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As filed with the Securities and Exchange Commission on July 19, 1996
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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4HEALTH, INC.
(Exact name of Registrant as Specified in its Charter)
Utah 87-0468225
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5485 Conestoga Court, 80301
Boulder, Colorado (Zip Code)
(Address of Principal
Executive Offices)
4HEALTH, INC.
LONG-TERM STOCK INCENTIVE PLAN
(Full Title of Plan)
Cheryl M. Wheeler
Secretary
4Health, Inc.
5485 Conestoga Court,
Boulder, Colorado 80301
(Name and Address of Agent for Service)
Telephone Number, Including Area Code, of Agent for Service: (303) 546-6303
Copy to:
Peter A. Basilevsky, Esq.
Satterlee Stephens Burke & Burke LLP
230 Park Avenue
New York, New York 10169-0079
(212) 818-9200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered* Offering Price per Aggregate Offering Registration Fee
Share** Price**
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$.01 par value 1,625,000 shs. $7.125 $11,578,125 $3,992.46
=====================================================================================================
</TABLE>
*The registration statement also includes an indeterminable number of
additional shares that may become issuable as a result of the antidilution
adjustment provisions of the Plan.
**Estimated solely for the purpose of determining the registration fee pursuant
to Rule 457(c) and (h) and based upon the average of the high and low prices of
the Company's Common Stock on July 15, 1996 as reported on the Nasdaq National
Market.
<PAGE>
SUMMARY PLAN DESCRIPTION
4HEALTH, INC.
LONG-TERM STOCK INCENTIVE PLAN
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------------------
No person has been authorized to give any information or to make any
representation not contained in this Summary Plan Description and, if given or
made, such information or representation must not be relied upon as having been
authorized.
The date of this part of the prospectus is
July 15, 1996
This document constitutes part of a prospectus covering
securities that have been registered under the
Securities Act of 1933
PURPOSE OF SUMMARY PLAN DESCRIPTION
The purpose of this Summary Plan Description is to give you a brief summary
of the main provisions of the Long-Term Stock Incentive Plan (the "Plan") of
4Health, Inc. (the "Company"). It does not contain the official text of the
Plan. The complete terms of the Plan are set forth in the official text of the
Plan, which is available for examination upon request. In the event of any
difference between this Summary Plan Description and the provisions of the Plan
itself, the official text of the Plan will govern. Matters of the interpretation
and application of the plan are determined by the Compensation Committee of the
Board of Directors of the Company (the "Committee").
This Summary Plan Description describes the provisions of the Plan in
effect as of July 15, 1996. You will be notified of any material changes in the
terms of the Plan.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission") which can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well
as the following regional offices of the Commission: Northwest Atrium Center,
Suite 1400, 500 West Madison Street, Chicago, Illinois 60661; and 7 World Trade
Center (13th Floor), 26 Federal Plaza, New York, New York 10048. Copies of such
material also can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Updated information with respect to the securities and the Plan covered
herein may be provided in the future to participants in the Plan by means of
supplements or appendices to this Summary Plan Description, which may be
delivered by means of intra-Company electronic mail in compliance with
applicable guidelines issued by the Commission.
This Summary Plan Description does not contain all the information set
forth in the Registration Statement on Form S-8 (herein, together with all
amendments and exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended, (the "Securities Act") filed with the
Commission in Washington, D.C., of which this Summary Plan Description is a
part. For further information with respect to the Company and the securities
covered hereby, reference is made to the Registration Statement. Items of
information omitted from this Summary Plan Description but contained in the
Registration Statement may be inspected and copied at the public reference
facilities maintained by the Commission identified above or in the office of the
Secretary of the Company.
INFORMATION INCORPORATED BY REFERENCE AND
OBTAINMENT OF COPIES
The Company will provide without charge to each person to whom a Summary
Plan Description is delivered, upon written or oral request, a copy of any and
all of the information that has been incorporated by reference in the
Registration Statement of which this Summary Plan Description is a part,
including the following documents which are incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended March 31, 1996;
(b) Joint Proxy Statement/Prospectus dated June 27, 1996;
(c) The description of the Company's common stock, par value $0.01 per
share (the "Common Stock"), contained in "Item 1. Description of
Registrant's Securities to be Registered" in the Company's
Registration Statement on Form 8-A, dated June 21, 1996, filed under
Section 12(g)of the Exchange Act, including any amendment or reports
filed for the purpose of updating such description; and
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(d) All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date
hereof and prior to a filing of a post-effective amendment, which
indicates that all securities offered under the Plan have been sold or
which de-registers all securities by reference herein, as a part
hereof from the date of the filing of such reports and documents. Any
statement contained herein or any document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Summary Plan Description 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 modified or superseded such statement. Any such statement so
modified or superseded shall not be deemed to constitute a part of
this Summary Plan Description, except as so modified or superseded.
The Company will not provide copies of exhibits unless such exhibits are
specifically incorporated by reference into the information that is incorporated
by reference into the Registration Statement. Requests should be addressed to
Secretary, 4Health, Inc., 5485 Conestoga Court, Boulder, Colorado 80301
(Telephone Number (303) 546-6303).
THE COMPANY
The Company is the surviving corporation of the merger (the "Merger") of
4health Inc., a California corporation ("4health"), with and into Surgical
Technologies, Inc., a Utah corporation ("Surgical"). The principal business of
the Company is the formulation and supply of vitamins and nutritional
supplements which are designed and formulated to address the dietary needs of
the general public. The Company also conducts operations in connection with its
angioplasty inflation device marketed under the name Transflator.
THE LONG-TERM STOCK INCENTIVE PLAN
Nature and Purpose. At a special meeting of the stockholders of Surgical
held in lieu of an annual meeting on June 15, 1996, the stockholders of Surgical
adopted the Plan, under which 3,250,000 shares of Common Stock were reserved for
issuance upon exercise of Awards. On July 15, each four shares of issued and
outstanding Common Stock were converted into the right to receive two shares of
Common Stock and one warrant (the "Reverse Stock Split"). In accordance with
Section 9(a) of the Plan, upon the Reverse Stock Split, the number of shares of
Common Stock reserved for issuance upon exercise of options to be granted under
the Plan was proportionately reduced to 1,625,000 shares.
The purpose of the Plan is to promote the interests of the Company and its
stockholders by strengthening the ability of the Company to attract and retain
directors, officers and other key employees, and consultants or other
non-employees whom the Company deems can render a valuable contribution to the
direction and success of the Company's efforts. The Board of Directors of the
Company (the "Board") may modify or terminate the provisions of the Plan at any
time, subject to certain limitations. See "Termination and Amendment" below.
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<PAGE>
Awards authorized under the Plan include: incentive stock options ("ISOs")
which are intended to satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"); stock options which are
"non-qualified" for federal income tax purposes ("NQOs"); reload options ("ROs")
which allow the granting of additional options when an employee pays the option
exercise price with previously owned stock; restricted stock awards ("RSAs")
which are awards of stock that are subject to forfeiture in the event of
premature termination of employment, failure of the Company to meet certain
performance objectives, or other conditions; and performance units ("PUs") which
are share- denominated units credited to the employee's account for delivery or
cash-out at some future date based upon performance criteria to be determined by
the Committee. ISOs, NQOs, PUs, and RSAs are collectively referred to as
"Awards".
The Plan is not subject to any provisions of the Employee Retirement Income
Security Act of 1974, as amended. Additional information regarding the Plan may
be obtained by writing to the Company at its principal office. Inquiries should
be addressed to: Secretary c/o 4Health, Inc., 5485 Conestoga Court, Boulder, CO
80301.
Administration. The Plan will be administered by the Committee. The Plan
currently provides that the Committee shall consist of at least two (2)
directors, appointed by the Board, who are "disinterested persons" within the
meaning of Rule 16b- 3(c)(2)(i) promulgated under the Exchange Act, as such Rule
or any other comparable Rule may be in effect from time to time, such that
during the one-year period prior to becoming a member of such Committee, and
during such service as a Committee member, respectively, he will not have been
granted and will not be granted options, Restricted Stock, PUs or other equity
securities of the Company under any other plan of the Company, except pursuant
to a "formula plan" as defined in Rule 16b-3(c)(2)(ii) promulgated under the
Exchange Act, as such Rule or any other comparable Rule may be in effect from
time to time (including, for this purpose, an Award made to non-employee
directors). On May 31, 1996, the Commission adopted a new Rule 16b-3 replacing
old Rule 16b-3 in its entirety. The effective date of the new Rule 16b-3 will be
on August 15, 1996. Pursuant to Section 14 of the Plan, the Board may amend the
Plan to conform the Plan to the applicable requirements and provisions of new
Rule 16b-3. The Board may from time to time remove members from or add members
to the Committee. Vacancies in the Committee, however caused, shall be filled by
the Board. The Committee shall select one of its members to be the Committee's
chairman and shall hold meetings at such time and places as it may determine.
The Committee may appoint a secretary and, subject to the provisions of the Plan
and to policies determined by the Board, may make such rules and regulations for
the conduct of its business as it shall deem advisable. A majority of the
Committee shall constitute a quorum. All action of the Committee shall be taken
by a majority of its members. Any action may be taken by a written instrument
signed by at least a majority of the members or at a meeting conducted by means
of telephone or similar communications equipment pursuant to which all persons
participating in the meeting can hear each other, and action so taken shall be
as fully effective as if it had been taken at a meeting duly called and held.
Subject to the express terms and conditions of the Plan, the Committee
shall have full power to make Awards, to construe or interpret the Plan, to
prescribe, amend and rescind rules
4
<PAGE>
and regulations relating to it and to make all other determinations necessary or
advisable for its administration.
Except as otherwise provided in the Plan, the Committee may determine which
persons shall be granted Awards and the number of shares subject to Awards and
the time at which Awards shall be made.
The Committee shall report to the Board the names of persons granted
Awards, the number of shares involved, and the terms and conditions of each
Award.
No member of the Board or of the Committee will be liable for any action or
determination made in good faith with respect to the Plan or any option or award
and service on the Committee shall constitute service as a director, entitling
such Committee member to indemnification and reimbursement for such service to
the same extent as for service rendered as a director.
Stock Available under Plan. The stock subject to an Award is Common Stock.
Subject to adjustment in the event of a recapitalization or reorganization, the
total number of shares of Common Stock with respect to which Awards may be
granted is 1,625,000 shares; provided, however, that the maximum number of
shares that may be available for Awards to directors of the Company under this
Plan is limited to 1,225,000 and the maximum number of shares that shall be
available for Awards to members of the Board who are not also employees of the
Company ("Non-employee Directors") is limited to 60,000. For purposes of
computing the number of shares of Common Stock available for Awards at any time,
there shall be debited against the total number of shares (i) the number of
shares of Common Stock issuable upon exercise of any options, (ii) the number of
shares of Common Stock awarded subject to the restrictions described under the
caption "Restricted Stock Awards" below ("Restricted Stock"), and (iii) and the
maximum number of shares of Common Stock that may be issued under PU Awards. Any
shares represented by Awards which are cancelled, forfeited, terminated or
expire unexercised shall again be available for grants and issuance under the
Plan.
Eligibility. Persons eligible for Awards under the Plan shall be limited to
such key employees of the Company (including directors of the Company) who have
substantial responsibility in the direction and management of the Company and
certain other individuals who, while not employees of the Company, are
identified by the Committee or the Board as persons who can render a valuable
contribution to the direction and success of the Company's efforts. Except in
the case of Non-employee Directors, the Committee shall have the sole discretion
to select those persons eligible for Awards. Awards granted under the Plan will
be evidenced by a written agreement (the "Agreement") in a form determined by
the Committee. Non-employee Directors shall be eligible to participate in the
Plan only to the extent described below.
Non-employee Director Award. Upon assuming office, each Non- employee
Director shall be granted a NQO to acquire 5,000 shares of Common Stock at an
exercise price equal to 100% of the Fair Market Value (as defined in the Plan)
of such Common Stock on the date of grant.
5
<PAGE>
The NQOs to be granted to all Non-employee Directors upon assuming office
shall become exercisable one-half upon completion of one year of service as a
director and the remaining balance upon completion of two years of service as a
director after such Option is granted (subject to the provisions described below
under the caption "Change in Control") and shall expire five years from the date
the Option is granted (the "Option Period"), unless ended sooner due to
termination of service or death or disability of the optionee or if fully
exercised prior to the end of such Option Period. If the directorship of an
optionee is terminated within the Option Period for any reason other than (i)
death or disability or (ii) on account of any act of (1) fraud or intentional
misrepresentation, or (2) embezzlement, misappropriation or conversion of assets
or opportunities of the Company (any such act resulting in the automatic
termination of the Option), the Option may be exercised, to the extent the
optionee was able to do so at the date of termination of the directorship,
within three months (or such longer period as the Board may determine, but not
to exceed one year) after such termination (if otherwise within the Option
Period). If an optionee dies or becomes disabled while a director of the
Company, the Option may be exercised, to the extent the optionee was entitled to
exercise such Option at the date of his death or disability, within one year
after such death or disability (if otherwise within the Option Period), whether
or not one year of service as a director has elapsed, by the executor or
administrator of the estate of the optionee, or by the legal representative of
an incapacitated optionee, or by the person or persons who shall have acquired
the Option directly from the optionee by a bequest or pursuant to the laws of
descent or distribution or pursuant to a qualified domestic relations order.
The NQOs granted to Non-employee Directors shall be exercisable in the same
manner as other Awards; shall be non-transferable except to the extent other
Awards are transferable; shall not confer any rights as a stockholder; and shall
not give rise to any right to receive fractional shares.
Option Price. The Committee shall determine the option price of all NQOs
and all ISOs; provided however, in the case of ISOs, the option price shall not
be less than the fair market value of the Common Stock on the date the Option is
granted and; provided, further, that in the case of an employee who owns more
than 10% of the total combined voting power of all classes of stock of the
Company or any of its affiliates ("Stockholder Employee") on the date of grant,
the option price of an ISO shall be at least 110% of the then fair market value
of the Common Stock.
Option Term. The Committee shall determine the expiration date of a NQO and
an ISO; provided, however, in the case of ISOs, the term shall expire no later
than one day prior to the end of ten years from the date the Option was granted;
and, provided, further, that ISOs granted to employees who are Stockholder
Employees on the date of grant shall expire no later than one day prior to the
end of five years from the date of grant. Options may terminate earlier as
provided herein.
Exercise of Options. The Committee shall determine when ISOs and NQOs are
exercisable, in whole or in part; provided, however, that under no circumstances
will an option be exercisable within 6 months (or such greater or lesser period
prescribed or permitted by any applicable rule promulgated under the Exchange
Act, including without limitation Rule 16(b)-3,
6
<PAGE>
as in effect from time to time) from its date of grant by holders subject to the
provisions of Section 16(b) under the Exchange Act. Options may be exercised at
an earlier date upon the occurrence of an event which constitutes "change in
control" (as defined herein) of the Company or termination of employment due to
retirement, death or disability.
Manner of Exercise. Options may be exercised by written notice to the
Company in the manner provided in the applicable agreement between the Company
and a participant setting forth the terms and conditions of an Award (an
"Agreement") accompanied by payment of the exercise price in the manner provided
in the applicable Agreement or in such other manner as may be acceptable to the
Committee, in its absolute discretion. Upon exercise of options and payment of
the exercise price, shares will be issued by the Company out of the amount so
authorized under the Plan. In the event the Common Stock issuable upon exercise
of an option is not registered under the Securities Act, the Company will
require that the registered owner deliver an investment representation in the
form acceptable to the Company and its counsel, and the Company will place a
legend on the certificate for such Common Stock restricting the transfer of the
same. The amount of proceeds to be received by the Company upon the exercise of
options will depend on the number of options exercised and the option price
paid. Each Agreement shall specify whether, upon exercise of options, shares of
Common Stock shall be paid for in full with (i) cash (including a certified or
official bank check or the equivalent which is acceptable to the Company), (ii)
the equivalent fair market value of shares of Common Stock, properly endorsed,
(iii) the equivalent fair market value of any other property acceptable to the
Company, or (iv) any combination of (i), (ii), and (iii). In the case of an NQO,
a separate check in the amount of the Federal withholding tax due as a result of
the exercise must accompany the payment for the shares unless the Committee
permits the employee to satisfy such obligation, in whole or in part, by
directing the Company to withhold shares of Common Stock that would otherwise be
received by such individual, pursuant to such rules as the Committee may
determine from time to time in compliance with the provisions of Rule 16b-3(e)
promulgated under the Exchange Act. The Committee may require any person
entitled to receive payment in respect of an Award to remit to the Company,
prior to such payment, an amount sufficient to satisfy any Federal,
state or local tax withholding requirements.
Limitation on Amount. In the case of ISOs only, no employee may be granted
ISOs to the extent the aggregate fair market value (as of the date of grant) of
the Common Stock subject to ISOs that are first exercisable by such employee
during any calendar year exceeds $100,000.
Termination of Employment. In the case of NQOs, the Committee shall
determine the applicable provisions for death, disability and termination of
employment. In the case of ISOs, (i) on termination of an optionee's employment
with the Company other than by reason of death or disability, the optionee shall
have the right to exercise his then outstanding ISOs within three months of such
termination to the extent he was entitled to exercise the same immediately prior
to termination; and (ii) on termination of employment by reason of death or
disability, the optionee, his estate, personal representative, or beneficiary
shall have the right to exercise his then outstanding ISOs at any time within
twelve months from the date of death or termination of employment by reason of
disability for the full number of shares subject to ISOs at the date of
termination of employment by reason of death or disability, irrespective of any
vesting
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provisions except as provided in the first sentence of the paragraph above
captioned "Exercise of Options".
Time of Grant. The grant of an option shall occur only when a written
Agreement shall have been duly executed and delivered by or on behalf of the
Company and the employee to whom the option is granted.
Reload Options. If the applicable Agreement so provides or upon the
approval of the Committee at the time of exercise of an option, in the event an
optionee exercises a NQO by payment of all or a portion of the exercise price
with shares of Common Stock which the optionee has owned for at least six
months, the optionee may receive a RO in the form of a new NQO to purchase a
number of shares of Common Stock equal to the number of shares of Common Stock
used in payment of the exercise price of the original option.
No Stockholder Rights. Nothing contained in the Plan or in any Agreement
shall be construed to confer upon the holder of an option the right to vote or
to receive dividends or subscription rights, or to consent or to receive notice
as a stockholder in respect of the meetings of stockholders of the Company or
the election of directors of the Company or any other matter, or any other
rights whatsoever as a stockholder of the Company.
No Fractional Shares. The Company shall not be required to issue fractional
shares of Common Stock upon exercise of any options.
Restrictions on Transferability. All options granted under this Plan shall
be non-assignable and non-transferable otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order.
During the lifetime of the optionee, the option is exercisable only by him, or,
in the case of his incapacity, by his legal representative.
Resale of Shares. Shares of the Company's Common Stock purchased upon the
exercise of options granted under the Plan may be resold freely except that any
optionee deemed to be an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act may not sell such shares unless they have been
registered by the Company for resale by such optionee or unless the shares are
sold pursuant to an exemption from registration under the Securities Act, such
as that provided by Rule 144, which contains limitations on the manner of sale
and the amount of shares that may be sold during any three month
period.
Restricted Stock Awards. Except as otherwise provided in the Plan, the
Committee has the sole discretion to determine the restrictions that apply to
each RSA (including, without limitation, the time and manner of vesting,
provisions applicable on death, disability or other termination of employment,
conditions of forfeiture and whether any consideration should be paid by the
grantee). Any such restrictions will be embodied in the applicable Agreement and
in a legend placed on the certificate for the RSA. As soon as practicable
following a grant of a RSA, the Company will transfer to the name of the grantee
any and all awarded shares. A certificate or certificates for all shares of
Restricted Stock registered in the name of a grantee will be promptly drawn and
held for the grantee by the Company. The grantee will thereupon be a stockholder
and have all the rights of a stockholder with respect to such shares, including
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<PAGE>
the right to vote and receive all dividends or other distributions made or paid
with respect to such shares. As the restrictions specified by the Committee and
set forth in the applicable Agreement are released, a certificate, without the
legend described above, for the number of shares with respect to which
restrictions have been released will be delivered to the grantee as soon as
practicable. Any new, additional or different securities, cash or other property
the grantee may become entitled to receive shall be subject to the same
restrictions applicable to the RSA with respect to which such new, additional or
different securities or property are received. Shares of Restricted Stock may
not be sold, exchanged, transferred, pledged, hypothecated, or otherwise
disposed of until such time as the stated restrictions lapse.
Performance Units. The Committee may grant PUs entitling the holder to
receive a fixed or variable number of share-denominated units subject to such
conditions of vesting and time of payment as the Committee may determine and as
set forth in the applicable Agreement. PUs may be paid in cash or in a
combination of cash and shares of Common Stock, as the Committee determines. PUs
represent an unsecured and unfunded promise to pay the fair market value of the
shares of Common Stock represented by the Units and the holder shall have no
rights other than as a general creditor of the Company. PUs may not be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of except as
provided in the applicable Agreement.
Recapitalization or Reorganization.
(a) The aggregate number of shares of Common Stock for which Awards may be
granted under the Plan, the number of shares covered by outstanding Awards and
Awards to be granted to Directors and Non-employee Directors, and the exercise
price per share for each outstanding option, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from the subdivision or consolidation of shares, or the payment of a
stock dividend after the effective date of the Plan, or other increase or
decrease in such shares effected without receipt of consideration by the
Company; provided, however, that any adjustment to Awards resulting in the right
to receive fractional shares shall be eliminated.
(b) If the Company shall at any time merge or consolidate with or into
another corporation, the holder of each Award will thereafter receive, upon
exercise or transfer of shares, the securities or property to which a holder of
an equivalent number of shares of Common Stock would have been entitled upon
such merger or consolidation, and the Company shall take such steps in
connection with such merger or consolidation as may be necessary to assure that
the provisions of this Plan shall thereafter be applicable, as nearly as
reasonably may be, in relation to any securities or property thereafter
deliverable. A sale of all or substantially all of the assets of the Company for
a consideration (apart from the assumption of obligations) consisting primarily
of securities shall be deemed a merger or consolidation for the foregoing
purposes.
Change in Control. Notwithstanding any provision in the Plan to the
contrary, but subject to the first sentence of the paragraph above captioned
"Exercise of Options", (i) each option granted under the Plan shall become
immediately exercisable, in whole or in part, at the
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election of the optionee; (ii) the restrictions applicable to each share of
Restricted Stock shall immediately lapse; and (iii) payment of Performance Units
shall be immediately due, in each case, upon the occurrence of an event which
constitutes a change of control of the Company. For purposes of this clause, a
"change in control" of the Company shall mean a change in control of a nature
that would be required to be reported in response to Item 1 of Form 8-K
promulgated under the Exchange Act or a sale of all or substantially all of the
assets of the Company; provided that, without limitation, such a change in
control shall (i) not be deemed to have occurred upon the Merger, and (ii) be
deemed to have occurred if:
(A) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Company or any person who on the effective date of
the Merger is a director or officer of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, as such
Rule is in effect from time to time), directly or indirectly, of securities of
the Company representing 30% or more of the combined voting power of the
Company's then outstanding securities, unless such person owns, directly or
indirectly, as of the effective date of the Merger, more than 25% of the
combined voting power of the Company's then outstanding securities, in which
case, if any such person (a "Major Stockholder") becomes the beneficial owner,
directly or indirectly, of 33-1/3% or more of the combined voting power of the
Company's then outstanding securities (otherwise than pursuant to the Merger),
provided, further, however, that acquisition of 33-1/3% or more of such combined
voting power shall not constitute a "change in control of the Company" if (1)
such combined voting power does not exceed 37-1/2% or more of the combined
voting power of the Company's then outstanding securities, or (2) either (i) any
such increase in a Major Stockholder's beneficial ownership results from a
redemption or purchase by the Company of its securities, or (ii) the Board, by
vote of a majority of the full Board, in good faith, determines (hereinafter
referred to as a "Determination") both (X) that such acquisition does not
constitute, in fact, a change in the control of the Company and (Y) that such
Major Stockholder does not and cannot then control the Company; or (iii) any
such shares were acquired in the Merger; and
(B) during any period of two consecutive years prior to the date of such
Determination, individuals who at the beginning of such period constituted the
Board cease for any reason to constitute at least a majority thereof, unless the
election of each director who was not a director at the beginning of such period
has been approved in advance by directors representing at least a majority of
the directors then in office who were directors at the beginning of the period.
Termination and Amendment. The Plan will expire on March 1, 2006, but the
Board of Directors may terminate the Plan at any time prior thereto. Termination
of the Plan will not alter or impair, without the consent of the optionee or
grantee, any of the rights or obligations of any Award made under the Plan. The
Board may from time to time alter, amend, suspend or discontinue the Plan;
provided, however, that no such action of the Board may alter the provisions of
the Plan so as to alter any outstanding Awards to the detriment of the optionee
or grantee without his consent, and, no amendment to the Plan may be made
without stockholder approval if such amendment would (i) increase (except in the
event of a recapitalization or reorganization) the total number of shares
reserved for issuance pursuant to the Plan; (ii) change the class of individuals
entitled to participate under the Plan; or (iii) withdraw the administration of
the Plan from a committee consisting of at least two "disinterested persons".
The Committee
10
<PAGE>
may, from time to time, alter, amend, cancel or terminate any
outstanding Award, in any manner not inconsistent with the Plan; provided,
however, that no such action of the Committee may alter, amend, cancel or
terminate an Award to the detriment of the optionee or grantee without his
consent, including, (i) to change the date or dates as of which an Award becomes
exercisable, is deemed earned, or becomes nonforfeitable; or (ii) to cancel and
reissue an Award under such different terms and conditions as the Committee
determines appropriate. The provisions of the Plan regarding non-employee
director option grants may not be amended more than once every six months except
to comport with changes to the Code, the Employee Retirement Income Security
Act, or the rules thereunder. Notwithstanding anything in the Plan to the
contrary, the Board shall have the power to amend the Plan to conform the Plan
to all applicable requirements of the law.
No Right to Employment. No person has any claim or right to receive grants
of Awards under the Plan. Neither the Plan, the grant of Awards under the Plan,
nor any action taken or omitted to be taken under the Plan create or confer on
any employee any right to be retained in the employ of the Company or to
interfere with or to limit in any way the right of the Company to terminate the
employment of such individual at any time.
Registration. There is no obligation or duty for the Company to register
under the Securities Act or any state securities law at any time the Awards that
may be granted hereunder or the Common Stock that may be issuable upon grant or
exercise of such Awards. The Company is not required to issue or deliver any
shares of stock prior to completion of such registration or other qualification
of such shares under any state or federal law, rule, or regulation as the
Company shall determine to be necessary or desirable.
Prior Options. Any individual who, on the effective date of the Merger,
held an unexpired and unexercised option under 4health's stock option plan (a
"Prior Option"), shall have his Prior Option replaced with a new option issued
under the Plan, such new option to be of substantially like tenor for an
equivalent number of shares after adjustment for the conversion ratio under
which outstanding shares of Common Stock of 4health were converted into shares
of Common Stock of Surgical pursuant to the Merger.
Options for an aggregate of 1,167,802 shares were outstanding under the
Plan at July 15, 1996, of which options for 931,659 shares were held by
executive officers and directors. All of the outstanding options are NQOs.
Federal Income Tax Consequences
The following discussion is a summary of the Federal income tax
consequences to optionees and to the Company with respect to Awards of Options,
Restricted Stock, and Performance Units under the Plan. SINCE THE APPLICATION OF
THE GENERAL TAX CONSEQUENCES DESCRIBED HEREIN MAY VARY DEPENDING UPON AN
OPTIONEE'S INDIVIDUAL CIRCUMSTANCES, OPTIONEES ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS REGARDING THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES ARISING
FROM THE GRANT OR EXERCISE OF SUCH OPTIONS.
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<PAGE>
Incentive Stock Options (ISOs). No income is generally recognized by an
optionee when an ISO is granted or exercised. If the stock obtained upon
exercise of an ISO is sold more than one year after exercise and two years after
grant, the difference between the option price and the amount realized on the
sale will be treated as long-term capital gain, which presently is subject to
tax at a maximum rate of 28%. The Company is not entitled to a deduction as a
result of the grant or exercise of an ISO or the sale of the stock acquired upon
exercise thereof if the stock is held by the optionee for the requisite periods.
If, however, the stock acquired upon exercise of an ISO is sold less than
one year after the exercise or less than two years after grant, the lesser of
(i) the difference between the fair market value on the date of exercise and the
option price or (ii) the difference between the amount realized on the sale and
the option price will be treated as ordinary income, which presently is subject
to tax at a maximum rate of 39.6%, and the Company will be entitled to a
corresponding deduction. The excess of the amount realized on the sale over the
fair market value on the date of exercise, if any, will be treated as long-term
or short-term capital gain, depending on the length of time the stock is held.
The excess of the fair market value of the stock over the option price on
the date of exercise of an ISO will constitute an adjustment for alternative
minimum tax purposes which may result in the optionee being subject to the
alternative minimum tax.
Nonqualified Stock Options (NQOs). No income is recognized by an optionee
when an NQO (including a Reload Option) is granted. Except as described below,
upon exercise of an NQO an optionee is treated as having received ordinary
income at the time of exercise in the amount equal to the difference between the
option price paid and the then fair market value of the Common Stock acquired.
The Company will be required to withhold tax thereon and will be entitled to a
deduction at the same time an in an amount corresponding to such difference. The
Company may permit an optionee to satisfy the withholding tax obligation, in
whole or in part, by withholding shares of Common Stock that would otherwise be
received by the optionee upon exercise of an NQO. The optionee's basis in the
Common Stock acquired upon exercise of an NQO will be equal to the option price
plus the amount of ordinary income recognized, and any gain or loss thereafter
recognized upon disposition of the Common Stock is generally treated as capital
gain or loss.
Stock acquired by "Insiders" (i.e., officers, directors or persons holding
10% of the stock of the Company who are subject to the restrictions on
short-swing trading imposed by Section 16(b) of the Exchange Act) upon exercise
of NQOs within six (6) months of the date of grant constitutes "restricted
property" and, unless the optionee elects otherwise, the recognition of income
upon exercise is deferred to the date upon which the stock acquired upon
exercise may first be sold without incurring Section 16(b) liability (generally
six months after the date of grant of the option) and he will realize ordinary
income in an amount equal to the difference between the option price and the
fair market value of the stock on that date.
$100,000 Exercise Limitation for ISOs. If the aggregate fair market value
of stock (determined at the date of grant) with respect to which ISOs granted by
the Company (and any
12
<PAGE>
parent or subsidiary of the Company) become exercisable for the first time by
any individual (whether by passing of an anniversary date, acceleration or
otherwise) during any one calendar year exceeds $100,000, the excess will be
treated for tax purposes as NQOs, with options being taken into account therefor
in the order of grant.
Payment with Common Stock. The Plan allows an optionee to deliver Common
Stock of the Company he already owns in payment of the option price for either
an ISO or an NQO. For any shares of Common Stock so exchanged, an amount equal
to the fair market value thereof on the date tendered will be credited against
the option price.
In the event Common Stock is used to pay the option price for an NQO, gain
or loss will not be recognized in connection with such exchange to the extent
that the number of shares of stock received on exercise does not exceed the
number of shares of stock surrendered. The optionee's basis in the new shares
will be equal to the basis of the stock surrendered and the holding period
thereof will include the holding period of the shares exchanged. The fair market
value of any additional shares received upon exercise of an NQO in exchange for
stock (less any cash or other property paid in connection with the exercise)
will constitute compensation to the optionee taxable as ordinary income. The
optionee's basis in these additional shares will be equal to the amount of
compensation included in income plus any cash or value of other property paid
upon exercise, and the holding period therefor will begin on the date of the
exchange.
In the event Common Stock is used to pay the option price for an ISO, gain
or loss normally will not be recognized in connection with such exchange. To the
extent that the number of shares of stock received on exercise does not exceed
the number of shares surrendered, proposed Treasury Regulations provide that the
optionee's basis in these shares will be equal to the basis of the stock
surrendered and, except as provided below, will have the same holding period as
the stock surrendered. To the extent that the optionee receives an amount of
shares in excess of the number of shares surrendered, the optionee's basis in
such additional shares will be zero (plus any cash paid in connection with the
exercise) and the holding period for such additional shares will begin on the
date of such exchange.
If Common Stock acquired upon the exercise of an ISO is delivered in
payment of the option price upon the exercise of a second ISO before the stock
was held for the requisite holding period, then the stock so delivered will not
be eligible for tax-free treatment in the exchange, but instead the optionee
generally will be required to recognize ordinary income at the time such stock
is delivered in an amount equal to the difference between the fair market value
of the stock on the date of exercise of the first ISO and the option price of
the first ISO. If the fair market value of such stock on the date of delivery is
lower than the fair market value on the date of exercise of the first ISO, then
the ordinary income generally will be measured by the difference between the
fair market value of such stock on the date of delivery and the option price of
the first ISO.
There are special complex rules pertaining to the disposition of shares
within one year of exercise or two years from the date of grant of an ISO where,
upon exercise of such ISO, outstanding shares of Common Stock were used in full
or partial payment of the option price.
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<PAGE>
Under these rules a substantial portion of the proceeds of disposition could be
treated as ordinary compensation income and not capital gains as might otherwise
be expected.
In view of the complexity of the tax aspects of transactions involving the
exercise of Options and dispositions of shares of Common Stock acquired upon or
delivered as payment upon exercise of Options, and since the impact of taxes
will vary, each optionee should consult his own advisor to determine the tax
consequences in his particular circumstances.
Restricted Stock. Restricted Stock awarded to an employee may be subject to
any number of restrictions (including deferred vesting, limitations on transfer,
and forfeitability) imposed by the Committee. In general, the receipt of
Restricted Stock will not result in the recognition of income by an employee
until such time as the shares are either not forfeitable or are transferable.
Upon the lapse of such restrictions, the employee will be required to include as
ordinary income the difference between the amount paid for the Restricted Stock,
if any, and the fair market value of such stock on the date the restrictions
lapse, and the Company will be entitled to a corresponding deduction. Employees
receiving RSAs may elect to include the value of such stock (less any amounts
paid for such stock) as ordinary income at the time the Award is made. In this
event, the Company would receive a corresponding deduction. Employees making
this election would treat any gain or loss realized on a sale of the Restricted
Stock as capital gain or loss, but would not be entitled to any loss deduction
if they forfeited the Restricted Stock pursuant to the restrictions imposed by
the Committee.
Performance Units. An Award of Performance Units will not be included in
income by the employee or deducted by the Company because it represents only an
unsecured promise by the Company to make a future payment, the amount of which
is contingent upon the value of the Company's Common Stock. Upon payment of the
cash or shares of Common Stock to the employee pursuant to the Performance Unit,
the employee will be required to include as ordinary income the full value of
such cash or shares, and the Company will be entitled to a corresponding
deduction.
14
<PAGE>
ADDITIONAL INFORMATION
Participants may obtain additional information about the Plan and the
Committee by writing or calling the Secretary, 4Health, Inc., 5485 Conestoga
Court, Boulder, Colorado 80301. (Telephone Number (303) 546-6303).
PART II
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange Commission
are hereby incorporated by reference:
(a) Annual Report on Form 10-K for the fiscal year ended March 31, 1996;
(b) Joint Proxy/Prospectus Statement dated June 27, 1996; and (c) the
description of the Registrant's Common Stock set forth in the Registrant's Form
8-A dated June 21, 1996, filed under Section 12(g) of the Exchange Act,
including any amendments or reports filed for the purpose of updating such
description; and
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the filing hereof and prior
to a filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents. Any statement
contained herein or in any 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 subsequent filed document which also is or is deemed to be
incorporated by reference herein modified or superseded such statement. Any such
statement so modified or superseded shall not be deemed to constitute a part of
this Registration Statement, except as so modified or superseded.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Utah Revised Business Corporation Act ("Utah Law") permits
indemnification of directors if the director acted in good faith and believed
his conduct was in, and not opposed to, the corporation's best interests and, in
the case of any criminal proceeding, such director had no reasonable cause to
believe his conduct was unlawful. Utah Law provides for mandatory
II-1
<PAGE>
indemnification and court-ordered indemnification to directors and officers in
certain circumstances. Further, under Utah Law, a corporation may indemnify an
officer, employee, fiduciary, or agent who is not a director to a greater extent
than directors, provided such indemnification is not contrary to public policy.
The Registrant's bylaws provide for such indemnification to the fullest extent
permitted by law.
The Registrant intends to obtain directors and officers
insurance for its directors and officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit Description Sequential
No. ----------- Page No.
------- ----------
4 4Health, Inc. Long-Term Stock
Incentive Plan*
5 Opinion of Satterlee Stephens 22
Burke & Burke LLP as to
legality of the securities being
registered
15 Not Applicable
23(a) Consent of Arthur Andersen LLP 24
23(b) Consent of Satterlee Stephens
Burke & Burke LLP (included in
opinion filed as Exhibit 5)
24 Not Applicable
28 Not Applicable
- ------------------------------------------
* Incorporated by reference to Exhibit 10.13 to Registration
Statement No. 333-3243 on Form S-4 filed May 7, 1996, as amended by
Amendment No. 1 filed June 18, 1996.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes as follows:
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<PAGE>
(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 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in aggregate,
represent a fundamental change in the information set forth in this
registration statement;
(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 the undertakings set forth in paragraphs (i) and (ii)
above shall 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 Registrant 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 the 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.
(4) That, for purposes of determining any liability under the Securities
Act each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in 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.
(5) To deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Exchange Act; and, where interim financial information required to be presented
by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver,
or cause to be delivered to each
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<PAGE>
person to whom the prospectus or cause to be delivered to each person to whom
the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
(6) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities 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 public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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 or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boulder, State of Colorado, on this
15th day of July, 1996.
By: /s/ R. Lindsey Duncan
-------------------------
R. Lindsey Duncan
Chairman
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ R. Lindsey Duncan
- ---------------------
R. Lindsey Duncan Chairman, Chief Executive July 15, 1996
Officer and Director
II-4
<PAGE>
/s/ Richard B. Carlock
- ----------------------
Richard B. Carlock Chief Financial Officer and July 15, 1996
Director
/s/ Cheryl M. Wheeler
- ---------------------
Cheryl M. Wheeler Secretary and Director July 15, 1996
/s/ Henry S. Stone
- ------------------
Henry S. Stone Vice-President Operations, July 15, 1996
General Counsel and Director
/s/ David Melman
- ----------------
David Melman Director July 15, 1996
/s/ Todd B. Crosland
- --------------------
Todd B. Crosland Director July 15, 1996
/s/ Rockwell D. Schutjer
- ------------------------
Rockwell D. Schutjer Director July 15, 1996
II-5
<PAGE>
Exhibit No. 5
Opinion of Counsel as to Legality of
the Securities being Registered
<PAGE>
July 19, 1996
4Health, Inc.
5485 Conestoga Court
Boulder, Colorado 80301
Dear Sirs:
You have requested our opinion in connection with a Registration Statement
on Form S-8 dated July 15, 1996, to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, with respect to
shares of common stock, par value $0.01 per share ("Common Stock") of 4Health,
Inc., a Utah corporation (the "Company"), to be issued pursuant to the 4Health,
Inc. Long-Term Stock Incentive Plan (the "LTSIP").
As counsel for the Company, we are familiar with the LTSIP, and with the
corporate proceedings relating thereto. Based thereon, it is our opinion that
the securities registered for the LTSIP, when issued and sold pursuant to the
terms of the LTSIP and the stock option agreements issued thereunder, will be
legally issued, fully paid and non-assessable, provided, in the case of original
issue shares (if any), the Company receives as consideration an amount at least
equal to the par value thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Satterlee Stephens Burke & Burke LLP
<PAGE>
Exhibit No. 23(a)
Consent of Arthur Andersen LLP
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of (i) our report dated
April 12, 1996 included in 4Health, Inc.'s (formerly known as Surgical
Technologies, Inc.) Annual Report on Form 10-K for the year ended March 31,
1996, and (ii) our reports dated April 12, 1996 and March 8, 1996 (except with
respect to the Merger Agreement (Note 10) as to which the date is April 10,
1996), included in 4Health, Inc.'s Joint Proxy Statement/Prospectus dated June
27, 1996 which forms a part of Registration Statement No. 333-3243 on Form S-4
filed May 7, 1996, as amended by Amendment No. 1 filed June 18, 1996, and to all
references to our firm included in this Registration Statement.
Arthur Andersen LLP
Salt Lake City, Utah
and
Denver, Colorado
July 19, 1996
