-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VQG07Y5BtGJxo4XXRrasz6zbErsM/ornqW4GshgeN1wnCGu/1Qc9FHVD61cYKgRs ISEVqUdC6m0hSDS0jPPWbQ== 0001047469-98-014896.txt : 19980415 0001047469-98-014896.hdr.sgml : 19980415 ACCESSION NUMBER: 0001047469-98-014896 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980414 EFFECTIVENESS DATE: 19980414 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNRISE MEDICAL INC CENTRAL INDEX KEY: 0000720577 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 953836867 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-50047 FILM NUMBER: 98593213 BUSINESS ADDRESS: STREET 1: 2382 FARADAY AVENUE STE 200 CITY: CARLSBAD STATE: CA ZIP: 92008 BUSINESS PHONE: 6199301500 MAIL ADDRESS: STREET 1: 2382 FARADAY AVENUE SUITE 200 CITY: CARLSBAD STATE: CA ZIP: 92008 S-8 1 S-8 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 14, 1998 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------------------- SUNRISE MEDICAL, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 95-3836867 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) ---------------------------------- 2382 FARADAY AVENUE, SUITE 200 CARLSBAD, CALIFORNIA 92008 (Address of Principal Executive Offices including Zip Code) ---------------------------------- SENTIENT SYSTEMS TECHNOLOGY, INC. 1993 EMPLOYEE STOCK OPTION PLAN (FULL TITLE OF THE PLAN) ---------------------------------- STEVEN A. JAYE COPY TO: SENIOR VICE PRESIDENT, SECRETARY JEFFREY T. PERO, ESQ. AND GENERAL COUNSEL LATHAM & WATKINS SUNRISE MEDICAL, INC. 650 TOWN CENTER DRIVE, TWENTIETH FLOOR 2382 FARADAY AVENUE, SUITE 200 COSTA MESA, CALIFORNIA 92626 CARLSBAD, CALIFORNIA 92008 (714) 540-1235 (760) 930-1500 ---------------------------------- (NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ----------------------------------
- ----------------------------------------------------------------------------------------------- CALCULATION OF REGISTRATION FEE - ----------------------------------------------------------------------------------------------- PROPOSED PROPOSED AMOUNT MAXIMUM MAXIMUM TO BE OFFERING AGGREGATE AMOUNT OF REGISTERED PRICE OFFERING REGISTRATION PER SHARE (1) PRICE (1) FEE - ----------------------------------------------------------------------------------------------- Common Stock 156,630 $1.31 $205,655.19 $60.67 - -----------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(h). The Proposed Maximum Offering Price Per Share is the weighted average exercise price of outstanding options to purchase shares being registered pursuant hereto. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROPOSED SALE TO TAKE PLACE AS SOON AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT AS OPTIONS GRANTED UNDER THE OPTION PLAN ARE EXERCISED. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE The following documents filed by Sunrise Medical, Inc. (the "Company") with the Securities and Exchange Commission (the "Commission") are incorporated herein by reference: (a) The Company's Annual Report on Form 10-K for the fiscal year ended June 27, 1997; (b) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended September 26, 1997 and December 26, 1997; (c) The description of the Company's Common Stock contained in the Company's registration statement on Form 8-A filed with the Commission on June 29, 1992; (d) The description of the Company's Common Share Purchase Rights contained in the Company's registration statement on Form 8-A filed with the Commission on June 29, 1992, as amended by the description contained in the Company's registration statement on Form 8-A/A filed with the Commission on May 16, 1997; and (e) The Company's Current Report on Form 8-K filed with the Commission on February 19, 1998. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part of it from the respective dates of filing such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. DESCRIPTION OF SECURITIES Not applicable. Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Not applicable. Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 102(b)(7) of the Delaware General Corporation Law permits a Delaware corporation to limit the personal liability of its directors in accordance with the provisions set forth therein. The Certificate of Incorporation, as amended, of the Company provides that the personal liability of its directors shall be limited to the fullest extent permitted by applicable law. Section 145 of the Delaware General Corporation Law contains provisions permitting corporations to indemnify any person who is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, 2 joint venture, trust or other enterprise, in accordance with the provisions set forth therein. The Bylaws of the Company generally provide for indemnification of such persons to the fullest extent allowed by applicable law. The inclusion of the above provisions in the Certificate of Incorporation may have the effect of reducing the likelihood of stockholder derivative suits against directors and may discourage or deter stockholders or management from bringing a lawsuit against directors for breach of their duty of care, even though such an action, if successful, might otherwise have benefited the Company and its stockholders. Item 7. EXEMPTION FROM REGISTRATION CLAIMED Not applicable. Item 8. EXHIBITS See Index to Exhibits on page 7. Item 9. UNDERTAKINGS (a) The Company hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (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 material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at termination of the offering. (b) The Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. 3 (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for expenses incurred or paid by a director, officer or controlling person of the Company 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 Company 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 Securities Act and will be governed by the final adjudication of such issue. 4 SIGNATURES Pursuant to the requirements of the Securities Act, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Carlsbad, State of California, on April 10, 1998. SUNRISE MEDICAL INC. By: /s/ Ted N. Tarbet ----------------------------------- Ted N. Tarbet, Senior Vice President and Chief Financial Officer 5 POWER OF ATTORNEY Each person whose signature appears below hereby authorizes and appoints Richard H. Chandler and Ted N. Tarbet as attorneys-in-fact and agents, each acting alone, with full powers of substitution to sign on his behalf, individually and in the capacities stated below, and to file any and all amendments, including post-effective amendments, to this registration statement and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done. Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on the dates indicated. Signature Title Date - --------- ----- ---- /s/ R. H. Chandler Chairman, President and April 10, 1998 - ------------------------------ Chief Executive Officer Richard H. Chandler (Principal Executive Officer) /s/ Ted N. Tarbet Senior Vice President and April 10, 1998 - ------------------------------ Chief Financial Officer Ted N. Tarbet (Principal Financial Officer) /s/ John M. Radak Vice President and Controller April 10, 1998 - ------------------------------ (Principal Accounting Officer) John M. Radak /s/ Lee A. Ault Director April 10, 1998 - ------------------------------ Lee A. Ault III /s/ Babette Heimbuch Director April 10, 1998 - ------------------------------ Babette Heimbuch /s/ Murray H. Hutchison Director April 10, 1998 - ------------------------------ Murray H. Hutchison /s/ William L. Pierpoint Director April 10, 1998 - ------------------------------ William L. Pierpoint /s/ J. Stemler Director April 10, 1998 - ------------------------------ Joseph Stemler /s/ J. R. Woodhull Director April 10, 1998 - ------------------------------ J.R. Woodhull 6 INDEX TO EXHIBITS EXHIBIT - ------- 4.1 Sentient Systems Technology, Inc. 1993 Employee Stock Option Plan. 4.2 Sentient Systems Technology, Inc. Stock Option Agreement Under 1993 Employee Stock Option Plan. 5.1 Opinion of Latham & Watkins. 23.1 Consent of Latham & Watkins (included in Exhibit 5.1). 23.2 Consent of KPMG Peat Marwick LLP. 24 Power of Attorney (included in the signature page to this Registration Statement). 7 EX-4.1 2 EXHIBIT 4.1 SENTIENT SYSTEMS TECHNOLOGY, INC. 1993 EMPLOYEE STOCK OPTION PLAN (AS ASSUMED BY SUNRISE MEDICAL INC.) 1. PURPOSE The purpose of the 1993 Employee Stock Option Plan (the "Plan") is to motivate and provide an incentive for selected employees of SUNRISE MEDICAL INC. (the "Company"), as successor to Sentient Systems Technology, Inc., and its subsidiaries, to exert their best efforts on behalf of their employer by enabling and encouraging such individuals to acquire a greater stock interest in the Company, thereby increasing their proprietary interest in the business, encouraging their continued service and promoting the interests of the Company and all its Stockholders. 2. DEFINITIONS (a) "Board" - the Board of Directors of the Company. (b) "Common Stock" - the common stock of the Company. (c) "Fair Market Value" - the "fair market value" per share of Common Stock on a given date shall be determined by the Board with full authority and discretion, taking into account all factors customarily considered in determining fair market value. (d) "Financial Statements" - the financial statements of the Company. (e) "Options" - grants of Options to purchase shares of Common Stock under the Plan. Options may be Incentive Stock Options, granted pursuant to Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or may be Non-Qualified Stock Options. In no event shall tandem Incentive Stock Options/Non-Qualified Stock Options be granted, and the exercise of any Option hereunder shall not effect the right to exercise another Option. A Participant's Option Agreement shall specify whether the participant has been granted an Incentive Stock Option or a Non-Qualified Stock Option. (f) "Option Right" - the right to purchase a share of Common Stock upon exercise of an Outstanding Option. (g) "Outstanding Option" - at any time, an Option to purchase Common Stock granted by the Company pursuant to the Plan, whether or not such Option is at such time exercisable, to the extent that such Option at such time has not been exercised and has not terminated. (h) "Participants" - employees to whom Options have been granted under the Plan. When appropriate, and when the incapacity or death of a Participant does not terminate or limit his rights under the Plan, the term "Participant" shall also be deemed to refer, in the event of the death or incapacity of a Participant, to his legal representative. (i) "Employee" and "outstanding" have the meanings assigned to them in Section 422 or 424 of the Code. 3. ADMINISTRATION (a) Administrative Committee. This Plan shall be administered by the Board, who are not entitled to participate in this Plan. The Board may, from time to time, issue orders or adopt resolutions, not inconsistent with the provisions of this Plan, to interpret the provisions and supervise the administration of the Plan. All determinations shall be made by an affirmative vote of a majority of the members of the Board at a meeting called for such purpose, or reduced to writing and signed by a majority of the members of the Board. Subject to the Company By-laws, all decisions made in selecting optionees, establishing the number of shares and terms applicable to each Option, and in construing the provisions of this Plan shall be final, conclusive and binding on all persons including the Company, shareholders, employees and optionees. (b) Option Agreement. Each Option shall be evidenced by an Option Agreement which shall contain such terms and conditions as may be approved by the Board, and shall be signed by an officer of the Company and the applicable Participant. 4. EFFECTIVE DATE AND DURATION The Plan became effective as of March 12, 1993. Unless sooner terminated by the Board, the Plan will terminate on March 11, 2003, and no Options may be made or granted under the Plan after such date; however, shares issuable upon the exercise of Options granted on or prior to such date may be subsequently delivered or made to Participants in accordance with the terms and conditions applicable to their respective Options. 5. ELIGIBILITY Only persons regularly employed on a full-time basis by the Company or its subsidiaries are eligible to receive Options. The Participants shall be selected from time to time by the Board, on the recommendation of the Officers of the Company, from among those eligible. No employee shall be granted an Incentive Stock Option if he personally owns voting stock having more than 10% of the total combined voting power of all classes of outstanding stock of the Company. 2 6. AMENDMENT AND TERMINATION OF THE PLAN The Board may at any time terminate the Plan, or from time to time make such amendments thereto, including additions or deletions, as the Board deems advisable, except that no amendment may adversely affect any Option previously made or granted to a Participant. No amendment shall be made, however, unless approved by the Stockholders of the Company, which would (a) increase the maximum number of shares as to which Options may be granted, (b) extend the period during which Options may be granted or made or (c) materially modify the requirements as to eligibility for participation in the Plan. 7. MISCELLANEOUS PROVISIONS (a) Employment. No employee shall have any claim or right to be granted an Option under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any employee any right to be retained in the employ of the Company or any of its subsidiaries, or to limit the right of the Company or any subsidiary to terminate the employment of any Participant at any time, or to change the terms of such employment. (b) Nonalienation of Benefits. A Participant's rights and interests under the Plan may not be assigned or transferred, in whole or in part, either directly or by operation of law or otherwise (except as specifically provided by the Plan in the event of a Participant's death or pursuant to a Qualified Domestic Relations Order), including but not by way of limitation by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no such right or interest of any Participant shall be subject to any obligation or liability of such Participant. (c) Effect Upon Other Compensation Plans. The Plan and its operations shall not affect any other compensation or incentive plan in effect for the Company and its subsidiaries, and the Plan shall not preclude the Board from establishing any other forms of incentive or compensation for employees of the Company and its subsidiaries. 8. STOCK SUBJECT TO THE PLAN; EFFECT OF REORGANIZATION. (a) Shares Which May Be Subject To Options Granted. Subject to adjustments made pursuant to subsection (b) of this Section 8, the total number of shares which may be granted under the Plan (which shares may be authorized but unissued shares or treasury shares) is Two Hundred and Twenty-Seven Thousand (227,000) shares of Common Stock. To the extent that any Options under the Plan shall expire or terminate, in whole or in part, without having been exercised, the number of shares subject thereto shall again become available for the granting of Options under the Plan and they may thus be reoptioned. 3 (b) Effect of Reorganization. (i) In the event there is a change in, reclassification, subdivision or combination of, stock dividend on, or exchange of stock or other securities of the Company for the outstanding Common Stock, or other similar event, the maximum number and class of shares subject to Options theretofore granted under the Plan and the price per share payable upon exercise of such Options shall be appropriately adjusted by the Board, whose determination shall be conclusive. (ii) If, prior to the expiration of any Option granted under the Plan, there shall be a merger, consolidation or reorganization of the Company with another corporation in which the Company is not the surviving corporation, the holder of any then outstanding Option shall thereafter be entitled to receive, upon exercise of the unexercised portion of the Option, the same number and kind of shares, securities or other property (including cash) as he would have received had he exercised the unexercised portion of the Option immediately prior to such merger, consolidation or reorganization. Notwithstanding the foregoing and with reference to the transactions described in the preceding sentence, any Participant may agree to the assumption of his Option by a corporation other than the Company or the substitution of a stock option of a corporation other than the Company for his Option. 9. PROCEDURE FOR GRANTING OF OPTIONS AND RELATED MATTERS (a) Board to Make Determination. Subject to the terms, provisions and conditions of the Plan, the Board, shall (i) select the employees to whom Options shall be granted, (ii) determine whether a designated employee shall receive an Incentive Stock Option or a Non-Qualified Stock Option, (iii) determine the number of shares subject to each Option, (iv) determine the time or times when Options will be granted, (v) determine the time or times when each Option may be exercised within the limits stated in the Plan, and (vi) establish the fair market value of the shares. However, if the Board shall fail to designate the type of Option granted to any individual employee, such Option shall be an Incentive Stock Option. The appropriate officers of the Company shall prescribe the form, which shall be consistent with the Plan, of the instruments evidencing any Options granted hereunder. (b) Requisite Action by Participants. As a condition to the granting of an Option, each Participant shall be required to enter into an Option Agreement with the Company which shall contain such provisions consistent with the Plan as may be prescribed by the Board, including such restrictions as to the transferability of the shares to be issued upon the exercise of an Option as the Board may, in its discretion, deem appropriate. Such restrictions may be for the purpose of assuring 4 compliance with Federal and state securities laws (as contemplated by Section 13(d) hereof) or for other reasons deemed advisable by the Board. (c) Limitations. For all Incentive Stock Options granted under this Plan, the aggregate fair market value, determined at the time the Options are granted, of the Common Stock exercisable for the first time by any Participant during any calendar year shall not exceed $100,000. Such restriction shall not apply to Non-Qualified Stock Options granted under the Plan. 10. OPTION PRICE (a) Incentive Stock Option. The purchase price per share of Common Stock under each Incentive Stock Option granted pursuant to the Plan shall not be less than the fair market value of the Common Stock at the time such Option is granted. The Board will undertake any procedures that it deems prudent under the circumstances and in good faith to determine the fair market value of the Common Stock at the time that each Incentive Stock Option is granted. This may include, but is not limited to, obtaining opinions or appraisals of the fair market value of the Common Stock from independent and qualified valuation experts. (b) Non-Qualified Stock Options. The purchase price per share of Common Stock under each Non-Qualified Stock Option granted pursuant to the Plan shall be no less than eighty-five percent (85%) of the fair market value of the Common Stock at the time that the Option is granted. The valuation procedures employed for granting Non-Qualified Stock Options shall be the same as those described under subsection (a) above. (c) Payment Terms. Payment for the stock purchased pursuant to an Option shall be in cash. 11. DURATION OF OPTIONS Each Option granted under the Plan shall terminate not later than ten (10) years after the date on which it was granted. The Board may, in its discretion, provide a shorter period for any individual Option. 12. NONTRANSFERABILITY OF OPTIONS No Option granted under the Plan shall be transferable by a Participant otherwise than by will, the laws of descent and distribution or pursuant to a Qualified Domestic Relations Order, and an Option may be exercised, during a Participant's lifetime, only by him. 13. EXERCISE OF OPTIONS (a) Restrictions on Exercise. Each Option shall be exercisable according to terms set by the Board at the time of the grant. Unless otherwise provided in the 5 Option Agreement, an Option granted under the Plan shall be exercisable, prior to the expiration or termination of the Option, in whole at any time or in part from time to time. The Board may direct that an Option becomes exercisable in installments, which need not be annual installments, over a period which may be less than the term of the Option. At such time as an installment shall become exercisable, it may be exercised at any time thereafter, in whole or in part, until the expiration or termination of the Option. Only full shares which a Participant is entitled to purchase will be issued, and no fractional shares will be issued. (b) Exercise Sequence. Options granted under the Plan may be exercised by the Participants without regard to the date of the grant of any other Options granted under the Plan. (c) Notice of Exercise. A Participant may purchase shares pursuant to an Option granted under the Plan only by giving the Company written notice of his election to exercise the Option, specifying the number of shares to be purchased. (d) Registration. Each Option granted under the Plan shall be subject to the condition that if, at any time, in the opinion of counsel for the Company, the registration, listing or qualification of the shares covered by any Option under the Securities Act of 1933, as amended (the "Act"), upon any securities exchange or under any state law, or the consent or approval of any governmental regulatory body or the updating, amendment or revision of any registration statement, listing application or similar document, is required as a condition of, or in connection with, the purchase of shares under such Option, no such Option may be exercised unless and until such registration, listing, qualification, consent, approval, updating, amendment or revision shall have been effected or obtained free of any conditions not acceptable to the Board. The Board may, as a condition to the exercise by a Participant of an Option, require that the Participant agree in writing that he will not dispose of the shares to be acquired upon such exercise in a transaction which, in the opinion of counsel for the Company, would violate the Act and the rules and regulations promulgated thereunder. The Board shall have the authority to require additional agreements or impose additional conditions which it reasonably believes are necessary to assure compliance with Federal and state securities, other laws and general operation of the Company. 14. TERMINATION OF EMPLOYMENT, DISABILITY, RETIREMENT OR DEATH (a) Exercise After Termination of Employment. If the employment of a Participant by the Company or a subsidiary shall terminate for any reason except death or disability, all unexercised Options of such Participant, and all rights to purchase shares pursuant thereto, shall terminate upon such termination of employment. (b) Exercise After Death. In the event of the death of a Participant while employed by the Company or a subsidiary, any Option granted to the Participant 6 may be exercised within one (1) year after his death by the legal representative of his estate, but only to the extent such Option was exercisable by the Participant at the date of his death and provided that the exercise would not occur later than the termination date of the Option. (c) Exercise After Disability. In the event of the termination of employment with the Company or a subsidiary by reason of the disability of a Participant, any Option granted to the Participant may be exercised within one (1) year after his termination of employment by the Participant or his legal representative, but only to the extent such Option was exercisable by the Participant at the date of such termination of employment and provided that the exercise would not occur later than the termination date of the Option. (d) Termination of Options. To the extent that any Option held by any Participant whose employment is terminated shall not have been exercised within the applicable periods hereinbefore provided, such Option, and all rights to purchase shares pursuant thereto, shall terminate. 15. WITHHOLDING TAXES Upon the exercise of a Non-Qualified Stock Option, the Company shall have the right to withhold from a Participant's compensation, or require a Participant to remit sufficient funds to the Company, to satisfy any applicable withholding for income and employment taxes. 16. USE OF PROCEEDS The proceeds received from the sale of Common Stock pursuant to the Plan shall be used for any corporate purposes of the Company. 7 EX-4.2 3 EXHIBIT 4.2 SENTIENT SYSTEMS TECHNOLOGY, INC. STOCK OPTION AGREEMENT UNDER 1993 EMPLOYEE STOCK OPTION PLAN This Agreement is made this ____ day of _____________, 199_ by and between SENTIENT SYSTEMS TECHNOLOGY, INC., a Pennsylvania corporation (the "Company"), and _____________________ (the "Optionee"). W I T N E S S E T H: WHEREAS, the Optionee is now employed by the Company, and the Company desires to provide additional incentive to the Optionee, to encourage stock ownership by the Optionee and to encourage the Optionee to remain in the employ of the Company. As an inducement thereto, the Board of Directors of the Company has determined to grant to the Optionee an option meeting the requirements of Section 422 of the Internal Revenue Code (the "Code") pursuant to the Company's 1993 Employee Stock Option Plan (the "Plan"), a copy of which is attached hereto as Exhibit "A"; NOW, THEREFORE, it is agreed between the parties as follows: 1. GRANT OF OPTION. Subject to the terms and conditions hereof, the Company hereby grants to the Optionee the right and option to purchase from the Company up to, but not exceeding in the aggregate, ________ shares of the Company's Common Stock at a price of $__________ per share. 2. VESTING OF RIGHT TO EXERCISE OPTION. The option hereby granted may not be exercised prior to _________________. The Optionee may purchase from the Company on or after ____________________, ten percent (10%) of the shares covered by this option; on or after _______________, this option may be exercised as to an additional twenty percent (20%) of the shares covered by this option; on or after _____________, this option may be exercised as to an additional thirty percent (30%) of the shares covered by this option; and on or after ___________________, this option may be exercised as to an additional forty percent (40%) of the shares covered by this option, so that by ____________, this option shall be fully exercisable. To the extent not exercised, installments shall accumulate and may be exercised by the Optionee, in whole or in part, in any subsequent period. Any provisions of this Agreement notwithstanding, this option shall not be exercisable on or after the date ten (10) years from the date of the grant of this option. 3. TERMINATION OF EMPLOYMENT. If, prior to the date that this option shall become exercisable, the Optionee's employment with the Company shall be terminated, for any reason, the Optionee's right to exercise this option shall terminate and all rights hereunder shall cease. If this option shall become exercisable during the Optionee's term of employment and the Optionee shall die or become permanently disabled while in the employ of the Company, the Optionee, the executor or administrator of the estate of the Optionee (as the case may be), or the person or persons to whom the option shall have been transferred by will or by the laws of descent and distribution, shall have the right, within one (1) year from the date of the Optionee's death or disability, to exercise this option to the extent that it was exercisable and unexercised on the date of disability or death, subject to any other limitation on the exercise of such option in effect at the date of exercise and provided that such exercise will not occur later than the termination date of this option. If termination of employment is for any reason other than death or disability, then this option shall terminate and expire concurrently with the termination of employment and shall not thereafter be exercisable to any extent. A leave of absence with the written consent of the Company shall not be a termination of employment for purposes of this option. 4. PUBLIC OFFERING. This option may be exercisable in full, and all shares covered by this option may be immediately purchased without regard to the vesting provisions set forth in Paragraph 2 upon the Company's shares being subject to a public offering or upon all the Company's outstanding shares being acquired by a third party. 5. EXERCISE OF OPTION. The Optionee, from time to time during the period when the option hereby granted may by its terms be exercised, may exercise the option in whole or in part as at the time permitted by delivery to the Company of: (a) a written notice signed by the Optionee (i) stating the number of shares that the Optionee has elected to purchase at that time from the Company, (ii) if required by the Company at the time of exercise, representing that the Optionee is acquiring the shares being purchased for investment and not for resale; and (b) a 2 certified check, bank draft or money order of an amount equal to the purchase price of the shares then to be purchased. An example of the written notice is attached hereto as Exhibit "B". Anything to the contrary herein notwithstanding, the Company's obligation to sell and deliver stock under this option is subject to such compliance with federal and state laws, rules and regulations applying to the authorization, issuance or sale of securities as the Company deems necessary or advisable. The Company shall not be required to sell and deliver stock pursuant hereto unless and until it received satisfactory proof that the issuance or transfer of such shares will not violate any of the provisions of any securities or other laws or that there has been compliance with the provisions of any applicable rules, regulations and laws. If the Optionee fails to accept delivery and pay for all or any part of the number of shares specified by such notice upon tender of delivery thereof, the Optionee's right to exercise this option with respect to such undelivered shares may be terminated by the Company. 6. NON-ASSIGNABILITY. The option hereby granted shall not be transferable by the Optionee, other than by will or the laws of descent and distribution, and the option may be exercised during the Optionee's lifetime only by the Optionee or the Optionee's legal representative if the Optionee is then disabled. Any transferee of the option shall take the same subject to the terms and conditions of this Agreement. No such transfer of the option shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of the will and/or such other evidence as the Company may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of this Agreement. No assignment or transfer of this option, or of the rights represented thereby, whether voluntary or involuntary or by operation of law or otherwise, except a transfer by the Optionee by will or by the laws of descent and distribution, shall vest in the purported assignee or transferee any interest or right herein whatsoever. 7. DISPUTES. As a condition of the granting of this option, the Optionee and the Optionee's successors and assigns agree that any dispute or disagreement which shall arise under or as a result of this Agreement shall be determined by the Board of Directors of the Company in its sole discretion and judgment, and that any such determination and any interpretation by the Board of the terms of this Agreement shall be final, binding and conclusive for all purposes. 8. RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a shareholder of the Company with respect to any of the shares covered by this option until the issuance of a 3 stock certificate or certificates upon the exercise of this option in full or in part, and then only with respect to the shares represented by such certificate of certificates. 9. NOTICES. Every notice relating to this Agreement shall be in writing and if given by mail shall be given by registered or certified mail with return receipt requested. All notices to the Company shall be delivered to the President or addressed to the President of the Company at its offices in Pittsburgh, Pennsylvania. All notices by the Company shall be delivered to the Optionee at his home address according to the records of his employer. Either party, by notice to the other, may designate a different address to which notices shall be addressed. Any notice given by the Company to the Optionee at the Optionee's last designated address shall be effective to bind any other person who shall acquire rights hereunder. 10. "OPTIONEE" TO INCLUDE CERTAIN TRANSFEREES. Whenever the word "Optionee" is used in any provision of this Agreement under circumstances where the provisions should logically apply to any other person or persons to whom the option may be transferred, in accordance with the provisions of Section 5 hereof, the word "Optionee" shall be deemed to include such person or persons. 11. GOVERNING LAW. This Agreement has been made in and shall be construed in accordance with the laws of the Commonwealth of Pennsylvania. 12. PROVISIONS OF PLAN CONTROLLING. The provisions hereof are subject to the terms and provisions of the Plan attached hereto as Exhibit "A". In the event of any conflict between the provisions of this option and the provisions of the Plan, the provisions of the Plan shall control. 4 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. SENTIENT SYSTEMS TECHNOLOGY, INC. By: -------------------------------- President ACCEPTED BY: - ------------------------- Optionee 5 EX-5.1 4 EXHIBIT 5.1 [LATHAM & WATKINS LETTERHEAD] April 14, 1998 Sunrise Medical Inc. 2382 Faraday Avenue Suite 200 Carlsbad, California 92008 Re: Registration Statement on Form S-8 ---------------------------------- Ladies and Gentlemen: This opinion is rendered in connection with the filing by Sunrise Medical Inc., a Delaware corporation (the "Company"), of a registration statement on Form S-8 (the "Registration Statement") with the Securities and Exchange Commission under the Securities Act of 1933, as amended, with respect to the offer and sale of up to 156,630 shares of the Company's Common Stock, par value $1.00 per share (the "Shares"), pursuant to the exercise of options granted under the Sentient Systems Technology, Inc. 1993 Employee Stock Option Plan (the "Plan"). We acted as counsel to the Company in connection with the preparation of the Registration Statement. We have examined such matters of fact and question of law as we have considered appropriate for purposes of rendering the opinion expressed below. We are opining herein as to the effect on the subject transaction of only the General Corporation Law of the State of Delaware, and we express no opinion with respect to the applicability thereto or the effect thereon of any other laws or as to any matters of municipal law or any other local agencies within any state. Subject to the foregoing and in reliance thereon, we are of the opinion that, upon the issuance and sale of the Shares in the manner contemplated by the Registration Statement and in accordance with the terms of the Plan, and subject to the Company completing all action and proceedings required on its part to be taken prior to the issuance of the Shares pursuant to the terms of the Plan and the Registration Statement, including, without limitation, collection of required payment for the Shares, the Shares will be legally and validly issued, fully paid and nonassessable securities of the Company. We consent to your filing this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ Latham & Watkins EX-23.2 5 EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT The Board of Directors Sunrise Medical Inc. We consent to the use of our report incorporated herein by reference. /s/ KPMG Peat Marwick LLP Los Angeles, California April 13, 1998 -----END PRIVACY-ENHANCED MESSAGE-----