<PAGE>
374 Starke Rd
Carlstadt, NJ 07072
Infu-Tech, Inc. Tel. (201) 896-0100
Fax (201) 635-9358
To Our Shareholders:
This past year has seen the company shift away from our traditional infusion
therapy and managed care focus to accommodate new and what we believe to be
expanded opportunities as distributors of specialty pharmaceuticals and as
leaders in wireless applications for the healthcare industry.
This gradual move toward the Internet and wireless communications has led to
the formalization of Smartmeds.com as a subsidiary of Infu-Tech, Inc. and to the
appointment of Daniel Rosen, formerly Director business and commerce at the Walt
Disney Internet Group, as Chief Executive Officer of Smartmeds.com.
Additionally, Dan was appointed President of Infu-Tech, Inc. to be in a position
to integrate our traditional business with the company's entry into the Internet
business space.
During this period, Infu-Tech, Inc. sought to streamline its infusion therapy
and managed care accounts to focus on the more profitable opportunities and
eliminate fiscally draining businesses. This has led to the strengthening of our
client mix and should improve our cash flow and income generating opportunities.
The Future with Wireless Healthcare Applications
The company has built a strong relationship with 70 HMO's and it is this
relationship that has provided us with an overview of the weakness in
communications within the provider-patient-physician-healthcare services
relationship. Smartmeds.com was developed to address and improve communications
between these parties and in so doing empower people to better manage their
health.
Wireless technology is rapidly expanding the ability of people to communicate
and obtain information when and where ever they may be. The public is extremely
receptive to wireless communications. Just as banking and stock trading can be
facilitated with the immediacy and convenience offered by wireless devices,
healthcare will also benefit from the ease of this technology. It is expected
that the market for wireless devices will expand from 300 million to 1 billion
devices in use worldwide by 2003. Infu-Tech via Smartmeds.com is developing
Internet enabled wireless applications to facilitate healthcare and disease
management services.
Assessing Financial Results:
Infu-Tech's financial results for fiscal year 2000 reflected the Company's
decision to eliminate contractual arrangements that were not meeting
profitability standards and focus its efforts on specialty pharmaceuticals and
wireless internet applications for the healthcare industry.
For fiscal year 2000, Infu-Tech had revenues of $18.6 million versus $25.5
million in 1999. The net loss for 2000 was $3.8 million or $1.14 per share
compared with a loss of $1.1 million or $0.35 per share in 1999. A significant
portion of the loss was attributed to special items. The Company increased its
reserve for accounts receivable by $1.5 million, increased its valuation
allowance for deferred taxes by $0.5 million, and recognized a $0.1 million
charge for the exercise of non employee stock options.
Looking Forward:
Infu-Tech is expanding its traditional focus to embrace new opportunities as a
specialty pharmaceutical distributor and facilitator of wireless connectivity
between patient-provider-physician-healthcare services. The transition offers
new revenue generating opportunities via e-commerce, strategic partnerships to
further the Smartmeds.com wireless initiative, and via expanded markets for
specialty pharmaceuticals and other related products and services. Our long-
term relationships with some of the country's largest managed care organizations
provide a solid foundation upon which we are building new lines of business.
Going forward we will introduce new products and services that include disease
state management, patient outcomes research and advanced management information
services for physicians. We believe our market offers significant opportunities
for expansion and growth and Infu-Tech will take a national leadership position
in developing them.
Sincerely,
/s/ Jack Rosen
----------------------
Jack Rosen [graphic]
Chairman Joint Commission
Accreditation of Health Care Organizations
<PAGE>
INFU-TECH, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
November 28, 2000
TO THE STOCKHOLDERS OF INFU-TECH, INC.:
This is to notify you that the Annual Meeting of our stockholders will be
held at the Rihga Royal Hotel, 151 West 54th Street , New York, New York on
Tuesday, November 28, 2000, at 11:00 o'clock a.m. for the following purposes:
1. To elect six directors for the ensuing year.
2. To vote on a proposal to approve the Infu-Tech, Inc. 2000 Stock Option
Plan.
3. To transact any other business which may properly come before the
meeting.
Only stockholders of record as of the close of business on October 17, 2000
will be entitled to notice of or to vote at the meeting or any adjournment of
the meeting. Infu-Tech's transfer books will not be closed.
If you do not intend to be present at the meeting, please sign and return the
enclosed Proxy. If you attend and vote in person, the Proxy will not be used
with regard to the matters on which you voted.
By Order of the Board of Directors
Israel Ingberman
Secretary
Dated: November 7, 2000
<PAGE>
---------------
PROXY STATEMENT
---------------
Solicitation and Revocability of Proxy
Our management is soliciting the accompanying Proxy. The proxyholders named
in the Proxy will vote all shares represented by proxies in the manner
designated; or if no designation is made, they will vote the shares in favor of
the election of directors named below and in favor of approval of the 2000 Stock
Option Plan. They will not vote shares with regard to particular matters as to
which proxies instruct the proxyholders to abstain (or which are marked by
brokers to show that specified numbers of shares are not to be voted). WE ARE
MAILING THIS PROXY STATEMENT AND THE ACCOMPANYING FORM OF PROXY ON OR ABOUT
NOVEMBER 8, 2000 TO ALL STOCKHOLDERS OF RECORD ON OCTOBER 17, 2000. If you give
a proxy, you may revoke it at any time before it is voted by delivery of a
written instrument of revocation to our office at 374 Starke Road, Carlstadt, NJ
07072, or in open meeting, without, however, affecting any vote which has
already been taken. Your presence at the meeting will not revoke a proxy, but if
you attend the meeting and cast a ballot, that will revoke a proxy as to the
matter on which the ballot is cast.
Cost and Method of Solicitation
We will bear the cost of soliciting proxies. We are soliciting proxies by
mail and, in addition, our directors, officers and employees may solicit proxies
personally or by telephone. We will reimburse custodians, brokerage houses,
nominees and other fiduciaries for the cost of sending proxy material to their
principals.
Voting Rights and Proxies
Only stockholders of record as of the close of business on October 17, 2000,
will be entitled to vote at the meeting. Our only outstanding voting securities
on that date were 3,364,771 shares of Common Stock. Each outstanding share of
Common Stock is entitled to one vote.
You may vote your stock in person or by your signed, written proxy. We will
deem any message sent to us prior to the time for voting which appears to have
been transmitted by a stockholder, or any reproduction of a proxy, to be
sufficient. The death or incapacity of a person who gives a proxy will not
revoke the proxy, unless the fiduciary who has control of the shares represented
by the proxy notifies us in writing before the meeting of the death or
incapacity.
Principal Stockholders
The following are the only persons who, insofar as we are aware, owned
beneficially more than 5% of any class of our voting securities on October 17,
2000:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class
------------- ------------------------- ------------------- ---------
<S> <C> <C> <C>
Common Stock Kuala Healthcare, Inc. 1,570,000 46.7%
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
</TABLE>
3
<PAGE>
On October 17, 2000, Cede & Co. owned of record 1,781,203 shares of Common
Stock, constituting 52.9% of the outstanding Common Stock. We understand those
shares were held beneficially for various brokerage houses, some of whom may in
turn have been holding shares beneficially for customers.
As of October 17, 2000, our voting securities which our directors and
executive officers beneficially owned were as follows:
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Name and Address Title of Class Ownership (d) Percent of Class
-------------------------- -------------- ------------- ----------------
<S> <C> <C> <C>
Joseph Giglio Common Stock 40,000(a) 01.2%
Executive Professor
Northeastern University
Graduate School of Business
312 Hayden Hall
Boston, MA 02115
Jack Rosen Common Stock 301,000(c) 08.9%
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Joseph Rosen Common Stock 20,000(a) (b)
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Israel Ingberman Common Stock 20,000(a) (b)
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Carl D. Glickman Common Stock 35,000(a) 01.1%
1140 Leader Building
526 Superior Avenue East
Cleveland, Ohio 44114
Bruce Slovin Common Stock 40,000(a) 01.2%
35 E. 62nd Street
New York, NY 10021
Daniel Rosen Common Stock --(a) (b)
374 Starke Road
Carlstadt, NJ 07072
Frederick W. Schmidt Common Stock 21,875(a) (b)
374 Starke Road
Carlstadt, NJ 07072
All directors and executive Common Stock 477,875 14%
officers as a group (8 persons) shares
</TABLE>
---------------
(a) Consists entirely of shares which may be purchased on exercise of options
which were exercisable within 60 days after October 17, 2000. In addition,
all directors and officers other than Mr. Schmidt hold options to purchase
shares of Smartmeds.com, a subsidiary of Infu Tech, which after one year
can be converted into options to purchase shares of Infu Tech. None of
those options will be convertible within 60 days after October 17, 2000.
(b) Less than 1%.
(c) Includes 200,000 shares which were given as gifts to members of Mr.
Rosen's family.
(d) The ownership figures do not include options to purchase Common Stock, or
options to purchase shares of Smarmeds.com which will become convertible
into options to purchase Common Stock, which will not be exerciseable or
convertible within 60 days after October 17, 2000.
4
<PAGE>
ELECTION OF DIRECTORS
The persons named in the accompanying Proxy will vote for the following
people as directors of the Company (except as otherwise directed in proxies
which are submitted) to hold office until the next annual meeting of
stockholders:
<TABLE>
<CAPTION>
Name of Director Age Director Since
--------------------- --- --------------
<S> <C> <C>
Jack Rosen ............................................ 54 1988
Joseph Rosen .......................................... 49 1988
Israel Ingberman ...................................... 54 1988
Joseph Giglio ......................................... 59 1992
Bruce Slovin .......................................... 64 1992
Carl D. Glickman ...................................... 74 1992
</TABLE>
Jack Rosen has served as the Chief Executive Officer (the President, Chairman
of the Board or both) and as a Director of the Company since 1992, of Kuala
Healthcare, Inc. ("Kuala") since its incorporation in 1981 and of Kuala's
subsidiaries from their respective dates of incorporation, the first of which
was in 1976. Mr. Rosen is also the President and a Director of CompreMedx
Corporation ("CompreMedx"), an 89.1%-owned subsidiary of Kuala. He is actively
engaged, together with Joseph Rosen and Israel Ingberman, who are officers and
directors, and along with Jack Rosen are the three principal stockholders of the
Company (the "Principal Stockholders"), in a variety of enterprises, including
real estate development and hotel ownership (the "Rosen-Ingberman
Enterprises"). Jack Rosen is the brother of Joseph Rosen and the father of
Daniel Rosen, the President and Chief Operating Officer of the Company.
Joseph Rosen has served as a Vice President and as a Director of Kuala since
its incorporation in 1981 and as a director and officer of all its subsidiaries
(including CompreMedx) from their respective dates of incorporation. He is
actively engaged, together with the other Principal Stockholders, in the
Rosen-Ingberman Enterprises. He is the brother of Jack Rosen.
Israel Ingberman has served as Secretary, Treasurer and as a Director of
Kuala since its incorporation in 1981 and as a director and officer of all its
subsidiaries (including CompreMedx) from their respective dates of
incorporation. He is actively engaged, together with the other Principal
Stockholders, in the Rosen-Ingberman Enterprises.
Joseph M. Giglio has been a director of Kuala since January 1983. He became
a director of the Company in July 1992. Currently, he is a professor at the
Graduate School of Business at Northeastern University. From December 1993
until August 1994, he was the Senior Advisor to the First Southwest Company.
From April 1992 to November 1993, he was an Executive Vice President of Smith
Barney & Co., and from June 1991 to April 1992, he was a Managing Director of
that firm. From January 1990 to June 1991, he was the President of Chase
Municipal Securities, Inc., an affiliate of The Chase Manhattan Bank, N.A.
From August 1988 through December 1989, Mr. Giglio was a Senior Vice President
at Chase Securities, Inc. in the Municipal Finance Division. For more than
five years prior to joining Chase, Mr. Giglio was the Senior Managing Director
of the Public Finance Department at Bear Stearns & Co., Inc. Mr. Giglio served
as Chairman of the National Council on Public Works Improvement, which
released its final report, "Fragile Foundation," in February 1988. Mr.
Giglio chaired the U.S. Senate Budget Committee's Private Sector Advisory
Panel on Infrastructure Financing. He serves on the board of directors of The
Hudson Institute. Mr. Giglio has served as an Associate Professor of Finance
at New York University. He is a graduate of Rutgers University, and holds a
Master of Public Administration degree from New York University and a Master's
degree in Business from Columbia University.
Carl D. Glickman became a Director of the Company in July 1992. Since 1953,
he has been the president of The Glickman Organization, a real estate
ownership and management company. In addition, Mr. Glickman is a director of
Bear Stearns Companies, Inc. (an investment banking company), Jerusalem
Economic Corporation (an Israeli real estate company), Alliance Tyre and
Rubber Co. (an Israeli tire manufacturer), Lexington Corporate Properties,
Inc. (a real estate investment trust), and Office Max, Inc. (an office
supplier retailer).
5
<PAGE>
Bruce Slovin has been a Director of Kuala since June 1988. He became a
Director of the Company in July 1992. Mr. Slovin is a graduate of Harvard Law
School and Cornell University. Since 1980, he has been president and a
director of MacAndrews & Forbes Group, Inc., an industrial holding company.
Since 1985, he has been president and a director of Revlon Group Incorporated,
a consumer products holding company. In addition, Mr. Slovin is a director of
Andrews Group Incorporated (industrial holding company), M&F Worldwide Corp.,
(producer of licorice extract and other flavoring agents) and Cantel
Industries, Inc. (a distributor of medical equipment).
Vote Required
The election of a director requires a plurality of the votes cast for the
position. Because no minimum vote is required, shares which are present at the
meeting but are not voted (whether due to abstentions or otherwise) will not
directly affect the outcome of the election.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the annual compensation, long-term
compensation and all other compensation for our chief executive officer and for
each of our other executive officers whose annual salary and bonus totaled more
than $100,000 during the year ended June 30, 2000:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------- --------------------------------
Awards Payouts
--------------------- -------
Restricted
Other Annual Stock Options/ LTIP All Other
Name and Principal Salary Bonus Compensation Award(s) SARs Payouts Compensation
Position(1) Year ($)(2) ($)(2) ($) ($) ($) ($) ($)
---------------------- ---- ------- ------- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack Rosen................... 2000 150,000 -- None None -- None None
Chairman of the Board and... 1999 150,000 -- None None -- None None
Chief Executive Officer .... 1998 150,000 108,000 None None 100,000 None None
Pritpal Virdee(3)............ 2000 123,700 -- None None -- None None
Executive Vice President ... 1999 158,900 -- None None -- None None
1998 155,700 -- None None 10,000 None None
Frederick Schmidt(4)......... 2000 116,410 -- None None 27,500 None None
Vice President and Chief ... 1999 -- -- None None -- None None
Financial Officer .......... 1998 -- -- None None -- None None
</TABLE>
---------------
(1) Officers devoted 100% of their time to InfuTech, except Mr. Rosen (who
devoted approximately 33% of his time to InfuTech).
(2) Since August 1992, Mr. Rosen has been employed part-time by InfuTech. His
salary paid by InfuTech during fiscal 1998, 1999 and 2000 was $150,000 per
year. The bonus payable by InfuTech was $0 in 2000 and $0 in 1999. The
remainder of his working time is devoted to his duties as Chairman of
Kuala, for which he is entitled to an annual salary of $250,000. He also
became entitled to a bonus from Kuala of $684,100 with regard to fiscal
1998.
(3) Mr. Virdee resigned from Infu Tech on March 31, 2000.
(4) Mr. Schmidt has been employed by Infu Tech since October 12, 1999.
Directors who are not employees were entitled to annual fees of $5,000.
However, they waived these fees in fiscal 2000. Directors who are also employees
receive no additional remuneration for services as directors.
6
<PAGE>
Option Plans
The following table sets forth certain information with regard to options
granted during fiscal 2000 to our Chief Executive Officer and to our other
executive officers whose salary and bonus from us during fiscal 2000 totaled
more than $100,000:
Option/Sar Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Value
Individual Grants at Assumed
---------------------------------------------------------------------- Annual Rates of
Number of Percent of Total Stock Price
Securities Options/SARs Appreciation For
under Granted to Option Term
option/SARs Employees in Exercise of Base -----------------
Name Granted (#) Fiscal Year % Price ($/Sh) Expiration Date 5% ($) 10% ($)
----------- --------------- --------------- -------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Frederick W. Schmidt .............. 20,000 11.5% $1.10 10/28/09 $35,836 $57,062
7,500 4.3% 2.78 1/3/10 33,962 54,080
</TABLE>
The following table sets forth information with regard to exercises of
options and SARs held at June 30, 2000.
Aggregated Option/Sar Exercises in Last Fiscal Year and Fiscal Year-end
Option/Sar Values
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised in-the-
Options/SARs at Fiscal Money Options/SARs at
Year-End* Fiscal Year End ($)(a)**
Shares Acquired on Exercisable(E)/ Exercisable(E)/
Name Exercise (#) Value Realized ($) Unexercisable(U) Unexercisable(U)
---- ------------ ------------------ ---------------- ----------------
<S> <C> <C> <C> <C>
Jack Rosen .................. -- -- 301,000 (E)(b) 0(E)
Frederick W. Schmidt ........ -- -- 27,500(U) $23,000(U)
</TABLE>
---------------
(a) Based upon the amount by which the market value of Infu Tech's Common Stock
on June 30, 2000 ($2.25 per share) exceeded the exercise price of options.
(b) In addition, Mr. Rosen held options to purchase shares of Smartmeds. com, a
subsidiary of Infu Tech, which become convertible, at his option, on
April 18, 2001 into options to purchase 67,934 shares of Infu Tech's
Common Stock for $3.68 per share.
INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board has an Audit Committee and a Compensation Committee. It does not
have a Nominating Committee.
The Audit Committee consists of Messrs. Giglio, Slovin and Glickman. This
committee met twice in fiscal 2000. Its principal functions are: recommending to
the full Board the engagement of independent auditors for the ensuing year,
reviewing the scope of non-audit services performed for the Company by the
independent auditors, and reviewing the independent auditors' recommendations
for improvements of internal controls.
The Compensation Committee consists of Messrs. Giglio, Slovin and Glickman.
This Committee met once in fiscal 2000. Its principal functions are:
recommending to the full Board compensation arrangements for senior management
and recommending to the full Board the adoption and implementation of
compensation and incentive plans.
During fiscal 2000 the Board met twice. Each director attended both of the
meetings of the Board, except that Messrs. Giglio and Glickman each attended
only one meeting. Each director attended each meeting of any committees of the
Board on which he served.
The Board of Directors has adopted a written charter for the Audit Committee
which is attached as Exhibit 1 to this Proxy Statement.
7
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive officers have been hired by the Chief Executive Officer. Because of
the level of compensation of the executive officers (no executive officer other
than the Chief Executive Officer received salary and bonus totaling more than
$125,000 during the fiscal year ended June 30, 2000), the Chief Executive
Officer determines the compensation of the executive officers other than the
Chief Executive Officer without consultation with, or action by, the
Compensation Committee.
Stock options have been granted by a committee of Infu Tech's Board of
Directors, of which the Chief Executive Officer is a member, in accordance with
recommendations by the Chief Executive Officer. A total of 173,700 stock options
were granted during fiscal 2000 to employees other than the Chief Executive
Officer. These options were granted to provide the employees to whom they were
granted with incentives related to the performance of Infu Tech's stock.
The Chief Executive Officer has an employment agreement with Kuala which
expired on July 31, 2000. Although his employment agreement has not been
formally extended, he continues to provide services as Chairman of the Board and
he renders part-time services to the Company for a salary of $150,000 per year.
In June 1998, the Chief Executive Officer became entitled to a bonus from Infu
Tech of $108,000, which has not been paid. During fiscal 2000, the Chief
Executive Officer was not granted any options to purchase shares of Infu Tech's
Common Stock.
JOSEPH GIGLIO
CARL D. GLICKMAN
BRUCE SLOVIN
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended June 30, 2000 Infu Tech was charged $5,000 by a
corporation owned by Jack Rosen, the Chairman of the Board of Infu Tech, for use
of an airplane owned by that corporation. Infu Tech believes the rates it was
charged for use of that airplane were lower than those which would have been
available from an independent charter company for use of a similar airplane.
All the members of Infu Tech's Board of Directors, except Mr. Glickman, are
also directors of Kuala. Also, three of the members of Infu Tech's Board of
Directors are officers of Kuala. Transactions between Infu Tech and Kuala during
the year ended June 30, 2000 were as follows:
Infu Tech and Kuala had a Management and Non-Competition Agreement under
which, (i) Kuala provided to Infu Tech services of senior executives, other than
a chief executive officer (which would be Jack Rosen or another person paid by
Infu Tech), (ii) neither Kuala nor Infu Tech was permitted to make any loans to
the other of them, (iii) all other transactions between Infu Tech and Kuala were
required to be on terms determined by the Board of Directors of Infu Tech to be
no less favorable to Infu Tech than the terms which would be available from
unrelated parties, (iv) Kuala was prohibited from directly or indirectly
engaging in the business of providing infusion therapy to patients at home or in
nursing homes or similar long term care facilities (other than those owned or
operated by Kuala or subsidiaries) and (v) Infu Tech was prohibited from
directly or indirectly operating nursing homes or similar long term care
facilities. The agreement expired on September 30, 2000. Infu Tech paid Kuala a
management fee under the agreement equal to 1.6% of Infu Tech's revenues.
Kuala's liability as a result of services provided to Infu Tech was limited to
losses resulting from willful malfeasance, bad faith or gross negligence. Infu
Tech indemnified Kuala and its officers, employees and agents for losses
resulting from the provision of services under the agreement, except when there
is an adjudication that a loss resulted from the indemnified person's willful
misfeasance, bad faith or gross negligence.
Prior to June 30, 1999, Infu Tech provided infusion therapy services to
nursing homes owned or managed by Kuala and derived revenues from sales to those
homes, plus interest charged. It did not sell services to those nursing homes
during the year ended June 30, 2000 (but it did provide products and services to
patients in them).
8
<PAGE>
At September 30, 1999, Kuala's nursing homes owed us $2.07 million for goods
and services we had provided them and interest, and Kuala owed us $1.38 million
as its share of expenses for which we had paid. In October 1999, Kuala agreed to
pay us the $3.45 million, plus interest at 7% per annum, in 20 quarterly
installments of between $192,000 and $180,000 each. It gave us a security
interest in 1,500,000 shares of our stock which Kuala owned to secured these
obligations. It could make payments either in cash or by delivering shares of
our stock to us at its market value. During the year ended June 30, 2000,
Kuala's debt to us accrued interest of $226,000. During that year, Kuala paid us
$75,000. At June 30, 2000, an additional $355,000 was due under the agreements.
This sum was paid in September and October 2000. In November 2000, Kuala gave us
a mortgage on a property owned by one of its subsidiaries as further collateral
for its obligations.
PERFORMANCE GRAPH
The following graph compares the five year cumulative total return of our
Common Stock, assuming reinvestment of dividends, with the Dow Jones Equity
Market Index and the Dow Jones Health Care Providers Index:
Comparison of Five Year Cumulative Total Return
Fiscal Year Ending June 30
(1995 = 100)
[graphic]
PROPOSAL REGARDING STOCK OPTION PLAN
On February 28, 2000 the Audit Committee of our Board of Directors adopted
the Infu-Tech 2000 Stock Option Plan, subject to Board of Directors ratification
and stockholder approval. Our Board of Directors ratified that action on October
10, 2000. A copy of the Plan is attached as Exhibit 2 to this Proxy Statement.
Stockholders will be asked at the meeting to vote on a proposal to approve the
Plan.
We already had a stock option plan, the Infu-Tech 1996 Stock Option Plan (the
"1996 Plan"), under which we were authorized to grant stock options relating
to a total of up to 500,000 shares of Common Stock. At February 28, 2000,
options relating to 500,000 shares of Common Stock had been issued under the
1996 Plan and had not been cancelled. Therefore, we could issue no additional
options under the 1996 Plan.
9
<PAGE>
Our Board of Directors believes stock options are important to our efforts to
attract and motivate key employees. This is particularly important because we
are not in a position to pay salaries which are as high as those paid by some of
our competitors. Our management believed the number of shares which remained
available under the 1996 Plan was too small for our needs in connection with the
recruitment and retention of key employees. Among other things, we do not
believe we would have been able to recruit Daniel Rosen to become our president
on the basis of the number of shares available under the 1996 Plan. We will be
authorized to issue options under the Plan with regard to up to 500,000 shares
of Common Stock (subject to adjustment to take account of recapitalizations,
stock splits and similar events).
When the Audit Committee approved the Plan and the Board subsequently
ratified that approval, the Audit Committee also approved, and the Board
subsequently ratified, an option plan for our wholly owned subsidiary,
Smartmeds.com, Inc. A holder of an option granted under that plan may, at any
time after the first anniversary of the day the option was granted, convert the
option into an option to purchase shares of our Common Stock, with the number of
shares of our stock to which the converted option relates and the exercise price
of the converted option being based upon the number of shares and exercise price
of the Smartmeds option, adjusted to reflect the difference between the exercise
price of the Smartmeds option and the trading price of our shares on the day the
option is granted.
We have already granted options to purchase 173,700 shares under the Plan.
These options will be void if our stockholders do not approve the Plan by
February 28, 2001.
If the Company's stockholders approve the Plan, the 1996 Plan will be
terminated (although options which have already been granted will remain
outstanding and be exercisable in accordance with their terms). Therefore, if
the stockholders approve the Plan, the Company will have 326,506 shares of
Common Stock available for issuance under its stock option plans.
Description of the Plan
The purpose of the Plan is to encourage and enable those officers, employees
and directors of the Company and its subsidiaries upon whose judgement,
initiative and efforts we and our subsidiaries largely depend for the successful
conduct of our business to acquire equity interests in the Company, and by doing
so, to stimulate the efforts of those officers, employees and directors on
behalf of the Company and its subsidiaries and strengthen their desire to remain
officers, employees or directors of the Company or its subsidiaries.
Under the Plan, a committee appointed by our Board of Directors (which may be
the Board itself) may grant stock options, relating to up to 500,000 shares of
Common Stock (subject to adjustment to take account of stock dividends, stock
splits, recapitalizations and similar corporate events). If an option expires,
terminates or is cancelled without being exercised, the shares subject to that
option may be made the subject of new options granted under the Plan. Options
granted under the Plan may, or may not, be designated as Incentive Stock Options
("ISO's"), which receive special tax treatment as described below under "Tax
Consequences." In order to be eligible to be treated as an ISO for tax
purposes, an option must meet certain requirements, including that the recipient
be an employee, that the exercise price be at least 100% of the fair market
value of the Common Stock on the date of grant, that the term not exceed ten
years, and that the exercise price of all ISO's held by the person to whom it is
granted which first become exercisable in a year not exceed $100,000.
The Committee will determine which officers, employees and directors will
receive options under the Plan and the terms of the options granted to
particular officers, employees or directors. However, an option granted under
the Plan must expire no more than 10 years after the date of grant. The
Committee may determine that particular options will initially become
exercisable at specified times, or in specified installments, except that no
option may be exercisable until at least six months after it is granted other
than in the event of the optionee's death or disability. The exercise price of
an option will be determined by the Committee (subject to the requirement that
if the option is an ISO, the exercise price must not be less than 100% of the
fair market value of the Common Stock on the date the option is granted), and
must be paid in cash or by check, unless the Committee permits it to be paid in
whole or in part with shares of Common Stock valued at their fair market value
when the option is exercised. Options granted under the Plan may be assigned or
transferred only with the permission of the Committee, given after a
determination that transferability will not result in specified negative tax
effects and is
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<PAGE>
otherwise appropriate and desirable. No employee may receive options under the
Plan relating to more than 250,000 shares of Common Stock.
The following table provides information about the options which were
outstanding on October 17, 2000:
<TABLE>
<CAPTION>
Shares of Common Stock Average Per Share
Individual or Group Holding Subject to Options(a) Exercise Price
--------------------------- --------------------- --------------
<S> <C> <C>
Jack Rosen.............................................. 301,000 $4.800
Daniel Rosen............................................ 25,000 $2.875
Israel Ingberman........................................ 20,000 $5.200
Joseph Rosen............................................ 20,000 $5.200
All current executive officers ......................... 393,500 $4.490
All directors who are not executive officers ........... 115,000 $4.200
All employees other than executive officers ............ 47,150 $2.220
</TABLE>
---------------
(a) The named persons hold Smartmeds.com Inc. options, which may be converted
at the option of the holder, after April 18, 2001, into options to purchase
Infu Tech's shares at an exercise price of $3.68 per share (except that
Daniel Rosen's exercise price is $2.88 per share), as follows: Jack Rosen
67,935 shares, Daniel Rosen 86,806 shares, Israel Ingberman 8,152 shares,
Joseph Rosen 8,152 shares, all current executive officers 154,741 shares
and all directors who are not executive officers 40,761 shares.
On October 17, 2000, the last sale price of the Common Stock reported in the
Nasdaq Small Cap Market was $2.875.
Tax Consequences
The principal Federal income tax consequences to an employee, officer or
director of the grant and exercise of options under the Plan, and of the sale of
shares acquired through exercise of options, are as follows:
Recipients of options do not have taxable income because of the grant of
options to them under the Plan.
Unless an option is an ISO, when the option is exercised, the holder will be
treated as receiving ordinary income equal to the amount by which the fair
market value of the Common Stock at the time of the exercise exceeds the
exercise price of the option, and the fair market value of the Common Stock when
the option is exercised will be the basis of that stock while it is held by the
person who exercised the option. Therefore, when the stock is sold, the amount
by which the sale price is greater or less than the fair market value of the
shares when the option was exercised will be a capital gain or loss, which will
be long-term or short-term, depending on how long the shares are held after
exercise.
The holder of an ISO does not realize any taxable income when the ISO is
exercised. However, when an ISO is exercised, the amount by which the fair
market value at the time of exercise of the stock acquired through the exercise
exceeds the exercise price is treated as an item of adjustment for alternative
minimum tax purposes (unless the stock is disposed of within one year) and may
be subject to the alternative minimum tax. The price paid for the Common Stock
when the ISO is exercised will be the basis of that stock while it is held by
the person who exercised the option. If a person who exercises an ISO holds the
stock for at least one year after the date of exercise (and at least two years
after the date of grant), when the shares are sold the difference between the
exercise price and the sale price will be treated as a long-term capital gain or
loss. If the person does not hold the stock for one year after exercise (and two
years after the date of grant), the person is treated as having made a
"disqualifying disposition," and the person will be treated as receiving
ordinary income at the time of sale equal to the lesser of (i) the amount by
which the fair market value of the stock when the option was exercised exceeded
the exercise price, or (ii) the gain on the sale. In addition, if the sale price
exceeds the fair market value of the stock when the option was exercised, the
difference between the exercise price and the sale price will be a capital gain.
When an employee is treated as receiving ordinary income as a result of
exercise of an option which is not an ISO, we are required to withhold and pay
the withholding tax due with regard to that ordinary income. We may do this by
withholding from the employee's compensation, by withholding from the number of
shares issued
11
<PAGE>
on exercise of the option or by requiring payment of the amount required to be
withheld before the Company will issue shares upon exercise of the option.
When an option which is not an ISO is exercised or there is a disqualifying
disposition of shares acquired through exercise of an ISO, we will, in at least
most instances, be entitled to a deduction equal to the ordinary income which
the person who exercised the option is treated as having received.
Required Vote
Approval of the Plan requires the affirmative vote of a majority of shares
which are voted with regard to the proposal to approve it.
OTHER MATTERS
Our management does not know of any matters other than those described in
this Proxy Statement which will be presented for action at the meeting. If any
other matters properly come before the meeting, or any adjournments, the person
or persons voting the management proxies will vote them in accordance with their
best judgment.
AUDITORS
KPMG audited our financial statements for the fiscal year ended June 30,
2000. We expect representatives of that firm to be present at the Annual Meeting
of Stockholders to answer questions. We will give them an opportunity to make a
statement if they wish to do so.
STOCKHOLDERS PROPOSALS FOR NEXT ANNUAL MEETING
Proposals which stockholders wish included in next year's Proxy Statement
must be received at our principal executive offices at 374 Starke Road,
Carlstadt, New Jersey 07072 no later than August 7, 2001.
By Order of the Board of
Directors
ISRAEL INGBERMAN
Secretary
Dated: November 8, 2000
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<PAGE>
Exhibit 1
INFU-TECH, INC.
AUDIT COMMITTEE CHARTER
1. Audit Committee Purpose
The Audit Committee (the "Committee") is appointed by the Board of
Directors (the "Board") to assist the Board in fulfilling its oversight
responsibilities. The Committee's primary duties and responsibilities are to:
o Monitor the integrity if the Company's financial reporting process and
systems of internal controls;
o Monitor the independence and performance of the Company's independent
auditors and internal audit department, and;
o Provide an avenue of communication among the independent auditors,
management, the internal audit department and the Board.
The Committee has the authority to conduct any investigation appropriate to
fulfilling its responsibilities and it has direct access to the independent
auditors as well as anyone in the Company,
2. Audit Committee Composition and Meetings
The Committee members shall meet the requirements of the Nasdaq Marketplace
Rules. The Committee shall be comprised of at least three members as determined
by the Board, each of whom shall be independent, free from any relationship that
would interfere with the exercise of their independent judgment. All Committee
members shall have a basic understanding of finance and accounting and be able
to read and understand fundamental financial statements, and at least one
Committee member shall have accounting or related financial management
expertise.
Committee members shall be appointed by the Board. If a Committee Chair is
not designated or present, the Committee members may designate a Chair by
majority vote of the Committee membership.
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. The Committee Chair should consult with management, other
Committee members and the independent auditors prior to each meeting. The
Committee should meet privately in executive session at least annually with
management, the director of the internal audit department, the independent
auditors and as a committee to discuss any matters that the Committee or each of
these groups believe should be discussed. In addition, the Committee, or at
least its Chair, should communicate with management and the independent auditors
quarterly to review the Company's financial statements and significant findings
based upon the auditors' limited review procedures.
3. Audit Committee Responsibilities and Duties
Review Procedures
o Review and reassess the adequacy of this charter at least annually. Submit
the charter to the Board for approval and have the document included in
the Company's proxy statement once every three years in accordance with
Securities and Exchange Commission regulations.
o Review the Company's audited financial statements and discuss them with
management and the independent auditors. These discussions shall include
consideration of the quality if the Company's accounting principles as
applied in its financial reporting, including review of estimates,
reserves and accruals, review of audit adjustments whether or not recorded
and such other inquiries as may be appropriate. Based on the review, the
Committee shall make its recommendation to the Board as to the inclusion
of the Company's audited financial statements in the Company Annual Report
on Form 10-K.
o In consultation with management, the independent auditors and in the
internal auditors consider the integrity of the Company's financial
reporting process and controls. Discuss significant financial risk
exposures and the steps management has taken to monitor, control and
report such exposures. Review significant findings prepared by the
independent auditors and the internal audit department together with
management's responses including the status of previous recommendations.
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<PAGE>
o Review with financial management and the independent auditors the
Company's quarterly financial results prior to the release of earnings
and/or the Company's quarterly financial statements prior to filing or
distribution of the Form 10-Q. Discuss any significant changes to the
Company's accounting principles and any items required to be communicated
by the independent auditors in accordance with Statement of Auditing
Standards No. 61. The Chair of the Committee may represent the entire
Committee for purposes of this review.
Independent Auditors
o The independent auditors are ultimately accountable to the Committee and
the Board. The Committee shall review the performance of the auditors and
annually recommend to the Board the appointment of the independent
auditors or approve any discharge of auditors when circumstances warrant.
o In accordance with Independence Standards Board Statement No. 1, annually
review and discuss with the independent auditors all significant
relationships they have with the Company that could impair the auditors'
independence. The Committee shall request a written affirmation from the
auditors that they are in fact independent.
o Review the independent auditors audit plan and engagement letter which
discusses the scope, staffing, locations, reliance upon management and
internal audit and general audit approach. Also, review the scope of non-
audit services performed for the Company by the independent auditors.
o Consider and review with management and the independent auditors any
difficulties encountered in the course of audit work including any
restrictions on the scope of activities or access to required information.
o Prior to releasing the year end earnings, discuss the results of the audit
with the independent auditors. Discuss certain matters required to be
communicated to the Committee in accordance with Statement of Auditing
Standards No. 61.
Internal Audit Department and Legal Compliance
o Review the budget, plan, changes in plan, activities, organizational
structure and qualifications of the internal audit department, as needed.
o Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
o On at least an annual basis, review with the Company's counsel, any legal
matters that could have a significant impact on the Company's financial
statements, the Company's compliance with applicable laws and regulations
and inquiries received from regulators or governmental agencies.
Other Audit Committee Responsibilities
o Annually prepare a report to shareholders as required by the Securities
and Exchange Commission. The report should be included in the Company's
proxy statement annually.
o Annually prepare a written affirmation to The Nasdaq Stock Market, Inc.
regarding the Committee's compliance with respect to independence,
financial literacy, determination of at least one Committee member having
accounting or financial management expertise and annual review and
assessment of this charter.
o Maintain minutes of meetings and periodically report to the Board on
significant results of the foregoing activities.
14
<PAGE>
Exhibit 2
INFU-TECH, INC.
2000 STOCK OPTION PLAN
February 28, 2000
1. Definitions
As used in this Plan the following definitions apply:
(a) "Board of Directors" means the Board of Directors of Infu Tech, Inc.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee of the Board of
Directors, or such other committee consisting of at least two members of
the Board of Directors as may be specified by the Board of Directors to
perform the functions and duties of the Committee under the Plan. If
there is no Compensation Committee and the Board of Directors does not
appoint another Committee, the Board of Directors will be the Committee.
(d) "Common Stock" means common stock, par value $.01 per share, of Infu
Tech, Inc.
(e) "Company" means Infu Tech and all of its more than 50% owned
subsidiaries.
(f) "Director" means any person serving as a member of the board of
directors of any corporation included in the Company.
(g) "Incentive Option" means an option to purchase Common Stock which
meets the requirements set forth in the Plan and is intended to be, and
qualifies as, an Incentive Stock Option as that term is used in Section
422 of the Code.
(h) "Key Employee" means an officer or employee of the Company who the
Committee determines can contribute significantly to the growth and
successful operations of the Company.
(i) "Holder" means a person who holds a stock option granted under the
Plan.
(j) "Infu-Tech" means Infu Tech, Inc., a Delaware corporation, or its
successor by merger or any similar transaction.
(k) "Nonqualified Option" means an option to purchase Common Stock which
meets the requirements set forth in the Plan but is not intended to be,
or does not qualify as, an Incentive Stock Option as that term is used
in Section 422 of the Code.
(l) "Plan" means this Infu Tech, Inc. 2000 Stock Option Plan.
(m) "10% Stockholder" means a person who owns (after applying the
attribution rules contained in Section 424(d) of the Code) more than 10%
of the total combined voting stock of all classes of Infu Tech or of any
parent or subsidiary of Infu Tech.
2. Purpose of the Plan
The purpose of the Plan is to further the growth of Infu-Tech Inc. by
offering Directors and key employees of the Company upon whose judgment,
initiative and efforts the Company largely depends for the successful conduct of
its business, an opportunity to acquire a proprietary interest in Infu Tech, and
by doing so to stimulate the efforts of those officers, employees and Directors
on behalf of the Company and strengthen their desire to remain officers,
employees or Directors of the Company.
3. Authority to Grant Stock Options
(a) Except as provided in Section 3(b), the Committee may at any time
authorize the grant of stock options under the Plan to any one or more
Key Employees or Directors. These stock options may be Incentive Options
or Nonqualified Options, except that (i) no officer or Director who is
not an employee may be granted an Incentive Option, and (ii) no employee
may be granted an Incentive Option which would result in the aggregate
fair market value, determined as of the date the stock option is
granted, of the Common Stock with respect to which that Incentive Option
and all other Incentive Options held by that
15
<PAGE>
employee under any plan maintained by Infu Tech (or any parent or
subsidiary of Infu Tech) are exercisable for the first time by that
employee during any calendar year to exceed $100,000. No employee,
officer or Director may receive options for more than 250,000 shares of
Common Stock over the life of the Plan. Each stock option will be
designated at the time of grant as an Incentive Option or as a
Nonqualified Option.
(b) Any grant to an officer or Director of Infu Tech must be made either by
(i) the full Board of Directors or (ii) a committee of the Board of
Directors which consists solely of two or more "non-employee
directors" as defined in Rule 16b-3 under the Securities Exchange Act
of 1934, as amended. Any grant with respect to which an exception is
sought from the deduction limitations under Section 162(m) of the Code
must be made by a committee of the Board of Directors consisting solely
of two or more "outside directors" as that term is defined in Section
162(m) of the Code.
(c) Without limiting the generality of what is stated in Sections 3(a) and
(b), stock options may be granted to a Key Employee or Director
regardless of the fact that stock options previously granted to that Key
Employee or Director remain unexercised, and a Holder may exercise a
stock option when it is exercisable by its own terms, notwithstanding
that there are stock options which were previously granted to that
Holder which remain unexercised.
4. Terms of Stock Options
(a) Each stock option granted under the Plan will expire on a date
determined by the Committee when the option is granted, which will be
not more than 10 years after the date of grant, except that an Incentive
Option granted to a Key Employee who, at the time of the grant, is a 10%
Stockholder will expire not more than five years after the date of
grant.
(b) Each stock option granted under the Plan will be exercisable at such
time or times, and in such installments, as are determined by the
Committee when the stock option is granted. However, no stock option
granted under the Plan may be exercisable until at least six months
after the date of grant, except upon the death or disability of the
Holder prior to the expiration of that six month period.
(c) The exercise price of each stock option granted under the Plan will be
determined by the Committee when the stock option is granted, except
that with respect to Incentive Options, the exercise price may not be
less than (i) if the Incentive Option is granted to a person who is not
a 10% Stockholder, 100% of the fair market value of the Common Stock on
the date the Incentive Option is granted, and (ii) if the Incentive
Option is granted to a 10% Stockholder, 110% of the fair market value of
the Common Stock on the date the Incentive Option is granted. For the
purposes of the Plan, the fair market value of a share of the Common
Stock on any day will be the mean between the highest and lowest quoted
selling prices of the Common Stock in composite trading reported on the
principal securities exchange or market on which the Common Stock is
traded on that day, or if there are no sales on that day, on the next
following day on which there are sales.
(d) No stock option granted under the Plan may be assigned or transferred,
other than as provided in Section 13 upon the death of the Holder to
whom the stock option was granted, except that the Committee may (but
need not) permit other transfers, where the Committee concludes that the
transfers (i) do not result in accelerated taxation, (ii) do not cause
any option intended to be an Incentive Option to fail to meet the
requirements set forth in Section 422(b) of the Code (or any applicable
successor to that Section) and (iii) are otherwise appropriate and
desirable.
5. Payment of Option Exercise Price
The exercise price of any stock option will be payable in cash or by check
payable to the order of Infu Tech, Inc., except that the Committee may, at any
time, determine that the exercise price of a stock option may be paid by
delivering shares of the Common Stock with a fair market value at the date the
stock option is exercised equal to all or any part of the exercise price, with
any remaining balance to be paid in cash or by check payable to the order of
Infu Tech, Inc.
16
<PAGE>
6. Withholding Payments
(a) If the Company is required to pay any amount as withheld income tax
because of exercise of a stock option, the Company may, at its
discretion, either (i) reduce the number of shares of Common Stock
issuable upon exercise of the stock option by the amount of the required
withholding (with the Common Stock valued at its fair market value on
the date the stock option is exercised), (ii) require that, as a
condition to exercise of the stock option, the Holder remit to the
Company the amount of withholding tax required to be paid as a result of
the exercise or (iii) withhold the amount of the withholding tax from
payments of salary or other payments the Company is required to make to
the Holder.
(b) If a person makes a disqualifying disposition (as described in Section
422(a)(1) of the Code) of shares acquired upon exercise of an Incentive
Option, that person will promptly notify the Company of the
disqualifying disposition and pay to the Company an amount equal to any
withholding tax the Company is required to pay as a result of the
disqualifying disposition. If a person fails to pay the Company an
amount equal to any withholding tax the Company is required to pay as a
result of a disqualifying disposition of shares acquired upon exercise
of an Incentive Option, the Company may withhold that amount from any
payments of salary or other payments the Company is required to make to
the person or may take any other lawful steps to collect that amount
from the person.
7. Written Agreement
Promptly after a stock option is granted under the Plan, Infu Tech will
provide the Holder of that stock option with a written agreement containing the
provisions of the stock option. The terms of the agreement will be in accordance
with the Plan, but may contain additional provisions and restrictions
(including, without limitation, special provisions and restrictions applicable
to Incentive Stock Options) authorized by the Committee which are not
inconsistent with the Plan. Each agreement relating to a stock option will state
whether the stock option is or is not intended to be an Incentive Option.
Each Holder of a stock option granted under the Plan will be bound by the
terms of the Plan and of the agreement relating to the stock option.
8. Administration of the Plan
(a) The Plan will be administered by the Committee.
(b) The Committee will have full power to construe, interpret and administer
the Plan and to establish and change the rules and regulations for its
administration.
(c) Subject to the limitations contained in the Plan, the Committee will
have full power (i) to grant Incentive Options and Nonqualified Options
to any one or more Key Employees and Directors, and (ii) to determine as
to any stock option granted to any Key Employee or Director the number
of shares of Common Stock to which the stock option will relate, the
exercise price of the stock option, the term of the stock option, and
all other terms of the stock option.
(d) In exercising its powers under the Plan, the Committee may act in its
sole discretion, with no requirement that it follow past practice or
treat one employee, officer or Director in a manner consistent with the
treatment afforded to any other employee, officer or Director.
(e) All actions taken and decisions made by the Committee will be binding
and conclusive on all Holders of stock options granted under the Plan
and all other officers, employees and Directors of the Company, and on
their respective legal representatives and beneficiaries. No member of
the Committee will be liable for any determination made or action taken
in good faith with respect to the Plan or any stock options granted
under the Plan, or for any decision not to grant stock options under the
Plan to any officer, employee or Director of the Company.
9. Shares Available for Options
The aggregate number of shares of Common Stock which may be issued upon
exercise of stock options granted under this Plan is 500,000 shares, subject to
adjustment as provided in Section 12. Any shares which are subject to stock
options which terminate or are surrendered will be available to be issued on
exercise of
17
<PAGE>
subsequently granted stock options. Any shares as to which stock options are
exercised but which are retained by Infu Tech to pay the exercise price of stock
options, to reimburse the Company for paying withholding taxes or otherwise will
be deemed to have been issued upon exercise of stock options, and will not be
available to be issued on exercise of other stock options.
10. Laws and Regulations
The obligation of the Company to issue shares of Common Stock (or other
securities as provided in Section 11) upon exercise of Options will be subject
to (i) the condition that counsel for the Company is satisfied that the sale and
delivery will be in compliance with the Securities Act of 1933, as amended, and
all other applicable laws, rules or regulations, and (ii) the condition that the
shares of Common Stock reserved for issuance under the Plan have been authorized
for listing or quotation on all securities exchanges or quotation systems on
which the Common Stock is listed or quoted.
11. Modifications of Numbers of Shares and other Securities; Changes in
Capital Structure
If (i) Infu-Tech at any time is involved in a merger, consolidation,
dissolution, liquidation, reorganization, exchange of shares, sale of all or
substantially all of the assets or stock of Infu-Tech or similar transaction,
(ii) there is a stock dividend, stock split, reverse stock split, stock
combination, reclassification, recapitalization or other similar change in the
capital structure of Infu Tech, or a distribution to holders of Common Stock
other than a cash dividend or (iii) any other event occurs which in the judgment
of the Committee necessitates an adjustment to the terms of the outstanding
stock options which were issued under the Plan, the Committee may (x) make such
modifications in the terms of outstanding stock options as in its judgment are
appropriate so the Holders' rights will in aggregate be substantially the same
after the event as they were before the event, and (y) make such change in the
aggregate number of shares which may be granted under the Plan as in its
judgment will cause the number of shares available for issuance on exercise of
stock options which are outstanding at the time of the event and the number of
shares available to be issued on exercise of stock options which may be granted
in the future be the same proportion of the outstanding Common Stock immediately
after the event that they were of the outstanding Common Stock immediately
before the event, including, without limitation, adjustments in (A) the number
and kind of shares subject to stock options, (B) the exercise price of
outstanding stock options and (C) the number and kind of shares available for
future grants of stock options under Section 9. The judgment of the Committee
with respect to any matter referred to in this Section 11 will be conclusive and
binding upon each Holder without the need for any amendment to the Plan or any
stock options which had been granted under the Plan.
12. Effects of Termination of Employment
(a) Each Nonqualified Option granted under the Plan will terminate when the
Holder ceases to be an officer, employee or Director of the Company,
except that
(i) If a Holder of a Nonqualified Option dies while an officer, employee
or Director of the Company, each Nonqualified Option held by the
Holder at the date of the Holder's death may be exercised, to the
extent it was exercisable at the date of death (or, with the consent
of the Committee, in full), by the Holder's legal representative
until the earlier of 12 months after the date of death or the date on
which the Nonqualified Option expires by its terms.
(ii) If a Holder of a Nonqualified Option ceases to be an officer or
employee of the Company,
(A) after the Holder be comes 65 years old,
(B) because of the disability of the Holder (as determined by the
Committee in its discretion), or
(C) under other circumstances which the Committee determines to
justify continued exercise of stock options,
(iii) Each Nonqualified Option held by the Holder on the date the Holder
ceased to be an officer, employee or Director of the Company may be
exercised, to the extent it was exercisable on the date the Holder
ceased to be an officer, employee or Director of the Company (or,
with the consent of the Committee, in full), until the earlier of (x)
three months after the date the Holder ceased to
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<PAGE>
be an officer, employee or Director of the Company, or (y) the date
the stock option expires by its own terms.
(b) Each Incentive Option granted under the Plan will terminate when the
Holder ceases to be an employee of the Company (whether or not the
Holder continues to be an officer of the Company), except that if the
Holder dies while an employee of the Company, or ceases to be an
employee of the Company under a circumstance described in clause (A),
(B) or (C) of subparagraph (a) (ii) , each Incentive Option held at the
date the Holder ceases to be an employee of the Company may be exercised
by the Holder's legal representative until twelve months after the date
of death, or by the Holder until three months after the Holder ceases to
be an employee of the Company under a circumstance described in clause
(A), (B) or (C) of subparagraph (a)(ii), to the same extent a
Nonqualified Option could have been exercised in accordance with
subparagraph (a)(i) or (ii) after the date of death or after the Holder
ceases to be an officer, employee or Director of the Company.
13. No Rights to Continued Employment
Nothing in the Plan or in any stock option granted under the Plan, and no
action taken by the Committee, will give any officer, employee or Director of
the Company a right to continue to be an officer, employee or Director of the
Company or in any other way affect the right of the Company to terminate the
officer or Director position or employment of any officer, employee or Director
at any time for any reason, with or without cause.
14. Effective Date
The Plan will be effective on the date it is adopted by the Audit Committee
of Infu Tech's Board of Directors, provided that (i) Infu Tech's Board of
Directors ratifies the adoption of the Plan and (ii) stockholders approve the
Plan, within 12 months after it is adopted by the Audit Committee. Stock options
may be granted prior to approval of the Plan by the stockholders of Infu Tech,
but each stock option granted prior to stockholder approval of the Plan will be
subject to approval of the Plan by the stockholders of Infu Tech within 12
months after the Plan is adopted. No stock option may be exercised until the
Plan is approved by the stockholders of Infu Tech, and all stock options granted
before the Plan is approved by the stockholders of Infu Tech will automatically
terminate at the end of 12 months after the Plan is adopted by the Audit
Committee if adoption of the Plan is not ratified by Infu Tech's Board, or the
Plan is not approved by Infu Tech's stockholders by that date.
15. Amendments of the Plan
The Board of Directors may amend the Plan at any time; provided that the
Board of Directors may not make any amendment to the Plan that would, if the
amendment were not approved by Infu Tech's stockholders cause the Plan to fail
to comply with any requirement of applicable law or regulation, or make it not
possible for stock options to be granted under the plan which qualify as
incentive stock options, unless and until the approval of the stockholders of
Infu Tech is obtained. No amendment to the Plan will change the exercise price,
or otherwise alter any provision, of any stock option which has been granted
prior to the amendment, unless the Holder of the stock option consents to the
change.
16. Termination of the Plan
The Plan may be terminated at any time by the Board of Directors. The Plan
will terminate on the 10th anniversary of the date it is adopted by the Board of
Directors unless it is terminated before that. No stock options may be granted
after the Plan terminates. However, termination of the Plan will not affect any
stock option which is outstanding when the Plan is terminated.
* * *
As approved by the Board of Directors of Infu Tech Corporation
on February 28, 2000.
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<PAGE>
PROXY
This proxy is solicited on behalf of the Board of Directors of
INFU TECH, INC.
374 Starke Road
Carlstadt, NJ 07072
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 28, 2000.
The undersigned holder of shares of common stock of Infu Tech, Inc., a Delaware
corporation (the "Company"), hereby appoints Jack Rosen, Joseph Rosen and
Israel Ingberman, or any of them, with full power of substitution in each of
them, to attend the Annual Meeting of Shareholders (the "Annual Meeting") to
be held on November 28, 2000, at 10:00 a.m. local time, at The Rihga Royal
Hotel, 151 West 54th Street, New York, New York and any adjournments or
postponements thereof, to cast on behalf of the undersigned all votes that the
undersigned is entitled to cast at such meeting, and otherwise to represent the
undersigned at the meeting with all powers possessed by the undersigned if
personally present at the meeting.
THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS INSTRUCTED
BELOW. IF THIS PROXY IS EXECUTED BUT NO INSTRUCTION IS GIVEN, THE VOTES ENTITLED
TO BE CAST BY THE UNDERSIGNED WILL BE CAST "FOR" PROPOSALS 1 AND 2 AND IN THE
DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
|X| Please make your votes as in this example.
<TABLE>
<CAPTION>
Proposal For Against Abstain
-------- --- ------- -------
<S> <C> <C> <C>
1. Election of Directors for the ensuing year: To vote |_| |_| |_|
for all nominees listed below (except as marked to the
contrary below)
Jack Rosen, Joseph Rosen, Israel Ingberman, Joseph M.
Giglio, Bruce Slovin and Carl D. Glickman
Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name in the
space provided below.
2. To approve the proposal for the Infu Tech, Inc. 2000 |_| |_| |_|
Stock Option Plan described in the accompanying Proxy
Statement.
3. To vote and otherwise represent the undersigned on any |_| |_| |_|
other matter that may properly come before the meeting
or any adjournment or postponement thereof in the
discretion of the proxy holder.
</TABLE>
The undersigned shareholder may revoke this proxy at any time before the votes
are cast by delivering to the Secretary of the Company either a written
revocation of the proxy or a duly executed proxy bearing a later date, or by
appearing at the Annual Meeting and voting in person. The undersigned
shareholder hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement and revokes any proxy previously given with
respect to such meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
DATED:
--------------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature (if held jointly)
Please date and sign exactly as the name
appears hereon. When signing as executor,
administrator, trustee, guardian,
attorney-in-fact or other fiduciary, please
give title as such. When signing as
corporation, please sign in full corporate
name by President or other authorized
officer. If you sign for a partnership,
please sign in partnership name by an
authorized person.
