Proxy Statement Pursuant to Section 14(a)
of the Securities and Exchange Act of 1934
(Amendment No. 1 )
---------
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to S. 240.14a-11(c) or S. 240.14a-12
GLOBAL MED TECHNOLOGIES, INC.
-----------------------------------------------
(Name of Registrant as Specified in its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6 (i) (4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________.
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________.
(4) Proposed maximum aggregate value of transaction:
______________________________________________________________.
(5) Total fee paid:
______________________________________________________________.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid: _______________________________________.
(2) Form, Schedule or Registration Statement No.:_________________.
(3) Filing Party: ________________________________________________.
(4) Date Filed: __________________________________________________.
12600 WEST COLFAX, SUITE A-500
LAKEWOOD, COLORADO 80215
(303) 238-2000
- -------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 2, 1997
- -------------------------------------------------------------------------
OCTOBER__, 1997
TO THE SHAREHOLDERS OF GLOBAL MED TECHNOLOGIES, INC.:
An Annual Meeting of Shareholders of Global Med Technologies, Inc., a
Colorado corporation (the "Company"), will be held at the Company's offices
at 12600 West Colfax, Suite A-500, Lakewood, Colorado 80215 on December 2,
1997 at 10:00 a.m., Mountain Time, to consider and take action on:
1. A proposal to amend the Articles of Incorporation to divide the
Board of Directors into three Classes, each of which, after an interim
arrangement, will serve for staggered three year terms. (Amendment of the
Articles of Incorporation requires the affirmative vote of a majority of
the Common Stock outstanding.)
2. The election of four (4) directors to serve until the next Annual
Meeting of Shareholders and until their successors have been elected and
qualified. (Each shareholder entitled to vote at the meeting has the right
to vote the number of shares held by him for each of the four (4) director
nominees. Election of the director nominees requires the affirmative vote
of a majority of the votes cast at the Annual Meeting.)
3. To consider and vote upon a proposal to approve the sale of the
Company's DataMed International division ("DataMed") to National Medical
Review Offices, Inc. for $1,200,000, the assumption of certain liabilities
and other conditions as more fully described in the attached Proxy
Statement. (Passage of this proposal requires the affirmative vote of a
majority of the Common Stock outstanding.)
4. To increase the number of available shares under the Company's
Second Amended and Restated Stock Option Plan for employees, officers,
directors and consultants of the Company and to ratify and approve the
actions of the Board of Directors of the Company authorizing amendments to
the Company's Second Amended & Restated Stock Option Plan as more fully
described in the attached Proxy Statement. (Passage of this proposal
requires the affirmative vote of a majority of the voting shares
represented at the meeting.)
5. Such other business as may properly come before the meeting, or
any adjournment or adjournments thereof.
The discussion of the proposals of the Board of Directors set forth
above is intended only as a summary, and is qualified in its entirety by
the information relating to the proposals set forth in the accompanying
Proxy Statement.
Only shareholders of record at the close of business on October 22,
1997, will be entitled to notice of and to vote at this annual meeting, or
any adjournment or adjournments thereof. Management will vote its proxies
to adjourn the meeting, if necessary, to insure that the Proposal to
approve the sale of DataMed is approved.
Date: October __, 1997 By Order of the Board of Directors:
Michael I. Ruxin, M.D., Chairman of the
Board of Directors and Chief Executive
Officer
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT
YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES. THE GIVING OF
SUCH PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU
ATTEND THE MEETING.
YOUR VOTE IS IMPORTANT
-3-
GLOBAL MED TECHNOLOGIES, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 2, 1997
October__, 1997
THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH A SOLICITATION OF
PROXIES (IN THE FORM ENCLOSED) BY THE BOARD OF DIRECTORS OF GLOBAL MED
TECHNOLOGIES, INC. (THE "COMPANY") TO BE USED AT THE ANNUAL MEETING OF
SHAREHOLDERS AT 10:00 A.M. (MOUNTAIN TIME), ON DECEMBER 2, 1997 AT THE
COMPANY'S OFFICES AT 12600 WEST COLFAX, SUITE A-500, LAKEWOOD, COLORADO
80215. THE PROXY AND PROXY STATEMENT ARE BEING MAILED TO SHAREHOLDERS ON
OR ABOUT OCTOBER 23, 1997.
REVOCABILITY OF PROXY
If the enclosed Proxy is executed and returned, it will be voted on
the proposal as indicated by the shareholder. The Proxy may be revoked by
the shareholder at any time prior to its use by notice in writing to the
Secretary of the Company, by executing a later dated proxy and delivering
it to the Company prior to the meeting or by voting in person at the
meeting.
SOLICITATION
The cost of preparing, assembling and mailing the Notice of Meeting,
Proxy Statement and Proxy (the "Proxy Materials"), miscellaneous costs with
respect to the Proxy Materials and solicitation of the Proxies will be paid
by the Company. The Company also may use the services of its directors,
officers and employees to solicit Proxies, personally, by telephone or
otherwise, but at no additional salary or compensation. The Company
intends to request banks, brokerage houses and other custodians, nominees
and fiduciaries to forward copies of the Proxy Materials to those persons
for whom they hold such shares and request authority for the execution of
the Proxies. The Company will reimburse them for the reasonable
out-of-pocket expenses incurred by them in so doing.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS THEREOF
Shareholders of record at the close of business on October 22, 1997
will be entitled to vote on all matters. On the record date the Company
had 8,135,755 shares of Common Stock, $.01 par value (the "Common Stock"),
outstanding. The holders of the Common Stock are entitled to one vote per
share. The Company has no class of voting securities outstanding other
than its Common Stock. One third of the issued and outstanding shares of
the Company's Common Stock entitled to vote, represented in person or by
proxy, constitutes a quorum at any shareholders' meeting. Broker non-votes
and abstentions will be counted for purposes of determining a quorum;
however, they will not be counted as votes cast. Therefore, such votes
will not affect the outcome of the voting on
Proposals One, Two, Three or Four.
The following table sets forth certain information as of October 22,
1997 regarding the ownership of the Company's Common Stock by (i) each
person known by the Company to be the beneficial owner of more than five
percent (5%) of the Company's Common Stock, (ii) each director and
executive officer of the Company, and (iii) all directors and executive
officers of the Company as a group:
Name and Address of Amount and Nature of Percent
Beneficial Owner Title Beneficial Ownership(1) of Class
- --------------------- ----- ----------------------- --------
Michael I. Ruxin, M.D.(8) Chairman of the Board 906,250(2) 11.1%
12600 W. Colfax and CEO
Suite A-500
Lakewood, CO 80215
Joseph F. Dudziak President and COO 151,914(3) 1.8%
12600 W. Colfax
Suite A-500
Lakewood, CO 80215
William J. Collard (8) Secretary/Treasurer, 613,006(4) (5) 7.5%
11121 Sun Center Drive Director and Wyndgate
Suite C President (11)
Rancho Cordova, CA 95670
Gerald F. Willman, Jr. (8) Director and Wyndgate 882,514(6) 10.9%
11121 Sun Center Drive Vice President (11)
Suite C
Rancho Cordova, CA 95670
Bart K. Valdez Chief Financial 52,800(10) 0.7%
12600 W. Colfax Ave. Officer and Director of
Suite A-500 DataMed Operations
Lakewood, CO 80215
Lori J. Willman (8) 882,514(7) 10.9%
11121 Sun Center Drive
Suite C
Rancho Cordova, CA 95670
-2-
Gordon E. Segal Director 256,250(9) 3.2%
340 W. 57th, Apt. 9J
New York, NY 10019
All Directors and Executive 2,862,734 34.3%
Officers as a group (6 persons)
- --------------------
(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of
1934. Unless otherwise stated below, each such person has sole voting
and investment power with respect to all such shares. Under Rule
13d-3(d), shares not outstanding which are subject to options, warrants,
rights or conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage
owned by such person, but are not deemed outstanding for the purpose
of calculating the percentage owned by each other person listed.
(2) Includes 6,250 shares underlying warrants issued in connection with
the purchase of the Company's 10% Notes.
(3) Includes options to purchase 125,000 shares at $1.81 per share and
12,500 shares underlying warrants issued in connection with the
purchase of the 10% Notes.
(4) Includes 15,000 shares underlying warrants issued in connection with
the purchase of the 10% Notes.
(5) William J. Collard has granted individual options to an employee of
Wyndgate to purchase all or any part of 1,633 of his shares of the
Company, exercisable until September 21, 2005.
(6) Includes 346,481 shares owned by Lori J. Willman, the spouse of Gerald
F. Willman, Jr. Gerald F. Willman, Jr. has granted individual options
to certain employees of Wyndgate to purchase all or any part of
109,434 of his shares of the Company, exercisable until September 21,
2005.
(7) Includes 536,033 shares owned by Gerald F. Willman, Jr., the spouse of
Lori J. Willman.
(8) On November 14, 1996, Michael I. Ruxin, William J. Collard, Gerald F.
Willman, Jr., Lori J. Willman, Timothy J. Pellegrini and Gordon Segal
(collectively, the "Shareholders") entered into a Proxy and Right of
First Refusal Agreement (the "Shareholders Agreement") with ODSI
pursuant to which each of the Shareholders granted an irrevocable
proxy to ODSI to vote their shares of the Company's Common Stock (i)
in favor of a proposal to approve any definitive agreement between the
Company and ODSI relating to the Technology, or (ii) on any other
proposal relating to the sale of any of the stock of the Company or
all or substantially all of the assets of the Company or any of the
Technology, unless prior to the date of the shareholders' meeting, the
definitive agreement has been terminated under certain conditions.
Unless earlier terminated, the proxy granted by each of the
Shareholders expires November 14, 1997. Each of the Shareholders also
granted ODSI a right of first refusal to purchase the Shareholder's
shares until November 14, 1997, in the event such Shareholder proposes
to transfer, dispose of, or otherwise sell such Shareholder's shares
to any third party or grant to any third party an option or other
right to buy any shares of the Company's Common Stock held by such
Shareholder. In July 1997, ODSI relinquished the right of first
-3-
refusal in connection with the Company's extension to September 30,
1997 of ODSI's right to negotiate with the Company, on a non-exclusive
basis, with respect to the Technology. In September, 1997, the
parties agreed to a further extension to December 31, 1997.
(9) Includes 6,250 shares underlying warrants issued in connection with
the 10% Notes. Does not include 30,000 shares underlying unvested
options.
(10) Includes 2,800 shares underlying warrants issued in connection with
the 10% Notes and options to purchase 50,000 shares at $1.81 per
share.
CHANGE IN CONTROL
- -----------------
No change in control of the Company has occurred since the beginning
of the last fiscal year.
-4-
DIRECTORS AND EXECUTIVE OFFICERS
The following are the current directors and executive officers of the
Company:
Officer or
Name Age Position Director Since
---- --- -------- ---------------
Michael I. Ruxin, M.D. 51 Chairman of the Board 1989
and CEO
Joseph F. Dudziak 59 President and COO 1995
William J. Collard 56 Secretary/Treasurer, 1995
Director and Wyndgate
President
Gerald F. Willman, Jr. 40 Director and Wyndgate 1995
Vice-President
Bart K. Valdez 34 Acting Chief Financial 1996
Officer and DataMed
Director of Operations
Gordon E. Segal 45 Director 1997
MICHAEL I. RUXIN, M.D., the founder of the Company, has been an
officer and director of the Company since its incorporation in 1989 and is
currently the Chairman and Chief Executive Officer of the Company. From
1982 to 1994, Dr. Ruxin was a director of GeriMed of America, Inc., a
private company administering senior health care centers. From 1985 to
1993, Dr. Ruxin was an officer and director of CBL Medical, Inc. ("CBL"),
a public company which managed multiple medical groups, including Medcomp
Medical Group which was a group of small clinics owned by Dr. Ruxin. CBL
focused on providing second opinions on workers compensation claims. Dr.
Ruxin left CBL management in 1988 to found the Company although he remained
on the board of CBL due to his continued ownership of clinics until 1993.
Five years after Dr. Ruxin left CBL management, in 1993, CBL filed a
Petition under Chapter 7 of the Federal Bankruptcy Code to liquidate due to
a change in the workers compensation regulations in the State of
California. Dr. Ruxin received a B.A. degree from the University of
Pittsburgh and an M.D. degree from the University of Southern California.
Dr. Ruxin is a licensed physician in California and Colorado. He is a
member of the American Association of Medical Review Officers.
JOSEPH F. DUDZIAK has been President and Chief Operating Officer of
the Company since June 1995. From January 1993 to June 1995, he was
employed as a "site executive" with Analysts International Corporation, a
contract consulting firm engaged primarily in development
-5-
and support of software. From August 1991 to December 1992, he was a
self-employed executive consultant, during which time he provided consulting
services primarily to The Wyndgate Group, Ltd., which merged with the
Company in May, 1995, in the areas of product development and marketing and
the development of a business plan. For the 30 years prior to August 1991,
Mr. Dudziak was employed in various capacities (most recently as a group
Vice President) by Control Data Corporation ("CDC"), which was involved in
the computer systems, software and information management businesses.
WILLIAM J. COLLARD has been a director and the Secretary/Treasurer of
the Company and the President of Wyndgate since May 1995. From 1984 to May
1995 he was president and a director of The Wyndgate Group, Ltd., and
responsible for directing the sales, operations and research and
development efforts of The Wyndgate Group, Ltd. From 1976 to 1984, Mr.
Collard was the executive director of Sigma Systems, Inc., a company that
provides colleges and other institutions with administrative computer
applications. Mr. Collard received a B.S. degree in Business
Administration (Finance) and an M.S. degree in Business Administration
(Quantitative Methods) from California State University.
GERALD F. WILLMAN, JR. has been a director of the Company and the Vice
President of Wyndgate since May 1995. Mr. Willman was director and then
a Vice President of The Wyndgate Group, Ltd., from 1984 to 1995 and was
responsible for the overall design and development of the products
developed by The Wyndgate Group, Ltd., including research of new
technologies. Prior to his employment at The Wyndgate Group, Ltd., he was
employed as a development team leader at Systems Research, Inc. Mr.
Willman received a B.S. degree from Hampden Sydney College and M.B.A.
degree from National University.
BART K. VALDEZ, has been the Director of Operations for DataMed since
October 1996 and the Principal Financial Officer since June 1997. He was
Director of Finance and Operations and also acted as the Principal
Financial Officer for the Company from June 1995 through mid-October 1996.
Mr. Valdez functions under the direct supervision of the President and is
accountable for the effective operations of the account management team,
medical review, data management, vendor management and information systems
departments. From 1989 to joining the Company in 1995, he was employed by
Baxter International, Inc., a medical supply and manufacturing company,
most recently as Regional Director of Operations for the Mountain Region.
Mr. Valdez received a B.S. degree in Management from Colorado State
University and a M.B.A. degree in Finance from the University of Colorado.
In October 1997, the Company and Mr. Valdez entered into a severance
agreement pursuant to which Mr. Valdez is to receive a lump sum payment
of $55,000 upon the closing of the sale of DataMed and 50,000 fully vested
options granted on August 25, 1997, which are exercisable over a ten year
period at $1.81 per share.
GORDON E. SEGAL, M.D., has been a director of the Company since April,
1997. Since December 1995, he has been co-founder and principal of M & S
Ventures, a privately held investment venture capital firm specializing in
biotechnology and health care companies. From
-6-
January 1992 to December 1995, Dr. Segal was a private venture capitalist.
Dr. Segal received a B.A. degree in 1973 from Southern Methodist University
and an M.D. degree in 1978 from the University of Tennessee. Dr. Segal is
a licensed physician in New York and is a board certified anesthesiologist.
The directors of the Company are elected to hold office until the next
annual meeting of shareholders or until a successor has been elected and
qualified. Officers of the Company are elected annually by the Board of
Directors and hold office until their successors are duly elected and
qualified.
No arrangement or understanding exists between any of the above
officers and directors pursuant to which any one of those persons was
selected to such office or position. None of the directors hold
directorships in other companies.
During the last fiscal year the Company's Board of Directors held four
(4) meetings and took unanimous action through nine (9) sets of minutes of
action. All directors attended all four meetings held.
The Company has no nominating committee.
The Company's Audit/Systems Committee acts as the liaison between the
Company and its independent public accountants. Dr. Ruxin is currently the
only member of this committee. The Audit Committee did not hold any
meetings during 1996. The Audit/Systems Committee is responsible for
reviewing and approving the scope of the annual audit undertaken by the
Company's independent accountants and will meet with the accountants to
review the progress and results of their work, as well as any
recommendations the accountants may offer. The Audit/Systems Committee
will also review the fees of the independent accountants and make
recommendations to the Board of Directors as to the appointment of the
accountants. In connection with the Company's internal accounting
controls, the Audit/Systems Committee will review the internal audit
procedures and reporting systems in place at the Company and review their
accuracy and adequacy with management and with the Company's independent
accountants.
The Company's Compensation Committee, which will recommend
compensation levels to the Board of Directors, consists of Dr. Ruxin and
Mr. Collard who have met once as a committee. The Compensation Committee
will review salaries, bonuses, and other forms of compensation for officers
and key employees of the Company and its subsidiaries, and will establish
salaries, benefits, and other forms of compensation for new employees.
Included in the Compensation Committee's responsibility is the issuance of
stock bonuses and stock options under the Company's two stock option/bonus
plans. In addition, the Compensation Committee will review other matters
concerning compensation and personnel as the Board of Directors may
request. The Compensation Committee will design the Company's compensation
to enable the Company to attract, retain, and reward highly qualified
executives, while maintaining a strong and direct link between executive
pay, the Company's financial performance, and total stockholder
-7-
return. The Compensation Committee believes that officers and certain
other key employees should have a significant stake in the Company's stock
price performance under programs which link executive compensation to
stockholder return.
FAMILY RELATIONSHIPS
- --------------------
There are no family relationships among the Company's officers and
directors.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
- -------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act"), requires the Company's executive officers and directors, and persons
who own more than 10% of the outstanding common stock of the Company to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC") and Nasdaq. As the Company was not subject
to the Exchange Act during fiscal 1996, no reports were required to be
filed under Section 16(a).
-8-
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
- --------------------------
The following table sets forth information regarding compensation paid
to the Company's CEO and the other executive officers of the Company who
received in excess of $100,000 of salary and bonus from the Company during
the fiscal years ended December 31, 1994, 1995 and 1996:
Annual Compensation ($$) Long Term Compensation
------------------------ ----------------------
Awards
------
Restricted
Name and Stock Options Other
Position Year Salary Bonus Awards & SARs Compensation
- -------- ---- ------ ----- ------- ------ -------------
($$) ($$) ($$) (##) ($$)
Michael I. Ruxin, 1996 $195,000 -0- -0- -0- $ 16,520(1)
Chairman and CEO 1995 $190,000 -0- -0- -0- $ 16,520(1)
1994 $180,000 -0- -0- -0- $ 8,216(2)
Joseph F. Dudziak, 1996 $110,000 -0- -0- 25,000(3) $ 4,800(4)
President and COO 1995 $105,000 -0- -0- 100,000(3) $ 4,800(4)
1994 -0- -0- -0- -0- $ -0-
William J. Collard, 1996 $100,000 -0- -0- -0- $180,400(5)
Secretary/Treasurer 1995 $100,000 -0- -0- -0- $ 30,400(5)
and Director, 1994 $ 75,000 $ 100(6) -0- -0- $ -0-
Wyndgate President
- --------------------
(1) Dr. Ruxin receives $5,000 per annum in life insurance premiums and a
$960 per month car allowance.
(2) Dr. Ruxin received a car allowance of $368 per month, and $3,800 in
life insurance premiums.
(3) In June 1995, Mr. Dudziak received options to purchase 100,000 shares
exercisable at $2.45 per share. In September 1996, Mr. Dudziak
received options to purchase 25,000 shares exercisable at $2.50 per
share. These options vest at the rate of 20% per year. No value has
been attributed to these options since the exercise price was the
estimated fair value of the Company's shares at the time of grant.
(4) Mr. Dudziak receives $400 per month car allowance.
(5) Mr. Collard receives a $450 per month car allowance. In 1995, Mr.
Collard received $25,000 under his non-compete agreement. In 1996,
Mr. Collard received $175,000 under his non-compete agreement and
reimbursement for a vacation in the approximate amount of $8,000.
(6) In 1994, Mr. Collard received a performance bonus of $100.
OPTION GRANTS
- -------------
The following table sets forth certain information regarding options
to purchase shares of Common Stock issued to Executive Officers of the
Company during the fiscal year ended December 31, 1996:
-9-
OPTION GRANTS IN 1996
Number of % of Total
Securities Options
Underlying Granted to
Options Employees Exercise Expiration
Name Granted in 1996 Price Date
---- ------- ------- ----- -----
Joseph F. Dudziak 25,000(1) 10.8% $2.50 09/30/06
Bart K. Valdez 30,000(2) 13.0% $2.50 09/30/96
____________
(1) As originally granted, options to purchase 5,000 shares vest each year
Mr. Dudziak remains in the employ of the Company, beginning September
30, 1997 and continuing each September 30 thereafter. Once vested,
the options are exercisable for a ten year period. On August 25, 1997,
Mr. Dudziak's options were modified in the following respects: (a)
such options are immediately vested and (b) the exercise price of the
options was reduced to $1.81 per share.
(2) As originally granted, options to purchase 6,000 shares vest each year
Mr. Valdez remains in the employ of the Company, beginning September
30, 1997 and continuing each September 30 thereafter. Once vested,
the options are exercisable for a ten year period. On August 25,
1997, Mr. Valdez's options were modified in the following respects:
(a) such options are immediately vested; (b) the options are
exercisable for a period of ten years without regard to Mr. Valdez's
employment status with the Company and (c) the exercise price of the
options was reduced to $1.81 per share.
There were no options exercised during the last fiscal year by the
Company's executive officers, and no value has been ascribed to their
unexercised options at December 31, 1996 as there was no public market for
the Company's Common Stock.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
- --------------------------------------------------
The Company has entered into an employment agreement with Dr. Ruxin
for a period of five years commencing May 24, 1995. The initial term of
this agreement can be extended at the close of the second year for an
additional two years beyond the initial term (creating a term of seven
years from May 24, 1995). Under the agreement, Dr. Ruxin receives a salary
of $190,000 per year and certain other fringe benefits. Dr. Ruxin's
employment agreement includes a cost-of-living increase at the rate of 2
1/2% per annum, plus any other increase which may be determined from time
to time at the discretion of the Company's Board of Directors. Pursuant to
the employment agreement, Dr. Ruxin is provided with a car on such lease
terms to be determined by the Company, provided that the monthly operating
costs (including lease payments) to be paid by the Company will not exceed
$960. The agreement also includes a covenant not to compete for which Dr.
Ruxin was to be paid a lump sum of $115,000 on January 1, 1996. No
payments have been made in connection with the covenant not to compete.
The covenant not to compete will terminate the later of five years from the
date of the agreement or the term of the agreement; hence, the Company will
not receive any benefit from the covenant not to compete unless the
agreement is terminated prior to May 24, 2000. Dr. Ruxin has now agreed
that such payment will have to be
-10-
made only if and when the Company has sufficient cash flow, as determined
by the Board of Directors. Dr. Ruxin's employment under the employment
agreement may be terminated by Dr. Ruxin upon the sale by the Company of
substantially all of its assets, the sale, exchange or other disposition of
at least 40% of the outstanding voting shares of the Company, a decision by
the Company to terminate its business and liquidate its assets, the merger
or consolidation of the Company with another entity or an agreement to such
a merger or consolidation or any other type of reorganization, or if the
Company makes a general assignment for the benefit of creditors, files for
voluntary bankruptcy or if a petition for the involuntary bankruptcy of the
Company is filed in which an order for relief is entered and remains in
effect for a period of thirty days or more, or if the Company seeks,
consents to, or acquiesces in the appointment of a trustee, receiver or
liquidator of the Company or any material part of its assets. Dr. Ruxin's
employment under the employment agreement also may be terminated by reason
of Dr. Ruxin's death or disability or for cause as set forth in the
employment agreement. If the agreement is terminated by the Company for
any reason other than cause or permanent disability, the Company must pay
Dr. Ruxin a lump sum severance payment of $2.5 million.
On May 24, 1995, the Company also entered into a five year employment
agreement with William J. Collard which contains the same extension
provision and reasons for termination as does Dr. Ruxin's agreement, and
provides for an annual salary of $100,000. Mr. Collard's employment
agreement includes a cost-of-living increase at the rate of 2 1/2% per
annum, plus any other increase which may be determined from time to time at
the discretion of the Company's Board of Directors. Mr. Collard's
agreement also contains a covenant not to compete, with payments of
$100,000 for the covenant to have been made on January 1, 1996 and May 24,
1996, respectively. Aggregate payments of $200,000 were made as follows:
$25,000 in December, 1995; $75,000 in January, 1996; and $100,000 in May,
1996. The covenant not to compete will terminate the later of five years
from the date of the agreement or the term of the agreement; hence, the
Company will not receive any benefit from the covenant not to compete
unless the agreement is terminated prior to May 24, 2000. If Mr. Collard's
agreement is terminated by the Company for any reason other than cause or
permanent disability, the Company must pay him a lump sum severance payment
of $2.5 million. Mr. Collard also receives a car allowance of $450 per
month. Mr. Collard received approximately $8,000 for vacation related
expenses during 1996. During 1997, Mr. Collard received approximately
$11,000 for tax expenses related to the May 1995 Wyndgate merger.
The Company also has an employment agreement with Gerald F. Willman,
Jr. which contains an extension provision for the term of the agreement and
reasons for termination similar to those of Dr. Ruxin and Mr. Collard with
an annual salary of $95,000, except the initial term is for three years
commencing May 24, 1995 and the extension is for an additional two years.
Mr. Willman's employment agreement includes a cost-of-living increase at
the rate of 2 1/2% per annum, plus any other increase which may be
determined from time to time in the discretion of the Company's Board of
Directors. The employment agreement requires that if he is terminated by
the Company for any reason other than cause or permanent disability, the
Company must pay Mr. Willman a lump sum severance payment of $1.0 million.
Mr. Willman received approximately $8,000 for vacation related
-11-
expenses in 1996. During 1997, Mr. Willman received approximately $25,000
for tax expenses related to the May 1995 Wyndgate merger.
On June 28, 1995, the Company entered into a two year employment
agreement with Joseph F. Dudziak for a two year term pursuant to which Mr.
Dudziak earns a salary of $105,000 per year. Mr. Dudziak's employment
agreement contains the same reasons for termination as the other employment
agreements described above, but does not include the same extension
provision or an annual cost-of-living increase. However, if increased, his
salary may not be decreased thereafter during the term of the agreement
without Mr. Dudziak's consent. If Mr. Dudziak's employment is terminated
by the Company for any reason other than for cause or permanent disability,
the Company is required to pay Mr. Dudziak his salary and benefits for the
full two years. Mr. Dudziak is entitled to certain incentive compensation
based on the Company's pre-tax profits for 1996, which were not met. The
agreement also grants Mr. Dudziak options to purchase an aggregate of
100,000 shares of the Company's Common Stock. Subject to early vesting in
certain circumstances, the options vest over a five year period at the rate
of 20% per year and are exercisable at $2.45 per share, which was the
estimated fair value of the shares at the time of grant. Mr. Dudziak
receives a car allowance of $400 per month. In May, 1997, the Company paid
Mr. Dudziak approximately $25,000 for moving expenses incurred in 1995 in
connection with his employment by the Company. The employment agreement
with Mr. Dudziak has expired; however, he is continuing to be employed
under the same terms.
COMPENSATION OF DIRECTORS
- -------------------------
STANDARD ARRANGEMENTS. Members of the Company's Board of Directors
are not compensated in their capacities as directors. However, the Company
reimburses all of its officers, directors and employees for accountable
expenses incurred on behalf of the Company.
OTHER ARRANGEMENTS. The Company has no other arrangements pursuant to
which any director of the Company was compensated during the year ended
December 31, 1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1996, Gordon Segal, Michael I. Ruxin, William J. Collard,
Joseph F. Dudziak and Bart K. Valdez, officers and directors of the
Company, purchased 10% Notes in the principal amounts of $25,000, $25,000,
$60,000, $50,000 and $11,200, respectively, in the 10% Note offering by the
Company. Drs. Segal and Ruxin and Messrs. Collard, Dudziak and Valdez were
also issued warrants to purchase 6,250, 6,250, 15,000, 12,500 and 2,800
shares of the Company's Common Stock, respectively, at $3.75 per share in
connection with their purchase of the 10% Notes. The purchases of the 10%
Notes were on the same terms and conditions as purchases by non-affiliates.
In March 1997, Drs. Segal and Ruxin, and Messrs. Collard and Valdez were
repaid the principal amounts of their 10% Notes, plus interest thereon.
Joseph F. Dudziak converted his
-12-
10% Note, plus the accrued interest thereon, into a total of 14,414 shares
of Common Stock ($3.75 per share).
The Board of Directors of the Company has adopted resolutions that no
business transaction, loan or advance will be made by the Company to any
officer, director or holder of more than 5% of the Company's Common Stock,
or any affiliate thereof, unless it has been established that a bona fide
business purpose exists, that all future transactions between the Company
and its officers, directors, or principal shareholders, or any affiliate of
any of such person, must be approved or ratified by a majority of the
disinterested directors of the Company, and the terms of such transaction
must be no less favorable to the Company than could have been realized by
the Company in an arms-length transaction with an unaffiliated person. The
Company believes that all ongoing transactions with the Company's
affiliates are on terms no less favorable than could be obtained from
unaffiliated third parties.
The Board of Directors of the Company has also adopted a resolution
that provides that the areas of business in which the Company shall be
interested for the purpose of the doctrine of corporate opportunities shall
be the business of information management software products and services.
Any business opportunity which falls within such areas of interest must be
brought to the attention of the Company for acceptance or rejection prior
to any officer or director of the Company taking advantage of such
opportunity. Any business opportunity outside such areas of interest may
be entered into by any officer or director of the Company without the
officer or director first offering the business opportunity to the Company.
The Chairman and Chief Executive Officer of the Company, Dr. Michael
I. Ruxin, is a guarantor of certain capital lease obligations of the
Company totalling approximately $1.1 million. The sale of DataMed will
result in the termination of a portion of such capital lease obligations
and NMRO and/or SAT will enter into new capital lease agreements. As a
result, Dr. Ruxin will be released from his guarantees of approximately
$500,000 on capital lease obligations.
On May 5, 1995, the shareholders of the Company approved a loan in the
amount of $161,500, with interest at 8% per annum, made by the Company to
Sonya M. Levine, the wife of Michael I. Ruxin, in 1994, which had not
previously been approved by the shareholders in accordance with Colorado
corporate law. Effective June 30, 1995, the Company forgave Ms. Levine's
note in consideration of the forgiveness of a note payable by the Company
to Dr. Ruxin in the same amount and at the same interest rate as Ms.
Levine's note.
In June 1995, the Company agreed to pay approximately $35,000 in tax
liability incurred by the shareholders of The Wyndgate Group, Ltd. (an "S"
corporation) in connection with the merger between The Wyndgate Group, Ltd.
and the Company. This amount was paid in 1997.
-13-
PROPOSAL ONE
AMENDMENT OF THE ARTICLES OF INCORPORATION
TO PROVIDE FOR CLASSIFICATION OF DIRECTORS AND ELECTION FOR
STAGGERED TERMS
The Company's By-Laws presently provide that the directors shall be
elected at each annual meeting of the shareholders, which is to be held
annually. Presently there are four directors and the Board is not divided
into classes. The Board of Directors has passed and is presenting for
shareholder approval a proposal to approve an amendment to the Company's
Articles of Incorporation to cause the Board to be classified.
If Proposal One is approved, the Board of Directors will be divided
into Class I, Class II and Class III Directors, with one class to be
elected every year. The Class I Director or Directors terms of office
would expire at the first Annual Meeting of Shareholders to be held in
1998; the term of office for the Class II Director or Directors would expire
at the second Annual Meeting of Shareholders to be held in 1999; and the
terms of the Class III Directors would expire at the third Annual Meeting
of Shareholders to be held in 2000. Upon the expiration of the initial
staggered terms, Directors would be elected for three year terms to succeed
those Directors whose terms expire.
It is therefore proposed that the Company's Articles of Incorporation
be amended to add a new Article VIII which would read as follows:
ARTICLE VIII
BOARD OF DIRECTORS
The Board of Directors shall be divided into three classes
on the dates and in the manner set forth below. Each class of
Directors shall consist, as nearly as possible, of one-third of
the total number of Directors. The Class I Directors term shall
expire at the first Annual Meeting of Shareholders to be held in
1998; the Class II Directors term shall expire at the second
Annual Meeting of Shareholders to be held in 1999; the Class III
Directors term shall expire at the third Annual Meeting of
Shareholders to be held in 2000. Upon expiration of the initial
staggered terms, Directors will be elected for three years to
succeed those Directors whose terms expire. Notwithstanding the
foregoing, and except as otherwise required by law, whenever the
holders of any one or more series of Preferred Stock shall have
the right, voting separately as a class, to elect one or more
directors of the Company, the terms of the director or directors
elected by such holders shall expire at the next succeeding
annual meeting of shareholders. Vacancies which occur during the
year may be filled by the Board of Directors to serve for the
remainder of the initial term of each class.
-14-
In the event this Proposal Five is approved, the amendment to the
Company's Articles of Incorporation relating to the classification of
Directors will become effective upon the filing with the Secretary of State
of the State of Colorado of a certificate with respect to such amendment.
INTEREST OF MANAGEMENT IN MATTERS TO BE VOTED UPON
The present directors of the Company may have longer terms of office
if Proposal One is adopted.
EFFECTS OF ADOPTION OF PROPOSAL ONE
Anti-Takeover Effects. The Board of Directors presently consists of
four members. Under the proposal, it will be divided into three classes and
one Director will be elected in each Class, except for Class III, which
shall have two Directors. Each Class will have a term of one to three years.
This proposal, if adopted, could have the effect of discouraging, or
making it more difficult to effect a merger, tender offer, the assumption
of control by a holder of a large block of the Company's Common Stock, or
the removal of incumbent management, because the proposed amendment would
require a longer period of time to change the Board even if a majority of
the shareholders desired a change. This effect could occur even if such
actions would be favorable to the interest of the shareholders. However,
the Board is not aware of any efforts to obtain control of the Company, and
the proposal of this measure is not in response to any such efforts.
In addition, the Company's Articles of Incorporation prohibit
cumulative voting in the election of Directors. The prohibition on
cumulative voting, the proposed separate classification of Directors and
the staggered terms of Directors could have the effect of discouraging
possible take-overs of the Company.
MANAGEMENT RECOMMENDATION
Management recommends approval of Proposal One. Management believes
the proposal will help assure continuity and stability in the Board
membership. The Board of Directors believes that the classification of
the Board of Directors effected by the proposed amendment will serve the
best interests of the Company and its shareholders.
REQUIRED VOTE
The affirmative vote of a majority of the shares of Company Common
Stock issued and outstanding is required to approve Proposal One. The
Officers and Directors have advised the Company that they plan to vote
their shares of Company Common Stock in favor of Proposal One.
-15-
PROPOSAL NUMBER TWO
ELECTION OF FOUR DIRECTORS
The Company's Board of Directors intends to recommend the election to
the Board of the four nominees listed below. If Proposal One is approved
and the Company's Articles of Incorporation are amended to provide for a
classified Board of Directors with staggered terms, the Directors would be
assigned to the classes specified and for the terms so indicated, to hold
office until the Annual Meeting of Shareholders in the year indicated
and/or until their successors are elected and qualified or until their
earlier death, resignation or removal. If Proposal One is not approved,
each of the Directors would hold office until the next Annual Meeting of
Shareholders and/or until their successors are elected and qualified or
until their earlier death, resignation or removal.
All members of the present Board of Directors have been nominated for
reelection to the Board. The persons named as "proxies" in the enclosed
form of Proxy, intend to vote for the four nominees for election as
Directors unless otherwise instructed in such proxy. If at the time of the
Annual Meeting, any of the nominees named below should be unable to serve,
which event is not expected to occur, the discretionary authority provided
in the Proxy will be exercised to vote for such substitute nominee and
nominees, if any, as shall be designated by the Board of Directors.
In the election of directors, that number of candidates equaling the
number of directors to be elected, having the highest number of votes
cast in favor of their election, are elected to the board of directors.
The Officers and Directors have advised the Company that they plan to
vote their shares in favor of each of the nominees set forth below.
NOMINEES
The following table sets forth the name and age of each nominee for
Director, indicating all positions and offices with the Company presently
held by him, the period during which he has served as such, and the class
and term for which he has been nominated, assuming for these purposes the
approval by the shareholders of Proposal One and the related amendment of
the Articles of
Incorporation:
CLASS I NOMINEE - TERMS EXPIRING AT THE
ANNUAL SHAREHOLDERS MEETING IN 1998
Name Age Position Year First Director
- ---- --- -------- -------------------
Gordon E. Segal, M. D. 45 Director 1997
-16-
CLASS II NOMINEE - TERMS EXPIRING AT THE
ANNUAL SHAREHOLDERS MEETING IN 1999
Name Age Position Year First Director
- ---- --- -------- -------------------
Gerald F. Willman, Jr. 40 Secretary 1995
CLASS III NOMINEE - TERMS EXPIRING AT THE
ANNUAL SHAREHOLDERS MEETING IN 2000
Name Age Position Year First Director
- ---- --- -------- -------------------
Michael I. Ruxin, M.D. 51 Chief Executive 1989
Officer
William J. Collard 56 Secretary/Treasurer 1995
and Wyndgate
President
If Proposal One is approved by the Shareholders, the Board of
Directors will amend the Bylaws to provide for classification of the Board.
Additional information regarding the nominees for directors and the
executive officers, compensation of executive officers, related party
transactions involving the Company and the directors and executive officers
and their affiliates, compliance with Section 16(a) of the 1934 Act and
information regarding Board committees and meetings of the Board and
committees can be found beginning on page 5 of this Proxy Statement.
VOTE REQUIRED
Each shareholder entitled to vote at the meeting has the right to vote
the number of shares held by him for each of the four (4) director
nominees. Election of the director nominees requires the affirmative vote
of a majority of the votes cast at the Annual Meeting.
PROPOSAL NUMBER THREE
SALE OF DATAMED INTERNATIONAL DIVISION
The Company has entered into an Asset Purchase Agreement (the
"Agreement"), subject to shareholder approval and other conditions, with
National Medical Review Offices, Inc. ("NMRO"). Under the terms of the
Agreement, the Company will sell NMRO certain assets of the Company's
-17-
DataMed International division ("DataMed"). NMRO has advised the Company
that it intends to resell DataMed to Substance Abuse Technology, Inc.
("SAT"), a publicly held corporation, following closing of the Agreement.
In consideration for DataMed assets it is purchasing, NMRO will (i)
pay the Company $1.2 million in cash, (ii) assume certain capital lease
obligations, (iii) assume certain accounts payable and accrued expenses
related to DataMed and (iv) be assigned certain accounts receivable related
to DataMed. The Company and Michael I. Ruxin will agree that neither will
compete in the substance abuse testing business, and that each will
maintain confidentiality of the trade secrets of such business and will
agree not to solicit NMRO's employees. The Company expects that NMRO
and/or SAT will hire certain of DataMed's employees, including Bart K.
Valdez, Chief Financial Officer of the Company and Director of Operations
for the DataMed, following the closing.
The terms of the Agreement with NMRO resulted from arm's length
negotiations between representatives of the Company and representatives of
NMRO.
NMRO is a privately held corporation engaged exclusively in substance
abuse testing. Its corporate offices are located at 5750 Wilshire
Boulevard, Suite 275, Los Angeles, California 90036, telephone number
(800) 733-6676. It has regional offices located in Overland Park, Kansas
and Bloomington, Minnesota.
SAT is a publicly held corporation with corporate offices located at
4517 N.W. 31st Avenue, Ft. Lauderdale, Florida 33309, telephone number
(954)739-9600.
DATAMED
The Company is comprised of two operating divisions, Wyndgate
Technologies ("Wyndgate") and DataMed. Wyndgate designs, develops, markets
and supports health care information management software products for blood
banks, hospitals and other facilities. Revenues are derived from the
licensing of software, the provision of consulting and other value-added
support services and the sale of related hardware and software obtained
from vendors. DataMed is in the business of substance abuse testing and
medical surveillance management services, including medical review officer
functions, data management, record storage and coordination of all
substance abuse testing program elements. Revenues for DataMed are derived
from the provision of substance abuse testing management services and the
coordination of laboratory and collection site services for substance abuse
tests. The Company, through its operating divisions, serves international,
national and regional clients in a variety of industries.
Founded in 1989, DataMed manages and markets a variety of services
that are designed to assist companies with administering substance abuse
testing programs. Due to federal regulations, employers involved in
commercial transportation must comply with requirements mandating substance
abuse testing of employees in safety sensitive positions and substance
abuse awareness education for supervisors and employees. Additionally,
federal substance abuse testing
-18-
requirements mandate the use of a Medical Review Officer ("MRO") to
evaluate the quality and accuracy of a testing laboratory and determine
legal versus illegal use of controlled substances. DataMed provides
customized substance abuse testing management services to companies.
DataMed coordinates and actively manages the specimen collection process,
the laboratory testing process, the MRO review process, the process of
random testing, the blind sample quality control process, the substance
abuse testing process and the data management process, including compliance
reporting and record storage. DataMed arranges for specimens to be tested
by a qualified laboratory and monitors the performance of: testing
laboratories; specimen collection providers; MROs; and the overall quality
of information that is received, stored and reported. DataMed currently
provides substance abuse testing management services to a number of clients
worldwide.
In the Company's experience, many substance abuse testing programs for
Fortune 1000 companies are internally managed. Companies contract with
laboratory and collection sites and utilize internal resources to manage
substance abuse processes. However, the Company believes that some
companies appear to be shifting to outsourced substance abuse program
management in an attempt to reduce overall costs as well as to increase
overall quality.
The current market for the substance abuse testing industry consists
of the regulated markets and the unregulated markets. The regulated
markets include all employees that fall under federal regulations for
commercial transportation, with the largest concentration in the motor
carrier industry. Additionally, regulated employees are subject to random
substance abuse testing, post-accident testing and "reasonable suspicion"
testing. The unregulated market primarily consists of companies testing
new employees.
Currently, the specimen substance abuse testing industry has several
large nationally known laboratories, such as Quest Diagnostics, Inc., Lab
Corp. and SmithKline-Beecham, offering drug testing lab analysis.
The U.S. Department of Transportation ("DOT") has ruled that
activities involving the management of MRO services or activities that give
the appearance of any type of financial arrangement between an MRO and a
laboratory are prohibited from being conducted by the laboratory. The net
effect of this ruling is to limit the laboratory's ability to provide drug
testing management services. Therefore, with respect to testing performed
under DOT regulations (which is the standard by which all substance abuse
testing programs are measured), the laboratory cannot provide full service
substance abuse testing program management and meet DOT requirements.
Companies that manage their own substance abuse testing programs are
required to remain abreast of changing DOT regulations and their
implications as well as maintain significant amounts of data that must be
processed, audited and stored. A significant amount of work is required in
administering substance abuse testing programs, and these programs are
complex to manage. The Company believes that these factors have created
a market opportunity for third-
-19-
party administrators or program management companies since it appears some
companies are moving to outsource substance abuse testing program
management.
DataMed's service allows a company that no longer wants to micro-manage
its substance abuse program to outsource the administration of its
entire substance abuse program. DataMed's goal has been to help a company
increase total program quality and decrease total program costs. DataMed
coordinates or actively manages the specimen collection process, the
laboratory testing process, the medical review officer process, random
testing process, the blind sample quality control process, the substance
abuse testing process and the data management process, including compliance
reporting and record storage. DataMed's services can be purchased
independently or as a management package. DataMed has two basic levels of
management services: ProScreen(TM) and ProScreen Plus(TM).
ProScreen(TM) is DataMed's program coordination service and is
designed to attract the medium to large customer operating in either a
regulated or unregulated environment. ProScreen(TM) is a solution for
clients that realize their programs are large enough to have become a
burden, but small enough not to warrant a full time employee. DataMed,
through its ProScreen(TM) service, offers companies a limited range of
"pro-active" management services designed to ease the burden of an
internally managed program. ProScreen(TM) can also be an entry point for
a client that wants to eventually move to a ProScreen Plus(TM) level of
service.
ProScreen Plus(TM) is a customized service designed to attract Fortune
1000 clients who have decided to outsource the management of their entire
program. Through its ProScreen Plus(TM) product, DataMed focuses its
efforts on helping the large organization concentrate on its core business,
increase program quality and reduce total program costs.
A customer may have programs that are federally regulated, unregulated
or both. Fortune 1000 customers tend to have both regulated and
unregulated programs. The Federal Highway Administration oversees the
largest percentage of regulated testing. Companies regulated by the
Federal Aviation, Transit and Railroad Administrations (and other federal
organizations) are also subject to federally mandated programs.
Unregulated testing accounts for the largest market segment and is driven
by company policy.
International companies are also potential customers. DataMed
currently provides substance abuse testing management services to a number
of companies internationally. However, the management of the Company
believes that the international market is expected to grow at a slower rate
due to lack of governmental regulations. Department of Transportation
regulations adopted after the passage of The North American Free Trade
Agreement require Mexican and Canadian transportation companies using U.S.
road systems in cross-border trade to comply with U.S. Department of
Transportation regulations, including substance abuse testing.
-20-
CONSIDERATION REGARDING THE PROPOSED SALE
From inception to June 30, 1997, the Company incurred cumulative net
losses of approximately $11.1 million. DataMed has incurred cumulative
losses of approximately $6.1 million through June 30, 1997, which includes
a loss of approximately $880,000 for the six months ended June 30, 1997.
During late 1996 and early 1997, the Company terminated contracts with
certain small accounts in an effort to make DataMed more efficient.
Despite these efforts, however, the Company continued to incur losses from
DataMed of approximately $100,000 to $150,000 per month, which management
realized could not be reduced or avoided while continuing to service
DataMed's customer base. As a result, in January 1997, the Company began
to more seriously consider indications of interest it received from others
regarding the possible sale of the DataMed.
Because the Company's marketing and sales efforts are and will
continue to be focused primarily on current and future Wyndgate products
and services, revenues from DataMed were expected to become a smaller
portion of revenues in relation to total revenues over the long term. The
Directors believe that the sale of DataMed furthers the Company's
strategic goals and is in the best interests of the Company's shareholders.
On April 29, 1997, the Company received an offer for DataMed from NMRO
for $750,000 and assumption of certain liabilities. The amount of the
offer was deemed to be insufficient by the Company, and therefore was not
accepted and expired by its terms on May 2, 1997.
On June 16, 1997, the Board met to consider offers to purchase
DataMed which it had received from NMRO and SAT. NMRO's offer provided for
the payment of $1.025 million at closing and the assumption of unspecified
obligations in exchange for DataMed's customer list, all accounts
receivable, prepaid expenses, furniture, fixtures and equipment and certain
other assets. The offer from SAT was for $1.05 million, payable at
closing, and the assumption of current trade payables in exchange for the
assets comprising DataMed. After considering both offers, the Board
directed management to communicate with NMRO and SAT regarding certain
questions the Board had pertaining to the specific assets to be acquired
and specific liabilities to be assumed, including certain capital lease
obligations, of DataMed.
At its Board meeting on June 18, 1997, the Board considered new and
more specific offers from NMRO and SAT. NMRO's new offer for DataMed's
assets was $1.2 million payable at closing, and the assumption of accounts
payable, capital leases, the remaining portion of DataMed's current office
lease, accounts payable related to DataMed, and accrued payroll and accrued
vacation pay for DataMed employees, the majority of which would be employed
by NMRO. NMRO's offer also provided that the Company would enter into
non-compete and confidentiality agreements related to the substance abuse
testing business and an agreement not to solicit NMRO's employees. SAT's
new offer was for $1.05 million payable at closing and 200,000 "stock
grants" in exchange for all accounts payable, capital leases, the lease for
the current premises used by DataMed and DataMed's accounts receivable.
Both NMRO and SAT were willing to assume DataMed's operations until an
agreement could be consummated. Both NMRO and SAT may
-21-
employ Bart K. Valdez, Acting Chief Executive Officer for the Company and
Director of Operations for DataMed. After consideration of both offers,
the Board directed the Chairman and CEO of the Company to contact the
principals of both NMRO and SAT and to communicate certain additional
questions which the Board had identified, as well as the following, which
the Board determined to be important to its final decision:
(i) The purchaser would purchase DataMed's assets for the purchase
price agreed to, and there would be no reduction in the purchase price if
DataMed customers did not subsequently enter into contracts with the
purchaser for substance abuse testing services. The Board considered this
important because DataMed's current contracts with its customers are not
assignable, and therefore each customer would have the option of
contracting with the purchaser of DataMed's assets or another company for
substance abuse testing services.
(ii) The demonstration of an ability to pay the purchase price,
including the deposit of some portion of the purchase price in an escrow
account prior to closing.
(iii) Assumption of the operations of DataMed by July 11, 1997, or
sooner if possible.
The Board of Directors met again on June 20, 1997. The Board received
a new offer from SAT, increasing its offer to $1.1 million in cash and
250,000 "stock grants," which the Board had been advised by SAT meant the
issuance of restricted stock to be issued. The Board compared SAT's offer
to NMRO's offer of $1.2 million, and considered whether the 250,000 shares
of SAT stock substantially increased the purchase price. In this regard,
the Board reviewed information concerning the number of shares of common
stock outstanding of SAT, recent trading price of SAT's common stock, and
recent daily trading volume, and the financial condition of SAT as reported
in SAT's report for the nine months ended December 31, 1996 filed with the
Securities and Exchange Commission, which showed a cumulative loss in
excess of $48 million.
The Board of Directors determination to accept NMRO's offer to
purchase DataMed was based upon consideration of the following principal
factors:
(i) NMRO's reputation in the substance abuse testing industry and the
fact that NMRO had been engaged solely in that business for eight years;
(ii) NMRO's current market position in the substance abuse testing
industry, and the Board's belief that more of DataMed's customers would
enter into subsequent contracts for substance abuse testing services with
NMRO because of its position in the industry;
(iii) The unaudited financial information which had been provided
to the Company by NMRO showed that NMRO had retained earnings. SAT, on the
other hand, showed a cumulative loss in excess of $48 million as of
December 31, 1996. The Board believed NMRO would be better able to service
DataMed's customer contracts and to fund DataMed's expected losses.
-22-
(iv) NMRO's agreement to assume the risk that DataMed customers would
enter into subsequent contracts for substance abuse testing services with
NMRO after the transaction was completed, and that there would be no
reduction in the purchase price to be paid for DataMed if DataMed's
customer(s) did not subsequently contract with NMRO for such services;
(v) NMRO agreed to assume the operations of DataMed as of June 30,
1997; and
(vi) NMRO agreed to assume and pay accounts payable and certain
accrued expenses incurred by DataMed as of June 30, 1997, and assume
certain capital lease obligations.
On June 20, 1997, the Company sent a response to NMRO's June 18, 1997
offer which modified certain of the terms in NMRO's offer and contained
additional provisions, all of which were agreed to by NMRO. Together,
NMRO's June 18, 1997 letter and the Company's June 20, 1997 letter
comprised a letter of intent (the "Letter of Intent"). Included in the
Company's letter was a modification to the "Exclusive Dealings" paragraph
of NMRO's letter which stated that, as a public company, the Company had a
fiduciary duty to its shareholders to obtain the best offer possible for
DataMed, taking into account the ability of the proposed purchaser to
provide satisfactory services that DataMed is under contract to perform,
as well as the total consideration to be received.
On June 26, 1997, the Company received a new, verbal offer from SAT
for $1.6 million plus the assumption of accounts payable and other
scheduled liabilities. The Company advised NMRO of the new offer from SAT,
and was advised by NMRO that NMRO could not match the amount offered by
SAT. NMRO further advised the Company that NMRO would initiate litigation
against the Company and the Board of Directors for breach of the Letter of
Intent if the Company accepted the $1.6 million offer from SAT. The Board
of Directors met on June 26, 1997, and voted to accept SAT's offer,
provided that SAT would agree to indemnify the Company and the Board of
Directors against any and all costs and expenses incurred in connection
with any litigation instituted by NMRO arising out of the Letter of Intent
and certain other conditions. SAT declined to proceed with its offer in
light of the Company's indemnification requirement.
The Company had retained the services of an independent accounting
firm to value the DataMed Division and their valuation of DataMed was less
than the purchase price of $1,200,000 obtained by the Company from NMRO.
Because of the restrictions in the contract between the Company and the
accounting firm, the specifics of the valuation report may not be
disclosed.
On July 7, 1997, the Company and NMRO entered into an Interim
Management Agreement (the "Management Agreement") which provides for NMRO
to control and direct the operations and business of DataMed from July 1,
1997 to the date the DataMed sale is closed. The Management Agreement is
summarized below. On July 8, 1997, the Chairman and CEO of the Company was
notified by the President of NMRO that NMRO was assigning it rights and
obligations under the Management Agreement to SAT, which assignment
occurred on July 15, 1997. The Company received a copy of a press release
from SAT which stated that SAT had entered into an agreement
-23-
to purchase DataMed from NMRO for $1.6 million, and that NMRO would serve
as SAT's sole source provider of medical review officer services for a
period of five years.
All negotiations between the Company and NMRO and the Company and SAT
were arms-length.
ASSET PURCHASE AGREEMENT
On August 18, 1997, the definitive Asset Purchase Agreement was signed
by the Company and NMRO. The following is a summary of what the Company
believes are material features of the Asset Purchase Agreement.
Shareholders are advised to carefully read the Asset Purchase Agreement
attached hereto as Exhibit A.
PURCHASED ASSETS. NMRO will purchase from the Company all of the
assets and assume certain liabilities associated with DataMed at June 30,
1997. The assets include accounts receivable, accrued accounts receivable
(unbilled revenue), pre-paid expenses, customer list of DataMed, customer
contracts, furniture, fixtures and equipment, names, telephone numbers,
trade names and copyrighted materials. Included in the obligations assumed
by NMRO are accounts payable (excluding intercompany payables), certain
accrued expenses not to exceed approximately $127,000, capital leases
of approximately $500,000, a new lease on approximately 10,500 square feet
of office space in which DataMed's operations are located, accrued payroll
and vacation pay for DataMed employees and certain sales commissions.
PURCHASE PRICE. In consideration for the Assets, NMRO shall pay
$1,200,000 at closing, $600,000 of which has been placed in an escrow
account.
FINANCING OF SALE. NMRO has advised the Company that it received the
$600,000 which has been placed in escrow from SAT. The additional $600,000
of the purchase price will also be paid by SAT.
EMPLOYEES. At Closing, NMRO or SAT will offer to employ certain
employees of DataMed then actively employed by the Company at compensation
levels to be negotiated, provided that NMRO or SAT may make changes in job
description and other terms to meet operational objectives. Included in
the employees expected to be employed is Bart K. Valdez, Chief Financial
Officer and Director of Operations of DataMed.
CONDITIONS. Each party's obligations pursuant to the Asset Purchase
Agreement are subject to certain conditions, including the consent of the
Company's shareholders.
TERMINATION. The Asset Purchase Agreement may be terminated by
mutual consent of both parties prior to the Closing Date. The Asset
Purchase Agreement may also be terminated by either of the parties on the
Closing Date in the event that all of the conditions precedent to a party's
obligation to consummate the Closing have not been satisfied on or before
the Closing Date.
-24-
The Asset Purchase Agreement may be terminated by the Company in the
event (i) a voluntary or involuntary proceeding involving NMRO is commenced
under the United States Bankruptcy Code or if NMRO makes or commences
negotiations for partial or complete assignment of its assets for the
benefit of creditors; (ii) a receiver, custodian, examiner or trustee is
appointed for any of NMRO's property or assets; (iii) NMRO is terminated,
liquidated or dissolved; (iv) in the event the Company's shareholders do
not approve the sale of DataMed within the time required, but only if the
Company is not in breach of any material duty or obligation imposed upon
the Company under the Asset Purchase Agreement and no event has occurred
which with the giving of notice or the passage of time would constitute a
breach by Company of any such material duty or obligation; (v) NMRO
defaults in the performance of any material duty or obligation imposed on
it pursuant to the Asset Purchase Agreement, which default is not corrected
after written notice is given to NMRO by the Company. If the Company
terminates the Asset Purchase Agreement as a result of any of the
foregoing, except the failure of the Company's shareholders to approve the
Asset Purchase Agreement, or if the Company terminates the Asset Purchase
Agreement following the failure to satisfy any of its conditions precedent
set forth therein, then the Asset Purchase Agreement and the Management
Agreement will terminate, the Company will not be obligated to reimburse
NMRO for its Expenses (as defined in the Management Agreement), and the
Company will assume all rights (including rights to accounts receivable of
DataMed) and all obligations and liabilities (including accounts payable)
relating to the operation of DataMed after the date of such termination.
If the Company terminates the Asset Purchase Agreement because the
Company's shareholders do not approve the Asset Purchase Agreement, then
the Company retains all rights and all obligations and liabilities relating
to the operation of DataMed prior to the Closing, and the Company will
reimburse NMRO for its Expenses, as defined in the Management Agreement.
The Asset Purchase Agreement may be terminated by NMRO in the event
(i) a voluntary or involuntary proceeding against the Company is commenced
under the United States Bankruptcy Code or if the Company makes or
commences negotiations for partial or complete assignment of its assets for
the benefit of creditors; (ii) a receiver, custodian, examiner or trustee
is appointed for any of the Company's property or assets; (iii) the Company
is terminated, liquidated or dissolved, except if a third party expressly
assumes the obligations and succeeds to the interests of the Company under
the Asset Purchase Agreement; (iv) in the event the Company's shareholders
do not approve the Asset Purchase Agreement and the transactions
contemplated therein within the time required, but only if NMRO is not then
in breach of any material duty or obligation imposed upon NMRO, and no
event has occurred which the giving of notice or the passage of time would
constitute a breach by NMRO of any such duty or obligation; or (v) the
Company defaults in the performance of any material duty or obligation
imposed on it pursuant to the Asset Purchase Agreement, which default is
not corrected after written notice is given to the Company by NMRO. If
NMRO terminates the Asset Purchase Agreement as a result of any of the
foregoing or following the Company's failure to satisfy the conditions
precedent set forth in the Asset Purchase Agreement (except the requirement
to obtain the consents of other persons the Company will retain all rights
(including rights to accounts receivable of DataMed) and all obligations
and liabilities (including accounts payable) prior to the Closing, and the
Company will reimburse NMRO for its Expenses, as defined in the Management
Agreement.
-25-
INTERIM MANAGEMENT AGREEMENT. Effective at Closing, the existing
Interim Management Agreement (the "Management Agreement"), which was
entered into between the Company and NMRO on July 7, 1997, effective July
1, 1997, will terminate. Under the Management Agreement, NMRO assumed the
direction and control of the business and operations of DataMed. Under the
Management Agreement, NMRO has the right (i) to sell, assign, dispose of or
transfer any or all of the assets or contractual obligations of DataMed,
(ii) reduce DataMed's work force, (iii) assign or transfer DataMed's
administrative responsibilities, (iv) administer DataMed's contracts with
its customers, service providers, vendors or purchasers of services or
supplies, including negotiating, amending, maintaining and entering into
such contracts, but not the termination of any such contract, or any
service provided by DataMed to any customer, without the prior consent of
the Company, (v) to bill for services rendered by DataMed and collect
accounts receivable of the Company relating to DataMed and (vi) to fix,
change or relocate the offices used by DataMed. NMRO also agreed to pay
and discharge all Expenses (as defined below) incurred by NMRO in the
operation of DataMed.
As compensation for its management services, NMRO receives a monthly
management fee in an amount equal to the Net Income (which is defined as
Revenues less Expenses, as determined on an accrual basis in accordance
with generally accepted accounting principles consistently applied).
Revenues are defined as all fees and payments to which the Company is
entitled during the term of the Management Agreement in connection with the
provision of services or supplies by DataMed, investment income and any
other income collected by or on behalf of DataMed during the term of the
Management Agreement. Expenses are defined as all expenses which were
fully disclosed and recorded on DataMed's June 30, 1997 balance sheet and
profit and loss statement, expenses incurred in the ordinary course of
operation of DataMed during the term of the Management Agreement and other
non-reimbursed or insured expenses. Excluded from the definition of
Expenses in the Agreement are (i) interest on borrowed funds, (ii) legal
accounting and other consulting expenses incurred by the Company, (iii)
property taxes and taxes based on the Company's income, (iv) insurance
expenses (other than health insurance for employees providing services
exclusively to DataMed), (v) judgments and expenses of litigation (except
legal actions initiated by NMRO to collect accounts receivable of DataMed),
(vi) bank changes on Company accounts, (vii) employee bonuses or
compensation increases for employees of DataMed not disclosed on the June
30, 1997 profit and loss statement; (viii) compensation and benefits paid
to Company employees whose services are not rendered exclusively to
DataMed, (ix) intercompany charges or allocations for overhead and loans,
as mutually agreed by the parties, and (x) expenses paid by the Company
relating to DataMed's operations that are not disclosed and recorded in the
June 30, 1997 profit and loss statement of DataMed.
Based upon the historical financial results of DataMed, the Company
and NMRO anticipate that the operations of DataMed during the term of the
Management Agreement will result in a Net Loss. Any Net Loss is to be the
sole responsibility of NMRO if the Company's shareholders approve Proposal
Number Two to sell DataMed to NMRO. If the Management Agreement is
terminated by NMRO pursuant to NMRO's right to terminate (as described
below), then the Company shall be solely responsible for the Net Loss
incurred in the operation of DataMed. If the Company is
-26-
obligated to reimburse NMRO for any Net Losses, the Company has the right
to have the Net Loss reviewed and verified by the Company's independent
certified public accountants.
The Management Agreement may be terminated by the Company in the event
(i) a voluntary or involuntary proceeding involving NMRO is commenced under
the United States Bankruptcy Code or negotiations for partial or complete
assignment of its assets for the benefit of creditors are commenced, (ii)
a receiver, custodian, examiner or trustee is appointed for any of NMRO's
property or assets, (iii) NMRO is terminated, liquidated or dissolved, (iv)
NMRO defaults in the performance of any material duty or obligation under
the Management Agreement and such default is not cured within 30 days after
written notice thereof is provided to NMRO, and (v) if the Company's
shareholders do not approve the Proposal to sell DataMed to NMRO. The
Management Agreement may be terminated by NMRO in the event (i) the
Company's shareholders do not approve Proposal Number Two, (ii) a voluntary
or involuntary proceeding involving the Company is commenced under the
United States Bankruptcy Code, or the Company is terminated, liquidated or
dissolved (except if a third party expressly assumes the obligations and
succeeds to the interests of the Company thereunder), (iii) a receiver,
custodian, examiner or trustee is appointed for any of the Company's
property or assets or (iv) the Company defaults in the performance of a
material duty or obligation under the Management Agreement, which default
is not cured within 30 days of written notice of such default is provided
to the Company. If NMRO terminates the Management Agreement pursuant to
any such provision, the Company shall retain all rights (including rights
to accounts receivable of DataMed) and all obligations and liabilities
(including accounts payable) relating to the operation of DataMed, and will
reimburse NMRO's Expenses.
The Management Agreement also provides that the Company would assign
Bart K. Valdez, Chief Financial Officer of the Company and Director of
DataMed Operations, to provide services on behalf of DataMed. The
Management Agreement provides that Mr. Valdez may not allocate in excess of
eight hours per week of his time to the Company and shall not be required
to travel more than twice for the Company during the term of the Management
Agreement, each of which may be for a maximum of three days.
CONDITIONS. Each party's obligations pursuant to the Asset Purchase
Agreement is subject to certain conditions, including the consent of the
Company's shareholders.
CONFLICTS OF INTEREST
The Chairman and Chief Executive Officer of the Company, Dr. Michael
I. Ruxin, is a guarantor of certain capital lease obligations of the
Company totalling approximately $1.1 million. The sale of DataMed will
result in the termination of a portion of such capital lease obligations
and NMRO and/or SAT will enter into new capital lease agreements. As a
result, Dr. Ruxin will be released from his guarantees of approximately
$500,000 on capital lease obligations.
-27-
ADDITIONAL INFORMATION REGARDING THE COMPANY AND DATAMED
For additional information regarding the Company and DataMed, see the
Company's Annual Report delivered with this proxy statement, which includes
the Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996. Also enclosed for the information of shareholders is a
copy of the Company's Quarterly Report on Form 10-QSB, as amended, for the
quarter ended June 30, 1997.
BUSINESS OF THE COMPANY AFTER THE SALE OF DATAMED
Following the sale of DataMed, the Company's principal line of
business will be that of Wyndgate.
Even if the shareholders approve the sale of DataMed, the Company
expects to continue to incur losses until 1999, and possibly thereafter,
until its existing SAFETRACE(R) software product is fully implemented and
fully operational within the Company's customers information system
environment and until its transfusion management information system
software product, which is currently under development, is established in
its markets. Wyndgate has historically incurred, and expects to continue
to incur, losses related to its operations, including the continued costs
for research and development of new software products and the expansion of
sales and marketing resources. The timing and amounts of the Company's
expenditures will depend upon a number of factors, including the progress
of the Company's research and development process, the status and timing of
regulatory approval, the timing of market acceptance of the Company's
products, the level of support needed by the Company's customers to
implement the software products they license from Wyndgate, and the efforts
required to develop the Company's sales and marketing organization.
FEDERAL INCOME TAX CONSEQUENCES
The sale of DataMed is expected to result in a gain to the Company for
federal income tax purposes which may or may not be offset by the Company's
net operating loss (NOL) carryforwards. The sale of DataMed should not by
itself result in the imposition of federal income taxes upon the Company's
shareholders.
RIGHTS OF SECURITY HOLDERS
The proposed sale of DataMed does not result in material differences
in the rights of shareholders of the Company.
VOTE REQUIRED
Each shareholder entitled to vote at the meeting has the right to vote
the number of shares held for or against the Proposal. Approval of the
sale of DataMed requires the affirmative
-28-
vote of a majority of the Common Stock outstanding on the Record Date.
Consequently, the failure to return a properly executed proxy card or
failure to vote in person at the Shareholders Meeting will have the same
effect as a vote against the Proposal. Similarly, "broker non-votes" will
have the same effect as a vote against the Proposal.
RIGHTS OF DISSENTING SHAREHOLDERS
Under Article 113 of the Colorado Business Corporation Act (the
"Act"), all shareholders have dissenters' rights and are entitled to the
fair value of any or all of their shares of Common Stock as of the
consummation of the sale of DataMed, exclusive of any element of value
arising from the expectation or accomplishment of the sale of DataMed, by
following the procedures specified in the Act. The following is a summary
of the material provision of the Act, to be read in conjunction with the
full text of the Act. The following summary does not purport to be
complete and is qualified in its entirety by reference to Appendix A.
The Act provides that, in order to exercise dissenters' rights, a
shareholder must file a written notice of intent to demand payment to be
paid fair value for his or her shares of Common Stock with the Company at
its executive offices before the vote on the sale of DataMed is taken at
the Annual Meeting, must refrain from voting in favor of the sale, and must
continuously hold his or her shares of Common Stock through the
consummation of the sale. This written demand for payment will be
sufficient if it reasonably informs the Company as to the identity of the
shareholder and that the shareholder intends thereby to demand payment for
his or her shares. Voting against the sale of DataMed, abstaining from
voting or failing to vote with respect to the sale of DataMed will not
constitute a demand for payment within the meaning of the Act.
A demand for payment must be executed by or for the shareholder of
record, fully and correctly, as such shareholder's name appears on the
certificate for his shares of Common Stock. If the Common Stock is owned
of record in a fiduciary capacity, such as by a trustee, guardian, or
custodian, such demand must be executed by the fiduciary. If the Common
Stock is owned of record by more than one person, as in a joint tenancy or
tenancy in common, such demand must be executed by all joint owners. An
authorized agent, including an agent for two or more joint owners, may
execute the demand for payment for a shareholder of record; however, the
agent must identify the record owner or owners and expressly disclose the
fact that, in exercising that demand, he or she is acting as agent for the
record owner or owners.
A record owner, such as a broker, who holds Common Stock as a nominee
for others, may exercise the right of dissent with respect to the shares of
Common Stock held for all or less than all beneficial owners of such shares
of Common stock as to which he or she is the record owner by filing a
written demand to be paid fair value for the shares with the Company at its
executive offices before the vote on the sale is taken at the Annual
Meeting. In such case, the written demand must set forth the number of
shares covered by such demand. Where the number of shares is not expressly
stated, the demand will be presumed to cover all shares of Common Stock
outstanding in the name of such record owner.
-29-
After the consummation of the sale of DataMed, the Company will mail
a notice of the sale of DataMed to each shareholder who has properly made
demand for payment by following the above described steps (the "Dissenting
Shareholders"). The Notice ("Notice") will state where and when a demand
for payment shall be sent and certificates deposited by Dissenting
Shareholders in order to obtain payment, will supply a form for demanding
payment ("Demand") which includes a request for certification of the date
on which the Dissenting Shareholder or the person on whose behalf the
Dissenting Shareholder dissents, acquired beneficial ownership of the
shares and will be accompanied by a copy of the Act. Dissenting
Shareholders will have 30 days from the mailing date of the Notice to
submit to the Company their Demand and deposit their shares for payment.
A Dissenting Shareholder who fails to submit a Demand or fails to deposit
his or her shares, as required by the Notice, shall have no right under the
Act to receive payment for such shares.
If the Company has not completed the sale of DataMed and remitted
payment for shares within 60 days after the date set for submission of the
Demand and depositing of shares, the Company will return the shares that
have been deposited. After the deposited shares have been returned, the
Company may at any later time, send a new Notice regarding demand for
payment conforming to the Notice requirement set forth above.
Immediately upon the completion of the sale of DataMed, or upon
receipt of a Demand, if the sale of DataMed has already been completed, the
Company will remit to a Dissenting Shareholder who has submitted a Demand
and who has deposited his or her shares, the amount which the Company
estimates to be the fair value of the shares. The Company's estimate of
fair value will be based upon the value of a share immediately before the
completion of the sale of DataMed, excluding any appreciation or
depreciation in anticipation of the sale of DataMed, as required under
Colorado law. Accompanied with the payment will be a copy of the Company's
audited Balance Sheet and Statement of Income for its fiscal year ended
December 31, 1996, a copy of the Company's latest available interim
financial statements, a statement of the Company's estimate of fair value
of the shares, a statement as to how interest was calculated and a Notice
of Dissenter's Rights to Demand Supplement Payment along with copies of the
Act.
If the Company fails to make payment within 60 days of the date of the
Notice, or if a Dissenting Shareholder believes that the amount paid is
less than the fair value of his or her shares, a Dissenting Shareholder
may, within 30 days after the date of mailing of the Company's payment mail
to the Company his or her own estimate of the value of the shares and
demand payment of the deficiency ("Deficiency Demand"). Failure to make a
Deficiency Demand within such 30 day period waives any right that a
Dissenting Shareholder may have with respect to payment of any such
deficiency. In the event any Deficiency Demand remains unsettled 60 days
after the Company's receipt of such a demand, the Company must file a
petition requesting that the fair value of the shares and interest thereon
be determined by the District court for the City and county of Denver,
Colorado. All Dissenting Shareholders whose Deficiency Demands have not
been settled will be made a party to such action and will receive a copy of
the petition filed with the court. The Denver District Court will have
full jurisdiction of the matter and may in it discretion appoint one or
more persons as appraisers to receive evidence and to recommend a decision
on the question of fair value.
-30-
Dissenting Shareholders made a party to the action are entitled to conduct
discovery in the same manner as provided in other civil suits in the State
of Colorado. Such Dissenting Shareholders shall be entitled to judgement
for the amount by which the fair value of their shares is found to exceed
the amount previously remitted. The costs and expenses of such a
proceeding including reasonable compensation and expenses of appraisers
shall be determined by the Court and assessed against the Company, except
that any part of the costs and expenses may be apportioned and assessed as
the Court may deem equitable against all or some of the Dissenting
Shareholders who are parties and whose actions in demanding supplemental
payment is found by the Court to be arbitrary, vexatious or not in good
faith. Fees and expenses of counsel and of experts for the respective
parties may be assessed as the Court deems equitable against the Company
and in favor of any or all Dissenting Shareholders if the Company fails to
comply substantially with the requirements of the Act and maybe assessed
against either the Company or a Dissenting Shareholder, in favor of any
other party, if the Court finds that such party acted arbitrarily,
vexatiously or not in good faith with respect to his or her Dissenting
Shareholder rights. Further, if the Court finds that the services of
counsel of any Dissenting Shareholder were of substantial benefit to other
Dissenting Shareholders similarly situated and should not be assessed
against the Company, the Court may award to the counsel reasonable fees to
be paid out of the amounts awarded to the Dissenting Shareholders who were
benefitted.
If the Company fails to file a petition with the Denver District Court
as provided above, each Dissenting Shareholder who has made a Deficiency
Demand and who has not already settled his or her claim, shall be paid by
the Company the amount demanded by such shareholder with interest and may
file suit for such amount in an appropriate court.
Notwithstanding the above, the Company may elect to withhold payment
from any Dissenting Shareholder with respect to shares of which such
Shareholder was not the beneficial owner on the date of the first
announcement to news media or to shareholders of the terms of the sale of
DataMed. With respect to such shares, the Company has the option, upon
completion of the sale of DataMed, to state to each such Dissenting
Shareholder its estimate of the fair value of the shares, state the rate of
interest to be used, and offer to pay the resulting amounts on receiving
such Dissenting Shareholder's agreement to accept them in full
satisfaction. If such Dissenting Shareholder disagrees with the Company's
determination of fair value and interest, he or she may, within 30 days
after the date of the Company's mailing of its offer, mail to the Company
his or her own estimate of fair value and interest and demand payment of
that amount. Such Dissenting Shareholder's failure to do so shall result
in his or her entitlement to no more than the Company's offer. If such
Dissenting Shareholder makes a demand for such payment, the Company shall
be required to file a petition in the manner as set forth above with
respect to other Dissenting Shareholders.
The provisions of the Act are technical in nature and complex.
Shareholders desiring to exercise dissenters' rights and to obtain payment
of the fair value of their shares of Common Stock should consult counsel,
since the failure to comply strictly with the provisions of the Act may
defeat their dissenters' rights.
-31-
PROPOSAL NUMBER FOUR
INCREASE THE NUMBER OF AUTHORIZED SHARES FOR
THE COMPANY'S SECOND AMENDED AND RESTATED STOCK OPTION PLAN
The Board is requesting that the shareholders of the Company authorize
an increase in the number of Authorized Shares for the Company's Second
Amended and Restated Stock Option Plan (the "Plan"). Currently the Plan
has reserved an aggregate of 1,234,279 shares (the "Authorized Shares") of
Common Stock for issuance pursuant to the exercise of stock options (the
"Options") which may be granted to employees, officers and directors of and
consultants to the Company. The Board now desires to increase the number
of Authorized Shares by 665,721 to 1,900,000 shares which will be reserved
for issuance under the Plan. This increase was adopted and approved by the
Board on October 3, 1997. The text of the Company's Second Amended and
Restated Stock Option Plan is attached as Appendix B to this Proxy
Statement; the following summary of the Second Amended and Restated Stock
Option Plan is qualified in its entirety by reference to such text.
The Plan is designed to provide additional incentive for employees,
officers, directors and consultants, to promote the success of the Company
and to encourage the ownership of the Common Stock of the Company by such
persons. To the extent that management personnel may be eligible to
receive additional Options which may be granted under the Plan, management
has an interest in seeing the increase approved by shareholders. All
employees, officers and directors of and consultants to the Company are
eligible to participate in the Plan.
The Plan is administered by the Compensation Committee (the
"Committee") appointed by the Board or, in the absence of a designated and
qualified Committee, the entire Board must serve as the Committee.
Currently the Plan is administered by the entire Board.
In addition to determining who will be granted Options, the Committee
has the authority and discretion to determine when Options will be granted
and the number of Options to be granted. The Committee may determine which
Options may be options intended to qualify for special treatment under the
Internal Revenue Code of 1986, as amended, ("Incentive Stock Options") or
Non-Qualified Options ("Non-Qualified Stock Options") which are not
intended to so qualify. The Committee also may determine the time or times
when each Option becomes exercisable, the duration of the exercise period
for Options and the form or forms of the instruments evidencing Options
granted under the Plan. The Committee may adopt, amend and rescind such
rules and regulations as in its opinion may be advisable for the
administration of the Plan.
The Committee also may construe the Plan and the provisions in the
instruments evidencing Options granted under the Plan and is empowered to
make all other determinations deemed necessary or advisable for the
administration of the Plan. The Board may suspend, terminate, modify or
amend the Plan, but without the approval of the holders of a majority of
the voting shares of Common Stock represented at a meeting, the Board may
not materially increase the number of shares of Common Stock as to which
Options may be granted, or materially increase the benefits
-32-
to be received by employees and officers of the Company who are
participants under the Plan. The Board may not adversely affect the rights
of any participant under any unexercised Option or any portion thereof
without the consent of such participant.
Options granted under the Plan contain provisions for proportionate
adjustment of the number of shares for outstanding Options and the option
price per share in the event of stock dividends, recapitalizations
resulting in stock splits or combinations or exchanges of shares.
In the event of the dissolution or liquidation of the Company, a
corporate separation or division or the merger or consolidation of the
Company, the Committee may provide that each Option holder may exercise
such Option on such terms as it may have been exercised immediately prior
to such dissolution or liquidation, corporate separation or division or
merger or consolidation or may provide that the Options granted under the
Plan will expire by a fixed date and that the Option holders may exercise
their Options as to all or any part of the shares covered including shares
as to which the Options would not otherwise be exercisable.
Participants in the Plan may be selected by the Committee from
employees, officers and directors of and consultants to the Company. The
Committee may take into account the duties of persons selected, their
present and potential contributions to the success of the Company and such
other considerations as the Committee deems relevant to the purposes of the
Plan.
The Committee has broad discretion to determine the number of shares
with respect to which Options may be granted to participants. The maximum
aggregate fair market value (determined as of the date of grant) of the
shares as to which the Incentive Stock Options become exercisable for any
participant for the first time during any calendar year may not exceed
$100,000.
The Plan provides that the purchase price per share for each Incentive
Stock Option on the date of grant may not be less than 100% of the fair
market value of the shares of Common Stock of the Company on the date of
grant of the Option, except that any Incentive Stock Options granted under
the Plan to a person owning more than ten percent of the Common Stock must
be at a price of at least 110% of such fair market value and be for a term
of no more than five years. The Plan further provides that the purchase
price per share for each Non-Qualified Stock Option on the date of grant
may not be less than 85% of the fair market value of the shares of Common
Stock of the Company on the date of grant of the Option.
Options granted under the Plan confer no right upon any participant
with respect to continuation of employment and do not interfere with the
optionee's or the Company's right to terminate his employment at any time.
An Optionee has no rights as a shareholder with respect to any shares
covered by Options until the Options have been exercised and payment has
been received therefor.
On May 5, 1995, the shareholders of the Company adopted and approved
the Company's Amended and Restated Stock Option Plan which was subsequently
amended by the Board of
-33-
Directors on three occasions as follows: (1) purchase price per share for
each Non-Qualified Stock Option on the date of grant may not be less than
85% of the fair market value of the shares of Common Stock of the Company
on the date of grant of the Option; (2) every optionee will be given the
right to exercise their options at the rate of at least 20% per year over
five (5) years from the date the option is granted; and (3) all optionees
will be provided with financial statements on at least an annual basis. On
June 17, 1997, the Board of Directors ratified and approved the Company's
Second Amended and Restated Stock Option Plan which incorporated the
above-referenced amendments, corrected various typographical errors in the
text of the Plan, and provided that the Board of Directors or Committee, by
resolution, may determine the general terms and conditions of Non-qualified
Stock Options which may be granted pursuant to the Plan.
VOTE REQUIRED
- -------------
The affirmative vote of a majority of the shares represented at the
meeting and entitled to vote will be required to approve this Proposal.
Management recommends the shareholders vote in favor of Proposal No. 4.
COMPANY'S RELATIONSHIP WITH
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
A representative of Ernst & Young LLP, Denver, Colorado, the Company's
independent certified public accountants, may be present at the Annual
Meeting to respond to appropriate questions and to make a statement if he
so desires. The Company intends to select Ernst & Young LLP as its
independent certified public accountants to perform an audit of the
accounts of the Company for the fiscal year ending December 31, 1997.
FINANCIAL INFORMATION
A copy of the Company's Annual Report for the fiscal year ended
December 31, 1996, including Audited Financial Statements, and its Form
10-QSB for the quarter ended June 30, 1997 are being sent to shareholders
with this Proxy Statement. The following additional documents which have
been filed with the Securities and Exchange Commission are incorporated by
reference herein: Quarterly Report on Form 10-QSB/A2 for the quarter ended
March 31, 1997 and Current Reports on Form 8-K dated June 20, 1997, as
amended, and August 18, 1997.
OTHER MATTERS
Management does not know of any other matters to be brought before the
meeting. However, if any other matters properly come before the meeting,
it is the intention of the appointees named in the enclosed form of proxy
to vote in accordance with their best judgment on such matters.
-34-
ANNUAL REPORT
The Company's Annual Report to Shareholders which contains the Form
10-KSB for the fiscal year ended December 31, 1996 is enclosed herewith,
and is incorporated by reference in this Proxy Statement.
SHAREHOLDER PROPOSALS
Any shareholder proposing to have any appropriate matter brought
before the 1998 Annual Meeting of Shareholders must submit such proposal in
accordance with the proxy rules of the Commission. Such proposals should
be sent to the Secretary of the Company not later than February 24, 1998 to
be considered for inclusion in the 1998 Proxy Statement.
By Order of the Board of Directors:
GLOBAL MED TECHNOLOGIES, INC.
Date: October __, 1997 Michael I. Ruxin, M.D.
Chairman of the Board of
Directors
-35-
APPENDIX A
COLORADO BUSINESS CORPORATION ACT
ARTICLE 113
DISSENTERS' RIGHTS
PART 1
RIGHT OF DISSENT - PAYMENT FOR SHARES
7-113-101 DEFINITIONS.-- For purposes of this article:
(1) "Beneficial shareholder" means the beneficial owner of shares
held in a voting trust or by a nominee as the record shareholder.
(2) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring domestic or
foreign corporation, by merger or share exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 7-113-102 and who exercises that right at
the time and in the manner required by part 2 of this article.
(4) "Fair value", with respect to a dissenter's shares, means the
value of the shares immediately before the effective date of the corporate
action to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action except to the extent
that exclusion would be inequitable.
(5) "Interest" means interest from the effective date of the
corporate action until the date of payment, at the average rate currently
paid by the corporation on its principal bank loans or, if none, at the
legal rate as specified in section 5-12-101, C.R.S.
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares that are registered in the name of a nominee to the extent such
owner is recognized by the corporation as the shareholder as provided in
section 7-107-204.
(7) "Shareholders" means either a record shareholder or a beneficial
shareholder.
-1-
7-113-102 RIGHT TO DISSENT.--(1) A shareholder, whether or not
entitled to vote, is entitled to dissent and obtain payment of the fair
value of his or her shares in the event of any of the following corporate
actions:
(a) Consummation of a plan of merger to which the corporation is a
party if:
(I) Approval by the shareholders of that corporation is required for
the merger by section 7-111-103 or 7-111-104 or by the articles of
incorporation, or
(II) The corporation is a subsidiary that is merged with its parent
corporation under section 7-111-104;
(b) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired;
(c) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of the corporation for which a
shareholder vote is required under section 7-112-102(1); and
(d) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of an entity controlled by the
corporation if the shareholders of the corporation were entitled to vote
upon the consent of the corporation to the disposition pursuant to section
7-112-102(2).
(2) A shareholder, whether or not entitled of vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares in
the event of:
(a) An amendment to the articles of incorporation that materially and
adversely affects rights in respect of the shares because it:
(I) Alters or abolishes a preferential right of the shares; or
(II) Creates, alters, or abolishes a right in respect of redemption
of the shares, including a provision respecting a sinking fund for their
redemption or repurchase; or
(b) An amendment to the articles of incorporation that affects rights
in respect of the shares because it:
(I) Excludes or limits the right of the shares to vote on any matter,
or to cumulate votes, other than a limitation by dilution through issuance
of shares or other securities with similar voting rights; or
-2-
(II) Reduces the number of shares owned by the shareholder to a
fraction of a share or to scrip if the fractional share or scrip so created
is to be acquired for cash or the scrip is to be voided under section
7-106-104.
(3) A shareholder is entitled to dissent and obtain payment of the
fair value of the shareholder's shares in the event of any corporate action
to the extent provided by the bylaws or a resolution of the board of
directors.
(4) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this article may not challenge the corporate
action creating such entitlement unless the action is unlawful or
fraudulent with respect to the shareholder or the corporation.
7-113-103 DISSENT BY NOMINEES AND BENEFICIAL OWNERS.--(1) A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in the record shareholder's name only if the record shareholder
dissents with respect to all shares beneficially owned by any one person
and causes the corporation to receive written notice which states such
dissent and the name, address, and federal taxpayer identification number,
if any, of each person on whose behalf the record shareholder asserts
dissenters' rights. The rights of a record shareholder under this
subsection (1) are determined as if the shares as to which the record
shareholder dissents and the other shares of the record shareholder were
registered in the names of different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to the
shares held on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder causes the corporation to receive the
record shareholder's written consent to the dissent not later than the time
the beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder dissents with respect to all shares
beneficially owned by the beneficial shareholder.
(3) The corporation may require that, when a record shareholder
dissents with respect to the shares held by any one or more beneficial
shareholders, each such beneficial shareholder must certify to the
corporation that the beneficial shareholder and the record shareholder or
record shareholders of all shares owned beneficially by the beneficial
shareholder have asserted, or will timely assert, dissenters' rights as to
all such shares as to which there is no limitation on the ability to
exercise dissenters' rights. Any such requirement shall be stated in the
dissenters' notice given pursuant to section 7-113-203.
-3-
PART 2
PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
7-113-201 NOTICE OF DISSENTERS' RIGHTS.--(1) If a proposed corporate
action creating dissenters' rights under section 7-113-102 is submitted to
a vote at a shareholders' meeting, the notice so the meeting shall be given
to all shareholders, whether or not entitled to vote. The notice shall
state that shareholders are or may be entitled to assert dissenters' rights
under this article and shall be accompanied by a copy of this article and
the materials, if any, that under articles 101 to 117 of this title, are
required to be given to shareholders entitled to vote on the proposed
action at the meeting. Failure to give notice as provided by this
subsection (1) to shareholders not entitled to vote shall not affect any
action taken at the shareholders' meeting for which the notice was to have
been given.
(2) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant
to section 7-107-104, any written or oral solicitation of a shareholder to
execute a writing consenting to such action contemplated in section
7-107-104 shall be accompanied or preceded by a written notice stating that
shareholders are or may be entitled to assert dissenters' rights under this
article, by a copy of this article, and by the materials, if any, that,
under articles 101 to 117 of this title, would have been required to be
given to shareholders entitled to vote on the proposed action if the
proposed action were submitted to a vote at a shareholders' meeting.
Failure to give notice as provided by this subsection (2) to shareholders
not entitled to vote shall not affect any action taken pursuant to section
7-107-104 for which the notice was to have been given.
7-113-202 NOTICE OF INTENT TO DEMAND PAYMENT.--(1) If a proposed
corporate action creating dissenters' rights under section 7-113-102 is
submitted to a vote at a shareholders' meeting, a shareholder who wishes to
assert dissenters' rights shall:
(a) Cause the corporation to receive, before the vote is taken,
written notice of the shareholder's intention to demand payment for the
shareholder's shares if the proposed corporate action is effectuated; and
(b) Not vote the shares in favor of the proposed corporate action.
(2) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant
to section 7-107-104, a shareholder who wishes to assert dissenters' rights
shall not execute a writing consenting to the proposed corporate action.
(3) A shareholder who does not satisfy the requirements of subsection
(1) or (2) of this section is not entitled to demand payment for the
shareholder's shares under this article.
-4-
7-113-203 DISSENTERS' NOTICE.--(1) If a proposed corporate action
creating dissenters' rights under section 7-113-102 is authorized, the
corporation shall give a written dissenters' notice to all shareholders who
are entitled to demand payment for their shares under this article.
(2) The dissenters' notice required by subsection (1) of this section
shall be given no later than ten days after the effective date of the
corporate action creating dissenters' rights under section 7-113-102 and
shall:
(a) State that the corporate action was authorized and state the
effective date or proposed effective date of the corporate action:
(b) State an address at which the corporation with receive payment
demands and the address of a place where certificates for certificated
shares must be deposited:
(c) Inform holders of uncertificated shares to what extent transfer
of the shares will be restricted after the payment demand is received.
(d) Supply a form for demanding payment, which form shall request a
dissenter to state an address to which payment is to be made:
(e) Set the date by which the corporation must receive the payment
demand and certificates for certificated shares, which date shall not be
less than thirty days after the date the notice required by subsection (1)
of this section is given:
(f) State the requirement contemplated in section 7-113-103(3), if
such requirement is imposed; and
(g) Be accompanied by a copy of this article.
7-113-204 PROCEDURE TO DEMAND PAYMENT.--(1) A shareholder who is
given a dissenters' notice pursuant to section 7-113-203 and who wishes to
assert dissenters' rights shall, in accordance with the terms of the
dissenters' notice:
(a) Cause the corporation to receive a payment demand, which may be
the payment demand form contemplated in section 7-113-203(2)(d), duly
completed, or may be stated in another writing; and
(b) Deposit the shareholder's certificates for certificated shares.
(2) A shareholder who demands payment in accordance with subsection
(1) of this section retains all rights of a shareholder, except the right
to transfer the shares, until the effective date of
-5-
the proposed corporate action giving rise to the shareholder's exercise of
dissenters' right and has only the right to receive payment for the shares
after the effective date of such corporate action.
(3) Except as provided in section 7-113-207 or 7-113-209(1)(b), the
demand for payment and deposit of certificates are irrevocable.
(4) A shareholder who does not demand payment and deposit the
shareholder's share certificates as required by the date or dates set in
the dissenters' notice is not entitled to payment for the shares under this
article.
7-113-205 UNCERTIFICATED SHARES.--(1) Upon receipt of a demand for
payment under section 7-113-204 from a shareholder holding uncertificated
shares, and in lieu of the deposit of certificates representing the shares,
the corporation may restrict the transfer thereof.
(2) In all other respects, the provisions of section 7-113-204 shall
be applicable to shareholders who own uncertificated shares.
7-113-106 PAYMENT.--(1) Except as provided in section 7-113-208, upon
the effective date of the corporate action creating dissenters' rights
under section 7-113-102 or upon receipt of a payment demand pursuant to
section 7-113-204, whichever is later, the corporation shall pay each
dissenter who complied with section 7-113-204, at the address stated in the
payment demand, or if no such address is stated in the payment demand, at
the address shown on the corporation's current record of shareholders for
the record shareholder holding the dissenter's shares, the amount the
corporation estimates to be the fair value of the dissenter's shares, plus
accrued interest.
(2) The payment made pursuant to subsection (1) of this section shall
be accompanied by:
(a) The corporation's balance sheet as of the end of its most recent
fiscal year or, if that is not available, the corporation's balance sheet
as of the end of a fiscal year ending not more than sixteen months before
the date of payment, an income statement for that year, and, if the
corporation customarily provides such statements to shareholders, a
statement of changes in shareholders' equity for that year and a statement
of cash flow for that year, which balance sheet and statements shall have
been audited if the corporation customarily provides audited financial
statements to shareholders, as well as the latest available financial
statements, if any, for the interim of full-year period, which financial
statements need not be admitted;
(b) A statement of the corporation's estimate of the fair value of
the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under
section 7-113-209; and
(e) A copy of this article.
-6-
7-113-207 FAILURE TO TAKE ACTION.-(1) If the effective date of the
corporate action creating dissenters' rights under section 7-113-102 does
not occur within sixty days after the date set by the corporation by which
the corporation must be receive the payment demand as provided in section
7-113-203, the corporation shall return the deposited certificates and
release the transfer restrictions imposed on uncertificated shares.
(2) If the effective date of the corporate action creating
dissenters' rights under section 7-113-102 occurs more than sixty days
after the date set by the corporation by which the corporation by which the
corporation must receive the payment demand as provided in section
7-113-203, then the corporation shall send a new dissenters' notice, as
provided in section 7-113-203, and the provisions of sections 7-113-204 to
7-113-209 shall again be applicable.
7-113-208 SPECIAL PROVISIONS RELATING TO SHARES ACQUIRED AFTER
ANNOUNCEMENT OF PROPOSED CORPORATE ACTION.--(1) The corporation may, in or
with the dissenters' notice given pursuant to section 7-113-203, state the
date of the first announcement to news media or to shareholders of the
terms of the proposed corporate action creating dissenters' rights under
section 7-113-102 and state that the dissenter shall certify in writing, in
or with the dissenter's payment demand under section 7-113-204, whether or
not the dissenter (or the person on whose behalf dissenters' rights are
asserted) acquired beneficial ownership of the shares before that date.
With respect to any dissenter who does not certify in writing, in or with
the payment demand, that the dissenter or the person on whose behalf the
dissenter asserts dissenters' rights acquired beneficial ownership of the
shares before such date the corporation may, in lieu of making the payment
provided in section 7-113-206, offer to make such payment if the dissenter
agrees to accept it in full satisfaction of the demand.
(2) An offer to make payment under subsection (1) of this section
shall include or be accompanied by the information required by section
7-113-206 (2).
7-113-209 PROCEDURE IF DISSENTER IS DISSATISFIED WITH PAYMENT OR
OFFER.--(1) A dissenter may give notice to the corporation in writing of
the dissenter's estimate of the fair value of the dissenter's shares and of
the amount of interest due and may demand payment of such estimate, less
any payment made under section 7-113-206, or reject the corporation's offer
under section 7-113-208 and demand payment of the fair value of the shares
and interest due, if:
(a) The dissenter believes that the amount paid under section
7-113-206 or offered under section 7-113-208 is less than the fair value of
the shares or that the interest due was incorrectly calculated;
(b) The corporation fails to make payment under section 7-113-206
within sixty days after the date set by the corporation by which the
corporation must receive the payment demand; or
(c) The corporation does not return the deposited certificates or
release the transfer restrictions imposed on uncertificated shares as
required by section 7-113-207(1).
-7-
(2) A dissenter waives the right to demand payment under this section
unless the dissenter causes the corporation to receive the notice required
by subsection (1) of this section within thirty days after the corporation
made or offered payment for the dissenter's shares.
PART 3
JUDICIAL APPRAISAL OF SHARES
7-113-301 COURT ACTION.-(1) If a demand for payment under section
7-113-209 remains unresolved, the corporation may, within sixty days after
receiving the payment demand, commence a proceeding and petition the court
to determine the fair value of the shares and accrued interest. If the
corporation does not commence the proceeding within the sixty-day period,
it shall pay to each dissenter whose demand remains unresolved the amount
demanded.
(2) The corporation shall commence the proceeding described in
subsection (1) of this section in the district court of the county in this
state where the corporation's principal office is located or, if it has no
principal office in this state, in the district court of the county in
which its registered office is located. If the corporation is a foreign
corporation without a registered office in this state, it shall commence
the proceeding in the county in this state where the registered office of
the domestic corporation merged into, or whose shares were acquired by, the
foreign corporation was located.
(3) The corporation shall make all dissenters, whether or not
residents of this state, whose demands remain unresolved parties to the
proceeding commenced under subsection (2) of this section as in an action
against their shares, and all parties shall be served with a copy of the
petition. Service on each dissenter shall be by registered or certified
mail, to the address stated in such dissenter's payment demand, or if no
such address is stated in the payment demand, at the address shown on the
corporation's current record of shareholders for the record shareholder
holding the dissenter's shares, or as provided by law.
(4) The jurisdiction of the court in which the proceeding is
commenced under subsection (2) of this section is plenary and exclusive.
The court may appoint one or more persons as appraisers to receive evidence
and recommend a decision on the question of fair value. The appraisers
have the powers described in the order appointing them, or in any amendment
to such order. The parties to the proceeding are entitled to the same
discovery rights as parties in other civil proceedings.
(5) Each dissenter made a party to the proceeding commenced under
subsection (2) of this section is entitled to judgment for the amount, if
any, by which the court finds the fair value of the dissenter's shares,
plus interest, exceeds the amount paid by the corporation, or for the fair
value, plus interest, of the dissenter's shares for which the corporation
elected to withhold payment under section 7-113-208.
-8-
7-113-302 COURT COSTS AND COUNSEL FEES.-(1) The court in an appraisal
proceeding commenced under section 7-113-301 shall determine all costs of
the proceeding, including the reasonable compensation and expenses of
appraisers appointed by the court. The court shall assess the costs
against the corporation: except that the court may assess costs against all
or some of the dissenters, in amounts the court finds equitable, to the
extent the court finds the dissenters acted arbitrarily, vexatiously, or
not in good faith in demanding payment under section 7-113-209.
(2) The court may also assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any dissenters if the
court finds the corporation did not substantially comply with the
requirements of part 2 of this article; or
(b) Against either the corporation or one or more dissenters, in
favor of any other party, if the court finds that the party against whom
the fees and expenses are assessed acted arbitrarily, vexatiously, or not
in good faith with respect to the rights provided by this article.
(3) If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated, and
that the fees for those services should not be assessed against the
corporation, the court may award to said counsel reasonable fees to be paid
out of the amounts awarded to the dissenters who were benefitted.
-9-
APPENDIX B
GLOBAL MED TECHNOLOGIES, INC
SECOND AMENDED AND RESTATED STOCK OPTION PLAN
PURPOSES OF AND BENEFITS UNDER THE PLAN. This Second Amended and
Restated Stock Option Plan (the "Plan") amends, restates and consolidates
the Amended and Restate Stock Option Plan and the three successive
amendments to the Plan. The Plan is intended to encourage stock ownership
by employees, officers and directors (whether or not they are employees) of
and consultants to GLOBAL MED TECHNOLOGIES, INC., its divisions, Subsidiary
corporations and Parent corporations (the "Corporation"), so that they may
acquire or increase their proprietary interest in the Corporation, to (i)
induce qualified persons to become employees, officers or directors of or
consultants to the Corporation; (ii) reward employees, directors, and
consultants for past services to the Corporation and (iii) encourage such
persons to remain in the employ of or associated with the Corporation and
to put forth maximum efforts for the success of the business of the
Corporation.
It is intended that options granted by the Committee pursuant to
Section 5(a) of this Plan shall constitute "incentive stock options"
("Incentive Stock Options") within the meaning of Section 422 of the Code,
and options granted by the Committee pursuant to Section 5(b) of this Plan
shall constitute "non-qualified stock options" ("Non-qualified Stock
Options").
Any options granted under this Plan prior to this amendment and
restatement and outstanding at the time this Plan is adopted by the Board
shall remain in force and effect but shall be governed by the terms of this
Plan.
1. DEFINITIONS. As used in this Plan, the following words and
phrases shall have the meanings indicated:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Code" means Internal Revenue Code of 1986, as amended from
time to time.
(c) "Committee" means the Compensation Committee appointed by
the Board, if one has been appointed. If no Committee has been appointed,
the term "Committee" shall mean the Board.
(d) "Common Stock" mean the Corporation's $.01 par value common
stock.
(e) "Disability" means a Recipient's inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or
that has lasted or can be expected to last for a continuous period of not
less than 12 months, or such other meaning ascribed in Section 22(e)(3) or
any successor
-1-
provision of the Code. If the Recipient has a disability insurance policy,
the term "Disability" shall be as defined therein; provided that said
definition is not inconsistent with the meaning ascribed in Section
22(e)(3) or any successor provision of the Code.
(f) "Exchange Act" means Securities Exchange Act of 1934, as
amended from time to time.
(g) "Fair Market Value" per share as of a particular date means
the last sale price of the Corporation's Common Stock as reported on a
national securities exchange or on the NASDAQ National Market System or, if
the quotation for the last sale reported is not available for the
Corporation's Common Stock, the average of the closing bid and asked prices
of the Corporation's Common Stock as reported by NASDAQ or on the
electronic bulletin board or, if none, the National Quotation Bureau,
Inc.'s "Pink Sheets" or, if such quotations are unavailable, the value
determined by the Committee in accordance with its discretion in making a
bona fide, good faith determination of fair market value. Fair Market
Value shall be determined without regard to any restriction other than a
restriction which, by its terms, never will lapse.
(h) "Option" means either an Incentive Stock Option or a
Non-qualified Stock Option, or either or both of them.
(i) "Option Price" means the purchase price of the shares of
Common Stock covered by an Option determined in accordance with Section
6(c) hereunder.
(j) "Parent" means any corporation which is a "parent
corporation" as defined in Section 424(e) of the Code, with respect to the
Corporation.
(k) "Plan" means this Second Amended and Restated Stock Option
Plan.
(l) "Recipient" means any person granted an Option hereunder
whether such grant occurred before or after this amendment and restatement.
(m) "Securities Act" means the Securities Act of 1933, as
amended from time to time.
(n) "Subsidiary" means any corporation which is a "subsidiary
corporation" as defined in Section 424(f) of the Code, with respect to the
Corporation.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Committee. The
Committee shall have the authority in its discretion, subject to and not
inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically
conferred under the Plan or necessary or advisable in the administration of
the Plan, including
-2-
the authority to grant Options; to determine which Options shall be
Incentive Stock Options and which shall be Non-qualified Stock Options; to
determine the vesting schedules and other restrictions, if any, relating to
Options; to determine the Option Price; to determine the persons to whom,
and the time or times at which, Options shall be granted; to determine the
number of shares to be covered by each Option; to determine Fair Market
Value per share; to interpret the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to determine the terms and
provisions of the Option agreements (which need not be identical) entered
into in connection with Options granted under the Plan; and to make all
other determinations deemed necessary or advisable for the administration
of the Plan. The Committee may delegate to one or more of its members or
to one or more agents such administrative duties as it may deem advisable,
and the Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to
any responsibility the Committee or such person may have under the Plan.
(b) Options granted under the Plan shall be evidenced by duly
adopted resolutions of the Committee included in the minutes of the meeting
at which they are adopted or in a unanimous written consent.
(c) With respect to persons subject to Section 16 of the
Exchange Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or any successor regulation under the
Exchange Act. To the extent any provision of this Plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee. Any Option
granted hereunder which would subject or subjects the Recipient to
liability under Section 16(b) of the Exchange Act is void AB INITIO as if
it had never been granted.
(d) No member of the Committee or the Board shall be liable for
any action taken or determination made in good faith with respect to the
Plan or any Option granted hereunder.
3. ELIGIBILITY.
(a) Subject to certain limitations hereinafter set forth,
Options may be granted to employees, officers and directors (whether or not
they are employees) of and consultants to the Corporation. In determining
the persons to whom Options shall be granted and the number of shares to be
covered by each Option, the Committee shall take into account the duties of
the respective persons, their present and potential contributions to the
success of the Corporation and such other factors as the Committee shall
deem relevant to accomplish the purposes of the Plan.
(b) A Recipient shall be eligible to receive more than one grant
of an Option during the term of the Plan, on the terms and subject to the
restrictions herein set forth.
-3-
4. STOCK RESERVED.
(a) The stock subject to Options hereunder shall be shares of
Common Stock. Such shares, in whole or in part, may be authorized but
unissued shares or shares that shall have been or that may be reacquired by
the Corporation. The aggregate number of shares of Common Stock as to
which Options may be granted from time to time under the Plan (the
"Available Shares") shall not exceed 1,234,279 shares. The number of
Available Shares shall be subject to adjustment as provided in Section 6(i)
hereof.
(b) If any outstanding Option under the Plan for any reason
expires or is terminated without having been exercised in full, the shares
of Common Stock allocable to the unexercised portion of such Option shall
become available for subsequent grants of Options under the Plan, unless
the Plan shall have been terminated.
5. STOCK OPTIONS
(a) INCENTIVE STOCK OPTIONS.
(1) Options granted pursuant to this Section 5(a) are
intended to constitute Incentive Stock Options and shall be subject to the
following special terms and conditions, in addition to the general terms
and conditions specified in Section 6 hereof. Only employees of the
Corporation (as the term "employees" is defined for the purposes of the
Internal Revenue Code) shall be entitled to receive Incentive Stock
Options.
(2) The aggregate Fair Market Value (determined as of the
date the Incentive Stock Option is granted) of the shares of Common Stock
with respect to which Incentive Stock Options granted under this and any
other plan of the Corporation or any Parent corporation or Subsidiary
corporation are exercisable for the first time by an Recipient during any
calendar year may not exceed the amount set forth in Section 422(d) of the
Code, as amended from time to time.
(3) Incentive Stock Options granted under this Plan are
intended to satisfy all requirements for incentive stock options under
Section 422 of the Code and the Treasury Regulations thereunder and,
notwithstanding any other provision of this Plan, the Plan and all
Incentive Stock Options granted under it shall be so construed, and all
contrary provisions shall be so limited in scope and effect and, to the
extent they cannot be so limited they shall be void, except as otherwise
provided in Section 9 hereof.
(b) NON-QUALIFIED STOCK OPTIONS. Options granted pursuant to
this Section 6(b) are intended to constitute Non-qualified Stock Options
and shall be subject to the general terms and conditions specified in
Section 6 hereof, and as determined by resolutions of the Committee.
6. TERMS AND CONDITIONS OF OPTIONS. Each Option granted pursuant to
the Plan shall be evidenced by a written Option agreement between the
Corporation and the Recipient, which
-4-
agreement shall be in substantially the form of Exhibits A and B hereto as
modified from time to time by the Committee in its discretion, and which
shall comply with and be subject to the following terms and conditions:
(a) NUMBER OF SHARES. Each Option agreement shall state the
number of shares of Common Stock covered by the Option.
(b) TYPE OF OPTION. Each Option agreement shall specifically
identify the portion, if any, of the Option which constitutes an Incentive
Stock Option and the portion, if any, which constitutes a Non-qualified
Stock Option.
(c) OPTION PRICE. Each Option agreement shall state the Option
Price, which shall be determined by the Committee subject only to the
following restrictions:
(1) The Option Price of any Incentive Stock Option shall be
not less than 100% of the Fair Market Value per share on the date of grant
of the Option; provided, however, that any Incentive Stock Option granted
under the Plan to a person owning more than ten percent of the total
combined voting power of the Common Stock shall have an Option Price of not
less than 110% of the Fair Market Value per share on the date of grant of
the Incentive Stock Option.
(2) Any Non-qualified Stock Option granted under the Plan
shall be at a price no less than 85% of the Fair Market Value per share on
the date of grant thereof.
(3) The Option Price shall be subject to adjustment as
provided in Section 6(i) hereof.
(d) TERM OF OPTION. Each Option agreement shall state the
period during and times at which the Option shall be exercisable; provided,
however:
(1) The date on which the Committee adopts a resolution
expressly granting an Option shall be considered the day on which such
Option is granted, unless a future date is specified in the resolution;
provided, however, the Recipient shall have no rights under the grant until
the Recipient has executed an Option agreement with respect to such Option.
(2) Except as further restricted in paragraph 6(d)(3), the
exercise period shall not exceed ten years from the date of grant of the
Option.
(3) Incentive Stock Options granted to a person owning more
than ten percent of the total combined voting power of the Common Stock of
the Corporation shall be for no more than five (5) years.
-5-
(4) The Committee shall have the authority to accelerate or
extend the exercisability of any outstanding Option at such time and under
such circumstances as it, in its sole discretion, deems appropriate. No
exercise period may be extended to increase the term of the Option beyond
ten years from the date of the grant.
(5) The exercise period shall be subject to earlier
termination as provided in Sections 6(f) and 6(g) hereof and, furthermore,
shall be terminated upon surrender of the Option by the holder thereof if
such surrender has been authorized in advance by the Committee.
(e) METHOD OF EXERCISE AND MEDIUM AND TIME OF PAYMENT.
(1) All recipients shall be given the right to exercise
their options at the rate of at least 20% per year over five (5) years from
the date the option is granted.
(2) An Option may be exercised as to any or all whole
shares of Common Stock as to which it then is exercisable.
(3) Each exercise of an Option granted hereunder, whether
in whole or in part, shall be by written notice to the secretary of the
Corporation designating the number of shares as to which the Option is
being exercised, and shall be accompanied by payment in full of the Option
Price for the number of shares so designated, together with any written
statements required by any applicable securities laws.
(4) The Option Price shall be paid in cash, in shares of
Common Stock having a Fair Market Value equal to such Option Price or in
property or in a combination of cash, shares and property and, subject to
approval of the Committee, may be effected in whole or in part (A) with
monies received from the Corporation at the time of exercise as a
compensatory cash payment, or (B) with monies borrowed from the Corporation
pursuant to repayment terms and conditions as shall be determined from time
to time by the Committee, in its discretion, separately with respect to
each exercise of an Option and each Recipient; provided, however, that each
such method and time for payment and each such borrowing and the terms and
conditions of repayment shall be permitted by and be in compliance with
applicable law.
(5) The Committee shall have the sole and absolute
discretion to determine whether or not property other than cash or Common
Stock may be used to purchase the shares of Common Stock hereunder and, if
so, to determine the value of the property received.
(6) Applicable withholding taxes shall be paid in the
manner specified by Section 8 hereof.
(f) TERMINATION. Except as provided herein, an Incentive Stock
Option may not be exercised unless the Recipient then is an employee of the
Corporation or a Subsidiary of or Parent to the Corporation, and unless the
Recipient has remained continuously as an employee of the Corporation since
the date of grant of the Incentive Stock Option.
-6-
(1) If the Recipient ceases to be an employee of the
Corporation or a Subsidiary or Parent to the Corporation (other than by
reason of death, Disability or retirement), other than for cause, all
Incentive Stock Options theretofore granted to such Recipient but not
theretofore exercised shall terminate three months after the date the
Recipient ceased to be an employee of the Corporation.
(2) If the Recipient ceases to be an employee of the
Corporation or a Subsidiary or Parent to the Corporation by reason of
termination for cause, all Incentive Options theretofore granted to such
Recipient but not theretofore exercised shall terminate thirty days after
the date the Recipient ceases to be an employee of the Corporation.
(3) Nothing in the Plan or in any Option granted hereunder
shall confer upon an individual any right to continue in the employ of or
other relationship with the Corporation or interfere in any way with the
right of the Corporation to terminate such employment or other relationship
between the individual and the Corporation.
(g) DEATH, DISABILITY OR RETIREMENT OF RECIPIENT. If a
Recipient shall die while an employee, officer or director of or a
consultant to the Corporation, or if the Recipient's employment, officer or
director status or consulting relationship, shall terminate by reason of
Disability or retirement, all Options theretofore granted to such
Recipient, whether or not otherwise exercisable, unless earlier terminated
in accordance with their terms, may be exercised by the Recipient or by the
Recipient's estate or by a person who acquired the right to exercise such
Options by bequest or inheritance or otherwise by reason of the death or
Disability of the Recipient, at any time within one year after the date of
death, Disability or retirement of the Recipient; provided, however, that
in the case of Incentive Stock Options such one-year period shall be
limited to three months in the case of retirement.
(h) TRANSFERABILITY RESTRICTION. (1) Options granted under the
Plan shall not be transferable other than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security
Act of 1974, or the rules thereunder. Options may be exercised, during the
lifetime of the Recipient, only by the Recipient and thereafter only by his
legal representative.
(2) Any attempted sale, pledge, assignment, hypothecation
or other transfer of an Option contrary to the provisions hereof and the
levy of any execution, attachment or similar process upon an Option shall
be null and void and without force or effect and shall result in a
termination of the Option.
(3)(A) As a condition to the transfer of any shares of
Common Stock issued upon exercise of an Option granted under this Plan, the
Corporation may require an opinion of counsel, satisfactory to the
Corporation, to the effect that such transfer will not be in violation of
the Securities Act or any other applicable securities laws or that such
transfer has been registered under federal and all applicable state
securities laws. (B) Further, the Corporation shall be authorized to
refrain from delivering or transferring shares of Common
-7-
Stock issued under this Plan until the Committee determines that such
delivery or transfer will not violate applicable securities laws and the
Recipient has tendered to the Corporation any federal, state or local tax
owed by the Recipient as a result of exercising the Option or disposing of
any Common Stock when the Corporation has a legal liability to satisfy such
tax. (C) The Corporation shall not be liable for damages due to delay in
the delivery or issuance of any stock certificate for any reason
whatsoever, including, but not limited to, a delay caused by listing
requirements of any securities exchange or the National Association of
Securities Dealers, or any registration requirements under the Securities
Act, the Exchange Act, or under any other state or federal law, rule or
regulation. (D) The Corporation is under no obligation to take any action
or incur any expense in order to register or qualify the delivery or
transfer of shares of Common Stock under applicable securities laws or to
perfect any exemption from such registration or qualification. (E)
Furthermore, the Corporation will not be liable to any Recipient for
failure to deliver or transfer shares of Common Stock if such failure is
based upon the provisions of this paragraph.
(i) EFFECT OF CERTAIN CHANGES.
(1) If there is any change in the number of shares of
Common Stock through the declaration of stock dividends, or through a
recapitalization resulting in stock splits, or combinations or exchanges of
such shares, the number of shares of Common Stock available for Options and
the number of such shares covered by outstanding Options, and the exercise
price per share of the outstanding Options, shall be proportionately
adjusted by the Committee to reflect any increase or decrease in the number
of issued shares of Common Stock; provided, however, that any fractional
shares resulting from such adjustment shall be eliminated.
(2) In the event of the proposed dissolution or liquidation
of the Corporation, or any corporate separation or division, including, but
not limited to, split-up, split-off or spin-off, merger or consolidation of
the Corporation with another corporation, or any sale or transfer by the
Corporation of all or substantially all its assets or any tender offer or
exchange offer for or the acquisition, directly or indirectly, by any
person or group for more than 50% of the then outstanding voting securities
of the Corporation, the Committee may provide that the holder of each
Option then exercisable shall have the right to exercise such Option (at
its then current Option Price) solely for the kind and amount of shares of
stock and other securities, property, cash or any combination thereof
receivable upon such dissolution, liquidation, corporate separation or
division, merger or consolidation, sale or transfer of assets or tender
offer or exchange offer, by a holder of the number of shares of Common
Stock for which such Option might have been exercised immediately prior to
such dissolution, liquidation, or corporate separation or division, merger
or consolidation, sale or transfer of assets or tender offer or exchange
offer; or in the alternative the Committee may provide that each Option
granted under the Plan shall terminate as of a date fixed by the Committee;
provided, however, that not less than 30 days' written notice of the date
so fixed shall be given to each Recipient, who shall have the right, during
the period of 30 days preceding such termination, to exercise the Option to
the extent then exercisable. To the extent that Section 422(d) of the Code
would not permit the provisions of this paragraph (2) to apply to any
outstanding Incentive Stock Options, such
-8-
Incentive Stock Options shall immediately upon the occurrence of the event
described in this paragraph (2), be treated for all purposes of the Plan as
Non-qualified Stock Options and shall be immediately exercisable as such as
provided in this paragraph (2).
(3) Paragraph (2) of this Section 6(i) shall not apply
to a merger or consolidation in which the Corporation is the surviving
corporation and shares of Common Stock are not converted into or exchanged
for stock, securities of any other corporation, cash or any other thing of
value. Notwithstanding the preceding sentence, in case of any
consolidation or merger of another corporation into the Corporation in
which the Corporation is the surviving corporation and in which there is a
reclassification or change (including a change which results in the right
to receive cash or other property) of the shares of Common Stock (other
than a change in par value, or from par value to no par value, or as a
result of a subdivision or combination, but including any change in such
shares into two or more classes or series of shares), the Committee may
provide that the holder of each Option then exercisable shall have the
right to exercise such Option solely for the kind and amount of shares of
stock and other securities (including those of any new direct or indirect
Parent of the Corporation), property, cash or any combination thereof
receivable upon such reclassification, change, consolidation or merger by
the holder of the number of shares of Common Stock for which such Option
might have been exercised.
(4) If there is a change in the Common Stock of the
Corporation as presently constituted, which is limited to a change of all
of 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 Common Stock within the meaning of
the Plan.
(5) To the extent that the foregoing adjustments relate to
stock or securities of the Corporation, such adjustments shall be made by
the Committee, whose determination in that respect shall be final, binding
and conclusive, provided that each Incentive Stock Option granted pursuant
to this Plan shall not be adjusted in a manner that causes such option to
fail to continue to qualify as an Incentive Stock Option within the meaning
of Section 422 of the Code, except as otherwise provided in Section 6(i)(2)
hereof.
(6) Except as expressly provided in this Section 6(i), the
Recipient shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock
of any class or by reason of any dissolution, liquidation, merger, or
consolidation or split-up, split-off or spin-off of assets or stock of
another corporation; and any issue by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to the
Option. The grant of an Option under the Plan shall not affect in any way
the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structures or to merge or to consolidate or to dissolve, liquidate or sell,
or transfer all or part of its business or assets.
-9-
(j) RIGHTS AS SHAREHOLDER - NON-DISTRIBUTIVE INTENT.
(1) Neither a person to whom an Option is granted, nor such
person's legal representative, heir, legatee or distributee, shall be
deemed to be the holder of, or to have any rights of a holder with respect
to, any shares of Common Stock subject to such Option until after the
Option is exercised and the shares are issued to the person exercising such
Option.
(2) Upon exercise of an Option at a time when there is no
registration statement in effect under the Securities Act relating to the
shares issuable upon exercise, shares may be issued to the Recipient only
if the Recipient represents and warrants in writing to the Corporation that
the shares purchased are being acquired for investment and not with a view
to the distribution thereof and provides the Corporation with sufficient
information to establish an exemption from the registration requirements of
the Securities Act. A form of subscription agreement is attached hereto as
Exhibit C.
(3) No shares shall be issued upon the exercise of an
Option unless and until there shall have been compliance with any then
applicable requirements of the Securities and Exchange Commission, or any
other regulatory agencies having jurisdiction over the Corporation.
(4) No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distribution or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 6(i)
hereof.
(k) OTHER PROVISIONS. Option agreements evidencing Options
granted under the Plan shall contain such other provisions, including,
without limitation, (i) the imposition of restrictions upon the exercise of
an Option, and (ii) in the case of an Incentive Stock Option, the inclusion
of any condition not inconsistent with such Option qualifying as an
Incentive Stock Option, as the Committee shall deem advisable.
7. AGREEMENT BY RECIPIENT REGARDING WITHHOLDING TAXES. Each
Recipient agrees that the Corporation, to the extent permitted or required
by law, shall deduct a sufficient number of shares due to the Recipient
upon exercise of the Option to allow the Corporation to pay federal, state
and local taxes of any kind required by law to be withheld upon the
exercise of such Option from any payment of any kind otherwise due to the
Recipient. The Corporation shall not be obligated to advise any Recipient
of the existence of any tax or the amount which the Corporation will be so
required to withhold.
8. TERM OF PLAN. Options may be granted under this Plan from time
to time until May 31, 2000, which is ten years from the date the Plan
(prior to this amendment and restatement) was originally adopted by the
Board.
9. AMENDMENT AND TERMINATION OF THE PLAN. The Committee at any time
and from time to time may suspend, terminate, modify or amend the Plan.
Except as provided in Section
-10-
6 hereof, no suspension, termination, modification or amendment of the Plan
may adversely affect any Option previously granted, unless the written
consent of the Recipient is obtained.
10. ASSUMPTION. Subject to Section 6, the terms and conditions of
any outstanding Options granted under this Plan shall be assumed by, be
binding upon and shall inure to the benefit of any successor corporation to
the Corporation and continue to be governed by, to the extent applicable,
the terms and conditions of this Plan. Such successor corporation may but
shall not be obligated to assume this Plan.
11. TERMINATION OF RIGHT OF ACTION. Every right of action arising
out of or in connection with the Plan by or on behalf of the Corporation,
or by any shareholder of the Corporation against any past, present or
future member of the Board, or against any employee, or by an employee
(past, present or future) against the Corporation, irrespective of the
place where an action may be brought and of the place of residence of any
such shareholder, director or employee, will cease and be barred by the
expiration of three years from the date of the act or omission in respect
of which such right of action is alleged to have risen or such shorter
period as may be provided by law.
12. TAX LITIGATION. The Corporation shall have the right, but not
the obligation, to contest, at its expense, any tax ruling or decision,
administrative or judicial, on any issue which is related to the Plan and
which the Committee believes to be important to holders of Options granted
under the Plan and to conduct any such contest or any litigation arising
therefrom to a final decision.
13. FINANCIAL STATEMENT. The Corporation shave provide holders of
Options with a financial statement of the Corporation on at least an annual
basis.
14. ADOPTION.
(a) This Plan was approved by the Board of Directors of the
Corporation on April 3, 1995.
(b) This Plan was approved by the shareholders of the
Corporation on May 5, 1995.
GLOBAL MED TECHNOLOGIES, INC.
By_______________________________________
Michael I. Ruxin, Chairman of the Board
of Directors and Chief Executive Officer
-11-
Exhibit A
---------
FORM OF
INCENTIVE STOCK OPTION AGREEMENT
--------------------------------
STOCK OPTION AGREEMENT effective as of this ____ day of ___________,
______, between GLOBAL MED TECHNOLOGIES, INC., a Colorado corporation (the
"Corporation"), and ___________________ (the "Recipient").
In accordance with its Second Amended and Restated Stock Option Plan
(the "Plan"), a copy of which has been provided to the Recipient and is
incorporated herein by reference, the Corporation desires, in connection
with the services of the Recipient, to provide the Recipient with an
opportunity to acquire $0.01 par value common stock ("Common Stock") of the
Corporation on favorable terms and thereby increase the Recipient's
proprietary interest in the Corporation and as incentive to put forth
maximum efforts for the success of the business of the Corporation. All
capitalized terms not otherwise defined herein shall be as defined in the
Plan.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth and other good and valuable consideration, the Corporation
and the Recipient agree as follows:
1. CONFIRMATION OF GRANT OF OPTION. Pursuant to a determination of
the Committee (as defined in the Plan) made on _______________, ________
(the "Date of Grant"), the Corporation subject to the terms of the Plan and
of this Agreement, confirms that the Recipient irrevocably has been granted
on the Date of Grant, as a matter of separate inducement and agreement, and
in addition to and not in lieu of salary or other compensation for
services, an INCENTIVE Stock Option pursuant to Section 6 of the Plan (the
"Option") to purchase an aggregate of _________ shares of Common Stock on
the terms and conditions herein set forth, subject to adjustment as
provided in Paragraph 9 hereof.
2. OPTION PRICE. The Option Price per share of Common Stock covered
by the Option will be $________ (the "Option Price") subject to adjustment
as provided in Paragraph 9 hereof.
3. VESTING OF OPTION. [SELECT WHICH VESTING OPTION APPLIES] [This
option shall vest as to 20% of the shares covered hereby on the one year
anniversary of the date of Grant. Thereafter, this Option shall vest as to
an additional 20% of the shares covered hereby, cumulatively, on the
second, third, fourth and fifth anniversary dates of the Date of Grant.] OR
[This option shall be immediately and fully vested from the Date of Grant].
4. EXERCISE OF OPTION. Except as otherwise provided in Section 6 of
the Plan and Paragraph 3 above, this Option may be exercised in whole or in
part at any time during the term of the Option, provided, however, no
portion of this Option shall be exercisable (i) after the expiration of the
term thereof, and (ii) unless the holder shall at the time of exercise have
been
-1-
an employee, officer or director of or a consultant to the corporation for
a period of at least six months.
The Option may be exercised, as provided in this Paragraph 4, by
notice and payment to the Corporation as provided in Paragraph 9 hereof and
Section 6(e) of the Plan.
5. TERM OF OPTION. The term of the Option will be through
_______________, 20___, subject to earlier termination or cancellation as
provided in this Agreement. Except as otherwise provided in Paragraphs 8
and 9 hereof, the Option will not be exercisable unless the Recipient
shall, at the time of exercise, be an employee, officer or director of or
consultant to the Corporation.
The holder of the Option will not have any rights to dividends or any
other rights of a shareholder with respect to any shares of Common Stock
subject to the Option until such shares shall have been purchased through
the exercise of the Option and has been evidenced on the stock transfer
records of the Corporation maintained by the Corporation's transfer agent.
6. TRANSFERABILITY RESTRICTION. The Option may not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in any way
(whether by operation of law or otherwise) except in strict compliance with
Section 6(h) of the Plan. Any assignment, transfer, pledge, hypothecation
or other disposition of the Option or any attempt to make any such levy of
execution, attachment or other process will cause the Option to terminate
immediately upon the happening of any such event, provided, however, that
any such termination of the Option under the foregoing provisions of this
Paragraph 6, will not prejudice any rights or remedies which the
Corporation may have under this Agreement or otherwise.
7. EXERCISE UPON TERMINATION. The Recipient's rights to exercise
this Option upon termination of employment or cessation as an officer,
director or consultant shall be as set forth in Section 6(f) of the Plan.
8. DEATH, DISABILITY OR RETIREMENT OF RECIPIENT. The Recipient's
rights to exercise this Option upon the death, disability or retirement of
the Recipient shall be as set forth in Section 6(g) of the Plan.
9. ADJUSTMENTS. The Option shall be subject to adjustment upon the
occurrence of certain events as set forth in Section 6(i) of the Plan.
10. NOTICES. Each notice relating to this Agreement will be in
writing and delivered in person or by certified mail to the proper address.
Notices to the Corporation shall be addressed to the Corporation c/o
Michael I. Ruxin, Chairman of the Board of Directors, at 12600 W. Colfax,
Suite A-500, Lakewood, Colorado 80215. Notices to the Recipient or other
person or persons then entitled to exercise the Option shall be addressed
to the Recipient or such other person or persons at the Recipient's address
specified below. Anyone to whom a notice may be
-2-
given under this Agreement may designate a new address by notice to that
effect given pursuant to this Paragraph 10.
11. APPROVAL OF CONSENT. The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Corporation's counsel of all legal matters in connection
therewith, including compliance with the requirements of the Securities
Act, the Securities Exchange Act of 1934, as amended, applicable state
securities laws, the rules and regulations thereunder, and the requirements
of any national securities exchange or association upon which the Common
Stock then may be listed.
12. BENEFITS OF AGREEMENT. This Agreement will inure to the benefit
of and be binding upon each successor and assign of the Corporation. All
obligations imposed upon the Recipient and all rights granted to the
Corporation under this Agreement will be binding upon the Recipient's
heirs, legal representatives and successors.
13. GOVERNMENTAL AND OTHER REGULATIONS. The exercise of the Option
and the Corporation's obligation to sell and deliver shares upon the
exercise of rights to purchase shares is subject to all applicable federal
and state laws, rules and regulations, and to such approvals by any
regulatory or governmental agency which, in the opinion of counsel for the
Corporation, may be required.
14. CONFLICTS WITH THE PLAN. If any provision in this Agreement
conflicts with a provision in the Plan, the Plan shall govern.
Executed in the name and on behalf of the Corporation by one of its
duly authorized officers and by the Recipient all as of the date first
above written.
GLOBAL MED TECHNOLOGIES, INC.
By_________________________________________
Michael I. Ruxin, Chairman of the Board
of Directors
The undersigned Recipient understands the terms of this Option
Agreement. The undersigned acknowledges that he or she can receive a copy
of the Plan by request to the Corporation. The undersigned agrees to
comply with the terms and conditions of the Plan.
Date __________________, ______ ________________________________
-3-
Recipient: _________________________________
Tax ID Number: ____________________________
Address: __________________________________
___________________________________________
___________________________________________
-4-
Exhibit B
---------
FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------
STOCK OPTION AGREEMENT effective as of this ____ day of _____________,
______, between GLOBAL MED TECHNOLOGIES, INC., a Colorado corporation (the
"Corporation"), and ___________________ (the "Recipient").
In accordance with its Second Amended and Restated Stock Option Plan
(the "Plan"), a copy of which has been provided to the Recipient and is
incorporated herein by reference, the Corporation desires, in connection
with the services of the Recipient, to provide the Recipient with an
opportunity to acquire $0.01 par value common stock ("Common Stock") of the
Corporation on favorable terms and thereby increase the Recipient's
proprietary interest in the Corporation and as incentive to put forth
maximum efforts for the success of the business of the Corporation. All
capitalized terms not otherwise defined herein shall be as defined in the
Plan.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth and other good and valuable consideration, the Corporation
and the Recipient agree as follows:
1. CONFIRMATION OF GRANT OF OPTION. Pursuant to a determination of
the Committee (as defined in the Plan) made on ____________, _____ (the
"Date of Grant"), the Corporation subject to the terms of the Plan and of
this Agreement, confirms that the Recipient irrevocably has been granted on
the Date of Grant, as a matter of separate inducement and agreement, and in
addition to and not in lieu of salary or other compensation for services,
a NON-QUALIFIED Stock Option pursuant to Section 6 of the Plan (the
"Option") to purchase an aggregate of _________ shares of Common Stock on
the terms and conditions herein set forth, subject to adjustment as
provided in Paragraph 9 hereof.
2. OPTION PRICE. The Option Price per share of Common Stock covered
by the Option will be $______ (the "Option Price") subject to adjustment as
provided in Paragraph 9 hereof.
3. VESTING OF OPTION. [SELECT WHICH VESTING OPTION APPLIES] [This
option shall vest as to 20% of the shares covered hereby on the one year
anniversary of the date of Grant. Thereafter, this Option shall vest as to
an additional 20% of the shares covered hereby, cumulatively, on the
second, third, fourth and fifth anniversary dates of the Date of Grant.] OR
[This option shall be immediately fully vested from the Date of Grant].
4. EXERCISE OF OPTION. Except as otherwise provided in Section 6 of
the Plan and Paragraph 3 above, this Option may be exercised in whole or in
part at any time during the term of the Option, provided, however, no
portion of this Option shall be exercisable after the expiration of the
term thereof.
-1-
The Option may be exercised, as provided in this Paragraph 4, by
notice and payment to the Corporation as provided in Paragraph 9 hereof and
Section 6(e) of the Plan.
5. TERM OF OPTION. The term of the Option will be through
____________, 20___, subject to earlier termination or cancellation as
provided in this Agreement.
The holder of the Option will not have any rights to dividends or any
other rights of a shareholder with respect to any shares of Common Stock
subject to the Option until such shares shall have been purchased through
the exercise of the Option and has been evidenced on the stock transfer
records of the Corporation maintained by the Corporation's transfer agent.
6. TRANSFERABILITY RESTRICTION. The Option may not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in any way
(whether by operation of law or otherwise) except in strict compliance with
Section 6(h) of the Plan. Any assignment, transfer, pledge, hypothecation
or other disposition of the Option or any attempt to make any such levy of
execution, attachment or other process will cause the Option to terminate
immediately upon the happening of any such event, provided, however, that
any such termination of the Option under the foregoing provisions of this
Paragraph 6, will not prejudice any rights or remedies which the
Corporation may have under this Agreement or otherwise.
7. DEATH, DISABILITY OR RETIREMENT OF RECIPIENT. The Recipient's
rights to exercise this Option upon the death, disability or retirement of
the Recipient shall be as set forth in Section 6(g) of the Plan.
8. ADJUSTMENTS. The Option shall be subject to adjustment upon the
occurrence of certain events as set forth in Section 6(i) of the Plan.
9. NOTICES. Each notice relating to this Agreement will be in
writing and delivered in person or by certified mail to the proper address.
Notices to the Corporation shall be addressed to the Corporation c/o
Michael I. Ruxin, Chairman of the Board of Directors, at 12600 W. Colfax,
Suite A-500, Lakewood, Colorado 80215. Notices to the Recipient or other
person or persons then entitled to exercise the Option shall be addressed
to the Recipient or such other person or persons at the Recipient's address
specified below. Anyone to whom a notice may be given under this Agreement
may designate a new address by notice to that effect given pursuant to this
Paragraph 9.
10. APPROVAL OF CONSENT. The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Corporation's counsel of all legal matters in connection
therewith, including compliance with the requirements of the Securities
Act, the Securities Exchange Act of 1934, as amended, applicable state
securities laws, the rules and regulations thereunder, and the requirements
of any national securities exchange or association upon which the Common
Stock then may be listed.
-2-
11. BENEFITS OF AGREEMENT. This Agreement will inure to the benefit
of and be binding upon each successor and assign of the Corporation. All
obligations imposed upon the Recipient and all rights granted to the
Corporation under this Agreement will be binding upon the Recipient's
heirs, legal representatives and successors.
12. GOVERNMENTAL AND OTHER REGULATIONS. The exercise of the Option
and the Corporation's obligation to sell and deliver shares upon the
exercise of rights to purchase shares is subject to all applicable federal
and state laws, rules and regulations, and to such approvals by any
regulatory or governmental agency which, in the opinion of counsel for the
Corporation, may be required.
13. CONFLICTS WITH THE PLAN. If any provision in this Agreement
conflicts with a provision in the Plan, the Plan shall govern.
Executed in the name and on behalf of the Corporation by one of its
duly authorized officers and by the Recipient all as of the date first
above written.
GLOBAL MED TECHNOLOGIES, INC.
By_________________________________________
Michael I. Ruxin, Chairman of the Board
of Directors
The undersigned Recipient understands the terms of this Option
Agreement. The undersigned acknowledges that he or she can receive a copy
of the Plan by request to the Corporation. The undersigned agrees to
comply with the terms and conditions of the Plan.
Date __________________, ______ ________________________________
Recipient: _______________________________
Tax ID Number: ___________________________
Address: _________________________________
__________________________________________
__________________________________________
-3-
Exhibit C
---------
FORM OF
SUBSCRIPTION AGREEMENT
----------------------
THE SECURITIES OF GLOBAL MED TECHNOLOGIES, INC. BEING SUBSCRIBED FOR
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT.
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY
OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS
OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES
HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR
REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT
CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OR DETERMINED THE
ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE
AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
This Subscription Agreement is entered for the purpose of the
Undersigned acquiring _____________ shares of the $.01 par value common
stock (the "Securities") of GLOBAL MED TECHNOLOGIES, INC., a Colorado
corporation (the "Corporation") from the Corporation upon the exercise of
an Option pursuant to the Global Med Technologies, Inc. Stock Option Plan
(the "Plan"). It is understood that exercise of an Option at a time when
no registration statement relating thereto is effective under the
Securities Act of 1933, as amended (the "Securities Act") can not be
completed until the Undersigned executes this Subscription Agreement and
delivers it to the Corporation, and then such exercise is effective only in
accordance with the terms of the Plan and this Subscription Agreement.
-1-
In connection with the Undersigned's acquisition of the Securities,
the Undersigned represents and warrants to the Corporation as follows:
1. The Undersigned has been provided, and has reviewed all available
reports filed by the Corporation pursuant to the Securities Exchange Act of
1934, including (without limitation) the Corporation's most recent annual
report on Form 10-K (or Form 10-KSB) for the most recently-completed fiscal
year and all Forms 10-Q (or Forms 10-QSB) for the quarters subsequent to
the end of the most recent fiscal year, the Plan, and such other
information as the Undersigned may have requested of the Corporation
regarding its business, operations, management, and financial condition
(all of which is referred to herein as the "Available Information").
2. The Corporation has given the Undersigned the opportunity to ask
questions of and to receive answers from persons acting on the
Corporation's behalf concerning the terms and conditions of this
transaction and the opportunity to obtain any additional information
regarding the Corporation, its business and financial condition which the
Corporation possesses or can acquire without unreasonable effort or
expense.
3. The Securities are being acquired by the Undersigned for his own
account and not on behalf of any other person or entity. The Undersigned's
present financial condition is such that it is unlikely that it would be
necessary for the Undersigned to dispose of any portion of the Securities
in the foreseeable future.
4. The Undersigned understands that the Securities being acquired
hereby have not been registered under the Securities Act or any state or
foreign securities laws, and are and will continue to be restricted
securities within the meaning of Rule 144 of the General Rules and
Regulations under the Securities Act and applicable state statutes, and
consents to the placement of an appropriate restrictive legend or legends
on any certificates evidencing the Securities and any certificates issued
in replacement or exchange therefor and acknowledges that the Corporation
will cause its stock transfer records to note such restrictions.
5. By the Undersigned's execution below, it is acknowledged and
understood that the Corporation is relying upon the accuracy and
completeness hereof in complying with certain obligations under applicable
securities laws.
6. This Agreement binds and inures to the benefit of the
representatives, successors and permitted assigns of the respective parties
hereto.
-2-
7. The Undersigned acknowledges and agrees that the Corporation has
withheld ___________ shares for the payment of taxes as a result of the
exercise of an Option in satisfaction of federal withholding taxes.
(Undersigned)
______________, ____ ____________________________
Recipient: _________________
Tax ID Number:______________
Address: __________________
____________________________
____________________________
-3-
APPENDIX C
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION OF
GLOBAL MED TECHNOLOGIES, INC.
The undersigned President of Global Med Technologies, Inc., a Colorado
corporation (the "Corporation"), does hereby sign, verify and deliver in
duplicate to the Secretary of State of the State of Colorado these Articles
of Amendment to the Articles of Incorporation of the Corporation.
FIRST: The name of the Corporation is Global Med Technologies, Inc.
SECOND: The Amended and Restated Articles of Incorporation, as
amended, of the Corporation are amended as follows:
A new Article VIII shall be added as follows:
ARTICLE VIII
CLASSIFICATION OF DIRECTORS
The Board of Directors shall be divided into three classes
on the dates and in the manner set forth below. Each class of
Directors shall consist, as nearly as possible, of one-third of
the total number of Directors. The Class I Directors term shall
expire at the first Annual Meeting of Shareholders to be held in
1998; the Class II Directors term shall expire at the second
Annual Meeting of Shareholders to be held in 1999; the Class III
Directors term shall expire at the third Annual Meeting of
Shareholders to be held in 2000. Upon expiration of the initial
staggered terms, Directors will be elected for three years to
succeed those Directors whose terms expire. Notwithstanding the
foregoing, and except as otherwise required by law, whenever the
holders of any one or more series of Preferred Stock shall have
the right, voting separately as a class, to elect one or more
directors of the Company, the terms of the director or directors
elected by such holders shall expire at the next succeeding
annual meeting of shareholders. Vacancies which occur during the
year may be filled by the Board of Directors to serve for the
remainder of the initial term of each class.
FOURTH: The Articles of Amendment to the Articles of Incorporation
were duly adopted by the shareholders of the Corporation pursuant to
Section 7-110-103 of the Colorado Business Corporation Act on December 2,
1997. The number of shares cast for the amendment by each voting group
entitled to vote separately on the amendment was sufficient for approval by
that voting group.
IN WITNESS WHEREOF, Global Med Technologies, Inc., a Colorado
corporation, through its President, duly executes the above and foregoing
Articles of Amendment to the Articles of Incorporation as of the _____ day
of December, 1997.
GLOBAL MED TECHNOLOGIES, INC.
By:___________________________________________
Michael I, Ruxin, Chairman and Chief
Executive Officer
-2-
__________________________________________________________________________
PROXY
_________________________________________________________________________
GLOBAL MED TECHNOLOGIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 2, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS: That the undersigned shareholder of
Global Med Technologies, Inc. (the "Company") hereby constitutes and
appoints Michael I. Ruxin, M.D. and Joseph F. Dudziak, or either of them,
as attorneys and proxies to appear, attend and vote all of the shares of
the Common Stock of Global Med Technologies, Inc. standing in the name of
the undersigned at the Annual Meeting of Shareholders of Global Med
Technologies, Inc. to be held at the Company's office at 12600 West Colfax,
Suite A-500, Lakewood, Colorado 80215, on December 2, 1997, at 10:00 a.m.,
Mountain Time, and at any adjournment or adjournments thereof. Management
will vote its proxies to adjourn the meeting, if necessary, to insure that
the Proposal to approve the sale of DataMed is approved.
1. A proposal to amend the Articles of Incorporation to divide the
Board of Directors into three Classes, each of which, after an interim
arrangement, will serve for staggered three year terms.
For ________ Against ________
2. A proposal to elect the following four Directors: Michael I.
Ruxin, William J. Collard, Gerald F. Willman, Jr. and Gordon Segal. (Each
shareholder entitled to vote at the meeting has the right to vote the
number of shares held by him for each of the four (4) director nominees.
Election of the director nominees requires the affirmative vote of a
majority of the votes cast at the Annual Meeting.)
For all nominees _______.
Withhold authority to vote for all nominee(s) ______.
Withhold authority to vote for nominee(s) named below:
_______________________________
_______________________________
3. To approve the sale of DataMed to National Medical Review
Offices, Inc. pursuant to the Asset Purchase Agreement, dated August 18,
1997.
For ________ Against ________
4. To increase the number of Available Shares under the Company's
Second Amended & Restated Stock Option Plan for employees, officers,
directors and consultants of the Company, and ratify certain amendments
made to the Plan by the Board of Directors.
For ________ Against ________
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED HEREON WITH
RESPECT TO PROPOSALS ONE, TWO, THREE AND FOUR. IF NO SPECIFICATION IS
MADE, THE SHARES REPRESENTED HEREBY WILL BE VOTED FOR PROPOSALS ONE, TWO,
THREE AND FOUR. THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION
OF THE PROXIES ON ANY OTHER BUSINESS.
Please mark, date and sign your name exactly as it appears hereon and
return the Proxy in the enclosed envelope as promptly as possible. It is
important to return this Proxy properly signed in order to exercise your
right to vote if you do not attend the meeting and vote in person. When
signing as agent, partner, attorney, administrator, guardian, trustee or in
any other fiduciary or official capacity, please indicate your title. If
stock is held jointly, each joint owner must sign.
Date: ____________, 1997
______________________________
Signature(s)
Address if different from that on
label:
______________________________
Street Address
______________________________
City, State and Zip Code
______________________________
Number of shares
Please check if you intend to be present at the meeting: ________
-2-