-----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, ICxjv3WNlwrwgEvi8xpU6oMs6vgivVF8v4p4UbJ8ciFzGdoljQlmyh0SW05DTUia 7Fr0ZUZj9LvV9F3FXnnB3w== /in/edgar/work/0000739944-00-000015/0000739944-00-000015.txt : 20001108 0000739944-00-000015.hdr.sgml : 20001108 ACCESSION NUMBER: 0000739944-00-000015 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20001107 EFFECTIVENESS DATE: 20001107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDTOX SCIENTIFIC INC CENTRAL INDEX KEY: 0000739944 STANDARD INDUSTRIAL CLASSIFICATION: [2835 ] IRS NUMBER: 953863205 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-49456 FILM NUMBER: 754763 BUSINESS ADDRESS: STREET 1: 402 WEST COUNTY ROAD D CITY: ST PAUL STATE: MN ZIP: 55112 BUSINESS PHONE: 6126367466 MAIL ADDRESS: STREET 1: 402 WEST COUNTY ROAD D CITY: ST PAUL STATE: MN ZIP: 55112 FORMER COMPANY: FORMER CONFORMED NAME: EDITEK INC DATE OF NAME CHANGE: 19940902 FORMER COMPANY: FORMER CONFORMED NAME: ENVIRONMENTAL DIAGNOSTICS INC DATE OF NAME CHANGE: 19920703 S-8 1 0001.txt FORM S-8 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on November 7, 2000 Registration No. 333-__________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 MEDTOX SCIENTIFIC, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) 95-3863205 (I.R.S. Employer Identification No.) 402 West County Road D, St. Paul, Minnesota 55112 (Address of principal executive offices) (Zip Code) MEDTOX Scientific, Inc. Restated Equity Compensation Plan MEDTOX Scientific, Inc. Qualified Employee Stock Purchase Plan MEDTOX Scientific, Inc. Non-Employee Director Plan (Full title of the plans) James B. Lockhart Copy to: Robert R. Ribeiro, Esq. MEDTOX Scientific, Inc. Fredrikson & Byron, P.A. 402 West County Road D 1100 International Centre St. Paul, Minnesota 55112 900 Second Avenue South (651) 286-6225 Minneapolis, Minnesota 55402 (612) 347-7184 (Name, address and telephone number, including area code, of agent for service) CALCULATION OF REGISTRATION FEE Proposed maximum Proposed maximum aggregate Amount of Title of securities Amount to be offering price offering registration to be registered registered per share (2) price (2) fee ---------------- ---------- -------------- --------- ---------- Common Stock,par value 700,964(1) $12.04 $8,439,606 $2,229.74 $0.15 per share (1) (a) Includes 560,964 shares available for issuance under the MEDTOX Scientific, Inc. Restated Equity Compensation Plan. (b) Includes 125,000 shares issuable under the MEDTOX Scientific, Inc. Qualified Employee Stock Purchase Plan. (c) Includes 15,000 shares available for issuance under the MEDTOX Scientific, Inc. Non-Employee Director Plan. This registration statement also covers such additional number of shares as may be required in the event of a stock split, stock dividend, recapitalization, reorganization, merger, consolidation or other similar event. (2) Solely for the purpose of calculating the registration fee in accordance with Rule 457(h)(1) and (c). The Proposed Maximum Offering Price Per Share and Proposed Maximum Aggregate Offering Price are based upon (i) with respect to 386,821 shares that may be acquired pursuant to stock options granted under the MEDTOX Scientific, Inc. Restated Equity Compensation Plan, and the 15,000 shares that may be acquired pursuant to options granted under the MEDTOX Scientific, Inc. Non-Employee Director Plan, the weighted average price at which such stock options may be exercised, (ii) with respect to 28,444 shares issued under the MEDTOX Scientific, Inc. Qualified Employee Stock Purchase Plan, the weighted average price at which such shares were purchased, and (iii) with respect to the remaining 288,199 shares that may be issuable from time to time after the date hereof under the three Plans, $11.75 per share, which represents the average of the high and low prices of the Common Stock as reported on the American Stock Exchange on November 3, 2000. PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. --------------------------------------- The following documents that we have filed with the Securities and Exchange Commission are incorporated by reference into this registration statement: o our annual report on Form 10-K for the year ended December 31, 1999; o our quarterly reports on Form 10-Q for the quarters ended March 31, 2000 and June 30, 2000; and o the description of our common stock contained in our registration statement on Form 8-A and any amendment or report filed for the purpose of updating the description. All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the date of this registration statement and prior to the filing of a post-effective amendment indicating that all securities offered by this registration statement have been sold, or deregistering all securities remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part of this registration statement from the respective dates of filing of such documents. 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 145 of the Delaware General Corporation Law ("DGCL") authorizes a corporation's board of directors to grant indemnity to directors and officers in terms sufficiently broad to permit indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act. As permitted by the DGCL, our certificate of incorporation provides that we shall indemnify our directors, officers, employees and agents to the fullest extent permitted by the DGCL. As permitted by the DGCL, our certificate of incorporation also includes a provision that eliminates the personal liability of our directors for monetary damages for breach of the director's fiduciary duty, except for liability (1) for any breach of the director's duty of loyalty to us or our stockholders; (2) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; (3) under Section 174 of the DGCL regarding payments of dividends, stock purchases or redemptions which are unlawful; or (4) for any transaction from which the director derived an improper personal benefit. Item 7. Exemption from Registration Claimed. ----------------------------------- Not applicable. Item 8. Exhibits. -------- 4.1 Medtox Scientific, Inc. Restated Equity Compensation Plan. 4.2 Medtox Scientific, Inc. Qualified Employee Stock Purchase Plan. 4.3 Medtox Scientific, Inc. 1991 Non-Employee Director Plan. 5.1 Opinion of Fredrikson & Byron, P.A. 23.1 Consent of Deloitte & Touche LLP. 23.2 Consent of Ernst & Young LLP 23.3 Consent of Fredrikson & Byron, P.A. (contained in Exhibit 5.1 to this registration statement). 24.1 Power of Attorney (included in the signature page of this registration statement). Item 9. Undertakings. ------------ (a) The undersigned registrant 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; (ii) To reflect in the prospectus any facts or events arising after the effective date of the 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 the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Feel, table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, 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 the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the 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. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 such indemnification is against public policy as expressed in the Securities 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 other 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 Securities 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 for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on November 3, 2000. MEDTOX Scientific, Inc. By: /s/ Richard J. Braun --------------------------------------- Richard J. Braun President, CEO and Director (Principal Executive Officer) POWER OF ATTORNEY Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Each person whose signature to this Registration Statement appears below hereby constitutes and appoints Richard J. Braun and James B. Lockhart, and each of them, as his or her true and lawful attorney-in fact and agent, with full power and substitution, to sign on his or her behalf individually and in the capacity stated below and to perform any acts necessary to be done in order to file all amendments and post-effective amendments to this Registration Statement, and any and all instruments or documents filed as part of or in connection with this Registration Statement or the amendments thereto, and each of the undersigned does hereby ratify and confirm all that said attorney-in-fact and agent, or his or her substitutes, shall do or cause to be done by virtue hereof. Signatures Title Date /s/ Richard J. Braun President, CEO and Director November 3, 2000 - ------------------------ Richard J. Braun /s/ James B. Lockhart Vice President of Finance, November 3, 2000 - ------------------------ Chief Financial Officer James B. Lockhart & Secretary /s/ Miles E. Efron Director November 3, 2000 - ----------------------- Miles E. Efron /s/ James W. Hansen Director November 3, 2000 - ---------------------- James W. Hansen /s/ Brian Johnson Director November 3, 2000 - --------------------- Brian Johnson EXHIBIT INDEX 4.1 Medtox Scientific, Inc. Restated Equity Compensation Plan. 4.2 Medtox Scientific, Inc. Qualified Employee Stock Purchase Plan. 4.3 Medtox Scientific, Inc. 1991 Non-Employee Director Plan. 5.1 Opinion of Fredrikson & Byron, P.A. 23.1 Consent of Deloitte & Touche LLP. 23.2 Consent of Ernst & Young LLP 23.3 Consent of Fredrikson & Byron, P.A. (contained in Exhibit 5.1 to this registration statement). 24.1 Power of Attorney (included in the signature page of this registration statement). EX-4.1 2 0002.txt EXHIBIT 4.1 Exhibit 4.1 MEDTOX RESTATED EQUITY COMPENSATION PLAN as amended and restated effective as of May 10, 2000 ARTICLE I - GENERAL PROVISIONS 1.1 The Plan is designed, for the benefit of the Company, to attract and retain for the Company personnel of exceptional ability; to motivate such personnel through added incentives to make a maximum contribution to greater profitability; to develop and maintain a highly competent management team; and to be competitive with other companies with respect to executive compensation. 1.2 Awards under the Plan may be made to Participants in the form of (i) Incentive Stock Options; (ii) Nonqualified Stock Options; (iii) Stock Appreciation Rights; (iv) Restricted Stock; (v) Deferred Stock; (vi) Stock Awards; (vii) Performance Shares; and (viii) Other Stock-Based Awards and other forms of equity-based compensation as may be provided and are permissible under this Plan and the law. 1.3 The Plan, shall be effective October 26, 1993 (the "Effective Date"), subject to the approval of shareholders of the Company on such date. ARTICLE II - DEFINITIONS DEFINITIONS. Except where the context otherwise indicates, the following definitions apply: 2.1 "Acceleration Event" means the occurrence of an event defined in Article XIII of the Plan. 2.2 "Act" means the Securities Exchange Act of 1934, as now in effect or as hereafter amended. (All citations to sections of the Act or rules thereunder are to such sections or rules as they may from time to time be amended or renumbered.) 2.3 "Agreement" means the written agreement evidencing each Award granted to a Participant under the Plan. 2.4 "Award" means an award granted to a Participant in accordance with the provisions of the Plan, including, but not limited to, a Stock Option, Stock Right, Restricted or Deferred Stock, Stock Awards, Performance Shares, other Stock-Based Award, or any combination of the foregoing. 2.5 "Board" means the Board of Directors of MEDTOX SCIENTIFIC, INC. 2.6 "Code" means the Internal Revenue Code of 1986, as now in effect or as hereafter amended. (All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered.) 2.7 "Committee" means the Compensation Committee or such other committee consisting of three or more members as may be appointed by the Board to administer this Plan pursuant to Article III. To the extent required by Rule 16b-3 under the Act, the Committee shall consist of individuals who are members of the Board and Disinterested Persons. Committee members may also be appointed for such limited purposes as may be provided by the Board. 2.8 "Company" means MEDTOX SCIENTIFIC, INC., a Delaware corporation, and its successors and assigns. The term "Company" shall include any corporation which is a member of a controlled group of corporations (as defined in Section 414(b) of the Code, as modified by Section 415(h) of the Code) which includes the Company; any trade or business (whether or not incorporated) which is under common control (as defined in Section 414(c) of the Code, as modified by Section 415(h) of the Code) with the Company; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Section 414(m) of the Code) which includes the Company; and any other entity required to be aggregated with the Company pursuant to regulations under Section 414(o) of the Code. With respect to all purposes of the Plan, including, but not limited to, the establishment, amendment, termination, operation and administration of the Plan, MEDTOX SCIENTIFIC, INC. shall be authorized to act on behalf of all other entities included within the definition of Company. 2.9 "Deferred Stock" means the stock awarded under Article IX of the Plan. 2.10 "Disability" means disability as determined under procedures established by the Committee or in any Award. 2.11 "Discount Stock Options" means the Nonqualified Stock Options which provide for an exercise price of less than the Fair Market Value of the Stock at the date of the Award. 2.12 "Disinterested Person" shall have the meaning set forth in Rule 16b-3 under the Act. 2.13 "Early Retirement" means retirement from active employment with the Company, with the express consent of the Committee, pursuant to the early retirement provisions established by the Committee or in any Award. 2.14 "Eligible Participant" means any employee of the Company, as shall be determined by the Committee, as well as any other person, including directors, subject to such limitations imposed on a person designated as a Disinterested Person, whose participation the Committee determines is in the best interest of the Company, subject to limitations as may be provided by the Code, the Act or the Committee. 2.15 "Fair Market Value" means, with respect to any given day, the closing price of the Stock reported on the stock exchange on which the Stock is then listed for such day, as reported by such source as the Committee may select, provided there was a sale of at least 100 shares of Stock on such date. If there was not a sale of at least 100 shares of Stock on such day, the Fair Market Value shall be determined based on the closing price of the Stock reported on the stock exchange as of the last date on which there was a sale of at least 100 shares of Stock. The Committee may establish an alternative method of determining Fair Market Value. 2.16 "Incentive Stock Option" means a Stock Option granted under Article IV of the Plan, and as defined in Section 422 of the Code. 2.17 "Limited Stock Appreciation Rights" means a Stock Right which is exercisable only in the event of a Change in Control and/or a Potential Change in Control, as described in Section 6.9 of this Plan, which provides for an amount payable solely in cash, equal to the excess of the Stock Appreciation Right Fair Market Value of a share of Stock on the day the Stock Right is surrendered over the price at which a Participant could exercise a related Stock Option to purchase the share of Stock. 2.18 "Nonqualified Stock Option" means a Stock Option granted under Article V of the Plan. 2.19 "Normal Retirement" means retirement from active employment with the Company on or after age 65, or pursuant to such other requirements as may be established by the Committee or in any Award. 2.20 "Option Grant Date" means, as to any Stock Option, the latest of: (a) the date on which the Committee grants the Stock Option by entering into an Award Agreement with the Participant; (b) the date the Participant receiving the Stock Option becomes an employee of the Company, to the extent employment status is a condition of the grant or a requirement of the Code or the Act; or (c) such other date (later than the dates described in (i) and (ii) above) as the Committee may designate. 2.21 "Participant" means an Eligible Participant to whom an Award of equity-based compensation has been granted and who has entered into an Agreement evidencing the Award. 2.22 "Performance Share" means an Award under Article XI of the Plan of a unit valued by reference to a designated number of shares of Stock, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including without limitation, cash or Stock, or any combination thereof, upon achievement of such Performance objectives during the Performance Period as the Committee shall establish at the time of such Award or thereafter. 2.23 "Plan" means the MEDTOX SCIENTIFIC, INC. Equity Compensation Plan, as amended from time to time. 2.24 "Restricted Stock" means an Award of Stock under Article VIII of the Plan, which Stock is issued with the restriction that the holder may not sell, transfer, pledge, or assign such Stock and with such other restrictions as the Committee, in its sole discretion, may impose, including without limitation, any restriction on the right to vote such Stock, and the right to receive any cash dividends, which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate. 2.25 "Restriction Period" means the period commencing on the date an Award of Restricted Stock is granted and ending on such date as the Committee shall determine. 2.26 "Retirement" means Normal or Early Retirement. 2.27 "Stock" means shares of common stock of MEDTOX SCIENTIFIC, INC., as may be adjusted pursuant to the provisions of Section 3.11. 2.28 "Stock Appreciation Right" means a Stock Right, as described in Article VI of this Plan, which provides for an amount payable in Stock and/or cash, as determined by the Committee, equal to the excess of the Fair Market Value of a share of Stock on the day the Stock Right is exercised over the price at which the Participant could exercise a related Stock Option to purchase the share of Stock. 2.29 "Stock Appreciation Right Fair Market Value" means a value established by the Committee for the exercise of a Stock Appreciation Right or a Limited Stock Appreciation Right. If such exercise occurs during any quarterly "window period," as specified by Rule 16b-3 under the Act, the Committee may establish a common value for exercises during such window period. 2.30 "Stock Award" means an Award of Stock granted in payment of compensation, as provided in Article X of the Plan. 2.31 "Stock Option" means an Award under Article IV or V of the Plan of an option to purchase Stock. A Stock Option may be either an Incentive Stock Option or a Nonqualified Stock Option. 2.32 "Stock Right" means an Award under Article VI of the Plan. A Stock Right may be either a Stock Appreciation Right or a Limited Stock Appreciation Right. 2.33 "Termination of Employment" means the discontinuance of employment of a Participant with the Company for any reason. The determination of whether a Participant has discontinued employment shall be made by the Committee in its discretion. In determining whether a Termination of Employment has occurred, the Committee may provide that service as a consultant or service with a business enterprise in which the Company has a significant ownership interest shall be treated as employment with the Company. The Committee shall have the discretion, exercisable either at the time the Award is granted or at the time the Participant terminates employment, to establish as a provision applicable to the exercise of one or more Awards that during the limited period of exercisability following Termination of Employment, the Award may be exercised not only with respect to the number of shares of Stock for which it is exercisable at the time of the Termination of Employment but also with respect to one or more subsequent installments for which the Award would have become exercisable had the Termination of Employment not occurred. ARTICLE III - ADMINISTRATION 3.1 This Plan shall be administered by the Committee. A Committee member who is not a Disinterested Person, with respect to action to be taken by the Committee, shall not be able to participate in the decision to the extent prescribed by Rule 16b-3 under the Act. The Committee, in its discretion, may delegate to one or more of its members such of its powers as it deems appropriate. The Committee also may limit the power of any member to the extent necessary to comply with Rule 16b-3 under the Act or any other law. Members of the Committee shall be appointed originally, and as vacancies occur, by the Board, to serve at the pleasure of the Board. The Board may serve as the Committee, if by the terms of the Plan all Board members are otherwise eligible to serve on the Committee. 3.2 The Committee shall meet at such times and places as it determines. A majority of its members shall constitute a quorum, and the decision of a majority of those present at any meeting at which a quorum is present shall constitute the decision of the Committee. A memorandum signed by all of its members shall constitute the decision of the Committee without necessity, in such event, for holding an actual meeting. 3.3 The Committee shall have the exclusive right to interpret, construe and administer the Plan, to select the persons who are eligible to receive an Award, and to act in all matters pertaining to the granting of an Award and the contents of the Agreement evidencing the Award, including without limitation, the determination of the number of Stock Options, Stock Rights, shares of Stock or Performance Shares subject to an Award and the form, terms, conditions and duration of each Award, and any amendment thereof consistent with the provisions of the Plan. All acts, determinations and decisions of the Committee made or taken pursuant to grants of authority under the Plan or with respect to any questions arising in connection with the administration and interpretation of the Plan, including the severability of any and all of the provisions thereof, shall be conclusive, final and binding upon all Participants, Eligible Participants and their beneficiaries. 3.4 The Committee may adopt such rules, regulations and procedures of general application for the administration of this Plan, as it deems appropriate. 3.5 Without limiting the foregoing Sections 3.1, 3.2, 3.3 and 3.4, and notwithstanding any other provisions of the Plan, the Committee is authorized to take such action as it determines to be necessary or advisable, and fair and equitable to Participants, with respect to an Award in the event of an Acceleration Event as defined in Article XIII. Such action may include, but shall not be limited to, establishing, amending or waiving the forms, terms, conditions and duration of an Award and the Award Agreement, so as to provide for earlier, later, extended or additional times for exercise or payments, differing methods for calculating payments, alternate forms and amounts of payment, an accelerated release of restrictions or other modifications. The Committee may take such actions pursuant to this Section 3.5 by adopting rules and regulations of general applicability to all Participants or to certain categories of Participants, by including, amending or waiving terms and conditions in an Award and the Award Agreement, or by taking action with respect to individual Participants. 3.6 The aggregate number of shares of Stock which are subject to an Award under the Plan shall be an amount equal to sixteen percent (16%) of the Company's Common Stock, issued and outstanding from time to time. Such shares of Stock shall be made available from authorized and un-issued shares of the Company. All of such shares of Stock may be subject to Incentive Stock Option Awards pursuant to Article IV hereof. (a) If, for any reason, any shares of Stock or Performance Shares awarded or subject to purchase under the Plan are not delivered or purchased, or are reacquired by the Company, for reasons including, but not limited to, a forfeiture of Restricted Stock or termination, expiration or cancellation of a Stock Option, Stock Right or Performance Share, or any other termination of an Award without payment being made in the form of Stock, whether or not Restricted Stock, such shares of Stock or Performance Shares shall not be charged against the aggregate number of shares of Stock available for Awards under the Plan, and may again be available for Award under the Plan. (b) For all purposes under the Plan, each Performance Share awarded shall be counted as one share of Stock subject to an Award. (c) To the extent a Stock Right granted in connection with a Stock Option is exercised without payment being made in the form of Stock, whether or not Restricted Stock, the shares of Stock which otherwise would have been issued upon the exercise of such related Stock Option shall not be charged against the aggregate number of shares of Stock subject to Awards under the Plan, and may again be available for Award under the Plan. 3.7 Each Award granted under the Plan shall be evidenced by a written Award Agreement. Each Award Agreement shall be subject to and incorporate, by reference or otherwise, the applicable terms and conditions of the Plan, and any other terms and conditions, not inconsistent with the Plan, required by the Committee. 3.8 The Company shall not be required to issue or deliver any certificates for shares of Stock prior to: (a) the listing of such shares on any stock exchange on which the Stock may then be listed; and (b) the completion of any registration or qualification of such shares of Stock under any federal or state law, or any ruling or regulation of any government body which the Company shall, in its discretion, determine to be necessary or advisable. 3.9 All certificates for shares of Stock delivered under the Plan shall also be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Stock is then listed and any applicable federal or state laws, and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. In making such determination, the Committee may rely upon an opinion of counsel for the Company. 3.10 Subject to the restrictions on Restricted Stock, as provided in Article VIII of the Plan and in the Restricted Stock Award Agreement, each Participant who receives an Award of Restricted Stock shall have all of the rights of a shareholder with respect to such shares of Stock, including the right to vote the shares to the extent, if any, such shares possess voting rights and receive dividends and other distributions. Except as provided otherwise in the Plan or in an Award Agreement, no Participant awarded a Stock Option, Stock Right, Deferred Stock, Stock Award or Performance Share shall have any right as a shareholder with respect to any shares of Stock covered by his or her Stock Option, Stock Right, Deferred Stock, Stock Award or Performance Share prior to the date of issuance to him or her of a certificate or certificates for such shares of Stock. 3.11 If any reorganization, recapitalization, reclassification, stock split-up, stock dividend, or consolidation of shares of Stock, merger or consolidation of the Company or sale or other disposition by the Company of all or a portion of its assets, any other change in the Company's corporate structure, or any distribution to shareholders other than a cash dividend results in the outstanding shares of Stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or class of shares of Stock or other securities of the Company, or for shares of Stock or other securities of any other corporation; or new, different or additional shares or other securities of the Company or of any other corporation being received by the holders of outstanding shares of Stock, then equitable adjustments shall be made by the Committee in: (a) the limitation of the aggregate number of shares of Stock that may be awarded as set forth in Section 3.6 of the Plan; (b) the number and class of Stock that may be subject to an Award, and which have not been issued or transferred under an outstanding Award; (c) the purchase price to be paid per share of Stock under outstanding Stock Options and the number of shares of Stock to be transferred in settlement of outstanding Stock Rights; and (d) the terms, conditions or restrictions of any Award and Award Agreement, including the price payable for the acquisition of Stock; provided, however, that all adjustments made as the result of the foregoing in respect of each Incentive Stock Option shall be made so that such Stock Option shall continue to be an Incentive Stock Option, as defined in Section 422 of the Code. 3.12 In addition to such other rights of indemnification as they may have as directors or as members of the Committee, the members of the Committee shall be indemnified by the Company against reasonable expenses, including attorney's fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted thereunder, and against all amounts paid by them in settlement thereof, provided such settlement is approved by independent legal counsel selected by the Company, or paid by them in satisfaction of a judgment or settlement in any such action, suit or proceeding, except as to matters as to which the Committee member has been negligent or engaged in misconduct in the performance of his duties; provided, that within 60 days after institution of any such action, suit or proceeding, a Committee member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. 3.13 The Committee may require each person purchasing shares of Stock pursuant to a Stock Option or other Award under the Plan to represent to and agree with the Company in writing that he is acquiring the shares of Stock without a view to distribution thereof. The certificates for such shares of Stock may include any legend which the Committee deems appropriate to reflect any restrictions on transfer. 3.14 The Committee shall be authorized to make adjustments in performance based criteria or in the terms and conditions of other Awards in recognition of unusual or nonrecurring events affecting the Company or its financial statements or changes in applicable laws, regulations or accounting principles. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement in the manner and to the extent it shall deem desirable to carry it into effect. In the event the Company shall assume outstanding employee benefit awards or the right or obligation to make future such awards in connection with the acquisition of another corporation or business entity, the Committee may, in its discretion, make such adjustments in the terms of Awards under the Plan as it shall deem appropriate. 3.15 The Committee shall have full power and authority to determine whether, to what extent and under what circumstances, any Award shall be canceled or suspended. In particular, but without limitation, all outstanding Awards to any Participant may be canceled if (a) the Participant, without the consent of the Committee, while employed by the Company or after termination of such employment, becomes associated with, employed by, renders services to, or owns any interest in, other than any non-substantial interest, as determined by the Committee, any business that is in competition with the Company or with any business in which the Company has a substantial interest as determined by the Committee; or (b) is terminated for cause as determined by the Committee. ARTICLE IV - INCENTIVE STOCK OPTIONS 4.1 Each provision of this Article IV and of each Incentive Stock Option granted hereunder shall be construed in accordance with the provisions of Section 422 of the Code, and any provision hereof that cannot be so construed shall be disregarded. 4.2 Incentive Stock Options shall be granted only to Eligible Participants who are in the active employment of the Company, each of whom may be granted one or more such Incentive Stock Options for a reason related to his employment at such time or times determined by the Committee following the Effective Date until October 26, 2003, subject to the following conditions: (a) The Incentive Stock Option price per share of Stock shall be set in the Award Agreement, but shall not be less than 100% of the Fair Market Value of the Stock on the Option Grant Date. If the Optionee owns more than 10% of the outstanding Stock (as determined pursuant to Section 424(d) of the Code) on the Option Grant Date, the Incentive Stock Option price per share shall not be less than 110% of the Fair Market Value of the Stock on the Option Grant Date. (b) The Incentive Stock Option and its related Stock Right, if any, may be exercised in whole or in part from time to time within ten (10) years from the Option Grant Date (five (5) years if the Optionee owns more than 10% of the Stock on the Option Grant Date), or such shorter period as may be specified by the Committee in the Award; provided, that in any event, the Incentive Stock Option and related Stock Right shall lapse and cease to be exercisable upon, or within such period following, a Termination of Employment as shall have been determined by the Committee and as specified in the Incentive Stock Option Award Agreement or its related Stock Right Award Agreement; provided, however, that such period following a Termination of Employment shall not exceed three months unless employment shall have terminated: (i) as a result of death or Disability, in which event, such period shall not exceed one year after the date of death or Disability; and (ii) as a result of death, if death shall have occurred following a Termination of Employment and while the Incentive Stock Option or Stock Right was still exercisable, in which event, such period shall not exceed one year after the date of death; provided, further, that such period following a Termination of Employment shall in no event extend the original exercise period of the Incentive Stock Option or any related Stock Right. (c) The aggregate Fair Market Value, determined as of the Option Grant Date, of the shares of Stock with respect to which Incentive Stock Options are first exercisable during any calendar year by any Eligible Participant shall not exceed $100,000; provided, however, to the extent permitted under Section 422 of the Code: (i) if a Participant's employment is terminated by reason of death, Disability or Retirement and the portion of any Incentive Stock Option that is otherwise exercisable during the post-termination period applied without regard to the $100,000 limitation contained in section 422(b)(6) of the Code is greater than the portion of such option that is immediately exercisable as an Incentive Stock Option during such post-termination period under Section 422, such excess shall be treated as a Nonqualified Stock Option; and (ii) if the exercise of an Incentive Stock Option is accelerated by reason of an Acceleration Event, any portion of such Award that is not exercisable as an Incentive Stock Option by reason of the $100,000 limitation contained in Section 422(b)(6) of the Code shall be treated as a Nonqualified Stock Option. (d) The Committee may adopt any other terms and conditions which it determines should be imposed for the Incentive Stock Option to qualify under Section 422 of the Code, as well as any other terms and conditions not inconsistent with this Article IV as determined by the Committee. 4.3 The Committee may at any time offer to buy out for a payment in cash, Stock, Deferred Stock or Restricted Stock an Incentive Stock Option previously granted, based on such terms and conditions as the Committee shall establish and communicate to the Participant at the time that such offer is made. 4.4 If the Incentive Stock Option Award Agreement so provides, the Committee may require that all or part of the shares of Stock to be issued upon the exercise of an Incentive Stock Option shall take the form of Deferred or Restricted Stock, which shall be valued on the date of exercise, as determined by the Committee, on the basis of the Fair Market Value of such Deferred Stock or Restricted Stock determined without regard to the deferral limitations and/or forfeiture restrictions involved. ARTICLE V - NONQUALIFIED STOCK OPTIONS 5.1 One or more Stock Options may be granted as Nonqualified Stock Options to Eligible Participants to purchase shares of Stock at such time or times determined by the Committee, following the Effective Date, subject to the terms and conditions set forth in this Article V. 5.2 The Nonqualified Stock Option price per share of Stock shall be established in the Award Agreement and may be less than 100% of the Fair Market Value at the time of the grant, or at such later date as the Committee shall determine. 5.3 The Nonqualified Stock Option and its related Stock Right, if any, may be exercised in full or in part from time to time within such period as may be specified by the Committee or in the Award Agreement; provided, that, in any event, the Nonqualified Stock Option and the related Stock Right shall lapse and cease to be exercisable upon, or within such period following, Termination of Employment as shall have been determined by the Committee and as specified in the Nonqualified Stock Option Award Agreement or Stock Right Award Agreement; provided, however, that such period following Termination of Employment shall not exceed three months unless employment shall have terminated: (a) as a result of Retirement or Disability, in which event, such period shall not exceed one year after the date of Retirement or Disability, or within such longer period as the Committee may specify; and (b) as a result of death, or if death shall have occurred following a Termination of Employment and while the Nonqualified Stock Option or Stock Right was still exercisable, in which event, such period may exceed one year after the date of death, as provided by the Committee or in the Award Agreement. 5.4 The Nonqualified Stock Option Award Agreement may include any other terms and conditions not inconsistent with this Article V or in Article VII, as determined by the Committee. ARTICLE VI - STOCK APPRECIATION RIGHTS 6.1 A Stock Appreciation Right may be granted to an Eligible Participant in connection with an Incentive Stock Option or a Nonqualified Stock Option granted under Article IV or Article V of this Plan, or may be granted independent of any related Stock Option. 6.2 A related Stock Appreciation Right shall entitle a holder of a Stock Option, within the period specified for the exercise of the Stock Option, to surrender the unexercised Stock Option, or a portion thereof, and to receive in exchange therefor a payment in cash or shares of Stock having an aggregate value equal to the amount by which the Fair Market Value of each share of Stock exceeds the Stock Option price per share of Stock, times the number of shares of Stock under the Stock Option, or portion thereof, which is surrendered. 6.3 Each related Stock Appreciation Right granted hereunder shall be subject to the same terms and conditions as the related Stock Option, including limitations on transferability, and shall be exercisable only to the extent such Stock Option is exercisable and shall terminate or lapse and cease to be exercisable when the related Stock Option terminates or lapses. The grant of Stock Appreciation Rights related to Incentive Stock Options must be concurrent with the grant of the Incentive Stock Options. With respect to Nonqualified Stock Options, the grant either may be concurrent with the grant of the Nonqualified Stock Options, or in connection with Nonqualified Stock Options previously granted under Article V, which are unexercised and have not terminated or lapsed. 6.4 The Committee shall have sole discretion to determine in each case whether the payment with respect to the exercise of a Stock Appreciation Right will be in the form of all cash or all Stock, or any combination thereof. If payment is to be made in Stock, the number of shares of Stock shall be determined based on the Fair Market Value of the Stock on the date of exercise. If the Committee elects to make full payment in Stock, no fractional shares of Stock shall be issued and cash payments shall be made in lieu of fractional shares. 6.5 The Committee shall have sole discretion as to the timing of any payment made in cash or Stock, or a combination thereof, upon exercise of Stock Appreciation Rights. Payment may be made in a lump sum, in annual installments or may be otherwise deferred; and the Committee shall have sole discretion to determine whether any deferred payments may bear amounts equivalent to interest or cash dividends. 6.6 Upon exercise of a Stock Appreciation Right, the number of shares of Stock subject to exercise under any related Stock Option shall automatically be reduced by the number of shares of Stock represented by the Stock Option or portion thereof which is surrendered. 6.7 Notwithstanding any other provision of the Plan, the exercise of a Stock Appreciation Right is required to satisfy the applicable requirements under Rule 16b-3 of the Act. 6.8 The Committee, in its sole discretion, may also provide that, in the event of a Change in Control and/or a Potential Change in Control, as defined in Article XIII, the amount to be paid upon the exercise of a Stock Appreciation Right or Limited Stock Appreciation Right shall be based on the Change in Control Price, as defined in Section 13.9, subject to such terms and conditions as the Committee may specify. 6.9 In its sole discretion, the Committee may grant Limited Stock Appreciation Rights under this Article VI. Limited Stock Appreciation Rights become exercisable only in the event of a Change in Control and/or a Potential Change in Control, subject to such terms and conditions as the Committee, in its sole discretion, may specify. Such Limited Stock Appreciation Rights shall be settled solely in cash. A Limited Stock Appreciation Right shall entitle the holder of the related Stock Option to surrender such Stock Option, or any portion thereof, to the extent unexercised in respect of the number of shares of Stock as to which such Limited Stock Appreciation Right is exercised, and to receive a cash payment equal to the difference between (a) the Stock Appreciation Right Fair Market Value, at the date of surrender, of a share of Stock for which the surrendered Stock Option or portion thereof is then exercisable, and (b) the price at which a Participant could exercise a related Stock Option to purchase the share of Stock. Such Stock Option shall, to the extent so surrendered, thereupon cease to be exercisable. A Limited Stock Appreciation Right shall be subject to such further terms and conditions as the Committee shall, in its sole discretion, deem appropriate, including any restrictions necessary to comply with Section 16(b) of the Act. ARTICLE VII - INCIDENTS OF STOCK OPTIONS AND STOCK RIGHTS 7.1 Each Stock Option and Stock Right shall be granted subject to such terms and conditions, if any, not inconsistent with this Plan, as shall be determined by the Committee, including any provisions as to continued employment as consideration for the grant or exercise of such Stock Option or Stock Right and any provisions which may be advisable to comply with applicable laws, regulations or rulings of any governmental authority. 7.2 A Stock Option or Stock Right shall not be transferable by the Participant other than by will or by the laws of descent and distribution, or, to the extent otherwise allowed by Rule 16b-3 under the Act, or other applicable law, pursuant to a qualified domestic relations order as defined by the Code or the Employee Retirement Income Security Act, or the rules thereunder, and shall be exercisable during the lifetime of the Participant only by him or by his guardian or legal representative. 7.3 Shares of Stock purchased upon exercise of a Stock Option shall be paid for in such amounts, at such times and upon such terms as shall be determined by the Committee, subject to limitations set forth in the Stock Option Award Agreement. Without limiting the foregoing, the Committee may establish payment terms for the exercise of Stock Options which permit the Participant to deliver shares of Stock, or other evidence of ownership of Stock satisfactory to the Company, with a Fair Market Value equal to the Stock Option price as payment. 7.4 No cash dividends shall be paid on shares of Stock subject to unexercised Stock Options. The Committee may provide, however, that a Participant to whom a Stock Option has been granted which is exercisable in whole or in part at a future time for shares of Stock shall be entitled to receive an amount per share equal in value to the cash dividends, if any, paid per share on issued and outstanding Stock, as of the dividend record dates occurring during the period between the date of the grant and the time each such share of Stock is delivered pursuant to exercise of such Stock Option or the related Stock Right. Such amounts (herein called "dividend equivalents") may, in the discretion of the Committee, be: (a) paid in cash or Stock either from time to time prior to, or at the time of the delivery of, such Stock, or upon expiration of the Stock Option if it shall not have been fully exercised; or (b) converted into contingently credited shares of Stock, with respect to which dividend equivalents may accrue, in such manner, at such value, and deliverable at such time or times, as may be determined by the Committee. Such Stock, whether delivered or contingently credited, shall be charged against the limitations set forth in Section 3.6. 7.5 The Committee, in its sole discretion, may authorize payment of interest equivalents on dividend equivalents which are payable in cash at a future time. 7.6 In the event of Disability or death, the Committee, with the consent of the Participant or his legal representative, may authorize payment, in cash or in Stock, or partly in cash and partly in Stock, as the Committee may direct, of an amount equal to the difference at the time between the Fair Market Value of the Stock subject to a Stock Option and the option price in consideration of the surrender of the Stock Option. 7.7 If a Participant is required to pay to the Company an amount with respect to income and employment tax withholding obligations in connection with exercise of a Nonqualified Stock Option, and/or with respect to certain dispositions of Stock acquired upon the exercise of an Incentive Stock Option, the Committee, in its discretion and subject to such rules as it may adopt, may permit the Participant to satisfy the obligation, in whole or in part, by making an irrevocable election that a portion of the total Fair Market Value of the shares of Stock subject to the Nonqualified Stock Option and/or with respect to certain dispositions of Stock acquired upon the exercise of an Incentive Stock Option, be paid in the form of cash in lieu of the issuance of Stock and that such cash payment be applied to the satisfaction of the withholding obligations. The amount to be withheld shall not exceed the statutory minimum federal and state income and employment tax liability arising from the Stock Option exercise transaction. Notwithstanding any other provision of the Plan, any election under this Section 7.7 is required to satisfy the applicable requirements under Rule 16b-3 of the Act. 7.8 The Committee may permit the voluntary surrender of all or a portion of any Stock Option granted under the Plan to be conditioned upon the granting to the Participant of a new Stock Option for the same or a different number of shares of Stock as the Stock Option surrendered, or may require such surrender as a condition precedent to a grant of a new Stock Option to such Participant. Subject to the provisions of the Plan, such new Stock Option shall be exercisable at the same price, during such period and on such other terms and conditions as are specified by the Committee at the time the new Stock Option is granted. Upon surrender, the Stock Options surrendered shall be canceled and the shares of Stock previously subject to them shall be available for the grant of other Stock Options. ARTICLE VIII - RESTRICTED STOCK 8.1 Restricted Stock Awards may be made to certain Participants as an incentive for the performance of future services that will contribute materially to the successful operation of the Company. Awards of Restricted Stock may be made either alone, in addition to or in tandem with other Awards granted under the Plan and/or cash payments made outside of the Plan. 8.2 With respect to Awards of Restricted Stock, the Committee shall: (a) determine the purchase price, if any, to be paid for such Restricted Stock, which may be equal to or less than par value and may be zero, subject to such minimum consideration as may be required by applicable law; (b) determine the length of the Restriction Period; (c) determine any restrictions applicable to the Restricted Stock such as service or performance, other than those set forth in this Article VIII; (d) determine if the restrictions shall lapse as to all shares of Restricted Stock at the end of the Restriction Period or as to a portion of the shares of Restricted Stock in installments during the Restriction Period; and (e) determine if dividends and other distributions on the Restricted Stock are to be paid currently to the Participant or paid to the Company for the account of the Participant. 8.3 Awards of Restricted Stock must be accepted within a period of 60 days, or such shorter period as the Committee may specify, by executing a Restricted Stock Award Agreement and paying whatever price, if any, is required. The prospective recipient of a Restricted Stock Award shall not have any rights with respect to such Award, unless such recipient has executed a Restricted Stock Award Agreement and has delivered a fully executed copy thereof to the Committee, and has otherwise complied with the applicable terms and conditions of such Award. 8.4 Except when the Committee determines otherwise, or as otherwise provided in the Restricted Stock Award Agreement, if a Participant terminates employment with the Company for any reason before the expiration of the Restriction Period, all shares of Restricted Stock still subject to restriction shall be forfeited by the Participant and shall be reacquired by the Company. 8.5 Except as otherwise provided in this Article VIII, no shares of Restricted Stock received by a Participant shall be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of during the Restriction Period. 8.6 To the extent not otherwise provided in a Restricted Stock Award Agreement, in cases of death, Disability or Retirement or in cases of special circumstances, the Committee, if it finds that a waiver would be appropriate, may elect to waive any or all remaining restrictions with respect to such Participant's Restricted Stock. 8.7 In the event of hardship or other special circumstances of a Participant whose employment with the Company is involuntarily terminated, the Committee may waive in whole or in part any or all remaining restrictions with respect to any or all of the Participant's Restricted Stock, based on such factors and criteria as the Committee may deem appropriate. 8.8 The certificates representing shares of Restricted Stock may either: (a) be held in custody by the Company until the Restriction Period expires or until restrictions thereon otherwise lapse, and the Participant shall deliver to the Company a stock power endorsed in blank relating to the Restricted Stock; and/or (b) be issued to the Participant and registered in the name of the Participant, and shall bear an appropriate restrictive legend and shall be subject to appropriate stop-transfer orders. 8.9 Except as provided in this Article VIII, a Participant receiving a Restricted Stock Award shall have, with respect to the shares of Restricted Stock covered by any Award, all of the rights of a shareholder of the Company, including the right to vote the shares to the extent, if any, such shares possess voting rights and the right to receive any dividends; provided, however, the Committee may require that any dividends on such shares of Restricted Stock shall be automatically deferred and reinvested in additional Restricted Stock subject to the same restrictions as the underlying Award, or may require that dividends and other distributions on Restricted Stock shall be paid to the Company for the account of the Participant. The Committee shall determine whether interest shall be paid on such amounts, the rate of any such interest, and the other terms applicable to such amounts. 8.10 If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock subject to such Restriction Period, unrestricted certificates for such shares shall be delivered to the Participant. 8.11 In order to better ensure that Award payments actually reflect the performance of the Company and the service of the Participant, the Committee may provide, in its sole discretion, for a tandem performance-based or other Award designed to guarantee a minimum value, payable in cash or Stock to the recipient of a Restricted Stock Award, subject to such performance, future service, deferral and other terms and conditions as may be specified by the Committee. ARTICLE IX - DEFERRED STOCK 9.1 Shares of Deferred Stock together with cash dividend equivalents, if so determined by the Committee, may be issued either alone or in addition to other Awards granted under the Plan in the discretion of the Committee. The Committee shall determine the individuals to whom, and the time or times at which, such Awards will be made, the number of shares to be awarded, the price, if any, to be paid by the recipient of a Deferred Stock Award, the time or times within which such Awards may be subject to forfeiture, and all other conditions of the Awards. The Committee may condition Awards of Deferred Stock upon the attainment of specified performance goals or such other factors or criteria as the Committee may determine. 9.2 Deferred Stock Awards shall be subject to the following terms and conditions: (a) Subject to the provisions of this Plan and the applicable Award Agreement, Deferred Stock Awards may not be sold, transferred, pledged, assigned or otherwise encumbered during the period specified by the Committee for purposes of such Award (the "Deferral Period"). At the expiration of the Deferral Period, or the Elective Deferral Period defined in Section 9.3, share certificates shall be delivered to the Participant, or his legal representative, in a number equal to the number of shares of Stock covered by the Deferred Stock Award. Based on service, performance and/or such other factors or criteria as the Committee may determine, the Committee, however, at or after grant, may accelerate the vesting of all or any part of any Deferred Stock Award and/or waive the deferral limitations for all or any part of such Award. (b) Unless otherwise determined by the Committee, amounts equal to any dividends that would have been payable during the Deferral Period with respect to the number of shares of Stock covered by a Deferred Stock Award if such shares of Stock had been outstanding shall be automatically deferred and deemed to be reinvested in additional Deferred Stock, subject to the same deferral limitations as the underlying Award. (c) Except to the extent otherwise provided in this Plan or in the applicable Award Agreement, upon Termination of Employment during the Deferral Period for a given Award, the Deferred Stock covered by such Award shall be forfeited by the Participant; provided, however, the Committee may provide for accelerated vesting in the event of Termination of Employment due to death, Disability or Retirement, or in the event of hardship or other special circumstances as the Committee deems appropriate. (d) The Committee may require that a designated percentage of the total Fair Market Value of the shares of Deferred Stock held by one or more Participants be paid in the form of cash in lieu of the issuance of Stock and that such cash payment be applied to the satisfaction of the federal and state income and employment tax withholding obligations that arise at the time the Deferred Stock becomes free of all restrictions. The designated percentage shall be equal to the minimum income and employment tax withholding rate in effect at the time under applicable federal and state laws. (e) The Committee may provide one or more Participants subject to the mandatory cash payment with an election to receive an additional percentage of the total value of the Deferred Stock in the form of a cash payment in lieu of the issuance of Deferred Stock. The additional percentage shall not exceed the difference between 50% and the designated percentage cash payment. (f) The Committee may impose such further terms and conditions on partial cash payments with respect to Deferred Stock as it deems appropriate, including any restrictions necessary to comply with Section 16(b) of the Act. 9.3 A Participant may elect to further defer receipt of Deferred Stock for a specified period or until a specified event (the "Elective Deferral Period"), subject in each case to the Committee's approval and to such terms as are determined by the Committee. Subject to any exceptions adopted by the Committee, such election must generally be made at least 12 months prior to completion of the Deferral Period for the Deferred Stock Award in question, or for the applicable installment of such an Award. 9.4 Each Award shall be confirmed by, and subject to the terms of, a Deferred Stock Award Agreement. 9.5 In order to better ensure that the Award actually reflects the performance of the Company and the service of the Participant, the Committee may provide, in its sole discretion, for a tandem performance-based or other Award designed to guarantee a minimum value, payable in cash or Stock to the recipient of a Deferred Stock Award, subject to such performance, future service, deferral and other terms and conditions as may be specified by the Committee. ARTICLE X - STOCK AWARDS 10.1 A Stock Award shall be granted only in payment of compensation that has been earned or as compensation to be earned, including without limitation, compensation awarded concurrently with or prior to the grant of the Stock Award. 10.2 For the purposes of this Plan, in determining the value of a Stock Award, all shares of Stock subject to such Stock Award shall be valued at not less than 100% of the Fair Market Value of such shares of Stock on the date such Stock Award is granted, regardless of whether or when such shares of Stock are issued or transferred to the Participant and whether or not such shares of Stock are subject to restrictions which affect their value. 10.3 Shares of Stock subject to a Stock Award may be issued or transferred to the Participant at the time the Stock Award is granted, or at any time subsequent thereto, or in installments from time to time, as the Committee shall determine. If any such issuance or transfer shall not be made to the Participant at the time the Stock Award is granted, the Committee may provide for payment to such Participant, either in cash or shares of Stock, from time to time or at the time or times such shares of Stock shall be issued or transferred to such Participant, of amounts not exceeding the dividends which would have been payable to such Participant in respect of such shares of Stock, as adjusted under Section 3.11, if such shares of Stock had been issued or transferred to such Participant at the time such Stock Award was granted. Any issuance payable in shares of Stock under the terms of a Stock Award, at the discretion of the Committee, may be paid in cash on each date on which delivery of shares of Stock would otherwise have been made, in an amount equal to the Fair Market Value on such date of the shares of Stock which would otherwise have been delivered. 10.4 A Stock Award shall be subject to such terms and conditions, including without limitation, restrictions on the sale or other disposition of the Stock Award or of the shares of Stock issued or transferred pursuant to such Stock Award, as the Committee shall determine; provided, however, that upon the issuance or transfer of shares pursuant to a Stock Award, the Participant, with respect to such shares of Stock, shall be and become a shareholder of the Company fully entitled to receive dividends, to vote to the extent, if any, such shares possess voting rights and to exercise all other rights of a shareholder except to the extent otherwise provided in the Stock Award. Each Stock Award shall be evidenced by a written Award Agreement in such form as the Committee shall determine. ARTICLE XI - PERFORMANCE SHARES 11.1 Awards of Performance Shares may be made to certain Participants as an incentive for the performance of future services that will contribute materially to the successful operation of the Company. Awards of Performance Shares may be made either alone, in addition to or in tandem with other Awards granted under the Plan and/or cash payments made outside of the Plan. 11.2 With respect to Awards of Performance Shares, which may be issued for no consideration or such minimum consideration as is required by applicable law, the Committee shall: (a) determine and designate from time to time those Participants to whom Awards of Performance Shares are to be made; (b) determine the performance period (the "Performance Period") and/or performance objectives (the "Performance Objectives") applicable to such Awards; (c) determine the form of settlement of a Performance Share; and (d) generally determine the terms and conditions of each such Award. At any date, each Performance Share shall have a value equal to the Fair Market Value, determined as set forth in Section 2.15. 11.3 Performance Periods may overlap, and Participants may participate simultaneously with respect to Performance Shares for which different Performance Periods are prescribed. 11.4 The Committee shall determine the Performance Objectives of Awards of Performance Shares. Performance Objectives may vary from Participant to Participant and between Awards and shall be based upon such performance criteria or combination of factors as the Committee may deem appropriate, including for example, but not limited to, minimum earnings per share or return on equity. If during the course of a Performance Period there shall occur significant events which the Committee expects to have a substantial effect on the applicable Performance Objectives during such period, the Committee may revise such Performance Objectives. 11.5 The Committee shall determine for each Participant the number of Performance Shares which shall be paid to the Participant if the applicable Performance Objectives are exceeded or met in whole or in part. 11.6 If a Participant terminates service with the Company during a Performance Period because of death, Disability, Retirement or under other circumstances in which the Committee in its discretion finds that a waiver would be appropriate, that Participant, as determined by the Committee, may be entitled to a payment of Performance Shares at the end of the Performance Period based upon the extent to which the Performance Objectives were satisfied at the end of such period and pro rated for the portion of the Performance Period during which the Participant was employed by the Company; provided, however, the Committee may provide for an earlier payment in settlement of such Performance Shares in such amount and under such terms and conditions as the Committee deems appropriate or desirable. If a Participant terminates service with the Company during a Performance Period for any other reason, then such Participant shall not be entitled to any payment with respect to that Performance Period unless the Committee shall otherwise determine. 11.7 Each Award of a Performance Share shall be paid in whole shares of Stock, or cash, or a combination of Stock and cash as the Committee shall determine, with payment to be made as soon as practicable after the end of the relevant Performance Period. 11.8 The Committee shall have the authority to approve requests by Participants to defer payment of Performance Shares on terms and conditions approved by the Committee and set forth in a written Award Agreement between the Participant and the Company entered into in advance of the time of receipt or constructive receipt of payment by the Participant. ARTICLE XII - OTHER STOCK-BASED AWARDS 12.1 Other awards that are valued in whole or in part by reference to, or are otherwise based on, Stock ("Other Stock-Based Awards"), including without limitation, convertible preferred stock, convertible debentures, exchangeable securities, phantom stock and Stock awards or options valued by reference to book value or performance, may be granted either alone or in addition to or in tandem with Stock Options, Stock Rights, Restricted Stock, Deferred Stock or Stock Awards granted under the Plan and/or cash awards made outside of the Plan. Subject to the provisions of the Plan, the Committee shall have authority to determine the Eligible Participants to whom and the time or times at which such Awards shall be made, the number of shares of Stock subject to such Awards, and all other conditions of the Awards. The Committee also may provide for the grant of shares of Stock upon the completion of a specified Performance Period. The provisions of Other Stock-Based Awards need not be the same with respect to each recipient. 12.2 Other Stock-Based Awards made pursuant to this Article XII shall be subject to the following terms and conditions: (a) Subject to the provisions of this Plan and the Award Agreement, shares of Stock subject to Awards made under this Article XII may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses. (b) Subject to the provisions of this Plan and the Award Agreement and unless otherwise determined by the Committee at the time of the Award, the recipient of an Award under this Article XII shall be entitled to receive, currently or on a deferred basis, interest or dividends or interest or dividend equivalents with respect to the number of shares covered by the Award, as determined at the time of the Award by the Committee, in its sole discretion, and the Committee may provide that such amounts, if any, shall be deemed to have been reinvested in additional Stock or otherwise reinvested. (c) Any Award under this Article XII and any Stock covered by any such Award shall vest or be forfeited to the extent so provided in the Award Agreement, as determined by the Committee, in its sole discretion. (d) Upon the Participant's Retirement, Disability or death, or in cases of special circumstances, the Committee may, in its sole discretion, waive in whole or in part any or all of the remaining limitations imposed hereunder, if any, with respect to any or all of an Award under this Article XII. (e) Each Award under this Article XII shall be confirmed by, and subject to the terms of, an Award Agreement. (f) Stock, including securities convertible into Stock, issued on a bonus basis under this Article XII may be issued for no cash consideration. 12.3 Other Stock-Based Awards may include a phantom stock Award, which is subject to the following terms and conditions: (a) The Committee shall select the Eligible Participants who may receive phantom stock Awards. The Eligible Participant shall be awarded a phantom stock unit, which shall be the equivalent to a share of Stock. (b) Under an Award of phantom stock, payment shall be made on the dates or dates as specified by the Committee or as stated in the Award Agreement and phantom stock Awards may be settled in cash, Stock, or some combination thereof. (c) The Committee shall determine such other terms and conditions of each Award as it deems necessary in its sole discretion. ARTICLE XIII - ACCELERATION EVENTS 13.1 For the purposes of the Plan, an Acceleration Event shall occur in the event of a "Potential Change in Control," or "Change in Control" or a "Board-Approved Change in Control", as those terms are defined below. 13.2 A "Change in Control" shall be deemed to have occurred if: (a) Any "Person" as defined in Section 3(a)(9) of the Act, including a "group" (as that term is used in Sections 13(d)(3) and 14(d)(2) of the Act), but excluding the Company and any employee benefit plan sponsored or maintained by the Company, including any trustee of such plan acting as trustee, who: (i) makes a tender or exchange offer for any shares of the Company's Stock (as defined below) pursuant to which any shares of the Company's Stock are purchased (an "Offer"); or (ii) together with its "affiliates" and "associates" (as those terms are defined in Rule 12b-2 under the Act) becomes the "Beneficial Owner" (within the meaning of Rule 13d-3 under the Act) of at least 20% of the Company's Stock (an "Acquisition"); (b) The shareholders of the Company approve a definitive agreement or plan to merge or consolidate the Company with or into another corporation, to sell or otherwise dispose of all or substantially all of its assets, or to liquidate the Company (individually, a "Transaction"); or (c) When, during any period of 24 consecutive months during the existence of the Plan, the individuals who, at the beginning of such period, constitute the Board (the "Incumbent Directors") cease for any reason other than death to constitute at least a majority thereof; provided, however, that a director who was not a director at the beginning of such 24 month period shall be deemed to have satisfied such 24 month requirement, and be an Incumbent Director, if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually, because they were directors at the beginning of such 24 month period, or by prior operation of this Section 13.2(c). 13.3 A "Board-Approved Change in Control" shall be deemed to have occurred if the Offer, Acquisition or Transaction, as the case may be, is approved by a majority of the Directors serving as members of the Board at the time of the Potential Change in Control or Change in Control. 13.4 A "Potential Change in Control" means the happening of any one of the following: (a) The approval by shareholders of an agreement by the Company, the consummation of which would result in a Change in Control of the Company, as defined in Section 13.2; or (b) The acquisition of Beneficial Ownership, directly or indirectly, by any entity, person or group, other than the Company or any Company employee benefit plan, including any trustee of such plan acting as such trustee, of securities of the Company representing five percent or more of the combined voting power of the Company's outstanding securities and the adoption by the Board of a resolution to the effect that a Potential Change in Control of the Company has occurred for the purposes of this Plan. 13.5 Upon the occurrence of an Acceleration Event, subject to the approval of the Committee if the Acceleration Event results from a Board-Approved Change in Control, all then outstanding Performance Shares with respect to which the applicable Performance Period has not been completed shall be paid as soon as practicable as follows: (a) all Performance Objectives applicable to the Award of Performance Shares shall be deemed to have been satisfied to the extent necessary to result in payment of 100% of the Performance Shares covered by the Award; and (b) the applicable Performance Period shall be deemed to have ended on the date of the Acceleration Event; (c) the payment to the Participant shall be the amount determined either by the Committee, in its sole discretion, or in the manner stated in the Award Agreement. This amount shall then be multiplied by a fraction, the numerator of which is the number of full calendar months of the applicable Performance Period that have elapsed prior to the date of the Acceleration Event, and the denominator of which is the total number of months in the original Performance Period; and (d) upon the making of any such payment, the Award Agreement as to which it relates shall be deemed canceled and of no further force and effect. 13.6 Upon the occurrence of an Acceleration Event, subject to the approval of the Committee if the Acceleration Event results from a Board-Approved Change in Control, the Committee in its discretion may declare any or all then outstanding Stock Options, and any or all related Stock Rights outstanding for at least six months, not previously exercisable and vested as immediately exercisable and fully vested, in whole or in part. 13.7 Upon the occurrence of an Acceleration Event, subject to the approval of the Committee if the Acceleration Event results from a Board-Approved Change in Control, the Committee in its discretion, may declare the restrictions applicable to Awards of Restricted Stock, Deferred Stock or Other Stock-Based Awards to have lapsed, in which case the Company shall remove all restrictive legends and stop-transfer orders applicable to the certificates for such shares of Stock, and deliver such certificates to the Participants in whose names they are registered. 13.8 The value of all outstanding Stock Options, Stock Rights, Restricted Stock, Deferred Stock, Performance Shares, Stock Awards and Other Stock-Based Awards, in each case to the extent vested, shall, unless otherwise determined by the Committee in its sole discretion at or after grant but prior to any Change in Control, be cashed out on the basis of the "Change in Control Price," as defined in Section 13.9 as of the date such Change in Control or such Potential Change in Control is determined to have occurred or such other date as the Committee may determine prior to the Change in Control. 13.9 For purposes of Section 13.8, "Change in Control Price" means the highest price per share of Stock paid in any transaction reported on the exchange on which the Stock is then traded, or paid or offered in any bona fide transaction related to a Potential or actual Change in Control of the Company at any time during the 60 day period immediately preceding the occurrence of the Change in Control, or, where applicable, the occurrence of the Potential Change in Control event, in each case as determined by the Committee except that, in the case of Incentive Stock Options and Stock Appreciation Rights, or Limited Stock Appreciation Rights, relating to such Incentive Stock Options, such price shall be based only on transactions reported for the date on which the optionee exercises such Stock Appreciation Rights, or Limited Stock Appreciation Rights. ARTICLE XIV - AMENDMENT AND TERMINATION 14.1 The Board, upon recommendation of the Committee, or otherwise, at any time and from time to time, may amend or terminate the Plan. To the extent required by Rule 16b-3 under the Act, no amendment, without approval by the Company's shareholders, shall: (a) alter the group of persons eligible to participate in the Plan; (b) except as provided in Section 3.6, increase the maximum number of shares of Stock or Stock Options or Stock Rights which are available for Awards under the Plan; (c) extend the period during which Incentive Stock Option Awards may be granted beyond September 15, 2003; (d) limit or restrict the powers of the Committee with respect to the administration of this Plan; (e) change the definition of an Eligible Participant for the purpose of an Incentive Stock Option or increase the limit or the value of shares of Stock for which an Eligible Participant may be granted an Incentive Stock Option; (f) materially increase the benefits accruing to Participants under this Plan; (g) materially modify the requirements as to eligibility for participation in this Plan; or (h) change any of the provisions of this Article XIV. 14.2 No amendment to or discontinuance of this Plan or any provision thereof by the Board or the shareholders of the Company shall, without the written consent of the Participant, adversely affect, as shall be determined by the Committee, any Award theretofore granted to such Participant under this Plan; provided, however, the Committee retains the right and power to: (a) annul any Award if the Participant is terminated for cause as determined by the Committee; (b) provide for the forfeiture of shares of Stock or other gain under an Award as determined by the Committee for competing against the Company; and (c) convert any outstanding Incentive Stock Option to a Nonqualified Stock Option. 14.3 If an Acceleration Event has occurred, no amendment or termination shall impair the rights of any person with respect to an outstanding Award as provided in Article XIII. ARTICLE XV - MISCELLANEOUS PROVISIONS 15.1 Nothing in the Plan or any Award granted hereunder shall confer upon any Participant any right to continue in the employ of the Company, or to serve as a director thereof, or interfere in any way with the right of the Company to terminate his or her employment at any time. Unless specifically provided otherwise, no Award granted under the Plan shall be deemed salary or compensation for the purpose of computing benefits under any employee benefit plan or other arrangement of the Company for the benefit of its employees unless the Company shall determine otherwise. No Participant shall have any claim to an Award until it is actually granted under the Plan. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall, except as otherwise provided by the Committee, be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts, except as provided in Article VIII with respect to Restricted Stock and except as otherwise provided by the Committee. 15.2 The Company may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of any taxes which the Company is required by any law or regulation of any governmental authority, whether federal, state or local, domestic or foreign, to withhold in connection with any Stock Option or the exercise thereof, any Stock Right or the exercise thereof, or in connection with any other type of equity-based compensation provided hereunder or the exercise thereof, including, but not limited to, the withholding of payment of all or any portion of such Award or another Award under this Plan until the Participant reimburses the Company for the amount the Company is required to withhold with respect to such taxes, or canceling any portion of such Award or another Award under this Plan in an amount sufficient to reimburse itself for the amount it is required to so withhold, or selling any property contingently credited by the Company for the purpose of paying such Award or another Award under this Plan, in order to withhold or reimburse itself for the amount it is required to so withhold. 15.3 The Plan and the grant of Awards shall be subject to all applicable federal and state laws, rules, and regulations and to such approvals by any United States government or regulatory agency as may be required. Any provision herein relating to compliance with Rule 16b-3 under the Act shall not be applicable with respect to participation in the Plan by Participants who are not subject to Section 16(b) of the Act. 15.4 The terms of the Plan shall be binding upon the Company, and its successors and assigns. 15.5 Neither a Stock Option, Stock Right, nor any other type of equity-based compensation provided for hereunder, shall be transferable except as provided for herein. Unless otherwise provided by the Committee or in an Award Agreement, transfer restrictions shall only apply to Incentive Stock Options as required in Article IV and to the extent otherwise required by federal or state securities laws. If any Participant makes such a transfer in violation hereof, any obligation of the Company shall forthwith terminate. 15.6 This Plan and all actions taken hereunder shall be governed by the laws of the State of Delaware, except to the extent preempted by the Employee Retirement Income Security Act of 1974, as amended. 15.7 The Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver shares of Stock or payments in lieu of or with respect to Awards hereunder; provided, however, that, unless the Committee otherwise determines with the consent of the affected Participant, the existence of such trusts or other arrangements is consistent with the "unfunded" status of the Plan. 15.8 Each Participant exercising an Award hereunder agrees to give the Committee prompt written notice of any election made by such Participant under Section 83(b) of the Code, or any similar provision thereof. 15.9 If any provision of this Plan or an Award Agreement is or becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or any Award Agreement under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award Agreement, it shall be stricken and the remainder of the Plan or the Award Agreement shall remain in full force and effect. MEDTOX SCIENTIFIC, INC. ATTEST: By: ______________________________ Authorized Officer (Corporate Seal) - ----------------------------- Secretary 300996-00026 456-164050 EX-4.2 3 0003.txt EXHIBIT 4.2 Exhibit 4.2 MEDTOX SCIENTIFIC, INC. QUALIFIED EMPLOYEE STOCK PURCHASE PLAN WHEREAS, MEDTOX Scientific, Inc., a Delaware corporation (the "Company"), adopted the Environmental Diagnostics, Inc. Qualified Employee Stock Purchase Plan (the "Plan") to offer its employees the right to purchase its Common Stock, $0.15 par value per share ("Stock"), on March 13, 1986; WHEREAS, the Plan was approved by the Company's shareholders on September 11, 1986; WHEREAS, pursuant to Section 14 of the Plan, the Board of Directors of the Company may amend or modify the Plan at any time, subject to any required shareholder approval; WHEREAS, the Company desires to amend and restate the Plan and to increase the number of shares authorized under the Plan, subject to and effective upon shareholder approval; NOW, THEREFORE, pursuant to premises and covenants herein contained, the Company does hereby amend and restate the Plan subject to and effective upon shareholder approval which shall read as follows: SECTION 1. EMPLOYEES ENTITLED TO PARTICIPATE. --------------------------------- An individual is eligible to participate in the Plan if (a) he is regularly scheduled to work for more than twenty hours per week and five months per calendar year; (b) he is employed by the Company or any other corporation in which the Company owns or acquires, directly or indirectly, at least 50% of the total combined voting power of all classes of stock, if such corporation has been designed as a participating corporation by the Administration Committee; and (c) he agrees to pay the subscription price by payroll deduction. In accordance with the requirements of Section 423 of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), all employees granted subscriptions under the Plan shall have the same rights and privileges hereunder, subject to the provisions of federal and state securities laws that may effect transactions made pursuant to the Plan by certain employees who may be deemed to be insiders of the Company. It is intended that the Plan allow for broad-based employee participation and not discriminate in favor of highly compensated employees. Accordingly, the Plan shall be administered in compliance with Section 410(b) of the Internal Revenue Code with regard to the broad-based participation requirement and Section 401(a)(4) of the Internal Revenue Code with regard to the nondiscrimination requirement. Accordingly, the Plan shall be interpreted in accordance with such provisions as now written or as hereafter amended. SECTION 2. SUBSCRIPTION PRICE. ------------------ The subscription price hereunder shall be the lesser of (a) 85% of the fair market value of the Stock on the day the executed subscription form is received by the Company, or (b) 85% of the fair market value of the Stock on the day the right to purchase is exercised, as provided in Section 7(A) below. For purposes of this Plan, the "fair market value" of the Stock shall be determined as set forth below. If the Stock is traded on a national securities exchange, then the "fair market value" on a date shall be the closing price of the Stock on such exchange based on the sale of a minimum of 100 shares of Stock; if less than 100 shares are traded on such date, then the fair market value shall be the average of the high bid and low asked prices on such date; or if no prices are quoted on such date, then the fair market value shall be the closing price of the Stock on such exchange based on the sale of a minimum of 100 shares of Stock on the last prior date on which at least 100 shares were sold. If the Stock is not traded on a national securities exchange, but is quoted in the over-the-counter market as reported on the National Association of Securities Dealers Automated Quotation ("NASDAQ") System on a date, then the "fair market value" of the shares on such date shall be the last sale price reported by the NASDAQ System or the NASDAQ National Market System, as applicable, based on the sale of a minimum of 100 shares of Stock; if less than 100 shares are traded on such date, then the fair market value shall be the average of the high bid and low asked prices on such date as reported by NASDAQ System or the NASDAQ National Market System, as applicable; or if no prices are quoted on such date, then the fair market value shall be the last sale price of the Stock as reported by NASDAQ based on the sale of a minimum of 100 shares of Stock on the last prior date on which at least 100 shares were sold. If the Stock is not traded on a national securities exchange or reported by NASDAQ, if any broker-dealer makes a market for the Stock, then the "fair market value" of the shares on a date shall be the average of the highest and lowest quoted selling prices of the Stock on that date, said average to be based on the sale of a minimum of 100 shares of Stock; if less than 100 shares are traded on such date, then the fair market value of the shares on such date shall be the average of the high bid and low asked prices on such date in such market; or if no prices are quoted on such date, then the fair market value of the shares on such date shall be the average of the highest and lowest quoted selling prices of the Stock based on the sale of a minimum of 100 shares of Stock on the last prior date on which at least 100 shares were sold. If the Stock is not traded in any established market and no broker-dealer makes a market in the Stock, then the "fair market value" shall be the fair value thereof as determined in good faith by the Administration Committee pursuant to any appropriate method selected by the Committee. SECTION 3. NUMBER OF SHARES AUTHORIZED. --------------------------- The total number of shares of Stock authorized to be issued hereunder is 150,000 shares, which shall be newly issued shares. Additional shares may be authorized to be issued hereunder from time to time by the Board of Directors of the Company, provided that the stockholders of the Company approve such increase within twelve (12) months before or after such action by the Board of Directors. SECTION 4. SUBSCRIPTIONS. ------------- A. How to Subscribe. ---------------- Any eligible employee may subscribe hereunder by executing and mailing or delivering to the Secretary of the Company or any representative designated by him a subscription form approved by the Administration Committee. The receipt of such subscription form by the Company shall constitute the grant to the employee (and the acceptance by him) of a right to purchase the number of shares indicated on the form at the subscription price and subject to the terms and conditions contained herein, except that no such right shall be deemed to have been granted (i) during any period in which the offering of Stock under this Plan does not comply with the requirements of the Securities Act of 1933, as amended, or any applicable state securities law, or (ii) if subscriptions have been issued for the total number of shares authorized to be issued or transferred hereunder. B. Number of Shares for Which Employee May Subscribe. ------------------------------------------------- The maximum number of shares which an eligible employee may subscribe for under the Plan shall be subject to such limitations from time to time established by the Administration Committee. The maximum number shall apply equally to all eligible participants. An employee may subscribe for less than the maximum number of shares and may successively subscribe for additional shares until he has subscribed for the maximum number of shares permitted; provided, however, that the receipt of each new subscription by the Company shall be considered to be a separate grant of a right to purchase the number of shares indicated on the subscription form for all purposes hereunder and shall be subject to the waiting periods provided below. C. Waiting Period. -------------- An employee who has subscribed for less than the maximum number of shares may not subscribe for additional shares unless (i) at least six (6) months have elapsed since the date of receipt of his last prior subscription form, (ii) such employee has withdrawn a prior subscription and at least three (3) months have elapsed since the date of his last withdrawal, or (iii) all prior subscriptions by the employee to acquire shares under the Plan have been paid in full. D. Limitations on Subscriptions. ---------------------------- Notwithstanding any provision herein, an employee shall not be entitled to subscribe hereunder if, immediately after receipt of the subscription form by the Company, such employee owns stock possessing 5% or more of the total combined voting power or value of all classes of stock of his employer corporation or its parent or any subsidiary corporation. For purposes of the preceding sentence, the rules of Section 424(d) of the Internal Revenue Code shall apply in determining the stock ownership of an employee, and stock which the employee may purchase under outstanding subscriptions hereunder or under any other stock option plan shall be treated as stock owned by the employee. Notwithstanding any provision herein, if the rights of an employee to purchase stock under all stock purchase plans (to which Section 423 of the Internal Revenue Code is applicable) of his employer corporation and its parent and subsidiary corporations accrue (within the meaning of and subject to the rules contained in Section 423(b)(8) of the Internal Revenue Code) at a rate which exceeds $25,000 of fair market value of such stock (determined at the time the subscription form is received by the Company) for any calendar year in which such subscription is outstanding at any time, such employee's subscription shall be reduced, in the manner prescribed by the Administration Committee, so that the employee's rights do not accrue at a rate which exceeds $25,000 of fair market value of such stock for such calendar year as described above. SECTION 5. PAYMENT OF SUBSCRIPTION PRICE. ----------------------------- A. Payroll Deductions. ------------------ Payment of the subscription price under the Plan shall be made by payroll deductions pursuant to such procedures and limitations as established from time to time by the Administration Committee. Beginning on the date specified in the subscription form, or as soon as practicable for the Company thereafter, but in no event later than two months after the date specified, deductions for payment of the subscription prices shall be made from each regular payroll check for a participating employee until all of his subscriptions have been paid or withdrawn, but in no event may the payment period be structured so that the date of exercise of the purchase rights as provided in Section 7(A) hereof exceeds twenty-seven (27) months from the date of grant of such purchase rights. If local law prohibits payroll deductions for such purpose, any alternative method approved by the Administration Committee may be substituted. All payments shall be forwarded monthly to the Treasurer of the Company. B. Prepayment of Subscription Price. -------------------------------- No prepayment of subscription prices may be made except as provided in Sections 9 and 14 below. SECTION 6. SUBSCRIPTION ACCOUNTS. --------------------- A subscription account shall be created for each participating employee and all amounts withheld from his compensation shall be credited to such account. Amounts credited to such accounts shall be available for the general use of the Company. The Company will provide a statement at least once each year of the remaining balance in each participating employee's account. SECTION 7. ISSUANCE OF STOCK. ----------------- A. Completion of Payment for 100 Share Unit. ---------------------------------------- When the subscription account of any employee contains an amount equal to at least 100 shares or any lesser number of shares under subscription (on a first in first out basis) multiplied by 85% of fair market value of the Stock on the day the executed subscription form is received by the Company, the employee shall be deemed to have exercised the right to purchase 100 or such lesser number of shares. Thereafter the employee's account shall be debited for the subscription price (as defined in Section 2) of such shares, and the Company shall issue or cause to be transferred to the employee a certificate for such shares within a reasonable time. If the fair market value on the day of exercise is below that on the day the executed subscription was received by the Company, the employee's subscription account shall be charged for only an amount equal to 85% of the fair market value on such exercise date of the shares then acquired and the balance in the account shall be held to pay for additional shares under subscription, if any, or returned if no additional shares are then under subscription. The number of shares purchased shall in every case be determined solely by reference to the fair market value on the date the executed subscription form is received by the Company, and may not be increased by reason of any subsequent decline in fair market value. B. Rights as Stockholders. ---------------------- Nothing in this Plan shall confer upon any participating employee any rights as a stockholder except the right to be issued a stock certificate for fully-paid shares of Stock as provided herein, and until such issuance, the participating employee shall not be deemed the owner of any such shares for any purpose. C. Extension of Time for Delivery. ------------------------------ The time of issuance and delivery of shares may be postponed for such period as may be required to comply with registration requirements under the Securities Act of 1933, as amended, listing requirements of any stock exchange upon which Stock may be listed, if any, and the requirements under any other law or regulation applicable to the issuance or transfer of such shares. SECTION 8. WITHDRAWAL OF SUBSCRIPTIONS. --------------------------- Any employee may withdraw any subscription upon filing a notice thereof with the person designated by and on the form approved by the Administration Committee. Said subscription shall thereupon be canceled as to all shares with respect to which the right to purchase has not been exercised as provided in Section 7(A) above. If the employee withdraws all his subscriptions hereunder, he will be entitled to receive the balance of his account within thirty (30) days after the receipt of such notice. If an employee withdraws a subscription, he shall not be entitled to subscribe for additional shares for three (3) months after the last such withdrawal. SECTION 9. TERMINATION OF EMPLOYMENT. ------------------------- A. Death, Permanent Disability and Retirement. ------------------------------------------ If a participating employee's services are terminated before his subscription is fully paid, because of death, permanent disability or retirement at age 55 or thereafter, the employee (or, in the case of death, his estate) may, at his option, within three (3) months thereafter in the case of such permanent disability or retirement or within twelve months thereafter in the case of death, prepay his subscription in whole or in part, or receive the balance of his subscription account in satisfaction of all rights under the Plan. B. Other Termination of Service. ---------------------------- If a participating employee's services are terminated before his subscription is fully paid, for any reason other than death, permanent disability or retirement at age 55 or thereafter, the employee will be entitled to receive only the balance of his subscription account. Such payment shall constitute satisfaction of all his rights under this Plan, and all remaining subscriptions hereunder shall be deemed withdrawn. C. Temporary Absence. ----------------- Any employee whose name is taken off the regular payroll by reason of leave of absence, temporary layoff, or through temporary disability, may at his option (i) withdraw his subscriptions hereunder and receive the amount to which he would be entitled if his services were terminated for any reason as provided in subparagraph (B) hereof, or (ii) make regular periodic payments to the Treasurer of the Company in an amount equal to the sum which would have been withheld had he continued on the regular payroll. SECTION 10. RIGHTS NOT TRANSFERABLE. ----------------------- Neither the right of an employee to purchase shares hereunder, nor his account balance, shall be transferable by the employee (by way of assignment, pledge, or otherwise) except by will or the laws of descent and distribution, and neither such right nor such balance shall be liable for or subject to the debts or liabilities of such employee. If any action is taken by the employee to so transfer such right or balance, such action shall be deemed to constitute a withdrawal of the subscription involved. SECTION 11. ADMINISTRATION COMMITTEE. ------------------------ This Plan shall be administered by an Administration Committee consisting of two or more non-employee directors of the Company, who shall be appointed by its Board of Directors. The Committee, or a majority thereof, shall have the authority to interpret this Plan, to prescribe rules and regulations thereunder, and to make all other determinations necessary or advisable for the Plan's administration. The members of the Committee shall serve until their successors have been appointed by the Board of Directors. SECTION 12. ADJUSTMENTS. ----------- In the event of a dividend payable in Common Stock of the Company or a subdivision or combination of the Common Stock of the Company, the number of shares offered under this Plan, and the number of shares offered by options outstanding under the Plan, shall be increased or decreased proportionately, as the case may be, without change in the aggregate subscription price for such shares. In case the Company is reorganized or merged or consolidated with another corporation, appropriate provisions shall be made for the protection and continuation of any outstanding subscriptions under the Plan by the substitution on an equitable basis determined by the Board of Directors of appropriate stock or other securities of the reorganized, merged or consolidated corporation which will be issuable in respect of the Stock. SECTION 13. TAX ON ADDITIONAL COMPENSATION. ------------------------------ In the event that the issuance or disposition of any Stock subscribed hereunder results in additional compensation to an employee under federal, state or foreign laws which require that the tax thereon be withheld, the Company and its subsidiaries will deduct from the employee's compensation the amount required for such withholding. Until such tax is withheld or otherwise paid by the employee to the Company, Stock paid for but unissued or undelivered hereunder will be held by the Company in issued form as security for the amount required to be withheld. SECTION 14. TERM OF PLAN. ------------ This amended and restated Plan is subject to and shall become effective upon approval by the stockholders of the Company. The Board of Directors may terminate the Plan at any time, and may amend the Plan from time to time, subject to any approval of the stockholders of the Company that may be required in order that the Plan shall continue to qualify under Section 423 of the Internal Revenue Code. Upon termination of the Plan, participating employees shall, in the discretion of the Board of Directors, either be permitted to complete unpaid subscriptions in a manner determined by the Administration Committee or shall be entitled to receive the balance in their subscription account in satisfaction of all rights under the Plan. SECTION 15. INTERPRETATION OF THE PLAN. -------------------------- It is intended that this Plan shall meet and comply with all the requirements of Section 423 of the Internal Revenue Code, and related Sections. The Plan and the terms used herein shall be interpreted by the Administration Committee in such manner as to carry out such intention, and in particular, the grant of a right to purchase shares hereunder shall be deemed to constitute the grant of an option under Section 423 of the Internal Revenue Code, and the exercise of the right to purchase hereunder shall be deemed to constitute the exercise of an option under such Section. IN WITNESS WHEREOF, the Company has caused these instruments to be executed by its duly authorized officers and its corporate seal to be hereunto affixed, all as of the day and year first above written. MEDTOX SCIENTIFIC, INC. ATTEST: ___________________________ By:________________________________ Secretary President (Corporate Seal) EX-4.3 4 0004.txt EXHIBIT 4.3 Exhibit 4.3 MEDTOX SCIENTIFIC, INC. AMENDED AND RESTATED STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS effective as of January 1, 1994 ARTICLE I Purpose This Stock Option Plan for Non-Employee Directors (the "Plan") is designed to advance the interest of MEDTOX Scientific, Inc. (the "Company") and its stockholders by providing an incentive to members of the Board of Directors of the Company (the "Board") who are not full-time or part-time employees of the Company or its parent or subsidiaries ("Non-Employee Directors") to continue in the service of the Company and by creating a direct interest of such Non-Employee Directors in the future success of the Company's operations by granting to such persons options to acquire shares of the common stock of the Company, par value $.15 per share (the "Common Stock"). As used herein, "parent" shall mean a "parent corporation" as defined in Section 424(e) of the Internal Revenue Code of 1986, as amended (the "Code") and "subsidiary" shall mean a "subsidiary corporation" as defined in Section 424(f) of the Code. ARTICLE II Administration The Plan shall be administrated by a Stock Option Committee of the Company (the "Committee") appointed by the Board from among its members which shall consist of not less than two Non-Employee Directors who are "disinterested persons" within the meaning of Rule 16b-3(c)(2)(i) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Committee shall have authority to adopt such rules and regulations and to make such determinations as are not inconsistent with the Plan and are necessary or desirable for its implementation and administration. All decisions, determinations and interpretations of the Committee shall be final and binding on all optionees. The Committee shall hold its meetings at such times and places as it may determine, with a majority of the Committee constituting a quorum. Any action which the Committee has the power to take at a meeting may be taken by the Committee without a meeting if all the members of the Committee give their consent to such action in writing. ARTICLE III Stock The shares to be optioned under the Plan ("Option Shares") shall be shares of authorized but unissued Common Stock of the Company or previously issued shares of Common Stock reacquired by the Company. The total number of shares of Common Stock subject to awards of nonqualified stock options ("Options") granted under the Plan shall not exceed in the aggregate 300,000, except as such number of shares shall be adjusted in accordance with the provisions of Articles XI and XII hereof. The Options granted under the plan are not intended to qualify as incentive stock options under section 422 of the Code. If an Option should expire or become unexercisable for any reason without having been exercised in full, the unpurchased Option Shares which were subject thereto shall, unless the Plan shall have been terminated, become available for the grant of other Options under the Plan. ARTICLE IV Eligibility of Participants Each Non-Employee Director shall be eligible to receive Options in accordance with the provisions of the Plan. ARTICLE V Initial Awards Upon the initial election or appointment of a Non-Employee Director (a "New Non-Employee Director"), the Committee may in its discretion grant such New Non-Employee Director an Option (the "Initial Award") to acquire any number of shares of Common Stock of the Company at such price and on such terms as determined by the Committee in its sole discretion; provided, however, that no Option so granted may be exercised more than ten years after the date of grant. Notwithstanding any language in the Plan to the contrary, the provisions of Articles VI an through VIII of the Plan shall not apply to an Initial Award. Any New Non-Employee Director receiving an Initial Award shall be ineligible to serve on the Committee for a period of at least one year after the date of grant (or such shorter period as may be permitted by rule 16b-3 under the exchange Act). ARTICLE VI Annual Awards On January 1st of each year commencing on January 1, 1994, each Non-Employee Director shall be granted an option (the "Annual Award") for a number of shares of Common Stock determined by dividing $10,000 by the Option Price determined in accordance with Article VII hereof, subject to adjustment as provided in Articles XI and XII below. Notwithstanding the foregoing, any Non-Employee Director may take an irrevocable election not to receive an Annual Award provided that the election is contained in a written notice provided to the Committee not later than June 30th of the year preceding the date of the Annual Award to which the election pertains. In the event that the number of shares available for grants under the Plan is insufficient to grant the number of Options determined as provided above to each Non-Employee Director electing to receive an Annual Award, Options for the remaining number of shares of Common Stock available for grant under the Plan shall be granted in equal amounts to each Non-Employee Director who elected to receive the Annual Award. Upon the grant of each Annual Award, the Company and the Non-Employee Director shall enter into an option agreement which shall specify the date of the grant and the Option Price and shall include or incorporate by reference the substance of all the provision set forth in Articles VII through X below and such other provisions consistent with the plan as the Committee may determine. The Committee shall have no discretion to select the Non-Employee Directors who will receive Annual Awards or to determine the number of Option Shares covered by such Annual Award, the Option Price per Option Share, the circumstances under which an Annual Award may be granted, or the period within which Options granted pursuant to Annual Awards may be exercised or to alter any other terms or conditions in the Plan with respect to Annual Awards to Non-Employee Directors, except for administering the Plan subject to the express provisions of the Plan. ARTICLE VII Option Price The per share Option exercise price (the "Option Price") for all Options granted pursuant to Annual Awards under the Plan shall be the fair market value of the shares of Common Stock of the Company on the date the Annual Award is granted. If the Common Stock is listed for trading on any national securities exchange, then the "fair market value" shall be the closing sales price of the Common Stock on such exchange on the date of grant. If the Common Stock is not listed for trading on a national securities exchange, but is quoted on the National Association of Securities Dealers Automated Quotation System ("NASDAQ"), then the "fair market value" shall be the average of the closing bid and asked prices quoted on NASDAQ on the date of grant. If the Common Stock is neither listed on any national securities exchange nor quoted on NASDAQ, but is traded in the over-the-counter market, then the "fair market value" shall be the average closing bid and asked prices on the date of grant provided by any market maker in the Common Stock selected by the Company to provide quotations for this purpose. If there is no market maker in the Common Stock, the fair market value shall be the last sales price of the Common Stock on the date of grant. In the event on any date of grant of options there is no sale of at least 100 shares of Common Stock, the sale price or the bid and asked prices on the last day on which there was a sale of at least 100 shares of Common Stock shall be used to determine "fair market value." ARTICLE VIII Exercise and Term of Options An Option granted pursuant to an Annual Award shall not be exercisable unless: (a) the Option has vested as provided below; (b) the person exercising the Option has been at all times during the period, beginning with the date of grant of the Option and ending on the date of such exercise, a Non-Employee Director, except that (i) in the event an optionee ceases to be a director for any reason, his Option granted pursuant to an Annual Award shall terminate and may not be exercised after the expiration of thirty (30) days after such termination, and (ii) if an optionee shall die holding an Option granted pursuant to an Annual Award that has not been fully exercised, his executors, administrators, heirs, or distributees, as the case may be, may, at any time within three (3) months after the date of such death, exercise the Option with respect to any Option Shares as to which the descendent could have exercised the Option at the time of his death; (c) payment in full is made for the shares of Common Stock being acquired thereunder at the time of exercise in United States dollars by cash or check; and (d) payment in full is made for any withholding obligation as provided in Article IX below. Any other provision of the Plan notwithstanding, no Option granted pursuant to an Annual Award shall be exercised after the date ten years from the date of grant of such Annual Award, subject to earlier termination as provided above. Except for Options granted pursuant to Annual Awards made prior to October 28, 1992, Options granted pursuant to Annual Awards under the Plan shall become vested in four (4) equal quarterly installments on the last day of March, June, September and December of the year during which the Annual Award is granted if, on such dates, the Non-Employee Director remains a member of the Board. If, prior to any such vesting date, the Non-Employee Director ceases to be a member of the Board, the Option granted pursuant to the Annual Award which would have vested on that date shall terminate on the date the Non-Employee Director ceases to be a member of the Board. ARTICLE IX Payment of Shares Payment of the Option Price for Option Shares shall be made in full upon exercise of the Option. Any rights of the Non-Employee Director to exercise an Option shall be conditioned upon the Non-Employee Director forwarding to the Company, in addition to the Option Price of the Option Shares, cash payment of an amount equal to the amount of the Company is required by law or regulation of any governmental authority, whether federal, state, or local, domestic or foreign, to withhold in connection with such exercise of the Option, as determined by the Committee in its discretion. The amount of such payment shall be communicated to the Non-Employee Director as soon as practicable following receipt by the Company of the Non-Employee Director's notice of exercise. ARTICLE X Non-Transferability of Option No Option under the Plan shall be transferable except by will or the laws of descent and distribution. During the lifetime of the optionee, an Option shall be exercisable only by the optionee. ARTICLE XI Adjustment for Changes in Capitalization If the number of Shares of the Company as a whole are increased, decreased, changed into, or exchanged for a different number or kind of shares or securities of the Company, whether through merger, consolidation, reorganization, recapitalization, reclassification, stock divided, stock split, combination of shares, exchange of shares, change in corporate structure or the like, an appropriate and proportionate adjustment shall be made in the number and kind of shares subject to this Plan, and in the number, kind, and per share exercise price of shares subject to unexercised Options or portions thereof granted prior to any such change. Any such adjustment in an outstanding Option, however, shall be made without a change in the total price applicable to the unexercised portion of the Option but with a corresponding adjustment in the price for each share covered by the Option. No fractional shares of stock shall be issued under the Plan on of account of any adjustment specified above. ARTICLE XII Rights Upon Reorganization, Merger, or Consolidation Upon a reorganization, merger, or consolidation in which the Company is not the surviving corporation, or upon the sale of all or substantially all of the property of the Company to another corporation, provision shall be made in connection with such transaction for the assumption of the Plan and the Options theretofore granted by the successor corporation. Provision may, alternatively, be made for the substitution for such Options of new options of the successor corporation or a Parent or Subsidiary thereof. In any such case, appropriate adjustment as to the number and kind of shares and the per share exercise prices shall be made. No fractional shares of stock shall be issued under the Plan on account of any adjustment specified above. ARTICLE XIII No Obligation to Exercise Option The granting of an Option shall impose no obligation on the recipient to exercise such Option. ARTICLE XIV Right as a Stockholder An optionee or a permitted transferee of an Option shall have no right as stockholder with respect to any Option Shares covered by his Option until such person shall have become the holder of such Option Shares, and such person shall not be entitled to any dividends or distributions of other rights in respect of such Option Shares for which the record date is prior to the date on which such person shall have become the holder of record thereof. ARTICLE XV Regulatory Matters Every Option under the Plan is granted upon the express condition that the inability of the Company to comply with, or any delay in complying with, any laws, rules or regulations governing the issuance of Option Shares necessary to satisfy such Option (including but not limited to complying with the securities Act of 1933, as amended (the "Act") and all rules and regulations promulgated thereunder), the fulfillment of which condition is deemed necessary by counsel for the Company to the lawful issuance or transfer of any such shares, shall relieve the Company of any liability for the non-issuance or non-transfer, or any delay in the issuance or transfer of such shares. Further, it is the intention of the Company that the Plan comply in all respects with Rule 16b-3 of the Exchange Act ("Rule 16b-3"). If any Plan provisions is found not to be in compliance with Rule 16b-3, the provision shall be deemed null and void. ARTICLE XVI Amendments or Discontinuance of the Plan The Plan may be amended at any time and from time to time by the Board as the Board shall deem advisable; provided, however, that except as provided in Articles XI and XII above, the Board may not, without further approval by the stockholders of the Company, increase the maximum numbers of shares of Common Stock as to which Options may be granted under the Plan, reduce the Option Price described in Article VII above, extend the period during which Options may be granted or exercised under the Plan or change the class of persons eligible to receive Options under the Plan. No amendment of the Plan shall materially and adversely affect any right of any Non-Employee Director with respect to any Option theretofore granted without such Non-Employee Director's written consent. Notwithstanding the foregoing, the Plan may not be amended to change the amount, price or timing of the Initial and Annual Awards until at least six months (or such longer or shorter period required by Rule 16b-3) after the date of the last preceding amendment except to comport with changes in the Code, the Employee Retirement Income Security Act, or the rules and regulations promulgated thereunder. ARTICLE XVII Miscellaneous Provisions Except as expressly provided for in the Plan, no Non-Employee Director or other person shall have any claim or right to be granted an Option under the Plan. It shall be the obligation of the Non-Employee Director (or any beneficiary or person entitled to act under Article VII) to pay the Company, promptly upon its demand, such amount as may be requested by the Company for the purpose of satisfying any liability to withhold federal, state, local, or foreign income or other taxes The expenses of the Plan shall be borne by the Company. ARTICLE XVIII Termination This Plan shall determinate upon the adoption of a resolution of the Board terminating the Plan. No termination of the Plan shall materially and adversely affect any of the rights or obligations of any person, without his consent, under any Option theretofore granted under the Plan except that upon the dissolution or liquidation of the Company, this Plan and the Options issued hereunder shall terminate. ARTICLE XIX Effectiveness The Plan was initially adopted by the stockholders of the Company on October 24, 1989, and amendments to the Plan were approved by the stockholders on October 30, 1991 and October 28, 1992. This amendment and restatement of the Plan shall be effective as of January 1,1994 (the "Effective Date"), subject to approval by the shareholders of the Company within twelve (12) months thereafter. All Options granted under the Plan prior to the Effective Date shall continue to be subject to the provisions of the Plan as in effect on the date of grant. All Options granted under the Plan on or after the Effective Date shall be subject to the provisions of this amendment and restatement of the Plan. EX-5.1 5 0005.txt EXHIBIT 5.1 EXHIBIT 5.1 FREDRIKSON & BYRON, P.A. November 3, 2000 MEDTOX Scientific, Inc. 402 West County Road D St. Paul, MN 55112 Re: MEDTOX Scientific, Inc. Ladies and Gentlemen: This opinion is furnished to you in connection with a registration statement on Form S-8 (the "Registration Statement"), filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, for the registration of 708,464 shares of Common Stock, $0.15 par value (the "Shares"), of MEDTOX Scientific, Inc., a Delaware corporation (the "Company"). We have acted as counsel for the Company and are familiar with the actions taken by the Company in connection with the Company's Restated Equity Compensation Plan, Qualified Employee Stock Purchase Plan and Non-Employee Director Plan (each a "Plan" and together the "Plans"). For purposes of this opinion, we have examined the Plans and such other documents, records, certificates, and other instruments as we have deemed necessary. We have assumed that the exercise or sale price for each share will be not less than the par value and that at the time of exercise or issuance there will be adequate authorized but unissued Common Stock. Based on the foregoing, we are of the opinion that the Shares have been duly authorized and, as and when the Shares are issued and sold and consideration is received therefor by the Company in accordance with the terms of the respective Plans, the Shares will be validly issued, fully paid, and non-assessable. We hereby consent to your filing this opinion as an exhibit to the Registration Statement. It is understood that this opinion is to be used only in connection with the offer and sale of the Shares while the Registration Statement is in effect. Very truly yours, /s/ Fredrikson & Byron, P.A. Fredrikson & Byron, P.A. EX-23.1 6 0006.txt EXHIBIT 23.1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of MEDTOX Scientific, Inc. on Form S-8 of our report dated February 18, 2000 appearing in the Annual Report on Form 10-K of MEDTOX Scientific, Inc. for the year ended December 31, 1999. /s/ Deloitte & Touche LLP Minneapolis, Minnesota November 2, 2000 EX-23.2 7 0007.txt EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8) of MEDTOX Scientific, Inc., for the registration of 708,464 of its common stock of our report dated February 6, 1998, with respect to the consolidated financial statements and financial statement schedule of MEDTOX Scientific, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 1999, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Minneapolis, Minnesota November 1, 2000 -----END PRIVACY-ENHANCED MESSAGE-----