<PAGE>
SCHEDULE 14A (RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
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 240.14a-11(c) or 240.14a-12
NORLAND MEDICAL SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
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2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
[NORLAND LOGO]
106 CORPORATE DRIVE PARK, SUITE 106
WHITE PLAINS, NEW YORK 10604
(914) 694-2285
April 25, 2000
To the Stockholders of Norland Medical Systems, Inc.:
The Annual Meeting of Stockholders of Norland Medical Systems, Inc.
(the "Company") will be held on June 1, 2000, at 10:00 a.m. at the Rye Courtyard
By Marriott, 631 Midland Avenue, Rye, New York 10580.
Details of the business to be conducted at the Annual Meeting are
provided in the enclosed Notice of Annual Meeting of Stockholders and Proxy
Statement. The Company's 1999 Annual Report is also enclosed and provides
additional information regarding the financial results of the Company during the
fiscal year ended December 31, 1999.
On behalf of the Board of Directors and employees of the Company, I
cordially invite all stockholders to attend the Annual Meeting. It is important
that your shares be voted on matters that come before the meeting. Whether or
not you plan to attend the meeting, I urge you to promptly complete, sign, date
and return the enclosed proxy card in the prepaid envelope provided.
Sincerely,
/s/ Reynald G. Bonmati
REYNALD G. BONMATI
President and Chairman of the Board
of Directors
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 1, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Norland Medical Systems, Inc., a Delaware corporation (the "Company"), will be
held at the Rye Courtyard By Marriott, 631 Midland Avenue, Rye, New York 10580,
at 10:00 a.m. on June 1, 2000, for the following purposes:
i. To elect six directors to hold office until the Company's Annual
Meeting of Stockholders to be held in 2001.
ii. To consider and act upon a proposal to approve and adopt an
amendment to the Company's Amended and Restated 1994 Stock Option Plan to
increase the aggregate number of shares for which Options may be granted under
the plan from 2,250,000 to 3,000,000.
iii. To consider and act upon a proposal to approve and adopt the
Company's 2000 Non-Employee Directors' Stock Option Plan.
iv To consider and act upon a proposal to ratify the selection of
Deloitte & Touche LLP as the Company's independent accountants for 2000; and
v. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
The close of business on April 17, 2000 has been fixed as the record
date for determining the stockholders entitled to notice of and to vote at the
Annual Meeting. Only holders of record of Common Stock of the Company at that
date are entitled to vote at the Annual Meeting or any adjournment(s) thereof.
By Order of the Board of Directors,
/s/ Robert J. Larson
ROBERT J. LARSON
Secretary
White Plains, N.Y.
April 25, 2000
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY
IN THE ACCOMPANYING ENVELOPE EVEN IF YOU INTEND TO BE PRESENT AT THE MEETING.
RETURNING THE PROXY WILL NOT LIMIT YOUR RIGHT TO VOTE IN PERSON OR TO ATTEND THE
ANNUAL MEETING, BUT WILL ENSURE YOUR REPRESENTATION IF YOU CANNOT ATTEND. IF YOU
HOLD SHARES IN MORE THAN ONE NAME, OR IF YOUR STOCK IS REGISTERED IN MORE THAN
ONE WAY, YOU MAY RECEIVE MORE THAN ONE COPY OF THE PROXY MATERIAL. IF SO, PLEASE
SIGN AND RETURN EACH OF THE PROXY CARDS THAT YOU RECEIVE SO THAT ALL OF YOUR
SHARES MAY BE VOTED. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE.
<PAGE>
[NORLAND LOGO]
106 CORPORATE PARK DRIVE, SUITE 106
WHITE PLAINS, NEW YORK 10604
(914) 694-2285
April 25, 2000
PROXY STATEMENT
This Proxy Statement is being mailed on or about April 27, 2000, to
holders of record as of April 17, 2000, of Common Stock, par value $.0005 per
share ("Common Stock"), of Norland Medical Systems, Inc. (the "Company") in
connection with the solicitation by the Board of Directors of the Company of a
proxy in the enclosed form for the Annual Meeting of Stockholders of the Company
to be held on June 1, 2000.
A proxy card is enclosed for your use. YOU ARE REQUESTED ON BEHALF OF
THE BOARD OF DIRECTORS TO SIGN, DATE AND RETURN THE PROXY CARD IN THE
ACCOMPANYING ENVELOPE, which requires no postage if mailed in the United States.
If no instructions are specified on the proxy, shares represented
thereby will be voted (i) for the election of the six nominees listed herein as
directors of the Company, (ii) in favor of the adoption of the amendment to the
Company's amended and restated 1994 Stock Option Plan increasing the number of
shares available for grant from 2,250,000 to 3,000,000, (iii) in favor of the
adoption of the Company's 2000 Non-Employee Directors' Stock Option Plan, (iv)
in favor of the ratification of the appointment of Deloitte & Touche LLP as the
Company's independent accountants for 2000 and (v) in the discretion of the
holder of the proxy on all other matters that may properly come before the
Annual Meeting.
Any stockholder who has given a proxy may revoke his or her proxy by
executing a proxy bearing a later date or by delivering written notice of
revocation of his or her proxy to the Secretary of the Company at the Company's
executive offices at any time prior to the meeting or any postponement or
adjournment thereof. Any stockholder who attends in person the Annual Meeting or
any postponement or adjournment thereof may revoke any proxy previously given
and vote by ballot.
As of April 17, 2000, there were 27,045,166 shares of Common Stock
issued and outstanding. The presence of the holders of a majority of the issued
and outstanding shares of Common Stock entitled to vote at the Annual Meeting,
either in person or represented by properly executed proxies, is necessary to
constitute a quorum for the transaction of business at the Annual Meeting.
Abstentions and broker "non-votes" (which result when a broker holding shares
for a beneficial owner has not received timely voting instructions on certain
matters from such beneficial owner) will be counted for purposes of determining
the existence of a quorum at the Annual Meeting. If there are not sufficient
shares represented in person or by proxy at the meeting to constitute a quorum,
the meeting may be postponed or adjourned in order to permit further
solicitation of proxies by the Company. Proxies given pursuant to this
solicitation and not revoked will be voted at any postponement or adjournment of
the Annual Meeting in the manner set forth above.
<PAGE>
The election of directors will be determined by a plurality of the
votes cast by holders of shares of Common Stock, and the approval of any other
matters will require the affirmative vote of holders of a majority of the votes
cast at the Annual Meeting in person or represented by duly executed proxies and
entitled to vote on the subject matter. Cumulative voting for the election of
directors is not permitted. Abstentions will be treated as shares present and
entitled to vote for purposes of determining the presence of a quorum but will
not be counted as votes for or against any given matter. Shares relating to any
proxy as to which a broker non-vote is indicated will be considered present and
entitled to vote for determining the presence of a quorum, but will not be
considered present and entitled to vote with respect to any matter as to which
the broker has indicated on the proxy that the broker does not have
discretionary authority to vote the shares. Accordingly, in the case of shares
that are present at the Annual Meeting for quorum purposes, not voting such
shares for a particular nominee for director will not prevent the election of
such nominee if other stockholders vote for such nominee. Broker non-votes will
have no effect on the outcome of the vote on any proposals.
The expense of preparing, printing and mailing proxy solicitation
materials will be borne by the Company. In addition, certain directors,
officers, representatives and employees of the Company may solicit proxies by
telephone and personal interview. Such individuals will not receive additional
compensation from the Company for solicitation of proxies, but may be reimbursed
for reasonable out-of-pocket expenses in connection with such solicitation.
Banks, brokers and other custodians, nominees and fiduciaries also will be
reimbursed by the Company for their reasonable expenses for sending proxy
solicitation materials to the beneficial owners of Common Stock.
The Company's Annual Report to Stockholders for the year ended December
31, 1999, which contains the Company's Form 10-K for such year including
financial statements, is being mailed to all stockholders entitled to vote at
the Annual Meeting. The Annual Report does not constitute a part of the proxy
solicitation material.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's By-Laws authorize the Board of Directors to fix the
number of directors of the Company. Currently, the number is fixed at six. The
Board of Directors has nominated the six persons named below to serve as
directors until the next Annual Meeting of Stockholders or until their earlier
resignation or removal. Each nominee is presently a director of the Company.
Each of the directors was reelected to the Board at the 1999 Annual Meeting of
Stockholders. If any of the nominees should be unavailable to serve for any
reason (which is not anticipated), the Board of Directors may (i) designate a
substitute nominee or nominees, in which case the persons named on the enclosed
proxy card will vote all valid proxy cards for the election of such substitute
nominee, (ii) allow the vacancy to remain open until a suitable candidate or
candidates are located or (iii) by resolution provide for fewer directors.
Proxies for this Annual Meeting may not be voted for more than six nominees.
NOMINEES FOR ELECTION AT THIS ANNUAL MEETING
JEREMY C. ALLEN, age 51, has served as a Director of the Company since October
1997. He has also been a special marketing consultant to the Company since
October 1997. From January 1992 until August 1995 and since May 1997 to the
present, Mr. Allen has been a marketing and general management consultant in the
health care area. From August 1995 until May 1997, he was Vice President,
Marketing, Osteoporosis, of Merck & Co., Inc.
2
<PAGE>
JAMES J. BAKER, age 68, has served as a Director of the Company since May 1995.
He has been a private investor for over thirteen years, specializing in start-up
venture capital. He is a consultant to Flight Landata, Inc., a company involved
in multi-spectral remote sensing. Previously, Mr. Baker spent twelve years at
Cullinet Software Corporation serving initially as Vice President in charge of
technical development and later as Senior Vice President in charge of customer
support. He holds a B.S. in Mathematics from the Massachusetts Institute of
Technology.
REYNALD G. BONMATI, age 52, has served as a Director of the Company since its
formation in December 1993 and has served as Chairman of the Board, President
and Treasurer of the Company since January 1994. Mr. Bonmati is President of
Bionix L.L.C., a private distributor of medical devices. Mr. Bonmati has served
since January 1992 as a Managing Director of NMS BV, the holding company that
formerly owned Stratec. He has also served as President of Novatech Resource
Corporation, a private investment firm, since 1981, as President of Novatech
Management Corporation, a private investment firm, since 1990, and as Managing
Partner of Bones L.L.C. a private investment firm since 1998. Mr. Bonmati
received B.S. and M.S. degrees from the Institute National Superieur de Chimie
Industrielle, an M.S. degree from the Ecole Nationale Superieure du Petrole et
des Moteurs and an M.B.A. from the University of Paris.
MICHAEL W. HUBER, age 73, has served as a Director of the Company since May
1995. He is the retired Chairman and Chief Executive Officer and is currently a
Director of J.M. Huber Corporation, a diversified family-owned company engaged
in natural resource development, and specialty chemical and specialty equipment
and wood product manufacturing.
ANDRE-JACQUES NEUSY, age 56, has served as a Director of the Company since
September 1997. Dr. Neusy is a Research Scientist and Attending Physician at
Tisch Hospital Center/NYU Medical Center and the Medical Director of the
Dialysis Unit and Chief of Nephrology at Bellevue Hospital Center in New York
City. He has been associated with both hospitals since 1978. Dr. Neusy is also
Associate Professor of Clinical Medicine at New York University School of
Medicine and Attending Physician in Nephrology at the New York Veteran's
Administration Hospital. Dr. Neusy received a B.A. Degree from the International
School in Lubumbashi, Zaire, and an M.D. degree from the Free University of
Brussels Medical School.
ALBERT S. WAXMAN, age 60, has served as a Director of the Company since January
1994. Dr. Waxman has been Senior Managing Partner of Psilos Group Managers, LLC,
an investment firm, since 1998. From 1993 to 1998, he was Chairman and Chief
Executive Officer of Merit Behavioral Care Corporation, the parent company of
American Biodyne, Inc., which he co-founded in 1985 and for which he served as
Chairman and Chief Executive Officer from 1988 to 1993. Dr. Waxman has served as
a Managing Director of Norland Medical Systems B.V. since January 1992. Dr.
Waxman received a B.S.E.E. degree from City College of New York and M.A. and
Ph.D. degrees from Princeton University. He serves on the Advisory Council of
Princeton University's School of Engineering and Applied Sciences.
VOTE REQUIRED FOR APPROVAL
The vote of a plurality of holders of the outstanding shares of Common
Stock present in person or represented by duly executed proxies at the Annual
Meeting for the election of a given nominee is necessary to elect such nominee
as a director of the Company. Accordingly, the six director nominees receiving
the greatest number of votes cast will be elected, regardless of the number of
votes withheld for the election of such director nominees. Shares represented by
an executed proxy in the form enclosed will, unless otherwise directed, be voted
for the election of the six persons nominated to serve as directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
ELECTION OF THE SIX PERSONS NOMINATED TO SERVE AS DIRECTORS.
3
<PAGE>
BOARD ORGANIZATION AND MEETINGS
During the year ended December 31, 1999, the Board of Directors held 5
meetings and acted on 2 other occasion by unanimous written consent. Each
Director attended at least 75% of the meetings of the Board of Directors and
committees of the Board of Directors ("Committees") held in 1999 during his
tenure as a Director or Committee member.
There are two standing Committees:
AUDIT COMMITTEE. The Audit Committee was established in June 1995. The
Audit Committee consists of Jeremy C. Allen and Michael W. Huber. The Audit
Committee: (i) makes recommendations to the Board of Directors with respect to
the independent accountants who conduct the annual audit of the Company's
accounts; (ii) reviews the scope of the annual audit and meets periodically with
the Company's independent accountants to review their findings and
recommendations; (iii) approves major accounting policies or changes thereto;
and (iv) periodically reviews principal internal controls to assure that the
Company is maintaining a sound and modern system of financial controls. The
Audit Committee held 1 meeting in 1999. A number of actions that could have been
taken by the Audit Committee in 1999 were taken by action of the full Board of
Directors.
COMPENSATION COMMITTEE. The Compensation Committee was established in
June 1995. The Compensation Committee consists of Albert S. Waxman, James J.
Baker, Michael W. Huber and Andre-Jacques Neusy. The Compensation Committee
periodically determines the amount and form of compensation and benefits payable
to all principal officers and certain other management personnel. This Committee
also performs duties of administration with respect to the Company's Amended and
Restated 1994 Stock Option and Incentive Plan (the "1994 Plan"). The
Compensation Committee held 1 meeting during 1999, and acted on 4 other
occasions by unanimous written consent.
DIRECTORS' REMUNERATION
During the year ended December 31, 1999, fees for all directors
aggregated $5,000. Each director of the Company who is not an employee of or
consultant to the Company or any subsidiary (a "Non-Employee Director") received
$1,000 for each regular Board meeting attended and is reimbursed for all
expenses relating to attendance at meetings. Director's fees were discontinued
as of June 2, 1999. Under the 2000 Non-Employee Directors' Stock Option Plan,
each Non-Employee Director receives options to acquire 5,000 shares of Common
Stock, vesting in four equal annual installments, commencing on the first
anniversary of the date of grant, at an exercise price per share not lower than
the fair market value on the date of grant. The grant is effective on the date
of the Director's election or re-election to the Company's Board of Directors.
For Mr. Allen, Mr. Baker, Dr. Neusy, Mr. Huber and Dr. Waxman, 50,000 options
were granted on June 2, 1999 at an exercise price of $0.67 per share. Directors
who are employees of the Company do not receive additional compensation for
serving as directors. No member of the Board of Directors was paid compensation
during the 1999 fiscal year for his service as a director of the Company other
than pursuant to the standard compensation arrangements described above.
4
<PAGE>
PROPOSAL 2
PROPOSAL TO INCREASE THE AGGREGATE NUMBER OF SHARES FOR WHICH OPTIONS
MAY BE GRANTED PURSUANT TO THE COMPANY'S AMENDED AND RESTATED 1994 STOCK OPTION
PLAN.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares of Common Stock cast
in person or represented by proxies at the Annual Meeting and entitled to vote
is required to approve the amendment to the Company's Amended and Restated 1994
Stock Option Plan.
GENERAL
The Board of Directors is submitting to shareholders for ratification
the approval by the Board of Directors of an amendment to the Company's Amended
and Restated Stock Option Plan ("Option Plan") increasing by 750,000 the number
of shares of Common Stock available for the grant of stock options. When
initially adopted in 1994, 2,250,000 shares were allocated to the Plan. At
December 31, 1999, 665,000 shares were available for grant under the Plan. A
copy of the Option Plan as amended by the directors is included as Exhibit A to
this Proxy Statement, and the following description is qualified in its entirety
by the full text of the Option Plan.
The Purpose of the Option Plan is to provide additional compensation
incentives for high levels of performance and productivity by officers and
management employees of the company's operations. The Option Plan is intended to
strengthen the company's existing operation and its ability to attract and
retain outstanding management employees upon whose judgment, initiative and
efforts the continued success, growth and development of the Company are
dependent.
Officers, Directors and other employees of the Company or any
subsidiary or other affiliate of the Company are eligible for selection to
participate in the Option Plan. No determination has yet been made as to the
employees who will be selected to participate and receive awards, the number of
such awards to be granted or the amounts of awards to be distributed under the
Option Plan in the future. The Board of Directors believes that the number of
shares of Common Stock reserved for use under the Option Plan should be
increased in order that stock-based awards continue to be available for grant.
SHARES SUBJECT TO THE PLAN
Awards granted under the Option Plan relate to shares of the Company's
Common Stock. Such shares may be made available either from authorized and
unissued shares, shares held by the Company in its treasury or reacquired
shares. No awards may be granted more than ten years after the effective date of
the Option Plan.
Any shares of Common Stock which were issued and have been forfeited or
were subject to awards under the Option Plan which have expired or terminated
for any reason remain available for issuance with respect to the granting of
awards during the term of the Option Plan.
The number and kind of securities as well as the terms of the
securities which may be issued under the Option Plan and pursuant to then
outstanding awards are subject to adjustments resulting from any
recapitalization, reclassification, stock dividend, split-up or consolidation of
shares of Common Stock, merger or consolidation of the Company, or other event
affecting the Common Stock.
5
<PAGE>
ADMINISTRATION
The Compensation Committee of the Board of Directors and the full Board
have authority to administer the Plan. They have the authority, among other
things, to: (i) select the officers and other key employees and consultants
entitled to receive awards under the Plan; (ii) determine the type or types of
awards; (iii) determine the number of shares of Common Stock or rights covered
by an award; and (iv) determine the terms and conditions of any awards granted
under the Plan, including, any restrictions or limitations on transfer, any
vesting schedules or the acceleration thereof and any forfeiture provisions or
waivers thereof. The exercise price at which shares of Common Stock may be
purchased pursuant to the grant of stock options under the Plan and the grant
price of an SAR are determined at the time of grant. In no event may any one
individual receive in any one year options for, or SARs which relate to, more
than 180,000 shares of Common Stock.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OPTION PLAN
The following is a brief summary of the Federal income tax aspects of
awards to be made under the Option Plan based upon the Code and other statutes,
regulations and interpretations in effect on the date hereof. This summary is
not intended to be exhaustive, and does not describe state, local, estate or
other tax consequences.
INCENTIVE OPTIONS. The participant will recognize no taxable income
upon the grant or exercise of an Incentive Option. Upon a disposition of the
shares after the later of two years from the date of grant and one year after
the transfer of the shares to the participant, (i) the participant will
recognize the difference, if any, between the amount realized and the exercise
price as long-term capital gain or long-term capital loss (as the case may be)
if the shares are capital assets; and (ii) the Company will not qualify for any
deduction in connection with the grant or exercise of the options. The excess,
if any, of the fair market value of the shares on the date of exercise of an
Incentive Option over the exercise price will be treated as an item of
adjustment for a participant's taxable year in which the exercise occurs and may
result in an alternative minimum tax liability for the participant. In the case
of a disposition of shares in the same taxable year as the exercise, where the
amount realized on the disposition is less than the fair market value of the
shares on the date of exercise, there will be no adjustment since the amount
treated as an item of adjustment, for alternative minimum tax purposes, is
limited to the excess of the amount realized on such disposition over the
exercise price which is the same amount included in regular taxable income.
If Common Stock acquired upon the exercise of an Incentive Option is
disposed of prior to the expiration of the holding periods described above, (i)
the participant will recognize ordinary compensation income in the taxable year
of disposition in an amount equal to the excess, if any, of the lesser of the
fair market value of the shares on the date of exercise or the amount realized
on the disposition of the shares, over the exercise price paid for such shares;
and (ii) the Company will qualify for a deduction equal to any such amount
recognized, subject to the limitation that the compensation be reasonable and
other applicable limitations under the Code. The participant will recognize the
excess, if any, of the amount realized over the fair market value of the shares
on the date of exercise, if the shares are capital assets, as short-term or
long-term capital gain, depending on the length of time that the participant
held the shares, and the Company will not qualify for a deduction with respect
to such excess.
Subject to certain exceptions for death, if an Incentive Option is
exercised more than three months following the termination of the participant's
employment, the option will generally be taxed as a nonqualified stock option.
See "Nonqualified Options" below.
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<PAGE>
AMENDMENT, TERMINATION AND EXPIRATION
The Option Plan is subject to amendment or termination at any time by
the Company's Board of Directors. However, no amendment will become effective
unless approved by affirmative vote of the shareholders of the Company if such
approval is necessary or desirable in the judgment of the Board of Directors for
the continued validity of the Option Plan or its compliance with Rule 16b-3 or
any successor rule under the Exchange Act or any other rule or regulation.
PROPOSED AMENDMENT
If approved by the shareholders, the proposed amendment to the Option
Plan would increase the number of shares of Common Stock available for grant
under the Option Plan by an additional 750,000 shares. No other changes to the
Option Plan are contemplated by the proposed amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR APPROVAL OF THE AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED 1994 STOCK
OPTION PLAN.
PROPOSAL 3
PROPOSAL TO ADOPT THE COMPANY'S 2000 NON-EMPLOYEE DIRECTORS' STOCK
OPTION PLAN.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares of Common Stock cast
in person or represented by proxies at the Annual Meeting and entitled to vote
is required to approve the Company's 2000 Non-Employee Directors' Stock Option
Plan ("Directors' Option Plan").
GENERAL
The Board of Directors is submitting to shareholders for ratification
the approval by the Board of Directors the Company's 2000 Non-Employee
Directors' Stock Option Plan. A copy of the Directors' Option Plan is included
as Exhibit B to this Proxy Statement, and the following description is qualified
in its entirety by the full text of the Option Plan.
The Purpose of the Directors' Option Plan is to provide compensation
incentives for non-employee Directors of the Company. The Directors' Option Plan
is intended to strengthen the company's existing operation and its ability to
attract and retain outstanding Directors upon whose judgment, initiative and
efforts the continued success, growth and development of the Company are
dependent.
Non-employee Directors duly elected by the shareholders of the Company
are eligible for selection to participate in the Option Plan. Options for 5,000
shares of Common Stock will be automatically granted under the 2000 Directors'
Option Plan to each person who is elected or re-elected a non-employee Director
on the date of the Annual Meeting of Shareholders of the Company in each of the
years 2000 through 2004. In addition, each non-employee Director will be granted
options for 50,000 shares of Common Stock for his election on June 2, 1999.
The options will be priced at the fair market value on the last trading
day preceding the date of the grant. All options vest in equal annual
installments over a period of four years.
7
<PAGE>
SHARES SUBJECT TO THE PLAN
Awards granted under the Directors' Option Plan relate to shares of the
Company's Common Stock. Such shares may be made available either from authorized
and unissued shares, shares held by the Company in its treasury or reacquired
shares. No awards may be granted more than five years after the effective date
of the Directors' Option Plan. 500,000 shares have been reserved for issuance
under this plan.
The number and kind of securities as well as the terms of the
securities which may be issued under the Directors' Option Plan and pursuant to
then outstanding awards are subject to adjustments resulting from any
recapitalization, reclassification, stock dividend, split-up or consolidation of
shares of Common Stock, merger or consolidation of the Company, or other event
affecting the Common Stock.
ADMINISTRATION
The Compensation Committee of the Board of Directors and the full Board
have authority to administer the Plan. They have the authority to adopt rules
and regulations for carrying out the Directors' Option Plan. The Board may amend
the terms and conditions of any option granted under the Directors' Option Plan.
AMENDMENT, TERMINATION AND EXPIRATION
The Directors' Option Plan is subject to amendment or termination at
any time by the Company's Board of Directors. However, no amendment will become
effective unless approved by affirmative vote of the shareholders of the Company
if such approval is necessary or desirable in the judgment of the Board of
Directors for the continued validity of the Directors' Option Plan or its
compliance with Rule 16b-3 or any successor rule under the Exchange Act or any
other rule or regulation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR APPROVAL OF THE COMPANY'S 2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN.
PROPOSAL 4
APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee of the Board of Directors,
and subject to ratification by the stockholders, the Board of Directors has
appointed Deloitte & Touche LLP as independent accountants to audit the
Company's consolidated financial statements for the fiscal year ending December
31, 2000. Deloitte & Touche LLP has served as the Company's independent
accountants since November 13, 1998 and performed the audit of the Company's
1998 and 1999 financial statements. Representatives of Deloitte & Touche LLP are
expected to be present at the Annual Meeting and will have the opportunity to
make a statement, if they so desire, and to respond to appropriate questions
from those attending the meeting.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares of Common Stock cast
in person or represented by proxies at the Annual Meeting and entitled to vote
is required to appoint the Company's independent accountants.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT
ACCOUNTANTS TO AUDIT THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR 2000.
8
<PAGE>
STOCK OWNERSHIP
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of April 20, 2000 (except as
otherwise indicated) by (i) each person known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock, (ii) each
director and nominee to be a director, (iii) each named executive officer and
(iv) all directors and executive officers as a group. Except as otherwise
indicated below, each of the persons named in the table has sole voting and
investment power with respect to the shares set forth opposite such person's
name.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AMOUNT OF BENEFICIAL OWNERSHIP
------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME OF BENEFICIAL OWNER SHARES PERCENT
- ------------------------ ------ -------
- --------------------------------------------------------------------------------
<S> <C> <C>
Reynald G. Bonmati (2) 14,351,931 52.6%
- --------------------------------------------------------------------------------
Albert S. Waxman (3) 1,728,078 6.3
- --------------------------------------------------------------------------------
Robert S. Larson (4) 200,000 *
- --------------------------------------------------------------------------------
Ralph J. Cozzolino (4) 22,250 *
- --------------------------------------------------------------------------------
Terry A. Pope (4) 1,250 *
- --------------------------------------------------------------------------------
James J. Baker (5) 337,790 1.2
- --------------------------------------------------------------------------------
Michael W. Huber (3) 328,349 1.2
- --------------------------------------------------------------------------------
Andre-Jacques Neusy (4) 27,500 *
- --------------------------------------------------------------------------------
Jeremy C. Allen (6) 43,000 *
- --------------------------------------------------------------------------------
All directors and officers of the
Company as a group (9
persons) (2), (3), (4), (5), and (6) 17,040,148 62.0
- --------------------------------------------------------------------------------
Hans Schiessl (7) 11,101,917 41.0
Markgrafenstrasse 8
75117 Pforzheim
Germany
- --------------------------------------------------------------------------------
Bones, L.L.C. (8) 9,976,917 36.9
Premium Point
New Rochelle, NY 10801
- --------------------------------------------------------------------------------
Norland Medical Systems B.V 500,000 1.8
Admiraliteskade 50
3063 ED Rotterdam
P.O. Box 4433
3006 AK Rotterdam
The Netherlands
- --------------------------------------------------------------------------------
</TABLE>
- ----------
* Less than 1%.
9
<PAGE>
(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Under Rule 13d-3(d), shares not
outstanding that are subject to options, warrants, rights or conversion
privileges exercisable within 60 days are deemed outstanding for the
purpose of calculating the number and percentage owned by such person,
but not deemed outstanding for the purpose of calculating the
percentage owned by any other person.
(2) Includes 231,250 shares issuable pursuant to stock options exercisable
within 60 days. Includes 3,371,155 shares held of record by Novatech
Management Corporation, 87,842 shares held of record by Novatech
Resource Corporation, 500,000 shares held of record by Norland Medical
Systems B.V., and 9,476,917 shares held of record by Bones, L.L.C.,
that Mr. Bonmati may be deemed to beneficially own due to his
relationship with such entities. Mr. Bonmati is President and a
principal stockholder of Novatech Resource Corporation. Mr. Bonmati is
a managing director of Norland Medical Systems B.V. and a managing
member of Bones, L.L.C. Such beneficial ownership is disclaimed by Mr.
Bonmati, except to the extent of his proportionate interest in such
entities. Also includes 125,966 shares held by Mr. Bonmati's wife, as
trustee for their children, with respect to which Mr. Bonmati disclaims
beneficial ownership.
(3) Includes 42,500 shares issuable pursuant to stock options exercisable
within 60 days.
(4) Consists solely of shares issuable pursuant to stock options
exercisable within 60 days.
(5) Includes 42,500 shares issuable pursuant to stock options exercisable
within 60 days. Also includes 295,290 shares held by Mr. Baker's wife,
with respect to which Mr. Baker disclaims beneficial ownership.
(6) Includes 37,500 shares issuable pursuant to stock options exercisable
within 60 days. Also includes 5,500 shares owned by Mr. Allen's wife,
with respect to which Mr. Allen disclaims beneficial ownership.
(7) Includes 500,000 shares held of record by Norland Medical Systems B.V.
and 9,476,917 shares held of record by Bones, L.L.C., that Mr. Schiessl
may be deemed to beneficially own due to his relationship with such
entities. Mr. Schiessl is a managing director of Norland Medical
Systems B.V. He is also a managing member of Bones, L.L.C. Such
beneficial ownership is disclaimed by Mr. Schiessl, except to the
extent of his proportionate interest in such entities.
(8) Includes 500,000 shares held of record by Norland Medical Systems B.V.
that Bones, L.L.C. may be deemed to beneficially own due to its
ownership of Norland Medical Systems B.V
10
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides, for the periods indicated, certain
summary information concerning the cash and non-cash compensation earned by or
awarded to the Company's President (the chief executive officer) and each of the
other most highly compensated (defined as cash compensation exceeding $100,000)
executive officers who were serving as executive officers as of December 31,
1999 (collectively, the "named executive officers"):
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS (#)(1) COMPENSATION($)(2)
<S> <C> <C> <C> <C> <C>
Reynald G. Bonmati 1999 $400,000 $ 0 135,000 $3,232
Chairman of the Board, President 1998 303,500 0 360,000 3,271
and Treasurer 1997 195,741 0 180,000 3,137
Kurt W. Streams 1999 120,000 138,794 -- 732
Vice President, Finance and 1998 119,415 0 40,000 762
Secretary 1997 101,038 0 40,000 723
Ralph J. Cozzolino 1999 149,800 0 8,000 1,630
Vice President, Sales 1998 149,603 0 27,000 2,178
And Marketing 1997 86,050 0 26,000 2,195
</TABLE>
- ----------
(1) Represents shares of Common Stock issuable upon exercise of options
granted to the named executive officers.
(2) Represents life insurance and long-term disability premiums paid by the
Company, and, for Messrs. Bonmati, and Cozzolino, also includes $2,500,
and $898, respectively, of Company contributions to 401(k) plan.
11
<PAGE>
EMPLOYMENT AGREEMENTS
In 1998 the Company entered into a three-year Employment Agreement with
Reynald G. Bonmati, Chairman of the Board, President and a director of the
Company. The term of the Employment Agreement is from May 1, 1998 to April 30,
2001. Mr. Bonmati's base salary of $400,000 is subject to increases to reflect
cost of living increases, as shown by the Consumer Price Index for the New
York-Northwestern New Jersey area. The base salary may also be increased upon
annual review by the Compensation Committee. Mr. Bonmati is also entitled to an
annual bonus payment equal to 5% of the Company's annual consolidated income
before taxes, payable within 30 days after the release of the Company's audited
financial statements for such year. No bonus was payable with respect to 1999.
Following the end of each fiscal quarter during the term of the Employment
Agreement, commencing with the quarter ending March 31, 1999, Mr. Bonmati is to
be granted options under the 1994 Plan to purchase up to 45,000 shares of the
Company's Common Stock. Such options are to be granted two days after the
Company announces its earnings for such quarter. The exercise price will be the
closing price of the Company's Common Stock on the date of grant, and the
options will vest in four equal annual installments. The Company's obligation to
grant such options is subject to sufficient shares being available for grant. If
the Company terminates Mr. Bonmati's employment during the term of the
Employment Agreement, other than for cause, all unvested options will be deemed
vested, and all vested options will be exercisable at any time during the period
ending on the first anniversary date of such termination.
OPTION GRANTS/EXERCISES IN 1999
The following table sets forth certain information concerning grants of
stock options made during the fiscal year ended December 31, 1999 to the named
executive officers.
12
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------------------------------------------------
PERCENTAGE
OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SECURITIES GRANTED TO ANNUAL RATES OF STOCK
UNDERLYING EMPLOYEES EXERCISE PRICE APPRECIATION FOR
OPTIONS IN OR OPTION TERM (2)
GRANTED FISCAL YEAR BASE PRICE EXPIRATION -------------------------------
NAME (#)(1) (%) ($/SH) DATE 5% ($) 10% ($)
- ------------------------------ --------------- ------------ ---------- ------------ --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Reynald G. Bonmati........ 45,000 28.5 0.35 4/15/09 $25,655 $ 40,851
45,000 28.5 0.5937 8/14/09 43,522 69,302
45,000 28.5 0.40625 11/10/09 29,778 47,417
Ralph J. Cozzolino........ 5,000 0.3 0.67 1/13/09 5,456 8,689
3,000 0.2 0.53125 4/2/09 2,590 4,134
</TABLE>
- ----------
(1) All options were granted pursuant to the 1994 Plan. These options are
incentive stock options, except those granted to Mr. Bonmati, which are
non-qualified stock options. All options become exercisable on each
anniversary of the date of grant in four equal installments.
(2) Pursuant to Securities and Exchange Commission rules, the table shows
the value of the options at the end of the option terms (ten years) if
the underlying market price of the Common Stock were to appreciate in
value from the price of the date of grant to the end of the option term
at annualized rates of 5% and 10%. These amounts represent certain
assumed rates of appreciation only. Actual gains, if any, on stock
option exercises are dependent upon the future performance of the
Common Stock and overall market conditions. There can be no assurance
that the amounts reflected in this table will be achieved.
The following table sets forth certain information concerning the
exercise of options to purchase Common Stock of the Company during 1999 and the
value at December 31, 1999 of outstanding options held by each of the named
executive officers.
13
<PAGE>
OPTION EXERCISES IN 1999 AND VALUE OF OPTIONS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED
HELD AT IN-THE-MONEY(1) OPTIONS AT
YEAR END (#) YEAR END ($)(2)
----------------------------- -----------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Reynald G. Bonmati 0 $ 0 142,500 497,500 $ 0 $13,669
Ralph J. Cozzolino 0 0 15,000 27,000 0 925
</TABLE>
- ----------
(1) Options are "in-the-money" if the closing market price of the Company's
Common Stock exceeds the exercise price of the options.
(2) The exercise prices of all such options exceeded $0.53, the closing
price of a share of the Company's Common Stock on December 31, 1999
except as follows: Mr. Bonmati had 90,000 unexercisable options "in the
money" and Mr. Cozzolino had 10,000 unexercisable options "in the
money."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL. The Company's Compensation Committee is composed of four
independent, Non-Employee Directors. The Committee and the Board of Directors
believe that compensation must be competitive, but that it should be directly
and materially linked to the Company's performance. The compensation program is
designed to attract and retain executive talent, to motivate executives to
maximize operating performance, to provide an opportunity to measure performance
on an individual basis, as well as on an overall Company-wide basis, and to link
executive and stockholder interests through the grant of stock options.
The key components of the Company's executive compensation program
consist of salary, bonuses and stock options. The Committee's policy with
respect to each of these elements, including the basis of the compensation
awarded to Mr. Bonmati, the Company's President, are discussed below. Through
these programs, a very significant portion of the Company's executive
compensation is linked to performance and the alignment of executive interests
with those of stockholders. The long-term compensation of all Company executive
officers consists of stock options; the short term compensation consists of base
salary and, in certain cases, bonuses.
BASE SALARY. The Company has established base salary levels based upon
competitive market pay rates, each executive's role in the Company and each
executive's performance over time (including, where relevant, executives'
performance prior to joining the Company). Base salaries for executives are
reviewed annually based on a variety of factors, including individual
performance, market salary levels for comparable positions within comparable
companies and the Company's overall financial results, and may be adjusted to
reflect such factors. In the case of Mr. Cozzolino, a portion of his
compensation is based upon commissions.
BONUSES. At the end of each year, bonuses for executive officers may be
recommended by the Company and reviewed and approved by the Committee. Any such
bonuses will be payable out of a bonus
14
<PAGE>
pool determined by the Board of Directors or the Compensation Committee, and
will be determined by measuring such officer's performance, the performance of
the operations for which officer has primary responsibility and the Company's
overall performance against target performance levels to be established by the
Compensation Committee. No bonuses were awarded to any executive officer with
respect to 1999, except for a $138,794 bonus that was awarded to the Vice
President, Finance who resigned effective March 24, 2000.
STOCK OPTIONS. The Committee believes that aligning management's
interest with those of stockholders is an important element of the Company's
executive compensation plan. Stock options align the interests of employees and
stockholders by providing value to the executive through stock price
appreciation only. At December 31, 1999, there were outstanding under the 1994
Plan options to purchase an aggregate of 952,000 shares of Common Stock. In all
cases, the exercise prices of these options are not less than the fair market
value of the Common Stock on the grant dates.
Future awards of stock options will be made periodically at the
discretion of the Compensation Committee, in certain cases based upon
recommendations of the Company's President. The size of such grants, in general,
will be evaluated by regularly assessing competitive market practices, the
individual's position and level of responsibility within the Company, and the
overall performance of the Company, including its historic financial success and
its future prospects. The Company believes that stock options are the single
most important element in providing incentives for management performance and
intends to continue to plan to award significant stock options to officers and
key employees.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Effective May 1, 1998, the
Company entered into the Employment Agreement with Mr. Bonmati described above
(see "Executive Compensation--Employment Agreements"). The Compensation
Committee was of the view that it was critically important to the Company that
it be able to demonstrate concretely to third parties with whom the Company
deals (E.G., potential customers and potential sources of financing) Mr.
Bonmati's commitment to the Company for the long term. Under the Employment
Agreement, Mr. Bonmati's base salary for 1998 was $300,000 and effective January
1, 1999, his base salary was increased to $400,000. No bonus was earned by Mr.
Bonmati for 1999.
On January 2, 1998, Mr. Bonmati was granted options for 180,000 shares
of the Company's Common Stock at an exercise price of $0.67 per share. These
options vest in four equal annual installments commencing January 2, 1999. Under
Mr. Bonmati's Employment Agreement, as described above, Mr. Bonmati will be
granted options to purchase 45,000 shares each quarter, commencing with the
quarter ended March 31, 1999. Such options are granted two days after the
Company announces its earnings for such quarter. The exercise price is the
closing price on the respective dates of grant and the options vest in four
equal annual installments.
COMPENSATION COMMITTEE:
Albert S. Waxman
James J. Baker
Michael W. Huber
Andre-Jacques Neusy
15
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares, from August 2, 1995, the date of the
initial public offering of the Company's Common Stock, through December 31,
1999, the percentage change in the Company's Common Stock to the cumulative
total return of the NASDAQ Composite Index ("NASDAQ Composite") and the S&P
Healthcare (Medical Products and Supplies) Midcap Index ("Healthcare (Medical
Products & Supplies) Midcap"). The graph plots the growth in value of an initial
$100 investment over the indicated time period, assuming the reinvestment of
dividends. From August 2, 1995 until September 23, 1998, the Company's Common
Stock was traded on the NASDAQ National Market. It is now quoted on the OTC
Bulletin Board.
<TABLE>
<CAPTION>
AS OF
AUGUST 2, AS OF DECEMBER 31
------------------------------------
1995 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Norland Medical Systems $100 $221 $ 96 $107 $ 3 $ 8
NASDAQ Composite 100 106 130 159 224 413
Healthcare Midcap 100 118 125 157 222 212
</TABLE>
[CHART]
The performance of the Company's Common Stock reflected above is not
necessarily indicative of future performance of the Common Stock. The
performance graph that appears above shall not be deemed incorporated by
reference by any general statement incorporating this Proxy Statement by
reference into any filing under the Securities Act of 1933, as amended, or under
the Exchange Act, and shall not be deemed filed under either of such Acts except
to the extent that the Company specifically incorporates this information by
reference.
16
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons holding more than ten percent of a registered
class of the Company's equity securities to file with the Securities and
Exchange Commission initial reports of ownership, reports of changes in
ownership and annual reports of ownership of Common Stock and other equity
securities of the Company. Such directors, executive officers and ten percent
stockholders are also required to furnish the Company with copies of all such
filed reports.
Based solely upon review of the copies of such reports furnished to the
Company and written representations that no other reports were required during
the 1999 fiscal year, the Company believes that all Section 16(a) reporting
requirements related to the Company's directors and executive officers were
timely fulfilled during 1999.
CERTAIN TRANSACTIONS
TRANSACTIONS INVOLVING NMS BV, STRATEC MEDIZINTECHNIK GMBH, BIONIX L.L.C. AND
NOVOTEC MASCHINEN GMBH.
In September 1997 the Company acquired Norland Corp. from NMS BV. In
December 1998, March 1999, and June 1999, the entire convertible portion of the
principal of the promissory note issued by the Company as part of the purchase
price for Norland Corp. was paid by the issuance of shares of Common Stock of
the Company. A total of 18,122,580 shares were issued in connection with such
payments.
In addition to its own products, the Company also distributes bone
densitometers manufactured by Stratec Medizintechnik GmbH ("Stratec") which is
controlled by Mr. Schiessl. The Company's purchases from Stratec in 1999 were
$972,679. Sales of products and services by the Company to Stratec in 1999 were
$92,883.
On October 1, 1999, the company signed a sub-distribution agreement
with Bionix L.L.C., ("Bionix"), which provided the Company the right to
exclusively distribute certain non-bone densitometry products manufactured by
Novotec Maschinen GmbH ("Novotec"). Bionix is controlled by Mr. Bonmati. Mr.
Schiessl has a controlling interest in Novotec. During 1999, the company
purchased $243,404 of products from Bionix.
Mr. Allen, a director of the Company, provided consulting services to
the Company during 1999. Mr. Allen was paid $41,406 for his services.
Mr. Bonmati and Mr. Schiessl each own a 50% interest in a building in
Pforzheim, Germany, part of which is leased to Stratec at a monthly rent of
approximately DM 9,000.
SUBMISSION OF STOCKHOLDER PROPOSALS
In accordance with rules 14a-4(c ) and 14a-5(e) promulgated under the
exchange act, the Company hereby notifies its stockholders that it did not
receive notice by March 15, 2000 of any other proposed matter to be submitted
for stockholder vote at the Annual Meeting and, therefore, all proxies received
in respect of the Annual Meeting will be voted in the discretion of the
Company's management on any matters which may properly come before the Annual
Meeting.
17
<PAGE>
Any proposal to be presented by a stockholder at the Company's 2001
Annual Meeting of Stockholders must be received in writing by the Company no
later than January 10, 2001, so that it may be considered by the Company for
inclusion in its proxy statement and form of proxy relating to that meeting.
The Company further notifies its stockholders that if the Company does
not receive notice by January 10, 2001 of a proposed matter to be submitted to
stockholders at the 2001 Annual Meeting of Stockholders then any proxies held by
members of the Company's management in respect of such meeting may be voted in
the discretion of such management members on such matter if it shall properly
come before such meeting, without any discussion of such proposed matter in the
Proxy Statement to be distributed in respect of such meeting
OTHER MATTERS
The Board of Directors knows of no matters that are expected to be
presented for consideration at the Annual Meeting other than those described in
this proxy statement. Should any other matter properly come before the Annual
Meeting, however, the persons named in the form of proxy accompanying this proxy
statement will vote all shares represented by proxies in accordance with their
best judgment on such matters.
18
<PAGE>
EXHIBIT A
AMENDED AND RESTATED 1994 STOCK OPTION PLAN OF
NORLAND MEDICAL SYSTEMS, INC.
1. DEFINITIONS.
"Board of Directors" shall mean the Board of Directors of the
Corporation as constituted from time to time or a committee of the Board of
Directors to which responsibility for the administration of the Plan has been
delegated.
"Cancellation Notice" shall mean the notice given by the Corporation to
an Optionee pursuant to Section 14(b) hereof notifying him of the cancellation
of his Option.
"Cash Payment Election" shall mean the right described in Section 6
hereof of an Optionee to elect to receive cash upon exercise of an Option.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean shares of common stock of the Corporation,
par value $0.0005 per share.
"Corporation" shall mean NORLAND MEDICAL SYSTEMS, INC., a Delaware
corporation.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Exercise Price per Share" with respect to an Option shall mean the
price, as set forth in the Optionee's Option Agreement and as determined by the
Board of Directors, at which the Optionee may exercise such Option; PROVIDED,
HOWEVER, that in the case of an Incentive Stock Option, the Exercise Price per
share shall not be less than 100% of the Fair Market Value per Share at the time
such Option is granted (110% of Fair Market Value per Share in the case of an
Incentive Stock Option described in Section 15(b) hereof).
"Fair Market Value per Share" at any particular Date shall mean the
fair value of a share of Common Stock as determined in good faith by the Board
of Directors. In the case of an Incentive Stock Option, such determination shall
be made consistent with Section 422(c)(8) of the Code.
"Incentive Stock Option" shall mean a stock option granted to an
Optionee hereunder which qualifies as an "incentive stock option" within the
meaning of Section 422 of the code.
"Non-qualified Stock Option" shall mean a stock option granted to an
Optionee hereunder which does not qualify as an "incentive stock option" under
Section 422 of the Code.
"Option" shall mean either an Incentive Stock Option or a Non-qualified
Stock Option.
"Option Agreement" shall mean the agreement between the Corporation and
an Optionee evidencing the grant of an Option pursuant to the Plan and setting
forth the terms and conditions of the Option.
"Optionee" shall mean a person to whom an Option has been granted
pursuant to the Plan.
"Plan" shall mean this 1994 Stock Option Plan of the Corporation, as
amended and restated from time to time.
"Shares" shall mean the shares of Common Stock which may be issued
pursuant to the Plan.
2. PURPOSE OF THE PLAN.
The purpose of the Plan is to secure for the Corporation and its
shareholders the benefits arising from capital stock ownership by key employees
of the Corporation who are expected to contribute to the Corporations' future
growth and success.
3. ADMINISTRATION.
The Plan shall be administered by the Board of Directors. Subject to
the express provisions of the Plan, the Board of Directors shall have plenary
authority, in its discretion, to determine the individuals to whom, and the time
or times at which, Options and Cash Payment Elections shall be granted and the
number of shares to be subject to each Option and Cash Payment Election. In
making such determinations the Board of Directors may take into account the
nature of the services rendered by the respective individuals, their
19
<PAGE>
present and potential contributions to the Corporation's success and such other
factors as the Board of Directors, in its discretion, shall deem relevant.
Subject to the express provisions of the Plan, the Board of Directors shall also
have plenary authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the terms and provisions of
the respective Option Agreements (which need not be identical) and to make all
other determinations necessary or advisable for the administration of the Plan.
To the extent necessary to comply with Rule 16b-3 under the Exchange Act,
determinations concerning Options granted to any director or officer shall be
made by a committee of the Board, all of whose members are "disinterested
persons" within the meaning of Rule 16b-3 under the Exchange Act.
4. NUMBER OF SHARES.
The aggregate number of Shares for which Options may be granted under
the Plan is 3,000,000 Shares, subject to adjustment in accordance with Section
11 hereof. Shares covered by the unexercised portions of any terminated or
canceled Options shall be available to become subject to Options granted
thereafter. Shares subject to the portions of Options which are surrendered in
connection with the exercise by Optionees of Cash Payment Elections shall not be
available to become subject to Options granted thereafter. Upon the exercise of
an Option, the number of shares with respect to which the Option may thereafter
be exercised by the Optionee shall no longer include the sum of the Shares
purchased upon exercise plus the Shares, if any, covered by a Cash Payment
Election upon such exercise.
5. GRANT OF OPTIONS.
The Board of Directors may, at any time prior to January 1, 2005, grant
Options to such officers and other key employees and consultants of the
Corporation as the Board of Directors may select. Such Options shall cover such
number of Shares as the Board of Directors shall designate, subject to the other
provisions of the Plan.
Each grant of an Option shall be evidenced by an Option Agreement
between the Optionee and the Corporation. Each Option Agreement shall specify
the number of Shares covered by such Option and the Exercise Price per Share.
The Option Agreement shall also contain such terms and conditions not
inconsistent with the Plan as the Board of Directors in sole discretion shall
deem appropriate (which terms and conditions need not be the same in each Option
Agreement and may be changed from time to time). Each Option Agreement may
require as conditions of exercise that the Optionee provide such investment
representations with respect to, and enter into such agreements concerning the
sale and transfer of, the Shares received by the Optionee upon exercise, as the
Board of Directors shall deem appropriate. Each Option Agreement for a
Non-qualified Option shall provide for the withholding of income taxes and
employment taxes that the Corporation determined it is required to withhold upon
the exercise of an Option.
6. CASH PAYMENT ELECTION.
(a) In connection with any Non-qualified Option, the Board of Directors
may grant cash Payment Elections to such Optionee as the Board of Directors may
select, either at the time such Non-qualified Option is granted or thereafter at
any time prior to the exercise of termination of such Non-qualified Option. The
terms and conditions regarding each Cash Payment Election shall be evidenced in
the Option Agreement, or an amendment thereto if granted subsequent to issuance
of a Non-qualified Option.
(b) A Cash Payment Election shall entitle the Optionee, simultaneously
with a purchase of Shares upon exercise of a portion of a Non-qualified Option,
to surrender for cash an additional unexercised (but then exercisable) portion
of the Non-qualified Option covering, at the Optionee's election, a number of
Shares no greater than the number of Shares being purchased upon such exercise.
Subject to any applicable tax withholding, in exchange for the unexercised
portion of the Non-qualified Option so surrendered, the Corporation shall pay to
the Optionee a cash amount equal to the product of (i) the excess of (A) the
Fair Market Value per Share on the Date the Non-qualified Option is exercised
over (B) the Exercise Price per Share, times (ii) the number of Shares with
respect to which the Cash Payment Election is made.
20
<PAGE>
7. TERM OF OPTION.
Each Option Agreement shall specify the Date or Dates on which the
Option granted thereunder may be exercised. Each Option Agreement may provide
for exercise of the Option in installments on such terms and conditions as the
Board of Directors may determine. The period of each Option shall be fixed by
the Board of Directors but in no case shall exceed ten (10) years (five (5)
years if the Optionee is an owner described in Section 15(b)) after the Date an
Incentive Stock Option is granted or ten (10) years and one (1) month after the
Date a Non-qualified Option is granted.
8. NON-TRANSFERABILITY OF OPTION RIGHTS.
Options and Cash Payment Elections shall not be transferable except by
will or the laws of descent and distribution. During the lifetime of a Optionee,
each Optionee's Options and Cash Payment Elections shall be exercisable only by
the Optionee.
9. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH.
(a) Except as otherwise determined by the Board of Directors, upon the
termination of employment of any Optionee (for any reason other than death), all
rights under any Option held by such Optionee shall cease; PROVIDED, HOWEVER,
that the Option Agreement may provide that the rights which were immediately
exercisable by the Optionee at the Date of such termination of employment may be
exercised by the Optionee subject to such conditions, provisions or limitations
as may be set forth in the Option agreement, during a period not exceeding three
(3) months after the Date of such termination, but in on case after the Date on
which the Option otherwise would have expired but for the Optionee's termination
of employment.
(b) Except as otherwise determined by the Board of Directors, upon the
termination of employment of any Optionee by reason of his death, or on the
death of any Optionee within three (3) months following the termination of his
employment, if during such period the Optionee was entitled pursuant to the
express terms of an Option Agreement to exercise his rights under such Option
Agreement, all rights under any Option held by such Optionee shall cease;
PROVIDED, HOWEVER, that the Option Agreement may provide that the rights which
were immediately exercisable by the Optionee at the Date of his death may be
exercised by legal representatives or beneficiaries of the Optionee during the
period specified in the Option Agreement, non exceeding one (1) year after the
Date of the Optionee's death, but in no case after the Date on which the Option
otherwise would have expired but for the Optionee's termination of employment.
10. EXERCISE AND WITHHOLDING.
(a) The purchase price of the Shares as to which an Option shall be
exercised plus any required Federal income tax or other withholding amount shall
be paid in cash or by certified check, provided that, the Board of Directors
shall have discretion in connection with any exercise of an Option to allow the
Optionees to pay all or a portion of the aggregate exercise price of all Options
being exercised plus applicable withholding amounts by transferring to the
Corporation previously acquired Shares having an aggregate fair market value
equal to such amount, or portion thereof. The Corporation shall not be required
to deliver certificates for such Shares until such payment has been made.
(b) The Corporation shall have the right to deduct from all amounts
paid in cash any taxes required by law to be withheld therefrom.
(c) Subject to the prior approval of the Board of Directors, the
Optionee may satisfy all or a portion of the withholding tax obligation
hereunder by having the Corporation withhold Shares having a Fair Market Value
on the Date the amount to be withheld is to be determined (the "Tax Date") equal
to the amount required bylaw to be withheld from such distribution. In lieu
thereof, the Corporation shall have the right to retain or sell without notice a
sufficient number of Shares to cover the amount required to be withheld.
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11. STOCK DIVIDEND, MERGER, CONSOLIDATION, ETC.
Each Option Agreement may contain such provisions concerning
adjustments in the number or kind of Shares or other securities allocated to
unexercised Options granted prior to an in the event of one (1) or more stock
dividends, stock splits, reorganizations, recapitalizations, combinations of
shares, mergers, consolidations, or other changes in the corporate structure of
stock of the Corporation, or any transaction involving the Corporation as the
Board of Directors may deem appropriate. Such adjustment shall be binding and
conclusive for all purposes.
12. RIGHTS AS A SHAREHOLDER.
An Optionee shall have no rights as a shareholder with respect to any
Shares covered by an Option until such Optionee shall have become the holder or
record of any such Share.
13. DETERMINATIONS.
Each determination, interpretation or other action made or taken
pursuant to the provisions of the Plan by the Board of Directors, and each
determination of Fair Market Value per Share shall be final and conclusive for
all purposes and shall be binding upon all persons, including, without
limitation, the Corporation and all Optionees, and their respective successors
and assigns.
14. AMENDMENT, TERMINATION AND MODIFICATION OF THE PLAN AND AGREEMENTS.
(a) The Board of Directors may alter, amend, suspend, discontinue or
terminate the Plan at any time; PROVIDED, HOWEVER, that no such action shall
adversely affect the rights of Optionees to Options previously granted hereunder
and, PROVIDED FURTHER, HOWEVER, that any stockholder approval necessary or
desirable in order to comply with Rule 16b-3 under the Exchange Act, Section 422
of the Code (or other applicable law or regulation) shall be obtained in the
manner required therein.
(b) Notwithstanding the foregoing provisions of this Section 14, each
Option Agreement may provide that the Corporation shall have the right to
terminate the rights of any Optionee to exercise any options, effective not less
than thirty (30) days after receipt by the Optionee of a Cancellation Notice
from the Corporation. The Corporation may issue a Cancellation Notice only in
connection with (i) the sale of substantially all of the Corporation's assets,
or (ii) a merger, consolidation or other corporate transaction in which the
Corporation would not be the surviving entity. The Cancellation Notice shall
afford the Optionee the right to exercise all Options held by such Optionee with
respect to all Shares covered thereby (even if they would not otherwise have
become exercisable with respect to all such Shares at that time) during the
period prior to the Date of termination.
(c) Notwithstanding the foregoing provisions of this Section 14, each
Option Agreement may contain the consent of the Optionee to any amendment to the
Plan and Option Agreement which the Board of Directors, in its sole discretion
and upon advice of legal counsel, may deem necessary or advisable to enable the
exercise of Options to comply with any applicable rules and regulations of the
Securities and Exchange Commission, including, without intending any limitation,
any amendment which would exempt such exercise from the operation of Section 16
of the Securities Exchange Act of 1934.
15. INCENTIVE STOCK OPTIONS.
Incentive Stock Options shall be specifically designated as Incentive
Stock Options and shall be subject to the following additional terms and
conditions:
(a) DOLLAR LIMITATION. The aggregate fair market value (determined as
of the respective Date or Dates of grant and consistent with Section 422(c)(8)
of the Code) of the Common Stock for which Incentive Stock Options (together
with incentive stock options under any other stock option plans of the
Corporation) which are first exercisable in any one (1) calendar year shall not
exceed the sum of $100,000. For purposes of the $100,000 limitation, if an
Option Agreement provides that the Option granted thereunder shall not be
treated as an Incentive Stock Option, such Option shall be disregarded. The
event that Section 422(b)(7) of the Code is amended to alter the limitation set
forth therein
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so that following such amendment such limitation shall differ from the
limitation set forth in this paragraph (a), the limitation of this paragraph (a)
shall be automatically adjusted accordingly.
(b) 10% SHAREHOLDER. If any Optionee to whom an Incentive Stock Option
is to be granted under the Plan is at the time of the grant of such Option the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Corporation, then the following special provisions
shall be applicable to the Incentive Stock Option granted to such Optionee;
(i) The Exercise Price per Share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the Fair Market Value per
Share at the time of grant; and
(ii) The Option exercise period shall not exceed five (5) years from
the Date of grant. Except as modified by the preceding provisions of this
Section 15, all the provisions of the Plan shall be applicable to Incentive
Stock Options granted hereunder.
16. NO SPECIAL EMPLOYMENT RIGHTS.
Nothing contained in the Plan or in any Option granted under the Plan shall
confer upon any Optionee any right with respect to the continuation of such
Optionee's employment by the corporation or interfere in any way with the right
of the Corporation, subject to the terms of any separate employment agreement to
the contrary, at any time to terminate such employment or to increase or
decrease the compensation of the Optionee from the rate in existence at the time
of the grant of such Option.
17. EFFECTIVE DATE.
The Plan shall become effective when adopted by the Board of Directors,
but no Incentive Stock Option granted under the Plan shall become exercisable
unless and until the Plan shall have been approved by the Corporations'
shareholders. If such shareholder approval is not obtained within twelve (12)
months after the Date of the Board's adoption of the Plan, any Incentive Stock
Options previously granted under the Plan shall terminate, and no further
Incentive Stock Options shall be granted. Subject to this limitation, options
may be granted under the Plan at any time after the effective Date and before
the Date fixed for termination of the Plan.
18. COMPLIANCE.
No share of Common Stock shall be issued hereunder unless counsel for
the Corporation shall be satisfied that such issuance will be in compliance with
applicable federal and state securities laws. The Board of Directors may, in its
discretion, require as a condition to the exercise of any Option that the Shares
reserved or issuance upon the exercise of the Option has have been duly listed,
upon official notice of issuance, by any securities exchange upon which such
share are then listed, if any, and either that (a) a Registration Statement
under the Securities Act of 1933, as amended, or any succeeding act, with
respect to such shares is effective at the time of such exercise or (b) there is
an exemption from registration under such Act for the issuance of shares upon
such exercise.
19. GOVERNING LAW.
The Plan and all determinations made and actions taken pursuant thereto
shall be governed by the internal laws of the State of Delaware, the state where
the Corporation maintains its principal office and operations and constructed in
accordance therewith without giving effect to the principles of conflict of laws
thereof.
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EXHIBIT B
2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN OF
NORLAND MEDICAL SYSTEMS, INC.
1. DEFINITIONS.
"Board of Directors" shall mean the Board of Directors of the
Corporation as constituted from time to time or a committee of the Board of
Directors to which responsibility for the administration of the Plan has been
delegated.
"Cancellation Notice" shall mean the notice given by the Corporation to
an Optionee pursuant to Section 14(b) hereof notifying him of the cancellation
of his Option.
"Cash Payment Election" shall mean the right described in Section 6
hereof of an Optionee to elect to receive cash upon exercise of an Option.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean shares of common stock of the Corporation,
par value $0.0005 per share.
"Corporation" shall mean NORLAND MEDICAL SYSTEMS, INC., a Delaware
corporation.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Exercise Price per Share" with respect to an Option shall be the fair
market value of such shares on the last trading day prior to the date of grant
of such options
"Fair Market Value per Share" at any particular Date shall mean the
fair value of a share of Common Stock as determined in good faith by the Board
of Directors. In the case of an Incentive Stock Option, such determination shall
be made consistent with Section 422(c)(8) of the Code.
"Incentive Stock Option" shall mean a stock option granted to an
Optionee hereunder which qualifies as an "incentive stock option" within the
meaning of Section 422 of the code.
"Non-qualified Stock Option" shall mean a stock option granted to an
Optionee hereunder which does not qualify as an "incentive stock option" under
Section 422 of the Code.
"Option" shall mean either an Incentive Stock Option or a Non-qualified
Stock Option.
"Option Agreement" shall mean the agreement between the Corporation and
an Optionee evidencing the grant of an Option pursuant to the Plan and setting
forth the terms and conditions of the Option.
"Optionee" shall mean a person to whom an Option has been granted
pursuant to the Plan.
"Plan" shall mean this 2000 Non-Employee Directors' Stock Option Plan
of the Corporation, as amended and restated from time to time.
"Shares" shall mean the shares of Common Stock which may be issued
pursuant to the Plan.
2. PURPOSE OF THE PLAN.
The purpose of the Plan is to secure for the Corporation and its
shareholders the benefits arising from capital stock ownership by non-employee
Directors of the Corporation who are expected to contribute to the Corporations'
future growth and success.
3. ADMINISTRATION.
The Plan shall be administered by the Board of Directors. Subject to
the express provisions of the Plan, the Board of Directors shall have plenary
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
respective Option Agreements (which need not be identical) and to make all other
determinations necessary or advisable for the administration of the Plan except
that the approval of the stockholders is necessary to increase the total number
of shares which may be issued or transferred under the plan and to change the
minimum purchase price for shares subject to option. To the extent necessary to
comply with Rule 16b-3 under the Exchange Act, determinations concerning Options
granted to any director or officer shall be made by a committee of
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<PAGE>
the Board, all of whose members are "disinterested persons" within the meaning
of Rule 16b-3 under the Exchange Act.
4. NUMBER OF SHARES.
The aggregate number of Shares for which Options may be granted under
the Plan is 500,000 Shares, subject to adjustment in accordance with Section 11
hereof. Shares covered by the unexercised portions of any terminated or canceled
Options shall be available to become subject to Options granted thereafter.
Shares subject to the portions of Options which are surrendered in connection
with the exercise by Optionees of Cash Payment Elections shall not be available
to become subject to Options granted thereafter. Upon the exercise of an Option,
the number of shares with respect to which the Option may thereafter be
exercised by the Optionee shall no longer include the sum of the Shares
purchased upon exercise plus the Shares, if any, covered by a Cash Payment
Election upon such exercise.
5. GRANT OF OPTIONS.
Each non-employee Director was granted options under this plan for
50,000 shares on June 2, 1999, subject to shareholder approval, for services
rendered during 1999. Options for an additional 5,000 shares of Common Stock
will be automatically granted under the Plan to each person who is elected or
re-elected a non-employee Director on the date of the Annual Meeting of
Shareholders of the Company in each of the years 2000 through 2004.
Each grant of an Option shall be evidenced by an Option Agreement
between the Optionee and the Corporation. Each Option Agreement shall specify
the number of Shares covered by such Option and the Exercise Price per Share.
The Option Agreement shall also contain such terms and conditions not
inconsistent with the Plan as the Board of Directors in sole discretion shall
deem appropriate (which terms and conditions need not be the same in each Option
Agreement and may be changed from time to time). Each Option Agreement may
require as conditions of exercise that the Optionee provide such investment
representations with respect to, and enter into such agreements concerning the
sale and transfer of, the Shares received by the Optionee upon exercise, as the
Board of Directors shall deem appropriate. Each Option Agreement for a
Non-qualified Option shall provide for the withholding of income taxes and
employment taxes that the Corporation determined it is required to withhold upon
the exercise of an Option.
6. TERM OF OPTION.
Each Option Agreement shall specify the Date or Dates on which the
Option granted thereunder may be exercised. Each Option Agreement will provide
for the exercise of the Option in four equal annual installments on such terms
and conditions as the Board of Directors may determine. The period of each
Option shall be fixed by the Board of Directors but in no case shall exceed
after the Date ten (10) years and one (1) month.
7. NON-TRANSFERABILITY OF OPTION RIGHTS.
Options and Cash Payment Elections shall not be transferable except by
will or the laws of descent and distribution. During the lifetime of a Optionee,
each Optionee's Options and Cash Payment Elections shall be exercisable only by
the Optionee.
8. EFFECT OF DEATH OR TERMINATION OF DIRECTORSHIP.
(a) Except as otherwise determined by the Board of Directors, upon the
termination of directorship of any Optionee (for any reason other than death),
all rights under any Option held by such Optionee shall cease; PROVIDED,
HOWEVER, that the Option Agreement may provide that the rights which were
immediately exercisable by the Optionee at the Date of such termination of
directorship may be exercised by the Optionee subject to such conditions,
provisions or limitations as may be set forth in the Option Agreement, during a
period not exceeding three (3) months after the Date of such termination, but in
no case after the Date on which the Option otherwise would have expired but for
the Optionee's termination of directorship.
25
<PAGE>
(b) Except as otherwise determined by the Board of Directors, upon the
termination of any Optionee by reason of his death, if during such period the
Optionee was entitled pursuant to the express terms of an Option Agreement to
exercise his rights under such Option Agreement, all rights under any Option
held by such Optionee shall cease; PROVIDED, HOWEVER, that the Option Agreement
may provide that the rights which were immediately exercisable by the Optionee
at the Date of his death may be exercised by legal representatives or
beneficiaries of the Optionee during the period specified in the Option
Agreement, not exceeding one (1) year after the Date of the Optionee's death.
9. EXERCISE AND WITHHOLDING.
(a) The purchase price of the Shares as to which an Option shall be
exercised plus any required Federal income tax or other withholding amount shall
be paid in cash or by certified check, provided that, the Board of Directors
shall have discretion in connection with any exercise of an Option to allow the
Optionees to pay all or a portion of the aggregate exercise price of all Options
being exercised plus applicable withholding amounts by transferring to the
Corporation previously acquired Shares having an aggregate fair market value
equal to such amount, or portion thereof. The Corporation shall not be required
to deliver certificates for such Shares until such payment has been made.
(b) The Corporation shall have the right to deduct from all amounts
paid in cash any taxes required by law to be withheld therefrom.
(c) Subject to the prior approval of the Board of Directors, the
Optionee may satisfy all or a portion of the withholding tax obligation
hereunder by having the Corporation withhold Shares having a Fair Market Value
on the Date the amount to be withheld is to be determined (the "Tax Date") equal
to the amount required bylaw to be withheld from such distribution. In lieu
thereof, the Corporation shall have the right to retain or sell without notice a
sufficient number of Shares to cover the amount required to be withheld.
10. STOCK DIVIDEND, MERGER, CONSOLIDATION, ETC.
Each Option Agreement may contain such provisions concerning
adjustments in the number or kind of Shares or other securities allocated to
unexercised Options granted prior to an in the event of one (1) or more stock
dividends, stock splits, reorganizations, recapitalizations, combinations of
shares, mergers, consolidations, or other changes in the corporate structure of
stock of the Corporation, or any transaction involving the Corporation as the
Board of Directors may deem appropriate. Such adjustment shall be binding and
conclusive for all purposes.
11. RIGHTS AS A SHAREHOLDER.
An Optionee shall have no rights as a shareholder with respect to any
Shares covered by an Option until such Optionee shall have become the holder or
record of any such Share.
12. DETERMINATIONS.
Each determination, interpretation or other action made or taken
pursuant to the provisions of the Plan by the Board of Directors, and each
determination of Fair Market Value per Share shall be final and conclusive for
all purposes and shall be binding upon all persons, including, without
limitation, the Corporation and all Optionees, and their respective successors
and assigns.
13. AMENDMENT, TERMINATION AND MODIFICATION OF THE PLAN AND AGREEMENTS.
(a) The Board of Directors may alter, amend, suspend, discontinue or
terminate the Plan at any time; PROVIDED, HOWEVER, that no such action shall
adversely affect the rights of Optionees to Options previously granted hereunder
and, PROVIDED FURTHER, HOWEVER, that any stockholder approval necessary or
desirable in order to comply with Rule 16b-3 under the Exchange Act, Section 422
of the Code (or other applicable law or regulation) shall be obtained in the
manner required therein.
(b) Notwithstanding the foregoing provisions of this Section 14, each
Option Agreement may provide that the Corporation shall have the right to
terminate the rights of any Optionee to exercise any
26
<PAGE>
options, effective not less than thirty (30) days after receipt by the Optionee
of a Cancellation Notice from the Corporation. The Corporation may issue a
Cancellation Notice only in connection with (i) the sale of substantially all of
the Corporation's assets, or (ii) a merger, consolidation or other corporate
transaction in which the Corporation would not be the surviving entity. The
Cancellation Notice shall afford the Optionee the right to exercise all Options
held by such Optionee with respect to all Shares covered thereby (even if they
would not otherwise have become exercisable with respect to all such Shares at
that time) during the period prior to the Date of termination.
(c) Notwithstanding the foregoing provisions of this Section 14, each
Option Agreement may contain the consent of the Optionee to any amendment to the
Plan and Option Agreement which the Board of Directors, in its sole discretion
and upon advice of legal counsel, may deem necessary or advisable to enable the
exercise of Options to comply with any applicable rules and regulations of the
Securities and Exchange Commission, including, without intending any limitation,
any amendment which would exempt such exercise from the operation of Section 16
of the Securities Exchange Act of 1934.
14. INCENTIVE STOCK OPTIONS.
Incentive Stock Options shall be specifically designated as Incentive
Stock Options and shall be subject to the following additional terms and
conditions:
(a) DOLLAR LIMITATION. The aggregate fair market value (determined as
of the respective Date or Dates of grant and consistent with Section 422(c)(8)
of the Code) of the Common Stock for which Incentive Stock Options (together
with incentive stock options under any other stock option plans of the
Corporation) which are first exercisable in any one (1) calendar year shall not
exceed the sum of $100,000. For purposes of the $100,000 limitation, if an
Option Agreement provides that the Option granted thereunder shall not be
treated as an Incentive Stock Option, such Option shall be disregarded. The
event that Section 422(b)(7) of the Code is amended to alter the limitation set
forth therein so that following such amendment such limitation shall differ from
the limitation set forth in this paragraph (a), the limitation of this paragraph
(a) shall be automatically adjusted accordingly.
15. EFFECTIVE DATE.
The Plan shall become effective when adopted by the Board of Directors,
but no Stock Option granted under the Plan shall become exercisable unless and
until the Plan shall have been approved by the Corporations' shareholders. If
such shareholder approval is not obtained within twelve (12) months after the
Date of the Board's adoption of the Plan, any Stock Options previously granted
under the Plan shall terminate, and no further Stock Options shall be granted.
Subject to this limitation, options may be granted under the Plan at any time
after the effective Date and before the Date fixed for termination of the Plan.
16. COMPLIANCE.
No share of Common Stock shall be issued hereunder unless counsel for
the Corporation shall be satisfied that such issuance will be in compliance with
applicable federal and state securities laws. The Board of Directors may, in its
discretion, require as a condition to the exercise of any Option that the Shares
reserved or issuance upon the exercise of the Option have been duly listed, upon
official notice of issuance, by any securities exchange upon which such share
are then listed, if any, and either that (a) a Registration Statement under the
Securities Act of 1933, as amended, or any succeeding act, with respect to such
shares is effective at the time of such exercise or (b) there is an exemption
from registration under such Act for the issuance of shares upon such exercise.
17. GOVERNING LAW.
The Plan and all determinations made and actions taken pursuant thereto
shall be governed by the internal laws of the State of Delaware, the state where
the Corporation maintains its principal office and operations and constructed in
accordance therewith without giving effect to the principles of conflict of laws
thereof.
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<PAGE>
PROXY
NORLAND MEDICAL SYSTEMS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 1, 2000
The stockholder(s) whose signature(s) appear(s) on the reverse side of
this proxy form hereby appoint(s) Reynald G. Bonmati and Robert J. Larson or
either of them as proxies, with full power of substitution, and hereby
authorize(s) them to represent and vote all shares of Common Stock of the
Company which the stockholder(s) would be entitled to vote on all matters which
may come before the Annual Meeting of Stockholders to be held at the Rye
Courtyard By Marriott, 631 Midland Avenue, Rye, New York 10580, at 10:00 a.m. on
June 1, 2000, or at any adjournment thereof. The proxies shall vote subject to
the directions indicated on the reverse side of this card and the proxies are
authorized to vote in their discretion upon such other business as may properly
come before the meeting and any adjournments or postponements thereof. The
proxies will vote as the Board of Directors recommends where a choice is not
specified.
The nominees for Director are: Jeremy C. Allen, James J. Baker, Reynald
G. Bonmati, Michael W. Huber, Andre-Jacques Neusy and Albert S. Waxman.
(TO BE SIGNED ON REVERSE SIDE.)
- --------------------------------------------------------------------------------
PLEASE MARK
A |X| YOUR VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ALL DIRECTORS
AND FOR PROPOSALS 2, 3 AND 4.
<TABLE>
<S> <C> <C> <C> <C>
FOR WITHHOLD FOR
ALL ALL FOR AGAINST ABSTAIN
2. An amendment to the Company's Amended
Election of |_| |_| NOMINEES: Jeremy C. Allen and Restated 1994 Stock Option Plan |_| |_| |_|
directors. James J. Baker to increase the aggregate number of
Reynald G. Bonmati shares for which options may be
Michael W. Huber granted from 2,250,000 to 3,000,000
Andre-Jacques Neusy
Albert S. Waxman 3. Approval of the Company's 2000
Non-Employee Directors' Stock Option |_| |_| |_|
Plan
INSTRUCTION: To withhold 4. Selection of Deloitte & Touche LLP as
authority to vote for any the Company's independent accountants |_| |_| |_|
individual nominee or for 2000.
nominees, write the names on
the space provided below. Please complete, sign, date and mail the enclosed Proxy in the
accompanying envelope even if you intend to be present at the meting.
____________________________ Returning the proxy will not limit your right to vote in person or to
attend the Annual Meeting, but will ensure your representation if you
____________________________ cannot attend. If you hold shares in more than one name, or if your
stock is registered in more than one way, you may receive more than
one copy of the proxy material. If so, please sign and return each of
the proxy cards that you receive so that all of your shares may be
voted. The Proxy is revocable at any time prior to its use.
SIGNATURE(S) ___________________________________________
___________________________________________ DATE _______________
</TABLE>
(Note: Please sign above exactly as the shares are issued. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give the 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.)
