-----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, PJRxdhLr+pssYD2ZotkiTXxvC8VEx0sVAzokr5m9BFD7jJZNTOVXm0vjGXAn7Dv5 Ma81BLaATkR9jTGf4Wp54A== 0000897101-01-500545.txt : 20010827 0000897101-01-500545.hdr.sgml : 20010827 ACCESSION NUMBER: 0000897101-01-500545 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010824 EFFECTIVENESS DATE: 20010824 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CNS INC /DE/ CENTRAL INDEX KEY: 0000814258 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 411580270 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-68310 FILM NUMBER: 1723014 BUSINESS ADDRESS: STREET 1: PO BOX 39802 CITY: MINNEAPOLIS STATE: MN ZIP: 55439 BUSINESS PHONE: 6128206696 MAIL ADDRESS: STREET 1: PO BOX 39802 STREET 2: PO BOX 39802 CITY: MINNEAPOLIS STATE: MN ZIP: 55439 S-8 1 cns013142_s8.txt CNS, INC. FORM S-8 As filed with the Securities and Exchange Commission on August 24, 2001. Registration No. 333-_____ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------------- CNS, INC. (Exact name of registrant as specified in its charter) DELAWARE 41-1580270 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) PO BOX 39802 MINNEAPOLIS, MINNESOTA 55439 (Address of principal executive offices and zip code) ---------------------------- CNS, INC. 1989 EMPLOYEE STOCK PURCHASE PLAN (Full title of the Plan) ---------------------------- Copy to: Marti Morfitt Patrick Delaney CNS, Inc. Lindquist & Vennum P.L.L.P. PO Box 39802 4200 IDS Center Minneapolis, Minnesota 55439 80 South 8th Street (952) 229-1500 Minneapolis, MN 55402 (Name, address and telephone number, (612) 371-3211 including area code, of agent for service) CALCULATION OF REGISTRATION FEE
- ------------------------------------ ------------------- ------------------- --------------------------- ---------------- Title of Class of Securities to Be Amount to be Proposed Maximum Proposed Maximum Amount of Registered Registered Offering Price Aggregate Registration per Share Offering Price Fee - ------------------------------------ ------------------- ------------------- --------------------------- ---------------- Common Stock, 200,000 shares(2) $4.50 $900,000 $225 $.01 par value, to be issued pursuant to CNS, Inc. 1989 Employee Stock Purchase Plan - ------------------------------------ ------------------- ------------------- --------------------------- ----------------
- --------------------- (1) Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(c) and (h) and based upon the closing price of the Company's Common Stock on the Nasdaq National Market on August 21, 2001. (2) 200,000 shares of Common Stock were originally registered on Form S-8 (File No. 333-42931) filed with the Securities and Exchange Commission on June 28, 1989 (as adjusted for a two-for-one stock split effected on June 23, 1995) and 200,000 additional shares are being registered herewith. 1 INCORPORATION OF CONTENTS OF REGISTRATION STATEMENT BY REFERENCE A Registration Statement on Form S-8 (File No. 333-42931) was filed with the Securities and Exchange Commission on June 28, 1989 covering the registration of 200,000 (as adjusted for a two-for-one stock split on June 23, 1995) shares of Common Stock initially authorized for issuance under the CNS, Inc. 1989 Employee Stock Purchase Plan (the "Plan"). Pursuant to General Instruction E of Form S-8 and Rule 429, this Registration Statement is being filed to register an additional 200,000 shares authorized under the Plan. An amendment to the Plan to increase the reserved and authorized number of shares under the Plan by 200,000 was authorized by the Company's Board of Directors on January 18, 2001 and such amendment was approved by the Company's stockholders on May 23, 2001. This Registration Statement should be considered a post-effective amendment to the prior Registration Statement. The contents of the prior Registration Statement are incorporated herein by reference. PART I Pursuant to Part I of Form S-8, the information required by Items 1 and 2 of Form S-8 is not filed as a part of this Registration Statement. PART II Item 3. Incorporation of Documents by Reference. - ------------------------------------------------ The following documents filed with the Securities and Exchange Commission are hereby incorporated by reference: (a) The Annual Report of the Company on Form 10-K for the year ended December 31, 2000. (b) The Quarterly Reports of the Company on Form 10-Q for the quarters ended March 31, 2001 and June 30, 2001; the Definitive Proxy Statement dated April 9, 2001 for the 2001 Annual Meeting of Stockholders held on May 23, 2001. (c) The description of the Company's Common Stock to be offered pursuant to this Registration Statement is incorporated by reference to the Company's Registration Statement on Form 8-A/A (File No. 000-16612), including any amendment or report filed for the purpose of updating such description. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 prior to the completion or termination of this offering of shares of Common Stock shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. 2 Item 4. Description of Securities. - --------------------------------- The description of the Company's Common Stock to be offered pursuant to this Registration Statement has been incorporated by reference into this Registration Statement as described in Item 3 of this Part II. Item 5. Interests of Named Experts and Counsel. - ---------------------------------------------- Lindquist & Vennum P.L.L.P. is rendering its opinion as to the validity of the shares being registered hereby. Patrick Delaney, a partner at Lindquist & Vennum P.L.L.P., is a director of the Company. Item 6. Indemnification of Directors and Officers. - ------------------------------------------------- The Company's Bylaws require indemnification of directors and officers of the Company in accordance with, and to the fullest extent permitted by, Delaware law, as it may be amended from time to time. Section 145 of the Delaware General Corporation Law generally provides that any person who was or is a director or officer may be indemnified against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with the defense or settlement of any threatened, pending or completed legal proceedings in which he is involved by reason of the fact that he is or was a director or officer if he acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if he had no reasonable cause to believe that his conduct was unlawful. However, if the legal proceeding is by or in the right of the corporation, the director or officer may not be indemnified in respect of any claim, issue or matter as to which he shall have been adjudged to be liable to the corporation unless the court in which such action was brought deems it proper. The Company maintains directors' and officers' liability insurance, including a reimbursement policy in favor of the Company. The Company has been advised that, in the opinion of the Securities and Exchange Commission, indemnification for liabilities arising under the Securities Act that may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Item 7. Exemption from Registration Claimed. - ------------------------------------------- Not applicable. 3 Item 8. Exhibits. - ---------------- Exhibit ------- 4.1 CNS, Inc. 1989 Employee Stock Purchase Plan, amended through July 1, 1999 4.2 Amendments to CNS, Inc. 1989 Employee Stock Purchase Plan, as amended 5.1 Opinion of Lindquist & Vennum P.L.L.P. 23.1 Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1) 23.2 Consent of KPMG LLP, independent certified public accountants 24.1 Power of Attorney (included on signature page) Item 9. Undertakings. - -------------------- The Company hereby undertakes to: (a) (1) File, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to: (i) 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. (2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering. (3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. (b) The Company hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to 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. (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers, and controlling persons of the issuer pursuant to the foregoing provisions, or otherwise, the issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the issuer of expenses incurred or paid by a director, officer or controlling person of the issuer 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 issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 4 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-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, on August 24, 2001. CNS, INC. By /s/ Marti Morfitt -------------------------- Marti Morfitt Chief Executive Officer (Principal Executive Officer) POWER OF ATTORNEY The undersigned officers and directors of CNS, Inc. hereby constitute and appoint Marti Morfitt with power to act as our true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for us and in our stead, in any and all capacities to sign any and all amendments (including post-effective amendments) to this Registration Statement and all documents relating thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing necessary or advisable to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities indicated on August 24, 2001. Signature /s/ Marti Morfitt Chief Executive Officer, President and - ------------------------ Director (Principal Executive Officer) Marti Morfitt /s/ Daniel E. Cohen Chairman of the Board of Directors and - ------------------------ Director Daniel E. Cohen /s/ David J. Byrd Vice President of Finance, Chief - ------------------------ Financial Officer and Treasurer David J. Byrd (Principal Financial and Accounting Officer) /s/ Patrick Delaney Secretary and Director - ------------------------ Patrick Delaney /s/ H. Robert Hawthorne Director - ------------------------ H. Robert Hawthorne 5 /s/ R. Hunt Greene Director - ------------------------ R. Hunt Greene /s/ Andrew Greenshields Director - ------------------------ Andrew Greenshields /s/ Richard W. Perkins Director - ------------------------ Richard W. Perkins /s/ Richard A. Peddie Director - ------------------------ Richard A. Peddie 6 EX-4.1 3 cns013142_ex4-1.txt 1989 EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 4.1 CNS, INC. 1989 EMPLOYEE STOCK PURCHASE PLAN 1. Establishment of Plan. CNS, Inc. (hereinafter referred to as the "Company") proposes to grant to certain employees of the Company the opportunity to purchase common stock of the Company. Such common stock shall be purchased pursuant to the plan herein set forth, which shall be known as the "CNS 1989 EMPLOYEE STOCK PURCHASE PLAN" (hereinafter referred to as the "Plan"). The Company intends that the Plan shall qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with the requirements of said Section 423 and the regulations thereunder. 2. Purpose. The Plan is intended to encourage stock ownership by all employees of the Company, and as an incentive to them to remain in employment, improve operations, increase profits, and contribute more significantly to the Company's success. 3. Administration. The Plan shall be administered by a stock purchase committee (hereinafter referred to as the "Committee") consisting of not less than three directors or employees of the Company, as designated by the Board of Directors of the Company (hereinafter referred to as the "Board of Directors"). The Board of Directors shall fill all vacancies in the Committee and may remove any member of the Committee at any time, with or without cause. The Committee shall select its own chairman and hold its meetings at such times and places as it may determine. All determinations of the Committee shall be made by a majority of its members. Any decision that is made in writing and signed by a majority of the members of the Committee shall be effective as fully as though made by a majority vote at a meeting duly called and held. The determinations of the Committee shall be made in accordance with its judgment as to the best interests of the Company, its employees and its shareholders and in accordance with the purposes of the Plan; provided, however, that the provisions of the Plan shall be construed in a manner consistent with the requirements of Section 423 of the Internal Revenue Code, as amended. Such determination shall be binding upon the Company and the participants in the Plan unless otherwise determined by the Board of Directors. The Company shall pay all expenses of administering the Plan. No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it. 4. Duration and Phases of the Plan. a) The Plan was originally effective and commenced on July 1, 1989; effective as of July 1, 1999 the Plan is extended and will thereafter terminate July 1, 2009, except that any phase commenced prior to such termination shall, if necessary, be allowed to continue beyond such termination until completion. Notwithstanding the foregoing, this Plan shall be considered of no force or effect and any options granted shall be considered null and void unless the holders of a majority of all of the issued and outstanding shares of the common stock of the Company approve the Plan within twelve (12) months before or after the date of its adoption by the board of Directors. b) The Plan shall be carried out in one or more phases, each phase being for a period of six months. No phase shall run concurrently, but a phase may commence immediately after the termination of the preceding phase. The existence and date of commencement of a phase (the "Commencement Date") shall be determined by the Committee, provided that the commencement of the first phase shall be within twelve (12) months before or after the date of approval of the Plan by the shareholders of the Company. In the event all of the stock reserved for grant of options hereunder is issued pursuant to the terms hereof prior to the commencement of one or more phases scheduled by the Committee or the number of shares remaining is so small, in the opinion of the Committee, as to render administration of any succeeding phase impracticable, such phase or phases shall be cancelled. Phases shall be numbered successively Phase 1, Phase 2, Phase 3, etc. 5. Eligibility. Effective July 1, 1999, all Employees, as defined in Paragraph 19 hereof, who are employed by the Company on the Commencement Date of a phase shall be eligible to participate in such phase. Prior to July 1, 1999, all Employees, as defined in Paragraph 19 hereof, who were employed for a period of six months prior to the Commencement Date of a phase, were eligible to participate in such phase. 6. Participation. Participation in the Plan is voluntary. An eligible Employee may elect to participate in any phase of the Plan, and thereby become a `Participant" in the Plan, by completing the Plan payroll deduction form provided by the Company and delivering it to the Company or its designated representative prior to the Commencement Date or that phase. Payroll deductions for a Participant shall commence on the first payday after the Commencement Date of the phase and shall terminate on the last payday immediately prior to or coinciding with the termination date of that phase unless sooner terminated by the Participant as provided in Paragraph 9 hereof. 7. Payroll Deductions. a) Upon enrollment, a Participant shall elect to make contributions to the Plan by payroll deductions (in full dollar amounts and in amounts calculated to be as uniform as practicable throughout the period of the phase), in the aggregate amount not in excess of 10% of such Participant's Base Pay for the term of the phase, as determined according to Paragraph 19 hereof. The minimum authorized payroll deduction must aggregate at least $10 per month. b) In the event that the Participant's compensation for any pay period is terminated or reduced from the compensation rate for such a period as of the Commencement Date of the phase for any reason so that the amount actually withheld on behalf of the Participant as of the termination date of the phase is less than the amount anticipated to be withheld over the phase year as determined on the Commencement Date of the phase, then the 2 extent to which the participant may exercise his or her option shall be based on the amount actually withheld on his or her behalf. In the event of a change in the pay period of any Participant, such as from bi-weekly to monthly, an appropriate adjustment shall be made to the deduction in each new pay period so as to ensure the deduction of the proper amount authorized by the Participant. c) All payroll deductions made for Participants shall be credited to their accounts under the Plan. The Participant may not make any separate cash payments into such account. d) Except for his or her right to discontinue participation in the Plans as provided in Paragraph 9, no Participant shall be entitled to increase or decrease the amount to be deducted in a given phase after the Commencement Date. 8. Options. a) Grant of Option. i) A Participant who is employed by the Company as of the Commencement Date of a phase shall be granted an option as of such date to purchase a number of full shares of Company common stock to be determined by dividing the total amount to be credited to that Participant's account under Paragraph 7 hereof by the option price set forth in Paragraph 8(a)(ii) hereof (not to exceed 15,000 shares per Participant), subject to the limitations of Paragraph 10 hereof. ii) The option price for such shares of common stock shall be the lower of: A. Eighty-five percent (85%) of the fair market value of such shares of common stock on the Commencement Date of the phase; or B. Eighty-five percent (85%) of the fair market value of such shares of common stock on the termination date of the phase. iii) The fair market value of shares of common stock of the Company shall be determined by the Committee for each valuation date in a manner acceptable under Section 423, Internal Revenue Code of 1986, as amended. iv) Anything herein to the contrary notwithstanding, no Employee shall be granted an option hereunder: A. Which permits his or her rights to purchase stock under all employee stock purchase plans of the Company, its subsidiaries or its parent, if any, to accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of the fair market value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time; 3 B. If immediately after the grant such Employee would own and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company, its parent, if any, or of any subsidiary of the Company. For purposes of determining stock ownership under this Paragraph, the rules of Section 425(d) of the Internal Revenue Code of 1986, as amended, shall apply; or C. Which can be exercised after the expiration of 27 months from the date the option is granted. b) Exercise of Option. i) Unless a Participant gives written notice to the Company pursuant to Paragraph 8(b) (ii) or Paragraph 9 prior to the termination date of a phase, his or her option for the purchase of shares will be exercised automatically as of such termination date for the purchase of the number of full shares of Company common stock which the accumulated payroll deductions in his or her account at that time will purchase at the applicable option price, subject to the limitations set forth in Paragraph 10 hereof. ii) A Participant may, by written notice to the Company at any time during the thirty (30) day period immediately preceding the termination date of a phase, elect, effective as of the termination date of that phase, to exercise his or her option for a specified number of full shares less than the maximum number which may be purchased hereunder his or her option. iii) As promptly as practicable after the termination date of any phase, the Company will deliver to each Participation herein the common stock purchase upon the exercise of his or her option, together with a cash payment equal to the balance, if any, of his or her account which was not used for the purchase of common stock without interest thereon. 9. Withdrawal or Termination of Participation. a) A Participant may, at any time prior to the termination date of a phase, withdraw all payroll deductions then credited to his or her account by giving written notice to the Company. Promptly upon receipt of such notice of withdrawal, all payroll deductions credited to the Participant's account will be paid to him or her without interest thereon and no further payroll deductions will be made during that phase. In such event, the option granted the Participant under that phase of the Plan shall lapse immediately. Partial withdrawals of payroll deductions hereunder may not be made. b) In the event of the death of a Participant, the person or persons specified in Paragraph 14 may give notice to the Company within sixty (60) days of the death of the Participant electing to purchase the number of full shares which the accumulated payroll deductions in the account of such deceased Participant will purchase at the option price specified in Paragraph 8(a)(ii) and have the balance in the account distributed in cash without interest 4 thereon. If no such notice is received by the Company within said sixty (60) days, the accumulated payroll deductions will be distributed in full in cash without interest thereon. 10. Stock Reserved for Options. a) As of July 1, 1989, one hundred thousand (100,000) shares of the Company's no par value common stock which may be authorized by unissued or treasury shares of the Company (or the number and kind of securities to which said one hundred thousand (100,000) shares may be adjusted in accordance with Paragraph 12 hereof) are reserved for issuance upon the exercise of options to be granted under the Plan. Shares subject to the unexercised portion of any lapsed or expired option may again be subject to option under the Plan. b) If the total number of shares of Company common stock for which options are to be granted for a given phase as specified in Paragraph 8 exceeds the number of shares then remaining available under the Plan (after deductions of all shares for which options have been exercised or are then outstanding) and if the Committee does not elect to cancel such phase pursuant to Paragraph 4, the Committee shall make a pro rata allocation of the shares remaining available in as uniform and equitable a manner as it shall consider practicable. In such even, the options to be granted and the payroll deductions to be made pursuant to the Plan, which would otherwise be effected, may, in the discretion of the Committee, be reduced accordingly. The Committee shall give written notice of such reduction to each Participant affected. c) The Participant and a joint tenant named pursuant to Paragraph 10(d) hereof shall have no rights as a shareholder with respect to any shares subject to the Participant's option until the date of the issuance of a stock certificate evidencing such shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property), distributions or other rights for which the record date is prior to the date such stock certificate is actually issued, except as otherwise provided in Paragraph 12 hereof. d) The shares of Company common stock to be delivered to a Participant pursuant to the exercise of an option under the Plan will be registered in the name of the Participant or, if the Participant so directs by written notice to the Committee prior to the termination date of that phase of the Plan, in the names of the participant and one other person the Participant may designate as his joint tenant with rights of survivorship, to the extent permitted by law. 11. Accounting and Use of Funds. Payroll deductions for each participant shall be credited to an account established for him or her under the Plan. A Participant may not make any separate cash payments into such account. Such account shall be solely for bookkeeping purposes and no separate fund or trust shall be established hereunder and the Company shall not be obligated to segregate such funds. All funds from payroll deductions received or held by the Company under the Plan may be used, without limitation, for any corporate purpose by the Company. 5 12. Adjustment Provision. a) Subject to any required action by the shareholders of the Company, the number of shares covered by each outstanding option, and the price per share thereof in each such option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of the Company common stock resulting from a subdivision or consolidation of shares or the payment of a shared dividend (but only on the shares) or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company. b) Upon merger or consolidation of the Company with any other corporation whereby the Company is not the surviving entity, any options outstanding under this Plan shall be convertible, at the sole election of each Participant, into either: (I) stock options representing shares of the surviving corporation, providing for an option price, time of exercise, and other rights and benefits equivalent to the unexercised pre-merger or pre-consolidation options held by the Participant; or (ii) cash payment, equal to the fair market value of the shares of Company common stock subject to options outstanding hereunder as calculated on the day prior to the effective date of the merger or consolidation, with such payment to be made on the scheduled termination date of the phase under the Plan. The Company is bound to provide the foregoing protection to the Participants in the event of a merger or consolidation after which it would not be the surviving entity. c) In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be the shares within the meaning of this Plan. 13. Non-Transferability of Options. a) Options granted under any phase of the Plan shall not be transferable except under the laws of descent and distribution and shall be exercisable only the Participant during his or her lifetime and after his or her death only by his or her beneficiary of the representative of his or her estate as provided in Paragraph 9(b) hereof. b) Neither payroll deductions credited to a Participant's account, nor any rights with regard to the exercise of an option or to receive common stock under any phase of the Plan may be assigned, transferred, pledged or otherwise disposed of in any way by the Participant. Any such attempted assignment, transfer, pledge or other disposition shall be null and void and without effect, except that the Company may, at its option, treat such act as an election to withdraw funds in accordance with Paragraph 9. 6 14. Designation of Beneficiary. A Participant may file a written designation of a beneficiary who is to receive any cash to the Participant's credit under any phase of the Plan in the event of such Participant's death prior to exercise of his or her option pursuant to Paragraph 9(b) hereof, or to exercise his or her option and become entitled to any stock and/or cash upon such exercise in the event of the Participant's death prior to exercise of the option pursuant to Paragraph 9(b) hereof. The beneficiary designation may be changed by the Participant at any time by written notice to the Company. Upon the death of a Participant and upon receipt by the Company of proof deemed adequate by it of the identity and existence at the Participant's death of a beneficiary validly designated under the Plan, the Company shall in the event of the Participant's death under the circumstances described in Paragraph 9(b) hereof, allow such beneficiary to exercise the Participant's option pursuant to Paragraph 9(b) if such beneficiary is living on the termination date of the phase and deliver to such beneficiary the appropriate stock and/or cash after exercise of the option. In the event there is no validly designated beneficiary under the Plan who is living at the time of the Participant's death under the circumstances described in Paragraph 9(b) or in the event the option lapses, the Company shall deliver the cash credited to the account of the Participant without interest to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed to the knowledge of the Company, it may, in its discretion, deliver such cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. The Company will not be responsible for or be required to give effect to the disposition of any cash or stock or the exercise of any option in accordance with any will or other testamentary disposition made by such Participant or in accordance with the provision of any law concerning intestacy, or otherwise. No designated beneficiary shall, prior to the death of a Participant by whom he or she has been designated, acquire any interest in any stock or in any option or in the cash credited to the participant under any phase of the Plan. 15. Amendment and Termination. The Plan may be terminated at any time by the Board of Directors provided that, except as permitted in Paragraph 12 hereof, no such termination will take effect with respect to any options then outstanding. Also, the Board may, from time to time, amend the Plan as it may deem proper and in the best interests of the Company or as may be necessary to comply with Section 423 of the Internal Revenue Code of 1986, as amended, or other applicable laws or regulations; provided, however, that no such amendment shall, without prior approval of the shareholders of the Company (1) increase the total number of shares for which options may be granted under the Plan (except as provided in paragraph 12 herein), (2) permit aggregate payroll deductions in excess of ten percent (10%) of a Participant's compensation as of the Commencement Date of a phase, or (3) impair any outstanding option. 16. Interest. The Plan does not provide for the payment of interest on a Participant's payroll deductions. 17. Notices. All notices or other communications in connection with the Plan or any phase thereof shall be in the form specified by the Committee and shall be deemed to have been 7 duly given when received by the Participant or his designated personal representative or beneficiary or by the Company or its designated representative, as the case may be. 18. Participation of Subsidiaries. The Board of Directors may, by written resolution, authorize the employees of any of its subsidiaries to participate hereunder. Effective as of the date of coverage of any such subsidiary, any references herein to the "Company" shall be interpreted as referring to such subsidiary as well as to CNS, Inc. In the event that any subsidiary which is covered under the Plan ceases to be a subsidiary of CNS, Inc., the employees of such subsidiary shall be considered to have terminated their employment for purposes of Paragraph 9 hereof as of the date such subsidiary ceases to be such a subsidiary. 19. Definitions. a) Subsidiary" shall include any corporation defined as a subsidiary of the Company in Section 425 (f) of the Internal Revenue Code of 1986, as amended. b) "Employee" shall mean any employee, including an officer, of the Company who as of the Commencement Date of a phase is customarily employed by the Company for more than fifteen (15) hours per week and more than five (5) months per year. c) Base Pay" is the regular pay for employment for each employee as annualized for a twelve (12) month period, exclusive of overtime, commissions, bonuses, disability payments, shift differentials, incentives and other similar payments, determined as of the Commencement Date of each phase. Adopted by Board of Directors: January 27, 1989 Ratified and approved by shareholders: April 26, 1989 Extension and amendment by Board of Directors: July 1, 1999 8 EX-4.2 4 cns013142_ex4-2.txt 2ND AMEND TO 1989 EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 4.2 SECOND AMENDMENT TO THE CNS, INC. 1989 EMPLOYEE STOCK PURCHASE PLAN This SECOND Amendment to the CNS, Inc. 1989 Employee Stock Purchase Plan (the "Plan") is made and adopted by CNS, Inc., a Delaware corporation, and shall be effective as of January 1, 2001. WHEREAS, CNS, Inc. adopted, effective as of July 1, 1989, an employee stock purchase plan in accordance with Section 423 of the internal Revenue Code; and WHEREAS, CNS, Inc. (hereinafter referred as the "Company") amended the Plan as of July 1, 1999 to extend the term of the Plan to July 1, 2009; and WHEREAS, as of December 31, 2000, there remained 11,493 share of stock unissued under said Plan; and WHEREAS, the Board of Directors desires, subject to shareholder approval, to increase the number of shares authorized under the Plan by an additional 200,000 shares. AMENDMENT 1. THE FIRST SENTENCE OF SECTION 4, SUBSECTION (b) SHALL BE AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS: (b) The Plan shall be carried out in one or more Phases, each Phase being for a period of six months, or such shorter or longer period of time (not to exceed 27 months) as may be determined by the Committee prior to the commencement of a Phase. 2. SECTION 6 IS AMENDED BY ADDING A NEW PARAGRAPH TO READ IN FULL AS FOLLOWS: Once enrolled in the Plan, a Participant will continue to participate in the Plan until he or she ceases to be an Eligible Employee, withdraws from the Plan pursuant to Section 9 or reaches the end of the Plan Phase. A Participant who withdraws from the Plan pursuant to Section 9 may again become a Participant, if he or she is then an Eligible Employee, on the Commencement Date of any subsequent Phase by proceeding as provided in Section 7. A Participant whose payroll deductions were discontinued because of Section 8(a)(iv)(A) will automatically resume participation at the beginning of the earliest Phase of the Plan ending in the next calendar year, if he or she is then an Eligible Employee. 3. SECTION 8, SUBSECTION (a)(iv)(a) SHALL BE AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS: A. Which permits his rights to purchase stock under all employee stock purchase plans of the Company, its Subsidiaries or its parent, if any, to accrue at a rate which exceeds the lesser of Twenty-Five Thousand Dollars ($25,000) of the Fair Market Value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time or 10,000 shares per Phase under the Plan; or 4. SECTION 8, SUBSECTION (b)(i) SHALL BE AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS: (i) Unless a Participant gives written notice to the Company pursuant to Section 9 prior to the Termination Date of a Phase, his option for the purchase of shares will be exercised automatically for him as of Termination Date for the purchase of the number of full shares of Company common stock which the accumulated payroll deductions in his account at that time will purchase at the applicable option price, but in no event shall the number of full shares be greater than the number of full shares to which a Participant would have been eligible to purchase under Section 8(a)(i), and subject to the limitations set forth in Section 10 hereof. 5. SECTION 8, SUBSECTION (b)(iii) SHALL BE AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS: (iii) The Committee may appoint a registered broker dealer to act as agent for the Company in holding and performing ministerial duties in connection with the Plan, including, but not limited to, maintaining records of stock ownership by Participants and holding stock in its own name for the benefit of the Participants. No trust or escrow arrangement shall be express or implied by the exercise of such duties by the agent. A Participant may, at any time, request of the agent that any shares allocated to the Participant be registered in the name of the Participant or in joint tenancy with the Participant, in which event the agent shall issue a certificate for the whole number of shares in the name of the Participant (and his joint tenant, if any) and shall deliver to the Participant any cash for fractional shares, based on the then Fair Market Value of the shares on the date of issuance. 6. SECTION 8 IS AMENDED BY ADDING A NEW SUBPARAGRAPH (c) TO READ AS FOLLOWS: (c) Dividend Reinvestment. Unless the Committee designates otherwise, and except as provided in this section, dividends on a Participant's shares will automatically be reinvested in additional shares of stock of the Company. If a Participant desires to receive dividends in the form of cash, he must request that a certificate for such shares be issued in the name of the Participant by filing an appropriate form with the Company. Any shares purchased through the reinvestment of dividends may be issued from the shares authorized under this Plan or purchased on the open market, as directed by the Committee. If the shares are purchased directly from the Company, the purchase price shall be the Fair Market Value of a share or the date such dividends are paid. Otherwise, the purchase price may be an average of shares purchased on the open market with the aggregate amount of dividends. 7. SECTION 9 IS AMENDED BY ADDING A NEW SUBPARAGRAPH (c) TO READ AS FOLLOWS: (c) Notwithstanding the provisions of Section 9(a) above, if a Participant files reports pursuant to Section 16 of the Securities Exchange Act of 1934 (at the Commencement Date of a Phase or becomes obligated to file such reports during a Phase) then such a Participant's participation, including the ability to make changes and withdrawals, in a Phase and in the Plan shall be in accordance with Section 10b5-1 promulgated under the Securities Exchange Act of 1934. 8. SECTION 10, SUBSECTION (a) SHALL BE AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS: (a) The maximum number of shares of the Company's common stock to be issued upon the exercise of options to be granted under the Plan after December 31, 2000 shall be 211,493 representing 11,493 shares that remained unissued as of December 31, 2000 and an additional 200,000 shares which are subject to approval by the shareholders with 12 months of Board authorization for such shares. Such shares may, at the election of the Board of Directors, be either shares authorized but not issued or shares acquired in the open market by the Company. Shares subject to the unexercised portion of any lapsed or expired option may again be subject to option under the Plan. 9. SECTION 19, SUBSECTION (c) SHALL BE AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS: (c) "Pay" is the regular pay for employment for each employee as annualized for a twelve (12) month period, including salary reduction contributions by the Participant under any plan of the Employer pursuant to Code ss.ss. 401(k) or 125, but exclusive of overtime, commissions, bonuses, disability payments, shift differentials, incentives and other similar payments, determined as of the Commencement Date of each Phase. 10. SECTION 19 IS AMENDED BY ADDING A NEW SUBPARAGRAPH (d) TO READ AS FOLLOWS: (d) "Fair Market Value" of a share of stock of the Company shall be the closing price of the stock on the applicable date or the nearest prior business day on which trading occurred on the exchange on which the stock is traded or on the Nasdaq Stock Market. If the common stock is not traded on any exchange or listed on the Nasdaq Stock Market, the Fair Market Value of a share of common stock of the Company shall be determined by the Committee for each valuation date in a manner acceptable under Section 423 of the Internal Revenue Code of 1986, as amended. 11. THE PLAN SHALL BE OTHERWISE AMENDED FOR NON-SUBSTANTIVE AND CONFORMING CHANGES AS IS DETERMINED TO BE NECESSARY BY MANAGEMENT OF THE COMPANY. 12. EXCEPT AS OTHERWISE AMENDED ABOVE, THE PLAN SHALL REMAIN IN FULL FORCE AND EFFECT. IN WITNESS WHEREOF, CNS, Inc. has caused this Second Amendment to the Plan to be executed on the date written below by its proper officer, who has been duly authorized by its Board of Directors, has caused this Second Amendment to be executed on the date written below. CNS, INC. Dated: January 18, 2001 By /s/ Daniel Cohen ------------------------------- Its Chief Executive Officer ------------------------------- EX-5.1 5 cns013142_ex5-1.txt OPINION RE: LEGALITY EXHIBIT 5.1 August 24, 2001 CNS, Inc. PO Box 39802 Minneapolis, MN 55439 RE: OPINION OF COUNSEL AS TO LEGALITY OF 200,000 SHARES OF COMMON STOCK TO BE REGISTERED UNDER THE SECURITIES ACT OF 1933 Ladies and Gentlemen: This opinion is furnished in connection with the registration under the Securities Act of 1933 on Form S-8 of 200,000 shares of Common Stock, $.01 par value per share, of CNS, Inc., (the "Company") offered to employees of the Company or its subsidiaries pursuant to the CNS, Inc. 1989 Employee Stock Purchase Plan (the "Plan"). As general counsel for the Company, we advise you that it is our opinion, based on our familiarity with the affairs of the Company and upon our examination of pertinent documents, that the 200,000 shares of Common Stock to be offered to employees under the Plan will, when paid for and issued, be validly issued and lawfully outstanding, fully paid and nonassessable shares of Common Stock of the Company. The undersigned hereby consent to the filing of this opinion with the Securities and Exchange Commission as an Exhibit to the Registration Statement with respect to said shares of Common Stock under the Securities Act of 1933. Very truly yours, LINDQUIST & VENNUM P.L.L.P. /s/ Lindquist & Vennum P.L.L.P. EX-23.2 6 cns013142_ex23-2.txt CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS ------------------------------- The Board of Directors CNS, Inc.: We consent to the use of our report incorporated herein by reference. /s/ KPMG LLP Minneapolis, MN August 24, 2001 -----END PRIVACY-ENHANCED MESSAGE-----