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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[_] 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 Section 240.14a-11(c) or Section 240.14a-12
MEDIC-JECT CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[This plan is being filed pursuant to Item 10(b) of Schedule 14(a) as an
appendix to the Proxy Statement. This is an amendment to the Company's
definitive Proxy Statement filed on April 4, 1997.]
MEDI-JECT CORPORATION
1996 INCENTIVE AND STOCK OPTION PLAN
SECTION 1. PURPOSE.
The purpose of this 1996 Incentive and Stock Option Plan (the "Plan") is to
promote the interests of Medi-Ject Corporation (the "Company") and its
shareholders by aiding the Company in attracting and retaining employees and
directors capable of contributing to the growth and success of, and providing
strategic direction to, the Company, and by offering such employees and
directors an opportunity to acquire a proprietary interest in the Company,
thereby providing them with incentives to put forth maximum efforts for the
success of the Company's business and aligning the interests of such employees
and directors with those of the Company's shareholders.
SECTION 2. DEFINITIONS.
As used in the Plan, the following terms shall have the meanings set forth
below:
(a) "Affiliate" shall mean (i) any entity that, directly or indirectly
through one or more intermediaries, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest, in each case as
determined by the Board of Directors.
(b) "Award" shall mean any Option granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any regulations promulgated thereunder.
(e) "Committee" shall mean a committee of the Board of Directors of the
Company to whom the powers and duties of such Board of Directors under the Plan
may be delegated pursuant to Section 3(b) hereof, which shall consist of members
appointed from time to time by the Board of Directors and shall be composed
solely of two or more directors, each of whom is an "outside director" within
the meaning of Section 162(m) of the Code to the extent required by such
Section.
(f) "Company" shall mean Medi-Ject Corporation, a Minnesota corporation,
and any successor corporation.
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(g) "Eligible Person" shall mean any employee, officer, director,
consultant or independent contractor providing services to the Company or any
Affiliate.
(h) "Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended.
(i) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as the Board of
Directors shall establish in good faith from time to time. Where there is a
public market for the Shares, the fair market value per Share on a given date
shall be the closing price of a Share in the over-the-counter market on such
date, as reported in The Wall Street Journal (or, if not so reported, as
otherwise reported by The Nasdaq Stock Market ("Nasdaq")) or, in the event the
Shares are traded on the Nasdaq National Market ("NMS") or listed on a stock
exchange, the fair market value per Share shall be the closing price on such
system or exchange on such date, as reported in The Wall Street Journal; if such
market or exchange is not open for trading on such date, the Fair Market Value
shall be determined as of the day closest to such date when such market or
exchange is open for trading.
(j) "Incentive Stock Option" shall mean an option granted under Section
6(a) of the Plan that is intended to meet the requirements of Section 422 of the
Code or any successor provision.
(k) "Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.
(l) "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
(m) "Participant" shall mean an Eligible Person whom the Board of
Directors designates to receive an Award under the Plan.
(n) "Person" shall mean any individual, corporation, partnership,
association or trust.
(o) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act or any successor rule or regulation.
(p) "Shares" shall mean shares of Common Stock, $.01 par value, of the
Company or such other securities or property as may become subject to Awards
pursuant to an adjustment made under Section 4(c) of the Plan.
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SECTION 3. ADMINISTRATION.
(a) Administration by the Board of Directors. The Plan shall be
administered by the Board of Directors of the Company, with or without the
advice of a committee. Subject to the express provisions of the Plan and to
applicable law, the Board of Directors shall have full power and authority to:
(i) designate Participants; (ii) determine the type or types of Awards to be
granted to each Participant under the Plan; (iii) determine the number of Shares
to be covered by each Award; (iv) determine the terms and conditions of any
Award or Award Agreement; (v) amend the terms and conditions of any Award or
Award Agreement and accelerate the exercisability of Options; (vi) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (vii) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (viii) make any other determination and take any
other action that the Board of Directors deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Board of Directors, may be made at any time and shall be final, conclusive and
binding upon any Participant, any holder or beneficiary of any Award and any
employee of the Company or any Affiliate.
(b) Delegation to Committee. Notwithstanding anything to the contrary
contained herein, the Board of Directors may, at any time and from time to time,
delegate its powers and duties hereunder to a Committee solely for purposes of
complying with Section 162(m) of the Code.
(c) References to Board of Directors. Unless stated to the contrary, as
used herein, references to the Board of Directors shall mean the Committee to
whom the Board of Directors has delegated its powers and duties in the event
such powers and duties have been so delegated.
SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) Shares Available. Subject to adjustment as provided in Section 4(c),
the aggregate number of Shares which may be issued under all Awards under the
Plan shall be 1,200,000. Shares to be issued under the Plan shall be authorized
but previously unissued Shares. If any Shares covered by an Award or to which an
Award relates are not purchased or are forfeited, or if an Award otherwise
terminates without delivery of any Shares, then the number of Shares counted
against the aggregate number of Shares available under the Plan with respect to
such Award, to the extent of any such forfeiture or termination, shall again be
available for granting Awards under the Plan.
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(b) Accounting for Awards. For purposes of this Section 4, if an Award
entitles the holder thereof to purchase Shares, the number of Shares covered by
such Award shall be counted on the date of grant of such Award against the
aggregate number of Shares available for granting Awards under the Plan.
(c) Adjustments. In the event that the Board of Directors shall determine
that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Board of
Directors to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Board of Directors shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and type of Shares (or other securities or
other property) which thereafter may be made the subject of Awards, (ii) the
number and type of Shares (or other securities or other property) subject to
outstanding Awards and (iii) the purchase or exercise price with respect to any
Award; provided, however, that the number of Shares covered by any Award or to
which such Award relates shall always be a whole number.
SECTION 5. ELIGIBILITY.
Any Eligible Person, including any Eligible Person who is an officer or
director of the Company or any Affiliate, shall be eligible to be designated a
Participant. In determining which Eligible Persons shall receive an Award and
the terms of any Award, the Board of Directors may take into account the nature
of the services rendered by the respective Eligible Persons, their present and
potential contributions to the success of the Company or such other factors as
the Board of Directors, in its discretion, shall deem relevant. Notwithstanding
the foregoing, an Incentive Stock Option may only be granted to full or part-
time employees (which term as used herein includes, without limitation, officers
and directors who are also employees), and an Incentive Stock Option shall not
be granted to an employee of an Affiliate unless such Affiliate is also a
"subsidiary corporation" of the Company within the meaning of Section 424(f) of
the Code or any successor provision.
SECTION 6. AWARDS.
(a) Options. The Board of Directors is hereby authorized to grant Options
to Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Board of Directors shall determine:
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(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Board of Directors; provided, however,
that the purchase price per Share purchasable under an Incentive Stock
Option shall not be less than 100% of the Fair Market Value of a Share on
the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by the Board
of Directors; provided, however, that the term of an Incentive Stock Option
may not extend more than ten years from the date of grant of such Incentive
Stock Option.
(iii) Time and Method of Exercise. The Board of Directors shall
determine the time or times at which an Option may be exercised in whole or
in part and the method or methods by which, and the form or forms
(including, without limitation, cash, previously owned Shares, Shares
issuable upon exercise of the Award or any combination thereof, having a
Fair Market Value on the exercise date equal to the relevant exercise
price) in which, payment of the exercise price with respect thereto may be
made or deemed to have been made.
(iv) Certain Options to be Treated as Non-Qualified Stock Options. If
the aggregate Fair Market Value of all Shares subject to Incentive Stock
Options granted to a Participant under all plans of the Company and its
parent and subsidiary corporations (as described in Section 422(d) of the
Code) that are exercisable for the first time during any calendar year
exceeds $100,000 at the time an Option is granted to such Participant, then
such Option shall be treated as an Option that does not qualify as an
Incentive Stock Option.
(v) Ten Percent Shareholder Rule. Notwithstanding any other provision
in the Plan, if at the time an Option is otherwise to be granted pursuant
to the Plan to a Participant who owns, directly or indirectly (within the
meaning of Section 424(d) of the Code), Common Stock of the Company
possessing more than 10% of the total combined voting power of all classes
of stock of the Company or its parent or any subsidiary, then any Incentive
Stock Option to be granted to such Participant pursuant to the Plan shall
satisfy the requirements of Section 422(c)(5) of the Code, and the exercise
price of such Option shall be not less than 110% of the Fair Market Value
of the Shares covered, and such Option by its terms shall not be
exercisable after the expiration of five years from the date such Option is
granted.
(vi) Option Limitations Under the Plan. No Eligible Person who is an
employee of the Company at the time of grant may be granted any Option, the
value of which is based solely on an increase in the value of the Shares
after the date of grant of such Option, covering more than 500,000 Shares
in the aggregate in any calendar year. The foregoing annual limitation
specifically
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includes the grant of any Option representing "qualified performance-based
compensation" within the meaning of Section 162(m) of the Code to the
extent required by such Section.
(b) General.
(i) No Cash Consideration for Awards. Awards shall be granted for no
cash consideration or for such minimal cash consideration as may be
required by applicable law.
(ii) Grant of Additional Awards. An Eligible Person who has been
granted an Award under this Plan may be granted additional Awards under the
Plan if the Board of Directors shall so determine.
(iii) Limits on Transfer of Awards. No Award and no right under any
such Award shall be transferable by a Participant otherwise than by will or
by the laws of descent and distribution. No Award or right under any such
Award may be pledged, alienated, attached or otherwise encumbered, and any
purported pledge, alienation, attachment or encumbrance thereof shall be
void and unenforceable against the Company or any Affiliate.
(iv) Term of Awards. The term of each Award shall be for such period
as may be determined by the Board of Directors and the Board of Directors
shall be under no duty to provide terms of like duration for Awards granted
under the Plan.
(v) Restrictions; Securities Exchange Listing. All certificates for
Shares or other securities delivered under the Plan pursuant to any Award
or the exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Board of Directors may deem advisable under the
Plan or the rules, regulations and other requirements of the Securities and
Exchange Commission and any applicable federal or state securities laws,
and the Board of Directors may cause a legend or legends to be placed on
any such certificates to make appropriate reference to such restrictions.
If the Shares or other securities are quoted on Nasdaq, traded on NMS or
listed on a stock exchange, the Company shall not be required to deliver
any Shares or other securities covered by an Award unless and until such
Shares or other securities have been admitted for quotation or trading on
NMS or such stock exchange.
SECTION 7. INCOME TAX WITHHOLDING.
In order to comply with all applicable federal or state income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure
that all applicable federal or state payroll, withholding, income or other
taxes, all of which are and shall remain the sole and absolute responsibility of
a Participant, are
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withheld or collected from such Participant. In order to assist a Participant in
paying all or a portion of the federal and state taxes to be withheld or
collected upon exercise of an Award, the Board of Directors, in its discretion
and subject to such additional terms and conditions as it may adopt, may permit
the Participant to satisfy such tax obligation by (i) electing to have the
Company withhold a portion of the Shares otherwise to be delivered upon exercise
of such Award with a Fair Market Value equal to the amount of such taxes or (ii)
delivering to the Company Shares other than Shares issuable upon exercise of
such Award with a Fair Market Value equal to the amount of such taxes. The
election, if any, must be made on or before the date that the amount of tax to
be withheld is determined.
SECTION 8. GENERAL PROVISIONS.
(a) No Rights to Awards. No Eligible Person, Participant or other Person
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.
(b) Award Agreements. No Participant will have rights under an Award
granted to such Participant unless and until an Award Agreement shall have been
duly executed on behalf of the Company and, if requested by the Company, signed
by the Participant.
(c) No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in
effect other or additional compensation arrangements, and such arrangements may
be either generally applicable or applicable only in specific cases.
(d) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained as an employee or director of
the Company or any Affiliate, nor will it affect in any way the right of the
Company or an Affiliate to terminate such employment or directorship at any
time, with or without cause. In addition, the Company or an Affiliate may at any
time dismiss a Participant from employment or directorship free from any
liability or any claim under the Plan, except as otherwise expressly provided in
the Plan or in any Award Agreement.
(e) Governing Law. The validity, construction and effect of the Plan or of
any Award, and any rules and regulations relating to the Plan or any Award,
shall be determined in accordance with the laws of the State of Minnesota.
(f) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal or unenforceable in any jurisdiction or
would
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disqualify the Plan or any Award under any law deemed applicable by the Board of
Directors, such provision shall be construed or deemed amended to conform to
applicable law, or if it cannot be so construed or deemed amended without, in
the determination of the Board of Directors, materially altering the purpose or
intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction or Award, and the remainder of the Plan or any such Award shall
remain in full force and effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Board of Directors shall
determine whether cash shall be paid in lieu of any fractional Shares or whether
such fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
(j) Other Benefits. No compensation or benefit awarded to or realized by
any Participant under the Plan shall be included for the purpose of computing
such Participant's compensation under any compensation-based retirement,
disability, or similar plan of the Company unless required by law or otherwise
provided by such other plan.
SECTION 9. AMENDMENT AND TERMINATION; ADJUSTMENTS.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board of Directors of the Company may
amend, alter, suspend, discontinue or terminate the Plan; provided, however,
that, notwithstanding any other provision of the Plan or any Award Agreement,
without the approval of the shareholders of the Company, no such amendment,
alteration, suspension, discontinuation or termination shall be made that,
absent such approval, would:
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(i) violate the rules or regulations of Nasdaq, NMS or any stock
exchange that are applicable to the Company; or
(ii) cause the Company to be unable, under the Code, to grant
Incentive Stock Options under the Plan.
(b) Amendments to Awards. The Board of Directors may waive any conditions
or rights of the Company under any outstanding Award, prospectively or
retroactively. The Board of Directors may not amend, alter, suspend, discontinue
or terminate any outstanding Award, prospectively or retroactively, without the
consent of the Participant or holder or beneficiary thereof, except as otherwise
provided herein or in the Award Agreement.
(c) Correction of Defects, Omissions and Inconsistencies. The Board of
Directors may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.
SECTION 10. EFFECTIVE DATE; TERM.
(a) Effective Date. The Plan shall be effective as of July 10, 1996 (the
"Effective Date"); provided, however, that if the Company's shareholders do not
approve the Plan at the next meeting of Shareholders, the Plan shall be null and
void and all Awards granted prior to the date of such Special Meeting shall be
of no force or effect.
(b) Term. Awards shall be granted under the Plan only during a 10-year
period beginning on the Effective Date. Unless otherwise expressly provided in
the Plan or in an applicable Award Agreement, however, any Award theretofore
granted may extend beyond the end of such 10-year period, and the authority of
the Board of Directors provided for hereunder, shall extend beyond the
termination of the Plan.
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