<PAGE> 1
The Registrant requests that the Registration Statement become effective
immediately upon filing pursuant to Securities Act Rule 462.
As filed with the Securities and Exchange Commission on August 25, 1999.
================================================================================
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ADAC LABORATORIES
----------------------------------------------------
(Exact name of registrant as specified in its charter)
California
--------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
94-1725806
-----------------------------------
(I.R.S. Employer Identification No.)
540 Alder Drive
Milpitas, California 95035
(408) 321-9100
--------------------------------------------------
(Address, including zip code, of Registrant's
principal executive offices)
EMPLOYEE STOCK PURCHASE PLAN (1994)
1999 LONG-TERM INCENTIVE PLAN
1999 SUPPLEMENTAL INCENTIVE PLAN
--------------------------------------------------
(Full Titles of the Plans)
JUDY J. ROWE, VICE PRESIDENT OF HUMAN RESOURCES
AND ADMINISTRATION AND ASSISTANT CORPORATE SECRETARY
ADAC LABORATORIES
540 ALDER DRIVE
MILPITAS, CALIFORNIA 95035
(408) 321-9100
---------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO: PAGE MAILLIARD, ESQ.
WILSON, SONSINI, GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
================================================================================
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Proposed Proposed Amount of
Class of Maximum Maximum Registration
Securities to Amount to be Offering Price Aggregate Fee (2)
be Registered Registered(1)Per Share (2) Offering Price (2)
- -------------- ------------ ---------------- ----------------- ----------
<S> <C> <C> <C> <C>
Common Stock, 1,520,000 $6.16 $9,357,880.00 $2,601.49
no par value
</TABLE>
1) Includes 100,000 shares to be registered under the Amendment No. 3 to
ADAC Laboratories Employee Stock Purchase Plan (1994) (the "Plan"),
920,000 shares to be registered under the 1999 Long-Term Incentive Plan
(the "Long-Term Plan") and 500,000 shares to be registered under the
1999 Supplemental Incentive Plan (the "Supplemental Incentive Plan").
2) The Proposed Maximum Offering Price Per Share was estimated in part
pursuant to Rule 457(h) under the Securities Act. With respect to 100,000
shares of Common Stock available for future grant under the Plan,
920,000 shares of Common Stock available for future grant under the
Long-Term Plan and 500,000 shares of Common Stock available for future
grant under the Supplemental Incentive Plan, the estimated Proposed
Maximum Offering Price Per Share was estimated pursuant to Rule 457(c)
whereby the per share price was determined by reference to the average
between the high and low price reported in the NASDAQ National Market
on August 19, 1999, which average was $6.1565. The number referenced
referenced above in the table entitled "Proposed Maximum Offering
Price Per Share" represents a weighted average of the foregoing
estimates calculated in accordance with Rules 457(h) and 457(c).
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Registrant with the Securities and
Exchange Commission (the "SEC") are incorporated by reference in the
Registration Statement:
(a) The Registrant's latest annual report on Form 10-K for the fiscal
year ended September 27, 1998 and filed with the SEC on March 1,
1999;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended January 3, 1999 and filed with the SEC on March 1,
1999;
(c) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended April 4, 1999 and filed with the SEC on July 1, 1999;
(d) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 4, 1999 and filed with the SEC on August 18, 1999;
(e) The Registrant's Proxy Statement in Schedule 14A for the 1999
Annual Meeting of Shareholders and filed with the SEC on April 15, 1999.
In addition, all documents subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, 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 in this registration statement and to be part hereof from the
date of filing such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The By-Laws of the Company provide for the indemnification of directors
and officers to the fullest extent permitted by the General Corporation
Law of the State of California.
Section 317 of the General Corporation Law of the State of California
authorizes indemnification when a person is made a party to any
proceeding by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or was so serving at the
request of the corporation in such capacity for another corporation, and
if such person acted in good faith and in a manner reasonably believed
to be in, or not opposed to, the best interest of the corporation. With
respect to any criminal proceeding, such person must have had no
reasonable cause to believe the conduct was unlawful. If it is
determined that the conduct of such person meets these standards, such
person may be indemnified for expenses incurred and amounts paid in such
proceedings if actually and reasonably incurred in connection therewith.
If such a proceeding is brought by or on behalf of the corporation
(i.e., a derivative suit), such person may be indemnified against
expenses actually and reasonably believed to be in, or not opposed to,
the best interests of the corporation. There can be no indemnification
with respect to any matter as to which such person is adjudged to be
liable to the corporation for negligence or misconduct in the
performance of his or her duty; however, a court may, even in such case,
allow indemnification of such expenses as the court deems proper. Where
such person is successful in any such proceeding, he or she is entitled
to be indemnified against expenses actually and reasonably incurred by
him or her. In all other cases, indemnification is made by the
corporation upon determination by it that indemnification of such person
is proper because such person has met the applicable standard of
conduct.
The Company has also entered into indemnification agreements with its
directors and certain officers which contractually obligate the Company
to indemnify such persons to the fullest extent permitted under
California law.
The California General Corporation Law permits a California corporation
to include in its Articles of Incorporation a provision eliminating or
limiting the liability of directors for monetary damages arising from
breaches of their fiduciary duty. The only limitations imposed under
the statute are that the provisions may not eliminate or limit a
director's liability (i) for acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, (ii) for acts or
omissions that a director believes to be contrary to the best interests
of the corporation or its shareholders or that involve the absence of
good faith on the part of the director, (iii) for any transaction from
which a director derived an improper personal benefit, (iv) for acts or
omissions that show a reckless disregard for the director's duty to the
corporation or its shareholders in circumstances in which the director
was aware, or should have been aware, in the ordinary course of
performing a director's duties, of a risk of serious injury to the
corporation or its shareholders, (v) for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the corporation or its
shareholders, or (vi) for the payment of unlawful dividends, stock
purchases or redemptions. The Company's Articles of Incorporation
contain a provision eliminating the liability of the Company's directors
for breaches of their fiduciary duty, subject to the limitations imposed
by statute as described above. The provisions do not limit or otherwise
affect the personal liability of a director for violation of Federal
Securities Law.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number
4.1* ADAC Laboratories Amended and Restated Employee
Stock Purchase Plan (1994).
4.2* Amendment No. 1 to ADAC Laboratories Employee
Stock Purchase Plan.
4.3** Amendment No. 2 to ADAC Laboratories Employee
Stock Purchase Plan.
4.4 Amendment No. 3 to ADAC Laboratories Employee
Stock Purchase Plan.
4.5 ADAC Laboratories 1999 Long-Term Incentive Plan.
4.6 ADAC Laboratories 1999 Supplemental Incentive Plan
5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, P.C.
23.1 Consent of Independent Accountants
23.2 Consent of Wilson Sonsini Goodrich & Rosati
(contained in Exhibit 5.1.).
* Incorporated by reference to the exhibit filed with the
Registrant's registration statement on Form S-8 (File No. 333-34619)
filed with the Securities and Exchange Commission on August 29, 1997.
** Incorporated by reference to the exhibit filed with the
Registrant's registration statement on Form S-8 (File No. 333-53849)
filed with the Securities and Exchange Commission on May 28, 1998.
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 this 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 this Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in
this 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 by Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this 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.
(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, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(c) (1) The undersigned Registrant hereby undertakes to
deliver or cause to be delivered with the Prospectus to each person to
whom the Prospectus is sent or given a copy of Registrant's annual
report to shareholders for its last fiscal year, unless such employee
otherwise has received a copy of such report, in which case Registrant
shall state in the Prospectus that it will promptly furnish, without
charge, a copy of such report on written request of the employee. If
the last fiscal year of Registrant has ended within 120 days prior to
the use of the Prospectus, the annual report of Registrant for the
preceding fiscal year may be so delivered, but within such 120-day
period the annual report for the last fiscal year will be furnished to
each such employee.
(2) The undersigned Registrant hereby undertakes to
transmit or cause to be transmitted to all employees participating in
the Plan who do not otherwise receive such material as shareholders of
registrant, at the time and in the manner such material is sent to its
shareholders, copies of all reports, proxy statements and other
communications distributed to its shareholders generally.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of Registrant pursuant to the foregoing provisions,
or otherwise, 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 Registrant of expenses incurred or paid by a
director, officer or controlling person of 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, 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
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 Milpitas,
California on the date set forth below.
Date: August 25, 1999 ADAC LABORATORIES
(Registrant)
BY:/s/ R. Andrew Eckert
R. Andrew Eckert,
Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints R. Andrew Eckert and
Bruce M. Blanco, and each of them, acting individually, as such person's
true and lawful attorneys-in-fact and agents, each with full power of
substitution, each with power to act alone, to sign and execute on
behalf of the undersigned any amendment or amendments (including post-
effective amendments) to this Registration Statement on Form S-8, and to
file same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents
and purposes as such person might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents,
or any of them, or their substitutes, may do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacities Date
- -------------------------- ------------------------------- -----------------
<S> <C> <C>
/s/ R. Andrew Eckert Chairman of the Board August 25, 1999
- ------------------------- of Directors, Chief Executive
R. Andrew Eckert Officer and Director (Principal
Executive Officer
/s/ Robert P. Bunje Vice President, Chief August 25, 1999
- ------------------------- Financial Officer
Robert P. Bunje (Principal Financial Officer)
/s/ Bruce M. Blanco Vice President and Corporate August 25, 1999
- ------------------------- Controller (Principal
Bruce M. Blanco Accounting Officer)
/s/ Stanley D. Czerwinski Director August 25, 1999
- -------------------------
Stanley D. Czerwinski
/s/ Dennis R. Raney Director August 25, 1999
- -------------------------
Dennis R. Raney
/s/ F. David Rollo Director August 25, 1999
- -------------------------
F. David Rollo
/s/ Edmund H. Shea, Jr. Director August 25, 1999
- -------------------------
Edmund H. Shea, Jr.
</TABLE>
ADAC LABORATORIES
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
Exhibit
Number Description
4.1* ADAC Laboratories Amended and Restated
Employee Stock Purchase Plan (1994)
4.2* Amendment No. 1 to ADAC Laboratories
Employee Stock Purchase Plan
4.3** Amendment No. 2 to ADAC Laboratories
Employee Stock Purchase Plan
4.4 Amendment No. 3 to ADAC Laboratories
Employee Stock Purchase Plan
4.5 ADAC Laboratories 1999 Long-Term Incentive Plan
4.6 ADAC Laboratories 1999 Supplemental Incentive Plan
5.1 Opinion of Wilson, Sonsini, Goodrich &
Rosati, P.C.
23.1 Consent of Independent Accountants
23.2 Consent of Wilson Sonsini Goodrich &
Rosati (contained in Exhibit 5.1).
* Incorporated by reference to the exhibit filed with the
Registrant's registration statement on Form S-8 (File No. 333-34619)
filed with the Securities and Exchange Commission on August 29, 1997.
** Incorporated by reference to the exhibit filed with the
Registrant's registration statement on Form S-8 (File No. 333-53849)
filed with the Securities and Exchange Commission on May 28, 1998.
AMENDMENT NO. 3
TO
ADAC LABORATORIES
EMPLOYEE STOCK PURCHASE PLAN (1994)
The Employee Stock Purchase Plan (1994) (the "Plan") of ADAC
Laboratories, a California corporation (the "Company"), is hereby
amended in the following respects:
1. Number of Shares to be Offered. The first sentence of
Section 4, entitled "Number of Shares to be Offered," is deleted in
its entirety and the following sentence is substituted in its place:
The maximum aggregate number of shares which shall be
offered under the Plan shall be 470,000 shares of
Stock, subject to adjustment as provided in Section 8
hereof.
This amendment reflects an increase in the number of shares authorized
for issuance under the Plan by 100,000 shares.
2. Effective Date. Except as amended above, in all other
respects the Plan is hereby ratified and confirmed. The amendment of
the Plan, as set forth above, was approved by the Board of Directors on
February 3, 1999 and by the shareholders on May 6, 1999.
By Order of the Board of Directors:
By:/s/ Karen L. Masterson
Karen L. Masterson
Secretary
ADAC LABORATORIES
1999 LONG-TERM INCENTIVE PLAN
1. Purposes of the Plan. The purpose of the ADAC Laboratories
1999 Long-Term Incentive Plan is to enable ADAC Laboratories to provide
an incentive to eligible Service Providers whose present and potential
contributions are important to the continued success of the Company, to
afford these individuals the opportunity to acquire a proprietary
interest in the Company, and to enable the Company to enlist and retain
in its service the best available talent for the successful conduct of
its business and align the interests of such persons with the interests
of the Company's shareholders. It is intended that these purposes will
be effected through the granting of (a) Options, (b) Stock Purchase
Rights, (c) SARs, and (d) Long-Term Performance Awards.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or such of its Committees as
shall be administering the Plan, in accordance with Section 5 of the Plan.
(b) "Applicable Laws" means the requirements relating to
the administration of stock option plans under U. S. state corporate
laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any foreign country or jurisdiction
where Options or Stock Purchase Rights are granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 5 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means ADAC Laboratories, a California corporation.
(h) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company.
A Service Provider shall not cease to be an Employee in the case of
of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent,
any Subsidiary, or any successor. For purposes of Incentive Stock Options,
no such leave may exceed ninety days, unless reemployment upon expiration
of such leave is guaranteed by statute or contract. If reemployment upon
expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock
Option. Neither service as a Director nor payment of a director's fee
by the Company shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation
the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system for the last market trading day prior to the
time of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the
Fair Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the last
market trading day prior to the day of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems
reliable; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by
the Administrator.
(n) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.
(o) "Inside Director" means a Director who is an Employee.
(p) "Long-Term Performance Award" means an award under Section 10
below. A Long-Term Performance Award shall permit the recipient to
receive a cash or stock bonus (as determined by the Administrator) upon
satisfaction of such performance factors as determined by the
Administrator and as are set out in the recipient's individual grant.
(q) "Long-Term Performance Award Agreement" means a written agreement
between the Company and an Optionee evidencing the terms and conditions
of an individual Long-Term Performance Award. The Long-Term Performance
Award Agreement is subject to the terms and conditions of the Plan.
(r) "Nonstatutory Stock Option" means any Option that is not an
Incentive Stock Option.
(s) "Notice of Grant" means a written notice evidencing certain terms
and conditions of an individual Option, Stock Purchase Right, SAR or
Long-Term Performance Award. The Notice of Grant is part of the Option
Agreement, the SAR Agreement or the Long-Term Performance Award Agreement.
(t) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(u) "Option" means a stock option granted pursuant to the Plan.
(v) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option.
The Option Agreement is subject to the terms and conditions of the Plan.
(w) "Optioned Stock" means the Common Stock subject to an Option or Right.
(x) "Optionee" means the holder of an outstanding Option or Right.
(y) "Outside Director" means a Director who is not an Employee.
(z) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(aa) "Plan" means this 1999 Long-Term Incentive Plan.
(bb) "Restricted Stock" means shares of Common Stock subject to a
Restricted Stock Purchase Agreement acquired pursuant to a Stock Purchase
Right under Section 9 below.
(cc) "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted
Stock Purchase Agreement is subject to the terms and conditions of the Plan
and the Notice of Grant.
(dd) "Right" means and includes SARs, Long-Term Performance Awards
and Stock Purchase Rights granted pursuant to the Plan.
(ee) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor rule thereto, as in effect when discretion is being exercised
with respect to the Plan.
(ff) "SAR" means a stock appreciation right granted pursuant to
Section 7 of the Plan.
(gg) "SAR Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual SAR.
The SAR Agreement is subject to the terms and conditions of the Plan.
(hh) "Service Provider" means an Employee, Director or Consultant.
(ii) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(jj) "Stock Purchase Right" means a right to purchase Common Stock
pursuant to Section 8 of the Plan.
(kk) "Subsidiary" means a "subsidiary corporation," whether now,
or hereafter existing, as defined in Section 424(f) of the Code.
3. Eligibility. Nonstatutory Stock Options and Rights may be granted to
Service Providers. Incentive Stock Options may be granted only to
Employees. If otherwise eligible, a Service Provider who has been
granted an Option or Right may be granted additional Options or Rights.
4. Stock Subject to the Plan. Subject to the provisions of
Section 11, the maximum aggregate number of Shares which may be issued
under the Plan is 920,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock. If an Option or Right expires
or becomes unexercisable without having been exercised in full, the
unpurchased Shares which were subject thereto shall become available
for future grant or sale under the Plan (unless the Plan has terminated);
provided, however, that Shares that have actually been issued under the
Plan, whether upon exercise of an Option or Right, shall not be returned
to the Plan and shall not become available for future distribution under
the Plan, except that if Shares of Restricted Stock are repurchased by
by the Company at their original purchase price, such Shares shall become
available for future grant under the Plan.
5. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of
Service Providers.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options of SARs granted hereunder
as "performance-based compensation" within the meaning of Section 162(m)
of the Code, the Plan shall be administered by a Committee of two or more
"outside directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements
for exemption under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the
Plan shall be administered by (A) the Board or (B) a Committee, which
Committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have
the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and Rights
may be granted hereunder;
(iii) to determine the number of shares of Common Stock to be
covered by each Option or Right;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of Options and Rights. Such terms and conditions
include, but are not limited to, the exercise price, the time or times
when Options or Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions,
and any restriction or limitation regarding any Option or Right or the
shares of Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;
(vi) to construe and interpret the terms of the Plan;
(vii) to prescribe, amend and rescind rules and regulations
relating to the Plan;
(viii) to modify or amend each Option or Right (subject to Section
13 of the Plan);
(ix) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option or Right
previously granted by the Administrator;
(x) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Right that number of Shares having a Fair
Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined. All elections
by an Optionee to have Shares withheld for this purpose shall be made in
such form and under such conditions as the Administrator may deem
necessary or advisable;
(xi) to determine the terms and restrictions applicable to Options
and Rights and any Restricted Stock; and
(xii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options or Rights.
6. Duration of the Plan. The Plan shall remain in effect until
terminated by the Board under the terms of the Plan; provided that in no
event shall the Plan terminate later than the date five (5) years from
the date the Plan was adopted by the Board.
7. Options and SARs.
(a) Options. The Administrator, in its discretion, may grant Options
to eligible participants and shall determine whether such Options shall be
Incentive Stock Options or Nonstatutory Stock Options. Each Option shall
be evidenced by a Notice of Grant which shall expressly identify the
Option as Incentive Stock Option or as Nonstatutory Stock Option, and
shall be in such form and contain such provisions as the Administrator
shall from time to time deem appropriate. Option agreements shall
contain the following terms and conditions:
(i) Option Exercise Price. The per Share exercise price for
the Shares to be issued pursuant to the exercise of an Option shall be
determined by the Administrator; provided, however, that in no event shall
it be less than 100% of the Fair Market Value per Share on the date of
grant, although it may be in excess of such amount.
(ii) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option
may be exercised, and shall determine any conditions that must be
satisfied before the Option may be exercised.
(iii) Form of Payment. The consideration to be paid for the Shares
to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive
Stock Option, shall be determined at the time of grant) and may consist
entirely of:
(A) cash;
(B) check;
(C) promissory note;
(D) other Shares which (1) in the case of Shares acquired from
the Company, have been owned by the Optionee for more than six months on
the date of surrender, and (2) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised;
(E) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(F) a reduction in the amount of any Company liability to the
Optionee;
(G) any combination of the foregoing methods of payment; or
(H) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
(iv) Special Incentive Stock Option Provisions. In addition to the
foregoing, Incentive Stock Options shall be subject to the following terms
and conditions:
(A) Dollar Limitation. To the extent that the
aggregate Fair Market Value of (a) the Shares with respect to Options
designated as Incentive Stock Options, plus (b) the shares of stock of
the Company, Parent and any Subsidiary with respect to which other
incentive stock options are exercisable for the first time by an
Optionee during any calendar year (under all plans of the Company and
any Parent and Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options. For purposes of the preceding
sentence, (a) Options shall be taken into account in the order in which
they were granted, and (b) the Fair Market Value of the Shares shall be
determined as of the time the Option or other incentive stock option is
granted.
(B) Exercise Price. In the case of any Optionee who is, on the
date of grant, the owner of Common Stock (as determined under Section 424(d)
of the Code) possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary of the
Company (a "10% Owner"), then the per Share exercise price of an Incentive
Stock Option shall be not less than 110% of the Fair Market Value on the
date of grant. In the case of any other Optionee, the per Share exercise
price shall be no less than 100% of Fair Market Value on the date of grant.
(C) Term of Option. The term of each Option shall be stated in
the Option Agreement. In the case of an Incentive Stock Option, the term
shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Option Agreement; provided, however, that in the case of
an Incentive Stock Option granted to an Optionee who is a 10% Owner, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.
(v) Other Provisions. Each Option granted under the Plan may contain
such other terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the Administrator.
(vi) Buyout Provisions. The Administrator may at any time offer to
buyout for a payment in cash, promissory notes or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time that such offer is made.
(b) Procedure for Grants to Outside Directors. Outside Directors
shall be granted Options in accordance with the following provisions:
(i) Each Outside Director shall be automatically granted an Option to
purchase 20,000 Option Shares (the "First Option") on the date on which such
person first becomes an Outside Director, whether through election by the
shareholders of the Company or appointment by the Board to fill a
vacancy; provided, however, that an Inside Director who ceases to be an
Inside Director but who remains a Director shall not receive a First Option.
(ii) Each Outside Director shall be automatically granted a subsequent
Option (a "Subsequent Option") to purchase 3,333 Shares on March 15th of
each year after such person first becomes an Outside Director (or the next
business day if March 15 is on a weekend or holiday); provided he or she is
then an Outside Director, and if as of such date, he or she shall have served
on the Board for at least the preceding six (6) months; provided, further,
that on March 15 following the fourth anniversary of the date on which such
person first becomes an Outside Director, he or she shall receive a
Subsequent Option of 20,000 shares (in lieu of the 3,333 share Subsequent
Option) (a "Fourth Year Subsequent Option").
(iii) The terms of all Outside Director Options granted hereunder
shall be as follows:
(A) the term of the each Option shall be five (5) years.
(B) each Option shall be exercisable only while the Outside Director
remains a Service Provider, and may be exercised only in installment as
follows:
(1) First Options. Each First Option shall vest and become
exercisable as to 25% of the Shares subject thereto on the first
anniversary of the date of grant, and as to an additional 25% of the shares
subject thereto on each of the next three (3) anniversaries of its date of
grant, provided the Outside Director remains a Director on such dates.
(2) Subsequent Options. Each Subsequent Option shall vest and
become fully exercisable upon the first anniversary of the date of grant
provided the Outside Director remains a Director on such date and provided
further, however, that each Fourth Year Subsequent Option shall vest and
become exercisable pursuant to Section 7(b)(iii)(B)(1) as if it were a
First Option.
(3) the exercise price per Share shall be 100% of the Fair Market
Value per Share on the date of grant.
(C) Except as otherwise set forth in this Section 7(b), Options
granted pursuant to this Section 7(b) shall be governed by the terms of the
Plan applicable to Options generally.
(c) SARs. At the sole discretion of the Administrator, SARS may be
granted either alone, in addition to or in tandem with other Options and
Rights. The following provisions apply to SARs:
(i) The SAR shall entitle the Optionee, by exercising the SAR, to
receive from the Company an amount equal to the excess of (1) the Fair
Market Value of the exercised portion of the SAR, as of the date of such
exercise, over (2) the Fair Market Value of the exercised portion of the SAR,
as of the date on which the SAR was granted; provided, however, that the
Administrator may place limits on the aggregate amount that may be paid
upon exercise of an SAR.
(ii) SARs shall be exercisable, in whole or in part, at such times
as the Administrator shall specify in the Optionee's SAR agreement.
(iii) The Company's obligation arising upon the exercise of an SAR
may be paid in Shares or cash, or in any combination of Shares and cash, as
the Administrator, in its sole discretion, may determine. Shares issued upon
the exercise of an SAR shall be valued at their Fair Market Value as of the
date of exercise.
(d) Limitations.
(i) Neither the Plan nor any Option or Right shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship
as a Service Provider with the Company, nor shall they interfere in any
way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(ii) The following limitations shall apply to grants of Options
and SARs:
(A) No Service Provider shall be granted, in any fiscal year of the
Company, Options or SARs to purchase more than 300,000 Shares.
(B) In connection with his or her initial service, a Service
Provider may be granted Options or SARs to purchase up to an additional
300,000 Shares that shall not count against the limit set forth in
subsection (i) above.
(C) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described
in Section 11.
(D) If an Option or SAR is canceled in the same fiscal year of
the Company in which it was granted (other than in connection with a
transaction described in Section 11), the canceled Option or SAR will be
counted against the limits set forth in subsections (1) and (2) above.
For this purpose, if the exercise price of an Option or SAR is reduced, the
transaction will be treated as a cancellation of the Option and the grant
of a new Option or SAR.
(e) Method of Exercise.
(i) Procedure for Exercise; Rights as a Shareholder. An Option or
SAR granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator and as shall be permissible
under the terms of the Plan. An Option or SAR may not be exercisable for a
fraction of a Share. An Option or SAR shall be deemed to be exercised when
written notice of such exercise has been given to the Company in
accordance with the terms of the Option or SAR by the person entitled to
exercise the Option or SAR and (in the case of an Option) full payment
for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the
Administrator (and, in the case of an Incentive Stock Option, determined
at the time of grant) and permitted by the Option Agreement consist of
any consideration and method of payment allowable under Section 7(a)(iii).
Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the
stock certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to
the Optioned Stock, notwithstanding the exercise of the Option or SAR. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as
provided in Section 11 of the Plan. Exercise of an Option or SAR in any
manner shall result in a decrease in the number of Shares which thereafter
shall be available, both for purposes of the Plan and for issuance under the
Option or SAR, by the number of Shares as to which the Option is exercised.
(ii) Termination of Employment/Service Provider. In the event that
an Optionee ceases to be a Service Provider (other than upon the Optionee's
death or Disability), the Optionee may exercise his or her Option or SAR
within such period of time as is determined by the Administrator at the time
of grant, but only to the extent that the Optionee was entitled to exercise
the Option or SAR at the date of such termination (but in no event later
than the expiration of the term of such Option or SAR as set forth in the
Option or SAR Agreement). In the absence of a determination by the
Administrator, the Option or SAR shall remain exercisable for three (3)
months following the Optionee's termination. To the extent that Optionee
was not entitled to exercise an Option or SAR at the date of such
termination, and to the extent that the Optionee does not exercise such
Option or SAR (to the extent otherwise so entitled) within the time
specified herein, the Option or SAR shall terminate.
(iii) Disability of Optionee. In the event an Optionee ceases
to be a Service Provider as a result of the Optionee's Disability, the
Optionee may exercise his or her Option or SAR within such period of
time as is determined by the Administrator at the time of grant (but
in no event later than the expiration of the term of such Option or SAR
as set forth in the Option or SAR Agreement) as to all of the Shares
subject thereto, including Shares as to which the Option is not otherwise
exercisable at the date of Optionee's termination. In the absence of a
determination by the Administrator, the Option or SAR shall remain
exercisable for twelve (12) months following the Optionee's termination.
To the extent that the Optionee does not exercise such Option or SAR
within the time specified herein, the Option or SAR shall terminate.
(iv) Death of Optionee. In the event of an Optionee's death, the
Optionee's estate or the person(s) who acquired the right to exercise
the Optionee's Option or SAR by bequest or inheritance may exercise the
Option or SAR within such period of time as is determined by the
Administrator at the time of grant (but in no event later than the
expiration of the term of such Option or SAR as set forth in the Option
or SAR Agreement) as to all of the Shares subject thereto, including
Shares as to which the Option is not otherwise exercisable at the date of
Optionee's termination. In the absence of a determination by the
Administrator, the Option or SAR shall remain exercisable for twelve (12)
months following the Optionee's termination. To the extent that the
Optionee's estate or a person who acquired the right to exercise such
Option does not exercise such Option or SAR within the time specified
herein, the Option or SAR shall terminate.
8. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing or electronically, by means of a
Notice of Grant, of the terms, conditions and restrictions related to the
offer, including the number of Shares that the offeree shall be entitled
to purchase, the price to be paid, and the time within which the offeree
must accept such offer, provided, however, that no more than 25% of the
shares available for issuance under this Plan on the first day of each
fiscal year during its term shall be issued pursuant to Restricted
Stock Purchase Rights (or Long Term Performance Awards) during that
fiscal year. The offer shall be accepted by execution of a Restricted
Stock Purchase Agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's service with the Company for
any reason (including death or Disability). The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement
shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may
determine (generally ratable over four (4) years, but in no event shall
it lapse over a period of less than one (1) year).
(c) Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of
a shareholder, and shall be a shareholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Stock Purchase Right is
exercised, except as provided in Section 11 of the Plan.
9. Long-Term Performance Awards.
(a) General. Long-Term Performance awards are cash or
stock bonus awards that may be granted either alone or in addition
to other awards granted under the Plan. Such awards may be granted
for no cash consideration. The Administrator shall determine the nature,
length and starting date of any performance period (the "Performance
Period") for each Long-Term Performance Award, and shall determine the
performance or employment factors, if any, to be used in the determination
of Long-Term Performance Awards and the extent to which such Long-Term
Performance Awards are valued or have been earned. Long-Term Performance
Awards may vary from participant to participant and between groups of
participants and shall be based upon the achievement of Company, Subsidiary,
Parent and/or individual performance factors or upon such other criteria
as the Administrator may deem appropriate. Performance Periods may
overlap and participants may participate simultaneously with respect to
Long-Term Performance Awards that are subject to different Performance
Periods and different performance factors and criteria. Long-Term
Performance Awards shall be confirmed by, and be subject to the terms of,
a Long-Term Performance Award agreement. The terms of such awards need
not be the same with respect to each participant.
(b) Adjustment of Awards. The Administrator may adjust the
performance factors applicable to the Long-Term Performance Awards to
take into account changes in legal, accounting and tax rules and to make
such adjustments as the Administrator deems necessary or appropriate to
reflect the inclusion or exclusion of the impact of extraordinary or
unusual items, events or circumstances in order to avoid windfalls or
hardships.
10. Non-Transferability of Options and Rights. Unless determined
otherwise by the Administrator, Options and Rights may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
If the Administrator makes an Option or Right transferable, such Option
or Right may contain such additional terms and conditions as the
Administrator deems appropriate.
11. Adjustments Upon Changes in Capitalization, Dissolution, Merger,
Asset Sale or Change of Control.
(a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option and Right, and the number of shares
of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Rights have yet been granted or which
have been returned to the Plan upon cancellation or expiration of an
Option or Right, as well as the price per share of Common Stock covered
by each such outstanding Option or Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares
of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without
receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to an Option or Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option
or Right has not been previously exercised, it will terminate
immediately prior to the consummation of such proposed action. The
Administrator may, in the exercise of its sole discretion in such
instances, declare that any Option or Right shall terminate as of a date
fixed by the Administrator and give each Optionee the right to exercise
his or her Option or Right as to all or any part of the Optioned Stock,
including Shares as to which the Option or Right would not otherwise be
exercisable.
(c) Merger or Asset Sale. Subject to the provisions of paragraph
(d) hereof, in the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and Right shall be assumed or an
equivalent Option or Right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that
the successor corporation does not agree to assume the Option or Right,
or to substitute an equivalent option or right, the Optionee shall fully
vest in and have the right to exercise the Option or Right as to all of
the Optioned Stock, including Shares as to which it would not otherwise
be vested or exercisable. If an Option or Right becomes fully vested
and exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Administrator shall notify the Optionee
that the Option or Right shall be exercisable for a period of fifteen
(15) days from the date of such notice, and the Option or Right shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Right shall be considered assumed if,
immediately following the merger or sale of assets, the Option or Right
confers the right to purchase, for each Share of Optioned Stock subject
to the Option or Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common
Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the
merger or sale of assets was not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received
upon the exercise of the Option or Right, for each Share of Optioned
Stock subject to the Option or Right, to be solely common stock of the
successor corporation or its Parent equal in Fair Market Value to the
per share consideration received by holders of Common Stock in the
merger or sale of assets.
(d) Change in Control. In the event of a "Change in Control" of
the Company, as defined in paragraph (e) below, any Options and Rights
outstanding on the date such Change in Control is determined to have
occurred that are not yet fully exercisable and vested on such date shall
become fully exercisable and vested.
(e) Definition of "Change in Control". For purposes of this
Section 11, a "Change in Control" means the happening of any of the following:
(i) When any "person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company, a Subsidiary or a
Company employee benefit plan, including any trustee of such plan acting
as trustee) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting
power of the Company's then outstanding securities entitled to vote
generally in the election of directors; or
(ii) A merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more
than fifty percent (50%) of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders of
the Company approve an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets; or
(iii) A change in the composition of the Board, as a result of
which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (A) are directors
of the Company as of the date hereof, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a
majority of those directors whose election or nomination was not in
connection with any transaction described in subsections (i) or (ii)
or in connection with an actual or threatened proxy contest relating
to the election of directors of the Company.
12. Date of Grant. The date of grant of an Option or Right shall be, for
all purposes, the date on which the Administrator makes the determination
granting such Option or Right, or such other later date as is determined
by the Administrator.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Administrator may at any time
amend, alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to
comply with Applicable Laws. Such shareholder approval, if required,
shall be obtained in such a manner and to such a degree as is required
by Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any
Optionee under any previously granted Option or Right, unless mutually
agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability
to exercise the powers granted to it hereunder with respect to Options
or Rights granted under the Plan prior to the date of such termination.
14. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Right unless the exercise of such Option or
Right and the issuance and delivery of such Shares shall comply with
all Applicable Laws, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of
an Option or Right, the Company may require the person exercising such
Option or Right to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion
of counsel for the Company, such a representation is required.
15. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the
lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
16. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares
as shall be sufficient to satisfy the requirements of the Plan.
17. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months
before or after the date the Plan is adopted. Such shareholder approval
shall be obtained in the manner and to the degree required under applicable
applicable federal and state law.
ADAC LABORATORIES
1999 SUPPLEMENTAL INCENTIVE PLAN
1. Purposes of the Plan. The purpose of the ADAC Laboratories
1999 Supplemental Incentive Plan is to enable ADAC Laboratories to
provide an incentive to eligible Service Providers whose present and
potential contributions are important to the continued success of the
Company, to afford these individuals the opportunity to acquire a
proprietary interest in the Company, and to enable the Company to enlist
and retain in its service the best available talent for the successful
conduct of its business and align the interests of such persons with the
interests of the Company's shareholders. It is intended that these
purposes will be effected through the granting of Nonstatutory Stock
Options and Stock Purchase Rights.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or such of its Committees as
shall be administering the Plan, in accordance with Section 5 of the Plan.
(b) "Applicable Laws" means the requirements relating to
the administration of the Plan under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options or
Stock Purchase Rights are granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 5 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means ADAC Laboratories, a California corporation.
(h) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(k) "Employee" means any person, employed by the Company
or any Parent or Subsidiary of the Company. A Service Provider shall
not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any
successor. Neither service as a Director nor payment of a director's
fee by the Company shall be sufficient to constitute "employment" by
the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(m) "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation
the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system for the last market trading day prior to the
time of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading
day prior to the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by
the Administrator.
(n) "Nonstatutory Stock Option" means an Option that is
not intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code and the regulations promulgated thereunder.
(o) "Notice of Grant" means a written notice evidencing
certain terms and conditions of an individual Option or Stock Purchase
Right. The Notice of Grant is part of the Option Agreement or Stock
Purchase Agreement.
(p) "Officer" means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the Plan.
(r) "Option Agreement" means a written agreement between
the Company and an Optionee evidencing the terms and conditions of an
individual Option. The Option Agreement is subject to the terms and
conditions of the Plan.
(s) "Optioned Stock" means the Common Stock subject to an Option
or Stock Purchase Right.
(t) "Optionee" means the holder of an outstanding Option or
Stock Purchase Right.
(u) "Parent" means a "parent corporation," whether now
or hereafter existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this 1999 Supplemental Incentive Plan.
(w) "Restricted Stock" means shares of Common Stock subject
to a Restricted Stock Purchase Agreement acquired pursuant to a
Stock Purchase Right under Section 8 below.
(x) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the
terms and restrictions applying to stock purchased under a Stock
Purchase Right. The Restricted Stock Purchase Agreement is subject to
the terms and conditions of the Plan and the Notice of Grant.
(y) "Rule 16b-3" means Rule 16b-3 of the Exchange Act, or any
successor rule thereto.
(z) "Service Provider" means an Employee, Director or Consultant.
(aa) "Share" means a share of the Common Stock, as adjusted
in accordance with Section 11 of the Plan.
(bb) "Stock Purchase Right" means a right to purchase
Common Stock pursuant to Section 8 of the Plan.
(cc) "Subsidiary" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. Eligibility. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Service Providers. If otherwise eligible, a
Service Provider who has been granted an Option or Stock Purchase Right
may be granted additional Options or Stock Purchase Rights.
4. Stock Subject to the Plan. Subject to the provisions of
Section 10, the maximum aggregate number of Shares that may be issued
under the Plan is 500,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, the
unpurchased Shares which were subject thereto shall become available
for future grant or sale under the Plan (unless the Plan has terminated);
provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Stock Purchase Right,
shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if Shares of Restricted
Stock are repurchased by the Company at their original purchase price,
such Shares shall become available for future grant under the Plan.
5. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of
Service Providers.
(ii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements
for exemption under Rule 16b-3.
(iii) Other Administration. Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee,
which Committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator
shall have the authority, in its discretion:
(i) to determine Fair Market Value;
(ii) to select the Service Providers to whom Options
and Stock Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common
Stock to be covered by each Option or Stock Purchase Right;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of Options and Stock Purchase Rights.
Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Option or Stock Purchase Right or the
shares of Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;
(vi) to construe and interpret the terms of the Plan;
(vii) to prescribe, amend and rescind rules and regulations
relating to the Plan;
(viii) to modify or amend each Option or Stock Purchase
Right (subject to Section 13 of the Plan);
(ix) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option or
Stock Purchase Right previously granted by the Administrator;
(x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to
be issued upon exercise of an Option or Stock Purchase Right that number
of Shares having a Fair Market Value equal to the amount required to be
withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable;
(xi) to determine the terms and restrictions applicable to
Options and Stock Purchase Rights and any Restricted Stock; and
(xii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options or Stock
Purchase Rights.
6. Duration of the Plan. The Plan shall remain in effect until
terminated by the Board under the terms of the Plan.
7. Options. The Administrator, in its discretion, may grant
Options to eligible participants. Each Option shall be evidenced by a
Notice of Grant which shall be in such form and contain such provisions
as the Administrator shall from time to time deem appropriate, provided
that Option Agreements shall contain the following terms and
conditions:
(a) Option Exercise Price. The per Share exercise price
for the Shares to be issued pursuant to the exercise of an Option shall
be determined by the Administrator.
(b) Waiting Period and Exercise Dates. At the time an
Option is granted, the Administrator shall fix the period within which
the Option may be exercised, and shall determine any conditions that
must be satisfied before the Option may be exercised.
(c) Form of Payment. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Administrator (and, in the case of
an Incentive Stock Option, shall be determined at the time of grant) and
may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (1) in the case of Shares
acquired from the Company, have been owned by the Optionee for more than
six months on the date of surrender, and (2) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to
the Optionee;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.
(d) Method of Exercise.
(i) Procedure for Exercise; Rights as a Shareholder.
An Option granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator and as shall be
permissible under the terms of the Plan. An Option may not be exercised
for a fraction of a Share.
An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and
full payment for the Shares with respect to which the Option is
exercised has been received by the Company. Full payment may, as
authorized by the Administrator and permitted by the Option Agreement,
consist of any consideration and method of payment allowable under
Section 7(c). Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment shall be made
for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 11
of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter shall be available, both for
purposes of the Plan and for issuance under the Option, by the
number of Shares as to which the Option is exercised.
(ii) Termination of Relationship as a Service Provider.
In the event that an Optionee ceases to be a Service Provider (other
than upon the Optionee's death or Disability), the Optionee may
exercise his or her Option within such period of time as is determined
by the Administrator at the time of grant, but only to the extent that
the Optionee was entitled to exercise the Option at the date of such
termination (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement). In the absence of a
determination by the Administrator, the Option shall remain exercisable
for three (3) months following the Optionee's termination. To the
extent that Optionee was not entitled to exercise an Option at the date
of such termination, and to the extent that the Optionee does not
exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.
(iii) Disability of Optionee. In the event an Optionee
ceases to be a Service Provider as a result of the Optionee's
Disability, the Optionee may exercise his or her Option within such
period of time as is determined by the Administrator at the time of
grant (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement) as to all of the Shares
subject thereto, including Shares as to which the Option is not
otherwise exercisable at the date of Optionee's termination. In the
absence of a determination by the Administrator, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination.
To the extent that the Optionee does not exercise such Option within the
time specified herein, the Option shall terminate.
(iv) Death of Optionee. In the event of an Optionee's
death, the Optionee's estate or the person(s) who acquired the
right to exercise the Optionee's Option by bequest or inheritance
may exercise the Option within such period of time as is determined by
the Administrator at the time of grant (but in no event later than the
expiration of the term of such Option as set forth in the Option
Agreement) as to all of the Shares subject thereto, including Shares as
to which the Option is not otherwise exercisable at the date of
Optionee's termination. In the absence of a determination by the
Administrator, the Option shall remain exercisable for twelve (12)
months following the Optionee's termination. To the extent that the
Optionee's estate or a person who acquired the right to exercise such
Option does not exercise such Option within the time specified herein,
the Option shall terminate.
8. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with Options and/or
cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing or electronically, by means of a
Notice of Grant, of the terms, conditions and restrictions related to
the offer, including the number of Shares that the offeree shall be
entitled to purchase, the price to be paid, and the time within which
the offeree must accept such offer. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's service with the Company for
any reason (including death or Disability). The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement
shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may
determine.
(c) Other Provisions. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in
its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of
a shareholder, and shall be a shareholder when his or her purchase
is entered upon the records of the duly authorized transfer agent
of the Company. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the Stock Purchase
Right is exercised, except as provided in Section 11 of the Plan.
9. Non-Transferability of Options and Stock Purchase Rights.
Unless determined otherwise by the Administrator, Options, Stock
Purchase Rights and Restricted Stock may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such
Option or Stock Purchase Right may contain such additional terms and
conditions as the Administrator deems appropriate.
10. Limitations. Neither the Plan nor any Option, Stock
Purchase Right or Restricted Stock shall confer upon an Optionee any
right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way
with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
11. Adjustments Upon Changes in Capitalization, Dissolution,
Merger, Asset Sale or Change of Control.
(a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option and Stock Purchase
Right, and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Options or
Stock Purchase Rights have yet been granted or which have been returned
to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered
by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by
the Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, to the extent that
an Option or Stock Purchase Right has not been previously exercised, it
will terminate immediately prior to the consummation of such proposed
action. The Administrator may, in the exercise of its sole discretion
in such instances, declare that any Option or Stock Purchase Right shall
terminate as of a date fixed by the Administrator and give each Optionee
the right to exercise his or her Option or Stock Purchase Right as to
all or any part of the Optioned Stock, including Shares as to which the
Option or Stock Purchase Right would not otherwise be exercisable.
(c) Merger or Asset Sale. Subject to the provisions of
paragraph (d) hereof, in the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall
be assumed or an equivalent Option or Stock Purchase Right substituted
by the successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation does not agree
to assume the Option or Stock Purchase Right, or to substitute an
equivalent option or stock purchase right, the Optionee shall fully vest
in and have the right to exercise the Option or Stock Purchase Right as
to all of the Optioned Stock, including Shares as to which it would not
otherwise be vested or exercisable. If an Option or Stock Purchase
Right becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee that the Option or Stock
Purchase Right shall be exercisable for a period of fifteen (15) days
from the date of such notice, and the Option or Stock Purchase Right
shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered
assumed if, immediately following the merger or sale of assets, the
Option or Stock Purchase Right confers the right to purchase, for each
Share of Optioned Stock subject to the Option or Stock Purchase Right
immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the
merger or sale of assets by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders
of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets was not
solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the
Option or Stock Purchase Right, for each Share of Optioned Stock subject
to the Option or Stock Purchase Right, to be solely common stock of the
successor corporation or its Parent equal in Fair Market Value to the
per share consideration received by holders of Common Stock in the
merger or sale of assets.
(d) Change in Control. In the event of a "Change in
Control" of the Company, as defined in paragraph (e) below, any
Options, Stock Purchase Rights and Restricted Stock outstanding on the
date such Change in Control is determined to have occurred that are not
yet fully exercisable and vested on such date shall become fully
exercisable and vested.
(e) Definition of "Change in Control". For purposes of
this Section 10, a "Change in Control" means the happening of any of
the following:
(i) When any "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, a
Subsidiary or a Company employee benefit plan, including any trustee of
such plan acting as trustee) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more of
the combined voting power of the Company's then outstanding securities
entitled to vote generally in the election of directors; or
(ii) A merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
more than fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets; or
(iii) A change in the composition of the Board, as a
result of which fewer than a majority of the directors are Incumbent
Directors. "Incumbent Directors" shall mean directors who either
(A) are directors of the Company as of the date hereof, or (B) are
elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of those directors whose election or
nomination was not in connection with any transaction described in
subsections (i) or (ii) or in connection with an actual or threatened
proxy contest relating to the election of directors of the Company.
12. Date of Grant. The date of grant of an Option or Stock
Purchase Right shall be, for all purposes, the date on which the
Administrator makes the determination granting such Option or Stock
Purchase Right, or such other later date as is determined by the
Administrator.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Administrator may at
any time amend, alter, suspend or terminate the Plan.
(b) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the
rights of any Optionee under any previously granted Option or Stock
Purchase Right, unless mutually agreed otherwise between the Optionee
and the Administrator, which agreement must be in writing and signed by
the Optionee and the Company. Termination of the Plan shall not affect
the Administrator's ability to exercise the powers granted to it
hereunder with respect to Options or Stock Purchase Rights granted under
the Plan prior to the date of such termination.
14. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant
to the exercise of an Option or Stock Purchase Right unless the exercise
of such Option or Stock Purchase Right and the issuance and delivery of
such Shares shall comply with all Applicable Laws, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require
the person exercising such Option or Stock Purchase Right to represent
and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell
or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.
15. Inability to Obtain Authority. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the
lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been
obtained.
16. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares
as shall be sufficient to satisfy the requirements of the Plan.
August 23, 1999
ADAC Laboratories
540 Alder Drive
Milpitas, California 95035
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about August 23,
1999 (the "Registration Statement"), in connection with the registration
under the Securities Act of 1933, as amended, of (i) 100,000 shares of
your Common Stock reserved for issuance under the Employee Stock
Purchase Plan (1994) (the "Plan"), (ii) 920,000 shares of your Common
Stock reserved for issuance under the 1999 Long-Term Incentive Plan (the
"Long-Term Plan"), and (iii) 500,000 shares of your Common Stock reserved
for issuance under the 1999 Supplemental Incentive Plan (the "Supplemental
Plan) and referred to collectively as the "Shares" and as the "Plans."
As your legal counsel, we have examined the proceedings taken and proposed
to be taken in connection with the issuance, sale and payment of
consideration for the Shares to be issued under the Plan.
It is our opinion that, when issued and sold in compliance with
applicable prospectus delivery requirements and in the manner referred
to in the Plan and pursuant to the agreements which accompany the Plan,
the Shares will be legally and validly issued, fully paid and non-
assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name
wherever appearing in the Registration Statement and any amendments
thereto.
Sincerely,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the Employee Stock Purchase Plan
(1994), 1999 Long-Term Incentive Plan and 1999 Supplemental Incentive
Plan of our report dated February 26, 1999 relating to the financial
statements, which appears in the 1998 Annual Report to Shareholders of
ADAC Laboratories, which is incorporated by reference in ADAC
Laboratories' Annual Report on Form 10-K for the year ended September
27, 1998. We also consent to the incorporation by reference of our
report dated February 26, 1999 relating to the financial statement
schedules, which appears in such Annual Report on Form 10-K.
PricewaterhouseCooopers LLP
/s/ PricewaterhouseCoopers LLP
San Jose, California
August 24, 1999
