<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 28, 1998
REGISTRATION NO. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------------------
INTERPORE INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-3043318
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
--------------------------------------------
181 TECHNOLOGY DRIVE
IRVINE, CALIFORNIA 92618-2402
(Address of Principal Executive Offices including Zip Code)
--------------------------------------------
CROSS MEDICAL PRODUCTS, INC. AMENDED AND RESTATED
1994 STOCK OPTION PLAN;
THE DANNINGER MEDICAL TECHNOLOGY, INC.
1984 INCENTIVE STOCK OPTION PLAN; AND
THE DANNINGER MEDICAL TECHNOLOGY, INC. 1984
NON-STATUTORY STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
--------------------------------------------
RICHARD L. HARRISON COPY TO:
SENIOR VICE PRESIDENT REGINA M. SCHLATTER, ESQ.
AND CHIEF FINANCIAL OFFICER CHARLES K. RUCK, ESQ.
INTERPORE INTERNATIONAL, INC. LATHAM & WATKINS
181 TECHNOLOGY DRIVE 650 TOWN CENTER DRIVE, TWENTIETH FLOOR
IRVINE, CALIFORNIA 92618-2402 COSTA MESA, CALIFORNIA 92626
(949) 453-3200 (714) 540-1235
--------------------------------------------
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
---------- ------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock 894,765 $4.782 $4,278,767 $1,263
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h). The Proposed Maximum Offering Price Per Share
is the weighted average exercise price of the outstanding options to
purchase the shares being registered pursuant hereto.
PROPOSED SALE TO TAKE PLACE AS SOON AFTER THE EFFECTIVE DATE OF THE REGISTRATION
STATEMENT AS OUTSTANDING OPTIONS ARE EXERCISED.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information called for in Part I of the Form S-8 is not being filed
with or included in this Form S-8 (by incorporation by reference or otherwise)
in accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Interpore International, Inc. (the
"Company") with the Commission are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1998;
(c) The Company's Current Report on Form 8-K filed with the
Commission on February 17, 1998;
(d) The Company's Current Report on Form 8-K filed with the
Commission on May 15, 1998; and
(e) The description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A filed with the
Commission (File No. 000-22958).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), after the date of this Registration Statement and prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
of it from the respective dates of filing such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The consolidated financial statements of Interpore International, Inc.
appearing in the Company's Annual Report on (Form 10-K) for the year ended
December 31, 1997 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. The consolidated financial statements of Cross Medical Products, Inc.
appearing in the Annual Report on Form 10-K for the year ended December 31, 1997
of Cross Medical Products, Inc. have been audited by Coopers & Lybrand L.L.P.,
independent auditors as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
2
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the Delaware General Corporation Law permits a
Delaware corporation to limit the personal liability of its directors in
accordance with the provisions set forth therein. The Certificate of
Incorporation, as amended, of the Company provides that the personal liability
of its directors shall be limited to the fullest extent permitted by applicable
law.
Section 145 of the Delaware General Corporation Law contains provisions
permitting corporations to indemnify any person who is or was a director,
officer, employee or agent of the corporation, or who is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, in
accordance with the provisions set forth therein. The Bylaws of the Company
generally provide for indemnification of such persons to the fullest extent
allowed by applicable law.
The inclusion of the above provisions in the Certificate of
Incorporation may have the effect of reducing the likelihood of stockholder
derivative suits against directors and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty of
care, even though such an action, if successful, might otherwise have benefited
the Company and its stockholders.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See Index to Exhibits on page 6.
ITEM 9. UNDERTAKINGS
(a) The Company 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, as amended (the "Securities
Act");
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this 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 this Registration Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
termination of the offering.
3
<PAGE> 4
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for expenses incurred or paid by a
director, officer or controlling person of the Company 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
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on May 27, 1998.
INTERPORE INTERNATIONAL, INC.
By: /s/ David C. Mercer
-------------------------------------------
David C. Mercer, Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and appoints
David C. Mercer and Richard L. Harrison as attorneys-in-fact and agents, each
acting alone, with full powers of substitution to sign on his behalf,
individually and in the capacities stated below, and to file any and all
amendments, including post-effective amendments, to this registration statement
and other documents in connection therewith, with the Securities and Exchange
Commission, granting to said attorneys-in-fact and agents full power and
authority to perform any other act on behalf of the undersigned required to be
done.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David C. Mercer Chairman of the Board and Chief Executive May 27, 1998
- ------------------------------------------- Officer (Principal Executive Officer)
David C. Mercer
/s/ Joseph A. Mussey Director, President and Chief Operating Officer May 27, 1998
- -------------------------------------------
Joseph A. Mussey
/s/ Richard L. Harrison Senior Vice President and Chief Financial May 27, 1998
- ------------------------------------------- Officer (Principal Financial Officer)
Richard L. Harrison
/s/ William A. Eisenecher Director May 27, 1998
- -------------------------------------------
William A. Eisenecher
/s/ Daniel A. Funk Director May 27, 1998
- -------------------------------------------
Daniel A. Funk
/s/ G. Bradford Jones Director May 27, 1998
- -------------------------------------------
G. Bradford Jones
/s/ Robert J. Williams Director May 27, 1998
- -------------------------------------------
Robert J. Williams
</TABLE>
5
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
- ------- ----
<S> <C> <C>
4.1 Certificate of Incorporation. (Note i)
5.1 Opinion of Latham & Watkins. 7
10.1 Danninger Medical Technology, Inc. 1984 Non-Statutory Stock Option Plan 8
10.2 Danninger Medical Technology, Inc. 1984 Incentive Stock Option Plan 11
10.3 Cross Medical Products Inc. Amended and Restated 1994 Stock Option Plan. 15
23.1 Consent of Latham & Watkins (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP. 20
23.3 Consent of Coopers & Lybrand L.L.P. 21
24 Power of Attorney (included in the signature page to this Registration Statement).
</TABLE>
(i) Incorporated by reference to Annex VII of the Company's Registration
Statement on Form S-4 (No. 333-49487).
6
<PAGE> 1
Exhibit 5.1
[LATHAM & WATKINS LETTERHEAD]
May 27, 1998
Interpore International, Inc.
181 Technology Drive
Irvine, California 92618-2402
Attn: Board of Directors
Re: Registration Statement on Form S-8
Gentlemen:
This opinion is rendered in connection with the filing by Interpore
International, Inc., a Delaware corporation (the "Company"), of a registration
statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, with respect
to the offer and sale of up to 894,765 shares of the Company's Common Stock, par
value $0.01 per share (the "Shares"), pursuant to the exercise of options
granted under the Cross Medical Products, Inc. Amended and Restated 1994 Stock
Option Plan, The Danninger Medical Technology, Inc. 1984 Incentive Stock Option
Plan and The Danninger Medical Technology, Inc. 1984 Non-Statutory Stock Option
Plan (collectively, the "Plans"). We acted as counsel to the Company in
connection with the preparation of the Registration Statement.
We have examined such matters of fact and question of law as we have
considered appropriate for purposes of rendering the opinion expressed below.
We are opining herein as to the effect on the subject transaction of
only the General Corporation Law of the State of Delaware, and we express no
opinion with respect to the applicability thereto or the effect thereon of any
other laws or as to any matters of municipal law or any other local agencies
within any state.
Subject to the foregoing and in reliance thereon, we are of the opinion
that, upon the issuance and sale of the Shares in the manner contemplated by the
Registration Statement and in accordance with the respective terms of the Plans,
and subject to the Company completing all action and proceedings required on its
part to be taken prior to the issuance of the Shares pursuant to the respective
terms of the Plans and the Registration Statement, including, without
limitation, collection of required payment for the Shares, the Shares will be
legally and validly issued, fully paid and nonassessable securities of the
Company.
We consent to your filing this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Latham & Watkins
7
<PAGE> 1
EXHIBIT 10.1
DANNINGER MEDICAL TECHNOLOGY, INC.
1984 NON-STATUTORY STOCK OPTION PLAN
1. PURPOSE. The purpose of this plan is to advance the interests of
Danninger Medical Technology, Inc. (the "Company") by providing an opportunity
to selected key employees and directors of the Company and its subsidiaries and
to consultants, technical advisory committee members and others who may
associate with the Company or its subsidiaries to purchase stock of the Company
through the exercise of options granted under this Plan. By encouraging such
stock ownership, the Company seeks to attract, retain and motivate employees,
directors, consultants and other associates of training, experience and ability.
2. EFFECTIVE DATE. This Plan shall become effective on April 26, 1984.
3. STOCK SUBJECT TO THE PLAN. The shares that may be granted under this
plan shall not exceed in the aggregate 75,000 shares of the no par value Common
Stock of the Company. Any shares subject to an option which for any reason
expires or is terminated unexercised as to such shares may again be the subject
of an option under the Plan. The shares delivered upon exercise of options under
this Plan may, in whole or in part, be either authorized but unissued shares or
issued shares reacquired by the Company.
4. ADMINISTRATION. The Plan shall be administered by a committee (the
"Stock Option Committee") consisting of two (2) or more members, who shall be
eligible to participate in the Plan. The Stock Option Committee shall be
appointed by and shall serve at the pleasure of the Board of Directors of the
Company. Subject to the provisions of this Plan, said Committee shall have full
power to construe and interpret the Plan and to establish, amend and rescind
rules and regulations for its administration.
5. ELIGIBLE EMPLOYEES, DIRECTORS, ETC. Options may be granted by the
Board of Directors to such key employees or directors of the Company or any of
its subsidiaries and to consultants, technical advisory committee members and
others who may associate with the Company or its subsidiaries whether or not
they are also employees of the Company.
6. DURATION OF THE PLAN. The Plan shall terminate ten (10) years from
the effective date of April 26, 1984, unless terminated earlier pursuant to
paragraph 10 hereafter, and no options may be granted thereafter.
7. TERMS AND CONDITIONS OF OPTIONS. Options granted under this Plan
shall be evidenced by stock option agreements in such form and not inconsistent
with the Plan as the Stock Option Committee shall approve from time to time,
which agreements shall include, but are not limited to, the following terms and
conditions:
(a) Price. Each option agreement shall specify the purchase
price per share of stock payable upon the exercise of each option
granted hereunder, as determined by the Board of Directors.
(b) Number of Shares. Each option agreement shall specify the
number of shares to which it pertains.
(c) Exercise of Options. Each option shall be exercisable for
the full amount or for any part thereof and at such intervals or in such
installments as the Board of Directors may determine at the time it
grants such option; provided, however, that no option shall be
exercisable with respect to any shares later than ten (10) years after
the date of the grant of such option.
(d) Notice of Exercise and Payment. An option shall be
exercisable only by delivery of a written notice to the Stock Option
Committee, any member of the Committee, the Company's Treasurer, or any
other officer of the Company designated by the Committee to accept such
notices on its behalf, specifying the number of shares for which it is
exercised. If said shares are not at the time effectively
<PAGE> 2
registered under the Securities Act of 1933, as amended, the optionee
shall include with such notice a letter, in form and substance
satisfactory to the Company, confirming that the shares are being
purchased for the optionee's own account for investment and not with a
view to distribution. Payment shall be made in full at the time of
delivery to the optionee of a certificate or certificates covering the
number of shares for which the option was exercised. Payment shall be
made either by (i) cashier's or certified check, (ii) if permitted by a
vote of the Board of Directors by delivery and assignment to the Company
of shares of Company stock, or (iii) by a combination of (i) and (ii).
The value of the Company stock for such purpose shall be its fair market
value as of the date the option is exercised, as determined in
accordance with the procedures to be established by the Stock Option
Committee.
(e) Non-Transferability. No option shall be transferable by the
optionee otherwise than by will or the laws of descent or distribution,
and each option shall be exercisable during his lifetime only by him.
(f) Termination of Options. Each option shall terminate and may
no longer be exercised if the optionee ceases for any reason to be an
employee or director of the Company or a subsidiary, except that:
(i) if the optionee's employment or directorship shall have
terminated for any reason other than cause, disability (as
defined below) or death, he may at any time within a period of
thirty (30) days after such termination of his employment or
directorship exercise his option to the extent that the option
was exercisable by him on the date of such termination;
(ii) if the optionee's employment or directorship shall have
been terminated because of disability within the meaning of
Section 105(d)(4) of the Internal Revenue Code (the "Code"), he
may at any time within a period of one (1) year after such
termination of his employment or directorship exercise his
option to the extent that the option was exercisable by him on
the date of such termination; and
(iii) if the optionee dies at a time when the option was
exercisable by him, then his estate, personal representative or
beneficiary to whom it has been transferred pursuant to
paragraph 7(f) hereof may, at any time within a period of six
(6) months following his death, exercise the option to the
extent the option might have been exercised at the time of his
death;
provided, however, that no option may be exercised to any extent by
anyone after the date of expiration of the option.
(g) Rights as Shareholder. The optionee shall have no rights as
a shareholder with respect to any shares covered by his option until the
date of issuance of a stock certificate to him for such shares.
8. STOCK DIVIDENDS; SPLITS; STOCK COMBINATION; RECAPITALIZATION.
Appropriate adjustment shall be made in the maximum number of shares of Common
Stock subject to the Plan and in the number, kind, and option price of shares
covered by outstanding options granted hereunder to give effect to any stock
dividends or other distribution, stock splits, stock combinations,
recapitalizations and other similar changes in the capital structure of the
Company after the effective date of the Plan.
9. MERGER; SALE OF ASSETS; DISSOLUTION. In the event of a change of the
Common Stock resulting from a merger or similar reorganization as to which the
Company is the surviving corporation, the number and kind of shares which
thereafter may be optioned and sold under the Plan and the number and kind of
shares then subject to options granted hereunder and the price per share thereof
shall be appropriately adjusted in such a manner as the Stock Option Committee
may deem equitable to prevent substantial dilution or enlargement of the rights
available or granted hereunder. If the Company at any time should elect to
dissolve, sell all or substantially all of its assets, undergo a reorganization,
or merge or consolidate with any corporation and the Company is not the
surviving corporation, then (unless in the case of a reorganization, merger, or
consolidation the surviving corporation assumes the optionees' rights under the
Plan or issues substantially equivalent substitute rights in place thereof) each
optionee shall be notified of his right to exercise all outstanding options
prior to any such dissolution, sale, reorganization,
<PAGE> 3
merger or consolidation. The failure to exercise such outstanding options within
twenty (20) days of such notification shall cause the options to be terminated.
10. TERMINATION OR AMENDMENT OF PLAN. The Board of Directors may at any
time terminate the Plan or make such changes in or additions to the Plan as it
deems advisable, provided that no such termination or amendment shall adversely
affect or impair any then outstanding option without the consent of the optionee
holding such option.
11. EFFECT OF THE PLAN ON EMPLOYMENT RELATIONSHIP. The establishment of
the Plan shall in no way, now or hereafter, reduce, enlarge or modify the
employment relationship between the Company and the Optionee. Nothing contained
in the Plan shall be construed as conferring upon any Optionee any right to
continue in the employ of the Company.
12. DEFINITIONS.
(a) The term "key employees" means those executive,
administrative, operational or managerial employees who are determined
by the Stock Option Committee to be eligible for options under this
Plan.
(b) The term "optionee" means a key employee or a director to
whom an option is granted under this Plan.
(c) The term "parent" shall have for purposes of this Plan, the
meaning ascribed to it under Section 425(e) of the Code.
(d) The term "subsidiary" shall for purposes of this Plan, have
the meaning ascribed to it under Section 425(f) of the Code.
<PAGE> 1
EXHIBIT 10.2
DANNINGER MEDICAL TECHNOLOGY, INC.
1984 INCENTIVE STOCK OPTION PLAN
1. PURPOSE. The purpose of this plan is to advance the interests of
Danninger Medical Technology, Inc. (the "Company") by providing an opportunity
to selected key employees of the Company to purchase stock of the Company
through the exercise of options granted under this Plan. By encouraging such
stock ownership, the Company seeks to attract, retain and motivate key employees
of training, experience and ability. It is intended that this purpose will be
effected by the granting of stock options as provided herein which will qualify
as "incentive stock options" under the provisions of Section 422A of the
Internal Revenue Code of 1954, as amended (the "Code").
2. EFFECTIVE DATE. This Plan shall become effective on January 27, 1984
provided that the Plan is approved by the shareholders of the Company within one
(1) year from that date. Although options may be granted before such approval,
no option may be exercised until such approval is obtained and such options will
be null and void if such approval is not obtained.
3. STOCK SUBJECT TO THE PLAN. The shares that may be granted under this
Plan shall not exceed in the aggregate 150,000 shares of the no par value Common
Stock of the Company. Any shares subject to an option which for any reason
expires or is terminated unexercised as to such shares may again be the subject
of an option under the Plan. The shares delivered upon exercise of options under
this Plan may, in whole or in part, be either authorized but unissued shares or
issued shares reacquired by the Company.
4. ADMINISTRATION. The Plan shall be administered by a committee (the
"Stock Option Committee") consisting of two (2) or more members, who shall be
eligible to participate in the Plan. The Stock Option Committee shall be
appointed by and shall serve at the pleasure of the Board of Directors of the
Company. Subject to the provisions of this Plan, said Committee shall have full
power to construe and interpret the Plan and to establish, amend and rescind
rules and regulations for its administration.
5. ELIGIBLE EMPLOYEES. Options may be granted by the Board of Directors
to such key employees of the Company, including members of the Board of
Directors who are also employees of the Company or any of its subsidiaries, as
are selected by the Stock Option Committee.
6. DURATION OF THE PLAN. The Plan shall terminate ten (10) years from
the effective date unless terminated earlier pursuant to Paragraph 11 hereof,
and no options may be granted thereafter.
7. LIMITATIONS ON NUMBER OF SHARES. The aggregate fair market value,
determined as of the date the option is granted, of the shares for which an
employee may be granted options in any calendar year shall not exceed $100,000
plus any "unused limit carryovers" as that term is defined under Section
422A(c)(4) of the Code, available in such year. In the event that such employee
is eligible to participate in any other stock incentive plans of the Company or
a subsidiary which are also intended to comply with the provisions of Section
422A of the Code, such annual limitation shall apply to the aggregate number of
shares for which options may be granted for such plans.
8. TERMS AND CONDITIONS OF OPTIONS. Options granted under this Plan
shall be evidenced by stock option agreements in such form and not inconsistent
with the Plan as the Stock Option Committee shall approve from time to time,
which agreements shall include, but not be limited to, the following terms and
conditions:
(a) Price. The purchase price per share of stock payable upon
the exercise of each option granted hereunder shall be not less than 100
percent of the fair market value of the stock on the day the option is
granted; provided, however, that if at the time of the grant the
optionee owns stock possessing more than 10 percent of the combined
voting power of all classes of stock of the Company or its parent or a
subsidiary, such purchase price per share shall be not less than 110
percent of the fair market value of the stock on the day the option is
granted. Such fair market value shall be determined in accordance with
<PAGE> 2
procedures to be established in good faith by the Stock Option Committee
conforming to regulations issued by the Internal Revenue Service with
regard to incentive stock options.
(b) Number of Shares. Each option agreement shall specify the
number of shares to which it pertains.
(c) Exercise of Option. Each option shall be exercisable for the
full amount or for any part thereof and at such intervals or in such
installments as the Board of Directors may determine at the time it
grants such option; provided, however, that no option shall be
exercisable with respect to any shares later than ten (10) years after
the date of the grant of such option; and provided, further, that if at
the time of the grant of such option, the optionee owns stock possessing
more than 10 percent of the combined voting power of all classes of
stock of the Company or a subsidiary, such option shall be exercisable
no later than five (5) years after the date of its grant.
(d) Notice of Exercise and Payment. An option shall be
exercisable only by delivery of a written notice to the Stock option
Committee, any member of the Committee, the Company's Treasurer, or any
other officer of the Company designated by the Committee to accept such
notices on its behalf, specifying the number of shares for which it is
exercised. If said shares are not at the time effectively registered
under the Securities Act of 1933, as amended, the optionee shall include
with such notice a letter, in form and substance satisfactory to the
Company, confirming that the shares are being purchased for the
optionee's own account for investment and not with a view to
distribution. Payment shall be made in full at the time of delivery to
the optionee of a certificate or certificates covering the number of
shares for which the option was exercised. Payment shall be made either
by (i) cashier's or certified check, (ii) if permitted by a vote of the
Board of Directors by delivery and assignment to the Company of shares
of Company stock, or (iii) by a combination of (i) and (ii). The value
of the Company stock for such purpose shall be its fair market value as
of the date the option is exercised, as determined in accordance with
the procedures to be established by the Stock Option Committee.
(e) Non-Transferability. No option shall be transferable by the
optionee otherwise than by will or the laws of descent or distribution,
and each option shall be exercisable during his lifetime only by him.
(f) Termination of 0ptions. Each option shall terminate and may
no-longer be exercised if the optionee ceases for any reason to be an
employee of the Company, or its parent or a subsidiary, except that:
(i) if the optionee's employment shall have terminated for
any reason other than cause, disability (as defined below) or
death, he may at any time within a period of thirty (30) days
after such termination of employment exercise his option to the
extent that the option was exercisable by him on the date of
termination of his employment;
(ii) if the optionee's employment shall have been terminated
because of disability within the meaning of Section 105(d)(4) of
the Code, he may at any time within a period of one (1) year
after such termination of employment exercise his option to the
extent that the option was exercisable by him on the date of
termination of his employment; and
(iii) if the optionee dies at a time when the option was
exercisable by him, then his estate, personal representative or
beneficiary to whom it has been transferred pursuant to
paragraph 8(e) hereof may, within six (6) months following the
death, exercise the option to the extent the option might have
been exercised at the time of his death; provided, however, that
no option may be exercised to any extent by anyone after the
date of expiration of the option.
(g) Rights as Shareholder. The optionee shall have no rights as
a shareholder with respect to any shares covered by his option until the
date of issuance of a stock certificate to him for such shares.
<PAGE> 3
(h) Effect of other Outstanding Options. No option granted
hereunder shall be exercisable by an optionee while there is
"outstanding" within the meaning of Section 422A(c)(7) of the code, any
incentive stock option which was granted to the optionee before the
granting of the option under this Plan and which permits the optionee to
purchase stock in (i) the Company, (ii) a corporation which (at the time
of the granting of the option under this Plan) is a parent or subsidiary
of the Company, or (iii) a predecessor corporation of any such
corporations.
9. STOCK DIVIDENDS; SPLITS; STOCK COMBINATION; RECAPITALIZATION.
Appropriate adjustment shall be made in the maximum number of shares of Common
Stock subject to the Plan and in the number, kind, and option price of shares
covered by outstanding options granted hereunder to give effect to any stock
dividends or other distribution, stock splits, stock combinations,
recapitalizations and other similar changes in the capital structure of the
Company after the effective date of the Plan.
10. MERGER; SALE OF ASSETS; DISSOLUTION. In the event of a change of the
Common Stock resulting from a merger or similar reorganization as to which the
Company is the surviving corporation, the number and kind of shares which
thereafter may be optioned and sold under the Plan and the number and kind of
shares then subject to options granted hereunder and the price per share thereof
shall be appropriately adjusted in such a manner as the Stock Option Committee
may deem equitable to prevent substantial dilution or enlargement of the rights
available or granted hereunder. If the Company at any time should elect to
dissolve, sell all or substantially all of its assets, undergo a reorganization,
or merge or consolidate with any corporation and the Company is not the
surviving corporation, then (unless in the case of a reorganization, merger, or
consolidation the surviving corporation assumes the optionees' rights under the
Plan or issues substantially equivalent substitute rights in place thereof) each
optionee shall be notified by the Company of his right to exercise all
outstanding options prior to any such dissolution sale, reorganization merger or
consolidation. The failure to exercise such outstanding options within thirty
(30) days of such notification shall cause the options to be terminated.
11. TERMINATION OR AMENDMENT OF PLAN. The Board of Directors may at any
time terminate the Plan or make such changes in or additions to the Plan as it
deems advisable without further action-on the part of the shareholders of the
Company; provided:
(a) that no such termination or amendment shall adversely affect
or impair any then outstanding option without the consent of the
optionee holding such option;
(b) that any such amendment which increases the number of shares
subject to this Plan shall be subject to approval by shareholders of the
Company within one (1) year from the effective date of such amendment
and shall be null and void if such approval is not obtained; and
(c) that in no event shall any amendment be made to the Plan
which would cause the options granted hereunder to fail to qualify as
incentive stock options under the Code.
12. EFFECT OF THE PLAN ON EMPLOYMENT RELATIONSHIP. The establishment of
the Plan shall in no way, now or hereafter, reduce, enlarge or modify the
employment relationship between the Company and the Optionee. Nothing contained
in the Plan shall be construed as conferring upon any Optionee any right to
continue in the employ of the Company.
13. DEFINITIONS.
(a) The term "key employees" means those executive,
administrative, operational or managerial employees of the Company who
are determined by the Stock Option Committee to be eligible for options
under this Plan.
(b) The term "optionee" means a key employee to whom an option
is granted under this Plan.
(c) The term "parent" shall, for purposes of this Plan, have the
meaning ascribed to it under Section 425(e) of the Code.
<PAGE> 4
(d) The term "subsidiary" shall, for purposes of this Plan, have
the meaning ascribed to it under Section 425(f) of the Code.
<PAGE> 1
Exhibit 10.3
CROSS MEDICAL PRODUCTS, INC.
AMENDED AND RESTATED
1994 STOCK OPTION PLAN
1. PURPOSE. This plan (the "Plan") is intended as an incentive and to
encourage stock ownership by certain key employees, officers and directors of,
and consultants and advisers who render services to, Cross Medical Products,
Inc., a Delaware corporation (the "Company"), and any current or future
subsidiaries or parent of the Company by the granting of stock options (the
"Options") as provided herein. By encouraging such stock ownership, the Company
seeks to attract, retain and motivate employees, officers, directors,
consultants and advisers of training, experience and ability. The Options
granted under the Plan may be either incentive stock options ("ISOs") which meet
the requirements of section 422 of the Internal Revenue Code of 1986, as amended
from time to time hereafter (the "Code"), or options which do not meet such
requirements ("Non-Statutory Options").
2. EFFECTIVE DATE. The Plan will become effective on February 10, 1994
(the "Effective Date").
3. ADMINISTRATION.
(a)The Plan will be administered by a committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board") which consists
of not fewer than two members of the Board. If any class of equity securities of
the Company is registered under section 12 of the Securities Exchange Act of
1934, as amended (the "1934 Act"), all members of the Committee will be
"disinterested persons" as defined in Rule 16b-3(c)(2)(i) promulgated under the
1934 Act (or any successor rule of like tenor and effect) and "outside
directors" as defined in section 162(m) of the Code and the regulations
promulgated thereunder and will not be eligible to receive any options under
this Plan except pursuant to paragraph 4(b) of the Plan.
(b)Subject to the provisions of the Plan, the Committee is
authorized to establish, amend and rescind such rules and regulations as it
deems appropriate for its conduct and for the proper administration of the Plan,
to make all determinations under and interpretations of, and to take such
actions in connection with the Plan or the Options granted thereunder as it
deems necessary or advisable. All actions taken by the Committee under the Plan
are final and binding on all persons. No member of the Committee is liable for
any action taken or determination made relating to the Plan, except for willful
misconduct.
(c)The Company will indemnify each member of the Committee
against costs, expenses and liabilities (other than amounts paid in settlements
to which the Company does not consent, which consent will not be unreasonably
withheld) reasonably incurred by such member in connection with any action to
which he or she may be a party by reason of service as a member of the
Committee, except in relation to matters as to which he or she is adjudged in
such action to be personally guilty of negligence or willful misconduct in the
performance of his or her duties. The foregoing right to indemnification is in
addition to such other rights as the Committee member may enjoy as a matter of
law, by reason of insurance coverage of any kind, or otherwise.
4. ELIGIBILITY.
(a)The Committee may grant Options and Tax Offset Payments, as
defined in paragraph 10, to such key employees of (or, in the case of
Non-Statutory Options only, to directors who are not employees of and to
consultants and advisers who render services to) the Company or its subsidiaries
or parent as the Committee may select from time to time (the "Optionees");
provided, however, that if any class of equity securities of the Company is
registered under section 12 of the 1934 Act, any member of the Board who is not
an employee of the Company may not receive any Option or Tax Offset Payment
under the Plan except pursuant to paragraph 4(b) of the Plan. The Committee may
grant more than one Option to an individual under the Plan.
(b)If any class of equity securities of the Company is registered
under section 12 of the 1934 Act, on June 30 of each year, each member of the
Board who is not an employee of the Company, including members of the Committee,
will automatically receive under this Plan a Non-Statutory Option to purchase
5,000 shares of the Company's common stock, $.01 par value, at an exercise price
equal to 100% of the fair market value of the shares on the date of grant. Such
Option will not be exercisable until a period of one year from the date of grant
and will terminate on the sixth anniversary of the date of grant. This paragraph
4(b) may not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act of 1974,
as amended from time to time, or the rules thereunder.
<PAGE> 2
(c)No ISO may be granted to an individual who, at the time an ISO
is granted, is considered under section 422(b)(6) of the Code as owning stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or of its parent or any subsidiary corporation
(a "10% Shareholder"); provided, however, this restriction will not apply if at
the time such ISO is granted the option price per share of such ISO is at least
110% of the fair market value of such share, and such ISO by its terms is not
exercisable after the expiration of five years from the date it is granted. This
paragraph 4(c) has no application to Options granted under the Plan as
Non-Statutory Options.
(d)The aggregate fair market value (determined as of the date the
ISO is granted) of shares with respect to which ISOs are exercisable for the
first time by any Optionee during any calendar year under the Plan or any other
incentive stock option plan of the Company or a parent or subsidiary of the
Company may not exceed $100,000. This paragraph 4(d) has no application to
Options granted under the Plan as Non-Statutory Options.
5. STOCK SUBJECT TO PLAN. The shares subject to Options under the Plan
are the shares of common stock, $.01 par value, of the Company (the "Shares").
The Shares issued pursuant to Options granted under the Plan may be authorized
and unissued Shares, Shares purchased on the open market or in a private
transaction, or Shares held as treasury stock. The aggregate number of Shares
for which Options may be granted under the Plan may not exceed 1,000,000,
subject to adjustment in accordance with the terms of paragraph 13 of the Plan.
The maximum number of Shares for which Options may be granted under the Plan
during the term of the Plan to any one individual may not exceed 200,000 subject
to adjustment in accordance with the terms of paragraph 13 of the Plan. The
unpurchased Shares subject to terminated or expired Options may again be offered
under the Plan. The Committee, in its sole discretion, may permit the exercise
of any Option as to full Shares or fractional Shares. Proceeds from the sale of
Shares under Options will be general funds of the Company.
6. TERMS AND CONDITIONS OF OPTIONS.
(a)At the time of grant, the Committee will determine whether the
Options granted will be ISOs or Non-Statutory Options. All Options and Tax
Offset Payments granted will be authorized by the Committee and, within a
reasonable time after the date of grant, will be evidenced by stock option
agreements in writing ("Stock Option Agreements"), in the form attached hereto
as Exhibit A, or in such other form and containing such terms and conditions not
inconsistent with the provisions of this Plan as the Committee may determine.
Any action under paragraph 13 may be reflected in an amendment to, or
restatement of, such Stock Option Agreements.
(b)The Committee may grant Options and Tax Offset Payments having
terms and provisions which vary from those specified in the Plan if such Options
or Tax Offset Payments are granted in substitution for, or in connection with
the assumption of, existing options granted by another corporation and assumed
or otherwise agreed to be provided for by the Company pursuant to or by reason
of a transaction involving a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation to which the
Company is a party.
7. PRICE. The Committee will determine the option price per Share (the
"Option Price") of each Option granted under the Plan. Notwithstanding the
foregoing, the Option Price of each ISO granted under the Plan may not be less
than the fair market value of a Share on the date of grant of such Option. The
date of grant will be the date the Committee acts to grant the Option or such
later date as the Committee specifies and the fair market value will be
determined in accordance with paragraph 25(c) and without regard to any
restrictions other than a restriction which, by its terms, will never lapse.
8. OPTION PERIOD. The Committee will determine the period during which
each Option may be exercised (the "Option Period"); provided, however, any ISO
granted under the Plan will have an Option Period which does not exceed 10 years
from the date of grant.
9. NONTRANSFERABILITY OF OPTIONS. An Option will not be transferable by
the Optionee otherwise than by will or the laws of descent and distribution and
may be exercised, during the lifetime of the Optionee, only by the Optionee or
by the Optionee's guardian or legal representative. Notwithstanding the
foregoing, an Optionee may transfer a Non-Statutory Option to members of his or
her immediate family (as defined in Rule 16a-1 promulgated under the 1934 Act),
to one or more trusts for the benefit of such family members or to partnerships
in which such family members are the only partners if (a) the stock option
agreement with respect to such Non-Statutory Option as approved by the Committee
expressly so provides and (b) the Optionee does not receive any consideration
for the transfer. Non-Statutory Options held by such transferees are subject to
the same terms and conditions that applied to such Non-Statutory Options
immediately prior to transfer.
<PAGE> 3
10. TAX OFFSET PAYMENTS. The Committee has the authority and discretion
under the Plan to make cash grants to Optionees to offset a portion of the taxes
which may become payable upon exercise of Non-Statutory Options or on certain
dispositions of Shares acquired under ISOs ("Tax Offset Payments"). In the case
of Non-Statutory Options, such Tax Offset Payments will be in an amount
determined by multiplying a percentage established by the Committee by the
difference between the fair market value of a Share on the date of exercise and
the Option Price, and by the number of Shares as to which the Option is being
exercised. If the Tax Offset Payment is being made on account of the disposition
of Shares acquired under an ISO, such Tax Offset Payments will be in an amount
determined by multiplying a percentage established by the Committee by the
difference between the fair market value of a Share on the date of disposition,
if less than the fair market value on the date of exercise, and the Option
Price, and by the number of Shares acquired under an ISO of which an Optionee is
disposing. The percentage will be established, from time to time, by the
Committee at that rate which the Committee, in its sole discretion, determines
to be appropriate and in the best interest of the Company to assist Optionees in
the payment of taxes. The Company has the right to withhold and pay over to any
governmental entities (federal, state or local) all amounts under a Tax Offset
Payment for payment of any income or other taxes incurred on exercise.
11. EXERCISE OF OPTIONS.
(a)The Committee, in its sole discretion, will determine the
terms and conditions of exercise and vesting percentages of Options granted
hereunder. Notwithstanding the foregoing or the terms and conditions of any
Stock Option Agreement to the contrary, (i) if the Optionee's employment is
terminated as a result of disability or death, his or her Options will be
exercisable to the extent and for the period specified in paragraph 12(b); (ii)
if the Optionee's employment is terminated other than as a result of disability
or death or for cause, his or her Options will be exercisable to the extent and
for the period specified in paragraph 12(a); (iii) if a merger or similar
reorganization or sale of substantially all of the Company's assets occurs, all
outstanding Options will be exercisable to the extent and for the period
specified in paragraph 13(b) or paragraph 13(c), whichever paragraph applies;
and (iv) if a change in control occurs, all outstanding Options will be
exercisable for the period specified in paragraph 13(d).
(b)An Option may be exercised only upon delivery of a written
notice to the Committee, any member of the Committee, or any officer of the
Company designated by the Committee to accept such notices on its behalf,
specifying the number of Shares for which it is exercised.
(c)Within five business days following the date of exercise of an
Option, the Optionee or other person exercising the Option will make full
payment of the Option Price in cash or, with the consent of the Committee, (i)
by tendering previously acquired Shares (valued at fair market value, as
determined by the Committee, as of such date of tender); (ii) with a full
recourse promissory note of the Optionee for the portion of the Option Price in
excess of the par value of Shares subject to the Option, under terms and
conditions determined by the Committee; (iii) any combination of the foregoing;
or (iv) if the Shares subject to the Option have been registered under the
Securities Act of 1933, as amended (the "1933 Act") and there is a regular
public market for the Shares, by delivering to the Company on the date of
exercise of the Option written notice of exercise together with:
(A) written instructions to forward a copy of such notice of
exercise to a broker or dealer, as defined in section 3(a)(4) and
3(a)(5) of the 1934 Act ("Broker"), designated in such notice and to
deliver to the specified account maintained with the Broker by the
person exercising the Option a certificate for the Shares purchased upon
the exercise of the Option, and
(B) a copy of irrevocable instructions to the Broker to deliver
promptly to the Company a sum equal to the purchase price of the Shares
purchased upon exercise of the Option and any other sums required to be
paid to the Company under paragraph 17 of the Plan.
(d)If Tax Offset Payments sufficient to allow for withholding of
taxes are not being made at the time of exercise of an Option, the Optionee or
other person exercising such Option will pay to the Company an amount equal to
the withholding amount required to be made less any amount withheld by the
Company under paragraph 17.
12. TERMINATION OF EMPLOYMENT.
(a)Upon termination of an Optionee's employment with the Company,
any parent or subsidiary of the Company, or any successor corporation to either
the Company or any parent or subsidiary of the Company, other than (i)
termination of employment by reason of death or disability, as defined in
paragraph 25(b), or (ii) termination of
<PAGE> 4
employment for cause, as defined in paragraph 25(f), the Optionee will have 30
days after the date of termination (but not later than the expiration date of
the Stock Option Agreement) to exercise all Options held by him or her to the
extent the same were exercisable on the date of termination; provided, however,
if such termination is a result of the Optionee's retirement with the consent of
the Company, the Committee, in its sole discretion, may permit the exercise of
all or any portion of any Option granted to such Optionee not otherwise
exercisable. The Committee will determine in each case whether a termination of
employment is a retirement with the consent of the Company and, subject to
applicable law, whether a leave of absence is a termination of employment. The
Committee may cancel an Option during the 30-day period after termination of
employment referred to in this paragraph if the Optionee engages in employment
or activities contrary, in the opinion of the Committee, to the best interests
of the Company or any parent or subsidiary of the Company.
(b)Upon termination of employment by reason of death or
disability, the Optionee's personal representative, or the person or persons to
whom his or her rights under the Options pass by will or the laws of descent or
distribution, will have one year after the date of such termination (but not
later than the expiration date of the Stock Option Agreement) to exercise all
Options held by Optionee to the extent the same were exercisable on the date of
termination; provided, however, the Committee, in its sole discretion, may
permit the exercise of all or any portion of any Option granted to such Optionee
not otherwise exercisable.
(c)Upon termination of employment for cause (as defined in
paragraph 25(f)), all Options held by such Optionee will terminate on the date
of termination.
13. REORGANIZATIONS.
(a)If a stock split, stock dividend, combination or exchange of
shares, exchange for other securities, reclassification, reorganization,
redesignation or other change in the Company's capitalization occurs, the
Committee will proportionately adjust or substitute the aggregate number of
Shares for which Options may be granted under this Plan, the number of Shares
subject to outstanding Options and the Option Price of the Shares subject to
outstanding Options to reflect the same. The Committee will make such other
adjustments to the Options, the provisions of the Plan and the Stock Option
Agreements as may be appropriate and equitable, which adjustments may provide
for the elimination of fractional Shares.
(b)In the event of a change of the Company's common stock, $.01
par value, resulting from a merger or similar reorganization as to which the
Company is the surviving corporation, or a merger or similar reorganization
involving only a change in the state of incorporation or an internal
reorganization not involving a change in control as defined in paragraph 25(a),
the number and kind of Shares which thereafter may be purchased pursuant to an
Option under the Plan and the number and kind of Shares then subject to Options
granted hereunder and the price per Share thereof will be appropriately adjusted
in such manner as the Board may deem equitable to prevent dilution or
enlargement of the rights available or granted hereunder.
(c)Except as otherwise determined by the Board, a merger or a
similar reorganization which the Company does not survive (other than a merger
or similar reorganization involving only a change in the state of incorporation
or an internal reorganization not involving a change in control as defined in
paragraph 25(a)), or a sale of all or substantially all of the assets of the
Company, will cause every Option hereunder to terminate, to the extent not then
exercised, unless any surviving entity agrees to assume the obligations
hereunder on terms reasonably acceptable to the Board; provided, however, that,
in the case of such a merger or similar reorganization, or such a sale of all or
substantially all of the assets of the Company, if there is no such assumption,
the Board, in its sole discretion, may provide that some or all of the
unexercised portion of any one or more of the outstanding Options will be
immediately exercisable and vested as of such date prior to such merger, similar
reorganization or sale of assets as the Board determines. If the Board makes an
Option fully exercisable under this paragraph 13(c), the Board will notify the
Optionee that the Option will be fully exercisable for a period of twenty (20)
days from the date of such notice, and the Option will terminate upon the
expiration of such period.
(d)If a change in control (as defined in paragraph 25(a)) occurs,
all outstanding Options granted under this Plan will become immediately
exercisable to the extent of 100% of the Shares subject thereto notwithstanding
any contrary waiting or vesting periods specified in this Plan or in any
applicable Stock Option Agreement.
14. RIGHTS AS SHAREHOLDER. The Optionee has no rights as a shareholder
with respect to any Shares covered by an Option until the date of issuance of a
stock certificate to the Optionee for such Shares.
<PAGE> 5
15. NO CONTRACT OF EMPLOYMENT. Nothing in the Plan or in any Option or
Stock Option Agreement confers on any Optionee any right to continue in the
employment or service of the Company or any parent or subsidiary of the Company
or interfere with the right of the Company to terminate such Optionee's
employment or other services at any time. The establishment of the Plan will in
no way, now or hereafter, reduce, enlarge or modify the employment relationship
between the Company or any parent or subsidiary of the Company and the Optionee.
Options granted under the Plan will not be affected by any change of duties or
position as long as the Optionee continues to be employed by the Company or any
parent or subsidiary of the Company.
16. AGREEMENTS AND REPRESENTATIONS OF OPTIONEES. As a condition to the
exercise of an Option, the Committee, in its sole determination, may require the
Optionee to represent in writing that the Shares being purchased are being
purchased only for investment and without any present intent at the time of the
acquisition of such Shares to sell or otherwise dispose of the same.
17. WITHHOLDING TAXES. The Company or any parent or subsidiary of the
Company has the right (a) to withhold from any salary, wages, or other
compensation for services payable by the Company or any parent or subsidiary of
the Company to or with respect to an Optionee, or to demand payment from the
Optionee or other person to whom the Company is delivering certificates for
Shares purchased upon exercise of an Option of, amounts sufficient to satisfy
any federal, state or local withholding tax liability attributable to such
Optionee's (or any beneficiary's or personal representative's) receipt or
disposition of Shares purchased under any Option or (b) to take any such other
action as it deems necessary to enable it to satisfy any such tax withholding
obligations. The Committee, in its sole discretion, may permit an Optionee to
elect to have Shares that would be acquired upon exercise of Options (valued at
fair market value as of the date of exercise) withheld by the Company in
satisfaction of such Optionee's withholding tax liabilities.
18. EXCHANGES. The Committee may permit the voluntary surrender of all
or a portion of any Option granted under the Plan to be conditioned upon the
granting to the Optionee of a new Option for the same or a different number of
Shares as the Option surrendered, or may require such voluntary surrender as a
condition precedent to a grant of a new Option to such Optionee. Subject to the
provisions of the Plan, such new Option will be exercisable at the same price,
during such period and on such other terms and conditions as are specified by
the Committee at the time the new Option is granted. Upon surrender, the Options
surrendered will be cancelled, and the Shares previously subject to them will be
available for the grant of other Options. The Committee also may grant Tax
Offset Payments to any Optionee surrendering such Option for a new Option.
19. COMPLIANCE WITH LAWS AND REGULATIONS. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Company to sell and
deliver the Shares under such Options, will be subject to all applicable federal
and state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. Options issued under this Plan are not
exercisable prior to (i) the date upon which the Company has registered the
Shares for which Options may be issued under the l933 Act and the completion of
any registration or qualification of such Shares under state law, or any ruling
or regulation of any government body which the Company, in its sole discretion,
determines to be necessary or advisable in connection therewith, or (ii) receipt
by the Company of an opinion from counsel to the Company stating that the
exercise of such Options may be effected without registering the Shares subject
to such Options under the l933 Act or under state or other law.
20. ASSUMPTION. The Plan may be assumed by the successors and assigns of
the Company.
21. EXPENSES. The Company will bear all expenses and costs in connection
with administration of the Plan.
22. AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The Board may
terminate, amend or modify the Plan at any time without further action on the
part of the shareholders of the Company; provided, however, that (a) no
amendment to the Plan may cause the ISOs granted hereunder to fail to qualify as
incentive stock options under the Code; and (b) any amendment to the Plan which
requires the approval of the shareholders of the Company under the Code, the
regulations promulgated thereunder or the rules promulgated under section 16 of
the 1934 Act will be subject to approval by the shareholders of the Company in
accordance with the Code, such regulations or such rules. No amendment,
modification or termination of the Plan may adversely affect in any manner any
Option previously granted to an Optionee under the Plan without the consent of
the Optionee or the transferee of such Option.
23. TERM OF PLAN. The Plan will become effective on the Effective Date,
subject to the approval of the Plan by the holders of a majority of the shares
of stock of the Company entitled to vote within twelve months of the date of the
Plan's adoption by the Board, and the exercise of all Options granted prior to
such approval will be subject to such
<PAGE> 6
approval. The Plan will terminate on the tenth anniversary of the Effective
Date, or such earlier date as may be determined by the Board. Termination of the
Plan, however, will not affect the rights of Optionees under Options previously
granted to them, and all unexpired Options will continue in force and operation
after termination of the Plan except as they may lapse or terminate by their own
terms and conditions.
24. LIMITATION OF LIABILITY. The liability of the Company under this
Plan or in connection with any exercise of an Option is limited to the
obligations expressly set forth in the Plan and in any Stock Option Agreements,
and no term or provision of this Plan or of any Stock Option Agreements will be
construed to impose any further or additional duties, obligations or costs on
the Company not expressly set forth in the Plan or the Stock Option Agreements.
25. DEFINITIONS.
(a)Change In Control. A "change in control" will be deemed to
have occurred if and when (i) a person, partnership, corporation, trust or other
entity ("Person") acquires or combines with the Company, or 50 percent or more
of its assets or earning power, in one or more transactions, and after such
acquisition or combination, less than a majority of the outstanding voting
shares of the Person surviving such transaction (or the ultimate parent of the
surviving Person) is owned by the owners of the voting shares of the Company
outstanding immediately prior to such acquisition or combination; or (ii) during
any period of two consecutive years during the term of this Plan, individuals
who at the beginning of such period are members of the Board ("Original Board
Members") cease for any reason to constitute at least a majority of the Board,
unless the election of each Board member who was not an Original Board Member
has been approved in advance by Board members representing at least two-thirds
of the Board members then in office who were Original Board Members.
(b)Disability. The term "disability" means a physical or mental
condition resulting from bodily injury, disease, or mental disorder which
renders the Optionee incapable of continuing the Optionee's usual and customary
employment or service with the Company or any parent or subsidiary of the
Company.
(c)Fair Market Value. If the Shares are publicly traded, the term
"fair market value" as used in this Plan means (i) the closing price quoted in
the NASDAQ National Market, if the shares are so quoted, (ii) the last quote
reported by NASDAQ for small-cap issues, if the shares are so quoted, (iii) the
mean between the bid and asked prices as reported by NASDAQ, if the Shares are
so quoted, or (iv) if the Shares are listed on a securities exchange, the
closing price at which the Shares are quoted on such exchange, in each case at
the close of the date immediately before the Option is granted or, if there be
no quotation or sale on that date, the next preceding date on which the Shares
were quoted or traded. In all other cases, the fair market value will be
determined in accordance with procedures established in good faith by the
Committee and with respect to ISOs, conforming to regulations issued by the
Internal Revenue Service regarding incentive stock options.
(d)Key Employees. The term "key employees" means those executive,
administrative, operational and managerial employees who are determined by the
Committee to be eligible for Options under the Plan.
(e)Parent and Subsidiary. The terms "subsidiary" and "parent" as
used in the Plan have the respective meanings set forth in sections 424(f) and
(e) of the Code.
(f)Termination For Cause. The term "termination of employment for
cause" means termination of employment for (a) the commission of an act of
dishonesty, including but not limited to misappropriation of funds or property
of the Company; (b) the engagement in activities or conduct injurious to the
reputation of the Company; (c) the conviction or entry of a guilty or no contest
plea to a misdemeanor (involving an act of moral turpitude) or a felony; (d) the
violation of any of the terms and conditions of any written agreement the
Optionee may have with the Company or its parent or subsidiary (following 30
days' written notice from the Company specifying the violation and the
employee's failure to cure such violation within such 30-day period) or (e) any
refusal to comply with the written directives, policies or regulations
established from time to time by the Board.
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement on Form S-8 pertaining to the Cross Medical Products,
Inc. Amended and Restated 1994 Stock Option Plan; the Danninger Medical
Technology, Inc. 1984 Incentive Stock Option Plan; and the Danninger Medical
Technology, Inc. 1984 Non-Statutory Stock Option Plan and to the incorporation
by reference therein of our report dated February 4, 1998 except for Note 7, as
to which the date is February 11, 1998, with respect to the consolidated
financial statements and schedule of Interpore International, Inc. in its Annual
Report (Form 10-K) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Orange County, California
May 27, 1998
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the registration statement of
Interpore International, Inc. on Form S-8 of our report dated February 4, 1998
(except for note 11, for which the date is February 11, 1998), on our audits of
the consolidated financial statements of Cross Medical Products, Inc. as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997, which report is incorporated by reference in the Form 8-K of
Interpore International, Inc. filed with the Securities and Exchange Commission
on May 15, 1998.
/s/ Coopers & Lybrand L.L.P.
Columbus, Ohio
May 27, 1998
