Stereotaxis
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S-1/A
STEREOTAXIS, INC. filed this Form S-1/A on 06/17/2004
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       In 2004 we granted 75,000 incentive stock options to Mr. Hogg and 12,500 incentive stock options to Mr. Bruce, pursuant to the terms of the Stereotaxis 2002 Stock Incentive Plan. The exercise price for the options will be the initial public offering price per share of our common stock. The options will vest over a period of four years from the date of the initial public offering of our common stock, with 25% vesting after one year and 2.0833% vesting each month thereafter.

Termination of Employment Agreement with Former Chief Financial Officer

       On May 26, 2004, Timothy J. Mortenson resigned as our Vice President and Chief Financial Officer. He had served in this position since March 22, 2004. His employment agreement with Stereotaxis terminated at that time, and he received no severance payment. Mr. Mortenson had received an incentive stock option to purchase up to 250,000 shares of stock in connection with his employment under our 2002 Stock Incentive Plan, all of which options were unvested and were forfeited upon Mr. Mortenson’s resignation.

Employee Benefit Plans

 
1994 Stock Option Plan

       Our 1994 Stock Option Plan provided for the granting to employees of incentive stock options and for the granting to employees, directors and consultants of nonstatutory stock options. This plan automatically terminated in April 2004. Our compensation committee administers this plan, and accordingly established the option exercise price.

       Options granted under this plan are generally not transferable by the optionee except by will or the laws of descent and distribution, and each option is exercisable, during the lifetime of the optionee, only by the optionee. Options generally must be exercised within three months following the end of the optionee’s continuing status as an employee, director or consultant, other than for cause or for death or disability, within 12 months after the optionee’s termination by disability or within 18 months after the optionee’s termination by death. However, in no event may an option be exercised later than the earlier of the expiration of the term of the option or ten years from the date of the grant of the option or, where an optionee owns stock representing more than 10% of the voting power, five years from the date of the grant of the option.

       In the event of a merger or consolidation where we are not the surviving corporation or a reverse merger where we are the surviving corporation but our shares of common stock are converted by the merger into other property, then (1) the surviving corporation will either assume the options outstanding or substitute similar options for those outstanding under the plan, or (2) the options will continue in full force and effect. If any surviving corporation refuses to assume or continue the options or to substitute similar options for those outstanding, then such options will be terminated if not exercised before such event. If we dissolve or liquidate, the outstanding options will terminate if not exercised before such event. We may not alter the rights and obligations under any option granted under this plan without the written consent of the affected optionee.

       Options granted under the plan generally permit the optionee to exercise the option prior to the full vesting of the option. Any unvested shares purchased in an early election are subject to a repurchase right equal to the original purchase price of the stock, or to any other restriction the administrator deems appropriate.

       As of March 31, 2004, options to purchase 2,863,810 shares of common stock were outstanding and exercisable at a weighted average price of $0.79 per share under the 1994 Stock Option Plan, and 133,646 shares issued upon exercise of options under the plan were subject to repurchase.

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