PANATECH RESEARCH AND DEVELOPMENT CORPORATION
P.O. Box 23160
Albuquerque, NM 87192-1160
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on August 15, 1996
The Annual Meeting of Stockholders of Panatech Research and
Development Corporation (the "Company") will be held at the offices of
Palmer & Dodge, 1 Beacon St., 24th floor, Boston, Massachusetts on August
15, 1996 at 10:00 a.m. for the following purposes:
1. To elect a Board of four directors; and
2. To transact such other business as may properly come before the
Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business, July 5,
1996, as the record date for determination of stockholders entitled to
notice of and to vote at the Meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE
DATE AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE
ENVELOPE ENCLOSED FOR THAT PURPOSE.
JAMES R. HAGAN
Secretary
July 11, 1996
<PAGE>
PANATECH RESEARCH AND DEVELOPMENT CORPORATION
-----------------------------
PROXY STATEMENT
-----------------------------
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of Panatech Research and Development Corporation (the
"Company"), in connection with the Annual Meeting of Stockholders to be
held at the offices of Palmer & Dodge, 1 Beacon St., 24th floor, Boston,
Massachusetts on August 15, 1995 at 10:00 a.m., and at any and all
adjournments thereof. The Company's telephone number is (505) 271-2200.
The costs of solicitation of Proxies will be paid by the Company.
Proxies may be solicited in person or by mail, telephone, telegram,
mailgram, or other means. In addition, the Company's officers, directors
and other regular employees, without additional compensation, may solicit
Proxies personally or by other appropriate means. Banks, brokerage
houses, fiduciaries, and other custodians and nominees will be reimbursed
for their customary out-of-pocket and reasonable expenses incurred in
forwarding proxy soliciting material to their clients who are beneficial
owners of shares.
It is anticipated that this Proxy Statement and accompanying Proxy
will first be mailed to stockholders on or about July 11, 1996.
VOTING RIGHTS
Unless the accompanying Proxy has been previously revoked, the
shares represented by the Proxy will, unless otherwise directed, be voted
at the Meeting FOR the nominees to the Board of Directors. A stockholder
may revoke the Proxy at will at any time prior to the voting of the
shares by voting in person at the Meeting or by filing with the Secretary
of the Company a duly executed Proxy bearing a later date or an
instrument revoking the Proxy.
Only stockholders of record of the Company's Common Stock as of the
close of business on July 5, 1996, will be entitled to vote at the
Meeting. On July 5, 1996, there were 3,975,175 shares of Common Stock
outstanding, each of which is entitled to one vote per share.
A majority of the outstanding shares constitutes a quorum at the
Meeting. Abstentions and broker non-votes are counted for purposes of
determining the existence of a quorum. Directors are elected by a
plurality of the votes cast. Votes withheld in connection with the
election of directors are excluded from the vote and have no effect.
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<PAGE>
ELECTION OF DIRECTORS
The Board of Directors has nominated, and it is the intention of the
persons named in the enclosed Proxy to vote for the election of, the four
nominees named below, each of whom has consented to serve as a director
if elected. The directors hold office until the next Annual Meeting of
Stockholders and until their respective successors have been elected and
qualified. All of the nominees have been previously elected by the
stockholders of the Company. Although the Board of Directors does not
anticipate that any nominee will be unavailable for election, in the
event of such occurrence, the Proxies will be voted for such substitute
nominee, if any, as the Board of Directors may designate.
The following information is supplied with respect to the nominees
for director:
Name Age Principal Occupation
---- --- --------------------
Arthur J. Rosenberg 69 President and Treasurer
Joseph Elmaleh 57 Chairman and Chief Executive Officer
of East Mediterranean Oil & Gas Co.
Paul B. Rosenberg 64 President and Chief Executive
Officer Tech/Ops Corporation
James T. Stamas 64 Dean, Boston University School
of Hospitality Administration
See "Ownership of Common Stock" for information concerning the
beneficial ownership of the Company's Common Stock by nominees for
director.
Dr. Arthur J. Rosenberg founded the Company in 1981 and has served
as President, Treasurer and Director since that date. Dr. Rosenberg and
Paul B. Rosenberg are brothers.
Dr. Joseph Elmaleh has been a director of the Company since 1981.
He is Chairman of the Board and Chief Executive Officer of East
Mediterranean Oil & Gas Co., which is engaged in oil and gas marketing,
and Senior Vice President of Elmco Holdings, Ltd., an international
investment company involved in oil, technology and industry. From 1982
to April 1996, Dr. Elmaleh was Chairman of the Board of Jerusalem Oil
Exploration, Ltd. and the Chairman and Chief Executive Officer of
Isramco, Inc. (NASDAQ). Both of such companies are engaged in oil
exploration and development in Israel. He is also a director of Health
Science Properties, Inc., a real estate investment trust based in
California.
Mr. Paul B. Rosenberg has been a director of the Company since 1985.
Since February 1, 1988, he has been President and Chief Executive Officer
of Tech/Ops Corporation, a privately owned management and consulting
company. Prior to that, for more than five years he was Vice President,
Finance and Treasurer of Tech/Ops, Inc., a manufacturer of electronic
instruments and a provider of personal dosimetry services. Mr. Rosenberg
2
<PAGE>
is a director of Landauer, Inc. (ASE) and Tech/Ops Sevcon, Inc. (ASE).
He is the brother of Dr. Arthur Rosenberg.
Mr. James T. Stamas has been a director of the Company since 1983.
Since February 1, 1995, he has been Dean of the Boston University School
of Hospitality Administration. He has been a principal of Stamas
Partners, a privately owned management consulting firm, since January
1988. For more than five years prior thereto, Mr. Stamas was Senior Vice
President and Chief Administrative Officer of Omni Hotels.
Board of Directors and Committee Meetings
- -----------------------------------------
The Board of Directors held five meetings in the fiscal year ended
March 31, 1996. The Audit Committee consists of Paul B. Rosenberg and
James T. Stamas. The Audit Committee is responsible for periodically
reviewing the financial condition, and the results of audit examinations
of the Company with its independent accountants. The Audit Committee
held two meetings during the fiscal year ended March 31, 1996. The Board
of Directors has not designated a nominating or compensation committee.
Directors' Compensation.
- -----------------------
The Company pays non-officer directors a quarterly fee of $3,125,
and reimburses them for out-of-pocket expenses incurred in attending
Board or Committee meetings. Paul B. Rosenberg provides financial and
accounting services to the Company in the capacity of Chief Accounting
Officer pursuant to a Consulting Agreement for which he was paid $40,000
in fiscal year 1996.
EXECUTIVE OFFICERS
The Company's executive officers are as follows:
Name Age Position
---- --- --------
Arthur J. Rosenberg 69 President and Treasurer
Robert J. Perret, Jr. 38 President, ASM Company,
Inc. ("ASM")
Dr. Rosenberg founded the Company in 1981 and has served as
President, Treasurer, and a director since that date.
Mr. Perret joined ASM, the Company's operating subsidiary, in
November 1989. From July 1988 until November 1989, he served as Division
Manager of Operations at W.S. Shamban Company, a manufacturer of advanced
engineered thermoplastics. From April 1986 until June 1988, he served as
Development Manager for Parker Hannifin Corp., a manufacturer of fluid
power systems.
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EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table provides compensation information on the Chief
Executive Officer and the only other executive officer of the Company
(the "Named Officers") for services in all capacities during fiscal years
1996, 1995, and 1994.
<TABLE>
<CAPTION>
Long-term
Compensation
-------------
Annual Compensation Securities
Name and Fiscal ------------------- Underlying
Principal Position Year Salary Bonus (1) Options
- ------------------ ---- ------ -------- -------
<S> <C> <C> <C> <C>
Arthur J. Rosenberg 1996 $160,000 $80,000 0
President & Treasurer 1995 160,000 80,000 0
1994 160,000 80,000 0
Robert J. Perret, Jr. 1996 120,000 114,640 0
President, ASM 1995 120,000 117,860 25,000
Company, Inc. 1994 120,000 35,000 10,000
</TABLE>
<TABLE>
<CAPTION>
Name and Fiscal All other
Principal Position Year Compensation (2)
- ------------------ ---- ----------------
<S> <C> <C>
Arthur J. Rosenberg 1996 $37,096
President & Treasurer 1995 37,096
1994 37,096
Robert J. Perret, Jr. 1996 4,923
President, ASM 1995 2,223
Company, Inc. 1994 2,223
</TABLE>
_______________________________
(1) Bonuses were determined in accordance with the terms of the
Employment Agreements described below.
(2) Represents premiums paid for life insurance for Dr. Rosenberg and
premiums paid for term life and disability insurance for Mr. Perret.
The cash surrender value of Dr. Rosenberg's life insurance policy,
presently $176,000, remains the property of the Company. See
"Employment Agreements" below.
4
<PAGE>
Employment Agreements
- ---------------------
On March 3, 1994, the Company entered into a three-year Employment
Agreement with Dr. Arthur J. Rosenberg pursuant to which the Company
agreed to employ Dr. Rosenberg as its President and Chief Executive
Officer from April 1, 1994 until March 31, 1997 at a base annual salary
of not less than $160,000. Dr. Rosenberg is entitled to the use of a
Company-owned and maintained vehicle and to a deferred bonus equal to at
least 30% but not more than 50% of his annual salary, the exact amount to
be determined by the Board of Directors. The Employment Agreement also
provides for disability payments to Dr. Rosenberg should he be unable to
perform his duties due to illness or injury ranging from $160,000 to
$96,000 per year. Pursuant to the Employment Agreement, the Company also
pays for a universal life insurance policy on Dr. Rosenberg's life in the
face amount of $1,000,000. The cash surrender value of the policy
remains the property of the Company and the balance is payable to Dr.
Rosenberg's beneficiary. The Employment Agreement may be terminated at
any time for good cause as defined in the Agreement.
On March 3, 1994, ASM entered into a three-year Employment Agreement
with Robert J. Perret, Jr., whereby ASM agreed to employ Mr. Perret as
its President through April 1, 1997, subject to extension by mutual
agreement, at an annual base salary of $120,000 per year, which was
increased to $150,000 per year effective April 1, 1996. Mr. Perret is
entitled to an annual bonus determined according to a formula based upon
return on net assets employed. ASM also provides Mr. Perret with an
automobile, term life insurance in the face amount of $500,000 (of which
$350,000 is for the benefit of ASM and $150,000 is for the benefit of Mr.
Perret's designee) and disability income insurance in an amount equal to
67% of his annual base salary should he become disabled. The agreement
may be terminated at any time for good cause as defined therein. If the
agreement is terminated without good cause, or if Mr. Perret is willing
to extend the Agreement, but ASM declines to do so, Mr. Perret is
entitled to severance pay of $10,000 per month for a period of up to
twelve months, less the amount of any income earned by him from other
employment. Mr. Perret is prohibited from working for or having any
other relationship with a competitor of ASM for a period of one year
following any termination of his employment with ASM.
5
<PAGE>
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Information
<TABLE>
<CAPTION>
No. of Securities
Underlying Value of Un-
Options Exercised Unexercised exercised In-the-
in FY 1996 Options Held At Money Options at
-------------------- March 31, 1996 March 31, 1996 (2)
Shares ---------------- ------------------
Acquired on Value Exerc- Unexerc- Exerc- Unexerc-
Exercise Realized (1) isable isable isable isable
-------- ----------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Arthur J.
Rosenberg 0 $ 0 0 0 $ 0 $ 0
Robert J.
Perret, Jr. 56,250 $168,438 5,000 23,750 $15,000 $29,531
</TABLE>
_________________
(1) Aggregate market value on date of exercise, less aggregate
exercise price.
(2) Aggregate market value on March 31, 1996, less aggregate
exercise price.
Under the terms of the Company's Stock Option Plans, in the event of
liquidation or dissolution, or a reorganization, merger, or consolidation
in which the Company is not the survivor, or the sale of substantially
all of the Company's assets or of more than 80% of the outstanding stock
to another entity, outstanding stock options will become fully
exercisable 30 days before the effective date of any such transaction
unless the options are assumed by the surviving or successor corporation.
6
<PAGE>
OWNERSHIP OF COMMON STOCK
The following table sets forth certain information with respect to
beneficial ownership of the Company's Common Stock as of July 5, 1996, by
(i) each person known by the Company to be the beneficial owner of more
than 5% of the Common Stock, (ii) each Named Officer and director, and
(iii) all executive officers and directors as a group.
<TABLE>
<CAPTION>
Number of Percentage
Name * Shares Ownership
------ ------ ---------
<S> <C> <C>
Arthur J. and Naomi C. Rosenberg 704,150 17.7%
P.O. Box 23160
Albuquerque, NM 87192
Joseph Elmaleh 8,750 (1) **
Paul B. Rosenberg 65,250 (2) 1.6%
James T. Stamas 33,750 (1) **
Robert J. Perret, Jr. 83,350 (3) 2.1%
All executive officers and directors
as a group (5 persons) 895,250 (4) 22.3%
</TABLE>
_______________
* Includes addresses of 5% or more stockholders.
** Less than one percent.
(1) Includes 8,750 shares subject to options which are exercisable
within 60 days.
(2) Includes 1,000 shares subject to Class B Warrants and 8,750 shares
subject to options which are exercisable within 60 days.
(3) Includes 5,000 shares subject to options which are exercisable
within 60 days.
(4) See Notes (1) through (3)
Compliance with Section 16 of the Exchange Act
- ----------------------------------------------
The Company's executive officers, directors, and ten per cent or
more stockholders are required to file reports with the Securities and
Exchange Commission with respect to any changes in their beneficial
ownership of the Company's equity securities. All such reports were
filed on a timely basis during the past fiscal year.
7
<PAGE>
INDEPENDENT ACCOUNTANTS
It is the current intention of the Company's Board of Directors to
select and retain Arthur Andersen LLP as the Company's independent
accountants for the current year. Arthur Andersen LLP conducted the
audit for the fiscal year ended March 31, 1996. A representative of
Arthur Andersen LLP will be present at the Meeting, and will have the
opportunity to make a statement if he so desires and to respond to
appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder intending to submit to the Company a proposal for
inclusion in the Company's Proxy Statement and Proxy for the 1997 Annual
Meeting must submit such proposal so that it is received by the Company
no later than March 10, 1997.
AVAILABILITY OF FORM 10-KSB
A copy of the Company's Annual Report on Form 10-KSB for the fiscal
year ended March 31, 1996, without exhibits, as filed with the Securities
and Exchange Commission, is included in the Annual Report to Stockholders
which accompanies this Proxy Statement. Stockholders may also obtain a
copy of the Form 10-KSB by writing to the Company at P.O. Box 23160,
Albuquerque, NM 87192-1160.
DISCRETIONARY AUTHORITY
While the Notice of Annual Meeting of Stockholders calls for the
transaction of such other business as may properly come before the
meeting, the Board of Directors has no knowledge of any matters to be
presented for action by the stockholders other than as set forth above.
The enclosed Proxy gives discretionary authority, however, in the event
any additional matters should be presented.
STOCKHOLDERS ARE URGED TO IMMEDIATELY MARK, DATE, SIGN, AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED, TO WHICH NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
JAMES R. HAGAN
Secretary
Albuquerque, New Mexico
July 11, 1996
8
<PAGE>
PANATECH RESEARCH AND DEVELOPMENT CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
AUGUST 15, 1996
------------------------------
The undersigned hereby constitutes and appoints Arthur J.
Rosenberg and Paul B. Rosenberg, and each of them, the attorneys and
proxies of the undersigned with full power of substitution to appear and
to vote as designated below, all of the common Stock of PANATECH RESEARCH
AND DEVELOPMENT CORPORATION held of record by the undersigned on July 5,
1996 at the Annual Meeting of Stockholders to be held on August 15, 1996,
or any adjournment thereof.
(1) ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote
(except as indicated to the for all nominees listed
contrary below) below
Joseph Elmaleh, Arthur J. Rosenberg, Paul B. Rosenberg,
James T. Stamas
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOM-
INEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
- ---------------------------------------------------------------------
(2) IN THEIR DISCRETION, ON OTHER MATTERS WHICH PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED UPON BEHALF OF THE BOARD OF DIRECTORS OF PANATECH
RESEARCH AND DEVELOPMENT CORPORATION. IF NO VOTE IS INDICATED, THIS
PROXY WILL BE VOTED WITH AUTHORITY FOR THE ELECTION OF DIRECTORS.
YOU ARE URGED TO DATE, SIGN AND RETURN PROMPTLY THIS PROXY IN THE
ENVELOPE PROVIDED. IT IS IMPORTANT FOR YOU TO BE REPRESENTED AT THE
MEETING. THE EXECUTION OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE
IN PERSON IF YOU ARE PRESENT AT THE MEETING.
I will / / Will Not / / Attend the Meeting
IMPORTANT: Please sign exactly as your name or names appear on the share
certificates, and when signing as an attorney, executor, administrator,
trustee or guardian, give your full title as such. If the signatory is a
corporation, sign the full corporate name by duly authorized officer, or
if a partnership, sign in partnership name by authorized person.
Date________________, 1996
Signature:________________
