<PAGE>
As filed with the Securities and Exchange Commission on June 12, 1998.
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------------
OEC MEDICAL SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
----------------------
<TABLE>
<S> <C>
Delaware 94-2538512
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
384 Wright Brothers Drive
Salt Lake City, Utah 84116
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
----------------------
OEC Medical Systems, Inc.
1998 STOCK OPTION PLAN, AND
1993 Employee Incentive Stock Acquisition Plan, as Amended and Restated, and
1990 Stock Option/Stock Purchase Plan
(Full Titles of the Plans)
----------------------
Randy W. Zundel
Executive Vice President, Chief Operating Officer and Chief Financial Officer
OEC Medical Systems, Inc.
384 Wright Brothers Drive
Salt Lake City, UT 84116
(Name and Address of Agent for Service)
(801) 328-9300
(Telephone Number, Including Area Code, of Agent for Service)
----------------------
With Copy to:
Holland & Hart LLP
215 South State Street, Suite 500
Salt Lake City, UT 84111-2346
(801) 595-7800
ATTENTION: DAVID R. RUDD, ESQ.
- --------------------------------------------------------------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
===============================================================================
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed Proposed
Maximum Maximum
Amount to Offering Aggregate Amount of
Title of Each Class of Securities to be be Price Per Offering Registration
Registered/1/ Registered Share Price Fee
- ------------------------------------------------------------------------------------------------------------------------
1998 Stock Option Plan,
Common Stock,
$.01 par value 1,350,000 $21.97/2/ $29,659,500 $ 8,750
1993 Employee Incentive Stock
Acquisition Plan, as amended and
restated,
Common Stock,
$.01 par value 250,000 $18.67/3/ $ 4,667,500 $ 1,377
1990 Stock Option/Stock Purchase
Plan, as amended and restated,
Common Stock,
$.01 par value 500,000 $ 9.44/4/ $ 4,720,000 $ 1,353
--------------------------------------------------------------------------
TOTAL 2,100,000 -- $39,047,000 $11,519
==============================================================================================================================
</TABLE>
/1/ Pursuant to Rule 416(a) under the Securities Act of 1933, as amended
(the "Securities Act"), this Registration Statement shall also cover any
additional shares of the Registrant's Common Stock, $.01 par value (the
"Common Stock"), which are issued or become issuable under the OEC
Medical Systems, Inc. 1998 Stock Option Plan and the OEC Medical
Systems, Inc. 1993 Employee Incentive Stock Acquisition Plan, as amended
and restated, to prevent dilution resulting from any stock dividend,
stock split, recapitalization or other similar transaction.
/2/ Calculated in accordance with Rule 457(h) under the Securities Act,
based upon the average of the high and low prices of the Common Stock as
reported on June 9, 1998, on the New York Stock Exchange.
/3/ Calculated in accordance with Rule 457(h) under the Securities Act,
based upon 85% of the average of the high and low prices of the Common
Stock as reported on June 9, 1998, on the New York Stock Exchange.
/4/ Calculated in accordance with Rule 457(h) under the Securites Act based
on the average exercise price per share for outstanding options.
2
<PAGE>
PART II
Item 3. Incorporation of Certain Documents by Reference.
------------------------------------------------
The following documents filed by OEC Medical Systems, Inc. (the
"Registrant") with the Securities and Exchange Commission are hereby
incorporated by reference in this Registration Statement:
(a) The Registrant's latest Annual Report, filed pursuant to Section 13(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on Form
10-K, for the fiscal year ended December 31, 1997.
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
(c) The Registrant's Registration Statement No. 1-09983 on Form 8-A filed
on June 27, 1991 which includes a description of the Registrant's $.01 par value
common stock (the "Common Stock"), and Amendment No. 1 thereto on Form 8,
Registration No. 1-09983, filed on July 19, 1991.
All documents filed subsequent hereto by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall also be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents.
The consolidated financial statements of the Registrant as of December 31,
1997 and 1996, that are included in the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1997, and incorporated by reference in this
Registration Statement, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference.
Such financial statements are, and audited financial statements to be included
in subsequently filed documents will be, incorporated herein in reliance upon
the reports of Deloitte & Touche LLP pertaining to such financial statements (to
the extent covered by consents filed with the Securities and Exchange
Commission), and upon the authority of such firm as experts in accounting and
auditing.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides in relevant part that "a corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys' fees), judgments,
fines and
3
<PAGE>
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful." With respect to
derivative actions, Section 145(b) of the DGCL provides in relevant part that
"[a] corporation shall have power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor. . .{by reason of his service in one of the capacities specified in
the preceding sentence} against expenses, (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper."
The Registrant's Restated Bylaws provide for indemnification of any
director or officer of the Registrant who is or was involved in any manner in
any threatened, pending, or completed investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative by reason
of the fact that such director or officer is or was serving as a director or
officer of the Registrant or is or was serving another entity as a director,
officer, employee, fiduciary or agent at the request of the Registrant, against
all expenses and liabilities actually and reasonably incurred by such director
or officer in connection with such proceeding. Indemnification is limited in
certain instances involving "hostile" takeover actions by members of the
Registrant's Board of Directors and in circumstances constituting a breach or
default under a Company agreement.
The Registrant's Restated Bylaws also provide that the Registrant will
indemnify its directors, officers, employees and other agents to the fullest
extent permitted by Delaware law.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
4
<PAGE>
Item 8. Exhibits.
---------
Regulation S-K Document
-------------- --------
Exhibit
-------
4.1 Certificate of Incorporation, as amended.
Incorporated by reference to the OEC Medical Systems,
Inc. Form 10-K, filed March 30, 1994.
4.2 Restated By-Laws, as amended May 15, 1997.
Incorporated by reference to the OEC Medical Systems,
Inc. Form 10-Q, filed August 8, 1997.
4.3 OEC Medical Systems, Inc. 1998 Stock Option Plan.
4.4 OEC Medical Systems, Inc. 1993 Employee Incentive
Stock Acquisition Plan, as amended and restated.
4.5 Rights Agreement, dated as of June 20, 1988, between
Diasonics, Inc. and Bank of America NT&SA.
Incorporated by reference to Exhibit 4.3 of the
Diasonics, Inc. Form 8-K, filed August 1, 1988.
4.6 Diasonics, Inc. 1979 Stock Option Plan, amended and
restated as of June 1, 1982. Incorporated by
reference to Exhibit 10.6 of the Diasonics, Inc.
Registration Statement on Form S-8, filed May 2, 1983.
4.7 OEC Medical Systems, Inc. 1990 Stock Option/Stock Purchase
Plan. Incorporated by reference to Exhibit 99.1 of the OEC
Medical Systems, Inc. Form S-8, filed on September 30, 1993
(the "1993 S-8").
4.8 Warrant for the Purchase of Common Shares issued to
PaineWebber R&D Partners II, L.P., as amended.
Incorporated by reference to the OEC Medical Systems,
Inc. Form 10-K, filed on March 30, 1994.
4.9 Form of Option Agreement used in connection with
non-qualified options having service-vesting
provisions granted under the Discretionary Option
Grant Program.
4.10 Form of Option Agreement used in connection with
non-qualified options having milestone vesting
provisions granted under the
5
<PAGE>
Discretionary Option Grant Program.
4.11 Form of Option Agreement used in connection with
incentive stock options.
4.12 Form of Option Agreement used in connection with
options granted under the Automatic Option Grant
Program.
4.13 Note and Stock Pledge Agreement between Ruediger
Naumann-Etienne and OEC Medical Systems, Inc., dated
September 5, 1995. Incorporated by reference to the
OEC Medical Systems, Inc. Form 10-K, filed April 1,
1996.
4.14 Form of Warrant Agreement used in connection with
grant to independent contractors for the purchase of
common shares. Incorporated by reference to the OEC
Medical Systems, Inc. Form 10-K, filed March 27, 1997.
4.15 Agreement dated December 17, 1996, to acquire full
ownership of Barwig Medizinische Systeme GmbH (BMS).
Incorporated by reference to the OEC Medical Systems,
Inc. Form 10-K, filed March 27, 1997.
4.16 Form of Incentive Stock Option Agreement-Initial Grant
to be generally used in connection with the 1990 Stock
Option/Stock Purchase Plan, Incorporated by reference to
Exhibit 99.2 of the 1993 S-8.
4.17 Form of Incentive Stock Option Agreement to be generally
used in connection with the 1990 Stock Option/Stock
Purchase Plan. Incorporated by reference to Exhibit 99.3
of the 1993 S-8.
4.18 Form of Non-Qualified Stock Option Agreement-Initial
Grant to be generally used in connection with the 1990
Stock Option/Stock Purchase Plan. Incorporated by
reference to Exhibit 99.4 of the 1993 S-8.
4.19 Form of Non-Qualified Stock Option Agreement to be
generally used in connection with the 1990 Stock
Option/Stock Purchase Plan. Incorporated by reference to
Exhibit 99.5 of the 1993 S-8.
4.20 Form of Stock Option Agreement (Non-Employee Director)
to be generally used in connection with the automatic
option grant program of the 1990 Stock Option/Stock
Purchase Plan. Incorporated by reference to Exhibit 99.6
of the 1993 S-8.
4.21 Form of Stock Option Agreement-Direct Stock Purchase to
be generally used in connection with the 1990 Stock
Option/Stock Purchase Plan. Incorporated by reference to
Exhibit 99.7 of the 1993 S-8.
4.22 Form of Stock Option Adjustment Agreement used in
connection with the 1990 Stock Option/Stock Purchase
Agreement. Incorporated by reference to Exhibit 99.8 of
the 1993 S-8.
5 Opinion of Holland & Hart LLP, as to the legality of
securities being registered.
23.1 Consent of Deloitte & Touche LLP, Independent
Auditor.
23.2 Consent of Holland & Hart LLP (contained in
Exhibit 5).
24 Power of Attorney (included on page 8 of this
Registration Statement).
-----------------
6
<PAGE>
Item 9. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(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 that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
7
<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 the City of Salt Lake, State of Utah, on June 12, 1998.
OEC Medical Systems, Inc.
/s/ Randy W. Zundel
-----------------------------------
Randy W. Zundel
Executive Vice President, Chief Operating
Officer & Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS by these presents that each person whose signature to this
Registration Statement appears below hereby constitutes and appoints Randy W.
Zundel, as his true and lawful attorney-in-fact and agent, with full power of
substitution, to sign on his behalf individually and in the capacity stated
below, and to perform any acts necessary to be done in order to file all
amendments and post-effective amendments to this Registration Statement, and any
and all instruments or documents filed as part of or in connection with this
Registration Statement or the amendments thereto and each of the undersigned
does hereby ratify and confirm all that such attorney-in-fact and agent, or his
substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons in the
capacities indicated on June 12, 1998:
Signature Title
--------- -----
/s/Ruediger Naumann-Etienne Chairman of the Board
- ---------------------------
Ruediger Naumann-Etienne
/s/Gregory K. Hinkley Director
- ---------------------------
Gregory K. Hinkley
/s/Benno P. Lotz Director
- ---------------------------
Benno P. Lotz
/s/Alan W. May Director
- ---------------------------
Alan W. May
/s/Chase N. Peterson Director
- ---------------------------
Chase N. Peterson
/s/Joseph W. Pepper President, Chief Executive Officer and Director
- --------------------------- (Principal Executive Officer)
Joseph W. Pepper
8
<PAGE>
/s/Randy W. Zundel Executive Vice President, Chief Operating Officer and
- --------------------- Chief Financial Officer (Principal Financial
Randy W. Zundel and Accounting Officer)
9
<PAGE>
OEC MEDICAL SYSTEMS, INC.
EXHIBIT INDEX
Regulation S-K Document
- -------------- --------
Exhibit
-------
4.1 Certificate of Incorporation, as amended.
Incorporated by reference to the OEC Medical Systems,
Inc. Form 10-K, filed March 30, 1994.
4.2 Restated By-Laws, as amended May 15, 1997.
Incorporated by reference to the OEC Medical Systems,
Inc. Form 10-Q, filed August 8, 1997.
4.3 OEC Medical Systems, Inc. 1998 Stock Option Plan.
4.4 OEC Medical Systems, Inc. 1993 Employee Incentive
Stock Acquisition Plan, as amended and restated.
4.5 Rights Agreement, dated as of June 20, 1988, between
Diasonics, Inc. and Bank of America NT&SA.
Incorporated by reference to Exhibit 4.3 of the
Diasonics, Inc. Form 8-K, filed August 1, 1988.
4.6 Diasonics, Inc. 1979 Stock Option Plan, amended and
restated as of June 1, 1982. Incorporated by
reference to Exhibit 10.6 of the Diasonics, Inc.
Registration Statement on Form S-8, filed May 2, 1983.
4.7 OEC Medical Systems, Inc. 1990 Stock Option/Stock
Purchase Plan. Incorporated by reference to
Exhibit 99.1 of the Diasonics, Inc. Form S-8, filed
on September 30, 1993 (the "1993 S-8").
4.8 Warrant for the Purchase of Common Shares issued to
PaineWebber R&D Partners II, L.P., as amended.
Incorporated by reference to the OEC Medical Systems,
Inc. Form 10-K, filed on March 30, 1994.
4.9 Form of Option Agreement used in connection with
non-qualified options having service-vesting
provisions granted under the Discretionary Option
Grant Program.
4.10 Form of Option Agreement used in connection with
non-qualified options having milestone vesting
provisions granted under the
10
<PAGE>
Discretionary Option Grant Program.
4.11 Form of Option Agreement used in connection with
incentive stock options.
4.12 Form of Option Agreement used in connection with
options granted under the Automatic Option Grant
Program.
4.13 Note and Stock Pledge Agreement between Ruediger
Naumann-Etienne and OEC Medical Systems, Inc., dated
September 5, 1995. Incorporated by reference to the
OEC Medical Systems, Inc. Form 10-K, filed April 1,
1996.
4.14 Form of Warrant Agreement used in connection with
grant to independent contractors for the purchase of
common shares. Incorporated by reference to the OEC
Medical Systems, Inc. Form 10-K, filed March 27, 1997.
4.15 Agreement dated December 17, 1996, to acquire full
ownership of Barwig Medizinische Systeme GmbH (BMS).
Incorporated by reference to the OEC Medical Systems,
Inc. Form 10-K, filed March 27, 1997.
4.16 Form of Incentive Stock Option Agreement-Initial Grant
to be generally used in connection with the 1990 Stock
Option/Stock Purchase Plan, Incorporated by reference to
Exhibit 99.2 of the 1993 S-8.
4.17 Form of Incentive Stock Option Agreement to be generally
used in connection with the 1990 Stock Option/Stock
Purchase Plan. Incorporated by reference to Exhibit 99.3
of the 1993 S-8.
4.18 Form of Non-Qualified Stock Option Agreement-Initial
Grant to be generally used in connection with the 1990
Stock Option/Stock Purchase Plan. Incorporated by
reference to Exhibit 99.4 of the 1993 S-8.
4.19 Form of Non-Qualified Stock Option Agreement to be
generally used in connection with the 1990 Stock
Option/Stock Purchase Plan. Incorporated by reference to
Exhibit 99.5 of the 1993 S-8.
4.20 Form of Stock Option Agreement (Non-Employee Director)
to be generally used in connection with the automatic
option grant program of the 1990 Stock Option/Stock
Purchase Plan. Incorporated by reference to Exhibit 99.6
of the 1993 S-8.
4.21 Form of Stock Option Agreement-Direct Stock Purchase to
be generally used in connection with the 1990 Stock
Option/Stock Purchase Plan. Incorporated by reference to
Exhibit 99.7 of the 1993 S-8.
4.22 Form of Stock Option Adjustment Agreement used in
connection with the 1990 Stock Option/Stock Purchase
Agreement. Incorporated by reference to Exhibit 99.8 of
the 1993 S-8.
5 Opinion of Holland & Hart LLP, as to the legality of
securities being registered.
23.1 Consent of Deloitte & Touche LLP, Independent
Auditor.
23.2 Consent of Holland & Hart LLP (contained in
Exhibit 5).
24 Power of Attorney (included on page 8 of this
Registration Statement).
-----------------
11
<PAGE>
OEC MEDICAL SYSTEMS, INC.
1998 STOCK OPTION PLAN
ARTICLE ONE
GENERAL PROVISIONS
1. PURPOSE.
-------
This 1998 Stock Option Plan (the "Plan") is intended to provide key
Employees (including Officers and Directors), non-employee Board members and
Consultants of the Company and the Company's Subsidiaries with the opportunity
to acquire an equity interest in the Company and thereby encourage them to
continue to provide services to the Company or the Company's Subsidiaries. The
effective date of this Plan shall be May 20, 1998.
2. DEFINITIONS.
-----------
As used herein, the following terms have the meanings indicated:
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.3 "Committee" means one or more committees of the Board, each with at
least two Board members, which shall assume responsibility for the
administration of one or more functions under the Plan, either to the extent
expressly provided in the Plan or as specifically authorized by Board
resolution.
2.4 "Common Stock" means the common stock of the Company, $.01 par
value per share.
2.5 "Company" means OEC Medical Systems, Inc., a Delaware corporation.
2.6 "Consultant" means any person (other than a Director) or entity
(including any corporation, partnership or limited liability company) rendering
services to the Company or a Subsidiary as an independent contractor or any
person (other than a Director) who is employed by the person or entity rendering
such services or any person or entity (other than a Director) who is an
exclusive independent distributor for the Company or a Subsidiary.
2.7 "Director" means an individual who is a member of the Board or a
member of the board of directors of any Subsidiary.
2.8 "Employee" means an individual who is employed, within the meaning
of Section 3401 of the Code and the regulations thereunder, as a common law
employee by the Company or one or more Subsidiary corporations, including any
Officer or Director who is so employed, but excluding any Officer or Director
who is not so employed.
1
<PAGE>
2.9 "Employment Termination" means:
(i) In the case of an Employee, the cessation of such individual's
Employee status for any reason without his/her becoming or continuing as a
Consultant or Director; and
(ii) In the case of a Director, the cessation of such individual's
service on the Board for any reason without his/her becoming or continuing
as an Employee or Consultant; and
(iii) In the case of a Consultant, the cessation of such person's
status as a Consultant for any reason without his/her becoming or
continuing as an Employee or Director.
2.10 "Exercise Price" means the price per share at which an Option may
be exercised.
2.11 "Fair Market Value" means the closing price per share of Common
Stock on the relevant determination date on an established stock exchange, if
the Common Stock is listed and traded on such an exchange. If no sale of Common
Stock is made on any such exchange on the date in question, the Fair Market
Value shall be determined by the closing price of the Common Stock on the next
preceding day upon which such a sale shall have occurred.
2.12 "Grant Date" is the date on which (i) the Committee grants a
discretionary Option under Article Two of the Plan, or (ii) an automatic grant
is made to a non-employee member of the Board pursuant to the provisions of
Article Three.
2.13 "Incentive Stock Option" means an Option under Article Two which
meets the requirements of Section 422(b) of the Code.
2.14 "1933 Act" means the Securities Act of 1933, as amended.
2.15 "1934 Act" means the Securities Exchange Act of 1934, as amended.
2.16 "Nonstatutory Stock Option" means an Option under Article Two or
Article Three which is not intended to meet the requirements of Section 422(b),
423(b) or 424(b) of the Code.
2.17 "Note" means a full recourse promissory note of an Optionee.
2.18 "Officer" means any Employee who is at the time of determination
subject to the short-swing profit restrictions of Section 16 of the 1934 Act.
2.19 "Option" means, except where the context clearly indicates
otherwise, (i) any discretionary stock option grant made by the Committee
pursuant to Article Two of the Plan or (ii) any automatic stock option grant
made pursuant to the provisions of Article Three.
2
<PAGE>
2.20 "Optionee" means, except where the context clearly indicates
otherwise, (i) an Employee, non-employee Director or Consultant to whom a
discretionary Option has been granted pursuant to Article Two of the Plan or
(ii) a non-employee Director to whom an automatic grant has been made pursuant
to the provisions of Article Three.
2.21 "Permanent Disability" means a disability within the meaning of
Section 22(e)(3) of the Code.
2.22 "Plan" means this OEC Medical Systems, Inc. 1998 Stock Option
Plan, as it may be subsequently amended from time to time.
2.23 "Purchase Price" means, with respect to an Option granted under
Article Two or Article Three, the Exercise Price times the number of Shares with
respect to which such Option is exercised.
2.24 "Shares" means the shares of Common Stock issuable under the Plan
pursuant to Options granted under Articles Two and Three.
2.25 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, provided each such
corporation (other than the last corporation) in the unbroken chain owns at
least 50 percent of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
2.26 "10% Stockholder" means an individual who owns stock possessing
10% or more of the total combined voting power of all classes of outstanding
stock of the Company or any one of its Subsidiary corporations. In determining
such stock ownership, the following guidelines shall be in effect:
(i) The individual shall be considered to own the stock owned,
directly or indirectly, by or for his/her brothers and sisters, spouse,
ancestors and lineal descendants. Stock owned, directly or indirectly, by
or for a corporation, partnership, limited liability company, estate or
trust shall be considered as being owned proportionately by or for its
stockholders, partners, members or beneficiaries. Stock with respect to
which such individual holds an Option shall not be counted.
(ii) "Outstanding stock" shall include all stock actually issued
and outstanding immediately after the grant of an Option to such
individual, but shall not include Shares authorized for issuance under any
Options held by such individual or by any other person.
3. STRUCTURE OF THE PLAN.
---------------------
3.1 Stock Programs. The Plan shall be divided into two separate
--------------
components: the Discretionary Option Grant Program specified in Article Two and
the Automatic Option Grant Program specified in Article Three. Under the
Discretionary Option Grant Program, eligible Employees, non-employee Directors
(other than those serving as members of the Primary Committee), whether or not
they have previously been in Employee status, and Consultants may, at the
discretion of the Committee, be
3
<PAGE>
granted Options to purchase shares of Common Stock at an Exercise Price equal to
or greater than the Fair Market Value of the shares on the Grant Date. Under the
Automatic Option Grant Program, the non-employee Directors, whether or not they
have previously been in Employee status, will automatically receive periodic
option grants to purchase shares of Common Stock at an Exercise Price equal to
the Fair Market Value of the shares on each automatic Grant Date.
3.2 Applicability. Unless the context clearly indicates otherwise, the
-------------
provisions of Articles One and Four of the Plan shall apply to the Discretionary
Option Grant Program and the Automatic Option Grant Program and shall
accordingly govern the interests of all individuals under the Plan.
4. STOCK.
-----
4.1 Number of Shares. The Shares of Common Stock issuable under the
----------------
Plan shall be shares of the Company's authorized but unissued Common Stock or
Shares of Common Stock reacquired by the Company. Subject to the provisions of
Section 4.4 of this Article One, the maximum aggregate number of Shares
available for issuance under the Plan is 300,000 Shares, plus an annual increase
to be made on the last day of the immediately preceding fiscal year equal to the
lesser of (a) 2 1/2 % of the Issued Shares (as defined below) on such date, (b)
500,000 shares, or (c) an amount determined by the Board. "Issued Shares" shall
mean the number of Shares of Common Stock of the Company outstanding on such
date plus any Shares reacquired by the Company during the fiscal year that ends
on such date.
4.2 Share Limitation. No one person participating in the Plan may
----------------
receive Options or separately exercisable stock appreciation rights for more
than 150,000 shares of Common Stock in the aggregate per calendar year, except
that such limit shall be increased to 250,000 shares of Common Stock for the
calendar year in which such person receives his/her initial Option grant under
the Plan.
4.3 Reissuances. In the event that any outstanding Option for any
-----------
reason expires or is terminated, whether or not pursuant to the cancellation-
regrant provisions of Section 2 of Article Two, the Shares allocable to the
unexercised portion of such Option may be made the subject of subsequent Option
grants under this Plan. Shares subject to any Option or portion thereof
surrendered or canceled in accordance with Section 1.8(b) of Article Two or
Section 3.2 of Article Three and all Share issuances under the Plan, whether or
not such Shares are subsequently repurchased by the Company pursuant to its
repurchase rights under Article Two, shall reduce on a share-for-share basis the
number of shares of Common Stock available for subsequent Option grants under
this Plan, except that if Shares are repurchased by the Company at their
original purchase price and the original purchaser did not receive any benefits
of ownership of such Shares, such Shares shall become available for future grant
under the Plan. In addition, should the Purchase Price of an outstanding Option
exercised under the Plan be paid with shares of Common Stock or should shares of
Common Stock be withheld by the Company in satisfaction of the withholding taxes
incurred by the Optionee in connection with the acquisition or vesting of Shares
issued under the Plan, then the number of shares of Common Stock available for
issuance under the Plan shall be reduced by the gross number of Shares for which
the Option is exercised, and not by the net number of Shares of Common Stock
actually issued to the Optionee.
4
<PAGE>
4.4 Adjustments. Subject to any required action by stockholders, in
-----------
the event of any increase or decrease in the number of the Company's outstanding
shares of Common Stock resulting from a subdivision or consolidation of such
shares or the payment of a stock dividend (but only of Common Stock), a rights
offering covering shares of 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, the Primary Committee may, in its discretion, make
proportionate adjustments to:
(i) the maximum number of Shares which may be issued pursuant to
this Plan,
(ii) the maximum number of Shares for which any one person may
receive Option grants and separately exercisable stock appreciation rights
per calendar year pursuant to this Plan, and
(iii) the number of Shares purchasable under each Option outstanding
under the Discretionary Option Grant Program and the Exercise Price payable
per share thereunder.
Upon the occurrence of any of the foregoing Section 4.4 transactions
affecting the Common Stock issuable under the Plan, the following adjustments
shall automatically be made to the Automatic Option Grant Program and the
outstanding grants thereunder:
(i) the number of Shares for which automatic option grants are to made
per non-employee Board member at each subsequent Annual Stockholders
Meeting shall be proportionately adjusted to reflect the effect of the
Section 4.4 transaction upon the Company's outstanding Common Stock, and
(ii) the number of Shares purchasable under each Option outstanding
under the Automatic Option Grant Program and the Exercise Price payable per
share thereunder shall be proportionately adjusted to reflect the effect of
the Section 4.4 transaction and thereby preclude any dilution or
enlargement of rights under such Option.
5. ADMINISTRATION OF THE PLAN.
--------------------------
5.1 Committees. Except to the limited extent provided below, the Plan
----------
shall be administered solely and exclusively by one or more Committees appointed
by the Board and comprised of two or more members of the Board. The primary
Committee ("Primary Committee") shall be constituted in accordance with any
applicable requirements of Rule 16b-3 or otherwise under Section 16 of the 1934
Act, to allow for the maximum exemption provided thereunder. The Primary
Committee shall have sole and exclusive authority to grant Options under Article
Two to individuals who are at the time either Officers or Directors. Individuals
who are not at the time either Officers or Directors may be granted Options
under Article Two by the Primary Committee, by a secondary Committee of two or
more Board members or by the Board. Administration of the automatic option grant
provisions of Article Three of the Plan shall be self-executing in accordance
with the terms and conditions of such Article Three, and neither
5
<PAGE>
the Board, the Primary Committee nor any secondary Committee shall exercise any
discretionary functions with respect to the Option grants made pursuant to those
provisions of the Plan.
5.2 Procedures. The Board shall appoint the members of each Committee
----------
and may from time to time remove one or more of such members. Vacancies on any
Committee however caused shall be filled by the Board. Each Committee shall
appoint one of its members as chairman and shall hold meetings at such times and
places as it may determine. Acts of a majority of the members of the Committee
at a meeting at which a quorum is present, or acts approved in writing by all of
the Committee members, shall be valid acts of the Committee.
5.3 Interpretation. All questions of interpretation, construction,
--------------
implementation and application of the Plan shall be determined by the Primary
Committee. Such determinations shall be final and binding on all persons. No
member of any Committee or the Board shall be liable for any act or omission
with respect to the Plan or any Option granted or any Shares issued pursuant
hereto, provided such member acted (or failed to act) in good faith.
6. PARTICIPATION.
-------------
6.1 Selection. The applicable Committee shall, from time to time at its
---------
discretion, select (from among the eligible individuals specified below) the
persons who are to be granted Options ("Optionees") under Article Two, establish
the number of Shares subject to each such grant, and determine whether any
Options granted under Article Two are to be Incentive Stock Options or
Nonstatutory Stock Options (except that no Incentive Stock Option may be granted
to any person who is not an Employee).
6.2 Eligibility. The persons eligible to participate in the
-----------
Discretionary Option Grant Program shall be limited to Employees (including
Officers or Directors), non-employee Directors (other than individuals at the
time serving as members of the Primary Committee), whether or not he/she has
previously been in Employee status, and Consultants (including employees of
Consultants). Non-employee Directors serving as members of the Primary Committee
shall not, during such period of service, be eligible to participate in the
---
Discretionary Option Grant Program. However, each non-employee Director serving
on the Primary Committee and each of the other non-employee Directors shall be
eligible to receive automatic Option grants pursuant to the provisions of
Article Three, whether or not he/she has previously been in Employee status.
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
1. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------
1.1 Option Agreements. Discretionary Option grants made by the
-----------------
Committee pursuant to this Article Two shall be evidenced by written stock
option agreements ("Option Agreements") in such form as the Primary Committee
shall from time to time determine. The Option Agreements shall comply with and
be subject to the terms and conditions set forth below. Except as the Committee
authorizing the grant may otherwise determine, any Option granted under this
Article Two shall cease to be
6
<PAGE>
effective unless the Optionee returns a duly-executed Option Agreement to the
Company within sixty (60) days after such agreement is sent to the Optionee.
Waiver of the 60-day return requirement with respect to one or more Optionees
shall not constitute a waiver with respect to any other Optionee. To the extent
an Option is granted to a person who is not an Employee, non-employee Director
or Consultant at the time of grant, such grant shall not become effective until
such person becomes an Employee, Director or Consultant and shall terminate in
the event such person does not become an Employee, Director or Consultant within
the time period specified by the Committee authorizing the grant.
1.2 Minimum Service Period. Except as otherwise specified in Section
----------------------
1.8 of this Article Two, no Option granted under this Article Two shall become
exercisable unless and until the Optionee renders services as an Employee, non-
employee Board member or Consultant for the minimum period which the Committee
authorizing the grant specifies in the Option Agreement, but such Option
Agreement shall not impose upon the Company or its Subsidiaries any obligation
to retain the Optionee as an Employee, non-employee Board member or Consultant
for any period of specific duration.
1.3 Number of Shares. Each Option shall state the number of Shares to
----------------
which it pertains (the "Option Shares") and shall provide for the adjustment
thereof in accordance with the provisions of Section 4.4 of Article One.
1.4 Exercise Price. The following provisions shall be in effect for
--------------
establishing the Exercise Price for each granted Option:
(i) The Exercise Price shall not be less than the Fair Market
Value of the Option Shares on the Grant Date (or on such other date as may
be required by law if the Option is intended to be an Incentive Stock
Option) and shall be set forth in the Option Agreement.
(ii) If any Optionee is on the Grant Date a 10% Stockholder, then
the Exercise Price shall not be less than one hundred and ten percent
(110%) of the Fair Market Value of the Option Shares on the Grant Date.
1.5 Limitation on Exercisability. The aggregate Fair Market Value
----------------------------
(determined as of the respective date or dates of grant) of the Common Stock for
which one or more Options granted to any Optionee under this Article Two (or any
other option plan of the Company or its parent or Subsidiary corporations) may
for the first time become exercisable as incentive stock options under the
Federal tax laws during any one calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000). To the extent the Optionee holds two or
more such Options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability thereof as
incentive stock options under the Federal tax laws shall be applied on the basis
of the order in which such Options are granted.
1.6 Payment. The Purchase Price shall become immediately due upon
-------
exercise of the Option and shall be payable in one of the following forms:
(i) full payment in cash or cash equivalents;
7
<PAGE>
(ii) full payment in shares of Common Stock held by the Optionee
for the requisite period necessary to avoid a charge to the Company's
earnings for financial reporting purposes and valued at Fair Market Value
on the date of exercise;
(iii) full payment through a combination of shares of Common Stock
held for the requisite period necessary to avoid a charge to the Company's
earnings for financial reporting purposes and valued at Fair Market Value
on the date of exercise and cash or cash equivalents;
(iv) in the discretion of the Committee authorizing the grant,
pursuant to a Note executed by the Optionee, provided such individual is an
Employee;
(v) on a partly-paid basis in accordance with the applicable
provisions of Delaware law; or
(vi) full payment through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (I) shall provide irrevocable
written instructions to a Company-designated brokerage firm to effect the
immediate sale of the purchased Shares and to remit to the Company out of
the sale proceeds available on the settlement date, an amount equal to the
Purchase Price payable for the purchased Shares plus all applicable Federal
and state income and employment taxes and (II) shall provide written
directives to the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale
transaction.
The interest rate and other terms and conditions of any Note or partly-
paid issuance shall be determined by the authorizing Committee in its sole
discretion; provided, however, that such Note shall be a full-recourse
obligation of the Optionee and shall not have a maximum term in excess of one
(1) year. The Note shall bear interest at the minimum rate required by the
Federal tax laws to avoid the imputation of interest income to the Company and
compensation income to the Optionee. The Company may require the Optionee to
pledge to the Company any or all of the Shares acquired upon exercise of the
Option as security for payment of the Note and execute an assignment separate
from certificate with respect to the pledged Shares. The Company (or a
pledgeholder selected by it) may retain possession of the stock certificate(s)
representing the pledged Shares and the assignment separate from certificate in
order to perfect such security interest.
1.7 Term and Non-Transferability. Each Option shall state the time or
----------------------------
times when it is to become exercisable for the Option Shares. No Option shall be
exercisable after the expiration of ten (10) years from the Grant Date, and no
Option granted to a 10% Stockholder shall have a term in excess of five (5)
years from the Grant Date. During the lifetime of the Optionee, the Option,
together with any stock appreciation rights pertaining to such Option, shall be
exercisable only by the Optionee and shall not be assignable or transferable. In
the event of the Optionee's death, neither the Option nor any stock appreciation
rights pertaining to such Option shall be transferable by the Optionee other
than by will or by the laws of descent and distribution.
8
<PAGE>
1.8 Acceleration of Vesting/Stock Appreciation Rights.
-------------------------------------------------
(a) Provided (i) a period of six (6) months shall have elapsed from the
Grant Date of the Option and (ii) the Optionee is at the time of exercise an
active Consultant, Employee or Director, then such Optionee shall have the right
(without regard to the normal vesting schedule set forth in the Option
Agreement) to exercise such Option in whole or in part for fully-vested Shares:
(i) Within thirty (30) days following loss of Employee,
Consultant, or Director status due to the consummation of any transaction
which (I) is approved by the stockholders of the Company in which the
Company will cease to be an independent corporation (including, without
limitation, a reverse merger transaction in which the Company becomes the
subsidiary of another corporation) or the sale or other disposition of all
or substantially all of the assets of the Company, and (II) caused the
Optionee to lose his/her status as an Employee, Consultant, or Director
within one year after the closing date of such transaction;
(ii) Within thirty (30) days following the first date on which
there is a change in the composition of the Board effected through one or
more contested elections for Board membership such that less than two
thirds of the individual members of the Board (determined by rounding up to
the next whole number) is comprised of individuals who: (A) were Directors
of the Company on a date three (3) years prior to the date of such change
or (B) were elected or nominated for election as such Directors during the
intervening three (3)-year period by affirmative vote of at least a
majority of those Directors described in clause (A) above who were still in
office as of the date the Board approved such election or nomination;
(iii) Within thirty (30) days after any "person" (as such term is
used in Sections 13(d) and 14(d) of the 1934 Act) or any related group of
persons (other than such a group that includes the Company) acquires
beneficial ownership of (A) 40% or more of the outstanding Common Stock
pursuant to a tender or exchange offer that the Board does not recommend
the stockholders to accept or (B) 50% or more of the outstanding Common
Stock in a single transaction or in a series of related transactions; or
(iv) Within the thirty (30)-day period ending with the effective
date of any dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not the surviving corporation (except
for a transaction the principal purpose of which is to change the state of
the Company's incorporation), but not earlier than the date on which any
required stockholder approval is obtained.
If the accelerated Option is not exercised during the applicable 30-day
period described in subparagraph (i) or (iv) above, then such Option shall
terminate at the close of business on the last day of such 30-day period, unless
such Option is assumed by the successor corporation or its parent. Should an
outstanding Option not qualify for acceleration under subparagraph (i) or (iv),
then such Option shall be subject
9
<PAGE>
to adjustment under Section 3.1 of this Article Two, to the extent such Option
is to continue in effect after the subparagraph (i) or (iv) transaction. The
Primary Committee shall have full power and authority to extend (either at the
time of the Option grant or at any time prior to the acceleration event) the
period of time for which the Option is to remain exercisable following the
occurrence of any acceleration event described in subparagraph (i) through (iii)
above from the thirty (30)-day period specified in such subparagraph to such
greater period of time as the Primary Committee shall deem appropriate.
(b) In the sole discretion of the Primary Committee, a stock
appreciation right ("SAR") may be granted in connection with all or any part of
an Option granted under this Article Two, either at the time of such Option
grant or at any time thereafter during the term of the Option. The SAR shall
give the Optionee the right to surrender all or part of the Option subject to
the SAR during any of the 30-day periods described in subparagraphs (i) through
(iv) of paragraph (a) above (provided and only if a period of at least six (6)
--------------------
months shall have elapsed from the Grant Date of such Option) and thereby to
obtain payment in cash from the Company of an amount equal to the difference
obtained by subtracting the aggregate Exercise Price of the Option Shares
subject to the portion of the Option surrendered from the Fair Market Value of
such Option Shares on the date of such surrender. In the case of an SAR
exercised during either of the 30-day periods described in subparagraphs (i) and
(iv) of paragraph (a) above, "Fair Market Value" shall be deemed to be equal to
the greater of (A) the value of the consideration per share that the Optionee
-------
would have received in connection with the subparagraph (i) or (iv) transaction
as a stockholder of the Company if he/she had exercised the Option (or part
thereof) prior to the consummation of such transaction or (B) the Fair Market
Value determined in good faith by the Primary Committee (as composed on the day
preceding the date of consummation of the subparagraph (i) or (iv) transaction),
taking into consideration all relevant facts and circumstances. When an SAR is
exercised, the underlying Option, to the extent surrendered, shall no longer be
exercisable. An SAR may only be exercised when the Fair Market Value of the
underlying Option Shares exceeds the Exercise Price payable for such shares. For
purposes of Section 4 of Article One of the Plan, the exercise of an SAR shall
be deemed to be an exercise of the underlying Option, and the number of Shares
subject to such Option shall not be available for subsequent Option grants under
the Plan.
1.9 Employment Termination (Except by Death or Permanent Disability).
---------------------------------------------------------------
If an Optionee's Employment Termination occurs for any reason other than death
or Permanent Disability, any outstanding Option held by such Optionee under this
Article Two shall not remain exercisable for more than a ninety (90)-day period
following the date of such Employment Termination; provided, however that under
--------
no circumstances shall such Option be exercisable after the specified expiration
date of the option term. During such limited exercise period, the Option may not
be exercised for more than that number of vested Shares (if any) for which the
Option is exercisable at the time of the Optionee's Employment Termination. Upon
the expiration of such limited exercise period or (if earlier) upon the
expiration of the option term, the Option shall terminate and cease to be
exercisable. In the case of an Optionee who is an Employee, no Employment
Termination shall occur while such Employee is on military leave, sick leave or
other bona fide leave of absence (to be determined in the sole discretion of the
Committee authorizing the grant). The foregoing notwithstanding, in the case of
an Incentive Stock Option, Employment Termination shall be deemed to have
10
<PAGE>
occurred on the ninetieth (90th) day after the Employee ceases active Employee
status, unless the Employee's reemployment rights are guaranteed by statute or
contract.
1.10 Death or Permanent Disability of Optionee. If an Optionee's
-----------------------------------------
Employment Termination occurs by reason of death or Permanent Disability, then
any Option held by such Optionee under this Article Two may be exercised, for up
to that number of vested Shares (if any) for which the Option is exercisable on
the date of such Employment Termination, at any time prior to the earlier of (i)
-------
twelve months (or such shorter period as the Committee may have specified in the
Option Agreement) after the date of the Optionee's death or Permanent Disability
or (ii) the specified expiration date of the option term. In the case of the
Optionee's death, the exercise may be made by the executors or administrators of
the Optionee's estate or by any person or persons who have acquired the Option
directly from the Optionee by bequest or inheritance, but only to the extent
that the Option has not previously been exercised.
1.11 Conditions on Exercise. An Option shall be exercisable at such
----------------------
time or times as the Committee authorizing the grant shall specify in the Option
Agreement and the Shares acquired upon exercise of the Option shall be subject
to such restrictions (including repurchase rights of the Company or first
refusal restrictions) as the Committee may specify in such Option Agreement or
any related stock purchase agreement.
1.12 Stockholder Rights. An Optionee (or a transferee of an Optionee)
------------------
shall have no stockholder rights with respect to any Shares covered by the
Option until such individual shall have exercised the Option, paid the Purchase
Price and been issued a stock certificate for the purchased Shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as may
otherwise be provided in Section 4.4 of Article One.
1.13 Modification, Extension and Renewal of Options. Within the
----------------------------------------------
limitations of the Plan, the Primary Committee may, without the consent of the
Optionees, modify, extend or renew one or more outstanding Options or cancel
outstanding Options (to the extent not previously exercised), whether or not in
exchange for the grant of new Options in substitution therefor.
1.14 Method of Exercise. Subject to all of the provisions hereof, an
------------------
Option may be exercised from time to time in whole or in part (to the extent
exercisable) by delivery of a written notice to the Company setting forth the
number of Shares with respect to which the Option is being exercised. The notice
shall specify the address to which stock certificates for the purchased Shares
should be mailed and shall be accompanied by payment of the Purchase Price
(unless the sale and remittance procedure of clause (vi) of Section 1.6 of this
Article Two is utilized in connection with the Option exercise) and any
documents required pursuant to the last paragraph of such Section 1.6. Within a
reasonable time after receipt of such written notice and payment, the Company
shall cause the stock certificates for the purchased Shares to be delivered to
or on behalf of the Optionee.
1.15 Other Provisions. The Option Agreements authorized under the Plan
----------------
may contain such other provisions not inconsistent with the terms of the Plan as
the Committee authorizing the grant shall deem advisable.
11
<PAGE>
2. CANCELLATION AND NEW GRANT OF OPTION.
------------------------------------
2.1 The Primary Committee shall have the authority to effect, at any
time and from time to time, the cancellation of any or all outstanding Options
under this Article Two and to grant in substitution therefor new Options under
this Article Two covering the same or different numbers of shares of Common
Stock but with an Exercise Price not less than one hundred percent (100%) of the
Fair Market Value of the Option Shares on the new Grant Date (or, in the case of
a 10% Stockholder, not less than one hundred ten percent (110%) of such Fair
Market Value).
3. SPECIAL ADJUSTMENTS.
-------------------
3.1 Transactions. Subject to the acceleration and termination
------------
provisions of Section 1.8(a) of this Article Two and any required stockholder
action, should the Company be a party to any merger or consolidation, each
continuing or assumed Option under this Article Two shall pertain and apply to
the securities which a holder of the number of Shares subject to the Option
would have been entitled to receive in consummation of such merger or
consolidation, with such appropriate adjustment in the Exercise Price as may be
determined by the Primary Committee. Appropriate adjustments shall also be made
to (i) the maximum number and kind of securities which may be issued pursuant to
this Article Two and (ii) the maximum number and kind of securities for which
any one person may be granted Options and separately exercisable stock
appreciation rights per calendar year under the Plan. Upon the dissolution or
liquidation of the Company, each outstanding Option under this Article Two
shall, subject to the acceleration provisions of Section 1.8(a) of this Article
Two, terminate on the effective date of such dissolution or liquidation.
3.2 Limitation.
----------
(a) To the extent that the foregoing adjustments of this Section 3
relate to securities of the Company, such adjustments shall be made by the
Primary Committee, whose determination shall be conclusive and binding on all
persons. Except as expressly provided in Section 4.4 of Article One and Section
1.8 of this Article Two:
(i) the Optionee shall have no rights by reason of any subdivision
or consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock
of any class or by reason of any dissolution, liquidation, merger or
consolidation or spin-off of assets or stock of another corporation; and
(ii) 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
of Shares or Exerecise Price subject to an outstanding Option.
(b) The grant of an Option pursuant to this Article Two shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
12
<PAGE>
4. SPECIAL POWERS.
--------------
4.1 Acceleration. The Committee granting the Option shall have
------------
complete discretion, exercisable either at the time the Option grant is made
under this Article Two or at any time while the Option remains outstanding, to
provide that the Option shall, within the limited period following the
Optionee's Employment Termination during which the Option is to remain
exercisable in accordance with the applicable provisions of Section 1.9 or 1.10
of this Article Two, be exercisable not only with respect to the number of
Option Shares for which it is exercisable at the time of such Employment
Termination but also with respect to one or more subsequent installments of
Option Shares for which the Option would otherwise have become exercisable had
the Optionee's Employment Termination not occurred.
4.2 Extension of Exercise Period. The Committee granting the Option
----------------------------
shall have full power and authority to extend the period of time for which the
Option is to remain exercisable following the Optionee's Employment Termination
from the applicable period specified in Section 1.9 or 1.10 of this Article Two
to such greater period of time as the Committee shall deem appropriate;
provided, however, that in no event shall such Option be exercisable after the
specified expiration date of the option term.
ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
1. ELIGIBILITY.
-----------
1.1 Eligible Optionees. The individuals eligible to receive an
------------------
automatic Option grant pursuant to the provisions of this Article Three shall be
limited to the following:
(i) Each individual who is elected or reelected as a non-employee
member of the Board at any Annual Stockholders Meeting beginning with the
1998 Annual Stockholders Meeting; and
(ii) Each individual who is appointed or elected as a non-employee
Board member at any time after the 1998 Annual Stockholders Meeting but
other than at an Annual Stockholders Meeting.
An individual who satisfies the criteria of clause (i) or (ii) above
shall be designated an Eligible Board Member for purposes of this Article Three.
1.2 Limitation. Except for the Option grants to be made pursuant to
----------
the provisions of this Automatic Option Grant Program and any other grants or
issuances otherwise permitted without loss of disinterested person status under
SEC Rule 16b-3(c)(2)(i) under the 1934 Act, non-employee Directors serving as
members of the Primary Committee shall not, during such period of service, be
---
eligible to receive any additional Option grants or Share issuances under this
Plan or any other stock plan of the Company or its Subsidiary corporations.
13
<PAGE>
2. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS.
-----------------------------------------------
2.1 Grant Date. On the date of each Annual Stockholders Meeting,
----------
beginning with the 1998 Annual Stockholders Meeting, each individual who is at
such time elected or re-elected as an Eligible Board Member shall automatically
be granted, on the date of such Annual Stockholders Meeting, a Nonstatutory
Stock Option to purchase 3,000 shares of Common Stock upon the terms and
conditions of this Article Three. Should an individual be appointed or elected
as an Eligible Board Member at any time after the 1998 Annual Stockholders
Meeting but other than at an Annual Stockholders Meeting, then such individual
shall automatically be granted, at the time of such election or appointment, a
Nonstatutory Stock Option to purchase 3,000 shares of Common Stock upon the
terms and conditions of this Article Three; provided, however, that any such
individual shall not be eligible to receive his/her next automatic Option grant
under this Article Three until the first Annual Stockholders Meeting which is at
least six (6) months after the date of the initial automatic Option grant made
to such individual. The 3000-share limitation per annual automatic Option grant
to each Eligible Board Member shall be subject to periodic adjustment pursuant
to the applicable provisions of Section 4.4 of Article One. The number of shares
of Common Stock for which a Nonstatutory Stock Option is granted to an Eligible
Board Member under this Automatic Option Grant Program with respect to a
particular election, reelection, or appointment of such Eligible Board Member to
the Board shall be reduced, on a share-for-share basis, by the number of shares
of Common Stock, if any, for which a Nonstatutory Stock Option is granted to
that Eligible Board Member with respect to that particular election, reelection
or appointment to the Board under the Company's 1990 Stock Option/Stock Purchase
Plan.
2.2 Exercise Price. The Exercise Price per share shall be equal to one
--------------
hundred percent (100%) of the Fair Market Value per share of Common Stock on the
automatic grant date.
2.3 Payment. The Exercise Price shall become immediately due upon
-------
exercise of the Option and shall be payable in one of the alternative forms
specified below:
(i) full payment in cash or check made payable to the Company's
order; or
(ii) full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Company's reported earnings and
valued at Fair Market Value on the Exercise Date (as such term is defined
below); or
(iii) full payment in a combination of shares of Common Stock held
for the requisite period necessary to avoid a charge to the Company's
reported earnings and valued at Fair Market Value on the Exercise Date and
cash or check payable to the Company's order; or
(iv) full payment through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (I) shall provide irrevocable
written instructions to a Company-designated brokerage firm to
14
<PAGE>
effect the immediate sale of the purchased Shares and to remit to the
Company out of the sale proceeds available on the settlement date, an
amount equal to the aggregate Exercise Price payable for the purchased
Shares and (II) shall provide written directives to the Company to deliver
the certificates for the purchased Shares directly to such brokerage firm
in order to complete the sale transaction.
The Exercise Date shall be the date on which written notice of the
exercise of the Option is delivered to the Company. Except to the extent the
sale and remittance procedure of clause (iv) above is utilized in connection
with such exercise of the Option, payment of the Exercise Price for the
purchased Shares must accompany the exercise notice.
2.4 Option Term. Each granted Option under this Article Three shall
-----------
have a maximum term of ten (10) years measured from the automatic grant date.
2.5 Exercisability. The Option shall become exercisable for the Option
--------------
Shares in a series of three (3) successive equal annual installments upon the
Optionee's completion of each year of Board service over the three (3)-year
period measured from the automatic grant date.
2.6 Non-Transferability. During the lifetime of the Optionee, the
-------------------
Option, together with any stock appreciation rights pertaining to such Option,
shall be exercisable only by the Optionee and shall not be assignable or
transferable by the Optionee, except for a transfer of the Option by will or by
the laws of descent and distribution following the Optionee's death.
2.7 Effect of Termination of Board Service.
--------------------------------------
(a) Should the Optionee cease to serve as a Board member for any reason
(other than death) while holding one or more automatic Option grants under this
Automatic Option Grant Program, then such Optionee shall have up to a six (6)
month period following the date of such cessation of Board service in which to
exercise each such Option for any or all of the shares of Common Stock for which
the Option is exercisable at the time Board service ceases.
(b) Should the Optionee die while holding one or more outstanding
automatic Option grants under this Automatic Option Grant Program, then each
such Option may subsequently be exercised, for any or all of the shares of
Common Stock for which the Option is exercisable at the time of the Optionee's
cessation of Board service, by the personal representative of the optionee's
estate or by the person or persons to whom the Option is transferred pursuant to
the optionee's will or in accordance with the laws of descent and distribution.
Any such exercise must, however, occur within twelve (12) months after the date
of the Optionee's death.
(c) In no event shall any Option granted under this Automatic Option
Grant Program remain exercisable after the specified expiration date of the ten
(10)-year option term. Upon the expiration of the applicable exercise period
specified in subparagraphs (a) and (b) above or (if earlier) upon the expiration
of the ten (10) year option term, such Option shall terminate and cease to be
exercisable.
15
<PAGE>
2.8 Stockholder Rights. The holder of an automatic Option grant under
------------------
this Automatic Option Grant Program shall have none of the rights of a
stockholder with respect to any Shares covered by such Option until such
individual shall have exercised the Option, paid the Exercise Price and been
issued a stock certificate for the purchased Shares. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as may otherwise be provided
in Section 4.4 of Article One.
2.9 Remaining Terms. The remaining terms and conditions of each
---------------
automatic Option grant shall be as set forth in the prototype Nonstatutory Stock
Option Agreement attached as Exhibit A to this Plan.
3. CHANGE IN CONTROL.
-----------------
3.1 Acceleration of Vesting.
-----------------------
(a) Each automatic Option grant which has been outstanding under this
Automatic Option Grant Program for a period of at least six (6) months and which
is not otherwise at the time fully exercisable for all the Option Shares shall
automatically accelerate in full immediately prior to the specified effective
date for any Change in Control event identified below and shall thereupon become
exercisable for any or all of the Shares at the time subject to such Option.
(b) For purposes of this Automatic Option Grant Program, a Change in
Control shall be deemed to occur upon:
(i) the consummation of any transaction which (I) is approved by
the stockholders of the Company in which the Company will cease to be an
independent corporation (including, without limitation, a reverse merger
transaction in which the Company becomes the subsidiary of another
corporation) or the sale or other disposition of all or substantially all
of the assets of the Company, and (II) caused the Optionee to lose his/her
status as an Eligible Board Member within one year after the closing date
of the transaction;
(ii) the first date on which there is a change in the composition
of the Board effected through one or more contested elections for Board
membership such that less than two thirds of the individual members of the
Board (determined by rounding up to the next whole number) is comprised of
individuals who: (A) were Directors of the Company on a date three (3)
years prior to the date of such change or (B) were elected or nominated for
election as such Directors during the intervening three (3)-year period by
affirmative vote of at least a majority of those Directors described in
clause (A) above who were still in office as of the date the Board approved
such election or nomination;
(iii) the acquisition by any "person" (as such term is used in
Sections 13(d) and 14(d) of the 1934 Act) or any related group of persons
(other than such a group that includes the Company) of beneficial ownership
of (A) 40% or more of the outstanding Common Stock pursuant
16
<PAGE>
to a tender or exchange offer that the Board does not recommend the
stockholders to accept or (B) 50% or more of the outstanding Common Stock
in a single transaction or in a series of related transactions; or
(iv) any dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not the surviving corporation (except
for a transaction the principal purpose of which is to change the state of
the Company's incorporation), but not earlier than the date on which any
required stockholder approval is obtained.
Each accelerated Option under this Section 3.1 shall, except to the
extent assumed by the successor entity, terminate on the effective date of the
subparagraph (i) or (iv) Change in Control event or thirty (30) days after the
occurrence of the subparagraph (ii) or (iii) Change in Control event (other than
a subparagraph (iii) Change in Control triggering the immediate cancellation of
the Option under Section 3.2(a)) and shall thereupon cease to be exercisable.
Options which do not qualify for acceleration upon the occurrence of a
subparagraph (i) or (iv) Change in Control event shall be subject to adjustment
under Section 5.1 of this ArticleThree, to the extent they continue in effect or
are assumed in connection with that Change in Control event.
(c) The automatic Option grants outstanding under this Automatic Option
Grant Program shall in no way affect the right of the Company to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
3.2 Stock Appreciation Right.
------------------------
(a) Upon the consummation of a Change in Control event of the type
specified in clause (A) of subparagraph (iii) of Section 3.1(b) of this Article
Three, each automatic Option granted under this Automatic Option Grant Program
and outstanding for a period of at least six (6) months shall, to the extent
such Option is at the time held by an Eligible Board Member, be automatically
canceled, and such Eligible Board Member shall in return receive an appreciation
distribution from the Company in an amount equal to the excess of (i) the Change
in Control Price of the shares of Common Stock at the time subject to the
cancelled Option over (ii) the aggregate Exercise Price payable for such Shares.
For purposes of such appreciation distribution, the Change in Control Price per
share shall be deemed to be equal to the greater of (a) the Fair Market Value
-------
per share on the date of the Option cancellation or (b) the highest reported
price per share paid by the tender offeror in effecting the hostile Change in
Control. In no event, however, shall any Option be cancelled pursuant to the
foregoing provisions of this subparagraph, unless more than fifty percent (50%)
of the Common Stock which is acquired in such hostile Change in Control is
purchased from persons other than officers or directors of the Company subject
to Section 16(b) of the 1934 Act.
(b) All appreciation distributions under this Section 3.2 shall be made
entirely in cash, and neither the approval of the Primary Committee or the Board
shall be required in connection with the option surrender or option cancellation
and the resulting cash distribution. The shares of Common Stock subject to each
surrendered or cancelled Option shall not be available for subsequent issuance
under this Plan. ---
17
<PAGE>
4. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS.
-------------------------------------------
4.1 Limited Amendments. The provisions of this Automatic Option Grant
------------------
Program, together with the outstanding option grants under such program, may not
be amended more than once every six (6) months other than to comply with
applicable Federal income tax laws and regulations.
5. SPECIAL ADJUSTMENTS.
-------------------
5.1 Transactions. Subject to the acceleration and termination
------------
provisions of Section 3.1(a) of this Article Three, should the Company be a
party to any merger or consolidation, each continuing or assumed Option under
this Article Three shall pertain and apply to the securities which a holder of
the number of Shares subject to the Option would have been entitled to receive
in consummation of such merger or consolidation, with such appropriate
adjustment in the Exercise Price as may be necessary to preclude the dilution or
enlargement of benefits thereunder. Appropriate adjustments shall also be made
to the aggregate number and kind of securities which may subsequently be issued
pursuant to this Article Three. Upon the dissolution or liquidation of the
Company, each outstanding Option under this Article Three shall, subject to the
acceleration provisions of Section 3.1(a) of this Article Three, terminate on
the effective date of such dissolution or liquidation.
ARTICLE FOUR
MISCELLANEOUS
1. REQUIREMENTS OF LAW.
-------------------
1.1 Legality of Issuance. The Company shall not be required to grant
--------------------
any Option under the Plan or to issue or sell Shares upon the exercise of any
such Option and shall not have any liability for its failure to do so if, in the
opinion of the Company and the Company's counsel, such grant, issuance or sale
could reasonably constitute a violation by the Company of any provision of law,
including (without limitation) any provision of the 1933 Act or any state
securities law.
Restrictions on Transfer; Representations of Optionee. Regardless of
-----------------------------------------------------
whether the grant of Options and the sale of Shares pursuant thereto have
been registered under the 1933 Act or have been registered or qualified
under the securities laws of any state, the Company may impose restrictions
upon the sale, pledge or other transfer of the granted Options or the
issued Shares (including the placement of appropriate legends on stock
certificates) if, in the judgment of the Company and the Company's counsel,
such restrictions are necessary or desirable in order to achieve compliance
with the provisions of the 1933 Act, the securities laws of any state, or
any other law. In the event that the grant of Options or the sale of
Shares is not registered under the 1933 Act, but an exemption is available
which requires an investment representation or other representations, each
Optionee will be required to represent that the granted Option or the
Shares issued pursuant thereto are being acquired for investment and not
with a view to the sale or distribution thereof, and to
18
<PAGE>
make such other representations as are deemed necessary or appropriate by
the Company and the Company's counsel. Any determination by the Company and
the Company's counsel in connection with any of the matters set forth in
this Section 1.2 shall be final and binding on all persons.
1.2 Registration or Qualification of Securities. The Company may, but
-------------------------------------------
shall not be obligated to, register, perfect an exemption for, or qualify the
grant of Options and the issuance of Shares under the 1933 Act or any other
applicable law, or list the Shares on any securities exchange. The Company shall
not be obligated to take any affirmative action in order to cause the grant of
Options or the issuance and sale of Shares pursuant thereto to comply with any
securities laws.
1.3 Exchange of Certificates. If, in the opinion of the Company and
------------------------
the Company's counsel, any legend placed on a stock certificate representing
Shares is no longer required, the holder of such certificate shall be entitled
to exchange the certificate for a certificate representing the like number of
Shares lacking the legend.
2. TAX WITHHOLDING.
---------------
2.1 Withholding Requirements. The Company's obligation to deliver
------------------------
Shares upon the exercise or surrender of Options or SARs under Article Two or
Article Three shall be subject to the satisfaction of all applicable Federal,
state and local income and employment tax withholding requirements.
2.2 Withholding of Shares. The Primary Committee may, in its
---------------------
discretion and upon such terms and conditions as it may deem appropriate
(including the applicable safe-harbor provisions of SEC Rule 16b-3 or any
successor rule or regulation) provide any or all Optionees with the election to
have the Company withhold, from the Shares purchased pursuant to Articles Two of
the Plan, a portion of such Shares with an aggregate Fair Market Value equal to
the designated percentage (any multiple of 5% specified by the Optionee) of the
Federal and state income and employment taxes ("Taxes") incurred in connection
with the acquisition or subsequent vesting of such Shares. In lieu of such
direct withholding, Optionees may also be granted the right to deliver already
outstanding shares of Common Stock to the Company in satisfaction of such Taxes.
The withheld or delivered shares of Common Stock shall be valued at the Fair
Market Value on the applicable determination date for such Taxes.
3. AMENDMENT OR TERMINATION OF THE PLAN.
------------------------------------
3.1 Amendment. The Board may, from time to time, amend or modify the
---------
Plan; provided, however that any such amendment shall not adversely affect
rights and obligations with respect to Options or unvested Shares at the time
outstanding under the Plan and any amendment to the Automatic Option Grant
Program shall be in compliance with the limitation of Section 4.1 of Article
Three. In addition, no such revision or amendment shall:
(a) Increase the maximum number of Shares issuable in the aggregate
under this Plan, except for permissible adjustments under Sections 4.1 and 4.4
of Article One, Section 3.1 of Article Two and Section 5.1 of Article Three;
19
<PAGE>
(b) Increase the maximum number of Shares for which any one person may
be granted Options and separately exercisable stock appreciation rights per
calendar year under this Plan, except for permissible adjustments under Section
4.4 of Article One, Section 3.1 of Article Two and Section 5.1 of Article Three;
(c) Decrease the authority of the Primary Committee;
(d) Materially modify the eligibility requirements for the grant of
Options under the Plan;
(e) Materially increase the benefits accruing to Optionees under the
Plan; or
(f) Except upon the requisite stockholder approval, amend this Section
3.1 to defeat its purpose.
3.2 Termination. This Plan shall terminate on May 20, 2008. No Options
-----------
shall be granted after that date, but any Options outstanding on that date shall
not be affected by such termination.
4. EMPLOYMENT RIGHTS.
-----------------
The fact that a person is eligible for or receives an Option under
Article Two of the Plan shall not affect the right of the Company or any
Subsidiary (as applicable) to terminate such person's relationship with the
Company or such Subsidiary as an Employee or Consultant, which right is hereby
reserved, nor the right of the stockholders of the Company or any Subsidiary (as
applicable) to terminate such person's relationship to the Company or such
Subsidiary as a Director.
5. APPLICATION OF FUNDS.
--------------------
Any cash proceeds received by the Company from the sale of Common
Stock under the Plan will be used for general corporate purposes.
6. EFFECTIVE DATE.
--------------
The Plan is effective as of May 20, 1998, subject to stockholder
approval at the 1998 Annual Stockholders Meeting. No Options shall be granted
under this Plan unless and until the Plan has been approved by the stockholders
of the Company at the 1998 Annual Stockholders Meeting. If this Plan is not
approved by the stockholders of the Company at the 1998 Annual Stockholders
Meeting, the entire Plan shall be null and void.
7. APPLICABLE LAW.
--------------
The provisions of the Plan relating to the exercise of Options granted
hereunder and any subsequent vesting of the issued Shares shall be subject to
and construed under the laws of the State of Utah without resort to that state's
conflict-of-laws rules.
20
<PAGE>
OEC MEDICAL SYSTEMS, INC.
1993 EMPLOYEE INCENTIVE
STOCK ACQUISITION PLAN
(AS AMENDED AND RESTATED EFFECTIVE MARCH 31, 1998)
SECTION 1. PURPOSE.
The Plan has been established to provide Eligible Employees with an
opportunity to increase their proprietary interest in the Company's success by
purchasing Stock directly from the Company on favorable terms and to pay for
such purchases through payroll deductions. The Plan is intended to qualify
under section 423 of the Code. The Plan is the successor to the Company's
Employee Incentive Stock Acquisition Plan (the "Original Plan") which was
terminated on June 30, 1993, and no further shares of Stock will be issuable
under the Original Plan.
SECTION 2. DURATION; PARTICIPATION PERIODS; SHARES AUTHORIZED.
The Plan shall be in effect from January 1, 1994 to December 31, 2002.
While the Plan is in effect, there shall be eighteen (18) Participation Periods
of six months each commencing on January 1 and July 1 of each calendar year.
The maximum number of shares of Stock available for purchase over the term of
the Plan shall be 400,000 shares, subject to adjustment as provided in Section
11. Such share reserve is comprised of (i) the 175,000 shares originally
reserved for issuance under the Plan plus (ii) an additional increase of 100,000
shares authorized by the Board on March 26, 1996, and (iii) an additional
increase of 125,000 shares authorized by the Board on March 31, 1998, subject to
stockholder approval at the 1998 Annual Stockholders Meeting.
SECTION 3. ADMINISTRATION.
The Plan shall be administered by the Committee, which shall have full
authority to interpret and construe any provision of the Plan and to adopt such
rules and regulations for administering the Plan as it may deem necessary in
order to comply with the requirements of Section 423 of the Code. Decisions of
the Committee shall be final and binding on all parties who have an interest in
the Plan. No member of the Board or of the Committee shall be liable to any
Eligible Employee, or to any person whose rights derive from an Eligible
Employee, for any act or omission made in good faith.
SECTION 4. ELIGIBILITY AND PARTICIPATION.
(a) Each Eligible Employee may elect to become a Participant in the Plan
for a Participation Period by executing the enrollment form prescribed for such
purpose by the Committee. The enrollment form shall be filed with the Company
not later than the 10th working day prior to the commencement of the
Participation Period. The Eligible Employee shall designate on the enrollment
form the percentage of his or her Compensation which he or she elects to have
withheld for the purchase of Stock, which shall be a whole percentage of the
Eligible Employee's Compensation, but not less than two percent (2%) nor more
than twenty percent (20%).
<PAGE>
(b) By enrolling in the Plan, a Participant is given the right to
purchase the maximum number of whole shares of Stock which can be purchased with
the amount of the Participant's Compensation which has been withheld during the
Participation Period; provided, however, that with respect to any
--------
Participation Period, no Participant shall purchase more than a maximum of 2,000
shares of Stock nor shares of Stock in excess of the amounts set forth in
Section 12.
SECTION 5. EMPLOYEE CONTRIBUTIONS.
A Participant shall purchase shares of Stock by means of payroll
deductions. Payroll deductions as designated by the Participant pursuant to
Section 4(a) shall commence with the first payroll period in the Participation
Period and shall continue in each subsequent payroll period during participation
in the Plan. If a Participant wishes to change the rate of payroll withholding,
he or she may do so by filing a new enrollment form with the Company not later
than the 10th working day prior to the commencement of the Participation Period
for which such change is to be effective.
SECTION 6. PLAN ACCOUNTS; PURCHASE OF SHARES.
(a) The Company shall maintain a Plan Account on its books in the name
of each Participant. As of the close of each payroll period in a Participation
Period, the amount deducted from the Participant's Compensation shall be
credited to the Participant's Plan Account. No interest shall be credited to
Plan Accounts.
(b) As of the last day of each Participation Period, the Participant is
deemed to have elected to purchase the number of whole shares of Stock
calculated in accord with this Subsection (b), unless the Participant has
previously elected to withdraw from the Plan in accord with Section 8. The
amount then in the Participant's Plan Account shall be divided by the Purchase
Price, and the number of whole shares which results (subject to the limitations
described in Section 4(b) and Subsection (c) below) shall be purchased from the
Company with the funds in the Participant's Plan Account. Share certificates
representing the number of shares of Stock so purchased shall be issued and
delivered to the Participant as soon as reasonably practicable after the close
of the Participation Period.
(c) In the event that the aggregate number of shares which all
Participants elect to purchase during the Participation Period exceeds the
number of shares remaining available for issuance under the Plan, then the
number of shares to which each Participant is entitled shall be determined by
multiplying the number of shares available for issuance by a fraction, the
numerator of which is the number of shares which such Participant has elected to
purchase and the denominator of which is the number of shares which all
Participants have elected to purchase.
(d) Any amount remaining in the Participant's Plan Account which
represents the Purchase Price for a fractional share shall be carried over in
the Participant's Plan Account to the next Participation Period. Any amount
remaining in the Participant's Plan Account which represents the Purchase Price
for whole shares which could not be purchased under Section 4(b) or Subsection
(c) above shall be refunded to the Participant in cash, without interest.
2
<PAGE>
SECTION 7. PURCHASE PRICE.
The Purchase Price for each share of Stock shall be the lesser of (a)
------
eighty-five percent (85%) of the Fair Market Value of such share on the last
trading day before the commencement of the Participation Period, or (b) eighty-
five percent (85%) of the Fair Market Value of such share on the last trading
day in the Participation Period.
SECTION 8. WITHDRAWAL FROM THE PLAN.
A Participant may elect to withdraw from the Plan at any time before
the last day of a Participation Period by filing the prescribed form with the
Company, and payroll deductions shall cease as soon as reasonably practicable
thereafter. Within 45 days after the close of such Participation Period, the
amount credited to the Plan Account of any Participant who has withdrawn from
the Plan shall be refunded to him or her in cash, without interest. A
Participant who has withdrawn from the Plan shall not be a Participant in future
Participation Periods, unless he or she again enrolls under Section 4.
SECTION 9. EFFECT OF TERMINATION OF EMPLOYMENT.
Termination of employment as an Eligible Employee for any reason,
including death, shall be treated as an automatic withdrawal from the Plan under
Section 8. Such withdrawal shall be deemed to occur as of the date when
employment terminates. A transfer from one Participating Company to another
shall not be treated as a termination of employment.
SECTION 10. RIGHTS NOT TRANSFERABLE.
The rights of any participant under the Plan, or any Participant's
interest in any Stock or moneys to which he or she may be entitled under the
Plan, shall not be transferable by voluntary or involuntary assignment or by
operation of law, or in any other manner other than by will or the laws of
descent and distribution. If a Participant in any manner attempts to transfer,
assign or otherwise encumber his or her rights or interest under the Plan, other
than by will or the laws or descent and distribution, then such act shall be
treated as an election by the Participant to withdraw from the Plan under
Section 8.
SECTION 11. RECAPITALIZATIONS, ETC.
(a) The class and maximum number of securities offered under the Plan,
the class and maximum number of securities purchasable per Participant during
any one Participation Period and the class and number of securities and the
Purchase Price per share in effect under each outstanding purchase right under
the Plan shall be adjusted proportionately by the Committee for any increase or
decrease in the number of outstanding shares of Stock resulting from a
subdivision or consolidation of shares, the payment of a stock dividend, or any
recapitalization or other increase or decrease in such shares effected without
receipt or payment of consideration by the Company. The foregoing
notwithstanding, no adjustment shall be made if it would cause the Plan to fail
to meet the requirements of Section 423 of the Code.
(b) In the event of a dissolution or liquidation of the Company, or a
merger, consolidation or reorganization to which the Company is a constituent
3
<PAGE>
corporation, the Plan shall terminate, unless the plan of merger, consolidation
or reorganization provides otherwise, and all amounts which have been paid
toward the Purchase Price of Stock hereunder shall be refunded without interest.
The Plan shall in no event be construed to restrict in any way the Company's
right to undertake a dissolution, liquidation, merger, consolidation or other
reorganization.
SECTION 12. LIMITATION ON STOCK OWNERSHIP.
Any other provision hereof to the contrary notwithstanding, the
following limitations on acquisition of shares of Stock shall apply:
(a) No Participant shall be granted a right to purchase Stock under the
Plan if such Participant, immediately after his or her election to purchase such
Stock, would own stock possessing more than five percent (5%) of the total
combined voting power or value of all classes of stock of the Company (or any
parent or Subsidiary of the Company). For purposes of this Section 12(a), each
Participant shall be considered to own any stock which he or she has a right or
option to purchase under this or any other plan, and each Participant shall be
considered to have the right to purchase 2,000 shares of Stock under this Plan
with respect to each Participation Period.
(b) No Participant shall be granted a right to purchase Stock under the
Plan if such Participant's rights to purchase stock under this and all other
qualified employee stock purchase plans of the Company or any parent or
Subsidiary of the Company would accrue at a rate which exceeds $25,000 of the
Fair Market Value of such stock (determined at the time when such right is
granted) for each calendar year for which such right is outstanding at any time.
Ownership of stock shall be determined after applying the attribution rules of
Section 424(d) of the Code. For purposes of this Section 12(b), the right to
acquire Stock under each purchase right shall accrue as and when the purchase
right first becomes exercisable on the last day of the Participation Period for
which such right is granted.
SECTION 13. NO RIGHTS AS AN EMPLOYEE.
Nothing in the Plan shall be construed to give any person the right to
remain in the employ of a Participating Company or to affect the right of the
Participating Company to terminate the employment of any person at any time,
with or without cause.
SECTION 14. NO RIGHTS AS A SHAREHOLDER.
A Participant shall have no rights as a shareholder with respect to
any shares of Stock which he or she may have a right to purchase under the Plan
until shares are actually purchased on the Participant's behalf in accordance
with Section 6.
SECTION 15. AMENDMENT OR DISCONTINUANCE.
The Board shall have the right to amend, modify or terminate the Plan
at any time and without notice, provided that no change in the class of
employees eligible to participate in the Plan or the benefits accruing to
Participants under the Plan and, except as provided in Section 11, no increase
in the aggregate number of shares of Stock to be issued under the Plan or the
maximum number of shares of Stock purchasable per
4
<PAGE>
Participant during any one Participation Period shall be effective, unless
approved by the vote of the stockholders of the Company in the manner provided
in Section 16.
SECTION 16. SHAREHOLDER APPROVAL.
The Plan and all elections to purchase shares hereunder shall be void,
and all amounts which have been paid toward the Purchase Price of Stock
hereunder shall be refunded without interest, unless the Plan is approved and
ratified by the holders of a majority of the Company's outstanding shares within
12 months before or after the date when the Plan is adopted by the Board. The
provisions of Section 6 notwithstanding, no stock certificates shall be issued
to any Participant until the Plan has been approved and ratified in the above
manner.
The Plan was amended effective March 26, 1996 in order to increase the
reserve of Stock available for issuance under the Plan by an additional 100,000
shares. The Plan was amended again by the Board on March 31, 1998 in order to
increase the reserve by an additional 125,000 shares. Such 125,000 share
increase is subject to stockholder approval at the 1998 Annual Stockholders
Meeting, and no shares of Stock shall be issued under the Plan on the basis of
that increase unless and until such stockholder approval is obtained.
SECTION 17. DEFINITIONS.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee of two or more non-employee Board
members appointed from time to time by the Board to administer the Plan, as
provided in Section 3(b).
(d) "Company" means OEC Medical Systems, Inc., a Delaware corporation
which is the successor to Diasonics, Inc.
(e) "Compensation" means the aggregate cash compensation paid to a
Participant by the Participating Companies, including cash bonuses, commissions,
shift differentials, overtime and similar cash payments, but excluding income
recognized in connection with the exercise of stock options and other noncash
items, all as determined by the Committee.
(f) "Eligible Employee" means any employee of a Participating Company.
(g) "Fair Market Value" shall mean the market price of Stock, determined
by the Committee as follows:
(i) If Stock is traded on a stock exchange on the date in question,
then the Fair Market Value shall be equal to the closing price reported by
the applicable composite-transaction report for such date.
5
<PAGE>
(ii) If the foregoing provision is inapplicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deemed appropriate.
In all cases, the determination of Fair Market Value by the Committee
shall be conclusive and binding on all persons.
(h) "Participant" means an Eligible Employee who elects to participate in
the Plan, as provided in Section 4(a).
(i) "Participating Company" means the Company and such present or future
Subsidiaries as the Board shall designate.
(j) "Participation Period" means a period during which contributions may be
made toward the purchase of Stock under the Plan, as determined pursuant to
Section 2.
(k) "Plan" means this OEC Medical Systems, Inc. 1993 Employee Incentive
Stock Acquisition Plan.
(l) "Plan Account" means the account established for each Participant
pursuant to Section 6.
(m) "Purchase Price" means the price at which Participants may purchase
Stock under the Plan, as determined pursuant to Section 7.
(n) "Stock" means the Common Stock of the Company, par value $0.01 per
share.
(o) "Subsidiary" means a corporation 50 percent or more of the total
combined voting power of all classes of stock of which is owned, directly or
indirectly, by the Company.
6
<PAGE>
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
SERVICE OPTION
--------------
AGREEMENT made as of the ____ day of ______, 199_ by and between OEC
Medical Systems, Inc., a Delaware corporation (hereinafter called "Company") and
___________________ (herein after called "Optionee").
WITNESSETH:
RECITALS
- --------
A. The Company's 1998 Stock Option Plan (the "Plan") has been
implemented for the purpose of providing equity incentives to select Employees
(including Officers and Directors) and Consultants of the Company and the
Company's Subsidiaries in order to encourage such persons to remain in the
employ or service of the Company or the Company's Subsidiaries.
B. Optionee is an individual who is to render valuable services
to the Company or its Subsidiaries, and this Agreement is executed pursuant to,
and is intended to carry out the purposes of, the Plan in connection with the
Company's grant of a stock option to Optionee.
C. The granted option is intended to be a non-qualified stock
option which does NOT meet the requirements of Section 422 of the Internal
Revenue Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee a
---------------
non-qualified stock option (the "Option") under the Plan to purchase all or any
part of an aggregate of ______ shares of the Company's common stock, $0.01 par
value per share ("Common Stock"), upon the terms and conditions set forth herein
and in the Plan, with the terms and conditions of the Plan hereby incorporated
into this Agreement by reference. Except to the extent otherwise specifically
provided in this Agreement, all capitalized terms shall have the meaning set
forth in the Plan.
2. EFFECTIVE DATE. The effective date and grant date of this Option
--------------
are _____________, 199_ (the "Effective Date").
3. EXERCISE PRICE. The exercise price for purchase of the shares
--------------
of Common Stock covered by this Option (the "Option Shares") shall be $_______
per share (the "Option Price"), the closing selling price per share of the
Common Stock on
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
1
<PAGE>
the New York Stock Exchange on the Effective Date, as reported in the Wall
Street Journal.
4. OPTION TERM. This Option shall terminate on the first to
-----------
occur of (i) the expiration of the applicable exercise period under Paragraph 7
following the date of the Optionee's Employment Termination or (ii) the
expiration date of the ten-year period measured from the Effective Date (the
"Expiration Date").
5. ADJUSTMENTS/STOCKHOLDER RIGHTS.
------------------------------
A. The number of Option Shares and the Option Price payable per
share may be adjusted by the Plan Administrator upon certain circumstances in
accordance with the provisions of Section 4.4 of Article One and Section 3.1 of
Article Two of the Plan.
B. Optionee shall have no stockholder rights with respect to
any Option Shares until Optionee shall have exercised the Option, paid the
Option Price and been issued a stock certificate for the purchased Option
Shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property), distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as may otherwise be provided in Section 4.4 of Article One and Section
3.1 of Article Two of the Plan.
6. EXERCISE OF OPTIONS.
-------------------
Provided Optionee continues to render services as an Employee,
Director or Consultant, this Option shall become exercisable for the Option
Shares in a series of successive quarterly installments in accordance with the
following schedule:
[[ - Upon the Optionee's completion of each three (3)-month period
of service as an Employee, Director or Consultant during the forty-eight (48)
month period measured from __________ the Effective Date, the Option shall
become exercisable for 6.25% of the total number of Option Shares.]]
Each installment of Option Shares for which this Option becomes
exercisable shall accumulate, and the Option shall remain exercisable for such
accumulated installments until the Expiration Date or sooner termination of this
Option pursuant to Paragraph 7 of this Agreement.
7. EXERCISE AFTER EMPLOYMENT TERMINATION. This Option shall
-------------------------------------
not become exercisable for any additional Option Shares following the Optionee's
Employment Termination and may only be exercised after such Employment
Termination as follows:
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
2
<PAGE>
A. If the Optionee's Employment Termination occurs for any
reason other than death or Permanent Disability, then this Option may be
exercised, for one or more of the Option Shares (if any) for which it was
exercisable on the date of such Employment Termination, only during the ninety
(90)-day period following such date. Upon the expiration of such period, this
Option shall terminate and cease to be exercisable.
B. If the Optionee's Employment Termination occurs by reason
of death or Permanent Disability, then this Option may be exercised, for one or
more of the Option Shares (if any) for which it was exercisable on the date of
such Employment Termination (less any Option Shares subsequently purchased by
the Optionee prior to death), only during the twelve (12)-month period following
such date. Upon the expiration of such period, this Option shall terminate and
cease to be exercisable.
C. Notwithstanding subparagraphs A and B above, in no event
may this Option be exercised at any time after the Expiration Date.
D. In the event of the Optionee's death, this Option may be
exercised, subject to the limitations of subparagraphs B and C above, by the
executors or administrators of the Optionee's estate or by any person or persons
who have acquired the Option directly from the Optionee by bequest or
inheritance.
8. METHOD OF EXERCISE.
------------------
A. Optionee may exercise the Option for any or all of the
Option Shares for which the Option is at the time exercisable pursuant to the
provisions of Paragraphs 6 and 7 by giving the Company written notice of such
exercise in which there is specified the number of Option Shares as to which the
Option is so exercised. Such notice shall be accompanied by payment to the
Company, either in cash or by check in form satisfactory to the Company, of an
amount equal to the sum of the Option Price of the purchased shares of Common
Stock plus any amounts required to be withheld pursuant to Paragraph 15.
B. The Option Price may also be paid in one of the alternative
forms specified below, and such form of payment must also accompany the notice
of exercise (unless the sale and remittance procedure of clause (iii) below is
utilized):
(i) in whole or in part with shares of Common Stock delivered
to the Company in accordance with the terms of the Plan,
(ii) through a broker-dealer sale and remittance procedure
pursuant to which the Optionee (a) shall provide irrevocable written
instructions to a Company-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company, out
of the sale proceeds available on the settlement date, sufficient
funds to cover
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
3
<PAGE>
the aggregate Option Price payable for the purchased shares plus all
applicable Federal and State income and employment taxes required to
be withheld by the Company by reason of such purchase and (b) shall
provide written directives to the Company to deliver the certificates
for the purchased shares directly to such brokerage firm in order to
complete the sale transaction, or
(iii) with the consent of the Plan Administrator, either (a) by
delivery of the Optionee's full-recourse promissory note (in
accordance with the terms of the Plan) or (b) on such other basis as
the Plan Administrator determines is acceptable.
9. NON-ASSIGNABILITY OF OPTION. This Option is not assignable
---------------------------
or transferable by Optionee except by will or by the laws of descent and
distribution following the Optionee's death. During the Optionee's lifetime,
the Option is exercisable only by the Optionee. Any attempt to assign, pledge,
transfer, hypothecate or otherwise dispose of this Option, and any levy of
execution, attachment or similar process on this Option, shall be null and void.
10. OPTION ACCELERATION. Provided one of the events specified
-------------------
in clauses (i) through (iv) below should occur (A) more than six (6) months
after the Effective Date and (B) while Optionee is an active Employee, Director
or Consultant, then Optionee shall have the right (without regard to the normal
exercise schedule set forth in Paragraph 6) to exercise this Option, within the
applicable exercise period specified below, for any or all of the Option Shares
as fully-vested shares of Common Stock:
(i) Within thirty (30) days following the loss of Employee,
Consultant, or Director status due to consummation of any transaction
which (I) is approved by the stockholders of the Company in which the
Company will cease to be an independent corporation (including,
without limitation, a reverse merger transaction in which the Company
becomes the subsidiary of another corporation) or the sale or other
disposition of all or substantially all of the assets of the Company,
and (II) caused the Optionee to lose his or her status as an Employee,
Consultant, or Director within one year after the closing date of the
transaction;
(ii) Within thirty (30) days following the first date on which
there is a change in the composition of the Board effected through one
or more contested elections for Board membership such that less than
two- thirds of the individual members of the Board (determined by
rounding up to the next whole number) is comprised of individuals who
(A) were Directors of the Company on a date three (3) years prior to
the
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
4
<PAGE>
date of such change or (B) were elected or nominated for election as
such Directors during the intervening three (3)-year period by
affirmative vote of at least a majority of those Directors described
in clause (A) above who were still in office as of the date the Board
approved such election or nomination;
(iii) Within thirty (30) days after any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934) or any related group of persons (other than such a group that
includes the Company) acquires (A) 40% or more of the outstanding
Common Stock pursuant to a tender or exchange offer that the Board
does not recommend the stockholders to accept or (B) 50% or more of
the outstanding Common Stock in a single transaction or in a series of
related transactions; or
(iv) Within the thirty (30)-day period ending with the effective
date of any dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not the surviving corporation
(except for a transaction the principal purpose of which is to change
the State of the Company's incorporation), but not earlier than the
date on which any required stockholder approval is obtained.
If the Option as so accelerated is not exercised during the applicable
thirty (30)-day period described in clause (i) or (iv) above, then the Option
shall terminate at the close of business on the last day of such thirty (30)-day
period, unless the Option is assumed by the acquiring corporation (or its parent
company) in connection with a merger or consolidation in which the Company is
not the surviving entity. Should this option not qualify for acceleration under
clause (i) or (iv) because it has not been outstanding for at least six (6)
months prior to the clause (i) or (iv) event, then this option shall be subject
to adjustment under Section 3.1 of Article Two of the Plan, if and to the extent
the option is to continue in effect after such clause (i) or (iv) event;
otherwise, this option shall terminate upon the occurrence of such clause (i) or
(iv) event.
11. RESTRICTION OF ISSUANCE OF SHARES.
---------------------------------
A. LEGALITY OF ISSUANCE. The Company shall not be obligated to
--------------------
sell or issue any Option Shares pursuant to this Option (the "Exercised Shares")
if such sale or issuance would, in the opinion of the Company and the Company's
counsel, constitute a violation by the Company of any provision of law,
including without limitation the provisions of the Securities Act of 1933, as
amended (the "Act").
B. REGISTRATION OR QUALIFICATION OF SECURITIES. The Company may,
-------------------------------------------
but shall not be required to, register, qualify, or perfect an exemption under
the Act or any other applicable law for the grant of this Option or the issuance
or sale of any
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
5
<PAGE>
Exercised Shares. The Company shall not be obligated to take any affirmative
action in order to cause the grant or exercise of this Option or the issuance or
sale of any Exercised Shares pursuant hereto to comply with any law or to be
listed or qualified on any stock exchange.
12. RESTRICTION ON TRANSFER. Regardless of whether the sale of
-----------------------
the Exercised Shares has been registered under the Act or has been registered or
qualified under the securities laws of any state, the Company may impose
restrictions upon the sale, pledge or other transfer of the Exercised Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company and the Company's counsel, such restrictions are
necessary or desirable in order to achieve compliance with the provisions of the
Act, the securities law of any state, or any other law.
13. STOCK CERTIFICATE RESTRICTIVE LEGENDS. The stock
-------------------------------------
certificates evidencing the Exercised Shares shall bear such restrictive legends
as the Company and the Company's counsel deem necessary or advisable under
applicable law or pursuant to this Agreement.
14. TAX ADVICE. Optionee hereby acknowledges and agrees that
----------
the Company has made no warranties or representations to Optionee with respect
to the income tax consequences of the transactions contemplated by this
Agreement, including (without limitation) the acquisition of the Option Shares
upon exercise of this Option in accordance with Paragraph 8, and the Optionee is
in no manner relying on the Company or the Company's representatives for an
assessment of such tax consequences.
15. WITHHOLDING OF TAX. In the event the Company determines
------------------
that it or any Subsidiary may be required to withhold or collect, as a result of
any exercise of this Option or as a result of the disposition of the shares
acquired upon such exercise, any local, state, foreign or federal income or
other tax, Optionee agrees to make arrangements satisfactory to the Company to
meet such withholding or collection requirement.
16. BINDING EFFECT. Subject to the limitations set forth in
--------------
Paragraph 9 of this Agreement, this Agreement shall be binding upon and inure to
the benefit of the executors, administrators, heirs, legal representatives, and
successors and assigns of the parties hereto; provided, however, that Optionee
--------
may not assign any of Optionee's rights under this Agreement other than as
permitted under Paragraph 9.
17. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
---------------------------------
Agreement or in the Plan shall confer upon the Optionee any right to continue in
the service of the Company (or any Subsidiary employing or retaining Optionee)
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Company (or any such Subsidiary) or the Optionee,
which rights are hereby expressly reserved by
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
6
<PAGE>
each, to terminate Optionee's status as an Employee or Consultant at any time
for any reason whatsoever, with or without cause.
18. GOVERNING LAW. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Utah applicable to
contracts entered into and wholly to be performed within the State of Utah by
Utah residents.
19. NOTICES. All notices and other communications under this
-------
Agreement shall be in writing. Unless and until the Optionee is notified in
writing to the contrary, all notices, communications and documents directed to
the Company and related to this Agreement, if not delivered by hand, shall be
mailed, addressed as follows:
OEC Medical Systems, Inc.
384 Wright Brothers Drive
Salt Lake City, UT 84116
Unless and until the Company is notified in writing to the contrary,
all notices, communications and documents intended for the Optionee and related
to this Agreement, if not delivered by hand, shall be mailed to Optionee's last
known address as shown on the Company's books.
Notices and communications shall be mailed by first class mail,
postage prepaid; documents shall be mailed by registered mail, return receipt
requested, postage prepaid. All mailings and deliveries related to this
Agreement shall be deemed received only when actually received unless properly
mailed by registered mail, return requested, in which event they shall be deemed
received two days after the date of mailing.
20. PLAN LIMITATIONS. This Agreement and the Option evidenced
----------------
hereby are made and granted pursuant to the provisions of the Plan and shall
accordingly be subject to the terms, conditions, limitations and restrictions of
the Plan. A copy of the Plan shall be made available to Optionee upon written
request to the Company at the address specified in Paragraph 19. All decisions
of the Plan Administrator with respect to any question or issue arising under
the Plan or this Agreement shall be conclusive and binding upon all persons
having an interest in this Option.
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
OEC MEDICAL SYSTEMS, INC.
By:_________________________________
Title: Chief Operating Officer
The Optionee hereby accepts and agrees to be bound by all of the terms
and conditions of this Agreement and the Plan.
____________________________________
OPTIONEE
Optionee's current address is:
_____________________________
_____________________________
_____________________________
Soc. Sec. No. ___ - __ - ____
ACKNOWLEDGMENT
Optionee's spouse indicates by the execution of this Acknowledgment
his or her consent to be bound by the terms of the foregoing Non-Qualified Stock
Option Agreement as to his or her interests, whether as community property or
otherwise, if any, in the Option granted hereunder and in any Exercised Shares
purchased pursuant to such Option.
___________________________________
Optionee's Spouse
DATED: ________________, 199_.
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
8
<PAGE>
OEC MEDICAL SYSTEMS,INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Standard Milestone Option
-------------------------
AGREEMENT made as of the day of , 199 by and between OEC
---- ------ --
Medical Systems, Inc., a Delaware corporation (hereinafter called "Company") and
___________________________(hereinafter called "Optionee").
WITNESSETH:
RECITALS
- --------
A. The Company's 1998 Stock Option Plan (the "Plan") has been
implemented for the purpose of providing equity incentives to select Employees
(including Officers and Directors) and Consultants of the Company and the
Company's Subsidiaries in order to encourage such persons to remain in the
employ or service of the Company or the Company's Subsidiaries.
B. Optionee is an individual who is to render valuable services to the
Company or its Subsidiaries, and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the Company's
grant of a stock option to Optionee.
C. The granted option is intended to be a non-qualified stock option
which does NOT meet the requirements of Section 422 of the Internal Revenue
Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee a non-
---------------
qualified stock option (the "Option") under the Plan to purchase all or any part
of an aggregate of shares of the Company's common stock, $0.01 par value per
share ("Common Stock"), upon the terms and conditions set forth herein and in
the Plan, with the terms and conditions of the Plan hereby incorporated into
this Agreement by reference. Except to the extent otherwise specifically
provided in this Agreement, all capitalized terms shall have the meaning set
forth in the Plan.
2. EFFECTIVE DATE. The effective date and grant date of this Option are
--------------
(the "Effective Date").
3. EXERCISE PRICE. The exercise price for purchase of the shares of
--------------
Common Stock covered by this Option (the "Option Shares") shall be $
----------
per share (the "Option Price"), the closing selling price per share of the
Common Stock on the New York Stock Exchange on the Effective Date, as reported
in the Wall Street Journal.
1
<PAGE>
4. OPTION TERM. This Option shall terminate on the first to occur of (i)
-----------
the expiration of the applicable exercise period under Paragraph 7 following the
date of the Optionee's Employment Termination or (ii) the expiration date of the
ten-year period measured from the Effective Date (the "Expiration Date").
5. ADJUSTMENTS/STOCKHOLDER RIGHTS.
------------------------------
A. The number of Option Shares and the Option Price payable per share
may be adjusted by the Plan Administrator upon certain circumstances in
accordance with the provisions of Section 4.4 of Article I and Section 3.1 of
Article II of the Plan.
B. Optionee shall have no stockholder rights with respect to any Option
Shares until Optionee shall have exercised the Option, paid the Option Price and
been issued a stock certificate for the purchased Option Shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property), distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as may
otherwise be provided in Section 4.4 of Article I and Section 3.1 of Article II
of the Plan.
6. EXERCISE OF OPTIONS.
-------------------
A. NORMAL EXERCISE SCHEDULE
------------------------
Provided Optionee continues to render services as an Employee, Director
or Consultant, this Option shall become exercisable for all of the Option Shares
upon the Optionee's completion of [[six (6) years]] of service with the Company
as an Employee, Director or Consultant measured from the ,
----- -------------
199 Effective Date.
B. SPECIAL ACCELERATION SCHEDULE
-----------------------------
In the event the following milestones are achieved while Optionee
continues in the Company's service as an Employee, Director or Consultant, the
exercisability of this Option shall accelerate, and the Option shall become
immediately exercisable, for one or more installments of the Option Shares in
accordance with the following schedule:
[Milestones as defined by Plan Administrator]
2
<PAGE>
The milestones triggering the acceleration of the Option Shares shall
be appropriately adjusted in the event of any stock dividend, stock split,
recapitalization or other similar change affecting the number of outstanding
shares of Common Stock effected without the Company's receipt of consideration.
C. CUMULATIVE INSTALLMENTS
-----------------------
Each installment of Option Shares for which this Option becomes
exercisable under either the Normal Exercise Schedule or the Special
Acceleration Schedule shall accumulate, and the Option shall remain exercisable
for such accumulated installments until the Expiration Date or sooner
termination of this Option pursuant to Paragraph 7 of this Agreement.
7. EXERCISE AFTER EMPLOYMENT TERMINATION. This Option shall not become
-------------------------------------
exercisable for any additional Option Shares following the Optionee's Employment
Termination and may only be exercised after such Employment Termination as
follows:
A. If the Optionee's Employment Termination occurs for any reason
other than death or Permanent Disability, then this Option may be exercised, for
3
<PAGE>
one or more of the Option Shares (if any) for which it was exercisable on the
date of such Employment Termination, only during the ninety (90)-day period
following such date. Upon the expiration of such period, this Option shall
terminate and cease to be exercisable.
B. If the Optionee's Employment Termination occurs by reason of death or
Permanent Disability, then this Option may be exercised, for one or more of the
Option Shares (if any) for which it was exercisable on the date of such
Employment Termination (less any Option Shares subsequently purchased by the
Optionee prior to death), only during the twelve (12)-month period following
such date. Upon the expiration of such period, this Option shall terminate and
cease to be exercisable.
C. Notwithstanding subparagraphs A and B above, in no event may this
Option be exercised at any time after the Expiration Date.
D. In the event of the Optionee's death, this Option may be exercised,
subject to the limitations of subparagraphs B and C above, by the executors or
administrators of the Optionee's estate or by any person or persons who have
acquired the Option directly from the Optionee by bequest or inheritance.
8. METHOD OF EXERCISE.
------------------
A. Optionee may exercise the Option for any or all of the Option Shares
for which the Option is at the time exercisable pursuant to the provisions of
Paragraphs 6 and 7 by giving the Company written notice of such exercise in
which there is specified the number of Option Shares as to which the Option is
so exercised. Such notice shall be accompanied by payment to the Company, either
in cash or by check in form satisfactory to the Company, of an amount equal to
the sum of the Option Price of the purchased shares of Common Stock plus any
amounts required to be withheld pursuant to Paragraph 15.
B. The Option Price may also be paid in one of the alternative forms
specified below, and such form of payment must also accompany the notice of
exercise (unless the sale and remittance procedure of clause (iii) below is
utilized):
(i) in whole or in part with shares of Common Stock delivered to the
Company in accordance with the terms of the Plan ,
(ii) through a broker-dealer sale and remittance procedure pursuant to
which the Optionee (a) shall provide irrevocable written instructions to a
Company-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Option Price payable for the purchased shares plus all applicable Federal
and State income and employment taxes required to be withheld by the
Company by reason of such
4
<PAGE>
purchase and (b) shall provide written directives to the Company to deliver
the certificates for the purchased shares directly to such brokerage firm
in order to complete the sale transaction, or
(iii) with the consent of the Plan Administrator, either (a) by
delivery of the Optionee's full-recourse promissory note (in accordance
with the terms of the Plan) or (b) on such other basis as the Plan
Administrator determines is acceptable.
9. NON-ASSIGNABILITY OF OPTION. This Option is not assignable or
---------------------------
transferable by Optionee except by will or by the laws of descent and
distribution following the Optionee's death. During the Optionee's lifetime, the
Option is exercisable only by the Optionee. Any attempt to assign, pledge,
transfer, hypothecate or otherwise dispose of this Option, and any levy of
execution, attachment or similar process on this Option, shall be null and void.
10. OPTION ACCELERATION. Provided one of the events specified in clauses
-------------------
(i) through (iv) below should occur (A) more than six (6) months after the
Effective Date and (B) while Optionee is an active Employee, Director or
Consultant, then Optionee shall have the right (without regard to either the
Normal Exercise or Special Acceleration Schedules set forth in Paragraph 6) to
exercise this Option, within the applicable exercise period specified below, for
any or all of the Option Shares as fully-vested shares of Common Stock:
(i) Within thirty (30) days following loss of Employee, Consultant,
or Director status due to the consummation of any transaction which (I) is
approved by the stockholders of the Company in which the Company will cease
to be an independent corporation (including, without limitation, a reverse
merger transaction in which the Company becomes the subsidiary of another
corporation) or the sale or other disposition of all or substantially all
of the assets of the Company, and (II) caused the Optionee to lose his or
her status as an Employee, Consultant, or Director within one year after
the closing date of the transaction;
(ii) Within thirty (30) days following the first date on which there
is a change in the composition of the Board effected through one or more
contested elections for Board membership such that less than two- thirds of
the individual members of the Board (determined by rounding up to the next
whole number) is comprised of individuals who (A) were Directors of the
Company on a date three (3) years prior to the date of such change or (B)
were elected or nominated for election as such Directors during the
intervening three (3)-year period by affirmative vote of at least a
majority of those Directors described in clause (A) above who were still in
5
<PAGE>
office as of the date the Board approved such election or nomination;
(iii) Within thirty (30) days after any "person" (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) or any
related group of persons (other than such a group that includes the Company)
acquires (A) 40% or more of the outstanding Common Stock pursuant to a tender or
exchange offer that the Board does not recommend the stockholders to accept or
(B) 50% or more of the outstanding Common Stock in a single transaction or in a
series of related transactions; or
(iv) Within the thirty (30)-day period ending with the effective date
of any dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not the surviving corporation (except
for a transaction the principal purpose of which is to change the State of
the Company's incorporation), but not earlier than the date on which any
required stockholder approval is obtained.
If the Option as so accelerated is not exercised during the applicable
thirty (30)-day period described in clause (i) or (iv) above, then the Option
shall terminate at the close of business on the last day of such thirty (30)-day
period, unless the Option is assumed by the acquiring corporation (or its parent
company) in connection with a merger or consolidation in which the Company is
not the surviving entity. Should this option not qualify for acceleration under
clause (i) or (iv) because it has not been outstanding for at least six (6)
months prior to the clause (i) or (iv) event, then this option shall be subject
to adjustment under Section 3.1 of Article Two of the Plan, if and to the extent
the option is to continue in effect after such clause (i) or (iv) event;
otherwise, this option shall terminate upon the occurrence of such clause (i) or
(iv) event.
11. RESTRICTION OF ISSUANCE OF SHARES.
---------------------------------
A. LEGALITY OF ISSUANCE. The Company shall not be obligated to sell or
--------------------
issue any Option Shares pursuant to this Option (the "Exercised Shares") if such
sale or issuance would, in the opinion of the Company and the Company's counsel,
constitute a violation by the Company of any provision of law, including without
limitation the provisions of the Securities Act of 1933, as amended (the "Act").
B. REGISTRATION OR QUALIFICATION OF SECURITIES. The Company may, but
-------------------------------------------
shall not be required to, register, qualify, or perfect an exemption under the
Act or any other applicable law for the grant of this Option or the issuance or
sale of any Exercised Shares. The Company shall not be obligated to take any
affirmative action in order to cause the grant or exercise of this Option or the
issuance or sale of any
6
<PAGE>
Exercised Shares pursuant hereto to comply with any law or to be listed or
qualified on any stock exchange.
12. RESTRICTION ON TRANSFER. Regardless of whether the sale of the
-----------------------
Exercised Shares has been registered under the Act or has been registered or
qualified under the securities laws of any state, the Company may impose
restrictions upon the sale, pledge or other transfer of the Exercised Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company and the Company's counsel, such restrictions are
necessary or desirable in order to achieve compliance with the provisions of the
Act, the securities law of any state, or any other law.
13. STOCK CERTIFICATE RESTRICTIVE LEGENDS. The stock certificates
-------------------------------------
evidencing the Exercised Shares shall bear such restrictive legends as the
Company and the Company's counsel deem necessary or advisable under applicable
law or pursuant to this Agreement.
14. TAX ADVICE. Optionee hereby acknowledges and agrees that the Company
----------
has made no warranties or representations to Optionee with respect to the income
tax consequences of the transactions contemplated by this Agreement, including
(without limitation) the acquisition of the Option Shares upon exercise of this
Option in accordance with Paragraph 8, and the Optionee is in no manner relying
on the Company or the Company's representatives for an assessment of such tax
consequences.
15. WITHHOLDING OF TAX. In the event the Company determines that it or
------------------
any Subsidiary may be required to withhold or collect, as a result of any
exercise of this Option or as a result of the disposition of the shares acquired
upon such exercise, any local, state, foreign or federal income or other tax,
Optionee agrees to make arrangements satisfactory to the Company to meet such
withholding or collection requirement.
16. BINDING EFFECT. Subject to the limitations set forth in Paragraph 9 of
- --- --------------
this Agreement, this Agreement shall be binding upon and inure to the benefit of
the executors, administrators, heirs, legal representatives, and successors and
assigns of the parties hereto; provided, however, that Optionee may not assign
--------
any of Optionee's rights under this Agreement other than as permitted under
Paragraph 9.
17. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement or in
---------------------------------
the Plan shall confer upon the Optionee any right to continue in the service of
the Company (or any Subsidiary employing or retaining Optionee) for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Company (or any such Subsidiary) or the Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's status as an Employee
or Consultant at any time for any reason whatsoever, with or without cause.
7
<PAGE>
18. GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Utah applicable to contracts entered
into and wholly to be performed within the State of Utah by Utah residents.
19. NOTICES. All notices and other communications under this Agreement
-------
shall be in writing. Unless and until the Optionee is notified in writing to the
contrary, all notices, communications and documents directed to the Company and
related to this Agreement, if not delivered by hand, shall be mailed, addressed
as follows:
OEC Medical Systems, Inc.
384 Wright Brothers Drive
Salt Lake City, UT 84116
Unless and until the Company is notified in writing to the contrary,
all notices, communications and documents intended for the Optionee and related
to this Agreement, if not delivered by hand, shall be mailed to Optionee's last
known address as shown on the Company's books.
Notices and communications shall be mailed by first class mail,
postage prepaid; documents shall be mailed by registered mail, return receipt
requested, postage prepaid. All mailings and deliveries related to this
Agreement shall be deemed received only when actually received unless properly
mailed by registered mail, return requested, in which event they shall be deemed
received two days after the date of mailing.
20. PLAN LIMITATIONS. This Agreement and the Option evidenced hereby are
----------------
made and granted pursuant to the provisions of the Plan and shall accordingly be
subject to the terms, conditions, limitations and restrictions of the Plan. A
copy of the Plan shall be made available to Optionee upon written request to the
Company at the address specified in Paragraph 19. All decisions of the Plan
Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding upon all persons having an
interest in this Option.
8
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
OEC MEDICAL SYSTEMS, INC.
By:
---------------------------
Title: President, CEO
The Optionee hereby accepts and agrees to be bound by all of the terms
and conditions of this Agreement and the Plan.
OPTIONEE
----------------------
Optionee's current address is:
- ---------------------------------------------
- ---------------------------------------------
- ---------------------------------------------
Soc. Sec. No.
--- -- ----
ACKNOWLEDGMENT
Optionee's spouse indicates by the execution of this Acknowledgment
his or her consent to be bound by the terms of the foregoing Non-Qualified Stock
Option Agreement as to his or her interests, whether as community property or
otherwise, if any, in the Option granted hereunder and in any Exercised Shares
purchased pursuant to such Option.
------------------------------------------------
Optionee's Spouse
DATED: , 199 .
--------------- --
9
<PAGE>
EXHIBIT 4.12
OEC MEDICAL SYSTEMS, INC.
INCENTIVE STOCK OPTION AGREEMENT
Standard Milestone
------------------
Option
- ------
AGREEMENT made as of the ____ day of _______, 199_ by and between OEC
Medical Systems, Inc., a Delaware corporation (hereinafter called "Company") and
(hereinafter called "Optionee").
WITNESSETH:
RECITALS
- --------
A. The Company's 1998 Stock Option Plan (the "Plan") has been implemented for
the purpose of providing equity incentives to select Employees (including
Officers and Directors) and Consultants of the Company and the Company's
Subsidiaries in order to encourage such persons to remain in the employ or
service of the Company or the Company's Subsidiaries.
B. Optionee is an Employee who is to render valuable services to the Company or
its Subsidiaries, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Company's grant of a
stock option to Optionee.
C. The granted option is intended to be an incentive stock option which meets
the requirements of Section 422 of the Internal Revenue Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee an incentive stock
---------------
option (the "Option") under the Plan to purchase all or any part of an aggregate
of ____ shares of the Company's common stock, $0.01 par value per share ("Common
Stock"), upon the terms and conditions set forth herein and in the Plan, with
the terms and conditions of the Plan hereby incorporated into this Agreement by
reference. Except to the extent otherwise specifically provided in this
Agreement, all capitalized terms shall have the meaning set forth in the Plan.
2. EFFECTIVE DATE. The effective date and grant date of this Option are
--------------
(the "Effective Date").
3. EXERCISE PRICE. The exercise price for purchase of the shares of Common
--------------
Stock covered by this Option (the "Option Shares") shall be $____ per share (the
"Option Price"), the closing selling price per share of the Common Stock on the
New York Stock Exchange on the Effective Date, as reported in the Wall Street
Journal.
<PAGE>
4. OPTION TERM. This Option shall terminate on the first to occur of (i) the
-----------
expiration of the applicable exercise period under Paragraph 7 following the
date of the Optionee's Employment Termination or (ii) the expiration date of the
ten-year period measured from the Effective Date (the "Expiration Date").
5. ADJUSTMENTS/STOCKHOLDER RIGHTS.
------------------------------
A. The number of Option Shares and the Option Price payable per share may
be adjusted by the Plan Administrator upon certain circumstances in accordance
with the provisions of Section 4.4 of Article One and Section 3.1 of Article Two
of the Plan.
B. Optionee shall have no stockholder rights with respect to any Option
Shares until Optionee shall have exercised the Option, paid the Option Price and
been issued a stock certificate for the purchased Option Shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property), distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as may
otherwise be provided in Section 4.4 of Article One and Section 3.1 of Article
Two of the Plan.
6. EXERCISE OF OPTIONS.
-------------------
A. NORMAL EXERCISE SCHEDULE
------------------------
Provided Optionee continues to render services as an Employee, this
Option shall become exercisable for all of the Option Shares upon the Optionee's
completion of [[six (6) years]] of service with the Company as an Employee
measured from the ______, 199_ Effective Date.
B. SPECIAL ACCELERATION SCHEDULE
-----------------------------
In the event the following milestones are achieved while Optionee
continues in the Company's service as an Employee, the exercisability of this
Option shall accelerate, and the Option shall become immediately exercisable,
for one or more installments of the Option Shares in accordance with the
following schedule:
[Milestones to be defined by Plan Administrator]
2
<PAGE>
The milestones triggering the acceleration of the Option Shares shall be
appropriately adjusted in the event of any stock dividend, stock split,
recapitalization or other similar change affecting the number of outstanding
shares of Common Stock effected without the Company's receipt of consideration.
C. CUMULATIVE INSTALLMENTS
-----------------------
Each installment of Option Shares for which this Option becomes exercisable
under either the Normal Exercise Schedule or the Special Acceleration Schedule
shall accumulate, and the Option shall remain exercisable for such accumulated
installments until the Expiration Date or sooner termination of this Option
pursuant to Paragraph 7 of this Agreement.
7. EXERCISE AFTER EMPLOYMENT TERMINATION. This Option shall not become
-------------------------------------
exercisable for any additional Option Shares following the Optionee's Employment
Termination and may only be exercised after such Employment Termination as
follows:
A. If the Optionee's Employment Termination occurs for any reason other
than death or Permanent Disability, then this Option may be exercised, for
3
<PAGE>
one or more of the Option Shares (if any) for which it was exercisable on the
date of such Employment Termination, only during the ninety (90)-day period
following such date. Upon the expiration of such period, this Option shall
terminate and cease to be exercisable.
B. If the Optionee's Employment Termination occurs by reason of death or
Permanent Disability, then this Option may be exercised, for one or more of the
Option Shares (if any) for which it was exercisable on the date of such
Employment Termination (less any Option Shares subsequently purchased by the
Optionee prior to death), only during the twelve (12)-month period following
such date. Upon the expiration of such period, this Option shall terminate and
cease to be exercisable.
C. Notwithstanding subparagraphs A and B above, in no event may this
Option be exercised at any time after the Expiration Date.
D. In the event of the Optionee's death, this Option may be exercised,
subject to the limitations of subparagraphs B and C above, by the executors or
administrators of the Optionee's estate or by any person or persons who have
acquired the Option directly from the Optionee by bequest or inheritance.
8. METHOD OF EXERCISE.
------------------
A. Optionee may exercise the Option for any or all of the Option Shares for
which the Option is at the time exercisable pursuant to the provisions of
Paragraphs 6 and 7 by giving the Company written notice of such exercise in
which there is specified the number of Option Shares as to which the Option is
so exercised. Such notice shall be accompanied by payment to the Company,
either in cash or by check in form satisfactory to the Company, of an amount
equal to the sum of the Option Price of the purchased shares of Common Stock
plus any amounts required to be withheld pursuant to Paragraph 15.
B. The Option Price may also be paid in one of the alternative forms
specified below, and such form of payment must also accompany the notice of
exercise (unless the sale and remittance procedure of clause (iii) below is
utilized):
(i) in whole or in part with shares of Common Stock delivered to the
Company in accordance with the terms of the Plan,
(ii) through a broker-dealer sale and remittance procedure pursuant to
which the Optionee (a) shall provide irrevocable written instructions to a
Company-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Option Price payable for the purchased shares plus all applicable Federal
and State income and employment taxes required to be withheld by the Company
by reason of such
4
<PAGE>
purchase and (b) shall provide written directives to the Company to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction, or
(iii) with the consent of the Plan Administrator, either (a) by delivery
of the Optionee's full-recourse promissory note (in accordance with the
terms of the Plan) or (b) on such other basis as the Plan Administrator
determines is acceptable.
9. NON-ASSIGNABILITY OF OPTION. This Option is not assignable or transferable
---------------------------
by Optionee except by will or by the laws of descent and distribution following
the Optionee's death. During the Optionee's lifetime, the Option is exercisable
only by the Optionee. Any attempt to assign, pledge, transfer, hypothecate or
otherwise dispose of this Option, and any levy of execution, attachment or
similar process on this Option, shall be null and void.
10. OPTION ACCELERATION. Provided one of the events specified in clauses (i)
-------------------
through (iv) below should occur (A) more than six (6) months after the Effective
Date and (B) while Optionee is an active Employee, then Optionee shall have the
right (without regard to either the Normal Exercise or Special Acceleration
Schedules set forth in Paragraph 6) to exercise this Option, within the
applicable exercise period specified below, for any or all of the Option Shares
as fully-vested shares of Common Stock:
(i) Within thirty (30) days following loss of Employee status due to
the consummation of any transaction which (I) is approved by the
stockholders of the Company in which the Company will cease to be an
independent corporation (including, without limitation, a reverse merger
transaction in which the Company becomes the subsidiary of another
corporation) or the sale or other disposition of all or substantially all of
the assets of the Company, and (II) caused the Optionee to lose his or her
status as an Employee within one year after the closing date of the
transaction;
(ii) Within thirty (30) days following the first date on which there is
a change in the composition of the Board effected through one or more
contested elections for Board membership such that less than two- thirds of
the individual members of the Board (determined by rounding up to the next
whole number) is comprised of individuals who (A) were Directors of the
Company on a date three (3) years prior to the date of such change or (B)
were elected or nominated for election as such Directors during the
intervening three (3)-year period by affirmative vote of at least a majority
of those Directors described in clause (A) above who were still in
5
<PAGE>
office as of the date the Board approved such election or nomination;
(iii) Within thirty (30) days after any "person" (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) or any
related group of persons (other than such a group that includes the Company)
acquires (A) 40% or more of the outstanding Common Stock pursuant to a
tender or exchange offer that the Board does not recommend the stockholders
to accept or (B) 50% or more of the outstanding Common Stock in a single
transaction or in a series of related transactions; or
(iv) Within the thirty (30)-day period ending with the effective date
of any dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not the surviving corporation (except
for a transaction the principal purpose of which is to change the State of
the Company's incorporation), but not earlier than the date on which any
required stockholder approval is obtained.
If the Option as so accelerated is not exercised during the applicable
thirty (30)-day period described in clause (i) or (iv) above, then the Option
shall terminate at the close of business on the last day of such thirty (30)-day
period, unless the Option is assumed by the acquiring corporation (or its parent
company) in connection with a merger or consolidation in which the Company is
not the surviving entity. Should this option not qualify for acceleration under
clause (i) or (iv) because it has not been outstanding for at least six (6)
months prior to the clause (i) or (iv) event, then this option shall be subject
to adjustment under Section 3.1 of Article Two of the Plan, if and to the extent
the option is to continue in effect after such clause (i) or (iv) event;
otherwise, this option shall terminate upon the occurrence of such clause (i) or
(iv) event.
11. RESTRICTION OF ISSUANCE OF SHARES.
---------------------------------
A. LEGALITY OF ISSUANCE. The Company shall not be obligated to sell or
--------------------
issue any Option Shares pursuant to this Option (the "Exercised Shares") if such
sale or issuance would, in the opinion of the Company and the Company's counsel,
constitute a violation by the Company of any provision of law, including without
limitation the provisions of the Securities Act of 1933, as amended (the "Act").
B. REGISTRATION OR QUALIFICATION OF SECURITIES. The Company may, but shall
-------------------------------------------
not be required to, register, qualify, or perfect an exemption under the Act or
any other applicable law for the grant of this Option or the issuance or sale of
any Exercised Shares. The Company shall not be obligated to take any affirmative
action in order to cause the grant or exercise of this Option or the issuance or
sale of any
6
<PAGE>
Exercised Shares pursuant hereto to comply with any law or to be listed or
qualified on any stock exchange.
12. RESTRICTION ON TRANSFER. Regardless of whether the sale of the Exercised
-----------------------
Shares has been registered under the Act or has been registered or qualified
under the securities laws of any state, the Company may impose restrictions upon
the sale, pledge or other transfer of the Exercised Shares (including the
placement of appropriate legends on stock certificates) if, in the judgment of
the Company and the Company's counsel, such restrictions are necessary or
desirable in order to achieve compliance with the provisions of the Act, the
securities law of any state, or any other law.
13. STOCK CERTIFICATE RESTRICTIVE LEGENDS. The stock certificates evidencing
-------------------------------------
the Exercised Shares shall bear such restrictive legends as the Company and the
Company's counsel deem necessary or advisable under applicable law or pursuant
to this Agreement.
14. TAX ADVICE. Optionee hereby acknowledges and agrees that the Company has
----------
made no warranties or representations to Optionee with respect to the income tax
consequences of the transactions contemplated by this Agreement, including
(without limitation) the acquisition of the Option Shares upon exercise of this
Option in accordance with Paragraph 8, and the Optionee is in no manner relying
on the Company or the Company's representatives for an assessment of such tax
consequences.
15. WITHHOLDING OF TAX. In the event the Company determines that it or any
------------------
Subsidiary may be required to withhold or collect, as a result of any exercise
of this Option or as a result of the disposition of the shares acquired upon
such exercise, any local, state, foreign or federal income or other tax,
Optionee agrees to make arrangements satisfactory to the Company to meet such
withholding or collection requirement.
16. BINDING EFFECT. Subject to the limitations set forth in Paragraph 9 of
--------------
this Agreement, this Agreement shall be binding upon and inure to the benefit of
the executors, administrators, heirs, legal representatives, and successors and
assigns of the parties hereto; provided, however, that Optionee may not assign
--------
any of Optionee's rights under this Agreement other than as permitted under
Paragraph 9.
17. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement or in the
---------------------------------
Plan shall confer upon the Optionee any right to continue in the service of the
Company (or any Subsidiary employing or retaining Optionee) for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company (or any such Subsidiary) or the Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's status as an Employee at any
time for any reason whatsoever, with or without cause.
7
<PAGE>
18. GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Utah applicable to contracts entered
into and wholly to be performed within the State of Utah by Utah residents.
19. NOTICES. All notices and other communications under this Agreement shall
-------
be in writing. Unless and until the Optionee is notified in writing to the
contrary, all notices, communications and documents directed to the Company and
related to this Agreement, if not delivered by hand, shall be mailed, addressed
as follows:
OEC Medical Systems, Inc.
384 Wright Brothers Drive
Salt Lake City, UT 84116
Unless and until the Company is notified in writing to the contrary, all
notices, communications and documents intended for the Optionee and related to
this Agreement, if not delivered by hand, shall be mailed to Optionee's last
known address as shown on the Company's books.
Notices and communications shall be mailed by first class mail, postage
prepaid; documents shall be mailed by registered mail, return receipt requested,
postage prepaid. All mailings and deliveries related to this Agreement shall be
deemed received only when actually received unless properly mailed by registered
mail, return requested, in which event they shall be deemed received two days
after the date of mailing.
20. PLAN LIMITATIONS. This Agreement and the Option evidenced hereby are made
----------------
and granted pursuant to the provisions of the Plan and shall accordingly be
subject to the terms, conditions, limitations and restrictions of the Plan. A
copy of the Plan shall be made available to Optionee upon written request to the
Company at the address specified in Paragraph 19. All decisions of the Plan
Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding upon all persons having an
interest in this Option.
8
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
OEC MEDICAL SYSTEMS, INC.
By: ___________________________________
Title: President, CEO
The Optionee hereby accepts and agrees to be bound by all of the terms
and conditions of this Agreement and the Plan.
_______________________________________
OPTIONEE
Optionee's current address is:
______________________________
______________________________
______________________________
Soc. Sec. No. _____-____-_____
<PAGE>
AUTOMATIC OPTION GRANT
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of the day of , 199 , by and between OEC
--- ------ --
Medical Systems, Inc., a Delaware corporation (the "Company") and
------------
(the "Optionee").
- ------------------------
WITNESSETH:
RECITALS
- --------
A. The Company's 1998 Stock Option Plan (the "Plan") has been
implemented for the purpose of attracting and retaining the services of
employees, consultants and non-employee Board members who contribute to the
financial success of the Company or its subsidiary corporations.
B. Optionee is a non-employee Board member who is entitled to receive an
option to acquire shares of the Company's common stock, par value $0.01 per
share (the "Common Stock"), pursuant to the automatic option grant program in
effect for eligible non-employee Board members under the Plan. This Agreement is
executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the automatic option grant made to such Optionee thereunder.
C. The granted option is intended to be a non-statutory stock option
which does NOT satisfy the requirements of Section 422 of the Internal Revenue
Code.
D. For purposes of this Agreement, the following definitions shall be in
effect:
Board Member: The Optionee shall be deemed to continue in service as
------------
a Board Member for so long as such individual remains a member of the
Company's Board of Directors.
Fair Market Value: The Fair Market Value per share of Common Stock on
-----------------
any date in question shall be the closing price per share of the Common
Stock on such date on an established stock exchange, if the Common Stock is
listed and traded on such an exchange. If no sale of Common Stock is made
on any such exchange on the date in question, the Fair Market Value shall
be determined by the closing price of the Common Stock on the next
preceding date upon which such a sale shall have occurred.
1
<PAGE>
Subsidiary: A corporation shall be deemed to be a Subsidiary of the
----------
Company if it is a member of an unbroken chain of corporations beginning
with the Company, provided each corporation in such chain (other than the
last corporation) owns, at the time of determination, stock possessing 50%
or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
TERMS
- -----
1. GRANT OF OPTION. There is hereby automatically granted to Optionee,
as of the date of this Agreement (the "Grant Date") pursuant to the provisions
of Article Three of the Plan, a stock option to purchase all or any part of an
aggregate of 3,000 shares of Common Stock (the "Option Shares") upon the terms
and conditions set forth in this Agreement and in the Plan (including Article
Three thereof), and such terms and conditions of the Plan are hereby
incorporated into this Agreement by reference and made a part hereof as if
expressly included in this Agreement. The Option Shares shall be purchasable
from time to time during the option term at the exercise price of $ per share
----
(the "Exercise Price"), the Fair Market Value per share of the Common Stock on
the Grant Date.
2. OPTION TERM. This option shall have a maximum term of ten (10) years
-----------
measured from the Grant Date and shall accordingly expire at the close of
business on , 20__ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 5, 7B or 11 of this Agreement.
3. LIMITED TRANSFERABILITY. This option, together with the limited stock
-----------------------
appreciation right pertaining to such option, shall not be transferable or
assignable by Optionee other than a transfer of this option by will or by the
laws of descent and distribution following Optionee's death, and this option and
limited stock appreciation right may be exercised, during Optionee's lifetime,
only by Optionee. Any attempt to assign, pledge, transfer, hypothecate or
otherwise dispose of this option (or the limited stock appreciation right
pertaining thereto) and any levy of execution, attachment or similar process on
this option (or such stock appreciation right) shall be null and void.
4. EXERCISABILITY. This option shall become exercisable for the Option
--------------
Shares in a series of three (3) equal and successive annual installments,
beginning one (1) year after the Grant Date, provided the Optionee continues to
serve as a Board member. Each installment of Option Shares for which this option
becomes exercisable shall accumulate, and the option shall remain exercisable
for such accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 5, 7B or 11 of this Agreement.
5. CESSATION OF BOARD MEMBERSHIP. In connection with the Optionee's
-----------------------------
cessation of service as a Board Member, the option term specified in
2
<PAGE>
Paragraph 2 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date in accordance with the following provisions:
(i) Should Optionee cease to be a Board Member for any reason
other than death while this option remains outstanding, then the period for
exercising this option shall be reduced to a six (6)-month period
commencing with the date of such cessation of service as a Board Member.
During such limited period of exercisability, this option may not be
exercised for more than the number of Option Shares (if any) for which it
is exercisable on the date of Optionee's cessation of service as a Board
Member. Upon the expiration of such six (6)-month period, the option shall
terminate and cease to be exercisable.
(ii) Should Optionee die while this option is outstanding, then
the personal representative of the Optionee's estate (or the person or
persons to whom the option is transferred pursuant to the Optionee's will
or in accordance with the laws of descent and distribution) shall have the
right to exercise this option for any or all of the Option Shares for which
this option is exercisable on the date of the Optionee's cessation of
service as a Board Member (less any Option Shares subsequently purchased by
the Optionee prior to death). Such right shall lapse, and this option shall
cease to be exercisable, upon the expiration of the twelve (12) month
period measured from the date of Optionee's death.
(iii) In no event may this option be exercised at any time after
the specified Expiration Date.
(iv) This option shall, upon the Optionee's cessation of service
as a Board Member for any reason, immediately terminate and cease to be
outstanding with respect to all Option Shares for which the option is not
otherwise at that time exercisable in accordance with either the normal
exercise schedule of Paragraph 4 or the special acceleration provisions of
Paragraph 7.
6. ADJUSTMENT IN OPTION SHARES. In the event of any increase or decrease
---------------------------
in the number of outstanding shares of Common Stock resulting from a subdivision
or consolidation of such shares or the payment of a stock dividend (but only of
Common Stock), a rights offering covering shares of Common Stock or any
recapitalization or other change in the number of issued shares of Common Stock
effected without receipt of consideration by the Company, appropriate
adjustments shall automatically be made to (a) the number of securities subject
to this option and (b) the Exercise Price payable per share in order to reflect
such transaction or change and thereby preclude a dilution or enlargement of
benefits hereunder.
3
<PAGE>
7. CHANGE IN CONTROL.
-----------------
A. Provided (i) this option has been outstanding for period of at least
six (6) months measured from the Grant Date and (ii) the Optionee is otherwise
at the time serving as a Board Member, the option shall automatically become
exercisable for all of the Option Shares immediately prior to the specified
effective date of a Change in Control Event and may thereupon be exercised for
any or all of such Option Shares. For such purpose, a Change in Control Event
shall be deemed to occur upon:
(i) the consummation of any transaction which (I) is approved by
the stockholders of the Company in which the Company will cease to be an
independent corporation (including, without limitation, a reverse merger
transaction in which the Company becomes the subsidiary of another
corporation) or the sale or other disposition of all or substantially all
of the assets of the Company, and (II) caused the Optionee to lose status
as a Board Member within one year after the Closing date of the
transaction;
(ii) the first date on which there is a change in the
composition of the Board effected through one or more contested elections
for Board membership such that less than two thirds of the individual
members of the Board (determined by rounding up to the next whole number)
is comprised of individuals who (A) were Directors of the Company on a date
three years prior to the date of such change or (B) were elected or
nominated for election as such Directors during the intervening three (3)
year period by affirmative vote of at least a majority of those Directors
described in clause (A) above who were still in office as of the date the
Board approved such election or nomination;
(iii) the acquisition by any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) or any
related group of persons (other than such a group that includes the
Company) of beneficial ownership of (A) 40% or more of the outstanding
Common Stock pursuant to a tender or exchange offer that the Board does not
recommend the stockholders to accept or (B) 50% or more of the outstanding
Common Stock in a single transaction or in a series of related
transactions; and
(iv) any dissolution or liquidation of the Company or any merger
or consolidation in which the Company is not the surviving corporation
(except for a transaction the principal purpose of which is to change the
State of the Company's incorporation), but not earlier than the date on
which any required stockholder approval is obtained.
B. If this option accelerates in connection with such Change in Control
Event, then to the extent not otherwise exercised, the option shall terminate
and cease to
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be exercisable either on the effective date of the subparagraph (i) or (iv)
Change in Control Event or thirty (30) days after the occurrence of the
subparagraph (ii) or (iii) Change in Control Event (other than a subparagraph
(iii) Change in Control triggering the immediate cancellation of the option
under Paragraph 11). In the event this option shall not have been outstanding
for at least six (6) months at the time of the Change in Control Event, the
option shall not accelerate and shall, to the extent this option is to be
assumed or is otherwise to continue in existence after a subparagraph (i) or
(iv) Change in Control Event, be automatically adjusted so as to pertain and
apply to the securities which a holder of the number of Option Shares subject to
this option would have been entitled to receive in consummation of such Change
in Control Event, and the Exercise Price shall also be appropriately adjusted to
the extent necessary to preclude the enlargement or dilution of benefits
hereunder.
C. This Agreement shall not in any way affect the right of the Company
to adjust, reclassify, reorganize or otherwise make changes in its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
8. PRIVILEGE OF STOCK OWNERSHIP. Optionee shall have no stockholder
rights with respect to any Option Shares until such individual shall have
exercised the option, paid the Exercise Price for the purchased shares and been
issued a stock certificate for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as may otherwise be provided
in Section 4.4 of Article One of the Plan and Section 5.1 of Article Three of
the Plan.
9. MANNER OF EXERCISING OPTION.
---------------------------
A. In order to exercise this option for one or more Option Shares for
which this option is at the time exercisable, Optionee (or in the case of
exercise after Optionee's death, the Optionee's executor, administrator, heir or
legatee, as the case may be) must take the following actions:
(i) Execute and deliver to the Secretary of the Company a
written notice of exercise (the "Exercise Notice") in substantially the
form of Exhibit I attached hereto.
(ii) Pay the aggregate Exercise Price for the purchased shares
in one or more of the following alternative forms:
(1) full payment in cash or check made payable to the Company's
order; or
(2) full payment in shares of Common Stock held by the Optionee
for the requisite period necessary to avoid a
5
<PAGE>
charge to the Company's reported earnings and valued at Fair Market Value
on the Exercise Date (as such term is defined below); or
(3) full payment in a combination of shares of Common Stock held
for the requisite period necessary to avoid a charge to the Company's
reported earnings and valued at Fair Market Value on the Exercise Date and
cash or check payable to the Company's order; or
(4) full payment through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (I) shall provide irrevocable
written instructions to a Company-designated brokerage firm to effect the
immediate sale of the purchased shares and to remit to the Company, out of
the sale proceeds available on the settlement date, an amount equal to the
Exercise Price payable for the purchased shares and (II) shall provide
written directives to the Company to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the
sale transaction.
(iii) Furnish to the Company appropriate documentation that the person
or persons exercising the option, if other than Optionee, have the right to
exercise this option.
B. For purposes of this Agreement, the Exercise Date shall be the date
on which the Exercise Notice is delivered to the Company. Except to the extent
the sale and remittance procedure of clause (ii)(4) above is utilized in
connection with the option exercise, payment of the Exercise Price for the
purchased shares must accompany the Exercise Notice.
C. As soon as practical after the exercise of this option in accordance
with the provisions of this Agreement, the Company shall mail or deliver to or
on behalf of Optionee (or the other person or persons exercising this option) a
stock certificate representing the purchased shares.
D. In no event may this option be exercised for any fractional shares.
10. LEGALITY OF ISSUANCE. The Company shall not be obligated to sell or
--------------------
issue any Option Shares pursuant to this Agreement if such sale or issuance
might, in the opinion of the Company and the Company's counsel, constitute a
violation by the Company of any provision of law, including without limitation
the provisions of the Securities Act of 1933, as amended (the "Act").
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11. LIMITED STOCK APPRECIATION RIGHT.
--------------------------------
A. Upon the occurrence of a Change in Control Event of the type
specified in clause (A) of subparagraph (iii) of Paragraph 7A of this Agreement,
this option, to the extent it has been outstanding for a period of at least six
(6) months measured from the Grant Date, shall automatically be canceled and the
Optionee shall in return receive an appreciation distribution from the Company
in an amount equal to the excess of (i) the Change in Control Price of the
number of Option Shares at the time subject to the canceled option, whether or
not the option is otherwise exercisable for those shares, over (ii) the
aggregate Exercise Price payable for such shares. In no event, however, shall
this option be canceled pursuant to the provisions of this Paragraph 11, unless
more than fifty percent (50%) of the Common Stock which is acquired in such
hostile Change in Control is purchased from persons other than officers or
directors of the Company subject to the short-swing profit restrictions of the
Federal securities laws.
B. For purposes of subparagraph A. above, the Change in Control Price
per share of the Option Shares subject to the cancelled option shall be deemed
to be equal to the greater of (a) the Fair Market Value per share on the date of
-------
the option cancellation or (b) the highest reported price per share paid by the
tender offeror in effecting the hostile Change in Control.
C. The appreciation distribution to which the Optionee shall become
entitled upon cancellation of the option in accordance herewith shall be made
entirely in cash, and neither the approval of the Plan Administrator nor the
approval of the Board shall be required in connection with the option
cancellation or the payment of the appreciation distribution.
D. This limited stock appreciation right shall in all events terminate
upon the expiration or sooner termination of the option term and may not be
assigned or transferred by the Optionee.
E. Upon the cancellation of this option and payment of the appreciation
distribution, Optionee shall have no further rights to acquire shares of Common
Stock pursuant to this option.
12. BINDING EFFECT. Subject to the limitations set forth in Paragraph 3
--------------
of this Agreement, this Agreement shall be binding upon and inure to the benefit
of the executors, administrators, heirs, legal representatives, and successors
and assigns of the parties hereto; provided, however, that Optionee may not
--------
assign any of Optionee's rights under this Agreement other than as permitted
under Paragraph 3.
13. NO IMPAIRMENT OF RIGHTS. Nothing in this Agreement or in the Plan
-----------------------
shall be deemed to impair or otherwise restrict the rights of the Company or the
stockholders to remove the Optionee from the Board at any time pursuant to the
provisions of applicable law.
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<PAGE>
14. GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Utah applicable to contracts entered
into and wholly to be performed within the State of Utah by Utah residents.
15. NOTICES. All notices and other communications under this Agreement
-------
shall be in writing. Unless and until the Optionee is notified in writing to the
contrary, all notices, communications and documents directed to the Company and
related to this Agreement, if not delivered by hand, shall be mailed, addressed
as follows:
OEC Medical Systems, Inc.
384 Wright Brothers Drive
Salt Lake City, UT 84116
Unless and until the Company is notified in writing to the contrary,
all notices, communications and documents intended for the Optionee and related
to this Agreement, if not delivered by hand, shall be mailed to Optionee's last
known address as shown on the Company's books.
Notices and communications shall be mailed by first class mail,
postage prepaid; documents shall be mailed by registered mail, return receipt
requested, postage prepaid. All mailings and deliveries related to this
Agreement shall be deemed received only when actually received unless properly
mailed by registered mail, return requested, in which event they shall be deemed
received two days after the date of mailing.
16. CONSTRUCTION. This Agreement and the option evidenced hereby are
------------
made and granted pursuant to the automatic grant program for non-employee Board
members in effect under Article Three of the Plan and are in all respects
limited by and subject to the express terms and provisions of the Plan
applicable to such automatic grants.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed in duplicate by its officer thereunto duly authorized, and the Optionee
has duly executed this Agreement in duplicate, all as of the day and year first
above written.
OEC MEDICAL SYSTEMS, INC.
By:
--------------------------------------
Title:
-----------------------------------
The Optionee hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement and the Plan.
8
<PAGE>
OPTIONEE
Optionee's current address is:
- ------------------------------------------
- ------------------------------------------
9
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EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify OEC Medical Systems, Inc. (the "Company") that I elect
to purchase shares of Common Stock of the Company (the "Purchased Shares")
----
pursuant to that certain option (the "Option") granted to me on , 19 to
--- ---
purchase up to 3,000 shares of the Company's Common Stock at an option price of
$ per share (the "Exercise Price") under the Company's 1998 Stock Option
----
Plan.
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Company, I shall hereby pay to the Company the Exercise Price
for the Purchased Shares in accordance with the provisions of my agreement with
the Company evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker/dealer remittance procedure
specified in my agreement to effect the payment of the Exercise Price for the
Purchased Shares.
- ----------------------------- -----------------------------
Date Optionee
Address:
-----------------------------
-----------------------------
Print name in exact manner
it is to appear on the
stock certificate: -----------------------------
Address to which certificate
is to be sent, if different
from address above: -----------------------------
-----------------------------
-----------------------------
Social Security Number:
-----------------------------
10
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[LETTTERHEAD OF HOLLAND & HART]
June 10, 1998
OEC Medical Systems, Inc.
384 Wright Brothers Drive
Salt Lake City, Utah 84116
Ladies and Gentlemen:
We have acted as counsel to OEC Medical Corporation, a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act of
1933 (the "Act") of 2,100,000 shares of the Company's common stock, $0.01 par
value (the "Shares"), to be offered upon the terms and subject to the conditions
set forth in the Company's 1998 Stock Option Plan, the Company's 1993 Employee
Incentive Stock Acquisition Plan, as amended and restated and the Company's 1990
Stock Option/Stock Purchase Plan (collectively, the "Plans").
In connection therewith, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the Certificate of Incorporation of
the Company, the Bylaws of the Company, the Plans, records of relevant corporate
proceedings with respect to the offering of the Shares and such other documents,
instruments and corporate proceedings with respect to the offering of the Shares
and such other documents, instruments and corporate records as we have deemed
necessary or appropriate for the expression of the opinion contained herein. We
have also reviewed the Company's Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission on June 11, 1998 with respect to the Shares.
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals of
those records, certificates and other
<PAGE>
instruments submitted to us as copies and the correctness of all statements of
fact contained in all records, certificates and other instruments that we have
examined.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and, when issued in accordance with the terms of the Plans, will
be validly issued, fully paid and non-assessable.
The opinion expressed herein is based solely upon and is limited to the
provisions of the Delaware Corporation Law and the federal laws of the United
States of America, to the extent applicable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ HOLLAND & HART LLP
<PAGE>
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
OEC Medical Systems, Inc. on Form S-8 of our report dated January 22, 1998,
appearing in and incorporated by reference in the Annual Report on Form 10-K of
OEC Medical Systems, Inc. for the year ended December 31, 1997 and to the
reference to us under the heading "Incorporation of Certain Documents by
Reference" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Salt Lake City, Utah
June 10, 1998
