<PAGE>
As Filed With the Securities and Exchange Commission on March 20, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PREMIER LASER SYSTEMS, INC.
---------------------------
(Exact Name of Issuer as Specified in its Charter)
<TABLE>
<S> <C>
CALIFORNIA 33-0476284
- ---------- ----------
State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
</TABLE>
3 MORGAN
IRVINE, CALIFORNIA 92618
------------------------
(Address of Principal Executive Offices)
1996 STOCK OPTION PLAN OF
PREMIER LASER SYSTEMS, INC.
---------------------------
(Full Title of the Plan)
COLETTE COZEAN, PH.D.
3 MORGAN
IRVINE, CALIFORNIA 92618
------------------------
(Name and Address of Agent for Service)
(714) 859-0656
--------------
(Telephone Number)
COPY TO:
-------
Natalie Sibbald Dundas, Esq.
Rutan & Tucker
611 Anton Boulevard, Suite 1400
Costa Mesa, California 92626
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================================================
Proposed Proposed Amount of
Title of Securities Amount to be Maximum Offering Maximum Aggregate Registration
to be Registered/(1)/ Registered/(1)/ Price Per Share Offering Price Fee
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Class A Common Stock, no par value... 497,000 shares $ 6.1250/(2)/ $3,044,125 $898.02
- -------------------------------------------------------------------------------------------------------------
Class A Common Stock, no par value... 3,000 shares $10.75 /(3)/ $ 32,250 $ 9.51
- -------------------------------------------------------------------------------------------------------------
Total........................... 500,000 shares $3,076,375 $907.53
=============================================================================================================
</TABLE>
(1) Pursuant to Rule 416, also covers such additional securities that may be
offered as a result of stock splits, stock dividends or similar
transactions.
(2) Relates to options previously issued; computed pursuant to Rule 457(h).
(3) Relates to shares underlying options not yet issued; computed pursuant to
Rules 457(c) and 457(h) on the basis of the last sale price on the NASDAQ
National Market on March 18, 1998.
================================================================================
<PAGE>
INTRODUCTION
This Registration Statement on Form S-8 is filed by Premier Laser Systems,
Inc., a California corporation (the "Company" or "Registrant"), relating to
500,000 shares of its common stock, no par value (the "Common Stock") issuable
to eligible officers, directors, employees and consultants of the Company
("Participants") under the 1996 Stock Option Plan of Premier Laser Systems, Inc.
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
ITEM 1. Plan Information.
----------------
Not filed as part of this Registration Statement pursuant to Note to
Part 1 of Form S-8.
ITEM 2. Registrant Information and Employee Plan Annual Information.
-----------------------------------------------------------
Not filed as part of this Registration Statement pursuant to Note to
Part 1 of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents, which previously have been filed by the
Company with the Securities and Exchange Commission (the "Commission"), are
incorporated herein by this reference and made a part hereof:
1. The Company's Current Report on Form 8-K, as filed with the
Commission on March 9, 1998.
2. The Company's Current Report on Form 8-K, as filed with the
Commission on December 30, 1997.
3. The Company's Current Report on Form 8-K, as filed with the
Commission on December 8, 1997.
4. The Company's Current Report on Form 8-K, as filed with the
Commission on October 15, 1997, and amended by Form 8-K/A filed with the
Commission on November 14, 1997.
-2-
<PAGE>
5. The Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997, filed with the Commission on May 28, 1997 pursuant to Section
13(a) of the Exchange Act and amended by Form 10-K/A filed with the Commission
on June 18, 1997.
6. The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1997, filed with the Commission on February 17, 1998, pursuant to
Section 13 or 15(d) of the Exchange Act.
7. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, filed with the Commission on November 14, 1997, pursuant to
Section 13 or 15(d) of the Exchange Act, and amended by Form 10-Q/A filed with
the Commission on November 26, 1997.
8. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997 filed with the Commission on August 14, 1997, pursuant to Section
13 or 15(d) of the Exchange Act.
9. The Company's Proxy Statement for the Annual Meeting of Shareholders
held August 28, 1997.
10. The description of the Company's Class A Common Stock contained in
the Company's Registration Statement on Form 8-A previously filed under the
Exchange Act on December 7, 1994, as amended January 30, 1995, together with any
amendment or report filed pursuant to such act amending or updating such
description.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
hereto, which indicates that all securities offered hereunder have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents.
For purposes of this Registration Statement, any document or any
statement contained in a document incorporated or deemed to be incorporated
herein by reference shall be deemed to be modified or superseded to the extent
that a subsequently filed document or a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
herein by reference modifies or supersedes such document or such statement in
such document. Any statement so modified or superseded shall not be deemed,
except as to modified or superseded, to constitute a part of this Registration
Statement.
The Company shall provide without charge to each Participant for
whom this Prospectus is delivered, upon written or oral request of such person,
a copy of any and all of the information that has been incorporated by reference
in the Registration Statement. Such requests should be directed to: Chief
Financial Officer, Premier Laser Systems, Inc., 3 Morgan, Irvine, California
92618, (714) 859-0656.
-3-
<PAGE>
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 California General Corporations Law provides that California
corporations may include provisions in their articles of incorporation relieving
directors of monetary liability for breach of their fiduciary duty as directors,
except for the liability of a director resulting from (i) any transaction from
which the director derives an improper personal benefit, (ii) acts or omissions
involving intentional misconduct or a knowing and culpable violation of law,
(iii) acts or omissions that a director believes to be contrary to the best
interests of the Registrant or its shareholders or that involves the absence of
good faith on the part of the director (iv) acts or omissions constituting an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the Registrant or its shareholders, (v) acts or omissions showing a
reckless disregard for the director's duty to the Registrant or its shareholders
in circumstances in which the director was aware or should have been aware, in
the ordinary course of performing a director's duties, of a risk of serious
injury to the Registrant or its shareholders, (vi) any improper transaction
between a director and the Registrant in which the director has a material
financial interest, or (vii) the making of an illegal distribution to
shareholders or an illegal loan or guaranty. The Registrant's Articles of
Incorporation provide that the Registrant's directors are not liable to the
Registrant or its shareholders for monetary damages for breach of their
fiduciary duties to the fullest extent permitted by California law.
The inclusion of the above provision in the Articles of Incorporation
may have the effect of reducing the likelihood of derivative litigation against
directors and may discourage or deter shareholders or management from bringing a
lawsuit against directors for breach of their duty of care, even though such an
action, if successful, might otherwise have benefitted the Registrant and its
shareholders. Presently, there is no litigation or proceeding pending involving
a director of the Registrant as to which indemnification is being sought, nor is
the Registrant aware of any threatened litigation that may result in claims for
indemnification by any director.
The Registrant's Articles of Incorporation provide that the Registrant
shall indemnify its directors and officers to the fullest extent permitted by
California law, including circumstances in which indemnification is otherwise
discretionary under California law. Since the California statute is
nonexclusive, it is possible that certain claims beyond the scope of the statute
may be indemnifiable. Accordingly, the Registrant has also entered into an
indemnification agreement (the "Indemnification Agreement") with certain of its
directors and officers that requires the Registrant to indemnify such directors
and officers to the fullest extent permitted by law. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant, the Registrant has
-4-
<PAGE>
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.
It is intended that the Indemnification Agreements provide a scheme of
indemnification which may be broader than that specifically provided by the
California statute. It has not yet been determined, however, the degree to
which the indemnification expressly permitted by the California statute may be
expanded.
Set forth below is a description of the principal provisions of the
Indemnification Agreement:
First, the Indemnification Agreement imposes upon the Company the burden
of proving that the indemnified party has not met the applicable standard of
conduct required for indemnification. The California statute requires a finding
by the Board of Directors, independent legal counsel, or the shareholders that
the applicable standard of conduct has been met.
Second, the Indemnification Agreement provides that litigation expenses
shall be advanced to an indemnified party at his request, against an undertaking
to repay the amount advanced if it is ultimately determined that he is not
entitled to indemnification for such expenses. The California statute provides
that such expenses may be advanced against such an undertaking, upon
authorization by the Board of Directors.
Third, in the event the Company does not pay a requested indemnification
amount, the Indemnification Agreement allows such indemnified party to contest
this determination by petitioning a court to make an independent determination
of whether such indemnified party is entitled to indemnification under the
Indemnification Agreement. The California statute does not set forth the
procedure for contesting a corporation's determination of a party's right to
indemnification.
Finally, the Indemnification Agreement explicitly provides that actions
by an Indemnified Party at the request of the Company as a director, officer or
agent of an employee benefit plan, corporation, partnership, joint venture or
other enterprise owned or controlled by the Company shall be covered by the
indemnification. The California statute does not specifically address this
issue. It does, however, provide that to the extent that an indemnified party
has been successful on the merits, he shall be entitled to such indemnification.
The Company is not aware of any threatened litigation or proceeding
which may result in a claim for indemnification under the Indemnification
Agreement by any director or officer.
ITEM 7. Exemption from Registration Claimed.
-----------------------------------
Not Applicable
-5-
<PAGE>
ITEM 8. Exhibits.
--------
4.1 1996 Stock Option Plan of Premier Laser Systems, Inc.*
5. Opinion of Rutan & Tucker, LLP regarding legality.*
23.1 Consent of Rutan & Tucker, LLP (included in Exhibit 5).
23.2 Consent of Price Waterhouse LLP*.
23.3 Consent of Ernst & Young LLP*.
23.4 Consent of Ernst & Young LLP*.
23.5 Consent of Coopers & Lybrand L.L.P.*
____________________
* Filed herewith
ITEM 9. Undertakings.
------------
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 (unless the
information required by paragraphs (i) and (ii) below 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):
(i) To include any prospectus required by Section 10(a)(3) of the
Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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.
-6-
<PAGE>
(2) That, for the purpose of determining any liability under the 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 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 the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liability arising under the 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 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 Act and will be governed by the final adjudication of
such issue.
-7-
<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 Irvine, State of California on February 12, 1998.
PREMIER LASER SYSTEMS, INC.,
a California corporation
By: /s/ COLETTE COZEAN
---------------------------------------------
Colette Cozean, President, Chief Executive
Officer and Chairman of the Board of Directors
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons, including a
majority of the Board of Directors, in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ COLETTE COZEAN
- ------------------------- President, Chief Executive February 12, 1998
COLETTE COZEAN Officer and Chairman of the
Board of Directors
/s/ MICHAEL L. HIEBERT
- ------------------------- Chief Financial Officer and February 9, 1998
MICHAEL L. HIEBERT Vice President Finance
(Principal Financial Officer and
Principal Accounting Officer)
/s/ PATRICK J. DAY
- ------------------------- Director February 9, 1998
PATRICK J. DAY
/s/ G. LYNN POWELL
- ------------------------- Director February 12, 1998
G. LYNN POWELL, D.D.S.
/s/ E. DONALD SHAPIRO
- ------------------------- Director February 13, 1998
E. DONALD SHAPIRO
/s/ GRACE CHING-HSIN LIN
- ------------------------- Director February 9, 1998
GRACE CHING-HSIN LIN
</TABLE>
<PAGE>
EXHIBITS INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
4.1 1996 STOCK OPTION PLAN OF PREMIER LASER SYSTEMS, INC.*..... --
5. OPINION OF RUTAN & TUCKER, LLP*............................ __
23.1 CONSENT OF RUTAN & TUCKER, LLP (included in Exhibit 5)..... --
23.2 CONSENT OF PRICE WATERHOUSE LLP*........................... --
23.3 CONSENT OF ERNST & YOUNG LLP*.............................. --
23.4 CONSENT OF ERNST & YOUNG LLP*.............................. --
23.5 CONSENT OF COOPERS & LYBRAND L.L.P.*....................... --
</TABLE>
__________________
* Filed herewith.
<PAGE>
EXHIBIT 4.1
1996 STOCK OPTION PLAN
OF
PREMIER LASER SYSTEMS, INC.
ARTICLE I
GENERAL PROVISIONS
------------------
1.1 Purpose. Premier Laser Systems, Inc. (the "Company") proposes to
-------
grant to selected key employees (including officers and directors who are
employees) of the Company (hereinafter referred to as "Eligible Employees") and
to key persons performing services as independent contractors and not as
employees or members of the Board of Directors ("Eligible Consultants") options
to purchase shares of Class A common stock, no par value, of the Company
("Common Stock") for the purposes of (i) furnishing to such Eligible Employees
and Eligible Consultants incentives to improve operations and increase profits
of the Company, (ii) encouraging such Eligible Employees to accept or continue
employment with the Company and its subsidiaries, and (iii) encouraging Eligible
Consultants to begin or continue providing services to the Company. Such options
will be granted pursuant to the plan herein set forth, which shall be known as
the 1996 Stock Option Plan of Premier Laser Systems, Inc. (herein referred to as
the "Plan").
The Company also proposes to grant to members of the Board of Directors of
the Company (the "Board of Directors") who are not officers or employees of the
Company at the time of a grant (hereinafter referred to as "Non-Employee
Directors") options to purchase shares of Common Stock pursuant to the Plan.
The purpose of such grants is to (i) provide incentives for highly qualified
individuals to stand for election to the Board of Directors and continue service
on the Board of Directors, (ii) provide incentives to promote long-term
shareholder value, and (iii) promote a greater identity of interest between Non-
Employee Directors and the Company's shareholders.
Eligible Employees, Eligible Consultants and Non-Employee Directors who are
granted options pursuant to the Plan are sometimes collectively referred to
herein as "Optionees."
1.2 Shares Subject to the Plan. Subject to adjustment as provided in
--------------------------
Section 1.4 and Section 1.12.3 (the "Adjustment Provisions"), the aggregate
number of shares of Common Stock to be delivered upon exercise of all options
granted under the Plan shall not exceed 500,000 shares. The shares of Common
Stock issuable upon exercise of options granted under the Plan may be authorized
and unissued shares or reacquired shares. In the event the number of shares to
be delivered upon the exercise in full of any option granted under the Plan is
reduced for any reason whatsoever or in the event any option granted under the
Plan for any reason shall expire or shall terminate unexercised as to all or any
shares covered thereby, the number of shares no longer subject to any such
option shall thereupon be released from such option and shall thereafter be
available to be re-optioned under the Plan, subject to the limitations, if any,
imposed by the Internal Revenue Code of 1986, as amended (the "Code") on the
availability for regrant of options previously granted pursuant to Article III.
The Compensation Committee of the Board of Directors or such other committee of
the Board of Directors which shall succeed to the functions and responsibilities
of the Compensation Committee (the "Committee") shall have the authority to
effect, at any time and from time to time, (i) the repricing of any outstanding
options under the Plan, and/or (ii) with the consent of the affected holders of
options, the cancellation of any outstanding options under the Plan and the
grant in substitution therefor of new options under the Plan pursuant to terms
consistent therewith, covering the same or different numbers of shares of stock,
provided, however, that no option granted pursuant to Article III shall be
repriced or regranted on terms that would constitute a "modification" within the
meaning of Section 424(h)(3) of the Code which would
<PAGE>
disqualify such option as an incentive stock option described in Section 422 of
the Code unless the Company and the holder of such option shall so agree. Shares
issued pursuant to the exercise of options granted under the Plan shall be fully
paid and nonassessable.
1.3 Administration of the Plan. Subject to the provisions of the Plan,
--------------------------
the Committee shall have the authority to (a) determine the provisions of the
options to be granted under the Plan, (b) interpret the Plan and all options
granted under the Plan, (c) adopt, amend or rescind such rules as it deems
necessary for the proper administration of the Plan, (d) make all other
determinations necessary or advisable for the administration of the Plan, and
(e) correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any option granted under the Plan in the manner and to the extent
that the Committee deems desirable to carry the Plan or any option into effect.
The Board of Directors shall have the power to add or remove members of the
Committee from time to time, to fill vacancies thereon arising by resignation,
death, removal, or otherwise, and shall designate a chairman from among the
members of the Committee, which chairman shall preside at all meetings of the
Committee. Meetings shall be held at such times and places as shall be
determined by the Committee. A majority of the members of the Committee shall
constitute a quorum for the transaction of business, and the vote of a majority
of those members present at any meeting shall decide any question brought before
that meeting. The actions of the Committee in exercising all of the rights,
powers and authorities set out in the Plan, when performed in good faith and in
its sole judgment, shall be final and conclusive. When appropriate, the Plan
shall be administered in order to qualify certain of the options granted
hereunder as "incentive stock options" described in section 422 of the Code.
The Committee shall consist of at least two members of the Board of
Directors. Other than options granted to Non-Employee Directors pursuant to
Article IV, no options may be granted under the Plan to any member of the
Committee during such member's term of membership on the Committee. No person
shall be eligible to serve on the Committee unless such person is then a
"disinterested person" within the meaning of Rule 16b-3 ("Rule 16b-3")
promulgated under the Securities Exchange Act of 1934, as amended (the "Act"),
or any similar or successor rule. The members of the Committee shall be solely
"outside directors," within the meaning of section 162(m) of the Code and
applicable interpretive authority thereunder (including the transitional rules
of Proposed Treasury Regulation Section 1.162-27).
Notwithstanding any provision of the Plan, the Committee may not exercise
any discretion with respect to any option granted pursuant to Article IV which
would be inconsistent with the intent that (i) the Plan meet the requirements of
Rule 16b-3 and (ii) any Non-Employee Director who is eligible to receive a grant
or to whom a grant is made pursuant to Article IV will not for such reason cease
to be a "disinterested person" within the meaning of such Rule 16b-3 with
respect to the Plan and other stock related plans of the Company or any of its
affiliates. Specifically, in the event of a Corporate Change, as defined in
Section 1.11, the Committee may, with respect to options granted under Article
IV, only exercise such authority as would not violate the limitations contained
in the immediately preceding sentence. If any Plan provision is found not to be
in compliance with Rule 16b-3 or if any Plan provision would disqualify any Non-
Employee Director from remaining a "disinterested person," that provision shall
be deemed amended so that the Plan does so comply and the Plan participants
remain disinterested, to the extent permitted by law and deemed advisable by the
Committee, and in all events the Plan shall be construed in favor of its meeting
the requirements of Rule 16b-3.
1.4 Amendment and Discontinuance of the Plan. The Board of Directors may
----------------------------------------
amend, suspend or terminate the Plan; provided, however, that each such
amendment of the Plan (a) extending the period within which options may be
granted under the Plan, (b) increasing the aggregate number of shares of
Common Stock to be optioned under the Plan except as provided in the Adjustment
Provisions, (c)
-2-
<PAGE>
materially modifying the requirements as to eligibility of employees or
consultants receiving options under, or changing the eligibility of employees or
consultants or class of employees or consultants to whom options may be granted
under, Article II or III, as applicable, (d) materially increasing the benefits
to optionees under the Plan, (e) modifying the provisions of Article IV, or (f)
granting options to Non-Employee Directors other than pursuant to Article IV,
shall, in each case, be subject to approval by the shareholders of the Company;
provided, further, however, that no amendment, suspension or termination of the
Plan shall be made which may cause the Plan to fail to meet the requirements of
Rule 16b-3 (including, without limitation, the requirements of Rule 16b-
3(c)(2)(i)(A) and Rule 16b-3(c)(2)(ii)) or may, without the consent of the
holder of an option granted under Article II, III, or IV, terminate such option
or adversely affect such person's rights in any material respect (except as set
forth in the Plan). Furthermore, the Board of Directors may alter, amend,
suspend, discontinue or terminate the Plan and any option granted hereunder,
without the approval of the shareholders of the Company or any holder of any
option thereby affected, if necessary in order to (a) enable the Plan and any
option granted hereunder intended to be so qualified, to qualify for (i) the
exemption provided by Rule 16b-3, (ii) the benefits provided under section 422
of the Code, or (iii) the exclusion for qualified performance-based compensation
under Section 162(m) of the Code and the applicable interpretive authority
thereunder (including the transitional rules of Proposed Treasury Regulation
Section 1.62-27), and (b) comply with changes in the Code, the Employee
Retirement Income Security Act or any other applicable law (including, with
respect to any of the foregoing, changes in any rule, regulation or other
interpretive authority). The provisions of Section 4.5 shall also apply with
respect to the amendment of options granted under Article IV hereof.
1.5 Granting of Options to Employees. The Committee shall have authority
--------------------------------
to grant, prior to the expiration date of the Plan, to (i) Eligible Employees
and Eligible Consultants options to purchase, on the terms and conditions
hereinafter set forth in Article II, and (ii) Eligible Employees options to
purchase, on the terms and conditions hereinafter set forth in Article III,
authorized but unissued, or reacquired, shares of Common Stock, provided such
grants shall be made only to those Eligible Employees and Eligible Consultants,
in such amounts and at such times as determined in the discretion of the
Committee, and, for this purpose, the Committee may consider the Eligible
Employee's or Eligible Consultant's office or position, degree of responsibility
for, and contribution to, the growth and success of the Company, length of
service, promotions, potential and any other factors which it may deem relevant.
Options granted to Eligible Employees under Section III shall be "incentive
stock options" within the meaning of section 422(b) of the Code, and are
hereinafter referred to as "incentive stock options." All other options granted
to Eligible Employees and all options granted to Eligible Consultants under the
Plan shall be granted pursuant to Article II, and are hereinafter referred to as
"nonqualified options."
1.6 Granting of Options to Non-Employee Directors. All options granted to
---------------------------------------------
Non-Employee Directors shall be options to purchase, on the terms and conditions
hereinafter set forth in Article IV, authorized but unissued, or reacquired,
shares of Common Stock and shall be nonqualified options.
1.7 Option Agreements. Each option granted under the Plan shall be
-----------------
evidenced by a written agreement between the Company and the applicable optionee
and shall contain such terms and conditions, and may be exercisable for such
periods, as may be approved by the Committee, which terms and conditions need
not be identical but which must be in compliance with the terms and provisions
hereof.
1.8 Effective Date. The Plan shall become effective as of the date the
--------------
Plan is approved by the shareholders of the Company (the "Effective Date").
Except with respect to options then outstanding, if not sooner terminated under
Section 1.4, the Plan shall terminate upon, and no further options shall be
granted after, the expiration of ten years from the Effective Date.
-3-
<PAGE>
1.9 Rule 16b-3 Compliance. The Company intends:
---------------------
(a) that the Plan meet the requirements of Rule 16b-3;
(b) that participation by Non-Employee Directors under Article
IV will not prohibit them from being "disinterested persons" within
the meaning of Rule 16b-3 with respect to administration of the Plan
or with respect to administration of any other plan of the Company;
(c) that transactions of the type specified in the first
paragraph of Rule 16b-3 by Non-Employee Directors pursuant to Article
IV will be exempt from the operation of Section 16(b) of the Act; and
(d) that transactions of the type specified in the first
paragraph of Rule 16b-3 by officers of the Company (whether or not
they are directors) pursuant to the Plan will be exempt from the
operation of Section 16(b) of the Act. In all cases, the terms,
provisions, conditions and limitations of the Plan shall be construed
and interpreted consistent with the Company's intent as stated in this
Section 1.9.
1.10 Recapitalization or Reorganization. If at any time or from time to
----------------------------------
time after the grant of any option hereunder there is a capital reorganization
of the Common Stock, then the Optionee shall be entitled to receive upon the
exercise of an option, in lieu of the Common Stock, the number of shares of
stock or other securities or property of the Company to which a holder of the
number of shares of Common Stock deliverable upon exercise of such option would
have been entitled as a result of such capital reorganization. If the Company
shall merge with another corporation and the Company is the surviving
corporation in such merger and under the terms of such merger the Common Stock
outstanding immediately prior to the merger remain outstanding and unchanged,
any option granted hereunder shall continue to apply to the Common Stock thereto
and shall also pertain and apply to any additional securities and other
property, if any, to which a holder of the number of shares of Common Stock
deliverable upon exercise of such option would have been entitled as a result of
the merger. If (i) the Company shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an
entity other than a previously wholly-owned subsidiary of the Company), (ii) the
Company sells, leases or exchanges all or substantially all of its assets to any
other person or entity (other than a wholly-owned subsidiary of the Company),
(iii) the Company is to be dissolved and liquidated, or (iv) any person or
entity, including a "group" as contemplated by Section 13(d)(3) of the Act,
acquires or gains ownership or control (including, without limitation, power to
vote) of more than 50% of the outstanding shares of the Company's voting stock
(based upon voting power), (each such event is referred to herein as a
"Corporate Change"), then all options granted hereunder, including that portion
not then otherwise vested, shall become exercisable in full effective
immediately prior to the consummation of the Corporate Change, provided that the
exercise of any such option that would not have been vested in the absence of
the Corporate Change shall be conditioned upon the occurrence of the Corporate
Change (i.e., so that if the Corporate Change does not subsequently occur, the
unvested portion of the option shall vest according to its original terms), and
provided further, however, in no event shall any incentive stock option, without
the consent of the holder thereof, first become exercisable pursuant hereto if
the result would be to cause such option, when granted, not to be treated as an
incentive stock option (whether or not by reason of the possible future
violation of the annual limitation set forth in Section 3.3.3 or otherwise).
1.11 Foreign Options and Rights. The Committee may grant options to
--------------------------
Eligible Employees, Eligible Consultants and Non-Employee Directors who are
subject to the tax laws of nations other than
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<PAGE>
the United States, which options may have terms and conditions as determined by
the Committee as necessary to comply with applicable foreign laws. The Committee
may take any action which it deems advisable to obtain approval of any such
option by the appropriate foreign governmental entity; provided, however, that
no such option may be granted pursuant to this Section 1.11 and no action may be
taken which would result in a violation of the Act, the Code or any other
applicable law.
1.12 General Terms and Conditions of Options. Options granted under the
---------------------------------------
Plan shall be subject to the following terms and conditions and may contain such
additional terms and conditions, not inconsistent with law or the Article
pursuant to which such option was granted, as the Committee shall deem
desirable:
1.12.1 Manner of Exercise. In order to exercise all or a portion of
------------------
any option granted under the Plan, an Optionee shall deliver to the Company
payment in full of the shares then being purchased, together with any
required withholding tax. The payment of such exercise price and any
required withholding tax shall either be in cash or through delivery to the
Company of shares of Common Stock, or by any combination of cash or shares;
provided that if any such shares of Common Stock so delivered were obtained
through the previous exercise of any option granted under the Plan, such
shares must have been held for at least six months prior to such delivery.
The value of each share of Common Stock so delivered shall be deemed to be
equal to the per share price of the last sale of Common Stock on the trading
day immediately preceding the date the option is exercised (or the closing
bid if no sales were reported), based on the composite transactions in the
Common Stock as reported in The Wall Street Journal (or any successor
publication thereto). If the Committee so requires, such person or persons
shall also deliver a written representation that all shares being purchased
are being acquired for investment and not with a view to, or for resale in
connection with, any distribution of such shares. An option agreement may,
in the discretion of the Committee, provide for other methods to pay for, or
otherwise exercise, an option. An option agreement also may, in the
discretion of the Committee, provide for the withholding of Federal, state
or local income tax upon exercise of an option from any cash or stock
remuneration (from the Plan or otherwise) then or thereafter payable by the
Company to the Optionee. To the extent provided by the terms of an option
agreement, the Optionee may, at the discretion of the Committee, satisfy any
mandatory federal, state or local tax withholding obligation relating to the
exercise or acquisition of stock under an option by any of the following
means or by a combination of such means: (1) tendering cash payment; (2)
authorizing the Company to withhold shares from the shares of the Common
Stock otherwise issuable to the Optionee as a result of the exercise or
acquisition of stock under the option provided that such arrangement will
not result in a charge to the Company's reported earnings in excess of that
which the Company is willing to accept; or (3) delivering to the Company
owned and unencumbered shares of the Common Stock of the Company that have
been held for the greater of (i) six months, or (ii) the period required to
avoid a charge to the Company's reported earnings in excess of that which
the Company is willing to accept. The exercise of the option may be
conditioned upon the receipt by the Company of satisfactory evidence of the
Optionee's satisfaction of any withholding obligations.
1.12.2 Options not Transferable. No option granted under the Plan
------------------------
shall be transferable otherwise than by will or by the laws of descent and
distribution and, during the lifetime of the Optionee, such option shall be
exercisable only by the Optionee. Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of, or to subject to execution, attachment
or similar process, any option granted under the Plan, or any right
thereunder, contrary to the provisions hereof, shall be void and
ineffective, shall give no right to the purported transferee, and shall, at
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<PAGE>
the sole discretion of the Committee, result in forfeiture of the option
with respect to the shares involved in such attempt.
1.12.3 Adjustment of Shares. In the event that at any time after the
--------------------
Effective Date the outstanding shares of Common Stock are changed into or
exchanged for a different number or kind of shares of the Company or other
securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, or
combination of shares, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares subject to the Plan (including
shares as to which all outstanding options granted under the Plan, or
portions thereof then unexercised, shall be exercisable), to the end that
after such event the shares subject to the Plan and each Optionee's
proportionate interest shall be maintained as if such Optionee had exercised
the option before the occurrence of such event. Such adjustment in an
outstanding option granted under the Plan shall be made without change in
the total price applicable to such option or the unexercised portion of such
option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary
corresponding adjustment in exercise price per share. Any such adjustment
made by the Committee shall be final, conclusive and binding upon all
Optionees, the Company, and all other interested persons. Any adjustment of
an incentive stock option pursuant to this Section 1.12.3 shall be made in
such manner as not to constitute a "modification" within the meaning of
Section 424(h)(3) of the Code.
1.12.4 Listing and Registration of Shares. Each option granted under
----------------------------------
the Plan shall be subject to the requirement that if at any time the
Committee determines, in its discretion, that the listing, registration, or
qualification of the shares subject to such option upon any securities
exchange or under any state or Federal law, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a condition
of, or in connection with, the issue or purchase of shares thereunder, such
option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained and the same shall have been free of any conditions not acceptable
to the Committee.
1.12.5 Amendments. The Committee may, with the consent of the person
----------
or persons entitled to exercise any outstanding option granted under the
Plan, amend such option; provided, however, that any such amendment shall be
subject to shareholder approval when required in Section 1.4. The Committee
may at any time or from time to time, in its discretion, in the case of any
option previously granted under the Plan (other than an option granted to a
Non-Employee Director) which is not then immediately exercisable in full,
accelerate the time or times at which such option may be exercised to any
earlier time or times. Any adjustment of an incentive stock option pursuant
to this Section 1.12.5 shall be made in such manner as not to constitute a
"modification" within the meaning of Section 424(h)(3) of the Code.
1.12.6 Miscellaneous.
-------------
(a) The person or persons entitled to exercise, or who have
exercised, any option granted under the Plan shall not be entitled to
any rights as a shareholder of the Company with respect to any shares
subject to such option until such person shall have become the
beneficial owner of such shares.
(b) No nonqualified option granted under the Plan shall be
construed as limiting any right which the Company or any subsidiary of
the Company may have to terminate at
-6-
<PAGE>
any time, with or without cause, the employment of any person to whom
such nonqualified option has been granted.
(c) Notwithstanding any provision of the Plan or the terms of
any option granted under the Plan, the Company shall not be required to
issue any shares hereunder or thereunder if such issuance would, in the
judgment of the Committee, constitute a violation of any state or
Federal law or of the rules or regulations of any governmental
regulatory body.
(d) The Committee may require any person who exercises an
incentive stock option to give prompt notice to the Company of any
disposition of shares of Common Stock acquired upon exercise of an
incentive stock option within one year after the transfer of shares to
such person.
ARTICLE II
NONQUALIFIED OPTIONS
--------------------
2.1 Eligible Employees. All Eligible Employees and Eligible Consultants
------------------
shall be eligible to receive nonqualified options under this Article II.
2.2 Calculation of Exercise Price. The exercise price to be paid for each
-----------------------------
share of Common Stock deliverable upon exercise of each nonqualified option
granted under Article II shall be determined by the Committee and may be more or
less than, or equal to, the fair market value per share of Common Stock at the
time of grant as determined by the Committee. The exercise price for each
nonqualified option shall be subject to adjustment as provided in the Adjustment
Provisions.
2.3 Terms and Conditions of Options. Nonqualified options granted under
-------------------------------
this Article II shall be in such form as the Committee may from time to time
approve, shall be subject to the following terms and conditions and may contain
such additional terms and conditions, not inconsistent with this Article II, as
the Committee shall deem desirable:
2.3.1 Option Period and Conditions and Limitations on Exercise.
--------------------------------------------------------
Subject to Section 1.12.5, no nonqualified option shall be exercisable by an
Eligible Employee or Eligible Consultant later than the date which is the
date determined by the Committee upon the grant thereof (the "Nonqualified
Option Expiration Date") which shall be no later than ten years after the
date of grant. To the extent not prohibited by other provisions of the
Plan, each nonqualified option granted to an Eligible Employee or Eligible
Consultant shall be exercisable at such time or times as the Committee in
its discretion may determine at or prior to the time such option is granted.
In the event the Committee makes no such determination, each nonqualified
option granted to an Eligible Employee or Eligible Consultant shall be
exercisable from time to time, in whole or in part, at any time prior to the
Nonqualified Option Expiration Date.
2.3.2 Termination of Employment or Relationship as Eligible
-----------------------------------------------------
Consultant; Death. For purposes of this Article II and each nonqualified
-----------------
option granted under this Article II, an Eligible Employee's employment and
a Eligible Consultant's relationship with the Company shall be deemed to
have terminated at the close of business on the day preceding the first date
on which such Eligible Employee or Eligible Consultant no longer for any
reason whatsoever (including the death of such Eligible Employee or Eligible
Consultant) is employed by, or has a relationship with, the Company or a
subsidiary of the Company. An Eligible Employee shall be considered to be
-7-
<PAGE>
in the employment of the Company or a subsidiary of the Company as long as
such Eligible Employee remains an employee of the Company or a subsidiary of
the Company, whether active or on any authorized leave of absence. An
Eligible Consultant shall be considered to have a relationship with the
Company as long as such Eligible Consultant has an executory assignment from
Company personnel authorized to make such an assignment. Any question as to
whether and when there has been a termination of such employment or
relationship, and the cause of such termination, shall be determined by the
Committee and its determination shall be final and conclusive. If an
Eligible Employee's employment or a Eligible Consultant's relationship is
terminated for any reason whatsoever (including the death of such Eligible
Employee or Eligible Consultant), each nonqualified option thereunto granted
under this Article II and all rights thereunder shall wholly and completely
terminate as follows:
(a) With respect to nonqualified options not then exercisable, at
the time the Eligible Employee's employment or a Eligible Consultant's
relationship is terminated; and
(b) With respect to nonqualified options then exercisable:
(i) At the time the Eligible Employee's employment or a
Eligible Consultant's relationship is terminated if the Eligible
Employee's employment or the Consultant's relationship is
terminated because such person has committed fraud, theft or
embezzlement against the Company or a subsidiary, affiliated entity
or customer of the Company, or for conflict of interest (other than
legitimate competition); or
(ii) At the expiration of a period of one year after the
Eligible Employee's or Eligible Consultant's death (but in no event
later than the Nonqualified Option Expiration Date) if the Eligible
Employee's employment or Eligible Consultant's relationship is
terminated by reason of such person's death. Any such nonqualified
option may be exercised by the Eligible Employee's or Eligible
Consultant's estate or by the person or persons who acquire the
right to exercise such nonqualified option by bequest or
inheritance; or
(iii) At the expiration of a period of three years (but in
no event later than the Nonqualified Option Expiration Date) after
the Eligible Employee's employment is terminated because of
retirement or the Eligible Employee's employment or the Eligible
Consultant's relationship is terminated because of disability, if
the Eligible Employee's employment has terminated because of
retirement or disability or the Eligible Consultant's relationship
has terminated because of disability; or
(iv) At the expiration of a period of three months after
the Eligible Employee's or Eligible Consultant's employment or
relationship is terminated (but in no event later than the
Nonqualified Option Expiration Date) if the Eligible Employee's
employment or Eligible Consultant's relationship is terminated for
any reason other than the reasons specified in Section 2.3.2(b)(i)-
(iii).
ARTICLE III
INCENTIVE STOCK OPTIONS
-----------------------
3.1 Eligible Employees. All Eligible Employees shall be eligible to
------------------
receive incentive stock options under this Article III.
-8-
<PAGE>
3.2 Calculation of Exercise Price. The exercise price to be paid for each
-----------------------------
share of Common Stock deliverable upon exercise of each incentive stock option
granted hereunder shall be equal to the fair market value per share of Common
Stock at the time of grant as determined by the Committee, based on the
composite transactions in the Common Stock as reported by The Wall Street
Journal (or any successor publication thereto), and shall be equal to the per
share price of the last sale of Common Stock on the trading day immediately
preceding the date of grant of such incentive stock option (or the closing bid
if no sales were reported); provided, however, that in the case of an Eligible
Employee who, at the time such incentive stock option is granted, owns more than
10% of the total combined voting power of all classes of stock of the Company or
any subsidiary corporation, within the meaning of section 422(b)(6) of the Code
(a "10% Eligible Employee"), the exercise price per share shall be at least 110%
of the fair market value per share of Common Stock at the time of grant. The
exercise price for each incentive stock option shall be subject to adjustment as
provided in Section 1.12.5.
3.3 Term and Conditions of Options. Incentive stock options shall be in
------------------------------
such form as the Committee may from time to time approve, shall be subject to
the following terms and conditions and may contain such additional terms and
conditions, not inconsistent with this Article III, as the Committee shall deem
desirable:
3.3.1 Option Period and Conditions and Limitations on Exercise.
--------------------------------------------------------
Subject to Section 3.4, no incentive stock option shall be exercisable with
respect to any of the shares subject to such incentive stock option later
than the date which is the date determined by the Committee upon the grant
thereof (the "ISO Expiration Date"), which shall be no later than ten years
after the date of grant; provided, however, that in the case of any 10%
Eligible Employee, the ISO Expiration Date of any incentive stock option
granted thereto shall not be later than five years after the date of such
grant. To the extent not prohibited by other provisions of the Plan, each
incentive stock option shall be exercisable at such time or times as the
Committee in its discretion may determine at or prior to the time such
incentive stock option is granted. In the event the Committee makes no such
determination, each incentive stock option shall be exercisable from time to
time, in whole or in part, subject to the monetary limitations set forth in
Section 3.3.3, at any time prior to the ISO Expiration Date.
3.3.2 Termination of Employment; Death. For purposes of this Article
--------------------------------
III and each incentive stock option granted hereunder, an Eligible
Employee's employment shall be deemed to have terminated at the close of
business on the day preceding the first date on which such Eligible Employee
is no longer for any reason whatsoever (including the death of such Eligible
Employee) employed by the Company or a subsidiary of the Company. An
Eligible Employee shall be considered to be in the employment of the Company
or a subsidiary of the Company as long as such Eligible Employee remains an
employee of the Company or a subsidiary of the Company, whether active or on
any authorized leave of absence. Any question as to whether and when there
has been a termination of such employment, and the cause of such
termination, shall be determined by the Committee and its determination
shall be final and conclusive. If an Eligible Employee's employment is
terminated for any reason whatsoever (including the death of such Eligible
Employee), each incentive stock option thereunto granted hereunder and all
rights thereunder shall wholly and completely terminate as follows:
(a) With respect to incentive stock options not then
exercisable, at the time the Eligible Employee's employment
is terminated; and
(b) With respect to incentive stock options then
exercisable:
-9-
<PAGE>
(i) At the time the Eligible Employee's employment
is terminated if his employment is terminated because he is
discharged for fraud, theft or embezzlement committed against the
Company or a subsidiary, affiliated entity or customer of the
Company, or for conflict of interest (other than legitimate
competition); or
(ii) At the expiration of a period of one year after
the Eligible Employee's death (but in no event later than the ISO
Expiration Date) if the Eligible Employee's employment is
terminated by reason of his death. An incentive stock option
granted under this Article III may be exercised by the Eligible
Employee's estate or by the person or persons who acquire the
right to exercise such incentive stock option by bequest or
inheritance; or
(iii) At the expiration of a period of three years
(but in no event later than the ISO Expiration Date) after the
Eligible Employee's employment is terminated if the Eligible
Employee's employment has terminated because of retirement or
disability ; or
(iv) At the expiration of a period of three months
after the Eligible Employee's employment is terminated (but in no
event later than the ISO Expiration Date) if the Eligible
Employee's employment is terminated for any reason other than the
reasons specified in Section 3.3.2(b)(i)-(iii).
In the event and to the extent that an incentive stock option granted
under this Article III is not exercised (i) within three months after
the Eligible Employee's employment is terminated because of retirement
or disability not within the meaning of section 22(e)(3) of the Code,
or (ii) within one year after the Eligible Employee's employment is
terminated because of disability within the meaning of section
22(e)(3) of the Code, such option shall be taxed as a nonqualified
option.
3.3.3 Limitation on Amount. Notwithstanding any other provision of
--------------------
the Plan, the aggregate fair market value (determined as of the time an
incentive stock option is granted, based upon the calculation of the
exercise price as provided in Section 3.2) of the Common Stock with respect
to which incentive stock options are exercisable for the first time by an
Eligible Employee, under all incentive stock option plans of the Company and
its subsidiaries, during any calendar year cannot exceed $100,000 or such
other maximum amount permitted under section 422(d) of the Code. If the
date on which one or more of such incentive stock options could first be
exercised would be accelerated pursuant to any provision of the Plan or any
option agreement, and the acceleration of such exercise date would result in
a violation of the monetary restriction set forth in the preceding sentence,
then, notwithstanding any such provision, but subject to the provisions of
the next succeeding sentence, the exercise dates of such incentive stock
options shall be accelerated only to the date or dates, if any, that do not
result in a violation of such restriction and, in such event the exercise
date of the incentive stock options with the lowest option prices shall be
accelerated to the earliest such dates. The Committee may, in its
discretion, authorize the acceleration of the exercise date of one or more
incentive stock options even if such acceleration would violate the monetary
restriction set forth in the first sentence of this Section 3.3.3 and even
if such incentive stock options were thereby converted in whole or in part
to nonqualified options.
-10-
<PAGE>
ARTICLE IV
NON-EMPLOYEE DIRECTOR OPTIONS
-----------------------------
4.1 Eligible Persons. Non-Employee Directors shall be eligible to receive
----------------
options under, and solely under, this Article IV and any such options shall be
nonqualified options.
4.2 Formula Grant of Nonqualified Options to Non-Employee Directors.
---------------------------------------------------------------
Subject to receipt of shareholder approval of this Plan at the Company's 1996
Annual Meeting of Shareholders, nonqualified options to purchase 10,000 shares
Class A Common Stock will be issued on each of February 23, 1996, February 23,
1997 and February 23, 1998 to all nonemployee directors who are members of the
compensation committee of the Board of Directors on those dates. All of such
options will have a term of 10 years. If shareholder approval of this Plan is
not obtained as required by this Section 4.2, the options previously granted
under this Section 4.2 shall terminate.
4.3 Calculation of Exercise Price. The exercise price to be paid for each
-----------------------------
share of Common Stock deliverable upon exercise of each nonqualified option
granted under this Article IV shall be equal to the fair market value per share
of Common Stock at the time of grant, based on the composite transactions in the
Common Stock as reported by The Wall Street Journal (or any successor
publication thereto), and shall be equal to the per share price of the last sale
of Common Stock on the trading day immediately preceding the date of grant of
such nonqualified option (or the closing bid if no sales were reported). The
exercise price for each option granted under this Article IV shall be subject to
adjustment as provided in the Adjustment Provisions.
4.4 Terms and Conditions of Nonqualified Options. Subject to the
--------------------------------------------
following provisions of this Section 4.4, nonqualified options granted under
this Article IV shall be in such form as the Committee may from time to time
approve. Nonqualified options granted under this Article IV shall be subject to
the following terms and conditions:
4.4.1 Option Period and Conditions and Limitations on Exercise. Each
--------------------------------------------------------
nonqualified option granted under this Article IV shall be exercisable from
time to time, in whole or in part, at any time after the date of grant and
prior to the date (the "Option Expiration Date"), which is ten years after
the date of grant.
4.4.2 Termination of Directorship; Death. For purposes of this
----------------------------------
Article IV and each nonqualified option granted under this Article IV, a
Non-Employee Director's directorship shall be deemed to have terminated at
the close of business on the day preceding the first date on which he ceases
to be a member of the Board of Directors for any reason whatsoever
(including the death of such Non-Employee Director). If a Non-Employee
Director's directorship is terminated for any reason (including the death of
such Non-Employee Director), each nonqualified option thereunto granted
under this Article IV and all rights thereunder shall wholly and completely
terminate as follows:
(a) At the time the Non-Employee Director's directorship is
terminated if his directorship is terminated as a result of his removal
from the Board of Directors for cause (other than disability); or
(b) At the expiration of a period of one year after the Non-
Employee Director's death (but in no event later than the Option
Expiration Date) if the Non-Employee Director's directorship is
terminated by reason of his death. A nonqualified option granted under
this Article IV may be exercised by the Non-Employee Director's estate
or by the
-11-
<PAGE>
person or persons who acquire the right to exercise such nonqualified
option by bequest or inheritance; or
(c) At the expiration of a period of three years after the
Non-Employee Director's directorship is terminated as a result of such
person's resignation or removal from the Board of Directors because of
disability (but in no event later than the Option Expiration Date); or
(d) At the expiration of a period of three months after the
Non-Employee Director directorship is terminated (but in no event later
than the Option Expiration Date) if the Non-Employee Director's
directorship is terminated for any reason other than the reasons
specified in Section 4.4.2(a)-(c).
4.5 Certain Amendments Prohibited. With respect to those options which
------------------------------
may be granted under Section 4.2 above, the formula for the granting of options
thereunder may not be amended more often than once every six months, other than
to comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act, or the rules thereunder.
-12-
<PAGE>
EXHIBIT 5
March 20, 1998
Premier Laser Systems, Inc.
3 Morgan
Irvine, California 92618
Ladies and Gentlemen:
At your request, we have examined the form of Registration Statement on
Form S-8 (the "Registration Statement") which has been filed by Premier Laser
Systems, Inc. (the "Company") with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Act") for the purpose
of registering the sale of 500,000 shares of Class A Common Stock of the Company
upon the exercise of options granted under the Company's 1996 Stock Option Plan.
We are familiar with the proceedings taken and proposed to be taken in
connection with the issuance and sale of the securities in the manner set forth
in the Registration Statement. Subject to completion of the proceedings
contemplated in connection with the foregoing matters, we are of the opinion
that all of the Class A Common Stock to be sold pursuant to the Registration
Statement has been duly authorized and, when issued and sold in the manner set
forth in the Registration Statement will, upon such issuance and sale, be
validly and legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement or any amendment thereto.
Respectfully submitted,
RUTAN & TUCKER, LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated May 17, 1996, which appears on page 26
of the Premier Laser Systems, Inc. Amendment No. 1 to Annual Report on Form 10-K
for the year ended March 31, 1997. We also consent to the application of such
report to the Financial Statement Schedule for the two years ended March 31,
1996 listed under Item 14(a) of that Form 10-K when such schedule is read in
conjunction with the financial statements referred to in our report. The audits
referred to in such report also included this schedule.
/s/ PRICE WATERHOUSE LLP
- ------------------------
PRICE WATERHOUSE LLP
Costa Mesa, California
March 16, 1998
<PAGE>
EXHIBIT 23.3
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) and related Prospectus pertaining to the 1996 Stock Option Plan of Premier
Laser Systems, Inc. of our report dated May 1, 1997, with respect to the
consolidated financial statements and schedule of Premier Laser Systems, Inc.
included in its Annual Report (Form 10-K) for the year ended March 31, 1997, as
amended, filed with the Securities and Exchange Commission.
Orange County, California
March 16, 1998
<PAGE>
EXHIBIT 23.4
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference to the Registration Statement (Form
S-8) pertaining to the 1996 Stock Option Plan of Premier Laser Systems, Inc. for
the registration of 500,000 shares of its Class A Common Stock, of our reports
dated October 21, 1997, except for Note 10 as to which the date is November 18,
1997, and October 11, 1996, except for Note 10 as to which the date is November
21, 1996, with respect to the financial statements of Ophthalmic Imaging Systems
included in its Annual Reports (Form 10-KSB) for the years ended August 31, 1997
and 1996, respectively, and included in the Current Report on Form 8-K of
Premier Laser Systems, Inc. dated February 25, 1998, filed with the Securities
and Exchange Commission.
ERNST & YOUNG LLP
Sacramento, California
March 16, 1998
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-8 of our report, which includes an explanatory paragraph concerning
the Company's ability to continue as a going concern, dated March 21, 1997,
except for Notes 5 and 15 as to which the date is June 3, 1997, of our audits of
the financial statements of EyeSys Technologies, Inc. as of December 31, 1996
and 1995, and for the three years in the period ended December 31, 1996,
appearing in the registration statement on Form S-4 (File No. 333-29573) of
Premier Laser Systems, Inc. filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933.
COOPERS & LYBRAND L.L.P.
Houston, Texas
March 19, 1998
