As filed with the Securities and Exchange Commission on June 23, 1998
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------
ATS MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1595629
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3905 Annapolis Lane, Suite 105
Minneapolis, Minnesota 55447 55447
(Address of Principal Executive Offices) (Zip Code)
ATS MEDICAL, INC. 1998 EMPLOYEE STOCK PURCHASE PLAN
(full title of the plan)
Manuel A. Villafana Copy to:
Chief Executive Officer Timothy S. Hearn, Esq.
ATS Medical, Inc. Dorsey & Whitney LLP
3905 Annapolis Lane, Suite 105 220 South Sixth Street
Minneapolis, Minnesota 55447 Minneapolis, Minnesota 55402-1498
(Name and address of agent for service)
(612) 553-7736 (612) 340-7802
(Telephone number, including area code, of agent for service)
--------------------
Approximate date of commencement of proposed sale to the public: from
time to time after the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================
Proposed Proposed
Title of each class Maximum Offering Maximum
of Securities to be Amount to be Price Aggregate Offering Amount of
registered registered (1) per Share (2) Price (2) Registration Fee (2)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
($.01 par value) 200,000 $6.672 $1,334,375 $393.64
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) The number of shares being registered represents the number of
shares of Common Stock that may be issued pursuant to the ATS
Medical, Inc. 1998 Employee Stock Purchase Plan (the "Plan").
(2) Determined pursuant to Rule 457(c), based on the average of the high
and low sale prices of the Common Stock as reported on the Nasdaq
National Market System on June 17, 1998.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents of the Company filed with the Securities and
Exchange Commission are hereby incorporated by reference in this Prospectus:
(a) The Annual Report on Form 10-K for the year ended December
31, 1997;
(b) The Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998; and
(c) The description of the Common Stock contained in the
Company's Registration Statement on Form 8-A filed on May 8, 1990, and
any amendment or report updating such description filed subsequent to
the date of such Registration Statement and prior to the termination of
the offering described herein.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), subsequent to the date hereof and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
respective dates of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Minnesota Statutes Section 302A.521 provides that a corporation shall
indemnify any person made or threatened to be made a party to a proceeding by
reason of the former or present official capacity of such person against
judgments, penalties, fines (including, without limitation, excise taxes
assessed against such person with respect to any employee benefit plan),
settlements and reasonable expenses, including attorneys' fees and
disbursements, incurred by such person in connection with the proceeding, if,
with respect to the acts or omissions of such person complained of in the
proceeding, such person (1) has not been indemnified therefor by another
organization or employee benefit plan; (2) acted in good faith; (3) received no
improper personal benefit and Section 302A.255 (with respect to director
conflicts of interest), if applicable, has been satisfied; (4) in the case of a
criminal proceeding, had no reasonable cause to believe the conduct was
unlawful; and (5) reasonably believed that the conduct was in the best interests
of the corporation in the case of acts or omissions in such person's official
capacity for the corporation or reasonably believed that the conduct was not
opposed to the best interests of the corporation in the case of acts or
omissions in such person's official capacity for other affiliated organizations.
The Bylaws of the Company provide that the Company shall indemnify its officers
and directors under such circumstances and to the extent permitted by Section
302A.521 as now enacted or hereafter amended.
<PAGE>
The Company has established a Self-Insurance Trust Agreement to assist
in funding indemnification of its directors and officers to the extent
permissible under Minnesota Law. The Company has contributed $300,000 plus
interest to an irrevocable trust (the "Trust") to be invested by an independent
trustee in government issued or insured obligations. The Trust funds may be used
only for indemnification of the Company's officers or directors or, at the
direction of the Company and with the consent of the beneficiaries under the
Trust, to pay directors' and officers' liability insurance premiums. The rights
of the beneficiaries under the Trust are contract rights enforceable against the
Company and the trustee. In addition to the Trust, since November 1995 the
Company has maintained a liability insurance policy for its directors and
officers.
Item 7. Interests of Named Experts and Counsel
Not applicable.
Item 8. Exhibits
Exhibit
Number Description
- ------ -----------
4 ATS Medical, Inc. 1998 Employee Stock Purchase Plan
5 Opinion of Dorsey & Whitney LLP
23.1 Consent of Ernst & Young LLP
23.2 Consent of Dorsey & Whitney LLP (included in Exhibit 5 to this
Registration Statement)
24 Power of Attorney
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:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; and
(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 (1)(i) and (1)(ii) above will not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed
<PAGE>
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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of 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.
<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 Minneapolis, State of Minnesota, on June 23, 1998.
ATS MEDICAL, INC.
By /s/ Manuel A. Villafana
---------------------------
Manuel A. Villafana
Chief Executive Officer
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 date indicated.
Name Title Date
---- ----- ----
/s/ Manuel A. Villafana Chief Executive Officer, Chairman June 23, 1998
- ---------------------------- of the Board and Director
Manuel A. Villafana (Principal Executive Officer)
* President, Chief Operating
- ---------------------------- Officer and Director
Richard W. Kramp
* Chief Financial Officer
- ---------------------------- (Principal Financial and Accounting
John H. Jungbauer Officer)
* Director
- ----------------------------
Charles F. Cuddihy, Jr.
* Director
- ----------------------------
David Boehnen
* Director
- ----------------------------
A. Jay Graf
*By: /s/ Manuel A. Villafana June 23, 1998
- ----------------------------
Manuel A. Villafana
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
4 ATS Medical, Inc. 1998 Employee Stock Purchase Plan
5 Opinion of Dorsey & Whitney LLP
23.1 Consent of Ernst & Young LLP
23.2 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1 to
this Registration Statement)
24 Power of Attorney
EXHIBIT 4
ATS MEDICAL, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I. INTRODUCTION
Section 1.01 Purpose. The purpose of the ATS Medical, Inc. Employee
Stock Purchase Plan (the "Plan") is to provide employees of ATS Medical, Inc., a
Minnesota corporation (the "Company"), and its Affiliates with an opportunity to
share in the ownership of the Company by providing them with a convenient means
for regular and systematic purchases of the Company's Common Stock and, thus, to
develop a stronger incentive to work for the continued success of the Company.
Section 1.02 Rules of Interpretation. It is intended that the Plan
be an "employee stock purchase plan" as defined in Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations
promulgated thereunder. Accordingly, the Plan shall be interpreted and
administered in a manner consistent therewith if so approved. All Participants
in the Plan will have the same rights and privileges consistent with the
provisions of the Plan.
Section 1.03 Definitions. For purposes of the Plan, the following
terms will have the meanings set forth below:
(a) "Acceleration Date" means the earlier of the date of shareholder
approval or approval by the Company's Board of Directors of (i) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of Company
Common Stock would be converted into cash, securities or other property, other
than a merger of the Company in which shareholders of the Company immediately
prior to the merger have the same proportionate ownership of stock in the
surviving corporation immediately after the merger; (ii) any sale, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company; or (iii) any plan of
liquidation or dissolution of the Company.
(b) "Affiliate" means any subsidiary corporation of the Company, as
defined in Section 424(f) of the Code, whether now or hereafter acquired or
established.
(c) "Committee" means the committee described in Section 10.01.
(d) "Company" means ATS Medical, Inc., a Minnesota corporation, and its
successors by merger or consolidation as contemplated by Article XI herein.
(e) "Current Compensation" means all regular wage, salary and commission
payments paid by the Company to a Participant in accordance with the terms of
his or her employment, but excluding annual bonus payments and all other forms
of special compensation.
(f) "Fair Market Value" as of a given date means such value of the Common
Stock as reasonably determined by the Committee, but shall not be less than (i)
the closing price of the Common Stock as reported for composite transactions if
the Common Stock is then traded on a national securities exchange, or (ii) the
average of the closing representative bid and asked prices of the Common Stock
as reported on the Nasdaq National Market System on the date as of which the
fair market value is being determined. If on the date of grant of any option
hereunder the Common Stock is not traded on an established securities market,
the Committee shall make a good faith attempt to satisfy the requirements of
this Section 1.03 and in connection therewith shall take such action as it deems
necessary or advisable.
<PAGE>
(g) "Participant" means a Permanent Full-Time Employee who is eligible to
participate in the Plan under Section 2.01 and who has elected to participate in
the Plan.
(h) "Participating Affiliate" means an Affiliate which has been designated
by the Committee in advance of the Purchase Period in question as a corporation
whose eligible Permanent Full- Time Employees may participate in the Plan.
(i) "Permanent Full-Time Employee" means an employee of the Company or a
Participating Affiliate as of the first day of a Purchase Period, including an
officer or director who is also an employee, but excluding (i) an employee whose
customary employment is less than twenty (20) hours per week and (ii) an
employee who has been employed by the Company for less than thirty (30) days.
(j) "Plan" means the ATS Medical, Inc. 1998 Employee Stock Purchase Plan,
as amended, the provisions of which are set forth herein.
(k) "Purchase Period" means the approximate three-month periods beginning
(i) on the first business day in May and ending on the last business day in July
of each year; (ii) on the first business day in August and ending on the last
business day in October of each year; (iii) on the first business day in
November of one year and ending on the last business day in January of the
following year; and (iv) on the first business day in February and ending on the
last business day in April of each year; provided, however, that the initial
Purchase Period will commence on May 3, 1998 and will terminate on the last
business day in July 1998, and provided further that the then current Purchase
Period will end upon the occurrence of an Acceleration Date.
(l) "Common Stock" means the Company's Common Stock, $.01 par value, as
such stock may be adjusted for changes in the stock or the Company as
contemplated by Article XI herein.
(m) "Stock Purchase Account" means the account maintained on the books and
records of the Company recording the amount received from each Participant
through payroll deductions made under the Plan and from the Company through
matching contributions.
ARTICLE II. ELIGIBILITY AND PARTICIPATION
Section 2.01 Eligible Employees. All Permanent Full-Time Employees
shall be eligible to participate in the Plan beginning on the first day of the
first Purchase Period to commence after such person becomes a Permanent
Full-Time Employee. Subject to the provisions of Article VI, each such employee
will continue to be eligible to participate in the Plan so long as such employee
remains a Permanent Full-Time Employee.
Section 2.02 Election to Participate. An eligible Permanent
Full-Time Employee may elect to participate in the Plan for a given Purchase
Period by filing with the Company, in advance of that Purchase Period and in
accordance with such terms and conditions as the Committee in its sole
discretion may impose, a form provided by the Company for such purpose (which
authorizes regular payroll deductions from Current Compensation beginning with
the first payday in that Purchase Period and continuing until the employee
withdraws from the Plan or ceases to be eligible to participate in the Plan).
Section 2.03 Limits on Stock Purchase. No employee shall be granted
any right to purchase Common Stock hereunder if such employee, immediately after
such a right to purchase is granted, would own, directly or indirectly, within
the meaning of Section 423(b)(3) and Section 424(d) of the Code, Common Stock
possessing 5% or more of the total combined voting power or value of all the
classes of the capital stock of the Company or of all Affiliates.
<PAGE>
Section 2.04 Voluntary Participation. Participation in the Plan on
the part of a Participant is voluntary and such participation is not a condition
of employment nor does participation in the Plan entitle a Participant to be
retained as an employee.
ARTICLE III. PAYROLL DEDUCTIONS
AND STOCK PURCHASE ACCOUNT
Section 3.01 Deduction from Pay. The form described in Section 2.02
will permit a Participant to elect payroll deductions of any multiple of 1%, but
not less than 1% or more than 10% of such Participant's Current Compensation for
each pay period, subject to such other limitations as the Committee in its sole
discretion may impose. A Participant may cease making payroll deductions at any
time, subject to such limitations as the Committee in its sole discretion may
impose. In the event that during a Purchase Period the entire credit balance in
a Participant's Stock Purchase Account exceeds the product of (i) 85% of the
Fair Market Value of the Common Stock on the first business day of that Purchase
Period, and (ii) 10,000 then payroll deductions for such Participant shall
automatically cease, and shall resume on the first pay period of the next
Purchase Period.
Section 3.02 Credit to Account. Payroll deductions will be credited
to the Participant's Stock Purchase Account on each payday.
Section 3.03 Interest. No interest will be paid upon payroll
deductions or on any amount credited to, or on deposit in, a Participant's Stock
Purchase Account.
Section 3.04 Nature of Account. The Stock Purchase Account is
established solely for accounting purposes, and all amounts credited to the
Stock Purchase Account will remain part of the general assets of the Company or
the Participating Affiliate (as the case may be).
Section 3.05 No Additional Contributions. A Participant may not make
any payment into the Stock Purchase Account other than the payroll deductions
made pursuant to the Plan.
ARTICLE IV. RIGHT TO PURCHASE SHARES
Section 4.01 Number of Shares. Each Participant will have the right
to purchase on the last business day of the Purchase Period up to the largest
number of whole shares of Common Stock that can be purchased at the price
specified in Section 4.02 with up to the entire credit balance in the
Participant's Stock Purchase Account, subject to the limitations that (i) no
more than 10,000 shares of Common Stock may be purchased under the Plan by any
one Participant for a given Purchase Period, (ii) in accordance with Section
423(b)(8) of the Code, no more than $25,000 in Fair Market Value (determined at
the beginning of each Purchase Period) of Common Stock and other stock may be
purchased under the Plan and all other employee stock purchase plans (if any) of
the Company and the Affiliates by any one Participant for any calendar year and
(iii) the Committee may reasonably impose. If the purchases for all Participants
would otherwise cause the aggregate number of shares of Common Stock to be sold
under the Plan to exceed the number specified in Section 10.03, each Participant
shall be allocated a pro rata portion of the Common Stock to be sold.
Section 4.02 Purchase Price. Except as provided in Section 6.03, the
purchase price for any Purchase Period shall be the lesser of (i) 85% of the
Fair Market Value of the Common Stock on the first business day of that Purchase
Period or (ii) 85% of the Fair Market Value of the Common Stock on the last
business day of that Purchase Period, in each case rounded up to the next higher
full cent.
ARTICLE V. EXERCISE OF RIGHT
Section 5.01 Purchase of Stock. On the last business day of a
Purchase Period, the entire credit balance in each Participant's Stock Purchase
Account will be used to purchase the largest number
<PAGE>
of whole shares of Common Stock purchasable with such amount (subject to the
limitations of Section 4.01), unless the Participant has filed with the Company,
in advance of that date and subject to such terms and conditions as the
Committee in its sole discretion may impose, a form provided by the Company
which requests the distribution of part or all of the credit balance in cash.
Section 5.02 Cash Distributions. Any amount remaining in a
Participant's Stock Purchase Account after the last business day of a Purchase
Period will be paid to the Participant in cash within thirty (30) days after the
end of that Purchase Period.
Section 5.03 Notice of Acceleration Date. The Company shall use its
best efforts to notify each Participant in writing at least ten days prior to
any Acceleration Date that the then current Purchase Period will end on such
Acceleration Date.
ARTICLE VI. WITHDRAWAL FROM PLAN; SALE OF STOCK
Section 6.01 Voluntary Withdrawal. A Participant may, in accordance
with such terms and conditions as the Committee in its sole discretion may
impose, withdraw from the Plan and cease making payroll deductions by filing
with the Company a form provided for this purpose. In such event, the entire
credit balance in the Participant's Stock Purchase Account will be paid to the
Participant in cash within thirty (30) days. A Participant who withdraws from
the Plan will not be eligible to reenter the Plan until the beginning of the
next Purchase Period following the date of such withdrawal.
Section 6.02 Death. Subject to such terms and conditions as the
Committee in its sole discretion may impose, upon the death of a Participant, no
further amounts shall be credited to the Participant's Stock Purchase Account.
Thereafter, on the last business day of the Purchase Period during which such
Participant's death occurred and in accordance with Section 5.01, the entire
credit balance in such Participant's Stock Purchase Account will be used to
purchase Common Stock, unless such Participant's estate has filed with the
Company, in advance of that day and subject to such terms and conditions as the
Committee in its sole discretion may impose, a form provided by the Company
which elects to have the entire credit balance in such Participant's Stock
Account distributed in cash within thirty (30) days after the end of that
Purchase Period or at such earlier time as the Committee in its sole discretion
may decide. Each Participant, however, may designate one or more beneficiaries
who, upon death, are to receive the Common Stock or the amount that otherwise
would have been distributed or paid to the Participant's estate and may change
or revoke any such designation from time to time. No such designation, change or
revocation will be effective unless made by the Participant in writing and filed
with the Company during the Participant's lifetime. Unless the Participant has
otherwise specified the beneficiary designation, the beneficiary or
beneficiaries so designated will become fixed as of the date of the death of the
Participant so that, if a beneficiary survives the Participant but dies before
the receipt of the payment due such beneficiary, the payment will be made to
such beneficiary's estate.
Section 6.03 Termination of Employment. Subject to such terms and
conditions as the Committee in its sole discretion may impose, upon a
Participant's normal or early retirement with the consent of the Company under
any pension or retirement plan of the Company or Participating Affiliate, no
further amounts shall be credited to the Participant's Stock Purchase Account.
Thereafter, on the last business day of the Purchase Period during which such
Participant's approved retirement occurred and in accordance with Section 5.01,
the entire credit balance in such Participant's Stock Purchase Account will be
used to purchase Common Stock at the Fair Market Value of the Common Stock on
such date, unless such Participant has filed with the Company, in advance of
that day and subject to such terms and conditions as the Committee in its sole
discretion may impose, a form provided by the Company which elects to receive
the entire credit balance in such Participant's Stock Purchase Account in cash
within thirty (30) days after the end of that Purchase Period, provided that
such Participant shall have no right to purchase Common Stock in the event that
the last day of such a
<PAGE>
Purchase Period occurs more than three months following the termination of such
Participant's employment with the Company by reason of such an approved
retirement. In the event of any other termination of employment (other than
death) with the Company or a Participating Affiliate, participation in the Plan
will cease on the date the Participant ceases to be a Permanent Full-Time
Employee for any reason. In such event, the entire credit balance in such
Participant's Stock Purchase Account will be paid to the Participant in cash
within thirty (30) days. For purposes of this Section 6.03, a transfer of
employment to any Affiliate, or a leave of absence which has been approved by
the Committee, will not be deemed a termination of employment as a Permanent
Full-Time Employee.
ARTICLE VII. NONTRANSFERABILITY
Section 7.01 Nontransferable Right to Purchase. The right to
purchase Common Stock hereunder may not be assigned, transferred, pledged or
hypothecated (whether by operation of law or otherwise), except as provided in
Section 6.02, and will not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition or levy of attachment or similar process upon the right to purchase
will be null and void and without effect.
Section 7.02 Nontransferable Account. Except as provided in Section
6.02, the amounts credited to a Stock Purchase Account may not be assigned,
transferred, pledged or hypothecated in any way, and any attempted assignment,
transfer, pledge, hypothecation or other disposition of such amounts will be
null and void and without effect.
ARTICLE VIII. STOCK CERTIFICATES
Section 8.01 Delivery. Promptly after the last day of each Purchase
Period and subject to such terms and conditions as the Committee in its sole
discretion may impose, the Company will cause to be delivered to or for the
benefit of the Participant a certificate representing the Common Stock purchased
on the last business day of such Purchase Period.
Section 8.02 Securities Laws. The Company shall not be required to
issue or deliver any certificate representing Common Stock prior to registration
under the Securities Act of 1933, as amended, or registration or qualification
under any state law if such registration is required. The Company shall use its
best efforts to accomplish such registration (if and to the extent required) not
later than a reasonable time following the Purchase Period, and delivery of
certificates may be deferred until such registration is accomplished.
Section 8.03 Completion of Purchase. A Participant shall have no
interest in the Common Stock purchased until a certificate representing the same
is issued to or for the benefit of the Participant.
Section 8.04 Form of Ownership. The certificates representing Common
Stock issued under the Plan will be registered in the name of the Participant or
jointly in the name of the Participant and another person, as the Participant
may direct on a form provided by the Company.
ARTICLE IX. EFFECTIVE DATE, AMENDMENT
AND TERMINATION OF PLAN
Section 9.01 Effective Date. The Plan was approved by the Board of
Directors on January 28, 1998 and shall be approved by the shareholders of the
Company within twelve (12) months thereof.
<PAGE>
Section 9.02 Plan Commencement. The initial Purchase Period under
the Plan will commence on May 3, 1998. Thereafter, each succeeding Purchase
Period will commence and terminate in accordance with Section 1.03(k).
Section 9.03 Powers of Board. The Board of Directors may amend or
discontinue the Plan at any time. No amendment or discontinuation of the Plan,
however, shall without shareholder approval be made that: (i) absent such
shareholder approval, would cause Rule 16b-3 under the Securities Exchange Act
of 1934, as amended (the "Act") to become unavailable with respect to the Plan,
(ii) requires shareholder approval under any rules or regulations of the
National Association of Securities Dealers, Inc. or any securities exchange that
are applicable to the Company, (iii) permit the issuance of Common Stock before
payment therefor in full or, (iv) other than as provided in Article XI,
increases the number of shares of Common Stock available for issuance under the
Plan.
Section 9.04 Automatic Termination. The Plan shall automatically
terminate when all of the shares of Common Stock provided for in Section 10.03
have been sold.
ARTICLE X. ADMINISTRATION
Section 10.01 The Committee. The Plan shall be administered by a
committee (the "Committee") of two or more directors of the Company, each of
whom shall be a "Non-Employee Director" within the meaning of Rule 16b-3 under
the Act. The members of the Committee shall be appointed by and serve at the
pleasure of the Board of Directors.
Section 10.02 Powers of Committee. Subject to the provisions of the
Plan, the Committee shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan, to establish
deadlines by which the various administrative forms must be received in order to
be effective, and to adopt such other rules and regulations for administering
the Plan as it may deem appropriate. The Committee shall have full and complete
authority to determine whether all or any part of the Common Stock acquired
pursuant to the Plan shall be subject to restrictions on the transferability
thereof or any other restrictions affecting in any manner a Participant's rights
with respect thereto but any such restrictions shall be contained in the form by
which a Participant elects to participate in the Plan pursuant to Section 2.02.
Decisions of the Committee will be final and binding on all parties who have an
interest in the Plan.
Section 10.03 Stock to be Sold. The Common Stock to be issued and
sold under the Plan may be treasury shares or authorized but unissued shares, or
the Company may purchase Common Stock in the market for sale under the Plan.
Except as provided in Section 11.01, the aggregate number of shares of Common
Stock to be sold under the Plan will not exceed 200,000 shares.
Section 10.04 Notices. Notices to the Committee should be addressed
as follows:
ATS Medical Inc.
Attn: John H. Jungbauer
Chief Financial Officer
3905 Annapolis Lane
Minneapolis, Minnesota, 55447
ARTICLE XI. ADJUSTMENT FOR CHANGES
IN STOCK OR COMPANY
Section 11.01 Stock Dividend or Reclassification. If the outstanding
shares of Common Stock are increased, decreased, changed into or exchanged for a
different number or kind of securities of the Company, or shares of a different
par value or without par value, through reorganization, recapitalization,
reclassification, stock dividend, stock split, amendment to the Company's
Articles of
<PAGE>
Incorporation, reverse stock split or otherwise, an appropriate adjustment shall
be made in the maximum numbers and kind of securities to be purchased under the
Plan with a corresponding adjustment in the purchase price to be paid therefor.
Section 11.02 Merger or Consolidation. If the Company is merged into
or consolidated with one or more corporations during the term of the Plan,
appropriate adjustments will be made to give effect thereto on an equitable
basis in terms of issuance of shares of the corporation surviving the merger or
of the consolidated corporation, as the case may be.
ARTICLE XII. APPLICABLE LAW
Rights to purchase Common Stock granted under the Plan shall be
construed and shall take effect in accordance with the laws of the State of
Minnesota.
EXHIBIT 5
[LETTERHEAD OF DORSEY & WHITNEY LLP]
June 23, 1998
ATS Medical, Inc.
3905 Annapolis Lane, Suite 105
Minneapolis, Minnesota 55447
Ladies and Gentlemen:
We have acted as counsel to ATS Medical, Inc., a Minnesota
corporation (the "Company"), in connection with a Registration Statement on Form
S-8 (the "Registration Statement") relating to the sale by the Company from time
to time of up to 200,000 shares of Common Stock, $.01 par value per share, of
the Company (the "Shares"), issuable pursuant to the Company's 1998 Employee
Stock Purchase Plan (the "Plan").
We have examined such documents and have reviewed such questions of
law as we have considered necessary and appropriate for the purposes of the
opinions set forth below.
In rendering our opinions, we have assumed the authenticity of all
documents submitted to us as originals, the genuineness of all signatures and
the conformity to authentic originals of all documents submitted to us as
copies. We have also assumed the legal capacity for all purposes relevant hereto
of all natural persons and, with respect to all parties to agreements or
instruments relevant hereto other than the Company, that such parties had the
requisite power and authority (corporate or otherwise) to execute, deliver and
perform such agreements or instruments, that such agreements or instruments have
been duly authorized by all requisite action (corporate or otherwise), executed
and delivered by such parties and that such agreements or instruments are the
valid, binding and enforceable obligations of such parties. As to questions of
fact material to our opinions, we have relied upon certificates of officers of
the Company and of public officials.
Based on the foregoing, we are of the opinion that the Shares have
been duly authorized and, upon issuance, delivery and payment therefor in
accordance with the terms of the Plan, will be validly issued, fully paid and
nonassessable.
Our opinions expressed above are limited to the laws of the State of
Minnesota.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Dorsey & Whitney LLP
TSH
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Form S-8
pertaining to the ATS Medical, Inc. 1998 Employee Stock Purchase Plan of our
report dated February 6, 1998, with respect to the consolidated financial
statements and schedule of ATS Medical, Inc. included in its Annual Report on
Form 10-K for the year ended December 31, 1997, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
June 18, 1998
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Manuel A. Villafana and John H.
Jungbauer, and each of them, 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 (including his capacity as a director
and/or officer of ATS Medical, Inc.), to sign a registration statement, and any
or all amendments (including post-effective amendments) thereto, on Form S-8 for
the sale of shares of ATS Medical, Inc. Common Stock pursuant to the ATS
Medical, Inc. 1998 Employee Stock Purchase Plan, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in 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 any of
them, or their or his substitutes, may lawfully do or cause to be done by virtue
hereof.
Name Title Date
---- ----- ----
/s/ Manuel A. Villafana Chief Executive Officer, Chairman June 22, 1998
- --------------------------- of the Board and Director
Manuel A. Villafana
/s/ Richard W. Kramp President, Chief Operating June 11, 1998
- --------------------------- Officer and Director
Richard W. Kramp
/s/ John H. Jungbauer Chief Financial Officer June 23, 1998
- ---------------------------
John H. Jungbauer
/s/ Charles F. Cuddihy, Jr. Director June 12, 1998
- ---------------------------
Charles F. Cuddihy, Jr.
/s/ David Boehnen Director June 12, 1998
- ---------------------------
David Boehnen
/s/ A. Jay Graf Director June 15, 1998
- ---------------------------
A. Jay Graf
