<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
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
[X] Definitive proxy statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FUSION MEDICAL TECHNOLOGIES, INC.
...........................................................
(Name of Registrant as Specified in Its Charter)
...........................................................
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)and 0-11.
1) Title of each class of securities to which transaction applies:
......................................................................
2) Aggregate number of securities to which transaction applies:
......................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
......................................................................
4) Proposed maximum aggregate value of transaction:
......................................................................
5) Total fee paid:
......................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
......................................................................
2) Form, Schedule or Registration Statement No.:
......................................................................
3) Filing Party:
......................................................................
4) Date Filed:
......................................................................
<PAGE>
FUSION MEDICAL TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1998
Dear Stockholder:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Annual Meeting") of Fusion Medical Technologies, Inc., a Delaware
corporation (the "Company"), will be held on Thursday, May 21, 1998 at 10:00
a.m., local time, at the Company's headquarters located at 1615 Plymouth
Street, Mountain View, CA, for the following purposes:
1. To elect (i) two Class I Directors of the Company to serve for a
term of one year expiring upon the 1999 Annual Meeting of
Stockholders of the Company or until a successor is elected, (ii)
two Class II directors of the Company to serve for a term of two
years expiring upon the 2000 Annual Meeting of Stockholders of the
Company or until a successor is elected, and (iii) three Class III
directors of the Company to serve for a term of three years expiring
upon the 2001 Annual Meeting of Stockholders of the Company or until
a successor is elected.
2. To approve an amendment to the Company's 1993 Stock Option Plan
increasing the number of shares of Common Stock authorized for
issuance by 400,000 shares to 1,890,492 shares.
3. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
auditors for the fiscal year ending December 31, 1998.
4. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only holders of record of the Company's Common Stock at the close of
business on March 30, 1998, the record date, are entitled to notice of and
to vote at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the Annual Meeting, you
are urged to sign and return the enclosed proxy as promptly as possible in
the postage-prepaid envelope enclosed for that purpose. Any stockholder
attending the Annual Meeting may vote in person even if he or she has
returned a proxy.
By Order Of The Board Of Directors
/s/ Philip M. Sawyer
Philip M. Sawyer
President, Chief Executive Officer
and Director
Mountain View, California
April 10, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE
<PAGE>
FUSION MEDICAL TECHNOLOGIES, INC.
Proxy Statement
for
1998 Annual Meeting of Stockholders
To Be Held May 21, 1998
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Page
----
PROCEDURAL MATTERS..................................................... 1
PROPOSAL ONE - ELECTION OF DIRECTORS................................... 3
PROPOSAL TWO - AMENDMENT TO 1993 STOCK OPTION PLAN..................... 6
PROPOSAL THREE - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS... 10
SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT............... 11
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT...................... 13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION............ 13
EXECUTIVE OFFICER COMPENSATION......................................... 14
CERTAIN TRANSACTIONS................................................... 16
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS......... 17
STOCK PERFORMANCE GRAPH................................................ 19
OTHER MATTERS.......................................................... 20
</TABLE>
ii
<PAGE>
FUSION MEDICAL TECHNOLOGIES, INC.
PROXY STATEMENT
FOR
1998 ANNUAL MEETING OF STOCKHOLDERS
PROCEDURAL MATTERS
General
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Fusion Medical
Technologies, Inc. ("Fusion" or the "Company") for use at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held on Thursday, May 21, 1998
at 10:00 a.m., local time, and at any adjournment thereof, for the purposes
set forth herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at the Company's headquarters
located at 1615 Plymouth Street, Mountain View, California 94043, and the
telephone number at that location is (650) 903-4000.
These proxy solicitation materials were mailed on or about April 22,
1998, together with the Company's 1997 Annual Report to Stockholders, to all
stockholders entitled to vote at the Annual Meeting.
Record Date and Voting Securities
Stockholders of record at the close of business on March 30, 1998 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting.
As of the Record Date, 7,138,326 shares of the Company's Common Stock were
issued and outstanding. No shares of Preferred Stock were outstanding.
Revocability of Proxies
Any Proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company a
written notice of revocation or a duly executed proxy bearing a later date
or by attending the Annual Meeting and voting in person.
Voting Procedures
Each stockholder is entitled to one vote for each share of Common Stock
on all matters to be voted on by the stockholders. The affirmative vote of
a majority of the outstanding shares of Common Stock is required to approve
the matters scheduled to be voted on at the Special Meeting. Votes cast in
person or by proxy will be tabulated by Boston EquiServe, the Company's
transfer agent.
Upon the execution and return of the enclosed form of proxy, the shares
represented thereby will be voted in accordance with the terms of the proxy,
unless the proxy is revoked. If no directions are indicated in such proxy,
the shares represented thereby will be voted (i) "FOR" the election of each
of the Company's nominees as a director, (ii) "FOR" ratification and
approval of an amendment to the Company's 1993 Stock Option Plan increasing
the number of shares of Common Stock reserved for issuance by 400,000 to
1,890,492 shares, and (iii) "FOR" ratification of the appointment of Coopers
& Lybrand L.L.P. as independent auditors for the Company for fiscal 1998.
<PAGE>
Quorum; Abstentions; Broker Non-Votes
The presence, in person or by proxy, of the holders of a majority of
shares of Common Stock outstanding as of the Record Date is necessary to
constitute a quorum at the Annual Meeting. The affirmative vote of a
majority of shares present in person or represented by proxy at a duly held
meeting at which a quorum is present is required under Delaware law for
approval of the proposals presented to the stockholders.
Abstentions and broker non-votes will be included for purposes of
determining whether a quorum of shares is present at the Annual Meeting.
However, abstentions and broker non-votes will not be included in the
tabulation of the voting results on the election of directors or on issues
requiring approval of a majority of the votes cast. Under Delaware Law an
abstaining vote is not deemed to be a "vote cast." A broker non-vote occurs
when a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting
power with respect to that item and has not received instructions from the
beneficial owner.
Proxies
All shares entitled to vote and represented by properly executed
proxies received prior to the Annual Meeting will be voted at the Annual
Meeting in accordance with the instructions indicated on those proxies, if
not revoked prior thereto. If no instructions are indicated on a properly
executed proxy, the shares represented by that proxy will be voted as
recommended by the Board of Directors. If any other matters are properly
presented for consideration at the Annual Meeting, the proxy holders will
have discretion to vote on those matters in accordance with their best
judgment.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. A proxy may be revoked (i)
by delivery of a written notice of revocation or a duly executed proxy to
the Secretary of the Company bearing a date later than the prior proxy
relating to the same shares, or (ii) by attending the Annual Meeting and
voting in person (although attendance at the Annual Meeting will not itself
revoke a proxy). Any written notice of revocation or subsequent proxy must
be received by the Secretary of the Company prior to the taking of the vote
at the Annual Meeting.
Expense of Solicitation
The cost of soliciting proxies will be borne by the Company. The
Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to such beneficial owners. Proxies may also be solicited by
certain of the Company's directors, officers and employees, without
additional compensation, personally or by telephone, telegram, letter or
facsimile.
Procedure for Submitting Stockholder Proposals
Proposals of the Company's stockholders intended to be presented at the
regularly scheduled 1999 Annual Meeting of Stockholders must be received by
the Company no later than December 31, 1998, and must satisfy the
conditions established by the Securities and Exchange Commission for
stockholder proposals to be included in the Company's proxy statement for
that meeting.
2
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
General
Pursuant to the Company's Restated Certificate of Incorporation, the
Company's Board of Directors will be divided into three classes at the
Annual Meeting. Two Class I directors, two Class II directors, and three
Class III directors are to be elected at the Annual Meeting. Each of the
two Class I directors elected at the Annual Meeting will hold office until
the Company's 1999 Annual Meeting of Stockholders or until his successor has
been duly elected and qualified. Each of the two Class II directors elected
at the Annual Meeting will hold office until the Company's 2000 Annual
Meeting of Stockholders or until his successor has been duly elected and
qualified. Each of the three Class III directors elected at the Annual
Meeting will hold office until the Company's 2001 Annual Meeting of
Stockholders or until his successor has been duly elected and qualified.
The Board of Directors has nominated the persons set forth below, all
of whom are currently directors of the Company, for election as directors.
Unless otherwise instructed, the holders of proxies solicited by this Proxy
Statement will vote the proxies received by them for such nominees. In the
event that any nominee is unable or declines to serve as a director at the
time of the Annual Meeting, the proxy holders will vote for a nominee
designated by the present Board of Directors to fill the vacancy. The
Company is not aware of any reason that any nominee will be unable or will
decline to serve as a director.
Vote Required
The affirmative vote of a majority of the votes cast at the Annual
Meeting is required to elect each director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL
NOMINEES FOR DIRECTOR NAMED BELOW.
<TABLE>
<CAPTION>
Information Regarding Nominees
Name Age Principal Occupation
- ---- --- --------------------
<S> <C> <C>
Nominees for Class I Directors
Lawrence G. Mohr Jr. (1)........ 53 General Partner, Mohr,
Davidow Ventures
Olav B. Bergheim (1)............ 47 Venture Partner, Domain Associates
Nominees for Class II Directors
Douglas E. Kelly, M.D.(2)....... 37 General Partner, Asset Management
Associates, Inc.
Richard S. Schneider, Ph.D.(2).. 57 General Partner, Domain Associates
Nominees for Class III Directors
Gordon W. Russell (1)........... 64 General Partner, Sequoia Capital
Philip M. Sawyer................ 33 President, Chief Executive Officer
and Director
Vaughn D. Bryson (2)............ 59 President, Life Science Advisors
- ---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
</TABLE>
3
<PAGE>
Mr. Sawyer, a founder of the Company, has served as President and Chief
Executive Officer and as a Director since April 1993.
Mr. Russell has served as Chairman of the Board since October 1993.
Mr. Russell has been with Sequoia Capital, a venture capital firm, since
1979 as a General Partner. Mr. Russell currently serves on the Board of
Directors of Sangstat Medical Corporation, Aradigm Corporation and ChemTrak,
Inc.
Mr. Bergheim has served as a Director of the Company since October
1995. Mr. Bergheim has been a Venture Partner with Domain Associates, a
venture capital firm, since 1995. Prior to Domain Associates, Mr. Bergheim
served in various capacities in Baxter Healthcare for 18 years. Mr.
Bergheim is a director of Vista Medical Technologies, Inc.
Mr. Bryson has served as a Director of the Company since March 1996.
Mr. Bryson is President of Life Sciences Advisors, a consulting firm focused
on assisting biopharmaceutical companies in building shareholder value. Mr.
Bryson was a thirty-two year employee of Eli Lilly and Company ("Lilly") and
served as President and Chief Executive Officer of Lilly from 1991 to 1993.
He was Executive Vice President from 1986 until 1991. He served as a member
of Lilly's Board of Directors from 1984 until his retirement in 1993. Mr.
Bryson was Vice Chairman of Vector Securities International, Inc., an
investment banking firm, from April, 1994 to December 1996. Mr. Bryson is a
director of Ariad Pharmaceuticals, Inc., Chiron Corporation, Perclose, Inc.,
and Quintiles Transnational Corp. Mr. Bryson received a B.S. degree in
Pharmacy from the University of North Carolina and completed the Sloan
Program at the Stanford University Graduate School of Business.
Dr. Kelly has served as a Director of the Company since November 1993.
Dr. Kelly has been with Asset Management Associates, Inc., a venture
capital firm, since 1993, most recently as a General Partner of AMC Partners
1996, L.P.
Mr. Mohr has served as a Director of the Company since November 1993.
Mr. Mohr has been a General Partner of Mohr, Davidow Ventures, a venture
capital firm which he founded, since 1983. Mr. Mohr serves on the boards of
directors of Vida Med, Inc., Neurobiological Technologies, Inc. and Cardiac
Pathways Corporation.
Dr. Schneider has served as a Director of the Company since January
1995. Since 1990, Dr. Schneider has been a General Partner of Domain
Associates, a venture capital firm. Dr. Schneider also serves as a director
of Landec Corporation.
Board Meetings and Committees
During fiscal 1997, the Board of Directors held four meetings
(including regularly scheduled and special meetings). Mr. Mohr was unable to
attend two meetings and Mr. Bryson was unable to attend one meeting.
Certain matters were approved by the Board of Directors by unanimous written
consent.
The Board of Directors of the Company currently has two standing
committees: an Audit Committee and a Compensation Committee. The Audit
Committee is composed of Messrs. Russell, Bergheim and Mohr. The
Compensation Committee is composed of Messrs. Bryson, Kelly and Schneider.
The Company has no nominating committee or committee performing similar
functions.
4
<PAGE>
Audit Committee. The Audit Committee makes such examinations as are
necessary to monitor the corporate financial reporting and the internal and
external audits of the Company, provides to the Board of Directors the
results of its examinations and recommendations derived therefrom, outlines
to the Board improvements made, or to be made, in internal accounting
controls, nominates independent auditors, and provides to the Board such
additional information and materials as it may deem necessary to make the
Board aware of significant financial matters that require Board attention.
The Audit Committee held one meeting during fiscal 1997.
Compensation Committee. The Compensation Committee reviews the
Company's executive compensation policy, including equity compensation for
senior executives of the Company, and makes recommendations to the Board of
Directors regarding such matters. The Compensation Committee held one
meeting during fiscal 1997.
Director Compensation
Non-employee directors of the Company are not compensated in cash for
attending meetings of the Board of Directors or for Board Committee meetings
held on a different day. The Company has adopted the 1996 Directors' Option
Plan (the "Director Plan") providing for stock options to be granted to
certain non-employee directors. A total of 120,000 shares of Common Stock
has been reserved for issuance under the Director Plan. As of December 31,
1997, there were 19,200 options to purchase shares outstanding under the
Director Plan. The Director Plan provides for an automatic grant of an
option to purchase 8,000 shares of Common Stock (the "Initial Option") to
each non-employee director on the date on which such director first becomes
a director. After the Initial Option is granted to a non-employee director,
such director will automatically be granted an option to purchase 3,200
shares on the date of the Company's Annual Meeting, provided such person is
then a non-employee director, and, provided further, that on such date such
person has served on the Board for at least six months.
5
<PAGE>
PROPOSAL TWO
AMENDMENT TO
1993 STOCK OPTION PLAN
General
The Company's 1993 Stock Option Plan (the "1993 Plan") provides for the
granting to employees of incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and for the granting to employees and consultants of nonstatutory stock
options. The 1993 Plan was adopted by the Board of Directors in October
1993 and approved by the stockholders in October 1993. Unless terminated
sooner, the 1993 Plan will terminate automatically in September 2003.
In April 1998, the Board of Directors increased the shares reserved for
issuance under the 1993 Plan by 400,000 shares, bringing the total shares
currently reserved for issuance under the 1993 Plan to 1,890,492 shares.
Proposal Two seeks stockholder approval of the increase in shares reserved.
Approval of the amendment to the 1993 Plan also perfects the stockholder
approval requirement of Section 422 of the Code.
The Company believes that stock options play a key role in the
Company's ability to recruit, reward and retain executives and key
employees. Companies like Fusion have historically used stock options as an
important part of recruitment and retention packages. The Company competes
directly with other companies for experienced executives and other key
personnel and believes that it must be able to offer comparable packages to
attract the caliber of individual necessary to the Company's business.
Vote Required
The affirmative vote of a majority of the majority of the votes cast at
the Annual Meeting will be required to ratify and approve the amendment to
the 1993 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE
1993 PLAN.
The essential provisions of the 1993 Plan are outlined below.
Administration
The 1993 Plan is administered by the Board or a committee appointed by
the Board (the "Administrator"), which committee is in compliance with Rule
16b-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act").
Eligibility; Limits on Grants
The 1993 Plan provides that nonstatutory stock options may be granted
to employees, including officers, directors and consultants to the Company.
Incentive stock options may be granted only to employees, including employee
directors and officers. The Administrator approves the participants, the
time or times at which options are granted and the number of shares subject
to each option. The 1993 Plan is administered so as to satisfy certain
requirements under the federal securities laws, including under the Exchange
Act, and the Code.
6
<PAGE>
As of December 31, 1997, there were approximately 58 employees and 26
consultants currently eligible to participate in the 1993 Plan, and 81
optionees, including consultants and directors, held outstanding options
under the 1993 Plan. As of December 31, 1997, a total of 1,490,492 shares of
Common Stock has been authorized for issuance pursuant to the 1993 Plan.
256,641 shares had been issued upon the exercise of stock options granted
under the 1993 Plan, 992,017 shares were subject to outstanding options and
241,834 shares were available for future grant.
Terms of Options
The term of each option granted under the 1993 Plan is determined by
the Stock Option Agreement between the optionee and the Company but may not
be longer than ten years, except in the case of options granted to an
optionee who at the time of grant owns stock representing 10% of the voting
power of all classes of stock of the Company or any parent or subsidiary of
the Company, for whom the term of each option may not be longer than five
years. Each option is evidenced by a written agreement between the Company
and the optionee to whom such option is granted and is subject to the
following additional terms and conditions:
(a) Exercise of the Option: The Administrator determines when
options may be exercisable. Shares subject to an option generally vest
and are exercisable over a period of four years at the rate of
one-quarter of the shares on each anniversary of the option grant
subject to option. The Administrator may accelerate the vesting of any
outstanding option. The purchase price of the shares to be purchased
upon exercise of any option may be paid, at the discretion of the
Administrator, in cash, check, or other shares of Common Stock (with
some restrictions).
(b) Exercise Price: The exercise price under the 1993 Plan is
determined by the Administrator, provided that, generally in the case of
an incentive stock option, the exercise price may not be less than 100%
of the fair market value of the Common Stock on the date the option is
granted. In the case of a non-statutory stock option, the exercise
price may not be less than 85% of the fair market value of the Common
Stock on the date the option is granted. Notwithstanding the foregoing,
in the case of an incentive stock option granted to an employee or
consultant who, at the time of such grant, owns stock representing more
than 10% of the voting power of all classes of stock of the Company or
any parent or subsidiary of the Company, the exercise price may be no
less than 110% of the fair market value of the Common Stock on the date
the option is granted.
(c) Termination of Employment: If the optionee's status as an
employee or consultant terminates for any reason other than death or
disability, an option under the 1993 Plan may be exercised not later
than 30 days after such termination (but in no event later than the date
of expiration of the term of the option) and may be exercised only to
the extent such option was exercisable and vested on the date of
termination.
(d) Disability of Optionee: If an optionee's continuous status
as an employee, director or consultant terminates as a result of the
optionee's disability (as defined in Section 22 (e) (3) of the Code), an
option may be exercised within 12 months after termination of employment
due to such disability (but in no event later than the date of
expiration of the term of the option), but only to the extent such
option was exercisable and vested on the date of termination.
(e) Death of Optionee: If an optionee should die while employed
by the Company, an option may be exercised at any time within 12 months
after the date of death (but in no event later than the date of
expiration of the term of the option), but only to the extent such
options were exercisable and vested on the date of termination.
7
<PAGE>
(f) Termination of Options: Under the form of option agreement
currently used by the Company, options generally expire ten years from
the date of grant.
(g) Non-transferability of Options: Unless otherwise specified
by the Administrator, options are non-transferable by the optionee other
than by will or by the laws of descent or distribution and are
exercisable during the optionee's lifetime only by the optionee.
(h) Other Provisions: The option agreement may contain such
other terms, provisions and conditions not inconsistent with the 1993
Plan as may be determined by the Administrator.
Changes in Capitalization
In the event a change, such as a stock split or stock dividend payable
in Common Stock, is made in the Company's capitalization which results in an
exchange of Common Stock for a greater or lesser number of shares without
receipt of consideration by the Company, appropriate adjustments will be
made in the number of shares reserved for issuance and in the number of
shares subject to outstanding options under the 1993 Plan, as well as in the
price per share of Common Stock covered by such options. Such adjustment
will be made by the Board of Directors, whose determination is final,
binding and conclusive.
In the event of the proposed dissolution or liquidation of the Company,
options outstanding under the 1993 Plan will terminate immediately prior to
such action. In the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger of the Company into another
corporation, outstanding options may be assumed or an equivalent option may
be substituted by the successor entity. If such outstanding options are not
assumed or substituted, however, the Board of Directors will notify the
optionee that the option will be exercisable for a period of 45 days, after
which the option will terminate.
Amendment and Termination of the Plan
The Board of Directors may amend the 1993 Plan at any time, or may
terminate the 1993 Plan, without stockholder approval; provided, however,
that stockholder approval is required for any amendment to the 1993 Plan for
which stockholder approval would be required under the Code or other
applicable rules, and no action by the Board of Directors or stockholders
may unilaterally impair any option previously granted under the 1993 Plan.
In any event, the 1993 Plan will terminate in October 2003. Any options
outstanding under the 1993 Plan at the time of its termination will remain
outstanding until they expire by their terms.
Tax Information
The following is a summary of the effect of federal income taxation
with respect to the grant and exercise of options under the 1993 Plan. It
does not purport to be complete and does not discuss the tax consequences of
the optionee's death or the income tax laws of any municipality, state or
foreign country in which a participant may reside.
Incentive Stock Options
-----------------------
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its
exercise, although the exercise may subject the optionee to the alternative
minimum tax. Upon the sale or exchange of the shares more than two years
after grant of the option and one year after exercising the option, any gain
or loss will be treated as long-term capital gain or loss. If these holding
periods are not satisfied, the optionee will recognize ordinary
8
<PAGE>
income at the time of sale or exchange equal to the difference between the
exercise price and the lower of (i) the fair market value of the shares at
the date of the option exercise or (ii) the sale price of the shares. A
different rule for measuring ordinary income upon such a premature
disposition may apply if the optionee is also an officer, director or 10%
stockholder of the Company. The Company will be entitled to a deduction in
the same amount as the ordinary income recognized by the optionee. Any gain
or loss recognized on such a premature disposition of the shares in excess
of the amount treated as ordinary income will be characterized as long-term
or short-term capital gain or loss, depending on the holding period.
Non-statutory Stock Options
---------------------------
All other options which do not qualify as incentive stock options are
referred to as non-statutory stock options. An optionee will not recognize
any taxable income at the time he or she is granted a non-statutory stock
option. However, upon the option's exercise, the optionee will recognize
taxable income, generally measured as the excess of the then fair market
value of the shares purchased over the exercise price. Any taxable income
recognized in connection with an option exercise by an optionee who is also
an employee of the Company will be subject to tax withholding by the
Company. The Company will be entitled to a tax deduction in the same amount
as the ordinary income recognized by the optionee. Upon resale of such
shares by the optionee, any difference between the sales price and the
exercise price, to the extent not recognized as taxable income as described
above, will be treated as long-term or short-term capital gain or loss,
depending on the holding period.
Participation in the 1993 Plan
As of the date of this Proxy Statement, there has been no determination
by the Administrator with respect to future awards under the 1993 Plan. As
a result, future awards are not determinable at this time. The following
table sets forth information with respect to options granted under the 1993
Plan during the fiscal year ending December 31, 1997 to each of the officers
named in the Summary Compensation Table, to all current executive officers
as a group, to all non-employee directors and to all other employees as a
group. The term of options under the 1993 Plan (other than those granted to
10% stockholders, such as Mr. Sawyer, as to which the term is five years
from the date of grant) is generally ten years from the date of grant.
<TABLE>
% of Total
Average Grants
Options Exercise Under
Identity of Person or Group Granted(#) Price($) the 1993 Plan
--------------------------- ---------- -------- --------------
<S> <C> <C> <C>
Philip M. Sawyer................ -- -- *
Debera M. Brown................. 42,000 4.38 7.5
Cary J. Reich................... 40,000 4.38 7.2
Gary A. Curtis (1).............. 15,000 4.38 2.7
Joseph F. Rondinone............. 55,000 4.03 9.9
All current executive officers
as a group.................... 302,000 4.37 54.2
All non-employee directors...... -- -- *
All other employees as a group.. 255,650 4.25 45.8
- ---------------
* Less than 1%
(1) Mr. Curtis resigned his position as Executive Vice President, Sales and
Marketing on January 31, 1998.
</TABLE>
9
<PAGE>
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On the recommendation of the Audit Committee, the Board of Directors
has appointed Coopers & Lybrand L.L.P. ("Coopers & Lybrand") as independent
auditors of the Company to audit the consolidated financial statements of
the Company for the year ending December 31, 1998, and recommends that the
stockholders vote for ratification of such appointment.
Coopers & Lybrand has audited the Company's financial statements since
1994. A representative of Coopers & Lybrand is expected to be present at
the Annual Meeting, will have the opportunity to make a statement and is
expected to be available to respond to appropriate questions.
Vote Required
Ratification of the appointment of Coopers & Lybrand as the Company's
independent auditors will require the affirmative vote of a majority of the
votes cast at the Annual Meeting. In the event that the stockholders do not
approve the selection of Coopers & Lybrand, the Board of Directors will
reconsider its selection.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF APPOINTING COOPERS
& LYBRAND AS THE COMPANY'S INDEPENDENT AUDITORS.
10
<PAGE>
SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock
of the Company as of March 30, 1998 for the following: (i) each person or
entity who is known by the Company to own beneficially more than 5% of the
outstanding shares of the Company's Common Stock; (ii) each of the Company's
directors; (iii) each of the officers named in the Summary Compensation
Table; and (iv) all current directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
Percentage
Shares Beneficially Beneficially
Name (2) Owned (1) Owned
-------- --------- -----
<S> <C> <C>
Philip M. Sawyer (3)...................... 1,313,172 18.4
Lawrence G. Mohr, Jr. (4)................. 1,021,506 14.3
Mohr, Davidow Ventures III ............... 992,510 13.9
2775 Sand Hill, Suite 240
Menlo Park, CA 94025
Interface Biomedical Laboratories
Corporation ............................ 878,210 12.3
7600 Ridge Boulevard
Brooklyn, New York 11209
Douglas E. Kelly, M.D (5).................. 820,635 11.5
Asset Management Associates 1989, L.P. .... 808,079 11.3
2275 East Bayshore Road, Suite 150
Palo Alto, CA, 94303
Entities affiliated with Domain
Associates (6)........................... 783,528 11.0
One Palmer Square
Princeton, NJ 08542
Richard S. Schneider, Ph.D. (7)............ 784,328 11.0
State of Wisconsin Investment Board........ 476,600 6.7
P.O. Box 7842
Madison, WI 53707
Gordon W. Russell (8)...................... 222,729 3.1
Cary J. Reich, Ph.D. (9)................... 85,575 1.2
Gary A. Curtis (10)........................ 63,015 *
Debera M. Brown (11)....................... 52,606 *
Joseph F. Rondinone, Ph.D. (12)............ 25,783 *
Olav B. Bergheim (13)...................... 17,370 *
Vaughn B. Bryson (14)...................... 17,370 *
All Directors and executive officers
as a group (13 persons) (15)............. 5,247,168 71.6
*Less than 1%
11
<PAGE>
(1) The number and percentage of shares beneficially owned is determined
in accordance with Rule 13d-3 of the Exchange Act, and the information
is not necessarily indicative of beneficial ownership for any other
purpose. Under such rule, beneficial ownership includes any shares as
to which the individual has sole or shared voting power or investment
power and also any shares which the individual has the right to
acquire within 60 days of March 30, 1998 through the exercise of any
stock option or other right. Unless otherwise indicated in the
footnotes, each person has sole voting and investment power (or shares
such powers with his or her spouse) with respect to the shares shown
as beneficially owned.
(2) The address for all directors and named officers is Fusion Medical
Technologies, Inc., 1615 Plymouth Street, Mountain View, CA 94043
(3) Includes 434,962 shares held by Mr. Sawyer, and 878,210 shares held by
Interface Biomedical Laboratories Corporation, of which Mr. Sawyer is
a shareholder.
(4) Includes 992,510 shares held by Mohr, Davidow Ventures III. Mr. Mohr
is a General Partner of Mohr, Davidow Ventures III and disclaims
beneficial ownership of the shares held by such entity except to the
extent of his proportionate partnership interest therein. Includes
12,500 shares held by the Mohr Family Trust. Includes 6,496 shares
issuable upon exercise of stock options exercisable within 60 days of
March 30, 1998 and 10,000 shares owned by Mr. Mohr.
(5) Includes 808,079 shares held by Asset Management Associates 1989, L.P.
Dr. Kelly is a General Partner of AMC Partners 1996, L.P. and
disclaims beneficial ownership of the shares held by Asset Management
Associates 1989, L.P. except to the extent of his proportionate
partnership interest. Includes 11,756 shares held by Dr. Kelly and
800 shares issuable upon exercise of stock options within 60 days of
March 30, 1998.
(6) Includes 749,028 shares held by Domain Partners III, L.P. and 26,215
shares held by DP III Associates, L.P. and 8,285 shares held by Domain
Associates.
(7) Includes 749,028 shares held by Domain Partners III, L.P. and 26,215
shares held by DP III Associates, L.P. Dr. Schneider is a General
Partner of One Palmer Square Associates III, L.P., the General Partner
of Domain Associates III, L.P. and DP III Associates, L.P. and
disclaims beneficial ownership of the shares held by such entities
except to the extent of his proportionate partnership interest. Also
includes 8,285 shares held by Domain Associates and 800 shares
issuable upon exercise of stock options within 60 days of March 30,
1998. Dr. Schneider is a General Partner of Domain Associates and
disclaims beneficial ownership of the shares held by this entity
except to the extent if his proportionate partnership interest.
Excludes 1,381 unvested shares subject to repurchase by the Company
within 60 days of March 30, 1998.
(8) Includes 251,995 shares held by Mr. Russell. Includes 649 shares held
by Sequoia Technology VI. Mr. Russell is a General Partner of Sequoia
Capital and disclaims beneficial ownership of the shares held by such
entity except to the extent of his proportionate partnership interest
therein. Also includes 9,085 shares issuable upon the exercise of
stock options exercisable within 60 days of March 30, 1998.
(9) Includes 76,965 shares issuable upon exercise of stock options
exercisable within 60 days of March 30, 1998.
(10) Includes 10,000 shares held by the Courtney Curtis Educational Trust.
Mr. Curtis is a trustee of such trust and disclaims any beneficial
ownership thereof. Includes 13,015 shares issuable upon exercise of
stock options exercisable within 60 days of March 30, 1997. Excludes
16,667 shares subject to repurchase rights by the Company.
(11) Includes 2,941 shares held by the Greg M. Ball and Debera M. Brown
Trustees u/a/d 5-28-97. Includes 48,295 shares issuable upon exercise
of stock options exercisable within 60 days of March 30, 1998.
(12) Includes 9,531 shares issuable upon exercise of stock options
exercisable with 60 days of March 30, 1998.
(13) Includes 800 shares issuable upon exercise of stock options
exercisable within 60 days of March 30, 1998. Includes 6,214 shares
subject to repurchase rights by the Company.
(14) Includes 800 shares issuable upon exercise of stock options
exercisable within 60 days of March 30, 1998. Includes 7,249 shares
subject to repurchase rights by the Company.
(15) Includes 187,581 shares issuable upon exercise of stock options
exercisable within 60 days of March 30, 1998. Includes 34,011 shares
subject to repurchase rights by the Company.
</TABLE>
12
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of a registered
class of the Company's equity securities ("10% Stockholders") to file with
the Securities and Exchange Commission (the "SEC") and the National
Association of Securities Dealers, Inc. reports of ownership on Form 3 and
reports on changes in ownership on Form 4 or Form 5. Such executive
officers, directors and 10% Stockholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons that no
Forms 5 were required for such persons, the Company believes that, during
fiscal 1997 its executive officers, directors and 10% Stockholders complied
with all applicable Section 16(a) filing requirements except for the
following: Ms. Brown did not report in a timely manner on Form 4, the
exercise of a stock option. Messrs. Rondinone, Anderson and Huie did not
submit their initial Form 3's in a timely manner.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was formed in April 1995 and is
currently composed of Messrs. Schneider, Kelly and Bryson. No interlocking
relationship exists between any member of the Company's Board of Directors
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. No member of the Compensation Committee
is, or was formerly, an officer or an employee of the Company.
13
<PAGE>
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning total
compensation received in the last three fiscal years by the Chief Executive
Officer and each of the four other most highly compensated executive
officers whose total compensation exceeded $100,000 during the last fiscal
year and who were serving as executive officers at the end of the fiscal
year ended December 31, 1997 (the "Named Officers").
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
Annual Compensation Securities All Other
Name and Fiscal ------------------- Underlying ---------
Principal Position Year Salary($) Bonus($) Options (#) Compensation($)
------------------ ---- --------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Philip M. Sawyer........ 1997 173,750 ----- ----- -----
President and 1996 166,666 ----- ----- -----
Chief Executive Officer 1995 120,000 ----- ----- -----
Cary J. Reich, Ph.D. (1) 1997 174,859 ----- 40,000 20,000(2)
Vice President, Research 1996 157,363 ----- 4,143 26,000(3)
1995 93,077 881 82,850 65,498(4)
Gary A. Curtis (5)...... 1997 164,583 ----- 15,000 -----
Executive Vice President,1996 148,513 ----- 82,850 -----
Sales & Marketing 1995 ----- ----- ----- -----
Debera M. Brown (6)..... 1997 163,006 ----- 42,000 -----
Vice President, 1996 138,191 ----- 4,143 -----
Regulatory Affairs & 1995 86,444 ----- 51,781 -----
Quality Assurance
Joseph F. Rondinone,.... 1997 146,321 ----- 55,000 -----
Ph.D. (7) 1996 119,933 ----- 15,742 -----
Vice President, 1995 ----- ----- -----
Development
- -------------------
(1) Mr. Reich joined the Company in May 1995 as Vice President, Research
and Development at an annual salary of $150,000.
(2) Consists of $20,000 in housing allowance.
(3) Consists of $26,000 in housing allowance.
(4) Consists of $44,998 in relocation expenses and $20,500 in housing
allowance.
(5) Mr. Curtis joined the Company in April 1996 as Executive Vice
President, Sales and Marketing, at an annual salary of $148,512.
Mr. Curtis resigned January 31, 1998.
(6) Ms. Brown joined the Company in May of 1995 as Vice President of
Clinical and Regulatory Affairs, at an annual salary of $135,000
(7) Mr. Rondinone joined the Company in January of 1996 as Director of
Clinical Affairs, at an annual salary of $120,000.
</TABLE>
14
<PAGE>
Option Grants in Last Fiscal Year
The following table shows, as to the Named Officers, information
concerning stock options granted during the year ended December 31, 1997
<TABLE>
Potential Realizable
Value at Assumed
Percent of
Annual Rates of Stock
Number of Total Options
Price Appreciation for
Securities Granted to Exercise
Option Term (4)
Underlying Options Employees in Price Expiration
- ------ --------
Name Granted (#) (1) Fiscal Year (2) Per Share Date (3)
5% ($) 10%($))
---- --------------- --------------- --------- -------- -
- --
<S> <C> <C> <C> <C>
<C> <C>
Philip M. Sawyer.... ----- ----- ----- -----
- ----- -----
Cary J. Reich....... 40,000 6.9 $3.75 02/21/07
110,057 278,905
Gary A. Curtis...... 15,000 2.6 $3.75 02/21/07
41,271 104,589
Debera M. Brown..... 42,000 7.3 $3.75 02/21/07
115,559 292,850
Joseph F. Rondinone. 55,000 9.5 $4.03 09/12/07
229,990 353,612
- ----------------
(1) Options were granted under the Company's 1993 Stock Option Plan and
vest over four years from the date of grant.
(2) Based on options to purchase an aggregate of 576,850 options granted
by the Company in the year ended December 31, 1997 to employees,
directors, and consultants to the Company, including the Named
Officers.
(3) Options may terminate before their expiration upon the termination of
the optionees status as an employee or consultant or at the optionee's
disability or death.
(4) The potential realizable value is calculated based on the term of the
option at the date of grant (ten years). It is calculated assuming
that the fair market value of the Company's Common Stock on the date
of grant appreciates at the indicated annual rate compounded annually
for the entire term of the option and that the option is exercised and
sold on the last day of its term for the appreciated stock price.
</TABLE>
Option Exercises in Last Fiscal Year and FY-end Option Values
The following table sets forth, as to the Named Officers, certain
information concerning stock options exercised during the year ended
December 31, 1997 and the number of shares subject to both exercisable and
unexercisable stock options as of December 31, 1997. Also reported are
values for unexercised "in-the-money" options, which values represent the
positive spread between the respective exercise prices of outstanding stock
options and the fair market value of the Company's Common Stock as of
December 31, 1997.
<TABLE>
Number of Securities Value
of Unexercised In-the-
Underlying Unexercised
Money Options
Shares Options at Fiscal Year End at
Fiscal Year End ($) (2)
Acquired on Value of -------------------------- ----
- ----------------------
Name Exercise (#) Realized ($) (1) Exercisable Unexercisable
Exercisable Unexercisable
---- ------------ ---------------- ----------- ------------- ----
- ------- -------------
<S> <C> <C> <C> <C> <C>
<C>
Philip M. Sawyer .. ----- ----- ----- ----- -
- ---- -----
Cary J. Reich...... ----- ----- 55,404 71,589
136,238 75,351
Gary A. Curtis..... ----- ----- ----- 57,850 -
- ---- 74,023
Debera M. Brown.... ----- ----- 29,339 62,591
70,358 47,554
Joseph F. Rondinone 5,900 27,831 1,642 63,200
4,150 20,726
- -----------------
(1) Market value of the underlying securities on the exercise date minus
the exercise price.
(2) Market value of underlying securities based on the closing price of
the Company's Common Stock on December 31, 1997 (the last market
trading day in 1997) on the Nasdaq National Market of $2.94 minus the
exercise prices.
</TABLE>
15
<PAGE>
CERTAIN TRANSACTIONS
The Company has a consulting contract with Dr. Philip N. Sawyer, a
distinguished heart surgeon (now retired) and noted medical device designer.
The contract pays Dr. Sawyer $4,500 per month and related expenses for up to
ten days of consulting per month. Dr. Sawyer is a shareholder of Interface
BioMedical Laboratories Corporation which is an affiliate of the Company.
Dr. Sawyer is also the father of Philip M. Sawyer, the Company's president
and chief executive officer.
All future transactions, including any loans from the Company to its
officers, directors, principal stockholders or affiliates, will be approved
by a majority of the Board of Directors, including a majority of the
independent and disinterested members of the Board of Directors or, if
required by law, a majority of disinterested stockholders, and will be on
terms no less favorable to the Company than could be obtained from
unaffiliated third parties.
16
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee")
consists of three non-employee directors: Richard S. Schneider, Douglas E.
Kelly and Vaughn D. Bryson. The Committee was established in October 1993
and is responsible for reviewing and making recommendations to the Board of
Directors regarding all forms of compensation to be provided to the
executive officers and directors of the Company, including salaries,
bonuses, stock compensation and loans, and all bonus and stock compensation
to other employees.
Compensation Philosophy and Policies
The policy of the Committee is to attract and retain key personnel
through the payment of competitive base salaries and to encourage and reward
performance through bonuses and stock ownership. The Committee's objectives
are to:
o ensure that there is an appropriate relationship between executive
compensation and the creation of stockholder value;
o ensure that the total compensation program will motivate, retain and
attract executives of outstanding abilities; and
o ensure that current cash and equity incentive opportunities are
competitive with comparable companies.
Elements of Compensation
Compensation for officers and key employees includes both cash and
equity elements.
Cash compensation consists of base salary, which is determined on the
basis of the level of responsibility, expertise and experience of the
employee, taking into account competitive conditions in the industry. In
addition, cash bonuses may be awarded to officers and other key employees.
Compensation of sales personnel also includes sales commissions tied to
quarterly and annual targets.
Ownership of the Company's Common Stock is a key element of executive
compensation. Officers and other employees of the Company are eligible to
participate in the 1993 Plan and the 1993 Employee Stock Purchase Plan (the
"Purchase Plan"), which plans were adopted prior to the Company's initial
public offering in June 1996. The 1993 Plan permits the Board of Directors
or the Committee to grant stock options to employees on such terms as the
Board or the Committee may determine. The Committee has sole authority to
grant stock options to executive officers of the Company and is currently
administering stock option grants to all employees. In determining the size
of a stock option grant to a new officer or other key employee, the
Committee takes into account equity participation by comparable employees
within the Company, external competitive stock option awards and other
relevant factors. Additional options may be granted to current employees to
reward exceptional performance or to provide additional equity incentives.
These options typically vest over a four-year period and thus require the
employee's continuing efforts on behalf of the Company. The Purchase Plan
permits employees to acquire Common Stock of the Company through payroll
deductions and promotes broad-based equity participation throughout the
Company. The Committee believes that it is in the stockholders' interests
to link
17
<PAGE>
employee compensation as closely as possible to equity appreciation and thus
to share with the employees the benefits of their efforts on behalf of the
Company's success.
Fiscal 1997 Executive Compensation
Executive compensation for fiscal year 1997 included base salary, cash
bonuses, and incentive stock option grants. The cash bonuses and stock
options are awarded in fiscal 1998 after review of appropriate performance
factors after the end of 1997. In one case, an executive received a cash
housing allowance. Cash bonuses were based on accomplishing designated
Company goals including certain financial targets. For sales executives,
compensation also included commissions tied to attaining revenue milestones
recommended by management and approved by the Board. Executive base salary
and total compensation for fiscal year 1997 were determined after review of
salary survey data for comparable public companies in the medical technology
industry. Factors in selection of the appropriate data for comparison
include company size and geographical location. In addition, the Committee
reviewed compensation data extracted from the public records of comparable
public companies in the medical technology/device industry. These companies
were selected based on comparable age as public companies, stage of
development, geographical location and other relevant factors.
In establishing executive compensation policies for fiscal year 1997,
the Committee focused incentive compensation on achieving certain milestones
in product sales, product development, regulatory clearance and marketing.
Chief Executive Officer Compensation for Fiscal 1997
Philip Sawyer's salary for fiscal 1997 was $173,750 (His annualized
base salary was $175,000 beginning in February 1997). Additional 1997
compensation including cash bonus and stock options, if any, for Mr. Sawyer
has not been determined at this time. In raising Mr. Sawyer's annual salary
from $166,666 in 1996, the Committee gave consideration to comparative pay
levels in the medical technology industry, the performance of Fusion in
1996, Mr. Sawyer's qualifications and experience, the importance of his
individual contributions to the future of Fusion and certain other factors.
Summary
The Compensation Committee sets policy and administers the Company's
cash and equity incentive programs for the purpose of attracting and
retaining highly skilled executives who will promote the Company's business
goals and providing incentive for these persons to achieve goals which will
build long-term stockholder value.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Richard S. Schneider
Douglas E. Kelly, M.D.
Vaughn D. Bryson
18
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the Company's cumulative total stockholder
return with those of the "Nasdaq Stock Market - U.S." Index and the
"Hambrecht & Quist Healthcare - Excluding Biotechnology" Index. The graph
assumes that $100 was invested (i) on June 7, 1996 (the effective date of
the Company's initial public offering) in the Company's Common Stock and
(ii) on June 30, 1996 in the "Nasdaq Stock Market - U.S." Index and the
"Hambrecht & Quist Healthcare - Excluding Biotechnology" Index, including
reinvestment of dividends, and reflects the change in the market price of
the Company's Common Stock relative to the noted indices at December 31,
1997. The performance shown is not necessarily indicative of future price
performance.
19
<PAGE>
<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Fusion Medical Nasdaq Stock H&Q Healthcare
DATES Technologies, Inc. Market -U.S. Excluding Biotech
- ------------------ ------------------ -------------- -----------------
<S> <C> <C> <C>
June 7, 1996 100.00 100.00 100.00
June 30, 1996 54.32 96.49 96.57
September 30, 1996 76.92 99.92 105.97
December 31, 1996 34.62 104.84 106.63
March 31, 1997 29.81 99.15 101.29
June 30, 1997 26.92 117.33 121.25
September 30, 1997 40.38 137.17 127.09
December 31, 1997 22.59 128.65 127.07
</TABLE>
The information contained in the Stock Performance Graph shall not be deemed
"soliciting material" or to be filed with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act or Exchange Act, except to the extent
the Company specifically incorporates it by reference into such filing.
20
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting.
If any other matters properly come before the meeting, it is the intention
of the persons named in the enclosed proxy card to vote the shares they
represent as the Company may recommend.
It is important that your shares be represented at the meeting,
regardless of the number of shares which you hold. You are therefore urged
to execute and return, at your earliest convenience, the accompanying proxy
card in the envelope which has been enclosed.
THE BOARD OF DIRECTORS
Mountain View, California
April 10, 1998
21
<PAGE>
DETACH HERE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FUSION MEDICAL TECHNOLOGIES, INC.
1998 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of Fusion Medical Technologies, Inc., a
Delaware corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement and hereby appoints Philip M.
Sawyer and Raymond W. Anderson, or either of them, proxies and attorneys-in-
fact, with full power to each of substitution, on behalf and in the name of
the undersigned to represent the undersigned at the 1998 Annual Meeting of
Stockholders of Fusion Medical Technologies, Inc. to be held on May 21,
1998 at 10:00 a.m., local time, at the Company's principal executive offices
located at 1615 Plymouth Street, Mountain View, California 94043 and at any
postponement or adjournment thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote, if then and there
personally present, on the matters set forth on the reverse:
SEE REVERSE SEE REVERSE
SIDE (Continued and to be signed on reverse side) SIDE
<PAGE>
DETACH HERE
Please mark
[X] votes as in
this example.
1. Election Of Directors.
Class I Nominees: Lawrence G. Mohr, Jr., Olav B. Bergheim,
Class II Nominees: Douglas E. Kelly, M.D., Richard S.
Schneider, Ph.D.
Class III Nominees: Gordon W. Russell, Philip M. Sawyer, Vaughn D.
Bryson,
FOR WITHHELD
[ ] ALL [ ] FROM ALL
NOMINEES NOMINEES
MARK HERE
[ ] FOR ADDRESS [ ]
-------------------------------------------------- CHANGE AND
For all nominees except as noted on the line above NOTE BELOW
2. Proposal to ratify and approve an amendment to the 1993 Stock Option Plan
to increase the number of shares reserved for issuance by 400,000 to
1,890,492 shares:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to ratify the appointment of Coopers & Lybrand LLP as the
independent auditors of the Company for the year ending December 31,
1998:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF THE TWO
NOMINATED CLASS I DIRECTORS, THE TWO NOMINATED CLASS II DIRECTORS AND THE
THREE NOMINATED CLASS III DIRECTORS; (2) FOR THE RATIFICATION AND APPROVAL
OF AN AMENDMENT TO THE 1993 STOCK OPTION PLAN TO INCREASE THE NUMBER OF
SHARES RESERVED FOR ISSUANCE BY 400,000 TO 1,890,492 SHARES; (3) FOR
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND LLP AS INDEPENDENT
AUDITORS, AND AS THE PROXY HOLDERS DEEM ADVISABLE ON SUCH OTHER MATTERS AS
MAY COME BEFORE THE MEETING.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON, IF THE STOCK IS REGISTERED
IN THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, GUARDIANS AND ATTORNEYS-IN-FACT SHOULD ADD THEIR
TITLES. IF SIGNER IS A CORPORATION, PLEASE GIVE FULL CORPORATE NAME AND HAVE
A DULY AUTHORIZED OFFICER SIGN, STATING TITLE. IF SIGNER IS A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
PLEASE SIGN, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
NOTE: (This Proxy should be marked, signed by the stockholder(s) exactly as
his or her name appears, hereon, and return promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should
sign.)
Signature: Date:
------------------------------------- ----------------
Signature: Date:
------------------------------------- ----------------
