AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 12, 1998
REGISTRATION NO. 333-_______
============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
OSTEX INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
WASHINGTON
(State or Other Jurisdiction of Incorporation or Organization)
91-1450247
(I.R.S. Employer Identification No.)
2203 AIRPORT WAY SOUTH, SUITE 400
SEATTLE, WASHINGTON 98134
(Address of Principal Executive Offices, Including Zip Code)
OSTEX INTERNATIONAL, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
and
OSTEX INTERNATIONAL, INC.
AMENDED AND RESTATED DIRECTORS' NONQUALIFIED STOCK OPTION PLAN
(Full Title of the Plans)
---------------------
Robert M. Littauer COPY TO:
Ostex International, Inc. Stephen M. Graham
2203 Airport Way South, Suite 400 Perkins Coie LLP
Seattle, Washington 98134 1201 Third Avenue, 40th Floor
(206) 292-8082 Seattle, Washington 98101-3099
(Name, Address and Telephone Number, (206) 583-8888
Including Area Code, of
Agent for Service)
-------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================== ================== ========================== ========================= ====================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(3)(4) PER SHARE(1) PRICE(1) REGISTRATION FEE
============================== ================== ========================== ========================= ====================
============================== ================== ========================== ========================= ====================
<S> <C> <C> <C> <C>
COMMON STOCK, $.01 PAR VALUE
PER SHARE(2)
1994 Stock Option Plan 1,000,000 $2.63 $2,630,000 $776
Directors' Nonqualified
Stock Option Plan 100,000 $2.63 $ 263,000 $78
-----
Total $854
============================== ================== ========================== ========================= ====================
<FN>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended. The
price per share is estimated to be $2.63, based on the average of the high
sales price ($2.75) and the low sales price ($2.50) for the Registrant's
Common Stock as reported on the Nasdaq National Market on January 6, 1998.
(2) Includes rights to purchase Series A Junior Participating Preferred Stock,
par value $.01 per share, associated with the Common Stock.
(3) Includes an indeterminate number of additional shares that may be necessary
to adjust the number of shares reserved for issuance pursuant to the
Amended and Restated 1994 Stock Option Plan and the Amended and Restated
Directors' Nonqualified Stock Option Plan as the result of any future stock
dividend, stock split, spin-off, combination or exchange of shares,
recapitalization, merger, consolidation, distribution to stockholders other
than a normal cash dividend, or similar adjustment of the Registrant's
outstanding Common Stock.
(4) Prior Form S-8 Registration Statement No. 333-4802, filed by the Registrant
on May 6, 1996, registered an aggregate of 1,000,000 shares of the
Registrant's Common Stock, of which 750,000 shares were allocated to the
1994 Stock Option Plan and 250,000 shares were allocated to the Directors'
Nonqualified Stock Option Plan.
</FN>
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed on March 31, 1997 with the Securities and Exchange
Commission (the "Commission") under Section 13(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), which contains certified financial
statements for the most recent fiscal year for which such statements have been
filed;
(b) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Annual Report on Form 10-K referred to in (a) above; and
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the Commission on May
6, 1996 (Registration No. 0-25250) under Section 12(g) of the Exchange Act,
including any amendments or reports filed for the purpose of updating such
description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment, which indicates that the securities
offered hereby have been sold or which deregisters the securities covered hereby
then remaining unsold, shall also be deemed to be incorporated by reference into
this Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act (the "WBCA") authorize a court to award, or a corporation's
board of directors to grant, indemnification to directors, officers, employees
and agents of the Registrant and those serving at the Registrant's request in
similar positions in any other corporation, partnership, joint venture, trust or
other enterprise in terms sufficiently broad to permit such indemnification
under certain circumstances for liabilities (including reimbursement for
expenses incurred) arising under the Securities Act of 1933, as amended (the
"Securities Act"). Article 9 of the Registrant's Amended and Restated Articles
of Incorporation provides for indemnification of the Registrant's directors and
officers, to the full extent permissible by applicable law as then in effect,
against all expenses and liabilities (including any obligation to pay any
judgment, settlement, penalty, fine, including an excise tax assessed with
respect to an employee benefit plan, or expense incurred with respect to the
proceeding, including attorney's fees) actually and reasonably incurred in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, and whether formal or
informal, in which the director or officer is, was or is threatened to be made a
party to or is otherwise involved in by reason of the fact that the director or
officer is or was a director or officer of the Registrant, or, by reason of the
<PAGE>
fact that, while a director or officer of the Registrant, such director or
officer is or was serving at the request of the Registrant as a director,
officer, partner, trustee, employee or agent of another corporation or of a
partnership, joint venture, trust, employee benefit plan or other enterprise.
The director or officer will not be indemnified for any proceeding initiated by
such director or officer unless such proceeding was, prior to its initiation,
authorized by the Registrant's Board of Directors or unless the proceeding is to
enforce the rights of indemnification. No indemnity may be provided by the
Registrant for acts or omissions of an indemnified director finally adjudged to
be intentional misconduct or a knowing violation of law, for conduct of such
director finally adjudged to be in violation of Section 23B.08.310 of the WBCA,
for any transaction with respect to which it was finally adjudged that such
director personally received a benefit in money, property or services to which
the director was not legally entitled, or to the extent the corporation is
otherwise prohibited by applicable law from paying such indemnification.
Section 23B.08.320 of the WBCA authorizes a corporation to limit a
director's liability to the corporation or its shareholders for monetary damages
for acts or omissions as a director, except in certain circumstances involving
intentional misconduct, self-dealing or illegal corporate loans or
distributions, or any transaction from which the director personally receives a
benefit in money, property or services to which the director is not legally
entitled. Article 8 of the Registrant's Amended and Restated Articles of
Incorporation provides for limitation of director liability to the maximum
extent permitted by the WBCA.
The Registrant also maintains an insurance policy insuring its
directors and officers against liability for certain acts or omissions while
acting in their official capacity.
ITEM 8. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ ---------------------------------------------------
5.1 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered
23.1 Consent of Arthur Andersen LLP (contained in this Form S-8)
23.2 Consent of Perkins Coie LLP (included in its Opinion filed
as Exhibit 5.1)
24.1 Power of Attorney (see Signature Page in this Form S-8)
99.1 Ostex International, Inc. Amended and Restated 1994 Stock
Option Plan
99.2 Amendment, dated July 16, 1997, to Ostex International, Inc.
Amended and Restated 1994 Stock Option Plan
99.3 Ostex International, Inc. Amended and Restated Directors'
Nonqualified Stock Option Plan
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
<PAGE>
(b) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
(c) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that clauses (a)(1)(i) and (a)(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 with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at 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 that remain unsold at the termination of
the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Seattle, State of Washington, on the 9th day of
January, 1998.
OSTEX INTERNATIONAL, INC.
By /S/ ROBERT M. LITTAUER
------------------------------------
Robert M. Littauer
Senior Vice President, Finance and Administration
Principal Financial and Accounting Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes Robert M. Littauer
and John M. Brenneman, and each of them, as attorneys-in-fact, with full power
of substitution, to execute in the name and on behalf of such person,
individually and in each capacity stated below, and to file any or all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Commission or any regulatory authority.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 9th day of January, 1998.
SIGNATURE TITLE
- ------------------------------------ --------------------------
/s/ Thomas A. Bologna Chief Executive Officer and President,
- ------------------------------------ Director
Thomas A. Bologna
/s/ Robert M. Littauer Senior Vice President, Finance and
- ------------------------------------ Administration
Robert M. Littauer Principal Financial and Accounting Officer
/s/ Thomas J. Cable Chairman of the Board
- ------------------------------------
Thomas J. Cable
Director
- ------------------------------------
Elisabeth L. Evans, M.D.
/s/ David R. Eyre Director
- ------------------------------------
David R. Eyre
/s/ Fredric J. Feldman Director
- ------------------------------------
Fredric J. Feldman
/s/ Gilbert S. Omenn, M.D., Ph.D. Director
- ------------------------------------
Gilbert S. Omenn, M.D., Ph.D.
/s/ Gregory D. Phelps Director
- ------------------------------------
Gregory D. Phelps
/s/ John H. Trimmer Director
- ------------------------------------
John H. Trimmer
<PAGE>
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 report dated
February 12, 1997 included in Ostex International, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1996, and to all references to our firm
included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Seattle, Washington
January 9, 1998
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ----------- ------------------------------------------
5.1 Opinion of Perkins Coie LLP regarding legality of Common Stock
being registered
23.1 Consent of Arthur Andersen LLP (contained in Form S-8)
23.2 Consent of Perkins Coie LLP (included in its Opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page in Form S-8)
99.1 Ostex International, Inc. Amended and Restated 1994 Stock
Option Plan
99.2 Amendment, dated July 16, 1997, to Ostex International, Inc.
Amended and Restated 1994 Stock Option Plan
99.3 Ostex International, Inc. Amended and Restated Directors'
Nonqualified Stock Option Plan
EXHIBIT 5.1
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR, SEATTLE, WASHINGTON 98101-3099
TELEPHONE: (206) 583-8888 FACSIMILE: (206) 583-8500
January 9, 1998
Ostex International, Inc.
2203 Airport Way South, Suite 400
Seattle, Washington 98134
Re: Registration Statement on Form S-8 of Shares of Common Stock,
Par Value $.01 per Share, of Ostex International, Inc.
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), which you are filing with the
Securities and Exchange Commission with respect to 1,100,000 shares of Common
Stock, $0.01 par value per share (the "Shares"), 1,000,000 of which may be
issued pursuant to the Ostex International, Inc. Amended and Restated 1994 Stock
Option Plan and 100,000 of which may be issued pursuant to the Ostex
International, Inc. Amended and Restated Directors' Nonqualified Stock Option
Plan (together, the "Plans"). We have examined the Registration Statement and
such documents and records of the Company and other documents as we have deemed
necessary for the purpose of this opinion. In giving this opinion, we are
assuming the authenticity of all instruments presented to us as originals, the
conformity with originals of all instruments presented to us as copies and the
genuineness of all signatures.
Based upon and subject to the foregoing, we are of the opinion that any
original issuance Shares that may be issued pursuant to the Plans have been duly
authorized and that, upon the due execution by the Company and the registration
by its registrar of such Shares, issuance thereof by the Company in accordance
with the terms of the Plans, and the receipt of consideration therefor in
accordance with the terms of the Plans, such Shares will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
PERKINS COIE
EXHIBIT 99.1
OSTEX INTERNATIONAL, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
This 1994 Stock Option Plan (the "Plan") provides for the grant of
options to acquire shares of Common Stock, $.01 par value (the "Common Stock"),
of Ostex International, Inc., a Washington corporation (the "Company"). Stock
options granted under this Plan that qualify under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), are referred to in this Plan as
"Incentive Stock Options." Incentive Stock Options and stock options that do not
qualify under Section 422 of the Code ("Non-Qualified Stock Options") granted
under this Plan are referred to as "Options."
1. PURPOSES
The purposes of this Plan are to retain the services of valued key
employees and consultants of the Company, and such other persons as the Plan
Administrator shall select in accordance with Section 3 below, to encourage such
persons to acquire a greater proprietary interest in the Company, thereby
strengthening their incentive to achieve the objectives of the shareholders of
the Company, and to serve as an aid and inducement in the hiring of new
employees, consultants and other persons selected by the Plan Administrator.
2. ADMINISTRATION
This Plan shall be administered by the Board of Directors of the
Company (the "Board"), except that the Board may, in its discretion, establish a
committee composed of members of the Board or other persons to administer this
Plan, which committee (the "Committee") may be an executive, compensation or
other committee, including a separate committee especially created for this
purpose. The Committee shall have such of the powers and authority vested in the
Board hereunder as the Board may delegate to it (including the power and
authority to interpret any provision of this Plan or of any Option). The members
of any such Committee shall serve at the discretion of the Board. The Board, or
the Committee if one has been established by the Board, are referred to in this
Plan as the "Plan Administrator." Following registration of any of the Company's
securities under Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), no person shall serve as a member of the Plan
Administrator if his or her service would disqualify this Plan from eligibility
under Securities and Exchange Commission Rule 16b-3, as amended from time to
time, or any successor rule or regulatory requirement; PROVIDED, that the Plan
Administrator shall consist of at least the minimum number of persons required
by Securities and Exchange Commission Rule 16b-3, as amended, or any successor
rule or regulatory requirement. If, and so long as, the Company has a class of
equity securities registered under Section 12 of the Exchange Act, the Board of
Directors in determining the membership of any such committee shall, with
respect to option grants to any persons subject to or likely to become subject
to Section 16 of the Exchange Act, give due consideration to the provisions
regarding (a) "outside directors" as contemplated by Section 162(m) of the Code
and (b) "nonemployee directors" as contemplated by Rule 16b-3 under the Exchange
Act.
Subject to the provisions of this Plan, and with a view to effecting
its purpose, the Plan Administrator shall have sole authority, in its absolute
discretion, to: (a) construe and interpret this Plan; (b) define the terms used
<PAGE>
in this Plan; (c) prescribe, amend and rescind rules and regulations relating to
this Plan; (d) correct any defect, supply any omission or reconcile any
inconsistency in this Plan; (e) determine the individuals to whom Options shall
be granted under this Plan and whether the Option is an Incentive Stock Option
or a Non-Qualified Stock Option; (f) determine the time or times at which
Options shall be granted under this Plan; (g) determine the number of shares of
Common Stock subject to each Option, the exercise price of each Option, the
duration of each Option and the times at which each Option shall become
exercisable; (h) determine all other terms and conditions of Options; and (i)
make all other determinations necessary or advisable for the administration of
this Plan. All decisions, determinations and interpretations made by the Plan
Administrator shall be binding and conclusive on all participants in this Plan
and on their legal representatives, heirs and beneficiaries.
3. ELIGIBILITY
Incentive Stock Options may be granted to any individual who, at the
time the Option is granted, is an employee of the Company or any Related
Corporation (as defined below), including employees who are directors of the
Company ("Employees"). Non-Qualified Stock Options may be granted to Employees
and to such other persons other than directors who are not Employees as the Plan
Administrator shall select. Options may be granted in substitution for
outstanding Options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other reorganization between
such other corporation and the Company or any subsidiary of the Company. Options
also may be granted in exchange for outstanding Options. Any person to whom an
Option is granted under this Plan is referred to as an "Optionee."
As used in this Plan, the term "Related Corporation," when referring to
a subsidiary corporation, shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock of one of the
other corporations in such chain. When referring to a parent corporation, the
term "Related Corporation" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, at the time of
granting of the Option, each of the corporations other than the Company owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock of one of the other corporations in such chain.
4. STOCK
Subject to approval of the Plan by shareholders of the Company, options
to purchase a maximum of 1,750,000 shares of the Company's authorized but
unissued, or required, Common Stock may be issued pursuant to the Plan, subject
to adjustment as provided in Section 5.13(a) below; PROVIDED, that any shares of
Common Stock received or withheld by the Company as payment for shares of Common
Stock purchased upon exercise of Options pursuant to Section 5.9 below shall be
added to the number of such shares as to which Options may be granted. The
number of shares with respect to which Options may be granted hereunder is
subject to adjustment as set forth in Section 5.13 below. In the event that any
outstanding Option expires or is terminated for any reason, the shares of Common
Stock allocable to the unexercised portion of such Option may again be subject
to an Option to the same Optionee or to a different person eligible under
Section 3 above.
<PAGE>
5. TERMS AND CONDITIONS OF OPTIONS
Each Option granted under this Plan shall be evidenced by a written
agreement approved by the Plan Administrator (the "Agreement"). Agreements may
contain such additional provisions, not inconsistent with this Plan, as the Plan
Administrator in its discretion may deem advisable. All Options also shall
comply with the following requirements:
5.1 NUMBER OF SHARES AND TYPE OF OPTION
Each Agreement shall state the number of shares of Common Stock to
which it pertains and whether the Option is intended to be an Incentive Stock
Option or a Non-Qualified Stock Option. In the absence of action to the contrary
by the Plan Administrator in connection with the grant of an Option, all Options
shall be Non-Qualified Stock Options. The aggregate fair market value
(determined at the Date of Grant, as defined below) of the stock with respect to
which Incentive Stock Options are exercisable for the first time by the Optionee
during any calendar year (granted under this Plan and all other Incentive Stock
Option plans of the Company, a Related Corporation or a predecessor corporation)
shall not exceed such limit as may be prescribed by the Code as it may be
amended from time to time. Any Option which exceeds the annual limit shall not
be void but rather shall be a Non-Qualified Stock Option.
(a) LIMITATION ON NUMBER OF SHARES UNDERLYING OPTIONS. Subject
to adjustment from time to time as provided in Section 5.13 below, the Plan
Administrator shall not grant options to any person in any one fiscal year of
the Company in an amount that exceeds, in the aggregate, 200,000 shares of
Common Stock. This limitation shall be applied in a manner consistent with the
requirements of, and only to the extent required for compliance with, the
exclusion from the limitation on deductibility of compensation under Section
162(m) of the Code.
5.2 DATE OF GRANT
Each Agreement shall state the date the Plan Administrator has deemed
to be the effective date of the Option for purposes of this Plan (the "Date of
Grant").
5.3 OPTION PRICE
Each Agreement shall state the price per share of Common Stock at which
it is exercisable. The exercise price shall be fixed by the Plan Administrator
at whatever price the Plan Administrator may determine in the exercise of its
sole discretion; PROVIDED, that the per share exercise price for any Option
granted following the effective date of registration of any of the Company's
securities under Section 12 of the Securities Exchange Act of 1934 shall not be
less than the fair market value per share of the Common Stock at the Date of
Grant as determined by the Plan Administrator in good faith; PROVIDED FURTHER,
that the per share exercise price for an Incentive Stock Option shall not be
less than the fair market value per share of the Common Stock at the Date of
Grant as determined by the Plan Administrator in good faith; PROVIDED FURTHER,
that with respect to Incentive Stock Options granted to greater-than-ten percent
(>10%) shareholders of the Company (as determined with reference to Section
424(d) of the Code), the exercise price per share shall not be less than one
hundred ten percent (110%) of the fair market value per share of the Common
Stock at the Date of Grant; and, PROVIDED FURTHER, that Incentive Stock Options
granted in substitution for outstanding Options of another corporation in
connection with the merger, consolidation, acquisition of property or stock or
<PAGE>
other reorganization involving such other corporation and the Company or any
subsidiary of the Company may be granted with an exercise price equal to the
exercise price for the substituted Option of the other corporation, subject to
any adjustment consistent with the terms of the transaction pursuant to which
the substitution is to occur.
5.4 DURATION OF OPTIONS
At the time of the grant of the Option, the Plan Administrator shall
designate, subject to Section 5.7 below, the expiration date of the Option,
which date shall not be later than ten (10) years from the Date of Grant in the
case of Incentive Stock Options; PROVIDED, that the expiration date of any
Incentive Stock Option granted to a greater-than-ten percent (>10%) shareholder
of the Company (as determined with reference to Section 424(d) of the Code)
shall not be later than five (5) years from the Date of Grant. In the absence of
action to the contrary by the Plan Administrator in connection with the grant of
a particular Option, and except in the case of Incentive Stock Options as
described above, all Options granted under this Plan shall expire ten (10) years
from the Date of Grant.
5.5 VESTING SCHEDULE
No Option shall be exercisable until it has vested. The vesting
schedule for each Option shall be specified by the Plan Administrator at the
time of grant of the Option; PROVIDED, that if no vesting schedule is specified
at the time of grant, the Option shall vest according to the following schedule:
PERCENTAGE OF
NUMBER OF YEARS TOTAL OPTION TO
FOLLOWING DATE OF GRANT BE EXERCISABLE
---------------------------- --------------------
1 20%
2 40%
3 60%
4 80%
5 100%
5.6 ACCELERATION OF VESTING
The vesting of one or more outstanding Options may be accelerated by
the Plan Administrator at such times and in such amounts as it shall determine
in its sole discretion. If an Employee Optionee's employment terminates by
reason of death or Disability (as defined in Section 5.7 below), any Option held
by such Employee Optionee who has been Continuously Employed by the Company or
Related Corporation for a minimum of two (2) years shall become fully vested and
exercisable and may thereafter be exercised during the term of the Option set
forth in Section 5.7 below. "Continuously Employed" shall mean the absence of
any interruption or termination of service. Continuous Employment with the
Company or Related Corporation shall not be considered interrupted in the case
of sick leave, military leave or any other leave of absence approved by the
Company or Related Corporation or in the case of transfers between locations of
the Company or between the Company, Related Corporations or their successors,
provided that the Optionee continues to be an employee of the Company or any
Related Corporation. The vesting of Options also shall be accelerated under the
circumstances described in Sections 5.13 and 5.14 below.
<PAGE>
5.7 TERM OF OPTION
Vested Options shall terminate, to the extent not previously exercised,
upon the occurrence of the first of the following events: (i) the expiration of
the Option, as designated by the Plan Administrator in accordance with Section
5.4 above; (ii) the expiration of ninety (90) days from the date of an
Optionee's termination of employment or contractual relationship with the
Company or any Related Corporation for any reason whatsoever other than death or
Disability (as defined below) unless, in the case of a Non-Qualified Stock
Option, the exercise period is extended by the Plan Administrator until a date
not later than the expiration date of the Option; or (iii) the expiration of one
(1) year from (A) the date of death of the Optionee or (B) cessation of an
Optionee's employment or contractual relationship by reason of Disability (as
defined below) unless, in the case of a Non-Qualified Stock Option, the exercise
period is extended by the Plan Administrator until a date not later than the
expiration date of the Option. If an Optionee's employment or contractual
relationship is terminated by death, any Option held by the Optionee shall be
exercisable only by the person or persons to whom such Optionee's rights under
such Option shall pass by the Optionee's will or by the laws of descent and
distribution of the state or county of the Optionee's domicile at the time of
death. "Disability" shall mean that a person is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or that has lasted or
can be expected to last for a continuous period of not less than twelve (12)
months. The Plan Administrator shall determine whether an Optionee has incurred
a Disability on the basis of medical evidence acceptable to the Plan
Administrator. Upon making a determination of Disability, the Committee shall,
for purposes of the Plan, determine the date of an Optionee's termination of
employment or contractual relationship.
Unless accelerated in accordance with Section 5.6 above, unvested
Options shall terminate immediately upon termination of employment of the
Optionee by the Company for any reason whatsoever, including death or
Disability.
If, in the case of an Incentive Stock Option, an Optionee's
relationship with the Company changes (e.g., from an Employee to a non-Employee,
such as a consultant), such change shall not constitute a termination of an
Optionee's employment with the Company but rather the Optionee's Incentive Stock
Option. For purposes of this Section 5.7, transfer of employment between or
among the Company and/or any Related Corporation shall not be deemed to
constitute a termination of employment with the Company or any Related
Corporation. For purposes of this Section 5.7, employment shall be deemed to
continue while the Optionee is on military leave, sick leave or other bona fide
leave of absence (as determined by the Plan Administrator). The foregoing
notwithstanding, with respect to Incentive Stock Options, employment shall not
be deemed to continue beyond the first ninety (90) days of such leave, unless
the Optionee's reemployment rights are guaranteed by statute or by contract.
5.8 EXERCISE OF OPTIONS
Options shall be exercisable, either all or in part, at any time after
vesting, until termination; PROVIDED, that after registration of any of the
Company's securities under Section 12 of the Exchange Act, Optionee must comply
with the six (6) month holding period requirements of Section 16(b) of the
Exchange Act and Rule 16b-3 thereunder. If less than all of the shares included
in the vested portion of any Option are purchased, the remainder may be
purchased at any subsequent time prior to the expiration of the Option term. No
portion of any Option for less than fifty (50) shares (as adjusted pursuant to
Section 5.13 below) may be exercised; PROVIDED, that if the vested portion of
any Option is less than fifty (50) shares, it may be exercised with respect to
all shares for which it is vested. Only whole shares may be issued pursuant to
an Option, and to the extent that an Option covers less than one (1) share, it
is unexercisable. Options or portions thereof may be exercised by giving to the
<PAGE>
Company an executed notice of election to exercise, which notice shall specify
the number of shares to be purchased, and be accompanied by payment in the
amount of the aggregate exercise price for the Common Stock so purchased, which
payment shall be in the form specified in Section 5.9 below. The Company shall
not be obligated to issue, transfer or deliver a certificate of Common Stock to
any Optionee, or to his personal representative, until the aggregate exercise
price has been paid for all shares for which the Option shall have been
exercised and adequate provision has been made by the Optionee for satisfaction
of any tax withholding obligations associated with such exercise. During the
lifetime of an Optionee, Options are exercisable only by the Optionee.
5.9 PAYMENT UPON EXERCISE OF OPTION
Upon the exercise of any Option, the aggregate exercise price shall be
paid to the Company in cash or by certified or cashier's check. In addition,
upon approval of the Plan Administrator, an Optionee may pay for all or any
portion of the aggregate exercise price by (i) delivering to the Company shares
of Common Stock previously held by such Optionee, (ii) having shares withheld
from the amount of shares of Common Stock to be received by the Optionee, (iii)
delivering an irrevocable subscription agreement obligating the Optionee to take
and pay for the shares of Common Stock to be purchased within one (1) year of
the date of such exercise or (iv) complying with any other payment mechanisms as
the Plan Administrator may approve from time to time. The shares of Common Stock
received or withheld by the Company as payment for shares of Common Stock
purchased upon the exercise of Options shall have a fair market value at the
date of exercise (as determined by the Plan Administrator) equal to the
aggregate exercise price (or portion thereof) to be paid by the Optionee upon
such exercise.
5.10 RIGHTS AS A SHAREHOLDER
An Optionee shall have no rights as a shareholder with respect to any
shares covered by an Option until such Optionee becomes a record holder of such
shares, irrespective of whether such Optionee has given notice of exercise.
Subject to the provisions of Sections 5.13 and 5.14 below, no rights shall
accrue to an Optionee and no adjustments shall be made on account of dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights declared on, or created in, the Common Stock for
which the record date is prior to the date the Optionee becomes a record holder
of the shares of Common Stock covered by the Option, irrespective of whether
such Optionee has given notice of exercise.
5.11 TRANSFER OF OPTION
Options granted under this Plan and the rights and privileges conferred
by this Plan may not be transferred, assigned, pledged or hypothecated in any
manner (whether by operation of law or otherwise) other than by will or by
applicable laws of descent and distribution, as defined by the Code, or the
Employee Retirement Income Security Act, or the rules and regulations
thereunder, and shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of any Option or of any right or privilege conferred by this Plan
contrary to the provisions hereof, or upon the sale, levy or any attachment or
similar process upon the rights and privileges conferred by this Plan, such
Option shall thereupon terminate and become null and void.
<PAGE>
5.12 SECURITIES REGULATION AND TAX WITHHOLDING
5.12.1 Shares shall not be issued with respect to an Option
unless the exercise of such Option and the issuance and delivery of such shares
shall comply with all relevant provisions of law, including, without limitation,
any applicable state securities laws, the Securities Act of 1933, as amended,
the Exchange Act, as amended, the rules and regulations thereunder and the
requirements of any stock exchange upon which such shares may then be listed,
and such issuance shall be further subject to the approval of counsel for the
Company with respect to such compliance, including the availability of an
exemption from registration for the issuance and sale of such shares. The
inability of the Company to obtain from any regulatory body the authority deemed
by the Company to be necessary for the lawful issuance and sale of any shares
under this Plan, or the unavailability of an exemption from registration for the
issuance and sale of any shares under this Plan, shall relieve the Company of
any liability with respect to the nonissuance or sale of such shares.
As a condition to the exercise of an Option, the Plan Administrator may
require the Optionee to represent and warrant in writing at the time of such
exercise that the shares are being purchased only for investment and without any
then-present intention to sell or distribute such shares. At the option of the
Plan Administrator, a stop-transfer order against such shares may be placed on
the stock books and records of the Company, and a legend indicating that the
stock may not be pledged, sold or otherwise transferred unless an opinion of
counsel is provided stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on the certificates representing
such shares in order to assure an exemption from registration. The Plan
Administrator also may require such other documentation as may from time to time
be necessary to comply with federal and state securities laws. THE COMPANY HAS
NO OBLIGATION TO UNDERTAKE REGISTRATION OF OPTIONS OR THE SHARES OF STOCK
ISSUABLE UPON THE EXERCISE OF OPTIONS.
5.12.2 As a condition to the exercise of any Option granted
under this Plan, the Optionee shall make such arrangements as the Plan
Administrator may require for the satisfaction of any federal, state or local
withholding tax obligations that may arise in connection with such exercise.
5.12.3 The issuance, transfer or delivery of certificates of
Common Stock pursuant to the exercise of Options may be delayed, at the
discretion of the Plan Administrator, until the Plan Administrator is satisfied
that the applicable requirements of the federal and state securities laws and
the withholding provisions of the Code have been met.
5.13 STOCK DIVIDEND, REORGANIZATION OR LIQUIDATION
5.13.1 If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or any successor provision)
or any "corporate transaction" described in the regulations thereunder, (ii) the
Company shall declare a dividend payable in, or shall subdivide or combine, its
Common Stock or (iii) any other event with substantially the same effect shall
occur, then the Plan Administrator shall proportionately adjust the number of
shares of Common Stock authorized for issuance under this Plan pursuant to
Section 4 above, and shall further proportionately adjust the number of shares
of Common Stock and/or the exercise price per share with respect to each Option
then outstanding so as to preserve the rights of the Optionee substantially
proportionate to the rights of the Optionee prior to such event, all without
further action on the part of the Plan Administrator, the Company or the
Company's shareholders.
<PAGE>
5.13.2 If the Company is liquidated or dissolved, the Plan
Administrator shall allow the holders of any outstanding Options to exercise all
or any part of the unvested portion of the Options held by them; PROVIDED, that
such Options must be exercised prior to the effective date of such liquidation
or dissolution. If the Option holders do not exercise their Options prior to
such effective date, each outstanding Option shall terminate as of the effective
date of the liquidation or dissolution.
5.13.3 The foregoing adjustments in the shares subject to
Options shall be made by the Plan Administrator, or by any successor
administrator of this Plan, or by the applicable terms of any assumption or
substitution document.
5.13.4 The grant of an Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge,
consolidate or dissolve, to liquidate or to sell or transfer all or any part of
its business or assets.
5.14 CHANGE IN CONTROL; DECLARATION OF EXTRAORDINARY DIVIDEND
5.14.1 CHANGE IN CONTROL
If at any time there is a Change in Control (as defined below) of the
Company, all Options shall accelerate and become fully vested and immediately
exercisable for the duration of the Option term. For purposes of this Subsection
5.14.1, "Change in Control" shall mean either one of the following: (i) When any
"person," as such term is used in sections 13(d) and 14(d) of the Exchange Act
(other than a shareholder of the Company on the date of this Plan, the Company,
a Subsidiary or an employee benefit plan of the Company, including any trustee
of such plan acting as trustee) becomes, after the date of this Plan, the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding securities;
or (ii) the occurrence of a transaction requiring shareholder approval, and
involving the sale of all or substantially all of the assets of the Company or
the merger of the Company with or into another corporation.
5.14.2 DECLARATION OF EXTRAORDINARY DIVIDEND
If at any time the Company declares an Extraordinary Dividend (as
defined below), all Options shall accelerate and thereupon become fully vested
and immediately exercisable for the duration of the Option term. For purposes of
this Subsection 5.14.2, "Extraordinary Dividend" shall mean a cash dividend
payable to holders of record of the Common Stock in an amount in excess of ten
percent (10%) of the then fair market value of the Company's Common Stock. The
fair market value of the Company's Common Stock shall be determined in good
faith by the Board.
6. EFFECTIVE DATE; TERM
This Plan shall be effective as of the closing of the initial public
offering of securities of the Company under the Securities Act of 1933.
Incentive Stock Options may be granted by the Plan Administrator from time to
time thereafter until ten (10) years after such approval. Non-Qualified Stock
Options may be granted until this Plan is terminated by the Board in its sole
discretion. Termination of this Plan shall not terminate any Option granted
prior to such termination.
<PAGE>
7. NO OBLIGATIONS TO EXERCISE OPTION
The grant of an Option shall impose no obligation upon the Optionee to
exercise such Option.
8. NO RIGHT TO OPTIONS OR TO EMPLOYMENT
The grant of any Options under this Plan shall be exclusively within
the discretion of the Plan Administrator, and nothing contained in this Plan
shall be construed as giving any person any right to participate under this
Plan. The Plan shall not confer on any Optionee any right with respect to
continuation of any employment or contractual relationship with the Company or
any Related Corporation, nor shall it interfere in any way with the Company's
or, where applicable, a Related Corporation's right to terminate any Optionee's
employment or contractual relationship at any time, which right is hereby
reserved.
9. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock
issued upon the exercise of Options shall be used for general corporate
purposes, unless otherwise directed by the Board.
10. INDEMNIFICATION OF PLAN ADMINISTRATOR
In addition to all other rights of indemnification they may have as
members of the Board, members of the Plan Administrator shall be indemnified by
the Company for all reasonable expenses and liabilities of any type or nature,
including reasonable attorneys' fees, incurred in connection with any action,
suit or proceeding to which they or any of them are a party by reason of, or in
connection with, this Plan or any Option granted under this Plan, and against
all amounts paid by them in settlement thereof (provided that such settlement is
approved by independent legal counsel selected by the Company), except to the
extent that such expenses relate to matters for which it is adjudged that such
Plan Administrator member is liable for willful misconduct; PROVIDED, that
within fifteen (15) days after the institution of any such action, suit or
proceeding, the Plan Administrator member involved therein shall, in writing,
notify the Company of such action, suit or proceeding, so that the Company may
have the opportunity to make appropriate arrangements to prosecute or defend the
same.
11. AMENDMENT OF PLAN
The Plan Administrator may, at any time, modify, amend or terminate
this Plan and Options granted under this Plan, including, without limitation,
such modifications or amendments as are necessary to maintain compliance with
applicable statutes, rules or regulations; PROVIDED, that no amendment with
respect to an outstanding Option shall be made over the objection of the
Optionee thereof; and PROVIDED FURTHER, that, following registration of any of
the Company's securities under Section 12 of the Exchange Act, the approval of
the holders of a majority of the Company's outstanding shares of voting capital
stock represented at a meeting at which a quorum is present is required within
twelve (12) months before or after the adoption by the Plan Administrator of any
amendment that will permit the granting of Options to a class of persons other
than those currently eligible to receive Options under this Plan or that would
cause this Plan to no longer comply with Securities and Exchange Commission Rule
16b-3, as amended, or any successor rule or other regulatory requirements.
Without limiting the generality of the foregoing, the Plan Administrator may
modify grants to persons who are eligible to receive Options under this Plan who
are foreign nationals or employed outside the United States to recognize
differences in local law, tax policy or custom.
Approved by the Company's Board of Directors, as Amended and Restated,
as of April 10, 1997:
Approved by the Company's shareholders, as Amended and Restated, on
June 2, 1997:
EXHIBIT 99.2
AMENDMENT DATED JULY 16, 1997
TO
OSTEX INTERNATIONAL, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
The Ostex International, Inc. Amended and Restated 1994 Stock Option
Plan (the "Plan") is hereby amended as follows:
1. Section 4 is amended by adding the following sentence at the
end of the section:
"Notwithstanding the foregoing, the aggregate number
of shares that may be issued under Incentive Stock
Options shall not exceed 1,750,000."
2. The first sentence of Section 5.1(a) shall be amended to read
as follows:
"Subject to adjustment from time to time as provided
in Section 5.13 below, the Plan Administrator shall
not grant options to any person in any one fiscal
year of the Company in an amount that exceeds, in the
aggregate, 300,000 shares of Common Stock, except
that the amount may be up to, but not exceed, in the
aggregate, 800,000 shares of Common Stock for any
newly hired person in any one fiscal year of the
Company."
3. The second sentence of Section 5.9 shall be amended to read
as follows:
"In addition, unless the Plan Administrator
determines otherwise, in its sole discretion, an
Optionee may pay for all or any portion of the
aggregate exercise price by delivering to the Company
shares of Common Stock previously held by such
Optionee for at least six (6) months (or any shorter
period necessary to avoid a charge to the Company's
earnings for financial reporting purposes). Upon
approval of the Plan Administrator, an Optionee may
also pay for all or any portion of the aggregate
exercise price by (i) delivering an irrevocable
subscription agreement obligating the Optionee to
take and pay for the shares of Common Stock to be
purchased within one (1) year of the date of such
exercise or (ii) complying with any other payment
mechanisms the Plan Administrator may approve from
time to time. The shares of Common Stock received by
the Company as payment for shares of Common Stock
purchased upon the exercise of Options shall have a
fair market value at the date of exercise (as
determined by the Plan Administrator) equal to the
aggregate exercise price (or portion thereof) to be
paid by the Optionee upon such exercise."
<PAGE>
4. Section 5.14.1 shall be amended to read as follows:
"Except as otherwise provided in any Agreement for an
Option granted prior to July 31, 1997, if at any time
there is a Change in Control (as defined below) of
the Company, all Options shall accelerate and become
fully vested and immediately exercisable for the
duration of the Option term. All such Options shall
terminate and cease to remain outstanding immediately
following the consummation of the Change in Control,
except to the extent such Options are assumed by a
successor corporation incident to the Change in
Control or in the event of a Change in Control as
defined in clause (i) of the following sentence. For
purposes of this Subsection 5.14.1, "Change in
Control" shall mean either one of the following: (i)
when any "person," as such term is used in sections
13(d) and 14(d) of the Exchange Act (other than a
shareholder of the Company on the date of this Plan,
the Company, a Subsidiary or an employee benefit plan
of the Company, including any trustee of such plan
acting as trustee) becomes, after the date of this
Plan, the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing
fifty percent (50%) or more of the combined voting
power of the Company's then outstanding securities;
or (ii) the occurrence of a transaction requiring
shareholder approval, and involving the sale of all
or substantially all of the assets of the Company or
the merger of the Company with or into another
corporation."
The date of the adoption of such amendments by the Board of Directors
of the corporation is July 16, 1997.
The effective date of such amendments shall be July 16, 1997, the date
of adoption by the Board.
EXHIBIT 99.3
OSTEX INTERNATIONAL, INC.
AMENDED AND RESTATED DIRECTORS' NONQUALIFIED STOCK OPTION PLAN
This Nonqualified Stock Option Plan (the "Plan") provides for the grant
of options to acquire shares of Common Stock, $.01 par value (the "Common
Stock"), of Ostex International, Inc., a Washington corporation (the "Company").
1. PURPOSE
The purpose of this Plan is to compensate certain directors of the
Company (the "Optionees" or "Optionee").
2. ELIGIBILITY
Persons eligible to receive options under this Plan shall be all
directors of the Company who are not otherwise employed by the Company or any
Related Corporation, as defined below (the "Directors" or "Director"). Options
may be granted in substitution for outstanding Options of another corporation in
connection with the merger, consolidation, acquisition of property or stock or
other reorganization between such other corporation and the Company or any
subsidiary of the Company. Options also may be granted in exchange for
outstanding Options.
As used in this Plan, the term "Related Corporation," when referring to
a subsidiary corporation, shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock of one of the
other corporations in such chain. When referring to a parent corporation, the
term "Related Corporation" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, at the time of
granting of the Option, each of the corporations other than the Company owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock of one of the other corporations in such chain.
3. STOCK
Options to purchase an aggregate of 350,000 shares of Common Stock
(subject to adjustment as provided in Section 4.12) may be issued pursuant to
the Plan. As of the date that a person is initially elected or appointed as a
Director, the Company shall automatically grant to such person options to
purchase 25,000 shares of the Company's authorized but unissued, or reacquired,
Common Stock (subject to adjustment as provided in Section 4.12). In addition,
for each Director who is in office the day following any annual meeting of
shareholders of the Company (at which meeting such Director was re-elected or
continued in office) and who has been in office for at least five months prior
to such annual meeting, the Company will automatically grant options to purchase
10,000 shares of Common Stock (subject to adjustment as provided in Section
4.12). In the event that any outstanding Option expires or is terminated for any
reason, those shares of Common Stock allocable to the unexercised portion of
such Option may be subject to one or more other Options issued pursuant to the
Plan.
<PAGE>
4. TERMS AND CONDITIONS OF OPTIONS
Each Option shall be evidenced by a written agreement (the "Agreement")
in the form approved by the Company. Agreements may contain such additional
provisions, not inconsistent herewith, as the Company in its discretion may deem
advisable. All Options shall also comply with the following requirements:
4.1 NUMBER OF SHARES
Each Agreement shall state the number of shares to which it pertains.
4.2 DATE OF GRANT
Each Option shall state the date the Company and the Director entered
into the Agreement (the "Date of Grant"), which shall be (i) in the case of new
Directors, the date the individual becomes a Director, or (ii) in the case of
Directors in office the day after any annual meeting of shareholders, the date
after such meeting whichever is applicable.
4.3 OPTION PRICE
The exercise price for all Options granted hereunder shall be the fair
market value on Date of Grant. Such fair market value shall be the closing price
at which it was traded on a national securities exchange or the last sale price
quoted on the National Association of Securities Dealers Automated Quotation
System or any successor or substantially similar market thereto on the Date of
Grant. If the Common Stock shall be traded on more than one such market, the
exercise price shall be determined on the basis of the most active market. If no
such market exists, the exercise price shall be established at fair market value
based on the most recent arms-length transaction occurring within eighteen (18)
months preceding the Date of Grant by or among the Company or any
greater-than-ten-percent (>10%) shareholders of the Company or, if unavailable,
by a qualified appraiser selected by the Company.
4.4 VESTING SCHEDULE
All Options shall vest according to the following schedule:
PERCENTAGE OF
NUMBER OF YEARS TOTAL OPTION TO
FOLLOWING DATE OF GRANT BE EXERCISABLE
------------------------------ --------------------
1 33 1/3%
2 33 1/3%
3 33 1/3%
<PAGE>
4.5 ACCELERATION OF VESTING
Options granted pursuant to the Plan shall become immediately vested
and fully exercisable upon the Director's termination as a director of the
Company by reason of the death or Disability (as defined in Section 4.6 below)
of the Director. The vesting of Options shall also be accelerated under the
circumstances described in Sections 4.12 and 4.13 below.
4.6 TERMINATION OF OPTION
A vested Option shall terminate, to the extent not previously
exercised, upon the occurrence of the first of the following events:
(i) ten (10) years from the Date of Grant;
(ii) the expiration of ninety (90) days from the date of
Optionee's termination as a Director of the Company for any reason other than
death or Disability (as defined below); or
(iii) the expiration of one (1) year from the date of death of
Optionee or the cessation of Optionee's service as a Director by reason of
Disability (as defined below).
"Disability" shall mean that a person is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or that has lasted or
can be expected to last for a continuous period of not less than twelve (12)
months. If Optionee's service as a Director is terminated by death, any Option
held by Optionee shall be exercisable only by the person or persons to whom such
Optionee's rights under such Option shall pass by Optionee's will or by the laws
of descent and distribution of the state or country of Optionee's domicile at
the time of death. Each unvested Option granted pursuant hereto shall terminate
upon Optionee's termination as a Director for any reason whatsoever, including
death or Disability.
4.7 EXERCISE OF OPTIONS
Options shall be exercisable, either all or in part, at any time after
vesting. If less than all of the shares included in the vested portion of any
Option are purchased, the remainder may be purchased at any subsequent time
prior to the expiration of the Option term. No portion of any Option of less
than one (1) share (as adjusted pursuant to Section 4.12 hereof) may be
exercised; PROVIDED, that if the vested portion of any Option is less than fifty
(50) shares, it may be exercised with respect to all shares for which it is
vested. Only whole shares may be issued pursuant to an Option, and to the extent
that an Option covers less than one share, it is unexercisable. Options or
portions thereof may be exercised by giving to the Company an executed notice of
election to exercise, which notice shall specify the number of shares to be
purchased, and be accompanied by payment in the amount of the aggregate option
price for the Common Stock so purchased and in the form specified in Section 4.8
below. The Company shall not be obligated to issue, transfer or deliver a
certificate of Common Stock to any Director, or to his personal representative,
until the aggregate option price has been paid for all shares for which the
Option shall have been exercised and adequate provision has been made by the
Optionee for the satisfaction of any tax withholding obligations associated with
such exercise. During the lifetime of an Optionee, Options are exercisable only
by Optionee.
<PAGE>
4.8 PAYMENT UPON EXERCISE OF OPTION
Upon exercise of any option, the aggregate option price shall be paid
to the Company in cash or by certified or cashier's check. Alternatively, a
Director may pay for all or any portion of the aggregate option exercise price
(i) by delivering to the Company shares of Common Stock previously held by such
Director, (ii) having shares withheld from the amount of shares of Common Stock
to be received by the Director or (iii) delivering an irrevocable subscription
agreement obligating the Director to take and pay for the shares of Common Stock
to be purchased within one (1) year of the date of exercise. The shares of
Common Stock received or withheld by the Company as payment for shares of Common
Stock purchased upon the exercise of Options shall have a fair market value at
the date of exercise (as determined in accordance with Section 4.3 above) equal
to the aggregate option exercise price (or portion thereof) to be paid by the
Director upon exercise.
4.9 RIGHTS AS A SHAREHOLDER
An Optionee shall have no rights as a shareholder with respect to any
shares covered by the Option until such Optionee becomes a record holder of such
shares, irrespective of whether such Optionee has given notice of exercise.
Subject to the provisions of Sections 4.12 and 4.13 below, no rights shall
accrue to an Optionee and no adjustments shall be made on account of dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights declared on, or created in, the Common Stock for
which the record date is prior to the date the Optionee becomes a record holder
of the shares of Common Stock covered by the Option, irrespective of whether
such Optionee has given notice of exercise.
4.10 TRANSFER OF OPTION
Options granted under this Plan and the rights and privileges conferred
by this Plan may not be transferred, assigned, pledged or hypothecated in any
manner (whether by operation of law or otherwise) other than by will or by
applicable laws of descent and distribution, as defined by the Code, or the
Employee Retirement Income Security Act, or the rules and regulations
thereunder, and shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of any Option or of any right or privilege conferred by this Plan
contrary to the provisions hereof, or upon the sale, levy or any attachment or
similar process upon the rights and privileges conferred by this Plan, such
Option shall thereupon terminate and become null and void.
4.11 SECURITIES REGULATION AND TAX WITHHOLDING
4.11.1 Shares shall not be issued with respect to an Option
unless the exercise of such Option and the issuance and delivery of such shares
shall comply with all relevant provisions of law, including, without limitation,
any applicable state securities laws, the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, the rules and regulations
thereunder and the requirements of any stock exchange upon which such shares may
then be listed, and such issuance shall be further subject to the approval of
counsel for the Company with respect to such compliance, including the
availability of an exemption from registration for the issuance and sale of such
shares. The inability of the Company to obtain from any regulatory body the
authority deemed by the Company to be necessary for the lawful issuance and sale
of any shares under this Plan, or the unavailability of an exemption from
registration for the issuance and sale of any shares under this Plan, shall
relieve the Company of any liability with respect to the non-issuance or sale of
such shares.
<PAGE>
As a condition to the exercise of an Option, the Company may require
the Optionee to represent and warrant in writing at the time of such exercise
that the shares are being purchased only for investment and without any
then-present intention to sell or distribute such shares. At the option of the
Company, a stop-transfer order against such shares may be placed on the stock
books and records of the Company, and a legend indicating that the stock may not
be pledged, sold or otherwise transferred unless an opinion of counsel is
provided stating that such transfer is not in violation of any applicable law or
regulation, may be stamped on the certificates representing such shares in order
to assure an exemption from registration. The Company also may require such
other documentation as may from time to time be necessary to comply with federal
and state securities laws. THE COMPANY HAS NO OBLIGATION TO UNDERTAKE
REGISTRATION OF OPTIONS OR THE SHARES OF STOCK ISSUABLE UPON THE EXERCISE OF
OPTIONS.
4.11.2 As a condition to the exercise of any Option granted
under this Plan, the Optionee shall make such arrangements as the Company may
require for the satisfaction of any federal, state or local withholding tax
obligations that may arise in connection with such exercise.
4.11.3 The issuance, transfer or delivery of certificates of
Common Stock pursuant to the exercise of Options may be delayed, at the
discretion of the Board, until the Company is satisfied that the applicable
requirements of the federal and state securities laws and the withholding
provisions of the Code have been met.
4.12 STOCK DIVIDEND, REORGANIZATION OR LIQUIDATION
4.12.1 If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or any successor provision)
or any "corporate transaction" described in the regulations thereunder; (ii) the
Company shall declare a dividend payable in, or shall subdivide or combine, its
Common Stock or (iii) any other event with substantially the same effect shall
occur, the number of shares of Common Stock and/or the exercise price per share
of each outstanding Option shall be proportionately adjusted so as to preserve
the rights of the Optionee substantially proportionate to the rights of the
Optionee prior to such event, and to the extent that such action shall include
an increase or decrease in the number of shares of Common Stock subject to
outstanding Options, the number of shares available under Section 4 of this Plan
shall automatically be increased or decreased, as the case may be,
proportionately, without further action on the part of the Company or the
Company's shareholders.
4.12.2 If the Company is liquidated or dissolved, the holders
of any outstanding Options may exercise all or any part of the unvested portion
of the Options held by them; PROVIDED, that such Options must be exercised prior
to the effective date of such liquidation or dissolution. If the Option holders
do not exercise their Options prior to such effective date, each outstanding
Option shall terminate as of the effective date of the liquidation or
dissolution.
4.12.3 The grant of an Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge,
consolidate or dissolve, to liquidate or to sell or transfer all or any part of
its business or assets.
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4.13 CHANGE IN CONTROL; DECLARATION OF EXTRAORDINARY DIVIDEND
4.13.1 CHANGE IN CONTROL
If at any time there is a Change in Control (as defined below) of the
Company, all Options shall accelerate and become fully vested and immediately
exercisable for the duration of the Option term. For purposes of this Subsection
4.13.1, "Change in Control" shall mean either one of the following: (i) When any
"person," as such term is used in sections 13(d) and 14(d) of the Exchange Act
(other than a shareholder of the Company on the date of this Plan, the Company,
a Subsidiary or an employee benefit plan of the Company, including any trustee
of such plan acting as trustee) becomes, after the date of this Plan, the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding securities;
or (ii) the occurrence of a transaction requiring shareholder approval, and
involving the sale of all or substantially all of the assets of the Company or
the merger of the Company with or into another corporation.
4.13.2 DECLARATION OF EXTRAORDINARY DIVIDEND
If at any time the Company declares an Extraordinary Dividend (as
defined below), all Options shall accelerate and thereupon become fully vested
and immediately exercisable for the duration of the Option term. For purposes of
this Subsection 4.13.2, "Extraordinary Dividend" shall mean a cash dividend
payable to holders of record of the Common Stock in an amount in excess of ten
percent (10%) of the then fair market value of the Company's Common Stock. The
fair market value of the Company's Common Stock shall be determined in good
faith by the Board.
5. EFFECTIVE DATE; TERM
Subject to approval of this Plan by shareholders of the Company, this
Plan shall be effective as of the date which is the first Date of Grant
specified in Section 4.2 above, and Options may be issued then and from time to
time thereafter until this Plan is terminated by the Company. Termination of
this Plan shall not terminate any Option granted prior to such termination.
6. NO OBLIGATIONS TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the Optionee
to exercise such Option.
7. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock,
pursuant to the exercise of Options granted hereunder, will be used for general
corporate purposes.
<PAGE>
8. INDEMNIFICATION OF BOARD
In addition to all other rights or indemnification they may have as
directors of the Company or as members of the Board, members of the Board shall
be indemnified by the Company for all reasonable expenses and liabilities of any
type and nature, including reasonable attorneys fees, incurred in connection
with any action, suit or proceeding to which they or any of them are a party by
reason of, or in connection with, the Plan or any Option granted hereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company), except to the
extent that such expenses relate to matters for which it is adjudged that such
Board members are liable for willful misconduct; PROVIDED, that within fifteen
(15) days after the institution of any such action, suit or proceeding,
member(s) of the Board shall, in writing, notify the Company of such action,
suit or proceeding, so that the Company may have the opportunity to make
appropriate arrangements to prosecute or defend the same.
9. AMENDMENT OF PLAN
The Company may, at any time, modify, amend or terminate this Plan and
Options granted under this Plan, including, without limitation, such
modifications or amendments as are necessary to maintain compliance with
applicable statutes, rules or regulations; PROVIDED, that no amendment with
respect to an outstanding Option shall be made over the objection of the
Optionee thereof and PROVIDED FURTHER, that: (i) the approval of the holders of
a majority of the Company's outstanding shares of voting capital stock
represented at a meeting at which a quorum is present is required within twelve
(12) months before or after the adoption by the Board of any amendment that will
permit the granting of Options to a class of persons other than those currently
eligible to receive Options under this Plan or that would cause this Plan to no
longer comply with Securities and Exchange Commission Rule 16b-3, as amended, or
any successor rule or other regulatory requirements and (ii) this Plan shall not
be amended more than once every six (6) months, other than to comport with
changes in the Code, the Employee Retirement Security Act, or the rules
thereunder.
Approved by the Company's Board of Directors, as Amended and Restated,
as of April 10, 1997.
Approved by the Company's shareholders, as Amended and Restated, on
June 2, 1997.
