<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
NOVAMETRIX MEDICAL SYSTEMS INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction
applies:
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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.*
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4) Proposed maximum aggregate value of transaction:
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*Set forth the amount on which the filing fee is calculated
and state how it was determined.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, schedule or registration statement no.:
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3) Filing party:
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4) Date Filed:
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<PAGE> 2
NOVAMETRIX MEDICAL SYSTEMS INC.
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 11, 1995
---------------
Wallingford, Connecticut
August 15, 1995
To the Holders of Common Stock
and Series B Preferred Stock of
NOVAMETRIX MEDICAL SYSTEMS INC.:
The Annual Meeting of the Stockholders of NOVAMETRIX MEDICAL SYSTEMS
INC. (the "Company") will be held at the Yankee Silversmith Inn, 1033 North
Colony Road, Wallingford, Connecticut on Monday, September 11, 1995 at 10:30
a.m. for the following purposes, as more fully described in the accompanying
Proxy Statement:
1. To elect two Class C directors of the Company for the
ensuing three years.
2. To consider and take action upon a proposal to ratify the
Board of Directors' selection of Ernst & Young LLP to serve as the Company's
independent auditors for the 1996 fiscal year.
3. To transact such other business as may properly come before
the Meeting or any adjournment or adjournments thereof.
The close of business on July 21, 1995 has been fixed by the Board of
Directors as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Meeting.
By Order of the Board of Directors,
Joseph A. Vincent, Secretary
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF YOU DO
NOT EXPECT TO BE PRESENT, PLEASE MARK, SIGN AND DATE THE ENCLOSED FORM OF PROXY
AND MAIL IT IN THE ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES, SO THAT YOUR VOTE CAN BE RECORDED.
<PAGE> 3
PROXY STATEMENT
This Proxy Statement, which will be mailed commencing on or
about August 15, 1995 to the persons entitled to receive the accompanying Notice
of Annual Meeting of Stockholders, is provided in connection with the
solicitation of Proxies on behalf of the Board of Directors of Novametrix
Medical Systems Inc. (the "Company") for use at the Annual Meeting of
Stockholders (the "Meeting") to be held on September 11, 1995, and at any
adjournment or adjournments thereof, for the purposes set forth in such Notice.
The Company's executive offices are located at One Barnes Industrial Park Road,
Wallingford, Connecticut 06492.
Any proxy may be revoked at any time before it is exercised by
written notice to the Secretary of the Company. The casting of a ballot at the
Meeting by a stockholder who may theretofore have given a proxy, or the
subsequent delivery of a proxy, will have the effect of revoking the initial
proxy.
Holders of record of issued and outstanding shares of (i)
common stock, $.01 par value ("Common Stock"), of the Company and (ii)
convertible preferred stock, Series B, $1.00 par value ("Series B Preferred
Stock"), of the Company, in each case as of July 21, 1995 (the "Record Date"),
will be entitled to notice of and to vote at the Meeting as described below. On
the Record Date, there were issued and outstanding 5,873,547 shares of Common
Stock and 100,000 shares of Series B Preferred Stock. The Company has no class
or series of stock outstanding and entitled to vote at the Meeting other than
the Common Stock and the Series B Preferred Stock.
Each share of Common Stock is entitled to one vote with
respect to each matter to be voted on at the Meeting. Each share of Series B
Preferred Stock is entitled to 11 votes with respect to each matter to be voted
on at the Meeting.
The presence, in person or by proxy, of the holders of a
majority of the voting power of all the outstanding shares of Common Stock and
Series B Preferred Stock entitled to vote at the Meeting is necessary to
constitute a quorum at the Meeting or any adjournments thereof. Directors of the
Company are elected by a plurality vote. Adoption of Proposal 2 will require the
affirmative vote of a majority of the voting power of the shares present at the
Meeting, in person or by proxy, and entitled to vote on that proposal.
Abstentions and broker non-votes (as hereinafter defined) will be counted as
present for the purpose of determining the presence of a quorum. For the purpose
of determining the vote required for approval of matters to be voted on at the
Meeting, shares held by stockholders who abstain from voting will be treated as
being "present" and "entitled to vote" on the matter and, thus, an abstention
has the same legal effect as a vote against the matter. However, in the case of
a broker non-vote or where a stockholder withholds authority from his proxy to
vote the proxy as to a particular matter, such shares will not be treated as
"present"
<PAGE> 4
2
and "entitled to vote" on the matter and, thus, a broker non-vote or the
withholding of a proxy's authority will have no effect on the outcome of the
vote on the matter. A "broker non-vote" refers to shares of Common Stock or
Series B Preferred Stock represented at the Meeting in person or by proxy by a
broker or nominee where such broker or nominee (i) has not received voting
instructions on a particular matter from the beneficial owners or persons
entitled to vote and (ii) the broker or nominee does not have discretionary
voting power on such matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The stockholders (including any "group," as that term is used
in Section 13(d)(3) of the Securities Exchange Act of 1934) who, to the
knowledge of the Board of Directors of the Company, owned beneficially more than
five percent of any class of the outstanding voting securities of the Company as
of July 1, 1995, and their respective shareholdings as of such date (according
to information furnished by them to the Company), are set forth in the following
table. Except as indicated in the footnotes to the table, all of such shares are
owned with sole voting and investment power.
<TABLE>
<CAPTION>
Title of Shares Percent
NAME AND ADDRESS Class Beneficially Owned of Class
---------------- -------- ------------------ --------
<S> <C> <C> <C>
Auric Partners Ltd. ................. Common 765,166 (1)(2) 11.7%
7575 East Fulton Road Series B
Ada, Michigan 49355 Preferred 60,000 (2) 60.0%
First Fidelity Incorporated ......... Common 716,182 (3)(4) 10.9%
55 Broad Street Series B
Newark, New Jersey 07102 Preferred 40,000 (4) 40.0%
William W. Nicholson ................ Common 418,222 (2) 7.1%
7575 East Fulton Road
Ada, Michigan 49355
William J. Lacourciere .............. Common 406,638 (5) 6.6%
One Barnes Industrial Park Road
Wallingford, Connecticut 06492
</TABLE>
<PAGE> 5
3
---------------
(1) Includes 666,666 shares issuable upon the conversion of 60,000 shares of
Series B Preferred Stock.
(2) Information as to the holdings of Auric Partners Ltd., a Michigan limited
partnership ("Auric"), and Mr. Nicholson is based upon a report on
Schedule 13D filed by such persons with the Securities and Exchange
Commission (the "Commission") and information provided to the Company by
Auric. Such report indicates that Amway Corp., a Michigan corporation
("Amway"), is the general partner of Auric and that Mr. Nicholson is a
limited partner of Auric and an officer of Amway. Each of Amway and Mr.
Nicholson disclaims beneficial ownership of the shares held by Auric.
Each of Auric and Amway disclaims beneficial ownership of the shares held
by Mr. Nicholson. Each of Auric, Amway and Mr. Nicholson also disclaims
beneficial ownership of the shares held by First Fidelity.
(3) Consists of (i) 444,444 shares issuable upon the conversion of 40,000
shares of Series B Preferred Stock and (ii) 271,738 shares issuable upon
the exercise of currently exercisable warrants held by First Fidelity
Incorporated ("First Fidelity"), a wholly owned subsidiary of First
Fidelity Bancorporation, which warrants will expire on May 23, 2000. The
Series B Preferred Stock and warrants were formerly held by First
Fidelity Bank, Connecticut ("FFB-CT"), formerly known as Union Trust
Company prior to its acquisition by First Fidelity Bancorporation.
(4) Information as to the holdings of First Fidelity is based upon a
report on Schedule 13D filed with the Commission by FFB-CT and Northeast
Bancorp, Inc., its parent corporation prior to the acquisition of FFB-CT
by First Fidelity Bancorporation. First Fidelity Bancorporation may be
deemed to be the indirect beneficial owner of the shares held by First
Fidelity by virtue of its ownership of all of the stock of First
Fidelity. Each of First Fidelity and First Fidelity Bancorporation
disclaims beneficial ownership of the shares held by each of Auric and
Mr. Nicholson.
(5) Includes (i) 304,078 shares issuable upon the exercise of currently
exercisable warrants held by Mr. Lacourciere, the Chairman of the Board,
President and Chief Executive Officer and a director of the Company,
which warrants will expire on December 28, 1999, (ii) 5,035 shares held
for the account of Mr. Lacourciere under the Employee Stock Ownership
Plan of the Company (the "ESOP"), (iii) 1,000 shares issuable upon the
exercise of Class A warrants and 1,000 shares issuable upon the exercise
of Class B warrants held by Mr. Lacourciere, which warrants are currently
exercisable and will expire on December 8, 1997 and December 8, 1999,
respectively, and (iv) 10,000 shares issuable upon the exercise of
currently exercisable options held by Mr. Lacourciere. Does not include
38,889 shares held by the ESOP with respect to which Mr. Lacourciere, as
co-trustee, has shared voting and investment power.
<PAGE> 6
4
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of July 1, 1995, the number
of shares of the outstanding voting securities of the Company beneficially owned
by each of the Company's directors and nominees for director, each executive
officer named in the Summary Compensation Table, and all directors and executive
officers as a group, according to information furnished by such persons to the
Company.
<TABLE>
<CAPTION>
TITLE OF SHARES PERCENT
NAME AND ADDRESS CLASS BENEFICIALLY OWNED OF CLASS
---------------- -------- ------------------ --------
<S> <C> <C> <C>
Thomas M. Haythe .............................. Common 113,540 (1) 1.9%
Director of the Company
William J. Lacourciere ........................ Common 406,638 (2) 6.6%
Chairman of the Board, President
and Chief Executive Officer of
the Company and Director of the
Company
Michael J. Needham ............................ Common 25,588 (3) *
Director of the Company
Photios T. Paulson ............................ Common 13,000 (4) *
Director of the Company
Steven J. Shulman ............................. -- -- --
Director of the Company
Joseph A. Vincent ............................. Common 53,811 (5) *
Vice President Finance, Chief
Financial Officer, Treasurer and
Secretary of the Company and
Director of the Company
All directors and executive ................... Common 646,637 (1) (2) 10.2%
officers as a group (3) (4)
(seven persons) (5) (6)
</TABLE>
---------------
* Less than one percent.
(1) Includes (i) 14,844 shares issuable upon the exercise of currently
exercisable warrants held by Mr. Haythe, which warrants will expire on
December 31, 1997, (ii) 10,744 shares issuable upon the exercise of
currently exercisable warrants held by Mr. Haythe, which warrants will
expire on March 10, 1999, (iii) 10,878 shares issuable upon the exercise
of currently exercisable warrants held by Mr. Haythe, which warrants will
expire on April 11, 2000, (iv) 15,995 shares issuable upon the exercise
of currently exercisable warrants held by Mr. Haythe, which warrants will
expire on November 30, 2000 and (v) 7,234 shares issuable upon the
exercise of currently exercisable warrants held by Mr. Haythe, which
warrants will expire on November 30, 2000.
<PAGE> 7
5
Does not include 38,889 shares held by the ESOP, with respect to which
Mr. Haythe, as co-trustee, has shared voting and investment power.
(2) Includes (i) 304,078 shares issuable upon the exercise of currently
exercisable warrants held by Mr. Lacourciere, which warrants will expire
on December 28, 1999, (ii) 5,035 shares held for the account of Mr.
Lacourciere under the ESOP, (iii) 1,000 shares issuable upon the exercise
of Class A warrants and 1,000 shares issuable upon the exercise of Class
B warrants held by Mr. Lacourciere, which warrants are currently
exercisable and will expire on December 8, 1997 and December 8, 1999,
respectively, and (iv) 10,000 shares issuable upon the exercise of
currently exercisable stock options held by Mr. Lacourciere. Does not
include 38,889 shares held by the ESOP with respect to which Mr.
Lacourciere, as co-trustee, has shared voting and investment power.
(3) Includes (i) 14,844 shares issuable upon the exercise of currently
exercisable warrants held by Mr. Needham, which warrants will expire on
December 31, 1997, and (ii) 10,744 shares issuable upon the exercise of
currently exercisable warrants held by Mr. Needham, which warrants will
expire on March 10, 1999.
(4) Includes 10,000 shares issuable upon the exercise of currently
exercisable warrants held by Mr. Paulson, which warrants will expire on
November 30, 2002.
(5) Includes (i) 2,519 shares held for the account of Mr. Vincent under the
ESOP, (ii) 200 shares issuable upon the exercise of Class A warrants and
200 shares issuable upon the exercise of Class B warrants held by Mr.
Vincent, which warrants are currently exercisable and will expire on
December 8, 1997 and December 8, 1999, respectively, and (iii) 48,334
shares issuable upon the exercise of currently exercisable stock options
held by Mr. Vincent. Does not include 38,889 shares held by the ESOP with
respect to which Mr. Vincent, as co-trustee, has shared voting and
investment power.
(6) Includes (i) 985 shares held for the account of Leslie E. Mace, Vice
President Engineering of the Company, under the ESOP, (ii) 24,535 shares
issuable upon the exercise of currently exercisable warrants held by Mr.
Mace, which warrants will expire on March 22, 2000, and (iii) 5,333
shares issuable upon the exercise of currently exercisable stock options
held by Mr. Mace.
<PAGE> 8
6
I. ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for the
division of the Board of Directors into three classes. The Class A directors of
the Company are Michael J. Needham, Steven J. Shulman and Joseph A. Vincent,
the Class B director is Photios T. Paulson, and the Class C directors and the
nominees for election identified below are Thomas M. Haythe and William J.
Lacourciere. Donald R. Gordon resigned as a Class B Director of the Company
effective August 15, 1994. The stockholders have elected each class to serve
for a full term of three years. If the number of directors is increased, the
increase will be apportioned among the classes so as to make all classes as
nearly equal in number as possible.
Two Class C directors will be elected at the Meeting to serve
for three years and until their respective successors shall have been elected
and qualified. The Class A directors will be elected at the 1996 Annual Meeting
and the Class B director will be elected at the 1997 Annual Meeting. It is the
intention of each of the persons named in the accompanying form of Proxy to vote
the shares represented thereby in favor of the nominees for Class C Director
named below unless otherwise instructed in such Proxy. In case either one of
the nominees is unable or declines to serve, such persons reserve the right to
vote the shares represented by such Proxy for another person duly nominated by
the Board of Directors in such nominee's stead. The Board of Directors has
no reason to believe that either of the nominees, Thomas M. Haythe and
William J. Lacourciere, will be unable or will decline to serve. The nominees
are each presently serving as Class C directors of the Company.
Information concerning the right of certain stockholders of
the Company to elect directors to the Board of Directors is set forth below.
Information concerning the nominees for election as
Class C directors and the other directors of the Company whose terms of office
will continue after the Meeting is set forth below. Such information was
furnished by them to the Company.
<PAGE> 9
7
NOMINEES FOR ELECTION
THOMAS M. HAYTHE (Class C director), age 55; Partner of Haythe & Curley
(law firm) since prior to 1989; Director: Isomedix Inc. (commercial
sterilization services), Guest Supply, Inc. (hotel guest room amenities and
accessories), Westerbeke Corporation (marine engine products), Ramsay
Health Care, Inc. (provider of psychiatric healthcare services) and Ramsay
Managed Care, Inc. (provider of managed mental healthcare services);
Director of the Company since March 1978.
WILLIAM J. LACOURCIERE (Class C director), age 55; Chairman of the Board of
the Company since September 1991; Chief Executive Officer of the Company
since February 1991; President of the Company since August 1986; Chief
Operating Officer of the Company from March 1983 to February 1991;
Executive Vice President of the Company from March 1983 to August 1986;
Executive Vice President Marketing of the Company from October 1982 to
March 1983; Vice President Domestic Sales of the Company from April 1980 to
October 1982; Director of the Company since October 1982.
OTHER DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE MEETING
MICHAEL J. NEEDHAM (Class A director), age 54; President and Chief
Executive Officer, SimEx Inc. (designer of entertainment attractions) since
March 1991; President, Helix Investments Limited (venture capital fund)
from prior to 1989 to February 1991; Director of the Company since August
1990 and from January 1980 to November 1989.
STEVEN J. SHULMAN (Class A director), age 43; Executive Vice President of
Value Health, Inc. (provider of specialty managed care programs) since
prior to 1989; President and Chief Executive Officer of American
PsychManagement, Inc. (wholly-owned subsidiary of Value Health, Inc.) since
October 1990; various managerial positions at CIGNA Healthplan, Inc.
(provider of group life and health insurance, including managed care
products) prior to 1989; Director of Value Health, Inc. and Ramsay Health
Care, Inc (provider of psychiatric healthcare services); Director of the
Company since November 1993.
JOSEPH A. VINCENT (Class A director), age 43; Vice President Finance of the
Company since August 1991; Treasurer of the Company since February 1991;
Chief Financial Officer and Secretary of the Company since April 1990;
Controller of the Company from September 1984 to April 1990; held various
positions with Picker International, Inc. (a manufacturer of medical
diagnostic instruments and supplies) from August 1974 until joining the
Company in August 1983; Director of the Company since February 1994.
<PAGE> 10
8
PHOTIOS T. PAULSON (Class B director), age 56; Vice President, bioAlliance,
SA, a privately-held French holding company, since January 1995; Chairman,
bio-Merieux Vitek Inc. (manufacturer of clinical diagnostic systems) since
July 1991; Senior Adviser-Health Care Industry and International Investment
Banking, Prudential Securities Inc. (investment bankers) since prior to
1989; Director of the Company since July 1992.
During the past fiscal year, the Board of Directors of the
Company met four times. All of the directors other than Mr. Gordon (due to his
resignation in August 1994) and Mr. Needham attended at least 75% of the
meetings of the Board of Directors.
During the fiscal year ended April 30, 1995, the Board of
Directors had a Stock Option Committee, whose members were Messrs. Shulman,
Haythe, Needham and Paulson, a Compensation Committee, whose members were
Messrs. Shulman, Haythe, Needham and Paulson, and an Audit Committee, whose
members were Messrs. Shulman and Haythe. Mr. Shulman was appointed by the Board
of Directors in September 1994 to fill each of the vacancies created on such
committees by the resignation of Mr. Gordon. The Board of Directors of the
Company does not have a Nominating Committee.
The Stock Option Committee administers the Company's stock
option plans, and its Employee Stock Purchase Plan. The Compensation Committee
makes recommendations to the Board of Directors regarding compensation and other
benefits to be paid to key employees of the Company. The Audit Committee is
authorized to review the results of the auditors' examinations and to make
recommendations with respect to accounting practices and procedures and internal
controls. The Audit Committee met one time, the Stock Option Committee met twice
and the Compensation Committee did not meet during the past fiscal year. All of
the directors other than Mr. Gordon (due to his resignation in August 1994) and
Mr. Needham attended at least 75% of the meetings of any committee on which such
directors served.
The directors and officers of the Company, other than
Messrs, Haythe, Needham, Paulson and Shulman, are active in its business on
a day-to-day basis. No family relationships exist between any of the directors
and officers of the Company.
On August 29, 1991, the Company issued an aggregate of 120,000
shares of Series B Preferred Stock to certain investors, of which 100,000 shares
are currently outstanding. In addition to their right to vote with the holders
of shares of Common Stock on all matters to be voted on at the Meeting, the
holders of record of the shares of Series B Preferred Stock, exclusively and as
a class, have the right to elect by majority vote one director to the Board of
Directors who is not a competitor of, supplier to or customer of the Company or
an affiliate of such a competitor,
<PAGE> 11
9
supplier or customer. To date, the holders of the Series B Preferred Stock have
not exercised this right. In addition, pursuant to an Underwriting Agreement
dated as of June 16, 1994 between the Company and Keane Securities Co., Inc.
("Keane"), the Company has agreed that until June 8, 1999, at the request of
Keane, the Company will use its best efforts to cause one individual designated
by Keane to be elected to the Board of Directors. To date, Keane has not made
such a request.
The Company's Certificate of Incorporation contains a
provision, authorized by Delaware law, which eliminates the personal liability
of a director of the Company to the Company or to any of its stockholders for
monetary damages for a breach of his fiduciary duty as a director, except in the
case where the director breached his duty of loyalty, failed to act in good
faith, engaged in intentional misconduct or knowingly violated a law, authorized
a payment of a dividend or approved a stock repurchase in violation of Delaware
corporate law, or obtained an improper personal benefit.
EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal
years ended April 30, 1995, May 1, 1994 and May 2, 1993 concerning the
compensation of the Company's Chief Executive Officer and other executive
officers of the Company whose total annual salary and bonus exceeded $100,000
during the fiscal year ended April 30, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------- ------------
Name and Fiscal All Other
Principal Position Year Salary Bonus Stock Options (#) Compensation (1)
------------------ ------ ------ ----- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
William J. Lacourciere 1995 $200,000 $25,000 30,000 $4,478
Chairman of the Board, 1994 166,346 0 0 3,126
President and Chief 1993 144,231 0 0 4,786
Executive Officer
Joseph A. Vincent 1995 100,000 15,000 20,000 2,651
Chief Financial Officer, 1994 100,000 0 0 1,916
Vice President Finance, 1993 84,731 0 10,000 2,352
Treasurer and Secretary
</TABLE>
---------------
(1) Includes contributions made by the Company on behalf of the named
executive officers to the ESOP, the Company's 401(k) Plan and a term life
insurance plan.
<PAGE> 12
10
The following table sets forth the grants of stock options to the
executive officers named in the Summary Compensation Table during the fiscal
year ended April 30, 1995.
<TABLE>
<CAPTION>
OPTION GRANTS IN THE FISCAL YEAR ENDED
APRIL 30, 1995
% of Total
Number of Securities Options Granted
Underlying Options to Employees in Exercise or
Name Granted (#) Fiscal Year Base Price ($/Sh) Expiration Date
---- -------------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
William J. Lacourciere 30,000(1) 13.3% $4.25 6/15/04
Joseph A. Vincent 20,000(1) 8.9% $4.25 6/15/04
</TABLE>
----------
(1) Options are currently exercisable as to 33 1/3% of underlying securities
and will become exercisable as to 66 2/3% and 100% of underlying securities
on June 15, 1996 and June 15, 1997, respectively.
The following table sets forth the number and value of compensatory
options and warrants held by the executive officers named in the Summary
Compensation Table at April 30, 1995. None of the executive officers named in
the Summary Compensation Table exercised any stock options during the fiscal
year ended April 30, 1995.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Options In-the-Money Options
at April 30, 1995 at April 30, 1995(1)
--------------------------------- --------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William J. Lacourciere 10,000 20,000 $ 11,250 $22,500
Joseph A. Vincent 48,334 16,666 157,709 24,166
</TABLE>
---------------
(1) In-the-money options are those where the fair market value of the
underlying Common Stock exceeds the exercise price thereof. The value of
in-the-money options is determined in accordance with regulations of the
Securities and Exchange Commission by subtracting the aggregate exercise
price of the options from the aggregate year-end market value of the
underlying Common Stock.
COMPENSATION OF DIRECTORS
The Company has a policy of paying its directors who are not
employees of the Company an annual fee of $2,500 plus $1,250 for each meeting of
the Board of Directors of the Company attended.
OTHER INFORMATION CONCERNING DIRECTORS, OFFICERS AND STOCKHOLDERS
The Company has entered into an employment agreement with
Mr. Lacourciere. The term of the employment agreement commenced as of
June 1, 1988 and is automatically extended on an annual basis, unless a notice
of non-extension is given by either party. The current term of the agreement,
as so extended, expires on December 31, 1995. The employment agreement provides
for an annual salary of $200,000, subject to increases based on increases
in the Consumer Price Index and additional increases at the discretion
of the Board of Directors. The agreement also provides, in the event of
the termination of Mr. Lacourciere's employment by the Company other than for
cause, for a cash payment to Mr. Lacourciere equal to three times his average
annual cash compensation during the five most recent taxable years
<PAGE> 13
11
of the Company ending before the date of such termination, less $1,000. In the
event Mr. Lacourciere's employment with the Company is terminated at this time,
such termination payment would be approximately $500,000. In the event of the
occurrence of certain change of control events involving the Company without the
approval of the Board of Directors, Mr. Lacourciere may terminate his employment
agreement with the Company during the one-year period following any such change
of control event and such termination of employment would entitle him to the
same termination payment. In the event the Board of Directors approves the
change of control event, Mr. Lacourciere may terminate his employment agreement
with the Company during the one-year period following any such change of control
event; however, Mr. Lacourciere will not be entitled to a termination payment.
Thomas M. Haythe, General Counsel and a director of the
Company, is a member of the law firm of Haythe & Curley, the Company's general
counsel. It is expected that Haythe & Curley will continue to render legal
services to the Company in the future.
On April 29, 1993, the Company and NTC Technology Inc., a
Delaware corporation which is a wholly-owned subsidiary of the Company ("NTC"),
entered into a First Amendment (the "First Amendment") with Union Trust, now
known as First Fidelity Bank, to the Third Amended and Restated Loan and
Security Agreement dated August 29, 1991 (the "Third Amended Credit Agreement")
with Union Trust. Under the First Amendment, Union Trust created a new term loan
facility in the amount of $3,400,000 (the "1993 Term Loan"), $2,400,000 of which
was used to reduce and prepay the principal amount outstanding under the
consolidated term loan created under the Third Amended Credit Agreement. On
June 16, 1994, simultaneously with the closing of the Public Offering, the
Company amended its agreement (the "1994 Bank Agreement") with Union Trust to
restructure the terms of the Company's term and line of credit loans. Under the
1994 Bank Agreement the Company has a term loan in the principal amount of
$2,500,000. The term loan is payable in 60 equal monthly installments and bears
interest at a base rate established by Union Trust plus 1/2 percent. In
addition, the Company's line of credit was amended and restated as a revolving
credit facility against which the Company may borrow the lesser of a specified
borrowing base or $2,500,000 through August 1995. The revolving credit facility,
amended in July 1995, has been extended and will terminate in August 1997.
Interest on the revolving credit facility as extended, will accrue at 2.5% over
monthly LIBOR rates.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who own more than
ten percent of the Company's Common Stock, to file with the Securities and
Exchange
<PAGE> 14
12
Commission initial reports of ownership and reports of changes in ownership of
Common Stock. Officers, directors and greater than ten percent stockholders are
required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) reports they file.
The Company notes that during the fiscal year ended April 30,
1995 Mr. Paulson failed to report two purchase transactions, which transactions
were reported to the Commission on Form 5, and David G. Barela, a former officer
of the Company, failed to report three sales transactions occurring subsequent
to his resignation from the Company, which transactions were reported to the
Commission on Form 5. To the Company's knowledge, based solely on a review of
the copies of such reports furnished to the Company and representations from
certain persons that no other reports were required, except as provided above,
all Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners have been complied with.
II. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Ernst &
Young LLP to serve as independent auditors for the Company for the fiscal year
ending April 28, 1996. Such firm has examined the financial statements of the
Company since the Company's inception. The Board of Directors considers Ernst &
Young LLP to be eminently qualified.
Although it is not required to do so, the Board of Directors
is submitting its selection of the Company's auditors for ratification at the
Meeting in order to ascertain the views of stockholders regarding such
selection. If the selection is not ratified, the Board of Directors will
reconsider its selection.
The Board of Directors recommends that the Company's
stockholders vote FOR ratification of the selection of Ernst & Young LLP to
examine the consolidated financial statements of the Company and its
subsidiaries for fiscal 1996. It is the intention of the persons named in the
accompanying form of Proxy to vote the shares represented thereby in favor of
such ratification unless otherwise instructed in such Proxy.
A representative of Ernst & Young LLP will be present at the
Meeting with the opportunity to make a statement if such representative desires
to do so, and will be available to respond to appropriate questions.
<PAGE> 15
13
III. OTHER MATTERS
The Board of Directors of the Company does not know of any
other matters which may be brought before the Meeting. However, if any such
other matters are properly presented for action, it is the intention of the
persons named in the accompanying form of Proxy to vote the shares represented
thereby in accordance with their judgment on such matters.
MISCELLANEOUS
If the accompanying form of Proxy is executed and returned,
the shares represented thereby will be voted in accordance with the terms of the
Proxy, unless the Proxy is revoked. If no directions are indicated in such
Proxy, the shares represented thereby will be voted FOR the nominees proposed by
the Board of Directors in the election of two Class C directors, and FOR
ratification of the Board of Directors' selection of independent auditors for
the Company. Any Proxy may be revoked at any time before it is exercised. The
casting of a ballot at the Meeting by a stockholder who may theretofore have
given a Proxy, or the subsequent delivery of a Proxy, will have the effect of
revoking the initial Proxy.
All costs relating to the solicitation of Proxies will be
borne by the Company. Proxies may be solicited by officers, directors and
regular employees of the Company and its subsidiaries personally, or by mail,
telephone or telegraph, and the Company may pay brokers and other persons
holding shares of stock in their names or those of their nominees for their
reasonable expenses in sending soliciting material to their principals.
It is important that Proxies be returned promptly.
Stockholders who do not expect to attend the Meeting in person are urged to
mark, sign and date the accompanying form of Proxy and mail it in the enclosed
return envelope, which requires no postage if mailed in the United States, so
that their votes can be recorded.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1996
Annual Meeting of Stockholders of the Company must be received by the Company by
April 12, 1996 in order to be considered for inclusion in the Company's Proxy
Statement relating to such meeting.
<PAGE> 16
14
ANNUAL REPORT ON FORM 10-KSB
A copy of the Company's Annual Report on Form 10-KSB including
the financial statements for the fiscal year ended April 30, 1995, which is
required to be filed with the Securities and Exchange Commission, will be sent,
without charge, to stockholders to whom this Proxy Statement is mailed upon
written request to the Chief Financial Officer, Novametrix Medical Systems Inc.,
One Barnes Industrial Park Road, Wallingford, Connecticut 06492.
August 15, 1995
<PAGE> 17
NOVAMETRIX MEDICAL SYSTEMS INC.
PROXY - Annual Meeting of Stockholders - September 11, 1995
COMMON STOCK
The undersigned, a stockholder of NOVAMETRIX MEDICAL SYSTEMS INC., does
hereby appoint William J. Lacourciere and Joseph A. Vincent, or either of them,
with full power of substitution, the undersigned's proxies, to appear and vote
at the Annual Meeting of Stockholders to be held on September 11, 1995 at 10:30
A.M., local time, or at any adjournments thereof, upon such matters as may come
before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby instructs said proxies or their substitutes to vote
as specified below on the following matters and in accordance with their
judgment on other matters which may properly come before the Meeting.
1. Election of Class C Directors.
FOR both nominees listed below / /
WITHHOLD authority for both nominees listed below / /
(except as marked to the contrary below)
Thomas M. Haythe and William J. Lacourciere
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
________________________________________________________
2. Ratification of appointment of Ernst & Young LLP as independent
auditors for fiscal 1996.
FOR / / AGAINST / / ABSTAIN / /
The Board of Directors favors a vote "FOR" each item.
(Continued and to be Completed on Reverse Side)
<PAGE> 18
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS INDICATED AS TO ITEMS 1 OR 2 SUCH SHARES WILL BE VOTED FOR SUCH ITEMS.
IMPORTANT: Before returning this Proxy, please sign your name or names on the
line(s) below exactly as shown hereon. Executors, administrators, trustees,
guardians or corporate officers should indicate their full titles when signing.
Where shares are registered in the names of joint tenants or trustees, each
joint tenant or trustee should sign.
Dated___________________________, 1995
_________________________________(L.S.)
_________________________________(L.S.)
Stockholder(s) Sign Here
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued From Other Side)
<PAGE> 19
"5" FIRST FIDELITY INCORPORATED: 40,000 Preferred Shares (440,000
votes)
NOVAMETRIX MEDICAL SYSTEMS INC.
PROXY - Annual Meeting of Stockholders - September 11, 1995
SERIES B PREFERRED STOCK
The undersigned, a stockholder of NOVAMETRIX MEDICAL SYSTEMS INC., does
hereby appoint WILLIAM J. LACOURCIERE and JOSEPH A. VINCENT, or either of them,
with full power of substitution, the undersigned's proxies, to appear and vote
all shares of Series B Preferred Stock of the Company which the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held on September
11, 1995 at 10:30 A.M., local time, or at any adjournments thereof, upon such
matters as may properly come before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS INDICATED AS TO ITEMS 1 OR 2 SUCH SHARES WILL BE VOTED IN FAVOR OF
SUCH ITEMS.
The Board of Directors favors a vote "FOR" Items 1 and 2.
1. Election of Class C Directors.
FOR both nominees WITHHOLD authority to vote
listed below / / for both nominees listed below / /
Thomas M. Haythe and William J. Lacourciere
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
_______________________________________________________
2. Ratification of appointment of Ernst & Young LLP as independent auditors
for fiscal 1996.
FOR / / AGAINST / / ABSTAIN / /
(Continued and to be Completed on Reverse Side)
<PAGE> 20
The undersigned hereby instructs said proxies or their substitutes to vote as
specified above on each of the above matters and in accordance with their
judgment on any other matters which may properly come before the Meeting.
IMPORTANT: Before returning this Proxy, please sign your name or names on the
line(s) below exactly as shown hereon. Executors, administrators, trustees,
guardians or corporate officers should indicate their full titles when signing.
Where shares are registered in the names of joint tenants or trustees, each
joint tenant or trustee should sign.
Dated _______________________, 1995
___________________________________ (L.S.)
___________________________________ (L.S.)
Stockholder(s) Sign Here
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD USING THE ENCLOSED ENVELOPE.
(Continued From Other Side)
<PAGE> 21
"4" AURIC PARTNERS LTD.: 60,000 Preferred Shares (660,000 votes)
NOVAMETRIX MEDICAL SYSTEMS INC.
PROXY - Annual Meeting of Stockholders - September 11, 1995
SERIES B PREFERRED STOCK
The undersigned, a stockholder of NOVAMETRIX MEDICAL SYSTEMS INC., does
hereby appoint WILLIAM J. LACOURCIERE and JOSEPH A. VINCENT, or either of them,
with full power of substitution, the undersigned's proxies, to appear and vote
all shares of Series B Preferred Stock of the Company which the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held on September
11, 1995 at 10:30 A.M., local time, or at any adjournments thereof, upon such
matters as may properly come before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS INDICATED AS TO ITEMS 1 OR 2 SUCH SHARES WILL BE VOTED IN FAVOR
OF SUCH ITEMS.
The Board of Directors favors a vote "FOR" Items 1 and 2.
1. Election of Class C Directors.
FOR both nominees WITHHOLD authority to vote
listed below / / for both nominees listed below / /
Thomas M. Haythe and William J. Lacourciere
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
___________________________________________________
2. Ratification of appointment of Ernst & Young LLP as independent auditors
for fiscal 1996.
FOR / / AGAINST / / ABSTAIN / /
(Continued and to be Completed on Reverse Side)
<PAGE> 22
The undersigned hereby instructs said proxies or their substitutes to vote as
specified above on each of the above matters and in accordance with their
judgment on any other matters which may properly come before the Meeting.
IMPORTANT: Before returning this Proxy, please sign your name or names on the
line(s) below exactly as shown hereon. Executors, administrators, trustees,
guardians or corporate officers should indicate their full titles when signing.
Where shares are registered in the names of joint tenants or trustees, each
joint tenant or trustee should sign.
Dated _______________________, 1995
____________________________________(L.S.)
____________________________________(L.S.)
Stockholder(s) Sign Here
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD USING THE ENCLOSED ENVELOPE.
(Continued From Other Side)
