<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C> <C> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
HEALTHTRONICS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
HEALTHTRONICS, INC.
[Letterhead]
April 24, 2000
Dear Shareholder,
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of HealthTronics, Inc., which will be held at the Wyndham Hotel,
1775 Parkway Place NW, Marietta, Georgia, on Monday, May 15, 2000, at 2:00 p.m.
The enclosed meeting notice and proxy statement contain details concerning the
business to be discussed at the meeting.
Please sign, date and return your proxy card in the enclosed envelope
at your earliest convenience to assure that your shares will be represented and
voted at the meeting, even if you cannot attend.
Argil J. Wheelock
Chairman and CEO
<PAGE> 3
HEALTHTRONICS, INC.
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TIME: 2:00 p.m. (local time), Monday, May 15, 2000
PLACE: Wyndham Hotel
1775 Parkway Place NW
Marietta, Georgia
AGENDA: Consider and act upon the following:
1. The election of six directors. The following individuals are
nominated by the Board of Directors to serve until the 2001 Annual
Meeting of Shareholders
ROY BROWN
JON BURKE
SCOTT COCHRAN
JOHN HOUSE
RUSS MADDOX
ARGIL WHEELOCK
2. The Company's Stock Option Plan - 2000.
3. The appointment by the Board of Directors of Ernst & Young LLP as
the Company's independent auditors for the fiscal year ending
December 31, 2000.
4. To transact such other business as may properly come before the
meeting or any adjournments thereof.
RECORD DATE: Holders of common stock of the Company at the close of
business on March 15, 2000 are entitled to vote.
More information about the above can be found in the attached proxy
statement. A list of shareholders as of the record date will be available for
inspection at the annual meeting.
By Order of the Board of Directors
/s/ Argil J. Wheelock
ARGIL J. WHEELOCK
Chairman
Marietta, Georgia
April 24, 2000
EACH SHAREHOLDER IS ENCOURAGED TO EXECUTE AND RETURN THE ENCLOSED PROXY
PROMPTLY. A SHAREHOLDER WHO DECIDES TO ATTEND THE MEETING MAY, IF SO DESIRED,
REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.
<PAGE> 4
HEALTHTRONICS, INC.
1841 WEST OAK PARKWAY, SUITE A
MARIETTA, GA 30062
April 24, 2000
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 2000
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of HealthTronics, Inc. (the "Company") to
be voted at the 2000 Annual Meeting of Shareholders of the Company and at any
adjournments thereof. The Annual Meeting will be held at the Wyndham Hotel, 1775
Parkway Place NW, Marietta, Georgia, on Monday, May 15, 2000, at 2:00 p.m.,
local time.
The mailing address of the principal executive offices of the Company
is 1841 West Oak Parkway, Suite A, Marietta, GA 30062. The approximate date on
which this proxy statement and form of proxy are first being sent or given to
shareholders is April 24, 2000.
VOTING
Only owners of record of shares of common stock of the Company
("Company Stock") at the close of business on March 15, 2000, are entitled to
notice of and to vote at the 2000 Annual Meeting or any adjournments thereof.
Each shareholder of record on the record date is entitled to one vote for each
share of Company Stock so owned. On March 15, 2000, there were 10,716,271 shares
of Company Stock issued and outstanding. Under the Company's bylaws, the holders
of a majority of the issued and outstanding shares of Company Stock, present in
person or represented by proxy at the Annual Meeting, will constitute a quorum
for the transaction of business. Shareholders may vote in favor of all nominees
for election as directors, withhold their votes as to all nominees or withhold
their votes as to specific nominees. With respect to all other proposals,
shareholders may vote in favor of or against each proposal or may abstain from
voting. Shareholders should specify their choices on the enclosed proxy card.
Recommendations of the Board of Directors
If no specific instructions are given with respect to the matters to be
acted upon, the shares represented by a properly signed proxy card will be voted
in accordance with the recommendations of the Board of Directors, which are as
follows:
<PAGE> 5
FOR the election of the following six directors nominated by the Board
to serve until the 2001 Annual Meeting of Shareholders:
ROY BROWN
JON BURKE
SCOTT COCHRAN
JOHN HOUSE
RUSS MADDOX
ARGIL WHEELOCK
FOR approval of the Company's Stock Option Plan - 2000;
FOR ratification of Ernst & Young LLP's appointment as independent
auditors of the Company for the fiscal year ending December 31, 2000.
If any other matters properly come before the Annual Meeting, the
persons named as proxies will vote upon such matters according to their judgment
as to what is in the best interest of the Company.
The six nominees for directors receiving the highest vote totals will
be elected as directors of the Company. Therefore, abstentions and broker
nonvotes* will have no effect on the vote for the election of directors.
With respect to all other proposals, the affirmative vote of the
holders of a majority of the Company Stock present, or represented and entitled
to vote, at the Annual Meeting, will be required to approve such proposals.
Abstentions will be counted as present and entitled to vote, and will have the
effect of "No" votes. Broker nonvotes will not be included in vote totals and
will have no effect on the outcome of each vote.
Proxies and votes will be tabulated by the Company's transfer agent.
All proxies delivered pursuant to this solicitation are revocable at
any time prior to voting at the option of the persons executing them either by
giving written notice to the Secretary of the Company, by delivering a proxy
bearing a later date, or by voting in person at the Annual Meeting. All properly
executed proxies delivered and not revoked will be voted at the Annual Meeting
in accordance with the directions given.
All expenses incurred in connection with the solicitation of proxies
will be borne by the Company. Such costs include charges by brokers, banks,
fiduciaries and custodians for forwarding proxy materials to beneficial owners
of Company Stock held in their names. Solicitation may be undertaken by mail,
telephone and personal contact by directors, officers and employees of the
Company without additional compensation.
- --------
*"Broker nonvotes" are limited proxies submitted by brokers who do not have
the required voting authority from the beneficial owners.
2
<PAGE> 6
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
NOMINEES
Pursuant to the bylaws of the Company, the Board of Directors has set
the number of directors of the Company at six.
The Board of Directors has named ROY BROWN, JON BURKE, SCOTT COCHRAN,
JOHN HOUSE, RUSS MADDOX and ARGIL WHEELOCK to stand for election as directors at
the Annual Meeting. Each of the nominees has consented to serve as a director if
elected at the Annual Meeting. Should any one or more of these nominees become
unable to serve for any reason, or choose not to serve (which is not
anticipated), the Board of Directors may designate a substitute nominee or
nominees (in which event the persons named in the enclosed proxy card will vote
all valid proxy cards for the election of such substitute nominee or nominees),
allow the vacancy or vacancies to remain open until a suitable candidate or
candidates are located, or by resolution provide for a lesser number of
directors.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE
ELECTION OF ROY BROWN, JON BURKE, SCOTT COCHRAN, JOHN HOUSE, RUSS MADDOX AND
ARGIL WHEELOCK AS DIRECTORS TO HOLD OFFICE UNTIL THE 2001 ANNUAL MEETING OF
SHAREHOLDERS, AND UNTIL THEIR RESPECTIVE SUCCESSORS ARE ELECTED AND QUALIFIED.
INFORMATION CONCERNING DIRECTORS
Set forth below with respect to the directors and nominees for director
of the Company is information regarding their principal occupations (which have
continued for at least the past five years unless otherwise noted) and certain
other information.
ROY S. BROWN, age 52 - Mr. Brown has served as HealthTronics' President and COO
since May 31, 1996. Mr. Brown was the president of Servicetrends, Inc. Prior to
this he served as: vice president of Sales and Marketing for Intra-Sonix of
Burlington, Massachusetts, a medical equipment manufacturing company, from 1994
to 1995; owner of Andex products, an international business consulting firm in
Lawrenceville, Georgia, from 1992 through 1994; and executive vice president of
Sales and Marketing for Dornier Medical Systems, a manufacturer of medical
equipment located in Munich, Germany, from 1984 to 1992. Mr. Brown holds the
equivalent of a B.A. in International Business from Industry and Trade School in
Hannover, Germany.
JON BURKE, age 53 - Mr. Burke has served as a director of HealthTronics since
February, 1998. He is presently the managing member of Capital Appreciation
Management Company, L.L.C., which is the managing general partner of an
Atlanta-based merchant banking fund specializing in acquiring controlling
interests in companies located in the southeastern United States. Mr. Burke is
also a principal with Brown Burke Capital Partners, Inc., which provides
financial advisory services to middle market companies in connection with
mergers and acquisitions and financing. Mr. Burke also serves as a director of
United Companies Financial Corporation, a financial services holding company
engaged in consumer lending. From 1973 to 1996, Mr. Burke was employed by the
Robinson-Humphrey Company, Inc., most recently serving as a senior vice
president and the head of its financial institutions/banking research.
3
<PAGE> 7
SCOTT COCHRAN, age 38 - Mr. Cochran has served as HealthTronics' Secretary and
Treasurer since May 31, 1996. Mr. Cochran is a partner with the law firm of
Cochran, Camp and Snipes in Smyrna, Georgia, and has held this position since
1988. He received an A.A. degree from Young Harris College, a B.A. from Emory
University and a J.D. from Mercer Law School. Mr. Cochran's law firm also serves
as outside counsel to the Company.
JOHN HOUSE, age 45 - Mr. House has been a practicing board-certified urologist
in Arlington, Texas since 1991 and is the managing partner of Urology Associates
of North Texas. From 1988 until 1991 he was in private practice in Forth Worth,
Texas. His is past chief of surgery at Hughley Hospital in Fort Worth, Texas.
Dr. House is a diplomat of the American Board of Urology. He is on the board of
directors of the Arlington Alliance and Specialty Net Organizations.
RUSS MADDOX, age 59 - Mr. Maddox is a retired healthcare professional having
most recently served as President and Chief Operating Officer of HealthSouth
Corporation's Diagnostic Division. Mr. Maddox was Founder and President of Russ
Pharmaceuticals, Inc. Russ Pharmaceuticals was recognized in December, 1987, by
INC. magazine as one of the 500 fastest growing privately held companies in the
United States. In March 1989, the company was acquired by Ethyl Corporation of
Richmond, Virginia. He has 30 years of executive level experience in the
healthcare industry. From January 1992, until May 1995, he served as Chairman of
the Board, President and Chief Executive Officer of Diagnostic Health
Corporation, an outpatient diagnostic imaging company. Mr. Maddox was named
Small Business Person of the Year in 1987 for the city of Birmingham and the
State of Alabama. He is very active in business and civic affairs throughout the
United States. Mr. Maddox is Chairman of the Board of Directors of Cebert
Pharmaceuticals. He is a member of the Board of Directors of Imageon Solutions,
Inc. and currently serves on the University of Alabama at Birmingham's Research
Foundation Board, as well as the Board of the American Sports Medicine
Institute. He has served on the Board of Directors of MedPartners, Inc.,
Oclassen Pharmaceuticals, Inc., North Hampton Medical, Bradford Health Service,
and Scandipharm Pharmaceuticals.
ARGIL J. WHEELOCK, M.D., age 52 - Dr. Wheelock has served as Chairman and CEO at
HealthTronics since July 1, 1996. Dr. Wheelock was a practicing, board-certified
urologist in Chattanooga, Tennessee from 1979 until 1996. Since July 1, 1996 he
has worked exclusively as chief executive officer of HealthTronics. From
November, 1994 until June 30, 1996, he worked for Phymatrix, a NASDAQ listed
company that specializes in physician practice management, in the Lithotripsy
Division. From July, 1991, until November, 1994, he was vice president in charge
of Lithotripsy Services at Coram Healthcare, a NYSE listed company engaged in
home health care. Dr. Wheelock is the president, a director and a shareholder of
NGST, a Tennessee corporation engaged in mobile Lithotripsy through
partnerships; a shareholder of Cobb Regional Lithotripter Services, Inc.; the
managing general partner of TennGa Stone Group Two; the Chief Manager of Tenn-Ga
Prostate; a minority partner in TennGa Stone Group Two; and the chairman and
president of Florida Lithology, Inc., a Florida corporation engaged in providing
Lithotripsy services through a limited partnership.
JOHN F. WARLICK, age 38 - Mr. Warlick has served as executive vice president of
HealthTronics since December 1, 1996. Mr. Warlick, who holds a B.S. in Financial
Management from Clemson University, was the vice president of Sales for, the
past president of and a director of Servicetrends, Inc., from April, 1991 until
September, 1996. Prior to this, he was the Sales operations manager of Dornier
Medical Systems, from 1985 until 1988, the vice president of Sales for Energy
Four, from 1989 until 1991, and the president of OssaTronics, our predecessor,
from its inception.
JOACHIM VOSS, age 60 - Mr. Voss, a resident of Germany, has an engineering
degree from the Engineering School of Bielefeld, Germany. With a background of
twenty-five years in marketing and engineering of high technology products for
aerospace and medical application, he worked from
4
<PAGE> 8
1989 through 1996 as managing director and as marketing director of HMT, the
corporation that developed and manufactures both the LithoTron lithotripter and
the OssaTron orthopedic lithotripter. Mr. Voss has now retired from his active
role in HMT, but still works as a consultant to HMT and its German affiliate
company.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has established two standing committees: an
Audit Committee and a Compensation Committee. The Board of Directors does not
have a nominating committee.
The Audit Committee recommends to the Board of Directors the engagement
of the independent auditors of the Company and reviews with the independent
auditors the scope and results of the audits, reviews the adequacy and
effectiveness of the Company's internal controls, reviews the quality and
integrity of the Company's annual and interim external financial reports,
reviews the professional services furnished by the independent auditors to the
Company and handles any other matters the Board of Directors deems appropriate.
Members are Messrs. Maddox, Brown and Burke. The Audit Committee met two times
in 1999.
The Compensation Committee reviews and approves all salary
arrangements, including annual and long-term incentive awards and other
remuneration, for officers of the Company. It also is responsible for
administration of the Company's stock option and restricted stock plans,
incentive plans, and certain other compensation plans. Members are Messrs.
Burke, Maddox and Wheelock. The Compensation Committee met two times in 1999.
In 1999, the Board of Directors held four meetings. Each director
attended at least 75 percent of the total of all meetings of the Board and each
committee on which such director served.
COMPENSATION OF DIRECTORS
The Company granted Russ Maddox options to purchase 100,000 shares when
he agreed to become a director. The options are exercisable at $6.00 per share
and vest in approximately equal amounts over three years. Otherwise, directors
are not compensated for service on the board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND OFFICERS
The number of shares of Company Stock owned beneficially by each person
who holds greater than 5% of the Company's stock, by each director, each nominee
for director, and each other "named executive officer" (see "Executive
Compensation - Summary of Cash and Certain Other Compensation" below) and by all
directors and named executive officers as a group, as of March 15, 2000, is set
forth in the table below. Unless otherwise indicated, all persons shown in the
table have sole voting and investment power with regard to the shares shown.
[TABLE ON FOLLOWING PAGE]
5
<PAGE> 9
<TABLE>
<CAPTION>
Percentage of
Name of Owner and Current Address Amount of Beneficial Ownership class
- --------------------------------- ------------------------------ -------------
<S> <C> <C>
Argil Wheelock, MD 1,528,800 shares 14.12
1841 West Oak Parkway, Suite A
Marietta, GA 30062
John F. Warlick 1,220,800 shares 11.36
1841 West Oak Parkway, Suite A
Marietta, GA 30062
Ty Warlick 1,220,800 shares 11.36
1841 West Oak Parkway, Suite A
Marietta, GA 30062
Roy S. Brown 940,138 shares 8.74
1841 West Oak Parkway, Suite A
Marietta, GA 30062
Joachim Voss 400,000 shares 3.73
Garlstorfer Str. 5, Egestorf, D-21272
Germany
Russ Maddox 70,000 shares 0.65
1841 West Oak Parkway, Suite A
Marietta, GA 30062
Jon Burke 75,000 shares 0.70
1841 West Oak Parkway, Suite A
Marietta, GA 30062
Scott Cochran 156,342 shares 1.46
1841 West Oak Parkway, Suite A
Marietta, GA 30062
John House 426,300 shares 3.98
1841 West Oak Parkway, Suite A
Marietta, GA 30062
Marie Marlow 38,000 shares 0.28
613 7th Street, NE
Washington, DC 20002
HMT Group 1,850,100 shares 17.26
Bachstrasse 8, CH-8280 Kreuzlingen
Switzerland
House Group 1,274,500 shares 11.89
6750 N. McArthur Boulevard
Suite 209
Irving, TX 75039
All officers and directors as a group - 4,892,980 shares 44.71
10 persons
</TABLE>
Dr. Wheelock's beneficial ownership includes presently exercisable
options to purchase up to 90,000 shares of Company stock at a purchase price of
$1.00 per share and 20,000 shares at $8.50 per share.
Mr. Warlick's beneficial ownership includes presently exercisable
options to purchase up to 19,000 shares of Company stock at a purchase price of
$1.00 per share and 10,000 shares at $8.50 per share. 1,187,800 of the shares
shown in the table are owned of record by Ty Warlick, Mr. Warlick's wife and
3,000 shares are owned of record by Mr. Warlick's children. Mr. Warlick
disclaims beneficial ownership of any of the shares owned by Ty Warlick or his
children.
6
<PAGE> 10
Ms. Warlick's beneficial ownership includes presently exercisable
options to purchase up to 19,000 shares of Company stock at a purchase price of
$1.00 per share and 10,000 shares at $8.50 per share held by her spouse, Mr.
Warlick. 1,000 of the shares shown in the table are also owned of record by Ms.
Warlick's spouse. Ms. Warlick disclaims beneficial ownership of any of the
shares owned by Mr. Warlick.
Mr. Brown's beneficial ownership includes presently exercisable options
to purchase up to 29,000 shares of Company stock at a purchase price of $1.00
per share and 15,000 shares at a purchase price of $8.50.
Ms. Marlow's beneficial ownership includes presently exercisable
options to purchase up to 10,000 shares of Company stock at a purchase price of
$1.00 per share and 5,000 shares at a purchase price of $3.00 per share.
The HMT Group consists of a group of shareholders who are party to a
stock voting agreement. The agreement was entered into on March 15, 1999,
amended and restated as of April 26, 1999 and has no termination date. The
agreement provides that each member shall vote his shares as a block with the
other members, as determined by vote of a majority of the members. The following
are the members of the HMT Group: Karl Heinz Restle, Werner Schwarze, Walter
Uelbelacker and Joachim Voss and each can be contacted at the address listed in
the table.
The House Group consists of a group of shareholders who are party to a
stock voting agreement. The agreement was entered into on September 30, 1998 and
terminates on September 30, 2003. The agreement appoints John House, M.D. as
voting trustee and gives him the exclusive right to vote any and all shares
received or to be received by the members. No other voting rights or powers are
given.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of filings with the Securities and Exchange
Commission and written representations that no other reports were required, the
Company believes that all of the Company's directors and executive officers
complied with the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934 during 1999.
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS
The name and positions of the Company's executive officers are set
forth below.
<TABLE>
<CAPTION>
Name Position Held
---- -------------
<S> <C>
Argil J. Wheelock, MD chairman and CEO, since July 1, 1996.
Roy S. Brown president and COO, since May 31, 1996.
John F. Warlick executive vice president, since December 1, 1996.
Scott Cochran secretary/treasurer, since May 31, 1996.
Marie Marlow vice president of clinical and regulatory affairs,
since September 1, 1996.
Victoria Beck chief financial officer, since August 1, 1997.
</TABLE>
7
<PAGE> 11
BIOGRAPHICAL INFORMATION
Please see the biographical information under the "Directors" section
for the biographical information of Messrs. Wheelock, Brown, Warlick and
Cochran.
VICTORIA BECK, age 44 - Ms. Beck, a certified public accountant, graduated from
Georgia State University in 1981 with a degree in accounting. From 1982 until
mid 1987 she worked for the international accounting firm of Price Waterhouse.
From mid 1987 until mid 1994 she was the controller of Miller/Zell, a Georgia
company engaged in the manufacturing and design of visual merchandising systems.
From mid 1994 until July of 1997, Ms. Beck practiced accounting as a consultant.
MARIE MARLOW, age 46 - From May of 1995 until August, 1996, she served as a
Technical Advisor for Quintiles/BRI of Rockville, Maryland, a leading consultant
and evaluation entity to the medical industry with respect to FDA regulatory and
product study issues. Prior to this she served as: director of Regulatory and
Clinical Affairs for Cambridge Heart, Inc. of Bedford, Massachusetts, February
of 1994 to May, 1995; director of Regulatory Affairs for Bard Electrophysiology,
a division of C.R. Bard, Inc. of Billerica, Massachusetts, a NYSE traded company
primarily engaged in the field of medical equipment and related technology;
September, 1993 until February, 1994; and director of Clinical and Regulatory
Affairs for Intra-Sonix, Inc. of Burlington, Massachusetts, a Massachusetts
based start-up company which developed an integrated ultrasound and laser device
for medical purposes, June, 1989 to August, 1993. Ms. Marlow holds a diploma in
Nursing from the California Hospital School of Nursing - Now the USC School of
Nursing.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each of the four other executive officers whose
compensation exceeded $100,000 for the fiscal year ended December 31, 1999
(hereafter referred to as the named executive officers):
8
<PAGE> 12
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
----------------------------------------------------------------- ------------
Securities
Other Annual Underlying
Name & Principal Salary Bonus Compensation Options
Position Year ($) ($) ($) (#)
---------------- ----------- ------- ----- ------------ -----------
<S> <C> <C> <C> <C> <C>
Argil J. Wheelock, fiscal year 102,018 4,487 1,902 20,000
MD ended
chairman & CEO 12/31/98
Roy S. Brown fiscal year 100,116 6,127 1,352 15,000
president & COO ended
12/31/98
John F. Warlick fiscal year 6,367 1,902 10,000
executive vice ended 102,018
president 12/31/98
Marie Marlow fiscal year 112,630 0 0 0
vice president ended
12/31/98
</TABLE>
In addition to their annual remuneration, executive officers of ours
who are also employees may be entitled to participate in our 401(k) plan. These
amounts are shown in the "Bonus" column above. Also shown in the "Bonus" column
are valuations for insurance paid by us for Messrs. Wheelock, $1,776, Brown,
$1,389 and Warlick, $1,750.
Messrs. Brown and Warlick received car allowances of $7,250 and $6,000
in 1999.
STOCK OPTIONS GRANTED
The following table contains information concerning the grant of stock
options during 1999 to the named executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
[INDIVIDUAL GRANTS]
<TABLE>
<CAPTION>
Number of Percent of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees and Exercise or
Name and Title (#) Others base Price Expiration Date
- -------------- ------------ ---------------- ----------- ---------------
<S> <C> <C> <C> <C>
Argil Wheelock, CEO 20,000 10.00% $8.50 12/31/2009
Roy Brown, President 15,000 7.00% $8.50 12/31/2009
and COO
John Warlick, Executive
Vice President 10,000 5.00% $8.50 12/31/2009
</TABLE>
9
<PAGE> 13
The following chart details the exercise of any outstanding options and
the number and value of unexercised stock options.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options/SARs Options/SARs
Acquired at FY-End at FY-End
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
---- -------- -------- -------------- -----------------
<S> <C> <C> <C> <C>
Argil J. Wheelock, MD, chairman & CEO 0 0 110,000/0 $675,000/$0
Roy S. Brown, president & COO 0 0 44,000/0 $217,500/$0
John F. Warlick, executive vice president 0 0 29,000/0 $142,500/$0
Marie Marlow, vice president 0 0 15,000/75,000 $102,500/$412,500
</TABLE>
APPROVAL OF THE STOCK OPTION PLAN
(PROPOSAL NO. 2)
THE HEALTHTRONICS STOCK OPTION PLAN - 2000
The Board of Directors has adopted, subject to approval of the
Company's shareowners, the HealthTronics Stock Option Plan - 2000 (the "Option
Plan"). The Option Plan will become effective upon the approval by the holders
of a majority of the Company Stock present and entitled to vote at the Annual
Meeting. The following summary description of the Option Plan is qualified in
its entirety by reference to the full text of the Option Plan attached as
Appendix A to this Proxy Statement. Options for a total of 1,000,000 shares of
Company Stock will be available to be granted under the Option Plan. If for any
reason any Option granted under the Option Plan terminates without the issuance
of shares, all shares subject to such Option shall again be available for
issuance under the Option Plan. Options may be granted to any employee,
director, or other person as to where the Board of Directors determines that
making such grant is in the best interests of the Company.
The Option Plan will be administered, and all decisions about grants
and terms of grant will be made, by the Board of Directors, or by a committee or
the CEO pursuant to authority delegated by the Board of Directors.
No options granted under the Option Plan will be transferable other
than by will or the laws of descent and distribution. Options granted under the
Option Plan will vest upon the occurrence of certain events constituting a
change in control of the Company.
10
<PAGE> 14
Options may be issued as non-qualified options or incentive stock
options for tax purposes. An optionee will not recognize any taxable income at
the time of grant of a nonqualified option. Upon exercise of a nonqualified
option, the optionee will recognize ordinary income for tax purposes, measured
by the excess of the then fair market value of the shares over the exercise
price. The Company will be entitled to a deduction in the same amount as the
ordinary income recognized by the optionee. For an incentive stock option,
income is not recognized by the optionee and a deduction is not available to the
Company until the stock acquired is sold. Income recognized by an optionee will
be subject to tax withholding.
The Company has the right to deduct amounts necessary to satisfy tax
withholding obligations from any amounts in any form (including shares)
otherwise due to the optionee from the Company.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE
PROPOSAL TO ADOPT THE STOCK OPTION PLAN.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL NO. 3)
The Board of Directors of the Company, upon the recommendation of the
Audit Committee, has appointed the firm of Ernst & Young LLP to serve as
independent auditors of the Company for the fiscal year ending December 31,
2000, subject to ratification of this appointment by the shareholders of the
Company at the Annual Meeting. Ernst & Young LLP is considered by management of
the Company to be well qualified. The Company has been advised by that firm that
neither it nor any member thereof has any financial interest, direct or
indirect, in the Company or any of its subsidiaries in any capacity.
Representatives of Ernst & Young LLP will be present at the Annual
Meeting, where they will have an opportunity to make a statement, if they desire
to do so, and will be available to respond to appropriate questions.
If the shareholders do not ratify the appointment of Ernst & Young LLP,
the Board of Directors will reconsider the appointment.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE
PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
OF THE COMPANY FOR THE 2000 FISCAL YEAR.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Director nominations and other proposals of shareholders intended to be
presented at the 2001 Annual Meeting of Shareholders must be made in writing and
received by the Company on or before December 25, 2000, to be eligible for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting. If not received within such time period, director nominations and other
shareholder proposals may be submitted to shareholders at the 2001 Annual
Meeting (although excluded from the Company's proxy statement and form of proxy
relating to that meeting) only if submitted in writing in accordance with the
bylaws of the Company and received by the Company not less than 30 days nor more
than 60 days prior to the 2001 Annual Meeting. All shareholder proposals should
be submitted by certified mail, return receipt requested, to the Chief Financial
Officer of the Company, 1841 West Oak Parkway, Suite A, Marietta, GA 30062.
11
<PAGE> 15
OTHER MATTERS
Management does not know of any matters other than those referred to in
the accompanying notice of the Annual Meeting of Shareholders that may properly
come before the meeting or any adjournments thereof. As to any other matters
that may properly come before the meeting, it is intended that all properly
executed proxies delivered pursuant to this solicitation will be voted on any
such matters in accordance with the discretion of the persons named on the
enclosed proxy.
ARGIL J. WHEELOCK
Chairman
Marietta, Georgia
April 24, 2000
------------
THE COMPANY'S 1999 ANNUAL REPORT, WHICH INCLUDES AUDITED FINANCIAL
STATEMENTS, HAS BEEN MAILED TO SHAREHOLDERS OF THE COMPANY. THE ANNUAL REPORT
DOES NOT FORM ANY PART OF THE MATERIAL FOR THE SOLICITATION OF PROXIES.
------------
12
<PAGE> 16
APPENDIX A
HEALTHTRONICS, INC.
STOCK OPTION PLAN - 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section No. Page No.
<S> <C> <C>
1. Establishment and Purpose of the Plan.................................................................A-2
2. Definitions...........................................................................................A-2
3. Eligibility...........................................................................................A-3
4. Plan Administration...................................................................................A-3
5. Shares Subject to the Plan............................................................................A-3
6. Types of Grants.......................................................................................A-3
7. Options...............................................................................................A-3
8. Adjustments Upon Changes in Capitalization............................................................A-4
9. Termination and Amendment.............................................................................A-4
10. Non-Assignability.....................................................................................A-4
11. Exercise by Estate....................................................................................A-4
12. No Guarantee of Continued Employment..................................................................A-4
13. Change of Control.....................................................................................A-4
14. Governing Law.........................................................................................A-5
</TABLE>
A-1
<PAGE> 17
HEALTHTRONICS, INC. STOCK OPTION PLAN
1. Establishment and Purpose of the Plan. The purpose of this
Plan is to provide a flexible means of compensation and motivation for
outstanding performance by employees of the Company, directors of the Company,
and certain other persons to further the growth and profitability of the
Company.
2. Definitions.
Board or Board of Directors. The Board of Directors of the
Company.
Common Stock. The common stock of the Company.
Committee. A compensation committee comprised of two or more
"non-employee directors" within the meaning of Rule 16b-3.
Company. HealthTronics, Inc., a corporation organized under
the laws of the State of Georgia, and any successor or transferee of
substantially all of its business or assets.
Employee. A full-time key employee of the Company or a
Subsidiary, including an officer who is such an employee.
Fair Market Value. The fair market value of a share of Common
Stock as of such date as determined by the Board of Directors.
Incentive Stock Option. Any Option intended to meet the
requirements of an incentive stock option as defined in Section 422 of the
Internal Revenue Code of 1986, as amended.
Non-Qualified Stock Option. Any Option not intended to be an
Incentive Stock Option.
Option. An option to purchase Common Stock granted under the
Plan, including both an Incentive Stock Option and a Non-Qualified Stock Option.
Person. An individual, a partnership, a corporation, or any
other private, governmental or other entity.
Plan. The HealthTronics, Inc. Stock Option Plan herein set
forth, as the same may from time to time be amended.
Recipient. Any person who is granted an Option under this
Plan.
Rule 16b-3. Rule 16b-3 under the Securities Exchange Act of
1934, as amended, and any successor rule or regulation.
A-2
<PAGE> 18
3. Eligibility. A grant under this Plan may be made to any
Employee, any director of the Company, or any other person as to whom the Board
of Directors determines that making such grant is in the best interests of the
Company; provided, however, that no grant may be made to a director or officer
of the Company except pursuant to an exemption from Section 16(b) of the
Securities Exchange Act of 1934 as provided under Rule 16b-3, if applicable.
4. Plan Administration. This Plan shall be administered by the
Board of Directors, or by the Committee, pursuant to authority delegated by the
Board of Directors (references to the Board of Directors may include the
Committee where appropriate). The Board of Directors or the Committee may
delegate to the CEO the authority to grant options to Employees, when such
authority would not jeopardize the availability of an exemption pursuant to Rule
16b-3. The Board of Directors shall have full power to interpret and administer
this Plan and full authority to act in selecting the grantees and in determining
type and amount of grants, the terms and conditions of grants, and the terms of
agreements which will be entered into with grantees governing such grants. The
Board of Directors shall have the power to make rules and guidelines for
carrying out the Plan and to make changes in such rules and guidelines from time
to time as it deems proper. Any interpretation by the Board of Directors of the
terms and provisions of the Plan and the administration thereof and all action
taken by the Board of Directors shall be final and binding.
5. Shares Subject to the Plan. Subject to adjustment as provided
in Section 8, the total number of shares of Common Stock available for grant
under this Plan shall be up to 1,000,000 shares of Common Stock of the Company.
Shares of Common Stock issued hereunder may consist, in whole or in part, of
authorized and unissued shares, treasury shares and shares previously issued and
re-acquired by the Company. If for any reason an Option terminates without the
issuance of any shares, then all shares subject to such Option, to the extent of
any such forfeiture, cancellation or termination, shall again be avail able for
issuance under this Plan.
6. Types of Grants. The Board of Directors may make such grants
under this Plan as in its discretion it deems advisable to effect the purpose of
the Plan, including without limitation grants of Incentive Stock Options and
Non-Qualified Stock Options. Such grants may be issued separately or in
combination, or in tandem, and additional grants may be issued in combination,
or in tandem, with grants previously issued under this Plan or otherwise. As
used in this Plan, references to grants in tandem shall mean grants consisting
of more than one type of grant where the exercise of one element of the grant
effects the cancellation of one or more other elements of the grant.
7. Options.
(a) Each Option shall have such terms and conditions as
the Board of Directors shall determine. A grantee shall have no rights of a
shareholder with respect to any shares of Common Stock subject to an Option
unless and until a certificate for such shares shall have been issued.
(b) The Option exercise price shall be paid in full at
the time of exercise. No common stock shall be issued until full payment has
been received. Payment may be made in cash or, with the prior approval of and
upon the conditions established by the Board of Directors or the Committee (or
the CEO with respect to grants of Options approved by the CEO if no exemption
available under Rule 16b-3 would be jeopardized), by other means, including
delivery of shares of Common Stock owned by the Recipient.
(c) Subject to the terms of an Option and any other
provisions of this Plan, each Option shall have a term of ten years.
A-3
<PAGE> 19
(d) The Company shall, to the extent permitted by law,
have the right to deduct from any payment of any kind (including Common Stock
subject to an Option) otherwise due to the Recipient the amount of any federal,
state or local taxes required by law to be withheld with respect to the Common
Stock subject to a grant.
8. Adjustments Upon Changes in Capitalization. In the event of a
reorganization, recapitalization, stock split, stock dividend, issuance of
securities convertible into Common Stock, combination of shares, merger,
consolidation or any other change in the corporate structure of the Company
affecting Common Stock, or a sale by the Company of all or substantially all of
its assets, or any distribution to shareholders other than a normal cash
dividend, or any assumption or conversion of outstanding grants as a result of
an acquisition, and except as otherwise provided in an agreement between the
Recipient and the Company, the Board of Directors shall make appropriate
adjustment in the number and kind of shares authorized by the Plan and any
adjustments in outstanding grants as it deems appropriate.
9. Termination and Amendment.
(a) This Plan shall be effective upon its adoption by the
Board of Directors, provided that approval by the shareholders of the Company is
obtained within the 12 months preceding or following such adoption. It shall
remain in full force and effect unless terminated by the Board of Directors,
which shall have the power to amend, suspend, terminate or reinstate this Plan
at any time, provided that no amendment which increases the number of Shares of
Common Stock subject to the Plan, or materially adversely affects the
availability of an exemption pursuant to Rule 16b-3, if applicable, with respect
to this Plan, shall be made without shareholder approval.
(b) Without limiting the generality of the foregoing, the
Board of Directors may amend any limitations in this Plan if and when they are
no longer required under Rule 16b-3, if applicable, and to assure its continued
compliance with Rule 16b-3, if applicable.
(c) The Board of Directors may amend any outstanding
Option to the extent it deems appropriate, provided that the Recipient's consent
shall be required in the case of amendments adverse to the Recipient.
10. Non-Assignability. Unless otherwise specified in an agreement
between a Recipient and the Company, grants are not transferable other than by
will or the laws of descent and distribution. An Option is exercisable during
the Recipient's lifetime only by the Recipient or his or her guardian or legal
representative.
11. Exercise by Estate. Unless otherwise specified in an agreement
between a Recipient and the Company, the estate or other transferee of any
Recipient shall have 12 months from the date of such Recipient's death to
exercise any Option hereunder.
12. No Guarantee of Continued Employment. Nothing contained in
this Plan, or in any Option granted pursuant to the Plan, shall confer upon any
Recipient any right with respect to terms, conditions or continuance of
employment by the Company.
13. Change of Control.
(a) Any provision of this Plan to the contrary
notwithstanding, in the event of a change in control of the Company, unless (i)
otherwise directed by the Board of Directors by resolution adopted prior to
A-4
<PAGE> 20
such Change in Control or within ten days thereafter or (ii) otherwise provided
in the agreement entered into between the Company and a Recipient, all of the
grants under this Plan shall become completely vested and immediately
exercisable.
(b) For purposes of this Section 13, "Change in Control"
of the Company shall mean the occurrence of one or more of the following:
(i) acquisition in one or more transactions of
25 percent or more of the Common Stock by any Person, or by two or more Persons
acting as a group, other than directly from the Company;
(ii) acquisition in one or more transactions of
at least 15 percent but less than 25 percent of the Common Stock by any Person,
or by two or more Persons acting as a group (excluding officers and directors of
the Company), and the adoption by the Board of Directors of a resolution
declaring that a change in control of the Company has occurred;
(iii) a merger, consolidation, reorganization,
recapitalization or similar transaction involving the securities of the Company
upon the consummation of which more than 50 percent in voting power of the
voting securities of the surviving corporation(s) is held by Persons other than
former shareholders of the Company; or
(iv) 25 percent or more of the directors elected
by shareholders of the Company to the Board of Directors are persons who were
not listed as nominees in the Company's then most recent proxy statement (the
"New Directors"), unless a majority of the members of the Board of Directors,
excluding the New Directors, vote that no change of control shall have occurred
by virtue of the election of the New Directors.
(c) If grants shall become exercisable pursuant to this
Section 13, the Company shall use its best efforts to assist the grantees in
exercise of their grants in such a manner as to avoid liability to the Company
for profits under Section 16(b) of the Securities Exchange Act of 1934, as
amended, if applicable, as a result of such exercise, including (not by way of
limitation) explanation of and assistance in meeting the requirements of
Paragraph (e) of Rule 16b-3.
14. Governing Law. This Plan and all determinations made and
actions taken pursuant thereto shall be governed by the substantive laws and
procedural provisions of the State of Georgia without regard to principles of
conflicts of laws.
A-5
<PAGE> 21
HEALTHTRONICS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 2000
The undersigned, having received the Notice of Annual Meeting and the Proxy
Statement dated April 24, 2000, appoints Argil Wheelock and Roy Brown, and each
of them proxies, with full power of substitution and revocation to represent the
undersigned and to vote all shares of HealthTronics, Inc., which the undersigned
is entitled to vote at the Annual Meeting of Shareholders to be held on May 15,
2000, at the Wyndham Hotel, 1775 Parkway Place, N.W., Marietta, Georgia, at 2:00
p.m. local time, and any adjournment(s) thereof, as specified in this Proxy:
1. Election of Directors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
INSTRUCTION:TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE NOMINEES,
STRIKE A LINE THROUGH HIS NAME IN THE LIST BELOW:
<TABLE>
<S> <C>
ROY BROWN JON BURKE
SCOTT COCHRAN JOHN HOUSE
RUSS MADDOX ARGIL WHEELOCK
</TABLE>
2. Approve the Company's Stock Option Plan -- 2000
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Appointment of Ernst & Young LLP as independent auditors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Such other matters as may properly come before the meeting. This proxy will
be voted as specified above.
(SEE REVERSE SIDE)
(CONTINUED FROM OTHER SIDE)
The Board of Directors recommends affirmative votes for Items 1, 2 and 3,
and IF NOT CONTRARY SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1,
2 AND 3.
The Board of Directors knows of no other matters that may properly be or
which are likely to come or be brought before the meeting. However, if any other
matters are properly brought before the meeting, the persons named in this proxy
or their substitutes will vote in accordance with their best judgment on such
matters. THIS PROXY SHOULD BE DATED, SIGNED BY THE SHAREHOLDER AS THE NAME
APPEARS BELOW AND RETURNED PROMPTLY IN THE ENCLOSED ENVELOPE. JOINT OWNERS
SHOULD EACH SIGN PERSONALLY, AND TRUSTEES AND OTHERS SIGNING IN A REPRESENTATIVE
CAPACITY SHOULD INDICATE THEIR CAPACITY IN WHICH THEY SIGN.
Dated: , 2000
----------------------
------------------------------
Signature of Shareholder
------------------------------
Signature of Shareholder
PLEASE SIGN, DATE AND PROMPTLY RETURN IN THE ACCOMPANYING ENVELOPE -- NO POSTAGE
REQUIRED.
