<PAGE>
As filed with the Securities and Exchange Commission on June 30, 1998
Registration Statement No.333-
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INTEGRA LIFESCIENCES CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 51-0317849
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Integra LifeSciences Corporation
1998 Stock Option Plan
105 Morgan Lane Integra LifeSciences Corporation
Plainsboro, New Jersey 08536 Employee Stock Purchase Plan
---------------------------- --------------------------------
(Address of Registrant's principal executive (Full title of the plans)
offices)
Stuart M. Essig
President and Chief Executive Officer
Integra LifeSciences Corporation
105 Morgan Lane
Plainsboro, New Jersey 08536 (609) 275-0500
---------------------------- ---------------
(Name and address of agent for service) (Telephone number, including area
code, of agent for service)
Please send copies of all communications to:
John E. Stoddard III, Esquire
DRINKER BIDDLE & REATH LLP
Suite 300
105 College Road East
Princeton, NJ 08542-0627
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================== ---------------------- ---------------------- ---------------------- ======================
Title of Securities Proposed maximum Proposed maximum
to be Amount to be offering price per aggregate offering Amount of
registered registered (1) share (2) price (2) registration fee
======================== ====================== ====================== ====================== ======================
<S> <C> <C> <C> <C> <C>
Common Stock 1,500,000(3) 10,000 @ $7.625 $76,250 $22.49
($.01 par value)
1,490,000 @ $7.0625 $10,523,125 $3,104.33
======================== ====================== ====================== ====================== ======================
</TABLE>
(1) Pursuant to Rule 416(a), this Registration Statement also registers such
indeterminate number of additional shares as may become issuable under the Plan
in connection with share splits, share dividends or similar transactions.
(2) Estimated pursuant to Rule 457(h) solely for the purpose of calculating the
registration fee. As to shares subject to outstanding but unexercised options,
the price and fee are computed based on the price at which such option may be
exercised. As to the remaining 1,490,000 shares, the price and fee are computed
based upon $7.0625, the average of the high and low prices for the Common Stock
reported on the NASDAQ National Market System on June 26, 1998.
(3) Amount includes 1,000,000 shares issuable under the 1998 Stock Option Plan
and 500,000 shares issuable under the Employee Stock Purchase Plan.
<PAGE>
PART II
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by Integra
LifeSciences Corporation (the "Registrant" or the "Company") with the Securities
and Exchange Commission (the "Commission") are incorporated by reference into
this Registration Statement:
(a) the Company's Annual Report on Form 10-K for the
year ended December 31, 1997;
(b) the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998;
(c) the description of the common stock, par value $.01 per
share, of the Company (the "Common Stock") contained in the Company's
Registration Statement on Form 10/A (File No. 0-26224) filed with the
Commission, which became effective on August 8, 1995, including any amendments
or reports filed for the purpose of updating such description; and
(d) all other reports filed pursuant to Sections 13(a) or
15(d) of the Securities Exchange Act of 1934 since March 31, 1998.
All reports and other documents filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered pursuant to
this Registration Statement have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such documents or reports.
Item 4. Description of Securities.
Not applicable because the Common Stock, which is the class of
securities offered pursuant to this Registration Statement, is registered under
the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
William M. Goldstein, the Secretary of the Registrant, was a
Director of the Registrant until May 18, 1998. Mr. Goldstein is a partner in
the law firm of Drinker Biddle & Reath LLP, counsel to the Registrant. Mr.
Goldstein owns 18,250 shares of the Registrant's Common Stock.
Item 6. Indemnification of Directors and Officers.
The Delaware General Corporation Law authorizes corporations
to limit or eliminate the personal liability of directors to corporations and
their stockholders for monetary damages for breach of directors' fiduciary duty
of care. The duty of care requires that, when acting on behalf of the
corporation, directors must exercise an informed business judgment based on all
material information reasonably available to them. Absent the limitations
authorized by the Delaware statute, directors could be accountable to
corporations and their stockholders for monetary damages for conduct that does
not satisfy their duty of care. Although the statute does not change directors'
duty of care, it enables corporations to limit available relief to equitable
remedies such as injunction or rescission. The Registrant's Amended and Restated
Certificate of Incorporation ("Certificate of Incorporation") limits the
liability of the Registrant's directors to the Registrant or its stockholders to
the fullest extent permitted by the Delaware statute. Specifically, directors of
the Registrant will not be personally liable for monetary damages for breach of
a director's fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Registrant or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law, or (iv) for any transaction from
<PAGE>
which the director derived an improper personal benefit. The inclusion of this
provision in the Certificate of Incorporation may have the effect of reducing
the likelihood of derivative litigation against directors and may discourage or
deter stockholders or management from bringing a lawsuit against directors for
breach of their duty of care, even though such an action, if successful, might
otherwise have benefitted the Registrant and its stockholders. At present, there
is no litigation or proceeding pending involving a director of the Registrant as
to which indemnification is being sought, nor is the Registrant aware of any
threatened litigation that may result in claims for indemnification by any
director.
The By-laws of the Registrant provide for indemnification of
the officers and directors of the Registrant to the fullest extent permitted
under Delaware law.
The Registrant has directors and officers liability insurance
coverage and has entered into indemnification agreements with each of its
directors and executive officers.
Reference is made to Item 9 of this Registration Statement for
additional information regarding indemnification of directors and officers.
Item 7. Exemption from Registration Claimed.
No restricted securities are being reoffered or resold
pursuant to this Registration Statement.
Item 8. Exhibits.
4.1 Integra LifeSciences Corporation 1998 Stock Option Plan.
4.2 Integra LifeSciences Corporation Employee Stock Purchase Plan.
5 Opinion of Drinker Biddle & Reath LLP.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Drinker Biddle & Reath LLP (Included in Exhibit 5).
25 Powers of Attorney (See Signature Page).
Item 9. Undertakings
1. Undertakings Required by Regulation S-K Item 512(a)
The undersigned Registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are
being made pursuant to this Registration Statement, 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 this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in aggregate,
represent a fundamental change in the information set forth in this
Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not
<PAGE>
previously disclosed in this Registration Statement or any material change to
such information in thisRegistration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above 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 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this 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.
2. Undertakings Required by Regulation S-K Item 512(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 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Undertakings Required by Regulation S-K Item 512(h).
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 Company 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 Plainsboro, New Jersey, on June 30, 1998.
INTEGRA LIFESCIENCES CORPORATION
By: /s/ Stuart M. Essig
Stuart M. Essig, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Stuart M. Essig and
David B. Holtz, his true and lawful attorney-in-fact and agents, with full power
of substitution and resubstitution for him and in his name, place and stead, in
any and all capacities, to sign any and 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 attorneys-in-fact and
agents, and each of them, 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 attorneys-in-fact and agents, or any of
them, or their or his substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Stuart M. Essig Chief Executive Officer, June 30, 1998
- -------------------------- President and Director (Principal Executive
Stuart M. Essig Officer)
/s/ David B. Holtz Vice President and Treasurer June 30, 1998
- ---------------------------- (Principal Financial and Accounting Officer)
David B. Holtz
/s/ Richard E. Caruso, PhD Director June 30, 1998
- --------------------------
Richard E. Caruso, PhD
/s/ George W. McKinney III Director June 30, 1998
-------------------------
George W. McKinney III
/s/ James M. Sullivan Director June 30, 1998
- ---------------------------
James M. Sullivan
/s/ Edmund L. Zalinski Director June 30, 1998
- ---------------------------
Edmund L. Zalinski
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ---------- -------------
4.1 Integra LifeSciences Corporation
1998 Stock Option Plan
4.2 Integra LifeSciences Corporation
Employee Stock Purchase Plan
5 Opinion of Drinker Biddle & Reath LLP
23.1 Consent of Coopers & Lybrand, L.L.P.
23.2 Consent of Drinker Biddle & Reath LLP
(Included in Exhibit 5)
25 Powers of Attorney
(See Signature Page)
<PAGE>
EXHIBIT 4.1
<PAGE>
INTEGRA LIFESCIENCES CORPORATION
1998 STOCK OPTION PLAN
<PAGE>
INTEGRA LIFESCIENCES CORPORATION
1998 STOCK OPTION PLAN
SECTION 1
Purpose
This INTEGRA LIFESCIENCES CORPORATION 1998 STOCK OPTION PLAN
(the "Plan") is intended to provide a means whereby Integra LifeSciences
Corporation (the "Company") may, through the grant of incentive stock options
and non-qualified stock options (collectively, "Options") to purchase common
stock of the Company, par value $0.01 per share ("Common Stock") to Key
Employees and Associates (both as defined in Section 3 hereof), attract and
retain such Key Employees and Associates and motivate them to exercise their
best efforts on behalf of the Company, any Related Corporation (as defined
below), or any affiliate of the Company or a Related Corporation.
For purposes of the Plan, a "Related Corporation" shall mean
either a corporate subsidiary of the Company, as defined in section 424(f) of
the Internal Revenue Code of 1986, as amended ("Code"), or the corporate parent
of the Company, as defined in section 424(e) of the Code. Further, as used in
the Plan (a) the term "ISO" shall mean an Option which qualifies as an incentive
stock option within the meaning of section 422 of the Code; and (b) the term
"NQSO" shall mean an Option which does not qualify as an incentive stock option.
SECTION 2
Administration
The Plan shall be administered by the Company's Stock Option
Committee (the "Committee"), which shall consist of at least two directors of
the Company, who shall be appointed by, and shall serve at the pleasure of, the
Company's Board of Directors (the "Board"). In the event a committee has not
been established in accordance with the preceding sentence, or cannot be
constituted to vote on the grant of an Option, the "Committee" shall consist of
the entire Board. Each member of such Committee, while serving as such, shall be
deemed to be acting in his capacity as a director of the Company.
The Committee shall have full authority, subject to the terms
of the Plan, to select the Key Employees and Associates (both as defined in
Section 3 hereof) to be granted ISOs and/or NQSOs under the Plan, to grant
Options on behalf of the Company, and to set the date of grant and the other
terms of such Options. The Committee may correct any defect, supply any omission
and reconcile any inconsistency in this Plan and in any Option granted hereunder
in the manner and to the extent it shall deem desirable. The Committee also
shall have the authority to establish such rules and regulations, not
inconsistent with the provisions of the Plan, for the proper administration of
the Plan, and to amend, modify or rescind any such rules and regulations, and to
make such determinations and interpretations under, or in connection with, the
Plan, as it deems necessary or advisable. All such rules, regulations,
determinations and interpretations shall be binding and conclusive upon the
Company, its stockholders and all officers and employees and former officers and
employees, and upon their respective legal representatives, beneficiaries,
successors and assigns, and upon all other persons claiming under or through any
of them. No member of the Board or the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Option
granted under it.
SECTION 3
Eligibility
(a) In General. Key Employees and Associates shall be eligible
to receive Options under the Plan. Key Employees and Associates who have been
granted an Option under the Plan shall be referred to as "Optionees." More than
one Option may be granted to an Optionee under the Plan.
(b) Key Employees. "Key Employees" are officers, executives,
and managerial and non-managerial employees of the Company, a Related
Corporation, or an affiliate of the Company or a Related
<PAGE>
Corporation who are selected by the Committee to receive Options. Key
Employees of the Company and/or a Related Corporation shall be eligible
to receive ISOs and/or NQSOs. Key Employees of an affiliate shall be
eligible to receive only NQSOs.
(c) Associates. "Associates" are designated non-employee
directors, consultants and other persons providing services to the Company, a
Related Corporation, or an affiliate of the Company or a Related Corporation.
Associates shall be eligible to receive only NQSOs.
SECTION 4
Stock
The maximum number of shares of Common Stock that may be
issued under Options granted under the Plan shall be 2,000,000; provided,
however, that no Key Employee shall receive Options for more than 1,000,000
shares of Common Stock over any one-year period. However, both limits in the
preceding sentence shall be subject to adjustment as hereinafter provided.
Shares issuable under the Plan may be authorized but unissued shares or
reacquired shares, and the Company may purchase shares required for this
purpose, from time to time, if it deems such purchase to be advisable.
If any Option granted under the Plan expires or otherwise
terminates for any reason whatsoever (including, without limitation, the
Optionee's surrender thereof) without having been exercised, the shares subject
to the unexercised portion of such Option shall continue to be available for the
granting of Options under the Plan as fully as if such shares had never been
subject to an Option; provided, however, that (a) if an Option is cancelled, the
shares of Common Stock covered by the cancelled Option shall be counted against
the maximum number of shares specified above for which Options may be granted to
a single Key Employee, and (b) if the exercise price of an Option is reduced
after the date of grant, the transaction shall be treated as a cancellation of
the original Option and the grant of a new Option for purposes of counting the
maximum number of shares for which Options may be granted to a Key Employee.
SECTION 5
Granting of Options
From time to time until the expiration or earlier suspension
or discontinuance of the Plan, the Committee may, on behalf of the Company,
grant to Key Employees and Associates under the Plan such Options as it
determines are warranted, subject to the limitations of the Plan; provided,
however, that grants of ISOs and NQSOs shall be separate and not in tandem. The
granting of an Option under the Plan shall not be deemed either to entitle the
Key Employee or Associate to, or to disqualify the Key Employee or Associate
from, any participation in any other grant of Options under the Plan. In making
any determination as to whether a Key Employee or Associate shall be granted an
Option, the type of Option to be granted, and the number of shares to be covered
by such Option, the Committee shall take into account the duties of the Key
Employee or Associate, his or her present and potential contributions to the
success of the Company, a Related Corporation, or an affiliate of the Company or
a Related Corporation, the tax implications to the Company and the Key Employee
or Associate of any Option granted, and such other factors as the Committee
shall deem relevant in accomplishing the purposes of the Plan. Moreover, the
Committee may provide in the Option that said Option may be exercised only if
certain conditions, as determined by the Committee, are fulfilled.
SECTION 6
Annual Limit
(a) ISOs. The aggregate Fair Market Value (determined as of
the date the ISO is granted) of the Common Stock with respect to which ISOs are
exercisable for the first time by a Key Employee during any calendar year
(counting ISOs under this Plan and incentive stock options under any other stock
option plan of the Company or a Related Corporation) shall not exceed $100,000.
The term "Fair Market Value" shall mean the value of the shares of Common Stock
arrived at by a good faith determination of the Committee and shall be:
(1) The quoted closing price on the last business
day prior to the specified date, if
<PAGE>
there is a market for the Common Stock on a registered securities exchange or
in an over-the-counter market;
(2) The weighted average of the quoted closing prices
on the nearest date before and the nearest date after the last business day
prior to the specified date, if there are no sales on such day but there are
such sales on dates within a reasonable period both before and after such date;
(3) The mean between the bid and asked prices, as
reported by the National Quotation Bureau on the specified date, if actual sales
are not available during a reasonable period beginning before and ending after
the specified date; or
(4) If (1) through (3) above are not applicable, such
other method of determining Fair Market Value as shall be authorized by the Code
, or the rules or regulations thereunder, and adopted by the Committee.
Where the Fair Market Value of shares of Common Stock
is determined under (2) above, the average of the quoted closing prices on the
nearest date before and the nearest date after the last business day prior to
the specified date shall be weighted inversely by the respective numbers
of trading days between the dates of reported sales and such date
(i.e., the valuation date), in accordance with Treas. Reg.
Section 20.2031-2(b)(1), or any successor thereto.
(b) Options Over Annual Limit. If an Option intended as an ISO
is granted to a Key Employee of the Company or a Related Corporation and such
Option may not be treated in whole or in part as an ISO pursuant to the
limitation in Subsection (a) above, such Option shall be treated as an ISO to
the extent it may be so treated under such limitation and as an NQSO as to the
remainder. For purposes of determining whether an ISO would cause such
limitation to be exceeded, ISOs shall be taken into account in the order
granted.
(c) NQSOs. The annual limits set forth above for ISOs shall
not apply to NQSOs.
SECTION 7
Option Agreements - Other Provisions
Options granted under the Plan shall be evidenced by written
documents ("Option Agreements") in such form as the Committee shall, from time
to time, approve. An Option Agreement shall specify whether the Option is an ISO
or NQSO; provided, however, if the Option is not designated in the Option
Agreement as an ISO or NQSO, the Option shall constitute an ISO if it complies
with the terms of section 422 of the Code, and otherwise, it shall constitute an
NQSO. Each Optionee shall enter into, and be bound by, such Option Agreements,
as soon as practicable after the grant of an Option.
In connection with the grant of any Option, the associated
Option Agreement may, in the discretion of the Committee, modify or vary any of
the terms of this Plan, including, without limitation, the terms relating to the
vesting and exercise of Options, both in general and upon termination of
employment or service, disability, and death, the terms relating to the number
of shares issuable upon the exercise of outstanding Options and the treatment of
Options upon the occurrence of certain corporate transactions; provided,
however, that any further increase in the maximum number of shares which may be
granted to an individual in a single grant pursuant to the Plan shall require
such shareholder approval as may be then required under the applicable rules and
regulations under the Code, and that with respect to any grant of an Option
which is intended to be an ISO the terms of the Plan, as in effect on the date
hereof or subsequently amended, and not the terms of the applicable Option
Agreement, shall control. In all other cases, in the event of any inconsistency
or conflict between an Option Agreement approved by the Committee and this Plan,
the terms of the Option Agreement shall control to the extent provided in the
Option Agreement. No Option Agreement may be amended except in a writing
executed by a duly authorized officer of the Company and the Optionee or his or
her permitted successors and assigns.
<PAGE>
SECTION 8
Terms and Conditions of Options
Options granted pursuant to the Plan shall include expressly
or by reference the following terms and conditions, as well as such other
provisions not inconsistent with the provisions of this Plan and, for ISOs
granted under this Plan, the provisions of section 422(b) of the Code, as the
Committee shall deem desirable:
(a) Number of Shares. A statement of the number of shares to
which the Option pertains.
(b) Price. A statement of the Option price which shall be
determined and fixed by the Committee in its discretion, but shall not be less
than the higher of 100% (110% in the case of ISOs granted to more than 10%
shareholders as discussed in Subsection (j) below) of the fair market value of
the optioned shares of Common Stock, or the par value thereof, on the date the
Option is granted.
(c) Term.
(1) ISOs. Subject to earlier termination as
provided in Subsections (e), (f) and (g) below and in Section 9 hereof,
the term of each ISO shall be not more than ten years (five years in the
case of more than 10% shareholders as discussed in Subsection (j) below)
from the date of grant.
(2) NQSOs. Subject to earlier termination as
provided in Subsections (e), (f) and (g) below and in Section 9 hereof, the term
of each NQSO shall be not more than ten years from the date of grant.
(d) Exercise.
(1) General. Options shall be exercisable in such
installments and on such dates, not less than three months from the date of
grant, as the Committee may specify, provided that:
(A) in the case of new Options granted to
an Optionee in replacement for options (whether granted under the Plan or
otherwise) held by the Optionee, the new Options may be made exercisable, if so
determined by the Committee, in its discretion, at the earliest date the
replaced options were exercisable, but not earlier than three months from the
date of grant of the new Options; and
(B) the Committee may accelerate the
exercise date of any outstanding Options, in its discretion, if it deems such
acceleration to be desirable.
Any Option shares, the right to the
purchase of which has accrued, may be purchased at any time up to the
expiration or termination of the Option. Exercisable Options may be
exercised, in whole or in part, from time to time by giving written
notice of exercise to the Company at its principal office, specifying the
number of shares to be purchased and accompanied by payment in full of
the aggregate Option exercise price for such shares. Only full shares
shall be issued under the Plan, and any fractional share which might
otherwise be issuable upon exercise of an Option granted hereunder shall
be forfeited.
(2) Manner of Payment. The Option price shall be
payable:
(A) in cash or its equivalent;
(B) in the case of an ISO, if the
Committee in its discretion causes the Option Agreement so to provide, and in
the case of an NQSO, if the Committee in its discretion so determines at or
prior to the time of exercise:
(i) in Common Stock previously acquired by
the Optionee; provided that if such shares of Common Stock were acquired through
the exercise of an incentive stock option and are used to pay the Option price
of an ISO, such shares have been held by the Optionee for a period of not less
than the holding period described in section 422(a)(1) of the Code on the date
of exercise, or if such shares of Common Stock were acquired
<PAGE>
through exercise of a non-qualified stock option or through exercise of an
incentive stock option and are used to pay the Option price of an NQSO, such
shares have been held by the Optionee for a period of more than 12 months on the
date of exercise;
(ii) in Common Stock newly acquired by the
Optionee upon exercise of such Option (which shall constitute a disqualifying
disposition in the case of an ISO);
(iii) in the discretion of the Committee, in
any combination of (A), (B)(i) and/or (B)(ii) above; or
(iv) by delivering a properly executed
notice of exercise of the Option to the Company and a broker, with
irrevocable instructions to the broker promptly to deliver to the Company
the amount of sale or loan proceeds necessary to pay the exercise price
of the Option.
In the event the Option price is paid, in
whole or in part, with shares of Common Stock, the portion of the Option price
so paid shall be equal to the Fair Market Value on the date of exercise of the
Option of the Common Stock surrendered in payment of such Option price.
(e) Termination of Employment or Service. If an Optionee's
employment by or service with the Company (and Related Corporations and
affiliates) is terminated by either party prior to the expiration date fixed for
his or her Option for any reason other than death or disability, such Option may
be exercised, to the extent of the number of shares with respect to which the
Optionee could have exercised it on the date of such termination, or to any
greater extent permitted by the Committee, by the Optionee at any time prior to
the earlier of (i) the expiration date specified in such Option, or (ii) an
accelerated termination date determined by the Committee, in its discretion,
except that, subject to Section 9 hereof, such accelerated termination date
shall not be earlier than the date of the Optionee's termination of employment
or service, and shall not be later than one year after the date of the Key
Employee's termination of employment.
(f) Exercise upon Disability of Optionee. If an Optionee shall
become disabled (within the meaning of section 22(e)(3) of the Code) during his
or her employment by or service with the Company (and Related Corporations and
affiliates) and, prior to the expiration date fixed for his or her Option, his
or her employment or service is terminated as a consequence of such disability,
such Option may be exercised, to the extent of the number of shares with respect
to which the Optionee could have exercised it on the date of such termination,
or to any greater extent permitted by the Committee, by the Optionee at any time
prior to the earlier of (i) the expiration date specified in such Option, or
(ii) an accelerated termination date determined by the Committee, in its
discretion, except that, subject to Section 9 hereof, such accelerated
termination date shall not be earlier than the date of the Optionee's
termination of employment or service by reason of disability, and shall not be
later than one year after the date of the Key Employee's termination of
employment. In the event of the Optionee's legal disability, such Option may be
so exercised by the Optionee's legal representative.
(g) Exercise upon Death of Optionee. If an Optionee shall die
during his or her employment by or service with the Company (and Related
Corporations and affiliates), and prior to the expiration date fixed for his or
her Option, or if an Optionee whose employment or service is terminated for any
reason, shall die following his or her termination of employment or service but
prior to the earliest of (i) the expiration date fixed for his or her Option,
(ii) the expiration of the period determined under Subsections (e) and (f)
above, or (iii) in the case of an ISO, three months following termination of the
Key Employee's employment, such Option may be exercised, to the extent of the
number of shares with respect to which the Optionee could have exercised it on
the date of his or her death, or to any greater extent permitted by the
Committee, by the Optionee's estate, personal representative or beneficiary who
acquired the right to exercise such Option by bequest or inheritance or by
reason of the death of the Optionee, at any time prior to the earlier of (i) the
expiration date specified in such Option or (ii) an accelerated termination date
determined by the Committee, in its discretion except that, subject to Section 9
hereof, such accelerated termination date shall not be later than one year after
the date of death.
(h) Non-Transferability. No ISO and, except to the extent
provided in the related Option Agreement, no NQSO shall be assignable or
transferable by the Optionee otherwise than by will or by the laws of
<PAGE>
descent and distribution, and during the lifetime of the Optionee, the Option
shall be exercisable only by him or her or by his or her guardian or legal
representative. If the Optionee is married at the time of exercise and if the
Optionee so requests at the time of exercise, the certificate or certificates
shall be registered in the name of the Optionee and the Optionee's spouse,
jointly, with right of survivorship.
(i) Rights as a Stockholder. An Optionee shall have no rights
as a stockholder with respect to any shares covered by his or her Option until
the issuance of a stock certificate to him for such shares.
(j) Ten Percent Shareholder. If the Optionee owns more than
10% of the total combined voting power of all shares of stock of the Company or
of a Related Corporation at the time an ISO is granted to him or her, the Option
price for the ISO shall be not less than 110% of the fair market value of the
optioned shares of Common Stock on the date the ISO is granted, and such ISO, by
its terms, shall not be exercisable after the expiration of five years from the
date the ISO is granted. The conditions set forth in this Subsection (j) shall
not apply to NQSOs.
(k) Listing and Registration of Shares. Each Option shall be
subject to the requirement that, if at any time the Committee shall determine,
in its discretion, that the listing, registration or qualification of the shares
covered thereby upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such Option
or the purchase of shares thereunder, or that action by the Company or by the
Optionee should be taken in order to obtain an exemption from any such
requirement, no such Option may be exercised, in whole or in part, unless and
until such listing, registration, qualification, consent, approval, or action
shall have been effected, obtained, or taken under conditions acceptable to the
Committee. Without limiting the generality of the foregoing, each Optionee or
his or her legal representative or beneficiary may also be required to give
satisfactory assurance that shares purchased upon exercise of an Option are
being purchased for investment and not with a view to distribution, and
certificates representing such shares may be legended accordingly.
(l) Withholding and Use of Shares to Satisfy Tax Obligations.
The obligation of the Company to deliver shares of Common Stock upon the
exercise of any Option shall be subject to applicable federal, state and local
tax withholding requirements.
If the exercise of any Option is subject to the withholding
requirements of applicable tax laws, the Committee, in its discretion (and
subject to such withholding rules ("Withholding Rules") as shall be adopted by
the Committee), may permit the Optionee to satisfy the withholding tax, in whole
or in part, by electing to have the Company withhold (or by returning to the
Company) shares of Common Stock, which shares shall be valued, for this purpose,
at their Fair Market Value on the date of exercise of the Option (or if later,
the date on which the Optionee recognizes ordinary income with respect to such
exercise) (the "Determination Date"). An election to use shares of Common Stock
to satisfy tax withholding requirements must be made in compliance with and
subject to the Withholding Rules. The Committee may not withhold shares in
excess of the number necessary to satisfy the minimum income tax withholding
requirements. In the event shares of Common Stock acquired under the exercise of
an incentive stock option are used to satisfy such withholding requirement, such
shares of Common Stock must have been held by the Optionee for a period of not
less than the holding period described in section 422(a)(1) of the Code on the
Determination Date, or if such shares of Common Stock were acquired through
exercise of a non-qualified stock option, such shares were acquired at least 12
months prior to the Determination Date.
SECTION 9
Capital Adjustments; Corporate Transactions
The number of shares which may be issued under the Plan, the
maximum number of shares with respect to which Options may be granted to any Key
Employee under the Plan, both as stated in Section 4 hereof, and the number of
shares issuable upon exercise of outstanding Options under the Plan (as well as
the Option price per share under such outstanding Options), shall, subject to
the provisions of section 424(a) of the Code, be adjusted, as may be deemed
appropriate by the Committee, to reflect any stock dividend, stock split, share
combination, or similar change in the capitalization of the Company.
<PAGE>
In the event of a corporate transaction (as that term is
described in section 424(a) of the Code and the Treasury Regulations issued
thereunder as, for example, a merger, consolidation, acquisition of property or
stock, separation, reorganization, or liquidation), each outstanding Option
shall be assumed by the surviving or successor corporation; provided, however,
that, in the event of a proposed corporate transaction, the Committee may
terminate all or a portion of the outstanding Options if it determines that such
termination is in the best interests of the Company. If the Committee decides to
terminate outstanding Options, the Committee shall give each Optionee holding an
outstanding Option to be terminated not less than seven days' notice prior to
any such termination by reason of such a corporate transaction, and any such
Option which is to be so terminated may be exercised (if and only to the extent
that it is then exercisable) up to, and including the date immediately preceding
such termination. Further, as provided in Section 8(d) hereof the Committee, in
its discretion, may accelerate, in whole or in part, the date on which any or
all Options become exercisable.
The Committee also may, in its discretion, change the terms of
any outstanding Option to reflect any such corporate transaction, provided that,
in the case of ISOs, such change is excluded from the definition of a
"modification" under section 424(h) of the Code.
SECTION 9A
Change in Control
Notwithstanding any other provision of the Plan to the
contrary, all outstanding Options shall become fully vested and exercisable upon
a Change in Control of the Company. "Change in Control" shall mean any of the
following events:
(a) An acquisition (other than directly from the Company) of
any voting securities of the Company ("Voting Securities") by any "Person" (as
such term is used for purposes of section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) immediately after which
such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the combined voting power
of all the then outstanding Voting Securities, other than the Company, any
trustee or other fiduciary holding securities under any employee benefit plan of
the Company or an affiliate thereof, or any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company; provided, however, that
any acquisition from the Company or any acquisition pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of paragraph (c) of this Section
9A shall not be a Change in Control under this paragraph (a);
(b) The individuals who, as of February 27, 1998, are members
of the Company's Board of Directors (the "Incumbent Board") cease for any reason
to constitute at least two-thirds of the Board of Directors; provided, however,
that if the election, or nomination for election by the shareholders, of any new
director was approved by a vote of at least two-thirds of the members of the
Board of Directors who constitute Incumbent Board members, such new directors
shall for all purposes be considered as members of the Incumbent Board as of
February 27, 1998; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors (a "Proxy Contest") including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest;
(c) consummation by the Company of a reorganization, merger,
or consolidation or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets or stock of another entity (a
"Business Combination"), unless immediately following such Business Combination:
(i) more than 50% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries (the "Parent Corporation"),
is represented, directly or indirectly, by Company Voting Securities outstanding
immediately prior to such Business Combination (or, if applicable, is
represented by shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders
thereof is in substantially the same
<PAGE>
proportions as their ownership, immediately prior to such Business Combination,
of the Company Voting Securities; and (ii) at least a majority of the members of
the board of directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) were members of the Incumbent Board at
the time of the execution of the initial agreement, or the action of the Board,
providing for such Business Combination;
(d) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company; or
(e) acceptance by shareholders of the Company of shares in a
share exchange if the shareholders of the Company immediately before such share
exchange do not own, directly or indirectly, immediately following such share
exchange more than 50% of the combined voting power of the outstanding Voting
Securities of the corporation resulting from such share exchange in
substantially the same proportion as their ownership of the Voting Securities
outstanding immediately before such share exchange.
SECTION 10
Acquisitions
Notwithstanding any other provision of this Plan, Options may
be granted hereunder in substitution for options held by directors, key
employees, and associates of other corporations who are about to, or have,
become Key Employees or Associates of the Company or a Related Corporation as a
result of a merger, consolidation, acquisition of assets or similar transaction
by the Company or a Related Corporation. The terms, including the option price,
of the substitute options so granted may vary from the terms set forth in this
Plan to such extent as the Committee may deem appropriate to conform, in whole
or in part, to the provisions of the options in substitution for which they are
granted.
SECTION 11
Amendment or Replacement of Outstanding Options
The Committee shall have the authority to effect, at any time
and from time to time, with the consent of the affected Optionees, the
cancellation of any or all outstanding Options under the Plan and to grant in
substitution therefor new Options under the Plan covering the same or a
different number of shares of Common Stock but having a per share purchase price
not less than the greater of par value or 100% of the Fair Market Value of a
share of Common Stock on the new date of the grant. The Committee may permit the
voluntary surrender of all or a portion of any Option to be conditioned upon the
granting to the Optionee under the Plan of a new Option for the same or a
different number of shares of Common Stock as the Option surrendered, or may
require such voluntary surrender as a condition precedent to a grant of a new
Option to such Optionee. Any new Option shall be exercisable at the price,
during the period, and in accordance with any other terms and conditions
specified by the Committee at the time the new Option is granted, all determined
in accordance with the provisions of the Plan without regard to the price,
period of exercise, and any other terms or conditions of the Option surrendered.
SECTION 12
Amendment or Discontinuance of the Plan
The Board from time to time may suspend or discontinue the
Plan or, subject to such shareholder approval as may be then required under the
applicable rules and regulations of the Code, may amend it in any respect
whatsoever. Notwithstanding the foregoing, no such suspension, discontinuance or
amendment shall materially impair the rights of any holder of an outstanding
Option without the consent of such holder.
SECTION 13
Rights
Neither the adoption of the Plan nor any action of the Board
or the Committee shall be deemed to give any individual any right to be granted
an Option, or any other right hereunder, unless and until the Committee shall
have granted such individual an Option, and then his or her rights shall be only
such as are provided by the Option Agreement.
<PAGE>
Any Option under the Plan shall not entitle the holder thereof
to any rights as a stockholder of the Company prior to the exercise of such
Option and the issuance of the shares pursuant thereto. Further, notwithstanding
any provisions of the Plan or the Option Agreement with an Optionee, the Company
shall have the right, in its discretion, to retire an Optionee at any time
pursuant to its retirement rules or otherwise to terminate his or her employment
or service at any time for any reason whatsoever.
SECTION 14
Indemnification of Board and Committee
Without limiting any other rights of indemnification which
they may have from the Company and any Related Corporation (and any affiliate),
the members of the Board and the members of the Committee shall be indemnified
by the Company against all costs and expenses reasonably incurred by them in
connection with any claim, action, suit, or proceeding to which they or any of
them may be a party by reason of any action taken or failure to act under, or in
connection with, the Plan, or any Option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by legal counsel selected by the Company) or paid by them in satisfaction of a
judgment in any such action, suit, or proceeding, except a judgment based upon a
finding of willful misconduct or recklessness on their part. Upon the making or
institution of any such claim, action, suit, or proceeding, the Board or
Committee member shall notify the Company in writing, giving the Company an
opportunity, at its own expense, to handle and defend the same before such Board
or Committee member undertakes to handle it on his own behalf.
SECTION 15
Application of Funds
The proceeds received by the Company from the sale of Common
Stock pursuant to Options granted under the Plan shall be used for general
corporate purposes. Any cash received in payment for shares upon exercise of an
Option to purchase Common Stock shall be added to the general funds of the
Company and shall be used for its corporate purposes. Any Common Stock received
in payment for shares upon exercise of an Option to purchase Common Stock shall
become treasury stock.
SECTION 16
Shareholder Approval
This Plan shall become effective as of February 27, 1998 (the
date the Plan was adopted by the Board); provided, however, that if the Plan is
not approved by the Company's shareholders within 12 months before or after said
date, the Plan and all Options granted hereunder shall be null and void and no
additional options shall be granted hereunder.
SECTION 17
No Obligation to Exercise Option
The granting of an Option shall impose no obligation upon an
Optionee to exercise such Option.
SECTION 18
Termination of Plan
Unless earlier terminated as provided in the Plan, the Plan
and all authority granted hereunder shall terminate absolutely at 12:00 midnight
on February 26, 2008, which date is within ten years after the date the Plan was
adopted by the Board (or the date the Plan was approved by the shareholders of
the Company, whichever is earlier), and no Options hereunder shall be granted
thereafter. Nothing contained in this Section 18, however, shall terminate or
affect the continued existence of rights created under Options issued hereunder
and outstanding on February 26, 2008, which by their terms extend beyond such
date.
<PAGE>
SECTION 19
Governing Law
With respect to any ISOs granted pursuant to the Plan and the
Option Agreements thereunder, the Plan, such Option Agreements and any ISOs
granted pursuant thereto shall be governed by the applicable Code provisions to
the maximum extent possible. Otherwise, the laws of the state of Delaware shall
govern the operation of, and the rights of Optionees under, the Plan, the Option
Agreements and any Options granted thereunder.
<PAGE>
EXHIBIT 4.2
<PAGE>
INTEGRA LIFESCIENCES CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(Effective as of July 1, 1998)
<PAGE>
INTEGRA LIFESCIENCES CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(Effective as of July 1, 1998)
1. PURPOSE
This Employee Stock Purchase Plan (the "Plan") is intended to encourage
stock ownership by all eligible employees of Integra LifeSciences Corporation
(the "Company") and of certain of its "subsidiary corporations" (as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended (the "Code")) so
that they may acquire a, or increase their, proprietary interest in the success
of the Company. It is further intended that options issued pursuant to this Plan
shall constitute options issued pursuant to an "employee stock purchase plan,"
within the meaning of Section 423 of the Code. The Company's Board of Directors
(the "Board") may, from time to time, approve participation in the Plan by
employees of any subsidiary corporation of the Company and/or of any "parent
corporation" of the Company (as defined in Section 424(e) of the Code).
2. ADMINISTRATION
The Plan shall be administered by the Stock Option Committee (the
"Committee") of the Board. Acts approved by a majority of the Committee at which
a quorum is present, or acts without a meeting reduced to or approved in writing
by a majority of the members of the Committee, shall be the valid acts of the
Committee. Each member of the Committee, while serving as such, shall be deemed
to be acting in his or her capacity as a director of the Company.
The Committee shall have full and final authority, in its discretion
but subject to the express provisions of the Plan: (a) to interpret the Plan;
(b) to make, amend, and rescind rules and regulations relating to the Plan; (c)
to determine the terms and provisions of the instruments by which options shall
be evidenced; and (d) to make all other determinations necessary or advisable
for the administration of the Plan. No member of the Board or of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted hereunder. Any and all authority of the
Committee may be delegated by the Committee to a Plan Administrator.
3. ELIGIBILITY
(a) General Rule. Except as provided in paragraph (b) below
and subject to Section 9(e), each employee of the Company or a participating
subsidiary corporation shall be eligible for option grants described in Section
5.
(b) Exceptions. An employee will not be eligible to
participate in the Plan if he or she is customarily employed by the Company or a
participating subsidiary corporation for twenty (20) hours or fewer per week or
if he or she is customarily employed by the Company or a participating
subsidiary corporation for not more than five (5) months in any calendar year.
Further, an employee who is classified by the rules of the Committee as a
"temporary employee" and who has been employed for less than six months, will
not be eligible to participate in the Plan. In addition, in no event may an
employee be granted an option if such employee, immediately after the option is
granted would own stock possessing five (5) percent or more of the total
combined voting power or value of all classes of stock of the Company or of its
parent corporation (if any) or of a subsidiary corporation. For purposes of
determining stock ownership under this paragraph, the rules of Section 424(d) of
the Code (relating to attribution of stock ownership) shall apply, and stock
which the employee may purchase under outstanding options shall be treated as
stock owned by the employee.
<PAGE>
4. STOCK
The stock subject to the options shall be shares of the Company's
authorized but unissued or reacquired as Treasury shares $.01 par value common
stock ("Common Stock"). The aggregate number of shares of Common Stock which may
be issued under options shall not exceed one million (1,000,000); provided that
such number shall be adjusted if required by Section 9(h).
5. GRANT OF OPTION
(a) Grant of Option. Employees shall have the right to
purchase shares of Common Stock through payroll deductions under options granted
as of July 1, 1998 (or, in the Committee's discretion, as soon as
administratively practicable thereafter) and as of the first business day of
each subsequent January (the "Grant Dates"). Each employee who meets the
eligibility requirements of Section 3 shall be granted an option on the first
Grant Date coinciding with or immediately following the date he or she becomes
an eligible employee, and on each succeeding Grant Date, provided he or she
continues to meet the eligibility requirements of Section 3. The term of the
first option term shall be six (6) calendar months (or, in the Committee's
discretion may be fewer than six (6) calendar months); the terms of the second
and succeeding options shall be twelve (12) calendar months (from January 1 to
December 31).
If an individual becomes an eligible employee after the
commencement and before October 1 of an Option Term, he or she shall be granted
an option as of the first business day of the first calendar quarter (i.e., the
first business day occurring on or after April 1, July 1, or October 1)
(collectively, the "Delayed Grant Dates") coinciding with or immediately
following his or her eligibility date, provided he or she continues to meet the
eligibility requirements of Section 3.
(b) Limit on Number of Shares Purchasable Under Option. In no
event may the number of full shares purchased by an employee under an option
granted pursuant to paragraph (a) above exceed 8,000 for an Option Term;
provided that such number shall be adjusted if required by Section 9(h). The
share limit in the preceding sentence shall be prorated in the case of an
employee who is granted an option on a Delayed Grant Date. Further, the
aggregate number of full shares of Common Stock purchasable under an option for
an Option Term shall be subject to the limitations described in Section 9(e) and
Section 9(k).
6. PARTICIPATION
(a) Payroll Deductions. Subject to rules established by the
Committee from time to time, an eligible employee may elect to participate in
the Plan by making payroll deductions (as a whole percentage of the employee's
basic rate of compensation each pay, subject to the limits set forth in
paragraph (b) below) for each Option Term in which the employee is eligible to
participate. For purposes of this Plan, "basic rate of compensation" shall mean
an employee's basic hourly rate or salary from the Company and its participating
subsidiary corporations, excluding any commissions, bonuses, overtime, or other
extra or incentive pay.
(b) Maximum Payroll Deduction. The maximum total payroll
deductions for any employee for an Option Term may not exceed fifteen (15)
percent of the employee's basic rate of compensation (as defined in paragraph
(a) above) for the Option Term (or, if the employee has a Delayed Grant Date,
for the portion of the Option Term during which the employee is eligible to
participate).
(c) No Interest on Payroll Deductions. Payroll deductions made
under the Plan will be held as general assets of the Company or a participating
subsidiary, and will not be credited with any interest.
(d) Participation after Surrender or Cessation of Payroll
Deductions. Each employee who has satisfied the eligibility requirements of
Section 3 but who has elected to surrender his or her option or to cease payroll
deductions in accordance with Section 8 (or, as described in paragraph (f)
below, is deemed to have surrendered his or her option) for an Option Term,
shall be granted an option in accordance with Section 5 in subsequent Option
Terms,
<PAGE>
provided the employee continues to meet the eligibility requirements of
Section 3. However, such employee must submit a new payroll deduction agreement
under paragraph (a) above in order to begin payroll deductions for a subsequent
Option Term.
(e) No Contract to Purchase. Electing to make payroll
deductions for any Option Term will not constitute a contract to purchase any of
the Common Stock purchasable under an option.
(f) Waiver of Rights. An employee who fails to elect to
participate in the Plan for an Option Term in the manner and within the time
provided under paragraph (a) above shall be deemed to have surrendered the
option granted to the employee for such Option Term and shall have no further
rights under the Plan with respect to such surrendered option.
7. EXERCISE OF OPTION
(a) Method of Exercise. Unless the employee has surrendered
his or her option and withdrawn his or her payroll deductions in accordance with
Section 8(a) (or is deemed to have surrendered his or her option under Section
6(f)), as of the last business day of each Option Term (the "Exercise Date"),
the employee will be credited for such number of full shares of Common Stock as
his or her accumulated payroll deductions shall be sufficient to pay for in
full, subject to the limitations of Section 5(b).
(b) Return of Excess Payroll Deductions. Any payroll
deductions remaining after the employee exercises an option for an Option Term
shall be refunded to the employee.
8. EMPLOYEE'S RIGHT TO SURRENDER OPTION AND/OR CEASE PAYROLL DEDUCTIONS
(a) Surrender of Option and Withdrawal of Payroll Deductions.
An employee may elect to surrender his or her option for any Option Term and
withdraw any payroll deductions already made for the Option Term under the Plan
by giving written notice to the Company. However, in order for such surrender to
be effective for the Option Term, the employee's written notice must be received
by the Company on or before the sixtieth (60th) calendar day prior to the end of
the Option Term. All of such employee's payroll deductions will be refunded to
him or her as soon as practicable after the Company receives the employee's
notice of withdrawal, and no further payroll deductions will be made from the
employee's pay until the employee completes a new payroll deduction agreement in
accordance with Section 6(a) for a subsequent Option Term. As to any option so
surrendered, the employee shall have no further right of any nature at any
subsequent time.
(b) Cessation of Payroll Deductions. Without withdrawing any
payroll deductions already made for the Option Term, an employee may elect to
terminate his or her participation in part during an Option Term by ceasing
payroll deductions for the remainder of the Option Term. However, in order for
such election to be effective for the Option Term, the employee must give the
Company written notice of such election in accordance with procedures prescribed
by the Committee. An employee who elects to cease payroll deductions for an
Option Term shall not be eligible to resume payroll deductions during such
Option Term.
(c) No Effect on Later Participation. An employee's surrender
of an option and/or cessation of payroll deductions for an Option Term will not
have any effect upon his or her eligibility to participate in the Plan for
subsequent Option Terms.
(d) Surrender Upon Termination of Employment. Upon termination
of the employee's employment during an Option Term for any reason, including
retirement, payroll deductions made by the employee for such Option Term will be
refunded to the employee, or, in the case of death, to the person or persons
entitled thereto under Section 9(g).
<PAGE>
9. TERMS AND CONDITIONS OF OPTIONS
Stock options granted pursuant to the Plan shall be evidenced by
agreements in such form as the Committee shall prescribe, provided that all
employees granted such agreements shall have the same rights and privileges
(except as otherwise required under the Plan), and provided further that such
agreements shall comply with and be subject to the terms and conditions set
forth below.
(a) Number of Shares. Each option shall state the maximum
number of shares to which it pertains.
(b) Option Price. The per share exercise price of an option
shall be the lesser of (i) 85% of the per share fair market value of the Common
Stock as of the Grant Date (or the employee's Delayed Grant Date) for the Option
Term, or (ii) 85% of the per share fair market value of the Common Stock as of
the Exercise Date for the Option Term. In making such determination, during such
time as the Common Stock is listed upon an established stock exchange or
exchanges, the per share "fair market value" shall be deemed to be the quoted
closing price on the last business day before the Grant Date, Delayed Grant
Date, or Exercise Date, whichever is applicable. During such time as the Common
Stock is not listed upon an established stock exchange, the per share fair
market value shall be determined by the Committee by a method sanctioned by the
Code, or rules and regulations thereunder. The fair market value per share is to
be determined in accordance with Treas. Reg. Section Section 1.421-7(e) and
20.2031-2. Subject to the foregoing, the Committee in fixing the exercise price
shall have full authority and be fully protected in doing so.
(c) Medium and Time of Payment. The exercise price of an
option shall be payable in United States dollars upon the exercise of the option
and shall be payable only by accumulated payroll deductions made in accordance
with Section 6.
(d) Term of Option. No option may be exercised after the end
of the Option Term in which the option was granted.
(e) Accrual Limitation. No option shall permit the rights of
an employee to purchase stock under all employee stock purchase plans, intended
to qualify under Section 423 of the Code, of the Company and its parent
corporation (if any) and subsidiary corporations to accrue at a rate which
exceeds $25,000 in fair market value of such stock (determined at the time
options are granted) for each calendar year in which the option is outstanding
at any time. For purposes of this paragraph (e) -- (i) the right to purchase
Common Stock under an option accrues when the option (or any portion thereof)
first becomes exercisable during the calendar year; (ii) the right to purchase
Common Stock under an option accrues at the rate provided in the option but in
no case may such rate exceed $25,000 of fair market value of such Common Stock
(determined on the Grant Date of such option) for any one calendar year; and
(iii) a right to purchase Common Stock which has accrued under one option
granted pursuant to the Plan may not be carried over to any other option.
(f) Termination of Employment. In the event that an employee
ceases to be employed by the Company and its participating subsidiary
corporations for any reason during the employee's participation in an Option
Term, such individual shall be deemed to have surrendered his or her option for
such Option Term and his or her accumulated payroll deductions shall be refunded
in accordance with Section 8(d).
Whether an authorized leave of absence for military or
governmental service shall constitute termination of employment for the purposes
of the Plan shall be determined by the Committee in accordance with applicable
law, which determination, unless modified by the Board (in accordance with
applicable law), shall be final and conclusive.
(g) Nontransferability. Neither payroll deductions made by an
employee, nor any rights with regard to the exercise of an option or to receive
stock, nor any rights to a return of payroll deductions under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way by the
employee. Any such attempted assignment, transfer, pledge or other disposition
shall be without effect. Notwithstanding the foregoing, any rights to a return
of payroll deductions under the Plan after surrender of an option due to an
employee's death,
<PAGE>
as described in Section 8(d), may be transferred by will or
the laws of descent and distribution. An option may be exercised only by the
employee.
(h) Recapitalization. Subject to any required action by the
stockholders, the share limits of Section 4 and Section 5(b) and the number of
shares of Common Stock covered by each outstanding option, and the price per
share in each such option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company resulting
from a subdivision (stock-split) or consolidation (reverse-split) of shares or
the payment of a stock dividend (but only on the Common Stock) or any other
increase or decrease in the number of such shares affected, without receipt of
consideration by the Company.
Subject to any required action by the stockholders, if the
Company shall be the surviving corporation in any merger or consolidation, each
outstanding option shall pertain and apply to the securities to which a holder
of the number of shares of Common Stock subject to the option would have been
entitled. A dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving corporation, shall cause
each outstanding option to terminate, provided that each employee granted an
option under this Plan shall, in such event, have the right immediately prior to
such dissolution or liquidation, or merger or consolidation in which the Company
is not the surviving corporation, to exercise his or her option.
In the event of a change in the Common Stock of the Company as
presently constituted which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be Common Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock
or securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive
provided that each option granted pursuant to this Plan shall not be adjusted in
a manner that causes the option to fail to continue to qualify as an option
issued pursuant to an "employee stock purchase plan" within the meaning of
Section 423 of the Code.
Except as expressly provided in this paragraph (h), an
employee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend, any other
increase or decrease in the number of shares of stock of any class, or any
dissolution, liquidation, merger, or consolidation or spin-off of assets or
stock of another corporation; and any issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to the option.
The grant of an option pursuant to the Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassification, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.
(i) Rights as a Stockholder. An employee shall have no rights
as a stockholder with respect to any shares of Common Stock covered by his or
her option until the date the option is exercised in accordance with the terms
of the Plan. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in paragraph (h) above.
(j) Investment Purpose. Each option under the Plan shall be
granted on the condition that the purchases of Common Stock thereunder shall be
for investment purposes and not with a view to resale or distribution, except
that in the event the Common Stock subject to such option is registered under
the Securities Act of 1933, as amended (the "Securities Act"), or in the event a
resale of such stock without such registration would otherwise be permissible,
such condition shall be inoperative if in the opinion of counsel for the Company
such condition is not required under the Securities Act or any other applicable
law, regulation or rule of any governmental agency.
(k) Adjustment in Number of Shares Exercisable. If the
aggregate number of shares
<PAGE>
purchased under options granted under the Planexceeds the aggregate
number of shares of Common Stock specified in Section 4, the Company
shall make a pro rata allocation of the shares available for distribution
so that the limit of Section 4 is not exceeded, and the balance of
payroll deductions made by each participating employee shall be returned
to him or her as promptly as possible.
(l) Other Provisions. The option agreements authorized under
the Plan shall contain such other provisions as the Committee shall deem
advisable, provided that no such provision may in any way be in conflict with
the terms of the Plan.
10. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any option granted thereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such Committee member is liable for negligence or
misconduct in the performance of his or her duties; provided that within sixty
(60) days after institution of any such action, suit or proceeding a Committee
member shall in writing offer the Company the opportunity, at its own expense,
to handle and defend the same.
11. AMENDMENT OF PLAN
The Committee may, to the extent permitted by law, from time to time,
with respect to any shares of Common Stock not subject to options at the time,
suspend, discontinue, revise or amend the Plan in any respect whatsoever except
that no such revision or amendment may permit granting of options under this
Plan to persons other than employees of the Company, its parent corporation (if
any) or a subsidiary corporation, or otherwise cause options issued under it to
fail to meet the requirements of Section 423 of the Code. Furthermore, the Plan
may not, without the approval of a majority of the votes cast at a duly held
stockholders' meeting at which a quorum representing a majority of all
outstanding voting stock is, either in person or by proxy, present and voting on
the Plan, be amended in any manner that will change the number of shares subject
to the Plan.
12. EFFECTIVE DATE OF PLAN
The Plan will become effective as of July 1, 1998, or as soon as
administratively practicable thereafter, subject, however, to approval by the
holders of at least a majority of the Common Stock present or represented, and
entitled to vote, at a special or annual meeting of the stockholders at which a
quorum is present held within twelve (12) months before or after February 27,
1998 (the date the Plan was approved by the Board). If the Plan is not so
approved, the Plan shall not become effective.
13. ABSENCE OF RIGHTS
The granting of an option to a person shall not entitle that person to
continued employment by the Company or a participating subsidiary corporation or
affect the terms and conditions of such employment. The Company or any
subsidiary corporation shall have the absolute right, in its discretion, to
terminate an employee's employment, whether or not such termination may result
in a partial or total termination of his or her option under this Plan.
<PAGE>
14. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock
pursuant to options will be used for general corporate purposes.
15. MISCELLANEOUS
(a) Provisions of Plan Binding. The provisions of the Plan
shall, in accordance with its terms, be binding upon, and inure to the benefit
of, all successors of each employee participating in the Plan, including,
without limitation, such employee's estate and the executors, administrator or
trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or
representative of creditors of such employee.
(b) Applicable Law. Delaware law shall govern all matters
relating to this Plan except to the extent it is superseded by federal law.
<PAGE>
EXHIBIT 5
<PAGE>
Drinker Biddle & Reath LLP
105 College Road East
P.O. Box 627
Princeton, NJ 08542-0627
Telephone: (609) 716-6500
Fax: (609) 799-7000
June 30, 1998
Integra LifeSciences Corporation
105 Morgan Lane
Plainsboro, NJ 08536
Gentlemen:
We have acted as counsel to Integra LifeSciences Corporation
(the "Company") in connection with the preparation and filing with the
Securities and Exchange Commission of the Company's Registration Statement on
Form S-8 under the Securities Act of 1933, as amended (the "Registration
Statement"), relating to 1,000,000 shares of Common Stock of the Company, par
value $.01 per share (the "Option Shares"), issuable upon the exercise of
options under the Company's 1998 Stock Option Plan (the "1998 Plan") and
relating to 500,000 shares of Common Stock (the "Employee Shares" and, together
with the Option Shares, the "Shares") issuable under the Company's Employee
Stock Purchase Plan (the "Employee Plan"). The 1998 Plan and the Employee Plan
are hereinafter referred to as the "Plans."
In that capacity, we have examined the originals or copies,
certified or otherwise identified to our satisfaction, of the Certificate of
Incorporation and the By-laws of the Company, each as amended through the
effective date of the Registration Statement, resolutions of the Company's Board
of Directors, and such other documents and corporate records relating to the
Company and the issuance and sale of the Shares as we have deemed appropriate.
This opinion is based exclusively on the General Corporation Law of the State of
Delaware.
In all cases, we have assumed the legal capacity of each
natural person signing any of the documents and corporate records examined by
us, the genuineness of signatures, the authenticity of documents submitted to us
as originals, the conformity to authentic original documents of documents
submitted to us as copies and the accuracy and completeness of all corporate
records and other information made available to us by the Company.
Based upon the foregoing and in consideration of such
questions of law as we have deemed relevant, we are of the opinion that the
issuance of the Shares by the Company upon the exercise of stock options
properly granted under either of the Plans has been duly authorized by the
necessary corporate action of the Board of Directors and stockholders of the
Company, and such Shares, upon exercise of such options and payment therefor in
accordance with the terms of the Plan under which such options were granted,
will be validly issued, fully paid and nonassessable by the Company.
We consent to the use of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we come
within the categories of persons whose consent is required under Section 7 of
the Securities Act.
We advise that William M. Goldstein, Esq., a partner in our
firm, is the Secretary of the Company and was a director of the Company until
May 18, 1998. Mr. Goldstein currently owns 18,250 shares of the Company's Common
Stock.
Very truly yours,
/s/ DRINKER BIDDLE & REATH LLP
DRINKER BIDDLE & REATH LLP
<PAGE>
EXHIBIT 23.1
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement of Integra LifeSciences Corporation on Form S-8, relating to the 1998
Stock Option Plan and Employee Stock Purchase Plan, of our report dated February
27, 1998, except for the second paragraph of Note 19 for which the date is March
12, 1998, on our audits of the consolidated financial statements of Integra
LifeSciences Corporation and Subsidiaries as of December 31, 1997 and 1996 and
for each of the three years in the period ended December 31, 1997, which report
is included in the Corporation's 1997 Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
Princeton, New Jersey
June 30, 1998
