SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
x Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 14a-12
Corgenix Medical Corporation
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
o 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:
o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form of Schedule and the date of its filing.
(1)Amount Previously Paid:
(2)Form, Schedule or Registration Statement No.:
(3)Filing Party:
(4)Date Filed:
<PAGE>
CORGENIX MEDICAL CORPORATION
12061 Tejon Street
Westminster, CO 80234
NOTICE OF ANNUAL MEETING
Dear Corgenix Shareholder:
On Wednesday, January 26, 2000, Corgenix Medical Corporation ("Corgenix") will
hold its 1999 Annual Meeting of Shareholders at its corporate offices located at
12061 Tejon Street, Westminster, Colorado.
The meeting will begin at 9:00 a.m.
Only shareholders who owned stock at the close of business on December 15, 1999
can vote at this meeting or any adjournments that may take place. At the meeting
we will:
1. Elect a Board of Directors;
2. Approve a 1999 Incentive Stock Plan;
3. Approve an Employee Stock Purchase Plan; and
4. Attend to other business properly presented at the meeting.
Your Board of Directors recommends that you vote in favor of the three proposals
outlined in this proxy statement.
At the meeting, we will also report on Corgenix's 1999 business results and
other matters of interest to shareholders.
The approximate date of mailing of this proxy statement, the proxy card(s) and
is on or about December 22, 2000. Corgenix's 1999 Annual Report on Form 10-KSB
is also enclosed with this proxy statement.
A PROXY STATEMENT AND PROXY ARE ENCLOSED. WHETHER OR NOT YOU EXPECT TO ATTEND
THE ANNUAL MEETING, IT IS IMPORTANT THAT YOU PROMPTLY FILL IN, SIGN, DATE AND
MAIL THE PROXY IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES MAY BE VOTED UPON.
By order of the Board of Directors
CORGENIX MEDICAL CORPORATION
Douglass T. Simpson,
President
December 15, 1999
<PAGE>
QUESTIONS AND ANSWERS
1. Q: What may I vote on?
A: You may vote on each of the following
three proposals:
(a) The election of nominees to serve
on our Board of Directors;
(b) The approval of a 1999 Incentive Stock Plan; and
(c) The approval of an Employee Stock Purchase Plan.
2. Q: How does the Board recommend I vote on the proposals?
A: The Board recommends a vote FOR each of
the nominees; FOR the 1999 Incentive
Stock Plan; and FOR the Employee Stock
Purchase Plan.
3. Q: Who is entitled to vote?
A: Shareholders as of the close of business
on December 15, 1999 (the Record Date)
are entitled to vote at the Annual
Meeting.
4. Q: How do I vote?
A: Sign and date the proxy card you receive
and return it in the prepaid envelope.
If you return your signed proxy card but
do not mark the boxes showing how you
wish to vote, your shares will be voted
FOR the three proposals. You have the
right to revoke your proxy at any time
before the meeting by:
(a) notifying our Corporate Secretary;
(b) voting in person; or
(c) returning a later-dated proxy card.
5. Q: How does discretionary authority apply?
A: If you sign your proxy card, but do not
make any selections, you give authority
to Luis R. Lopez, M.D., Chairman and
Chief Executive Officer, and Douglass T.
Simpson, President, to vote on the
proposals and any other matter that may
arise at the meeting.
6. Q: Is my vote confidential?
A: Proxy cards, ballots and voting
tabulations that identify individual
shareholders are mailed or returned
directly to American Securities Transfer
and Trust, Inc. and handled in a manner
that protects your voting privacy. Your
vote will not be disclosed except:
(a) as needed to permit American
Securities Transfer and Trust, Inc.
to tabulate and certify the vote;
(b) as required by law; or
(c) in limited circumstances such as a
proxy contest in opposition to the
Board.
Additionally, all comments written on the proxy card or
elsewhere will be forwarded to management, but your identity
will be kept confidential unless you ask that your name be
disclosed.
7. Q: What does it mean if I get more than one proxy card?
A: If your shares are registered
differently and are in more than one
account, you will receive more than one
proxy card. Sign and return all proxy
cards to ensure that your shares are
voted. We encourage you to have all
accounts registered in the same name and
address (whenever possible). You can
accomplish this by contacting our
transfer agent, American Securities
Transfer and Trust, Inc., at (303)
235-5300.
8. Q: How many shares can vote?
A: As of the Record Date, December 15, 1999, 17,320,164 shares of
common stock were issued and outstanding. Every shareholder of
common stock is entitled to one vote for each share held.
9. Q: What is a "quorum"?
A: A "quorum" is a majority of the
outstanding shares. They may be present
at the meeting or represented by proxy.
There must be a quorum for the meeting
to be held, and a proposal must receive
more than 50% of the shares voting to be
adopted. If you submit a properly
executed proxy card, even if you abstain
from voting, then you will be considered
part of the quorum. However,
abstentions are not counted in the tally
of votes FOR or AGAINST a proposal. A
WITHHELD vote is the same as an
abstention.
10. Q: Who can attend the Annual Meeting?
A: All shareholders on December 15, 1999
can attend.
11. Q: How will voting on any other business be conducted?
A: Although we do not know of any business
to be considered at the 1999 Annual
Meeting other than the proposals
described in this proxy statement, if
any other business is presented at the
Annual Meeting, your signed proxy card
gives authority to Luis R. Lopez, M.D.,
Chairman and Chief Executive Officer,
and Douglass T. Simpson, President, to
vote on such matters at their discretion.
12. Q: What percentage of stock do the
directors and officers own?
A: On June 30, 1999, approximately 20.1% of
our common stock was owned by the
directors and executive officers of
Corgenix on that date. On December 15,
1999, approximately 17.2% of our common
stock was owned by the directors and
executive officers of Corgenix on that
date.
13. Q: Who are the largest principal
shareholders?
A: As of June 30, 1999, Corgenix believes that the following
shareholders owned more than 5% of our issued and outstanding
common stock:
Dr. Luis R. Lopez, Chairman and Chief
Executive Officer of Corgenix (12061
Tejon Street, Westminster, Colorado
80234) owned 2,161,762 shares or 12.48%;
Raul Diez Canseco (c/o Corgenix, 12061 Tejon Street,
Westminster, Colorado 80234) owned 1,123,221 shares or 6.67%;
Jana Hartinger Mazzini (c/o Corgenix, 12061 Tejon Street,
Westminster, Colorado 80234) owned 1,095,788 shares or 6.50%;
and
Leland P. Snyder (c/o Corgenix, 12061 Tejon Street, Westminster,
Colorado 80234) owned 1,043,997 shares or 6.20%.
14. Q: Can a shareholder nominate someone to be a director of Corgenix?
A: As a shareholder, you may recommend any person as a nominee for
director of Corgenix by writing to the Board of Directors, c/o
Corgenix Corporation, 12061 Tejon Street, Westminster, Colorado
80234.
We must receive any recommendations by November 2, 2000 for the
2000 Annual Meeting and should include:
o the name, residence and business address of the
nominating shareholder;
o a representation that the shareholder is a record holder of
Corgenix stock or holds Corgenix stock through a broker and
the number and class of shares held;
o a representation that the shareholder intends to appear in
person or by proxy at the meeting of the shareholders to
nominate the individual(s) if the nominations are to be made
at a shareholder meeting;
o information regarding each nominee that would be
required to be included in a proxy
statement;
o a description of any arrangement or understanding
between and among the shareholder and
each and every nominee; and
o the written consent of each nominee to serve as a
director, if elected.
15. Q: How much did this proxy solicitation
cost?
A: The total cost is estimated to be
$10,000, which includes estimated
out-of-pocket expenses. We also
reimburse brokerage houses and other
custodians, nominees and fiduciaries for
their reasonable out-of-pocket expenses
for forwarding proxy and solicitation
materials to shareholders.
<PAGE>
PROPOSALS YOU MAY VOTE ON
Abstentions or votes withheld on any of the following
proposals will be treated as present at the meeting for
purposes of determining a quorum, but will not be
counted as votes cast.
1. ELECTION OF DIRECTORS
There are three nominees for election this year. Detailed information on
each nominee is provided on pages 6 to 7. If any director is unable to
stand for re-election, the Board may reduce its size or designate a
substitute. If a substitute is designated, proxies voting on the original
director candidate will be cast for the substituted candidate. Corgenix
has no reason to believe that any of the nominees below will be unable to
serve if elected
Your Board unanimously recommends a vote FOR each of these nominees for
directors.
2. APPROVAL OF THE 1999 INCENTIVE STOCK PLAN
The 1999 Incentive Stock Plan is intended to encourage ownership of shares
of Corgenix by its employees, directors and consultants by providing an
additional incentive to promote the success of the business. The Board has
authorized 500,000 shares of Corgenix's common stock to be reserved for
issuance under this plan.
Your Board unanimously recommends a vote FOR the approval of the 1999
Incentive Stock Plan.
3. APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN
The Employee Stock Purchase Plan is intended to provide eligible employees
of Corgenix with an opportunity to acquire a proprietary interest in
Corgenix at a discount through their participation in a plan designed to
qualify as an employee stock purchase plan under Section 423 of the
Internal Revenue Code of 1986. The Board has reserved 150,000 shares of
Corgenix's common stock for issuance under this plan.
Your Board unanimously recommends a vote FOR
the approval of the Employee Stock Purchase
Plan.
<PAGE>
GENERAL INFORMATION
Corgenix Medical Corporation, a Nevada corporation ("Corgenix"), is a diagnostic
biotechnology company whose principal focus has been the discovery and
development of novel diagnostic markers for the detection and management of
important immunological disorders. Until May 22, 1998, this business was
conducted by and under the name of REAADS Medical Products, Inc., a Delaware
corporation ("REAADS"). On May 22, 1998, REAADS became a subsidiary of Corgenix,
and its name was changed to Corgenix, Inc. when its wholly owned subsidiary
merged with and into REAADS (the "Merger"). Corgenix was incorporated under the
name Benjun Chemicals Inc. on April 22, 1994 as a wholly owned subsidiary of
Superior Equities Limited (the "Predecessor"). The Predecessor was incorporated
on April 9, 1985 under the laws of the Province of British Columbia, Canada.
Corgenix's principal offices are located at 12061 Tejon
Street, Westminster, Colorado 80234, and its telephone
number is (303) 457-4345.
AVAILABLE INFORMATION
Corgenix files reports, proxy materials and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
materials and other information concerning Corgenix can be inspected and copied
at the Public Reference Section maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; The Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and
at Seven World Trade Center, Suite 1300, New York, New York 10048. Copies can be
obtained by mail from the Commission at prescribed rates from the Public
Reference Section of the Commission at its principal office in Washington D.C.
The Commission also maintains a site on the World Wide Web (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants (including Corgenix) that file electronically with the
Commission.
<PAGE>
PROPOSAL 1
ELECTION OF THE BOARD OF DIRECTORS
Introduction
Three individuals will be elected at the Annual Meeting to serve as directors
until the next Annual Meeting of the shareholders and until their successors
have been elected and qualified. Information about each nominee is given below.
Nominees
LUIS R. LOPEZ, M.D.
Age: 51
Director since 1998
Dr. Lopez has served as the Chief Executive Officer and Chairman of the Board of
Directors of Corgenix since May 1998 and of Corgenix's operating subsidiary
since it was founded in July 1990. From 1987 to 1990, Dr. Lopez was Vice
President of Clinical Affairs at BioStar Medical Products, Inc., a Boulder,
Colorado diagnostic firm. From 1986 to 1987 he served as Research Associate with
the Rheumatology Division of the University of Colorado Health Sciences Center,
Denver, Colorado. From 1980 to 1986 he was Professor of Immunology at Cayetano
Heredia University School of Medicine in Lima, Peru, during which time he also
maintained a medical practice with the Allergy and Clinical Immunology group at
Clinica Ricardo Palma in Lima. From 1978 to 1980 Dr. Lopez held a fellowship in
Clinical Immunology at the University of Colorado Health Sciences Center. He
received his M.D. degree in 1974 from Cayetano Heredia University School of
Medicine in Lima, Peru. He is a clinical member of the American College of
Rheumatology, and a corresponding member of the American Academy of Allergy,
Asthma and Immunology. Dr. Lopez is licensed to practice medicine in Colorado,
and is widely published in the areas of immunology and autoimmune disease. He
currently serves on the Board of Directors of DDx, Inc., a Denver, Colorado
privately-held biotechnology firm.
DOUGLASS T. SIMPSON
Age: 51
Director since 1998
Mr. Simpson has been the President of Corgenix since May 1998 and was elected a
director in May 1998. Mr. Simpson joined Corgenix's operating subsidiary as Vice
President of Business Development in 1992, was promoted to Vice President,
General Manager in 1995, to Executive Vice President in 1996 and then to
President in February 1998. Prior to joining Corgenix's operating subsidiary, he
was a Managing Partner at Venture Marketing Group in Austin, Texas, a health
care and biotechnology marketing firm, and in that capacity, served as a
consultant to REAADS from 1990 until 1992. From 1984 to 1990 Mr. Simpson was
employed by Kallestad Diagnostics, Inc. (now Sanofi Diagnostics Pasteur), one of
the largest diagnostic companies in the world, where he served as Vice President
of Marketing, in charge of all marketing and business development for this $200
million medical diagnostics company. Mr. Simpson holds B.S. and M.S. degrees in
Biology and Chemistry from Lamar University in Beaumont, Texas.
<PAGE>
BRIAN E. JOHNSON
Age: 50
Director since 1998
Mr. Johnson was appointed as a director of Corgenix in May 1998. Mr. Johnson has
served as a director of Corgenix's operating subsidiary since 1993. He is Chief
Financial Officer of New Global telecom, Inc., a Denver based telecommunications
company. He served as Senior Vice President -- Field Service and Senior Vice
President -- Dealer Development and Acquisitions at ADT Security Systems, then
the world's largest provider of electronic security services, from 1996 to 1997.
From 1993 to 1995 he was Executive Vice President and Chief Financial Officer of
Alert Centre, Inc., a Denver-based, publicly traded electronic security services
company, which was acquired by ADT in December 1995. From 1990 through 1993 Mr.
Johnson was Managing Partner at Barnes Johnson & Associates, a small investment
banking and consulting firm specializing in corporate finance and acquisitions.
Previously, he served as chief financial officer and a director of two publicly
traded companies involved in oil and gas exploration and cable television. Mr.
Johnson began his career with Arthur Andersen & Company in Denver. He received a
B.A. in Economics from Muskingum College in Ohio, a J.D. from the University of
Colorado School of Law and an LL.M. in Taxation from the University of Denver
Graduate Program in Taxation.
Votes Required to Elect Directors
The affirmative vote of a majority of the shares of common stock represented and
voting at the meeting assuming a quorum is present is needed to elect a
director. Abstentions and votes withheld as to a director will have the same
effect as voting against the director.
<PAGE>
BOARD AND COMMITTEES
Structure and Operation of the Board: You should know the following information
about the structure of the board and its operations:
o Each director serves for a term of one year or until the director's
successor is duly elected, appointed or seated.
o The Board currently consists of one outside director, and the Chief
Executive Officer and the President (the Chief Operating Officer).
o None of the directors has a consulting arrangement
with Corgenix.
o The Board usually meets in regularly scheduled meetings and
conference telephone calls, and in Corgenix's 1999 fiscal year, the
Board met and/or took action by unanimous consent on 12 occasions.
Structure and Operation of the Committees: The full Board considers all major
decisions of Corgenix. However, the Board has established the following two
standing committees, both of which is chaired by the outside director. You
should know the following information about the operations of the two Committees
of the Board of Directors:
o The Audit Committee currently consists of Brian
Johnson and Douglass Simpson and its
functions include:
o making recommendations to the Board regarding the
selection of independent auditors,
o reviewing the results and scope of the audit and
other services provided by Corgenix's
independent auditors, and
o reviewing and evaluating Corgenix's audit and
control functions.
o The Compensation Committee currently consists of Brian Johnson and
its functions include:
o reviewing and recommending for Board approval
compensation for executive officers, and
o making policy decisions concerning salaries and incentive
compensation for employees and consultants of Corgenix.
Director Compensation: Non-executive members of the Board of Directors currently
receive an annual stock grant for service on the Board. The outside Directors
may be reimbursed for certain expenses in connection with attendance at Board
and committee meetings. For fiscal year 1999, the outside Directors received
10,000 shares each. For fiscal year 2000, the outside Director has received
20,000 shares.
Technical and Scientific Advisors: Corgenix periodically draws on the expertise
of several advisors and consultants in fields related to its technology and
markets. Corgenix has a Scientific Advisory Board currently consisting of Dr.
Luis Lopez and Dr. Douglas Triplett. These members are available to Corgenix as
needed on an individual basis to provide advice with respect to clinical
medicine and other matters requiring scientific and clinical expertise.
Non-employee members of the Scientific Advisory Board are compensated for their
participation on this board.
MANAGEMENT
Directors and Executive Officers
The following table sets forth certain information with respect to the directors
and executive officers of Corgenix as of June 30, 1999:
----------------------------------------------------------
Name Age Position
----------------------------------------------------------
----------------------------------------------------------
Luis R. Lopez, M.D. 51 Chief Executive Officer and
(1) Chairman
----------------------------------------------------------
----------------------------------------------------------
Douglass T. Simpson 51 President, Chief Operating
(1) Officer
----------------------------------------------------------
----------------------------------------------------------
W. George Fleming, 67 Vice President,
Ph.D. (1) International Operations
----------------------------------------------------------
----------------------------------------------------------
Ann L Steinbarger (1) 46 Vice President, Sales and
Marketing
----------------------------------------------------------
----------------------------------------------------------
Taryn G. Reynolds (1) 40 Vice President, Operations
----------------------------------------------------------
----------------------------------------------------------
Catherine A. Fink, 34 Executive Scientific Director
Ph.D. (1) (2)
----------------------------------------------------------
----------------------------------------------------------
Nanci Dexter 34 Director of Quality
----------------------------------------------------------
----------------------------------------------------------
Frances E. Flanagan 47 Director of Manufacturing
(3)
Brian E. Johnson 50 Director
Douglas A. Triplett, 47 Chairman,
M.D. Scientific Advisory Board
----------------------------------------------------------
(1) Executive Officer
(2) Elected Vice President, General Manager by the Board on October 7, 1999.
(3) Joined Corgenix September 1999.
Luis R. Lopez, M.D. Dr. Lopez' biographical
information is on page 6 of this proxy statement.
Douglass T. Simpson. Mr. Simpson's biographical
information is on page 6 of this proxy statement.
W. George Fleming, Ph.D., has been the Vice President, International Operations,
of Corgenix since May 1998. Dr. Fleming joined Corgenix's operating subsidiary
as Director of European Operations in 1992, after serving as a consultant in
international distribution to Corgenix from 1990 to 1992. He was promoted to
Managing Director, European Operations, and in 1996 to Vice President,
International. Prior to joining Corgenix's operating subsidiary, Dr. Fleming was
a director of Unilever's Medical Products Group in the UK, a (pound)41 million
health care company. He joined Oxoid, a subsidiary of Brooke Bond in 1968,
serving in a number of management positions leading to his appointment as
Director of Marketing in 1976, managing their growth up to (pound)31 million in
1985, when it was acquired by Unilever. Dr. Fleming received a B.Sc. degree from
Queens University, Belfast, Northern Ireland, and a Ph.D. in Business
Administration from Fairfax University, Baton Rouge, Louisiana.
Ann L. Steinbarger has been the Vice President, Sales and Marketing, of Corgenix
since May 1998. Ms. Steinbarger joined Corgenix's operating subsidiary in
January 1996 as Vice President, Sales and Marketing with responsibility for its
worldwide marketing and distribution strategies. Prior to joining Corgenix, Ms.
Steinbarger was with Boehringer Mannheim Corporation, Indianapolis, Indiana, a
$200 million IVD company. At Boehringer from 1976 to 1996, she served in a
series of increasingly important sales management positions. Ms. Steinbarger
holds a B.S. degree in Microbiology from Purdue University in West Lafayette,
Indiana.
Taryn G. Reynolds has been the Vice President, Operations, of Corgenix since May
1998. Mr. Reynolds joined Corgenix's operating subsidiary in 1992, serving first
as Director of Administration, then as Managing Director, U.S. Operations, and
then from o 1996 onward as Vice President, Operations with overall management
responsibility for Corgenix's headquarters facility, including R&D, Quality,
Administration and Manufacturing. Prior to joining Corgenix, Mr. Reynolds held
executive positions at Brinker International, MJAR Corporation and M&S
Incorporated, all Colorado-based property, operational and financial management
firms.
Catherine A. Fink, Ph.D., was elected Vice President, General Manager of the
Company on October 7, 1999. She had been Corgenix's Executive Scientific
Director since May 1998. Dr. Fink joined Corgenix's operating subsidiary in 1996
as Director of Research and Development with responsibility for product
development, and in 1997 was promoted to Executive Scientific Director with
additional responsibilities for Quality Control. She chairs Corgenix's technical
committee. Prior to joining Corgenix, Dr. Fink was with DDx, Inc., a Denver,
Colorado based privately-held biotechnology firm from 1994 until 1996, and from
1993 to 1994 was Product Development Manager at Trinity Biotech plc., an Irish
biotechnology company which develops and manufactures rapid saliva and blood
based diagnostic tests. From 1990 to 1993, she was with Biosyn Ltd. (Belfast), a
manufacturer of diagnostic tests for medical and veterinary applications. Dr.
Fink received a B.Sc. (with Honors) from University College Dublin, and a Ph.D.
in immunology from the National University at Ireland.
Nanci Dexter has been Corgenix's Director of Quality and Regulatory Affairs
since May 1998. Ms. Dexter joined Corgenix as Director of Quality and Regulatory
Affairs in 1997. From 1996 to 1997, she was Director of Regulatory Affairs and
Quality Assurance at In-X Corporation, a Denver based medical device company,
and from 1993 to 1996, was Manager of Quality Assurance and Quality Control at
Cortech, Inc., a Denver biopharmaceutical company. From 1987 to 1993, Ms. Dexter
was with Marquest Medical Products, Inc. (Englewood, Colorado) where she held
several positions, including Manager of Corporate Document Control. She has a BS
degree in Business Administration from Colorado State University (Ft Collins,
Colorado), and is a member of numerous professional organizations including the
American Society for Quality Control, Regulatory Affairs Professionals Society,
Society of Quality Assurance and the Colorado Medical Device Association. Ms.
Dexter is a Certified Quality Auditor.
Frances Flanagan joined Corgenix in September 1999 as Director of Manufacturing.
From 1983 to 1986, she held positions in research, product development and
technical support at Baxter Travenol in Cambridge, Massachusetts. From 1986 to
1999, she was a senior scientist and supervisor at PerSeptive Biosystems, Inc.,
a subsidiary of Perkin-Elmer Corporation in Framingham, Mass. She has a B.S.
degree in Biology from the University of Massachusetts.
Brian E. Johnson Mr. Johnson's biographical information
is on page 7 of this proxy statement.
Douglas A. Triplett, M.D., has been an advisor to Corgenix's operating
subsidiary since 1991. He is Vice President and Director of Medical Education
and Director of Hematology for Ball Memorial Hospital in Muncie, Indiana. Since
1980 he has also been a Professor of Pathology, and since 1981 Assistant Dean,
of Indiana University School of Medicine. He previously served as the Director
of the Hematopathology Program at Ball Memorial Hospital, Associate Professor of
Pathology at Indiana University School of Medicine and Chief of Pathology at the
Raymond W. Bliss Army Hospital. A graduate of Indiana University School of
Medicine, Dr. Triplett is Chairman of the Coagulation Resource Committee of the
College of American Pathologists and Co-Chairman of the Scientific Subcommittee
of the International Committee on Thrombosis and Hemostasis: Lupus
Anticoagulants. He is certified by the American Board of Pathology in Anatomic
and Clinical Pathology, Hematology and Transfusion Medicine. Dr Triplett
received the 1989 Medal of the American Society of Clinical Pathologists.
<PAGE>
EXECUTIVE COMPENSATION
Compensation
The following table shows how much compensation was paid by Corgenix's operating
subsidiary for the last three fiscal years to Corgenix's Chief Executive Officer
and each other executive officer whose total annual salary and bonus exceeded
$100,000 for services rendered to the subsidiary during such fiscal years
(collectively, the "Named Executive Officers").
Summary Compensation Table
Annual
Compensation
--------------
Name and Principal Fiscal
Position Year Salary
-------------------------------------------------------------------
Dr. Luis R. Lopez(1)................. 1999 $169,000
Chairman, Chief
Executive Officer 1998 $160,000
1997 $143,333
Douglass T. Simpson(2)................. 1999 $149,000
President, Chief
Operating Officer 1998 $140,000
1997 $123,333
Ann L. Steinbarger(3)................ 1999 $109,000
Vice President
1998 $100,000
1997 $100,000
(1)Includes issuance of 47,174 shares in lieu of $20,000 cash plus the issuance
of 25,000 shares in lieu of $9,000 cash pursuant to the Stock Compensation
Plan.
(2)Includes issuance of 41,386 shares in lieu of $17,500 cash plus the issuance
of 25,000 shares in lieu of $9,000 cash pursuant to the Stock Compensation
Plan.
(3)Includes issuance of 29,520 shares in lieu of $12,500 cash plus the issuance
of 25,000 shares in lieu of $9,000 cash pursuant to the Stock Compensation
Plan.
Long-Term Incentive Compensation
As of the fiscal year ended June 30, 1999, Corgenix did not have any equity
incentive, stock option or stock purchase plans in place other than an employee
stock purchase plan.
The 1999 Incentive Stock Plan was not in effect as of the fiscal year ended June
30, 1999. See "Proposal 2 Approval of the 1999 Incentive Stock Plan".
In addition, the Board has approved a stock compensation plan (the "Stock
Compensation Plan") effective January 1, 1999 pursuant to which executive
officers and certain consultants may elect to receive a portion of their salary
in Corgenix common stock. This plan is intended to further the growth and
advance the best interests of Corgenix by supporting and increasing the
Company's ability to attract, retain and compensate persons of experience and
ability and whose services are considered valuable, to encourage the sense of
proprietorship in such persons in the development and success of the Company.
The Plan provides for stock compensation through the award of the Company's
Common Stock, as a bonus or, at the Participant's election, in lieu of cash
compensation for services rendered. To date, all compensation has been in lieu
of cash compensation for services rendered.
Employment and Consulting Agreements
Corgenix has entered into three-year employment agreements with the following
officers at minimum annual salaries as noted opposite each of their names:
o Luis R. Lopez, M.D. - $160,000
o Douglass T. Simpson - $140,000
o Ann L Steinbarger - $100,000
o Taryn G. Reynolds - $90,000
o Catherine A. Fink, Ph.D. - $80,000
Corgenix has also executed a three-year consulting contract with Wm. George
Fleming, Ph.D., Corgenix's Vice President, International Operations, in
consideration for a minimum annual fee of $60,000.
Each of the above agreements provides for severance payments equal to the salary
due during the term of the agreement if the employment of the individual is
terminated without cause (as defined in the respective agreements).
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of Corgenix is currently composed of Brian Johnson.
No interlocking relationship exists between any member of the Corgenix'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.
Section 16(a) Beneficial Ownership Reporting Compliance
Corgenix's directors and executive officers and persons who are beneficial
owners of more than 10% of the common stock ("10% beneficial owners") are
required to file reports of their holdings and transactions in common stock with
the Commission and to furnish Corgenix with such reports. Based solely upon its
review of the copies of such reports Corgenix has received or upon written
representations it has obtained from certain of these persons, Corgenix believes
that on one occasion, several of its directors and executive officers were ten
(10) days late in filing their Initial Statement of Beneficial Ownership of
Securities on Form 3. Except for these late filings as of September 10, 1998,
Corgenix believes that all of its directors, executive officers and 10%
beneficial owners had complied with all applicable Section 16(a) filing
requirements.
<PAGE>
DIRECTORS' AND OFFICERS' OWNERSHIP
OF CORGENIX MEDICAL STOCK
The following table shows how much Corgenix common stock each Named Executive
Officer and director owned as of June 30, 1999. Other than Dr. Lopez, no other
director or executive officer beneficially owned more than 5% of the common
stock, and directors and executive officers as a group beneficially owned 20.10%
of the common stock.
- ----------------------------------------------------------
Shares Beneficially
Owned
- -------------------------------- -----------------------
- -------------------------------- -----------------------
Name of Beneficial Owner Number Percent
- -------------------------------- ---------- ---------
- -------------------------------- ---------- ----------
Dr. Luis R. Lopez(1)(2)...... 2,414,762 14.33%
Corgenix Corporation
12061 Tejon Street
Westminster, Colorado 80234
- -----------------------------------------------------------
- -----------------------------------------------------------
Raul Diez Canseco............ 1,123,221 6.67%
Corgenix Corporation
12061 Tejon Street
Westminster, Colorado 80234
- -----------------------------------------------------------
- -----------------------------------------------------------
Jana Hartinger Mazzini....... 1,095,788 6.50%
Corgenix Corporation
12061 Tejon Street
Westminster, Colorado 80234
- -----------------------------------------------------------
- -----------------------------------------------------------
Leland P. Snyder............. 1,043,997 6.20%
Corgenix Corporation
12061 Tejon Street
Westminster, Colorado 80234
- -----------------------------------------------------------
- -----------------------------------------------------------
Brian E. Johnson(2).......... 37,483 *
*
- -----------------------------------------------------------
- -----------------------------------------------------------
Alev T. Lewis(2) (3)......... 10,000 *
*
- -----------------------------------------------------------
- -----------------------------------------------------------
Douglass T. Simpson(2)....... 285,542 1.70%
- -----------------------------------------------------------
- -----------------------------------------------------------
Ann L. Steinbarger(2)........ 91,576 *
*
- -----------------------------------------------------------
- -----------------------------------------------------------
All directors and current 3,386,139 20.10%
executive officers
as a group (8 persons)
(1)(2).......................
- -----------------------------------------------------------
* Less than 1%
(1) Includes 253,000 shares held of record by Transition Partners Limited, as to
which Dr. Lopez has power to vote. Dr. Lopez disclaims beneficial ownership
of such shares.
(2) Director or current officer.
(3) Alev T. Lewis resigned as a director on September 21, 1999.
<PAGE>
COMMON STOCK PERFORMANCE
The common stock of Corgenix is reported on the NASD Stock Market's OTC Bulletin
Board (R) under the symbol "COGX." The common stock began active trading in June
1998.
The following table sets forth the quarterly stock prices from trading through
September 30, 1999. No dividends have been declared or paid on Corgenix's common
stock during such period. The stock price performance shown below is not
necessarily indicative of future price performance:
- -----------------------------------------------------------
Stock Price Dates Stock Price Ranges
- -----------------------------------------------------------
06/23/98 - 06/30/98 $1.00 - $1.50
07/01/98 - 09/30/98 $0.53 - $1.62
10/01/98 - 12/31/98 $0.19 - $0.70
01/01/99 - 03/31/99 $0.38 - $0.59
04/01/99 - 06/30/99 $0.18 - $0.41
07/01/99 - 09/30/99 $0.13 - $0.28
<PAGE>
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Consulting Agreement
On June 30, 1998, Corgenix was party to a Consulting Agreement dated May 22,
1998 with TransGlobal Financial Corporation ("TGF"). The Consulting Agreement
was entered into in connection with closing of the Merger. The President and
controlling shareholder of TGF is Mike M. Mustafoglu, who also served as a
director of Corgenix from May 22, 1998 to November 10, 1998. Under the terms of
the Consulting Agreement, TGF was to provide advice, on an exclusive basis, to
Corgenix regarding financial and business matters, including but not limited to
assistance with fundraising to implement Corgenix's business plans, review and
assessment of capitalization, merger and acquisition prospects, and other
transactions. The Consulting Agreement was effective for a 3-year term ending
May 22, 2001.
On October 7, 1999, Corgenix and TGF executed a settlement agreement (the
"Settlement Agreement") which terminated the Consulting Agreement. Under the
terms of the Settlement Agreement, Corgenix issued to Mr. Mustafoglu 272,727
shares of Common Stock, and executed a promissory note in the amount of $55,000,
to be paid over one year.
On September 21, 1999, Alev T. Lewis, TGF's nominee to the Board, also resigned
as a Director of the Company.
Corporate Relations Agreement
Corgenix was a party to an agreement dated April 14, 1998 with Corporate
Relations Group, a Florida corporation ("CRG"). Pursuant to this agreement and a
related payment agreement, CRG provided corporate relations services to Corgenix
for a period of one year
for a fee of $75,000.
In connection with the execution of this agreement, Gulf Atlantic Publishing,
Inc. ("GAP") purchased 950,000 shares of Corgenix's common stock for total
consideration of $50,000.
CRG and GAP are both wholly owned subsidiaries of Stratcom Media, Ltd., a
publicly held corporation.
The agreement with CRG expired on April 14, 1999 and was not renewed.
<PAGE>
PROPOSAL 2
APPROVAL OF THE 1999 INCENTIVE STOCK PLAN
Introduction
The Corgenix Corporation 1999 Incentive Stock Plan (the "Stock Plan") was
adopted by the Board of Directors of Corgenix on October 27, 1999, subject to
shareholder approval.
A total of 500,000 shares were reserved for issuance under the Stock Plan. As of
October 27, 1999, the Stock Plan had no participants and all 500,000 shares were
available for grant.
Purpose
The Stock Plan is intended to encourage ownership of shares of Corgenix by its
employees, directors and consultants by providing an additional incentive to
promote the success of the business. Options granted are either incentive stock
options or nonstatutory stock options, and shares may be sold or granted to
employees or consultants at the discretion of the Board of Directors and as
reflected in the terms of a written stock option agreement, stock purchase
agreement or stock grant agreement.
SUMMARY
The full text of the Stock Plan is set forth as Appendix A to this proxy
statement. The following summary of the Stock Plan is qualified by reference to
that text:
Shares Subject to the Stock Plan.
An aggregate of 500,000 shares of common stock is reserved for the issuance
under the Stock Plan, subject to adjustment. The Board of Directors of Corgenix
will make the determination on whether the shares under the Stock Plan may be
authorized but unissued shares or issued shares that will be reacquired by
Corgenix. If an option expires or becomes unexercisable for any reason without
having been exercised in full, the unpurchased shares shall become available for
future grant or sale under the Stock Plan unless the Stock Plan has been
terminated.
Administration
The Stock Plan will be administered by the Board of Directors or a committee
(the "Committee") appointed by the Board consisting of a majority of
non-executive directors (as defined in Rule 16b-3 under the Securities Exchange
Act of 1934).
The Board and the Committee will have full authority to:
o administer the Stock Plan,
o interpret and construe any provision of the Stock
Plan, and
o adopt such rules and regulations for administering the Stock Plan as it
may deem necessary to:
o comply with the requirements of the Stock Plan,
o retain the classification of an incentive stock
option under the Code, and
o conform to any regulation or to any change in any
law or regulation applicable thereto.
The Board of Directors may reserve to itself any of the authority granted to the
Committee as set forth in the Stock Plan, and may perform and discharge all of
the functions and responsibilities of the Committee at any time that a duly
appointed Committee is not serving.
No interested director may act upon its own grant of an option under the Stock
Plan but may be counted in determining the existence of a quorum.
Powers of the Board
Subject to the provisions of the Stock Plan, the Board will have the
discretionary authority:
(i) to grant incentive stock options to employees or nonstatutory
stock options to employees, directors, or consultants;
(ii) to sell or grant stock to employees,
directors or consultants;
(iii) to determine, upon review of the relevant information, the fair
market value of the stock;
(iv) to determine the exercise price per share of options to be
granted, which exercise price shall be determined in accordance with the
Stock Plan;
(v) to determine the employees, directors and consultants to whom,
and the time or times at which, options shall be granted and the number of
shares to be represented by each option;
(vi) to interpret the Stock Plan;
(vii) to prescribe, amend, and rescind rules
and regulations relating to the Stock Plan;
(viii) to determine the terms and provisions of each stock option
agreement and each stock restriction agreement granted (which need not be
the same for each option granted, or sale or grant of Stock) and, with the
consent of the holder thereof, modify, terminate or amend such agreement;
(ix) to accelerate or defer (with the consent
of the optionee) the exercise date of any option;
(x) to authorize any person to execute on behalf of Corgenix any
instrument required to effectuate the grant of an option or the sale or
grant of any stock; and
(xi) to make all other determinations deemed necessary or advisable
for the administration of the Stock Plan.
Eligibility
Options may be granted and stock may be sold or granted to employees, directors
and consultants, provided that only employees of Corgenix may be granted
incentive stock options. Any eligible employee, director or consultant who has
been granted either an option or stock or has purchased any stock under the
Stock Plan may be granted additional options or additional shares of stock.
Incentive Stock Option Limitations
In no event will an incentive stock option be granted to any person who, at the
time of such grant, owns (as defined in Section 422 of the Code) shares
representing more than 10% of the total combined voting power of all classes of
shares of Corgenix or of its parent or subsidiary corporation ("10% beneficial
owners"), unless:
o the option price is at least 110% of the fair
market value of the stock subject to the option, and
o such option is by its terms not exercisable after the expiration of
five years from the date such option is granted.
During any single calendar year, the aggregate fair market value (determined as
of the time of grant) of the shares with respect to which incentive stock
options are exercisable for the first time by any individual employee, director
or consultant under any of Corgenix's incentive stock option plans (or its
parent and subsidiary corporations, if any), may not exceed $100,000.
Price
The per share exercise price for any option and the price for any stock to be
sold will be determined by the Board of Directors. However, the exercise price
of the shares covered by each incentive stock option will be at least 100% of
the fair market value of the shares at the time of grant, unless such grant is
made to a 10% beneficial owner.
The exercise price of a nonstatutory stock option may not be less than 85% of
the fair market value on the date of the grant.
Payment
The purchase price for any sale of stock is to be paid at the time of purchase
and the exercise price paid in full in cash or such other lawful consideration
approved by the Board or Committee.
Options
Subject to the provisions of the Stock Plan, the Board will determine for each
option (which options do not need to be identical):
o the number of shares for which the option will be
granted,
o the option price of the option, and
o all other terms and conditions of the option.
Each option granted under the Stock Plan will:
o have a term up to seven (7) years from the date of grant or up to five
(5)years from the date of grant if an incentive stock option is granted to
a 10% beneficial owner, unless shorter terms are provided in the
stock option agreements
o be exercisable at such times and under such conditions as
determined by the Board
o be subject to the performance criteria with respect to Corgenix
or the optionee, or both, as permissible under the Stock Plan
o not be exercised for a fraction of a share
o be deemed to be exercised when:
o written notice of such exercise has been given to Corgenix in accordance
with the terms of the option by the person entitled to exercise the
option, and
o full payment for the Shares with respect to which
the option is exercised has been received by
Corgenix
The Board has sole discretion to permit an optionee to surrender to Corgenix
shares of stock previously acquired by the optionee at least six (6) months
prior to such surrender as part or full payment for the exercise of an option.
Exercise of an option in any manner will result in a decrease in the number of
shares which may be available after such exercise by the number of shares as to
which the option is exercised, both for purposes of the Stock Plan and for sale
under the option.
Termination of Employment
In the event that the employment of an employee, director or consultant or the
engagement of a director or consultant to whom an option was granted terminates
without cause, other than by reason of death or disability, such option may be
exercised (to the extent that such person will have been entitled to do so at
the termination of his employment or engagement) at any time within three (3)
months after such termination. To the extent that the option holder was not
entitled to exercise his option at the time of his termination, or insofar as he
does not exercise such option to the extent he was entitled to within the time
specified, the option will terminate at the time of such termination.
Disability of an Optionee
In the event an optionee is unable to continue his employment with or to perform
services for the benefit of Corgenix as a result of his total and permanent
disability (as defined in Section 22(e)(3) of the Code), he may, but only within
one (1) year after termination due to such disability, exercise his option to
the extent he was entitled to exercise it at the date of such disability. To the
extent that he was not entitled to exercise the option at the date of
disability, or insofar as he does not exercise such option to the extent he was
entitled within the time specified, the option will terminate.
Death of an Optionee
Unless otherwise set forth in the option agreement, in the event of the death of
an optionee, the option may be exercised by the optionee's estate or by a person
who acquired the right to exercise the option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
death, at any time within one (1) year following the date of death if:
(i) the optionee dies during the term of the option and is at the
time of his death an employee, director or consultant of Corgenix who will
have been in continuous status as an employee, director or consultant
since the date of grant of the option; or
(ii) the optionee dies within three (3) months after the termination
of continuous status as an employee, director or consultant of Corgenix.
Non-Transferability
The options may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the optionee, only by
the optionee.
Adjustments Upon Changes in Capitalization
Subject to any required action by the shareholders of Corgenix:
o the number of shares of stock covered by each outstanding option,
o the number of shares of stock that have been authorized for issuance
under the Stock Plan (but as to which no stock has been sold or
granted, or no options have yet been granted or which have been
returned to the Stock Plan upon cancellation or expiration of an option
upon termination of employment), and
o the price per share of stock covered by each such outstanding option shall
be proportionately adjusted as determined by the Board for:
o any increase or decrease in the number of issued shares of stock
resulting from a stock split,
o the payment of a stock dividend with respect to the stock, or
o any other increase or decrease in the number of issued shares of
stock effected without receipt of consideration by Corgenix;
provided, however, that conversion of any convertible securities of Corgenix
will not be deemed to have been "effected without receipt of consideration."
Except as expressly provided in the Stock Plan, no issuance by Corgenix of
shares of stock of any class, or securities convertible into shares of stock of
any class, will affect, and no such adjustment will be made with respect to, the
number or price of shares of stock subject to an option.
Liquidation or Merger
In the event of a proposed dissolution or liquidation of Corgenix, the option
shall terminate immediately prior to the consummation of such proposed action,
unless otherwise provided by the Board. The Board has sole discretion in such
instances to declare that any option shall terminate as of a date fixed by the
Board and to give each optionee the right to exercise his option as to all or
any part of the shares covered by an option, including shares as to which the
option would not otherwise be exercisable.
In the event of a proposed sale of all or substantially all of the assets of
Corgenix, or the merger or consolidation of Corgenix with or into another
corporation in a transaction in which Corgenix does not survive or any other
transaction in which there is a change of more than 50% in the voting control of
Corgenix, all options held by any consultant, employee or director will vest and
may be fully exercised without regard to the normal vesting schedules of the
options in the event such individual's employment or other status with Corgenix
is involuntarily terminated without cause (as defined in Section 7(e) of the
Stock Plan) in connection with the transaction or within one year after closing
of the transaction.
Withholding Taxes
Corgenix may take such steps as it may deem necessary or appropriate for the
withholding of any taxes which Corgenix is required by law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign, to
withhold in connection with any option. This step may include requiring the
optionee to pay such tax at the time of exercise or the withholding of issuance
of shares of stock to be issued upon the exercise of any option until the
optionee reimburses Corgenix for the amount Corgenix is required to withhold
with respect to such taxes. Corgenix has the sole discretion to allow such taxes
to be satisfied by withholding optioned shares.
Right of First Refusal
Any shares issued under the Stock Plan, including shares issued upon exercise of
options, are subject to a right of first refusal held by Corgenix. Prior to any
proposed transfer of the shares, the holder of the shares is to deliver to
Corgenix written notice of the proposed transfer, designating the number of
shares, the proposed transferee, and the price and terms (if any) offered for
the shares. Corgenix has thirty (30) days from receipt of the notice to provide
written notice to the holder to purchase any or all of the shares designated in
the notice at the price and terms set forth in the notice (if any) or for cash
at the then-current fair market value set by the Board of Directors. Corgenix
may assign all or any part of this right to any third party, who may then
purchase the shares directly from the holder. If Corgenix or any assignee fails
to exercise this right as to all of the shares set forth in the original notice,
the holder may, within thirty (30) days after such failure to exercise, transfer
the shares to the proposed transferee in accordance with such notice.
Effectiveness of Stock Plan
The Stock Plan becomes effective on October 27, 1999, subject to shareholder
approval.
Termination and Amendment of the Plan
The Plan terminates on December 31, 2009, and no options will be granted under
the Stock Plan after that date.
The Board of Directors may at any time and from time to time modify or amend the
Stock Plan in such respects as it deems advisable. The Board may not, however,
without approval by a majority in interest of all the shares of Corgenix:
o increase the total number of shares covered by the Stock Plan
(except by operation of Section 9 hereof),
o change the formula for determining the exercise price or the maximum
term of options,
o materially lessen the requirements as to eligibility for
participation in the Stock Plan, and
o change the class of persons eligible to receive options or rights
under the Stock Plan, including the definitions of "employee,"
"director" and "consultant."
TAX CONSEQUENCES OF THE PLAN
The following is a general summary of certain federal income tax consequences
that may apply to recipients of stock options under the Stock Plan. Because the
application of tax laws may vary according to individual circumstances, a
participant should seek professional tax advice concerning the tax consequence
of participating in the Stock Plan, including the potential application and
effect of state, local and foreign tax laws and estate and gift tax
considerations.
Incentive Stock Options
A participant who is granted an incentive stock option recognizes no taxable
income when the incentive stock option is granted. Generally, no taxable income
is recognized upon exercise of an incentive stock option unless the alternative
minimum tax applies as described below. Instead, a participant who exercises an
incentive stock option recognizes taxable gain or loss when the participant
sells his or her shares. Any gain or loss recognized on the sale of shares
acquired upon exercise of an incentive stock option is taxed as long term
capital gain or loss if the shares have been held for more than one (1) year
after the option was exercised and for more than two (2) years after the option
was granted. In this event, Corgenix receives no deduction with respect to the
incentive stock option shares.
Long-term capital gains of individuals presently may be taxed at lower rates
than ordinary income, but the deductibility of capital loses remains subject to
limitation.
If the participant disposes of the shares within one (1) year after the option
was exercised or within two (2) years after the option was granted (a
"disqualifying disposition"), the participant recognizes ordinary income on
disposition of the shares, to the extent of the difference between the fair
market value on the date of exercise (or potentially a date up to six months
thereafter if the participant is subject to Section 16(b) of the Exchange Act
with respect to such disposition) and the option price; provided, however, that
in the case of a disposition where a loss, if sustained, would be recognized for
tax purposes, the ordinary income recognized shall not exceed the net gain upon
such disposition. Any additional gain will be taxed as capital gain. Any loss
will be taxed as a capital loss. Corgenix generally receives a corresponding
deduction in the year of disposition equal to the amount of ordinary income
recognized by the participant.
Effect of Alternative Minimum Tax
Certain taxpayers who have significant tax preferences (and other items allowed
favorable treatment for regular tax purposes) may be subject to the alternative
minimum tax ("AMT"). AMT is payable only if and to the extent that it exceeds
the taxpayer's regular tax liability, and any AMT paid generally may be credited
against subsequent regular tax liability.
For purposes of AMT, an incentive stock option is treated as if it were an
non-statutory stock option (see below). Thus, the difference between fair market
value on the date of exercise (or potentially up to six months thereafter) and
the option price is included in income for AMT purposes, and the taxpayer
receives a basis equal to such fair market value for subsequent AMT purposes.
However, regular tax treatment (see above) will apply for AMT purposes if a
disqualifying disposition, where a loss, if sustained, would be recognized,
occurs in the same taxable year as the options are exercised.
Non-Statutory Stock Options
The tax treatment of non-statutory stock options differs significantly from the
tax treatment of incentive stock options. No taxable income is recognized when
an non-statutory stock option is granted, but upon the exercise of an
non-statutory stock option, the difference between the fair market value of the
shares on the date of exercise and the option price is taxable as ordinary
income and generally is deductible by Corgenix.
If the participant is subject to Section 16(b) of the Exchange Act, the date for
measuring taxable income potentially may be deferred for up to six months after
the date of exercise unless the optionee makes an election under Section 83(b)
of the Code within thirty (30) days after exercise. If a Section 83(b) election
is made, the participant will be taxed currently upon exercise of the
non-statutory stock option in an amount equal to the excess, if any, of the fair
market value of the shares at that time over the option price. Any future
appreciation in the shares will be treated as capital gain upon the sale or
exchange of the shares.
Change in Control
If there is an acceleration of the vesting or exercisability of Stock Options
upon a change in control (as defined in the Stock Plan), all or a portion of the
accelerated benefits may constitute "Excess Parachute Payments" under Section
280G of the Code. The employee receiving an Excess Parachute Payment incurs a
non-deductible excise tax of 20% of the amount of the payment in excess of the
employee's average annual compensation over the five calendar years preceding
the year of the change in control and Corgenix is not entitled to a deduction
for such excess amount.
Voting Requirements
Approval of the Stock Plan requires an affirmative vote of at least a majority
of the shares of the common stock of Corgenix present or represented by proxy
and voting at the Annual Meeting.
<PAGE>
PROPOSAL 3
APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN
Introduction
The Corgenix Corporation Employee Stock Purchase Plan (the "ESPP Plan") was
adopted by the Board of Directors of Corgenix effective February 1, 1999,
subject to shareholder approval. The ESPP Plan has no set expiration date.
A total of 150,000 shares of common stock were reserved for the ESPP Plan.
Participation in the ESPP Plan
(through December 15, 1999)
investment number of shares
Named Executive Officer Group
Luis R. Lopez, M.D. $0 0
Douglass T. Simpson $1,632.49 10,270
Ann L. Steinbarger $0 0
Executive Officer Group $7,302.50 42,330
Non-Executive Director Group $0 0
Non-Executive Officer Employee Group $3,152.25 16,845
Purpose
The ESPP Plan is intended to provide eligible employees of Corgenix with an
opportunity to acquire a proprietary interest in Corgenix at a discount through
their participation in a plan designed to qualify as an employee stock purchase
plan under Section 423 of the Code.
SUMMARY
The full text of the ESPP Plan is set forth as Appendix B to this proxy
statement. The following summary of the ESPP Plan is qualified by reference to
that text:
Administration
The ESPP Plan will be administered by the Board (the "Plan Administrator"),
which may from time to time delegate all or part of its authority to a committee
(the "Committee") composed of at least two (2) members of the Board of
Directors, all of whom will be non-employee directors (as defined under Rule
16b-3 of the Exchange Act). The Plan Administrator has full authority to: o
administer the ESPP Plan
o adopt such rules and regulations for administering the ESPP Plan as it
may deem necessary in order to comply with the requirements of Section
423 of the Code
o delegate to an agent or agents any of its responsibilities under the
ESPP Plan except its responsibilities to:
o establish the number of shares available for purchase by
eligible employees during any purchase period,
o establish the maximum and minimum percentage of base compensation
to be paid by any single employee for the purchase of common stock
during any of the periods, and
o construe and interpret the provisions of the ESPP Plan
No member of the Plan Administrator will be personally liable for any action,
determination or interpretation made in good faith with respect to the ESPP
Plan, and all members of the Plan Administrator will, in addition to their
rights as directors, be fully protected by Corgenix with respect to any such
action, determination or interpretation.
Purchase Period
Unless otherwise determined by the Plan Administrator, a "Purchase Period" will
commence on the first day of each calendar quarter and will terminate on the
last day of each such quarter. The Plan Administrator may establish differing
commencement dates and durations; provided however, that in no event will a
Purchase Period extend beyond twenty-seven (27) months, nor will two (2)
Purchase Periods run concurrently.
Securities to be Offered
The stock purchasable by participants in the ESPP Plan will be Corgenix's
authorized but unissued or reacquired common stock. In order to have shares
available for sale under the ESPP Plan, Corgenix may repurchase shares of common
stock on the open market, or issue authorized but unissued common stock. The
maximum number of shares that may be sold to employees during any single
Purchase Period will be established by the Plan Administrator prior to the
beginning of the Purchase Period; provided however, that the total number of
shares which may be sold to employees throughout the entire duration of the ESPP
Plan will not exceed 150,000 shares (subject to adjustment as described below).
Eligibility and Participation
Every employee of Corgenix who, on the commencement date of a subject Purchase
Period, is actively employed (unless temporarily off the payroll due to illness,
vacation, jury duty or other employer-approved absence) on a basis which
customarily requires not less than twenty (20) hours of service per calendar
week (a "Participant") is eligible to participate in the ESPP Plan during such
Purchase Period. An eligible employee may participate in the ESPP Plan at the
beginning of a particular Purchase Period by completing the enrollment forms
prescribed by the Plan Administrator and filing such forms at least fifteen (15)
days prior to such Purchase Period.
Purchase of Securities Pursuant to the ESPP Plan
An eligible employee who becomes a Participant for a particular Purchase Period
will have the right, as of the beginning of the Purchase Period, to purchase
common stock upon the terms and conditions of the ESPP Plan and will execute a
purchase agreement embodying such terms and conditions and such other
provisions, not inconsistent with the ESPP Plan, as the Plan Administrator may
deem advisable.
Each Participant will, for any Purchase Period, have the right to purchase
common stock with a total purchase price equal to a designated percentage
between one percent (1%) and ten percent (10%) of each Participant's
compensation. A "Participant's Compensation" for a particular Purchase Period is
the amount of the Participant's after tax base salary or wages and overtime pay
but excluding bonuses and other incentive payments. No right to purchase common
stock under the ESPP Plan will be granted to an employee if such employee would,
immediately after the grant, own shares possessing five percent (5%) or more of
the total combined voting power or value of all classes of shares of Corgenix as
defined in Section 424(f) of the Code.
Termination of Participation
A Participant may, at any time prior to the last day of the Purchase Period,
terminate his or her right to purchase stock under the ESPP Plan by filing the
prescribed notification form. A Participant's termination of his or her right to
purchase will be irrevocable with respect to the Purchase Period to which it
pertains. Upon such election, the entire balance collected during such Purchase
Period will be refunded in cash and no further amounts will be deducted from the
Participant's payroll.
Purchase Price
The purchase price per share of common stock under the ESPP Plan will be 85% of
the fair market value of a share of common stock on the commencement date of the
subject Purchase Period. The fair market value of a share of common stock on any
date is to be the closing sales price, as quoted by the National Association of
Securities Dealers through NASDAQ National Market System, for the date in
question, or, if the common stock is listed on a national stock exchange, the
officially-quoted closing sales price on such exchange on the date in question.
If the fair market value of a share of common stock on the last day of the
Purchase Period is less than the fair market value of such share on the
commencement date of the Purchase Period, then the purchase price per share
under the ESPP Plan on the last day of the Purchase Period will be reduced to
85% of the fair market value of such share on the last day of the Purchase
Period.
Payment of Purchase Price
Payment of the purchase price for common stock under the ESPP Plan will be
effected by means of payroll deduction in an amount equal to the percentage of
the Participant's Compensation designated by the Participant in the purchase
agreement. A Participant may, only once during a Purchase Period (other than by
reason of termination), reduce the percentage of compensation to be paid for
shares of common stock to a lesser whole percentage by giving written notice to
the Plan Administrator.
Adjustments to Securities
In the event any change is made to the common stock purchasable under the ESPP
Plan (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend in excess of 10% at any single time, stock
split, combination of shares, exchange of shares, change in corporate structure
or otherwise), then appropriate adjustments will be made to:
o the maximum number of shares purchasable under the ESPP Plan,
o the maximum number of shares purchasable under any right to purchase
common stock outstanding under the ESPP Plan, and
o the number of shares and price per share subject to rights to purchase
common stock outstanding under the ESPP Plan.
Termination of Employment
If a Participant ceases to be an employee of Corgenix for any reason (including
death or retirement) during a Purchase Period, the Participant or the
Participant's personal representative has thirty (30) days thereafter to elect
to either receive a stock certificate for the number of shares of common stock
paid for during the Purchase Period up to the day prior to the date of the
Participant's cessation of employment or receive a cash refund of all sums
previously collected during such Purchase Period. Failure to make a timely
election will be treated as an election to receive a cash refund.
Exercise
Each right to purchase common stock under the ESPP Plan other than a purchase
right which has been accelerated under the ESPP Plan or which has been
previously terminated under the ESPP Plan will be exercised automatically on the
last day of the Purchase Period. Within forty-five (45) days after the end of
each Purchase Period, the Participant, or his or her nominee, will be issued a
stock certificate for the whole number of shares for which the Participant's
right to purchase has been exercised. Not more than one certificate will be
issued pursuant to the exercise of any right to purchase common stock under the
ESPP Plan. Any excess of the amount previously collected during the Purchase
Period over the purchase price of the issued shares will be promptly refunded or
left on deposit for the ensuing quarterly period.
If the total number of shares of common stock purchasable under the purchase
agreement of all Participants for a particular Purchase Period exceed the number
of shares available under the ESPP Plan, then the Plan Administrator will make a
pro rata allocation of the available shares and will notify the Participants of
such allocation.
Tax Effects of Plan Participation
A general summary of certain federal income tax consequences is provided that
may apply to Participants under the ESPP Plan. Because the application of tax
laws may vary according to individual circumstances, a Participant should seek
professional tax advice concerning the tax consequences of participating in the
ESPP Plan, including the potential application and effect of state, local and
foreign tax laws and estate and gift tax considerations.
A Participant who purchases common stock under the ESPP Plan recognizes no
taxable income when the shares are purchased. A Participant who purchases common
stock under the ESPP Plan recognizes taxable gain or loss when the shares are
sold. The difference between the discount purchase price paid by the Participant
for the shares and the actual value of the shares at the end of the Purchase
Period is always considered ordinary income. Any gain or loss recognized on the
sale of shares acquired upon the purchase is taxed as long-term capital gain or
loss if the shares have been held by the Participant for more than two (2) years
from the end of the applicable Purchase Period. In this event, Corgenix receives
no deduction with respect to the shares. Long-term capital gains of individuals
presently may be taxed at lower rates than ordinary income, but the
deductibility of capital losses remains subject to limitation.
If a Participant disposes of the shares purchased under the ESPP Plan within one
(1) year from the end of the applicable Purchase Period, the fifteen percent
(15%) discount between the actual purchase price paid by the Participant and the
fair market value at the end of such Purchase Period is considered ordinary
income. The difference between the actual value of the shares at the end of such
Purchase Period and the time of sale by the Participant is considered short-term
capital gain.
If the shares have been held by the Participant more than one (1) year but less
than two (2) years from the end of the applicable Purchase Period (a
"disqualifying disposition"), the Participant recognizes ordinary income on the
disposition of the shares to the extent of the difference between the discounted
purchase price paid by the Participant and the fair market value of the shares
at the end of the Purchase Period (or potentially a date up to six months
thereafter if a Participant is subject to Section 16(b) of the Securities
Exchange Act of 1934 with respect to such disposition). Any additional gain for
shares sold by the Participant under this disqualifying disposition is taxed as
long-term capital gain.
If the shares are sold at a loss by the Participant within one (1) year from the
end of the Purchase Period in which the shares were purchased, the loss will be
considered a short-term capital loss. However, if such shares are sold by the
Participant at a loss after one (1) year from the end of the applicable Purchase
Period, the loss will be considered a long-term capital loss. Corgenix generally
receives a corresponding deduction in the year of disposition equal to the
amount of ordinary income recognized by the Participant.
Withholding Taxes
Corgenix may withhold any taxes required by any law or regulation of any
governmental authority, whether federal, state or local, in connection with the
purchase of common stock under the ESPP Plan or the sale of such stock that is
not held for at least two (2) years after the beginning of the Purchase Period
during which the common stock was purchased. Such withholding may include all or
any portion of any payment or other compensation payable to the Participant,
unless the Participant reimburses Corgenix for such amount.
Assignability
Unless otherwise determined by the Board, no right to purchase common stock
granted under the ESPP Plan is assignable or transferable by a Participant other
than by will or the laws of descent and distribution, and during the lifetime of
the Participant, such purchase rights will be exercisable only by the
Participant.
Accrual Limitations
No Participant will be entitled to accrue rights to purchase common stock under
the ESP Plan which, when aggregated with purchase rights accruable by him under
other qualified employee stock purchase plans (within the meaning of Section 423
of the Code) of Corgenix (as defined in Section 424(f) of the Code), would
permit such Participant to purchase more than $25,000 worth of common stock
(determined on the basis of the fair market value of common stock on the date
the Participant accrues purchase rights under the ESPP Plan) for each calendar
year such purchase rights are at any time outstanding.
Amendment and Termination
The Board may from time to time alter, amend, suspend or discontinue the ESPP
Plan; provided, however, that no such action will adversely affect rights and
obligations with respect to rights to purchase common stock at the time
outstanding under the ESPP Plan. In addition, no action may be taken by the
Board without the approval of the shareholders of Corgenix that would:
o increase:
(a) the number of shares subject to the ESPP Plan, or
(b) the maximum number of shares for which a right to purchase common
stock under the ESPP Plan may be exercised (unless necessary to
effect the adjustments as described below)
o extend the term of the ESPP Plan
o alter the per share purchase price formula so as to reduce the
purchase price per share specified in the ESPP Plan
o materially increase the benefits accruing to participants under the
ESPP Plan
o materially modify the requirements for eligibility to participate in the
ESPP Plan or
o cause the ESPP Plan to fail to meet the requirements of an "employee stock
purchase plan" under Section 423 of the Code.
Change in Control of Corgenix
Subject to the limitations on amending the ESPP Plan, in the event Corgenix or
its shareholders enter into an agreement to dispose of all or substantially all
of the assets or outstanding capital stock of Corgenix by means of sale, merger,
reorganization or liquidation, each Participant of the ESPP Plan may either
receive a stock certificate for the number of shares of common stock paid for
during the Purchase Period up to the day prior to such transaction date or
receive a cash refund of deposits collected during such Purchase Period.
Voting Requirements
Approval of the ESPP Plan requires an affirmative vote of at least a majority of
the shares of the common stock of Corgenix present or represented by proxy and
voting at the Annual Meeting.
<PAGE>
OTHER INFORMATION
Directors' and Officers' Indemnification
The Bylaws of Corgenix provide that Corgenix will indemnify its directors and
executive officers and may indemnify its other officer, employees and agents to
the fullest extent permitted by Nevada law. Corgenix is also empowered under its
Bylaws to enter into indemnification agreements with its directors and officers
and to purchase insurance on behalf of any person it is required or permitted to
indemnify.
In addition, Corgenix's Articles of Incorporation, as amended, provides that, to
the fullest extent permitted by Nevada law, Corgenix's directors will not be
liable for monetary damages for breach of the director's fiduciary duty of care
to Corgenix and its shareholders. This provision in the Articles of
Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of
non-monetary relief would remain available under Nevada law. Each director will
continue to be subject to liability for:
o breach of the director's duty of loyalty to Corgenix,
o acts or omissions not in good faith or involving intentional
misconduct,
o knowing violations of law,
o any transaction from which the director derived an mproper personal
benefit,
o improper transactions between the director and Corgenix and
o improper distributions to shareholders and loans to directors and
officers.
This provision also does not affect a director's responsibilities under any
other laws, such as the federal securities laws.
Litigation
There is no pending litigation or proceeding involving a director or officer of
Corgenix as to which indemnification is being sought, nor is Corgenix aware of
any pending or threatened litigation that may result in claims for
indemnification by any director or officer.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE
The following documents filed or to be filed by Corgenix with the Securities and
Exchange Commission (the "Commission") are hereby incorporated or deemed to be
incorporated in this Proxy Statement by reference:
(a) Corgenix's Annual Report on Form 10-KSB for fiscal year ended June 30,
1999, filed with the Commission on September 28, 1999.
(b) Corgenix's Quarterly Reports on Form 10-QSB for the quarters ended
September 30, 1998, December 31, 1998, and March 31, 1999 filed with the
Commission on November 16, 1998, February 16, 1999, and May 17, 1999
respectively.
(c) The description of Corgenix's common stock contained in its
Registration Statement on Form 10SB/A-2, filed with the Commission on November
3, 1998.
(d) All other documents filed by Corgenix pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the date
of this Proxy Statement shall be deemed to be incorporated in this Proxy
Statement by reference and to a part hereof from the date of filing such
documents.
Any statement contained in a document incorporated, or deemed to be
incorporated, by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement to the extent that a statement contained
herein or in any other subsequently filed document which also is, or is deemed
to be, incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Proxy Statement.
Corgenix hereby undertakes to provide without charge to each person to
whom a Proxy Statement is delivered, upon written or oral request of such
person, a copy of any and all of the documents that have been incorporated by
reference in this proxy statement (not including exhibits to the information
that is incorporated by reference unless such exhibits are specifically
incorporated by reference into such documents). Such request may be directed to
Corgenix Corporation at 12061 Tejon Street, Westminster, Colorado 80234,
Attention: Douglass T. Simpson, President, telephone: (303) 457-4345.
<PAGE>
SHAREHOLDER PROPOSALS
No shareholder proposals were received by Corgenix for inclusion in this year's
proxy statement. If a shareholder wishes to present a proposal to be included in
the proxy statement for the next Annual Meeting of Shareholders, the proposal
must be submitted in writing and received by the Corporate Secretary of Corgenix
at its corporate offices located at 12061 Tejon Street, Westminster, Colorado
80234, no later than November 2, 2000.
By Order of the Board of Directors,
Douglass T. Simpson,
President
Westminster, Colorado
December 15, 1999
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN
YOUR PROXY CARD
IN THE ENVELOPE PROVIDED
AS SOON AS POSSIBLE
<PAGE>
Attachment A
CORGENIX MEDICAL CORPORATION
1999 INCENTIVE STOCK PLAN
1. Purpose of Plan. This Incentive Stock Plan is intended to encourage
ownership of shares of CORGENIX MEDICAL CORPORATION (the "Corporation") by
Employees, Directors and Consultants of the Corporation, thereby providing
additional incentive for such Employees, Directors and Consultants to promote
the success of the business. Options granted hereunder may be either Incentive
Stock Options or Nonstatutory Stock Options, and Shares may be sold or granted
to Employees or Consultants hereunder at the discretion of the Board and as
reflected in the terms of a written stock option agreement stock purchase
agreement or stock grant agreement.
2. Definitions. As used herein, the following
definitions shall apply:
(a) "Board" shall mean the Committee, if one has been appointed, or
the Board of Directors of the Corporation, if no Committee is appointed.
(b) "Code" shall mean the Internal Revenue Code of 1986, the rules
and regulations promulgated thereunder and the interpretations thereof, all as
from time to time in effect.
(c) "Corporation" shall mean Corgenix Medical Corporation, a Nevada
corporation.
(d) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan, if one is appointed.
(e) "Consultant" shall mean any person, including directors,
performing services for the benefit of the Corporation or any Parent or
Subsidiary of the Corporation as an independent consultant or adviser.
(f) "Continuous Status as an Employee or a Consultant" shall mean the
absence of any interruption or termination of service as an Employee, a Director
or a Consultant, as applicable. Continuous Status as an Employee shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Board, provided that either such leave is for a
period of not more than ninety (90) days or reemployment upon the expiration of
such leave is provided or guaranteed by contract or statute.
(g) "Director" shall mean a member of the Corporation's Board of
Directors.
(h) "Employee" shall mean any person employed by the Corporation or
any Parent or Subsidiary of the Corporation in a management position or in a
position requiring specialized training or expertise. The payment of a
director's fee by the Corporation shall not be sufficient to constitute
"employment" by the Corporation.
(i) "Fair Market Value" shall mean the value determined in good faith
by the Board; provided, however, that if there is a public market for the Stock,
the Fair Market Value shall mean the average of the closing bid and asked prices
of a share of Stock, as reported by The Wall Street Journal (or, if not
reported, as otherwise quoted by the National Association of Securities Dealers
through NASDAQ), on the date of the grant of the Option, or, if the Stock is
listed on the NASDAQ National Market System or is listed on a national stock
exchange, the closing price on such System or such exchange on the date of the
grant of the Option, as reported in The Wall Street Journal. In the event the
Stock is not traded publicly, the Fair Market Value of a share of Stock on the
date of the grant of the Option shall be determined, in good faith, by the Board
or the Committee and such determination shall be conclusive for all purposes.
The Board or Committee shall take into account such factors affecting value as
it, in its sole and absolute discretion, may deem relevant.
(j) "Incentive Stock Option" shall mean an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
(k) "Nonstatutory Stock Option" shall mean an Option not intended to
qualify as an Incentive Stock Option.
(l) "Option" shall mean a stock option granted pursuant to the Plan.
(m) "Optioned Stock" shall mean the Stock subject to an Option.
(n) "Optionee" shall mean an Employee, Director or Consultant who
receives an Option.
(o) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 425(e) of the Code.
(p) "Plan" shall mean this Incentive Stock Plan.
(q) "Share" shall mean a share of the Stock, as adjusted in
accordance with Section 9 of the Plan.
(r) "Stock" shall mean the Common Stock of the Corporation.
(s) "Stock Option Agreement" shall mean the written agreement setting
forth the grant of an Option and terms and conditions relating thereto (which
need not be the same for each Option).
(t) "Stock Restriction Agreement" shall mean the written agreement
setting forth the terms of any restrictions in connection with a sale or grant
of Stock under this Plan, in the form as the Board in its discretion may
approve.
(u) "Subsidiary" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 425(f) of the Code.
3. Shares Subject to Plan.
(a) Authorized Shares. There will be reserved for use from time to
time under the Plan, an aggregate of 1,000,000 shares of Stock of $.001 par
value of the Corporation, subject to adjustment as provided in Section 9 below.
As the Board of Directors of the Corporation shall from time to time determine,
the Shares may be in whole or in part, authorized but unissued Shares or issued
Shares which shall have been reacquired by the Corporation. If an Option should
expire or become unexercisable for any reason without having been exercised in
full the unpurchased Shares which were subject thereto shall become available
for future grant or sale under the Plan unless the Plan shall have been
terminated.
(b) Reservation of Shares. The Corporation, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan. The inability of
the Corporation for reasons outside the Corporation's control to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Corporation's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Corporation of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
4. Administration of Plan.
(a) General. The Plan shall be administered by the Board of Directors
or, if appointed, by a Committee, a majority of which shall be "disinterested"
as defined in Rule 16b-3 under the Securities Exchange Act of 1934. The Board
and the Committee shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan and to adopt such
rules and regulations for administering the Plan as it may deem necessary in
order to comply with the requirements of the Plan, or in order that any Option
that is intended to be an Incentive Option will be classified as an incentive
stock option under the Code, or in order to conform to any regulation or to any
change in any law or regulation applicable thereto. The Board of Directors may
reserve to itself any of the authority granted to the Committee as set forth
herein, and it may perform and discharge all of the functions and
responsibilities of the Committee at any time that a duly constituted Committee
is not appointed and serving.
(b) Actions of the Board and Committee. All actions taken and all
interpretations and determinations made by the Board or by the Committee in good
faith (including determinations of Fair Market Value) shall be final and binding
on all Employees, Directors, Consultants and Optionees, the Corporation and all
other interested persons. No member of the Committee shall be personally liable
for any action or determination made in good faith in connection with this Plan,
and all members of the Board or the Committee shall, in addition to their rights
as directors, be fully protected by the Corporation with respect to any such
action, determination or interpretation.
(c) Interested Directors. Members of the Board who are either
eligible for Options or have been granted Options may vote on any matters
affecting the administration of the Plan or the grant of any Options pursuant to
the Plan, except that no such member shall act upon the granting of an Option to
himself or herself, but any such member may be counted in determining the
existence of a quorum at any meeting of the Board or Committee during which
action is taken with respect to the granting of Options to said Board or
Committee member.
(d) Powers of the Board. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion: (i) to grant Incentive Stock
Options to Employees or Nonstatutory Stock Options to Employees, Directors, or
Consultants; (ii) to sell or grant Stock to Employees, Directors or Consultants;
(iii) to determine, upon review of the relevant information, the Fair Market
Value of the Stock; (iv) to determine the exercise price per share of Options to
be granted, which exercise price shall be determined in accordance with Section
6 of the Plan; (v) to determine the Employees, Directors and Consultants to
whom, and the time or times at which, Options shall be granted and the number of
shares to be represented by each Option; (vi) to interpret the Plan; (vii) to
prescribe, amend, and rescind rules and regulations relating to the Plan; (viii)
to determine the terms and provisions of each Stock Option Agreement and each
Stock Restriction Agreement granted (which need not be the same for each Option
granted, or sale or grant of Stock) and, with the consent of the holder thereof,
modify, terminate or amend such Agreement; (ix) to accelerate or defer (with the
consent of the Optionee) the exercise date of any Option; (x) to authorize any
person to execute on behalf of the Corporation any instrument required to
effectuate the grant of an Option or the sale or grant of any Stock; and (xi) to
make all other determinations deemed necessary or advisable for the
administration of the Plan.
5. Eligibility.
(a) Generally. Options may be granted and Stock may be sold or
granted to Employees, Directors and Consultants, provided that Incentive Stock
Options may only be granted to Employees. Any Employee, Director or Consultant
who has been granted an Option, or purchased or been granted any Stock may, if
he is otherwise eligible, be granted additional Options, or be granted or
purchase additional shares of Stock.
(b) Criteria. In making any determination as to Employees, Directors
and Consultants to whom Options shall be granted or Stock shall be sold or
granted, the Committee shall take into account such factors as it shall deem
relevant in accomplishing the purpose of the Plan, including but not limited to
the Employee's, Director's or Consultant's loyalty, performance, and experience.
(c) ISO Limitations with Respect to Price. In no event shall an
Incentive Stock Option be granted to any person who, at the time such Option is
granted, owns (as defined in Section 422 of the Code) shares possessing more
than 10% of the total combined voting power of all classes of shares of the
Corporation or of its parent or subsidiary corporation, unless the option price
is at least 110% of the Fair Market Value of the stock subject to the Option,
and such Option is by its terms not exercisable after the expiration of five (5)
years from the date such Option is granted.
(d) ISO Limitations with Respect to Shares. Moreover, the aggregate
Fair Market Value (determined as of the time that option is granted) of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by any individual Employee, Director or Consultant during any single
Calendar Year under this Plan and all the incentive stock option plans of the
Corporation (and its parent and subsidiary corporations, if any), shall not
exceed $100,000.
(e) No Employee, Director or Consultant Contract. The Plan shall not
confer upon any Optionee any right with respect to continuation of employment by
or the rendition of consulting services to the Corporation, nor shall it
interfere in any way with his right or the Corporation's right to terminate his
employment or services at any time.
6. Price.
(a) Generally. The per share exercise price for any Option and the
price for any Stock to be sold shall be such price as is determined by the
Board. However, the exercise price of the Shares which shall be covered by each
Incentive Stock Option shall be at least 100% of the Fair Market Value of the
Shares at the time of granting the Incentive Stock Option. The exercise price of
a Nonstatutory Stock Option shall not be less than 85% of the Fair Market Value
on the date of the grant of the Option. If an Incentive Stock Option is granted
to an Optionee who then owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation or its Parent
or any Subsidiary, the exercise price shall be as set forth in Section 5(c)
above.
(b) Payment. The purchase price for any sale of Stock shall be paid
at the time of purchase and the exercise price shall be paid in full at the time
of exercise of the Option in cash or in such other form of lawful consideration
as the Board of Directors or the Committee may approve from time to time,
including, without limitation, the transfer of outstanding shares of Stock as
provided in Section 7(d), or the Employee's, Director's or Consultant's
promissory note in form satisfactory to the Corporation and bearing interest at
not less than the applicable federal rate.
7. Options.
(a) Generally. Subject to the provisions of the Plan, the Board shall
determine for each Option (which need not be identical) the number of shares for
which the Option shall be granted, the Option price of the Option, and all other
terms and conditions of the Option.
(b) Time of Granting Options. Neither anything contained in the Plan
or in any resolution adopted or to be adopted by the Board of Directors or the
stockholders of the Corporation nor any action taken by the Committee shall
constitute the granting of any Option. The granting of an Option shall take
place only when a written Stock Option Agreement shall have been duly executed
and delivered by or on behalf of the Corporation and the person to whom such
Option shall be granted.
(c) Term of Option. The term of each Option may be up to seven (7)
years from the date of grant thereof or such shorter term as may be provided in
the Stock Option Agreement. However, in the case of an Incentive Stock Option
granted to an Employee, Director or Consultant who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Corporation or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant thereof or such shorter time as may be provided in the Stock
Option Agreement.
(d) Exercise of Option.
(i) Any Option granted hereunder shall be exercisable at such
times and under such conditions as determined by the Board, including
performance criteria with respect to the Corporation or the Optionee, or both,
and as shall be permissible under the terms of the Plan.
(ii) An Option may not be exercised for a fraction of a Share.
(iii) An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Corporation in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Corporation. The Board, in its sole discretion, may permit an
Optionee to surrender to the Corporation shares of Stock previously acquired by
the Optionee at least six (6) months prior to such surrender as part or full
payment for the exercise of an Option. Such surrendered shares shall be valued
at their Fair Market Value on the date of exercise of the Option. Until the
issuance of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option.
(iv) Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.
(v) Except as otherwise specifically provided herein, an Option
may not be exercised at any time unless the holder thereof shall have maintained
Continuous Status as a Management Member, Employee, Director or Consultant of
the Corporation or of one or more of its subsidiaries, or a parent corporation,
from the date of the granting of the Option to the date of its exercise.
(e) Termination of Employment. In the event that the employment of an
Employee, Director or Consultant or the engagement of a Director or Consultant
to whom an Option shall have been granted shall be terminated other than by
reason of death or disability, such Option may be exercised (to the extent that
the Employee, Director or Consultant shall have been entitled to do so at the
termination of his employment or engagement) at any time within three months
after such termination, but in any event no later than the date of expiration of
the Option term. Notwithstanding this three-month period, if the holder of an
Option (i) is terminated for "cause" (as hereinafter defined) or (ii) is
terminated due to his expropriation of Corporation property (including trade
secrets or other proprietary rights), the Board shall have the authority, by
notice to the holder of an Option, to immediately terminate such Option,
effective on the date of termination of employment, and such Option shall no
longer be exercisable to any extent whatsoever. As used herein, "cause" shall
mean that the holder of an Option has willfully and intentionally engaged in
material misconduct, gross neglect of duties or grossly negligent failure to act
which materially and adversely affects the business or affairs of the
Corporation, or has committed any act of fraud or any act not approved by the
Board involving any material conflict of interest or self-dealing adverse to the
Corporation, or has been convicted of a felony or any offense involving moral
turpitude, or has unreasonably failed to comply with any reasonable direction
from the Board or its Chairman with respect to a major policy decision affecting
the Corporation, issued pursuant to its authority under the Bylaws of the
Corporation, which direction is approved by a majority of the Board. So long as
the holder of an Option shall maintain Continuous Status as an Employee,
Management Member, Director or Consultant of the Corporation or one or more of
its subsidiaries, his Option shall not be affected by any change of duties or
position. To the extent that the holder of an Option was not entitled to
exercise his Option at the time of his termination, or insofar as he does not
exercise such Option to the extent he was entitled within the time specified
herein, the Option shall itself terminate at the time of such termination.
(f) Disability of Optionee. Notwithstanding the provisions of Section
7(e) above, in the event an Optionee is unable to continue his employment with
or to perform services for the benefit of the Corporation as a result of his
total and permanent disability (as defined in Section 22(e)(3) of the Code), he
may, but only within one (1) year after termination due to such disability,
exercise his Option to the extent he was entitled to exercise it at the date of
such disability. To the extent that he was not entitled to exercise the Option
at the date of disability, or insofar as he does not exercise such Option to the
extent he was entitled within the time specified herein, the Option shall
terminate.
(g) Death of Optionee. Unless otherwise set forth in the Option
Agreement, in the event of the death of an Optionee:
(i) if Optionee dies during the term of the Option and is at the
time of his death an Employee, Director or Consultant of the Corporation who
shall have been in Continuous Status as an Employee, Director or Consultant
since the date of grant of the Option, the Option may be exercised, at any time
within one (1) year following the date of death, by the Optionee's estate or by
a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had accrued at
the date of death; or
(ii) if Optionee dies within three (3) months after the
termination of Continuous Status as an Employee, Director or Consultant, the
Option may be exercised, at any time within one (1) year following the date of
death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of such termination.
8. Non-Transferability of Options. The Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
9. Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Corporation, the number of shares of Stock
covered by each outstanding Option and the number of shares of Stock which have
been authorized for issuance under the Plan but as to which no Stock has been
sold or granted, or no Options have yet been granted or which have been returned
to the Plan upon cancellation or expiration of an Option upon termination of
employment, as well as the price per share of Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from a stock split,
the payment of a stock dividend with respect to the Stock, or any other increase
or decrease in the number of issued shares of Stock effected without receipt of
consideration by the Corporation; provided, however, that conversion of any
convertible securities of the Corporation shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding, and
conclusive. Except as expressly provided herein, no issuance by the Corporation
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to an Option.
10. Liquidation or Merger of the Corporation.
(a) Liquidation. In the event of a proposed dissolution or
liquidation of the Corporation, the Option shall terminate immediately prior to
the consummation of such proposed action, unless otherwise provided by the
Board. The Board may, in the exercise of its sole discretion in such instances,
declare that any Option shall terminate as of a date fixed by the Board and give
each Optionee the right to exercise his Option as to all or any part of the
Shares covered by an Option, including Shares as to which the Option would not
otherwise be exercisable.
(b) Sale of Assets, Merger, Consolidation or Other Change of Control.
In the event of a proposed sale of all or substantially all of the assets of the
Corporation, or the merger or consolidation of the Corporation with or into
another corporation in a transaction in which the Corporation does not survive
or any other transaction in which there is a change of more than fifty percent
(50%) in the voting control of the Corporation, all Options held by any
Consultant, Employee or Director shall vest and may be fully exercised without
regard to the normal vesting schedules of the Options in the event such
individual's employment or other status with the Corporation is involuntarily
terminated without cause (as defined in Section 7(e) of the Plan) in connection
with the transaction or within one year after closing of the transaction. Any
such fully vested Option shall be exercisable in accordance with the terms of
Section 7(e) of the Plan.
11. Withholding Taxes; Satisfied by Withholding
Optioned Shares.
(a) General. The Corporation, its Parent or any Subsidiary may take
such steps as it may deem necessary or appropriate for the withholding of any
taxes which the Corporation, its Parent or any Subsidiary is required by law or
regulation of any governmental authority, whether Federal, state or local,
domestic or foreign, to withhold in connection with any option including, but
not limited to, requiring the Optionee to pay such tax at the time of exercise
or the withholding of issuance of shares of Stock to be issued upon the exercise
of any Option until the Optionee reimburses the Corporation for the amount the
Corporation is required to withhold with respect to such taxes, or, at the
Corporation's sole discretion, satisfy such taxes by withholding optioned shares
pursuant to Section 11(b) below.
(b) Satisfying Taxes by Withholding Optioned Shares. All Federal and
state taxes required to be withheld or collected from an Optionee upon exercise
of an Option may be satisfied by the withholding of a sufficient number of
exercised Option Shares which, valued at Fair Market Value on the date of
exercise, would be equal to the total withholding obligation of the Optionee for
the exercise of such Option; provided, however, that if the Corporation is a
public reporting corporation, no person who is an "officer" of the Corporation
as such term is defined in Rule 3B-2 under the Securities Exchange Act of 1934
may elect to satisfy the withholding of Federal and state taxes upon the
exercise of an Option by the withholding of Optioned Shares unless such election
is made either (i) at least six months prior to the date that the exercise of
the Option becomes a taxable event or (ii) during any of the periods beginning
on the third business day following the date on which the Corporation issues a
news release containing the operating results of a fiscal quarter or fiscal year
and ending on the twelfth business day following such date. Such election shall
be deemed made upon receipt of notice thereof by an officer of the Corporation,
by mail, personal delivery or by facsimile message, and shall (unless notice to
the contrary is provided to the Corporation) be operative for all Option
exercises which occur during the twelve-month period following election.
12. Issuance of Shares.
(a) Shares shall not be issued pursuant to the exercise of an Option
unless the exercise of such Option and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Corporation with respect to such
compliance.
(b) As a condition to the grant of an Option or the sale or grant of
any Stock, the Corporation may impose various conditions, including a
requirement that the person exercising such Option or purchasing or receiving
such Stock represent and warrant, at the time of any such exercise, that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares and such other restrictions on such Shares
relating to employment or other matters as may be determined by the Committee.
(c) Any shares issued under the Plan, including shares issued upon
exercise of Options, shall be subject to a right of first refusal held by the
Corporation. Prior to any proposed transfer of the shares, the holder of the
shares shall deliver to the Corporation written notice of the proposed transfer,
designating the number of shares, the proposed transferee, and the price and
terms (if any) offered for the shares. For thirty days following the receipt of
such notice, the Corporation shall have the right (by written notice to the
holder) to purchase any or all of the shares designated in the written notice at
the price and terms set forth in the notice (if any) or for cash at the
then-current fair market value set by the Board of Directors. The Corporation
may assign all or any part of this right to any third party, who may then
purchase the shares directly from the holder. If the Corporation or any assignee
fails to exercise this right as to all of the shares set forth in the original
notice, the holder may, within thirty days thereafter, transfer the shares to
the proposed transferee in accordance with such notice. This restriction on
transfer shall terminate upon the closing of the Corporation's initial public
offering of its Common Stock.
13. Effectiveness of Plan. The Plan shall become effective on October 27,
1999, but only if the holders of the Corporation's Common and Preferred Stock
entitled to vote on the matter shall have approved the Plan within twelve months
after such date by an affirmative vote of at least a majority of all such shares
then outstanding (on a common equivalent basis).
14. Termination and Amendment of Plan. The Plan shall terminate on
December 31, 2009, and no Option shall be granted under the Plan after that
date. The Board of Directors may at any time and from time to time modify or
amend the Plan in such respects as it shall deem advisable, provided that
without approval by a majority in interest of all the shares of the Corporation
there shall be: (a) no increase in the total number of shares covered by the
Plan (except by operation of Section 9 hereof), (b) no change in the formula for
determining the exercise price or the maximum term of Options, (c) no change
that would materially lessen the requirements as to eligibility for
participation in the Plan, and (d) no change in the class of persons eligible to
receive options or rights under the Plan, including the definitions of
"Employee," "Director" and "Consultant."
<PAGE>
Attachment B
CORGENIX MEDICAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
I. Purpose
The Corgenix Medical Corporation Employee Stock Purchase Plan (the "Plan")
is intended to provide eligible employees of Corgenix (the "Company") with
an opportunity to acquire a proprietary interest in the Company through
their participation in a plan designed to qualify as an employee stock
purchase plan under Section 423 of the Internal Revenue Code of 1986 (the
"Code").
II. Administration
(a) Plan Administrator. The Plan shall be administered by the board of
directors of theCompany (the "Board"), which may from time to time delegate
all or part of its authority to a committee (the "Committee") composed of
at least two members of the Board, all of whom shall be Non-Employee
Directors. A Non-Employee Director is a director who meets the definition
of Non-Employee Director under Rule 16b-3 of the Securities Exchange Act of
1934 (the "1934 Act"). References herein to the Plan Administrator refer to
the Board or, to the extent the Board delegates its authority to the
Committee, to the Committee. The Plan Administrator shall have full
authority to administer the Plan, and to adopt such rules and regulations
for administering the Plan as it may deem necessary in order to comply with
the requirements of Section 423 of the Code. The Plan Administrator may
delegate to an agent or agents any of its responsibilities under the Plan
except its responsibilities to establish the number of shares available for
purchase by employees during any purchase period, the maximum and minimum
percentage of base compensation to be paid by any single employee for the
purchase of stock during any of the periods and its authority to construe
and interpret the provisions of the Plan.
(b) Actions of Plan Administrator. All actions taken and all
interpretations and determinations made by the Plan Administrator in good
faith (including determinations of fair market value) shall be final and
binding upon all Participants, the Company and all other interested
persons. No member of the Plan Administrator shall be personally liable for
any action,determination or interpretation made in good faith with respect
to the Plan, and all members of the Plan Administrator shall, in addition
to their rights as Directors, be fully protected by the Company with
respect to any such action, determination or interpretation.
III. Purchase Periods
The first purchase period under the Plan shall commence on February 1,
1999, and shall terminate on March 31, 1999. Unless otherwise determined
by the Plan Administrator, a purchase period shall commence on the first
day of each succeeding calendar quarter and shall terminate on the last
day of each such quarter. The Plan Administrator may, from time to time,
establish purchase periods with differing commencement dates and
durations. In no event, however, shall a purchase period extend beyond 27
months. No two purchase periods shall run concurrently.
IV. Eligibility and Participation
(a) Every employee of the Company who, on the commencement date of the
purchase period, is employed on a basis which customarily requires not less
than 20 hours of service per calendar week is eligible to participate in
the Plan during a purchase period.
(b) An eligible employee may become a Participant in the Plan for a
particular purchase period by completing the enrollment forms (the
"Enrollment Forms") prescribed by the Plan Administrator and filing such
forms prior to the commencement date of the purchase period with the person
designated by the Plan Administrator. No Enrollment Forms will be accepted
from an individual who is not on the active payroll of the Company on the
filing date, unless such individual is temporarily off the payroll by
reason of illness, vacation, jury duty or other employer-approved absence.
V. Stock Subject to Plan
(a) Common Stock. The stock which is purchasable ------------ by
Participants shall be the Company's authorized but unissued or reacquired
Common Stock, par value $.00l per share (the "Common Stock"). In order to
have shares available for sale under the Plan, the Company may repurchase
shares of Common Stock on the open market, or issue authorized but unissued
stock. The maximum number of shares which may be sold to employees during
any single purchase period shall be established by the Plan Administrator
prior to the beginning of the purchase period; provided however, that the
total number of shares which may be sold to employees throughout the entire
duration of the Plan shall not exceed 500,000 shares subject to adjustment
under subparagraph (b) below). (b) Changes in Capital Structure. In the
event ------------------------------- any change is made to the Common
Stock purchasable under the Plan (whether by reason of merger,
consolidation, reorganization, recapitalization, stock dividend in excess
of 10% at any single time, stock split, combination of shares, exchange of
shares, changes in corporate structure or otherwise), then appropriate
adjustments shall be made to the maximum number of shares purchasable under
the Plan, the maximum number of shares purchasable under any right to
purchase stock outstanding under the Plan, and the number of shares and
price per share of stock subject to rights to purchase stock outstanding
under the Plan.
VI. Purchase of Common Stock
(a) Right to Purchase. An eligible employee who becomes a Participant for a
particular purchase period shall have the right, as of the beginning of the
purchase period, to purchase Common Stock upon the terms and conditions set
forth below.
(b) Price Per Share. Except as provided in Section VI (i), the purchase
price per share shall be 85 percent of the fair market value of a share of
Common Stock on the commencement date of the purchase period. If the Common
Stock is not traded publicly, the fair market value of a share of Common
Stock on any date shall be determined, in good faith, by the Board or the
Committee after consultation with outside legal, accounting or other
experts as the Board or Committee may deem advisable, and the Board or
Committee shall maintain a written record of its method of determining such
value. The fair market value of a share of Common Stock on any date shall
be the closing sales price, as quoted by the National Association of
Securities Dealers through NASDAQ National Market System, for the date in
question, or, if the Common Stock is listed on a national stock exchange,
the officially-quoted closing sales price on such exchange on the date in
question.
(c) Total Purchase Price. Each Participant shall, for any purchase period,
have the right to purchase Common Stock with a total purchase price equal
to a designated percentage of the Participant's Compensation. A
"Participant's Compensation" for a particular purchase period shall be the
amount of the Participant's base salary or wages, and overtime pay but
excluding bonuses and other incentive payments, that is payable to the
Participant at any time or from time to time during the purchase period.
Each Participant shall designate in his or her purchase agreement the whole
percentage of his or her Compensation the Participant wishes to pay for the
purchase of stock for the particular purchase period, subject to the
provisions set forth below which shall be uniformly applied to all
Participants in a particular purchase period:
(i) The maximum percentage of a Participant's Compensation which may
be paid for the purchase of stock in a particular purchase period shall be
ten percent (10%); provided, however, that the Plan Administrator shall
establish prior to the beginning of the purchase period a maximum number of
shares (subject to adjustment under Section V(b)) that may be purchased
during the purchase period by each Participant.
(ii) The minimum percentageof a Participant's Compensation which
may be paid for the purchase of stock in a particular purchase period shall
be one percent(1%).
(iii) No right to purchase shares under the Plan shall be
granted to an employee if such employee would, immediately after the grant,
own stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company as defined in Section
424(f) of the Code. An employee's stock ownership shall be determined under
Section 424(d) of the Code and stock which an employee may purchase under
any outstanding options shall be treated as stock owned by the employee.
Notwithstanding the provisions of paragraphs (i) and (ii), above, the Plan
Administrator may, in its discretion, establish any other maximum and
minimum percentages of Compensation to be paid for stock under the Plan.
(d) Allocation of Available Shares. Should the total number of shares of
Common Stock which may be purchased under the purchase agreements of all
Participants for a particular purchase period exceed the number of shares
available for sale under the Plan, then the Plan Administrator shall make a
pro rata allocation of the available shares and shall notify each
Participant of such allocation.
(e) Payment. Payment of the purchase price for stock under the Plan shall
be effected by means of payroll deductions, which shall begin with the
first pay period which occurs coincident with or immediately following the
commencement date of the relevant purchase period and shall terminate with
the last pay period which occurs on or prior to the last day of the
purchase period. Each payroll deduction shall be an amount equal to the
percentage of the Compensation included in that payroll payment that was
designated by the Participant in the Participant's Enrollment Form.
(f) Termination of Right to Purchase. A Participant may, at any time prior
to the last day of the purchase period, terminate his or her right to
purchase stock under the Plan by notifying the Plan Administrator or its
delegate in writing. Any amounts deducted from the Participant's pay or
otherwise collected from the Participant by reason of his or her
participation in the Plan for such purchase period shall be refunded, and
no further amounts will be collected from the Participant (by payroll
deduction or otherwise) during the remainder of the purchase period. A
Participant's termination of his or her right to purchase shall be
irrevocable with respect to the purchase period to which it pertains.
(g) Termination of Employment. If a Participant ceases to be an employee of
the Company for any reason (including death or retirement) during a
purchase period, the Participant or the Participant's personal
representative may either
(i) receive a stock certificate for the number of shares of Common
Stock paid for pursuant to payroll deductions made on behalf of
the Participant during the purchase period up to the day prior
to the date of the Participant's cessation of employment; or
(ii) receive a cash refund of all sums previously collected
from the Participant during the purchase period.
Any election provided by this Section VI(g) shall be exercisable only
during the 30-day period following the date of the Participant's
cessation of employment (but in no event later than the last date of
the purchase period), and the underlying right to purchase stock
under the Plan shall terminate upon the exercise of such election. If
a Participant or the Participant's personal representative fails to
make a timely election under this Section VI(g), the Company shall
treat such failure as an election to exercise alternative (ii).
(h) Exercise. Each right to purchase stock under the Plan other than a
right to purchase stock which has been accelerated under the Plan or which
has been previously terminated under the Plan shall be exercised
automatically on the last day of the purchase period. Promptly after the
date of exercise of any right to purchase stock under the Plan, the
Participant, or his or her nominee, shall be issued a stock certificate for
the whole number of shares for which the Participant's right to purchase
has been exercised. Not more than one certificate shall be issued pursuant
to the exercise of any right to purchase stock under the Plan. Any excess
of the amount previously collected during the purchase period over the
purchase price of the issued shares shall be promptly refunded or left on
deposit for the ensuing quarterly period.
(i) Reduction of Purchase Price. If the fair market value of a share of
Common Stock on the last day of the purchase period is less than the fair
market value of such share on the commencement date of the purchase period,
then the purchase price per share under the Plan on the last day of the
purchase period shall be reduced to 85 percent (85%) of the fair market
value of such share on the last day of the purchase period. Each right to
purchase stock under the Plan not previously exercised or terminated shall
be automatically exercised on the last day of the purchase period for the
number of whole shares obtained by dividing the sum on deposit from the
Participant (and not refunded) by the purchase price per share determined
under this Section VI(i), but in no event shall any right to purchase stock
under the Plan be exercised for more than the specified number of shares,
if any, (subject to adjustment under Section V(b)) established by the Plan
Administrator pursuant to Section VI(c)(i) prior to the beginning of the
purchase period, and the balance shall be at the sole option of the Company
promptly refunded or left on deposit for the ensuing quarterly period. For
example, if a Participant has $1,000.00 on account and the Company's stock
price pursuant to this paragraph is determined to be $0.68, then one
thousand four hundred seventy (1,470) shares will be issued ($1,000.00
divided by $0.68) and $0.40 will be left on deposit or refunded as herein
stated.
(j) Rights as Stockholder. A Participant shall have no rights as a
stockholder with respect to shares subject to a right to purchase stock
granted under the Plan until such right to purchase is exercised. No
adjustments shall be made for dividends, distributions or other rights for
which the record date is prior to the date of exercise.
(k) Assignability. No right to purchase stock granted under the Plan shall
be assignable or transferable by a Participant other than by will or by the
laws of the descent and distribution, and during the lifetime of the
Participant such rights to purchase stock shall be exercisable only by the
Participant.
(l) Accrual Limitations. No Participant shall be entitled to accrue rights
to purchase stock under this Plan which, when aggregated with purchase
rights accruable by him under other qualified employee stock purchase plans
(within the meaning of Section 423 of the Code) of the Company (as defined
in Section 424(f) of the Code), would permit such Participant to purchase
more than $25,000 worth of Common Stock (determined on the basis of the
fair market value of such Common Stock on the date the Participant accrues
purchase rights under the Plan) for each calendar year such purchase rights
are at any time outstanding.
(m) Merger or Liquidation of Company. In the event the Company or its
shareholders enter into an agreement to dispose of all or
substantially all of the assets or outstanding capital stock of the
Company by means of sale, merger, reorganization or liquidation, each
participant may either
(i) receive a stock certificate for the number of shares of Common
Stock paid for pursuant to payroll deductions made on behalf of
the Participant during the purchase period up to the day prior
to the date of such transaction; or
(ii) receive a cash refund of all sums previously collected
from the Participant during the purchase period.
(n) No Interest. No interest shall be paid on any monies refunded to
Participants pursuant to the provisions of this Plan.
(o) Withholding. The Company may withhold any taxes required by any
law or regulation of any governmental authority, whether federal, state or
local, in connection with the purchase of stock under the Plan or the sale
of such stock that is not held for at least two years after the beginning
of the purchase period during which the stock was purchased. Such
withholding may include all or any portion of any payment or other
compensation payable to the Participant, unless the Participant reimburses
the Company for such amount.
VII. Amendment
The Board may from time to time alter, amend, suspend or discontinue the
Plan; provided, however, that no such action shall adversely affect rights
and obligations with respect to rights to purchase stock at the time
outstanding under the Plan; and provided, further, that no such action of
the Board may, without the approval of the stockholders of the Company,
increase the number of shares subject to the Plan or the maximum number of
shares for which a right to purchase stock under the Plan may be exercised
(unless necessary to effect the adjustments required by Section V(b)),
extend the term of the Plan, alter the per share purchase price formula so
as to reduce the purchase price per share specified in the Plan otherwise
materially increase the benefits accruing to Participants under the Plan
or materially modify the requirements for eligibility to participate in
the Plan. Furthermore, the Plan may not, without the approval of the
stockholders of the Company, be amended in any manner which will cause the
Plan to fail to meet the requirements of an "employee stock purchase plan"
under Section 423 of the Code.
VIII. Effective Date
This Plan was adopted by the Board to become effective on February 1,
1999, and was approved by the Company's Stockholders on _________.
Corgenix Medical Corporation
By: /s/ Douglass T. Simpson
Douglass T. Simpson
President/Chief Operating Officer
