As filed with the Securities and Exchange Commission on
February 16, 1995.
Registration No.:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933
BALLARD MEDICAL PRODUCTS
(Exact name of registrant as specified in its charter)
UTAH
(State of Incorporation)
87-0340144
(IRS Employer Identification Number)
12050 LONE PEAK PARKWAY
DRAPER, UTAH 84020
(Address of principal executive offices)
1994 INCENTIVE STOCK OPTION PLAN
(Full title of the Plan)
Adopted August 1, 1994
DALE H. BALLARD, President and Chief Executive Officer
BALLARD MEDICAL PRODUCTS
12050 Lone Peak Parkway
Draper, Utah 84020
(801) 572-6800
(Name, address and telephone number of agent for services)
Approximate date of commencement of proposed sale to public:
As soon as practicable after the effective date
of the Registration Statement
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF AMOUNT TO MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE OFFERING OFFERING REGISTRATION
BE REGISTERED REGISTERED PRICE PER PRICE (1) FEE
SHARE (1)
<S> <C> <C> <C> <C>
Common Stock,
$0.10 par 600,000 $12.00 $7,200,000 $2,482.76
value shares
</TABLE>
In addition, pursuant to Rule 416(c) under the Securities
Act of 1933, this registration statement also covers an
indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
(1) Estimated solely for the purpose of calculating the
registration fee based upon the closing price of the
registrant's Common Stock quoted by the New York Stock
Exchange at the published close on January 30, 1995.
Total number of pages: 23
Index to Exhibits appears on page 6.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference
into this Registration Statement:
(a) The Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1994, filed December 23,
1994;
(b) The Company's Quarterly Report on Form 10-Q
for the quarter ended December 31, 1994, filed February 14,
1995; and
(c) The Description of Common Stock contained in
the Company's Registration of Securities on the Form 8-A (page
2) pursuant to Section 12(b) of the Securities Exchange Act of
1934, filed with the Commission on September 3, 1993.
In addition, all documents filed subsequent to the date
hereof by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to
be part hereof from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
This Registration Statement has been prepared, in
substantial part, by Paul W. Hess, General Counsel for the
Company. Mr. Hess has also given his opinion on the validity
of the securities being registered. Mr. Hess is the beneficial
owner of 1,466 shares of the Company's Common Stock, together
with 48,000 incentive stock options which were granted to Mr.
Hess under various plans, including 5,000 options under the
1994 Incentive Stock Option Plan.
Deloitte & Touche LLP, who has certified the financial
statements incorporated herein by reference to the Company's
September 30, 1994 Form 10-K, does not own any shares of the
Company's stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The general effect of the Utah statute under which any
director or officer of the Company is insured or indemnified in
any manner against liability which he or she may incur in his
or her capacity as an officer or director of the Company, set
forth in Section 16-10a-901 through 909, Utah Code Annotated
(1992, as amended), which provides generally as follows:
The Company may indemnify any officer or director against
liability incurred in any threatened, pending, or completed
action, suit or proceeding (whether civil, criminal,
administrative or investigative, and whether formal or
informal), if: (a) his or her conduct was in good faith; and
(b) he or she reasonably believed that his or her conduct was
in, or not opposed to, the corporation's best interest; and (c)
in the case of any criminal proceeding, he or she had no
reasonable cause to believe his or her conduct was unlawful.
The determination as to whether in a specific case
indemnification of a director or officer is permissible (i.e.,
whether the director or officer has met the above applicable
standard of conduct), is generally to be made by the Board of
Directors by a majority vote. The Company may not indemnify a
director or officer: (1) in connection with a proceeding by or
in the right of the Company in which the director or officer
was adjudged liable to the Company; or (2) in connection with
any other proceeding charging that the director or officer
derived an improper personal benefit, whether or not involving
action in his or her official capacity, in which proceeding he
or she was adjudged liable on the basis that he or she derived
an improper personal benefit. Indemnification permitted in
connection with a proceeding by or in the right of the Company
is limited to reasonable expenses incurred in connection with
the proceeding.
The Company is required to indemnify a director or
officer who is successful, on the merits or otherwise, in the
defense of any proceeding, or in the defense of any claim,
issue or matter in the proceeding, to which he or she was a
party because he or she is or was a director of the Company,
against reasonable expenses incurred in connection with the
proceeding or claim with respect to which he or she has been
successful. The Company may purchase and maintain liability
insurance on behalf of directors, officers, employees,
fiduciaries, and agents of the Company, whether or not the
Company would have power to indemnify them against liability.
The general effect of the Bylaws of the Company under
which any director or officer of the Company is insured or
indemnified in any manner against liability which he or she may
incur in his or her capacity as a director or officer is set
forth in Article VIII of the Company's Bylaws, which contains
provisions almost identical to the provisions of Utah Code
Annotated, Section 16-10a-901 et seq., summarized above. In
addition, in November, 1993, the Board of Directors authorized
and directed the Company to enter into (and the Company has
executed) an Indemnification Agreement with each director and
executive officer of the Company, by which the Company is
contractually obligated to indemnify directors and officers in
accordance with the standards, terms, and conditions of Article
VIII of the Company's Bylaws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
<S> <C>
4.1 Restated Certificate of Incorporation, dated
September 18, 1987.
4.2 Articles of Amendment, dated July 10, 1991.
4.3 Articles of Amendment, dated September 21,
1993.
4.4 Amended and Restated Bylaws of Ballard
Medical Products, dated October 12, 1992.
4.5 1994 Incentive Stock Option Plan.
4.6 Example of Incentive Stock Option Agreement
intended to be used under the 1994 Incentive
Stock Option Plan.
5 Opinion of counsel as to legality of
securities being registered.
15 Not applicable.
23.1 Consent of Independent Auditors.
23.2 Consent of Counsel (contained in
Exhibit 5)
24 Power of Attorney (contained on signature
page).
27 Not applicable.
</TABLE>
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(1) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(2) To reflect in the prospectus any facts or
events arising after the effective date of the 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 the
registration statements; and
(3) To include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement.
(b) 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.
(c) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
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 section 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.
Insofar as indemnification of liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the 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 Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant, Ballard Medical Products, a corporation
organized and existing under the laws of the State of Utah,
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 Salt
Lake City, State of Utah, on this 16th day of February, 1995.
BALLARD MEDICAL PRODUCTS
By: Dale H. Ballard, President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints Dale H.
Ballard, his attorney-in-fact, with the power of substitution,
for him in any and all capacities, to sign any amendments to
this Registration Statement on Form S-8, and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities indicated and on the dates
indicated.
February 16, 1995 Dale H. Ballard
President, Chief Executive Officer
and Chairman of the Board
February 16, 1995 Kenneth R. Sorenson,
Treasurer and Chief Financial Officer
February 16, 1995 E. Martin Chamberlain,
Director
February 16, 1995 Dale H. Ballard, Jr.
Director
February 16, 1995 Paul W. Hess
Director
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE NO.
<S> <C> <C>
4.1 Restated Certificate of Incorporated by reference
Incorporation, dated from July 10, 1991 Form S-8
September18, 1987 Registration Statement,
Exhibit 4.1
Registration No. 33-41720
4.2 Articles of Amendment, Incorporated by reference
to Articles of Incorporation from Exhibit 4.2 to the
dated July 10, 1991 Registration Statement
on Form S-3, filed
November 13, 1991,
Registration No. 33-43910
4.3 Articles of Amendment, Incorporated by reference
to Articles of Incorporation from Exhibit 4.3 to the
Dated September 21, 1993 Registration Statement
on Form S-8, filed
December 20, 1993
Registration No. 33-73194
4.4 Amended and Restated Bylaws of Incorporated by reference
Ballard Medical Products, dated from Exhibit 3.3 to
October 12, 1992 Form 10-K filed
December 24, 1992
4.5 1994 Incentive Stock Option Plan p. 7
4.6 Example of Incentive Stock Option
Agreement intended to be used
under the 1994 Incentive Stock p. 12
Option Plan
5 Opinion of counsel as to legality
of securities being registered p. 20
23.1 Consent of Independent Auditors p. 22
23.2 Consent of Counsel Contained in Exhibit 5
24 Power of Attorney Contained on signature
page
</TABLE>
BALLARD MEDICAL PRODUCTS
1994 INCENTIVE STOCK OPTION PLAN
Adopted August 1, 1994
1. Grant of Options. The two stock Option Committees,
appointed by the Board of Directors of BALLARD MEDICAL PRODUCTS
(the "Corporation"), a corporation organized under the laws of
the State of Utah, with its principal place of business located
at 12050 Lone Peak Parkway, Draper, Utah 84020, are hereby
authorized to issue stock options from time to time on the
Corporation's behalf to any one or more persons who, at the
date of such grant, are employees of the Corporation or a
subsidiary of the Corporation and meet the requirements
contained in the remaining portions of this 1994 Incentive
Stock Option Plan (the "Plan"). Stock Option Committee A
("Committee A") is authorized to grant options to employees who
are not also officers or directors of the Company. Stock
Option Committee B ("Committee B") is authorized to grant
options only to employees who are also officers or Directors of
the Corporation. Any option to be granted pursuant to this
Plan must be granted within ten (10) years from the date
hereof.
2. Amount of Stock Available to this Plan. The
aggregate amount of stock which may be purchased pursuant to
options granted under this Plan shall be 600,000 shares of the
Corporation's Common Stock (the "Stock").
3. Eligible Employees. This Plan is available, at the
discretion of the Stock Option Committees, to all employees of
the Corporation and all employees of the Corporation's
subsidiaries.
4. Participation. Subject to the express provisions
of the Plan, the Stock Option Committees shall:
a. select from employees the individuals to whom
options shall be granted;
b. determine the number of shares to be subject
to each option granted; and
c. grant such options to such individuals.
5. Participation by Directors and Officers. With
respect to any and all options granted under the Plan to
employees who are either officers or Directors of the
Corporation, the decisions as to the selection of the officer
or Director to whom stock options may be granted and the number
or maximum number of shares which may be covered by stock
options granted to any such officer or Director shall be made
only by Committee B. All the members of which Committee B
shall be "disinterested persons" within the meaning of Reg.
Section 240.16b-3(c)(2)(i), promulgated under the Securities
Exchange Act of 1934.
6. Nontransferability. The terms of any option
granted under this Plan shall include a provision making such
option nontransferable by the optionee, other than by will or
the laws of descent and distribution upon death, and
exercisable during the optionee's lifetime only by the optionee
or by the optionee's guardian or legal representative.
7. Exercise of Options. Any option granted pursuant
to this Plan may contain such provisions established by the
applicable Stock Option Committee as the Committee deems
appropriate and desirable regarding the manner of exercise of
such option, subject to the following provisions:
a. No option granted under this Plan may be
exercised in whole or in part unless the optionee continues to
be an employee of the Corporation or a subsidiary for a period
of at least one (1) year from the date such option is granted.
The intervening death of the optionee before the end of such
year will remove this one-year-of-employment requirement. In
his discretion, the President may extend the one-year continued
employment period under this paragraph (a) to up to three
years.
b. In no event will any option granted to a
person be, by its terms, exercisable after the expiration of
ten (10) years from the date such option is granted, and any
option granted pursuant to this Plan and not exercised within
said ten (10)-year period shall be void; provided, however,
that such period shall be only five (5) years, instead of ten
(10), for an optionee who, immediately before the grant of the
option, owns more than ten percent (10%) of the voting power of
all classes of the Corporation's Stock.
c. No option granted under this Plan or any part
hereof may be exercised more than three (3) months after the
optionee ceases to be an employee of the Corporation. However,
if the optionee ceases employment with the Corporation or
subsidiary because of permanent and total disability, then an
option granted under this Plan may be exercised within one (1)
year of such cessation of employment so long as the optionee
has been an employee of the Corporation or subsidiary for at
least the period specified in the Stock Option Agreement
entered into by the Corporation and said optionee. For
purposes of this Plan, the term "permanent and total
disability" shall mean that the optionee is unable to engage in
any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than
twelve months.
d. No option or installment thereof shall be
exercisable except in respect of whole shares, and fractional
share interests shall be disregarded. No fewer than one
hundred (100) shares may be purchased at one time unless the
number purchased is the total number which may be purchased at
said time under the option.
8. Purchase Price. For any option granted hereunder,
the purchase price for a share of Stock shall be determined by
the applicable Stock Option Committee but shall not be less
than (but may be greater than) the fair market value of the
Stock on the date such option is granted. The fair market
value of such stock shall be determined in accordance with any
reasonable valuation method, including the valuation methods
described in Treasury Regulations. However, in the case of any
person then owning more than ten percent (10%) of the voting
power of all classes of the Corporation's stock, options will
be granted at a purchase price of not less than one hundred ten
percent (110%) of the fair market value of the Stock on the
date such option is granted. In either case, the applicable
Stock Option Committee will use good faith to determine the
fair market value of the Stock.
For so long as the Corporation's stock is traded on the
New York Stock Exchange, the fair market value shall mean the
reported closing price on the last trading day preceding the
grant of the option. If the Corporation's stock is traded in
the over-the-counter market, the fair market value shall mean
the reported closing price on the last trading day preceding
the grant of the option.
9. Payment of Purchase Price with Corporation Stock.
The optionee may, if the optionee chooses, pay the purchase
price to exercise an option granted under this Plan with other
shares of the Corporation's stock which the optionee owns. In
such cases, credit will be given the optionee for the fair
market value of such outstanding shares used in payment, as of
the date of payment, less any applicable brokerage fees. The
Corporation's Board of Directors will use good faith to
determine the fair market value of the stocks thus used in
payment as of the date of such payment.
10. Reclassification, Consolidation, or Merger.
a. If options issued under this Plan are
outstanding when the total number of issued shares of the stock
is increased or decreased by any:
(i) change in par value;
(ii) split up;
(iii) reclassification; or
(iv) distribution of a dividend payable in
stock;
then the number of shares subject to such options and the
option price per share shall be proportionately adjusted.
b. If the Corporation is reorganized,
consolidated, or merged with another corporation (regardless of
which entity will be the surviving corporation), the optionees
of any options then outstanding pursuant to this Plan shall be
entitled to receive options covering shares of the surviving
corporation:
(i) in substantially the same proportion;
(ii) at a substantially equivalent option
price; and
(iii) subject to the same conditions as their
prior, outstanding options granted under this Plan.
11. Amendments to this Plan. The Board of Directors is
hereby authorized to amend this Plan as necessary to comply
with state and federal laws or as the Board deems to be
necessary or appropriate for the benefit of the Corporation,
its subsidiaries, or their employees.
12. Date of Grant of Options. The date of grant of an
option shall be the day of the grant of the option by the
applicable Stock Option Committee; provided, however, that if
the appropriate resolution of the Stock Option Committee
indicates that an option is to be granted as of and on some
future date, then the date of grant shall be such future date.
The applicable Stock Option Committee may also select a past
effective date for option grants, so long as the Committee
action is within a reasonable period of time following the
effective date of the grant.
13. Stock Ownership. No optionee shall be entitled to
the privileges of Stock ownership as to any shares of Stock not
actually issued and delivered to such optionee in certificate
form.
14. Stockholder Approval; Effective Date. This Plan is
subject to approval by the Shareholders of the Corporation and
will not remain in force unless approved by the Shareholders
within twelve (12) months after the date the Plan is adopted.
15. Stock Reserve. The Corporation will, at all times
during the term of this Plan, reserve and keep available such
number of authorized but unissued shares of its Stock and/or
Treasury Stock as will be sufficient to satisfy the
requirements of this Plan. The Corporation will pay all fees
and expenses incurred by the Corporation in connection with the
exercise of options granted under this Plan. If any option
shall expire for any reason without having been exercised in
full, the unpurchased shares subject thereto shall again be
available for purposes of the Plan.
16. Interpretation of Plan. Options granted pursuant
to the Plan are intended to be "Incentive Stock Options" within
the meaning of Section 422 of the Internal Revenue Code (the
"Code"), and the Plan shall be construed to implement that
intent. If all or any part of an option shall not be deemed an
"Incentive Stock Option" within the meaning of Section 422 of
the Code, said option shall nevertheless be valid and carried
into effect.
It is also intended that the Plan and its provisions
satisfy the conditions and requirements of Reg. Section
240.16b-3 promulgated by the Securities and Exchange Commission
under Section 16(b) of the Securities Exchange Act of 1934,
both before and after May 1, 1991 (the effective date of
Release No. 34-28869).
17. Other Terms. Any option granted under this Plan
may contain such other and additional terms as are deemed
necessary or desirable by the applicable Stock Option
Committee, or the President of the Corporation, so long as such
terms do not materially differ from the terms of this Plan.
CERTIFICATE OF SECRETARY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned does hereby certify that he is the
Secretary of BALLARD MEDICAL PRODUCTS, a Utah corporation; that
the above and foregoing 1994 Incentive Stock Option Plan was
duly and regularly adopted as such by the Board of Directors of
the Corporation by unanimous Consent Resolution dated August 1,
1994; that said Plan, as adopted by the Board, was duly
approved by a majority of Shareholders of the Corporation at
the Annual Meeting of Shareholders held January 23, 1995; and
that the above 1994 Incentive Stock Option Plan is now in full
force and effect.
Dated this 23rd day of January 1995.
E. Martin Chamberlain
Secretary
NOTHING CONTAINED IN THIS AGREEMENT IS INTENDED TO ALTER THE
AT-WILL EMPLOYMENT RELATIONSHIP BETWEEN OPTIONEE AND THE
COMPANY. EITHER PARTY MAY TERMINATE THE EMPLOYMENT
RELATIONSHIP AT ANY TIME, FOR ANY REASON, OR FOR NO REASON.
THE OPTIONEE HEREIN SHOULD CONSULT HIS OR HER OWN TAX ADVISOR
FOR A DETERMINATION OF WHETHER THE OPTIONS GRANTED QUALIFY FOR
TREATMENT UNDER SECTION 422 OF THE INTERNAL REVENUE CODE.
BALLARD MEDICAL PRODUCTS
INCENTIVE STOCK OPTION AGREEMENT
(under 1994, 1993, 1992, 1991, and 1990
Incentive Stock Option Plans)
THIS AGREEMENT (the "Agreement") is made effective
, 19 , by and between BALLARD MEDICAL PRODUCTS, a
corporation organized under the laws of the State of Utah (the
"Company"), and , an employee of the
Company ("Optionee").
WHEREAS, Optionee is an employee of the Company, and the
Company desires to grant Optionee an option to purchase shares
of the Company's common stock (the "Stock"), in accordance with
one or more of five incentive stock option plans of the
Company;
NOW, THEREFORE, in consideration of the mutual covenants
and promises hereafter set forth, it is agreed by and between
the parties as follows:
1. GRANT OF OPTION.
(a) The Company hereby grants to Optionee the
right and option (the "Option") to purchase upon and subject to
the terms and conditions of the Applicable Plan or Plans,
incorporated in full herein by reference, all or part of the
following shares of stock at a purchase price of $
per share (the "Option Price"), in the manner and subject to
the conditions set forth herein:
<TABLE>
<CAPTION>
Continued
Option to Applicable Employment
Purchase Plan Required For
<S> <C> <C> <C> <C>
Shares under 19 Plan Years
Shares under 19 Plan Years
Shares under 19 Plan Years
</TABLE>
(b) The effective date of this grant by the
applicable Stock Option Committee of the Board of Directors is
the same as the effective date of this Agreement first shown
above.
(c) For all purposes of this Agreement, the term
"Applicable Plan" shall mean the incentive stock option plan or
plans under which Optionee is being granted an option to
purchase Stock, as identified in subparagraph (a) above.
(d) The Option Price is not less than one hundred
percent (100%) of the fair market value of such stock as of the
date of action of the Stock Option Committee granting this
Option.
2. TIME OF EXERCISE OF OPTION. Subject to the
provisions set forth hereinafter, this Option may be exercised,
in whole or in part, at any time after Optionee satisfies the
condition of paragraph 3 below.
3. CONTINUED EMPLOYMENT. This Option may not be
exercised in whole or in part unless Optionee continues to
serve as an employee of the Company for at least the period
shown in paragraph 1(a) above. However, the occurrence of
either of the following events will cause all of an optionees
options to become immediately and fully exercisable,
notwithstanding the above requirement:
(a) The death of the optionee; or
(b) The occurrence of a Business Combination
which is not approved by a two-thirds vote of the Continuing
Directors.
For purposes of this paragraph, the following definitions
apply:
(c) "Acquiring Person" shall mean any individual,
corporation (other than this corporation or any of its
subsidiaries), partnership, other person or entity which,
together with its affiliates and associates (as defined in the
Exchange Act or the Rules thereunder, as amended), and together
with any other individual, corporation (other than the Company
or any of its subsidiaries), partnership, person or entity with
which it or they have any agreement, arrangement, or
understanding with respect to acquiring, holding, voting, or
disposing of the Company's stock, beneficially owns (within the
meaning of the Exchange Act or the Rules) in the aggregate 10%
or more of the outstanding Voting Stock of the Company.
"Acquiring Person" shall also include any assignee of, or
person or entity which has succeeded to any shares of the
Company's stock which were at any time prior to the date of
assignment or succession beneficially owned by, a 10% Voting
Stock owner, or an affiliate or associate of a 10% Voting Stock
owner, if such assignment or succession shall have occurred in
the course of a transaction or series of transactions not
involving a public offering within the meaning of the
Securities Act of 1933, as amended. A person or entity, its
affiliates and associates, assignees and successors, and all
such other persons or entities with whom they have any such
agreement, arrangement, or understanding shall be deemed a
single Acquiring Person for purposes of this paragraph. Also
for purposes of this paragraph, the Continuing Directors shall
by majority vote have the power to determine, on the basis of
information known to the Board, if and when there is an
Acquiring Person. Any such determination shall be conclusive
and binding for all purposes of this paragraph, provided such
determination is reasonable and made in accordance with
applicable law.
(d) "Business Combination" shall mean:
(i) any merger, consolidation, or share
exchange of the Company or a subsidiary of the Company with or
into an Acquiring Person;
(ii) any purchase for cash and/or securities
by an Acquiring Person of 20% or more of the Company's
outstanding shares of Voting Stock (including the purchase(s)
which cause(s) the purchaser to become an Acquiring Person
hereunder);
(iii) any sale, lease, exchange, transfer or
other disposition (including without limitation, a mortgage or
other security device) in a single transaction or related
series of transactions, of all or any Substantial Part (as
hereinafter defined) of the assets either of the Company
(including without limitation, any voting securities of a
subsidiary) or of a subsidiary of the Company to or with an
Acquiring Person;
(iv) any merger or consolidation of an
Acquiring Person with or into the Company or a subsidiary of
the Company;
(v) any sale, lease, exchange, transfer or
other disposition (including without limitation, a mortgage or
other security device) in a single transaction or related
series of transactions, of all or any Substantial Part of the
assets of an Acquiring Person to the Company or a subsidiary of
the Company;
(vi) the issuance or transfer of any
securities of the Company or a subsidiary of the Company to an
Acquiring Person;
(vii) the adoption of any plan or proposal
for the liquidation or dissolution of the Company proposed,
directly or indirectly, by or on behalf of, or pursuant to any
agreement, arrangement or understanding (whether or not in
writing) with an Acquiring Person;
(viii) any merger or consolidation of the
Company with a subsidiary of the Company proposed by or on
behalf of an Acquiring Person;
(ix) any reclassification of securities
(including without limitation, any stock split, stock dividend,
or other distribution of stock in respect of stock, or any
reverse stock split), or recapitalization of the Company or any
merger or consolidation of the Company with any subsidiary of
the Company, or any other transaction (whether or not with or
into, or otherwise involving the Acquiring Person), proposed
by, on behalf of, or pursuant to any agreement, arrangement or
understanding (whether or not in writing) with the Acquiring
Person or any affiliate or associate of the Acquiring Person
which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of stock of the
Company or any subsidiary of the Company which is directly or
indirectly owned by the Acquiring Person, except as a result of
immaterial fractional share adjustments;
(x) any agreement, contract, or other
arrangement providing for any of the transactions described in
this definition of Business Combination; and
(xi) any other transaction with an Acquiring
Person which requires the approval of the Company's
stockholders under the Utah Revised Business Company Act.
A person who is an Acquiring Person as of:
(xii) the time any definitive agreement
relating to a Business Combination is entered into;
(xiii) the record date for the determination
of stockholders entitled to notice of and to vote on a Business
Combination; or
(xiv) immediately prior to the consummation
of a Business Combination,
shall be an Acquiring Person for purposes of this definition.
(e) "Continuing Director" shall mean any director
of the Company who was a director prior to the time the
Acquiring Person became such, and any other director whose
election or appointment as a director was recommended or
approved by a majority vote of the Continuing Directors. A
majority or two-thirds vote of the Continuing Directors shall
mean, respectively, a vote of the majority of the Continuing
Directors, a vote of or two-thirds of the Continuing Directors,
then in office, provided that at least two Continuing Directors
are then in office and participate in such vote.
(f) "Exchange Act" shall mean the Securities
Exchange Act of 1934.
(g) "Substantial Part" shall mean an amount of
assets having an aggregate fair market value of at least
$500,000.
(h) "Voting Stock" shall mean Common Stock and
all other securities of the Company entitled to vote generally
for the election of directors.
4. TERMINATION OF OPTION. Notwithstanding contrary
provisions of this Agreement, the Option and any part thereof,
to the extent not theretofore exercised, will terminate upon
the first to occur of the following dates:
(a) The expiration of three (3) months after the
date on which Optionee's employment by the Company is
terminated (except if such termination is by reason of
permanent and total disability);
(b) The expiration of twelve (12) months after
the date on which Optionee's employment by the Company is
terminated, if such termination is by reason of Optionee's
permanent and total disability; or
(c) The expiration of seven (7) years from the
date hereof.
For purposes of this Agreement, the term "permanent and
total disability" shall mean that Optionee is unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than
twelve months.
5. METHOD OF EXERCISE. This Option will be exercised
by written notice ("Notice") by Optionee directed to the
Company's secretary at the Company's principal place of
business stating the number of shares with respect to which
this Option is being exercised. Such Notice will be
accompanied by cash or a certified check in payment of the
Option Price for the number of shares specified. The Company
shall notify the transfer agent to make immediate delivery of
such shares. However, if any law or regulation requires the
Company to take any action with respect to the shares specified
in such Notice before the issuance thereof, the delivery date
of such shares may be extended for the period necessary to take
such action.
In lieu of paying cash, Optionee may direct that
specified shares of the Company's stock already owned by
Optionee be used in complete or partial payment of the purchase
price of the shares of Stock so purchased. In this event, the
stock certificates of those shares to be used as payment must
accompany the Notice. The Company will in good faith determine
the fair market value of the shares used as payment as of the
date of the receipt of the Notice. The Company will cancel the
stock certificates of such shares submitted and reissue
certificates for any remaining shares not needed to complete
the purchase.
In any exercise of any part of this Option, unless
Optionee directs otherwise in Optionee's Notice to the Company,
the Option Price of any shares purchased will be paid in the
following order:
(a) First, from cash sent from Optionee to the
Company with the Notice.
(b) Second, from the exchange and redemption of
shares of stock owned by Optionee, the certificate(s) for which
shares are submitted along with the Notice.
Only whole shares of stock will be used as any part of
payment of the Option Price for purposes of this paragraph. If
Optionee's check for cash accompanies the Notice, only enough
cash will be applied to the Option Price to allow whole shares
of Stock to be redeemed. If no check accompanies the Notice,
enough of Optionee's other shares will be redeemed to
completely pay the Option Price, and any remaining fractional
shares will be redeemed by the Company for cash. Such cash
will be sent to Optionee in the form of the Company's check
along with the certificate(s) for the shares of Stock purchased
and any certificate(s) for Shares not needed to pay the
purchase price.
6. MINIMUM SHARES PURCHASED.
(a) No fewer than one hundred (100) shares may be
purchased at one time unless the number purchased is the total
number which may be purchased at said time under the Option.
(b) No option or installment thereof shall be
exercisable except in respect of whole shares, and fractional
share interests shall be disregarded.
7. RECLASSIFICATION. If this Option is outstanding
when the total number of issued shares of the Stock is
increased or decreased by any:
(a) change in par value,
(b) split up,
(c) reclassification, or
(d) distribution of a dividend payable in stock,
then the number of shares subject to this Option and the Option
Price per share shall be proportionately adjusted.
8. RIGHTS PRIOR TO EXERCISE OF OPTION. This Option is
non-transferable by Optionee, other than by will or the laws of
descent and distribution in the event of Optionee's death.
During Optionee's lifetime, this Option is exercisable only by
Optionee or Optionee's guardian or legal representative.
Optionee has no rights as a shareholder with respect to the
Option shares until payment of the Option Price and delivery to
Optionee of such shares as herein provided.
9. RESTRICTION ON DISPOSITION OF STOCK. All shares
acquired by Optionee pursuant to this Agreement are subject to
any restrictions on sale, encumbrance, or other disposition now
or hereafter contained in the Company's Bylaws or Articles of
Incorporation.
Optionee understands and acknowledges that if Optionee
disposes of the shares of Stock acquired by Optionee pursuant
to this Agreement within two (2) years from the date of this
Option or within one (1) year after the transfer of such shares
to Optionee, then this Option may not qualify as an Incentive
Stock Option and all of the income realized by Optionee may
constitute ordinary income.
10. BINDING EFFECT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and
assigns.
11. STOCK RESERVE.
(a) The Company shall, at all times during the
term of this Agreement, reserve and keep available sufficient
Stock to satisfy the requirements of this Agreement.
(b) The Company will pay all fees and expenses
necessarily incurred by the Company in connection with the
exercise of the Option.
(c) Notwithstanding paragraph 11(b), Optionee
will pay all brokerage fees incurred by Optionee in the use of
any of the Company's stock as payment for the exercise of this
Option.
12. RESERVATION OF RIGHT TO TERMINATE EMPLOYMENT.
NOTHING CONTAINED IN THIS AGREEMENT RESTRICTS THE RIGHT OF THE
COMPANY TO TERMINATE THE EMPLOYMENT OF OPTIONEE AT ANY TIME
WITH OR WITHOUT CAUSE, OR TO REDUCE OPTIONEE'S COMPENSATION AT
ANY TIME.
13. PARTIES BOUND BY PLAN. Each determination,
interpretation, or other action taken by the Board of Directors
or the applicable Stock Option Committee pursuant to the
provisions of the Plan is final, binding, and conclusive for
all purposes of the Company and Optionee and their respective
successors in interest.
14. CONDITIONAL EXERCISE. If at any time the Board of
Directors of the Company determines that listing, additional
registration, or qualification of the shares of Stock upon any
securities exchange, or under any state or federal law is
necessary or desirable, this Option may not be exercised unless
and until such listing, registration, or qualification of the
shares has been effected upon conditions acceptable to the
Board of Directors of the Company.
15. INTERPRETATION OF PLAN. Options granted pursuant
to the Plan are intended to be "Incentive Stock Options" within
the meaning of Section 422 of the Internal Revenue Code (the
"Code"), and the Applicable Plan and this Agreement shall be
construed to implement that interest. If all or any part of
this Option shall not be deemed an "Incentive Stock Option"
within the meaning of Section 422 of the Code, the Option shall
nevertheless be valid and carried into effect.
16. GOVERNING LAW. This Agreement shall be construed
in accordance with and governed by the laws of the State of
Utah.
17. PLACE OF SUIT. Any action at law, suit in equity
or judicial proceeding for the enforcement of this contract or
any provision thereof shall be instituted only in state or
federal courts located in Salt Lake City, Utah. Optionee
hereby submits to the jurisdiction of such courts.
18. SEVERABILITY. If and to the extent that any court
of competent jurisdiction holds any provision or any part
thereof of this Agreement to be invalid or unenforceable, such
holding shall in no way affect the validity of the remainder of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above
written.
BALLARD MEDICAL PRODUCTS
By: Dale H. Ballard
Optionee:
(Signature)
(Print name and address)
M E M O R A N D U M
To: Board of Directors
From: Paul W. Hess, General Counsel
Date: February 16, 1995
Re: Registration Statement on Form S-8
I have examined the Registration Statement on Form S-8 to
be filed by Ballard Medical Products (the "Company") with the
Securities and Exchange Commission on or about February 16,
1995 (the "Registration Statement"), in connection with the
registration under the Securities Act of 1933, as amended, of
600,000 shares of the Company's common stock, $.10 par value
(the "Shares"), issuable upon exercise of options granted or to
be granted under the 1994 Stock Option Plan (the "Plan"),
including all exhibits to the Registration Statement.
It is my opinion that, upon completion of the proceedings
being taken or contemplated by the Company to be taken prior to
the issuance and sale of the Shares pursuant to the Plan,
including shareholder approval of the Plan, and upon completion
of the filings and proceedings required in order to permit such
transactions to be carried out in accordance with the
Securities Laws of the various states where required, the
Shares, when issued and sold in the manner referred to in the
Plan and the Registration Statement, will be legally and
validly issued, fully paid and nonassessable. This opinion is
being rendered pursuant to Regulation Section 229.601(b)(5).
I consent to the use of this opinion as an exhibit to the
Registration Statement, and further consent to the use of my
name wherever appearing in the Registration Statement and any
amendments thereto.
Sincerely,
Paul W. Hess
General Counsel
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this
Registration Statement of Ballard Medical Products on Form S-8
of our reports dated November 11, 1994, appearing in the Annual
Report on Form 10-K of Ballard Medical Products for the year
ended September 30, 1994.
DELOITTE & TOUCHE LLP
Salt Lake City, Utah
February 14, 1995
