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EXHIBIT 99.8
AUTOMATIC OPTION GRANT
ENDOSONICS CORPORATION
NON-STATUTORY STOCK OPTION AGREEMENT
AGREEMENT made this 5th day of November, 1996 by and between
Endosonics Corporation, a corporation organized and existing under the laws of
the State of Delaware (the "Company"), and Xxxxx Xxxxxxxx (the "Optionee").
WITNESSETH:
RECITALS
A. The Company's Board of Directors (the "Board") has
adopted the Company's Restated 1988 Stock Option Plan (the "Plan") for the
purpose of attracting and retaining the services of employees, consultants and
non-employee Board members who contribute to the management, growth and
financial success of the Company or its parent or subsidiary corporations.
B. The Optionee is a non-employee Board member who is
entitled to receive an option to acquire shares of the Company's common stock
(the "Common Stock") pursuant to the automatic option grant program implemented
for non-employee Board members under the Plan. This Agreement is executed
pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the automatic option grant made to such Optionee thereunder.
C. The granted option is intended to be a non-statutory
stock option which does not satisfy the requirements of Section 422 of the
Internal Revenue Code.
D. For purposes of this Agreement, the following
definitions shall be in effect:
Board Member: The Optionee shall be deemed to be a Board
Member for so long as such individual continues to serve as a member of
the Company's Board of Directors.
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Fair Market Value: The Fair Market Value per share of Common
Stock on any date in question shall be determined in accordance with the
following provisions:
(i) If the Common Stock is not at the time listed
or admitted to trading on any stock exchange but is traded on the Nasdaq
National Market, then the market value shall be the closing selling
price per share of Common Stock on the date in question, as such prices
are reported by the National Association of Securities Dealers on Nasdaq
National Market System. If there is no reported closing selling price
on the date in question, then the closing selling price on the last
preceding date for which such quotation exists shall be determinative of
fair market value.
(ii) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair market value
shall be the closing selling price per share of Common Stock on the date
in question on the stock exchange serving as the primary market for the
Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no reported sale of
Common Stock on such exchange on the date in question, then the fair
market value shall be the closing selling price on the exchange on the
last preceding date for which such quotation exists.
TERMS
1. GRANT OF OPTION. Pursuant to the provisions of
Article Three of the Plan, there is hereby automatically granted to the
Optionee, on November 5, 1996 (the "Grant Date"), a stock option to purchase up
to 10,000 shares of Common Stock (the "Option Shares") upon the terms and
conditions set forth in this Agreement and in the Plan (including Article Three
thereof). The Option Shares shall be purchasable in accordance with such terms
and conditions at the purchase price of $12.75 per share (the "Option Price").
2. OPTION TERM. This option shall have a maximum term
of ten (10) years measured from the Grant Date and shall accordingly expire at
the close of business on November 4, 2006 (the "Expiration Date"), unless
sooner terminated in accordance with Paragraph 5 or 7A of this Agreement.
3. LIMITED TRANSFERABILITY. This option, together with
the special stock appreciation right provided under Paragraph 7.C, shall not be
transferable or assignable by the Optionee except for a transfer of this option
by will or by the laws of inheritance following the Optionee's death.
Accordingly, this option, together with the special stock appreciation right
provided under Paragraph 7.C, may be exercised, during the Optionee's
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lifetime, only by the Optionee. Any attempt to assign, pledge, transfer,
hypothecate or otherwise dispose of this option, and any levy of execution,
attachment or similar process on this option, shall be null and void.
4. EXERCISABILITY.
A. Except as provided in Paragraph 4B below, this option
shall become exercisable for the Option Shares in a series of installments as
follows:
(i) The option shall become exercisable for
twenty-five percent (25%) of the Option Shares upon the Optionee's
completion of twelve (12) months of continuous service as a Board
Member measured from the Grant Date.
(ii ) The option shall become exercisable for an
additional twenty-five percent (25%) of the Option Shares upon the
Optionee's completion of twenty-four (24) months of continuous service
as a Board Member measured from the Grant Date.
(iii) The option shall become exercisable for an
additional twenty-five percent (25%) of the Option Shares upon the
Optionee's completion of thirty-six (36) months of continuous service
as a Board Member measured from the Grant Date.
(iv ) The option shall become exercisable for the
balance of the Option Shares upon the Optionee's completion of
forty-eight (48) months of continuous service as a Board Member
measured from the Grant Date.
B. Should the Optionee die or become permanently
disabled (as defined in Section 22(e)(3) of the Internal Revenue Code) while
serving as a Board Member, then the option shall accelerate in full and become
exercisable for all of the Option Shares subject to the option at the time of
such death or permanent disability.
C. Once this option becomes exercisable for one or more
installments of the Option Shares, those installments shall accumulate, and
this option shall remain exercisable for the accumulated installments until the
Expiration Date or sooner termination of the option term under Paragraph 5 or
Paragraph 7A of this Agreement.
D. This option shall not become exercisable for any
additional Option Shares following the Optionee's cessation of service as a
Board Member.
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5. CESSATION OF BOARD MEMBERSHIP. Should the Optionee's
service as a Board Member cease while this option remains outstanding, then the
option term specified in Paragraph 2 shall terminate (and this option shall
cease to be exercisable) prior to the Expiration Date in accordance with the
following provisions:
(i) Should the Optionee cease service as a Board
Member for any reason (other than death) while holding this option, then
the period for exercising this option shall be reduced to the six
(6)-month period commencing with the date of such cessation of service.
During such limited period of exercisability, this option may not be
exercised for more than the number of Option Shares (if any) for which
it is exercisable on the date the Optionee ceased service as a Board
Member. Upon the expiration of such six (6)-month period, the option
shall terminate and cease to be outstanding.
(ii) Should the Optionee die either while serving
as a Board Member or during the six (6)-month period following the
cessation of service as a Board Member, then the personal representative
of the Optionee's estate (or the person or persons to whom the option is
transferred pursuant to the Optionee's will or in accordance with the
laws of inheritance) shall have the right to exercise this option for
any or all of the Option Shares for which this option is exercisable on
the date the Optionee ceased service as a Board Member, less any Option
Shares subsequently purchased by the Optionee prior to death. Such
right shall lapse, and this option shall cease to be outstanding, upon
the expiration of the twelve (12)-month period measured from the date of
the Optionee's death.
(iii) In no event may this option be exercised at
any time after the specified Expiration Date.
(iv ) Upon the Optionee's cessation of Board service
for any reason, this option shall immediately terminate and cease to be
outstanding with respect to any and all Option Shares for which such
option is not otherwise at that time exercisable in accordance with the
normal exercise provisions of Paragraphs 4.A and 4.B or the special
acceleration provisions of Paragraph 7.
6. ADJUSTMENT IN OPTION SHARES. If any change is made
to the Company's outstanding Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the Company's
receipt of consideration, appropriate adjustments shall automatically be made
to the class and/or number of securities subject to this option and the Option
Price payable per share in order to reflect such transaction or change and
thereby preclude the dilution or enlargement of benefits hereunder.
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7. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE
TAKE-OVER.
A. In the event of any of the following stockholder-approved
transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which the Company
is not the surviving entity, except for a transaction the principal
purpose of which is to change the State of the Company's incorporation,
(ii ) the sale, transfer or other disposition of
all or substantially all of the assets of the Company, or
(iii) any reverse merger in which the Company is the
surviving entity but in which fifty percent (50%) or more of the
Company's outstanding voting stock is transferred to holders different
from those who held the stock immediately prior to such merger,
this option (if outstanding at the time but not
otherwise fully exercisable) shall automatically accelerate so that such option
shall, immediately prior to the specified effective date for the Corporate
Transaction, become fully exercisable for all of the Option Shares and may be
exercised for all or any portion of such shares. Upon the consummation of the
Corporate Transaction, this option shall terminate and cease to be outstanding.
B. Should there occur any Change in Control of the
Company, then this option (if outstanding at the time but not otherwise fully
exercisable) shall automatically accelerate so that such option shall,
immediately prior to the specified effective date for the Change in Control,
become fully exercisable for all the Option Shares and may be exercised for all
or any portion of such shares at any time prior to the Expiration Date or
sooner termination of the option term under Paragraph 5 or Paragraph 7A of this
Agreement. For purposes of this Agreement, a CHANGE IN CONTROL shall be deemed
to occur in the event:
(i) any person or related group of persons (other
than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the meaning of Rule
13d-3 of the Securities Exchange Act of 1934, as amended (the "1934
Act") of securities possessing more than twenty-five percent (25%) of
the total combined voting power of the Company's outstanding securities
pursuant to a tender or exchange offer which the Board does not
recommend the Company's stockholders to accept; or
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(ii ) there is a change in the composition of the
Board over a period of twenty-four (24) consecutive months or less such
that a majority of the Board members (rounded up to the next whole
number) ceases, by reason of one or more proxy contests for the election
of Board members, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during
such period by at least two-thirds of the Board members described in
clause (A) who were still in office at the time such election or
nomination was approved by the Board.
C. Should a Hostile Take-Over of the Company occur at
any time after this option has been outstanding for a period of at least six
(6) months measured from the Grant Date, then this option (if outstanding at
the time) shall automatically be cancelled upon the effective date of such
Hostile Take-Over, and the Optionee shall, in exchange, receive a cash
distribution from the Company. Such distribution shall be in an amount equal
to the excess of (i) the Take-Over Price of the shares of Common Stock at the
time subject to this option (whether or not the option is otherwise at the time
exercisable for such shares) over (ii) the aggregate Option Price payable for
such shares. The cancellation of this option and the cash distribution to be
paid in connection therewith is hereby pre-approved by the Plan Administrator.
Accordingly, the cash distribution shall be made to the Optionee within five
(5) days following the effective date of the Hostile Take-Over, and no further
consent of the or the Plan Administrator or the Board shall be required at the
time of the actual cancellation and cash distribution. For purposes of this
Paragraph 7C, the following definitional provisions shall be in effect:
A HOSTILE TAKE-OVER shall be deemed to occur in the
event (i) any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company) directly
or indirectly acquires beneficial ownership (within the meaning of
Rule 13d-3 of the 0000 Xxx) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer which
the Board does not recommend the Company's stockholders to accept and
(ii) more than fifty percent (50%) of the securities so acquired in
such tender or exchange offer are accepted from holders other than
Company officers and directors participating in the Plan.
The TAKE-OVER PRICE per share shall be deemed to be equal to
the greater of (a) the Fair Market Value per share of Common Stock on
the date of the option cancellation or (b) the highest reported price
per share paid in effecting the Hostile Take-Over.
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D. This Agreement shall not in any way affect the right
of the Company to adjust, reclassify, reorganize or otherwise make changes in
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
E. If this option is assumed in connection with a
Corporate Transaction, then this option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of
such Corporate Transaction had the option been exercised immediately prior to
such Corporate Transaction, and appropriate adjustments shall also be made to
the Option Price, provided the aggregate Option Price shall remain the same.
8. PRIVILEGE OF STOCK OWNERSHIP. The Optionee shall not
have any stockholder rights with respect to the Option Shares until such
individual shall have exercised the option and paid the Option Price for the
purchased shares.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option for one or more
Option Shares for which this option is at the time exercisable, the Optionee
(or in the case of exercise after the Optionee's death, the Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Execute and deliver to the Secretary of the
Company a written notice of exercise (the "Exercise Notice"), in
substantially the form of Exhibit I attached hereto, in which there is
specified the number of Option Shares for which the option is exercised.
(ii) Pay the aggregate Option Price for the
purchased shares in one or more of the following alternative forms:
- full payment in cash or check made payable
to the Company's order;
- full payment in shares of Common Stock held
by the Optionee for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date;
- full payment through a broker-dealer sale
and remittance procedure pursuant to which the Optionee shall
provide irrevocable written instructions (I) to a designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the
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Company, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate Option Price
payable for the purchased shares and (II) to the Company to
deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale transaction.
(iii) Furnish to the Company appropriate
documentation that the person or persons exercising the option (if other
than the Optionee) have the right to exercise this option.
B. For purposes of this Agreement, the Exercise Date
shall be the date on which the Exercise Notice shall have been delivered to the
Company. Except to the extent the sale and remittance procedure specified
above may be utilized in connection with the exercise of this option, payment
of the Option Price for the purchased shares must accompany such notice.
C. As soon as practical after the exercise of this
option in accordance with the provisions of this Agreement, the Company shall
mail or deliver to or on behalf of the Optionee (or to the other person or
persons exercising this option) a stock certificate representing the purchased
shares.
D. In no event may this option be exercised for any fractional shares.
10. LEGALITY OF ISSUANCE. The Company shall not be
obligated to sell or issue any Option Shares pursuant to this Agreement if such
sale or issuance might, in the opinion of the Company and the Company's
counsel, constitute a violation by the Company of any applicable law or
regulation.
11. BINDING EFFECT. Subject to the limitations set forth
in Paragraph 3 of this Agreement, this Agreement shall be binding upon, and
shall inure to the benefit of, (i) the executors, administrators, heirs, legal
representatives and assigns of the Optionee and (ii) the successors and assigns
of the Company.
12. NO IMPAIRMENT OF RIGHTS. Nothing in this Agreement
or in the Plan shall be deemed to impair or otherwise restrict the rights of
the Company or the stockholders to remove the Optionee from the Board at any
time pursuant to the provisions of applicable law.
13. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts entered into and wholly to be performed within the State of
California by residents of such State.
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14. NOTICES. All notices and other communications under
this Agreement shall be in writing. Unless and until the Optionee is notified
in writing to the contrary, all notices, communications and documents directed
to the Company and related to this Agreement, if not delivered by hand, shall
be mailed, addressed as follows:
Endosonics Corporation
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxxx, XX 00000
Unless and until the Company is notified in writing to the
contrary, all notices, communications and documents intended for the Optionee
and related to this Agreement, if not delivered by hand, shall be mailed to the
Optionee's last known address as shown on the Company's books.
Notices and communications shall be mailed by first class
mail, postage prepaid; documents shall be mailed by registered mail, return
receipt requested, postage prepaid. All mailings and deliveries related to
this Agreement shall be deemed received only when actually received, unless
properly mailed by registered mail, return receipt requested, in which event
they shall be deemed received two (2) days after the date of mailing.
15. CONSTRUCTION. This Agreement and the option
evidenced hereby are issued pursuant to the automatic grant program in effect
for non-employee Board members under Article Three of the Plan and shall be
subject to the express terms and provisions of the Plan applicable to such
automatic grants. Such terms and provisions are hereby incorporated into this
Agreement and made a part hereof as if expressly included in this Agreement.
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IN WITNESS WHEREOF, Endosonics Corporation has caused this
Agreement to be executed on its behalf by its duly-authorized officer and the
Optionee has executed this Agreement, all on the day and year first above
written.
ENDOSONICS CORPORATION
By _________________________________________
Title: ____________________________________
____________________________________________
XXXXX XXXXXXXX, OPTIONEE
Address __________________________________
___________________________________________
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EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Endosonics Corporation (the "Company") that I
elect to purchase _________ shares of the Company's Common Stock (the
"Purchased Shares") pursuant to that certain option (the "Option") granted to
me on November 5, 1996 to purchase up to 10,000 shares of such Common Stock at
an option price of $12.75 per share (the "Option Price").
Concurrently with the delivery of this Exercise Notice to the
Secretary of the Company, I shall pay to the Company the Option Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Company evidencing the Option and shall deliver whatever additional documents
may be required by such agreement as a condition for exercise. Alternatively,
I may utilize the special broker/dealer sale and remittance procedure specified
in my agreement to effect payment of the option price for the purchased shares.
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Date Xxxxx Xxxxxxxx, Optionee
Address:
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Print name in exact manner
it is to appear on the
stock certificate:
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Address to which certificate
is to be sent, if different
from address above:
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Social Security Number:
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