy of the Optionee, or amend any
other term or condition of such Substituted Option relating to such a
termination.
4.3 Option Vesting. Each Substituted Option shall be fully-vested and
exercisable upon the date of grant thereof.
ARTICLE V
EXERCISE OF OPTIONS
5.1 Partial Exercise. A Substituted Option may be exercised in whole
or in part. However, a Substituted Option shall not be exercisable with
respect to fractional shares and the Committee may require that, by the
terms of the Substituted Option, a partial exercise be with respect to a
minimum number of shares.
5.2 Manner of Exercise. All or a portion of a Substituted Option shall
be deemed exercised upon delivery of all of the following to the Director,
Stock Option Administration, of J&J:
(a) A written notice complying with the applicable rules established
by the Committee stating that the Substituted Option, or a portion thereof,
is exercised. The notice shall be signed by the Optionee or other person
then entitled to exercise the Substituted Option or such portion;
(b) Such representations and documents as the Committee, in its sole
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any
other federal or state securities laws or regulations. The Committee may,
in its sole discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation,
placing legends on share certificates and issuing stop-transfer notices to
agents and registrars;
<PAGE>
(c) In the event that the Substituted Option shall be exercised
pursuant to Section 7.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Substituted Option; and
(d) Full payment to J&J for the shares with respect to which the
Substituted Option, or portion thereof, is exercised, which payment shall
be (i) in cash, by certified or bank cashier's check; (ii) through the
delivery of shares of Common Stock owned by the Optionee, duly endorsed for
transfer to J&J with a Fair Market Value on the date of delivery equal to
the aggregate exercise price of the Substituted Option or exercised portion
thereof; (iii) through the surrender of shares of Common Stock then
issuable upon exercise of the Substituted Option having a Fair Market Value
on the date of exercise of such Substituted Option equal to the aggregate
exercise price of the Substitute Option or exercised portion thereof; (iv)
through the delivery of a notice that the Optionee has placed a market sell
order with a broker with respect to shares of Common Stock then issuable
upon exercise of the Substituted Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the Substituted Option exercise price; or (v)
through any combination of the consideration provided in the foregoing
subparagraphs (i) through (iv). Notwithstanding the foregoing, the
Committee, in its sole discretion, in lieu of or in combination with
another method of payment, may allow (i) a delay in payment up to thirty
(30) days from the date the Substituted Option, or portion thereof, is
exercised; (ii) payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration;
(iii) payment, in whole or in part, through the delivery of a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code) and payable upon such
terms as may be prescribed by the Committee; or (iv) payment through any
combination of the consideration provided in the foregoing subparagraphs
(i), (ii) and (iii). In the case of a promissory note, the Committee may
also prescribe the form of such note and the security to be given for such
note. The Substituted Option may not be exercised, however, by delivery of
a promissory note or by a loan from J&J when or where such loan or other
extension of credit is prohibited by law.
5.3 Conditions to Issuance of Stock Certificates. J&J shall not be
required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of any Substituted Option or portion
thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed;
(b) The completion of any registration or other qualification of such
shares under any state or federal law, or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental
regulatory body which the Committee or Board shall, in its sole discretion,
deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its sole
discretion, determine to be necessary or advisable;
<PAGE>
(d) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may establish from time to time for reasons
of administrative convenience; and
(e) The receipt by the Company of full payment for such shares,
including without limitation payment of any applicable withholding tax.
5.4 Rights as Stockholders. The holders of Substituted Options shall
not be, nor shall they have, any of the rights or privileges of
stockholders of J&J in respect of any shares purchasable upon the exercise
of any part of a Substituted Option unless and until certificates
representing such shares have been issued by J&J to such holders.
5.5 Ownership and Transfer Restrictions. The Committee, in its sole
discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of a
Substituted Option as it deems appropriate. Any such restriction shall be
set forth in the respective Option Agreement and may be referred to on the
certificates evidencing such shares.
5.6 Limitations on Exercise of Options Granted to Independent
Directors. No Option granted to an Independent Director may be exercised to
any extent by anyone after the first to occur of the following events:
(a) The expiration of twelve (12) months from the date of the Optionee's
death;
(b) the expiration of twelve (12) months from the date of the
Optionee's Termination of Directorship by reason of his permanent and total
disability (within the meaning of Section 22(e)(3) of the Code);
(c) the expiration of three (3) months from the date of the Optionee's
Termination of Directorship for any reason other than such Optionee's death
or his permanent and total disability, unless the Optionee dies within said
three-month period; or
(d) the expiration of ten (10) years from the date of grant of the
Original Option to which such Substituted Option corresponds.
ARTICLE VI
ADMINISTRATION
6.1 Compensation Committee. The Committee shall be the regular
Compensation Committee of the board of directors of J&J or such other
committee or subcommittee as shall be designated from time to time by such
board of directors to administer this Plan.
6.2 Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of this Plan in
accordance with its provisions. The Committee shall have the power to
interpret this Plan and the agreements
<PAGE>
pursuant to which Substituted Options are granted, and to adopt such rules
for the administration, interpretation, and application of this Plan as are
consistent therewith and to interpret, amend or revoke any such rules. Any
such grant under this Plan need not be the same with respect to each
Optionee. In its sole discretion, the board of directors of J&J may at any
time and from time to time exercise any and all rights and duties of the
Committee under this Plan except with respect to matters under which Rule
16b-3 or Section 162(m) of the Code, or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the
Committee.
6.3 Majority Rule; Unanimous Written Consent. The Committee shall act
by a majority of its members in attendance at a meeting at which a quorum
is present or by a memorandum or other written instrument signed by all
members of this Committee.
6.4 Compensation; Professional Assistance; Good Faith Actions. Members
of the Committee shall receive such compensation for their services as
members as may be determined by the board of directors of J&J. All expenses
and liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by J&J. The Committee may, with
the approval of the board of directors of J&J, employ attorneys,
consultants, accountants, appraisers, brokers, or other persons. The
Committee, J&J and J&J's officers and directors shall be entitled to rely
upon the advice, opinions or valuations of any such persons. All actions
take and all interpretations and determinations made by the Committee or
the board of directors of J&J in good faith shall be final and binding upon
all Optionees, J&J and all other interested persons. No members of the
Committee or board of directors of J&J shall be personally liable for any
action, determination or interpretation made in good faith with respect to
this Plan or Substituted Options, and all members of the Committee and the
board of directors of J&J shall be fully protected by J&J in respect of any
such action, determination or interpretation.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 Not Transferable.
(a) Substituted Options under this plan may not be sold, pledged,
assigned, or transferred in any manner other than by will or the laws of
descent and distribution or pursuant to a QDRO, unless and until the shares
underlying such Substituted Options have been issued, and all restrictions
applicable to such shares have lapsed. No Substituted Option or interest or
right therein shall be liable for the debts, contracts or engagements of
the Optionee or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition is permitted by the
preceding sentence.
(b) During the lifetime of the Optionee, only he or she may exercise a
Substituted Option (or any portion thereof) granted to him or her under the
Plan, unless it has been disposed of pursuant to a QDRO. After the death of
the Optionee,
<PAGE>
any exercisable portion of a Substitute Option may, prior to the time when
such portion becomes unexercisable under the Plan or the applicable Option
Agreement, be exercised by his personal representative or by any person
empowered to do so under the deceased Optionee's will or under the then
applicable laws of descent and distribution.
7.2 Amendment, Suspension or Termination of this Plan. Except as
otherwise provided in Section 7.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from
time to time by the board of directors of J&J or the Committee. However,
without approval of J&J's stockholders given within twelve months before or
after the action by the board of directors of J&J or Committee, no action
of the board of directors of J&J or the Committee may, except as provided
in Section 7.3, increase the limits imposed in Section 2.1 on the maximum
number of shares which may be issued under this Plan, and no action of the
Committee may be taken that would otherwise require stockholder approval as
a matter of applicable law, regulation or rule.
No amendment, suspension or termination of this Plan shall, without
the consent of the holder of a Substituted Option, alter or impair any
rights or obligations under any such Substituted Option theretofore
granted, unless the Substituted Option itself otherwise expressly so
provides. No Substituted Option may be granted during any period of
suspension or after termination of this Plan.
7.3 Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.
(a) Subject to Section 7.3(d), in the event that the Committee
determines that any dividend or other distribution (whether in the form of
cash, J&J Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up-, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of J&J (including,
but not limited to, a Corporate Transaction), or exchange of J&J Common
Stock or other securities of the J&J, issuance of warrants or other rights
to purchase J&J Common Stock or other securities of J&J, or other similar
corporate transaction or event, in the Committee's sole discretion, affects
the J&J Common Stock such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan
or with respect to a Substituted Option, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of J&J Common Stock (or other
securities or property) with respect to which Substituted Options may be
granted under the Plan (including, but not limited to, adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares which
may be issued,
(ii) the number and kind of shares of J&J Common Stock (or other
securities or property) subject to outstanding Substituted Options, and
(iii) the grant or exercise price with respect to any Substituted
Option.
<PAGE>
(b) Subject to Section 7.3(d), in the event of any Corporate
Transaction or other transaction or event described in Section 7.3(a) or
any unusual or nonrecurring transactions or events affecting J&J, any
Affiliate or the financial statements of J&J or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, the
Committee in its sole discretion is hereby authorized to take any one or
more of the following actions whenever the Committee determines that such
action is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan
or with respect to any Substituted Option under this Plan, to facilitate
such transactions or events or to give effect to such changes in laws,
regulations or principles;
(i) In its sole discretion, and on such terms and conditions as
it deems appropriate, the Committee may provide, either by the terms of the
Option Agreement or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Optionee's
request, for either the purchase of any such Substituted Option for an
amount of cash equal to the amount that could have been attained upon the
exercise of such Substituted Option or the replacement of such Substituted
Option with other rights or property selected by the Committee in its sole
discretion;
(ii) In its sole discretion, the Committee may provide, either by
the terms of such Substituted Option or by action taken prior to the
occurrence of such transaction or event, that it cannot be exercised after
such event;
(iii) In its sole discretion, and on such terms and conditions as
it deems appropriate, the Committee may provide, either by the terms of
such Substituted Option or by action taken prior to the occurrence of such
transaction or event, that for a specified period of time prior to such
transaction or event, such Substituted Option shall be exercisable as to
all shares covered thereby, notwithstanding anything to the contrary in the
provisions of such Substituted Option;
(iv) In its discretion, and on such terms and conditions as it
deems appropriate, the Committee may provide, either by the terms of such
Substituted Option or by action taken prior to the occurrence of such
transaction or event, that upon such event, such Substituted Option be
assumed by the successor or surviving corporation, or a parent or
subsidiary thereof, or shall be substituted for by similar options, rights
or awards covering the stock of the successor or survivor corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices;
(v) In its sole discretion, and on such terms and conditions as
it deems appropriate, the Committee may make adjustments in the number and
type of shares of J&J Common Stock (or other securities or property)
subject to outstanding substituted Options and/or in the terms and
conditions of (including the grant or exercise price), and the criteria
included in, outstanding Substituted Options.
(c) Subject to Section 7.8, the Committee may, in its sole discretion,
include such further provisions and limitations in any Substituted Options
or Option
<PAGE>
Agreement or certificate, as it may deem equitable and in the best
interests of J&J.
7.4 Approval of Plan by Stockholders. This Plan shall not be submitted
for the approval of the stockholders of J&J.
7.5 Tax Withholding. J&J and its Affiliates shall be entitled to
require payment in cash or deduction from other compensation payable to
each Optionee of any sums required by federal, state or local tax law to be
withheld with respect to the issuance, vesting or exercise of any
Substituted Option. The Committee may in its sole discretion and in
satisfaction of the foregoing requirement allow such Optionee to elect to
have J&J withhold shares of J&J Common Stock otherwise issuable under such
Substituted Option (or allow the return of shares of J&J Common Stock)
having a Fair Market Value equal to the sums required to be withheld.
7.6 Loans. The Committee may, in its sole discretion, extend one more
loans to key Employees in connection with the exercise or receipt of a
Substituted Option granted under this Plan. The terms and conditions of any
such loan shall be set by the Committee.
7.7 Forfeiture Provisions Pursuant to it general authority to
determine the terms and conditions applicable to Substituted Options under
the Plan, the Committee shall have the right (to the extent consistent with
the applicable exemptive conditions of Rule 16b-3) to provide, in the terms
of Substituted Options made under the Plan, or to require the recipient to
agree to separate written instrument, that (i) any proceeds, gains or other
economic benefit actually or constructively received by the recipient upon
any receipt or exercise of the Substituted Option, or upon the receipt or
resale of J&J Common Stock underlying such Substituted Option, must be paid
to J&J, and (ii) the Substituted Option shall terminate and any unexercised
portion of such Substituted Option (whether or not vested) shall be
forfeited, if (a) a Termination of Employment, Termination of Consultancy
or Termination of Directorship occurs prior to a specified date or within a
specified time period following receipt or exercise of the Substituted
Option, or (b) the recipient at any time, during a specified time period,
engages in any activity in competition with the Company, or which is
inimical, contrary or harmful to the interests of J&J or the Company, as
further defined by the Committee.
7.8 Effect of Plan Upon Options and Compensation Plans. The adoption
of this Plan shall not affect any other compensation or incentive plans in
effect for the Company or any Subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company (i) to establish any other
forms of incentives or compensation for Employee, Directors or Consultants
of the Company or any Subsidiary or (ii) to grant or assume options or
other rights otherwise than under this Plan in connection with any proper
corporate purpose including but not by way of limitation, the grant or
assumption of options in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of the business, stock or assets
of any corporation, partnership, firm or association.
7.9 Compliance with Laws. This Plan, the granting and vesting of
Substituted Options under this Plan and the issuance and delivery of shares
of J&J Common Stock and the payment of money under this Plan or under
Substituted
<PAGE>
Options granted hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to
state and federal securities law and federal margin requirements) and to
such approvals by any listing, regulatory or governmental authority as may,
in the opinion of counsel for J&J, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall be subject to
such restrictions, and the persons acquiring such securities shall, if
requested by J&J, provide such assurances and representations to J&J as J&J
may deem necessary or desirable to assure compliance with all applicable
legal requirements. To the extent permitted by applicable law, the Plan and
Substituted Options granted hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.
7.11 Titles. Titles are provided herein for convenience only and are
not serve as a basis for interpretation or construction of this Plan.
7.12 Governing Law. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State
of Delaware without regard to conflicts of law thereof.
***
EXHIBIT 5.1
[Letterhead of]
JOHNSON & JOHNSON
October 15, 1997
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933
Re: Registration Statement on Form S-8
Johnson & Johnson/Biosense, Inc. 1996 Stock Option Plan
Johnson & Johnson/Biosense (Israel) Ltd. 1995 Stock Option Plan
Ladies and Gentlemen:
I am Assistant General Counsel and Assistant Secretary
of Johnson & Johnson, a New Jersey corporation (the
"Company"), and I have acted as counsel for the Company
in connection with the registration statement under the
Securities Act of 1933, as amended, of shares of Common
Stock (the "Common Stock"), par value $1.00 per share,
of the Company to be issued pursuant to the Johnson &
Johnson/Biosense Inc. 1996 Stock Option Plan or the
Johnson & Johnson/Biosense (Israel) Ltd. 1995 Stock
Option Plan (collectively, the "Plans").
I have received the Company's Restated Certificate of
Incorporation, and By-Laws and such other corporate
records of the Company and documents and certificates
of public officials and others as I have deemed
necessary as a basis for the opinion hereinafter
expressed.
Based on the foregoing and having regard for such legal
considerations as I deem relevant, I am of the opinion
that the shares of Common Stock, when issued and
delivered in accordance with the terms of the options
issued under the Plans, will be duly authorized,
validly issued, fully paid and nonassessable.
<PAGE>
I hereby consent to the filing of this opinion as an
Exhibit to such Registration Statement.
Very truly yours,
By: /s/ Philip P. Crowley
----------------------
Philip P. Crowley
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement on Form S-8, relating to the Johnson & Johnson/Biosense (Israel)
Ltd. 1995 Stock Option Plan and the Johnson & Johnson/Biosense, Inc. 1996
Stock Option Plan, of our reports dated January 20, 1997 on our audits of
the consolidated financial statements and financial statement schedule of
Johnson & Johnson and subsidiaries as of December 29, 1996 and December 31,
1995, and for each of the three fiscal years in the period ended December
29, 1996, which reports are incorporated by reference in the Annual Report
on Form 10-K.
New York, New York
October 16, 1997
