<TABLE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
File No. 0-10210
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Sections 240.14a-12
MEDCROSS, INC.
(Name of Registrant As Specified in its Charter)
Medcross, Inc. (Name of Person(s) Filing the Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
1) Title of each class of securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
N/A
4) Proposed maximum aggregate value of transaction:
N/A
<PAGE>
MEDCROSS, INC.
September 22, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders of Medcross, Inc. on Tuesday, October 17, 1995. The
meeting will begin at 9:00 a.m. at the Tampa Airport Marriott Hotel,
Tampa International Airport, Highway 275, Exit 20, Tampa, Florida.
Information regarding each of the matters to be voted upon at the
Annual Meeting is contained in the attached Proxy Statement. We urge
you to read the Proxy Statement carefully. The Proxy Statement is
being mailed to all shareholders on or about September 22, 1995.
Because it is important that your shares be voted at the Annual
Meeting, whether or not you plan to attend in person, we urge you to
complete, date, and sign the enclosed proxy card and return it as
promptly as possible in the accompanying envelope. If you are a
shareholder of record and do attend the Annual Meeting and wish to
vote your shares in person, even after returning your proxy, you still
may do so.
We look forward to seeing you in Tampa, on Tuesday, October 17,
1995.
Very truly yours,
/s/ Henry Toh
Henry Toh, President
3227 Bennet Street North - St. Petersburg, FL 33713
Telephone 813-521-1793
Fax 813-521-4249
<PAGE>
MEDCROSS, INC.
3227 Bennet Street North
St. Petersburg, FL 33713
______________________________
Notice of Annual Meeting of Shareholders
To be Held October 17, 1995
______________________________
To the Shareholders of Medcross, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
MEDCROSS, INC., a Florida corporation (the "Company"), will be held at
Tampa Airport Marriott Hotel, Highway 275, Exit 20, Tampa, Florida, on
October 17, 1995, at 9:00 a.m. and thereafter as it may from time to
time be adjourned, for the following purposes:
1. To elect two Class II Directors to serve for three years or
until their successors have been duly elected and qualified.
2. To approve the adoption of the Medcross, Inc. 1995 Director
Stock Option and Appreciation Rights Plan which provides for
the issuance of Incentive Stock Options, Non-Qualified Stock
Options and Stock Appreciation Rights.
3. To approve the adoption of the Medcross, Inc. 1995 Employee
Stock Option and Appreciation Rights Plan which provides for
the issuance of Incentive Stock Options, Non-Qualified Stock
Options and Stock Appreciation Rights.
4. To ratify the selection of Coopers & Lybrand as the Company's
independent accountants.
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders should note that the Company's By-Laws provide that
no proposals or nominations of Directors by Shareholders shall be
presented for vote at an Annual Meeting of Shareholders unless notice
complying with the requirements in the By-Laws is provided to the
Board of Directors or the Company's Secretary no later than the close
of business on the fifth day following the day that notice of the
meeting is first given to Shareholders.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
DATE AND SIGN THE ENCLOSED FORM OF PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED ENVELOPE TO AMERICAN STOCK TRANSFER & TRUST COMPANY, 40 WALL
STREET, 46TH FLOOR, NEW YORK, NEW YORK 10005.
By Order of the Board of Directors,
/s/ Stephanie Giallourakis
Stephanie Giallourakis, Secretary
St. Petersburg, Florida
September 22, 1995
<PAGE>
MEDCROSS, INC.
Proxy Statement
Dated September 22, 1995
Annual Meeting of Shareholders
SUMMARY
This Proxy Statement is being furnished to Shareholders in
connection with the solicitation of proxies by the Board of Directors
of Medcross, Inc., a Florida corporation (the "Company"), for use at
the Annual Meeting of Shareholders (the "Annual Meeting") to be held
on October 17, 1995, at 9:00 a.m. at the Tampa Airport Marriott Hotel,
Highway 275, Exit 20, Tampa, Florida, as set forth in the accompanying
Notice of Annual Meeting and at any adjournments thereof. This Proxy
Statement and the accompanying form of proxy are first being mailed to
Shareholders on or about September 22, 1995.
The Annual Meeting has been called to consider and take action on
the following proposals:
1. To elect two Class II Directors to serve for three years or
until their successors have been duly elected and qualified.
2. To approve the adoption of the Medcross, Inc. 1995 Director
Stock Option and Appreciation Rights Plan which provides for
the issuance of Incentive Stock Options, Non-Qualified Stock
Options and Stock Appreciation Rights.
3. To approve the adoption of the Medcross, Inc. 1995 Employee
Stock Option and Appreciation Rights Plan which provides for
the issuance of Incentive Stock Options, Non-Qualified Stock
Options and Stock Appreciation Rights.
4. To ratify the selection of Coopers & Lybrand as the Company's
independent accountants.
5. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Affirmative action with respect to each of the above proposals has
been taken by a majority of the Company's Board of Directors and the
Board of Directors recommends that the Shareholders vote in favor of
each of the proposals. The close of business on September 15, 1995,
has been fixed as the record date for the determination of
Shareholders entitled to notice of, and to vote at, the Annual Meeting
and any adjournment thereof (the "Record Date"). The stock transfer
books will not be closed.
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is being furnished to Shareholders in
connection with the solicitation of proxies by the Board of Directors
of the Company for use at the Annual Meeting of Shareholders to be
held at the time, place, and for the purposes set forth in the
accompanying Notice of Annual Meeting and at any adjournments thereof.
As of the Record Date there are 1,751,243 shares of the Company's
common stock, par value $.007 per share (the "Common Stock"), issued
and outstanding, 200,000 shares of the Company's Class A Variable Rate
Cumulative Convertible Preferred Stock, par value $10.00 per share
<PAGE>
(the "Class A Preferred Stock"), issued and outstanding, and 7,500
shares of the Company's Class B Variable Rate Cumulative Convertible
Preferred Stock, par value $10.00 per share (the "Class B Preferred
Stock"), issued and outstanding.
As of the Record Date, all of the present Directors and executive
officers of the Company, as a group of 5 persons, beneficially owned
701,960 shares of Common Stock (10% of the votes represented, assuming
the Class A Preferred Stock and the Common Stock vote as a single
class). The Company believes that such officers and Directors intend
to vote their shares for each of the proposals set forth herein.
Each share of Common Stock of record as of the Record Date is
entitled to one vote in all matters properly brought before the Annual
Meeting. Each share of the Class A Preferred Stock is entitled to
approximately 24.47 votes, or an aggregate of 4,894,461 votes, in all
matters brought before the Annual Meeting. Generally, the Class B
Preferred Stock is non-voting. The holders of the Common Stock and
the Class A Preferred Stock will vote as one group on the Proposals
set forth in the accompanying Notice of Annual Meeting.
The Class II Director nominees named in Proposal 1 of this Proxy
Statement must receive a plurality of the votes cast by the shares
entitled to vote to be elected. In order to obtain the approval of
Proposals 2, 3 and 4, the votes cast by the holders of the Common
Stock and Class A Preferred Stock represented at the Annual Meeting
and entitled to vote, in person or by proxy, taken as one voting
group, favoring the action must exceed the votes cast opposing the
action. With respect to voting on Proposals 1 through 4 of the
accompanying Notice of Annual Meeting, the presence, in person or by
proxy, of a majority of the votes entitled to be cast constitutes a
quorum at the Annual Meeting. Abstentions and broker non-votes will
be counted only for the purpose of determining the existence of a
quorum.
The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1994, including audited financial statements, and
its Quarterly Report on Form 10-QSB, covering the six months ended
June 30, 1995, are enclosed herewith.
Proxies given by Shareholders of record for use at the Annual
Meeting may be revoked at any time prior to the exercise of the powers
conferred. In addition to revocation in any other manner permitted by
law, Shareholders of record giving a proxy may revoke the proxy by an
instrument in writing, executed by the Shareholder or his attorney
authorized in writing or, if the Shareholder is a corporation, under
its corporate seal, by an officer or attorney thereof duly authorized,
and deposited either at the corporate headquarters of the Company at
any time up to and including the last business day preceding the day
of the Annual Meeting, or any adjournment thereof, that the proxy is
to be used, or with the chairman of such meeting on the day of the
Annual Meeting or adjournment thereof, and upon either of such
deposits the proxy is revoked.
ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES
SPECIFIED ON SUCH PROXIES. PROXIES WILL BE VOTED IN FAVOR OF A
PROPOSAL IF NO CONTRARY SPECIFICATION IS MADE. ALL VALID PROXIES
OBTAINED WILL BE VOTED AT THE DISCRETION OF THE BOARD OF DIRECTORS
WITH RESPECT TO ANY OTHER BUSINESS THAT MAY COME BEFORE THE MEETING.
<PAGE>
The cost of soliciting proxies in the accompanying form will be
borne by the Company. The Company may reimburse brokerage firms and
others for their expenses in forwarding proxy materials to the
beneficial owners and soliciting them to execute the proxies.
DISSENTERS' RIGHTS OF APPRAISAL
The Board of Directors has not proposed any action for which the
laws of the State of Florida, the Certificate of Incorporation or By-
Laws of the Company provide a right of a Shareholder to dissent and
obtain payment for shares.
INTEREST OF OFFICERS AND DIRECTORS
IN MATTERS TO BE ACTED UPON
Mr. Joel S. Kanter and Mr. Henry Y.L. Toh, Class II Directors,
have been nominated for reelection to the office of Director and serve
in their capacities as Directors as representatives of the record
owners of the Class A Preferred Stock. See "Shareholders' Agreement"
for a description of certain provisions of the Shareholders' Agreement
among the owners of the Class A Preferred Stock relating to the
election of Directors of the Company. Each of the officers and
directors of the Company has an interest in the adoption of Proposals
2 and 3 insofar as such persons will be qualified to receive options
and other benefits under the Stock Option Plans subject of Proposals 2
and 3.
STOCK OWNERSHIP
The Common Stock and Class A Preferred Stock constitute the only
voting securities of the Company. Each share of Class A Preferred
Stock is convertible, at the option of the holder thereof, into
approximately 24.47 shares, subject to adjustment upon the occurrence
of certain events, of the Company's Common Stock. The table below
sets forth information, to the best of the Company's knowledge, with
respect to the total number of shares of the Company's Common Stock
and Class A Preferred Stock beneficially owned by each Director,
nominee for Director, beneficial owner of more than five percent of
either security, and all Directors, nominees for Director, and
officers as a group, as reported by each such person, as of the Record
Date. On that date, there were 1,751,243 shares of the Company's
Common Stock issued and outstanding and 200,000 shares of the
Company's Class A Preferred Stock issued and outstanding. The table
below also sets forth as to each holder the percent of votes
represented assuming the Common Stock and Class A Preferred Stock vote
as a single class.
For information relating to provisions of a Shareholders'
Agreement among the owners of the Class A Preferred Stock relating to
the election of Directors of the Company, see "Shareholders'
Agreement."
<CAPTION>
Name and Address
of Total
Beneficial Number Percent of Percent
Owner Power Title of Class of Shares Class<F1> of Votes
<S> <C> <C> <C> <C>
Four M International,Inc.<F3> Common Stock 3,915,570<F2> 69.1% 58.9%
Casa Fortuna, S.A.<F3> Class A Preferred Stock 160,000 80.0%
Linkcost, Ltd.<F3>
1980 Post Oak Boulevard
Houston, Texas
77056
<PAGE>
Walnut Capital Corp.<F3> Common Stock 611,807<F2> 25.9% 9.2%
2 North LaSalle Class A Preferred Stock 25,000 12.5%
Chicago, IL 60602
Windy City, Inc.<F3> Common Stock 183,542<F2> 9.5% 2.8%
8000 Towers Crescent Dr. Class A Preferred Stock 7,500 3.8%
Suite 780
Vienna, VA 22180
Canadian Imperial Bank of Common Stock 183,542<F2> 9.5% 2.8%
Commerce Trust Company Class A Preferred Stock 7,500 3.8%
(Bahamas) Limited, Trustee<F3>
Post Office Box N-3933
Nassau, Bahamas
R. Huston Babcock, M.D. Common Stock 651,722<F4> 33.6% 9.5%
731 12th Street North
St. Petersburg, FL 33705
J.W. Charles Financial Common Stock 250,000<F5> 12.5% 3.6%
Services, Inc.
980 North Federal Highway
Boca Raton, FL 33432
Garnier Holdings, Ltd. Common Stock 178,714 10.2% 2.7%
P.O. Box 22657
Houston, TX 77227-2765
Po Shin Wong<F3> Common Stock 2,334<F6> <F8> <F8>
Henry Y.L. Toh<F3> Common Stock 26,904<F6> 1.5% 0.4%
Joel S. Kanter<F3> Common Stock 2,334<F6> <F8> <F8>
All Officers and Directors Common Stock 701,960<F7> 35.4% 10.2%
as a Group (5 Persons)
<FN>
<F1> Percentages of Common Stock are calculated on the basis of the
number of shares of Common Stock issued and outstanding on the
Record Date, plus the number of shares of Common Stock into which
the shares of Class A Preferred Stock and Class B Preferred Stock
owned by the named shareholder are convertible, plus any shares
issuable pursuant to options exercisable within 60 days by the
named shareholder.
<F2> Represents the number of shares of Common Stock into which shares
of Class A Preferred Stock owned by the named shareholder are
convertible.
<PAGE>
<F3> Linkcost, Ltd. ("Linkcost") and Casa Fortuna, S.A. ("Casa"),
through their ownership and control of Four M International, Inc.
("Four M"), may be deemed the beneficial owners of such shares but
do not own any shares of record. Four M together with Walnut
Capital Corp. ("WCC"), Windy City, Inc. ("WCI") and Canadian
Imperial Bank of Commerce Trust Company (Bahamas) Limited ("CIB")
may be deemed to comprise a group within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934. Together, the
members of the group may be deemed to beneficially own 200,000
shares of Class A Preferred Stock, representing 73.7% of the
voting control of the Company. Four M, Casa & Linkcost, as set
forth in a Schedule 13D, disclaim beneficial ownership of the
40,000 shares of Class A Preferred Stock owned by WCC, WCI and
CIB. WCC, WCI and CIB, in a Schedule 13D filed with the SEC on or
about April 10, 1992, disclaim beneficial ownership of the 160,000
shares of Class A Preferred Stock owned by Four M and each of WCC,
WCI and CIB disclaim beneficial ownership of shares of Class A
Preferred Stock owned by the others of them. Mr. Toh, a Director
of the Company and one of two directors of Four M and Ms. Wong, a
Director of the Company and the sole director of Linkcost and
Casa, have both disclaimed beneficial ownership of the shares
owned by Four M. Mr. Kanter, a Director of the Company and an
officer and director of WCI and WCC has disclaimed beneficial
ownership of the shares owned by WCC, WCI, and CIB. See
"Shareholders' Agreement" for a description of the Shareholders'
Agreement among the members of the group relating to election of
Directors and other matters.
<F4> Includes: (i) 1,429 shares owned by wife; (ii) 183,542 shares of
Common Stock into which the 7,500 shares of Class B Preferred
Stock owned by the named shareholder are convertible; and (iii)
2,334 shares issuable pursuant to options exercisable within 60
days.
<F5> Represents shares issuable pursuant to a currently exercisable
warrant.
<F6> Represents shares issuable pursuant to options exercisable within
60 days.
<F7> Includes 86,756 shares pursuant to options exercisable within 60
days and 183,542 shares of Common Stock into which the 7,500
shares of Class B Preferred Stock are convertible.
<F8>* Less than 1%.
</FN>
SHAREHOLDERS' AGREEMENT
Ms. Po Shin Wong and Messrs. Henry Y.L. Toh and Joel S. Kanter
were named as Directors of the Company to represent the purchasers of
and present owners of record of the Company's Class A Preferred Stock
pursuant to the Stock Purchase Agreement dated as of February 19, 1992
between Four M International, Inc., a Barbados corporation (Four M),
Walnut Capital Corp., a Delaware corporation (WCC), Windy City, Inc.,
a Delaware corporation (WCI), and Canadian Imperial Bank of Commerce
Trust Company (Bahamas) Limited, a trust company organized under the
laws of The Commonwealth of the Bahamas (CIB), as trustee
(collectively, the "Purchasers") and the Company. The Purchasers are
all parties to a Shareholders' Agreement dated February 19, 1992 and
amended in December 1994 (the "Shareholders' Agreement"), that
contains certain provisions restricting the transfer or the
disposition of the Class A Preferred Stock and any shares of Common
Stock into which shares of Class A Preferred Stock may be converted
other than certain sales made on the open market pursuant to Rule 144.
The Shareholders' Agreement requires Four M and any affiliates to whom
its shares may be transferred (the "Four M Group") to vote, so long as
WCC, WCI, and CIB (the "Kanter Group") retain voting control of shares
of capital stock of the Company representing at least 20% of the Class
A Preferred Stock, all shares owned by the Four M Group in favor of
Mr. Kanter (or certain substitutes if Mr. Kanter is unavailable) as a
director of the Company. The Shareholders' Agreement requires the
Kanter Group to vote all shares owned by the Kanter Group in favor of
<PAGE>
the election as a director of the Company the persons designated in
writing by Four M, one of which shall be Mr. Toh (or certain
substitutes if Mr. Toh is unavailable). In addition, the
Shareholders' Agreement provides that, if Four M so requests, the
Kanter Group must vote all shares that they may at the time own in
favor of (i) the removal of a director previously designated by Four
M, and (ii) the election of a replacement designated by Four M. Also,
the Shareholders' Agreement provides that if a Kanter Group
shareholder votes in favor of the removal of a director designated by
Four M other than as requested by Four M, such shareholder shall
simultaneously vote all shares that such shareholder may at the time
own in favor of the election of a replacement designated by Four M.
The Shareholders' Agreement also requires the Kanter Group
shareholders to vote all shares that they own in favor of any
amendment, alteration, or repeal of any provision of Article V or VI
of the Amended and Restated Articles of Incorporation of the Company
that may be proposed by the Four M Group. Certain provisions of the
Shareholders' Agreement restrict and limit the ability of the Company
to purchase or otherwise acquire shares of Class A Preferred Stock, to
effect any sale, lease, assignment, transfer, or other conveyance of
all or substantially all of the assets or business of the Company or
its subsidiaries to Four M or any affiliate, or to consolidate or
merge the Company or any subsidiary with Four M or with any affiliate.
The Shareholders' Agreement grants holders of outstanding shares of
Class A Preferred Stock and Common Stock certain preemptive rights
with regard to issuances of shares of Common Stock or warrants,
options, or other rights to purchase shares of Common Stock or
securities convertible into Common Stock.
DIRECTORS AND EXECUTIVE OFFICERS
Biographical information with respect to the present executive
officers and Directors of the Company, including the nominees for
Director, is set forth below. There are no family relationships
between any present executive officers and Directors.
Po Shin Wong, Chairman of the Board of Directors (age 52): Ms.
Wong was elected by the Board of Directors as a Class III Director in
March 1992 to fill a vacancy created by the expansion of the Board of
Directors and as Chairman of the Board of Directors of the Company.
Ms. Wong has served as a director of Grand Fur Ltd., an investment
management, trading, and manufacturing company in Hong Kong, since
1973 and is the sole director of Linkcost and Casa, which corporations
indirectly own Four M.
Henry Y. L. Toh, Vice Chairman of the Board of Directors (age 38):
Mr. Toh was elected by the Board of Directors as a Class II Director
in March 1992 to fill a vacancy existing prior to that date and as
Vice Chairman of the Board of Directors. Mr. Toh was elected
President of the Company on May 24, 1993 and has served as acting
Chief Financial Officer and Treasurer since September 1995. Mr. Toh
is a director of Four M. Mr. Toh served as a senior tax manager in
international taxation and mergers and acquisitions with KPMG Peat
Marwick from March 1980, to February 17, 1992. He is a graduate of
Rice University. Mr. Toh has been nominated for reelection as a Class
II Director at the Annual Meeting of Shareholders.
Joel S. Kanter, President, Windy City, Inc. (age 38): Mr. Kanter
was elected by the Board of Directors as a Class II Director in March
1992 to fill a vacancy created by the expansion of the Board of
Directors. Mr. Kanter has been the President of Windy City, Inc., a
closely-held investment management and consulting firm, since July
1986 and serves as a director thereof. Mr. Kanter is also president
and director of Walnut Financial Services, a provider of financial
<PAGE>
services, a director of Alamar BioSciences, Inc. a manufacturer of
medical diagnostic products, a director of I-Flow Corporation, a
public company that manufactures home infusion pumps, a director of
Concept Technologies Group, Inc., a public company that manufacturers
professional audio equipment, Clean America Corp., a public company
engaged in hazardous waste disposal, and GranCare, Inc., a public
company that owns and operates nursing homes and pharmacies. Mr.
Kanter has been nominated for reelection as a Class II Director at the
Annual Meeting of Shareholders.
R. Huston Babcock, M.D., Neurosurgeon (age 64). Dr. Babcock, a
Class III Director of the Company, served as Chairman of the Board of
Directors of the Company from its inception in April 1983 until March
1992. He was President of the Company from inception until November
1987. He was medical director of the Company from November 1987 to
February 1993. Dr. Babcock is a neurosurgeon and has been engaged in
the full-time private practice of medicine on the West Coast of
Florida since 1960.
Dorothy L. Michon, Vice President - Operations (age 40): Ms.
Michon joined the Company in August 1983 as C.T. Technologist, was
promoted to Technical Director in 1983, and Associate Director of
Operations in 1985. She was elected as the Company's Vice President -
Operations in March 1990. She holds an Associates degree in Radiology
Technology and a Bachelor of Science degree in Professional Management
from Nova University.
Each officer of the Company is chosen by the Board of Directors
and holds his or her office until his or her successor shall have been
duly chosen and qualified or until his or her death or until he or she
shall resign or be removed as provided by the By-Laws.
There are no material proceedings that any director, officer or
affiliate of the Company, any owner of record or beneficially of more
than five percent of any class of voting securities of the Company, or
any associate of any such director, officer, affiliate of the Company
or security holder is a party adverse to the Company or any of its
subsidiaries or has a material interest adverse to the Company or any
of its subsidiaries.
Compliance with Section 16(a) of the Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") requires the Company's officers and directors,
and persons who own more than ten percent of a registered class of the
Company's equity securities, to file reports of ownership and changes
in ownership of equity securities of the Company with the Securities
and Exchange Commission (SEC) and NASDAQ. Officers, directors, and
greater than ten percent shareholders are required by SEC regulation
to furnish the Company with copies of all Section 16(a) forms that
they file.
Based solely upon a review of Forms 3, Forms 4, and Forms 5
furnished to the Company pursuant to Rule 16a-3 under the Exchange
Act, the Company believes that all such forms required to be filed
pursuant to Section 16(a) of the Exchange Act were timely filed, as
necessary, by the officers, directors, and security holders required
to file the same except that the Company has never received copies of
any Forms 3, Forms 4, or Forms 5 from Garnier Holdings, Ltd., a
greater than ten percent shareholder, or from JW Charles Financial
Services, Inc., which entity had a contractual right to receive a
warrant to purchase greater than ten percent of the Company's common
<PAGE>
stock pursuant to a financial consulting agreement dated as of
November 4, 1994, which warrants were not issued by the Company until
March 1995.
Certain Relationships and Related Transactions
During the first quarter of 1995, the Company received advances
totalling $218,000 from Mortgage Network International, payable on
demand. The Company's Vice Chairman/President has management control
over Mortgage Network International. The Board of Directors approved
delivery of a promissory note with a maturity of October 1, 1995 and
bearing interest at one percent over the prime rate of Southwest Bank
of Texas, N.A. concerning such advances.
THE BOARD OF DIRECTORS
The Company's Certificate of Incorporation provides that the
number of Directors of the Company shall not be less than five nor
more than nine. The Board of Directors currently consists of four
members with one vacancy due to the resignation in July 1995 of Bijan
Taghavi as a Class I director of the Company. Pursuant to the Bylaws
of the Company, such vacancy may be filled by a majority vote of the
remaining directors. The Company's Certificate of Incorporation
provides that the Board of Directors shall be divided into three
classes. The terms of office of Messrs. Joel S. Kanter and Henry Y.L.
Toh, Class II Directors, expire at the 1995 Annual Shareholders'
Meeting. The terms of office of Ms. Po Shin Wong and Dr. R. Huston
Babcock, Class III Directors, expire at the succeeding annual
shareholders' meeting. The term of office of the Class I director to
be appointed to fill the vacancy on the Board of Directors will expire
at the second succeeding shareholders' meeting.
The Board of Directors held three meetings during the fiscal year
ended December 31, 1994. The Audit Committee and the Compensation
Committee did not meet separately during the fiscal year ended
December 31, 1994. During the fiscal year ended December 31, 1994,
each incumbent director attended all of the meetings of the Board of
Directors, except for Mr. Kanter, who did not attend one meeting.
Committees of the Board of Directors
Audit Committee. The Audit Committee is responsible for making
recommendations to the Board of Directors concerning the selection and
engagement of the Company's independent certified public accountants
and reviews the scope of the annual audit, audit fees, and results of
the audit. The Audit Committee also reviews and discusses with
management and the Board of Directors such matters as accounting
policies and internal accounting controls, and procedures for
preparation of financial statements. Dr. Babcock is Chairman of the
Audit Committee and Mr. Kanter is a member of such Committee.
Compensation Committee. The Compensation Committee approves the
compensation for executive employees of the Company. Ms. Wong is
Chairperson of the Compensation Committee and Messrs. Kanter and
Babcock are members of such Committee.
Executive Committee. The Executive Committee is vested with all
the powers of the Board of Directors, subject to the limitations set
forth in the Florida Business Corporation Act. Ms. Wong is Chairperson
of the Executive Committee and Messrs. Toh and Kanter are members of
such Committee.
<PAGE>
The Company has no nominating committee or any committee serving a
similar function.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table
The Company did not have any executive officers who served as such
at the end of the last fiscal year that earned more than $100,000 in
salary and bonus. The following table sets forth the aggregate cash
compensation paid for services rendered to the Company during the last
three fiscal years by the Company's Chief Executive Officer.
<CAPTION>
<---- Long-Term Compensation ---->
<--------- Annual Compensation ----------> <------ Awards ------> <-Payout->
Securities
Other Restricted Underlying
Name and Annual Stock Options/ LTIP All Other
Principal Position Year Salary($) Bonus($) Compensation($) Awards SARs(#) Payouts($) Compensation($)
- ------------------ ---- --------- -------- --------------- ---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Henry Y.L. Toh<F1> 1994 54,362 0 N/A 0<F2> 1,167 0 815<F3>
President and CEO 1993 54,000 0 N/A 0 81,900 0 810<F3>
1992 41,556 0 N/A 0 1,167 0 365<F3>
_______________
<FN>
<F1> Mr. Toh began his employment with the Company in April 1992 and was appointed
President and CEO in May 1993.
<F2> Mr. Toh had no restricted stock holdings at the end of the last fiscal year.
<F3> Represents Company contributions to 401(k) plan on behalf of Mr. Toh.
</FN>
Option/SAR Grants in Last Fiscal Year (1994)
The following table sets forth certain information with respect to
the options granted during the last fiscal year to the Company's Chief
Executive Officer.
<CAPTION>
Number of Securities Percent of Total Excercise
Underlying Options/SARs Granted to or Base
Name Options/SARs Granted(#) Employees in Fiscal Year Price($/Sh) Expiration Date
- -------------------- ----------------------- ------------------------ ----------- ---------------
<S> <C> <C> <C> <C>
Henry Y.L. Toh 1,167 50% $3.875 6/23/2004
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-
End Option/SAR Values
The following table sets forth certain information with respect to
options exercised during fiscal 1994 by the Company's Chief Executive
Officer and with respect to unexercised options held by such person at
the end of fiscal 1994.
<PAGE>
<CAPTION>
Shares Number of Securities Value of Unexercised in the
Acquired on Value Underlying Unexercised Money Options/SARs at
Name Exercise(#) Realized($) Options/SARs at FY-End(#) FY-End($)<F1>
- -------------------- ----------- ----------- -------------------------- ---------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Henry Y.L. Toh -- -- 9,357 74,877 $292 $0
_______________
<FN>
<F1> The calculations of the value of unexercised options are based on the difference
between the closing bid price on NASDAQ of the Common Stock on December 31,
1994, and the exercise price of each option, multiplied by the number of shares
covered by the option.
</FN>
Director Compensation
Directors are compensated $100 for each board meeting attended.
In addition, directors have been automatically granted options under
the Company's 1992 Director Plan to purchase 1,167 shares of common
stock on the last Friday in June each year. Pursuant to the 1995
Director Plan subject of Proposal 2, Directors will receive options in
accordance with the following formula: On (i) October 17, 1995, (ii)
the first business day of January 1996 and (iii) the first business
day of each January thereafter, each member of the Board of Directors
then serving will receive options to purchase 10,000 shares at an
exercise price equal to the fair market value of the common stock on
the date of the grant. The Compensation Committee may also grant
options at its discretion to reward directors for extraordinary
service to the Company.
Consulting Agreements
The Company has entered into a Consulting Agreement for the three
month period ended October 23, 1995 with Bijan Taghavi, formerly Vice
President of Acquisitions and a director of the Company. Pursuant to
the Agreement, Mr. Taghavi shall provide consulting services as
requested by the President and shall be paid fees at the rate of
$4,208 per month. The agreement contains mutual release, non-
competition and confidentiality provisions.
The Company intends to enter into additional consulting
arrangements from time to time in the future in implementation of the
Company's internal reorganization plan including the execution of a
consulting agreement with the Company's former Senior Vice President
and Chief Financial Officer, Timothy R. Barnes. Such agreement is
expected to be for a term expiring February 6, 1996, to provide for
the issuance to Mr. Barnes of warrants to purchase 36,858 shares of
Common Stock exercisable at a purchase price equal to the fair market
value of the Common Stock at the date of grant and to contain non-
competition and confidentiality provisions.
PROPOSAL 1
TO ELECT TWO CLASS II DIRECTORS TO SERVE FOR THREE YEARS OR UNTIL
THEIR SUCCESSORS HAVE BEEN DULY ELECTED AND QUALIFIED
The Board of Directors has concluded that the reelection of
Messrs. Henry Y.L. Toh and Joel S. Kanter as Class II Directors is in
the best interest of the Company and recommends approval of their
election. Biographical information concerning Messrs. Toh and Kanter
can be found under "Directors and Executive Officers." There is one
<PAGE>
vacancy on the Board of Directors due to the resignation in July 1995
of Bijan Taghavi, a Class I Director. No replacement for Mr. Taghavi
has been selected as of the date hereof. The remaining Directors will
continue to serve in their positions for the remainder of their terms.
See "Shareholders' Agreement" for a description of the provisions
of the Shareholders' Agreement among the record owners of the Class A
Preferred Stock relating to the election of Directors of the Company.
Unless otherwise instructed or unless authority to vote is
withheld, the enclosed proxy will be voted for the election of Messrs.
Henry Y.L. Toh and Joel S. Kanter, the nominees listed herein.
Although the Board of Directors of the Company does not contemplate
that such nominees will be unable to serve, if such a situation arises
prior to the Annual Meeting, the persons named in the enclosed proxy
will vote for the election of such other person as may be nominated by
the Board of Directors.
The Board of Directors unanimously recommends a vote FOR the
election of Messrs. Henry Y.L. Toh and Joel S. Kanter, the nominees
listed above.
PROPOSAL 2
TO APPROVE THE ADOPTION OF THE MEDCROSS, INC.
1995 DIRECTOR STOCK OPTION AND APPRECIATION RIGHTS PLAN
The Board of Directors has adopted a resolution adopting the
Medcross, Inc. 1995 Director Stock Option and Appreciation Rights
Plan, which plan shall provide for the issuance of Incentive Options,
Non-Qualified Options and SARs. Pursuant to the resolution, the Board
of Directors has declared it to be advisable and in the best interests
of the Company and its stockholders that the Company adopt such plan
(previously defined as the "1995 Director Plan") and has directed that
the proposal to adopt the 1995 Director Plan, as set forth herein, be
submitted to the stockholders of the Company for vote at the Meeting.
The Board of Directors further adopted a resolution authorizing the
termination of future grants of options under the Medcross, Inc. 1992
Director Plan (the "1992 Director Plan"). There are 87,156
outstanding options granted under the 1992 Director Plan which options
will continue to be governed by the terms of the 1992 Director Plan.
The summary of the material provisions of the 1995 Director Plan
set forth herein and in "Summary of the 1995 Director Plan and the
1995 Employee Plan" is not intended to be complete and is qualified in
its entirety by reference to the 1995 Director Plan, a copy of which
is attached hereto in Appendix A to this Proxy Statement.
The purpose of the 1995 Director Plan is to induce directors of
the Company or any of its subsidiaries to remain with the Company and
to provide incentives and rewards to directors of the Company in
recognition of their contributions to the Company's progress. The
1995 Director Plan provides for automatic and discretionary grants of
stock options which qualify as incentive stock options (previously
defined as "Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), as well as options
which do not so qualify (previously defined as "Non-Qualified
Options") to be issued to directors. In addition, stock appreciation
<PAGE>
rights (previously defined as "SARs") may be granted in conjunction
with the grant of Incentive Options and Non-Qualified Options.
The 1995 Director Plan provides for the granting of Incentive
Options, Non-Qualified Options and SARs with respect to, in the
aggregate, up to 250,000 shares of Common Stock (which number is
subject to adjustment in the event of stock dividends, stock splits
and other similar events). To the extent that an Incentive Option or
Non-Qualified Option is not exercised within the period of
exercisability specified therein, it will expire as to the then
unexercised portion. If any Incentive Option, Non-Qualified Option or
SAR terminates prior to exercise thereof and during the duration of
the 1995 Director Plan, the shares of Common Stock as to which such
option or right was not exercised will become available under the 1995
Director Plan for the grant of additional options or rights to any
eligible employee. The shares of Common Stock subject to the 1995
Director Plan may be made available from either authorized but
unissued shares, treasury shares, or both. The 1995 Director Plan
became effective upon adoption by the Board of Directors, subject to
its approval by the affirmative vote of the holders of a majority of
the Company's outstanding voting stock entitled to vote thereon. In
the event that the 1995 Director Plan is not approved by the
stockholders, the 1995 Director Plan shall remain in force, provided,
however, that all options granted thereunder shall automatically be
deemed to be Non-Qualified Options.
The 1995 Director Plan provides for the grant of Non-Qualified
Options on a non-discretionary basis pursuant to a formula, namely,
each member of the Board of Directors then serving shall receive a
Non-Qualified Option to purchase 10,000 shares of Common Stock at an
exercise price equal to the fair market value per share of the Common
Stock on that date. Pursuant to such formula, Directors will receive
options to purchase 10,000 shares of Common Stock on October 17, 1995,
and on the first business day of each January thereafter beginning on
January 2, 1996. Each such option will be immediately exercisable for
a period of ten years from the date of grant. As of the date hereof:
(a) there have been no options or rights granted under the 1995
Director Plan, and (b) there are 4 directors eligible to participate
in the 1995 Director Plan, of whom 4 directors are eligible to receive
Non-Qualified Options and 1 director (employee-directors) are eligible
to receive Incentive Options. Accordingly, each director of the
Company has a direct and substantial interest in approval of the 1995
Director Plan. See "Interests of Officers and Directors in Matters to
be Acted Upon at the Meeting" herein.
The terms and conditions of the 1995 Director Plan are
substantially similar to those of the Medcross, Inc. 1995 Employee
Stock Option and Appreciation Rights Plan subject of Proposal 3. See
"Summary of the 1995 Director Plan and 1995 Employee Plan" below for a
description of the material terms of the 1995 Director Plan.
The Board of Directors unanimously recommends a vote FOR the
approval and adoption of the Medcross, Inc. 1995 Director Stock Option
and Appreciation Rights Plan, which plan shall provide for the
issuance of Incentive Options, Non-Qualified Options and SARs, as set
forth in Appendix A hereto. Unless marked to the contrary, shares of
Common Stock represented by Proxy Cards received from stockholders
will be voted in favor of Proposal 2.
<PAGE>
PROPOSAL 3
TO APPROVE THE ADOPTION OF THE MEDCROSS, INC.
1995 EMPLOYEE STOCK OPTION AND APPRECIATION RIGHTS PLAN
The Board of Directors has adopted a resolution authorizing the
establishment of the Medcross, Inc. 1995 Employee Stock Option and
Appreciation Rights Plan (the "1995 Employee Plan"), which plan shall
provide for the issuance of Incentive Options, Non-Qualified Options
and SARs. Pursuant to the resolution, the Board of Directors has
declared it to be advisable and in the best interests of the Company
and its stockholders that the Company adopt such plan (previously
defined as the "1995 Employee Plan") and has directed that the
proposal to adopt the 1995 Employee Plan, as set forth herein, be
submitted to the stockholders of the Company for vote at the Meeting.
The Board of Directors further adopted a resolution authorizing the
suspension of future grants of options under the 1989 Medcross, Inc.
Executive Stock Option Plan (the "1989 Executive Plan") insofar as
such Plan provided, by its terms, that options may be granted
thereunder during the five year term following adoption on June 15,
1990. There are 160,066 outstanding options granted under the 1989
Employee Plan which options will continue to be governed by the terms
of the 1989 Employee Plan.
The summary of the material provisions of the 1995 Employee Plan
set forth herein and in "Summary of the 1995 Director Plan and the
1995 Employee Plan" is not intended to be complete and is qualified in
its entirety by reference to the 1995 Employee Plan, a copy of which
is attached hereto in Appendix B to this Proxy Statement.
The purpose of the 1995 Employee Plan is to induce officers,
employees and consultants of the Company (or any of its subsidiaries)
who are in a position to contribute materially to the Company's
prosperity to remain with the Company, to offer such persons
incentives and rewards in recognition of their contributions to the
Company's progress and to encourage such persons to continue to
promote the best interests of the Company. Directors of the Company
are not eligible to participate in the 1995 Employee Plan. The 1995
Employee Plan provides for the grant of stock options which qualify as
incentive stock options (previously defined as "Incentive Options")
under Section 422 of the Code, to be issued to officers who are
employees and other employees, as well as options which do not so
qualify (previously defined as "Non-Qualified Options") to be issued
to officers, employees and consultants. In addition, stock
appreciation rights (previously defined as "SARs") may be granted in
conjunction with the grant of Incentive Options and Non-Qualified
Options.
The 1995 Employee Plan provides for the granting of Incentive
Options, Non-Qualified Options and SARs with respect to, in the
aggregate, up to 400,000 shares of Common Stock (which number is
subject to adjustment in the event of stock dividends, stock splits
and other similar events). To the extent that an Incentive Option or
Non-Qualified Option is not exercised within the period of
exercisability specified therein, it will expire as to the then
unexercised portion. If any Incentive Option, Non-Qualified Option or
SAR terminates prior to exercise thereof and during the duration of
the 1995 Employee Plan, the shares of Common Stock as to which such
option or right was not exercised will become available under the 1995
Employee Plan for the grant of additional options or rights to any
eligible employee. The shares of Common Stock subject to the 1995
Employee Plan may be made available from either authorized but
unissued shares, treasury shares, or both. The 1995 Employee Plan
became effective upon adoption by the Board of Directors, subject to
its approval by the affirmative vote of the holders of a majority of
the Company's outstanding voting stock entitled to vote thereon. In
<PAGE>
the event that the 1995 Employee Plan is not approved by the
stockholders, the 1995 Employee Plan shall remain in force, provided,
however, that all options granted thereunder shall automatically be
deemed to be Non-Qualified Options.
As of the date hereof: (a) there have been no options or rights
granted under the 1995 Employee Plan, and (b) an aggregate of 29
persons are eligible to participate in the 1995 Employee Plan. With
respect to the foregoing, there are 29 employees (including 2
officers) of the Company entitled to receive Incentive Options under
the 1995 Employee Plan and 29 persons (including 27 employees and 2
officers) who may receive Non-Qualified Options under the 1995
Employee Plan. Consultants engaged by the Company from time to time
are also expected to be eligible to receive Non-Qualified Options
under such Plan.
The Board of Directors unanimously recommends a vote FOR the
approval and adoption of the Medcross, Inc. 1995 Employee Stock Option
and Appreciation Rights Plan, which plan shall provide for the
issuance of Incentive Options, Non-Qualified Options and SARs, as set
forth in Appendix B hereto. Unless marked to the contrary, shares of
Common Stock represented by Proxy Cards received from stockholders
will be voted in favor of Proposal 3.
SUMMARY OF THE 1995 DIRECTOR PLAN AND THE 1995 EMPLOYEE PLAN
The following summary of the material terms of the 1995 Director
Plan and the 1995 Employee Plan (the "Plans") is not intended to be
complete and is qualified in its entirety by reference to such Plans,
which are attached as Appendix A and Appendix B, respectively, to this
Proxy Statement. Where the principal terms of the 1995 Director Plan
and the 1995 Employee Plan are identical, reference herein shall be
made to the terms of the "Plan" or "Plans," meaning that such terms
apply to either or both of such Plans.
Administration
Each Plan will be administered by: (a) the Board of Directors, if
each member thereof is a "disinterested person" (as defined under Rule
16b-3 under the Exchange Act) or, (b) in the discretion of the Board
of Directors, by the Compensation Committee. The Board of Directors
or the Compensation Committee generally has the authority (subject to
the formula for automatic annual awards to non-employee directors) to
determine the individuals to whom and the date on which options and
rights are to be granted, the number of shares of stock to be subject
to each option and right, the exercise price of shares of stock
subject to options and rights, the terms of any vesting or forfeiture
schedule and the other terms and provisions of each option and right.
All action pursuant to the Plan must be in accordance with the
requirements of Rule 16b-3 under the Exchange Act.
Section 16(b) Compliance
The Plan is intended to satisfy the conditions of Rule 16b-3
promulgated under Section 16 of the Exchange Act. Section 16(b) of
the Exchange Act provides that any so-called "short-swing profits,"
that is, a profit realized by an officer, director or owner of ten
percent or more of the outstanding securities on a purchase and a sale
of stock within a six month period, are recoverable by the issuer of
the securities. Although the application of Section 16(b) (and the
rules promulgated thereunder) is complex, Rule 16b-3 generally
mitigates the impact of Section 16(b) by providing an exemption from
<PAGE>
the liability provisions for the acquisition of shares of stock if the
acquisition is effected pursuant to a stock option plan which
satisfies the conditions of Rule 16b-3.
Eligibility and Extent of Participation
Incentive Options may be granted pursuant to the Plans only to
employees of the Company (or any subsidiary). Non-Qualified Options
and Rights may be granted pursuant to the Plans to officers, employees
or consultants of the Company or any subsidiary. Directors are not
eligible to participate in the 1995 Employee Plan.
There is no minimum number of shares of Common Stock with respect
to which an option or right may be granted. However, if the aggregate
fair market value of shares with respect to which Incentive Options
are exercisable for the first time by any employee during any calendar
year (under all stock option plans of the Company) exceeds $100,000,
such excess options shall be treated as Non-Qualified Options. For
the purpose of the foregoing limitation, the fair market value of
shares subject to an Incentive Option is to be determined as of the
time the option is granted.
The Board of Directors or the Compensation Committee may require,
as a condition of granting any option or right, that the optionee
enter into a stock option agreement which shall require, among other
things, the agreement by the employee with the Company that the
employee not sell or otherwise dispose of shares acquired pursuant to
the exercise of an Incentive Option for a minimum of two years from
the date of grant of the Incentive Option and one year from the date
of transfer of the Common Stock, absent the written approval, consent
or waiver of the Board of Directors or Compensation Committee. The
stock option agreement for any options granted to officers shall also
require that at least six months elapse from the date such options are
granted to the date on which any share of Common Stock underlying such
options is sold or any right associated with such option is exercised,
unless the Board of Directors or Compensation Committee otherwise
consents in writing.
Purchase Price and Exercise of Options
The price at which shares of Common Stock covered by an option may
be purchased shall be determined by the Board of Directors or
Compensation Committee; however, the purchase price of shares of
Common Stock issuable upon exercise of an Incentive Option must not be
less than 100% of the fair market value of such shares on the date the
Incentive Option is granted. Any cash proceeds received by the
Company from the exercise of the options will be used for general
corporate purposes.
Expiration and Transfer of Options
The Board of Directors or Compensation Committee has the sole
discretion to fix the period within which any Incentive or
Non-Qualified Option may be exercised. Any Incentive Option granted
under the Plan to a 10% or less stockholder and any Non-Qualified
Option shall be exercised during a period of not more than ten years
from the date of grant and any Incentive Option granted to a greater
than 10% stockholder shall be exercised within five years from the
date of grant. No Incentive Options may be granted under the Plan
more than ten years after the date of adoption of the Plan.
Options granted under the Plan are not transferable except upon
death. Except for options granted to non-employee directors under the
non-discretionary formula in accordance with the 1995 Director Plan,
<PAGE>
options may be exercised only while the option holder is employed by
the Company, or in some cases, within three months of termination of
employment. In the event of disability of an option holder, options
may be exercised to the extent of the accrued right to purchase the
option within one year of termination of employment due to disability.
In the event of death of an option holder, options may be exercised
within three years after the date of death.
Upon a reorganization, merger or consolidation of the Company as a
result of which the outstanding Common Stock is changed into or
exchanged for cash or property or securities not of the Company's
issue, or upon a sale of substantially all the property of the
Company, the Plan will terminate and all options previously granted
thereunder shall terminate, unless provision is made in connection
with such transaction for the continuance of the Plan or for the
assumption of options theretofore granted. If the Plan and
unexercised options are to terminate pursuant to such transaction,
persons owning any unexercised portions of options then outstanding
will have the right, prior to the consummation of the transaction, to
exercise the unexercised portions of their options, including the
portions thereof which would, but for such transaction, not yet be
exercisable.
Federal Income Tax Considerations
In case of Incentive Options, no taxable gain will be realized by
an option holder upon grant or exercise of the option, and the Company
will not be entitled to a tax deduction at the time any such option is
granted or exercised. However, the excess of the fair market value of
any stock received over the option price will constitute an adjustment
in computing alternative minimum taxable income at the time of the
transfer of stock pursuant to the exercise of the option, or if later,
at the earlier of the time that the stock is transferable or is not
subject to a substantial risk of forfeiture.
The treatment for federal income tax purposes of Non-Qualified
Options depends on whether the option has a readily ascertainable fair
market value at the time it is granted. Because the Non-Qualified
Options are not actively traded on an established market and because
it is likely that the Non-Qualified Options will be nontransferable by
the optionee or will not be immediately exercisable, it is expected
that the Non-Qualified Options will not have a readily ascertainable
fair market value. If a Non-Qualified Option does not have a readily
ascertainable fair market value at the time of grant, there is no
taxable event at grant; rather, the excess of (i) the fair market
value of the Common Stock on the date it is acquired pursuant to
exercise of the option over (ii) the exercise price, plus the amount,
if any, paid for the option must be included in the optionee's gross
income at the time of the receipt of stock pursuant to exercise of the
option, or if later, at the earlier of the time that the stock is
transferable or is not subject to a substantial risk of forfeiture.
If stock received pursuant to the exercise of a Non-Qualified Option
is not taxable at receipt because the stock is nontransferable and
subject to a substantial risk of forfeiture, the optionee may
nevertheless elect to include such amount in gross income when the
stock is received pursuant to exercise of the option.
In the case of Non-Qualified Options exercised by officers within
six months of the grant of such options, it appears that such
individuals would not be subject to tax until the expiration of such
six-month period because such individuals would be subject to
liability under Rule 16b-3 if they sold the shares within such six
month period. If such Non-Qualified Options are exercised more than
six months after the grant of the option, then it appears that the
optionee may be taxed immediately (regardless of whether the
underlying shares have been sold) unless there were an independent
basis for treating such shares as non-transferable and subject to a
substantial risk of forfeiture.
<PAGE>
Under Section 280G of the Code, certain persons who receive
compensation payments in connection with a change in control of a
company may be subject to a 20% excise tax and the company may lose
its tax deduction with respect to such payments. These rules may
apply to options and rights granted under the Plan. The determination
of the application of these rules will depend upon a number of factual
matters not determinable at this time. It should be realized,
however, that these rules may affect the ability of the Company to
secure a tax deduction on the exercise of certain Non-Qualified
Options granted under the Plan.
The tax consequences summarized above may change in the event of
amendment to the Code or the regulations adopted thereunder.
Exercise of Options; SARs
Generally, an option will be exercised by the tender in cash of
the total exercise price for the shares of stock for which the option
is being exercised. The Board of Directors or the Compensation
Committee may, however, permit a non-director optionee to pay all or a
portion of the exercise price by delivering to the Company shares of
Common Stock having an aggregate fair market value at least equal to
such total exercise price. An option may also be exercised by tender
to the Company of a written notice of exercise together with advice of
the delivery of an order to a broker to sell part or all of the shares
of Common Stock subject to such exercise notice and an irrevocable
order to such broker to deliver to the Company sufficient proceeds
from the sale of such shares to pay the exercise price and any
withholding taxes. The Company has the authority under the Plan to
assist any employee of the Company with the payment of the purchase
price of the Common Stock by lending the amount of the purchase price
to the employee, on terms, including rate of interest and security for
the loan, as the Board of Directors shall authorize.
The Board of Directors or the Compensation Committee may, in its
discretion, at any time prior to the exercise of any option, grant in
connection with such option the right to surrender part or all of such
option to the extent the option is exercisable, and receive an amount
(payable in cash, shares of the Company's Common Stock or combination
thereof as determined by the Board of Directors or the Compensation
Committee) equal to the difference between the then fair market value
of the shares issuable upon the exercise of the option (or portions
thereof surrendered) and the exercise price of the option or portion
thereof surrendered.
Amendments to the 1995 Employee Plan
The Board of Directors may at any time terminate the Plan or make
such amendments thereto as it deems advisable and in the best
interests of the Company, without action on the part of the Company's
stockholders, unless such approval is required pursuant to Section 422
of the Code or Rule 16b-3 under the Exchange Act. The Plan provides,
however, that unless the holders of a majority of each class and
series, if any, of the Company's outstanding voting stock entitled to
vote thereon shall have first approved such an amendment, no amendment
of the Plan shall be made whereby: (a) the total number of shares
which may be optioned under the Plan shall be increased, (b) the
authority to administer the Plan by the Board of Directors or the
Compensation Committee shall be withdrawn, (c) the maximum term of the
options shall be extended, (d) the minimum option price of Incentive
options shall be decreased, (e) the price to optionees to whom options
have been granted shall be changed, or (f) the class of individuals
eligible to participate in the Plan is modified.
<PAGE>
PROPOSAL 4
TO RATIFY THE SELECTION OF THE FIRM OF COOPERS & LYBRAND AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY
The Board of Directors, upon recommendation of the Audit
Committee, concluded that the continued engagement of Coopers &
Lybrand as the Company's independent public accountants for the 1995
fiscal year was in the best interests of the Company. The Board of
Directors recommends that the Shareholders ratify its choice of
Coopers & Lybrand. Representatives of Coopers & Lybrand will be
present at the Annual Meeting of Shareholders and will have the
opportunity to make a statement if they desire to do so. Such
representatives are expected to be available to respond to appropriate
questions.
The Board of Directors initially engaged Coopers & Lybrand, Tampa,
Florida as the Company's independent accountants on July 10, 1992.
The Board of Directors unanimously recommends a vote FOR the
ratification of the selection of Coopers & Lybrand as independent
public accountants for the Company.
OTHER PROPOSED ACTION
The Board of Directors does not intend to bring any other matters
before the Annual Meeting, nor does the Board of Directors know of any
matters that other persons intend to bring before the Annual Meeting.
If, however, other matters not mentioned in this Proxy Statement
properly come before the Annual Meeting, the persons named in the
accompanying form of proxy will vote thereon in accordance with the
recommendation of the Board of Directors.
Shareholders should note that the Company's By-Laws provide that
no proposals or nominations of Directors by Shareholders shall be
presented for vote at an Annual Meeting of Shareholders unless notice
complying with the requirements in the By-Laws is provided to the
Board of Directors or the Company's Secretary no later than the close
of business on the fifth day following the day that notice of the
Annual Meeting is first given to Shareholders.
SHAREHOLDER PROPOSALS AND SUBMISSION
If any Shareholder wishes to present a proposal for inclusion in
the proxy materials to be solicited by the Company's Board of
Directors with respect to the next Annual Meeting of Shareholders,
such proposal must be presented to the Company's management prior to
January 31, 1996.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. YOUR VOTE IS IMPORTANT.
IF YOU ARE A SHAREHOLDER OF RECORD AND ATTEND THE MEETING AND WISH TO
VOTE IN PERSON, YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO THE
VOTE.
MEDCROSS, INC.
/s/ Stephanie Giallourakis
September 22, 1995 Stephanie Giallourakis,
Secretary
<PAGE>
PROXY
ANNUAL MEETING OF STOCKHOLDERS OF
MEDCROSS, INC.
ON OCTOBER 17, 1995
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Po Shin Wong, Henry Y. L. Toh, R.
Hoston Babcock, and Joel S. Kanter and each or any of them proxies,
with power of substitution, to vote all shares of the undersigned at
the Annual Meeting of Stockholders to be held on October 17, 1995 at
9:00 a.m. at the Tampa Airport Marriott Hotel, Tampa International Airport,
Tampa, Florida, or at any adjournment thereof, upon the matters set forth
in the Proxy Statement for such meeting, and in their discretion, or such
other business as may properly come before the meeting.
1. TO ELECT TWO CLASS II DIRECTORS TO SERVE FOR THREE YEARS AND UNTIL
THEIR SUCCESSORS HAVE BEEN DULY ELECTED AND SHALL QUALIFY.
[ ]FOR THE NOMINEES LISTED BELOW [ ]WITHHOLD AUTHORITY
to vote for the nominees
listed at right
(INSTRUCTION: To withhold authority to vote for the nominee strike
a line through the nominee's name at right:)
Henry Y. L. Toh and Joel S. Kanter
2. TO APPROVE THE ADOPTION OF THE MEDCROSS, INC. 1995 DIRECTOR
STOCK OPTION AND APPRECIATION RIGHTS PLAN, which provides for
the issuance of Incentive Stock Options, Non-Qualified Stock
Options and Stock Appreciation Rights.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
3. TO APPROVE THE ADOPTION OF THE MEDCROSS, INC. 1995 EMPLOYEE STOCK
OPTION AND APPRECIATION RIGHTS PLAN, which provides for the issuance
of Incentive Stock Options, Non-Qualified Stock Options and Stock
Appreciation Rights.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
<PAGE>
4. TO RATIFY THE SELECTION OF COOPERS & LYBRAND AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
Dated: ___________________, 1995
________________________________________
Signature
________________________________________
Signature if held jointly
NOTE: When shares are held by joint tenants, both should sign.
Persons signing as Executor, Administrator, Trustee, etc. should so
indicate. Please sign exactly as the name appears on the proxy.
IF NO CONTRARY SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2, 3 and 4.
PLEASE MARK, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
<PAGE>
Appendix A
MEDCROSS, INC.
1995 DIRECTOR STOCK OPTION AND APPRECIATION RIGHTS PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
Section 1.1. Medcross, Inc. (the "Company"), a Florida
corporation, hereby establishes a stock option and appreciation rights
plan to be named the Medcross, Inc. 1995 Director Stock Option and
Appreciation Rights Plan (the "Director Plan").
Section 1.2. The purpose of this Director Plan is to induce
persons who are directors of the Company (or any of its subsidiaries)
to remain with the Company and to provide such persons incentives and
rewards in recognition of their contributions to the Company's
progress. The Director Plan provides for the grant of options to
purchase shares of common stock of the Company, $.007 par value per
share (the "Common Stock") which: (a) qualify as incentive stock
options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), to directors who are
employees, and (b) do not so qualify ("Non-Qualified Options") to
directors, including those who are not employees. This Director Plan
also provides for the grant of stock appreciation rights ("Rights") in
connection with the grant of options hereunder. Incentive Options and
Non-Qualified Options may be collectively referred to hereinafter as
the "Options" as the context may require.
Section 1.3. All Options and other rights previously granted by
the Company under any other plan previously adopted by the Company
shall continue to be governed by such plan. All Options granted on or
after the date that this Director Plan has been approved and adopted
by the Company's board of directors (the "Board of Directors") shall
be governed by the terms and conditions of this Director Plan unless
the terms of such an option specifically indicate that it is not to be
so governed.
ARTICLE II
ADMINISTRATION
Section 2.1. All determinations under this Director Plan
concerning the selection of persons eligible to receive awards
hereunder and with respect to the timing, pricing and amount of an
award hereunder (other than pursuant to a non-discretionary formula
hereinafter set forth) shall be made by an administrator (the
"Administrator") who shall be charged with administration of this
Director Plan. The Administrator shall be either: (a) the Board of
Directors, if each member thereof is a "disinterested person" for the
purposes of this Director Plan within the meaning of such term as
defined by Rule 16b-3 (as such rule may be amended from time to time,
"Rule 16b-3") under the Securities Exchange Act of 1934, as amended
<PAGE>
(the "Exchange Act"), or (b) in the discretion of the Board of
Directors by a committee (the "Committee") of not less than two
members of the Board of Directors, each of whom is a "disinterested
person." A "disinterested person" within the meaning of Rule 16b-3 as
in effect upon the date this Director Plan is adopted by the Board of
Directors is a person who has not been granted or awarded equity
securities (within the meaning of the Exchange Act) under this or any
other plan of the Company (or any affiliate thereof) at any time
within one year prior to such person's service as a member of the
Administrator, or during such service except as otherwise permitted by
Rule 16b-3(c). In the event this Director Plan is administered by the
Committee, the Committee shall select one of its members to serve as
the chairman thereof, and shall hold its meetings at such times and
places as it may determine. In such case, a majority of the total
number of members of the Committee shall be necessary to constitute a
quorum; and (i) the affirmative vote of a majority of the members
present at any meeting at which a quorum is present, or (ii) the
approval in writing by a majority of the members of the Committee,
shall be necessary to constitute action by the Committee.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Director Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent that any provision of this Director Plan
or action by the Administrator fails to so comply, it shall be deemed
to be null and void, to the extent permitted by law and deemed
advisable by the Administrator.
Section 2.2. The provisions of this Director Plan relating to
Incentive Options are intended to comply in every respect with Section
422 of the Code ("Section 422") and the regulations promulgated
thereunder. In the event that any future statute or regulation shall
modify Section 422, this Director Plan shall be deemed to incorporate
by reference such modification. Any stock option agreement relating
to the grant of any Incentive Option pursuant to this Director Plan,
which option is outstanding and unexercised at the time that any
modifying statute or regulation becomes effective, shall also be
deemed to incorporate by reference such modification, and no notice of
such modification need be given to the Optionee (as hereinafter
defined). Any stock option agreement relating to an Incentive Option
shall provide that the Optionee (as hereinafter defined) hold the
stock received upon exercise of such Incentive Option for a minimum of
two years from the date of grant of the Incentive Option and one year
from the date of exercise of such Incentive Option, absent the written
approval, consent or waiver of the Administrator.
Section 2.3. If any provision of this Director Plan is
determined to disqualify the shares of Common Stock purchasable upon
exercise of an Incentive Option granted under this Director Plan from
the special tax treatment provided by Section 422, such provision
shall be deemed to incorporate by reference the modification required
to qualify such shares of Common Stock for said tax treatment.
Section 2.4. The Company shall grant Options under this
Director Plan in accordance with determinations made by the
Administrator pursuant to the provisions of this Director Plan. All
Options granted pursuant to this Director Plan shall be clearly
<PAGE>
identified as Incentive Options or Non-Qualified Options. The
Administrator may from time to time adopt (and thereafter amend or
rescind) such rules and regulations for carrying out the provisions of
this Director Plan and take such action in the administration of this
Director Plan, not inconsistent with the provisions hereof, as it
shall deem proper. The Board of Directors or, subject to the
supervision of the Board of Directors, the Committee, as the
Administrator, shall have plenary discretion, subject to the express
provisions of this Director Plan, to determine which directors shall
be granted Options, the number of shares subject to each Option, the
time or times when an Option may be exercised (whether in whole or in
installments), whether Rights under Section 7.6 hereof shall be
granted, the terms and provisions of the respective option agreements
(which need not be identical), including such terms and provisions
which may be amended from time to time as shall be required, in the
judgment of the Administrator to conform to any change in any law or
regulation applicable hereto, and to make all other determinations
deemed necessary or advisable for the administration of this Director
Plan. The interpretation and construction of any provision of this
Director Plan by the Administrator (unless otherwise determined by the
Board of Directors) shall be final, conclusive and binding upon all
persons.
Section 2.5. Directors of the Company shall be granted
Non-Qualified Options on a non-discretionary basis in accordance with
the following formula: On (i) October 17, 1995, (ii) the first
business day of January 1996 and (iii) the first business day of each
January thereafter, each member of the Board of Directors then serving
shall receive a Non-Qualified Option to purchase 10,000 shares of
Common Stock at an exercise price equal to the fair market value per
share of such shares on that date. Each such Option shall be
exercisable immediately and for ten years from the date of grant
unless sooner terminated pursuant to the terms of this Director Plan.
Each such Option shall be subject to the restrictions upon transfer,
limitations on exercise and restrictions upon transfer of the shares
of Common Stock to be issued upon exercise of the Option as are set
forth elsewhere herein or as are imposed by applicable law, including
without limitation applicable federal and state securities laws.
Except as otherwise provided in this section, all Non-Qualified
Options issued pursuant to this section shall be subject to the other
terms and conditions of this Director Plan; to the extent such terms
and conditions are inconsistent with this section, this section shall
control. To the extent required pursuant to Rule 16b-3 as such rule
relates to formula awards, this section shall not be amended more than
once every six months other than to comport with changes in the Code,
the Employee Retirement Income Security Act or the rules thereunder.
Section 2.6. No member of the Administrator shall be liable for
any action or determination made in good faith with respect to
administration of this Director Plan or the Options granted hereunder.
A member of the Administrator shall be indemnified by the Company,
pursuant to the Company's bylaws, for any expenses, judgments or other
costs incurred as a result of a lawsuit filed against such member
claiming any rights or remedies arising out of such member's
participation in administration of this Director Plan.
<PAGE>
ARTICLE III
TOTAL NUMBER OF SHARES TO BE OPTIONED
Section 3.1. There shall be reserved for issuance or transfer
upon exercise of the Options to be granted from time to time under
this Director Plan an aggregate of 250,000 shares of Common Stock of
the Company (subject to adjustment as provided in Article VIII
hereof). The shares of Common Stock issued upon exercise of any
Option granted under this Director Plan may be shares of Common Stock
previously issued and reacquired by the Company at any time or
authorized but unissued shares of Common Stock, as the Board of
Directors from time to time may determine.
Section 3.2. In the event that any Options outstanding under
this Director Plan for any reason expire or are terminated without
having been exercised in full or shares of Common Stock subject to
Options are surrendered in whole or in part pursuant to Rights granted
under Section 7.6 hereof (except to the extent that shares of Common
Stock are issued as payment to the holder of the Option upon such
surrender) the unpurchased shares of Common Stock subject to such
Option and any such surrendered shares may again be available for
transfer under this Director Plan.
Section 3.3. No Options shall be granted pursuant to this
Director Plan to any Optionee after the tenth anniversary of the
earlier of: (a) the date that this Director Plan is adopted by the
Board of Directors, or (b) the date that this Director Plan is
approved by the stockholders of the Company.
ARTICLE IV
ELIGIBILITY
Section 4.1. Subject to Section 2.5 above, Non-Qualified
Options may be granted pursuant to this Director Plan to directors of
the Company (or any of its subsidiaries) as selected by the
Administrator. Incentive Options may be granted pursuant to this
Director Plan only to directors who are also employees of the Company
(or any of its subsidiaries) as selected by the Administrator.
Persons granted Options pursuant to this Director Plan are referred to
herein as "Optionees." For purposes of determining who is an employee
with respect to eligibility for Incentive Options, Section 422 of the
Code shall govern. The Administrator may determine (in its sole
discretion) that any person who would otherwise be eligible to be
granted Options shall, nonetheless, be ineligible to receive any award
under this Director Plan.
Section 4.2. Except as otherwise provided in Section 2.5 above,
the Administrator will (in its discretion) determine the directors to
be granted Options, the time or times at which Options shall be
granted, the number of shares of Common Stock subject to each Option,
the terms of a vesting or forfeiture schedule, if any, the type of
Option issued, the period during which Options may be exercised, the
manner in which Options may be exercised and all other terms and
conditions related to the Options; provided, however, no Option will
<PAGE>
be granted which has terms or conditions inconsistent with those
stated in Articles V and VI hereof. Relevant factors in making such
determinations may include the value of the services rendered by the
respective Optionee, his or her present and potential contributions to
the Company, and such other factors which the Administrator within its
discretion deems to be relevant in accomplishing the purpose of this
Director Plan.
Section 4.3. No Options may be granted to any member of the
Committee or, if this Director Plan is administered by the Board of
Directors rather than the Committee, no Options (other than pursuant
to a non-discretionary formula such as and including that which is set
forth in Section 2.5 above which meets the conditions in Rule 16b-
3(c)(2)(ii) under the Exchange Act) may be granted to any director, if
such director has, during the one year prior to such person's service
as a member of the Administrator of this Director Plan or during such
service, received any equity securities pursuant to any plan of the
Company or any of its affiliates (other than pursuant to the formula
set forth in Section 2.5 of this Plan or otherwise in a manner
described in Rule 16b-3 as such rule may be amended from time to
time), may be granted to any director unless a majority of the Board
of Directors and a majority of the members of the Board of Directors
members voting on the grant of such Options have not received equity
securities hereunder (other than pursuant to Section 2.5 above or
otherwise in a manner described in Rule 16b-3 as such rule may be
amended from time to time) at any time within one year prior to the
date of such action, pursuant to this Director Plan or any other plan
of the Company or any of its affiliates entitling such directors to
acquire equity securities of the Company or any of its affiliates.
ARTICLE V
TERMS AND CONDITIONS OF OPTIONS
Section 5.1. Each Option granted under this Director Plan shall
be evidenced by a stock option certificate and agreement (the "Stock
Option Certificate and Agreement") in a form consistent with the
provisions of this Director Plan, provided that the following terms
and conditions shall apply:
(a) The price at which each share of Common Stock covered by an
Option may be purchased shall be set forth in the Stock Option
Certificate and Agreement and shall be determined by the
Administrator, provided that the option price for any Incentive Option
shall not be less than the "fair market value" of the shares of Common
Stock at the time of grant determined in accordance with Section
5.1(b) below. Notwithstanding the foregoing, if an Incentive Option
to purchase shares of Common Stock is granted pursuant to this
Director Plan to an Optionee who, on the date of the grant, directly
or indirectly owns more than ten percent (10%) of the voting power of
all classes of capital stock of the Company (or its parent or
subsidiary), not including the shares of Common Stock obtainable upon
exercise of the Option, the minimum exercise price of such Option
shall be not less than one hundred ten percent (110%) of the "fair
market value" of the shares of Common Stock on the date of grant
determined in accordance with Section 5.1(b) below.
<PAGE>
(b) The "fair market value" shall be determined by the
Administrator, which determination shall be binding upon the Company
and its directors. The determination of the fair market value shall
be based upon the following: (i) if the shares of Common Stock are
not listed and traded upon a recognized securities exchange and there
is no report of stock prices with respect to the shares of Common
Stock published by a recognized stock quotation service, on the basis
of the recent purchases and sales of the shares of Common Stock in
arms-length transactions; or (ii) if the shares of Common Stock are
not then listed and traded upon a recognized securities exchange or
listed for quotation on the NASDAQ Stock Market, and there are reports
of stock prices by a recognized quotation service, upon the basis of
the last reported sale or transaction price of such stock on the date
of grant as reported by a recognized quotation service, or, if there
is no last reported sale or transaction price on that day, then upon
the basis of the mean of the last reported closing bid and closing
asked prices for such stock on that day or on the date nearest
preceding that day; or (iii) if the shares of Common Stock shall then
be listed and traded upon a recognized securities exchange or listed
for quotation on the NASDAQ Stock Market, upon the basis of the last
reported sale or transaction price at which shares of Common Stock
were traded on such recognized securities exchange on the date of
grant or, if the shares of Common Stock were not traded on such date,
upon the basis of the last reported sale or transaction price on the
date nearest preceding that date. The Administrator shall also
consider such other factors relating to the fair market value of the
shares of Common Stock as it shall deem appropriate.
(c) For the purpose of determining whether an Optionee owns more
than ten percent (10%) of the voting power of all classes of stock of
the Company, an Optionee is considered to own those shares which are
owned directly or indirectly through brothers and sisters (including
half-blooded siblings), spouse, ancestors and lineal descendants; and
proportionately as a shareholder of a corporation, a partner of a
partnership, and/or a beneficiary of a trust or an estate that owns
shares of the Company.
(d) Notwithstanding any other provision of this Director Plan,
in accordance with the provisions of Section 422(d) of the Code, to
the extent that the aggregate fair market value (determined at the
time the Option is granted) of the shares of Common Stock of the
Company with respect to which Incentive Options (without reference to
this provision) are exercisable for the first time by any individual
in any calendar year under any and all stock option plans of the
Company, its subsidiary corporations and its parent (if any) exceeds
$100,000, such Options shall be treated as Non-Qualified Options.
(e) An Optionee may, in the Administrator's discretion, be
granted more than one Incentive Option or Non-Qualified Option during
the duration of this Director Plan, and may be issued a combination of
Non-Qualified Options and Incentive Options.
(f) Except as set forth in Section 2.5 above, the duration of
any Option and any Right related thereto shall be within the sole
discretion of the Administrator; provided, however, that any Incentive
Option granted to a ten percent (10%) or less stockholder or any
Non-Qualified Option shall, by its terms, be exercised within ten
years after the date the Option is granted and any Incentive Option
<PAGE>
granted to a greater than ten percent (10%) stockholder shall, by its
terms, be exercised within five years after the date the Option is
granted.
(g) An Option and any Right related thereto shall not be
transferable by the Optionee other than by will, or by the laws of
descent and distribution. An Option may be exercised during the
Optionee's lifetime only by the Optionee.
(h) At least six months shall elapse from the date on which an
Option is granted hereunder to the date on which any share of Common
Stock underlying such Option is sold or any Right related thereto is
exercised, unless the Administrator otherwise consents in writing.
ARTICLE VI
EMPLOYMENT OR SERVICE OF OPTIONEE
Section 6.1. If the employment or service of an Optionee is
terminated for cause, the option rights of such Optionee, both accrued
and future, under any then outstanding Non-Qualified or Incentive
Option (except as to Options granted pursuant to Section 2.5 above)
shall terminate immediately. "Cause" shall mean incompetence in the
performance of duties, disloyalty, dishonesty, theft, embezzlement,
unauthorized disclosure of patents, processes or trade secrets of the
Company, individually or as an employee, partner, associate, officer
or director of any organization. The determination of the existence
and the proof of "cause" shall be made by the Board of Directors or
the Committee and, subject to the review of any determination made by
the Committee by the Board of Directors, such determination shall be
binding on the Optionee and the Company.
Section 6.2. If the employment or service of the Optionee is
terminated by either the Optionee or the Company for any reason other
than for cause, death, or for disability, as defined in Section
22(e)(3) of the Code, the option rights of such Optionee under any
then outstanding Non-Qualified or Incentive Option shall, subject to
the provisions of Section 5.1(h) hereof, be exercisable by such
Optionee at any time prior to the expiration of the Option or within
three months after the date of such termination, whichever period of
time is shorter, but only to the extent of the accrued right to
exercise the Option at the date of such termination.
Section 6.3. In the case of an Optionee who becomes disabled,
as defined by Section 22(e)(3) of the Code, the option rights of such
Optionee under any then outstanding Non-Qualified or Incentive Option
shall, subject to the provisions of Section 5.1(h) hereof, be
exercisable by such Optionee at any time prior to the expiration of
the Option or within one year after the date of termination of
employment or service due to disability, whichever period of time is
shorter, but only to the extent of the accrued right to exercise the
Option at the date of such termination.
Section 6.4. In the event of the death of an Optionee, the
option rights of such Optionee under any then outstanding Non-
Qualified or Incentive Option shall be exercisable by the person or
<PAGE>
persons to whom these rights pass by will or by the laws of descent
and distribution, at any time prior to the expiration of the Option or
within three years after the date of death, whichever period of time
is shorter, but only to the extent of the accrued right to exercise
the Option at the date of death. If a person or estate acquires the
right to exercise a Non-Qualified or Incentive Option by bequest or
inheritance, the Administrator may require reasonable evidence as to
the ownership of such Option, and may require such consents and
releases of taxing authorities as the Administrator may deem
advisable.
Section 6.5. With the exception of Non-Qualified Options issued
pursuant to Section 2.5 hereof, the Administrator may also provide
that a director who is also an employee must be continuously employed
by the Company for such period of time as the Administrator, in its
discretion, deems advisable before the right to exercise any portion
of an Option granted to such employee will accrue, and may also set
such other targets, restrictions or other terms relating to the
employment of the Optionee which targets, restrictions, or terms must
be fulfilled or complied with, as the case may be, prior to the
exercise of any portion of an Option granted to any employee-director.
Section 6.6. Options granted under this Director Plan shall not
be affected by any change of duties or position, so long as the
Optionee continues in the service of the Company.
Section 6.7. Nothing contained in this Director Plan, or in any
Option granted pursuant to this Director Plan, shall confer upon any
Optionee any right with respect to continuance of employment or
service by the Company nor interfere in any way with the right of the
Company to terminate the Optionee's employment or service or change
the Optionee's compensation at any time.
ARTICLE VII
PURCHASE OF SHARES
Section 7.1. Except as provided in this Article VII, an Option
shall be exercised by tender to the Company of the full exercise price
of the shares of Common Stock with respect to which the Option is
being exercised and written notice of such exercise. The right to
purchase shares of Common Stock shall be cumulative so that, once the
right to purchase any shares has accrued, such shares or any part
thereof may be purchased at any time thereafter until the expiration
or termination of the Option. A partial exercise of an Option shall
not affect the right of the Optionee to exercise the Option from time
to time, in accordance with this Director Plan, as to the remaining
number of shares of Common Stock subject to the Option. The purchase
price of the shares shall be in United States dollars, payable in cash
or by certified bank check. Notwithstanding the foregoing, in lieu of
cash, an Optionee may, with the approval of the Administrator,
exercise his or her Option by tendering to the Company shares of
Common Stock of the Company owned by him or her and having an
aggregate fair market value at least equal to the full exercise price.
The fair market value of any shares of Common Stock so surrendered
shall be determined by the Administrator in accordance with Section
5.1(b) hereof.
<PAGE>
Section 7.2. Except as provided in Article VI above, an Option
may not be exercised unless the holder thereof is a director of the
Company at the time of exercise.
Section 7.3. No Optionee, or Optionee's executor,
administrator, legatee, or distributee or other permitted transferee,
shall be deemed to be a holder of any shares of Common Stock subject
to an Option for any purpose whatsoever unless and until a stock
certificate or certificates for such shares are issued to such person
under the terms of this Director Plan. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities
or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued,
except as provided in Article VIII hereof.
Section 7.4. If: (i) the listing, registration or
qualification of the Options issued hereunder, or of any securities
issuable upon exercise of such Options (the "Subject Securities") upon
any securities exchange or quotation system or under federal or state
law is necessary as a condition of or in connection with the issuance
or exercise of the Options, or (ii) the consent or approval of any
governmental regulatory body is necessary as a condition of or in
connection with the issuance or exercise of the Options, the Company
shall not be obligated to deliver the certificates representing the
Subject Securities or to accept or to recognize an Option exercise
unless and until such listing, registration, qualification, consent or
approval shall have been effected or obtained. The Company will take
reasonable action to so list, register or qualify the Options and the
Subject Securities, or effect or obtain such consent or approval, so
as to allow for their issuance.
Section 7.5. An Optionee may be required to represent to the
Company as a condition of his or her exercise of Options issued under
this Director Plan that: (i) the Subject Securities acquired upon
exercise of his or her Option are being acquired by him or her for
investment purposes only and not with a view to distribution or
resale, unless counsel for the Company is then of the view that such a
representation is not necessary and is not required under the
Securities Act of 1933, as amended (the "Securities Act"), or any
other applicable statute, law, regulation or rule; and (ii) that the
Optionee shall make no exercise or disposition of an Option or of the
Subject Securities in contravention of the Securities Act, the
Exchange Act or the rules and regulations thereunder. Optionees may
also be required to provide (as a condition precedent to exercise of
an Option) such documentation as may be reasonably requested by the
Company to assure compliance with applicable law and the terms and
conditions of this Director Plan and the subject Option.
Section 7.6. The Administrator may, in its discretion, grant in
connection with any Option, at any time prior to the exercise thereof,
the right (previously defined as a "Right" or collectively, the
"Rights") to surrender all or part of the Option to the extent that
such Option is exercisable and receive in exchange an amount (payable
in cash, shares of Common Stock valued at the then fair market value,
or a combination thereof as determined by the Administrator) equal to
the difference (the "Spread") between the then fair market value of
the shares of Common Stock issuable upon the exercise of the Option
(or portions thereof surrendered) and the option price payable upon
the exercise of the Option (or portions thereof surrendered). Such
<PAGE>
Rights may be included in an Option only under the following
conditions: (a) the Rights will expire no later than the expiration
of the underlying Option; (b) the Rights may be for no more than one
hundred percent (100%) of the Spread; (c) the Rights are transferable
only when the underlying Option is transferable and under the same
conditions; (d) the Rights may be exercised only when the underlying
Option is eligible to be exercised; and (e) the Rights may be
exercised only when the Spread is positive, i.e., when the market
price of the Common Stock subject to the Option exceeds the exercise
price of the Option.
Section 7.7. An Option may also be exercised by tender to the
Company of a written notice of exercise together with advice of the
delivery of an order to a broker to sell part or all of the shares of
Common Stock subject to such exercise notice and an irrevocable order
to such broker to deliver to the Company (or its transfer agent)
sufficient proceeds from the sale of such shares to pay the exercise
price and any withholding taxes. All documentation and procedures to
be followed in connection with such a "cashless exercise" shall be
approved in advance by the Administrator.
ARTICLE VIII
CHANGE IN NUMBER OF OUTSTANDING SHARES OF
STOCK, ADJUSTMENTS, REORGANIZATIONS, ETC.
Section 8.1. In the event that the outstanding shares of Common
Stock of the Company are hereafter increased or decreased or changed
into or exchanged for a different number of shares or kind of shares
or other securities of the Company or of another corporation by reason
of reorganization, merger, consolidation, recapitalization,
reclassification, stock split, combination of shares or a dividend
payable in capital stock, appropriate adjustment shall be made by the
Administrator in the number and kind of shares for the purchase of
which Options may be granted under this Director Plan, including the
maximum number that may be granted to any one person. In addition,
the Administrator shall make appropriate adjustments in the number and
kind of shares as to which outstanding Options, or portions thereof
then unexercised, shall be exercisable, to the end that the Optionee's
proportionate interest shall be maintained as before the occurrence to
the unexercised portion of the Option and with a corresponding
adjustment in the option price per share. Any such adjustment made by
the Administrator shall be conclusive.
Section 8.2. The grant of an Option pursuant to this Director
Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its
business or assets.
Section 8.3. Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the
Company as a result of which the outstanding securities of the class
then subject to Options hereunder are changed into or exchanged for
cash or property or securities not of the Company's issue, or upon a
sale of substantially all the property of the Company to an
<PAGE>
association, person, party, corporation, partnership, or control group
as that term is construed for purposes of the Exchange Act, this
Director Plan shall terminate, and all Options theretofore granted
hereunder shall terminate, unless provision be made in writing in
connection with such transaction for the continuance of this Director
Plan and/or for the assumption of Options theretofore granted, or the
substitution for such Options of options covering the stock of a
successor employer corporation, or a parent or a subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and
prices, in which event this Director Plan and the Options theretofore
granted shall continue in the manner and under the terms so provided.
If this Director Plan and unexercised Options shall terminate pursuant
to the foregoing sentence, all persons owning any unexercised portions
of the Options then outstanding shall have the right, at such time
prior to the consummation of the transaction causing such termination
as the Company shall designate, to exercise the unexercised portions
of such Options, including the portions thereof which would, but for
this Section 8.3, not yet be exercisable.
ARTICLE IX
DURATION, AMENDMENT AND TERMINATION
Section 9.1. The Board of Directors may at any time terminate
this Director Plan or make such amendments hereto as it shall deem
advisable and in the best interests of the Company, without action on
the part of the stockholders of the Company, unless such approval is
required pursuant to Section 422 of the Code or the regulations
thereunder or Rule 16b-3 under the Exchange Act; provided, however,
that no such termination or amendment shall, without the consent of
the individual to whom any Option shall theretofore have been granted,
affect or impair the rights of such individual under such Option, and
provided further, that unless the holders of a majority of each of
the classes of the Company's outstanding voting stock entitled to vote
thereon shall have first approved thereof, no amendment of this
Director Plan shall be made whereby: (a) the total number of shares
of Common Stock which may be issued pursuant to the exercise of
Options under this Director Plan to all individuals, or any of them,
shall be increased, except by operation of the adjustment provisions
of Article VIII hereof, (b) the authority to administer this Director
Plan by the Administrator shall be withdrawn, (c) the maximum term of
the Options shall be extended, (d) the minimum option price of
Incentive Options shall be decreased, (e) the price to Optionees to
whom Options have been granted shall be changed, or (f) the class of
individuals eligible to participate in this Director Plan is modified.
Pursuant to Section 422(b) of the Code, no Incentive Option may be
granted pursuant to this Director Plan after ten years from the date
this Director Plan is adopted or the date this Director Plan is approved
by the stockholders of the Company, whichever is earlier.
<PAGE>
ARTICLE X
RESTRICTIONS
Section 10.1. Any shares of Common Stock issued pursuant to
exercise of Options granted under this Director Plan shall be subject
to such restrictions on transfer and limitations as shall, in the
opinion of the Administrator, be necessary or advisable to assure
compliance with the laws, rules and regulations of the United States
government or any state or jurisdiction thereof. In addition, except
for those Non-Qualified Options issued pursuant to Section 2.5 above,
the Administrator may in any Stock Option Certificate and Agreement
impose such other restrictions upon the exercise of an Option or upon
the sale or other disposition of the shares of Common Stock
deliverable upon exercise thereof as the Administrator may, in its
sole discretion, determine. By accepting an award pursuant to this
Director Plan, each Optionee shall thereby agree to any such
restrictions.
Section 10.2. Any certificate issued to evidence shares of
Common Stock issued pursuant to exercise of an Option shall bear such
legends and statements as the Administrator, the Board of Directors or
counsel to the Company shall deem advisable to assure compliance with
the laws, rules and regulations of the United States government or any
state or jurisdiction thereof. No shares of Common Stock will be
delivered pursuant to exercise of the Options granted under this
Director Plan until the Company has obtained such consents or
approvals from such regulatory bodies of the United States government
or any state or jurisdiction thereof as the Administrator, the Board
of Directors or counsel to the Company deems necessary or advisable.
ARTICLE XI
FINANCIAL ASSISTANCE
Section 11.1. The Company is vested with authority under this
Director Plan to assist any employee to whom an Option is granted
hereunder (including any director of the Company or any of its
subsidiaries who is also an employee) in the payment of the purchase
price payable on exercise of such Option, by lending the amount of
such purchase price to such employee on such terms and at such rates
of interest and upon such security (or unsecured) as shall have been
authorized by or under authority of the Board of Directors. Any such
assistance shall comply with the requirements of Regulation G
promulgated by the Board of the Federal Reserve System, as amended
from time to time, and any other applicable law, rule or regulation.
ARTICLE XII
APPLICATION OF FUNDS
Section 12.1. The proceeds received by the Company from the
issuance and sale of Common Stock upon exercise of Options granted
pursuant to this Director Plan are to be added to the general funds of
the Company and used for its corporate purposes as determined by the
Board of Directors.
<PAGE>
ARTICLE XIII
EFFECTIVENESS OF DIRECTOR PLAN
Section 13.1. This Director Plan shall become effective upon
adoption by the Board of Directors, and Options may be issued
hereunder from and after that date subject to the provisions of
Section 3.3 above. This Director Plan must be approved by the
Company's stockholders in accordance with the applicable provisions
(relating to the issuance of stock or options) of the Company's
governing documents and state law or, if no such approval is
prescribed therein, by the affirmative vote of the holders of a
majority of the votes cast at a duly held stockholders meeting at
which a quorum representing a majority of all the Company's
outstanding voting stock is present and voting (in person or by proxy)
or, without regard to any required time period for approval, by any
other method permitted by Section 422 of the Code and the regulations
thereunder. If such stockholder approval is not obtained within one
year of the adoption of this Director Plan by the Board of Directors
or within such other time period required under Section 422 of the
Code and the regulations thereunder, this Director Plan shall remain
in force, provided however, that all Options issued and issuable
hereunder shall automatically be deemed to be Non-Qualified Options.
IN WITNESS WHEREOF, pursuant to the approval or adoption of this
Director Plan by the Board of Directors, this Director Plan is
executed and adopted as of the 19th day of September, 1995.
Medcross, Inc.
[CORPORATE SEAL]
By: /s/ Henry Y.L. Toh
Its: President
ATTEST:
By: /s/ Stephanie Giallourakis
Secretary
<PAGE>
Appendix B
MEDCROSS, INC.
1995 EMPLOYEE STOCK OPTION AND APPRECIATION RIGHTS PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
Section 1.1. Mecross, Inc. (the "Company"), a Florida
corporation, hereby establishes a stock option and appreciation rights
plan to be named the Mecross, Inc. 1995 Employee Stock Option and
Appreciation Rights Plan (the "1995 Employee Plan").
Section 1.2. The purpose of this 1995 Employee Plan is to
induce persons who are officers, employees and consultants (none of
whom is also a director) of the Company or any of its subsidiaries who
are in a position to contribute materially to the Company's prosperity
to remain with the Company, to offer said persons incentives and
rewards in recognition of their contributions to the Company's
progress, and to encourage said persons to continue to promote the
best interests of the Company. This 1995 Employee Plan provides for
the grant of options to purchase shares of common stock of the
Company, par value $.007 per share (the "Common Stock") which qualify
as incentive stock options ("Incentive Options") under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), to persons
who are employees, as well as options which do not so qualify
("Non-Qualified Options") to be issued to persons, including those who
are not employees. This 1995 Employee Plan also provides for grants
of stock appreciation rights ("Rights") in connection with the grant
of options under this 1995 Employee Plan. Incentive Options and Non-
Qualified Options may be collectively referred to hereinafter as the
"Options" as the context may require.
Section 1.3. All options and other rights previously granted by
the Company under any other plan previously adopted by the Company
shall continue to be governed by such plan. All Options granted
hereunder on or after the date that this 1995 Employee Plan has been
approved and adopted by the Company's board of directors (the "Board
of Directors") shall be governed by the terms and conditions of this
1995 Employee Plan unless the terms of such option specifically
indicate that it is not to be so governed.
ARTICLE II
ADMINISTRATION
Section 2.1. All determinations under this 1995 Employee Plan
concerning the selection of persons eligible to receive awards under
this 1995 Employee Plan and with respect to the timing, pricing and
amount of an award under this 1995 Employee Plan (other than pursuant
to a non-discretionary formula set forth in this Plan) shall be made
by the administrator (the "Administrator") of this 1995 Employee Plan.
The Administrator shall be either: (a) the Board of Directors, if
each member of the Board of Directors is a "disinterested person" for
the purposes of this 1995 Employee Plan within the meaning of such
<PAGE>
term as defined by Rule 16b-3 (as such rule may be amended from time
to time, "Rule 16b-3"), under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or (b) in the discretion of the Board of
Directors by a committee (the "Committee") of not less than two
members of the Board of Directors, each of whom is a "disinterested
person." A "disinterested person" within the meaning of Rule 16b-3 as
in effect upon the date this 1995 Employee Plan is adopted by the
Board of Directors is a person who has not been granted or awarded
equity securities (within the meaning of the Exchange Act) under this
1995 Employee Plan or any other plan of the Company or any affiliate
thereof at any time within one year prior to such person's service as
a member of the Administrator or during such service, except as
otherwise permitted by Rule 16b-3(c). In the event this 1995 Employee
Plan is administered by the Committee, the Committee shall select one
of its members to serve as the chairman thereof and shall hold its
meetings at such times and places as it may determine. In such case,
a majority of the total number of members of the Committee shall be
necessary to constitute a quorum; and (i) the affirmative act of a
majority of the members present at any meeting at which a quorum is
present, or (ii) the approval in writing by a majority of the members
of the Committee, shall be necessary to constitute action by the
Committee.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this 1995 Employee Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent that any provision of this 1995 Employee
Plan or action by the Administrator fails to so comply, it shall be
deemed to be null and void, to the extent permitted by law and deemed
advisable by the Administrator.
Section 2.2. The provisions of this 1995 Employee Plan relating
to Incentive Options are intended to comply in every respect with
Section 422 of the Code ("Section 422") and the regulations
promulgated thereunder. In the event that any future statute or
regulation shall modify Section 422, this 1995 Employee Plan shall be
deemed to incorporate by reference such modification. Any stock
option agreement relating to the grant of any Incentive Option
pursuant to this 1995 Employee Plan, which option is outstanding and
unexercised at the time that any modifying statute or regulation
becomes effective, shall also be deemed to incorporate by reference
such modification, and no notice of such modification need be given to
the Optionee (as hereinafter defined). Any stock option agreement
relating to an Incentive Option shall provide that the Optionee (as
hereinafter defined) hold the stock received upon exercise of such
Incentive Option for a minimum of two years from the date of grant of
the Incentive Option and one year from the date of exercise of such
Incentive Option, absent the written approval, consent or waiver of
the Administrator.
Section 2.3. If any provision of this 1995 Employee Plan is
determined to disqualify the shares of Common Stock purchasable upon
exercise of an Incentive Option granted under this 1995 Employee Plan
from the special tax treatment provided by Section 422, such provision
shall be deemed to incorporate by reference the modification required
to qualify such shares of Common Stock for said tax treatment.
Section 2.4. The Company shall grant Options under this 1995
Employee Plan in accordance with determinations made by the
Administrator pursuant to the provisions of this 1995 Employee Plan.
All Options granted pursuant to this 1995 Employee Plan shall be
<PAGE>
clearly identified as Incentive Options or Non-Qualified Options. The
Administrator may from time to time adopt (and thereafter amend or
rescind) such rules and regulations for carrying out this 1995
Employee Plan and take such action in the administration of this 1995
Employee Plan, not inconsistent with the provisions hereof, as it
shall deem proper. The Board of Directors or, subject to the
supervision of the Board of Directors, the Committee, as the
Administrator, shall have plenary discretion, subject to the express
provisions of this 1995 Employee Plan, to determine which officers,
employees and consultants shall be granted Options, the number of
shares subject to each Option, the time or times when an Option may be
exercised (whether in whole or in installments), whether Rights under
Section 7.6 hereof shall be granted, the terms and provisions of the
respective option agreements (which need not be identical), including
such terms and provisions which may be amended from time to time as
shall be required, in the judgment of the Administrator, to conform to
any change in any law or regulation applicable hereto, and to make all
other determinations deemed necessary or advisable for the
administration of this 1995 Employee Plan. The interpretation and
construction of any provision of this 1995 Employee Plan by the
Administrator (unless otherwise determined by the Board of Directors)
shall be final, conclusive and binding upon all persons. Directors of
the Company (or any subsidiary of the Company) may not participate in
this 1995 Employee Plan.
Section 2.5. No member of the Administrator shall be liable for
any action or determination made in good faith with respect to
administration of this 1995 Employee Plan or the Options granted
hereunder. A member of the Administrator shall be indemnified by the
Company, pursuant to the Company's bylaws, for any expenses, judgments
or other costs incurred as a result of a lawsuit filed against such
member claiming any rights or remedies arising out of such member's
participation in the administration of this 1995 Employee Plan.
ARTICLE III
TOTAL NUMBER OF SHARES TO BE OPTIONED
Section 3.1. There shall be reserved for issuance or transfer
upon exercise of Options to be granted from time to time under this
1995 Employee Plan an aggregate of 400,000 shares of Common Stock of
the Company (subject to adjustment as provided in Article VIII
hereof). The shares issued upon exercise of any Options granted under
this 1995 Employee Plan may be shares of Common Stock previously
issued and reacquired by the Company at any time or authorized but
unissued shares of Common Stock, as the Board of Directors from time
to time may determine.
Section 3.2. In the event that any Options outstanding under
this 1995 Employee Plan for any reason expire or are terminated
without having been exercised in full or shares of Common Stock
subject to Options are surrendered in whole or in part pursuant to
Rights granted under Section 7.6 hereof (except to the extent that
shares of Common Stock are issued as payment to the holder of the
Option upon such surrender) the unpurchased shares of Common Stock
subject to such Option and any such surrendered shares of Common Stock
may again be available for transfer under this 1995 Employee Plan.
<PAGE>
Section 3.3. No Options shall be granted pursuant to this 1995
Employee Plan to any Optionee after the tenth anniversary of the
earlier of: (a) the date that this 1995 Employee Plan is adopted by
the Board of Directors, or (b) the date that this 1995 Employee Plan
is approved by the stockholders of the Company.
ARTICLE IV
ELIGIBILITY
Section 4.1. Non-Qualified Options may be granted pursuant to
this 1995 Employee Plan only to officers, employees and consultants of
the Company (or any of its subsidiaries) selected by the
Administrator, and Incentive Options may be granted pursuant to this
1995 Employee Plan only to employees (including officers who are also
employees) of the Company (or any of its subsidiaries) selected by the
Administrator. Persons granted Options pursuant to this 1995 Employee
Plan are referred to herein as "Optionees." For purposes of
determining who is an employee with respect to eligibility for
Incentive Options, Section 422 of the Code shall govern. The
Administrator may determine (in its sole discretion) that any person
who would otherwise be eligible to be granted Options shall,
nonetheless, be ineligible to receive any award under this 1995
Employee Plan.
Section 4.2. The Administrator will (in its discretion)
determine the persons to be granted Options, the time or times at
which Options shall be granted, the number of shares of Common Stock
subject to each Option, the terms of a vesting or forfeiture schedule,
if any, the type of Option issued, the period during which such
Options may be exercised, the manner in which Options may be exercised
and all other terms and conditions of the Options; provided, however,
no Option will be granted which has terms or conditions inconsistent
with those stated in Articles V and VI hereof. Relevant factors in
making such determinations may include the value of the services
rendered by the respective Optionee, his or her present and potential
contributions to the Company, and such other factors which are deemed
relevant in accomplishing the purpose of this 1995 Employee Plan.
ARTICLE V
TERMS AND CONDITIONS OF OPTIONS
Section 5.1. Each Option granted under this 1995 Employee Plan
shall be evidenced by a stock option certificate and agreement (the
"Stock Option Certificate and Agreement") in a form consistent with
this 1995 Employee Plan, provided that the following terms and
conditions shall apply:
(a) The price at which each share of Common Stock covered by an
Option may be purchased shall be set forth in the Stock Option
Certificate and Agreement and shall be determined by the
Administrator, provided that the option price for any Incentive Option
shall not be less than the "fair market value" of the shares of Common
Stock at the time of grant determined in accordance with Section
5.1(b) below. Notwithstanding the foregoing, if an Incentive Option
to purchase shares of Common Stock is granted pursuant to this 1995
<PAGE>
Employee Plan to an Optionee who, on the date of the grant, directly
or indirectly owns more than ten percent (10%) of the voting power of
all classes of capital stock of the Company (or its parent or
subsidiary), not including the shares of Common Stock obtainable upon
exercise of the Option, the minimum exercise price of such Option
shall be not less than one hundred ten percent (110%) of the "fair
market value" of the shares of Common Stock on the date of grant
determined in accordance with Section 5.1(b) below.
(b) The "fair market value" shall be determined by the
Administrator, which determination shall be binding upon the Company
and its officers, employees and consultants. The determination of the
fair market value shall be based upon the following: (i) if the shares
of Common Stock are not listed and traded upon a recognized securities
exchange and there is no report of stock prices with respect to the
shares of Common Stock published by a recognized stock quotation
service, on the basis of the recent purchases and sales of the shares
of Common Stock in arms-length transactions; or (ii) if the shares of
Common Stock are not then listed and traded upon a recognized
securities exchange or quoted on the NASDAQ Stock Market, and there
are reports of stock prices by a recognized quotation service, upon
the basis of the last reported sale or transaction price of such stock
on the date of grant as reported by a recognized quotation service,
or, if there is no last reported sale or transaction price on that
day, then upon the basis of the mean of the last reported closing bid
and closing asked prices for such stock on that day or on the date
nearest preceding that day; or (iii) if the shares of Common Stock
shall then be listed and traded upon a recognized securities exchange
or quoted on the NASDAQ Stock Market, upon the basis of the last
reported sale or transaction price at which shares of Common Stock
were traded on such recognized securities exchange on the date of
grant or, if the shares of Common Stock were not traded on such date,
upon the basis of the last reported sale or transaction price on the
date nearest preceding that date. The Administrator shall also
consider such other factors relating to the fair market value of the
shares of Common Stock as it shall deem appropriate.
(c) For the purpose of determining whether an Optionee owns more
than ten percent (10%) of the voting power of all classes of stock of
the Company, an Optionee is considered to own those shares which are
owned directly or indirectly through brothers and sisters (including
half-blooded siblings), spouse, ancestors and lineal descendants; and
proportionately as a shareholder of a corporation, a partner of a
partnership, and/or a beneficiary of a trust or an estate that owns
shares of the Company.
(d) Notwithstanding any other provision of this 1995 Employee
Plan, in accordance with the provisions of Section 422(d) of the Code,
to the extent that the aggregate fair market value (determined at the
time the Option is granted) of the shares of Common Stock of the
Company with respect to which Incentive Options (without reference to
this provision) are exercisable for the first time by any individual
in any calendar year under any and all stock option plans of the
Company, its subsidiary corporations and its parent (if any) exceeds
$100,000, such Options shall be treated as Non-Qualified Options.
(e) An Optionee may, in the Administrator's discretion, be
granted more than one Incentive Option or Non-Qualified Option during
the duration of this 1995 Employee Plan, and may be issued a
combination of Non-Qualified Options and Incentive Options; provided,
<PAGE>
however, that non-employees are not eligible to receive Incentive
Options and directors are not eligible to receive any Options
hereunder.
(f) The duration of any Option and any Right related thereto
shall be within the sole discretion of the Administrator; provided,
however, that any Incentive Option granted to a ten percent (10%) or
less stockholder or any Non-Qualified Option shall, by its terms, be
exercised within ten years after the date the Option is granted and
any Incentive Option granted to a greater than ten percent (10%)
stockholder shall, by its terms, be exercised within five years after
the date the Option is granted.
(g) An Option and any Right related thereto shall not be
transferable by the Optionee other than by will, or by the laws of
descent and distribution. An Option may be exercised during the
Optionee's lifetime only by the Optionee.
(h) At least six months shall elapse from the date on which an
Option is granted to an officer or beneficial owner of more than ten
percent (10%) of the outstanding shares of Common Stock of the Company
under this 1995 Employee Plan by the Administrator to the date on
which any share of Common Stock underlying such Option is sold or any
Right related thereto is exercised, unless the Administrator otherwise
consents in writing.
ARTICLE VI
EMPLOYMENT OR SERVICE OF OPTIONEE
Section 6.1. If the employment or service of an Optionee is
terminated for cause, the option rights of such Optionee, both accrued
and future, under any then outstanding Non-Qualified or Incentive
Option shall terminate immediately. "Cause" shall mean incompetence
in the performance of duties, disloyalty, dishonesty, theft,
embezzlement, unauthorized disclosure of patents, processes or trade
secrets of the Company, individually or as an employee, partner,
associate, officer or director of any organization. The determination
of the existence and the proof of "cause" shall be made by the
Administrator and, subject to the review of any determination made by
the Administrator, such determination shall be binding on the Optionee
and the Company.
Section 6.2. If the employment or service of the Optionee is
terminated by either the Optionee or the Company for any reason other
than for cause, death, or for disability, as defined in Section
22(e)(3) of the Code, the option rights of such Optionee under any
then outstanding Non-Qualified or Incentive Option shall, subject to
the provisions of Section 5.1(h) hereof, be exercisable by such
Optionee at any time prior to the expiration of the Option or within
three months after the date of such termination, whichever period of
time is shorter, but only to the extent of the accrued right to
exercise the Option at the date of such termination.
Section 6.3. In the case of an Optionee who becomes disabled,
as defined by Section 22(e)(3) of the Code, the option rights of such
Optionee under any then outstanding Non-Qualified or Incentive Option
shall, subject to the provisions of Section 5.1(h) hereof, be
exercisable by such Optionee at any time prior to the expiration of
<PAGE>
the Option or within one year after the date of termination of
employment or service due to disability, whichever period of time is
shorter, but only to the extent of the accrued right to exercise the
Option at the date of such termination.
Section 6.4. In the event of the death of an Optionee, the
option rights of such Optionee under any then outstanding Non-
Qualified or Incentive Option shall be exercisable by the person or
persons to whom these rights pass by will or by the laws of descent
and distribution, at any time prior to the expiration of the Option or
within three years after the date of death, whichever period of time
is shorter, but only to the extent of the accrued right to exercise
the Option at the date of death. If a person or estate acquires the
right to exercise a Non-Qualified or Incentive Option by bequest or
inheritance, the Administrator may require reasonable evidence as to
the ownership of such Option, and may require such consents and
releases of taxing authorities as the Administrator may deem
advisable.
Section 6.5. The Administrator may also provide that an
employee must be continuously employed by the Company for such period
of time as the Administrator, in its discretion, deems advisable
before the right to exercise any portion of an Option granted to such
employee will accrue, and may also set such other targets,
restrictions or other terms relating to the employment of the Optionee
which targets, restrictions, or terms must be fulfilled or complied
with, as the case may be, prior to the exercise of any portion of an
Option granted to any employee.
Sgection 6.6. Options granted under this 1995 Employee Plan
shall not be affected by any change of duties or position, so long as
the Optionee continues in the service of the Company.
Section 6.7. Nothing contained in this 1995 Employee Plan, or
in any Option granted pursuant to this 1995 Employee Plan, shall
confer upon any Optionee any right with respect to continuance of
employment or service by the Company nor interfere in any way with the
right of the Company to terminate the Optionee's employment or service
or change the Optionee's compensation at any time.
ARTICLE VII
PURCHASE OF SHARES
Section 7.1. Except as provided in this Article VII, an Option
shall be exercised by tender to the Company of the full exercise price
of the shares of Common Stock with respect to which the Option is
exercised and written notice of the exercise. The right to purchase
shares of Common Stock shall be cumulative so that, once the right to
purchase any shares of Common Stock has accrued, such shares or any
part thereof may be purchased at any time thereafter until the
expiration or termination of the Option. A partial exercise of an
Option shall not affect the right of the Optionee to exercise the
Option from time to time, in accordance with this 1995 Employee Plan,
as to the remaining number of shares of Common Stock subject to the
Option. The purchase price of the shares shall be in United States
dollars, payable in cash or by certified bank check. Notwithstanding
the foregoing, in lieu of cash, an Optionee may, with the approval of
<PAGE>
the Administrator, exercise his or her Option by tendering to the
Company shares of Common Stock of the Company owned by him or her and
having an aggregate fair market value at least equal to the full
exercise price. The fair market value of any shares of Common Stock
so surrendered shall be determined by the Administrator in accordance
with Section 5.1(b) hereof.
Section 7.2. Except as provided in Article VI above, an Option
may not be exercised unless the holder thereof is an officer,
employee, or consultant of the Company at the time of exercise.
Section 7.3. No Optionee, or Optionee's executor,
administrator, legatee, or distributee or other permitted transferee,
shall be deemed to be a holder of any shares of Common Stock subject
to an Option for any purpose whatsoever unless and until a stock
certificate or certificates for such shares are issued to such person
under the terms of this 1995 Employee Plan. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for
which the record date is prior to the date such stock certificate is
issued, except as provided in Article VIII hereof.
Section 7.4. If: (i) the listing, registration or qualification
of the Options issued hereunder, or of any securities issuable upon
exercise of such Options (the "Subject Securities") upon any
securities exchange or quotation system or under federal or state law
is necessary as a condition of or in connection with the issuance or
exercise of the Options, or (ii) the consent or approval of any
governmental regulatory body is necessary as a condition of or in
connection with the issuance or exercise of the Options, the Company
shall not be obligated to deliver the certificates representing the
Subject Securities or to accept or to recognize an Option exercise
unless and until such listing, registration, qualification, consent or
approval shall have been effected or obtained. The Company will take
reasonable action to so list, register, or qualify the Options and the
Subject Securities, or effect or obtain such consent or approval, so
as to allow for their issuance.
Section 7.5. An Optionee may be required to represent to the
Company as a condition of his or her exercise of Options issued under
this 1995 Employee Plan that: (i) the Subject Securities acquired
upon exercise of his or her Option are being acquired by him or her
for investment purposes only and not with a view to distribution or
resale, unless counsel for the Company is then of the view that such a
representation is not necessary and is not required under the
Securities Act of 1933, as amended (the "Securities Act"), or any
other applicable statute, law, regulation or rule; and (ii) that the
Optionee shall make no exercise or disposition of an Option or of the
Subject Securities in contravention of the Securities Act, the
Exchange Act or the rules and regulations thereunder. Optionees may
also be required to provide (as a condition precedent to exercise of
an Option) such documentation as may be reasonably requested by the
Company to assure compliance with applicable law and the terms and
conditions of this 1995 Employee Plan and the subject Option.
Section 7.6. The Administrator may, in its discretion, grant in
connection with any Option, at any time prior to the exercise thereof,
the right (previously defined as a "Right" or collectively, the
"Rights") to surrender all or part of the Option to the extent that
such Option is exercisable and receive in exchange an amount (payable
<PAGE>
in cash, shares of Common Stock valued at the then fair market value,
or a combination thereof as determined by the Administrator) equal to
the difference (the "Spread") between the then fair market value of
the shares of Common Stock issuable upon the exercise of the Option
(or portions thereof surrendered) and the option price payable upon
the exercise of the Option (or portions thereof surrendered). Such
Rights may be included in an Option only under the following
conditions: (a) the Rights will expire no later than the expiration
of the underlying Option; (b) the Rights may be for no more than one
hundred percent (100%) of the Spread; (c) the Rights are transferable
only when the underlying Option is transferable and under the same
conditions; (d) the Rights may be exercised only when the underlying
Option is eligible to be exercised; and (e) the Rights may be
exercised only when the Spread is positive, i.e., when the market
price of the stock subject to the Option exceeds the exercise price of
the Option.
Section 7.7. An Option may also be exercised by tender to the
Company of a written notice of exercise together with advice of the
delivery of an order to a broker to sell part or all of the shares of
Common Stock subject to such exercise notice and an irrevocable order
to such broker to deliver to the Company (or its transfer agent)
sufficient proceeds from the sale of such shares to pay the exercise
price and any withholding taxes. All documentation and procedures to
be followed in connection with such a "cashless exercise" shall be
approved in advance by the Administrator.
ARTICLE VIII
CHANGE IN NUMBER OF OUTSTANDING SHARES OF
STOCK, ADJUSTMENTS, REORGANIZATIONS, ETC.
Section 8.1. In the event that the outstanding shares of Common
Stock of the Company are hereafter increased or decreased or changed
into or exchanged for a different number of shares or kind of shares
or other securities of the Company or of another corporation by reason
of reorganization, merger, consolidation, recapitalization,
reclassification, stock split, combination of shares, or a dividend
payable in capital stock, appropriate adjustment shall be made by the
Administrator in the number and kind of shares for the purchase of
which Options may be granted under this 1995 Employee Plan, including
the maximum number that may be granted to any one person. In
addition, the Administrator shall make appropriate adjustments in the
number and kind of shares as to which outstanding Options, or portions
thereof then unexercised, shall be exercisable, to the end that the
Optionee's proportionate interest shall be maintained as before the
occurrence to the unexercised portion of the Option and with a
corresponding adjustment in the option price per share. Any such
adjustment made by the Administrator shall be conclusive.
Section 8.2. The grant of an Option pursuant to this 1995
Employee Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge or to
consolidate or to dissolve, liquidate or sell, or transfer all or any
part of its business or assets.
Section 8.3. Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the
Company as a result of which the outstanding securities of the class
<PAGE>
then subject to Options hereunder are changed into or exchanged for
cash or property or securities not of the Company's issue, or upon a
sale of substantially all the property of the Company to an
association, person, party, corporation, partnership, or control group
as that term is construed for purposes of the Exchange Act, this 1995
Employee Plan shall terminate, and all Options theretofore granted
hereunder shall terminate, unless provision be made in writing in
connection with such transaction for the continuance of this 1995
Employee Plan and/or for the assumption of Options theretofore
granted, or the substitution for such Options of options covering the
stock of a successor employer corporation, or a parent or a subsidiary
thereof, with appropriate adjustments as to the number and kind of
shares and prices, in which event this 1995 Employee Plan and options
theretofore granted shall continue in the manner and under the terms
so provided. If this 1995 Employee Plan and unexercised Options shall
terminate pursuant to the foregoing sentence, all persons owning any
unexercised portions of Options then outstanding shall have the right,
at such time prior to the consummation of the transaction causing such
termination as the Company shall designate, to exercise the
unexercised portions of their Options, including the portions thereof
which would, but for this Section 8.3 not yet be exercisable.
ARTICLE IX
DURATION, AMENDMENT AND TERMINATION
Section 9.1. The Board of Directors may at any time terminate
this 1995 Employee Plan or make such amendments hereto as it shall
deem advisable and in the best interests of the Company, without
action on the part of the stockholders of the Company unless such
approval is required pursuant to Section 422 of the Code or the
regulations thereunder or Rule 16b-3 under the Exchange Act; provided,
however, that no such termination or amendment shall, without the
consent of the individual to whom any Option shall theretofore have
been granted, affect or impair the rights of such individual under
such Option, and provided, further, that unless the holders of a
majority of each of the classes of the Company's outstanding voting
stock entitled to vote thereon shall have first approved thereof, no
amendment of this 1995 Employee Plan shall be made whereby: (a) the
total number of shares of Common Stock which may be optioned under
this 1995 Employee Plan to all individuals, or any of them, shall be
increased, except by operation of the adjustment provisions of Article
VIII hereof, (b) the authority to administer this 1995 Employee Plan
by the Administrator shall be withdrawn, (c) the maximum term of the
Options shall be extended, (d) the minimum option price of Incentive
Options shall be decreased, (e) the price to Optionees to whom Options
have been granted shall be changed, or (f) the class of individuals
eligible to participate in this 1995 Employee Plan is modified.
Pursuant to Section 422(b) of the Code, no Incentive Option may be
granted pursuant to this 1995 Employee Plan after ten years from the
date this 1995 Employee Plan is adopted or the date this 1995 Employee
Plan is approved by the stockholders of the Company, whichever is earlier.
<PAGE>
ARTICLE X
RESTRICTIONS
Section 10.1. Any shares of Common Stock issued pursuant to this
1995 Employee Plan shall be subject to such restrictions on transfer
and limitations as shall, in the opinion of the Administrator, be
necessary or advisable to assure compliance with the laws, rules and
regulations of the United States government or any state or
jurisdiction thereof. In addition, the Administrator may in any
Stock Option Certificate and Agreement impose such other restrictions
upon the exercise of an Option or upon the sale or other disposition
of the shares of Common Stock deliverable upon exercise thereof as the
Administrator may, in its sole discretion, determine. By accepting an
award pursuant to this 1995 Employee Plan, each Optionee shall thereby
agree to any such restrictions.
Section 10.2. Any certificate issued to evidence shares of
Common Stock issued pursuant to an Option shall bear such legends and
statements as the Administrator, the Board of Directors or counsel to
the Company shall deem advisable to assure compliance with the laws,
rules and regulations of the United States government or any state or
jurisdiction thereof. No shares of Common Stock will be delivered
pursuant to exercise of the Options granted under this 1995 Employee
Plan until the Company has obtained such consents or approvals from
such regulatory bodies of the United States government or any state or
jurisdiction thereof as the Administrator, the Board of Directors or
counsel to the Company deems necessary or advisable.
ARTICLE XI
FINANCIAL ASSISTANCE
Section 11.1. The Company is vested with authority under this
1995 Employee Plan to assist any employee to whom an Option is granted
hereunder (including any officer of the Company or any of its
subsidiaries who is also an employee) in the payment of the purchase
price payable on exercise of such Option, by lending the amount of
such purchase price to such employee on such terms and at such rates
of interest and upon such security (or unsecured) as shall have been
authorized by or under authority of the Board of Directors. Any such
assistance shall comply with the requirements of Regulation G
promulgated by the Board of the Federal Reserve System, as amended
from time to time, and any other applicable law, rule or regulation.
ARTICLE XII
APPLICATION OF FUNDS
Section 12.1. The proceeds received by the Company from the
issuance and sale of Common Stock upon exercise of Options granted
pursuant to this 1995 Employee Plan are to be added to the general
funds of the Company and used for its corporate purposes as determined
by the Board of Directors.
<PAGE>
ARTICLE XIII
EFFECTIVENESS OF PLAN
Section 13.1. This 1995 Employee Plan shall become effective
upon adoption by the Board of Directors, and Options may be issued
hereunder from and after that date subject to the provisions of
Section 3.3 above. This 1995 Employee Plan must be approved by the
Company's stockholders in accordance with the applicable provisions
(relating to the issuance of stock or options) of the Company's
governing documents and state law or, if no such approval is
prescribed therein, by the affirmative vote of the holders of a
majority of the votes cast at a duly held stockholders meeting at
which a quorum representing a majority of all the Company's
outstanding voting stock is present and voting (in person or by proxy)
or, without regard to any required time period for approval, by any
other method permitted by Section 422 of the Code and the regulations
thereunder. If such stockholder approval is not obtained within one
year of the adoption of this 1995 Employee Plan by the Board of
Directors or within such other time period required under Section 422
of the Code and the regulations thereunder, this 1995 Employee Plan
shall remain in force, provided however, that all Options issued and
issuable hereunder shall automatically be deemed to be Non-Qualified
Options.
IN WITNESS WHEREOF, pursuant to the approval of this 1995 Employee
Plan by the Board of Directors, this 1995 Employee Plan is executed
and adopted as of the 19th day of September, 1995.
Medcross, Inc.
[CORPORATE SEAL]
By: /s/ Henry Y.L. Toh
Its: President
ATTEST:
By: /s/ Stephanie Giallourakis
Secretary
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