<PAGE>
As filed with the Securities and Exchange Commission on August __, 1996
Registration No. 333-_____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
HEALTH IMAGES, INC.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 58-1485618
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8601 DUNWOODY PLACE, BUILDING 200, ATLANTA, GEORGIA 30350
---------------------------------------------------------
(Address of principal executive offices and zip code)
HEALTH IMAGES, INC.
1995 FORMULA STOCK OPTION PLAN
(Full Title of the Plan)
- -------------------------------------------------------------------------------
ROBIN EUBANKS MURRAY, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
HEALTH IMAGES, INC.
8601 DUNWOODY PLACE, BUILDING 200
ATLANTA, GEORGIA 30350
- -------------------------------------------------------------------------------
(Name and address of agent for service)
(404) 587-5084
- -------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copy to:
GABRIEL DUMITRESCU, ESQ.
POWELL, GOLDSTEIN, FRAZER & MURPHY
191 PEACHTREE STREET, N.E., 16TH FLOOR
ATLANTA, GEORGIA 30303
(404) 572-6600
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common
Stock, $.01 100,000 $10.00 (2) $1,000,000 (3) $345.00
par value shares(1)
- -------------------------------------------------------------------------------
</TABLE>
(1) Representing shares to be issued by the Registrant in connection with the
Registrant's 1995 Formula Stock Option Plan (the "Stock Option Plan").
This Registration Statement also covers such indeterminable number of
additional shares as may become issuable to prevent dilution in the event
of a stock split, stock dividend, reclassification or other similar
transaction, as well as certain rights which are attached to each share of
stock distributed under the Stock Option Plan.
(2) The average of the high and low prices of the Registrant's Common Stock as
reported on the New York Stock Exchange for August 5, 1996.
(3) The Proposed Maximum Aggregate Offering Price is calculated solely for the
purpose of determining the registration fee pursuant to Rule 457(h)(1)
under the Securities Act of 1933, as amended.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of the
Instructions to the Registration Statement on Form S-8 will be sent or given to
employees of the Registrant as required by Rule 428(b)(1) promulgated under the
Securities Act of 1933, as amended (the "Securities Act").
EXPERTS
The consolidated financial statements and schedules of the Company included
or incorporated by reference in the Company's Annual Report on Form 10-K for the
year ended December 31, 1995 have been audited by Joseph Decosimo and Company,
Atlanta, Georgia, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements and schedules are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(1) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (File No. 1-11654);
(2) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996 (File No. 1-11654); and
(3) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement filed on Form 8-A pursuant to Section 12 of
the Securities Exchange Act of 1934 (the "Exchange Act") on January 27, 1993
(File No. 1-11654).
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-
effective amendment that indicates that all securities offered hereby have been
sold or that deregisters all such securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware empowers
the Registrant to, and the Restated Bylaws (the "Bylaws") of the Registrant
provide that it shall, indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action, suit or proceeding by or in the right
of the Registrant) by reason of the fact that he or she is or was a director or
officer of the Registrant, or is or was serving at the request of the Registrant
as a director or officer of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the Registrant, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful; except that, in the
case of an action or a suit by or in the right of the Registrant, no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the Registrant unless and
only to the extent that the Court of Chancery of the State of Delaware or
II-1
<PAGE>
the court in which such action or suit was brought shall determine that such
person is fairly and reasonably entitled to indemnity for proper expenses.
Pursuant to Section 145 of the General Corporation Law of the State of
Delaware, the Registrant's Bylaws provide for indemnification of officers and
directors of the Registrant and persons serving at the request of the Registrant
in such capacities against certain losses, costs, liabilities and expenses
incurred by reason of their position with the Registrant or such other business
organizations.
The Registrant's Restated Certificate of Incorporation contains a provision
which eliminates, to the fullest extent permitted by law, director liability for
monetary damages for breaches of fiduciary duty of care.
The Registrant has entered into an Indemnification Agreement (the
"Indemnification Agreement") with each of its directors and officers. The
Indemnification Agreement sets forth certain procedural matters relating to
indemnification, including the manner in which an indemnified party may make a
claim and the right of an indemnified party to adjudicate his or her claim if
indemnification is denied by the Company.
The Registrant maintains an insurance policy insuring the Registrant and
directors and officers of the Registrant against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
The above discussion of the Registrant's Bylaws, Restated Certificate of
Incorporation, the Indemnification Agreement and of Section 145 of the General
Corporation Law of the State of Delaware is not intended to be exhaustive and is
qualified in its entirety by reference to such Bylaws, Restated Certificate of
Incorporation, Indemnification Agreement and statute.
II-2
<PAGE>
ITEM 8. EXHIBITS.
The following exhibits are filed with or incorporated by reference into this
Registration Statement pursuant to Item 601 of Regulation S-K:
Exhibit
No. Description
- -------- -----------
4(a) Restated Certificate of Incorporation of the Registrant, as filed
with the Secretary of State of Delaware on March 9, 1990
(Incorporated herein by reference to Exhibit 4(a) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 (File No. 0-14746)).
4(b) Restated Bylaws of the Registrant. (Incorporated herein by
reference to Exhibit 4(a) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1989 (File No. 0-
14746)).
4(c) Form of Indenture between the Registrant and The Provident Bank,
Cincinnati, Ohio, as trustee. (Incorporated herein by reference
to Exhibit 4(d) to Amendment No. 2 to the Registrant's
Registration Statement on form S-2 filed June 14, 1990 (Reg. No.
33-34161)).
4(d) Successor Rights Agreement between the Registrant and First Union
National Bank of North Carolina as Successor Rights Agent dated as
of September 1, 1992. (Incorporated herein by reference to
Exhibit 4(e) to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 (File No. 0-14746)).
5+ Opinion of counsel with respect to the securities being
registered.
23.1 Consent of counsel (included in Exhibit 5).
23.2+ Consent of independent auditors.
24 Power of Attorney (see signature pages to this Registration
Statement).
99+ Health Images, Inc. 1995 Formula Stock Option Plan.
__________________
+ Filed herewith.
II-3
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in 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.
II-4
<PAGE>
(h) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act, 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 Atlanta, State of Georgia, on this the 7th day of August 1996.
HEALTH IMAGES, INC.
By:/S/Robert D. Carl, III
----------------------
Robert D. Carl, III
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert D. Carl, III and Robin Eubanks Murray, or
either of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, or either of them, full power and authority to do and perform each and
every act and thing required or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their substitutes or substitute, could lawfully do or cause to be
done by virtue hereof.
II-6
<PAGE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/S/Robert D. Carl III Chairman of the Board Date: August 7, 1996
- --------------------- Chief Executive Officer --------------
Robert D. Carl, III (Principal Executive Officer)
/S/Anthony T. Prescott Senior Executive Vice Date: August 7, 1996
- ---------------------- President, Chief Operating -------------
Anthony T. Prescott Officer and Director
/S/Ron L. Clark, Jr. Treasurer and Controller Date: August 7, 1996
- ------------------- (Principal Financial --------------
Ron L. Clark, Jr. Accounting Officer)
/S/Marc I. Raphaelson, M.D. Director Date: August 7, 1996
- --------------------------- --------------
Marc I. Raphaelson,
M.D.
/S/William E. Whitesell, Ph.D. Director Date: August 7, 1996
- ------------------------------ --------------
William E. Whitesell,
Ph.D.
/S/Robert L. Taylor Director Date: August 7, 1996
- ------------------- --------------
Robert L. Taylor
/S/Stuart B. Strasner, Sr. Director Date: August 7, 1996
- -------------------------- --------------
Stuart B. Strasner, Sr.
/S/Jack O. Greenberg, M.D. Director Date: August 7, 1996
- -------------------------- --------------
Jack O. Greenberg, M.D.
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
No. Description Page No.
------- ----------- --------
<S> <C> <C>
4(a) Restated Certificate of Incorporation of the Registrant, as
filed with the Secretary of State of Delaware on March 9, 1990
(Incorporated herein by reference to Exhibit 4(a) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 (File No. 0-14746)).
4(b) Restated Bylaws of the Registrant. (Incorporated herein by
reference to Exhibit 4(a) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1989 (File No. 0-
14746)).
4(c) Form of Indenture between the Registrant and The Provident
Bank, Cincinnati, Ohio, as trustee. (Incorporated herein by
reference to Exhibit 4(d) to Amendment No. 2 to the Registrant's
Registration Statement on form S-2 filed June 14, 1990 (Reg. No.
33-34161)).
4(d) Successor Rights Agreement between the Registrant and First
Union National Bank of North Carolina as Successor Rights Agent
dated as of September 1, 1992. (Incorporated herein by reference
to Exhibit 4(e) to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 (File No. 0-14746)).
5+ Opinion of counsel with respect to the securities being
registered.
23.1 Consent of counsel (included in Exhibit 5).
23.2+ Consent of independent auditors.
24 Power of Attorney (see signature pages to this Registration
Statement).
99+ Health Images, Inc. 1995 Formula Stock Option Plan.
</TABLE>
_________________
+ Filed herewith.
II-8
<PAGE>
EXHIBIT 5
August 6, 1996
Health Images, Inc.
8601 Dunwoody Place
Building 200
Atlanta, Georgia 30350
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have served as counsel for Health Images, Inc., a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act of
1933, as amended, pursuant to a Registration Statement on Form S-8 (the
"Registration Statement") of an aggregate of 100,000 shares (the "Shares") of
common stock, $.01 par value, of the Company, to be offered and sold by the
Company pursuant to the 1995 Formula Stock Option Plan (the "Plan").
We have examined and are familiar with originals or copies (certified,
photostatic or otherwise identified to our satisfaction) of such documents,
corporate records and other instruments relating to the incorporation of the
Company and the adoption of the Plan as we have deemed necessary and advisable.
In all such examinations, we have assumed the genuineness of all signatures
on all originals and copies of documents we have examined, the authenticity of
all documents submitted to us as originals and the conformity to original
documents of all certified, conformed or photostatic copies. As to questions of
fact material and relevant to our opinion, we have relied upon certificates or
representations of Company officials and of appropriate state, local and federal
officials.
We express no opinion as to matters under or involving laws other than the
laws of the State of Georgia and the Delaware General Corporation Law.
<PAGE>
Based upon and subject to the foregoing and having regard for such legal
considerations as we have deemed relevant, it is our opinion that:
1. The Shares have been duly authorized; and
2. Upon the issuance and delivery of the Shares upon receipt of lawful
consideration therefor pursuant to the Plan, such Shares will be
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
POWELL, GOLDSTEIN, FRAZER & MURPHY
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) and related Prospectus of Health Images, Inc.
for the registration of 100,000 shares of its common stock, $.01 par value per
share, under its 1995 Formula Stock Option Plan, and incorporation by reference
therein of our report dated February 23, 1996, with respect to the consolidated
financial statements and schedules of Health Images, Inc. included or
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1995, filed with the Securities and Exchange Commission.
JOSEPH DECOSIMO AND COMPANY
Chattanooga, Tennessee
August 6, 1996
<PAGE>
EXHIBIT 99
HEALTH IMAGES, INC.
1995 FORMULA STOCK OPTION PLAN
THIS FORMULA STOCK OPTION PLAN is made as the 15th day of September,
1995, by Health Images, Inc., a corporation organized and doing business under
the laws of the State of Delaware (the "Company").
1. Purpose.
-------
The Company adopts the Health Images, Inc., 1995 Formula Stock
Option Plan (the "Plan") to secure and retain the services of outside directors
of the Company, the Parent and any Subsidiary by giving them an opportunity to
invest in the future success of the Company. The terms "Parent" or "Subsidiary"
shall mean any corporation which qualifies as a parent or subsidiary of the
Company pursuant to Internal Revenue Code Section 424(e) or (f), as amended.
2. Administration.
--------------
The Plan shall be administered by the Board of Directors of the
Company (the "Board of Directors") or the Compensation Committee of the Board of
Directors (the "Committee"). It is intended that the grants of options pursuant
to the Plan and the participation of directors hereunder shall constitute
"participation in a formula plan which does not disqualify a direct from being
disinterested" under Rule 16b-3 for purposes of serving as a member of a
committee that administers other Company plans.
If the Committee consists of fewer than all of the members of the
Board of Directors, each member of the Committee shall serve at the discretion
of the Board of Directors, which may fill any vacancy, however caused, in the
Committee. The Committee shall select one of its members as a chairman and shall
hold meetings at the times and in the places as it may deem advisable. All
actions the Committee takes shall be made by majority decision. Any action
evidenced by a written instrument signed by all of the members of the Committee
shall be as fully effective as if the Committee had taken the action by majority
vote at a meeting duly called and held.
The Committee shall have complete and conclusive authority to (i)
interpret this Plan, (ii) prescribe, amend and rescind rules and regulations
relating to it, (iii) determine the terms of each stock option agreement with
optionees who are granted Options pursuant to Section 5, consistent with the
terms of the Plan and the form of stock option agreement attached hereto as
Exhibit A (the "Agreement"), and (iv) make all other determinations necessary or
advisable for the administration of this Plan. The Committee's determinations on
these matters shall be conclusive.
<PAGE>
In addition to any other rights of indemnification that they may
have as directors of the Company or as members of the Committee, the directors
of the Company and members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of action taken or failure to act under or in
connection with this Plan or any Option granted thereunder, and against all
amounts paid by them in settlement thereof or paid by them in satisfaction of a
judgment in any action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in the action, suit or proceeding that the Committee
member is liable for gross negligence or misconduct in the performance of his
duties; provided that within 60 days after institution of any action, suit or
proceeding, a Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.
3. Eligibility.
-----------
Directors of the Company, the Parent or a Subsidiary who are not
employees on the date an Option is to be granted pursuant to Plan Section 5
shall be granted Options hereunder (the "Eligible Optionees").
4. Stock Subject to Plan.
---------------------
The Company has authorized and reserved for issuance upon the
exercise of options pursuant to this Plan an aggregate of one hundred thousand
(100,000) shares of $0.01 par value common stock of the Company (the "Shares").
If any option is cancelled, expires or terminates without the respective
optionee exercising it in full, the Committee may grant Options with respect to
those unpurchased Shares to that same optionee or another Eligible Optionee.
The Committee shall adjust the total number of Shares and any
Shares subject to outstanding Options, both as to the number of Shares and the
option price, for any increase or decrease in the number of outstanding Shares
resulting from a stock split or a payment of a stock dividend on the Shares, a
subdivision or combination of the Shares, a reclassification of the Shares, a
merger or consolidation of the Shares or any other like changes in the Shares or
in their value. The Committee shall not issue fractional shares as a result of
any of these changes, and shall eliminate from the outstanding Options any
fractional shares that result from a change. The Committee shall not adjust
outstanding Options for cash dividends or the issuance to optionees of rights to
subscribe for additional stock or securities of the Company.
-2-
<PAGE>
The foregoing adjustments and the manner of application for the
foregoing provisions shall be determined by the Committee in its sole
discretion.
The grant of an Option by the Committee shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure, or to merge,
consolidate dissolve, liquidate, sell or transfer all or any part of its
business or assets.
Subject to any required action by the shareholders, if the Company
is a party to any merger or consolidation or there is a change in control of the
Company, each outstanding option shall vest in full at the time of such merger
or consolidation. Each option shall then pertain to and apply to the securities
which a holder of the number of shares subject to the option would have been
entitled.
5. Formula and Terms of Option Grants.
----------------------------------
Each Eligible Optionee shall be granted a non-qualified stock
option ("Option") to purchase Two Thousand (2,000) Shares, as of the Effective
Date (defined in Section 6) and each year thereafter two (2) business days
following the filing of the second quarter 10-Q in August, until the Plan is
terminated. In the event the remaining number of Shares reserved for issuance
under the Plan is insufficient to grant options for the appropriate number of
Shares to all Eligible Optionees as of any grant date, then no options shall be
granted as of that grant date .
The exercise price of each Share granted pursuant to an Option
shall be the Fair Market Value of a Share on the business day on which the
Option is granted. "Fair Market Value" shall be determined in good faith by the
Committee provided that:
(a) if the Shares are actively traded on any national securities
exchange or the Nasdaq National Market, fair market value shall be the
closing sales price per share of the Shares on such day;
(b) if the Shares are otherwise traded over the counter, fair
market value shall be the arithmetic mean of the bid and asked prices for
the Shares, as reported by Nasdaq or any other recognized reporting
services, on such day;
(c) if the Shares are not traded, fair market value shall be
determined by the Committee which shall, in making such determination,
consider, where applicable, among other facts: the existence and extent of
a private market for the Shares and a public market for the Company's
securities of the
-3-
<PAGE>
same class, if any; the price at which the Shares were acquired, if
applicable, by the Company; the estimated period of time, if any, during
which the Shares will be freely marketable; the estimated amount of
floating supply of Shares available; changes in the financial condition and
prospects of the Company; the existence of merger proposals or tender
offers affecting the Company; and any other factors affecting fair market
value; provided, however, that fair market value shall be determined
without regard to any restriction other than a restriction which, will
never lapse.
Each Option granted pursuant to this Plan shall be authorized by
the Committee, shall be evidenced by an Agreement and shall be subject to such
additional terms as set forth in the Agreement.
6. Terms of Plan.
-------------
The Company shall submit this Plan to its shareholders for
approval within 12 months of the adoption of this Plan by the Board of
Directors. Unless shareholder approval is obtained within said twelve-month
period, both this Plan and all outstanding Options shall be rendered immediately
void and of no effect. If shareholder approval is obtained at the 1996 Annual
Meeting, the effective date of this Plan shall be September 19, 1995 (the
"Effective Date"). The Effective Date was established by the Board of Directors
to be the second business day following the announcement of the dividend
increase approved by the Board of Directors in its September 15, 1995 meeting.
This Plan shall terminate 10 years after the Effective Date.
7. Assignability.
-------------
No Option or any of the rights and privileges thereof accruing to
an optionee shall be transferred, assigned, pledged or hypothecated in any way
whether by operation of law or otherwise other than as (1) the will of the
optionee, or (2) the applicable laws of descent and distribution permit, and no
Option, right or privilege shall be subject to execution, attachment or similar
process.
8. No Right to Continued Service.
-----------------------------
No provision in this Plan or any Option shall confer upon any
right to continue performing services for or to interfere in any way with the
right of shareholders for the Company to remove such optionee as a director at
any time for any reason.
-4-
<PAGE>
9. Amendment and Termination.
-------------------------
To the extent required under Rule 16b-3, the provisions of the
Plan and the Agreement relating to eligibility and to the amount, price and
timing of an Option may not be amended by the Board of Directors more than once
every six months, other than to conform it with changes in the Internal Revenue
Code, the Employee Retirement Income Security Act of 1974, or any rules under
either of the foregoing. Except as otherwise provided in this Section, the Board
of Directors at any time may amend or terminate the Plan without shareholder
approval; provided, however, that the Board of Directors may condition any
amendment on the approval of the shareholders of the Company if such approval is
necessary or advisable with respect to tax, securities (which require such
approval for a material increase of the number of Shares subject to Options and
for material modifications to the eligibility requirements of this Plan, among
other amendments, or other applicable laws to which the Company, this Plan,
optionees or Eligible Optionees are subject. No Amendment or termination of this
Plan shall adversely affect the rights of an optionee with regard to his Options
without his consent.
10. Choice of Law.
-------------
The laws of the State of Delaware will govern this Plan.
11. General Restriction.
-------------------
Notwithstanding anything contained herein or in any of the
Agreements to the contrary, no purported exercise of any Option granted pursuant
to the Plan shall be effective without the written approval of the Company,
which may be withheld to the extent that the exercise, either individually or in
the aggregate together with the exercise of the previously exercised stock
options and/or offers and sales pursuant to any prior or contemplated offering
of securities, would, in the sole and absolute judgment of the Company, require
the filing of a registration statement with the United States Securities and
Exchange Commission or with the securities commission of any state. The Company
shall avail itself of any exemptions from registration contained in the
applicable federal and state securities laws which are reasonably available to
the Company on terms which, in its sole and absolute discretion, it deems
reasonable and not unduly burdensome or costly. Each optionee shall, prior to
the exercise of an Option, deliver to the Company such information,
representations and warranties as the Company may reasonably request in order
for the Company to be able to satisfy itself that the Shares to be acquired
pursuant to the exercise of an Option is being acquired in accordance with the
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<PAGE>
terms of an applicable exemption from the securities registration requirements
of applicable federal and state securities laws.
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed in the form and as of the date set forth above.
ATTEST: HEALTH IMAGES, INC.
/s/ Robin Evbanks Murray By: /s/ Robert D. Carl, III
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Secretary Title: Chairman, President and
[CORPORATE SEAL] Chief Executive Officer
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