Registration No. 33-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
VASOMEDICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2871434
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
180 Linden Avenue, Westbury, New York 11590
(Address of principal executive offices) (Zip Code)
VASOMEDICAL, INC. 1997 STOCK OPTION PLAN
(Full title of the plan)
Anthony Viscusi, President
Vasomedical, Inc.
180 Linden Avenue
Westbury, New York 11590
(Name and address of agent for service)
(516) 997-4600
(Telephone number, including area code, of agent for service)
copy to:
David H. Lieberman, Esq.
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
(516) 822-4820
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price per aggregate offering Amount of
to be registered registered security (1) price (1) registration fee
<S> <C> <C> <C> <C>
Common Stock,
par value $.001 1,800,000 shs. (2) $1.344 $2,419,000 $714
per share
=============================================================================================================
<FN>
(1) Estimated solely for the purpose of calculating the registration fee, based upon the average of the
high and low prices of the Company's Common Stock reported on Nasdaq on July 23, 1998.
(2) The Registration Statement also covers an indeterminate number of additional shares of Common Stock that
may become issuable pursuant to anti-dilution and adjustment provisions of the Plan.
</FN>
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The Registrant hereby incorporates by reference into this Registration
Statement the documents listed below:
(a) The Registrant's Annual Report on Form 10-K for the
fiscal year ended May 31, 1998.
(b) The description of the class of securities to be offered
which is contained in a registration statement filed under
Section 12 of the Securities Exchange Act of 1934, including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all such securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Under the provisions of the bylaws of Registrant, each person who is
or was a director or officer of Registrant shall be indemnified by Registrant as
of right to the full extent permitted or authorized by the General Corporation
Law of Delaware.
Under such law, to the extent that such person is successful on the
merits of defense of a suit or proceeding brought against him by reason of the
fact that he is a director or officer of Registrant, he shall be indemnified
against expenses (including attorneys' fees) reasonably incurred in connection
with such action.
If unsuccessful in defense of a third-party civil suit or a criminal
suit is settled, such a person shall be indemnified under such law against both
(1) expenses (including attorneys' fees) and (2) judgments, fines and amounts
paid in settlement if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of Registrant, and with
respect to any criminal action, had no reasonable cause to believe his conduct
was unlawful.
<PAGE>
If unsuccessful in defense of a suit brought by or in the right of
Registrant, or if such suit is settled, such a person shall be indemnified under
such law only against expenses (including attorneys' fees) incurred in the
defense or settlement of such suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of
Registrant except that if such a person is adjudicated to be liable in such suit
for negligence or misconduct in the performance of his duty to Registrant, he
cannot be made whole even for expenses unless the court determines that he is
fairly and reasonably entitled to be indemnified for such expenses.
The officers and directors of the Company are covered by officers' and
directors' liability insurance. The policy coverage is $5,000,000, which
includes reimbursement for costs and fees. There is a maximum aggregate
deductible for each loss under the policy of $75,000. The Company has entered
into Indemnification Agreements with each of its officers and directors. The
Agreements provide for reimbursement for all direct and indirect costs of any
type or nature whatsoever (including attorneys' fees and related disbursements)
actually and reasonably incurred in connection with either the investigation,
defense or appeal of a Proceeding, as defined, including amounts paid in
settlement by or on behalf of an Indemnitee.
Item 7. Exemption from registration claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
4 1997 Stock Option Plan
5 Opinion and consent of Blau, Kramer, Wactlar & Lieberman, P.C.
23.1 Consent of Blau, Kramer, Wactlar & Lieberman, P.C. - included in
their opinion filed as Exhibit 5
23.2 Consent of Grant Thornton LLP
24 Power of Attorney
Item 9. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement; provided, however, that paragraphs
(a)(l)(i) and (a)(l)(ii) do not apply if the registration
statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
<PAGE>
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf thereunto duly authorized, in Westbury, New
York on the 3rd day of August, 1998.
VASOMEDICAL, INC.
By: /s/ Anthony Viscusi
-----------------------
Anthony Viscusi, President and Chief Executive
Officer and Director (Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Anthony Viscusi and Joseph A. Giacalone, and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
indicated on August 3, 1998.
Signatures Title
- ---------- -----
/s/ Alexander G. Bearn Director
- ----------------------
Alexander G. Bearn
/s/ David S. Blumenthal Director
- -----------------------
David S. Blumenthal
/s/ Francesco Bolgiani Director
- ----------------------
Francesco Bolgiani
/s/ Abraham E. Cohen Chairman of the Board
- --------------------
Abraham E. Cohen
/s/ Joseph A. Giacalone Secretary and Treasurer (Principal
- ----------------------- Financial and Accounting Officer)
Joseph A. Giacalone
/s/ John C.K. Hui Director
- -----------------
John C. K. Hui
/s/ Kenneth W. Rind Director
- -------------------
Kenneth W. Rind
/s/ E. Donald Shapiro Director
- ---------------------
E. Donald Shapiro
/s/ Anthony Viscusi President, Chief Executive Officer and
- ------------------- Director (Principal Executive Officer)
Anthony Viscusi
/s/ Zhen-sheng Zheng Director
- --------------------
Zhen-sheng Zheng
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Vasomedical, Inc.
Form S-8 Registration Statement
E X H I B I T I N D E X
Page No. in Sequential
Exhibit Numbering of all Pages,
Number Exhibit Description including Exhibit Pages
- -----------------------------------------------------------------------------
4 1997 Stock Option Plan. . . . . . . . . . . . . .
5 Opinion and Consent of Counsel. . . . . . . . . .
23.1 Consent of Counsel . . . . . . . . . . . . . . . See Exhibit 5
23.2 Consent of Grant Thornton LLP . . . . . . . . . .
24 Powers of Attorney . . . . . . . . . . . . . . . See signature page
EXHIBIT 4
VASOMEDICAL, INC.
1997 STOCK OPTION PLAN
----------------------
SECTION 1. GENERAL PROVISIONS
------------------
1.1. Name and General Purpose
------------------------
The name of this plan is the Vasomedical, Inc. 1997 Stock Option Plan
(hereinafter called the "Plan"). The purpose of the Plan is to enable
Vasomedical, Inc. (the "Company") and its subsidiaries and affiliates to foster
and promote the interests of the Company by attracting and retaining directors,
officers, consultants and employees of the Company who contribute to the
Company's success by their ability, ingenuity and industry, to enable such
officers and employees of the Company to participate in the long-term success
and growth of the Company by giving them a proprietary interest in the Company
and to provide incentive compensation opportunities competitive with those of
competing corporations.
1.2 Definitions
-----------
a. "Affiliate" means any person or entity controlled by or under
common control with the Company, by virtue of the ownership of
voting securities, by contract or otherwise.
b. "Board" means the Board of Directors of the Company.
c. "Change in Control" means a change of control of the Company, or
in any person directly or indirectly controlling the Company,
which shall mean:
(a) a change in control as such term is presently defined in
Regulation 240.12b-(f) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"); or
(b) if any "person" (as such term is used in Section 13(d) and
14(d) of the Exchange Act) other than the Company or any "person"
who on the date of this Agreement is a director or officer of the
Company, becomes the "beneficial owner" (as defined in Rule
13(d)-3 under the Exchange Act) directly or indirectly, of
securities of the Company representing twenty percent (20%) or
more of the voting power of the Company's then outstanding
securities; or
(c) if during any period of two (2) consecutive years during the
term of this Plan, individuals who at the beginning of such
period constitute the Board of Directors, cease for any reason to
constitute at least a majority thereof.
d. "Code" means the Internal Revenue Code of 1986, as amended.
e. "Committee" means the Committee referred to in Section 1.3 of the
Plan.
f. "Common Stock" means shares of the Common Stock, par value $.001
per share, of the Company.
g. "Company" means Vasomedical, Inc., a corporation organized under
the laws of the State of Delaware (or any successor corporation).
h. "Fair Market Value" means the market price of the Common Stock on
the NASDAQ consolidated reporting system on the date of the grant
or on any other date on which the Common Stock is to be valued
hereunder. If no sale shall have been reported on the NASDAQ
consolidated reporting system on such date, Fair Market Value
shall be determined by the Committee in accordance with the
Treasury Regulations applicable to incentive stock options under
Section 422 of the Code.
<PAGE>
i. "Incentive Stock Option" means an Incentive Stock Option as
described in Section 2.1 of the Plan.
j. "Non-Employee Director" shall have the meaning set forth in Rule
16(b) promulgated by the Securities and Exchange Commission
("Commission").
k. "Non-Qualified Stock Option" means a Non-Qualified Stock Option
as described in Section 2.1 of the Plan.
l. "Option" means any option to purchase Common Stock under Section
2 of the plan.
m. "Participant" means any director, officer, consultant or employee
of the Company, a Subsidiary or an Affiliate who is selected by
the Committee to participate in the Plan.
n. "Subsidiary" means any corporation in which the Company possesses
directly or indirectly 50% or more of the combined voting power
of all classes of stock of such corporation.
o. "Total Disability" means accidental bodily injury or sickness
which wholly and continuously disabled an Optionee. The
Committee, whose decisions shall be final, shall make a
determination of Total Disability.
1.3 Administration of the Plan
--------------------------
The Plan shall be administered by the Committee appointed by the Board
consisting of two or more members of the Board all of whom shall be Non-Employee
Directors. The Committee shall serve at the pleasure of the Board and shall have
such powers as the Board may, from time to time, confer upon it.
Subject to this Section 1.3, the Committee shall have sole and complete
authority to adopt, alter, amend or revoke such administrative rules, guidelines
and practices governing the operation of the Plan as it shall, from time to
time, deem advisable, and to interpret the terms and provisions of the Plan.
The Committee shall keep minutes of its meetings and of action taken by it
without a meeting. A majority of the Committee shall constitute a quorum, and
the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved in writing by all of the members of the Committee
without a meeting, shall constitute the acts of the Committee.
1.4 Eligibility
-----------
Stock options may be granted only to officers, directors, consultants and
employees of the Company or a Subsidiary or Affiliate. Subject to Section 2.3,
any person who has been granted any Option may, if he is otherwise eligible, be
granted an additional Option or Options.
1.5 Shares
------
The aggregate number of shares reserved for issuance pursuant to the Plan
shall be 1,800,000 shares of Common Stock, or the number and kind of shares of
stock or other securities which shall be substituted for such shares or to which
such shares shall be adjusted as provided in Section 1.6. No individual may be
granted options to purchase more than an aggregate of 300,000 shares of Common
Stock pursuant to the Plan.
The aggregate number of shares may be set aside out of the authorized but
unissued shares of Common Stock or out of issued shares of Common Stock acquired
for and held in the Treasury of the Company, not reserved for any other purpose.
Shares subject to, but not sold or issued under, any Option terminating or
expiring for any reason prior to its exercise in full will again be available
for Options thereafter granted during the balance of the term of the Plan.
<PAGE>
1.6 Adjustments Due to Stock Splits, Mergers, Consolidation, Etc.
-------------------------------------------------------------
If, at any time, the Company shall take any action, whether by stock
dividend, stock split, combination of shares or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, the number of shares which are reserved for
issuance under the Plan and the number of shares which, at such time, are
subject to Options shall, to the extent deemed appropriate by the Committee, be
increased or decreased in the same proportion, provided, however, that the
Company shall not be obligated to issue fractional shares.
Likewise, in the event of any change in the outstanding shares of Common
Stock by reason of any recapitalization, merger, consolidation, reorganization,
combination or exchange of shares or other corporate change, the Committee shall
make such substitution or adjustments, if any, as it deems to be appropriate, as
to the number or kind of shares of Common Stock or other securities which are
reserved for issuance under the Plan and the number of shares or other
securities which, at such time are subject to Options.
In the event of a Change in Control, at the option of the Board or
Committee, (a) all options outstanding on the date of such Change in Control
shall, for a period of sixty (60) days following such Change in Control, become
immediately and fully exercisable, and (b) an Optionee will be permitted to
surrender for cancellation within sixty (60) days after such Change in Control
any option or portion of an option which was granted more than six (6) months
prior to the date of such surrender, to the extent not yet exercised, and to
receive a cash payment in an amount equal to the excess, if any, of the Fair
Market Value (on the date of surrender) of the shares of Common Stock subject to
the option or portion thereof surrendered, over the aggregate purchase price for
such Shares under the option.
1.7 Non-Alienation of Benefits
--------------------------
Except as herein specifically provided, no right or unpaid benefit under
the Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or other person entitled to benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease.
1.8 Withholding or Deduction for Taxes
----------------------------------
If, at any time, the Company or any Subsidiary or Affiliate is required,
under applicable laws and regulations, to withhold, or to make any deduction for
any taxes, or take any other action in connection with any Option exercise, the
Participant shall be required to pay to the Company or such Subsidiary or
Affiliate, the amount of any taxes required to be withheld, or, in lieu thereof,
at the option of the Company, the Company or such Subsidiary or Affiliate may
accept a sufficient number of shares of Common Stock to cover the amount
required to be withheld.
1.9 Administrative Expenses
-----------------------
The entire expense of administering the Plan shall be borne by the Company.
<PAGE>
1.10 General Conditions
------------------
a. The Board or the Committee may, from time to time, amend, suspend or
terminate any or all of the provisions of the Plan, provided that,
without the Participant's approval, no change may be made which would
prevent an Incentive Stock Option granted under the Plan from
qualifying as an Incentive Stock Option under Section 422 of the Code
or result in a "modification" of the Incentive Stock Option under
Section 424(h) of the Code or otherwise alter or impair any right
theretofore granted to any Participant ; and further provided that,
without the consent and approval of the holders of a majority of the
outstanding shares of Common Stock of the Company present at a meeting
at which a quorum exists, neither the Board nor the Committee may make
any amendment which (i) changes the class of persons eligible for
options; (ii) increases (except as provided under Section 1.6 above)
the total number of shares or other securities reserved for issuance
under the Plan; (iii) decreases the minimum option prices stated in
Section 2.2 hereof (other than to change the manner of determining
Fair Market Value to conform to any then applicable provision of the
Code or any regulation thereunder); (iv) extends the expiration date
of the Plan, or the limit on the maximum term of Options; or (v)
withdraws the administration of the Plan from a committee consisting
of two or more members, each of whom is a Non-Employee Director.
b. With the consent of the Participant affected thereby, the Committee
may amend or modify any outstanding Option in any manner not
inconsistent with the terms of the Plan, including, without
limitation, and irrespective of the provisions of Sections 2.3(c) and
2.4(b) below, to accelerate the date or dates as of which an
installment of an Option becomes exercisable.
c. Nothing contained in the Plan shall prohibit the Company or any
Subsidiary or Affiliate from establishing other additional incentive
compensation arrangements for employees of the Company or such
Subsidiary or Affiliate.
d. Nothing in the Plan shall be deemed to limit, in any way, the right of
the Company or any Subsidiary or Affiliate to terminate a
Participant's employment with the Company (or such Subsidiary or
Affiliate) at any time.
e. Any decision or action taken by the Board or the Committee arising out
of or in connection with the construction, administration,
interpretation and effect of the Plan shall be conclusive and binding
upon all Participants and any person claiming under or through any
Participant.
f. No member of the Board or of the Committee shall be liable for any act
or action, whether of commission or omission, (i) by such member
except in circumstances involving actual bad faith, nor (ii) by any
other member or by any officer, agent or employee.
1.11 Compliance with Applicable Law
------------------------------
Notwithstanding any other provision of the Plan, the Company shall not be
obligated to issue any shares of Common Stock, or grant any Option with respect
thereto, unless it is advised by counsel of its selection that it may do so
without violation of the applicable Federal and State laws pertaining to the
issuance of securities and the Company may require any stock certificate so
issued to bear a legend, may give its transfer agent instructions limiting the
transfer thereof, and may take such other steps, as in its judgment are
reasonably required to prevent any such violation.
1.12 Effective Dates
---------------
The Plan was adopted by the Board on August 7, 1997, subject to approval by
the stockholders of the Company. The Plan shall terminate on August 6, 2007.
<PAGE>
Section 2. OPTION GRANTS
-------------
2.1 Authority of Committee
----------------------
Subject to the provisions of the Plan, the Committee shall have the sole
and complete authority to determine (i) the Participants to whom Options shall
be granted; (ii) the number of shares to be covered by each Option; and (iii)
the conditions and limitations, if any, in addition to those set forth in
Sections 2 and 3 hereof, applicable to the exercise of an Option, including
without limitation, the nature and duration of the restrictions, if any, to be
imposed upon the sale or other disposition of shares acquired upon exercise of
an Option.
Stock options granted under the Plan may be of two types: an incentive
stock option ("Incentive Stock Option"); and a non-qualified stock option
("Non-Qualified Stock Option").
It is intended that the Incentive Stock Options granted hereunder shall
constitute incentive stock options within the meaning of Section 422 of the Code
and shall be subject to the tax treatment described in Section 422 of the Code.
Anything in the Plan to the contrary notwithstanding, no provision of the
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify either the Plan or, without the consent of the
Optionee, any Incentive Stock Option under Section 422 of the Code.
The Committee shall have the authority to grant Incentive Stock Options, or
to grant Non-Qualified Stock Options, or to grant both types of Options. To the
extent that any Option does not qualify as an Incentive Stock Option, in whole
or in part, it shall constitute a separate Non-Qualified Stock Option to the
extent of such disqualification.
2.2 Option Exercise Price
---------------------
The price of stock purchased upon the exercise of Options granted pursuant
to the Plan shall be the Fair Market Value thereof at the time that the Option
is granted.
If an employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of the stock of the Company or any parent
corporation of the Company or Subsidiary and an Option granted to such employee
is intended to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Code, the exercise price shall be no less than 110% of the
Fair Market Value of the Common Stock on the date the Option is granted. The
purchase price is to be paid in full in cash, certified or bank cashier's check
or, at the option of the Company, Common Stock valued at its Fair Market Value
on the date of exercise, or a combination thereof, when the Option is exercised
and stock certificates will be delivered only against such payment.
2.3 Incentive Stock Option Grants
-----------------------------
Each Incentive Stock Option will be subject to the following provisions:
a. Term of Option
--------------
An Incentive Stock Option will be for a term of not more than ten years
from the date of grant, except in the case of an employee described in
the second paragraph of Section 2.2 above in which case an Incentive
Stock Option will be for a term of not more than five years from the
date of the grant.
<PAGE>
b. Annual Limit
------------
To the extent the aggregate Fair Market Value of the Common Stock
(determined as of the date of grant) with respect to which any options
granted hereunder are intended to be designated as Incentive Stock
Options under the Plan (or any other incentive stock option plan of the
Company or any Subsidiary) which may be exercisable for the first time
by the Optionee in any calendar year exceeds $100,000, such options
shall not be considered incentive stock options.
c. Exercise
--------
Subject to the power of the Committee under Section 1.10(b) above and
except in the manner described below upon the death of the Optionee, an
Incentive Stock Option may be exercised as follows: up to one-third of
the subject shares on or after the first anniversary of the date of
grant of such Option; up to two-thirds of the subject shares on or
after the second anniversary of the date of grant of such Option and up
to all of the subject shares on and after the third such anniversary of
the date of the grant of such Option but in no event later than the
expiration of the term of the Option.
An Incentive Stock Option shall be exercisable during the Optionee's
lifetime only by the Optionee and shall not be exercisable by the
Optionee unless, at all times since the date of grant and at the time
of exercise, such Optionee is an employee of the Company, any parent
corporation of the Company or any Subsidiary, except that, upon
termination of all employment (other than by death or by Total
Disability followed by death in the circumstances provided below) with
the Company, any parent corporation of the Company and any Subsidiary
or Affiliate, the Optionee may exercise an Incentive Stock Option at
any time within three months thereafter but only to the extent such
Option is exercisable on the date of such termination.
Upon termination of all employment by Total Disability, the Optionee
may exercise such options at any time within one year thereafter, but
only to the extent such options are exercisable on the date of such
termination.
If termination of employment is the result of the Optionee having
reached normal retirement age, option grants continue to be exercisable
for five years after retirement but in no event later than the
expiration of the term of the Option.
In the event of the death of an Optionee (i) while an employee of the
Company, any parent corporation of the Company or any Subsidiary or
Affiliate, or (ii) within three months after termination of all
employment with the Company, any parent corporation of the Company and
any Subsidiary or Affiliate (other than for Total Disability) or (iii)
within one year after termination on account of Total Disability of all
employment with the Company, any parent corporation of the Company and
any Subsidiary, such Optionee's estate or any person who acquires the
right to exercise such option by bequest or inheritance or by reason of
the death of the Optionee may exercise such Optionee's Option at any
time within the period of three years from the date of death. In the
case of clauses (i) and (iii) above, such Option shall be exercisable
in full for all the remaining shares covered thereby, but in the case
of clause (ii) such Option shall be exercisable only to the extent it
was exercisable on the date of such termination.
Notwithstanding the foregoing provisions regarding the exercise of an
Option in the event of death, Total Disability or other termination of
employment, in no event shall an Option be exercisable in whole or in
part after the termination date provided in the Option.
d. Transferability
---------------
An Incentive Stock Option granted under the Plan shall not be
transferable otherwise than by will or by the laws of descent and
distribution.
<PAGE>
2.4 Non-Qualified Stock Option Grants
---------------------------------
Each Non-Qualified Stock Option will be subject to the following
provisions:
a. Term of Option
--------------
A Non-Qualified Stock Option will be for a term of not more than ten
years from the date of grant.
b. Exercise
--------
The exercise of a Non-Qualified Stock Option shall be subject to the
same terms and conditions as provided under Section 2.3(c) above,
except that upon termination of all employment by Total Disability, the
Optionee may exercise such options at any time within three years after
termination on account of Total Disability of all employment with the
Company, or any Subsidiary or Affiliate.
c. Transferability
---------------
A Non-Qualified Stock Option granted under the Plan shall not be
transferable otherwise than by will or by the laws of descent and
distribution, except as may be permitted by the Board or Committee.
2.5 Agreements
----------
In consideration of any Options granted to a Participant under the Plan,
each such Participant shall enter into an Option Agreement with the Company
providing, consistent with the Plan, such terms as the Committee may deem
advisable.
Exhibit 5
[Blau, Kramer, Wactlar & Lieberman, P.C. letterhead]
July 31, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Vasomedical, Inc.
Registration Statement on Form S-8
----------------------------------
Gentlemen:
Reference is made to the filing by Vasomedical, Inc. (the "Corporation")
of a Registration Statement on Form S-8 with the Securities and Exchange
Commission pursuant to the provisions of the Securities Act of 1933, as amended,
covering the registration of 1,800,000 shares of the Corporation's Common Stock,
$.001 par value per share, in connection with the Corporation's 1997 Stock
Option Plan (the "Plan").
As counsel for the Corporation, we have examined its corporate records,
including its Certificate of Incorporation, as amended, By-Laws, its corporate
minutes, the form of its Common Stock certificate, the Plan, related documents
under the Plan and such other documents as we have deemed necessary or relevant
under the circumstances.
Based upon our examination, we are of the opinion that:
1. The Corporation is duly organized and validly existing under the laws of
the State of Delaware.
2. There have been reserved for issuance by the Board of Directors of the
Corporation 1,800,000 shares of its Common Stock, $.001 par value per share. The
shares of the Corporation's Common Stock, when issued pursuant to the Plan, will
be validly authorized, legally issued, fully paid and non-assessable.
We hereby consent to be named in the Registration Statement and in the
Prospectus which constitutes a part thereof as counsel of the Corporation, and
we hereby consent to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Very truly yours,
/s/ Blau, Kramer, Wactlar & Lieberman, P.C.
BLAU, KRAMER, WACTLAR &
LIEBERMAN, P.C.
Exhibit 23.2
Consent of Independent Certified Public Accountants
We have issued our report dated July 28, 1998, accompanying the consolidated
financial statements of Vasomedical, Inc. and Subsidiary included in the Annual
Report on Form 10-K for the year ended May 31, 1998 which is incorporated by
reference in this Registration Statement. We consent to the incorporation by
reference in the Registration Statement of the aforementioned report.
/s/ Grant Thornton LLP
GRANT THORNTON LLP
Melville, New York
July 31, 1998
