<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 21, 1996
REGISTRATION NO. 333-___________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________________________
CARDIODYNAMICS INTERNATIONAL CORPORATION
(Exact name of issuer as specified in its charter)
CALIFORNIA 95-3533362
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6155 CORNERSTONE COURT EAST, SUITE 125
SAN DIEGO, CALIFORNIA 92121
(Address of Principal Executive Office) (Zip Code)
--------------------------------------
1995 STOCK OPTION/STOCK ISSUANCE PLAN
(as amended and restated through August 15, 1995)
(Full title of the plan)
--------------------------------------
RICHARD E. OTTO
President and Chief Executive Officer
CARDIODYNAMICS INTERNATIONAL CORPORATION
6155 CORNERSTONE COURT EAST, SUITE 125
SAN DIEGO, CALIFORNIA 92121
(Name and address of agent for service)
Telephone number, including area code, of agent for service:
(619) 535-0202
---------------------------------------
Copies to:
HAYDEN J. TRUBITT, ESQ.
BROBECK, PHLEGER & HARRISON LLP
550 West C Street, Suite 1300
San Diego, California 92101
--------------------------------------
This Registration Statement shall become effective
immediately upon filing with the Securities and
Exchange Commission, and sales of the registered
securities will begin as soon as reasonably
practicable after such effective date.
--------------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------
Title of Proposed maximum Proposed maximum
securities to Amount to be offering price aggregate Amount of
be registered registered per share offering price registration fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (under 1995 1,529,000(1) $3.91(2) $5,978,390 $1,812(2)
Stock Option/Stock
Issuance Plan
</TABLE>
_________________
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1995 Stock Option/Stock Issuance
Plan by reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the receipt of consideration which results
in an increase in the number of the Company's outstanding shares of Common
Stock.
(2) Calculated solely for the purposes of this offering under Rule 457(h) and
Rule 457(c) of the Securities Act of 1933, as amended, on the basis of the last
sale reported per share of Common Stock of CardioDynamics International
Corporation on October 16, 1996 as reported on the NASD Over the Counter
Bulletin Board.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
CardioDynamics International Corporation (the "Registrant" or "Company") hereby
incorporates by reference into this Registration Statement the following
documents previously filed with the Securities and Exchange Commission (the
"Commission"):
(a) the Registrant's Annual Report on Form 10-KSB for the fiscal year
ended November 30, 1995, filed with the Commission pursuant to
Section 13(a) of the Securities Exchange Actof 1934 (the
"Exchange Act").
(b) the Registrant's Quarterly Reports on Form 10-QSB for the fiscal
quarters ended February 29, 1996, May 31, 1996 and August 31,
1996, filed with the Commission pursuant to Section 13(a) of
the Exchange Act.
(c) the Registrant's Registration Statement on Form 8-A filed with
the Commission on April 19, 1984 pursuant to Section 12 of the
Exchange Act, in which there is described the terms, rights
and provisions applicable to the Registrant's Common Stock.
All documents filed by Registrant pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange 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
(a) Section 317 of the California General Corporation Law provides for
the indemnification of officers and directors of the Company against expenses,
judgments, fines and amounts paid in settlement under certain conditions and
subject to certain limitations.
(b) Article Three of the Bylaws of the Company provides that the
Company shall indemnify any person who is or was a director, officer, employee
or agent of the Company (or predecessor corporation of the Company), or any
person who is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, subject to certain
limitations. In addition, expenses incurred by a director, officer, employee or
agent in defending a civil or criminal action, suit or proceeding by reason of
the fact that he or she is or was a director, officer, employee or agent of the
Company may be paid by the Company in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the Company.
(c) Article Five of the Company's Articles of Incorporation, as
amended (the "Articles") provides that no director of the Company shall be
liable for monetary damages in an action by or in the right of the Company for
breach of a director's duties to the Company and its shareholders, as set forth
in Section 309 of the California Corporations Code, provided however that:(a)
such provision does not eliminate or limit the liability
II-1
<PAGE>
of a director of the Company: (i) for acts or omissions that involve intentional
misconduct or a knowing or culpable violation of law, (ii) for acts or omissions
that a director of the Company believes to be contrary to the best interests of
the Company or its shareholders or that involves the absence of good faith on
the part of a director of the Company, (iii) or any transaction from which a
director of the Company derives an improper personal benefit, (iv) for acts or
omissions that show a reckless disregard of the director's duty to the Company
or its shareholders in circumstances in which the director was aware, or should
have been aware in the ordinary course of performing the director's duties, of a
risk of serious injury to the Company or its shareholders, (v) for acts or
omissions that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the Company or its shareholders, (vi) under
Section 310 of the California Corporations Code, or (vii) under Section 316 of
the California Corporations Code; such provision eliminating liability shall not
eliminate or limit the ability of an officer for any act or omission as an
officer notwithstanding that the officer is also a director or that his or her
actions, if negligent or improper, have been ratified by the directors.
The Company is authorized to provide indemnification of its
agents (as defined in Section 317 of the California Corporations Code) for
breach of duty to the Company and its shareholders through bylaw provisions or
through agreements with the agents, or both, in excess of the indemnification
otherwise permitted by Section 317 of the California Corporations Code, subject
to the limits on such excess indemnification set forth in Section 204 of the
California Corporations Code.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
Exhibit Number Exhibit
- -------------- -------
5.1 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.1.
23.2 Consent of Independent Auditors, Peterson & CO.
24.1 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1* 1995 Stock Option/Stock Issuance Plan (as amended and restated
through August 15, 1995).
99.2 Form of Stock Option Agreement.
99.3 Form of Notice of Grant.
* This exhibit was previously filed as part of, and is hereby incorporated by
reference to Exhibit 10.2 filed with the Company's quarterly report on Form
10-QSB (Commission No. 0-11868) for the quarter ended August 31, 1995.
Item 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933, (ii) to reflect in the
prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement, 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, (1) that
clauses (1)(i) and (1)(ii) shall not apply if 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 Securities Exchange Act of 1934 that are incorporated by reference into
this Registration Statement; (2) that for the purpose of determining any
liability under the Securities Act of 1933 each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and (3) that the Registrant shall
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold upon the termination of the
Registrant's 1995 Stock Option/Stock Issuance Plan.
II-2
<PAGE>
B. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the indemnity provisions incorporated by
reference in Item 6, or otherwise, the Registrant has been informed 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.
II-3
<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 San Diego, State of California, on this 17th day
of October 1996.
CARDIODYNAMICS INTERNATIONAL CORPORATION
By /s/ Richard E. Otto
-----------------------------------
Richard E. Otto
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of CardioDynamics
International Corporation, a California corporation, do hereby constitute and
appoint Richard E. Otto and Stephen P. Loomis, and each of them, the lawful
attorneys-in-fact 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 either 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,
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 that all said attorneys and agents, or either 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, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Richard E. Otto President, Chief Executive October 17, 1996
- --------------------------- Officer and Director
Richard E. Otto (Principal Executive Officer)
/s/ Stephen P. Loomis Vice President, Finance October 17, 1996
- --------------------------- (Principal Accounting
Stephen P. Loomis Officer)
II-4
<PAGE>
/s/ Stephenson M. Dechant Director and Chief Financial October 17, 1996
- --------------------------- Officer
Stephenson M. Dechant
/s/ William P. Cordeiro Director October 17, 1996
- ---------------------------
William P. Cordeiro
/s/ Nicholas V. Diaco Director October 17, 1996
- ---------------------------
Nicholas V. Diaco, M.D.
/s/ James C. Gilstrap Director October 17, 1996
- ---------------------------
James C. Gilstrap
/s/ Roger S. Kolasinski Director October 17, 1996
- ---------------------------
Roger S. Kolasinski
/s/ Michael D. Padilla Director October 17, 1996
- ---------------------------
Michael D. Padilla
/s/ Allen E. Paulson Director October 17, 1996
- ---------------------------
Allen E. Paulson
/s/ Barry M. Zwick Director October 17, 1996
- ---------------------------
Barry M. Zwick
II-5
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER THE
SECURITIES ACT OF 1933
CARDIODYNAMICS INTERNATIONAL CORPORATION
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit
- -------------- -------
5.1 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Brobeck, Phleger & Harrison LLP is contained
in Exhibit 5.1.
23.2 Consent of Independent Auditors, Peterson & CO.
24.1 Power of Attorney. Reference is made to page II-4 of
this Registration Statement.
99.1* 1995 Stock Option/Stock Issuance Plan (as amended and
restated through August 15, 1995).
99.2 Form of Stock Option Agreement.
99.3 Form of Notice of Grant.
* This exhibit was previously filed as part of, and is hereby incorporated by
reference to Exhibit 10.2 filed with the Company's quarterly report on Form
10-QSB (Commission No. 0-11868) for the quarter ended August 31, 1995.
<PAGE>
Exhibit 5.1
Opinion and consent of Brobeck, Phleger & Harrison LLP
<PAGE>
October 17, 1996
CardioDynamics International Corporation
6155 Cornerstone Court East
Suite 125
San Diego, California 92121
Re: CARDIODYNAMICS INTERNATIONAL CORPORATION REGISTRATION
STATEMENT FOR OFFERING OF 1,529,000 SHARES OF COMMON STOCK
Ladies and Gentlemen:
In connection with the registration of 1,529,000 shares of the Common
Stock of CardioDynamics International Corporation (the "Company") under the
Company's 1995 Stock Option/Stock Issuance Plan (as amended and restated through
August 15, 1995) on Form S-8 (the "Registration Statement") under the Securities
Act of 1933, as amended, we advise you that, in our opinion, if and when such
shares have been issued and sold pursuant to the provisions of the Company's
1995 Stock Option/Stock Issuance Plan and in accordance with the Registration
Statement, such shares will be duly-authorized, validly-issued, fully-paid and
non-assessable shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the use, in the Registration Statement of Cardiodynamics
International Corporation (the "Company") on Form S-8, of our report, dated
January 12, 1996, the financial statements of the Company for the years ending
November 30, 1995 and 1994.
PETERSON & CO.
San Diego, California
October 17, 1996
<PAGE>
Exhibit 99.2
Form of Stock Option Agreement
<PAGE>
CARDIODYNAMICS INTERNATIONAL CORPORATION
STOCK OPTION AGREEMENT
RECITALS
A. The Board of Directors of CardioDynamics International
Corporation (the "Corporation") has adopted the CardioDynamics International
Corporation 1995 Stock Option/Stock Issuance Plan (the "Plan") for the purpose
of attracting and retaining the services of persons who contribute to the growth
and financial success of the Corporation.
B. The Optionee specified in the accompanying Notice of Grant of
Stock Option (the "Grant Notice") is a person whom the Plan Administrator
believes has and will contribute to the growth and financial success of the
Corporation and this Agreement is intended to carry out the purposes of the
Plan.
AGREEMENT
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions
set forth in this Agreement, the Corporation hereby grants to Optionee, as of
the grant date (the "Grant Date") specified in the Grant Notice, a stock option
to purchase up to that number of shares of the Corporation's Common Stock (the
"Option Shares") as is specified in the Grant Notice. The Option Shares shall
be purchasable from time to time during the option term at the option price per
share (the "Option Price") specified in the Grant Notice.
2. OPTION TERM. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall expire at the close of business on
the expiration date (the "Expiration Date") specified in the Grant Notice,
unless sooner terminated in accordance with Paragraph 5.
3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.
4. DATES OF EXERCISE. This option shall thereupon become
exercisable for the Option Shares in one or more installments as is specified in
the Grant Notice. As the option becomes exercisable in one or more
installments, the installments shall accumulate and the option shall remain
exercisable for such installments until the Expiration Date or the sooner
termination of the option term under Paragraph 5 of this Agreement.
5. ACCELERATED TERMINATION OF OPTION TERM. The option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
exercisable) prior to the Expiration Date should any of the following provisions
become applicable:
(i) Except that this option shall immediately terminate at the
time of Optionee's termination for cause and except as provided in
subparagraph (ii) or (iii) below, should Optionee cease to remain in
Service while this option is outstanding, then the period for exercising
this option shall be reduced to a three (3)-month period commencing with
the date of such cessation of Service, but in no event shall this option be
exercisable at any time after the Expiration Date. Upon the expiration of
such three (3)-month period or (if earlier) upon the Expiration Date, or
(if applicable) immediately at the time of Optionee's termination for
cause, this option shall terminate and cease to be outstanding.
(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 law of descent and distribution shall have the
right to exercise this option. Such right shall lapse and this option
shall cease to be exercisable upon the EARLIER of (A) the expiration of the
twelve (12) month period measured from the date of Optionee's death or (B)
the
<PAGE>
Expiration Date. Upon the expiration of such twelve (12) month period or
(if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding.
(iii) Should Optionee become Permanently Disabled and cease by
reason thereof to remain in Service while this option is outstanding, then
the Optionee shall have a period of twelve (12) months (commencing with the
date of such cessation of Service) during which to exercise this option,
but in no event shall this option be exercisable at any time after the
Expiration Date. Upon the expiration of such limited period of
exercisability or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding.
(iv) During the limited period of exercisability applicable under
subparagraph (i), (ii) or (iii) above, this option may be exercised for any
or all of the Option Shares for which this option is, at the time of the
Optionee's cessation of Service, exercisable in accordance with the
exercise schedule specified in the Grant Notice and the provisions of the
Plan.
(v) This option, to the extent not previously exercised, shall
terminate and cease to be exercisable upon the consummation of a Corporate
Transaction unless this option is expressly assumed by the successor
corporation or Parent thereof.
6. ADJUSTMENT IN OPTION SHARES. In the event any change is made to
the Corporation's outstanding Common Stock by reason of any stock split, stock
dividend, combination of shares, exchange of shares, or other change affecting
the outstanding Common Stock as a class without receipt of consideration, then
appropriate adjustments shall be made to (i) the total number of Option Shares
subject to this option, (ii) the number of Option Shares for which this option
is to be exercisable from and after each installment date specified in the Grant
Notice and (iii) the Option Price payable per share in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.
7. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall
not have any of the rights of a shareholder with respect to the Option Shares
until such individual shall have exercised the option and paid the Option Price.
8. MANNER OF EXERCISING OPTION.
A. In order to exercise this option with respect to all or any part
of the 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 Corporation written
notice of exercise; (ii) pay the aggregate Option Price for the purchased shares
in one or more forms approved under Article Two, Section 1.A(2) of the Plan; and
(iii) furnish to the Corporation 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 Paragraph 8.A of this Agreement has been fully satisfied.
C. As soon after the Exercise Date as practical, the Corporation
shall mail or deliver to Optionee or to the other person or persons exercising
this option a certificate or certificates representing the shares so purchased
and paid for, with the appropriate legends affixed thereto.
D. In no event may this option be exercised for any fractional
shares.
9. COMPLIANCE WITH LAWS AND REGULATIONS.
2
<PAGE>
A. The exercise of this option and the issuance of Option Shares
upon such exercise shall be subject to compliance by the Corporation and the
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange or national market system on which
shares of the Common Stock may be listed at the time of such exercise and
issuance.
B. In connection with the exercise of this option, Optionee shall
execute and deliver to the Corporation such representations in writing as may be
requested by the Corporation in order for it to comply with the applicable
requirements of Federal and State securities laws.
10. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraph 3, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Corporation.
11. LIABILITY OF CORPORATION.
A. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without shareholder
approval be issued under the Plan, then this option shall be void with respect
to such excess shares, unless Board of Directors and shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.
B. The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at its principal corporate
offices. Any notice required to be given or delivered to Optionee shall be in
writing and addressed to Optionee at the address indicated below Optionee's
signature line on the Grant Notice. Either party may change its address for
notice by giving written notice of such change. All notices shall be deemed to
have been given or delivered upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.
13. LOANS. The Plan Administrator may, in its absolute discretion
and without any obligation to do so, assist the Optionee in the exercise of this
option by (i) authorizing the extension of a loan to the Optionee from the
Corporation or (ii) permitting the Optionee to pay the option price for the
purchased Common Stock in installments over a period of years. The terms of any
such loan or installment method of payment (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.
14. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. Capitalized terms not
otherwise defined within this Agreement shall have the meanings ascribed to them
in the Plan, unless the context clearly requires otherwise. 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 on all persons having an
interest in this option.
15. GOVERNING LAW. The interpretation, performance, and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.
3
<PAGE>
16. WITHHOLDING. Optionee hereby agrees (as a precondition to
exercise) to make appropriate arrangements with the Corporation or Parent or
Subsidiary corporation employing Optionee for the satisfaction of all Federal,
State or local income tax withholding requirements and Federal social security
employee tax requirements applicable to the exercise of this option.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. Should this
option be designated in the Grant Notice as immediately exercisable and as an
incentive stock option, then this option shall not become exercisable in the
calendar year in which granted if (and to the extent) the aggregate fair market
value (determined at the Grant Date) of the Corporation's Common Stock for which
this option would otherwise first become exercisable in such calendar year
would, when added to the aggregate fair market value (determined as of the
respective date or dates of grant) of the Common Stock for which this option or
one or more other incentive stock options granted to the Optionee prior to the
Grant Date (whether under the Plan or any other option plan of the Corporation
or its Parent or Subsidiary corporations) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. To the extent the exercisability of this option is deferred by
reason of the foregoing limitation, the deferred portion will first become
exercisable in the first calendar year or years thereafter in which the One
Hundred Thousand Dollar ($100,000) limitation of this Paragraph 17 would not be
contravened.
4
<PAGE>
Exhibit 99.3
Form of Notice of Grant
5
<PAGE>
CARDIODYNAMICS INTERNATIONAL CORPORATION
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following stock option grant (the
"Option") pursuant to the 1995 STOCK OPTION/STOCK ISSUANCE PLAN (the "Plan") to
purchase shares of the Common Stock of CardioDynamics International Corporation
(the "Corporation"):
OPTIONEE: ____________________________________________________________
GRANT DATE: __________________________________________________________
GRANT NUMBER: ____________ OPTION PRICE: $___________ per share
VESTING COMMENCEMENT DATE: ___________________________________________
NUMBER OF OPTION SHARES: _____________________________ shares
EXPIRATION DATE: _____________________________________________________
TYPE OF OPTION: _____ Incentive Stock Option
_____ Non-Statutory Stock Option
DATE EXERCISABLE: This Option may be exercised for all or any portion
of the vested Option Shares, any time before the Option expires or terminates.
VESTING SCHEDULE: The Option shall vest in a series of successive
equal monthly installments over each of the first _________ months of Service
completed by the Optionee after the Vesting Commencement Date.
ACCELERATION RIGHTS. Notwithstanding the above, the Option as to all
Option Shares will become fully vested immediately prior to the occurrence of a
Corporate Transaction.
OTHER TERMS. Optionee understands that the Option is granted pursuant
to the Corporation's Plan. By signing below, Optionee agrees to be bound by the
terms and conditions of the Plan and the terms and conditions of the Option as
set forth in the Stock Option Agreement attached hereto as Exhibit A. Optionee
hereby acknowledges receipt of a copy of the Plan in the form attached hereto as
Exhibit B. Capitalized terms used herein which are not otherwise defined shall
have the meaning assigned in the attached Exhibits.
NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Notice or in the
Stock Option Agreement or the Plan shall confer upon the Optionee any right to
continue in the Service of the Corporation for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Corporation
or the Optionee, which rights are hereby expressly reserved by each, to
terminate Optionee's Service at any time for any reason whatsoever, with or
without cause.
6
<PAGE>
_________________ , 199__
Date
CardioDynamics International Corporation
By _____________________________________
Title: _________________________________
________________________________________
Optionee
Address:
________________________________________
________________________________________
7
