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Emerge Interactive Inc · DEF 14A · For 5/23/02

Filed On 4/25/02 · SEC File 0-29037 · Accession Number 1021408-2-5697

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 4/25/02  Emerge Interactive Inc            DEF 14A     5/23/02    1:39                                     Donnell..Financial/NY/FA

Definitive Proxy Solicitation Material · Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                            39    232K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Annual Report Audit Committee Report Certain Relationships and Related Transactions Compensation Committee Report on Executive Compensation David C. Warren Description of Employment Agreements, Severance Arrangements and Change of Control Arrangements Directors and Executive Officers Executive Compensation Incentive Stock Options Information Regarding the Board of Directors and Committees Juris Pagrabs Kenneth G. Jordan Nonqualified Stock Options Option Grants During Last Fiscal Year Other Matters Performance Graph Performance Units Proposal 1. Election of Directors Proposals You May Vote On Qualified Performance-Based Compensation Questions and Answers Reid Johnson Scott L. Mathews Section 16(A) Beneficial Ownership Reporting Compliance Stockholder Proposals Stock Ownership Summary Compensation Table Thomas L. Tippens
1	1st Page
2	Reid Johnson
4	Questions and Answers
5	Proposals You May Vote On
"	Proposal 1. Election of Directors
"	Information Regarding the Board of Directors and Committees
9	Performance Units
10	Qualified Performance-Based Compensation
11	Incentive Stock Options
12	Nonqualified Stock Options
14	Performance Graph
15	Stock Ownership
16	Section 16(A) Beneficial Ownership Reporting Compliance
"	Directors and Executive Officers
"	Thomas L. Tippens
"	David C. Warren
17	Scott L. Mathews
"	Kenneth G. Jordan
"	Juris Pagrabs
18	Executive Compensation
19	Summary Compensation Table
20	Option Grants During Last Fiscal Year
21	Description of Employment Agreements, Severance Arrangements and Change of Control Arrangements
22	Compensation Committee Report on Executive Compensation
24	Certain Relationships and Related Transactions
25	Audit Committee Report
26	Stockholder Proposals
"	Other Matters
"	Annual Report

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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

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
[X] Definitive proxy statement. Commissioner only (as permitted by
[_] Definitive additional materials. Rule 14a-6(e)(2).
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.

eMerge Interactive Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

N/A
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was
determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: $0

[_] 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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A

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[LOGO]EMERGE INTERACTIVE

Notice of Annual Meeting of Stockholders
to be held May 23, 2002

To Our Stockholders:

The Annual Meeting of Stockholders of eMerge Interactive, Inc. will be held
on Thursday, May 23, 2002, at 10:00 a.m., Eastern Daylight Savings Time, at the
Desmond Great Valley Hotel and Conference Center, One Liberty Boulevard,
Malvern, PA. At the meeting, we will:

. elect nine (9) directors to hold office until the next Annual Meeting of
Stockholders and until their respective successors are duly elected and
qualified;
. approve an amendment to our Amended and Restated 1999 Equity
Compensation Plan; and
. act upon such other matters as may properly come before the meeting or
any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only holders of record of class A common
stock and class B common stock at the close of business on April 18, 2002, are
entitled to notice of, and to vote at, the meeting and at any postponement or
adjournment thereof. A list of stockholders entitled to vote at the Annual
Meeting will be available for inspection at our offices for ten business days
prior to the meeting.

A COPY OF eMERGE'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31,
2001 IS ENCLOSED HEREWITH.

You are cordially invited to attend the meeting. Whether or not you plan
to attend, you are urged to complete, date and sign the enclosed proxy and
return it promptly. If you receive more than one form of proxy, it is an
indication that your shares are registered in more than one account, and each of
such proxy must be completed and returned if you wish to vote all of your shares
eligible to be voted at the meeting.

The address of our principal office is 10305 102nd Terrace, Sebastian,
Florida 32958, and the phone number is (772) 299-8000.

By Order of the Board of Directors

Reid Johnson
Secretary

Sebastian, Florida
April 18, 2002

Your vote is important.

The attached proxy statement should be read carefully. You are urged to sign,
date and mail the enclosed proxy in the enclosed postage paid envelope. No
additional postage is required if mailed in the United States. You may revoke
your proxy at any time before it is voted by giving written notice to our
Corporate Secretary. If you attend the Annual Meeting, you may vote in person
though you have previously sent in your proxy.

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TABLE OF CONTENTS

[Enlarge/Download Table]

PAGE
----

QUESTIONS AND ANSWERS................................................................... 1
PROPOSALS YOU MAY VOTE ON............................................................... 2
Proposal 1. Election of Directors..................................................... 2
Proposal 2. Approval of an amendment to the Amended and Restated eMerge Interactive,
Inc. 1999 Equity Compensation Plan.................................................... 4
PERFORMANCE GRAPH....................................................................... 11
STOCK OWNERSHIP......................................................................... 12
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE................................. 13
DIRECTORS AND EXECUTIVE OFFICERS........................................................ 13
EXECUTIVE COMPENSATION.................................................................. 15
Summary Compensation Table............................................................. 16
Option Grants During Last Fiscal Year.................................................. 17
Option Exercises During Last Fiscal Year and Fiscal Year End Option Values............. 17
Description of Employment Agreements, Severance Arrangements and Change of
Control Arrangements.................................................................. 18
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION................................. 19
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................................... 21
AUDIT COMMITTEE REPORT.................................................................. 22
INFORMATION CONCERNING INDEPENDENT AUDITORS............................................. 23
STOCKHOLDER PROPOSALS................................................................... 23
OTHER MATTERS........................................................................... 23
ANNUAL REPORT........................................................................... 23

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QUESTIONS AND ANSWERS

Q: WHY DID YOU SEND ME THIS PROXY STATEMENT?

A: We sent this proxy statement and the enclosed proxy card because eMerge's
Board of Directors is soliciting your proxy to vote your shares at eMerge's
2002 Annual Meeting of Stockholders. This proxy statement summarizes
information that we are required to provide to you under the rules of the
Securities and Exchange Commission and which is designed to assist you in
voting.

Q: WHEN IS THE ANNUAL MEETING AND WHERE WILL IT BE HELD?

A: The Annual Meeting will be held on Thursday, May 23, 2002, at 10:00 a.m. at
the at the Desmond Great Valley Hotel and Conference Center, One Liberty
Boulevard, Malvern, PA.

Q: WHAT MAY I VOTE ON?

A: The following matters:

. the election of nine directors to hold office until the next Annual
Meeting of Stockholders; and

. approval of an amendment to the Amended and Restated eMerge
Interactive, Inc. 1999 Equity Compensation Plan.

Q: HOW DOES EMERGE'S BOARD OF DIRECTORS RECOMMEND I VOTE ON THE PROPOSALS?

A: eMerge's Board of Directors recommends a vote FOR each of the proposals.

Q: WHO IS ENTITLED TO VOTE?

A: Only those who owned eMerge common stock at the close of business on the
record date, which was April 18, 2002, are entitled to vote at the Annual
Meeting.

Q: HOW DO I VOTE?

A: You may vote your shares either in person or by proxy. Whether you plan to
attend the meeting and vote in person or not, we urge you to complete the
enclosed proxy card and return it promptly in the enclosed envelope. If you
return your signed proxy card but do not mark the boxes showing how you
wish to vote, your shares will be voted FOR the proposals. You have the
right to revoke your proxy at any time before the meeting by

. notifying eMerge's Corporate Secretary;

. voting in person; or

. returning a later-dated proxy card.

Q: HOW MANY SHARES CAN VOTE?

A: As of the record date, 34,278,479 shares of eMerge's Class A common stock
were outstanding and 5,694,445 shares of Class B common stock were
outstanding. Every eMerge stockholder with Class A common stock is entitled
to one vote for each share held on the record date and every eMerge
stockholder with Class B common stock is entitled to two and one-half votes
for each share held on the Record Date.

Q: WHAT IS A "QUORUM"?

A: A "quorum" is a majority of the outstanding shares of eMerge's common
stock. The shares may be present at the meeting or represented by proxy.
There must be a quorum for the meeting to be held and a proposal must
receive more than 50% of the shares voting to be adopted. If you submit a
properly executed proxy card, even if you abstain from voting, you will be
considered part of the quorum (but an abstention will not be counted in the
tally of votes FOR or AGAINST a proposal). Broker "non-votes" (proxies
received from brokers or other nominees indicating that they have not
received voting instructions from the beneficial owner or the matter for
which the brokers or nominees do not have discretionary authority) will be
treated as shares present, but not voting.

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Q: HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?

A: Although we do not know of any business to be considered at the Annual
Meeting other than the proposals described in this proxy statement, if any
other business is properly presented at the Annual Meeting, your signed
proxy card gives authority to David C. Warren, eMerge's Chief Executive
Officer and Juris Pagrabs, eMerge's Executive Vice president of Corporate
Administration and Communications, or either of them, to vote on such
matters at their discretion.

Q: WHEN ARE THE STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING OF
STOCKHOLDERS DUE?

A: All stockholder proposals to be considered for inclusion in next year's
proxy statement must be submitted in writing, no later than December 19,
2002, to Reid Johnson, eMerge's Corporate Secretary, eMerge Interactive,
Inc., 10305 102/nd/ Terrace, Sebastian, FL 32958.

Q: WHO WILL PAY FOR THIS PROXY SOLICITATION?

A: eMerge will pay all the costs of soliciting these proxies. In addition to
mailing proxy solicitation materials, our directors and employees may also
solicit proxies in person, by telephone or by other electronic means of
communication. We will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for forwarding proxy and solicitation materials to our
stockholders.

PROPOSALS YOU MAY VOTE ON

PROPOSAL 1. ELECTION OF DIRECTORS

At the Annual Meeting, you and the other stockholders will elect the nine
individuals to serve as directors until the 2003 Annual Meeting. The Board of
Directors has nominated Thomas L. Tippens, David C. Warren, John W. Poduska, Sr.
Ph.D., Douglas A. Alexander, Christopher J. Davis, Robert E. Drury, John C.
Foltz, Robert S. Adams and Richard G. White to stand for re-election at the
Annual Meeting. Detailed information on each nominee is provided on pages 13 to
15 below. Each of the nominees for director is a current member of the Board of
Directors.

The individuals named as proxies will vote the enclosed proxy for the re-
election of Messrs. Tippens, Warren, Poduska, Alexander, Davis, Drury, Foltz,
Adams and White unless you direct them to withhold your votes. If any nominee
becomes unable or unwilling to stand for re-election, the Board of Directors may
reduce its size or designate a substitute. If a substitute is designated,
proxies voting on the original nominee will be cast for the substituted nominee.

Information Regarding the Board Of Directors and Committees

The full Board of Directors considers all major decisions concerning
eMerge. However, the Board of Directors has established the following two
standing committees in order that certain important areas can be addressed in
more depth than may be possible in a full Board of Directors meeting:

Compensation Committee. The compensation committee evaluates and
approves the compensation and benefits for our executive officers,
administers our equity compensation plans, and makes recommendations to the
Board of Directors regarding such matters. The members of the Compensation
Committee are currently Christopher J. Davis, Richard G. White and Robert E.
Drury. The Compensation Committee held one meeting during 2001.

Audit Committee. The Audit Committee reviews the professional services
and independence of eMerge's independent auditors, and eMerge's accounts,
procedures and internal controls. The Audit Committee recommends to the
Board of Directors for appointment the firm selected to be independent public
accountants for eMerge and monitors the performance of such accounting firm;
reviews and approves the scope of the annual audit; reviews and evaluates
with the independent public accountants eMerge's annual audit and annual
consolidated financial statements; reviews with management the status of
internal

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accounting controls; evaluates problem areas having a potential financial
impact on eMerge that may be brought to its attention by management, the
independent accountants or the Board of Directors; and evaluates all public
financial reporting documents of eMerge. The members of the Audit Committee
are currently Robert E. Drury, John C. Foltz and John W. Poduska, Sr., PhD.
The Audit Committee held four meetings in 2001.

The Audit Committee acts under a written charter adopted by the Board of
Directors. Under the charter, members of the audit committee are required to
be "independent" (as defined by Rule 4200(a)(15) of the National Association
of Securities Dealers' listing standards) from and after June 1, 2001.
Currently all three members of the audit committee are independent (as so
defined).

eMerge does not have a nominating committee. The Board of Directors
performs this function. The Board of Directors met nineteen times during fiscal
2001. Each director attended more than 75% of the total meetings of the Board
of Directors and committees on which he served during fiscal 2001, with the
exception of Dr. Poduska who attended 63% of the Board of Directors meetings.

Compensation Committee Interlocks and Insider Participation

The compensation committee is responsible for determining salaries,
incentives and other forms of compensation for our directors, officers and other
employees and administering various incentive compensation and benefit plans.
During fiscal year 2001, the compensation committee consisted of Christopher J.
Davis, Douglas A. Alexander and Dr. John S. Scott. Dr. Scott was the Chief
Executive Officer and Chairman of the Board of XL Vision. He resigned his
position as director of eMerge on November 30, 2001.

Compensation of Directors

We reimburse each member of our Board of Directors for reasonable out-of-
pocket expenses incurred in connection with attending Board of Directors
meetings. We do not pay our directors cash compensation for attending meetings
of the Board of Directors and committee meetings. However, Mr. Tippens receives
$125,000 annually, beginning September 15, 2001, as compensation for his
position as Executive Chairman of the Board. Directors are eligible to receive
options to purchase common stock under our equity compensation plans. All
grants are discretionary and may vary as to the number of shares. In March
1999, the Board of Directors granted Dr. Poduska an option to purchase 31,250
shares of common stock under our 1996 Equity Compensation Plan at an exercise
price of $1.60 per share. In April 1999, the Board of Directors granted Mr.
Alexander an option to purchase 100,000 shares of common stock under our 1996
Equity Compensation Plan at an exercise price of $2.40 per share. In February
2001, the Board of Directors granted Mr. Tippens an option to purchase 70,000
shares of common stock under our 1999 Equity Compensation Plan at an exercise
price of $4.41 per share. In June 2001, the Board of Directors granted Mr.
Tippens, Mr. Foltz and Mr. Drury options to purchase 70,000, 70,000 and 75,000
shares of common stock, respectively, under our 1999 Equity Compensation Plan at
an exercise price of $0.89 per share. Each of the options vests 25% each year
commencing on the first anniversary of the grant and has a term of 10 years. In
July 2001, the Board of Directors granted Mr. Tippens an option to purchase
100,000 shares of common stock under our 1999 Equity Compensation Plan at an
exercise price of $0.87 per share. These options vested 25% on the day of grant
with the remaining options vesting in three annual installments of 25% each and
haves a term of 10 years.

Vote Required and Board of Directors Recommendation

The nine nominees for re-election as directors will be elected at the
meeting by a plurality of all the votes cast at the meeting, meaning that the
nine nominees for director who receive the most votes will be elected. In an
uncontested election for directors, the plurality requirement is not a factor.
A properly executed proxy marked "WITHHOLD AUTHORITY" with respect to the
election of one or more directors will not be voted with respect to the director
or directors indicated, although it will be counted for purposes of determining
whether there is a quorum.

Your Board of Directors unanimously recommends a vote "FOR" each of the
nominees for re-election as a director.

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PROPOSAL 2. AMENDMENT TO AMENDED AND RESTATED 1999 EQUITY COMPENSATION PLAN

The Amended and Restated 1999 Equity Compensation Plan (the "1999 Plan")
was approved by the Board of Directors on April 22, 1999, and was approved by
the stockholders on May 10, 1999, prior to eMerge's initial public stock
offering in February 2000. The 1999 Plan was then amended in May 2000,
following approval by the Board of Directors and stockholders. The Board of
Directors has unanimously adopted a resolution approving and recommending to the
stockholders for their approval, an amendment to the Amended and Restated 1999
Equity Compensation Plan (the "1999 Plan Amendment") to increase the number of
shares subject to the 1999 Plan from 4,000,000 to 6,000,000.

A summary of the principal features of the amended 1999 Plan is provided
below, but is qualified in its entirety by reference to the full text of the
1999 Plan. Copies of the 1999 Plan are available upon request directed to Reid
Johnson, Secretary, at the address of the Company as set forth on the first page
of this Proxy Statement.

Purpose of the 1999 Plan

The 1999 Plan provides participants with an opportunity to receive grants
of incentive stock options, nonqualified stock options, stock appreciation
rights, restricted stock and performance units. We have historically granted
incentive stock options and nonqualified stock options with an exercise price
that generally has been equal to the fair market value on the grant date. We
most likely will continue to do so in the future. However, to remain
competitive and to be able to continue attracting and retaining outstanding
employees, directors, consultants and advisors, our 1999 Plan provides the
flexibility for other types of grants. The purpose of the 1999 Plan is to
encourage the participants to contribute to our growth, thus benefiting our
stockholders, and aligning the economic interests of the participants with those
of our stockholders. The 1999 Plan is not a tax-qualified plan under section
401(a) of the Internal Revenue Code (the Code) and is not subject to the
provisions of the Employee Retirement Income Security Act of 1974.

Shares Subject to the 1999 Plan

The 1999 Plan, currently authorizes the issuance of up to a maximum of
4,000,000 shares of our common stock. As of March 31, 2002, options for an
aggregate of only 338,586 shares remained available to be granted under the 1999
Plan. The 1999 Plan is intended as an incentive to attract and retain officers,
directors, key employees and advisors of the Company and to provide a means by
which such persons may acquire or increase their proprietary interest in the
success of the Company. The Board of Directors believes the 1999 Plan has been
effective in accomplishing its intended purpose. In order to further the
effectiveness of the 1999 Plan, the Board of Directors recommends adoption of
the 1999 Plan Amendment, which would increase the total number of shares which
may be granted over the life of the 1999 Plan by 2,000,000 to a maximum of
6,000,000. There are no current plans to authorize any specific grants under
the 1999 Plan from the additional 2,000,000 shares that were authorized.

The maximum number of shares that may be granted to any individual under
the 1999 Plan during any calendar year is 625,000 shares. Shares of common
stock issued under the 1999 Plan may be authorized but unissued shares or may be
reacquired shares, including shares purchased by us on the open market. If
options or stock appreciation rights granted under the plan terminate, expire or
are canceled, forfeited, exchanged or surrendered without being exercised, or if
a restricted stock award or performance unit is forfeited, those shares will
again be available for purposes of the 1999 Plan.

Administration of the 1999 Plan

The 1999 Plan is administered by the compensation committee of the Board of
Directors, which is currently composed of Christopher J. Davis, Richard G. White
and Robert E. Drury. The committee has the authority to administer and
interpret the 1999 Plan. Specifically, the committee is authorized to

. determine the individuals to whom grants will be made,
. determine the type, size and terms of the grants,

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. determine the time when the grants will be made and the duration of any
applicable exercise or restriction period, including the criteria for
exercisability and the acceleration of exercisability,
. make factual determinations and adopt or amend appropriate rules,
regulations, agreements, and instruments for implementing the 1999 Plan,
and
. deal with any other matters arising under the plan.

Eligibility for Participation and Grants

Those eligible to receive grants under the 1999 Plan are all of our
employees and employees of our subsidiaries, individuals to whom we have offered
employment, non-employee directors, and our advisors and advisors of our
subsidiaries. As of March 31, 2002, there were approximately 142 employees and
7 non-employee directors currently eligible to receive grants.

Grants may consist of incentive stock options, nonqualified stock options,
restricted stock, stock appreciation rights and performance units. All grants
are subject to the terms and conditions of the 1999 Plan.

Grants will continue to vest and remain exercisable as long as a
participant remains in our service, and may be exercisable for a period of time
after termination of service. In determining whether a participant will be
considered to have terminated service for purposes of exercising options and
stock appreciation rights and satisfying conditions with respect to restricted
stock and performance units, a participant will not be considered to have
terminated service until the participant ceases to serve as an employee, advisor
or member of the board. The committee may waive or modify these termination
provisions.

Stock Options

Grant of Stock Options. The committee may grant options qualifying as
----------------------
incentive stock options only to employees. The committee may grant nonqualified
stock options to any participant. Grants to employees may be made in any
combination of incentive stock options and nonqualified stock options.

Option Price. The committee determines the option exercise price at the
-------------
time of grant. To qualify as an incentive stock option, the exercise price may
not be less than the fair market value of our common stock at the time of grant.
Also, the value (determined as of the grant date) of any incentive stock options
held by a participant that become exercisable for the first time during any
calendar year cannot exceed $100,000. If a grantee owns stock having more than
10% of our voting power, the exercise price of an incentive stock option may not
be less than 110% of the fair market value of our common stock on the date of
grant.

Term and Exercisability of Stock Options. The committee determines the
----------------------------------------
term of stock options granted under the 1999 Plan, although the term may not
exceed ten years from the date of grant. If a grantee owns stock having more
than 10% of our voting power, the term of the incentive stock option may not
exceed five years from the date of grant. The committee determines how stock
options will become exercisable and may accelerate the exercisability at any
time for any reason.

Manner of Exercise of Stock Options. To exercise a stock option, a grantee
-----------------------------------
must deliver an exercise notice specifying the number of shares to be purchased
together with payment of the option exercise price. The exercise price may be
paid in any of the following ways:

. in cash,
. by delivering shares of our common stock already owned by the
participant having a fair market value equal to the exercise price,
. payment through a broker, or
. any other method of payment the committee may approve.

For a nonqualified stock option, we are also required to withhold
applicable taxes. If approved by the committee, withholding shares of an
equivalent market value may satisfy the income tax withholding obligation.

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Shares of common stock tendered in payment of the exercise price must have
been held by the participant long enough to avoid adverse accounting
consequences to us.

Termination of Stock Options as a Result of Termination of Employment,
----------------------------------------------------------------------
Disability or Death. Generally, exercisable stock options will remain
-------------------
exercisable for a period of time following termination of service as follows:

. one year following termination of service if an individual is disabled,
dies, or dies within 90 days after termination of service without cause
or
. 90 days following termination of service for any other reason other than
cause.

The committee may provide for different termination provisions. Options,
which are not exercisable at the termination of service, are terminated as of
that date.

If service is terminated for cause, all stock options held by a participant
will cease to be exercisable on the date of termination. In addition, all
shares underlying exercised options will be forfeited upon refund by us of the
exercise price for such shares.

Restricted Stock Grants

The committee may provide a participant with an opportunity to acquire
shares of our common stock contingent upon his or her continued service or the
satisfaction of other criteria. Restricted stock differs from a stock option in
that a participant must make an immediate decision whether to make an investment
in the stock. The committee determines the amount to be paid for the stock or
may decide to grant the stock for no consideration. The committee may specify
that the restrictions will lapse over a period of time or according to any other
factors or criteria. If a participant's service terminates during the period of
any restrictions, the restricted stock grant will terminate with respect to all
shares as to which the restrictions on transfer have not lapsed unless the
committee provides for an exception to this requirement. Until the restrictions
on the transfer have lapsed, a participant may generally not dispose of the
shares of common stock to which the restriction applies. All restrictions lapse
upon the expiration of the applicable restriction period. Unless the committee
determines otherwise, however, during the restriction period the participant has
the right to vote restricted shares and receive any dividends or other
distributions paid on them, subject to any restrictions specified by the
committee.

Stock Appreciation Rights

The committee may provide a participant with the right to receive a benefit
measured by the appreciation in a specified number of shares of our common stock
over a period of time. The amount of this benefit is equal to the difference
between the fair market value of the stock on the exercise date and the base
amount of the stock appreciation right (SAR). Generally, the base amount of a
SAR is equal to the per share exercise price of the related stock option or, if
there is no related option, the fair market value of a share of our common stock
on the date the SAR is granted. The committee may pay this benefit in cash, in
stock, or any combination of the two.

The committee may grant a SAR either separately or in tandem with all or a
portion of a stock option. SARs may be granted when the stock option is granted
or later while it remains outstanding, although in the case of an incentive
stock option, SARs may be granted only at the time the option is granted.
Tandem SARs may not exceed the number of shares of common stock that the
participant may purchase upon the exercise of the related stock option during
the period. Upon the exercise of a stock option, the SARs relating to the
common stock covered by the stock option terminate. Upon the exercise of SARs,
the related stock option terminates to the extent of an equal number of shares
of common stock.

SARs are subject to the same termination on death, disability or
termination of service provisions as stock options. The committee may
accelerate the exercisability of any or all outstanding SARs.

Performance Units

The committee may grant performance units to a participant representing a
right to receive an amount based on the value of the performance unit if the
performance goals established by the committee are met. A

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performance unit will be based on the fair market value of a share of our common
stock or on any other measurement base that the committee deems appropriate. The
committee will determine the number of performance units to be granted, the
requirements applicable to the performance units, the period during which the
performance will be measured, the performance goals applicable to the
performance units and any other conditions that the committee deems appropriate.
At the end of each performance period, the committee will determine to what
extent the performance goals and other conditions of the performance unit have
been met and the amount, if any, to be paid with respect to the performance
units. Payments may be made in cash, in common stock, or in a combination of the
two, as determined by the committee. Unless the committee provides for a
complete or partial exception, performance units are forfeited if the conditions
of the grant are not met or if the participant terminates service.

Qualified Performance-Based Compensation

The committee may designate performance units and restricted stock granted
to an employee as qualified performance-based compensation under section 162(m)
of the Code upon the establishment of appropriate performance goals and
performance periods as provided in section 162(m) of the Code. If restricted
stock or performance units, measured with respect to the fair market value of
our common stock, are granted, not more than 625,000 shares may be granted to an
employee for any performance period. If performance units are measured with
respect to other criteria, the maximum amount that may be paid to an employee
with respect to a performance period is $1,000,000. The committee will certify
and announce the results for each performance period to all participants
immediately following the announcement of our financial results for the
performance period. To the extent the committee does not certify that the
performance goals have been met, the grants of restricted stock or performance
units for the performance period will be forfeited.

Transferability of Grants

Generally, only a participant may exercise rights under a grant during his
or her lifetime, and those rights may not be transferred except by will or by
the laws of descent and distribution. When a participant dies, the personal
representative or other person entitled to succeed to his or her rights may
exercise those rights upon furnishing satisfactory proof of that person's right
to receive the grant. The committee may nevertheless choose to provide with
respect to grants of nonqualified stock options that a participant may transfer
those grants to family members or other persons or entities. The committee may
also permit the transfer of grants, other than incentive stock options, pursuant
to a domestic relations order.

Termination of the 1999 Plan

The board may amend or terminate the 1999 Plan at any time. The 1999 Plan
will terminate, unless it is terminated earlier by the board or extended by the
board with the approval of our stockholders, on April 21, 2009.

Adjustment Provisions

The committee will adjust the number and exercise price of outstanding
grants, as well as the number and kind of shares available for grants and
individual limits for any single participant under the 1999 Plan, to
appropriately reflect any of the following events:

. a stock dividend, spin-off, recapitalization, stock split, or
combination or exchange of shares;
. a merger, reorganization or consolidation in which we are the surviving
corporation;
. a reclassification or change in par value;
. any other extraordinary or unusual event affecting the outstanding
common stock as a class without our receipt of consideration; or
. a substantial reduction in the value of outstanding shares of common
stock as a result of a spin-off or our payment of an extraordinary
dividend or distribution.

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Reorganization; Change in Control

Unless the committee determines otherwise, upon a reorganization where we
are not the surviving corporation, or we survive only as a subsidiary of another
corporation, all outstanding stock options and SARs that are not exercised will
be assumed by, or replaced with comparable options or rights by, the surviving
corporation.

Unless the committee determines otherwise, a change of control will not
result in the acceleration of exercisability of outstanding stock options or
SARs, the removal of restrictions and conditions on outstanding restricted stock
awards, or any accelerated payments in connection with outstanding performance
units.

However, the committee may elect to take any of the following actions:

. require that participants surrender their outstanding options and SARs
in exchange for a payment, in cash or common stock, in an amount equal
to the amount by which the then fair market value subject to the grants
exceeds the exercise price of the options or the base amount of the SARs
or
. terminate any or all unexercised options or SARs after giving
participants an opportunity to exercise the options or SARs.

The committee does not have the right to take any actions that would make
the reorganization or change of control ineligible for desired tax treatment if
the reorganization or change of control would otherwise qualify for this
treatment and we intend to use this treatment with respect to the transaction.

Federal Income Tax Consequences

The current federal income tax treatment of grants under the 1999 Plan is
described below. Local and state tax authorities also may tax incentive
compensation awarded under the 1999 Plan. Because of the complexities involved
in the application of tax laws to specific circumstances and the uncertainties
as to possible future changes in those laws, we urge participants to consult
their own tax advisors concerning the application of the general principles
discussed below to their own situations and the application of state and local
tax laws.

Incentive Stock Options
-----------------------

A participant will not recognize taxable income for the purpose of the
regular income tax upon either the grant or exercise of an incentive stock
option. However, for purposes of the alternative minimum tax imposed under the
Code, in the year in which an incentive stock option is exercised, the amount by
which the fair market value of the shares acquired upon exercise exceeds the
exercise price will be treated as an item of adjustment.

If a participant disposes of the shares acquired under an incentive stock
option after at least two years following the date of grant and at least one
year following the date of exercise, the participant will recognize a long-term
capital gain or loss equal to the difference between the amount realized upon
the disposition and the exercise price. We will not be entitled to any tax
deduction by reason of the grant or exercise of the incentive stock option.

If a participant disposes of shares acquired upon exercise of an incentive
stock option before satisfying both holding period requirements (known as a
disqualifying disposition), the gain recognized on the disposition will be taxed
as ordinary income to the extent of the difference between the lesser of the
sale price or the fair market value of the shares on the date of exercise and
the exercise price. We will be entitled to a federal income tax deduction in
the same amount. The gain, if any, in excess of the amount recognized as
ordinary income on a disqualifying disposition will be long-term or short-term
capital gain, depending upon the length of time the participant held the shares
before the disposition.

If a participant tenders shares of common stock received upon the exercise
of an incentive stock option to pay the exercise price within either the two-
year or one-year holding periods described above, the disqualifying disposition
of the shares used to pay the exercise cost will result in income (or loss) to
the participant and, to the extent of a recognized gain, a tax deduction to us.
If, however, the holding period requirements are met and the number of shares
received on the exercise does not exceed the number of shares surrendered, the
participant will recognize no gain or loss with respect to the surrendered
shares and will have the same basis and holding period

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with respect to the newly acquired shares as with respect to the surrendered
shares. To the extent that the number of shares received exceeds the number
surrendered, the participant's basis in the excess shares will equal the amount
of cash paid by the participant upon the original exercise of the stock option,
and the participant's holding period with respect to the excess shares will
begin on the date the shares are transferred to the participant. The tax
treatment described above for shares newly received upon exercise is not
affected by using shares to pay the exercise price.

Nonqualified Stock Options
--------------------------

There are no federal income tax consequences to a participant or us upon
the grant of a nonqualified stock option. Upon the exercise of a nonqualified
stock option, a participant will generally recognize ordinary income in an
amount equal to the excess of the fair market value of the shares at the time of
exercise over the exercise price, and we will be entitled to a corresponding
federal income tax deduction.

If a participant surrenders shares to pay the exercise price, and the
number of shares received on the exercise does not exceed the number of shares
surrendered, the participant will recognize no gain or loss on the surrendered
shares, and will have the same basis and holding period for the newly acquired
shares as for the surrendered shares. To the extent that the number of shares
received exceeds the number surrendered, the fair market value of the excess
shares on the date of exercise, reduced by any cash paid by the participant upon
exercise, will be includible in the gross income of the participant. The
participant's basis in the excess shares will equal the sum of the cash paid by
the participant upon the exercise of the stock option plus any amount included
in the participant's gross income as a result of the exercise of the stock
option.

The committee may permit a participant to elect to surrender or deliver
shares otherwise issuable upon exercise, or previously acquired shares, to
satisfy the federal income tax withholding, subject to the restrictions set
forth in the 1999 Plan. Such an election will result in a disposition of the
shares, which are surrendered or delivered, and an amount will be included in
the participant's income equal to the excess of the fair market value of the
shares over the participant's basis in the shares.

Upon the sale of the shares acquired by the exercise of a nonqualified
stock option, a participant will have a capital gain or loss (long-term or
short-term depending upon the length of time the shares were held) in an amount
equal to the difference between the amount realized upon the sale and the
participant's adjusted tax basis in the shares (the exercise price plus the
amount of ordinary income recognized by the participant at the time of exercise
of the nonqualified stock options).

Restricted Stock.
-----------------

A participant normally will not recognize taxable income upon the award of
a restricted stock grant, and we will not be entitled to a deduction, until the
stock is transferable by the participant or no longer subject to a substantial
risk of forfeiture for federal tax purposes, whichever occurs earlier. When the
common stock is either transferable or is no longer subject to a substantial
risk of forfeiture, the participant will recognize ordinary compensation income
in an amount equal to the fair market value of the common stock at that time,
less any consideration paid by the participant for the shares, and we will be
entitled to a federal income tax deduction in the same amount. A participant
may, however, elect to recognize ordinary compensation income in the year the
restricted stock grant is awarded in an amount equal to the fair market value of
our common stock at that time less any consideration paid by the participant for
the shares, determined without regard to the restrictions. In such event, we
generally will be entitled to a corresponding federal income tax deduction in
the same year. Any gain or loss recognized by the participant upon a subsequent
disposition of the shares will be capital gain or loss. If, after making the
election, any shares subject to a restricted stock grant are forfeited, or if
the market value declines during the restriction period, the participant is not
entitled to any tax deduction or tax refund if the participant does not recover
any consideration paid by the participant for the restricted stock.

Stock Appreciation Rights.
--------------------------

There are no federal income tax consequences to a participant or to us upon
the grant of a SAR. Upon the exercise of a SAR, a participant will recognize
ordinary compensation income in an amount equal to the cash and the fair market
value of the shares of common stock received upon exercise. We generally will be
entitled to a

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corresponding federal income tax deduction at the time of exercise. Upon the
sale of any shares acquired by the exercise of a SAR, a participant will have a
capital gain or loss (long-term or short-term depending upon the length of time
the shares were held) in an amount equal to the difference between the amount
realized upon the sale and the participant's adjusted tax basis in the shares
(the amount of ordinary income recognized by the participant at the time of
exercise of the SAR).

Performance Units.
------------------

A participant will not recognize any income upon the grant of a performance
unit. At the time the committee determines an amount, if any, to be paid with
respect to performance units, the participant will recognize ordinary
compensation income in an amount equal to the cash and the fair market value of
the shares of common stock authorized for payment by the committee. We generally
will be entitled to a corresponding federal income tax deduction. Upon the sale
of any shares acquired, a participant will have a capital gain or loss (long-
term or short-term depending upon the length of time the shares were held) in an
amount equal to the difference between the amount realized upon the sale and the
participant's adjusted tax basis in the shares (the amount of ordinary income
recognized by the participant upon payment of the shares).

Transfer of Stock Options.
----------------------------

The committee may permit participants to transfer nonqualified stock
options to family members or other persons or entities, consistent with
applicable law. The tax consequences of stock option transfers are complex and
should be carefully evaluated by a personal tax advisor.

Generally, a participant will not recognize income at the time the
participant makes a gift of a nonqualified stock option to a family member or
other person or entity. When the transferee later exercises the option, the
participant (and not the transferee) must recognize ordinary income on the
difference between the fair market value of the stock and the exercise price.

For federal gift tax purposes, if the participant transfers an option
before the option has become exercisable, the transfer will not be considered by
the Internal Revenue Service to be a completed gift until the option becomes
exercisable. Gifts of options may qualify for the $10,000 gift tax annual
exclusion. If the participant dies after transferring an option in a completed
gift transaction, the transferred option may be excluded from the participant's
estate for estate tax purposes if the applicable estate tax requirements have
been met.

Tax Withholding
---------------

All grants under the 1999 Plan are subject to applicable tax withholding
requirements. We have the right to deduct from all grants paid in cash, or from
other wages paid to a participant, any taxes required by law to be withheld with
respect to the grant. If grants are paid in shares of our common stock, we may
require a participant to pay the amount of any taxes that we are required to
withhold or may deduct the amount of withholding taxes from other wages paid to
the participant. If approved by the committee, the income tax withholding
obligation with respect to grants paid in common stock may be satisfied by
having shares withheld up to an amount that does not exceed the participant's
maximum marginal tax rate for federal (including FICA), state and local tax
liabilities. Our obligations under the 1999 Plan are conditional upon the
payment or arrangement for payment of any required withholding.

Section 162(m).
---------------

Under section 162(m) of the Code, we may be precluded from claiming a
federal income tax deduction for total remuneration in excess of $1,000,000 paid
to the chief executive officer or to any of the other four most highly
compensated officers in any one year. Total remuneration may include amounts
received upon the exercise of stock options and SARs granted under the 1999
Plan, the value of shares subject to restricted stock grants when the shares
become nonforfeitable (or such other time when income is recognized) and the
amounts received pursuant to other grants under the 1999 Plan. An exception does
exist, however, for "performance-based compensation." Grants of stock options
and SARs generally will meet the requirements of "performance-based
compensation." Restricted

DEF 14A 14th Page of 39 TOC 1st Previous Next Bottom Just 14th

stock grants generally will not qualify as, and performance units may not
qualify as, "performance-based compensation."

Vote Required and Board of Directors Recommendation

Approval of the Amendment to the Amended and Restated 1999 Equity
Compensation Plan will require that the votes cast in favor of the proposal at
the Annual Meeting will exceed the votes against the proposal. Accordingly,
abstentions and broker non-votes will have no effect on the results of the vote.
The proxies named in the proxy card intend to vote "for" the approval of the
amendment to the 1999 Plan unless otherwise instructed on the proxy card.

Your Board of Directors recommends a vote "FOR" approval of the 1999 Plan
Amendment.
.

PERFORMANCE GRAPH

Comparison of 23 Month Cumulative Total Return*
Among eMerge Interactive, Inc.,
the NASDAQ Stock Market (U.S.) Index
and the Morgan H & Q Internet 100 Index

EMERGE INTERACTIVE, INC.

[Enlarge/Download Table]

Cumulative Total Return
-------------------------------------------------------------------------------------
2/4/00 3/00 6/00 9/00 12/00 3/01 6/01 9/01 12/01

EMERGE INTERACTIVE, INC. 100.00 200.84 119.59 105.84 24.17 24.59 7.73 11.00 8.85
NASDAQ STOCK MARKET (U.S.) 100.00 116.57 101.36 93.27 62.45 46.62 54.95 38.12 49.56
JP MORGAN H & Q INTERNET 100.00 111.40 82.64 79.50 41.04 25.37 31.96 18.56 26.41

* $100 INVESTED ON 2/4/00 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.

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STOCK OWNERSHIP

The following table sets forth information regarding the beneficial
ownership of our common stock as of March 31, 2002 by (i) each person or entity
who is known by us to beneficially own more than 5% of our outstanding common
stock; (ii) Each of our directors; (iii) each of the executive officers named in
the Summary Compensation Table set forth below; and (iv) all of eMerge's
directors and executive officers as a group (all as of March 31, 2002):

[Enlarge/Download Table]

Shares
Beneficially
Outstanding Options Owned
Shares Exercisable Assuming
Beneficially Within 60 Days Exercise of Percent of
Name Owned Options Shares

Safeguard Scientifics, Inc. 14,449,022 2,109,162 16,558,184 39.3%
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087/(1)/
Internet Capital Group, Inc. 14,449,022 2,109,162 16,558,184 39.3%
435 Devon Park Drive
Building 600
Wayne, PA 19087/(2)/
Thomas L. Tippens 1,000 42,500 43,500 *
David C. Warren 0 0 0 *
John W. Poduska, Sr., Ph.D. 83,950 7,812 91,762 *
Douglas A. Alexander 0 75,000 75,000 *
Christopher J. Davis 1,000 0 1,000 *
Robert E. Drury 0 0 0 *
John C. Foltz 0 0 0 *
Robert S. Adams 7,004 0 7,004 *
Richard G. White 0 0 0 *
Scott L. Mathews 0 250,000 250,000 *
Reid Johnson 0 62,500 62,500 *
Kenneth G. Jordan 1,000 50,001 51,001 *
Juris Pagrabs 0 114,250 114,250 *
Charles L. Abraham 30,000 682,500 712,500 1.8%
T. Michael Janney 0 146,374 146,374 *
Arvind Subramanian 0 0 0 *
Executive officers and directors as
a group (16 persons) 123,954 1,430,937 1,554,891 3.8%

The symbol * means that the percentage is less than 1%.

(1) Includes the 8,338,110 shares beneficially owned by Internet Capital Group,
the 4,066,153 shares beneficially owned by Safeguard Delaware, Inc., a
wholly-owned subsidiary of Safeguard ("SDI"), and the 4,153,921 shares
beneficially owned by Safeguard Scientifics (Delaware), Inc., a wholly-
owned subsidiary of Safeguard ("SSDI"). Safeguard and each of SDI and SSDI
have reported that Safeguard together with each of SDI and SSDI,
respectively, have both shared voting and dispositive power with respect to
the shares held by each of SDI and SSDI, respectively, because Safeguard is
the sole stockholder of each of SDI and SSDI. Included in the 4,066,153
shares beneficially owned by SDI are 340,000 shares of eMerge common stock
that Safeguard 98 Capital, L.P. ("Safeguard 98") (of which SDI serves as
the general partner) has the option to acquire upon conversion of debt of
XL Vision, Inc. to Safeguard 98 and 120,721 shares of eMerge common stock
which SDI will acquire upon conversion of debt of XL Vision to SDI and
254,776 currently exercisable warrants. Safeguard and ICG have entered into
a joint venture agreement that, among other things, governs how the shares
of eMerge's common stock that are beneficially owned by each of them will
be voted.

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(2) Includes 8,220,074 shares beneficially owned by Safeguard. Safeguard and
ICG have entered into a joint venture agreement that, among other things,
governs how the shares of our common stock that are beneficially owned by
each of them will be voted. Also includes 1,250,000 shares of class A
common stock, 5,694,445 shares of class B common stock, a warrant to
purchase 1,138,889 shares of class B common stock and a warrant to purchase
254,776 shares of Class A common stock held by 1999 Internet Capital L.P.
("ICG LP"), a Delaware limited partnership of which ICG's wholly owned
subsidiary, ICG Holdings, Inc., is the sole general partner. ICG, ICG LP
and ICG Holdings each has shared voting and dispositive power with respect
to the shares held by ICG LP because ICG is the sole stockholder of ICG
Holdings and ICG Holdings is the sole general partner of ICG LP. ICG, ICG
LP and ICG Holdings share dispositive power over such 8,338,110 shares.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires eMerge's
directors, executive officers and persons holding more than ten percent of
eMerge's common stock to file reports of ownership and changes in ownership of
the common stock with the SEC. The directors, officers and ten percent
stockholders are required by the SEC regulations to furnish emerge with copies
of all Section 16(a) reports that they file. The SEC has designated specific due
dates for these reports and eMerge must identify in this proxy statement those
persons who did not file these reports when due.

Based solely on its review of copies of the reports received by eMerge
and written representations from certain reporting persons, eMerge believes that
all Section 16(a) reports were filed on a timely basis in fiscal 2001, except a
Form 4 filed late by Scott Mathews regarding stock options issued during 2001.

DIRECTORS AND EXECUTIVE OFFICERS

Set forth below is certain information as of March 31, 2002, concerning
eMerge's directors and executive officers.

[Enlarge/Download Table]

Year First
Present Position(s) Became a
Name with eMerge Age Director
---- ----------- --- --------

Thomas L. Tippens................ Chairman and Director 49 2001
David C. Warren.................. Chief Executive Officer and Director 52 2001
Scott L. Mathews................. President and Chief Operating Officer 44 --
Reid Johnson..................... Chief Financial Officer and Secretary 59 --
Kenneth G. Jordan................ Executive Vice President, Cattle
Operations 43 --
Juris Pagrabs.................... Executive Vice President, Corporate
Administration and Communications 46 --
John W. Poduska, Sr., Ph.D....... Director 64 1997
Douglas A. Alexander............. Director 40 1999
Christopher J. Davis............. Director 49 2000
Robert E. Drury.................. Director 55 2001
John C. Foltz.................... Director 69 2001
Robert S. Adams.................. Director 33 2001
Richard G. White................. Director 43 2002

Thomas L. Tippens. Mr. Tippens served as interim Chief Executive Officer
of eMerge Interactive, Inc. from June 2001 to September 2001 when Mr. Warren
joined the Company. Mr. Tippens is President and owner of West Oak Commodities,
Inc., a retail brokerage firm specializing in the trading of futures and
options, which he began in 1989. Mr. Tippens is a former owner and CEO of
Professional Cattle Consultants, LLC, a provider of comparative analysis and
market information to the cattle feedlot industry.

David C. Warren. From 1990 until September 2001, Mr. Warren was
President of Allflex USA, Inc. where he had overall responsibility for the
formation and expansion of Allflex in the U.S., Canada and Mexico.

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Additionally, while at Allflex USA, his responsibilities included the
development, adoption and growth of electronic ID systems for the cattle, swine
and dairy industries in the United States. His efforts provided an
infrastructure for the early Beef Alliances to adopt individual animal
management practices. Before joining Allflex, he associated with Fermenta Animal
Health from 1987 to 1990. From 1974 to 1987, he held various sales and product
management positions at SDS Biotech, Diamond Shamrock and Shell Animal Health.

Scott L. Mathews. Mr. Mathews joined eMerge Interactive in April 1999 and
serves as President and Chief Operating Officer. From 1996 to 1999, he was a
corporate officer, vice president and general manager for Key Technology, Inc.,
a manufacturer of machine vision and material handling products for the food
processing and pharmaceutical industries. From 1982 to 1996, Mr. Mathews held
several positions with General Electric Medical Systems, including general
manager of the Global Positron Emission Tomography (PET) business located in
Waukesha, Wis., and Uppsala, Sweden.

Reid Johnson. Mr. Johnson joined eMerge in June 2001 as Chief Financial
Officer. Prior to joining eMerge, he was a partner with Tatum CFO Partners, LLP,
a national organization of financial professionals. From 1997 to 1999, Mr.
Johnson was Senior Vice President and Chief Financial Officer of Venator Group
(formerly Woolworth Corporation). From 1968 to 1994 he held senior positions at
Target Corporation (formerly Dayton Hudson Corporation), including Chief
Financial Officer.

Kenneth G. Jordan. Mr. Jordan was appointed eMerge's Executive Vice
President, Cattle Operations in August 2001, after a year as eMerge's Director
of Auction Markets. In addition to serving as Chairman of the Texas Beef
Council, he holds several posts with the National Cattlemen's Beef Association
(NCBA) - including membership on its Executive Committee and I.D. Subcommittee,
and chairing its Live Cattle Marketing Council. Before joining eMerge, he had
been involved with Texas' premier livestock market, Jordan Cattle Auction, for
the previous 25 years. During his tenure at Jordan Cattle Auction, he pioneered
the sale of premium, health-certified cattle, an innovation for which he earned
the NCBA Vision Award in 2000. His experience also includes serving in
Washington, D.C., for several years as Congressman Charles Stenholm's
Agriculture Assistant, as Congressman Tom Loeffler's Chief of Staff and as
Agriculture Coordinator for the State of Texas.

Juris Pagrabs. Mr. Pagrabs was appointed eMerge's Executive Vice President
of Corporate Administration and Communications in December 2001. Mr. Pagrabs
joined eMerge Interactive in October 2000 as its Vice President of Investor
Relations and Corporate Communications. From 1997 to 2000, Mr. Pagrabs served as
Vice President of Investor Relations at Venator Group, the global specialty
retailer. From 1994 to 1997, he served as Vice President of Investor Relations
And Corporate Communications at OfficeMax, Inc. He also held a similar position
at Cedar Fair, L.P. and began his career at Arthur Andersen & Co.

John W. Poduska, Sr., Ph.D. Since 1992, Dr. Poduska has served as the
Chairman of Advanced Visual Systems Inc., a provider of visualization software
and solutions. From December 1989 until December 1991, Dr. Poduska was President
and Chief Executive Officer of Stardent Computer Inc., a computer manufacturer.
Dr. Poduska is also a member of the board of directors of Safeguard Scientifics,
Inc., Cambridge Technology Partners (Massachusetts), Inc., an affiliate of
Safeguard Scientifics, and Anadarko Petroleum Corporation, all public companies,
and XL Vision, Inc., an affiliate of Safeguard Scientifics, Inc.

Douglas A. Alexander. Mr. Alexander is a Managing Director of Internet
Capital Group, Inc. and the former President and Chief Executive Officer of ICG
Europe. He co-founded Reality Online, Inc. in 1986 and later sold it to Reuters
in 1994. Mr. Alexander continued to serve as President and Chief Executive
Officer of Reality Online after its acquisition until September 1997. Reality
Online developed financial planning tools and online services aimed at the
individual investor and then later became a provider of Internet solutions to
the retail brokerage industry. Prior to co-founding Reality Online, Mr.
Alexander was a partner with Strategic Management Group, a corporate training
firm. Mr. Alexander also serves as Vice Chairman of the Board of VerticalNet,
Inc., a public company, and serves as a director of LinkShare Corporation.

Christopher J. Davis. Mr. Davis holds the position of Executive Vice
President and Chief Financial Officer at Safeguard Scientifics, Inc. He has been
with Safeguard Scientifics, Inc. since March 2000. From September 1995 until
March 2000, Mr. Davis was an independent consultant and private investor in
several early stage technology-oriented companies. Prior to September 1995, he
served as President and Chief Executive Officer

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of LFC Financial Corporation, a privately held merchant banking company engaged
in complex financing transactions. Mr. Davis also serves as a member of the
board of directors of USDATA Corporation and XL Vision, Inc., affiliates of
Safeguard Scientifics.

Robert E. Drury. Mr. Drury was instrumental in the formation of Sodexho
Marriott Services, North America's largest food service provider, as Senior Vice
President and Chief Financial Officer for Sodexho US and Corporate Treasurer of
Sodexho Marriott Services from 1995 to 1999. From 1984 to 1995, Mr. Drury was
Senior Vice President and Chief Financial Officer for the Leisure/International
sector of Aramark Corporation, a $6 billion contract management business. From
1980 to 1984, he was Division Financial Officer for FMC Corporation, where he
was responsible for all financial and information systems. Prior to that he was
with Wilson Sporting Goods, a division of PepsiCo Inc. and Cities Service
Company, a petrochemicals company.

John C. Foltz. Mr. Foltz has more than ten years' experience at the USDA as
Administrator of Federal Grain Inspection Service (a President Bush appointee),
Legislative Officer, Office of the Secretary, Assistant Administrator, Foreign
Agricultural Service and Deputy Under Secretary for Congressional Relations. Mr.
Foltz has been Chief of Markets at the Ohio Department of Agriculture and most
recently was Assistant Commissioner (Agriculture) for the Commodity Futures
Trading Commission. He has served on numerous boards and councils, including the
National Agricultural Extension & Research Users' Advisory Board, USDA and was
Chairman of the Support Council, Ohio Agricultural Research and Development
Center.

Robert S. Adams. Mr. Adams has served as a member of the Board of Directors
of eMerge since November, 2001. He has been with Safeguard Scientifics since
1997 and a Vice President since 1999. He is responsible for leading the
identification and acquisition of interests in new partner companies as well as
providing ongoing strategic and operational guidance in support of the
development of these companies. From 1996 to 1997 Mr. Adams attended graduate
school at the University of Michigan, where he received an MBA with Distinction.
Prior to attending graduate school he worked for the Rascoff/Zysblatt
Organization and served in the Entrepreneurial Services unit of Ernst & Young.
Mr. Adams also has experience in the semiconductor industry. He currently serves
on the board of directors of ThinAirApps, NexTone Communications, SOTAS, and
RealTIME Media.

Richard G. White. Mr. White has been the managing director at Internet
Capital Group since 2000 with primary responsibility for its investor relations
and treasury functions. Prior to joining ICG, he served as Vice President of
Corporate Planning at PECO Energy, from 1998, with responsibility for strategic
and long-range planning, budgeting and business analysis, and
investor/stockholder relations. From 1986 to 1998, Mr. White was with ARCO, most
recently as its Director of Corporate Finance where he oversaw finance
activities covering capital markets, rating agencies, mergers and acquisitions
and executive compensation.

EXECUTIVE COMPENSATION

Under rules established by the SEC, eMerge is required to provide certain
information concerning total compensation earned or paid to: (i) the current
Chief Executive Officer and anyone who served in this capacity during fiscal
2001; (ii) the four other most highly compensated executive officers whose
annual salaries and bonuses exceeded $100,000 during fiscal 2001; and (iii) up
to two additional officers whose annual salaries and bonuses exceeded $100,000
during fiscal 2001, but who were not executive officers at the end of fiscal
year 2001 (the "Named Executive Officers").

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Summary Compensation Table

The following table sets forth certain compensation information for the
Named Executive Officers:

[Enlarge/Download Table]

Long Term
---------
Annual Compensation Compensation
------------------- ------------
Securities
Underlying
Other Annual Options/ All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) SARs (#) Compensation ($)
--------------------------- ---- ---------- --------- ---------------- -------- ----------------

David C. Warren (2) 2001 64,420 -- -- 500,000 3,352 (7)
Chief Executive Officer 2000 -- -- -- -- --
1999 -- -- -- -- --
Scott L. Mathews (1) 2001 175,011 -- -- 100,000 1,414 (5)
President and Chief 2000 172,300 -- -- -- 2,948 (5)
Operating Officer 1999 112,626 45,400 -- 225,000 117,043 (5)(6)(7)
Reid Johnson (2) 2001 70,196 -- -- 250,000 44,075 (6)(7)
Chief Financial Officer 2000 -- -- -- -- --
1999 -- -- -- -- --
Kenneth Jordan (3) 2001 138,312 -- 6,000 150,000 1,050 (5)
Executive Vice 2000 107,500 -- 4,875 50,000 900 (5)
President, Cattle 1999 -- -- -- -- --
Operations
Juris Pagrabs (3) 2001 150,010 -- -- 255,000 64,610 (7)
Executive Vice 2000 28,848 -- -- 150,000 49,974 (6)(7)
President, Corporate 1999 -- -- -- -- --
Administration and
Communications
Thomas L. Tippens (2)(4) 2001 83,254 -- -- 240,000 --
Chairman of the Board 2000 -- -- -- -- --
1999 -- -- -- -- --
Charles L. Abraham (10) 2001 99,389 -- 5,755 -- 191,543 (5)(8)
Chief Executive Officer 2000 187,297 -- 11,050 -- 194,674 (5)(9)
1999 175,861 70,000 10,200 -- 18,514 (5)(7)
T. Michael Janney(10) 2001 101,066 -- -- -- 100.619 (5)(8)
Executive Vice 2000 150,010 -- -- -- 4,673 (5)
President, Chief 1999 23,078 45,000 -- -- 3,183 (5)
Financial Officer and
Treasurer

Arvind Subramanian(10) 2001 96,011 -- -- -- 60,577 (8)
Executive Vice 2000 150,010 -- -- -- 58,946 (7)
President, Marketing 1999 23,078 6,653 -- -- 31,774 (6)(7)
and eBusiness

(1) Mr. Mathews has tendered his resignation and will be leaving eMerge on May
1, 2002.
(2) Messrs. Warren, Johnson and Tippens were not employed by eMerge prior to
2001.
(3) Messrs. Jordan and Pagrabs were not employed by eMerge prior to 2000.
(4) Mr. Tippens acted as Chief Executive Officer from June 2001 to September
2001 when Mr. Warren joined the Company.
(5) Includes employer 401(k) matching contributions of $1,414 for Mr. Mathews,
$1,050 for Mr. Jordan, $1,535 for Mr. Abraham and $1,212 for Mr. Janney in
2001; $2,948 for Mr. Mathews, $900 for Mr. Jordan, $5,319 for Mr. Abraham
and $4,673 for Mr. Janney in 2000; and $1,108 for Mr. Mathews, $4,800 for
Mr. Abraham and $3,183 for Mr. Janney in 1999.
(6) Includes sign-on bonuses of $30,000 for Mr. Johnson in 2001, $40,000 for
Mr. Pagrabs in 2000, $50,000 for Mr. Mathews in 1999 and $30,000 for Mr.
Subramanian in 1999.
(7) Includes relocation expense reimbursements of $3,352 for Mr. Warren, $14,
075 for Mr. Johnson and $64,610 for Mr. Pagrabs in 2001; $9,974 for Mr.
Pagrabs and $58,946 for Mr. Subramanian in 2000; and $65,935 for Mr.
Mathews, $13,714 for Mr. Abraham and $1,774 for Mr. Subramanian in 1999.
(8) Includes severance payments of $190,008 for Mr. Abraham, $99,407 for Mr.
Janney and $60,577 for Mr. Subramanian in 2001.
(9) Bonus paid in connection with eMerge's successful completion of its initial
public offering.
(10) Mr. Abraham, Mr. Janney and Mr. Subramanian were terminated in June 2001.
Prior to his termination, Mr. Abraham served as Chief Executive Officer.

DEF 14A 20th Page of 39 TOC 1st Previous Next Bottom Just 20th

Option Grants During Last Fiscal Year

The following table provides information regarding options granted in 2001
to the executive officers named in the Summary Compensation Table. The values
listed represent the hypothetical gains that could be achieved from the
respective options if exercised at the end of the option term. These gains are
based on assumed rates of stock appreciation of 5% and 10% compounded annually
from the date the respective options were granted to their expiration date based
upon the grant price.

[Enlarge/Download Table]

Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
----------------- -----------
Number of Percentage
Shares of Total
Underlying Options/
Options/SARs SARs Exercise Expiration
Name Granted (#) Granted Price ($/Sh) Date 5% 10%
----- ----------- ------- ------------ ---- ---- -----

David C. Warren...... 500,000 17.1% 1.44 8/30/2011 452,804 1,147,495
Scott L. Mathews..... 100,000 3.4% 0.89 6/26/2011 55,657 141,046
Reid Johnson......... 250,000 8.5% 0.89 6/26/2011 139,143 352,616
Kenneth G. Jordan.... 25,000 0.8% 4.41 2/13/2011 69,276 1765,559
50,000 1.7% 0.89 6/26/2011 27,829 70,523
75,000 2.6% 1.35 12/18/2011 63,440 160,767
Juris Pagrabs........ 80,000 2.7% 4.41 2/13/2011 221,683 561,788
175,000 6.0% 0.89 6/26/2011 97,400 246,831
Thomas L. Tippens.... 70,000 2.4% 4.41 2/13/2011 193,972 491,564
70,000 2.4% 0.89 6/26/2011 38,960 98,732
100,000 3.4% 0.87 7/25/2011 54,399 137,859
Charles L. Abraham... -- -- -- -- -- --
T. Michael Janney.... -- -- -- -- -- --
Arvind Subramanian... 100,000 3.4% 4.41 2/13/2011 277,104 702,235

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

The following table provides information relating to options exercised by
the Named Executive Officers during the year ended December 31, 2001 and the
number of options at year end which are currently exercisable:

[Enlarge/Download Table]

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options At Fiscal Year End At Fiscal Year End ($)
-------------------------- ----------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------

David C. Warren -- -- -- 500,000 -- --
Scott L. Mathews -- -- 193,750 131,250 11,125 33,375
Reid Johnson -- -- 62,500 187,500 27,813 83,437
Juris Pagrabs 7,000 2,975 94,250 303,750 16,354 58,406
Kenneth G. Jordan -- -- 37,501 162,499 -- 22,250
Thomas L. Tippens -- -- 25,000 215,000 11,625 66,025
Charles L. Abraham -- -- 682,500 -- 361,725 --
T. Michael Janney 30,000 26,550 146,374 -- 65,157 --
Arvind Subramanian -- -- -- -- -- --

DEF 14A 21st Page of 39 TOC 1st Previous Next Bottom Just 21st

Description of Employment Agreements, Severance Arrangements and Change of
Control Arrangements

David C. Warren holds the position of Chief Executive Officer and receives
an annual salary of $212,000 per year, subject to adjustment in the discretion
of the compensation committee, and a bonus to be paid on achievement of annual
targets established by the Board of Directors. Mr. Warren will receive
continued salary and benefits for a period of six months if his employment is
terminated without cause. In August 2001, Mr. Warren received options to
purchase 500,000 shares of common stock at $1.44 per share, with the options
vesting in four annual installments of 25% each starting with the first
anniversary of the grant date. If the company experiences a change of control,
100% of the options will automatically vest.

Scott L. Mathews holds the position of President and Chief Operating
Officer and receives an annual salary of $175,000 per year, subject to
adjustment in the discretion of the compensation committee, and a bonus of up to
40% of his base salary each year based on performance objectives established by
the Board of Directors. Mr. Mathews will receive continued salary and benefits
for a period of six months if his employment is terminated without cause. In
addition, the vesting schedule of all Mr. Mathews stock options will be
accelerated by twelve months and the vested options will remain exercisable for
a period of twenty-four months following date of termination. In 1999, Mr.
Mathews received options to purchase 225,000 shares of common stock at $2.40 per
share and in 2001 Mr. Mathews received options to purchase 100,000 shares of
common stock at $0.89 per share. These options vested 25% on the day of grant
with the remaining options vesting in three annual installments of 25% each. If
the company experiences a change of control, 100% of the options will
automatically vest. Effective May 1, 2002, Mr. Mathews has resigned his
position with eMerge.

Reid Johnson holds the position of Chief Financial Officer and receives an
annual salary of $150,000 per year, subject to adjustment in the discretion of
the compensation committee, and a bonus of up to 30% of his base salary each
year based on performance objectives established by the Board of Directors. Mr.
Johnson will receive continued salary and benefits for a period of six months if
his employment is terminated without cause. Mr. Johnson also received options
to purchase 250,000 shares of common stock at $0.89 per share in June 2001.
These options vested 25% on the day of grant with the remaining options vesting
in three annual installments of 25% each. If the company experiences a change
of control, 100% of the options will automatically vest.

Kenneth G. Jordan holds the position of Executive Vice President, Cattle
Operations and receives an annual salary of $150,000 per year, subject to
adjustment in the discretion of the compensation committee, and a bonus of up to
30% of his base salary each year based on performance objectives established by
the Board of Directors. Mr. Jordan received options to purchase 25,000 shares
of common stock at $46.91 per share in February 2000, options to purchase 25,000
shares of common stock at $15.66 per share in August 2000 and options to
purchase 50,000 shares of common stock at $0.89 per share in June 2001. These
options will vest in four annual installments of 25% each starting with the
first anniversary of the grant date. Mr. Jordan also received options to
purchase 25,000 shares of common stock at $4.41 per share in February 2001 and
options to purchase 75,000 shares of common stock at $1.35 per share in December
2001. These options vested 25% on the day of grant with the remaining options
vesting in three annual installments of 25% each.

Juris Pagrabs holds the position of Executive Vice President, Corporate
Administration and Communication and receives an annual salary of $150,000 per
year, subject to adjustment in the discretion of the compensation committee, and
a bonus of up to 35% of his base salary each year based on performance
objectives established by the Board of Directors. Mr. Pagrabs will receive
continued salary and benefits for a period of six months if his employment is
terminated without cause. In addition, the vesting schedule of all Mr. Pagrabs
stock options will be accelerated by twelve months and the vested options will
remain exercisable for a period of twenty-four months following date of
termination. Mr. Pagrabs received options to purchase 150,000 shares of common
stock at $11.91 per share in November 2000. These options vest in four annual
installments of 25% each starting with the first anniversary of the grant date.
Mr. Pagrabs also received options to purchase 80,000 shares of common stock at
$4.41 per share in February 2001 and options to purchase 175,000 shares of
common stock at $0.89 per share in June 2001. These options vested 25% on the
day of grant with the remaining options vesting in three annual installments of
25% each. If the company experiences a change of control, 100% of the options
will automatically vest.

DEF 14A 22nd Page of 39 TOC 1st Previous Next Bottom Just 22nd

Thomas L. Tippens currently holds the position of Executive Chairman of the
Board and held the position of Acting Chief Executive Officer from June 21, 2001
until August 30, 2001, when Mr. Warren was hired. While Mr. Tippens was
performing the duties of Acting Chief Executive Officer, he received an
annualized salary of $208,000. As of September 15, 2001, Mr. Tippens became the
Executive Chairman of the Board and receives an annual salary of $125,000. Mr.
Tippens received options to purchase 70,000 shares of common stock $4.41 per
share in February 2001 and options to purchase 70,000 shares of common stock
$0.89 per share in June 2001. These options vest in four annual installments of
25% each starting with the first anniversary of the grant date. Mr. Tippens
also received options to purchase 100,000 shares of common stock at $0.87 per
share in July 2001. These options vested 25% on the day of grant with the
remaining options vesting in three annual installments of 25% each. Unvested
options will terminate immediately upon Mr. Tippens resignation as Chairman of
the Board.

Until June, 20 2001, Charles L. Abraham held the position of Chief
Executive Officer and received an annual salary of $190,000 per year, subject to
adjustment in the discretion of the compensation committee, and a bonus of up to
40% of his base salary each year based on performance objectives established by
the Board of Directors. Pursuant to a separation agreement, Mr. Abraham
remained employed by us and received continued salary and benefits through July
2, 2001, at which time Mr. Abraham received a one time severance payment equal
to twelve months of his final base salary of $190,000. Mr. Abraham's unvested
stock options were accelerated by an additional twelve months and the vested
options remain exercisable for a period of twenty-four months following date of
termination. In addition, the exercise period for all previously vested options
was extended to a period of twenty-four months following date of termination.
However any options that were granted as incentive stock options that had not
been exercised by October 1, 2001 were automatically converted to non-qualified
stock options.

Until June 30, 2001, T. Michael Janney held the position of Chief Financial
Officer and received an annual salary of $150,000 per year, subject to
adjustment in the discretion of the compensation committee, and a bonus of up to
30% of his base salary each year based on performance objectives established by
the Board of Directors. Pursuant to a separation agreement, Mr. Janney remained
employed by us and received continued salary and benefits through November 30,
2001. In addition, Mr. Janney received one half or $50,000 of the total value
of the salary continuation upon execution of his severance agreement. From
December 1, 2001 for a three month period, Mr. Janney received salary and
medical and dental benefits, but did not accrue vacation or other benefits. Mr.
Janney also retained rights to purchase 137,311 option shares vested at the time
of his termination, as well as 39,063 option shares, which vested through
November 2001. We accelerated the vesting of the remaining 7,813 options held
by Mr. Janney and he retained the rights to purchase all vested option shares in
accordance with the terms of his stock option agreements and the terms of the
Amended and Restated 1996 Equity Compensation Plan and the Amended and Restated
1999 Equity Compensation Plan, except that the last date to exercise all vested
options shall be May 30, 2002, which is 180 days after his termination date.
Mr. Janney exercised his rights to purchase all 30,000 vested option shares
during December 2001.

Until June 30, 2001, Arvind Subramanian held the position of Executive Vice
President of Marketing and eBusiness and received an annual salary of $150,000
per year, subject to adjustment in the discretion of the compensation committee,
and a bonus of up to 35% of his base salary each year based on performance
objectives established by the Board of Directors. Pursuant to a separation
agreement, Mr. Subramanian received continued salary and benefits for a period
of six months. In addition, Mr. Subramanian received one half, or $37,500, of
the total value of the salary continuation upon execution of his severance
agreement, with the remaining half paid in biweekly installments. For this six-
month period, Mr. Subramanian also received medical and dental benefits, but did
not accrue vacation or other benefits. Mr. Subramanian also retained rights to
purchase 126,247 option shares vested at the time of his termination, and he
retained the rights to purchase all vested option shares in accordance with the
terms of his stock option agreements and the terms of the Amended and Restated
1999 Equity Compensation Plan, except that the last date to exercise all vested
options shares shall be December 27, 2001, which is 180 days after his
termination date. Mr. Subramanian chose not to exercise any of these options.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The compensation committee of the Board of Directors is composed of at
least two directors who are non-employees of the company (see the section
entitled "Information Regarding the Board of Directors and Committees" in this
Proxy Statement). The committee is responsible for setting and administering
the policies that govern both the annual compensation and benefits programs for
our executive officers as well as our equity compensation plans.

DEF 14A 23rd Page of 39 TOC 1st Previous Next Bottom Just 23rd

We use cash and stock-based compensation for three purposes: (1) to focus
executives on short- and long-term business strategy; (2) to reward individual
and corporate performance; and (3) to align our executives' interests with those
of stockholders. Ultimately, the goal is to maximize the success of the
company. As detailed in the Summary Compensation Table contained in this Proxy
Statement, a portion of our executives' compensation is variable and linked to
performance.

Cash Compensation

Our goal for cash compensation is to pay competitive base salaries, coupled
with a possible incentive bonus based on the achievement of annual objectives,
and to award stock options to motivate the building of stockholder wealth and
align the interests of our employees with those of our stockholders.

Base Salary

Base salary initially is established for new executives on the basis of
subjective factors, including experience, individual achievements and the level
of responsibility to be assumed. Base salary increases, if any, for executive
officers are determined annually by the committee based on subjective factors,
including the individual performance of the executive officer, maintaining an
appropriate scale among the executive officers based on relative positions and
responsibilities, and the competitiveness of the labor market. The budgeted
salary increase for all employees is also considered in determining base salary
increases for executive officers.

2001 Base Salary for Mr. Warren and the Other Named Executive Officers

Mr. Warren's base salary was established at $212,000 when he was appointed
Chief Executive Officer in September 2001 based on his individual achievements,
prior positions and responsibilities and the competitiveness of the labor
market. Base pay and salary increases for 2001 for the other Named Executive
Officers were determined by considering the subjective factors discussed
previously.

Management Incentive Plan

Annual cash incentive awards are granted by the committee to executive
officers based on corporate and individual performance. Awards to key
executives are based on subjective factors, including the comparative impact of
the individual's position to the overall corporate results as measured by the
position level, base salary of the individual, and the degree to which such
individual is able to affect the group or overall corporate results.

2001 Incentive Bonuses for the Named Executive Officers

There were no incentive bonuses earned or paid in 2001 for the Named
Executive Officers.

Stock-Based Compensation

The committee uses the equity compensation plan to attract and retain able
employees by awarding stock options. The committee and management believe that
broad and deep employee stock ownership effectively motivates the building of
stockholder wealth and aligns the interests of employees with those of the
stockholders. Awards are made to employees, advisors and consultants, and non-
employee directors who are responsible for the growth and sound development of
the company's business. Stock options are granted by the committee to the
executive officers and other employees based on subjective factors, including
their potential impact on corporate results and on their individual performance.
The size of stock option grants to the Chief Executive Officer and other
executive officers is periodically reviewed against option grants made by other
companies of similar size and background.

DEF 14A 24th Page of 39 TOC 1st Previous Next Bottom Just 24th

2001 Stock Option Grants

The committee granted stock options to certain of its new executives during
2001. The relative number of options granted was based on each person's
responsibilities.

Summary

The committee is satisfied that the compensation and incentive plans
provided to the Chief Executive Officer and the other executive officers of the
company are structured and operated so as to support the company's business
strategy and to create strong linkage and alignment with the long-term best
interests of the company and its stockholders. The committee will periodically
reevaluate these programs to ensure they continue to do so.

Compensation Committee:

Christopher J. Davis
Richard G. White
Robert E. Drury

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Lease Agreements with XL Vision, Inc. and XL Realty, Inc.

From January thru March 2001, we subleased our corporate facilities from XL
Vision, Inc., which leased the entire facility from XL Realty, Inc., a
subsidiary of Safeguard Scientifics. Our rent expense varied based upon space
occupied by us and included charges for base rent, repairs and maintenance,
telephone and networking expenses, real estate taxes and insurance.

On April 1, 2001, we relocated our corporate headquarters to 10305 102nd
Terrace, Sebastian, Florida, 32958, and now lease our corporate facilities
directly from XL Realty, Inc. Our rent expense was approximately $360,000 in
2001. We believe that the rent that we pay pursuant to all leases is consistent
with the market for similar space in our area. The lease with XL Realty
terminates on March 31, 2003.

Issuance of Preferred Stock and a Warrant to Internet Capital Group, Inc.

On November 16, 1999, we issued 4,555,556 shares of series D preferred
stock and a warrant to purchase 1,138,889 shares of class B common stock for the
aggregate consideration of $38.8 million to Internet Capital Group, Inc.

We received $18.0 million of the total purchase price in cash and $23.0
million in the form of a promissory note. The note was due and paid in full in
November 2000. Interest on the promissory note was imputed at 9.5% and amounted
to $2.2 million over the life of the note, approximately $400,000 was recognized
in 1999 and $1.8 million was recognized in 2000.

The series D preferred stock automatically converted into shares of class B
common stock concurrent with our initial public offering. The class B common
stock is entitled to two and one-half votes per share. The warrant expires
three years from the date of issuance and is exercisable at $15 per share. The
class B common stock automatically converts into class A common stock upon
transfer by Internet Capital Group to a non-affiliated party.

Douglas A. Alexander, one of our directors, is an executive officer of
Internet Capital Group. Richard White, also one of our directors, is a vice
president of Internet Capital Group. Additionally, Safeguard Scientifics
beneficially owns 14% of the outstanding shares of common stock of Internet
Capital Group as of March 30, 2002.

Internet Capital Group and Safeguard Scientifics are parties to a joint
venture agreement under which each has agreed to:

DEF 14A 25th Page of 39 TOC 1st Previous Next Bottom Just 25th

. Use best efforts to agree and vote on a course of action that is in the
best interest of both parties in all matters submitted to the
stockholders for approval ;

. Vote its shares for the election of two designees of Safeguard
Scientifics and two designees of Internet Capital Group in any election
of directors of eMerge Interactive, Inc.;

. Offer shares of our stock to the other party at the fair market price of
the shares before offering the shares to any unaffiliated party, other
than in a sale of all of its shares; and

. Discuss its intentions with the other party before selling all of its
shares to an unaffiliated party and use its best efforts to provide the
other party with the opportunity to purchase or participate in the
purchase of the shares.

Together, Internet Capital Group and Safeguard Scientifics beneficially own
39.3% of our capital stock and as a result control approximately 51% of the
voting power of our capital stock as of March 30, 2002.

AUDIT COMMITTEE REPORT

In accordance with the written charter adopted by the Board of Directors,
the Audit Committee assists the Board of Directors in fulfilling its
responsibility for oversight of the quality and integrity of our accounting,
auditing and financial reporting practices.

Management is responsible for our internal controls. Our independent
auditors are responsible for performing an independent audit of our consolidated
financial statements in accordance with generally accepted auditing standards
and to issue a report thereon. The Audit Committee has general oversight
responsibility with respect to our financial reporting, and reviews the results
and scope of the audit and other services provided by our independent auditors.

In this context, the Audit Committee has met and held discussions with
management and our independent auditors. Management represented to the Audit
Committee that our consolidated financial statements were prepared in accordance
with generally accepted accounting principles, and the Audit Committee has
reviewed and discussed the consolidated financial statements with management and
our independent auditors. The Audit Committee discussed with the independent
accountants matters required to be discussed by Statement on Auditing Standards
No. 61 (Communication with Audit Committees). Our independent auditors also
provided to the Audit Committee the written disclosures and the letter required
by Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees), and the Audit Committee discussed with the independent
auditors' their independence and the compatibility of non-audit services with
such independence.

Based upon the Audit Committee's discussion with management and our
independent auditors, and the Audit Committee's review of the representations of
management and the report of the independent accountants to the Audit Committee,
the Audit Committee recommended that the Board of Directors include our audited
consolidated financial statements in our Annual Report on Form 10-K for the year
ended December 31, 2001 filed with the Securities and Exchange Commission.

Submitted by the Audit Committee of the Board of Directors:

Robert E. Drury, Chairman
John W. Poduska, Sr., Ph.D.
John C. Foltz

The foregoing Audit Committee Report shall not be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission, nor
shall such information be incorporated by reference into any of our previous or
future filings with the Securities and Exchange Commission, except as otherwise
explicitly specified by us in any such filing.

DEF 14A 26th Page of 39 TOC 1st Previous Next Bottom Just 26th

INFORMATION CONCERNING INDEPENDENT PUBLIC ACCOUNTANTS

Since 1996, we have retained KPMG LLP as our independent public accountants
and intend to retain KPMG LLP for the current year ending December 31, 2002.

Representatives of KPMG LLP will be present at the Annual Meeting, will
have an opportunity at the meeting to make a statement if they desire to do so
and will be available to respond to appropriate questions.

Fees incurred during 2001 for services provided by KPMG LLP are as follows:

[Download Table]

. Audit fees (1) $ 235,000
. All other fees:
Tax services 49,800
Information risk management services 159,687
Other 6,500
----------
Total $ 450,987
==========

(1) Year end audit fees plus quarterly reviews

The Audit Committee believes that the amounts billed for all other fees are
compatible with maintaining the independence of our principal auditors.

STOCKHOLDER PROPOSALS

If you wish us to consider including a stockholder proposal in the proxy
statement for the annual meeting in 2003, you must submit the proposal, in
writing, so that our corporate secretary receives it no later than December 19,
2002. The proposal must meet the requirements established by the Securities and
Exchange Commission. If you wish to present a proposal at the annual meeting in
2003 that has not been included in the proxy statement, the management proxies
will be allowed to use their discretionary voting authority unless notice of
your proposal has been received by our Corporate Secretary no later than March
4, 2003. Your proposal should be sent to: eMerge Interactive, Inc., Attention:
Corporate Secretary, 10305 102nd Terrace, Sebastian, Florida 32958.

OTHER MATTERS

As of the date of this proxy statement, eMerge knows of no other business
that will be presented for consideration at the Annual Meeting other than the
items referred to above. If any other matter is properly brought before the
meeting for action by stockholders, proxies in the enclosed form returned to
eMerge will be voted in accordance with the recommendation of the Board of
Directors or, in the absence of such recommendation, in accordance with the
judgment of the proxy holder.

ANNUAL REPORT

A copy of eMerge's Annual Report accompanies this proxy statement.
Additional copies may be obtained by writing to Reid Johnson, Chief Financial
Officer at eMerge Interactive, Inc., 10305 102nd Terrace, Sebastian, Florida
32958.

By Order of the Board of Directors,

Reid Johnson
Chief Financial Officer and Secretary

Sebastian, Florida
April 18, 2002

DEF 14A 27th Page of 39 TOC 1st Previous Next Bottom Just 27th

Appendix A

AMENDED AND RESTATED
eMERGE INTERACTIVE, INC.
1999 EQUITY COMPENSATION PLAN

The purpose of the eMerge Interactive, Inc. 1999 Equity Compensation Plan
(the "Plan") is to provide (i) designated employees of eMerge Interactive, Inc.
(the "Company") and its subsidiaries, (ii) individuals to whom an offer of
employment has been extended, (iii) certain advisors who perform services for
the Company or its subsidiaries, and (iv) non-employee members of the Board of
Directors of the Company (the "Board") with the opportunity to receive grants of
incentive stock options, nonqualified stock options, stock appreciation rights,
restricted stock and performance units. The Company believes that the Plan will
encourage the participants to contribute materially to the growth of the
Company, thereby benefiting the Company's stockholders, and will align the
economic interests of the participants with those of the stockholders.

1. Administration
--------------

(a) Committee. The Plan shall be administered and interpreted by a
---------
committee appointed by the Board (the "Committee"). The Committee shall consist
of two or more persons appointed by the Board, all of whom may be "outside
directors" as defined under section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code") and related Treasury regulations and may be "non-
employee directors" as defined under Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members or may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. The Committee may revoke any
such allocation or delegation at any time. If the Committee does not exist, or
for any other reason determined by the Board, the Board may take any action
under the Plan that would otherwise be the responsibility of the Committee.

(b) Committee Authority. The Committee shall have the sole authority
-------------------
to (i) determine the individuals to whom grants shall be made under the Plan,
(ii) determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, and (iv)
deal with any other matters arising under the Plan.

(c) Committee Determinations. The Committee shall have full power and
------------------------
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.

2. Grants
------

Awards under the Plan may consist of grants of incentive stock options as
described in Section 5 ("Incentive Stock Options"), nonqualified stock options
as described in Section 5 ("Nonqualified Stock Options") (Incentive Stock
Options and Nonqualified Stock Options are collectively referred to as
"Options"), restricted stock as described in Section 6 (Restricted Stock"),
stock appreciation rights as described in Section 7 ("SARs"), and performance
units as described in Section 8 ("Performance Units") (hereinafter collectively
referred to as "Grants"). All Grants shall be subject to the terms and
conditions set forth herein and to such other terms and conditions consistent
with this Plan as the Committee deems appropriate and as are specified in
writing by the Committee to the individual in a grant instrument (the "Grant
Instrument") or an amendment to the Grant Instrument. The Committee shall
approve the basic form and provisions of each Grant Instrument. Grants under a
particular Section of the Plan need not be uniform as among the grantees.

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3. Shares Subject to the Plan
--------------------------

(a) Shares Authorized. Subject to the adjustment specified below, the
-----------------
aggregate number of shares of common stock of the Company ("Company Stock") that
may be issued or transferred under the Plan is 4,000,000 shares. The maximum
aggregate number of shares of Company Stock that shall be subject to Grants made
under the Plan to any individual during any calendar year shall be 625,000
shares. The shares may be authorized but unissued shares of Company Stock or
reacquired shares of Company Stock, including shares purchased by the Company on
the open market for purposes of the Plan. If and to the extent Options or SARs
granted under the Plan terminate, expire, or are canceled, forfeited, exchanged
or surrendered without having been exercised, or if any shares of Restricted
Stock or Performance Units are forfeited, the shares subject to such Grants
shall again be available for purposes of the Plan.

(b) Adjustments. If there is any change in the number or kind of
-----------
shares of Company Stock outstanding (i) by reason of a stock dividend, spin-off,
recapitalization, stock split or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spin-off or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that
any individual participating in the Plan may be granted in any year, the number
of shares covered by outstanding Grants, the kind of shares issued under the
Plan, and the price per share or the applicable market value of such Grants
shall be appropriately adjusted by the Committee to reflect any increase or
decrease in the number of, or change in the kind or value of, issued shares of
Company Stock to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under such Grants; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated by rounding
any portion of a share equal to .5 or greater up, and any portion of a share
equal to less than .5 down, in each case to the nearest whole number. Any
adjustments determined by the Committee shall be final, binding and conclusive.

4. Eligibility for Participation
-----------------------------

(a) Eligible Persons. All employees of the Company and its
----------------
subsidiaries ("Employees"), including Employees who are officers or members of
the Board, individuals to whom an offer of employment has been extended ("New
Hire"), and members of the Board who are not Employees ("Non-Employee
Directors") shall be eligible to participate in the Plan. Advisors who perform
services to the Company or any of its subsidiaries ("Key Advisors") shall be
eligible to participate in the Plan if the Key Advisors render bona fide
services and such services are not in connection with the offer or sale of
securities in a capital-raising transaction.

(b) Selection of Grantees. The Committee shall select the Employees,
---------------------
New Hires, Non-Employee Directors and Key Advisors to receive Grants and shall
determine the number of shares of Company Stock subject to a particular Grant in
such manner as the Committee determines. Employees, New Hires, Key Advisors and
Non-Employee Directors who receive Grants under this Plan shall hereinafter be
referred to as "Grantees."

5. Granting of Options
-------------------

(a) Number of Shares. The Committee shall determine the number of
----------------
shares of Company Stock that will be subject to each Grant of Options to
Employees, New Hires, Non-Employee Directors and Key Advisors.

(b) Type of Option and Price.
------------------------

(i) The Committee may grant Incentive Stock Options that are
intended to qualify as "incentive stock options" within the meaning of section
422 of the Code, Nonqualified Stock Options that are not intended so to qualify,
or any combination of Incentive Stock Options and Nonqualified Stock Options,
all in accordance with the terms and conditions set forth herein. Incentive
Stock Options may be granted only to

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Employees. Nonqualified Stock Options may be granted to Employees, New Hires,
Non-Employee Directors and Key Advisors.

(ii) The purchase price (the "Exercise Price") of Company Stock
subject to an Option shall be determined by the Committee and may be equal to,
greater than, or less than the Fair Market Value (as defined below) of a share
of Company Stock on the date the Option is granted, provided, however, that (x)
the Exercise Price of an Incentive Stock Option shall be equal to, or greater
than, the Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (y) an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all classes of stock of
the Company or any parent or subsidiary of the Company, unless the Exercise
Price per share is not less than 110% of the Fair Market Value of Company Stock
on the date of grant.

(iii) If the Company Stock is publicly traded, then, except as
otherwise determined by the Committee, the following rules regarding the
determination of Fair Market Value per share apply:

(x) if the principal trading market for the Company Stock
is a national securities exchange or the NASDAQ National Market,
the mean between the highest and lowest quoted selling prices on
the relevant date or (if there were no trades on that date) the
latest preceding date upon which a sale was reported, or

(y) if the Company Stock is not principally traded on such
exchange or market, the mean between the last reported "bid" and
"asked" prices of Company Stock on the relevant date, as reported
on NASDAQ or, if not so reported, as reported by the National
Daily Quotation Bureau, Inc. or as reported in a customary
financial reporting service, as applicable and as the Committee
determines. If the Company Stock is not publicly traded or, if
publicly traded, is not subject to reported transactions or "bid"
or "asked" quotations as set forth above, the Fair Market Value
per share shall be as determined by the Committee.

(c) Option Term. The Committee shall determine the term of each
-----------
Option. The term of any Option shall not exceed ten years from the date of
grant. However, an Incentive Stock Option that is granted to an Employee who, at
the time of grant, owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company, or any parent or
subsidiary of the Company, may not have a term that exceeds five years from the
date of grant.

(d) Exercisability of Options.
-------------------------

(i) Options shall become exercisable in accordance with such
terms and conditions, consistent with the Plan, as may be determined by the
Committee and specified in the Grant Instrument or an amendment to the Grant
Instrument. The Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason.

(ii) Notwithstanding the foregoing, the Option may, but need
not, include a provision whereby the Grantee may elect at any time while an
Employee, Non-Employee Director, or Key Advisor to exercise the Option as to any
part or all of the shares subject to the Option prior to the full vesting of the
Option. Any unvested shares so purchased shall be subject to a repurchase right
in favor of the Company, with the repurchase price to be equal to the original
purchase price, and any other restrictions the Committee determines to be
appropriate.

(e) Termination of Employment, Disability or Death.
----------------------------------------------

(i) Except as provided below, an Option may only be exercised
while the Grantee is employed by the Company as an Employee, Key Advisor or
member of the Board. In the event that a Grantee ceases to be employed by the
Company for any reason other than a "disability," death or "termination for
cause," any Option which is otherwise exercisable by the Grantee shall terminate
unless exercised within 90 days after the date on which the Grantee ceases to be
employed by the Company (or within such other period of time as may be

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specified by the Committee), but in any event no later than the date of
expiration of the Option term. Any of the Grantee's Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by the Company shall terminate as of such date.

(ii) In the event the Grantee ceases to be employed by the
Company on account of a "termination for cause" by the Company, any Option held
by the Grantee shall terminate as of the date the Grantee ceases to be employed
by the Company. In addition to the immediate termination of all Grants, the
Grantee shall automatically forfeit all shares underlying any exercised portion
of an Option, upon refund by the Company of the Exercise Price by the Grantee
for such shares.

(iii) In the event the Grantee ceases to be employed by the
Company because the Grantee is "disabled," any Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within one year
after the date on which the Grantee ceases to be employed by the Company (or
within such other period of time as may be specified by the Committee), but in
any event no later than the date of expiration of the Option term. Any of the
Grantee's Options, which are not otherwise exercisable as of the date on which
the Grantee ceases to be employed by the Company, shall terminate as of such
date.

(iv) If the Grantee dies while employed by the Company or within
90 days after the date on which the Grantee ceases to be employed on account of
a termination of employment specified in Section 5(e)(i) above (or within such
other period of time as may be specified by the Committee), any Option that is
otherwise exercisable by the Grantee shall terminate unless exercised within one
year after the date on which the Grantee ceases to be employed by the Company
(or within such other period of time as may be specified by the Committee), but
in any event no later than the date of expiration of the Option term. Any of the
Grantee's Options that are not otherwise exercisable as of the date on which the
Grantee ceases to be employed by the Company shall terminate as of such date.

(v) For purposes of Sections 5(e), 6, 7, and 8:

(A) "Company," when used in the phrase "employed by the
Company," shall mean the Company, its parent, and any subsidiary
corporations.

(B) "Employed by the Company" shall mean employment or
service as an Employee, Key Advisor, or member of the Board (so that,
for purposes of exercising Options and SARs and satisfying conditions
with respect to Restricted Stock and Performance Units, a Grantee
shall not be considered to have terminated employment or service until
the Grantee ceases to be an Employee, Key Advisor, and member of the
Board), unless the Committee determines otherwise. The Committee's
determination as to a participant's employment or other provision of
services, termination of employment or cessation of the provision of
services, leave of absence or reemployment shall be conclusive on all
persons unless determined to be incorrect.

(D) "Termination for cause" shall mean the determination
of the Committee that any one or more of the following events has
occurred:

(1) the Grantee's conviction of any act which constitutes
a felony under applicable federal or state law, either in connection
with the performance of the Grantee's obligations on behalf of the
Company or which affects the Grantee's ability to perform his or her
obligations as an employee, board member or advisor of the Company or
under any employment agreement, non-competition agreement,
confidentiality agreement or like agreement or covenant between the
Grantee and the Company (any such agreement or covenant being herein
referred to as an "Employment Agreement");

(2) the Grantee's willful misconduct in connection with
the performance of his or her duties and responsibilities as an
employee, board member or advisor of the Company or under any
Employment

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Agreement, which willful misconduct is not cured by the Grantee within
10 days of his or her receipt of written notice thereof from the
Committee;

(3) the Grantee's commission of an act of embezzlement,
fraud or dishonesty, which results in a loss, damage or injury to the
Company;

(4) the Grantee's substantial and continuing neglect,
gross negligence or inattention in the performance of his or her
duties as an employee, board member or advisor of the Company or under
any Employment Agreement which is not cured by the Grantee within 10
days of his or her receipt of written notice thereof from the
Committee;

(5) the Grantee's unauthorized use or disclosure or any
trade secret or confidential information of the Company which
adversely affects the business of the Company, provided that any
disclosure of any trade secret or confidential information of the
Company to a third party in the ordinary course of business who signs
a confidentiality agreement shall not be deemed a breach of this
subparagraph;

(6) the Grantee's material breach of any of the provisions
of any Employment Agreement, which material breach is not cured by the
Grantee within 10 days of his or her receipt of a written notice from
the Company specifying such material breach; or

(7) the Grantee has voluntarily terminated his or her
employment or service with the Company and breaches his or her
noncompetition agreement with the Company.

(f) Exercise of Options. A Grantee may exercise an Option that has
-------------------
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company with payment of the Exercise Price. The Grantee shall pay the
Exercise Price for an Option as specified by the Committee:

(i) in cash,

(ii) by delivering shares of Company Stock owned by the Grantee
for the period necessary to avoid a charge to the Company's earnings for
financial reporting purposes (including Company Stock acquired in connection
with the exercise of an Option, subject to such restrictions as the Committee
deems appropriate) and having a Fair Market Value on the date of exercise equal
to the Exercise Price,

(iii) after a Public Offering, by payment through a broker in
accordance with procedures permitted by Regulation T of the Federal Reserve
Board, or

(iv) by such other method of payment as the Committee may
approve.

Shares of Company Stock used to exercise an Option shall have
been held by the Grantee for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the Option. The Grantee
shall pay the Exercise Price and the amount of any withholding tax due (pursuant
to Section 9) at the time of exercise.

(g) Limits on Incentive Stock Options. Each Incentive Stock Option
---------------------------------
shall provide that if the aggregate Fair Market Value of the stock on the date
of the grant with respect to which Incentive Stock Options are exercisable for
the first time by a Grantee during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, exceeds
$100,000, then the option, as to the excess, shall be treated as a Nonqualified
Stock Option. An Incentive Stock Option shall not be granted to any person who
is not an Employee of the Company or a parent or subsidiary (within the meaning
of section 424(f) of the Code).

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6. Restricted Stock Grants
-----------------------

The Committee may issue or transfer shares of Company Stock to a Grantee
under a Grant of Restricted Stock upon such terms as the Committee deems
appropriate. The following provisions are applicable to Restricted Stock:

(a) General Requirements. Shares of Company Stock issued or
--------------------
transferred pursuant to Restricted Stock Grants may be issued or transferred for
consideration or for no consideration, as determined by the Committee. The
Committee may establish conditions under which restrictions on shares of
Restricted Stock shall lapse over a period of time or according to such other
criteria as the Committee deems appropriate. The period of time during which the
Restricted Stock will remain subject to restrictions will be designated in the
Grant Instrument as the "Restriction Period."

(b) Number of Shares. The Committee shall determine the number of
----------------
shares of Company Stock to be issued or transferred pursuant to a Restricted
Stock Grant and the restrictions applicable to such shares.

(c) Requirement of Employment. If the Grantee ceases to be employed
-------------------------
by the Company (as defined in Section 5(e)) during a period designated in the
Grant Instrument as the Restriction Period, or if other specified conditions are
not met, the Restricted Stock Grant shall terminate as to all shares covered by
the Grant as to which the restrictions have not lapsed, and those shares of
Company Stock must be immediately returned to the Company. The Committee may,
however, provide for complete or partial exceptions to this requirement, as it
deems appropriate.

(d) Restrictions on Transfer and Legend on Stock Certificate. During
--------------------------------------------------------
the Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of Restricted Stock except to a Successor
Grantee under Section 10(a). Each certificate for a share of Restricted Stock
shall contain a legend giving appropriate notice of the restrictions in the
Grant. The Grantee shall be entitled to have the legend removed from the stock
certificate covering the shares subject to restrictions when all restrictions on
such shares have lapsed. The Committee may determine that the Company will not
issue certificates for shares of Restricted Stock until all restrictions on such
shares have lapsed, or that the Company will retain possession of certificates
for shares of Restricted Stock until all restrictions on such shares have
lapsed.

(e) Right to Vote and to Receive Dividends. Unless the Committee
--------------------------------------
determines otherwise, during the Restriction Period, the Grantee shall have the
right to vote shares of Restricted Stock and to receive any dividends or other
distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee.

(f) Lapse of Restrictions. All restrictions imposed on Restricted
---------------------
Stock shall lapse upon the expiration of the applicable Restriction Period and
the satisfaction of all conditions imposed by the Committee. The Committee may
determine, as to any or all Restricted Stock Grants, that the restrictions shall
lapse without regard to any Restriction Period.

7. Stock Appreciation Rights
-------------------------

(a) General Requirements. The Committee may grant stock appreciation
--------------------
rights ("SARs") to a Grantee separately or in tandem with any Option (for all or
a portion of the applicable Option). Tandem SARs may be granted either at the
time the Option is granted or at any time thereafter while the Option remains
outstanding; provided, however, that, in the case of an Incentive Stock Option,
SARs may be granted only at the time of the Grant of the Incentive Stock Option.
The Committee shall establish the base amount of the SAR at the time the SAR is
granted. Unless the Committee determines otherwise, the base amount of each SAR
shall be equal to the per share Exercise Price of the related Option or, if
there is no related Option, the Fair Market Value of a share of Company Stock as
of the date of Grant of the SAR.

(b) Tandem SARs. In the case of tandem SARs, the number of SARs
-----------
granted to a Grantee that shall be exercisable during a specified period shall
not exceed the number of shares of Company Stock that the Grantee may purchase
upon the exercise of the related Option during such period. Upon the exercise of
an Option,

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the SARs relating to the Company Stock covered by such Option shall terminate.
Upon the exercise of SARs, the related Option shall terminate to the extent of
an equal number of shares of Company Stock.

(c) Exercisability. A SAR shall be exercisable during the period
--------------
specified by the Committee in the Grant Instrument and shall be subject to such
vesting and other restrictions as may be specified in the Grant Instrument. The
Committee may accelerate the exercisability of any or all outstanding SARs at
any time for any reason. SARs may only be exercised while the Grantee is
employed by the Company or during the applicable period after termination of
employment as described in Section 5(e). A tandem SAR shall be exercisable only
during the period when the Option to which it is related is also exercisable. No
SAR may be exercised for cash by an officer or director of the Company or any of
its subsidiaries who is subject to Section 16 of the Exchange Act, except in
accordance with Rule 16b-3 under the Exchange Act.

(d) Value of SARs. When a Grantee exercises SARs, the Grantee shall
-------------
receive in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised, payable in cash, Company Stock or
a combination thereof. The stock appreciation for a SAR is the amount by which
the Fair Market Value of the underlying Company Stock on the date of exercise of
the SAR exceeds the base amount of the SAR as described in Subsection (a).

(e) Form of Payment. The Committee shall determine whether the
---------------
appreciation in a SAR shall be paid in the form of cash, shares of Company
Stock, or a combination of the two, in such proportion as the Committee deems
appropriate. For purposes of calculating the number of shares of Company Stock
to be received, shares of Company Stock shall be valued at their Fair Market
Value on the date of exercise of the SAR. If shares of Company Stock are to be
received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.

8. Performance Units
-----------------

(a) General Requirements. The Committee may grant performance units
--------------------
("Performance Units") to a Grantee. Each Performance Unit shall represent the
right of the Grantee to receive an amount based on the value of the Performance
Unit, if performance goals established by the Committee are met. A Performance
Unit shall be based on the Fair Market Value of a share of Company Stock or on
such other measurement base as the Committee deems appropriate. The Committee
shall determine the number of Performance Units to be granted and the
requirements applicable to such Units.

(b) Performance Period and Performance Goals. When Performance Units
----------------------------------------
are granted, the Committee shall establish the performance period during which
performance shall be measured (the "Performance Period"), performance goals
applicable to the Units ("Performance Goals") and such other conditions of the
Grant, as the Committee deems appropriate. Performance Goals may relate to the
financial performance of the Company or its operating units, the performance of
Company Stock, individual performance, or such other criteria as the Committee
deems appropriate.

(c) Payment with respect to Performance Units. At the end of each
-----------------------------------------
Performance Period, the Committee shall determine to what extent the Performance
Goals and other conditions of the Performance Units are met and the amount, if
any, to be paid with respect to the Performance Units. Payments with respect to
Performance Units shall be made in cash, in Company Stock, or in a combination
of the two, as determined by the Committee.

(d) Requirement of Employment. If the Grantee ceases to be employed
-------------------------
by the Company (as defined in Section 5(e)) during a Performance Period, or if
other conditions established by the Committee are not met, the Grantee's
Performance Units shall be forfeited. The Committee may, however, provide for
complete or partial exceptions to this requirement, as it deems appropriate.

9. Qualified Performance-Based Compensation.
-----------------------------------------

(a) Designation as Qualified Performance-Based Compensation. The
-------------------------------------------------------
Committee may determine that Performance Units or Restricted Stock granted to an
Employee shall be considered "qualified performance-based compensation" under
Section 162(m) of the Code. The provisions of this Section 9 shall apply

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to Grants of Performance Units and Restricted Stock that are to be considered
"qualified performance-based compensation" under Section 162(m) of the Code.

(b) Performance Goals. When Performance Units or Restricted Stock
-----------------
that are to be considered "qualified performance-based compensation" are
granted, the Committee shall establish in writing (i) the objective performance
goals that must be met in order for restrictions on the Restricted Stock to
lapse or amounts to be paid under the Performance Units, (ii) the Performance
Period during which the performance goals must be met, (iii) the threshold,
target and maximum amounts that may be paid if the performance goals are met,
and (iv) any other conditions, including without limitation provisions relating
to death, disability, other termination of employment or Reorganization, that
the Committee deems appropriate and consistent with the Plan and Section 162(m)
of the Code. The performance goals may relate to the Employee's business unit or
the performance of the Company and its subsidiaries as a whole, or any
combination of the foregoing. The Committee shall use objectively determinable
performance goals based on one or more of the following criteria: stock price,
earnings per share, net earnings, operating earnings, return on assets,
stockholder return, return on equity, growth in assets, unit volume, sales,
market share, or strategic business criteria consisting of one or more
objectives based on meeting specific revenue goals, market penetration goals,
geographic business expansion goals, cost targets or goals relating to
acquisitions or divestitures.

(c) Establishment of Goals. The Committee shall establish the
----------------------
performance goals in writing either before the beginning of the Performance
Period or during a period ending no later than the earlier of (i) 90 days after
the beginning of the Performance Period or (ii) the date on which 25% of the
Performance Period has been completed, or such other date as may be required or
permitted under applicable regulations under Section 162(m) of the Code. The
performance goals shall satisfy the requirements for "qualified performance-
based compensation," including the requirement that the achievement of the goals
be substantially uncertain at the time they are established and that the goals
be established in such a way that a third party with knowledge of the relevant
facts could determine whether and to what extent the performance goals have been
met. The Committee shall not have discretion to increase the amount of
compensation that is payable upon achievement of the designated performance
goals.

(d) Maximum Payment. If Restricted Stock, or Performance Units
---------------
measured with respect to the fair market value of the Company Stock, is granted,
not more than 625,000 shares may be granted to any Grantee for any Performance
Period. If Performance Units are measured with respect to other criteria, the
maximum amount that may be paid to an Employee with respect to a Performance
Period is $ 1,000,000.

(e) Announcement of Grants. The Committee shall certify and announce
----------------------
the results for each Performance Period to all Grantees immediately following
the announcement of the Company's financial results for the Performance Period.
If and to the extent that the Committee does not certify that the performance
goals have been met, the grants of Restricted Stock or Performance Units for the
Performance Period shall be forfeited.

10. Withholding of Taxes
--------------------

(a) Required Withholding. All Grants under the Plan shall be subject
--------------------
to applicable federal (including FICA), state and local tax withholding
requirements. The Company shall have the right to deduct from all Grants paid in
cash, or from other wages paid to the Grantee, any federal, state or local taxes
required by law to be withheld with respect to such Grants. In the case of
Options and other Grants paid in Company Stock, the Company may require the
Grantee or other person receiving such shares to pay to the Company the amount
of any such taxes that the Company is required to withhold with respect to such
Grants, or the Company may deduct from other wages paid by the Company the
amount of any withholding taxes due with respect to such Grants.

(b) Election to Withhold Shares. If the Committee so permits, a
---------------------------
Grantee may elect to satisfy the Company's income tax withholding obligation
with respect to an Option, SAR, Restricted Stock or Performance Units paid in
Company Stock by having shares withheld up to an amount that does not exceed the
Grantee's maximum marginal tax rate for federal (including FICA), state and
local tax liabilities. The election must be in a form and manner prescribed by
the Committee and shall be subject to the prior approval of the Committee.

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11. Transferability of Grants
-------------------------

(a) Nontransferability of Grants. Except as provided below, only the
----------------------------
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except by will or by the laws of descent
and distribution or, with respect to Grants other than Incentive Stock Options,
if permitted in any specific case by the Committee, pursuant to a domestic
relations order (as defined under the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the regulations therein). When a
Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee ("Successor Grantee") may exercise such rights. A
Successor Grantee must furnish proof satisfactory to the Company of his or her
right to receive the Grant under the Grantee's will or under the applicable laws
of descent and distribution.

(b) Transfer of Nonqualified Stock Options. Notwithstanding the
--------------------------------------
foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may
transfer Nonqualified Stock Options to family members or other persons or
entities according to such terms as the Committee may determine; provided that
the Grantee receives no consideration for the transfer of an Option and the
transferred Option shall continue to be subject to the same terms and conditions
as were applicable to the Option immediately before the transfer.

12. Reorganization of the Company.
-----------------------------

(a) Reorganization. As used herein, a "Reorganization" shall be
--------------
deemed to have occurred if the stockholders of the Company approve (or, if
stockholder approval is not required, the Board of Directors approves) an
agreement providing for (i) the merger or consolidation of the Company with
another corporation where the stockholders of the Company, immediately prior to
the merger or consolidation, will not beneficially own, immediately after the
merger or consolidation, shares entitling such stockholders to more than 50% of
all votes to which all stockholders of the surviving corporation would be
entitled in the election of directors (without consideration of the rights of
any class of stock to elect directors by a separate class vote), (ii) the sale
or other disposition of all or substantially all of the assets of the Company,
or (iii) a liquidation or dissolution of the Company.

(b) Assumption of Grants. Upon a Reorganization where the Company is
--------------------
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
and SARs that are not exercised shall be assumed by, or replaced with comparable
options or rights by, the surviving corporation.

(c) Other Alternatives. Notwithstanding the foregoing, in the event
------------------
of a Reorganization, the Committee may take one or both of the following
actions: the Committee may (i) require that Grantees surrender their outstanding
Options and SARs in exchange for a payment by the Company, in cash or Company
Stock as determined by the Committee, in an amount equal to the amount by which
the then Fair Market Value of the shares of Company Stock subject to the
Grantee's unexercised Options and SARs exceeds the Exercise Price of the Options
or the base amount of the SARs, as applicable, or (ii) after giving Grantees an
opportunity to exercise their outstanding Options and SARs, terminate any or all
unexercised Options and SARs at such time as the Committee deems appropriate.
Such surrender or termination shall take place as of the date of the
Reorganization or such other date as the Committee may specify.

(d) Limitations. Notwithstanding anything in the Plan to the
-----------
contrary, in the event of a Reorganization, the Committee shall not have the
right to take any actions described in the Plan (including without limitation
actions described in Subsection (b) above) that would make the Reorganization
ineligible for pooling of interests accounting treatment or that would make the
Reorganization ineligible for desired tax treatment if, in the absence of such
right, the Reorganization would qualify for such treatment and the Company
intends to use such treatment with respect to the Reorganization.

13. Change of Control of the Company.
--------------------------------

(a) As used herein, a "Change of Control" shall be deemed to have
occurred if

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(i) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes a "beneficial owner" (as defined in Rule 13d-
3 under the Exchange Act), directly or indirectly, of securities of the Company
representing a majority of the voting power of the then outstanding securities
of the Company except where the acquisition is approved by the Board of
Directors; or

(ii) Any person has commenced a tender offer or exchange offer
for a majority of the voting power of the then outstanding shares of the
Company.

(b) Notice and Acceleration. Unless the Committee determines
-----------------------
otherwise, a Change of Control shall not result in the acceleration of vesting
of outstanding Options and SARs, the removal of restrictions and conditions on
outstanding Restricted Stock grant, or any accelerated payments in connection
with outstanding Performance Units.

(c) Other Alternatives. Notwithstanding the foregoing, in the event
------------------
of a Change of Control, the Committee may take one or both of the following
actions: the Committee may (i) require that Grantees surrender their outstanding
Options and SARs in exchange for a payment by the Company, in cash or Company
Stock as determined by the Committee, in an amount equal to the amount by which
the then Fair Market Value of the shares of Company Stock subject to the
Grantee's unexercised Options and SARs exceeds the Exercise Price of the Options
or the base amount of the SARs, as applicable, or (ii) after giving Grantees an
opportunity to exercise their outstanding Options and SARs, terminate any or all
unexercised Options and SARs at such time as the Committee deems appropriate.
Such surrender or termination shall take place as of the date of the Change of
Control or such other date as the Committee may specify.

(d) Limitations. Notwithstanding anything in the Plan to the
-----------
contrary, in the event of a Change of Control, the Committee shall not have the
right to take any actions described in the Plan (including without limitation
actions described in Subsection (c) above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.

14. Right of First Refusal
----------------------

Prior to a Public Offering, if at any time an individual desires to sell,
encumber, or otherwise dispose of shares of Company Stock distributed to him
under this Plan, the individual shall first offer the shares to the Company by
giving the Company written notice disclosing: (a) the name of the proposed
transferee of the Company Stock; (b) the certificate number and number of shares
of Company Stock proposed to be transferred or encumbered; (c) the proposed
price; (d) all other terms of the proposed transfer; and (e) a written copy of
the proposed offer. Within 30 days after receipt of such notice, the Company
shall have the option to purchase all or part of such Company Stock at the same
price and on the same terms as contained in such notice.

In the event the Company (or a stockholder, as described below) does not
exercise the option to purchase Company Stock, as provided above, the individual
shall have the right to sell, encumber or otherwise dispose of his shares of
Company Stock on the terms of the transfer set forth in the written notice to
the Company, provided such transfer is effected within 30 days after the
expiration of the option period. If the transfer is not affected within such
period, the Company must again be given an option to purchase, as provided
above.

The Board, in its sole discretion, may waive the Company's right of first
refusal pursuant to this Section 14 and the Company's repurchase right pursuant
to Section 15 below. If the Company's right of first refusal or repurchase right
is so waived, the Board may, in its sole discretion, pass through such right to
the remaining stockholders of the Company in the same proportion that each
stockholder's stock ownership bears to the stock ownership of all the
stockholders of the Company, as determined by the Board. To the extent that a
stockholder has been given such right and does not purchase his or her
allotment, the other stockholders shall have the right to purchase such
allotment on the same basis.

On and after a Public Offering, the Company shall have no further right to
purchase shares of Company Stock under this Section 14 and Section 15 below, and
its limitations shall be null and void.

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Notwithstanding the foregoing, the Committee may require that a Grantee
execute a stockholder's agreement, with such terms, as the Committee deems
appropriate, with respect to any Company Stock distributed pursuant to this
Plan. Such agreement may provide that the provisions of this Section 14 and
Section 15 below shall not apply to such Company Stock.

15. Purchases by the Company
------------------------

Prior to a Public Offering, if a Grantee ceases to be employed by the
Company, whether terminated for cause or voluntarily, the Company shall have the
right to purchase all or part of any Company Stock distributed to him under this
Plan at the exercise price paid by the Grantee (unless otherwise determined by
the Board or the Committee), and in all other cases at its then current Fair
Market Value (as defined in Section 5(b)); provided, however, that such
repurchase shall be made in accordance with applicable accounting rules to avoid
adverse accounting treatment.

16. Requirements for Issuance or Transfer of Shares
-----------------------------------------------

(a) Stockholder's Agreement. The Committee may require that a Grantee
-----------------------
execute a stockholder's agreement, with such terms, as the Committee deems
appropriate, with respect to any Company Stock distributed pursuant to this
Plan.

(b) Limitations on Issuance or Transfer of Shares. No Company Stock
---------------------------------------------
shall be issued or transferred in connection with any Grant hereunder unless and
until all legal requirements applicable to the issuance or transfer of such
Company Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Grantee
hereunder on such Grantee's undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop transfer orders and other restrictions as
may be required by applicable laws, regulations and interpretations, including
any requirement that a legend be placed thereon.

17. Amendment and Termination of the Plan
-------------------------------------

(a) Amendment. The Board may amend or terminate the Plan at any
---------
time.

(b) Termination of Plan. The Plan shall terminate on the day
-------------------
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the stockholders.

(c) Termination and Amendment of Outstanding Grants. A termination or
-----------------------------------------------
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents. The termination of
the Plan shall not impair the power and authority of the Committee with respect
to an outstanding Grant. Whether or not the Plan has terminated, an outstanding
Grant may be terminated or amended in accordance with the Plan or may be amended
by agreement of the Company and the Grantee consistent with the Plan.

(d) Governing Document. The Plan shall be the controlling document.
------------------
No other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.

18. Funding of the Plan
-------------------

This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of any Grants under this Plan. In no event shall interest be
paid or accrued on any Grant, including unpaid installments of Grants.

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19. Rights of Grantees
------------------

Nothing in this Plan shall entitle any Grantee or other person to any claim
or right to be granted a Grant under this Plan. Neither this Plan nor any action
taken hereunder shall be construed as giving any individual any rights to be
retained by or in the employ of the Company or any other employment rights.

20. No Fractional Shares
--------------------

No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Grant. The Committee shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.

21. Headings
--------

Section headings are for reference only. In the event of a conflict between a
title and the content of a Section, the content of the Section shall control.

22. Effective Date of the Plan
--------------------------

Subject to the approval of the Company's stockholders, the Plan shall be
effective on April 22, 1999.

23. Miscellaneous
-------------

(a) Grants in Connection with Corporate Transactions and
----------------------------------------------------
Otherwise. Nothing contained in this Plan shall be construed to (i) limit the
---------
right of the Committee to make Grants under this Plan in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association, including Grants to
employees thereof who become Employees of the Company, or for other proper
corporate purposes, or (ii) limit the right of the Company to grant stock
options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may make a Grant to an employee of another corporation
who becomes an Employee by reason of a corporate merger, consolidation,
acquisition of stock or property, reorganization or liquidation involving the
Company or any of its subsidiaries in substitution for a stock option or
restricted stock grant made by such corporation. The terms and conditions of the
substitute grants may vary from the terms and conditions required by the Plan
and from those of the substituted stock incentives. The Committee shall
prescribe the provisions of the substitute grants.

(b) Compliance with Law. The Plan, the exercise of Options and SARs
-------------------
and the obligations of the Company to issue or transfer shares of Company Stock
under Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. The Committee
may revoke any Grant if it is contrary to law or modify a Grant to bring it into
compliance with any valid and mandatory government regulation. The Committee may
also adopt rules regarding the withholding of taxes on payments to Grantees. The
Committee may, in its sole discretion, agree to limit its authority under this
Section.

(c) Governing Law. The validity, construction, interpretation and
-------------
effect of the Plan and Grant Instruments issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the State of
Delaware.

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[LOGO]EMERGE INTERACTIVE

10305 102/nd/ Terrace
Sebastian, Florida 32958

PROXY CARD

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

David C. Warren and Juris Pagrabs (together or individually referred to herein
as the "Proxies"), or either of them, are hereby authorized, with full power of
substitution, to represent and to vote the stock of the undersigned as specified
in this proxy card at the Annual Meeting of Stockholders of eMerge Interactive,
Inc., or at any adjournment, upon such business as may properly come before the
meeting, including the items set forth in the Proxy Statement. The Annual
Meeting of Stockholders of eMerge Interactive, Inc. will be held on Thursday,
May 23, 2002, at 10:00 a.m., Eastern Daylight Savings Time, at the Desmond Great
Valley Hotel and Conference Center, One Liberty Blvd., Malvern, PA, 19355.

ELECTION OF DIRECTORS
---------------------

Nominees: Thomas L. Tippens, David C. Warren, Douglas A. Alexander, John W.
Poduska, Sr., Ph.D., Christopher J. Davis, Robert E. Drury, John C. Foltz,
Robert S. Adams, Richard G. White.

FOR all nominees listed above: _____

WITHHOLD vote for all nominees listed above: _____

If withheld for only part of the slate, please list the nominee(s) that you are
NOT in favor of:

__________________________________________________________________________

AMENDMENT TO THE AMENDED AND RESTATED 1999 EQUITY COMPENSATION PLAN
-------------------------------------------------------------------

FOR the amendment to increase the shares
available in the 1999 Equity Compensation Plan: _____

AGAINST the amendment to increase the shares
available in the 1999 Equity Compensation Plan: _____

ABSTAIN from the amendment to increase the
shares available in the 1999 Equity Compensation Plan: _____

I plan to attend the meeting: _____

You are encouraged to specify your choices by marking the appropriate box. This
Proxy, when properly executed, is voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this Proxy will be voted for
all of the nominees and for the amendment to the 1999 Equity Compensation Plan.
The Proxies cannot vote your shares unless you sign and return the Card. The
Proxies are hereby authorized to vote upon such other business as may properly
come before the meeting.

Please sign name exactly as it appears on stock certificate. When shares held
by joint tenants, all should sign. When signing as attorney, executor,
administrator, trustee or guardian, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.

____________________________________ __________________________________
Printed Name Signature

_____________, 2002 __________________________________
Date Title

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This DEF 14A Filing	Date	First	Last	Other Filings

	4/22/99	7	38
	5/10/99	7
	11/16/99	24
	4/1/01	24
	6/1/01	6
	6/21/01	22
	6/30/01	22		10-Q
	7/2/01	22
	8/30/01	22
	9/15/01	6	22
	10/1/01	22
	11/30/01	6	22
	12/1/01	22
	12/27/01	22
	12/31/01	2	25	10-K
	3/30/02	24	25
	3/31/02	7	16	10-Q
	4/18/02	2	26
Filed On / Filed As Of	4/25/02
	5/1/02	19	21
For The Period Ended	5/23/02	2	39
	5/30/02	22
	12/19/02	5	26
	12/31/02	26		10-K, 5
	3/4/03	26
	3/31/03	24		10-Q
	4/21/09	10

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Emerge Interactive Inc · DEF 14A · For 5/23/02

Filed On 4/25/02 · SEC File 0-29037 · Accession Number 1021408-2-5697

Definitive Proxy Solicitation Material · Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Definitive Proxy Solicitation Material · Schedule 14A
Filing Table of Contents