<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
NORTH AMERICAN BIOLOGICALS, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
<PAGE> 2
[LOGO]
NABI
The Quality Source
NORTH AMERICAN BIOLOGICALS, INC.
1111 PARK CENTRE BOULEVARD
MIAMI, FLORIDA 33169
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 1995
------------------------
The Annual Meeting of Stockholders of North American Biologicals, Inc. will
be held on Friday, May 26, 1995 at 10:00 o'clock in the forenoon, Boca Raton
Time, in the Martinique Room, Embassy Suites Hotel, 661 N.W. 53rd Street, Boca
Raton, Florida, for the following purposes:
1. To elect a Board of Directors to serve for the ensuing year and until
their successors are duly elected and qualified.
2. To consider and act upon a proposal to adopt the Stock Plan for
Non-Employee Directors.
3. To consider and act upon a proposal to increase the shares of Common
Stock available under the 1990 Equity Incentive Plan.
4. To consider and act upon such other business and matters or proposals as
may properly come before said Annual Meeting or any adjournment or
adjournments thereof.
The Board of Directors has fixed the close of business on March 31, 1995 as
the record date for determining the stockholders having the right to receive
notice of and to vote at said Annual Meeting.
By Order of the Board of Directors
Constantine Alexander
Secretary
Miami, Florida
April 26, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN, DATE
AND MAIL PROMPTLY THE ENCLOSED PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS. A RETURN ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES IS ENCLOSED FOR THAT PURPOSE.
<PAGE> 3
[LOGO]
NABI
The Quality Source
NORTH AMERICAN BIOLOGICALS, INC.
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 26, 1995
This Proxy Statement is furnished in connection with the solicitation by
and on behalf of the Board of Directors of North American Biologicals, Inc. (the
"Company") of Proxies for use at the Annual Meeting of Stockholders of the
Company to be held, pursuant to the accompanying Notice of Annual Meeting, on
Friday, May 26, 1995 at 10:00 a.m., and at any adjournment or adjournments
thereof (the "Annual Meeting"). Action will be taken at the Annual Meeting to
elect a Board of Directors to serve for the ensuing year, to adopt a Stock Plan
for Non-Employee Directors and to amend the Company's 1990 Equity Incentive
Plan.
If a stockholder specifies in the Proxy accompanying this Proxy Statement
(the "Proxy") how it is to be voted, it will be voted in accordance with such
specification, but any Proxy which is signed and returned and which does not
specify how it is to be voted will be voted "for" the election of the nominees
for director named herein and the adoption of the Stock Plan for Non-Employee
Directors and the amendment to the 1990 Equity Incentive Plan, each described
herein. Any stockholder giving a Proxy in the accompanying form retains the
power to revoke it at any time before it is exercised by delivering a written
revocation to the Secretary of the Company, by executing and returning to the
Company a proxy bearing a later date or by attending the Annual Meeting and
voting his or her shares in person. Any stockholder who attends the Annual
Meeting in person will not be deemed thereby to revoke the stockholder's Proxy
unless such stockholder affirmatively indicates thereat his or her intention to
vote the shares in person.
The Company's principal executive offices are located at 1111 Park Centre
Boulevard, Miami, Florida 33169. The Company mailed this Proxy Statement and the
Proxy on or about April 26, 1995 to its stockholders of record at the close of
business on March 31, 1995.
ANNUAL REPORT AND INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1994, including financial statements and the report of Price
Waterhouse LLP thereon, is being mailed herewith to each of the Company's
stockholders of record at the close of business on March 31, 1995.
Representatives of Price Waterhouse LLP are expected to be present at the Annual
Meeting and will have the opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions.
It has been the practice of the Company's Board of Directors at its first
meeting following the annual meeting of stockholders to approve independent
certified public accountants for the ensuing year.
VOTING SECURITIES
The holders of record of shares of Common Stock of the Company at the close
of business on March 31, 1995 may vote at the Annual Meeting. On that date,
there were outstanding and entitled to vote 19,435,679 shares of Common Stock.
Each stockholder has one vote at the Annual Meeting for each share of Common
<PAGE> 4
Stock held of record on said date. As long as a quorum (a majority of issued and
outstanding shares of Common Stock entitled to vote at the Annual Meeting) is
present at the Annual Meeting, the Directors shall be elected by a plurality of
the votes cast at the Annual Meeting by the holders of shares entitled to vote
thereat, and approval of each of the other matters presently contemplated to be
considered at the Annual Meeting will require the affirmative vote of the
holders of shares of Common Stock representing a majority of the votes cast on
the matter. Votes may be cast in favor of the election of the nominees for
director or withheld; votes that are withheld will have no effect on the outcome
of the election of directors. Abstentions and broker non-votes will have the
effect of a vote against the other matters presently contemplated to be
considered at the Annual Meeting.
ITEM I
ELECTION OF DIRECTORS
The Company's By-laws provide that the Board of Directors shall consist of
not less than three nor more than 15 directors, the exact number to be fixed by
the Board of Directors. The Board of Directors has fixed the number of directors
for the ensuing year at five. In the event that any of the nominees becomes
unavailable (which is not now anticipated by the Company), the persons named as
Proxies have discretionary authority to vote for a substitute. The Board of
Directors has no reason to believe that any of the nominees will be unwilling or
unable to serve if elected. The By-laws provide that, within the limits above
specified, the number of directors may at any time be increased or decreased by
the vote of the Board, however, no decrease in the number of directors will
affect the term of any director in office. It is possible that, under
circumstances deemed by the Board of Directors to be appropriate, such action
may be taken at any time during the ensuing year.
Each of the following directors has been nominated for reelection at the
Annual Meeting.
DAVID J. GURY, age 56, has served as the Company's Chairman of the Board,
President and Chief Executive Officer since April 3, 1992. Previously, since May
21, 1984, he was the Company's President and Chief Operating Officer. He has
been a director of the Company since 1984. From July 1977 until his employment
by the Company, Mr. Gury was employed by Alpha Therapeutic Corporation (formerly
Abbott Scientific Products) as Director of Plasma Procurement (through October
1980), General Manager, Plasma Operations (through October 1981) and Vice
President, Plasma Supply (through May 1984). In these capacities, Mr. Gury had
executive responsibilities for plasma procurement and operation of
plasmapheresis centers.
PAUL BOGIKES, age 83, has been a director of the Company since 1987. He has
been active since 1977 in the operations of Medical Implements Company, a
company owned by him that supplies blood related reagents, components and
fractions. For more than 40 years, Mr. Bogikes has been involved in businesses
relating to human and animal blood, including establishing plasma collection
operations.
DAVID L. CASTALDI, age 55, has been a Director of the Company since July
1994. Mr. Castaldi is currently a consultant for Genzyme Corporation. He was one
of the founders of BioSurface Technology, Inc. ("BioSurface"), and served as its
President and Chief Executive Officer and as a Director from March 1987 until
December 1994, when Genzyme Corporation acquired BioSurface. From 1971 to 1987,
Mr. Castaldi worked for Baxter International, Inc. where he served, from 1977 to
1987, as President of the Hyland Therapeutics Division, a worldwide manufacturer
and marketer of therapeutic biological pharmaceuticals.
RICHARD A. HARVEY, JR., age 45, has been a director of the Company since
1992. He has been President of BNY Associates Incorporated ("BNY"), a Boston
investment banking firm, since November 1991. Previously, from April 1988 to
November 1991 he was a Managing Director of BNY and from April 1980 to April
1988 he was a Senior Vice President of Shearson Lehman Brothers.
DAVID A. THOMPSON, age 53, has been a director of the Company since 1990.
Since July 1994, he has been Senior Vice President, Strategic Improvement
Processes of Abbott Laboratories ("Abbott"). Previously, since August 1983, he
served as Senior Vice President of Abbott Laboratories and as President of its
Diagnostics Division. Prior to that time he served in various capacities at
Abbott Laboratories and its Ross
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<PAGE> 5
Laboratories Division, including Vice President of Personnel, Vice President of
the Materials Management Division, Vice President of Operations and Director of
Manufacturing and Engineering.
CERTAIN INFORMATION REGARDING DIRECTORS
The Board of Directors of the Company, which held five meetings in 1994,
has formed the following committees:
The Compensation Committee, consisting of Messrs. Thompson and Harvey,
whose function is to administer the Company's bonus and equity incentive plans;
to determine the compensation of the Company's Chief Executive Officer and other
executive officers; and to advise the Board of Directors on compensation matters
generally, to the extent the Board requests its advice. The Compensation
Committee met once in 1994.
The Audit Committee, consisting of Messrs. Bogikes and Harvey, whose
function is to make recommendations to the Board of Directors with regard to the
selection of the Company's independent auditors; to review the Company's
financial statements and the results of the independent audit, including the
adequacy of internal controls; and to oversee or conduct special investigations
or other functions on behalf of the Board of Directors. The Audit Committee met
twice in 1994.
Each director of the Company attended more than 75% of all meetings of the
Board and of each committee of which he was a member during 1994.
The Company pays directors other than Mr. Gury an annual fee of $7,000 plus
a fee of $300 for each meeting of the Board or any committee thereof attended by
the director, unless the director participated in any such meeting by conference
telephone, in which case the fee is $100. No director's fees are paid to
directors for attendance at committee meetings which are scheduled in connection
with meetings of the Board of Directors. Directors are also reimbursed for
out-of-pocket expenses incurred in connection with attendance at meetings of the
Board of Directors and its committees.
There are no family relationships among any of the directors or executive
officers of the Company.
ITEM II
PROPOSAL TO ADOPT THE STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
On February 17, 1995, the Company's Board of Directors adopted, subject to
stockholder approval, the Stock Plan for Non-Employee Directors (the "Directors'
Plan"). The purpose of the Directors' Plan is to advance the interests of the
Company by increasing the proprietary interest in the Company of non-employee
members of the Company's Board of Directors through options to acquire shares of
the Company's Common Stock and also by providing the opportunity to receive in
shares a portion of the cash compensation otherwise due them. A maximum of
150,000 shares may be delivered upon the exercise of options granted under the
Directors' Plan and elections to receive shares in lieu of cash compensation.
The Directors' Plan does not become effective until it is approved by the
Company's stockholders.
The following is a summary of the material provisions of the Directors'
Plan and is qualified in its entirety by reference to the complete text of the
Directors' Plan, which is attached to this Proxy Statement as Exhibit A.
The Directors' Plan is administered by the Compensation Committee of the
Company's Board of Directors which has the power to construe and interpret the
terms and provisions of the Directors' Plan. While grants of stock options under
the Directors' Plan are automatic and non-discretionary, all questions of
interpretation of the Directors' Plan are determined by the Compensation
Committee. Only directors of the Company who are not present or former employees
of the Company or any subsidiary of the Company (the "Non-Employee Directors")
are eligible to participate in the Directors' Plan. Messrs. Bogikes, Castaldi,
Harvey and Thompson currently qualify as Non-Employee Directors.
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<PAGE> 6
The Directors' Plan provides that upon its approval by the stockholders of
the Company, an option to purchase 5,000 shares of the Company's Common Stock
will be granted to each Non-Employee Director. On the date of each subsequent
annual meeting, each Non-Employee Director continuing in office will be granted
an option covering 2,000 shares and any newly elected Non-Employee Director will
be granted an option covering 5,000 shares. The option exercise price for each
option granted under the Directors' Plan will be the closing price of a share of
the Company's Common Stock as reported on the NASDAQ National Market ("NASDAQ")
on the date the option is granted. All options granted under the Directors' Plan
become fully exercisable six months after the date of grant (or earlier in the
event of the death or disability of the Non-Employee Director or a sale of the
Company). Upon departure from the Board of Directors by reason of death or
disability, all options held by a Non-Employee Director may be exercised by him
or her or by his or her executor or administrator, or by the person or persons
to whom the option is transferred by will or the applicable laws of descent and
distribution, only during the one-year period after such departure. If a Non-
Employee Director's service with the Company terminates for any other reason,
all options held by the Non-Employee Director that are not then exercisable will
terminate and options that are exercisable on the date of termination will
continue to be exercisable only for sixty (60) days. Upon a sale of the Company,
all options held by Non-Employee Directors will terminate. In all other events,
options granted under the Directors' Plan remain exercisable until the fifth
anniversary of the date of grant. No option may be transferred other than by
will or by the laws of descent and distribution.
Under the Directors' Plan, a Non-Employee Director may elect to be paid all
or a portion of his or her annual director's retainer (currently, $7,000) in
shares of Common Stock. Any such election is irrevocable and must be made six
months and one day prior to the date the annual retainer would be paid by the
Company. The number of shares to be delivered to a Non-Employee Director upon
such election is determined by dividing the amount of the annual retainer to be
received in shares of Common Stock by the closing price of a share of Common
Stock as reported on NASDAQ on the date the annual retainer is to be paid.
The Compensation Committee may terminate the Directors' Plan at any time,
but options previously granted and elections previously made will not be
affected by any such action. The Board of Directors may at any time or times
amend the Plan for any purpose which at the time may be permitted by law, except
that any amendment which requires stockholder approval under Rule 16b-3 under
the Securities Exchange Act of 1934 ("Rule 16b-3") will not become effective
until it is approved by the stockholders. Any proceeds received by the Company
from transactions under the Directors' Plan will be used for the general
purposes of the Company.
Options granted under the Directors' Plan will be nonstatutory stock
options which do not qualify under Section 422 of the Internal Revenue Code (the
"Code"). The grant of options will not result in taxable income to the director
or a tax deduction for the Company. The exercise of an option will result in
taxable ordinary income to the director and a corresponding deduction for the
Company, in each case equal to the excess, if any, of the fair market value of
the shares on the date the option is exercised over the option exercise price.
The director's basis in any shares acquired upon exercise of an option will be
increased by the amount of taxable ordinary income recognized by the director.
If this proposal is approved and if the stockholders reelect the current
Non-Employee Directors at the Annual Meeting, Messrs. Bogikes, Castaldi, Harvey
and Thompson each will be entitled to the automatic grant of an option to
purchase 5,000 shares of Common Stock at the closing price for a share of the
Company's Common Stock on the date of the Annual Meeting as reported on NASDAQ.
On April 18, 1995, the closing price for a share of the Company's Common Stock
as reported on NASDAQ was $8.50.
The Board of Directors believes that approval of the Directors' Plan will
allow the Company to attract and retain highly qualified outside directors and
strengthen the commonality of interest between directors and stockholders.
ACCORDINGLY, THE BOARD URGES THE STOCKHOLDERS TO VOTE "FOR" THE PROPOSED
DIRECTORS' PLAN.
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ITEM III
PROPOSAL TO AMEND THE 1990 EQUITY INCENTIVE PLAN
The 1990 Equity Incentive Plan (the "1990 Plan") was adopted by the
stockholders of the Company in July 1990 and, as amended in 1992, provides for
the award of up to 1,970,000 shares of Common Stock in the form of incentive
stock options ("ISOs"), non-qualified stock options, restricted stock, stock
appreciation rights, performance shares or stock units (each, an "Award"). To
date, the Company has only awarded ISOs, non-qualified stock options and
restricted stock under the 1990 Plan. The Company has not awarded, and presently
does not intend to award, stock appreciation rights, performance shares or stock
units under the 1990 Plan.
On February 17, 1995, the Board of Directors approved an amendment to the
1990 Plan, subject to stockholder approval, increasing the maximum number of
shares of Common Stock which may be issued under the Plan by 775,000 shares to a
total of 2,745,000 shares of Common Stock. Currently, no shares of Common Stock
remain available for Awards under the 1990 Plan and options to purchase 122,712
shares of Common Stock, which were granted on February 8, 1995 to five executive
officers, were granted contingent upon stockholder approval of an amendment to
the 1990 Plan or upon shares otherwise becoming available under the 1990 Plan.
The Board believes that the amendment increasing the shares available under the
1990 Plan is a necessary factor in allowing the Company to attract and retain
those highly competent individuals upon whose judgment, initiative and
leadership the Company's continuing success in large measure depends.
The following is a summary of the material provisions of the 1990 Plan and
is qualified in its entirety by reference to the complete text of the 1990 Plan,
which is attached to this Proxy Statement as Exhibit B as it is proposed to be
amended.
The 1990 Plan is administered by the Compensation Committee of the Board of
Directors, whose members are ineligible to participate in the 1990 Plan. The
Compensation Committee determines those employees and consultants (including
directors who are employees or consultants) who receive Awards and the size and
type of Awards. The Compensation Committee has authority to adopt, alter and
repeal rules and guidelines governing the 1990 Plan, interpret provisions of the
1990 Plan and decide all disputes arising in connection with the 1990 Plan.
OPTIONS. The Compensation Committee may award ISOs and non-qualified stock
options (collectively, the "Options") and determine the number of shares to be
covered by each Option, the Option price therefor, the term of the Option, when
an Option becomes exercisable, and other conditions and limitations applicable
to the exercise of the Option. As required by the Code, the Option price per
share of Common Stock purchasable under an ISO cannot be less than 100% of the
fair market value of the Common Stock on the date of grant. The 1990 Plan
provides that the Option price per share of Common Stock purchasable under a
non-qualified stock option will be determined by the Committee, and may be less
than, equal to or greater than the fair market value of the Common Stock on the
date of grant, but cannot be less than 50% of the fair market value on the date
of grant. Options may be exercisable for not more than 10 years after the date
the Option is granted. The Compensation Committee may at any time accelerate the
exercisability of all or any portion of any Option.
For federal income tax purposes, no taxable income results to the optionee
upon the grant of an ISO or upon the issuance of shares to him upon the exercise
of an ISO. Correspondingly, no deduction is allowed to the Company upon either
the grant or the exercise of an ISO. However, if the aggregate fair market value
(determined at the time the Option is granted) of the Common Stock covered by
ISOs which are exercisable for the first time by an individual in a calendar
year exceeds $100,000, the amount of the excess will not be treated as shares
acquired through exercise of an ISO.
If shares acquired upon the exercise of an ISO are not disposed of within
the two-year period following the date the ISO is granted and within the
one-year period following the date the shares are transferred to the optionee
pursuant to exercise of the ISO, the difference between the amount realized on
any disposition thereafter and the Option price will be treated as long-term
capital gain or loss to the optionee. If a disposition occurs before the
expiration of either of the requisite holding periods, then the lower of (i) any
excess of the
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fair market value of the shares at the time of exercise of the ISO over the
Option price or (ii) the actual gain realized on disposition, will be deemed to
be compensation to the optionee and will be taxed at ordinary income rates. In
such event the Company will be entitled to a corresponding deduction from its
income, provided the Company satisfies applicable reporting requirements with
respect to such income in a timely manner. Any such increase in the income of
the optionee or deduction from the income of the Company attributable to such
disposition is treated as an increase in income or a deduction from the income
in the taxable year in which the disposition occurs. Any excess of the amount
realized by the optionee on disposition over the fair market value of the shares
at the time of exercise will be treated as capital gain.
"Alternative minimum taxable income" in excess of a taxpayer's exemption
amount is subject to the alternative minimum tax, which is imposed at rates of
26% to 28% on individuals and is payable to the extent it exceeds the regular
income tax. The excess of the fair market value on the date of exercise over the
Option price of shares acquired on exercise of ISOs generally constitutes an
item of alternative minimum taxable income for the purpose of the alternative
minimum tax. The payment of any alternative minimum tax resulting therefrom will
not increase the optionee's basis in the shares acquired for regular income tax
purposes.
Under the Code, a person who is granted a non-qualified stock option will
not have taxable income at the date of grant; however, an optionee who
thereafter exercises such an option will be deemed to have received compensation
income in an amount equal to the excess, if any, of the fair market value of the
shares on the date of exercise over the Option price. The optionee's basis for
such shares will be increased by the amount which is deemed compensation income.
For the year in which a non-qualified stock option is exercised, the Company
will be entitled to a deduction in the same amount as the optionee is required
to include in his or her income, provided the Company satisfies applicable
reporting requirements with respect to such income in a timely manner. When the
optionee disposes of such shares, he or she will recognize capital gain or loss.
RESTRICTED STOCK. An Award of restricted stock ("Restricted Stock")
entitles the participant to acquire shares of Common Stock for a purchase price
equal to or greater than par value, subject to such conditions and restrictions,
including a right of the Company, during a specified period or periods, to
repurchase such shares at their original purchase price (or to require
forfeiture of such shares) upon the participant's termination of employment.
Subject to the provisions of the 1990 Plan, the Compensation Committee may award
shares of Restricted Stock and determine the cash purchase price or other
consideration therefor, the duration of the restricted period during which, and
the conditions under which, the shares may be forfeited to or repurchased by the
Company, and the other terms and conditions of such Awards. The Compensation
Committee may modify or waive the restrictions with respect to any Restricted
Stock. Shares of Restricted Stock may be issued for no cash consideration or
such minimum consideration as may be required by applicable law. A participant
has all the rights of a stockholder with respect to his or her Restricted Stock
including voting and dividend rights, subject to any applicable restrictions on
transfer and Company repurchase or forfeiture rights, and subject to any other
conditions contained in the Award.
A recipient of Restricted Stock generally will be subject to tax at
ordinary income rates on the fair market value of the Common Stock at the time
the Common Stock is no longer subject to forfeiture, less any amount paid for
such stock. However, a recipient who makes an election under Section 83(b) of
the Code within 30 days of the date of issuance of the Restricted Stock will
realize ordinary income on the date of issuance equal to the fair market value
of the shares of Restricted Stock at that time (measured as if the shares were
unrestricted and could be sold immediately), less any amount paid for such
stock. If the election is made, no taxable income will be recognized when the
shares subject to such election are no longer subject to forfeiture. If the
shares subject to such election are forfeited, the recipient will not be
entitled to any deduction, refund or loss for tax purposes with respect to
amounts previously included in income with respect to the shares. The holding
period to determine whether the recipient has long-term or short-term capital
gain or loss upon sale of the shares begins when the restriction period expires
(or upon earlier issuance of the shares, if the recipient elected immediate
recognition of income under Section 83(b) of the Code).
GENERAL. The Compensation Committee shall determine whether Awards are
settled in whole or in part in cash, Common Stock, other securities of the
Company, Awards or other property. The Compensation
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Committee may permit a participant to defer all or any portion of a payment
under the 1990 Plan, including the crediting of interest on deferred amounts
denominated in Common Stock. Such a deferral may have no effect for purposes of
determining the timing of taxation of payments. The Compensation Committee may
amend, modify or terminate any outstanding Award, including substituting
therefor another Award of the same or a different type, changing the date of
exercise or realization, and converting an ISO to a non-qualified stock option,
if the participant consents to such action or the Compensation Committee
determines that the action would not materially and adversely affect the
participant. Awards may not be made under the 1990 Plan after May 7, 2000, but
outstanding Awards may extend beyond such date.
The number of shares of Common Stock issuable pursuant to the 1990 Plan may
not be changed except by approval of the stockholders. However, in the event
that the Compensation Committee determines that any stock dividend,
extraordinary cash dividend, creation of a class of equity securities,
recapitalization, reorganization, merger, split-up, spin-off, combination,
exchange of shares, warrants or rights offering to purchase Common Stock at a
price substantially below fair market value, or other similar transaction
affects the Common Stock such that an adjustment is required in order to
preserve the benefits intended to be made available under the 1990 Plan, the
Compensation Committee may adjust equitably the number and kind of shares of
stock or securities in respect of which Awards may be made under the 1990 Plan,
the number and kind of shares subject to outstanding Awards, and the award,
exercise or conversion price with respect to any of the foregoing, and if
considered appropriate, the Compensation Committee may make provision for a cash
payment with respect to an outstanding Award. Common Stock subject to Awards
which expire or are terminated prior to exercise or Common Stock which has been
forfeited under the 1990 Plan will be available for future Awards under the
Plan. Any proceeds received by the Company from transactions under the 1990 Plan
will be used for the general purposes of the Company.
In order to preserve a participant's rights under an Award in the event of
a change in control of the Company, the Compensation Committee in its discretion
may, at the time an Award is made or at any time thereafter, take one or more of
the following actions with respect to any such change of control: (i) provide
for the acceleration of any time period relating to the exercise or realization
of the Award, (ii) provide for the purchase of the Award upon the participant's
request for an amount of cash or other property that could have been received
upon the exercise or realization of the Award had the Award been currently
exercisable or payable, (iii) adjust the terms of the Award in a manner
determined by the Compensation Committee, (iv) cause the Award to be assumed, or
new rights substituted therefor, by another entity, or (v) make such other
provision as the Compensation Committee may consider equitable and in the best
interests of the Company.
The 1990 Plan may be amended from time to time by the Board of Directors or
terminated in its entirety, provided that no amendment may be made without
stockholder approval if such approval is necessary to comply with any applicable
tax or regulatory requirement, including any requirement for stockholder
approval under Rule 16b-3.
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Future Awards under the 1990 Plan are subject to the discretion of the
Compensation Committee. Therefore, it is impossible to indicate the specific
Awards that will be granted to or benefits that will be received by any
individual participant or group of participants under the 1990 Plan. The
following table, however, provides certain information about Awards made during
the fiscal year ended December 31, 1994 through the grant of Options to the
named executive officers, all current executive officers as a group, all current
directors who are not executive officers as a group and all employees, including
all current officers who are not executive officers, as a group.
<TABLE>
<CAPTION>
1990 EQUITY INCENTIVE PLAN
--------------------------------------
NAME AND POSITION DOLLAR VALUE($)(1) NUMBER OF UNITS
---------------------------------------------- ------------------- ----------------
<S> <C> <C>
David J. Gury................................. 58,916 78,555
John C. Carlisle.............................. 35,123 46,830
Raj Kumar, D.Sc............................... 19,785 26,380
Alfred J. Fernandez........................... 18,094 24,125
Stephen W. Weston............................. 16,013 21,350
Executive Officer Group (7 Persons)........... 163,459 217,945
Non-Executive Officer Director Group (4
Persons).................................... -- --
Non-Executive Officer
Employee Group (121 Persons)................ 146,141 194,855
</TABLE>
- - ---------------
(1) Calculated using the difference between the exercise price per share under
the Options ($6.75) and the closing price of the Company's Common Stock as
reported on NASDAQ on December 31, 1994 ($7.50).
THE BOARD URGES THE STOCKHOLDERS TO VOTE "FOR" THE PROPOSED AMENDMENT,
INCREASING BY 775,000 SHARES THE TOTAL NUMBER OF SHARES WHICH MAY BE AWARDED
UNDER THE 1990 PLAN.
8
<PAGE> 11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table contains a summary of the annual, long-term and other
compensation of the Company's executive officers at December 31, 1994, including
its Chief Executive Officer, for each of the Company's fiscal years ended
December 31, 1994, 1993 and 1992.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------
AWARDS
ANNUAL COMPENSATION -----------------------
----------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS($) OPTIONS(#) COMPENSATION($)
- - ---------------------------- ---- --------- -------- ------------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
David J. Gury 1994 288,750 407,826 27,460 -- 78,555 33,253(3)
Chairman of the Board, 1993 244,712 203,350 -- 27,750(2) 67,627 44,739
President and Chief 1992 218,484 -- 43,396 89,000(2) 60,000 36,380
Executive Officer
John C. Carlisle(4) 1994 175,270 184,630 45,144 -- 46,830 2,682(3)
Executive Vice President 1993 -- -- -- -- -- --
and Chief Operating 1992 -- -- -- -- -- --
Officer
Raj Kumar, D.Sc. 1994 170,196 130,304 -- -- 26,380 3,754(3)
Senior Vice President 1993 161,942 83,600 -- -- 35,000 5,376
1992 141,250 -- -- 12,460(2) 40,000 4,201
Alfred J. Fernandez 1994 153,115 147,283 -- -- 24,125 4,104(3)
Vice President -- Finance 1993 137,500 76,450 -- -- 30,000 4,589
and Chief Financial 1992 129,250 -- -- 35,600(2) 35,000 1,783
Officer
Stephen W. Weston(4) 1994 138,317 110,054 -- -- 21,350 3,059(3)
Vice President -- 1993 121,000 67,650 -- -- 25,000 3,387
Operations 1992 89,086 -- -- -- 30,000 292
</TABLE>
- - ---------------
(1) Includes $38,544 paid for moving expenses for Mr. Carlisle in 1994 and
$15,000 paid for a club membership for Mr. Gury in 1992.
(2) The number and value of restricted stock holdings as of December 31, 1994
for each of Messrs. Gury, Kumar and Fernandez were, respectively, 37,000
shares ($277,500), 3,500 shares ($26,250) and 10,000 shares ($75,000).
Values reflected in the table were determined using per share values of
$3.56 and $2.31, the closing prices of the Common Stock as reported on
NASDAQ on April 6, 1992 and February 26, 1993, respectively, the dates of
the grants. The closing price of the Common Stock as reported on NASDAQ on
December 31, 1994 was $7.50. Such shares of restricted stock vest not less
than three years from the grant date, were granted under terms which
require their forfeiture to the Company in the event that the holder leaves
the employment of the Company prior to vesting and may not be transferred
while they are subject to forfeiture. In the case of Mr. Gury, however, if
his employment is terminated without cause (as defined), his shares of
restricted stock cease to be subject to forfeiture and to restrictions on
transfer. See "Employment Agreements." No cash dividends have been
previously paid on the Common Stock and none are currently anticipated.
(3) Includes premiums for life insurance in the amounts of $31,003, $782,
$1,504, $1,854 and $809 paid by the Company on behalf of, respectively,
Messrs. Gury, Carlisle, Kumar, Fernandez and Weston. Also includes
contributions under the Company's 401(k) plan in the amounts of $2,250,
$1,900, $2,250, $2,250 and $2,250 on behalf of Messrs. Gury, Carlisle,
Kumar, Fernandez and Weston, respectively.
(4) Mr. Carlisle and Mr. Weston became executive officers in March 1994 and
April 1992, respectively.
9
<PAGE> 12
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information with respect to stock options
granted to the Chief Executive Officer and the named executive officers during
1994. The Company has not granted SARs.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- - ----------------------------------------------------------------------------
POTENTIAL
REALIZABLE VALUE AT
PERCENT OF ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERMS
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION -------------------
GRANTED(#)(1) FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
------------- ------------ ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
David J. Gury............ 78,555 19.0% 6.75 3/02/2004 333,469 845,076
John C. Carlisle......... 46,830 11.3% 6.75 3/02/2004 198,795 503,786
Raj Kumar, D.Sc.......... 26,380 6.4% 6.75 3/02/2004 111,984 283,790
Alfred J. Fernandez...... 24,125 5.8% 6.75 3/02/2004 102,412 259,531
Stephen W. Weston........ 21,350 5.2% 6.75 3/02/2004 90,632 229,678
</TABLE>
- - ---------------
(1) Each option becomes exercisable with respect to 25% of the shares subject to
the option on each of March 3, 1995, 1996, 1997 and 1998. The Compensation
Committee may at any time accelerate the exercisability of any option. In
addition, in the event of a change in control of the Company (as determined
by the Compensation Committee), the Committee may take such actions with
respect to the options as it considers equitable and in the best interests
of the Company. Under the terms of his Employment Agreement, if Mr. Gury is
terminated without cause (as defined), one-half of his unvested options
will immediately become exercisable.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table shows certain information concerning the aggregate
number and dollar value of all options exercised and the total number of
unexercised options held by the Chief Executive Officer and the named executive
officers as of December 31, 1994.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, DECEMBER 31,
1994(#) 1994($)
SHARES --------------- -----------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE(2)
----------- -------------- --------------- -----------------
<S> <C> <C> <C> <C>
David J. Gury............... 66,666 333,330 421,956/192,626 2,667,562/653,069
John C. Carlisle............ -- -- 65,528/46,830 318,466/35,123
Raj Kumar, D.Sc............. 54,000 248,468 41,750/85,630 207,201/317,766
Alfred J. Fernandez......... 20,000 116,250 72,000/77,125 408,646/286,773
Stephen W. Weston........... -- -- 21,250/55,100 91,522/172,378
</TABLE>
- - ---------------
(1) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock on the date of
exercise multiplied by the number of shares to which the exercise relates.
(2) Calculated using the difference between the option exercise prices and
$7.50, the closing price of the Company's Common Stock as reported on
NASDAQ on December 31, 1994.
EMPLOYMENT AGREEMENTS
The Company has Employment Agreements with each of the named executive
officers. The Employment Agreements with Messrs. Kumar, Fernandez and Weston
were effective on March 31, 1992 and, as amended, have terms expiring on July
31, 1995. The Employment Agreement with Mr. Carlisle, effective January 27,
10
<PAGE> 13
1994, expires on December 31, 1996. The base salaries paid under the Employment
Agreements to Messrs. Kumar, Fernandez and Weston were $162,000, $150,000 and
$135,000, respectively, through the one-year period ended March 31, 1995. The
base salary paid under the Employment Agreement with Mr. Carlisle was $190,000
per year through March 31, 1995. Under the Employment Agreements, each of the
employees is entitled to receive additional compensation and annual bonuses as
determined by the Compensation Committee, term life insurance and a monthly
automobile allowance, and is eligible to participate in the Company's benefit
plans and programs. Each of the Employment Agreements provides that it may be
terminated by either the employee or the Company prior to the expiration of the
term of the Agreement; however, if the employee is terminated without cause he
is entitled to receive a severance payment in the amount of 75% of his
then-current annual salary (except for Mr. Carlisle's Employment Agreement which
provides for a severance payment in the amount of 100% of his then-current
annual salary) and the continuation of certain benefits for specified periods
following termination. Each of the Employment Agreements provides that the
employee will not compete with the Company for a period of one year after his
employment terminates.
Mr. Gury's Employment Agreement was effective January 1, 1993 and expires
December 31, 1997, and continues thereafter for successive one-year terms unless
at least 180 days' prior notice of termination is given by either Mr. Gury or
the Company. Mr. Gury's base salary under the Agreement was $300,000 through the
one-year period ended March 31, 1995. Mr. Gury's base salary is subject to
increase at the discretion of the Compensation Committee. Mr. Gury is entitled
to participate in bonus plans maintained by the Company for senior executives
and may receive additional bonuses at the discretion of the Compensation
Committee. The Agreement also provides that Mr. Gury shall receive other
specified benefits. The Company may terminate Mr. Gury's employment at any time
prior to the expiration of the original term of the Agreement. If this
termination is without cause (as defined in the Agreement), for the longer of
the balance of the initial five-year term or three years, Mr. Gury will be
entitled to receive each year an amount equal to his salary at the time of
termination plus his average bonus for the last three fiscal years. In addition,
all restricted stock awarded to Mr. Gury will no longer be subject to forfeiture
or contractual restrictions on transfer and one-half of his then-unvested stock
options will vest and become exercisable. During such period, Mr. Gury shall
continue to receive all benefits that he is otherwise entitled to receive under
the Agreement and professional out-placement services at the Company's expense.
The Agreement also provides for severance benefits in the event either the
Company or Mr. Gury terminates Mr. Gury's employment following the initial
five-year term. Mr. Gury's Employment Agreement provides that he will not
compete with the Company during any period in which he is receiving severance
payments.
COMPENSATION COMMITTEE REPORT
Consistent with a compensation program developed by the Compensation
Committee in February 1993, executive compensation levels for 1994 reflect the
Company's increased revenues and improved earnings, as compared to 1993.
MANAGEMENT COMPENSATION PROGRAM. The Company's Management Compensation
Program (the "Program") was developed by the Compensation Committee with the
assistance of an outside compensation consultant and the Company's Human
Resources Director and incorporates the results of a study undertaken by the
American Compensation Association of current executive compensation practices.
The Program, which is based upon the compensation practices of comparable
companies included in the study, is founded on the following principles. First,
a strong link should be developed between planned organizational goals and
individual compensation. Second, the Company should assure total compensation
opportunities that are above comparable companies when the Company's performance
is superior to theirs and below such comparators if the Company's performance is
inferior to theirs. Third, the Company's compensation program should allow it to
attract and retain individuals whose performance will enhance the profitability
of the Company and, thus, stockholder value.
The Company uses a comparator group of companies in the
pharmaceutical/healthcare industry (the "Comparator Group") to serve as the
basis for determining the appropriate cash and equity incentive elements of the
Program. The companies in the Comparator Group are selected from the
pharmaceutical/healthcare
11
<PAGE> 14
industry based upon their similarity to the Company in size, as determined by
total revenue, and performance, as determined by return on equity. The size and
composition of the Comparator Group may change somewhat from year to year. In
1994 there were 14 companies in the Comparator Group. The Comparator Group
differed from the group of companies included in the NASDAQ Pharmaceutical Stock
Index used in the Comparative Stock Performance graph following this report. The
NASDAQ Pharmaceutical Stock Index, which consists of approximately 226
companies, is too unwieldy to use for compensation purposes because of the large
number of companies and their disparate compensation practices. The Comparator
Group is not used in the performance graph principally because of the need to
maintain consistency in the indices or peer groups used in the graph.
Base salary, annual bonus and long-term incentive compensation, the three
components of executive officers' compensation provided under the Program for
1994, are discussed below. While 1994 base salary and long-term incentive
compensation were established by the Compensation Committee in early 1994 based
upon prior years' performance and the additional factors discussed below, the
annual bonus earned for 1994 was based upon 1994 performance.
BASE COMPENSATION. The Program is targeted to establish conservative base
salaries set at 90% of the median salary levels of the Comparator Group. The
increase in overall executive base salaries in 1994 reflects a plan to phase in
increases of base salaries until the targeted levels are reached.
The Compensation Committee makes salary decisions based upon a structured
annual review with input from the Chief Executive Officer for the other
executive officers as deemed appropriate. Three equally weighted criteria:
budget performance, project/goal performance and management attributes/skills
performance, are the measurement factors used to make base salary decisions.
ANNUAL BONUS. Annual cash bonuses are provided to reward the attainment of
planned operating goals based on revenue and profitability (pretax income as a
percentage of revenue) and specified individual goals, with increased bonus
amounts when performance is above the planned operating goals. When planned
operating goals are attained or exceeded, the executives are eligible to receive
cash bonuses ranging up to 125% of their base salaries. A portion of these
bonuses, 20% of the Chief Executive Officer's and Chief Operating Officer's and
30% of the other executive officers' bonuses, are discretionary and are based
upon the achievement of individual goals, such as production increases, cost
control, acquisitions, product development and market expansion, to name a few.
The Compensation Committee considers input from the Chief Executive Officer when
assessing the achievement by other executive officers of individual goals.
The average bonus earned by the five executive officers in 1994 was 106% of
their combined base salaries and reflects the attainment of 150% of the planned
operating goals during 1994.
LONG-TERM INCENTIVE COMPENSATION. Substantial long-term equity incentives,
primarily in the form of stock options, are attainable based upon the Company's
three-year rolling average return on equity ("ROE") in comparison to the
Comparator Group. The primary purpose for this component of compensation is the
enhancement of stockholder value.
The stock option award granted to the Company's executive officers during
1994 was based upon the attainment of ROE of 108% of the Comparator Group (12.8%
versus 11.8%).
OTHER COMPENSATION. The Compensation Committee is authorized to make
discretionary compensation awards from time to time, including the restricted
stock awards.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Gury's 1994 base salary was
approximately 75% of the median level of the base salaries in the Comparator
Group, after an increase from his 1993 base salary. In 1993, Mr. Gury's base
salary was approximately 70% of the median level.
Mr. Gury's 1994 annual bonus compensation was approximately 141% of his
base salary compensation, reflecting the Company's attainment, in 1994, of
record revenues and profits, the primary basis for measurement of his annual
bonus compensation and a discretionary bonus award of $40,000 in recognition of
his achievement in completing the acquisition of Premier BioResources, Inc. in
January 1994.
12
<PAGE> 15
In 1994, an option to purchase 78,555 shares of Common Stock was awarded to
Mr. Gury under the long-term incentive portion of the Program. The Company's
three-year rolling average ROE for the period ended December 31, 1994 was 108%
of the ROE of the Comparator Group. Accordingly, Mr. Gury was awarded 108% of
the maximum potential award under the Program. The 1994 stock option award to
Mr. Gury was based solely upon the Program and did not consider the amount of
his outstanding awards or the amount of awards granted in any previous year.
Respectfully submitted by,
THE COMPENSATION COMMITTEE
David A. Thompson
Richard A. Harvey, Jr.
COMPARATIVE STOCK PERFORMANCE
The following graph and chart compare during the five-year period
commencing December 31, 1989 (at the market close) and ending December 31, 1994
the annual change in the cumulative total return on the Company's Common Stock
with the NASDAQ Stock Market (U.S.) and the NASDAQ Pharmaceutical Stocks
indices, assuming the investment of $100 on December 31, 1989 (at the market
close) and the reinvestment of any dividends.
COMPARATIVE FIVE-YEAR TOTAL RETURN
<TABLE>
<CAPTION>
NASDAQ
PHARMACEUTICAL NASDAQ STOCK
MEASUREMENT PERIOD STOCKS MARKET (U.S.)
(FISCAL YEAR COVERED) NABI INDEX INDEX
<S> <C> <C> <C>
1989 100 100 100
1990 100 120 85
1991 353 319 136
1992 300 265 159
1993 353 237 181
1994 800 178 177
</TABLE>
13
<PAGE> 16
CERTAIN STOCKHOLDERS
The following table sets forth information as of April 6, 1995 with respect
to (i) each director of the Company, (ii) the named executive officers, (iii)
all officers and directors of the Company as a group and (iv) each person who is
known by the Company to be the beneficial owner of more than five percent of the
Common Stock as of such date. This information has been furnished by the persons
listed in the table.
<TABLE>
<CAPTION>
SHARES PERCENT OF
BENEFICIALLY OUTSTANDING
NAME OF BENEFICIAL OWNER OWNED(1) SHARES OWNED
------------------------------------------------------- ------------ ------------
<S> <C> <C>
Directors
David J. Gury.......................................... 664,849(2) 3.4%
Paul Bogikes........................................... 10,000 (3)
David L. Castaldi...................................... 1,001 (3)
Richard A. Harvey, Jr.................................. -- --
David A. Thompson...................................... -- --
Named Executive Officers
David J. Gury.......................................... 664,849(2) 3.4%
John C. Carlisle....................................... 114,018(4) (3)
Raj Kumar, D.Sc........................................ 117,695(5) (3)
Alfred J. Fernandez.................................... 137,281(6) (3)
Stephen W. Weston...................................... 40,337(7) (3)
All Officers and Directors as a Group (10 Persons)..... 1,098,194(8) 5.5%
Five Percent or Greater Stockholders
Abbott Laboratories.................................... 2,000,000(9) 10.3%
One Abbott Park Road
Abbott Park, IL 60064-3500
FMR Corp............................................... 2,201,261(10) 11.3%
82 Devonshire Street
Boston, MA 02109
</TABLE>
- - ---------------
(1) Unless otherwise noted, the nature of beneficial ownership consists of sole
voting and investment power.
(2) Includes (a) an aggregate of 72,100 shares of Common Stock owned by Mr.
Gury's wife and 9,000 shares held by Mr. Gury as trustee under a trust for
the benefit of his mother, as to all of which Mr. Gury disclaims beneficial
ownership, (b) an aggregate of 346,851 shares of Common Stock which may be
acquired under stock options which are presently exercisable or may be
exercised within 60 days of April 6, 1995 and (c) 12,000 shares of Common
Stock which may not be transferred until the shares vest and which are
subject to forfeiture to the Company in the event that Mr. Gury leaves the
employment of the Company before the shares vest, which occurs with respect
to one-third of the shares on each of February 26, 1996, 1997 and 1998. The
restrictions on transfer and the forfeiture provisions described above
lapse in the event that Mr. Gury's employment with the Company is
terminated without cause (as defined).
(3) Percentage of Common Stock beneficially owned is less than 1%.
(4) Includes 77,235 shares of Common Stock which may be acquired under stock
options which are presently exercisable or may be exercised within 60 days
of April 6, 1995.
(5) Includes an aggregate of 80,095 shares of Common Stock which may be
acquired under stock options which are presently exercisable or may be
exercised within 60 days of April 6, 1995.
(6) Includes an aggregate of 107,281 shares of Common Stock which may be
acquired under stock options which are presently exercisable or may be
exercised within 60 days of April 6, 1995. Mr. Fernandez owns 30,000 shares
jointly with his spouse.
(7) Shares of Common Stock which may be acquired under stock options which are
presently exercisable or may be exercised within 60 days of April 6, 1995.
(8) See notes 2, 4, 5, 6, and 7 above.
14
<PAGE> 17
(9) Based upon a Schedule 13D dated October 15, 1992 filed by Abbott
Laboratories. See "Certain Transactions" concerning voting and other
agreements concerning these shares.
(10) Based upon a Schedule 13G dated February 14, 1995 filed by FMR Corp., which
only has sole dispositive power with respect to the shares.
CERTAIN TRANSACTIONS
ABBOTT LABORATORIES
In 1992 the Company acquired certain assets from Abbott Laboratories
("Abbott") relating to H-BIG(R), a proprietary FDA-licensed product currently
used to provide passive immunity from exposure to hepatitis B. In consideration
for the acquisition of the assets, the Company issued to Abbott 2,000,000 shares
of the Company's Common Stock (which Abbott continued to hold as of April 6,
1995) and agreed to pay Abbott royalties based upon sales of H-BIG(R). The
Company accrued approximately $1,426,000 to Abbott in 1994 in respect of this
royalty. In the H-BIG(R) transaction, Abbott also agreed to manufacture H-BIG(R)
for the Company under a license from the Company and to act as the Company's
exclusive distributor in specified Latin American and Far East territories. The
Company accrued approximately $120,000 in distribution fees to Abbott in 1994.
Mr. Thompson, a director of the Company, is also Senior Vice President,
Strategic Improvement Processes of Abbott.
In connection with the H-BIG(R) acquisition, Abbott and the Company entered
into a Shareholder Agreement which governs the rights of Abbott and the
companies Abbott controls (collectively, the "Abbott Group") with respect to all
shares of the Company's Common Stock from time to time held by the Abbott Group.
The Shareholder Agreement requires the Abbott Group to vote its shares of the
Company's Common Stock both for the Company's nominees to the Company's Board of
Directors and, unless the Company otherwise consents in writing or the
stockholders are voting on a "significant event," on all other matters to be
voted on by the Company's stockholders in the same proportion as the votes cast
by the Company's other stockholders. The Shareholder Agreement also imposes
certain restrictions on the right of the Abbott Group to acquire or transfer any
shares of the Company's Common Stock, provides the Company with certain
repurchase rights and obligations with respect to the shares of the Company's
Common Stock held by the Abbott Group and requires the Company to register the
resale of such shares under the Securities Act of 1933 upon notice from the
Abbott Group after September 30, 1995. Such registration rights terminate on
September 30, 1998. The Shareholder Agreement terminates on the earlier of
September 30, 2002 or two years from the date the voting power of the Abbott
Group falls below five percent.
In November 1992, the Company acquired Abbott's rights and assets
associated with HIV-IG(TM). In consideration for the sale of these rights and
assets, Abbott will receive a royalty based on commercial sales of HIV-IG(TM).
To date, no royalties have been paid or are owing to Abbott with respect to
HIV-IG(TM).
In 1992 the Company and Abbott entered into a Plasma Data Management System
License and Lease Agreement under which Abbott agreed to develop for and lease
to the Company a proprietary computer system for managing data from the
Company's testing of blood and blood components. The Agreement has a term of
seven years commencing on the date that Abbott certifies that the system has
been installed and is operational, at which time monthly lease payments become
due aggregating approximately $970,000 per year (depending upon the number of
the Company's facilities using the system). The Company accrued approximately
$167,000 in lease payments under this agreement during 1994.
During 1994, the Company also sold approximately $6,103,000 of plasma,
diagnostic and other products and testing services to Abbott and purchased
approximately $11,260,000 of reagents, testing supplies and other products from
Abbott.
PREMIER BIORESOURCES, INC.
On January 27, 1994, the Company acquired Premier BioResources, Inc.
("PBI") by means of a merger in which PBI became a wholly owned subsidiary of
the Company. In connection with the merger, the
15
<PAGE> 18
Company issued 1,771,584 shares of the Company's Common Stock and paid $222,119
in cash to the stockholders of PBI.
John C. Carlisle, the President, Chief Executive Officer and a stockholder
of PBI immediately before its acquisition by the Company, became the Executive
Vice President and Chief Operating Officer of the Company after the acquisition.
Pursuant to the terms of the PBI acquisition, William A. Davies became a
director of the Company; however, Mr. Davies resigned as a director of the
Company on February 7, 1995. Before the PBI acquisition and during his tenure as
a director of the Company, Mr. Davies held an interest in the general partner of
CGW Southeast Partners I, L.P. ("CGWSP"), which was the controlling stockholder
of PBI prior to its acquisition by the Company. As a result of the PBI
acquisition, CGWSP owned 1,176,680 shares (or approximately 7.6%) of the
outstanding Common Stock of the Company. In connection with a public offering of
the Company's Common Stock consummated on October 6, 1994 (the "1994 Offering"),
CGWSP sold 1,176,680 shares of Common Stock, representing all its shares of the
Company's Common Stock, at the public offering price of $6.50 per share (before
underwriting discounts and commissions).
Richard A. Harvey, Jr., a director of the Company, is President of BNY
Associates, Incorporated ("BNY"), a Boston investment banking firm. During 1994,
BNY provided investment banking services to the Company in connection with the
PBI acquisition. The Company paid BNY a financial advisory fee of $261,660 for
its services.
Expenses incurred in connection with the 1994 Offering as a result of
CGWSP's participation in the offering were paid by the Company.
CONTINENTAL PHARMA CRYOSAN INC.
In 1992 the Company purchased from Continental Pharma Cryosan Inc. ("CPCI")
certain operating assets of CPCI's Biologicals Division and repurchased from
CPCI and ConPharma Home HealthCare, Inc., a subsidiary of CPCI, certain shares
of the Company's capital stock. Since before the CPCI acquisition, Thomas O.
Hecht has been Chairman of the Board, Chief Executive Officer and the
controlling shareholder of CPCI and, until his resignation on February 7 1995,
he was a director of the Company.
As additional purchase price in connection with the CPCI acquisition, the
Company agreed to make annual payments to CPCI based upon a percentage of the
Company's net sales of source plasma (excluding specialty plasmas) for a period
of seven years, subject to extension in the event CPCI was not paid at least
$11.0 million over the seven-year period (the "Contingent Payments"). On January
27, 1994, in connection with the acquisition of PBI, the percentage of net sales
payable to CPCI as Contingent Payments was amended to reduce the percentage
after CPCI has received Contingent Payments equal to $11.0 million.
In August 1994, CPCI and the Company agreed to modify the additional
purchase price agreement to provide for a single lump sum payment of $6.5
million plus accrued additional payments through September 30, 1994, in full
satisfaction for the Company's obligations to make Contingent Payments. This
amount was paid to CPCI from the Company's proceeds from the 1994 Offering. Also
in connection with the 1994 Offering, CPCI purchased 750,000 shares of Common
Stock under a warrant for a price per share of $3.25, all of which it sold in
the 1994 Offering.
Expenses incurred in connection with the 1994 Offering as a result of
CPCI's participation in the offering were paid by the Company.
OTHER MATTERS
Mr. Gury was indebted to the Company during 1994 primarily under notes
previously issued to the Company to purchase shares of Common Stock under a
stock purchase plan in effect at the time of the purchase. Since January 1,
1994, the largest amount of such indebtedness was $187,492. In February 1994 the
indebtedness was paid in full. Such indebtedness was secured by a pledge of
shares of Common Stock and accrued interest at a "prime" rate.
16
<PAGE> 19
Mr. Carlisle was indebted to the Company under a note issued to the Company
on September 12, 1994. The largest amount of such indebtedness during 1994 was
$131,337. In March 1995, the indebtedness was paid in full. Such indebtedness
was secured by a pledge of shares of Common Stock and accrued interest at a
"prime" rate.
COMPLIANCE WITH SECTION 16 OF THE 1934 ACT
Section 16(a) of the 1934 Act requires the Company's executive officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "Commission"). In
March 1994, Mr. Carlisle filed a corrective form with the Commission listing
options inadvertently omitted from an earlier Section 16(a) filing.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next annual
meeting of stockholders must be received by the Company at its principal
executive offices by December 28, 1995 for inclusion in the proxy statement and
form of proxy relating to that meeting and must comply with the applicable
requirements of the federal securities laws.
OTHER MATTERS
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as shown above. However, if any
such other business should come before the Annual Meeting, it is the intention
of the persons named in the enclosed Proxy to vote the Proxies in respect of any
such business in accordance with their best judgment.
The cost of preparing, assembling and mailing this proxy material will be
borne by the Company. The Company may solicit Proxies otherwise than by use of
the mail, in that certain officers and regular employees of the Company, without
additional compensation, may use their personal efforts, by telephone or
otherwise, to obtain Proxies. Such assistance may take the form of personal,
telephonic or written solicitation or any combination thereof. The Company will
also request persons, firms and corporations holding shares in their names, or
in the names of their nominees, which shares are beneficially owned by others,
to send this proxy material to and obtain Proxies from such beneficial owners
and will reimburse such holders for their reasonable expenses in doing so.
The Company has retained Regan & Associates, Inc. ("Regan") to assist it in
the solicitation of proxies by telephonic and written means on behalf of the
Board of Directors and the mailing and distribution of proxy material. The
anticipated cost of Regan's services, including reimbursement for expenses, is
approximately $5,000.
By Order of the Board of Directors
Constantine Alexander
Secretary
April 26, 1995
17
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EXHIBIT A
NORTH AMERICAN BIOLOGICALS, INC.
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
The purpose of this Stock Plan for Non-Employee Directors (the "Plan") is
to advance the interests of North American Biologicals, Inc. (the "Company") by
increasing the proprietary interest in the Company of non-employee members of
the Company's Board of Directors by providing a portion of their compensation in
options to acquire shares ("Shares") of the Company's common stock ("Common
Stock") and also by providing the opportunity to receive in Shares a portion of
the cash compensation otherwise due them.
2. ADMINISTRATION
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors (the "Board") of the Company. The
Committee shall have authority, not inconsistent with the express provisions of
the Plan, (a) to administer the issuance of options granted in accordance with
the formula set forth in this Plan to such directors as are eligible to receive
options; (b) to prescribe the form or forms of instruments evidencing options
and any other instruments required under the Plan and to change such forms from
time to time; (c) to adopt, amend and rescind rules and regulations for the
administration of the Plan; and (d) to interpret the Plan and to decide any
questions and settle all controversies and disputes that may arise in connection
with the Plan. Such determinations of the Committee shall be conclusive and
shall bind all parties. Transactions under this plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under Section 16 of
the Securities Exchange Act of 1934 ("Rule 16b-3"). To the extent any provision
of the Plan or action by the Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.
3. EFFECTIVE DATE OF PLAN
The Plan shall become effective on the date approved by the shareholders of
the Company.
4. SHARES SUBJECT TO THE PLAN
(a) Number of Shares. The maximum number of Shares that may be delivered
upon the exercise of options granted under the Plan and elections to receive
Shares in lieu of cash compensation shall be 150,000 Shares. If any option
granted under the Plan terminates without having been exercised in full or any
election to receive Shares in lieu of cash compensation is not paid in full, the
number of Shares as to which such option was not exercised or such election was
not paid shall be available for future grants and/or elections within the
foregoing limit.
(b) Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Shares or, if the Board so decides in its sole
discretion, previously issued Shares acquired by the Company and held in
treasury. No fractional Shares shall be delivered under the Plan.
(c) Changes in Stock; Restructuring, etc. In the event of a stock
dividend, stock split or combination of shares, the number and kind of shares of
stock or securities of the Company subject to options then outstanding or
subsequently granted under the Plan, the maximum number of shares or securities
that may be delivered under the Plan, the exercise price, and other relevant
provisions shall be appropriately adjusted by the Committee. In the event of any
other recapitalization, reorganization, extraordinary dividend or distribution
or restructuring transaction affecting the Common Stock, the number of shares
issuable under this Plan shall be subject to such adjustment as the Committee
may deem appropriate, and the number of shares issuable pursuant to any option
theretofore granted (whether or not then exercisable) and/or the option price
per share of such option shall be subject to such adjustment as the Committee
may deem appropriate with a view toward preserving the value or such option.
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5. ELIGIBILITY FOR OPTIONS
Directors eligible to receive options under the Plan and to elect to
receive Shares in lieu of cash compensation ("Non-Employee Directors") shall be
those directors who are not present or former employees of the Company or of any
subsidiary of the Company.
6. TERMS AND CONDITIONS OF OPTIONS
(a) Number of Options. On the date of the annual meeting of stockholders
at which this Plan is approved by stockholders, each Non-Employee Director
continuing in office and each newly elected Non-Employee Director shall be
awarded an option covering 5,000 Shares. On the date of each subsequent annual
meeting, each Non-Employee Director continuing in office shall be awarded an
option covering 2,000 Shares and each newly elected Non-Employee Director shall
be awarded an option covering 5,000 Shares. For purposes of this paragraph, each
Non-Employee Director elected to office by the Board since the then last annual
meeting shall be treated as a newly elected Non-Employee Director.
(b) Exercise Price. The exercise price of each option shall be the fair
market value per Share at the time the option is granted. In no event, however,
shall the option price be less, in the case of an original issue of authorized
stock, than par value per share. For purposes of this subsection, the fair
market value of a Share on any date shall be the last sale price of a share of
Common Stock on such day as reported on NASDAQ (or if the Common Stock is then
listed or admitted to unlisted trading privileges on a national securities
exchange, the last sale price of a share of Common Stock regular way on the
principal national securities exchange on which the Common Stock is then listed
or admitted to unlisted trading privileges) or, if there was no such reported
price on such day, the latest day prior thereto on which there was such a
reported price.
(c) Duration of Options. The latest date on which an option may be
exercised (the "Final Exercise Date") shall be the date which is five years from
the date the option was granted.
(d) Exercise of Options.
(1) Each option shall become exercisable to the full extent of all
Shares covered thereby six months after the date of the grant.
(2) Any exercise of an option shall be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (i) any
documentation required by the Committee and (ii) payment in full for
the number of Shares for which the option is exercised.
(3) If an option is exercised by the executor or administrator of a
deceased director, or by the person or persons to whom the option has
been transferred by the director's will or the applicable laws of
descent and distribution, the Company shall be under no obligation to
deliver Shares pursuant to such exercise until the Company is
satisfied as to the authority of the person or persons exercising the
option.
(e) Payment for and Delivery of Shares. Shares purchased under the Plan
shall be paid for as follows: (i) by certified or bank check or other instrument
acceptable to the Committee (in accordance with guidelines established for this
purpose), (ii) through the delivery of shares of Common Stock (which, in the
case of shares acquired from the Company, have been outstanding for at least six
months) having a fair market value on the last business day preceding the date
of exercise equal to the purchase price, (iii) by delivery of an unconditional
and irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price or (iv) by any combination of the
permissible forms of payment.
(f) Non-Transferability of Options. No option may be transferred other
than by will or by the laws of descent and distribution, and during a director's
lifetime an option may be exercised only by him or her.
(g) Death and Disability of a Director. Upon departure from the Board by
reason of death or disability (as determined by the Committee), all options
outstanding hereunder that are not otherwise exercisable shall become
immediately exercisable. All options held by such director may be exercised by
such director or by his or her executor or administrator, or by the person or
persons to whom the option is transferred by will or the
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applicable laws of descent and distribution, at any time within one year after
such departure. After completion of the one-year period, such options shall
terminate to the extent not previously exercised. Notwithstanding the foregoing,
options held by a director who dies following departure by reason of disability
shall remain exercisable for one year following death. In no event shall any
option referred to in this paragraph 6(g) be exercisable beyond its stated term,
if earlier.
(h) Other Termination of Status of Director. If a director's service with
the Company terminates for any reason other than death or disability as
specified in paragraph 6(g), all options held by the director that are not then
exercisable shall terminate. Options that are exercisable on the date of
termination shall continue to be exercisable for a period of sixty days (but not
beyond their stated term if earlier). After completion of that sixty-day period,
such options shall terminate to the extent not previously exercised, expired or
terminated.
(i) Mergers, etc. In the event of a consolidation or merger in which the
Company is not the surviving corporation or which results in the acquisition of
substantially all the Company's outstanding Stock by a single person or entity
or by a group or persons and/or entities acting in concert, or in the event of a
sale of all or substantially all assets or a dissolution or liquidation of the
Company, all options hereunder will terminate; provided, that 20 days prior to
the effective date of any such merger, consolidation, sale, dissolution, or
liquidation, all options outstanding hereunder that are not otherwise
exercisable shall become immediately exercisable.
7. ELECTION TO BE PAID ANNUAL CASH RETAINER IN SHARES
(a) Election. A Non-Employee Director may elect to be paid his or her
annual retainer as a director of the Company in whole or in part in shares of
Common Stock. Any such election must be in writing, must state what percentage
of the annual retainer the director elects to receive in shares of Common Stock,
and must be received by the Company at least six months and one day prior to the
date such annual retainer will be paid by the Company. Any such election shall
be irrevocable. Failure to make any such election in accordance with the
provisions of the second preceding sentence shall mean that the annual retainer
shall be paid solely in cash.
(b) Valuation. For purposes of determining the number of shares of Common
Stock to be delivered to a director pursuant to an election duly made pursuant
to the immediately preceding subsection (a), the amount of the annual retainer
shall be divided by the fair market value of a share of Common Stock on the date
the annual retainer is to be paid (but in the event of an original issue of
authorized stock, in no event shall the value of a share of Common Stock be less
than the par value of a share of Common Stock). Cash shall be paid to the
directors in lieu of any fractional share. For purposes of this subsection, the
fair market value of a share of Common Stock on any date shall be the last sale
price of a share of Common Stock on such day as reported on NASDAQ (or if the
Common Stock is then listed or admitted to unlisted trading privileges on a
national securities exchange, the last sale price of a share of Common Stock
regular way on the principal national securities exchange on which the Common
Stock is then listed or admitted to unlisted trading privileges) or, if there
was no reported price on such day, the latest day prior thereto on which there
was a reported price.
8. MISCELLANEOUS
(a) Rights as a Shareholder. Any option holder and any Non-Employee
Director who shall have elected to receive Shares under the Plan in lieu of cash
compensation shall not have the rights of a shareholder with regard to awards
and/or elections under the Plan except as to Shares actually received by him or
her under the Plan.
(b) Compliance with Securities Laws. The Company shall not be obligated to
deliver any Shares until (1), in the opinion of the Company's counsel, all
applicable federal, state and foreign laws and regulations have been complied
with, (2) if the Company's common stock outstanding is at the time listed on any
stock exchange, the Shares to be delivered have been listed or authorized to be
listed on such exchange upon official notice of issuance, and (3) all other
legal matters in connection with the issuance and delivery of such Shares have
been approved by the Company's counsel. If the sale of Shares has not been
registered under the
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Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the option, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act and may require
that the certificates evidencing such Shares bear an appropriate legend
restricting transfer.
9. EFFECT, TERMINATION AND AMENDMENT
The Committee may at any time terminate the Plan, but options previously
granted and elections previously made shall not be affected thereby. The Board
may at any time or times amend the Plan for any purpose which may at the time be
permitted by law; provided, that except to the extent expressly required or
permitted by the Plan, no such amendment will, without the approval of the
stockholders of the Company, effectuate a change for which stockholder approval
is required in order for the Plan to continue to qualify under Rule 16b-3.
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EXHIBIT B
NORTH AMERICAN BIOLOGICALS, INC.
1990 EQUITY
INCENTIVE PLAN
SECTION 1. PURPOSE
The purpose of the 1990 Equity Incentive Plan (the "Plan") of North
American Biologicals, Inc. (the "Company") is to enable the Company and its
subsidiaries to attract, retain and motivate their employees and consultants and
to enable these employees and consultants to participate in the long-term growth
of the Company by providing for or increasing the proprietary interests of such
persons in the Company, thereby assisting the Company to achieve its long-range
performance goals.
SECTION 2. DEFINITIONS
As used in the Plan:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" means any Option, Stock Appreciation Right, Performance Share,
Restricted Stock or Stock Unit awarded under the Plan.
"Board" means the Board of Directors of the Company.
"Committee" means a committee of not fewer than three members of the
Board appointed by the Board to administer the Plan, each of whom is a
"disinterested person" within the meaning of Rule 16b-3 under the Act, or
any successor provision.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Common Stock" or "Stock" means the Common Stock, $0.10 par value, of
the Company.
"Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the
Committee in good faith or in the manner established by the Committee from
time to time.
"Incentive Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under the Plan which is intended to meet the
requirements of Section 422A of the Code or any successor provision.
"Nonstatutory Stock Option" means an option to purchase shares of
Common Stock awarded to a Participant under the Plan which is not intended
to be an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Nonstatutory Stock
Option.
"Participant" means a person selected by the Committee to receive an
Award under the Plan.
"Performance Cycle" or "Cycle" means the period of time selected by
the Committee during which performance is measured for the purpose of
determining the extent to which an award of Performance Shares has been
earned.
"Performance Shares" means shares of Common Stock awarded to a
Participant under Section 8.
"Restricted Period" means the period of time selected by the Committee
during which an award of Restricted Stock may be forfeited to the Company.
"Restricted Stock" means shares of Common Stock awarded to a
Participant under Section 9 which are subject to forfeiture.
"Stock Appreciation Right" or "SAR" means a right awarded to a
Participant under Section 7.
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"Stock Unit" means a share of Common Stock or a unit is valued in
whole or in part by reference to, or otherwise based on, the value of a
share of Common Stock, awarded to a Participant under Section 10.
SECTION 3. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have
authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing the operating of the Plan as it shall from time to time
consider advisable, to interpret the provisions of the Plan and any Award, and
to decide all disputes arising in connection with the Plan. The Committee's
decisions and interpretations shall be final and binding.
SECTION 4. ELIGIBILITY
All employees and consultants of the Company or any of its subsidiaries,
including any director who is an employee or consultant of the Company, shall be
eligible to be Participants in the Plan.
SECTION 5. STOCK AVAILABLE FOR AWARDS
(a) Awards may be made under the Plan for up to 2,745,000 shares of Common
Stock. If any Award in respect of shares of Common Stock expires or is
terminated before exercise or is forfeited for any reason or settled in a manner
that results in fewer shares of Common Stock outstanding than were initially
awarded, including without limitation the surrender of shares of Common Stock in
payment for the Award or any tax obligation thereon, the shares of Common Stock
subject to such Award or so surrendered, as the case may be, to the extent of
such expiration, termination, forfeiture or decrease, shall again be available
for award under the Plan. Shares of Common Stock issued under the Plan may
consist in whole or in part of authorized but unissued shares or treasury
shares.
(b) In the event that the Committee determines in its sole discretion that
any stock dividend, extraordinary cash dividend, creation of a class of equity
securities, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, exchange of shares, warrants or rights offering to
purchase Common Stock at a price substantially below fair market value, or other
similar transaction affects the Common Stock such that an adjustment is required
in order to preserve the benefits or potential benefits intended to be made
available under the Plan, the Committee shall have the right to adjust equitably
any or all of (i) the number and kind of shares of stock or securities in
respect of which Awards may be made under the Plan, (ii) the number and kind of
shares subject to outstanding Awards, and (iii) the award, exercise or
conversion price with respect to any of the foregoing, and if considered
appropriate, the Committee may make provision for a cash payment with respect to
an outstanding Award, provided that the number of shares subject to any Award
shall always be a whole number.
(c) The Company may make Awards under the Plan in substitution for stock
and stock-based awards held by employees of another corporation who concurrently
become employees of the Company or a subsidiary of the Company as the result of
a merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company or the acquisition by the Company or a subsidiary of
the Company of property or stock of the employing corporation. The Committee may
direct that the substitute awards be granted on such terms and conditions as the
Committee considers appropriate in the circumstances. The shares which may be
delivered under such substitute Awards shall be in addition to the maximum
number of shares provided for in section (a) above only to the extent that the
substitute Awards are both (i) granted to persons whose relationship to the
Company does not make (and is not expected to make) them subject to Section
16(b) of the Act and (ii) are granted in substitution for awards issued under a
plan approved, to the extent then required under Rule 16b-3 (or any successor
rule) under the Act, by the stockholders of the entity which issued such
predecessor awards.
SECTION 6. OPTIONS
(a) Subject to the provisions of the Plan, the Committee may award
Incentive Stock Options and Nonstatutory Stock Options and determine the number
of shares to be covered by each Option, the option
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price therefor, the term of the Option, and the other conditions and limitations
applicable to the exercise of the Option. The terms and conditions of Incentive
Stock Options shall be subject to and comply with Section 422A of the Code, or
any successor provision, and any regulations thereunder. Anything in the Plan to
the contrary notwithstanding, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended or altered, nor shall any discretion or
authority granted to the Committee under the Plan be so exercised, so as to
disqualify the Plan or, without the consent of the optionee, any Incentive Stock
Option granted under the Plan, under Section 422A of the Code.
(b) The option price per share of Common Stock purchasable under an Option
shall not be less than 100% of the Fair Market Value of the Common Stock on the
date of award with respect to Incentive Stock Options and not less than 50% of
the Fair Market Value of the Common Stock on the date of award with respect to
Nonstatutory Stock Options. If the Participant owns or is deemed to own (by
reason of the attribution rules applicable under Section 425(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation of the Company and an Incentive
Stock Option is granted to such Participant, the option price shall be not less
than 110% of Fair Market Value of the Common Stock on the date of award.
(c) No Incentive Stock Option shall be exercisable more than ten years
after the date the option is awarded and no Non-Qualified Stock Option shall be
exercisable more than ten years and one day after the date the option is
awarded. If a Participant owns or is deemed to own (by reason of the attribution
rules of Section 425(d) of the Code) more than 10% of the total combined voting
power of all classes of stock of the Company or any subsidiary or parent
corporation of the Company and an Incentive Stock Option is awarded to such
Participant, the term of such option shall be no more than five years from the
date of award.
(d) No shares shall be delivered pursuant to any exercise of an Option
until payment in full of the option price therefor is received by the Company.
Such payment may be made in whole or in part in cash or by certified or bank
check or, to the extent permitted by the Committee at or after the award of the
Option, by delivery of a note or shares of Common Stock owned by the optionee,
including Restricted Stock, valued at their Fair Market Value on the date of
delivery, or such other lawful consideration as the Committee may determine.
(e) No Option shall be transferable by the Participant otherwise than by
will or by the laws of descent and distribution, and all Options shall be
exercisable, during the Participant's lifetime, only by the Participant.
(f) The Committee may at any time accelerate the exercisability of all or
any portion of any Option.
SECTION 7. STOCK APPRECIATION RIGHTS
(a) A Stock Appreciation Right is an Award entitling the Participant to
receive an amount in cash or shares of Common Stock or a combination thereof
having a value equal to (or if the Committee shall so determine at time of
grant, less than) the excess of the Fair Market Value of a share of Common Stock
on the date of exercise over the Fair Market Value of a share of Common Stock on
the date of grant (or over the option exercise price, if the Stock Appreciation
Right was granted in tandem with a Stock Option) multiplied by the number of
shares with respect to which the Stock Appreciation Right shall have been
exercised.
(b) Subject to the provisions of the Plan, the Committee may award SARs in
tandem with an Option (at or after the award of the Option), or alone and
unrelated to an Option, and determine the terms and conditions applicable
thereto, including the form of payment. SARs granted in tandem with an Option
shall terminate to the extent that the related Option is exercised, and the
related Option shall terminate to the extent that the tandem SARs are exercised.
(c) An SAR related to an Option which can be exercised only during limited
periods following a change in control of the Company may entitle the Participant
to receive an amount based upon the highest price paid or offered for Common
Stock in any transaction relating to the change in control or paid during the
thirty-day period immediately preceding the occurrence of the change in control
in any transaction reported in the stock market in which the Common Stock is
normally traded.
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(d) Notwithstanding that an Option at the time of exercise shall not be
accompanied by a related Stock Appreciation Right, if the market price of the
shares subject to such Option exceeds the exercise price of such Option at the
time of its exercise, the Committee may, in its discretion, cancel such Option,
in which event the Company shall pay to the person exercising such Option an
amount equal to the difference between the Fair Market Value of the Common Stock
to have been purchased pursuant to such exercise of such Option (determined on
the date the Option is canceled) and the aggregate consideration to have been
paid by such person upon such exercise. Such payment shall be by check, bank
draft or in Common Stock having a Fair Market Value (determined on the date the
payment is to be made) equal to the amount of such payments or any combination
thereof, as determined by the Committee. The Committee may exercise its
discretion under the first sentence of this paragraph (d) only in the event of a
written request of the person exercising the option, which request shall not be
binding on the Committee.
SECTION 8. PERFORMANCE SHARES
(a) A Performance Share is an Award entitling the Participant to acquire
shares of Common Stock upon the attainment of specified performance goals.
Subject to the provisions of the Plan, the Committee may award Performance
Shares and determine the performance goals applicable to each such Award, the
number of such shares for each Performance Cycle, the duration of each
Performance Cycle and all other limitations and conditions applicable to the
awarded Performance Shares. There may be more than one Performance Cycle in
existence at any one time, and the duration of Performance Cycles may differ
from each other. The payment value of each Performance Share shall be equal to
the Fair Market Value of one share of Common Stock on the date the Performance
Share is earned or, in the discretion of the Committee, on the date the
Committee determines that the Performance Share has been earned.
(b) During any Performance Cycle, the Committee may adjust the performance
goals for such Performance Cycle as it deems equitable in recognition of unusual
or non-recurring events affecting the Company, changes in applicable tax laws or
accounting principles, or such other factors as the Committee may determine.
(c) As soon as practicable after the end of a Performance Cycle, the
Committee shall determine the number of Performance Shares which have been
earned on the basis of performance in relation to the established performance
goals. The payment values of earned Performance Shares shall be distributed to
the Participant as soon as practicable thereafter. The Committee shall
determine, at or after the time of award, whether payment values will be settled
in whole or in part in cash or other property, including Common Stock or Awards.
SECTION 9. RESTRICTED STOCK
(a) A Restricted Stock Award is an Award entitling the Participant to
acquire shares of Common Stock for a purchase price (which may be zero) equal to
or less than their par value, subject to such conditions, including a Company
right during a specified period or periods to repurchase such shares at their
original purchase price (or to require forfeiture of such shares if the purchase
price was zero) upon the Participant's termination of employment.
(b) Subject to the provisions of the Plan, the Committee may award shares
of Restricted Stock and determine the purchase price (if any) therefor, the
duration of the Restricted Period during which, and the conditions under which,
the shares may be forfeited to or repurchased by the Company and the other terms
and conditions of such Awards. Shares of Restricted Stock may be issued for no
cash consideration or such minimum consideration as may be required by
applicable law.
(c) Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as permitted by the Committee, during
the Restricted Period. Shares of Restricted Stock shall be evidenced in such
manner as the Committee may determine. Any certificates issued in respect of
shares of Restricted Stock shall be registered in the name of the Participant
and unless otherwise determined by the Committee, deposited by the Participant,
together with a stock power endorsed in blank, with the Company. At the
expiration of the Restricted Period, the Company shall deliver such certificates
to the Participant.
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(d) A Participant shall have all the rights of a shareholder with respect
to the Restricted Stock including voting and dividend rights, subject to
nontransferability restrictions and Company repurchase or forfeiture rights
described in this Section and subject to any other conditions contained in the
Award.
SECTION 10. STOCK UNITS
(a) Subject to the provisions of the Plan, the Committee may award Stock
Units subject to such terms, restrictions, conditions, performance criteria,
vesting requirements and payment rules as the Committee shall determine.
(b) Shares of Common Stock awarded in connection with a Stock Unit shall be
issued for no cash consideration or such minimum consideration as may be
required by applicable law.
SECTION 11. GENERAL PROVISIONS APPLICABLE TO AWARDS
(a) Notwithstanding any other provision of the Plan, to the extent required
to qualify for the exemption provided by Rule 16b-3 under the Act, and any
successor provision, (i) any Common Stock or other equity security offered under
the Plan to a Person subject to Section 16 of the Act may not be sold for at
least six months after acquisition and (ii) any Option, SAR or other similar
right related to an equity security, issued under the Plan to such a person
shall not be transferable other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder, shall not be exercisable for at least six months, and shall be
exercisable during the Participant's lifetime only by the Participant or the
Participant's guardian or legal representative.
(b) Each Award under the Plan shall be evidenced by a writing delivered to
the Participant specifying the terms and conditions thereof and containing such
other terms and conditions not inconsistent with the provisions of the Plan as
the Committee considers necessary or advisable to achieve the purposes of the
Plan or comply with applicable tax and regulatory laws and accounting
principles.
(c) Each Award may be made alone, in addition to or in relation to any
other award. The terms of each Award need not be identical, and the Committee
need not treat Participants uniformly. Except as otherwise provided by the Plan
or a particular Award, any determination with respect to an Award may be made by
the Committee at the time of award or at any time thereafter.
(d) The Committee shall determine whether Awards are settled in whole or in
part in cash, Common Stock, other securities of the Company, Awards or other
property. The Committee may permit a Participant to defer all or any portion of
a payment under the Plan, including the crediting of interest on deferred
amounts denominated in cash and dividend equivalents on amounts denominated in
Common Stock.
(e) In the discretion of the Committee, any Award under the Plan may
provide the Participant with (i) dividends or dividend equivalents payable
currently or deferred with or without interest, and (ii) cash payments in lieu
of or in addition to an Award.
(f) The Committee shall determine the effect on an Award of the disability,
death, retirement or other termination of employment of a Participant and the
extent to which, and the period during which, the Participant's legal
representative, guardian or designated beneficiary may receive payment of an
Award or exercise rights thereunder.
(g) In order to preserve a Participant's rights under an Award in the event
of a change in control of the Company, the Committee in its discretion may, at
the time an Award is made or at any time thereafter, take one or more of the
following actions with respect to any such change of control; (i) provide for
the acceleration of any time period relating to the exercise or realization of
the Award, (ii) provide for the Purchase of the Award upon the Participant's
request for an amount of cash or other property that could have been received
upon the exercise or realization of the Award had the Award been currently
exercisable or payable, (iii) adjust the terms of the Award in a manner
determined by the Committee, (iv) cause the Award
B-5
<PAGE> 29
to be assumed, or new rights substituted therefor, by another entity, or (v)
make such other provision as the Committee may consider equitable and in the
best interests of the Company.
(h) The Participant shall pay to the Company, or make provision
satisfactory to the Committee for payment of, any taxes required by law to be
withheld in respect of Awards under the Plan no later than the date of the event
creating the tax liability. In the Committee's discretion, such tax obligations
may be paid in whole or in part in shares of Common Stock, including shares
retained from the Award creating the tax obligation, valued at their Fair Market
Value on the date of delivery. The Company may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to
the Participant.
(i) For purposes of the Plan, the following events shall not be deemed a
termination of employment of a Participant:
(i) a transfer to the employment of the Company from a subsidiary or
from the Company to a subsidiary, or from one subsidiary to another;
(ii) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the Participant's right
to reemployment is guaranteed either by a statute or by contract or under
the policy pursuant to which the leave of absence was granted or if the
Committee otherwise so provides in writing.
For purposes of the Plan, employees of a subsidiary of the Company shall be
deemed to have terminated their employment on the date on which such subsidiary
ceases to be a subsidiary of the Company.
(j) The Committee may amend, modify or terminate any outstanding Award,
including substituting therefor another Award of the same or a different type,
changing the date of exercise or realization and converting an Incentive Stock
Option to a Nonstatutory Stock Option, provided that the Participant's consent
to such action shall be required unless the Committee determines that the
action, taking into account any related action, would not materially and
adversely affect the Participant.
SECTION 12. MISCELLANEOUS
(a) No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to
continued employment. The Company expressly reserves the right at any time to
dismiss a Participant free from any liability or claim under the Plan, except as
expressly provided in the applicable Award.
(b) Subject to the provisions of the applicable Award, no Participant shall
have any rights as a shareholder with respect to any shares of Common Stock to
be distributed under the Plan until he or she becomes the holder thereof. A
Participant to whom shares of Common Stock is awarded shall be considered the
holder of the Shares at the time of the Award except as otherwise provided in
the applicable Award.
(c) Subject to the approval of the shareholders of the Company, the Plan
shall be effective on May 8, 1990. Prior to such approval, Awards may be made
under the Plan expressly subject to such approval.
(d) The Board may amend, suspend or terminate the Plan or any portion
thereof at any time, provided that no amendment shall be made without
shareholder approval if such approval is necessary to comply with any applicable
tax or regulatory requirement, including any requirement for exemptive relief
under Section 16(b) of the Securities Exchange Act of 1934, or any successor
provisions.
(e) Awards may not be made under the Plan after May 7, 2000, but then
outstanding Awards may extend beyond such date.
B-6
<PAGE> 30
EXHIBIT C
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 1995
NORTH AMERICAN BIOLOGICALS, INC.
The undersigned, having received the Notice of Annual Meeting of
Stockholders and the Board of Directors' Proxy Statement (the "Proxy
Statement"), hereby appoint(s) Alfred J. Fernandez and Lorraine M. Breece, and
each of them, Proxies of the undersigned (with full power of substitution) to
attend the Annual Meeting of Stockholders of North American Biologicals, Inc. to
be held May 26, 1995, and all adjournments thereof (the "Meeting"), and there to
vote all shares of Common Stock of North American Biologicals, Inc. that the
undersigned would be entitled to vote, if personally present, in regard to all
matters which may come before the meeting.
The undersigned hereby confer(s) upon the Proxies, and each of them,
discretionary authority (i) to consider and act upon such business, matters or
proposals other than the business set forth below as may properly come before
the Meeting and (ii) with respect to the election of directors in the event that
any of the nominees is unable or unwilling to serve. THE PROXY WHEN PROPERLY
EXECUTED WILL BE VOTED IN THE MANNER SPECIFIED HEREIN. IF NO SPECIFICATION IS
MADE, THE PROXIES INTEND TO VOTE FOR EACH PROPOSAL AND FOR ALL NOMINEES FOR
DIRECTOR.
Please mark vote as in this example. /X/
1. For the election of all nominees listed below (except as otherwise
indicated).
/ / FOR all nominees / / WITHHOLD from all nominees
NOMINEES: Paul Bogikes, David L. Castaldi, David J. Gury, Richard A. Harvey, Jr.
and David A. Thompson
- - --------------------------------------------------------------------------------
FOR all nominees, except those listed on the line above
2. Approval of the adoption of the Stock Plan for Non-Employee Directors, as
more fully described in the Proxy Statement.
/ / FOR / / AGAINST / / ABSTAIN
3. Approval of an amendment to the Company's 1990 Equity Incentive Plan to
increase the total number of shares of Common Stock which may be awarded
under such plan by 775,000 shares, as more fully described in the Proxy
Statement.
/ / FOR / / AGAINST / / ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS,
WHICH RECOMMENDS APPROVAL OF THE FOREGOING PROPOSALS
Mark here for address change
and note below. / /
------------- --------
Signature Date
------------- --------
Signature Date
In signing, please write
name(s) exactly as appearing
in the imprint on this card.
For shares held jointly, each
joint owner should sign. If
signing as executor, or in
any other representative
capacity, or as an officer of
a corporation, please
indicate your full title as
such.
