<PAGE>
As filed with the Securities and Exchange Commission on June 24, 1997
REGISTRATION NO. 333 -
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
under the
SECURITIES ACT OF 1933
----------------
MICROFLUIDICS INTERNATIONAL CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 04-2790322
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
30 OSSIPEE ROAD
NEWTON, MASSACHUSETTS 02164-9101
(617) 969-5452
(Address of Principal Executive Offices)
MICROFLUIDICS INTERNATIONAL CORPORATION
1988 STOCK PLAN
(Full titles of the plans)
MICHAEL A. LENTO, PRESIDENT AND TREASURER
MICROFLUIDICS INTERNATIONAL CORPORATION
30 OSSIPEE ROAD
NEWTON, MASSACHUSETTS 02164-9101
(617) 969-5452
(Name, address, including zip code, and
telephone number, including area
code, of agent for service)
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================
Proposed Proposed
maximum maximum
Title of Amount to be offering price aggregate Amount of
securities to be registered registered/(1)/ per share/(2)/ offering price/(2)/ registration fee
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 600,000 $1.84375 $1,106,250 $336.00
============================================================================================================
</TABLE>
(1) The number of shares of common stock, par value $.01 per share ("Common
Stock"), stated above consists of the aggregate number of new shares which
may be sold upon the exercise of options which may hereafter be granted
under the Microfluidics International Corporation 1988 Stock Plan, as
amended through May 27, 1997 (the "Plan"). The maximum number of shares
which may be sold upon the exercise of such options granted under the Plan
is subject to adjustment in accordance with certain anti-dilution and other
provisions of said Plan. Accordingly, pursuant to Rule 416 under the
Securities Act of 1933, as amended (the "Securities Act"), this Registration
Statement covers, in addition to the number of shares stated above, an
indeterminate number of shares which may be subject to grant or otherwise
issuable after the operation of any such anti-dilution and other provisions.
(2) This calculation is made solely for the purpose of determining the
registration fee pursuant to the provisions of Rule 457(h) under the
Securities Act and is made on the basis of the average of the high and low
sale prices per share of the Common Stock on the National Market System of
the Nasdaq Stock Market, Inc. as of a date (June 18, 1997) within 5 business
days prior to filing this Registration Statement.
================================================================================
<PAGE>
EXPLANATORY NOTE
----------------
In accordance with the instructional Note to Part I of Form S-8 as
promulgated by the Securities and Exchange Commission, the information specified
by Part I of Form S-8 has been omitted from this Registration Statement on Form
S-8 for offers of Common Stock pursuant to the Plan. This Registration Statement
on Form S-8 hereby registers 600,000 new shares of Common Stock pursuant to the
Plan. Registration Statements on Form S-8 (File No. 33-38925), registering an
aggregate of 1,750,000 shares of Common Stock under the Plan, were filed with
the Commission on February 11, 1991 and November 25, 1994.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
- --------------------------------------------------------
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A (File No. 0-11625) filed
under the Securities Exchange Act of 1934, including any
amendment or report filed for the purpose of updating such
description.
All reports and other documents filed by the Company after the date
hereof 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 hereby have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of filing of such reports
and documents.
Item 4. Description of Securities.
- ----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- -----------------------------------------------
The validity of the issuance of the shares of Common Stock registered
under this Registration Statement has been passed upon for the Company by Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. of Boston, Massachusetts. Members
of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and certain members of
their families and trusts for their benefit own an aggregate of approximately
40,000 shares of Common Stock of the Company.
Item 6. Indemnification of Directors and Officers.
- --------------------------------------------------
Incorporated herein by reference to the Company's Registration
Statement on Form S-1, File No. 2-85290.
Item 7. Exemption from Registration Claimed.
- --------------------------------------------
Not Applicable.
Item 8. Exhibits.
- -----------------
(4.1) Restated Certificate of Incorporation (filed as Exhibit 3(a) to
the Company's Registration Statement on Form S-1, File No.
2-85290, and incorporated herein by reference).
(4.2) Restated By-Laws (filed as Exhibit 3(b) to the Company's
Registration Statement on Form S-1, as amended, File No.
2-85290, and incorporated herein by reference).
(5) Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
as to the legality of shares being registered.
II-1
<PAGE>
(10.1) The Company's 1988 Stock Plan, as amended through May 27, 1997.
(23.1) Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C. (included in opinion of counsel filed as Exhibit 5).
(23.2) Consent of Coopers & Lybrand L.L.P.
(24) Power of Attorney to file future amendments (set forth on the
signature page of this Registration Statement).
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 the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or
in the aggregate, represents a fundamental change
in the information set forth in the Registration
Statement;
(iii) 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;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement is on Form
S-3 or Form S-8, and the information required to be included in
a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act 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 that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the
II-2
<PAGE>
payment by the Company of 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 Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, 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 Newton, Commonwealth of Massachusetts on June 23, 1997.
MICROFLUIDICS INTERNATIONAL
CORPORATION
By: /s/ MICHAEL A. LENTO
----------------------------------
Michael A. Lento
President and Treasurer
Each person whose signature appears below constitutes and appoints
Michael A. Lento and Irwin J. Gruverman, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
in each of them, for him and in his name, place and stead, and in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-8 of Microfluidics International
Corporation, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in or about the premises, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his substitute or
substitutes may lawfully 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 and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ IRWIN J. GRUVERMAN Chief Executive Officer, June 23, 1997
- ------------------------------ Chairman of the Board of
Irwin J. Gruverman Directors and Secretary
(principal executive officer)
/s/ MICHAEL A. LENTO President, Treasurer June 23, 1997
- ------------------------------ and Director
Michael A. Lento (principal financial officer
and principal accounting
officer)
Director
- ------------------------------
Robert L. Bogomolny
JAMES N. LITTLE Director June 23, 1997
- ------------------------------
James N. Little
VINCENT B. CORTINA Director June 23, 1997
- ------------------------------
Vincent B. Cortina
</TABLE>
II-4
<PAGE>
MICROFLUIDICS INTERNATIONAL CORPORATION
INDEX TO EXHIBITS FILED WITH
FORM S-8 REGISTRATION STATEMENT
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page No.
- ------ ----------- --------
<S> <C> <C>
(4.1) Restated Certificate of Incorporation (filed as
Exhibit 3(a) to the Company's Registration Statement
on Form S-1, File No. 2-85290 and incorporated herein
by reference).
(4.2) Restated By-Laws (filed as Exhibit 3(b) to the
Company's Registration Statement on Form S-1, as
amended, File No. 2-85290, and incorporated herein by
reference).
(5) Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C. as to the legality of shares being
registered. 7
(10.1) The Company's 1988 Stock Plan, as amended through
May 27, 1997. 9
(23.1) Consent of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C. (included in opinion of counsel filed
as Exhibit 5). __
(23.2) Consent of Coopers & Lybrand L.L.P. 21
(24) Power of Attorney to file future amendments (set
forth on the signature page of this Registration
Statement).
</TABLE>
<PAGE>
Exhibit 5
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
701 Pennsylvania Avenue, N.W. Telephone: 617/542-6000
Washington, D.C. 20004 Fax: 617/542-2241
Telephone: 202/434-7300
Fax: 202/434-7400
June 23, 1997
Microfluidics International Corporation
30 Ossipee Road
Newton, Massachusetts 02164-9101
Ladies and Gentlemen:
We have acted as counsel to Microfluidics International Corporation, a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission of a Registration
Statement on Form S-8 (the "Registration Statement"), pursuant to which the
Company is registering the issuance of a total of six hundred thousand
(600,000) shares (the "Shares") of its common stock, $.01 par value per
share (the "Common Stock"), under the Securities Act of 1933, as amended.
This opinion is being rendered in connection with the filing of the
Registration Statement. All capitalized terms used herein and not otherwise
defined shall have the respective meanings given to them in the Registration
Statement.
In connection with this opinion, we have examined the Company's
Restated Certificate of Incorporation and Restated By-Laws, both as
currently in effect; such other records of the corporate proceedings of the
Company and certificates of the Company's officers as we have deemed
relevant; and the Registration Statement and the exhibits thereto.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon the foregoing, we are of the opinion that (i) the Shares
have been duly and validly authorized by the Company and (ii) the Shares,
when sold and when the purchase price therefor has been received by the
Company, will have been duly and validly issued, fully paid and non-
assessable shares of the Company.
Our opinion is limited to the General Corporation Laws of the State of
Delaware, and we express no opinion with respect to the laws of any other
jurisdiction. No opinion is expressed herein with respect to the
qualification of the Shares under the securities or blue sky laws of any
state or any foreign jurisdiction.
<PAGE>
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Microfluidics International Corporation
June 23, 1997
Page 2
We understand that you wish to file this opinion as an exhibit to the
Registration Statement, and we hereby consent thereto.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY AND POPEO, P.C.
<PAGE>
EXHIBIT 10.1
(As Amended May 27, 1997)
MICROFLUIDICS INTERNATIONAL CORPORATION
1988 STOCK PLAN
1. Purpose. This 1988 Stock Plan (the "Plan") is intended to provide
incentives (a) to the officers and other employees of Microfluidics
International Corporation (the "Company"), its parent (if any) and any present
or future subsidiaries of the Company (collectively, "Related Corporations") by
providing them with opportunities to purchase stock in the Company pursuant to
options granted hereunder which qualify as "incentive stock options" ("ISO" or
"ISOs") under Section 422 (b) of the Internal Revenue Code of 1986, as amended
(the "Code"); (b) to directors, officers, employees and consultants of the
Company and Related Corporations, or any other person or entity, as determined
by the applicable administrator (as described in paragraph 2) to be in the best
interests of the Company, by providing them with opportunities to purchase stock
in the Company pursuant to options granted hereunder which do not qualify as
ISOs ("Non-Qualified Option" or "Non-Qualified Options"); (c) to directors,
officers, employees and consultants of the Company and Related Corporations, or
any other person or entity, as determined by the applicable administrator (as
described in paragraph 2) to be in the best interests of the Company, by
providing them with awards of stock in the Company ("Awards"); (d) to directors,
officers, employees and consultants of the Company and Related Corporations, or
any other person or entity, as determined by the applicable administrator (as
described in paragraph 2) to be in the best interests of the Company, by
providing them with Stock Appreciation Rights ("SAR" or "SARs") in tandem with,
or independently of, options granted hereunder; (e) to officers and other
employees and consultants of the Company and Related Corporations, or any other
person or entity, as determined by the applicable administrator (as described in
paragraph 2) to be in the best interests of the Company, by providing them with
Stock Depreciation Rights ("SDR" or "SDRs") to cover shares of stock purchasable
under any Non-Qualified Option granted hereunder by any recipient of a SDR
granted hereunder; (f) to directors, officers, employees and consultants of the
Company and Related Corporations, or any other person or entity, as determined
by the applicable administrator (as described in paragraph 2) to be in the best
interests of the Company by providing them performance awards in the form of
units ("Units") representing phantom shares of stock ("phantom share" or
"phantom shares"), each Unit representing one phantom share; and (g) to
directors, officers, employees and consultants of the Company and Related
Corporations, or any other person or entity, as determined by the applicable
administrator (as described in paragraph 2) to be in the best interests of the
Company, by providing them with opportunities to make direct purchases of stock
in the Company ("Purchases"). Anything in this Plan to the contrary
notwithstanding, Stock Rights (as described below in this paragraph 1) shall not
be granted hereunder to any non-employee director of the Company.
Both ISOs and Non-Qualified Options are referred to hereafter individually
as an "Option" and collectively as "Options". Options, Awards, SARs, SDRs,
Units and authorizations for Purchases are referred to hereafter collectively as
"Stock Rights". Recipients
<PAGE>
of such Stock Rights are hereafter referred to individually as an "Optionee" and
collectively as "Optionees". As used herein, the terms "parent" and "subsidiary"
mean "parent corporation" and "subsidiary corporation", respectively, as those
terms are defined in Section 424 of the Code.
2. Administration of the Plan. The Plan shall be administered (i) to
the extent required with respect to specific grants of Stock Rights by Rule 16b-
3 of the Securities and Exchange Commission ("Rule 16b-3") under the Securities
and Exchange Act of 1934, as amended (the "1934 Act"), by two or more
disinterested directors in compliance with Rule 16b3, and (ii) in all other
cases, by such administrator or administrators as the Board of Directors may
designate (collectively, the "Administrators").
Subject to ratification of the grant or authorization of each Stock Right
by the Board of Directors (the "Board") (if so required by applicable state
law), and subject to the terms of the Plan, the applicable Administrator shall
have the authority to (i) determine the employees of the Company and Related
Corporations (from among the class of employees eligible under paragraph 1 to
receive ISOs) to whom ISOs may be granted, and to determine (from among the
class of individuals and entities eligible under paragraph 1 to receive Non-
Qualified Options, Awards, SARs, SDRs, and Units and authorizations to make
Purchases) to whom Non-Qualified Options, Awards, SARs, SDRs, Units and
authorizations to make Purchases may be granted; (ii) determine the time or
times at which Options, Awards, SARs, SDRs or Units may be granted or Purchases
made; (iii) determine the option price of shares subject to each Option, subject
to the requirements of paragraph 5 with respect to ISOs, and the purchase price
of shares subject to each Purchase; (iv) determine whether each Option granted
shall be an ISO or a Non-Qualified Option; (v) determine (subject to paragraph 5
with respect to ISOs) the time or times when each Option shall become
exercisable and the duration of the exercise period; (vi) determine whether
restrictions such as repurchase rights are to be imposed on shares subject to
Stock Rights and the nature of such restrictions, if any; and (vii) interpret
the Plan and prescribe and rescind rules and regulations relating to it. If the
applicable Administrator determines to issue a Non-Qualified Option, it shall
take whatever actions it deems necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such Option is not treated as
an ISO. The interpretation and construction by an Administrator of any
provisions of the Plan or of any Stock Right granted under it shall be final
unless otherwise determined by the Board. Administrators or the Board may from
time to time adopt such rules and regulations for carrying out the Plan as they
may deem necessary. No member of the Board nor any Administrator shall be liable
for any action or determination made in good faith with respect to the Plan or
any Stock Right granted under it.
3. Stock. The stock subject to Options, Awards, SARs, SDRs, Units and
authorizations to make Purchases shall be authorized but unissued shares of
Common Stock of the Company, par value $.01 per share (the "Common Stock"), or
shares of Common Stock reacquired by the Company in any manner. The aggregate
number of shares of Common Stock which may be issued pursuant to the Plan is two
million three hundred fifty thousand (2,350,000). The number of shares
authorized for the grant of Stock Rights under the Plan shall be subject to
adjustment as provided in paragraph 10. If any Option or any other Stock Right
granted under the Plan shall expire or terminate for any reason without having
been exercised in
2
<PAGE>
full or shall cease for any reason to be exercisable in whole or in part, or if
the Company shall reacquire any unvested shares issued pursuant to Awards or
authorization for Purchase, the unpurchased shares subject to such Options or
Stock Rights and any unvested shares so reacquired by the Company shall again be
available for grants of Stock Rights under the Plan.
4. Granting of Stock Rights. Stock Rights may be granted under the
Plan at any time after January 6, 1989. The date of grant of a Stock Right under
the Plan will be the date specified by the applicable Administrator at the time
it completes all actions necessary to grant such Stock Right; provided, however,
-------- -------
that such date shall not be prior to the date on which the applicable
Administrator acts to approve the grant. In no event shall any officer or
employee be granted more than 500,000 shares of the Company's Common Stock
pursuant to this Plan in any one fiscal year. The applicable Administrator shall
have the right, with the consent of the Optionee, to convert an ISO granted
under the Plan to a Non-Qualified Option pursuant to paragraph 13.
5. ISO Provisions. Any of the following provisions shall have no force
or effect if their inclusion in the Plan is not necessary for Options issued as
ISOs to qualify as ISOs pursuant to the Code and the regulations issued
thereunder.
A. Minimum Option Price for ISOs.
(i) The price per share specified in the agreement
relating to each ISO granted under the Plan shall not be less than the fair
market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to any employee owning stock as of the date of
such grant representing more than ten percent of the total combined voting
power of all classes of stock of the Company or any Related Corporation,
the price per share specified in the agreement relating to such ISO shall
not be less than 110 percent of the fair market value per share of Common
Stock on the date of grant.
(ii) In no event shall the aggregate fair market value
(determined at the time an ISO is granted) of Common Stock for which ISOs
granted to any employee are exercisable for the first time by such
employee during any calendar year (under all stock option plans of the
Company and any Related Corporation) exceed $100,000.
(iii) If, at the time an ISO is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes
discussed in this sentence are available prior to the date such Option is
granted and shall mean (i) the average (on that date) of the high and low
prices of Common Stock on the principal national securities exchange on
which the Common Stock is traded, if the Common Stock is then traded on a
national securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the Nasdaq National Market, if the Common
Stock is not then traded on a national securities exchange; or (iii) the
closing bid price (or average of bid prices) last quoted (on that day) by
an established quotation service for over-the-counter securities, if the
Common Stock
3
<PAGE>
is not reported on the Nasdaq National Market. However, if the Common Stock
is not publicly traded at the time an ISO is granted under the Plan, "fair
market value" shall be deemed to be the fair value of the Common Stock as
determined by the applicable Administrator after taking into consideration
all factors which it deems appropriate, including, without limitation,
recent sale and offer prices of the Common Stock in private transactions
negotiated at arm's length.
B. Duration of ISOs. Subject to earlier termination as
provided in subparagraphs E and F hereunder, each ISO shall expire on the date
specified by the applicable Administrator, but not more than (i) ten years from
the date of grant in the case of ISOs generally, and (ii) five years from the
date of grant in the case of ISOs granted to an employee owning stock possessing
more than ten percent of the total combined voting power of all classes of stock
of the Company or any Related Corporation. Subject to the foregoing provisions
and such earlier termination as provided in said subparagraphs E and F, the term
of each ISO shall be the term set forth in the original instrument granting such
ISO, except with respect to any part of such ISO that is converted into a Non-
Qualified Option pursuant to paragraph 13.
C. Eligible Employees. ISOs may be granted to any employee of
the Company or any Related Corporation. Those officers and directors of the
Company who are not employees may not be granted ISOs under the Plan.
D. Acceleration of Exercise of ISOs. The Administrator shall
not, without the consent of the Optionee, accelerate the exercise date of any
installment of any ISO granted to any employee (and not previously converted
into a Non-Qualified Option pursuant to paragraph 13) if such acceleration would
violate the annual vesting limitation contained in Section 422 (d) of the Code,
as described in subparagraph A(ii) herein above.
E. Effect of Termination of Employment on ISOs. If an ISO
Optionee ceases to be employed by the Company or any Related Corporations other
than by reason of death or disability (as such term is defined in subparagraph F
hereunder), any ISO granted to such Optionee within the six-month period
immediately preceding such termination shall be canceled forthwith. With respect
to any ISOs granted to such Optionee more than six months prior to such
termination, no further installments of such ISOs shall become exercisable and
his ISOs shall terminate after the passage of 60 days from the date of
termination of his employment, but in no event later than on their specified
expiration dates, except to the extent that such ISOs (or unexercised
installments thereof) have been converted into Non-Qualified Options pursuant to
paragraph 13. Leave of absence with the written approval of the applicable
Administrator shall not be considered an interruption of employment under the
Plan, provided that such written approval contractually obligates the Company or
any Related Corporation to continue the employment of the employee after the
approved period of absence. Employment shall also be considered as continuing
uninterrupted during any other bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such Optionee's right to reemployment is guaranteed by statute.
ISOs granted under the Plan shall not be affected by any change of employment or
within or among the Company and Related
4
<PAGE>
Corporations, so long as the Optionee continues to be an employee of the Company
or any Related Corporation.
F. Effect of Death or Disability. If an Optionee ceases to be
employed by the Company or any Related Corporation by reason of his death, any
ISO owned by such Optionee may be exercised, to the extent of the number of
shares with respect to which he could have exercised it on the date of his
death, by his estate, personal representative or beneficiary who has acquired
the ISO by will or by the laws of descent and distribution, at any time prior to
the earlier of the date specified in the ISO agreement, the ISO's specified
expiration date or one year of the death of the Optionee.
If an Optionee ceases to be employed by the Company and all Related
Corporations by reason of his disability, he shall have the right to exercise
any ISO held by him on the date of termination of employment, to the extent of
the number of shares with respect to which he could have exercised it on that
date, at any time prior to the earlier of the date specified in the ISO
agreement, the ISO's specified expiration date or one year from the date of the
termination of the Optionee's employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as defined in Section
22(e)(3) of the Code or successor statute.
G. Adjustments. Any adjustments made pursuant to sub-
paragraphs A or B of this paragraph 5 with respect to ISOs shall be made only
after the applicable Administrator, after consulting with counsel for the
Company, determines whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 424 of the Code) or would cause
any adverse tax consequences for the holders of such ISOs. If the applicable
Administrator determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making such
adjustments.
H. Notice to Company of Disqualifying Dispositions. By
accepting an ISO granted under the Plan, each ISO Optionee agrees to notify the
Company in writing immediately after such Optionee makes a "disqualifying
disposition" of any Common Stock acquired pursuant to the exercise of an ISO. A
disqualifying disposition generally is (as defined in Sections 421, 422 and 424
of the Code) any disposition (including any sale) of such Common Stock before
the later of (a) two years after the date the employee was granted the ISO or
(b) the date one year after the date the employee acquired Common Stock by
exercising the ISO.
I. Other Requirements. ISOs shall be issued subject to such
additional requirements as may be imposed from time to time by the Code or the
regulations issued thereunder.
6. Stock Appreciation Rights. At the discretion of the applicable
Administrator, Options granted under this Plan may be granted in tandem with
SARs ("tandem SARs"), or SARs may be granted independently of and not in tandem
with any Option ("naked SARs"). SARs will become exercisable at such time or
times, as on such conditions, as the applicable Administrator may specify; the
applicable Administrator may impose conditions upon the grant or exercise of any
SAR, which conditions may include a condition that the SAR may only be
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exercised in accordance with rules and regulations adopted by the Board or such
applicable Administrator from time to time. Such rules and regulations may
govern the right to exercise the SAR granted prior to the adoption or amendment
of such rules and regulations as well as SAR rights granted thereunder.
A. Tandem SARs.
(i) Any tandem SAR granted with an ISO may be granted
only at the date of grant of such ISO. Any tandem SAR granted with a Non-
Qualified Option may be granted either at or after the time such Option is
granted. A tandem SAR is the right of an Optionee, without payment to the
Company (except for applicable withholding taxes), to receive the excess of
the fair market value (as defined in subparagraph 5(A)(iii)) per share on
the date on which such SAR is exercised over the option price per share as
provided in the related underlying Option. A tandem SAR granted with an ISO
may be exercised only when the fair market value (as defined in
subparagraph 5(A)(iii)) per share of the Common Stock subject to the ISO
exceeds the per share exercise price of the ISO. A tandem SAR granted with
an ISO shall subject to the same restrictions on transferability as the
underlying ISO. A tandem SAR granted with an Option shall pertain, to, and
be granted only in conjunction with, the related underlying Option granted
under this Plan and shall be exercisable and exercised only to the extent
and that the underlying Option is exercisable. The number of shares of
Common Stock subject to such tandem SAR shall be all or part of the shares
subject to such Option as determined by the applicable Administrator. The
tandem SAR shall either become fully or partially non-exercisable and shall
then be fully and partially forfeited if the exercisable portion, or any
part thereof, or the underlying Option is exercised and vice versa.
(ii) Subject to any additional restrictions or conditions
imposed by the applicable Administrator, a tandem SAR may be exercised by
the Optionee as to a number of shares of Common Stock under its related
Option only upon the surrender of the then-exercisable portion of the
related Option covering a like number of shares of Common Stock. Upon the
exercise of a tandem SAR and the surrender of the exercisable portion of
the related Option, the Optionee shall be awarded cash, shares of Common
Stock or a combination of shares and cash at the discretion of the
applicable Administrator. The award shall have a total value equal to the
product obtained by multiplying (1) the excess of the fair market value per
share on the date of which such tandem SAR is exercised over the Option
price per share by (2) the number of shares subject to the exercisable
portion of the related Option so surrendered.
B. Naked SARs.
(i) A naked SAR may be granted irrespective of whether
the recipient holds, is being granted, or has been granted any options
under any stock plan of the Company. A naked SAR may be granted
irrespective of whether the recipient holds, is being granted, or has been
granted any tandem SARs. A naked SAR may be made exercisable without regard
to the exercisability of any Option.
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(ii) With respect to the exercise of any naked SAR, the
term "Spread" as used in this paragraph 6 shall mean an amount equal to the
product computed by multiplying (1) the excess of (A) the fair market value
per share of Common Stock of the Company on the date such naked SAR is
exercised over (B) the price designated by the applicable Administrator
(the "Award Price") by (2) the number of shares with respect to which such
naked SAR is being exercised.
C. General Provisions.
(i) The applicable Administrator may specify that a SAR
shall be exercisable for cash, for shares, for a combination of cash or
shares, or in cash or shares at the holder's option. On the exercise of a
SAR, the holder thereof, except as provided in subparagraphs (ii) and (iii)
of this paragraph 6(C), shall be entitled to receive either:
(a) if the exercise is for shares, a number of
shares equal to the quotient computed by dividing the Spread by the
fair market value per share of Common Stock (as determined in
accordance with paragraph 5(A)(iii)) on the date of exercise of the
SAR, provided, however, that in lieu of fractional shares the
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Company shall pay cash equal to the same fraction of the fair
market value per share on the date of exercise of the SAR; or
(b) if the exercise is for cash, an amount in cash
equal to the Spread; or
(c) if the exercise is partly for cash and partly
for shares, a combination of cash in the amount specified in such
SAR holder's notice of exercise, and a number of shares calculated
as provided in clause (a) of this subparagraph (i), after reducing
the Spread by such cash amount, plus cash in lieu of any fractional
share as provided above.
(ii) Notwithstanding the provisions of subparagraph (i) of
this paragraph 6(C) the applicable Administrator shall have sole discretion
to consent to or disapprove, in whole or in part, any permitted election or
the right without election of a holder of a SAR to receive cash upon the
exercise of a SAR ("Cash Election"). Such consent or disapproval may be
given at any time after the Cash Election to which it relates. If the
applicable Administrator shall disapprove a Cash Election, in lieu of
paying the cash (or any portion thereof) specified in such Cash Election,
the Administrator shall determine the amount of cash, if any, to be paid
pursuant to such Cash Election and shall issue a number of shares
calculated as provided in paragraph 6(C)(i)(a) after reducing the Spread by
such cash to be paid plus cash in lieu of any fractional share.
(iii) SARs granted to officers or directors of the Company
shall be subject to the following additional provisions; (a) a Cash
Election may be made only
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during the period beginning on the third business day following the date of
release for publication of the quarterly and annual summary statements of
sales and earnings of the Company and ending on the twelfth business day
following such date; and (b) no Cash Election may be made (and no related
Option exercised) during the six months after grant, except in the event of
the death or disability of the holder as provided. The Company intends that
this paragraph (iii) shall comply with the requirements of Rule 16b-3
promulgated under the 1934 Act. Should any provision of this subparagraph
(iii) be unnecessary to comply with the requirements of the said Rule 16b-
3, the Board may amend this Plan to add to or modify the provisions of this
Plan accordingly.
(iv) No SAR shall be transferable except by will or by the
laws of descent and distribution. During the life of a holder of a SAR, the
SAR shall be exercisable only by him or his guardian or legal
representative.
(v) A person exercising a SAR for shares shall not be
treated as having become the registered owner of any shares issued on such
exercise until such shares are delivered to him.
(vi) Each SAR shall be on such terms and conditions
(including additional terms and conditions) not inconsistent with this Plan
as the applicable Administrator may determine.
(vii) To exercise a SAR, the holder shall (i) give written
notice thereof to the Company addressed to Irwin J. Gruverman by delivery
to Microfluidics International Corporation at 30 Ossippee Road, Newton,
Massachusetts 02164, and by specifying therein the amount he elects (if
such election is permitted under the terms of the SAR) to receive in cash,
if any, and the amount he elects (if such election is permitted under the
terms of the SAR) to receive in shares and (ii) deliver to the Company such
written representations, warranties and covenants as may be required by the
Company or Company counsel. The date of exercise of a SAR shall be the date
on which the Company shall have received the notice referred to in the
first sentence of this subparagraph (vii).
(viii) The number of shares awardable to an Optionee with
respect to the noncash portion of a SAR shall be determined by dividing
such noncash portion by the fair market value per share (as determined in
accordance with subparagraph 5(A)(iii)) on the exercise date. No fractional
shares shall be issued. Any fractional share which, but for this
subparagraph (viii), would have been issued to an Optionee pursuant to a
SAR, shall be deemed to have been issued and immediately sold to the
Company for their fair market value, and the Optionee shall receive from
the Company cash in lieu of such fractional shares.
7. Stock Depreciation Rights. The Board or applicable Administrator may
grant SDRs to cover shares of stock purchased under any Non-Qualified Option. A
SDR may be granted either at or after the time the related Option is granted.
SDRs, unless otherwise specified
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by the applicable Administrator, entitle the Optionee to receive with respect to
each share of Common Stock covered by the SDR (a "Covered Share") a cash amount
equal to the positive difference, if any, produced by subtracting the greater of
the Six-Month Spread or the Sale Spread from the Exercise Spread, with such
terms being defined as follows:
(i) the Exercise Spread is the fair market value (as
determined in accordance with paragraph 5(A)(iii)) per Covered Share on the
date of exercise of the Option, minus the exercise price per share, but not
less than zero;
(ii) the Six-Month Spread is the fair market value (as
determined in accordance with paragraph 5(A)(iii)) per Covered Share on the
date which is six months after exercise of the Option, minus the exercise
price per share, but not less than zero;
(iii) the Sale Spread is the fair market value (as
determined in accordance with paragraph 5(A)(iii)) per Covered Share on the
date such share is sold, minus the exercise price per share of the Option
pursuant to which the share was purchased, but not less than zero.
Except as otherwise provided in the Plan or the instrument evidencing the
grant of the SDR, the payment, if any, due under an SDR with respect to a
covered share will be made within 30 days following the later of (i) the date on
which the share is disposed of by the Optionee and (ii) such later date as may
be provided in the instrument evidencing the grant of the SDR.
The applicable Administrator may, at the time of grant, impose on the SDR
such terms and conditions as it may deem appropriate, including, without
limitation, the requirement that the Optionee remain as an employee until the
SDR is paid or that other conditions be fulfilled before the SDR is paid.
SDRs with respect to unexercised Options (or portions thereof) will
terminate when such Options expire or are otherwise terminated.
8. Units. At the discretion of the applicable Administrator,
performance awards in the form of Units may be granted either independently of
or in tandem with a Stock Right granted hereunder, to such extent as determined
by the applicable Administrator, provided, however, that such Units shall not be
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granted in tandem with ISOs granted under the Plan. Units granted hereunder may
be based on such factors as changes in the market price for shares of Common
Stock of the Company, personal performance of the recipient of such Units or of
his division or department, the performance of the Related Corporation by which
he is employed, or any other factors or criteria set by the applicable
Administrator. Units shall have such other terms and conditions as the
applicable Administrator shall determine and shall be payable in such form as
such Administrator may determine including, for example, payment in shares of
the Company's Common Stock.
9. Terms and Conditions of Stock Rights. Stock Rights shall be
evidenced by instruments (which need not be identical) in such forms as the
applicable Administrator may
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from time to time approve. Such instruments shall conform to such terms,
conditions and provisions as are applicable under this Plan and may contain such
other terms and conditions and provisions as the applicable Administrator deems
advisable which are not inconsistent with the Plan, including restrictions
applicable to shares of Common Stock issuable upon exercise of Stock Rights. A
Stock Right may provide for acceleration of exercise in the event of a change in
control of the Company, in the discretion of and as defined by the applicable
Administrator. The applicable Administrator may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments. The proper
officers of the Company are authorized and directed to take any and all action
necessary or advisable from time to time to carry out the terms of such
instruments.
10. Adjustments. Upon the happening of any of the following described
events, an Optionee's rights with respect to Options granted to him hereunder,
and the recipient's rights with respect to Common Stock to be acquired (or used
for measurement purposes) pursuant to an authorization to the exercise of SDRs,
SARs, Units, or to be acquired pursuant to an authorization to Purchase or an
Award hereunder, shall be adjusted as hereinafter provided, unless otherwise
specifically provided, in addition or to the contrary, in the written agreement
between the recipient and the Company relating to such Stock Right.
A. In the event shares of Common Stock shall be subdivided or
combined into a greater or smaller number of shares or if, upon a merger,
consolidation, reorganization, split-up, liquidation, combination,
recapitalization or the like of the Company, the shares of Common Stock
shall be exchanged for other securities of the Company or of another
corporation, each grantee of a Stock Right shall be entitled, subject to
the conditions herein stated, to purchase (or have used for measurement
purposes) such number of shares of Common Stock or amount of other
securities of the Company or such other corporation as were exchangeable
for the number of shares of Common Stock which such grantee would have been
entitled to purchase (or have used for measurement purposes) except for
such action, and appropriate adjustments shall be made in the purchase
price per share to reflect such subdivision, combination or exchange.
B. In the event the Company shall issue any of its shares as a
stock dividend upon or with respect to the shares of stock of the class
which at the time shall be subject to a Stock Right hereunder, each grantee
upon exercising a Stock Right shall be entitled to receive (for the
purchase price paid upon such exercise) (or have used for measurement
purposes) the shares or other consideration as to which he is exercising
his Stock Right and, in addition thereto (at no additional cost), such
number of shares of the class or classes in which such stock dividend or
dividends were declared or paid, and such amount of cash in lieu of
fractional shares, or other consideration as he would have received if he
had been the holder of the shares as to which he is exercising (or which
are used for measurement in connection with) his Stock Right at all times
between the date of grant of such Stock Right and the date of its exercise.
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C. If any person or entity owning restricted Common Stock
obtained by exercise of a Stock Right made hereunder receives new or
additional or different shares or securities ("New Securities") in
connection with a corporate transaction described in subparagraph A above
or a stock dividend described in subparagraph B above as a result of owning
such restricted Common Stock, such New Securities shall be subject to all
of the conditions and restrictions applicable to the restricted Common
Stock with respect to which such New Securities were issued.
D. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company, unless specified to the
contrary by the applicable Administrator in the instrument evidencing such
Stock Right.
E. No fractional shares shall actually be issued under the
Plan. Any fractional shares which, but for this subparagraph E, would have
been issued to a grantee pursuant to a Stock Right shall be deemed to have
been issued and immediately sold to the Company for their fair market
value, and the grantee shall receive from the Company cash in lieu of such
fractional shares.
F. Upon the happening of any of the foregoing events described
in subparagraphs A or B above, the class and aggregate number of shares set
forth in paragraph 3 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan shall
also be appropriately adjusted to reflect the events described in such
subparagraphs. The Board shall determine the specific adjustments to be
made under this paragraph 10 and, subject to paragraph 5(G), its
determination shall be conclusive.
11. Means of Exercising Stock Rights. A Stock Right (or any part of
installment thereof) shall be exercised as specified in the written instrument
granting such Stock Right, which instrument may specify any legal method of
exercise. The holder of a Stock Right exercisable for shares shall not have the
rights of a shareholder with respect to the shares covered by his Stock Right
until the date of issuance of a stock certificate to him for such shares. Except
as expressly provided above in paragraph 10 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
12. Term and Amendment of Plan. This Plan was adopted by the Board on
December 20, 1988, effective January 6, 1989, and was approved by the
shareholders on June 2, 1989. The Plan was amended by the Board of Directors on
February 17, 1993 to increase the number of shares authorized to be issued under
the Plan from 1,000,000 shares to 1,750,000 shares. This increase was approved
by the shareholders on June 8, 1993. The Plan was amended by the Board of
Directors on April 4, 1997 (subject to shareholder approval) to increase the
number of shares authorized to be issued under the Plan from 1,750,000 shares to
2,350,000 shares. This increase was approved by the shareholders on May 27,
1997. The Board may terminate or amend the Plan in any respect at any time,
except that no amendment requiring shareholder approval under provisions of the
Code and related regulations relating to ISOs or
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under Rule 16b-3 (or any successor or amended rule) will be effective without
approval of shareholders as required and within the times set by such rules.
13. Conversion of ISOs into Non-Qualified Options; Termination of ISOs.
The applicable Administrator, at the written request or with the written consent
of any Optionee, may in its discretion take such actions as may be necessary to
convert such Optionee's ISOs (or any installments or portions of installments
thereof) that have not been exercised on the date of conversion into Non-
Qualified Options at any time prior to the expiration of such ISOs, regardless
of whether the Optionee is an employee of the Company or a Related Corporation
at the time of such conversion. Such actions may include, but shall not be
limited to, extending the exercise period or reducing the exercise price of the
appropriate installments of such ISOs. At the time of such conversion the
applicable Administrator (with the consent of the Optionee) may impose such
conditions on the exercise of the resulting Non-Qualified Options as the
applicable Administrator in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any Optionee the right to have such Optionee's ISOs converted
into Non-Qualified Options, and except as otherwise provided by the Code, no
such conversion shall occur until and unless the Administrator takes appropriate
action. The applicable Administrator, with the consent of the Optionee, may also
terminate any portion of any ISO that has not been exercised at the time of such
termination.
14. Application of Funds. The proceeds received by the Company from
the sale of shares pursuant to Options granted and Purchases authorized under
the Plan shall be used for general corporate purposes.
15. Governmental Regulation. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.
16. Withholding of Additional Income Taxes and Employment Taxes. Upon
the exercise of a Non-Qualified Option, the grant of an Award, the making of a
Purchase of Common Stock for less than its fair market value, the making of a
Disqualifying Disposition (as defined in paragraph 5(H), the vesting of
restricted Common Stock acquired on the exercise of Stock Right hereunder, or
any other event in connection with a Stock Rights the Company may in accordance
with Section 3402(c) of the Code, may require the Optionee, award recipient,
purchaser or holder or exerciser of a Stock Right to pay additional withholding
taxes in respect of the amount that is considered compensation receivable in
such program's gross income.
17. Governing Law; Construction. The validity and construction of the
Plan and the instruments evidencing Stock Rights shall be governed by the laws
of the State of Delaware. In construing this Plan, the singular shall include
the plural and the masculine gender shall include the feminine and neuter,
unless the context otherwise requires.
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Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Microfluidics International Corporation on Form S-8 of our report dated February
12, 1997, on our audits of the consolidated financial statements of
Microfluidics International Corporation as of December 31, 1996 and 1995, and
for each of the three years in the period ended December 31, 1996, which report
is included in Microfluidics International Corporation Annual Report on Form
10-K for the year ended December 31, 1996.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 24, 1997
