<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 14, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------
SUNRISE MEDICAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-3836867
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
----------------------------------
2382 FARADAY AVENUE, SUITE 200
CARLSBAD, CALIFORNIA 92008
(Address of Principal Executive Offices including Zip Code)
----------------------------------
SENTIENT SYSTEMS TECHNOLOGY, INC.
1993 EMPLOYEE STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
----------------------------------
STEVEN A. JAYE COPY TO:
SENIOR VICE PRESIDENT, SECRETARY JEFFREY T. PERO, ESQ.
AND GENERAL COUNSEL LATHAM & WATKINS
SUNRISE MEDICAL, INC. 650 TOWN CENTER DRIVE, TWENTIETH FLOOR
2382 FARADAY AVENUE, SUITE 200 COSTA MESA, CALIFORNIA 92626
CARLSBAD, CALIFORNIA 92008 (714) 540-1235
(760) 930-1500
----------------------------------
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------------------
<TABLE>
<CAPTION>
<S><C>
- -----------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TO BE OFFERING AGGREGATE AMOUNT OF
REGISTERED PRICE OFFERING REGISTRATION
PER SHARE (1) PRICE (1) FEE
- -----------------------------------------------------------------------------------------------
Common Stock 156,630 $1.31 $205,655.19 $60.67
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h). The Proposed Maximum Offering Price Per Share is
the weighted average exercise price of outstanding options to purchase
shares being registered pursuant hereto.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPOSED SALE TO TAKE PLACE AS SOON AFTER THE EFFECTIVE DATE OF THE REGISTRATION
STATEMENT AS OPTIONS GRANTED UNDER THE OPTION PLAN ARE EXERCISED.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Sunrise Medical, Inc. (the "Company")
with the Securities and Exchange Commission (the "Commission") are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended June 27, 1997;
(b) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended September 26, 1997 and December 26, 1997;
(c) The description of the Company's Common Stock contained in
the Company's registration statement on Form 8-A filed with the
Commission on June 29, 1992;
(d) The description of the Company's Common Share Purchase
Rights contained in the Company's registration statement on Form 8-A
filed with the Commission on June 29, 1992, as amended by the
description contained in the Company's registration statement on Form
8-A/A filed with the Commission on May 16, 1997; and
(e) The Company's Current Report on Form 8-K filed with the
Commission on February 19, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended (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 have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
of it from the respective dates of filing such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
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 102(b)(7) of the Delaware General Corporation Law permits a
Delaware corporation to limit the personal liability of its directors in
accordance with the provisions set forth therein. The Certificate of
Incorporation, as amended, of the Company provides that the personal liability
of its directors shall be limited to the fullest extent permitted by applicable
law.
Section 145 of the Delaware General Corporation Law contains provisions
permitting corporations to indemnify any person who is or was a director,
officer, employee or agent of the corporation, or who is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership,
2
<PAGE>
joint venture, trust or other enterprise, in accordance with the provisions set
forth therein. The Bylaws of the Company generally provide for indemnification
of such persons to the fullest extent allowed by applicable law.
The inclusion of the above provisions in the Certificate of
Incorporation may have the effect of reducing the likelihood of stockholder
derivative suits against directors and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty of
care, even though such an action, if successful, might otherwise have benefited
the Company and its stockholders.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
See Index to Exhibits on page 7.
Item 9. UNDERTAKINGS
(a) The Company 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, as amended (the
"Securities 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 paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in 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.
3
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for expenses incurred or paid by a
director, officer or controlling person of the Company 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
Company 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.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company
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 Carlsbad, State of California, on April 10, 1998.
SUNRISE MEDICAL INC.
By: /s/ Ted N. Tarbet
-----------------------------------
Ted N. Tarbet, Senior Vice President and
Chief Financial Officer
5
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and
appoints Richard H. Chandler and Ted N. Tarbet as attorneys-in-fact and agents,
each acting alone, with full powers of substitution to sign on his behalf,
individually and in the capacities stated below, and to file any and all
amendments, including post-effective amendments, to this registration statement
and other documents in connection therewith, with the Securities and Exchange
Commission, granting to said attorneys-in-fact and agents full power and
authority to perform any other act on behalf of the undersigned required to be
done.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ R. H. Chandler Chairman, President and April 10, 1998
- ------------------------------ Chief Executive Officer
Richard H. Chandler (Principal Executive Officer)
/s/ Ted N. Tarbet Senior Vice President and April 10, 1998
- ------------------------------ Chief Financial Officer
Ted N. Tarbet (Principal Financial Officer)
/s/ John M. Radak Vice President and Controller April 10, 1998
- ------------------------------ (Principal Accounting Officer)
John M. Radak
/s/ Lee A. Ault Director April 10, 1998
- ------------------------------
Lee A. Ault III
/s/ Babette Heimbuch Director April 10, 1998
- ------------------------------
Babette Heimbuch
/s/ Murray H. Hutchison Director April 10, 1998
- ------------------------------
Murray H. Hutchison
/s/ William L. Pierpoint Director April 10, 1998
- ------------------------------
William L. Pierpoint
/s/ J. Stemler Director April 10, 1998
- ------------------------------
Joseph Stemler
/s/ J. R. Woodhull Director April 10, 1998
- ------------------------------
J.R. Woodhull
6
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
- -------
4.1 Sentient Systems Technology, Inc. 1993 Employee Stock Option
Plan.
4.2 Sentient Systems Technology, Inc. Stock Option Agreement Under
1993 Employee Stock Option Plan.
5.1 Opinion of Latham & Watkins.
23.1 Consent of Latham & Watkins (included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.
24 Power of Attorney (included in the signature page to this
Registration Statement).
7
<PAGE>
SENTIENT SYSTEMS TECHNOLOGY, INC.
1993 EMPLOYEE STOCK OPTION PLAN
(AS ASSUMED BY SUNRISE MEDICAL INC.)
1. PURPOSE
The purpose of the 1993 Employee Stock Option Plan (the "Plan") is to
motivate and provide an incentive for selected employees of SUNRISE MEDICAL INC.
(the "Company"), as successor to Sentient Systems Technology, Inc., and its
subsidiaries, to exert their best efforts on behalf of their employer by
enabling and encouraging such individuals to acquire a greater stock interest in
the Company, thereby increasing their proprietary interest in the business,
encouraging their continued service and promoting the interests of the Company
and all its Stockholders.
2. DEFINITIONS
(a) "Board" - the Board of Directors of the Company.
(b) "Common Stock" - the common stock of the Company.
(c) "Fair Market Value" - the "fair market value" per share of Common
Stock on a given date shall be determined by the Board with full
authority and discretion, taking into account all factors customarily
considered in determining fair market value.
(d) "Financial Statements" - the financial statements of the Company.
(e) "Options" - grants of Options to purchase shares of Common Stock
under the Plan. Options may be Incentive Stock Options, granted
pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or may be Non-Qualified Stock Options. In no
event shall tandem Incentive Stock Options/Non-Qualified Stock Options
be granted, and the exercise of any Option hereunder shall not effect
the right to exercise another Option. A Participant's Option
Agreement shall specify whether the participant has been granted an
Incentive Stock Option or a Non-Qualified Stock Option.
(f) "Option Right" - the right to purchase a share of Common Stock
upon exercise of an Outstanding Option.
(g) "Outstanding Option" - at any time, an Option to purchase Common
Stock granted by the Company pursuant to the Plan, whether or not such
Option is at such time exercisable, to the extent that such Option at
such time has not been exercised and has not terminated.
<PAGE>
(h) "Participants" - employees to whom Options have been granted
under the Plan. When appropriate, and when the incapacity or death of
a Participant does not terminate or limit his rights under the Plan,
the term "Participant" shall also be deemed to refer, in the event of
the death or incapacity of a Participant, to his legal representative.
(i) "Employee" and "outstanding" have the meanings assigned to them
in Section 422 or 424 of the Code.
3. ADMINISTRATION
(a) Administrative Committee. This Plan shall be administered by the
Board, who are not entitled to participate in this Plan. The Board
may, from time to time, issue orders or adopt resolutions, not
inconsistent with the provisions of this Plan, to interpret the
provisions and supervise the administration of the Plan. All
determinations shall be made by an affirmative vote of a majority of
the members of the Board at a meeting called for such purpose, or
reduced to writing and signed by a majority of the members of the
Board. Subject to the Company By-laws, all decisions made in
selecting optionees, establishing the number of shares and terms
applicable to each Option, and in construing the provisions of this
Plan shall be final, conclusive and binding on all persons including
the Company, shareholders, employees and optionees.
(b) Option Agreement. Each Option shall be evidenced by an Option
Agreement which shall contain such terms and conditions as may be
approved by the Board, and shall be signed by an officer of the
Company and the applicable Participant.
4. EFFECTIVE DATE AND DURATION
The Plan became effective as of March 12, 1993. Unless sooner terminated
by the Board, the Plan will terminate on March 11, 2003, and no Options may be
made or granted under the Plan after such date; however, shares issuable upon
the exercise of Options granted on or prior to such date may be subsequently
delivered or made to Participants in accordance with the terms and conditions
applicable to their respective Options.
5. ELIGIBILITY
Only persons regularly employed on a full-time basis by the Company or its
subsidiaries are eligible to receive Options. The Participants shall be
selected from time to time by the Board, on the recommendation of the Officers
of the Company, from among those eligible. No employee shall be granted an
Incentive Stock Option if he personally owns voting stock having more than 10%
of the total combined voting power of all classes of outstanding stock of the
Company.
2
<PAGE>
6. AMENDMENT AND TERMINATION OF THE PLAN
The Board may at any time terminate the Plan, or from time to time make
such amendments thereto, including additions or deletions, as the Board deems
advisable, except that no amendment may adversely affect any Option previously
made or granted to a Participant. No amendment shall be made, however, unless
approved by the Stockholders of the Company, which would (a) increase the
maximum number of shares as to which Options may be granted, (b) extend the
period during which Options may be granted or made or (c) materially modify the
requirements as to eligibility for participation in the Plan.
7. MISCELLANEOUS PROVISIONS
(a) Employment. No employee shall have any claim or right to be
granted an Option under the Plan. Neither the Plan nor any action
taken hereunder shall be construed as giving any employee any right to
be retained in the employ of the Company or any of its subsidiaries,
or to limit the right of the Company or any subsidiary to terminate
the employment of any Participant at any time, or to change the terms
of such employment.
(b) Nonalienation of Benefits. A Participant's rights and interests
under the Plan may not be assigned or transferred, in whole or in
part, either directly or by operation of law or otherwise (except as
specifically provided by the Plan in the event of a Participant's
death or pursuant to a Qualified Domestic Relations Order), including
but not by way of limitation by execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, and no such
right or interest of any Participant shall be subject to any
obligation or liability of such Participant.
(c) Effect Upon Other Compensation Plans. The Plan and its
operations shall not affect any other compensation or incentive plan
in effect for the Company and its subsidiaries, and the Plan shall not
preclude the Board from establishing any other forms of incentive or
compensation for employees of the Company and its subsidiaries.
8. STOCK SUBJECT TO THE PLAN; EFFECT OF REORGANIZATION.
(a) Shares Which May Be Subject To Options Granted. Subject to
adjustments made pursuant to subsection (b) of this Section 8, the
total number of shares which may be granted under the Plan (which
shares may be authorized but unissued shares or treasury shares) is
Two Hundred and Twenty-Seven Thousand (227,000) shares of Common
Stock. To the extent that any Options under the Plan shall expire or
terminate, in whole or in part, without having been exercised, the
number of shares subject thereto shall again become available for the
granting of Options under the Plan and they may thus be reoptioned.
3
<PAGE>
(b) Effect of Reorganization.
(i) In the event there is a change in, reclassification,
subdivision or combination of, stock dividend on, or exchange of
stock or other securities of the Company for the outstanding
Common Stock, or other similar event, the maximum number and
class of shares subject to Options theretofore granted under the
Plan and the price per share payable upon exercise of such
Options shall be appropriately adjusted by the Board, whose
determination shall be conclusive.
(ii) If, prior to the expiration of any Option granted under
the Plan, there shall be a merger, consolidation or
reorganization of the Company with another corporation in which
the Company is not the surviving corporation, the holder of any
then outstanding Option shall thereafter be entitled to receive,
upon exercise of the unexercised portion of the Option, the same
number and kind of shares, securities or other property
(including cash) as he would have received had he exercised the
unexercised portion of the Option immediately prior to such
merger, consolidation or reorganization. Notwithstanding the
foregoing and with reference to the transactions described in the
preceding sentence, any Participant may agree to the assumption
of his Option by a corporation other than the Company or the
substitution of a stock option of a corporation other than the
Company for his Option.
9. PROCEDURE FOR GRANTING OF OPTIONS AND RELATED MATTERS
(a) Board to Make Determination. Subject to the terms, provisions
and conditions of the Plan, the Board, shall (i) select the employees
to whom Options shall be granted, (ii) determine whether a designated
employee shall receive an Incentive Stock Option or a Non-Qualified
Stock Option, (iii) determine the number of shares subject to each
Option, (iv) determine the time or times when Options will be granted,
(v) determine the time or times when each Option may be exercised
within the limits stated in the Plan, and (vi) establish the fair
market value of the shares. However, if the Board shall fail to
designate the type of Option granted to any individual employee, such
Option shall be an Incentive Stock Option. The appropriate officers
of the Company shall prescribe the form, which shall be consistent
with the Plan, of the instruments evidencing any Options granted
hereunder.
(b) Requisite Action by Participants. As a condition to the granting
of an Option, each Participant shall be required to enter into an
Option Agreement with the Company which shall contain such provisions
consistent with the Plan as may be prescribed by the Board, including
such restrictions as to the transferability of the shares to be issued
upon the exercise of an Option as the Board may, in its discretion,
deem appropriate. Such restrictions may be for the purpose of
assuring
4
<PAGE>
compliance with Federal and state securities laws (as contemplated by
Section 13(d) hereof) or for other reasons deemed advisable by the
Board.
(c) Limitations. For all Incentive Stock Options granted under this
Plan, the aggregate fair market value, determined at the time the
Options are granted, of the Common Stock exercisable for the first
time by any Participant during any calendar year shall not exceed
$100,000. Such restriction shall not apply to Non-Qualified Stock
Options granted under the Plan.
10. OPTION PRICE
(a) Incentive Stock Option. The purchase price per share of Common
Stock under each Incentive Stock Option granted pursuant to the Plan
shall not be less than the fair market value of the Common Stock at
the time such Option is granted. The Board will undertake any
procedures that it deems prudent under the circumstances and in good
faith to determine the fair market value of the Common Stock at the
time that each Incentive Stock Option is granted. This may include,
but is not limited to, obtaining opinions or appraisals of the fair
market value of the Common Stock from independent and qualified
valuation experts.
(b) Non-Qualified Stock Options. The purchase price per share of
Common Stock under each Non-Qualified Stock Option granted pursuant to
the Plan shall be no less than eighty-five percent (85%) of the fair
market value of the Common Stock at the time that the Option is
granted. The valuation procedures employed for granting Non-Qualified
Stock Options shall be the same as those described under subsection
(a) above.
(c) Payment Terms. Payment for the stock purchased pursuant to an
Option shall be in cash.
11. DURATION OF OPTIONS
Each Option granted under the Plan shall terminate not later than ten (10)
years after the date on which it was granted. The Board may, in its discretion,
provide a shorter period for any individual Option.
12. NONTRANSFERABILITY OF OPTIONS
No Option granted under the Plan shall be transferable by a Participant
otherwise than by will, the laws of descent and distribution or pursuant to a
Qualified Domestic Relations Order, and an Option may be exercised, during a
Participant's lifetime, only by him.
13. EXERCISE OF OPTIONS
(a) Restrictions on Exercise. Each Option shall be exercisable
according to terms set by the Board at the time of the grant. Unless
otherwise provided in the
5
<PAGE>
Option Agreement, an Option granted under the Plan shall be
exercisable, prior to the expiration or termination of the Option, in
whole at any time or in part from time to time. The Board may direct
that an Option becomes exercisable in installments, which need not be
annual installments, over a period which may be less than the term of
the Option. At such time as an installment shall become exercisable,
it may be exercised at any time thereafter, in whole or in part, until
the expiration or termination of the Option. Only full shares which a
Participant is entitled to purchase will be issued, and no fractional
shares will be issued.
(b) Exercise Sequence. Options granted under the Plan may be
exercised by the Participants without regard to the date of the grant
of any other Options granted under the Plan.
(c) Notice of Exercise. A Participant may purchase shares pursuant
to an Option granted under the Plan only by giving the Company written
notice of his election to exercise the Option, specifying the number
of shares to be purchased.
(d) Registration. Each Option granted under the Plan shall be
subject to the condition that if, at any time, in the opinion of
counsel for the Company, the registration, listing or qualification of
the shares covered by any Option under the Securities Act of 1933, as
amended (the "Act"), upon any securities exchange or under any state
law, or the consent or approval of any governmental regulatory body or
the updating, amendment or revision of any registration statement,
listing application or similar document, is required as a condition
of, or in connection with, the purchase of shares under such Option,
no such Option may be exercised unless and until such registration,
listing, qualification, consent, approval, updating, amendment or
revision shall have been effected or obtained free of any conditions
not acceptable to the Board. The Board may, as a condition to the
exercise by a Participant of an Option, require that the Participant
agree in writing that he will not dispose of the shares to be acquired
upon such exercise in a transaction which, in the opinion of counsel
for the Company, would violate the Act and the rules and regulations
promulgated thereunder. The Board shall have the authority to require
additional agreements or impose additional conditions which it
reasonably believes are necessary to assure compliance with Federal
and state securities, other laws and general operation of the Company.
14. TERMINATION OF EMPLOYMENT, DISABILITY, RETIREMENT OR DEATH
(a) Exercise After Termination of Employment. If the employment of a
Participant by the Company or a subsidiary shall terminate for any
reason except death or disability, all unexercised Options of such
Participant, and all rights to purchase shares pursuant thereto, shall
terminate upon such termination of employment.
(b) Exercise After Death. In the event of the death of a Participant
while employed by the Company or a subsidiary, any Option granted to
the Participant
6
<PAGE>
may be exercised within one (1) year after his death by the legal
representative of his estate, but only to the extent such Option was
exercisable by the Participant at the date of his death and provided
that the exercise would not occur later than the termination date of
the Option.
(c) Exercise After Disability. In the event of the termination of
employment with the Company or a subsidiary by reason of the
disability of a Participant, any Option granted to the Participant may
be exercised within one (1) year after his termination of employment
by the Participant or his legal representative, but only to the extent
such Option was exercisable by the Participant at the date of such
termination of employment and provided that the exercise would not
occur later than the termination date of the Option.
(d) Termination of Options. To the extent that any Option held by
any Participant whose employment is terminated shall not have been
exercised within the applicable periods hereinbefore provided, such
Option, and all rights to purchase shares pursuant thereto, shall
terminate.
15. WITHHOLDING TAXES
Upon the exercise of a Non-Qualified Stock Option, the Company shall have
the right to withhold from a Participant's compensation, or require a
Participant to remit sufficient funds to the Company, to satisfy any applicable
withholding for income and employment taxes.
16. USE OF PROCEEDS
The proceeds received from the sale of Common Stock pursuant to the Plan
shall be used for any corporate purposes of the Company.
7
<PAGE>
SENTIENT SYSTEMS TECHNOLOGY, INC.
STOCK OPTION AGREEMENT
UNDER 1993 EMPLOYEE STOCK OPTION PLAN
This Agreement is made this ____ day of _____________, 199_ by and
between SENTIENT SYSTEMS TECHNOLOGY, INC., a Pennsylvania corporation (the
"Company"), and _____________________ (the "Optionee").
W I T N E S S E T H:
WHEREAS, the Optionee is now employed by the Company, and the Company
desires to provide additional incentive to the Optionee, to encourage stock
ownership by the Optionee and to encourage the Optionee to remain in the employ
of the Company. As an inducement thereto, the Board of Directors of the Company
has determined to grant to the Optionee an option meeting the requirements of
Section 422 of the Internal Revenue Code (the "Code") pursuant to the Company's
1993 Employee Stock Option Plan (the "Plan"), a copy of which is attached hereto
as Exhibit "A";
NOW, THEREFORE, it is agreed between the parties as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereof, the
Company hereby grants to the Optionee the right and option to purchase from the
Company up to, but not exceeding in the aggregate, ________ shares of the
Company's Common Stock at a price of $__________ per share.
2. VESTING OF RIGHT TO EXERCISE OPTION. The option hereby granted
may not be exercised prior to _________________. The Optionee may purchase from
the Company on or after ____________________, ten percent (10%) of the shares
covered by this option; on or after _______________, this option may be
exercised as to an additional twenty percent (20%) of the shares covered by this
option; on or after _____________, this option may be exercised as to an
additional thirty percent (30%) of the shares covered by this option; and on or
after ___________________, this option may be exercised as to an additional
forty percent (40%) of the shares covered by this option, so that by
____________, this option shall be fully exercisable. To the extent not
exercised, installments shall accumulate and may be exercised by the Optionee,
in whole or in part, in any subsequent period. Any provisions of this Agreement
<PAGE>
notwithstanding, this option shall not be exercisable on or after the date ten
(10) years from the date of the grant of this option.
3. TERMINATION OF EMPLOYMENT. If, prior to the date that this
option shall become exercisable, the Optionee's employment with the Company
shall be terminated, for any reason, the Optionee's right to exercise this
option shall terminate and all rights hereunder shall cease.
If this option shall become exercisable during the Optionee's
term of employment and the Optionee shall die or become permanently disabled
while in the employ of the Company, the Optionee, the executor or administrator
of the estate of the Optionee (as the case may be), or the person or persons to
whom the option shall have been transferred by will or by the laws of descent
and distribution, shall have the right, within one (1) year from the date of the
Optionee's death or disability, to exercise this option to the extent that it
was exercisable and unexercised on the date of disability or death, subject to
any other limitation on the exercise of such option in effect at the date of
exercise and provided that such exercise will not occur later than the
termination date of this option.
If termination of employment is for any reason other than death
or disability, then this option shall terminate and expire concurrently with the
termination of employment and shall not thereafter be exercisable to any extent.
A leave of absence with the written consent of the Company shall not be a
termination of employment for purposes of this option.
4. PUBLIC OFFERING. This option may be exercisable in full, and all
shares covered by this option may be immediately purchased without regard to the
vesting provisions set forth in Paragraph 2 upon the Company's shares being
subject to a public offering or upon all the Company's outstanding shares being
acquired by a third party.
5. EXERCISE OF OPTION. The Optionee, from time to time during the
period when the option hereby granted may by its terms be exercised, may
exercise the option in whole or in part as at the time permitted by delivery to
the Company of: (a) a written notice signed by the Optionee (i) stating the
number of shares that the Optionee has elected to purchase at that time from the
Company, (ii) if required by the Company at the time of exercise, representing
that the Optionee is acquiring the shares being purchased for investment and not
for resale; and (b) a
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certified check, bank draft or money order of an amount equal to the purchase
price of the shares then to be purchased. An example of the written notice is
attached hereto as Exhibit "B".
Anything to the contrary herein notwithstanding, the Company's
obligation to sell and deliver stock under this option is subject to such
compliance with federal and state laws, rules and regulations applying to the
authorization, issuance or sale of securities as the Company deems necessary or
advisable. The Company shall not be required to sell and deliver stock pursuant
hereto unless and until it received satisfactory proof that the issuance or
transfer of such shares will not violate any of the provisions of any securities
or other laws or that there has been compliance with the provisions of any
applicable rules, regulations and laws. If the Optionee fails to accept
delivery and pay for all or any part of the number of shares specified by such
notice upon tender of delivery thereof, the Optionee's right to exercise this
option with respect to such undelivered shares may be terminated by the Company.
6. NON-ASSIGNABILITY. The option hereby granted shall not be
transferable by the Optionee, other than by will or the laws of descent and
distribution, and the option may be exercised during the Optionee's lifetime
only by the Optionee or the Optionee's legal representative if the Optionee is
then disabled. Any transferee of the option shall take the same subject to the
terms and conditions of this Agreement. No such transfer of the option shall be
effective to bind the Company unless the Company shall have been furnished with
written notice thereof and a copy of the will and/or such other evidence as the
Company may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions of this
Agreement. No assignment or transfer of this option, or of the rights
represented thereby, whether voluntary or involuntary or by operation of law or
otherwise, except a transfer by the Optionee by will or by the laws of descent
and distribution, shall vest in the purported assignee or transferee any
interest or right herein whatsoever.
7. DISPUTES. As a condition of the granting of this option, the
Optionee and the Optionee's successors and assigns agree that any dispute or
disagreement which shall arise under or as a result of this Agreement shall be
determined by the Board of Directors of the Company in its sole discretion and
judgment, and that any such determination and any interpretation by the Board of
the terms of this Agreement shall be final, binding and conclusive for all
purposes.
8. RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder of the Company with respect to any of the shares covered by this
option until the issuance of a
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stock certificate or certificates upon the exercise of this option in full or in
part, and then only with respect to the shares represented by such certificate
of certificates.
9. NOTICES. Every notice relating to this Agreement shall be in
writing and if given by mail shall be given by registered or certified mail with
return receipt requested. All notices to the Company shall be delivered to the
President or addressed to the President of the Company at its offices in
Pittsburgh, Pennsylvania. All notices by the Company shall be delivered to the
Optionee at his home address according to the records of his employer. Either
party, by notice to the other, may designate a different address to which
notices shall be addressed. Any notice given by the Company to the Optionee at
the Optionee's last designated address shall be effective to bind any other
person who shall acquire rights hereunder.
10. "OPTIONEE" TO INCLUDE CERTAIN TRANSFEREES. Whenever the word
"Optionee" is used in any provision of this Agreement under circumstances where
the provisions should logically apply to any other person or persons to whom the
option may be transferred, in accordance with the provisions of Section 5
hereof, the word "Optionee" shall be deemed to include such person or persons.
11. GOVERNING LAW. This Agreement has been made in and shall be
construed in accordance with the laws of the Commonwealth of Pennsylvania.
12. PROVISIONS OF PLAN CONTROLLING. The provisions hereof are
subject to the terms and provisions of the Plan attached hereto as Exhibit "A".
In the event of any conflict between the provisions of this option and the
provisions of the Plan, the provisions of the Plan shall control.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SENTIENT SYSTEMS TECHNOLOGY,
INC.
By:
--------------------------------
President
ACCEPTED BY:
- -------------------------
Optionee
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[LATHAM & WATKINS LETTERHEAD]
April 14, 1998
Sunrise Medical Inc.
2382 Faraday Avenue
Suite 200
Carlsbad, California 92008
Re: Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
This opinion is rendered in connection with the filing by Sunrise Medical
Inc., a Delaware corporation (the "Company"), of a registration statement on
Form S-8 (the "Registration Statement") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, with respect to the
offer and sale of up to 156,630 shares of the Company's Common Stock, par value
$1.00 per share (the "Shares"), pursuant to the exercise of options granted
under the Sentient Systems Technology, Inc. 1993 Employee Stock Option Plan (the
"Plan"). We acted as counsel to the Company in connection with the preparation
of the Registration Statement.
We have examined such matters of fact and question of law as we have
considered appropriate for purposes of rendering the opinion expressed below.
We are opining herein as to the effect on the subject transaction of only
the General Corporation Law of the State of Delaware, and we express no opinion
with respect to the applicability thereto or the effect thereon of any other
laws or as to any matters of municipal law or any other local agencies within
any state.
Subject to the foregoing and in reliance thereon, we are of the opinion
that, upon the issuance and sale of the Shares in the manner contemplated by the
Registration Statement and in accordance with the terms of the Plan, and subject
to the Company completing all action and proceedings required on its part to be
taken prior to the issuance of the Shares pursuant to the terms of the Plan and
the Registration Statement, including, without limitation, collection of
required payment for the Shares, the Shares will be legally and validly issued,
fully paid and nonassessable securities of the Company.
We consent to your filing this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Latham & Watkins
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Sunrise Medical Inc.
We consent to the use of our report incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
Los Angeles, California
April 13, 1998
