Exhibit 4.1
XXXXXXX & XXXXXXX/BIOSENSE (ISRAEL) LTD.
1995 STOCK OPTION PLAN
I. PURPOSE
On September 4, 1997, Xxxxxxx & Xxxxxxx ("J&J"), a New Jersey
corporation, entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Biosense Inc. (the "Company"), a Delaware corporation.
Under the terms of the Merger Agreement, a wholly-owned subsidiary of
J&J was merged with and into the Company (the "Merger"). Biosense
(Israel) Ltd. ("Biosense") is a subsidiary of the Company. Under the
terms of the Merger Agreement, options (the "Original Options") on
shares of the former common stock, par value $0.01 per share, of the
Company in effect immediately prior to the Effective Time (as defined in
the Merger Agreement) under the Biosense (Israel) Ltd. 1995 Stock Option
Plan (the "Original Plan") upon the effectiveness of the Merger became
an option to receive shares of the common stock, par value 1.00 per
share, of J&J. J&J has agreed to substitute for the Original Options for
shares of the common stock, par value $1.00 per share, of J&J
("Substituted Options"). It is the intention of J&J to treat as
"employees" under this Plan those holders of Substituted Options who are
or have been employed by or provide or have provided services to
Biosense and by companies directly or indirectly through one or more
subsidiaries controlling, controlled by or under common control with
Biosense (each an "Affiliate").
Except for options issued shortly after the effectiveness of
the Merger in substitution for Original Options, no further options
shall be granted under this plan (the "Plan").
The Substituted Options granted under the Plan are intended to
be non-qualified options ("Non-Qualified Options") since each of the
Original Options was a non-qualified Option. No substituted Option is
intended to be an "incentive stock option" as described in Section 422
of the Code.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
The total number of shares of common stock, par value $1.00 per
share, of J&J which may be purchased pursuant to the exercise of
Substituted Options granted under the Plan shall not exceed, in the
aggregate, that number of shares of Company common stock for which
Original Options were granted under the Original Plan multiplied by the
Exchange Ratio (as defined in the Merger Agreement) (the "Shares"). In
the case of each Substituted Option, the number of Shares subject
thereto shall be determined by multiplying the Exchange Ratio by the
number of shares of Company common stock subject to the Original Option
and rounding such result down to the nearest whole number. The exercise
price for each Share subject to a Substituted Option shall be the
exercise price set forth in the Original Option divided by the Exchange
Ratio.
Shares acquired under the Plan may be either authorized but
unissued Shares, Shares of issued xxxxx held in J&J's treasury, or both,
at the discretion of J&J. If and to the extent that Substituted Options
granted under the Plan expire or terminate without having been
exercised, the Shares covered by such expired or terminated options
shall not become available again for award under the Plan.
III. ADMINISTRATION
The Compensation Committee of the board of directors of J&J
(the "Compensation Committee") shall administer the Plan.
A majority of the members of the Compensation Committee shall
constitute a quorum, and the act of a majority of the members of the
Compensation Committee present and voting shall constitute an action of
such committee.
Subject to the express provisions of the Plan, the Compensation
Committee shall also have the authority to construe the Plan and the
options granted thereunder, to amend the Plan and the Substituted
Options granted thereunder, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the terms and provisions
of the respective Substituted Options (which need not be identical) and
to make all other determinations necessary or advisable for
administering the Plan, provided they do not affect the principles of
the Plan. The Compensation Committee also shall have the authority to
require as a condition of the granting of any such Substituted Option,
to the extent required as a condition to the grant of the Original
Option, that the employee, or such other person, as the case may be,
agree (i) not sell or otherwise dispose of Shares acquired pursuant to
the award of Substituted Options for a period of six months following
the date of acquisition of such Shares, and (ii) that in the event of
termination of employment of such employee, other than as a result of
dismissal without cause, such employee, or such other person, as the
case may be, will not, for a period of time fixed at the time of the
grant of the Original Option, enter into
any other employment or participate directly or indirectly in any other
business or enterprise which is competitive with the business of
Biosense or any Affiliate, or enter into any employment in which such
employee will be called upon to utilize special knowledge obtained
through employment with Biosense or any Affiliate.
Without limiting the foregoing, upon granting a Substituted
Option, the Compensation Committee shall notify the person to whom the
option shall have been granted and shall deliver to such person an
Option Agreement, evidencing such Substituted Option. An award of a
Substituted Option shall immediately expire if the person to whom the
Compensation Committee has decided to grant a Substituted Option shall
not have (and no Substituted Option shall be exercisable unless and
until such person has) signed the Option Agreement and returned it to
J&J within thirty days after delivery to such individual of the Option
Agreement. Subject to the express provisions of this Plan, the
Compensation Committee may prescribe in the Option Agreement for each
holder thereof such provisions as are substantially equivalent to those
set forth in the option agreement of such holder under the Original
Plan.
Each Substituted Option and the Shares which the holder thereof
will receive when the Substituted Option is exercised must be held by a
Trustee for a period of at least two years from the date of the grant of
the Original Option to which such Substituted Option relates. The Shares
issued pursuant to a Substituted Option will be registered with the
appropriate authority indicated by J&J.
The determination of the Compensation Committee on matters
referred to in this Article III shall be conclusive.
The Compensation Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the administration
of the Plan and may rely upon any opinion received from any such counsel
or consultant and any computation received from any such consultant or
agent. Expenses incurred by the Compensation Committee in the engagement
of such counsel, consultant or agent shall be paid by J&J. No member of
the Compensation Committee shall be liable for any action or
determination made in good faith with respect to the Plan or to the
award of any Substituted Option granted hereunder.
IV. ELIGIBILITY
Substituted Options shall be granted only to holders of
Original Options to the extent that such Original Options remain
unexpired and unexercised at the Effective Time of the Merger.
Except as set forth in the prior sentence, the Plan does not
create a right in any employee to participate in the Plan nor does it
create a right in any employee to have any Substituted Options granted
to him or her.
The holder of a Substituted Option shall have none of the
rights of a shareholder with respect to Shares underlying such option
until such Shares shall have been issued upon exercise of the
Substituted Option.
V. OPTION PRICE AND PAYMENT
The price for each Share purchasable under any Substituted
Option granted hereunder shall be the exercise price per share of
Biosense Inc. common stock pursuant to the Original Option divided by
the Exchange Ratio.
Upon the exercise of a Substituted Option granted hereunder,
J&J shall cause the purchased Shares to be issued only when it shall
have received the full purchase price for the Shares in cash or by
certified check; provided, however, that in lieu of cash, the holder of
an option may, if and to the extent the terms of such Substituted Option
so provide and to the extent permitted by applicable law, exercise an
option (a) in whole or in part, by delivering to J&J shares of common
stock of J&J (in proper form for transfer and accompanied by all
requisite stock transfer tax stamps or cash in lieu thereof) owned by
such holder having a fair market value equal to the exercise price
applicable to that portion of the option being exercised by the delivery
of such Shares or (b) in part, by delivering to J&J an executed
promissory note, on such terms and conditions as the Compensation
Committee shall determine, at the time of grant, in its sole discretion;
provided, however, that the principal amount of such note shall not
exceed ninety percent (90%) (or such lesser percentage as would be
permitted by applicable margin regulations) of the aggregate purchase
price of the Shares then being purchased pursuant to the exercise of
such Substituted Option. The fair market value of the stock so delivered
shall be determined as of the date immediately preceding the date on
which the option is exercised, or as otherwise may be required in order
to comply with or to conform to the requirements of any applicable laws
or regulations.
The fair value of Shares shall be, on a per share basis, the
average of the high and low price per share for such Shares as reported
by the Wall Street Journal or other financial reporting service used by
J&J as of the date prior to surrender of such stock.
VI. USE OF PROCEEDS
The proceeds of the sale of Shares pursuant to the Plan are to
be added to the general funds of J&J and used for its general corporate
purposes as the Board of Directors in its discretion shall determine.
VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT
OF EXERCISE
Any Substituted Option shall be immediately exercisable and
shall have a term equal to what, but for the Merger, would have been the
remaining unexpired term of the Original Option to which it relates.
Any Substituted Option not exercised in full within the period
of exercisability specified therein shall, at the end of such period,
expire as to the unexercised part.
In no event shall a Substituted Option granted hereunder be
exercisable for a fraction of a Share.
VIII. EXERCISE OF OPTIONS
Substituted Options granted under the Plan shall be held by a
Trustee until the date (the "release date") two years following the date
of grant of the Original Options to which they relate. After the release
date with respect to a Substituted Option, such option can be exercised
by the holder as to all or part of the Shares covered thereby by the
giving of written notice of the exercise thereof to the Director, Stock
Option Administration, of J&J or such other agent of J&J designated in
the Option Agreement at One Xxxxxxx & Xxxxxxx Plaza, New Brunswick, NJ
08933 U.S.A. specifying the number of Shares to be purchased and
delivering a certified or bank cashier's check in the amount of the
exercise price for the number of Shares being purchased or such other
consideration as may be permitted under Article V. Subject to the terms
of Articles XIII, XV and XVI, J&J shall cause certificates for the
Shares so purchased to be delivered to the optionee at his or her
address appearing in the records of Biosense or as may otherwise be
requested by such holder.
In case of a transfer by the Trustee to the beneficial holder
or a sale by the Trustee, according to the employee's instructions after
the period of two years the Trustee shall take such steps as may be
required to effect such sale and shall transfer such options/shares to
the purchaser concurrently with the receipt, or after having made
suitable arrangements to secure the payment of the proceeds, of the
purchase price in such transaction. The Trustee shall withhold from such
proceeds 30% or any other percentage, in case that the employee will
present specific confirmation for that percentage issued by the tax
authorities, from the amounts received, according to the Israel tax law
and shall remit the net amount to the beneficial owner, reporting to
such beneficial owner and to J&J the amount so withheld and paid to said
tax authorities.
IX. NON-TRANSFERABILITY OF OPTIONS
An option granted hereunder shall not be transferable, whether by
operation of law or otherwise, other than by will or the laws of descent
and
distribution, nor shall any option granted hereunder be subject to a
lien or mortgage, and any option granted hereunder shall be exercisable,
during the lifetime of the holder, only by such holder.
X. TERMINATION OF EMPLOYMENT
Upon termination of employment of any option holder with
Biosense and any and all Affiliates, a Substituted Option previously
granted to such holder, unless otherwise specified by the Compensation
Committee in such Non-Qualified Option, shall, to the extent not
theretofore exercised, terminate and become null and void; provided,
however, that:
(a) if the employee shall die while in the employ of such
corporation or during either the two year period specified in clause (b)
below and at such time such employee was entitled to exercise a
Substituted Option as herein provided, the legal representative of such
employee, or such person who acquired such Substituted Option by bequest
or inheritance or by reason of the death of the employee, may, not later
than one year from the date of death, exercise such Substituted Option,
to the extent not theretofore exercised, in respect of any or all of
such number of Shares as specified by the Compensation Committee in such
Option; and
(b) if the employment of any employee to whom such Substituted
Option shall have been granted shall terminate by reason as of the
employee's retirement (at such age or upon such conditions as shall be
specified by the Compensation Committee), disability or dismissal by the
employer other than for cause (as defined below), and at such time
employee is entitled to exercise such Substituted Option as herein
provided, such employee shall have the right to exercise such
Substituted Option, to the extent not theretofore exercised, in respect
of any or all of such number of Shares as specified by the Compensation
Committee in such option, at any time up to and including (i) two years
after the date of such termination of employment in the case of
termination by reason of retirement or dismissal other than for cause
and (ii) two years after the date of termination of employment in the
case of termination by reason of disability.
In no event, however, shall any person be entitled to exercise
any Substituted Option after the expiration of the period of
exercisability of such Substituted Option as specified therein.
If an employee voluntarily terminates his or her employment, or
is discharged for cause, any Substituted Option granted hereunder shall,
unless otherwise specified by the Compensation Committee in the option,
forthwith terminate with respect to any unexercised portion thereof.
If a Substituted Option granted hereunder shall be exercised by
the legal representative of a deceased employee or former employee, or
by a person who acquired a Substituted Option granted hereunder by
bequest or inheritance or by reason of the death of any employee or
former employee,
written notice of such exercise shall be accompanied by a certified copy
of a letter testamentary or equivalent proof of the right of such legal
representative or other person to exercise such Substituted Option.
For the purposes of the Plan, the term termination "for cause"
shall mean (i) with respect to an employee, who is a party to a written
agreement with, or, alternatively, participates in a compensation or
benefit plan of Biosense or an Affiliate, which agreement or plan
contains a definition of "for cause" or "cause" (or words of like
import) for purposes of termination of employment thereunder by
Biosense, "for cause" or "cause" as defined in the most recent of such
agreements or plans, or (ii) in all other cases, as determined by the
Compensation Committee, in its sole discretion, including, without
limitation, (a) the willful commission by an employee of a criminal or
other act that causes or may cause substantial economic damage or
substantial injury to the business reputation of Biosense or an
Affiliate; (b) the commission by an employee of an act of fraud in the
performance of such employee's duties on behalf of Biosense or an
Affiliate; or (c) the continuing willful failure of an employee to
perform the duties of such employee to Biosense or an Affiliate (other
than such failure resulting from the employee's incapacity due to
physical or mental illness), after written notice thereof (specifying
the particulars thereof in reasonable detail) and a reasonable
opportunity to be heard and cure such failure are given to the employee
by the Compensation Committee or such employee's management. For
purposes of the Plan, no act, or failure to act on the employee's part
shall be considered "willful" unless done or omitted to be done by the
employee not in good faith and without reasonable belief that the
employee's action or omission was in the best interest of Biosense or an
Affiliate.
For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and a corporation if, at the
time of the determination, the individual was an "employee" of such
corporation. If an individual is on military, sick leave or other bona
fide leave of absence, such individual shall be considered an "employee"
for purposes of the exercise of an option and shall be entitled to
exercise such Option during such leave if the period of such leave does
not exceed ninety (90) days, the employment relationship shall be deemed
to have terminated on the ninety-first (91st) day of such leave, unless
the individuals right to re-employment is guaranteed by statute or
contract.
A termination of employment shall not be deemed to occur by
reason of (i) the transfer of an employee from employment by Biosense to
employment an Affiliate, or (ii) the transfer of an employee from
employment by one Affiliate of Biosense to another such Affiliate or to
Biosense.
In the event that a holder of a Substituted Option is employed
by an Affiliate of J&J that is liquidated or dissolved or which ceases
to be an Affiliate of J&J, the Substituted Option of such holder shall
terminate as to any unexercised portion on the date 30 days after the
occurrence of such event and without regard to any limitation set forth
or imposed pursuant to Article VII.
XI. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
In the event of any change in the outstanding Shares through
merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, split-up, split-off, spin-off, combination of shares,
exchange of shares, or other like change in capital structure of J&J, an
adjustment shall be made to each outstanding Substituted Option so that
each such Substituted Option shall thereafter be exercisable for such
securities, cash and/or other property as would have been received in
respect of the Shares subject to such Substituted Option had such
Substituted Option been exercised in full immediately prior to such
change, and such an adjustment shall be made successively each time any
such change shall occur. The term "Shares" after any such change shall
refer to the securities, cash and/or property then receivable upon
exercise of a Substituted Option. In addition, in the event of any such
change, the Compensation Committee, shall make any further adjustment as
may be appropriate to the maximum number of Shares subject to the Plan,
the maximum number of Shares which may be granted to any one employee,
and the number of Shares and price per Share subject to outstanding
Substituted Options as shall be equitable to prevent dilution or
enlargement of rights under such Substituted Options, and the
determination of the Compensation Committee as to these matters shall be
conclusive.
XII. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on Biosense or on any
Affiliate to continue the employment of any holder of a Substituted
Option; and it shall not impose any obligation on the part of any holder
of a Substituted Option to remain in the employ of Biosense or of any
Affiliate thereof. Nothing in this Article is intended to supersede the
express terms of any written employment agreement entered into by
Biosense or an Affiliate and the holder of a Substituted Option or the
requirements of any applicable laws or governmental regulations.
XIII. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES
Upon any exercise of an option which may be granted hereunder
upon the payment of the purchase price, a certificate or certificates
for the Shares shall be issued by J&J in the name of the person
exercising the Substituted Option and shall be delivered to or upon the
order of such person or persons.
J&J may endorse such legend or legends upon the certificates
for Shares issued pursuant to the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such Shares
as the Board of Directors, in its discretion, determines to be necessary
or appropriate to (i) prevent a violation of, or to perfect an exemption
from, the registration
requirements of the Securities Act, or (ii) implement the provisions of
the Plan and any agreement between Biosense and the optionee with
respect to such Shares.
J&J shall pay all issue or transfer taxes, if any, with respect
to the issuance or transfer of Shares upon exercise of an option, other
than taxes with respect to the transfer of Shares to any person other
than the holder of such Option, as well as all fees and expenses
necessarily incurred by J&J in connection with such issuance or
transfer, except fees and expenses which may be required for the filing
or amending of a Registration Statement under the Securities Act, which
fees and expenses shall be borne by the recipient of the Shares unless
such Registration Statement has been filed by J&J for its own corporate
purposes (and J&J so states) in which event the recipient of the Shares
shall bear only such fees and expenses as are attributable solely to the
inclusion of the Shares he or she receives in the Registration
Statement.
All Shares issued as provided herein shall be fully paid and
nonassessable to the extent permitted by law.
XIV. WITHHOLDING TAXES
Biosense may require an employee exercising a Non-Qualified
Option granted hereunder to reimburse the corporation that employs such
employee for any taxes required by any government to be withheld or
otherwise deducted and paid by such corporation in respect of the
issuance, transfer or disposition of such Shares. In lieu thereof, the
corporation that employs such employee shall have the right to withhold
the amount of such taxes from any other sums due or to become due from
such corporation to the employee upon such terms and conditions as the
Compensation Committee shall prescribe. The corporation that employs
such employee may, in its discretion, hold the stock certificate to
which such employee is entitled upon exercise of an option as security
for the payment of such withholding tax liability, until cash sufficient
to pay that liability has been accumulated. In addition, at any time at
which J&J or Biosense becomes subject to a withholding obligation under
any applicable law with respect to the exercise of a Non-Qualified
Option (the "Tax Date"), except as set forth below, a holder of a
Non-Qualified Option may elect to satisfy, in whole or in part, such
holder's related personal tax liabilities (an "Election") by (i)
directing J&J or Biosense to withhold from Shares issuable in the
related exercise either a specified number of Shares or Shares having a
specified value (in each case) not in excess of the related personal tax
liabilities), (ii) tendering Shares previously issued pursuant to the
exercise of an option or other shares of J&J's common stock owned by the
holder or (iii) combining any or all of the foregoing options in any
fashion. An Election shall be irrevocable. The withheld Shares and other
shares tendered in payment should be valued at their fair market value
(determined in accordance with the principles set forth in Article V of
the Plan) on the Tax Date. The Compensation Committee may disapprove of
any Election, suspend or terminate the right to make Elections or
provide that the right to make Elections shall not apply to particular
grants, Shares or exercises. If a holder is a person subject to Section
16 of the Exchange Act then (1) any Election by such holder must be made
(i) at least six months prior to the relevant Tax Date or (ii) on or
prior to the relevant Tax Date and during a period that begins on the
third business day following the date of release of publication of J&J's
quarterly or annual summary statements of sales and earnings and that
ends on the twelfth business day following such date and (2) the
Election may not be made with respect to an exercise, or the withholding
obligation arising thereon, if the relevant Non-Qualified Option was
granted six months or less prior to the date of Election. The
Compensation Committee may impose any other conditions or restrictions
on the right to make the Election as it shall deem appropriate.
The provisions of the existing tax treaty between Israel and
the United States will apply.
XV. LISTING OF SHARES AND RELATED MATTERS
The Compensation Committee may delay any issuance or delivery
of Shares upon the exercise of any Option if it determines that listing,
registration
or qualification of Shares or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition
of, or in connection with, the sale or purchase of Shares under the
Plan, until such listing, registration, qualification, consent or
approval shall have been effected or obtained, or otherwise provided
for, free of any conditions not acceptable to the Compensation
Committee.
XVI. AMENDMENT OF THE PLAN
The Compensation Committee may, from time to time, amend the
Plan, provided that, without the approval of the shareholders of J&J,
there shall not be made any amendment which will (i) increase the total
number of Shares reserved for Options under the Plan (other than an
increase resulting from an adjustment provided for in Article XI), (ii)
modify the provisions of the Plan relating to eligibility, or (iii)
materially increase the benefits accruing to participants under the
Plan. The rights and obligations under any option granted before
amendment of the Plan shall not be adversely affected by an amendment of
the Plan or option without the consent of the holder of the option.
XVII. TERMINATION OR SUSPENSION OF THE PLAN
The Compensation Committee may at any time suspend or terminate
the Plan. The Plan, unless sooner terminated under Article XX or by
action of the Compensation Committee, shall terminate at the close of
business on the Termination Date. Options may not be granted while the
Plan is suspended or after it is terminated. Rights and obligations
under any Substituted Option granted while the Plan is in effect shall
not be altered or impaired by suspension or termination of the Plan,
except upon the consent of the person to whom such options were granted.
The power of the Compensation Committee to construe and administer any
Substituted Options granted prior to the termination or suspension of
the Plan under Article III shall continue after such termination or
during such suspension.
XVIII. GOVERNING LAW
The Plan and the Options and all related matters shall be
governed by, and construed and enforced in accordance with, the laws of
Israel.
XIX. INVALIDITY; TAXABILITY
The invalidity or illegality of any provision hereof shall not
be deemed to affect the validity of any of other provision. Also, it
should be noted that
in the event of failure to fulfill the conditions hereunder and/or the
provisions of Israeli tax law, Substituted Options granted hereunder
will be taxable according to Israel tax law.
XX. EFFECTIVE DATE
The Plan shall become effective at the Effective Time under the
Merger Agreement.
