<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Criticare Systems, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
Not Applicable
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
Not Applicable
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
Not Applicable
--------------------------------------------------------------------------------
(5) Total fee paid:
Not Applicable
--------------------------------------------------------------------------------
[ ] 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:
Not Applicable
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
Not Applicable
--------------------------------------------------------------------------------
(3) Filing Party:
Not Applicable
--------------------------------------------------------------------------------
(4) Date Filed:
Not Applicable
--------------------------------------------------------------------------------
<PAGE> 2
CRITICARE SYSTEMS, INC.
20925 CROSSROADS CIRCLE
WAUKESHA, WISCONSIN 53186
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Criticare Systems, Inc., will be held
at the Company's headquarters, 20925 Crossroads Circle, Waukesha, Wisconsin
53186, on Friday, December 1, 2000 at 4:00 p.m., local time, for the following
purposes:
1. To elect two directors, each to serve for a three-year term.
2. To ratify the appointment of BDO Seidman, LLP, independent certified
public accountants, as auditors of the Company for its fiscal year ending June
30, 2001.
3. To approve and adopt an amendment to the Criticare Systems, Inc. 1992
Employee Stock Option Plan to increase the aggregate number of shares of the
Corporation's common stock that may be issued pursuant thereto from 1,540,000 to
2,040,000.
4. To transact any other business as may properly come before the meeting
and any adjournment or adjournments thereof.
The transfer books of the Company will not be closed for the Annual
Meeting. Stockholders of record at the close of business on October 11, 2000 are
entitled to receive notice of, and to vote at, the Annual Meeting.
All stockholders are cordially invited to attend the meeting in person, if
possible. Stockholders who are unable to be present in person are requested to
execute and promptly return the accompanying proxy in the enclosed envelope. The
proxy is being solicited by the Board of Directors of the Company. Your
attendance at the meeting, whether in person or by proxy, is important to ensure
a quorum. If you return the proxy, you may still vote your shares in person by
giving written notice (by subsequent proxy or otherwise) to the Secretary of the
Company at any time prior to its vote at the Annual Meeting.
By Order of the Board of Directors
Mark S. Ruehle, Secretary
Waukesha, Wisconsin
October 27, 2000
<PAGE> 3
CRITICARE SYSTEMS, INC.
20925 CROSSROADS CIRCLE
WAUKESHA, WISCONSIN 53186
PROXY STATEMENT FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Criticare Systems, Inc. (the "Company"), to
be voted at the Annual Meeting of Stockholders to be held at the Company's
headquarters, 20925 Crossroads Circle, Waukesha, Wisconsin 53186, at 4:00 P.M.,
local time, on Friday, December 1, 2000, and at any adjournments thereof, for
the purposes set forth in the accompanying Notice of Meeting. The mailing of
this Proxy Statement and accompanying form of proxy is being made on or about
October 27, 2000.
GENERAL INFORMATION
The Board of Directors knows of no business which will be presented to the
meeting other than the matters referred to in the accompanying Notice of
Meeting. However, if any other matters are properly presented to the meeting, it
is intended that the persons named in the proxy will vote on such matters in
accordance with their judgment. If the enclosed form of proxy is executed and
returned, it nevertheless may be revoked at any time before it has been voted by
a later dated proxy or a vote in person at the Annual Meeting. Shares
represented by properly executed proxies received on behalf of the Company will
be voted at the Annual Meeting (unless revoked prior to their vote) in the
manner specified therein. If no instructions are specified in a signed proxy
returned to the Company, the shares represented thereby will be voted (1) in
FAVOR of the election of the nominees listed in the enclosed proxy as directors
of the Company, (2) in FAVOR of the proposal to approve the amendment of the
Criticare Systems, Inc. 1992 Employee Stock Option Plan (the "1992 Employee
Stock Option Plan") to increase the aggregate number of shares of the
Corporation's common stock, par value $0.04 per share (the "Common Stock"), that
may be issued pursuant thereto from 1,540,000 to 2,040,000; and (3) in FAVOR of
the ratification of BDO Seidman, LLP as independent accountants for the 2001
fiscal year.
Only holders of Common Stock whose names appear of record on the books of
the Company at the close of business on October 11, 2000 (the "Record Date") are
entitled to vote at the Annual Meeting. On that date, the only outstanding
shares of capital stock of the Company were 8,991,251 shares of Common Stock.
Each share of Common Stock is entitled to one vote on each matter to be
presented at the meeting. The election of directors requires the affirmative
vote of the holders of a plurality of the shares represented, in person or by
proxy, at the meeting and the approval and adoption of the proposed amendment to
the 1992 Employee Stock Option Plan and the ratification of independent
accountants requires the affirmative vote of the holders of a majority of the
shares represented, in person or by proxy, at the meeting. Abstentions and
broker non-votes (i.e., shares held by brokers in street name, voting on certain
matters due to discretionary authority or instructions from the beneficial
owners but not voting on other matters due to lack of authority to vote on such
matters without instructions from the beneficial owner) will count toward the
quorum requirement and will not count toward the determination of whether the
directors are elected, the proposed amendment to the 1992 Employee Stock Option
Plan is approved or the appointment of independent accountants is ratified.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Pursuant to the authority contained in the By-Laws of the Company, the
Board of Directors has established the number of directors of the Company at
seven. The Company's By-Laws provide that the Board of Directors will be divided
into three classes as nearly equal in number as possible, with the term of one
class expiring each year. The terms of two directors expire at the Annual
Meeting.
<PAGE> 4
Accordingly, the Board of Directors has nominated for re-election as directors
Karsten Houm and Emil H. Soika to serve terms of three years, until the 2003
Annual Meeting of Stockholders. There are currently two vacancies on the Board
of Directors. Proxies cannot be voted for more than two candidates for director.
Effective August 1, 2000, Gerhard J. Von der Ruhr resigned as a director,
and Jeffrey T. Barnes was appointed on October 13, 2000, to fill the vacancy
created by Mr. Von der Ruhr's resignation. Mr. Barnes' directorship is connected
with the investment in the Company pursuant to the terms of a Purchase
Agreement, dated as of October 17, 2000, among the Company, Oxford Bioscience
Partners III L.P., Oxford Bioscience Partners (Bermuda) III Limited Partnership
and mRNA Fund L.P.
As indicated below, the persons nominated by the Board of Directors are
incumbent directors. The Company anticipates that the nominees will be
candidates when the election is held. However, if for any reason either of the
nominees is not a candidate at that time, proxies will be voted for any
substitute nominee designated by the incumbent directors (except where a proxy
withholds authority with respect to the election of a director).
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE
ELECTION OF KARSTEN HOUM AND EMIL H. SOIKA AS DIRECTORS OF THE COMPANY.
NOMINEES FOR ELECTION AS DIRECTOR
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR DIRECTOR
PAST FIVE YEARS AND DIRECTORSHIPS AGE SINCE PRESENT TERM ENDS
----------------------------------- --- -------- -----------------
<S> <C> <C> <C>
KARSTEN HOUM............................................ 54 1985 2000 Annual Meeting
Mr. Houm has served as Chairman of the Board of the
Company since November 1998. Mr. Houm also currently
works as a management consultant. From September 1985 to
June 1997, Mr. Houm served as President of Unitor, a
Norwegian shipping company.
EMIL H. SOIKA........................................... 62 1998 2000 Annual Meeting
Mr. Soika has served as President and Chief Executive
Officer of the Company since November 1998. From
November 1995 to September 1998, Mr. Soika served as
Vice President and General Manager of Spacelabs Medical,
a medical monitoring and clinical information systems
company. From March 1991 to July 1995, Mr. Soika served
as President and Chief Executive Officer of Block
Medical, a manufacturer of intravenous dispensers. Mr.
Soika is a director of Immtech International, Inc., a
company engaged in the research and development of
products in the fields of biochemistry and immunology.
</TABLE>
2
<PAGE> 5
OTHER DIRECTORS
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR DIRECTOR
PAST FIVE YEARS AND DIRECTORSHIPS AGE SINCE PRESENT TERM ENDS
----------------------------------- --- -------- -----------------
<S> <C> <C> <C>
MILTON DATSOPOULOS...................................... 60 1986 2001 Annual Meeting
Mr. Datsopoulos has been a partner in the law firm of
Datsopoulos, MacDonald & Lind in Missoula, Montana since
1974. Mr. Datsopoulos is a director of Montana Naturals
Int'l, Inc., a manufacturer of natural food products and
nutritional supplements, Kafus Environmental Industries
Ltd., a producer of consumer and industrial waste
recycling technology, and Leigh Resource Corporation, a
company engaged in mineral exploration and development.
JEFFREY T. BARNES....................................... 46 2000 2002 Annual Meeting
Mr. Barnes has been a partner of Oxford Bioscience, a
venture capital firm since October 1999. From February
1997 to October 1999, Mr. Barnes was a principal of
Robertson Stephens, an investment banking firm. From
October 1993 to January 1997, Mr. Barnes was a principal
of Needham & Co., an investment banking firm.
N.C. JOSEPH LAI, PH.D................................... 58 1984 2002 Annual Meeting
Dr. Lai is a management consultant. Dr. Lai is a
co-founder of the Company and served as Vice Chairman of
its Board and as an officer from the Company's inception
in October 1984 until November 1998.
</TABLE>
DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors held three meetings during the Company's fiscal year
ended June 30, 2000. All of the incumbent directors attended all of the meetings
of the Board of Directors and all meetings of committees of the Board of
Directors upon which they serve.
The Board of Directors has an Audit Committee and a Compensation Committee.
The members of the Audit Committee are Milton Datsopoulos and Karsten Houm. The
Audit Committee met one time during the fiscal year ended June 30, 2000. The
responsibilities of the Audit Committee, in addition to such other duties
specified by the Board of Directors, include the following: (1) recommendation
to the Board of Directors of independent accountants for the Company; (2) review
of the timing, scope and results of the independent accountants' audit
examination and related fees; (3) review of periodic comments and
recommendations by the independent accountants and of the Company's response
thereto; and (4) review of the scope and adequacy of internal accounting
controls and internal auditing activities.
The Compensation Committee is comprised of Milton Datsopoulos and Karsten
Houm. The responsibilities of the Compensation Committee are to make
recommendations to the Board of Directors with respect to compensation for the
executive officers of the Company and to oversee the Company's stock plans. The
Compensation Committee met one time during the fiscal year ended June 30, 2000.
3
<PAGE> 6
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME TITLE AGE
---- ----- ---
<S> <C> <C>
Emil H. Soika........................ President, Chief Executive Officer and Director 62
Mark S. Ruehle....................... Vice President -- Finance and Secretary 39
Stephen D. Okland.................... Vice President -- Domestic Sales 58
Drew M. Diaz......................... Vice President -- International Sales 37
Michael T. Larsen.................... Vice President -- Quality Control/Quality Assurance 41
Joseph P. Lester..................... Vice President -- Operations 50
Dennis D. Hurlebaus.................. Vice President -- U.S. Hospital Sales 58
</TABLE>
The term of office and past business experience of Mr. Soika are described
above.
Mr. Ruehle has served as Vice President -- Finance and Secretary of the
Company since February 2000. Prior to joining the Company, Mr. Ruehle was Senior
Manager of Finance for AmeriServe Food Distribution, Inc., a food distribution
company, from December 1992 to June 1999.
Mr. Okland has served as a Vice President of the Company since April 1986.
Mr. Diaz served the Company as Regional Sales Manager for the Middle East
and Western Europe from 1993 until he was appointed Director of International
Sales in 1995. Mr. Diaz was most recently promoted to Vice
President -- International Sales in 1997. From October 1996 until August 1997,
Mr. Diaz also served as Geschaeftsfuehrer of Criticare International GmbH
Marketing Services, a wholly-owned subsidiary of the Company which was dissolved
in 1998 following bankruptcy proceedings under German law.
Mr. Larsen has served as Vice President -- Quality Control/Quality
Assurance since September 1990.
Mr. Lester has served as Vice President -- Operations of the Company since
January 2000. Prior to joining the Company, Mr. Lester was Vice
President -- Operations for Siemens Medical Systems, Inc., a medical device
company, from April 1997 to January 2000. From May 1993 to April 1997, Mr.
Lester served as Senior Director -- Operations for Spacelabs Medical, a medical
monitoring and clinical information systems company.
Mr. Hurlebaus has served as Vice President -- U.S. Hospital Sales of the
Company since May 2000. Prior to joining the Company, Mr. Hurlebaus served as
Vice President -- Sales for Teams Rehab, a medical software company, from
January 2000 to April 2000. From October 1995 to June 1998, Mr. Hurlebaus served
as Vice President -- Sales of Hill-Rom, a medical equipment company. From
February 1981 to October 1995, Mr. Hurlebaus served as Vice President -- Sales
for Datascope, a medical equipment company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") on Form 3, 4 and
5. Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish the Company with copies of all Forms 3, 4 and 5 they file.
4
<PAGE> 7
Based solely on review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that during fiscal 2000 all section 16(a) filing requirements
applicable to its officers, directors and greater than 10% beneficial owners
were complied with, except that Messrs. Datsopoulos, Houm and Larsen each filed
a late Form 5 to report option grants during fiscal 2000, Messrs. Hurlebaus,
Lester and Ruehle each filed a late Form 3 to report their appointment as
officers of the Company and Mr. Lester filed a Form 4 in September 2000 to
report transactions completed in January, March and May 2000.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following table sets forth information with respect to all
compensation, including stock options granted and all cash bonuses and accrued
deferred compensation, incurred by the Company during the three fiscal years
ended June 30, 2000 to or on behalf of the person who served as Chief Executive
Officer during fiscal 2000 and the two other executive officers of the Company
whose salary exceeded $100,000 for fiscal 2000. The persons listed below are
sometimes referred to herein as the "named executive officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
---------------
ANNUAL COMPENSATION AWARDS:
------------------------------ SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) COMPENSATION($)(1) OPTIONS/SARS(#) COMPENSATION($)
------------------ ---- --------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C> <C>
Emil H. Soika,................ 2000 125,000 1,280 -- 434(3)
President and 1999 78,125 -- 200,000 --
Chief Executive Officer(2)
Stephen D. Okland,............ 2000 230,282(4) 6,000 -- 3,517(6)
Vice President -- 1999 277,576(4) 6,000 43,500(5) 3,701(6)
Domestic Sales 1998 302,628(4) 6,000 -- 3,690(6)
Drew M. Diaz,................. 2000 160,100 1,640 42,000 3,295(8)
Vice President -- 1999 165,609 1,915 100,000(7) 1,882(8)
International Sales 1998 188,292 638 -- 86(8)
</TABLE>
-------------------------
(1) The amounts represent automobile allowance payments.
(2) Mr. Soika commenced employment with the Company in November 1998.
(3) Represents premiums paid by the Company on a life insurance policy, the
proceed of which are payable to the beneficiary of Mr. Soika.
(4) Represents commissions paid by the Company to Mr. Okland based on a
percentage of certain domestic sales by the Company. Mr. Okland did not
receive a fixed salary.
(5) Represents 30,000 stock options granted in fiscal 1999 and 13,500 stock
options regranted due to repricing of options on December 11, 1998.
(6) For fiscal 2000, represents $317 of premiums paid by the Company on a life
insurance policy, the proceeds of which are payable to the beneficiary of
Mr. Okland, and $3,200 of Company contributions to the 401(k) plan on behalf
of Mr. Okland. For fiscal 1999, represents $501 of premiums paid by the
Company on a life insurance policy, the proceeds of which are payable to the
beneficiary of Mr. Okland, and $3,200 of Company contributions to the 401(k)
plan on behalf of Mr. Okland. For fiscal 1998, represents $490 of premiums
paid by the Company on a life insurance policy, the proceeds of which are
payable to the beneficiary of Mr. Okland, and $3,200 of Company
contributions to the 401(k) plan on behalf of Mr. Okland.
(7) Represents 34,000 stock options granted in fiscal 1999 and 66,000 stock
options regranted due to repricing of options on December 11, 1998.
(8) For fiscal 2000, represents $95 of premiums paid by the Company on a life
insurance policy, the proceeds of which are payable to the beneficiary of
Mr. Diaz, and $3,200 of Company contributions to the 401(k) plan on behalf
of Mr. Diaz. For fiscal 1999, represents $101 of premiums paid by the
Company on a life insurance policy, the proceeds of which are payable to the
beneficiary of Mr. Diaz, and $1,781 of Company contributions to the 401(k)
plan on behalf of Mr. Diaz. For fiscal 1998, represents $86 of premiums paid
by the Company on a life insurance policy, the proceeds of which are payable
to the beneficiary of Mr. Diaz.
6
<PAGE> 9
COMPENSATION OF DIRECTORS
Directors of the Company are reimbursed for out-of-pocket expenses incurred
in attending meetings of the Board of Directors. The Company's directors did not
receive cash directors' fees during fiscal 2000. During fiscal 2000, the Company
granted 50,000 stock options to each of Mr. Houm and Mr. Datsopoulos.
EMPLOYMENT AGREEMENTS AND SEVERANCE ARRANGEMENTS
On June 1, 1999, the Company entered into employment agreements with Emil
H. Soika, President, Chief Executive Officer and Director, Stephen D. Okland,
Vice President -- Domestic Sales, and Drew M. Diaz, Vice
President -- International Sales. The agreements provide, respectively, that Mr.
Soika will receive a base salary of $125,000 per year, and Mr. Okland and Mr.
Diaz will continue to receive their respective current compensation, with an
annual review of the compensation within 30 days prior to the end of each fiscal
year. Mr. Soika is eligible to participate in a cash bonus program and each of
Mr. Soika, Mr. Okland and Mr. Diaz is entitled to receive health and life
insurance coverage and disability insurance. The Company may terminate Mr.
Soika's, Mr. Okland's or Mr. Diaz's respective employment at any time and any of
Mr. Soika, Mr. Okland or Mr. Diaz may resign at any time. If the Company
terminates employment without cause at any time either prior to or after a
change in control of the Company, Mr. Soika is entitled to receive payment of
his base salary and his other employee benefits for 12 months, Mr. Okland is
entitled to receive payment of $18,750 per month and his other employee benefits
for 24 months, and Mr. Diaz is entitled to receive payment of his then current
compensation and his other employee benefits for 12 months, respectively, from
the date of termination. If Mr. Soika's, Mr. Okland's or Mr. Diaz's employment
is terminated for any other reason before a change in control of the Company,
the terminated employee will not be entitled to receive any base salary or other
benefits for periods after the termination date. If the Company experiences a
change in control, and Mr. Soika, Mr. Okland or Mr. Diaz voluntarily terminates
his employment for any reason after completing three months of employment after
the change in control, Mr. Soika is entitled to receive payment of his base
salary and his other employee benefits for 12 months, Mr. Okland is entitled to
receive payment of $18,750 per month and his other employee benefits for 24
months, and Mr. Diaz is entitled to receive payment of his then current
compensation and his other employee benefits for 12 months, respectively, after
the date of termination, or until Mr. Soika, Mr. Okland or Mr. Diaz secures
alternative employment, whichever period is shorter. Each of Mr. Soika, Mr.
Okland and Mr. Diaz have agreed not to compete with the Company during
employment and for a period of 3, 24 and 12 months, respectively, after any
voluntary termination of employment or for a period of 12, 24 and 12 months,
respectively, after any termination by the Company without cause. Mr. Soika, Mr.
Okland and Mr. Diaz have each agreed to maintain the confidentiality of the
Company's financial statements and other financial information.
On November 16, 1998, the Company entered into a severance agreement with
Gerhard J. Von der Ruhr, the Company's former Chairman of the Board, President
(CEO), Treasurer and a former Director. Mr. Von der Ruhr beneficially owned 6.2%
of the outstanding Common Stock as of August 31, 2000. Pursuant to this
severance agreement, the Company is required to make payments to Mr. Von der
Ruhr of $6,000 per month over the 36 months from December 1998 through November
2001. The Company also agreed to (i) allow Mr. Von der Ruhr to continue to use
office space and secretarial services for a period of up to 12 months, (ii)
continue to provide fringe benefits to Mr. Von der Ruhr through September 30,
2001, and (iii) continue to provide health benefits to Mr. Von der Ruhr and his
spouse until the earlier of the date Mr. Von der Ruhr reaches age 65 or he
obtains comparable insurance coverage from a subsequent employer. Pursuant to
this severance agreement, the Company also transferred patent and technology
rights that the Company had received from Immtech International, Inc.
("Immtech") relating to treatment for sepsis and prophylaxis and 172,414 shares
of Immtech Common Stock to O. B. Scientific, Inc. ("O. B. Scientific") in
exchange for the payment by O. B. Scientific of $150,000 in ten semi-annual
7
<PAGE> 10
installments of $15,000 each starting on June 1, 1999. The Company received 10%
of the outstanding shares of O. B. Scientific and the right to elect one member
of the board of directors of O. B. Scientific. The Company and Mr. Von der Ruhr
also agreed to certain provisions regarding the distribution of products related
to the technology transferred by the Company to O. B. Scientific.
On November 16, 1998, the Company also entered into a severance agreement
with N.C. Joseph Lai, Ph.D., the Company's former Senior Vice President, Vice
Chairman of the Board and Secretary. Pursuant to this severance agreement, the
Company is required to make payments to Dr. Lai of $5,000 per month over the 36
months from December 1998 through November 2001. The Company also agreed to (i)
allow Dr. Lai to continue to use office space and secretarial services for a
period of up to 12 months, (ii) continue to provide fringe benefits to Dr. Lai
through September 30, 2001, and (iii) continue to provide health benefits to Dr.
Lai and his spouse until the earlier of the date Dr. Lai reaches age 65 or he
obtains comparable insurance coverage from a subsequent employer.
STOCK OPTION PLANS
On December 5, 1992 the Company adopted two new nonqualified stock option
plans, the 1992 Employee Stock Option Plan and the 1992 Non-Employee Stock
Option Plan (collectively, the "New Plans"). Pursuant to the adoption of the New
Plans, no new stock options can be granted under the stock option plans (the
"Old Plans") which existed prior to the approval of the New Plans, although the
Company may regrant existing stock options under the old plan to extend the term
of such stock options. The New Plans provide for the grant to key employees and
outside directors and consultants of the Company of options covering shares of
Common Stock. The New Plans are administered by the Board of Directors which has
discretion to increase the number of shares covered by the Plans, select
optionees, designate the number of shares to be covered by each option,
establish vesting schedules, specify the amount and type of consideration to be
paid to the Company on exercise, and to specify certain other terms of the
options. The exercise price of options granted under the New Plans must be at
least 100% of the fair market value of the Common Stock on the date of grant.
The Company has reserved 1,540,000 shares of Common Stock for issuance
under the 1992 Employee Stock Option Plan and 180,000 shares of Common Stock for
issuance under the 1992 Non-Employee Stock Option Plan, subject to adjustment
for certain dilutive events. At the end of fiscal 2000, options to purchase
1,115,000 shares were outstanding under the New Plans and options to purchase
37,900 shares were outstanding under the Old Plans. During fiscal 2000, options
were granted to purchase 451,200 shares of Common Stock under the New Plans at
an average per share exercise price of $2.24 (all options were granted at the
market price on the grant dates) and options to purchase 37,900 shares of Common
Stock were regranted under the Old Plans at an average per share exercise price
of $2.25 per share. In addition, during fiscal 2000, 369,800 shares of Common
Stock at an average per share exercise price of $2.05 were canceled under the
New Plans and 37,900 shares of Common Stock at an average per share exercise
price of $3.00 were canceled under the Old Plans and options to purchase 240,100
shares at an average exercise price per share of $1.91 were exercised under the
New Plans and no options were exercised under the Old Plans. A total of 139,350
shares of Common Stock remain available for future grants under the New Plans.
The Company is also submitting a proposal at the Annual Meeting to increase the
number of shares of Common Stock that may be issued under the 1992 Employee
Stock Option Plan to 2,040,000. See "Proposal No. 2 -- Amendment to 1992
Employee Stock Option Plan."
8
<PAGE> 11
The following table provides certain information regarding stock options
granted to the named executive officers of the Company during the fiscal year
ended June 30, 2000.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM($)
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5% 10%
---- ---------- ------------ -------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Emil H. Soika......... -- -- -- -- -- --
Stephen D. Okland..... -- -- -- -- -- --
Drew M. Diaz.......... 2,000 0.6 2.25 January 25, 2002 461 945
40,000 12.2 2.25 May 15, 2005 24,865 54,946
</TABLE>
The following table shows the fiscal year-end value of unexercised options
held by the named executive officers. None of the named executive officers
exercised options in fiscal 2000.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT FISCAL YEAR
FISCAL YEAR-END(#) END($)(1)
------------------------------ ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Emil H. Soika......................... 60,000 140,000 45,941 104,070
Stephen D. Okland..................... 23,500 20,000 11,017 9,376
Drew M. Diaz.......................... 56,000 84,000 30,003 32,629
</TABLE>
-------------------------
(1) Based on the reported closing bid price of $2.3438 per share of Common Stock
on June 30, 2000.
RETIREMENT PLAN
Effective April 1, 1991, the Company adopted a 401(k) plan, which covers
substantially all employees who have completed one year of employment. Under the
plan, eligible employees can contribute up to 15% of pre-tax compensation for
investment in a trust under the plan. Company contributions to the plan are
discretionary and determined annually by the Board of Directors. Employee
contributions, within certain limitations, are considered tax deferred under the
provisions of section 401(k) of the Internal Revenue Code. Withdrawals of tax
deferred amounts may be made upon termination of employment or earlier in the
event of certain defined hardship situations. Contributions made or accrued for
named executive officers are included under the "All Other Compensation" column
in the Summary Compensation Table.
Other than the 401(k) plan, the Company does not maintain any pension,
profit sharing, retirement or similar plans.
COMPENSATION COMMITTEE REPORT
The objectives of the Company's compensation program are to attract and
retain the best available executives, to motivate these executives to achieve
the Company's business goals and to recognize individual contributions as well
as overall business results. To achieve these objectives,
9
<PAGE> 12
the Company reviews its compensation program on a regular basis and attempts to
tie a portion of each executive's potential compensation to Company performance.
The key elements of the Company's executive compensation program consist of
fixed compensation, in the form of base salary, and variable compensation, which
is more directly tied to Company performance, in the form of long-term
compensation through stock option awards. In determining each element of
compensation to be awarded to an executive officer, the Compensation Committee
considers the executive's overall benefit package as well as the executive's
responsibilities and experience. The Compensation Committee also considers the
competitive marketplace for executive talent, including, to the extent possible,
a comparison to compensation packages for executives with similar levels of
experience and responsibility at other companies. In determining the
compensation package for Mr. Soika, the Company's President and Chief Executive
Officer, the Compensation Committee took into consideration both the
compensation packages of chief executive officers of companies the Compensation
Committee deemed comparable to the Company and the Compensation Committee's
assessment of Mr. Soika's individual performance and the Company's overall
performance.
The Compensation Committee reviewed the proposed fiscal 2000 salaries for
the executive officers at the Compensation Committee meeting on February 28,
2000. The Compensation Committee believed the proposed salary levels were in
line with or below the salary levels of executives in comparable positions of
responsibility.
In fixing the stock option grants, the Committee considered the current
stock holdings of each eligible officer, their responsibilities and historical
and anticipated future contributions to the Company's performance. The Committee
believes that selective grants of stock options promote a commonality of
interest between the Company's officers and its stockholders by giving the
Company's officers added incentives to maximize the Company's stock price.
The Compensation Committee is of the opinion that the compensation levels
for the named executive officers are reasonable when compared to similar
positions of responsibility and scope in similar industries and that an
appropriate amount of total compensation is based on the performance of the
Company, and therefore provides sufficient incentive for these individuals to
attain improved results in the future.
COMPENSATION COMMITTEE
Milton Datsopoulos
Karsten Houm
10
<PAGE> 13
STOCK PERFORMANCE
The following table tracks the value of $100 invested on June 30, 1995 in
the Company's Common Stock compared to the change in the S&P 500 Index and the
Nasdaq Index. The chart shows that $100 invested five years ago in the Common
Stock was worth $100 at June 30, 2000 compared to $267 for the S&P 500 and $425
for the Nasdaq Index:
CRITICARE SYSTEMS, INC.
STOCK PERFORMANCE COMPARED TO THE
S&P 500 AND THE NASDAQ INDEX
<TABLE>
<CAPTION>
S&P 500 NASDAQ CRITICARE
<S> <C> <C> <C> <C>
--------------------------------------------
June 30, 1995 100 100 100
June 28, 1996 123 127 144
June 30, 1997 162 154 213
June 30, 1998 208 203 120
June 30, 1999 252 288 88
June 30, 2000 267 425 100
</TABLE>
The following graph presents, for a five-year period, the cumulative total
stockholder return of the Company, the Standard & Poor's 500 Index and the
Nasdaq Index. Cumulative total stockholder return is defined as share price
appreciation assuming reinvestment of dividends.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
S&P 500 NASDAQ CRITICARE
------- ------ ---------
<S> <C> <C> <C>
6/30/95 100.00 100.00 100.00
6/28/96 123.00 127.00 144.00
6/30/97 162.00 154.00 213.00
6/30/98 208.00 203.00 120.00
6/30/99 252.00 288.00 88.00
6/30/00 267.00 425.00 100.00
</TABLE>
11
<PAGE> 14
SECURITY OWNERSHIP
The following table sets forth information with respect to beneficial
ownership of the Common Stock as of August 31, 2000 by (a) each person known to
the Company to own beneficially more than 5% of the Common Stock, (b) each
director of the Company, (c) each named executive officer, and (d) all directors
and executive officers as a group:
<TABLE>
<CAPTION>
NUMBER OF
NAME AND ADDRESS OF SHARES
BENEFICIAL OWNER(1) OWNED PERCENT
------------------- --------- -------
<S> <C> <C>
Emil H. Soika............................................... 60,969(2) *
Jeffrey T. Barnes........................................... 1,000(3) *
N.C. Joseph Lai, Ph.D....................................... 577,290(4) 6.6
Karsten Houm................................................ 111,065(5) 1.2
Milton Datsopoulos.......................................... 85,300(6) *
Stephen D. Okland........................................... 31,651(7) *
Drew M. Diaz................................................ 58,414(8) *
Gerhard J. Von der Ruhr..................................... 555,075(9) 6.2
All directors and executive officers as a group (11
persons).................................................. 981,825(10) 10.5
</TABLE>
-------------------------
* Less than 1%
(1) Unless otherwise indicated, the address of the beneficial owner is 20925
Crossroads Circle, Waukesha, WI 53186; the address of Mr. Von der Ruhr is
N112 W18741 Mequon Road, Germantown, WI 53022; the address of Mr. Houm is
Kristinelundvn 21, 0268 Oslo, Norway; and the address of Mr. Datsopoulos is
Central Square Building, 201 West Main, Missoula, Montana 59802.
(2) Includes 60,000 shares which Mr. Soika has the right to acquire under
currently exercisable options and 969 shares in Mr. Soika's account under
the Criticare Systems, Inc. Employee Stock Purchase Plan (the "Purchase
Plan").
(3) Does not include 1,547,529 shares of Common Stock purchased by Oxford
Bioscience Partners III L.P. on October 17, 2000, 220,555 shares of Common
Stock purchased by Oxford Bioscience Partners (Bermuda) III Limited
Partnership on October 17, 2000, and 18,189 shares of Common Stock
purchased by mRNA Fund L.P. on October 17, 2000. Mr. Barnes may be deemed
to share beneficial ownership of these shares, and he disclaims such
beneficial ownership except to the extent of his pecuniary interest in such
shares.
(4) Includes 116,000 shares owned of record by Helen Lai, Dr. Lai's wife;
184,000 shares in the aggregate owned of record by Dr. Lai's sons,
Christopher Lai and Thomas Lai; and 134,000 shares owned of record by the
Lai Family Foundation.
(5) Includes 95,000 shares which Mr. Houm has the right to acquire under
currently exercisable options.
(6) Includes 85,000 shares which Mr. Datsopoulos has the right to acquire under
currently exercisable options.
(7) Includes 23,500 shares which Mr. Okland has the right to acquire under
currently exercisable options and 4,651 shares in Mr. Okland's account
under the Purchase Plan.
(8) Includes 56,000 shares which Mr. Diaz has the right to acquire under
currently exercisable options and 2,414 shares in Mr. Diaz's account under
the Purchase Plan.
(9) Includes 410,000 shares owned of record by Ursula Von der Ruhr, Mr. Von der
Ruhr's wife, and 1,175 shares owned of record by Mark Von der Ruhr, Mr. Von
der Ruhr's son.
(10) Includes 344,500 shares of Common Stock the members of the group have a
right to acquire under currently exercisable options and 8,920 shares in
the accounts of the members of group under the Purchase Plan.
12
<PAGE> 15
PROPOSAL NO. 2:
AMENDMENT TO 1992 EMPLOYEE STOCK OPTION PLAN
PURPOSE AND EFFECT OF PROPOSED AMENDMENT
PROPOSED AMENDMENT. Subject to stockholder approval, the Board of Directors
has amended the 1992 Employee Stock Option Plan to increase from 1,540,000 to
2,040,000 the aggregate number of shares of Common Stock that may be issued or
transferred thereunder upon the exercise or payment of stock options.
PURPOSE OF PROPOSED AMENDMENT. The Corporation recognizes the importance of
attracting and retaining key employees of merit and stimulating the active
interest of those individuals in the development and financial success of the
Corporation. The Board of Directors believes that the 1992 Employee Stock Option
Plan is critically important to the furtherance of these objectives. The Board
of Directors also believes that, through the 1992 Employee Stock Option Plan,
the Corporation is able to enhance the prospects for its business activities and
objectives and more closely align the interests of key employees with those of
shareholders by offering key employees the opportunity to participate in the
Corporation's future through proprietary interests in the Corporation.
As of October 11, 2000, and absent stockholder approval of the proposed
amendment to increase the aggregate number of shares of Common Stock available
for issuance or transfer under the 1992 Employee Stock Option Plan, there would
be only 51,400 shares of Common Stock remaining available for issuance with
respect to additional stock options under the 1992 Employee Stock Option Plan.
The absence of an adequate number of shares of Common Stock available for
issuance or transfer under the 1992 Employee Stock Option Plan restricts both
the ability and the flexibility of the Corporation to effectively attract and
retain and adequately compensate key employees. The Board of Directors believes
that it is both necessary and desirable to increase from 1,540,000 to 2,040,000
the aggregate number of shares of Common Stock available for issuance or
transfer under the 1992 Employee Stock Option Plan in order to continue to
maintain the effectiveness of the 1992 Employee Stock Option Plan.
DESCRIPTION OF 1992 EMPLOYEE STOCK OPTION PLAN
The following description of the 1992 Employee Stock Option Plan is
qualified in its entirety by reference to the 1992 Employee Stock Option Plan,
as amended, which is attached hereto as Appendix A.
Under the 1992 Employee Stock Option Plan, the Board of Directors, or the
Compensation Committee if so designated by the Board of Directors, may grant
options to purchase shares of Common Stock to executives, other key employees
and directors of the Corporation. As of October 11, 2000, 48 persons hold stock
options under the 1992 Employee Stock Option Plan. Options granted generally
have been designated as nonqualified stock options. Options will expire at such
time as the Board of Directors or Compensation Committee determines, provided
that no stock option may be exercised later than the fifth anniversary of the
date of its grant. Options cannot be exercised until the vesting period, if any,
specified by the Board of Directors or Compensation Committee has expired.
Options are not transferable other than by will or the laws of descent and
distribution, and may be exercised during the life of the employee only by him
or her.
The option price per share is determined by the Board of Directors or the
Compensation Committee, but cannot be less than 100% of the fair market value of
the Common Stock on the date such option is granted. Payment of the exercise
price may be made in cash or by the surrender of shares of Common Stock having a
fair market value on the date of exercise equal to the exercise price.
13
<PAGE> 16
1992 EMPLOYEE STOCK OPTION PLAN BENEFITS
Set forth in the table below are the numbers of stock options granted in
fiscal 2000 to each of the named executive officers and certain groups.
<TABLE>
<CAPTION>
NAME AND POSITION OR GROUP NUMBER OF OPTIONS
-------------------------- -----------------
<S> <C>
Emil H. Soika, President and Chief Executive Officer........ --
Stephen D. Oakland, Vice President -- Domestic Sales........ --
Drew M. Diaz, Vice President -- International Sales......... 42,000
All executive officers, as a group.......................... 204,000
All directors who are not executive officers, as a group.... 100,000
All employees as a group.................................... 300,200
</TABLE>
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares of Common Stock present in
person or by proxy at the Annual Meeting is required for approval of the
proposed amendment to the 1992 Employee Stock Option Plan.
BOARD OF DIRECTORS RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSED
AMENDMENT TO THE 1992 EMPLOYEE STOCK OPTION PLAN.
PROPOSAL NO. 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed BDO Seidman, LLP as independent
certified public accountants to examine the financial statements of the Company
and its consolidated subsidiaries for the fiscal year ending June 30, 2001.
Unless otherwise directed, proxies will be voted in FAVOR of the ratification of
such appointment.
Although this appointment is not required to be submitted to a vote of
stockholders, the Board believes it appropriate as a matter of policy to request
that the stockholders ratify the appointment. If stockholder ratification is not
received, the Board will reconsider the appointment.
PROPOSALS FOR 2001 ANNUAL MEETING
Proposals which stockholders intend to present at the 2001 Annual Meeting
of Stockholders pursuant to Rule 14a-8 under the Exchange Act must be received
at the Company's principal offices in Waukesha, Wisconsin, no later than June
21, 2001 for inclusion in the proxy material for that meeting. Proposals
submitted other than pursuant to Rule 14a-8 will be considered untimely if
received after September 1, 2001 and the Company will not be required to present
any such proposal at the 2001 Annual Meeting of Stockholders. If the Board of
Directors decides to present a proposal despite its untimeliness, the people
named in the proxies solicited by the Board of Directors for the 2001 Annual
Meeting of Stockholders will have the right to exercise discretionary voting
power with respect to such proposal.
EXPENSES OF SOLICITATION
The cost of this solicitation of proxies will be paid by the Company. It is
anticipated that the proxies will be solicited only by mail, except that
solicitation personally or by telephone may also be made by the Company's
regular employees who will receive no additional compensation for their services
in connection with the solicitation. Arrangements will be made with brokerage
houses and
14
<PAGE> 17
other custodians, nominees and fiduciaries for the forwarding of solicitation
materials and the annual report to beneficial owners of stock held by such
persons. The Company will reimburse such parties for their expenses in so doing.
ANNUAL REPORT
A copy of the 2000 Annual Report of the Company accompanies this Proxy
Statement. A copy of the Company's Annual Report on Form 10-K for fiscal year
2000 will be provided without charge on written request of any stockholder whose
proxy is being solicited by the Board of Directors. The written request should
be directed to Corporate Secretary, Criticare Systems, Inc., 20925 Crossroads
Circle, Waukesha, Wisconsin 53186.
By Order of the Board of Directors
Mark Ruehle, Secretary
Waukesha, Wisconsin
October 27, 2000
15
<PAGE> 18
APPENDIX A
CRITICARE SYSTEMS, INC.
1992 EMPLOYEE STOCK OPTION PLAN
I. PURPOSE
The purpose of the Criticare Systems, Inc. Employee Stock Option Plan is:
(1) to promote the long-term growth and profitability of Criticare Systems, Inc.
(the "Company") and its subsidiaries; (2) to provide employees of the Company
and its subsidiaries with an incentive to achieve long-term corporate
objectives; (3) to attract and retain employees of outstanding competence; and
(4) to provide employees with a stake in the Company's long-term success.
II. DEFINITIONS
The following terms shall have the meanings shown:
2.1. "Board of Directors" shall mean the Board of Directors of the Company.
2.2. "Code" shall mean the Internal Revenue Code of 1986, as the same shall
be amended from time to time.
2.3. "Committee" shall mean the Stock Option Committee designated by the
Board of Directors. If no Stock Option Committee is designated, the "Committee"
shall mean the Compensation Committee of the Board of Directors.
2.4. "Common Stock" shall mean common stock of the Company.
2.5. "Fair Market Value" as of a given date shall mean the average of the
closing bid and the closing asked prices of a share of Common Stock on such date
on the National Association of Securities Dealers Automated Quotation System or,
if no such sales were reported on such date, on the next preceding date on which
sales were reported.
2.6. "Options" shall mean the options to purchase Common Stock granted
pursuant to this Plan.
2.7. "Plan" shall mean the Criticare Systems, Inc. 1992 Employee Stock
Option Plan.
2.8. "Subsidiary" shall mean any corporation which, at the time an option
is granted, qualifies as a subsidiary corporation under section 425(f) of the
Code or any similar provision hereafter enacted.
III. GENERAL
3.1. ADMINISTRATION.
(a) The Plan shall be administered by the Committee.
(b) The Committee shall have the authority, in its sole discretion,
from time to time: (i) to grant Options; (ii) to prescribe such
limitations, restrictions and conditions upon any such Options as the
Committee shall deem appropriate; and (iii) to interpret the Plan, to
adopt, amend and rescind rules and regulations relating to the Plan and to
make all other determinations and to take all other action necessary or
advisable for the implementation and administration of the Plan. A majority
of the Committee shall constitute a quorum and the action of a majority of
members of the Committee present at any meeting at which a quorum is
present, or action unanimously adopted in writing without a meeting, shall
be the action of the Committee.
<PAGE> 19
(c) All such actions shall be final, conclusive and binding upon the
participating employee. No member of the Committee shall be liable for any
action taken or decision made in good faith relating to the Plan.
3.2. PARTICIPATION. The Committee may grant Options under the Plan to any
director, officer or employee of the Company or any of its Subsidiaries who has
contributed or who has the ability to contribute to the long-term success of the
Company. In granting such awards and determining their form and amount, the
Committee shall give consideration to the functions and responsibilities of the
optionee, his or her potential long-term contributions to profitability and
sound growth of the Company and such other factors as the Committee may deem
relevant. No Option may be granted under the Plan to any person who, at the time
of the grant, beneficially owns 5% or more of the Company's common stock.
IV. OPTION TERMS AND CONDITIONS
The grant of the Option shall be evidenced by a written Option agreement in
a form approved by the Committee. Such Option shall be subject to the following
express terms and conditions and to such other terms and conditions, not
inconsistent with the Plan, which the Committee may deem appropriate.
4.1. EXERCISE PERIOD. The term of each Option shall be for such period as
the Committee shall determine, but for not more than give years from the date of
grant thereof, or, if longer, one year after the date such Option may be
exercised. No Option may be exercised more than 90 days after an option holder's
termination of employment except for termination for death, disability or
retirement after age 55, in which case no Option may be exercised more than one
year after termination.
4.2. OPTION PRICE. The option price per share for the Common Stock covered
by any Option shall be determined by the Committee, but shall not be less than
the Fair Market Value of the Common Stock on the date the Option is granted.
4.3. EXERCISE OF OPTION. An Option may be exercised from time to time by
written notice by the optionee to the Committee of his intent to exercise the
Option with respect to a specified number of shares. The specified number of
shares will be issued and transferred to the optionee on receipt by the
Treasurer of the Company of (i) such notice; (ii) payment for such shares; and
(iii) such other items or documentation as the Committee shall reasonably
request of the optionee.
4.4. PAYMENT OF PURCHASE PRICE ON EXERCISE. Each Option agreement shall
provide that the purchase price for the shares with respect to which an Option
is exercised shall be paid to the Company at the time of exercise in cash or by
delivery of shares of the Company's common stock having an aggregate Fair Market
Value equal to the purchase price for the shares with respect to which the
Option is to be exercised.
V. AGGREGATE LIMITATION ON SHARES OF COMMON STOCK
Shares of Common Stock which may be issued pursuant to Options granted
under the Plan may be either authorized and unissued shares of Common Stock or
authorized and issued shares of Common Stock held by the Company as treasury
stock. The number of shares of Common Stock reserved for issuance under the Plan
shall not exceed 2,050,000 shares, subject to adjustments pursuant to paragraph
6.8. Any shares of Common Stock subject to an Option which for any reason either
terminates unexercised or expires unexercised shall again be available for
issuance under the Plan.
2
<PAGE> 20
VI. MISCELLANEOUS
6.1. GENERAL RESTRICTION. Any Option granted under this Plan shall be
subject to the requirement that, if at any time the Committee shall determine
that any listing or registration of the shares of Common Stock or any consent or
approval of any governmental body or any other agreement or consent is necessary
or desirable as a condition of the granting of an Option or issuance of Common
Stock on exercise of an Option, such grant or issuance may not be consummated
unless such requirement is satisfied in a manner acceptable to the Committee.
6.2. NONASSIGNABILITY; HOLDING PERIOD. No Option granted under this Plan
may be: (a) assigned or transferred by the optionee, except by will or by the
laws of descent and distribution, or (b) exercised for at least six months after
the date of grant. During the life of the recipient, any Option shall be
exercisable only by such individual.
6.3. WITHHOLDING TAXES. Whenever the Company proposes or is required to
issue or transfer shares of Common Stock under this Plan, the Company shall have
the right to require the participant to remit to the Company an amount
sufficient to satisfy any federal, state and local withholding tax requirements
prior to the delivery of any certificate for such shares.
6.4. INVESTMENT REPRESENTATION. Each Option agreement may provide, upon
demand by the Committee, that the optionee or recipient shall deliver to the
Committee at the time of any exercise of any Option a written representation
that the shares to be acquired under such exercise are to be acquired for
investment and not for resale or with a view to the distribution thereof. Upon
such demand, delivery of such representation prior to delivery of any shares
issued upon exercise of an Option shall be a condition precedent to the right of
the optionee or such other person to purchase any shares.
6.5. NO RIGHT TO EMPLOYMENT. Nothing in this Plan or in any agreement
entered into pursuant to it shall confer upon any participant the right to
continue in the employment of the Company or a Subsidiary or affect any right
which the Company or a Subsidiary may have to terminate the employment of such
participant.
6.6. NONUNIFORM DETERMINATIONS. The Committee's determination under this
Plan (including, without limitation, its determinations of the persons to
receive Options) need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, awards under this Plan, whether
or not such persons are similarly situated.
6.7. NO RIGHTS AS SHAREHOLDERS. Recipients of Options under this Plan shall
have no rights as shareholders of the Company with respect thereto unless and
until certificates for shares of Common Stock are issued to them.
6.8. ADJUSTMENT OF STOCK. If a change occurs in the outstanding Common
Stock of the Company due to any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination or any similar
transaction, the Committee shall appropriately adjust the number of shares of
Common Stock which may be issued under this Plan, the number of shares of Common
Stock subject to Options theretofore granted under this Plan, the option price
of such Options and any and all other adjustments deemed appropriate by the
Committee to prevent substantial dilution or enlargement of the rights granted
to an optionee.
6.9. AMENDMENT OR TERMINATION OF THIS PLAN. The Committee, with the
approval of the Board of Directors, may, at any time, terminate this Plan or an
part thereof and may, from time to time, amend this Plan as it may deem
advisable. The termination or amendment of this Plan shall not, without the
consent of the participant, affect such participant's rights under Options
previously granted.
VII. EFFECTIVE DATE OF THE PLAN
The effective date of the Plan shall be December 5, 1992.
3
<PAGE> 21
PROXY
CRITICARE SYSTEMS, INC.
This Proxy Is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Emil H. Soika and Mark S. Ruehle, or
either one of them, each with full power of substitution and resubstitution, as
proxy or proxies of the undersigned to attend the Annual Meeting of Stockholders
of Criticare Systems, Inc. to be held on December 1, 2000 at 4:00 p.m., local
time, at 20925 Crossroads Circle, Waukesha, Wisconsin 53186, and at any
adjournment thereof, there to vote all shares of stock of Criticare Systems,
Inc. which the undersigned would be entitled to vote if personally present as
specified upon the following matters and in their discretion upon such other
matters as may properly come before the meeting.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and accompanying Proxy Statement, ratifies all that said
proxies or their substitutes may lawfully do by virtue hereof, and revokes all
former proxies.
Please sign exactly as your name appears hereon, date and return this Proxy.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO GRANT AUTHORITY TO ELECT
THE NOMINATED DIRECTORS, TO APPROVE THE AMENDMENT TO THE CRITICARE SYSTEMS, INC.
1992 EMPLOYEE STOCK OPTION PLAN AND TO RATIFY THE APPOINTMENT OF BDO SEIDMAN,
LLP AS INDEPENDENT ACCOUNTANTS FOR THE 2001 FISCAL YEAR. IF OTHER MATTERS COME
BEFORE THE MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BEST
JUDGMENT OF THE PROXIES APPOINTED.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
<TABLE>
<S><C>
------------------------------------------------------------------------------------------------------------------------------------
-------- --------
| |
| |
| |
CRITICARE SYSTEMS, INC. 2000 ANNUAL MEETING OF STOCKHOLDERS
1. ELECTION OF DIRECTORS: / / FOR all / /WITHHOLD
(terms expiring at the 2003 1-KARSTEN HOUM 2-EMIL H. SOIKA nominees listed AUTHORITY to
Annual Meeting) to the left vote for all
(except as nominees listed
specified below). to the left.
--------------------------------------
(Instructions: To withhold authority to vote for any indicated
nominee, write the number(s) of the nominee(s) in the box provided
to the right.)
--------------------------------------
2. To approve and adopt the proposed amendment to the Criticare Systems, Inc. / / FOR / / AGAINST / / ABSTAIN
1992 Employee Stock Option Plan.
3. To ratify the appointment of BDO Seidman, LLP as independent accountants for / / FOR / / AGAINST / / ABSTAIN
the 2001 fiscal year.
4. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting.
Date NO. OF SHARES
----------------------------- ----------
CHECK APPROPRIATE BOX
Indicate changes below:
-----------------------------------------------
Address Change? / / Name Change? / /
-----------------------------------------------
Signature(s) in Box
If signing as attorney, executor, administrator,
trustee or guardian, please add your full title as
such. If shares are held by two or more persons, all
holders must sign the Proxy.
| |
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</TABLE>
