<PAGE>
As filed with the Securities and Exchange Commission on December 9, 1996
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
OPTICAL SENSORS INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 41-1643592
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
-----------------------
7615 GOLDEN TRIANGLE DRIVE, SUITE A,
MINNEAPOLIS, MINNESOTA 55344
(612) 944-5857
(Address, including zip code, and telephone number,
including area code, of registrant's principial executive offices)
-----------------------
OPTICAL SENSORS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
-----------------------
SAM B. HUMPHRIES
CHIEF EXECUTIVE OFFICER
OPTICAL SENSORS INCORPORATED
7615 GOLDEN TRIANGLE DRIVE, SUITE A,
MINNEAPOLIS, MINNESOTA 55344
(612) 944-5857
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
IMMEDIATELY UPON THE FILING OF THIS REGISTRATION STATEMENT
-----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE AMOUNT TO BE REGISTERED(1) OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF REGISTRATION
REGISTERED SHARE(2) PRICE(2) FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, par value
$.01 per share 200,000 shares $8.625 $1,725,000 $522.73
------ ---------- -------
====================================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933, as
amended, this Registration Statement includes an indeterminate number of
additional shares as may be issuable as a result of anti-dilution
provisions described herein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h) under the Securities Act of 1933,
based upon the average between the high and low reported sales prices of
Registrant's Common Stock on December 3, 1996, as reported by the Nasdaq
National Market.
===============================================================================
<PAGE>
PART II
INFORMATION REQUIRED
IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
----------------------------------------
The following documents filed by Optical Sensors Incorporated (the
"Company") (File No. 0-27600) with the Securities and Exchange Commission (the
"Commission") are incorporated by reference in this Registration Statement: (1)
Final Prospectus, dated February 14, 1996, as filed with the Commission on
February 15, 1996 pursuant to Rule 424(b) of the Securities Act of 1933, as
amended; (2) Quarterly Reports on Form 10-Q for the quarters ended March 31,
June 30, and September 30, 1996; (3) all other reports filed by the Company
pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since December 31, 1995; (4) the description of
the Company's Common Stock contained in the Company's Registration Statement on
Form 8-A, including any amendments or reports filed for the purpose of updating
such description; and (5) the description of the Company's Preferred Stock
Purchase Rights contained in the Company's Registration Statement on Form 8-A,
including any amendments or reports filed for the purpose of updating such
description.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all shares of Common Stock offered pursuant to this
Registration Statement have been sold or that deregisters all shares of Common
Stock then remaining unsold, shall be deemed to be incorporated by reference in
this Registration Statement and to be a part hereof from the date of filing of
such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
--------------------------
Not applicable. The description of the Company's Common Stock to be offered
pursuant to this Registration Statement has been registered under Section 12 of
the Exchange Act as described in Item 3 of this Part II.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
---------------------------------------
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
------------------------------------------
Delaware law and the Company's Restated Certificate of Incorporation
provide that the Company shall, under certain circumstances and subject to
certain limitations, indemnify any person made or threatened to be made a party
to a proceeding by reasons of that person's former or present official capacity
with the Company against judgments, penalties, fines, settlements and reasonable
expenses. Any such person is also entitled, subject to certain limitations, to
payment or reimbursement of reasonable expenses in advance of the final
disposition of the proceeding.
The Company also maintains a directors and officers insurance policy
pursuant to which directors and officers of the Company are insured against
liability for certain actions in their capacity as directors and officers.
2
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
------------------------------------
No securities are to be re-offered or resold pursuant to this
Registration Statement.
ITEM 8. EXHIBITS.
---------
4.1* Restated Certificate of Incorporation.
4.2* Bylaws.
4.3* Form of the Company's Common Stock Certificate.
5.1** Opinion and Consent of Oppenheimer Wolff & Donnelly.
23.1 Consent of Oppenheimer Wolff & Donnelly (included in Exhibit 5.1).
23.2** Consent of Ernst & Young LLP.
24.1 Power of Attorney (included on page 5 of this
Registration Statement).
99.1** Employee Stock Purchase Plan
- -------------------------
* (Incorporated by reference to the exhibits to the
Company's Registration Statement on Form S-1 (File
No. 33-99904).
** Filed herewith.
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, represents a fundamental change in the
information set forth in the 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 end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
under the Act if, in the aggregate, the changes in volume and
price represent no more than 20% change in the maximum
aggregate offering price set
3
<PAGE>
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(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, 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.
4
<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 Minneapolis, State of Minnesota, on December 3,
1996.
OPTICAL SENSORS INCORPORATED
By /s/ Sam B. Humphries
----------------------
Sam B. Humphries
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Sam B. Humphries and Wesley G. Peterson, and each of
them, as his true and lawful attorney-in-fact and agent, each with full powers
of substitution and re-substitution, for him and in his name, place and stead,
in any and all capacities, to sign any or all amendments (including post-
effective amendments) to this Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on December 3, 1996 by the following
persons in the capacities indicated.
/s/ Sam B. Humphries President, Chief Executive Officer and Director
- -------------------------- (Principal Executive Officer)
Sam B. Humphries
/s/ Wesley G. Peterson Chief Financial Officer,
- -------------------------- Vice President of Finance and Administration,
Wesley G. Peterson and Secretary (Principal Financial
and Accounting Officer)
/s/ Promod Haque, Ph.D. Director
- --------------------------
Promod Haque, Ph.D.
/s/ Peter H. McNerney Director
- --------------------------
Peter H. McNerney
/s/ John M. Nehra Director
- --------------------------
John M. Nehra
/s/ Demetre Nicoloff, M.D. Director
- --------------------------
Demetre Nicoloff, M.D.
/s/ Gary A. Peterson Director
- --------------------------
Gary A. Peterson
5
<PAGE>
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Item No. Description Method of Filing
- -------- ----------- ----------------
<S> <C> <C>
4.1 Restated Certificate of
Incorporation........... Incorporated by
reference to
exhibit 3.3 to the
Company's Registration
Statement on Form S-1
(File No. 33-99904).
4.2 Bylaws.................. Incorporated by
reference to
exhibit 3.5 to the
Company's Registration
Statement on Form S-1
(File No. 33-99904).
4.3 Form of the Company's
Common Stock
Certificate............. Incorporated by
reference to
exhibit 4.1 to the
Company's Registration
Statement on Form S-1
(File No. 33-99904).
5.1 Opinion and Consent of
Oppenheimer Wolff &
Donnelly................ Filed herewith electronically.
23.1 Consent of Oppenheimer
Wolff & Donnelly........ Included in Exhibit 5.1.
23.2 Consent of Ernst & Young
LLP..................... Filed herewith electronically.
24.1 Power of Attorney....... Included on page 5 of
this Registration
Statement.
99.1 Employee Stock Purchase Filed herewith
Plan.................... electronically.
</TABLE>
<PAGE>
December 6, 1996
EXHIBIT 5.1
Optical Sensors Incorporated
7615 Golden Triangle Drive
Suite A
Minneapolis, MN 55344
Re: Optical Sensors Incorporated
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Optical Sensors Incorporated, a Delaware corporation
(the "Company"), in connection with the registration by the Company of 200,000
shares of the Company's Common Stock, $.01 par value (the "Shares"), issuable
under the Company's Employee Stock Purchase Plan (the "Plan"), pursuant to the
Company's Registration Statement on Form S-8 filed with the Securities and
Exchange Commission on December 6, 1996 (the "Registration Statement").
In acting as counsel for the Company and arriving at the opinions expressed
below, we have examined and relied upon originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company,
agreements and other instruments, certificates of officers and representatives
of the Company, certificates of public officials and other documents as we have
deemed necessary or appropriate as a basis for the opinions expressed herein. In
connection with our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents tendered to us as originals, the
legal capacity of all natural persons and the conformity to original documents
of all documents submitted to us as certified or photostatic copies.
Based on the foregoing, and subject to the qualifications and limitations stated
herein, it is our opinion that:
1. The Company has the corporate authority to issue the Shares in the manner
and under the terms set forth in the Registration Statement.
<PAGE>
Optical Sensors Incorporated
December 6, 1996
Page 2
2. The Shares have been duly authorized and, when issued, delivered and paid
for in accordance with the Plan referred to in the Registration Statement,
will be validly issued, fully paid and nonassessable.
We express no opinion with respect to laws other than those of the Delaware
General Corporation Law and the federal law of the United States of America, and
we assume no responsibility as to the applicability thereto, or the effect
thereon, of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to its use as part of the Registration Statement.
We are furnishing this opinion to the Company solely for its benefit in
connection with the Registration Statement as described above. It is not to be
used, circulated, quoted or otherwise referred to for any other purpose. Other
than the Company, no one is entitled to rely on this opinion.
Very truly yours,
/s/ OPPENHEIMER WOLFF & DONNELLY
<PAGE>
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Optical Sensors Incorporated Employee Stock Purchase
Plan of our report dated February 14, 1996 with respect to the financial
statements of Optical Sensors Incorporated included in the Company's Final
Prospectus dated February 14, 1996, as filed with the Securities and Exchange
Commission on February 15, 1996.
Ernst & Young LLP
Minneapolis, Minnesota
December 4, 1996
<PAGE> Exhibit 99.1
OPTICAL SENSORS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
(AS ADOPTED DECEMBER 3, 1996)
1. Purpose. The purpose of this Employee Stock Purchase Plan (the "Plan") is
to advance the interests of Optical Sensors Incorporated (the "Company") and its
shareholders by providing Employees of the Company and its Designated
Subsidiaries (as defined in Section 2(e) below) with an opportunity to acquire
an ownership interest in the Company through the purchase of Common Stock of the
Company on favorable terms through payroll deductions. It is the intention of
the Company that the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
Accordingly, provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of Section 423 of the
Code.
2. Definitions.
(a) "Board" means the Board of Directors of the Company.
(b) "Common Stock" means the common stock, par value $.01 per share, of
the Company, or the number and kind of shares of stock or other securities
into which such common stock may be changed in accordance with Section 13
of the Plan.
(c) "Committee" means the entity administering the Plan, as provided in
Section 3 below.
(d) "Compensation" means all earnings and commissions that are included in
regular compensation, excluding bonuses (except to the extent that the
inclusion of any such item is specifically directed by the Committee),
determined in a manner consistent with the requirements of Section 423 of
the Code, as provided in Section 1 above.
(e) "Designated Subsidiary" means a Subsidiary that has been designated by
the Board from time to time, in its sole discretion, as eligible to
participate in the Plan.
(f) "Employee" means any person, including an officer, who is employed by
the Company or one of its Designated Subsidiaries, exclusive of any such
person whose customary employment with the Company or a Designated
Subsidiary is for 20 hours or less per week.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(h) "Fair Market Value" means, with respect to the Common Stock, as of any
date:
(i) if the Common Stock is listed or admitted to unlisted trading
privileges on any national securities exchange or is not so listed or
admitted but transactions in the Common Stock are reported on the
Nasdaq National Market, the closing sale price of the Common Stock on
such exchange or by the Nasdaq National Market as of such date,
rounded up to the next highest full cent (or, if no shares were traded
on such day, as of the next preceding day on which there was such a
trade); or
(ii) if the Common Stock is not so listed or admitted to unlisted
trading privileges or reported on the Nasdaq National Market System,
and bid and asked prices therefor in the over-the-counter market are
reported by the Nasdaq SmallCap System or the National
1
<PAGE>
Quotation Bureau, Inc. (or any comparable reporting service), the
average of the closing bid and asked prices as of such date, rounded
up to the next highest full cent (or, if no shares were traded on such
day, as of the next preceding day on which there was such a trade), as
so reported by the Nasdaq SmallCap System, or, if not so reported
thereon, as reported by the National Quotation Bureau, Inc. (or such
comparable reporting service); or
(iii) if the Common Stock is not so listed or admitted to unlisted
trading privileges, or reported on the Nasdaq National Market System,
and such bid and asked prices are not so reported, such price as the
Committee determines in its sole discretion, but in a manner
acceptable under Section 423 of the Code.
(i) "Offering" means any of the offerings to Participants of options to
purchase Common Stock under the Plan, each continuing for three months,
except for the initial Offering which shall continue for four months, as
described in Section 5 below.
(j) "Offering Date" means the first day of the Offering Period under the
Plan, as described in Section 5 below.
(k) "Offering Period" means the time period commencing on the Offering
Date and ending on the Termination Date.
(l) "Option Price" is defined in Section 8 below.
(m) "Participant" means an eligible Employee who elects to participate in
the Plan pursuant to Section 6 below.
(n) "Securities Act" means the Securities Act of 1933, as amended.
(o) "Subsidiary" means any subsidiary corporation of the Company within
the meaning of Section 424(f) of the Code.
(p) "Termination Date" means the last day of the Offering Period under the
Plan, as described in Section 5 below.
3. Administration. So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, the Plan will be
administered by either the Board or if the Board determines, in its sole
discretion, by a committee of the Board consisting solely of not less than two
members of the Board who are "non-employee directors" within the meaning of Rule
16b-3 under the Exchange Act. Members of such a committee shall be appointed
from time to time by the Board, shall serve at the pleasure of the Board, and
may resign at any time upon written notice to the Board. A majority of the
members of such a committee shall constitute a quorum. Such a committee shall
act by majority approval of the members and shall keep minutes of its meetings.
Action of such a committee may be taken without a meeting if unanimous written
consent is given. Copies of minutes of such a committee's meetings and of its
actions by written consent shall be kept with the corporate records of the
Company. As used in this Plan, the term "Committee" will refer to such
committee. In accordance with and subject to the provisions of the Plan, the
Committee shall have authority to make, administer and interpret such rules and
regulations as it deems necessary to administer the Plan, and any determination,
decision or action in connection with construction, interpretation,
administration or application of the Plan shall be final, conclusive and binding
upon all Participants and any and all persons claiming under or through any
Participant. No member of the
2
<PAGE>
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under the Plan.
4. Eligibility.
(a) Any Employee who is employed by the Company or a Designated Subsidiary
on the date that this Plan is approved by the Board and any Employee who
becomes an employee after such date and has been employed by the Company or
a Designated Subsidiary for at least one month prior to an Offering Date
shall be eligible to participate in the Plan, beginning with the Offering
commencing on such Offering Date, subject to the limitations imposed by
Section 423(b) of the Code. With respect to a Designated Subsidiary that
has been acquired by the Company, the period of employment of Employees of
such Designated Subsidiary occurring prior to the time of such acquisition
shall be included for purposes of determining whether an Employee has been
employed for the requisite period of time under the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan if:
(i) immediately after the grant, such Employee (or any other person
whose stock ownership would be attributed to such Employee pursuant to
Section 424(d) of the Code) would own shares of Common Stock and/or
hold outstanding options to purchase shares of Common Stock possessing
five percent (5%) or more of the total combined voting power or value
of all classes of shares of the Company or of any Subsidiary; or
(ii) the amount of payroll deductions that the Employee has elected to
have withheld under such option (pursuant to Section 7 below) would
permit the Employee to purchase shares of Common Stock under all
"employee stock purchase plans" (within the meaning of Section 423 of
the Code) of the Company and its Subsidiaries to accrue (i.e., become
exercisable) at a rate that exceeds $25,000 of the Fair Market Value
of such shares of Common Stock (determined at the time such option is
granted) for each calendar year in which such option is outstanding at
any time.
5. Offerings. Options to purchase shares of Common Stock shall be offered to
Participants under the Plan through a continuous series of Offerings, each
continuing for three months except for the initial Offering Period, and each of
which shall commence on February 1, May 1, August 1 and November 1 of each year,
as the case may be, except for the initial Offering Period (the "Offering
Date"), and shall terminate on April 30, July 31, October 31 and January 31 of
each year, as the case may be (the "Termination Date"). The first Offering
under the Plan shall have an Offering Date of January 1, 1997 and a Termination
Date of April 30, 1997. Offerings under the Plan shall continue until either
(a) the Committee decides, in its sole discretion, that no further Offerings
shall be made because the Common Stock remaining available under the Plan is
insufficient to make an Offering to all eligible Employees, or (b) the Plan is
terminated in accordance with Section 17 below.
6. Participation.
(a) An eligible Employee may become a Participant in the Plan by
completing a subscription agreement authorizing payroll deductions on the
form provided by the Company (the "Participation Form") and filing the
Participation Form with the Company's Human Resources Department not
3
<PAGE>
less than 15 days before the Offering Date of the first Offering in which
the Participant wishes to participate.
(b) Except as provided in Section 7(a) below, payroll deductions for a
Participant shall begin with the first payroll following the applicable
Offering Date, and shall continue until the termination date of the Plan,
subject to earlier termination by the Participant as provided in Section 11
below or increases or decreases by the Participant in the amount of payroll
deductions as provided in Section 7(c) below.
(c) A Participant may discontinue participation in the Plan at any time as
provided in Section 11 below.
7. Payroll Deductions.
(a) By completing and filing a Participation Form, a Participant shall
elect to have payroll deductions made from the Participant's total
Compensation (in whole percentages from one percent (1%) to a maximum of
ten percent (10%) of the Participant's total Compensation) on each payday
during the time he or she is a Participant in the Plan in such amount as he
or she shall designate on the Participation Form; provided, however, that
no Participant's payroll deductions shall be less than $10.00 per pay
period.
(b) All payroll deductions authorized by a Participant shall be credited
to an account established under the Plan for the Participant. The monies
represented by such account shall be held as part of the Company's general
assets, usable for any corporate purpose, and the Company shall not be
obligated to segregate such monies. A Participant may not make any separate
cash payment or contribution to such account.
(c) No increases or decreases of the amount of payroll deductions for a
Participant may be made during an Offering. A Participant may increase or
decrease the amount of payroll deductions under the Plan for subsequent
Offerings by completing an amended Participation Form and filing it with
the Company's Human Resources Department not less than 15 days prior to the
Offering Date as of which such increase or decrease is to be effective.
8. Grant of Option. On each Offering Date, each eligible Employee who is then
a Participant shall be granted (by operation of the Plan) an option to purchase
(at the Option Price) as many shares of Common Stock as the Participant will be
able to purchase with the payroll deductions credited to the Participant's
account during the Offering Period. Notwithstanding the foregoing, in no event
may the number of shares purchased by any Employee during an Offering exceed
1,500 shares of Common Stock. The option price per share of such shares (the
"Option Price") shall be the lesser of (a) eighty-five percent (85%) of the Fair
Market Value of one share of Common Stock on the Offering Date, or (b) eighty-
five (85%) of the Fair Market Value of one share of Common Stock on the
Termination Date.
9. Exercise of Option.
(a) Unless a Participant gives written notice to the Company as provided
in Section 9(d) below or withdraws from the Plan pursuant to Section 11
below, the Participant's option for the purchase of shares of Common Stock
granted for an Offering will be exercised automatically at the Termination
Date of such Offering for the purchase of the number of full shares of
Common Stock
4
<PAGE>
that the accumulated payroll deductions in the Participant's account on
such Termination Date will purchase at the applicable Option Price.
(b) A Participant may purchase one or more shares in connection with the
automatic exercise of an option granted for any Offering. If the Committee
elects to deliver a statement of account to Participants pursuant to
Section 10(a)(i)(A) below, that portion of any balance remaining in a
Participant's payroll deduction account at the close of business on the
Termination Date of any Offering that is less than the purchase price of
one full share will be deemed to have purchased such number of fractional
shares of Common Stock as would then be purchasable at the applicable
Option Price, with such fractional shares calculated to the third (3rd)
decimal place. If the Committee elects to deliver stock certificates to
Participants pursuant to Section 10(a)(i)(B) below, that portion of any
balance remaining in a Participant's payroll deduction account at the close
of business on the Termination Date of any Offering that is less than the
purchase price of one full share will be carried forward into the
Participant's payroll deduction account for the following Offering;
provided that in no event will the balance carried forward be equal to or
greater than the purchase price of one share on the Termination Date of an
Offering.
(c) No Participant (or any person claiming through such Participant) shall
have any interest in any Common Stock subject to an option under the Plan
until such option has been exercised, at which point such interest shall be
limited to the interest of a purchaser of the Common Stock purchased upon
such exercise pending the delivery or credit of such Common Stock in
accordance with Section 10 below. During the Participant's lifetime, a
Participant's option to purchase shares of Common Stock under the Plan is
exercisable only by such Participant.
(d) By written notice to the Company prior to the Termination Date of any
Offering, a Participant may elect, effective on such Termination Date, to:
(i) withdraw all of the accumulated payroll deductions in the
Participant's account as of the Termination Date (which withdrawal
may, but need not, also constitute a notice of termination and
withdrawal pursuant to Section 11(a)); or
(ii) exercise the Participant's option for a specified number of full
shares not less than five that is less than the number of full shares
of Common Stock that the accumulated payroll deductions in the
Participant's account will purchase on the Termination Date of the
Offering at the applicable Option Price, and withdraw the balance in
the Participant's payroll deduction account .
10. Delivery.
(a) As promptly as practicable after the Termination Date of each
Offering, the Company will deliver to each Participant, as appropriate, the
following:
(i) At the election of the Committee, either issue (A) in certificated
or uncertificated form to a third party the aggregate number of shares of Common
Stock purchased in connection with an Offering (including an aggregate of the
fractional shares deemed to have been purchased pursuant to Section 9(b) above)
rounded to the nearest full share, which shares will be held by such third party
for the benefit of the Participants in accordance with their respective
interests, and to each Participant a statement summarizing the number of whole
shares of Common Stock purchased and fractional shares deemed purchased upon
exercise of the Participant's option granted for such Offering, or (B) a
certificate representing the number of full shares of Common Stock purchased
upon exercise of the Participant's option granted
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for such Offering, registered in the name of the Participant or, if
the Participant so directs on the Participation Form, in the names of
the Participant and his or her spouse.
(ii) If the Participant makes an election pursuant to Section 9(d)(i)
above for the Offering, a check in an amount equal to the total of the
payroll deductions credited to the Participant's account.
(iii) If Participant makes an election pursuant to Section 9(d)(ii)
above, a check in the amount of the balance of any payroll deductions
credited to the Participant's account that were not used for the
purchase of Common Stock.
(iv) If the balance in the Participant's payroll deduction account
exceeds the dollar amount necessary to purchase the maximum amount of
shares that may be purchased in an Offering, a check in an amount
equal to the excess balance.
(b) If the Company delivers a statement of account as provided in Section
10(a)(i)(A) above, a Participant may at any time request that a certificate
for the number of whole shares of Common Stock purchased by such
Participant in an Offering or in any previous Offering (with respect to
which such participant has not been issued a certificate) be issued and
delivered to such Participant by making a written request to the Company.
Such written request shall be made to the Company's Human Resources
Department or, at the direction of the Company, to the transfer agent and
registrar for the Company's Common Stock. In lieu of issuing certificates
for fractional shares, Participants will receive a cash distribution
representing any fractional shares, calculated in accordance with Section
11(a) below.
(c) If the Company delivers a statement of account as provided in Section
10(a)(i)(A) above, all full shares purchased and fractional shares deemed
to have been purchased by a Participant in an Offering and in any
subsequent Offerings will accumulate for the benefit of the Participant
until the Participant's withdrawal or termination pursuant to Section 11
below.
11. Withdrawal; Termination of Employment.
(a) A Participant may terminate participation in the Plan and withdraw
all, but not less than all, of the payroll deductions credited to the
Participant's account under the Plan at any time prior to the Termination
Date of an Offering, for such Offering, by giving written notice to the
Company. Such notice shall state that the Participant wishes to terminate
the Participant's involvement in the Plan, specify a termination date and
request the withdrawal of all of the Participant's payroll deductions held
under the Plan. All of the Participant's payroll deductions credited to the
Participant's account will be paid to such participant as soon as
practicable after the termination date specified in the notice of
termination and withdrawal (or, if no such date is specified, as soon as
practical after receipt of notice of termination and withdrawal), and the
Participant's option for such Offering will be automatically canceled, and
no further payroll deductions for the purchase of shares of Common Stock
will be made for such Offering or for any subsequent Offering, except in
accordance with a new Participation Form filed pursuant to Section 6 above.
If the Committee elects to deliver a statement of account pursuant to
Section 10(a)(i)(A) above, then on the withdrawal and termination of a
Participant's participation in the Plan, the Participant will be entitled
to receive, at the Participant's option, (i) cash equal to the Fair Market
Value of all full shares of Common Stock and any fractional share deemed
purchased pursuant to Section 9(b) then held for the benefit of the
Participant; or (ii) a certificate representing the number
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<PAGE>
of full shares of Common Stock held for the benefit of the Participant plus
cash in an amount equal to the Fair Market Value of any remaining
fractional shares deemed to have been purchased. In any event, Fair Market
Value will be determined as set forth in Section 11(d) below, and such
certificate will be delivered and such amounts paid as soon thereafter as
practicable.
(b) Upon termination of a Participant's employment for any reason,
including retirement or death, the payroll deductions accumulated in the
Participant's account will be returned to the Participant as soon as
practicable after such termination or, in the case of death, to the person
or persons entitled thereto under Section 14 below, and the Participant's
option will be automatically canceled. If the Committee elects to deliver a
statement of account pursuant to Section 10(a)(i)(A), then upon the
termination of a Participant's employment for any reason, including
retirement or death, the Participant, or, in the case of death, the
Participant's Designated Beneficiary (if allowed by the Committee) or the
executor or administrator of the Participant's estate will be entitled to
receive, at their option, (i) cash equal to the Fair Market Value of all
full shares of Common Stock and any fractional share deemed purchased
pursuant to Section 9(b) then held for the benefit of the Participant; or
(ii) a certificate representing the number of full shares of Common Stock
held for the benefit of the Participant plus cash in an amount equal to the
Fair Market Value of any remaining fractional share deemed to have been
purchased. In any event, Fair Market Value will be determined as
set forth in Section 11(d) below and such certificate will be delivered and
such amounts paid as soon thereafter as practicable. For purposes of the
Plan, the termination date of employment shall be the Participant's last
date of actual employment and shall not include any period during which
such Participant receives any severance payments. A transfer of employment
between the Company and a Designated Subsidiary or between one Designated
Subsidiary and another Designated Subsidiary, or absence or leave approved
by the Company, shall not be deemed a termination of employment under this
Section 11(b).
(c) A Participant's termination and withdrawal pursuant to Section 11(a)
above will not have any effect upon the Participant's eligibility to
participate in a subsequent Offering by completing and filing a new
Participation Form pursuant to Section 6 above or in any similar plan that
may hereafter be adopted by the Company.
(d) For purposes of this Section 11 only, "Fair Market Value" means the
prevailing market price of the Common Stock on any national securities
exchange (if the Common Stock is listed on any such exchange) or as
reported by the Nasdaq National Market, the Nasdaq SmallCap System or the
National Quotation Bureau, Inc. (or any comparable reporting service), as
the case may be, (if transactions or bid and asked prices are reported in
the over-the-counter market are so reported) on the first day on which
shares of Common Stock are traded following the day on which the Company,
or if the Company so designates, the Company's agent, receives notice from
a Participant of an event specified in Section 11(a) or 11(b) above.
12. Interest. No interest shall accrue on a Participant's payroll deductions
under the Plan.
13. Stock Subject to the Plan.
(a) The maximum number of shares of Common Stock that shall be reserved
for sale under the Plan shall be 200,000 shares, subject to adjustment upon
changes in capitalization of the Company as provided in Section 13(b)
below. The shares to be sold to Participants under the Plan may be, at the
election of the Company, either treasury shares or shares authorized but
unissued. If the total number of shares of Common Stock that would
otherwise be subject to options granted pursuant to Section 8 above on any
Termination Date exceeds the number of shares then available under the Plan
(after deduction of all shares for which options have been exercised or are
then outstanding), the Company shall make a pro rata allocation of the
shares of Common Stock remaining available for issuance in as uniform and
equitable a manner as is practicable as determined in the Company's sole
discretion. In such event, the Company shall give written notice of such
reduction of the number of shares subject to the option to each Participant
affected thereby
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and shall return any excess funds accumulated in each Participant's account
as soon as practicable after the Termination Date of such Offering.
(b) If any option under the Plan is exercised after any Common Stock
dividend, split-up, recapitalization, merger, consolidation, combination or
exchange of Common Stock or the like, occurring after the shareholders of
the Company approve the Plan, the number of shares of Common Stock to which
such option shall be applicable and the Option Price for such Common Stock
shall be appropriately adjusted by the Company.
(c) In the event that Participants are deemed to have purchased fractional
shares of Common Stock pursuant to Section 9(b) above, the aggregate of
such fractional share interests at any given time will be applied to reduce
the maximum number of shares of Common Stock remaining available for
issuance under the Plan.
14. Designation of Beneficiary.
(a) In the discretion of the Committee, a Participant may file written
designation of a beneficiary who is to receive shares of Common Stock
and/or cash, if any, from the Participant's account under the Plan in the
event of such Participant's death at a time when cash or shares of Common
Stock are held for the Participant's account.
(b) Such designation of beneficiary may be changed by the Participant at
any time by written notice. In the event of the death of a Participant in
the absence of a valid designation of a beneficiary who is living at the
time of such Participant's death, the Company shall deliver such shares of
Common Stock and/or cash to the executor or administrator of the estate of
the Participant; or, if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares of Common Stock and/or cash to the
spouse or to any one or more dependents or relatives of the Participant;
or, if no spouse, dependent or relative is known to the Company, then to
such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a Participant's
account nor any rights with regard to the exercise of an option or to receive
shares of Common Stock under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 14 above) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds in accordance with Section 11(a) above.
16. Share Transfer Restrictions.
(a) Shares of Common Stock shall not be issued under the Plan unless such
issuance is either registered under the Securities Act and applicable state
securities laws or is exempt from such registrations.
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<PAGE>
(b) Shares of Common Stock issued under the Plan may not be sold,
assigned, transferred, pledged, encumbered, or otherwise disposed of
(whether voluntarily or involuntarily) except pursuant to registration
under the Securities Act and applicable state securities laws, or pursuant
to exemptions from such registrations.
17. Amendment or Termination. The Plan may be amended by the Board from time
to time to the extent that the Board deems necessary or appropriate in light of,
and consistent with, Section 423 of the Code; provided, however, that no such
amendment shall be effective, without approval of the shareholders of the
Company, if shareholder approval of the amendment is then required pursuant to
Rule 16b-3 under the Exchange Act or any successor rule or Section 423 of the
Code. The Board also may terminate the Plan or the granting of options pursuant
to the Plan at any time; provided, however, that the Board shall not have the
right to modify, cancel, or amend any outstanding option granted pursuant to the
Plan before such termination unless each Participant consents in writing to such
modification, amendment or cancellation.
18. Notices. All notices or other communications by a Participant to the
Company in connection with the Plan shall be deemed to have been duly given when
received in the Company's Human Resources Department or in such other department
or by such other person as may be designated by the Company for the receipt of
such notices or other communications, in the form and at the location specified
by the Company.
19. Effective Date of Plan. The Plan shall be effective as of December 3,
1996, the date the Plan was adopted by the Board. The Plan has been adopted by
the Board subject to shareholder approval, and prior to shareholder approval
shares of Common Stock may be issued under the Plan subject to such approval.
20. Miscellaneous. The headings to Sections in the Plan have been included for
convenience of reference only. Except as otherwise expressly indicated, all
references to Sections in the Plan shall be to Sections of the Plan. The Plan
shall be interpreted and construed in accordance with the laws of the State of
Delaware.
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OPTICAL SENSORS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
PAYROLL DEDUCTION AUTHORIZATION FORM AND SUBSCRIPTION AGREEMENT
---------------------------------------------------------------
______ Original Application
______ Change in Payroll Deduction Amount
1. I, _______________________________ hereby elect to participate in the
Optical Sensors Incorporated Employee Stock Purchase Plan (the "Plan") and
subscribe to purchase shares of the Company's Common Stock (the "Shares") in
accordance with this Agreement and the Plan.
2. I hereby authorize payroll deductions, beginning ____________, 19__, from
each paycheck in the amount of __% of my compensation (may not exceed ten
percent (10%) of total compensation on each payday) in accordance with the Plan.
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares in accordance with the Plan, and that shares will be
purchased for me automatically at the end of each three-month Offering Period
under the Plan (four months for the Offering Period beginning on January 1,
1997) unless I withdraw my accumulated payroll deductions, withdraw from the
Plan, or both, by giving written notice to the Company prior to the end of the
offering period, as provided in the Plan.
4. Shares purchased for me under the Plan should be issued or held in an account
in the name(s) of:
--------------------------------------------
(name(s))
--------------------------------------------
(address)
--------------------------------------------
--------------------------------------------
(social security number)
5. I understand that if I dispose of any Shares received by me pursuant to the
Plan within two years after the first day of the Offering Period during which I
purchased such Shares, I may be treated for federal income tax purposes as
having received ordinary income at the time of such disposition in an amount
equal to the excess of the fair market value of the Shares at the time such
Shares were delivered to me over the option price paid for the Shares. I hereby
agree to notify the Company in writing within 30 days after the date of any such
disposition. However, if I dispose of such shares at any time after the
expiration of the two-year holding period, I understand that I will be treated
for federal income tax purposes as having received income only at the time of
such disposition, and that such income will be taxed as ordinary income only to
the extent of an amount equal to the lesser of (a) the excess of the fair market
value of the Shares at the time of such disposition over the amount paid for the
Shares under the option, or (b) the excess of the fair market value of the
Shares over the option price, measured as if the option had been exercised on
the
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first day of the offering period during which I purchased such shares. The
remainder of the gain, if any, recognized on such disposition will be taxed at
capital gains rates.
6. I have read the current prospectus for the Optical Sensors Incorporated
Employee Stock Purchase Plan.
Date:
---------------------------------- ---------------------------------
Signature of Employee
CERTIFICATION OF TAX IDENTIFICATION NUMBER
- -------------------------------------------------------------------------------
Please indicate your Social Security or Tax Identification Number
I certify under penalties of perjury (1) that the number above is my correct
Social Security or Taxpayer Identification Number and (2) that I am not subject
to backup withholding either because I have not been notified by the IRS that I
am subject to backup withholding as a result of failure to report all interest
or dividends, or the IRS has notified me that I am no longer subject to backup
withholding.
Date:
--------------------------------- ---------------------------------
Signature
11
