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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 Permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
FUSION MEDICAL TECHNOLOGIES
- --------------------------------------------------------------------------------
(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 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:
Notes:
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FUSION MEDICAL TECHNOLOGIES, INC.
----------------
Notice of Annual Meeting of Stockholders
to be held on June 15, 2000
----------------
Dear Stockholder:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Fusion Medical Technologies, Inc., a Delaware corporation
("Fusion" or the "Company"), will be held on Thursday, June 15, 2000 at 10:00
a.m., local time, at the Company's headquarters located at 34175 Ardenwood
Blvd., Fremont, California for the following purposes:
1. To elect one Class I director to serve for two years expiring upon
the 2002 Annual Meeting of the Stockholders and to elect one Class II
Director to serve for three years expiring upon the 2003 Annual Meeting of
the Stockholders or until a successor is duly elected and qualified.
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
950,000 shares to 3,590,492 shares.
3. To ratify the appointment of PricewaterhouseCoopers LLP as
independent accountants for the fiscal year ending December 31, 2000.
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 April 18, 2000, 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
Fremont, California
April 24, 2000
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
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FUSION MEDICAL TECHNOLOGIES, INC.
Proxy Statement
for
2000 Annual Meeting of Stockholders
To Be Held June 15, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
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 ACCOUNTANTS.... 10
SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT.................. 11
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT......................... 12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION............... 12
SUMMARY COMPENSATION TABLE................................................ 13
CERTAIN TRANSACTIONS...................................................... 15
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS............ 16
STOCK PERFORMANCE GRAPH................................................... 18
OTHER MATTERS............................................................. 19
</TABLE>
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FUSION MEDICAL TECHNOLOGIES, INC.
PROXY STATEMENT
FOR
2000 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, June 15, 2000 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 34175 Ardenwood Blvd.,
Fremont, California 94555, and the telephone number at that location is
(510) 818-4600.
These proxy solicitation materials were mailed on or about May 9, 2000,
together with the Company's 1999 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 April 18, 2000 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. As
of the Record Date, 10,049,764 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 Annual Meeting. Votes cast in person or
by proxy will be tabulated by the inspector of elections (the "Inspector") with
assistance from 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 the
Company's nominees for directors, (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 950,000 to 3,590,492 shares,
and (iii) "FOR" ratification of the appointment of PricewaterhouseCoopers LLP
as the Company's independent accountants for fiscal 2000.
Quorum; Abstentions; Broker Non-Votes
In general, Delaware law also provides that a quorum consists of a majority
of shares which are entitled to vote and which are present or represented by
proxy at the meeting. The Inspector will treat shares that are voted "WITHHELD"
or "ABSTAIN" as being present and entitled to vote for purposes of determining
the presence of a quorum but will not be treated as votes in favor of or
opposed to any matter submitted to the
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stockholders for a vote. Any proxy which is returned using the form of proxy
enclosed and which is not marked as to a particular item will be voted for the
election of the directors and for the confirmation of the appointment of the
designated independent auditors and, as the proxy holders deem advisable, on
other matters that may come before the meeting, as the case may be, with
respect to the items not marked.
If a broker indicates on the enclosed proxy or its substitute that it does
not have discretionary authority as to certain shares to vote on a particular
matter ("Broker Non-Votes"), those shares will not be considered as present
with respect to that matter. The Company believes that the tabulation
procedures to be followed by the Inspector are consistent with the general
statutory requirements in Delaware concerning voting of shares and
determination of a quorum.
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 2000 Annual Meeting of Stockholders must be received by the
Company no later than January 4, 2000, and must satisfy the conditions
established by the Securities and Exchange Commission (the "SEC") for
stockholder proposals to be included in the Company's proxy statement for that
meeting.
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PROPOSAL ONE
ELECTION OF DIRECTORS
General
Pursuant to the Company's Restated Certificate of Incorporation, the
Company's Board of Directors currently consists of seven authorized seats on
the Board of Directors, divided into three classes serving staggered terms of
three years. Currently there is one vacancy on the Board of Directors. There
are two directors in Class I, one director in Class II and three directors in
Class III. One Class II director is to be elected at the Annual Meeting. There
will remain one vacancy on the Board of Directors among the Class I directors.
The form of proxy delivered with this Proxy Statement cannot be voted for a
greater number of persons than the number of nominees named therein. The Class
III and Class I directors will be elected at the Company's 2001 and 2002 Annual
Meetings of Stockholders, respectively. The Class II director elected at the
Annual Meeting will hold office until the 2003 Annual Meeting of Stockholders
or until a successor has been duly elected and qualified.
In the event that any of such persons becomes unavailable or declines to
serve as a director at the time of the Annual Meeting, the proxy holders will
vote the proxies in their discretion for any nominee who is designated by the
current Board of Directors to fill the vacancy. It is not expected that any of
the nominees will be unavailable to serve.
The names of the Class I and Class II nominees for election to the Board of
Directors at the Annual Meeting, their age as of the Record Date, and certain
information about them is set forth below. The names of the current Class II
and Class III directors with unexpired terms, their ages as of the Record Date,
and certain information about them are also stated below.
<TABLE>
<CAPTION>
Name Age Principal Occupation Since
---- --- -------------------- -----
<S> <C> <C> <C>
Nominee for Class I
Director
J. Michael Egan......... 47 President and CEO, Bluebird Development, LLC 1999
Nominee for Class II
Director
Douglas E. Kelly, M.D.
(2).................... 39 General Partner, Asset Management Associates, Inc. 1993
Continuing Class III
Directors
Gordon W. Russell (1)... 66 General Partner, Sequoia Capital 1993
Philip M. Sawyer........ 35 President, Chief Executive Officer and Director 1993
Vaughn D. Bryson (2).... 61 President, Life Science Advisors 1996
Continuing Class I
Directors
Olav B. Bergheim (1).... 49 Venture Partner, Domain Associates 1995
</TABLE>
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(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
There are no family relationships among any directors or executive officers
of the Company.
Director to be Elected at the Annual Meeting
Mr. Egan has served as a director since May 1999. Since 1996, Mr. Egan has
been President and CEO of Bluebird Development, LLC, a financial partnership
with Osaka, Japan-based Kobayashi Pharmaceutical Company, a major distributor
of medical devices in Asia. Since 1992, Mr. Egan has been Chief Executive
Officer, and recently joined the Board of Directors, of ReGen Biologics, a
company developing collagen based
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orthopedic implants. Mr. Egan also served as the Group Vice President for
Business Development, Marketing and Sales for Concept, Inc., an orthopedic
medical device division of Bristol Myers Squibb between 1982 and 1991. Mr. Egan
holds a B.A. in Business Administration from Colorado College.
Dr. Kelly has served as a director since November 1993. Dr. Kelly is a
General Partner of AMA Partners 1989, L.P. AMA Partners 1998, L.P. and Alloy
Ventures 2000, LLC, venture capital partnerships. Dr. Kelly holds a B.A. in
Biochemistry and Molecular Biology from the University of California, San
Diego, an M.D. from the Albert Einstein College of Medicine and an M.B.A. from
the Stanford University Graduate School of Business.
Directors Whose Terms Extend Beyond the Annual Meeting
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.
Mr. Bryson has served as a director since March 1996. Since May 1995, Mr.
Bryson has been President of Life Sciences Advisors, a consulting firm focused
on assisting biopharmaceutical companies in building shareholder value. Mr.
Bryson was Vice Chairman of Vector Securities International, Inc., an
investment banking firm, from April 1994 to December 1996. Mr. Bryson was an
employee of Eli Lilly and Company for 32 years and served as President and
Chief Executive Officer of Eli Lilly from 1991 to 1993. He served as a member
of Eli Lilly's Board of Directors from 1984 until his retirement in 1993. 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.
Mr. Russell has served as Fusion's Chairman of the Board since October 1993.
Mr. Russell has been a General Partner with Sequoia Capital, a venture capital
firm, since 1979. Mr. Russell currently serves on the Board of Directors of
Sangstat Medical Corporation, Aradigm Corporation and ChemTrak, Inc. Mr.
Russell has served as Chairman-Emeritus of the Board of Trustees for the Palo
Alto Medical Foundation since 1990, and currently serves as Chairman of the
Board of Overseers of Dartmouth College Medical School. Prior to 1979, Mr.
Russell was Vice President, General Manager, of the Medical Instruments
Divisions of Coherent, Inc. and Syntex, Inc. Mr. Russell holds an A.B. from
Dartmouth College.
Mr. Sawyer, one of Fusion's founders, has served as President and Chief
Executive Officer and as a Director since April 1993. From 1991 to 1993, Mr.
Sawyer worked in various positions in marketing and business development at the
Stryker Corporation. Mr. Sawyer worked in the health care corporate finance
group at E.F. Hutton and Co. Mr. Sawyer holds a B.A. from Haverford College and
an M.B.A. from the Harvard Business School.
Vote Required
The nominee receiving the highest number of affirmative votes of the shares
present or represented and entitled to be voted for them shall be elected as
the Class I and Class II directors. Votes withheld from any director are
counted for purposes of determining the present or absence of a quorum for the
transaction of business, but have no other legal effect under Delaware law.
Board Meetings and Committees
During fiscal 1999, the Board of Directors held four meetings (including
regularly scheduled and special meetings). Dr. Kelly was unable to attend one
meeting. Certain matters were approved by the Board of Directors by unanimous
written consent.
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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, and Bergheim. The Compensation Committee is
composed of Mr. Bryson and Dr. Kelly. The Company has no nominating committee
or committee performing similar functions.
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 accountants, 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 1999.
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 1999.
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 have been
reserved for issuance under the Director Plan. As of December 31, 1999, there
were 59,200 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.
In July 1999, the Board of Directors granted stock options to each sitting
non-employee director. The stock options were granted from the 1993 Stock
Option Plan. For directors Bergheim, Bryson, Russell, and Kelly, the number of
options granted were 28,800. For Mr. Egan, the number of shares was 24,000. The
options vest over four years from the grant date.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
ELECTION OF THE NOMINEE FOR CLASS I DIRECTOR AND THE NOMINEE FOR CLASS II
DIRECTOR NAMED HEREIN.
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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 March 2000, the Board of Directors increased the shares reserved for
issuance under the 1993 Plan by 950,000 shares, bringing the total shares
currently reserved for issuance under the 1993 Plan to 3,590,492 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 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.
As of December 31, 1999, there were approximately 61 employees and 5
consultants currently eligible to participate in the 1993 Plan, and 71
optionees, including consultants and directors, held outstanding options under
the 1993 Plan. As of December 31, 1999, a total of 2,640,000 shares of Common
Stock have been authorized for issuance pursuant to the 1993 Plan. 430,000
shares had been issued upon the exercise of stock options granted under the
1993 Plan, 1,793,000 shares were subject to outstanding options and 417,000
shares were available for future grant.
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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.
(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.
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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 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
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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, 1999 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>
<CAPTION>
% of Total
Average Grants
Options Exercise Under the
Identity of Person or Group Granted(#) Price($) 1993 Plan
--------------------------- ---------- -------- ----------
<S> <C> <C> <C>
Philip M. Sawyer............................. 100,000 5.75 10.8
Debera M. Brown.............................. 30,000 5.75 3.2
Cary J. Reich................................ 30,000 5.75 3.2
Scott Huie................................... 30,000 5.75 3.2
Joseph F. Rondinone.......................... 30,000 5.75 3.2
All current executive officers as a group.... 400,000 5.75 43.1
All non-employee directors................... 139,200 10.25 15.0
All other employees as a group............... 359,875 8.99 38.8
</TABLE>
- --------
* Less than 1%
9
<PAGE>
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
On the recommendation of the Audit Committee, the Board of Directors has
appointed PricewaterhouseCoopers LLP as independent accountants of the Company
to audit the consolidated financial statements of the Company for the year
ending December 31, 2000, and recommends that the stockholders vote for
ratification of such appointment.
PricewaterhouseCoopers LLP has audited the Company's financial statements
since 1994. A representative of PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers LLP as the
Company's independent accountants 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 PricewaterhouseCoopers LLP, the
Board of Directors will reconsider its selection.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF APPOINTING
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS.
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 31, 2000 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.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Except as indicated by footnote, and
subject to community property laws where applicable, to our knowledge, the
persons named in the table have sole voting and investment power with respect
to all shares of common stock shown as beneficially owned by them. Options to
purchase shares of common stock that are exercisable within 60 days of January
25, 2000 are deemed to be beneficially owned by the person holding such options
for the purpose of computing the percentage ownership of such person, but are
not treated as outstanding for the purpose of computing the ownership of any
other person. Applicable percentage of beneficial ownership is based on
10,049,764 shares of common stock outstanding as of March 31, 2000.
All shares shown below for Joseph Rondinone and Scott Huie represent shares
issuable upon exercise of stock options. The shares shown for directors Douglas
Kelly, Gordon Russell, Olav Bergheim, Vaughn Bryson and Lawrence Mohr, each
include 10,398 shares issuable upon exercise of stock options. The shares below
also include exercisable options for (1) Cary Reich, 141,118 shares, (2) Debera
Brown, 98,837 shares, (3) Joseph Rondinone, 75,879 shares, (4) Scott Huie,
69,164 shares and (5) all directors and officers as a group, 546,743 shares.
<TABLE>
<CAPTION>
Shares Percentage
Beneficially Beneficially
Name Owned Owned
---- ------------ ------------
<S> <C> <C>
Philip M. Sawyer (1)............................. 1,076,236 10.7
Fusion Medical Technologies, Inc.
34175 Ardenwood Blvd.
Fremont, CA 94555
Interface Biomedical Laboratories Corporation.... 678,210 6.8
Philip N. Sawyer, M.D.
7600 Ridge Boulevard
Brooklyn, New York 11209
Douglas E. Kelly, M.D. (2)....................... 656,097 6.5
2275 East Bayshore Road, Suite 150
Palo Alto, CA 94303
Asset Management Associates 1989, L.P............ 645,688 6.4
Douglas B. Kelly, M.D.
2275 East Bayshore Road, Suite 150
Palo Alto, CA, 94303
State of Wisconsin Investment Board.............. 887,600 8.8
121 East Wilson Street
Madison WI 53707
Gordon W. Russell................................ 245,001 2.4
Cary J. Reich, Ph.D.............................. 153,772 1.5
Debera M. Brown.................................. 111,719 1.2
Joseph F. Rondinone, Ph.D........................ 98,385
Scott A. Huie.................................... 78,917
Olav B. Bergheim................................. 26,968
Vaughn B. Bryson................................. 26,968
All Directors and executive officers as a group
(13 persons).................................. 2,183,167 21.7
</TABLE>
11
<PAGE>
- --------
* Less than 1%.
(1) Includes 365,944 shares held by Mr. Sawyer, and 678,210 shares held by
Interface Biomedical Laboratories Corporation, of which Mr. Sawyer is a
shareholder.
(2) Includes 645,688 shares held by Asset Management Associates 1989, L.P. Dr.
Kelly is a General Partner of AMA 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 10,409 shares held by Dr. Kelly.
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 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
1999 its executive officers, directors and 10% Stockholders complied with all
applicable Section 16(a) filing requirements except for the following: Ms.
Brown, Mr. Huie, Mr. Reich, Mr. Rondinone did not report in a timely manner on
Form 4, the grant of a stock option. Mr. Strauss and Mr. Ellis did not report
in a timely manner on Form 3, the grant of a stock option.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was formed in April 1995 and is
currently composed of Messrs. 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.
12
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth certain information for the year ended
December 31, 1999, regarding the compensation of our Chief Executive Officer
and each of our other four most highly compensated executive officers whose
annual salary and bonus for 1999 were in excess of $100,000. These executives
are referred to as Named Executive Officers elsewhere in this prospectus. The
Other Annual Compensation column in the table consists of housing allowances.
The Salary column includes compensation earned by the individual but deferred
under our 401(k) plan.
<TABLE>
<CAPTION>
Long Term
Compensation
------------
Annual Awards
Compensation Securities
Name and Principal Fiscal ------------------- Underlying All Other
Position Year Salary($) Bonus($) Options (#) Compensation($)
------------------ ------ --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Philip M. Sawyer........ 1999 189,375 -- 100,000 --
President and Chief 1998 175,000 10,000 -- --
Executive Officer 1997 173,750 -- -- --
Cary J. Reich, Ph.D..... 1999 195,554 -- 30,000 13,000
Vice President, 1998 183,021 -- 25,000 13,000
Research 1997 174,859 -- 40,000 20,000
Scott A. Huie........... 1999 171,858 -- 30,000 --
Vice President, 1998 162,424 20,000 15,000 --
Operations 1997 64,308(1) 20,000 80,000 --
Debera M. Brown.........
Vice President, 1999 181,551 -- 30,000 --
Regulatory Affairs & 1998 172,563 -- 25,000 --
Quality Assurance 1997 163,006 -- 42,000 --
Jeff Rondinone, Ph.D.... 1999 171,858 -- 30,000 --
Vice President, 1998 162,833 -- 30,000 --
Development 1997 146,321 -- 55,000 --
</TABLE>
- --------
(1) Mr. Huie joined Fusion in August 1997 at an annual salary of $160,000.
13
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth certain information with respect to stock
options granted to each of the Named Executive Officers in 1999, including the
potential realizable value over the ten-year term of the options, based on
assumed rates of stock appreciation of 5% and 10%, compounded annually. These
assumed rates of appreciation comply with the rules of the Securities and
Exchange Commission and do not represent Fusion's estimate of future stock
price. Actual gains, if any, on stock option exercises will be dependent on the
future performance of our common stock.
In 1999, Fusion granted options to purchase up to an aggregate of 928,075
shares to employees, directors and consultants. 20,800 shares were granted
under Fusion's 1996 Director Option Plan and 907,275 options were granted under
Fusion's 1993 Stock Option Plan at exercise prices equal to the fair market
value of Fusion's common stock on the dates of the grants. All options have a
term of ten years. Options under the Director Option Plan vest according to the
Director Compensation section on page 7 of this Proxy. Options under the 1993
Stock Option Plan generally vest at over four years, with 25% of the option
shares vesting one year after the option grant date, and the remaining option
shares vesting ratably each month thereafter.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Price Appreciation for
Underlying Granted to Exercise Option Term
----------------------
Options Employees in Price Expiration
Name Granted (#) Fiscal Year Per Share Date 5% ($) 10%($)
---- ----------- ------------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Philip M. Sawyer........ 100,000 10.8 $5.75 1/01/09 $361,614 $916,402
Debera M. Brown......... 30,000 3.2 5.75 1/01/09 108,484 274,921
Scott A. Huie........... 30,000 3.2 5.75 1/01/09 108,484 274,921
Cary J. Reich, Ph.D..... 30,000 3.2 5.75 1/01/09 108,484 274,921
Joseph F. Rondinone,
Ph.D................... 30,000 3.2 5.75 1/01/09 108,484 274,921
</TABLE>
Option Exercises and Holdings
The following table sets forth information with respect to the Named
Executive Officers concerning exercisable and unexercisable options held as of
December 31, 1999. During 1999, Debera Brown and Dan Ellis exercised options to
acquire 7,000 and 17,041 shares respectively.
The "Value of Unexercised In-the-Money Options at December 31, 1999" is
based on a value of $13.00 per share, the fair market value of Fusion's common
stock as reflected by the closing price on the Nasdaq National Market on
December 31, 1999, less the per share exercise price, multiplied by the number
of shares issued upon exercise of the option.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year End at Fiscal Year End($)(1)
------------------------------ -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ------------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
Philip M Sawyer......... 22,916 77,084 $ 166,141 $558,859
Debera M. Brown......... 91,355 48,569 935,529 382,567
Scott A. Huie........... 60,728 64,272 511,631 519,619
Cary J. Reich, Ph.D..... 134,007 47,986 1,478,119 377,539
Joseph F. Rondinone,
Ph.D................... 67,740 57,102 619,631 462,395
</TABLE>
- --------
(1) Market value of the underlying securities based on the closing price of the
Company's Common Stock on December 31, 1999 (the last market trading day in
1999) on the Nasdaq Market of $13.00 minus the exercise price.
14
<PAGE>
CERTAIN TRANSACTIONS
In fiscal 1997, 1998 and in 1999, the Company had a certain consulting
contract with Dr. Philip N. Sawyer, a retired distinguished heart surgeon and
noted medical device designer. Fusion paid Dr. Sawyer $4,500 per month and
related expenses for up to ten days of consulting per month until the contract
was modified on August 31, 1998, at which time it was reduced to no more than
$1,500 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. The Company believes that the terms of the contract with Dr.
Sawyer were no less favorable to Fusion than could be obtained from
unaffiliated third parties.
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.
EMPLOYMENT CHANGE-IN-CONTROL AGREEMENTS
As of July 22, 1998, we had entered into employment agreements with Debera
M. Brown, Scott A. Huie, Cary J. Reich, Joseph F. Rondinone and Christopher S.
Dauer. The agreements provide that all unvested option shares shall immediately
vest upon a change of control event, which is defined as a transaction wherein
our stockholders immediately before the transaction do not retain direct or
indirect beneficial ownership of more than 50% of the total combined voting
power of our outstanding voting stock immediately after the transaction. The
agreements also provide for severance benefits upon a termination other than
for cause. These benefits include: three months continued salary, vesting of
50% of outstanding options and a one-year right to purchase vested options from
the date of termination.
In June 1999, we entered into employment agreements with Dan S. Ellis and
Larry J. Strauss. The agreements provide that all unvested option shares shall
immediately vest upon a change of control event, which is defined as a
transaction wherein our stockholders immediately before the transaction do not
retain direct or indirect beneficial ownership of more than 50% of the total
combined voting power of our outstanding voting stock immediately after the
transaction.
15
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee")
consists of two non-employee directors: 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 stock ownership. The Committee's objectives are to:
. ensure that there is an appropriate relationship between executive
compensation and the creation of stockholder value;
. ensure that the total compensation program will motivate, retain and
attract executives of outstanding abilities; and
. 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 may include 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 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 1999 Executive Compensation
Executive compensation for fiscal year 1999 included base salary, and
incentive stock option grants. Executive base salary and total compensation for
fiscal year 1999 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
16
<PAGE>
technology/device industry. These companies were selected based on comparable
age as public companies, stage of development, geographical location and other
relevant factors.
Chief Executive Officer Compensation for Fiscal 1999
Philip Sawyer's salary for fiscal 1999 was $189,375. In 1999, Mr. Sawyer did
not receive a cash bonus for his 1999 performance.
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
provide incentive for these persons to achieve goals which will build long-term
stockholder value.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Douglas E. Kelly, M.D.
Vaughn D. Bryson
17
<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, 1999. The performance shown is not necessarily
indicative of future price performance.
STOCK PERFORMANCE GRAPH APPEARS HERE
6/7/96 12/31/96 12/31/97 12/31/98 12/31/99
Fusion Medical Technologies $100.00 $ 34.62 $ 22.59 $ 44.23 $100.00
H&Q Healthcare Excl. Biotech $100.00 $106.63 $127.07 $154.40 $133.96
NASDAQ Composite $100.00 $104.84 $128.65 $180.53 $336.00
The information contained in the Stock Performance Graph shall not be deemed
"soliciting material" or to be filed with the Securities & 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.
18
<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 25, 2000
19
<PAGE>
DETACH HERE
PROXY
FUSION MEDICAL TECHNOLOGIES, INC.
2000 ANNUAL MEETING OF STOCKHOLDERS
Proxy Solicited on Behalf of the Board of Directors
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, proxy and
attorney-in-fact, with full power of substitution, on behalf and in the name of
the undersigned to represent the undersigned at the 2000 Annual Meeting of
Stockholders of Fusion Medical Technologies, Inc. to be held on June 15, 2000 at
10:00 a.m., local time, at the Company's principal executive offices located at
34175 Ardenwood Boulevard Fremont, CA 94555 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>
FMS78A DETACH HERE
[X] Please mark
votes as in this
example.
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 nominated
Class I and Class II Directors (2) FOR approval to amend the Company's 1993
Stock option Plan increasing the number of shares of Common Stock authorized
for issuance and (3) FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as Independent auditors and as the proxy holders
deem advisable on such other matters as may come before the meeting.
<TABLE>
<CAPTION>
<S> <C>
1. Election of Directors 2. Proposal to ratify and approve on FOR AGAINST ABSTAIN
amendment to the 1993 Stock Option [ ] [ ] [ ]
Class I Nominee: J. Michael Egan Plan to increase the number of
shares reserved for issuance by
950,000 to 3,590,492 shares.
FOR ALL [ ] [ ] WITHHELD FROM
NOMINEES ALL NOMINEES 3. Proposal to ratify the appointment FOR AGAINST ABSTAIN
MARK HERE [ ] of PricewaterhouseCoopers LLP as [ ] [ ] [ ]
FOR ADDRESS independent auditors of the Company
for the year ending December 31, 2000.
CHANGE AND
NOTE BELOW
Class II Nominee: Douglas E. Kelly, M.D. PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. IF THE STOCK IS
REGISTERED IN THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD SIGN.
FOR ALL [ ] [ ] WITHHELD FROM EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS AND ATTORNEY-IN-FACT
NOMINEES ALL NOMINEES SHOULD ADD THEIR TITLES. IF A SIGNER IS A CORPORATION, PLEASE GIVE
FULL CORPORATE NAME AND HAVE A DULY AUTHORIZED OFFICER SIGN,
STATING TITLE. IF SIGNER IS AN 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: (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:________________
</TABLE>
