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
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Oxboro Medical International, Inc.
(Name of Registrant as Specified in Its Charter)
Harley Haase
(Name of Person(s) Filing Proxy Statement)
Payment of filing fees (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:
(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 0-11:1
(4) Proposed maximum aggregate value of transaction:
1 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 filing.
(1) Amount previously paid:
(2) Form schedule or registration statement no:
(3) Filing party:
(4) Date filed:
OXBORO MEDICAL INTERNATIONAL, INC.
13828 Lincoln Street N.E.
Ham Lake, Minnesota 55304
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 22, 1996
TO OUR SHAREHOLDERS:
Please take notice that the Annual Meeting of the Shareholders of
Oxboro Medical International, Inc., a Minnesota corporation (the "Company"),
will be held at the Company's offices, 13828 Lincoln Street N.E., Ham Lake,
Minnesota 55304, on Thursday, February 22, 1996, at 4:00 p.m. Minneapolis time,
to consider and vote upon the following matters:
1. Election of one director for a three-year term; and
2. Such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors of the Company has fixed the close of business
on January 4, 1996, as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting. The transfer books of
the Company will not be closed.
Shareholders who do not expect to be present personally at the Annual
Meeting are urged to complete, date, sign, and return the accompanying Proxy in
the enclosed, self-addressed envelope. The Board of Directors of the Company
sincerely hopes, however, that all shareholders who can attend the Annual
Meeting will do so.
It is important that your shares be represented and voted at the Annual
Meeting. If you are not able to attend the Annual Meeting, please return your
completed Proxy at your earliest convenience.
BY THE ORDER OF THE BOARD OF DIRECTORS
Dennis L. Mikkelson
Secretary
Dated: January 18, 1996
OXBORO MEDICAL INTERNATIONAL, INC.
13828 Lincoln Street N.E.
Ham Lake, Minnesota 55304
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 22, 1996
SOLICITATION AND REVOCATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors of Oxboro
Medical International, Inc. (the "Company") in connection with the Annual
Meeting of the Shareholders of the Company, which will be held on February 22,
1996, and any adjournments thereof.
The person giving the enclosed Proxy has the power to revoke it at any
time prior to the convening of the Annual Meeting. Revocation must be in
writing, signed in exactly the same manner as the Proxy, and dated. Revocations
of Proxy will be honored if received at the offices of the Company, addressed to
Dennis L. Mikkelson, Secretary, on or before February 21, 1996. In addition, on
the day of the meeting, prior to the convening thereof, revocations may be
delivered to the tellers, who will be seated at the door of the meeting room.
Revocation may also be effected by delivery of an executed, later dated Proxy.
Unless revoked, all properly executed Proxies received in time will be voted.
Proxies not revoked will be voted in accordance with the choice
specified by shareholders on the Proxies. Proxies which are signed but which
lack any such specification will, subject to the following, be voted FOR the
director nominated by the Board of Directors and listed herein. If a shareholder
abstains from voting as to any matter, then the shares held by such shareholder
shall be deemed present at the meeting for purposes of determining a quorum and
for purposes of calculating the vote with respect to such matter, but shall not
be deemed to have been voted in favor of such matter. Abstentions, therefore, as
to any proposal will have the same effect as votes against such proposal. If a
broker turns in a "non-vote" Proxy, indicating a lack of voting instruction by
the beneficial holder of the shares and lack of discretionary authority on the
part of the broker to vote on a particular matter, then the shares covered by
such non-vote Proxy shall be deemed present at the meeting for purposes of
determining a quorum but shall not be deemed to be represented at the meeting
for purposes of calculating the vote required for approval of such matter.
The Company will pay for costs of soliciting Proxies, including the
costs of preparing and mailing the Notice of Annual Meeting of Shareholders and
this Proxy Statement. Solicitation will be primarily by mailing this Proxy
Statement to all shareholders entitled to vote at the meeting. Proxies may be
solicited by officers or other employees of the Company who will receive no
special compensation for their services. The Company may reimburse brokers,
banks, and others holding shares in their names for others for the costs of
forwarding Proxy material to, and obtaining Proxies from, beneficial owners.
The Annual Report of the Company, including financial statements, for
the fiscal year ended September 30, 1995, is being mailed with this Proxy
Statement. Copies of this Proxy Statement and Proxies will first be mailed to
shareholders on or about January 18, 1996.
VOTING RIGHTS
Only shareholders of record at the close of business on January 4, 1996
are entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. As of that date, there were issued and outstanding 2,672,278 shares of
Common Stock of the Company, the only class of securities of the Company
entitled to vote at the meeting. Each shareholder of record is entitled to one
vote for each share registered in his or her name as of the record date. The
Articles of Incorporation of the Company do not grant the shareholders the right
to vote cumulatively for the election of directors. No shareholder will have
appraisal rights or similar dissenter's rights as a result of any matters
expected to be voted on at the meeting. The presence in person or by proxy of
holders of a majority of shares of the Common Stock entitled to vote at the
Annual Meeting will constitute a quorum for the transaction of business.
COMMON STOCK OWNERSHIP
The following table sets forth certain information as of January 4,
1996 with respect to the stock ownership of all persons known by the Company to
be beneficial owners of more than five percent of its outstanding Common Stock,
all directors and nominees to become directors, and all officers and directors
of the Company as a group. Except where otherwise indicated, all persons have
sole voting power and sole investment power with respect to the shares
indicated:
Name and Address of Number of Percentage
Beneficial Owner Shares Owned of Class
Larry Rasmusson 617,239(1) 22.4%
1485 - 139th Lane N.W.
Andover, MN 55304
Keith A. Olson 240,000 9.0
2531 West 90th Street
Bloomington, MN 55431
Harley Haase 236,748(2) 8.9%
13828 Lincoln Street N.E.
Ham Lake, MN 55304
Employee Stock Ownership Plan 225,000(3) 8.4
13828 Lincoln Street N.E.
Ham Lake, MN 55304
Dennis L. Mikkelson 40,000(4) 1.5
John R. Walter 40,000(4) 1.5
All directors and officers 1,173,987(5) 41.4
as a group (5 persons)
(1) Includes 383,500 shares issued to Mr. Rasmusson under the terms of a
stock award agreement, 80,364 shares subject to a currently exercisable
option, and 4,105 shares allocated to Mr. Rasmusson under the Employee
Stock Ownership Plan (ESOP) (of which 821 shares have vested). See
"Certain Relationships and Related Transactions."
(2) Includes 25,686 shares allocated to Mr. Haase under the ESOP; all of
such shares have vested.
(3) Larry Rasmusson, trustee of the Employee Stock Ownership Plan,
disclaims beneficial ownership of shares owned by the Plan. Each
participant in the Plan has voting rights with regard to shares
allocated to his or her account in which the participant has vested. As
of September 30, 1995, 73,050 shares have been allocated to
participants, of which 64,096 shares have vested. See "Executive
Compensation -- Employee Stock Ownership Plan."
(4) Includes 40,000 shares that may be acquired pursuant to a currently
exercisable option.
(5) Includes 120,364 shares that may be acquired pursuant to currently
exercisable options and 29,791 shares allocated under the ESOP.
Change in Control Agreement
Under the terms of an employment agreement effective April 1, 1993, in
the event any person (as such term is defined in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended), shall become the beneficial
owner of 30% or more of the Company's outstanding Common Stock, Harley Haase,
the Company's chief executive officer, will be granted an option to purchase, at
a price equal to the fair market value of the Common Stock on the date of grant,
a number of shares of the Company's Common Stock sufficient to reduce the
ownership of such person to less than 30%.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that directors are
divided into three classes, with each class serving a three-year term and
approximately one-third of the Board of Directors to be elected each year. At
the 1996 Annual Meeting, one Class III director will be elected to hold office
for a term expiring at the Annual Meeting of shareholders to be held in 1999, or
until his successor has been elected and qualified, or until his death,
resignation, or removal, if earlier.
The director in Class III whose term is expiring, Harley Haase, has
been nominated by the Board of Directors for reelection.
Unless instructed not to vote for the election of the nominee, the
Proxies will vote to elect the nominee named above. If the nominee is not a
candidate for election at the meeting, which is not currently anticipated, the
Proxies may vote for such other person as they, in their discretion, may
determine.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE ABOVE NOMINEE
BE ELECTED.
Certain information regarding the nominee and the other current
directors of the Company is set forth below:
Nominee for Election (term expiring in 1999)
HARLEY HAASE, 49, has been a director of the Company since
1987. He has been president of the Company since June 1988.
Continuing Class I Directors (terms expiring in 1997)
KEITH A. OLSON, 53, has been a director of the Company since
1982. Since February 1993, he has served as president of Olson
Contractors Supply, Inc., a supplier to the construction trades. From
1980 until 1993, he served as a division manager of the tool and
fastener department of Shurail Supply, Inc., Bloomington, Minnesota.
JOHN R. WALTER, 55, has been a director since 1992. For the
past 32 years, he has worked as a financial planner.
Continuing Class II Directors (terms expiring in 1998)
DENNIS L. MIKKELSON, 52, has been a director of the Company
since 1990. Prior to 1990, Mr. Mikkelson spent 18 years with Control
Data Corporation in various positions related to computer software
development. Since leaving Control Data Corporation, he has worked as
an independent consultant in information engineering.
LARRY A. RASMUSSON, 52, has been a director since 1993. Since
that time he has also served as Chairman of the Board and chief
financial officer of the Company. Prior to such appointments, he had
served as a consultant to the Company on various financial and other
matters since 1982. Mr. Rasmusson also serves as trustee of the
Company's ESOP and is the sole shareholder of the general partner of a
limited partnership in which the Company has made an investment as a
limited partner. See "Certain Relationships and Related Transactions."
Meetings and Committees of the Board of Directors
During fiscal 1995, the Board of Directors held 8 meetings. All
directors attended at least 75% of the meetings held.
The Board has no standing audit, compensation, or nominating committee.
Compensation to Directors
Directors' Fees and Bonuses. For services rendered in fiscal 1995, each
member of the Company's Board of Directors who is not an employee of the Company
received a monthly fee and a bonus based on the Company's financial performance.
The aggregate compensation paid to nonmanagement directors for services rendered
in fiscal 1995 was $20,200.
Stock Options to Directors. Effective March 6, 1991, the Company
granted to Dennis L. Mikkelson an option to purchase 40,000 shares of Common
Stock at an exercise price of $2.50 per share. The option is exercisable until
March 6, 1996. Effective June 8, 1992, the Company granted to John R. Walter an
option to purchase 40,000 shares of Common Stock at an exercise price of $2.75
per share. The option is exercisable until June 8, 1997.
Consulting Fees to Director. The Company paid approximately $60,192
during fiscal 1995 to Dennis L. Mikkelson, a director, for general consulting
and for development and enhancement of the Company's computer capabilities.
Commissions/Consulting Fees to Director. John R. Walter, a director,
received $10,393 during fiscal 1995 as commissions for the sale to the Company
of various investment and insurance products. In addition, Mr. Walter received
$30,000 during fiscal 1995 for consulting services related to Oxboro Outdoors,
Inc.
Compliance with Reporting Requirements of Exchange Act
Section 16 of the Securities Exchange Act of 1934, and the rules
promulgated thereunder, requires the Company's officers, directors, and holders
of 10% or more of its outstanding Common Stock to file certain reports with the
Securities and Exchange Commission. To the Company's best knowledge, based
solely on information provided to it by the reporting individuals, all of the
reports required to be filed by these individuals have been filed, except that
Harley Haase, the Company's chief executive officer, and Larry A. Rasmusson, the
Company's chief financial officer, did not timely file annual reports on Form 5
with respect to fiscal 1994, reporting the allocation to them of shares under
the Company's Employee Stock Ownership Plan. Each individual has now filed the
required report.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding
compensation paid during each of the Company's last three fiscal years to the
Company's chief executive officer and the one other executive officer whose
total annual compensation in fiscal 1995 (based on salary and bonus) exceeded
$100,000 (the "Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Securities All
Name and Principal Fiscal Annual Compensation Underlying Other
Position Year Salary Bonus Options Compensation
<S> <C> <C> <C> <C>
Harley Haase 1995 $128,830 $175,620 -- $ 48,895(1)
Chief Executive 1994 110,884 204,795 -- 56,456
Officer 1993 96,000 145,428 -- 54,897
Larry A. Rasmusson 1995 $161,798 $175,620 80,364 $ 70,109(2)
Chief Financial 1994 143,884 204,795 -- 124,876
Officer 1993(3) 117,549 147,184 -- 110,373
</TABLE>
(1) All other compensation for Mr. Haase for fiscal 1995 includes $45,467
of premiums paid on a split dollar life insurance policy and the market
value at September 30, 1995 of 2,285 shares allocated to Mr. Haase
under the Company's Employee Stock Ownership Plan ($3,428). See "Split
Dollar Insurance" and "Employee Stock Ownership Plan."
(2) All other compensation for Mr. Rasmusson for fiscal 1995 includes
$45,012 of premiums paid on a split dollar life insurance policy,
$21,669 in royalties, and the market value at September 30, 1995 of
2,285 shares allocated to Mr. Rasmusson under the Company's Employee
Stock Ownership Plan ($3,428). See "Split Dollar Insurance," "License
Agreements," "Employee Stock Ownership Plan," and "Certain
Relationships and Related Transactions -- License Agreements with
Shareholder."
(3) In fiscal 1993, $57,018 of Mr. Rasmusson's compensation was earned as a
consultant to the Company.
Options Granted During Fiscal 1995
The following table sets forth information regarding options granted to
Named Executive Officers during fiscal 1995.
<TABLE>
<CAPTION>
Options Percent of Total
Granted Options Granted
(Number of to Employees in Exercise Expiration
Name Shares) Fiscal Year Price Date
<S> <C> <C> <C> <C>
Harley Haase -0- -- -- --
Larry Rasmusson 80,364 100% $1.50 8/17/00
</TABLE>
Aggregated Option Exercises During Fiscal 1995 and Fiscal Year-End Option Values
The following table provides information related to options exercised
by the Named Executive Officers during fiscal 1995 and the number and value of
options held at fiscal year-end. The Company does not have any outstanding stock
appreciation rights.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Fiscal Year-End Fiscal Year-End
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable (1)
<S> <C> <C> <C> <C> <C> <C> <C>
Harley Haase - 0 - - 0 - -0-/-0- $ -0-/-0-
Larry A. Rasmusson - 0 - - 0 - 80,364/-0- $ -0-/-0-
</TABLE>
(1) Value is calculated as the difference between the closing price of the
Common Stock on September 30, 1995 ($1.50) and the option exercise
price ($1.50) multiplied by the number of shares.
Employment Agreements
Effective April 1, 1993, the Company entered into five-year employment
agreements with Harley Haase, the Company's chief executive officer, and Larry
A. Rasmusson, its chief financial officer, whereby each is to be paid an annual
salary determined each fiscal year, a bonus, the amount of which will be based
upon achievement by the Company of certain financial goals, and other benefits.
The agreement further provides that if the employment of either individual is
terminated without "cause" (as defined in the agreement), he will be entitled to
be paid his then current salary, bonus and other benefits through the remaining
term of the agreement, and under certain circumstances the Company will be
obligated to provide health and life insurance for the balance of the
individual's life. In addition, in the event that either individual's employment
is terminated in connection with a "change in control" of the Company (as
defined), he will be entitled to receive as severance pay an amount equal to two
and one-half times his "annualized includable compensation for the base period"
(as defined in Section 280G(d) of the Internal Revenue Code of 1986, as
amended), payable in a lump sum, in cash, on the fifth day following such
termination.
License Agreements
The Company has entered into an exclusive license agreement with Larry
Rasmusson pursuant to which Mr. Rasmusson, as licensor, granted the Company, as
licensee, the exclusive right to make, use, and sell certain medical products
and to receive information and assistance from Mr. Rasmusson to make, use and
sell the products. The products covered include the suture assist, occlusion
device, occluder pad, OR device, X-TRA loop, bulldog clamp, radiopaque fabric
clamp covers, ribbed suture aid booties, and ribbed clamp covers. Mr. Rasmusson
is to receive royalties in the amount of 4% of the "net sales price" (as
defined) of all listed products sold. Royalties continue for the life of the
product. If at any time a product covered by the agreement is no longer sold by
the Company (defined as a reduction by 50% in sales from the previous calendar
year), the license will no longer be exclusive as to that product. The agreement
contains a provision for increasing the royalty amount if royalty rates paid by
the Company to others for similar products are higher than 4%. During fiscal
1995, 1994 and 1993, Mr. Rasmusson earned $21,669, $16,447 and $14,063,
respectively, in royalties under this agreement. Effective November 8, 1995, the
Company and Mr. Rasmusson amended the agreement to provide that upon the
retirement of Harley Haase, the royalty will be increased from 4% to 6% on
certain products, and the Company will pay Mr. Rasmusson royalties of 3% and pay
Mr. Haase royalties of 3% on sales of such products.
Oxboro Outdoors, Inc., a wholly owned subsidiary of the Company
("Outdoors"), has entered into an exclusive license and royalty agreement with
Mr. Rasmusson pursuant to which Mr. Rasmusson, as licensor, granted Outdoors, as
licensee, the exclusive right to make, use, and sell certain outdoor
recreational products and to receive information and assistance from Mr.
Rasmusson to make, use and sell the products. Mr. Rasmusson is to receive an
advance royalty payment of $1,500 for each product accepted for development by
Outdoors and continuing royalties in the amount of 8% of the "net sales price"
(increased to 9% when the cumulative aggregate "net sales price" exceeds
$1,000,000) of all listed products sold when the cumulative "net sales price" of
all products sold multiplied by the applicable royalty percentage exceeds the
total of all royalty advances. Royalties continue for the life of the products.
During fiscal 1995, 1994 and 1993, Outdoors paid to Mr. Rasmusson $0.00, $52,500
and $60,000, respectively, in advance royalties. Effective November 8, 1995, the
agreement was amended to grant to Outdoors a royalty-free license to use the
name "Larry A. Rasmusson" and the picture of Mr. Rasmusson in connection with
the advertising, merchandising, promotion, manufacture, sale and distribution of
certain Outdoors products.
Effective November 8, 1995, the Company entered into a product
development incentive agreement with Mr. Haase pursuant to which Mr. Haase, as
licensor, granted the Company, as licensee, the exclusive right to make, use and
sell certain products and to receive information and assistance from Mr. Haase
to make, use and sell the products. The products covered include, among others,
labels, various holders, organizers, and bags and other foam products.
Additional products may become subject to the agreement if accepted by the Board
of Directors of the Company. Following termination of his employment with the
Company, Mr. Haase will receive incentive payments equal to 4% of the net sales
price of all products subject to the agreement sold by the Company following Mr.
Haase's termination. Royalties continue for the life of the products.
Effective November 21, 1995, the Company and Outdoors entered into a
royalty sharing agreement with Mr. Rasmusson and Mr. Haase pursuant to which Mr.
Haase and Mr. Rasmusson will share royalties on products that they jointly
develop that are covered under the exclusive license agreement and/or exclusive
license and royalty agreement, with respect to Mr. Rasmusson, and under the
product development incentive agreement, with respect to Mr. Haase. Upon Mr.
Haase's termination of employment, 50% of royalties on the products jointly
developed by Mr. Haase and Mr. Rasmusson will be paid to Mr. Haase and 50% to
Mr. Rasmusson.
Consulting Agreements
Effective November 1, 1995, the Company entered into consulting
agreements with Harley Haase, the Company's chief executive officer, and Larry
A. Rasmusson, its chief financial officer, whereby each is to be paid an annual
consulting fee in the amount of $150,000 for a period of five years commencing
upon retirement. The agreements prohibit the consultants from engaging in any
activity that competes with either the Company or Outdoors and provide that the
consultants shall not be required to provide services for more than five days
per month. If either Mr. Rasmusson or Mr. Haase voluntarily terminates his
employment with the Company prior to age 55, the agreement will not be binding
on the Company. If the Company does not renew either individual's employment
agreement on April 1, 1998, for reasons other than good cause, then the
agreement shall commence on that date.
Split Dollar Insurance
The Company has adopted split dollar life insurance plans (the "Plans")
for the benefit of its chief executive officer, Harley Haase, and Larry A.
Rasmusson, its chief financial officer. Under the terms of the Plans, the
Company pays the annual premiums on a $1 million insurance policy (the "Policy")
on the life of each individual. The Policy is a whole life policy on which all
premiums are paid by the Company and income is imputed to the insured in an
amount equal to the term rate for his insurance as established by the insurer.
The Policy is owned by the individual. The Plans are the designed so that the
Company will recover all premium payments, interest, and advances made by it on
account of the Policy. The Company's interest in the premium payments, interest,
and advances made with respect to the Policy is secured by a collateral
assignment of the Policy. Upon the death of the individual, the Company will be
reimbursed from the insurance proceeds paid to the beneficiaries in an amount
equal to the total premiums, interest, and advances made by the Company with
respect to the Policy. In the event the individual surrenders the Policy for its
cash surrender value at some date in the future, the Company will be reimbursed
for the premiums it has paid on the Policy, plus interest. Premiums paid in
fiscal 1995, 1994 and 1993 on behalf of Mr. Haase totalled $45,467, $43,679 and
$39,372, respectively. Premiums paid in fiscal 1995, 1994, and 1993 on behalf of
Mr. Rasmusson totalled $45,012, $43,979 and $39,254, respectively.
Employee Stock Ownership Plan
The Company has established an Employee Stock Ownership Plan and Trust
(the "Plan"). The Company advanced $150,000 to the Plan, which was used to
purchase 225,000 shares of newly issued Common Stock from the Company at a price
of $.67 per share. The loan is evidenced by a promissory note in the initial
principal amount of $150,000, bearing interest at 9% per annum. The note
provides for annual principal payments of $7,500, together with annual interest
payments. In accordance with legal requirements, as the loan is repaid, the
shares are allocated to participants in the Plan. The Company contributed
approximately $19,992 to the Plan for fiscal 1995. For fiscal 1995, 1994 and
1993, 2,285 shares, 3,638 shares and 7,306 shares, respectively, were credited
to the account of Harley Haase, and, for fiscal 1995 and 1994, 2,285 shares and
1,820 shares, respectively, were credited to the account of Larry Rasmusson.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Purchase of Shares by Officer
Effective January 25, 1994, Harley Haase, an officer and director of
the Company, exercised an option to purchase 90,000 shares of the Company's
Common Stock for an aggregate purchase price of $168,750. The purchase price was
paid by delivery of $8,750 in cash and a promissory note in the principal amount
of $160,000. The note provides that the principal be paid in five equal annual
installments, commencing in January 1995, together with all interest accrued and
unpaid as of the date of payment, and that interest be accrued at an annual rate
equal to the stated Applicable Federal Rate as in effect from time to time, each
change in the interest rate to become effective on the day the corresponding
change in the Federal rate becomes effective. Such rate was 6.38% as of
September 30, 1995. Mr. Haase pledged 70,200 shares of Common Stock previously
owned by him as security for the note. During fiscal 1995, $80,000 was paid on
the note, leaving an outstanding principal balance of $80,000.
Limited Partnership: Project Heart
The Company has invested $142,000 cash for a 30% limited partnership
interest in the Project Heart Limited Partnership, a Minnesota limited
partnership (the "Limited Partnership"). The Limited Partnership was formed to
pursue the development of a device to be used in connection with organ
transplants and organ transportation. The proposed product to be developed by
the Limited Partnership is only in the conceptual planning stage and, in
addition to the usual uncertainties of product development, carries a
substantial risk of failure because of the nature of the product and the
significant amounts of additional financing that may be required.
The Company intends that its involvement with the Limited Partnership
will be solely as long-term, high-risk investment, and it does not intend to
actively participate in the development of the product. Further, the Company has
no present intention to supply any additional financing. If a successful product
is developed by the Limited Partnership, the Company has no present belief that
it would, or any assurances that it could, have any involvement in the
manufacturing or marketing of the product.
The general partner of the Limited Partnership is LexTen, Inc., a
Minnesota corporation, of which Larry Rasmusson is the sole shareholder. LexTen
owns a 67.7% interest in the Limited Partnership. Larry Rasmusson is an officer
and a director of the Company and also is deemed to be the beneficial owner of
approximately 22.4% of the Common Stock of the Company. Harley Haase, president
and director of the Company, and Keith A. Olson, a director of the Company, each
purchased a 1.2% limited partnership interest in the Limited Partnership for
$10,000 cash.
In conjunction with the Limited Partnership, the Company entered into a
stock award agreement (the "Stock Award Agreement") with Larry Rasmusson,
pursuant to which the Company issued to Mr. Rasmusson 383,500 shares of its
Common Stock, currently held in an escrow account. These shares are to be
released to Mr. Rasmusson in various installments upon the reaching of defined
milestones set forth in the Stock Award Agreement. Mr. Rasmusson will assist the
Limited Partnership in the development of the concept.
The escrow agent for the escrow account is Norwest Bank - Riverdale,
Coon Rapids, Minnesota. The stock awards to be received by Mr. Rasmusson are
subject to a substantial risk of forfeiture such that some or all of the stock
awards may be forfeited by Mr. Rasmusson if certain of the designated milestones
under the Stock Award Agreement are not reached prior to the termination of the
Stock Award Agreement. The Stock Award Agreement was amended by the Board of
Directors for the Company effective October 31, 1995 to extend the term of the
agreement from October 31, 1995 to October 31, 1998 in consideration of Mr.
Rasmusson's waiving, on his own behalf and on behalf of Lexten, Inc., the right
to receive any cash distribution from the Limited Partnership.
The milestones and the number of shares to be awarded upon attainment
of each milestone are as follows:
Milestones Number of Shares
Complete mock-up prototype 76,700 shares
Complete prototype 57,525 shares
Begin testing for blood flow 57,525 shares
Begin testing device externally
with animal heart 95,875 shares
Begin testing device internally with
animal, using animal's (host) organ 95,875 shares
Until the termination of the Stock Award Agreement, Mr. Rasmusson is
entitled to vote the escrowed stock, including all shares not yet awarded to Mr.
Rasmusson because the milestones described above have not been reached.
OTHER MATTERS
The Board of Directors is not aware that any matter other than that
described in the Notice will be presented for action at the meeting. If,
however, other matters do properly come before the meeting, it is the intention
of the persons named in the enclosed Proxy to vote the proxied shares in
accordance with their best judgment on such matters.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
On June 9, 1995, Price Waterhouse LLP, the Company's principal
independent accountant, advised the Company that it was resigning.
The reports by Price Waterhouse LLP on the Company's financial
statements for the fiscal years 1993 and 1994 did not contain any adverse
opinion or disclaimer of opinion nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles. During recent fiscal years
1993 and 1994, and the period from October 1, 1994 to June 9, 1995, there were
no disagreements with Price Waterhouse LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure that, if not resolved to the satisfaction of Price Waterhouse LLP,
would have caused it to make a reference to the subject matter of such
disagreement in its reports, nor any "reportable event," as defined in Items
304(a)(1)(iv)(B) of Regulation S-B.
On August 1, 1995, the Company engaged Grant Thornton LLP as the
issuer's principal independent accountant to audit the Company's financial
statements for fiscal 1995. Representatives of Grant Thornton LLP are expected
to be present at the Annual Meeting and will have the opportunity to make a
statement, if they desire to do so, and to respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
All shareholder proposals intended to be presented at the 1997 Annual
Shareholders' Meeting must be received by the Company at its offices on or
before September 21, 1996.
REPORT ON FORM 10-KSB
A copy of the Company's Annual Report for the fiscal year ended
September 30, 1995, accompanies the Notice of Annual Meeting and Proxy
Statement. A copy of the Company's Report on Form 10-KSB for the fiscal year
ended September 30, 1995, as filed with the Securities and Exchange Commission,
is available upon request from the Company.
It is important that Proxies be returned promptly. Shareholders who do
not plan to attend the meeting in person are urged to sign, date, and forward
the Proxy by return mail.
BY THE ORDER OF THE BOARD OF DIRECTORS
Dennis L. Mikkelson
Secretary
January 18, 1996
OXBORO MEDICAL INTERNATIONAL, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS -- FEBRUARY 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Larry A. Rasmusson and Dennis L. Mikkelson, or
either of them, proxies or proxy, with full power of substitution, to vote all
shares of Common Stock of Oxboro Medical International, Inc. (the "Company")
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
to be held on February 22, 1996, 4:00 p.m. Minneapolis time, at the Company's
offices, 13828 Lincoln Street N.E., Ham Lake, Minnesota 55304, and at any
adjournment thereof, as directed below with respect to the proposals set forth
below, all as more fully described in the Proxy Statement, and in their
discretion upon any other matter that may properly come before the meeting or
any adjournment thereof.
1. ELECTION OF DIRECTOR (for a term ending in 1999):
Harley Haase [ ] FOR [ ] WITHHOLD AUTHORITY
2. Upon such other matters as may properly come before the meeting.
The power to vote granted by this proxy may be exercised by Larry A. Rasmusson
and Dennis L. Mikkelson, jointly or singly, or their substitute(s), who are
present and acting at said Annual Meeting or any adjournment of said Annual
Meeting. The undersigned hereby revokes any and all prior proxies given by the
undersigned to vote at this Annual Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SHAREHOLDER'S (SHAREHOLDERS')
INSTRUCTIONS. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE PROPOSED NOMINEE.
IT IS IMPORTANT THAT EACH SHAREHOLDER COMPLETE, DATE, SIGN, AND
MAIL THIS PROXY AS SOON AS POSSIBLE.
PLEASE DO NOT FORGET TO DATE THIS PROXY
Dated and Signed _____________, 1996
____________________________________
Signature of Shareholder(s)
____________________________________
Signature of Shareholder(s)
IMPORTANT: Please date and sign
exactly as your name or names appear
hereon. When signing as attorney,
executor, trustee, guardian, or
authorized officer of a corporation or
partner of a partnership, please give
your title as such.
The Company's stock records indicate that you have not presented your stock
certificate(s) for exchange following the 1-for-10 reverse stock split in April
1987. Giving effect to such reverse split, and to subsequent stock splits of
3-for-2 (January 1990) and 2-for-1 (March 1991), each 10 shares listed on this
proxy card as held of record by you will be entitled to 3 votes on all matters
to be presented to the shareholders at the 1996 Annual Meeting.
OXBORO MEDICAL INTERNATIONAL, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS -- FEBRUARY 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Larry A. Rasmusson and Dennis L. Mikkelson, or
either of them, proxies or proxy, with full power of substitution, to vote all
shares of Common Stock of Oxboro Medical International, Inc. (the "Company")
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
to be held on February 22, 1996, 4:00 p.m. Minneapolis time, at the Company's
offices, 13828 Lincoln Street N.E., Ham Lake, Minnesota 55304, and at any
adjournment thereof, as directed below with respect to the proposals set forth
below, all as more fully described in the Proxy Statement, and in their
discretion upon any other matter that may properly come before the meeting or
any adjournment thereof.
1. ELECTION OF DIRECTOR (for a term ending in 1999):
Harley Haase [ ] FOR [ ] WITHHOLD AUTHORITY
2. Upon such other matters as may properly come before the meeting.
The power to vote granted by this proxy may be exercised by Larry A. Rasmusson
and Dennis L. Mikkelson, jointly or singly, or their substitute(s), who are
present and acting at said Annual Meeting or any adjournment of said Annual
Meeting. The undersigned hereby revokes any and all prior proxies given by the
undersigned to vote at this Annual Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SHAREHOLDER'S (SHAREHOLDERS')
INSTRUCTIONS. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE PROPOSED NOMINEE.
IT IS IMPORTANT THAT EACH SHAREHOLDER COMPLETE, DATE, SIGN, AND
MAIL THIS PROXY AS SOON AS POSSIBLE.
PLEASE DO NOT FORGET TO DATE THIS PROXY
Dated and Signed _____________, 1996
____________________________________
Signature of Shareholder(s)
____________________________________
Signature of Shareholder(s)
IMPORTANT: Please date and sign
exactly as your name or names appear
hereon. When signing as attorney,
executor, trustee, guardian, or
authorized officer of a corporation or
partner of a partnership, please give
your title as such.
