<PAGE>
SCHEDULE 14 A
(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
<TABLE>
<S> <C>
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
</TABLE>
SELFCARE, INC.
<TABLE>
<S> <C>
- ------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
</TABLE>
<PAGE>
SELFCARE, INC.
200 PROSPECT STREET
WALTHAM, MASSACHUSETTS 02453
April 6, 2000
Dear Fellow Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders on
Tuesday, May 9, 2000, at 12:30 p.m. at the offices of Foley Hoag & Eliot LLP,
One Post Office Square, Boston, MA 02109.
At this year's Annual Meeting you will be asked to (i) elect the directors
nominated by the Selfcare, Inc. Board of Directors; (ii) authorize and approve
the amendment of the Company's Amended and Restated Certificate of Incorporation
to change the name of the Company from Selfcare, Inc. to Inverness Medical
Technology, Inc.; (iii) authorize and approve the increase of the number of
shares of common stock, $0.001 par value per share, available for purchase by
eligible employees of the Company through the Selfcare, Inc. Employee Stock
Purchase Plan from 250,000 shares to 850,000 shares; and (iv) approve and adopt
the Inverness Medical Technology, Inc. 2000 Stock Option and Grant Plan.
THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF EACH OF THE ABOVE PROPOSALS
IS IN THE BEST INTEREST OF THE COMPANY AND ITS SHAREHOLDERS. THE BOARD OF
DIRECTORS HAS UNANIMOUSLY APPROVED EACH OF THE ABOVE PROPOSALS AND RECOMMENDS
THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL OF EACH OF THE ABOVE PROPOSALS.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted. After reading the enclosed Notice of
Annual Meeting and Proxy Statement, please complete, sign, date and return your
proxy card in the envelope provided. If your address on the accompanying
material is incorrect, please forward a correction in writing to our Transfer
Agent, EquiServe Limited Partnership, P.O. Box 8200, Boston, MA 02266-8200, or
call (800) 426-5523.
Your vote is important. We will appreciate a prompt return of your signed
proxy card.
Cordially,
[LOGO]
Ron Zwanziger
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND
PRESIDENT
<PAGE>
SELFCARE, INC.
200 PROSPECT STREET
WALTHAM, MASSACHUSETTS 02453
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 9, 2000
------------------------
To the Shareholders of Selfcare, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (together
with all adjournments and postponements thereof, the "Annual Meeting") of
Selfcare, Inc. (the "Company") will be held Tuesday, May 9, 2000, at 12:30 p.m.
at the offices of Foley Hoag & Eliot LLP, One Post Office Square, Boston,
Massachusetts 02109, for the following purposes:
1. To elect three individuals to serve as Class I Directors of the
Company's Board of Directors for a term of three years and until their
respective successors have been duly elected and qualified;
2. To consider and act upon a proposal to approve and adopt an amendment to
the Company's Amended and Restated Certificate of Incorporation for the
purpose of changing the name of the Company from Selfcare, Inc. to
Inverness Medical Technology, Inc.;
3. To consider and act upon a proposal to authorize and approve the
increase of the number of shares of common stock, $.001 par value per
share (the "Common Stock"), available for purchase by eligible employees
of the Company through the Selfcare, Inc. Employee Stock Purchase Plan
(the "Stock Purchase Plan") from 250,000 shares to 850,000 shares;
4. To consider and act upon a proposal to approve and adopt the Inverness
Medical Technology, Inc. 2000 Stock Option and Grant Plan (the "2000
Option Plan") under which stock options, stock appreciation rights and
stock awards with respect to 750,000 shares of Common Stock may be
granted; and
5. To transact such other business as may properly come before the Annual
Meeting.
The Board of Directors has fixed the close of business on March 10, 2000 as
the record date for determining the shareholders having the right to receive
notice of and to vote at the Annual Meeting. Only shareholders of record of the
Company's Common Stock at the close of business on such date are entitled to
notice of the Annual Meeting. A list of shareholders entitled to vote at the
Annual Meeting will be available during ordinary business hours at the offices
of Goodwin, Procter & Hoar LLP, 53 State Street, Boston, Massachusetts 02109 and
also at the Company's executive offices, 200 Prospect Street, Waltham,
Massachusetts 02453, at least ten (10) days prior to the Annual Meeting, for
examination by any Company shareholder for purposes germane to the Annual
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
NOMINATED DIRECTORS, "FOR" APPROVAL AND ADOPTION OF THE AMENDMENT TO THE AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY WHICH WILL CHANGE THE
NAME OF THE CORPORATION, "FOR" APPROVAL OF THE INCREASE OF THE NUMBER OF SHARES
AVAILABLE FOR PURCHASE THROUGH THE STOCK PURCHASE PLAN AND "FOR" APPROVAL AND
ADOPTION OF THE 2000 OPTION PLAN.
<PAGE>
- --------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXY CARDS BE RETURNED PROMPTLY. IF YOU DO NOT EXPECT TO
BE PRESENT AT THE MEETING, PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED
PROXY CARD, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THE PROXY
MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE, AND IF YOU ARE PRESENT AT THE
MEETING YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AT THAT TIME AND EXERCISE THE
RIGHT TO VOTE YOUR SHARES PERSONALLY.
- --------------------------------------------------------------------------------
By Order of the Board of Directors,
Kenneth D. Legg, Ph.D.,
SECRETARY
April 6, 2000
<PAGE>
SELFCARE, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 9, 2000
THE ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Selfcare, Inc. (the "Company" or
"Selfcare") for use at the Annual Meeting of Shareholders to be held on Tuesday,
May 9, 2000, at 12:30 p.m. at the offices of Foley Hoag & Eliot LLP, One Post
Office Square, Boston, MA 02109 (including any adjournment or postponement
thereof, the "Annual Meeting"), for the purposes set forth in the accompanying
Notice of Annual Meeting. This Proxy Statement and the accompanying form of
proxy to shareholders will be mailed on or about April 6, 2000.
PURPOSE OF THE ANNUAL MEETING
At the Annual Meeting, all of the holders of the Company's common stock, par
value $.001 per share (the "Common Stock"), will be asked to consider and vote
upon the following matters:
1. The election of three individuals to serve as Class I Directors of the
Company's Board of Directors for a term of three years and until their
respective successors have been duly elected and qualified (the "Election
of Directors Proposal"). The Board of Directors has nominated Robert M.
Oringer, Willard L. Umphrey and Ron Zwanziger for election as Class I
Directors.
2. To consider and act upon a proposal to approve and adopt an amendment to
the Company's Amended and Restated Certificate of Incorporation for the
purpose of changing the name of the Company from Selfcare, Inc. to
Inverness Medical Technology, Inc. (the "Name Change Proposal");
3. To consider and act upon a proposal to authorize and approve the
increase of the number of shares available for purchase by eligible
employees of the Company under the Selfcare, Inc. Employee Stock Purchase
Plan (the "Stock Purchase Plan") from 250,000 shares of Common Stock to
850,000 shares of Common Stock (the "Increase in Shares under Stock
Purchase Plan Proposal");
4. To consider and act upon a proposal to approve and adopt the Inverness
Medical Technology, Inc. 2000 Stock Option and Grant Plan (the "2000
Option Plan") under which a committee of two or more non-employee
directors would have the ability to grant stock options, stock
appreciation rights, and stock awards with respect to 750,000 shares of
Common Stock (the "2000 Option Plan Proposal"); and
5. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF
THE ELECTION OF DIRECTORS PROPOSAL, THE NAME CHANGE PROPOSAL, THE INCREASE IN
SHARES UNDER STOCK PURCHASE PLAN PROPOSAL AND THE 2000 OPTION PLAN PROPOSAL.
RECORD DATE; VOTING RIGHTS; PROXIES
Only holders of the Common Stock are entitled to receive notice of the
Annual Meeting. As of the Record Date, the Company had 20,615,207 shares of
Common Stock issued and outstanding. Shares held in the treasury of the Company
are not considered outstanding. Each share of Common Stock is entitled to vote
on all matters. No other class of securities will be entitled to vote at the
Annual Meeting. There are no cumulative voting rights.
The address of the principal executive offices of the Company is 200
Prospect Street, Waltham, Massachusetts 02453, Telephone No. (781) 647-3900.
<PAGE>
All shares that are entitled to vote and are represented at the Annual
Meeting by properly executed proxies received prior to or at the Annual Meeting
will be voted at the Annual Meeting in accordance with the instructions
indicated on the proxies. Proxies which are executed but which do not contain
any specific instructions will be voted in favor of the proposals contained
herein. If any other matters are properly presented at the Annual Meeting for
consideration, the persons named in the enclosed forms of proxy will have
discretion to vote on such matters in accordance with their best judgment.
Pursuant to the Company's By-laws, no notice of an adjourned meeting need be
given other than announcement at the Annual Meeting of the hour, date and place
to which the Annual Meeting is adjourned, except where the meeting is adjourned
for 30 days or more.
Proxies in the accompanying form, duly executed and returned to the Company
and not revoked, will be voted at the Annual Meeting. Any proxy given pursuant
to such solicitation may be revoked by the shareholder at any time prior to the
voting of the proxy by a subsequently dated proxy, by written notification to
the Secretary of the Company, or by personally withdrawing the proxy at the
Annual Meeting and voting in person. Attendance at the Annual Meeting will not
in and of itself constitute revocation of a proxy.
SOLICITATION OF PROXIES
The Company will bear the costs of solicitation of proxies and of preparing,
printing and mailing this Proxy Statement. Brokerage houses, fiduciaries,
nominees and others will be reimbursed for their out-of-pocket expenses in
forwarding proxy materials to beneficial owners of shares held in their names.
In addition to the solicitation of proxies by use of the mails, proxies may be
solicited from holders of shares by directors, officers and employees of the
Company.
QUORUM
The holders of a majority of the votes represented by the issued and
outstanding shares of Common Stock, present in person or represented by proxy,
shall constitute a quorum at the Annual Meeting. Shares represented by executed
proxies received by the Company will be counted for purposes of establishing a
quorum, regardless of how or whether such shares are voted on any specific
proposal.
The inspector of elections appointed for the meeting will tabulate votes
cast in person or by proxy at the meeting. The inspector of elections will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum, but as unvoted for purposes of determining
the approval of any matter submitted to the shareholders for a vote. Broker
non-votes (i.e., proxies on which a broker or nominee indicates that it does not
have discretionary authority as to certain shares to vote on a particular
matter) will also be considered as present for the purposes of determining the
presence of a quorum, but unvoted with respect to that matter.
REQUIRED VOTE
Proposal 1. In connection with the Election of Directors Proposal, the three
nominees receiving the greatest number of votes cast by the holders of the
Company's shares of Common Stock entitled to vote at the Annual Meeting will be
elected as Class I Directors of the Company.
Proposal 2. The affirmative vote of a majority of the issued and outstanding
Common Stock is required to approve the Name Change Proposal.
Proposals 3 and 4. The affirmative vote of a majority of the Common Stock
votes cast at the Annual Meeting is required to approve the Increase in Shares
under Stock Purchase Plan Proposal and the 2000 Option Plan Proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE APPROVAL OF THE FOUR PROPOSALS.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS PROPOSAL
CLASSIFICATION OF THE BOARD OF DIRECTORS
The Board of Directors is divided into three classes, each of whose members
serve for a staggered three-year term. The Board of Directors is comprised of
three Class I Directors (Messrs. Oringer, Umphrey and Zwanziger), two Class II
Directors (Ms. Goldberg and Mr. Roberts) and two Class III Directors
(Messrs. Townsend and Levy).
At each annual meeting of shareholders, a class of directors is elected for
a three-year term to succeed the directors of the same class whose terms are
then expiring. The current terms of the Class I Directors, Class II Directors
and Class III Directors will expire upon the election and qualification of
successor directors at the annual meetings of shareholders held following the
end of the calendar years 1999, 2000 and 2001, respectively.
The proxies granted by shareholders will be voted individually at the Annual
Meeting for the election of the Class I Directors nominated by the Board of
Directors: Robert M. Oringer, Willard L. Umphrey and Ron Zwanziger. In the event
that Mr. Oringer, Mr. Umphrey or Mr. Zwanziger shall be unable to serve, it is
intended that the proxy will be voted for such other nominees, if any, as are
designated by the Board of Directors. Messrs. Oringer, Umphrey and Zwanziger
have each indicated to the Board of Directors of the Company that they will be
available to serve as a member of the Board of Directors if elected.
DIRECTORS
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
- ---- -------- ------------------------ --------------
<S> <C> <C> <C>
Ron Zwanziger................................. 46 Chairman, 1992
Chief Executive Officer
and President
Carol R. Goldberg(1).......................... 69 Director 1992
John F. Levy(2)............................... 53 Director 1996
Robert M. Oringer............................. 40 Director 1998
Edward B. Roberts(2).......................... 64 Director 1992
Peter Townsend(2)............................. 65 Director 1996
Willard L. Umphrey(1)......................... 58 Director 1992
</TABLE>
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(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
RON ZWANZIGER, CHAIRMAN, CHIEF EXECUTIVE OFFICER AND
PRESIDENT. Mr. Zwanziger has served as the Company's Chairman, Chief Executive
Officer and President since its inception in 1992. From 1981 to 1991, he was
chairman and chief executive officer of MediSense, a medical device company.
CAROL R. GOLDBERG, DIRECTOR. Ms. Goldberg has served on the Board of
Directors of the Company since August 1992. Since December 1989, she has served
as president of The AVCAR Group, Ltd., an investment and management consulting
firm in Boston, Massachusetts. Ms. Goldberg is a director of America Service
Group, Inc., a managed healthcare company, and The Gillette Company, a consumer
products company.
3
<PAGE>
JOHN F. LEVY, DIRECTOR. Mr. Levy has served on the Board of Directors of
the Company since August 1996. Since 1993, he has been an independent
consultant. Mr. Levy served as president and chief executive officer of
Waban, Inc., a warehouse merchandising company, from 1989 to 1993.
ROBERT M. ORINGER, DIRECTOR. Mr. Oringer joined the Company's Board of
Directors on February 18, 1998 upon the consummation of the Company's
acquisition of Can-Am Care Corporation ("Can-Am"). He has served as President of
Can-Am since he first joined that company in 1989. Can-Am is engaged in the
distribution of diabetes care products, primarily to the U.S. retail market.
EDWARD B. ROBERTS, DIRECTOR. Mr. Roberts has served on the Board of
Directors of the Company since April 1992. He is the David Sarnoff Professor of
Management of Technology at the Massachusetts Institute of Technology, where he
has been a faculty member since 1963. Mr. Roberts was General Partner of Zero
Stage Capital and First Stage Capital Equity Funds, two venture capital funds,
from 1991 to 1999. Mr. Roberts was co-founder and chairman of Pugh-Roberts
Associates, an international management consulting firm specializing in
strategic planning and technology management, now a division of PA Consulting
Group. He co-founded and is a director of Medical Information Technology, Inc.,
a producer of hospital information systems. He is a director of Advanced
Magnetics, Inc., a medical imaging company, Pegasystems Inc., a developer of
customer service management software, and NETsilicon, Inc., a developer of
semiconductor devices and software.
PETER TOWNSEND, DIRECTOR. Mr. Townsend has served on the Board of Directors
of the Company since August 1996. Mr. Townsend served as chief executive officer
and a director of Enviromed plc, a medical products company, from 1991 to 1995,
when he retired.
WILLARD L. UMPHREY, DIRECTOR. Mr. Umphrey has served on the Board of
Directors of the Company since December 1992. He was the co-founder and, prior
to his resignation on July 12, 1999, Chairman and President of the Quantitative
Group of Funds, an investment management company. He also served as President
and Treasurer of U.S. Boston Capital Corporation, a broker-dealer, prior to
resigning on July 12, 1999.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
The Board of Directors has a Compensation Committee and an Audit Committee.
The Compensation Committee, consisting of Ms. Goldberg and Mr. Umphrey, makes
recommendations concerning salaries and incentive compensation for employees of
and consultants to the Company, establishes and approves salaries and incentive
compensation for certain senior officers and employees, and administers the
Company's stock option plans. The Audit Committee, consisting of Mr. Levy,
Mr. Townsend and Mr. Roberts, reviews the results and scope of the financial
audit and other services provided by the Company's independent public
accountants.
The Board of Directors held eleven meetings during the last fiscal year. The
Compensation Committee held two meetings and the Audit Committee held one
meeting during the last fiscal year. The Board of Directors does not have a
nominating committee or a committee serving a similar function.
Employee directors are not entitled to cash compensation in their capacities
as directors. As of September 14, 1999, non-employee directors became entitled
to receive compensation at the rate of $1,333.00 per month beginning in
August 1999. All of the directors are reimbursed for their expenses incurred in
connection with their attendance at Board of Directors and committee meetings.
In addition, on September 14, 1999, each non-employee director as of such
date, namely Carol R. Goldberg, Willard L. Umphrey, John F. Levy, Jonathan J.
Fleming, Peter Townsend and Edward B. Roberts, was awarded as additional
compensation for their service as directors during the years 1999 and 2000 an
option to purchase up to 16,000 shares of the Company's Common Stock at an
exercise price equal to $2.8125 per share, the closing market price per share on
the date of grant. These options were granted pursuant to the Selfcare, Inc.
1996 Amended and Restated Stock Option and Grant Plan (the "1996
4
<PAGE>
Option Plan") and each such option vests in three equal annual installments so
long as the non-employee director remains a member of the Board of Directors.
Mr. Fleming resigned as a director as of February 1, 2000 and, consequently, the
options granted to him as of September 14, 1999, have terminated.
Each non-employee director was also given the right, within thirty days
after September 14, 1999, to elect to receive an additional option to purchase
up to 9,920 shares of Common Stock in lieu of cash compensation for the period
September 1999 through December 2000, each such option to have an exercise price
of $2.8125 and to vest in monthly installments of 620 options beginning on the
last day of September 1999. The following non-employee directors opted to
receive such an option in lieu of cash compensation: Carol R. Goldberg, Willard
L. Umphrey, John F. Levy and Edward B. Roberts. Finally, during 1999
Mr. Edwards and Ms. Goldberg were granted options to purchase 25,000 and 20,000
shares of Common Stock respectively, at exercise prices of $2.375 per share, and
Mr. Edwards received a cash payment of $20,000, all in consideration of special
services rendered to the Company over and beyond their duties as a director.
Each non-employee director of the Company had previously been granted,
pursuant to the 1996 Option Plan, an option to purchase 12,000 shares of Common
Stock as of the date of the initial public offering (the "Initial Public
Offering") at an exercise price equal to the initial public offering price. In
addition, each new non-employee director elected after the date of the Initial
Public Offering and before November 4, 1996, received an option to purchase
12,000 shares of Common Stock upon such director's election to the Board of
Directors at an exercise price equal to the fair market value of the Common
Stock on the date of grant.
In addition, options and other awards may be granted to directors in the
sole discretion of the Administrator of the 1996 Option Plan.
PROPOSAL 2
APPROVAL OF NAME CHANGE PROPOSAL
The Company has proposed the approval and adoption of an amendment to its
Amended and Restated Certificate of Incorporation (the "Name Change Proposal")
for the purpose of changing the legal name of the Company from "Selfcare, Inc."
to "Inverness Medical Technology, Inc." The Name Change Proposal is proposed for
approval and adoption by the holders of the Company's Common Stock.
BOARD OF DIRECTORS RECOMMENDATION; REASONS FOR THE NAME CHANGE PROPOSAL
As of June 30, 1998, the Company entered into an settlement agreement with
Medical Selfcare, Inc., under which the Company is obligated to phase out its
use of the name and mark "Selfcare" prior to June 2001. The settlement resulted
from a law suit filed by Medical Selfcare, Inc., seeking to bar the Company from
using that name and mark. The Company already markets all of its products in the
United States through its subsidiary, Inverness Medical, Inc. and has a major
manufacturing and research and development subsidiary, Inverness Medical, Ltd.
located in Inverness Scotland. The Board of Directors believes that the name
"Inverness Medical Technology, Inc." better reflects the international scope and
focus of the Company's operations. For these reasons, the Board of Directors
believes that it is now in the best interest of the Company and its shareholders
to change the name of the Company by amending its Amended and Restated
Certificate of Incorporation to change the name of the Company to "Inverness
Medical Technology, Inc."
5
<PAGE>
DELAWARE STATE LAW VOTING REQUIREMENTS
The Company is incorporated in the State of Delaware. The Delaware General
Corporation Law requires the approval of a majority of shareholders entitled to
vote to amend the Amended and Restated Certificate of Incorporation.
VOTE REQUIRED
To approve the Name Change Proposal, the affirmative vote of a majority of
the outstanding shares of Common Stock is required.
The Board of Directors believes the Name Change Proposal is in the best
interests of the Company and its shareholders, and accordingly, recommends that
the shareholders vote "FOR" the approval and adoption of the Name Change
Proposal.
PROPOSAL 3
APPROVAL OF INCREASE IN SHARES UNDER STOCK PURCHASE PLAN PROPOSAL
The Company's Board of Directors recommends that the Stock Purchase Plan be
amended to increase the number of shares of Common Stock that are available for
purchase by eligible employees of the Company through the Stock Purchase Plan
from 250,000 shares to 850,000 shares (the "Increase in Shares under Stock
Purchase Plan Proposal"). The Company was unable to undertake an Offering (as
defined below) under the Stock Purchase Plan for the period January 1, 2000,
through June 30, 2000, because the number of shares remaining available under
the Stock Purchase Plan was insufficient. Only 248 shares are currently
available for the purchase of Common Stock under the Stock Purchase Plan. The
proposed increase in the aggregate number of shares available for purchase under
the Stock Purchase Plan will therefore allow the Company to conduct future
Offerings under the Stock Purchase Plan with respect to 600,248 shares of its
Common Stock.
The Board of Directors recommends this action in order to continue to
provide a source of participation in the Company's equity in order to attract
and compensate talented personnel. The Board of Directors believes that because
the Stock Purchase Plan provides employees with the ability to purchase shares
of Common Stock at below market prices, the Stock Purchase Plan offers a
valuable benefit to the Company's employees and constitutes a significant
employment and performance incentive.
Making an additional 600,000 shares of Common Stock available for issuance
under the Stock Purchase Plan will result in additional potential dilution of
the Company's outstanding Common Stock. As of March 10, 2000, 20,615,207 shares
of Common Stock were outstanding and if all outstanding options and warrants
were exercised, and if all of the outstanding shares of each series of the
Company's convertible preferred stock were converted into Common Stock, the
number of outstanding shares would increase to 30,713,478.
Based solely on the closing price of the Common Stock as reported on the
American Stock Exchange (the "AMEX") on March 10, 2000 of $8.5625 per share, the
maximum aggregate market value of the 600,000 shares of Common Stock to be made
available for issuance under the Stock Purchase Plan would be $5,137,500.
THE STOCK PURCHASE PLAN
The Stock Purchase Plan, which is intended to qualify as an employee stock
purchase plan under Section 423 of the Internal Revenue Code of 1986 (the
"Code"), authorizes the grant of options to purchase Common Stock to eligible
employees during certain specified periods (each an "Offering"). Unless
otherwise determined by the SPP Committee, as defined below, Offerings under the
Stock Purchase Plan generally begin on January 1 and July 1 each year (each an
"Offering Date") and terminate
6
<PAGE>
on the last business day occurring on or before the following June 30 and
December 31, respectively (each an "Exercise Date").
There were originally 250,000 shares of Common Stock made available for
issuance upon the exercise of options granted under the Stock Purchase Plan. As
of December 31, 1999, a total of 249,752 shares of Common Stock had been
acquired by eligible employees through the exercise of options granted under the
Stock Purchase Plan.
PLAN ADMINISTRATION. The Stock Purchase Plan may be administered by the
Board of Directors or by a committee appointed by the Board of Directors (in
either case, the "SPP Committee"). The SPP Committee has full authority to make
rules and regulations for the administration of the Stock Purchase Plan, and its
interpretations and decisions with regard thereto shall be final and conclusive.
ELIGIBILITY. All employees of the Company (including employees who are also
directors of the Company) are eligible to participate in the Stock Purchase
Plan, provided that as of the first day of the applicable Offering they are
customarily employed by the Company or certain of its subsidiaries for more than
twenty hours per week and have completed at least three months of employment. As
of March 10, 2000, approximately 590 employees were eligible to participate in
the Stock Purchase Plan.
PARTICIPATION. Eligible employees elect to participate in the Stock
Purchase Plan by submitting an enrollment form to their payroll location at
least ten business days before any Offering. The enrollment form authorizes
automatic payroll deductions ranging from two percent (2%) to ten percent (10%)
of the employee's compensation. The Company will maintain book accounts showing
all payroll deductions made by each participant. Unless an employee files a new
enrollment form or withdraws from the Stock Purchase Plan, his or her deductions
and purchases will continue at the same percentage of compensation for future
Offerings.
OPTIONS AND PURCHASE OF SHARES. Options granted to each participant in the
Stock Purchase Plan during any Offering shall provide for a maximum of one
thousand (1,000) shares of Common Stock, or such other maximum number as the SPP
Committee shall have established prior to such Offering. The purchase price for
each share purchased under an option will be 85% of the fair market value of the
Common Stock on the Offering Date or the Exercise Date, whichever is less.
Notwithstanding the foregoing, no employee may be granted an option under the
Stock Purchase Plan if, immediately after the grant of options, such employee
would own shares possessing 5% or more of the total combined voting power or
value of all classes of shares of the Company or any subsidiary, after taking
into account outstanding options and certain attribution rules. In addition, no
employee may be granted an option under the Stock Purchase Plan which permits
his or her rights to purchase stock under the Stock Purchase Plan and any other
employee stock purchase plan of the Company or any subsidiary to accrue at a
rate which exceeds $25,000 of the fair market value of such stock (determined on
the option grant date) for each calendar year in which the option is outstanding
at any time.
Each participating employee as of each Exercise Date shall be deemed to have
exercised his or her option on such date and shall acquire from the Company such
number of whole shares of Common Stock as his or her accumulated payroll
deductions on such date will purchase at the Option Price. Any amount remaining
in an employee's account at the end of the Offering solely by reason of the
inability to purchase a fractional share will be carried forward to the next
Offering. Any other balance remaining in an employee's account at the end of an
Offering will be promptly refunded.
WITHDRAWAL AND TERMINATION OF EMPLOYMENT. An employee may withdraw from the
Stock Purchase Plan by delivering written notice to his payroll location and
thereafter the Company will promptly refund to him his or her entire account
balance under the Stock Purchase Plan. Partial withdrawals are not permitted.
Upon the termination of the employee's employment with the Company prior to the
last day of an Offering for any reason, no payroll deduction will be taken from
any amounts
7
<PAGE>
owing to such employee and the balance in his account will be paid to him or her
or, in the case of death, to his or her designated beneficiary.
AMENDMENT AND TERMINATION. The Stock Purchase Plan may be amended from time
to time by the SPP Committee or the Board of Directors; provided, however, that
without approval within twelve months of any such action by a majority of the
shareholders entitled to vote thereon, no amendment shall be made that either
increases the aggregate number of shares to be issued under the Stock Purchase
Plan or makes any other change that would require shareholder approval in order
for the Stock Purchase Plan to qualify as an "employee stock purchase plan"
under Section 423(b) of the U.S. Tax Code. The Stock Purchase Plan may be
terminated at any time by the SPP Committee. Upon any such termination all funds
held in accounts of participants shall be promptly refunded.
OTHER PROVISIONS
Rights under the Stock Purchase Plan are not transferable other than by will
or the laws of descent and distribution, and are exercisable only by the
employee during his or her lifetime.
Options granted under the Stock Purchase Plan may be subject to adjustment
in the event of a stock split, combination of shares, or dividends payable in
shares, or as the SPP Committee otherwise deems equitable.
All funds received or held by the Company under the Stock Purchase Plan may
be combined with other corporate funds and may be used for any corporate
purpose.
GRANTS OF OPTIONS UNDER PROPOSAL 3.
No options have been granted with respect to the additional 600,000 shares
of Common Stock proposed under this Proposal 3 to be made available for purchase
under the Stock Purchase Plan. The number of shares of Common Stock that will be
purchased by executive officers and non-executive officers under the Stock
Purchase Plan is only determinable at the end of each Offering under the Stock
Purchase Plan.
TAX ASPECTS OF THE STOCK PURCHASE PLAN UNDER THE U.S. INTERNAL REVENUE CODE
The following is a summary of the principal Federal income tax consequences
applicable to shares acquired under the Stock Purchase Plan. It does not
describe all Federal tax consequences under the Stock Purchase Plan, nor does it
describe state or local tax consequences.
Under Section 423(a) of the Code, the transfer of a share of Common Stock to
an employee pursuant to the Stock Purchase Plan will generally be entitled to
the benefits of Section 421(a) of the Code. Under that Section, an employee will
not be required to recognize income at the time the option is granted or at the
time the option is exercised. Since the option price applicable to any Offering
made under the Stock Purchase Plan will be less than the fair market value of
the Common Stock on the date of grant, if the holding periods described below
are met, upon the disposition of such Common Stock by the employee (or in the
event of the death of the employee while owning such Common Stock whether or not
the holding period requirements are met), the employee will recognize
compensation income (taxed as ordinary income) in an amount equal to the lesser
of (i) the excess of the fair market value of the Common Stock at the time of
such disposition or death over the amount paid for the Common Stock; or
(ii) the excess of the fair market value of the Common Stock on the date the
option was granted over an amount equal to 85% of the fair market value of the
Common Stock on the date the option was granted. Any additional gain or any loss
resulting from the disposition will be taxed as long-term capital gain or loss.
The Company will not be entitled to any deduction with respect to the Stock
Purchase Plan, except in connection with a disqualifying disposition as
discussed below.
8
<PAGE>
In order for an employee to receive the favorable tax treatment provided in
Section 421(a) of the Code, Section 423(a) requires that the employee make no
disposition of the Common Stock within two years from the date the option was
granted nor within one year from the date the option was exercised and the
Common Stock transferred to him. If an employee disposes of Common Stock
acquired pursuant to the Stock Purchase Plan before the expiration of these
holding period requirements, the employee will recognize, at the time of the
disposition, ordinary compensation income in an amount equal to the excess of
the fair market value of the Common Stock on the date the Common Stock was
purchased (i.e., the date the option was exercised) over the option price.
Notwithstanding the foregoing, if the employee is subject to Section 16 of the
Securities Exchange Act of 1934 (the "Exchange Act") at the time of the
disqualifying disposition, the time of recognition of income will be postponed
as long as the sale of the shares could subject the employee to suit for "short
swing profit," unless the employee elects to be taxed immediately. In addition,
the amount of income recognized will be the lesser of (i) the difference between
the option price and the fair market value of such shares at the end of the
postponement period (rather than at the date of exercise) and (ii) the total
amount of gain realized on the sale. The amount recognized as ordinary
compensation income will increase the employee's basis in such shares. Any gain
or loss resulting from the disposition (i.e., the difference between the amount
received by the employee and the employee's basis in the transferred shares)
will be taxed as capital gain or loss. At the time of the disposition, the
Company would be allowed a deduction equal to the amount included in the
employee's income as ordinary compensation income.
VOTE REQUIRED
To approve the Increase in Shares under Stock Purchase Plan Proposal, the
affirmative vote of a majority of Common Stock votes cast at the Annual Meeting
is required.
The Board of Directors believes that the Increase in Shares under Stock
Purchase Plan Proposal is in the best interest of the Company and its
shareholders, and accordingly, recommends that the shareholders vote "FOR" the
Increase in Shares under Stock Purchase Plan Proposal.
PROPOSAL 4
ADOPTION OF 2000 OPTION PLAN PROPOSAL
The Company's Board of Directors recommends that the Company adopt the
Inverness Medical Technology, Inc. 2000 Stock Option and Grant Plan, the form of
which is attached to this proxy statement as Attachment A (the "2000 Option
Plan"). The 2000 Option Plan, as further described below, will permit the Board
of Directors to grant stock options, stock appreciation rights and stock awards
with respect to 750,000 shares of Common Stock. The Company proposes the
approval and adoption of the 2000 Option Plan (the "2000 Option Plan Proposal")
by the holders of the Company's Common Stock.
The Board of Directors recommends this action in order to continue to
provide a source of participation in the Company equity to attract and
compensate talented personnel. The Board of Directors believes that equity
participation promotes growth and provides a meaningful incentive to employees
of successful companies.
The Company currently has in place the 1996 Option Plan under which
2,250,000 shares of Common Stock are available for issue. However, as of
February 15, 2000, options to purchase, or other awards of, 1,901,520 shares of
Common Stock have been granted and remain outstanding under the 1996 Option
Plan, meaning that only 348,480 shares remain available for grant thereunder.
However, the Board of Directors believes that, given the Company's commitment to
growth, it will require at least an additional 750,000 shares available for the
issuance of stock options if it is to provide adequate incentives to current and
prospective employees and key persons over the next five years.
9
<PAGE>
The Board of Directors therefore recommends that the 2000 Option Plan be
adopted to supplement the 1996 Option Plan. The 2000 Option Plan will have terms
similar to those of the 1996 Option Plan. However, the 1996 Option Plan, as a
qualified incentive stock option plan, only permits grants for ten years from
the date of adoption and will expire in 2006. The Board of Directors therefore
recommends adoption of the 2000 Option Plan, which will permit the grant of
options into the year 2010, rather than further increasing the number of shares
available under the 1996 Option Plan.
Making 750,000 shares of the Common Stock available for issuance under the
2000 Option Plan will result in additional potential dilution of the Company's
outstanding Common Stock. As of March 10, 2000, 20,615,207 shares of Common
Stock were outstanding and if all outstanding options and warrants were
exercised, and if all of the outstanding shares of each series of the Company's
convertible preferred stock were converted into Common Stock, the number of
outstanding shares would increase to 30,713,478.
Based solely on the closing price of Common Stock as reported on the AMEX on
March 10, 2000 of $8.5625 per share, the maximum aggregate market value of the
750,000 shares of Common Stock to be made available for issuance under the 2000
Option Plan would be $6,421,875.
THE 2000 OPTION PLAN
PLAN ADMINISTRATION; ELIGIBILITY. The 2000 Option Plan contemplates that
the Company will authorize the issuance of up to 750,000 shares of Common Stock
thereunder. The 2000 Option Plan will be administered by a committee of 2
non-employee directors appointed by the Board of Directors (the
"Administrator").
The Administrator has full power to select, from among the eligible
participants, the individuals to whom awards will be granted, to make any
combination of awards to participants, and to determine the specific terms and
conditions of each award, subject to the provisions of the 2000 Option Plan. The
Administrator may permit Common Stock, and other amounts payable pursuant to an
award, to be deferred. In such instances, the Administrator may permit interest,
dividend or deemed dividends to be credited to the amount of deferrals. The
Administrator may also delegate to the Chief Executive Officer all or part of
its duties with respect to awards to individuals who are not subject to the
reporting or other provisions of Section 16 of the Exchange Act or "covered
persons" within the meaning of Section 162(m) of the Code.
Persons eligible to participate in the 2000 Option Plan are those employees
and other key persons, such as directors and consultants, of the Company and its
subsidiaries who are responsible for or contribute to the management, growth or
profitability of the Company and its subsidiaries, as selected from time to time
by the Administrator. As of March 10, 2000, approximately 667 employees would be
eligible to participate in the 2000 Option Plan.
STOCK OPTIONS. The 2000 Option Plan permits the granting of (i) options to
purchase Common Stock intended to qualify as incentive stock options ("Incentive
Options") under Section 422 of the Code, and (ii) options that do not so qualify
("Non-Qualified Options"). The option exercise price of each option will be
determined by the Administrator but may not be less than 100% of the fair market
value of the Common Stock on the date of grant in the case of incentive stock
options, and may not be less than 85% of the fair market value of the Common
Stock on the date of grant in the case of Non-Qualified Options. However,
employees participating in the 2000 Option Plan may elect, with the consent of
the Administrator, to receive discounted Non-Qualified Options in lieu of cash
bonuses. In the case of such grants, the option exercise price must be at least
50% of the fair market value of the Common Stock on the date of grant.
The term of each option will be fixed by the Administrator and may not
exceed ten years from the date of grant in the case of an Incentive Option. The
Administrator will determine at what time or times each option may be exercised
and, subject to the provisions of the 2000 Option Plan, the period of time, if
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<PAGE>
any, after retirement, death, disability or termination of employment during
which options may be exercised. Options may be made exercisable in installments,
and the exercisability of options may be accelerated by the Administrator.
Upon exercise of options, the option exercise price must be paid in full
either in cash or by certified or bank check or other instrument acceptable to
the Administrator or, if the Administrator so permits, by delivery of shares of
Common Stock already owned by the optionee. The exercise price may also be
delivered to the Company by a broker pursuant to irrevocable instructions to the
broker from the optionee.
At the discretion of the Administrator, stock options granted under the 2000
Option Plan may include a "re-load" feature pursuant to which an optionee
exercising an option by the delivery of shares of Common Stock would
automatically be granted an additional stock option (with an exercise price
equal to the fair market value of the Common Stock on the date the additional
stock option is granted) to purchase that number of shares of Common Stock equal
to the number delivered to exercise the original stock option. The purpose of
this feature is to enable participants to maintain an equity interest in the
Company without dilution.
To qualify as Incentive Options, options must meet additional Federal tax
requirements, including limits on the value of shares subject to Incentive
Options which first become exercisable in any one calendar year, and a shorter
term and higher minimum exercise price in the case of certain significant
shareholders.
The 2000 Option Plan also provides that stock options and stock appreciation
rights with respect to no more than 500,000 shares of Common Stock (subject to
adjustment for stock splits and similar events) may be granted to any one
individual during any one-calendar year period.
STOCK APPRECIATION RIGHTS. The Administrator may award a stock appreciation
right ("SAR") either as a freestanding award or in tandem with a stock option.
Upon exercise of the SAR, the holder will be entitled to receive an amount equal
to the excess of the fair market value on the date of exercise of one share of
Common Stock over the exercise price per share specified in the related stock
option (or, in the case of a freestanding SAR, the price per share specified in
such right, which price may not be less than 85% of the fair market value of the
Common Stock on the date of grant) times the number of shares of Common Stock
with respect to which the SAR is exercised. This amount may be paid in cash,
Common Stock, or a combination thereof, as determined by the Administrator. If
the SAR is granted in tandem with a stock option, exercise of the SAR cancels
the related option to the extent of such exercise.
RESTRICTED STOCK. The Administrator may also award shares of Common Stock
to eligible persons subject to such conditions and restrictions as the
Administrator may determine ("Restricted Stock"). These conditions and
restrictions may include the achievement of certain performance goals and/or
continued employment with the Company through a specified restricted period. The
purchase price of shares of Restricted Stock will be determined by the
Administrator. If the performance goals or other restrictions are not attained,
the employees will forfeit their awards of Restricted Stock.
UNRESTRICTED STOCK. The Administrator may also grant shares (at no cost or
for a purchase price determined by the Administrator) which are free from any
restrictions under the 2000 Option Plan ("Unrestricted Stock"). Unrestricted
Stock may be issued to eligible persons in recognition of past services or other
valid consideration, and may be issued in lieu of cash bonuses to be paid to
such employees and key persons.
Subject to the consent of the Administrator, an employee or key person of
the Company may make an irrevocable election to receive a portion of his
compensation in Unrestricted Stock (valued at fair market value on the date the
cash compensation would otherwise be paid).
PERFORMANCE SHARE AWARDS. The Administrator may also grant performance
share awards to eligible persons of the Company or any subsidiary entitling the
recipient to receive shares of
11
<PAGE>
Common Stock upon the achievement of individual or Company performance goals and
such other conditions as the Administrator shall determine ("Performance Share
Award").
DIVIDEND EQUIVALENT RIGHTS. The Administrator may grant dividend equivalent
rights, which entitle the recipient to receive credits for dividends that would
be paid if the grantee had held specified shares of Common Stock. Dividend
equivalent rights may be granted as a component of another award or as a
freestanding award. Dividend equivalents credited under the 2000 Option Plan may
be paid currently or be deemed to be reinvested in additional shares of Common
Stock, which may thereafter accrue additional dividend equivalents at fair
market value at the time of deemed reinvestment or on the terms then governing
the reinvestment of dividends under the Company's dividend reinvestment plan, if
any. Dividend equivalent rights may be settled in cash, shares, or a combination
thereof, in a single installment or installments, as specified in the award.
Awards payable in cash on a deferred basis may provide for crediting and payment
of interest equivalents.
ADJUSTMENTS FOR STOCK DIVIDENDS, MERGERS, ETC. The Administrator will make
appropriate adjustments in outstanding awards to reflect stock dividends, stock
splits and similar events. In the event of a merger, liquidation, sale of the
Company or similar event, the Administrator, in its discretion, may provide for
substitution or adjustments of outstanding options and SARs, or may terminate
all unexercised options and SARs with or without payment of cash consideration.
AMENDMENTS AND TERMINATION. The Board of Directors may at any time amend or
discontinue the 2000 Option Plan and the Administrator may at any time amend or
cancel outstanding awards for the purpose of satisfying changes in the law or
for any other lawful purpose. However, no such action may be taken which
adversely affects any rights under outstanding awards without the holder's
consent. Further, amendments to the 2000 Option Plan shall be subject to
approval by the Company's shareholders if and to the extent required by the Code
to preserve the qualified status of Incentive Options.
CHANGE OF CONTROL PROVISIONS. The 2000 Option Plan provides that in the
event of a "Change of Control" (as defined in the 2000 Option Plan) of the
Company, all stock options and SARs shall automatically become fully
exercisable. In addition, at any time prior to or after a Change of Control, the
Administrator may accelerate awards and waive conditions and restrictions on any
awards to the extent it may determine appropriate.
GRANTS OF OPTIONS UNDER PROPOSAL 4.
No grants have been made with respect to the 750,000 shares of Common Stock
proposed under this Proposal 4 to be available for issuance under the 2000
Option Plan. The number of shares of Common Stock that may be granted to
executive officers, directors and other employees is indeterminable at this
time, as such grants are subject to the discretion of the Administrator.
TAX ASPECTS OF THE 2000 OPTION PLAN UNDER THE U.S. INTERNAL REVENUE CODE
The following is a summary of the principal Federal income tax consequences
of option grants under the 2000 Option Plan. It does not describe all Federal
tax consequences under the 2000 Option Plan, nor does it describe state or local
tax consequences.
INCENTIVE OPTIONS
Under the Code, an employee will not realize taxable income by reason of the
grant or the exercise of an Incentive Option. If an employee exercises an
Incentive Option and does not dispose of the shares until the later of (a) two
years from the date the option was granted or (b) one year from the date the
shares were transferred to the employee, the entire gain, if any, realized upon
disposition of such shares will be taxable to the employee as long-term capital
gain, and the Company will not be entitled to any deduction.
12
<PAGE>
If an employee disposes of the shares within such one-year or two-year period in
a manner so as to violate the holding period requirements, the employee
generally will realize ordinary income in the year of disposition, and the
Company will receive a corresponding deduction in an amount equal to the excess
of (1) the lesser of (x) the amount, if any, realized on the disposition and
(y) the fair market value of the shares on the date the option was exercised
over (2) the option price. Any additional gain realized on the disposition of
the shares acquired upon exercise of the option will be long-term or short-term
capital gain and any loss will be long-term or short-term capital loss depending
upon the holding period for such shares. The employee will be considered to have
disposed of his shares if he sells, exchanges, makes a gift of or transfers
legal title to the shares (except by pledge or by transfer on death). If the
disposition of shares is by gift and violates the holding period requirements,
the amount of the employee's ordinary income (and the Company's deduction) is
equal to the fair market value of the shares on the date of exercise less the
option price. If the disposition is by sale or exchange, the employee's tax
basis will equal the amount paid for the shares plus any ordinary income
realized as a result of the disqualifying distribution. The exercise of an
Incentive Option may subject the employee to the alternative minimum tax.
Special rules apply if an employee surrenders shares of Common Stock in
payment of the exercise price of his Incentive Option.
An Incentive Option that is exercised by an employee more than three months
after an employee's employment terminates will be treated as a Non-Qualified
Option for Federal income tax purposes. In the case of an employee who is
disabled, the three-month period is extended to one year and in the case of an
employee who dies, the three-month employment rule does not apply.
NON-QUALIFIED OPTIONS
There are no Federal income tax consequences to either the optionee or the
Company on the grant of a Non-Qualified Option. On the exercise of a
Non-Qualified Option, the optionee has taxable ordinary income equal to the
excess of the fair market value of the Common Stock received on the exercise
date over the option exercise price for the shares. The optionee's tax basis for
the shares acquired upon exercise of a Non-Qualified Option is increased by the
amount of such taxable income. The Company will be entitled to a Federal income
tax deduction in an amount equal to such excess. Upon the sale of the shares
acquired by exercise of a Non-Qualified Option, the optionee will realize
long-term or short-term capital gain or loss depending upon his or her holding
period for such shares.
Special rules apply if an optionee surrenders shares of Common Stock in
payment of the exercise price of a Non-Qualified Option.
PARACHUTE PAYMENTS
The exercise of any portion of any option that is accelerated due to the
occurrence of a change of control may cause a portion of the payments with
respect to such accelerated options to be treated as "parachute payments" as
defined in the Code. Any such parachute payments may be non-deductible to the
Company, in whole or in part, and may subject the recipient to a non-deductible
20% federal excise tax on all or portion of such payments (in addition to other
taxes ordinarily payable).
LIMITATION ON COMPANY'S DEDUCTIONS
As a result of Section 162(m) of the Code, the Company's deduction for
certain awards under the 2000 Option Plan may be limited to the extent that the
Chief Executive Officer or other executive officer whose compensation is
required to be reported in the summary compensation table of the Company's proxy
statement receives compensation (other than performance-based compensation) in
excess of $1.0 million a year.
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<PAGE>
VOTE REQUIRED
To approve and adopt the 2000 Option Plan Proposal, the affirmative vote of
a majority of Common Stock votes cast at the Annual Meeting is required.
The Board of Directors believes that the 2000 Option Plan Proposal is in the
best interest of the Company and its shareholders, and accordingly, recommends
that the shareholders vote "FOR" the 2000 Option Plan Proposal.
PRINCIPAL SHAREHOLDERS
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following tables furnish information as to each class of the Company's
equity securities beneficially owned, as of February 1, 2000, by (i) each person
or entity known by the Company to own beneficially more than five percent of the
Common Stock, (ii) each director of the Company, (iii) each of the executive
officers and senior executives of the Company and (iv) all directors and
executive officers as a group.
COMMON STOCK
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP OF CLASS(2)
- --------------------------------------- --------------------- -----------
<S> <C> <C>
DIRECTORS, EXECUTIVE OFFICERS AND SENIOR EXECUTIVESplus
or minus
Ron Zwanziger........................................... 2,549,660(3) 11.31%
Willard L. Umphrey...................................... 1,175,596(4) 5.21%
John F. Levy............................................ 535,843(5) 2.38%
David Scott, Ph.D....................................... 419,833(6) 1.86%
Kenneth D. Legg, Ph.D................................... 413,768(7) 1.83%
Robert M. Oringer....................................... 376,638(8) 1.67%
Carol R. Goldberg....................................... 229,417(9) 1.02%
Jerry McAleer, Ph.D..................................... 221,144(10) *
Edward B. Roberts....................................... 162,319(11) *
Otto Wahl............................................... 152,019(12) *
Peter Townsend.......................................... 41,500(13) *
John Yonkin............................................. 32,280(14) *
Jeffrey A. Templer...................................... 0 *
John P. Alberico........................................ 0 *
Total of Directors and Executive Officers (13
persons).............................................. 6,157,998 27.30%
</TABLE>
- ------------------------
plus or minus As defined in EXECUTIVE COMPENSATION section of this Proxy
Statement
* Less than 1%
(1) Unless otherwise noted, the address of the listed persons or entities is c/o
Selfcare, Inc., 200 Prospect Street, Waltham, Massachusetts 02453.
(2) The number of shares of Common Stock outstanding used in calculating the
percentage for each listed person and the directors and executive officers
as a group includes the number of shares of Common Stock underlying options,
warrants and convertible securities held by such person or group that are
exercisable or convertible within 60 days from February 1, 2000, the date of
the above table, but excludes shares of Common Stock underlying options,
warrants or convertible securities held by any other person. The number of
shares of Common Stock issuable upon conversion of one share of Series C
Convertible Preferred Stock or Series E Convertible Preferred Stock is equal
to the aggregate stated value per share, plus accrued dividends through
February 1, 2000, divided by the
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<PAGE>
applicable conversion price. The conversion prices of the Series C
Convertible Preferred Stock and Series E Convertible Preferred were $1.8125
and $3.028, respectively.
(3) Includes options and warrants that are currently exercisable, or exercisable
within 60 days of February 1, 2000, to purchase up to 1,066,515 shares of
Common Stock as well as 318,435 shares issuable upon the conversion of 5,371
shares of Series C Convertible Preferred Stock and 78,782 shares of Common
Stock issuable upon the conversion of 2,220 shares of Series E Convertible
Preferred Stock. Mr. Zwanziger disclaims beneficial ownership of the
following shares included in the table: (1) 50,395 shares of Common Stock
issuable on conversion of 850 shares of Series C Convertible Preferred Stock
and 57,491 shares of Common Stock issuable on conversion of 1,620 shares of
Series E Convertible Preferred Stock, all owned by his spouse, (2) 390,000
shares of Common Stock held in trust for the benefit of his children where
he, his spouse and an unrelated individual serve as co-trustees, and
(3) 7,407 shares of Common Stock, 160,077 shares of Common Stock issuable
upon conversion of 2,700 shares of Series C Convertible Preferred Stock, and
21,291 shares of Common Stock issuable on conversion of 600 shares of
Series E Convertible Preferred Stock, all held in a trust for the benefit of
Mr. Zwanziger's children where his spouse is the sole trustee. The table
excludes 279,500 shares of Common Stock, 190,908 shares of Common Stock
issuable on conversion of 3,220 shares of Series C Convertible Preferred
Stock, and 26,971 shares of Common Stock issuable on conversion of 760
shares of Series E Convertible Preferred Stock, all held in trust for the
benefit of Mr. Zwanziger's family where neither he nor his spouse serve as
trustee.
(4) Includes options and warrants that are currently exercisable, or exercisable
within 60 days of February 1, 2000, to purchase up to 127,118 shares of
Common Stock and 191,044 shares of Common Stock issuable upon conversion of
3,222.33 shares of Series C Convertible Preferred Stock. Mr. Umphrey
disclaims beneficial ownership of 138,903 shares of Common Stock, warrants
to purchase an additional 20,193 shares of Common Stock, and 10,276 shares
of Common Stock issuable on conversion of 173.33 shares of Series C
Convertible Preferred Stock, all owned by his spouse. Mr. Umphrey also
disclaims beneficial ownership of 154,784 shares of Common Stock, warrants
to purchase an additional 4,494 shares of Common Stock, and 29,644 shares of
Common Stock issuable on conversion of 500 shares of Series C Convertible
Preferred Stock, all held in a retirement account for the benefit of
Mr. Leon Okurowski where Mr. Umphrey is a co-trustee.
(5) Includes options and warrants to purchase up to 35,975 shares of Common
Stock that are currently exercisable or exercisable within 60 days of
February 1, 2000 and 302,607 shares currently issuable upon the conversion
of 5,104 shares of Series C Convertible Preferred Stock.
(6) Includes options and warrants to purchase up to 323,870 shares of Common
Stock that are currently exercisable or exercisable within 60 days of
February 1, 2000.
(7) Includes options to purchase up to 203,946 shares of Common Stock that are
currently exercisable or exercisable within 60 days of February 1, 2000, and
14,822 shares of Common Stock issuable on conversion of 250 shares of
Series C Convertible Preferred Stock.
(8) Includes 88,932 shares of Common Stock issuable upon the conversion of 1,500
shares of Series C Convertible Preferred Stock.
(9) Includes options and warrants to purchase up to 112,163 shares of Common
Stock that are currently exercisable or exercisable within 60 days of
February 1, 2000, 17,134 shares of Common Stock issuable on conversion of
289 shares of Series C Convertible Preferred Stock and 35,488 shares of
Common Stock issuable on conversion of 1,000 shares of Series E Convertible
Preferred Stock.
(10) Includes options and warrants to purchase up to 191,500 shares of Common
Stock that are currently exercisable or exercisable within 60 days of
February 1, 2000. Also includes 29,644 shares of Common Stock issuable on
conversion of 500 shares of Series C Convertible Preferred Stock.
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<PAGE>
(11) Includes options and warrants to purchase up to 111,075 shares of Common
Stock that are currently exercisable or exercisable within 60 days of
February 1, 2000. Also includes 36,244 shares of Common Stock held by the
Roberts Family Trust, of which Mr. Roberts is a co-trustee, and 15,000
shares held in trust for the benefit of Mr. Roberts three children, of which
Mr. Roberts as co-trustee. Mr. Roberts disclaims beneficial ownership of all
of the shares held by the Roberts Family Trust and held in trust for the
benefit of his children.
(12) Includes options and warrants to purchase up to 114,229 shares of Common
Stock that are currently exercisable or exercisable within 60 days of
February 1, 2000. Also includes 26,616 shares of Common Stock issuable on
conversion of 750 shares of Series E Convertible Preferred Stock. Mr. Wahl
is included in the table only as a named executive officer pursuant to Item
402(a)(3)(iii) of Regulation S-K. Shares beneficially owned by Mr. Wahl were
therefore not included in calculating the beneficial ownership of the
directors and executive officers as a group.
(13) Represents options to purchase up to 41,500 shares of Common Stock which
are currently exercisable or exercisable within 60 days of February 1, 2000.
(14) Includes options to purchase up to 11,019 shares of Common Stock which are
currently exercisable or exercisable within 60 days of February 1, 2000, and
14,822 shares of Common Stock issuable on conversion of 250 shares of
Series C Convertible Preferred Stock.
SERIES C CONVERTIBLE PREFERRED STOCK
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP OF CLASS(2)
- --------------------------------------- --------------------- -----------
<S> <C> <C>
DIRECTORS, EXECUTIVE OFFICERS AND SENIOR EXECUTIVESplus
or minus
Ron Zwanziger.......................................... 5,371(3) 9.29%
John F. Levy........................................... 5,104 8.82%
Willard L. Umphrey..................................... 3,222.33(4) 5.57%
Robert M. Oringer...................................... 1,500 2.59%
Jerry McAleer, Ph.D.................................... 500 *
Carol R. Goldberg...................................... 289 *
Kenneth D. Legg, Ph.D.................................. 250 *
John Yonkin............................................ 250 *
David Scott, Ph.D...................................... 0 *
Edward B. Roberts...................................... 0 *
Peter Townsend......................................... 0 *
Jeffrey A. Templer..................................... 0 *
John P. Alberico....................................... 0 *
Otto Wahl.............................................. 0(5) *
Total of Directors and Executive Officers (13
persons)............................................. 16,486.33 28.50%
</TABLE>
- ------------------------
plus or minus As defined in EXECUTIVE COMPENSATION section of this Proxy
Statement
* Less than 1%
(1) Unless otherwise noted, the address of the listed persons or entities is c/o
Selfcare, Inc., 200 Prospect Street, Waltham, Massachusetts 02453.
(2) 57,842 shares of Series C Convertible Preferred Stock are outstanding as of
February 1, 2000. No option, warrants or other rights to acquire Series C
Convertible Preferred Stock have been granted and none are held in treasury.
(3) Mr. Zwanziger disclaims beneficial ownership of 850 shares of Series C
Convertible Preferred Stock owned by his spouse and 2,700 shares of
Series C Convertible Preferred Stock held in a trust for the
16
<PAGE>
benefit of Mr. Zwanziger's children where his spouse is the sole trustee,
all of which are included in the table. The table excludes 3,220 shares of
Series C Convertible Preferred Stock held in trust for the benefit of
Mr. Zwanziger's family where neither he nor his spouse serve as trustee.
(4) Mr. Umphrey disclaims beneficial ownership of 173.33 shares of Series C
Convertible Preferred Stock owned by his spouse and 500 shares of Series C
Convertible Preferred Stock held in a retirement account for the benefit of
Mr. Leon Okurowski where Mr. Umphrey is a co-trustee, all of which are
included in the table.
(5) Individual is included in the table only as a named executive officer
pursuant to Item 402(a)(3)(iii) of Regulation S-K and shares beneficially
owned by him were not included in calculating the beneficial ownership of
the directors and executive officers as a group.
SERIES E CONVERTIBLE PREFERRED STOCK
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP OF CLASS(2)
- --------------------------------------- --------------------- -----------
<S> <C> <C>
DIRECTORS, EXECUTIVE OFFICERS AND SENIOR EXECUTIVESplus
or minus
Ron Zwanziger.......................................... 2,220(3) 16.86%
Carol R. Goldberg...................................... 1,000 7.59%
Otto Wahl.............................................. 750(4) 5.70%
Willard L. Umphrey..................................... 0 *
David Scott, Ph.D...................................... 0 *
Kenneth D. Legg, Ph.D.................................. 0 *
Jerry McAleer, Ph.D.................................... 0 *
Robert M. Oringer...................................... 0 *
John F. Levy........................................... 0 *
Edward B. Roberts...................................... 0 *
Peter Townsend......................................... 0 *
John Yonkin............................................ 0 *
Jeffrey A. Templer..................................... 0 *
John P. Alberico....................................... 0 *
Total of Directors and Executive Officers (13
persons)............................................. 3,220 24.45%
</TABLE>
- ------------------------
plus or minus As defined in EXECUTIVE COMPENSATION section of this Proxy
Statement
* Less than 1%
(1) Unless otherwise noted, the address of the listed persons or entities is c/o
Selfcare, Inc., 200 Prospect Street, Waltham, Massachusetts 02453.
(2) 13,169 shares of Series E Convertible Preferred Stock were outstanding as of
February 1, 2000. No options, warrants or other rights to acquire Series E
Convertible Preferred Stock have been granted and none are held in treasury.
(3) Mr. Zwanziger disclaims beneficial ownership of 1,620 shares of Series E
Convertible Preferred Stock owned by his spouse and 600 shares of Series E
Convertible Preferred Stock held in a trust for the benefit of
Mr. Zwanziger's children where his spouse is the sole trustee, all of which
are included in the table. The table excludes 760 shares of Series E
Convertible Preferred Stock held in trust for the benefit of
Mr. Zwanziger's family where neither he nor his spouse serve as trustee.
(4) Individual is included in the table only as a named executive officer
pursuant to Item 402(a)(3)(iii) of Regulation S-K and shares beneficially
owned by him were not included in calculating the beneficial ownership of
the directors and executive officers as a group.
17
<PAGE>
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The executive officers and significant employees of the Company and their
ages are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- --------
<S> <C> <C>
EXECUTIVE OFFICERS
Ron Zwanziger............................. 46 Chairman, Chief Executive Officer and
President
David Scott, Ph.D. ....................... 43 Chairman, Inverness Medical Limited
Kenneth D. Legg, Ph.D. ................... 57 Executive Vice President and Secretary
Jerry McAleer, Ph.D. ..................... 45 Vice President, Research and Development,
Selfcare, Inc. & Inverness Medical Limited
Jeffrey A. Templer........................ 52 Chief Financial Officer and Treasurer
John P. Alberico.......................... 42 Managing Director, Inverness Medical
Limited
John Yonkin............................... 40 Vice President, Sales and Marketing
Robert Oringer............................ 40 President, Can-Am Care Corporation
SIGNIFICANT EMPLOYEES
Keith May, Ph.D. ......................... 46 Vice President, Research and Development
Inverness Medical Limited
Otto Wahl................................. 51 Managing Director, Selfcare International
GMBH
Emanuel Hart.............................. 49 President, Orgenics Limited
Gilbert Daggett........................... 51 U.S. National Sales Manager
Piet Moerman, M.D. ....................... 36 Director, Product Development
Diane M. Sullivan......................... 45 Director, Marketing Communications
</TABLE>
EXECUTIVE OFFICERS
RON ZWANZIGER, CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT.
Mr. Zwanziger has served as Chairman and Chief Executive Officer of the Company
since its inception. From 1981 to 1991, he was chairman and chief executive
officer of MediSense, a medical device company.
DAVID SCOTT, PH.D., CHAIRMAN, INVERNESS MEDICAL LIMITED. Dr. Scott has
served as Managing Director of Inverness Medical Limited from June 1995 to
July 1999, when he assumed the position of Chairman. Dr. Scott served as
Managing Director from October 1993, to April 1995, of Great Alarm Limited, a
consulting company. Previously, Dr. Scott held several positions from
October 1984, to September 1993, at MediSense UK, most recently as its managing
director where he was responsible for managing product development, as well as
the mass manufacture of one of its principal products, ExacTech.
KENNETH D. LEGG, PH.D., EXECUTIVE VICE PRESIDENT AND SECRETARY. Dr. Legg
joined the Company as Secretary and Vice President in charge of U.S. Operations
in November 1991. Dr. Legg recently assumed the position of Executive Vice
President of Selfcare, Inc. From 1987 to 1991, Dr. Legg was president of K.D.
Legg and Associates, a firm specializing in technical issues in the areas of
biomedical and scientific instrumentation, product development, and strategic
planning.
JERRY MCALEER, PH.D., VICE PRESIDENT, RESEARCH AND DEVELOPMENT,
SELFCARE, INC. AND INVERNESS MEDICAL LIMITED. Dr. McAleer joined Selfcare as
Director of Development of Inverness Medical Limited in 1995 and heads the
development of the electrochemical glucose strips. He has recently assumed the
positions of Vice President of Research and Development for Selfcare, Inc. and
Inverness Medical Limited. Prior to joining Selfcare, Dr. McAleer held senior
research and development positions at MediSense from 1985 to 1993 and more
recently, at Ecossensors, Inc., an
18
<PAGE>
environmental research company, where he was responsible for the development of
electrochemically based assay systems.
JEFFREY A. TEMPLER, CHIEF FINANCIAL OFFICER AND TREASURER. Mr. Templer
joined the Company to serve as its Chief Financial Officer and Treasurer on
September 15, 1999. Prior to joining Selfcare, Mr. Templer was Senior Vice
President and CFO of Aerovox, Inc, a manufacturer of electronic and electrical
components from 1996 to 1999. From 1985 to 1996 Mr. Templer was employed by the
Freudenberg Group, a diversified international manufacturer, where he served as
Vice President of Finance for North American operations until 1992, and
President and Chief Executive of Freudenberg Nonwovens LP from 1992 until 1995.
JOHN P. ALBERICO, MANAGING DIRECTOR, INVERNESS MEDICAL LIMITED.
Mr. Alberico joined Inverness Medical Limited in July 1999 to serve as its
Managing Director. From December 1998 to July 1999, Mr. Alberico served as Vice
President of Operations for Bionostics Inc., a privately held biotechnology
company based in Canada. Prior to December 1998, Mr. Alberico served as Vice
President of Manufacturing for Nova Biomedical Inc., another biotechnology
company. Nova Biomedical is a world technology leader in the development of
fast, whole blood analyzers and serves as a major contract manufacturer for
Selfcare, Inc.
JOHN YONKIN, VICE PRESIDENT, SALES AND MARKETING. Mr. Yonkin joined
Selfcare in October 1997 as Manger of Product Development. In October 1998, he
was appointed Vice President of U.S. Sales. From January 1995 to
September 1998, Mr. Yonkin was Director of National Accounts for Genzyme
Genetics, a subsidiary of Genzyme, Inc., a leader in Genetic testing services
for hospitals, physicians and managed healthcare companies. Previously
Mr. Yonkin worked for MediSense, a medical device company, in a number of
marketing and sales capacities.
ROBERT ORINGER, PRESIDENT, CAN-AM CARE CORPORATION. Mr. Oringer joined the
Company on February 18, 1998 upon the consummation of the Company's acquisition
of Can-Am. He is the President of Can-Am and has held that position since he
first joined the company in 1989. Can-Am is engaged in the distribution of
diabetes care products primarily to the U.S. retail market.
SIGNIFICANT EMPLOYEES
KEITH MAY, PH.D., VICE PRESIDENT, RESEARCH AND DEVELOPMENT, INVERNESS
MEDICAL LIMITED. Dr. May joined Inverness Medical Limited in December 1999.
Prior to joining Inverness Medical, Dr. May served, since 1987, as Vice
President of Research and Development for Unipath, a leader in women's health
products and technologies. Unipath is a wholly owned subsidiary of Unilever, an
international consumer products conglomerate.
OTTO WAHL, MANAGING DIRECTOR, SELFCARE INTERNATIONAL GMBH. Mr. Wahl has
been Managing Director of Selfcare International GmbH since April 1995. Prior to
joining Selfcare, Mr. Wahl was the managing director for MediSense in Germany,
Austria and Switzerland and area manager for Eastern Europe from January 1990 to
March 1995.
EMANUEL HART, PRESIDENT, ORGENICS LIMITED. Mr. Hart joined Orgenics in
May 1998 as President and Chief Executive Officer. Previously he worked for
I.S.O.S., an international security business, from September 1996 to May, 1998.
Prior to his employment at I.S.O.S., he was a Brigadier General in the Israel
Defense Forces from 1968 to 1996.
GILBERT DAGGETT, U.S. NATIONAL SALES MANAGER. Mr. Daggett joined Selfcare
in 1994 as U.S. National Sales Director. From 1983 to 1992, Mr. Daggett was
eastern director of sales for LifeScan, a unit of Johnson & Johnson which
currently markets the Company's FastTAKE-Registered Trademark- blood glucose
system.
PIET MOERMAN, M.D., DIRECTOR, PRODUCT DEVELOPMENT. Dr. Moerman joined
Selfcare as General Manager for the Benelux countries and France in 1994. Prior
to joining the Company,
19
<PAGE>
Dr. Moerman held various positions at MediSense from October 1989 to
April 1994, including product manager (Europe), business development manager and
marketing manager (Europe-West).
DIANE M. SULLIVAN, DIRECTOR, MARKETING COMMUNICATIONS. Ms. Sullivan has
served as Director of Marketing since 1994. From 1991 to 1994, Ms. Sullivan was
a consultant to the Company and other clients. She was marketing manager at
MediSense from 1988 to 1991.
Each officer serves at the discretion of the Board of Directors. There are
no family relationships among any of the directors and executive officers of the
Company.
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the last three completed
fiscal years for the Company's Chief Executive Officer, its four most highly
compensated executive officers (other than the Chief Executive Officer) whose
total annual salary and bonus exceeded $100,000 in fiscal 1999, and two
additional individuals who would have been among the Company's four most highly
compensated executive officers but for the fact that they were not serving as
executive officers at the end of the last completed fiscal year (the Chief
Executive Officer and such other current and former executive officers are
hereinafter referred to as the "Senior Executives"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------------------ ------------
SECURITIES
UNDERLYING ALL OTHER
YEAR SALARY BONUS OPTIONS COMPENSATION
-------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Ron Zwanziger........................... 1999 $271,273 -- 500,000(1) --
Chairman, President and 1998 193,536(2) -- 6,491(3) --
Chief Executive Officer 1997 202,213 -- -- --
David Scott............................. 1999 193,040 -- 250,000(1) --
Chairman, 1998 133,826 -- 124,183(4) --
Inverness Medical Limited 1997 96,445 -- -- --
Kenneth D. Legg, Ph.D................... 1999 180,980 -- 150,000(1) --
Executive Vice President 1998 135,360(2) -- 74,438(5) --
and Secretary 1997 137,066 -- -- --
Otto Wahl............................... 1999 178,944(6) -- -- --
Managing Director, 1998 170,947(7) -- 5,479(3) --
Selfcare International GMBH 1997 186,624 -- -- --
Jerry McAleer, Ph.D..................... 1999 175,337(8) -- 200,000(1) --
Vice President, R&D 1998 126,783(9) -- 124,183 --
Selfcare, Inc. and Inverness Medical 1997 127,030 -- -- --
Robert Oringer.......................... 1999 150,000 -- 6,000 --
President, Can Am Care Corporation 1998 130,000(10) -- -- --
1997 -- -- -- --
John Yonkin............................. 1999 136,667 -- 12,000 --
Vice President, Sales and Marketing 1998 95,000 -- 23,019(11) --
1997 16,667(12) -- 6,000 --
</TABLE>
- ------------------------
(1) These options were granted on August 16, 1999, will become exercisable on
August 15, 2006 and will expire on August 16, 2009. The option exercise
price for such options is $5.00. A portion or all of the options shall vest
earlier than August 15, 2006 at the end of any year in which the Company
achieves certain profit goals or market price goals in any year. See the
COMPENSATION COMMITTEE
20
<PAGE>
REPORT ON EXECUTIVE COMPENSATION section of this Proxy Statement for a
further description of the early vesting provisions of these options.
(2) The decrease in salary for Ken Legg and Ron Zwanziger in 1998 was the result
of a 20% temporary involuntary salary reduction in the first two quarters of
1998. The underlying salary was actually the same in 1997 and 1998.
(3) Options were granted in exchange for the reduction in salary in 1998
referred to in footnotes (2) and (7), respectively. Such options were
granted on January 5, 1998, became exercisable on July 5, 1998 and will
expire on January 5, 2008. The option exercise price for such options is
$9.9375.
(4) 4,183 of the 124,183 options listed were granted in exchange for a 20%
temporary involuntary reduction in salary in the first two quarters of 1998.
Such options were granted on January 5, 1998, became exercisable on July 5,
1998 and will expire on January 5, 2008. The option exercise price for such
options is $9.9375.
(5) 4,438 of the 74,438 options listed were granted in exchange for the
reduction in salary in 1998 referred to in footnotes (2). Such options were
granted on January 5, 1998, became exercisable on July 5, 1998 and will
expire on January 5, 2008. The option exercise price for such options is
$9.9375.
(6) Salary consists of DM 240,000 times an exchange rate of .5456 (representing
the average exchange rate for 1999), or $130,944, plus additional
compensation under a consulting agreement with the Company of $48,000.
Mr. Wahl was formerly considered an Executive Officer of the Company as that
term is defined by the Securities and Exchange Commission. Mr. Wahl is
included as a Senior Executive pursuant to Item 402(a)(3)(iii).
(7) The decrease is the result of currency translation from German Deutsche
Marks to U.S. dollars, as well as a 20% temporary involuntary salary
reduction in the first two quarters of 1998. The underlying salary was
actually the same in 1997 and 1998.
(8) Salary consists of LStg 108,333 times an exchange rate of 1.6185
(representing the average exchange rate for 1999). Dr. McAleer has only
recently assumed the status of Executive Officer as that term is defined by
the Securities and Exchange Commission. Dr. McAleer is included as a Senior
Executive pursuant to Item 402(a)(3)(iii).
(9) The decrease in salary for 1998 was the result of a 20% temporary
involuntary salary reduction in the first two quarters of 1998 in exchange
for which Dr. McAleer received an option to purchase 4,183 shares of the
Company's common stock.
(10) Robert Oringer was not employed by the Company until it acquired Can-Am
Care Corporation in February 1998.
(11) 3,019 of the 23,019 options listed were granted in exchange for a reduction
in salary in 1998. Such options were granted on January 5, 1998, became
exercisable on July 5, 1998 and will expire on January 5, 2008. The option
exercise price for such options is $9.9375.
(12) John Yonkin joined the Company on November 5, 1997.
21
<PAGE>
OPTION GRANTS
The following table sets forth certain information concerning grants of
stock options made during fiscal 1999 to the Company's executive officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL RATES
NUMBER OF TOTAL OPTIONS OF STOCK PRICE
SECURITIES GRANTED EXERCISE APPRECIATION
UNDERLYING TO EMPLOYEES PRICE EXPIRATION --------------------------
OPTIONS GRANTED IN FISCAL YEAR PER SHARE DATE(1) 5% 10%
--------------- -------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ron Zwanziger............. 500,000(3) 29.0% $5.0000 8/16/09 $ 0(2) $580,069
David Scott............... 250,000(3) 14.5% $5.0000 8/16/09 $ 0(2) $290,035
Jerry McAleer, Ph.D....... 200,000(3) 11.6% $5.0000 8/16/09 $ 0(2) $232,028
Kenneth D. Legg, Ph.D..... 150,000(3) 8.7% $5.0000 8/16/09 $ 0(2) $174,021
John T. Yonkin............ 6,000(4) 0.3% $3.1250 9/17/09 $11,792 $ 29,883
John T. Yonkin............ 6,000(5) 0.3% $3.3125 12/9/09 $12,499 $ 31,676
Robert Oringer............ 6,000(6) 0.3% $3.3125 12/9/09 $12,499 $ 31,676
</TABLE>
- ------------------------
1. Unless otherwise indicated, the expiration date of an option is the tenth
anniversary of the date on which the option was originally granted. The
exercisability of these options is accelerated upon the occurrence of a
change in control (as defined in the 1996 Option Plan).
2. The potential realizable dollar value calculation set forth in Instruction 7
to Item 402(c) of Regulation S-K results in a negative number meaning that
the option would not be exercised and the potential realizable value to the
option holder is zero.
3. These options were granted on August 16, 1999 and will become exercisable on
August 15, 2006. The closing market price for the Common Stock on
August 16, 1999 was $2.375. A portion or all of the options shall vest
earlier than August 15, 2006 at the end of any year in which the Company
achieves certain profit goals or its Common Stock achieves certain market
price goals in any year. See the COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION section of this Proxy Statement for a further description of
the early vesting provisions of these options.
4. These options were granted on September 17, 1999 and are exercisable in four
equal annual installments commencing on September 17, 2000. The closing
market price for the Common Stock on September 17, 1999 was $3.125.
5. These options were granted on December 9, 1999 and are exercisable in four
equal annual installments commencing on December 9, 2000. The closing market
price for the Common Stock on December 9, 1999 was $3.3125.
6. These options were granted on December 9, 1999 and are exercisable in four
equal annual installments commencing on December 9, 2000. The closing market
price for the Common Stock on December 9, 1999 was $3.3125.
* Except for the options described in notes 3 and 6 above, all options listed
in the table above are intended to qualify as incentive stock options under
the Internal Revenue Code of 1986, as amended.
22
<PAGE>
YEAR END OPTION VALUES
The following table sets forth certain information concerning exercises of
stock options during fiscal 1999 by each of the Senior Executives and the number
and value of unexercised options held by each of the Senior Executives on
December 31, 1999:
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SHARES UNEXERCISED
UNDERLYING IN-THE-MONEY
NUMBER OPTIONS AT OPTIONS AT
OF SHARES FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------------- ------------------
<S> <C> <C> <C> <C>
Ron Zwanziger........................... -- -- 1,066,515/500,000 $833,626/$0
David Scott............................. -- -- 323,870/302,500 $256,936/$0
Kenneth D. Legg, Ph.D................... -- -- 203,946/202,500 $97,092/$0
Jerry McAleer, Ph.D..................... -- -- 191,500/265,000 $116,270/$0
Otto Wahl............................... -- -- 114,229/18,750 $90,090/$0
Robert Oringer.......................... -- -- 0/6,000 $0/$0
John Yonkin............................. -- -- 11,019/30,000 $378/$0
</TABLE>
- ------------------------
1. Based on the fair market value of the Common Stock as of December 31, 1999
($3.1875 per share), the closing price of the Common Stock as reported on
the AMEX on such date, less the option exercise price, multiplied by the
number of shares underlying the options.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In establishing the annual salary and incentive payments for the Company's
Chief Executive Officer ("CEO") and senior management (for purposes of this
section, the "Executive Officers") who report directly to the CEO, the
Compensation Committee of the Board of Directors generally applies the following
guidelines:
a) Annual base salary for each individual will generally be near the average
for the particular peer group from comparable companies for that individual.
Annually, the CEO will review the base salary for each Executive Officer and
recommend appropriate adjustments to the Compensation Committee.
b) Cash bonus paid for achieving agreed performance measures will bring the
individual to the top 10% of the cash compensation of the particular peer group
for each individual.
c) Stock related incentives for achieving specified performance measures
need to be significant and meaningful to that individual.
d) For the Executive Officers there will be group goals only. This is to
help foster interaction between the complimentary but dispersed operations of
the growing organization.
e) The incentive payments (cash or stock), if the specified performance
measures have been achieved within the management team, should not be the same
for each individual but should reflect the Executive Officer's relative value to
the Company.
f) The group goals for the Executive Officers do not necessarily have to be
the same goals as for the CEO.
23
<PAGE>
g) Each year (or every two years if a two year plan is in place, but the
targets shall nevertheless be annual) prior to or shortly after the start of the
fiscal year, the CEO will present a plan to the Compensation Committee with
suggested performance targets for the Executives for the subsequent year or two
years. The plan will include a specific proposal with respect to stock-based
incentives but may omit a cash bonus recommendation. In such event, the
Compensation Committee may change the plan to provide for awards of cash bonuses
if and when specified goals are met. Following discussion and any changes, the
Compensation Committee will recommend to the Board of Directors approval of a
plan and the performance targets.
h) Each year (or every two years if a two year plan is in place) the
Compensation Committee will determine, prior to or shortly after the start of
the subsequent year, the performance targets and specific stock-based incentives
for the CEO and recommend approval of the plan to the full Board of Directors.
Any cash bonuses will be determined separately from time to time. The
determination of cash bonuses may be tied to individual performance as well as
achievement of performance targets. The Compensation Committee will review the
base salary of the CEO annually.
i) The performance targets referred to in paragraphs (g) and (h) above may
include both numeric targets including increases in the market price of the
Common Stock and descriptive business objectives. These targets may be varied
subsequently at the recommendation of the Compensation Committee and with the
approval of the Board of Directors if the Company has undergone significant
positive change rendering the previous targets meaningless, weakened or counter
productive.
Relying on published data from recognized compensation specialists, the
Compensation Committee recommended, and the Company's Board of Directors
approved, compensation levels in 1999 for Ron Zwanziger, the Company's CEO, and
certain of the Executive Officers, based on levels established in comparable
companies.
Upon consideration of the guidelines described above, and relying on
published data from recognized compensation specialists, the Compensation
Committee recommended as of August 13, 1999, and the Board of Directors
subsequently approved, the following actions relating to the compensation of
certain Executive Officers:
- To hire John Alberico as Managing Director of Inverness Medical, Ltd., at
an annual salary of $200,000, plus a signing bonus of $50,000, an
incentive bonus plan of up to $50,000 annually, and options to purchase up
to 80,000 shares of Common Stock, to vest in four equal annual
installments, under the 1996 Option Plan.
- To establish annual salaries for Ron Zwanziger, Kenneth Legg, David Scott
and Jerry McAleer at $350,000, $200,000, $230,000 and $200,000,
respectively.
- To grant to Mr. Zwanziger, Mr. Legg, Mr. Scott and McAleer, respectively,
non-qualified stock options to purchase up to 500,000, 150,000, 250,000
and 200,000 shares of Common Stock under the 1996 Option Plan (the
"Incentive Options"). The Incentive Options shall fully vest seven years
from the date of grant; provided that a portion or all of said options
shall vest on December 31, 2000, 2001, 2002 or 2003 if, during any such
year, the Company achieved certain profit goals or the Common Stock
achieved certain market price goals (the "Goals"). In the event that Goals
are achieved early vesting shall occur as follows:
<TABLE>
<S> <C> <C> <C> <C>
Goal achieved by end of:.................. 2000 2001 2002 2003
Percentage of Incentive Options vesting
early at end of year if a Goal is
achieved in that year................... 100% 75% 50% 25%
</TABLE>
The Incentive Options will fully vest on December 31, 2000 if the average
trading price for a share of the Company's common stock during any 30 day
period exceeds $8.50. As of March 10, 2000 the
24
<PAGE>
price for a share of the Company's common stock was $8.5625. The Incentive
Options were granted as Non-Qualified rather than Incentive Stock Options.
EMPLOYMENT AGREEMENTS
The Company has employment agreements with several of its named executive
officers.
Under the terms of his employment agreement dated October 15, 1991, Kenneth
D. Legg, Ph.D. has been granted shares of Common Stock. The terms of Dr. Legg's
employment agreement also contains a non-competition provision whereby Dr. Legg
agrees not to compete with or hire any consultants or employees employed by the
Company for a period of one year after the termination of his employment.
Under the terms of an employment agreement dated February 18, 1998, between
Inverness Medical, Inc. ("IMI", formerly known as Selfcare Consumer
Products, Inc.), a subsidiary of the Company, and Robert Oringer, Mr. Oringer
shall serve as President of Can-Am and is entitled to receive an annual salary
of $150,000, subject to annual reviews, for a term of three years. Mr. Oringer
is also eligible for bonuses and cash and non-cash compensation customarily
awarded by IMI and the Company to senior executives of IMI and the Company.
Under the Agreement, Mr. Oringer may spend up to five hours per week performing
services for A.M.G. Medical Inc. ("AMG Medical"). For a description of AMG
Medical, see the section below entitled "Certain Transactions." This agreement
also prohibits Mr. Oringer from directly or indirectly competing with or
soliciting employees from Can-Am and the Company for a period of two years from
the date he ceases to work for Can-Am.
Pursuant to the service contract employment agreement, dated November 13,
1994, and a supplemental agreement dated October 30, 1995, between Otto Wahl and
Selfcare International GmbH ("Selfcare International"), a wholly-owned
subsidiary of the Company, Mr. Wahl was appointed Vice President, Managing
Director for Sales and Marketing of Selfcare International at a monthly salary
of DM20,000 until February 9, 1996, and thereafter at an annual salary of
DM240,000. In addition, Mr. Wahl has agreed to make himself available to provide
consulting services for selling activities in the United States and elsewhere
for which he receives $4,000 per month. Under the terms of his employment
agreement, Mr. Wahl is also entitled to a car for business and personal use for
which lease payments, insurance payments and maintenance costs are paid by the
Company, and a profit-linked bonus of at least DM40,000 after February 9, 1996.
Under the terms of his employment agreement, Mr. Wahl has also been granted
options to purchase 52,000 shares of Common Stock. The terms of Mr. Wahl's
employment agreement also contain a non-competition provision whereby Mr. Wahl
agrees not to render any services to any company doing business in Selfcare's
field of operation and not to engage in any business transaction within that
field of operation or to acquire any direct or indirect interest in any company
doing business in the Company's field of operation, unless the consent of
Selfcare is obtained. Furthermore, Mr. Wahl agreed not to hire any consultants
or employees employed by the Company for a period of one year after the
termination of his employment with the Company. In consideration of the
non-competition provision, Mr. Wahl will be paid one year of his salary after
termination of his employment with Selfcare. Mr Wahl's employment agreement may
be terminated by either party upon twelve months written notice.
CHANGE OF CONTROL PROVISIONS. There are no compensatory plans or
arrangements with any executive officer of the Company in connection with a
change in control of the Company or a change in such officer's responsibilities.
The 1996 Option Plan provides that in the event of a "Change of Control" (as
defined in the 1996 Option Plan) of the Company, all stock options and stock
appreciation rights shall automatically become fully exercisable. In addition,
at any time prior to or after a Change of Control, the Administrator of the 1996
Option Plan may accelerate awards and waive conditions and restrictions on any
awards to the extent it may determine appropriate.
25
<PAGE>
PERFORMANCE GRAPH
The following line graph compares the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock since it
completed its initial public offering and was listed on AMEX on August 6, 1996.
This graph assumes the investment of $100 on August 6, 1996 in the Company's
Common Stock, and compares the performance with the AMEX US Total Return Index
and the NASDAQ Medical Devices, Instruments And Supplies, Manufacturers And
Distributors Stocks Total Return Index ("Current Indices"). The Company pays no
dividends. The Current Indices reflect a cumulative total return based upon the
reinvestment of dividends of the stocks included in those indices. Measurement
points are August 6, 1996 for the first year and December 31 for each of the
following years.
In its proxy statement last year, the Company compared the yearly percentage
change in the cumulative total shareholder return on the Company's Common Stock
to the AMEX Composite Index and the AMEX Healthcare Sector Index (the "Prior
Indices"). The Company selected different indices this year because the Prior
Indices are or were not calculated on a total return basis. For the convenience
of shareholders who have reviewed last year's proxy statement, the cumulative
total return of the AMEX Composite Index is included in the performance graph.
AMEX no longer maintains the AMEX Healthcare Sector Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SFLAMEX AMEX TOTAL RETURN INDEX
<S> <C> <C>
8/6/96 $100.00 $100.00
12/31/96 $148.53 $104.42
12/31/97 $111.03 $130.60
12/31/98 $23.53 $140.18
12/31/99 $37.50 $179.08
<CAPTION>
NASDAQ MEDICAL DEVICES, INSTRUMENTS AND SUPPLIES, MANUFACUTURERS AND DISTRIBUTORS STOCKS TOTAL RETURN INDEX
<S> <C>
8/6/96 $100.00
12/31/96 $105.36
12/31/97 $120.70
12/31/98 $135.21
12/31/99 $164.49
<CAPTION>
AMEX COMPOSITE INDEX
<S> <C>
8/6/96 $100.00
12/31/96 $106.29
12/31/97 $128.92
12/31/98 $131.16
12/31/99 $169.44
</TABLE>
<TABLE>
<CAPTION>
CURRENT INDICES
-----------------------------------------
NASDAQ
MEDICAL DEVICES,
INSTRUMENTS AND
SUPPLIES,
MANUFACTURERS AND
AMEX US TOTAL DISTRIBUTORS STOCKS AMEX
DATE SLF AMEX RETURN INDEX TOTAL RETURN INDEX COMPOSITE INDEX
- ---- --------- -------------- ------------------- ----------------
<S> <C> <C> <C> <C>
8/6/96............... $100.00 $100.00 $100.00 $100.00
12/31/96............. $148.53 $104.42 $105.36 $106.29
12/31/97............. $111.03 $130.60 $120.70 $128.92
12/31/98............. $ 23.53 $140.18 $135.21 $131.16
12/31/99............. $ 37.50 $179.08 $164.49 $169.44
</TABLE>
26
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of Company's outstanding shares of Common Stock, to file
reports of ownership and changes in ownership with the Commission and AMEX.
Officers, directors and greater than 10% shareholders are required by applicable
regulations to furnish the Company with copies of all reports filed by such
persons pursuant to Section 16(a) of the Exchange Act and the rules and
regulations promulgated thereunder. Based solely on its review of the copies of
such reports received by it, the Company believes that for the fiscal year ended
December 31, 1999, all filing requirements applicable to its officers, directors
and such 10% beneficial owners were complied with, except that 1 report covering
one transaction was inadvertently not filed on a timely basis for each of David
Scott, and John Levy, and one Form 3 was inadvertently not filed on a timely
basis for Jeffrey A. Templer. As of the date of this proxy statement those
reports have since been filed.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
U.S. BOSTON CAPITAL AS EXCHANGE AGENT FOR PRIVATE PLACEMENT
On January 8, 1999, the Company sold an aggregate of 57,842 shares of
Series C Convertible Preferred Stock (the "Series C Preferred Shares") at a
price per share of $100, 3,030 shares of Series D Convertible Preferred Stock
(the "Series D Preferred Shares") at a price per share of $100, and
13,169 shares of Series E Convertible Preferred Stock (the "Series E Preferred
Shares") at a price per share of $100, for an aggregate purchase price of
$7,404,500 to certain investors in a private placement (the "Private Placement")
(the Series C Preferred Shares, Series D Preferred Shares and Series E Preferred
Shares are referred to herein, collectively as the "Series Preferred Shares").
The Company retained U.S. Boston Capital Corporation ("U.S. Boston Capital"), a
broker-dealer, to assist the Company in certain of its efforts with respect to
the Private Placement. U.S. Boston Capital assisted the Company in securing the
agreement of certain holders of the Company's Subordinated Revenue Royalty
Notes, which were issued in 1997, to exchange their rights to receive cash from
the Company as payment on such notes for Series Preferred Shares. The payments
on the Subordinated Revenue Royalty Notes which were exchanged for Series
Preferred Shares constituted payments which would have been due during the first
half of 1999 and amounted to $598,000 of the gross proceeds received in
connection with the placement of the Series Preferred Shares. U.S. Boston
Capital received $47,190 as compensation for its services in securing the
agreement of such holders to exchange cash payments due to them for Series
Preferred Shares. Willard Lee Umphrey, a director of the Company, is a director
of U.S. Boston Capital, as well as a holder, indirectly, of fifty percent of
U.S. Boston Capital's capital stock. Mr. Umphrey was also President and
Treasurer of U.S. Boston Capital until his resignation on July 12, 1999.
In addition, certain executive officers and directors of the Company
participated in the Private Placement by purchasing Series C Preferred Shares
and/or Series E Preferred Shares at the same price, and on the same terms, as
the other investors therein (See BENEFICIAL OWNERSHIP OF MANAGEMENT section of
this Proxy Statement).
CAN-AM CARE CORPORATION AND A.M.G. MEDICAL INC. TRANSACTIONS
On February 18, 1998, Selfcare Consumer Products, a subsidiary of the
Company, acquired Can-Am, a leading supplier of diabetes care products, for
approximately $27.9 million. In connection with, and as part of, this
acquisition, Mr. Robert M. Oringer, President of Can-Am, became a member of the
Company's Board of Directors and continued as President of Can-Am. Mr. Oringer
continues to serve in those capacities. In consideration for the sale of his 25%
interest in Can-Am, Mr. Oringer received from the Company 277,083 shares of the
Company's Common Stock, as well as a non-negotiable note, maturing February 18,
2001, in the principal amount of $500,000, bearing interest at a rate of 6% per
annum. During 1999, Mr. Oringer received payments of interest only on the Can-Am
Note totaling $30,000, and as of
27
<PAGE>
February 15, 2000, the Company remains indebted to Mr. Oringer under the Can-Am
Note to the extent of $500,000.
In connection with, and as part of, the acquisition of Can-Am, Can-Am
entered into a supply agreement and a management services agreement with AMG
Medical Inc. ("AMG Medical"), a company in which Mr. Oringer is a Vice President
and which is 33% owned by a personal holding company of Mr. Oringer's spouse.
Under the supply agreement Can-Am agreed, with certain exceptions, to purchase
100% of its requirements for monolet-compatible lancets from AMG Medical for so
long as Can-Am is in the business of selling monolet compatible lancets. In
addition, Can-Am entered into a management services agreement (the "Management
Agreement") with AMG Medical whereby AMG Medical will provide labor, office
space, office related services and insurance to Can-Am for a term of five years.
Under the Management Agreement, Can-Am will pay AMG Medical a fixed fee to cover
the costs of office space, property taxes, heating, maintenance and insurance
costs associated therewith, office expenses and telephone and computer equipment
and access expenses (the "Fixed Fee"); a variable fee to cover the costs of
salaries, overtime pay, bonuses and related compensation of employees providing
services to Can-Am (the "Variable Fee"), and the costs of all direct expenses
incurred by AMG Medical, including supply expenses, postage costs, printing
costs, and other miscellaneous charges and expenses (the "Direct Expenses").
From February 1998 through February 1999, the Fixed Fee was $112,800. From
February 1999 through February 2000 the Fixed Fee was $118,400. The Fixed Fee
will increase by 5% annually and is subject to change in the event Can-Am
requests AMG Medical to change the scope of services rendered for Can-Am. The
Variable Fee is based on the actual salaries paid by AMG Medical to the AMG
Medical employees providing services to Can-Am and the percentage of their time
that such employees devote to providing services to Can-Am. For the calendar
year 1999, Variable Fees and Direct Expenses payable to AMG Medical were
$559,944 and $117,629, respectively. Robert Oringer's spouse did not receive
compensation in connection with the Can-Am transaction.
AUDIT MATTERS
A representative of Arthur Andersen LLP, the Company's auditors, is expected
to be present at the Annual Meeting, will be given the opportunity to make a
statement if he or she so desires and will be available to respond to
appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
Shareholders who wish to present proposals pursuant to Rule 14a-8
promulgated under the Exchange Act for consideration at the Company's Annual
Meeting of Shareholders to be held in 2001 must submit the proposals in proper
form to the Company at its address set forth on the first page of this Proxy
Statement not later than December 17, 2000 in order for the proposals to be
considered for inclusion in the Company's Proxy Statement and form of proxy
relating to such Annual Meeting in 2001.
Any shareholder proposals intended to be presented at the Company's Annual
Meeting of Shareholders to be held in 2001 must be received in writing by the
Company no later than March 12, 2001, nor earlier than January 9, 2001, together
with all supporting documentation required by the Company's Amended and Restated
By-laws.
28
<PAGE>
OTHER INFORMATION
Proxies for the Annual Meeting will be solicited by mail and through
brokerage institutions and all expenses involved, including printing and
postage, will be paid by the Company.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, FOR THE YEAR ENDED DECEMBER
31, 1999 (THE "ANNUAL REPORT") SHALL BE PROVIDED WITHOUT CHARGE TO EACH PERSON
SOLICITED HEREBY UPON THE WRITTEN REQUEST OF ANY SUCH PERSON TO:
SELFCARE, INC.
200 PROSPECT STREET
WALTHAM, MASSACHUSETTS 02453
ATTENTION: DOUG GUARINO
IN ADDITION, COPIES OF ANY EXHIBITS TO THE ANNUAL REPORT WILL BE PROVIDED
FOR A NOMINAL CHARGE TO SHAREHOLDERS WHO MAKE A WRITTEN REQUEST TO THE COMPANY
AT THE ABOVE ADDRESS.
The Board of Directors is aware of no other matters, except for those
incident to the conduct of the Annual Meeting, that are to be presented to
shareholders for formal action at the Annual Meeting. If, however, any other
matters properly come before the Annual Meeting or any adjournments thereof, it
is the intention of the persons named in the proxy to vote the proxy in
accordance with their judgment.
By order of the Board of Directors
Ron Zwanziger
CHAIRMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
April 6, 2000
29
<PAGE>
Attachment A
INVERNESS MEDICAL TECHNOLOGY, INC.
FORM OF
2000 STOCK OPTION AND GRANT PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN: DEFINITIONS
The name of the plan is the Inverness Medical Technology, Inc. 2000 Stock
Option and Grant Plan (the "Plan"). The purpose of the Plan is to encourage and
enable the officers, employees, Directors and other key persons of Inverness
Medical Technology, Inc, (the "Company") and its Subsidiaries upon whose
judgment, initiative and efforts the Company largely depends for the successful
conduct of its business to acquire a proprietary interest in the Company. It is
anticipated that providing such persons with a direct stake in the Company's
welfare will assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
"ACT" means the Securities Exchange Act of 1934, as amended.
"ADMINISTRATOR" means a committee of two or more Non-Employee Directors
appointed by the Board to administer the Plan.
"AWARD" or "AWARDS", except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Unrestricted Stock
Awards, Performance Share Awards and Dividend Equivalent Rights.
"BOARD" means the Board of Directors of the Company.
"CAUSE" as such term relates to the termination of any person means the
occurrence of one or more of the following: (i) such person is convicted of,
pleads guilty to, or confesses to any felony or any act of fraud,
misappropriation or embezzlement which has an immediate and materially adverse
effect on the Company or any Subsidiary, as determined by the Board in good
faith in its sole discretion, (ii) such person engages in a fraudulent act to
the material damage or prejudice of the Company or any Subsidiary or in conduct
or activities materially damaging to the property, business or reputation of the
Company or any Subsidiary, all as determined by the Board in good faith in its
sole discretion, (iii) any material act or omission by such person involving
malfeasance or negligence in the performance of such person's duties to the
Company or any Subsidiary to the material detriment of the Company or any
Subsidiary, as determined by the Board in good faith in its sole discretion,
which has not been corrected by such person to the satisfaction of the Board
within 30 days after written notice from the Company of any such act or
omission, (iv) failure by such person to comply in any material respect with the
terms of his employment agreement, it any, or any written policies or directives
of the Board as determined by the Board in good faith in its sole discretion,
which noncompetition agreement with the Company, if any, as determined by the
Board in good faith in its sole discretion.
"CHANGE OF CONTROL" is defined in Section 15.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"DISABILITY" means an individual's inability to perform his normal required
services for the Company and its Subsidiaries for a period of six consecutive
months by reason of the individual's mental or physical disability, as
determined by the Administrator in good faith in its sole discretion.
"DIVIDEND EQUIVALENT RIGHT" means Awards granted pursuant to Section 10.
"EFFECTIVE DATE" means the date on which the Plan is approved by
stockholders as set forth in Section 17.
"FAIR MARKET VALUE" on any given date means the last reported sale price at
which Stock is traded on such date or, if no Stock is traded on such date, the
next preceding date on which Stock was traded, as
<PAGE>
reflected on the principal stock exchange or, if applicable, any other national
stock exchange on which the Stock is traded or admitted to trading.
"INCENTIVE STOCK OPTION" means any Stock Option designated and qualified as
an incentive stock option" as defined in Section 422 of the Code.
"NON-EMPLOYEE DIRECTOR" means any Director who is both a "Non-Employee
Director" within the meaning of Rule 16b-3(b)(3)(i) promulgated under the Act,
or any successor definition under said rule, and an "outside director" within
the meaning of Section 162(m) of the Code and the regulations promulgated
thereunder.
"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an Incentive
Stock Option
"OPTION" or "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.
"PERFORMANCE SHARE AWARD" means Awards granted pursuant to Section 9.
"RESTRICTED STOCK AWARD" means Awards granted pursuant to Section 7.
"RETIREMENT" means the employee's termination of employment with the Company
and its Subsidiaries after attainment of age 65 or attainment of age 55 and
completion of 10 years of employment.
"STOCK" means the Common Stock, par value $.001 per share, of the Company,
subject to adjustments pursuant to Section 3.
"STOCK APPRECIATION RIGHT" means any Award granted pursuant to Section 6.
"SUBSIDIARY" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities, beginning with the
Company if each of the corporations or entities (other than the last corporation
or entity in the unbroken chain) owns stock or other interests possessing 50% or
more of the economic interest or the total combined voting power of all classes
of stock or other interests in one of the other corporations or entities in the
chain.
"UNRESTRICTED STOCK AWARD" means any Award granted pursuant to Section 8.
SECTION 2. ADMINISTRATION OF PLAN: AUTHORITY TO SELECT PARTICIPANTS AND
DETERMINE AWARDS
(a) POWERS OF ADMINISTRATOR. The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the officers, employees and key persons of the Company and
its Subsidiaries to whom Awards may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if any, of
Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Unrestricted Stock Awards, Performance
Share Awards and Dividend Equivalent Rights, or any combination of the
foregoing, granted to any one or more participants;
(iii) to determine the number of shares of Stock to be covered by any
Award;
(iv) to determine and modify from time to time the terms and conditions,
including restrictions, not inconsistent with the terms of the Plan, of any
Award, which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards;
(v) to accelerate at any time the exercisability or vesting of all or
any portion of any Award;
(vi) subject to the provisions of Section 5(a)(iii), to extend at any
time the period in which Stock Options may be exercised;
2
<PAGE>
(vii) to determine at any time whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award shall
be deferred either automatically or at the election of the participant and
whether and to what extent the Company shall pay or credit amounts
constituting interest (at rates determined by the Administrator) or
dividends or deemed dividends on such deferrals; and
(viii) at any time to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in connection
with the Plan; and to otherwise supervise the administration of the Plan.
All decisions and interpretations of the Administrator shall be binding on
all persons, including the Company and Plan participants.
(b) DELEGATION OF AUTHORITY TO GRANT AWARDS. The Administrator, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Administrator's authority and duties with respect to Awards,
including the granting thereof, to individuals who are not subject to the
reporting and other provisions of Section 16 of the Act or "covered employees"
within the meaning of Section 162(m) of the Code. The Administrator may revoke
or amend the terms of a delegation at any time but such action shall not
invalidate any prior actions of the Administrator's delegate or delegates that
were consistent with the terms of the Plan.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN MERGERS: SUBSTITUTION
(a) STOCK ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 750,000 shares. For purposes of
this limitation, the shares of Stock underlying any Awards which are forfeited,
cancelled, reacquired by the Company, satisfied without the issuance of Stock or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. Subject to such overall
limitation, shares of Stock may be issued up to such maximum number pursuant to
any type or types of Award; provided, however, that Stock Options or Stock
Appreciation Rights with respect to no more than 500,000 shares of Stock may be
granted to any one individual participant during any one calendar year period.
The shares available for issuance under the Plan may be authorized but unissued
shares of Stock or shares of Stock reacquired by the Company. Upon the exercise
of a Stock Appreciation Right settled in shares of Stock, the right to purchase
an equal number of shares of Stock covered by a related Stock Option, if any,
shall be deemed to have been surrendered and will no longer be exercisable, and
said number of shares of Stock shall no longer be available under the Plan.
(b) RECAPITALIZATIONS. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, the outstanding shares of
Stock are increased or decreased or are exchanged for a different number or kind
of shares or other securities of the Company, or additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Stock or other securities, the
Administrator shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan, (ii) the number
of Stock Options or Stock Appreciation Rights that can be granted to any one
individual participant, (iii) the number and kind of shares or other securities
subject to any then outstanding Awards under the Plan, and (iv) the price for
each share subject to any then outstanding Stock Options and Stock Appreciation
Rights under the Plan, without changing the aggregate exercise price (i.e., the
exercise price multiplied by the number of Stock Options and Stock Appreciation
Rights) as to which such Stock Options and Stock Appreciation Rights remain
exercisable. The adjustment by the Administrator shall be final, binding and
conclusive. No fractional shares of Stock shall be issued under the Plan
3
<PAGE>
resulting from any such adjustment, but the Administrator in its discretion may
make a cash payment in lieu of fractional shares.
(c) MERGERS. Upon consummation of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which outstanding shares of
Stock are exchanged for securities, cash or 6ther property of an unrelated
corporation or business entity or in the event of a liquidation of the Company,
the Board, or the board of directors of any corporation assuming the obligations
of the Company, may, in its discretion, take any one or more of the following
actions, as to outstanding Stock Options and Stock Appreciation Rights:
(i) provide that such Stock Options shall be assumed or equivalent options shall
be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice to the optionees, provide that all
unexercised Stock Options and Stock Appreciation Rights will terminate
immediately prior to the consummation of such transaction unless exercised by
the optionee within a specified period following the date of such notice, and/or
(iii) in the event of a business combination under the terms of which holders of
the Stock of the Company will receive upon consummation thereof a cash payment
for each share surrendered in the business combination, make or provide for a
cash payment to the optionees equal to the difference between (A) the value (as
determined by the Administrator) of the consideration payable per share of Stock
pursuant to the business combination (the "Merger Price") times the number of
shares of Stock subject to such outstanding Stock Options and Stock Appreciation
Rights (to the extent then exercisable at prices not in excess of the Merger
Price) and (B) the aggregate exercise price of all such outstanding Stock
Options and Stock Appreciation Rights in exchange for the termination of such
Stock Options and Stock Appreciation Rights.
(d) SUBSTITUTE AWARDS. The Administrator may grant Awards under the Plan
in substitution for stock and stock based awards held by employees of another
corporation who become employees of the Company or a Subsidiary as the result of
a merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Administrator may direct that the
substitute awards be granted on such terms and conditions as the Administrator
considers appropriate in the circumstances.
SECTION 4. ELIGIBILITY
Participants in the Plan will be such full or part-time officers, other
employees, Directors and other key persons of the Company and its Subsidiaries
who are responsible for or contribute to the management, growth or profitability
of the Company and its Subsidiaries as are selected from time to time by the
Administrator, in its sole discretion.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a "subsidiary corporation"
within the meaning of Section 424(f) of the Code. To the extent that any Option
does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after , 200
[(10 years from the date plan is approved by Board of Directors)].
(a) TERMS AND CONDITIONS OF STOCK OPTIONS. The Administrator in its
discretion may grant Stock Options subject to the following terms and conditions
and such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Administrator shall deem desirable:
(i) EXERCISE PRICE. The exercise price per share for the Stock covered
by a Stock Option granted pursuant to this Section 5(a) shall be determined
by the Administrator at the time of grant but shall not be less than 100% of
the Fair Market Value on the date of grant in the case of Incentive
4
<PAGE>
Stock Options, or 85% of the Fair Market Value on the date of grant, in the
case of Non-Qualified Stock Options. Notwithstanding the foregoing, with
respect to Non-Qualified Stock Options which are granted in lieu of
compensation, the exercise price per share shall not be less than 50% of the
Fair Market Value on the date of grant. If an employee owns or is deemed to
own by reason of the attribution rules of Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of the Company
or any parent or subsidiary corporation and an Incentive Stock Option is
granted to such employee, the option price of such Incentive Stock Option
shall be not less than 110% of the Fair Market Value on the grant date.
(ii) GRANT OF DISCOUNT OPTIONS IN LIEU OF CASH BONUS. Upon the request
of a participant and with the consent of the Administrator, such participant
may elect each calendar year to receive a Non-Qualified Stock Option in lieu
of any specified compensation to which he may become entitled during the
following calendar year pursuant to any other plan or arrangement of the
Company, but only if such participant makes an advance election to waive
receipt of all or a portion of such compensation. Such election shall be
made on or before the date set by the Administrator which date generally
shall be no later than 15 days (or such shorter period permitted by the
Administrator) preceding January 1 of the calendar year for which the
compensation would otherwise be paid. A Non-Qualified Stock Option shall be
granted to each employee who made such an election on the date the waived
compensation would otherwise be paid. The exercise price per share shall be
determined by the Administrator but shall not be less than 50% of the Fair
Market Value of the Stock on the date the Stock Option is granted. The
number of shares of Stock subject to the Stock Option shall be determined by
dividing the amount of the waived compensation by the difference between the
Fair Market Value of the Stock on the date the Stock Option is granted and
the exercise price per Stock Option. The Stock Option shall be granted for
whole number of shares so determined; the value of any fractional share
shall be paid in cash.
(iii) OPTION TERM. The term of each Stock Option shall be fixed by the
Administrator, but no Incentive Stock Option shall be exercisable more than
ten years after the date the option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of stock of
the Company or any parent or subsidiary corporation and an Incentive Stock
Option is granted to such employee, the term of such option shall be no more
than five years from the date of grant.
(iv) EXERCISABILITY: RIGHTS OF A STOCKHOLDER. Stock Options shall
become vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Administrator at or after the
grant date; provided, however, that Stock Options granted in lieu of
compensation shall be exercisable in full as of the grant date. The
Administrator may at any time accelerate the exercisability of all or any
portion of any Stock Option. An optionee shall have the rights of a
stockholder only as to shares acquired upon the exercise of a Stock Option
and not as to unexercised Stock Options.
(v) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company, specifying the
number of shares to be purchased. Payment of the purchase price may be made
by one or more of the following methods:
(A) In cash, by certified or bark check or other instrument
acceptable to the Administrator;
(B) In the form of shares of Stock that are not then subject to
restrictions under any Company plan and that have been beneficially owned
by the optionee for at least six months, if permitted by the
Administrator in its discretion. Such surrendered shares shall be valued
at Fair Market Value on the exercise date; or
(C) By the optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable to
the Company to pay the purchase price; provided that in the event the
optionee chooses to pay the purchase price as so provided, the optionee
and the broker shall
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comply with such procedures and enter into such agreements of indemnity
and other agreements as the Administrator shall prescribe as a condition
of such payment procedure.
Payment instruments will be received subject to collection. The delivery
of certificates representing the shares of Stock to be purchased pursuant to
the exercise of a Stock Option will be contingent upon receipt from the
optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by the Company of the full purchase price
for such shares and the fulfillment of any other requirements contained in
the Stock Option or applicable provisions of laws.
(vi) TERMINATION BY REASON OF DEATH. Any Stock Option held by an
optionee whose employment by (or other business relationship with) the
Company and its Subsidiaries is terminated by reason of death shall become
fully exercisable and may thereafter be exercised by the legal
representative or legatee of the optionee, for a period of 12 months (or
such longer period as the Administrator shall specify at any time) from the
date of death, or until the expiration of the stated term of the Option, if
earlier.
(vii) TERMINATION BY REASON OF DISABILITY
(A) Any Stock Option held by an optionee whose employment by (or
other business relationship with) the Company and its Subsidiaries is
terminated by reason of Disability shall become fully exercisable and may
thereafter be exercised, for a period of 12 months (or such longer period
as the Administrator shall specify at any time) from the date of such
termination of employment (or business relationship), or until the
expiration of the stated term of the Option, if earlier.
(B) The Administrator shall have sole authority and discretion to
determine whether a participant's employment (or business relationship)
has been terminated by reason of Disability.
(C) Except as otherwise provided by the Administrator at any time,
the death of an optionee during the period provided in this
Section 5(a)(vii) for the exercise of a Stock Option shall extend such
period for 12 months from the date of death, subject to termination on
the expiration of the stated term of the Option, if earlier.
(viii) TERMINATION BY REASON OF RETIREMENT.
(A) Any Stock Option held by an optionee whose employment by (or
business relationship with) the Company and its Subsidiaries is
terminated by reason of Retirement may thereafter be exercised, to the
extent it was exercisable at the time of such termination, for a period
of 12 months (or such other period as the Administrator shall specify at
any time) from the date of such termination of employment (or business
relationship), or until the expiration of the stated term of the Option,
if earlier.
(B) Except as otherwise provided by the Administrator at any time,
the death of an optionee during a period provided in this
Section 5(a)(viii) for the exercise of a Stock Option shall extend such
period for 12 months from the date of death, subject to termination on
the expiration of the stated term of the Option, if earlier.
(ix) TERMINATION FOR CAUSE. If any optionee's employment by (or
business relationship with) the Company and its Subsidiaries is terminated
for Cause, any Stock Option held by such optionee, including any Stock
Option that is immediately exercisable at the time of such termination,
shall immediately terminate and be of no further force and effect; provided,
however, that the Administrator may, in its sole discretion, provide that
such Stock Option can be exercised for a period of up to 30 days from the
date of termination of employment (or business relationship) or until the
expiration of the stated term of the Option, if earlier.
(x) OTHER TERMINATION. Unless otherwise determined by the
Administrator, if an optionee's employment by (or business relationship
with) the Company and its Subsidiaries terminates for any
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reason other than death, Disability, Retirement, or for Cause, any Stock
Option held by such optionee may thereafter be exercised, to the extent it
was exercisable on the date of termination of employment (or business
relationship), for three months (or such longer period as the Administrator
shall specify at any time) from the date of termination of employment (or
business relationship) or until the expiration of the stated term of the
Option, if earlier.
(xi) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the
shares of Stock with. respect to which Incentive Stock Options granted under
this Plan and any other plan of the Company or its parent and subsidiary
corporations become exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000. To the extent that any Stock Option
exceeds this limit, it shall constitute a Non-Qualified Stock Option.
(b) RELOAD OPTIONS. At the discretion of the Administrator, Options
granted under Section 5(a) may include a "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(v)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with the same expiration
date as the original Option being exercised, and with such other terms as the
Administrator may provide) to purchase that number of shares of Stock equal to
the number delivered to exercise the original Option.
(c) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee. Notwithstanding the foregoing, the Administrator
may provide in an option agreement evidencing a Non-Qualified Stock Option that
the optionee may transfer, without consideration for the transfer, such
Non-Qualified Stock Option to members of his immediate family, to trusts for the
benefit of such family members, to partnerships in which such family members are
the only partners, or to charitable organizations, provided that the transferee
agrees in writing with the Company to be bound by all of the terms and
conditions of the Plan and the applicable option agreement.
(d) FORM OF SETTLEMENT. Shares of Stock issued upon exercise of a Stock
Option shall be free of all restrictions under the Plan, except as otherwise
provide in the Plan.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is an
Award entitling the recipient to receive an amount in cash or shares of Stock or
a combination thereof having a value equal to the excess of the Fair Market
Value of the Stock on the date of exercise over the exercise price per Stock
Appreciation Right set by the Administrator at the time of grant, which price
shall not be less than 85% of the Fair Market Value of the Stock on the date of
grant (or over the option exercise price per share, if the Stock Appreciation
Right was granted in tandem with a Stock Option) multiplied by the number of
shares of Stock with respect to which the Stock Appreciation Right shall have
been exercised, with the Administrator having the right to determine the form of
payment.
(b) GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights may be granted by the Administrator in tandem with, or independently of,
any Stock Option granted pursuant to Section 5 of the Plan. In the case of a
Stock Appreciation Right granted in tandem with a Non-Qualified Stock Option,
such Stock Appreciation Right may be granted either at or after the time of thc
grant of such Option. In the case of a Stock Appreciation Right granted in
tandem with an Incentive Stock Option, such Stock Appreciation Right may be
granted only at the time of the grant of the Option.
A Stock Appreciation Right or applicable portion thereof granted in tandem
with a Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Option.
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(c) TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Administrator, subject to the following:
(i) Stock Appreciation Rights granted in tandem with Options shall be
exercisable at such time or times and to the extent that the related Stock
Options shall be exercisable.
(ii) Upon exercise of a Stock Appreciation Right, the applicable portion
of any related Option shall be surrendered.
(iii) Stock Appreciation Rights granted in tandem with an Option shall
be transferable only when and to the extent that the underlying Option would
be transferable. Stock Appreciation Rights not granted in tandem with a
Option shall not be transferable otherwise than by will or the laws of
descent or distribution. All Stock Appreciation Rights shall be exercisable
during the participant's lifetime only by the participant or the
participant's legal representative.
SECTION 7. RESTRICTED STOCK AWARDS
(a) NATURE OF RESTRICTED STOCK AWARDS. A Restricted Stock Award is an
Award entitling the recipient to acquire, at par value or such other purchase
price determined by the Administrator, shares of Stock subject to such
restrictions and conditions as the Administrator may determine at the time of
grant ("Restricted Stock"). Conditions may be based on continuing employment (or
other business relationship) and/or achievement of pre-established performance
goals and objectives.
(b) RIGHTS AS A STOCKHOLDER. Upon execution of a written instrument
setting forth the Restricted Stock Award and paying any applicable purchase
price, a participant shall have the rights of a stockholder with respect to the
voting of the Restricted Stock, subject to such conditions contained in the
written instrument evidencing the Restricted Stock Award. Unless the
Administrator shall otherwise determine, certificates evidencing the Restricted
Stock shall indicate when the stock is vested as provided in Section 7(d) below.
(c) RESTRICTIONS. Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the written instrument evidencing the Restricted Stock Award. If a
participant's employment (or other business relationship) with the Company and
its Subsidiaries terminates for any reason, the Company shall have the right to
repurchase Restricted Stock with respect to which conditions have not lapsed at
their purchase from the participant or the participant's legal representative.
(d) VESTING OF RESTRICTED STOCK. The Administrator at the time of grant
shall specify the dates or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." Except as may otherwise be
provided by the Administrator at any time, a participant's rights in any shares
of Restricted Stock that have not vested shall automatically terminate upon the
participant's termination of employment (or other business relationship) with
the Company and its Subsidiaries and such shares shall either be forfeited or
subject to the Company's right of repurchase as provided in Section 7(c) above.
(e) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The written instrument
evidencing the Restricted Stock Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the Restricted
Stock.
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SECTION 8. UNRESTRICTED STOCK AWARDS.
(a) GRANT OR SALE OF UNRESTRICTED STOCK. The Administrator may, in its
sole discretion, grant (or sell at a purchase price determined by the
Administrator) an Unrestricted Stock Award to any participant, pursuant to which
such participant may receive shares of Stock free of any restrictions
("Unrestricted Stock") under the Plan. Unrestricted Stock Awards may be granted
or sold as described in the preceding sentence in respect of past services or
other valid consideration, or in lieu of any cash compensation due to such
participant.
(b) ELECTIONS TO RECEIVE UNRESTRICTED STOCK IN LIEU OF COMPENSATION. Upon
the request of a participant and with the consent of the Administrator, each
participant may, pursuant to an advance written election delivered to the
Company no later than the date specified by the Administrator, receive a portion
of the cash compensation otherwise due to such participant in the form of shares
of Unrestricted Stock (valued at Fair Market Value on the date or dates the cash
compensation would otherwise be paid) either currently or on a deferred basis.
(e) RESTRICTIONS ON TRANSFERS. The right to receive shares of Unrestricted
Stock on a deferred basis may not be sold, assigned, transferred, pledged or
otherwise encumbered, other than by will or the laws of descent and
distribution.
SECTION 9. PERFORMANCE SHARE AWARDS
(a) NATURE OF PERFORMANCE SHARE AWARDS. A Performance Share Award is an
Award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Administrator may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. The Administrator in its sole discretion shall determine whether and to
whom Performance Share Awards shall be made, the performance goals applicable
under each such Award, the periods during which performance is to be measured,
and all other limitations and conditions applicable to the awarded Performance
Shares; provided, however, that the Administrator may rely on the performance
goals and other standards applicable to other performance unit plans of the
Company in setting the standards for Performance Share Awards under the Plan.
(b) RESTRICTIONS ON TRANSFER. Performance Share Awards. and all rights
with respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered
(c) RIGHTS AS A SHAREHOLDER. A participant receiving a Performance Share
Award shall have the rights of a shareholder only as to shares actually received
by the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a stock certificate evidencing the acquisition of shares of
Stock under a Performance Share Award only upon satisfaction of all conditions
specified in the written instrument evidencing the Performance Share Award (or
in a performance plan adopted by the Administrator).
(d) TERMINATION. Except as may otherwise be provided by the Administrator
at any time prior to termination of employment (or other business relationship),
a participant's rights in all Performance Share Awards shall automatically
terminate upon the participant's termination of employment (or business
relationship) with the Company and its Subsidiaries for any reason.
(e) ACCELERATION, WAIVER, ETC. At any time prior to the participant's
termination of employment (or other business relationship) by the Company and
its Subsidiaries, the Administrator may in its sole discretion accelerate, waive
or, subject to Section 13, amend any or all of the goals, restrictions or
conditions imposed under any Performance Share Award.
SECTION 10. DIVIDEND EQUIVALENT RIGHTS
(a) DIVIDEND EQUIVALENT RIGHTS. A Dividend Equivalent Right is an Award
entitling the recipient to receive credits based on cash dividends that would be
paid on the shares of Stock specified in the Dividend
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Equivalent Right (or other award to which it relates) if such shares were held
by the recipient. A Dividend Equivalent Right may be granted hereunder to any
participant, as a component of another Award or as a freestanding award. The
terms and conditions of Dividend Equivalent Rights shall be specified in the
grant. Dividend equivalents credited to the holder of a Dividend Equivalent
Right may be paid currently or may be deemed to be reinvested in additional
shares of Stock, which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of reinvestment or such
other price as may then apply under a dividend reinvestment plan sponsored by
the Company, if any. Dividend Equivalent Rights may be settled in cash or shares
of Stock or a combination thereof, in a single installment or installments. A
Dividend Equivalent Right granted as a component of another Award may provide
that such Dividend Equivalent Right shall be settled upon exercise, settlement,
or payment of, or lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the
same conditions as such other award. A Dividend Equivalent Right granted as a
component of another Award may also contain terms and conditions different from
such other award.
(b) INTEREST EQUIVALENTS. Any Award under this Plan that is settled in
whole or in part in cash on a deferred basis may provide in the grant for
interest equivalents to be credited with respect to such cash payment. Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.
SECTION 11. TAX WITHHOLDING
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the date
as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfaction to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
income. The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the participant.
(b) PAYMENT IN STOCK. Subject to approval by the Administrator, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due; or (ii) transferring to the Company shares
of Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.
SECTION 12. TRANSFER. LEAVE OF ABSENCE. ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
reemployment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.
SECTION 13. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award (or
provide substitute Awards at the same or reduced exercise or purchase price or
with no exercise or purchase price in a manner not inconsistent with the terms
of the Plan), but such price, if any, must satisfy the requirements which would
apply to the substitute or amended
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Award if it were then initially granted under this Plan) for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holder's
consent. If and to the extent determined by the Administrator to be required by
the Act to ensure that Incentive Stock Options granted under the Plan are
qualified under Section 422 of the Code, Plan amendments shall be subject to
approval by the Company stockholders entitled to vote at a meeting of
stockholders.
SECTION 14. STATUS OF PLAN
With respect to the portion of any Award which has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Administrator may authorize the creation of trusts or other arrangements to meet
the Company's obligations to deliver Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the foregoing sentence.
SECTION 15. CHANGE OF CONTROL PROVISIONS
Upon the occurrence of a Change of Control as defined in this Section 15:
(a) Each outstanding Stock Option and Stock Appreciation Right shall
automatically become fully exercisable notwithstanding any provision to the
contrary herein.
(b) Each Restricted Stock Award and Performance Share Award shall be subject
to such terms, if any, with respect to a Change of Control as have been provided
by the Administrator in connection with such Award.
(c) "CHANGE OF CONTROL" shall mean the occurrence of any one of the
following events:
(i) any "PERSON," as such term is used in Sections 13(d) and 14(d) of
the Act (other than the Company, any of its Subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Company or any of its Subsidiaries), together
with all "affiliates" and "associates" (as such terms are defined in
Rule 12b-2 under the Act) of such person, shall become the "beneficial
owner" (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing in excess of 50% of
either (A) the combined voting power of the Company's then outstanding
securities having the right to vote in an election of the Company's Board of
Directors ("Voting Securities") or (B) the then outstanding shares of Stock
of the Company (in either such case other than as a result of an acquisition
of securities directly from the Company); or
(ii) persons who, as of the Effective Date, constitute the Company's
Board of Directors (the "Incumbent Directors") cease for any reason,
including, without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of the
Board, provided that any person becoming a director of the Company
subsequent to the Effective Date whose election or nomination for election
was approved by a vote of at least a majority of the Incumbent Directors
shall, for purposes of this Plan, be considered an Incumbent Director; or
(iii) the stockholders of the Company shall approve (A) any consolidation
or merger of the Company or any Subsidiary where the shareholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly, shares
representing in the aggregate 80% or more of the voting shares of the
corporation issuing cash or securities in the consolidation or merger (or of
its ultimate parent corporation, if any), (B) any sale, lease, exchange or
other transfer (in one transaction or a series of transactions contemplated
or arranged by any party as
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a single plan) of all or substantially all of the assets of the Company or
(C) any plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (i) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of Stock beneficially owned by any person in
excess of 50% or more of the shares of Stock then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any person in excess of 50% or more of the combined voting power of all
then outstanding Voting Securities; PROVIDED, HOWEVER, that if any person
referred to in clause (x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional shares of Stock or other Voting Securities
(other than pursuant to a stock split, stock dividend, or similar transaction),
then a "CHANGE OF CONTROL" shall be deemed to have occurred for purposes of the
foregoing clause (i).
SECTION 16. GENERAL PROVISIONS
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Administrator
may require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all applicable
securities law and other legal and stock exchange or similar requirements have
been satisfied. The Administrator may require the placing of such stop-orders
and restrictive legends on certificates for Stock and Awards as it deems
appropriate.
(b) DELIVERY OF STOCK CERTIFICATES. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(c) OTHER COMPENSATION ARRANGEMENTS: NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
SECTION 17. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a majority
of the shares of Stock of the Company present or represented and entitled to
vote at a meeting of stockholders. Subject to such approval by the stockholders
and to the requirement that no Stock may be issued hereunder prior to such
approval, Stock Options and other Awards may be granted hereunder on and after
adoption of this Plan by the Board.
SECTION 18. GOVERNING LAW
This Plan shall be governed by Delaware law, except to the extent such law
is preempted by federal law.
DATE APPROVED BY BOARD OF DIRECTORS:
DATE APPROVED BY STOCKHOLDERS:
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SELFCARE, INC.
EMPLOYEE STOCK PURCHASE PLAN
The purpose of the Selfcare, Inc. Employee Stock Purchase Plan ("the Plan")
is to provide eligible employees of Selfcare, Inc. (the "Company) and its
subsidiaries with opportunities to purchase shares of the Company's common
stock, $.001 par value (the "Common Stock"). Two hundred fifty thousand
(250,000) shares of Common Stock in the aggregate have been approved and
reserved for this purpose. The Plan is intended to constitute an "employee stock
purchase plan" within the meaning of Section 423(b) of the Internal Revenue Code
of 1986, as amended (the "Code"), and shall be interpreted in accordance with
that intent.
1. ADMINISTRATION. The Plan will be administered by the Company's Board of
Directors (the "Board") or by a committee appointed by the Board for such
purpose (the "Committee"). The Board or the Committee has authority to make
rules and regulations for the administration of the Plan, and its
interpretations and decisions with regard thereto shall be final and conclusive.
No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
hereunder.
2. OFFERINGS. The Company will make one or more offerings to eligible
employees to purchase Common Stock under the Plan ("Offerings"). Unless
otherwise determined by the Board or the Committee, the initial Offering will
begin on the effective date of the Company's first underwritten public offering
and will end on December 31, 1996 (the "Initial Offering"). Thereafter, unless
otherwise determined by the Board or the Committee, an Offering will begin on
the first business day occurring on or after each January 1 and July 1, and will
end on the last business day occurring on or before the following June 30 and
December 31, respectively. The Board or the Committee may, in its discretion,
designate a different period for any Offering, provided that no Offering shall
exceed one year in duration or overlap any other offering.
3. ELIGIBILITY. All employees of the Company (including employees who are
also directors of the Company) and all employees of each Designated Subsidiary
(as defined in Section 11) are eligible to participate in any one or more of the
Offerings under the Plan, except where prohibited by law, provided that as of
the first day of the applicable Offering (the "Offering Date") they are
customarily employed by the Company or a Designated Subsidiary for more than
twenty (20) hours a week and have completed at least three (3) months of
employment.
4. PARTICIPATION. An employee eligible on any offering Date may
participate in such Offering by submitting an enrollment form to his appropriate
payroll location at least ten (10) business days before the Offering Date (or by
such other deadline as shall be established for the Offering). The form will
(a) state a whole percentage to be deducted from his Compensation (as defined in
Section 11) per pay period, (b) authorize the purchase of Common Stock for him
in each Offering in accordance with the terms of the Plan and (c) specify the
exact name or names in which shares of Common Stock purchased for him are to be
issued pursuant to Section 10. An employee who does not enroll in accordance
with these procedures will be deemed to have waived his right to participate.
Unless an employee files a new enrollment form or withdraws from the Plan, his
deductions and purchases will continue at the same percentage of Compensation
for future Offerings, provided he remains eligible. Notwithstanding the
foregoing, participation in the Plan will neither be permitted nor be denied
contrary to the requirements of the Code.
5. EMPLOYEE CONTRIBUTIONS. Each eligible employee may authorize payroll
deductions at a minimum of two percent (2%) up to a maximum of ten percent (10%)
of his Compensation for each pay period. The Company will maintain book accounts
showing the amount of payroll deductions made by each participating employee for
each Offering. No interest will accrue or be paid on payroll deductions.
6. DEDUCTION CHANGES. An employee may not increase his payroll deduction
during any Offering. An employee generally may not decrease his payroll
deduction during an Offering, but may terminate his payroll deduction for the
remainder of the Offering, either with or without withdrawing from the Offering
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under Section 7. To terminate his payroll deduction without withdrawing from the
Offering, an employee must submit written notice at least ten (10) business days
(or such shorter period as shall be established) before the payroll date on
which the change becomes effective. Subject to the requirements of Sections 4
and 5, an employee may either increase or decrease his payroll deduction with
respect to the next Offering by filing a new enrollment form at least ten
(10) business days before the next Offering Date (or by such other deadline as
shall be established for the Offering). An employee who has terminated his
payroll deduction during an Offering must submit a new enrollment form in order
to participate in a subsequent Offering.
7. WITHDRAWAL. An employee may withdraw from participation in the Plan by
delivering a written notice of withdrawal to his appropriate payroll location.
The employee's withdrawal will be effective as of the next business day.
Following an employee's withdrawal, the Company will promptly refund to him his
entire account balance under the Plan (after payment for any Common Stock
purchased before the effective date of withdrawal). Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Offering, but may enroll in a subsequent Offering in accordance with
Section 4.
8. GRANT OF OPTIONS. On each Offering Date, the Company will grant to each
eligible employee who is then a participant in the Plan an option ("Option") to
purchase on the last day of such Offering (the "Exercise Date"), at the Option
Price hereinafter provided for, a maximum of one thousand (1,000) shares of
Common Stock reserved for the purpose of the Plan, or such other maximum number
of shares as shall have been established by the Board or the Committee in
advance of the Offering. The purchase price for each share purchased under such
Option (the "Option Price") will be 85% of the Fair Market Value of the Common
Stock on the Offering Date or the Exercise Date, whichever is less.
Notwithstanding the foregoing, no employee may be granted an option
hereunder if such employee, immediately after the option was granted, would be
treated as owning stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any
Parent or Subsidiary (as defined in Section 11). For purposes of the preceding
sentence, the attribution rules of Section 424(d) of the Code shall apply in
determining the stock ownership of an employee, and all stock which the employee
has a contractual right to purchase shall be treated as stock owned by the
employee. In addition, no employee may be granted an Option which permits his
rights to purchase stock under the Plan, and any other employee stock purchase
plan of the Company and its Parents and Subsidiaries, to accrue at a rate which
exceeds $25,000.00 of the fair market value of such stock (determined on the
option grant date or dates) for each calendar year in which the Option is
outstanding at any time. The purpose of the limitation in the preceding
sentences is to comply with Section 423(b)(8) of the Code.
9. EXERCISE OF OPTION AND PURCHASE OF SHARES. Each employee who continues
to be a participant in the Plan on the Exercise Date shall be deemed to have
exercised his Option on such date and shall acquire from the Company such number
of whole shares of Common Stock reserved for the purpose of the Plan as his
accumulated payroll deductions on such date will purchase at the Option Price,
subject to any other limitations contained in the Plan; provided that, with
respect to the Initial Offering, the exercise of each Option shall be
conditioned on the closing of the Company's initial public offering on or before
the Exercise Date. Any amount remaining in an employee's account at the end of
an Offering solely by reason of the inability to purchase a fractional share
will be carried forward to the next Offering; any other balance remaining in an
employee's account at the end of an Offering will be refunded to the employee
promptly.
10. ISSUANCE OF CERTIFICATES. Certificates representing shares of Common
Stock purchased under the Plan may be issued only in the name of the employee,
and any other person of legal age as joint tenants with rights of survivorship,
or in the name of a broker authorized by the employee to be his, or their,
nominee for such purpose.
11. DEFINITIONS.
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The term "Compensation" means the amount of gross base pay and commissions,
prior to salary reduction pursuant to either Section 125 or 401(k) of the Code,
but excluding overtime, incentive or bonus awards, allowances and reimbursements
for expenses such as relocation allowances or travel expenses, income or gains
on the exercise of Company stock options, and similar items.
The term "Designated Subsidiary" means any present or future Subsidiary (as
defined below) that is designated from time to time by the Board or the
Committee to participate in the Plan. Subsidiaries may be so designated either
before or after the Plan is approved by the stockholders.
The term "Fair Market Value of the Common Stock" means (i) if the Common
Stock is admitted to trading on a national securities exchange or the Nasdaq
National Market, the closing price of the Common Stock on such exchange or
system for such date or, if no sales were reported for such date, for the next
preceding date for which a sale was reported, or (ii) if clause (i) does not
apply but the Common Stock is admitted to quotation on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), the average of the
highest bid and lowest asked prices of the Common Stock reported on NASDAQ for
such date, or if no bid and asked prices were reported for such date, for the
next preceding date for which such prices were reported; provided that, in the
case of the initial Offering Date under the Plan, the term "Fair Market Value of
the Common Stock" means the offering price to the public of the Common Stock on
such date.
The term "Parent" means a "parent corporation" with respect to the Company,
as defined in Section 424 (c) of the Code.
The term "Subsidiary" means a "subsidiary corporation" with respect to the
Company, as defined in Section 424(f) of the Code.
12. RIGHTS ON RETIREMENT, DEATH, OR OTHER TERMINATION OF EMPLOYMENT. If a
participating employee's employment terminates for any reason before the
Exercise Date for any Offering, no payroll deduction will be taken from any pay
due and owing to the employee and the balance in his account will be paid to him
or, in the case of his death, to his designated beneficiary as if he had
withdrawn from the Plan under Section 7. An employee will be deemed to have
terminated employment, for this purpose, if the corporation that employs him,
having been a Designated Subsidiary, ceases to be a Subsidiary, or if the
employee is transferred to any corporation other than the Company or a
Designated Subsidiary.
13. SPECIAL RULES. Notwithstanding anything herein to the contrary, the
Board or the Committee may adopt special rules applicable to the employees of a
particular Designated Subsidiary, whenever the Board or the Committee determines
that such rules are necessary or appropriate for the implementation of the Plan
in a jurisdiction where such Designated Subsidiary has employees; provided that
such rules are consistent with the requirements of Section 423(b) of the Code.
Such special rules may include (by way of example, but not by way of limitation)
the establishment of a method for employees of a given Designated Subsidiary to
fund the purchase of shares other than by payroll deduction, if the payroll
deduction method is prohibited by local law or is otherwise impracticable. Any
special rules established pursuant to this Section 13 shall, to the extent
possible, result in the employees subject to such rules having substantially the
same rights as other participants in the Plan.
14. OPTIONEES NOT STOCKHOLDERS. Neither the granting of an Option to an
employee nor the deductions from his pay shall constitute such employee a
stockholder of the shares of Common Stock covered by an Option under the Plan
until such shares have been purchased by and issued to him.
15. RIGHTS NOT TRANSFERABLE. Rights under the Plan are not transferrable
by a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
16. APPLICATION OF FUNDS. All funds received or held by the Company under
the Plan may be combined with other corporate funds and may be used for any
corporate purpose.
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17. ADJUSTMENT IN CASE OF CHANGES AFFECTING COMMON STOCK. In the event of
a subdivision of outstanding shares of Common Stock, or the payment of a
dividend in Common Stock, the number of shares approved for the Plan, and the
share limitation set forth in Section 8, shall be increased proportionately, and
such other adjustment shall be made as may be deemed equitable by the Board or
Committee. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.
18. AMENDMENT OF THE PLAN. The Board or the Committee may at any time, and
from time to time, amend the Plan in any respect, except that without the
approval, within twelve (12) months of such Board or Committee action, by the
holders of a majority of the shares of stock of the Company present or
represented and entitled to vote at a meeting of stockholders, no amendment
shall be made increasing the number of shares approved for the Plan or making
any other change that would require stockholder approval in order for the Plan,
as amended, to qualify as an "employee stock purchase plan" under
Section 423(h) of the Code.
19. INSUFFICIENT SHARES. If the total number of shares of Common Stock
that would otherwise be purchased on any Exercise Date plus the number of shares
purchased under previous Offerings under the Plan exceeds the maximum number of
shares issuable under the Plan, the shares then available shall be apportioned
among participants in proportion to the amount of payroll deductions accumulated
on behalf of each participant that would otherwise be used to purchase Common
Stock on such Exercise Date.
20. TERMINATION OF THE PLAN. The Plan may be terminated at any time by the
Board or the Committee. Upon termination of the Plan, all amounts in the
accounts of participating employees shall be promptly refunded.
21. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and deliver
Common Stock under the Plan is subject to all governmental approvals required in
connection with the authorization, issuance, or sale of such stock.
The Plan shall be governed by Delaware law except to the extent that such
law is preempted by federal law.
22. ISSUANCE OF SHARES. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the company, or from any other proper source.
23. TAX WITHHOLDING. Participation in the Plan is subject to any required
tax withholding on income of the participant in connection with the Plan. Each
employee agrees, by entering the Plan, that the Company and its subsidiaries
shall have the right to deduct any such taxes from any payment of any kind
otherwise due to the employee, including shares issuable under the Plan.
24. NOTIFICATION UPON SALE OF SHARES. Each employee agrees, by entering
the Plan, to give the Company prompt notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased.
25. EFFECTIVE DATE AND APPROVAL OF SHAREHOLDERS. The Plan shall take
effect on the effective date of the Company's first underwritten public
offering, subject to approval by the holders of a majority of the shares of
stock of the Company present or represented and entitled to vote at a meeting of
stockholders, which approval must occur within twelve (12) months of the
adoption of the Plan by the Board.
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SELFCARE, INC.
200 PROSPECT STREET
WALTHAM, MASSACHUSETTS 02453
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 9, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
1. ELECTION OF DIRECTORS:
Robert M. Oringer, Willard L. Umphrey, Ron Zwanziger
/ / FOR ALL NOMINEES / / WITHHOLD / / FOR ALL EXCEPT
If you do not wish your shares voted "For" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
2. Approval and adoption of an amendment to the Amended and Restated
Certificate of Incorporation for the purpose of changing the name of the
Company from Selfcare, Inc. to Inverness Medical Technology, Inc. (the
"Name Change Proposal").
/ / FOR / / AGAINST / / ABSTAIN
3. Authorization and approval of the increase of the number of shares
available for purchase by eligible employees of the Company under the
Company's Employee Stock Purchase Plan (the "Stock Purchase Plan") from
250,000 shares of Common Stock to 850,000 shares of Common Stock (the
"Increase in Shares under Stock Purchase Plan Proposal").
/ / FOR / / AGAINST / / ABSTAIN
4. Approval and adoption of a 2000 Stock Option and Grant Plan (the "2000
Option Plan") under which the Board of Directors, or a committee appointed
by the Board of Directors, would have the ability to grant stock options,
stock appreciation rights, and stock awards with respect to 750,000 shares
of Common Stock (the "2000 Option Plan Proposal").
/ / FOR / / AGAINST / / ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: , 2000
- -------------------------------------------------
Signature
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- -------------------------------------------------
Signature if held jointly
Please mark, sign, date and return this proxy card promptly using the
enclosed envelope.
The understood hereby appoints RON ZWANZIGER and KENNETH D. LEGG, Ph.D.,
and each of them acting singly, Proxies, with full power of substitution in
each of them, in the name, place and stead of the undersigned, to vote at the
Annual Meeting of Shareholders of Selfcare, Inc. to be held on May 9, 2000,
at 12:30 P.M. at the offices of Foley Hoag & Eliot LLP, One Post Office
Square, Boston, MA 02109, or at any adjournment or adjournments thereof,
according to the number of votes that the undersigned would be entitled to
vote if personally present, upon the matters set forth on the reverse side.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ON THE
REVERSE SIDE. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR EACH
OF THE PROPOSALS LISTED ON THE REVERSE SIDE.
Please vote, date and sign on reverse side and return promptly in the
enclosed envelope.
