1
Registration No. 33-_________
As filed with the Securities and Exchange Commission on September 14, 2001.
Subject to amendment.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
NOVAMETRIX MEDICAL SYSTEMS INC.
(Exact name of issuer as specified in its charter)
DELAWARE 06-0977422
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5 Technology Drive
Wallingford, Connecticut 06492
(Address of principal executive offices)
NOVAMETRIX MEDICAL SYSTEMS INC. NOVAMETRIX MEDICAL SYSTEMS INC.
2000 LONG TERM INCENTIVE PLAN 2000 EXECUTIVE INCENTIVE PLAN
NOVAMETRIX MEDICAL SYSTEMS INC. NOVAMETRIX MEDICAL SYSTEMS INC.
2000 EMPLOYEE STOCK PURCHASE PLAN 1999 INCENTIVE PLAN
(Full title of the plans)
WILLIAM J. LACOURCIERE
Chairman of the Board and
Chief Executive Officer
5 Technology Drive
Wallingford, Connecticut 06492
(203) 265-7701
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copy to:
THOMAS M. HAYTHE, ESQ. JOHN J. BUTLER, ESQ.
General Counsel Torys
Novametrix Medical Systems Inc. 237 Park Avenue
90 Park Avenue New York, New York l0017
New York, New York 10016 Telephone: (212) 880-6000
Telephone: (212) 210-9583
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the
Registration Statement becomes effective.
2
CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed
Title of securities Amount to be offering price per maximum aggregate Amount of
to be registered registered share* offering price* registration fee
- ------------------- ---------------- ------------------ ----------------- ----------------
Common Stock 1,225,000 shares $5.57 $6,823,250.00 $1,705.81
($.01 par value)
*Estimated solely for purposes of calculating the registration fee on the basis
of the average of the high and low prices of the Common Stock on September 7,
2001, as reported on the National Association of Securities Dealers National
Market System.
- 2 -
3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Company hereby states that (i) the documents listed in (a)
through (c) below are incorporated by reference in this Registration Statement
and (ii) all documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents.
(a) Annual Report on Form 10-K for the year ended April 29, 2001.
(b) Quarterly Report on Form 10-Q for the quarter ended July 29,
2001.
(c) Description of the Common Stock in the Company's Registration
Statement on Form 10 dated July 24, 1979.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the Common Stock in this offering will be passed
upon for the Company by Torys, New York, New York. As of the date of this
Registration Statement, individual attorneys of Torys beneficially own an
aggregate of approximately 70,000 shares of the Common Stock.
Item 6. Indemnification of Directors and Officers.
Article Seven of the Company's Certificate of Incorporation provides
that the Company shall indemnify and hold harmless any director or officer of
the Company from and against any and all expenses and liabilities that may be
imposed upon or incurred by him in connection with, or as a result of, any
proceeding in which he may become involved, as a party or otherwise, by reason
of the fact that he is or was such a director or officer of the Company, whether
or not he continues to be such at the time such expenses and liabilities shall
have been imposed or incurred, under certain prescribed circumstances and
subject to the laws of the State of Delaware.
The Company's Certificate of Incorporation contains a provision
which eliminates the personal liability of a director of the Company to the
Company or to any of its stockholders for monetary damages for a breach of his
fiduciary duty as a director, except in the case where the director breached his
duty of loyalty, failed to act in good faith, engaged in
- 3 -
4
intentional misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a stock repurchase in violation of Delaware corporate law,
or obtained an improper personal benefit.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Exhibits required to be filed as part of this Registration
Statement are listed in the attached Index to Exhibits.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes, except as otherwise
specifically provided in the rules of the Securities and Exchange Commission
promulgated under the Securities Act of 1933:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement;
(iii) 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 paragraphs (1)(i) and (1)(ii) do not apply if this
Registration Statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report
- 4 -
5
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
- 5 -
6
POWER OF ATTORNEY
The Registrant and each person whose signature appears below hereby
appoints William J. Lacourciere, Thomas M. Patton and Joseph A. Vincent as
attorneys-in-fact with full power of substitution, severally, to execute in the
name and on behalf of the Registrant and each such person, individually and in
each capacity stated below, one or more post-effective amendments to this
Registration Statement as the attorney-in-fact acting in the premises deems
appropriate and to file any such amendment to this Registration Statement with
the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, 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 Town of Wallingford and State of Connecticut on the 10th day
of September, 2001.
NOVAMETRIX MEDICAL SYSTEMS INC.
By /s/ William J. Lacourciere
-----------------------------------
William J. Lacourciere
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ William J. Lacourciere Chairman of the Board, September 10, 2001
- -------------------------------- Chief Executive Officer and
William J. Lacourciere Director
/s/ Joseph A. Vincent Executive Vice President and September 10, 2001
- -------------------------------- Chief Financial Officer
Joseph A. Vincent
Director September , 2001
- --------------------------------
Paul A. Cote
- 6 -
7
Signature Title Date
--------- ----- ----
/s/ Vartan Ghugasian Director September 10, 2001
- --------------------------------
Vartan Ghugasian
/s/ Thomas M. Haythe Director September 10, 2001
- --------------------------------
Thomas M. Haythe
/s/ John P. Mahoney Director September 10, 2001
- --------------------------------
John P. Mahoney
/s/ Photios T. Paulson Director September 10, 2001
- --------------------------------
Photios T. Paulson
Director September , 2001
- --------------------------------
Steven J. Shulman
- 7 -
8
CONSENT OF COUNSEL
The consent of Torys is contained in their opinion filed as Exhibit
5 to this Registration Statement.
- 8 -
9
Exhibit 23(i)
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Novametrix Medical Systems Inc. 2000 Long
Term Incentive Plan, the Novametrix Medical Systems Inc. 2000 Executive
Incentive Plan, the Novametrix Medical Systems Inc. 2000 Employee Stock Purchase
Plan, and the Novametrix Medical Systems Inc. 1999 Incentive Plan of our report
dated June 18, 2001, with respect to the consolidated financial statements and
schedule of Novametrix Medical Systems Inc. included in its Annual Report (Form
10-K) for the year ended April 29, 2001, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Hartford, Connecticut
September 10, 2001
- 9 -
10
INDEX TO EXHIBITS
Number Description of Exhibit Page
- ------ ---------------------- ----
4(i) - Novametrix Medical Systems Inc. E-1
2000 Long Term Incentive Plan
4(ii) - Novametrix Medical Systems Inc. E-14
2000 Employee Stock Purchase Plan
4(iii) - Novametrix Medical Systems Inc. E-20
2000 Executive Incentive Plan
4(iv) - Novametrix Medical Systems Inc. E-29
1999 Incentive Plan
5 - Opinion of Torys E-41
23(i) - Consent of Ernst & Young LLP (See --
"Consent of Ernst & Young LLP,
Independent Auditors" in the
Registration Statement
23(ii) - Consent of Torys --
(Contained in Exhibit 5)
24 - Power of Attorney (See "Power --
of Attorney" in the Registration
Statement)
- 10 -
11
Exhibit 4(i)
NOVAMETRIX MEDICAL SYSTEMS INC.
2000 LONG TERM INCENTIVE PLAN
SECTION 1. Purpose. The purposes of this Novametrix Medical Systems
Inc. 2000 Long Term Incentive Plan (the "Plan") are to encourage selected
employees, officers, directors and consultants of, and other individuals
providing services to, Novametrix Medical Systems Inc. (together with any
successor thereto, the "Company") and its Affiliates (as defined below) to
acquire a proprietary interest in the growth and performance of the Company, to
generate an increased incentive to contribute to the Company's future success
and prosperity thus enhancing the value of the Company for the benefit of its
shareholders, and to enhance the ability of the Company and its Affiliates to
attract and retain exceptionally qualified individuals upon whom, in large
measure, the sustained progress, growth and profitability of the Company depend.
SECTION 2. Definitions. As used in the Plan, the following terms
shall have the meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or through one
or more intermediaries, is controlled by the Company and (ii) any entity in
which the Company has a significant equity interest, as determined by the
Committee.
"Award" shall mean any Option, Restricted Security, Performance
Award, or Other Stock-Based Award granted under the Plan.
"Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the Plan.
"Board" shall mean the Board of Directors of the Company.
"Cause", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an Affiliate
of the Company which agreement includes a definition of "cause," "cause" as
defined in such agreement or, if such agreement contains no such definition, a
material breach by the Participant of such agreement, or (ii) with respect to
any other Participant, the failure to perform adequately in carrying out such
Participant's employment responsibilities, including any directives from the
Board, or engaging in such behavior in his personal or business life as to lead
the Committee in its reasonable judgment to determine that it is in the best
interests of the Company to terminate his employment.
"Common Stock" shall mean the common stock of the Company, $.01 par
value.
E-1
12
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder.
"Committee" shall mean the Stock Option Committee or any other
committee of the Board designated by the Board to administer the Plan and
composed of not less than three non-employee directors.
"Common Shares" shall mean any or all, as applicable, of the Common
Stock and such other securities or property as may become the subject of Awards,
or become subject to Awards, pursuant to an adjustment made under Section 4(b)
of the Plan and any other securities of the Company or any Affiliate or any
successor that may be so designated by the Committee.
"Employee" shall mean any employee of the Company or of any
Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean (A) with respect to any property
other than the Common Shares, the fair market value of such property determined
by such methods or procedures as shall be established from time to time by the
Committee; and (B) with respect to the Common Shares, the last sale price
regular way on the date of reference, or, in case no sale takes place on such
date, the average of the high bid and low asked prices, in either case on the
principal national securities exchange on which the Common Shares are listed or
admitted to trading, or if the Common Shares are not listed or admitted to
trading on any national securities exchange, the last sale price reported on the
National Market System of the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") on such date, or the average of the
closing high bid and low asked prices in the over-the-counter market reported on
NASDAQ on such date, whichever is applicable, or if there are no such prices
reported on NASDAQ on such date, as furnished to the Committee by any New York
Stock Exchange member selected from time to time by the Committee for such
purpose. If there is no bid or asked price reported on any such date, the Fair
Market Value shall be determined by the Committee in accordance with the
regulations promulgated under Section 2031 of the Code, or by any other
appropriate method selected by the Committee.
"Good Reason", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an Affiliate
of the Company, "good reason" as defined in such written agreement or, if such
agreement contains no such definition, a material breach by the Company of such
agreement, or (ii) with respect to any other Participant, a failure by the
Company to pay such Participant any amount otherwise vested and due and a
continuation of such failure for 30 business days following notice to the
Company thereof.
"Incentive Stock Option" shall mean an option granted under Section
6(a) of the Plan that is intended to meet the requirements of Section 422 of the
Code or any successor provision thereto.
E-2
13
"Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.
Any stock option granted by the Committee which is not designated an Incentive
Stock Option shall be deemed a Non-Qualified Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
"Other Stock-Based Award" shall mean any right granted under Section
6(d) of the Plan.
"Participant" shall mean any individual granted an Award under the
Plan.
"Performance Award" shall mean any right granted under Section 6(c)
of the Plan.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
"Released Securities" shall mean securities that were Restricted
Securities but with respect to which all applicable restrictions have expired,
lapsed or been waived in accordance with the terms of the Plan or the applicable
Award Agreement.
"Restricted Securities" shall mean any Common Shares granted under
Section 6(b) of the Plan, any right granted under Section 6(b) of the Plan that
is denominated in Common Shares or any other Award under which issued and
outstanding Common Shares are held subject to certain restrictions.
"Rule 16a-1" and "Rule 16b-3" shall mean, respectively, Rule 16a-1
and Rule 16b-3 promulgated by the Securities and Exchange Commission under the
Exchange Act, or any successor rule or regulation thereto as in effect from time
to time.
"Securities Act" shall mean the Securities Act of 1933, as amended.
SECTION 3. Administration. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to an
eligible Employee or other individual under the Plan; (iii) determine the number
and classification of Common Shares to be covered by (or with respect to which
payments, rights or other matters are to be calculated in connection with)
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Common Shares, other securities, other Awards or other
property, or canceled, forfeited or suspended, and the method or methods by
which Awards may be settled, exercised, canceled, forfeited or suspended; (vi)
determine requirements for the vesting of Awards or performance criteria to be
achieved in order for Awards to vest; (vii) determine whether, to what extent
and under what
E-3
14
circumstances cash, Common Shares, other securities, other Awards, other
property and other amounts payable with respect to an Award under the Plan shall
be deferred either automatically or at the election of the holder thereof or of
the Committee; (viii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (ix) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (x) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan. Unless otherwise expressly
provided in the Plan, all designations, determinations, interpretations and
other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon all Persons, including the Company, any
Affiliate, any Participant, any holder or beneficiary of any Award, any
shareholder and any Employee. Notwithstanding the foregoing, the maximum number
of Awards which may be granted to any one Participant under this Plan in any
one-year period shall not exceed 100,000 Common Shares, subject to the
adjustments provided in Section 4(b) hereof and no Awards under this Plan shall
be granted after September 31, 2010.
SECTION 4. Common Shares Available for Awards.
(a) Common Shares Available. Subject to adjustment as provided in
Section 4(b):
(i) Calculation of Number of Common Shares Available. The
number of Common Shares available for granting Awards under the Plan shall
be 650,000, any or all of which may be based on Common Stock, any other
security which becomes the subject of Awards, or any combination thereof.
Initially 650,000 shares of Common Stock shall be reserved for Awards
hereunder. Further, if, after the effective date of the Plan, any Common
Shares covered by an Award granted under the Plan or to which such an
Award relates, are forfeited, or if an Award otherwise terminates or is
canceled without the delivery of Common Shares or of other consideration,
then the Common Shares covered by such Award or to which such Award
relates, or the number of Common Shares otherwise counted against the
aggregate number of Common Shares available under the Plan with respect to
such Award, to the extent of any such forfeiture, termination or
cancellation, shall again be, or shall become, available for granting
Awards under the Plan.
(ii) Sources of Common Shares Deliverable Under Awards. Any
Common Shares delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Common Shares or of treasury Common
Shares.
(b) Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Common
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Common Shares or other securities of the
Company, issuance of warrants or other rights to purchase Common Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Common Shares such that an adjustment is determined by the Committee
to be
E-4
15
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of Common Shares (or other securities or property) which
thereafter may be made the subject of Awards, (ii) the number and kind of Common
Shares (or other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any Award or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Award; provided, however, that the number of Common Shares subject to any Award
denominated in Common Shares shall always be a whole number.
In connection with any merger or consolidation which results in the
holders of the outstanding voting securities of the Company (determined
immediately prior to such merger or consolidation) owning directly or indirectly
less than a majority of the outstanding voting securities of the surviving
corporation (determined immediately following such merger or consolidation), or
any sale or transfer by the Company of all or substantially all its assets or
any tender offer or exchange offer for or the acquisition, directly or
indirectly, by any person or group of all or a majority of the then outstanding
voting securities of the Company, all outstanding Options under the Plan shall
become exercisable in full, notwithstanding any other provision of the Plan or
of any outstanding Options granted thereunder, on and after (i) the fifteenth
day prior to the effective date of such merger, consolidation, sale, transfer or
acquisition or (ii) the date of commencement of such tender offer or exchange
offer, as the case may be. The provisions of the foregoing sentence shall apply
to any outstanding Options which are Incentive Stock Options to the extent
permitted by Section 422(d) of the Code and such outstanding Options in excess
thereof shall, immediately upon the occurrence of the event described in clause
(i) or (ii) of the foregoing sentence, be treated for all purposes of the Plan
as Non-Qualified Stock Options and shall be immediately exercisable as such as
provided in the foregoing sentence.
SECTION 5. Eligibility. Any Employee, including any officer or
employee-director of the Company or of any Affiliate, and any consultant of, or
other individual providing services to, the Company or any Affiliate shall be
eligible to be designated a Participant. A non-employee director shall be
eligible to receive Non-Qualified Stock Options under the Plan.
SECTION 6. Awards.
(a) Options. The Committee is hereby authorized to grant to
eligible individuals options to purchase Common Shares (each, an "Option") which
shall contain the following terms and conditions and with such additional terms
and conditions, in either case not inconsistent with the provisions of the Plan,
as the Committee shall determine:
(i) Exercise Price. The purchase price per Common Share
purchasable under an Option shall be determined by the Committee;
provided, however, that such purchase price shall not be less than one
hundred percent (100%) of the Fair Market Value of a Common Share on the
date of grant of such Option, or such other price as required under
Subsection 6(a)(iv) hereof.
E-5
16
(ii) Time and Method of Exercise. Subject to the terms of
Section 6(a)(iii), the Committee shall determine the time or times at
which an Option may be exercised in whole or in part, and the method or
methods by which, and the form or forms (including, without limitation,
cash, Common Shares, outstanding Awards, or other property, or any
combination thereof, having a Fair Market Value on the exercise date equal
to the relevant exercise price) in which, payment of the exercise price
with respect thereto may be made or deemed to have been made.
(iii) Exercisability Upon Death, Retirement and Termination of
Employment. Subject to the condition that no Option may be exercised in
whole or in part after the expiration of the Option period specified in
the applicable Award Agreement:
(A) Subject to the terms of paragraph (D) below, upon the
death of a Participant while employed or within 3 months of
retirement or disability as defined in paragraph (B) below, the
Person or Persons to whom such Participant's rights with respect to
any Option held by such Participant are transferred by will or the
laws of descent and distribution may, prior to the expiration of the
earlier of: (1) the outside exercise date determined by the
Committee at the time of granting the Option, or (2) nine months
after such Participant's death, purchase any or all of the Common
Shares with respect to which such Participant was entitled to
exercise such Option immediately prior to such Participant's death,
and any Options not so exercisable will lapse on the date of such
Participant's death;
(B) Subject to the terms of paragraph (D) below, upon
termination of a Participant's employment with the Company (x) as a
result of retirement pursuant to a retirement plan of the Company or
an Affiliate or disability (as determined by the Committee) of such
Participant, (y) by the Company other than for Cause, or (z) by the
Participant with Good Reason, such Participant may, prior to the
expiration of the earlier of: (1) the outside exercise date
determined by the Committee at the time of granting the Option, or
(2) three months after the date of such termination, purchase any or
all of the Common Shares with respect to which such Participant was
entitled to exercise any Options immediately prior to such
termination, and any Options not so exercisable will lapse on such
date of termination;
(C) Subject to the terms of paragraph (D) below, upon
termination of a Participant's employment with the Company under any
circumstances not described in paragraphs (A) or (B) above, such
Participant's Options shall be canceled to the extent not
theretofore exercised;
(D) Upon (i) the death of the Participant, or (ii) termination
of the Participant's employment with the Company (x) by the Company
other than for Cause (y) by the Participant with Good Reason or (z)
as a result of retirement or disability as defined in paragraph (B)
above, the Company shall have the right to cancel all of the Options
such Participant was entitled to exercise at the time
E-6
17
of such death or termination (subject to the terms of paragraphs (A)
or (B) above) for a payment in cash equal to the excess, if any, of
the Fair Market Value of one Common Share on the date of death or
termination over the exercise price of such Option for one Common
Share times the number of Common Shares subject to the Option and
exercisable at the time of such death or termination; and
(E) Upon expiration of the respective periods set forth in
each of paragraphs (A) through (C) above, the Options of a
Participant who has died or whose employment has been terminated
shall be canceled to the extent not theretofore canceled or
exercised.
(F) For purposes of paragraphs (A) through (D) above, the
period of service of an individual as a director or consultant of
the Company or an Affiliate shall be deemed the period of
employment.
(iv) Incentive Stock Options. The following provisions shall
apply only to Incentive Stock Options granted under the Plan:
(A) No Incentive Stock Option shall be granted to any eligible
Employee who, at the time such Option is granted, owns securities
possessing more than ten percent (10%) of the total combined voting
power of all classes of securities of the Company or of any
Affiliate, except that such an Option may be granted to such an
Employee if at the time the Option is granted the option price is at
least one hundred ten percent (110%) of the Fair Market Value of the
Common Shares (determined in accordance with Section 2) subject to
the Option, and the Option by its terms is not exercisable after the
expiration of five (5) years from the date the Option is granted;
and
(B) To the extent that the aggregate Fair Market Value of the
Common Shares with respect to which Incentive Stock Options (without
regard to this subsection) are exercisable for the first time by any
individual during any calendar year (under all plans of the Company
and its Affiliates) exceeds $100,000, such Options shall be treated
as Non-Qualified Stock Options. This subsection shall be applied by
taking Options into account in the order in which they were granted.
If some but not all Options granted on any one day are subject to
this subsection, then such Options shall be apportioned between
Incentive Stock Option and Non-Qualified Stock Option treatment in
such manner as the Committee shall determine. For purposes of this
subsection, the Fair Market Value of any Common Shares shall be
determined, in accordance with Section 2, as of the date the Option
with respect to such Common Shares is granted.
(b) Restricted Securities.
(i) Issuance. The Committee is hereby authorized to grant to
eligible Employees "Restricted Securities" which shall consist of the
right to receive,
E-7
18
by purchase or otherwise, Common Shares which are subject to such
restrictions as the Committee may impose (including, without limitation,
any limitation on the right to vote such Common Shares or the right to
receive any dividend or other right or property), which restrictions may
lapse separately or in combination at such time or times, in such
installments or otherwise, as the Committee may deem appropriate.
(ii) Registration. Restricted Securities granted under the
Plan may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry registration or
issuance of a stock certificate or certificates. In the event any stock
certificate is issued in respect of Restricted Securities granted under
the Plan, such certificate shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted Securities.
(iii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of a Participant's employment for any reason
during the applicable restriction period, all of such Participant's
Restricted Securities which had not become Released Securities by the date
of termination of employment shall be forfeited and reacquired by the
Company; provided, however, that the Committee may, when it finds that a
waiver would be in the best interests of the Company, waive in whole or in
part any or all remaining restrictions with respect to such Participant's
Restricted Securities. Unrestricted Common Shares, evidenced in such
manner as the Committee shall deem appropriate, shall be issued to the
holder of Restricted Securities promptly after such Restricted Securities
become Released Securities.
(c) Performance Awards. The Committee is hereby authorized to
grant to eligible Employees "Performance Awards." Each Performance Award shall
consist of a right, (i) denominated or payable in cash, Common Shares, other
securities or other property (including, without limitation, Restricted
Securities), and (ii) which shall confer on the holder thereof rights valued as
determined by the Committee and payable to, or exercisable by, the holder of the
Performance Award, in whole or in part, upon the achievement of such performance
goals during such performance periods as the Committee shall establish. Subject
to the terms of the Plan and any applicable Award Agreement, the performance
9goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award granted, the termination
of a Participant's employment and the amount of any payment or transfer to be
made pursuant to any Performance Award shall be determined by the Committee and
by the other terms and conditions of any Performance Award. The Committee shall
issue performance goals prior to the commencement of the performance period to
which such performance goals pertain.
(d) Other Stock-Based Awards. The Committee is hereby authorized
to grant to eligible Employees "Other Stock-Based Awards." Each Other
Stock-Based Award shall consist of a right (i) which is other than an Award or
right described in Section 6(a), (b) or (c) above and (ii) which is denominated
or payable in, valued in whole or in part by reference to, or otherwise based on
or related to, Common Shares (including, without limitation, securities
convertible into Common Shares) as are deemed by the Committee to be consistent
with the purposes of the Plan; provided, however, that such right shall comply,
to the
E-8
19
extent deemed desirable by the Committee, with Rule 16b-3 and applicable law.
Subject to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine the terms and conditions of Other Stock-Based Awards.
Common Shares or other securities delivered pursuant to a purchase right granted
under this Section 6(d) shall be purchased for such consideration, which may be
paid by such method or methods and in such form or forms, including, without
limitation, cash, Common Shares, other securities, other Awards, other property,
or any combination thereof, as the Committee shall determine.
(e) General.
(i) No Cash Consideration for Awards. Awards may be granted
for no cash consideration or for such minimal cash consideration as may be
required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards
may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for any other Award,
except that in no event shall an Incentive Stock Option be granted
together with a Non-Qualified Stock Option in such a manner that the
exercise of one Option affects the right to exercise the other. Awards
granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such
other awards.
(iii) Forms of Payment Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers to
be made by the Company or an Affiliate upon the grant, exercise or payment
of an Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Common Shares, other
securities, other Awards, or other property, or any combination thereof,
and may be made in a single payment or transfer, in installments, or on a
deferred basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments. In accordance with the
above, the Committee may elect (i) to pay a Participant (or such
Participant's permitted transferee) upon the exercise of an Option in
whole or in part, in lieu of the exercise thereof and the delivery of
Common Shares thereunder, an amount of cash equal to the excess, if any,
of the Fair Market Value of one Common Share on the date of such exercise
over the exercise price of such Option for one Common Share times the
number of Common Shares subject to the Option or portion thereof so
exercised or (ii) to settle other stock denominated Awards in cash.
(iv) Limits on Transfer of Awards.
(A) Unless otherwise authorized by the Committee, no award
(other than Released Securities), and no right under any such Award,
may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant otherwise than by will or
by the laws of descent and distribution (or, in the case of
Restricted Securities, to the Company) and any such purported
assignment, alienation, pledge, attachment, sale or other transfer
or
E-9
20
encumbrance shall be void and unenforceable against the Company or
any Affiliate.
(B) Each award, and each right under any Award, shall be
exercisable during the Participant's lifetime only by the
Participant or, if permissible under applicable law, by the
Participant's guardian or legal representative.
(v) Terms of Awards. The term of each Award shall be for
such period as may be determined by the Committee; provided, however, that
in no event shall the term of any Option exceed a period of ten years from
the date of its grant.
(vi) Rule 16b-3 Six-Month Limitations. To the extent required
in order to maintain the exemption provided under Rule 16b-3 only, any
equity security offered pursuant to the Plan must be held for at least six
months after the date of grant, and with respect to any derivative
security issued pursuant to the Plan, at least six months must elapse from
the date of acquisition of such derivative security to the date of
disposition of the derivative security (other than upon exercise or
conversion) or its underlying equity security. Terms used in the preceding
sentence shall, for the purposes of such sentence only, have the meanings,
if any, assigned or attributed to them under Rule 16b-3.
(vii) Common Share Certificates. All certificates for Common
Shares delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Common Shares are then
listed, and any applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.
(viii) Delivery of Common Shares or Other Securities and
Payment by Participant of Consideration. No Common Shares or other
securities shall be delivered pursuant to any Award until payment in full
of any amount required to be paid pursuant to the Plan or the applicable
Award Agreement is received by the Company. Such payment may be made by
such method or methods and in such form or forms as the Committee shall
determine, including, without limitation, cash, Common Shares, other
securities, other Awards or other property, or any combination thereof;
provided that the combined value, as determined by the Committee, of all
cash and cash equivalents and the Fair Market Value of any such Common
Shares or other property so tendered to the Company, as of the date of
such tender, is at least equal to the full amount required to be paid
pursuant to the Plan or the applicable Award Agreement to the Company.
SECTION 7. Amendments; Adjustments and Termination. Except to the
extent prohibited by applicable law and unless otherwise expressly provided in
an Award Agreement or in the Plan:
E-10
21
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any shareholder,
Participant, other holder or beneficiary of an Award, or other Person; provided,
however, that, subject to the Company's rights to adjust Awards under Sections
7(c) and (d), any amendment, alteration, suspension, discontinuation, or
termination that would impair the rights of any Participant, or any other holder
or beneficiary of any Award theretofore granted, shall not to that extent be
effective without the consent of such Participant, other holder or beneficiary
of an Award, as the case may be; and provided further, however, that
notwithstanding any other provision of the Plan or any Award Agreement, without
the approval of the shareholders of the Company no such amendment, alteration,
suspension, discontinuation, or termination shall be made that would:
(i) increase the total number of Common Shares available for
Awards under the Plan, except as provided in Section 4 hereof; or
(ii) otherwise cause the Plan to cease to comply with any tax
or regulatory requirement, including for these purposes any approval or
other requirement which is or would be a prerequisite for exemptive relief
from Section 16(b) of the Exchange Act.
(b) Amendments to Awards. The Committee may waive any conditions
or rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively;
provided, however, that, subject to the Company's rights to adjust Awards under
Sections 7(c) and (d), any amendment, alteration, suspension, discontinuation,
cancellation or termination that would impair the rights of any Participant or
holder or beneficiary of any Award theretofore granted, shall not to that extent
be effective without the consent of such Participant or holder or beneficiary of
an Award, as the case may be.
(c) Adjustment of Awards Upon Certain Acquisitions. In the event
the Company or any Affiliate shall assume outstanding employee awards or the
right or obligation to make future such awards in connection with the
acquisition of another business or another corporation or business entity, the
Committee may make such adjustments, not inconsistent with the terms of the
Plan, in the terms of Awards as it shall deem appropriate in order to achieve
reasonable comparability or other equitable relationship between the assumed
awards and the Awards granted under the Plan as so adjusted.
(d) Adjustments of Awards Upon the Occurrence of Certain Unusual
or Nonrecurring Events. The Committee is hereby authorized to make adjustments
in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or non-recurring events (including, without limitation,
the events described in Section 4(b) hereof) affecting the Company, any
Affiliate, or the financial statements of the Company or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan.
E-11
22
SECTION 8. General Provisions.
(a) No Right to Awards. No Employee or other Person shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Employees, or holders or beneficiaries of Awards
under the Plan. The terms and conditions of Awards need not be the same with
respect to each recipient.
(b) Delegation. Subject to the terms of the Plan and applicable
law, the Committee may delegate to one or more officers or managers of the
Company or any Affiliate, or to a committee of such officers or managers, the
authority, subject to such terms and limitations as the Committee shall
determine, to grant Awards to, or to cancel, modify, waive rights with respect
to, alter, discontinue, suspend, or terminate Awards; provided, however, that,
no such delegation shall be permitted with respect to Awards held by Employees
who are officers or directors of the Company for purposes of Section 16 of the
Exchange Act, or any successor section thereto or who are otherwise subject to
such Section.
(c) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.
(d) Withholding. The Company or any Affiliate shall be authorized
to withhold from any Award granted, from any payment due or transfer made under
any Award or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Common Shares, other securities, other Awards,
or other property) of withholding taxes due in respect of an Award, its
exercise, or any payment or transfer under such Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company or
Affiliate to satisfy all obligations for the payment of such taxes.
(e) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(f) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any liability, or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(g) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable Federal law.
(h) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or as to any Person or Award under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform to applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the
E-12
23
Plan or the Award, such provision shall be stricken as to such jurisdiction,
Person or Award and the remainder of the Plan and any such Award shall remain in
full force and effect.
(i) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(j) No Fractional Common Shares. No fractional Common Shares shall
be issued or delivered pursuant to the Plan or any Award, and the Committee
shall determine whether cash, other securities, or other property shall be paid
or transferred in lieu of any fractional Common Shares or whether such
fractional Common Shares or any rights thereto shall be canceled, terminated, or
otherwise eliminated.
(k) Headings. Headings are given to the Sections and subsections
of the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 9. Adoption, Approval and Effective Date of the Plan. The
Plan shall be considered adopted and shall become effective on the date the Plan
is approved by the Board; provided, however, that the Plan and any Awards
granted under the Plan shall be void, if the shareholders of the Company shall
not have approved the adoption of the Plan within twelve (12) months after the
effective date, by a majority of votes cast thereon at a meeting of shareholders
duly called and held for such purpose.
E-13
24
EXHIBIT 4(ii)
NOVAMETRIX MEDICAL SYSTEMS INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Novametrix Medical Systems Inc.
Employee Stock Purchase Plan is to enable and encourage employees of the Company
and its Subsidiaries to acquire the Company's Common Stock through payroll
deductions to enable them to share in the economic prosperity of the Company.
2. Definitions.
2.1 "Board" shall mean the Board of Directors of the
Company.
2.2 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
2.3 "Committee" shall mean the Stock Option Committee of the
Board.
2.4 "Common Stock" shall mean shares of the Company's Common
Stock, $.01 par value.
2.5 "Company" shall mean Novametrix Medical Systems Inc., a
Delaware corporation.
2.6 "Compensation" shall mean the amount received by an
Employee from the Company or a Subsidiary as salary or wages, but excluding (a)
overtime pay, (b) bonuses, (c) sick pay, (d) contributions by the Company or any
Subsidiary to any employee benefit plan of the Company or any Subsidiary and (e)
compensation attributable to the exercise of stock options.
2.7 "Eligible Employees" shall mean only those persons who
on an Offering Date (a) are Employees and (b) who are not deemed for purposes of
Section 423(b)(3) of the Code to own stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or of any
Parent or Subsidiary.
2.8 "Employees" shall mean all persons employed by the
Company or any Subsidiary, excluding persons (a) employed less than six (6)
months, or (b) whose customary employment is 20 hours or less per calendar week
or (c) whose customary employment is for not more than five months per calendar
year.
2.9 "Exercise Date" shall mean the last business day of each
Offering Period.
2.10 "Fair Market Value" shall mean the last sale price
regular way on the date of reference, or, in case no sale takes place on such
date, the average of the closing high bid and low asked prices regular way, in
either case on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if the Common Stock is not listed or
admitted to trading on any national securities exchange, the last sale price
E-14
25
reported on the National Market System of the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") on such date, or the last sale
price reported on the NASDAQ SmallCap Market on such date, or the average of the
closing high bid and low asked prices in the over-the-counter market on such
date, whichever is applicable, or if there are no such prices reported on NASDAQ
or in the over-the-counter market on such date, as furnished to the Committee by
any New York Stock Exchange member selected from time to time by the Committee
for such purpose. If there is no bid or asked price reported on any such date,
the Fair Market Value shall be determined by the Committee in accordance with
the regulations promulgated under Section 2031 of the Code, or by any other
appropriate method selected by the Committee.
2.11 "Initial Offering Period" shall mean the period
commencing on such date as shall be designated by the Committee (but no earlier
than July 1, 2000) and ending on the next June 30 or December 31, whichever is
sooner.
2.12 "Normal Offering Period" shall mean the periods
commencing January 1 and July 1 of each Plan Year and ending, respectively, on
June 30 and December 31 of the same Plan Year. The first Normal Offering Period
shall commence on the first business day following the end of the Initial
Offering Period.
2.13 "Offering" shall mean the offering of shares of Common
Stock to Participants pursuant to the Plan that occurs on each Offering Date.
2.14 "Offering Date" shall mean the first business day of
each Offering Period.
2.15 "Parent" shall mean any parent corporation of the
Company within the meaning of Section 424(e) of the Code.
2.16 "Participant" shall mean an Eligible Employee who elects
to participate in the Plan and gives notice to the Company of such election in
accordance with Section 5 hereof.
2.17 "Plan" shall mean the Novametrix Medical Systems Inc.
2000 Employee Stock Purchase Plan as set forth herein.
2.18 "Plan Year" shall mean the period commencing with the
first day of the Initial Offering Period and ending on the next December 31 and,
thereafter, each succeeding calendar year that the Plan is in effect.
2.19 "Purchase Price" shall mean the cost of Common Stock
acquired pursuant to the Plan as determined under Section 9 hereof.
2.20 "Rules" shall mean the rules for administering the Plan
adopted pursuant to Section 19 hereof.
2.21 "Stock Purchase Account" shall mean the record of
payments made by a Participant in accordance with Section 6 hereof which is
required to be maintained in accordance with Section 7 hereof.
E-15
26
2.22 "Subsidiary" shall mean any subsidiary corporation of the
Company within the meaning of Section 424(f) of the Code.
3. Shares Offered Pursuant to the Plan. The number of shares of
Common Stock which may be offered under the Plan shall not exceed 100,000,
subject to adjustment in accordance with Section 21 hereof. Such shares may be
authorized but unissued shares, previously issued shares reacquired by the
Company, or any combination thereof.
4. Shares Purchased By Participants. Each Participant on an Offering
Date shall be entitled to purchase from the Company, in the manner and on the
terms herein provided, whole shares of Common Stock at the Purchase Price set
forth in Section 9 hereof with amounts withheld or paid pursuant to Section 6
hereof during the Offering Period commencing on such Offering Date and ending on
the next succeeding Exercise Date. Anything herein to the contrary
notwithstanding, if any person entitled to purchase shares pursuant to any
Offering hereunder would be deemed for purposes of Section 423(b)(3) of the Code
to own stock (including any number of shares which such person would be entitled
to purchase hereunder and under any other such plan maintained by the Company or
any Subsidiary) possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company, the maximum number of shares which
such person shall be entitled to purchase pursuant to the Plan shall be reduced
to that number which, when added to the number of shares of stock of the Company
which such person is so deemed to own (excluding any number of shares which such
person would be entitled to purchase hereunder), is one less than such 5%.
5. Participation in the Plan. Any Eligible Employee may become a
Participant in the Plan by notifying the Company in writing of his intention to
participate prior to the Offering Date on which an Offering commences. Such
notice shall be in the form prescribed by the Rules and shall be delivered by
hand or mailed, postage prepaid, to the Secretary of the Committee, or his
designee.
6. Method of Payment For Shares.
6.1 Payment for shares of Common Stock purchased hereunder
shall be made by authorized payroll deductions from a Participant's Compensation
pursuant to this Section 6.
6.2 In his written notice to the Company pursuant to Section 5
hereof, a Participant shall authorize a deduction from the payment of his
Compensation during each Offering Period of any full dollar amount; provided,
however, that the minimum deduction shall be $10 per bi-weekly pay period and
the maximum deduction shall be 10% of any payment of Compensation. The maximum
deduction from a Participant's Compensation during any twelve month period shall
be $20,000. A Participant may not change the amount of his deductions during an
Offering Period, but may change the amount to be deducted for any subsequent
Offering by filing notice thereof prior to the Offering Date on which such
subsequent Offering commences in the manner provided in Section 5 hereof.
7. Stock Purchase Accounts. A Stock Purchase Account shall
be established and maintained in the name of each Participant. Amounts
deducted from a
E-16
27
Participant's Compensation pursuant to Section 6 hereof shall be credited to his
Stock Purchase Account.
8. Interest. No interest shall accrue or be payable to any
Participant with respect to any amounts credited to his Stock Purchase
Account.
9. Purchase Price. The Purchase Price per share of the shares of
Common Stock sold to Participants hereunder for any Offering shall be the lesser
of 85% of the Fair Market Value per share of Common Stock on the (i) Offering
Date or (ii) the Exercise Date.
10. Purchase of Shares. If as of any Exercise Date there is credited
to the Stock Purchase Account of a Participant an amount at least equal to the
Purchase Price of one share of Common Stock, as determined in Section 9 hereof,
for the Offering which expires on such Exercise Date, the Participant shall
purchase from the Company at such Purchase Price the largest number of whole
shares of Common Stock which can be purchased with the amount credited to his
Stock Purchase Account. Anything herein to the contrary notwithstanding, a
Participant may not purchase more than 1,000 shares of Common Stock in any
Offering Period.
11. Expiration of Offering. As of each Exercise Date the amount
credited to the Stock Purchase Account of each Participant in the Offering which
expires on such Exercise Date shall be charged with the aggregate Purchase Price
of the shares of Common Stock purchased by the Participant on such Exercise
Date. The remaining balance credited to his Stock Purchase Account shall be
refunded to each Participant who files notice of his election to receive such a
refund prior to such Exercise Date in the manner provided in Section 23 hereof.
If no such notice is filed by a Participant and such Participant has not
withdrawn from the Plan in accordance with Section 13 hereof, any remaining
balance credited to his Stock Purchase Account shall be credited to his Stock
Purchase Account for the next succeeding Offering hereunder.
12. Issuance of Shares; Stock Certificate.
12.1 The shares of Common Stock purchased by a Participant on
an Exercise Date shall, for all purposes, be deemed to have been sold at the
close of business on such Exercise Date. Prior to that time, the Participant
shall have none of the rights or privileges of a stockholder of the Company with
respect to such shares.
12.2 As soon as practicable after such Exercise Date, the
Company shall issue and deliver a certificate for the number of shares of Common
Stock purchased by a Participant on such Exercise Date, which certificate shall
be registered either in the Participant's name or jointly in the names of the
Participant and his spouse, with the right of survivorship, as the Participant
shall designate in his notice to the Company pursuant to Section 23 hereof. The
Participant may change such designation at any time by filing notice of the
change in accordance with Section 23 hereof.
13. Voluntary Withdrawal From the Plan. A Participant may withdraw
from the Plan at any time by filing a notice of withdrawal in writing with the
Company. Upon a Participant's withdrawal, the entire amount credited to his
Stock Purchase Account shall be
E-17
28
refunded to him. Any Participant who withdraws from the Plan may again become a
Participant hereunder by filing notice in accordance with Section 5 hereof.
14. Involuntary Withdrawal From the Plan. If a Participant ceases to
be an Employee by reason of clauses (b) or (c) of Section 2.8 hereof, the entire
credit balance in such Participant's Stock Purchase Account as of the effective
date on which such Participant so ceased to be an Employee shall be used to
purchase shares of Common Stock pursuant to Section 10 hereof on the next
Exercise Date and any remaining balance credited to such Participant's Stock
Purchase Account shall be refunded to him.
15. Termination of Employment. If a Participant ceases to be an
Employee other than by reason of clauses (b) or (c) of Section 2.8 hereof, the
entire credit balance in such Participant's Stock Purchase Account shall be
refunded to such Participant. If a Participant dies, the entire credit balance
in such Participant's Stock Purchase Account shall be paid over to such
Participant's estate.
16. Procedure if Insufficient Shares Available. In the event that on
any Exercise Date the aggregate funds available for the purchase of shares of
Common Stock pursuant to Section 9 hereof would purchase a number of shares in
excess of the number of shares then available for purchase under the Plan, the
Committee shall proportionately reduce the number of shares which would
otherwise be purchased by each Participant on such Exercise Date in order to
eliminate such excess, the Plan shall automatically terminate immediately after
such Exercise Date and any remaining balance credited to the Stock Purchase
Account of a Participant shall be refunded to such Participant.
17. Limitation on Right to Purchase. Anything herein to the contrary
notwithstanding, no Participant shall be granted an option under this Plan which
permits such Participant's rights to purchase Common Stock in any one calendar
year, under this Plan and under all other stock purchase plans of the Company or
any Parent or Subsidiary, to accrue at a rate which exceeds $25,000 of Fair
Market Value of Common Stock (determined on the date the option is granted for
each calendar year such option is outstanding). The purpose of the limitation in
the preceding sentence is to comply with and shall be construed in accordance
with Section 423(b)(8) of the Code.
18. Rights Not Transferable. Rights to purchase shares under the
Plan are exercisable only by the Participant during his lifetime and are not
transferable other than by will or the laws of descent and distribution and any
other purported transfer shall be null and void.
19. Administration of the Plan. Subject to superseding action by the
Board, the Committee shall have full power to administer the Plan. The Committee
shall adopt Rules not inconsistent with the provisions of the Plan for its
administration, including the form of all notices required hereunder. The
Committee's interpretation and construction of the Plan and the Rules shall,
subject as aforesaid, be final and conclusive.
20. Amendment of the Plan. The Board may at any time, or from time
to time, alter or amend the Plan in any respect, except that, without approval
of the stockholders of the Company, no amendment may (i) change the number of
shares reserved under the Plan
E-18
29
other than as provided in Section 21 hereof or (ii) reduce the Purchase Price
per share as determined under Section 9 hereof.
21. Recapitalization and Corporate Reorganization.
21.1 The aggregate number of shares of Common Stock reserved
for purchase under the Plan as provided in Section 3 hereof, the maximum number
of shares which a Participant may purchase in any Offering as provided in
Section 10 hereof, and the Purchase Price per share as provided in Section 9
hereof shall be appropriately adjusted by the Committee to reflect any increase
or decrease in the number of issued shares of Common Stock resulting from a
subdivision or consolidation of shares or other capital adjustment, or the
payment of a stock dividend, or other increase or decrease in such shares
effected without receipt of consideration by the Company.
21.2 Subject to any required action by the stockholders, if
the Company shall be the surviving or resulting corporation in any merger or
consolidation, any Offering hereunder shall pertain to and apply to the shares
of stock of the Company, but a dissolution or liquidation of the Company or a
merger or consolidation in which the Company is not the surviving or the
resulting corporation, shall cause the Plan and any Offering hereunder to
terminate and the entire amount credited to the Stock Purchase Account of each
Participant hereunder shall be paid to such Participant.
22. Expiration and Termination of the Plan. The Plan shall continue
in effect through December 31, 2009 unless terminated prior thereto pursuant to
Section 21 hereof, provided that the Board of Directors shall have the right to
terminate the Plan at any time. In the event of the expiration of the Plan or
its termination pursuant to Section 21 hereof, the entire amount credited to the
Stock Purchase Account of each Participant hereunder shall be refunded to the
Participant.
23. Notice. Any notice which a Participant files pursuant to the
Plan shall be in the appropriate form prescribed by the Rules or, if no
provision is made in the Rules for the particular kind of notice in question,
such notice shall be in writing and shall be delivered by hand or mailed,
postage prepaid, to the Secretary of the Committee, or his designee.
24. Repurchase of Stock. The Company shall not be required to
repurchase from any Participant any shares of Common Stock acquired by such
Participant under the Plan.
25. Alternative Contribution Methods. Anything herein to the
contrary notwithstanding, in the event authorized payroll deductions from
Employees' Compensation are not permitted by reason of the provisions of local
law applicable to the Company or any Subsidiary, the Committee shall adopt an
appropriate alternative method pursuant to which affected Employees may make
payment for shares of Common Stock purchased hereunder. Payments made under an
alternative contribution method shall be deemed to have been made pursuant to
Section 6 hereof.
E-19
30
EXHIBIT 4(iii)
NOVAMETRIX MEDICAL SYSTEMS INC.
EXECUTIVE INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of May 22, 2000 is made by and
between Novametrix Medical Systems Inc., a Delaware corporation (the "Company"),
and Thomas M. Patton (the "Optionee"), an employee of the Company.
WHEREAS, the Optionee and the Company have entered into an
employment agreement, the terms and provisions of which are hereby incorporated
herein by reference, which provides for the grant of a stock option to the
Optionee; and
WHEREAS, the Company wishes to afford the Optionee the opportunity
to purchase 375,000 shares of the Company's common stock, $.01 par value per
share (the "Common Stock") pursuant to such stock option; and
WHEREAS, the Company's Board of Directors has determined that it
would be to the advantage and in the best interests of the Company and its
stockholders to grant to the Optionee such stock option to purchase Common Stock
as an incentive for increased efforts during the Optionee's term of office with
the Company and has advised the Company thereof and instructed it to issue such
stock option.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
"Cause" shall have the meaning set forth in Section 1(d) of the
Employment Agreement.
"Change in Control" shall have the meaning set forth in Section 1(e)
of the Employment Agreement.
"Constructive Termination Without Cause" shall have the meaning set
forth in Section 1(g) of the Employment Agreement.
"Disability" shall have the meaning set forth in Section 1(h) of the
Employment Agreement.
E-20
31
"Employment Agreement" shall mean the Employment Agreement dated as
of May 22, 2000 between the Optionee and the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Grant Date" shall mean May 22, 2000.
"Special Termination" shall have the meaning set forth in Section
1(j) of the Employment Agreement.
"Term" shall mean the ten-year period commencing on the Grant Date
and terminating on the tenth anniversary of the Grant Date.
"Termination for Cause" shall have the meaning set forth in Section
10(c) of the Employment Agreement and shall not include any termination that
constitutes a Constructive Termination Without Cause or a Special Termination.
"Termination without Cause" shall have the meaning set forth in
Section 10(d) of the Employment Agreement.
"Vest" shall mean to become exercisable as well as to become vested,
subject to the terms of this Agreement.
ARTICLE II
GRANT OF OPTION
Section 2.1 - Grant of Option
On and as of the Grant Date, the Company irrevocably grants to the
Optionee a non-qualified stock option to purchase all or any part of 375,000
shares of Common Stock (any such shares, the "Shares") upon the terms and
conditions set forth herein (the "Option").
Section 2.2 - Exercise Price
The exercise price shall be $6.3125 per Share without commission or
other charge.
Section 2.3 - Consideration to the Company; No Right to Employment
In consideration of the Option grant, the Optionee agrees to render
faithful and efficient service to the Company with such duties and
responsibilities as the Company shall from time to time prescribe, all in
accordance with the terms of the Employment Agreement. Nothing in this Agreement
shall confer upon the Optionee any right to continue in the employ of the
E-21
32
Company or shall interfere with or restrict in any way the rights of the
Company, which rights hereby are expressly reserved, to terminate the Optionee's
employment at any time for any reason whatsoever, with or without cause, subject
to the terms of the Employment Agreement.
Section 2.4 - Adjustments in Option
(a) General. In the event of a stock split, stock dividend,
combination of shares or similar event or in the event the outstanding shares of
Common Stock subject to the Option are, from time to time, changed into or
exchanged for a different number or kind of shares of common stock or other
securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, or otherwise, the Board of Directors of the
Company shall make an appropriate and equitable adjustment in the number and
kind of shares or other consideration as to which the Option, or portions
thereof then unexercised, shall be exercisable and/or in the exercise price
and/or other terms and conditions of this Option (including the prices per share
of Common Stock set forth in Section 3.1 hereof), and/or shall promptly make
appropriate provision(s) for supplemental payments of cash, securities, and/or
other property, so as to avoid dilution or enlargement of the rights of the
Optionee and of the economic opportunity and value represented by the Option.
Any such adjustment made by the Board of Directors of the Company shall be final
and binding, subject, however, to the provisions of Section 15 of the Employment
Agreement which is incorporated herein by reference as provided in the Recitals
hereto and in Section 5.9 below.
(b) Roll-over Provisions. In the event of any merger, consolidation
or other transaction (i) in which the Company is not the surviving entity or the
Company becomes (directly or indirectly) a subsidiary of another entity and (ii)
following which the surviving entity or any entity of which it is a subsidiary,
or, if the Company survives as a subsidiary of another entity, then such other
entity or any entity of which such other entity is a subsidiary, has
publicly-traded equity securities issued and outstanding, the Company shall take
such steps as are necessary to assure that the Optionee shall (at his election)
be provided a replacement option that (x) is exercisable for publicly-traded
equity securities of the surviving entity, or of an entity of which the Company
or the surviving entity is a subsidiary, as the case may be, and (y) provides
terms, conditions and economic opportunity (including, without limitation, an
aggregate spread value) no less favorable to the Optionee than did the Option
prior to such transaction.
(c) Change in Control. In the event that holders of Common Stock
receive cash, securities or other property in respect of their Common Stock in
connection with a Change in Control transaction, the Company shall use its best
efforts to enable the Optionee (if he so elects) to exercise the Option at a
time and in a fashion that will entitle him to receive in exchange for any
Common Stock thus acquired the same consideration as is received in such Change
in Control transaction by other holders of Common Stock.
E-22
33
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Vesting and Commencement of Exercisability
Subject to the provisions of Section 3.2, the Option shall Vest and
become exercisable as follows:
(a) As to 150,000 shares, the Option shall Vest and become
exercisable at the rate of 20% on each of the first five anniversaries of the
Grant Date, provided that the Option shall Vest and become immediately
exercisable with respect to such 150,000 shares on the date on which the average
closing price of the Company's Common Stock for 60 trading days is at least
equal to $12 per share as reported by the principal national securities exchange
on which the Common Stock is traded.
(b) As to another 150,000 shares, the Option shall Vest and become
exercisable at the rate of 20% on each of the first five anniversaries of the
Grant Date, provided that the Option shall Vest and become immediately
exercisable with respect to such 150,000 shares on the date on which the average
closing price of the Company's Common Stock for 60 trading days is at least
equal to $15 per share as reported by the principal national securities exchange
on which the Common Stock is traded.
(c) As to another 75,000 shares, the Option shall Vest and become
exercisable on November 22, 2009, provided that the Option shall Vest and become
immediately exercisable with respect to such 75,000 shares on the date on which
the average closing price for the Company's Common Stock for 60 trading days is
at least equal to $20 per share as reported by the principal national securities
exchange on which the Common Stock is traded.
Section 3.2 - Acceleration of Exercisability; Forfeiture
(a) To the extent not previously Vested, the Option shall become
fully Vested and exercisable upon a Change in Control. To the extent not
previously Vested, the Option shall be immediately forfeited in the event of a
termination of the Optionee's employment for any reason, all as provided in the
Employment Agreement.
(b) To the extent Vested on the date of the Optionee's termination
of employment, the Option shall continue to be exercisable by the Optionee or,
in the event of his death, by his estate for the following periods (but not
beyond the original ten-year term of the Option): (A) for the balance of the
stated term of the Option in the event of such termination of employment by
reason of death, Disability, termination by the Company Without Cause,
Constructive Termination Without Cause or Special Termination or (B) until 30
days after termination of employment by the Company for Cause or voluntary
resignation by the Optionee. In the event that the Optionee engages in
Competition (within the meaning of Section 12 of the Employment Agreement)
within the one-year period immediately following the termination of
E-23
34
his employment with the Company for any reason, this Option shall be immediately
forfeited to the extent not previously exercised.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the Optionee's lifetime, subject to Section 5.1 hereof, only
the Optionee may exercise the Option or any exercisable portion thereof. Subject
to the preceding sentence, after the death of the Optionee and prior to the
close of business on the Expiration Date, the Option or any exercisable portion
thereof may be exercised by the Optionee's personal representative, or by any
person empowered to do so under the Optionee's will or under the then applicable
laws of descent and distribution. The party entitled to exercise the Option
shall be referred to herein as the "Exercising Party".
Section 4.2 - Partial Exercise
Any exercisable portion of the Option may be exercised in whole or
in part at any time prior to the close of business on the Expiration Date;
provided, however, that any exercise shall be for whole shares only.
Section 4.3 - Manner of Exercise
(a) Notice in writing, signed by the Exercising Party, shall be
delivered to the Company, stating the number of Shares with respect to which the
Option is being exercised.
(b) Full payment of the purchase price and resulting tax withholding
liability shall be paid to the Company, which payment can be made in any
combination of the following:
(i) Cash, wire transfer of immediately available funds or
check payable to the Company, within five business days of exercise. This
alternative can be used for either or both the purchase price and resulting tax
withholding liability.
(ii) "Exchange" of Common Stock owned for at least six months
prior to exercise with a total market value equal to or greater than the
purchase price. This alternative can also be used for either or both the
purchase price and resulting tax withholding liability.
(iii) Simultaneous exercise and sale through brokers from time
to time designated by the Company;
(iv) Tendering Shares (reducing the number of Shares actually
delivered through the exercise of the Option). This alternative can only be used
to satisfy the resulting minimum tax withholding liability.
E-24
35
(c) In the event the Exercising Party is not the Optionee,
appropriate proof, in the sole judgment of the Company, of the right of such
person to exercise the Option shall be delivered to the Company.
Section 4.4 - Shares to be Issued
The Shares deliverable upon the exercise of the Option or any
portion thereof, may be either previously authorized but unissued shares of
Common Stock or issued shares that have been reacquired subsequently by the
Company. When delivered to the Optionee, such shares shall be fully paid and
nonassessable.
Section 4.5 - No Rights as Stockholder
Neither the Optionee nor any Exercising Party shall be a stockholder
of the Company or have any of the rights or privileges thereof in respect of any
shares covered by the Option unless and until certificates representing such
shares shall have been issued by the Company to such Optionee or other
Exercising Party or such shares have been registered in the name of the Optionee
or other Exercising Party on the Company's books.
Section 4.6 - Securities Registration; Securities Law Compliance
(a) The Company represents that, as promptly as practicable
following the filing by the Company with the Securities and Exchange Commission
of the Company's Annual Report on Form 10-K for fiscal 2000, the Company shall
effect the registration under the Securities Act of 1933 and under applicable
state securities laws of all Shares to be issued upon exercise of the Option and
shall continue such registration in effect after the Option is exercised. Upon
issuance of any Share hereunder, the Optionee shall, if requested by the
Company, make such representations and furnish such information as may
reasonably be necessary to permit the Company to issue or transfer such Share in
compliance with the provisions of applicable Federal and/or state securities
laws.
(b) Optionee understands and agrees that, prior to the registration
of the Shares under the Securities Act of 1933 or under applicable state
securities laws, the Company shall cause the legend set forth below or a legend
substantially equivalent thereto, to be placed upon any certificate(s)
evidencing ownership of the Shares together with any other legends that my be
required by the Company or by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION MAY BE EFFECTED WITHOUT SUCH REGISTRATION.
E-25
36
(c) Optionee agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate "stop
transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its owns securities, it may make appropriate notations to the same
effect in its own records.
(d) In the event the Shares have not been registered under the
Securities Act of 1933 at the time this Option is exercised, the Optionee shall,
if required by the Company, concurrently with the exercise of all or any portion
of this Option, deliver to the Company his Investment Representation Statement
in the form attached hereto as Exhibit I.
Section 4.7 - Deferral of Option Gains
To the extent that such rights are provided to any other senior
executive of the Company, the Optionee shall have the right to elect to defer
any gains realized upon or in connection with the exercise of the Option.
ARTICLE V
MISCELLANEOUS
Section 5.1 - Transferability of Option
This Agreement and the Optionee's rights hereunder shall be transferable
or assignable by the Optionee (i) by will or by the laws of descent and
distribution, (ii) during his lifetime, by gratuitous transfers to
immediate family members or to trusts for their benefit or (iii) pursuant
to a Qualified Domestic Relations Order (as defined under the Code or
Title I of the Employee Retirement Security Act of 1974, as amended, or
the rules thereunder). As provided in Section 4.1, the Option may be
exercised only by the Optionee or his guardian or legal representative
(including any person empowered to do so under the Optionee's will or
under the then applicable laws of descent and distribution) or by a
transferee to whom a transfer is made in accordance with the preceding
sentence (a "Permitted Transferee"). For purposes of this Section 5, a
"Permitted Transferee" shall be deemed to include a transferee from a
Permitted Transferee under circumstances described in clauses (i) and (ii)
above. Any Permitted Transferee shall have the same rights and obligations
as the Optionee except that the rights with respect to transfers or
assignments under this Section 5 shall be limited to Permitted Transferees
referred to in clauses (i) and (ii) above.
Section 5.2 - Shares to be Reserved
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of Common Stock as will be sufficient
to satisfy the requirements of this Agreement.
E-26
37
Section 5.3 - Notices
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company as follows: Novametrix Medical Systems
Inc., Five Technology Drive, P.O. Box 690, Wallingford, CT 06492, Attention:
Chairman of the Board and Chief Executive Officer, with a copy to: Thomas M.
Haythe, Esq., Law Offices of Thomas M. Haythe, 90 Park Avenue, 15th Floor, New
York, NY 10016. Any notice to be given to the Optionee shall be sent to the
address set forth beneath his signature to this Agreement. By a notice given
pursuant to this Section 5.3, either party may hereafter designate a different
address for notices. Any notice that is required to be given to the Optionee
shall, if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
or her status and address by written notice under this Section 5.3. All notices
and other communications under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally, mailed by registered
mail, return receipt requested, or sent by documented overnight delivery
service.
Section 5.4 - Titles
Titles are provided herein for convenience of reference only and are
not to serve as a basis for interpretation or construction of this Agreement.
Section 5.5 - Applicability of Plan, Employment Agreement
This Agreement, the Option and any Shares issued hereunder shall be
subject to all of the terms and provisions of the Employment Agreement. In the
event of any conflict between this Agreement and the Employment Agreement, the
terms of the Employment Agreement shall control.
Section 5.6 - Amendment; Waiver
No provision of this Agreement may be amended or modified except by
an instrument or instruments in writing signed by the parties hereto. Any party
may waive compliance by another with any of the provisions of this Agreement,
provided that (a) no waiver of any provision hereof shall be construed as a
waiver of any other provision or subsequent breach and (b) any such waiver shall
be in writing signed by the party waiving such compliance. The failure of any
party hereto to enforce at any time any provision hereof shall not be construed
to be a waiver of such provision, nor in any way to affect the validity hereof,
or any part hereof, or the right of any party thereafter to enforce each and
every such provision.
Section 5.7 - Governing Law
To the extent not governed by the laws of the United States, including the
Code, this Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware (without reference to
conflicts of law principles).
E-27
38
Section 5.8 - Jurisdiction
Subject to Section 5.9 hereof, the Company and the Optionee hereby
irrevocably submit to the jurisdiction of any Connecticut or Delaware state
court, or any Federal court in Connecticut or Delaware in any action or
proceeding arising out of or relating to this Agreement, and the parties hereto
irrevocably agree that all claims in respect of such action or proceeding shall
be heard and determined only in such courts. The Company and the Optionee hereby
consent to and grant to any such court jurisdiction over the persons of such
parties and over the subject matter of any such dispute and agree that delivery
or mailing of any process or other papers in the manner provided in Section 5.3
hereof, or in such other manner as may be permitted by law, shall be valid and
sufficient service thereof.
Section 5.9 - Resolution of Disputes
Any disputes under this Agreement shall be resolved in accordance
with Section 15 of the Employment Agreement, which shall be deemed incorporated
herein in full.
Section 5.10 - Representations
The Company represents and warrants that (a) it is fully authorized by
action of its Board to enter into this Agreement and to perform its
obligations hereunder, (b) the execution, delivery and performance of this
Agreement by the Company does not violate any applicable law, regulation,
order, judgment or decree or any agreement, plan or corporate governance
document of the Company, and (c) upon the execution and delivery of this
Agreement by the Company and the Optionee, this Agreement shall be the
valid and binding obligation of the Company, enforceable in accordance
with its terms.
IN WITNESS WHEREOF, this Agreement has been executed and delivered
by the parties hereto on the date first set forth above.
NOVAMETRIX MEDICAL SYSTEMS INC.
By:/s/ William J. Lacourciere
---------------------------------
William J. Lacourciere
Chairman of the Board and
Chief Executive Officer
AGREED AND ACCEPTED BY:
/s/ Thomas M. Patton
- --------------------------------
Thomas M. Patton, Optionee
E-28
39
EXHIBIT 4(iv)
NOVAMETRIX MEDICAL SYSTEMS INC.
1999 INCENTIVE PLAN
SECTION 1. Purpose. The purposes of this Novametrix Medical Systems
Inc. 1999 Incentive Plan (the "Plan") are to encourage selected non-officer
employees of Novametrix Medical Systems Inc. (together with any successor
thereto, the "Company") and its Affiliates (as defined below) to acquire a
proprietary interest in the growth and performance of the Company, to generate
an increased incentive to contribute to the Company's future success and
prosperity thus enhancing the value of the Company for the benefit of its
shareholders, and to enhance the ability of the Company and its Affiliates to
attract and retain exceptionally qualified individuals upon whom, in large
measure, the sustained progress, growth and profitability of the Company depend.
SECTION 2. Definitions. As used in the Plan, the following terms
shall have the meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or through one
or more intermediaries, is controlled by the Company and (ii) any entity in
which the Company has a significant equity interest, as determined by the
Committee.
"Award" shall mean any Option, Restricted Security, Performance
Award, or Other Stock-Based Award granted under the Plan.
"Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the Plan.
"Board" shall mean the Board of Directors of the Company.
"Cause", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an Affiliate
of the Company which agreement includes a definition of "cause," "cause" as
defined in such agreement or, if such agreement contains no such definition, a
material breach by the Participant of such agreement, or (ii) with respect to
any other Participant, the failure to perform adequately in carrying out such
Participant's employment responsibilities, including any directives from the
Board, or engaging in such behavior in his personal or business life as to lead
the Committee in its reasonable judgment to determine that it is in the best
interests of the Company to terminate his employment.
"Common Stock" shall mean the common stock of the Company, $.01 par
value.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder.
E-29
40
"Committee" shall mean the Stock Option Committee or any other
committee of the Board designated by the Board to administer the Plan and
composed of not less than three non-employee directors.
"Common Shares" shall mean any or all, as applicable, of the Common
Stock and such other securities or property as may become the subject of Awards,
or become subject to Awards, pursuant to an adjustment made under Section 4(b)
of the Plan and any other securities of the Company or any Affiliate or any
successor that may be so designated by the Committee.
"Employee" shall mean any employee of the Company or of any
Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean (A) with respect to any property
other than the Common Shares, the fair market value of such property determined
by such methods or procedures as shall be established from time to time by the
Committee; and (B) with respect to the Common Shares, the last sale price
regular way on the date of reference, or, in case no sale takes place on such
date, the average of the high bid and low asked prices, in either case on the
principal national securities exchange on which the Common Shares are listed or
admitted to trading, or if the Common Shares are not listed or admitted to
trading on any national securities exchange, the last sale price reported on the
National Market System of the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") on such date, or the average of the
closing high bid and low asked prices in the over-the-counter market reported on
NASDAQ on such date, whichever is applicable, or if there are no such prices
reported on NASDAQ on such date, as furnished to the Committee by any New York
Stock Exchange member selected from time to time by the Committee for such
purpose. If there is no bid or asked price reported on any such date, the Fair
Market Value shall be determined by the Committee in accordance with the
regulations promulgated under Section 2031 of the Code, or by any other
appropriate method selected by the Committee.
"Good Reason", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an Affiliate
of the Company, "good reason" as defined in such written agreement or, if such
agreement contains no such definition, a material breach by the Company of such
agreement, or (ii) with respect to any other Participant, a failure by the
Company to pay such Participant any amount otherwise vested and due and a
continuation of such failure for 30 business days following notice to the
Company thereof.
"Option" shall mean a Non-Qualified Stock Option.
"Other Stock-Based Award" shall mean any right granted under Section
6(d) of the Plan.
"Participant" shall mean any individual granted an Award under the
Plan.
"Performance Award" shall mean any right granted under Section 6(c)
of the Plan.
E-30
41
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
"Released Securities" shall mean securities that were Restricted
Securities but with respect to which all applicable restrictions have expired,
lapsed or been waived in accordance with the terms of the Plan or the applicable
Award Agreement.
"Restricted Securities" shall mean any Common Shares granted under
Section 6(b) of the Plan, any right granted under Section 6(b) of the Plan that
is denominated in Common Shares or any other Award under which issued and
outstanding Common Shares are held subject to certain restrictions.
"Rule 16a-1" and "Rule 16b-3" shall mean, respectively, Rule 16a-1
and Rule 16b-3 promulgated by the Securities and Exchange Commission under the
Exchange Act, or any successor rule or regulation thereto as in effect from time
to time.
"Securities Act" shall mean the Securities Act of 1933, as amended.
SECTION 3. Administration. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to an
eligible Employee or other individual under the Plan; (iii) determine the number
and classification of Common Shares to be covered by (or with respect to which
payments, rights or other matters are to be calculated in connection with)
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Common Shares, other securities, other Awards or other
property, or canceled, forfeited or suspended, and the method or methods by
which Awards may be settled, exercised, canceled, forfeited or suspended; (vi)
determine requirements for the vesting of Awards or performance criteria to be
achieved in order for Awards to vest; (vii) determine whether, to what extent
and under what circumstances cash, Common Shares, other securities, other
Awards, other property and other amounts payable with respect to an Award under
the Plan shall be deferred either automatically or at the election of the holder
thereof or of the Committee; (viii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan; (ix)
establish, amend, suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (x) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be
made at any time and shall be final, conclusive and binding upon all Persons,
including the Company, any Affiliate, any Participant, any holder or beneficiary
of any Award, any shareholder and any Employee. Notwithstanding the foregoing,
the maximum number of Awards which may be granted to any one Participant under
this Plan in any one-year period shall not exceed [10,000]
E-31
42
Common Shares, subject to the adjustments provided in Section 4(b) hereof and no
Awards under this Plan shall be granted after September 31, 2009.
SECTION 4. Common Shares Available for Awards.
(a) Common Shares Available. Subject to adjustment as provided in
Section 4(b):
(i) Calculation of Number of Common Shares Available. The
number of Common Shares available for granting Awards under the Plan shall
be 100,000, any or all of which may be based on Common Stock, any other
security which becomes the subject of Awards, or any combination thereof.
Initially 100,000 shares of Common Stock shall be reserved for Awards
hereunder. Further, if, after the effective date of the Plan, any Common
Shares covered by an Award granted under the Plan or to which such an
Award relates, are forfeited, or if an Award otherwise terminates or is
canceled without the delivery of Common Shares or of other consideration,
then the Common Shares covered by such Award or to which such Award
relates, or the number of Common Shares otherwise counted against the
aggregate number of Common Shares available under the Plan with respect to
such Award, to the extent of any such forfeiture, termination or
cancellation, shall again be, or shall become, available for granting
Awards under the Plan.
(ii) Sources of Common Shares Deliverable Under Awards. Any
Common Shares delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Common Shares or of treasury Common
Shares.
(b) Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Common
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Common Shares or other securities of the
Company, issuance of warrants or other rights to purchase Common Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Common Shares such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of Common Shares (or other securities or property) which
thereafter may be made the subject of Awards, (ii) the number and kind of Common
Shares (or other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any Award or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Award; provided, however, that the number of Common Shares subject to any Award
denominated in Common Shares shall always be a whole number.
In connection with any merger or consolidation which results in the
holders of the outstanding voting securities of the Company (determined
immediately prior to such merger or consolidation) owning directly or indirectly
less than a majority of the outstanding voting securities of the surviving
corporation (determined immediately following such merger
E-32
43
or consolidation), or any sale or transfer by the Company of all or
substantially all its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group of all or a majority
of the then outstanding voting securities of the Company, all outstanding
Options under the Plan shall become exercisable in full, notwithstanding any
other provision of the Plan or of any outstanding Options granted thereunder, on
and after (i) the fifteenth day prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of commencement of
such tender offer or exchange offer, as the case may be.
SECTION 5. Eligibility. Any non-officer Employee of the Company or
any Affiliate shall be eligible to be designated a Participant.
SECTION 6. Awards.
(a) Options. The Committee is hereby authorized to grant to eligible
individuals options to purchase Common Shares (each, an "Option") which shall
contain the following terms and conditions and with such additional terms and
conditions, in either case not inconsistent with the provisions of the Plan, as
the Committee shall determine:
(i) Exercise Price. The purchase price per Common Share
purchasable under an Option shall be determined by the Committee;
provided, however, that such purchase price shall not be less than one
hundred percent (100%) of the Fair Market Value of a Common Share on the
date of grant of such Option, or such other price as required under
Subsection 6(a)(iv) hereof.
(ii) Time and Method of Exercise. Subject to the terms of
Section 6(a)(iii), the Committee shall determine the time or times at
which an Option may be exercised in whole or in part, and the method or
methods by which, and the form or forms (including, without limitation,
cash, Common Shares, outstanding Awards, or other property, or any
combination thereof, having a Fair Market Value on the exercise date equal
to the relevant exercise price) in which, payment of the exercise price
with respect thereto may be made or deemed to have been made.
(iii) Exercisability Upon Death, Retirement and Termination of
Employment. Subject to the condition that no Option may be exercised in
whole or in part after the expiration of the Option period specified in
the applicable Award Agreement:
(A) Subject to the terms of paragraph (D) below, upon the
death of a Participant while employed or within 3 months of
retirement or disability as defined in paragraph (B) below, the
Person or Persons to whom such Participant's rights with respect to
any Option held by such Participant are transferred by will or the
laws of descent and distribution may, prior to the expiration of the
earlier of: (1) the outside exercise date determined by the
Committee at the time of granting the Option, or (2) nine months
after such Participant's death, purchase any or all of the Common
Shares with respect to which such Participant was entitled to
exercise such Option immediately prior
E-33
44
to such Participant's death, and any Options not so exercisable will
lapse on the date of such Participant's death;
(B) Subject to the terms of paragraph (D) below, upon
termination of a Participant's employment with the Company (x) as a
result of retirement pursuant to a retirement plan of the Company or
an Affiliate or disability (as determined by the Committee) of such
Participant, (y) by the Company other than for Cause, or (z) by the
Participant with Good Reason, such Participant may, prior to the
expiration of the earlier of: (1) the outside exercise date
determined by the Committee at the time of granting the Option, or
(2) three months after the date of such termination, purchase any or
all of the Common Shares with respect to which such Participant was
entitled to exercise any Options immediately prior to such
termination, and any Options not so exercisable will lapse on such
date of termination;
(C) Subject to the terms of paragraph (D) below, upon
termination of a Participant's employment with the Company under any
circumstances not described in paragraphs (A) or (B) above, such
Participant's Options shall be canceled to the extent not
theretofore exercised;
(D) Upon (i) the death of the Participant, or (ii) termination
of the Participant's employment with the Company (x) by the Company
other than for Cause (y) by the Participant with Good Reason or (z)
as a result of retirement or disability as defined in paragraph (B)
above, the Company shall have the right to cancel all of the Options
such Participant was entitled to exercise at the time of such death
or termination (subject to the terms of paragraphs (A) or (B) above)
for a payment in cash equal to the excess, if any, of the Fair
Market Value of one Common Share on the date of death or termination
over the exercise price of such Option for one Common Share times
the number of Common Shares subject to the Option and exercisable at
the time of such death or termination; and
(E) Upon expiration of the respective periods set forth in
each of paragraphs (A) through (C) above, the Options of a
Participant who has died or whose employment has been terminated
shall be canceled to the extent not theretofore canceled or
exercised.
(F) For purposes of paragraphs (A) through (D) above, the
period of service of an individual as a director or consultant of
the Company or an Affiliate shall be deemed the period of
employment.
(b) Restricted Securities.
(i) Issuance. The Committee is hereby authorized to grant to
eligible Employees "Restricted Securities" which shall consist of the
right to receive, by purchase or otherwise, Common Shares which are
subject to such restrictions as the Committee may impose (including,
without limitation, any limitation on the right to
E-34
45
vote such Common Shares or the right to receive any dividend or other
right or property), which restrictions may lapse separately or in
combination at such time or times, in such installments or otherwise, as
the Committee may deem appropriate.
(ii) Registration. Restricted Securities granted under the
Plan may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry registration or
issuance of a stock certificate or certificates. In the event any stock
certificate is issued in respect of Restricted Securities granted under
the Plan, such certificate shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted Securities.
(iii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of a Participant's employment for any reason
during the applicable restriction period, all of such Participant's
Restricted Securities which had not become Released Securities by the date
of termination of employment shall be forfeited and reacquired by the
Company; provided, however, that the Committee may, when it finds that a
waiver would be in the best interests of the Company, waive in whole or in
part any or all remaining restrictions with respect to such Participant's
Restricted Securities. Unrestricted Common Shares, evidenced in such
manner as the Committee shall deem appropriate, shall be issued to the
holder of Restricted Securities promptly after such Restricted Securities
become Released Securities.
(c) Performance Awards. The Committee is hereby authorized to grant
to eligible Employees "Performance Awards." Each Performance Award shall consist
of a right, (i) denominated or payable in cash, Common Shares, other securities
or other property (including, without limitation, Restricted Securities), and
(ii) which shall confer on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, the holder of the Performance
Award, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Committee shall establish. Subject to the
terms of the Plan and any applicable Award Agreement, the performance goals to
be achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted, the termination of a Participant's
employment and the amount of any payment or transfer to be made pursuant to any
Performance Award shall be determined by the Committee and by the other terms
and conditions of any Performance Award. The Committee shall issue performance
goals prior to the commencement of the performance period to which such
performance goals pertain.
(d) Other Stock-Based Awards. The Committee is hereby authorized to
grant to eligible Employees "Other Stock-Based Awards." Each Other Stock-Based
Award shall consist of a right (i) which is other than an Award or right
described in Section 6(a), (b) or (c) above and (ii) which is denominated or
payable in, valued in whole or in part by reference to, or otherwise based on or
related to, Common Shares (including, without limitation, securities convertible
into Common Shares) as are deemed by the Committee to be consistent with the
purposes of the Plan; provided, however, that such right shall comply, to the
extent deemed desirable by the Committee, with Rule 16b-3 and applicable law.
Subject to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine the
E-35
46
terms and conditions of Other Stock-Based Awards. Common Shares or other
securities delivered pursuant to a purchase right granted under this Section
6(d) shall be purchased for such consideration, which may be paid by such method
or methods and in such form or forms, including, without limitation, cash,
Common Shares, other securities, other Awards, other property, or any
combination thereof, as the Committee shall determine.
(e) General.
(i) No Cash Consideration for Awards. Awards may be granted
for no cash consideration or for such minimal cash consideration as may be
required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may,
in the discretion of the Committee, be granted either alone or in addition
to, in tandem with, or in substitution for any other Award. Awards granted
in addition to or in tandem with other Awards may be granted either at the
same time as or at a different time from the grant of such other awards.
(iii) Forms of Payment Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers to
be made by the Company or an Affiliate upon the grant, exercise or payment
of an Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Common Shares, other
securities, other Awards, or other property, or any combination thereof,
and may be made in a single payment or transfer, in installments, or on a
deferred basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments. In accordance with the
above, the Committee may elect (i) to pay a Participant (or such
Participant's permitted transferee) upon the exercise of an Option in
whole or in part, in lieu of the exercise thereof and the delivery of
Common Shares thereunder, an amount of cash equal to the excess, if any,
of the Fair Market Value of one Common Share on the date of such exercise
over the exercise price of such Option for one Common Share times the
number of Common Shares subject to the Option or portion thereof so
exercised or (ii) to settle other stock denominated Awards in cash.
(iv) Limits on Transfer of Awards.
(A) Unless otherwise authorized by the Committee, no award
(other than Released Securities), and no right under any such Award,
may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant otherwise than by will or
by the laws of descent and distribution (or, in the case of
Restricted Securities, to the Company) and any such purported
assignment, alienation, pledge, attachment, sale or other transfer
or encumbrance shall be void and unenforceable against the Company
or any Affiliate.
E-36
47
(B) Each award, and each right under any Award, shall be
exercisable during the Participant's lifetime only by the
Participant or, if permissible under applicable law, by the
Participant's guardian or legal representative.
(v) Terms of Awards. The term of each Award shall be for such
period as may be determined by the Committee; provided, however, that in
no event shall the term of any Option exceed a period of ten years from
the date of its grant.
(vi) Rule 16b-3 Six-Month Limitations. To the extent required
in order to maintain the exemption provided under Rule 16b-3 only, any
equity security offered pursuant to the Plan must be held for at least six
months after the date of grant, and with respect to any derivative
security issued pursuant to the Plan, at least six months must elapse from
the date of acquisition of such derivative security to the date of
disposition of the derivative security (other than upon exercise or
conversion) or its underlying equity security. Terms used in the preceding
sentence shall, for the purposes of such sentence only, have the meanings,
if any, assigned or attributed to them under Rule 16b-3.
(vii) Common Share Certificates. All certificates for Common
Shares delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Common Shares are then
listed, and any applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.
(viii) Delivery of Common Shares or Other Securities and
Payment by Participant of Consideration. No Common Shares or other
securities shall be delivered pursuant to any Award until payment in full
of any amount required to be paid pursuant to the Plan or the applicable
Award Agreement is received by the Company. Such payment may be made by
such method or methods and in such form or forms as the Committee shall
determine, including, without limitation, cash, Common Shares, other
securities, other Awards or other property, or any combination thereof;
provided that the combined value, as determined by the Committee, of all
cash and cash equivalents and the Fair Market Value of any such Common
Shares or other property so tendered to the Company, as of the date of
such tender, is at least equal to the full amount required to be paid
pursuant to the Plan or the applicable Award Agreement to the Company.
SECTION 7. Amendments; Adjustments and Termination. Except to the
extent prohibited by applicable law and unless otherwise expressly provided in
an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any shareholder,
Participant, other holder or beneficiary of an Award, or other Person; provided,
however, that, subject to the Company's rights to adjust Awards under Sections
7(c) and (d), any amendment, alteration,
E-37
48
suspension, discontinuation, or termination that would impair the rights of any
Participant, or any other holder or beneficiary of any Award theretofore
granted, shall not to that extent be effective without the consent of such
Participant, other holder or beneficiary of an Award, as the case may be; and
provided further, however, that notwithstanding any other provision of the Plan
or any Award Agreement, without the approval of the shareholders of the Company
no such amendment, alteration, suspension, discontinuation, or termination shall
be made that would:
(i) increase the total number of Common Shares available for
Awards under the Plan, except as provided in Section 4 hereof; or
(ii) otherwise cause the Plan to cease to comply with any tax
or regulatory requirement, including for these purposes any approval or
other requirement which is or would be a prerequisite for exemptive relief
from Section 16(b) of the Exchange Act.
(b) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively;
provided, however, that, subject to the Company's rights to adjust Awards under
Sections 7(c) and (d), any amendment, alteration, suspension, discontinuation,
cancellation or termination that would impair the rights of any Participant or
holder or beneficiary of any Award theretofore granted, shall not to that extent
be effective without the consent of such Participant or holder or beneficiary of
an Award, as the case may be.
(c) Adjustment of Awards Upon Certain Acquisitions. In the event the
Company or any Affiliate shall assume outstanding employee awards or the right
or obligation to make future such awards in connection with the acquisition of
another business or another corporation or business entity, the Committee may
make such adjustments, not inconsistent with the terms of the Plan, in the terms
of Awards as it shall deem appropriate in order to achieve reasonable
comparability or other equitable relationship between the assumed awards and the
Awards granted under the Plan as so adjusted.
(d) Adjustments of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or non-recurring events (including, without limitation, the events
described in Section 4(b) hereof) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
SECTION 8. General Provisions.
(a) No Right to Awards. No Employee or other Person shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment
E-38
49
of Employees, or holders or beneficiaries of Awards under the Plan. The terms
and conditions of Awards need not be the same with respect to each recipient.
(b) Delegation. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers or managers of the Company or
any Affiliate, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to grant
Awards to, or to cancel, modify, waive rights with respect to, alter,
discontinue, suspend, or terminate Awards.
(c) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.
(d) Withholding. The Company or any Affiliate shall be authorized to
withhold from any Award granted, from any payment due or transfer made under any
Award or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Common Shares, other securities, other Awards,
or other property) of withholding taxes due in respect of an Award, its
exercise, or any payment or transfer under such Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company or
Affiliate to satisfy all obligations for the payment of such taxes.
(e) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(f) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any liability, or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(g) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable Federal law.
(h) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or as to any Person or Award under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform to applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall be stricken as to such jurisdiction, Person or
Award and the remainder of the Plan and any such Award shall remain in full
force and effect.
(i) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an
E-39
50
Award, such right shall be no greater than the right of any unsecured general
creditor of the Company or any Affiliate.
(j) No Fractional Common Shares. No fractional Common Shares shall
be issued or delivered pursuant to the Plan or any Award, and the Committee
shall determine whether cash, other securities, or other property shall be paid
or transferred in lieu of any fractional Common Shares or whether such
fractional Common Shares or any rights thereto shall be canceled, terminated, or
otherwise eliminated.
(k) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 9. Adoption, Approval and Effective Date of the Plan. The
Plan shall be considered adopted and shall become effective on the date the Plan
is approved by the Board; provided, however, that the Plan and any Awards
granted under the Plan shall be void, if the shareholders of the Company shall
not have approved the adoption of the Plan within twelve (12) months after the
effective date, by a majority of votes cast thereon at a meeting of shareholders
duly called and held for such purpose.
E-40
51
Exhibit 5
September 10, 2001
Novametrix Medical Systems Inc.
5 Technology Drive
Wallingford, Connecticut 06492
Dear Sirs:
We have acted as counsel for Novametrix Medical Systems Inc., a
Delaware corporation (the "Company"), in connection with the registration
statement on Form S-8 being filed by the Company under the Securities Act of
1933 with respect to 650,000 shares, 100,000 shares, 375,000 shares and 100,000
shares (collectively, the "Shares") of the Company's common stock, $.01 par
value (the "Common Stock"), to be offered by the Company to employees of the
Company pursuant to, respectively, the Company's 2000 Long Term Incentive Plan
(the "Long Term Incentive Plan"), 2000 Employee Stock Purchase Plan (the "Stock
Purchase Plan"), 2000 Executive Incentive Plan (the "Executive Incentive Plan")
and 1999 Incentive Plan (the "Incentive Plan").
In connection with such registration statement, we have examined
such records and documents and such questions of law as we have deemed
appropriate for purposes of this opinion. On the basis of such examination, we
advise you that in our opinion:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware; and
(2) the Shares have been duly and validly authorized and, when
issued and paid for in accordance with the terms of the Long Term
Incentive Plan, the Stock Purchase Plan, the Executive Incentive
Plan and the Incentive Plan, as applicable, will be validly issued,
fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
foregoing registration statement.
Very truly yours,
/s/ TORYS
E-41