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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) FEBRUARY 24, 2005
SOMANETICS CORPORATION
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(Exact name of registrant as specified in its charter)
MICHIGAN 0-19095 38-2394784
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1653 EAST MAPLE ROAD, TROY, MICHIGAN 48083-4208
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (248) 689-3050
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communication pursuant to Rule 425 under the Securities Act.
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act.
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act.
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act.
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On February 24, 2005, our Compensation Committee recommended, and our
Board of Directors adopted, the Somanetics Corporation 2005 Stock Incentive Plan
(the "Plan"), subject to shareholder approval at the 2005 Annual Meeting of
Shareholders, scheduled to be held April 21, 2005. The following is a summary of
the Plan, which is qualified in its entirety by reference to the full text of
the Plan, which is attached to this report as Exhibit 10.1.
Purposes
The purposes of the Plan are (1) to align the interests of our
shareholders and recipients of awards by increasing the recipients' proprietary
interest in our growth and success, (2) to advance our interests by attracting
and retaining officers, other employees, non-employee directors, consultants,
advisors, independent contractors and agents and (3) to motivate such persons to
act in the long-term best interests of the Company and its shareholders.
Types of Awards and Participants
The Plan permits us to grant stock options, including both nonqualified
options and incentive options, restricted stock and restricted stock units
("RSUs") to officers, other employees, non-employee directors, consultants,
advisors, independent contractors and agents of the Company and its
subsidiaries.
Administration
The Compensation Committee of the Board of Directors or such other
committee as may be designated by the Board of Directors or the Board of
Directors itself (the "Committee") will administer the Plan. To the extent
permitted by applicable law, the Committee may delegate some or all of its power
and authority to administer the Plan to our chief executive officer or any other
of our executive officers.
Termination and Amendment
The Plan may be terminated at any time by our Board of Directors. Unless
sooner terminated, the Plan will terminate February 24, 2015. The Board of
Directors may amend the Plan at any time, subject to any requirement of
shareholder approval required by applicable law, rule or regulation, including
Section 162(m) and Section 422 of the Internal Revenue Code. No amendment may
impair any award which has been granted under the Plan without the consent of
the holder.
Shares Available
Awards may be granted for a maximum of 600,000 common shares. Any shares
subject to any award granted under the Plan that are forfeited or not delivered
due to the termination of such award or the settlement of such award in cash,
and any shares that are delivered to us by a participant or withheld from
delivery to a participant for purposes of paying the exercise price or
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tax withholding obligations with respect to an award granted under the Plan will
become available for future awards under the Plan. To the extent necessary for
an award to be exempt from the deduction limits under Section 162(m) of the
Internal Revenue Code of 1986, as discussed below, the maximum number of shares
subject to options granted to any individual during any calendar year may not
exceed 300,000 shares.
Stock Options
The Committee will determine the conditions to the exercisability of each
option and the terms relating to the exercise or cancellation of an option upon
a termination of employment or service. The exercise price for options may not
be less than 100% (110% in the case of an incentive option granted to a
participant owning more than 10% of our voting shares) of the fair market value
of our common shares on the grant date. Each option will be exercisable for no
more than ten years after its date of grant. The Committee will determine the
conditions to the exercisability of each option and the terms relating to the
exercise or cancellation of an option upon a termination of employment or
service.
Upon exercise of an option, the purchase price may be paid in cash, by
delivery of previously owned common shares or, to the extent permitted by law,
under a cashless exercise program with a brokerage firm.
The Committee will not amend or replace previously granted options in a
transaction that constitutes a "repricing" under the Nasdaq Stock Market
Marketplace Rules without the approval of our shareholders.
Restricted Stock Awards and RSUs.
The Committee may grant restricted stock or RSUs to a participant.
Restricted stock and RSUs are nontransferable and will have an established
restriction period that may differ for each participant and with respect to all
or any portion of the same award. An award of restricted stock or RSUs will be
subject to the participant's continued employment or service during the
restriction period. Participants are entitled to all dividend and voting rights
with respect to restricted stock. A participant will have no stock ownership
interest as a result of being granted RSUs, but the Committee may allow a
participant to receive dividend equivalents on such units. The amount paid with
respect to an RSU may be paid in cash, common shares (including restricted
stock), or any combination, and may be paid currently or on a deferred basis
with provision for the payment or crediting of a dividend equivalent. All of the
terms relating to the termination of a restriction period, or the forfeiture and
cancellation of a restricted stock award or RSU upon a termination of employment
or service, whether by reason of disability, retirement, death or any other
reason, will be determined by the Committee.
Change in Control
For purposes of the Plan, we would undergo a change in control in the
event of certain acquisitions of 40% or more of our common shares, a change in a
majority of the Board of Directors, or the consummation of a reorganization,
merger or consolidation or sale or
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disposition of all or substantially all of our assets (unless, among other
conditions, our shareholders receive 60% or more of the stock of the surviving
company) or the consummation of our liquidation or dissolution.
Unless otherwise specified in the agreement relating to an award, in the
Committee's discretion, either (1) (a) each restricted stock award and RSU and
performance share award will be cancelled in exchange for a cash payment for
each share subject to the award in an amount equal to the highest price paid to
our shareholders in connection with the change in control, or the fair market
value per common share on the date of the change in control, whichever is
greater, and (b) each outstanding option will be cancelled in exchange for a
cash payment for each share subject to the award in an amount equal to the
excess, if any, of the amount determined as described in clause (a) over the
applicable exercise price of the option, or (2) all restricted stock and RSUs
will become fully vested, all outstanding options will become fully exercisable
and an appropriate number of shares, if any, received by our shareholders in any
such transaction will be substituted for our common shares subject to
outstanding options and other awards, and an appropriate adjustment will be made
to any applicable exercise price.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit Description
10.1 Somanetics Corporation 2005 Stock Incentive Plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 2, 2005 SOMANETICS CORPORATION
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(Registrant)
By: /s/ Mary Ann Victor
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Mary Ann Victor
Its: Vice President of Communications
and Administration and Secretary
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EXHIBIT INDEX
Exhibit Description
10.1 Somanetics Corporation 2005 Stock Incentive Plan.
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