Registration No. 333-
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Securities and Exchange Commission
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
ALARIS Medical, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
13-3492624
(I.R.S. Employer
Identification Number)
-----------------------------
10221 Wateridge Circle
San Diego, California 92121-1579
(619) 458-7000
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
ALARIS Medical, Inc. 1996 Stock Option Plan
(Full title of the plan)
John A. de Groot
ALARIS Medical, Inc.
10221 Wateridge Circle
San Diego, California 92121
(619) 458-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------------
Copy to:
Javier Hernandez
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
(212) 626-0858
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<TABLE>
Calculation of Registration Fee
<S> <C> <C> <C> <C>
Title of securities Amount to be Proposed maximum offering Proposed maximum aggregate Amount of
to be registered registered price per share (1) offering price (1) registration fee
- ------------------- ------------- ------------------------- --------------------------- -----------------
Common Stock, $.01
par value . . . . . 4,000,000(2) $3.51 $14,040,000 $4,141.80
==================== =============== ========================== =========================== =================
<FN>
<F1>
(1) Estimated solely for the purposes of calculating the registration fee and
based (a) pursuant to Rule 457(h), as to the 3,250,667 shares purchasable upon
exercise of outstanding options, upon the average price at which such options
may be exercised and (b) pursuant to Rule 457(c), as to the remaining 749,333
shares issuable upon exercise of options reserved for issuance, on the average
of the high and low prices for the Registrant's Common Stock as quoted on the
Nasdaq National Market on March 4, 1998.
<F2>
(2) Pursuant to Rule 416(c), there are also being registered additional shares
of Common Stock as may become issuable pursuant to the anti-dilution provisions
of the plan.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION
In accordance with Rule 428 under the Securities Act of 1933, as amended
(the "Act"), and the Note to Part I of Form S-8, the information required by
this item has been omitted from this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
INFORMATION
In accordance with Rule 428 under the Act and the Note to Part I of Form
S-8, the information required by this item has been omitted from this
Registration Statement.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed by the Registrant with the
Securities and Exchange Commission (the "Commission") are hereby incorporated by
reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996;
(b) The Registrant's Quarterly Report on Form 10-Q for each of the
quarters ended March 31, 1997, June 30, 1997, September 30, 1997
and December 31, 1997;
(c) The Registrant's Current Report on Form 8-K/A filed with the
Commission on February 7, 1997;
(d) The description of the Registrant's Common Stock contained in the
Registration Statement on Form S-1 of Advanced Medical,
Inc.(Registration No. 33-44064).
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which removes from
registration all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
Section 102(b) of the General Corporation Law of the State of Delaware
permits a corporation, by so providing in its certificate of incorporation, to
eliminate or limit director's liability to the corporation and its stockholders
for monetary damages arising out of certain alleged breaches of their fiduciary
duty. Section 102(b)(7) provides that no such limitation of liability may affect
a director's liability with respect to any of the following: (i) breaches of the
director's duty of loyalty to the corporation or its stockholders; (ii) acts or
omissions not made in good faith or which involve intentional misconduct of
knowing violations of law; (iii) liability for dividends paid or stock
repurchased or redeemed in violation of the Delaware General Corporation Law; or
(iv) any transaction from which the director derived an improper personal
benefit. Section 102(b)(7) does not authorize any limitation on the ability of
the corporation or its stockholders to obtain injunctive relief, specific
performance or other equitable relief against directors.
ARTICLE ELEVENTH of the Registrant's Restated Certificate of
Incorporation provides that no director of the Registrant shall be liable for
monetary damages except to the extent required by law as in effect at the time
the claim of liability is asserted.
ARTICLE FOURTH of the Registrant's By-laws provides that a director or
officer of the Registrant (a) shall be indemnified by the Registrant against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement incurred in connection with any litigation or other legal proceeding
(other than an action by or in the right of the Registrant) brought against him
by virtue of his position as a director or officer of the Registrant or by
virtue of his position as a director or officer of another company, partnership,
joint venture, trust or other enterprise at the request of the Registrant, if he
acted in good faith and in a manner he 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 conduct
was unlawful; and (b) shall be indemnified by the Registrant against expenses
(including attorneys' fees) incurred in connection with any action by or in the
right of the Registrant brought against him by virtue of his position as a
director or officer of the Registrant or by virtue of his position as a director
or officer of another company, partnership, joint venture, trust or other
enterprise at the request of the Registrant, if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Registrant, except that no indemnification shall be made with respect to any
such matter as to which such person shall have been adjudged to be liable to the
Registrant, unless a court determines that, despite such adjudication but in
view of all of the circumstances, he is entitled to indemnification of such
expenses. Notwithstanding the foregoing, to the extent that a
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<PAGE>
director or officer has been successful on the merits or otherwise, including
without limitation, the dismissal of an action without prejudice or the
settlement of an action without admission of liability, he is required to be
indemnified by the Registrant against expenses (including attorneys' fees)
incurred in connection therewith. Expenses shall be advanced to a director or
officer at his request provided that he undertakes to repay the amounts advanced
if it is ultimately determined that he is not entitled to indemnification for
such expenses. Any such indemnification may be provided although the person to
be indemnified is no longer an officer or director of the Registrant and may
inure to the benefit of the heirs, executors and administrators of such a
person.
Indemnification is required to be made unless the board of directors of
the Registrant, independent legal counsel or the stockholders of the Registrant
determine that the applicable standard of conduct required for indemnification
has not been met. The indemnification provision provided in the By-laws is not
exclusive and shall not limit the Registrant from providing any other
indemnification or advancement of expenses permitted by law.
The Registrant may purchase and maintain insurance on behalf of any
person who 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
company, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Registrant would have the
power to indemnify him against such liability.
The Registrant has entered into indemnification agreements with its
directors and officers pursuant to which the Registrant has agreed to indemnify
each of its directors and officers to the fullest extent permitted by the
General Corporation Law of the State of Delaware, as it may be amended from time
to time.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit
Number Description of Exhibit
- ------ ----------------------
4.1 ALARIS Medical, Inc. 1996 Stock Option Plan
4.2 Certificate of Incorporation of Advanced Medical, Inc. and Form of
Certificate of Incorporation of Advanced Medical, Inc., as amended
(Incorporated by reference to Exhibit 3.1(a) to the Prospectus/Joint
Proxy
II-3
<PAGE>
Statement, dated March 3, 1989, of Fidata Corporation, Advanced Medical,
Inc. and Controlled Theraputics Corporation included and forming a part of
the Registration Statement on Form S-4 of Advanced Medical, Inc. (the
"Prospectus/Joint Proxy Statement"))
4.3 By-Laws of Advanced Medical, Inc., as amended
(Incorporated by reference to Exhibit 3.1(b) to the
Prospectus/Joint Proxy Statement)
4.4 Amendments to Articles First and Fourth of the
Restated Certificate of Incorporation of Advanced
Medical, Inc. (Incorporated by reference to Exhibits
A and B to Advanced Medical Inc.'s Proxy Statement,
dated August 15, 1990, for its Special Meeting of
Stockholders held on September 7, 1990)
4.5 Amendment to Article Fourth of the Restated
Certificate of Incorporation of Advanced Medical,
inc. (Incorporated by reference to Annex III to
Advanced Medical Inc.'s Proxy Statement, dated July
25, 1994, for its Special Meeting of Stockholders
held on August 11, 1994)
5 Opinion of Gordon Altman Butowsky Weitzen Shalov & Wein
23.1 Consent of Gordon Altman Butowsky Weitzen Shalov & Wein (Included in
opinion filed as Exhibit 5)
23.2 Consent of Price Waterhouse LLP
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 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;
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<PAGE>
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission 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 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 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.
(c) Insofar as indemnification for liabilities arising under the 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 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 is
against public policy against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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<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 San Diego, State of California, on this 27th day of
February, 1998.
ALARIS MEDICAL, INC.
By:/s/ William J. Mercer
------------------------
William J. Mercer
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
/s/ Jeffrey M. Picower
- ---------------------- February 27, 1998
Jeffry M. Picower Director and
Chairman
/s/ William J. Mercer
- ----------------------
William J. Mercer Director, February 27, 1998
President, Chief
Executive Officer
/s/ Norman M. Dean
- ----------------------
Norman M. Dean Director February 27, 1998
/s/ Henry Green
- ----------------------
Henry Green Director February 27, 1998
/s/ Frederic Greenberg
- ----------------------
Frederic Greenberg Director February 27, 1998
/s/ Richard B. Kelsky
- ----------------------
Richard B. Kelsky Director February 27, 1998
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------- ----------------------
4.1 ALARIS Medical, Inc. 1996 Stock Option Plan
4.2 Certificate of Incorporation of Advanced Medical,
Inc. and Form of Certificate of Incorporation of
Advanced Medical, Inc., as amended (Incorporated by
reference to Exhibit 3.1(a) to the Prospectus/Joint
Proxy Statement, dated March 3, 1989, of Fidata
Corporation, Advanced Medical, Inc. and Controlled
Theraputics Corporation included and forming a part
of the Registration Statement on Form S-4 of
Advanced Medical, Inc. (the "Prospectus/Joint Proxy
Statement"))
4.3 By-Laws of Advanced Medical, Inc., as amended
(Incorporated by reference to Exhibit 3.1(b) to the
Prospectus/Joint Proxy Statement)
4.4 Amendments to Articles First and Fourth of the
Restated Certificate of Incorporation of Advanced
Medical, Inc. (Incorporated by reference to
Exhibits A and B to Advanced Medical Inc.'s Proxy
Statement, dated August 15, 1990, for its Special
Meeting of Stockholders held on September 7, 1990)
4.5 Amendment to Article Fourth of the Restated
Certificate of Incorporation of Advanced
Medical, inc. (Incorporated by reference to
Annex III to Advanced Medical Inc.'s Proxy
Statement, dated July 25, 1994, for its
Special Meeting of Stockholders held on August 11
, 1994)
5 Opinion of Gordon Altman Butowsky Weitzen Shalov &
Wein
23.1 Consent of Gordon Altman Butowsky Weitzen Shalov &
Wein (Included in opinion filed as Exhibit 5)
23.2 Consent of Price Waterhouse LLP
ALARIS MEDICAL, INC.
1996 STOCK OPTION PLAN
1. NAME.
The name of this plan is the Alaris Medical, Inc. 1996 Stock
Option Plan.
2. DEFINITIONS.
For the purposes of the Plan, the following terms shall be defined as
set forth below:
(a) "Affiliate" means any partnership, corporation, firm,
joint venture, association, trust, unincorporated organization or
other entity (other than a Subsidiary) that, directly or
indirectly through one or more intermediaries, is controlled by
the Company, where the term "controlled by" means the possession,
direct or indirect, of the power to cause the direction of the
management and policies of such entity, whether through the
ownership of voting interests or voting securities, as the case
may be, by contract or otherwise. For purposes of Section 11(a)
below, "Affiliate" means any partnership, corporation, firm,
joint venture, association, trust, unincorporated organization or
other entity that, directly or indirectly through one or more
intermediaries, is "controlled by" (as defined above) Jeffry M.
Picower.
(b) "Board" means the board of directors of the Company.
(c) "Cause" as applied to any Participant means: (i) the
conviction of such individual for the commission of any
felony; (ii) the commission by such individual of any crime
involving moral turpitude (e.g., larceny, embezzlement)
which results in harm to the business, reputation, prospects
or financial condition of the Company, any Subsidiary or
Affiliate; or (iii) the willful neglect, failure or refusal
of such individual to carry out his duties, which results in
harm to the business, reputation, prospects or financial
condition of the Company, any Subsidiary or Affiliate, which
neglect, failure or refusal continues for a period of ten
consecutive business days following notice thereof, or ten
cumulative business days following successive notices
thereof, to such individual from the Company; provided,
however, that such willful neglect, failure
or refusal is not due to the death or disability (i.e., as a
result of an injury - - or sickness such individual is
rendered unable to perform his duties as an Officer,
Employee, consultant or independent contractor, as the case
may be, on a full-time basis for an extended period) of such
individual or illness leading to the death or disability of
such individual.
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(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time and the Treasury regulations promulgated
thereunder.
(e) "Committee" means the committee appointed by the Board to
administer the Plan as provided in Section 4(a).
(f) "Common Stock" means the $.01 par value common stock of
the Company or any security of the Company identified by
the Committee as having been issued in substitution or
exchange therefor or in lieu thereof.
(g) "Company" means Alaris Medical, Inc., a Delaware
corporation.
(h) "Director" means an individual who: (i) is now, or
hereafter becomes, a member of the Board or of the board
of directors of any Subsidiary or Affiliate; and (ii) is
not eligible to participate in the Non-Employee Director
NQSO Plan.
(i) "Employee" means an individual employed by the Company, a
Subsidiary, or an Affiliate whose wages are subject to the
withholding of federal income tax under Section 3401 of
the Code.
(j) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor statute.
(k) "Fair Market Value" of a Share as of a specified date
means, except as otherwise reasonably determined by the
Committee based on reported prices of a Share, (i) the
average of the highest and lowest market prices of a Share
on such date as reported in the American Stock Exchange (or
the principal exchange on which the Shares are then traded)
composite transactions pub lished in the Eastern Edition of
The Wall Street Journal or, if no trading of
Common Stock is reported for that
day, the next preceding day on which trading was reported,
or (ii) if the Shares are traded in the over-the-counter
market, the average of the highest bid and lowest asked
prices per Share on the specified date (or the next
preceding date on which trading was reported) as reported
through the NASDAQ system or any successor thereto.
(l) "ISO" means any stock option granted pursuant to the Plan
that is intended to be and is specifically designated as
an "incentive stock option" within the meaning of Section
422 of the Code.
(m) "Non-Employee Director NQSO Plan" means the Company's
Third Amended and Restated 1990 Non-Qualified Stock Option
Plan for Non-Employee Directors, as may be amended from
time to time.
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(n) "NQSO" means any stock option granted pursuant to the
provisions of the Plan that is not an ISO.
(o) "Officer" means an individual elected or appointed by the
Board or by the board of directors of a Subsidiary or
Affiliate or chosen in such other manner as may be
prescribed by the by-laws of the Company, a Subsidiary or
Affiliate, as the case may be, to serve as such, or, in
the case of an Affiliate which is not a corporation, any
individual elected or appointed to fulfill a similar
function by a body or individual exercising similar
authority.
(p) "Option" means an ISO or a NQSO granted under the Plan.
(q) "Participant" means an individual who is granted an
Option under the Plan.
(r) "Plan" means this Alaris Medical, Inc. 1996 Stock Option
Plan, as may be amended from time to time.
(s) "Rule 16b-3" means Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Exchange Act,
or any successor or replacement rule adopted by the
Securities and Exchange Commission.
(t) "Share" means one share of Common Stock, adjusted in
accordance with Section 10(b), if applicable.
(u) "Stock Option Agreement" means the written agreement
between the Company and the Participant that contains the
terms and conditions pertaining to an Option.
(v) "Subsidiary" means any corporation of which the Company,
directly or indirectly, is the beneficial owner of fifty
percent (50%) or more of the total combined voting power
of all classes of its stock having voting power and which
qualifies as a subsidiary corporation pursuant to Section
424(f) of the Code.
(w) "Ten Percent Shareholder" means a Participant who prior to
the grant of an ISO owned, directly or indirectly within
the meaning of Section 424(d) of the Code, ten percent
(10%) or more of the total combined voting power of all
classes of stock of the Company, any Subsidiary or any
parent of the Company (as defined in Section 424(e) of the
Code).
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3. PURPOSE.
The purpose of the Plan is to enable the Company to provide incentives,
which are linked directly to increases in shareholder value, to certain key
personnel in order that they will be encouraged to promote the financial success
and progress of the Company.
4. ADMINISTRATION.
(a) Composition of the Committee.
The Plan shall be administered by a Committee appointed by the
Board, consisting of not less than a sufficient number of "non-employee
directors" (as such term is defined in Rule 16b-3), who are also "outside
directors" (within the meaning of Section 162(m) of the Code) so as to qualify
the Committee to administer the Plan as contemplated by Rule 16b-3 and Section
162(m), respectively. Members of the Committee shall not be entitled to
participate in the Plan. Subject to the provisions of the first sentence of this
Section 4(a), the Board may from time to time remove members from, or add
members to, the Committee. Vacancies on the Committee, however caused, shall be
filled by the Board.
(b) Actions by the Committee.
The Committee shall hold meetings at such times and places as it
may determine. Acts approved by a majority of the members of the Committee
present at a meeting at which a quorum is present, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be the
valid acts of the Committee.
(c) Powers of the Committee.
Subject to the express terms and conditions hereof, the Committee
shall have the authority to administer the Plan in its sole and absolute
discretion. To this end, the Committee is authorized to construe and interpret
the Plan and to make all other determinations necessary or advisable for the
administration of the Plan, including, but not limited to, the authority to
determine the eligible individuals who shall be granted Options, the number of
Options to be granted, the vesting period, if any, for all Options granted
hereunder, the date on which any Option becomes first exercisable, the number of
Shares subject to each Option, the exercise price for the Shares subject to each
Option, and, whether the Option to be granted is an ISO or a NQSO. The Committee
may delegate to an Officer its authority to grant Options to eligible
individuals under the Plan who are not Officers; provided, however, that Options
to purchase no more than 50,000 Shares may be granted to any individual in any
calendar year pursuant to such delegation of authority. Any determination,
decision or action of the Committee in connection with the construction,
interpretation, administration or application of the Plan shall be final,
conclusive and binding upon all Participants and any person validly claiming
under or through a Participant.
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(d) Liability of Committee Members.
No member of the Board or the Committee will be liable for any
action or determination made in good faith by the Board or the Committee with
respect to the Plan or any grant or exercise of an Option thereunder.
(e) Option Accounts.
The Committee shall maintain a journal in which a separate
account for each Participant shall be established. Whenever an Option is granted
to or exercised by a Participant, the Participant's account shall be
appropriately credited or debited. Appropriate adjustment shall also be made in
the journal with respect to each account in the event of an adjustment pursuant
to Section 10(b).
5. EFFECTIVE DATE AND TERM OF THE PLAN.
(a) Effective Date of the Plan.
The Plan was adopted by the Board on November 26, 1996, and
became effective on such date, subject to approval by the shareholders of the
Company at a meeting duly called and held within twelve months following such
date.
(b) Term of Plan.
No Option shall be granted pursuant to the Plan on or after
November 26, 2006, but Options theretofore granted may extend beyond that date.
6. TYPE OF OPTIONS AND SHARES SUBJECT TO THE PLAN.
Options granted under the Plan may be either ISOs or NQSOs. Each Stock
Option Agreement shall specify whether the Option covered thereby is an ISO or a
NQSO.
The maximum aggregate number of Shares that may be issued under the Plan
is 4,000,000 Shares; provided, however, that no more than 600,000 Shares
(subject to adjustment as described below) shall be awarded to any Participant
in any calendar year. The limitation on the number of Shares which may be
granted under the Plan shall be subject to adjustment as provided in Section
10(b).
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If any Option granted under the Plan expires or is terminated for any
reason, any Shares as to which the Option has not been exercised shall again be
available for purchase under Options subsequently granted. At all times during
the term of the Plan, the Company shall reserve and keep available for issuance
such number of Shares as the Company is obligated to issue upon the exercise of
all then outstanding Options.
7. SOURCE OF SHARES ISSUED UNDER THE PLAN.
Common Stock issued under the Plan may consist, in whole or in part, of
authorized or unissued Shares or treasury Shares, as determined in the sole and
absolute discretion of the Committee. No fractional Shares shall be issued under
the Plan.
8. ELIGIBILITY.
The individuals eligible for the grant of Options under the Plan shall
be: (i) all Directors, Officers and Employees; and (ii) such individuals
determined by the Committee to be rendering substantial services as a consultant
or independent contractor to the Company or any Subsidiary or Affiliate of the
Company, as the Committee shall determine from time to time in its sole and
absolute discretion; provided, however, that only Employees of the Company or
any Subsidiary shall be eligible to receive ISOs. Any Participant shall be
eligible to be granted more than one Option hereunder.
9. OPTIONS.
(a) Grant of Options.
Subject to any applicable requirements of the Code and any
regulations issued thereunder, the date of the grant of an Option shall be the
date on which the Committee determines to grant the Option.
(b) Exercise Price of ISOs.
The exercise price of each Share subject to an ISO shall not be
less than the Fair Market Value of a Share on the date of grant of the ISO,
except that in the case of a grant of an ISO to a Participant who at the time
such ISO was granted was a Ten Percent Shareholder, the exercise price shall not
be less than 110% of the Fair Market Value of a Share on the date of the grant
of the ISO.
(c) Exercise Price of NQSOs.
The exercise price of each Share subject to a NQSO shall be
determined by the Committee at the time of grant but will not be less than the
par value of a Share.
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(d) Exercise Period.
Each Option granted hereunder shall vest and become first
exercisable as determined by the Committee.
(e) Terms and Conditions.
All Options granted pursuant to the Plan shall be evidenced by a
Stock Option Agreement (which need not be the same for each Participant or
Option), approved by the Committee which shall be subject to the following
express terms and conditions and the other terms and conditions as are set forth
in this Section 9, and to such other terms and conditions as shall be determined
by the Committee in its sole and absolute discretion which are not inconsistent
with the terms of the Plan:
(i) the failure of an Option to vest for any reason
whatsoever shall cause the unvested Option to expire and be
of no further force or effect;
(ii) unless terminated earlier pursuant to Sections 9(i) or
11, the term of any Option granted under the Plan shall be
specified in the Stock Option Agreement but shall be no
greater than ten years from the date of grant; provided,
however, that no ISO granted to a Ten Percent Shareholder
shall have a term of more than five years from the date of
grant;
(iii) in the case of an ISO, the aggregate Fair Market Value
(determined as of the time the ISO is granted) of Shares
exercisable for the first time by a Participant during any
calendar year (under the Plan and any other incentive stock
option plans of the Company, any Subsidiary or any parent of
the Company (as defined in Section 424(e) of the Code) shall
not exceed $100,000;
(iv) no Option or interest therein may be pledged,
hypothecated, encumbered or otherwise made subject to
execution, attachment or similar process, and no Option or
interest therein shall be assignable or transferable by the
holder otherwise than by will or by the laws of descent and
distribution or to a beneficiary upon the death of a
Participant, and an Option shall be exercisable during the
lifetime of the holder only by him or by his guardian or
legal representative, except that an Option (other than an
ISO) may be transferred to one or more transferees during
the lifetime of the Participant, and may be
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exercised by such transferee in accordance with the terms of
such Option, but only if and to the extent such transfers
are permitted by the Committee pursuant to the express terms
of the Stock Option Agreement (subject to any terms and
conditions which the Committee may impose thereon). A
transferee or other person claiming any rights under the
Plan from or through any Participant shall be subject to all
terms and conditions of the Plan and any Stock Option
Agreement applicable to such Participant, except as
otherwise determined by the Committee, and to any additional
terms and conditions deemed necessary or appropriate by the
Committee; and
(v) payment for the Shares to be received upon exercise of
an Option may be made in cash or, if so provided by the
Committee in the Stock Option Agreement, in Shares
(determined with reference to their Fair Market Value on the
date of exercise), or any combination thereof.
(f) Additional Means of Payment.
Any Stock Option Agreement may, in the sole and absolute
discretion of the Committee, permit payment by any other form of legal
consideration consistent with applicable law and any rules and regulations
relating thereto, including, but not limited to, the execution and delivery of a
full recourse promissory note by the Participant to the Company.
(g) Exercise.
The holder of an Option may exercise the same by filing with
the Corporate Secretary of the Company a written election, in such form as the
Committee may determine, specifying the number of Shares with respect to which
such Option is being exercised, and accompanied by payment in full of the
exercise price for such Shares. Notwithstanding the foregoing, the Committee may
specify a reasonable minimum number of Shares that may be pur chased on any
exercise of an Option, provided that such minimum number will not prevent the
Participant from exercising the Option with respect to the full number of Shares
as to which the Option is then exercisable.
(h) Withholding Taxes.
Prior to issuance of the Shares upon exercise of an Option,
the Participant shall pay or make adequate provision for the payment of any
federal, state, local or foreign withholding obligations of the Company or any
Subsidiary or Affiliate of the Company, if applicable. In the event a
Participant shall fail to make adequate provision for the payment of such
obligations, the Company shall have the right to withhold an amount of Shares
otherwise deliverable to the
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Participant sufficient to pay such withholding obligations or, in the discretion
of the Committee, to refuse to honor the exercise.
(i) Termination of Options.
Options granted under the Plan shall be subject to the
following events of termination, unless otherwise provided in the Stock Option
Agreement:
(i) in the event a Participant who is a Director
(but not an Officer or Employee) is removed
from the Board or the board of directors of
a Subsidiary or an Affiliate, as the case
may be, for cause (as contemplated by the
charter, by-laws or other organizational or
governing documents), all unexercised
Options held by such Participant on the date
of such removal (whether or not vested)
shall expire immediately;
(ii) In the event the employment of a Participant who is
an Officer or Employee is terminated for Cause, or in
the event the services of a Participant who is a
consultant or independent contractor are terminated
for Cause, all unexercised Options held by such
Participant on the date of such termination (whether
or not vested) shall expire immediately; and
(iii) in the event a Participant is no longer a Director,
Officer, Employee, consultant or independent
contractor, other than for the reasons set forth in
Sections 9(i)(i) or 9(i)(ii), all Options which
remain unvested on the date the Participant ceases to
be a Director, Officer or Employee, as the case may
be, shall expire immediately, and all Options which
have vested prior to such date shall expire twelve
months thereafter unless by their terms they expire
sooner.
10. RECAPITALIZATION.
(a) Corporate Flexibility.
The existence of the Plan and the Options granted hereunder
shall not affect or restrict in any way the right or power of the Board or the
shareholders of the Company, in their sole and absolute discretion, to make,
authorize or consummate any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of bonds, debentures, common stock,
preferred or prior preference stock ahead of or affecting the Company's capital
stock or the rights thereof, the dissolution or liquidation of the Company or
any sale or transfer of all or any part of its assets or business, or any other
grant of rights, issuance of securities, transaction, corporate act or proceed
ing and notwithstanding the fact that any such activity, proceeding, action,
transaction or other
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<PAGE>
event may have, or be expected to have, an impact (whether positive or negative)
on the value of any Option or underlying Shares.
(b) Adjustments Upon Changes in Capitalization.
Except as otherwise provided in Section 11, in the event of
any change in capitalization affecting the Common Stock of the Company, such as
a stock dividend, stock split or recapitalization, the Committee shall make
proportionate adjustments with respect to: (i) the aggregate number of Shares
available for issuance under the Plan; (ii) the number of Shares available for
any individual award; (iii) the number and exercise price of Shares subject to
outstanding Options; provided, however, that the number of Shares subject to any
Option shall always be a whole number; and (iv) such other matters as shall be
appropriate in light of the circumstances.
11. CHANGE OF CONTROL
In the event of a Change of Control (as defined below), unless
otherwise determined by the Committee at the time of grant or by amendment (with
the holder's consent) of such grant, all Options not vested on or prior to the
effective time of any such Change of Control shall vest immediately prior to
such effective time. Unless otherwise determined by the Committee in the Stock
Option Agreement or at the time of a Change of Control, in the event of a Change
of Control, all outstanding Options shall terminate and cease to be outstanding
immediately following the Change of Control; provided, however, that no such
Option termination shall occur unless a Participant shall have been given five
business days, following prior written notice, to exercise such Participant's
outstanding vested Options at the effective time of the Change of Control, or to
receive cash in an amount per Share subject to such Options equal to the amount
by which the price paid for a Share (determined on a fully diluted basis and
taking into account the exercise price, as determined by the Committee) in the
Change of Control exceeds the per share exercise price of such Options. The
Committee in its discretion may make provisions for the assumption of
outstanding Options, or the substitution for outstanding Options of new
incentive awards covering the stock of a successor corporation or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices so as to prevent dilution or enlargement of rights.
A "Change of Control" will be deemed to occur on the date any of the
following events occur:
(a) any person or persons acting together which would
constitute a "group" for purposes of Section 13(d) of the Exchange Act (other
than the Company, any Subsidiary and Jeffry M. Picower (including, any of his
Affiliates and any lineal descendant of Mr. Picower, any widow or then current
spouse of Mr. Picower or of any such lineal descendant, a trust established
principally for the benefit of any of the foregoing, any entity which is at
least 90% beneficially owned by any of the foregoing, and the executor,
administrator or personal representative of the
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<PAGE>
estate of any of the foregoing (the "Picower Group")) beneficially own (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
securities of the Company or any Significant Subsidiary (as defined below)
representing greater than 10% of the total combined voting power of the Company
or the Significant Subsidiary entitled to vote in the election of the board of
directors of the Company or the Significant Subsidiary; provided, however, that
such event shall not constitute a Change of Control unless and until the
combined voting power of such securities owned beneficially, directly or
indirectly, by such person or persons is greater than the combined voting power
of all such securities owned beneficially, directly or indirectly, by Mr.
Picower and the Picower Group;
(b) persons other than the Current Directors (as herein
defined) constitute a majority of the members of the Board (for these purposes,
a "Current Director" means any member of the Board as of November 27, 1996, and
any successor of any such member whose election, or nomination for election by
the Company's shareholders, was approved by at least a majority of the Current
Directors then on the Board or by Mr. Picower or the Picower Group);
(c) the consummation of (i) a plan of liquidation of all or
substantially all of the assets of the Company or any Subsidiary owning directly
or indirectly all or substantially all of the consolidated assets of the Company
(a "Significant Subsidiary"), or (ii) an agreement providing for the merger or
consolidation of the Company or a Significant Subsidiary (A) in which the
Company or the Significant Subsidiary is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly-owned subsidiary
of the Company in which all Shares of the Company or common stock in the
Significant Subsidiary outstanding immediately prior to the effectiveness
thereof are changed into or exchanged for all or substantially all of the common
stock of the surviving corporation and (if the Company ceases to exist) the
surviving corporation assumes all the Options) or (B) pursuant to which, even
though the Company is the continuing or surviving corporation, the Shares of the
Company or common stock in the Significant Subsidiary are converted into cash,
securities or other property; provided, however, that no "Change of Control"
shall be deemed to occur as the result of a consolidation or merger of the
Company or a Significant Subsidiary in which the holders of the Shares of the
Company immediately prior to the consolidation or merger have, as a result
thereof, directly or indirectly, at least a majority of the combined voting
power of all classes of voting stock of the continuing or surviving corporation
or its parent immediately after such consolidation or merger or in which the
Board immediately prior to the merger or consolidation would, immediately after
the merger or consolidation, constitute a majority of the board of directors of
the continuing or surviving corporation or its parent; or
(d) the consummation of an agreement (or agreements) providing
for the sale or other disposition (in one transaction or a series of
transactions) of all or substantially all of the assets of the Company or a
Significant Subsidiary other than such a sale or disposition immediately after
which such assets will be owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of the
Shares immediately prior to such sale or disposition.
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12. SECURITIES LAW REQUIREMENTS.
No Shares shall be issued under the Plan unless and until: (i) the
Company and the Participant have taken all actions required to register the
Shares under the Securities Act of 1933, as amended, or perfect an exemption
from the registration requirements thereof; (ii) any applicable listing
requirement of any stock exchange or national market system on which the Common
Stock is listed has been satisfied; and (iii) any other applicable provision of
state or federal law has been satisfied. The Company shall be under no
obligation to register the Shares with the Securities and Exchange Commission or
to effect compliance with the registration or qualification requirements of any
state securities laws or stock exchange.
13. AMENDMENT AND TERMINATION.
(a) Modifications to the Plan.
The Board may, insofar as permitted by law, from time to time,
with respect to any Shares at the time not subject to Options, suspend or
terminate the Plan or revise or amend the Plan in any respect whatsoever.
However, unless the Board specifically otherwise provides, any revision or
amendment that would cause the Plan to fail to comply with Section 422 or 162(m)
of the Code or any other requirement of applicable law or regulation if such
amendment were not approved by the shareholders of the Company, shall not be
effective unless and until such ap proval is obtained.
(b) Rights of Participant.
No amendment, suspension or termination of the Plan or of any
Option that would adversely affect the right of any Participant with respect to
an Option previously granted under the Plan will be effective without the
written consent of the affected Participant.
14. MISCELLANEOUS.
(a) Shareholders' Rights
No Participant and no beneficiary or other person claiming
under or through such Participant shall acquire any rights as a shareholder of
the Company by virtue of such Participant having been granted an Option under
the Plan. No Participant and no beneficiary or other person claiming under or
through such Participant will have any right, title or interest in or to any
Shares allocated or reserved under the Plan or subject to any Option, except as
to Shares, if any, that have been issued or transferred to such Participant. No
adjustment shall be made for dividends or distributions or other rights for
which the record date is prior to the date of exercise of an Option, except as
may be provided in the Stock Option Agreement.
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(b) Other Compensation Arrangements.
Nothing contained in the Plan shall prevent the Board from
adopting other compensation arrangements, subject to shareholder approval if
such approval is required. Such other arrangements may be either generally
applicable or applicable only in specific cases.
(c) Treatment of Proceeds.
Proceeds realized from the exercise of Options under the Plan
shall constitute general funds of the Company.
(d) Costs of the Plan.
The costs and expenses of administering the Plan shall be
borne by the Company.
(e) No Right to Continue Employment or Services.
Nothing contained in the Plan or in any instrument executed
pursuant to the Plan will confer upon any Participant any right to continue to
render services to the Company, a Subsidiary or Affiliate; to continue as a
Director, Officer, Employee, consultant or independent contractor; or affect the
right of the Company, a Subsidiary, an Affiliate, the Board, the board of
directors of a Subsidiary or an Affiliate, the shareholders of the Company or a
Subsidiary, or the holders of interests of an Affiliate, as applicable, to
terminate the directorship, office, employment or consultant or independent
contractor relationship, as the case may be, of any Participant at any time with
or without Cause. The term "Cause" as defined herein is included solely for the
purposes of the Plan and is not, and shall not be deemed to be: (i) a
restriction on the right of the Company, a Subsidiary or Affiliate, as the case
may be, to terminate any Officer or Employee for any reason whatsoever; or (ii)
a part of the employment relationship (whether oral or written, express or
implied) of any such individual.
(f) Severability.
The provisions of the Plan shall be deemed severable and the
validity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
(g) Governing Law.
The Plan and all actions taken thereunder shall be enforced,
governed and construed by and interpreted under the laws of the State of
Delaware applicable to contracts made and to be performed wholly within such
State without giving effect to the principles of conflict of laws thereof.
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(h) Headings.
The headings contained in this Plan are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Plan.
14
GORDON ALTMAN BUTOWSKY WEITZEN SHALOV & WEIN
114 West 47th Street
New York, New York 10036
March 6, 1998
ALARIS Medical, Inc.
10221 Wateridge Circle
San Diego, CA 92121
Re: ALARIS Medical, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
This opinion is being furnished in connection with the filing
by ALARIS Medical, Inc., a Delaware corporation (the "Corporation"), of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), relating to the issuance of up to 4,000,000 shares of the
Corporation's common stock, par value $.01 per share ("Common Stock"), issuable
upon exercise of certain stock options to purchase Common Stock.
In connection with this opinion, we have examined such
documents and made such other investigations as we have deemed necessary or
advisable for purposes of this opinion. In our examination, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies.
Based upon and subject to the foregoing, it is our opinion
that (i) when the Registration Statement has become effective under the Act and
(ii) the Common Stock has been issued in accordance with the terms of the
instruments pursuant to which the stock options were issued, the Common Stock
will be validly issued, fully paid and non-assessable.
We are members of the Bar of the State of New York and are not
licensed or admitted to practice law in any other jurisdiction, and we express
no opinion with respect to the laws of any jurisdiction other than New York, the
federal law of the United States of America and the Delaware General Corporation
Law.
We are furnishing this opinion to you solely in connection
with the Registration Statement. This opinion is solely for your benefit and is
not to be used, circulated, quoted or
<PAGE>
otherwise referred to for any other purpose or relied upon by any other person
without our express written permission. This opinion is based and relies on the
current status of the law, and is subject in all respects to, and may be limited
by, further rules, regulations and legislation, as well as developing case law.
We do not undertake to notify any person of changes in facts or law occurring or
coming to our attention after the delivery of this opinion.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Gordon Altman Butowsky Weitzen Shalov & Wein
2
Consent of Independent Accountants
----------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 11, 1997, which appears on page
59 of the 1996 Annual Report to Stockholders of ALARIS Medical, Inc. (formerly
Advanced Medical, Inc.), which is incorporated by reference in ALARIS Medical,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1996.
PRICE WATERHOUSE LLP
/s/ Price Waterhouse LLP
San Diego, California
March 2, 1998
