SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
US Diagnostic Inc.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- ------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
11-3146389
- ------------------------------------------------------------------------------
(I.R.S. employer identification no.)
777 South Flagler Drive, West Palm Beach, Florida 33401
- ------------------------------------------------------------------------------
(Address of principal executive offices)
1995 Long-Term Incentive Plan
(Full title of plan)
Jeffrey A. Goffman, Chairman and Chief Executive Officer
US Diagnostic Inc.
777 South Flagler Drive
West Palm Beach, Florida 33401
(Name and address of agent for service)
(561) 832-0006
(Telephone number, including area code, of agent for service)
Copy to:
Michael D. Karsch, Esq.
US Diagnostic Inc.
777 South Flagler Drive
West Palm Beach, Florida 33401
<PAGE>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities to be Price Per Offering Registration
to be Registered Registered Share(1) Price Fee
---------------- ---------- -------- ----- ---
<S> <C> <C> <C> <C>
Common Stock, $.001
par value 3,000,000 $11.94 $35,820,000 $12,352
</TABLE>
- ------------------------------------------------------------------------------
- ---------
(1) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. The price shown is the average of the
high and low prices of the Common Stock on September 23, 1996 as reported
on the Nasdaq National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The documents listed below are hereby incorporated by reference
into this Registration Statement, and all documents subsequently filed by US
Diagnostic Inc. (the "Registrant") pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to
be part hereof from the date of filing such documents:
(a) The Registrant's Annual Report on Form 10-KSB (File No. 1-13392) for
its year ending December 31, 1995;
(b) The Registrant's quarterly report on form 10-QSB for the quarterly
period ended June 30, 1996; and
(c) The Registrant's Registration Statement on Form 8-A declared
effective on October 20, 1994, registering the Common Stock, $.01
par value, under the Securities Exchange Act of 1934, as amended.
Item 4. Description of Securities
No response is required to this item.
Item 5. Interests of Named Experts and Counsel
The legality of the securities offered hereby has been passed
upon by Michael D. Karsch, Executive Vice President and General Counsel.
Michael D. Karsch beneficially owns 75,000 shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
The Amended Certificate of Incorporation and By-Laws of the
Company provide that the Company shall indemnify any person to the full extent
permitted by the Delaware General Corporation Law.
Reference is hereby made to Section 145 of the Delaware General
Corporation Law relating to the indemnification of the officers and directors,
which Section is hereby incorporated herein by reference.
<PAGE>
The Registrant also has Indemnification Agreements with each of
its executive officers and directors.
Item 7. Exemption from Registration Claimed
No response is required to this item.
Item 8. Exhibits
5 Opinion of Michael D. Karsch, with respect to the legality of
the Common Stock to be registered hereunder
10.65 1995 Long-Term Incentive Plan
23.1 Consent of Moore Stephens
23.2 Consent of Michael D. Karsch (contained in Exhibit 5)
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 Registrant Statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(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;
(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
the time shall be deemed to be the initial bona fide offering
thereof.
<PAGE>
(3) To remove from the 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 Registration 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 the time shall be deemed to be the initial bona fide offering
thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 nay be permitted to directors, officers and
controlling persons of the Registrant as described above, 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.
<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 West Palm Beach, State of Florida,
on the 19th day of September 1996.
US DIAGNOSTIC INC.
By: /s/ Jeffrey A. Goffman
-----------------------------
Jeffrey A. Goffman, Chairman
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the following persons in
the capacities and as of the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey A. Goffman Chairman and Chief Executive September 19, 1996
- ----------------------------------- Officer
Jeffrey A. Goffman
/s/ Amos F. Almand, III Senior Vice President and September 19, 1996
- ------------------------------------ Director
Amos F. Almand, III
/s/ Joseph A. Paul President and Director September 19, 1996
- --------------------------------------
Joseph A. Paul
/s/ C. Keith Hartley Director September 19, 1996
- --------------------------------------
C. Keith Hartley
/s/ Charles Jacobson Director September 19, 1996
- --------------------------------------
Charles Jacobson
/s/ Michael D. Karsch Director September 19, 1996
- -----------------------------------
Michael D. Karsch
/s/ Laurans Mendelson Director September 19, 1996
- --------------------------------------
Laurans Mendelson
<PAGE>
- -------------------------------------- Director September 19, 1996
Gordon Rausser, Ph.D.
/s/ Paul Andrew Shaw Vice President and September 19, 1996
- -------------------------------------- Chief Financial Officer
Paul Andrew Shaw
</TABLE>
<PAGE>
INDEX TO EXHIBITS
US DIAGNOSTIC INC.
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
No. Description Page
--- ----------- ----
<S> <C> <C>
5 Opinion of Michael D. Karsch, with respect to the
legality of the Common Stock to be registered
hereunder
10.21(a) 1995 Long-Term Incentive Plan, as amended
23.1 Consent of Moore Stephens, P.C.
23.2 Consent of Michael D. Karsch (contained in Exhibit 5)
</TABLE>
EXHIBIT 5
[U.S. DIAGNOSTIC INC. LETTERHEAD]
September 24, 1996
U.S. Diagnostic Inc.
777 South Flagler Drive
West Palm Beach, Florida 33401
RE: U.S. DIAGNOSTIC INC. (THE "COMPANY")
REGISTRATION STATEMENT FOR OFFERING
OF 3,000,000 SHARES OF COMMON STOCK
Ladies and Gentlemen:
I refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1993, as amended, of 3,000,000 shares
of Common Stock of U.S. Diagnostic Inc. (the "Company") authorized for
issuance under the Company's 1995 Long Term Incentive Plan (the "Plan"). We
advise you that, in our opinion, when such shares have been issued and sold
pursuant to the applicable provisions of the Plan and in accordance with the
Registration Statement, such shares will be validly issued, fully paid and
non-assessable shares of the Company's Common Stock.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Michael D. Karsch
Executive Vice President
and General Counsel
EX-10.21(a)
U.S. DIAGNOSTIC INC.
1995 LONG-TERM INCENTIVE PLAN
1. Purpose.
The purpose of this plan (the "Plan") is to secure for U.S.
DIAGNOSTIC INC. (the "Company") and its shareholders the benefits arising from
capital stock ownership by employees, officers and directors of, and
consultants or advisors to, the Company and its subsidiary corporations who
are expected to contribute to the Company's future growth and success. Those
provisions of the Plan which make express reference to Section 422 shall apply
only to Incentive Stock Options (as that term is defined in the Plan).
2. Type of Options and Administration.
(a) Types of Options. Options granted pursuant to the Plan shall be
authorized by action of the Board of Directors of the Company (or a Committee
designated by the Board of Directors) and may be either incentive stock
options ("Incentive Stock Options") meeting the requirements of Section 422 of
the Internal Revenue Code of 1986, as amended or replaced from time to time
(the "Code") or non-statutory options which are not intended to meet the
requirements of Section 422 of the Code.
(b) Administration. The Plan will be administered by a committee (the
"Committee") appointed by the Board of Directors of the Company, whose
construction and interpretation of the terms and provisions of the Plan shall
be final and conclusive. The delegation of powers to the Committee shall be
consistent with applicable laws or regulations (including, without limitation,
applicable state law and Rule 16b-3 promulgated under the Securities Exchange
Act of 1934 (the "Exchange Act"), or any successor rule ("Rule 16b-3")). The
Committee may in its sole discretion grant options to purchase, or Restricted
Stock Awards (as defined in Section 10 below) of shares of the Company's
Common Stock, $.01 par value per share ("Common Stock") and issue shares upon
exercise of such options as provided in the Plan. The Committee shall have
authority, subject to the express provisions of the Plan, to construe the
respective option agreements and the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the terms and
provisions of the respective option agreements, which need not be identical,
and to make all other determinations in the judgment of the Committee
necessary or desirable for the administration of the Plan. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any option agreement in the manner and to the extent it shall
deem expedient to carry the Plan into effect and it shall be the sole and
final judge of such expediency. No director or person acting pursuant to
authority delegated by the Board of Directors shall be liable for any action
or determination under the Plan made in good faith. Subject to adjustment as
provided in Section 15 below, the aggregate number of shares of Common Stock
that may be subject to Options or Restricted Stock Awards granted to any
person in a calendar year shall not exceed 25% of the maximum number of shares
which may be issued and sold under the Plan, as set forth in Section 4 hereof,
as such section may be
<PAGE>
amended from time to time.
(c) Applicability of Rule 16b-3. Those provisions of the Plan which
make express reference to Rule 16b-3 shall apply to the Company only at such
time as the Company's Common Stock is registered under the Exchange Act,
subject to the last sentence of Section 3(b), and then only to such persons as
are required to file reports under Section 16(a) of the Exchange Act (a
"Reporting Person").
3. Eligibility.
(a) General. Options or Restricted Stock Awards may be granted to
persons who are, at the time of grant, employees, officers or directors of, or
consultants or advisors to, the Company or any subsidiaries of the Company as
defined in Sections 424(e) and 424(f) of the Code ("Participants") provided,
that Incentive Stock Options may only be granted to individuals who are
employees of the Company (within the meaning of Section 3401(c) of the Code).
A person who has been granted an option may, if he or she is otherwise
eligible, be granted additional options if the Committee shall so determine.
(b) Grant of Options to Reporting Persons. The selection of a
director or an officer who is a Reporting Person (as the terms "director" and
"officer" are defined for purposes of Rule 16b-3) as a recipient of an option,
the timing of the option grant, the exercise price of the option and the
number of shares subject to the option shall be determined either (i) by the
Board of Directors, of which all members shall be "disinterested persons" (as
hereinafter defined), (ii) by a committee consisting of two or more directors
having full authority to act in the matter, each of whom shall be a
"disinterested person" or (iii) pursuant to provisions for automatic grants
set forth in Section 3(c) below. For the purposes of the Plan, a director
shall be deemed to be a "disinterested person" only if such person qualifies
as a "disinterested person" within the meaning of Rule 16b-3, as such term is
interpreted from time to time. If at least two of the members of the Board of
Directors do not qualify as a "disinterested person" within the meaning of
Rule 16b-3, as such term is interpreted from time to time, then the granting
of options to officers and directors who are Reporting Persons under the Plan
shall not be determined in accordance with this Section 3(b) but shall be
determined in accordance with the other provisions of the Plan.
(c) Directors' Options. Commencing on the date this plan is adopted
by the Board of Directors, directors of the Company who are not employees or
principal stockholders of the Company or referring physicians to the
Company("Eligible Directors") will receive an option ("Director Option") to
purchase 10,000 shares of Common Stock. Future Eligible Directors of the
Company will be granted a Director Option to purchase 10,000 shares of Common
Stock on the date that such person is first elected or appointed a director
("Initial Director Option"). Commencing on the day immediately following the
date of the annual meeting of stockholders for the Company's fiscal year
ending December 31, 1995, each Eligible Director will receive an automatic
grant ("Automatic Grant") of a Director Option to purchase 10,000 shares of
Common Stock, other than Eligible Directors who received an Initial Director
Option since the most recent
<PAGE>
Automatic Grant, on the day immediately following the date of each annual
meeting of stockholders, as long as such director is a member of the Board of
Directors. The exercise price for each share subject to a Director Option
shall be equal to the fair market value of the Common Stock on the date of
grant. Director Options shall become exercisable in four equal annual
installments commencing one year from the date the option is granted and will
expire the earlier of 10 years after the date of grant or 90 days after the
termination of the director's service on the Board unless such Director Option
is an Incentive Stock Option in which case such Director Option shall be
subject to the additional terms and conditions set forth in Section 11.
4. Stock Subject to Plan.
The stock subject to options or Restricted Stock Awards granted under
the Plan shall be shares of authorized but unissued or reacquired Common
Stock. Subject to adjustment as provided in Section 15 below, the maximum
number of shares of Common Stock of the Company which may be issued and sold
under the Plan is 3,000,000 shares, of which 2,300,000 shares shall be
available for grants of Options and 700,000 shall be available for Restricted
Stock Awards. If an option granted under the Plan shall expire, terminate or
is cancelled for any reason without having been exercised in full, the
unpurchased shares subject to such option shall again be available for
subsequent option grants under the Plan.
5. Forms of Option Agreements.
As a condition to the grant of an option under the Plan, each
recipient of an option shall execute an option agreement in such form not
inconsistent with the Plan as may be approved by the Board of Directors. Such
option agreements may differ among recipients.
6. Purchase Price.
(a) General. The purchase price per share of stock deliverable upon
the exercise of an option shall be determined by the Board of Directors at the
time of grant of such option; provided, however, that in the case of an
Incentive Stock Option, the exercise price shall not be less than 100% of the
Fair Market Value (as hereinafter defined) of such stock, at the time of grant
of such option, or less than 110% of such Fair Market Value in the case of
options described in Section 11(b). "Fair Market Value" of a share of Common
Stock of the Company as of a specified date for the purposes of the Plan shall
mean the closing price of a share of the Common Stock on the principal
securities exchange (including the Nasdaq National Market) on which such
shares are traded on the day immediately preceding the date as of which Fair
Market Value is being determined, or on the next preceding date on which such
shares are traded if no shares were traded on such immediately preceding day,
or if the shares are not traded on a securities exchange, Fair Market Value
shall be deemed to be the average of the high bid and low asked prices of the
shares in the over-the-counter market on the day immediately preceding the
date as of which Fair Market Value is being determined or on the next
preceding date on which such high bid and low asked prices were recorded. If
the shares are not publicly traded, Fair Market Value of a share of Common
Stock (including, in the case of any repurchase of shares,
<PAGE>
any distributions with respect thereto which would be repurchased with the
shares) shall be determined in good faith by the Board of Directors. In no
case shall Fair Market Value be determined with regard to restrictions other
than restrictions which, by their terms, will never lapse.
(b) Payment of Purchase Price. Options granted under the Plan may
provide for the payment of the exercise price by delivery of cash or a check
to the order of the Company in an amount equal to the exercise price of such
options, or by any other means which the Board of Directors determines are
consistent with the purpose of the Plan and with applicable laws and
regulations (including, without limitation, the provisions of Rule 16b-3 and
Regulation T promulgated by the Federal Reserve Board).
7. Option Period.
Subject to earlier termination as provided in the Plan, each option
and all rights thereunder shall expire on such date as determined by the Board
of Directors and set forth in the applicable option agreement, provided, that
such date shall not be later than (10) ten years after the date on which the
option is granted.
8. Exercise of Options.
Each option granted under the Plan shall be exercisable either in
full or in installments at such time or times and during such period as shall
be set forth in the option agreement evidencing such option, subject to the
provisions of the Plan. No option granted to a Reporting Person for purposes
of the Exchange Act, however, shall be exercisable during the first six months
after the date of grant. Subject to the requirements in the immediately
preceding sentence, if an option is not at the time of grant immediately
exercisable, the Board of Directors may (i) in the agreement evidencing such
option, provide for the acceleration of the exercise date or dates of the
subject option upon the occurrence of specified events, and/or (ii) at any
time prior to the complete termination of an option, accelerate the exercise
date or dates of such option.
9. Nontransferability of Options.
No option granted under this Plan shall be assignable or otherwise
transferable by the optionee except (a) by will, (b) by the laws of descent
and distribution, (c) or pursuant to a qualified domestic relations order as
defined in the Code or Title I of the Employee Retirement Income Security Act,
or the rules thereunder, (d) to an immediate family member or (e) to a trust,
the beneficiary of which is the optionee or their immediate family members. An
option may be exercised during the lifetime of the optionee only by the
optionee. In the event an optionee dies during his employment by the Company
or any of its subsidiaries, or during the three-month period following the
date of termination of such employment, his option shall thereafter be
exercisable, during the period specified in the option agreement, by his
executors or administrators to the full extent to which such option was
exercisable by the optionee at the time
<PAGE>
of his death during the periods set forth in Section 10 or 11(d).
10. Effect of Termination of Employment or Other Relationship.
Except as provided in Section 11(d) with respect to Incentive Stock
Options and except as otherwise determined by the Committee at the date of
grant of an Option, and subject to the provisions of the Plan, an optionee may
exercise an option at any time within six (6) months following the termination
of the optionee's employment or other relationship with the Company or within
one (1) year if such termination was due to the death or disability of the
optionee but, except in the case of the optionee's death, in no event later
than the expiration date of the Option. If the termination of the optionee's
employment is for cause or is otherwise attributable to a breach by the
optionee of an employment or confidentiality or non-disclosure agreement, the
option shall expire immediately upon such termination. The Board of Directors
shall have the power to determine what constitutes a termination for cause or
a breach of an employment or confidentiality or non-disclosure agreement,
whether an optionee has been terminated for cause or has breached such an
agreement, and the date upon which such termination for cause or breach
occurs. Any such determinations shall be final and conclusive and binding upon
the optionee.
11. Incentive Stock Options.
Options granted under the Plan which are intended to be Incentive
Stock Options shall be subject to the following additional terms and
conditions:
(a) Express Designation. All Incentive Stock Options granted under
the Plan shall, at the time of grant, be specifically designated as such in
the option agreement covering such Incentive Stock Options.
(b) 10% Shareholder. If any employee to whom an Incentive Stock
Option is to be granted under the Plan is, at the time of the grant of such
option, the owner of stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company (after taking into account
the attribution of stock ownership rules of Section 424(d) of the Code), then
the following special provisions shall be applicable to the Incentive Stock
Option granted to such individual:
(i) The purchase price per share of the Common Stock subject
to such Incentive Stock Option shall not be less than 110% of the Fair Market
Value of one share of Common Stock at the time of grant; and
(ii) the option exercise period shall not exceed five years
from the date of grant.
(c) Dollar Limitation. For so long as the Code shall so provide,
options granted to any employee under the Plan (and any other incentive stock
option plans of the Company) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to
<PAGE>
the extent that such options, in the aggregate, become exercisable for the
first time in any one calendar year for shares of Common Stock with an
aggregate Fair Market Value, as of the respective date or dates of grant, of
more than $100,000.
(d) Termination of Employment, Death or Disability. No Incentive
Stock Option may be exercised unless, at the time of such exercise, the
optionee is, and has been continuously since the date of grant of his or her
option, employed by the Company, except that:
(i) an Incentive Stock Option may be exercised within the
period of three months after the date the optionee ceases to be an employee of
the Company (or within such lesser period as may be specified in the
applicable option agreement), provided, that the agreement with respect to
such option may designate a longer exercise period and that the exercise after
such three-month period shall be treated as the exercise of a non-statutory
option under the Plan;
(ii) if the optionee dies while in the employ of the
Company, or within three months after the optionee ceases to be such an
employee, the Incentive Stock Option may be exercised by the person to whom it
is transferred by will or the laws of descent and distribution within the
period of one year after the date of death (or within such lesser period as
may be specified in the applicable option agreement); and
(iii) if the optionee becomes disabled (within the meaning
of Section 22(e)(3) of the Code or any successor provisions thereto) while in
the employ of the Company, the Incentive Stock Option may be exercised within
the period of one year after the date the optionee ceases to be such an
employee because of such disability (or within such lesser period as may be
specified in the applicable option agreement).
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of
the Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
12. Additional Provisions.
(a) Additional Option Provisions. The Board of Directors may, in its
sole discretion, include additional provisions in option agreements covering
options granted under the Plan, including without limitation restrictions on
transfer, repurchase rights, rights of first refusal, commitments to pay cash
bonuses, to make, arrange for or guaranty loans or to transfer other property
to optionees upon exercise of options, or such other provisions as shall be
determined by the Board of Directors; provided, that such additional
provisions shall not be inconsistent with any other term or condition of the
Plan and such additional provisions shall not cause any Incentive Stock Option
granted under the Plan to fail to qualify as an Incentive Stock Option within
the meaning of Section 422 of the Code.
<PAGE>
(b) Acceleration, Extension, Etc. The Board of Directors may, in its
sole discretion, (i) accelerate the date or dates on which all or any
particular option or options granted under the Plan may be exercised or (ii)
extend the dates during which all, or any particular, option or options
granted under the Plan may be exercised; provided, however, that no such
extension shall be permitted if it would cause the Plan to fail to comply with
Section 422 of the Code or with Rule 16b-3 (if applicable).
13. General Restrictions.
(a) Investment Representations. The Company may require any person to
whom an Option or Restricted Stock Award is granted, as a condition of
exercising such option or award, to give written assurances in substance and
form satisfactory to the Company to the effect that such person is acquiring
the Common Stock subject to the option or award, for his or her own account
for investment and not with any present intention of selling or otherwise
distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws, or with covenants or representations made by the Company in
connection with any public offering of its Common Stock, including any
"lock-up" or other restriction on transferability.
(b) Compliance With Securities Law. Each Option or Restricted Stock
Award shall be subject to the requirement that if, at any time, counsel to the
Company shall determine that the listing, registration or qualification of the
shares subject to such option or award upon any securities exchange or
automated quotation system or under any state or federal law, or the consent
or approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with the issuance or purchase of shares
thereunder, such option or award may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval, or
satisfaction of such condition shall have been effected or obtained on
conditions acceptable to the Board of Directors. Nothing herein shall be
deemed to require the Company to apply for or to obtain such listing,
registration or qualification, or to satisfy such condition. 14. Rights as a
Stockholder.
The holder of an option shall have no rights as a stockholder with
respect to any shares covered by the option (including, without limitation,
any rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
15. Adjustment Provisions for Recapitalizations, Reorganizations and
Related Transactions.
(a) Recapitalizations and Related Transactions. If, through or as a
result of any recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares
of Common Stock are increased, decreased or exchanged
<PAGE>
for a different number or kind of shares or other securities of the Company,
or (ii) additional shares or new or different shares or other non cash assets
are distributed with respect to such shares of Common Stock or other
securities, an appropriate and proportionate adjustment shall be made in (x)
the maximum number and kind of shares reserved for issuance under or otherwise
referred to in the Plan, (y) the number and kind of shares or other securities
subject to any then outstanding options or Restricted Stock Awards under the
Plan, and (z) the price for each share subject to any then outstanding options
or Restricted Stock Awards under the Plan, without changing the aggregate
purchase price as to which such options or Restricted Stock Awards remain
exercisable. Notwithstanding the foregoing, no adjustment shall be made
pursuant to this Section 15 if such adjustment (i) would cause the Plan to
fail to comply with Section 422 of the Code or with Rule 16b 3 or (ii) would
be considered as the adoption of a new plan requiring stockholder approval.
(b) Reorganization, Merger and Related Transactions. All outstanding
Options under the Plan shall become fully exercisable for a period of sixty
(60) days following the occurrence of any Trigger Event, whether or not such
Options are then exercisable under the provisions of the applicable agreements
relating thereto. For purposes of the Plan, a "Trigger Event" is any one of
the following events :
(i) the date on which shares of Common Stock are first
purchased pursuant to a tender offer or exchange offer (other than
such an offer by the Company, any Subsidiary, any employee benefit
plan of the Company or of any Subsidiary or any entity holding shares
or other securities of the Company for or pursuant to the terms of
such plan), whether or not such offer is approved or opposed by the
Company and regardless of the number of shares purchased pursuant to
such offer;
(ii) the date the Company acquires knowledge that any person
or group deemed a person under Section 13(d)-3 of the Exchange Act
(other than the Company, any Subsidiary, any employee benefit plan of
the Company or of any Subsidiary or any entity holding shares of
Common Stock or other securities of the Company for or pursuant to
the terms of any such plan or any individual or entity or group or
affiliate thereof which acquired its beneficial ownership interest
prior to the date the Plan was adopted by the Board), in a
transaction or series of transactions, has become the beneficial
owner, directly or indirectly (with beneficial ownership determined
as provided in Rule 13d-3, or any successor rule, under the Exchange
Act), of securities of the Company entitling the person or group to
30% or more of all votes (without consideration of the rights of any
class or stock to elect directors by a separate class vote) to which
all stockholders of the Company would be entitled in the election of
the Board of Directors were an election held on such date;
(iii) the date, during any period of two consecutive years,
when individuals who at the beginning of such period constitute the
Board of Directors of the Company cease for any reason to constitute
at least a majority thereof, unless the election, or the nomination
for election by the stockholders of the Company, of each new director
was
<PAGE>
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period;
and
(iv) the date of approval by the stockholder s of the
Company of an agreement (a "reorganization agreement") providing for:
(A) The merger of consolidation of the Company with
another corporation where the stockholder s of the Company,
immediately prior to the merger or consolidation, do not
beneficially own, immediately after the merger or
consolidation, shares of the corporation issuing cash or
securities in the merger or consolidation entitling such
stockholder s to 80% or more of all votes (without
consideration of the rights of any class of stock to elect
directors by a separate class vote) to which all stockholder
s of such corporation would be entitled in the election of
directors or where the members of the Board of Directors of
the Company, immediately prior to the merger or
consolidation, do not, immediately after the merger or
consolidation, constitute a majority of the Board of
Directors of the corporation issuing cash or securities in
the merger or consolidation; or
(B) The sale or other disposition of all or
substantially all the assets of the Company.
(c) Board Authority to Make Adjustments. Any adjustments under this
Section 15 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
16. Merger, Consolidation, Asset Sale, Liquidation, etc.
(a) General. In the event of any sale, merger, transfer or
acquisition of the Company or substantially all of the assets of the Company
in which the Company is not the surviving corporation, and provided that after
the Company shall have requested the acquiring or succeeding corporation (or
an affiliate thereof), that equivalent options shall be substituted and such
successor corporation shall have refused or failed to assume all options
outstanding under the Plan or issue substantially equivalent options, then any
or all outstanding options under the Plan shall accelerate and become
exercisable in full immediately prior to such event. The Committee will notify
holders of options under the Plan that any such options shall be fully
exercisable for a period of fifteen (15) days from the date of such notice,
and the options will terminate upon expiration of such notice.
(b) Substitute Options. The Company may grant options under the Plan
in substitution for options held by employees of another corporation who
become employees of the Company, or a subsidiary of the Company, as the result
of a merger or consolidation of the employing corporation with the Company or
a subsidiary of the Company, or as a result of the acquisition by the Company,
or one of its subsidiaries, of property or stock of the employing
<PAGE>
corporation. The Company may direct that substitute options be granted on such
terms and conditions as the Board of Directors considers appropriate in the
circumstances.
17. Terms and Conditions of Awards of Restricted Stock.
(a) General Terms. The Committee shall have full and complete
authority and discretion, except as expressly limited by the Plan, to grant
awards of shares of restricted stock ("Restricted Stock Award(s)") and to
provide the terms and conditions (which need not be identical among
Participants) thereof. Restricted Stock Awards shall be evidenced by written
agreements in such form as the Committee from time to time shall approve. In
particular, the Committee shall prescribe the following terms and conditions:
(i) The number of Shares of Restricted Stock to be awarded
to each Participant;
(ii) The restriction period or performance criteria
applicable to each Restricted Stock Award which period or criteria need not be
the same for all Restricted Stock Awards; and
(iii) The payment, if any, to be made by the Participant in
consideration of the Restricted Stock Award. Any Restricted Stock Award may be
made without payment of consideration by the Participant or may provide for
payment of cash or deferred consideration which is less than the Fair Market
Value of the awarded shares at the date of grant. Any such Restricted Stock
Award may be on the basis that the shares awarded thereby may be repurchased
by the Company at a fixed price or at a price-established by formula either
upon forfeiture of the awarded shares or in other specified circumstances.
(b) Restrictions. The Shares of Restricted Stock awarded shall be
subject to restrictions as set forth in Section 18.
(c) Certificates. A stock certificate or certificates evidencing the
Shares of Restricted Stock awarded, together with the blank stock powers duly
executed by the recipient, shall be issued in the name of the recipient and
delivered to the Committee or its designee to be held in safekeeping until the
periodic expiration of the restrictions. The certificates issued pursuant to
the Plan shall contain a legend necessary to reflect the restrictions on such
Shares as contained in Section 18.
(d) Rights as a Stockholder . Subject to the restrictions contained
in Section 18 hereof, the recipient of a Restricted Stock Award pursuant to
the Plan shall have all the rights as a stockholder with respect to the Shares
covered by the Restricted Stock Award including, but not limited to, the right
to vote such Shares, the right to receive cash or stock dividends with respect
thereto and the right to participate in any subdivision or consolidation of
Shares or other capital adjustment, or other increase or decrease in such
Shares, effected without receipt of consideration by the Company. In the event
the recipient receives additional Shares pursuant to any of the foregoing
events, the Shares acquired shall be subject to the terms, conditions and
<PAGE>
restrictions contained herein as if such additional Shares were received at
the date of the original Restricted Stock Award.
18. Restrictions on Restricted Stock and Lapse Thereof.
(a) Restrictions. Shares of Restricted Stock awarded shall be to the
restrictions that, during the restriction period or prior to the lapse of the
restrictions in accordance with subsection (c) hereof, such Shares:
(i) Shall not be sold, exchanged, transferred, pledged or
otherwise disposed of; and
(ii) Shall be forfeited to the Company if the recipient's
employment is terminated, except as provided in subsection (c) hereof.
(b) Restriction Period. Restrictions shall lapse at the times or upon
the events determined by the Committee at the time of grant and set forth in
the applicable Agreement unless such restrictions are terminated earlier in
accordance with subsection (c) below.
(c) Lapse of Restrictions. The restrictions contained herein shall
lapse upon the occurrence of any of the following events:
(i) The death or total and permanent disability of a
recipient while employed by the Company;
(ii) The occurrence of a Trigger Event; and
(iii) At such times and in such amounts, other than as
described in (i) or (ii) above, including termination by the Company of a
recipient's employment for any reason or the early retirement of a recipient
with the consent of the Company, if the Committee determines in the exercise
of its sole discretion that the lapse of restrictions at such time with
respect to all or a portion of the Shares awarded is in the best interest of
the Company.
19. No Special Employment Rights.
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment
by the Company or interfere in any way with the right of the Company at any
time to terminate such employment or to increase or decrease the compensation
of the optionee.
20. Other Employee Benefits.
Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of
<PAGE>
an option or the sale of shares received upon such exercise will not
constitute compensation with respect to which any other employee benefits of
such employee are determined, including, without limitation, benefits under
any bonus, pension, profit-sharing, life insurance or salary continuation
plan, except as otherwise specifically determined by the Board of Directors.
21. Amendment of the Plan.
(a) The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect; provided, however, that if at any
time the approval of the stockholder s of the Company is required under
Section 422 of the Code or any successor provision with respect to Incentive
Stock Options, or under Rule 16b-3, the Board of Directors may not effect such
modification or amendment without such approval; and provided, further, that
the provisions of Section 3(c) hereof shall not be amended more than once
every six months, other than to comport with changes in the Code, the Employer
Retirement Income Security Act of 1974, as amended, or the rules thereunder.
(b) The modification or amendment of the Plan shall not, without the
consent of an optionee, affect his or her rights under an option previously
granted to him or her. With the consent of the optionee affected, the Board of
Directors may amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to amend or modify
(i) the terms and provisions of the Plan and of any outstanding Incentive
Stock Options granted under the Plan to the extent necessary to qualify any or
all such options for such favorable federal income tax treatment (including
deferral of taxation upon exercise) as may be afforded incentive stock options
under Section 422 of the Code and (ii) the terms and provisions of the Plan
and of any outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3.
22. Withholding.
(a) The Company shall have the right to deduct from payments of any
kind otherwise due to the optionee any federal, state or local taxes of any
kind required by law to be withheld with respect to any shares issued upon
exercise of options under the Plan. Subject to the prior approval of the
Company, which may be withheld by the Company in its sole discretion, the
optionee may elect to satisfy such obligations, in whole or in part, (i) by
causing the Company to withhold shares of Common Stock otherwise issuable
pursuant to the exercise of an option or (ii) by delivering to the Company
shares of Common Stock already owned by the optionee. The shares so delivered
or withheld shall have a Fair Market Value equal to such withholding
obligation as of the date that the amount of tax to be withheld is to be
determined. An optionee who has made an election pursuant to this Section
20(a) may only satisfy his or her withholding obligation with shares of Common
Stock which are not subject to any repurchase, forfeiture, unfulfilled vesting
or other similar requirements.
(b) The acceptance of shares of Common Stock upon exercise of an
Incentive Stock Option shall constitute an agreement by the optionee (i) to
notify the Company if any or all of
<PAGE>
such shares are disposed of by the optionee within two years from the date the
option was granted or within one year from the date the shares were issued to
the optionee pursuant to the exercise of the option, and (ii) if required by
law, to remit to the Company, at the time of and in the case of any such
disposition, an amount sufficient to satisfy the Company's federal, state and
local withholding tax obligations with respect to such disposition, whether or
not, as to both (i) and (ii), the optionee is in the employ of the Company at
the time of such disposition.
(c) Notwithstanding the foregoing, in the case of a Reporting Person
whose options have been granted in accordance with the provisions of Section
3(b) herein, no election to use shares for the payment of withholding taxes
shall be effective unless made in compliance with any applicable requirements
of Rule 16b-3.
23. Cancellation and New Grant of Options, Etc.
The Board of Directors shall have the authority to effect, at any
time and from time to time, with the consent of the affected optionees, (i)
the cancellation of any or all outstanding options under the Plan and the
grant in substitution therefor of new options under the Plan covering the same
or different numbers of shares of Common Stock and having an option exercise
price per share which may be lower or higher than the exercise price per share
of the cancelled options or (ii) the amendment of the terms of any and all
outstanding options under the Plan to provide an option exercise price per
share which is higher or lower than the then-current exercise price per share
of such outstanding options.
24. Effective Date and Duration of the Plan.
(a) Effective Date. The Plan shall become effective when adopted by
the Board of Directors, but no Incentive Stock Option granted under the Plan
shall become exercisable unless and until the Plan shall have been approved by
the Company's stockholder s. If such stockholder approval is not obtained
within twelve months after the date of the Board's adoption of the Plan, no
options previously granted under the Plan shall be deemed to be Incentive
Stock Options and no Incentive Stock Options shall be granted thereafter.
Amendments to the Plan not requiring stockholder approval shall become
effective when adopted by the Board of Directors; amendments requiring
stockholder approval (as provided in Section 21) shall become effective when
adopted by the Board of Directors, but no Incentive Stock Option granted after
the date of such amendment shall become exercisable (to the extent that such
amendment to the Plan was required to enable the Company to grant such
Incentive Stock Option to a particular optionee) unless and until such
amendment shall have been approved by the Company's stockholders. If such
stockholder approval is not obtained within twelve months of the Board's
adoption of such amendment, any Incentive Stock Options granted on or after
the date of such amendment shall terminate to the extent that such amendment
to the Plan was required to enable the Company to grant such option to a
particular optionee. Subject to this limitation, options may be granted under
the Plan at any time after the effective date and before the date fixed for
termination of the Plan.
<PAGE>
(b) Termination. Unless sooner terminated in accordance with Section
16, the Plan shall terminate upon the earlier of (i) the close of business on
the day next preceding the tenth anniversary of the date of its adoption by
the Board of Directors, or (ii) the date on which all shares available for
issuance under the Plan shall have been issued pursuant to the exercise or
cancellation of options granted under the Plan. If the date of termination is
determined under (i) above, then options outstanding on such date shall
continue to have force and effect in accordance with the provisions of the
instruments evidencing such options.
25. Governing Law.
The provisions of this Plan shall be governed and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of laws.
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form S-8
Registration Statement of our report dated February 20, 1996 on the
consolidated financial statements included or incorporated by reference in the
U.S. Diagnostic Labs Inc. annual on Form 10-K for the year ended December 31,
1995.
On July 1, 1996, the firm of Mortenson and Associates, P.C. changed
its name to Moore Stephens, P.C.
MOORE STEPHENS, P.C
Certified Public Accountants
Cranford, New Jersey
September 24, 1996
