<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Fuisz Technologies Ltd.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[FUISZ TECHNOLOGIES LTD. LOGO]
April 9, 1998
To Our Stockholders:
You are cordially invited to attend the Company's 1998 Annual Meeting to be
held on Thursday, May 21, 1998 at the Washington Dulles Airport Hilton, 13869
Park Center Road, Herndon, Virginia 22071, at 10:00 a.m.
The Notice of Annual Meeting of Stockholders and Proxy Statement
accompanying this letter describe the business to be dealt with at the meeting.
At the conclusion of the formal part of the meeting, we will present a brief
report on the Company's operations and respond to your questions.
Whether or not you plan to attend the meeting, your vote is very important.
Please take a moment to fill in, sign, date and promptly return the enclosed
proxy card in the enclosed envelope.
We look forward to seeing you on May 21, 1998.
Sincerely,
/s/ KENNETH W. MCVEY /s/ RICHARD C. FUISZ, M.D.
Kenneth W. McVey Richard C. Fuisz, M.D.
President and Chief Executive Officer Chairman of the Board
of Directors
<PAGE> 3
[FUISZ TECHNOLOGIES LTD. LOGO]
14555 AVION AT LAKESIDE
CHANTILLY, VIRGINIA 20151
PHONE: (703) 995-2400
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1998
------------------------
To the Stockholders of
Fuisz Technologies Ltd.
Notice is hereby given that the Annual Meeting of Stockholders of Fuisz
Technologies Ltd. (the "Company") will be held at the Washington Dulles Airport
Hilton, 13869 Park Center Road, Herndon, Virginia 22071, at 10:00 a.m., local
time, on May 21, 1998 for the following purposes:
1. To elect three directors of the Company to serve as Class III
Directors and one director of the Company to serve as a Class II Director,
until the annual meetings to be held in 2001 and 2000, respectively, and
until their successors have been duly elected and qualified;
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent
public accountants for the Company for the fiscal year ending December 31,
1998; and
3. To transact such other business as may properly come before the
meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on April 2, 1998, as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment thereof. A list of stockholders
of the Company as of the close of business on April 2, 1998, will be available
for inspection during normal business hours from May 11, 1998 through May 20,
1998, at the Company's executive offices at the address set forth above in
Chantilly, Virginia.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON, IT IS REQUESTED THAT YOU
PROMPTLY FILL IN, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD. IF YOU LATER
DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS EXERCISED.
By order of the Board of Directors
Richard C. Fuisz, M.D.
Chairman of the Board of Directors and
Secretary
April 9, 1998
<PAGE> 4
[FUISZ TECHNOLOGIES LTD. LOGO]
14555 AVION AT LAKESIDE
CHANTILLY, VIRGINIA 20151
PHONE: (703) 995-2400
-------------------------
PROXY STATEMENT
-------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Fuisz Technologies Ltd. (the "Company") for
use at the annual meeting of stockholders to be held at 10:00 a.m., local time,
on May 21, 1998, at the Washington Dulles Airport Hilton, 13869 Park Center
Road, Herndon, Virginia 22071, and at any adjournment thereof (the "Meeting").
Written communications to the Company should be sent to the Company's
offices at 14555 Avion at Lakeside, Chantilly, Virginia 20151. The Company can
be reached by telephone at (703) 995-2400. This Proxy Statement and a proxy
card, together with a copy of the Company's 1997 Annual Report, are first being
mailed on or about April 9, 1998, to persons who were holders of record of the
Company's common stock, par value $0.01 per share (the "Common Stock"), at the
close of business on April 2, 1998 (the "Record Date").
MATTERS TO BE CONSIDERED AT THE MEETING
At the Meeting, the holders of shares of Common Stock as of the Record Date
will be asked to consider and vote upon the two proposals described in this
Proxy Statement and on any other matter properly brought before the Meeting.
With respect to any matter to come before the Meeting, holders of record of
Common Stock will be entitled to one vote for each share of Common Stock held.
The following is a brief summary of the two proposals. The summary is not
intended to be a complete statement of all material features of the proposals
and is qualified in its entirety by the more detailed information contained
elsewhere in this Proxy Statement.
Proposal I
Proposal I concerns the election to the Board of Directors of three Class
III directors and one Class II director, each of whom are currently serving as
members of the Board of Directors.
Proposal II
Proposal II concerns ratification of the appointment of Coopers & Lybrand
L.L.P. as the Company's independent public accountants.
VOTING AT THE MEETING
The Board of Directors has fixed April 2, 1998 as the Record Date for the
Meeting, and only holders of record of the Common Stock at the close of business
on the Record Date are entitled to notice of, and to vote at, the Meeting. On
the Record Date, there were outstanding and entitled to vote approximately
22,256,462 shares of the Common Stock.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of the Common Stock is necessary to constitute a quorum at
the Meeting. The election of the Board of Directors requires the affirmative
vote of a plurality of the shares of the Common Stock present and voting at the
Meeting.
<PAGE> 5
"Plurality" means that the individuals who receive the largest number of votes
cast "for" directors of a given class are elected as directors up to the maximum
number of directors for each such class to be chosen at the Meeting.
Ratification of the appointment of the Company's independent public
accountants and approval of any other business properly brought before the
Meeting shall be decided by the affirmative vote of the holders of a majority of
the shares of Common Stock present, in person or represented by proxy, at the
Meeting and entitled to vote thereon, unless a higher vote is required for any
such other matter under applicable state law or the Company's Fourth Amended and
Restated Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), or the Amended and Restated Bylaws (the "By-laws").
In accordance with Delaware law, abstentions and shares held of record by a
broker or its nominee ("Broker Shares") that are voted on any particular matter
are included for purposes of determining the number of votes present on such
matter. Broker Shares that are not voted on any particular matter at the Meeting
will not be treated as present for such matter.
PROXIES
If the enclosed proxy is properly executed and returned in time for the
Meeting, the shares of stock represented thereby will be voted in accordance
with the instructions given thereon. If no instructions are given, such shares
will be voted "FOR" each nominee as director and "FOR" ratification of the
appointment of Coopers & Lybrand L.L.P. as the Company's independent public
accountants. Proxies will extend to, and be voted at, any adjournment of the
Meeting.
The Board of Directors does not intend to bring before the Meeting any
business other than as set forth in this Proxy Statement and has not been
informed that any other business is to be presented at the Meeting. However,
should any other matter properly come before the Meeting, it is the intention of
the persons named as proxies in the accompanying proxy or their duly authorized
and constituted substitutes to vote or act thereon in accordance with their best
judgment.
Any stockholder who has executed and returned a proxy and who for any
reason desires to revoke such proxy may do so at any time before the proxy is
exercised (i) by giving written notice prior to the Meeting, to the Secretary of
the Company at the above address, (ii) by voting the shares represented by such
proxy in person at the Meeting, or (iii) by giving a later dated proxy at any
time before the voting. Attendance at the Meeting will not, by itself, revoke a
proxy.
EXPENSES OF SOLICITATION
The costs of the solicitation of proxies will be borne by the Company. Such
costs include preparation, printing and mailing of the Notice of Annual Meeting
of Stockholders, this Proxy Statement, the enclosed proxy and the Company's 1997
Annual Report, and the reimbursement of brokerage firms and others for
reasonable expenses incurred by them in connection with the forwarding of proxy
solicitation materials to beneficial owners. The solicitation of proxies will be
conducted primarily by mail, but may include telephone, facsimile or oral
communications by directors, officers, or regular employees of the Company
acting without special compensation.
2
<PAGE> 6
PROPOSAL I
ELECTION OF DIRECTORS
INTRODUCTION
The Certificate of Incorporation of the Company provides that the Board of
Directors shall be divided into three classes, Class I, Class II and Class III,
as nearly equal in number as possible. The terms in office of the Directors of
each of these classes expire at the annual meeting in the year indicated
therein, in each case when their respective successors are elected and
qualified. At each subsequent annual election, Directors chosen to succeed those
whose terms are expiring will be identified as being part of that same class and
will be elected for a three year term. The terms of Directors appointed to fill
vacancies created by an increase in the number of Directors expire at the first
annual meeting following their appointment.
The Board of Directors has nominated Donald E. O'Neill, Louis Lauer and
Kenneth W. McVey for reelection as members of Class III, with a term to expire
on the date of the 2001 Annual Meeting. Mr. Lauer was appointed to the Board in
December 1997 to fill a vacancy created by the resignation of John Pappajohn.
The Board has also nominated Daniel Tierney to stand for reelection as a member
of Class II, with a term to expire on the date of the 2000 Annual Meeting. Mr.
Tierney was appointed to the Board of Directors in September 1997 in connection
with the Company's acquisition of Clonmel Healthcare Limited. All of the
nominees are currently serving on the Board of Directors and have agreed to
serve if elected. The persons named in the accompanying form of proxy intend to
vote at the Meeting (unless directed not to so vote) for the reelection of each
of the four nominees unless any nominee should become unavailable for election
at the time of the Meeting, in which case such persons may in their discretion
vote for a substitute nominee or the Board of Directors may choose to reduce the
number of directors. The Board of Directors has no reason to believe that any
nominee will be unavailable.
The following table sets forth each nominee's and continuing director's
name, age as of March 31, 1998, position and the year in which such nominee
first became a director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
NOMINEES NAMED BELOW.
NOMINEES:
NOMINEES FOR ELECTION AS DIRECTORS WHOSE TERMS EXPIRE IN 2001 (CLASS III)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- --------
<S> <C> <C> <C>
Louis Lauer(2).............................. 68 Director 1997
Kenneth W. McVey............................ 58 President and Chief Executive Officer 1996
of the Company; Director
Donald E. O'Neill(2)........................ 72 Director 1991
</TABLE>
NOMINEES FOR ELECTION AS DIRECTORS WHOSE TERMS EXPIRE IN 2000 (CLASS II)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- --------
<S> <C> <C> <C>
Daniel Tierney(1)........................... 61 Director 1997
</TABLE>
CONTINUING DIRECTORS:
DIRECTORS WHOSE TERMS EXPIRE IN 1999 (CLASS I)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- --------
<S> <C> <C> <C>
Richard C. Fuisz............................ 58 Chairman of the Board of Directors 1989
Antone J. Lazos(1)(2)....................... 55 Director 1991
</TABLE>
3
<PAGE> 7
DIRECTORS WHOSE TERMS EXPIRE IN 2000 (CLASS II)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- --------
<S> <C> <C> <C>
John R. Fuisz............................... 30 Director 1992
Fredrik C. Schreuder(1)..................... 61 Director 1994
</TABLE>
- ---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
BACKGROUND OF NOMINEES AND CONTINUING DIRECTORS
Richard C. Fuisz, M.D., founder of the Company, has served as the Chairman
of the Board since 1989. From 1975 until 1982, Dr. Fuisz was President and Chief
Executive Officer of Medcom, a publicly traded medical training company, which
was subsequently acquired by Baxter Healthcare Corporation. Inventor of the
Company's core technology, Dr. Fuisz founded the Company in June 1988. Dr. Fuisz
received his B.S. and M.D. from Georgetown University.
Kenneth W. McVey joined the Company in December 1996 as a director and as
President and Chief Executive Officer of Fuisz International Holdings Limited, a
wholly-owned subsidiary of the Company. In April 1997, Mr. McVey was also
appointed as President and Chief Executive Officer of the Company. Mr. McVey has
spent more than thirty years in the pharmaceutical industry. Prior to joining
the Company, Mr. McVey served as President of Elan Pharma International, a
division of Elan Corporation PLC ("Elan") and as Executive Vice President of
Elan responsible for commercial and business development, licensing and
intellectual property. He served on the Board of Directors of Elan from 1992
until 1996.
John R. Fuisz has served as a director of the Company since 1992. Mr. Fuisz
is an attorney specializing in intellectual property litigation at the
Washington, D.C. law firm of Dickstein, Shapiro, Morin & Oshinsky L.L.P., with
which he has been associated since August 1996. Prior to that, Mr. Fuisz served
as an attorney with the Washington, D.C. law firm of Nikaido, Marmelstein,
Murray and Oram L.L.P., with which he was associated since 1992.
Louis Lauer joined the Board of Directors in December 1997. Mr. Lauer
served as outside counsel to the Company from its formation in 1988 until 1991.
Since 1997, Mr. Lauer has been of counsel to the New York law firm of Menaker &
Herrmann, L.L.P., representing clients in a wide range of corporate, real estate
and litigation matters. Prior to that, he was of counsel to Layton, Brooks and
Hecht and Stultz & Balber, from 1994 into 1997 and from 1989 through 1993,
respectively. Mr. Lauer has served as Law Secretary to Judge Harold R. Medina of
the U.S. Court of Appeals for the Second Circuit and as Chief Counsel to the New
York State Commission on the Constitutional Convention. He received his B.A.
from New York University and his LL.B. from Columbia University, where he was a
Stone Scholar. Mr. Lauer has been a member of the New York bar since 1953.
Antone J. Lazos has served as a director of the Company since 1991. In
August 1995, Mr. Lazos founded and since that time has served as Chief Executive
Officer of StorCOMM, Inc., a clinical image management company. From 1981 to
1994, Mr. Lazos was Chairman and Chief Executive Officer of Medical Imaging
Centers of America, Inc., a diagnostic imaging company. From 1994 to 1995, Mr.
Lazos was President of Greenbriar Consulting.
Donald E. O'Neill has served as a director of the Company since 1991. Mr.
O'Neill was a director, Vice President and Chairman of International Operations
of Warner Lambert Company between 1986 and 1991. Mr. O'Neill serves as a
director of Cytogen Corporation, Fujisawa USA, Targeted Genetics, Alliance
Pharmaceutical Corporation and Immunogen.
4
<PAGE> 8
Fredrik C. Schreuder has served as a director of the Company since August
1994. Since 1989, Mr. Schreuder has been President of Medical Venture Management
A/S, a consulting venture capital firm. From 1983 to 1989, Mr. Schreuder served
as an Executive Vice President of Hafslund Nycomed, a medical imaging company.
Daniel Tierney joined the Board of Directors in September 1997. Mr. Tierney
is Chairman and Chief Executive Officer of The Cross Group and is also Chairman
of Britannia Pharmaceuticals Ltd. U.K. He is a member of the Board of the
University of Limerick Foundation, based in Limerick, Ireland, and a Director of
the Industry Research and Development Group and ICC Corporate Finance Ltd., both
based in Dublin, Ireland. He was appointed by the Irish Government as Chair of
the Science, Technology and Innovation Advisory Council which reported in 1995
and was Irish representative on the board of the Industry Research and
Development Advisory Council of the European Commission from 1992 to 1995. He is
also currently Chair of the National Standards Authority of Ireland. During such
time as The Cross Group holds at least 400,000 of the share of Common Stock
acquired from the Company's acquisition of Clonmel Healthcare Limited, the
Company has agreed to use its best efforts to cause Mr. Tierney to be elected to
the Board of Directors of the Company.
John R. Fuisz is the son of Richard C. Fuisz. There are no other family
relationships among any of the directors or executive officers of the Company.
COMMITTEES AND BOARD MEETINGS
During 1997, there were eight meetings of the Board of Directors. Each
incumbent director attended 75% or more of the aggregate of the meetings of the
Board and of the Board committees on which he served during the period of his
directorship, except Fredrik Schreuder due to a medical leave of absence.
The Board has two standing committees, an Audit Committee and a
Compensation Committee. Their functions are described below.
Audit Committee. The Audit Committee meets with management and the
Company's independent accountants to consider the adequacy of the Company's
internal controls and financial reporting. The Audit Committee recommends to the
Board the Company's independent accountants; discusses with the independent
accountants their audit procedures, including the proposed scope and timing of
the audit, the audit results and accompanying management letters; reviews the
auditor's fees and services; and in general endeavors to ensure the independence
of the auditors and accountants. The Audit Committee met once during 1997. The
current members of the Audit Committee are Messrs. Lazos, Tierney and Schreuder,
who serves as chairman.
Compensation Committee. The Compensation Committee reviews and approves
the direct and indirect compensation and employee benefits of the executive
officers of the Company, particularly the Chief Executive Officer; administers
the Company's stock option and incentive compensation plans; and reviews in
general the Company's policies relating to the compensation of senior management
and other employees. The Compensation Committee held one meeting during 1997.
The current members of the Compensation Committee are Messrs. Lauer, Lazos and
O'Neill.
DIRECTORS' COMPENSATION
Directors who are employees of the Company do not receive any compensation
for their service as directors. The Company reimburses each director who is not
an employee of the Company for his out-of-pocket expenses for attending meetings
of the Board of Directors.
In May 1994, the Board adopted and the stockholders of the Company approved
the 1994 Director Stock Option Plan (the "Director Option Plan") and the Board
provided that no additional options would be granted under the Company's 1991
Stock Option Plan (the "1991 Stock Option Plan"). The Director Option Plan
provides that each new non-employee director first elected thereafter will
receive a non-statutory option to purchase 30,000 shares of Common Stock upon
his or her initial election. In addition, each non-employee director will
receive a non-statutory option to purchase 3,000 shares of Common Stock under
the Director Option Plan on the fifth business day following the end of each
fiscal year, provided that he or she remains as
5
<PAGE> 9
an eligible director on the date of grant. All options granted to directors
under the Director Option Plan are fully vested when granted, have an exercise
price equal to the fair market value of the Common Stock on the date of grant
and expire ten years after the date of grant or 90 days after the optionee
ceases to serve as a director. Pursuant to the terms of the Director Option
Plan, five non-employee directors each received an option to purchase 3,000
shares of Common Stock at an exercise price of $7.625 per share in January 1997.
In addition, during 1997, upon their election to the Board, Mr. Tierney and Mr.
Lauer each received an option to purchase 30,000 shares of Common Stock at an
exercise price of $11.625 and $8.375, respectively.
On April 8, 1997, Mr. John Pappajohn, who resigned from the Board of
Directors in November 1997, was granted an option to purchase 25,000 shares of
common stock of the Company at an exercise price of $7.25 per share (the market
price of the Common Stock on the date of grant) in connection with financing
services provided by Mr. Pappajohn to the Company. The options have a term of
ten years.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation of
the Chief Executive Officer and the four other most highly compensated executive
officers of the Company serving as executive officers at the end of calendar
year 1997 (the "Named Executive Officers") whose total compensation during that
year exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION
--------------------------- ---- -------- ---------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Fuisz, M.D.(2)............ 1997 $404,167 $ 340,000 -- 275,000(3) $ --
Chairman of the Board 1996 358,333 225,000 -- 150,000 --
1995 254,168 225,000 -- 90,000 --
Kenneth W. McVey(2)(4)............... 1997 404,167 340,000 -- 275,000 2,671(6)
President and Chief Executive 1996 -- 3,000,000(5) -- -- --
Officer
Patrick D. Scrivens.................. 1997 272,500 120,000 -- 75,000(3) --
Executive Vice President and 1996 247,196 150,000 -- 50,000 --
Chief Financial Officer 1995 184,167 150,000 -- 90,000 --
Adrian M. Gerber(9).................. 1997 270,000 30,000 -- -- --
Executive Vice President, 1996 233,307 198,141(7) -- -- --
Business Development and Licensing 1995 -- -- -- 225,000 --
Michael Myers........................ 1997 212,500 82,876(8) -- 112,500(3) --
Executive Vice President, 1996 181,667 47,208(8) -- 87,500 --
Pharmaceutical Operations 1995 12,222 12,747(8) -- 37,500 --
</TABLE>
- ---------------
(1) Pursuant to regulations of the Securities and Exchange Commission,
perquisites not exceeding the lesser of $50,000 or 10% of an executive's
combined salary and bonus are not required to be reported.
(2) Dr. Fuisz served as Chief Executive Officer and President of the Company
until April 17, 1997, when Mr. McVey was named to those positions.
(3) Includes replacement options granted to the following Executive Officers to
effect a repricing of previously granted options, the exercise price of
which was in excess of the market price of the Common Stock: Dr.
Fuisz--150,000; Mr. Scrivens -- 50,000; Mr. Myers -- 87,500.
(4) Mr. McVey joined the Company in 1996. No information has been provided for
prior years.
(5) In recognition of the forfeiture by Mr. McVey of common stock ownership
rights provided by his previous employer, Mr. McVey received restricted
stock of the Company, having a market value on the date of grant equal to
$3.0 million. All of the shares vested on December 31, 1996 and are subject
to a contractual restriction on transfer through January 1, 1998. Beginning
January 1, 1998, Mr. McVey may transfer one third of the shares, with the
transfer restrictions on each remaining third expiring each January 1, so
that all restrictions expire on January 1, 2000. In the event of a "change
of control" of the Company (as defined in the employment agreement), all
transfer restrictions shall terminate. All transfers by Mr. McVey are
subject to a right of first refusal to the Company.
(6) Represents premiums for a split dollar life insurance policy on behalf of
Mr. McVey. Includes $1,300 representing the value for an interest-free loan
on the non-term life insurance portion of the policy, based on an assumed
interest rate of 10% and a term of 7 years. In addition, in connection with
the Company's assumption of the policy from Mr. McVey's former employer, the
Company reimbursed the former employer for past premiums including premiums
paid in 1996.
(7) Includes $148,141 in relocation expenses and payments in amounts estimated
to cover the income tax liability to the executive in connection with such
payments.
(8) Includes $7,876, $17,208 and $12,039 in relocation expenses and payments in
amounts estimated to cover the income tax liability to the executive in
connection with such payments in 1997, 1996 and 1995, respectively.
(9) Mr. Gerber resigned as Executive Vice President, Business Development and
Licensing on December 31, 1997.
7
<PAGE> 11
The following table sets forth information regarding stock options granted
during 1997 by the Company to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------- POTENTIAL REALIZED
NUMBER OF % OF TOTAL VALUE AT ASSUMED ANNUAL
SECURITIES OPTIONS MARKET RATES OF STOCK PRICE
UNDERLYING GRANTED TO PRICE ON APPRECIATION(2)
OPTIONS EMPLOYEES IN EXERCISE DATE OF EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR(1) PRICE GRANT DATE 5% 10%
---- ---------- -------------- -------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard C. Fuisz, M.D... 50,000 5.2% $7.25 $7.25 4/8/07 $227,974 $ 577,732
75,000 7.8% 9.30 9.30 11/20/07 438,508 1,111,265
150,000(3) * 7.25 7.25 4/29/06 683,923 1,733,195
Kenneth W. McVey........ 200,000 20.9% 7.25 7.25 4/8/07 911,897 2,310,927
75,000 7.8% 9.30 9.30 11/20/07 438,508 1,111,265
Patrick D. Scrivens..... 25,000 2.6% 9.30 9.30 11/20/07 146,169 370,422
50,000(3) * 7.25 7.25 4/29/06 227,974 577,732
Adrian M. Gerber........ -- -- -- -- -- -- --
Michael Myers........... 25,000 2.6% 9.30 9.30 11/20/07 146,169 370,422
37,500(3) * 7.25 7.25 2/1/06 170,981 433,299
50,000(3) * 7.25 7.25 4/29/06 227,974 577,732
</TABLE>
- ---------------
* See footnote 3.
(1) Percentages shown do not include replacement options granted to effect
repricing of previously granted options (see footnote 3).
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. This table does not take into account any
appreciation in the price of the Common Stock to date.
(3) Consists of replacement options granted to effect repricing of previously
granted options, the exercise price of which was in excess of the market
price of the Common Stock. See Ten Year Option Repricings.
The following table sets forth certain information regarding the exercise
of options during the year ended December 31, 1997, and the number and value of
unexercised options held at December 31, 1997 by the Named Executive Officers.
AGGREGATE OPTION EXERCISES IN 1997 AND OPTION VALUES AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FY-END AT FY-END(2)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Fuisz, M.D. ....... -- -- 315,000 155,000 $736,904 $ 77,500
Kenneth W. McVey.............. -- -- -- 275,000 -- 250,000
Patrick D. Scrivens........... 100,000 $507,170 270,000 55,000 883,972 15,000
Adrian M. Gerber.............. -- -- 174,999 50,001 87,500 25,000
Michael Myers................. -- -- 87,500 62,500 90,625 37,500
</TABLE>
- ---------------
(1) Based on difference between option exercise price and market price of Common
Stock on date of exercise.
(2) Based upon a market value of the Common Stock of $8.50 per share as of
December 31, 1997.
8
<PAGE> 12
The following table sets forth information regarding the repricing of
options held by all executive officers since the Company's inception. See
"Compensation Committee Report on Executive Compensation -- 1997 Option
Repricing."
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
OPTION
NUMBER OF MARKET TERM
SECURITIES PRICE OF EXERCISE REMAINING
UNDERLYING STOCK AT PRICE AT NEW AT DATE OF
OPTIONS TIME OF TIME OF EXERCISE REPRICING
NAME DATE REPRICED REPRICING REPRICING PRICE (YEARS)
---- ------- ---------- --------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Fuisz, M.D................ 4/8/97 150,000 $ 7.25 $25.00 $ 7.25 9.0
(Chairman of the Board)
Patrick D. Scrivens.................. 4/8/97 50,000 $ 7.25 $25.00 $ 7.25 9.0
(Executive Vice President and
Chief Financial Officer)
Michael Myers........................ 4/8/97 37,500 $ 7.25 $15.17 $ 7.25 8.8
(Executive Vice President, 4/8/97 50,000 $ 7.25 $25.00 $ 7.25 9.0
Pharmaceutical Operations)
James L. Wilcox...................... 7/15/96 15,000 $10.38 $15.17 $10.38 8.5
(Vice President, General
Counsel)
</TABLE>
Employment Agreements
The Company has entered into employment agreements with each of the named
executive officers other than Dr. Fuisz. Generally the employment agreements
establish an initial base salary and, in some cases, a guaranteed annual bonus.
Each agreement is conditioned upon the execution of a confidentiality agreement
by the employee, and provides for relocation costs, participation in the
Company's medical and life insurance plans, an automobile allowance and a stock
option award to purchase shares of the Company's common stock.
Mr. McVey was initially employed by the Company as President and Chief
Executive Officer of Fuisz International Holdings, Ltd., a wholly-owned
subsidiary of the Company, for an initial period of three years, beginning on
December 31, 1996. On April 17, 1997, Mr. McVey was additionally named Chief
Executive Officer and President of the Company. Mr. McVey's employment agreement
provides for an initial base salary subject to an annual increase at least equal
to the annualized inflation rate of the United Kingdom. Mr. McVey is also
entitled to an annual performance bonus of at least $190,000, which may be
increased at the discretion of the Compensation Committee of the Board of
Directors. Mr. McVey is entitled to participate in the Company's Stock Option
Plan. All options awarded thereunder vest no later than upon the expiration of
the employment agreement, including any renewals thereof. The Company is
required to provide medical and insurance coverage to Mr. McVey and his family
throughout the term of his employment and to provide pension benefits no less
favorable than those provided by his former employer. The Company, through one
of its wholly-owned subsidiaries, has agreed to receive Mr. McVey's services
through a management company incorporated in Bermuda. Payments are made to the
management company in lieu of salary being paid to Mr. McVey.
The Company's employment agreement with Mr. Scrivens provided for an
initial employment term of three years beginning on October 19, 1994 (the
initial employment term has since been extended through October 19, 2000). Mr.
Scrivens may terminate his employment agreement at any time upon thirty days
written notice. The employment agreement provides that if the Company terminates
the employment of Mr. Scrivens without "cause" (as defined in the employment
agreement) or Mr. Scrivens terminates his employment for "good reason" following
a "change in control" of the Company (each as defined), he is entitled to
receive monthly severance payments in an amount equal to his monthly base
salary, plus one-twelfth of his highest annual bonus during the preceding five
years, through the remaining term of his
9
<PAGE> 13
employment agreement or, if longer, twelve months following termination. In
addition, under these circumstances all stock options will vest and the period
for their exercise will be extended through the original term of the option, and
all insurance benefits will continue to be provided for twelve months following
termination. The employment agreement contains provisions regarding the
protection of confidential information and assignment of inventions to the
Company and a covenant not to compete during the employment period and one year
thereafter.
In connection with Mr. Gerber's resignation from the Company on December
31, 1997, the Company entered into a Consulting Agreement pursuant to which Mr.
Gerber will receive $150,000 in consulting fees for certain services to be
provided through June 30, 1998. In addition, Mr. Gerber shall be entitled to
continuation of medical benefits and an automobile allowance through June 30,
1998.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The compensation of the Company's executive officers is reviewed and
approved annually by the Compensation Committee (the "Committee"). The Committee
is currently composed of three non-employee directors, although one of the
current members of the Committee became a member in December 1997 and did not
participate in any of the deliberations of the Committee during 1997. In
addition to reviewing and approving executive officers' salary and bonus
arrangements, the Committee administers the awards of stock options pursuant to
the Company's stock option and incentive plans.
COMPENSATION POLICIES APPLICABLE TO EXECUTIVE OFFICERS FOR 1997
The objectives of the Company's executive compensation program are to (i)
attract, motivate, and retain key executives responsible for the success of the
Company, (ii) reward key executives based on corporate and individual
performance, and (iii) provide incentives designed to increase shareholder
value. The three primary components of the executive officer compensation
program are base salaries, annual cash bonuses, and equity awards in the form of
stock options.
BASE SALARY
The base salary of each of the Company's executive officers is generally
established pursuant to an employment agreement that is approved by the
Committee. Base salaries of executive officers other than the Chief Executive
Officer (the "CEO") are reviewed annually by the Committee after considering
salary recommendations prepared by the CEO and other executive officers.
Recommendations for 1997 executive officer salary adjustments were based
primarily on a subjective evaluation of past and potential future individual
performance and contributions and alternative opportunities that might be
available to the executives in question. The Committee considered compensation
information from companies employing executives in positions similar to the
Company's executive officers as well as market conditions for executives in
general with similar skills, background and performance levels.
EXECUTIVE BONUS PLAN
Each executive other than the CEO is entitled to receive an annual bonus
which is determined by the Committee after considering recommendations prepared
by the CEO. In preparing the recommendations, the CEO subjectively considers,
among other things, such executives' leadership and teamwork skills, as well as
relationships with the Company's current and prospective customers.
STOCK OPTIONS
Options to purchase the Company's common stock are a key component of the
Company's executive compensation program. The Committee views the grant of stock
options as a valuable incentive that serves to align the interests of executive
officers with the Company's goal of enhancing stockholder value. Options will
only have value to an executive officer if the stock price increases over the
exercise price. The Committee reviews and acts upon recommendations by the CEO
with regard to the grant of stock options to executive
10
<PAGE> 14
officers other than himself. In determining the size and other terms of 1997
option grants to the executive officers, the Committee considered a number of
factors, including such officer's position, responsibilities and previous stock
option grants (if any). Options typically vest in equal installments over three
to five years and, therefore, encourage an officer to remain in the employ of
the Company.
1997 OPTION REPRICING
During 1997, the Committee authorized the exchange of 287,500 executive
officer employee stock options originally granted under the 1994 Stock Incentive
Plan to three of the persons named in the Summary Compensation Table (the "Named
Executive Officers") during 1996 at exercise prices ranging from $15.17 to
$25.00 for an equal number of stock options having an exercise price of $7.25,
the fair market value of the Company's common stock on the date of exchange. The
Committee approved this exchange because it determined that these options did
not provide a meaningful incentive to those Named Executive Officers and were
not effective in aligning their interests with those of the Company's
shareholders. The Committee and management recognize the contributions the
employees make to the success of the Company, and believe that this justifies
repricing these options to reflect market conditions and the reliance by the
Company on compensating its employees with non-cash compensation.
CHIEF EXECUTIVE OFFICER COMPENSATION
In determining the overall compensation package for the CEO, the Committee
considered each of the factors enumerated in the preceding paragraphs regarding
compensation for executive officers of the Company. In setting the overall
compensation of the CEO, however, the Committee considered the aggregate base
salary, bonus and option packages of Chief Executive Officers in comparable
positions.
OTHER MATTERS
Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), a publicly-held corporation such as the Company will not be allowed a
federal income tax deduction for compensation paid to the executive officers
named in the Summary Compensation Table to the extent that compensation
(including stock-based compensation) paid to a particular officer exceeds $1.0
million in any fiscal year, unless such compensation was "performance based."
Stock options granted under the Company's stock option and incentive plans
currently qualify as "performance-based compensation" that is not subject to the
deduction limitation of Section 162(m). The Committee intends to evaluate other
elements of compensation in light of Section 162(m), but may enter into
arrangements that do not satisfy exceptions to Section 162(m), as the Committee
determines to be appropriate.
COMPENSATION COMMITTEE
Antone J. Lazos
Donald E. O'Neill
The above report of the Compensation Committee, except the portion under
the heading "1997 Option Repricing," shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Lauer, Lazos and O'Neill.
John Pappajohn served as a member of the Compensation Committee until he
resigned from the Board of Directors of the Company in November 1997. Mr. Lauer
became a member of the Compensation Committee in December 1997 and, as a result,
did not participate in the Report of the Compensation Committee set out above.
No member of the Compensation Committee is employed by the Company.
11
<PAGE> 15
On May 20, 1997, the Company acquired all of the capital stock of Pangea,
Ltd., a Delaware corporation engaged in the business of product marketing and
distribution ("Pangea"). Under the terms of the stock purchase agreement, the
Company paid an aggregate purchase price of $1,023,000 to Pangea stockholders in
exchange for all outstanding Pangea capital stock and cancellation of all
options and warrants to purchase Pangea capital stock. In connection with the
acquisition, the Company repaid approximately $837,000 of indebtedness of
Pangea.
Prior to the closing of the transaction, Mr. Pappajohn was a stockholder
and director of Pangea. At the closing, Mr. Pappajohn received $500,000 of the
purchase price for his Pangea shares and repayment in full of $200,000 in loans
to Pangea. Dr. Richard C. Fuisz was a director of Pangea at the time of the
acquisition but received no compensation with respect to his services as
director nor to the sale of Pangea.
COMPANY STOCK PERFORMANCE GRAPH
The following graph compares the cumulative returns of $100 invested on
December 16, 1995 (the date of the Company's common stock began trading) in (a)
the Company, (b) the CRSP Index for the Nasdaq Stock Market (the "Nasdaq U.S.
Companies") and (c) the CRSP Index for Nasdaq Pharmaceutical Stocks (the "Nasdaq
Pharmaceutical Stocks"), assuming reinvestment of all dividends.
FUISZ TECHNOLOGIES LTD. 1997 PERFORMANCE GRAPH
<TABLE>
<CAPTION>
NASDAQ
MEASUREMENT PERIOD NASDAQ PHARMACEUTICAL FUISZ
(FISCAL YEAR COVERED) COMPOSITE INDEX TECHNOLOGIES
<S> <C> <C> <C>
12/16/95 100.00 100.00 100.00
12/31/95 102.67 111.96 127.09
12/31/96 126.26 112.27 98.44
12/31/97 155.03 116.03 106.25
</TABLE>
Prior to December 16, 1995, there was no active market for the Company's
common stock. Therefore, the prices of the Company's common stock as set forth
in the Performance Graph are for a period from December 16, 1995 until December
31, 1997.
12
<PAGE> 16
PROPOSAL II
RATIFICATION OF COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
The selection of Coopers & Lybrand L.L.P. as the Company's independent
public accountants for fiscal year 1998 has been approved by the Board of
Directors. Coopers & Lybrand has served as the Company's independent public
accountants since 1990. The stockholders of the Company are requested to ratify
this selection. This proposal is put before the stockholders in conformity with
the current practice of seeking stockholder approval of the selection of
independent public accountants. If the stockholders do not approve this
selection, the Board of Directors will reconsider the appointment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF COOPERS AND LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
The audit for the Company for the fiscal year ending December 31, 1997, was
conducted by Coopers & Lybrand. A representative of Coopers & Lybrand is
expected to attend the Meeting and will have the opportunity to make a statement
and/or respond to appropriate questions from stockholders present at the
Meeting.
13
<PAGE> 17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of February 28,
1998, concerning beneficial ownership of the Company's common stock by (i) each
person known by the Company to own beneficially more than five percent of the
outstanding shares of the common stock, (ii) each director and nominee for
director of the Company, (iii) each executive officer of the Company named in
the Summary Compensation Table, and (iv) all directors and executive officers of
the Company as a group. Unless otherwise indicated, all amounts reflected in the
table represent shares in which the beneficial owners have sole voting and
investment power.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
NAME OWNED(1) PERCENT
---- ---------------- -------
<S> <C> <C>
Richard C. Fuisz, M.D.(2),(3)............................... 4,433,045 19.6%
Kenneth W. McVey(4)......................................... 454,369 2.0%
Adrian M. Gerber(4)......................................... 174,999 *
Michael Myers, Ph.D.(4)..................................... 107,000 *
Patrick D. Scrivens(4)...................................... 370,000 1.6%
John R. Fuisz(4)............................................ 35,776 *
Louis Lauer(4),(5).......................................... 62,150 *
Antone J. Lazos(6).......................................... 29,000 *
Donald E. O'Neill(7)........................................ 98,250 *
Fredrik C. Schreuder(8)..................................... 229,048 1.0%
Daniel Tierney(4),(9)....................................... 1,033,000 4.6%
All directors and executive officers as a group (13
persons)(10).............................................. 7,279,636 30.9%
</TABLE>
- ---------------
* Less than one percent.
(1) The persons named in the table have sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them,
subject to the information contained in the footnotes to this table.
(2) Does not include shares held by the Richard C. Fuisz Children's Trust. See
Note (3). Includes 331,667 shares issuable upon exercise of outstanding
stock options exercisable within 60 days after February 28, 1998.
(3) Richard C. Fuisz is the grantor of the Richard C. Fuisz Children's Trust,
an irrevocable trust formed for the benefit of the children of Dr. Fuisz.
The trustee of the trust is The Bankers Trust Company. Dr. Fuisz disclaims
beneficial ownership of these shares.
(4) Includes the following shares issuable upon exercise of outstanding stock
options exercisable within 60 days after February 28, 1998: Mr.
McVey -- 66,667, Mr. Gerber -- 174,999, Dr. Myers -- 100,000, Mr.
Scrivens -- 270,000, Mr. John Fuisz -- 15,000, Mr. Lauer -- 33,000 and Mr.
Tierney -- 33,000.
(5) Includes 17,000 shares held of record by Elizabeth Lauer, wife of Mr.
Lauer, and 650 shares held of record by Mr. Lauer's son. Mr. Lauer
disclaims beneficial ownership of these shares. Does not include 2,000
shares held of record by Mr. Lauer's non-dependent daughters.
(6) Includes 14,000 shares held of record by Donna Lazos, wife of Antone J.
Lazos as Trustee for the DGT Trust. Mr. Lazos disclaims beneficial
ownership of these shares. Also includes 15,000 shares issuable upon
exercise of outstanding stock options exercisable within 60 days after
February 28, 1998.
(7) Includes 83,250 shares held of record by O'Neill Asset Partners Ltd., over
which Mr. O'Neill shares voting and investment power and 15,000 shares
issuable upon exercise of outstanding stock options exercisable within 60
days after February 28, 1998.
(8) Shares indicated as beneficially owned by Mr. Schreuder include 54,000
shares held by K/S Nordic Health Care Partners ("Nordic"), 23,463 shares
held by Viking Medical Ventures Ltd. ("Viking") and 72,000 shares held by
Neo Med Fund Ltd. ("Neo Med"). Mr. Schreuder is the President of a company
that serves as the management company for Nordic and an investment advisor
to Viking. Mr. Schreuder is Chairman of a company that serves as an
investment advisor to Neo Med. Also includes 12,000 shares issuable upon
exercise of outstanding stock options exercisable within 60 days after
February 28, 1998.
(9) Includes 1,000,000 shares held by the Cross Group, of which Mr. Tierney is
Chief Executive Officer and Chairman.
(10) Includes 1,273,832 shares issuable on exercise of outstanding stock options
exercisable within 60 days after February 28, 1998 and other shares
described in Notes (5) and (6).
14
<PAGE> 18
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission, The NASDAQ Stock Market and the Company initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company. Based upon the information supplied to it by
such persons, the Company is required to report any known failure to file these
reports within the period specified by the instructions to the reporting forms.
Based solely upon review of the copies of such forms received by it, the Company
believes that, during fiscal 1997, all filing requirements applicable to such
persons were complied with, except for i) the Form 3 filing for Mr. Tierney
which was not timely filed due to an administrative oversight, ii) a Form 4
filing for Mr. Schreuder relating to two purchases of the Company's common stock
in each of September and October 1997 by Neo Med Fund Inc., an entity with which
he is affiliated, which were not timely filed as a result of their occurrence
during his medical leave of absence and iii) a Form 4 filing for Mr. Wilcox
relating to an option grant which was not timely filed due to an administrative
oversight.
STOCKHOLDER PROPOSALS
Securities and Exchange Commission regulations permit stockholders to
submit proposals for consideration at annual meetings of stockholders. Any such
proposals for the Company's Annual Meeting of Stockholders to be held in 1999
must be submitted to the Company on or before December 10, 1998, and must comply
with applicable regulations of the Securities and Exchange Commission in order
to be included in proxy materials relating to that meeting. Proposals should be
sent to: Fuisz Technologies Ltd., Attn: Secretary, 14555 Avion at Lakeside,
Chantilly, Virginia 20151.
MISCELLANEOUS
A COPY OF THE COMPANY'S REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1997 (INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES OF
THE COMPANY), AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IS AVAILABLE
FREE OF CHARGE TO ALL STOCKHOLDERS OF RECORD AS OF THE RECORD DATE BY WRITING TO
THE COMPANY AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE SET FORTH ABOVE.
------------------------
Please complete, date, sign and mail promptly the accompanying proxy in the
postage-paid envelope enclosed for your convenience. The signing of the proxy
will not prevent your attending the Meeting and voting in person.
Chantilly, Virginia
April 9, 1998
15
<PAGE> 19
DETACH HERE
PROXY
FUISZ TECHNOLOGIES LTD.
ANNUAL MEETING OF STOCKHOLDERS
MAY 21, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Patrick D. Scrivens, Lars G. Okeson and Ronald O. Mueller, and each of
them, with several powers of substitution, are hereby authorized to represent
and vote all shares of Common Stock of the undersigned at the Annual Meeting of
Stockholders of Fuisz Technologies Ltd., to be held at the Washington Dulles
Airport Hilton, 13869 Park Center Road, Herndon, Virginia 22071 on Thursday, May
21, 1998 at 10:00 a.m., local time, and at any adjournments thereof. The
undersigned hereby revokes any Proxy previously given and acknowledges receipt
of the Notice of Annual Meeting and Proxy Statement, dated April 9, 1998, and a
copy of the Annual Report for the year ended December 31, 1997.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. THE BOARD OF DIRECTORS OF FUISZ TECHNOLOGIES LTD. RECOMMENDS A VOTE
FOR THE NOMINEES SET FORTH ON THE REVERSE SIDE AND FOR PROPOSAL 2. IF THIS
PROXY IS SIGNED AND RETURNED AND DOES NOT SPECIFY A VOTE ON ANY PROPOSAL, THE
PROXY WILL BE SO VOTED.
- ----------- -----------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ----------- -----------
<PAGE> 20
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR FOR PROPOSALS 1 AND 2.
1. Election of Directors
<TABLE>
<S> <C>
FOR AGAINST ABSTAIN
CLASS III DIRECTORS (TERM EXPIRES IN 2001): Louis Lauer, 2. Ratification of the appointment of [ ] [ ] [ ]
Kenneth W. McVey and Donald E. O'Neill Coopers & Lybrand L.L.P. as
CLASS II DIRECTOR (TERM EXPIRES IN 2000): Daniel Tierney independent public accountants for the
fiscal year ending December 31, 1998:
FOR [ ] [ ] WITHHOLD
ALL AUTHORITY
NOMINEES FOR ALL
NOMINEES
[ ]
---------------------------------------- MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please mark, date and sign exactly as your name appears
hereon and return in the enclosed envelope. If acting as
executor, administrator, trustee, guardian, etc., you should so
indicate when signing. If the signer is a corporation, please
sign the full corporate name, by duly authorized officer. If
shares are held jointly, each stockholder named should sign.
Signature: Date: Signature: Date:
------------------ ------------ ------------------ ------------
</TABLE>
