SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the Appropriate Box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or 240.14a-12
THERMOGENESIS CORP.
(Name of Registrant as Specified in Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
________________________________________________________
2) Aggregate number of securities to which transaction applies:
_________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and how it was determined):
_______________________________________________________
4) Proposed maximum aggregate value of transaction: _______________
5) Total Fee Paid: ____________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ___________________
2) Form, Schedule, or Registration No. _________
3) Filing Party: _____________________________
4) Date Filed: ______________________________
<PAGE>
THERMOGENESIS CORP.
3146 Gold Camp Drive
Rancho Cordova, California 95670
(916) 858-5100
To the Stockholders of THERMOGENESIS CORP.:
You are invited to attend the Annual Meeting of Stockholders of
THERMOGENESIS CORP. ("Company") to be held on February 2, 1998 at 10:00 a.m.,
PST, at the Sheraton Hotel, located at 11211 Point East Drive, Rancho Cordova,
California 95742.
The accompanying Notice of the Annual Meeting of Stockholders and Proxy
Statement contain the matters to be considered and acted upon, and you should
read that material carefully.
The Proxy Statement contains important information concerning the
election of the Board of Directors, approval of an Employee Equity Incentive
Plan, and such other matters as may properly come before the meeting, including
adjournment of the meeting. I urge you to give these matters your close
attention since they are of great significance to the Company and its
Stockholders.
We hope you will be able to attend the meeting, but, if you cannot do so,
it is important that your shares be represented. Accordingly, we urge you to
mark, sign, date and return the enclosed proxy promptly. You may, of course,
withdraw your proxy if you attend the meeting and choose to vote in person.
Sincerely,
Philip H. Coelho
Chief Executive Officer
December 10, 1997
<PAGE>
THERMOGENESIS CORP.
3146 Gold Camp Drive
Rancho Cordova, CA 95670
(916) 858-5100
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 2, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of THERMOGENESIS
CORP., a Delaware corporation ("Company"), will be held on February 2, 1998 at
10:00 a.m. (PST), at the Sheraton Hotel, located at 11211 Point East Drive,
Rancho Cordova, California 95742, for the following purposes, all of which are
more completely discussed in the accompanying Proxy Statement:
1. To elect five (5) directors to serve one year terms or until their
successors have been elected and qualified;
2. To adopt an employee equity incentive plan; and
3. To transact such other business as may properly come before the
meeting or any adjournments of the meeting.
Only Stockholders of record at the close of business on December 8, 1997 are
entitled to notice of, and to vote at, the Annual Meeting of Stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
Charles de B. Griffiths
Secretary
December 10, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THERMOGENESIS CORP.'S ANNUAL MEETING OF
STOCKHOLDERS. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE
NUMBER YOU OWN. EVEN IF YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING YOU ARE
URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE EITHER IN PERSON
OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT
ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
PROXY STATEMENT
OF
THERMOGENESIS CORP.
3146 GOLD CAMP DRIVE
RANCHO CORDOVA, CA 95670
(916) 858-5100
INFORMATION CONCERNING THE SOLICITATION OF PROXIES
This Proxy Statement is furnished to the Stockholders of THERMOGENESIS CORP.
("Company") in connection with the solicitation of proxies on behalf of the
Company's Board of Directors for use at the Company's Annual Meeting of
Stockholders (the "Meeting") to be held on February 2, 1998 at 10:00 a.m.
(PST), at the Sheraton Hotel, located at 11211 Point East Drive, Rancho
Cordova, California 95742, and at any and all adjournments thereof. A copy of
the Company's Annual Report for the year ended June 30, 1997 accompanies this
Proxy Statement. Only Stockholders of record on December 8, 1997 will be
entitled to notice of, and to vote at, the Meeting.
The proxy solicited hereby, if properly signed and returned to the Company and
not revoked prior to its use, will be voted at the Meeting in accordance with
its instructions. If no contrary instructions are given, each proxy received
will be voted "FOR" the nominees for the Board of Directors and "FOR" the
approval of proposal 2, and at the proxy holders' discretion, on such other
matters, if any, which may properly come before the Meeting (including any
proposal to adjourn the Meeting). Any Stockholder giving a proxy has the power
to revoke it at any time before it is exercised by (i) filing with the Company
written notice of its revocation addressed to Secretary, THERMOGENESIS CORP.,
3146 Gold Camp Drive, Ranch Cordova, California 95670, or (ii) submitting a
duly executed proxy bearing a later date, or (iii) appearing at the Meeting and
giving the Secretary notice of his or her intention to vote in person prior to
submission of any matter to vote.
The Company will bear the entire cost of preparing, assembling, printing and
mailing proxy materials furnished by the Board of Directors to Stockholders.
Copies of proxy materials will be furnished to brokerage houses, fiduciaries
and custodians to be forwarded to beneficial owners of the Company's common
stock. In addition to the solicitation of proxies by use of the mail, some of
the officers, directors, employees and agents of the Company may, without
additional compensation, solicit proxies by telephone or personal interview,
the cost of which the Company will also bear.
This Proxy Statement and form of proxy were first mailed to Stockholders on or
about December 10, 1997.
RECORD DATE AND VOTING RIGHTS
The Company is authorized to issue up to 50,000,000 shares of common stock, par
value $0.001, and 2,000,000 shares of preferred stock, par value $0.001. As of
November 12, 1997, there were 15,970,919 shares of common stock issued and
outstanding. No shares of preferred stock are outstanding. Each share of
common stock shall be entitled to one vote on all matters submitted for
Stockholder approval, including the election of directors. The record date for
determination of Stockholders entitled to notice of and to vote at the Meeting
is December 8, 1997. The Company's Certificate of Incorporation does not
provide for cumulative voting. Under Delaware law, abstentions and broker non-
votes will be counted for purposes of determining quorum to open the meeting,
but will not be counted for or against any proposal submitted.
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<PAGE>
PROPOSAL ONE: ELECTION OF DIRECTORS
The Company's Amended and Restated By-laws ("By-laws") currently provide for
the annual election of all directors. The authorized number of directors of the
Company is stipulated in Article III, Section 2 of the Company's Bylaws as not
less than three (3) nor more than seven (7). The Board of Directors has fixed
the number of directors to be elected at the annual meeting at five (5),
pursuant to the authority vested in them by the Bylaws.
In the event that any of the nominees should unexpectedly decline or be
unavailable to act as a director, the enclosed proxy may be voted for a
substitute nominee to be designated by the Board of Directors. The Board of
Directors has no reason to believe that any nominee will become unavailable and
has no present intention to nominate any person in addition to, or in lieu of,
those named below.
NOMINEES FOR DIRECTOR
The following table sets forth the persons nominated by the Board of Directors
for election as directors and certain information with respect to those
persons.
<TABLE>
<CAPTION>
NOMINEE AGE DIRECTOR COMMON STOCK PERCENT
SINCE OWNERSHIP{(1)} OWNERSHIP
<S> <C> <C> <C> <C>
Philip H. Coelho 53 1986 584,500{(2)} 3.42%
Chief Executive
Officer
James Godsey 46 N/A 66,667{(3)} *%
President & Chief
Operating Officer
Charles de B.Griffiths 47 1989 507,500{(4)} 2.97%
V.P. Marketing & Sales,
Corporate Secretary
Patrick McEnany 50 1997 105,829{(5)} *%
Hubert Huckel, M.D. 66 1997 47,000{(6)} *%
Officers and Directors
as a group (7) 1,481,496{(7)} 8.68%
</TABLE>
Footnotes to Table
* Less than 1%.
{(1)} For computation purposes, the ownership includes only options
exercisable, as adjusted for the June 14, 1996 one-for-two stock
consolidation, on or before November 25, 1997. The total outstanding
includes shares assumed exercised for percentage ownership computation.
{(2)} Includes rights to purchase 175,000 common shares at $2.32 per share and
200,000 common shares at $2.125 per share pursuant to stock options
granted December 31, 1993, and October 23, 1995, respectively, and
50,000 common shares granted on May 29, 1996 and repriced on April 2,
1997 at $2.3125 per share.
{(3)} Includes rights to purchase 200,000 common shares at $2.969 per share
pursuant to stock options granted on November 24, 1997 of which only
66,667 are vested and immediately exercisable.
{(4)} Includes rights to purchase 125,000 common shares at $2.32 per share and
100,000 common shares at $2.125 per share pursuant to stock options
granted December 31, 1993 and October 23, 1995, respectively. Also
includes 257,500 common shares held by the Beaufort Trust for the benefit
of Mr. Griffiths. Although he is the beneficiary of the trust, Mr.
Griffiths has no voting or dispositive power over the 257,500 shares held
in trust.
{(5)} Includes rights to purchase 40,000 shares at $3.3125 per share pursuant
to stock options granted on May 29, 1997. Also includes 25,829 shares
owned by Equisource Capital of which Mr. McEnany is the sole shareholder
and 2,500 shares owned by Mr. McEnany's wife, however, Mr. McEnany
disclaims beneficial ownership of the shares owned by his wife.
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<PAGE>
{(6)} Includes rights to purchase 40,000 shares at $3.3125 per share pursuant
to stock options granted on May 29, 1997.
{(7)} Includes rights to purchase 120,000 shares at $2.3125 per share pursuant
to stock options granted to David Adams, V.P. Business Development, on
April 2, 1997 and rights to purchase 50,000 shares at $2.3125 per share
pursuant to stock options granted to Michael Zmuda, V.P. Regulatory
Affairs, on April 2, 1997.
BACKGROUND OF NOMINEES.
The following is the business background for director nominees of the Company:
PHILIP H. COELHO was named President of the Company on September 1989, and
currently serves as Chief Executive Officer and Chairman of the Board. From
October 1986 to September 1989, Mr. Coelho was Vice President and Director of
Research, Development and Manufacturing. Mr. Coelho was President of
Castleton, Inc. from October 1983 until October 1986. Castleton developed and
previously licensed the Insta Cool Technology to the Company. Mr. Coelho has a
Bachelor of Science degree in Mechanical Engineering from the University of
California, Davis, and is the inventor or co-inventor on all of the Company's
patents.
JAMES H. GODSEY, PH.D. joined the Company as its new President and Chief
Operating Officer in November 1997. Previously, Dr. Godsey was with Dade
MicroScan, a division of DADE BEHRING INC., where he was Vice President of
Planning and Technology Integration, responsible for technology assessment
activities, including the evaluation and acquisition of other medical device
companies and medical device products. Dr. Godsey also served as Product Line
General Manager of Dade MicroScan Inc. and Bartels Diagnostics Inc. from August
1993 to June 1995, overseeing annual product sales of $150 million and served
as Vice President of Research & Development from February 1987 to August 1993.
Dr. Godsey received his Doctorate in Bacterial Physiology from St. John's
University in New York, a Masters of Science in Bacterial Physiology from the
University of Missouri, a Bachelor of Science from Southeast Missouri State
University and is a candidate for a Masters of Business Administration from the
University of Phoenix.
CHARLES DE B. GRIFFITHS was elected to the Board of Directors in December 1989,
became Director of International Sales in January 1990 and currently serves as
V.P. of Marketing and Sales. He is a Chartered Accountant and holds a degree
in Economics from the University of Manchester, U.K. From January 1980 until
December 1987 he was the Managing Director of a number of successful overseas
manufacturing subsidiaries of the Cloride Group, including a $25,000,000 joint
venture with the government of Egypt which he steered to profitability in its
first year of operation. In his last appointment with Cloride he was in charge
of the Scandinavian manufacturing operations based in Denmark and was
concurrently responsible for all European automotive marketing activities. Mr.
Griffiths is an internationally oriented businessman with appropriate
experience in industrial marketing and manufacturing enhanced by studies at
Harvard and Cranfield Bus consulting practice in the United Kingdom from
January 1988 until December 1989.
PATRICK MCENANY has been the President of Royce Laboratories since June 1991
and its Chairman since February 1994. In April 1997, Royce Laboratories merged
with and became a subsidiary of Watson Pharmaceuticals, Inc. Mr. McEnany
continues to serve as President of Royce Laboratories as well as the V.P. of
Corporate Development for Watson Pharmaceuticals, Inc. From 1973 to 1985, Mr.
McEnany was the President, Chief Executive Officer and Chief Financial Officer
of Zenex Synthetic Lubricants, Inc. ("Zenex"), a company engaged in the
distribution of synthetic lubricants. In February 1985, Zenex merged with Home
Intensive Care, Inc. ("HIC"), a provider of home infusion therapy services and
Mr. McEnany continued to serve as a director and chairman of the audit
committee until HIC was acquired by WR Grace & Co. in 1993. From December 1984
through 1991, Mr. McEnany also served as the President of Equisource Capital,
Inc., a consulting company in the areas of corporate finance and investment
banking. He currently serves as Vice Chairman and director of the National
Association of Pharmaceutical Manufacturers. Mr. McEnany was a director of the
Company in 1991.
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<PAGE>
HUBERT E. HUCKEL, M.D. currently serves as a member of the Board of Directors
of Sano Corp., a Florida based company active in the field of transdermal
delivery systems for prescription drugs, and for Titan Pharmaceuticals, a South
San Francisco based company providing biotechnology products for the treatment
of neurological diseases and malignancies. In 1964, Dr. Huckel joined Hoechst
A.G., a Frankfurt, Germany based chemical-pharmaceutical company ranking in the
top 5 of such companies world wide. Dr. Huckel later moved to Hoechst U.S.
subsidiaries in 1966 where he held various operations and executive management
positions, advancing to Chairman of Hoechst Roussel Pharmaceutical, Inc.,
president of the Life Sciences Group, and member of the Executive Committee at
Hoechst Celanese Corp., a Fortune 100 company. Dr. Huckel earned his medical
degree from the University of Vienna, Austria, in 1956.
VOTE REQUIRED
A plurality of votes of the shares of common stock present or represented and
voting at the meeting is required to elect the nominees submitted.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR ALL NOMINEES FOR THE
BOARD OF DIRECTORS.
PROPOSAL TWO: APPROVAL OF EQUITY INCENTIVE PLAN
The Company believes it to be in the best interests of the Company and its
employees to adopt an equity incentive plan ("Plan") in order to attract and
retain experienced and qualified personnel. There will be 798,000 shares
underlying the Plan.
The following is a summary of the principal provisions of the Plan. This
summary is not intended to be a complete description of all terms and
provisions of the Plan. A complete copy of the Plan is attached hereto as
Exhibit A.
ADMINISTRATION. The Plan is administered by the Compensation Committee
consisting or two or more disinterested Board members ("Committee"). The
Committee is responsible for the operation of the Plan and, subject to the
terms thereof, makes all determinations regarding (i) participation in the Plan
by employees of the Company or subsidiaries and (ii) the nature and extent of
such participation. The interpretation and construction of any provisions of
the Plan by the Committee shall be final. The Board may at any time remove a
Committee member and appoint a successor, provided the successor is a
disinterested Board member.
Committee members shall serve without compensation, unless otherwise determined
by the Board, provided that the Company shall pay the expenses of such members
incurred in the administration of the Plan, subject to approval of the Board.
Currently, the Board has directed that each Committee member receive $500 for
each meeting attended in person ($250 if by telephonic conference).
ELIGIBILITY. The Plan provides for the grant of Incentive Stock Options
("ISO"), within the meaning of the Internal Revenue Code of 1986, as amended
("Code") to employees of the Company, including directors and officers who are
also employees ("Participants"). All other awards may be granted to employees,
officers, directors, consultants, independent contractors and advisors of the
Company; provided such consultants, contractors and advisors render bona fide
services in connectition with the Company's operations.
TERMS OF OPTIONS. Each option will be evidenced by an Award Agreement between
the Company and the Participant to whom such option may be granted which will
expressly identify the option as an ISO or a Non-qualified Stock Option
("NQSO"). Options granted under the Plan shall have a term of up to 5 years,
and no ISO granted to a person who directly or by attribution owns more than
10% of the total combined voting power of stock of the Company will be
exercisable after the expiration of 5 years from the date the ISO is granted,
as determined by the Committee, and shall be subject to the following
additional terms and conditions.
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<PAGE>
EXERCISE OF OPTIONS. Options shall become exercisable during a period or during
such periods as the Committee shall determine and may be specifically
conditioned upon achieving specified events. An option may be exercised by
giving written notice in the form of a stock option exercise agreement
("Exercise Agreement") to the Company, specifying the number of full shares to
be purchased, the restrictions imposed on the shares purchased under the
Exercise Agreement, if any, and such representations and agreements regarding
Participants investment intent and access to information, if any, as may be
required to comply with applicable securities laws and tendering payment to the
Company of the purchase price. The Committee may, in its discretion, allow a
participant to pay the option price by other methods permitted by law as
determined by the Committee, including by execution of a promissory note
evidencing the debt on such terms and conditions determined by the Committee
bearing interest at a rate sufficient to avoid imputation of income under
<section><section> 483 and 1274 of the Code. However, Participants who are not
employees or directors of the Company will not be entitled to purchase shares
with a promissory note.
OPTION EXERCISE PRICE. The option price will be determined by the Committee on
the date the options are granted and may not be less than 85% of the fair
market value of the shares on the date of grant; provided that the exercise
price of an ISO will not be less than 100% of the fair market value of the
shares on the date of grant and the exercise price of an ISO granted to a 10%
shareholder will not be less than 110% of the fair market value of shares on
the date of grant.
TERMINATION OF STATUS AS AN EMPLOYEE OR DIRECTOR. If the Participant ceases to
serve as an employee, officer or director of the Company, the options held by
the optionee may be exercised within 90 days after the date he ceases to be an
employee, officer or director as to all or parercise at the date of such
termination and after such 90-day period all unexercised options shall
terminate. Notwithstanding the foregoing, in no event may an option be
exercised after its term has expired. The Committee, in its discretion may
lengthen the period of time up to 5 years after the Termination Date, however,
any exercise beyond 3 months of the Termination Date shall be deemed an NQSO.
DEATH OR DISABILITY. If a Participant is terminated due to death or disability,
the options held by the Participant may be exercised by the Participant or
Participant's legal representative or authorized assignee at any time within 12
months after the death or disability and shall terminate thereafter. If a
Participant should die within three months after ceasing to serve as an
employee, officer or director of the Company, the options may be exercised
within 12 months after the death to the extent the option was exercisable on
the date of such death. Notwithstanding the foregoing, in no event may an
option be exercised after its term has expired. The Committee, in its
discretion, may lengthen the term up to 5 years, however, any exercise after 12
months from the Termination Date shall be deemed an NQSO.
SUSPENSION OR TERMINATION OF OPTIONS. No option shall be exercisable by any
person after its expiration date. If the Committee reasonably believes that a
participant has committed an act of misconduct, the Committee may suspend the
Participant's right to exercise any option pending a final determination by the
Committee. If the Committee determines that a Participant has committed an act
of theft, embezzlement, fraud, dishonesty, or breach of fiduciary duty, such
options may be immediately terminated. In making such a determination, the
Committee shall act fairly and in good faith and shall give the Participant an
opportunity to appear and present evidence on the Participant's behalf at a
hearing before the Committee. The determination of the Committee shall be final
and conclusive unless overruled by the Board of Directors.
NONTRANSFERABILITY OF OPTIONS. Awards are not transferable or assignable other
than by will or the laws of descent and distribution, and are exercisable only
by the Participant during his or her lifetime or, in the event of death, by
the executors, administrators, legatees or heirs of his or her estate during
the time period provided above.
HOLDING REQUIREMENTS. To the extent required by Rule 16b-3, as promulgated
under Section 16(b) of the Securities Exchange Act of 1934, as amended, all
participants who are officers or directors of the Company shall not be entitled
to transfer any shares of common stock received upon the exercise of the
options granted under the Plan for a period of six months from the date the
options were granted.
OTHER PROVISIONS. The Award Agreement may contain such other terms, provisions
and conditions not inconsistent with the Plans as may be determined by the
Committee.
-5-
<PAGE>
ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of the proposed
dissolution or liquidation of the Company, any and all outstanding awards may
be assumed converted or replaced by the successor corporation, if any, which
conversion or replacement will be binding on all Participants. In the
alternative, the successor corporation may substitute equivalent awards or
provide substantially similar consideration to Participants as was provided to
shareholders, the sale of all or substantially all of the Company's assets or
the merger of the Company with or into another corporation. In the event such
successor corporation, if any, refuses to assume or substitute awards, such
awards will expire on such transaction at such time and on such conditions as
the Board will determine.
RESTRICTED STOCK. The Committee in its discretion may impose restrictions on
the stock award, and may provide for the lapse of such restrictions in
installments and may waive or accelerate such restrictions, based on criteria
determined by the Committee.
STOCK BONUS. At the discretion of the Committee, a stock bonus may be awarded
for services rendered to the Company. The award of shares may be in Restricted
Stock. The Committee may award more than 1 stock bonus to a Participant and
each award may be subject to different performance criteria. If a Participant
is terminated during a performance period, such Participant will be entitled to
payment (whether in shares, cash, or otherwise) with respect to the stock bonus
only to the extent earned as of the termination date in accordance with the
Performance Stock Bonus Agreement, unless determined otherwise by the
Committee.
AMENDMENT AND TERMINATION. The Board of Directors may amend the Plan at any
time or from time to time; provided, however, that the Board will not, without
the approval of the shareholders of the Company, amended this Plan in any
manner that requires such shareholder approval pursuant to the Code or the
regapply to ISO plans.
VOTE REQUIRED
The affirmative vote of the majority of shares present or represented and
voting at the Meeting is required to approve Proposal Two.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE
ADOPTION OF THE 1998 EQUITY INCENTIVE PLAN WITH 798,000 SHARES AVAILABLE TO BE
GRANTED UNDER THE PLAN.
EXECUTIVE COMPENSATION OF MANAGEMENT, OWNERSHIP OF CERTAIN
STOCKHOLDERS, AND CERTAIN RELATED TRANSACTIONS
The following table sets forth certain information with respect to executive
officers of the Company at fiscal year end.
NAME POSITIONS WITH THE COMPANY AGE OFFICE HELD SINCE
Philip H. Coelho Chief Executive Officer 54 1989{(1)}
Walter J. Ludt Chief Operating Officer 54 1995{(2)}
Charles Griffiths V.P. Marketing and Secretary 48 1990
David C. Adams V.P. Business Development
and General Counsel 40 1996
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<PAGE>
NAME POSITIONS WITH THE COMPANY AGE OFFICE HELD SINCE
Michael Zmuda, PhD V.P. Regulatory Affairs
and Quality Systems 60 1997
Roger Kane Director of Resrch and Develop 50 1996
Renee Ruecker Director of Finance 33 1997
NOTES TO TABLE
{(1)} Prior to becoming President, Mr. Coelho served as Vice President and
Director of Research, Development and Manufacturing from October 1986 to
September 1989.
{(2)} Mr. Ludt resigned from his position as Chief Operating Officer in
November 1997.
Executive officers are elected annually by the Board of Directors and serve at
the pleasure of the Board. Messrs. Coelho, Griffiths, Adams, Zmuda and Dr.
Godsey have entered into employment agreements with the Company. There is no
family relationship between any of the officers and directors. Mr. Coelho is a
member of the Board of Directors of Patient Education Media, Inc. Mr. McEnany
is currently a member of the Royce Laboratories Board of Directors and Dr.
Huckel is a member of the Sano Corporation and Titan Pharmaceuticals, Inc.
Board of Directors.
The biographies of Messrs. Coelho, Griffiths and Dr. Godsey can be found on
page 3.
Mr. Ludt rejoined the Company as its Chief Operating Officer and V.P. in
February 1995. In November 1997, he resigned his position as Chief Operating
Officer, Vice President and Director of the Company. From March 1994 until
February 1995, Mr. Ludt was a consultant (acting Chief Financial Officer) to
the Omohundro Company, a manufacturer of state of the art carbon fiber spars
for sail boats, where he was instrumental in raising $5,000,000 in capital and
restructuring $2,500,000 in bank debt. From June 1992 to February 1994, Mr.
Ludt was Vice President and Chief Financial Officer of Protel Technology, a
developer and marketer of sophisticated EDA software. Prior to June 1992, Mr.
Ludt was a Director, Chief Financial Officer, and Secretary of the Company. Mr.
Ludt holds a Bachelor of Science Degree in Business/Accounting from California
State University at Long Beach.
Mr. Adams joined the Company at the end of November 1996 as General Counsel,
and filled the newly created position of V.P. of Business Development. Prior
to joining the Company, Mr. Adams was in private practice representing public
and private corporations in the areas of intellectual property, corporate
finance, mergers and acquisitions, and regulatory matters. Mr. Adams received
his Bachelor of Arts Degree in Psych Distinction, from the University of
Colorado, Colorado Springs in 1984, and his Juris Doctorate, with Distinction,
from the University of the Pacific, McGeorge School of Law in 1988.
Dr. Zmuda joined the Company in February 1997 as V.P. of Regulatory Affairs and
Quality Systems. After serving as Assistant Professor of Pharmacology at
Southern Illinois University School of Medicine for five years, Dr. Zmuda
worked at Baxter-Travenol Laboratories, CD Medical, Inc., and American
Sterilizer Company ("AMSCO"). Prior to joining the Company, Dr. Zmuda held the
position of Director of Regulatory Affairs at AMSCO from 1989 through 1996 when
AMSCO merged with Steris Corporation. Dr. Zmuda received his Bachelor of Arts
Degree in Psychology in 1969, and his Physical Doctorate in Pharmacology in
1975, both from the University of Minnesota.
Mr. Kane joined the Company in December 1996 as Director of Research and
Development. Previously he worked as the Director of Product Development and
Manufacturing for Integrated Surgical Systems, a position he had held since
1994. From 1993 through 1994, Mr. Kane was a private Consultant to a start-up
business that had designed a proprietary anesthesia delivery system, and from
1986 through 1993, Mr. Kane served as V.P. of Engineering for Bear Medical
Systems in Southern California. Mr. Kane received his Bachelor of Science
Degree in Electrical Engineering from Ohio State University in 1970 and his
Masters Degree in Business Administration from the University of Wisconsin in
1984.
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<PAGE>
Ms. Ruecker joined the Company in August 1997 as Director of Finance. Prior to
joining the Company, Ms. Ruecker was a manager in the Audit and Business
Advisory Department at Price Waterhouse LLP. Her clients included a number in
the science and health industries. A Certified Public Accountant, Ms. Ruecker
received her Bachelor of Arts Degree in Business Administration from the
California Polytechnic State University in San Luis Obispo.
CERTAIN LEGAL PROCEEDINGS
Except for Mr. McEnany, none of the executive officers or directors has been
involved in any material legal proceeding within the past five years. While
Chairman and President of Royce Laboratories (1991 - 1997), Mr. McEnany
responded to a formal investigation by the Securities and Exchange Commission
against Royce Laboratories and its officers and directors related to certain of
Royce Laboratories' disclosure in February 1993. The matter was resolved in
May 1996 when Royce Laboratories and Mr. McEnany entered into a settlement with
the SEC, without admitting or denying that a violation of the securities laws
had occurred. As part of the settlement, Royce Laboratories and Mr. McEnany
consented to a civil injunction requiring that they comply with the federal
securities laws in the future. The Company does not believe that the substance
of the consent decree or the injunction will affect Mr. McEnany's ability as a
director of the Company.
BOARD MEETINGS
During the fiscal year ended June 30, 1997, the Board took action 24 times, by
meeting or consent. All directors were either present at the meeting or
consented in writing to the action. The Compensation Committee also took
action on 4 occasions, by meeting or consent, during the fiscal year ended June
30, 1997. All members of the Compensation Committee were present or consented
to the actions in writing. The Audit Committee met once, and all members of
that committee were present at the meeting.
BOARD COMMITTEES
The Company currently has a Compensation Committee, an Executive Committee and
an Audit Committee.
At fiscal year end, the Audit Committee consisted of two non-employee
directors, Patrick McEnany and Dr. Hubert Huckel. The Audit Committee
coordinates and oversees the Company audit performed by outside auditors.
The Compensation Committee consisted of two non-employee directors, Patrick
McEnany and Dr. Hubert Huckel. The Compensation Committee reviews and approves
the executive compensation policies and determines employee option grants. The
following report submitted by the Compensation Committee describes the
compensation policies and rationales applicable to the Company's executive
officers with respect to the compensation paid to such executive officers for
the fiscal year ended June 30, 1997.
COMPENSATION OF THERMOGENESIS CORP. MANAGEMENT
The Compensation Committee ("Committee") of the Board of Directors is
responsible for the Company's compensation, benefits, and stock option grants
for executive officers. The Committee is composed entirely of independent
outside directors. The following is the Committee's report on executive
compensation.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
Compensation Philosophy
The Committee continues to emphasize the important link between the Company's
performance, which ultimately benefits all shareholders, and the compensation
of its executives. Therefore, the primary goal of the Company's executive
compensation policy is to closely align the interests of the shareholders with
the interests of the executive officers. In order to achieve this goal, the
Company attempts to (i) offer compensation opportunities that attract and
retain executives whose abilities and skills are critical to the long-term
success of the Company and reward them for their efforts in ensuring the
success of the Company and (ii) encourage executives to manage from the
-8-
<PAGE>
perspective of owners with an equity stake in the Company. The Company
currently uses three integrated components - Base Salary, Incentive
Compensation and Stock Options - to achieve these goals. More recently, the
Committee has begun to focus more on principles of pay for performance and
stock ownership, through option grants, to provide adequate incentive for
completing tasks and operational hurdles the Company is facing. The following
outlines the overall compensation components.
Base Salary
The Base Salary component of total compensation is designed to compensate
executives competitively within the industry and the marketplace. The Committee
reviewed and approved an employment agreement for Mr. Adams in December 1996,
Dr. Zmuda in February 1997, and Dr. Godsey in November 1997. Base Salaries of
the executive officers are established by the Committee based upon Committee
compensation data, the executive's job responsibilities, level of experience,
individual performance and contribution to the business. Executive officer
salaries have been targeted at slightly below average rates paid by competitors
and other public companies in the area. In order to evaluate the Company's
competitive posture in the industry, the Committee reviewed and analyzed the
compensation packages, including base salary levels, offered by other public
companies in the Sacramento area and Northern California generally. The
competitive information was obtained from published reports and proxy
statements prepared by those companies. In making base salary decisions, the
Committee exercised its discretion and judgment based upon the above-mentioned
factors and did not apply any specific formula to determine the weight of any
one factor.
Incentive Bonuses
The Incentive Bonus component of executive compensation is designed to reflect
the Committee's belief that a portion of the compensation of each executive
officer should be contingent upon the performance of the Company, as well as
the individual contribution of each executive officer. The Incentive Bonus is
intended to motivate and reward executive officers by allowing the executive
officers to directly benefit from the success of the Company. Messrs. Coelho
and Griffiths are entitled to receive up to one half of one percent of the
Company's net profits, provided however, that such incentive compensation does
not exceed ten percent of the executive officer's annual Base Salary, i.e., no
more than $12,000 - $15,000. Dr. Godsey was provided with an initial bonus of
$50,000 upon joining the Company to entice him to join the Company immediately,
and his contract provides for a discretionary bonus of up to 35% of his base
salary which will be determined by the Committee based on performance criteria
and Company performance during the year.
Long Term Incentives
The Committee provides the Company's executive officers with long-term
incentive compensation in the form of stock option grants under the Company's
Amended 1994 Stock Option Plan. The Committee believes that stock options
provide the Company's executive officers with the opportunity to purchase and
maintain an equity interest in the Company and to share in the appreciation of
the value of the Company's Common Stock. The Committee believes that stock
options directly motivate an executive to maximize long-term shareholder value.
All options granted to executive officers to date have been granted at the fair
market value of the Company's Common Stock on the date of grant, except for the
repricing of options granted to Messrs. Coelho and Ludt on May 29, 1996 which
were repriced on April 2, 1997. The Committee considers each option
subjectively, considering factors such as the individual performance of the
executive officer and the anticipated contribution of the executive officer to
the attainment of the Company's long-term strategic performance goals. Stock
Options granted in prior years are also taken into consideration.
In conclusion, the Committee believes that the Company's current needs and the
competitive local market warrant the compensation packages approved for the
executive officers to date.
Respectfully Submitted,
THERMOGENESIS CORP. COMPENSATION COMMITTEE
Hubert Huckel, M.D., Chairman
Patrick McEnanay
-9-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation paid in the past
three years for all services of the named Executive Officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
<S> <C> <C> <C> <C> <C> <C>
OTHER AL
NAME AND PRINCIPAL ANNUAL RESTRICTED STOCK OPTIONS GRANTED
POSITION YEAR SALARY BONUS COMP. AWARD(S)
Philip H. Coelho, 1995 $ 110,000 $ 0 $ 27,296{(1)} $ 0 -0-
President & CEO 1996 $ 110,000 $ 0 $ 27,296{(2)} $ 0 250,000{(4)}
1997 $ 160,000 $ 0 $ 52,764{(3)} $ 0 -0-
Charles deB Griffiths 1995 $ 80,000 $ 0 $ 12,000{(5)} $ 0 -0-
V.P. Marketing/Sales 1996 $ 110,000 $ 0 $ 21,512{(6)} $ 0 100,000{(8)}
1997 $ 120,000 $ 0 $ 31,781{(7)} $ 0 -0-
Walter J. Ludt, III, 1995 $ 80,000 $ 0 $ 7,200{(9)} $ 0 -0-
Chief Operating Officer 1996 $ 100,000 $ 0 $ 14,253{(10)} $ 0 150,000{(12)}
Chief Financial Officer 1997 $ 120,000 $ 0 $ 9,600{(11)} $ 0 -0-
</TABLE>
{(1)} Represents payments of $7,200 annual automobile allowance and $20,096 in
accrued vacation pay.
{(2)} Represents payments of $7,200 annual automobile allowance and $20,096 in
accrued vacation pay.
{(3)} Represents payments of $12,000 annual automobile allowance and $40,764
in accrued vacation pay.
{(4)} Includes 200,000 stock options granted on October 23, 1995, and 50,000
stock options granted on May 29, 1996 which were repriced on April 2,
1997 to $2.3125 per share.
{(5)} Represents payments of $12,000 annual automobile allowance.
{(6)} Represents payments of $9,000 annual automobile allowance and $12,512 in
accrued vacation pay.
{(7)} Represents payments of $9,600 annual automobile allowance and $22,781 in
accrued vacation pay.
{(8)} Includes replacement option of 100,000.
{(9)} Represents payments of $7,200 annual automobile allowance.
{(10)}Represents payments of $8,100 annual automobile allowance and $6,153 in
accrued vacation pay.
{(11)}Represents payments of $9,000 annual automobile allowance.
{(12)}Includes 100,000 stock options granted on October 23, 1995, and 50,000
stock options granted on May 29, 1996 which were repriced on April 2,
1997 to $2.3125 per share.
______________________
EMPLOYMENT AGREEMENTS
In June 1996, the Company and Mr. Coelho entered into a new employment
agreement whereby Mr. Coelho agreed to serve as President and Chief Executive
Officer of the Company and receive compensation equal to $160,000 per year and
a $800 per month automobile allowance, subject to annual increases as may be
determined by the Board of Directors. The employment agreement may be
terminated by Mr. Coelho or by the Company with or without cause. In the event
Mr. Coelho is terminated by the Company without cause, Mr. Coelho will be
-10-
<PAGE>
entitled to receive severance pay equal to the greater of six months of his
annual salary or the remaining term of the agreement. In addition, the
employment agreement provides that in the event Mr. Coelho is terminated other
than "for cause" upon a change of control, Mr. Coelho shall be paid an amount
equal to three times his annual salary. The phrase "change of control" is
defined to include (i) the issuance of 33% or more of the outstanding
securities to any individual, firm, partnership, or entity, (ii) the issuance
of 33% or more of the outstanding securities in connection with a merger, or
(iii) the acquisition of the Company in a merger or other business combination.
The employment agreement expires by its terms in June 1999. In November 1997,
Mr. Coelho resigned his position as President.
In June 1996, the Company and Charles de B. Griffiths entered into a new
employment agreement whereby Mr. Griffiths agreed to serve as Vice-President of
Marketing and Sales of the Company and receive compensation equal to $120,000
per year and a $750 per month car allowance, subject to annual increases as may
be determined by the Board of Directors. The employment agreement may be
terminated by Mr. Griffiths or by the Company with or without cause. In the
event Mr. Griffiths is terminated by the Company without cause, Mr. Griffiths
will be entitled to receive severance pay equal to the greater of six months of
his annual salary, or the remaining term of the agreement. In addition, the
employment agreement provides that in the event Mr. Griffiths is terminated
following a change of control, Mr. Griffiths shall be paid an amount equal to
three times his annual salary. The phrase "change of control" is defined to
include (i) the issuance of 33% or more of the outstanding securities to any
individual, firm, partnership, or entity, (ii) the issuance of 33% or more of
the outstanding securities in connection with a merger, or (iii) the
acquisition of the Company in a merger or other business combination. The
employment agreement expires by its terms in June 1999.
In June 1996, the Company and Walter J. Ludt, III entered into an employment
agreement whereby Mr. Ludt agreed to serve as Chief Operating Officer and Chief
Financial Officer of the Company and receive compensation equal to $120,000 per
year and a $750 per month car allowance, subject to annual increases as may be
determined by the Board of Directors. The employment agreement may be
terminated by Mr. Ludt or by the Company with or without cause. In the event
Mr. Ludt is terminated by the Company without cause, he will be entitled to
receive severance pay equal to the greater of six months of his annual salary,
or the remaining term of the agreement. In addition, the employment agreement
provides that in the event Mr. Ludt is terminated following a change of
control, he shall be paid an amount equal to three times his annual salary. The
phrase "change of control" is defined he issuance of 33% or more of the
outstanding securities to any individual, firm, partnership, or entity, (ii)
the issuance of 33% or more of the outstanding securities in connection with a
merger, or (iii) the acquisition of the Company in a merger or other business
combination. The employment agreement expires by its terms in June 1999. In
November 1997, Mr. Ludt resigned his positions of Chief Operating Officer,
Chief Financial Officer and Director of the Company. Pursuant to a severance
agreement with the Company, Mr. Ludt terminated his employment and will receive
additional compensation and payment of premiums for medical benefits equal to
his current salary and benefits for a period of nine months from January 1,
1998.
In December 1996, the Company and Mr. Adams entered into an employment
agreement whereby Mr. Adams agreed to serve as Vice President of Business
Development and General Counsel of the Company and receive compensation equal
to $110,000 per year and a $650 per month automobile allowance, subject to
annual increases as may be determined by the Board of Directors. The
employment agreement may be terminated by mutual consent of the Company and Mr.
Adams or by the Company with or without cause. In the event Mr. Adams is
terminated by the Company without cause, Mr. Adams will be entitled to receive
severance pay equal to the greater of six months of his annual salary,
excluding any amounts for benefits or automobile allowance or an amount equal
to the then current per month Base Salary multiplied by the number of calendar
months remaining in the Agreement. In addition, the employment agreement
provides that in the event Mr. Adams is terminated other than "for cause" upon
a change of control, Mr. Adams will be paid an amount equal to three times his
annual salary. The phrase "change of control" is defined to include (i) the
issuance of 33% or more of the outstanding securities to any individual, firm,
partnership, or entity, (ii) the issuance of 33% or more of the outstanding
securities in connection with a merger, or (iii) the acquisition of the Company
in a merger or other business combination. The employment agreement expires by
its terms in November 1999.
-11-
<PAGE>
In February 1997, the Company and Michael Zmuda entered into an at-will
employment agreement whereby Dr. Zmuda agreed to serve as Vice President of
Regulatory Affairs and Quality Systems of the Company and receive compensation
equal to $90,000 per year and a $850 per month automobile allowance, subject to
annual increases as may be determined by the Board of Directors. The employment
agreement may be terminated by the Company with or without cause. In addition,
the employment agreement provides that in the event Dr. Zmuda is terminated
other than "for cause" upon a change of control, he will be paid an amount
equal to three times his annual salary. The phrase "change of control" is
defined to include (i) the issuance of 33% or more of the outstanding
securities to any individual, firm, partnership, or entity, (ii) the issuance
of 33% or more of the outstanding securities in connection with a merger, or
(iii) the acquisition of the Company in a merger or other business combination.
In November 1997, the Company entered into an employment agreement with Dr.
Godsey whereby Dr. Godsey agreed to serve as President and Chief Operating
Officer and receive compensation equal to $160,000 and a $500 per month
automobile allowance, subject to annual increases as may be determined by the
Board of Directors. Dr. Godsey is eligible to receive bonuses based on his
performance and the attainment of objectives established by the Company. Dr.
Godsey shall receive an initial bonus of $60,000 at the end of the first
anniversary of the employment agreement and thereafter, bonuses shall not
exceed thirty-five percent of his base salary in effect for that given year.
The employment agreement may be terminated prior to the expiration of the
agreement, upon the mutual agreement of the Company and Dr. Godsey. In
addition, the employment agreement provides that in the event Dr. Godsey is
terminated other than "for cause" upon a change of control, Dr. Godsey will be
paid an amount equal to three times his annual salary. The phrase "change of
control" is defined to include (i) the issuance of 33% or more of the
outstanding securities to any individual, firm, partnership, or entity, (ii)
the issuance of 33% or more of the outstanding securities in connection with a
merger, or (iii) the acquisition of the Company in a merger or other business
combination. The employment agreement expires by its terms in November 2000.
OPTIONS GRANTED IN LAST FISCAL YEAR
No options were granted to named executive officers during the last fiscal
year, however, the following options were repriced during the fiscal year ended
June 30, 1997. The repricing was to compensate those officers for entering into
lock-up agreements during financing in the 1996 fiscal year, which resulted in
the expiration of significant options exercisable at $0.53 per share. All
option grants and values have been adjusted to reflect the one-for-two stock
consolidation effected by the Company on June 14, 1996. No officers or
directors exercised any options during the year.
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Percent of
Total
Number of Granted to Potential Realized Value at
Securities Employees Assumed Annual Rates of Stock
Underlying in Fiscal Exercise Base Price Appreciation for
Options Year Price ($/sh) Expiration Term
Director Granted Date 10%($){(1)} 5%($){(1)}
<S> <C> <C> <C> <C> <C> <C>
Philip Coelho 50,000 4.2% $ 2.3125{(2)} 5/29/01 $ 31,947 $ 70,589
Walter Ludt 50,000 4.2% $ 2.3125{(3)} 5/29/01 $ 31,947 $ 70,589
</TABLE>
FOOTNOTES TO TABLE
{(1)}The 5% and 10% assumed rates of appreciation are mandated by the rules of
the Securities and Exchange Commission and do not represent the Company's
estimate or projection of future common stock prices, or actual performance.
{(2)}Options were repriced on April 2,1997 to $2.3125.
{(3)}Options were repriced on April 2, 1997 to $2.3125.
-12-
<PAGE>
TEN-YEAR OPTIONS/SAR REPRICINGS
<TABLE>
<CAPTION>
Number of Length of
Securities Original Option
Underlying Exercise Price at Term Remaining at
Options/ SARs Market Price of Time of Repricing Date of Repricing
Repriced or Stock at Time of or Amendment New Exercise or Amendment
Amended Repricing or Price
Name Date Amendment
<S> <C> <C> <C> <C> <C> <C>
Philip Coelho 4/2/97 50,000 $2.3125 $4.50 $2.3125 4 years 57 days
Walter Ludt 4/2/97 50,000 $2.3125 $4.50 $2.3125 4 years 57 days
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth executive officer options exercised and option
values for fiscal year 1997, as adjusted for the Company's one-for-two stock
consolidation effected June 14, 1996, for all fiscal year executive officers.
<TABLE>
<CAPTION>
Number of options Value of Unexercised
at FY end Options at FY End
Shares Acquired Value (Exercisable/ (Exercisable/
NAME OR EXERCISED REALIZED UNEXERCISABLE) UNEXERCISABLE){(1)}
<S> <C> <C> <C> <C>
Philip H. Coelho - - 425,000/ $ 235,275/
-0- $ -0-
Charles de B.
Griffiths - - 225,000/ $ 123,225/
-0- $ -0-
Walter Ludt, III - - 183,333/ $ 89,000/
-0- $ -0-
</TABLE>
FOOTNOTES TO TABLE
{(1)} Based on June 30, 1997 year end closing bid price of $2.781 per share.
-13-
<PAGE>
DIRECTORS COMPENSATION
All directors who are not employees of the Company are paid a meeting fee of
$1,000 per Board meeting attended in person ($500 for attendance by telephonic
conference). In addition, members of the Board's Compensation Committee receive
$500 per meeting attended in person ($250 for attendance by telephonic
conference) and options to purchase 4,000 shares of common stock upon
completion of each full year of service on such Committee pursuant to the
Amended 1994 Stock Option Plan. Members of the Audit and Executive Committees
receive $500 per meeting in person ($250 for attendance by telephonic
conference).
THE AMENDED 1994 STOCK OPTION PLAN
The Company's Amended 1994 Stock Option Plan (the "Plan") was originally
approved by the Company's stockholders in January 1995 and amended at the
Annual Meetings on May 29, 1996 and May 29, 1997. A total of 1,450,000 (post-
consolidation) shares were approved by the stockholders for issuance under
option agreements, subject to the Plan.
The Plan permits the grant of stock options to employees, officers and certain
directors. The purpose of the Plan is to attract the best available personnel
to the Company and to give employees, officers and certain directors of the
Company a greater personal stake in the success of the Company.
As of June 30, 1997, 404,000 options had been granted under the Plan during the
fiscal year. In addition, after June 30, 1997, options to purchase 364,000
shares of common stock were issued under the Plan to certain employees in
connection with normal employment practice, with exercise prices ranging from
$1.90 to $3.75 per share. In addition, 525,000 options were granted outside of
the Plan pursuant to employment agreements, normal employment practice and
consulting arrangements.
PRINCIPAL STOCKHOLDERS
The Company is not aware of any stockholder of record who owns five percent
(5%) or more of the outstanding common stock, and the Company has not received
any Form 13d filings which would indicate that any stockholder owns
beneficially more than five percent (5%) or more of the Company's common stock.
The table on page 2 of this proxy statement sets forth, as of November 12,
1997, certain information with respect to the beneficial ownership of shares of
the Company's common stock by all directors and executive officers of the
Company individually, and all directors and all executive officers of the
Company as a group. As of November 12, 1997, there were 15,970,919 shares of
common stock outstanding.
-14-
<PAGE>
FIVE YEAR COMMON STOCK PERFORMANCE GRAPH
The following graph compares the performance of the Company's common stock
during the period June 30, 1992 to June 30, 1997 with Nasdaq Stock Market Index
and the Company's peer group of Nasdaq stocks.
The graph depicts the results of investing $100 in the Company's common stock,
and the identified index at closing prices on June 30, 1992.
[Insert Graph of Stock Performance]
<TABLE>
<CAPTION>
Graph Legend
<C> <C> <C> <C> <C> <C> <C> <C>
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 06/30/92 06/30/93 06/30/94 06/30/95 06/30/96 06/30/97
THERMOGENESIS CORP. 100.0 300.0 145.5 227.3 313.6 202.3
. . . _ Nasdaq Stock Market
(US Companies) 100.0 125.8 127.0 169.5 217.6 264.6
_ _ _ _ Nasdaq Stocks SIC
3580-3589 US
Companies - Refrigeration
and Service Industry
Machinery 100.0 115.5 141.3 156.5 190.2 212.5
NOTES TO PERFORMANCE GRAPH:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 06/03/92.
-15-
<PAGE>
There can be no assurance that the Company's stock performance will continue
into the future with the same or similar trends depicted in the graph above.
The market price of the Company's common stock in recent years has fluctuated
significantly and it is likely that the price of the stock will fluctuate in
the future. The Company does not endorse any predictions of future stock
performance. Furthermore, the stock performance chart is not considered by the
Company to be (i) soliciting material, (ii) deemed filed with the Securities
and Exchange Commission, and (iii) to be incorporated by reference in any
filings by the Company under the Securities Act of 1933, or the Securities
Exchange Act of 1934.
CERTAIN RELATED TRANSACTIONS
In May, 1997, the Company loaned the principal sum of $88,281,25 to Charles de
B. Griffiths, the Company's Vice President of Marketing and Sales and a
director of the Company, to assist with the purchase and renovation of a
residence in connection with Mr. Griffiths relocation to the Company's Rancho
Cordova office from France, where he previously resided. The loan bears simple
interest at the annual rate of eight percent (8%), and is due and payable upon
demand, and in no event later than February 1998. The loan was fully secured by
shares of common stock held by Mr. Griffiths at the time of the loan, and was
entered into to assist Mr. Griffiths relocate without needing to sell shares of
the Company's common stock beneficially owned by him.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon a review of Forms 3, 4 and 5 delivered to the Company as
filed with the Securities and Exchange Commission ("Commission"), directors and
officers of the Company timely filed all required reports pursuant to Section
16(a) of the Securities Exchange Act of 1934 except for the late filing of Form
3 by Dr. Zmuda, V.P. Regulatory Affairs, due to travel and relocation.
OTHER MATTERS
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Company has retained the firm of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending June 30, 1998. The Company expects a
representative of Ernst & Young LLP to be present at the Annual Meeting of
Stockholders and the representative will have an opportunity to make a
statement if he desires to do so. Such representative will be available to
respond to appropriate questions.
TRANSFER AGENT
The American Securities Transfer and Trust, Inc. located at 1825 Lawrence
Street, Suite 444, Denver, CO 80202-1817, phone (303) 234-5300, fax (303) 234-
5340 is the transfer agent for the Company's common stock.
ACTION ON OTHER MATTERS
The Board of Directors of the Company knows of no other matters that may, or
are likely, to be presented at the Meeting. However, in such event, the
persons named in the enclosed form of proxy will vote such proxy in accordance
with their best judgement in such matters pursuant to discretionary authority
granted in the proxy.
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<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals to be included in the Company's Proxy Statement and Proxy
for its 1998 Annual Meeting must meet the requirements of Rule 14a-8
promulgated by the Securities and Exchange Commission ("SEC") and must be
received by the Company no later than August 10, 1998.
ADDITIONAL INFORMATION
EACH STOCKHOLDER HAS RECEIVED THE COMPANY'S 1997 ANNUAL REPORT CONTAINING THE
COMPANY'S 1997 AUDITED FINANCIAL STATEMENTS, INCLUDING THE REPORT OF ITS
INDEPENDENT PUBLIC ACCOUNTANTS. UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY
WILL FURNISH TO ANY STOCKHOLDER, WITHOUT CHARGE, A COPY OF THE COMPANY'S 1997
FORM 10-K AND FORM 10-K/A-1 AS FILED WITH THE SEC UNDER THE SECURITIES EXCHANGE
ACT OF 1934 (INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO AND A
LIST BRIEFLY DESCRIBING THE EXHIBITS THERETO). STOCKHOLDERS SHOULD DIRECT ANY
REQUEST TO THE COMPANY, 3146 GOLD CAMP DRIVE, RANCHO CORDOVA, CALIFORNIA 95670,
ATTENTION: CHARLES DE B. GRIFFITHS, SECRETARY.
THERMOGENESIS CORP.
By Order of the Board of Directors
Charles de B. Griffiths, Secretary
Rancho Cordova, California
-17-
<PAGE>
EXHIBIT A
THERMOGENESIS CORP.
1998 EQUITY INCENTIVE PLAN
As Adopted Februa
February 2, 1998
1. PURPOSE. The purpose of this Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company by offering them an
opportunity to participate in the Company's future performance through awards
of Options, Restricted Stock and Stock Bonuses. Capitalized terms not defined
in the text are defined in Section 23.
2. SHARES SUBJECT TO THE PLAN.
2.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2 and 18, the
total number of Shares reserved and available for grant and issuance pursuant
to this Plan will be 798,000 Shares. Subject to Sections 2.2 and 18, Shares
that (a) are subject to issuance upon exercise of an Option but cease to be
subject to such Option for any reason other than exercise of such Option; (b)
are subject to an Award granted hereunder but are forfeited or are repurchased
by the Company at the original issue price; or (c) are subject to an Award that
otherwise terminates without Shares being issued will again be available for
grant and issuance in connection with future Awards under this Plan. At all
times, the Company shall reserve and keep available a sufficient number of
Shares as shall be required to satisfy the requirements of all outstanding
Options granted under this Plan and all other outstanding but unvested Awards
granted under this Plan.
2.2 ADJUSTMENT OF SHARES. In the event that the number of
outstanding Shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then (a) the number of Shares reserved for issuance under this Plan, (b) the
Exercise Prices of and number of Shares subject to outstanding Options, and (c)
the number of Shares subject to other outstanding Awards will be prth
applicable securities laws; PROVIDED, HOWEVER, that fractions of a Share will
not be issued but will either be replaced by a cash payment equal to the Fair
Market Value of such fraction of a Share or will be rounded up to the nearest
whole Share, as determined by the Committee.
3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted
only to employees (including officers and directors who are also employees) of
the Company. All other Awards may be granted to employees, officers,
directors, consultants, independent contractors and advisors of the Company;
PROVIDED, such consultants, contractors and advisors render bona fide services
in connection with the Company's operations. A person may be granted more than
one Award under this Plan.
4. ADMINISTRATION.
4.1 COMMITTEE AUTHORITY. This Plan will be administered by the
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan.
Without limitation, the Committee will have the authority to:
(a)construe and interpret this Plan, any Award Agreement and any
other agreement or document executed pursuant to this Plan;
(b)prescribe, amend and rescind rules and regulations relating to
this Plan;
(c)select persons to receive Awards;
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(d)determine the form and terms of Awards;
(e)determine the number of Shares or other consideration subject to
Awards;
(f)determine whether Awards will be granted singly, in combination
with, in tandem with, in replacement of, or as alternatives to,
other Awards under this Plan or any other incentive or compensation
plan of the Company;
(g)grant waivers of Plan or Award conditions;
(h)determine the vesting, exercisability and payment of Awards;
(i)correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Award or any Award Agreement;
(j)determine whether an Award has been earned; and
(k)make all other determinations necessary or advisable for the
administration of this Plan.
4.2 COMMITTEE DISCRETION. Any determination made by the Committee
with respect to any Award will be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of this Plan
or Award, at any later time, and such determination will be final and binding
on the Company and on all persons having an interest in any Award under this
Plan. The Committee may delegate to one or more officers of the Company the
authority to grant an Award under this Plan to Participants who are not
Insiders of the Company.
4.3 COMMITTEE MEMBERS. If two or more members of the Board are
Outside Directors, the Committee will be comprised of at least two (2) members
of the Board, all of whom are Outside Directors and who satisfy the
requirements under the Exchange Act for administering this Plan.
5. OPTIONS. The Committee may grant Options to eligible persons and
will determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISO") or Nonqualified Stock Options ("NQSO"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:
5.1 FORM OF OPTION GRANT. Each Option granted under this Plan will
be evidenced by an Award Agreement which will expressly identify the Option as
an ISO or an NQSO ("Stock Option Agreement"), and will be in such form and
contain such provisions (which need not be the same for each Participant) as
the Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.
5.2 DATE OF GRANT. The date of grant of an Option will be the date
on which the Committeedelivered to the Participant within a reasonable time
after the granting of the Option.
5.3 EXERCISE PERIOD. Options may be exercisable within the times or
upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; PROVIDED, HOWEVER, that no Option will be
exercisable after the expiration of five (5) years from the date the Option is
granted; and PROVIDED FURTHER that no ISO granted to a person who directly or
by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company ("Ten Percent Shareholder") will
be exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee also may provide for Options to become exercisable at
one time or from time to time, periodically or otherwise, in such number of
Shares or percentage of Shares as the Committee determines.
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5.4 EXERCISE PRICE. The Exercise Price of an Option will be
determined by the Committee when the Option is granted and may be not less than
eighty-five percent (85%) of the Fair Market Value of the Shares on the date of
grant; PROVIDED, that: (i) the Exercise Price of an ISO will be not less than
one hundred percent (100%) of the Fair Market Value of the Shares on the date
of grant; and (ii) the Exercise Price of any ISO granted to a Ten Percent
Shareholder will not be less than one hundred ten percent (110%) of the Fair
Market Value of the Shares on the date of grant. Payment for the Shares
purchased may be made in accordance with Section 8 of this Plan.
5.5 METHOD OF EXERCISE. Options may be exercised only by delivery to
the Company of a written stock option exercise agreement (the "Exercise
Agreement") in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding the Participant's
investment intent and access to information and other matters, if any, as may
be required or desirable by the Company to comply with applicable securities
laws, together with payment in full of the Exercise Price for the number of
Shares being purchased.
5.6 TERMINATION. Notwithstanding the exercise periods set forth in
the Stock Option Agreement, exercise of an Option will always be subject to the
following:
(a)If the Participant is Terminated for any reason except death or
Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been
exercisable upon the Termination Date no later than three (3)
months after the Termination Date (or such shorter or longer time
period not exceeding five (5) years as may be determined by the
Committee, with any exercise beyond three (3) months after the
Termination Date deemed to be an NQSO), but in any event, no later
than the expiration date of the Options.
(b)If the Participant is Terminated because of the Participant's
death or Disability (or the Participant dies within three (3)
months after a Termination other than because of the Participant's
death or Disability), then the Participant's Options may be
exercised only to the extent that such Options would have been
exercisable by the Participant on the Termination Date and must be
exercised by the Participant (or the Participant's legal
representative or authorized assignee) no later than twelve (12)
months after the Termination Date (or such shorter or longer time
period not exceeding five (5) years as may be determined by the
Committee, with any such exercise beyond (i) three (3) months after
the Termination Date when the Termination is for any reason other
than the Participant's death or Disability, or (ii) twelve (12)
months after the Termination Date when the Termination is for the
Participant's death or Disability, deemed to be an NQSO), but in
any event no later than the expiration date of the Options.
(c)If a Participant is determined by the Board to have committed an
act of theft, embezzlement, fraud, dishonesty or a breach of
fiduciary duty to the Company, neither the Participant, the
Participant's estate nor such other person who may then hold the
Option shall be entitled to exercise any Option with respect to any
Shares whatsoever, after Termination of service, whether or not
after Termination of service the Participant may receive payment
from the Company for vacation pay, for services rendered prior to
Termination, for services rendered for the day on which Termination
occurs, for salary in lieu of notice, or for any other benefits.
In making such determination, the Board shall give the Participant
an opportunity to present to the Board evidence on such
Participant's behalf. For the purpose of this paragraph,
Termination of service shall be deemed to occur on the date when
the Company dispatches notice or advice to the Participant that
such Participant's service is terminated.
5.7 LIMITATIONS ON EXERCISE. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent the Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.
5.8 LIMITATIONS ON ISOS. The aggregate Fair Market Value (determined
as of the date of grant) of Shares with respect to which ISOs are exercisable
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for the first time by a Participant during any calendar year (under this Plan
or under any other incentive stock option plan of the Company) will not exceed
One Hundred Thousand Dollars ($100,000). If the Fair Market Value of Shares on
the date of grant with respect to which ISOs are exercisable for the first time
by a Participant during any calendar year exceeds One Hundred Thousand Dollars
($100,000), then the Options for the first One Hundred Thousand Dollars
($100,000) worth of Shares to become exercisn excess of One Hundred Thousand
Dollars ($100,000) that become exercisable in that calendar year will be NQSOs.
In the event that the Code or the regulations promulgated thereunder are
amended after the Effective Date of this Plan to provide for a different limit
on the Fair Market Value of Shares permitted to be subject to ISOs, such
different limit will be automatically incorporated herein and will apply to any
Options granted after the effective date of such amendment.
5.9 MODIFICATION, EXTENSION OR RENEWAL. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code. The Committee may reduce the Exercise Price of outstanding
Options without the consent of Participants affected by a written notice to
them; PROVIDED, HOWEVER, that the Exercise Price may not be reduced below the
minimum Exercise Price that would be permitted under Section 5.4 of this Plan
for Options granted on the date the action is taken to reduce the Exercise
Price.
5.10 NO DISQUALIFICATION. Notwithstanding any other provision in
this Plan, no term of this Plan relating to ISOs will be interpreted, amended
or altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the
Company to sell to an eligible person Shares that are subject to restrictions.
The Committee will determine to whom an offer will restrictions to which the
Shares will be subject, and all other terms and conditions of the Restricted
Stock Award, subject to the following:
6.1 FORM OF RESTRICTED STOCK AWARD. All purchases under a Restricted
Stock Award made pursuant to this Plan will be evidenced by an Award Agreement
("Restricted Stock Purchase Agreement") that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of
this Plan. The offer of Restricted Stock will be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the
offer will terminate, unless otherwise determined by the Committee.
6.2 PURCHASE PRICE. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Committee and will be at least
eighty-five percent (85%) of the Fair Market Value of the Shares on the date
the Restricted Stock Award is granted, except in the case of a sale to a Ten
Percent Shareholder, in which case the Purchase Price will be one hundred
percent (100%) of the Fair Market Value. Payment of the Purchase Price may be
made in accordance with Section 8 of this Plan.
6.3 RESTRICTIONS. Restricted Stock Awards will be subject to such
restrictions (if any) as the Committee may impose. The Committee may provide
for the lapse of such restrictions in installments and may accelerate or waive
such restrictions, in whole or part, based on length of service, performance or
such other factors or criteria as the Committee may determine.
7. STOCK BONUSES
7.1 AWARDS OF STOCK BONUSES. A Stock Bonus is an award of Shares
(which may consist of Restricted Stock) for services rendered to the Company.
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A Stock Bonus may be awarded for past services already rendered to the Company,
pursuant to an Award Agreement (the "Stock Bonus Agreement") that will be in
such form (which need not be the same for each Participant) as the Committee
will from time to time approve, and will comply with and be subject to the
terms and conditions of this Plan. A Stock Bonus may be awarded upon
satisfaction of such performance goals as are set out in advance in the
Participant's individual Award Agreement (the "Performance Stock Bonus
Agreement") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. Stock Bonuses
may vary from Participant to Participant and between groups of Participants,
and may be based upon the achievement of the Company and/or individual
performance factors or upon such other criteria as the Committee may determine.
7.2 TERMS OF STOCK BONUSES. The Committf the Stock Bonus is being
earned upon the satisfaction of performance goals pursuant to a Performance
Stock Bonus Agreement, then the Committee will determine (a) the nature, length
and starting date of any period during which performance is to be measured (the
"Performance Period ") for each Stock Bonus; (b) the performance goals and
criteria to be used to measure the performance, if any; (c) the number of
Shares that may be awarded to the Participant; and (d) the extent to which such
Stock Bonuses have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses that
are subject to different Performance Periods and different performance goals
and other criteria. The number of Shares may be fixed or may vary in
accordance with such performance goals and criteria as may be determined by the
Committee. The Committee may adjust the performance goals applicable to the
Stock Bonuses to take into account changes in law and accounting or tax rules
and to make such adjustments as the Committee deems necessary or appropriate to
reflect the impact of extraordinary or unusual items, events or circumstances
to avoid windfalls or hardships.
7.3 FORM OF PAYMENT. The earned portion of a Stock Bonus may be paid
currently or on a deferred basis with such interest or dividend equivalent, if
any, as the Committee may determine. Payment may be made in the form of cash,
whole Shares, including Restricted Stock, or a combination thereof, either in a
lump sum payment or in installments, all as the Committee determines.
7.4 TERMINATION DURING PERFORMANCE PERIOD. If a Participant is
Terminated during a Performance Period for any reason, then such Participant
will be entitled to payment (whether in Shares, cash or otherwise) with respect
to the Stock Bonus only to the extent earned as of the Termination Date in
accordance with the Performance Stock Bonus Agreement, unless the Committee
determines otherwise.
8. PAYMENT FOR SHARE PURCHASES.
8.1 PAYMENT. Payment for Shares purchased pursuant to this Plan may
be made in cash (by check) or, where expressly approved for the Participant by
the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b)by surrender of shares that either: (i) have been owned by the
Participant for more than six (6) months and have been paid for
within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such note
has been fully paid with respect to such shares); or (2) were
obtained by the Participant in the public market;
(c) by tender of a full recourse promissory note having such terms as
may be approved by the Committee and bearing interest at a rate
sufficient to avoid imputation of income under Sections 483 and
1274 of the Code; PROVIDED, HOWEVER, that Participants who are not
employees or directors of the Company will not be entitled to
purchase Shares with a promissory note unless the note is
adequately secured by collateral other than the Shares;
(d) by waiver of compensation due or accrued to the Participant for
services rendered;
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(e) with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from the Participant and
a broker-dealer that is a member of the National Association
of Securities Dealers (an "NASD Dealer") whereby the
Participant irrevocably elects to exercise the Option and to
sell a portion of the Shares so purchased to pay for the
Exercise Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the Exercise
Price directly to the Company; or
(2) through a "margin" commitment from the Participant and an
NASD Dealer whereby the Participant irrevocably elects to
exercise the Option and to pledge the Shares so purchased to
the NASD Dealer in a margin account as security for a loan
from the NASD Dealer in the amount of the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the
Company; or
(f) by any combination of the foregoing.
8.2 LOAN GUARANTEES. The Committee may help the Participant pay for
Shares purchased under this Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.
9. WITHHOLDING TAXES.
9.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local tax withholding requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan,
payments in satisfaction of Awards are to be made in cash, such payments will
be net of an amount sufficient to satisfy federal, state and local tax
withholding requirements.
9.2 STOCK WITHHOLDING. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated
to pay the Company the amount required to be withheld, the Committee may in its
sole discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be
issued that number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld, determined on the date that the amount of tax
to be withheld is to be determined (the "Tax Date"). All elections by a
Participant to have Shares withheld for this purpose will be made in accordance
with the requirements established by the Committee and be in writing in a form
acceptable to the Committee.
10. PRIVILEGES OF STOCK OWNERSHIP.
10.1 VOTING AND DIVIDENDS. No Participant will have any of the
rights of a shareholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the
Participant will be a shareholder and have all the rights of a shareholder with
respect to such Shares, including the right to vote and receive all dividends
or other distributions made or paid with respect to such Shares; PROVIDED, that
if such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same
restrictions as the Restricted Stock; and PROVIDED, FURTHER, that the
Participant will have no right to retain such stock dividends or stock
distributions with respect to Shares that are repurchased at the Participant's
original Purchase Price pursuant to Section 12.
10.2 FINANCIAL STATEMENTS. The Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding; PROVIDED, HOWEVER, the Company will not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.
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11. TRANSFERABILITY. Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by the Participant, and may not
be made subject to execution, attachment or similar process, otherwise than by
will or by the laws of descent and distribution or as consistent with the
Specific Plan and Award Agreement provisions relating thereto. During the
lifetime of the Participant an Award will be exercisable only by the
Participant, and any elections with respect to an Award may be made only by the
Participant.
12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase a portion of or all Unvested Shares held by a Participant
following such Participant's Termination at any time within ninety (90) days
after the later of the Participant's Termination Date and the date Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase
money indebtedness, at the Participant's Exercise Price or Purchase Price, as
the case may be.
13. CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders,
legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of the
SEC or any stock exchange or automated quotation system upon which the Shares
may be listed or quoted.
14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause
a legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will
be required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of such Participant's obligation
to the Company under the promissory note; PROVIDED, HOWEVER, that the Committee
may require or accept other or additional forms of collateral to secure the
payment of such obligation and, in any event, the Company will have full
recourse against the Participant under the promissory note notwithstanding any
pledge of the Participant's Shares or other collateral. In connection with any
pledge of the Shares, the Participant will be required to execute and deliver a
written pledge agreement in such form as the Committee will from time to time
approve. The Shares purchased with the promissory note may be released from
the pledge on a pro rata basis as the promissory note is paid.
15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. The Committee may at any time
buy from a Participant an Award previously granted with payment in cash, Shares
(including Restricted Stock) or other consideration, based on such terms and
conditions as the Committee and the Participant may agree.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
laws or rulings of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register
the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability
for any inability or failure to do so.
17. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or limit in any way the right of the Company to terminate such
Participant's employment or other relationship at any time, with or without
cause.
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18. CORPORATE TRANSACTIONS.
18.1 ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In the
event of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the shareholders of the Company or their relative
stock holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the shareholders of the Company immediately prior to such
merger (other than any shareholder that merges, or which owns or controls
another corporation that merges, with the Company in such merger) cease to own
their shares or other equity interest in the Company, or (d) the sale of
substantially all of the assets of the Company, any or all outstanding Awards
may be assumed, converted or replaced by the successor corporation (if any),
which assumption, conversion or replacement will be binding on all
Participants. In the alternative, the successor corporation may substitute
equivalent Awards or provide substantially similar consideration to
Participants as was provided to shareholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue,
in place of outstanding Shares of the Company held by the Participants,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participants. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 18.1,
such Awards will expire on such transaction at such time and on such conditions
as the Board will determine.
18.2 OTHER TREATMENT OF AWARDS. Subject to any greater rights
granted to Participants under the foregoing provisions of this Section 18, in
the event of the occurrence of any transaction described in Section 18.1, any
outstanding Awards will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, sale of assets or
other "corporate transaction."
18.3 ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either (a) granting an Award under this Plan in substitution of
such other company's award; or (b) assuming such award as if it had been
granted under this Plan if the terms of such assumed award could be applied to
an Award granted under this Plan. Such substitution or assumption will be
permissible if the holder of the substituted or assumed award would have been
eligible to be granted an Award under this Plan if the other company had
applied the rules of this Plan to such grant. In the event the Company assumes
an award granted by another company, the terms and conditions of such award
will remain unchanged (EXCEPT that the exercise price and the number and nature
of Shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to Section 424(a) of the Code). In the event the
Company elects to grant a new Option rather than assuming an existing option,
such new Option may be granted with a similarly adjusted Exercise Price.
19. ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall be approved by
the shareholders of the Company (excluding Shares issued pursuant to this
Plan), consistent with applicable laws, within twelve (12) months before or
after the date this Plan is adopted by the Board. Upon the Effective Date, the
Board may grant Awards pursuant to this Plan; PROVIDED, HOWEVER, that (a) no
Option may be exercised prior to initial shareholder approval of this Plan; (b)
no Option granted pursuant to an increase in the number of Shares subject to
this Plan approved by the Board will be exercised prior to the time such
increase has been approved by the shareholders of the Company; and (c) in the
event that shareholder approval of such increase is not obtained within the
time period provided herein, all Awards granted hereunder will be canceled, any
Shares issued pursuant to any Award will be canceled, and any purchase of
Shares hereunder will be rescinded. So long as the Company is subject to
Section 16(b) of the Exchange Act, the Company will comply with the
requirements of Rule 16b-3 (or its successor), as amended, with respect to
shareholder approval.
20. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the date this Plan is
adopted by the Board or, if earlier, the date of shareholder approval. This
Plan and all agreements thereunder shall be governed by and construed in
accordance with the laws of the State of California, excluding its conflict of
laws rules.
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21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend this Plan in any respect, including without limitation
amendment of any form of Award Agreement or instrument to be executed pursuant
to this Plan; PROVIDED, HOWEVER, that the Board will not, without the approval
of the shareholders of the Company, amend this Plan in any manner that requires
such shareholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans or (if the Company is subject
to the Exchange Act or Section 16(b) of the Exchange Act) pursuant to the
Exchange Act or Rule 16b-3 (or its successor), as amended, respectively.
22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the shareholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
23. DEFINITIONS. As used in this Plan, the following terms will have
the following meanings:
23.1. "Award" means any award under this Plan, including any Option,
Restricted Stock or Stock Bonus.
23.2. "Award Agreement" means, with respect to each Award, the
signed written agreement between the Company and the Participant setting forth
the terms and conditions of the Award.
23.3. "Board" means the Board of Directors of the Company.
23.4. "Code" means the Internal Revenue Code of 1986, as amended.
23.5. "Committee" means the Compensation Committee appointed by the
Board to administer this Plan, or if no such committee is appointed, the Board.
23.6. "Company" means THERMOGENESIS CORP. or any successor
corporation.
23.7. "Disability" means a disability, whether temporary or
permanent, partial or total, within the meaning of Section 22(e)(3) of the
Code, as determined by the Committee.
23.8. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
23.9. "Exercise Price" means the price at which a holder of an
Option may purchase the Shares issuable upon exercise of the Option.
23.10. "Fair Market Value" means, as of any date, the value of a
share of the Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq
National Market, its closing price on the Nasdaq
National Market on the date of determination as
reported in THE WALL STREET JOURNAL;
(b) if such Common Stock is publicly traded and is then
listed on a national securities exchange, its closing
price on the date of determination on the principal
national securities exchange on which the Common Stock
is listed or admitted to trading as reported in THE
WALL STREET JOURNAL;
(c) if such Common Stock is publicly traded but is not
quoted on the Nasdaq National Market nor listed or
admitted to trading on a national securities exchange,
A-9
<PAGE>
the average of the closing bid and asked prices on the
date of determination as reported in THE WALL STREET
JOURNAL; or
(e) if none of the foregoing is applicable, by the
Committee in good faith.
23.11. "Insider" means an officer or director of the Company or any
other person whose transactions in the Company's Common Stock are subject to
Section 16 of the Exchange Act.
23.12. "Outside Director" means any director who is not (a) a
current employee of the Company; (b) a former employee of the Company who is
receiving compensation for prior services (other than benefits under a
tax-qualified pension plan); (c) a current or former officer of the Company; or
(d) currently receiving compensation for personal services in any capacity,
other than as a director, from the Company; PROVIDED, HOWEVER, that at such
time as the term "Outside Director", as used in Section 162(m) of the Code is
defined in regulations promulgated under Section 162(m) of the Code, "Outside
Director" will have the meaning set forth in such regulations, as amended from
time to time and as interpreted by the Internal Revenue Service.
23.13. "Option" means an award of an option to purchase Shares
pursuant to Section 5.
23.14. "Participant" means a person who receives an Award under this
Plan.
23.15. "Plan" means this THERMOGENESIS CORP. Equity Incentive Plan,
as amended from time to time.
23.16. "Restricted Stock Award" means an award of Shares pursuant
to Section 6.
23.17. "SEC" means the Securities and Exchange Commission.
23.18. "Securities Act" means the Securities Act of 1933, as
amended.
23.19. "Shares" means shares of the Company's Common Stock reserved
for issuance under this Plan, as adjusted pursuant to Sections 2 and 18, and
any successor security.
23.20. "Stock Bonus" means an award of Shares, or cash in lieu of
Shares, pursuant to Section 7.
23.21. "Termination" or "Terminated" means, for purposes of this
Plan with respect to a Participant, that the Participant has for any reason
ceased to provide services as an employee, officer, director, consultant,
independent contractor or advisor of the Company. An employee will not be
deemed to have ceased to provide services in the case of (i) sick leave, (ii)
military leave, or (iii) any other leave of absence approved by the Committee;
PROVIDED, that such leave is for a period of not more than ninety (90) days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute or unless provided otherwise pursuant to formal policy adopted from
time to time by the Company and issued and promulgated to employees in writing.
In the case of any employee on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of the Award while on
leave from the employ of the Company as it may deem appropriate, except that in
no event may an Option be exercised after the expiration of the term set forth
in the Option agreement. The Committee will have sole discretion to determine
whether a Participant has ceased to provide services and the effective date on
which the Participant ceased to provide services (the "Termination Date").
23.22. "Unvested Shares" means "Unvested Shares" as defined in the
Award Agreement.
23.23. "Vested Shares" means "Vested Shares" as defined in the
Award Agreement.
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<PAGE>
THERMOGENESIS CORP.
3146 Gold Camp Drive, Rancho Cordova, CA 95670
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Philip H. Coelho and Charles de B. Griffiths,
and each of them, as proxies with the power to appoint his or her or their
successor, and hereby authorizes them to represent and to vote, as designated
below, all the shares of common stock of THERMOGENESIS CORP. ("the Company"),
held of record by the undersigned on December 8, 1997, at the Annual Meeting of
Stockholders to be held on February 2, 1998, at 10:00 a.m. (PST), at the
Sheraton Hotel, located at 11211 Point East Drive, Rancho Cordova, California
95742, and at any and all adjournments thereof.
1. Election of Directors.
FOR all nominees listed below _____ WITHOUT AUTHORITY ____
(except as marked to the contrary below) (to vote for all Nominees below)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Philip H. Coelho Charles de B. Griffiths Hubert Huckel
Patrick McEnany James Godsey
2. Approval of the Equity Incentive Plan.
FOR _______ AGAINST _________ ABSTAIN _____
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting, including adjournment.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, AND 2, AND IN THE DISCRETION OF THE
PROXIES FOR ANY OTHER MATTER THAT IS PRESENTED.
Please sign exactly as your name appears on the share certificates. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
__________________________________ __________________________________
Name (Print) Name (Print) (if held jointly)
Dated: __________________________________ __________________________________
Signature Signature (if held jointly)
__________________________________ _________________________________
__________________________________ _________________________________
(Address) (Address)
I will ___ will not ___
attend the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
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