SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_|Preliminary Proxy Statement
|_|Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
|X|Definitive Proxy Statement
|_|Definitive Additional Materials
|_|Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 14a-12
Corgenix Medical Corporation
- -------------------------------------------------------------------
(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 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 of Schedule and the date of its filing.
(1)Amount Previously Paid:
(2)Form, Schedule or Registration Statement No.:
(3)Filing Party:
(4)Date Filed:
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS+
OF CORGENIX MEDICAL CORPORATION
To be held December 11, 2002
--------------------
TO THE STOCKHOLDERS OF
CORGENIX MEDICAL CORPORATION:
Notice is hereby given that an annual meeting ("the Annual Meeting") of
stockholders of Corgenix Medical Corporation ("Corgenix" or the "Company") will
be held at our corporate offices located at 12061 Tejon Street, Westminster,
Colorado, 80234, on Wednesday, December 11, 2002 at 9:00 a.m. Mountain Standard
Time for the following purposes:
1. The election of five directors;
2. To approve the Company's Amended and Restated 1999
Incentive Stock Plan.
3. To approve the Company's Amended and Restated
Employee Stock Purchase Plan.
4. To ratify the appointment of KPMG LLP, as our independent public
accountants for the fiscal year ending June 30, 2003.
5. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on November 4, 2002 as
the record date for determination of the stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment thereof.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING REGARDLESS OF THE
NUMBER OF SHARES YOU HOLD. YOU ARE INVITED TO ATTEND THE MEETING IN PERSON, BUT
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU
MAY, IF YOU PREFER, REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<page>
October 23, 2002
To Our Shareholders,
Fiscal 2002 was another good year for Corgenix. Our Company demonstrated
solid growth in revenues, collaborations and investments in the future, and we
are convinced that the next few years will show even more exciting progress as
well.
Since our incorporation in 1990, we have built our Company by focusing on
niche markets that offer high growth opportunity. Many of our products were
first on the market, and most are extremely important in areas of medicine that
have been typically very difficult for physicians to diagnose. Our primary focus
remains the clinical diagnostic market. Using our proprietary technology and
know-how, we have developed a broad range of products which we sell worldwide.
Our focus on anti-phospholipids, vascular diseases, autoimmunity, and liver
disease continues to position us in some of the highest growth market
opportunities in diagnostics.
As you know, this year we decided to close our consumer healthcare business
operations, and as a result recognized a loss for the year as we wrote off all
assets related to those operations. Along with many companies, we had high hopes
for the opportunities in consumer healthcare as an adjunct to our base
diagnostics business, but the market never evolved as expected. We were very
prudent with our level of investment over the past few years, and as a result,
this had minimal negative effect on our overall business while many others in
the industry saw a catastrophic impact.
Our revenue increased 15% over the prior year despite difficult worldwide
economic conditions. Industry analysts estimate that diagnostics worldwide
annual growth is less than 5%, so we are especially pleased with our rate of
growth. Income from our core diagnostics business for the year was approximately
$110,000. Due to the write off of consumer operations, our net loss for the year
was $514,000.
We have strong expectations for the new fiscal year and beyond. We have
many strategic opportunities in place that should open new markets for us. Over
the past twelve months we have announced new relationships with Medical &
Biological Laboratories Company Ltd. (Japan) for autoimmune disease, researchers
from Okayama University (Japan) for phospholipid medicine, Genesis Bioventures,
Inc. (Canada, US) for breast cancer, and Affinity Biologicals, Inc. (Canada) for
vascular disease.
I encourage you to attend our annual meeting so that we can present to you
our vision for the future of Corgenix. We look forward to seeing you in
December.
Sincerely,
S/ Douglass T. Simpson
- ------------------------
Douglass T. Simpson
President
CORGENIX MEDICAL CORPORATION
12061 Tejon Street
Westminster, CO 80234
(303) 457-4345
-----------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is being furnished to you as a holder of outstanding shares
of Corgenix common stock, par value $.001 per share, in connection with the
solicitation of proxies by the Board of Directors of Corgenix Medical
Corporation, for use at the Annual Meeting of Stockholders to be held at our
corporate offices located at 12061 Tejon Street, Westminster, Colorado, USA,
80234, on Wednesday, December 11, 2002 at 9:00 a.m. Accompanying this Proxy
Statement is the Board of Directors' Proxy for the Annual Meeting, which you may
use to indicate your vote as to the proposals described in this Proxy Statement.
All Proxies which are properly completed, signed and returned to us prior to the
Annual Meeting, and which have not been revoked, will be voted in favor of the
proposals described in this Proxy Statement unless otherwise directed. You may
revoke a Proxy given to us at any time before it is voted either by filing with
the Secretary of Corgenix at our executive offices, a written notice of
revocation or a duly executed proxy bearing a later date, or by attending the
Annual Meeting and expressing a desire to vote your shares in person.
The close of business on November 4, 2002, has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting or any adjournments of the Annual Meeting. As of the record date,
we had outstanding 5,219,076 shares of common stock, par value $.001 per share,
the only outstanding voting security of Corgenix. As of the record date, we had
approximately 173 stockholders of record. A stockholder is entitled to cast one
vote for each share held on the record date on all matters to be considered at
the Annual Meeting.
Our principal executive offices are located at 12061 Tejon Street, Westminster,
Colorado 80234. This Proxy Statement and the accompanying proxy will be mailed
to our stockholders on or about November 12, 2002.
At the Annual Meeting, the stockholders will consider and vote upon proposals to
(i) elect five directors, (ii) approve the Company's Amended and Restated 1999
Incentive Stock Plan, (iii) approve the Company's Amended and Restated Employee
Stock Purchase Plan, (iv) ratify the appointment of KPMG LLP as our independent
public accountants for the fiscal year ending June 30, 2003 and (v) such other
proposals as may properly come before the Annual Meeting or any adjournment
thereof.
By order of the Board of Directors
CORGENIX MEDICAL CORPORATION
S/Douglass T. Simpson
- ----------------------
President
October 23, 2002
YOU MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROXY STATEMENT. CORGENIX
HAS NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED
IN THIS PROXY STATEMENT. THE DELIVERY OF THIS PROXY STATEMENT DOES NOT MEAN THAT
INFORMATION CONTAINED IN THIS PROXY STATEMENT IS CORRECT AFTER THE DATE OF THIS
PROXY STATEMENT. THIS PROXY STATEMENT IS NOT AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY COMMON STOCK IN ANY CIRCUMSTANCES UNDER WHICH THE OFFER OR
SOLICITATION IS UNLAWFUL.
TABLE OF CONTENTS
PAGE
----
Questions and Answers............................ 1
Proposals You May Vote On........................ 5
General Information.............................. 7
PROPOSAL NO. 1: Election of Directors........... 8
Board and Committees............................. 10
Management of the Company........................ 14
Executive Compensation........................... 17
Beneficial Ownership of Common Stock............. 19
Common Stock Performance......................... 20
Certain Relationships and Related Transactions... 21
PROPOSAL NO. 2: Approve Amended and Restated
1999 Incentive Stock Plan........................ 22
PROPOSAL NO. 3: Approve Amended and Restated
Employee Stock Purchase Plan..................... 32
PROPOSAL NO. 4: Ratification of Independent
Public Accountants............................... 39
Stockholder Proposals............................ 40
Attachment A: Corgenix Medical Corporation
Amended and Restated 1999
Incentive Stock Plan............................. A-1
Attachment B: Corgenix Medical Corporation
Amended and Restated
Employee Stock Purchase Plan..................... B-1
QUESTIONS AND ANSWERS
1. Q: What may I vote on?
A: You may vote on each of the following
four proposals:
(a) The election of nominees to serve
on our Board of Directors.
(b) The proposal to approve the Company's Amended and Restated
1999 Incentive Stock Plan.
(c) The proposal to approve the Company's Amended and
Restated Employee Stock Purchase
Plan.
(d) The ratification of the appointment of KPMG LLP to serve
as our independent auditors for the fiscal year ending June
30, 2003.
2. Q: How does the Board recommend I vote on the proposals?
A: The Board recommends a vote FOR each of
the nominees; FOR the proposal to
approve the Company's Amended and
Restated 1999 Incentive Stock Plan; FOR
the proposal to approve the Company's
Amended and Restated Employee Stock
Purchase Plan; and FOR the ratification
of the appointment of KPMG LLP as the
Company's independent auditors for the
fiscal year ending June 30, 2003.
3. Q: Who is entitled to vote?
A: Stockholders as of the close of business
on November 4, 2002 are entitled to vote
at the Annual Meeting.
4. Q: How do I vote?
A: Sign and date the proxy card you receive
and return it in the prepaid envelope.
If you return your signed proxy card but
do not mark the boxes showing how you
wish to vote, your shares will be voted
FOR the three proposals. You have the
right to revoke your proxy at any time
before the meeting by:
(a) notifying our Corporate Secretary;
(b) voting in person; or
(c) returning a later-dated proxy card.
5. Q: How does discretionary authority apply?
A: If you sign your proxy card, but do not
make any selections, you give authority
to Douglass T. Simpson, President, to
vote on the proposals and any other
matter that may arise at the meeting.
6. Q: Is my vote confidential?
A: Proxy cards, ballots and voting
tabulations that identify individual
stockholders are mailed or returned
directly to the Company's transfer
agent, Computershare Investor Services,
and handled in a manner that protects
your voting privacy. Your vote will not
be disclosed except:
(a) as needed to permit Computershare
Investor Services to tabulate and
certify the vote;
(b) as required by law; or
(c) in limited circumstances such as a
proxy contest in opposition to the
Board.
Additionally, all comments written on the proxy card or
elsewhere will be forwarded to management, but your identity
will be kept confidential unless you ask that your name be
disclosed.
7. Q: What does it mean if I get more than one
proxy card?
A: If your shares are registered
differently and are in more than one
account, you will receive more than one
proxy card. Sign and return all proxy
cards to ensure that your shares are
voted. We encourage you to have all
accounts registered in the same name and
address (whenever possible). You can
accomplish this by contacting our
transfer agent, Computershare Investor
Services at (303) 235-5300.
8. Q: How many shares can vote?
A: As of the close of business on October 23, 2002, 5,219,076
shares of common stock were issued and outstanding. Every holder
of common stock as of the close of business on November 4, 2002,
the record date, is entitled to one vote for each share held.
9. Q: What is a "quorum"?
A: A "quorum" is a majority of the
outstanding shares. They may be present
at the meeting or represented by proxy.
There must be a quorum for the meeting
to be held, and a proposal must receive
more than 50% of the shares voting to be
adopted. If you submit a properly
executed proxy card, even if you abstain
from voting, then you will be considered
part of the quorum. However,
abstentions are not counted in the tally
of votes FOR or AGAINST a proposal. A
WITHHELD vote is the same as an
abstention.
10. Q: Who can attend the Annual Meeting?
A: All stockholders that held shares of
Corgenix on November 4, 2002 can
attend.
11. Q: How will voting on any other business be
conducted?
A: Although we do not know of any business
to be considered at the 2002 Annual
Meeting other than the proposals
described in this Proxy Statement, if
any other business is presented at the
Annual Meeting, your signed proxy card
gives authority to Douglass T. Simpson,
President, to vote on such matters at
his discretion.
12. Q: What percentage of stock do the
directors and officers own?
A: On October 23, 2002, approximately 10.9%
of our common stock was owned by the
directors and executive officers of
Corgenix.
13. Q: Who are the largest principal
stockholders?
A: Corgenix believes that, as of October
23, 2002, the following stockholders
owned more than 5% of our issued and
outstanding common stock:
Medical & Biological Laboratories Co.,
Ltd. owned 880,282 shares or 16.9%.
Dr. Luis R. Lopez, Chairman and Chief
Executive Officer of Corgenix, owned
437,353 shares or 8.4%;
Dallas Marckx owned 288,000 shares or
5.5%.
14. Q: Can a stockholder nominate someone to be
a director of Corgenix?
A: As a stockholder, you may recommend any person as a nominee for
director of Corgenix by writing to the Board of Directors, c/o
Corgenix Corporation, 12061 Tejon Street, Westminster, Colorado
80234.
We must receive any recommendations by September 1, 2003, for
the 2003 annual meeting and said recommendations should include:
o the name, residence and business address of the
nominating stockholder;
o a representation that the nominating stockholder is a record
holder of Corgenix stock or holds Corgenix stock through a
broker and the number and class of shares held;
o a representation that the nominating stockholder
intends to appear in person or by
proxy at the meeting of the
stockholders to nominate the
individual(s) if the nominations are
to be made at a stockholder meeting;
o information regarding each nominee that would be
required to be included in a proxy
statement;
o a description of any arrangement or understanding
between and among the nominating
stockholder and each and every
nominee; and
o the written consent of each nominee to serve as a
director, if elected.
15. Q: Who is soliciting proxies?
A. The enclosed proxy is being solicited by the Board
of Directors of Corgenix on behalf of
Corgenix. The cost of the solicitation
shall be borne by Corgenix. In addition
to solicitation by mail, the officers,
directors and employees of Corgenix may
solicit proxies in person or by
telephone, electronic mail or facsimile
transmission.
16. Q: How much did this proxy solicitation
cost?
A: The total cost is estimated to be
$15,000, which includes estimated
out-of-pocket expenses. We also
reimburse brokerage houses and other
custodians, nominees and fiduciaries for
their reasonable out-of-pocket expenses
for forwarding proxy and solicitation
materials to stockholders.
PROPOSALS YOU MAY VOTE ON
Abstentions or votes withheld on any of the following
proposals will be treated as present at the meeting for
purposes of determining a quorum, but will not be
counted as votes cast.
1. ELECTION OF DIRECTORS
There are five nominees for election this year. Detailed information on
each nominee is provided on pages 8 to 10. If any director is unable to
stand for re-election, the Board may reduce its size or designate a
substitute. If a substitute is designated, proxies voting on the original
director candidate will be cast for the substituted candidate.
Your Board unanimously recommends a vote FOR each of these nominees for
directors.
2. AUTHORIZATION TO APPROVE THE AMENDED AND RESTATED
1999 INCENTIVE STOCK PLAN
The Amended and Restated 1999 Incentive Stock Plan is intended to
encourage ownership of shares of Corgenix by its employees, directors and
consultants by providing an additional incentive to promote the success of
the business. 800,000 shares of Corgenix common stock are reserved for
issuance under this plan.
Your Board unanimously recommends a vote FOR the proposal to approve the
Company's Amended and Restated 1999 Incentive Stock Plan.
3. AUTHORIZATION TO APPROVE THE AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN.
The Amended and Restated Employee Stock Purchase Plan is intended to
provide eligible employees of Corgenix with an opportunity to acquire a
proprietary interest in Corgenix at a discount through their participation
in a plan designed to qualify as an employee stock purchase plan under
Section 423 of the Internal Revenue Code of 1986. 200,000 shares of
Corgenix common stock are reserved for issuance under this plan.
Your Board unanimously recommends a vote FOR the proposal to approve the
Company's Amended and Restated Employee Stock Purchase Plan.
4. RATIFICATION OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors recommended and the Board of
Directors has selected, subject to ratification by a majority vote of the
stockholders in person or by proxy at the Annual Meeting, the firm of KPMG
LLP to continue as our independent public accountant for the current
fiscal year ending June 30, 2003.
Your Board unanimously recommends that stockholders vote FOR ratifying the
appointment of KPMG LLP as the Company's independent auditors.
GENERAL INFORMATION
Corgenix Medical Corporation, a Nevada corporation, is a diagnostic
biotechnology company whose principal focus has been the discovery and
development of diagnostic markers for the detection and management of important
immunological disorders. Until May 22, 1998, our business was conducted by and
under the name of REAADS Medical Products, Inc., a Delaware corporation
("REAADS"). On May 22, 1998, REAADS became a subsidiary of Corgenix, and its
name was changed to Corgenix, Inc. when its wholly owned subsidiary merged with
and into REAADS (the "Merger"). Corgenix was incorporated under the name Benjun
Chemicals Inc. on April 22, 1994 as a wholly owned subsidiary of Superior
Equities Limited (the "Predecessor"). The Predecessor was incorporated on April
9, 1985 under the laws of the Province of British Columbia, Canada.
Our principal offices are located at 12061 Tejon Street, Westminster, Colorado
80234, and our telephone number is (303) 457-4345.
AVAILABLE INFORMATION
We file reports, proxy materials and other information with the Securities and
Exchange Commission (the "Commission"). These reports, proxy materials and other
information concerning Corgenix can be inspected and copied at the Public
Reference Section maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. Copies can be obtained by mail
from the Commission at prescribed rates from the Public Reference Section of the
Commission at its principal office in Washington D.C. The Commission also
maintains a site on the World Wide Web (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants (including Corgenix) that file electronically with the Commission.
PROPOSAL 1
ELECTION OF THE BOARD OF DIRECTORS
Introduction
Five individuals have been nominated to be elected at the Annual Meeting to
serve as directors until the next annual meeting of the stockholders or until
their successors have been elected and qualified. Information about each nominee
is given below.
Nominees
LUIS R. LOPEZ, M.D.
Age: 54
Director since 1998
Dr. Lopez has served as the Chief Executive Officer and Chairman of the Board of
Directors of Corgenix since May 1998 and of Corgenix's operating subsidiary
since it was founded in July 1990. From 1987 to 1990, Dr. Lopez was Vice
President of Clinical Affairs at BioStar Medical Products, Inc., a Boulder,
Colorado diagnostic firm. From 1986 to 1987 he served as Research Associate with
the Rheumatology Division of the University of Colorado Health Sciences Center,
Denver, Colorado. From 1980 to 1986 he was Professor of Immunology at Cayetano
Heredia University School of Medicine in Lima, Peru, during which time he also
maintained a medical practice with the Allergy and Clinical Immunology group at
Clinica Ricardo Palma in Lima. From 1978 to 1980 Dr. Lopez held a fellowship in
Clinical Immunology at the University of Colorado Health Sciences Center. He
received his M.D. degree in 1974 from Cayetano Heredia University School of
Medicine in Lima, Peru. He is a clinical member of the American College of
Rheumatology, and a corresponding member of the American Academy of Allergy,
Asthma and Immunology. Dr. Lopez is licensed to practice medicine in Colorado,
and is widely published in the areas of immunology and autoimmune disease.
DOUGLASS T. SIMPSON
Age: 54
Director since 1998
Mr. Simpson has been the President of Corgenix since
May 1998 and was elected a director in May 1998. Mr.
Simpson joined Corgenix's operating subsidiary as Vice
President of Business Development in 1992, was promoted
to Vice President, General Manager in 1995, to
Executive Vice President in 1996 and then to President
in February 1998. Prior to joining Corgenix's
operating subsidiary, he was a Managing Partner at
Venture Marketing Group in Austin, Texas, a health care
and biotechnology marketing firm, and in that capacity,
served as a consultant to REAADS from 1990 until 1992.
From 1984 to 1990 Mr. Simpson was employed by Kallestad
Diagnostics, Inc. (now part of BioRad Laboratories,
Inc.), one of the largest diagnostic companies in the
world, where he served as Vice President of Marketing,
in charge of all marketing and business development.
Mr. Simpson holds B.S. and M.S. degrees in Biology and
Chemistry from Lamar University in Beaumont, Texas.
JACK W. PAYNE
Age: 72
Director since March 2001
Mr. Payne was appointed as a director of Corgenix in March 2001. Mr. Payne
is currently the Chief Executive Officer and a member of the Board of Directors
of Pro Bed Medical Technology, Inc., a privately held British Columbia
manufacturer of specialty medical beds. Mr.Payne from 1992 until September 2001
was a co-founder, Executive Vice President and a member of the Board of
Directors of Sequin Medical Corporation, a privately held, Denver-based medical
device manufacturer with manufacturing facilities in Nebraska. From 1989 through
1992 Mr. Payne was founder, President and Chairman of the Board of Designer
Labels, Inc., a privately held supplier of personalized paper products. During
the 1990's, Mr. Payne served on three publicly held corporate boards: Luther
Medical, Inc., a manufacturer of medical devices (1989-1997); First Fidelity
Acceptance Corporation (1992-1997), and Marquest Medical, Inc., a manufacturer
of medical devices (1993-1998). Mr. Payne began his career with Parke Davis, and
proceeded to work for Johnson & Johnson and Baxter International, the latter for
20 years, serving as its Vice President-Canadian operations. Mr. Payne was also
a group Vice President with the R.P. Scherer Company, a pharmaceutical, device
and consumer products company, where he had worldwide responsibilities for
twelve operating companies with sales in excess of $125 million. Subsequent to
his service with the R.P. Scherer Company, Mr. Payne became the chief U.S.
executive for Terumo Corporation, a Japanese Medical device, lab diagnostic, and
pharmaceutical manufacturer. He received a B.S. in Microbiology and Chemistry
from De Pauw University and completed the executive management program at the
Colgate Darden School at the University of Virginia.
WENDELL J. GARDNER
Age: 69
Director since 2001
Mr. Gardner is currently and since 1996 has been a founding member and on the
Board of Directors of Foothills Bank in Wheat Ridge, Colorado. From 1968 to 1998
Mr. Gardner served in various capacities for COBE Laboratories, Inc. (Gambro AB)
in Lakewood, Colorado, serving as their Chief Financial Officer, Vice President
for European Operations, President of COBE Cardiovascular and most recently from
1994 to 1998 as their Corporate Senior Vice President (transition to
retirement). Mr. Gardener has served on numerous boards of directors, including
Thoratec Laboratories, Inc. (1992-1997), Colorado National Bank Arvada
(1983-1993) and Colorado National Bank Lakewood (1990-1993). Mr. Gardner was the
Chairman of the Jefferson Economic Council Board of Directors from 1987-1995 and
the founding member, president and a member of the Board of Directors of the
Colorado Medical Device Association from 1994-1998 and the Commissioner of the
Colorado Advanced Technology Institute (CATI) from 1994-1998. Mr. Gardner is a
Certified Public Accountant in the State of Colorado. He received his BS degree
in Accounting and Finance from Kansas State University in 1961 and completed the
Stanford Graduate School of Business Executive Program in General Management in
1975.
JUN SASAKI
Age: 49
New Nominee
Mr. Sasaki has been the Division Officer and General Manager of the
International Diagnostic Reagents Division of Medical & Biological Laboratories
Co., Ltd. (MBL) since June 1999. From 1993 to 1999, Mr. Sasaki was the General
Manager of MBL's Sales and Marketing Department. From 1992 to 1993, he was
located in Boston, Massachusetts and was engaged in the establishment of MBL
International Corporation, a sales subsidiary of MBL. He joined MBL in 1976 and
has been instrumental in the development of a series of autoimmune products. Mr.
Sasaki received a B.E. degree from Yamanashi University in Yamanashi prefecture,
Japan.
Votes Required to Elect Directors
Directors are elected by a plurality of the votes of the shares entitled to vote
in the election and present, in person or by proxy, at the Annual Meeting. It is
anticipated that proxies will be voted for the nominees and the Board has no
reason to believe that any of the nominees will be unwilling or unable to serve
as directors, if elected. In the event that any nominee is unable to serve, the
proxy holder named in the proxies will vote for the election of such substitute
or additional nominees as the Board may propose.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" PROPOSAL ONE.
BOARD AND COMMITTEES
Structure and Operation of the Board of Directors: You should know the following
information about the structure of the Board of Directors (the "Board") and its
operations:
o Each director serves for a term of one year or until the
director's successor is duly elected, appointed or seated.
o The Board currently consists of two outside
directors (the "Outside Directors"), the
Chief Executive Officer and the President
(the Chief Operating Officer). At the 2002
Annual Meeting, stockholders are considering
the election of five directors, after which
the Board will consist of three Outside
Directors.
o None of the directors has a consulting arrangement with
Corgenix.
o The Board usually meets in scheduled meetings and conference
telephone calls. In Corgenix's 2002 fiscal year, the Board met
and/or took action by unanimous consent on 12 occasions. No
board member attended fewer than 75% of the meetings of the
Board or a committee in the last fiscal year.
Structure and Operation of the Committees: The full Board considers all major
decisions of Corgenix. However, the Board has established the following two
standing committees, both of which are chaired by Outside Directors. You should
know the following information about the operations of the two committees of the
Board:
o The Audit Committee currently consists of the
Outside Directors, Mr. Jack W. Payne and Mr.
Wendell J. Gardner, along with Messrs. Lopez
and Simpson, and its functions include:
o making recommendations to the Board regarding the
selection of independent auditors,
o reviewing the results and scope of the audit and
other services provided by Corgenix's
independent auditors, and
o reviewing and evaluating Corgenix's audit and
control functions.
One Audit Committee meeting was held during the last fiscal year.
o The Compensation Committee currently consists of
the Outside Directors, Messrs. Payne and
Gardner, along with Messrs. Lopez and
Simpson, and its functions include:
o reviewing and recommending for Board approval
compensation for executive officers, and
o making policy decisions concerning salaries and
incentive compensation for employees and
consultants of Corgenix.
No Compensation Committee meetings were held during the last fiscal
year.
Audit Committee Report
The Audit Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and financial
reporting practices of the Company. Because the Company's common stock is traded
on the Over the Counter Bulletin Board, the Company is not subject to the
listing requirements of any securities exchange or Nasdaq regarding the
membership of the Company's Audit Committee. However, two of the members of the
audit committee are independent as defined in Rule 4200(a)(15) of listing
standards for the Nasdaq Stock Market. The Audit Committee does not have a
written charter.
In discharging its responsibility for oversight of the audit process, the Audit
Committee obtained from the Company's independent auditors, KPMG LLP, a formal
written statement describing any relationships between the auditors and the
Company that might bear on the auditors' independence consistent with the
Independent Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," discussed with the auditors any relationships that might impact the
auditors' objectivity and independence and satisfied itself as to the auditors'
independence.
The Audit Committee of the Board of Directors of the Company reported the
following:
(1) The Audit Committee has reviewed the audited financial statements as of
and for the fiscal year ended June 30, 2002, with management and the
independent auditors. Management has the responsibility for preparation of
the Company's financial statements and the independent auditors have the
responsibility for auditing those statements.
(2) The Audit Committee has discussed with the independent auditors the
matters required to be discussed by SAS 61, as may be modified or
supplemented.
(3) The Audit Committee has received the written
disclosures and the letter from the independent
accountants required by Independence Standards
Board Standard No. 1 (Independence Standards Board
Standard No. 1, Independence Discussions with
Audit Committees), as may be modified or
supplemented, and has discussed with the
independent accountant the independent
accountant's independence; and
(4) Based on the review and discussion referred to in paragraphs (1) through
(3) above, the Audit Committee recommended to the Board that the audited
financial statements be included in the Company's Annual Report on Form
10-KSB for the fiscal year ended June 30, 2002.
Audit Committee of Corgenix Medical Corporation
Jack W. Payne
Wendell J. Gardner
Luis R. Lopez, M.D.
Douglass T. Simpson
Board Compensation Committee Report on Executive
Compensation (adopted via unanimous written consent)
The Company's executive compensation program is administered by the Compensation
Committee of the Board. Two of its members, Mr. Wendell Gardner and Mr. Jack
Payne, are non-employee directors. The Committee recommends the compensation of
all executive officers of the Company to the Board, including the compensation
of the executive officers named in the Summary Compensation Table. In reviewing
the compensation of individual executive officers, the Committee takes under
consideration the recommendations of management, published compensation surveys
and current market conditions.
Compensation Programs. The Company's compensation programs are aimed at enabling
it to attract and retain the best possible executive talent and rewarding those
executives commensurate with their ability and performance. The Company's
compensation programs consist primarily of base salary, bonus plan, automobile
allowance and stock option plan.
Base Salary. Base salaries for executive officers are determined in the same
manner as that of other salaried employees. Salary guidelines are established by
comparing the responsibilities of the individual's position in relation to
similar positions in other medical related companies. Individual salaries were
determined this year by considering respective levels of responsibility,
position and regional comparables, etc.
Bonus Plan. Bonuses for executive officers are determined based on achievement
of pre-established goals related to corporate sales and earnings in addition to
specific goals related to the executive's respective areas of responsibility.
Incentive Stock Option Plan. The Amended and Restated 1999 Incentive Stock Plan
is intended to encourage ownership of shares of the Company by employees,
directors and consultants of the Company, thereby providing additional
incentives for such employees, directors and consultants to promote the success
of the business. Options granted to executive officers hereunder may be either
incentive stock options or nonstatutory stock options, and shares may be sold or
granted at the discretion of the Board and as reflected in the terms of a
written stock option agreement.
Director Compensation: The Outside Directors, Mr. Jack W. Payne and Mr. Wendell
J. Gardner, currently receive an annual stock grant in addition to a cash
payment of $500 per meeting for service on the Board. Mr. Payne and Mr. Gardner
also may be reimbursed for certain expenses in connection with attendance at
Board and committee meetings. For fiscal year 2002, the Outside Directors, Mr.
Gardner and Mr. Payne, each received options to purchase 4,000 shares. Mr.
Gardner and Mr. Payne also received $500 each for each meeting they attended in
person. No compensation was paid to non-outside directors. Technical and
Scientific Advisors: Corgenix periodically draws on the expertise of several
advisors and consultants in fields related to its technology and markets.
Corgenix has a Scientific Advisory Council currently consisting of Dr. Luis
Lopez and Dr. Barry Lindenbaum. These members are available to Corgenix as
needed on an individual basis to provide advice with respect to clinical
medicine and other matters requiring scientific and clinical expertise.
Non-employee members of the Scientific Advisory Council are compensated for
participation on this board.
Compensation Committee of Corgenix Medical Corporation
Jack W. Payne
Wendell J. Gardner
Luis R. Lopez, M.D.
Douglass T. Simpson
MANAGEMENT
Directors and Executive Officers
The following table sets forth certain information with respect to the directors
and executive officers of Corgenix as of June 30, 2002:
- ------------------------------------------------------------------
Name Age Position Director/Officer
Since
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Luis R. Lopez, 54 Chief Executive 1998
M.D. Officer and
Chairman
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Douglass T. 54 President and Chief 1998
Simpson Operating Officer
- ------------------------------------------------------------------
- ------------------------------------------------------------------
W. George 71 Vice President, 1996
Fleming, Ph.D. International
Operations
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Ann L 49 Vice President, 1996
Steinbarger Sales and Marketing
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Taryn G. 43 Vice President, 1998
Reynolds Technology
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Catherine A. 37 Vice President, 1999
Fink, Ph.D. General Manager
- ------------------------------------------------------------------
- ------------------------------------------------------------------
William H. 56 Vice President and 2000
Critchfield Chief Financial
Officer
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Wendell J. 69 Director 2001
Gardner
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Jack W. Payne 72 Director 2001
Barry L. 64 Member, Scientific 2002
Lindenbaum, M.D. Advisory Council
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Luis R. Lopez, M.D. Dr. Lopez' biographical information is on page 8 of
this Proxy Statement.
Douglass T. Simpson. Mr. Simpson's biographical information is on page 8
of this Proxy Statement.
W. George Fleming, Ph.D., hasbeen the Vice President, International
Operations, of Corgenix since May 1998. Dr. Fleming joined Corgenix's operating
subsidiary as Director of European Operations in 1992, after serving as a
consultant in international distribution to Corgenix from 1990 to 1992. He was
promoted to Managing Director, European Operations, and in 1996 to Vice
President, International. Prior to joining Corgenix's operating subsidiary, Dr.
Fleming was a director of Unilever's Medical Products Group in the UK,
a(pound)41 million health care company. He joined Oxoid, a subsidiary of Brooke
Bond in 1968, serving in a number of management positions leading to his
appointment as Director of Marketing in 1976, managing their growth up
to(pound)31 million in 1985, when it was acquired by Unilever. Dr. Fleming
received a B.Sc. degree from Queens University, Belfast, Northern Ireland, and a
Ph.D. in Business Administration from Fairfax University, Baton Rouge,
Louisiana.
Ann L. Steinbarger has been the Vice President, Sales and Marketing, of
Corgenix since May 1998. Ms. Steinbarger joined Corgenix's operating subsidiary
in January 1996 as Vice President, Sales and Marketing with responsibility for
its worldwide marketing and distribution strategies. Prior to joining Corgenix,
Ms. Steinbarger was with Boehringer Mannheim Corporation, Indianapolis, Indiana,
a $200 million IVD company. At Boehringer from 1976 to 1996, she served in a
series of increasingly important sales management positions. Ms. Steinbarger
holds a B.S. degree in Microbiology from Purdue University in West Lafayette,
Indiana.
Taryn G. Reynolds has been a Vice President of Corgenix since May 1998. Mr.
Reynolds joined Corgenix's operating subsidiary in 1992, serving first as
Director of Administration, then as Managing Director, U.S. Operations. He has
served as Vice President, Operations and in 1999, became Vice President,
Technology. Prior to joining Corgenix, Mr. Reynolds held executive positions at
Brinker International, MJAR Corporation and M&S Incorporated, all Colorado-based
property, operational and financial management firms.
Catherine A. Fink, Ph.D., was elected Vice President, General Manager of
the Company on October 7, 1999. She had been Corgenix's Executive Scientific
Director since May 1998. Dr. Fink joined Corgenix's operating subsidiary in 1996
as Director of Research and Development with responsibility for product
development, and in 1997 was promoted to Executive Scientific Director with
additional responsibilities for Quality Control. She chairs Corgenix's technical
committee. Prior to joining Corgenix, Dr. Fink was with DDx, Inc., a Denver,
Colorado based privately-held biotechnology firm from 1994 until 1996, and from
1993 to 1994 was Product Development Manager at Trinity Biotech plc., an Irish
biotechnology company which develops and manufactures rapid saliva and blood
based diagnostic tests. From 1990 to 1993, she was with Biosyn Ltd. (Belfast), a
manufacturer of diagnostic tests for medical and veterinary applications. Dr.
Fink received a B.Sc. (with Honors) from University College Dublin, and a Ph.D.
in immunology from the National University at Ireland.
William H. Critchfield, has been Vice President and Chief Financial Officer
of the Company since December 2000. Prior to joining Corgenix, Mr. Critchfield
was Executive Vice President and Chief Financial Officer of U.S. Medical, Inc.,
a Denver, Colorado based privately held distributor of new and used capital
medical equipment. From May of 1994 through July of 1999, he served as President
and Chief Financial Officer of W.L.C. Enterprises, Inc., a retail business
holding company. From November 1991 to May 1994, Mr. Critchfield served as
Executive Vice President and Chief Financial Officer of Air Methods Corporation,
a publicly traded company which is the leading U.S. company in the air medical
transportation industry and was the successor company to Cell Technology, Inc.,
a publicly traded biotechnology company, where he served in a similar capacity
from 1987-1991. From 1986 through September 1987 he served as Vice President of
Finance and Administration for Biostar Medical Products, Inc., a developer and
manufacturer of diagnostic immunoassays. In the past, Mr. Critchfield also
served as Vice President of Finance for Nuclear Pharmacy, Inc. (now Syncor,
Inc.), a publicly traded company and the world's largest chain of centralized
radiopharmacies. Mr. Critchfield is a certified public accountant in Colorado.
He graduated magna cum laude from California State University-Northridge with a
Bachelor of Science degree in Business Administration and Accounting.
Jack W. Payne, Mr. Payne's biographical information is on page 9 of
this Proxy Statement.
Wendell J. Gardner, Mr. Gardner's biographical information is
on page 9 of this Proxy Statement.
Barry L. Lindenbaum, M.D., has been an advisor to Corgenix's operating
subsidiary with respect to the research and development activities since January
2002. He is currently a consultant to the Veterans Hospital, Denver, Colorado.
Dr. Lindenbaum previously was a member of the board of directors of the
Physicians Component of Comprecare HMO and participated on many of its
committees. At the present time, he is a managing partner of two physicians
buildings and managed the financing of one of those buildings. Dr. Lindenbaum is
the author of ten medical publications. His education includes a B.S. in
Chemical Engineering, a B.A. in Applied Science, a M.S. in Physiology, and an
M.D. from the University of Chicago. While at the University of Chicago, he was
involved in a research investigation evaluating immunologic responses. Dr.
Lindenbaum's orthopedic surgery residency was at the Combined Harvard Orthopedic
Program. While there he also participated in a joint research project with
M.I.T. Dr. Lindenbaum has served on the Board of Directors of Image Scans, a
privately held company.
EXECUTIVE COMPENSATION
Compensation
The following table shows how much compensation was paid by Corgenix for the
last three fiscal years to Corgenix's Chief Executive Officer and each other
executive officer whose total annual salary and bonus exceeded $100,000 for
services rendered to the subsidiary during such fiscal years (collectively, the
"Named Executive Officers").
Summary Compensation Table
Annual Cash Long-Term
Compensation Compensation
-----------------------
Name and Principal Fiscal Salary Options(# of
Position Year and Bonus* Shares)
-----------------------------------------------------
Dr. Luis R. Lopez .. 2002 $160,000 -
Chairman and Chief 2001 $160,000 -
Executive Officer 2000 $160,000 2,280
Douglass T. 2002 $140,000 -
Simpson ............ 2001 $140,000 20,328
President, Chief 2000 $140,000 1,880
Operating Officer
Ann L. Steinbarger . 2002 $125,000 -
Vice President, 2001 $107,292 15,881
Sales and Marketing 2000 $100,000 2,080
William H. 2002 $125,000 -
Critchfield ........ 2001 - 21,881
Vice President and 2000 - -
Chief Financial
Officer
* No bonuses were paid to any officer in any of the three years reported.
Long-Term Incentive Compensation
No stock options were granted to any of the Named Executive Officers during the
fiscal year ended June 30, 2002.
During the fiscal year ended June 30, 2002, there were also no issuances of
stock under the Stock Compensation Plan.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table sets forth information concerning option exercises by the
Named Executive Officers during the fiscal year ended June 30, 2002 and
outstanding options held by the Named Executive Officers as of June 30, 2002:
Number Number of Shares Value of
of Underlying In-the-Money
Shares Unexercised Options at
Acquired Value Options at FY-End FY-End ($)
Name Exercise on Realized ($) Exer/Unexercisable Exer/Unexercisable(1)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dr. Luis R. 0 0 2,280 / 0 0 / 0
Lopez.......
Douglass T. 0 0 8,656 / 13,552 0 / 0
Simpson.....
Ann L. 0 0 7,374 / 10,587 0 / 0
Steinbarger.
William H. 0 0 10,235 / 11,646 0 / 0
Critchfield.
- ----------------
(1) Based on the price of the Company's common stock
at June 30, 2002 of $0.60 per share.
Employment and Consulting Agreements
Corgenix has entered into employment agreements with the following officers as
of the respective dates and for the minimum annual salaries as noted opposite
each of their names:
o Luis R. Lopez, M.D. - $160,000, dated April 1, 2001
o Douglass T. Simpson - $140,000, dated April 1, 2001
o William H. Critchfield--$125,000, dated March 1, 2001
o Ann L. Steinbarger - $125,000, dated April 1, 2001
o Taryn G. Reynolds - $100,000, dated April 1, 2001
o Catherine A. Fink, Ph.D. - $100,000, dated April 1, 2001
Each of the above employment agreements is for continuous renewable terms of
three years, provides for severance payments equal to twelve month's salary and
benefits if the employment of the officer is terminated without cause (as
defined in the respective agreements), and an automobile expense reimbursement
of $500 per month.
Corgenix has also executed a consulting contract with Wm. George Fleming,
Ph.D., Corgenix's Vice President, International Operations, for an annual fee of
$125,000.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of Corgenix is currently composed of the Outside
Directors Messrs. Gardner and Payne along with Messrs. Lopez and Simpson. No
interlocking relationship exists between any member of the Board or Compensation
Committee and any member of the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past.
COMPLIANCE WITH SECTION 16 (a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16 (a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors and executive officers, as well as persons beneficially
owning more than 10% of the Company's outstanding Common Stock, to file reports
of ownership and changes in ownership with the Commission within specified time
periods. Such officers, directors and stockholders are also required to furnish
the Company with copies of all Section 16 (a) forms they file.
Based solely on its review of such forms received by it, or written
representations from certain reporting persons, the Company believes that all
Section 16 (a) filing requirements applicable to its officers, directors and 10%
stockholders were complied with during the fiscal year ended June 30, 2002.
BENEFICIAL OWNERSHIP
OF CORGENIX MEDICAL STOCK
The following table sets forth as of June 30, 2002, certain information
regarding the ownership of Corgenix's common stock by (i) each person known by
Corgenix to be the beneficial owner of more than 5% of the outstanding shares of
common stock, (ii) each of Corgenix's directors, (iii) each Named Executive
Officer and (iv) all of Corgenix's executive officers and directors as a group.
Unless otherwise indicated, the address of each person shown is c/o Corgenix,
12061 Tejon Street, Westminster, CO 80234. Beneficial ownership, for purposes of
this table, includes options to purchase common stock that are either currently
exercisable or will be exercisable within 60 days of June 30, 2002. Other than
Dr. Lopez, no other director or executive officer beneficially owned more than
5% of the common stock. Directors and executive officers as a group beneficially
owned 15.1% of the common stock.
- ----------------------------------------------------------
Shares Beneficially Owned
- -------------------------------- --------------------------
- -------------------------------- --------------------------
Name of Beneficial Owner Number Percent
- -------------------------------- ---------- ---------
Dr. Luis R. Lopez(1)......... 439,633 10.1%
Dallas Marckx................ 288,000 6.7%
Raul Diez Canseco............ 224,645 5.2%
Jana Hartinger Mazzini....... 219,158 5.1%
Jack W. Payne(1) ............ 20,000 *
Douglass T. Simpson (1)...... 73,672 1.7%
Ann L. Steinbarger(1)........ 30,689 *
William H. Critchfield....... 12,235 *
All current directors and
current executive officers as
a group (9 persons) 576,229 13.3%
* Less than 1%
(1) Current director or officer.
COMMON STOCK PERFORMANCE
The common stock of Corgenix is reported on the Nasdaq Over-the-Counter Bulletin
Board (R) under the symbol "CONX." The common stock began active trading in June
1998.
The following table sets forth the high and low quarterly closing prices for our
common stock for the periods indicated as reported by OTCBB. No dividends have
been declared or paid on Corgenix's common stock during such periods. Corgenix
does not intend to declare or pay cash dividends on its common stock in the
foreseeable future, but rather to retain any earnings to finance the growth of
its business. Any future determination to pay dividends will be at the
discretion of the Board and will depend on results of operations, financial
condition, contractual and legal restrictions and other factors the Board deems
relevant. The stock price performance shown below is not necessarily indicative
of future price performance:
Stock Price Ranges
Stock Price Dates High Low
----------------- ------------------
Quarter Ended:
-------------
September 30, 2002 $.80 $.31
Fiscal Year 2002
----------------
Quarter Ended:
June 30, 2002 $1.02 $.45
March 31, 2002 $1.55 $.76
December 31, 2001 $1.25 $.95
September 30, 2001 $1.50 $1.05
Fiscal Year 2001:
-----------------
Quarter Ended:
June 30, 2001 $1.75 $.65
March 31, 2001 $1.00 $.45
December 31, 2000 $1.25 $.45
September 30, 2000 $1.56 $.90
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
On October 1, 2001, the Company entered into two notes payable with one of its
officers. The first note was for $67,460 and was payable by the Company in
monthly principal payments of $5,868 plus interest at 8% per annum over a twelve
month period, and was paid in full as of September 2002. The second note was for
91,797 pounds sterling (approximately $132,000) and is payable by the Company in
monthly principal payments of 4,004 pounds sterling (approximately $5,766) plus
interest at 8% per annum over twenty-five months. There have not been any other
transactions, or series of similar transactions, since the beginning of the
Company's last fiscal year, or any currently proposed transaction, or series of
similar transactions, to which the Company or any of its subsidiaries was or is
to be a party, in which the amount involved exceeds $60,000 and in which any
director or executive officer of the Company, nominee for election as a
director, any five percent security holder or any member of the immediate family
of any the foregoing persons had, or will have, a direct or indirect material
interest.
PROPOSAL 2
APPROVAL OF THE AMENDED AND RESTATED 1999
INCENTIVE STOCK PLAN
Introduction
On October 3, 2002, the Board approved an amendment to Section 3(a) of the 1999
Incentive Stock Plan (the "1999 Plan"), subject to stockholder approval. The
Company is proposing to amend the 1999 Plan to increase the aggregate number of
shares that may be issued under the 1999 Plan to 800,000.
History of the 1999 Plan
On October 27,1999, the Board approved the 1999 Plan and recommended to the
stockholders that they approve the 1999 Plan which provided that 1,000,000
shares of common stock be reserved for issuance there under. The 1999 Plan was
presented to and approved by the stockholders at the Company's annual meeting on
January 26, 2000. A copy of the 1999 Plan was attached as an exhibit to the
proxy statement sent to the stockholders dated as of December 15, 1999, but the
body of the proxy statement erroneously stated that an aggregate of 500,000
shares of common stock were reserved for issuance under the 1999 Plan.
The stockholders approved a one-for-five reverse stock split on January 15,
2002. As of the date of this Proxy Statement, the Company had purportedly
granted options to purchase 210,480 (post-split) shares of common stock pursuant
to the 1999 Plan, 110,480 shares more than the December 15, 1999 proxy statement
stated were reserved for issuance under the 1999 Plan, none of which have been
exercised as of the date hereof.
The Company has acknowledged that the last 110,480 options granted by the
Company under the 1999 Plan were invalidly granted because they were issued
above and beyond the number of shares reserved by the stockholders for issuance
under the 1999 Plan. The Company and the holders of such options have agreed
that such options shall be deemed void ab initio.
The Company is now proposing to amend the 1999 Plan and reissue such options as
shall be determined by the Board.
Purpose
The Amended and Restated 1999 Incentive Stock Plan (the "Amended 1999 Plan") is
intended to encourage ownership of shares of Corgenix by its employees,
directors and consultants by providing an additional incentive to promote the
success of the business. Options granted are either incentive stock options or
nonstatutory stock options, and shares may be sold or granted to employees or
consultants at the discretion of the Board and as reflected in the terms of a
written stock option agreement, stock purchase agreement or stock grant
agreement. The Board believes that the proposed amendment is necessary to enable
the Company to meet its anticipated needs.
If approved, Section 3(a) of the Amended 1999 Plan would state as follows:
(a) There will be reserved for use from time to time under the Plan, an
aggregate of 800,000 shares of Stock of $.001 par value of the
Corporation, subject to adjustment as provided in Section 9 below. As the
Board of Directors of the Corporation shall from time to time determine,
the Shares may be in whole or in part, authorized but unissued Shares or
issued Shares which shall have been reacquired by the Corporation. If an
Option should expire or become unexercisable for any reason without having
been exercised in full the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan unless the
Plan shall have been terminated.
SUMMARY OF THE AMENDED 1999 PLAN
The full text of the Amended 1999 Plan is set forth as Attachment A to this
proxy statement. The following summary of the Amended 1999 Plan is qualified by
reference to that text.
Shares Subject to the Amended and Restated Stock Plan
800,000 shares of common stock have been reserved for issuance under the Amended
1999 Plan, subject to adjustment. The Board will make the determination on
whether the shares under the Amended 1999 Plan may be authorized but unissued
shares or issued shares that will be reacquired by Corgenix. If an option
expires or becomes unexercisable for any reason without having been exercised in
full, the unpurchased shares shall become available for future grant or sale
under the Amended 1999 Plan unless the Amended 1999 Plan has been terminated.
Administration
The Amended 1999 Plan will be administered by the Board or a committee appointed
by the Board (the Committee") consisting of a majority of non-employee directors
(as defined in Rule 16b-3 under the Securities Act of 1934).
The Board of the Committee will have full authority to:
o Administer the Amended 1999 Plan;
o Interpret and construe any provision of the
Amended 1999 Plan; and
o Adopt such rules and regulations for administering the Amended 1999 Plan
as it may deem necessary to:
o Comply with the requirements of the Amended 1999 Plan;
o Retain the classification of an incentive stock option under the
Internal Revenue Code of 1986, as amended (the "Code"); and
o Conform to any regulation or to any change in any law or regulation
applicable thereto.
The Board may reserve to itself any of the authority granted to the Committee as
set forth in the Amended 1999 Plan, and may perform and discharge all of the
functions and responsibilities of the Committee at any time when a duly
appointed Committee is not serving.
No director may act upon a grant of an option under the Amended 1999 Plan to
such director, but he may be counted in determining the existence of a quorum.
Powers of the Board
Subject to the provisions of the Amended 1999 Plan, the Board will have the
discretionary authority:
(i) to grant incentive stock options to employees or
nonstatutory stock options to employees,
directors, or consultants;
(ii) to sell or grant stock to employees, directors or
consultants;
(iii) to determine, upon review of the relevant
information, the fair market value of the stock;
(iv) to determine the exercise price per share of options to be granted,
which exercise price shall be determined in accordance with the
Amended 1999 Plan;
(v) to determine the employees, directors and consultants to whom, and
the time or times at which, options shall be granted and the number
of shares to be represented by each option;
(vi) to interpret the Amended 1999 Plan;
(vii) to prescribe, amend, and rescind rules and regulations
relating to the Amended 1999 Plan;
(viii) to determine the terms and provisions of each stock option agreement
and each stock restriction agreement granted (which need not be the
same for each option granted, or sale or grant of Stock) and, with
the consent of the holder thereof, modify, terminate or amend such
agreement;
(ix) to accelerate or defer (with the consent of the optionee) the
exercise date of any option;
(x) to authorize any person to execute on behalf of Corgenix any
instrument required to effectuate the grant of an option or the sale
or grant of any stock; and
(xi) to make all other determinations deemed necessary or advisable for
the administration of the Amended 1999 Plan.
Eligibility
Options may be granted and stock may be sold or granted to employees, directors
and consultants, provided that only employees of Corgenix may be granted
incentive stock options. Any eligible employee, director or consultant who has
been granted either an option or stock or has purchased any stock under the
Amended 1999 Plan may be granted additional options or additional shares of
stock.
Incentive Stock Option Limitation
In no event will an incentive stock option be granted to any person who, at the
time of such grant, owns (as defined in Section 422 of the Code) shares
representing more than 10% of the total combined voting power of all classes of
shares of Corgenix or of its parent or subsidiary corporation ("10% beneficial
owners"), unless:
o the option price is at least 110% of the fair
market value of the stock subject to the option, and
o such option is by its terms not exercisable after the expiration of five
years from the date such option is granted.
During any single calendar year, the aggregate fair market value (determined as
of the time of grant) of the shares with respect to which incentive stock
options are exercisable for the first time by any individual employee, director
or consultant under any of Corgenix's incentive stock option plans (or its
parent and subsidiary corporations, if any) may not exceed $100,000.
Price
The per share exercise price for any option and the price for any stock to be
sold will be determined by the Board. However, the exercise price of the shares
covered by each incentive stock option will be at least 100% of the fair market
value of the shares at the time of grant, unless such grant is made to a 10%
beneficial owner.
The exercise price of a nonstatutory stock option may not be less than 85% of
the fair market value on the date of grant.
Payment
The purchase price for any sale of stock is to be paid at the time of purchase
and the exercise price paid in full in cash or such other lawful consideration
approved by the Board.
Options
Subject to the provisions of the Amended 1999 Plan, the Board will determine for
each option (which options do not need to be identical):
o the number of shares for which the option will be
granted;
o the option price of the option; and
o all other terms and conditions of the option.
Each option granted under Amended 1999 Plan will:
o have a term up to seven (7) years from the date of grant or up to five (5)
years from the date of grant if an incentive stock option is granted to a
10% beneficial owner, unless shorter terms are provided in the stock
option agreements;
o be exercisable at such times and under such conditions as
determined by the Board;
o be subject to the performance criteria with respect to Corgenix
or the optionee, or both, as permissible under the Amended 1999 Plan;
o not be exercised for a fraction of a share; and
o be deemed to be exercised when:
o written notice of such exercise has been given to Corgenix in
accordance with the terms of the
option by the person entitled to exercise the
option, and
o full payment for the shares with respect to which
the option is exercised has been received by
Corgenix.
The Board has sole discretion to permit an optionee to surrender to Corgenix
shares of stock previously acquired by the optionee at least six (6) months
prior to such surrender as part or full payment for the exercise of an option.
Exercise of an option in any manner will result in a decrease in the number of
shares which may be available after such exercise by the number of shares as to
which the option is exercised, both for purposes of the Amended 1999 Plan and
for sale under the option.
Termination of Employment
In the event that the employment of an employee, director or consultant or the
engagement of a director or consultant to whom an option was granted terminates
without cause, other than by reason of death or disability, such option may be
exercised (to the extent that such person will have been entitled to do so at
the termination of his employment or engagement) at any time within three (3)
months after such termination. To the extent that the option holder was not
entitled to exercise his option at the time of his or her termination, or
insofar as he or she does not exercise such option to the extent he or she was
entitled to within the time specified, the option will terminate at the time of
such termination.
Disability of an Optionee
In the event an optionee is unable to continue his or her employment with or to
perform services for the benefit of Corgenix as a result of his or her total and
permanent disability (as defined in Section 22(e)(3) of the Code), he or she
may, but only within one (1) year after termination due to such disability,
exercise his option to the extent he or she was entitled to exercise it at the
date of such disability. To the extent that he or she was not entitled to
exercise the option at the date of disability, or insofar as he or she does not
exercise such option to the extent he or she was entitled within the time
specified, the option will terminate.
Death of an Optionee
Unless otherwise set forth in the option, agreement, in the event of the death
of an optionee, the option may be exercised by the optionee's estate or by a
person who acquired the right to exercise the option by bequest or inheritance,
but only to the extent of the right to exercise that had accrued at the date of
death, at any time within one (1) year following the date of death if:
(i) the optionee dies during the term of the option and is at the time of
his death an employee, director or consultant of Corgenix who will
have been in continuous status as an employee, director or consultant
since the date of grant of the option; or
(ii) the option dies within three (3) months after the termination of
continuous status as an employee, director or consultant of Corgenix.
Non-Transferability
The options may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the optionee, only by
the optionee.
Adjustments Upon Changes in Capitalization
Subject to any required action by the stockholders of Corgenix:
o the number of shares of stock covered by each
outstanding option,
o the number of shares of stock that have been authorized for issuance under
the Amended 1999 Plan (but as to which no stock has been sold or granted,
or no options have yet been granted or which have been returned to the
Amended 1999 Plan upon cancellation or expiration of an option upon
termination of employment), and
o the price per share of stock covered by each such outstanding option shall
be proportionately adjusted as determined by the Board for:
o any increase or decrease in the number of issued
shares of stock resulting from a stock split,
o the payment of a stock dividend with respect to
the stock, or
o any other increase or decrease in the number of
issued shares of stock effected without receipt of
consideration by Corgenix;
provided, however, that conversion of any convertible securities of Corgenix
will not be deemed to have been "effected without receipt of consideration."
Except as expressly provided in the Stock Plan, no issuance by Corgenix of
shares of stock of any class, or securities convertible into shares of stock of
any class, will affect, and no such adjustment will be made with respect to, the
number or price of shares of stock subject to an option.
Liquidation or Merger
In the event of a proposed dissolution or liquidation of Corgenix, the option
shall terminate immediately prior to the consummation of such proposed action,
unless otherwise provided by the Board. The Board has sole discretion in such
instances to declare that any option shall terminate as of a date fixed by the
Board and to give each optionee the right to exercise his option as to all or
any part of the shares covered by an option, including shares as to which the
option would not otherwise be exercisable.
In the event of a proposed sale of all or substantially all of the assets of
Corgenix, or the merger or consolidation of Corgenix with or into another
corporation in a transaction in which Corgenix does not survive or any other
transaction in which there is a change of more than 50% in the voting control of
Corgenix, all options held by any consultant, employee or director will vest and
may be fully exercised without regard to the normal vesting schedules of the
options in the event such individual's employment or other status with Corgenix
is involuntarily terminated without cause (as defined in Section 7(e) of the
Amended 1999 Plan) in connection with the transaction or within one year after
closing of the transaction.
Withholding Taxes
Corgenix may take such steps as it may deem necessary or appropriate for the
withholding of any taxes which Corgenix is required by law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign, to
withhold in connection with any option. This step may include requiring the
optionee to pay such tax at the time of exercise or the withholding of issuance
of shares of stock to be issued upon the exercise of any option until the
optionee reimburses Corgenix for the amount Corgenix is required to withhold
with respect to such taxes. Corgenix has the sole discretion to allow such taxes
to be satisfied by withholding optioned shares.
Right of First Refusal
Any shares issued under the Amended 1999 Plan, including shares issued upon
exercise of options, are subject to a right of first refusal held by Corgenix.
Prior to any proposed transfer of the shares, the holder of the shares is to
deliver to Corgenix written notice of the proposed transfer, designating the
number of shares, the proposed transferee, and the price and terms (if any)
offered for the shares. Corgenix has thirty (30) days from receipt of the notice
to provide written notice to the holder to purchase any or all of the shares
designated in the notice at the price and terms set forth in the notice (if any)
or for cash at the then-current fair market value set by the Board. Corgenix may
assign all or any part of this right to any third party, who may then purchase
the shares directly from the holder. If Corgenix or any assignee fails to
exercise this right as to all of the shares set forth in the original notice,
the holder may, within thirty (30) days after such failure to exercise, transfer
the shares to the proposed transferee in accordance with such notice.
Effectiveness of Amended 1999 Plan
The 1999 Plan became effective on October 27, 1999 and the Amended 1999 Plan
became effective on October 3, 2002, subject to stockholder approval.
Termination and Amendment of the Amended 1999 Plan
The Amended 1999 Plan terminates on December 31, 2009, and no options will be
granted under the Amended 1999 Plan after that date.
The Board may at any time and from time to time modify or amend the Amended 1999
Plan in such respects as it deems advisable. The Board may not, however, without
approval by a majority in interest of all of the voting shares of Corgenix:
o increase the total number of shares covered by the
Amended 1999 Plan,
o change the formula for determining the exercise
price or the maximum term of options,
o materially lessen the requirements as to
eligibility for participation in the Amended 1999
Plan, and
o change the class of persons eligible to receive options or rights under
the Amended 1999 Plan, including the definitions of "employee," "director"
and "consultant."
TAX CONSEQUENCES OF THE PLAN
The following is a general summary of certain federal income tax consequences
that may apply to recipients of stock options under the Amended 1999 Plan.
Because the application of tax laws may vary according to individual
circumstances, a participant should seek professional tax advice concerning the
tax consequence of participating in the Amended 1999 Plan, including the
potential application and effect of state, local and foreign tax laws and estate
and gift tax considerations.
Incentive Stock Options
A participant who is granted an incentive stock option recognizes no taxable
income when the incentive stock option is granted. Generally, no taxable income
is recognized upon exercise of an incentive stock option unless the alternative
minimum tax applies as described below. Instead, a participant who exercises an
incentive stock option recognizes taxable gain or loss when the participant
sells his or her shares. Any gain or loss recognized on the sale of shares
acquired upon exercise of an incentive stock option is taxed as long term
capital gain or loss if the shares have been held for more than one (1) year
after the option was exercised and for more than two (2) years after the option
was granted. In this event, Corgenix receives no deduction with respect to the
incentive stock option shares.
Long-term capital gains of individuals presently may be taxed at lower rates
than ordinary income, but the deductibility of capital loses remains subject to
limitation.
If the participant disposes of the shares within one (1) year after the option
was exercised or within two (2) years after the option was granted (a
"disqualifying disposition"), the participant recognizes ordinary income on
disposition of the shares, to the extent of the difference between the fair
market value on the date of exercise (or potentially a date up to six months
thereafter if the participant is subject to Section 16(b) of the Exchange Act
with respect to such disposition) and the option price; provided, however, that
in the case of a disposition where a loss, if sustained, would be recognized for
tax purposes, the ordinary income recognized shall not exceed the net gain upon
such disposition. Any additional gain will be taxed as capital gain. Any loss
will be taxed as a capital loss. Corgenix generally receives a corresponding
deduction in the year of disposition equal to the amount of ordinary income
recognized by the participant.
Effect of Alternative Minimum Tax
Certain taxpayers who have significant tax preferences (and other items allowed
favorable treatment for regular tax purposes) may be subject to the alternative
minimum tax ("AMT"). AMT is payable only if and to the extent that it exceeds
the taxpayer's regular tax liability, and any AMT paid generally may be credited
against subsequent regular tax liability.
For purposes of AMT, an incentive stock option is treated as if it were a
non-statutory stock option (see below). Thus, the difference between fair market
value on the date of exercise (or potentially up to six months thereafter) and
the option price is included in income for AMT purposes, and the taxpayer
receives a basis equal to such fair market value for subsequent AMT purposes.
However, regular tax treatment (see above) will apply for AMT purposes if a
disqualifying disposition, where a loss, if sustained, would be recognized,
occurs in the same taxable year as the options are exercised.
Non-Statutory Stock Options
The tax treatment of non-statutory stock options differs significantly from the
tax treatment of incentive stock options. No taxable income is recognized when a
non-statutory stock option is granted, but upon the exercise of a non-statutory
stock option, the difference between the fair market value of the shares on the
date of exercise and the option price is taxable as ordinary income and
generally is deductible by Corgenix.
If the participant is subject to Section 16(b) of the Exchange Act, the date for
measuring taxable income potentially may be deferred for up to six months after
the date of exercise unless the optionee makes an election under Section 83(b)
of the Code within thirty (30) days after exercise. If a Section 83(b) election
is made, the participant will be taxed currently upon exercise of the
non-statutory stock option in an amount equal to the excess, if any, of the fair
market value of the shares at that time over the option price. Any future
appreciation in the shares will be treated as capital gain upon the sale or
exchange of the shares.
Change in Control
If there is an acceleration of the vesting or exercisability of stock options
upon a change in control (as defined in the Amended 1999 Plan), all or a portion
of the accelerated benefits may constitute "Excess Parachute Payments" under
Section 280G of the Code. The employee receiving an Excess Parachute Payment
incurs a non-deductible excise tax of 20% of the amount of the payment in excess
of the employee's average annual compensation over the five calendar years
preceding the year of the change in control and Corgenix is not entitled to a
deduction for such excess amount.
SUMMARY OF STOCK OPTION INFORMATION
The following table sets forth as of June 30, 2002, the options to purchase
common stock granted under the 1999 Plan to certain executive officers of the
Company, to all executive officers as a group, and to all other employees. All
amounts are shown on a post one-for-five reverse stock split basis.
Luis Douglass William W. Ann Taryn Catherine All All
R. T. H. George L. G. A. Officers Other
Lopez Simpson Fleming Reynolds Fink (7 in Employees
Critchfield Steinbarger Group)
---------------------------------------------------------------------
---------------------------------------------------------------------
Options
Granted
- -------
Number
of
shares 2,280 22,208 21,881 2,280 17,961 20,654* 14,985 102,249 3,600
Average
Exercise
price
per
share $1.37 $0.838 $0.752 $0.625 $0.852 $0.686 $0.868 $.803 $3.28
Options
Exercised
- ---------
Number
of
shares 0 0 0 0 0 0 0 0 0
Net
value
realized 0 0 0 0 0 0 0 0 0
* Includes warrants to purchase 5,869 shares of common stock granted on June 1,
2000.
VOTE REQUIRED; BOARD RECOMMENDATION
Each holder of common stock is entitled to one vote per share held. The
affirmative vote of holders of a majority of the outstanding shares of common
stock of the Company entitled to vote at the Annual Meeting is required for
approval of Proposal Two. In the event that a quorum is not present or
represented at the Annual Meeting, the stockholders entitled to vote at the
Annual Meeting present, in person or by proxy, shall have the power to adjourn
said meeting until a quorum shall be present or represented. Proxies solicited
by the Board will be voted for approval of Proposal Two. A stockholder voting
through a proxy who abstains with respect to approval of Proposal Two shall be
considered to have cast a negative vote with respect to Proposal Two.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" PROPOSAL TWO.
PROPOSAL 3
APPROVAL OF THE AMENDED AND RESTATED EMPLOYEE STOCK
PURCHASE PLAN
Introduction
On October 3, 2002, the Board approved an amendment to Section V(a) of the
Employee Stock Purchase Plan ("ESPP"). The Company is proposing to amend the
ESPP to increase the aggregate number of shares that may be issued under the
ESPP to 200,000.
History of the ESPP
On October 27, 1999, the Board approved the ESPP and recommended to the
stockholders that they approve the ESPP which provided that the total number of
shares subject to the ESPP was 500,000 shares of common stock. The ESPP was
presented to and submitted to the Company's stockholders for approval at the
Company's annual meeting on January 26, 2000. A copy of the ESPP was attached as
an exhibit to the proxy statement sent to the stockholders dated as of December
15, 1999, but the body of the proxy statement erroneously stated that the total
number of shares subject to the ESPP was 150,000 shares.
As of the date of this Proxy Statement, the Company has issued 66,109
(post-split) shares of common stock pursuant to the ESPP, 36,109 shares more
than the December 15, 1999 proxy statement stated were subject to the ESPP. The
Company requests that the stockholders ratify the issuance of all 66,109 shares
that have been issued under the ESPP.
Purpose
The Amended and Restated Employee Stock Purchase Plan (the "Amended ESPP") is
intended to provide eligible employees of Corgenix with an opportunity to
acquire a proprietary interest in Corgenix at a discount through their
participation in a plan designed to qualify as an employee stock purchase plan
under Section 423 of the Code. The Board believes that the proposed amendment is
necessary to enable the Company to meet its anticipated needs if approved,
Section V(a) of the Amended ESPP would state as follows:
(a) Common Stock. The stock which is purchasable by
--------------
Participants shall be the Company's authorized but unissued or reacquired
Common Stock, par value $.001 per share (the "Common Stock"). In order to have
shares available for sale under the Plan, the Company may repurchase shares of
Common Stock on the open market, or issue authorized but unissued stock. The
maximum number of shares which may be sold to employees during any single
purchase period shall be established by the Plan Administrator prior to the
beginning of the purchase period; provided however, that the total number of
shares which may be sold to employees throughout the entire duration of the Plan
shall not exceed 200,000 shares subject to adjustment under subparagraph (b)
below.
SUMMARY OF THE AMENDED ESPP
The full text of the Amended ESPP is set forth as Attachment B to this Proxy
statement. The following summary of the Amended ESPP is qualified by reference
to that text.
Administration
The Amended ESPP will be administered by the Board (the "Plan Administrator"),
which may from time to time delegate all or part of its authority to a committee
composed of at least two (2) members of the Board, all of whom will be
non-employee directors (as defined under Rule 16b-3 of the Exchange Act). The
Plan Administrator has full authority to:
o administer the Amended ESPP;
o adopt such rules and regulations for administering the Amended ESPP as
it may deem necessary in order to comply with the requirements of
Section 423 of the Code; and
o delegate to an agent or agents any of its responsibilities
under the Amended ESPP except its responsibilities to:
o establish the number of shares available for
purchase by eligible employees during any
purchase period,
o establish the maximum and minimum percentage of
base compensation to be paid by any single
employee for the purchase of common stock
during any of the periods, and
o construe and interpret the provisions of the
Amended ESPP.
No individual member of the Plan Administrator will be personally liable for any
action, determination or interpretation made in good faith with respect to the
Amended ESPP, and all individual members of the Plan Administrator will, in
addition to their rights, if any, as directors, be fully protected by Corgenix
with respect to any such action, determination or interpretation.
Purchase Period
Unless otherwise determined by the Plan Administrator, a "Purchase Period" will
commence on the first day of each calendar quarter and will terminate on the
last day of each such quarter. The Plan Administrator may establish differing
commencement dates and durations; provided however, that in no event will a
Purchase Period extend beyond twenty-seven (27) months, nor will two (2)
Purchase Periods run concurrently.
Securities to be Offered
The stock purchasable by participants in the Amended ESPP will be Corgenix's
authorized but unissued or reacquired common stock. In order to have shares
available for sale under the Amended ESPP, Corgenix may repurchase shares of
common stock on the open market, or issue authorized but unissued common stock.
The maximum number of shares that may be sold to employees during any single
Purchase Period will be established by the Plan Administrator prior to the
beginning of the Purchase Period; provided however, that the total number of
shares which may be sold to employees throughout the entire duration of the
Amended ESPP will not exceed 200,000 shares (subject to adjustment as described
below).
Eligibility and Participation
Every employee of Corgenix who, on the commencement date of a subject Purchase
Period, is actively employed (unless temporarily off the payroll due to illness,
vacation, jury duty or other employer-approved absence) on a basis which
customarily requires not less than twenty (20) hours of service per calendar
week (a "Participant") is eligible to participate in the Amended ESPP during
such Purchase Period. An eligible employee may participate in the Amended ESPP
at the beginning of a particular Purchase Period by completing the enrollment
forms prescribed by the Plan Administrator and filing such forms at least
fifteen (15) days prior to such Purchase Period.
Purchase of Securities Pursuant to the Amended ESPP
An eligible employee who becomes a Participant for a particular Purchase Period
will have the right, as of the beginning of the Purchase Period, to purchase
common stock upon the terms and conditions of the Amended ESPP and will execute
a purchase agreement embodying such terms and conditions and such other
provisions, not inconsistent with the Amended ESPP, as the Plan Administrator
may deem advisable.
Each Participant will, for any Purchase Period, have the right to purchase
common stock with a total purchase price equal to a designated percentage
between one percent (1%) and ten percent (10%) of each Participant's
compensation. A "Participant's Compensation" for a particular Purchase Period is
the amount of the Participant's after tax base salary or wages and overtime pay
but excluding bonuses and other incentive payments. No right to purchase common
stock under the Amended ESPP will be granted to an employee if such employee
would, immediately after the grant, own shares possessing five percent (5%) or
more of the total combined voting power or value of all classes of shares of
Corgenix as defined in Section 424(f) of the Code.
Termination of Participation
A Participant may, at any time prior to the last day of the Purchase Period,
terminate his or her right to purchase stock under the Amended ESPP by filing
the prescribed notification form. A Participant's termination of his or her
right to purchase will be irrevocable with respect to the Purchase Period to
which it pertains. Upon such election, the entire balance collected during such
Purchase Period will be refunded in cash and no further amounts will be deducted
from the Participant's payroll.
Purchase Price
The purchase price per share of common stock under the Amended ESPP will be 85%
of the fair market value of a share of common stock on the commencement date of
the subject Purchase Period or on the last day of the Purchase Period, whichever
is lower. The fair market value of a share of common stock on any date is to be
the closing sales price, as quoted by the National Association of Securities
Dealers through NASDAQ National Market System, for the date in question, or, if
the common stock is listed on a national stock exchange, the officially-quoted
closing sales price on such exchange on the date in question.
Payment of Purchase Price
Payment of the purchase price for common stock under the Amended ESPP will be
effected by means of payroll deduction in an amount equal to the percentage of
the Participant's Compensation designated by the Participant in the purchase
agreement. A Participant may, only once during a Purchase Period (other than by
reason of termination), reduce the percentage of compensation to be paid for
shares of common stock to a lesser whole percentage by giving written notice to
the Plan Administrator.
Adjustments to Securities
In the event any change is made to the common stock purchasable under the
Amended ESPP (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend in excess of 10% at any single time, stock
split, combination of shares, exchange of shares, change in corporate structure
or otherwise), then appropriate adjustments will be made to:
o the maximum number of shares purchasable under the
Amended ESPP,
o the maximum number of shares purchasable under any
right to purchase common stock outstanding under the
Amended ESPP, and
o the number of shares and price per share subject to rights to purchase
common stock outstanding under the Amended ESPP.
Termination of Employment
If a Participant ceases to be an employee of Corgenix for any reason (including
death or retirement) during a Purchase Period, the Participant or the
Participant's personal representative has thirty (30) days thereafter to elect
to either receive a stock certificate for the number of shares of common stock
paid for during the Purchase Period up to the day prior to the date of the
Participant's cessation of employment or receive a cash refund of all sums
previously collected during such Purchase Period. Failure to make a timely
election will be treated as an election to receive a cash refund.
Exercise
Each right to purchase common stock under the Amended ESPP other than a purchase
right which has been accelerated under the Amended ESPP or which has been
previously terminated under the Amended ESPP will be exercised automatically on
the last day of the Purchase Period. Within forty-five (45) days after the end
of each Purchase Period, the Participant, or his or her nominee, will be issued
a stock certificate for the whole number of shares for which the Participant's
right to purchase has been exercised. Not more than one certificate will be
issued pursuant to the exercise of any right to purchase common stock under the
Amended ESPP. Any excess of the amount previously collected during the Purchase
Period over the purchase price of the issued shares will be promptly refunded or
left on deposit for the ensuing quarterly period.
If the total number of shares of common stock purchasable under the purchase
agreement of all Participants for a particular Purchase Period exceed the number
of shares available under the Amended ESPP, then the Plan Administrator will
make a pro rata allocation of the available shares and will notify the
Participants of such allocation.
Tax Effects of Plan Participation
A general summary of certain federal income tax consequences is provided that
may apply to Participants under the Amended ESPP. Because the application of tax
laws may vary according to individual circumstances, a Participant should seek
professional tax advice concerning the tax consequences of participating in the
Amended ESPP, including the potential application and effect of state, local and
foreign tax laws and estate and gift tax considerations.
A Participant who purchases common stock under the Amended ESPP recognizes no
taxable income when the shares are purchased. A Participant who purchases common
stock under the Amended ESPP recognizes taxable gain or loss when the shares are
sold. The difference between the discount purchase price paid by the Participant
for the shares and the actual value of the shares at the end of the Purchase
Period is always considered ordinary income. Any gain or loss recognized on the
sale of shares acquired upon the purchase is taxed as long-term capital gain or
loss if the shares have been held by the Participant for more than two (2) years
from the end of the applicable Purchase Period. In this event, Corgenix receives
no deduction with respect to the shares. Long-term capital gains of individuals
presently may be taxed at lower rates than ordinary income, but the
deductibility of capital losses remains subject to limitation.
If a Participant disposes of the shares purchased under the Amended ESPP within
one (1) year from the end of the applicable Purchase Period, the fifteen percent
(15%) discount between the actual purchase price paid by the Participant and the
fair market value at the end of such Purchase Period is considered ordinary
income. The difference between the actual value of the shares at the end of such
Purchase Period and the time of sale by the Participant is considered short-term
capital gain.
If the shares have been held by the Participant more than one (1) year but less
than two (2) years from the end of the applicable Purchase Period (a
"disqualifying disposition"), the Participant recognizes ordinary income on the
disposition of the shares to the extent of the difference between the discounted
purchase price paid by the Participant and the fair market value of the shares
at the end of the Purchase Period (or potentially a date up to six months
thereafter if a Participant is subject to Section 16(b) of the Securities
Exchange Act of 1934 with respect to such disposition). Any additional gain for
shares sold by the Participant under this disqualifying disposition is taxed as
long-term capital gain.
If the shares are sold at a loss by the Participant within one (1) year from the
end of the Purchase Period in which the shares were purchased, the loss will be
considered a short-term capital loss. However, if such shares are sold by the
Participant at a loss after one (1) year from the end of the applicable Purchase
Period, the loss will be considered a long-term capital loss. Corgenix generally
receives a corresponding deduction in the year of disposition equal to the
amount of ordinary income recognized by the Participant.
Withholding Taxes
Corgenix may withhold any taxes required by any law or regulation of any
governmental authority, whether federal, state or local, in connection with the
purchase of common stock under the Amended ESPP or the sale of such stock that
is not held for at least two (2) years after the beginning of the Purchase
Period during which the common stock was purchased. Such withholding may include
all or any portion of any payment or other compensation payable to the
Participant, unless the Participant reimburses Corgenix for such amount.
Assignability
Unless otherwise determined by the Board, no right to purchase common stock
granted under the Amended ESPP is assignable or transferable by a Participant
other than by will or the laws of descent and distribution, and during the
lifetime of the Participant, such purchase rights will be exercisable only by
the Participant.
Accrual Limitations
No Participant will be entitled to accrue rights to purchase common stock under
the ESP Plan which, when aggregated with purchase rights accruable by him under
other qualified employee stock purchase plans (within the meaning of Section 423
of the Code) of Corgenix (as defined in Section 424(f) of the Code), would
permit such Participant to purchase more than $25,000 worth of common stock
(determined on the basis of the fair market value of common stock on the date
the Participant accrues purchase rights under the Amended ESPP) for each
calendar year such purchase rights are at any time outstanding.
Amendment and Termination
The Board may from time to time alter, amend, suspend or discontinue the Amended
ESPP; provided, however, that no such action will adversely affect rights and
obligations with respect to rights to purchase common stock at the time
outstanding under the Amended ESPP. In addition, no action may be taken by the
Board without the approval of the stockholders of Corgenix that would:
o increase
o the number of shares subject to the Amended ESPP, or
o the maximum number of shares for which a right to purchase common
stock under the Amended ESPP may be exercised (unless necessary to
effect the adjustments as described below);
o extend the term of the Amended ESPP;
o alter the per share purchase price formula so as
to reduce the purchase price per share specified
in the Amended ESPP;
o materially increase the benefits accruing to
participants under the Amended ESPP;
o materially modify the requirements for eligibility
to participate in the Amended ESPP; or
o cause the Amended ESPP to fail to meet the requirements of an "employee
stock purchase plan" under Section 423 of the Code.
Change in Control of Corgenix
Subject to the limitations on amending the Amended ESPP, in the event Corgenix
or its stockholders enter into an agreement to dispose of all or substantially
all of the assets or outstanding capital stock of Corgenix by means of sale,
merger, reorganization or liquidation, each Participant of the Amended ESPP may
either receive a stock certificate for the number of shares of common stock paid
for during the Purchase Period up to the day prior to such transaction date or
receive a cash refund of deposits collected during such Purchase Period.
VOTE REQUIRED; BOARD RECOMMENDATION
Each holder of common stock is entitled to one vote per share held. The
affirmative vote of holders of a majority of the outstanding shares of common
stock of the Company entitled to vote at the Annual Meeting is required for
approval of Proposal Three. In the event that a quorum is not present or
represented at the annual meeting, the stockholders entitled to vote at the
Annual Meeting present, in person or by proxy, shall have the power to adjourn
said meeting until a quorum shall be present or represented. Proxies solicited
by the Board will be voted for approval of Proposal Three. A stockholder voting
through a proxy who abstains with respect to approval of Proposal Three shall be
considered to have cast a negative vote with respect to Proposal Three.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" PROPOSAL THREE.
PROPOSAL 4
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors recommended, and the Board has
selected, subject to ratification by a majority vote of the stockholders in
person or by proxy at the Annual Meeting, the firm of KPMG LLP to continue as
the Company's independent public accountant for the current fiscal year ending
June 30, 2002. KPMG LLP served as the principal independent public accounting
firm utilized by us during the year ended June 30, 2001. We anticipate that a
representative of KPMG LLP will attend the Annual Meeting for the purpose of
responding to appropriate questions. At the Annual Meeting, a representative of
KPMG LLP will be afforded an opportunity to make a statement if KPMG LLP so
desires.
KPMG LLP billed the Company $63,000 for professional services rendered for the
annual audit and quarterly reviews of the Company's financial statements. KPMG
LLP did not provide financial information system design or implementation
services or any other services to the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE "FOR" RATIFYING THE APPOINTMENT OF KPMG LLP AS
THE COMPANY'S INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS
No stockholder proposals were received by Corgenix for inclusion in this year's
Proxy Statement. If a stockholder wishes to present a proposal to be included in
the proxy statement for the next annual meeting of stockholders, the proposal
must be submitted in writing and received by the Corporate Secretary of Corgenix
at its corporate offices located at 12061 Tejon Street, Westminster, Colorado
80234, no later than September 1, 2003.
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN
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Attachment A
CORGENIX MEDICAL CORPORATION
AMENDED AND RESTATED 1999 INCENTIVE STOCK PLAN
1. Purpose of Plan. This Incentive Stock Plan is intended to encourage
ownership of shares of CORGENIX MEDICAL CORPORATION (the "Corporation") by
Employees, Directors and Consultants of the Corporation, thereby providing
additional incentive for such Employees, Directors and Consultants to promote
the success of the business. Options granted hereunder may be either Incentive
Stock Options or Nonstatutory Stock Options, and Shares may be sold or granted
to Employees or Consultants hereunder at the discretion of the Board and as
reflected in the terms of a written stock option agreement stock purchase
agreement or stock grant agreement.
2. Definitions. As used herein, the following
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definitions shall apply:
(a) "Board" shall mean the Committee, if one has been appointed, or
the Board of Directors of the Corporation, if no Committee is appointed.
(b) "Code" shall mean the Internal Revenue Code of 1986, the rules
and regulations promulgated there under and the interpretations thereof, all as
from time to time in effect.
(c) "Corporation" shall mean Corgenix
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Medical Corporation, a Nevada corporation.
(d) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan, if one is appointed.
(e) "Consultant" shall mean any person, including directors,
performing services for the benefit of the Corporation or any Parent or
Subsidiary of the Corporation as an independent consultant or adviser.
(f) "Continuous Status as an Employee or a Consultant" shall mean the
absence of any interruption or termination of service as an Employee, a Director
or a Consultant, as applicable. Continuous Status as an Employee shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Board, provided that either such leave is for a
period of not more than ninety (90) days or reemployment upon the expiration of
such leave is provided or guaranteed by contract or statute.
(g) "Director" shall mean a member of the
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Corporation's Board of Directors.
(h) "Employee" shall mean any person employed by the Corporation or
any Parent or Subsidiary of the Corporation in a management position or in a
position requiring specialized training or expertise. The payment of a
director's fee by the Corporation shall not be sufficient to constitute
"employment" by the Corporation.
(i) "Fair Market Value" shall mean the value determined in good faith
by the Board; provided, however, that if there is a public market for the Stock,
the Fair Market Value shall mean the average of the closing bid and asked prices
of a share of Stock, as reported by The Wall Street Journal (or, if not
reported, as otherwise quoted by the National Association of Securities Dealers
through NASDAQ), on the date of the grant of the Option, or, if the Stock is
listed on the NASDAQ National Market System or is listed on a national stock
exchange, the closing price on such System or such exchange on the date of the
grant of the Option, as reported in The Wall Street Journal. In the event the
Stock is not traded publicly, the Fair Market Value of a share of Stock on the
date of the grant of the Option shall be determined, in good faith, by the Board
or the Committee and such determination shall be conclusive for all purposes.
The Board or Committee shall take into account such factors affecting value as
it, in its sole and absolute discretion, may deem relevant.
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(j) "Incentive Stock Option" shall mean an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
(k) "Nonstatutory Stock Option" shall mean an Option not intended to
qualify as an Incentive Stock Option.
(l) "Option" shall mean a stock option
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granted pursuant to the Plan.
(m) "Optioned Stock" shall mean the Stock
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subject to an Option.
(n) "Optionee" shall mean an Employee,
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Director or Consultant who receives an Option.
(o) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 425(e) of the Code.
(p) "Plan" shall mean this Incentive Stock
----
Plan.
(q) "Share" shall mean a share of the Stock, as adjusted in
accordance with Section 9 of the Plan.
(r) "Stock" shall mean the Common Stock of
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the Corporation.
(s) "Stock Option Agreement" shall mean the written agreement setting
forth the grant of an Option and terms and conditions relating thereto (which
need not be the same for each Option).
(t) "Stock Restriction Agreement" shall mean the written agreement
setting forth the terms of any restrictions in connection with a sale or grant
of Stock under this Plan, in the form as the Board in its discretion may
approve.
(u) "Subsidiary" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 425(f) of the Code.
3. Shares Subject to Plan.
----------------------
(a) Authorized Shares. There will be reserved for use from time to
time under the Plan, an aggregate of 800,000 shares of Stock of $.001 par value
of the Corporation, subject to adjustment as provided in Section 9 below. As the
Board of Directors of the Corporation shall from time to time determine, the
Shares may be in whole or in part, authorized but unissued Shares or issued
Shares which shall have been reacquired by the Corporation. If an Option should
expire or become unexercisable for any reason without having been exercised in
full the unpurchased Shares which were subject thereto shall become available
for future grant or sale under the Plan unless the Plan shall have been
terminated.
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(b) Reservation of Shares. The Corporation, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan. The inability of
the Corporation for reasons outside the Corporation's control to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Corporation's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Corporation of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
4. Administration of Plan.
----------------------
(a) General. The Plan shall be administered by the Board of Directors
or, if appointed, by a Committee, a majority of which shall be "disinterested"
as defined in Rule 16b-3 under the Securities Exchange Act of 1934. The Board
and the Committee shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan and to adopt such
rules and regulations for administering the Plan as it may deem necessary in
order to comply with the requirements of the Plan, or in order that any Option
that is intended to be an Incentive Option will be classified as an incentive
stock option under the Code, or in order to conform to any regulation or to any
change in any law or regulation applicable thereto. The Board of Directors may
reserve to itself any of the authority granted to the Committee as set forth
herein, and it may perform and discharge all of the functions and
responsibilities of the Committee at any time that a duly constituted Committee
is not appointed and serving.
(b) Actions of the Board and Committee. All actions taken and all
interpretations and determinations made by the Board or by the Committee in good
faith (including determinations of Fair Market Value) shall be final and binding
on all Employees, Directors, Consultants and Optionees, the Corporation and all
other interested persons. No member of the Committee shall be personally liable
for any action or determination made in good faith in connection with this Plan,
and all members of the Board or the Committee shall, in addition to their rights
as directors, be fully protected by the Corporation with respect to any such
action, determination or interpretation.
(c) Interested Directors. Members of the Board who are either
eligible for Options or have been granted Options may vote on any matters
affecting the administration of the Plan or the grant of any Options pursuant to
the Plan, except that no such member shall act upon the granting of an Option to
himself or herself, but any such member may be counted in determining the
existence of a quorum at any meeting of the Board or Committee during which
action is taken with respect to the granting of Options to said Board or
Committee member.
(d) Powers of the Board. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion: (i) to grant Incentive Stock
Options to Employees or Nonstatutory Stock Options to Employees, Directors, or
Consultants; (ii) to sell or grant Stock to Employees, Directors or Consultants;
(iii) to determine, upon review of the relevant information, the Fair Market
Value of the Stock; (iv) to determine the exercise price per share of Options to
be granted, which exercise price shall be determined in accordance with Section
6 of the Plan; (v) to determine the Employees, Directors and Consultants to
whom, and the time or times at which, Options shall be granted and the number of
shares to be represented by each Option; (vi) to interpret the Plan; (vii) to
prescribe, amend, and rescind rules and regulations relating to the Plan; (viii)
to determine the terms and provisions of each Stock Option Agreement and each
Stock Restriction Agreement granted (which need not be the same for each Option
granted, or sale or grant of Stock) and, with the consent of the holder thereof,
modify, terminate or amend such Agreement; (ix) to accelerate or defer (with the
consent of the Optionee) the exercise date of any Option; (x) to authorize any
person to execute on behalf of the Corporation any instrument required to
effectuate the grant of an Option or the sale or grant of any Stock; and (xi) to
make all other determinations deemed necessary or advisable for the
administration of the Plan.
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5. Eligibility.
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(a) Generally. Options may be granted and Stock may be sold or
granted to Employees, Directors and Consultants, provided that Incentive Stock
Options may only be granted to Employees. Any Employee, Director or Consultant
who has been granted an Option, or purchased or been granted any Stock may, if
he is otherwise eligible, be granted additional Options, or be granted or
purchase additional shares of Stock.
(b) Criteria. In making any determination as to Employees, Directors
and Consultants to whom Options shall be granted or Stock shall be sold or
granted, the Committee shall take into account such factors as it shall deem
relevant in accomplishing the purpose of the Plan, including but not limited to
the Employee's, Director's or Consultant's loyalty, performance, and experience.
(c) ISO Limitations with Respect to Price. In no event shall an
Incentive Stock Option be granted to any person who, at the time such Option is
granted, owns (as defined in Section 422 of the Code) shares possessing more
than 10% of the total combined voting power of all classes of shares of the
Corporation or of its parent
or subsidiary corporation, unless the option price is at least 110% of the Fair
Market Value of the stock subject to the Option, and such Option is by its terms
not exercisable after the expiration of five (5) years from the date such Option
is granted.
(d) ISO Limitations with Respect to Shares. Moreover, the aggregate
Fair Market Value (determined as of the time that option is granted) of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by any individual Employee, Director or Consultant during any single
Calendar Year under this Plan and all the incentive stock option plans of the
Corporation (and its parent and subsidiary corporations, if any), shall not
exceed $100,000.
(e) No Employee, Director or Consultant Contract. The Plan shall not
confer upon any Optionee any right with respect to continuation of employment by
or the rendition of consulting services to the Corporation, nor shall it
interfere in any way with his right or the Corporation's right to terminate his
employment or services at any time.
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6. Price.
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(a) Generally. The per share exercise price for any Option and the
price for any Stock to be sold shall be such price as is determined by the
Board. However, the exercise price of the Shares which shall be covered by each
Incentive Stock Option shall be at least 100% of the Fair Market Value of the
Shares at the time of granting the Incentive Stock Option. The exercise price of
a Nonstatutory Stock Option shall not be less than 85% of the Fair Market Value
on the date of the grant of the Option. If an Incentive Stock Option is granted
to an Optionee who then owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation or its Parent
or any Subsidiary, the exercise price shall be as set forth in Section 5(c)
above.
(b) Payment. The purchase price for any sale of Stock shall be paid
at the time of purchase and the exercise price shall be paid in full at the time
of exercise of the Option in cash or in such other form of lawful consideration
as the Board of Directors or the Committee may approve from time to time,
including, without limitation, the transfer of outstanding shares of Stock as
provided in Section 7(d), or the Employee's, Director's or Consultant's
promissory note in form satisfactory to the Corporation and bearing interest at
not less than the applicable federal rate.
7. Options.
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(a) Generally. Subject to the provisions of the Plan, the Board shall
determine for each Option (which need not be identical) the number of shares for
which the Option shall be granted, the Option price of the Option, and all other
terms and conditions of the Option.
(b) Time of Granting Options. Neither anything contained in the Plan
or in any resolution adopted or to be adopted by the Board of Directors or the
stockholders of the Corporation nor any action taken by the Committee shall
constitute the granting of any Option. The granting of an Option shall take
place only when a written Stock Option Agreement shall have been duly executed
and delivered by or on behalf of the Corporation and the person to whom such
Option shall be granted.
(c) Term of Option. The term of each Option may be up to seven (7)
years from the date of grant thereof or such shorter term as may be provided in
the Stock Option Agreement. However, in the case of an Incentive Stock Option
granted to an Employee, Director or Consultant who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Corporation or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant thereof or such shorter time as may be provided in the Stock
Option Agreement.
(d) Exercise of Option.
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(i) Any Option granted hereunder shall be exercisable at such
times and under such conditions as determined by the Board, including
performance criteria with respect to the Corporation or the Optionee, or both,
and as shall be permissible under the terms of the Plan.
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(ii) An Option may not be exercised
for a fraction of a Share.
(iii) An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Corporation in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Corporation. The Board, in its sole discretion, may permit an
Optionee to surrender to the Corporation shares of Stock previously acquired by
the Optionee at least six (6) months prior to such surrender as part or full
payment for the exercise of an Option. Such surrendered shares shall be valued
at their Fair Market Value on the date of exercise of the Option. Until the
issuance of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option.
(iv) Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.
(v) Except as otherwise specifically provided herein, an Option
may not be exercised at any time unless the holder thereof shall have maintained
Continuous Status as a Management Member, Employee, Director or Consultant of
the Corporation or of one or more of its subsidiaries, or a parent corporation,
from the date of the granting of the Option to the date of its exercise.
(e) Termination of Employment. In the event that the employment of an
Employee, Director or Consultant or the engagement of a Director or Consultant
to whom an Option shall have been granted shall be terminated other than by
reason of death or disability, such Option may be exercised (to the extent that
the Employee, Director or Consultant shall have been entitled to do so at the
termination of his employment or engagement) at any time within three months
after such termination, but in any event no later than the date of expiration of
the Option term. Notwithstanding this three-month period, if the holder of an
Option (i) is terminated for "cause" (as hereinafter defined) or (ii) is
terminated due to his expropriation of Corporation property (including trade
secrets or other proprietary rights), the Board shall have the authority, by
notice to the holder of an Option, to immediately terminate such Option,
effective on the date of termination of employment, and such Option shall no
longer be exercisable to any extent whatsoever. As used herein, "cause" shall
mean that the holder of an Option has willfully and intentionally engaged in
material misconduct, gross neglect of duties or grossly negligent failure to act
which materially and adversely affects the business or affairs of the
Corporation, or has committed any act of fraud or any act not approved by the
Board involving any material conflict of interest or self-dealing adverse to the
Corporation, or has been convicted of a felony or any offense involving moral
turpitude, or has unreasonably failed to comply with any reasonable direction
from the Board or its Chairman with respect to a major policy decision affecting
the Corporation, issued pursuant to its authority under the Bylaws of the
Corporation, which direction is approved by a majority of the Board. So long as
the holder of an Option shall maintain Continuous Status as an Employee,
Management Member, Director or Consultant of the Corporation or one or more of
its subsidiaries, his Option shall not be affected by any change of duties or
position. To the extent that the holder of an Option was not entitled to
exercise his Option at the time of his termination, or insofar as he does not
exercise such Option to the extent he was entitled within the time specified
herein, the Option shall itself terminate at the time of such termination.
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(f) Disability of Optionee. Notwithstanding the provisions of Section
7(e) above, in the event an Optionee is unable to continue his employment with
or to perform services for the benefit of the Corporation as a result of his
total and permanent disability (as defined in Section 22(e)(3) of the Code), he
may, but only within one (1) year after termination due to such disability,
exercise his Option to the extent he was entitled to exercise it at the date of
such disability. To the extent that he was not entitled to exercise the Option
at the date of disability, or insofar as he does not exercise such Option to the
extent he was entitled within the time specified herein, the Option shall
terminate.
(g) Death of Optionee. Unless otherwise set
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forth in the Option Agreement, in the event of the
death of an Optionee:
(i) if Optionee dies during the term of the Option and is at the
time of his death an Employee, Director or Consultant of the Corporation who
shall have been in Continuous Status as an Employee, Director or Consultant
since the date of grant of the Option, the Option may be exercised, at any time
within one (1) year following the date of death, by the Optionee's estate or by
a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had accrued at
the date of death; or
(ii) if Optionee dies within three (3) months after the
termination of Continuous Status as an Employee, Director or Consultant, the
Option may be exercised, at any time within one (1) year following the date of
death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of such termination.
8. Non-Transferability of Options. The Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
9. Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Corporation, the number of shares of Stock
covered by each outstanding Option and the number of shares of Stock which have
been authorized for issuance under the Plan but as to which no Stock has been
sold or granted, or no Options have yet been granted or which have been returned
to the Plan upon cancellation or expiration of an Option upon termination of
employment, as well as the price per share of Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from a stock split,
the payment of a stock dividend with respect to the Stock, or any other increase
or decrease in the number of issued shares of Stock effected without receipt of
consideration by the Corporation; provided, however, that conversion of any
convertible securities of the Corporation shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding, and
conclusive. Except as expressly provided herein, no issuance by the Corporation
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to an Option.
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10. Liquidation or Merger of the Corporation.
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(a) Liquidation. In the event of a proposed dissolution or
liquidation of the Corporation, the Option shall terminate immediately prior to
the consummation of such proposed action, unless otherwise provided by the
Board. The Board may, in the exercise of its sole discretion in such instances,
declare that any Option shall terminate as of a date fixed by the Board and give
each Optionee the right to exercise his Option as to all or any part of the
Shares covered by an Option, including Shares as to which the Option would not
otherwise be exercisable.
(b) Sale of Assets, Merger, Consolidation or Other Change of Control.
In the event of a proposed sale of all or substantially all of the assets of the
Corporation, or the merger or consolidation of the Corporation with or into
another corporation in a transaction in which the Corporation does not survive
or any other transaction in which there is a change of more than fifty percent
(50%) in the voting control of the Corporation, all Options held by any
Consultant, Employee or Director shall vest and may be fully exercised without
regard to the normal vesting schedules of the Options in the event such
individual's employment or other status with the Corporation is involuntarily
terminated without cause (as defined in Section 7(e) of the Plan) in connection
with the transaction or within one year after closing of the transaction. Any
such fully vested Option shall be exercisable in accordance with the terms of
Section 7(e) of the Plan.
11. Withholding Taxes; Satisfied by Withholding Optioned Shares.
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(a) General. The Corporation, its Parent or any Subsidiary may take
such steps as it may deem necessary or appropriate for the withholding of any
taxes which the Corporation, its Parent or any Subsidiary is required by law or
regulation of any governmental authority, whether Federal, state or local,
domestic or foreign, to withhold in connection with any option including, but
not limited to, requiring the Optionee to pay such tax at the time of exercise
or the withholding of issuance of shares of Stock to be issued upon the exercise
of any Option until the Optionee reimburses the Corporation for the amount the
Corporation is required to withhold with respect to such taxes, or, at the
Corporation's sole discretion, satisfy such taxes by withholding optioned shares
pursuant to Section 11(b) below.
(b) Satisfying Taxes by Withholding Optioned Shares. All Federal and
state taxes required to be withheld or collected from an Optionee upon exercise
of an Option may be satisfied by the withholding of a sufficient number of
exercised Option Shares which, valued at Fair Market Value on the date of
exercise, would be equal to the total withholding obligation of the Optionee for
the exercise of such Option; provided, however, that if the Corporation is a
public reporting corporation, no person who is an "officer" of the Corporation
as such term is defined in Rule 3B-2 under the Securities Exchange Act of 1934
may elect to satisfy the withholding of Federal and state taxes upon the
exercise of an Option by the withholding of Optioned Shares unless such election
is made either (i) at least six months prior to the date that the exercise of
the Option becomes a taxable event or (ii) during any of the periods beginning
on the third business day following the date on which the Corporation issues a
news release containing the operating results of a fiscal quarter or fiscal year
and ending on the twelfth business day following such date. Such election shall
be deemed made upon receipt of notice thereof by an officer of the Corporation,
by mail, personal delivery or by facsimile message, and shall (unless notice to
the contrary is provided to the Corporation) be operative for all Option
exercises which occur during the twelve-month period following election.
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12. Issuance of Shares.
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(a) Shares shall not be issued pursuant to the exercise of an Option
unless the exercise of such Option and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Corporation with respect to such
compliance.
(b) As a condition to the grant of an Option or the sale or grant of
any Stock, the Corporation may impose various conditions, including a
requirement that the person exercising such Option or purchasing or receiving
such Stock represent and warrant, at the time of any such exercise, that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares and such other restrictions on such Shares
relating to employment or other matters as may be determined by the Committee.
(c) Any shares issued under the Plan, including shares issued upon
exercise of Options, shall be subject to a right of first refusal held by the
Corporation. Prior to any proposed transfer of the shares, the holder of the
shares shall deliver to the Corporation written notice of the proposed transfer,
designating the number of shares, the proposed transferee, and the price and
terms (if any) offered for the shares. For thirty days following the receipt of
such notice, the Corporation shall have the right (by written notice to the
holder) to purchase any or all of the shares designated in the written notice at
the price and terms set forth in the notice (if any) or for cash at the
then-current fair market value set by the Board of Directors. The Corporation
may assign all or any part of this right to any third party, who may then
purchase the shares directly from the holder. If the Corporation or any assignee
fails to exercise this right as to all of the shares set forth in the original
notice, the holder may, within thirty days thereafter, transfer the shares to
the proposed transferee in accordance with such notice. This restriction on
transfer shall terminate upon the closing of the Corporation's initial public
offering of its Common Stock.
13. Effectiveness of Plan. The Plan shall become effective on October 27,
1999, but only if the holders of the Corporation's Common and Preferred Stock
entitled to vote on the matter shall have approved the Plan within twelve months
after such date by an affirmative vote of at least a majority of all such shares
then outstanding (on a common equivalent basis).
14. Termination and Amendment of Plan. The Plan shall terminate on
December 31, 2009, and no Option shall be granted under the Plan after that
date. The Board of Directors may at any time and from time to time modify or
amend the Plan in such respects as it shall deem advisable, provided that
without approval by a majority in interest of all the shares of the Corporation
there shall be: (a) no increase in the total number of shares covered by the
Plan (except by operation of Section 9 hereof), (b) no change in the formula for
determining the exercise price or the maximum term of Options, (c) no change
that would materially lessen the requirements as to eligibility for
participation in the Plan, and (d) no change in the class of persons eligible to
receive options or rights under the Plan, including the definitions of
"Employee," "Director" and "Consultant."
A-9
Attachment B
CORGENIX MEDICAL CORPORATION
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
I. Purpose
The Corgenix Medical Corporation Amended and Restated Employee Stock
Purchase Plan (the "Plan") is intended to provide eligible employees of Corgenix
(the "Company") with an opportunity to acquire a proprietary interest in the
Company through their participation in a plan designed to qualify as an employee
stock purchase plan under Section 423 of the Internal Revenue Code of 1986 (the
"Code").
II. Administration
(a) Plan Administrator. The Plan shall be
--------------------------
administered by the board of directors of the
Company (the "Board"), which may from time to
time delegate all or part of its authority to a
committee (the "Committee") composed of at least
two members of the Board, all of whom shall be
Non-Employee Directors. A Non-Employee Director
is a director who meets the definition of
Non-Employee Director under Rule 16b-3 of the
Securities Exchange Act of 1934 (the "1934
Act"). References herein to the Plan
Administrator refer to the Board or, to the
extent the Board delegates its authority to the
Committee, to the Committee. The Plan
Administrator may delegate to an agent or agents
any of its responsibilities under the Plan
except its responsibilities to establish the
number of shares available for purchase by
employees during any purchase period, the
maximum and minimum percentage of base
compensation to be paid by any single employee
for the purchase of stock during any of the
periods and its authority to construe and
interpret the provisions of the Plan.
(b) Actions of Plan Administrator. All actions taken
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and all interpretations and determinations made
by the Plan Administrator in good faith
(including determinations of fair market value)
shall be final and binding upon all
Participants, the Company and all other
interested persons. No member of the Plan
Administrator shall be personally liable for any
action, determination or interpretation made in
good faith with respect to the Plan, and all
members of the Plan Administrator shall, in
addition to their rights as Directors, be fully
protected by the Company with respect to any
such action, determination or interpretation.
III. Purchase Periods
The first purchase period under the Plan shall commence on February 1,
1999, and shall terminate on March 31, 1999. Unless otherwise determined
by the Plan Administrator, a purchase period shall commence on the first
day of each succeeding calendar quarter and shall terminate on the last
day of each such quarter. The Plan Administrator may, from time to time,
establish purchase periods with differing commencement dates and
durations. In no event, however, shall a purchase period extend beyond 27
months. No two purchase periods shall run concurrently.
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IV. Eligibility and Participation
(a) Every employee of the Company who, on the commencement date of the
purchase period, is employed on a basis which customarily requires
not less than 20 hours of service per calendar week is eligible to
participate in the Plan during a purchase period.
(b) An eligible employee may become a Participant in
the Plan for a particular purchase period by
completing the enrollment forms (the "Enrollment
Forms") prescribed by the Plan Administrator and
filing such forms prior to the commencement date
of the purchase period with the person
designated by the Plan Administrator. No
Enrollment Forms will be accepted from an
individual who is not on the active payroll of
the Company on the filing date, unless such
individual is temporarily off the payroll by
reason of illness, vacation, jury duty or other
employer-approved absence.
V. Stock Subject to Plan
(a) Common Stock. The stock which is purchasable by
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Participants shall be the Company's authorized
but unissued or reacquired Common Stock, par
value $.001 per share (the "Common Stock"). In
order to have shares available for sale under
the Plan, the Company may repurchase shares of
Common Stock on the open market, or issue
authorized but unissued stock. The maximum
number of shares which may be sold to employees
during any single purchase period shall be
established by the Plan Administrator prior to
the beginning of the purchase period; provided
however, that the total number of shares which
may be sold to employees throughout the entire
duration of the Plan shall not exceed 200,000
shares subject to adjustment under subparagraph
(b) below.
(b) Changes in Capital Structure. In the event any
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change is made to the Common Stock purchasable
under the Plan (whether by reason of merger,
consolidation, reorganization, recapitalization,
stock dividend in excess of 10% at any single
time, stock split, combination of shares,
exchange of shares, changes in corporate
structure or otherwise), then appropriate
adjustments shall be made to the maximum number
of shares purchasable under the Plan, the
maximum number of shares purchasable under any
right to purchase stock outstanding under the
Plan, and the number of shares and price per
share of stock subject to rights to purchase
stock outstanding under the Plan.
VI. Purchase of Common Stock
(a) Right to Purchase. An eligible employee who becomes a Participant for
a particular purchase period shall have the right, as of the
beginning of the purchase period, to purchase Common Stock upon the
terms and conditions set forth below.
(b) Price Per Share. Except as provided in Section VI
----------------
(i), the purchase price per share shall be 85
percent (85%) of the fair market value of a
share of Common Stock on the commencement date
of the purchase period. If the Common Stock is
not traded publicly, the fair market value of a
share of Common Stock on any date shall be
determined, in good faith, by the Board or the
Committee after consultation with outside legal,
accounting or other experts as the Board or
Committee may deem advisable, and the Board or
Committee shall maintain a written record of its
method of determining such value. The fair
market value of a share of Common Stock on any
date shall be the closing sales price, as quoted
by the National Association of Securities
Dealers through NASDAQ National Market System,
for the date in question, or, if the Common
Stock is listed on a national stock exchange,
the officially-quoted closing sales price on
such exchange on the date in question.
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(c) Total Purchase Price. Each Participant shall, for
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any purchase period, have the right to purchase
Common Stock with a total purchase price equal
to a designated percentage of the Participant's
Compensation. A "Participant's Compensation"
for a particular purchase period shall be the
amount of the Participant's base salary or
wages, and overtime pay but excluding bonuses
and other incentive payments, that is payable to
the Participant at any time or from time to time
during the purchase period. Each Participant
shall designate in his or her purchase agreement
the whole percentage of his or her Compensation
the Participant wishes to pay for the purchase
of stock for the particular purchase period,
subject to the provisions set forth below which
shall be uniformly applied to all Participants
in a particular purchase period.
(i) The maximum percentage of a Participant's
Compensation which may be paid for the
purchase of stock in a particular purchase
period shall be ten percent (10%); provided,
however, that the Plan Administrator shall
establish prior to the beginning of the
purchase period a maximum number of shares
(subject to adjustment under Section V(b)
that may be purchased during the purchase
period by each Participant.
(ii) The minimum percentage of a Participant's Compensation which may be
paid for the purchase of stock in a particular purchase period
shall be one percent (1%).
(iii) No right to purchase shares under the Plan shall be granted to an
employee if such employee would, immediately after the grant, own
stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company as
defined in Section 424(f) of the Code. An employee's stock
ownership shall be determined under Section 424(d) of the Code and
stock which an employee may purchase under any outstanding options
shall be treated as stock owned by the employee.
Notwithstanding the provisions of paragraphs (i) and (ii), above, the
Plan Administrator may, in their discretion, establish any other
maximum and minimum percentages of Compensation to be paid for stock
under the Plan.
(d) Allocation of Available Share. Should the total
---------------------------------
number of shares of Common Stock which may be
purchased under the purchase agreements of all
Participants for a particular purchase period
exceed the number of shares available for sale
under the Plan, then the Plan Administrator
shall make a pro rata allocation of the
available shares and shall notify each
Participant of such allocation.
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<page>
(e) Payment. Payment of the purchase price for stock
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under the Plan shall be effected by means of
payroll deductions, which shall begin with the
first pay period which occurs coincident with or
immediately following the commencement date of
the relevant purchase period and shall terminate
with the last pay period which occurs on or
prior to the last day of the purchase period.
Each payroll deduction shall be an amount equal
to the percentage of the Compensation included
in that payroll payment that was designated by
the Participant in the Participant's Enrollment
Form.
(f) Termination of Right to Purchase. A Participant
-----------------------------------
may, at any time prior to the last day of the
purchase period, terminate his or her right to
purchase stock under the Plan by notifying the
Plan Administrator or its delegate in writing.
Any amounts deducted from the Participant's pay
or otherwise collected from the Participant by
reason of his or her participation in the Plan
for such purchase period shall be refunded, and
no further amounts will be collected from the
Participant (by payroll deduction or otherwise)
during the remainder of the purchase period. A
Participant's termination of his or her right to
purchase shall be irrevocable with respect to
the purchase period to which it pertains.
(g) Termination of Employment. If a Participant
------------------------------
ceases to be an employee of the Company for any
reason (including death or retirement) during a
purchase period, the Participant or the
Participant's personal representative may either
(i) receive a stock certificate for the number of shares of Common
Stock paid for pursuant to payroll deductions made on behalf of the
Participant during the purchase period up to the day prior to the
date of the Participant's cessation of employment; or
(ii) receive a cash refund of all sums previously collected from the
Participant during the purchase period.
Any election provided by this Section VI(g) shall be exercisable only
during the 30-day period following the date of the Participant's
cessation of employment (but in no event later than the last date of
the purchase period), and the underlying right to purchase stock
under the Plan shall terminate upon the exercise of such election. If
a Participant or the Participant's personal representative fails to
make a timely election under this Section VI(g), the Company shall
treat such failure as an election to exercise alternative (ii).
(h) Exercise. Each right to purchase stock under the
---------
Plan other than a right to purchase stock which
has been accelerated under the Plan or which has
been previously terminated under the Plan shall
be exercised automatically on the last day of
the purchase period. Promptly after the date of
exercise of any right to purchase stock under
the Plan, the Participant, or his or her
nominee, shall be issued a stock certificate for
the whole number of shares for which the
Participant's right to purchase has been
exercised. Not more than one certificate shall
be issued pursuant to the exercise of any right
to purchase stock under the Plan. Any excess of
the amount previously collected during the
purchase period over the purchase price of the
issued shares shall be promptly refunded or left
on deposit for the ensuing quarterly period.
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<page>
(i) Reduction of Purchase Price. If the fair market
-------------------------------
value of a share of Common Stock on the last day
of the purchase period is less than the fair
market value of such share on the commencement
date of the purchase period, then the purchase
price per share under the Plan on the last day
of the purchase period shall be reduced to 85
percent (85%) of the fair market value of such
share on the last day of the purchase period.
Each right to purchase stock under the Plan not
previously exercised or terminated shall be
automatically exercised on the last day of the
purchase period for the number of whole shares
obtained by dividing the sum on deposit from the
Participant (and not refunded) by the purchase
price per share determined under this Section
VI(i), but in no event shall any right to
purchase stock under the Plan be exercised for
more than the specified number of shares, if
any, subject to adjustment under Section V(b))
established by the Plan Administrator pursuant
to Section VI(c)(i) prior to the beginning of
the purchase period, and the balance shall be at
the sole option of the Company promptly refunded
or left on deposit for the ensuing quarterly
period. For example, if a Participant has
$1,000.00 on account and the Company's stock
price pursuant to this paragraph is determined
to be $0.68, then one thousand four hundred
seventy (1,470) shares will be issued ($1,000.00
divided by $0.68) and $0.40 will be left on
deposit or refunded as herein stated.
(j) Rights as Stockholder. A Participant shall have
-----------------------
no rights as a stockholder with respect to
shares subject to a right to purchase stock
granted under the Plan and such right to
purchase is exercised. No adjustments shall be
made for dividends, distributions or other
rights for which the record date is prior to the
date of exercise.
(k) Assignability. No right to purchase stock granted under the Plan
shall be assignable or transferable by a Participant other than by
will or by the laws of the descent and distribution, and during the
lifetime of the Participant such rights to purchase stock shall be
exercisable only by the Participant.
(l) Accrual Limitations. No Participant shall be
----------------------
entitled to accrue rights to purchase stock
under this Plan which, when aggregated with
purchase rights accruable by him under other
qualified employee stock purchase plans (within
the meaning of Section 423 of the Code) of the
Company (as defined in Section 424(f) of the
Code), would permit such Participant to purchase
more than $25,000 worth of Common Stock
(determined on the basis of the fair market
value of such Common Stock on the date the
Participant accrues purchase rights under the
Plan) for each calendar year such purchase
rights are at any time outstanding.
(m) Merger or Liquidation of Company. In the event the Company or its
stockholders enter into an agreement to dispose of all or
substantially all of the assets or outstanding capital stock of the
Company by means of sale, merger, reorganization or liquidation, each
participant may either
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<page>
(i) receive a stock certificate for the number of shares of Common
Stock paid for pursuant to payroll deductions made on behalf of the
Participant during the purchase period up to the date prior to the
date of such transaction; or
(ii) receive a cash refund of all sums previously collected from the
Participant during the purchase period.
(n) No Interest. No interest shall be paid on any
-------------
monies refunded to participants pursuant to the
provisions of this Plan.
(o) Withholding. The Company may withhold any taxes
------------
required by any law or regulation of any
governmental authority, whether federal, state
or local, in connection with the purchase of
stock under the Plan or the sale of such stock
that is not held for at least two years after
the beginning of the purchase period during
which the stock was purchased. Such withholding
may include all or any portion of any payment or
other compensation payable to the Participant,
unless the Participant reimburses the Company
for such amount.
VII. Amendment
The Board may from time to time alter, amend, suspend or discontinue the
Plan; provided, however, that no such action shall adversely affect
rights and obligations with respect to rights to purchase stock at the
time outstanding under the Plan; and provided, further, that no such
action of the Bard may, without the approval of the stockholders of the
Company, increase the number of shares subject to the Plan or the
maximum number of shares for which a right to purchase stock under the
plan may be exercised (unless necessary to effect the adjustments
required by Section V(b)), extend the term of the Plan, alter the per
share purchase price formula so as to reduce the purchase price per
share specified in the Plan otherwise materially increase the benefits
accruing to Participants under the Plan or materially modify the
requirements for eligibility to participate in the Plan. Furthermore,
the Plan may not, without the approval of the stockholders of the
Company, be amended in any manner which will cause the Plan to fail to
meet the requirements of an "employee stock purchase plan" under Section
423 of the Code.
VIII. Effective Date
This Plan was adopted by the Board to become effective on February 1,
1999, and was approved by the Company Stockholders on January 26, 2000.
B-6