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EXHIBIT 10.3
MEDEX, INC.
NON-EMPLOYEE DIRECTOR RESTRICTED
STOCK OPTION PLAN II
1. Purpose
The Medex, Inc. Non-Employee Director Restricted Stock Option Plan II (the
"Plan") is intended to strengthen the ability of Medex, Inc. (the "Company") to
attract and retain the services of knowledgeable and experienced persons who,
through their efforts and expertise, can make a significant contribution to the
success of the Company's business by serving as members of the Company's Board
of Directors and to provide additional incentive for such non-employee directors
to continue to work for the best interests of the Company and its stockholders
through continuing ownership of its Common Stock, $.01 par value ("Common
Stock"). Accordingly, the Company will grant to each non-employee director (the
"Optionee") an option (the "Option") to purchase shares of Common Stock of the
Company on the terms and conditions hereinafter established.
2. Administration of the Plan
The Plan shall be administered by a committee composed of employee
members(s) of the Board of Directors of the Company (the "Committee"). The
interpretation and construction by the Committee of any provisions of the Plan
or of any agreement or other matters related to the Plan shall be final. The
Committee may from time to time adopt such rules and regulations for carrying
out the Plan as it may deem advisable. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan.
3. Stock Subject to the Plan
The shares to be issued under the Plan shall be made available either from
authorized but unissued shares of Common Stock of the Company or from shares of
Common Stock reacquired by the Company, including shares purchase in the open
market.
Shares issued under the Plan shall be subject to the terms, conditions and
restrictions specified in the Plan.
Subject to the provisions of the succeeding paragraphs of this Section 3,
the aggregate number of shares which may be issued under the Plan shall not
exceed 120,000 shares.
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If prior to May 25, 1999, Options issued under the Plan shall be
reacquired by the Company pursuant to the provisions hereof, such Options shall
again become available for issuance under the Plan.
In the event that the number of outstanding shares of Common Stock of the
Company shall be changed by reason of split-ups, combinations of shares,
recapitalization or stock dividends, the number of shares which may thereafter
be available under the Plan, the number of options held and the option exercise
price shall be appropriately adjusted as determined by the Committee so as to
reflect any such change.
4. Eligibility and Grant of Options
A. An Option to purchase 15,000 shares of the Company's Common stock shall
automatically be granted under the Plan to each serving non-employee director of
the Company on the date of the approval of this Plan by the Board of Directors
subject to the restrictions on exercise set out in Section Seven hereof.
B. Further, any new non-employee director who is first elected (elected for
the first time) a director of the Company following the adoption of this Plan by
the Board of Directors shall automatically upon election be granted Options to
purchase that number of shares which is determined by multiplying three thousand
(3000) by a number determined by subtracting the year in which the director is
elected from the year 1994. Theses Options shall also be subject to the
restrictions on exercise contained in Section Seven hereof.
C. No non-employee director to whom an Option has been granted or will be
granted shall be eligible to receive additional Option under this Plan.
D. The exercise price for Option granted under this Plan shall be the fair
market value of the stock at the time such Option is granted, which shall be the
date this Plan is approved by the Board of Directors or as to a new non-employee
director, the date of election to the Board of Directors. The fair market value
shall be determined by the "last transaction" price (or price of the stock on
the last trade) at which shares of the Company's stock are listed in the "NASDAQ
National Market System" quotation of the over the counter market at the close of
business at the date of granting the option, or if no quotation is made on that
date, on the next such quotation is made.
5. Non-Transferability of Options
The term of the Option shall be for a period of ten years from the date of
issuance. The right of the Optionee to purchase Common Stock through the
exercise of the Option, wholly or in part, shall be available to the Optionee at
any time during the term of the
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Option subject to restrictions on exercise in Section Seven hereof.
The Option shall be exercisable by the Optionee only while serving as a
director of the Company or upon his death or cessation of service as a director
of the Company. If the Optionee shall die while serving as a director of the
Company, his executor, personal representative or beneficiary shall have the
right to exercise the Option at any time within twelve (12) months from the date
of death in respect of the total number of shares as to which he would be
entitled to exercise at the date of his death, that is, those shares free of all
restrictions on exercise imposed by Section Seven hereof.
If the Optionee shall cease to serve as a director of the Company before
the Option shall have terminated, the Optionee may exercise the Option within
ninety (90) days after the date on which he ceases to serve as a director of the
Company, as to those shares which at the close of business on the date of
cessation of service as a director are free of all restrictions on exercise
imposed by Section 7 hereof.
No Option under the Plan shall be sold, assigned, pledged, encumbered or
otherwise transferred by the Optionee.
6. Exercise of Option
An Optionee electing to exercise an Option under the Plan shall give
written notice to the Company of such election and of the number of shares the
Optionee has elated to acquire. Until the Optionee has been issued a certificate
or certificates for the shares so acquired, the Optionee shall possess no
stockholder rights with respect to any such shares.
7. Restrictions on the Exercise of the Options and Sale of Shares Issued for
Such Options
No Option granted pursuant to this Plan shall be exercised prior to the
approval of this Plan by the shareholders of the Company at the next annual
meeting.
Options granted pursuant to Section 4(A) and Section 4(B) hereof shall not
be exercised by the Optionee while serving as a non-employee director except as
provide in the following paragraph.
The restrictions against exercise shall lapse cumulatively to the extent of
three thousand shares per year, starting on the date of approval of this Plan by
the shareholders of this Company, and thereafter on each anniversary of the date
of grant.
Upon the occurrence of the earlier of the death of the Optionee or the
Optionee's cessation of service as a director of the Company, Options as to
which the restrictions on exercise shall
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not have lapsed under the Plan, shall immediately lapse and revert to the
Plan.
Notwithstanding any of the foregoing restrictions, any free or restricted
Options acquired under the Plan may at any time be pledged or otherwise
hypothecated to secure borrowings by the Optionee to obtain the acquisition
price to be paid by the Optionee for such shares; provided, however, that the
amount of such borrowing may not exceed the acquisition price of such shares.
No shares shall be issued upon exercise of Options granted under the Plan
prior to the effective date of an S-8 Registration of the shares with the
Securities and Exchange Commission, which the Company undertakes to do, or in
violation of the requirements of Rule 16(B)(3) of the Securities and Exchange
Act of 1934.
Any questions as to whether and when there has been a cessation of service
as a director shall be determined by the Committee and its determination of such
questions shall be final.
8. Acceleration of Exercisability on Change in Control
Upon a Change in Control of the Company, all options theretofore granted
and not previously exercisable shall become fully exercisable to the same
extent and in the same manner as if they had become exercisable by passage of
time in accordance with the provisions of the Plan relating to periods of
exercisability.
For purposes of the Plan, a "Change in Control" of the Company shall mean a
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended ("Exchange Act"); provided that, without
limitation, such a change in control shall be deemed to have occurred if: (A)
any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (ad defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing 20% or more of the combined voting power of the Company's then
outstanding stock; (B) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any reason to
constitute a majority thereof, unless the election, or the nomination for
election by the Company's shareholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period; or (C) the business of the Company for
which the Optionee's services are principally performed is disposed of by the
Corporations pursuant to a partial or complete liquidation of the Company, a
sale of assets of the Corporation, or otherwise.
A Change in Control shall also be deemed to occur if the Company enters
into an agreement, the consummation of which would result in the occurrence of a
Change in Control of the Company, or
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any person (other than the Company) publicly announces an intention to take or
to consider taking actions which if consummated would constitute a Change in
Control of the Company.
9. Payment
The option exercise price shall be payable upon the exercise of the Option
and shall be payable in cash, by check or shares of Medex Common Stock of the
Company. If shares of Common Stock are tendered as payment of the option
exercise price, the value of such shares shall be their fair market value as of
the date of exercise as determined in section 4(D) hereof. If such tender would
result in the issuance of fractional shares of Common Stock, the Company shall
instead return the difference in cash or by check to the Optionee.
10. Notice of Election Under Section 83(b)
Each Optionee making an election under Section 83(b) of the Internal
Revenue Code of 1954, as amended, and the Regulations and Rulings promulgated
thereunder will provide a copy thereof to the Company within 30 days of the
filing of such election with the Internal Revenue Service.
11. Amendments to the Plan
The Board of Directors of the Company may at any time terminate or from
time to time modify or suspend the Plan, provided that no such termination or
modification without the approval of the stockholders of the Company shall:
(a) increase the maximum number of shares which may be issued under the
Plan in the aggregate or the number of shares which may be issued to each
non-employee director (except as permitted by the last two paragraphs of
Section 3);
(b) amend the option exercise price (except as permitted by the last
paragraph of Section 3); or reduce the vesting period;
(c) extend the period during which Options may be exercised or granted
under the Plan; or
(d) effect the rights of Optionee as to Options already granted.
12. Successor and Assigns
The provisions of the Plan shall be binding upon all successors and assigns
of an Optionee acquiring shares under the Plan, including, without limitation,
the estate of any such Optionee and the executions, administrators or trustees
of such estate, and any receiver, trustee in bankruptcy or representative of the
creditors of any such Optionee.
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13. Termination Date of the Plan
The Plan shall terminate on May 25, 1999; provided, however, that Options
granted on or before such date shall remain exercisable, in accordance with
their respective terms, after the termination of the Plan; and provided,
further, that it shall terminate as of the date of the next annual shareholders'
meeting of the Company if it is not approved by a majority of the shares present
and eligible to vote at that meeting.