Edgar Filing: RETRACTABLE TECHNOLOGIES INC

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

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[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
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[ ] Soliciting Material Under Rule 14a-12

Retractable Technologies, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

________________________________________________________________________________
(Name of Person[s] Filing Proxy Statement, if Other Than the Registrant)

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RETRACTABLE TECHNOLOGIES, INC.
511 Lobo Lane
Little Elm, Texas 75068-0009

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 20, 2002

To the Stockholders of Retractable Technologies, Inc.:

NOTICE IS HEREBY GIVEN THAT the 2002 Annual Meeting of Stockholders of
Retractable Technologies, Inc., a Texas corporation (the "Company" or "RTI"),
will be held at the Community Center of Little Elm, 107 Hardwicke Lane, Little
Elm, Texas 75068, on the 20th day of September, 2002, at 10:00 a.m., central
standard time (the "Annual Meeting") for the following purposes:

To elect three (3) Series II directors by the holders of the outstanding
Series II Class B Convertible Preferred Stock;

To elect five (5) Class 2 directors of the Company by the holders of the
outstanding Common Stock;

To increase the number of shares authorized for issuance under the
Company's 1999 Stock Option Plan to 4,000,000;

To authorize 5,000,000 shares of a Class C Convertible Preferred Stock;

To ratify the appointment of Cheshier & Fuller, L.L.P. as independent
accountants for the Company for the year ending December 31, 2002; and

To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.

The Company has fixed the close of business on July 23, 2002, as the record
date for determining stockholders entitled to notice of, and to vote at, the
Annual Meeting and any adjournments thereof. Stockholders who execute proxies
solicited by the Board of Directors of the Company retain the right to revoke
them at any time; unless so revoked, the shares of Common Stock and Series II
Class B Convertible Preferred Stock represented by such proxies will be voted at
the Annual Meeting in accordance with the directions given therein. If a
stockholder does not specify a choice on such stockholder's proxy for any
proposal therein, the proxy will be voted FOR such proposals as specified in the
Proxy Statement.

The list of stockholders of the Company may be examined at the offices of
the Company and its registered agent beginning on September 10, 2002, and at the
Annual Meeting. Further information regarding the Annual Meeting is set forth in
the attached Proxy Statement.

YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE, DATE, SIGN,
AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED POSTPAID ENVELOPE. THE
PROXY IS REVOCABLE AND WILL NOT BE USED IF YOU ARE PRESENT AT THE ANNUAL MEETING
AND PREFER TO VOTE YOUR SHARES IN PERSON.

By Order of the Board of Directors,

/s/ Thomas J. Shaw
------------------------------
THOMAS J. SHAW
CHAIRMAN, PRESIDENT, AND
CHIEF EXECUTIVE OFFICER

PROXY STATEMENT

The following information is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Retractable Technologies,
Inc., a Texas corporation (the "Company" or "RTI") which has its principal
executive offices at 511 Lobo Lane, Little Elm, Texas 75068-0009, to be voted at
the Annual Meeting of stockholders of the Company (the "Annual Meeting"), which
will be held at the Community Center of Little Elm, 107 Hardwicke Lane, Little
Elm, Texas 75068, on the 20th day of September, 2002, at 10:00 a.m., central
standard time, for the following purposes:

To elect three (3) Series II directors by the holders of the outstanding
Series II Class B Convertible Preferred Stock;

To elect five (5) Class 2 directors of the Company by the holders of the
outstanding Common Stock;

To increase the number of shares authorized for issuance under the
Company's 1999 Stock Option Plan to 4,000,000;

To authorize 5,000,000 shares of a Class C Convertible Preferred Stock;

To ratify the appointment of Cheshier & Fuller, L.L.P. as independent
accountants for the Company for the year ending December 31, 2002; and

To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.

You may revoke your proxy at any time before it is exercised by: (1)
sending a written statement revoking your proxy to the Secretary of the Company;
(2) submitting a properly signed proxy with a later date; or (3) voting in
person at the Annual Meeting. If you return your signed proxy to us before the
Annual Meeting, we will vote your shares as you direct. If you do not specify on
your proxy card how you want to vote your shares, we will vote them "FOR" such
proposals. If any other business is brought before the meeting, any unspecified
proxies will be voted in accordance with the judgment of the persons voting
those shares. The Company will pay the cost of soliciting proxies. In addition
to the use of the mails, proxies may be solicited by the directors, officers,
and employees of the Company without additional compensation, by personal
interview, telephone, telegram, or other means of electronic communication.
Arrangements also may be made with brokerage firms and other custodians,
dealers, banks, and trustees, or their nominees who hold the voting securities
of record, for sending proxy materials to beneficial owners. Upon request, the
Company will reimburse the brokers, custodians, dealers, banks, or their
nominees for their reasonable out-of-pocket expenses. The Company's Form 10-KSB
annual report for the year ended December 31, 2001, was previously mailed to all
Common Stockholders and Series II Stockholders. This form does not constitute a
part of the proxy soliciting material.

This proxy statement and the enclosed form of proxy were mailed to
stockholders on August 13, 2002.

OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS

Holders of Series II Stock

Holders of Series II Class B Convertible Preferred Stock ("Series II
Stock"), $1 par value, at the close of business on July 23, 2002, the record
date, are entitled to notice of and to vote on the election of three (3) Series
II directors at the Annual Meeting and any adjournments or postponements
thereof. Each share of Series II Stock entitles the holder to one (1) vote per
share. On July 23, 2002, there were 431,000 shares of Series II Stock issued and
outstanding, which constituted the only outstanding Series II Class B
Convertible Preferred voting securities. The presence, in person or by proxy, of
the holders of 50 percent of all the outstanding shares of Series II Stock as a

separate class, entitled to vote at the meeting, is necessary to constitute a
quorum at the Annual Meeting for voting by the Series II stockholders.

Holders of Common Stock

Holders of record of the Company's Common Stock, no par value, at the close
of business on July 23, 2002, the record date, are entitled to notice of and to
vote on the election of five (5) Class 2 directors; the increasing of the number
of shares authorized for issuance under the Company's 1999 Stock Option Plan to
4,000,000; the authorization of 5,000,000 shares of a Class C Convertible
Preferred Stock; and the ratification of the appointment of Cheshier & Fuller,
L.L.P. as the Company's independent accountants at the Annual Meeting and any
adjournments or postponements thereof. Each share of Common Stock entitles the
holder to one (1) vote per share. On July 23, 2002, there were 20,307,600 shares
of Common Stock issued and outstanding, which constituted the only outstanding
voting Common Stock. The presence, in person or by proxy, of the holders of 50
percent of all the outstanding shares of Common Stock as a separate class,
entitled to vote at the meeting, is necessary to constitute a quorum at the
Annual Meeting for voting by the Common Stockholders.

VOTING PROCEDURES

Election of Three (3) Series II Directors

A plurality of the shares of Series II Stock as a class, present in person
or represented by proxy and entitled to vote at the Annual Meeting, is required
for the election of the Series II directors. Accordingly and if a quorum is
present, the three (3) nominees for election as directors who receive the
greatest number of votes cast for election by the holders of record of Series II
Stock on July 23, 2002, as a class shall be duly elected directors upon
completion of the vote tabulation at the Annual Meeting.

Election of Five (5) Class 2 Directors; Increasing the Number of Shares
Authorized Under the Company's 1999 Stock Option Plan to 4,000,000; Authorizing
5,000,000 Shares of a Class C Convertible Preferred Stock; and Ratification of
the Appointment of Cheshier & Fuller, L.L.P.

A plurality of the shares of Common Stock, as a class, present in person or
represented by proxy and entitled to vote at the Annual Meeting, is required for
the election of the Class 2 directors. Accordingly and if a quorum is present,
the five (5) nominees for Class 2 director who receive the greatest number of
votes cast for election by the holders of record of Common Stock on July 23,
2002, as a class shall be duly elected Class 2 directors upon completion of the
vote tabulation at the Annual Meeting.

The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting is required for approval of the proposals to: 1) increase the
number of shares authorized for issuance under the Company's 1999 Stock Option
Plan to 4,000,000; 2) authorize 5,000,000 shares of a Class C Convertible
Preferred Stock; and 3) ratify the appointment of Cheshier & Fuller, L.L.P. as
the Company's independent accountants for the year ending December 31, 2002.

Abstentions and Broker Nonvotes

Abstentions will be considered present for purposes of calculating the vote
but will not be considered to have been voted in favor of the matter voted upon,
and broker nonvotes will not be considered present for purposes of calculating
the vote.

STOCKHOLDER LIST
----------------

A copy of the list of stockholders entitled to vote at the Annual Meeting
will be available for inspection by qualified stockholders for proper purposes
at the offices of the Company and its registered agent during normal business
hours beginning on September 10, 2002, and at the Annual Meeting.

PROPOSAL NO. 1
--------------

ELECTION OF THREE (3) SERIES II DIRECTORS

Pursuant to the Certificate of Designation, Preferences, Rights and
Limitations of the Series II Stock of RTI (the "Certificate of Designation"),
whenever dividends payable on the shares of Series II Stock shall be in arrears
for twelve (12) consecutive quarterly dividend periods, the holders of a
majority of the outstanding shares of Series II Stock have the exclusive right
(voting separately as a class) to elect one-third (1/3) of the Board of
Directors of the Company at the next Annual Meeting of stockholders and each
consecutive Annual Meeting of stockholders so long as such arrearage shall
continue, and the Common Stock voting separately as a class shall be entitled to
elect the remainder of the Board of Directors of the Company.

Pursuant to the Certificate of Designation, directors elected by the
holders of Series II Stock shall continue to serve as such directors for one (1)
year terms until such time as all dividends accumulated on the Series II Stock
shall have been paid in full. Whenever the special voting powers shall have
expired, the number of directors shall be such number as may be provided for in
the Articles or the Bylaws of the Company. As of the date of this Proxy
Statement, dividends payable on the shares of Series II Stock have been in
arrears for over twelve (12) consecutive quarterly dividend periods.

Accordingly, Series II Stockholders have the exclusive right (voting
separately as a class) to elect three (3) members of the Board of Directors.
Series II directors elected shall hold office until the 2003 Annual Meeting of
the shareholders when their respective successors are elected and qualified, or
upon their earlier retirement, resignation, or removal.

The following persons have been nominated by the Series II Stockholders and
have accepted nominations to serve as Series II directors:

Nominee Age Occupation
------- --- ----------
Kenneth W. Biermacher, Esq. 48 Attorney
Timothy G. Greene, Esq. 63 Attorney
John J. McDonald, Jr. 52 Chairman of the Board of
Wireless Web Connect!, Inc.

BACKGROUND OF SERIES II DIRECTOR NOMINEES
-----------------------------------------

Kenneth W. Biermacher, Esq. joined the Company as a Series II director in
February 2002. He has served as a shareholder, director, and Vice President of
Kane, Russell, Coleman & Logan, a Dallas based law firm, since February 1993.
Mr. Biermacher received a Bachelor of Science, summa cum laude, in 1976 from the
University of New Haven and a Juris Doctorate, with honors, in 1979 from Drake
University.

Timothy G. Greene, Esq. joined the Company as a Series II director in
February 2002. He has served as co-founder and principal of Stuart Mill Capital,
Inc., an investment company in McLean, Virginia, since 1997. Mr. Greene is
responsible for reviewing investment opportunities on a continuing basis
principally in the financial services sector. From 1999 to September 2001, Mr.
Greene served as Vice President and General Counsel for Sato Travel Holding Co.
Inc. in Virginia where, in addition to serving as a member of the executive
team, he supervised the Legal and Corporate Secretary, Administration, Human
Resources, and Internal Audit. Mr. Greene also served on their Board of
Directors. From 1990 to 1997, Mr. Greene served as Executive Vice President and
General Counsel to Sallie Mae-Student Loan Marketing Association. Mr. Greene
received his Bachelor of Science in Economics (cum laude) from the University of
Idaho in 1961 and his L.L.B. from George Washington University Law School in
1965. Mr. Greene was a Ford Foundation Fellow at Brown University Graduate
School from 1961 to 1962.

Web Connect! since March 1998. Since August 1997, he has served as Wireless Web
Connect!'s President and Chief Operating Officer. From February 1997 to August
1997, he served Wireless Web Connect! as the Senior Vice President, Sales and
Marketing. He was first elected to the Board of Directors of Wireless Web
Connect! in November of 1997. He was further elected to the Board of Directors
of ILD Telecommunications, an affiliate of Wireless Web Connect!, in April of
1998. He was responsible for managing Wireless Web Connect! through major change
and decline in its historical industry and restructuring its manufacturing
operations to reduce its financial exposure. Prior to working with Wireless Web
Connect!, Mr. McDonald served as the Senior Vice President of Intecom from June
1994 to February 1997 where he functioned as a Chief Operating Officer. Mr.
McDonald's education includes AMA Study and numerous industry management courses
as well as an electronics curriculum at Sylvania Technical School.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF
KENNETH W. BIERMACHER, TIMOTHY G. GREENE, AND JOHN J. MCDONALD, JR.

Should any nominee for which the Board is soliciting proxies become unable
or unwilling to accept nomination or election, the proxy holders may vote the
proxies for the election in his stead of any other person the Board of Directors
may recommend. Each of the nominees has indicated his willingness to serve the
full term, and management of the Company knows of no reason why any nominee
would be unable to serve.

PROPOSAL NO. 2
--------------

ELECTION OF FIVE (5) CLASS 2 DIRECTORS

Pursuant to authority granted by the Bylaws, the Board of Directors has
determined that the Board shall be comprised of nine (9) members. The nine (9)
regular members are divided into two (2) classes generally consisting of four
(4) members in Class 1 and five (5) members in Class 2. Class 1 and 2 directors
serve for two (2) year terms. The holders of Series II Stock are entitled to
elect three (3) directors at the Annual Meeting. Accordingly, five (5) Class 2
directors are to be elected by the Common Stockholders at the Annual Meeting to
hold office until the 2004 Annual Meeting of the shareholders when their
respective successors are elected and qualified, or upon their earlier
retirement, resignation, or removal.

The following table sets forth information concerning the Board's nominees
for the Class 2 director positions:

Nominee Age Current Position
------- --- ----------------
Thomas J. Shaw 52 Chairman, President, Chief Executive
Officer, and Class 2 Director

Steven R. Wisner 45 Executive Vice President, Engineering &
Production and Class 2 Director

Douglas W. Cowan 59 Chief Financial Officer, Treasurer, and
Class 2 Director

Clarence Zierhut 74 Class 2 Director

Marwan Saker 46 Class 2 Director

BACKGROUND OF CLASS 2 DIRECTOR NOMINEES
---------------------------------------

Thomas J. Shaw, the Founder of the Company, has served as Chairman of the
Board, President, and Chief Executive Officer since the Company's inception. Mr.
Shaw serves on the Executive Committee and the Compensation and Benefits
Committee. In addition to his duties overseeing the management of the Company,
he continues to lead our design team in product development of other medical
safety devices that utilize his unique

patented friction ring technology. Mr. Shaw has been a Director of the
Lawrence\McWhorter Foundation since 1999. Mr. Shaw has over 20 years of
experience in industrial product design and has developed several solutions to
complicated mechanical engineering challenges. He has been granted multiple
patents and has additional patents pending. Mr. Shaw received a Bachelor of
Science in Civil Engineering from the University of Arizona and a Master of
Science in Accounting from the University of North Texas.

Steven R. Wisner joined us in October 1999 as Executive Vice President,
Engineering and Production and a director. Mr. Wisner serves on the Executive
Committee. Mr. Wisner's responsibilities include the management of engineering,
production, regulatory affairs, quality assurance, and human resources. Mr.
Wisner has over 23 years of experience in product design and development. Before
joining us, Mr. Wisner was the Director of Operations for Flextronics
International in Richardson, Texas, an electronic manufacturing services
company, from May 1998 to October 1999, where he had complete responsibility for
taking product ideas from the concept stage through full design and into the
manufacturing process. Mr. Wisner worked as Design Services Manager at Altatron
Technologies, an electronic manufacturing service company, from August 1997 to
May 1998, and as Director of Engineering with Responsive Terminal Systems, a
medical reporting device manufacturing company, from 1984 to 1997. While working
at Texas Instruments, a leading electronics manufacturing company, from 1982 to
1984, Mr. Wisner was the team leader of a product development that successfully
integrated several thousand personal computers into the worldwide Texas
Instruments data network. As a project leader with Mostek Corporation, a
semiconductor manufacturing company, from 1980 to 1982, he oversaw the
development of automated manufacturing control systems for semiconductor
assembly. Mr. Wisner began his engineering career with Rockwell-Collins, an
avionics division of Rockwell International, in 1977, where he was involved in
the design of flight navigation equipment, including the first GPS (Global
Positioning System). Mr. Wisner holds a Bachelor of Science in Computer
Engineering from Iowa State University.

Douglas W. Cowan is our Chief Financial Officer, Treasurer, and a director.
Mr. Cowan serves on our Compensation and Benefits Committee. He is responsible
for the financial, accounting, and forecasting functions of the Company. Prior
to joining us in 1999, Mr. Cowan served as a consultant to other companies and
us from 1996 to 1999 on various accounting and other business matters. Before
becoming a consultant, he served as the Chief Financial Officer of Wedge-Dialog
Company, an oil field services company, from 1995 to 1996. In addition, Mr.
Cowan served in various capacities, including Vice President and Controller at
El Paso Natural Gas Company, an interstate pipeline company. After leaving El
Paso Natural Gas, Mr. Cowan formed a public accounting practice that provided
tax and accounting services, as well as litigation support. Mr. Cowan has served
as a Director for Cowan Technologies, Inc., a software development company,
since February 19, 1987. Mr. Cowan has no ownership interest in this company.
This company currently has no operations. Mr. Cowan has a Bachelor of Business
Administration from Texas Technological College. He is a CPA licensed in Texas.

Clarence Zierhut has served on our Board of Directors since April 1996. Mr.
Zierhut is the Chairman of our Audit Committee. Since 1955, Mr. Zierhut has
operated an industrial design firm, Zierhut Design now Origin Design, that
develops new products from concept through final prototypes. During his
professional career, Mr. Zierhut has created over 3,000 product designs for more
than 350 companies worldwide, in virtually every field of manufacturing, and has
won many international awards for design excellence. His clients have included
Johnson & Johnson, Abbott Laboratories, Gould, and McDonnell Douglas. He
received a Bachelor of Arts from Art Center College of Design in Los Angeles,
California.

Marwan Saker has served on our Board of Directors since June 2000. Mr.
Saker is a member of our Audit Committee. Since 1983, Mr. Saker has served as
Chief Executive Officer of Sovana, Inc., an export management company. As a
representative for United States companies seeking distribution, licensing, and
franchising in the Middle East, Europe, and North Africa, Mr. Saker was
instrumental in developing successful partnerships in more than 15 countries. He
offices in Dallas, Texas.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF
THOMAS J. SHAW, STEVEN R. WISNER, DOUGLAS W. COWAN, CLARENCE ZIERHUT, AND MARWAN
SAKER.

In the event the nominees should be unavailable to stand for election at
the time of the Annual Meeting, the proxies may be voted for substitute nominees
selected by the Board of Directors. The nominees are currently serving

as Class 2 directors of the Company, and, if they are elected, the nominees will
continue to serve until their terms expire upon the election and qualification
of their successors, or the earlier retirement, resignation, or their removal.
Should the nominees become unable or unwilling to accept nomination or election,
the proxy holders may vote the proxies for the election in their stead of any
other person the Board of Directors may recommend. The nominees have indicated
their willingness to serve the full term, and management of the Company knows of
no reason why they would be unable to serve.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------

The following table sets forth certain information regarding the beneficial
ownership of the capital stock as of the date of this Proxy Statement (excluding
exercisable options) for (a) each person known by us to own beneficially 5
percent or more of the voting securities, (b) each director and executive
officer (earning in excess of $100,000 annually) who owns capital stock, and (c)
each nominee for director who owns capital stock. Except pursuant to applicable
community property laws and except as otherwise indicated, each shareholder
identified in the table possesses sole voting and investment power with respect
to his or her shares.

Amount and
Name and Address of Nature of Percent of
Title of Class Beneficial Owner Beneficial Owner Class(1)
----------------------------------------------------------------------------------------------------
Common Stock
----------------------------------------------------------------------------------------------------

As a Group Officers and Directors
511 Lobo Lane, P.O. Box 9
Little Elm, TX 75068-0009 11,214,500 55.2%
As Individuals Thomas J. Shaw 11,200,000 55.2%
Michele M. Larios 10,000 Less than 1%
Steven R. Wisner 2,500 Less than 1%
G. Michael Gruber 2,000 Less than 1%

----------------------------------------------------------------------------------------------------
Series I-V Class B Stock
----------------------------------------------------------------------------------------------------
As a Group Officers and Directors
511 Lobo Lane, P.O. Box 9
Little Elm, TX 75068-0009 112,000 3.1%
As Individuals Thomas J. Shaw 50,000 1.4%
Marwan Saker/(2)/ 30,000 1.0%
G. Michael Gruber 2,000 Less than 1%
Kenneth W. Biermacher 20,000 1.0%
Timothy G. Greene 10,000 Less than 1%

(1) The percentages are based on 20,307,600 shares of Common Stock and
3,595,616 shares of Class B Convertible Preferred Stock outstanding as of
July 23, 2002, and are rounded.

(2) The 30,000 shares are beneficially held as follows: 14,500 shares by My
Investments and 15,500 shares by Saker Investments, which are companies
controlled by Mr. Saker.

There are no arrangements the operation of which would result in a change
in control of the Company.

MANAGEMENT
----------

The following table sets forth information concerning our directors,
nominees for directors, executive officers, and certain of our significant
employees as of the date of this Proxy Statement. Our Board of Directors
currently consists of a total of nine (9) members, all regular members of which
will serve for two-year terms. Due to dividend default voting rights held by
Series II Stockholders to elect three (3) members of the Board of Directors at
the 2002 Annual Meeting, the Board will consist of nine (9) members, three (3)
of which shall serve until the earlier

of the expiration of a one-year term or until the dividends owed to the Series
II Stockholders are paid in full, one of which will serve as a Class 1 director
for a two-year term ending 2003, and five (5) of which will serve as Class 2
directors serving two-year terms ending in 2004.

Term as
Name Age Position Director Expires
---- --- -------- ----------------

Executives and Directors
Thomas J. Shaw 52 Chairman, President, Chief Executive Officer,
and Class 2 Director 2002
Steven R. Wisner 45 Executive Vice President, Engineering & Production
and Class 2 Director 2002
Lawrence G. Salerno 42 Director of Operations N/A
James A. Hoover 54 Production Manager N/A
Russell B. Kuhlman 48 Vice President, New Markets and Class 1 Director 2003
Kathryn M. Duesman 39 Director of Clinical Services N/A
Douglas W. Cowan 59 Chief Financial Officer, Treasurer, and Class 2 Director 2002
Michele M. Larios 36 Director of Legal and Legislative Policy and Secretary N/A

Outside Directors
Kenneth W. Biermacher 48 Series II Director 2002
Timothy G. Greene 63 Series II Director 2002
G. Michael Gruber 46 Series II Director 2002
Clarence Zierhut 74 Class 2 Director 2002
Marwan Saker 46 Class 2 Director 2002

Class 2 Director Nominees
Incumbents
----------
Thomas J. Shaw See above
Steven R. Wisner See above
Douglas W. Cowan See above
Clarence Zierhut See above
Marwan Saker See above

Series II Director Nominees
Incumbents
----------
Kenneth W. Biermacher See above
Timothy G. Greene See above
Non-Incumbent
-------------
John J. McDonald, Jr. 52 Nominee N/A

Significant Employees
Phillip L. Zweig 55 Communications Director N/A
Judy Ni Zhu 43 Research and Development Manager N/A
Weldon G. Evans 60 Manager of Manufacturing Engineering N/A
Roni Diaz 31 Manager of Regulatory Affairs N/A
Timothy E. Poquette 47 Quality Assurance Manager N/A
--------------------------------------------------------------------------------------------------------------

Executives and Directors

Thomas J. Shaw, the founder of the Company, has served as Chairman of the
Board, President, and Chief Executive Officer since the Company's inception. Mr.
Shaw serves on our Executive Committee and our Compensation and Benefits
Committee. In addition to his duties overseeing the management of the Company,
he continues to lead our design team in product development of other medical
safety devices that utilize his unique patented friction ring technology. Mr.
Shaw has been a Director of the Lawrence\McWhorter Foundation since 1999. Mr.
Shaw has over 20 years of experience in industrial product design and has
developed several solutions to complicated mechanical engineering challenges. He
has been granted multiple patents and has additional patents pending. Mr. Shaw
received a Bachelor of Science in Civil Engineering from the University of
Arizona and a Master of Science in Accounting from the University of North
Texas.

Steven R. Wisner joined us in October 1999 as Executive Vice President,
Engineering and Production and a director. Mr. Wisner serves on our Executive
Committee. Mr. Wisner's responsibilities include the management of engineering,
production, regulatory affairs, quality assurance, and human resources. Mr.
Wisner has over 23 years of experience in product design and development. Before
joining us, Mr. Wisner was the Director of Operations for Flextronics
International in Richardson, Texas, an electronic manufacturing services
company, from May 1998 to

October 1999, where he had complete responsibility for taking product ideas from
the concept stage through full design and into the manufacturing process. Mr.
Wisner worked as Design Services Manager at Altatron Technologies, an electronic
manufacturing service company, from August 1997 to May 1998, and as Director of
Engineering with Responsive Terminal Systems, a medical reporting device
manufacturing company, from 1984 to 1997. While working at Texas Instruments, a
leading electronics manufacturing company, from 1982 to 1984, Mr. Wisner was the
team leader of a product development that successfully integrated several
thousand personal computers into the worldwide Texas Instruments data network.
As a project leader with Mostek Corporation, a semiconductor manufacturing
company, from 1980 to 1982, he oversaw the development of automated
manufacturing control systems for semiconductor assembly. Mr. Wisner began his
engineering career with Rockwell-Collins, an avionics division of Rockwell
International, in 1977, where he was involved in the design of flight navigation
equipment, including the first GPS (Global Positioning System). Mr. Wisner holds
a Bachelor of Science in Computer Engineering from Iowa State University.

Lawrence G. Salerno has served as Director of Operations for us since 1995
and is responsible for the manufacture of all VanishPoint(R) products, as well
as all product development and process development projects. Mr. Salerno is our
Management Representative, assuring that the Quality Systems are established and
implemented according to ISO 9001, MDD, and FDA mandated standards. In addition,
he supervised all aspects of the construction of our headquarters in Little Elm,
Texas. Prior to joining us, Mr. Salerno worked for Checkmate Engineering, an
engineering firm, from 1991 to 1995 and was responsible for engineering site
design and supervision of structural engineering products. Mr. Salerno is the
brother of Lillian E. Salerno, a former director and current consultant to RTI,
and a cousin of G. Michael Gruber, a Series II director.

James A. Hoover joined us in February 1996 and is our Production Manager.
He is responsible for supervision of the production of our products. Mr. Hoover
has also developed and implemented FDA required procedures and has been involved
in the FDA inspection process. Mr. Hoover joined us after working for Sherwood
for 26 years. During his tenure with Sherwood, a medical device manufacturing
company, he gained hands-on experience in all aspects of the medical device
manufacturing process. Mr. Hoover began his career with Sherwood as a materials
handler and worked his way up through a series of positions with added
responsibilities to his final position there as Production Manager of Off-Line
Molding, Operating Room/Critical Care. In this capacity, he managed several
departments, ran several product lines, and hired and supervised over 200
employees. While at Sherwood, he also gained experience with one of the
country's first safety syringes, the Monoject(R).

Russell B. Kuhlman joined us in February 1997 and is our Vice President,
New Markets and a director. Mr. Kuhlman is responsible for developing new
markets and product training for our sales organization, as well as
distribution. Mr. Kuhlman's efforts with us have resulted in bringing onboard
Specialty Distributors, influencing legislation, and educating influential
healthcare representatives about the benefits of the VanishPoint(R) product
line. Mr. Kuhlman is respected throughout the industry and is a main contributor
to the safety effort in this country. He has a sales background in the medical
service industry that includes his most recent work for Bio-Plexus, a medical
device manufacturing company, from 1994 to 1997, where he developed strategic
marketing plans for new safety products. Prior to his work there, Mr. Kuhlman
worked as Director of Sales and Marketing for Winfield Medical, Inc., a medical
device manufacturing company, from 1989 to 1994, where he launched several new
products, developed strategic sales territories, and was the trainer for Sales
and Regional Managers. Mr. Kuhlman also worked for B-D Vacutainer(R) Systems, a
medical products company, in the Houston Territory from 1980 to 1989, where he
was recognized as the National Sales Representative for the year 1987. Mr.
Kuhlman has served as the Vice President of Kuhlman & Kuhlman, Inc., a real
estate company, since the mid 1980's. Mr. Kuhlman has served as a Vice President
of Stefano's Chicago Style Pizza Inc. since 1980. Mr. Kuhlman holds a Bachelor
of Science in Finance from the University of Tennessee.

Kathryn M. Duesman, RN, joined us in 1996 as the Director of Clinical
Services and provides clinical expertise on existing VanishPoint(R) products as
well as those in development. She has assisted in the development of training
and marketing materials. Ms. Duesman has also contributed to the design of two
new products. Ms. Duesman is well recognized as one of the key authorities on
the prevention of needlestick injuries and has spoken and been published on this
issue. In 1996, Ms. Duesman served as a Registered Nurse ("RN") at Denton
Community Hospital. From 1995 to part of 1996, Ms. Duesman served as a RN at
Pilot Point Home Health, an agency for home healthcare. From 1992 to 1995, Ms.
Duesman served as a RN for Denton Community Hospital. Ms. Duesman is a 1985
graduate of Texas Woman's University with a Bachelor of Science in Nursing.

Michele M. Larios, Esq. joined us in February 1998 as an attorney and now
serves as the Director of Legal and Legislative Policy and as Secretary of the
Company. Ms. Larios is responsible for the legal and legislative functions of
the Company. In addition to working on legal matters and with outside counsel,
Ms. Larios works with legislators on pertinent issues and relevant legislation.
Prior to joining us, Ms. Larios served as the Legal Analyst for Applied Risk
Management Inc., a third party claims administration company, from 1995 through
1997. Ms. Larios received a Bachelor of Arts in Political Science from Saint
Mary's College in Moraga, California, and a Juris Doctorate from Pepperdine
University School of Law in Malibu, California.

Outside Directors

Kenneth W. Biermacher, Esq. joined the Company in February 2002 as a Series
II director. He has served as a shareholder, director, and Vice President of
Kane, Russell, Coleman & Logan, a Dallas based law firm, since February 1993.
Mr. Biermacher received a Bachelor of Science, summa cum laude in 1976 from the
University of New Haven and a Juris Doctorate, with honors, in 1979 from Drake
University.

Timothy G. Greene, Esq. joined the Company in February 2002 as a Series II
director. He has served as co-founder and principal of Stuart Mill Capital,
Inc., an investment company in McLean, Virginia, since 1997. Mr. Greene is
responsible for reviewing investment opportunities on a continuing basis
principally in the financial services sector. From 1999 to September 2001, Mr.
Greene served as Vice President and General Counsel for Sato Travel Holding Co.
Inc. in Virginia where, in addition to serving as a member of the executive
team, he supervised the Legal and Corporate Secretary, Administration, Human
Resources, and Internal Audit. Mr. Greene also served on their Board of
Directors. From 1990 to 1997, Mr. Greene served as Executive Vice President and
General Counsel to Sallie Mae-Student Loan Marketing Association. Mr. Greene
received his Bachelor of Science in Economics (cum laude) from the University of
Idaho in 1961 and his LLB from George Washington University Law School in 1965.
Mr. Greene was a Ford Foundation Fellow at Brown University Graduate School from
1961 to 1962.

G. Michael Gruber, Esq. joined the Company in February 2002 as a Series II
director. He serves as the President and Chief Operating Officer in the Business
Litigation Section of Godwin Gruber, P.C., a Dallas based law firm. Mr. Gruber
received his Bachelor of Science in 1978 from Southern Methodist University and
his Juris Doctorate in 1980 from Southern Methodist University. Mr. Gruber is
the cousin of Lillian E. Salerno, a consultant to RTI and a former director, and
a cousin to Lawrence G. Salerno.

Clarence Zierhut has served on our Board of Directors since April 1996. Mr.
Zierhut is Chairman of the Audit Committee. Since 1955, Mr. Zierhut has operated
an industrial design firm, Zierhut Design now Origin Design, that develops new
products from concept through final prototypes. During his professional career,
Mr. Zierhut has created over 3,000 product designs for more than 350 companies
worldwide, in virtually every field of manufacturing, and has won many
international awards for design excellence. His clients have included Johnson &
Johnson, Abbott Laboratories, Gould, and McDonnell Douglas. He received a
Bachelor of Arts from Art Center College of Design in Los Angeles, California.

company. As a representative for United States companies seeking distribution,
licensing, and franchising in the Middle East, Europe, and North Africa, Mr.
Saker was instrumental in developing successful partnerships in more than 15
countries. He offices in Dallas, Texas.

Class 2 Director Nominees

Incumbents

Thomas J. Shaw (See above)

Steven R. Wisner (See above)

Douglas W. Cowan (See above)

Clarence Zierhut (See above)

Marwan Saker (See above)

Series II Director Nominees

Incumbents

Kenneth W. Biermacher, Esq. (See above)

Timothy G. Greene, Esq. (See above)

Non-Incumbent

John J. McDonald, Jr., is currently serving as the Chairman of the Board,
President, Chief Executive Officer, and Chief Financial Officer for Wireless Web
Connect!, Inc., formerly Intellicall, Inc. ("Wireless Web Connect!"), a public
company, since August of 2001. He has served as the Chief Executive Officer for
Wireless Web Connect! since March 1998. Since August 1997, he has served as
Wireless Web Connect!'s President and Chief Operating Officer. From February
1997 to August 1997, he served Wireless Web Connect! as the Senior Vice
President, Sales and Marketing. He was first elected to the Board of Directors
of Wireless Web Connect! in November of 1997. He was further elected to the
Board of Directors of ILD Telecommunications, an affiliate of Wireless Web
Connect!, in April of 1998. He was responsible for managing Wireless Web
Connect! through major change and decline in its historical industry and
restructuring its manufacturing operations to reduce its financial exposure.
Prior to working with Wireless Web Connect!, Mr. McDonald served as the Senior
Vice President of Intecom from June 1994 to February 1997 where he functioned as
a Chief Operating Officer. Mr. McDonald's education includes AMA Study and
numerous industry management courses as well as an electronics curriculum at
Sylvania Technical School.

Significant Employees

Phillip L. Zweig joined us in December 1999 as Communications Director. Mr.
Zweig is a prize-winning financial journalist who has worked as a staff reporter
at The American Banker, The Wall Street Journal, Bloomberg Business News, and
other media organizations. From 1993 to 1998, he served as Corporate Finance
Editor at Business Week where he wrote a major article on the Company. Before
joining us, he worked as a freelance financial writer and editorial consultant.
His clients included Accenture and Boston Consulting Group. Mr. Zweig received a
Bachelor of Arts in Behavioral Psychology from Hamilton College and a Master of
Business Administration from the Baruch College Graduate School of Business.

Judy Ni Zhu joined us in 1995 and is our Research and Development Manager.
Her primary focus is on new product development and improvement of current
products. Prior to joining us, Ms. Zhu worked with Checkmate Engineering, an
engineering firm, as a design engineer on the original 3cc syringe and other
SBIR grant

projects. Ms. Zhu received her Bachelor of Science from Northwest Polytechnic
University in Xian, China, and her Master of Engineering from University of
Texas at Arlington. Ms. Zhu has assisted in design modifications for the 3cc
syringe, which have maximized both product reliability and production
efficiency. She also designed and developed a manual needle assembly machine and
an automatic lubricating and capping system for the 3cc syringe and developed
and assisted in the design of automated blood collection tube holder assembly
equipment. Ms. Zhu has collaborated with Ms. Duesman and Mr. Shaw in the filing
of several patent applications. Prior to joining Checkmate Engineering in 1991,
Ms. Zhu worked for Shenyang Airplane Corporation, an airplane design company, in
Shenyang, China, where she was responsible for airplane control system design
and its stress computation and analysis. Ms. Zhu also worked for Mactronix,
Inc., an assembly equipment manufacturing semiconductor company, in Dallas,
Texas, where she was responsible for the design, modification, and production
drawing of an automatic wafer transfer system.

Weldon G. Evans joined us in October 2000 as Manager of Manufacturing
Engineering. His responsibilities include the support of new product development
and current production, as well as the creation of new and improved
manufacturing processes. Prior to joining us, he served as a senior project
engineer with B-D, a medical technology company, since 1974. He received a
Bachelor of Science degree in Mechanical Engineering and a Master of Science
degree in Engineering Administration from Southern Methodist University. Mr.
Evans is a member of Pi Tau Sigma National Honorary Mechanical Engineering
Society and the American Society of Mechanical Engineering.

Roni Diaz joined us in March 2001 as Manager of Regulatory Affairs. Her
responsibilities include development and implementation of company regulatory
and quality policies, communication with FDA, European and other medical
regulatory authorities, implementation of ISO 9001 and other necessary quality
system certifications, obtaining CE mark approvals, generating and maintaining
technical files, routine regulatory reports, and regulatory licensures
applications and renewals. Prior to joining RTI, Ms. Diaz served as a
Regulatory/Clinical Project Manager for MedTrials, a medical device and
pharmaceutical consulting firm. From 1996 to 1999, she worked for Arthrocare, a
medical device manufacturer, as a regulatory/clinical affairs associate. She
received a Bachelor of Science degree in Health Sciences from San Jose State
University. Ms. Diaz is a member of the Regulatory Affairs Professional Society
and holds a Regulatory Affairs Certification.

Timothy E. Poquette joined us in May 2000 as a Quality Engineer. In this
capacity, his responsibilities included development and improvement of our
statistical sampling programs; failure investigations and risk assessment; and
test method validation. In July 2001, Mr. Poquette assumed the responsibilities
of Quality Assurance ("QA") Manager and is now responsible for the Quality
Engineering and QA Inspection functions. Mr. Poquette holds an AS in Chemical
Technologies from Hartford State Technical College (now Central Connecticut
Community College) and was certified as a Quality Engineer by the American
Society for Quality in 1986. His professional experience includes over 20 years
of employment in the specialty chemical and pharmaceutical industries. From
October 1993 to February 2000, he served as supervisor of the QA Chemistry and
Microbiology laboratories for the Oral Pharmaceuticals division of Colgate
Palmolive, a manufacturer of dental pharmaceutical products. He was responsible
for supervising analytical chemistry and microbiology testing activities.

Family Relationships

There are no family relationships among the above persons except as set
forth above.

Involvement in Certain Legal Proceedings

None of the above persons or any business in which such person was an
executive officer have been involved in a bankruptcy petition, been subject to a
criminal proceeding (excluding traffic violations and other minor offenses),
been subject to any order enjoining or suspending their involvement in any type
of business, or been found to have violated a securities law.

Directorships in Other Public Companies

John J. McDonald, Jr. is Chairman of the Board, President, Chief Executive
Officer, and Chief Financial Officer for Wireless Web Connect!, Inc., formerly
Intellicall, Inc. No other directors hold directorships in publicly reporting
companies.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------

We believe that all of the transactions set forth below were made on terms
no less favorable to us than could have been obtained from unaffiliated third
parties.

Thomas J. Shaw, our President and Chief Executive Officer who beneficially
owns 55.2 percent of the Common Stock, was paid a licensing fee of $500,000
(amortized over 17 years) by us for the exclusive worldwide licensing rights to
manufacture, market, sell, and distribute all the retractable medical safety
products. In addition, Mr. Shaw receives a 5 percent royalty on gross sales of
all licensed products sold to customers over the life of the Technology
Licensing Agreement. Mr. Shaw was paid a royalty of $359,548 and $429,078 for
2001 and 2000, respectively. Mr. Shaw and his wife waived royalties of $1
million due for sales in 2001 and $500,000 in royalties due for sales made
during the six months ended June 30, 2002. Mr. Shaw has received royalties of
$45,000 in 2002.

Lillian E. Salerno, a consultant for the Company and former director, d/b/a
Mill Street Enterprises ("Mill Street"), a sole proprietorship, leases offices
at 618, 620, 622, and 628 S. Mill Street in Lewisville, Texas, to us for our
marketing and sales department. The lease is for a five-year term commencing
July 1, 1997, and was extended through June 30, 2007, at an annual rental rate
of $34,800. Lease payments for $33,400 and $34,800 were paid in 2000 and 2001,
respectively. Lease payments of $17,400 were paid in 2002 through July 23, 2002.

Pursuant to a Consulting Agreement between the Company and MediTrade
International Corporation, a company owned by Ms. Salerno, a consultant for the
Company and former director, MediTrade International Corporation was advanced
$37,500 in September 2000 for setting up operations in Europe. We have recouped
all $37,500 of the advance. MediTrade International Corporation received
$183,226 and $304,812 in 2000 and 2001, respectively, in consulting fees and
expenses. MediTrade International Corporation has received $104,897 in 2002
through July 23, 2002.

A former director, Robert Stathopulos, was paid consulting fees by us of
$129,817 in 2000.

We paid $14,006 in 2000, $12,070 in 2001, and $1,800 in 2002 to family
members of our Chief Executive Officer for various consulting services.

In 2001, the Company paid Origin Design, a company controlled by the
daughter of Clarence Zierhut, a Class 2 director and nominee, $146,523 for
design services. We have paid no fees to Origin Design in 2002.

We entered into a Consulting Agreement on March 15, 2000, with
International Export and Consulting where International Export and Consulting
agreed to advise us with respect to selection of an international distribution
network, potential strategic partners, and future licensing for our technology
in the Middle East. In exchange, we agreed to pay a consulting fee in the amount
of $2,000 a month for ten months as well as issue nonqualified stock options for
61,000 shares of Common Stock at an exercise price of $10 per share. Marwan
Saker, a principal in International Export and Consulting, is a Class 2 director
of the Company. During the years ended December 31, 2001, and 2000, the Company
paid $2,000 and $18,000, respectively, under this agreement.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
-------------------------------------------------------

Section 16 of the Exchange Act requires our directors, executive officers,
and persons who initially owned more than 10 percent of a registered class of
our equity securities to file with the Commission initial reports of beneficial
ownership (Form 3) and reports of changes in beneficial ownership (Forms 4 and
5) of our Common Stock and our other equity securities. Officers, directors, and
10 percent shareholders are required by the Commission's regulations to furnish
us with copies of all Section 16(a) reports they file.

To our knowledge based solely on a review of Forms 3 and 4 provided to us,
all directors, officers, and holders of more than 10 percent of our equity
securities registered pursuant to Section 12 of the Securities Exchange Act
filed all reports required by Section 16(a) of the Exchange Act in the last
fiscal year as indicated below.

------------------------------------------------------------------------
NAME OF REPORTING
PERSON IN 2001 FORM FILED DATE FILED
------------------------------------------------------------------------
Lillian E. Salerno Form 4 November 30, 2001
------------------------------------------------------------------------

BOARD OF DIRECTORS; COMMITTEES
------------------------------

The Board of Directors has the responsibility for establishing corporate
policies and for the overall performance of the Company, although it is not
involved in day-to-day operations. The Board of Directors meets regularly
throughout the year to review significant developments affecting the Company and
to act upon matters requiring its approval. It also holds special meetings as
required from time to time when important matters arise requiring Board action
between scheduled meetings. During the last fiscal year, the Board of Directors
met 5 times. None of the incumbent directors attended fewer than 75 percent of
the aggregate meetings of the Board of Directors or Committees served thereon in
2001. The Board of Directors has established standing Executive, Audit, and
Compensation and Benefits Committees to devote attention to specific subjects
and to assist it in the discharge of its responsibilities. The Board of
Directors does not have a nominating committee. A description of the committees
and their functions, their current members, and the number of meetings held by
them during the last fiscal year are described below.

The Executive Committee possesses and may exercise all the powers and
authority of the Board of Directors in the control and management of the
business and affairs of the Company during intervals between regular meetings of
the Board of Directors. These powers are limited as follows: the committee
cannot fill any of its vacancies and the committee does not have the power to
declare dividends, amend Bylaws, elect or remove any officer or director, submit
to shareholders actions that require approval of shareholders, amend any
resolution of the Board of Directors, act on matters assigned to other
committees, create or fill any vacancies on the Board of Directors, authorize
distributions, or issue shares. The Executive Committee did not meet during the
last fiscal year. The Executive Committee currently consists of Thomas J. Shaw
and Steven R. Wisner.

The Audit Committee assists the Board of Directors in monitoring the
integrity of the financial statements, our compliance with securities
regulations, and the independence and performance of our auditors. The Audit
Committee met a total of five times in 2001. The Company has adopted an Audit
Committee charter, a copy of which was included with the 2001 proxy statement.
The existing members of the Audit Committee are independent as defined by
Section 121(A) of the AMEX's listing standards. The Audit Committee has reviewed
and discussed the audited financial statements with management. The Audit
Committee has discussed with PricewaterhouseCoopers L.L.P. the matters required
to be discussed by SAS 61, as may be modified or supplemented. The Audit
Committee has received the written disclosures and the letter from the
independent accountants required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committee, as may be modified or
supplemented, and has discussed with the independent accountants the independent
accountants' independence. Based on the reviews and discussions with the
Company's independent accountants at the time, PricewaterhouseCoopers LLP, the
Audit Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Form 10-KSB annual report for the year
ended December 31, 2001, for filing with the Commission. The Audit Committee
currently consists of Clarence Zierhut and Marwan Saker.

The Compensation and Benefits Committee recommends to the Board of
Directors the compensation of officers and the granting of stock options. The
Compensation and Benefits Committee did not meet during the last fiscal year.
Currently, the Compensation and Benefits Committee consists of Thomas J. Shaw
and Douglas W. Cowan.

EXECUTIVE COMPENSATION
----------------------

The following summary compensation table sets forth the total annual
compensation paid or accrued by us to or for the account of the Chief Executive
Officer and each other executive officer whose total cash compensation exceeded
$100,000 for any of the past three fiscal years:

SUMMARY COMPENSATION TABLE

Annual Compensation Long-Term Compensation
----------------------- ----------------------
Awards Payout(s)
-------------------------- -------------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Principal Compen- Award(s) Options/ Payouts Compen-
Position Year Salary($) Bonus($) sation($) ($) SARs(#) ($) sation($)
------------------- ---- --------- -------- --------- ---------- ------------ ------- ---------

Thomas J. Shaw, 1999 162,019 0 0 0 0 0 0
President and CEO 2000 198,084 0 0
2001 250,016 0 0

Lillian E. Salerno,* 1999 143,461 0 0 0 0 0 0
Former Executive 2000 60,946 0 0
Vice President, 2001 0 0 0
Sales & Marketing

Edward S. Aarons, 1999 108,598 0 0 0 25,000 0 0
Former Director 2000 0 0 0
of Sales 2001 0 0 0

Douglas W. Cowan, 1999 78,768 0 0 0 25,000 0 0
Chief Financial 2000 130,818 0 25,000
Officer and Treasurer 2001 142,501 5,000 0

Russell B Kuhlman, 1999 94,327 1,000 0 0 15,600 0 0
Vice President, New 2000 102,411 3,000 10,000
Markets 2001 105,019 0 0

Michele M. Larios, 1999 59,552 5,000 0 0 15,400 0 0
Director of Legal and 2000 88,225 0 25,000
Legislative Policy 2001 120,016 0 0
and Secretary

Steven R. Wisner, 1999 20,944 0 0 0 150,000 0 0
Executive Vice 2000 137,023 0 15,000
President, 2001 150,010 0 0
Engineering and
Production

* Ms. Salerno resigned as of May 2000 as an employee but continues to serve as a
consultant through her company, MediTrade International Corporation, and
received $183,226 and $304,812 in 2000 and 2001, respectively, in consulting
fees and expenses.

In 1998, Mr. Shaw should have received a raise under the terms of his
Employment Agreement. However, the 1998 portion of his raise in the amount of
$12,019 was paid in 1999. Officers, directors, former directors, and significant
employees hold options exercisable for the purchase of 51,500; 99,000; 243,450;
159,200; and 148,750 shares of Common Stock in the years 1999, 2000, 2001, 2002,
and 2003, respectively. To date, no options or long-term incentive plan awards
have been issued to Mr. Shaw or Ms. Salerno, the controlling Common
Stockholders. Former directors were granted options in 2000 as follows: Allen
Cheesman, 38,100; John H. Wilson, III, 5,000; F. John Deuschle, III, 5,000; Bob
Stathopulos, 5,000; and Joe Reeder, 25,000. Options granted to Messrs. Wilson
and

Deuschle terminated as a result of their departure from the Board of Directors.
The Board of Directors subsequently issued options for the purchase of 5,000
shares of Common Stock of the Company to each. Mr. Stathopulos' options
terminated as a result of his no longer providing services to the Company.

Options are generally exercisable beginning three years after the date of
grant.

Officers, directors, and significant employees hold stock options for the
purchase of Common Stock exercisable beginning in the year indicated below and
for three subsequent years:

1999 Plan Nonqualified Stock Options ("NQSOs") 2000 2001 2002 2003

Steven R. Wisner 65,000 65,000 5,000
Lawrence G. Salerno 5,150 2,000
James A. Hoover 3,150
Kathryn M. Duesman 5,300 5,000
Douglas W. Cowan 2,500 2,500 15,000
Clarence Zierhut 10,000
Michele M. Larios 7,700 15,000
Marwan Saker 5,000 30,500 30,500
Phillip L. Zweig 20,000 10,000
-------------------------------------
20,000 113,800 98,000 72,500
======================================

1999 Plan Incentive Stock Options ("ISOs") 2000 2001 2002 2003

Steven R. Wisner 10,000 10,000 10,000
Lawrence G. Salerno 2,500 7,650 10,000
James A. Hoover 2,500 5,650 8,000
Russell B. Kuhlman 7,800 7,800 10,000
Kathryn M. Duesman 2,500 7,800 10,000
Douglas W. Cowan 10,000 10,000 10,000
Judy Ni Zhu 3,350 3,350 7,000
Michele M. Larios 7,700 10,000
Timothy E. Poquette 1,250 1,250
--------------------------------------
0 38,650 61,200 76,250
======================================

1996 Plan NQSOs 1999 2000 2001 2002 2003

Steven R. Wisner 2,500
Lawrence G. Salerno 5,000 15,000
James A. Hoover 5,000 14,000
Russell B. Kuhlman 7,500 10,000
Kathryn M. Duesman 1,500 10,000
Clarence Zierhut 10,000 5,000 1,000
Judy Ni Zhu 5,000 10,000
----------------------------------------------
36,500 64,000 1,000 0 0
==============================================

1996 Plan ISOs 1999 2000 2001 2002 2003

Lawrence G. Salerno 7,500
James A. Hoover 7,500
Russell B. Kuhlman 7,500
Kathryn M. Duesman 7,500
Michele M. Larios 10,000
Judy Ni Zhu 5,000
----------------------------------------------
0 0 45,000 0 0
==============================================

Compensation of Directors

We pay each nonemployee director a meeting fee of $250 for each Board
meeting attended. Prior to 2001, the Company had granted to each director
(except Mr. Shaw and Ms. Lillian Salerno) stock options for Common Stock. We do
not pay any additional amounts for committee participation or special
assignment. We do reimburse directors for travel and related expenses. In 2001,
we paid $2,288 in travel and related expense reimbursement to directors.

Employment Agreement

There are no other employment agreements in place involving other officers
or directors, except as set forth below:

Thomas J. Shaw
--------------

We have a written employment agreement with Thomas J. Shaw, our President
and Chief Executive Officer, for an initial period of three years ending
September 2002 with an automatic and continuous renewal for consecutive two-year
periods. The agreement is terminable either by us or Thomas J. Shaw upon 30
days' written notice. The agreement provides for an annual salary of at least
$150,000 with an annual salary increase equal to no less than the percentage
increase in the Consumer Price Index during the previous calendar year. Thomas
J. Shaw's salary shall be reviewed by the Board of Directors each January, which
shall make such increases as it considers appropriate. Thomas J. Shaw is also
entitled to participate in all executive bonuses as the Board of Directors, in
its sole discretion, shall determine.

Under the employment agreement, we will also provide certain fringe
benefits, including, but not limited to, participation in pension plans,
profit-sharing plans, employee stock ownership plans, stock appreciation rights,
hospitalization and health insurance, disability and life insurance, paid
vacation, and sick leave. We also reimburse him for any reasonable and necessary
business expenses, including travel and entertainment expenses, necessary to
carry on his duties. Pursuant to the employment agreement, we have agreed to
indemnify Thomas J. Shaw for all legal expenses and liabilities incurred with
any proceeding involving him by reason of his being an officer or agent. We have
further agreed to pay reasonable attorney fees and expenses in the event that,
in Thomas J. Shaw's sole judgment, he needs to retain counsel or otherwise
expend his personal funds for his defense.

Thomas J. Shaw has agreed to a one-year noncompete, not to hire or attempt
to hire employees for one year, and to not make known our customers or accounts
or to call on or solicit our accounts or customers in the event of termination
of his employment for one year unless the termination is without cause or
pursuant to a change of control of the Company. Furthermore, Mr. Shaw has the
right to resign in the event that there is a change in control which is defined
as a change in the majority of directors within any 12 month period without
two-thirds approval of the shares outstanding and entitled to vote, or a merger
where less than 50 percent of the outstanding stock survives and a majority of
the Board of Directors remains, or the sale of substantially all of our assets,
or any other person acquires more than 50 percent of the voting capital. Mr.
Shaw retained the right to participate in other businesses as long as they do
not compete with us and so long as he devotes the necessary working time to the
company.

Consulting Agreement

MediTrade International Corporation
-----------------------------------

We have a consulting agreement with MediTrade International Corporation, a
company owned by Lillian E. Salerno, a former director of the Company. The
contract expired by its terms on May 31, 2001, but the agreement is continuing
on an oral, month-to-month basis, which is terminable at any time by either
party on thirty days' notice. MediTrade International Corporation continues to
establish contacts with major European entities to develop marketing and
distribution channels as well as licensing agents for RTI. MediTrade
International Corporation is paid $16,667 per month plus expenses as approved by
the Company so long as this oral contract continues.

PROPOSAL NO. 3
--------------

INCREASING THE NUMBER OF SHARES AUTHORIZED
FOR ISSUANCE UNDER THE COMPANY'S 1999 STOCK OPTION PLAN TO 4,000,000

The Board of Directors has determined that the best interests of the
Company would be served by amending the 1999 Stock Option Plan to increase the
number of shares of Common Stock that can be issued in options under the plan
from 2,000,000 to 4,000,000 in order to encourage stock ownership by key
employees, to provide an incentive for such employees to expand and improve the
profitability of the Company, and to attract and retain key personnel. The Board
of Directors believes that the current 1999 Stock Option Plan, in conjunction
with the Company's two previous stock option plans, does not provide sufficient
flexibility to allow for the Company's future growth. We are asking the
stockholders to approve the addition of 2,000,000 shares of Common Stock
authorized for issuance as options under our 1999 Stock Option Plan.

The Company is currently authorized to issue options for the purchase of up
to 2,000,000 shares of Common Stock and has previously issued and outstanding
options for the purchase of 1,164,250 shares of Common Stock to officers,
directors, key employees and others under its 1999 Stock Option Plan. The
Company has two stock option plans other than the 1999 Stock Option Plan. The
Company is authorized to issue options for the purchase of up to 800,000 shares
of Common Stock under its 1996 Incentive Stock Option Plan to officers and key
employees and options for the purchase of up to 200,000 shares of Common Stock
under the Company's 1996 Stock Option Plan for Directors and Other Individuals.
The Company has issued and outstanding options for the purchase of 393,080
shares of Common Stock under these two plans together. Accordingly, there are
currently only 1,442,670 shares of Common Stock available for issuance as
options under the Company's three existing stock option plans. Furthermore, the
Company can issue nonqualified options at the discretion of the Board of
Directors and without shareholder approval.

The material terms of the Company's existing 1999 Stock Option Plan are
summarized below. The following description is intended to be a summary of the
Plan's principal terms and is qualified in its entirety by reference to the
complete text.

SUMMARY OF THE 1999 STOCK OPTION PLAN
-------------------------------------

The Plan provides for the granting of Incentive Stock Options ("ISOs") and
Non-Qualified Stock Options ("NQSOs") as defined in the Plan and collectively
referred to as "Awards." The purpose of the Plan is to encourage stock ownership
by key employees, to provide an incentive for such employees to expand and
improve the profitability of the Company, and to attract and retain key
personnel.

General

The Plan authorizes the Compensation and Benefits Committee or, in the
absence of a committee, the Board of Directors to grant ISOs to key employees
and NQSOs to other employees, independent contractors, and nonemployee
Directors. Persons are issued options based on several factors which may include
service to the Company, salary level, and performance. Currently, approximately
150 persons are eligible for consideration for issuance of options under this
Plan. The Plan may be amended or discontinued by the Board of Directors or the
Compensation and Benefits Committee provided that the Board of Directors may
not, without the approval of the stockholders: (a) except as expressly provided
in the Plan, increase the total number of shares reserved for the purposes of
the Plan, (b) decrease the option price of an ISO to less than the amounts
provided for in the Plan, and (c) extend the duration of the Plan. No amendment,
alteration, or discontinuation may impair the rights of an optionee without his
consent. The Company does not intend to register these options. The options are
issued pursuant to Rule 701 of Regulation E of the Securities Act of 1933, as
amended.

As of July 23, 2002, we have granted ISOs to purchase 833,475 shares of
Common Stock and NQSOs to purchase 271,550 shares to employees under the 1999
Stock Option Plan. Executive officers own options for the purchase of 281,000
shares of Common Stock under the Plan. Nonemployee directors own options for the
purchase of 76,000 shares of Common Stock under the Plan. Steve Wisner, the
Executive Vice President, Engineering &

Production, is the only person to own more than 5 percent of the
outstanding stock options. He owns 10.6 percent of the outstanding options or
options for the purchase of 167,500 shares. All remaining employees hold options
under this Plan for the purchase of 817,550 shares of Common Stock. ISOs to
purchase 282,175 shares and employee NQSOs to purchase 5,300 shares were
cancelled under the terms of the Plan. Employee NQSOs to purchase 157,250 shares
were exercisable as of the date of this Proxy Statement. ISOs for the purchase
of 280,125 shares of Common Stock were exercisable as of the date of this Proxy
Statement. The exercise price for the ISOs is $10. The NQSOs have exercise
prices from $1 to $10. We granted NQSOs to purchase 361,700 shares to
nonemployees, 15,000 of which have been cancelled and 298,698 are exercisable as
of July 23, 2002. As of the record date, the market value of the Common Stock
underlying the outstanding options is $6,696,519.

A summary of the exercisable options under the 1999 Stock Option Plan is
shown below:

All options including officers and significant employees

1999 2000 2001 2002 2003
---- ---- ---- ---- ----

All option holders
ISOs - - 130,750 164,425 256,125
Employee NQSOs 26,000 27,500 101,250 67,500 44,000
Nonemployee Directors NQSOs - - 45,000 30,500 30,500
Nonemployee NQSOs - 10,000 148,200 64,998 17,502
-------------------------------------------------------
Total 26,000 37,500 425,200 327,423 348,127
-------------------------------------------------------

Officers and significant employees
ISOs - - 38,650 61,200 76,250
Nonemployee Directors NQSOs - - 45,000 30,500 30,500
Employee NQSOs - 20,000 31,300 - 22,000
-------------------------------------------------------
Total - 20,000 114,950 91,700 128,750
-------------------------------------------------------

The following is a summary of options exercisable by nominees for
directorships:

Nominee 1999 2000 2001 2002 2003
---- ---- ---- ---- ----

Steve Wisner 2,500 0 75,000 75,000 15,000
Douglas W. Cowan 0 0 12,500 12,500 25,000
Clarence Zierhut 10,000 5,000 10,000 0 0
Marwan Saker 5,000 30,500 30,500
Russell Kuhlman 7,500 10,000 15,300 7,800 10,000
Total 20,000 15,000 117,800 125,800 80,500

A maximum of 2,000,000 shares of Common Stock are currently reserved and
available for distribution pursuant to Awards granted under the Plan, subject to
adjustment to reflect a subdivision or consolidation of shares or any other
capital adjustment, payment of a stock dividend, or other increase or decrease
in such shares effected without consideration. Shares may be distributed under
the Plan, in whole or in part, from authorized and unissued shares or treasury
shares. The Compensation and Benefits Committee shall be responsible to the
Board of Directors for the operation of the Plan and shall make recommendations
to the Board of Directors with respect to participation in the Plan and with
respect to the terms, limitations, restrictions, conditions, and extent of that
participation. The interpretation and construction of a provision of the Plan by
the Compensation and Benefits Committee shall be final unless otherwise
determined by the Board of Directors. The Board of Directors, upon
recommendation by the Compensation and Benefits Committee or upon its own
action, may grant stock options. Options may not be exercised by tendering
outstanding shares except as permitted by the Compensation and Benefits
Committee, in its sole discretion.

Awards

Options granted under the Plan may be ISOs, as defined under and subject to
Section 422 of the Internal Revenue Code (the "Code"), or NQSOs.

The options will be exercisable at such times and subject to such terms and
conditions as the Board of Directors or the Compensation and Benefits Committee
may determine. All options must expire no later than ten years from the date of
grant in the case of ISOs held by a non-10 percent shareholder, no later than
five years from the date of grant in the case of a 10 percent shareholder, and
as determined by the Board of Directors/Compensation and Benefits Committee at
the date of grant in the case of NQSOs.

Generally, ISOs will terminate three months after termination of the
optionee's employment without cause and automatically upon termination for
cause, or one year following the termination of employment due to death or
permanent disability; provided, however, that options will expire prior to said
times if and at such time that the original option exercise term otherwise
expires. Generally, options may be exercised only to the extent exercisable on
the date of termination, death, or disability. Generally, NQSOs will terminate
automatically upon termination of the optionee's employment for cause and one
year following termination of employment due to death. Nonvested NQSOs are
forfeited upon termination of employment with or without cause, permanent
disability, or death; provided, however, that options will expire prior to said
times if and at such time that the original option exercise term otherwise
expires.

The option price for any ISO will not be less than 100 percent of the fair
market value of the Common Stock as of the date of grant. In the event the
optionee is a 10 percent shareholder, the price of the ISO shall be 110 percent
of the fair market value of the Common Stock as of the date of grant. In the
event the optionee is not a 10 percent shareholder, the price of the ISO shall
be 100 percent of the fair market value of the Common Stock as of the date of
grant. The Board of Directors set $10 as the exercise price of the Company's
ISOs granted prior to December 22, 2000. The option price for an NQSO will be
determined by the Board of Directors or Compensation and Benefits Committee on
the date of grant. An employee who is the holder of an NQSO must, prior to
issuance of a stock certificate, remit to us the amount, if any, of any taxes
required to be withheld upon exercise of the NQSO.

The ISOs are not transferable except by will or the laws of descent and
distribution. NQSOs may not be transferred for a period of one year from the
date of grant to a nonaffiliate and may not be transferred for a period of two
years from the date of grant to affiliates.

Miscellaneous

Under the Plan, the Board of Directors and Compensation and Benefits
Committee has wide discretion and flexibility, enabling it to administer the
Plan in the manner it determines to be in the best interest of the Company.
Thus, Awards may be granted in various combinations and sequences and may be
subject to various conditions, restrictions, and limitations at grant or upon
exercise or payment not inconsistent with the terms of the Plan. The Board of
Directors' and Compensation and Benefits Committee's determinations with respect
to which employees will receive Awards, and the form, amount and frequency, and
the terms and conditions thereof, need not be uniform as to similarly situated
persons. The designation of an employee to receive one form of an Award under
the Plan does not require the Board of Directors or Compensation and Benefits
Committee to designate or entitle such employee to receive any other form of
Award.

The Plan limits the number of ISOs that can be issued to key employees.
Other than limiting Awards to key employees, there are no restrictions on the
number of Officers or other employees eligible to receive Awards or the Awards
that may be granted to one person. In addition, the Plan does not limit the
aggregate number of Awards that may be granted except that the number of shares
reserved for distribution under the Plan without an amendment cannot exceed
2,000,000 shares.

Federal Income Tax Consequences of Options

The following is a brief summary of our understanding of the principal
anticipated federal income tax consequences of Awards made under the Plan based
upon the applicable provisions of the Code in effect on the date

hereof. This summary is not intended to be exhaustive and does not describe
foreign, state, or local tax consequences.

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

An optionee will not realize taxable income at the time an ISO is granted
or exercised. Common Stock is issued to an optionee pursuant to the exercise of
an ISO, and if no disqualifying disposition of the shares is made by the
optionee within two years of the date of grant or within one year after exercise
of the option, then (a) any gain upon the subsequent sale of the shares will be
taxed to the optionee as a capital gain, and any loss sustained will be a
capital loss, and (b) no deduction will be allowed to us for federal income tax
purposes. The spread between the ISO price and the fair market value of the
shares at the time of exercise is a preference item for purposes of the
alternative minimum tax.

If an optionee disposes of shares acquired upon the exercise of an ISO
before the expiration of the holding periods described above, then generally (a)
the optionee will be taxed as if he had received compensation income in the year
of disposition in an amount equal to the excess, if any, of the fair market
value of the shares on the exercise date (or, if less, the amount realized on
value of the shares on the disposition of the shares) over the option price paid
for such shares, and (b) we will generally be entitled to a corresponding
deduction in that year. Any further gain or loss realized by the participant
will be taxed as short-term or long-term capital gain or loss, as the case may
be, and will not result in any deduction by us.

Exercise of an ISO may cause the optionee to incur alternative minimum tax
liability even if he has no taxable income from the exercise under general
income tax principles.

Stock acquired through exercise of an ISO must be held for more than 12
months to obtain long-term capital gains treatment.

All stock acquired pursuant to the exercise of an ISO is subject to the
holding period rules and disqualifying disposition rules described above.
Pursuant to the Plan, an ISO can only be exercised by payment of the
consideration in cash.

To the extent that the fair market value of the Common Stock (determined as
of the date of grant) subject to ISOs exercisable for the first time by an
optionee during any calendar year exceeds $100,000, those options will not be
considered ISOs.

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

An optionee will generally not recognize taxable income at the time an NQSO
is granted, but taxable income will be realized, and we will generally be
entitled to a deduction, at the time of exercise of the NQSO. The amount of
income and our deduction will be equal to the difference between the fair market
value of the shares on the date of exercise and the NQSO exercise price. The
income realized will be taxed to the optionee at the ordinary income tax rates
for federal income tax purposes. Withholding is required upon exercise of an
NQSO held by an employee. On subsequent disposition of the shares acquired upon
exercise of an NQSO, capital gain or loss as determined under the normal capital
asset holding period rules will be realized in the amount of the difference
between the proceeds of sale and the fair market value of the shares on the date
of exercise.

Withholding Generally
---------------------

Under the Plans, an employee-participant must pay to us, no later than the
date on which an amount first becomes includable in the participant's gross
income for federal income tax purposes with respect to an Award, any taxes
required to be withheld with respect to such amount. Such withholding may
generally not be settled with shares that constitute part of the Award giving
rise to the withholding obligation unless the Compensation and Benefits
Committee grants special permission. Otherwise, withholding must be made in a
manner that provides cash to us. The amount of income recognized is not reduced
by the retention by us of shares issuable under an Award to satisfy withholding
obligations; the transaction is taxed as if the shares were sold.

SUMMARY OF ALL EXISTING STOCK OPTION PLANS
------------------------------------------

The following is a summary of the number of shares of Common Stock to be
issued upon the exercise of outstanding options, the average exercise price of
the options, and the number of shares of Common Stock reserved for issuance
under the Company's three Stock Options Plans:

Equity Compensation Plan Information
----------------------------------------------------------------------------------------------------------------------
Number of securities
remaining available for
future issuance under
Number of securities to be Weighted-average exercise equity compensation plans
issued upon exercise of price of outstanding (excluding securities
outstanding options, options, warrants, and reflected in column (a))
warrants, and rights rights

Plan category (a) (b) (c)
----------------------------------------------------------------------------------------------------------------------

Equity compensation plans
approved by security
holders 1,557,330 $8.91 1,442,670
----------------------------------------------------------------------------------------------------------------------
Equity compensation plans
not approved by security
holders 0 0 0
----------------------------------------------------------------------------------------------------------------------
TOTAL 1,557,330 $8.91 1,442,670
----------------------------------------------------------------------------------------------------------------------

Outstanding Shares and Shares Already Reserved for Issuance

As of the record date, the Company had 20,307,600 shares of Common Stock;
1,061,500 shares of Class A Convertible Preferred Stock; and 3,595,616 shares of
Class B Convertible Preferred Stock outstanding. If the Common Stockholders
approve Proposal No. 4, the Company shall be authorized to issue an additional
5,000,000 shares of Class C Convertible Preferred Stock. All Preferred Stock of
the Company is convertible on a one-for-one basis into the Company's Common
Stock. In addition, the Company is obligated to issue 535,714 shares of Common
Stock if given notice of conversion of outstanding, convertible debt. As set
forth above, the Company is obligated to issue 1,557,330 shares of Common Stock
upon the exercise of existing options and currently has the authorization to
issue options for the purchase of 1,442,670 additional shares of Common Stock
under the three existing stock option plans. Finally, the Company can issue
nonqualified options existing at the discretion of the Board of Directors and
without shareholder approval.

Why We Approved the Amendment

The Company's 1999 Stock Option Plan is intended to promote the best
interests of the Company and our shareholders by providing all eligible
employees, including officers, with the opportunity to become shareholders by
purchasing Common Stock at discounted prices. The Company believes that the 1999
Stock Option Plan encourages employees to remain in the Company's employ, and
aligns the employees' collective interests with those of our stockholders. Our
continued success depends upon our ability to attract and retain talented
employees. Equity incentives are necessary for us to remain competitive in the
marketplace for qualified personnel, and an employee stock purchase plan is a
key element of our equity incentive package.

Because we believe that the 1999 Stock Option Plan is an indispensable
equity incentive made available to our employees that allows us to remain a
competitive employer and the number of shares authorized for issuance under this
Plan is dwindling, we believe it is in the best interests of the Company and the
shareholders to ensure that our 1999 Stock Option Plan continues uninterrupted
by the increasing of the number of shares of Common Stock underlying the plan
from 2,000,000 to 4,000,000.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE INCREASING OF THE
NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER THE COMPANY'S 1999 STOCK OPTION
PLAN TO 4,000,000.

PROPOSAL NO. 4

AUTHORIZING 5,000,000 SHARES OF A CLASS C CONVERTIBLE PREFERRED STOCK

The Board of Directors has determined that the best interests of the
Company would be served by the amendment of our Articles to authorize 5,000,000
shares of Class C Convertible Preferred Stock ("Class C Stock"). We are asking
the stockholders to approve the creation of a Class C Stock to consist of
5,000,000 shares, which can be set in series by the Board of Directors, at their
discretion, with each subsequent series having rights subordinate to the earlier
series. The proposed Class C Stock will have rights superior to the Common Stock
but will be subordinate to all existing Class A and Class B Preferred Stock
outstanding. The specific terms of the Class C Stock cannot be stated because no
offering is contemplated in the immediate future. The terms of the Class C
Stock, including dividend rates, conversion prices, voting rights, redemption
prices, and similar matters (within the ranges set forth below), will be
determined by the Board without further shareholder approval assuming this
proposal is approved.

If the shareholders approve the proposal, Sections 4.01 and 4.02 of Article
IV of the Articles would be amended to read substantially as follows and a
Section 4.10 substantially in the form below will be added as follows:

"4.01 The aggregate number of shares which the Corporation shall have the
authority to issue is 100,000,000 shares of Common Stock, no par value;
5,000,000 shares of Preferred Stock Class A with a par value of One Dollar
($1.00) per share; 5,000,000 shares of Preferred Stock Class B with a par
value of One Dollar ($1.00) per share; and 5,000,000 shares of Preferred
Stock Class C with a par value of One Dollar ($1.00) per share.

4.02 The Corporation is authorized to issue four classes of stock, one
designated as Common Stock, no par value; one designated as Preferred Stock
Class A, par value One Dollar ($1.00) per share; one designated as
Preferred Stock Class B, par value One Dollar ($1.00) per share; and one
designated as Preferred Stock Class C, par value One Dollar ($1.00) per
share, each as described in this Article IV above. Provided, however, that
none of the shares of Preferred Stock of any class shall carry any voting
rights for the election of Directors or for any other matters, except where
specifically designated or required by the applicable provisions of the
Texas Business Corporation Act."

"4.10 The relative rights and preferences of the shares of the Class C
Convertible Preferred Stock are set forth in the Certificate of
Designation, Preferences, Rights and Limitations of Class C Convertible
Preferred Stock of the Corporation which certificate is attached hereto and
incorporated herein for all purposes as Exhibit G."

If approved by the stockholders, the proposed amendment will become effective
upon the filing of a certificate of amendment to our Articles, which will occur
as soon as reasonably practicable. If the shareholders do not approve the
proposed amendment, the authorized number of shares of Preferred Stock shall not
change.

DESCRIPTION OF THE RIGHTS OF THE PROPOSED CLASS C CONVERTIBLE PREFERRED STOCK
-----------------------------------------------------------------------------

The Board of Directors is seeking the authority of the shareholders to
establish a Class C Stock with terms to be decided in the discretion of
management in response to market conditions. The authorized Preferred Stock will
be available for issuance at such times, upon such terms, and for such corporate
purposes as the Board of Directors may consider advisable, without further
action by the stockholders, except as may be required by applicable law or by
the rules of any stock exchange on which the Common Stock may be listed. The
Board is proposing the authorization of a Class C Stock which will have rights
to be established by the Board of Directors in their discretion but within the
ranges set forth below:

Conversion Rights: The holder of any share of Class C Stock shall have
the right, at such holder's option, to convert each
such share into one share of fully paid and
nonassessable shares of Common Stock anywhere from 0
to 3 years after issuance to be determined by the
Board of Directors.

Voting Rights: Unless required by the Texas Business
Corporation Act, the Class C Stock shall have no
voting rights.

Dividend Rights: The holders of the Class C Stock shall be
entitled to receive, in any calendar year, if,
when, and as declared by the Board of Directors,
dividends at the per annum rate not to exceed
the prime rate plus 12 percent, all such
dividends due quarterly in arrears as of the
last day of each March, June, September, and
December of each year, the first dividend being
declarable on December 31st of the year the
first share of the Class C Stock is issued.

Liquidation Preference: In the event of any dissolution, liquidation, or
winding up of the Company, before any
distribution of assets shall be made to the
holders of the Common Stock or the holders of
any other stock that ranks junior to the Class C
Stock, the holder of each share of Class C Stock
then outstanding shall be entitled to up to but
no more than 110 percent of the purchase price
of the Class C Stock per share plus all
dividends (whether or not declared or due)
accrued and unpaid on such share on the date
fixed for the distribution of assets of the
Company to the holders of Class C Stock.

Registration Rights: The Company, for a period ending six months
after the last share of Class C Stock is
redeemed, retired, converted, or otherwise no
longer outstanding, will give written notice to
the holder of Class C Stock not less than 20
days in advance of the initial filing of any
registration statement under the Securities Act
of 1933, as amended, covering any securities of
the Company, and will afford the holder the
opportunity to have included in such
registration all or such part of the shares of
Common Stock acquired upon conversion of Class C
Stock.

The Company shall be entitled to exclude the
shares of Common Stock held by the holder from
any one, but not more than one, such
registration if the Company in its sole
discretion decides that the inclusion of such
shares will materially interfere with the
orderly sale and distribution of the securities
being offered under such registration statement
by the Company.

Redemption Rights: The Class C Stock shall be redeemable no sooner
than prior to the lapse of one (1) year from the
date of issuance.

On and after such date, the Class C Stock may be
redeemed at the option of the Company, as a
whole at any time or in part from time to time,
at the Redemption Price of no more than 110
percent of the purchase price of the Class C
Stock plus all dividends (whether or not
declared or due) accrued and unpaid to the date
of redemption.

Preemption Rights: Class C holders shall not have preemption rights
but will have the right (for a 45 day period
following sale by the Company of Common Stock
equivalents) in the event the Company sells or
issues any securities which can be converted
into Common Stock at a per share consideration
less than the purchase price of the Class C
Stock, to purchase from the Company in cash (for
the per share price at which a share of Common
Stock is acquirable upon exercise or conversion
of Common Stock Equivalents) that additional
number of shares of

Common Stock which, when added to the number of shares
of Common Stock acquirable by the Holder upon
conversion of any shares of Class C Stock outstanding
and held by such Holder immediately before such issue
will equal a percentage of the number of shares of
Common Stock deemed outstanding immediately after such
sale or issuance that is the same as the percentage of
the number of shares of Common Stock deemed outstanding
immediately before such issuance or sale represented by
the acquirable shares.

Increasing Preferred Stock May Delay a Change in Control of the Company

Provisions in our Articles allow us to issue 10,000,000 shares of Preferred
Stock and, if this proposal is approved, an additional 5,000,000 shares of
Preferred Stock without any vote or further action by the stockholders. This may
have the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of the Company.
Such provisions could limit the price that certain investors might be willing to
pay in the future for shares of our Common Stock. These provisions may make it
more difficult for stockholders to take certain corporate actions and could have
the effect of delaying or preventing a change in control of the Company.

Dilution Risk

As of the record date, the Company had 20,307,600 shares of Common Stock;
1,061,500 shares of Class A Convertible Preferred Stock; and 3,595,616 shares of
Class B Convertible Preferred Stock outstanding. All Preferred Stock of the
Company is convertible on a one-for-one basis into the Company's Common Stock.
In addition, the Company is obligated to issue 1,557,330 shares of Common Stock
upon the issuance of options and 535,714 shares of Common Stock if given notice
of conversion of outstanding, convertible debt. The Company has the authority to
issue additional options for the purchase of up to 1,442,670 shares of Common
Stock and, if Proposal No. 3 is approved, will have the right to issue options
for an additional 2,000,000 shares of Common Stock. Finally, the Company can
issue nonqualified options at the discretion of the Board of Directors and
without shareholder approval.

By voting in favor of this proposal, you are voting to increase our
authorized capital stock by an additional 5,000,000 shares or 4.5 percent. The
Company intends to offer shares of Class C Stock for sale in the event we
require additional capital. Depending on the price for which the Class C Stock
will eventually be sold, the issuance of such shares may have a dilutive effect
on earnings per share and, for persons who do not purchase additional shares to
maintain their pro rata interest in the Company, on such shareholder's
percentage voting power in the event you convert your shares of Preferred Stock.

Why We Adopted The Amendment

The principal purpose of the proposed amendment is to help ensure that we
will have sufficient shares of Preferred Stock to raise additional capital. The
Company intends to offer shares of Class C Stock for sale in the event we
require additional capital. In the past, the Company has raised capital to
furnish its growth primarily through the sale and issuance of series of
Convertible Preferred Stock. Due to the fact that a significant percentage of
the existing Class A and Class B Stock has been issued, the number of authorized
shares of Preferred Stock available for issuance by the Company necessitates an
increase in the number of shares of Preferred Stock. We have no other
arrangements, agreements, or understandings at the present time for the issuance
or use of the additional shares of Preferred Stock. Any future issuance of
Preferred Stock shall be subject to the rights of the existing Preferred
Stockholders.

PROPOSAL NO. 5
--------------

RATIFICATION OF THE APPOINTMENT OF CHESHIER & FULLER, L.L.P.
AS THE COMPANY'S INDEPENDENT ACCOUNTANTS

Effective as of June 24, 2002, the Company dismissed PricewaterhouseCoopers
LLP ("PWC") as its independent accountants, upon the recommendation of the Audit
Committee and the approval of the Board of Directors. The Board of Directors has
authorized and the Company has appointed the firm of Cheshier & Fuller, L.L.P.
("Cheshier & Fuller") to serve as the Company's independent accountants for the
year ending December 31, 2002. Cheshier & Fuller's engagement commenced
effective as of June 24, 2002. During the two most recent fiscal years of the
Company ended December 31, 2001, and the subsequent interim period through June
24, 2002, the Company did not consult with Cheshier & Fuller regarding any of
the matters or events set forth in Item 304(a)(2)(i) or (ii) of Regulation S-B.
The Company's selection of Cheshier & Fuller was based on their having been the
Company's independent accountants prior to PWC and their excellent service
during the prior engagement with the Company.

A proposal will be presented at the meeting to ratify the appointment of
Cheshier & Fuller as our independent accountants for the year ending December
31, 2002. If the stockholders fail to ratify such selection by the affirmative
vote of a majority of the Common Stock present in person or represented by proxy
at the meeting, other independent accountants will be considered by our Board
upon the recommendation of the Audit Committee. A representative of Cheshier &
Fuller will attend the Annual Meeting and will have the opportunity to make a
statement if he or she so desires. The Cheshier & Fuller representative will be
available to respond to appropriate shareholder questions at that time.

PWC served as the Company's independent accountants for the fiscal years
ended December 31, 2001, and 2000. PWC's reports on the Company's financial
statements for each of the years ended December 31, 2001, and December 31, 2000
(the "Reports"), did not contain an adverse opinion or disclaimer of opinion and
were not modified as to uncertainty, audit scope, or accounting principles
except that the report for 2001 included an explanatory paragraph emphasizing 1)
the Company's limited access to the hospital market and 2) classification of a
note payable. During the two most recent fiscal years of the Company ended
December 31, 2001, and the interim period through June 24, 2002, there were no
disagreements with PWC within the meaning of Instruction 4 of Item 304 of
Regulation S-B on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to PWC's satisfaction, would have caused PWC to make reference to
the subject matter of the disagreements in connection with its Reports and there
were no "reportable events" (as such term is defined in Item 304(a)(1)(iv) of
Regulation S-B).

A letter from PWC addressed to the United States Securities and Exchange
Commission was included as Exhibit 16 to a Form 8-K filed on June 24, 2002. Such
letter stated that PWC agreed with the above statements.

AUDIT FEES

The aggregate fees billed by PWC for professional services rendered for the
audit of the Company's annual financial statements for 2001 and the reviews of
the financial statements included in the Company's Forms 10-QSB were $211,260.

ALL OTHER FEES

PWC billed the Company an additional $3,805; $114,904; and $5,600 for
generation of tax filings, review of the Company's public offering filings, and
for miscellaneous services, respectively. The Audit Committee has considered the
independence of the accountants in light of the provision of these services and
believes the provision of these services was and is compatible with maintaining
the independent accountant's independence.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPOINTMENT OF
CHESHIER & FULLER AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE YEAR ENDING
DECEMBER 31, 2002.

OTHER MATTERS
-------------

We do not anticipate that any other matters will be raised at the Annual
Meeting. Management of RTI is not aware of any other matters that are to be
presented at the Annual Meeting and has not been advised that other persons will
present any such matters. However, if other matters properly come before the
Annual Meeting, the individuals named in the accompanying proxy card shall vote
on such matters in accordance with their best judgment.

PROPOSALS OF SHAREHOLDERS FOR PRESENTATION AT NEXT YEAR'S ANNUAL MEETING
------------------------------------------------------------------------

Any Common Stockholder of record of the Company, who desires to submit a
proper proposal for inclusion in the Proxy materials relating to the next Annual
Meeting of shareholders, must do so in writing and it must be received at the
Company's principal executive offices located at 511 Lobo Lane, Little Elm,
Texas 75068-0009, by April 15, 2003. Any such proposal shall be subject to the
requirements of the proxy rules adopted under the Securities Exchange Act of
1934, as amended. The proponent must be a record or beneficial owner entitled to
vote at the next Annual Meeting on his or her proposal and must continue to own
such security entitling him or her to vote through the date on which the meeting
is held. The deadline for timely submitting shareholder proposals for
consideration at next year's Annual Meeting is June 29, 2003. Proposals received
after this date will be considered untimely and will not be addressed at the
next Annual Meeting.

Proxies submitted will be voted at the discretion of management for matters
that are submitted to a vote of the shareholders later than June 29, 2003, and
are incapable of inclusion in the proxy statement.

ANNUAL REPORT ON FORM 10-KSB
----------------------------

RTI's Annual Report on Form 10-KSB for the fiscal year ended December 31,
2001, has been previously distributed to all record holders. The Annual Report
on Form 10-KSB is not incorporated in the Proxy Statement and is not to be
considered a part of the soliciting material. RTI will provide, without charge,
to each person solicited, on the written request of any such person, a copy of
our annual report on Form 10-KSB, including the financial statements and the
financial statement schedules, required to be filed with the SEC pursuant to
Rule 13a-1 under the Securities Act of 1933, as amended, for the most recent
fiscal year. Such requests shall be submitted to Douglas W. Cowan, Chief
Financial Officer of RTI, at 511 Lobo Lane, P.O. Box 9, Little Elm, Texas
75068-0009.

Appendix

RETRACTABLE TECHNOLOGIES, INC.
1999 STOCK OPTION PLAN

This Retractable Technologies, Inc. 1999 Stock Option Plan (hereinafter
called the "Plan") was adopted by the Board of Directors of Retractable
----
Technologies, Inc., a Texas corporation (hereinafter called the "Company"), on
-------
September 14, 1999. The date of approval of the Plan (hereinafter called the
"Date of Approval") is fixed at July 1, 1999. The Plan will be submitted to the
----------------
Shareholders of the Company for approval within one (1) year of the Date of
Approval.

(1) PURPOSE AND SCOPE. The purposes of this Plan are to encourage stock
-----------------
ownership by employees of the Company and its subsidiaries, to provide an
incentive for such employees to expand and improve the profits of the Company
and its subsidiaries, and to assist the Company and its subsidiaries in
attracting and retaining key personnel through the grant of incentive stock
options and nonqualified stock options to purchase shares of the Company's
common stock. Incentive stock options may only be granted to key employees of
the Company and its subsidiaries. Nonqualified stock options, but not incentive
stock options, may be given to other employees, independent contractors or
non-employee directors of the Company and its subsidiaries pursuant hereto.

(2) DEFINITIONS. For purposes of this Plan, the following terms shall have
-----------
the following meanings:

(A) "Board" shall mean the Board of Directors of the Company.
-----

(B) "Committee" shall mean the Compensation Committee, which shall be
---------
appointed by the Board.

(D) "Code" shall mean the Internal Revenue Code of 1986, as amended.
----

(E) "ISO" shall mean an incentive stock option within the meaning of
---
Section 422 of the Code to purchase Stock, granted pursuant to
this Plan.

(F) "NQSO" shall mean a nonqualified stock option to purchase Stock,
----
granted pursuant to this Plan.

(G) "Option Price" shall mean the purchase price for Stock pursuant to
------------
a Stock Option as determined in Section (6) of this Plan.

(H) "Participant" shall mean an employee of the Company, or of any
-----------
subsidiary of the Company, to whom an ISO is granted under this
Plan and, in the case of an NQSO, shall mean such persons or an
independent contractor to whom an NQSO is granted pursuant to the
Plan.

(I) "Plan" shall mean this Retractable Technologies, Inc. 1999 Stock
----
Option Plan.

(J) "Stock" shall mean the common stock of the Company, no par value.
-----

(K) "Stock Option" shall mean an ISO or NQSO.
------------

(3) STOCK TO BE OPTIONED; DESIGNATION OF INCENTIVE STOCK OPTIONS. Subject
------------------------------------------------------------
to the provisions of Section (11) of this Plan, the maximum number of shares of
Stock that may be optioned or sold under this Plan is Two Million (2,000,000)
shares, all of which may be designated as ISOs. The shares shall be either
treasury or authorized

but unissued shares of Stock of the Company. Options or portions of options
granted under this Plan to key employees may, in the discretion of the
Committee, be designated as ISOs or as NQSOs. Options granted to non-employees
must be NQSOs. In addition to any other term or provision of this Plan
applicable to an ISO, any option designated as an ISO shall also be subject to
the condition that the aggregate fair market value (determined at the time the
options are granted) of the Company's Common Stock with respect to which
incentive stock options are exercisable for the first time by any individual
employee during any calendar year (under this Plan and all other similar plans
of the Company and its subsidiaries hereafter adopted) shall not exceed One
Hundred Thousand Dollars ($100,000.00).

(4) ADMINISTRATION. This Plan shall be administered by the Committee or, in
--------------
the absence of a Committee, by the Board. The Committee shall be responsible to
the Board for the operation of this Plan, and shall make recommendations to the
Board with respect to participation in this Plan by employees of the Company and
its subsidiaries, and with respect to the terms, limitations, restrictions,
conditions and extent of that participation. The interpretation and construction
of any provision of this Plan by the Committee shall be final, unless otherwise
determined by the Board. No member of the Board or the Committee shall be liable
for any action or determination made by that member in good faith relating to
the Plan or any award thereunder.

(5) ELIGIBILITY. The Board, upon recommendation of the Committee or upon
-----------
its own action, may grant Stock Options to any employee (including an employee
who is also a Director or an Officer) of the

Company or its subsidiaries or any independent contractor. The Board shall
designate the Stock Options as ISOs or NQSOs to the extent permitted hereby. In
making its selection and in determining the amount of awards to recommend, the
Committee may consider any factors it deems relevant including the individual's
functions, responsibilities, value of services to the Company and past and
potential contributions to the Company's profitability and growth. Stock Options
may be awarded by the Board at any time and from time to time to new
Participants, or to then Participants, or to a greater or lesser number of
Participants, and may include or exclude previous Participants, as the Board
shall determine in its sole discretion. Except as required by this Plan, Stock
Options granted at different times need not contain similar provisions. The
Committee's determinations under the Plan (including without limitation
determinations of the employees to receive awards, the form, amount and timing
of such awards, the terms and provisions of such awards and the agreements
evidencing same) need not be uniform and may be made by it selectively among
employees who receive, or are eligible to receive, awards under the Plan,
whether or not those employees are similarly situated.

(6) OPTION PRICE FOR ISOs AND NQSOs. For any Participant who is not deemed
-------------------------------
to be a Ten Percent (10%) Shareholder under the rules applicable to ISOs under
422 of the Code (a "10% Shareholder"), the Option Price for each share to be
---------------
acquired pursuant to an ISO shall be One Hundred Percent (100%) of the fair
market value of the share as determined by the Board of the Common Stock on the
date the ISO is granted. For any Participant who is deemed to be a 10%
Shareholder

under the rules applicable to ISOs under Section 422 of the Code, the Option
Price for each share to be acquired pursuant to an ISO shall be One Hundred Ten
Percent (110%) of the fair market value of the share. The Option Price for any
NQSO shall be as determined by the Board of the Common Stock on the date the
NQSO is granted. In addition, the Board shall include in any NQSO granted
pursuant to this Plan a condition that, upon exercise of the NQSO and prior to
the issuance of any stock certificate to the Participant, the Participant shall
remit to the Company the amount, if any, of any federal, state or local
employment taxes required to be withheld upon exercise of the NQSO. The
Participant may (i) make a direct payment to the Company to satisfy this
obligation, (ii) increase withholding on his cash compensation on the date the
NQSO is exercised, and/or (iii) use the procedure described in the following
provisions of this Subsection (6). One (1) month prior to exercise of a NQSO,
the Participant may deliver a notice of withholding election to the Company. The
notice shall state that the Company is to (i) calculate the amount of
withholding tax due as if all shares for which a NQSO is to be exercised were
delivered, (ii) reduce that number of shares made available for delivery so that
the fair market value of the shares withheld on the exercise date approximates
the Company's withholding tax obligation, and (iii) pay the cash to the Internal
Revenue Service and other applicable taxing authorities on the Participant's
behalf instead. No withholding obligation shall be imposed by this Section (6)
unless also imposed by applicable law.

(7) TERMS AND CONDITIONS OF OPTIONS GENERALLY; ISO PROVISIONS. Stock
---------------------------------------------------------
Options granted pursuant to this Plan shall be

authorized by the Board and shall be evidenced by a written Stock Option
Agreement or Agreements in such form as the Board, upon recommendation of the
Committee, shall from time to time approve. Any Stock Option granted pursuant to
this Plan must be granted within ten (10) years of the earlier of the date of
adoption of this Plan or the approval of this Plan by the Company's
Shareholders. Any agreements with respect to ISOs shall comply with and be
subject to the following terms and conditions:

(A) DEATH OF PARTICIPANT.
--------------------

(i) Notwithstanding Section 7(B) of this Plan, upon the death of
the Participant, any ISO exercisable on the date of death
may be exercised by the Participant's estate or by a person
who acquires the right to exercise such ISO by bequest or
inheritance or by reason of the death of the Participant,
provided that such exercise occurs within both the remaining
option term of the ISO and within twelve (12) months after
the Participant's death.

(ii) The provisions of this Subsection (7)(A) shall apply
notwithstanding the fact that the Participant's employment
may have terminated prior to death, and if the Stock Option
remains exercisable but only to the extent of any ISOs
exercisable on the date of death.

(B) DISABILITY. Upon the termination of the Participant's employment
----------
by reason of permanent disability (as determined by the Board),
the Participant may, within twelve (12) months from the date of
such termination of employment, exercise any ISOs to the extent
such ISOs were exercisable at the date of such termination of
employment due to disability.

(C) TERMINATION FOR OTHER REASONS. Except as provided in Sections
-----------------------------
(7)(A) and (7)(B), all ISOs shall automatically terminate three
(3) months after the termination of the Participant's employment
without cause and automatically upon termination with cause.

(D) TIME AND METHOD OF PAYMENT. The Option Price of an ISO shall be
--------------------------
paid in full in cash at the time an ISO is exercised under this
Plan. Otherwise, an exercise of any ISO granted under this Plan
shall be invalid and of no effect. Promptly after the exercise of
an ISO and the payment of the Option Price, the Participant shall
be entitled to the issuance of a stock certificate evidencing his
ownership of such Stock. A Participant shall have none of the
rights of a shareholder until certificates for shares are issued
to him, and no adjustment will be made for dividends or other
rights for which the record date is prior to the date such stock
certificate is issued.

(E) NUMBER OF SHARES. Each ISO Agreement shall state the total number
----------------
of shares of Stock to which it pertains.

(F) GENERAL OPTION PERIOD AND LIMITATIONS ON EXERCISE OF OPTIONS.
------------------------------------------------------------
Subject to the provisions of Section (3) of this Plan, the Board
may, in its discretion, provide that an ISO may not be exercised
in whole or in part for any period or periods of time or beyond
any date specified in the ISO Agreement. Except as provided in
the ISO Agreement, an ISO may be exercised in whole or in part at
any time during its term. Notwithstanding any other provision of
this Plan, an ISO granted to a Participant who is not deemed to
be a 10% Shareholder may not be exercised after the expiration of
ten (10) years from the date it is granted. Notwithstanding any
other provision of this Plan, no ISO granted to a Participant who
is deemed to be a 10% Shareholder may be exercised after the
expiration of five (5) years from the date it is granted. No

Stock Option may be exercised for a fractional share of Stock. An
ISO exercised in part shall remain exercisable as to the
remaining part in accordance with its terms.

(8) NQSO REQUIREMENTS. Any agreements with respect to NQSOs shall comply
-----------------
with and be subject to the following terms and conditions:

(A) DEATH OF PARTICIPANT.
--------------------

(i) Notwithstanding Section (8)(B) of this Plan, upon the death
of the Participant, any NQSO exercisable on the date of
death may be exercised by the Participant's estate or by a
person who acquires the right to exercise such NQSO by
bequest or inheritance or by reason of the death of the
Participant, provided that such exercise occurs within both
the remaining option term of the NQSO and within twelve (12)
months after the Participant's death. Any nonvested NQSOs
shall be forfeited at the death of the Participant.

(ii) The provisions of this Subsection (8)(A) shall apply
notwithstanding the fact that the Participant's employment
may have terminated prior to death, and if the NQSO remains
exercisable but only to the extent of any NQSOs exercisable
on the date of death.

(B) DISABILITY. Subject to Section (8)(A), upon the termination of
----------
the Participant's employment by reason of permanent disability
(as determined by the Board), the Participant may, during the
remaining term of the Option, exercise any NQSOs to the extent
such NQSOs were exercisable at the date of such termination of
employment due to disability. Nonvested NQSOs are forfeited upon
termination of employment due to disability.

(C) TERMINATION FOR OTHER REASONS. Except as provided in Sections
-----------------------------
(8)(A) and (8)(B) or except

as otherwise determined by the Board in granting the NQSO, all
NQSOs shall automatically terminate upon the termination of
employment for cause. Otherwise, subject to Section (8)(A), the
vested portion of the NQSO shall expire upon the expiration of
its term. Nonvested NQSOs are forfeited upon termination of
employment with or without cause.

(D) TIME AND METHOD OF PAYMENT. The Option Price and any other
--------------------------
amounts payable upon exercise of an NQSO shall be paid in full at
the time an NQSO is exercised under this Plan. Otherwise, an
exercise of any NQSO granted under this Plan shall be invalid and
of no effect. Promptly after the exercise of an NQSO and the
payment of the Option Price and any other required amounts, the
Participant shall be entitled to the issuance of a stock
certificate evidencing his ownership of such Stock. A Participant
shall have none of the rights of a shareholder until certificates
for shares are issued to him, and no adjustment will be made for
dividends or other rights for which the record date is prior to
the date such stock certificate is issued.

(E) NUMBER OF SHARES. Each Stock Option Agreement shall state the
----------------
total number of shares of Stock to which it pertains.

(F) GENERAL OPTION PERIOD AND LIMITATIONS ON EXERCISE OF OPTIONS.
------------------------------------------------------------
Subject to the provisions of Section (3) of this Plan, the Board
may, in its discretion, provide that an NQSO may not be exercised
in whole or in part for any period or periods of time or beyond
any date specified in the Stock Option Agreement. Except as
provided in the Stock Option Agreement, a vested NQSO may be
exercised in whole or in part at any time during its term. No
NQSO may be exercised for a fractional share of Stock. An NQSO
exercised in part shall remain exercisable as to the remaining
part in accordance with its terms.

(9) NO OBLIGATION TO EXERCISE STOCK OPTION. The granting of a Stock Option
--------------------------------------
shall impose no obligation upon the Participant to exercise that Stock Option.

(10) NONASSIGNABILITY. ISOs shall not be transferable other than by will or
----------------
by the laws of descent and distribution, and during a Participant's lifetime
shall be exercisable only by such Participant. NQSOs may not be transferred for
a period of one (1) year from the date of grant to non-Affiliates and may not be
transferred for a period of two (2) years from the date of grant to Affiliates.
For purposes of this Section, the term "Affiliate" shall mean an executive
officer of the Company, a director of the Company, a 10% Shareholder, a family
member of any such person or any entity in which directors, executive officers,
10% Shareholders or their family members hold at least Ten Percent (10%) of the
equity, profits interests, beneficial interests or voting rights.

(11) EFFECT OF CHANGE IN STOCK SUBJECT TO THIS PLAN. The aggregate number
----------------------------------------------
of shares of Stock available for Stock Options under this Plan, the shares
subject to any Stock Option and the price per share shall each be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock subsequent to the effective date of this Plan resulting from (1)
a subdivision or consolidation of shares or any other capital adjustment, (2)
the payment of a Stock dividend, or (3) other increase or decrease in such
shares effected without receipt of consideration by the Company. If the Company
shall be the surviving corporation in any merger or consolidation, any Stock
Option shall pertain, apply and relate to the securities to which a holder of
the number of shares of Stock subject to the Stock Option would have been
entitled

after the merger or consolidation. Upon dissolution or liquidation of the
Company, or upon a merger or consolidation in which the Company is not the
surviving corporation, all Stock Options outstanding under this Plan shall
terminate; provided, however, that each Participant (and each other person
entitled to exercise a Stock Option) shall have the right, immediately prior to
such dissolution or liquidation, or such merger or consolidation, to exercise
such Participant's Stock Options in whole or in part, but only to the extent
that such Stock Options are otherwise exercisable under the terms of this Plan.

(12) AGREEMENT AND REPRESENTATION OF EMPLOYEES. As a condition to the
-----------------------------------------
exercise of any portion of a Stock Option, the Company may require the person
exercising such Stock Option to represent and warrant at the time of such
exercise that any shares of Stock acquired at exercise are being acquired only
for investment and without any present intention to sell or distribute such
shares, if, in the opinion of counsel for the Company, such representation is
required under the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, or any other applicable law, regulation or rule of any
governmental agency.

(13) RESERVATION OF SHARES OF STOCK. The Company, during the term of this
------------------------------
Plan, will at all times reserve and keep available the number of shares of Stock
that shall be sufficient to satisfy the requirements of this Plan.

(14) EFFECTIVE DATE OF PLAN. The Plan shall be effective from the date that
----------------------
this Plan is approved by the Board.

(15) TAX REPORTING FOR ISO EXERCISE. The Company or a subsidiary of the
------------------------------
Company, as appropriate, shall furnish a statement to

any Participant exercising an ISO on or before January 31 of the calendar year
following the calendar year in which an ISO exercise occurs in compliance with
Section 6039(a) of the Code. The statement shall contain the following
information:

(A) The employer corporation's name, address and taxpayer
identification number;

(B) The name, address and taxpayer identification number of the
person to whom the ISO shares are transferred;

(D) The date the ISO was granted;

(E) The date the shares were transferred pursuant to the exercise of
the ISO;

(F) The fair market value of the Stock on date of exercise;

(G) The number of shares transferred upon exercise of the ISO;

(H) A statement that the ISO was an ISO; and

(I) The total cost of the shares.

(16) RIGHTS OF EMPLOYEES. No person shall have any rights or claims under
-------------------
the Plan except in accordance with the provisions of the Plan. Nothing contained
in the Plan shall be deemed to give any employee the right to be retained in the
service of the Company or its subsidiaries.

(17) USE OF PROCEEDS. Proceeds from the sale of shares pursuant to Stock
---------------
Options granted under this Plan shall constitute general funds of the Company.

(18) AMENDMENTS. The Board of Directors may discontinue the Plan and the
----------
Committee may amend the Plan from time to time, but no amendment, alteration or
discontinuation shall be made which, without the approval of the stockholders,
would:

(A) Except as provided in Section (11) of the Plan, increase the
total number of shares reserved for the purposes of the Plan;

(B) Decrease the Option Price of an ISO to less than the amounts
shown in Section (6) of the Plan; or

Except as provided in Section (11) of the Plan, neither shall any
amendment, alteration or discontinuation impair the rights of any holder of a
Stock Option theretofore granted without his consent; provided, however, that if
the Committee after consulting with management of the Company determines that
application of an accounting standard in compliance with any statement issued by
the Financial Accounting Standards Board concerning the treatment of employee
stock options would have a significant adverse effect on the Company's financial
statements because of the fact that Stock Options granted before the issuance of
such statement are then outstanding, then the Committee in its absolute
discretion may cancel and revoke all outstanding Stock Options to which such
adverse effect is attributed and the holders of those Stock Options shall have
no further rights in respect thereof. Such cancellation and revocation shall be
effective upon written notice by the Committee to the holders of such Stock
Options.

PROXY FOR SERIES II CLASS B CONVERTIBLE PREFERRED STOCK
RETRACTABLE TECHNOLOGIES, INC.
511 Lobo Lane
Little Elm, Texas 75068-0009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby acknowledges receipt of the Notice of the Annual
Meeting of Shareholders of Retractable Technologies, Inc. (the "Company" or
"RTI") to be held on September 20, 2002, at 10:00 a.m., central standard time,
at the Community Center of Little Elm, 107 Hardwicke Lane, Little Elm, Texas
75068 (the "Annual Meeting"), and the Proxy Statement in connection therewith,
and appoints Thomas J. Shaw and Steven R. Wisner, and each of them,
individually, as the lawful agents and proxies of the undersigned (with all
powers the undersigned would possess if personally present, including full power
of substitution), and hereby authorizes each of them to represent and to vote,
as designated below, all shares of Series II Class B Convertible Preferred Stock
of the Company held of record by the undersigned as of the close of business on
July 23, 2002, at the Annual Meeting of Shareholders or any adjournment or
postponement thereof.

At the Annual Meeting, the following matter proposed by the Compnay's Board
of Directors will be voted on by the holders of the Series II Class B
Convertible Preferred Stock:

The election of Kenneth W. Biermacher, Timothy G. Greene, and John J.
McDonald, Jr. as Series II Directors.

Please date, sign and mail your
proxy card back as soon as possible!

Annual Meeting of Shareholders
RETRACTABLE TECHNOLOGIES, INC.

SERIES II CLASS B CONVERTIBLE PREFERRED STOCK

September 20, 2002

[Please Detach and Mail in the Envelope provided]

A [X] Please mark your
votes as in this
example.

The matter to be voted on is not related to or conditioned on the approval of other matters.

FOR WITHHOLD
1. Election of [ ] [ ] The Nominees are: In their discretion, upon any other business that may properly
Series II Kenneth W. Biermacher come before the meeting or any adjournment or postponement
Directors Timothy G. Greene thereof.
John J. McDonald, Jr.
(Instructions: To withhold authority It is understood that any proxy executed in such manner as not to
to vote for any nominee(s), strike withhold authority to vote for the election of any nominee shall
through names of such nominee(s) be deemed to grant such authority.
listed on the right.)
It is understood that, when properly executed, this Proxy will be
voted in the manner directed herein by the undersigned
shareholder. WHERE NO CHOICE IS SPECIFIED BY THE SHAREHOLDER, THE
PROXY WILL BE VOTED "FOR" THE NAMED PROPOSAL.

The undersigned hereby revokes all previous proxies related to
the shares covered hereby and confirms all that said Proxy and
his substitutes may do by virtue hereof.

PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.

PLEASE CHECK THIS BOX IF YOU INTEND [ ]
TO BE PRESENT AT THE ANNUAL MEETING.

Signature _______________________________ Signature ___________________________________ Dated: ___________
(IF HELD JOINTLY)

Please sign exactly as name(s) appear(s) above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.

PROXY FOR COMMON STOCK
RETRACTABLE TECHNOLOGIES, INC.
511 Lobo Lane
Little Elm, Texas 75068-0009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby acknowledges receipt of the Notice of the Annual
Meeting of Shareholders of Retractable Technologies, Inc. (the "Company" or
"RTI") to be held on September 20, 2002, at 10:00 a.m., central standard time,
at the Community Center of Little Elm, 107 Hardwicke Lane, Little Elm, Texas
75068 (the "Annual Meeting"), and the Proxy Statement in connection therewith,
and appoints Thomas J. Shaw and Steven R. Wisner, and each of them,
individually, as the lawful agents and proxies of the undersigned (with all
powers the undersigned would possess if personally present, including full power
of substitution), and hereby authorizes each of them to represent and to vote,
as designated below, all the shares of Common Stock of the Company held of
record by the undersigned as of the close of business on July 23, 2002, at the
Annual Meeting of Shareholders or any adjournment or postponement thereof.

At the Annual Meeting, the following four matters proposed by the Company's
Board of Directors will be voted on by the holders of Common Stock.

1. The election of Thomas J. Shaw, Steven R. Wisner, Douglas W. Cowan,
Clarence Zierhut, and Marwan Saker as Class 2 Directors;
2. The increase of shares authorized for issuance under the Company's 1999
Stock Option Plan to 4,000,000;
3. The authorization of 5,000,000 shares of a Class C Convertible Preferred
Stock; and
4. The ratification of the appointment of Cheshier & Fuller, L.L.P. as the
Company's independent accountants for the year ending December 31, 2002.

Please date, sign and mail your
proxy card back as soon as possible!

Annual Meeting of Shareholders
RETRACTABLE TECHNOLOGIES, INC.

COMMON STOCK

September 20, 2002

[Please Detach and Mail in the Envelope Provided]

A [X] Please mark your
votes as in this
example.

The matters to be voted on are not related to or conditioned on the approval
of other matters.

1. Election of FOR WITHHOLD Nominees:
Class 2 Directors [ ] [ ] Thomas J. Shaw
(Instructions: To withhold authority to vote for Steven R. Wisner
any nominees(s), strike through names of such Douglas W. Cowan
nominee(s) listed on the right.) Clarence Zierhut
Marwan Sakar

2. Proposal to increase the number of shares FOR AGAINST ABSTAIN
authorized for issuance under the Company's [ ] [ ] [ ]
1999 Stock Option Plan to 4,000,000.

3. Proposal to authorize 5,000,000 shares of
a Class C Convertible Preferred Stock. [ ] [ ] [ ]

4. Proposal to ratify the appointment of
Cheshier & Fuller, L.L.P. as the Company's [ ] [ ] [ ]
independent accountants for the year ending
December 31, 2002.

In their discretion, upon any other business that may properly come before the
meeting or any adjournment or postponement thereof.

It is understood that any proxy executed in such manner as not to withhold
authority to vote for the election of any nominee shall be deemed to grant
such authority.

It is understood that, when properly executed, this Proxy will be voted in the
manner directed herein by the undersigned shareholder. WHERE NO CHOICE IS
SPECIFIED BY THE SHAREHOLDER, THE PROXY WILL BE VOTED "FOR" THE NAMED PROPOSALS.

The undersigned hereby revokes all previous proxies related to the shares
covered hereby and confirms all that said Proxy and his substitutes may do by
virtue hereof.

PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.

PLEASE CHECK THIS BOX IF YOU INTEND [ ]
TO BE PRESENT AT THE ANNUAL MEETING

Signature:__________________________________________ Dated: _____________, 2002