SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under the Securities Act of 1933
Commission File Number: 0-3585
EVEREST & JENNINGS INTERNATIONAL LTD.
(Exact name of registrant as specified in its charter)
DELAWARE 95-2536185
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 CORPORATE SQUARE DRIVE, ST. LOUIS, MISSOURI 63132
(Address of principal executive offices) (zip code)
MEDICAL COMPOSITE TECHNOLOGY, INC.
1989 STOCK OPTION PLAN
(Full title of the plan)
BEVIL J. HOGG
President and Chief Executive Officer
EVEREST & JENNINGS INTERNATIONAL LTD.
1100 CORPORATE SQUARE DRIVE, ST. LOUIS, MISSOURI 63132
(Name and address of agent for service)
(314) 995-7000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed
Title of Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ------------- ------------ --------- ------------
Options to Purchase
Common Stock 408,054 N/A N/A N/A
Common Stock,
$.01 par value 408,054 $0.20 $81,610.80 $100.00
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Medical Composite
Technology, Inc. 1989 Stock Option Plan by reason of any stock
dividend, stock split, recapitalization or any other similar
transaction effected without the receipt of consideration which
results in an increase in the number of the Registrant's outstanding
shares of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(c) of
the Securities Act of 1933, as amended, on the basis of the weighted
average exercise price of the outstanding options.
1 of 30
<PAGE>
PART I
Information Required in Section 10(a) Prospectus
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
* Information required by Part I to be contained in the
Section 10(a) prospectus is omitted from the Registration
Statement in accordance with Rule 428 under the Securities
Act of 1933, as amended (the "1933 Act") and the Note to
Part I of Form S-8.
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Certain Documents by Reference
The Registrant hereby incorporates by reference into this Registration
Statement the following documents previously filed with the Securities and
Exchange Commission:
(1) Registrant's Annual Report on Form 10-K (File No. 0-3585) for the
fiscal year ended December 31, 1993, which contains, among other
things, the financial statements of the Registrant and certain
supplementary data for the fiscal year ended December 31, 1993,
together with the report thereon of Price Waterhouse LLP, independent
accountants.
(2) Registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994, June 30, 1994 and September 30, 1994.
(3) The description of Registrant's Common Stock contained in
Registrant's Registration Statement on Form 8-A (File No. 0-3585)
filed on November 5, 1993, which in turn cross references to
Registrant's Proxy Statement dated February 13, 1992.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities and
Exchange Act of 1934 (the "1934 Act") after the date of this Registration
Statement and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation and Bylaws permit the
Registrant to indemnify officers and directors of the Registrant to the
full extent permitted under the Delaware General Corporation Law and
applicable law. Section 145 of the Delaware General Corporation Law makes
provisions for the indemnification of officers, directors and other
corporate agents in terms sufficiently broad to indemnify such persons,
under certain circumstances, for liabilities (including reimbursement of
expenses incurred) arising under the 1933 Act.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits
Exhibit Number Exhibit
- -------------- -------
5 Opinion of Brobeck, Phleger & Harrison
23.1 Consent of Independent Accountants, Price Waterhouse LLP
23.2 Consent of Brobeck, Phleger & Harrison is contained
in Exhibit 5
24 Power of Attorney (Reference is made to page 5 of
this Registration Statement)
99.1 Medical Composite Technology, Inc. 1989 Stock Option
Plan
99.2 Form of Incentive Stock Option Agreement used in
connection with the Medical Composite Technology, Inc.
1989 Stock Option Plan
Item 9. Undertakings.
A. The undersigned Registrant undertakes: (1) to file, during
any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus
required by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the
prospectus any facts or events arising after the effective date of
this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this Registration
Statement, and (iii) to include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in
this Registration Statement; provided, however, that clauses (1)(i)
and (1)(ii) do not apply if the Registration Statement is on Form S-3
or Form S-8, and the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the 1934 Act that are incorporated by reference into this
Registration Statement; (2) that for the purpose of determining any
liability under the 1933 Act each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the Medical Composite Technology, Inc. 1989 Stock
Option Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the 1934 Act that is incorporated by reference into 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 under the 1933 Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnity provisions identified in Item 6,
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 1933 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 1933 Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 County of St. Louis, State
of Missouri, on this 6th day of December, 1994.
EVEREST & JENNINGS INTERNATIONAL LTD.
BY: (BEVIL J. HOGG)
President & Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Everest & Jennings
International Ltd., a Delaware corporation, do hereby constitute and
appoint Bevil J. Hogg and Timothy W. Evans, and each of them, the lawful
attorneys and agents, with full power and authority to do any and all acts
and things and to execute any and all instruments which said attorneys and
agents, and any one of them, determine may be necessary or advisable or
required to enable said corporation to comply with the Securities Act of
1933, as amended, and any rules or regulations or requirements of the
Securities and Exchange Commission in connection with this Registration
Statement. Without limiting the generality of the foregoing power and
authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, and to any and all amendments, both
pre-effective and post-effective, and supplements to this Registration
Statement, and to any and all instruments or documents filed as part of or
in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and
confirms all that said attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. This Power of Attorney may be signed in
several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
(BEVIL J. HOGG) President, Chief Executive
Officer and Director
(Principal Executive Officer)
(TIMOTHY W. EVANS) Vice President, Chief Financial
Officer and Secretary (Principal
Financial and Accounting Officer)
(DIANNE J. JENNINGS) Director
(ROBERT C. SHERBURNE) Director
(CHARLES D. YIE) Director
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit Page
- -------------- ------- ----
5 Opinion of Brobeck, Phleger & Harrison 8
23.1 Consent of Independent Accountants, Price
Waterhouse LLP 9
23.2 Consent of Brobeck, Phleger & Harrison is
contained in Exhibit 5 10
24 Power of Attorney (Reference is made to
page 5 of this Registration Statement) 11
99.1 Medical Composite Technology, Inc. 1989 Stock
Option Plan 12
99.2 Form of Incentive Stock Option Agreement
used in connection with the Medical Composite
Technology, Inc. 1989 Stock Option Plan 26
Exhibit 5
December 1, 1994
Everest & Jennings International Ltd.
1100 Corporate Square Drive
St. Louis, MO 63132
Re: Everest & Jennings International Ltd. (the "Company") Registration
Statement for Offering of 408,054 Shares of Common Stock
Ladies and Gentlemen:
We refer to the Company's registration on Form S-8 (the "Registration
Statement") to be filed by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to
408,054 shares of Common Stock issuable pursuant to the 1989 Stock Option
Plan of Medical Composite Technology, Inc. (the "MCT Option Plan"). We
advise you that, in our opinion, when such shares have been issued and sold
pursuant to the applicable provisions of the MCT Option Plan and in
accordance with the Registration Statement, such shares will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Securities
and Exchange Commission as Exhibit 5 to the Registration Statement.
Very truly yours,
(BROBECK, PHLEGER & HARRISON)
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated March 21, 1994,
which appears on page 25 of the Everest & Jennings International Ltd.
Annual Report on Form 10-K for the year ended December 31, 1993. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedules, which appears on page 69 of such Annual Report on Form
10-K.
(PRICE WATERHOUSE LLP)
St. Louis, Missouri
December 1, 1994
Exhibit 23.2
CONSENT OF BROBECK, PHLEGER & HARRISON
Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5 of this
Form S-8 Registration Statement.
Exhibit 24
POWER OF ATTORNEY
Reference is made to page 5 of this Registration Statement.
EXHIBIT 99.1
MEDICAL COMPOSITE TECHNOLOGY, INC.
1989 STOCK OPTION PLAN
Adopted July 15, 1989
Amended December 16, 1992
1. PURPOSE.
(a) The purpose of the Plan is to provide a means by which selected
key employees and directors (if declared eligible under paragraph 4) of and
consultants to Medical Composite Technology, Inc., a California corporation
(the "Company"), and its Affiliates, as defined in subparagraph 1(b), may
be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are
defined in Sections 425(e) and (f), respectively, of the Internal Revenue
Code of 1986, as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services
of persons now employed by or serving as consultants or directors to the
Company, to secure and retain the services of new employees/persons capable
of filling such positions, and to provide incentives for such persons to
exert maximum efforts for the success of the Company.
(d) The Company intends that the options issued under the Plan shall,
in the discretion of the Board of Directors of the Company (the "Board") or
any committee to which responsibility for administration of the Plan has
been delegated pursuant to subparagraph 2(c), be either incentive stock
options as that term is used in Section 422 of the Code ("Incentive Stock
Options"), or options which do not qualify as incentive stock options
("Supplemental Stock Options"). All options shall be separately designated
Incentive Stock Options or Supplemental Stock Options at the time of grant,
and in such form as issued pursuant to paragraph 5, and a separate
certificate or certificates shall be issued for shares purchased on
exercise of each type of option. An option designated as a Supplemental
Stock Option shall not be treated as an incentive stock option.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a committee, as provided in subparagraph
2(c). Whether or not the Board has delegated administration, the Board
shall have the final power to determine all questions of policy and
expediency that may arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted options; when and how the option shall be
granted; whether the option will be an Incentive Stock Option or a
Supplemental Stock Option; the provisions of each option granted (which
need not be identical), including the time or times during the term of each
option within which all or portions of such option may be exercised; and
the number of shares for which an option shall be granted to each such
person.
(2) To construe and interpret the Plan and options granted under it,
and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement,
in a manner and to the extent it shall deem necessary or expedient to make
the Plan fully effective.
(3) To amend the Plan as provided in paragraph 10.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the
members of which Committee shall be disinterested persons, if required and
as defined by the provisions of subparagraph 2(d). If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
subject, however, to such resolutions, not inconsistent with the provisions
of the Plan, as may be adopted from time to time by the Board. The Board
may abolish the Committee at any time and revest in the Board the
administration of the Plan. Additionally, and notwithstanding anything to
the contrary contained herein, the Board may expressly determine that the
requirement that the Committee be composed of two (2) members be waived and
may delegate administration of the Plan to any person or persons and the
term "Committee" shall apply to any person or persons to whom such
authority has been delegated.
(d) The term "disinterested person," as used in this Plan, shall mean
an administrator of the Plan, whether a member of the Board or of any
Committee to which responsibility for administration of the Plan has been
delegated pursuant to subparagraph 2(c): (i) who was not during the one
(1) year prior to service as an administrator of the Plan granted or
awarded equity securities pursuant to the Plan or any other plan of the
Company or any of its affiliates entitling the participants therein to
acquire equity securities of the Company or any of its affiliates except as
permitted by Rule 16b-3(c)(2)(i) promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") ("Rule 16b-3(c)(2)(i)"); or
(ii) who is otherwise considered to be a "disinterested person" in
accordance with Rule 16b-3(c)(2)(i) or any other applicable rules,
regulations or interpretations of the Securities and Exchange Commission.
Any such person shall otherwise comply with the requirements of Rule 16b-3
promulgated under the Exchange Act, as from time to time in effect.
(e) Any requirement that an administrator of the Plan be a
"disinterested person" shall not apply (i) prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, or (ii) if the Board or the Committee expressly declares that
such requirement shall not apply.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options
granted under the Plan shall not exceed in the aggregate four hundred
thousand (400,000) shares of the Company's common stock. If any option
granted under the Plan shall for any reason expire or otherwise terminate
without having been exercised in full, the stock not purchased under such
option shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
(c) An Incentive Stock Option may be granted to an eligible person
under the Plan only if the aggregate fair market value (determined at the
time the option is granted) of the stock with respect to which incentive
stock options (as defined in the Code) granted after 1986 are exercisable
for the first time by such optionee during any calendar year under all
incentive stock option plans of the Company and its Affiliates does not
exceed one hundred thousand dollars ($100,000). Should it be determined
that an option granted under the Plan exceeds such maximum for any reason
other than the failure of a good faith attempt to value the stock subject
to the option, such option shall be considered a Supplemental Stock Option
to the extent, but only to the extent, of such excess; provided, however,
that should it be determined that an entire option or any portion thereof
does not qualify for treatment as an incentive stock option by reason of
exceeding such maximum, such option or the applicable portion shall be
considered a Supplemental Stock Option.
4. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to key employees
(including officers) of the Company or its Affiliates. A director of the
Company shall not be eligible to receive Incentive Stock Options unless
such director is also a key employee (including an officer) of the Company
or any Affiliate. Supplemental Stock Options may be granted only to key
employees (including officers) of, directors of or consultants to the
Company or its Affiliates. A director of the Company shall not be eligible
for a Supplemental Stock Option unless such director is also an employee
(including an officer) of or consultant to the Company or Affiliate.
(b) A director shall in no event be eligible for the benefits of the
Plan unless at the time discretion is exercised in the selection of the
director as a person to whom options may be granted, or in the
determination of the number of shares which may be covered by options
granted to the directors: (i) the Board has delegated its discretionary
authority over the Plan to a Committee which consists solely of
"disinterested persons" as defined in subparagraph 2(d); or (ii) the Plan
otherwise complies with the requirements of Rule 16b-3 promulgated under
the Exchange Act, as from time to time in effect. The Board shall
otherwise comply with the requirements of Rule 16b-3 promulgated under the
Exchange Act, as from time to time in effect. This subparagraph 4(b) shall
not apply (i) prior to the date of the first registration of an equity
security of the Company under Section 12 of the Exchange Act or (ii) if the
Board or the Committee expressly declares that it shall not apply.
(c) No person shall be eligible for the grant of an option under the
Plan if, at the time of grant, such person owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or of any of its Affiliates unless the exercise price of such
option is at least one hundred ten percent (110%) of the fair market value
of such stock at the date of grant and the term of the option does not
exceed five (5) years from the date of grant.
5. OPTION PROVISIONS.
Each option shall be in such form and shall contain
such terms and conditions as the Board or the Committee shall deem
appropriate. The provisions of separate options need not be identical, but
each option shall include (through incorporation of provisions hereof by
reference in the option or otherwise) the substance of each of the
following provisions:
(a) The term of any option shall not be greater than ten (10) years
from the date it was granted.
(b) The exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the fair market value of the stock
subject to the option on the date the option is granted. The exercise
price of each Supplemental Stock Option shall be not less than eighty-five
percent (85%) of the fair market value of the stock subject to the option
on the date the option is granted.
(c) The purchase price of stock acquired pursuant to an option shall
be paid, to the extent permitted by applicable statutes and regulations,
either (i) in cash at the time the option is exercised, or (ii) at the
discretion of the Board or the Committee, either at the time of the grant
or exercise of the option, (A) by delivery to the Company of other common
stock of the Company, (B) according to a deferred payment or other
arrangement (which may include, without limiting the generality of the
foregoing, the use of other common stock of the Company) with the person to
whom the option is granted or to whom the option is transferred pursuant to
subparagraph 5(d), or (C) in any other form of legal consideration that may
be acceptable to the Board or the Committee.
In the case of any deferred payment arrangement, interest shall
be payable at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be
interest under the deferred payment arrangement.
(d) An option shall not be transferable except by will or by the laws
of descent and distribution, and shall be exercisable during the lifetime
of the person to whom the option is granted only by such person.
(e) The total number of shares of stock subject to an option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the
option may become exercisable ("vest") with respect to some or all of the
shares allotted to that period, and may be exercised with respect to some
or all of the shares allotted to such period and/or any prior period as to
which the option was not fully exercised. During the remainder of the term
of the option (if its term extends beyond the end of the installment
periods), the option may be exercised from time to time with respect to any
shares then remaining subject to the option. The provisions of this
subparagraph 5(e) are subject to any option provisions governing the
minimum number of shares as to which an option may be exercised.
(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(d), as a condition of exercising
any such option, (1) to give written assurances satisfactory to the Company
as to the optionee's knowledge and experience in financial and business
matters and/or to employ a purchaser representative reasonably satisfactory
to the Company who is knowledgeable and experienced in financial and
business matters, and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of
exercising the option; and (2) to give written assurances satisfactory to
the Company stating that such person is acquiring the stock subject to the
option for such person's own account and not with any present intention of
selling or otherwise distributing the stock. These requirements, and any
assurances given pursuant to such requirements, shall be inoperative if
(i) the issuance of the shares upon the exercise of the option has been
registered under a then currently effective registration statement under
the Securities Act of 1933, as amended (the "Securities Act"), or (ii) as
to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under
the then applicable securities laws.
(g) An option shall terminate three (3) months after termination of
the optionee's employment or relationship as a consultant or director with
the Company or an Affiliate, unless (i) such termination is due to such
person's permanent and total disability, within the meaning of Section
422(c)(6) of the Code, in which case the option may, but need not, provide
that it may be exercised at any time within one (1) year following such
termination of employment or relationship as a consultant or director; or
(ii) the optionee dies while in the employ of or while serving as a
consultant or director to the Company or an Affiliate, or within not more
than three (3) months after termination of such relationship, in which case
the option may, but need not, provide that it may be exercised at any time
within eighteen (18) months following the death of the optionee by the
person or persons to whom the optionee's rights under such option pass by
will or by the laws of descent and distribution; or (iii) the option by its
terms specifies either (a) that it shall terminate sooner than three (3)
months after termination of the optionee's employment or relationship as a
consultant or director or (b) that it may be exercised more than three (3)
months after termination of the relationship with the Company or an
Affiliate. This subparagraph 5(g) shall not be construed to extend the
term of any option or to permit anyone to exercise the option after
expiration of its term, nor shall it be construed to increase the number of
shares as to which any option is exercisable from the amount exercisable on
the date of termination of the optionee's employment or relationship as a
consultant or director.
(h) The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment or
relationship as a consultant or director with the Company or any Affiliate
to exercise the option as to any part or all of the shares subject to the
option prior to the stated vesting date of the option or of any installment
or installments specified in the option. Any shares so purchased from any
unvested installment or option may be subject to a repurchase right in
favor of the Company or to any other restriction the Board or the Committee
determines to be appropriate.
(i) To the extent provided by the terms of an option, the optionee
may satisfy any federal, state or local tax withholding obligation relating
to the exercise of such option by any of the following means or by a
combination of such means: (1) tendering a cash payment; (2) authorizing
the Company to withhold from the shares of the common stock otherwise
issuable to the participant as a result of the exercise of the stock option
a number of shares having a fair market value less than or equal to the
amount of the withholding tax obligation; or (3) delivering to the Company
owned and unencumbered shares of the common stock having a fair market
value less than or equal to the amount of the withholding tax obligation.
6. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock
required to satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the options
granted under the Plan; provided, however, that this undertaking shall not
require the Company to register under the Securities Act either the Plan,
any option granted under the Plan or any stock issued or issuable pursuant
to any such option. If, after reasonable efforts, the Company is unable to
obtain from any such regulatory commission or agency the authority which
counsel for the Company deems necessary for the lawful issuance and sale of
stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such options unless and
until such authority is obtained.
7. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options
granted under the Plan shall constitute general funds of the Company.
8. MISCELLANEOUS.
(a) Neither an optionee nor any person to whom an option is
transferred under subparagraph 5(d) shall be deemed to be the holder of, or
to have any of the rights of a holder with respect to, any shares subject
to such option unless and until such person has satisfied all requirements
for exercise of the option pursuant to its terms.
(b) Throughout the term of any option granted pursuant to the Plan,
the Company shall make available to the holder of such option, not later
than one hundred twenty (120) days after the close of each of the Company's
fiscal years during the option term, upon request, such financial and other
information regarding the Company as comprises the annual report to the
shareholders of the Company provided for in the bylaws of the Company.
(c) Nothing in the Plan or any instrument executed or option granted
pursuant thereto shall confer upon any eligible employee or optionee any
right to continue in the employ of the Company or any Affiliate (or to
continue acting as a consultant or director) or shall affect the right of
the Company or any Affiliate to terminate the employment or consulting
relationship or directorship of any eligible employee or optionee with or
without cause. In the event that an optionee is permitted or otherwise
entitled to take a leave of absence, the Company shall have the unilateral
right to (i) determine whether such leave of absence will be treated as a
termination of employment for purposes of paragraph 5(g) hereof and
corresponding provisions of any outstanding options, and (ii) suspend or
otherwise delay the time or times at which the shares subject to the option
would otherwise vest.
9. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination
of shares, exchange of shares, change in corporate structure or otherwise),
the Plan and outstanding options will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan and the
class(es) and number of shares and price per share of stock subject to
outstanding options.
(b) In the event of: (1) a merger or consolidation in which the
Company is not the surviving corporation; or (2) a reverse merger in which
the Company is the surviving corporation but the shares of the Company's
common stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of
securities, cash or otherwise then to the extent permitted by applicable
law: (i) any surviving corporation shall assume any options outstanding
under the Plan or shall substitute similar options for those outstanding
under the Plan, or (ii) such options shall continue in full force and
effect. In the event any surviving corporation refuses to assume or
continue such options, or to substitute similar options for those
outstanding under the Plan, then, with respect to options held by persons
then performing services as employees or as consultants or directors for
the Company, as the case may be, the time during which such options may be
exercised shall be accelerated and the options terminated if not exercised
prior to such event.
10. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
shareholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:
(i) Increase the number of shares reserved for options under the
Plan;
(ii) Modify the requirements as to eligibility for participation in
the Plan (to the extent such modification requires shareholder approval in
order for the Plan to satisfy the requirements of Section 422(b) of the
Code); or
(iii) Modify the Plan in any other way if such modification
requires shareholder approval in order for the Plan to satisfy the
requirements of Section 422(b) of the Code or to comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act.
(b) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide optionees
with the maximum benefits provided or to be provided under the provisions
of the Code and the regulations promulgated thereunder relating to employee
incentive stock options and/or to bring the Plan and/or incentive stock
options granted under it into compliance therewith.
(c) Rights and obligations under any option granted before amendment
of the Plan shall not be altered or impaired by any amendment of the Plan
unless (i) the Company requests the consent of the person to whom the
option was granted and (ii) such person consents in writing.
11. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate December 15, 2002. No options
may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any option granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of
the Plan, except with the consent of the person to whom the option was
granted.
12. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the
Board, but no options granted under the Plan shall be exercised unless and
until the Plan has been approved by the shareholders of the Company, and,
if required, an appropriate permit has been issued by the Commissioner of
Corporations of the State of California.
EXHIBIT 99.2
INCENTIVE STOCK OPTION
_________________________, Optionee:
Medical Composite Technology, Inc. (the "Company"), pursuant to its
1989 Stock Option Plan (the "Plan") has this day granted to you, the
optionee named above, an option to purchase shares of the common stock of
the Company ("Common Stock"). This option is intended to qualify as an
"incentive stock option" within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended from time to time (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's
employees (including officers) and is intended to comply with the
provisions of Rule 701 promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act").
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option
is ____________________ (__________). Subject to the limitations contained
herein, this option shall be exercisable with respect to each installment
shown below on or after the date of vesting applicable to such installment,
as follows:
Number of Shares Date of Earliest Exercise
(Installment) (Vesting)
2. (a) The exercise price of this option is ___________
($___________) per share, being not less than the fair market value of the
Common Stock on the date of grant of this option.
(b) Payment of the exercise price per share is due in full in cash
(including check) upon exercise of all or any part of each installment
which has become exercisable by you. Notwithstanding the foregoing, this
option may be exercised pursuant to a program developed under Regulation T
as promulgated by the Federal Reserve Board which results in the receipt of
cash (or check) by the Company prior to the issuance of Common Stock.
3. The minimum number of shares with respect to which this option
may be exercised at any one time is one thousand (1,000), except (a) as to
an installment subject to exercise, as set forth in paragraph 1, which
amounts to fewer than one thousand (1,000) shares, in which case, as to the
exercise of that installment, the number of shares in such installment
shall be the minimum number of shares, and (b) with respect to the final
exercise of this option this paragraph 3 shall not apply.
4. Notwithstanding anything to the contrary contained herein, this
option may not be exercised unless the shares issuable upon exercise of
this option are then registered under the Act or, if such shares are not
then so registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Act.
5. The term of this option commences on the date hereof and, unless
sooner terminated as set forth below or in the Plan, terminates on
_____________________ (which date shall be no more than ten (10) years from
the date this option is granted). This option shall terminate prior to the
expiration of its term as follows: three (3) months after the termination
of your employment with the Company or an affiliate of the Company (as
defined in the Plan) for any reason or for no reason unless:
(a) such termination of employment is due to your permanent and total
disability (within the meaning of Section 422A(c)(7) of the Code), in which
event the option shall terminate on the earlier of the termination date set
forth above or one (1) year following such termination of employment; or
(b) such termination of employment is due to your death, in which
event the option shall terminate on the earlier of the termination date set
forth above or eighteen (18) months after your death; or
(c) during any part of such three (3) month period the option is not
exercisable solely because of the condition set forth in paragraph 4 above,
in which event the option shall not terminate until the earlier of the
termination date set forth above or until it shall have been exercisable
for an aggregate period of three (3) months after the termination of
employment; or
(d) exercise of the option within three (3) months after termination
of your employment with the Company or with an affiliate would result in
liability under section 16(b) of the Securities Exchange Act of 1934, in
which case the option will terminate on the earlier of (i) the termination
date set forth above, (ii) the tenth (10th) day after the last date upon
which exercise would result in such liability or (iii) six (6) months and
ten (10) days after the termination of your employment with the Company or
an affiliate.
However, this option may be exercised following termination of
employment only as to that number of shares as to which it was exercisable
on the date of termination of employment under the provisions of paragraph
1 of this option.
6. (a) This option may be exercised, to the extent specified above,
by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to
such other person as the Company may designate, during regular business
hours, together with such additional documents as the Company may then
require pursuant to subparagraph 5(c) of the Plan.
(b) By exercising this option you agree that:
(i) the Company may require you to enter an arrangement providing for the
payment by you to the Company of any tax withholding obligation of the
Company arising by reason of (1) the exercise of this option; (2) the lapse
of any substantial risk of forfeiture to which the shares are subject at
the time of exercise; or (3) the disposition of shares acquired upon such
exercise;
(ii) you will notify the Company in writing within fifteen (15) days after
the date of any disposition of any of the shares of the Common Stock issued
upon exercise of this option that occurs within two (2) years after the
date of this option grant or within one (1) year after such shares of
Common Stock are transferred upon exercise of this option; and
(iii) the Company (or a representative of the underwriters) may, in
connection with the first underwritten registration of the offering of any
securities of the Company under the Act, require that you not sell or
otherwise transfer or dispose of any shares of Common Stock or other
securities of the Company during such period (not to exceed one hundred
twenty (120) days) following the effective date (the "Effective Date") of
the registration statement of the Company filed under the Act as may be
requested by the Company or the representative of the underwriters;
provided, however, that such restriction shall apply only if, on the
Effective Date, you are an officer, director, or owner of more than one
percent (1%) of the outstanding securities of the Company. For purposes of
this restriction you will be deemed to own securities which (i) are owned
directly or indirectly by you, including securities held for your benefit
by nominees, custodians, brokers or pledgees; (ii) may be acquired by you
within sixty (60) days of the Effective Date; (iii) are owned directly or
indirectly, by or for your brothers or sisters (whether by whole or half
blood) spouse, ancestors and lineal descendants; or (iv) are owned,
directly or indirectly, by or for a corporation, partnership, estate or
trust of which you are a shareholder, partner or beneficiary, but only to
the extent of his proportionate interest therein as a shareholder, partner
or beneficiary thereof. You further agree that the Company may impose
stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such period.
7. This option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by you.
8. This option is not an employment contract and nothing in this
option shall be deemed to create in any way whatsoever any obligation on
your part to continue in the employ of the Company, or of the Company to
continue your employment with the Company.
9. Any notices provided for in this option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate
by written notice to the Company.
10. This option is subject to all the provisions of the Plan, a copy
of which is attached hereto and its provisions are hereby made a part of
this option, including without limitation the provisions of paragraph 5 of
the Plan relating to option provisions, and is further subject to all
interpretations, amendments, rules and regulations which may from time to
time be promulgated and adopted pursuant to the Plan. In the event of any
conflict between the provisions of this option and those of the Plan, the
provisions of the Plan shall control.
Dated the _____ day of _____________, 19_____.
Very truly yours,
MEDICAL COMPOSITE TECHNOLOGY, INC.
By: ______________________________________
Duly authorized on behalf
of the Board of Directors
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with
respect to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee and the
Company and its affiliates regarding the acquisition of stock in the
Company and supersedes all prior oral and written agreements on that
subject with the exception of the following agreements only:
NONE _________
(Initial)
OTHER ________________________________
________________________________
________________________________
______________________________
Optionee
Address: ______________________________
______________________________
Attachments:
1989 Stock Option Plan
Notice of Exercise
