SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
(Amendment No. -----)
Check the appropriate box:
/ Preliminary Information Statement
/ Confidential, for Use of the Commission Only (as permitted by Rule 14c
5(d)(2)
X/ Definitive Information Statement
ZEVEX INTERNATIONAL, INC.
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
/ Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
Page 1
<PAGE>
<PAGE>
fee is calculated and state how it was determined):
-------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction.
-------------------------------------------------------------------------
5) Total fee paid:
---------------------------------------------------------------------------
/ Fee paid previously with preliminary materials.
/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
---------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
3) Filing Party:
--------------------------------------------------------------------------
4) Date Filed:
--------------------------------------------------------------------------
Page 2
<PAGE>
<PAGE>
INFORMATION STATEMENT
October 30, 1997
To Shareholders of
ZEVEX International, Inc.
This Information Statement (the "Information Statement") is being
delivered by ZEVEX International, Inc., a Nevada corporation (the "Company")
and relates to: (i) the pending merger (the "Merger") by the Company into its
wholly owned subsidiary, ZEVEX International, Inc., a Delaware corporation
("ZEVEX Delaware"), in order to change the Company's State of incorporation
from Nevada to Delaware, and (ii) an amendment to the 1993 Stock Option Plan of
the Company (the "Stock Option Plan").
On October 23, 1997, by unanimous written consent, the Board of Directors
of the Company and the Board of Directors of ZEVEX Delaware approved the terms
of the Merger as described in an Agreement and Plan of Merger ("Plan of
Merger"). The Plan of Merger has also been approved by the shareholder of
ZEVEX Delaware and by the shareholders of the Company holding a majority of the
voting shares of stock in the Company. Shareholder approval was obtained by
written consent in lieu of a shareholders meeting, dated October 23, 1997.
The Merger should be effective on or about November 20, 1997. Upon
consummation of the Merger, the Company's shareholders will receive shares of
Common Stock in ZEVEX Delaware equivalent to their shares in the Company.
In addition, the Compensation Committee of the Board of Directors of the
Company has amended the Stock Option Plan to increase from 240,000 to 600,000
the number of shares of Common Stock reserved for issuance thereunder. The
amendment to the Stock Option Plan has also been approved by shareholders of the
Company holding a majority of voting shares of stock in the Company.
Shareholder approval was obtained by written consent in lieu of a
shareholders meeting, dated October 23, 1997. The amendment to the Stock
Option Plan should be effective on or about November 20, 1997.
This Information Statement is being mailed on or about October 30, 1997.
This Information Statement is being furnished to shareholders solely to
provide them with certain information concerning the Merger and the Stock
Option Plan in accordance with the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the regulations promulgated
thereunder including particularly Regulation 14C. The costs of this
Information Statement are being borne by the Company.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
Page 3
<PAGE>
<PAGE>
MERGER OF THE COMPANY INTO ZEVEX DELAWARE
The Board of Directors believes that it is in the best interests of ZEVEX
International, Inc., a Nevada corporation (the "Company"), and its
shareholders that the Company be reincorporated from the State of Nevada to
Delaware. The reincorporation will be accomplished by merging the Company
(the "Merger") into its wholly owned subsidiary, ZEVEX International, Inc., a
Delaware corporation ("ZEVEX Delaware"). The terms and conditions of the
Merger are set forth in a Plan of Merger (the "Plan of Merger") entered into
between the Company and ZEVEX Delaware. The Plan of Merger has been approved
by written consent of a majority of the shareholders of the Company dated
October 23, 1997 (the "Shareholders Consent").
ZEVEX Delaware
ZEVEX Delaware is a wholly owned subsidiary of the Company. It currently
has no operations. ZEVEX Delaware was incorporated for the sole purpose of
reincorporating the Company in the State of Delaware without any interruption
in the operations of the Company. Following the Merger, ZEVEX Delaware will
conduct the same business as is currently conducted by the Company.
EFFECT OF THE MERGER
The Plan of Merger provides, in part, that each share of Common Stock,
par value $0.001, of the Company will be exchanged for one share of Common
Stock, par value $0.001, of ZEVEX Delaware. As a result of the Merger, ZEVEX
Delaware will succeed to all of the assets and liabilities of the Company.
The Company will make appropriate application for listing of the shares
of Common Stock of ZEVEX Delaware on the American Stock Exchange.
The shares of Common Stock of ZEVEX Delaware are voting shares, with each
share being entitled to a single vote. Dividends are payable on the Common
Stock at the discretion of the Board of Directors of ZEVEX Delaware. ZEVEX
Delaware does not currently contemplate paying dividends on the Common Stock
in the foreseeable future.
The Merger will become effective (the "Effective Time") upon the filing
of: (i) the Certificate of Merger with the State of Delaware, and (ii)
Articles of Merger with the State of Nevada.
ISSUANCE AND EXCHANGE OF CERTIFICATES
Promptly after the Effective Time, ZEVEX Delaware (or its agent) will
issue share certificates to the shareholders of the Company reflecting their
holdings in ZEVEX Delaware. As indicated above, each shareholder of the
Company will receive one share of Common Stock in ZEVEX Delaware for each
share owned in the Company.
Page 4
<PAGE>
<PAGE>
TERMINATION
The Plan of Merger is subject to termination at the option of either the
Company or ZEVEX Delaware prior to the Effective Time.
APPROVALS
A Certificate of Merger must be filed with the State of Delaware, and
Articles of Merger must be filed with the State of Nevada. Except for these
filings, no federal or state regulatory requirements must be complied with or
approvals obtained in connection with the Merger.
SHARE PRICE
The high and low sales price for shares of Common Stock of the Company on
the date preceding the Shareholders Consent was $16.00 (high) and $15.625 (low).
ADDRESSES OF THE COMPANY AND ZEVEX DELAWARE
The mailing address for the Company is as follows:
ZEVEX International, Inc.
4314 ZEVEX Park Lane
Murray, UT 84123
(801) 264-1001
The mailing address for ZEVEX Delaware is as follows:
ZEVEX International, Inc.
4314 ZEVEX Park Lane
Murray, UT 84123
(801) 264-1001
COMPARISON OF RIGHTS UNDER NEVADA AND DELAWARE LAW
If the Merger is consummated, the shareholders of the Company, a Nevada
corporation, will become shareholders of ZEVEX Delaware, a Delaware
corporation, and the rights of such shareholders will be governed by
applicable Delaware law, including the Delaware General Corporation Law (the
"Delaware Law"), the ZEVEX Delaware Certificate of Incorporation (the "ZEVEX
Delaware Certificate"), a copy of which is attached hereto as Exhibit A and
incorporated herein by this reference, and the Bylaws of ZEVEX Delaware (the
"ZEVEX Delaware Bylaws"), a copy of which is attached hereto as Exhibit B and
incorporated herein by this reference. The following discussion summarizes
certain important differences between the rights of shareholders of the
Company under the Nevada general corporation law (the "Nevada Law"), the
Company Articles of Incorporation, as amended (the "Company Articles") and the
Bylaws of the Company (the "Company Bylaws"), and the rights of shareholders
of ZEVEX Delaware under Delaware Law, the ZEVEX Delaware Certificate, and the
Page 5
<PAGE>
<PAGE>
ZEVEX Delaware Bylaws.
AUTHORIZED CAPITAL STOCK
Under the Company Articles, the Company currently has authority to issue
5,000,000 shares of Common Stock, par value $0.04 per share.
Under the ZEVEX Delaware Certificate, ZEVEX Delaware currently has
authority to issue 10,000,000 shares of Common Stock, par value $0.001 per
share, and 2,000,000 shares of preferred stock, par value $0.001 per share,
which preferences and characteristics are to be determined by the Board of
Directors of ZEVEX Delaware.
SHAREHOLDER ACTION BY WRITTEN CONSENT
Under Delaware Law, unless otherwise provided in a corporation's
certificate of incorporation, any action required to be taken at an annual or
special meeting of the shareholders may be taken in the absence of a meeting,
without prior notice and without a vote. Such action may be taken by the
written consent of shareholders in lieu of a meeting setting forth the action
so taken and signed by the holders of outstanding stock representing the
number of shares necessary to take such action at a meeting at which all
shares entitled to vote were present and voted. Prompt notice of the taking
of a corporate action without a meeting by less than unanimous written consent
must be given to those shareholders who have not consented in writing. ZEVEX
Delaware has not prohibited the taking of shareholder actions by written
consent in the ZEVEX Delaware Certificate.
Under Nevada Law, unless otherwise provided in a corporation's articles
of incorporation or bylaws, any action required or permitted to be taken at a
meeting of shareholders may be taken without a meeting if a written consent
thereto is signed by shareholders holding at least a majority of the voting
power, except that if a different proportion of voting power is required for
such an action at a meeting, then that proportion of written consents is
required. The Company Bylaws do not contain a prohibition on the taking of
shareholder actions by written consent.
SPECIAL MEETINGS OF SHAREHOLDERS
Under Delaware Law, special meetings of shareholders may be called by the
Board of Directors or by such other person or persons as may be authorized to
do so by the corporation's certificate of incorporation or bylaws. The ZEVEX
Delaware Bylaws provide that a special meeting of the shareholders may be
called by the President, or by the Board of Directors. The shareholders do
not have the right to call a special meeting of the shareholders of ZEVEX
Delaware.
Under Nevada Law, special meetings of shareholders may be held in the
manner provided by the bylaws of the corporation. The Company Bylaws provide
Page 6
<PAGE>
<PAGE>
that special meetings of the shareholders may be called by the President,
three (3) directors, or the holders of a majority of the capital stock of the
Company.
NOTICE OF PROPOSALS AND SHAREHOLDER DIRECTOR NOMINEES
The ZEVEX Delaware Bylaws contain a provision requiring that shareholders
desiring to include a proposal on the agenda for a shareholder meeting must
submit the proposal to the Company between 30 and 60 days prior to the
meeting. Similarly, shareholder director nominations must be submitted to
ZEVEX Delaware between 30 and 60 days prior to the shareholder meeting at
which elections will be held. The Company Bylaws do not contain comparable
provisions.
BOARD OF DIRECTORS
Size of Board of Directors.
--------------------------
Under the ZEVEX Delaware Bylaws, the ZEVEX Delaware Board of Directors is
composed of a number of directors as determined from time to time by the Board
of Directors. The initial Board of Directors is comprised of five (5)
members. Under the Company Bylaws, the Company Board of Directors consists of
at least two (2) and no more than nine (9) persons. The current number of
Company Directors is five (5).
Classified Board of Directors.
-----------------------------
Delaware Law permits a Delaware corporation to classify its Board of
Directors into as many as three classes. ZEVEX Delaware has elected to
classify its Board of Directors into three classes. After the classified
Board of Directors is implemented (at the first annual meeting of
shareholders), one class (consisting of approximately 1/3 of the entire
membership of the Board) will be elected at each annual meeting of the
shareholders to serve for a term of three years or until their successors are
elected and take office. Nevada law also permits corporations to classify
boards of directors provided that at least one-fourth of the total number of
directors is elected annually. The Company does not have a classified Board
of Directors.
Vacancies.
---------
Under Delaware Law, subject to the rights, if any, of any series of
preferred stock to elect directors and to fill vacancies on the Board of
Directors,vacancies on the Board of Directors will be filled by the
affirmative vote of a majority of the remaining directors then in office, even
if less than a quorum. Any director so appointed will hold office for the
remainder of the full term of the class of directors in which the vacancy
occurred. Similarly, Nevada Law provides that vacancies may be filled by a
majority of the remaining directors, though less than a quorum, unless the
Page 7
<PAGE>
<PAGE>
articles of incorporation provides otherwise. The Bylaws of the Company and
of ZEVEX Delaware address the issue of director vacancies in the same manner.
Therefore, the change from Nevada law to Delaware law will not alter
shareholders' rights with respect to filling vacancies.
RESTRICTIONS ON BUSINESS COMBINATIONS/CORPORATE CONTROL
Both Delaware Law and Nevada Law contain provisions restricting the
ability of a corporation to engage in business combinations with an interested
shareholder. Under Delaware Law, except under certain circumstances, a
corporation is not permitted to engage in a business combination with any
"interested stockholder". Similarly, Nevada Law does not permit business
combinations with interested shareholders for a period of three years
following the time such shareholder became an interested shareholder without
board approval. Nevada Law defines an interested shareholder, generally, as a
person who owns 10% or more, rather than 15% or more as under Delaware Law, of
the outstanding shares of the corporation's voting stock.
In addition, Nevada Law generally disallows the exercise of voting rights
with respect to "control shares" of an "issuing corporation" held by an
"acquiring person", unless such voting rights are conferred by a majority vote
of the disinterested shareholders. "Acquiring person" means (subject to
certain exceptions) any person who individually or in association with others,
acquires or offers to acquire, directly or indirectly, a controlling interest
in the issuing corporation. "Control shares" are the voting shares of an
issuing corporation acquired in connection with the acquisition of a
"controlling interest". "Controlling interest" is defined in terms of
threshold levels of voting share ownership of outstanding voting shares of an
issuing corporation sufficient to enable the acquiring person, individually or
in association with others, directly or indirectly, to exercise (i) one-fifth
or more but less than one-third, (ii) one-third or more but less than a
majority, or (iii) a majority or more of the voting power of the issuing
corporation in the election of directors, and voting rights must be conferred
by a majority of the disinterested shareholders as each threshold is reached
and/or exceeded. The Delaware Law does not contain a similar control shares
statute.
SHAREHOLDER VOTE FOR MERGERS AND OTHER CORPORATE REORGANIZATIONS
In general, both jurisdictions require authorization by an absolute
majority of outstanding shares entitled to vote, as well as approval by the
Board of Directors with respect to the terms of a merger or a sale of
substantially all of the assets of the corporation. Neither Nevada Law nor
Delaware Law requires shareholder approval by the shareholders of a surviving
corporation in a merger or consolidation so long as the surviving corporation
issues no more than 20% of its voting stock in the transaction.
Page 8
<PAGE>
<PAGE>
APPRAISAL RIGHTS; DISSENTERS RIGHTS
Both Delaware Law and Nevada Law provide that shareholders have the
right, in some circumstances, to dissent from certain corporate
reorganizations and to instead demand payment of the fair cash value of their
shares. Under Delaware Law, unless a corporation's certificate of
incorporation provides otherwise, dissenters do not have rights of appraisal
with respect to: (i) a merger or consolidation by a corporation, the shares
of which are either listed on a national securities exchange, designated as a
National Market System Security on an inter-dealer quotation system by the
National Association of Securities Dealers, Inc., or held of record by at
least 2,000 shareholders, or (ii) shareholders of a corporation surviving a
merger if no vote of the shareholders of the surviving corporation is required
to approve the merger.
Nevada Law also limits dissenters rights when the shares of the
corporation are listed on a national securities exchange or are held by at
least 2,000 shareholders unless the shareholders are required to accept in
exchange for their shares anything other than cash or: (i) shares in the
surviving corporation, (ii) shares in another entity that is publicly listed
or held by more than 2,000 shareholders, or (iii) any combination of cash or
shares in an entity described in (i) or (ii).
AMENDMENT OF CERTIFICATE OF INCORPORATION AND BYLAWS
Delaware Law and Nevada Law permit a corporation to amend its certificate
or articles of incorporation in any respect provided the amendment contains
only provisions that would be lawful in an original certificate or articles of
incorporation filed at the time of amendment. To amend a certificate or
articles of incorporation, the Board of Directors must adopt a resolution
presenting the proposed amendment. In addition, a majority of the shares
entitled to vote, as well as a majority of shares by class of each class
entitled to vote, must approve the amendment to make it effective. The ZEVEX
Delaware Certificate provides that certain portions of the Certificate may
only be amended by a vote of at least 66 2/3% of the shareholders.
When the substantive rights of a class of shares will be affected by an
amendment, the holders of those shares are entitled to vote as a class even if
the shares are non-voting shares. When only one or more series in a class of
shares, and not the entire class, will be adversely affected by an amendment,
only the affected series may vote as a class. Under Delaware Law, the right
to vote as a class may be limited in certain circumstances.
Delaware Law provides that, in its resolution proposing an amendment, the
Board of Directors may insert a provision allowing the Board to abandon the
amendment, without concurrence by shareholders, after the amendment has
received shareholder approval but before its filing with the Secretary of
State.
Page 9
<PAGE>
<PAGE>
Delaware Law provides that the power to amend the bylaws rests with the
shareholders entitled to vote, although the certificate of incorporation may
confer the power to amend the bylaws upon the Board of Directors. Delaware
Law also provides that the fact that the certificate of incorporation confers
such power upon the Board of Directors neither limits nor divests the
shareholders of the power to amend the bylaws. The ZEVEX Delaware Certificate
authorizes the Board of Directors of ZEVEX Delaware to make and alter the
ZEVEX Bylaws. Nevada Law, on the other hand, provides that, subject to the
bylaws, if any, adopted by the shareholders, the directors may make the bylaws
of the corporation.
INDEMNIFICATION OF OFFICERS AND DIRECTORS AND ADVANCEMENT OF EXPENSES
Delaware and Nevada have very similar provisions regarding
indemnification by a corporation of its officers, directors, employees, and
agents for claims against such persons as a result of their position.
Delaware Law and Nevada Law differ slightly in their provisions for
advancement of expenses incurred by an officer or director in defending a
civil or criminal action, suit, or proceeding. Delaware Law provides that
expenses incurred by an officer or director in defending any civil, criminal,
administrative, or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of the action, suit, or
proceeding upon receipt of an undertaking by or on behalf of the director
or officer to repay the amount if it is ultimately determined that he is not
entitled to be indemnified by the corporation.
Nevada Law provides for similar advancement of expenses at the discretion
of the Board of Directors. In addition, however, the articles of
incorporation, bylaws, or an agreement made by the corporation may require the
corporation to advance expenses as they are incurred before the final
disposition of the action, suit or proceeding upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is
ultimately determined that he or she is not entitled to be indemnified by the
corporation. The Company Articles permit advancement of expenses. The
Company Bylaws, however, permit advancement of expenses only if the Company
receives an undertaking by or on behalf of the director or officers to repay
any amounts advanced unless it is determined by a court that he or she is
entitled to indemnification.
LIMITATION ON PERSONAL LIABILITY OF DIRECTORS
Delaware corporations are permitted to adopt charter provisions limiting,
or even eliminating, the liability of a director to a company or its
shareholders for monetary damages for breach of fiduciary duty as a director,
provided that such liability does not arise from certain proscribed conduct,
including breach of the duty of loyalty, act or omissions not in good faith
or that involved intentional misconduct or a knowing violation of law, or
liability to the corporation based on unlawful dividends or distributions or
Page 10
<PAGE>
<PAGE>
improper personal benefit. The ZEVEX Delaware Articles provide for the
elimination or limitation of the personal liability of directors of ZEVEX
Delaware for monetary damages to the fullest extent permitted by Delaware Law.
Nevada Law regarding the adoption of provisions in the articles of
incorporation limiting personal liability is similar to Delaware Law, but
differs in two respects. First, the Nevada Law provision applies to both
directors and officers. Second, the Delaware Law provision excepts from
limitation on liability a breach of the duty of loyalty. The Nevada Law
counterpart does not contain this exception. The Company Articles provide for
the elimination of personal liability for the directors and officers of the
Company for damages for breach of fiduciary duty except for acts or omissions
involving intentional misconduct, fraud or a knowing violation of law or for
the payment of dividends in violation of Nevada Law.
Under the laws of either state, the charter provision will not have any
effect on the availability of equitable remedies such as an injunction or
rescission, based upon a breach of the duty of care or on liability which
arises under certain federal statutes such as the securities laws.
CERTAIN ANTITAKEOVER PROVISIONS
Certain provisions of the ZEVEX Delaware Certificate and the ZEVEX
Delaware Bylaws may discourage potential acquisition proposals, delay or
prevent a change in control of ZEVEX Delaware and limit the price that certain
investors might be willing to pay in the future for shares of its Common
Stock. Such provisions include the provisions providing for a classified
Board of Directors, authorizing the Board of Directors to fix the terms of any
series of preferred stock prior to issuance, and restrictions on business
combinations with an interested shareholder.
VOTE REQUIRED - ADOPTION OF PLAN OF MERGER
On the date of the Shareholders Consent, the outstanding voting
securities of the Company were 2,063,826 shares of Common Stock, par value
$0.04 per share. Each share of Common Stock held of record counted as one
vote. A majority, or 1,031,914 votes were required to adopt the Plan of
Merger. 1,139,198 votes, or more than a majority, voted in favor of adoption
of the Plan of Merger.
FEDERAL TAX CONSEQUENCES OF THE MERGER
The Merger is intended to constitute a tax-free reorganization under
Section 368(a)(1)(F) of the Internal Revenue Code. For federal income tax
purposes, no gain is expected to be recognized by Company shareholders as a
result of the Merger, to the extent that such shareholders receive solely
ZEVEX Delaware Common Stock in the Merger and provided certain other
conditions are met. ALL COMPANY SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS REGARDING THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER.
Page 11
<PAGE>
<PAGE>
AMENDED 1993 STOCK OPTION PLAN
The Compensation Committee of the Board of Directors has increased the
number of shares reserved under the Company's 1993 Stock Option Plan (the
"Stock Option Plan") from 240,000 shares of Common Stock to 600,000 shares of
Common Stock. Pursuant to the Shareholders Consent, the increase in the
number of shares under the Stock Option Plan has been approved and will be
effective on or about November 20, 1997. The Company sought shareholder
approval of the increase because such approval is required if the Company
desires to award incentive stock options ("ISOs") under the Stock Option Plan.
Described below are the material features of the Stock Option Plan and certain
information about stock option grants that have been issued under the Stock
Option Plan to date.
GENERAL
The Stock Option Plan provides for the grant of a variety of awards,
including ISOs qualified under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), non-qualified stock options ("NSOs"), stock
appreciation
rights, and shares of Common Stock (collectively, "Awards"). The Stock Option
Plan is administered either by the Board of Directors or a committee of the
Board of Directors (the "Administrator"). Awards are made in the discretion of
the Administrator and may be made to Company officers, directors, employees,
and other persons as determined by the Administrator. Presently, there are
three executive officers, two non-employee directors, and 86 other employees
of the Company currently employed by the Company, all of whom (as well as all
future employees) are eligible to participate in the Stock Option Plan.
Currently a maximum of 600,000 shares of Common Stock (subject to
adjustment in the event of stock split or other changes in the Common Stock as
provided in the Stock Option Plan) may be awarded under the Stock Option Plan.
The Board of Directors can increase the number of shares that may be awarded
under the Stock Option Plan. To the extent: (i) options expire prior to
exercise, (ii) restricted shares of Common Stock are forfeited, or (iii) the
recipient of an Award does not otherwise receive the full number of shares of
Common Stock that might have been issued to the recipient, such shares will
again be available for award under the Stock Option Plan. The unexercised
portion of any Award made to a director, officer, or employee of the Company
will be null and void if such person is terminated or resigns from the Company
within six months of the date of the Award. Each Award will be evidenced by
an agreement incorporating the Stock Option Plan's terms and conditions and
other relevant provisions. Shares issued under the Stock Option Plan will be
"restricted" as defined under Securities and Exchange Commission ("SEC")
Rule 144, until such time as the Company determines in its discretion, if at
all, to register such shares under the Securities Act of 1933.
Page 12
<PAGE>
<PAGE>
THE ADMINISTRATOR
As mentioned above, the Administrator of the Stock Option Plan will be
the Board of Directors or a committee of the Board of Directors. Such
committee must be made up of two or more "non-employee directors" (as defined
under SEC Rule 16(b)(3)). The Administrator has full authority and
discretion in the administration of the Stock Option Plan, including the
designation of those persons receiving Awards, the number of shares to be
covered by options, stock appreciation rights or stock awards, the exercise
price and other terms of options, and the other terms of stock appreciation
rights or other tandem awards. Further, the Administrator may specify
additional terms and conditions which may be placed upon receiving an Award.
The Administrator's decisions in the administration of the Stock Option Plan
shall be final and binding on all persons for all purposes.
OPTIONS AND STOCK APPRECIATION RIGHTS
ISOs may be granted under the Stock Option Plan only to employees of the
Company and must be at a price per share not less than 100% of the fair market
value of the Common Stock at the date of the grant (110% for optionees holding
10% of more of the Company's Common Stock). The Stock Option Plan limits
grants of ISOs that may be exercised for the first time by the holder during
any calendar year to $100,000 in market value. Each ISO, unless sooner
terminated, expires within five years from the date of grant for optionees
holding more than 10% of the Company's Common Stock. No ISOs will
be granted after ten years following the effective date of the Stock Option
Plan. In addition to ISOs, Non-Qualified Stock Options ("NSOs") may also be
issued under the Stock Option Plan. Such NSOs, if issued, are not subject to
the requirements of the Code and, therefore, may not contain the same
restrictions as ISOs issued under the Stock Option Plan. To date, the Company
has issued only 14,000 NSOs under the Stock Option Plan.
The exercise period for non-qualified stock options is set by the
Administrator in its discretion. The exercise price for options may be paid
to the Company, in the discretion of the Administrator, in cash, shares of
Common Stock, or payments over time. Generally, an option or stock
appreciation right may be exercised only by the holder within three months
after his or her termination of employment (twelve months if due to
disability) unless the Administrator determines otherwise. Such option or
stock appreciation right may be exercised no later than twelve months
following an active employee's death unless the Administrator determines
otherwise, but in no event later than the expiration of the exercise period
for the option or stock appreciation right. An Award is terminated
immediately upon termination of an employee for material misconduct. Except
for ISOs, Awards generally are transferable to a holder's family member, a
trust for the benefit of the holder or family member, a charity, by will, or
by the laws of descent and distribution. ISOs are exercisable during an
optionee's lifetime only by such optionee and are transferable only upon death
by will or the laws of descent or distribution.
Page 13
<PAGE>
<PAGE>
STOCK AWARDS
Shares of Common Stock awarded under the Stock Option Plan or issued in
connection with another Award granted under the Plan may be issued subject to
a restriction period set by the Administrator during which time the shares may
not be sold, transferred, assigned or pledged. The Administrator may provide
for other restrictions and termination provisions that it deems appropriate in
its discretion.
AMENDMENTS
The Administrator may amend the Stock Option Plan at any time, subject to
the rights of the holders of outstanding Awards as specified in their Award
agreements.
AWARDS UNDER THE STOCK OPTION PLAN
As of September 30, 1997, stock options for 314,190 shares of Common
Stock were outstanding under the Stock Option Plan. As of September 30,
options for 44,110 shares had been exercised, leaving 241,700 shares available
for future grant under the Stock Option Plan. No other forms of Award have
been made under the Stock Option Plan. The stock options outstanding under
the Stock Option Plan are summarized below:
Option Holder Shares Subject to Options
- ------------- -------------------------
Dean G. Constantine(1) 84,500
David J. McNally(1) 84,500
Phillip L. McStotts(1) 84,500
Current Executive Officers
As a Group(1) 253,500
Current Directors Who
Are Not Executive Officers 14,000
All Employees Who Are
Not Executive Officers 46,690
Total 314,190
(1) The three executive officers of the Company are: Dean G. Constantine,
President and Chief Executive Officer; David McNally, Vice President and
Marketing Director; and Phillip McStotts, Chief Financial Officer and
Secretary/Treasurer. Of the options held by each of these officers, only
options for 12,400 shares are currently exercisable by each officer.
Page 14
<PAGE>
<PAGE>
Based on the closing price of the Company's Common Stock on the American Stock
Exchange as of September 30, 1997 ($16.4375), the total market value of the
314,190 shares outstanding under the Stock Option Plan was $5,164,498.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of September 30, 1997, by (i) each
person (or group of affiliated persons) who is known by the Company to
beneficially own more that 5% of the outstanding shares of the Company's
Common Stock, (ii) each director and executive officer of the Company, and
(iii) all executive officers and directors of the Company as a group. Unless
indicated otherwise, the address for each officer, director and 5% shareholder
is c/o the Company, 4313 ZEVEX Park Lane, Salt Lake City, Utah 84123.
BENEFICIAL OWNERSHIP
NAME AND ADDRESS SHARES(1) PERCENTAGE(1)
Dean G. Constantine(2) 264,600 12.9%
David J. McNally(3) 252,598 12.3%
Phillip L. McStotts(4) 159,400 7.8%
Bradly A. Oldroyd(5) 8,000 *
Darla R. Gill(6) 6,480 *
Kirk Blosch(7) 550,000 24.8%
Jeff Holmes(8) 550,000 24.8%
Blosch & Holmes(9) 250,000 12.3%
Douglas K. Anderson(10) 130,000 6.4%
Officers and Directors as
a Group (5 persons) 691,078 33.0%
* Less than 1%.
(1) For each shareholder, the calculation of percentage of beneficial
ownership is based on 2,063,826 shares of Common Stock outstanding as of
September 30, 1997, and shares of Common Stock subject to options held by the
shareholder that are currently exercisable or exercisable within 60 days,
which are deemed to be outstanding and to be beneficially owned by the
shareholder holding such options. Except as indicated otherwise below, the
persons and entity named in the table have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned by
them, subject to applicable community property laws.
(2) Chief Executive Officer, President, and Chairman of the Company.
Includes 12,400 shares of Common Stock issuable upon exercise of options
held by Mr. Constantine that are currently exercisable or will become
exercisable within 60 days, and 100 shares of Common Stock owned by each of
his dependent children. Excludes 70,000 shares of Common Stock issuable upon
exercise of options held by Mr. Constantine that are not currently exercisable
Page 15
<PAGE>
<PAGE>
and will not become exercisable within 60 days.
(3) Vice President, Marketing Director, and director of the Company.
Includes 12,400 shares of Common Stock issuable upon exercise of options held
by Mr. McNally that are currently exercisable or will become exercisable
within 60 days. Excludes 70,000 shares of Common Stock issuable upon exercise
of options held by Mr. McNally that are not currently exercisable and will not
become exercisable within 60 days.
(4) Chief Financial Officer, Secretary, Treasurer, and director of the
Company. Includes 12,400 shares of Common Stock issuable upon exercise of
options held by Mr. McStotts that are currently exercisable or will become
exercisable within 60 days. Excludes 70,000 shares of Common Stock issuable
upon exercise of options held by Mr. McStotts that are not currently
exercisable and will not become exercisable within 60 days.
(5) Director. Includes 8,000 shares of Common Stock issuable upon exercise
of options that are currently exercisable or will become exercisable within 60
days.
(6) Director. Includes 480 shares of Common Stock held directly and
6,000 shares of Common Stock issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days.
(7) Includes 175,000 shares of Common Stock issuable upon exercise of
warrants that are currently exercisable or will become exercisable within 60
days, and 250,000 shares of Common Stock held by Blosch & Holmes, L.L.C. of
which Mr. Blosch is a principal (and which 250,000 shares are also reported as
beneficially owned by Mr. Holmes and Blosch & Holmes, L.L.C.). Mr. Blosch's
address is 2081 S. Lakeline Drive, Salt Lake City, UT 84109.
(8) Includes 175,000 shares of Common Stock issuable upon exercise of
warrants that are currently exercisable or will become exercisable within 60
days, and 250,000 shares of Common Stock held by Blosch & Holmes, L.L.C. of
which Mr. Holmes is a principal (and which 250,000 shares are also reported as
beneficially owned by Mr. Blosch and Blosch & Holmes, L.L.C.). Mr. Holmes'
address is 8555 E. Voltaire Ave., Scottsdale, AZ 85260.
(9) Includes 250,000 shares of Common Stock held by Blosch & Holmes, L.L.C.
of which Messrs. Blosch and Holmes are principals (and which 250,000 shares
are also reported as beneficially owned by Mr. Holmes and Mr. Blosch). The
address for Blosch & Holmes, L.L.C. is 2081 S. Lakeline Drive, Salt Lake City,
UT 84109.
(10) Mr. Anderson's address is 1132 South 500 West, Salt Lake City, Utah
84101.
Page 16
<PAGE>
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
The Company pays each director who is not an employee of the Company or
its subsidiary a director's fee of $500 per Board of Directors meeting
attended, $250 for any annual meeting attended, and $125 per hour for any
special meeting attended. Additionally, the Company has issued stock options
to the non-employee directors in the past and may do so in the future.
Directors who are employees of the Company receive no additional compensation
for serving as directors or attending meetings of directors or shareholders.
COMPENSATION OF EXECUTIVE OFFICERS
None of the executive officers has an employment agreement with the
Company. The following table sets forth the compensation paid by the
Company to each of the Company's executive officers during the three-year
period ended December 31, 1996.
Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
--------------------------- ------------ -------
Restric-
Other ted LTIP All
Name and Annual Stock Op- Pay- Other
Principal Position Year Salary Bonus Comp. Awards tions outs Comp.
- ------------------ ---- ------ ----- ------ ------- ----- ---- ---------
Dean G. Constantine 1996 $77,917 $21,189 0 0 0 0 $6,286(1)
CEO and President 1995 $69,375 $10,102 0 0 0 0 $4,712(2)
1994 $66,400 $10,000 0 0 0 0 $2,581(1)
David J. McNally 1996 $77,917 $12,189 0 0 0 0 $6,286(1)
Vice President and 1995 $69,375 $10,102 0 0 0 0 $4,712(2)
Marketing Director 1994 $66,400 $10,000 0 0 0 0 $2,581(1)
Phillip L. McStotts 1996 $77,917 $12,189 0 0 0 0 $6,286(1)
Chief Financial Off. 1995 $69,375 $10,102 0 0 0 0 $4,712(2)
Secretary/Treasurer 1994 $66,400 $10,000 0 0 0 0 $2,581(1)
Page 17
<PAGE>
<PAGE>
(1) Represents the amount paid by the Company as a contribution to the
Company's 401(k) Pension and Profit Sharing Plan on the officer's behalf.
(2) Represents $2,631 paid by the Company as a contribution to the Company's
401(k) Pension and Profit Sharing Plan on the officer's behalf and $2,081 as
each officer's portion of the contribution made by the Company into its
Employee Stock Ownership Plan.
OPTIONS GRANTS IN LAST FISCAL YEAR
No options were granted to the persons listed in the Summary Compensation
Table during the year ended December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table sets forth the options exercised during the year
ended December 31, 1996, by each executive officer of the Company and the
value of options held by such persons at such year end.
Number of Value of
Underlying Unexercised
Options at In-the-Money
FY-End at FY-End
Name and Shares
Principal Acquired Value Exercisable/ Exercisable/
Position on Exercise Realized Unexercisable Unexercisable
--------- ----------- -------- ------------- -------------
Dean G. Constantine 0 0 5,400/0 0/0
CEO and President
David J. McNally 0 0 5,400/0 0/0
Vice President and
Marketing Director
Phillip J. McStotts 0 0 5,400/0 0/0
Chief Financial Officer
Secretary/Treasurer
The unexercised options listed above were granted on December 17, 1992 and
expire on December 16, 2001. The exercise price on the above options is
$5.00. The value of the unexercised options was determined by reference
to average bid and asked prices for the Company's Common Stock in the over-
the-counter market as quoted on the OTC Bulletin Board as of the end of the
last fiscal year.
Page 18
<PAGE>
<PAGE>
SUBSEQUENT INCREASE IN COMPENSATION OF EXECUTIVE OFFICERS
Effective January 1, 1997, the Compensation Committee approved an
increase to $105,000 in the annual salaries for each of Mr. Constantine,
Mr. McNally, and Mr. McStotts. Additionally, effective September 30, 1997, the
Compensation Committee approved the grant of Common Stock purchase options for
70,000 shares each to Messrs. Constantine, McNally, and McStotts. The options
vest over a four-year period and are exercisable at a price of $16.4375 per
share. Lastly, the Compensation Committee approved a new executive
officer bonus plan, commencing January 1, 1997, which provides for annual
bonuses of 10% to 40% of base salary to each officer depending on
the attainment of certain annual revenue and profit targets as a percentage of
budgeted amounts. The amount of the bonus is discretionary within certain
ranges as determined by the Compensation Committee in certain instances.
Also, the Compensation Committee has the authority to pay bonuses in excess
of 40% upon extraordinary performance, but not to exceed 100% of base salary.
VOTE REQUIRED - AMENDMENT TO STOCK OPTION PLAN
On the date of the Shareholder Action, the outstanding voting
securities of the Company were 2,063,826 shares of Common Stock, par value
$0.04 per share. Each share of Common Stock held of record counted as one
vote. A majority, or 1,031,914 votes, were required to approve the
amendment to the Stock Option Plan. 1,139,198 votes, or more than a majority,
voted in favor of approval of the amendment to the Stock Option Plan.
FEDERAL INCOME TAX CONSEQUENCES OF THE AMENDMENT OF THE 1993 STOCK
OPTION PLAN
The following describes the general federal income tax consequences of
the various Awards to employees of the Company. An employee will not realize
any income at the time an ISO is granted nor upon exercise of an ISO.
However, the difference between the option exercise price and the Common
Stock's fair market value at the time of exercise will be taken into account
for purposes of the employee's alternative minimum income tax, if any.
Upon the subsequent disposition of shares of Common Stock acquired by the
exercise of an ISO more than (i) two years after the ISO is granted and (ii)
one year after the transfer of shares of Common Stock upon the exercise of
such option, the employee's basis for determining the capital gain or loss
realized upon such disposition will be the option price. If the subsequent
disposition of stock occurs before these special holding requirements are met,
the employee generally will recognize ordinary income upon such disposition
equal to the excess of the fair market value of the shares at the time the
option was exercised over the exercise price.
An employee will not realize any income at the time a non-qualified stock
option or stock appreciation right is granted. Upon the employee's exercise
Page 19
<PAGE>
<PAGE>
of a non-qualified stock option, the difference between the fair market value
of the Common Stock at the time of exercise and the option price will be
ordinary income to the employee. Similarly, the amount of cash and the fair
market value of the Common Stock received upon the employee's exercise of a
stock appreciation right will be ordinary income to the employee. However,
any employee who receives restricted Common Stock, either as an Award or upon
exercise of an option or a stock appreciation right, will realize, as ordinary
income at the time of the lapse of the restrictions, an amount equal to the
fair market value of the Common Stock at the time of such lapse (less the
option price for such shares if purchased by exercising an option) unless an
appropriate election is made in which case the employee will recognize
ordinary income as if the Common Stock had not been restricted. At the time
the employee realizes ordinary income, the Company will be entitled to a
deduction in the same amount as the ordinary income realized by the employee.
The foregoing is only a summary of the effect of federal income taxation
upon an employee with respect to the grant and exercise of options and the
receipt of other Awards under the Stock Option Plan. This summary does not
purport to be complete and does not discuss the income tax laws of any state
or foreign country in which an employee may reside.
Page 20
<PAGE>
<PAGE>
EXHIBIT LIST
------------
Exhibit A Certificate of Incorporation of
ZEVEX International, Inc., a
Delaware corporation
Exhibit B Bylaws of ZEVEX International, Inc..
a Delaware corporation
Appendix 1 1993 Stock Option Plan of ZEVEX International, Inc.,
a Nevada corporation
Appendix 2 Agreement and Plan of Merger between ZEVEX International, Inc.,
a Nevada corporation, and ZEVEX International, Inc.,
a Delaware corporation
Page 21
<PAGE>
<PAGE>
Exhibit A
CERTIFICATE OF INCORPORATION
OF
ZEVEX INTERNATIONAL, INC.
ARTICLE I. NAME
The name of the corporation is ZEVEX INTERNATIONAL, INC. (the
"Corporation").
ARTICLE II. REGISTERED OFFICE
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, in the County of New Castle, in the State of Delaware. The name
of the registered agent at such address is the Corporation Trust Company.
ARTICLE III. PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
ARTICLE IV. CAPITAL STOCK
The Corporation is authorized to issue two classes of shares to be
designated, respectively, "Preferred Stock" and "Common Stock." The number of
shares of Preferred Stock authorized to be issued is Two Million (2,000,000).
The number of shares of Common Stock authorized to be issued is Ten Million
(10,000,000). The Preferred Stock and the Common Stock shall each have a par
value of $0.001 per share.
(a) Provisions Relating to the Common Stock.
Each holder of Common Stock is entitled to one vote for each share
of Common Stock standing in such holder's name on the records of the
Corporation on each matter submitted to a vote of the stockholders, except as
otherwise required by law.
(b) Provisions Relating to the Preferred Stock.
The Board of Directors (the "Board") is authorized, subject to
limitations prescribed by law and the provisions of this Article IV, to
provide for the issuance of the shares of Preferred Stock in accordance with
Sections 102(a) and 151(a) of the General Corporation Law of Delaware, in one
or more series, and by filing a certificate pursuant to the applicable law of
the State of Delaware, to establish from time to time the number of shares to
be included in each such series, and to fix the designation, powers,
Page 22
<PAGE>
<PAGE>
preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
ARTICLE V. BOARD OF DIRECTORS
(a) Number. The number of directors constituting the entire Board
shall be as fixed from time to time by vote of a majority of the entire Board,
provided, however, that the number of directors shall not be reduced so as to
shorten the term of any director at the time in office.
(b) Classified Board. The Board shall be divided into three classes,
as nearly equal in numbers as the then total number of directors constituting
the entire Board permits with the term of office of one class expiring each
year. At the first annual meeting of the stockholders, directors of the first
class will be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class will be elected to
hold office for a term expiring at the second succeeding annual meeting, and
directors of the third class will be elected to hold office for a term
expiring at the third succeeding annual meeting.
(c) Vacancies. Vacancies on the Board shall be filled by the
affirmative vote of the majority of the remaining directors, though less than
a quorum of the Board, or by election at an annual meeting or at a special
meeting of the stockholders called for that purpose.
(d) Initial Directors. The initial Board shall consist of the
following persons:
Dean G. Constantine
David J. McNally
Philip L. McStotts
Bradly A. Oldroyd
Darla R. Gill
(e) The election of directors need not be by written ballot.
ARTICLE VI. BYLAWS
In furtherance and not in limitation of the powers conferred by statute,
the Board is expressly authorized to make, alter, amend or repeal the By-Laws
of the Corporation.
ARTICLE VII. LIABILITY
To the fullest extent permitted by the Delaware General Corporation Law
as the same exists or as may hereafter be amended, no director of the
Corporation shall be personally liable to the Corporation or its stockholders
for or with respect to any acts or omissions in the performance of his or her
duties as a director of the Corporation. Any amendment or repeal of this
Page 23
<PAGE>
<PAGE>
Article VII will not eliminate or reduce the affect of any right or protection
of a director of the Corporation existing immediately prior to such amendment
or repeal.
ARTICLE VIII. SPECIAL VOTING REQUIREMENTS
The following actions, when submitted to the stockholders of the
Corporation for their consideration, shall require the affirmative vote of at
least 66 2/3% of the outstanding Common Stock of the Corporation: amendment of
Sections (a), (b), or (c) of Article V of the Certificate of Incorporation.
The foregoing voting requirements shall not otherwise be deemed to affect the
voting rights granted by this Certificate of Incorporation, the Bylaws, or the
Delaware General Corporation Law, to the Board.
ARTICLE IX. INCORPORATOR
The name and mailing address of the incorporator is follows:
Ronald S. Poelman, Esq.
Jones, Waldo, Holbrook & McDonough
1500 Wells Fargo Plaza
170 South Main Street
Salt Lake City, Utah 84101
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and
certifying, under penalties of perjury, that this is my act and deed and the
facts herein stated are true, and accordingly have hereunto set my hand this
17 day of October, 1997.
/s/ Ronald S. Poelman
-----------------------------------
Ronald S. Poelman
Incorporator
Page 24
<PAGE>
<PAGE>
Exhibit B
BYLAWS
OF
ZEVEX INTERNATIONAL, INC.
ARTICLE I
SHAREHOLDERS
SECTION 1.1. ANNUAL MEETINGS. An annual meeting of shareholders shall
be held for the election of directors on such date, and at such time and place
as the Board of Directors may, from time to time, determine. Any other proper
business may be transacted at an annual meeting. If the annual meeting is not
held on the date designated, it may be held as soon thereafter as convenient
and shall be called the annual meeting.
SECTION 1.2. SPECIAL MEETINGS. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by the General
Corporation Law of the State of Delaware, may be called by the President or
the Board of Directors. The shareholders do not have the authority to call a
special meeting of the shareholders.
SECTION 1.3. SHAREHOLDER PROPOSALS/NOMINEES.
a. Shareholder Proposals. Shareholders seeking to place
shareholder proposals on the agenda for a shareholders' meeting must (i)
notify the Corporation of such proposal not less than 30 nor more than 60 days
prior to the date of the meeting; provided, however, that if the Corporation
provides shareholders with less than 40 days advance notice of the date of the
meeting, the shareholder notice must be given no later than the close of
business on the 10th day following the day the Corporation's notice was mailed
or publicly disclosed. Such notice must provide the Corporation with adequate
information regarding the proposal.
b. Shareholder Director Nominees. Shareholders director
nominations must (i) be in writing and contain adequate information about the
nominee; and (ii) be received by the secretary of the Corporation not less
than 30 nor more than 60 days prior to the date of the meeting at which
Directors will be elected; provided, however, that if the Corporation provides
shareholders with less than 40 days advance notice of the date of the meeting,
the shareholder notice must be given no later than the close of business on
the 10th day following the day the Corporation's notice was mailed or publicly
disclosed.
SECTION 1.4. NOTICE OF MEETINGS. Whenever shareholders are required or
permitted to take any action at a meeting, a written notice of the meeting
will be given that states the place, date and hour of the meeting, and in the
Page 25
<PAGE>
<PAGE>
case of a special meeting, the purpose(s) for which the meeting is called.
Unless otherwise provided by law, the Certificate of Incorporation or these
Bylaws, the written notice of any meeting will be given not less than ten nor
more than sixty days before the date of the meeting to each shareholder
entitled to vote at such meeting. If mailed, such notice will be deemed to be
given when deposited in the United States mail, postage prepaid, directed to
the shareholder at his or her address as it appears in the records of the
Corporation.
SECTION 1.5. WAIVER OF NOTICE. A shareholder may waive notice of any
meeting; provided that a shareholder's attendance at a meeting shall
constitute waiver of notice of such meeting, except when the shareholder
attends a meeting for the express purpose of objecting to the transaction of
any business to be transacted at the meeting, and not for the purpose of
objecting to the purpose of the meeting.
SECTION 1.6. ADJOURNMENTS. Any meeting of shareholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place are announced at the meeting at which the adjournment is taken. At
the adjourned meeting, the Corporation may transact any business that might
have been transacted at the original meeting. If the adjournment is for more
than thirty days, or if after the adjournment a new record date is fixed for
the adjourned meeting, pursuant to Section 1.3, notice of the adjourned
meeting will be given to each shareholder of record entitled to vote at the
meeting.
SECTION 1.7. RECORD DATE.
a. Determination of Record Date.
----------------------------
For purposes of determining the number and identity of shareholders for any
purpose, the Board of Directors may fix a date in advance as the record date
for any such determination of shareholders, provided that the record date may
not precede the date of the resolution fixing the record date. The record
date may not be more than sixty days prior to the date that the particular
action requiring the determination of shareholders is to occur. If to
determine the shareholders entitled to notice of, or to vote at, a meeting of
shareholders, the record date may not be fewer than ten days prior to the
meeting. The record date for determining shareholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto. A determination of shareholders of
record entitled to notice of, or to vote at, a meeting of shareholders will
apply to any adjournment of the meeting; provided that the Board of Directors
may fix a new record date for the adjourned meeting.
b. Failure to Fix Record Date.
--------------------------
If the stock transfer books are not closed and no record date is fixed for the
Page 26
<PAGE>
<PAGE>
determination of shareholders entitled to notice or to vote, or to receive
payment of a dividend, the date on which the notice is mailed or the Board of
Directors resolution declaring the dividend is adopted, as the case may be,
will be the record date for such determination of shareholders.
SECTION 1.8. LIST OF SHAREHOLDERS ENTITLED TO VOTE. At least ten days
before each meeting of shareholders, the officer or agent charged with
overseeing the stock transfer books of the Corporation will compile a complete
list of the shareholders entitled to vote at such meeting, or any adjournment
thereof, arranged in alphabetical order, with the address of and the number of
shares held by each. Such list will be kept on file at the Corporation's
principal office for the ten days before the meeting and will be subject to
the inspection of any shareholder during that ten day period during normal
business hours for any purpose related to the meeting and during the meeting.
SECTION 1.9. QUORUM. Except as otherwise provided by law, the
Certificate of Incorporation, or these Bylaws, a majority of the outstanding
shares of the Corporation entitled to vote, represented in person or by proxy,
will constitute a quorum at a meeting of shareholders. If less than a majority
of the outstanding shares are represented at the meeting, a majority of the
shares so represented may adjourn the meeting from time to time without
further notice. If a quorum is present or represented at such adjourned
meeting, any business may be transacted that might have been transacted at the
meeting as originally notified. The shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum.
SECTION 1.10. VOTING.
a. One Vote Per Share.
------------------
Unless otherwise provided by the Certificate of Incorporation (or action of
the Board of Directors as provided therein) or these Bylaws, each outstanding
share entitled to vote will be entitled to one vote on each matter submitted
to a vote at a meeting of shareholders.
b. Required Vote.
-------------
Article VIII of the Certificate of Incorporation provides for super-majority
voting in certain circumstances. Except as set forth therein, or as provided
in the General Corporation Law of the State of Delaware, a majority vote of
those shares present and voting at a duly organized meeting will suffice to
defeat or enact any proposal; provided that with respect to votes to elect
directors, a plurality of the votes cast will be sufficient to elect.
c. Shares Held By Other Than the Record Owner.
------------------------------------------
Shares held by an administrator, executor, guardian or conservator may be
voted by him or her, in person or by proxy, without the transfer of such
Page 27
<PAGE>
<PAGE>
shares into his or her name. Shares held in the name of a trustee may be
voted by him or her, in person or by proxy, only if the shares are transferred
into the trustee's name. Shares held in the name of, by or under the control
of a receiver may be voted by the receiver without transferring the shares
into the receiver's name if authority to do so is evidenced in an order from
the court that appointed the receiver. A shareholder whose shares are pledged
shall be entitled to vote his or her shares until the shares are transferred
into the name of the pledgee, and thereafter, the pledgee will be entitled to
vote the shares so transferred. Shares belonging to the Corporation or held by
it in a fiduciary capacity may not be voted, directly or indirectly, at any
meeting, and will not be counted in determining the total number of
outstanding shares at any given time.
SECTION 1.11. PROXIES.
a. General.
-------
At all meetings of shareholders, a shareholder may vote by proxy. Proxies
must be written, signed by the shareholder or by his or her duly authorized
attorney in-fact, and filed with the Secretary of the Corporation before or at
the time of a meeting where a proxy is granted. No proxy is valid after six
months from the date of its execution, unless otherwise provided in the proxy
or coupled with an interest.
b. Irrevocable Proxies.
-------------------
A proxy may be irrevocable if it states that it is irrevocable and if, and
only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power.
c. Revocation of a Proxy.
---------------------
A shareholder may revoke any proxy that is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking
the proxy or by delivering a proxy in accordance with applicable law bearing
a later date to the Secretary of the Corporation.
Section 1.12. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
a. Action.
------
Any action required to be taken at any annual or special meeting of
shareholders of the Corporation, or any action that may be taken at any annual
or special meeting of such shareholders may be taken without a meeting,
without prior notice, and without a vote, if a consent in writing, setting
forth the action so taken, is signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted.
Page 28
<PAGE>
<PAGE>
b. Notice.
------
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those shareholders who have
not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any Section of the
General Corporation Law of Delaware, if such action had been voted on by
shareholders at a meeting thereof, then the certificate filed under such
Section shall state, in lieu of any statement required by such Section
concerning any vote of shareholders, that written notice and written consent
have been given as provided in Section 228 of the General Corporation Law of
Delaware.
ARTICLE II
Board of Directors
SECTION 2.1. NUMBER, QUALIFICATIONS. The Board of Directors shall
consist of that number of directors as are set from time to time by the
affirmative vote of a majority of the members of the Board of Directors. The
Board of Directors shall be divided into three classes, with only a single
class subject to re-election in a given year. Subject to Section 2.2, below,
a director will hold office until the next annual meeting of shareholders at
which his or her class is subject to re-election and until his or her
successor is elected and qualified. Directors need not be shareholders of the
corporation.
SECTION 2.2. ELECTION; RESIGNATION; VACANCIES. The Board of Directors
will initially consist of the persons named as directors in the Certificate of
Incorporation, and each director so elected will hold office until the first
annual meeting of shareholders and until his or her successor is elected and
qualified. At the first annual meeting of shareholders, the shareholders will
elect directors to serve in all three classes of the Board of Directors as
provided by the Certificate of Incorporation. Thereafter, one class of
directors will be elected each year at either an annual or special meeting of
the shareholders to hold office for the period of time designated for that
class. If there is only one nominee for any directorship, it will be in order
to move that the Secretary cast the elective ballot to elect the nominee. A
director may resign at any time on written notice to the Corporation. Any
vacancy occurring in the Board of Directors, whether by reason of death,
resignation, removal, or an increase in the number of directors, may be filled
by the affirmative vote of the majority of the remaining directors, though
less than a quorum of the Board of Directors, or by election at an annual
meeting or at a special meeting of the shareholders called for that purpose.
A director elected to fill a vacancy will be elected for the unexpired term of
his predecessor in office.
SECTION 2.3. REGULAR MEETINGS. A regular meeting of the Board of
Directors for the election of officers and the transaction of any other
Page 29
<PAGE>
<PAGE>
business that may properly come before the meeting shall be held immediately
after, and at the same place as, each annual meeting of shareholders, if a
quorum of directors is then present or as soon thereafter as may be
convenient. Regular meetings of the Board of Directors may be held at such
places within or without the State of Delaware and at such times as the Board
of Directors may from time to time determine. The Board of Directors may
provide, by resolution, the date, time and place for the holding of additional
regular meetings without other notice than such resolution.
SECTION 2.4. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the President or any director.
The person(s) authorized to call special meetings of the Board of Directors
may fix any place, within or without the State of Delaware, to hold a special
meeting of the Board of Directors. Notice of a special meeting must be given
to each director by the person(s) calling the meeting at least two days before
the meeting.
SECTION 2.5. WAIVER OF NOTICE. A director may waive notice of any
meeting. A director's attendance at a meeting shall constitute waiver of
notice of such meeting; provided that, when a director attends a meeting for
the express purpose of objecting to the transaction of any business to be
transacted at the meeting, the director will not be deemed to have waived
notice of such meeting.
SECTION 2.6. TELEPHONIC MEETINGS PERMITTED. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of telephonic conference, or similar
communications equipment that permits all persons participating in the meeting
to hear each other, and participation in a meeting pursuant to this Bylaw will
constitute presence at such meeting.
SECTION 2.7. QUORUM. Vote Required for Action. At all meetings of the
Board of Directors, a majority of the whole Board of Directors will constitute
a quorum for the transaction of business. Unless required by the General
Corporation Law of the State of Delaware, the Certificate of Incorporation or
these Bylaws, the vote of a majority of the directors present at a meeting at
which a quorum is present will be the act of the Board of Directors. If less
than a majority is present at a meeting, a majority of the directors present
may adjourn the meeting from time to time without further notice. Once a
quorum has been established at a duly organized meeting, the Board of
Directors may continue to transact corporate business until adjournment,
notwithstanding the withdrawal of enough members to leave less than a quorum.
SECTION 2.8. PAYMENT OF EXPENSES. By resolution of the Board of
Directors, directors may be paid their expenses, if any, of attendance at each
meeting of the Board of Directors. Directors may be paid also either a fixed
sum for attendance at each meeting of the Board of Directors or a stated
salary as director. Such payment will not preclude any director from serving
the Corporation in any other capacity and receiving compensation therefor.
Page 30
<PAGE>
<PAGE>
SECTION 2.9. DISSENT TO CORPORATE ACTION. A director who is present at
a meeting of the Board of Directors at which action on any corporate matter is
taken shall be presumed to have assented to the action taken unless he or she
(i) enters his or her dissent in the minutes of the meeting, (ii) files
written dissent to such action with the Secretary of the meeting before
adjournment, or (iii) expresses such dissent by written notice to the
Secretary of the Corporation within one (1) day after the adjournment of the
meeting. The right to dissent shall not apply to a director who voted in
favor of such action.
SECTION 2.10. ACTION BY WRITTEN CONSENT. Any action required or
permitted to be taken at a meeting of the Board of Directors may be taken
without a meeting if all members of the Board of Directors sign a written
consent with respect to such action. Such consent shall be filed with the
minutes of proceedings of the Board of Directors.
ARTICLE III
Committees
SECTION 3.1. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one or more
committees, each to consist of one or more of the directors. The Board of
Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting
of the committee. In the absence or disqualification of a member of the
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such
committee, to the extent permitted by the General Corporation Law of the
State of Delaware and to the extent provided in the resolution of the Board
of Directors, will have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to
all papers that may require it.
SECTION 3.2. COMMITTEE RULES. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such
rules, each committee will conduct its business pursuant to Article II of
these Bylaws.
ARTICLE IV
Officers
SECTION 4.1. OFFICERS. The officers of the Corporation are President,
Vice President, Secretary, and Treasurer. Other officers and assistant
Page 31
<PAGE>
<PAGE>
officers may be authorized and elected or appointed by the Board of Directors.
An individual is permitted to hold more than one office.
SECTION 4.2. ELECTION. The officers of the Corporation will be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If the election
of officers is not held at such meeting, it will be held as soon thereafter as
convenient. Each officer will hold office until his or her successor is duly
elected and qualified, or until his or her death, resignation or removal.
SECTION 4.3. REMOVAL. Any officer, elected or appointed, may be removed
by the Board of Directors, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
SECTION 4.4. VACANCY. A vacancy in any office for any reason may be
filled by majority vote of the Board of Directors, and any officer so elected
will serve for the unexpired portion of the term of such office.
SECTION 4.5. PRESIDENT. The President presides at all meetings of the
Board of Directors and of shareholders and has general charge and control over
the affairs of the Corporation subject to the Board of Directors. The
President signs or countersigns all certificates, contracts and other
instruments of the Corporation as authorized by the Board of Directors and
performs such other duties incident to the office or required by the Board of
Directors.
SECTION 4.6. VICE PRESIDENT. The Vice President exercises the functions
of the President in the President's absence, and has such powers and duties as
may be assigned to him or her from time to time by the Board of Directors.
SECTION 4.7. SECRETARY. The Secretary issues all required notices for
meetings of the Board of Directors and of the shareholders, keeps a record of
the minutes of the proceedings of the meetings of the Board of Directors and
of the shareholders, has charge of the Corporate Seal and the corporate books,
and makes such reports and performs such other duties as are incident to the
office or required by the Board of Directors.
SECTION 4.8. TREASURER. The Treasurer has custody of all monies and
securities of the Corporation, keeps regular books of account, disburses the
funds of the Corporation, renders account to the Board of Directors of all
transactions made on behalf of the Corporation and of the financial condition
of the Corporation from time to time as the Board requires, and performs all
duties incident to the office or properly required by the Board of Directors.
SECTION 4.9. ADDITIONAL OFFICERS. The Corporation may have such
additional officers as the Board of Directors deems necessary or appropriate
including, without limitation, a Chairman of the Board, Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, Assistant Vice
Presidents, Assistant Secretaries and Assistant Treasurers. Each such officer
Page 32
<PAGE>
<PAGE>
shall perform those duties as determined or assigned by the Board of
Directors.
SECTION 4.10. SALARIES. The salaries of all officers will be fixed by
the Board of Directors, and may be changed from time to time by a majority
vote of the Board of Directors.
ARTICLE V
Certificate of Shares
SECTION 5.1. CERTIFICATES. Certificates representing shares of the
Corporation will be in the form determined by the Board of Directors, and will
be signed by the Chairman of the Corporation or any officer, certifying the
number of shares owned by him or her in the Corporation. Any of or all the
signatures on the certificate may be a facsimile. If any officer, transfer
agent or registrar who has signed, or whose facsimile signature has been
placed upon, a certificate ceases to hold that position before the certificate
is issued, it may be issued by the Corporation with the same effect as if the
officer, transfer agent or registrar continued to hold that position at the
date of issue.
SECTION 5.2. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF
NEW CERTIFICATES. If a certificate is lost, stolen or destroyed, a new one
may be issued on such terms and indemnity to the Corporation as the Board of
Directors may prescribe.
ARTICLE VI
Indemnification of Directors and Officers
SECTION 6.1. DIRECTORS.
a. Right to Indemnification Insurance.
----------------------------------
Every person who was or is a party to, or is threatened to be made a party to,
or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or she, or a
person of whom he is the legal representative, is or was a director or
officer, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, or as its representative in
another enterprise (an "Indemnitee"), shall be indemnified and held harmless
by the Corporation to the fullest extent legally permissible under the laws of
the State of Delaware against all judgments, fines, penalties, excise taxes,
amounts paid in settlement and costs, charges and expenses (including
attorneys' fees and disbursements) actually and reasonably incurred or
suffered by him or her in connection therewith, subject to the standards of
conduct, the procedures, and other applicable provisions of the General
Corporation Law of the State of Delaware. Such right of indemnification is a
Page 33
<PAGE>
<PAGE>
contract right which may be enforced in any manner desired by such person.
The Corporation may purchase and maintain insurance on behalf of an Indemnitee
against any liability arising out of such status, whether or not the
corporation would have the power to indemnify such person.
b. Inurement.
---------
The right to indemnification shall inure whether or not the claim asserted is
based on matters that predate the adoption of this Article VI, will continue
as to an Indemnitee who has ceased to hold the position by virtue of which he
or she was entitled to indemnification, and will inure to the benefit of his
or her heirs and personal representatives.
c. Non-exclusivity of Rights.
-------------------------
The right to indemnification and to the advancement of expenses conferred by
this Section 6.1 are not exclusive of any other rights that an Indemnitee may
have or acquire under any statute, bylaw, agreement, vote of shareholders or
disinterested directors, this Certificate of Incorporation or otherwise.
d. Advancement of Expenses.
-----------------------
The Corporation shall, from time to time, reimburse or advance to any
Indemnitee the funds necessary for payment of expenses, including attorneys'
fees and disbursements, incurred in connection with defending any proceeding
for which he or she is indemnified by the Corporation, in advance of the final
disposition of such proceeding; provided that, if then required by the General
Corporation Law of the State of Delaware, the expenses incurred by or on
behalf of an Indemnitee may be paid in advance of the final disposition of a
proceedings only upon receipt by the Corporation of an undertaking by or on
behalf of such Indemnitee to repay any such amount so advanced if it is
ultimately determined by a final and unappealable judicial decision that the
Indemnitee is not entitled to be indemnified for such expenses.
SECTION 6.2. OFFICERS, EMPLOYEES AND AGENTS. The Board of Directors
may, on behalf of the Corporation, grant indemnification to any officer,
employee, agent or other individual to such extent and in such manner as the
Board of Directors in its sole discretion may from time to time and at any
time determine, in accordance with the General Corporation Law of the State of
Delaware.
ARTICLE VII
General Provisions
SECTION 7.1. FISCAL YEAR. The fiscal year of the Corporation will be
fixed by the Board of Directors.
SECTION 7.2. AMENDMENTS. These Bylaws may be amended or repealed or new
Page 34
<PAGE>
<PAGE>
Bylaws may be adopted (i) at any regular or special meeting of shareholders at
which a quorum is present or represented, by the vote of the holders of a
majority of the shares entitled to vote in the election of any directors,
provided notice of the proposed alteration, amendment or repeal is contained
in the notice of such meeting; or (ii) by affirmative vote of a majority of
the
Board of Directors at any regular or special meeting thereof.
SECTION 7.3. BOOKS AND RECORDS; EXAMINATION. Any records maintained
by the corporation in the regular course of its business, including its
stock ledger, books of account, and minute books, may be kept on, or be
in any form of information storage, provided that the records can be
converted into clearly legible form within a reasonable time. The books
and records of the Corporation may be kept outside of the State of Delaware.
Except as may otherwise be provided by the General Corporation Law of the
State of Delaware, the Board of Directors will have the power to determine
from time to time whether and to what extent and at what times and places
and under what conditions any of the accounts, records and books of the
Corporation are to be open to the inspection of any shareholder.
SECTION 7.4. DIVIDENDS. Subject to the provisions, if any, of the
General Corporation Law of Delaware and the Certificate of Incorporation,
dividends on the capital shares of the Corporation may be declared by the
Board of Directors at any regular or special meeting. Dividends may be paid
in cash, in property or in shares of the capital stock. Before payment of
any dividend, the Board of Directors may set aside out of any funds of the
Corporation available for dividends such reserves for any purpose that the
directors will think conducive to the interests of the Corporation.
SECTION 7.5. SEAL. The Corporation may or may not have a corporate
seal, as may from time to time be determined by resolution of the Board of
Directors. If a corporate seal is adopted, it will have inscribed thereon the
name of the corporation and the words "Corporate Seal" and "Delaware". The
seal may be used by causing it or a facsimile thereof to be impressed or
affixed or in any manner reproduced or by causing the word {SEAL}, in
brackets, to appear where the seal is required to be impressed or affixed.
Appendix 1
AMENDED 1993 STOCK OPTION PLAN
OF
ZEVEX INTERNATIONAL INC.
ZEVEX INTERNATIONAL, INC., a Nevada corporation (the "Company"), hereby
adopts this Amended 1993 Stock Option Plan of ZEVEX INTERNATIONAL, INC. (the
"Plan"), which amends and restates the 1993 Incentive Stock Option Plan
adopted by the Company on October 28, 1993. Under this Plan, stock, options
Page 35
<PAGE>
<PAGE>
to acquire stock, and/or stock appreciation rights may be granted from time to
time to directors and employees of the Company or its subsidiaries, or others
who contribute to the success of the Company, all on the terms and conditions
set forth herein.
1. Purpose of the Plan.
-------------------
The Plan is intended to aid the Company in maintaining and developing a
management team, attracting qualified employees and directors capable of
assuring the future success of the Company, and rewarding those individuals
who have contributed to the success of the Company. It is designed to aid the
Company in retaining the services of executives and employees and in
attracting new personnel when needed for future operations and growth, and to
provide such personnel with an incentive to remain employees and/or directors
of the Company, to use their best efforts to promote the success of the
Company's business and to provide them with an opportunity to obtain or
increase a proprietary interest in the Company. It is also designed to permit
the Company to reward those individuals who are not employees or directors of
the Company but who are perceived by management as having contributed to the
success of the Company or who are important to the continued business and
operations of the Company. The above aims will be effectuated through the
granting of shares of common stock of the Company (the "Stock"), options
("Options") to purchase shares of the Company's Stock on a favorable basis,
and/or stock appreciation or other rights ("SAR's"), subject to the terms and
conditions of this Plan. It is intended that the Options issued pursuant to
this Plan include, where designated as such at the time of grant, options
which qualify as Incentive Stock Options within the meaning of 422 of the
Internal Revenue Code or any amendment or successor provision thereto
("Incentive Options"). Further, all stock options issued by the Company under
the Company's 1991 Stock Option Plan and the 1996 Non-employee Director's
Stock Option Plan (collectively, the "Prior Plans") shall be subject to the
terms of the Plan, and the Prior Plans shall become of no further force and
effect upon the written consent of each remaining holder of options or other
rights issued under the Prior Plans.
2. Administration of the Plan.
--------------------------
The Plan shall be administered by the Company's Board of Directors (the
"Board") or, in whole or in part, by a committee designated by the Board (the
"Administrator"). Such committee (the "Committee") shall consist of not less
than two (2) persons, all of whom shall be "nonemployee directors" as that
term is defined in Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Subject to the foregoing, the Board
may remove or add members to the Committee and the Board or the remaining
members of the Committee shall fill any vacancies that occur. Additionally,
the Board may at any time terminate the functions of the Committee and
reassume all powers and authority previously delegated to the Committee. Any
director or officer of the Company may from time to time make recommendations
to the Board or Committee with respect to individuals to be considered for an
Page 36
<PAGE>
<PAGE>
award under the Plan and the nature and amount of such award. Any award
approved by the Board or Committee shall be approved by a majority vote of
those members of the Board or Committee, as the case may be, in attendance at
a meeting at which a quorum is present or, if the award under consideration is
to a member of the Board or Committee, by a majority vote of the members of
the Board or Committee in attendance at a meeting at which a quorum is present
who are disinterested with respect to the award under consideration.
The interpretation and construction of the terms of the Plan or any award
under the Plan by the Committee or the Board shall be final and binding on all
participants in the Plan absent a showing of demonstrable error. No member of
the Board or Committee shall be liable for any action taken or determination
made in good faith with respect to the Plan or any award.
3. Shares of Stock Subject to the Plan.
-----------------------------------
A total of 600,000 shares of Stock may be subject to or issued under
awards granted pursuant to the terms of this Plan. Any shares subject to an
Option or other right under the Plan, which Option or right for any reason
expires or is terminated, or is surrendered unexercised as to such shares, may
be reserved for issuance pursuant to future awards under the Plan. If any
right to acquire Stock granted under the Plan is exercised by the delivery of
shares of Stock or the relinquishment of rights to shares of Stock, only the
net shares of Stock issued (the shares of Stock issued less the shares of
Stock surrendered) shall count against the total number of shares reserved for
issuance under the terms of this Plan.
4. Reservation of Stock on Granting of Option.
------------------------------------------
At the time of granting any Option or other right to acquire Stock under
the terms of this Plan, there will be reserved for issuance on the exercise of
the Option or right the number of shares of Stock of the Company subject to
such Option or right. The Company may reserve either authorized but unissued
shares or issued shares that have been reacquired by the Company.
5. Eligibility.
-----------
Awards under the Plan may be granted to directors, officers, and other
employees of the Company or its subsidiaries, as may be existing from time to
time, and to other individuals as may be deemed in the best interest of the
Company by the Board or Committee. Such awards shall be in the amounts, and
shall have the rights and be subject to the restrictions, which are determined
by the Board or the Committee in accordance with the provisions of this Plan.
6. Term of Award and Certain limitations on Right to Exercise Award.
----------------------------------------------------------------
(a) Each award shall have the term established by the Board or
Committee at the time the award is granted.
Page 37
<PAGE>
<PAGE>
(b) The term of the award, once it is granted, may be reduced only
as provided for in this Plan or in the terms of the award.
(c) Unless otherwise specifically provided by the written terms of
the award, no holder or his legal representatives, legatees, or
distributees, will be, or shall be deemed to be, a holder of any shares
subject to an award unless and until the holder exercises his right to
acquire Stock and delivers the required consideration to the Company in
accordance with the terms of this Plan and the provisions of the award.
Unless otherwise specifically provided by the written terms of the award,
no adjustment shall be made for dividends or other rights for which the
record date is prior to the date such Stock is acquired by the holder.
(d) Awards under the Plan shall vest at such time or times and on
such terms as the Board or Committee may determine at the time of the
grant of the award.
(e) If any award is granted to a directors, officer or employee of
the Company and such individual is terminated or resigns from the Company
within six (6) months of such award, the unexercised portion of the award
shall be null and void, and such individual shall have no further rights
thereunder as of the date of such termination or resignation.
(f) Awards granted under the Plan shall contain such other
provisions as the Board or Committee shall deem advisable, including
without limitation (i) further restrictions on the exercise of the
award, (ii) provisions regarding exercise of awards following
termination or death different than provided in Sections 15 and 16, and
(iii) provisions regarding the acceleration of vesting of awards upon
the occurrence of certain events.
(g) In no event may an award be exercised after the expiration of
its term.
7. Payment of Exercise Price.
-------------------------
The exercise of any award shall be contingent on receipt by the Company
of cash, certified bank check to its order, or other consideration acceptable
to the Company; provided that at the discretion of the Board or the Committee,
payment may be made in whole or in part in shares of Stock of the Company,
which Stock shall be valued at its then fair market value as determined by the
Board or Committee, the surrender or cancellation of other rights to Stock of
the Company, or the surrender or cancellation of tandem rights granted with
the award. Any consideration approved by the Company that calls for the
payment of the exercise price over a period of more than one (1) year shall
provide for interest, which shall be included as part of the exercise price,
that is equal to or exceeds the imputed interest provided for in Internal
Revenue Code Section 483 or any amendment or successor section of like tenor.
Page 38
<PAGE>
<PAGE>
8. Withholding.
-----------
If the grant or exercise of an award pursuant to this Plan is subject to
withholding or other trust fund payment requirements of the Internal Revenue
Code or applicable state or local laws, such requirements may, to the extent
permitted by the terms of the award and the then governing provisions of the
Internal Revenue Code, be met by the holder of the award delivering shares of
Stock or canceling options or other rights to acquire Stock or by the Company
withholding shares of Stock subject to the option, all with a fair market
value equal to such requirements.
9. Incentive Options.
-----------------
In addition to the other restrictions and provisions of this Plan and any
award under this Plan, any option granted that is intended to be an Incentive
Option shall meet the following further requirements:
(a) The exercise price of an Incentive Option shall not be less
than the fair market value of the Stock on the date the Incentive Option
is granted as determined by the Board or Committee and permitted by the
applicable provisions of the Internal Revenue Code.
(b) No Incentive Option may be granted under the Plan to any
employee that owns (either of record or beneficially) Stock possessing
more than ten percent (10%) of the combined voting power of the Company
or any parent or subsidiary corporation unless both the exercise price
is at least one hundred and ten percent (110%) of the fair market value
of the Stock on the date the Option is granted and the Incentive Option
by its terms is not exercisable more than five (5) years after the date
it is granted.
(c) Incentive Options may be granted only to employees of the
Company or its subsidiaries, and only in connection with the employee's
employment by the Company or the subsidiary. Notwithstanding the above,
directors may be granted Incentive Options under the Plan, subject to,
and to the extent permitted by, applicable tax statutes and regulations.
(d) The aggregate fair market value (determined as of the date
the Incentive Option is granted) of the shares of Stock with respect
to which Incentive Options are exercisable for the first time by any
individual during any calendar year under the Plan (and all other
Plans of the Company and its subsidiaries) may not exceed $100,000.00.
(e) No Incentive Option shall be transferable other than by will
or the laws of descent distribution, and shall be exercisable during the
lifetime of the optionee, only by the optionee to whom the Incentive
Option is granted.
(f) No stock appreciation rights or other rights can be granted in
Page 39
<PAGE>
<PAGE>
tandem with an Incentive Option.
(g) Any employee acquiring shares of Stock pursuant to any
Incentive Option granted under this Plan shall not sell, transfer or
otherwise convey the Stock until after the date that is both two (2)
years from the date the Incentive Option was granted and one (1) year
from the date the Stock was acquired by the Employee pursuant to the
exercise of the Incentive Option. If any employee makes a disqualifying
disposition, he shall notify the Company within thirty (30) days of such
transaction.
(h) No Incentive Option may be exercised unless the optionee was,
within three (3) months of such exercise, and had been since the date the
Incentive Option was granted, an eligible employee of the Company as
specified in the applicable provisions of the Internal Revenue Code,
unless the optionee dies during such three (3) month period; provided an
Incentive Option may be exercised by any optionee who ceases employment
due to a disability as defined in Internal Revenue Code 22(e)(3), or any
amendment to that section or any successor section of like tenor, within
twelve (12) months of such termination. An authorized absence or leave
approved by the Board or Committee shall not be considered an
interruption of employment for any purpose under the Plan.
(i) All Incentive Options shall be deemed to contain such other
limitations and restrictions as are necessary to conform the Incentive
Option to the requirements for "incentive stock options" as defined in
Section 422 of the Internal Revenue Code, or any amendment or successor
statute of like tenor.
(j) All of the foregoing restrictions and limitations are based on
the governing provisions of the Internal Revenue Code as of the date of
adoption of this Plan. If at any time the Internal Revenue Code is
amended to permit the qualification of an Option as an incentive stock
option without one or more of the foregoing restrictions or limitations
or the terms of such restriction or limitation are modified, the Board or
Committee may issue Incentive Options, and may modify existing Incentive
Options in accordance with the amendments to the Internal Revenue Code,
all to the extent that such action by the Board or Committee does not
disqualify the Incentive Options from treatment as incentive stock
options under the provisions of the Internal Revenue Code.
10. Stock Appreciation Rights and Other Tandem Rights.
-------------------------------------------------
The Board or Committee, at the time of granting any award under the terms
of this Plan, shall have the authority to grant stock appreciation rights or
other tandem rights with respect to all or some of the shares of Stock covered
by such award pursuant to which the holder shall have the right to surrender
all or part of such award and thereby exercise the tandem rights; provided,
however, that the holder shall not have such right to surrender and obtain
Page 40
<PAGE>
<PAGE>
payment during the first six (6) months of the term of the award, except in
the event of death or disability of the holder during such six (6) month
period. Any payment under the terms of the tandem rights may be made by the
Company, at the discretion of the Board or Committee as set forth in the
written award, in Stock (at its fair market value on the date of the notice of
exercise, as determined by the Board or Committee) or in cash, or partly in
such Stock and partly in cash, as the Board or Committee may determine. Any
stock appreciation rights or other tandem rights granted under the terms of
this section may be exercised only when, and only to the extent that, the
holder is entitled to exercise all or a portion of the underlying award. The
terms of any Stock appreciation or other rights granted shall, within the
provisions of this Plan, be established by the Board or Committee at the time
of the grant, and any rights created thereby can only be transferred in
connection with the transfer of the underlying award. Stock appreciation
rights may only be exercised at a time when the fair market value of the Stock
subject to the award exceeds the exercise price of the award.
11. Dilution or Other Adjustment.
----------------------------
In the event that shares of Stock of the Company from time to time issued
and outstanding are increased pursuant to a stock split or a stock dividend,
the number of shares of Stock then covered by each outstanding Option granted
hereunder shall be increased proportionately with no increase in the total
purchase price of the shares then so covered and the number of shares of stock
reserved for the purposes of the Plan shall be increased by the same
proportion. In the event that the shares of Stock of the Company from time to
time issued and outstanding are reduced by a combination or consolidation of
shares, the number of shares of Stock then covered by each outstanding Option
granted hereunder shall be reduced proportionately, with no reduction in the
total purchase price of the shares then so covered and the number of shares of
Stock reserved for the purposes of the Plan shall be reduced by the same
proportion. In the event that the Company should transfer assets to another
corporation and distribute the stock of such other corporation without the
surrender of Stock of the Company, and if such distribution is not taxable as
a dividend and no gain or loss is recognized by reason of Section 355 of the
Internal Revenue Code or a similar section, then the total purchase price of
the Stock then covered by each outstanding Option shall be reduced by an
amount that bears the same ratio to the total purchase price then in effect as
the market value of the stock distributed in respect of a share of the Stock
of the Company, immediately following the distribution, bears to the aggregate
of the market value at such time of a share of the Stock of the Company and
the stock distributed in respect thereof. In the event that the Company
distributes the stock of a subsidiary to its shareholders, makes a
distribution of a major portion of its assets, or otherwise distributes a
significant portion of the value of its issued and outstanding Stock to its
shareholders, the number of shares then subject to each outstanding award and
the Plan may be adjusted, in the discretion of the Board. All such
adjustments shall be made by the Board, whose determination upon the same
shall be final and binding on all participants under the Plan. No fractional
Page 41
<PAGE>
<PAGE>
share shall be issued, and any fractional shares resulting from the
computations pursuant to this section shall be eliminated from the respective
award. No adjustment shall be made for cash dividends or the issuance to
stockholders of rights to subscribe for additional Stock or other securities.
12. Awards to Foreign Nationals.
---------------------------
The Board or Committee may, in order to fulfill the purposes of this Plan
and without amending the Plan, grant awards to foreign nationals or
individuals residing in foreign countries that contain provisions,
restrictions, and limitations different from those set forth in this Plan and
the awards made to United States residents, in order to recognize differences
amongst the countries in law, tax policy, and custom. Such awards shall be
made in an attempt to provide such individuals with essentially the same
benefits as contemplated by an award to United States residents under the
terms of this Plan.
13. Assignment.
----------
No award granted under this Plan shall be transferable other than to a
family member, a trust for the benefit of the holder or a family member, a
charity, or by will or the laws of descent and distribution. If any award is
transferred in accordance with the provisions of this section, it cannot
thereafter be transferred by the new holder, except to reconvey it to the
original holder. Except as permitted by the foregoing, each award granted
under the Plan and the rights and privileges thereby conferred shall not be
transferred, assigned, pledged, or hypothecated in any way (whether by
operation of law or otherwise, and shall not be subject to execution,
attachment, or similar process. On any attempt to transfer, assign, pledge,
hypothecate, or otherwise dispose of the award, or of any right or privilege
conferred thereby, contrary to the provisions hereof, or on the levy of any
attachment or similar process on such rights and privileges, the award and
such rights and privileges shall immediately become null and void.
14. Stock Transfer Restrictions.
---------------------------
All stock issued pursuant to the Plan will be "restricted" securities as
defined in Rule 144 of the Securities Act of 1933, as amended, registration
statements under said Act or pursuant to an exemption therefrom. All
certificates evidencing shares covered by an Option and any securities issued
or placed or exchanged therefor, shall bear a restrictive legend to such
effect. The Company shall be under no obligation to register or assist any
Optionee in registering either the Options or the Stock issuable upon exercise
of the Option under the Federal Securities laws or any state securities laws.
15. Effect of Termination of Employment.
-----------------------------------
In the event that any holder is terminated or resigns from his position
with the Company or a subsidiary within six (6) months of the grant of an
Page 42
<PAGE>
<PAGE>
award, any unexercised portion of such award shall immediately become null and
void, and such holder shall have no further rights thereunder. In the event
that any officer, director, or employee of the Company or a subsidiary is
terminated at any time for, in the determination of the Board, materially
breaching the terms of his employment, gross negligence in the performance of
his duties, substantial failure to meet written standards established by the
Company for the performance of his duties, criminal misconduct, or willful or
gross misconduct in the performance of his duties, the Board may cancel any
and all rights such individual may have in the unexercised portion of any
award held at the time of termination. Except as provided above, the Stock
Option may be exercised within three (3) months of termination; provided,
however, that the Stock Option may be exercised by the Optionee for twelve
(12) months following termination or cessation of employment if termination is
due to a disability as defined in Internal Revenue Code 22(e)(3) or any
amendment to that section or any successor section of like tenor. The Board
or Committee may establish any other restriction on the exercise of award
subsequent to the termination or resignation of any individual that it deems
appropriate at the time of the grant of the award.
16. Death of Optionee.
-----------------
The Stock Options granted under the Plan shall be exercisable during the
Employee's lifetime and until the expiration of twelve (12) months after the
Employee's death, subject to the ten-year limitation described herein.
17. Listing and Registration of Shares.
----------------------------------
Each award shall be subject to the requirement that if at any time the
Board shall determine, in its sole discretion, that it is necessary or
desirable to list, register, or qualify the shares covered thereby on any
securities exchange or under any state or federal law or obtain the consent or
approval of any governmental agency or regulatory body as a condition of, or
in connection with, the granting of such award or the issuance or purchase of
shares thereunder, such award may not be exercised in whole or in part unless
and until such listing, registration, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.
18. Expiration and Termination of the Plan.
--------------------------------------
The Plan may be abandoned or terminated at any time by the Board except
with respect to any awards then outstanding under the Plan. No Incentive
Option shall be granted pursuant to the Plan after the earlier of (i) ten
(10) years after the date the Plan is adopted by the Board; or (ii) ten (10)
years after the date the Plan is approved by the shareholders of the Company.
19. Form of Awards.
--------------
Awards granted under the Plan shall be represented by a written agreement
which shall be executed by the Company and the holder, and which shall contain
Page 43
<PAGE>
<PAGE>
such terms and conditions as may be determined by the Board or Committee and
permitted under the terms of this Plan. Option agreements evidencing
Incentive Options shall contain such terms and conditions, among others, as
may be necessary, in the opinion of the Board or Committee, to qualify them as
Incentive Stock Options under Internal Revenue Code 422 or any amendment or
successor statute of like tenor.
20. Amendment of the Plan.
---------------------
The Board may at any time, and from time to time, modify and amend the
Plan in any respect; provided, however, that no such amendment shall, without
the approval of the shareholders, cause the Plan to no longer comply with the
applicable provisions of the Internal Revenue Code with respect to Incentive
Options.
21. Continuing Compliance with Applicable Law.
-----------------------------------------
Notwithstanding any provision to the contrary contained herein, the
Plan shall be deemed to be automatically amended as is necessary with
respect to the issuance of Incentive Options to maintain the Plan in
compliance with the provisions of Section 422 of the Internal Revenue Code,
and regulations promulgated hereunder from time to time, or any amendment
or successor statute thereto.
DATED this 30th day of September, 1997.
ZEVEX INTERNATIONAL, INC.,
a Nevada corporation
By ----------------------------------
Phillip McStotts, Secretary
CERTIFICATE OF ADOPTION BY SHAREHOLDERS
THE UNDERSIGNED, Phillip McStotts, Secretary of the Corporation, hereby
certifies that the foregoing Amended 1993 Stock Option Plan was approved by
the Corporation's shareholders by written consent effective as of
- ------------------------------, 1997.
-------------------------------
Phillip McStotts, Secretary
Page 44
<PAGE>
<PAGE>
Appendix 2
AGREEMENT AND PLAN OF MERGER
OF ZEVEX INTERNATIONAL, INC., A NEVADA CORPORATION,
AND ZEVEX INTERNATIONAL, INC., A DELAWARE CORPORATION
THIS AGREEMENT AND PLAN OF MERGER, dated as of October 23, 1997 (the
"Agreement") is between ZEVEX International, Inc., a Nevada corporation
("ZEVEX Nevada"), and ZEVEX International, Inc., a Delaware corporation
("ZEVEX Delaware"). ZEVEX Nevada and ZEVEX Delaware are sometimes referred
to herein as the "Constituent Corporations."
R E C I T A L S:
A. ZEVEX Nevada is a corporation duly organized and existing under the
laws of the State of Nevada and has an authorized capital of 5,000,000 shares
of Common Stock, having a par value of $0.04 per share.
B. ZEVEX Delaware is a corporation duly organized and existing under
the laws of the State of Delaware and has an authorized capital of 10,000,000
shares of Common Stock, $0.001 par value, of which 100 shares are issued and
outstanding and are held by ZEVEX Nevada, and 2,000,000 shares of Preferred
Stock, par value $0.001, no shares of which are issued and outstanding.
C. The Board of Directors of ZEVEX Nevada has determined that, for
the purpose of effecting the reincorporation and change of domicile of ZEVEX
Nevada to the State of Delaware, it is advisable that ZEVEX Nevada merge
with and into ZEVEX Delaware upon the terms and conditions herein provided.
D. The respective Boards of Directors of ZEVEX Nevada and ZEVEX
Delaware have approved this Agreement, and the Boards of Directors of ZEVEX
Nevada and ZEVEX Delaware have directed that this Agreement be submitted to
a vote of their shareholders for their approval.
NOW THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the Constituent Corporations hereby agree, subject to the
terms and conditions hereinafter set forth, as follows:
I. MERGER
---------
1.1 Merger.
------
In accordance with the provisions of this Agreement, the Delaware
General Corporation Law ("Delaware Law") and the corporate law of the State
of Nevada ("Nevada Law"), ZEVEX Nevada shall be merged with and into ZEVEX
Delaware (the "Merger") and ZEVEX Delaware shall be, and is herein some-
Page 45
<PAGE>
<PAGE>
times referred to as, the "Surviving Corporation," and the name of the
Surviving Corporation shall be ZEVEX International, Inc."
1.2 Filing and Effectiveness
------------------------
The Merger shall become effective when the following actions shall have
been completed:
(a) This Agreement and the Merger shall have been adopted and
approved by the shareholders of each Constituent Corporation in accordance
with the requirements of Delaware Law and Nevada Law;
(b) All of the conditions precedent to the consummation of the
Merger specified in this Agreement shall have been satisfied or duly waived
by the party entitled to satisfaction thereof;
(c) An executed Certificate of Merger or an executed counterpart
of this Agreement shall have been filed with the Secretary of State of the
State of Delaware; and
(d) An executed Articles of Merger meeting the requirements of
Nevada Law or a counterpart of this Agreement shall have been filed with the
State of Nevada.
The date and time when the Merger shall become effective, as aforesaid,
is herein called the "Effective Date of Merger."
1.3 Certificate of Incorporation
----------------------------
The Certificate of Incorporation of ZEVEX Delaware as in effect
immediately prior to the Effective Date of Merger shall continue in full force
and effect as the Certificate of Incorporation of the Surviving Corporation
until duly amended in accordance with the provisions thereof and applicable
law.
1.4 By-Laws
-------
The By-Laws of ZEVEX Delaware as in effect immediately prior to the
Effective Date of Merger shall continue in full force and effect as the By
Laws of the Surviving Corporation until duly amended in accordance with the
provisions thereof and applicable law.
1.5 Directors and Officers
----------------------
The directors and officers of ZEVEX Delaware immediately prior to the
Effective Date of Merger shall be the directors and officers of the Surviving
Corporation until their successors shall have been elected and qualified or
until otherwise provided by law, the Certificate of Incorporation of the
Surviving Corporation, or the By-Laws of the Surviving Corporation.
Page 46
<PAGE>
<PAGE>
1.6 Effect of Merger
----------------
Upon the Effective Date of Merger, the separate existence of ZEVEX Nevada
shall cease and ZEVEX Delaware, as the Surviving Corporation, (i) shall
continue to possess all of its assets, rights, powers and property as
constituted immediately prior to the Effective Date of Merger, shall be
subject to all actions previously taken by the ZEVEX Nevada Board of Directors
and shall succeed, without other transfer, to all of the assets, rights,
powers and property of ZEVEX Utah in the manner of and as more fully set forth
in Section 259 of Delaware Law, and (ii) shall continue to be subject to all
of its debts, liabilities and obligations as constituted immediately prior to
the Effective Date of Merger and shall succeed, without other transfer, to all
of the debts, liabilities and obligations of ZEVEX Nevada in the same manner
as if ZEVEX Delaware had itself incurred them, all as more fully provided
under the applicable provisions of the Delaware Law and Nevada Law.
II. MANNER OF CONVERSION OF STOCK
---------------------------------
2.1 ZEVEX Nevada Common Stock
-------------------------
Upon the Effective Date of Merger, each share of Common Stock, $0.04 par
value, of ZEVEX Nevada issued and outstanding immediately prior thereto shall,
by virtue of the Merger and without any action by the holder of such shares or
any other person, be converted into and exchanged for one (1) fully paid and
nonassessable share of Common Stock, $0.001 par value, of ZEVEX Delaware, the
Surviving Corporation.
2.2 Options, Warrants, Stock Purchase Rights,
and Other Convertible Securities
-----------------------------------------
Upon the Effective Date of Merger, each outstanding and unexercised
option, warrant and right to purchase ZEVEX Nevada's Stock shall become an
option, warrant, and right to purchase the Surviving Corporation's Common
Stock for each share of ZEVEX Nevada's Stock issuable pursuant to any such
option, warrant, or stock purchase right, on the same terms and conditions
and at an exercise price per share equal to the exercise price applicable
to any such ZEVEX Nevada option, warrant, or right at the Effective Date
of Merger. A number of shares of the Surviving Corporation's Common Stock
shall be reserved for issuance upon the exercise of options, warrants, and
stock purchase rights equal to the adjusted number of shares obtainable
upon the exercise of such options, warrants, and stock purchase rights.
2.3 ZEVEX Delaware Common Stock
---------------------------
Upon the Effective Date of Merger, each share of Common Stock, $0.001
value, of ZEVEX Delaware issued and outstanding immediately prior thereto
shall, by virtue of the Merger and without any action by the holder of such
shares or any other person, be cancelled and returned to the status of
Page 47
<PAGE>
<PAGE>
authorized but unissued shares.
2.4 Exchange of Certificates
------------------------
After the Effective Date of Merger, each holder of an outstanding
certificate representing shares of ZEVEX Nevada Stock may at such
shareholder's option surrender the same for cancellation to the principal
offices of ZEVEX Delaware (or its transfer agent), and each such holder shall
be entitled to receive in exchange therefor a certificate or certificates
representing the number of shares of the Surviving Corporation's Common Stock
into which the surrendered shares were converted as herein provided. Until
so surrendered, each outstanding certificate theretofore representing shares
of ZEVEX Nevada Common Stock shall be deemed for all purposes to represent
the number of shares of the Surviving Corporation's Common Stock into which
such shares of ZEVEX Nevada Common Stock were converted in the Merger.
The registered owner on the books and records of the Surviving
Corporation or the transfer agent of any such outstanding certificate shall,
until such certificate shall have been surrendered for transfer or conversion
of otherwise accounted for to the Surviving Corporation or the transfer agent,
have and be entitled to exercise any voting and other rights with respect to,
and to receive dividends and other distributions upon, the shares of the
Surviving Corporation represented by such outstanding certificate as provided
above.
Each certificate representing Common Stock of the Surviving Corporation
so issued in the Merger shall bear the same legends, if any, with respect to
the restrictions on transferability as the certificates of ZEVEX Nevada so
converted and given in exchange therefor, unless otherwise determined by the
Board of Directors of the Surviving Corporation in compliance with applicable
laws.
If any certificate for shares of ZEVEX Delaware stock is to be issued in
a name other than that in which the certificate surrendered in exchange
therefor is registered, it shall be a condition of issuance thereof that the
certificate so surrendered shall be properly endorsed and otherwise in proper
form for transfer.
2.5 Stock Option Agreements and Warrants
------------------------------------
After the Effective Date of Merger, each holder of an option for ZEVEX
Nevada shares, or a warrant for ZEVEX Nevada shares, may at such option holder
or warrant holder's option surrender the same for cancellation to the
principal offices of ZEVEX Delaware (or its transfer agent), and each such
holder shall be entitled to receive in exchange therefor an option or warrant,
as applicable, representing the number of shares of the Surviving
Corporation's Common Stock to which such option holder or warrant holder is
entitled.
Page 48
<PAGE>
<PAGE>
III. GENERAL
------------
3.1 Covenants of ZEVEX Delaware
---------------------------
ZEVEX Delaware covenants and agrees that it will, on, before or as soon
as practicable after, the Effective Date of Merger:
(a) Qualify to do business as a foreign corporation in the
State of Utah and in connection therewith establish a registered office
and a registered agent as required by the laws of the State of Utah.
(b) File any and all documents with the tax authority of the
State of Nevada necessary for the assumption by ZEVEX Delaware of all the
Nevada state tax liabilities of ZEVEX Nevada.
3.2 Abandonment
-----------
At any time before the Effective Date of Merger, this Agreement may be
terminated and the Merger may be abandoned for any reason whatsoever by the
Board of Directors of either ZEVEX Nevada or ZEVEX Delaware or both,
notwithstanding the approval of this Agreement by the Shareholders of ZEVEX
Nevada or the shareholders of ZEVEX Delaware.
3.3 Amendment
---------
The Boards of Directors of the Constituent Corporations may amend this
Agreement at any time prior to the filing of this Agreement (or a certifi-
cate in lieu thereof) with the Secretary of State of the State of Delaware,
provided that an amendment made subsequent to the adoption of the Agreement
by the shareholders of either Constituent Corporation shall not: (1) alter
or change the amount or kind of shares, securities, cash, property and/or
rights to be received in exchange for or on conversion of all or any of the
shares of any class or series thereof of such Constituent Corporation,
(2) alter or change any term of the Certificate of Incorporation of the
Surviving Corporation to be effected by the Merger, or (3) alter or change any
of the terms and conditions of this Agreement if such alteration or change
would adversely affect the holders of any class or series thereof of such
Constituent Corporation.
3.4 Registered Office
-----------------
The registered office of the Surviving Corporation in the State of
Delaware is located at Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801, and the Corporation Trust Company is the
registered agent of the Surviving Corporation at such address.
Page 49
<PAGE>
<PAGE>
3.5 Agreement
---------
Executed copies of this Agreement shall be on file at the principal place
of business of the Surviving Corporation at 4314 ZEVEX Park Lane, Murray, Utah
84123, and copies thereof will be furnished to any shareholder of each
Constituent Corporation upon request and without cost.
3.6 Governing Law
-------------
This Agreement shall in all respects be construed, interpreted and
enforced in accordance with and governed by the laws of the State of Delaware,
and, so far as applicable, the merger provisions of the corporate laws of the
State of Nevada.
3.7 Counterparts
------------
In order to facilitate the filing and recording of this Agreement, the
same may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, this Agreement, having first been approved by
resolution of the Boards of Directors of ZEVEX Nevada and ZEVEX Delaware, is
hereby executed on behalf of each such two corporations, on the date first set
forth above.
ZEVEX INTERNATIONAL, INC. ZEVEX INTERNATIONAL, INC.
a Delaware corporation a Nevada corporation
/s/ Dean G. Constantine /s/ Dean G. Constantine
By:------------------------------------- By:---------------------------------
Dean G. Constantine, President Dean G. Constantine, President
and Chief Executive Officer and Chief Executive Officer
Page 50
<PAGE>
<PAGE>
