SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant: X
Filed by a Party other than the Registrant:
Check the appropriate box:
X Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e(2)).
Definitive Proxy Statement
Definitive Additional Materials
Soliticiting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12.
FUTURE MEDICAL TECHNOLOGIES INTERNATIONAL, INC.
-------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Board of Directors
-------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and O-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies.
3) Proposed maximum aggregate value of transaction.
4) Proposed maximum aggregate value of transaction.
5) Total fee paid:
____ Check box if any part of the fee is offset as provided by
Exchange Act Rule O-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration number, or the Form or Schedule and the date of its
filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.
3) Filing Party:
4) Date Filed:
FUTURE MEDICAL TECHNOLOGIES INTERNATIONAL, INC.
PROXY FOR ANNUAL MEETING FISCAL 1995
Please sign and return immediately
KNOW ALL MEN BY THESE PRESENTS that I, the undersigned being a
stockholder of Future Medical Technologies International, Inc.,
Wayne, Pennsylvania, do hereby constitute and appoint Bruce LaMont
and John Whittle, or either one of them (with full power to act
alone), my true and lawful attorney(s) with full power of
substitution to attend the Annual Meeting of Stockholders of said
Corporation to be held at the Holiday Inn City Line, 4100
Presidential Boulevard, Philadelphia, Pennsylvania 19131 on
September 20, 1996 at 10:00 a.m. or any and all adjournment
thereof, and to vote all stock owned by me or standing in my name,
place and stead on the proposal specified in the Notice of Meeting
dated August 20, 1996 or any and all adjournments thereof, with all
the power I possess if I were personally present, hereby ratifying
the confirming all that my said proxy or proxies may be in my name,
place and stead as follows:
1. Election of Directors
To elect three (3) Directors, each for a term of one (1)
year or until the next Annual Meeting:
Bruce LaMont
William K. Robinson
John Whittle
It is specifically directed that this Proxy be voted:
FOR ALL NOMINEES [ ] WITHHOLD ALL NOMINEES [ ]
AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEES MAY BE
WITHHELD BY LINING OR OTHERWISE STRIKING OUT THE NAME OF
SUCH NOMINEE(S).
2. Proposal to ratify Baratz & Associates, P.A. as the
Company's Independent Public Auditors for fiscal 1996.
IN FAVOR OF [ ] AGAINST [ ] ABSTAIN [ ]
3. Proposal to approve the 1996 Stock Option Plan (2,000,000
shares).
IN FAVOR OF [ ] AGAINST [ ] ABSTAIN [ ]
<PAGE>
4. Approve the name change of the Company to Covalent Group, Inc.
IN FAVOR OF [ ] AGAINST [ ] ABSTAIN [ ]
5. Approve the disposition of 100% of the stock of Future Medical
Technologies, Inc. in a sale to Medical Technologies, Inc.
IN FAVOR OF [ ] AGAINST [ ] ABSTAIN [ ]
6. Transact any other business as may properly be brought
before the Meeting.
IN FAVOR OF [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS
PROXY WILL BE VOTED AS DIRECTED. BY THE ABSENCE OF DIRECTIONS,
THIS PROXY WILL BE VOTED FOR THE THREE NOMINEES FOR ELECTION, AND
FOR PROPOSALS 2, 3, 4, 5 AND 6.
___________________________________________________________________
(L.S.)
(PRINT NAME)
DATE: ___________________________________, 1996
___________________________________________________________________
(L.S.)
(SIGNATURE OF STOCKHOLDER)
___________________________________________________________________
(L.S.)
(PRINT NAME)
DATE: ___________________________________, 1996
___________________________________________________________________
(L.S.)
(SIGNATURE OF STOCKHOLDER)
NOTE: ALL JOINT OWNERS MUST SIGN INDIVIDUALLY. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN OR CUSTODIAN,
PLEASE
GIVE FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN.
FMTI\PROXY.96
FUTURE MEDICAL TECHNOLOGIES INTERNATIONAL, INC.
One Glenhardie Corporate Center, Suite 201
1275 Drummers Lane
Wayne, PA. 19087
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
on
SEPTEMBER 20, 1996
To the Shareholders of
Future Medical Technologies International, Inc.
The Annual Meeting of Shareholders of Future Medical Technologies
International, Inc. (the "Company") will be held at the Holiday Inn
City Line, 4100 Presidential Boulevard, Philadelphia, Pennsylvania
19131 on September 20, 1996 at 10:00 a.m. for the following
purposes:
(1) To elect three Directors for the ensuing year;
(2) To approve the selection of Baratz & Associates, P.A., as
the Company's independent public accountants for the
fiscal year ending December 31, 1996;
(3) Proposal to approve the 1996 Stock Option Plan
(2,000,000 shares).
(4) Approve the name change of the Company to Covalent Group,
Inc.
(5) Approve the disposition of 100% of the stock of Future
Medical Technologies, Inc. in a sale to Medical
Technologies, Inc.
(6) To transact any other business as may properly be brought
before the meeting.
The Board of Directors has fixed the close of business on August
20, 1996 as the record date for determining the shareholders
entitled to notice of and to vote at the meeting.
Your attention is directed to the accompanying Proxy Statement for
the text of the resolutions to be proposed at the meeting and
further information regarding each proposal to be made.
SHAREHOLDERS UNABLE TO ATTEND THE MEETING IN PERSON ARE ASKED TO
VOTE, SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE
ENCLOSED SELF-ADDRESSED ENVELOPE, WHICH DOES NOT REQUIRE ANY
POSTAGE IF MAILED IN THE UNITED STATES.
By order of the Board of Directors,
/s/David Weitz
---------------------------
David Weitz, Secretary
August 20, 1996
Wayne, Pennsylvania
A copy of the Form 10-KSB Annual Report of the Company for the
fiscal year ended December 31, 1995 is enclosed herewith.
FUTURE MEDICAL TECHNOLOGIES INTERNATIONAL, INC.
One Glenhardie Corporate Center, Suite 201
1275 Drummers Lane
Wayne, PA. 19087
---------------
PROXY STATEMENT
---------------
Proxies, in the form enclosed with this Proxy Statement, are
solicited by the Board of Directors of Future Medical Technologies
International, Inc. for the Annual Meeting of Shareholders to be
held on September 20, 1996 at 10:00 a.m. at the Holiday Inn City
Line, 4100 Presidential Boulevard, Philadelphia, Pennsylvania
19131.
Shareholders of record as of the close of business on August 20,
1996 will be entitled to vote at the meeting and any adjournment
thereof. As of that date, 11,542,403 shares of common stock of the
Corporation were outstanding and entitled to one vote each.
Execution of a proxy will not in any way affect a shareholder's
right to attend the meeting and vote in person. Any shareholder
submitted a proxy has the right to revoke it at any time before it
is exercised.
Any proxies that are sent in by shareholders may be revoked prior
to September 20, 1996 at 10:00 a.m. by mail or other deliveries in
writing, or be voice vote if the shareholder attends the annual
meeting.
The persons named as attorneys in the proxies are either Officers
or Directors of the Corporation. With respect to the election of
a Board of Directors, shares represented by proxies in the enclosed
for, which are received will be voted as stated below under
"Election of Directors." Where a choice has been specified on the
proxy with respect to the proposal, the shares represented by the
proxy will be voted in accordance with the specification and will
be votes for that proposal if no specification is indicated.
Under Nevada law, the presence of shareholders entitled to cast at
least a majority of the votes that all shareholders are entitled to
cast on a particular matter to be acted upon at a meeting, shall
constitute a quorum for the purposes of consideration and action on
a matter. Only shareholders indicating an affirmative or negative
decision on a matter are treated as voting, so that abstentions,
broker non-votes or mere absence or failure to vote is not
equivalent to a negative decision and will not count toward a
quorum, and if a quorum is otherwise present, effect the outcome of
<PAGE>
a vote. A broker non-vote occurs when a broker submits a proxy but
does not have the authority to vote a customer's shares on one or
more matters. The affirmative vote of the holders of a majority of
shares of common stock entitled to vote at the annual meeting is
required for approval of each of the actions proposes to be taken
at the annual meeting. In the event a shareholders' meeting is
called for the election of Directors and is adjourned for lack of
quorum and another shareholders' meeting is called, those
shareholders entitled to vote who attend the adjourned meeting,
although less than a quorum as fixed under Nevada law or in the by-
laws, shall nevertheless constitute a quorum for the purpose of
electing Directors. If a meeting called to vote upon an other
matter than the election of Directors has been adjourned for at
least 15 days because of the absence of a quorum, those
shareholders entitled to vote who attend such meeting, although
less than a quorum as fixed under Nevada law or in the by-laws
shall nevertheless constitute a quorum for purpose of acting upon
any matter set fourth in the notice of meeting, if the notice
actually states that those shareholders who attend the adjourned
meeting shall nevertheless constitute a quorum for the purpose of
acting on the matter, then the vote would be binding.
The same procedure will be followed for the other matters expected
to be presented to the meeting. If any other matter should be
presented at the meeting upon which it is proper to take a vote,
shares represented by all proxies received will be voted with
respect thereto in accordance with the judgment of the persons
named as proxies.
A Form 10-KSB annual report as filed with the SEC, including
complete financial statements audited by Baratz & Associates, P.A.
is enclosed with, but not as a part of, this Proxy Statement.
The first date that this Proxy Statement and Proxy Material were
sent to the shareholders was August 20, 1996.
Proposal No. 1 - ELECTION OF DIRECTORS
Three Directors are to be elected at the meeting, each to serve
until the next annual meeting and until his or her successor shall
have been elected and qualified. Each of the nominees named in the
following pages is presently a member of the Board of Directors.
In case any of the nominees should become unavailable for election,
for any reason not presently known or contemplated, the persons
named on the proxy card will have discretionary authority to vote
pursuant to the proxy for a substitute.
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION
<S> <C> <C> <C>
Bruce LaMont 44 1995 President, Chief Executive
Officer, Director
John Whittle 59 1996 Director
William K. Robinson 57 1996 Chief Financial Officer, Director
</TABLE>
BRUCE LAMONT, President, Chief Executive Officer and Director of
the Company. In 1993, Mr. Lamont founded Covalent Research
Alliance Corp. and still remains the President today. He has over
15 years experience in the pharmaceutical industry. From 1980 to
1993, Mr. Lamont worked at Merck Research Laboratories, Marketing
and Clinical Development of Merck Human Health Division, where he
designed, coordinated and managed clinical trials for NDA
submission. He also coordinated projects with marketing,
promoting, advertising, legal, manufacturing and regulatory
departments to ensure proper achievement of study objectives and
implemented clinical development database providing a liaison
capacity between marketing and clinical research and development.
Mr. LaMont received an Executive MBA and a Masters in Pharmaceutics
from Temple University and also holds a B.S. in Biology from
Villanova University. In addition, Mr. LaMont has extensive
research experience in Gastroenterology, Drug Metabolism,
Neurosurgery, Obstetrics and Gynecology. He has held research
positions at both the University of Pennsylvania and the Medical
College of Pennsylvania.
JOHN WHITTLE, Director. Mr. Whittle is Chairman, President, and
Chief Executive Officer of Farmers & Traders Life Insurance Company
located in Syracuse, New York. Prior to joining Farmers & Traders
in 1989, he held senior management positions with Mutual of New
York and served on the Boards of several of their subsidiaries.
Mr. Whittle received a Masters in Management from The American
College and also holds a B.S. in Insurance from Pennsylvania State
University. He is a chartered Life Underwriter (CLU).
WILLIAM K. ROBINSON, Chief Financial Officer joined the Company in
June 1996. He has over 25 years of diverse healthcare management
experience, both domestic and international, in large corporate and
emerging company operations. From 1994 to June 1996 he was Vice
President of Finance for Scott Specialty Gases, Inc., a
manufacturer of calibration and medical gases. He was President
and CEO of Tektagen, Inc., a biopharmaceutical testing laboratory
from 1991 to 1994. Previously, he was employed by SmithKline
<PAGE>
Beckman for 17 years, where he held the top financial positions in
the U.S. Pharmaceuticals, Clinical Laboratories and Animal Health
Divisions.
EXECUTIVE CASH COMPENSATION
Cash Compensation
The following table sets forth the aggregate compensation paid
by the Company for services rendered during the fiscal year ended
December 31, 1995; to the most highly compensated executive
officers of the Company as a group. There were no officers in the
company who received more than $100,000, for services rendered
during the transition fiscal year ending December 31, 1995, except
Bruce LaMont, President. There were no bonuses declared or other
short or long-term compensation.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
- --------------------------------------------------------------------------------
Name and Principal Fiscal Salary Bonus Other Annual Options
Position Year Compensation Granted
- --------------------- ------- ------ ------ ------------ -------
<S> <C> <C> <C> <C> <C>
Joseph B. Hippensteel,
President of FMT
Subsidiary 1995 $03 $0 $0 570,000(4)
12/31/94(2)$12,000 $0 $0 0
1994(1) $34,500 $0 $0 32,599
1993 $68,602 $0 $0 162,994
Bruce LaMont, President
of the Company and
CRA Subsidiary 1995 $240,000 $0 $0 0
12/31/94(2) N/A
1994 N/A
1993 N/A
</TABLE>
1 Mr. Hippensteel forgave all past accrued salary prior to 1994 totaling
$142,620 and Ms. Deanne Van Leeuwen, Vice President-Administration, Secretary,
Treasurer, Director, forgave all past accrued salary prior to 1994 totaling
$68,487.
2 For the transitional three month period ended December 31, 1994.
3 Mr. Hippensteel accrued $48,000 salary for fiscal year 1995.
4 Mr. Hippensteel and Deanne K. Van Leeuwen donated back 285,000 and 190,000 of
such options respectively in conjunction with the proposed sale of the FMT
subsidiary.
All executive officers of the Company are full-time employees of the
Company. There are no written employment agreements.
<PAGE>
OPTION GRANTS
On February 22, 1995, the Company granted options to two employees as per the
CRA Acquisition Agreement. David Weitz was granted 210,000 options for a five
year period subject to vesting limitations commencing December 31, 1994 at the
exercise price of the book value per share of Covalent divided by 72,000 ($.01
per share). Joseph B. Hippensteel and Deanne K. Van Leeuwen were granted five
year options to purchase 570,000 and 380,000 shares respectively at $2.875 per
share. On August 7, 1996 in conjunction with the disposition of FMT, Inc. Mr.
Hippensteel and Ms. Van Leeuwen donated one half of their options back to the
Company in conjunction with the proposed sale of the FMT subsidiary.
Option holders have five years from the date of grant to exercise any or all of
their options, and upon leaving the Company the options holders must exercise
within 30 days. These options exercise into restricted shares of Company stock.
COMMITTEES OF THE BOARD
The Board has established a Compensation Committee composed of an outside
Director, Mr. Whittle and William K. Robinson, CFO and Director.
DIRECTORS' REMUNERATION
Directors receive no cash compensation for services as Directors, except for
10,000 options at the exercise price of market value at date of grant per year
to the non-officer Directors.
The Company had four meetings of the Board of Directors during the last full
fiscal year. There was no incumbent who, during the last full fiscal year,
attended in person or by phone fewer than 75% of said meetings.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
"FOR" THE ENTIRE SLATE OF NOMINEES IN PROPOSAL NO. 1
A majority vote of over 50% will be necessary to carry this proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of August 20, 1996 certain information with
regard to beneficial ownership of outstanding shares of the Company's Common
Stock by (i) each person known by the Company to beneficially own five percent
or more of the outstanding shares of the Company's Common Stock, (ii) each
director and executive officer individually, and (iii) all executive officers
and directors of the Company as a group:
<PAGE>
<TABLE>
Name and Address of Percentage of
Beneficial Owner (1) Shares Shares Issued
<S> <C> <C>
Bruce & Sally Jo LaMont 6,104,000 52.88%
853 Appaloosa Drive
Collegeville, PA 19426
William N. Levy (2) 885,525 7.67%
Suite 309, Plaza 1000
Voorhees, NJ 08043
John J. Whittle 24,558(5) .21%
960 James Street
Syracuse, NY 13201
William K. Robinson 20,000(6) .17%
1275 Drummers Lane, Suite 201
Wayne, PA 19087
Joseph B. Hippensteel (2) 168,531(3) 1.46%
5240 Snapfinger Park Drive, Suite 140
Decatur, GA 30035
David Weitz 141,000(4) 1.22%
704 Delaware Avenue
Lansdale, PA. 19446
All Executive Officers 6,289,558 54.49%
and Directors as
a Group (three persons)
________
</TABLE>
<TABLE>
<S> <C>
(1) Unless otherwise noted, the Company believes that all persons named in the
above table has sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them.
(2) These individuals may be deemed "parents" and/or "promoters" of the
Company under the rules and regulations of the Securities Act by virtue of
their efforts in the organization of the Company.
(3) See Summary Compensation Table and last paragraph thereunder.
(4) David Weitz owns 1,000 shares of common stock as well as 210,000 options
to purchase common stock at $.01 per share, 140,000 of which are vested.
(5) 10,000 of which are Stock Options for outside Director
(6) Stock Option
</TABLE>
<PAGE>
Proposal No. 2 - APPOINTMENT OF ACCOUNTANTS
Subject to shareholder ratification, the Board of Directors has appointed the
firm, Baratz & Associates, P.A., Certified Public Accountants, as independent
auditors to make an examination of the accounts of the Company for the year
ending December 31, 1996.
One or more members of the Baratz firm are expected to be present at the
Annual Meeting, and will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 2
A majority vote of over 50% will be necessary to carry this proposal.
Proposal No. 3 - APPROVAL OF THE 1996 STOCK INCENTIVE PLAN
A. 1996 Stock Option Plan
Incentive Stock Options or Non-Statutory Stock Options may be issued for a
term of no more than five years from the date of grant, at an option price not
less than 100% of the fair market value of the Company's Common Stock at the
time of grant. In addition, the Board may award Common Stock under the Plan
as stock bonuses; restricted stock; stock appreciation rights (SAR's); cash
bonus rights; and foreign qualified grants. In addition, any non-employee
Director and/or Advisory Board Directors shall be automatically granted an
option to purchase 10,000 Shares of Common Stock at an exercise price of
market value at date of grant for each year that such person serves as a
Director. However, such options shall vest 100% after one year of continuous
service, and for employees shall vest 25% for each 12 months of continuous
service until fully vested on a month-by-month basis. Any Director, Officer
or Employee (except Consultants) who cease to be employed by the Company has
only 60 days (or 12 months in the event of death) after such termination of
employment to exercise whatever options they own that are vested. Also, such
Option holder shall not have any voting rights for the underlying Common
Stock, until such options are exercised. The Company believes that it should
reserve at least 2,000,000 shares of common stock underlying these stock
options which may be granted from time to time by the Board after
recommendations by the Compensation Committee.
A copy of the 1996 Stock Option Plan is included herewith.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 3
<PAGE>
Proposal No. 4 - APPROVE THE NAME CHANGE OF THE COMPANY TO
COVALENT GROUP, INC.
Since the Company has approved the sale of its FMT subsidiary subject to
shareholders' approval, the Company believes that the name of the Company
should be changed by amending its Certificate of Incorporation to Covalent
Group, Inc. Also, it's NASDAQ BB symbol would be changed from FMTI to COGR.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 4
Proposal No. 5 - APPROVE THE DISPOSITION OF 100% OF THE STOCK OF
FUTURE MEDICAL TECHNOLOGIES, INC. IN A
SALE TO MEDICAL TECHNOLOGIES, INC.
The Company's FMT subsidiary requires substantial funds for research and
development from investment at this time in order to fully develop its
business. The Board of Directors of the Company has decided that because of
its limited cash resources, that FMTI would be better served to spend its
resources on its other divisions. Accordingly, FMTI desires to sell its 100%
interest in FMT in order to avoid having to put further investment funds in
FMT and to stop the substantial reduction of earnings in the consolidated
financials that is adversely affecting FMTI ($110,000 FMT loss in second
quarter, 1996 alone).
A new corporation, Medical Technologies, Inc. ("MTI") has put together an
investment group including John Figliolini a shareholder of the Company that
is willing to invest $500,000 in MTI that will purchase 100% of the stock of
FMT from the Company thereby allowing FMT to continue as a separate operating
entity with at least sufficient working capital to provide R&D and operating
expenses to further exploit FMT technologies.
The Board of Directors of FMTI has voted to accept this proposal of sale
subject to receipt of a "Fairness Opinion" prepared by a NASD broker in good
standing, and subject to a Shareholder vote of FMTI, as soon as practical.
The Board has received such a "Fairness Opinion" from the Shamrock Partners
Ltd. in Media, PA which can be viewed at the Company's offices (which is
primarily based on the information above). The sales price is $250,000,
$25,000 down and the balance over the next four years with interest at the
rate of 7% per annum.
Additional consideration would be a license fee on all gross revenues (less
returns) earned by the Buyer's corporation and FMT derived from any sale of
the "Dehydrated Media Paddle", "Qualture", "Salmonella" (net gross revenues)
(XLT4 Media as licensed from the University of Maryland) all as described in
the Form 10-KSB for year ended December 31, 1995, as well as any modifications
of same (the "FMT technology"): 5% for the first and second years; 2 1/2% for
the third, fourth and fifth years. All such license payments will cease at
the end of the fifth year.
In addition, Joseph Hippensteel and Deanne Van Leeuwen, officers of FMT agreed
to donate back to the Company one half of their 570,000 and 380,000 stock
options (expiring March 22, 2000 at the exercise price of $2.875 per share),
respectively. Pending Shareholder approval, the Buyer is operating FMT as of
August 20, 1996 with the appropriate adjustments to be made in the event
Shareholder approval is not obtained, including reasonable actual
reimbursement (capped at $50,000) and a penalty of an additional $50,000 if
shareholder approval is not obtained. The financial results of this
transaction would result in a one time non-recurring loss of approximately
$275,000 in the third quarter.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 5
<PAGE>
STOCKHOLDER PROPOSALS FOR FISCAL 1997 ANNUAL MEETING
Any stockholder proposal intended to be presented at the Company's 1997 annual
meeting of stockholders must be received by the Company at its office in
Wayne, Pennsylvania on or before March 1, 1997 in order to be considered for
inclusion in the Company's proxy statement and form of proxy relating to such
meeting.
EXPENSES OF SOLICITATION
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by regular
employees of the Company, either personally or by telephone. The Company does
not expect to pay any compensation for the solicitation of proxies, but may
reimburse brokers and other persons holding shares in their names or in the
names of nominees for expenses in sending proxy materials to beneficial owners
and obtaining proxies from such owners.
OTHER MATTERS
A copy of the Company's Annual Report to stockholders for the fiscal year
ended December 31, 1995 is enclosed herein.
The Board of Directors does not intend to bring any matters before the meeting
other than as stated in this proxy statement, and is not aware that any other
matters will be presented for action at the meeting. If any other matters
come before the meeting, the persons named in the enclosed form of proxy will
vote the proxy with respect thereto in accordance with their best judgment,
pursuant to the discretionary authority granted by the proxy. The cost of
preparing, assembling and mailing the proxy material will be borne by the
Company.
All properly executed proxies delivered pursuant to this solicitation and not
revoked will be voted at the meeting in accordance with the directions given.
In voting by proxy in regard to the election of five Directors to serve until
the 1997 Annual Meeting of Stockholders, stockholders may vote in favor of all
nominees or withhold their votes as to all nominees or withhold their votes as
to specific nominees. With respect to other items to be voted upon,
<PAGE>
stockholders may vote in favor of the item or against the item or may abstain
from voting. Stockholders should specify their choices on the enclosed proxy.
If no specific instructions are given with respect to the matters to be acted
upon, the shares represented by the proxy will be voted FOR the election of
all directors, FOR the proposal to ratify and approval of the appointment of
independent accountants; and FOR the proposal to approve the 1996 Stock
Incentive Plan (2,000,000 shares) and approval of the appointment of
independent accountants.
Respectfully submitted,
/s/David Weitz
- -----------------------
David Weitz, Secretary
Dated: August 20, 1996
Stockholders who do not expect to be present at the meeting and who wish to
have their shares voted, are requested to make, date and sign the enclosed
proxy and return it in the enclosed envelope. No postage is required if it
is mailed in the United States.
FUTURE MEDICAL TECHNOLOGIES INTERNATIONAL, INC.
1996 STOCK INCENTIVE PLAN
1. PURPOSE.
The purpose of this Stock Incentive Plan (the "Plan") is to enable
Future Medical Technologies International, Inc. (the "Company") to
attract and retain the services of selected employees, officers,
directors and other key contributors (including consultants and
nonemployee agents) of the Company or any subsidiary of the Company.
Notwithstanding the foregoing, grants to Non-Employee Directors (as
defined in subparagraph 12.1) of options or other awards under the
Plan shall be made solely in accordance with the provisions of
paragraph 12.
2. SHARES SUBJECT TO THE PLAN.
Subject to adjustment as provided below, the shares to be offered
under the Plan shall consist of Common Stock of the Company, and the
total number of shares of Common Stock that may be issued under the
Plan shall not exceed 2,000,000 shares. The shares issued under the
Plan may be authorized and unissued shares or reacquired shares. If
an option or stock appreciation right granted under the Plan expires,
terminates or is canceled, the unissued shares subject to such option
or stock appreciation right shall again be available under the Plan.
If shares sold or awarded as a bonus under the Plan or forfeited to
the Company or repurchased by the Company, the number of shares
forfeited or repurchased shall again be available under the Plan.
3. EFFECTIVE DATE AND DURATION OF PLAN.
3.1 Effective Date. The Plan shall become effective as of September
20, 1996.
3.2 Duration. The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued and all
restrictions on such shares have lapsed. The Board of Directors may
suspend or terminate the Plan at any time except with respect to
options and shares subject to restrictions then outstanding under the
Plan. Termination shall not affect any outstanding option, any right
of the Company to repurchase shares or the forfeitability of shares
issued under the Plan.
4. ADMINISTRATION.
4.1 Board of Directors. The Plan shall be administered by the Board
of Directors of the Company, which shall determine and designate from
time to time the individuals to whom awards shall be made, the amount
of the awards and the other terms and conditions of the awards.
Subject to the provisions of the Plan, the Board of Directors may from
<PAGE>
time to time adopt and amend rules and regulations relating to
administration of the Plan, advance the lapse of any waiting period,
accelerate any exercise date, waive or modify any restriction
applicable to shares (except those restrictions imposed by law) and
make all other determinations in the judgment of the Board of
Directors necessary or desirable for the administration of the Plan.
The interpretation and construction of the provisions of the Plan and
related agreements by the Board of Directors shall be final and
conclusive. The Board of Directors may correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any
related agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect, and it shall be the sole and
final judge of such expediency.
4.2 Committee. The Board of Directors may delegate to a "stock
compensation committee" of the Board of Directors or specified
officers of the Company, or both (the "Committee"), any or all
authority for administration of the Plan. If authority is delegated
to a committee, all references to the Board of Directors in the Plan
shall mean and relate to the Committee except (i) as otherwise
provided by the Board of Directors, (ii) that only the Board of
Directors may amend or terminate the Plan as provided in paragraphs 3
and 15 and (iii) that a Committee including officers of the Company
shall not be permitted to grant options to persons who are officers of
the Company unless the officers who are to be compensated abstain from
voting.
5. TYPES OF AWARDS; ELIGIBILITY.
The Board of Directors may, from time to time, take the following
actions, separately or in combination, under the Plan: (i) grant
Incentive Stock Options, as defined in Section 422A of the Internal
Revenue Code of 1986, as amended (the "Code"), as provided in
paragraphs 6.1 and 6.2; (ii) grant options other than Incentive Stock
Options ("Non-Statutory Stock Options") as provided in paragraphs 6.1
and 6.3; (iii) award stock bonuses as provided in paragraph 7; (iv)
sell shares subject to restrictions as provided in paragraph 8; (v)
grant stock appreciation rights as provided in paragraph 9; (vi) grant
cash bonus rights as provided in paragraph 10; and (vii) grant foreign
qualified awards as provided in paragraph 11. Any such awards may be
made to employees, including employees who are officers or directors,
directors, and to nonemployees (including consultants) who the Board
of Directors believes have made or will make an important contribution
to the Company or its subsidiaries; provided, however, that only
employees of the Company, or its subsidiaries, shall be eligible to
receive Incentive Stock Options under the Plan. The Board of
Directors shall select the individuals to whom awards shall be made
and shall specify the action taken with respect to each individual to
whom an award is made. At the discretion of the Board of Directors,
an individual may be given an election to surrender an award in
exchange for the grant of a new award.<PAGE>
6. OPTION GRANTS.
6.1 General Rules Relating to Options.
(a) Terms of Grant. The Board of Directors may grant options under
the Plan. With respect to each option grant, the Board of Directors
shall determine the number of shares subject to the option, the option
price, the period of the option, the time or times at which the option
may be exercised and whether the option is an Incentive Stock Option
or a Non-Statutory Stock Option.
(b) Exercise of Options. Except as provided in paragraph 6.1(d) or
as determined by the Board of Directors, no option granted under the
Plan may be exercised unless at the time of such exercise the optionee
is employed by or in the service of the Company or any subsidiary of
the Company (except for consultants) and shall have been so employed
or provided such service continuously since the date such option was
granted. Absence on leave or on account of illness or disability
under rules established by the Board of Directors shall not, however,
be deemed an interruption of employment or service for this purpose.
Unless otherwise determined by the Board of Directors, vesting of
options shall not continue during an absence on leave (including an
extended illness) or on account of disability. Except as provided in
paragraphs 6.1(d) and 13, options granted under the Plan may be
exercised from time to time over the period stated in each option in
such amounts and at such times as shall be prescribed by the Board of
Directors, provided that options shall not be exercised for fractional
shares. Unless otherwise determined by the Board of Directors, if the
optionee does not exercise an option in any one year with respect to
the full number of shares to which the optionee is entitled in that
year, the optionee's rights shall be cumulative and the optionee may
purchase those shares in any subsequent year during the term of the
option.
(d) Exercisability. All options granted pursuant to subparagraph 6.1
shall be exercisable according to the following schedule.
<TABLE>
<CAPTION>
Period of Employee's Continuous Service Portion of Total Option
from the Date the Option is Granted Which is Exercisable
<S> <C>
Less than 12 months: 0%
After each 12 month 25% plus 25% for each 12
months successive period
of additional continuous
service, until fully vested
</TABLE>
<PAGE>
(c) Nontransferability. Each Incentive Stock Option and, unless
otherwise determined by the Board of Directors, each other option
granted under the Plan by its terms shall be nonassignable and
nontransferable by the optionee, either voluntarily or by operation
of law, except by will or by the laws of descent and distribution of
the state or country of the optionee's domicile at the time of death,
and each option by its terms shall be exercisable during the
optionee's lifetime only by the optionee.
(d) Termination of Employment or Service.
(i) General Rule. Unless otherwise determined by the Board of
Directors, in the event the employment or service of the optionee with
the Company or subsidiary terminates for any reason other than because
of physical disability or death as provided in subparagraphs
6.1(d)(ii) and (iii), the option may be exercised at any time prior to
the expiration date of the option or the expiration of 90 days after
the date of such termination, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise the
option at the date of such termination.
(ii) Termination Because of Physical Disability. Unless
otherwise determined by the Board of Directors, in the event of the
termination of employment or service because of physical disability
(as that term is defined in Section 22(e)(3) of the Code), the option
may be exercised at any time prior to the expiration date of the
option or the expiration of 12 months after the date of such
termination, whichever is the shorter period, but only if and to the
extent the optionee was entitled to exercise the option at the date of
such termination.
(iii) Termination Because of Death. Unless otherwise
determined by the Board of Directors, in the event of the death of an
optionee while employed by or providing service to the Company or a
parent or subsidiary, the option may be exercised at any time prior to
the expiration date of the option or the expiration of 12 months after
the date of such death, whichever is the shorter period, but only if
and to the extent the optionee was entitled to exercise the option at
the date of such termination and only by the person or persons to whom
such optionee's rights under the option shall pass by the optionee's
will or by the laws of descent and distribution of the state or
country of domicile at the time of death.
(iv) Amendment of Exercise Period Applicable to Termination. The
Board of Directors, at the time of grant or at any time thereafter,
may extend the 90 day and 12-month exercise periods any length of time
not later than the original expiration date of the option, and may
increase the portion of an option that is exercisable, subject to such
terms and conditions as the Board of Directors may determine.
<PAGE>
(v) Failure to Exercise Options. To the extent that the option
of any deceased optionee or of any optionee whose employment or
service terminates is not exercised within the applicable period, all
further rights to purchase shares pursuant to such option shall cease
and terminate.
(e) Purchase of Shares. Unless the Board of Directors determines
otherwise, shares may be acquired pursuant to an option granted under
the Plan only upon receipt by the Company of notice in writing from
the optionee of the optionee's intention to exercise, specifying the
number of shares as to which the optionee desires to exercise the
option and the date on which the optionee desires to complete the
transaction, and, if required in order to comply with the Securities
Act of 1933, as amended, containing a representation that it is the
optionee's present intention to acquire the shares for investment and
not with a view to distribution, and any other information the Board
of Directors may request. Unless the Board of Directors determines
otherwise, on or before the date specified for completion of the
purchase of shares pursuant to an option, the optionee must have paid
the Company the full purchase price of such shares in cash (including,
with the consent of the Board of Directors, cash that may be the
proceeds of a loan from the Company) or, with the consent of the Board
of Directors, in whole or in part, in Common Stock of the Company
valued at fair market value, restricted stock, or other contingent
awards denominated in either stock or cash, deferred compensation
credits, promissory notes and other forms of consideration. The fair
market value of Common Stock provided in payment of the purchase price
shall be determined by the Board of Directors. No shares shall be
issued until full payment therefor has been made. Each optionee who
has exercised an option shall immediately upon notification of the
amount due, it any, pay to the Company in cash amounts necessary to
satisfy any applicable federal, state and local tax withholding
requirements. If additional withholding is or becomes required beyond
any amount deposited before delivery of the certificates, the optionee
shall pay such amount to the Company on demand. If the optionee fails
to pay the amount demanded, the Company may withhold that amount from
other amounts payable by the Company to the optionee, including
salary, subject to applicable law. Upon the exercise of an option,
the number of shares reserved for issuance under the Plan shall be
reduced by the number of shares issued upon exercise of the option,
less the number of shares surrendered in payment of the option
exercise.
6.2 Incentive Stock Options. Incentive Stock Options shall be
subject to the following additional terms and conditions:
(a) Limitation on Amount of Grants. An Incentive Stock Option shall
by its terms prohibit the exercise of all options in excess of the
amount provided for in Section 422(d) of the Code. Should it be
determined that any Incentive Stock Option granted under the Plan
inadvertently exceeds such maximum, such Incentive Stock Option grant
<PAGE>
shall be deemed to be a grant of a Nonqualified Stock Option to the
extent, but only to the extent, of such excess.
(b) Limitation on Grants to 10 Percent Shareholders. An Incentive
Stock Option may be granted under the Plan to an employee possessing
more than 10 percent of the total combined voting power of all classes
of stock of the Company or of any parent or subsidiary of the Company
only if the option price is at least 110 percent of the fair market
value of the Common Stock subject to the option on the date it is
granted, as described in paragraph 6.2(d), and the option by its terms
is not exercisable after the expiration of five years from the date it
is granted.
(c) Duration of Options. Subject to paragraphs 6.1(b) and 6.2(b),
Incentive Stock Options granted under the Plan shall continue in
effect for the period fixed by the Board of Directors, except that no
Incentive Stock Option shall be exercisable after the expiration of
five years from the date it is granted.
(d) Option Price. The option price per share shall be determined by
the Board of Directors at the time of grant. Except as provided in
paragraph 6.2(b), the option price shall not be less than 100 percent
of the fair market value of the Common Stock covered by the Incentive
Stock Option at the date the option is granted. The fair market value
shall be determined by the Board of Directors.
(e) Limitation on Time of Grant. No Incentive Stock Option shall be
granted on or after the fifth anniversary of the effective date of the
Plan.
(f) Conversion of Incentive Stock Options. The Board of Directors
may at any time without the consent of the optionee convert an
Incentive Stock Option to a Non-Statutory Stock Option.
6.3 Non Statutory Stock Options. Non-Statutory Stock Options shall
be subject to the following additional terms and conditions:
(a) Options Price. The option price for Non-Statutory Stock Options
shall be determined by the Board of Directors at the time of grant.
The option price may be less than the fair market value of the shares
on the date of grant. The fair market value of shares covered by a
Non-Statutory Stock Option shall be determined by the Board of
Directors.
(b) Duration of Options. Non-Statutory Stock Options granted under
the Plan shall continue in effect for the period fixed by the Board of
Directors.
<PAGE>
7. STOCK BONUSES.
The Board of Directors may award shares under the Plan as stock
bonuses. Shares awarded as a bonus shall be subject to the terms,
conditions, and restrictions determined by the Board of Directors.
The restrictions may include restrictions concerning transferability
and forfeiture of the shares awarded, together with such other
restrictions as may be determined by the Board of Directors. The
Board of Directors may require the recipient to sign an agreement as
a condition of the award. The agreement may contain any terms,
conditions, restrictions, representations and warranties required by
the Board of Directors. The certificates representing the shares
awarded shall bear any legends required by the Board of Directors.
The Company may require any recipient of a stock bonus to pay to the
Company in cash upon demand amounts necessary to satisfy any
applicable federal, state or local tax withholding requirements. If
the recipient fails to pay the amount demanded, the Company may
withhold that amount from other amounts payable by the Company to the
recipient, including salary or fees for services, subject to
applicable law. Upon the issuance of a stock bonus, the number of
shares reserved for issuance under the Plan shall be reduced by the
number of shares issued.
8. RESTRICTED STOCK.
The Board of Directors may issue shares under the Plan for such
consideration (including promissory notes and services) as determined
by the Board of Directors, which consideration may be less than fair
market value of the Common Stock at the time of issuance. shares
issued under the Plan shall be subject to the terms, conditions and
restrictions determined by the Board of Directors. The restrictions
may include restrictions concerning transferability, repurchase by the
Company and forfeiture of the shares issued, together with such other
restrictions as may be determined by the Board of Directors. All
Common Stock issued pursuant to this paragraph 8 shall be subject to
a purchase agreement, which shall be executed by the Company and the
prospective recipient of the shares prior to the delivery of
certificates representing such shares to the recipient. The purchase
agreement may contain any terms, conditions, restrictions,
representations and warranties required by the Board of Directors.
The certificates representing the shares shall bear any legends
required by the Board of Directors. The Company may require any
purchaser of restricted stock to pay to the Company in cash upon
demand amounts necessary to satisfy any applicable federal, state or
local tax withholding requirements. If the purchaser fails to pay the
amount demanded, the Company may withhold that amount from other
accounts payable by the Company to the purchaser, including salary,
subject to applicable law. Upon the issuance of restricted stock, the
number of shares reserved for issuance under the Plan shall be reduced
by the number of shares issued.
<PAGE>
9. STOCK APPRECIATION RIGHTS.
9.1 Grant. Stock appreciation rights may be granted under the Plan
by the Board of Directors, subject to such rules, terms and conditions
as the Board of Directors prescribes.
9.2 Exercise.
(a) Each stock appreciation right shall entitle the holder, upon
exercise, to receive from the Company in exchange therefor an amount
equal in value to the excess of the fair market value on the date of
exercise of one share of Common Stock of the Company over its fair
market value on the date of grant (or, in the case of a stock
appreciation right granted in connection with an option, the excess of
the fair market value of one share of Common Stock of the Company over
the option price per share under the option to which the stock
appreciation right relates), multiplied by the number of shares
covered by the stock appreciation right or the option, or portion
thereof, that is surrendered. No stock appreciation right shall be
exercisable at a time that the amount determined under this
subparagraph is negative. Payment by the Company upon exercise of a
stock appreciation right may be made in Common Stock valued at fair
market value, in cash, or partly in Common Stock and partly in cash,
all as determined by the Board of Directors.
(b) A stock appreciation right shall be exercisable only at the time
or times established by the Board of Directors. If a stock
appreciation right is granted in connection with an option, the
following rules shall apply: (1) the stock appreciation right shall
be exercisable only to the extent and on the same conditions that the
related option could be exercised; (2) upon exercise of the stock
appreciation right, the option or portion thereof to which the stock
appreciation right relates terminates; and (3) upon exercise of the
option, the related stock appreciation right of portion thereof
terminates.
(c) The Board of Directors may withdraw any stock appreciation right
granted under the Plan at any time and may impose any conditions upon
the exercise of a stock appreciation right or adopt rules and
regulations from time to time affecting the rights of holders of stock
appreciation rights. Such rules and regulations may govern the right
to exercise stock appreciation rights granted prior to adoption or
amendment of such rules and regulations as well as stock appreciation
rights granted thereafter.
(d) For purposes of this paragraph 9, the fair market value of the
Common Stock shall be as specified by the Board of Directors.
(e) No fractional shares shall be issued upon exercise of a stock
appreciation right. In lieu thereof, cash may be paid in an amount
equal to the value of the fraction or, if the Board of Directors shall
<PAGE>
determine, the number of shares may be rounded downward to the next
whole share.
(f) Each participant who has exercised a stock appreciation right
shall, upon notification of the amount due, pay to the Company in cash
amounts necessary to satisfy any applicable federal, state and local
tax withholding requirements. If the participant fails to pay the
amount demanded, the Company may withhold that amount from other
amounts payable by the Company to the participant, including salary,
subject to applicable law. With the consent of the Board of
Directors, a participant may satisfy this obligation in whole or in
part, by having the Company withhold from any shares to be issued upon
the exercise that number of shares that would satisfy the withholding
amount due or by delivering Common Stock to the Company to satisfy the
withholding amount.
(g) Upon the exercise of a stock appreciation right for shares, the
number of shares reserved for issuance under the Plan shall be reduced
by the number of shares issued, less the number of shares surrendered
for withheld to satisfy withholding obligations. Cash payments of
stock appreciation rights shall not reduce the number of shares of
Common Stock reserved for issuance under the Plan.
10. CASH BONUS RIGHTS.
10.1 Grant. The Board of Directors may grant cash bonus rights under
the Pan in connection with (i) options granted or previously granted;
(ii) stock appreciation rights granted or previously granted; (iii)
stock bonuses awarded or previously awarded; and (iv) shares sold or
previously sold under the Plan. Cash bonus rights will be subject to
rules, terms and conditions as the Board of Directors may prescribe.
The payment of a cash bonus shall not reduce the number of shares of
Common Stock reserved for issuance under the Plan.
10.2 Cash Bonus Rights in Connection with Options. A cash bonus right
granted in connection with an option will entitle an optionee to a
cash bonus when the related option is exercised (or terminates in
connection with the exercise of a stock appreciation right related to
the option) in whole or in part. If an optionee purchases shares upon
exercise of an option, and does not exercise a related stock
appreciation right, the amount of the bonus shall be determined by
multiplying the excess of the total fair market value of the shares to
be acquired upon the exercise over the total option price for the
shares by the applicable bonus percentage. If the optionee exercises
a related stock appreciation right in connection with the termination
of an option, the amount of the bonus shall be determined by
multiplying the total fair market value of the shares and cash
received pursuant to the exercise of the stock appreciation right by
the applicable bonus percentage. The bonus percentage applicable to
a bonus right shall be determined from time to time by the Board of
Directors bus shall in no event exceed 75 percent.
<PAGE>
10.3 Cash Bonus rights in Connection with Stock Bonus. A cash bonus
right granted in connection with a stock bonus will entitle the
recipient to a cash bonus payable when the stock bonus is awarded or
restrictions if any, to which the stock is subject lapse. If bonus
stock awarded is subject to restrictions and is repurchased by the
Company or forfeited by the holder, the cash bonus right granted in
connection with the stock bonus shall terminate and may not be
exercised. The amount and timing of payment of a cash bonus shall be
determined by the Board of Directors.
10.4 Taxes. The Company shall withhold from any cash bonus paid
pursuant to paragraph 10 the amount necessary to satisfy any
applicable federal, state and local withholding requirements.
11. FOREIGN QUALIFIED GRANTS.
Awards under the Plan may be granted to such officers and employees of
the Company and its subsidiaries and such other persons described in
paragraph 1 residing in foreign jurisdictions as the Board of
Directors may determine from time to time. The Board of Directors may
adopt such supplements to the Plan as may be necessary to comply with
the applicable laws of such foreign jurisdictions and to afford
participants favorable treatment under such laws; provided, however,
that no award shall be granted under any such supplement with terms
which are more beneficial to the participants than the terms permitted
by the Plan.
12. OPTION GRANTS TO NON-EMPLOYEE DIRECTORS.
12.1 Initial Non-Discretionary Grants. Each person who is or becomes
a Non-Employee Director after September 20, 1996 shall be
automatically granted an option to purchase 10,000 shares of Common
Stock on the date he or she becomes a Non-Employee Director. A "Non-Employee
Director" is a director who is not an employee of the Company
or any of its subsidiaries and has not been an employee of the Company
or any of its subsidiaries within one year of any date as of which a
determination of eligibility is made.
12.2 Exercisability. All options granted pursuant to subparagraph
12.1 shall be exercisable according to the following schedule.
<TABLE>
<CAPTION>
Period of Non-Employee Director's Continuous
Service as a Director of the Company Portion of Total Option
from the Date the Option is Granted Which is Exercisable
<S> <C>
Less than 12 months: 0%
After 12 months of continuous service 100%
/TABLE
<PAGE>
12.3 Annual Non-Discretionary Grants to Continuing Non-Employee
Directors. Each person who is or becomes a Continuing Non-Employee
Director after September 20, 1996 shall automatically annually
receive, on the day of the Company's regular annual meeting of its
shareholders, a nondiscretionary grant of the option to purchase up to
10,000 shares of the Company's Common Stock. A "Continuing Non-Employee
Director" is a Non-Employee Director who continuously serves
as a Non-Employee Director of the Company during a period of time
which includes the date(s) upon which one or more annual shareholder
meetings of the Company are held.
12.4 Exercisability. All options granted pursuant to subparagraph
12.3 above shall be immediately exercisable after 12 months of
continuous service for the total number of shares covered by the
option (the "Option Shares"). However, no portion of the Option is
exercisable prior to 12 months of continuous service.
12.5 Exercise Price. The exercise price of any option granted
pursuant to this paragraph 12 shall be equal to the fair market value
of the Common Stock as determined in accordance with the procedure set
forth in paragraph 6.2(d).
12.6 Term of Option. The terms of each option granted pursuant to
this paragraph 12 shall be five (5) years from the date of grant.
12.7 "Complete Month". For all purposes of this paragraph 12, a
complete month shall be deemed to be the period which starts on the
day of grant and ends on the same day of the following calendar month,
so that each successive "complete month" ends on the same day of each
successive calendar month (or, in respect of any calendar month which
does not include such a day, that "complete month" shall end on the
first day of the next following calendar month).
12.8 Termination as a Director. If an optionee ceases to be a
director of the Company for any reason, including death, all options
granted pursuant to this paragraph 12 may be exercised at any time
prior to the expiration date of the option or the expiration of 60
days (or 12 months in the event of death) after the last day the
optionee served as a director, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise the
option as of the last day the optionee served as a director.
12.9 Nontransferability. Each option granted pursuant to this
paragraph 12 by its terms shall be nonassignable and nontransferable
by the optionee, either voluntarily or by operation of law, except by
will or by the laws of descent and distribution of the state or
country of the optionee's domicile at the time of death or pursuant to
a qualified domestic relations order as defined under the Code or
Title I of the Employee Retirement Income Security Act of 1974.
<PAGE>
12.10 Exercise of Options. Any options granted pursuant to this
paragraph 12 may be exercised upon payment of cash or shares of Common
Stock of the Company in accordance with paragraph 6.1(e). Unless
otherwise determined by the Board of Directors, if an option is
exercised within six months of the date of grant, the shares acquired
upon such exercise may not be sole until six months after the date of
grant.
13. CHANGES IN CAPITAL STRUCTURE.
If the outstanding Common Stock of the Company is hereafter increased
or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another
corporation by reason of any recapitalization, reclassification, stock
split, combination of shares or dividend payable in shares,
appropriate adjustment shall be made by the Board of Directors in the
number and kind of shares available for awards under the Plan. In
addition, the Board of Directors shall make appropriate adjustment in
the number and kind of shares as to which outstanding options and
stock appreciation rights, or portions thereof then unexercised, shall
be exercisable, so that the optionee's proportionate interest before
and after the occurrence of the event is maintained. The Board of
Directors may also require that any securities issued in respect of or
exchanged for shares issued hereunder that are subject to restrictions
be subject to similar restrictions. Notwithstanding the foregoing,
the Board of Directors shall have no obligation to effect any
adjustment that would or might result in the issuance or fractional
shares, and any fractional shares resulting from any adjustment may be
disregarded or provided for in any manner determined by the Board of
Directors. Any such adjustments made by the Board of Directors shall
be conclusive.
14. EFFECT OF LIQUIDATION OR REORGANIZATION.
14.1 Cash, Stock or Other Property for Stock. Except as provided in
paragraph 14.2, upon a merger, consolidation, acquisition of property
or stock, reorganization or liquidation of the Company, as a result of
which the stockholders of the Company receive cash, stock or other
property in exchange for or in connection with their shares of Common
Stock, any option granted hereunder shall terminate, but the optionee
shall have the right during a 30-day period immediately prior to any
such merger, consolidation, acquisition of property or stock,
reorganization or liquidation to exercise his or her option in whole
or in part whether or not the vesting requirements applicable to the
option have been satisfied at the discretion of the Board of
Directors.
14.2 Conversion of Options on Stock for Stock Exchange. If the
stockholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common
Stock in any transaction involving a merger, consolidation,
<PAGE>
acquisition of property or stock, separation or reorganization, all
options granted hereunder shall be converted into options to purchase
shares of Exchange Stock unless the Board of Directors, in its sole
discretion, determines that any or all such options granted hereunder
shall not be converted into options to purchase shares of Exchange
Stock but instead shall terminate in accordance with the provisions of
paragraph 14.1. The amount and price of converted options shall be
determined by adjusting the amount and price of the options granted
hereunder in the same proportion as used for determining the number of
shares of Exchange Stock the holders of the Common Stock receive in
such merger, consolidation, acquisition of property or stock,
separation or reorganization.
15. CORPORATE MERGERS, ACQUISITIONS, ETC.
The Board of Directors may also grant options, stock appreciation
rights, stock bonuses and cash bonuses and issue restricted stock
under the Plan having terms, conditions and provisions that vary from
those specified in this Plan, provided that any such awards are
granted in substitution for, or in connection with the assumption of,
existing options, stock appreciation rights, stock bonuses, cash
bonuses and restricted stock granted, awarded or issued by another
corporation and assumed or otherwise agreed to be provided for by the
Company pursuant to or by reason of a transaction involving a
corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation to which the Company or a
subsidiary is a party.
16. AMENDMENT OF PLAN.
The Board of Directors may at any time, and from time to time, modify
or amend the Plan in such respect as it shall deem advisable because
of changes in the law while the Plan is in effect or for any other
reason. Except as provided in paragraphs 6.1(d), 13 and 14, however,
no change in an award already granted shall be made without the
written consent of the holders of such award.
17. APPROVALS.
The obligations of the Company under the Plan are subject to the
approval of state and federal authorities or agencies with
jurisdiction in the matter. The Company shall not be obligated to
issue or deliver Common Stock under the Plan if such issuance or
delivery would violate applicable state or federal securities laws.
18. EMPLOYMENT AND SERVICE RIGHTS.
Nothing in the Plan or any award pursuant to the Plan shall: (a)
confer upon any employee any right to be continued in the employment
of the Company or any subsidiary or interfere in any way with the
right of the Company or any subsidiary by whom such employee is
<PAGE>
employed to terminate such employee's employment at any time, for any
reason, with or without cause, or to decrease such employee's
compensation or benefits, or (b) confer upon any person engaged by the
Company any right to be retained or employed by the company or to the
continuation, extension, renewal, or modification of any compensation,
contract, or arrangement with or by the Company.
19. RIGHTS AS A SHAREHOLDER.
The recipient of any award under the Plan shall have no rights as a
shareholder with respect to any Common Stock until the date of issue
to the recipient of a stock certificate for such shares. Except as
otherwise expressly provided in the plan, no adjustment shall be made
for dividends or other rights for which the record date occurs prior
to the date such stock certificate is issued.
<TABLE>
<S> <C>
Date adopted by Board July 23, 1996
Date Approved by Stockholders September 20, 1996
Date Last Amended by the Shareholders N/A
</TABLE>
FMTI\STOCKPLN.96
