As filed with the Securities and Exchange Commission on April 8, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
THE MED-DESIGN CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 23-2771475
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2810 Bunsen Avenue
Ventura, CA 93003
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(Address of principal executive offices) (Zip Code)
THE MED-DESIGN CORPORATION
AMENDED AND RESTATED
NON-QUALIFIED STOCK OPTION PLAN
------------------------
(Full title of the plan)
James M. Donegan, Chief Executive Officer
The Med-Design Corporation
2810 Bunsen Avenue
Ventura, CA 93003
(Name and address of agent for service)
(805) 339-0375
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(Telephone number, including area code, of agent for service)
Copy of all communications to:
Robert M. Berger, Esq.
Bongiovanni & Berger
121 South Broad Street, Suite 1700
Philadelphia, PA 19107
(215) 790-0060
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered Registered per share (1) offering price (1) registration fee
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<S> <C> <C> <C> <C>
Common Stock of The
Med-Design Corporation 500,000 Shares $3.50 $1,750,000 $516.25
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</TABLE>
(1) Estimated pursuant to Rule 457(h) solely for the purpose of calculating the
registration fee, based upon the average of the high and low sales prices of
shares of Common Stock on April 5, 1999, as reported on the Nasdaq Small Cap
Market.
(2)Pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement also covers such additional shares as may hereinafter be offered
or issued to prevent dilution resulting from stock splits, stock dividends,
recapitalizations or certain other capital adjustments.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, as filed by The Med-Design Corporation
"Registrant") with the Securities and Exchange Commission (the "Commission"),
are incorporated by reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1998, filed with the Commission on March 31, 1999.
(b) The description of the Company's shares of Common Stock contained
in the Registration Statement on Form 8-A filed with the Commission on June
1, 1995 registering the Common Stock under the Exchange Act.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, after the date of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration Statement
that indicates that all securities offered hereby have been sold or that
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
that is also incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part hereof.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Joseph N. Bongiovanni, III is Vice President, Secretary and General Counsel
of the Registrant. Mr. Bongiovanni holds 10,000 shares of the stock of the
Registrant.
Item 6. Indemnification of Directors and Officers.
The Registrant's Restated Certificate of Incorporation, as amended,
provides in Paragraph 10 that the personal liability of directors of the
Registrant shall be limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware (the "DGCL"). In addition, Section 145
of the DGCL and Article VII of the Registrant's Bylaws indemnifies directors and
officers against liabilities which they may incur in such capacities.
To the fullest extent now or hereafter permitted by law, any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Registrant) by
reason of the fact that he is or was a director or officer of the Registrant, or
is or was serving at the request of the Registrant as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
shall be indemnified by the
<PAGE>
Registrant against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Registrant and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
To the fullest extent now or hereafter permitted by law, the Registrant
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Registrant to procure a judgment in its favor by reason of the fact that
he is or was a director or officer of the Registrant, or is or was serving at
the request of the partnership, joint venture, trust or other enterprise against
expenses, including attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the Registrant. No such indemnification against expenses
shall be made, however, in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the Registrant unless and
only to the extent that the Court of Chancery or the court in which such action
or suit was brought shall determine upon application that despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Any indemnification of a director or officer under the previous paragraph
(except where such person has been successful on the merits or otherwise in the
defense of a claim, action, suit or other proceeding, in which case such person
is entitled to indemnification as of right) shall be made at the discretion of
the Registrant only upon the determination that such person seeking
indemnification has met the applicable standard of conduct set forth above. Such
determination shall be made (i) by the Board of Directors by a majority vote of
a quorum of disinterested directors who are not parties to such action or (ii)
if such quorum is not obtainable or, even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion.
Expenses incurred by a director or officer of the Registrant in defending a
claim, action, suit or proceeding may be paid by the Registrant in advance of
the final disposition thereof upon receipt of an undertaking by or on behalf of
the recipient to repay such amount unless it shall ultimately be determined that
he is entitled to be indemnified by the Registrant as authorized by the Bylaws.
The indemnification provisions of Article VII of the Bylaws apply to
current as well as former directors, officers and employees, inure to the
benefit of their heirs, executors and administrators. In addition, such
indemnification provisions are not exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled (either by
contract or as a matter of law). Section 145 of the DGCL also empowers the
Registrant to purchase and maintain insurance that protects its officers,
directors, employees and agents against any liabilities incurred in connection
with their service in such positions.
Item 7. Exemption from Registration Claimed.
Not applicable.
<PAGE>
Item 8. Exhibits.
The following exhibits are filed as part of this Registration Statement.
Exhibit
Number Exhibit
- ------- -------
5.1 Opinion of Bongiovanni & Berger
10.1 The Med-Design Amended and Restated Non-Qualified Stock Option Plan
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Bongiovanni & Berger (included in its opinion filed as
Exhibit 5.1 hereto)
24.1 Power of Attorney (included on signature page of this Registration
Statement)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes to:
(1) file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on the plan of
distribution.
provided, however. that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with the Securities
and Exchange Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Ventura, State of California, on April 7, 1999.
THE MED-DESIGN CORPORATION
By: /s/ JAMES M. DONEGAN
----------------------------------
James M. Donegan
President, Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below in so signing also makes, constitutes and appoints James M.
Donegan and Lawrence D. Ellis, or either of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to execute and cause to be filed with the Securities and Exchange
Commission any and all amendments and post-effective amendments to this
Registration Statement and a related registration statement that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933,
and in each case to file the same, with all exhibits thereto and other documents
in connection therewith, and hereby ratifies and confirms all that said
attorneys-in-fact and agents or their substitute or substitutes may do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ JAMES M. DONEGAN Chairman of the Board, President and April 7, 1999
- --- ----- -- ------- Chief Executive Officer
James M. Donegan (Principal Executive Officer)
/s/ LAWRENCE D. ELLIS Vice President of Finance and April 7, 1999
- --- -------- -- ----- Acting Chief Financial Officer
Lawrence D. Ellis (Principal Financial and
Accounting Officer)
/s/ JOSEPH N. BONGIOVANNI, III Director April 7, 1999
- --- ------ -- ------------ ---
Joseph N. Bongiovanni, III
/s/ JOHN A. BOTICH Director April 7, 1999
- --- ---- -- ------
John A. Botich
/s/ JOHN F. KELLEY Director April 7, 1999
- --- ---- -- ------
John F. Kelley
<PAGE>
Director
- ---------------------
Vincent Papa
/s/ GILBERT M. WHITE Director April 7, 1999
- --- ------- -- -----
Gilbert M. White
Director
- --- ------- -- -----
William A. Jolly
/s/ PASQUALE L. VALLONE Director April 6, 1999
- --- -------- -- -------
Pasquale L. Vallone
</TABLE>
<PAGE>
THE MED-DESIGN CORPORATION
REGISTRATION STATEMENT ON FORM S-8
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------- -------
5.1 Opinion of Bongiovanni & Berger
10.1 The Med-Design Amended and Restated Non-Qualified Stock
Option Plan
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Bongiovanni & Berger (included in its opinion filed
as Exhibit 5.1 hereto)
24.1 Power of Attorney (included on signature page of this
Registration Statement)
Exhibit 5.1
April 6, 1999
The Med-Design Corporation
2810 Bunsen Avenue
Ventura, CA 93003
Re: Issuance of Additional Shares Pursuant to Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as outside counsel to The Med-Design Corporation, a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-8
(the "Registrant Statement") relating to the registration by the Company of an
additional 500,000 shares (the "Shares") of the Company's Common Stock, $.01 par
value per share, to be issued pursuant to or be granted under the Company's
Amended and Restated Non-Qualified Stock Option Plan (as amended to date, the
"Plan").
In so acting, we have examined originals, or copies certified or otherwise
identified to our satisfaction, of (a) the Amended and Restated Certificate of
Incorporation of the Company, (b) the Amended and Restated By-Laws of the
Company, (c) a good standing certificate dated as of a recent date from the
State of Delaware, (d) the Plan and (e) such other documents, records,
certificates and other instruments of the Company as in our judgment are
necessary or appropriate for purposes of this opinion.
Based on the foregoing, we are of the following opinion:
1. The Company is a corporation duly incorporated and validly existing
under the laws of the State of Delaware.
2. The Shares, when issued in accordance with the terms of the Plan
and for consideration not less than par value per Share, will be duly
authorized, validly issued, fully paid and non-assessable.
We are expressing the opinions above as members of the Bar of the
Commonwealth of Pennsylvania and express no opinion as to any law other than the
General Corporation Law of the State of Delaware.
We consent to the use of this opinion as an exhibit to the Registration
Statement. In giving such opinion, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ ROBERT M. BERGER
--------------------
Robert M. Berger
Exhibit 10.1
THE MED-DESIGN CORPORATION
AMENDED AND RESTATED NON-QUALIFIED STOCK OPTION PLAN
Amended and Restated as of November 1, 1996
<PAGE>
ARTICLE I
DEFINITIONS
1.1. In this Stock Option Plan (hereinafter referred to as the "Plan")
unless the context otherwise requires, references to the following words shall
have the following meanings:
"Board of Directors" shall mean the Board of Directors of the Company as
constituted from time to time.
"Business Day" shall mean a day (other than a Saturday or Sunday) on which
the principal office of the Company in Philadelphia, Pennsylvania, is open for
the conduct of normal business.
"Change in Control" shall mean a change in control of the Company of a
nature that would be required to be reported (assuming such event has not been
"previously reported") in response to Item 1(a) of the Current Report on Form
8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Exchange Act; provided that, without limiting the foregoing, a "Change in
Control" shall be deemed to have occurred at such time as (a) any Person (as
defined in the Exchange Act) after the date hereof becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 10% or more of the combined voting power of the Company's
outstanding securities ordinarily having the right to vote at elections of
directors ("Voting Securities"), or (b) during any period of two consecutive
years after the date of the initial acquisition by such Person of Voting
Securities of the Company, individuals who constitute the members of the Board
of Directors of the Company
<PAGE>
on the date of such acquisition, or at the commencement of any two year period
thereafter (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date of such acquisition whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least eighty percent (80%)
of the directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination) shall be
considered as though such person were a member of the Incumbent Board, or (c)
the shareholders of the Company approve a merger or consolidation of the Company
with any other entity other than (i) a merger or consolidation that would result
in the Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being converted into
Voting Securities of the entity surviving such merger or consolidation), in
combination with Voting Securities of the Company or such surviving entity held
by a trustee or other fiduciary pursuant to any employee benefit plan of the
Company or such surviving entity or any Subsidiary of the Company or such
surviving entity, at least 75% of the combined voting power of the Voting
Securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
Person becomes the beneficial owner of securities of the
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<PAGE>
Company or the entity surviving such merger or consolidation representing more
of the combined voting power of the securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation than such
Person was the beneficial owner of immediately prior to such recapitalization,
or (d) the shareholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets.
"Company" shall mean The Med-Design Corporation.
"Date of Grant" shall mean the date on which an Option is granted to a
Qualified Person by the Company pursuant to Article V hereof.
"Disability" means permanent and total disability as defined in Section
422(c)(6) of the Internal Revenue Code of 1986, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as it may be
amended from time to time, or any successor act or statute.
"Expiration Date" for each Option, shall mean the date fixed by the Board
of Directors pursuant to section 7.1 of the Plan.
"Independent Director" shall mean any director of the Company who is not an
employee or officer of the Company or any Subsidiary.
"Market Value," on the Date of Grant of any Option, shall mean (i) the last
sale price (regular way) of the Shares on the Date of Grant or, if no such sale
takes place on such day,
-3-
<PAGE>
the average of the closing bid and asked prices on the New York Stock Exchange
Composite Tape or, if the Shares are not listed or admitted to trading on the
New York Stock Exchange on the Date of Grant, on the national securities
exchange in or nearest the City of New York on which the Shares are listed or
admitted to trading, or (ii) if on the Date of Grant the Shares are not listed
or admitted to trading on any national securities exchange, the last sale price
(regular way) of the Shares on the Date of Grant or if no such sale takes place
on such day, the average of the highest reported bid and lowest reported asked
prices as furnished by the National Association of Securities Dealers, Inc.
through the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or a similar organization if NASDAQ is no longer reporting
such information, or (iii) if on the Date of Grant the Shares are not quoted by
any such organization, the fair market value of the Shares on the Date of Grant
as determined by the Committee.
"Option" shall mean a right to subscribe for Shares granted to a Qualified
Person pursuant to the Plan.
"Option Holder" shall mean a Qualified Person or former Qualified Person
who holds an Option.
"Option Shares" shall mean unissued Shares in respect of which Options are
granted.
"Plan" shall mean The Med-Design Corporation Non-Qualified Stock Option
Plan.
-4-
<PAGE>
"Qualified Person" shall mean any employee or officer of, or consultant to,
the Company or any Subsidiary or any Independent Director.
"Retirement" means retirement from active employment with the Company or
any Subsidiary at or after the age established by the Committee from time to
time for purposes of the Plan, or earlier in any particular case with the
consent of the Committee.
"Shares" shall mean the authorized shares of common stock of the Company.
"Stock Option Agreement" shall mean the Stock Option Agreement
substantially in the form set out in Appendix A to the Plan, as such agreement
may be amended by the Committee from time to time.
"Subscription Price" shall mean the price payable for a Share on the
exercise of an Option, as determined in accordance with Article VI herein and as
it may be adjusted pursuant to section 4.2 hereof.
"Subsidiary" shall mean any corporation which at the time qualifies as
subsidiary of the Company under the definition of "subsidiary corporation" in
Section 424(f) of the Internal Revenue of Code of 1986, as amended.
"Termination Date" shall mean the first to occur of the dates described in
Article VIII hereof.
-5-
<PAGE>
ARTICLE II
GENERAL
2.1. The purpose of the Plan is to advance the interest of the Company and
its shareholders by affording to Qualified Persons an opportunity to acquire or
increase their proprietary interest in the Company by the grant to such
Qualified Persons of Options. By thus encouraging such Qualified Persons to
become owners of the common stock of the Company, the Company seeks to motivate,
retain, and attract those highly competent individuals upon whose judgment,
initiative, leadership, and continued efforts the success of the Company in
large measure depends.
2.2. The Company shall pay any and all fees and expenses incurred in
connection with the exercise of any Options hereunder, other than the
Subscription Price, and federal, state or local taxes incident to the exercise
of Options and any professional fees incurred by Option Holders in connection
with the exercise of Options.
ARTICLE III
ADMINISTRATION OF PLAN
3.1. The Plan shall be administered by the Board of Directors. The Board of
Directors may at its discretion grant an Option to any Qualified Person (other
than an Independent Director) on the terms set forth herein in respect of the
number of Option Shares that the Board of Directors shall specify.
3.2. Subject to the limitations contained in Article IV hereof and except
as provided in Section 5.1 hereof, the total
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<PAGE>
number of Option Shares for which any Options may be granted shall be such
number as determined by the Committee.
3.3. Subject to the express provisions of the Plan, the Board of Directors
shall also have complete authority to interpret the Plan, to prescribe, amend,
and rescind rules and regulations relating to it, to determine the details and
provisions of each Option, and to make all other determinations necessary or
advisable in the administration of the Plan.
ARTICLE IV
LIMITATIONS
4.1. Subject to adjustment pursuant to the provisions of Section 4.2
hereof, the total number of Shares which may be issued and sold hereunder shall
not exceed five hundred thousand (500,000) Shares.
4.2. If and to the extent that the Shares shall be increased or reduced by
reason of a recapitalization, a reclassification, a distribution or a dividend
payable in stock, a rights issue, a sub-division or consolidation of Shares or
an increase or reduction of capital, then the number of Shares subject to
Options, the Subscription Price per Share and the number of Shares subject to
the Plan shall be proportionately adjusted. If the Company is reorganized or
consolidated or merged with another entity, each Option Holder shall be entitled
to receive an Option in exchange for each Option then held by such Option
Holder, but only if such Option has not terminated pursuant to Section 8.1 or
8.2 of the Plan and only to the extent such Option has not theretofore been
exercised, covering Shares
-7-
<PAGE>
or such other ownership interest of such reorganized, consolidated, or merged
entity in the same proportion, at an equivalent price and subject to the same
terms and conditions; provided, however, that the issuance of securities by the
Company as consideration for the acquisition by the Company of securities of
another corporation or any other asset shall not be regarded as a circumstance
requiring adjustment.
ARTICLE V
GRANT OF OPTIONS
5.1. (a) (i) Effective as of March 15, 1995, each Independent Director
shall be granted an option for eight thousand (8,000) Option Shares at a
Subscription Price of seven dollars ($7.00). Such Options shall be fully vested
and exercisable upon grant and expire on March 15, 2000.
(ii) On June 3, 1996, and on June 1 (or if such day is not a
Business Day, the Business Day immediately following such day) in each calendar
year thereafter, each Independent Director shall be granted an Option for
sixteen thousand (16,000) Option Shares. Each Option shall automatically be
vested and exercisable in full (subject to termination pursuant to Section 8.2)
one year after the Date of Grant.
(b) Subject to the express provisions of the Plan and the rules of the
Plan, the form, manner of exercise and timing of grants and vesting of Options
and the number of Shares comprised in an Option shall be at the absolute
discretion of the Committee.
-8-
<PAGE>
(c) Each Option granted hereunder (with the exception of the grant of
Options to the Independent Directors pursuant to Section 5.1(a)) shall be
recorded in the minutes of a meeting of or the written consent of the Board of
Directors and evidenced by a Stock Option Agreement dated as of the Date of the
Grant and executed by the Company and the Option Holder, which Stock Option
Agreement shall set forth such terms and conditions as may be determined by the
Board of Directors in its sole discretion consistent with the Plan.
5.2. The terms of any Option granted under the Plan shall include a
provision making such Option nontransferable by the Option Holder (other than by
will or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as amended, or
Title I of the Employee Retirement Income Security Act, or the rules
thereunder).
ARTICLE VI
SUBSCRIPTION PRICE
6.1. The Subscription Price for a Share subject to an option granted
hereunder shall not be less than the Market Value of the Share on the Date of
Grant of the Option. The Subscription Price shall be adjusted pursuant to
Section 4.2 of the Plan. At the time of exercise of the Option by the Option
Holder, the Subscription Price for such Shares shall be paid in full in United
States dollars.
-9-
<PAGE>
ARTICLE VII
RIGHT TO EXERCISE AN OPTION
7.1. Each Option granted pursuant to the Plan shall contain provisions,
established by the Board of Directors (unless established by the Plan), setting
forth the manner of exercise of such Option, the date or dates on which and the
number of Shares for which such Option becomes vested and exercisable, and the
Expiration Date of such Option. In no event, however, shall any Option granted
hereunder be exercisable by its terms after the expiration of ten (10) years
from the Date of Grant thereof.
7.2. With respect to any Option Holder other than an Independent Director,
if the employment of an Option Holder by the Company or any Subsidiary is
terminated (other than by reason of Retirement, death or Disability), each
Option of such Option Holder shall be exercisable prior to its Expiration Date
(subject to Section 8.1 hereof) only if, and only to the extent that, such
Option, in accordance with its terms, is vested and exercisable on the date on
which the employment of such Option Holder by the Company or such Subsidiary is
terminated. Each Option shall automatically be vested and exercisable in full
(subject to termination pursuant to Section 8.1) if the employment of the Option
Holder by the Company or any Subsidiary is terminated by the Company or such
Subsidiary (other than by reason of death or Disability) within six (6) months
after the occurrence of any Change in Control.
7.3. With respect to any Option Holder who is an Independent Director, each
Option shall automatically be vested
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<PAGE>
and exercisable in full (subject to termination pursuant to Section 8.2) if the
Option Holder is removed as a director of the Company (other than by reason of
Disability) within six (6) months after the occurrence of any Change in Control.
ARTICLE VIII
TERMINATION OF OPTION
8.1. Except as otherwise stated herein, each Option held by a Qualified
Person other than an Independent Director shall terminate on the first to occur
of the following dates (the "Termination Date"):
(a) The expiration of thirty (30) calendar days after the date on
which the employment of such Qualified Person by the Company or any
Subsidiary is terminated by the Company or such Subsidiary for cause (which
shall not include Disability), except if such termination occurs within six
(6) months after the occurrence of any Change in Control.
(b) The expiration of ninety (90) calendar days after the date on
which the employment of such Qualified Person by the Company or any
Subsidiary is terminated by such Qualified Person (except if such
termination occurs by reason of Retirement, death or Disability).
(c) The Expiration Date.
The granting of an Option to a Qualified Person does not alter in any way
the existing rights of the Company or any Subsidiary to terminate the employment
of such Qualified Person with or without cause and does not create an actual or
implied contract of employment.
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If an Option is to terminate on either of the dates described in
subsections (a) and (b) of this Section 8.1, the option may be exercised prior
to the Termination Date only if, and only to the extent that, the Option, in
accordance with its terms, is vested and exercisable on the date on which the
employment of the Qualified Person by the Company or any Subsidiary is
terminated.
8.2. Except as otherwise stated herein, each Option held by an Independent
Director shall terminate on the first to occur of the following dates (the
"Termination Date"):
(a) The expiration of thirty (30) calendar days after the date on
which such Independent Director resigns as a director of the Company or the
term of such Independent Director as a director of the Company expires and
such Independent Director is not reelected (in either case, other than by
reason of death or Disability) or after the date on which such Independent
Director is removed as a director of the Company for cause (which shall not
include Disability), except if such termination occurs within six (6)
months after the occurrence of any Change in Control.
(b) The Expiration Date.
If an Option is to terminate pursuant to subsection (a) of this Section
8.2, the Option may be exercised prior to the Termination Date only if, and only
to the extent that, the Option, in accordance with its terms, is vested and
exercisable on the date on which the Independent Director resigns or is
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removed as a director of the Company or the term of such Independent Director
expires.
ARTICLE IX
EXERCISE OF OPTIONS AND SHAREHOLDERS RIGHTS
9.1 An Option may be exercised only for full Shares. No fractional Shares
shall be issued.
9.2 No Option may be exercised in whole or in part and the Company shall
not be required to issue or deliver any certificate evidencing Shares
purchasable upon the exercise of any Option prior to fulfillment of all of the
following conditions:
(a) receipt by the Secretary of the Company from the Option Holder or
his executor or administrator of a written notice of exercise of the Option
specifying the number of Shares for which the Option is to be exercised,
substantially in the form set out as Exhibit 1 to such Option Holder's
Stock Option Agreement, together with full payment of the Subscription
Price per Share in United States dollars for each Share for which the
Option is to be exercised;
(b) if the Option is to be exercised by an executor or administrator
of the Option Holder, receipt by the Secretary of the Company from such
executor or administrator of evidence satisfactory to the Company of such
person's right to exercise the Option;
(c) (i) receipt by the Secretary of the Company from the Option Holder
or his executor or administrator of such documents as the Company shall
deem necessary to determine
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whether registration of the Shares is required under the Securities Act of 1933
or to comply with such act or any other law and (ii) the completion of any such
registration or other qualification of such Shares under any federal or state
law or under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body that the Committee shall in
its sole discretion deem necessary or advisable;
(d) receipt by the Company of any approval or other consent from any
federal, state of foreign governmental agency that the Committee shall in
its sole discretion deem necessary or advisable;
(e) if requested by the Company, receipt by the Secretary of the
Company from the Option Holder or his executor or administrator of a letter
representing that the Shares to be acquired upon exercise of the Option are
to be acquired for the account of the Option Holder or for the account of
his executor or administrator for investment and not with a view to
distribution of such Shares; and
(f) for issuance of certificates evidencing Shares for which the
Option has been exercised, the lapse of such reasonable period of time
following the exercise of the option as the Committee from time to time may
establish for reasons of administrative convenience.
9.3 If notice is duly given of a Resolution for the voluntary winding up of
the Company an Option Holder may forthwith and before the commencement of the
winding-up exercise
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his Option up to the full extent to which it remains vested and unexercised (but
so that such exercise shall be conditional upon such Resolution being passed)
provided that an Option shall not be exercisable later than the Termination
Date.
9.4 No Option Holder shall have any rights as a shareholder with respect to
Shares subject to an Option until the date of exercise of such Option in
accordance with the Plan and the issuance of the Shares for which the Option has
been exercised. All Shares acquired by an Option Holder pursuant to the Plan
shall be subject to the restrictions contained in the Certificate of
Incorporation and Bylaws of the Company, as in effect on the date hereof and as
they may be amended or restated from time to time, and (subject thereto) shall
be effective on the date of issue thereof and rank pari passu with the Shares of
the Company then issued and outstanding (including the right to receive all
dividends or other distributions thereafter declared, paid or made by reference
to a record date falling on or after the date of issue thereof). Except for
adjustments to be made to Options pursuant to the terms of the Plan, no
adjustment shall be made for dividends or other rights that have accrued to
shareholders of the Company prior to the date of issue of such Shares.
ARTICLE X
TERMINATION, AMENDMENT, AND MODIFICATION OF PLAN
10.1. The Board of Directors of the Company may at any time terminate the
Plan and may at any time and from time to time and in any respect amend or
modify the Plan; provided, that no
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termination, amendment, or modification of the Plan shall in any manner affect
any Option theretofore granted under the Plan without the consent of the Option
Holder or (in the event of his death) his executors and administrators and (b)
the provisions of Sections 5.1(a) and 6.1 shall not be amended more than once in
each period of six calendar months from and after the date hereof, other than to
comport with changes in the Internal Revenue Code of 1986, as amended, the
Employee Retirement Income Security Act, or the rules thereunder.
ARTICLE XI
MISCELLANEOUS
11.1. The adoption of the Plan shall not affect any other stock option or
incentive stock option or other compensation plans in effect for the Company or
any Subsidiary, nor shall the Plan preclude the Company or any Subsidiary from
establishing any other forms of incentive or other compensation for employees of
the Company or any Subsidiary.
11.2. The Plan shall be binding upon the successors and assigns of the
Company.
11.3. The place of administration of the Plan shall conclusively be deemed
to be within the Commonwealth of Pennsylvania and the validity, construction,
interpretation, administration, and effect of the Plan and of its rules and
regulations and the rights of any and all personnel having or claiming to have
an interest therein or thereunder shall be governed by and determined
exclusively and solely in accordance with the laws of the State of Delaware.
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11.4. No member of the Board of Directors of the Company shall be liable,
in respect to this Plan, for any act whether of commission or omission taken by
any other member or by any officer, agent, or employee of the Company, any
Subsidiary or any affiliated company, nor, except in circumstances involving his
own bad faith, for anything done or omitted to be done by himself.
ARTICLE XII
EXCHANGE ACT COMPLIANCE
12.1. Notwithstanding anything to the contrary herein, each grant of an
Option to an officer of the Company and the terms of such Option shall be
subject to approval of the Disinterested Administrators, in their sole
discretion.
12.2. With respect to persons who are subject to Section 16 of the Exchange
Act, transactions under the Plan are intended to comply with Rule 16b-3 or its
successor provisions under the Exchange Act. To the extent that any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void to the extent permitted by law and deemed advisable by the Board of
Directors.
Attest: THE MED-DESIGN CORPORATION
By: __________________________ By: __________________________
Joseph N. Bongiovanni, III James M. Donegan
Secretary President/CEO
(SEAL)
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of THE MED-DESIGN CORPORATION AND SUBSIDIARIES (the "Company") on Form S-8 (File
No. - ) of our report, dated March 12, 1999, on our audit of the consolidated
financial statements of the Company as of December 31, 1998 and 1997, and for
each of the two years in the period ended December 31, 1998, which report is
included in the Annual Report on Form 10-KSB. We also consent to the reference
to our firm under the caption "Information Required in the Registration
Statement."
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, PA
April 6, 1999
