As filed with the Securities and Exchange Commission on December ___,1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Q-MED, INC.
(Exact name of issuer as specified in its charter)
Delaware 22-2468655
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Metro Park South, Laurence Harbor, NJ 08878
(Address of Principal Executive Offices) (Zip Code)
Q-Med, Inc. 1997 Equity Incentive Plan
Warrants Granted as Compensation
Pursuant to Written Agreements
(Full title of the Plan)
Michael W. Cox
Q-Med, Inc.
100 Metro Park South
Laurence Harbor, NJ 08878
(Name and address of agent for service)
(732) 566-2666
(Telephone number, including area
code of agent for service)
Approximate date of commencement of proposed sale to the public: Upon
exercise of the options granted under the Stock Option Plans, but in no event
prior to the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be to be price per offering registration
registered registered(1) share price fee(2)
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Common Stock,
$.001 par value,
issuable pursuant
to the Plan 600,000 $4.94 $2,964,000 $ 782.50
Common Stock(3) 215,000 $1.67 359,050 94.79
Common Stock(3) 60,000 $3.00 180,000 47.59
Common Stock(3) 65,000 $3.6438 336,487 88.83
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$1,013.21
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<PAGE>
(1) The aggregate amount of securities registered hereunder is 940,000
shares of common stock which have been authorized and reserved for issuance
under the Plans. Pursuant to Rule 416 promulgated under the Securities Act of
1933, as amended, this Registration Statement covers such additional shares of
common stock to be offered or issued to prevent dilution as a result of future
stock splits, stock dividends or similar transactions.
(2) The fee with respect to these shares has been calculated pursuant to
Rules 457(h) and 457(c) under the Securities Act of 1933 and based upon the
average of the bid and ask prices per share of the Registrant's Common Stock on
November 4, 1999 a date within five (5) days prior to the date of filing of this
Registration Statement, as reported by NASDAQ.
(3) Issuable upon the exercise of Warrants granted to certain directors,
former directors and consultants of the Company.
EXPLANATORY NOTE
The Reoffer Prospectus, filed as part of this Registration Statement, has
been prepared in accordance with the requirements of Form S-3 and will be used
for offers of Common Stock of Q-Med, Inc. (the "Company"), acquired by persons
who may be deemed to be affiliates of the Company (as that term is defined in
Rule 405 under the Securities Act of 1933, as amended) pursuant to the Company's
1997 Equity Incentive Plan (the "Plan").
<PAGE>
Q-MED, INC.
CROSS REFERENCE SHEET
Between Items of Form S-3 and Prospectus
Pursuant to Rule 501(b) of Regulation S-K
Registration Statement
Item and Heading Location in Prospectus
---------------- ----------------------
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus........................ Cover Page
2. Inside Front and Outside Back
Cover Pages of Prospectus....................... Inside Cover Page
3. Summary Information, Risk
Factors and Ratio of Earnings
to Fixed Charges................................ Introduction
4. Use of Proceeds................................. Not applicable
5. Determination of Offering Price................. Not applicable
6. Dilution........................................ Not applicable
7. Selling Security Holders........................ Cover Page, Selling
Shareholders
8. Plan of Distribution............................ Selling Shareholders
9. Description of Securities
to be Registered................................ Documents Incorporated by
Reference
10. Interests of Named Experts
and Counsel..................................... Legal Opinion and Experts
11. Material Changes................................ Not applicable
12. Incorporation of Certain
Information by Reference........................ Documents Incorporated by
Reference
13. Disclosure of Commission
Position on Indemnification of
Securities Act Liabilities...................... Indemnification
<PAGE>
REOFFER PROSPECTUS
Q-Med, Inc.
940,000 Shares
Common Stock
$.001 par value
--------------
This Prospectus is being used in connection with the offering from time to
time by certain shareholders of Q-Med, Inc. ("Selling Shareholders") or their
successors in interest of shares of the Common Stock ($.001 par value) of Q-Med,
Inc. ("Common Stock") which have been or may be acquired upon the exercise of
stock options or stock awards pursuant to the Q-Med, Inc. 1997 Equity Incentive
Plan (the "Incentive Plan" or "Plan") and upon the exercise of warrants granted
as compensation to certain directors, former directors and consultants of the
Company.
The Common Stock may be sold from time to time by the Selling Shareholders
or by pledgees, donees, transferees, or other successors in interest. Such sales
may be made in the over-the-counter market or otherwise at prices and at terms
then prevailing or at prices related to the then current market price, or in
negotiated transactions. The Common Stock may be sold by one or more of the
following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account pursuant
to this Prospectus; (c) an exchange distribution in accordance with the rules of
such exchange; and (d) ordinary brokerage transactions and transactions in which
the broker solicits purchases. In effecting sales, brokers, or dealers engaged
by the Selling Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from
Selling Shareholders in amounts to be negotiated immediately prior to the sale.
Such brokers or dealers and any other participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Act") in connection with such sales. In addition, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus. Q-Med, Inc. will
not receive any of the proceeds from the sale of these shares, although it has
paid the expenses of preparing this Prospectus and the related Registration
Statement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
-------------------
The last sale price of Q-Med, Inc. Common Stock as reported by the NASDAQ
SmallCap Market on December 20, 1999 was $4.94.
-------------------
The date of this Prospectus is December 21, 1999.
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR TO MAKE REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING CONTAINED HEREIN AND, IF GIVEN OR MADE INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING OF ANY SECURITIES OTHER
THAN THOSE TO WHICH IT RELATES OR IN ANY STATE OR OTHER JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR SINCE THE DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN.
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-8 under the
Securities Act with respect to the Common Stock offered hereby. This Prospectus,
which constitutes a part of the Registration Statement, omits certain of the
information contained in the Registration Statement and the exhibits and
schedules thereto on file with the Commission pursuant to the Securities Act and
the rules and regulations of the Commission thereunder. For further information
with respect to the Company and its Common Stock, reference is made to the
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus regarding the contents of any agreement or other
document filed as an exhibit to the Registration Statement are not necessarily
complete, and in each instance reference is made to the copy of such agreement
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. The Registration Statement,
including the exhibits and schedules thereto, can be inspected and copied at the
Commission's offices as described above.
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files annual and quarterly reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C. 20549, as well as at
the Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York,
New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained at prescribed
rates from the Public Reference Room of the Commission at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549. Information concerning the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-800-SEC-0330. The Commission maintains an Internet site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants, including the Company, that file
electronically with the Commission.
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<PAGE>
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been or may be incorporated by reference
in this Prospectus but is not delivered with this Prospectus (other than
exhibits to such information unless such exhibits are incorporated by reference
in this Prospectus). Such requests may be mailed to Q-Med, Inc., 100 Metro Park
South, Laurence Harbor, New Jersey 08878, Attention: Debra Fenton, or may be
made by telephone to Ms. Fenton at (908) 566-2666.
2
<PAGE>
TABLE OF CONTENTS
Page
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AVAILABLE INFORMATION........................................... 1
SELLING SHAREHOLDERS............................................ 4
DOCUMENTS INCORPORATED BY REFERENCE............................. 4
EXPERTS......................................................... 4
LEGAL OPINION................................................... 4
INDEMNIFICATION ................................................ 5
3
<PAGE>
SELLING SHAREHOLDERS
Shares of Common Stock may be offered by certain officers and directors who
are to be named in one or more supplements to this Prospectus, who acquire
shares pursuant to the exercise of options or stock grants pursuant to the Plan.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated in this Prospectus by reference
and made a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended November
30, 1998;
(b) The Company's 1998 Annual Report to Shareholders;
(c) The Company's Proxy Statement dated September 21, 1999 for Annual Meeting
of Stockholders held October 25, 1999;
(d) The Company's Quarterly Reports on Form 10-Q dated February 28, 1999, May
31, 1999 and July 31, 1999; and
(e) The Company's Current Reports on Form 8-K dated May 17, 1999 and August 25,
1999.
In addition, all documents filed by the Company pursuant to Sections 13 or
14 of the Securities Exchange Act of 1934, as amended, subsequent to the end of
the fiscal year covered by the 1998 Annual Report and prior to the termination
of the offering of securities hereunder, shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents.
EXPERTS
The consolidated financial statements of the Company at November 30, 1998
and 1997 and for the three years ended November 30, 1998 incorporated by
reference herein and in the registration statement have been audited by Amper,
Politziner & Mattia P.A., independent auditor as set forth in their respective
report thereon incorporated herein by reference, and is included in reliance
upon such report given on the authority of such firm as experts in accounting
and auditing.
LEGAL OPINION
The consolidated financial statements of the Company at November 30, 1998
and 1997 and for the three years ended November 30, 1998 incorporated by
reference herein and in the registration statement have been audited by Amper,
Politziner & Mattia P.A. independent auditor as set forth in their respective
report thereon incorporated herein by reference, and is included in reliance
upon such report given on the authority of such firm as experts in accounting
and auditing.
4
<PAGE>
INDEMNIFICATION
Pursuant to the Company's certificate of incorporation and by-laws, filed
as Exhibits hereto, the Company shall indemnify its directors, officers,
employees and agents to the full extent permissible under the General
Corporation Law of the State of Delaware, as effective from time to time, or any
other applicable law.
Under Section 145 of the Delaware General Corporation Law, the Company has
the power to indemnify directors, officers, employees and agents under certain
prescribed circumstances against expenses (including attorney's fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any action, suit or proceeding, whether civil,
criminal, administrative or investigative, to which any of them is a party by
reason of his being a director, officer, employee, or agent of the Company if it
is determined that he acted in accordance with the applicable standard of
conduct set forth in such statutory provisions.
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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by 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.
The Company's certificate of incorporation and by-laws provide that no
director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of his or her fiduciary duty as a
director, except (i) for any breach of the director's duty of loyalty to the
Company or its stockholders; (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) for
paying a dividend or approving a stock repurchase which was illegal under
section 174 of the Delaware General Corporation Law; or (iv) for any transaction
from which the director derived an improper benefit.
5
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUSES
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated in this Prospectus by reference
and made a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended November
30, 1998;
(b) The Company's 1998 Annual Report to Shareholders;
(c) The Company's Proxy Statement dated September 21, 1999 for Annual Meeting
of Stockholders held October 25, 1999;
(d) The Company's Quarterly Reports on Form 10-Q dated February 28, 1999, May
31, 1999 and July 31, 1999; and
(e) The Company's Current Reports on Form 8-K dated May 17, 1999 and August 25,
1999.
In addition, all documents filed by the Company pursuant to Sections 13 or
14 of the Securities Exchange Act of 1934, as amended, subsequent to the end of
the fiscal year covered by the 1998 Annual Report and prior the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold to deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Herbert H. Sommer, a partner of Sommer & Schneider LLP, the firm passing
upon the securities covered by this registration, is a director of the Company.
Partners of the firm, including Mr. Sommer, own an aggregate of 125,000 options
and warrants to purchase shares of the Company's common stock.
6
<PAGE>
Item 6. Indemnification of Directors and Officers.
Pursuant to the Company's certificate of incorporation and by-laws, filed
as Exhibits hereto, the Company shall indemnify its directors, officers,
employees and agents to the full extent permissible under the General
Corporation Law of the State of Delaware, as effective from time to time, or any
other applicable law.
Under Section 145 of the Delaware General Corporation Law, the Company has
the power to indemnify directors, officers, employees and agents under certain
prescribed circumstances against expenses (including attorney's fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any action, suit or proceeding, whether civil,
criminal, administrative or investigative, to which any of them is a party by
reason of his being a director, officer, employee, or agent of the Company if it
is determined that he acted in accordance with the applicable standard of
conduct set forth in such statutory provisions.
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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by 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.
The Company's certificate of incorporation and by-laws provide that no
director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of his or her fiduciary duty as a
director, except (i) for any breach of the director's duty of loyalty to the
Company or its stockholders; (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) for
paying a dividend or approving a stock repurchase which was illegal under
section 174 of the Delaware General Corporation Law; or (iv) for any transaction
from which the director derived an improper benefit.
Item 7. Exemption From Registration Claimed.
Not Applicable.
7
<PAGE>
Item 8. Exhibits.
Number Description
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4.1 Q-Med, Inc. 1997 Equity Incentive Plan
4.2 Form of Warrant Agreement
5.1 Consent and Opinion of Sommer & Schneider LLP
23.1 Consent of Amper Politziner and Mattia, P.A.
Item 9. Undertakings.
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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(b) 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 statement; and
(c) 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 (1)(a) and (1)(b) 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 this paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
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.
8
<PAGE>
(4) 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.
(5) To deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered, to each person to whom the
prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim financial
information.
(6) To deliver or cause to be delivered with the prospectus to each
employee to whom the prospectus is sent or given, a copy of the registrant's
annual report to stockholders for its last fiscal year, unless such employee
otherwise has received a copy of such report, in which case the registration
shall state in the prospectus that it will promptly furnish, without charge, a
copy of such report on written request of the employee. If the last fiscal year
of the registrant has ended within 120 days prior to the use of the prospectus,
the annual report of the registrant for the preceding fiscal year may be so
delivered, but within such 120-day period the annual report for the last fiscal
year will be furnished to each such employee.
(7) To transmit or cause to be transmitted to all employees participating
in the Plans who do not otherwise receive such material as stockholders of the
registrant, at the time and in the manner such material is sent to its
stockholders, copies of all reports, proxy statements and other communications
distributed to its stockholders generally.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Laurence Harbor, State of New Jersey, on December 21,
1999.
Q-MED, INC.
/s/ Michael W. Cox
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Michael W. Cox, President
Know all persons by these presents, that each person whose signature
appears below, constitutes and appoints Michael W. Cox and Debra Fenton jointly
and severally, his attorneys-in-fact, each with the power of substitution, for
him in any and all capacities, to sign any amendment 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 each of said attorneys-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 below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
Signatures Date
- ---------- ----
/s/ Michael W. Cox December 21, 1999
- ------------------------------
Michael W. Cox
President and Director
/s/ Richard I. Levin December 21, 1999
- ------------------------------
Richard I. Levin
Director
/s/ David Feldman December 21, 1999
- ------------------------------
David Feldman
Director
/s/ Robert A. Burns December 21, 1999
- ------------------------------
Robert A. Burns
Director
10
<PAGE>
/s/ A. Bruce Campbell December 21, 1999
- ------------------------------
A. Bruce Campbell
Director
/s/ Herbert H. Sommer December 21, 1999
- ------------------------------
Herbert H. Sommer
Director
/s/ Debra Fenton December 21, 1999
- ------------------------------
Debra Fenton
Controller
11
Q-MED, INC.
1997 EQUITY INCENTIVE PLAN
1. NAME AND PURPOSE.
The name of this plan is the Q-MED, INC. 1997 Equity Incentive Plan (the
"Plan"). The purpose of this Plan is to enable Q-MED, INC. (the "Company") and
its Subsidiaries and Affiliates to attract and retain employees, consultants and
directors who contribute to the Company's success by their ability, ingenuity
and industry, and to enable such employees and directors to participate in the
long-term success and growth of the Company through an equity interest in the
Company.
2. DEFINITIONS.
For purposes of this Plan, the following terms shall be defined as set
forth below:
"Affiliate" means any corporation (other than a subsidiary), partnership,
joint venture or any other entity in which the Company owns, directly or
indirectly, at least a ten percent (10%) beneficial ownership interest.
"Board" means the Board of Directors of the Company.
"Cause" means a felony conviction of a participant or the failure of a
participant to contest prosecution for a felony, or a participant's willful or
grossly negligent action which is demonstrably inimical to the interests,
business or reputation of the Company or any Subsidiary or Affiliate.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
"Committee" means the Stock Option Committee of the Board, whose members
shall be appointed from time to time by the Board. If at any time no Committee
shall be in existence, the functions of the Committee specified in this Plan
shall be exercised by the Board.
"Commission" means the Securities and Exchange Commission.
"Company" means Q-MED, INC., a corporation organized under the laws of the
State of Delaware (or any successor corporation).
"Deferred Stock" means an award made pursuant to Section 10 of the right to
receive Stock at the end of a specified deferral period.
"Director Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 7.
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"Disability" means total and permanent disability as determined under the
Company's long term disability program.
"Disinterested Person" shall have the meaning set forth in Rule 16b-3(d)(3)
as promulgated by the Commission under the Exchange Act, or any successor
definition adopted by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor thereto.
"Fair Market Value" means, as of any given date, the closing price of the
Stock on such date on the National Association of Securities Dealers Automated
Quotation System (NASDAQ) National Market System, or if not then traded or
listed on that system, on the securities trading system or stock exchange on
which the Stock is then primarily traded or listed; or if the stock is not
traded or listed on an exchange the average of the reported bid and ask price on
such date.
"Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Code Section
422.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Normal Retirement," solely for the purpose of this Plan means retirement
from active employment with the Company, any Subsidiary, and any Affiliate on or
after age 65.
"Plan" means this 1997 Employee Stock Incentive Plan.
"Restricted Stock" means an award of shares of Stock that are subject to
restrictions under Section 9.
"Retirement" means Normal Retirement.
"Stock" means the common stock of the Company.
"Stock Appreciation Right" means a right granted under Section 8 to
surrender to the Company all or a portion of a Stock Option in exchange for an
amount equal to the difference between (i) the Fair Market Value, as of the date
such Stock Option or such portion thereof is surrendered, of the shares of Stock
covered by such Stock Option or such portion thereof, and (ii) the aggregate
exercise price of such Stock Option or such portion thereof.
"Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 6.
2
<PAGE>
"Subsidiary" means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
(other than the last corporation in the unbroken chain) owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in the chain.
3. ADMINISTRATION.
This Plan shall be administered by the Committee which shall at all times
consist of not less than three Disinterested Persons, each of whom shall be
members of the Board of the Directors. The Committee shall have the power and
authority to grant to eligible employees, pursuant to the terms of this Plan:
(i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, or
(iv) Deferred Stock. In particular, the Committee shall have the authority to:
3.1 Select the officers, other employees and consultants of the Company,
its Subsidiaries, and its Affiliates to whom Stock Options, Stock Appreciation
Rights, Restricted Stock or Deferred Stock awards, or a combination of the
foregoing from time to time will be granted hereunder;
3.2 Determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock or
Deferred Stock, or a combination of the foregoing are to be granted hereunder;
3.3 Determine the number of shares of Stock to be covered by each such
award granted hereunder;
3.4 Determine the terms and conditions, not inconsistent with the terms of
this Plan, of any award granted hereunder, including, but not limited to, any
restriction on any Stock Option or other award and/or the shares of Stock
relating thereto based on performance and/or such other factors as the Committee
may determine, in its sole discretion, and any vesting acceleration features
based on performance and/or such other factors as the Committee may determine,
in its sole discretion;
3.5 Determine whether, to what extent, and under what circumstances Stock
and other amounts payable with respect to an award under this Plan shall be
deferred either automatically or at the election of a participant, including
providing for and determining the amount (if any) of deemed earnings on any
deferred amount during any deferral period;
3.6 Adopt, alter, and repeal such administrative rules, guidelines, and
practices governing this Plan as it shall, from time to time, deem advisable;
3.7 Interpret the terms and provisions of this Plan and any award issued
under this Plan (and any agreements relating thereto); and
3.8 Otherwise supervise the administration of this Plan.
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All decisions made by the Committee pursuant to the provisions of this Plan
shall be final and binding on all persons, including the Company and
participants in this Plan.
4. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for distribution
under this Plan shall be 600,000. Such shares may consist, in whole or in part,
of authorized and unissued shares or treasury shares. If any shares of Stock
that have been optioned cease to be subject to option, or if any shares subject
to any Restricted Stock or Deferred Stock award granted hereunder are forfeited
or such award otherwise terminates, those shares shall again be available for
distribution in connection with future awards under this Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure
affecting the Stock, a substitution or adjustment shall be made in the aggregate
number of shares reserved for issuance under this Plan, in the number and option
price of shares subject to outstanding Stock Options and Director Stock Options
granted under this Plan, and in the number of shares subject to Restricted Stock
or Deferred Stock awards granted under this Plan, in such manner as may be
determined to be appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a whole number.
Such adjusted option price shall also be used to determine the amount payable by
the Company upon the exercise of any Stock Appreciation Right associated with
any Stock Option.
5. ELIGIBILITY.
5.1 Officers, other employees and consultants of the Company, its
Subsidiaries or its Affiliates (but excluding members of the Committee and any
person who serves only as a director) who are responsible for or contribute to
the management, growth, and/or profitability of the business of the Company, its
Subsidiaries, or its Affiliates are eligible to be granted Stock Options, Stock
Appreciation Rights, Restricted Stock or Deferred Stock awards.
5.2 Directors of the Company (other than directors who are also officers or
employees of the Company, its Subsidiaries or its Affiliates) are eligible to be
granted Director Stock Options pursuant to Section 7 of the Plan.
5.3 The optionees and participants under this Plan shall be selected from
time to time by the Committee, in its sole discretion, from among those
eligible, and the Committee shall determine, in its sole discretion, the number
of shares covered by each award or grant to an optionee or participant.
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6. STOCK OPTIONS FOR EMPLOYEES.
Stock Options may be granted either alone or in addition to other awards
granted under this Plan. Any Stock Option granted under this Plan shall be in
such form as the Committee from time to time approve, and the provisions of
Stock Option awards need not be the same with respect to each optionee.
The Stock Options granted under this Plan may be of two types: (i)
Incentive Stock Options, or (ii) Non-Qualified Stock Options. The Committee
shall have the authority to grant any optionee Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options (in each case with
or without Stock Appreciation Rights) except that Incentive Stock Options shall
not be granted to employees of an Affiliate. To the extent that any Stock Option
does not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option.
Anything in this Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended, or altered,
nor shall any discretion or authority granted under this Plan be so exercised,
so as to disqualify either this Plan or any Incentive Stock Option under Code
Section 422. Notwithstanding the foregoing, in the event an optionee voluntarily
disqualifies an option as an Incentive Stock Option within the meaning of Code
Section 422, the Committee may, but shall not be obligated to, make such
additional grants, awards, or bonuses as the Committee shall deem appropriate,
to reflect the tax savings to the Company which results from such
disqualification.
Stock Options granted under this Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem desirable:
6.1 Option Price. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee at the time of grant but shall
not be less than 100% of the Fair Market Value of the Stock on the date of the
grant of the Stock Option.
6.2 Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable later than 10
years after the date such Incentive Stock Option is granted and no Non-Qualified
Stock Option shall be exercisable later than 10 years and two days after the
date such Non-Qualified Stock Option is granted.
6.3 Exercisability. Subject to Section 6.10 with respect to Incentive Stock
Options, Stock Options shall be exercisable at such time or times and subject to
such terms and conditions as shall be determined by the Committee at the date of
grant; provided, however, that, except as provided in Sections 6.6, 6.7, and
6.8, unless otherwise determined by the Committee at grant, no Stock Option
shall be exercisable prior to the first anniversary date of the granting of the
option. If the Committee provides, in its discretion, that any Stock Option is
exercisable only in installments, the Committee may waive such installment
exercise provisions at any time in whole
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or in part based on performance and/or such other factors as the Committee may
determine in its sole discretion.
6.4 Method of Exercise. Stock Options may be exercised in whole or in part
at any time during the option period, by giving written notice of exercise to
the Company specifying the number of shares to be purchased, accompanied by
payment in full of the purchase price, in cash, by check or such other
instrument or mode of payment as may be acceptable to the Committee. As
determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part may also be made in the form of unrestricted Stock already
owned by the optionee or, in the case of the exercise of a Non-Qualified Stock
Option, Restricted Stock or Deferred Stock subject to an award hereunder (based,
in each case, on the Fair Market Value of the Stock on the date the option is
exercised, as determined by the Committee). If payment of the option exercise
price of a Non-Qualified Stock Option is made in whole or in part in the form of
Restricted Stock or Deferred Stock, the shares received upon the exercise of
such Stock Option shall be restricted or deferred, as the case may be, in
accordance with the original term of the Restricted Stock award or Deferred
Stock award in question, equal to the number of shares of Restricted Stock or
Deferred Stock surrendered upon the exercise of that option. No shares of
unrestricted Stock shall be issued until full payment therefor has been made. An
optionee shall have the right to dividends or other rights of a stockholder with
respect to shares subject to the option when the optionee has given written
notice of exercise and has paid in full for those shares.
6.5 Non-transferability of Options. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee.
6.6 Termination by Death. Unless otherwise determined by the Committee at
grant, if an optionee's employment with the Company, any Subsidiary, and any
Affiliate terminates by reason of his death, the Stock Option may thereafter be
exercised, to the extent then exercisable (or on such accelerated basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the optionee under the will of the optionee or by
the heir of the optionee under the laws of descent and distribution, for a
period of one year from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
6.7 Termination by Reason of Disability. Unless otherwise determined by the
Committee at grant, if an optionee's employment with the Company, any Subsidiary
and any Affiliate terminates by reason of Disability, any Stock Option held by
such optionee may thereafter be exercised to the extent it was exercisable at
the time of termination due to Disability (or on such accelerated basis as the
Committee shall determine at or after grant), but may not be exercised after one
year from the date of such termination of employment or the expiration of the
stated term or such Stock Option, whichever period is shorter; provided,
however, that, if the optionee dies within such one-year period, any unexercised
Stock Option held by such optionee shall thereafter be exercisable to the extent
to which it was exercisable at the time of death for a period of three months
from the date of such death or for the stated term of such Stock Option,
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whichever period is the shorter. In the event of termination of employment by
reason of Disability, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Code Section 422,
such Stock Option will thereafter be treated as a Non-Qualified Stock Option.
6.8 Termination by Reason of Retirement. Unless otherwise determined by the
Committee at grant, if an optionee's employment with the Company, any Subsidiary
and any Affiliate terminates by reason of Normal Retirement, any Stock Option
held by such optionee may thereafter be exercised to the extent it was
exercisable at the time of such Retirement (or on such accelerated basis as the
Committee shall determine at or after grant), but may not be exercised after one
year from the date of such termination of employment or the expiration of the
stated term of such Stock Option, whichever period is the shorter; provided,
however, that, if the optionee dies within such one-year period any unexercised
Stock Option held by such optionee shall thereafter be exercisable, to the
extent to which it was exercisable at the time of death, for a period of three
months from the date of such death or for the stated term of the Stock Option,
whichever period is the shorter. Notwithstanding the foregoing, the tax
treatment available pursuant to Section 422 of the Internal Revenue Code of 1986
upon the exercise of an Incentive Stock Option will not be available to an
optionee who exercises any Incentive Stock Options more than (i) 12 months after
the date of termination of employment due to permanent disability or (ii) three
months after the date of termination of employment due to retirement.
6.9 Other Termination. Unless otherwise determined by the Committee at
grant, if an optionee's employment with the Company, any Subsidiary and any
Affiliate terminates for any reason other than death, Disability or Normal
Retirement, any Stock Option held by such optionee shall thereupon terminate,
except that such Stock Option may be exercised for the lesser of three months
from the date of termination or the balance of such Stock Option's term if the
optionee's employment with the Company, any Subsidiary and any Affiliate is
involuntarily terminated by the optionee's employer without Cause.
6.10 Limit on Value of Incentive Stock Option First Exercisable Annually.
The aggregate Fair Market Value (determined at the time of grant) of the Stock
for which "incentive stock options" within the meaning of Code Section 422 are
exercisable for the first time by an optionee during any calendar year under
this Plan (and/or any other stock option plans of the Company, any Subsidiary
and any Affiliate) shall not exceed $100,000.
7. DIRECTOR STOCK OPTIONS.
Director Stock Options granted under this Plan shall be Non-Qualified Stock
Options which are not intended to be "incentive stock options" within the
meaning of Code Section 422. Director Stock Options granted under this Plan
shall be in such form as the Committee may
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from time to time approve, and the provisions of Director Stock Options need not
be the same with respect to each optionee. The Committee shall have the
authority to grant any eligible optionee Director Stock Options.
Director Stock Options granted under the Plan shall be evidenced by a
written agreement in such form as the Committee shall from time to time approve,
which agreements shall comply with and be subject to the following terms and
conditions:
7.1 Option Price. The option price per share of Stock purchasable under a
Director Stock Option shall be determined by the Committee at the time of grant
but shall not be less than 100% of the Fair Market Value of the Stock on the
date of the grant of the Director Stock Option.
7.2 Option Term. Each Director Stock Option shall be fixed by the
Committee, but shall in no event be exercisable later than 10 years and two days
after the date such Director Stock Option is granted (subject to prior
termination as hereinafter provided).
7.3 Exercisability. Director Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee at the date of grant. If the Committee provides, in its
discretion, that any Director Stock Option is exercisable only in installments,
the Committee may waive such installment exercise provisions at any time in
whole or in part based on performance and/or such other factors as the Committee
may determine in its sole discretion; provided, however, that in the event of a
"Change of Control" (as defined in Section 14 below), the value of all
outstanding Director Stock Options that have been outstanding for at least six
months shall be cashed out on the basis of the "Change of Control Price" (as
defined in Section 14 below) as of the date the Change of Control occurs, and
all Director Stock Options that have not been outstanding for at least six
months shall be immediately exercisable.
7.4 Method of Exercise. Director Stock Options may be exercised in whole or
in part at any time during the option period, by giving written notice of
exercise to the Company specifying the number of shares to be purchased,
accompanied by payment in full of the purchase price, in cash, by check or such
other instrument or mode of payment as may, be acceptable to the Committee.
Payment in full or in part may also be made in the form of Stock already owned
by the optionee (based on the Fair Market value of the Stock on the date the
option is exercised). No shares of Stock shall be issued until full payment
therefor has been made. An optionee shall have the rights to dividends or other
rights of a stockholder with respect to shares subject to the option when the
optionee has given written notice of exercise and has paid in full for such
shares.
7.5 Non-transferability of Options. No Director Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Director Stock Options shall be exercisable, during
the optionee's lifetime, only by the optionee.
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7.6 Termination by Disability or Death. Upon an optionee's termination of
service as a director by reason of disability or death, any Director Stock
Options held by such optionee may thereafter be immediately exercised by the
optionee or, in the case of death, by the legal representative or the estate or
by the legatee of the optionee under the will of the optionee, until the
expiration of the stated term of such Director Stock Options.
7.7 Other Termination. Upon an optionee's termination of service as a
director with the Company for any reason other than disability or death, any
Director Stock Options held by such optionee may thereafter be exercised, to the
extent exercisable at termination, until the expiration of the stated term of
such Director Stock Options.
8. STOCK APPRECIATION RIGHTS.
8.1 Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under this Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Non-Qualified Stock Option. In the case of
an Incentive Stock Option, such rights may be granted only at the time of the
grant of such Incentive Stock Option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that,
unless otherwise provided by the Committee at the time of grant, a Stock
Appreciation Right granted with respect to less than the full number of shares
covered by a related Stock Option shall only be reduced if and to the extent
that the number of shares covered by the exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Stock Appreciation
Right.
A Stock Appreciation Right may be exercised by an optionee, in accordance
with Section 8.2, by surrendering the applicable portion of the related Stock
Option. Upon such exercise and surrender, the optionee shall be entitled to
receive amount determined in the manner prescribed in Section 8.2. Stock Options
having been so surrendered, in whole or in part, shall no longer be exercisable
to the extent the related Stock Appreciation Rights have been exercised.
8.2 Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of this Plan, as
shall be determined from time to time by the Committee, including the following:
(a) Stock Appreciation Rights shall be exercisable only at such time or
times and to the extent that the Stock Options to which they relate
shall be exercisable in accordance with the provisions of Section 6
and this Section; provided, however, that any Stock Appreciation Right
granted subsequent to the grant of the related Stock Option shall not
be exercisable during the first six months of the term of the Stock
Appreciation Right, except that this additional limitation shall not
apply in
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the event of death or Disability of the optionee prior to the
expiration of the six-month period.
(b) Upon the exercise of a Stock Appreciation Right, an optionee shall be
entitled to receive up to, but not more than, an amount in cash or
shares of Stock equal in value to the excess of the Fair Market Value
of one share of Stock over the option price per share specified in the
related Stock Option multiplied by the number of shares with respect
to which the Stock Appreciation Right shall have been exercised, with
the Committee having the sole and exclusive right to determine the
form of payment.
(c) Stock Appreciation Rights shall be transferable only when and to the
extent that the underlying Stock Option would be transferable under
Section 6.5.
(d) Upon the exercise of a Stock Appreciation Right, the Stock Option or
part thereof to which such Stock Appreciation Right is related shall
be deemed to have been exercised for the purpose of the limitation set
forth in Section 4 on the number of shares of Stock to be issued under
this Plan.
(e) A Stock Appreciation Right granted in connection with an Incentive
Stock Option may be exercised only if and when the market price of the
Stock subject to the Incentive Stock Option exceeds the exercise price
of such Stock Option.
(f) In its sole discretion, the Committee may provide, at the time of
grant of a Stock Appreciation Right under this Section, that such
Stock Appreciation Right can be exercised only in the event of a
"Change of Control" and/or a "Potential Change of Control" (as defined
in Section 14).
(g) The Committee, in its sole discretion, may also provide that, in the
event of a "Change of Control" and/or a "Potential Change of Control" (as
defined in Section 14), the amount to be paid upon the exercise of a Stock
Appreciation Right shall be based on the "Change of Control Price" (as defined
in Section 14).
9. RESTRICTED STOCK.
9.1 Administration. Shares of Restricted Stock may be issued either alone
or in addition to other awards granted under this Plan. The Committee shall
determine the officers and key employees of the Company and its Subsidiaries and
Affiliates to whom, and the time or times at which, grants of Restricted Stock
will be made, the number of shares to be awarded, the price, if any, to be paid
by the recipient of Restricted Stock (subject to Section 9.2, the time or times
within which such awards may be subject to forfeiture, and all other conditions
of the awards. The Committee may also condition the grant of Restricted Stock
upon the attainment of specified performance goals, or such other criteria as
the Committee may determine, in its sole discretion. The provisions of
Restricted Stock awards need not be the same
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with respect to each recipient.
9.2 Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
(a "Restricted Stock Award Agreement") and has delivered a fully executed copy
thereof to the Company, and has otherwise complied with the then applicable
terms and conditions.
(a) Awards of Restricted Stock must be accepted within a period of 90 days
(or such shorter period as the Committee may specify) after the award
date by executing a Restricted Stock Award Agreement and paying
whatever price, if any, is required.
(b) Each participant who is awarded Restricted Stock shall be issued a
stock certificate with respect to those shares of Restricted Stock.
The certificate shall be registered in the name of the participant,
and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such award, substantially
in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Q-MED, INC. 1997 Equity Incentive Plan and a
Restricted Stock Award Agreement entered into between the registered
owner and Q-MED, INC. Copies of the Plan and the Agreement are on file
in the offices of Q-MED, INC., 100 Metro Park South, 3rd Floor,
Laurence Harbor, New Jersey 08878."
(c) The Committee shall require that the stock certificates evidencing such
shares will be held in custody by the Company until the restrictions thereon
shall have lapsed, and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power to the Company, endorsed in
blank, relating to the Stock covered by such award.
9.3 Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section shall be subject to the following restrictions and
conditions:
(a) Subject to the provisions of this Plan and the Restricted Stock Award
Agreements, during such period as may be set by the Committee
commencing on the grant date (the "Restriction Period"), the
participant shall not be permitted to sell, transfer, pledge or assign
shares of Restricted Stock awarded under this Plan. Within these
limits, the Committee may, in its sole discretion, provide for the
lapse of such restrictions in installments and may accelerate or waive
such restrictions in whole or in part based on performance and/or such
other factors as the Committee may determine, in its sole discretion.
(b) Except as provided in Section 9.3(a), the participant shall have, with
respect to
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the shares of Restricted Stock, all of the rights of a stockholder of
the Company, including the right to receive any dividends. Dividends
paid in stock of the Company or stock received in connection with a
stock split with respect to Restricted Stock shall be subject to the
same restrictions as on such Restricted Stock. Certificates for shares
of unrestricted Stock shall be delivered to the participant promptly
after, and only after, the period of forfeiture shall expire without
forfeiture in respect of such shares of Restricted Stock.
(c) Subject to the provisions of the Restricted Stock Award Agreement and
this Section, upon the participant's termination of employment for any
reason during the Restriction Period, all shares still subject to
restriction shall be forfeited by the participant, and the participant
shall only receive the amount, if any, paid by the participant for
such forfeited Restricted Stock.
(d) In the event of special hardship circumstances of a participant whose
employment is involuntarily terminated (other than for Cause), the
Committee may, in its sole discretion, waive in whole or in part any
or all remaining restrictions with respect to such participant's
shares of Restricted Stock.
10. DEFERRED STOCK AWARDS.
10.1 Administration. Deferred Stock may be awarded either alone or in
addition to other awards granted under this Plan. The Committee shall determine
the officers and key employees of the Company, its Subsidiaries and Affiliates
to whom, and the time or times at which, Deferred Stock shall be awarded, the
number of shares of Deferred Stock to be awarded to any participant, the
duration of the period (the "Deferral Period") during which, and the conditions
under which, receipt of the Stock will be deferred and the terms and conditions
of the award in addition to those set forth in Section 10.2. The Committee may
also condition the grant of Deferred Stock upon the attainment of specified
performance goals, or such other criteria as the Committee shall determine, in
its sole discretion. The provisions of Deferred Stock awards need not be the
same with respect to each recipient.
10.2 Terms and Conditions. The shares of Deferred Stock awarded pursuant to
this Section shall be subject to the following terms and conditions:
(a) Subject to the provisions of this Plan and the award agreement,
Deferred Stock awards may not be sold, assigned, transferred, pledged,
or otherwise encumbered during the Deferral Period. At the expiration
of the Deferral Period (or Elective Deferral Period, where
applicable), share certificates shall be delivered to the participant,
or his legal representative, in a number equal to the shares covered
by the Deferred Stock award.
(b) At the time of the award, the Committee may, in its sole discretion,
determine that
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amounts equal to any dividends declared during the Deferral Period
with respect to the number of shares covered by a Deferred Stock award
will be: (a) paid to the participant currently, (b) deferred and
deemed to be reinvested, or (c) forfeited because the participant has
no rights with respect thereto.
(c) Subject to the provisions of the award agreement and this Section,
upon termination of employment for any reason during the Deferral
Period for a given award, the Deferred Stock in question including any
deferred and reinvested dividends thereon shall be forfeited by the
participant.
(d) Based on performance and/or such other criteria as the Committee may
determine, the Committee may, at or after the grant, accelerate the
vesting of all or any part of any Deferred Stock award and/or waive
the deferral limitations for all or any part of such award.
(e) In the event of special hardship circumstances of a participant whose
employment is involuntarily terminated (other than for Cause), the
Committee may, in its sole discretion, waive in whole or in part any
or all of the remaining deferral limitations imposed hereunder with
respect to any or all of the participant's Deferred Stock.
(f) A participant may elect to defer further receipt of the award for a
specified period or until a specified event (the "Elective Deferral
Period"), subject in each case to the Committee's approval and to such
terms as are determined by the Committee, all in its sole discretion.
Subject to any exceptions adopted by the Committee, such election must
be made at least six months prior to the completion of the Deferral
Period for a Deferred Stock award (or for an installment of such an
award).
(g) Each award shall be confirmed by, and subject to the terms of, a
Deferred Stock award agreement executed by the Company and the
participant.
11. LOAN PROVISIONS.
With the consent of the Committee, the Company may make, guarantee, or
arrange for, a loan or loans to an employee with respect to the exercise of any
Stock Option granted under this Plan and/or with respect to the payment of the
purchase price, if any, of any Restricted Stock awarded hereunder and/or with
respect to the payment by optionee of any or all federal and/or state income
taxes due on account of the granting or exercise of any stock option or other
awards hereunder. The Committee shall have full authority to decide whether to
make a loan or loans hereunder and to determine the amount, terms and provisions
of any such loan or loans, including the interest rate to be charged in respect
of any such loan or loans, whether the loan or loans are to be with or without
recourse against the borrower, the terms on which the loan is to be repaid and
the conditions, if any, under which the loan or loans may be forgiven.
12. AMENDMENTS AND TERMINATION.
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The Board may amend, alter, or discontinue this Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the right of an
optionee or participant under a Stock Option, Director Stock Option, Stock
Appreciation Right, Restricted Stock or Deferred Stock award theretofore
granted, without the optionee's or participant's consent, or which without the
approval of the stockholders would:
12.1 Except as expressly provided in this Plan, increase the total number
of shares reserved for the purpose of this Plan;
12.2 Extend the maximum option period under Section 6.2 or 7.2 of the Plan.
The Committee may amend the terms of any award or option (other than
Director Stock Options) theretofore granted, prospectively or retroactively, but
no such amendment shall impair the rights of any holder without his consent. The
Committee may also substitute new Stock Options for previously granted Stock
Options having higher option prices.
13. UNFUNDED STATUS OF PLAN.
This Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant or optionee by the Company, nothing set forth herein shall give any
such participant or optionee any rights that are greater than those of an
unsecured, general creditor of the Company. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet the
obligations created under this Plan to deliver Stock or payments in lieu of or
with respect to awards hereunder; provided, however, that the existence of such
trusts or other arrangements is consistent with the unfunded status of this
Plan.
14. CHANGE OF CONTROL.
The following acceleration and valuation provisions shall apply in the
event of a "Change of Control" or "Potential Change of Control," as defined in
this Section:
14.1 In the event of a "Change of Control," as defined in Section 14.2,
unless otherwise determined by the Committee or the Board in writing at or after
grant, but prior to the occurrence of the Change of Control, or, if and to the
extent so determined by the Committee or the Board in writing at or after grant
(subject to any right of approval expressly reserved by the Committee or the
Board at the time of such determination) in the event of a "Potential Change of
Control," as defined in Section 14(c):
(a) Any Stock Appreciation Rights outstanding for at least six (6) months
and any Stock Options awarded under this Plan not previously
exercisable and vested shall become fully exercisable and vested;
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(b) The restrictions and deferral limitations applicable to any Restricted
Stock and preferred Stock awards under this Plan shall lapse and such
shares and awards shall be deemed fully vested; and
(c) All outstanding Stock Options, Stock Appreciation Rights, Restricted
Stock and Deferred Stock awards, shall, to the extent determined by
the Committee at or after grant, be canceled and the holder thereof
shall be paid in cash therefor on the basis of the "Change of Control
Price" (as defined in Section 14.4) as of the date that the Change of
Control occurs or Potential Change of Control is determined to have
occurred, or such other date as the Committee may determine prior to
the Change of Control or Potential Change of Control.
14.2 For Purposes of Section 14.2, a "Change of Control" means the
happening of any of the following:
(a) When any "person" as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company, or any Company employee
benefit plan, including its trustee) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly of securities of the Company representing 25 percent or
more of the combined voting power of the Company's then outstanding
securities;
(b) The occurrence of any transaction or event relating to the Company
required to be described pursuant to the requirements of Item 6(e) of
Schedule 14A of Regulation 14A of the Commission under the Exchange
Act;
(c) The occurrence of a transaction requiring stockholder approval for the
acquisition of the company by an entity other than the Company or a
Subsidiary, through purchase of assets, or by merger, or otherwise;
(d) The dissolution of the Company; or
(e) The sale by the Company of substantially all of its assets.
14.3 For purposes of Section 14.1, a "Potential Change of Control" means
the happening of any of the following:
(a) The entering into an agreement by the Company, the consummation of
which would result in a Change of Control of the Company as defined in
Section 14.2;
(b) The public announcement by any person (including the Company) of an
intention to take or consider taking actions which, if consummated,
would constitute a Change in Control; or
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(c) The adoption by the Board of Directors of a resolution to the effect
that a Potential Change of Control of the Company has occurred for
purposes of this Plan.
14.4 For purposes of this Section, "Change of Control Price" means the
highest price based upon the Fair Market Value per share or the price paid or
offered in any transaction related to a potential or actual Change of Control of
the Company at any time during the preceding sixty day period as determined by
the Committee, except that (i) in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, such price shall be
based only on transactions reported for the date on which the Committee decides
to cash out such options, and (ii) in the case of Director Stock Options, the
sixty day period shall be the period immediately prior to the Change of Control.
15. GENERAL PROVISIONS.
15.1 All certificates for shares of Stock delivered under this Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Commission or the National Association of Securities Dealers, Inc., any stock
exchange upon which the Stock is then listed, and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such
restrictions.
15.2 Nothing set forth in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of this Plan shall
not confer upon any employee of the Company, any Subsidiary or any Affiliate,
any right to continued employment (or, in the case of a director, continued
retention as a director) with the Company, a Subsidiary or an Affiliate, as the
case may be, nor shall it interfere in any way with the right of the Company, a
Subsidiary or an Affiliate to terminate the employment of any of its employees
at any time.
15.3 Each participant shall, no later than the date as of which the value
of an award first becomes includable in the gross income of the participant for
federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state, or local
taxes of any kind required by law to be withheld with respect to the award. The
obligations of the Company under this Plan shall be conditioned on such payment
or arrangements and the Company (and, where applicable, its Subsidiaries and
Affiliates) shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the participant. If
permitted by the Committee, a participant may irrevocably elect to have the
withholding tax obligation or, in the case of all awards hereunder except Stock
Options which have related Stock Appreciation Rights, if the Committee so
determines, any additional tax obligation with respect to awards hereunder by
(a) having the Company withhold shares of Stock otherwise deliverable to the
participant with respect to the award, or (b) delivering to the Company shares
of unrestricted Stock; provided, however, that any such election shall be made
either (i) during one of the "window" periods
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described in section (e) (3) (iii) of Rule 16b-3 promulgated under the Exchange
Act, or (ii) at least six months prior to the date income is recognized with
respect to the award.
15.4 At the time of grant or purchase, the Committee may provide in
connection with any grant or purchase made under this Plan that the shares of
Stock received as a result of such grant or purchase shall be subject to a right
of first refusal, pursuant to which the participant shall be required to offer
to the Company any shares that the participant wishes to sell, with the price
being the then Fair Market Value of the Stock, subject to the provisions of
Section 14 and to such other terms and conditions as the Committee my specify at
the time of grant.
15.5 No member of the Board or the Committee, nor any officer or employee
of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith with respect to this Plan, and all members of the Board or the
Committee and each and any officer or employee of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and protected
by the Company with respect to any such action, determination or interpretation.
16. EFFECTIVE DATE OF PLAN.
This Plan shall be effective on the date it is approved by a majority of
the votes cast at a duly held shareholders' meeting at which a quorum
representing a majority of all outstanding voting stock is, either in person or
by proxy, present and voting on the Plan.
17. TERM OF PLAN.
No Stock Option, Director Stock Option, Stock Appreciation Right,
Restricted Stock or Deferred Stock award shall be granted pursuant to this Plan
on or after July 31, 2007, but awards theretofore granted may extend beyond that
date.
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CERTIFICATION OF ADOPTION
I, Herbert H. Sommer, Secretary of Q-MED, INC., hereby certify that the
foregoing is a true and correct copy of the 1997 Equity Incentive Plan of the
Company as adopted by the Board of Directors of the Company by at a special
meeting held on ______________, 199__ and by the Stockholders of the Company at
an annual meeting held on ____________________, 199__.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal
of the Company this ___________________, 1997.
----------------------------
Herbert H. Sommer, Secretary
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THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE
UPON THE EXERCISE OF THIS WARRANT ARE TRANSFERABLE
ONLY IN ACCORDANCE WITH PARAGRAPH H AND I, HEREOF.
Void after 5:00 P.M., New York Time, on__________
Warrant to Purchase
__________ Shares
of Common Stock
WARRANT TO PURCHASE COMMON STOCK
This is to Certify That, FOR VALUE RECEIVED, __________ (the "Holder") is
entitled to purchase, subject to the provisions of this Warrant, from Q-Med,
Inc., a Delaware corporation (the "Company"), an aggregate of __________ shares
(the "Warrant Shares") of the Company's Common Stock, par value $.001 per share
(Common Stock) at a price equal to the average market price for the ten days
ending November 30, 1998, as certified by the CFO of the Company (the "Initial
Exercise Price") per share (or such other price computed by applying all
adjustments made on or before __________, in accordance with Section F. hereof,
to _________ as if it had been the initial Exercise Price per share hereunder)
at any time on or after ____________ until 5:00 P.M. New York Time, on ________.
The number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid for a share of Common Stock may be adjusted
from time to time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares" and the exercise price of
a share of Common Stock in effect at any time and as adjusted from time to time
is hereinafter sometimes referred to as the "Exercise Price."
A. EXERCISE OF WARRANT. Subject to the following conditions precedent and the
provisions of Section H. hereof, this Warrant may be exercised in whole or
in part at any time or from time to time on or after ____________, and
before 5:00 P.M. New York Time on __________, or, if either such day is a
day on which banking institutions are authorized by law to close, then on
the next succeeding day which shall not be such a day, by presentation and
surrender hereof to the Company at any office maintained by it in Laurence
Harbor, New Jersey, or at the office of its Warrant Agent, if any, with the
Purchase Form annexed hereto duly executed and accompanied by payment of
the Exercise Price for the number of shares specified in such form. If this
Warrant should be exercised in part only, the Company shall, upon surrender
of this Warrant for cancellation, execute and deliver a new Warrant
evidencing the rights of the Holder hereof to purchase the balance of the
shares purchasable hereunder. Upon receipt by the Company of this Warrant
at its office, or by the Warrant Agent of the Company at its office, in
proper form for exercise, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the
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stock transfer books of the Company shall then be closed or that
certificate representing such shares of Common Stock shall not then be
actually delivered to the Holder.
B. RESERVATION OF SHARES. The Company hereby agrees that at all times there
shall be reserved for issuance and/or delivery upon exercise of this
Warrant such number of shares of its Common Stock as shall be required for
issuance of delivery upon exercise of this Warrant.
C. FRACTIONAL SHARES. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. With respect to
any fraction of a share called for upon exercise hereof, the Company shall
issue to the Holder the next whole share.
D. EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and
surrender hereof to the company or at the office of the Warrant Agent for
other Warrants of different denominations entitling the holder thereof to
purchase in aggregate the same number of shares of Common Stock purchasable
hereunder. The term Warrant as used herein includes any Warrants into which
this Warrant may be divided or exchanged. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction, or
mutilation of this Warrant, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Warrant, if mutilated, the Company will execute and
deliver a new Warrant of like tenor and date. Any such new warrant executed
and delivered shall constitute an additional contractual obligation on the
part of the Company, whether or not this Warrant so lost stolen, destroyed,
or mutilated shall be at any time enforceable by anyone.
E. RIGHTS OF THE HOLDER. The Holder shall not, by virtue here of, be entitled
to any rights of a shareholder in the Company, either at law or equity, and
the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth
herein.
F. STOCK DIVIDENDS, RECLASSIFICATION, REORGANIZATION, ANTI-DILUTION
PROVISIONS, ETC. This Warrant is subject to the following further
provisions:
1. In case, prior to the expiration of this Warrant by exercise or by its
terms, the Company shall issue any shares of its Common Stock as a
stock dividend or subdivide the number of outstanding shares of Common
Stock into a greater number of shares, then, in either of such cases,
the Exercise Price per share of the Warrant Shares purchasable
pursuant to this Warrant in effect at the time of such action shall be
proportionately reduced and the number of Warrant Shares at that time
purchasable pursuant to this Warrant shall be proportionately
increased; and conversely, in the event the Company shall contract the
number of outstanding shares of Common Stock by combining such shares
into a smaller number of
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<PAGE>
shares, then, in such case, the Exercise Price per share of the
Warrant Shares purchasable pursuant to this Warrant in effect at the
time of such action shall be proportionately increased and the number
of Warrant Shares at that time purchasable pursuant to this Warrant
shall be proportionately decreased. Any dividend paid or distributed
upon the Common Stock in stock of any other class of securities
convertible into shares of Common Stock shall be treated as a dividend
paid in Common Stock to the extent that shares of Common Stock are
issuable upon the conversion thereof.
2. In case, prior to the expiration of this Warrant by exercise or by its
terms, the Company shall be recapitalized by reclassifying its
outstanding Common Stock, par value $.001 per share, into stock with a
different par value or by changing its outstanding Common Stock with
par value to stock without par, the Company or a successor corporation
shall be consolidated or merge with or convey all or substantially all
of its or of any successor corporation's property and assets to any
other corporation or corporations (any such corporation being included
within the meaning of the term successor corporation in the event of
any consolidation or merger of any such corporation with, or the sale
of all or substantially all of the property of any such corporation
to, another corporation or corporations), in exchange for stock or
securities of a successor corporation, the holder of this Warrant
shall thereafter have the right to purchase upon the terms and
conditions and during the time specified in this Warrant, in lieu of
the Warrant Shares theretofore purchasable upon the exercise of this
Warrant, the kind and amount of shares of stock and other securities
receivable upon such recapitalization or consolidation, merger or
conveyance by a holder of the number of shares of Common Stock which
the holder of this Warrant might have purchased immediately prior to
such recapitalization or consolidation, merger or conveyance.
3. Upon the occurrence of each event requiring an adjustment of the
Exercise Price and of the number of Warrant Shares purchasable at such
adjusted Exercise Price by reason of such event in accordance with the
provisions of this Section F., the Company shall compute the adjusted
Exercise Price and the adjusted number of Warrant Shares purchasable
at such adjusted Exercise Price by reason of such event in accordance
with the provisions of this Section F. and shall prepare a certificate
setting forth such adjusted Exercise Price and the adjusted number of
Warrant Shares and showing in detail the facts upon which such
conclusions are based. The Company shall mail forthwith to each holder
of this Warrant a copy of such certificate, and thereafter said
certificate shall be conclusive and shall be binding upon such holder
unless contested by such holder by written notice to the Company
within thirty (30) days after receipt of the certificate by such
holder.
4. In case:
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(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or
any other distribution in respect of the Common Stock (including
cash), pursuant to without limitation, any spin-off, split-off or
distribution of the Company's assets; or
(b) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to subscribe for or
purchase any shares of stock of any class or to receive any other
rights; or
(c) of any classification, reclassification or other reorganization
of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, or conveyance of
all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then, and in any such case, the Company shall mail to the Holder, at
least twenty (20) days prior thereto, a notice stating the date or
expected date on which a record is to be taken for the purpose of such
dividend or distribution of rights, or the date on which such
classification, reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation, or winding up is to take
place, as the case may be. Such notice shall also specify the date or
expected date, if any is to be fixed, as of which holders of Common
Stock of record shall be entitled to participate in said dividend on
distribution of rights, or shall be entitled to exchange their shares
of Common stock for securities or other property deliverable upon such
classification, reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation, or winding up, as the
case may be. The failure to give such notice shall not affect the
validity of any such proceeding or transaction and shall not affect
the right of the holder of this Warrant to participate in said
dividend, distribution of rights, or any such exchange and acquire the
kind and amount of cash, securities or other property as the Holder
would have been entitled to acquire if it was the record holder of the
Warrant Shares which could be obtained upon the exercise of the
Warrants immediately before such proceeding or transaction; provided
that, the Holder exercises the Warrants within 30 days after discovery
that such action or proceeding has taken place.
5. In case the Company at any time while this Warrant shall remain
unexpired and unexercised, shall dissolve, liquidate, or wind up its
affairs, the holder of this Warrant may thereafter receive upon
exercise hereof in lieu of each share of Common Stock of the Company
which it would have been entitled to receive, the same kind and amount
of any securities or assets as may be issuable, distributable
4
<PAGE>
or payable upon any such dissolution, liquidation or winding up with
respect to each share of Common Stock of the Company.
G. OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be adjusted as
required by the provisions of the foregoing Section, the Company shall
forthwith file in the custody of its Secretary at its principal office and
with the Warrant agent, an officer's certificate showing the adjusted
Exercise Price determined as therein provided, setting forth in reasonable
detail the facts requiring such adjustment, including a statement of the
number of additional shares of Common Stock, if any, the consideration for
such shares, determined as such Section F. provided, and such other facts
as shall be necessary to show the reason for and the manner of computing
such adjustment. Each such officer's certificate shall be made available at
all reasonable times for inspection by the holder and the Company shall,
forthwith after each such adjustment, mail a copy of such certificate to
the holder.
H. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. Neither this Warrant,
the Warrant Shares, nor any other security issued or issuable upon exercise
of this Warrant may be sold or otherwise disposed or except as follows:
1. to a person who, in the opinion of counsel reasonably satisfactory to
the Company, is a person to whom the Warrant or Warrant Shares may
legally be transferred without registration and without the delivery
of a current prospectus under the Securities Act of 1933, as amended
(the "Act") with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this Section
H. with respect to any resale or other disposition of such securities;
or
2. to any person upon delivery of a prospectus then meeting the
requirements of the Act relating to such securities and the offering
thereof for such sale or disposition.
I. REGISTRATION RIGHTS.
1. The Warrant Shares have not been registered under the Act. Upon
exercise, in part or in whole, certificate representing the Warrant
Shares shall bear the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act")
and may not be offered or sold except pursuant to (i) an effective
registration under the Act or (ii) an opinion of counsel, if such
opinion shall be reasonably satisfactory to counsel to the issuer,
that an exemption from registration under the Act is available."
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<PAGE>
2. The Company agrees to register the Warrant Shares on Form S-8, or if
Form S-8 is not available, any appropriate form.
J. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the holder as follows:
1. The Company is duly organized and, as of the date of the original
issuance hereof, existing under the laws of the state of Delaware.
2. The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuing
Warrant Shares upon the exercise of this Warrant, such shares as may
be issuable upon the exercise hereof.
3. Warrant Shares, when issued and paid for in accordance with the terms
of this Warrant, will be fully paid and not assessable.
4. This Warrant has been duly authorized and approved by all required
corporate action by the Company and does not violate the certificate
of incorporation or by-laws of the Company.
[CORPORATE SEAL] -------------------------------
Michael W. Cox, President
Dated: November 13, 1998
ATTEST:
- ------------------------------
Herbert H. Sommer, Secretary
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PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF WARRANTS
TO: Q-Med, Inc.
100 Metro Park South
Laurence Harbor, NJ 08878
The undersigned hereby exercises, according to the terms and conditions
thereof, the right to purchase _____________ Shares of Common Stock, evidenced
by the within Warrant Certificate, and herewith makes payment of the purchase
price in full,
Dated: ________________________________
Name: _________________________________
Address: ______________________________
Signature: ____________________________
UPON EXERCISE OF THIS WARRANT PAYMENT SHOULD BE MADE TO THE ORDER OF Q-MED,
INC.
7
SOMMER & SCHNEIDER LLP
595 STEWART AVENUE, SUITE 710
GARDEN CITY, NEW YORK 11530
------------
Herbert H. Sommer Telephone (516) 228-8181
Joel C. Schneider Facsimile (516) 228-8211
December 21, 1999
Combined Opinion and Consent
Q-Med, Inc.
100 Metro Park South
Laurence Harbor, NJ 08878
Re: Issuance of Common Stock
1997 Equity Incentive Plan (the "Plan") and Warrants
Gentlemen:
We have acted as counsel to Q-Med, Inc., a Delaware corporation (the
"Company"), in connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933 as
amended (the "Act") of the Company's Registration Statement on Form S-8, filed
contemporaneously with the Commission relating to the registration under the Act
of 940,000 shares (the "Shares") of the Company's Common Stock, $.001 par value
(the "Common Stock"). The Shares may be issued from time to time in the manner
specified in the above referenced Plan and Warrants.
In rendering this opinion, we have reviewed the Registration Statement on
Form S-8, as well as a copy of the Certificate of Incorporation of the Company,
as amended, and the By-Laws of the Company. We have also reviewed such statutes
and judicial precedents as we have deemed relevant and necessary as a basis for
the opinion hereinafter expressed. 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 with,
the original documents of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of such copies.
Based on the foregoing and in reliance thereon, and subject to the
qualifications and limitations set forth herein, we are of the opinion that:
(1) The Company has been duly incorporated and is a validly existing
corporation under the laws of the State of Delaware;
<PAGE>
Q-Med, Inc.
December 21, 1999
Page 2
(2) The Shares, when issued in accordance with the Plan (copy as annexed as
Exhibit 4.1 to the Registration Statement), will be legally issued, fully
paid and non-assessable.
This opinion is limited to the General Corporation Law and the Constitution
of the State of Delaware are and we express no opinion with respect to the laws
of any other jurisdiction. We wish to advise you that partners of our firm hold
options and warrants to purchase an aggregate of 125,000 shares of the Company's
Common Stock and that Herbert Sommer serves as Secretary of the Company. We
consent to your filing this opinion with the Securities and Exchange Commission
as an exhibit to the Registration Statement on Form S-8. This opinion is not to
be used, circulated, quoted or otherwise referred to for any other purpose
without our prior written consent.
Very truly yours,
/s/ Herbert H. Sommer
Herbert H. Sommer
HHS/md
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this registration statement on Form S-8 of our report dated
January 29, 1999, appearing on page 29 in the Q-Med, Inc. 1998 Annual Report on
Form 10-K for the year ended November 30, 1998. We also consent to the reference
to our firm under the caption "Experts".
/s/ Amper Politziner & Mattia, P.A.
AMPER POLITZINER & MATTIA, P.A.
Edison , New Jersey
December ___, 1999
