Registrant requests automatic effectiveness upon filing as
per Rule 462 of the Securities Act of 1933
As filed with the Securities and Exchange Commission on August 14, 2003
Registration No. 333-_____
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM S-8
Registration Statement
Under
The Securities Act of 1933
_______________
MERGE TECHNOLOGIES INCORPORATED
(Exact Name of Registrant in its Charter)
Wisconsin 39-1600938
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1126 South 70th Street, Milwaukee, Wisconsin 53214-3151
(Address of principal executive offices) (Zip Code)
2003 Stock Option Plan of Merge Technologies Incorporated
(Full title of the plan)
Richard A. Linden, President & CEO
Merge Technologies Incorporated
1126 South 70th Street, Suite 107B
Milwaukee, Wisconsin 53214-3151
With a copy to:
Mitchell D. Goldsmith, Esquire
Dennis B. O'Boyle, Esquire
Shefsky & Froelich Ltd.
444 North Michigan, Suite 2500
Chicago, Illinois 60611
(Name and address of agent for service)
(414) 977-4000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of
Registred Registered Offering Price Per Aggregate Offering Registration
Share Price Fee
-------------------------------------------------------------------------------------------------------------
Common Stock, par 300,000 (1) $13.61 (2) $4,083,000.00 (2) $330.32
value $.01
(1) Subject to increase (or decrease) in accordance with Rule 416 of
Regulation C to reflect a merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the
corporate structure of the Registrant which results in a change in the
number of shares issuable pursuant to outstanding awards under the 2003
Stock Option Plan of Merge Technologies Incorporated (the "Plan").
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rules 457(c) and 457(h) of Regulation C, on the basis of
the average of the high and low prices of the shares of common stock
of the Registrant on the Nasdaq National Market on August 12, 2003.
PART II
---------
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are hereby incorporated by reference into
this Registration Statement:
1. Our Annual Report on Form 10-KSB, as amended, for fiscal year
ended December 31, 2002.
2. Our Quarterly Reports on Form 10-Q, as amended, for the
quarters ended March 31, 2003 and June 30, 2003.
3. Our Proxy Statement dated April 14, 2003, for our 2003 Annual
Meeting of Shareholders.
4. Our Current Reports on Form 8-K filed on March 6, 2003, March
11, 2003 (amending the Form 8-K for the event dated June 28,
2002), April 22, 2003, April 30, 2003, July 10, 2003, July 29,
2003 and July 30, 2003.
5. Our Form 8-A dated January 9, 1998.
All documents which we file subsequently to the foregoing pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Act, prior to the filing of a
post-effective amendment which indicates that all securities registered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
(See Item 3)
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the Wisconsin Business Corporation Law ("WBCL"), our directors
and officers are entitled to mandatory indemnification from us against certain
liabilities and expenses (a) to the extent such officers or directors are
successful in the defense of a proceeding, and (b) in proceedings in which the
director or officer is not successful in the defense thereof, unless (in the
latter case only) it is determined that the director or officer breached or
failed to perform his or her duties to us and such breach or failure
constituted: (i) a willful failure to deal fairly with us or our shareholders
in connection with a matter in which the director or officer had a material
conflict of interest; (ii) a violation of the criminal law unless the director
or officer had reasonable cause to believe his or her conduct was lawful or
had no reasonable cause to believe his or her conduct was unlawful; (iii) a
transaction from which the director or officer derived an improper personal
profit; or (iv) willful misconduct. The WBCL allows a corporation to limit
its obligation to indemnify officers and directors by providing so in its
articles of incorporation. Our Bylaws provide for indemnification of directors
and officers to the fullest extent permitted by Wisconsin law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
Exhibit Number
---------------
5 Opinion of Herrling, Clark, Hartzheim & Siddall, Ltd.
regarding legality
10 2003 Stock Option Plan of Merge Technologies Incorporated
23.1 Consent of Herrling, Clark, Hartzheim & Siddall, Ltd. (Please
refer to Exhibit 5 of this Registration Statement.)
23.2 Consent of KPMG LLP
24 Power of Attorney (Please refer to the Signature Page to this
Registration Statement.)
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement;
(i) to include any Prospectus required by Section 10(a)(3)
of the Act; and
(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
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in this Registration Statement; and
(iii) to include any additional or changed material
information on the plan of distribution; provided,
however, that paragraphs (1)(i) and (ii) do not apply
if the information required to be included in a
post-effective amendment by those paragraphs is
contained in a periodic report filed by the Registrant
pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated
by reference into this Registration Statement.
2. For determining liability under the Act, to treat each such
post-effective amendment as a new Registration Statement of
securities offered, and the offering of the securities at that
time to be the initial public offering thereof.
3. To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
4. Insofar as indemnification for liabilities arising under the
Act 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 (referred to
herein as the "Commission") such indemnification is against
public policy as expressed in such 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of 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 County of Milwaukee, State of Wisconsin, on August 14,
2003.
MERGE TECHNOLOGIES INCORPORATED
By: /s/ Richard A. Linden
--------------------------------------
Richard A. Linden
President and Chief Executive Officer
SIGNATURE PAGE / GRANT OF POWER OF ATTORNEY
Each person whose signature appears below as a Director and/or officer
of Merge Technologies Incorporated hereby constitutes and appoints Richard A.
Linden and Scott T. Veech his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all subsequent amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURES TITLE DATE
/s/ William C. Mortimore Chairman of the Board of August 14, 2003
--------------------------- Directors and Chief
William C. Mortimore Strategy Officer
/s/ Richard A. Linden Director, President and August 14, 2003
--------------------------- Chief Executive Officer
Richard A. Linden
/s/ Robert A. Barish, M. D. Director August 14, 2003
---------------------------
Robert A. Barish, M. D.
/s/ Patrice M. Bret, M. D. Director August 14, 2003
---------------------------
Patrice M. Bret, M. D.
/s/ Dennis Brown Director August 14, 2003
---------------------------
Dennis Brown
/s/ Michael D. Dunham Director August 14, 2003
---------------------------
Michael D. Dunham
/s/ Robert T. Geras Director August 14, 2003
---------------------------
Robert T. Geras
/s/ Anna M. Hajek Director August 14, 2003
---------------------------
Anna M. Hajek
/s/ Richard A. Reck Director August 14, 2003
---------------------------
Richard A. Reck
/s/ Scott T. Veech Chief Financial Officer, August 14, 2003
--------------------------- Secretary and Treasurer
Scott T. Veech (Principal Accounting
Officer and Principal
Financial Officer)
EXHIBITS
----------
Exhibit Number
---------------
5 Opinion of Herrling, Clark, Hartzheim & Siddall, Ltd. regarding
legality
10 2003 Stock Option Plan of Merge Technologies Incorporated
23.1 Consent of Herrling, Clark, Hartzheim & Siddall, Ltd. (Please refer to
Exhibit 5 of this Registration Statement.)
23.2 Consent of KPMG LLP
24 Power of Attorney (Please refer to Signature Page of this Registration
Statement.)
----------
EXHIBIT 5
----------
August 13, 2003
Merge Technologies Incorporated
1120 S. 70th Street
Suite S107B
Milwaukee, Wisconsin 53214-3151
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as special Wisconsin securities counsel to Merge
Technologies Incorporated, a Wisconsin corporation (the "Company"), in
connection with the preparation and filing of the registration statement on
Form S-8 (the "Registration Statement"), with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended
(the "Act") and the prospectus contained therein with respect to registering
300,000 shares (the 'Option Shares") to the new 2003 Stock Option Plan of
Merge Technologies, Inc. (the "Plan"). In connection with the registration of
the Option Shares, you have requested our opinion with respect to the matters
set forth below.
For purposes of this opinion, we have reviewed the Registration
Statement. In addition, we have examined the originals or copies certified or
otherwise identified to our satisfaction of: (i) the Company's Articles of
Incorporation, as amended to date; (ii) the By-laws of the Company, as amended
to date; (iii) records of the corporate proceedings of the Company as we deemed
necessary or appropriate as a basis for the opinions set forth herein; and
(iv) those matters of law as we have deemed necessary or appropriate as a basis
for the opinions set forth herein. We have not made any independent review or
investigation of the organization, existence, good standing, assets, business
or affairs of the Company, or of any other matters. In rendering our opinion,
we have assumed without inquiry the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of these documents submitted to us as copies.
We have not undertaken any independent investigation to determine facts
bearing on this opinion, and no inference as to the best of our knowledge of
facts based on an independent investigation should be drawn from this
representation. Further, our opinions, as hereinafter expressed, are subject
to the following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, fraudulent conveyance, reorganization, arrangement,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors; and (ii) the effect of general
principles of equity whether enforcement is considered in a proceeding in
equity or at law and the discretion of the court before which any proceeding
therefore may be brought.
We are admitted to the practice of law only in the State of Wisconsin
and, accordingly, we do not purport to be experts on the laws of any other
jurisdiction nor do we express an opinion as to the laws of jurisdictions
other than the laws of the State of Wisconsin and the Wisconsin Business
Corporation Law, as currently in effect.
On the basis of, and in reliance upon, the foregoing, and subject
to the qualifications contained herein, we are of the opinion that the
Option Shares, when issued pursuant to the Plan, will be validly issued,
fully-paid and nonassessable.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement.
This opinion is rendered only to you and is solely for your
benefit in connection with the transactions covered hereby. This opinion
may not be relied upon by you for any other purpose or furnished, or
quoted to, or relied upon by any other person, firm or corporation for
any purpose without our prior express written consent.
Respectfully submitted,
HERRLING, CLARK, HARTZHEIM & SIDDALL, LTD.
/s/ Greg P. Curtis
------------------------------
Greg P. Curtis
GPC/csd
-----------
EXHIBIT 10
-----------
2003 STOCK OPTION PLAN OF
MERGE TECHNOLOGIES INCORPORATED
----------------------------------
MERGE TECHNOLOGIES INCORPORATED, a corporation organized under the laws
of the State of Wisconsin, hereby adopts this 2003 Stock Option Plan of Merge
Technologies Incorporated. The purposes of this Plan are as follows:
1. To provide a means whereby selected persons employed by
entities acquired by the Company or any Subsidiary will receive Options in
place of their existing options as well as receiving new options negotiated as
part of, or advisable in connection with, such acquisitions and thereby to
facilitate acquisitions.
2. To further the growth, development and financial success of the
Company by providing additional incentives to certain of its Eligible
Participants who have been or will be given responsibility for the management
or administration of the Company's business affairs, by assisting them to
become owners of capital stock of the Company and thus to benefit directly from
its growth, development and financial success.
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter and the singular
shall include the plural, where the context so indicates.
SECTION 1.1 - BOARD
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2 - CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.3 - COMMITTEE
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in Section 6.1.
SECTION 1.4 - COMMON STOCK
"Common Stock" shall mean the Common Stock, One Cent ($.01) par value,
of the Company.
SECTION 1.5 - COMPANY
"Company" shall mean MERGE TECHNOLOGIES INCORPORATED.
SECTION 1.6 - DIRECTOR
"Director" shall mean a member of the Board.
SECTION 1.7 - DISABILITY
"Disability" shall have the meaning set forth in Section 2.2(e)(3) of
the Code.
SECTION 1.8 - ELIGIBLE PARTICIPANT
"Eligible Participant" shall mean selected employees, officers, agents,
consultants, advisors and independent contractors of the Company, or of any
corporation which is then a Subsidiary, who become such as a result of an
acquisition described in Section 3.2(b) of this Plan whether such Eligible
Participant becomes so employed or related to the Company at the time this Plan
is adopted or becomes so employed or related subsequent to the adoption of this
Plan, provided, however, that Eligible Participant shall not include any person
who is at the time an Option is granted a director or executive officer (as
defined in Rule 16a-1 of the Securities Exchange Act of 1934) of the Company.
SECTION 1.9 - EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.10 - NON-QUALIFIED OPTION
"Non-Qualified Option" shall mean an Option which is not an Incentive
Stock Option which qualifies under Section 422(b) of the Code.
SECTION 1.11 - OFFICER
"Officer" shall mean an officer of the Company or any Subsidiary.
SECTION 1.12 - OPTION
"Option" shall mean an option to purchase Common Stock of the Company,
granted under the Plan. Options may also include Rollover Options as the
context requires. "Options" are limited to Non-Qualified Options.
SECTION 1.13 - OPTIONEE
"Optionee" shall mean an Eligible Participant to whom an Option is
granted under the Plan.
SECTION 1.14 - PLAN
"Plan" shall mean this 2003 Stock Option Plan of MERGE TECHNOLOGIES
INCORPORATED.
SECTION 1.15- ROLLOVER OPTIONS
"Rollover Options" shall mean Options granted to persons pursuant to
the provisions of Section 3.2 (b).
SECTION 1.16 - SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.17 - SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as amended.
SECTION 1.18 - SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain, and, as of the date of
closing, shall include a corporation or other acquired entity described in
Section 3.2(b).
SECTION 1.19 - TERMINATION OF PARTICIPATION
"Termination of Participation" in the case of (i) an employee, shall
mean the time when the employee-employer relationship between the Optionee and
the Company or a Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
discharge, death or retirement, but excluding terminations where there is a
simultaneous reemployment of the Optionee by the Company or a Subsidiary, and
(ii) any other Eligible Participant, shall mean the time when the consulting or
other relationship with the Company and all Subsidiaries terminates. The
Committee, in its absolute discretion, shall determine the effect of all other
matters and questions relating to Termination of Participation, including, but
not by way of limitation, the question of whether a Termination of
Participation resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Participation.
ARTICLE II
SHARES SUBJECT TO PLAN
SECTION 2.1 - SHARES SUBJECT TO PLAN
The shares of stock subject to Options shall be shares of the Company's
Common Stock. The aggregate number of such shares which may be issued upon
exercise of Options shall not exceed Three Hundred Thousand (300,000) shares of
Common Stock.
SECTION 2.2 - UNEXERCISED OPTIONS
If any Option expires or is cancelled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised prior to its expiration or cancellation may again be
optioned hereunder to an Eligible Participant, subject to the limitations of
Section 2.1.
SECTION 2.3 - CHANGES IN COMMON STOCK
In the event that the outstanding shares of Common Stock of the Company
are hereafter changed into or exchanged for a different number or kind of
shares or other securities of the Company, or of another corporation, by reason
of reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, stock dividend, combination of shares or otherwise, appropriate
adjustments shall be made by the Committee in the number and kind of shares for
the purchase of which Options may be granted, including adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares which may
be issued on exercise of Options.
ARTICLE III
GRANTING OF OPTIONS
SECTION 3.1 - ELIGIBILITY
Any Eligible Participant of the Company or of any corporation which is
then a Subsidiary and any person eligible to receive Rollover Options shall be
eligible to be granted Options.
SECTION 3.2 - GRANTING OF OPTIONS
(a) The Committee shall from time to time, in its absolute
discretion:
(i) determine which persons are Eligible Participants and
select from among the Eligible Participants (including those to whom
Options have been previously granted under the Plan) such of them as
in its opinion should be granted Options; and
(ii) determine the number of shares to be subject to such
Options granted to such selected Eligible Participants; and
(iii) determine the terms and conditions of such Options,
consistent with the Plan.
Notwithstanding the above, the Committee may delegate certain powers relating
to the granting of Options as it deems appropriate to executive officers of the
Company including the power to determine the number of shares to be subject to
Options (subject to a maximum amount set by the Committee), and to determine
the terms and conditions of such Options including the imposition of one more
conditions to exercise such as the execution by the Optionee of a
non-competition agreement in favor of the Company or a Subsidiary; provided,
however, that the Committee shall not delegate any powers that are required to
be exercised by the Committee under Section 16(b) of the Exchange Act or any
rules promulgated thereunder.
(b) In the event of an acquisition by the Company or any
Subsidiary by means of a merger, consolidation, acquisition of property or
stock, reorganization or otherwise, the Committee shall be authorized to cause
the Company to issue Options or assume stock options issued by the acquired
company, whether or not in a transaction to which Section 424 (a) of the Code
applies, by means of issuance of new Options in substitution for, or an
assumption of, previously issued options or rights, but only if and to the
extent such issuance or assumption is consistent with the other provisions of
this Plan and any applicable law. Options rolled over or assumed and described
in this Section 3.2(b) are herein sometimes referred to as "Rollover Options."
(c) Upon the selection of an Eligible Participant to be granted an
Option, the Committee shall instruct the Secretary to issue such Option and may
impose such conditions on the grant of such Option as it deems appropriate.
Without limiting the generality of the preceding sentence, the Committee may,
in its discretion and on such terms as it deems appropriate, require as a
condition on the grant of any Option to an Eligible Participant that the
Eligible Participant surrender for cancellation some or all of the unexercised
Options which have been previously granted to him. An Option, the grant of
which is conditioned upon such surrender, may have an option price lower (or
higher) than the option price of the surrendered Option, may cover the same (or
a lesser or greater) number of shares as the surrendered Option, may contain
such other terms as the Committee deems appropriate and shall be exercisable
in accordance with its terms, without regard to the number of shares, price,
option period or any other term or condition of the surrendered Option.
ARTICLE IV
TERMS OF OPTIONS
SECTION 4.1 - OPTION AGREEMENT
Each Option shall be evidenced by a written Stock Option Agreement,
which shall be executed by the Optionee and an authorized Officer of the
Company and which shall contain such terms and conditions as the Committee
shall determine, consistent with the Plan.
SECTION 4.2 - OPTION PRICE
(a) The price of the shares subject to each Option shall be set by
the Committee; provided, however, that the price per share of an Option shall
be not less than the lesser of eighty five percent (85%) of the fair market
value of such shares on the date such Option is granted or the average of the
fair market values of such shares on the five (5) most recent trading days
prior to the date that such Option is granted. In the case of Rollover Options,
the Committee shall take into account the exercise price of the options being
replaced but shall not be required to grant Rollover Options at a price equal
to or greater than such previous exercise price.
(b) For purposes of the Plan, the fair market value of a share of
the Company's stock as of a given date shall be: (i) the closing price of the
Common Stock on the principal national stock exchange on which the shares are
listed on such date or, if shares were not traded on such date, then on the
next preceding trading day during which a sale occurred; or (ii) if such stock
is not listed on an exchange but is quoted on NASDAQ or a successor quotation
system, (1) the last sales price (if the stock is then listed on NASDAQ) or
(2) the mean between the closing representative bid and asked prices (in all
other cases) for the stock on such date as reported by NASDAQ or such successor
quotation system; or (iii) if such stock is not listed on an exchange and not
quoted on NASDAQ or a successor quotation system, the mean between the closing
bid and asked prices for the stock, on such date, as determined in good faith
by the Committee; or (iv) if the Company's stock is not publicly traded, the
fair market value established by the Committee acting in good faith. In
determining the fair market value of the Company's Common Stock under
subsection l (b) of this Section 4.2, the Committee may rely on the closing
price as reported in the Wall Street Journal.
SECTION 4.3 - COMMENCEMENT OF EXERCISABILITY
(a) Subject to the provisions of Sections 4.3(b) and 7.3, Options
shall become exercisable at such times and in such installments (which may be
cumulative) as the Committee shall provide in the terms of each individual
Option; provided, however, that by a resolution adopted after an Option is
granted the Committee may, on such terms and conditions as it may determine to
be appropriate and subject to Sections 4.3(b and 7.3, accelerate the time at
which such Option or any portion thereof may be exercised.
(b) No portion of an Option which is unexercisable at Termination of
Participation shall thereafter become exercisable.
SECTION 4.4 - EXPIRATION OF OPTIONS
(a) No Option may be exercised to any extent by anyone after the
first to occur of the following events:
(i) The expiration of fifteen (15) years and one (1) day
from the date the Option was granted; or
(ii) The expiration of three (3) months from the date of
the Optionee's Termination of Participation; or
(iii) The engagement by the Employee in willful misconduct
which injures the Company or any of its Subsidiaries.
(b) Subject to the provisions of Section 4.4(a), the Committee
shall provide, in the terms of each individual Option, when such Option expires
and become unexercisable; and (without limiting the generality of the
foregoing) the Committee may provide in the terms of individual Options that
said Options expire immediately upon a Termination of Participation for any
reason.
SECTION 4.5 - TENURE OF EMPLOYMENT
Nothing in this Plan or in any Stock Option Agreement hereunder shall
confer upon any Optionee any right to continue in the employ of the Company or
any Subsidiary or shall interfere with or restrict in any way the rights of the
Company and its Subsidiaries, which are hereby expressly reserved, to discharge
any Optionee at any time for any reason whatsoever, with or without cause.
SECTION 4.6 - ADJUSTMENTS IN OUTSTANDING OPTIONS
In the event that the outstanding shares of the stock subject to
Options are changed into or exchanged for a different number or kind of shares
of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividend, combination of shares or otherwise, the Committee shall make an
appropriate and equitable adjustment in the number and kind of shares as to
which all outstanding Options, or portions thereof then unexercised, shall be
exercisable, to the end that after such event the Optionee's proportionate
interest shall be maintained as before the occurrence of such event. Such
adjustment in an outstanding Option shall be made without change in the total
price applicable to the Option or the unexercised portion of the Option
(except for any change in the aggregate price resulting from rounding-off of
share quantities or prices) and with any necessary corresponding adjustment
in Option price per share. Any such adjustment made by the Committee shall be
final and binding upon all Optionees, the Company and all other interested
persons.
SECTION 4.7 - MERGER, CONSOLIDATION, ACQUISITION, LIQUIDATION OR DISSOLUTION
In the event of: (1) a merger or consolidation in which the Company is
not the surviving corporation; or (2) a reverse merger in which the Company is
the surviving corporation but the shares of the Company's common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, then to the extent permitted by applicable law: (i) any surviving
corporation shall assume any of the options outstanding under the Plan or shall
substitute similar options for those outstanding under the Plan, or (ii) such
options shall continue in full force and effect. In the event any surviving
corporation refuses to assume or continue such options, or to substitute
similar options for those outstanding under the Plan, then, the time at which
such options may first be exercised shall accelerated and the options
terminated if not exercised prior to such event. In the event of a dissolution
or liquidation of the Company, any options outstanding under the Plan shall
terminate if not exercised prior to such event.
ARTICLE V
EXERCISE OF OPTIONS
SECTION 5.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Optionee, only he or she may exercise an
Option granted to him or her, or any portion thereof. After the death of the
Optionee, any exercisable portion of an Option may, prior to the time when such
portion becomes unexercisable under Section 4.4 or Section 4.7, be exercised
by his personal representative or by any person empowered to do so under the
deceased Optionee's will or under the then applicable laws of descent and
distribution.
SECTION 5.2 - PARTIAL EXERCISE
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof become unexercisable under
Section 4.4 or Section 4.7, such Option or portion thereof may be exercised in
whole or in part; provided, however, that the Company shall not be required to
issue fractional shares and the Committee may, by the terms of the Option,
require any partial exercise to be with respect to a specified minimum number
of shares.
SECTION 5.3 - MANNER OF EXERCISE
An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his or her office of all of
the following prior to the time when such Option or such portion becomes
unexercisable under Section 4.4 or Section 4.7:
(a) Notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (in cash or by check) for the shares
with respect to which such Option or portion is thereby exercised; or
(ii) Subject to the Committee's consent, full payment in any
other form approved by the Committee, consistent with applicable law and the
Plan; or
(iii) Any combination of the consideration provided in the
foregoing subsections (i) and (ii); and
(c) On, or prior to the date the same is required to be withheld,
full payment (in cash or by check) of any amount that must be withheld by the
Company for federal, state and/or local tax purposes; and
(d) Such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer orders to transfer agents and
registrars; and
(e) In the event that the Option or portion thereof shall be
exercised pursuant to Section 5.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons to exercise
the Option or portion thereof.
SECTION 5.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock issuable and deliverable upon the exercise of an
Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the Company.
The Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental regulatory
body, which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of
all amounts which it is required to withhold under federal, state or local law
in connection with the exercise of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may establish from time to time for
reasons of administrative convenience.
SECTION 5.5 - RIGHTS AS STOCKHOLDERS
The holders of Options shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until certificates
representing such shares have been issued by the Company to such holders.
SECTION 5.6 - TRANSFER RESTRICTIONS
In addition to the transfer restrictions set forth in Section 7.1, the
Committee, in its absolute discretion, may impose such restrictions on the
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate, including a commitment on behalf of the Optionee to afford
the Company first refusal rights upon a proposed sale of shares of Common Stock
or restrictions on transfer necessary or desirable, as the Committee in its sole
discretion may determine Any such restriction shall be set forth in the
respective Stock Option Agreement or in a separate written agreement and may be
referred to on the certificates evidencing such shares.
ARTICLE VI
ADMINISTRATION
SECTION 6.1 - STOCK OPTION COMMITTEE
(a) The Stock Option Committee shall consist of at least two
Directors of the Company (or such smaller number as may be permitted under Rule
16b-3, if and as such Rule is then in effect) appointed by and holding office
during the pleasure of the Board. No Options may be granted to any member of
the Committee during the term of his membership on the Committee. No person
shall be eligible to serve on the Committee unless he is then a "disinterested
person" within the meaning of paragraph (e)(2)(i) of Rule 16b-3.
(b) Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee shall be
filled by the Board.
SECTION 6.2 - DUTIES AND POWERS OF COMMITTEE
It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Options and to adopt such
rules for the administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules. In its
absolute discretion, the Board may at any time and from time to time exercise
any and all rights and duties of the Committee under the Plan.
SECTION 6.3 - MAJORITY RULE
The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.
SECTION 6.4 - COMPENSATION: PROFESSIONAL ASSISTANCE: GOOD FAITH ACTIONS
Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company and its
Officers and Directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all Optionees, the Company and all other interested persons. No member of
the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options, and
all members of the Committee shall be fully protected by the Company in respect
to any such action, determination or interpretation.
ARTICLE VII
OTHER PROVISIONS
SECTION 7.1 - OPTIONS NOT TRANSFERABLE
No Option or interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation, pledge,
encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect;
provided, however, that nothing in this Section 7.1 shall prevent transfers by
will or by the applicable laws of descent and distribution.
SECTION 7.2 - AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board. Neither
the amendment, suspension nor termination of the Plan shall, without the
consent of the holder of the Option, impair any rights or obligations under any
Option theretofore granted. No Option may be granted during any period of
suspension nor after termination of the Plan, and in no event may any Option
be granted under this Plan after the expiration of ten (10) years from the date
the Plan is adopted by the Board.
SECTION 7. 3 - COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of this Plan or action by the Committee fails to so comply
at such time that the Company is subject to the reporting requirements of the
Exchange Act, it shall be deemed null and void to the extent permitted by law
and deemed advisable by the Committee.
SECTION 7.4 - EFFECT OF PLAN UPON OTHER OPTION AND COMPENSATION PLANS
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary or modify the
rights of any person holding options issued pursuant to the Original Plan.
Nothing in this Plan shall be construed to limit the right of the Company or
any Subsidiary (a) to establish any other forms of incentives or compensation
for employees of the Company or any Subsidiary or (b) to grant or assume options
otherwise than under this Plan in connection with any proper corporate purpose,
including, but not by way of limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, firm or
association.
SECTION 7.5 - TITLES
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of the Plan.
**********
Adopted by the Board of Directors of Merge Technologies Incorporated
on June 24, 2003 and effective July 17, 2003.
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EXHIBIT 23.1
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Please refer to Exhibit 5 of this Registration Statement.
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EXHIBIT 23.2
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INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Merge Technologies Incorporated:
We consent to the use of our report dated March 28, 2003, with
respect to the consolidated balance sheets of Merge Technologies Incorporated
and subsidiaries as of December 31, 2002 and 2001, and the related consolidated
statements of operations, shareholders' equity, cash flows, and comprehensive
income (loss) for each of the years in the three-year period ended December
31, 2002, incorporated herein by reference. Our report on the consolidated
financial statements refers to the adoption of the provisions of Statement
of Financial Accounting Standards No. 142 "Goodwill and Other Intangible
Assets" on January 1, 2002.
/s/ KPMG LLP
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Chicago, Illinois
August 14, 2003
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EXHIBIT 24
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Please refer to Signature Page of this Registration Statement.