<PAGE> 1
As filed with the Securities and Exchange Commission on December 4, 1996
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Fusion Systems Corporation
(Exact name of issuer as specified in its charter)
<TABLE>
<S> <C>
Delaware 52-0915080
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
7600 Standish Place, Rockville, Maryland 20855
(Address of Principal Executive Offices) (Zip Code)
--------------------------
Fusion Systems Corporation 1994 Stock Option Plan
(Full title of the plan)
--------------------------
Leslie S. Levine
President, Chief Executive Officer and Director
Fusion Systems Corporation
7600 Standish Place
Rockville, MD 20855
(301) 251-0300
(Name and address including zip code and telephone number,
including area code, of agent for service)
--------------------------
Copy to:
Gordon H. Hayes, Jr., Esq.
Testa, Hurwitz & Thibeault
High Street Tower
125 High Street
Boston, Massachusetts 02110
(617) 248-7000
--------------------------
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price Per Offering Registration
be Registered Registered(1) Share(1) Price Fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FUSION SYSTEMS
CORPORATION
1994 STOCK OPTION PLAN
Common Stock 4,670 $19.50(2) $91,065.00 $27.60
(Par Value $.01) 595,330 $18.75(3) $11,162,437.50 $3,382.56
TOTAL: 600,000 shares $11,253,502.50 $3,410.16
================================================================================================================
</TABLE>
(1) Subject to adjustment in accordance with certain anti-dilution and
other provisions of the Fusion System Corporation 1994 Stock Option Plan.
Accordingly, pursuant to Rule 416 under the Securities Act of 1933, as amended,
this Registration Statement covers, in addition to the number of shares stated
above, an indeterminable number of shares which may be issuable after the
operation of any such anti-dilution and other provisions.
(2) All such shares are issuable upon exercise of outstanding options
with fixed exercise prices. Pursuant to Regulation C, Rule 457(h)(1) under the
Securities Act of 1933, as amended, the aggregate offering price and the fee
have been computed upon the basis of the price at which the options may be
exercised.
(3) The price of $18.75 per share, which is the average of the high and
low prices reported on the Nasdaq National Market on November 29, 1996, is set
forth solely for purposes of calculating the filing fee pursuant to Rule 457(c)
and has been used only for those shares without a fixed price.
================================================================================
Page 2 of 16
<PAGE> 3
This Registration Statement registers additional securities of the same
class as other securities for which the Registration Statements No. 33-80116
and No. 33-80329 on Form S-8, as filed with the Securities and Exchange
Commission on June 10, 1994 and December 12, 1995, respectively, relating to
Fusion Systems Corporation 1994 Stock Option Plan, are effective. Pursuant to
General Instruction E, the contents of the above-listed Registration statements
are hereby incorporated by reference.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated by reference in this Registration
Statement:
(a) Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995 filed pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 29, 1996 filed pursuant to the
Exchange Act.
(c) Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 28, 1996 filed pursuant to the
Exchange Act.
(d) Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 27, 1996 filed pursuant to the
Exchange Act.
(e) Registrant's Proxy Statement for its Annual Meeting of
Stockholders held on June 20, 1996.
(f) All other documents filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the
fiscal year covered by the annual report referred to in
(a) above; and
(g) Item 1, "Description of Registrant's Securities to be
Registered", contained in Registrant's Registration
Statement on Form 8-A filed pursuant to Section 12(g)
of the Exchange Act on May 11, 1994.
All documents subsequently filed with the Commission by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered herein have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
4 Fusion Systems Corporation 1994 Stock Option Plan, as amended.
5 Opinion of Testa, Hurwitz & Thibeault, LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5).
</TABLE>
Page 3 of 16
<PAGE> 4
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 Rockville, State of Maryland, on this 4th day
of December, 1996.
Fusion Systems Corporation
By:/s/ Leslie S. Levine
---------------------------------------
Leslie S. Levine
President, Chief Executive Officer and
Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
/s/ Leslie S. Levine President, Chief Executive December 4, 1996
- ---------------------------- Officer and Director
Leslie S. Levine (Principal Executive Officer)
/s/ Joseph F. Greeves Vice President and December 4, 1996
- ---------------------------- Chief Financial Officer,
Joseph F. Greeves Treasurer and Secretary
(Principal Financial and
Accounting Officer)
/s/ Daniel Tessler Chairman of the Board December 4, 1996
- ---------------------------- of Directors
Daniel Tessler
/s/ Charles J. Coulter Director December 4, 1996
- ----------------------------
Charles J. Coulter
Director
- ----------------------------
Andrea Geisser
/s/ Jon D. Tompkins Director December 4, 1996
- ----------------------------
Jon D. Tompkins
</TABLE>
Page 4 of 16
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description of Exhibit Sequentially Numbered Page
------- ---------------------- --------------------------
<S> <C> <C>
4 Fusion Systems Corporation 6
1994 Stock Option Plan, as amended.
5 Opinion of Testa, Hurwitz & 15
Thibeault, LLP.
23.1 Consent of Arthur Andersen LLP. 16
23.2 Consent of Testa, Hurwitz &
Thibeault, LLP (contained in its
opinion as Exhibit 5).
</TABLE>
Page 5 of 16
<PAGE> 1
EXHIBIT 4
FUSION SYSTEMS CORPORATION
1994 STOCK OPTION PLAN
1. PURPOSE. This 1994 Stock Option Plan (the "Plan") is intended to
provide incentives: (a) to the officers and other employees of Fusion Systems
Corporation (the "Company"), and of any present or future parent or subsidiary
of the Company (collectively, "Related Corporations"), by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which qualify as "incentive stock options" ("ISOs") under Section
422(b) of the Internal Revenue Code of 1986, as amended (the "Code"); and (b)
to directors, officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Options"). Both ISOs and Non-Qualified Options are referred to
hereafter individually as an "Option" and collectively as "Options." As used
herein, the terms "parent" and "subsidiary" mean "parent corporation" and
"subsidiary corporation," respectively, as those terms are defined in Section
424 of the Code.
2. ADMINISTRATION OF THE PLAN.
A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be
administered by the Board of Directors of the Company (the "Board") or by
a committee appointed by the Board (the "Committee"); provided that, to
the extent required by applicable regulations under Section 162(m) of the
Code, the Plan is established and administered by two or more outside
directors as defined in Proposed Treasury Regulation Section 1.162-27
and, to the extent required by Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 or any successor provision ("Rule
16b-3"), the Plan is administered by disinterested administrators.
Hereinafter, all references in this Plan to the "Committee" shall mean
the Board if no Committee has been appointed. Subject to ratification of
the grant or authorization of each Option by the Board (if so required by
applicable state law), and subject to the terms of the Plan, the
Committee shall have the authority to (i) determine the employees of the
Company and Related Corporations (from among the class of employees
eligible under paragraph 3 to receive ISOs) to whom ISOs shall be
granted, and determine (from among the class of individuals and entities
eligible under paragraph 3 to receive Non-Qualified Options) to whom
Non-Qualified Options may be granted; (ii) determine the time or times at
which Options shall be granted; (iii) determine the option price of
shares subject to each Option, which price shall not be less than the
minimum price specified in paragraph 6; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option; (v) determine
(subject to paragraph 7) the time or times when each Option shall become
exercisable and the duration of the exercise period; (vi) determine
whether restrictions such as repurchase options are to be imposed on
shares subject to Options and the nature of such restrictions, if any,
and (vii) interpret the Plan and prescribe and rescind rules and
regulations relating to it. If the Committee determines to issue a
Non-Qualified Option, it shall take whatever actions it deems necessary,
under Section 422 of the Code and
Page 6 of 16
<PAGE> 2
the regulations promulgated thereunder, to ensure that such Option is not
treated as an ISO. The interpretation and construction by the Committee
of any provisions of the Plan or of any Option granted under it shall be
final unless otherwise determined by the Board. The Committee may from
time to time adopt such rules and regulations for carrying out the Plan
as it may deem best. 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.
B. COMMITTEE ACTIONS. The Committee may select one of its
members as its chairman, and shall hold meetings at such time and places
as it may determine. Acts by a majority of the members of the Committee,
or acts reduced to or approved in writing by a majority of the members of
the Committee (if consistent with applicable state law), shall constitute
the valid acts of the Committee. From time to time the Board may
increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies however caused, or remove all
members of the Committee and thereafter directly administer the Plan.
C. GRANT OF OPTIONS TO BOARD MEMBERS. Options may be granted
to members of the Board consistent with the provisions of the first
sentence of paragraph 2(A) above, if applicable. All grants of Options
to members of the Board shall in all other respects be made in accordance
with the provisions of this Plan applicable to other eligible persons.
Consistent with the provisions of the first sentence of paragraph 2(A)
above, members of the Board who either (i) are eligible to receive grants
of Options pursuant to the Plan or (ii) have been granted Options may
vote on any matters affecting the administration of the Plan or the grant
of any Options pursuant to the Plan, except that no such member shall act
upon the granting to himself of Options, but any such member may be
counted in determining the existence of a quorum at any meeting of the
Board during which action is taken with respect to the granting to him of
Options.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to
employees of the Company or any Related Corporation. Non-Qualified Options may
be granted to any employee, officer or director (whether or not also an
employee) or consultant of the Company or any Related Corporation. The
Committee may take into consideration a recipient's individual circumstances in
determining whether to grant an ISO or a Non-Qualified Option. The granting of
any Option to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of
Options.
4. STOCK. The stock subject to Options shall be authorized but
unissued shares of Common Stock of the Company, par value $.01 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued pursuant to the
Plan is 1,250,000, subject to adjustment as provided in paragraph 13. If any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable
in whole or in part, the unpurchased shares subject to such Option shall again
be available for grants of Options under the Plan. No employee of the Company
or any Related Corporation may be
Page 7 of 16
<PAGE> 3
granted Options to acquire, in the aggregate, more than 1,249,999 of shares of
Common Stock under the Plan. If any Option granted under the Plan shall expire
or terminate for any reason without having been exercised in full or shall
cease for any reason to be exercisable in whole or in part, the unpurchased
shares subject to such Option shall be included in the determination of the
aggregate number of shares of Common Stock deemed to have been granted to such
employee under the Plan.
5. GRANTING OF OPTIONS. Options may be granted under the Plan at any
time after February 11, 1994 and prior to February 11, 2004. The date of grant
of an Option under the Plan will be the date specified by the Committee at the
time it grants the Option; provided, however, that such date shall not be prior
to the date on which the Committee acts to approve the grant. Options granted
under the Plan are intended to qualify as performance-based compensation under
Proposed Treasury Regulation Section 1.162-27.
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
A. PRICE FOR NON-QUALIFIED OPTIONS. The exercise price per
share specified in the agreement relating to each Non-Qualified Option
granted under the Plan shall in no event be less than the minimum legal
consideration required therefor under the laws of Delaware or the laws of
any jurisdiction in which the Company or its successors in interest may
be organized.
B. PRICE FOR ISOS. The exercise price per share specified in
the agreement relating to each ISO granted under the Plan shall not be
less than the fair market value per share of Common Stock on the date of
such grant. In the case of an ISO to be granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Related Corporation,
the price per share specified in the agreement relating to such ISO shall
not be less than one hundred ten percent (110%) of the fair market value
per share of Common Stock on the date of grant. For purposes of
determining stock ownership under this paragraph, the rules of Section
424(d) of the Code shall apply.
C. $100,000 ANNUAL LIMITATION ON ISO VESTING. Each eligible
employee may be granted Options treated as ISOs only to the extent that,
in the aggregate under this Plan and all incentive stock option plans of
the Company and any Related Corporation, ISOs do not become exercisable
for the first time by such employee during any calendar year with respect
to stock having a fair market value (determined at the time the ISOs were
granted) in excess of $100,000. The Company intends to designate any
Options granted in excess of such limitation as Non-Qualified Options.
D. DETERMINATION OF FAIR MARKET VALUE. If, at the time an
Option is granted under the Plan, the Company's Common Stock is publicly
traded, "fair market value" shall be determined as of the last business
day for which the prices or quotes discussed in this sentence are
available prior to the date such Option is granted and shall mean (i) the
average (on that date) of the high and low prices of the Common Stock on
the principal national
Page 8 of 16
<PAGE> 4
securities exchange on which the Common Stock is traded, if the Common
Stock is then traded on a national securities exchange; or (ii) the last
reported sale price (on that date) of the Common Stock on the Nasdaq
National Market List, if the Common Stock is not then traded on a
national securities exchange; or (iii) the closing bid price (or average
of bid prices) last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Common Stock is not
reported on the Nasdaq National Market List. However, if the Common
Stock is not publicly traded at the time an Option is granted under the
Plan, "fair market value" shall be deemed to be the fair value of the
Common Stock as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10 hereof or in the agreement relating to such Option, each
Option shall expire on the date specified by the Committee, but not more than
(i) ten years from the date of grant in the case of Options generally and (ii)
five years from the date of grant in the case of ISOs granted to an employee
owning stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Related Corporation,
as determined under paragraph 6(B). Subject to earlier termination as provided
in paragraphs 9 and 10, the term of each ISO shall be the term set forth in the
original instrument granting such ISO, except with respect to any part of such
ISO that is converted into a Non-Qualified Option pursuant to paragraph 16.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9
through 12, each Option granted under the Plan shall be exercisable as follows:
A. VESTING. The Option shall either be fully exercisable on
the date of grant or shall become exercisable thereafter in such
installments as the Committee may specify.
B. FULL VESTING OF INSTALLMENTS. Once an installment becomes
exercisable it shall remain exercisable until expiration or termination
of the Option, unless otherwise specified by the Committee.
C. PARTIAL EXERCISE. Each Option or installment may be
exercised at any time or from time to time, in whole or in part, for up
to the total number of shares with respect to which it is then
exercisable.
D. ACCELERATION OF VESTING. The Committee shall have the
right to accelerate the date on which any installment of any Option
becomes exercisable; provided that the Committee shall not, without the
consent of an optionee, accelerate the permitted exercise date of any
installment of any Option granted to any employee as an ISO (and not
previously converted into a Non-Qualified Option pursuant to paragraph
16) if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in paragraph 6(C).
Page 9 of 16
<PAGE> 5
9. TERMINATION OF EMPLOYMENT. Unless otherwise specified in the
agreement relating to such ISO, if an ISO optionee ceases to be employed by the
Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his ISOs
shall become exercisable, and his ISOs shall terminate after the passage of
three months from the date of termination of his employment, but in no event
later than on their specified expiration dates, except to the extent that such
ISOs (or unexercised installments thereof) have been converted into
Non-Qualified Options pursuant to paragraph 16. For purposes of this paragraph
9, employment shall be considered as continuing uninterrupted during any bona
fide leave of absence (such as those attributable to illness, military
obligations or governmental service) provided that the period of such leave
does not exceed 90 days or, if longer, any period during which such optionee's
right to reemployment is guaranteed by statute. A bona fide leave of absence
with the written approval of the Committee shall not be considered an
interruption of employment under this paragraph 9, provided that such written
approval contractually obligates the Company or any Related Corporation to
continue the employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any optionee the right to be retained in
employment or other service by the Company or any Related Corporation for any
period of time.
10. DEATH; DISABILITY.
A. DEATH. If an ISO optionee ceases to be employed by the
Company and all Related Corporations by reason of his death, any ISO of
his may be exercised, to the extent of the number of shares with respect
to which he could have exercised it on the date of his death, by his
estate, personal representative or beneficiary who has acquired the ISO
by will or by the laws of descent and distribution, at any time prior to
the earlier of the specified expiration date of the ISO or 180 days from
the date of the optionee's death.
B. DISABILITY. If an ISO optionee ceases to be employed by
the Company and all Related Corporations by reason of his disability, he
shall have the right to exercise any ISO held by him on the date of
termination of employment, to the extent of the number of shares with
respect to which he could have exercised it on that date, at any time
prior to the earlier of the specified expiration date of the ISO or 180
days from the date of the termination of the optionee's employment. For
the purposes of the Plan, the term "disability" shall mean "permanent and
total disability" as defined in Section 22(e)(3) of the Code or any
successor statute.
11. ASSIGNABILITY. No Option shall be assignable or transferable by
the optionee except by will, by the laws of descent and distribution or, in the
case of Non-Qualified Options only, pursuant to a valid domestic relations
order. Except as set forth in the preceding sentence, during the lifetime of
an optionee each Option shall be exercisable only by such optionee.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve.
Page 10 of 16
<PAGE> 6
Such instruments shall conform to the terms and conditions set forth in
paragraphs 6 through 11 hereof and may contain such other provisions as the
Committee deems advisable which are not inconsistent with the Plan, including
restrictions applicable to shares of Common Stock issuable upon exercise of
Options. The Committee may specify that any Non-Qualified Option shall be
subject to the restrictions set forth herein with respect to ISOs, or to such
other termination and cancellation provisions as the Committee may determine.
The Committee may from time to time confer authority and responsibility on one
or more of its own members and/or one or more officers of the Company to
execute and deliver such instruments. The proper officers of the Company are
authorized and directed to take any and all action necessary or advisable from
time to time to carry out the terms of such instruments.
13. ADJUSTMENTS. Upon the occurrence of any of the following events,
an optionee's rights with respect to Options granted to him hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such Option:
A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common
Stock shall be subdivided or combined into a greater or smaller number of
shares or if the Company shall issue any shares of Common Stock as a
stock dividend on its outstanding Common Stock, the number of shares of
Common Stock deliverable upon the exercise of Options shall be
appropriately increased or decreased proportionately, and appropriate
adjustments shall be made in the purchase price per share to reflect such
subdivision, combination or stock dividend.
B. CONSOLIDATIONS OR MERGERS. If the Company is to be
consolidated with or acquired by another entity in a merger, sale of all
or substantially all of the Company's assets or otherwise (an
"Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor
Board"), shall, as to outstanding Options, either (i) make appropriate
provision for the continuation of such Options by substituting on an
equitable basis for the shares then subject to such Options either (a)
the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition or (b) shares of stock of
the surviving corporation; or (ii) upon written notice to the optionees,
provide that all Options must be exercised, to the extent then
exercisable, within a specified number of days of the date of such
notice, at the end of which period the Options shall terminate; or (iii)
terminate all Options in exchange for a cash payment equal to the excess
of the fair market value of the shares subject to such Options (to the
extent then exercisable) over the exercise price thereof.
C. RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a
transaction described in subparagraph B above) pursuant to which
securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an optionee upon
exercising an Option shall be entitled to receive for the purchase price
paid upon such exercise the securities he would have received if he had
exercised his Option prior to such recapitalization or reorganization.
Page 11 of 16
<PAGE> 7
D. MODIFICATION OF ISOS. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs A, B or C with respect to ISOs
shall be made only after the Committee, after consulting with counsel for
the Company, determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424 of
the Code) or would cause any adverse tax consequences for the holders of
such ISOs. If the Committee determines that such adjustments made with
respect to ISOs would constitute a modification of such ISOs or would
cause adverse tax consequences to the holders, it may refrain from making
such adjustments.
E. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such
other time and subject to such other conditions as shall be determined by
the Committee.
F. ISSUANCES OF SECURITIES. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to Options. No adjustments shall be
made for dividends paid in cash or in property other than securities of
the Company.
G. FRACTIONAL SHARES. No fractional shares shall be issued
under the Plan and the optionee shall receive from the Company cash in
lieu of such fractional shares.
H. ADJUSTMENTS. Upon the happening of any of the events
described in subparagraphs A, B or C above, the class and aggregate
number of shares set forth in paragraph 4 hereof that are subject to
Options which previously have been or subsequently may be granted under
the Plan shall also be appropriately adjusted to reflect the events
described in such subparagraphs. The Committee or the Successor Board
shall determine the specific adjustments to be made under this paragraph
13 and, subject to paragraph 2, its determination shall be conclusive.
14. MEANS OF EXERCISING OPTIONS. An Option (or any part or
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Option being
exercised and specify the number of shares as to which such Option is being
exercised, accompanied by full payment of the purchase price therefor either
(a) in United States dollars in cash or by check, (b) at the discretion of the
Committee, through delivery of shares of Common Stock having a fair market
value equal as of the date of the exercise to the cash exercise price of the
Option, (c) at the discretion of the Committee, by delivery of the optionee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the lowest applicable Federal rate, as defined in Section
1274(d) of the Code, (d) at the discretion of the Committee and consistent with
applicable law, through the delivery of an assignment to the Company of a
sufficient amount of the proceeds from the sale of the Common Stock acquired
upon exercise of the Option and an authorization to the broker or selling agent
to pay that amount to the Company, which sale shall be at the participant's
direction
Page 12 of 16
<PAGE> 8
at the time of exercise, or (e) at the discretion of the Committee, by any
combination of (a), (b), (c) and (d) above. If the Committee exercises its
discretion to permit payment of the exercise price of an ISO by means of the
methods set forth in clauses (b), (c), (d) or (e) of the preceding sentence,
such discretion shall be exercised in writing at the time of the grant of the
ISO in question. The holder of a Option shall not have the rights of a
shareholder with respect to the shares covered by his Option until the date of
issuance of a stock certificate to him for such shares. Except as expressly
provided above in paragraph 13 with respect to changes in capitalization and
stock dividends, no adjustment shall be made for dividends or similar rights
for which the record date is before the date such stock certificate is issued.
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board on
February 11, 1994, subject, with respect to the validation of ISOs granted
under the Plan, to approval of the Plan by the stockholders of the Company at
the next Meeting of Stockholders or, in lieu thereof, by written consent. If
the approval of stockholders is not obtained prior to February 11, 1995, any
grants of ISOs under the Plan made prior to that date will be rescinded. The
Plan shall expire at the end of the day on February 11, 2004 (except as to
Options outstanding on that date). Subject to the provisions of paragraph 5
above, Options may be granted under the Plan prior to the date of stockholder
approval of the Plan. The Board may terminate or amend the Plan in any respect
at any time, except that, without the approval of the stockholders obtained
within 12 months before or after the Board adopts a resolution authorizing any
of the following actions: (a) the total number of shares that may be issued
under the Plan may not be increased (except by adjustment pursuant to paragraph
13); (b) the benefits accruing to participants under the Plan may not be
materially increased; (c) the requirements as to eligibility for participation
in the Plan may not be materially modified; (d) the provisions of paragraph 3
regarding eligibility for grants of ISOs may not be modified; (e) the
provisions of paragraph 6(B) regarding the exercise price at which shares may
be offered pursuant to ISOs may not be modified (except by adjustment pursuant
to paragraph 13); (f) the expiration date of the Plan may not be extended; and
(g) the Board may not take any action which would cause the Plan to fail to
comply with Rule 16b-3. Except as otherwise provided in this paragraph 15, in
no event may action of the Board or stockholders alter or impair the rights of
an optionee, without his consent, under any Option previously granted to him.
16. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS. The Committee, at
the written request or with the written consent of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's
ISOs (or any installments or portions of installments thereof) that have not
been exercised on the date of conversion into Non-Qualified Options at any time
prior to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such
conversion. Such actions may include, but shall not be limited to, extending
the exercise period or reducing the exercise price of the appropriate
installments of such ISOs. At the time of such conversion, the Committee (with
the consent of the optionee) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Committee in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan. Nothing in the Plan shall be deemed to give any optionee the right to
have such optionee's ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Committee takes appropriate action.
Page 13 of 16
<PAGE> 9
17. APPLICATION OF FUNDS. The proceeds received by the Company from
the sale of shares pursuant to Options granted under the Plan shall be used for
general corporate purposes.
18. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. By accepting an
ISO granted under the Plan, each optionee agrees to notify the Company in
writing immediately after he makes a Disqualifying Disposition (as described in
Sections 421, 422 and 424 of the Code and regulations thereunder) of any stock
acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the making of a Disqualifying Disposition (as defined in
paragraph 18), the vesting or transfer of restricted stock or securities
acquired on the exercise of a Option hereunder, or the making of a distribution
or other payment with respect to such stock or securities, the Company may
withhold taxes in respect of amounts that constitute compensation includible in
gross income. The Committee in its discretion may condition (i) the exercise
of an Option, or (ii) the vesting or transferability of restricted stock or
securities acquired by exercising a Option, on the optionee's making
satisfactory arrangement for such withholding. Such arrangement may include
payment by the optionee in cash or by check of the amount of the withholding
taxes or, at the discretion of the Committee, by the optionee's delivery of
previously held shares of Common Stock or the withholding from the shares of
Common Stock otherwise deliverable upon exercise of a Option shares having an
aggregate fair market value equal to the amount of such withholding taxes.
20. GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval
of any governmental authority required in connection with the authorization,
issuance or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by optionees in connection with the Plan.
21. GOVERNING LAW; CONSTRUCTION. The validity and construction of the
Plan and the instruments evidencing Options shall be governed by the laws of
Delaware, or the laws of any jurisdiction in which the Company or its
successors in interest may be organized. In construing this Plan, the singular
shall include the plural and the masculine gender shall include the feminine
and neuter, unless the context otherwise requires.
Date Approved by Board of Directors of the Company: February 11, 1994
Date Approved by Stockholders of the Company: February 28, 1994
Page 14 of 16
<PAGE> 1
EXHIBIT 5
Testa, Hurwitz & Thibeault, LLP
Attorneys At Law
High Street Tower, 125 High Street
Boston, MA 02110-2725
Office (617) 248-7000
Fax (617) 248-7100
December 4, 1996
Fusion Systems Corporation
7600 Standish Place
Rockville, MD 20855
RE: Registration Statement on Form S-8 Relating to the Fusion
Systems Corporation 1994 Stock Option Plan, as amended
(hereinafter the "Plan")
Dear Ladies and Gentlemen:
Reference is made to the above-captioned Registration Statement on
Form S-8 (the Registration Statement") filed by Fusion Systems Corporation on
December 4, 1996 with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, relating to an aggregate of 600,000 shares
of Common Stock, $.01 par value, of the Company issuable pursuant to the Plan
(the "Shares").
We have examined such documents, certificates, records and matters of
law that we have deemed necessary or appropriate for the purpose of this
opinion.
Based on the foregoing, we are of the opinion that the Shares have
been duly authorized and, when issued and sold in accordance with the Plan,
will be validly issued, fully paid and nonassessable.
We hereby consent to filing this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ Testa, Hurwitz & Thibeault, LLP
-----------------------------------
TESTA, HURWITZ & THIBEAULT, LLP
Page 15 of 16
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of our reports dated
February 9, 1996, included in Fusion Systems Corporation's Annual Report on
Form 10-K for the year ended December 31, 1995 and to all references to our
Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Washington, D.C.,
December 3, 1996
Page 16 of 16
