As filed with the Securities and Exchange Commission
on October 15, 1997
No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VITAL SIGNS, INC.
(Exact name of registrant as specified in its charter)
New Jersey 11-2279807
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 Campus Road, Totowa, New Jersey 07512
(Address of Principal Executive Offices) (Zip Code)
VITAL SIGNS INVESTMENT PLAN
(Full title of the plan)
Anthony J. Dimun, Executive Vice President
Vital Signs, Inc.
20 Campus Road
Totowa, New Jersey 07512
(201) 790-1330
(Name, address and telephone number, including area code,
of agent for service)
with a copy to:
Peter H. Ehrenberg, Esq.
Lowenstein, Sandler, Kohl, Fisher & Boylan, P.C.
65 Livingston Avenue
Roseland, New Jersey 07068
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
securities offering aggregate Amount of
to be Amount to be price per offering registration
registered registered unit (1) price fee
- --------------------------------------------------------------------------------
Common 600,000 shares $18.00 $10,800,000 $3,273
Stock, no (2)
par value
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(1) Pursuant to Rule 457, the proposed maximum offering price per share is
estimated for the purpose of computing the amount of the registration fee
and is based upon the average of the high and low sales prices of the
Common Stock of the registrant reported on the Nasdaq National Market on
October 10, 1997.
(2) Plus such indeterminate number of additional shares as shall become
issuable pursuant to the anti-dilution provisions of the above-mentioned
plan. An additional 300,000 shares of Common Stock issuable under the
Investment Plan were registered on a Registration Statement on Form
S-8 (No. 33-73800) filed with the SEC on January 6, 1994.
<PAGE>
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, filed by Vital Signs, Inc. (the "Company") with
the Securities and Exchange Commission, are hereby incorporated by reference:
(a) the Company's Annual Report on Form 10-K for the year ended September
30, 1996;
(b) the Company's Quarterly Reports on Form 10-Q for the periods ended
December 31, 1996, March 31, 1997 and June 30, 1997;
(c) the Company's Current Reports on Form 8-K, dated August 1, 1997 and
March 19, 1997; and
(d) the description of the Common Stock of the Company contained in the
Company's most recent registration statement filed under the Securities
Exchange Act of 1934 (the "Exchange Act"), including any amendment
or report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities then 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 hereof
from the date of filing of such documents. Any statement contained herein or 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 such statement is modified or superseded by a
subsequently filed document which also is or is deemed to be incorporated by
reference herein. 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.
<PAGE>
Item 6. Indemnification of Directors and Officers.
Section 3-5 of Title 14A of the New Jersey Business Corporation Act
contains detailed provisions for indemnification of directors and officers of
New Jersey corporations against expenses, judgments, fines and settlements in
connection with litigation.
The registrant's Restated Certificate of Incorporation provides for
indemnification of the registrant's directors and officers against certain
liabilities. The Restated Certificate of Incorporation also provides for
exculpation of the registrant's directors and officers from liabilities (subject
to certain exceptions).
The registrant maintains a directors' and officers' liability insurance
policy which will insure its directors and officers and the directors and
officers of its subsidiaries in certain circumstances.
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
4.1 Registrant's Restated Certificate of Incorporation is
incorporated by reference to Exhibit 3.1 of Registrant's Annual
Report on Form 10-K for the year ended September 30, 1995.
4.2 By-laws, as amended, are incorporated by reference to Exhibit
3.2 of the Registrant's Registration Statement on Form S-1
(No. 33-35864) initially filed with the Securities and Exchange
Commission on July 13, 1990.
4.3 1984 Economic Development Authority Loan Agreement is incorporated
by reference to Exhibit 4.2 to the Company's Registration
Statement on Form S-1 (No. 33-35864) initially filed with the
Commission on July 13, 1990.
4.4 Amended and Restated Loan Agreement between the Company and the
New Jersey Economic Development Authority, dated as of November
1, 1990, is incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-1 (No. 33-34107)
initially filed with the Commission on February 21, 1991.
4.5 Letter of Credit and Reimbursement Agreement, dated August 27,
1993, between the Company and Chemical Bank New Jersey N.A., is
incorporated by reference to Exhibit 4.3 to the Company's Annual
Report on Form 10-K for the year ended September 30, 1993.
5.1 Opinion of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.C.
23.1 Consent of Goldstein Golub Kessler & Company, P.C.
23.2 Consent of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.C. is
included in Exhibit 5.1
24.1 Power of Attorney.
99.1 Vital Signs Investment Plan, as amended and restated.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that Paragraphs 1(i) and 1(ii) do not
apply if the registration statement is on Form S-3 or Form
S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 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 of 1933 and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Totowa, State of New Jersey, on October 14, 1997.
VITAL SIGNS, INC.
By:/s/Anthony J. Dimun
________________________
Anthony J. Dimun
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
*/s/Terry D. Wall President, Chief Executive October 14, 1997
______________________ Officer (Principal Executive
Terry D. Wall Officer) and Director
*/s/David J. Bershad Director October 14, 1997
______________________
David J. Bershad
/s/Anthony J. Dimun Executive Vice President, October 14, 1997
______________________ Chief Financial Officer,
Anthony J. Dimun Treasurer, Secretary and
Director (Chief Financial
and Accounting Officer)
*/s/Joseph J. Thomas Director October 14, 1997
_____________________
Joseph J. Thomas
*/s/John Toedtman Director October 14, 1997
_____________________
John Toedtman
*/s/Barry Wicker Director October 14, 1997
_____________________
Barry Wicker
*By:/s/Anthony J. Dimun
_______________________
Anthony J. Dimun
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
4.1 Registrant's Restated Certificate of Incorporation
is incorporated by reference to Exhibit 3.1 of
Registrant's Annual Report on Form 10-K for the
year ended September 30, 1995.
4.2 By-laws, as amended, are incorporated by reference
to Exhibit 3.2 of the Registrant's Registration
Statement on Form S-1 (No. 33-35864) initially
filed with the Securities and Exchange Commission
on July 13, 1990.
4.3 1984 Economic Development Authority Loan Agreement
is incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-1
(No. 33-35864) initially filed with the Commission
on July 13, 1990.
4.4 Amended and Restated Loan Agreement between the
Company and the New Jersey Economic Development
Authority, dated as of November 1, 1990, is
incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-1
(No. 33-34107) initially filed with the Commission
on February 21, 1991.
4.5 Letter of Credit and Reimbursement Agreement,
dated August 27, 1993, between the Company and
Chemical Bank New Jersey N.A., is incorporated by
reference to Exhibit 4.3 to the Company's Annual
Report on Form 10-K for the year ended September
30, 1993.
5.1 Opinion of Lowenstein, Sandler, Kohl, Fisher &
Boylan, P.C.
23.1 Consent of Goldstein Golub Kessler & Company, P.C.
<PAGE>
Exhibit No. Description Page No.
23.2 Consent of Lowenstein, Sandler, Kohl, Fisher &
Boylan, P.C. is included in Exhibit 5.1.
24.1 Power of Attorney.
99.1 Vital Signs Investment Plan, as amended.
October 14, 1997
Vital Signs, Inc.
20 Campus Road
Totowa, NJ 07512
Re: Vital Signs Investment Plan
Gentlemen:
You have requested our opinion in connection with the registration with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
of 600,000 shares of common Stock ("Common Stock") of Vital Signs, Inc. (the
"Company") on a registration statement on Form S-8 (the "Registration
Statement"). The shares of Common Stock to which the Registration Statement
relates are issuable pursuant to the Vital Signs Investment Plan (the "Plan").
We have examined and relied upon originals or copies, authenticated or
certified to our satisfaction, of all such corporate records of the Company,
communications or certifications of public officials, certificates of officers,
directors and representatives of the Company, and such other documents as we
have deemed relevant and necessary as the basis of the opinions expressed
herein. In making such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents tendered to us as originals, and
the conformity to original documents of all documents submitted to us as
certified or photostatic copies.
Based upon the foregoing and relying upon statements of fact contained in
the documents which we have examined, we are of the opinion that the shares of
Common Stock offered by the Company pursuant to the Plan, when paid for in full
by the participants in accordance with the Plan, will be, when issued, legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and any amendment thereto.
Very truly yours,
LOWENSTEIN, SANDLER, KOHL,
FISHER & BOYLAN, P.A.
By:________________________
Laura R. Kuntz
LRK/crc
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated November 14, 1996 on the financial
statements of Vital Signs, Inc. included in the Annual Report on Form 10-K of
Vital Signs, Inc. for the fiscal year ended September 30, 1996.
GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
New York, New York
October 15, 1997
POWER OF ATTORNEY
WHEREAS, the undersigned officers and directors of Vital Signs, Inc. desire
to authorize Terry D. Wall, Anthony J. Dimun and Barry Wicker to act as their
attorneys-in-fact and agents, for the purpose of executing and filing a
registration statement of Form S-8, including all amendments thereto,
NOW, THEREFORE,
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Terry D. Wall, Anthony J. Dimun and Barry Wicker,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to sign to Registration Statement of
Form S-8 registering an additional 600,000 shares of the Common Stock of Vital
Signs, Inc. issuable in connection with the Company's Investment Plan, including
any and all amendments and supplements thereto, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this power of attorney in
the following capacities on this 14th day of October, 1997.
SIGNATURE TITLE
/s/ Terry D. Wall President, Chief Executive Officer and Director
______________________
Terry D. Wall
/s/ David J. Bershad Director
______________________
David J. Bershad
/s/Anthony J. Dimun Executive Vice President, Chief
_______________________ Financial Officer, Treasurer and
Anthony J. Dimun Director (Chief Financial and
Accounting Officer)
/s/ Joseph J. Thomas Director
_______________________
Joseph J. Thomas
/s/John Toedtman Director
_______________________
John Toedtman
/s/Barry Wicker Executive Vice President an Director
_______________________
Barry Wicker
VITAL SIGNS INVESTMENT PLAN
(as amended and restated through October 1, 1997)
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 Establishment of the Plan. Vital Signs, Inc., a New Jersey corporation
(hereinafter referred to as the "Company"), pursuant to authorization by its
Board of Directors, hereby establishes a stock purchase and stock option plan to
be known as the "Vital Signs Investment Plan" (hereinafter referred to as the
"Plan"), as set forth in this document. The Plan permits the grant of options to
eligible Employees and Directors upon the purchase of Plan Shares.
Subject to approval of appropriate regulatory authorities, the Plan shall
become effective as of January 21, 1994 (the "Effective Date"), and shall remain
in effect as provided in Section 1.3 hereof.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the success,
and enhance the value, of the Company by linking the personal interests of
Participants to those of Company shareholders, and by providing Participants
with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants upon whose
judgment, interest, and special effort the successful conduct of its business
largely is dependent.
1.3 Duration of the Plan. The Plan shall commence on the Effective Date, as
described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant to
Article 12 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Plan's provisions. In the absence of an amendment
adopted by the Board to extend the Plan, the Plan shall end ten years and one
day after the Effective Date.
ARTICLE 2. DEFINITIONS
Wherever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word is
capitalized:
(a) "Award Agreement" means an agreement to be entered into by and
between the Company and each Participant, setting forth the terms
and conditions applicable to each purchase of Plan Shares under
the Plan, and of the corresponding grant of Options.
(b) "Board" or "Board of Directors" means the Board of Directors of
the Company.
(c) "Base Salary" with respect to a particular Window Period means
(i) in the case of an Employee who has been employed by the
Company or its subsidiaries for at least one year prior to the
first day of such Window Period, the aggregate amount of income
set forth on the Form W-2 provided to a Participant by the
Company or its subsidiaries for the calendar year prior to the
calendar year in which the Window Period occurs, and (ii) in the
case of an Employee who has not been employed by the Company or
its subsidiaries for at least one year prior to the first day of
such Window Period, the annual salary of such Employee at the
commencement of such Window Period. Determinations of Base Salary
shall be made by the Committee in its sole discretion or, upon
delegation by the Committee, by the Plan Administrator.
(d) "Change in Control" shall mean any of the following events:
(i) the acquisition by any one person, or more than one person
acting as a group, of ownership of stock of the Company,
other than any person or group of persons who held such
total voting power on the date that this Plan was first
adopted by the Board, possessing 33-1/3% or more of the
total voting power of the capital stock of the Company;
(ii) the approval by the stockholders of the Company of (i) any
consolidation or merger of the Company in which the holders
of voting stock of the Company immediately before the
consolidation or merger will not own 50% or more of the
voting shares of the continuing or surviving corporation
immediately after such consolidation or merger, or (ii) any
sale, lease, exchange or other transfer (in one transaction
or series of related transactions) of all or substantially
all of the assets of the Company; or
(iii)a change of 50% (rounded to the next whole percent) in the
membership of the Board of Directors within a 12-month
period, unless the election or nomination for election by
stockholders of each new director within such period was
approved by the vote of 80% (rounded to the next whole
person) of the directors then still in office who were in
office at the beginning of the 12-month period.
(e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(f) "Committee" means a committee of the Board of Directors
consisting of Terence D. Wall and Barry Wicker or such other
individuals as the Board shall designate from time to time.
(g) "Company" means Vital Signs, Inc., a New Jersey corporation, or
any successor thereto as provided in Article 15 hereof.
(h) "Director" means any individual who is a member of the Board of
Directors of the Company.
(i) "Disability" shall mean total and permanent disability as
determined by the Committee.
(j) "Disqualifying Termination" for the purposes of this Plan shall
be determined by the Committee, and shall mean a termination of
employment of an Employee or termination of service as a Director
for: (i) an act or acts of dishonesty committed by a Participant;
or (ii) violations by a Participant of the policies and
procedures of the Company applicable to the Participant's
employment or job category or status as a Director which are: (A)
grossly negligent or (B) willful and deliberate.
(k) "Employee" means any employee of the Company or any of its
subsidiaries. The term "Employee" shall include any employee who
is also a Director.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
(m) "Fair Market Value" means the closing sales price for Shares as
quoted on the National Market System of the National Association
of Securities Dealers Automated Quotation System on the relevant
date, or if there were no sales on such date, the closing sales
price for Shares as quoted on the National Market System of the
National Association of Securities Dealers Automated Quotation
System on the first immediately preceding date on which such
price is quoted.
(n) "Fully Paid" means that a Participant has satisfied the full
purchase price for Plan Shares by either (i) paying cash in one
lump sum to the Plan Administrator or (ii) by paying in full, as
determined by the Plan Administrator in accordance with any
payroll deduction program as shall be implemented by the Plan
Administrator with the approval of the Committee. All such
determinations shall be subject to the provisions of Section 6.4
hereof.
(o) "Option" means an option to purchase Shares granted under Article
7 hereof. It is intended that Options under this Plan shall not
be incentive stock options for federal income tax purposes.
(p) "Option Price" means the price at which a Share may be purchased
by a Participant pursuant to an Option, as determined by the
Committee.
(q) "Participant" means an Employee or Director of the Company who
has purchased Plan Shares and who has outstanding an Option
granted under the Plan.
(r) "Plan Administrator" means the individual or committee designated
by the Committee to administer this Plan; or the Committee if no
such designation has been made.
(s) "Plan Shares" means Shares purchased by Participants pursuant to
the terms of Article 6 hereof.
(t) "Retirement" shall have the same meaning herein as under the
Company's 401(k) plan.
(u) "Shares" means the shares of common stock of the Company.
(v) "Window Period" means the time period designated by the Board,
during which eligible Employees and Directors may purchase Plan
Shares, pursuant to the terms of Article 6 hereof. The initial
Window Period shall begin January 21, 1994, and end February 7,
1994. Subsequent Window Periods shall last approximately fifteen
days each, and shall occur, at times designated by the Board; it
is currently intended that Window Periods will occur at six
months intervals.
ARTICLE 3. ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Committee, or by a
Plan Administrator appointed by the Committee. The Plan Administrator shall be
appointed from time to time by, and shall serve at the discretion of, the
Committee. The Committee and the Plan Administrator shall, in turn, retain
independent agents to purchase Shares in the market for purposes of the Plan
unless the Committee determines from time to time that such Shares shall be
issued directly by the Company.
3.2 Authority of the Committee. The Committee shall have the power to
establish performance measures which will govern the number of Options available
in connection with purchases of Plan Shares, to determine the degree to which
the predesignated performance measures are attained by the Company, and to
determine the terms and conditions applicable to purchases of Plan Shares and
grants of Options in a manner consistent with the Plan; to construe and
interpret the Plan and any agreement or instrument entered into under the Plan;
to establish, amend, or waive rules and regulations for the Plan's
administration; and (subject to the provisions of Article 12 hereof) to amend
the terms and conditions of any outstanding Plan Share or Option to the extent
such terms and conditions are within the discretion of the Committee as provided
in the Plan. Further, the Committee shall make all other determinations which
may be necessary or advisable for the administration of the Plan. The Committee
may delegate its authority as identified hereunder to a Plan Administrator or
such other persons as it may deem appropriate.
3.3 Decisions Binding. All interpretations of the Plan, determinations and
decisions made by the Committee pursuant to the provisions of the Plan and all
related orders or resolutions of the Board of Directors shall be final,
conclusive, and binding on all Participants.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3
hereof, the total number of Shares available for purchase as Plan Shares and for
grant under Options pursuant to the Plan may not exceed 900,000. These 900,000
Shares may be either authorized but unissued, or reacquired, Shares. The
following rules will apply for purposes of the determination of the number of
Shares available for grant under the Plan:
(a) the sale of Plan Shares shall reduce the Shares available for
purchase and/or grant under the Plan by the number of Shares
sold; and
(b) unless and until an Option is canceled, lapses, expires, or
terminates, it shall be counted against the authorized pool of
Shares.
No one person participating in the Plan may receive options under the Plan or
under any other benefit plan of the Company for more than an aggregate of
250,000 shares of Common Stock in any fiscal year, subject to adjustment as
provided in Section 4.3 hereof.
4.2 Lapsed Awards. If any Plan Share purchase or Option grant under this
Plan is canceled, terminates, expires, or lapses for any reason, any Plan Shares
and/or any Shares subject to such Option shall again be available for purchase
and/or grant under the Plan.
4.3 Adjustments in Authorized Shares. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, share combination, or other change in the corporate
structure of the Company affecting the Shares, such adjustment shall be made in
the number and class of Shares which may be purchased or delivered under the
Plan, and in the number and class of and/or price of outstanding Plan Shares and
Shares subject to outstanding Options granted under the Plan, as may be
determined to be appropriate and equitable by the Committee, in its sole
discretion, to prevent dilution or enlargement of rights; and provided that the
number of Plan Shares and the Shares subject to any Option shall always be a
whole number. In such event, an appropriate adjustment shall also be made in the
maximum number of shares subject to options which may be granted under the Plan
and under any other benefit plan of the Company to any one person in any fiscal
year.
ARTICLE 5. PARTICIPATION
All persons who are Employees or Directors during a Window Period shall be
given the opportunity to purchase Plan Shares during such Window Period,
provided that such purchases are within the limits set forth in Section 6.2
hereof and provided that in the event that the Board terminates the Plan, no
Employee or Director shall have the right to purchase Plan Shares pursuant to
Article 6 hereof in any Window Period commencing subsequent to such termination.
Each Participant's eligibility for grants of Options pursuant to Article 7
hereof shall be contingent upon the Participant's purchasing Plan Shares, as set
forth in Article 6 hereof.
ARTICLE 6. PURCHASES OF PLAN SHARES
6.1 Plan Share Purchases. An Employee or Director shall only be entitled to
purchase Plan Shares during a Window Period if such Employee or Director is an
Employee or Director, as the case may be, during such Window Period. Each Plan
Share purchased by a Participant under this Plan shall entitle the Participant
to be granted an Option to purchase a specified number of Shares, as set forth
in Article 7 herein. Purchases of Shares by Participants other than pursuant to
this Plan shall not entitle Participants to receive option grants under Article
7 herein.
6.2 Maximum and Minimum Plan Share Purchases. All Plan Share purchases
shall occur during a Window Period. The Fair Market Value of the Plan Shares
purchased shall be determined pursuant to the provisions of Section 6.3 hereof.
For each Window Period, the maximum aggregate Fair Market Value of Plan Shares
which may be purchased by an Employee or Director is the greater of $50,000 or
twice an Employee's annual salary in effect on the first day of the applicable
Window Period, unless the Committee approves a higher limit on a case-by-case
basis with respect to specific Employees or Directors. For any Window Period, no
Employee shall be permitted to purchase Plan Shares having an aggregate Fair
Market Value equal to less than one half of one percent of Base Salary for that
Window Period. For any Window Period, there shall be no minimum number of Plan
Shares which must be purchased by Directors, provided that the number of shares
purchased by any Director must be a whole number.
6.3 Purchase Price. The price of each Plan Share purchased under this Plan
shall equal the Fair Market Value of a Share on the last trading day of the
applicable Window Period.
6.4 Procedure for Purchasing Plan Shares. A Participant who desires to
purchase Plan Shares shall notify the Plan Administrator, in writing, of the
number of Plan Shares to be purchased, and of the desired manner of paying for
the Plan Shares. Subject to Section 6.2 hereof, all applicable rules and
regulations of the United States Securities and Exchange Commission, and the
Plan Administrator's ability to reduce the number of Plan Shares to be purchased
to a whole number, the Plan Administrator shall cause to be issued from the
Company or shall purchase, on behalf of the Participant, the number of Plan
Shares indicated by the Participant, within thirty (30) days after the end of
the applicable Window Period. The Plan Administrator shall establish an account
in the name of each Participant, for the purpose of administering the Plan
Shares purchased by each Participant. The Plan Administrator shall have the
discretion to establish rules and procedures for purchasing Plan Shares on
behalf of Participants, and for administering the Plan Share accounts of
Participants.
In addition, the Plan Administrator shall provide each Participant who
purchases Plan Shares with an Award Agreement, setting forth the terms and
provisions applicable to the Plan Shares purchased, and the Options granted to
the Participant in connection with the purchase of Plan Shares. Purchases
requested by Employees or Directors who fail to execute the Award Agreement
tendered by the Plan Administrator may be voided by the Plan Administrator.
Subject to the terms of the Plan and any terms approved by the Committee, and to
the conditions placed on each Plan Share purchase opportunity, each Participant
shall satisfy the purchase price for Plan Shares by paying cash in one lump sum
to the Plan Administrator. If permitted by the Plan Administrator, an Employee
may satisfy the purchase price for Plan Shares by a combination of paying cash
and payroll deductions.
In the event that any Participant whom the Plan Administrator permits to
pay for Plan Shares through payroll deductions subsequently directs the Plan
Administrator to cease making payroll deductions before all Plan Shares which
the Participant previously indicated he desired to purchase are Fully Paid, then
(i) the Participant will forfeit all Plan Shares which are not then Fully Paid,
(ii) the Participant will forfeit all Options related to any Plan Shares which
are not then Fully Paid and (iii) all Options related to any Fully Paid Plan
Shares will be subject to the Option forfeiture provisions contained in Article
8 hereof. The Participant's Award Agreement will be revised to indicate the
forfeited Plan Shares and Options and the Option forfeiture requirements
described in Article 8 applicable to any other Options.
6.5 Holding Period for Plan Shares. Subject to the terms of this Plan, all
Plan Shares which have been purchased shall be delivered two (2) years from the
date of purchase, provided that such Shares are Fully Paid. To the extent that a
Plan Share is Fully Paid prior to the end of the two (2) year holding period,
and subject to the option forfeiture provisions set forth in Article 8 hereof, a
Participant who is an Employee or Director at the time of the requested
transfer, shall be entitled to sell or otherwise transfer or convey the Plan
Shares (it being understood that the Plan Administrator shall have sole
discretion to determine the extent to which a Plan Share is Fully Paid during
the two (2) year holding period subject to Section 6.4 hereof).
Participants desiring to sell, transfer, or otherwise convey a Fully Paid
Plan Share prior to the end of the two (2) year holding period shall submit a
request in writing to the Plan Administrator for delivery of a Share certificate
representing such Plan Share. Such request shall be accompanied by the
Participant's Award Agreement, representing the grant of Options in connection
with the purchase of the Plan Share. If the Plan Administrator determines that
the Plan Share is Fully Paid, then the Plan Administrator shall deliver to the
Participant a fully executed Share certificate, representing such Plan Share,
and shall document in the Award Agreement of the Participant the corresponding
change in Option forfeiture requirements of the Plan (as set forth in Article 8
hereof).
In the event that prior to the end of the two (2) year holding period, a
Participant's employment with the Company or service as a Director of the
Company terminates, as the case may be, the terms of Article 9 hereof shall
govern the treatment of outstanding Plan Shares.
6.6 Voting Rights. During the two (2) year holding period described in
Section 6.5 hereof and until such Shares are transferred and/or sold,
Participants who have purchased Plan Shares shall be entitled to exercise full
voting rights with respect to such Plan Shares.
6.7 Dividends and Other Distributions. During the two (2) year holding
period described in Section 6.5 hereof, Participants who have purchased Plan
Shares shall be entitled to receive all dividends and other distributions (if
any) paid with respect to such Plan Shares while they are so held, provided that
any such distributions or dividends may be subject to the terms of any
outstanding purchase loan programs. If any such dividends or distributions are
paid in Shares, the Shares shall be converted into additional Plan Shares, and
shall be subject to the same restrictions on transferability and forfeitability
as the Plan Shares with respect to which they were paid.
6.8 Award Agreement. Each purchase of Plan Shares shall be evidenced by an
Award Agreement, setting forth relevant terms and provisions applicable to the
Plan Shares and to the corresponding grant of Options.
ARTICLE 7. STOCK OPTIONS
7.1 Option Grants. Subject to the terms and provisions of the Plan, Options
shall be granted to Participants upon the purchase of Plan Shares as of the last
day of the Window Period during which such Plan Shares have been purchased. The
number of Options to be granted in connection with each purchase of Plan Shares
shall be a function of the degree to which the Company attains predesignated
performance goals.
The Board's or the Committee's determination with respect to the degree of
achievement of the predesignated performance goals shall govern the number of
Shares under option which shall be granted in connection with each Plan Share
purchased. The minimum number of Shares to be granted under option in connection
with the purchase of each Plan Share shall be one (1), and the maximum number
shall be three (3).
The multiple selected by the Board or the Committee shall apply to all Plan
Share purchases during the applicable Window Period. Prior to or at the
beginning of the relevant Window Period, the multiple shall be communicated to
all Employees and Directors.
7.2 Option Price. The Option Price for each option granted under this Plan
shall equal the Fair Market Value of a Share on the last trading day of the
Window Period during which the Option shall have been granted.
7.3 Duration of Options. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
option shall be exercisable later than ten years and one day from the date on
which the Option was granted.
7.4 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and shall be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need not be
the same for each grant or for each Participant; provided, however, that no
Option shall be exercisable within two years after the date of its grant other
than in connection with a Change in Control; and provided further that the
exercise provisions of each Option shall be consistent with Article 8 hereof.
7.5 Payment. Options shall be exercised by the delivery of a written notice
of exercise to the Plan Administrator, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment for
the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price, or (c) by a combination of both such
approaches.
The Committee also may allow cashless exercises as permitted under the
Federal Reserve Board's Regulation T, subject to applicable legal restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purposes and applicable law.
As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount, based upon the
number of Shares purchased under the Option(s).
7.6 Restrictions on Share Transferability. The Committee shall impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under
the Plan as it may deem advisable, including, without limitation, restrictions
under applicable Federal securities laws, under the requirements of NASDAQ or
any stock exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
Shares.
7.7 Nontransferability of Options. No Option granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. During a
Participant's lifetime, all Options granted to a Participant under the Plan
shall be exercisable only by such Participant, except as set forth in Section
7.9 hereof.
7.8 No Rights as a Shareholder. Prior to the purchase of Shares pursuant to
an Option, a Participant shall not have the rights of a shareholder with respect
to such Shares.
7.9 Exercise of Options With Respect to Incapacitated Participants. If a
Participant, who has met the holding period described in Section 6.5 hereof or
has completed five (5) years of continuous employment or service as a Director
subsequent to the purchase of Plan Shares, is under a legal disability or in the
Committee's opinion incapacitated in any way so as to be unable to manage his or
her financial affairs, the Committee may allow such Participant's legal
representative to exercise the Participant's Options on behalf of the
Participant. Actions taken pursuant to this Section by the Committee shall
discharge all liabilities under the Plan.
ARTICLE 8. PREMATURE DISPOSITION OF PLAN SHARES
Except as otherwise provided in Section 9.1, in the event a Plan
Participant (i) sells, transfers or otherwise conveys a Fully Paid Plan Share
prior to the end of the two (2) year holding period described in Section 6.5
hereof or (ii) directs the Plan Administrator to cease making payroll deductions
before all Plan Shares which the Participant previously indicated he desired to
purchase are Fully Paid, then in each such case, the right to exercise the
Options granted in connection with the purchase of a Fully Paid Plan Share shall
be contingent upon the Participant's completion of five (5) years continuous (a)
employment with the Company or any of its subsidiaries or (b) service as a
Director of the Company subsequent to the last day of the Window Period in which
the Participant agreed to purchase such Plan Share.
ARTICLE 9. TERMINATION OF EMPLOYMENT OR SERVICE AS A DIRECTOR
9.1 Termination by Reason of Death, Disability or Retirement. In the event
the employment or service as a Director of a Participant is terminated by reason
of death, Disability, or Retirement, the following provisions shall apply:
(a) Treatment of Plan Shares. The Participant will be credited with
all Plan Shares which are Fully Paid as of the date of employment
termination or termination of service as a Director (in the case
of Disability, the Plan Administrator shall determine the date
that employment or service as a Director is deemed to have
terminated). If, at the time of employment termination or
termination of service as a Director, the Participant has not
Fully Paid all outstanding Plan Shares purchased, the number of
Plan Shares which shall be deemed Fully Paid shall be determined
at the sole discretion of the Plan Administrator, subject to
Section 6.4 hereof.
All outstanding Plan Shares which are not Fully Paid as of the
date of employment termination or termination of service as a
Director (as determined by the Plan Administrator, subject to
Section 6.4) shall be forfeited to the Company, and shall once
again become available for purchase under the Plan.
If a Participant's death, Disability, or Retirement occurs after
the delivery of Plan Shares to him or her, such Plan Shares shall
not be affected by the employment termination or termination of
service as a Director.
(b) Treatment of Stock Options. All outstanding Options granted to
the Participant corresponding to Plan Shares Fully Paid for prior
to the Participant's termination of employment or termination of
service as a Director which are then exercisable (and,
accordingly, which have been held at least two years from the
grant date) (collectively, the "Covered Options"), shall not be
forfeitable pursuant to Article 8 (if applicable) in the event of
death or Disability, but shall be forfeitable pursuant to Article
8 (if applicable) in the event of Retirement and, if not so
forfeitable, shall remain exercisable at any time prior to their
expiration date, or for one (1) year after the date of death,
Disability, or Retirement, whichever period is shorter, by the
Participant or by such person or persons that have acquired the
Participant's rights under the Option by will or by the laws of
descent and distribution. The Plan Administrator shall, in all
cases, determine the date of employment termination or
termination of service as a Director. All Options granted to the
Participant pursuant to the Plan other than the Covered Options
shall be forfeited and shall once again be available for grant
under the Plan.
(c) Amounts Subject to Dispute. If at the time of a Participant's
death, the Plan Administrator is unable to determine what person,
persons or entity is entitled to exercise Options on behalf of
the Participant, the Plan Administrator shall not be required to
implement any directions to exercise such Options or deliver Plan
Shares to any such person, persons or entity during the pendency
of such dispute. Neither the Plan Administrator, the Committee or
the Company shall be responsible for a failure to implement such
exercise instructions or to deliver such Plan Shares during the
pendency of such dispute, notwithstanding the fact that such Plan
Shares or Options may diminish in value or expire during the
pendency of such dispute.
9.2 Disqualifying Termination. In the event that the Company or its
subsidiaries terminates the employment or service as a Director of a Participant
as a result of a Disqualifying Termination, the following provisions shall
apply:
(a) Treatment of Plan Shares. The Participant will be credited with
all Plan Shares which are Fully Paid as of the date of
termination. The number of Plan Shares which are Fully Paid for
as of such date shall be determined according to the guidelines
set forth in Section 9.1(a) hereof. All outstanding Plan Shares
which are not Fully Paid as of the date of termination shall be
forfeited to the Company and shall once again become available
for purchase under the Plan.
Plan Shares which have been delivered to a Participant prior to
termination shall not be affected by this provision.
(b) Treatment of Stock Options. Upon such a termination, a
Participant shall forfeit all Options, which Options shall
thereafter once again become available for grant under the Plan.
9.3 Other Termination. In the event a Participant's employment or service
as a Director is terminated for reasons other than death, Disability, Retirement
or Disqualifying Termination, the following provisions shall apply:
(a) Treatment of Plan Shares. The Participant will be credited with
all Plan Shares which are Fully Paid as of the date of employment
termination or termination of service as a Director. The number
of Plan Shares which are Fully Paid for as of such date shall be
determined according to the guidelines set forth in Section
9.1(a) hereof. All outstanding Plan Shares which are not Fully
Paid as of the date of employment termination or termination of
service as a Director shall be forfeited to the Company and shall
once again become available for purchase under the Plan.
Plan Shares which have been delivered to a Participant prior to
employment termination or termination of service as a Director
shall not be affected by this provision.
(b) Treatment of Stock Options. Upon such a termination, a
Participant shall forfeit (i) all Options for which the
requirements of Article 8 (if applicable) have not been met, and
(ii) all other Options granted to the Participant under the Plan
which do not constitute Covered Options.
Covered Options for which the requirements of Article 8 (if
applicable) have been met may be exercised by the Participant
within the period beginning on the effective date of employment
termination or termination of service as a Director, and ending
three (3) months after such date.
Notwithstanding any provision in this Plan to the contrary, in the event that an
employee continues to serve as a director or consultant to the Company or any of
its subsidiaries after such employee ceases to be employed by the Company or any
of its subsidiaries, the Board shall have the discretion to provide that the
employee shall, for purposes of this Plan, be deemed to continue in the
employment of the Company until such time that such person ceases to serve as a
director of, consultant to or employee of the Company or any of its
subsidiaries.
ARTICLE 10. RIGHTS OF PARTICIPANTS
Nothing in the Plan shall interfere with or limit in any way the right of
the Company to terminate any participating Employee's employment at any time or
to dismiss any participating Director at any time, nor confer upon any
Participant any right to continue in the employ of the Company or as a Director
of the Company.
ARTICLE 11. CHANGE IN CONTROL
If the Board so determines at any time, the following provisions shall
apply if a Change in Control occurs after such determination:
(a) Any and all Options granted hereunder corresponding to Fully Paid
Shares (as determined by the Plan Administrator) shall become
immediately exercisable (and shall remain exercisable throughout
their entire term); all other Options granted hereunder shall be
forfeited to the Company;
(b) The Company shall deliver all Plan Shares which are Fully Paid as
of the effective date of the Change in Control (the Plan
Administrator shall have the authority to determine the number of
Plan Shares which are Fully Paid as of such date subject to
Section 6.4 hereof, and to establish procedures for the delivery
of such Shares to Participants), and all remaining Plan Shares
shall be forfeited to the Company; and
(c) Subject to the other provisions of this Plan, the Committee shall
have the authority to make any modifications to the Plan Shares
and Options as are determined by the Committee to be appropriate
before the effective date of the Change in Control.
ARTICLE 12. AMENDMENT, MODIFICATION AND TERMINATION
12.1 Amendment. Modification and Termination. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend or
modify the Plan. Any such termination shall be effective with respect to all
subsequent Window Periods.
12.2 Awards Previously Granted. No termination, amendment or modification
of the Plan shall adversely affect in any material way any Plan Share previously
purchased or Option previously granted under the Plan, without the written
consent of the Participant holding such Plan Share or Option.
ARTICLE 13. WITHHOLDING
13.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of this Plan.
13.2 Share Withholding. With respect to withholding required upon the
exercise of Options, upon the purchase of Plan Shares, or upon any other taxable
event hereunder, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date the
tax is to be determined equal to the minimum statutory total tax which could be
imposed on the transaction. All elections shall be irrevocable, made in writing,
signed by the Participant, and comply with all procedures established by the
Committee for Share withholding.
In addition, subject to the approval of the Committee, Participants may
satisfy the tax withholding obligation arising as a result of any taxable event
occurring hereunder, by remitting to the Plan Administrator previously held
Shares having an aggregate Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction; provided, however, that any Shares which are so tendered must
have been beneficially owned by the Participant for at least six (6) months
prior to the date of their tender.
ARTICLE 14. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, the Board,
or the Plan Administrator, and each agent retained by the Plan Administrator,
shall be, indemnified and held harmless by the Company against and from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken in good faith or any good faith
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company's approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Certificate of
Incorporation or By-Laws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.
ARTICLE 15. SUCCESSORS
All obligations of the Company under the Plan, with respect to Plan Shares
purchased and Options granted hereunder, shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.
ARTICLE 16. LEGAL CONSTRUCTION
16.1 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular and the singular shall include the plural.
16.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
16.3 Requirements of Law. The purchase of Plan Shares, the granting of
Options, and the issuance of Shares under the Plan, shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
16.4 Governing Law. To the extent not pre-empted by Federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of New Jersey.
