<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
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
Micro Therapeutics, 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:
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<PAGE> 2
MICRO THERAPEUTICS, INC.
2 GOODYEAR
IRVINE, CALIFORNIA 92618
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 25, 2000
TO THE STOCKHOLDERS OF MICRO THERAPEUTICS, INC.,
The 2000 Annual Meeting of Stockholders of Micro Therapeutics, Inc. (the
"Company"), will be held at 2 Goodyear, Irvine, California 92618 on May 25,
2000, at 10:00 a.m., for the following purposes as more fully described in the
accompanying Proxy Statement:
(1) To elect the following five nominees to serve as directors until
the next annual meeting of stockholders or until their successors
are elected and have qualified:
George Wallace Dick Allen
Kim Blickenstaff W. James Fitzsimmons
Wende Hutton
(2) To ratify the appointment of PricewaterhouseCoopers LLP as
independent auditors of the Company for the fiscal year ending
December 31, 2000; and
(3) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Only stockholders of record at the close of business on April 14, 2000
will be entitled to vote at the meeting or any adjournment or postponement
thereof.
By Order of the Board of Directors
/s/ George Wallace
------------------------------------
George Wallace
Chief Executive Officer President
and Director
Irvine, California
April 28, 2000
YOUR VOTE IS IMPORTANT. THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING
YOU SHOULD COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY. Any stockholder
present at the meeting may withdraw his or her proxy and vote personally on each
matter brought before the meeting. Stockholders attending the meeting whose
shares are held in the name of a broker or other nominee who desire to vote
their shares at the meeting should bring with them a proxy or letter from that
firm confirming their ownership of shares.
<PAGE> 3
MICRO THERAPEUTICS, INC.
2 GOODYEAR
IRVINE, CALIFORNIA 92618
---------------
PROXY STATEMENT
---------------
INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Micro Therapeutics, Inc., a
Delaware corporation (the "Company"), for use at its 2000 Annual Meeting of
Stockholders ("Annual Meeting") to be held on May 25, 2000, at 10:00 a.m., at 2
Goodyear, Irvine, California 92618. This Proxy Statement and the accompanying
proxy are being mailed to stockholders on or about April 28, 2000. It is
contemplated that this solicitation of proxies will be made primarily by mail;
however, if it should appear desirable to do so in order to ensure adequate
representation at the meeting, directors, officers and employees of the Company
may communicate with stockholders, brokerage houses and others by telephone,
telegraph or in person to request that proxies be furnished and may reimburse
banks, brokerage houses, custodians, nominees and fiduciaries for their
reasonable expenses in forwarding proxy materials to the beneficial owners of
the shares held by them. All expenses incurred in connection with this
solicitation shall be borne by the Company.
Holders of shares of common stock of the Company ("stockholders") who
execute proxies retain the right to revoke them at any time before they are
voted. Any proxy given by a stockholder may be revoked or superseded by
executing a later dated proxy, by giving notice of revocation to the Secretary,
Micro Therapeutics, Inc., 2 Goodyear, Irvine, California 92618, in writing prior
to or at the meeting or by attending the meeting and voting in person. A proxy,
when executed and not so revoked, will be voted in accordance with the
instructions given in the proxy. If a choice is not specified in the proxy, the
proxy will be voted "FOR" the nominees for election of directors named in this
Proxy Statement and "FOR" the ratification of PricewaterhouseCoopers LLP as the
Company's independent auditors.
VOTING SECURITIES
The shares of Common Stock, $.001 par value, constitute the only
outstanding class of voting securities of the Company. Only the stockholders of
the Company of record as of the close of business on April 14, 2000 (the "Record
Date"), will be entitled to vote at the meeting or any adjournment or
postponement thereof. As of the Record Date, there were 9,889,422 shares of
Common Stock outstanding and entitled to vote. No shares of the Company's
preferred stock, $.001 par value, were outstanding. A majority of shares
entitled to vote represented in person or by proxy will constitute a quorum at
the meeting. Each stockholder is entitled to one vote for each share of Common
Stock held as of the Record Date. Abstentions and broker non-votes are each
included in the determination of the number of shares present and voting for the
purpose of determining whether a quorum is present. Abstentions will be treated
as shares present and entitled to vote for purposes of any matter requiring the
affirmative vote of a majority or other proportion of the shares present and
entitled to vote. With respect to shares relating to any proxy as to which a
broker non-vote is indicated on a proposal, those shares will not be considered
present and entitled to vote with respect to any such proposal. Abstentions or
broker non-votes or other failures to vote will have no effect in the election
of directors, who will be elected by a plurality of the affirmative votes cast.
With respect to any matter brought before the Annual Meeting requiring the
affirmative vote of a majority or other proportion of the outstanding shares, an
abstention or broker non-vote will have the same effect as a vote against the
matter being voted upon.
<PAGE> 4
PROPOSAL ONE
ELECTION OF DIRECTORS
The Company's Bylaws, as amended, authorize a total of five directors.
Currently, there are five members of the Board of Directors. Unless otherwise
instructed, the proxy holders named in the enclosed proxy will vote the proxies
received by them for the five nominees named below. All of the nominees are
presently directors of the Company. If any nominee becomes unavailable for any
reason before the election, the enclosed proxy will be voted for the election of
such substitute nominee or nominees, if any, as shall be designated by the Board
of Directors. The Board of Directors has no reason to believe that any of the
nominees will be unavailable to serve.
The names and certain information concerning the five nominees for
election as directors are set forth below. THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES NAMED BELOW.
DIRECTORS
All members of the Company's Board of Directors hold office until the
next annual meeting of stockholders or until their successors are elected and
have qualified. Officers serve at the discretion of the Board of Directors.
The director nominees of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
George Wallace 41 Chief Executive Officer, President and
Director
Dick Allen 56 Director
Kim Blickenstaff 47 Director
W. James Fitzsimmons 43 Director
Wende Hutton 40 Director
</TABLE>
Mr. Wallace is a founder of the Company and has served as President and
Chief Executive Officer since the Company's formation in June 1993. From 1989 to
1993, Mr. Wallace was with Applied Medical Resources ("AMR") holding a number of
positions, the last of which was the General Manager of its Applied Vascular and
Applied Urology Divisions. AMR is a manufacturer of specialty surgical products
used in general, vascular and urologic surgery. From 1986 to 1989, Mr. Wallace
was Vice President of Marketing and Sales for Vaser, Inc., a laser angioplasty
company with peripheral and coronary laser angioplasty systems. From 1980 to
1986, Mr. Wallace held various positions in sales, sales management, marketing
and marketing management at Edwards Laboratories, a division of American
Hospital Supply and later Baxter International. Mr. Wallace holds a B.S. in
Marketing from Arizona State University.
Mr. Fitzsimmons has been a director of the Company since January 2000.
From 1997 to 1999, Mr. Fitzsimmons was the Senior Vice President and General
Manager of the Cardiac and Vascular Surgery Group of Guidant Corporation. From
1991 to 1997, Mr. Fitzsimmons was the President and Chief Executive Officer of
Endovascular Technologies, Inc., which develops minimally invasive therapeutic
devices and was acquired by Guidant Corporation in 1997. Mr. Fitzsimmons
currently sits on the board of directors of Vnus Medical Technologies, Inc.,
which develops therapeutic devices to treat Venus disease, and Broncus, Inc.
which is developing therapeutic medical devices to treat pulmonary disease. Mr.
Fitzsimmons holds an M.B.A. from Seattle University and a B.S. in Biology from
Seattle University.
Mr. Allen has been a director of the Company since June 1994. He is the
President of DIMA Ventures, Inc., a private investment firm providing seed
capital and board-level support for start-up companies in the healthcare field.
He was a founder of Caremark, Inc., a home infusion therapy company, and served
as a Vice President from its inception in 1979 until 1986. From 1968 to 1978,
Mr. Allen held various management positions
2
<PAGE> 5
with Baxter International. Mr. Allen also served as a Lecturer in Management at
the Stanford University Graduate School of Business from 1989 to 1992. He was a
founder and director of Pyxis Corporation (acquired by Cardinal Health Inc.) and
is the chairman of the board of Hoag Memorial Hospital Presbyterian and is a
member of the boards of several private companies. Mr. Allen holds a B.S. from
Yale University and an M.B.A. from Stanford University Graduate School of
Business.
Ms. Hutton has been a director of the Company since February 1995. From
July 1993 until March 1995, Ms. Hutton was a venture partner, and since March
1995 has been a general partner of Mayfield Fund VIII, a venture capital firm,
in Menlo Park, California. From March 1991 to January 1993 she was General
Manager of the Transgenic Laboratory products division of GenPharm
International, Inc., a biotechnology company. From August 1986 to March 1991,
Ms. Hutton was employed by Nellcor, Inc., where she held various senior
positions in international marketing and business development. Ms. Hutton is a
member of the boards of several private companies. Ms. Hutton holds a B.A. in
Human Biology from Stanford University and an M.B.A. from Harvard University
Graduate School of Business.
Mr. Blickenstaff has been a director of the Company since July 1997. Mr.
Blickenstaff is President, Chief Executive Officer, director and co-founder of
Biosite Diagnostics, Inc., a leading point-of care diagnostics company. Prior to
forming Biosite Diagnostics, Inc. in 1988, Mr. Blickenstaff held various
positions over a five year period with Hybritech, Inc. and was responsible for
developing business plans and financing strategies which resulted in raising $70
million to fund Hybritech's development of cancer diagnostic and therapeutic
products. Prior to joining Hybritech, Mr. Blickensatff held various management
positions with The Christiana Companies Inc., National Health Laboratories, and
Baxter Travenol Laboratories. Mr. Blickenstaff received his M.B.A. from the
Graduate School of Business at Loyola University in Chicago.
BOARD MEETINGS AND ATTENDANCE
The Board of Directors of the Company held four meetings during the
fiscal year ended December 31, 1999. Each incumbent Director attended at least
seventy-five percent (75%) of the aggregate of the number of meetings of the
Board and the number of meetings held by all committees of the Board on which he
or she served. There are no family relationships among any of the directors or
executive officers of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee and a Compensation
Committee. The Audit Committee is comprised of two directors selected by the
Board of Directors of the Company. The current members of the Audit Committee
are Kim Blickenstaff and Dick Allen. The Audit Committee is authorized to handle
all matters which it deems appropriate regarding the Company's independent
accountants and to otherwise communicate and act upon matters relating to the
review and audit of the Company's books and records, including the scope of the
annual audit and the accounting methods and systems to be utilized by the
Company. In addition, the Audit Committee also makes recommendations to the
Board of Directors with respect to the selection of the Company's independent
accountants. The Audit Committee held one meeting during the fiscal year ended
December 31, 1999.
The Compensation Committee is comprised of two directors selected by the
Board of Directors of the Company. The current members of the Compensation
Committee are Wende Hutton, Kim Blickenstaff and Dick Allen. The functions of
the Compensation Committee include advising the Board of Directors on officer
and employee compensation. The Board of Directors, based on input from the
Compensation Committee, establishes the annual compensation rates for the
Company's executive officers. The Compensation Committee held six meetings
during the fiscal year ended December 31, 1999.
The Company does not have a nominating committee. Instead, the Board of
Directors, as a whole, identifies and screens candidates for membership on the
Company's Board of Directors.
3
<PAGE> 6
OTHER EXECUTIVE OFFICERS
The other current executive officers of the Company are as follows:
Mr. Harold Hurwitz, 48, joined the Company in December 1997 as Chief
Financial Officer. From May 1997 until joining the Company, Mr. Hurwitz was
Chief Financial Officer of Opal Concepts, Inc. a privately held company in the
haircare industry. From February 1997 through April 1997, Mr. Hurwitz was a
partner with Scott, Bankhead & Co., a certified public accounting firm. From
September 1974 to October 1996, Mr. Hurwitz was an employee and partner with
Coopers & Lybrand L.L.P., a certified public accounting firm. Mr. Hurwitz holds
a B.A. in Economics from the University of California, Los Angeles.
Mr. William McLain, 50, joined the Company in September 1996 as Vice
President Operations. From January 1990 until joining the Company, Mr. McLain
held several positions at Applied Medical Resources, including Vice President of
Operations from January 1994 until January 1995, Director of Materials and
Planning, Director of Product Development for Laparoscopy and Director of
Process Development from January 1990 until January 1994. From 1976 to 1990, Mr.
McLain held various engineering and management positions with C.R Bard, American
Hospital Supply, and Allergan, Inc. Mr. McLain holds an M.B.A. from Pepperdine
University and a B.S. in Physics from the University of Colorado.
Mr. Earl Slee, 39, joined the Company in April 1998 as the Vice
President Research & Development. From August 1995 until 1998, Mr. Slee was
Vice-President Research and Development with Aequitron Medical, Inc., a
manufacturer of portable respiratory care devices. From June 1992 until August
1995, Mr. Slee was Director of Engineering with Instromedix, a manufacturer of
portable EKG monitors. From 1978 to 1992, Mr. Slee held various engineering and
management positions with Pfizer, Welch Allyn and Hughes Aircraft Co. Mr. Slee
holds an M.B.A. from the Tuck School of Business, Dartmouth College, an MSEE
from San Diego State University, and a B.A. in Physics from the University of
California, San Diego.
Mr. Kevin Daly, 43, joined the Company in April 1999. From April 1998 to
April 1999, Mr. Daly was the Director, Regulatory and Clinical Affairs of
Medtronic Interventional Vascular, a manufacturer of angioplasty catheters,
implants and related devices. From 1996 to 1998, Mr. Daly was the Director,
Regulatory Affairs/ Compliance Standards of InterVentional Technologies, Inc., a
manufacturer of cardiovascular devices. From December 1995 to June 1996, he
worked as a Regulatory Affairs Consultant. From 1994 through 1995, Mr. Daly was
the Vice President of AccuLase, Inc., a medical device manufacturer. Mr. Daly
holds a B.S. in Biology from Fairleigh Dickinson University.
4
<PAGE> 7
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation earned during the three
fiscal years ended December 31, 1997, 1998 and 1999 by the Company's Chief
Executive Officer and the four other most highly compensated executive officers
whose total salary and bonus during 1999 exceeded $100,000 (collectively, the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
-------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMP. (1)
--------------------------- ---- ---------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C>
George Wallace 1999 211,000 40,000 18,813
Chief Executive Officer and 1998 196,200 30,000
President 1997 173,333 25,000 25,000
William Gearhart (2) 1999 155,090 5,500 16,186
Vice President - Sales & Marketing 1998 149,299 20,000
1997 74,618 15,000 80,000
Harold Hurwitz 1999 145,800 20,000 13,125
Chief Financial Officer 1998 135,000 15,000
1997 11,250 50,000
William McLain 1999 139,150 22,000 13,125
Vice President - Operations 1998 125,125 15,000
1997 107,917 21,000
Kevin Daly (3) 1999 107,154 15,000 73,125
Vice President - Regulatory & 1998 -- -- --
Clinical Affairs 1997 -- -- --
</TABLE>
- -----------
(1) Does not reflect certain personal benefits, which in the aggregate are less
than 10% of each Named Executive Officer's salary and bonus.
(2) Mr. Gearhart resigned as an officer of the Company on October 14, 1999.
(3) Mr. Daly was hired on March 29, 1999.
5
<PAGE> 8
OPTION MATTERS
Option Grants. The following table sets forth certain information
concerning grants of options to each of the Company's Named Executive Officers
during the fiscal year ended December 31, 1999.
OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR (1) ($/SHARE) DATE
---- ----------- --------------- --------- ----------
<S> <C> <C> <C> <C>
George Wallace 18,813 4.30% $7.750 2/23/09
William Gearhart 16,186 3.70% $7.750 2/23/09
Harold Hurwitz 13,125 3.00% $7.750 2/23/09
William McLain 13,125 3.00% $7.750 2/23/09
Kevin Daly 73,125 16.71% $6.500 4/29/09
</TABLE>
(1) Options to purchase an aggregate of 437,624 shares of Common Stock were
granted to employees, including the Named Executive Officers during the
fiscal year ended December 31, 1999.
OPTION EXERCISES IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING EXERCISE
OPTIONS PRICE EXERCISE
NAME EXERCISED (#) REALIZED VALUE ($) ($/SHARE) DATE
---- ------------- ------------------ --------- --------
<S> <C> <C> <C> <C>
George Wallace 24,375 $177,645 $0.462 3/17/99
15,080 67,860 $5.250 10/25/99
1,625 15,093 $0.462 10/25/99
William McLain 29,250 127,676 $5.385 10/25/99
10,675 48,038 $5.250 10/25/99
</TABLE>
6
<PAGE> 9
The following table includes the number of shares covered by both
exercisable and unexercisable stock options as of December 31, 1999. Also
reported are the values for "in the money" options which represent the positive
spread between the exercise prices of any such existing stock options and the
fiscal year end price of the Company's Common Stock ($7.6875 per share).
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)
------------------------------ -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
George Wallace 21,060 37,673 $ 3,803 $ 20,378
William Gearhart 28,536 32,300 63,359 71,804
Harold Hurwitz 24,984 25,016 48,407 48,469
William McLain 3,742 16,333 8,792 38,814
Kevin Daly 10,000 63,125 11,875 74,961
</TABLE>
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Company entered into an employment agreement with Mr. Slee,
effective April 6, 1998, for a term expiring September 6, 2000, pursuant to
which he will serve as Vice President Research and Development. The employment
agreement provides for a base salary of One Hundred Forty-Five Thousand Dollars
($145,000) per year with annual raises to be determined by the Company. Mr. Slee
is also eligible to participate in incentive compensation and other employee
benefit plans established by the Company from time to time. Mr. Slee's
employment agreement provides for a severance benefit of One Hundred Fifty
Thousand Dollars ($150,000) if he is terminated without cause within the first
twelve months of his employment and such termination occurs within six months of
a change in control. The severance benefit is in addition to his current base
salary accrued through date of termination.
DIRECTORS' FEES
The Company's directors are not paid cash compensation for their
services on the Company's Board of Directors. All directors may be reimbursed
for certain expenses incurred for meetings of the Board of Directors which they
attended. Pursuant to the Company's 1996 Stock Incentive Plan, each non-employee
director shall receive an initial grant of 8,000 shares, vesting 25% immediately
and the remaining 75% over the following three years, plus an annual grant of
2,000 shares on each anniversary of such director's election, vesting 25%
immediately and the remaining 75% over the following three years. Accordingly,
in fiscal year 1999, Mr. Montgomery, Mr. Allen, Ms. Hutton and Mr. Blickenstaff
were each granted options to purchase 2,000 shares, and Mr. Fitzsimmons was
granted 8,000 shares in January of 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership of, and transactions in, the
Company's securities with the Securities and Exchange Commission and The Nasdaq
Stock Market. Such directors, executive officers and 10% stockholders are also
required to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely upon its review of the copies of Forms 3 and 4 and
amendments thereto furnished to the Company, or written representations that no
annual Form 5 reports were required, the Company believes that all
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<PAGE> 10
filing requirements under Section 16(a) of the Exchange Act applicable to its
directors, officers and any persons holding ten percent or more of the Company's
Common Stock were made with respect to the Company's fiscal year ended December
31, 1999.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
Set forth below is certain information as of March 10, 2000 regarding
the beneficial ownership of the Company's Common Stock by (i) any person who was
known by the Company to own more than five percent (5%) of the voting securities
of the Company, (ii) all directors and nominees, (iii) each of the Named
Executive Officers identified in the Summary Compensation Table, and (iv) all
current directors and executive officers as a group. Unless otherwise indicated,
the persons named in the table have sole voting and sole investment power with
respect to all shares beneficially owned, subject to community property laws
where applicable.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERS (1) OWNERSHIP (2) OF CLASS
----------------------------------------- -------------------- --------
<S> <C> <C>
Mayfield VII (3) 1,031,108 10.43%
Mayfield VII Management Partners
Mayfield Associates Fund II
Yogen K. Dalal
F. Gibson Myers, Jr.
Kevin A. Fong
William D. Unger
Wendell G. Van Auken
Michael J. Levinthal
A. Grant Heidrich, III
2800 Sand Hill Road
Suite 250
Menlo Park, California 94025
Abbott Laboratories 1,212,628 12.26%
100 Abbott Park Road
Abbott Park, IL 60064-3500
Guidant Corporation (4) 535,385 5.16%
111 Monument Circle, 29th Floor
Indianapolis, Indiana 46204
George Wallace (5) 362,793 3.66%
Dick Allen (6) 69,430 *
Wende Hutton (7) 9,500 *
Kim Blickenstaff (8) 7,500 *
William McLain (9) 69,963 *
Harold Hurwitz (10) 54,647 *
William Gearhart (11) 46,058 *
Kevin Daly (12) 29,382 *
</TABLE>
8
<PAGE> 11
<TABLE>
<S> <C> <C>
W. James Fitzsimmons (13) 2,000 *
Pequot Capital Management, Inc. (14) 1,369,000 13.85%
All executive officers and 605,215 6.02%
directors as a group (8 persons) (15)
</TABLE>
- -------------
*Less than 1%
(1) Unless otherwise indicated, the business address of each stockholder is c/o
Micro Therapeutics, Inc., 2 Goodyear, Irvine, California 92618.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock subject
to options, warrants and convertible notes currently exercisable or
convertible, or exercisable or convertible within 60 days of March 10,
2000, are deemed outstanding for computing the percentage of the person
holding such options but are not deemed outstanding for computing the
percentage of any other person. Except as indicated by footnote, and
subject to community property laws where applicable, the persons named in
the table have sole voting and investment power with respect to all shares
of Common Stock shown as beneficially owned by them.
(3) Based on information set forth in a Schedule 13G, filed with the Securities
and Exchange Commission on February 17, 1998. Includes (i) 987,854 shares
owned by Mayfield VII of which Mayfield VII Management Partners is the sole
General Partner and (ii) 43,254 shares owned by Mayfield Associates Fund
II. The individuals listed above are General Partners of Mayfield VII
Management Partners and are General Partners of Mayfield Associates Fund
II. Such individuals may be deemed to have shared voting and dispositive
power over the shares which are or may be deemed to be beneficially owned
by Mayfield VII and Mayfield Associates Fund II but disclaim such
beneficial ownership.
(4) Based on information set forth in a Schedule 13G, filed with the Securities
and Exchange Commission on June 9, 1998. Includes 487,805 shares which may
be acquired pursuant to conversion of the Convertible Subordinated Note
Agreement, dated November 17, 1997, by and between the Company and Guidant
Corporation.
(5) Includes 33,140 shares subject to options exercisable within 60 days of
March 10, 2000. Also includes 6,000 shares held by Mr. Wallace as custodian
for his three daughters who were given shares pursuant to the Uniform Gift
to Minors Act, and 2,000 shares held in trust for Mr. Wallace's mother. Mr.
Wallace disclaims beneficial ownership of the shares held in trust for his
mother.
(6) Includes 9,500 shares subject to options exercisable within 60 days of
March 10, 2000. Also includes 7,800 shares owned by the Allen Investment
Partnership, of which Mr. Allen is the managing partner; 37,130 shares
owned by DIMA Ventures, Incorporated; 1,000 shares owned by the Brett
Richard Allen Trust; and 1,000 shares owned by Jennifer Lee Allen Trust.
Mr. Allen disclaims beneficial ownership of the shares owned by The Allen
Investment Partnership, except to the extent of his pecuniary interest
therein and disclaims beneficial ownership of the 2,000 shares held in the
two trusts names above.
(7) Includes 9,500 shares subject to options exercisable within 60 days of
March 10, 2000. Ms. Hutton is a general partner in Mayfield VIII Management
Partners, the general partner of Mayfield VIII, but is not a general
partner of Mayfield VII Management Partners, Mayfield VII or Mayfield
Associates Fund II.
(8) Consists of 7,500 shares subject to options exercisable within 60 days of
March 10, 2000.
9
<PAGE> 12
(9) Includes 29,552 shares subject to options exercisable within 60 days of
March 10, 2000.
(10) Includes 52,939 shares subject to options exercisable within 60 days of
March 10, 2000.
(11) Includes 16,000 shares subject to options exercisable within 60 days of
March 10, 2000. Mr. Gearhart resigned as an officer of the Company on
October 14, 1999.
(12) Includes 27,000 shares subject to options exercisable within 60 days of
March 10, 2000 and 240 shares held in a 401(k) retirement account in the
name of Mr. Daly's wife. Mr. Daly disclaims beneficial ownership of the
shares held by his wife.
(13) Includes 2,000 shares subject to options exercisable within 60 days of
March 10, 2000.
(14) Based on information set forth in a Schedule 13G/A, filed with the
Securities and Exchange Commission on April 4, 2000. Includes 800,000
shares of common stock owned by Pequot Private Equity Fund II LP, of which
Pequot Capital Management, Inc. is the beneficial owner.
(15) Includes directors' and executive officers' shares, including shares
subject to options exercisable within 60 days of March 10, 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1999, the Company's Board of
Directors, based upon the recommendations of the Compensation Committee,
established the levels of compensation for the Company's executive officers,
provided, however, Mr. Slee has an employment agreement with the Company and his
compensation is determined in accordance with the terms and conditions of such
agreement.
CERTAIN TRANSACTIONS
In November 1997, the Company received $5 million from Guidant
Corporation ("Guidant") under the terms of a Convertible Note Agreement. The
note bears interest of 5% per annum. At the option of Guidant, the principal
amount of the note may be converted into shares of Common Stock at a conversion
price which is currently $10.25 per share. In April 1998, the Company achieved
one of the two milestones under the Note Agreement and elected to have Guidant
purchase $500,000 of Common Stock and loan the Company $2 million.
In August 1998, the Company entered into a ten-year Distribution
Agreement with Abbott Laboratories ("Abbott") which provides Abbott with
exclusive rights to distribute the Company's peripheral blood clot therapy
products in the U.S. and Canada.
Concurrent with the execution of the distribution agreement with Abbott
in August 1998, the Company and Abbott entered into convertible subordinated
note, credit and security agreements, under which Abbott provided the Company
with (a) $5 million, in exchange for a five-year subordinated note, convertible
at Abbott's option into shares of the Company's Common Stock at a conversion
rate of $13.00 per share, and (b) a $5 million credit facility, available for
one year from the date of the agreement and repayable five years from the date
of the agreement, with amounts borrowed under the facility convertible over the
five-year life of the underlying note at the Company's option, subject to
certain restrictions, into shares of the Company's Common Stock at a conversion
rate of $15.00 per share. In October 1998, the Company elected to borrow the
entire $5 million under this facility, the proceeds of which were received in
November 1998. Both notes had a stated interest rate of 5% per annum. For
financial statement reporting purposes, this rate was adjusted to reflect an
imputed market rate of interest as of the date of each of the notes.
In April 1999, Abbott and the Company agreed to a modification, and, in
May 1999, the parties consummated such modification, of the agreements described
above. Under the terms of the modification, Abbott converted $4 million face
value of the notes into shares of the Company's Common Stock at a conversion
rate equal to 125% of the average closing price of such stock for the five days
ended April 30, 1999 (amounting to a
10
<PAGE> 13
conversion rate of $8.65 per share), and converted the remaining $6 million face
value of such notes into shares of the Company's common stock at a rate of $12
per share.
Concurrently in April 1999, Abbott and the Company entered into an
agreement that provided the Company an option to require Abbott to purchase up
to $3 million of the Company's common stock at a price of $12 per share. In
October 1999, the Company exercised such option for the entire $3 million of
proceeds and, accordingly, issued 250,000 shares of its common stock to Abbott
upon the Company's receipt of the proceeds in November 1999.
In November 1999, William McLain and George Wallace, officers of the
Company, exercised options in conformity with the Company's 1996 Stock Incentive
Plan, resulting in the issuance of an aggregate of 56,630 shares of the
Company's Common Stock, and issued notes to the Company in the aggregate amount
of $293,464. The notes are collateralized by such shares of the Company's Common
Stock, are due November 2002 and bear an interest rate of 5.47% per annum.
In April 2000, William McLain and George Wallace, officers of the
Company, issued notes to the Company in the aggregate amount of $168,057. The
notes are collateralized by 81,005 shares of the Company's Common Stock, certain
interest payments are due in April of 2001 and 2002, with the remaining
principal and interest due April 2003. The notes bear an interest rate of 6.49%
per annum.
The Company believes all of the transactions set forth above were made
on terms no less favorable to the Company than could otherwise be obtained from
unaffiliated third parties. All future transactions, including loans, between
the Company and its officers, directors, principal stockholders and their
affiliates will be approved by a majority of the Board, including a majority of
the independent and disinterested outside directors on the Board.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP,
independent auditors, to audit the financial statements of the Company for the
fiscal year ending December 31, 2000, and recommends that stockholders vote for
ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection.
PricewaterhouseCoopers LLP has audited the Company's financial
statements annually since its fiscal year ended December 31, 1996. Its
representatives are expected to be present at the meeting with the opportunity
to make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder desiring to submit a proposal for action at the
Company's 2001 Annual Meeting of Stockholders and presentation in the Company's
Proxy Statement with respect to such meeting should arrange for such proposal to
be delivered to the Company at its principal place of business no later than
January 1, 2001 in order to be considered for inclusion in the Company's proxy
statement relating to that meeting. Matters pertaining to such proposals,
including the number and length thereof, eligibility of persons entitled to have
such proposals included and other aspects are regulated by the Securities
Exchange Act of 1934, Rules and Regulations of the Securities and Exchange
Commission and other laws and regulations to which interested persons should
refer.
On May 21, 1998 the Securities and Exchange Commission adopted an
amendment to Rule 14a-4, as promulgated under the Securities and Exchange Act of
1934, as amended. The amendment to Rule 14a-4(c)(1) governs the Company's use of
its discretionary proxy voting authority with respect to a stockholder proposal
which is not addressed in the Company's proxy statement. The new amendment
provides that if a proponent of a proposal fails to notify the Company at least
45 days prior to the current year's anniversary of the date of mailing of the
prior year's proxy statement, then the Company will be allowed to use its
discretionary voting authority when the proposal is raised at the meeting,
without any discussion of the matter in the proxy statement.
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<PAGE> 14
With respect to the Company's 2000 Annual Meeting of Stockholders, if
the Company was not provided notice of a stockholder proposal, which the
stockholder has not previously sought to include in the Company's proxy
statement, by March 12, 2000, the Company will be allowed to use its voting
authority as outlined.
OTHER MATTERS
Management is not aware of any other matters to come before the meeting.
If any other matter not mentioned in this Proxy Statement is brought before the
meeting, the proxy holders named in the enclosed Proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgment.
By Order of the Board of Directors
April 28, 2000 /s/ George Wallace
---------------------------------
George Wallace
Chief Executive Officer President
and Director
The Annual Report to Stockholders of the Company for the fiscal year
ended December 31, 1999 is being mailed concurrently with this Proxy Statement
to all stockholders of record as of April 14, 2000. The Annual Report is not to
be regarded as proxy soliciting material or as a communication by means of which
any solicitation is to be made.
12
<PAGE> 15
PROXY MICRO THERAPEUTICS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF THE STOCKHOLDERS -- MAY 25, 2000
The undersigned hereby nominates, constitutes and appoints George Wallace
and Harold Hurwitz, and each of them individually, the attorney, agent and proxy
of the undersigned, with full power of substitution, to vote all stock of MICRO
THERAPEUTICS, INC. which the undersigned is entitled to represent and vote at
the 2000 Annual Meeting of Stockholders of the Company to be held at 2 Goodyear,
Irvine, California 92618 on May 25, 2000, at 10:00 a.m., and at any and all
adjournments or postponements thereof, as fully as if the undersigned were
present and voting at the meeting, as follows:
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 AND 2.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ]FOR [ ]WITHHOLD AUTHORITY
all nominees listed below (except to vote for all nominees listed below
as marked to the contrary below)
</TABLE>
Election of the following nominees as directors:
George Wallace, Dick Allen, Kim Blickenstaff, W. James Fitzsimmons and Wende
Hutton.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, PRINT THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. IN THEIR DISCRETION, ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
IMPORTANT -- PLEASE SIGN AND DATE ON OTHER SIDE AND RETURN PROMPTLY
<PAGE> 16
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED "FOR" THE
ELECTION OF THE DIRECTORS NAMED ON THE REVERSE SIDE OF THIS PROXY AND "FOR"
RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS.
Date , 2000
-------------------------
(Signature of
stockholder)
Please sign your name
exactly as it appears
hereon. Executors,
administrators,
guardians, officers of
corporations and others
signing in a fiduciary
capacity should state
their full titles as
such.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN AND RETURN
THIS PROXY, WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE.
